Have you ever heard of a budget calendar? Personally, I use one nearly every single day of the week and it saves me a ton of time and money, as well as keeping me on track with my budget without physically having to go in and track my expenses every single day. 

And not only does it save me time, but there’s a pretty cool trick with using one that increases my annual savings at a pretty drastic rate, but don’t worry, I’ll show you that too!

I think that the most important task for a budget to accomplish is to make it find the perfect blend of being simplistic and forcing you to track your expenses.  Personally, I feel that tracking your expenses is the best way to make sure that you truly understand where your money is being spent and then you’ll be able to effectively analyze if that money is being spent on needs or wants.  If you’re not tracking it yourself, then you’re not getting enough into the details to be able to really make any real changes.

But at the same time, your budget needs to be simplistic enough so that you actually use it.  If it takes hours and hours, you will simply stop using it altogether then that’s a complete waste of time, effort and money. 

So, it’s all about finding that perfect blend – and that’s why I created Doctor Budget!  Doctor Budget causes you to track, but in the way that you can truly input all of your spending for an entire month in less than 15 minutes. But even with tracking being so quick and easy to do, it still requires a little bit of time and effort, so that’s why I created this budget calendar as an “add on” tab that will be included in Doctor Budget, and sent out to all of you current Doctor Spreadsheet users as well!

So, what exactly even is a budget calendar, and why is it useful?

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Announcer (00:00):

You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now.

New Speaker (00:36):

Welcome to Investing for Beginners podcast. This is episode 151 tonight. Andrew and I are going to continue our discussion economy. This is going to be an economy 101 part three, and tonight we’re going to do kind of a wide range discussion of a variety of different topics. The first one we’re going to start off talking about is a little bit about government debt and treasury bonds and bills and T and P note T bonds and kind of how all that stuff works. So I’m going to talk a little bit about that, and then I’ll turn it over to Andrew. So let’s talk about government debt. So government debt is, when I’m referring to government debt, I’m talking about two different aspects of it. So the first part I’m talking about is there’s the federal reserve balance sheet, which we’ve discussed in length in the past. And that is more about the federal, federal reserve bank of the United States taking on debt to try to infuse money into the system to try to create more liquidity, which hopefully will stimulate the economy with what’s going on with the pandemic and the lockdowns and most of the economy being shut down.

Dave (01:49):

Thirty million people, I believe, are out of work right now, which is a staggering number. The fed has been trying to pump more liquidity into the system by creating money for the reserves as well as buying T bonds and T-bills back from banks to put on their balance sheets that give the banks talking commercial banks like JP Morgan, Wells Fargo, Bank of America, us bank, and on and on. More liquidity to lend to us to be able to buy things as well as businesses. So the other aspect of that debt is the Treasury, the Treasury is, those are the people that sell us the T-bills and the bonds and the notes. And so on. And they just recently announced that they’re going to be having a large offering here in the upcoming week or so I believe. I don’t remember the exact amount off the top of my head, but it was quite extensive, three or $4 trillion somewhere in that range.

Dave (02:50):

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Using maps to find our way is great for vacations, but blindly following models in any other field can lead to errors in judgment or thinking. Using the map is not the territory as a mental model is a useful way to think outside of your normal box.

“The map appears to us more real than the land.”

D.H. Lawrence

Think about a map; as a general rule, they are not perfect. They are a reduction of the area they represent if they were full scale, then how could we possibly use them? The reduction is what makes them useful to us. Maps are also snapshots in time, representing visual clues of something that might not exist anymore. An example is looking at maps that were used during Julius Caeser’s march through ancient Gaul, modern France. Landmarks no longer exist; cities mentioned no longer exist. But the maps can provide context and details that help illustrate what the Roman legions endured.

Remember these thoughts, as they help us think and resolve problems.

In today’s post, we will discuss:

• The Origination of the idea “The Map is Not the Territory.”
• An Example of The Idea
• Nassim Taleb and VAR
• How to Put this Process to Work

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How can you tell when interest rates might rise, and what impact would that have on our lives? There are some simple tools you can use to answer that question and be ahead of the curve.

Interest rates have an incredible impact on our lives, from our mortgages or student loans, investments, or what we pay for different goods and services.

Low-interest rates lead to lower prices, and conversely, higher interest rates lead to increases in prices.

