Most of us can relate to the story of Ejovi Newere. He grew up in the Bed-Sty section of Brooklyn and did not have it easy coming up. After watching a close friend gunned down as a teenager and his mother succumb to drugs, Nuwere began searching for an escape and found it in technology. His uncle was an college educated man who own a computer. Ejovi began playing on the computer which led to a life of hacking. However, the life of hacking ended when Ejovi began to take the ethical approach. Now Ejovi is a self made millionare who is trying to help others become more technologically savvy. Below are the three things you can learn from his story.
Do the right thing
Ejovi broke down a company security access and called them to show them how he did it. He didn’t do it for a reward, he did it because it was the right thing to do. He was offered a career after that which led to him creating his own company.
Skid Row is a place that you probably never heard of. But it is a place in Los Angeles where impoverished families, drug addicts and schizophrenics fashion cardboard shelters from the merchants’ discarded boxes. And when times got hard, this is where you could find Orlando Ward. He was a high-school basketball star that later went on to play for Stanford. After a bad injury, he was never the same basketball player.
After his basketball career was over, he left Stanford to become a senior marketing representative for Xerox. However, this would be the start of a downward path as he became familiar with drugs and alcohol. He lost his job within 18 months. For the next few years, he continued to battle with cocaine and alcohol addiction. This addiction left him homeless and even landed him in jail a few times. His family supported him as long as they could until one day they refused to help him anymore.
Ward would go to the Midnight Mission for hot meals when he was hungry. Little did he know he would be running the place one day. Mission managers quickly realized that Ward needed to find something that would give him a sense of worth. His kitchen-duty assignment soon provided that. As Ward made progress, managers gave him more responsibility. He got a paying job in the stockroom, where he designed an Excel-based inventory system to smooth operations. In October 2000, Ward became the mission’s associate director for program development.
Today, Ward still visits Skid Row to help others just like him. He hasn’t forgot where he came from. But he is appreciative that he made it out. Moral of story: its not how hard you get knocked down, its how hard you try to get up.
You have to admit, this is COOL! What I love must about this story is the mother challenging her son to learn. This led to him doing research which led to him investing at an early age. To be 15 years old and worth $50,000 is pretty cool if you ask me. What would be even cooler is if we all challenged our children the way this parent challenged hers. What you should take out of this success story is that you don’t need a lot of money or be a certain age to get started with investing. As you will see in the video, the young man decided to educate himself. This is what led him to making smart investing decisions. So the moral of the story is that if educate yourself, you can start investing for yourself as well. Poor people make money to survive, rich people make money to buy assets that make more money.
What did he say check for
Before he buys any stock, he looks for certain ratios. First, he said he looks for the P/E (Price to Earnings) Ratio. A valuation ratio of a company’s current share price compared to its per-share earnings.
They’re baaaack. Not evil spirits, but your children. In a recent Pew Research survey, 39% of all adults ages 18 to 34 said they live with their parents now or moved back temporarily in recent years. The return can have huge implications on retirement.
“The incremental expense of taking care of an adult child can potentially affect savings and emergency funds. In addition, expected retirement funds may be inadequate for this unforeseen situation,” says John Anderson, president of In Sight Financial Management in Berwyn, Illinois. If parents begin to struggle because they’re helping their children, that’s an eventual lose-lose for all.
Here are three ways to make the transition smoother:
1. Don’t offer a free ride. Maybe you weren’t into “tough love” when they were growing up, but now’s the time. Don’t give in to the temptation to reduce your retirement savings so that you can cover your child’s expenses. Instead, maintain your contribution levels and require your child to get a job (or any job that will pay the bills) if he or she isn’t working.
“Pre-retirees will be successful if they can keep their monthly contributions the same, if possible. Replenishing lost income in retirement is often more challenging. At a minimum, whatever short-term or extra employment your child can obtain should allow him or her to compensate you to the extent they can comfortably maintain their savings,” says Anderson.
2. Be upfront about your financial situation. Be clear and upfront about the household budget and how their return will impact your finances and retirement.
