A Wall Street Fairy Tale

Is the sky really falling?

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Chicken Little lived in Storybook Land. He had a nice government job working for the King, Mr. T. Chicken Little wasn’t born rich, but he was smart and read a lot. He wanted to be rich someday like his cousin Goose Golden-Eggs. Money just seemed to drop out of Goose. She left a pile of wealth everywhere she sat. It didn’t seem fair that some people were  born rich and had more money than brains, but no one ever said life was fair. Chicken had feathered his nest with Index Funds from the Stock Market. He hoped to have a very nice nest egg when he retired. He always paid attention to what was happening with The Stock Market.

The Stock Market was co-owned  by Mr. Bull and Mr. Bear. No one had seen Mr. Bear in years, not since 2009. No one liked it when Mr. Bear ran the market, but thankfully he only did so about once every seven years, and he never ran it for very long. Mr. Bull did a much better job running the Stock Market and always managed to clean up the mess left by Mr. Bear. He even had a new friend keeping him company on Wall Street,  Fearless Girl who just showed up one day and has hung around with Mr. Bull ever since.

Now Chicken Little was always running home from work each day, because he always wanted to see what the Talking Heads on TV had to say. Everyone in Storybook land watched different Talking Heads. There were many of them and you could always find one you liked. The problem was that they all said something different, so you had to be really careful which ones you listened to. Some of them said some very bad and dumb things, and if you listened to them too much, you grew very sad and jaded, like The Old Witch.

The Old Witch liked to tell everyone how  smart she was because she was very old, and she watched the Talking Heads all day long, so she knew everything. As Chicken Little was passing her home, she waved him over.

“Hi Chicken, did  you hear what my favorite Talking Heads said today?”

“No Witch, I was busy working all day so I could have more money to feather my nest.”

“They said Mr. T the King is an idiot, his son is retarded, and he’s going to destroy the world.”

Chicken Little was aghast! He couldn’t believe anyone would say such terrible things, much less listen to them, so he decided to quickly change the subject.

“Say Witch, you’re old and know everything. What’s the best thing to do with your money? I leave ten percent of  my money in  The Stock Market with Mr. Bull and he takes great care of it.”

“The Stock Market?!” she yelled. “You’d have to be crazy to leave money in the Stock Market. Do you remember the big crash of 1929? Humpty Dumpty lost everything  in the Market and leapt to his death because he was so depressed. Only idiots put their money in the Stock Market. I hide all my extra cash in my mattress,  it’s safer than a bank, and I own a nice house, it’s made of Candy and Chocolate.”

Chicken Little didn’t own a house, he rented a nice apartment with a great view. He eyed her home skeptically. “Isn’t candy bad for you? I heard it makes you fat and gives you diabetes.”

 The Old Witch scowled and gave him an angry look.

“What do you know? You’re not as old as I am, and you’re not as smart. I watch the Talking Heads all day. Chocolate comes from cocoa, which is a bean.  Candy is made with sugar which come from sugarcane. So both come from plants and therefore they are both vegetables and vegetables are good for you. Now scat! I’m busy, my favorite TV show is about to start.”

Chicken Little walked away shaking his head. Next he came to the house of the Pigs.

Practical Pig owned a house made of Gold Bricks. He and his brother Fifer were in the yard gardening as Chicken walked past. He called to them.

“Hey Pigs! I was talking with the Old Witch about money, what do you do with yours?”

“All my money is invested in real estate and precious metals.” replied Practical Pig pointing at his house made of gold bricks. Fifer said nothing, he just smiled. 

Practical was older and smarter than his brother Fifer. Fifer lived with his brother and slept on his couch. Fifer  used to own a house made of sticks. It was built on a foundation of sand, and financed with a ‘Ninja’ loan. It was a variable rate mortgage which inflated quickly. Fifer eventually lost his house of sticks when the housing bubble bust, so now he had to live with his brother.

“Isn’t gold and real estate expensive?” asked Chicken.

“It can be, but everyone has to live somewhere, and gold had never been worthless so both are great investments.”  Practical replied.

Chicken alternated looks between Practical Pig and his homeless brother Fifer.

“Say Practical, do you ever hear from your other brother Fiddler?”

“Oh yeah. I spoke to him on the phone this morning. He just moved into a huge expensive mansion financed by BitCoin and Ethereum. It’s totally built out of Ones and Zeros. I worry about him, some day he’ll be sleeping on my couch too.”

