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Beginner’s Guide to the Yahoo Finance numbers

This guide will assume you are an absolute beginner when it comes to using ticker systems like Yahoo Finance. The world of stock investments might seem confusing and overwhelming, with plenty of symbols and slang to mull over.

Don’t worry. I’ve broken down the basics to the stock market before, with my beginner’s guide having been viewed over 100,000+ times, and I’ll do the same for the standard Yahoo finance interface.

yahoo finance

I’m going to go through each individual category and explain exactly what each of the abbreviations means.

Some of these categories are complex and hotly debated topics that you can research further at your pleasure. I’ll link some good sources for that within. Others are really straight forward and don’t mean much more than the surface definition. Hopefully those will be easy to comprehend.

Now the first thing you’ll see when you enter Yahoo finance’s main page is a search bar at the top, and then a convolution of charts, ads, video links, article links, broker ads, games ads… the list goes on.

That top search bar is going to be the place where you’ll find the most use and get the most data for stock market investing.

Every stock that is publicly traded will have its own ticker symbol. This symbol holds the key to all of the charts and data behind that stock.

For this how-to guide, we’re going to use the ticker for the biggest stock in the market right now, Apple Inc (AAPL).

When we type AAPL into the search bar, a myriad of data immediately hits our screen. If you are following along, it should look like this:

Right away, there’s a big number in bold. That’s the current price of the stock.


In smaller numbers and in either red or green color is the difference in the stock price for today. You’ll see, in this order, an arrow going up for gain and down for loss, the amount of dollar value ($) gained or lost for the day, and the percentage of that difference compared to the price.

Right below these big numbers are the after hours prices, in a similar format to the above. These numbers represent some of the trading that occurred in brokers outside of normal business hours.


After hours numbers can be used as an indicator for a stock’s future movement. The accuracy of this, however, is suspect even in times when extremely high pressure is forcing the market to a high after hours percent drop or rise.

While the after hours isn’t sufficient to predict the future, you can basically utilize this number as the current price of a stock. Price is, after all, the point at which buyers and sellers meet.

Next, we have the Prev Close. This is pretty straight forward as the previous close value. It means the price of the stock when the market closed yesterday.


Keep in mind throughout this guide that the market hours for US exchanges such as the NYSE are 9:30am EST- 4:00pm EST. Other markets in other countries and time zones operate on their own schedule. As an investor, you can technically put in a trade at any time in the after hours.

The Open is the price of the stock when the market opened on this day.


Now getting technical with the nuts and bolts behind the stock price, we have the bid and the ask.

The bid is the highest price a potential stock purchaser is willing to buy the stock at, and at that particular quantity. It’s the broker’s job (like Tradeking or Merrill Lynch) to match new clients’ transactions with bids or asks.


The ask is similar to the bid but is just the opposite. It is the lowest price a stockholder is willing to sell his stock for.


In both the bid and the ask, buyers and sellers of the same stock are competing with each other and essentially lining up orders for the brokers to fill. It works almost like an auction market would, with the best price on either side of the bid or ask skyrocketed to the top.

Next we have the 1y Target Est. Again, this is a straightforward definition. 1 year target estimate is simply the price that analysts have predicted the stock will be one year from now.


The reliability behind these estimates are the true question here. The way I see it, the accuracy of an estimate has the same chance as any other estimate. It really is a 50-50 guess, and the stock could easily beat the estimate just as easily as fail the estimate.

The game of prediction is a fickle one. Forecasters are wrong just as much as they’re right when it comes to the weather, and they even have the luxury of technology giving us 12 hour lookbacks and predictive wind patterns. Sports forecasters are just the same. An estimate is as good as its analyst, and for the finance sites it could be anyone.

Yet when I’m looking at a stock that I’ve already deemed favorable… I’ll admit I take a favorable target estimate in a positive light.

This next number has to do with an advanced financial topic called volatility. Basically volatility measures how much movement a stock has gone through in its recent history. [When talking about recent history with stocks, it usually means 1 month, 3 months, 6 months, 1 year, 2 years, 5 years or 10 years].