“It’s important to avoid non-essential expenses so that retirement can continue to be funded at, or close to, the same rate,” says Anderson.
3. Draft a contract. While you don’t want to toss them out too quickly, less they come calling again, view the situation like a contract.
“All parties begin with the end date in mind and it’s measured with certain milestones,” says Anderson.
If your child is unemployed and doesn’t find a job commensurate with their skills in a set period, let them know it’s expected they find part-time employment to cover their expenses, which at least could help them save enough to move out and perhaps take on a roommate. Revisit the terms of your agreement so communication is ongoing and differences are aired. Remember too, says Anderson, “Depending on your age, dipping into retirement funds also may have severely adverse tax implications.”
Nas and Snoop Dogg are betting big on a new app that experts say is poised to take the investment world by storm.
The new app, Robinhood, aims at taking stock investing where few have gone before — and it plans to make it free and easy.
The current system forces potential investors to go online or call a brokerage firm like E-Trade or Charles Schwab. Those firms usually charge fees of $7 to $10 per trade.
And that is what Robinhood is looking to eliminate — kind of like taking back from the rich and giving to the regular joes.
Oh yeah, now there’s an app for that.
The app makers say, “Today, the average individual has to pay up to $10 per trade. We believe there’s something inherently wrong with that, and we’re on a path to change it. Robinhood’s powerfully engineered technology and carefully designed mobile experience will allow everyday investors to trade with zero commissions.”
Robinhood just closed a $13 million Series A financing round from some of the world’s most notable investors.
CNNMoney notes that only 14% of Americans own and trade individual stocks, “less than half the number of people who have a cat.”
And black Americans save and invest less than white Americans of similar income levels. Last year, the median amount black households reported saving to invest on a monthly basis is $189, compared with $367 among white households.
Learning how to invest is critical to acquiring wealth and makes a profound difference in every corner of life — from where one prefers to live and raise a family to when to retire.
Over the past half-century, trading stocks has been perceived as a game for the rich. Now there’s greater access to free online stock research than ever, and some online brokerage houses have made it easy to buy and sell stocks online.
But there is still nothing better than eliminating the middleman if you know what you are doing, and it’s those savvy individuals that Robinhood sees as a potential market.
According to CNNMoney, half a million people are reportedly on the waiting list to download the app when it comes out of the testing phase, sometime early next year. The company also notes that customers who use the app will not have to hold any minimum amount in their accounts.
“What [Snoop Dogg and Nas] got most excited about is our customers are the people who listen to their music,” Robinhood co-founder Baiju Prafulkumar Bhatt told CNNMoney. Bhatt noted that the stars have been helpful advisers since they are also business owners.
Other investors in Robinhood include Ribbit Capital; Howard Lindzon, co-founder of StockTwits and general partner at Social Leverage; Aaron Levie, founder of Box; Dave Morin, founder of Path, and Jared Leto.
In a generation that’s scrambling for employment opportunities, the thought of retirement and end-of-career financial goals is often met with pure silence.
Today, millennials make up 40% of unemployed workers, while Generation X and baby boomers make up 37 percent and 22 percent, respectively. But despite the current financial state of millennials and the struggle to find jobs, it’s never too early to start thinking about retirement goals and plans.
1. Get a financial advisor: All millennials should seek out a financial advisor in order to get a clear idea of how to set financial goals and what steps are needed to meet them. It is also important that millennials also educate themselves so that they can make informed decisions on their budgeting and investments.
The cost of a college education has dramatically increased over the past decade. As a result, parents and students have continued to accumulate more college debt and the ability to pay it off has become a significant problem for many people.
This means that it’s more important than ever to start saving for college expenses now. One method that is growing in popularity is the 529 plan. A 529 plan is an educational savings plan operated by a state or educational institution designed to help families set aside funds for future college costs.
How does it work?
The 529 plan allows you to save on a tax-deferred basis and ultimately, if used for educational purposes, a tax-free basis. Additionally, contributions as well as gains on those contributions remain tax-free.
