Four Ways To Becoming A Better Investor

Marshall Loeb on Market Watch has some advice one four ways to become a better investor.

1) Invest in businesses, not stocks - Invest in companies you know about and think will stand the test of time.

2) Don't go outside your comfort zone - Stick to what you know and companies that you feel comfortable in.

3) Go against the grain - Don't follow what everyone else is doing, do your own thing. By not following the pack, you may do better than the rest.

4) Don't be afraid to do nothing - sit on your stock for a couple of years, don't trade in and out of your stocks, it could lead to losses.

This advice is pretty good, seeing that the market is down. Instead of getting out and losing money, stick with the companies that you have some kind of knowledge of and wait for the turn around.

Walmart Rocks

About a month ago I purchased a blu ray disc at Walmart (Disturbia). Any way it turns out that the disc would not play. So a month later with no receipt I took my DVD to Walmart's customer service department, expecting to get rejected because one- I didn't have a receipt and two-the disc was opened, which violated both of Walmarts policies. No movie returns with out a receipt and no open movies. So expecting to be told to take a hike, I asked if I could exchange the disk and was surprised that they said yes. They didn't even give me a hassle for breaking their rules. So this is why I think that Walmart Rocks. I will continue to give them my business and will continue buying DVDs from them.

Starbucks Closing Stores

Starbucks will be closing 600 of its least earning stores. Displacing about 12,000 employees. It seems like you couldn't turn a corner without seeing a Starbucks. Now many of the Starbucks, built close to each other, may be closing down. Most of the closures will be stores that are considered unprofitable. Starbucks believes that the closures will help other stores profits. What a drag, hopefully none of the stores that I frequent will be shut down. It seems that our economic outlook is going down.

Oil Hits An All Time High

Oil prices have hit an all time high today. Oil is now $143 per barrel, which probably means that gas prices will be on the rise again. The national average is 4.08 per gallon. Stocks are also down, with investors worried that our economy is going down the toilet. My stocks have dropped big time. All I can do now is wait for the market to change and for me to be able to re-coop my money. So great news for a Monday morning.

Credit Card Horror Story

Even though we are trying to get out of credit card debt, I still find myself wanting to charge more stuff. It's like being a credit card junkie. The worst part is that it is me, not my wife who finds it so easy to bust out the credit cards from their hiding place. Well reading some different blogs, I can't remember which, but when I find it again, I will give credit to the author's idea. To keep herself from using her credit cards she actually froze them in the freezer. I thought what an awesome idea. If it's a real emergency you can bust them out and thaw out the ice, otherwise it would be too much hassle to mess with. If this doesn't work my next option will be to shred them all. Which I might end up doing anyway. Anyone have any other ideas that might work better?

Account Passwords

Since I am the one who takes care of all of our bills, investments, banking, and savings online, I have about 50 million passwords that I have a hard time remembering sometimes. Well actually a lot of times. Well I've been thinking about opening up a safety deposit box at our bank so that we can keep important papers and a list of our accounts and passwords. Well it turns out that this may be a really good idea. Check out Liz Weston's article on Don't take your passwords to the grave. So I will call around a check out the prices. It's not like we will need a very large box. Will keep you updated on my progress and the prices.

A Snag on the Road 2 Financial Freedom

I have hit a snag down the road, literally. Well I actually hit this snag a couple months ago. While on the way to work and flying down the highway I got a speeding ticket. So I had to shell out $100+ to be able to take defensive driving. As usual I forgot all about it and now have to shell out another 40 some dollars to take the class online and get my driving record shipped to me before my deadline. I may see if I can get an extension so that I am not rushing it and can find a cheaper class and buy me some time by ordering my driving record myself (it's $25 for a rush). The moral of the story is don't break the laws, follow the norms. For me since I am trying to get out of debt and watching all of my personal finances I am finding this a big waste of money. That's almost $200 that I could have spent paying off credit debt or investing. Like the commercial says that is going to cost me 200 Jr cheeseburgers. Oh well live and learn.