A stock with much more buys than sells, or sells than buys, will have a higher volatility than a stock that has stayed relatively unmoved. Beta comes into the equation when you want to compare a stock’s volatility to the average of the market.

A stock with a beta of 1 is moving at the same volatility as the market. A stock with a beta greater than 1 is moving with greater volatility than the average, and a stock with a beta less than 1 has less volatility than the average.


Low beta is actually a tool used by financial planners to lure customers into investing in their strategies. The effectiveness of beta has long been heralded by investment academia.

To read a controversial and extensive article debunking the all powerful beta, click on this link to open the article in a new tab.

The next row of Yahoo Finance is the next earnings release date. Earnings releases are important for two reasons.


Number one, this is when the performance of a company is evaluated. Results are compared to estimates, and the stock price will move based on this data.

Secondly, new estimates are released on this day as well. When estimates guide lower, a more bearish sentiment surrounds the stock on the street. Of course, estimates guiding higher show a general abundance of earnings and can mean well for the stock moving forward.

You’ll tend to see a good amount of movement in the share price around earnings time. The caveat is that sometimes these movements are purely irrational. Meaning the stock could be crashing lower or surging higher regardless of the logic. Something to keep in mind for the investor out there.

The company’s ex-dividend date, or date preceding that an investor needs to hold the stock by to receive its dividend (usually the day before the ex-div), tends to either be announced or be right around the earnings release. Keep that in mind as well.

Next we have the Day’s Range. This is simply the high and low for the day that the stock has traded during business hours.


The 52wk range is like the day’s range, but over a 52 week period. This will tell you the low and high for the stock’s past year. This is the high and lows for the closing price of the past year, not intraday highs or lows.


Volume refers to the number of shares that have been bought and sold for the day. This is similar to the beta, but the volume gives us an exact number of just how much volatility a stock might potentially have.


The difference between volume and volatility is that a stock might have heavy volume but low volatility, or vice versa. This can happen when a stock is being heavily traded, but isn’t moving much on the chart.

By itself, the volume number doesn’t tell us much. If you are following the stock for a while, however, it can help identify an entry point if you care about volume.

Which is where the average volume (3 months) comes in. This number tells us just how active the stock has been recently, and we can use the day’s volume as a comparison to evaluate current activity levels.


Next is Market Cap, which is short for market capitalization. Market capitalization is the total size of a company in the stock market. It represents how many people own shares in the stock market, and moves up as the share price moves up.

Market capitalization is an easy calculation. It is the number of shares outstanding multiplied by the share price of a stock. For example, if there are 100 total shares of a company on Wall Street, and the company is trading at $5 a share, the market cap would be $500.

To read more about market capitalization, check out this informative guide on it.


Besides market cap, the P/E is another standard measuring tool. P/E (ttm) refers to the P/E of the trailing 12 months, or of the past year.

P/E stands for Price to Earnings, and is calculated by dividing earnings by a stock’s share price.


P/E is an extremely useful tool because it reflects the market sentiment surrounding a stock.Generally, a stock with a low P/E isn’t as favored by the market as a stock with a high P/E.

It makes sense if you think of it too. A stock with a higher price will have this characteristic because many people want to buy the stock. Thus, this higher price moves the P/E up.

However, the P/E can also be helpful in finding a company doing very well in the marketplace. Looking at the earnings side of the equation, a company with higher earnings will drive the P/E lower because holding price constant, higher earnings means a lower P/E.

P/E is really just the start of a much longer discussion into analyzing a stock. Once you can begin to understand the working behind the Price to Earnings ratio, you can rely that knowledge into understanding a company’s balance sheet, income statement and cash flow statement.

It’s powerful knowledge and having the confidence behind how the ratios work help you navigate your investments in the stock market. If you’re interested in attaining this knowledge, you can start with my easy 7 steps to Understanding the Stock market guide, first with the P/E ratio.

EPS (ttm) is another income statement analysis tool. It stands for earnings per share of the trailing twelve months, and it works as a good marker for how successful a company is doing.

