I completely messed up investing in peer to peer loans through Lending Club by being greedy. Jim Cramer is famous for saying that both bulls and bears can make money, but pigs get slaughtered. What he means is that it is one thing to make money or make a living with your investments. But, to try and make a killing on them, you will often be crushed by those very same investments. I’m ashamed to say that I got greedy with my Lending Club investments and tried to push the envelope, and I got burnt. Keep reading to see what happened and what I’m doing now with the new loans I’m investing in now through Lending Club. Peer To Peer Loans … Read more
There are many different ways that investors use to try and determine a stock’s share price and what it is really worth. Typically, investors fall into one of two categories. They are either financial analysis investors or technical analysis investors.
Investors who use financial analysis use many means to price a stock’s shares. Two of the most popular methods are the price to earnings ratio simply called the PE ratio and growth rate.
What Is A PE Ratio? And, How Do You Calculate It?
A PE ratio is the value of the price of a share of stock divided by the company’s earnings per share. For example, if you look at one of my favorite stocks that I personally own, Dr. Pepper Snapple Group (Ticker Symbol: DPS), its current PE ratio is 15.67 as of September 25th, 2011.
The last week, I wrote an overview of Dave Ramsey’s baby steps system from his book, The Total Money Makeover, and I have been dissecting each of his individual baby steps as well. The Total Money Makeover is a personal finance book that I highly recommend and one of the greatest personal finance books to read. Baby step 4 talks about investing for your retirement. Today, we will look at Baby Step 4 in more detail which is to invest 15% of your income for retirement. There are seven Dave Ramsey baby steps that you should follow in order that will lead you to financial peace. Dave Ramsey’s baby steps are… Baby Step 1 – $1,000 Emergency FundBaby Step 2 – Pay Off All Of Your Debt With … Read more
There have been some turbulence in the stock market recently. There are been more days than not that have seen a hundred point swing one way or another. But, you shouldn’t fear a falling stock market.
So may even think that the US stock market is in a financial crisis. So, what is an investor to do during a turbulent, falling stock market?
3 Things To Do In A Falling Stock Market
Tune Out All Of The Noise
One thing that I do that many people do not understand is that I don’t watch the news. There is so much negative press out there that I often will get bummed out with all the news.
And, now with hundreds of television stations and many dedicated strictly for financial news, there are so many people out there with an opinion about a falling stock market. Everyone has an idea or a thought on where the market is headed, why things are happening the way they are, and of course what you should do. And, do nothing is hardly ever on that list.
It is hard to earn a commission or capture people’s attention if you tell them to do nothing. But, often that is exactly what you should be doing…nothing.
So, turn off the television. Tune out the noise. There is so much noise out there.
Do you have money troubles? I can remember being over my head in credit card debt after college. I ended up burying my head in the sand so I wouldn’t have to deal with it too. You have to work on your finances every day.
How often do you think about your finances? Or, do you stick your head in the sand and just continue spending money you don’t have?
How often do you think about your budget or tweak it? Do you follow the news of companies you own stock in? Do you know what the mutual fund managers of your funds are doing or thinking?
If you focus on your finances a little bit each day, you will be able to handle and understand them better than ever. I’m not talking about buying and selling stocks everyday or watching their prices like a hawk. I’m talking about raising your financial IQ.
Work On Your Finances Every Day
You Are Good At What You Practice
It may not exactly be fun to everyone, and it may invoke memories of piano lessons of our youth. But, you are good at what you practice every day. Malcolm Gladwell is famous for pointing out in his awesome book, The Tipping Point, that it takes about 10,000 hours of practice at any one activity to become an expert at it.
So, all of you aspiring guitar players should definitely keep at it. The same is, of course, true for your finances. You have to practice to be good at it. What do I mean by practice? When was the last time you calculated your net worth? When was the last time you followed the stocks or mutual funds that you own in your retirement accounts?
Do you know the mutual funds top holdings and their rationale for it? Do you listen to conference calls of the companies you own stock in? It is not rocket science, but doing one small task each day will keep your finances in the forefront of your mind.
Send me your money questions about personal finance, investing, retirement, etc. If I pick your question and answer it here on the blog, I’ll send you a free copy of Dave Ramsey‘s book, “The Total Money Makeover”. Got Money Questions? Do you have a money question that you would love for us to tackle in our weekly blog post series “Reader’s Question”? Email us your money questions to Questions@MoneyQandA.com. If we pick your question to be featured, then we will mail you a free copy of Dave Ramsey’s book, “The Total Money Makeover” as a way of saying thanks! Do you already have a copy of Dave’s book? I don’t doubt it if you love reading about money and finances as … Read more