investing

Ms. Banks

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entownerlogo1My children have a nickname they call me “Ms. Banks”- no not like the one and only Tyra Banks; but the mother who seemed to pull money out of thin air when there was an emergency.

That’s because I follow my advice and save for a rainy day. I know the gurus in finance like Robert Kiyosaki, Tony Robbins, and Dave Ramsey, say you can’t get rich saving money, and they’re right-but you have to start somewhere, right? Unless of course, you are an heir to a fortune or win money from the lottery; however, those are exceptions to the rule.

I wasn’t as fortunate as some, my life started out very rough and I wrote about my struggles in my book “Journey Into Finance” and what helped me along my journey. So, for most people in my circumstances, getting a job and saving money from their paycheck to reach a certain goal like purchasing their first car, is the most logical option.

Once the money is saved, then and only then can a purchase be made. My first car was a 1997 Toyota Corolla which I affectionately named “hooptie”. It was a used vehicle and had very high mileage, but it got me from point A to point B and further for a few years. A minimal investment of $500 dollars was the total cash price and I put $100.00 down for the lot owner to hold it for me. Each week I put $150.00 dollars aside from my paycheck for the car and insurance, and in 4 weeks, that “hooptie” was mine.  I invested in new tires, a designer steering wheel cover and she was good to go. When you pay for a car with cash, it doesn’t help your credit score though, so I had to use my bill payment history to begin showing my credit worthiness. Tip: never put your utility bill in the hands of someone else to pay, if they miss a payment, your credit suffers.

I’ve always been good at putting money aside and when I met my husband, he showed me how to coin pennies and then take them to the bank in exchange for dollars. Once I got it established. I’m very thankful for those early years, because it taught me how to persevere through the tough times and how to appreciate small things.

As I write this post, I’m proud of that nickname “Ms. Banks”. Happy Holidays.

Until next time…

Wishing you peace and prosperity,

ET

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The Wolf of Wall Street Part 1

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Stack book

Part 1

“Finance is a broad term that describes two related activities: the study of how money is managed and the actual process of acquiring needed funds. Because individuals, businesses and government entities all need funding to operate, the field is often separated into three sub-categories: personal finance, corporate finance and public finance”.Daniel Kurt

After watching The Wolf of Wall Street,  living through Enron, and the Madoff Scandal, it’s apparent that every investor needs to know a little something about how well the companies they are putting their hard-earned dollars into are doing, and the company the brokers are employed with. It’s quite easy to get lost in the numbers, acronyms, and financial jargon. However, as events from the past prove, it’s more important than ever to understand the lingo and how these terms help investors understand the way companies make money in their respective genre. Financial analysts use tools to determine whether or not a company is a good investment. These are terms you should pay attention to when speaking with your financial planner/advisor: Earnings Per Share (EPS), Return on Equity (ROE), and the Efficiency Ratio.

Now don’t get me wrong, I’m not saying that you need to learn the job of your broker, financial planner/analyst, so that you can bypass them, they are our eyes and ears on the stock market. What I’m saying is, do not leave your nest-egg unguarded, and they are human (prone to make mistakes). So, know what the terms mean and how they are calculated so you are not in the dark about how your money is being managed. Remember, financial analysts work for you, but they also work for their employer. So, when you sit down with your Investment Banker/financial analyst/broker, make sure to have a copy of your portfolio, and have them explain why they think your current investments should remain as they are. Include the key terms mentioned above and in my book (Journey Into Finance), have a writing pad with you and jot down notes as you go along. You’ll be surprised at how they spill their guts, trying to impress you. Not only that, you can see how sincere and committed they are to your portfolio.

So, over the next few weeks, I’d like for you to read over a prospectus, and set up an appointment with your banker for about an hour. Have them explain how well each stock is doing. Before leaving that meeting, set up another appointment in a month, to see what progress the portfolio has made. In the meantime, look over your finances, and see where you can make some adjustments with your spending, to invest it in your future goals (retirement, a trip to Disney World, that luxury vacation, etc). Pick up a news paper and look at the financial section, familiarize yourself with the DJIA and NYSE. Pay close attention to the EPS. In part 2, we will discuss Return on Equity (ROE) . Please be sure to let me know how your meeting turned out.

Peace and prosperity,

et

P.S.- My daughter wants to take acting classes. I’ll let you know how I plan on paying for that huge investment. Live your dreams.