Investing in a 529 plan also encourages positive financial behaviors. According to Regina Lewis, a consumer trends expert, the deliberate action of saving encourages more saving. Studies have shown that families that contribute to 529 plans are far more successful in saving for college. In addition, their children are seven times more likely to attend college.
How can you choose the right 529 plan?
There are several online tools where you can plug in various data like the age of your child, years to go before the start of college, how much you are currently saving, and by what method. The tool also compares various state plans so you choose the one that is best suited for you.
Who can and cannot contribute?
Anyone can contribute for any beneficiary, including godchildren. Once the plan is in place, there are gift certificates that can be purchased for contributions and you can put your deductions on auto-pilot.
TIAA-CREF has started an initiative to help families save for college. To raise awareness of the benefits of 529 college savings plans, TIAA-CREF launched the Big Dreams Start Small $100,000 College Fund Contest. The winner will receive $100,000 contributed to a 529 college savings account for their grandchild or child sponsored by TIAA-CREF Tuition Financing Inc. TIAA-CREF understands that with the costs of higher education continuing to rise and families facing tighter budgets, saving for college has become an extended family affair. Therefore, they have partnered with AARP College Savings Solutions in an effort to educate individuals, particularly grandparents, about the benefits of saving for college.
What are some ways to boost college savings?
Put savings on auto-pilot. Have it automatically deducted so you don’t have to think about it. Saving money is easier and more effective when it’s automatic.
Make contributing to a 529 plan a gift idea within your family. Instead of sweaters and video games, contribute to each child’s 529 plan instead.
Seek grants and scholarships to combine with 529 plan savings. “You should be seeking the trifecta of grants, scholarships, and 529 plan savings,” says Lewis.
Get started! There are no income limitations when setting up a 529 plan and you can get started for under $50.
Take advantage of a 529 Plan. An investment in education is still one of the best investments you can make.
Once you land full-time employment, your employer may offer the option to contribute to a company-sponsored retirement plan. You might reason you can’t afford to contribute, but you’re wrong. You can’t afford not to contribute to your retirement fund. If your company offers a matching contribution, that’s even more incentive to contribute as soon as possible. This is your chance to get free money—take it.
Steps To Take
Start early. “Time is a critical element to investment success. It’s not timing the market as much as it’s time in the market,” says Dwight Raiford, senior financial planner and financial services representative at MetLife. Investing in your retirement as soon as you start your new job means you can benefit from tax-deferred growth and the power of compounding.
Learn the basics. Get a firm grasp on asset allocation, diversification, and the role of taxes. “Asset allocation involves investing in all asset classes, such as stocks, bonds, natural resources, international, real estate, etc., and not just concentrating on one thing. It’s best to spread your investments as broadly as you can. Diversification involves not putting too much of your investments into any one asset. And third, aim for tax-deferred investing. Savings that accumulate untaxed, such as with a 401(k) allow you to earn more money for retirement,” Raiford says.
Get the right mix. “For a new grad coming out of school at 22 years old, with 50 or 60 years of earning potential, I recommend a heavy weighing toward equities. Those just out of college should have 80% to 85% of their portfolio in equities or in an equity mutual fund and 15% to 25% in a fixed-income fund,” says Raiford.
Make saving and debt management a priority. Build an emergency fund of at least six to eight months of living expenses before you start investing. Raiford also advises getting debt under control. “If it’s not managed properly, or it’s too much, it may impact what you can invest for, such as a home purchase,” he says.
Contribute as much as you can. Start by contributing up to your employer’s match, if they offer one. Once you earn more, begin to increase your contributions. “I would suggest 16% of your paycheck for savings and investing. Once short-term goals are met, such as creating an emergency fund, most of that money should go toward investing
Your retirement fund is not a piggy bank. Some withdrawals made from certain qualified retirement plans before you reach age 65 ½ are subject to a 10% early-withdrawal penalty.
This is probably the single easiest and most painless way to ensure that you’ll be richer a year from now.
You can increase your 401(k) contribution by 1%, 2%, 3% or whatever amount you feel comfortable with.