While the earnings part of P/E refers to the total earnings of a stock, EPS allows the investor to compare earnings to each individual share.

It also lets the investor calculate P/E ratio by using the share price. It looks like: Price (by share) / Earnings (by share) or EPS.

To really get a good grasp on the concept of EPS, I highly recommend reading through the 7 steps guide.


Finally, we have dividend and the yield percentage. This tells us how much dividends we will receive per share we purchase. The yield tells us what percentage of a company’s share price the dividend comes out to be.

When it comes to investing in dividends, it’s important to remember that the yield isn’t what’s all that important and profitable in a dividend investment strategy. It’s the growth of that dividend over many years that makes an initial investment very profitable as the years go on.


I want to commend you for completing this guide. Hopefully it has done its part in decoding the sometimes challenging stock market numbers behind popular websites like Yahoo finance.

Important Debt to Equity Ratio Analysis

Fellow spreadsheet and investing enthusiasts, the world of Wall Street is open for understanding. There’s no better way to learn the stock market than to dig into the financial statements. However, there’s some important details within this process to be aware of, especially concerning debt to equity ratio analysis.

debt to equity ratio analysis

Here’s a great email question from a reader that should help everyone following along. Whether you are doing debt to equity ratio analysis, cash flow analysis, or even just looking at P/Es, this knowledge should help you get a bigger picture at what the numbers mean and how much analysis is really necessary.

Good Afternoon Andrew,

First and foremost, I apologize if this email is a little “rookie” sounding. I am still new to investing (started about 9 months ago) and have been following your guidance the entire way. I just read one of your latest posts about looking for stocks that have increased their dividend payment over the last 10 years.

With that being said, I started to do some research and found a company that looked intriguing ($BRO if you care.) I was looking over the financial statements (latest 10K from FY 2014) and I noticed something that through up a amber flag for me. I was always told when looking at the cash flow statement for a company you want to see a significant positive value in the Operating Activities section, and negative values in the Investing and Financing Activities sections.

With this company, the Operating Activities and Investing Activities were good but the Financing Activities held a significant positive value. Almost all of the positive value came from “proceeds from long term debt”. With that being said, although they took on a significant amount of debt in 2014 they are still only at a .53 D/E. Additionally they had a positive value in 2012 and then a negative value in 2013. When looking at the latest 10Q, the Cash Flow statement in in the negative for the 9 months of FY 2015.

I am overthinking this positive number? In other words, just because the company took on debt last year should that prevent me from purchasing the stock? I appreciate any insight you can provide. Thank You.


[click to continue…]

Dealing with Stock Market Losses

All eyes were on me. My heart was racing.

But as I took a deep breath, my demeanor was calm. I had mentally prepared for this moment all offseason long.

It was the first game of our flag football season. We were the new team of the league, eager to win and prove ourselves.

As I took my deep breath, I went through my progressions. Option #1 wasn’t open, and neither was #2. Then the pressure came and I was forced out of the pocket. The referee counted out loud until he reached 6. Man, that was a lot faster than I thought.

Just like that, our season started with a sack. I kept my cool and pressed on. 2nd down had one of our guys wide open. I made the throw, a little low, and he dropped it.

Our 3rd down play gained some yardage but not enough for the first down. We punted, and I went back to the sidelines.

It was quite a terrible way to start the season. Couple that with our opponent scoring on their first drive, and we were in a precarious situation.

No matter. I was mentally prepared for this, had rehearsed losing situations over and over again. I would keep my cool, not panic, and continue to scheme and find ways to beat the other team.

By the second drive, I already knew what the defense was trying to do against me. They had a zone on one side with a single man island on the other, so I called a play to counter this perfectly.

The route was run great, the man was open, and my throw was good. At the last second, my receiver tripped, and the play was ruined. Our team found ourselves in another unsuccessful drive, and that’s when things really started to unravel.