Chicken waved goodbye at the brothers and hurried home to his maintenance-free apartment.

The first thing he did when he got home was to turn on the News to listen to what the Talking Heads were saying about the day’s business news. They were all screaming that the sky was falling because the market plunged nearly 666 points and that it was probably the end of the world.

Chicken Little was so shocked by the news that he passed out!

After he recovered from the shock, he reviewed the various news clips to see why the market fell.

Some of the Talking Heads blamed Mr. T the King  for constantly letting his pet blue birds The Tweets fly free,  and said that he didn’t play well with others. Some of the Talking Heads said the Market Fell because The Wicked Witch of the West was the rightful ruler of Storybook Land and the throne had been stolen from her. A few others blamed it on The Man in the Moon and yelled at the sky. A few blamed the Russians. A few said they had ‘no idea why, it was a mystery.’ A few said it fell because the market fluctuates and it’ll bounce back. Uncle Warren the Wise Wizard of Wall Street said he was going to buy lots of cheap stocks first thing in the morning.  Little Jack Horner  sat in the corner eating his pie. The Cheshire Cat smiled until he faded away,  leaving only his grin. Everyone seemed to react to the news differently.

In the end, Chicken Little checked that his nest was still intact, saw that his index stocks were still up for the year, and discovered that despite what some of the Talking Heads claimed, everything was going to be just fine. He decided to listen to Uncle Warren and pick up a few bargains at the Stock Market, and knew that one day, he too would grow up to be a Wizard of Wall Street.

The End

Fairy Tales were a traditional way to entertain young impressionable minds while at the same time conveying a moral lesson. Even Jesus Christ occasionally turned to parables when trying to covey complex ideas to the crowd. There are lots of individuals who have difficulty understanding  how the economy, the stock market, and even personal finances work.  Throw in politics and religion and people get real confused quite fast.

February 2nd, 2018 marked one of the largest drops of the Dow Jones Industrial Average  since 2009. The thousand point plunge from the prior week’s high probably scared the novice investor to death. It’s not as bad as some of the ‘experts’ are claiming. Investing in stocks still results in far greater returns on investment than real estate, precious metals, or even the dangerous new gimmick, crypto-currencies like BitCoin. I’d stay far away from that last one, when that bubble pops, it’s going to burst loud and hard!

The bottom line is that there are many factors which impact our day to day lives, and just as many pundits, cynics, and fools with opinions. Everyone has an opinion.  It can become quite the task to filter out the many voices and distill all the information to refine a pure source.  What do singers , athletes, and movie stars really know when they speak on a topic? For every one celebrity with an actual college degree, there are at least a hundred who barely even graduated  high school.  Check your sources, check your information, and review your facts before making a decision which could potentially ruin your future happiness. Just because everyone around you is telling you what you want to hear doesn’t mean it’s the truth. You just might be in an echo chamber surrounded by sycophants.   Tread carefully.  As always, I wish you happiness and success!    

WTF? (What’s the FICO?)

Understanding the 3 digit number that rules your finances.

The acronym  FICO stands for Fair Isaac Corporation.  FICO is a data analytics company which was founded in 1956 by Bill Fair and Earl Isaac.  Using data gleaned from your credit history, FICO generates a score between 300 and 850 which aids creditors in assessing your credit worthiness.  The higher your  score, the better the credit offers and terms you receive. Any number under 629 is a poor score. Fair to average ranges from 630 to 689. Good is between 690 and 719. Anything above a 720 is considered excellent. The scores reflect credit payment patterns over time with more emphasis on recent information. Scores automatically improve, as one’s overall credit picture gets better. That means showing a historical pattern of paying your bills on time and using credit conservatively.

In order to calculate a score, your credit report must contain recent enough info on which to base the number. The minimum amount of information needed is at least one account opened for at least six months or longer, and which has been reported to the credit bureau in the last six months. Adding to the confusion, there are three credit bureaus, Equifax, TransUnion, and Experian. The credit history reports from each of these companies may contain different information, and thus could result in three different FICO scores depending on the information contained within.   

