My Investing Journey

July 3, 2011 Leave a comment

Today, I have decided to document my every move as I try to invest in the stock market. I want to share what stocks I buy, why I bought them, when I sold them, and why I sold them. And maybe a few other things as we go along. To start this, let me first give you a little background story to catch you up.

A few years ago I read a book by Phil Town. Well, I’ve only read about half of it so far. This book was was about investing and it was written for simple, ordinary people like you and me. After reading the first half of the book I got very excited about investing but… I didn’t do anything about it.(I will read the other half of the book)

Then something happened. I got a new job. A bigger, better, more responsibility kind of thing. I was forced to do something with my retirement from my previous employer. So I rolled it over to an IRA account online, which I highly recommend, and took Phil Towns advice. I was going to start investing for myself.

About a month ago I purchased my first stock and am still reading the book. Now that you are almost caught up, I will go over buying my first stock in the next post.

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To Blog or not to Blog

October 5, 2010 1 Comment

It’s been a long time since I wrote anything.  Or should I say, it’s been a long time since I finished anything.   I have started two blog posts but have yet to finish them.  This is the third one and I will finish it.

It’s very hard sometimes.  The pressure to blog and be a wonderful blogger can get to you.  When your blog is so popular and followed by millions upon millions of people(more like 3 or 4), the stress and pressure of blogging can get you down.  Those people depend on me and what I blog about.  They want to know how to save $10 a month on their grocery bill, or how to negotiate a better price for their cable.  They need to know these things.  And yet, for a long time, I choose not to blog.  What is wrong with me?

Well, one thing that happens is life.  Life is changing every minute of every day.  It’s hard to keep up.  Just about the time I think I can sit and relax I realize I haven’t blogged for a long time.  This is not an excuse.  I really try very hard in my mind to visualize how it would be if I just blogged.  Just sit down at the computer and blog it… what a great idea for a T-shirt.  ”Just Blog It”.  Instead of a swoosh we could have an ink pen create some squiggly line.  Now that’s a life changing idea… This is why it’s so hard to blog.  My mind just can’t focus on one good idea before the next brilliant idea comes up.

So now I will actually finish this blog quoting Ecclesiastes Chapter 3:1 “To everything there is a season, and a time to every purpose under the heaven:”.  To all of the millions out there waiting for another bynumcents blog post about money, just remember how King Solomon said it best, (and I paraphrase) for everything under the heaven (including blogging) there is a season and the purpose of everything (including blogging) has it’s own time.  And that time and season are perfectly aligned with God’s plan.  The moment I blog about money again will be the exact moment you will need to read a blog about money.

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Everyone’s an Entrepreneur

September 22, 2010 1 Comment

I totally get why a blog about money could be very boring.  It’s not funny, interesting, or provocative.  It’s money.  Personal finance is boring.  Money this, Money that.  But hey, it’s what I am interested in.  I just want to help people help themselves.  I want people to be able to read my posts and think, “hey, I can do this and save a gazillion dollars”.  Wouldn’t that be awesome.  I also would like to write about being an entrepreneur.  Now more than ever people are starting their own businesses and trying to make a few extra bucks.  This is my passion.  I have no idea why it is my passion but it is and I will try to embrace this by writing about my experiences with my own start up business.  Running a business is just like a box of chocolates, you never know what you are going to get.(cheap, I know)  Your day could change drastically within the matter of a few minutes of doing the day-to-day stuff running your own business.  One day you are on cloud nine and the next you won’t make it past 3 p.m.

Every business at some point started very small just like your own business is now.  The only difference is they are conducting their business on a much bigger scale.  Those “Big” business owners go through the same ups and downs as the small business owners.  Another difference between them and us is, those owners just tell someone else to get something done, you on the other hand have to tell yourself to get something done.