Since it will be payroll deducted, it will require no further action on your part. And since the contribution is tax-deductible, at least part of the amount will effectively be paid by the government. For example, a 3% contribution may have been net effect of a 2% reduction in your net pay, after accounting for the tax benefit.
Tracey T. Travis is the Executive Vice President and Chief Financial Officer of Estée Lauder. Before taking her position in 2012, Travis spent seven years as the CFO to Ralph Lauren Corporation and three years as the SVP of Finance at Limited Brands. The power woman started as an engineer and a senior financial analyst at General Motors Co. Tracey graduated from the University of Pittsburgh with a Bachelor of Science in Industrial Engineering and later received her Masters of Business Administration in Finance and Operations Management from Columbia University.
Over the past three decades, mutual funds have emerged as one of the more popular ways to invest in the financial markets. But do funds make sense for you—and which funds might you buy? As you look to build an investment portfolio, we can help you buy individual mutual funds or purchase a diverse collection of funds through an advisory account.
This can be one of the biggest advantages of investing in some mutual funds that are designed to diversify its investments. By buying fund shares and effectively pooling your money with other investors, you can spread your investment bets more widely than if you were purchasing individual securities on your own. You can also tap into foreign markets—including emerging markets—that are often difficult for individual investors to access. A mutual fund’s diversification doesn’t guarantee you won’t lose money, but it can reduce the day-to-day volatility in your investment’s value and it makes it less likely than investing in individual stocks that your entire investment would be wiped out.
By deferring taxes, an IRA has the potential to generate greater investment returns or greater retirement income than a similar non-retirement account.
IRAs can be funded with rollovers from other IRAs and retirement plans, direct contributions or a combination of those. Traditional and Roth IRAs are commonly established and funded to consolidate assets from previous employers’ retirement plans.
IRAs, like employer retirement plans, are intended for long-term investing. So in exchange for their favorable tax status, there are some restrictions on using funds prior to retirement. Checkout 7 benefits that you can gain from an IRA.
1. Individuals may contribute to both a Traditional and a Roth IRA in the same year
Even as you save and invest for the future, it’s important to plan for the unexpected. That might mean setting up an emergency fund and drawing up an estate plan. But you will likely also want to consider how life insurance can help protect your family and your investments.
1. Term-Life Insurance
This is typically the least expensive way to purchase life-insurance coverage. Term policies often cover a fixed number of years, such as 10 or 20 years. Your annual premium will be based on factors such as your health history, age and gender. Many term policies offer level premium payments for the life of the policy.
If you die before the end of the term, your beneficiaries receive a death benefit. At the end of the term, you may have the option of renewing the policy at a higher premium, reflecting your more advanced age, or converting it to a permanent policy without evidence of insurability. What if you let the policy lapse? The coverage is over—and you get nothing back.
Bonds, sometimes referred to as “fixed-income securities,” are prized chiefly for the regular income they can generate. They are often added to a stock portfolio as a way to reduce risk, because bonds sometimes post gains when stocks are suffering. But that doesn’t mean bonds are risk-free.
Bond prices and yields move in opposite directions. Result: Prices can tumble if interest rates climb. The longer a bond has until it matures, the more vulnerable it can be to rising rates. That means that, if you sell a bond before maturity, you may receive substantially less than the bond’s principal value. Bond investors can also be hurt by inflation or if a bond’s issuer defaults on interest payments. Defaults are potentially an issue with all bonds, but they’re a particular worry with corporate bonds, so it’s important to pay close attention to the financial strength of a bond’s issuer. Even a fall in interest rates can hurt. While that fall in rates might boost the price of existing bonds, it also means you will earn a lower yield if you reinvest your interest payments or the proceeds from a maturing bond. Checkout how the the pros and cons of these 5 bonds and how they can be beneficial to you:
1. Treasury Bonds: U.S. Treasuries are considered among the safest investments because they are backed by the “full faith and credit” of the U.S. government. They come in three versions: Treasury bills, which mature in 90 days to one year; Treasury notes, which mature in two to ten years; and Treasury bonds, which have maturities of up to 30 years. While the regular interest payments from Treasuries are considered quite secure, the value of these bonds can fall sharply when interest rates rise. The bonds also carry inflation risk: You could lose money in inflation-adjusted terms if, say, consumer-price increases outpace the interest rate on your bonds. Worried about that risk? You might talk to a financial professional about inflation-indexed Treasury bonds.