Never assume each credit bureau has your identical credit history. They receive only the information supplied them by lenders, collection agencies, and court records. One bureau may have more up-to-date information than another because some lenders report credit information to the credit bureaus at different times,  resulting in discrepancies. The credit bureaus may record, display or store the same information in different ways. You should review your credit history at least once a year, and you are entitled to ONE free annual report from EACH of the three agencies. You can request a copy from AnnualCreditReport.com this is the ONLY real site to check, don’t be fooled by look-a-likes or fake phishing sites that want to steal your identity.  

Keep in mind the following:

Not all credit scores are “FICO” scores. Some credit agencies may use an internal scoring system of their own creation. FICO scores are ONLY generated by the FICO corporation. Over 90% of major creditors use FICO scores to determine your credit-worthiness.

Your FICO score will change over time.  Just because you had an 810 three months ago doesn’t mean it’s that today. This is caused by changes in your credit history report. Each time your  debt ratio on  your credit cards change, your score can change. A major purchase that brings your card close to its limit will drop your score until the balances snap back to somewhere near $0.00  and the new lower balance is reported.

Some creditors report your credit info very frequently to the credit bureau while others may only do so on a quarterly basis, and this can change your numbers as well.

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How is the FICO number determined?

You FICO score is based on the following:

35%- Payment History

30%- Outstanding Debt

15%- Total Credit History

10%- New Credit Requests

10%- Credit Type Diversity

If you want to raise your score, you need to pay your bills on time, every time, keep your balances low, and apply for new credit only when necessary. NO EXCEPTIONS, NO EXCUSES.  Late payments are reported to the credit agencies, as well as your total balances, and new credit requests. Adding negative information to your credit history will cause your FICO score to drop  like a rock! Any negative information will stay on your history for up to seven years. It is imperative that you do everything possible to avoid anything which will compromise your good credit.

Here are some suggested tips to follow:

DO:

  • Pay your bills on time! I can’t stress this enough .
  • IF you mess up and miss a payment, get current and stay current! The longer you pay your bills on time, the better your score. Every time you mess up, you sabotage everything you’ve accomplished to that point. SO DON’T MESS UP!  
  • If you are so deep in debt that you can’t make ends meet, contact your creditors and seek help from a legitimate credit counseling service. You need to get your debt under control before you can fix it. You can’t run or hide from your creditors. It will make things worse. Trust me. I speak from experience. Re-establish your credit history if you have had problems. It will take time, but it can be done. I did it, you can too!
  • Keep balances low on credit cards, (under 10%), and avoid carrying a balance.
  • Pay off debt rather than move it around.
  • Open new accounts only when needed.
  • Check your credit history once a year.

DON’T:

  • Close unused credit cards, it will lower your score.
  • Open new credit cards that you do not need. This could lower your score.

I know all of the above information can seem a bit daunting. If you’re overextended in your financial circumstances because ‘life happened’, I get it. It’s no fun having collection companies calling your home and harassing you because THEY want THEIR money.  I’ve had poor credit.  Now I have excellent credit.  I can tell you from experience that life is great when you have all your bills paid on time, are debt free, have cash in your wallet, money in the bank, and a FICO score over 750. It took time and persistence for me to accomplish this. It didn’t get fixed overnight, but it did get fixed because I stuck to the plan. I tell you this not to brag about my wealth and success, but to encourage you to follow my lead. I did it, and you can too. I believe in you. As always I wish you  happiness and success!

January : Perfect time for re-balancing the budget!

Keeping you in the black in 2018

We’re three weeks into the new year, and like many folks, you probably went overboard with Christmas spending and then also got hit with some seasonal bills to boot. The start of the new year is the perfect time to analyze last year’s spending habits  and retool the budget for maximum success.

 

Write it down!

Keep a ledger of all your spending. Keep track of every penny and ask for receipts so you don’t forget something.  Also try to have ZERO days, where you spent NOTHING! Try to make a game of beating the number of ZERO days from one week to the next, and one month to the next. This will both help to motivate you and curb your finances at the same time.  I use a spiral bound notebook, purchased on sale at Wal-Mart for 50¢ ! If you notice that you are spending a high amount of money eating out, or on non-essentials, resolve to cut back in that category.

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Make a list of regularly occurring  monthly charges such as rent, utilities, and credit cards, and keep a record of their respective due dates. This will allow you to plan these payments according to your pay dates. Never spend more money than you earn!