The seemingly insurmountable score and lack of time to make up the difference started to affect my gameplay, no matter how calm and rational I thought I was. I really started to miss some throws, make poor decisions, until the game ended in a mercy rule.

This humbling experience got me to thinking about how many investors out there probably feel the same way.

stock market losses

Our whole lives, the media tells us we will be rich, famous, and happy. The investment industry exploits people’s hopes, showing commercials with smiling actors who seem to never have to worry about stock market losses.

We spend our waking hours dutifully slaving away for the man, hoping to be rewarded someday with happiness, leisure, and luxury.

We’re told that the stock market is the place that will give us these things.

We’re told that these pleasures are reserved for retirement.

We’re told to keep our hopes high and our heads down low.

Surely the powers that be will reward our faithfulness and sacrifice with bountiful stock market returns, consistent and growing dividends, and wealth beyond our imagination.

Yet the reality of the stock market is much different.  [click to continue…]

Building a Dividend Stock Portfolio with a Late Start

It’s not too late, it’s never too late. Colonel Sanders didn’t start KFC until he was over 65. Look how big KFC is now.

dividend stock portfolio

Attempting to build a dividend stock portfolio when you are already in your 40s or 50s may be disappointing, especially when you see the kinds of magic compounding numbers I share about investing when you are in your 20s.

So you may not have 40+ years to allow small amounts of money to turn into millions. But you can still have at least 25 foreseeable years of compounding left in you if you are in your 50s, or even more.

Life expectancy has increased with the innovations in technology and medicine, and more and more people are living well into their 80s (big retirement companies like ING are shoving this down our throats with their commercials). It’s no mystery.

And so while I’m far from being an expert at your problems at 50, I do have expertise in helping hundreds of thousands of readers with starting to invest.

A particular question I received from a reader really caught my eye, and inspired this post. Hopefully it will help other people like him to kick excuses to the curb and make progress towards their goals.

Hi Andrew,

I happened to stumble upon einvestingforbeginners and have really enjoyed reading your articles/blogs – very informative and helpful.

I have $20K I would like to invest and want to begin building a dividend stock portfolio. I’m 49 years old, so unfortunately, I don’t have the benefit of an early start like someone in their 20s or 30s. That said, I have a few questions:

· What vehicle would you recommend I use to begin purchasing (brokerage firms, etc.)?
· I expect to have about $300-500 per month in savings to contribute on a go-forward basis – once I build the initial portfolio, would you recommend I use a lump sum approach for future purchases or just contribute on a monthly basis (dollar cost averaging) to grow the portfolio.

Any advice you have would be great appreciated. I look forward to hearing from you.

Thank you.


The first question is easy. I’ve covered it many times before and the best resource for you is probably this blog post: 8 Top Stock Market Brokers for Beginners.

The next question regards a dilemma between lump sum investing and dollar cost averaging.  [click to continue…]

How to Find Good Dividend Stocks: 3 Metrics

It’s easy to find plenty of websites willing to share a “top ten” list of good dividend stocks for the year. Yet it’s much harder to find actual useful lessons that will help you in the long term.

good dividend stocks

This frustrates me. Getting a quick tip about one good dividend stock won’t help anyone towards their financial goals.

Sure it feels good temporarily, but relying on new dividend stocks lists every year isn’t a reliable investment strategy.

So instead of give you what you’re looking for, presumably good dividend stocks, I’m going to teach you how to find good dividend stocks with 3 common metrics. I have no doubt this will be far more beneficial for you in the long term.

And it’s the long term that really matters.

Good Dividend Stocks: P/E

Let’s start with the most basic dividend metric. Price to earnings, or P/E ratio.

This ratio is simple to understand when explained correctly. It is the price you are paying for the earnings a company is giving you.

Look at it this way. If you buy a rental property for cash flow, the success of that investment depends on the price you paid for it and the cash flow it gives you.

A property that you paid $200,000 for might be a great deal if you can make $2,500 a month from it, and not such a great deal if you only make $1,500 a month from it. It’s not the dollar amounts, per se, but the ratio of price to earnings.