The goal of both the “Big” and the “Small” is the same.  Make money doing what you love to do.  Or maybe I should say, make a living doing what you love to do.  There isn’t any shame at starting a business and failing.  I know some very successful business people who have built a major company that was very profitable and then lost it all at some point because of those ups and downs I was talking about earlier and you know what they did.  They built it back up again.  What else would they do.  They were doing something that they loved to do.  They were passionate about it.  So, failing is not an excuse.  At least not to me.

eureka

I always have great ideas.  No joke.  Wonderful, wonderful, money-making ideas that would be so amazing if I would just do it.  I keep telling myself this over and over again until something sticks.  Like this blog.  You can even ask my wife.  I was going to start this blog and help every single person on the planet with money.  Companies were going to pay me gazillions of dollars to put their ads on my site.  Newspapers and magazines were going to pay me to write money articles for them.  My top-selling book was coming out next year as well.  I was going to be the next Google Company.  Well…that was about six months ago.  I am 99% sure none of those things will ever happen but what I did do was start this blog.  I kept talking and talking about it until one day, it stuck.  And now I am boring you to death about money.  Now, with every new post I get more passionate about what I write about.  It’s great.

So, my advise to you during these horrendous economic times is to find something that just “sticks” and do something about it.  If it doesn’t work, and chances are it’s not going to, you’ll figure it out.  Remember, failing is not an excuse.  Figure out what you are passionate about and what you absolutely love to do and then come up with a way to make money at it.

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Credit Cards are for Smart People, Part 1

September 22, 2010 1 Comment

If you are not financially savvy don’t use a credit card.  It took me and my wife nearly three years of marriage before we decided to start using a credit card.  Before that we weren’t smart enough.  I truly believe that.  It probably took us that first three years of marriage to just get acquainted with our finances and what our expectations were of each other financially.  In fact I don’t think that learning process ever stops.

Some will argue that you should never use a credit card.  Some say that using a credit card will eventually lead to debt and more debt.  I have a different viewpoint.

Although the above statement can be true in many situations, credit cards can be used as a great financial tool if used correctly.  So many credit card companies offer a variety of rewards on each and every purchase that is made on the card.  Over the course of the year, those rewards could end up being substantial.  For example, take a couple that spends $3,000 a month on their credit card.  Their reward for using the credit card is getting 1% cash back on all purchases and a promotional 5% cash back on certain types of purchases that change each quarter, like purchases to grocery stores or gas stations.  In this case, if the couple spent $500 of that $3,000 a month at the grocery store they would end up receiving $25 cash back from the grocery store purchases(5% of $500) and another $25 cash back from everything else(1% of $2,500).  That is a total of $50 cash back for the month.  Total that over the course of the year and you are looking at a total cash back reward of $600.  So, the point  is,  there is money that could be saved by using a credit card.

But…like with anything, there are guidelines and limits that should be followed when you use a credit card for regular day-to-day purchases just to save on cash back reward programs.

One of the most important rules is, DO NOT CHANGE YOUR SPENDING HABITS.  Let’s say you and your wife have been spending very wisely and only spending what you have, not using a credit card, and saving as much as possible.  Then you decide to start using a credit card to take advantage of the rewards programs.  Once you get your credit card and start using it, you think, wow… this is easy, and you start using the credit cards to get all of those things that you never bought before because you didn’t have the money.  THIS IS BAD.  If this happens, you will be putting yourself in financial trouble.  If this habit continues over the course of a year, you will accumulate so much credit card debt that it could take years and years of financial hardship to get rid of it.

Another very important rule is to always, always, always pay off your statement balance every month.  This does two things for you financially.  It ensures that you are staying on top of your finances and not overspending or changing your spending habits(which we discussed above).  It also forces you to monitor your spending just like you would if you weren’t using a credit card.  Get it in your head, say it over and over again.  You will pay off your statement balance every month.  If you don’t, it will defeat the purpose of having a rewards credit card in the first place and over time it will cripple you financially.  DO NOT use a credit card if you can’t pay it off every month.

What we are really trying to do here is maximize our spending power and savings.  We want to use a credit card as a tool to save more money then we normally wouldn’t be saving by not using it.  It makes no sense to get a credit card, max it out, and then only pay the minimum payment every month to pay it off.  In that scenario the credit card holder is NOT maximizing their spending power or savings.  They are losing money by paying credit card interest on everyday expenses.  This goes back to the age old theory, if you don’t have the money to buy something then don’t buy it.  Having a credit card does not mean you have an extra bank account with money in it at your disposal.  Understand, it’s only a tool and if it’s used properly it can save you money.