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If you have high heating bills in the winter, contact your utility company and ask to be put on a budget plan. Then you’ll have  12 equal monthly bills each reflecting 1/12 of your total annual estimated consumption, instead of low bills in Summer and high bills in Winter. Trust me, it’s much easier to stick to a budget this way.

Set aside any ‘extra’ money you trim from your budget to build up emergency savings, or to fund future vacations or big-ticket items.

Clean out the pantry!                                    

If you’ve stocked up the larder with an impressive amount of groceries, resolve to use these groceries over the coming months. You don’t want to have food go out of code in the back of the cupboard because you felt like ordering take-out for the tenth time this month. Spoiled food is wasted money! A home-cooked meal made from scratch with assorted food-stuffs will stretch your pay-check and increase your ability to save even more money! Always keep track of what’s in the house, and don’t buy groceries you don’t need.  Take a list of what you need with you to the store, stick to the list, and buy it on sale, with coupons if at all possible. Also, be sure to avoid the impulse-buy traps the stores lay out for you when you shop.

Clear the queue!

If you have been using credit cards correctly and are reaping the benefits of reward points, then you are already in the habit of paying your entire balance in full each month. That’s excellent, BUT there is usually a two to three week gap between the statement closing date, the invoice mailing date and the monthly due date. If you’re using your cards every day, you run the risk of overcharging and blowing your budget the following month. Let’s assume your VISA cards closing date is January 15th. and about 5 days later, you receive the bill in the mail on January 20th, with a due date of February 2nd.   This bill will have all your charges from December 16th 2017 through January 15th 2018. Let’s say the balance is $1136 on the statement. This will NOT reflect the $30 gas you charged on 1/16, the $235 in groceries you charged on 1/18 and the $17 at the fast food place you stopped at on the way home on 1/20 before you even got home to see the visa bill waiting in your mailbox.  So even though you immediately write a check to cover the $1136 on the VISA bill, you technically are still in debt $282 in new charges not reflected  on the current statement which will appear on your NEXT statement.

What you need to do is go on a credit card ‘diet’ and clear the queue of future charges posted to future statements. First resolve to go ‘cash only’ for a thirty-to-sixty day period.  This will allow you to zero out your balances, and get back to spending as you go, verses carrying interest-free debt on a grace period.  This may be hard if you have automatic recurring payments scheduled, but the trick there is to send a ‘double payment’ the one month.

Trust me, you don’t want to be carrying a ‘grace period’ balance, fully expecting to pay it in full next month, only to have an unexpected life event zap your ability to do so. No one plans to get fired, become incapacitated by illness, or suddenly face an unexpected  car repair job. Life happens. A wise man expects the unexpected and plans accordingly .  As always I wish you  happiness and success!

Will you be left out in the cold?

Security in your golden years is up to you!

” Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler,  yet it stores its provisions in summer and gathers its food at harvest..” Proverbs 6:6-8 NIV

Grasshopper

The Grasshopper and the Ant  is one of Aesop’s Fables and draws its origin from Proverbs 6:6-8 in the Bible. Aesop is thought to have been a Greek slave who lived about 600 B.C.  The fable describes how a hungry grasshopper begs for food from an ant when winter comes and is refused. The situation sums up moral lessons about the virtues of hard work and planning for the future.

Cradle to grave– A Ponzi Scheme

Charles Ponzi was an Italian swindler who ran a fraudulent investment  con operation where returns for older investors were funded through revenue paid by new investors. This is by and large how Social Security works.

 The Social Security Act was signed into law by President Roosevelt on August 14, 1935. In addition to several provisions for general welfare, the new Act created a social insurance program designed to pay retired workers age 65 or older a continuing income after retirement. The Social Security Administration will deny that it is a Ponzi scheme, even going into detail as to why it’s not a Ponzi scheme in one of its publications and again on its website. Social Security is part of a government attempt to provide ‘cradle to grave’ social welfare programs to provide for citizens of the USA. Relying on Social Security to support you in your old age is a terrible idea. It exists solely to provide funds for people too lazy to set aside funds for their retirement, and it will barely be able to cover basic needs. I have personally witnessed my mother and her sisters struggle and fail to make ends meet with Social Security. My mother would have been homeless without me bridging the shortfall left by her $450 a month SSA check the last five years of her life. My last living aunt is 76 and gets a meager $1060 per month.  She is constantly falling behind on the rent. She HAS been homeless, and will probably be again in the near future after alienating most of the family.   

