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HEY! DID YOU KNOW…


  • The median age in the U.S. is 36.8
  • The median income in the U.S. is $51,939
  • The average 401k match is $1 for $1 up to 6%

A 36.8 year old investing 10% of their $51,939 income with a $3,116.34 match:
With just average stock market returns of 10% would have $1,114,479.31 by retirement.

Join 10,300+ other readers who have learned how anyone, even beginners, can easily make this desire a reality. Download the free ebook: 7 Steps to Understanding the Stock Market.




What You Should Know About Interest Rates For 2018

This is a guest post from RJ Knoll of WealthMaverick. See his bio below.

When most people think about what drives the economy, they think about common terms like supply and demand.

They think about the health of the stock market and the unemployment rate.

While these are undoubtedly important factors to consider, far too many people don’t understand how much of an influence interest rates play. In fact, nothing impacts the economy the same way these rates do and they’re almost entirely decided by a single group.

What Are Interest Rates?

In simplest terms, an interest rate is how much you’re charged for borrowing money. For example, if you borrow $100 at an annual interest rate of 5%, you’ll need to pay the lender $105 at the end of the year. That’s the price you pay – the interest of $5 – for the benefit of being able to spend money now that you otherwise wouldn’t have had.

interest rates 2018

On the lender’s side, they’re compensated for foregoing the ability to spend that money on something else. Interest also incentivizes them to take the risk involved as there’s no guarantee they’ll get their money back.

How the Fed Affects Interest Rates

Even if you never borrow a single penny in your entire life, interest rates will be one of the most important – if not the most important – economic factors that affects your finances.  [click to continue…]

IFB44: Back to the Basics Pt 2: Share Dilution on Wall Street

This is part 2 of the 5 episode “Back to the Basics” series from The Investing for Beginners Podcast. Each episode covers the fundamentals of the stock market and investing to provide a solid foundation for those who are looking to compound their wealth over time.

Here are the links to each of the episodes:

Back to the Basics Pt 1: The Anatomy of Stocks and Shares
–Defining what a stock is
–Talk about the big 3: the cash flow statement, balance sheet, and income statement
–Earnings manipulation

Back to the Basics Pt 2: Share Dilution on Wall Street
–What is a stock
–What are stock buybacks and how they affect us
–What are share dilutions
–What happens when we buy or sell a stock

Back to the Basics Pt 3: Stocks vs Other Investments
–Peer to peer lending
–Real Estate
–Gold and other precious metals
–Bitcoin and other cryptocurrencies
–Bonds

Back to the Basics Pt 4: Investing 101 and Compound Interest
–The importance of buy and hold
–Compound interest and how it can make you wealthy
–Using a compound interest calculator
–The power of dollar cost averaging

Back to the Basics Pt 5: Dividend Stocks and Value Investing
–The advantages of buying low and selling high
–Dividends and the power of compounding

share dilution

Welcome to the Investing for Beginners podcast this is episode 44. Andrew and I are going to continue our discussion on back to the basics with the stock market and last week we talked a little bit about stocks and today we’re going to talk some more about stocks.  Because you know that’s our favorite thing to talk about besides that baseball and so without any further ado Andrew ahead something you wanted to say as we got started.

  • What is a stock
  • What are stock buybacks and how they affect us
  • What are share dilutions
  • What happens when we buy or sell a stock

Andrew: yeah so obviously last week I had a big thing about you know how shares kind of work and the whole premise behind the stock market. Behind why Wall Street’s there what the value is and how it provides value for really the whole world and how we can take part in that.

I think the next thing that we should really cover is how that applies to Wall Street today so obviously Wall Street’s very intimidating and it can seem like if you don’t have a double-double MBA and in finance that there’s no way that you can really have a shot at understanding it and making it work for you, and that’s so far from the truth and everything we try to do with this podcast is really to try to alleviate that and especially with this series that we’ve come up with here with going back to the basics.