Tax–deferred annuities come in two main flavors. Fixed annuities pay a rate of interest for a specified period of time. Variable annuities, meanwhile, allow you to select from a collection of professionally managed investment choices, known as subaccounts, which can fluctuate in value along with the stock and bond markets. For instance, you might opt to invest your variable annuity in a mix of stock–market subaccounts in the hope of earning long–term growth.
No investment product is right for everyone-and that includes tax-deferred annuities. As with other retirement accounts, you may face taxes and penalties if you make a withdrawal before age 59½. Also, overall annuity costs are often higher than for other investments and many annuities impose a fee if you withdraw before the end of the surrender–charge period. Indeed, before investing in an annuity, you should consider contributing the maximum allowable to your employer’s 401(k) or similar plan and to your Individual Retirement Account (IRA). But if you have maxed out on those opportunities and you are looking for additional tax–deferral, an annuity may make sense.
Intrigued? After discussing the pros and cons with your Financial Advisor, if you decide to add a tax–deferred annuity to your portfolio, you could potentially get these benefits:
1. No contribution limits. In 2011, if you’re under age 50, your 401(k) contributions are capped at $16,500 and your IRA investments are limited to $5,000. If you are age 50 or older, your 401(k) and IRA contributions are limited to $22,000 and $6,000, respectively. By contrast, there are no IRS-imposed limits on how much you can contribute to an annuity each year.
2. Remain steady through market changes (good and bad)
Now that you understand how stocks can benefit you, lets address the elephant in the room. When the market is bad, majority of shortsighted and uninformed people panic. I want you to reread that sentence you just read. History, which translates to facts, show that if the stock market behave as it has over long periods of time, then your portfolio should be better off. These losses are just on paper unless you are selling your investments (this is a wrong move to make). It is important to understand that stocks are long-term investments. Do not let short-term volatility destroy your long-term success. Pay attention because here is where the savvy investor makes his bread and butter. If you save regularly and invest when the market is down (lets consider the market shows long-term growth that is shown historically), your savings will increase during the time when the market is down because now you are buying stocks when they are priced low. When the market swings upward, booyah, you are now in a better position then before.
Chamillionaire always proclaimed to be a millionaire, and now he has good reason. The hip hop artist turned venture capitalist is making a big splash in the world of investments. We hear so much bad stuff about our hip hop community, I think it is awesome to hear some news like this.
In a letter penned by VC Mark Suster explaining the head-turning week he’s had at Upfront Ventures in Los Angeles, he explains the presence of a new face around the office: Chamillionaire. The same Chamillionaire who was showing us how to get our respective shines on not a decade ago. But if Kanye has taught us anything, it’s that we can find success in multiple creative outlets. In the past five years or so, Cham has been quietly but actively involved in the tech startup scene, from speaking on social media engagement in the music industry to hanging out with Y Combinator associates.
He’s also been making some investments himself. He was one of the earliest investors in Maker Studios, an online video network founded in 2009 and sold to Disney for $500 million last year. The firm he’s currently hanging with and advising, Upfront Ventures, has a vast portfolio that includes some acquired startups such as Bill Me Later (Rick Ross may or may not have been referring to this method of monetary transaction on his verse for Nicki Minaj’s “I Am Your Leader”). Suffice it to say that Chamillionaire has transcended the days when he explained on YouTube how Michael Jordan sonned him, or maybe that was just an early example of his Internet savvy and ability to manipulate viral stories and plant social media engagement. At any rate, in a world in which Internet entrepreneurs like Ben Horowitz make business decisions through the inspiration of rap songs, it’s not surprising to see that we now have rappers getting their own piece of the pie.