“In this present crisis, government is not the solution to our problem; government is the problem.” – President Ronald Reagan

Your retirement is your business, not the governments!

The 401(k) provision was created in the 1978 Tax Revenue Act,  but went largely unnoticed for two years until Ted Benna, noticed that the tax clause in section 401, subsection (k), did not preclude pre-tax salary reduction when it stipulated that cash or deferred-bonus plans qualified for tax deferral.  It was a creative loophole that eventually led to rise of the 401(k) Plan as a major wealth-generating retirement tool.  Ronald Reagan had made personal saving through tax-deferred individual retirement accounts, or IRAs, a component of his campaign and presidency. (He went on to sign this new interpretation into tax law after he won the 1980 election. ) Payroll deductions for IRAs were allowed in 1981.

In February of 2005 Republican President George W. Bush outlined a major initiative to reform Social Security which included partial privatization of the system, personal Social Security accounts, and options to permit Americans to divert a portion of their Social Security tax (FICA) into secured investments.  In essence, he wanted to wean the populace off the teat of Social Security and move them into more financially lucrative personal IRAs. Democrats opposed the proposal and after gaining control of both houses following the 2006 Midterm elections, effectively killed the plan for the remainder of Bush’s term in office.  The Democrats created the failure that is Social Security, and they will fight to keep us under its yoke. The path to fiscal independence is paved with the gold bricks of IRAs and 401(k) plans. Countless fortunes have been made by investing in the stock market. No one have ever become wealthy by collecting monthly SSA checks.

IRA vs. 401(k): What’s the difference?  

Both 401(K) plans and IRAs (Individual Retirement Accounts) allow you to save money in the stock market through tax deferred contributions. Anyone with a job can contribute money to an IRA. You can only contribute money to a 401(k) or similar retirement plan if one is offered by your place of employment. In many cases employers will offer matching contributions. In other words: FREE MONEY. You should commit to contributing 10% of your salary to these plans as soon as you are eligible to enroll, and you should always be sure to contribute enough to  max out the employer match. Again, it’s FREE MONEY! There is no funding match for IRAs. As of January 2018, the maximum employee contribution for 401(k) and similar plans is $18,500. The max for an IRA is $5,500, but if you’re 50 or older you can add another $1000 to that as a catch-up fund.

 Retirement plans offered by employers include:

  • 401(k) plan – a retirement savings plan sponsored by an employer. It lets workers save and invest a piece of their paycheck before taxes are taken out. Taxes aren’t paid until the money is withdrawn from the account.
  • 403(b) plan – also known as a tax-sheltered annuity (TSA) plan, is a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations, and certain ministers. The basic difference is that a 403b is used by nonprofit companies, religious groups, school districts, and governmental organizations. The law allows these organizations to be exempt from certain administrative processes that apply to 401k plans. In other words, administrative costs for a 403b are lower.
  • 457 plan –  a kind of defined contribution retirement plan available to state and local public employees, but can also be offered by certain nonprofit organizations. They work much the same way as 401(k) plans.
  • TSP Plan – Federal employees and members of the uniformed services participate in the Thrift Savings Plan (TSP), a retirement savings plan similar to 401(k) plans offered to private sector employees

Both IRAs and 401(k) plans may be available as ROTHs. Roth IRAs and now the new Roth 401(k)s are named for Delaware Senator William Roth and were established by the Taxpayer Relief Act of 1997. There is no pre-tax savings on these, they are funded by after- taxed income, but they grow tax free.  

IRAs give you the largest number of personal investment choices, they are quite similar to a brokerage fund. 401(k)s tend to limit your investment choices to up to as many as twenty different funds, which may be passive index funds, or actively managed funds which will have periodic fund maintenance fees associated with them which will eat away at your returns.   

EXAMPLE: My company TSP Plan offers 6 funds:

G Fund: Government Securities Investment Fund (no risk bonds)

F Fund: Fixed Income Index Investment Fund – is invested in a separate account that is managed to track the Bloomberg Barclays U.S. Aggregate Bond Index

C Fund: Common Stock Index Investment Fund – tracks the Standard &Poor’s 500 (S&P 500) Stock Index

S Fund: Small Cap Stock Index Investment Fund – a stock index fund that tracks the Dow Jones U.S. Completion Total Stock Market (TSM) Index.

