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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.




IFB48: When a Falling Stock Indicates a Failing Business

falling stock

 

Welcome to Investing for Beginners podcast this is episode 48. Andrew and I are going to talk about distressed businesses or negative earnings, negative shareholder equity we’ve never really delved into that aspect of investing and kind of what to look for in companies that having falling stock prices.

We’re going to talk a little bit about maybe some cautionary tales as you’re looking for companies to invest in for your potential retirement,

  • The importance of the price to cash ratio
  • The impact of declining shareholder’s equity
  • The impact of declining earnings
  • What to look for in the financials of a falling company
  • Not every falling company is failing

Without any further ado, I’m going to turn it over to Andrew as always and let him start us off.

Andrew: yeah so I mean we did a bunch of episodes on beginning with the basics. I think let’s dive in we haven’t done anything pretty technical in a while, and I always love to talk about I know some at least some of our listeners like to hear about it.

I thought maybe we could like stay relevant. Obviously there’s been a couple of things that have happened lately, and I realized in the podcast world by the time this comes out it’s going to be months old news. But we had Tesla lose taxpayers billions of dollars we’ve talked about Tesla before so I’m not going to talk about that story with the whole SpaceX thing.

But there is another one, and it’s Sears Holdings it’s on CNBC, and the media and everybody talks about the fall of retail and talks about how Amazon’s taken over that space. And then made a lot of businesses fail and it is very true, and I thought this could be one that we’ll look at a little bit deeper and see.

Because obviously if you look at the stock chart it’s been beaten down and with stocks that are being down sometimes that comes an opportunity. Because then you can buy a low price for Sears, in particular, I will look at like a basic price to cash. The price of cash is 1.8 which means if you’re buying this stock you’re almost getting the cash if the price the cash was 1.

That means let’s say you’re paying a hundred million dollars to get a hundred million dollars in cash like that’s like almost getting like free cash.

It sounds like a like a great value play, but I think you’ll find as we dig deeper into the numbers that there’s more to this story and that even though you see a couple of good metrics from a value standpoint. Because the complete picture isn’t all there than it is a cautionary tale and there are several different symptoms with Sears right now that signal a business in decline.

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IFB47: Back to the Basics Pt 5: Dividend Stocks and Value Investing

This is part 5 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

dividend stocks

Welcome to Investing for Beginners podcast this is episode 46. Andrew and I are going to continue talking about back to the basics. Today we’re going to follow up on we’ve finished last week talking about compound interest, dollar cost averaging and we’re going to talk a little bit more about dividends today.

Of course, that’s Andrews favorite thing to talk about, and we’ll also talk a little bit about buying low and sell high.  Without any further ado, I’m going to turn it over to Andrew to get our chat started, and we’ll just go from there.

  • The advantages of buying low and selling high
  • Dividends and the power of compounding

Andrew: cool so dividends yes let me get started because we were looking at the backbones of it. We’re looking at you know we talked about the anatomy of stocks and what shares represent. Whether dividends and how do they relate and why are they powerful for us. Dividends are pieces of earnings that companies are going to pay out to shareholders.

It’s in my opinion which is it’s debatable because of a lot of people kind of look past this. But I see investments as the whole point of having an investment is to receive an income. When you buy an investment you are taking on a certain amount of financial risk there’s a chance that you could lose all of your capital.

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IFB46: Back to the Basics Pt 4: Investing 101 and Compound Interest

This is part 4 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

 

investing 101

Welcome to Investing for Beginners podcast this is episode 46. Andrew and I are going to continue our series on back to the basics, and today we’re going to talk about buy and hold and why that’s important. As well as compound interest and some other interesting topics. So without any further ado, I’m going to turn it over to Andrew, and he’s going to start off our chat.

  • 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

Andrew:  If you’ve read any investing books and gotten involved with the whole scene, these are a lot of the things that are similar themes. I’m hoping with these episodes that we’re going at such an in-depth level that you’re still picking up things that are valuable.

The whole goal of this is to get things to stick. Because it’s one thing to hear something but if you can take these basics and master them– give yourself the reasons why and give yourself not just the how but the why. Give yourself a firm foundation and understanding on why these things are applicable and why, when things get tough, you’re going to have these values to stick to. It’s important to get this mastery rather than just floating through the wind, and when adversity comes, if you don’t have this foundation you might forget about all these lessons or you just might be stubborn and not listen to what’s been proven.

And this kind of like conventional logic when it comes to the stock market and investing and so I think it really can have a big impact on your final results as you navigate through the stock market.

[click to continue…]

IFB45: Back to the Basics Pt 3: Stocks vs Other Investments

This is part 3 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

other investments

Welcome to Investing for Beginners podcasts this is episode 45. Andrew and I are going to continue our conversation about back to basics with stocks and tonight’s topic is going to stock versus other investment options.

So Andrew and I are going to talk a little bit about some crypto maybe a little gold maybe a little real estate we’ll just kind of give a brief overlay of those ideas and then talk about how those could be good or bad investments for you versus stocks so Andrew why don’t you go ahead and take it away, and we’ll just chat away.

  • Peer to peer lending
  • Real Estate
  • Gold and other precious metals
  • Bitcoin and other cryptocurrencies
  • Bonds

Andrew: Yeah, I feel like with every episode we do we keep saying we’re going back to the basics so now I want to take another step back and let’s go back to the basics again and let’s talk about even before we jump into stock let’s talk about investing in general. And so once you’ve made a decision that you want to invest money and put it to work making these dollars work for you to make more money and to be able to start this compounding that’s going to create hopefully massive wealth for you in the future. Create future income streams before we do all that you have to take a step back and understand that there’s a lot of different places that you can put your money.

A lot of different ways you can make it work for you, some of them are going to be good and some of them will do better than others. Certain time periods will be better for a certain type of individual and so on.

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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…]