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Patience is Good

September 15, 2010 Leave a comment

As with almost everything in life, good things come to those who wait.  It’s no different for financial freedom.  We live in a get rich quick society that embraces the thought of acquiring a lot of money, fast.  Although it’s not a bad thing if you are fortunate enough to acquiring a lot of money in a short amount of time, the reality for many of us is a month to month or even day-to-day financial struggle.  Part of realizing financial peace and stability in today’s world depends greatly on how patient you are willing to be with your finances.

Take a look at your parents or grandparents.  Most of them today are in a state of financial security, and most of them will tell you that it took many years of hard work to get there.  It wasn’t an overnight success story for most, instead it was years of watching where they spent their money, making smart financial decisions, and a lot of hard work to keep a steady income.  I’m not saying they didn’t take risks either.  Most of them can give you numerous examples of when they lost money or were living day-to-day financially and couldn’t see the light at the end of the tunnel.  That’s when their financial patience was most important.

How do you have financial patience?  Most of this advice can be summed up in one word… Savings.

If you don’t have the money to buy it, don’t buy it.  Instead, save a little bit here and there (actually put cash in a labeled envelope) and when you have enough, then go buy it.  Reward yourself for saving.

If you are unhappy with your job and need to find another one, don’t quit before you have another source on income.  Be patient.  If you rush into another job just to get out of the one you are currently in, it might be just as bad.

You want a new car?  Don’t go into debt just because you want a new car when your old car is just fine.  If it’s a need and you don’t have any savings, be smart about what car you buy and how you finance it.  If you know you might need a car in the future, start saving now for a down payment.  Don’t think of buying a car as an investment, rather think of it as a necessity.  It gets you from point A to point B.  It’s in the same category as the gas you have to put into it to use it.  You wouldn’t finance the gas for your car over 5 or 6 years.

Want to start your own business?  Start small and work your way up.  Do the research before you take out a loan or borrow money from someone else.  Make sure your business can and will survive in today’s economy.  If you can start the small business without borrowing any money, do it.  If it means sacrificing some business expenses, then so be it.  You might even think about getting another job to supplement your income while the business grows.

Don’t be rushed into buying anything.  We had a home security system salesperson come to our door one Saturday afternoon trying to convince us to switch monitoring companies.  When I told him I needed to look over everything before making a decision he literally didn’t understand why.  I asked him to come back the next weekend or to let me call him and he informed me that that wasn’t the way he does business.  In his mind it was either take the plunge right then or not switch companies at all.  So, I finally convinced him to come back the following week and he never showed up.  I haven’t seen him since.  Yeah, I might have been able to save a little money on my monitoring service but I did not want to be rushed into it, especially from a random salesperson.  Who knows, it could have been a scam.

If you have debt, come up with a plan to pay it off.  The key to paying off debt is to not add anymore debt.  Want to pay off your credit card?  Stop using credit cards.  Make the necessary payments every month and then some, if you can.  Need to pay off a vehicle?  Don’t buy another vehicle.  Try to pay more than the minimum every month.  It will take patience, but those things will be paid off eventually, as with all your debt if you stick to your plan.    And in the meantime, you will learn how to live without using credit cards and other borrowed money.

“He that can have Patience, can have what he will”  Benjamin Franklin

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One Day at a Time

September 9, 2010 Leave a comment

The hard life of an accountant.  I know that sounds a little ridiculous but it’s true.  Sometimes, it’s very hard to be an accountant.  For example, September 1 – 11 is very rough on me.  It’s not really hard to do, there is just a lot of things to get done that include a lot of details.  Just for kicks I took the liberty to write a quick journal of those days from my perspective of being an accountant.  As you read this just remember that during all of this I still am able to forget about work once I get home.