I Fund: International Stock Index Investment Fund – a stock index fund that tracks the MSCI EAFE (Europe, Australasia, Far East) Index.

L Fund: Lifestyle Fund – diversifies participant accounts among the G, F, C, S, and I Funds using professionally determined investment mixes (allocations)that are tailored to different time horizons. The L Funds are rebalanced to their target allocations each business day. The investment mix of each fund adjusts quarterly to more conservative investments as the fund’s time horizon shortens.

The Bottom Line

I have been paying into Social Security since I got my first paycheck at my first job. It’s mandatory. You can’t opt out. I have been actively and intentionally contributing to my company TSP plan since I became eligible. It’s MY option to do so. No one is forcing me to do this. I can check the balances of both programs online. Needless to say, the mandatory government SSA plan which I am forced to pay into has far less in it than my personal TSP plan which I have been overseeing myself.  You will come out far ahead of the rest when you take a hands on approach to your money, and your retirement. A fool and his money are soon parted. Do you want to be wise, or is it your intention to be a fool? It’s your life, it’s your money, it’s your choice. As always I wish you  happiness and success!

You Can’t Time The Market!

The ‘right time’ to invest was yesterday.

The Dow Jones Industrial Average (DJIA) often simply called ‘The Dow’ was founded on May 26, 1896. It was created by Wall Street Journal editor Charles Dow, and is named after both Dow and statistician Edward Jones.  It is one of popular financial guides used to track how well investment stock markets are doing.  Other popular indices used by business and finical watchers include:

  • The Standard & Poor’s 500 – often abbreviated as the S&P 500, or just the S&P was introduced in 1923, but fully realized in its current form on March 4th 1957.   
  • Nasdaq Composite  – created on February 8, 1971 by the National Association of Securities Dealers (NASD)
  • CBOE Volatility Index or VIX –   a  measurement of  expected  volatility implied by S&P 500 index options, created by the Chicago Board Options Exchange on January 19, 1993. This last one is sometimes referred to as ‘the fear index’, and moves inversely to the S&P. You want this one to plunge.

I will be limiting the scope of this blog post to the American stock markets and  economy.  I have very little experience with foreign stocks and markets. One important thing to note, the stock market is driven by investment expectations and is an ’emotional’ response to the economy. It is not the same thing as the economy, but it can impact it. There are many factors that impact the market that can include everything from oil prices to politics to weather.  Ultimately, shrewd investors study multiple factors before committing their stock trades as past performance is  never an indication of future earnings. No one can know the future, but we can study the past and make an educated guess.

“The sad fact is that people are poor because they have not yet decided to be rich.” —Brian Tracy

The Time is NOW!

Quite often  a few misguided friends and co-workers tell me that they are waiting for the right time to invest in the market.  Fear of a correction or a crash keep them from potential earnings. Poor spending habits hamper their ability to invest. Ignorance and the refusal to seek wise counsel on fiscal issues keep them in poverty. You cannot spend your way into prosperity, the only sure-fire way to get rich is by making diverse, informed investments over a long period of time. You can’t achieve this if you spend every penny  you make on food, ‘toys’, and entertainment.   You need to first get your financial house in order because the money you use to invest must be disposable income not earmarked for essential monthly expenses. Refer to my many earlier blog posts on finances, planning,  and budgeting.   

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“Whenever I hear people talk pessimistically about this country, I think they’re out of their mind.” — Warren Buffett, Berkshire Hathaway chairman

But a crash is coming!

Maybe. Maybe not.  And, so what? There have been 14 crashes in the history of the Dow. The market has ALWAYS rebounded usually within a matter of months. The longest recovery period was from  the Great Crash on October 24th 1929 which lasted four years and then led to the Great Depression.

Three examples of why uninformed and/or misinformed investing is dangerous:

 #1 On November 8th 2016, Donald J. Trump became the 45th president of the United States. (Full disclosure,  I’m a Christian first, and a lifelong Republican second. I FULLY support the current President. I voted for him in both the primary and general election, and will vote for him again when he runs for his second term in 2020. I’ve lost friends because of this fact, but I stand my ground.)

