September 20, 2012 By bnjewell
I hate to tell you this, but for your whole working life, you’ve been buying into an idea that is at best a total loser and at worst a total lie.
You didn’t do anything wrong, and you didn’t have any choice in the matter. And even once you see what a bad deal it is, there’s probably nothing that you can do to get out of it. If you’re an American, you’re paying into Social Security, with the promise that it will help to provide for you in retirement. But don’t hold your breath — Social Security is in real trouble, and is a terrible use of your money.
In this series, we’ve been examining how smart, disciplined investing can help us prepare build a strong financial future. We’ve talked about how to take advantage of your company’s retirement plan and investment vehicles like Roth IRAs. We’ve examined the numbers and found that disciplined investing can make you a millionaire. Today’s lesson is also an important one — whatever you do, don’t count on the government to provide for you in retirement. Because the government’s retirement plan is going broke.
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September 11, 2012 By bnjewell
I want to share with you one of the most shocking secrets about personal finance: The size of the nest egg that you build for retirement isn’t about how big your income is. It’s about what you do with the income you have.
In the United States, we have lots of misguided ideas about money. Many of us believe that the best way to a secure financial future is to find a way to earn a huge income. But that’s a red herring; plenty of people with big incomes have very little wealth, and many people who have built solid financial futures have done so on very average salaries. The quality of your financial future isn’t based on your income, but on your discipline.
In this series, we’re looking at how to use investing to build wealth for retirement and other future financial goals. Following the Retirement Pyramid, we’ve looked at the benefits of investing through your company’s retirement plan, and then investing some more in personal IRAs. Today, we’re going to see how disciplined investing can make us millionaires, even on a modest income. [Read more…]
September 2, 2012 By bnjewell
“Ira” is more than just a geeky sounding name — for investors, it’s perhaps the most powerful way to build wealth for the future.
Of course, IRA is an acronym that stands for Individual Retirement Account. There are numerous kinds of IRAs that have been created by the United States government to give people incentive to invest for their futures. The names can be confusing and the details can make even a math major’s head spin. But learn to use them right, and they can be the key to a rock-solid financial future.
We’re going to help you skip the confusion and highlight the very best ways to use an IRA to build your personal wealth.
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August 14, 2012 By bnjewell
The great pyramids of Egypt were masterpieces, carefully planned, painstakingly executed and built to withstand the test of time. And believe it or not, they make a great model for your retirement.
Think about it for a minute — there are a lot of similarities. The great pyramids were built over years and years with the goal of serving a pharaoh at the end of his life. They took monumental amounts of work to accomplish. And the ones built well lasted long after their pharaohs died. A good retirement plan should be the same.
Building a long-term financial legacy is an important part of God’s Master Plan for our financial lives. The Bible makes numerous references to building an inheritance for future generations. In America today, we plan for our own futures and build that inheritance largely through our investing and retirement planning. People that don’t do this planning well can suffer tragic poverty in their old age, and leave their family with little legacy when they depart this earth. But it doesn’t have to be that way. [Read more…]
August 5, 2012 By bnjewell
You’re 25 years old, at the beginning of your career, and excited about the world of possibilities that life has spread out before you. Believe it or not, this is the perfect time to begin thinking about retirement.
Sure, you’ve got 40 years or more of work ahead of you before you clock out of your professional life. So why begin thinking about retirement now, when that occasion seems a lifetime away? Because the key to a great retirement is great planning, and the more diligent and strategic you are when you’re young, the better off you’ll be in your golden years.
Retirement has long been one of the great financial goals of American society, and it presents a lot of enticing opportunities. But it’s also a really complicated thing to pull off. If you want to retire with a great income, that requires a great plan and great investing. Far too many people wait until middle age to start thinking about their retirement, and then panic to try to make up for lost time as quickly as possible. Save yourself the scare by building your retirement plans while you’re young.
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July 26, 2012 By bnjewell
“I have an exciting investment opportunity for you. But you have to act fast….”