Wednesday, September 1 – Inventory of Store.  We are a small gift shop so we aren’t equipped with fancy scanners and such, so we count our inventory manually on legal pads.  This takes about 7 hours total to complete with three store clerks and me counting from 8 a.m. to  3 p.m.  We did stop to eat a bite for lunch for about 30 minutes.  After we are done I send the store clerks home and I start manually entering the counted inventory from the legal pads to the computer system.  I work on this until around 5 p.m.

Thursday, September 2 – Finish Inventory.  I spend the first 3 hours of the day entering the inventory in the system.  Then I have an 11 a.m. meeting with the boss to discuss our investment options which takes about an hour.  Then lunch and then back to inventory.  Get inventory completed about 3 p.m.  Now, I can get a few of my normal day-to-day things done before I have to get right into fiscal year-end financials.

Friday, September 3 – Friends.  My wife and I have the day off.  Some friends are staying with us for a few days so no work completed for at least a couple of days.

Saturday, September 4 – More Friends.

Sunday, September 5 – Family Reunion.  Our friends are gone now but my wife’s grandparents take us to a family reunion which takes up most of the day.  Still, after we get home I start working on a bank reconciliation and a monthly financial statement for a client.  I get the bank reconciliation done in a few hours but the monthly statement will have to wait until tomorrow.

Monday, September 6 – Labor Day.  We aren’t working our regular jobs today but I finish the financial report in the morning for the client but need to tweak it just a bit before emailing it off.  I put the tweaking off until later that day but get the final result emailed off to the client for their meeting later on in the week.

Tuesday, September 7 – Sick Day.  I get to work and start right in on finishing out the fiscal year.  I must have all of my year-end reports done by Wednesday so that my reports can be put into the executive committee meeting booklet for Saturday.  Then I have to complete a power point presentation for the meeting about my reports.  So I get right to work.  I am making progress with my year-end transactions and then I get sick.  It’s about noon and I really can’t work anymore.  My wife takes me home and I try to get better all afternoon.  I actually feel a little better by about 4 p.m. so I decide to do a little bit of correspondence with a few of my clients.  Take care of a few things that I have needed to do for a while.  After about 45 minuets of this I feel sick again.  It’s going to be a long night.

Wednesday, September 8 – Reports Finished.  Today I fell better so I take advantage of it and really push myself to get the year-end financial statements completed.  I get all the year-end transactions done by 3 p.m.  Now I am ready to print all of my stuff for the executive committee meeting booklet.  I finally get it all printed just the way I need it at about 5 p.m.  It’s ready to go in the book.

Thursday, September 9 – Books and PowerPoint.  We will be putting the books together for the meeting.  Hopefully this will only take up the morning.  We have all the paperwork compiled for the books so now it’s just assembling them.  Once this is done I will start on my PowerPoint presentation for Saturday’s meeting and hopefully finish it by 5 p.m.

Friday, September 10 – Birthday.  Today is my wife’s birthday.  That is what I am most concentrated on today but will need to finish anything that hasn’t been finished yet for the meeting on Saturday.  I will go over the PowerPoint presentation in the board room to make sure everything is ready to go.  If everything is set I will start catching up on day-to-day transactions that I have had to put off all this week.

Saturday, September 11 – Meeting.  Today is the meeting.  The meeting will last from about 9 a.m. to 12 p.m.  My part will only take about 15 to 20 minuets.  Hopefully all of my numbers are comprehensible  and my presentation is clear and precise.  We’ll see just how many questions I get.

After 12 p.m. I feel like yelling “Freedom”.  It’s like a weight has been lifted off of me until the next month rolls around and it starts all over again.  At least I won’t have another executive committee meeting for three months which means no deadline for reports or preparing a PowerPoint presentation, and I don’t have to do inventory for another year.  Yea, I think next month might be a little easier.

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Setting Goals

August 30, 2010 Leave a comment

Goals, when used properly, can be the most effective resource for financial stability.  Many people will tell you just how important goal setting is, but only a few will actually use their goals effectively.  Every single person has set some sort of goal in their life.  Some write them down and look over them all the time.  Some write them down and forget about them.  There are even people that have never written down a goal but if you ask them they could tell you exactly what they want out of their life.  It doesn’t matter if you write your goals down on paper or just know in your head what you want, everyone has some sort of goal.