We’re really hoping when you can go from just the average person who might not know anything and really start to put some of the pieces together and use that momentum and it can really take you in some far places and so it was really exciting to be kind of a part of that so with the whole discussion last week I talked about how company issues shares and how they can use those share you know they can essentially it’s called raise capital you hear this a lot in Silicon Valley and yeah you know on Shark Tank and with private equity it’s really a place for companies to incubate and get a jump start and go from either they’ll go from nothing to something with a great idea.

[click to continue…]

IFB43: Back to the Basics Pt 1: The Anatomy of Stocks and Shares

This is part 1 of the 5 episode “Back to the Basics” series from The Investing for Beginners Podcast. Each episode covers the fundamentals of the stock market and investing to provide a solid foundation for those who are looking to compound their wealth over time.

Here are the links to each of the episodes:

Back to the Basics Pt 1: The Anatomy of Stocks and Shares
–Defining what a stock is
–Talk about the big 3: the cash flow statement, balance sheet, and income statement
–Earnings manipulation

Back to the Basics Pt 2: Share Dilution on Wall Street
–What is a stock
–What are stock buybacks and how they affect us
–What are share dilutions
–What happens when we buy or sell a stock

Back to the Basics Pt 3: Stocks vs Other Investments
–Peer to peer lending
–Real Estate
–Gold and other precious metals
–Bitcoin and other cryptocurrencies
–Bonds

Back to the Basics Pt 4: Investing 101 and Compound Interest
–The importance of buy and hold
–Compound interest and how it can make you wealthy
–Using a compound interest calculator
–The power of dollar cost averaging

Back to the Basics Pt 5: Dividend Stocks and Value Investing
–The advantages of buying low and selling high
–Dividends and the power of compounding

stocks and shares

Dave: Welcome to Investing for Beginners podcast, this is episode 43. Andrew and I are going to be talking about some beginning stuff. As my baseball coach used to say it’s all about the basics and we used to drill it into our heads every single week, but it works it helped us a lot we were a good team, and we won a lot of games, and so it was awesome.

  • Defining what a stock is
  • Talk about the big 3: the cash flow statement, balance sheet, and income statement
  • Earnings manipulation

So I think going back to the basics is always a great thing and you can never know enough, and it’s always good to just learn the foundation and kind of build from there.

Andrew: yeah let’s talk about stocks. I mean if there is a way to change the archive so this would be the first one. And people would just kind of follow a progression that would be awesome and hopefully this is an episode that we can reference in the future and tell people hey if you’re completely beginner and you want to understand how the stock market works and why it works the way it does and what it all means from the most basic perspective.

Hopefully, this episode will cover that so basically you know we talked about this a lot how a stock is part owner of a company. But you know what does that mean exactly what is the stock market at all and then you know why it even they exist is.

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IFB42: Non U.S. Listeners: Is an International Stock Exchange Your Best Bet?

international stock exchange

 

Welcome to Investing For Beginners podcast, this is episode 42. Andrew and I are going to do something fun tonight; we’re going to answer some reader questions.

  • Correction about how to treat capital gains when selling a stock.
  • What options are there to check the financials of a company before year’s end.
  • Different strategies to utilize when prices fall to help protect your investments.
  • Tips to find the right broker for you.

We’ve gotten some emails in the last week, or so that had some interesting questions. Andrew and I thought we would chat a little bit about those so without any further ado Andrew I’m going to turn it over to you big guy and let you start us off.

Andrew: yeah let’s catch up on some of these huh yeah okay first one person. Alan, he says “hey Andrew in the last episode 39 the question was asked when you buy stocks over time and then you sell which gets sold first, the ones you bought or later ones?

Alan says you and Dave said it didn’t matter from a profit standpoint is correct, but for calculating capital gains tax, it can mean the difference between long-term and short-term capital gains. So if I buy ten shares of stock XYZ a year and a half ago assuming long-term capital gains kicks in after one year and I bought another ten shares three months ago and today I sell ten shares will I pay short-term or long-term capital gains on the sale?

So, Alan, you’re right it does matter as far as capital gains taxes go. I mean like we mentioned in the episode there’s that cut off time of 12 months, and so if you’ve held the stock for less than 12 months, it’s short-term capital gains. Longer than that’s long-term so in essence, if you were to sell the shares that you can hold for as long then yes that would affect how much you get in at the end of the day because you’ll be getting short-term and long-term capital gains.