When Trump won the election, there were a lot of newscasters , Democrats, and entertainers who said the country was DOOMED! I had a discussion with a very upset friend at work who thought that this was the end of the world. On Nov 07, 2016, the day before the election, the Dow closed at 17,994.64. I was hoping and praying that Trump won, because I fully believed that a Clinton win would be the death of the U.S.  and a disaster for its economy. Being precautious, I moved all of my investments out of the market, just in case the unthinkable happened and ‘That Woman’ won. (I had done the same thing in the 2008 election, more on that later.)  Fortunately the best man won.

The Dow shot up nearly a 1000 points over the next week, a gain which I missed out on because I couldn’t move my investments back fast enough.  It kept going up. About two or three weeks after the election, I told the same co-worker that I had read several financial analysts who predicted the Dow would hit 30,000 by the end of Trump’s first term, and 50,000 by the end of his second term should he win again in 2020. I EVEN showed him the articles stating this. He didn’t believe it, not a word, and dismissed it as propaganda.  As of Friday January 5th 2018 the Dow closed at 25,295.87!

#2 There’s an old Investment adage – Sell in May and go away, but remember to come back in September! It’s meant to avoid seasonal declines in the market, and I’ve used it more often than not. Sometimes I’ve benefited, other times I missed out on an unexpected spike in the markets during the Summer.  You can’t time the market, but you can attempt to lock in gains and minimize losses. You see market sell-offs all the time. These are mini corrections and just people trying to time the market because they think it may go down, then they plan to jump back in and capture the dip. In May of 2008, the Dow ran between 12,818.34 and 12,638.22, so it was pretty flat that month. I don’t remember the exact date I got out of the market that May, but It was probably near the end of the month. In either case it was a presidential election year, and I was not 100% thrilled with John McCain, but I absolutely HATED the other option and I’d sooner vote for Satan than a Democrat. (Unfortunately my guy didn’t win that year.)  The Dow closed at 9,625.28 On November 4th 2008. It plunged 500 points two days later and kept dropping. Fortunately as I knew that presidential election years are very unpredictable, I chose to stay out in May and remained out as I kept watching the market drop, and drop, and drop! It hit a low on Mar 05, 2009 of 6,544.10 before it started its long climb back. During this time I was still buying new shares of stock in my 401k, and even increased my paycheck deductions to 20% to capture these incredible bargains, all the while, my original balance total from May 2008 was locked away safely earning interest in a no-risk bond fund. When it got to May 2009, I uncharacteristically moved my nest egg back into the market and rode that elevator to the top! A co-worker wasn’t so lucky. He stayed in during the plunge, got out at the bottom and stayed out missing the rebound because of fear.

 #3 I was speaking about the market with a friend on December 16, 2017. He had his investments in a no risk fund, because he was fearing a crash, and was waiting for the ‘right time’ to re-enter the market. My investments were all in the high risk C Fund, or Stock fund. They still are, and probably will be for the foreseeable future. Anyhow, I told him there wasn’t anything to worry about and that the market would keep going up. December 15th 2017, the Dow closed at 24,651.74. Three weeks later on Jan 5th 2018 it closed at 25,295.87, up over 600 points.

Can any one of you by worrying add a single hour to your life?  Matthew 6:27 NIV

Let me tell you, I’ve been broke and deep and debt, and I’ve been debt-free and financially sound. Rich is better than broke. I’ve been investing for my retirement since I started working. If you keeping putting off investing in your 401k and building your savings because you’re afraid, you’ll always be broke. The USA has endured many disasters and tragedies which have impacted the stock market since its inception, yet it always rebounds and yields an average return on investments of above 10.5% over the long term. The fact is, if you let your life be ruled by fear and doubt, you will second guess everything, become skeptical with anything and succeed at nothing except making yourself miserable and poor. The decision is up to you, choose well. As always I wish you happiness and success!

A new year, a new you!

Make the most of the coming year.

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As we count down the final hours of 2017 on this last day and final blog post of the year, let’s pause a moment and take stock of the past twelve months.  It may not have been a perfect year  for most of us, but when we reflect back, in most cases we’d have to agree that there were far more good times than bad.  There will always be a small percentage of people we know who had a rough year. These people constantly exclaim ‘I can’t wait for this year to be over’.   For me, the only real part that I dislike and am ready for to end is always winter. I’m not a fan of the snow  and ice. I dislike the short days of early darkness and sub-freezing temperatures.  In North America, winter spans the end of the old year, and the beginning of the new.  Seasons change, and winter exists in part to make us appreciate spring, summer and autumn all the more.   