Find out what your goals are.  If you have never written your goals down before then think about what you want out of life.  Do you want to finish school?  Do you want a higher paying job? Do you want to live and work in a specific location?  All of these things could lead a person to what their goals should be in their life.  If your goals are not clear to you then don’t push it.  Trying too hard to figure out what you want will only lead you down the wrong path.  It wasn’t until I was in my first job out of college that I had a clear view of what I wanted to do with my life.  From that clarity, I was able to write about 2 pages of goals for myself.  If I had tried to force the issue just a year earlier, it wouldn’t have worked.  Be patient.

Bigger goals create smaller goals.  If your goal is to receive a higher paying job you might need to go back to school or complete other training.  Even the goal of going back to school would then create even more goals such as, completing the GMAT and studying.  The smaller goals you create are the stepping stones in accomplishing the bigger goals in your life.

You change over time, so should your goals.  Know that your goals can and should change.  If you set a goal right out of college of working for a major corporation in a major city and then you get married, move, and have a family, your goal might change to working for a smaller corporation or moving up in the company you work for now.  My goal in high school was to be the Kansas Jayhawks men’s basketball head coach.  Because of this goal, during my first couple of years in college I was the student manager of the basketball team with hopes of getting into coaching.  As college went on, my life started taking another path besides coaching and thus my goals changed.  This does not mean that i failed or couldn’t accomplish what I set out to do, my life simply changed and so did my goals.  Your goals are not set in stone.

Add new goals.  Adding new goals is also a by-product of how our lives change over time.  When I sat down during that first job and wrote 2 pages worth of goals I did not include anything about giving.  Nothing about giving to a church or to any foundations.  I was young and broke and the thought of giving my hard earned money away wasn’t appealing.  Now, seeing the importance of giving, I have added more and more goals that pertain to giving.  Finding out more about yourself and your desires leads to adding more goals in your life.

You do not have to write down your goals for them to be effective.  I recommend writing your goals down and looking through them every so often, but if a goal is important enough to you, you will not forget about it.  It will be in the back of your mind forever.  If you just can’t decide if something should be your goal or not, then put it down anyway.  If you want to start your own business but have no idea what kind of business it will be then keep your goal very broad.  As you learn more about the kind of business that interest you then you can be more specific with your goals.  Like I said above, your goals will change over time.

Goals can be used for every aspect of your life.  They are an effective way to encourage you on your way to accomplishing your dreams and are essential in achieving financial stability and freedom.

“Without goals, and plans to reach them, you are like a ship that has set sail with no destination.”
Fitzhugh Dodson

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Giving

August 27, 2010 Leave a comment

Besides a person’s faith, I believe giving is the single most important aspect of someone’s life.

In the job that I am currently in, I have had the privilege to meet some very wealthy and prominent individuals.  These people are associated with the non-profit organization that I work for simply because of their generosity and the connection they feel with us.  Many come from different backgrounds and have come to be wealthy in different ways but I have found that there is one commonality between all of them.  They Give.  They think that what you get out of life depends on what you give.  I have heard every single one of them say that if it hadn’t been for what they had given throughout their lives they wouldn’t have what they have now.  And I believe them.

Check out the following article, “40 billionaires pledge to give away half of wealth”.

Bill Gates and Warren Buffett are very wealthy, but they and others have decided that it is more important to use their wealth to help others.  The person who gives just a little bit is no different then Bill Gates and Warren Buffett in respect to giving.  Gates & Buffett make the news because the news is interested in how much they are giving.  While you and I will probably never make the news for our giving, it’s still very important.  Giving not only helps others, it also benefits the giver as well.  Besides the tax write off (you should always get a receipt) and the warm fuzzy feeling you might get on the inside, giving opens up a whole bunch of other opportunities for people.  If you don’t know what I am talking about then try it.  Give a little here and there a few times throughout the year.  Find people or organizations who you feel comfortable with and can relate to and donate to them.  Donate your time, money, clothes, toys, or whatever and see what happens.