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IFB41: What I’ve Learned from My Biggest Stock Losers Up to This Point

 

stock losers

Welcome to Investing for Beginners podcast, I’m Dave Ahern, and Andrew Sather is here with us as well. Welcome to episode 41, tonight we’re going to talk to Brad Conway who’s coming all the way from merry old England. Brad is a newer investor, and he’s got some great questions for us tonight.

So without any further ado, I’m going to hand it over to Andrew and Brad. A special note I had some audio difficulties with my speaking tonight, my computer was not working so I had to use my phone. So the audio quality for me will not be so great, so I apologize for that in advance, thank you for your patience, and I hope you guys enjoy the show.

  • How trailing stops and the best ways to utilize them
  • Lessons we learned from our stock losers
  • Margin of safety, emphasis on safety
  • Debt to equity, price to book and other important metrics

 

Brad: excellent yeah, thanks, Dave. So the first question and I want to ask is around stopgaps and there are you know listen to all the podcasts and you talk about I believe you said it’s 25% less of the value that you bought it out of stock and we’re on though is when that gets triggered and are you instantly just selling or do you do little bit of digging around what’s the reasons behind that?

Andrew: so this is very personal depending on how people want to utilize trailing stops I’ve talked on the podcast in the past about how I split my portfolio into two.

So I have the part of the portfolio that’s strict with trailing stops and then the part that is more of like what you’re talking about where if something goes wrong I’m going to dig into a deeper look to see if the stock price that’s fallen is really because of bad fundamentals, bad company financials, or if it’s just because the crowds kind of lost their mind.

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IFB40: Top 7 Money Tips from The Richest Man in Babylon Audio Book

the richest man in babylon audio

Welcome to Investing for Beginners podcast, this is episode 40 in which Andrew and I are going to talk about “The Richest Man in Babylon” a book that was written by George S. Clasen.  This was written back at, but we even know the 30s is that correct?

  • Learn to save money
  • Put your money to work for you
  • Find a way to increase your income, either from a side job or a raise at work
  • Use compounding to your advantage

Andrew: yeah man I don’t have a clue, hopefully, glean something out of it.

Dave: okay fair enough, so we’re not exactly sure when the book was written without having it in front of us. Yeah but it’s one of the easiest books to read, and it is amazingly insightful, and it has a lot of great advice about personal finance.

And it was one of the first books I read when I started digging into investing in kind of personal finance. And again the name of the book was The Richest Man in Babylon, and we’re going to talk about the seven cures for fattening the purse.

So he has seven different cures that Andrew and I are going to go through and talk a little bit about so I’m going to have Andrew go ahead and start us off with number one.

Andrew: Yeah, I mean I think everybody out there who wants to complain about finances. If sees himself in as a tough situation and wants to crawl out of it should read this book and listen to this episode over and over again. [click to continue…]

IFB39: Simple Tax Shelter: Tax Saving Instruments for Your Investments

tax savings instruments

Welcome to Investing for Beginners podcast, this is episode 39. Andrew and I are going to respond to an email that Andrew got asking us some questions. So today we’re going to talk a little bit about some of his questions, go in-depth and answer those for him.

So without any further ado, I’m going to turn it over Andrew, and he’s going to take us through some of the questions.

  • How trading fees can affect your investments
  • How IRAs work
  • The differences between a Roth and a Traditional
  • The benefits of a 401k
  • Some pros and cons of Robinhood

Andrew: thanks, Dave, okay this is from Kurt.  Kirk says

“Hi Andrew, I recently less than two weeks ago came across your podcast and found it so useful and informative. Then I went back to the beginning and then in the process of binge listening to my way through the list of 30 some episodes.”

Andrew: which by the way I say that I highly recommend doing that I remember when I first started listening to podcasts I went through archives of the ones I liked and that’s a great way to you know get knowledge and get acclimated with what’s going on with these topics of these podcasts. so continuing to read on with the email

“before discovering the Investing for Beginners podcast I loaded RobinHood on my phone and began thinking about which stock or fund to purchase. I’m glad I found you when I did, I still don’t have a clue which will be my first purchase, but I now understand that my original selection would have been based on greed for something that is likely overpriced or has other indicators of a poor investment.”