Buying dividend stocks works the same way. The lower the price to earnings on a company, the better deal you are getting on the company. It’s the simplest measurement of value.

Price to earnings works really well in helping you avoid extremely unfavorable situations. When a company is losing money, that stock will have a negative P/E ratio. You want to avoid negative P/E ratios at all costs because it indicates a company that is in serious trouble.

P/E also helps you avoid stocks that reach “bubble” territory. This is when Wall Street gets so excited about a stock that investors will literally pay anything to have it. A situation like this is so dangerous because the bubble always pops. We see it time and again.

For a good dividend stock, find a P/E less than 25.

Here’s the free tool I use to sort dividend stocks by P/E. It’s called FINVIZ, and it lets you sort from a wide variety of metrics. Simply select P/E: “Under 25” in the “Fundamental” Tab.

Good Dividend Stocks: D/E

The next dividend metric will help you avoid stocks that suddenly go bankrupt like Lehman Brothers did. I’m talking about the Debt to Equity ratio.

Debt to equity ratio works just like anybody’s personal finances. When people end up in bankruptcy court, it’s because they’ve accumulated too much debt on their credit cards, mortgages, and more. For stocks, it works the exact same way.  [click to continue…]

One of the biggest hurdles to stock market investing is a mindset shift. Many beginners can’t get their heads around the reasons to find stocks with dividends. And I don’t blame them.

stocks with dividends

After all, how can you get excited about a $1.15 payment that takes a year to accumulate? While on the surface, a small dividend may seem inconsequential…

I’m afraid that many beginner investors are missing the bigger picture. And as they miss this picture, they miss the most powerful worldly force for building wealth.

What we need is a road map towards making money in the stock market.

I’ll try to explain this in the simplest of terms. I’m hoping you’ll get a “light bulb moment” and it will help you see stocks with dividends in a much different way.

Once you understand the power behind it, you can go out and reap the benefits yourself.

Think of the following examples.

Take the game of Monopoly, for instance. We all know that the goal of the game is to collect as much money as possible. Coincidentally, this is the same goal in investing.

However, you don’t win the game of Monopoly by hoarding cash. You need to instead buy as many properties as you can. Those of you who are good at the game know that a few well placed houses and hotels on your properties will pay you thousands of Monopoly money in the long run.

In Monopoly, it costs money to buy properties and add houses and hotels. These properties don’t pay for themselves right away, yet you know that the key is to snatch up these properties as they will more than pay for themselves in the long term.

You have to look at stocks with dividends in this same way. You’re not buying them for the immediate return, but for the long term cash flows.

Tomatoes and Investing

Another simple example is planting a tomato garden. Let’s examine the goals and the effects. The goal of a tomato garden is for me to eat a tomato. This is obvious.

However, you don’t plant a tomato garden and expect to immediately start eating a tomato, or many tomatoes. You must plant the garden, water it, till it, and do other garden-like things to it (as you can tell, I’m not a green thumb).

But once the tomato plant has sprouted, it takes minimal work to maintain the garden. Plus you get not just one tomato, but an “income stream” of tomatoes. You must have the patience to reap the rewards, but the rewards are much plentiful than just buying a tomato at a store and consuming it.

The difference between buying a tomato to feed you once and a tomato seed to feed you indefinitely is the difference between buying a stock to make money and buying a stock for the dividend.

Notice that the goals are the same. In the tomato scenario, our goal is to eat a tomato. With investing, our goal is to make money. The difference is that you can take a long term approach for delayed gratification and greater benefit, or a short term gratification that quickly evaporates.

What’s interesting about the Monopoly example is that it utilizes a rare force in the world.

Most things in life take a great amount of upkeep and energy. The tomato plant, for example, requires maintenance– not as much effort as the initial plant but still significant. Exercise and our body takes constant effort and energy. I couldn’t possibly hope that one workout would have me “set for life”.

Money has a drain effect. It always seems to find a way to leak out of our wallets. We have to put constant effort and energy to keep an income at our jobs.