My wife is diabetic and has been for nearly all of her life.  She has Type 1 Diabetes or Juvenile Diabetes.  One of the things we are doing this year is the Walk for Diabetes with the Juvenile Diabetes Research Foundation.  This is just one of the things we have decided to give our money and our time to this year.  We can relate to this very easily and it’s an organization that is one of the worldwide leaders in funding research for Type 1 Diabetes.  Their goal this year is to raise $90 million for Juvenile Diabetes Research.

Find an organization in your community to donate your time or money to.  Find something that you can really relate to or have a passion about.  Chances are, whatever it is you can relate to or have a passion about, there is a good organization or foundation in place to give you the opportunity to donate.

No matter who you decide to give to, just do it.  Your world will be a better because of it.

“The value of a man resides in what he gives and not in what he is capable of receiving.” Albert Einstein

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Don’t Lose Money

August 26, 2010 Leave a comment

This is the #1 Rule according to Phil Town and his investing strategies.  If you are like me, you don’t have a whole lot of money, you still want to save as much as possible, you would like to invest but don’t know where to start, you worry about your future and the money you will or won’t have, you don’t want to just give your money to some random investor and let him decide the fate of your financial future.  Yep, that is exactly me.  I am not a financial guru nor will I ever claim to be one.  I have read Dave Ramsey, Phil Town, Suze Orman and others and if you have never heard of these people you might want to take a look at their stuff.  To me, these financial gurus have a very common sense approach to their expertise.  Just about anyone can understand what they talk and write about but more importantly most everyone can relate to their topics.

The one thing that stays in the back of my mind after reading Phil Town’s book is the fact that his investment strategy is based on not losing money.  That might be easier said than done for the average investor but it’s the right way to go about any financial investment.  If you are thinking about investing, know where your money is going to go, know how much it is going to cost you to invest and how long it will take to get that cost back, know the company or business you want to invest in backwards and forwards, be 100% confident that it’s a good investment for you.  That is the only way to not lose money in investing.   If you are not into investing or you just don’t think it’s the way to go with your money then don’t.

There are other ways to save and make money besides the stock market.  Part of the “don’t lose money” theory is to not do anything with your money if you are not 100% sure of what you are doing.  If your money just sits in a bank account then at least you are not loosing it.

Be careful about who you let invest your money.  If you don’t feel comfortable investing your money yourself than it might be a good idea to pay someone to do it for you, but be very careful and make sure you know the person very well.  Know exactly what it will cost you before you hand over the reigns.  There are some really good investors and investing companies out there but it’s up to you to find out which is the best to use.

If you want to read about saving money, money commonsense, and a better financial lifestyle, than pick up Dave Ramsey or Suze Orman.  They not only talk about financial issues but they also give insight to what money can do or become in a person’s life and how to avoid some of the simplest financial mistakes.

I am sure there are many more financial authors and personalities out there to choose from but choose wisely.  Do your own research and take responsibility for the financial stability of your life.

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Enchiladas

August 26, 2010 Leave a comment

My wife is a great cook.  She might not think so most of the time, but she really is.  And the amazing thing is that even though she puts up with me and all my craziness, she still loves to cook for me. This first blog is dedicated to her and how well she takes care of me and our house.  While I was working out in the yard tonight, doing the stuff that I love, mowing, trimming, edging, and making the outside of the house look presentable, she was in the kitchen stirring up the best enchiladas I’ve had in a long time.  She said she kind of mixed up the recipe a little bit and I have to admit, I hope she never changes it again.  And now we have left over enchiladas.  Now I love left overs.  I was raised on left overs.  To me, that is the main reason we have a refrigerator.  To store left over food to eat the next day.  You see, that is one good thing about having only my wife and I in our household, we get to have left overs.  In fact, we plan our week of meals around the left overs that we will be having from the meals that we cook.  I am so looking forward to tomorrow night when I can dig into those enchiladas again.  And sometimes they are even better the second time around.  So, thank you Christy for doing everything you do for me and our house and for making some wonderful meals in the meantime.  You truly are a great wife and an amazing cook.

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