Maybe you’ve heard this line before. If anyone has ever offered you a lucrative investment opportunity, and then pressured you to jump on board immediately, I hope that you did act fast — by quickly changing the channel, or by turning around and running the other way.
The world of investing can be an enticing place, full of risk, reward, and the promise that you can become wealthy without doing much work. The idea of making a windfall off of a savvy investment is mighty attractive to many people. And although sound investments offer great ways to build wealth over time, quick and risky investments will almost always leave you high and dry. When you begin to build your personal investment strategy, it’s important to steer clear of investment “opportunities” that seem too good to be true. [Read more…]
July 8, 2012 By bnjewell
In the summer of 2004, an investor named Peter Thiel met a young technology entrepreneur, and decided to invest $500,000 in his new company (valuing the company at just under $5 million). For that investment, he got 10.2% equity in the company. Eight years later, the company went public, offering shares to investors on the New York Stock Exchange. Those stocks sold at such a high price that the entire company was valued at $104 billion, making Thiel’s investment now worth more than $10 billion dollars.
Thiel’s investment may be one of the greatest moves ever made in modern business history. The rapid success of the small company that he first invested in increased that value of his investment by more than 20,000 times. And though you may never have heard of Thiel, you’ve certainly heard of Facebook, the company that made him a billionaire.
In our series on investing, we’ve been talking a lot about public investments. Things like stocks, bonds and mutual funds all deal with investing in companies that are publicly owned (their stocks are available for purchase to anyone who is interested). Most investing done in America is public investing. But at the time that Peter Thiel bought into Facebook, it wasn’t a public company. This was a private investment, and it payed off much better than any public investment ever will. So is private investing a good option for you?
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June 28, 2012 By bnjewell
So, you’re ready to start investing: You’ve read up on stocks and bonds, and you’re anxious to put your money to work for you. The only question now is this: Which stock will you buy first?
If you don’t have a good answer to that question, fear not. You’re not alone. Although everybody knows that we can make good returns on our money by investing well, very few of us really know which companies we should buy shares in. After all, there are more than 9,000 stocks on the market in the U.S. alone, and that doesn’t include other investment vehicles like bonds, commodities and other securities. Unless you have a lot of spare time on your hands and are a very fast learner, your chances of correctly picking a stock to invest your nest egg in are little better than correctly picking the winner of a horse race.
Enter the amateur investor’s best friend — mutual funds. These special investment plans make the stock market accessible to ordinary people, and usually represent your best strategy for investing for the future. [Read more…]
June 17, 2012 By bnjewell
What do Sean Connery, Daniel Craig, and United States Treasury Bills have in common? They’re all “Bonds.” Get it?
Okay, no more crummy jokes, I promise. But it’s interesting to note: If you’re a typical American, you may know a lot more about James Bond than you do about investment bonds.
In this series, we’re examining ways that we can use our money to make more money by investing. Most people are familiar with the concept of the stock market, and many people have heard of bonds as well. But not many people really understand what financial bonds are, how they work and what kind of role they can play in an investment strategy. Today, we’re here to change that. [Read more…]
May 29, 2012 By bnjewell
Have you ever watched a golf tournament on TV and been dumbfounded by the commercials? These events seem to attract a lot of financial advertisers, who use words like “security,” “future,” and “experience” in their messages. That sounds great, I guess. But what does it all really mean?
You’ve probably figured out over the years that these companies have something to do with financial planning, and that many of them are investment firms. But that doesn’t help us much. What exactly do these companies do? Why would you need their services? And what does any of it have to do with golf?
The idea of investing can seem like a pretty hazy thing to many of us. Unless you went to business school, there’s a good chance that you were never formally taught about things like the stock market, mutual funds, retirement accounts and so forth. Somewhere along the way, perhaps you were supposed to figure it all out. But if you didn’t, that’s okay. Over the next series of articles, we’re going to help you make sense of investment, and the impact that it can have on your financial life. [Read more…]