There are a few simple indicators that lead us in the direction of likely interest rate increases. There is no firm indicator that says this is it; interest rates will rise. Rather it is a combination of indicators that give us clues.

In today’s post, we will cover:

• The Three Forces That Shape Interest Rates
• Yield Curve and Its Impact on Interest Rates
• Consumer Price Index (CPI)
• Producer Price Index (PPI)
• An Example from The Great Recession

Three Forces That Affect Interest Rates

Three forces affect the interest rates we are charged here in the U.S. In this section, we will discuss those forces and how they impact interest rates.

I want to stress that the Fed determines interest rates, and there is no accurate indicator that will tell you conclusively that interest rates will rise or fall.

Let’s discuss these factors.

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Kiyosaki is back at it again, this time with 10 steps for any of us to take when we’re building assets!  Now, of course, building assets is incredibly important, but if you’re wondering how to actually identify what an asset might actually look like, I will link back to a previous post on that as well! 

My two favorite things about Rich Dad, Poor Dad, that I have definitely brought up before, but it is worth mentioning, are:

1 – He breaks his lessons down in a way that anyone can understand.  He is telling lessons from his childhood, where he had taught them, so essentially anyone, child age or older, should be able to understand the underlying lesson of what he is teaching

2 – His lessons are actionable.  He gives you specific steps or things that you can focus on to take the lesson that you were just taught to the next step.

I’ve read a lot of books where I learn a lot, but it might be way too in depth for the average person, including me (looking at you, the late chapters of ‘The Essays of Warren Buffett’.  But then there’s other books where I learn a lot, close the book and go, “well, that was great, but I still don’t have any idea what to do next.”

Rich Dad, Poor Dad is the first investing/personal finance book that I have read that easily accomplishes both of these two items, so I give it a major thumbs up!

So, 10 Steps to Building Assets – that sounds pretty legit, right?  Let’s get going on it!

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Investing right now is a very scary time with all of the uncertainty that is surrounding the coronavirus.  In a recent episode of the Investing for Beginners Podcast, Andrew and Dave opened up the floor to answer some listener questions and there’s one that I really wanted to focus on that discussed the short-term liquidity of a company.

The market is all over the place right now and many businesses are going months, and maybe longer, without any revenue at all.  A lot of retailers have completely shut their doors along with all movie theaters, cruises, airlines, etc.  Many restaurants are completely closed or doing takeout only. 

Example: Lost Revenue from a Pandemic

I went to Chipotle yesterday and there were 20 people waiting outside, social distancing, for their orders to be picked up.  People were there for over an hour because the staff was so behind because the staff also was social distancing, meaning less people on the line making your orders.  It was insane. 

I applaud Chipotle for the steps they’re taking but I also will not be back until it’s normal or I will only order delivery, because it’s not worth me standing outside for an hour, plain and simple.

So, let’s think about Chipotle here – they’re obviously losing sales because people can’t dine in, and they can’t serve customers as fast as they want so they will lose customers, like me, that determined it’s not worth the wait. 

And I want to specifically say that I had a bad experience, but it was absolutely not to blame Chipotle, and I actually appreciate waiting longer to know they’re keeping their employees safe, who all had masks on, by the way…but that still doesn’t make it worth my time to wait.

So, if you’re an investor in Chipotle, how do you know if the company is going to be able to stick it through the coronavirus?

Well, the short answer is you want to make sure that Chipotle has enough cash and other assets to cover their liabilities that might come up until things you can get back to normal. 

Simple, right?

Andrew and Dave hit on a lot of different ways to be able to find out if a company is poised to be able to handle these tough times and I really want to take a deep dive into a few different points that they mentioned:

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Prudential (PRU) 1^st Quarter 2020 10Q Summary

Prudential Financial Inc announced its first-quarter 2020 results on May 5, 2020. The quarter was as expected, given the ongoing results from operations affected by the Covid-19 pandemic.

This summary will discuss the different segments of operations for Prudential, as well as management’s discussions on the upcoming year and potential impacts from the pandemic.

We will also discuss risks the company faces, and include a potential valuation for price assessment for the upcoming quarters.

Ok, let’s dive in and look at what occurred during the first quarter of 2020.