Credit Report Update

So my saga to get my credit report clean continues. Luckily with some happy news. When I received my free credit report this year I noticed a couple of unpaid debts that weren't mine. So I disputed them with the credit agencies. I had all of them removed except one from American Airlines that said that I owed them money on an employee voucher that was used in 2000. Well the funny thing is that I have never worked for American Airlines. So yesterday I called and talked to the collecting agency that is in charge of this account. I got myself all pumped up and ready to fight. I make the call and end up with a very nice, helpful collection agent. We discussed what the problem was, he talked to his supervisor, and resolved the problem. I just need to send in some paperwork describing my grievance and I am done. I definately was not expecting this. So thanks to the friendly collection agent I am one step closer to having my credit report fixed.

Property Taxes Are On The Rise

Because I'm starting to get interested in property investing, I've been checking out a lot of real estate articles. I came across this article on yahoo "The Hottest Part of the Housing Market:Taxes" and feel like this is something I understand. Though the housing market is still good here in Texas, a lot of homeowner's are finding out year to year that their property taxes continue to increase. Especially in the middle class and upper class neighborhoods. Though the upper class may not feel the bite, the middle class sure does. Working in insurance we get a lot of calls from our customers complaining each year about the property value and tax increases. Though we have nothing to do with this we do give them some options of fighting the increases. Here are some things you can do to get your property value lowered if you think it's too high.

1) First contact your county tax appraisal district to see what their rationale was on the increase and see if you can get them to change it.
2) Research the values of the houses around you and make sure your home is not the only home overvalued.
3) If worse comes to worse you may need to get an independant inspector to value your home. Usually the price for this is between $200-$400. So if it's something minor you don't want to waste your time, but if it's going to save you $1000 or more, it would definately be worth going through the hassle.

States are trying to get as much as they can out of taxing you and your property tax is a pretty eazy place to do it. Remember you don't have to stick with the value that they put on your home, you can always dispute the property tax and save yourself some money.

Looks Like A Winner

I would like to thank whoever posted the information on HSBC direct having ATM cards for their online savings account. In case of an emergency I would like to be able to get to my money without too much hassle. I know what you are thinking, having easy access will tempt me to spend it, but I am not too worried about that, I am pretty disciplined. At least I think I am. I've heard a lot of good things about both Emigrant Direct and HSBC Direct, but I am leaning towards HSBC right now because of the ATM card. So in the next day or two I will have made my decision and opened and account. Any other comments on either of these two banks would be appreciated.

Online Savings Account

Seeing that I need to get moving on setting up an Emergency Savings Account, I've started researching some of the online savings banks. It seems like there are a lot to choose from and they all offer pretty much the same options. The only difference is the interest rates they are currently paying. Here are some of the interest rates they are currently offering.

Ing Direct 4.40%
Emigrant Direct 5.15%
HSBC Direct 5.05%
Citibank 5.00%
CapitalOne 4.80
Wamu 5.00%

You can pretty much open any of these accounts by funding them with at least $1. There are no membership fees, no minimum balances, and you can transfer back and forth between your checking account. I think a couple of these even pay you for referrals. I am leaning towards Emigrant Direct, but haven't made up my mind yet. Anyone have any suggestions on which has the best customer service, online experience, etc...? I would appreciate any suggestions.

My Investing Progress

So being an Amateur Investor, I really haven't said much about my experiences since I started this blog. I read Rule #1 by Phil Town and have been trying to follow his system. I got in with a good margin of safety and with a company that I feel I know and understand. The stock was on an uptrend and doing pretty well, but with all the craziness in the market it dropped like a stone. Well I can't buck the system because the signals were there to get out, and I second guessed them. So anyway I was looking at the stock bottom out and was thinking, what have I got myself into. Though I was very tempted to get out, I decided to stick. Like Buffet's value investing, I knew that I had a good company, at a good price and that it would eventually rebound. Well the stock reversed and is on an uptrend again and I am about to break even. So I guess the moral is don't second guess, don't be emotional, and don't jump in and out at the wrong times. Even though I haven't made my mind up about the Rule #1 system. I figure I will give it a year to see how I do. I like Phil Town because he is pretty straight forward, he is very active in his blog, and will answer any questions that you have. Being new to investing I plan on continuing to learn all that I can. So one of these days I can graduate from amateur investor to mediocre investor.

I am liking Google More and More

I have always used the google search engine, and have just recently started to use foxfire, which I think is an excellent browser. I guess what I am trying to say is that I think Google is a good company. Well it turns out that they may just be a great company. In Motley Fool's article on yahoo, Google Does More Do-Gooding, it turns out that Google will be funding a for-profit charity that will fund companies targeting global warming, disease, and poverty. I think it's great when large companies give back to the community and world. Good job Google! You are number one in my book.