Andrew: sidebar again, that’s very insightful and good job there Kurt at recognizing that and potentially you know you probably saved yourself thousands of dollars in losses and pain by stumbling onto this resource and really taking it to heart and picking it up really quickly, so that’s great back to the email Kurt says so [click to continue…]

IFB38: Financial Reporting and Press Releases Interview with Maj Soueidan

 

financial reports

Welcome to Investing for Beginners podcast, this is episode 38. I’m Dave Ahern, and we have Andrew Sather here with us tonight. Tonight we’re going to have some, the fun we have a special guest with us tonight. So we’re going to be interviewing Maj and Maj is from Geo Investing.

 

  • The differences between minor caps and small caps
  • Defining information arbitrage
  • The advantages of reading press releases
  • How to confirm management statements
  • The importance of footnotes in financial statements, especially subsequent events

 

 

that’s the name of his company, and he’s a very very interesting guy, and this is going to be a lot of fun so without any further ado, Maj would you take a moment and tell everybody about you and kind o fwhat you do and who you are where you from and all that kind of fun stuff.

Maj: excellent yeah well thanks guys for having me here. This is an opportunity; I love talking to other investors and learning new things and every day and hopefully be a little bit today from each other.

So you know Geo Investing was launched in 2007 when our tenth year anniversary geoinvesting.com and you know it’s you know it’s a site that we brought I co-founded with my partner Dan and you know we launched it with the intent to help educate investors about the advantages of investing and smaller capitalized companies. Small caps, minor caps you know and it to help understand how they can get an investing advantage doing that.

And you know in the increasingly competitive environment and you know we’ve been doing that and we it’s been an awesome ride, and we bring our products to our members through morning emails, through model portfolios, through a lot of proprietary research. And you know and our we call our investing call to actions which are what we’re buying and selling.

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IFB37: 5 Practical Peter Lynch Quotes for the Aspiring Beginner

peter lynch quotes

Welcome to Investing for Beginners podcast, this is episode 37. I’m Dave Ahern, and Andrew Sather is here as well. Tonight we’re going to talk about Peter Lynch quotes. This is one of Andrews’s absolute favorite investors.

He read his book quite a while ago called Beating the Street and One Up on Wall Street, and he loved them, and so we thought maybe we would chat a little bit about quotes that Peter Lynch has.

  • Find businesses that sell to other businesses or B2B
  • Know what you’re buying and why you’re buying it
  • All the math you need to invest you learn in fourth grade
  • Investment ideas can come from anywhere

And talked a little bit about his investing philosophy and his ideas and saw how they could help you with your investing. So without any further ado, I’m going to have Andrew go ahead and take us away.

Andrew: just as a disclaimer, I haven’t read One Up on Wall Street yet, that’s on my to-do list. Oh, guess I’m missing out right but Beating the Street was the first investing book I ever read.

It’s super easy to read like I just couldn’t put down the book and I mean I guess I could say the same thing about the Intelligent Investor.  But I’m aware that the Intelligent Investor is a lot harder to get through, it’s a lot drier but Beating the Street, he writes in very conversational tone.

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IFB36: Should You Buy Tesla Stock in this Bull Market?

 

buy tesla stock

Welcome to Investing for Beginners podcast this is episode 36, I’m David Ahern, and Andrew Sather’s here as well. Tonight we’re going to talk about Tesla.

Tesla’s going to be our whipping boy tonight, so I’m going to start off by chatting a little bit about an article that Andrew forwarded to me. He subscribes to the Stansberry digest, and Porter Stansberry is one of Andrews mentors and one of his favorites

He sent me this email a few weeks ago that was kind of awesome, and it talks a lot about Tesla. So I thought that would be a great place for us to start and we’ll just kind of riff off of that.

So I wanted to talk a little bit about just kind of quote here from the article real quick and then we’ll kind of get into it as Porter says.

[click to continue…]