Sell in May and Go Away

Basically May - Oct is very volatile typically so sell in may and buy back in Nov to create the most gains for yourself (according to this saying anyway).

This isn't always true but right now the news media outlets seem to think that we are going to have a very volatile May and for once I agree with them on something.  No one knows for sure so read up (link below) and make up your mind on this concept.





Sell in May and go Away - Investopedia


News media has been calling for a correction for some time now and they have been wrong for some time.  The top links are all about the subject.

Sell in May Google Links

To live a life determined by boss's and paychecks isn't really living a life

Just ask yourself if you want your worth to be determined by anyone else other than yourself.  Also do you want your life to be scheduled around what others want or what you want?

The point of this blog is to make you question these ideas and yourself so that you can really take control of your life.  You don't have to live by the status quo, but you do have to think to live outside the norm. If you continue to read I know you will generate an idea that works for you and can change everything about your future.

Quote of the Day: Robert Louis Stevenson

"Don't judge each day by the harvest you reap, but by the seeds that you plant."

Much like finance don't judge each day by gains and losses it will just drive you crazy.

Make investments today that will become much more in the future.

Apple update

The story of apple hasn't change much since my earlier post (seen below), except the price is hitting a new 12 month low below 400.  Really think about whether it is cheap or it is a stock who's brightest days have passed.



My case for Apple or against....

How many times have you said I need to make more money?

I have heard that statement time and time again and even said it myself.  The sooner you realize that you don't need more money, you need more assets, the better.

Assets essentially bring in more money without you having to put any extra work in.

You should acquire assets or investments to generate multiple streams of income.  As you add to your investments and they start to grow more rapidly you will produce more money that you didn't have to physically work for.  That money will generate more money if reinvested in your initial investment.

More money will not solve your problems because more expenses usually come with more money.

A persons spending tends to increase when they make more money.

So try to think of growth and sustainability when it comes to your finances.



Wikipedia Asset Definition

Buy off season or used money saving tip

Simple concept, but it takes will power to not satisfy your desire for instant gratification.  For example I waited until after the Superbowl one season and bought a giants jersey (they didn't win that year) for 40% off.

As far as used goes when my fiance and I were looking for furniture for our apartment we would go to wealthier areas and see what was for sale at estate sales, garage sales, and even barn sales.  We found a beautiful wood table with 4 chairs that looks like it's worth 1,000 at least but we paid 100 because the seller just wanted to move the item.

The Salvation Army can really have some gems too it all depends on what you are looking for.  Again we bought a great dresser for 50 bucks.  This thing was made with some effort it's not like we bought used IKEA.  Nothing wrong with getting IKEA, but there are better quality products out there.  Note when buying used really check the item out and make sure it's not put together with staples or plastic pegs.

Really consider estate sales a lot of items can be almost new you might not even notice and the prices are usually very low.

People are creatures of habit

Think about it we get up, go to work, drink a coffee, eat lunch, drink another coffee, go home, go to bed, wake up and do it again.

This is just a thought of the day but I encourage you to do something, anything to change it up.  Get yourself thinking differently and change your lifestyle.

Do something you've always wanted to do or go some place you've wanted to go.  Allow yourself the time to think and take a break from the usual day to day.

Great Video : RSA animate changing education paradigms

This video basically says that we realize that we need to change education, but we are going in the wrong direction and valuing the wrong things.

Doing things the way we've always done them just because that's the way we do it is not a good explanation for continuing down a path.  Change begins with thinking differently and creating a way to change the norm for the better.


Sir Ken Robinson is the speaker and has also been featured on TED.com
Change your perspective on education and the status quo

Think of your house as a Liability not an Asset here are my thoughts.

Assets bring in income that you don't have to work extra for in the form of rents, dividends, capital gains, royalties, and so on.

Houses generate expenses like insurance, mortgage payments, maintenance expenses, taxes, you get the idea.

If I ever seem negative on home ownership I'm not I absolutely want a house one day.  I just want to get people to think outside conventional wisdom so that they can better invest their money before and after their home purchase.

What are your thoughts on this?  What do you think of home ownership?

How do I invest if I have no money? Step 2 of the investing process

You start by making a budget so you can understand what you save every month.

See my beginning budget post here Budget with Excel

In that example the person saves 203 dollars every month.

Now that we know whats available to us lets talk about where to put the excess.

I think that you should always add a little to your savings because you have to be ready for expenses that you weren't prepared for.  Of the 200 put 50 towards savings and over time try to get your savings to equal 6 months of living expenses.  This way if you lose your job or fall on hard times you have something to help you through.  

Next I would add a little extra to credit card debt or school loans.  Which ever has the highest interest rate and pay that down so you can reduce the time you are in debt for.  Let's say we put 53 towards that column.

Credit Card tips

Now we are left with 100 to go to investments.  Depending on where you are with your investments you should disperse this amount evenly among your holdings.  For example if you own 5 stocks put $20 towards each holding.  If you are just starting maybe you want to put the whole 100 towards your initial investment in each holding.  That's up to you especially depending on the price per share of whatever it is you are buying.  What to buy will be in another post and I can't tell you what will be good for you so take my ideas, thoughts, and opinions to help you research what will be best for your situation.