Overview of Results

• Net loss for the 1^st quarter of $271 million or $0.70 per share compared to net income of $932 million or $2.22 per share of the year-ago quarter.
• Prudential had adjusted after-tax operating income of $939 million or $2.32 per share compared to $1.259 billion or $3.00 per share of the year-ago quarter
• Book value per share for Prudential of $152.45 compared to $132.83 per share of the previous year’s quarter. The adjusted book value per share of $99.71 versus $96.76 per share the previous year.
• Prudential returned $945 million of capital to shareholders in the form of $500 in share buybacks and $445 in dividends. An increase compared to the previous year’s quarter of $915 million. The dividend per share was raised to $1.10, a 4% yield on the adjusted book value.
• Prudential carries $5.3 billion of highly liquid assets compared to $5.5 billion of last year.
• Prudential also completed $1.5 billion of senior bond issuance, which is intended to cover maturities of the investment portfolio through 2021.
• Assets under management of Prudential amounted to $1.481 trillion versus $1.456 trillion of the year-ago quarter.

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Everything that Andrew and Dave preach on the podcast, and something that I have learned from them and quickly adopted, is the importance of understanding the numbers when investing so that we can be disciplined fundamental investors.

I mean, Andrew and Dave have really coined the term to “invest with a margin of safety, emphasis on the safety” and the only way that you can truly do that is by finding a company that is undervalued vs their intrinsic value, and they best way to do that is by utilizing the Value Trap Indicator.

Just as I said that I learned this important philosophy from Andrew and Dave, I think that it’s important for us all to find those leaders that we can try to mimic our own investment strategies after, so I figured it was time to narrow down the list…welcome to the Mount Rushmore of the Greatest Fundamental Investors in the Stock Market!

Peter Lynch

I feel like I have to start my list off with Peter Lynch.  Not necessarily that he’s my #1 on the Mount Rushmore, but he has had one of the most important roles in shaping me personally as an investor.  Lynch has written many books but the two that I love are ‘One Up on Wall Street’ and ‘Beating the Street.’ 

Both of these books have taught me not only the theory of investing but a great application to actually be able to apply his knowledge to get ahead in the market.

Lynch coined the term 10 Bagger because, well, he had a lot of them.  Lynch was able to identify companies that had a great opportunity to become worth 10+ times what he paid for them and to be honest, isn’t that what we’re all hoping to be able to do?

He also created the PEG ratio, which essentially is taking the ever-common P/E ratio and then applying a growth aspect to it, hence the ‘G’ in P/E.  He felt that while the current P/E is important, it only shows where the company has been and not necessarily where they’re going.

Two great quotes from Lynch that really sum up everything about him are:

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Announcer (00:00):

You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now.

Dave (00:36):

All right, folks, we’ll welcome to Investing for Beginners podcast. This is episode 150 tonight; we’re going to continue our discussion on the economy. Talk a little bit about economic basics. This is going to be part two. We’re going to talk a little bit about inflation, deflation, hyperinflation, money, some of those fun topics. And we’ll try to make it interesting for you guys, so you don’t go into a snooze fest. I was just kidding. So I’m going to start us off a little bit and talk about a few of the basics. So let’s talk a little bit about inflation and deflation. So basically, inflation is the increase in prices for supply and demand. So goods and services. So when goods and services and their prices rise, so that would be considered inflation. The opposite of that would be deflation. So that when the prices of supplies and, or I’m sorry, goods and services decrease, that would be deflation. Now, most people think that inflation is a bad thing, and it’s not a when prices are rising; generally, that’s a good thing because, along with that, typically then wages are going to rise at the same time.

Dave (01:50):

So inflation can be a good thing and the only, there are times when it’s going to be bad. So, for example, something like hyperinflation, hyperinflation is when the prices rise more than 50% in a month. And that’s not good because wages are not going to increase at that weight, at that rate, which means that things are going to cost more and we’re not going to be able to buy as much. And as we’ve talked about before, that all kind of feeds into the economy. So when we’re talking about inflation and deflation, we’re also talking about the monetary supply. So the monetary supply, how that impacts both of those is when there’s credit expansion, and there’s too much money in this system. Kind of like what’s happening right now is the cysts. They’re flooding the economy with a lot of money. And what they’re trying to do is they’re trying to tamp down on inflation by doing that because when there’s too much money in the supply system that just me or the monetary system, that means that there’s too much money chasing prices and it helps lower the prices.

Dave (02:58):

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