You have to admit, this is COOL! What I love must about this story is the mother challenging her son to learn. This led to him doing research which led to him investing at an early age. To be 15 years old and worth $50,000 is pretty cool if you ask me. What would be even cooler is if we all challenged our children the way this parent challenged hers.
Before he buys any stock, he looks for certain ratios. First, he said he looks for the P/E (Price to Earnings) Ratio. A valuation ratio of a company’s current share price compared to its per-share earnings.
Market Value per Share / Earnings per Share (EPS)
For example, if a company is currently trading at $43 a share and earnings over the last 12 months were $1.95 per share, the P/E ratio for the stock would be 22.05 ($43/$1.95). In general, a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E.
The ratio for this is Annual Dividend Per Share divided by Price Per Share.
Next is the dividend yield ratio. A financial ratio that shows how much a company pays out in dividends each year relative to its share price. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position – in other words, how much “bang for your buck” you are getting from dividends. Investors who require a minimum stream of cash flow from their investment portfolio can secure this cash flow by investing in stocks paying relatively high, stable dividend yields.
Third ratio is to consider is the growth ratio. The amount of increase that a specific variable has gained within a specific period and context. For investors, this typically represents the compounded annualized rate of growth of a company’s revenues, earnings, dividends and even macro concepts – such as the economy as a whole.
Roughly 60 percent of all professional basketball players in the United States file for bankruptcy within the first five years of retirement, according to Sports Illustrated.
But with the help of his mother, Philadelphia 76ers rookie Michael Carter-Williams hopes to avoid that trend.
The 22-year-old basketball player, who is guaranteed an impressive $4.5 million over his first season, has decided to rely solely on his earnings from Nike and Panini trading cards endorsements, according to the Philadelphia Inquirer.
So what about his salary?
Carter-Williams, with the help of his mother, decided recently to lock most of the $4.5 million away in a trust fund for the next three years — and he can’t touch a cent of it.
What is a trust fund
A trust fund is a fund comprised of a variety of assets intended to provide benefits to an individual or organization. The trust fund is established by a grantor to provide financial security to an individual, most often a child or grandchild – or organizations, such as a charity or other non-profit organization. A trust fund can be comprised of cash, stocks, bonds, property and other types of financial products. The recipient of a trust fund must typically wait until a certain age, or until a specified event occurs, to receive a yearly income from the fund. Prior to this, a single trustee, or a group of trustees, manages the fund in a manner appropriate to the trust fund’s specifications. This will usually include some allowance for living expenses and perhaps educational expenses, such as private school or college.
“With rookie contracts capped in the NFL and NBA, the ultimate financial success of many careers are determined by the second pro contract,” said Matt Dzamba, director of sports marketing at Zambezi, according to The Daily Mail.
“Protecting the first contract by essentially locking it up takes a lot of pressure off the player both on and off the court,” he said.
The rookie’s mother, Mandy Carter-Zegarowski, and her friend run his management team.
“Our goal is to work with Michael to manage his money in a way that will secure his long-term financial future,” Carter-Zegarowski said in a statement obtained by ABC News. “Right now, the focus is not only to save as much as possible, but also to use his unique position to serve as a role model and give back to the communities that continue to support him and his career.”
The idea is simple: Protect the young athlete from living a costly and unwise lifetsyle.
Financial experts, including attorney Kelly Phillips Erb, believe the move is definitely out of the ordinary. But considering the trend of wealthy athletes and entertainers facing financial failure, Carter-Williams’ financial move would seem to make sense.
“Even if an athlete has a million dollars today, it has to last until you’re 65,” said Erb, according to the Mail, agreeing that the rookie’s parents most likely set up the trust to keep his cash safe from unwise spending.
“In professional sports in particular, you’re going to have health problems and your knees are going to go out,’ she said. “His parents are very smart to know he has a shelf life though they hope he’ll go on to good things. But they don’t want him to blow his money on a Lamborghini.”
Provided Michael Carter-Williams budgets wisely and listens to sound financial advice, he will join with at least one other major athlete in avoiding the bankruptcy pitfall common to so many sports stars.