Think about your assets, can they help you in a time of financial crisis?

This is just a thought, but really think about what you own.  If you were to lose your job today what do you own that would generate income for you so that you could survive or even thrive without that job.

Also what if you retire? Are you living off social security and a 401k/pension?  What can you do to make the most of it?

I ask questions so that people question themselves and the approach they are taking or will take.  Sometimes it's more important to make people think than to share what I want for a day.


So what do you do to generate consistent income or what will you do now that you thought about it?




Reading the book rich dad poor dad inspired this thought.

Why do I do this/ Why am I always learning

Let's talk about goals and time frames

I've heard the question where do you see yourself in 5-10 years a number of times.

I used to say I want to have a house, a better job, and so on.

A better goal without the time frame is that I don't want to need to work the rest of my life, I want to travel, I want to allocate my time as I see fit not have to do so based on other obligations.  I want to have all this at a young age and be able to enjoy it.

I want this for everyone not just myself because what's the use of having free time and things you want if so many others are struggling to get the same thing.  At the very least I can try to inspire you to do this for yourself and I hope that is what I'm doing by writing this blog.

The purpose of all of my posts

To really understand a subject you must be well versed in that subject.  True, but to really be successful you must know a little information about a lot of different subjects.

I post about more than just finance, because topics like government, taxes, and your health are all important in finance.  With more knowledge comes greater understanding of the industry as a whole, your finances, and your life.

I encourage you to learn about many different industries and ideas so that you can be creative with your life and your investments.

Specializing in only one field or subject can be limiting.  Don't limit your perspective.

Ted talk : Lawrence Lessig: We the People, and the Republic we must reclaim

Great talk to get you thinking today about politics and how the system is really poorly designed. The system is so attached to the people who fund it, rather than attached to the people who are being represented.

I don't want to give too much away just watch

A republic if you can keep it.

the link title is a variation of a Benjamin Franklin quote

Want to save more? Pack your lunch.

Everyone needs groceries, but usually people who buy lunch aren't offsetting that cost by buying less groceries.

We tend to overspend on lunch because it's usually more than just a meal that we are buying.  There are drinks and snacks that add to the costs.

Example

Lets say each lunch everyday costs 8.5

8.5 x 5= 42.5  per week

42.5 x 4 = 170 per month

170 x 12= 2040 per year

Just for eating lunch. Figure that if you pack you don't have to associate any extra costs for lunch becauses thats already part of your grocery bill.

Even if this was 5 dollars per day

5 x 5= 25

25 x 4 = 100

100 x 12= 1200

Treat yourself sometimes, but don't go crazy as you can see it adds up

To make it seem like less work you can make a bunch of sandwiches on Sunday and freeze one for each day.

Leftovers can also help ease the workload

Budget with Excel made easy Step 1 in understanding your finances

Let's get into something substantial today.

Really understand what you save each month after bills and other expenses.  That will allow you to take the next step with investing or getting out of debt quicker.

Here's an easy way to budget.

These numbers below are all fake and based on having a roommate.  The main point of this post is to show how simple a spreadsheet can be that will allow you to track your expenses and give a clear picture of exactly what you make every month.

Some people argue that budgets are like bad diets.  However I believe that in this digital age something like this can be done in 10 minutes or less.  Ten minutes is worth improving your financial life.  

The way to accomplish this is to use your credit card for every purchase.  This helps track all spending and allows you to accumulate points.  Also check your bank statements for those expenses that can't go on your credit card. Lastly make all the categories you need and put every item in its respective column even if its $2.

Now once you've built your spreadsheet all you need to do each month is change the numbers and save it under a different name.

I wanted to include a picture so people wouldn't have to click a link or download a file even though it doesn't look the best on the post.

If you really don't like the credit card idea then use your debit card.  That will still allow you to track everything easily.

Somethings to make sure you put on the spreadsheet are dinners out or lunches.

Functions  (These are for the bigger spreadsheet)

=Sum(E:E) totals everything in that column in any cell on the page that you want

=Q19-Q16 is how i totaled the take home cell

The best part is as the numbers change so do your totals.  This makes less work for you in the long run because of the equations you made now.





Spreadsheet by rows and then columns.  Play around to see what you like I included the simple equations at the top of each picture to help you build your own

I understand that online banking sometimes does this for you, but it has been very inaccurate in my opinion and counts money transferred to other accounts as being spent.  This is just another option for you.

My recent experience with saving and problems that come out of no where

So I've been dealing with some minor health problems lately. A have a cyst in my back that requires surgery because it has become very painful and is too big to remove any other way.  The cost will be between 1100 to 2500 to me.  Also I had to do all the work to figure out the costs because the doctor’s office and the insurance company aren't very helpful when it comes to determining the total cost to the patient.

Unfortunately it’s not relevant what’s right or wrong as far as how much work you have to do even though you are the customer.  You have to protect yourself.

I just wanted to share my personal experience to express the ageless advice of preparing for the unexpected. I will be fine, but if it was more what would I do?

Learn from my experience and be prepared.