Monopoly properties don’t fall victim to this. You just buy it once, and it creates an income for you forever.

Guess what. Dividend paying stocks work the same way!!

Except in the real world, the best stocks with dividends will increase the payouts year after year. What this means is…

As long as you pick a company with strong financials, the income stream will pay you until you or the company dies! And those payments rise, that’s some serious earning power.

Let’s play this out with an example.  [click to continue…]

Stock Spreadsheet Q&A

Many long time readers know about the stock spreadsheet I offer as part of my book package. This is the exact spreadsheet I use when analyzing a company. It’s a simplified tool to help people buy stocks, but even within it there are questions and confusion.

stock spreadsheet

I had a couple of in-depth conversations with some of my readers and customers regarding the questions they had with the Value Trap Indicator Spreadsheet, and if they have these questions chances are many of you do too.

So I’ve included those questions with my answers in this post. Hopefully it will help those of you following along at home. It may just be the trigger you need to find the confidence in using spreadsheets for stocks.

Hi Andrew, I have a question about the seven categories. To calculate the 3 year average growth (category 6) do I use revenue or should I look at net income? And if my VTI is around 350 should I pass on this stock?

For 3 year average growth use net earnings.
A VTI of 350 is close to the strong buy signal of 250, so it’s worth keeping an eye on for a stock price pullback.

So can I use operating income? Or should I subtract interest and taxes?

Use net earnings which can be found on the income statement. Operating income minus interest and taxes won’t give you the same net earnings numbers that most of Wall Street is using (usually).

Do you use google as well to search through the financial statements? Or

I use because it is the definitive source. Not to say that other websites will be inaccurate but I prefer to get my data from the source.

In category 6 of the book you implement the growth. But how do I calculate the 3 year average growth in excel? Because at Finviz it isn’t mentioned. I calculated the 3 year average growth like this: Gemiddelde means average (I am from Belgium). But there is something not right about this formula because the outcome should be negative.

value spreadsheet

Great question. Using your example, you’d take earnings from 2014 – 2013 earnings, 2013 -2012, 2012-2011. Then take the average of this sum (divide the sum by 3). That’d be the average growth.

It gets interesting when negative numbers are involved, because it skews the data. I make the calculations in my spreadsheet, but basically I’ll take growth from the last positive earnings. For ex, to take growth of 2014, I’d subtract from 2012 instead of 2013 since 2013 is negative.  [click to continue…]

One of the most common questions or criticisms I hear from skeptics goes along the lines of:

“If you’re so successful at picking stocks, then why do you share that information to others”

or the usual, “if you’re making so much money, why do you need to sell the information? Why not keep it for yourself?

And it’s a good concern. I know I sure shared this perspective when I started out.

stock market investing

Look, there are scam artists and fakes out there. I’m not going to pretend that they exist. Charlatans thrive in every area of popular interest, and make their money by their ability to create excitement. Usually this excitement leads to reaching for the wallet, with little or no value exchange for the customer.

I don’t by any means support or condone this kind of behavior. It makes me sick to the depths of my stomach. I strongly believe in the power of capitalism, free trade and exchange of goods, but it’s these types of criminals who ruin the image of the system for everyone.

Why am I not a charlatan? Well for one, I practice what I preach. I’m eating my own cooking. Hell, my Roth IRA is composed solely from the stock picks I share to my newsletter subscribers. My financial future is at-risk just as my customers are.

Number two, I take pride in maintaining my integrity. I do what I say and say what I’ll do. I try to live this way not only in my investing life, but also in my regular life. No one’s perfect, but I hold myself to the highest standard.

Of course, those first two statements are nice to hear but they don’t get down to the core of what a customer needs. We need to know if this philosophy works.

Since I’ve been there before, in a position of a clueless beginner, I remember how important it was to me that I get the right stock market investing systems in place. So I took the kind of due diligence that most average investors just aren’t willing to take.

I had a bit of an ego going in– I knew I was getting a good start as a young kid, and I’ve always been extremely gifted in math. I figured that the skillset would carry over into stock market investing. It sure has.

