How To Save $100,000

moneyIf you’ve ever read Pete Briger’s bio, you may be wondering how you can win at the financial game, too. Here’s how to make the necessary changes so that you can save your first $100,000. Sacrifices now can mean big savings for the future.

5 Tips To Saving $100,000

Reduce Your Debt

It’s tempting to buy a new car, get a huge home, or treat yourself to a brand new home theater system. However, if you have to use credit to get any of those things, it could take you years to pay off both the loan and the interest. Your first step to saving money should be reducing your debt. Take stock of your loans and figure out how long it will take you to pay them down. Talk to your creditors, too, to find out if you can get a lower interest rate. If you absolutely need to take out a loan, make sure to shop around until you find one with a low interest rate. [Read more…]

Take Big Risks With A Little Bit Of Your Money

My Asset Allocation

My Asset AllocationThis isn’t advice you typically see, but this is a personal maxim that has helped me get more enjoyment and energy out of my investment life. I spent a lot of time in my early investment years thinking about my risk tolerance. I decided that I was fairly open to risk. I had a 95% stock/5% bond allocation in my IRA for many years. But as I’ve gotten a little older, I’ve lessened the amount of risk I’m willing to take on, currently I am at an 80% stock/20% bond allocation. (You can learn the importance of having a good asset allocation in this recent post.)

After all, I’ve made the money I’ve made through lots of time and hard work. I don’t want to risk losing it all. But with less risk, there’s less reward. I found that using my buy and hold approach to investing was rather boring and while I am OK with that, I still wanted a little more excitement.

To put the spice back into my investment life, I decided to take 10% of my portfolio, and invest it however I want. I only do this because my other investments are doing well. I’m secure, and if I lost this 10%, I wouldn’t go under (I refer to this a lot as my “play money”). So I invest it in risky ways, but I also try really hard not to lose it. And so far, I haven’t. On the contrary, I’ve made a lot of money with it. Here’s how. [Read more…]

My Personal Capital Review: Is This The Answer For Investors?

personal capital

personal capitalI’m sure by now many of you have heard of Personal Capital. If you haven’t, then good news, you are about to learn everything you ever wanted to know about them! But before we jump in and start talking in-depth about Personal Capital and why it is so great, I need to explain to you why I am even writing about them in the first place.

Searching For Answers

I’ll admit it, I’m a finance nerd. Anything related to the stock market gets my attention immediately. When I was living with my best friend, we would watch Fox News Channel on Saturday mornings because of all of the investment shows from 10am – 12pm. In fact, we called them our Saturday Morning Cartoons.

Ever since I started investing, I wanted to track my investments. I wanted to monitor my returns and see graphs and charts showing everything imaginable. Just ask my wife and she will tell you that for our net worth statement, I have at least 3 graphs and charts showing different information. I can’t help it. It’s my drug of choice.

Back in the day, I used Microsoft Money for my budgeting and to track my investments. It was nice for what it did, but then Microsoft decided to kill it off. For years, I aimlessly wandered, looking for something to help me track my investments. Everything I came across focused on budgeting and not investments. Sure, with Mint you can add your investments, but you can’t track them in-depth. I was about to give up hope. Then Personal Capital came into my life. [Read more…]

Better Investing Strategy: Buy And Hold Or Active Trading?

better investing strategy

better investing strategyWhen it comes to investing, there are two main approaches: buy and hold or actively trade. In this post I am going to compare the two options in various categories to see which one comes out ahead as the better investing strategy. As longtime readers know, I am all about buying and holding for the long-term. However, I will put my beliefs aside and look at the two strategies as unbiased as possible. Let’s get started.

Better Investing Strategy Rules

Before I start comparing the two strategies, let’s get the ground rules set up. First we have to define what both buy and hold and active trading are:

  • Buy and Hold: This strategy consists of doing the research to pick solid investments, buying them and holding on to these investments for the long-term to capture price appreciation over time. New money invested will be put into these same holdings over time.
  • Active Trading: This strategy consists of researching investments to find ones that are undervalued and buying them for the price appreciation. The holding period is short as the investor is looking to take advantage of the price swings and lock in gains (and limit losses).

I have picked 7 categories for the two strategies to compete in: [Read more…]

What To Look For In Mutual Funds

Mutual Funds

what to look for in Mutual FundsWhen it comes to investing, mutual funds are a great option for many investors. This is because mutual funds allow you to get started investing with a small amount of money and still be diversified from the start. But where do you even start? After all, there are thousands of mutual funds to choose from. This post talks about what to look for in mutual funds. The 5 areas explored here will help you narrow the field of mutual funds down to a more reasonable amount. From there, you can check out my posts on the advantages and disadvantages of mutual funds to knock the list down even further. By the time you get done reading these 3 posts, you should be left with a handful of mutual funds to choose from.

What To Look For In Mutual Funds

With close to 10,000 mutual funds to choose from, how do you know which ones are worth investing in? I did a non-scientific survey of a few random people on the street: Other than relying on their financial advisor to tell them which funds to invest in, the majority responded that they choose which fund to invest in according to the fund’s performance.