Teaching Kids About Money

Now that my wife and I are getting ready to have a child, I have been thinking alot about how we plan to educate him/her, especially about money, saving, and investing. I know that when I was growing up I just always knew it was there, we never talked about money or saving so I pretty much never did. I also didn't know about investing, but I sure knew about maxing out my credit cards. It wasn't until recently that I have gotten into investing and saving for retirement. Dan Caplinger's article Make Finances a Family Affair, on Motley Fool states that "Teaching your children about money is an extremely important part of your parental responsibilities. Because most schools lack any significant education about finances, it's up to [the parents] to create a strong foundation of knowledge that your children can use to guide their financial decisions. I know that I would be better off if I would have learned to save and invest at a younger age. One thing that many of the articles that I read left out is philanthropy. I believe that no matter how much you make, it is always good to give some money back to your community, church, people in need, etc.... I believe that this is a lesson that is very important to teach our children. One thing my parents did teach me was to give back, even if it didn't seem like much, helping someone else is always a good thing.

How do you teach your child about money?

1) Start at an early age with change and a piggy bank.
2) Give a weekly allowance for chores and split up the money into savings, spending, and giving(philanthropy).
3) As they get older get them started with a savings account(maybe a high interest savings account).
4) When they are old enough teach them how to invest and make their money work for them.

Hopefully I will be able to give our child a better understanding of personal finance than I had. What do you think? and what are some other things that would we could teach our child about money and finances?

Saving Money For A Rainy Day

I guess one of the goals I have neglected to set for my family is an emergency savings accout. I have recently read an article on Making Your Emergency Savings Automatic by David Bach the author of The Automatic Millionaire. For those of you who aren't sure of what this is, it is an account that you save money in for unforeseeable expenses- car repairs, home repairs, Dr's bills, etc.... The types of expenses that you would usually have to max out your credit cards for.
The article pretty much shows how to set up a cushion of money for these types of emergencies.
There are four basic steps to do this.

1) Make your rainy day fund Automatic. Bach says that if you don't make this process automatic chances are that you won't save. So each payday transfer a certain amount into a money market, savings account, etc....

2) Get your money out of your checking account. Put your money where you don't have easy access to it. Such as high interest savings account, money market, etc....

3) Put it in the right place. Make sure you are earning interest on your money. Don't let the banks make all the money.

4) Decide how big of a cushion you need. I have read all kinds of different amounts. I think the amount to shoot for is one that you are comfortable with and one that keeps you from having to use your credit cards.

I guess there is no time like the present to get started, so I guess my next step will be checking out some of the high interest online savings banks. If anyone has any suggestions I would appreciate any comments.

Can Money Buy Happiness?

According to Money Magazine it can as long as you change the way you shop and the way you think. Instead of buying fancy luxury cars, new boats, expensive wines and foods, and racking up charges on your credit cards; Money suggests that you invest in things that will make you happy. Mainly family, friends, and experiences. Have family and friends over for a BBQ, learn something new that will be a challenge to you, such as a musical instrument or golf, trips or vacations can create lasting memories and happiness, pets -though destructive and expensive- can not only bring you happiness, but can ease stress and lower your blood pressure. On the other hand impulse buys, expensive toys, new tech gadgets, only give you a short amount of pleasure, and then you are on to the next best thing.

I believe that frugality also can bring you happiness. No matter how much money you make if you live within your means and are frugal, I believe you are happier. Though I am just starting to get out of credit card debt and investing in my family's future, I feel a sense of relief that I am working towards a goal of financial freedom. This makes me very happy. Do I believe that money can make you happy? I believe that being finacially free can. What do you think?

Values...

Checking out some of my favorite blogs on pfblogs.com. I ran across the question of the day on
Money and Value . It mainly had to deal with whether or not you involved your personal values in your money decisions. I believe this is an excellent question. Because of my values I do not invest in anything that I believe either hurts the environment or does not give something back to the people. Though I know all businesses are out to make money, I do look for the ones that give back to their communities. Anyway I thought this was an excellent question and thought that I would like to share. Any comments would be appreciated.