Doing this due diligence meant learning about every kind of major stock market investing strategy. There’s value investing, which I eventually decided upon. But there’s also trend following, growth stock investing, index investing, technical analysis, asset allocation, bond investing, real estate investing, options trading, forex trading, large cap, small cap, international… and so much more.

I know the myriad of options seems endless. And it really is. There’s a million ways to skin a cat. But only until I could grasp the basics from each strategy, and be able to explain it to myself, was I finally confident in sharing about my findings.

A quick observation will show you who has the superior system. In basketball, it’s Phil Jackson and the triangle. In the music biz, it’s Rick Rubin. In the stock market, it’s the students of Graham and Dodd who built fortunes through value investing.

Identifying these masters and learning from them is the best way to accelerate your understanding and mastery of a skill. Plus and perhaps most importantly, the material needs to make sense.

Value investing passes every test, and it’s the only reason I’m so confident to share about it to my readers. The concepts make sense even to the layman. Simplicity is important.

Now for the big question…  [click to continue…]

Beginner Investing Questions Answered

I received the following investing questions from the subscribers to my email list. I know many of you share these common questions, so I’ve included the answers for your benefit here.

investing questions

Investing questions #1: My biggest frustration with investing is getting started in an investment worth investing in. I have thought of investing in the stock market but haven’t yet. Please help.

It’s good that you are selective in wanting to start. When it comes to investing in the stock market, it’s much better to be cautious than to be careless.

Let me try to help you ease your concern. The majority of your investment return will not come from just one investment. A well-diversified portfolio should hold around 20 individual stock positions.

That’s not to say you have to build all 20 at once. As a beginner, it’s completely fine to build one position, and then another one, and then another one as time goes by.

The first investment you make is important in the sense that it helps your confidence. Other than that, the results of this investment will not be substantial in the long term. It will be the consistency of your investing, and the fact that you are adding positions monthly that will compound your wealth and give the results you seek.

When it comes to finding an investment, I highly recommend researching about value investing. A well-diversified portfolio of value stocks tends to outperform the market average if done correctly and with the right principles.

So bottom line, don’t let your frustration cripple you.

A mistake in the beginning with your first couple of investments won’t kill you. The decision to stop investing will.

Investing questions #2: I’m brand spanking new to investing. What frustrates me the most at the moment is my lack of knowledge and a plan of action. Also, I represent two minorities in this area and have no one in my “circle” of friends or family that have the same interests I do. Hopefully you can help me get started.  [click to continue…]

Retirement Planning in Your 20s

I’d like to share this great email I received along with a response back. It’s about retirement planning, and it can be beneficial for those looking to retire early or just obtain a great start financially, especially if you are in your 20s.

retirement planning

Many first-time career workers and recent graduates will find value with this post.

“Your 20s are typically the perfect time to start planning for retirement, but sometimes life gets in the way. What did you do successfully in your 20s, or if you could go back in time, is there anything you would have done differently to ensure a better financial future sooner in life?

I would love to hear your thoughts on how you could’ve built your financial safety net in your 20s better–and how you can start it now if you haven’t already. What would be your ideal retire at 65 plan?”

I’ll start by sharing that I’m not any different from any of you. While I’ll admit I may have more awareness about financial matters than most peers my age, I don’t pretend that my plan is perfect.

In fact, if you take a hard and objective look at my financial plan… you’ll undoubtedly find places where I can be better optimized and more efficient. While processes to optimize work extremely well in the business world, they don’t always translate to real life.

This is important. What I’ve devised for myself works the best for the current situation I’m in, the lifestyle I desire, and the sacrifices and benefits I’m willing to take and keep.

It can change and should evolve as my life and situations evolve as well. This clarity is one that I’d recommend to anyone getting started with retirement planning in their 20’s.

Retirement Planning Motivation

Just do it. A slogan for a popular shoe brand, but also relevant advice for anyone starting out.

Of course, before we dive in we want to see some results to strive for. I’ll share a few that have helped keep me fired up.  [click to continue…]