I want this article to destroy the mindset of the person who thinks you need a lot of money to invest and be successful. As you will hear through out this site and in the video further down in this article, self-education is key. If you do not educate yourself on the topic of money, you will never have any money. Before we talk about who Earl Crawley is, lets talk about how the small guy can win.
It is important that you stay in your lane financially. Don’t worry about what the latest car is, who is wearing the latest fashion, or what is the latest technological gadget. Those who try to keep up with the Jones’s never do. Money management is one of the most underrated concepts in the urban community. It is important to pay yourself first before you pay anyone else. Let me repeat this: it is important to pay yourself first before you pay anyone else. This include mortgages, car notes, utilities and whatever else. If you are working hard for yourself, it only makes sense to pay yourself first. Whether it is something small like $20 dollars a paycheck, or something bigger like $200 dollars a paycheck, make sure to live in a way that you are paying yourself every two weeks. What you pay yourself should be the money you invest.
Let your money work hard, not you
Has your mother or father ever told you to work smarter and not harder? This single concept is how the rich stay rich and the poor stay poor. Your money should be making money, not just sitting in a checking account. Your checking account should consist of the bare minimum for you to survive from month to month. In order for you to do this, you will need to create a budget and figure out how much money you have coming in and how much money you have coming out.
The rest of the money you have left over should be split into two categories: Rainy day fund and Investments. I believe that 30% of what you have leftover should go into your rainy day fund while the remaining 70% should go into your investments. When your money is making money, well, you are working smarter and not harder.
View how Eric Crawley turn $12/hour into 1/2 million dollars
Talk to those who are knowledgeable
Those who are knowledgeable on the subject and successful love helping others. As crazy as this sounds, people who are at the top love the idea of helping someone get to the top as well. Do not be afraid to open your mouth and ask for help. Self-education is the best education you can have. It would also be advantageous to begin reading books and blogs that deal with investments. Continue to seek knowledge regardless of what age you are, what status you have in life, what race you are, and etc.
And finally, what are mutual funds
After watching that video, I hope that you are inspired by Earl Crawley. He mentioned a key point in the video about mutual funds. If you paid attention, he invested only $25 a month into a mutual fund. That eventually turned into $25,000. This is probably the point your mouth should be open, taking notes, and getting excited about mutual funds. Lets take a look at exact what a mutual fund is.
An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers, who invest the fund’s capital and attempt to produce capital gains and income for the fund’s investors. A mutual fund’s portfolio is structured and maintained to match the investment objectives stated in its prospectus.
One of the main advantages of mutual funds is that they give small investors access to professionally managed, diversified portfolios of equities, bonds and other securities, which would be quite difficult (if not impossible) to create with a small amount of capital. Each shareholder participates proportionally in the gain or loss of the fund. Mutual fund units, or shares, are issued and can typically be purchased or redeemed as needed at the fund’s current net asset value (NAV) per share, which is sometimes expressed as NAVPS. (via http://www.investopedia.com/terms/m/mutualfund.asp)
Interested in becoming 37% more awesome on the subject of investing? Take our Cashing Out Class and learn the good stuff. Oh yea, you choose the price of the course.
In the urban community, stocks are often misunderstood and are not really used as a financial tool for retirement. Majority of us have the tendency to rely on a 401k that our employer provides for us as our only savings tool for retirement. Although some employers have great 401k’s with employer based matching, but as momma told me as a child….don’t put all your eggs in one basket. Stocks are great investment tools to invest in personally. And you don’t have to start with thousands of dollars. Create your own comfort level risk in the market. As the market changes, adjust your comfort risk. Case in point, your portfolio should be diverse to keep balance. “In general, people should be more aggressive in their asset mix when they are younger—that is, tilt more toward stocks,” says Steven Feinschreiber, senior vice president, financial solutions, for Strategic Advisers, Inc. (a Fidelity Investments company that is also a registered investment adviser).
For those who are “stock shy”, here are 4 reasons how stocks can make you 37% more awesome.