The ironic thing with this is that every piece of literature you receive from a mutual fund company states that past performance is not an indication of future performance. The funds are telling you not to pick a fund based on this. Granted, they tell you this in an almost unreadable miniscule font at the bottom of the page. In big fonts are the past performance numbers right in the middle of the page. (Sounds like a conflict of interest to me.) Yet, past performance is how the majority of people pick their investments. The industry knows this, which is why they structure their advertisements this way. [Read more…]

What To Look For In An Investment Manager

investing success

investing successBefore you start looking for an investment manager, it’s important to ask yourself what you want to gain from hiring such a person. Active investment managers are controversial. That’s not because some of them are great at their jobs. It’s because some of them aren’t. So how do you know if yours is good or not?

Look for active managers like the ones at MFS. The goal of an investment manager is to “beat the index”. An index is the overall trajectory of the entire market. It’s based on thousands of stocks. While some of those stocks are succeeding, others are failing. But the overall momentum of the whole market is usually positive growth. This has been the case since the markets were founded generations ago. So people who put their money into broad funds, based on the growth of the entire index, get the benefit of the overall growth of an entire nation’s economy.

But individual stocks sometimes do WAY better than the overall index, growing anywhere from 10 to 400% or even more in a single year. This is where active managers come in. They scope out stocks all over the world and pick their investors the winners, before they win. It’s a hard act, but some managers do it extraordinarily well. MFS does it three ways:

  • Global Outlook: MFS has analysts all over the world, seeing economic realities of different nations in the flesh. They are able to tell how these factors plan into the global economic ecosystem and make sophisticated decisions based on this broader outlook.
  • Risk Management: MFS knows that you can’t predict the future, and that it’s hard to even make an educated guess. So they never act until compensation is guaranteed or very likely.
  • Long Term View: Sometimes investments have to sit for years or decades to pay off. MFS knows when to wait, instead of listening to industry noise.

You can learn more about MFS in the video below:

10 Percent Of Parents Have To Financially Support Grown Children Over 40

thousands of dollars

thousands of dollarsBeing a parent means being responsible for the well-being of your child but should you be financially responsible for them even when they are fully grown adults? Supporting adult children can quickly drain finances and it can lead to some parents having to delay their retirement plans or dip into their savings to be able to afford to help their children out financially when they are adults. According to new research conducted by Fidelity Personal Investing, 10% of parents have to support children over the age of 40, which is an abnormally and worryingly high figure. So, why are so many grown children seeking financial support from their parents?

Wanting To Help At All Costs

When you have a child who is just becoming a fully grown adult, it is common to want to be able to help them to afford to pay for things such as a house deposit, their first car, some new clothes and treat them to a fun holiday. However, with the rise in tuition fees, parents are now paying far more to support their grown children through university as well as for other things leaving many having to alter their lifestyle to be able to do this. While the want to support your children as they go through university is understandable, the rise in the number of parents supporting children over the age of 40 is a worrying trend that was highlighted in the study.

Some parents will provide financial support to their grown children over the age of 40 to help them to pay for their grandchildren, while others will see it as a good way to avoid paying inheritance tax. When you have a child aged 40 or above, it’s likely that you will be thinking of things such as inheritance and this was cited as the reason why some parents provide their fully grown children with money, as they feel it is better to give it to them now, rather than leaving them to pay the high costs associated with inheritance tax.

The reasons that parents cite for taking financial care of children aged 40 and over range from paying for a wedding to supporting their grandchildren, and these are positive reasons that indicate there is no need to worry that this trend will continue into their 50s. There are some things that you can do to plan for the future from a financial perspective, including living more within your financial means and saving money by taking care not to be reckless with your spending habits.

What To Look For In An Investment Company

passive investingWhen your bank account starts to swell and you’re looking for ways to make your money work for you, investing it is one of the best options. However, if you know nothing about investing, you will likely want to hire a company that does. There are plenty of great investment companies out there, but the trick is knowing how to pick the one that is right for the investments you want to make.

Identify Your Goals

The first thing that you need to do is clearly identify your goals, which is the most important aspect of any investment. Choosing the prefect investment company completely depends on what you hope to achieve. While identifying your goals, write down three tasks that you want your investment firm to accomplish. Most people who invest are looking for firms that can capitalize on opportunities that present themselves, increase their wealth and minimize the amount of loss they suffer. You won’t want to even consider an investment company if they can’t meet your goals. [Read more…]

Motif Investing Review: A Game Changer For Investors

motif investing

motif investingAs every day passes, there seems to come another online broker that has a slight twist on the traditional way of investing money. First came Charles Schwab, who brought no-fee ETF trading to the world. Then came firms like Betterment, who automate investing for you. Now comes Motif Investing, who allows you to create your own basket of stocks (or motifs) for a low price.

From the first time I heard of Motif Investing, I was intrigued at what they offered. So I dug around and got the inside scoop on what makes them unique. This is my detailed review of their service – both the good and the bad – so you can see if they are a fit for your investment goals. If they are, great, there is a link where you can sign up at the end of this post. If they are not for you, that is OK too. You can jump over to my broker comparison chart to find a better match. With that said, let’s learn some more about Motif Investing. [Read more…]