1. Stocks offer the most potential growth for your cash
Even with ups and downs in the market, U.S. Stocks have consistently earned more than bonds in the long-term. Lets analyze what a $100 investment would be worth over a period of time (starting when S&P began tracking performance in 1926). During this time, stocks returned an average of almost 10% annually, bonds 5.3%, and short-term investments 3.5%, before inflation. To no avail, it wasn’t a straight line up for all, but what this shows is that stocks typically offer more potential for growth over the long term. That’s why investing in stocks or stock mutual funds is so important when saving for retirement or other far-off goals. This is why it is vitally important to begin investing in stocks at a younger age versus when you are closer to retirement.
It is without question that Hip-Hop (Rap Music) is the most popular form of music on earth. It has influenced culture on all continents and continues to grow year after year. It is quite amazing to think that black people created Hip-Hop in New York back in the 1970’s and as of today, no one of color owns the majority of the Hip-Hop industry. Let that sink in for a second. We don’t own what we created. But that is a story for another day. Lets get back on task. For the billions and billions of dollars that Hip-Hop generates, why is it that Hip-Hop are leaving some artists broke after their career is over? It is simple, self-education is neglected. If you are unaware on what to do with your money and lean on someone else understanding, well, you were never financially set in the first place. Those who handle your money are financially set. Additionally, it is easy to make money but it is hard to keep it. Lets take a look at some artists that Hip-Hop gave life to, then took it away real quick.
1. Lil Kim There’s nothing lil about Kim’s debt. The legendary femcee owes more than $2.5 million to her former record label and $1million to the government. I guess she didn’t understand Warren Buffet’s rule: You only spend the money you have left over from saving and investing.
2. Lil Flip
The bling bling rapper with “diamonds” in his mouth is not so blingy anymore. Flip had a string of hits in the early 2000s, but things went downhill quickly. In 2007 he was arrested for credit card fraud. Two years later his baby mama revealed that he was paying less than $500 a month in child support. I’m guessing he could have used some self-education on investments.
3. Scott Storch
Okay, so he’s not a rapper, but in the early 2000s, Storch was one of the most in-demand producers in hip hop, with an estimated worth of over $70 million. Thanks to his addictions to both cocaine and status symbol items like yachts, Storch is now rumored to be flat broke. I’m pretty sure cocaine is not a good investment (legally). And yachts don’t appreciate in value. My guess is he probably should have picked up a book about securities.
4. Bow Wow
No longer Lil, Bow Wow is big time broke. In 2012, he told a judge he had just $15,000 in the bank. He currently owes over $150k in taxes and has had most of his luxury cars repossessed. But I’m not too disappointed at Bow Wow, he did make majority of his money before he was 18yrs old. He just elected to do stupid stuff with his money after he turned 18yrs old.
5. Trick Daddy
Big-hearted thug Trick Daddy has been trying in vain to dodge Uncle Sam for over a decade. According to the IRS, he failed to pay sufficient scratch in 2002, 2006, 2007, 2008 and 2009. This amounted to $157,034 in unpaid taxes. What’s more, his suburban Miami home was foreclosed in May 2010. He don’t no nann about that though.
Let me state this very clearly. This article is not about stocks vs. bonds. A savvy investor will have a mix of both. The art of investing is how you use both in your portfolio. Bonds are not as sexy as stocks and will never yield the same potential rate of return as a stock, however, it is still important to have bonds in your portfolio for the following reasons.
1. Diversification is key to smart investing
Depending on your comfort level of investing, you may try to hedge risk or you may be very aggressive. Either way, bonds should be included in your portfolio. Stocks can offer you growth and capital gains while bonds provide income and can help protect your assets during more volatile times. By holding bonds, in addition to stocks and other investments, you’re not putting all your eggs in one basket. Although stocks can go up, they can also go down — sometimes a lot. Think of bonds as loans. You are putting yourself in a position to lend the government, municipalities, and companies money when they are looking to borrow. When the market is uncertain, you usually see investors run away from stocks and turn to high-quality bonds. But rule of thumb is when interest rates go up, bond prices go down.