Raindrops keep falling on my head!

We have no control over the weather, just how we prepare for it. We carry an umbrella in case it rains. We have a coat or jacket in case it gets cold. Only a foolish person curses the weather because they chose not to plan accordingly. We don’t always have to like circumstances beyond our control, but realistically we know that the situation will change in time, and with proper planning and precautions, we can weather the storm. Make it your goal to accept the things you have no control over, and make positive changes over the things that you can control.

Zip-a-dee-doo-dah, zip-a-dee-ay!  My, oh my, what a wonderful day!

Every day each and every one of us gets 86,400 seconds to spend however we choose, with just two exceptions. The day we’re born and the day we die. Excluding those, our days are all the same length, yet some people never seem to get anything done, while others accomplish an incredible amount.  The difference was the result of the choices made, and the attitude behind them.  Planning your day out ‘saves time’.  Procrastinating wastes it. Being miserable makes the day drag, but time flies when you’re having fun.  Did you dwell on the past instead of planning for the future? Keep a positive attitude and try to find one good thing to be thankful for each day. Then focus on that. A positive attitude will attract like-minded people and soon you’ll be surrounded by a positive support group to help keep you encouraged. Remember, no one likes a sad sack.

Time is on my side, yes it is.  

Plan ahead, and plan early. Don’t put off for tomorrow what can be done today! Prior proper planning prevents poor performance .  Manage your time, manage your expenses. Make positive changes in every aspect of your life, and multi-task when you have complimentary goals.     

The great thing about New Year’s is that it’s a reminder that we can start over. If you didn’t like the way this past year went, you can look back on what went wrong, and make changes to fix the problems. You can make New Year’s Resolutions for every item under the sun. The key though, is that you must complete the goal to achieve the result. If you change nothing, nothing will change. You can do it if you stay motivated. One key way to achieve this is by seeing positive change over a period of time.  If you have a fitness goal, such as losing weight, break it down into smaller, easily achievable goals.  Instead of focusing on the sixty pounds you want to lose this year, focus on the five pounds you need to lose in each of the twelve months and be consistent. Track your progress so that you can see how far you’ve come. And if you reach the goal early, go the extra mile and get ahead of the game. This way if you hit a plateau, or a stumbling block, you’ve got breathing room to regroup and recover from the setback. The same thing applies to financial goals. Slow and steady wins the race.  Baby steps forward are still progress.

I faced it all and I stood tall And did it my way!

The Man in the Mirror is a book written by Patrick Morley in 1989. I recommend reading it, as well as exploring any self-help books pertaining to the area of your life that you wish to change.  In  The Man in the Mirror , the author attempts to  teach us to solve 24 problems every man faces in life. Although geared for men, this book applies to everyone. The title is the clue to the cause of the problems, and the solution is to live our lives in a more godly manner.  How many of the problems we face in our lives are a direct result of our stubbornness to do  it ‘our way’ instead of the right way? How many times do we repeat the same mistakes and expect different results? An honest person is forced to admit that the larger portion of our misfortunes are self-made.   Blaming the year and wishing it were over is a very childish way to deal with one’s problems. After all, if you don’t effect positive changes in your life, most likely next year will be a repeat of this year,  or maybe be even worse.  The choice is up to you!  Are you ready for more of the same, or a fantastic new beginning?  You decide.  As always I wish you happiness and success!

Secret Santa

A man’s gift maketh room for him, and bringeth him before great men. –– Proverbs 18:16 KJV

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As I’m sitting here in the wee small hours of the morning of Christmas Eve 2017 working on my last Christmas-themed financial blog post of 2017, the main thought that is going through my mind is, ” I LOVE CHRISTMAS!”  It is impossible ignore the fact that whatever your personal religious beliefs are, Christmas begins with CHRIST, Jesus is the reason for the season, and Christians like myself become ‘a little more vocal’ about what we believe. Christmas is a very good thing for both the believer and the non-believer alike.  It truly is the most wonderful time of the year! So if you don’t believe in Christ, please don’t take offense at a person extending you a heartfelt ‘Merry Christmas’ at this time of year. It’s not a religious threat or insult, it’s a olive branch or a bridge to show that we are all connected. Take it in the spirit of goodwill in which it’s meant.

Talking about ‘spirits’ and giving brings to mind two secular and fictional aspects of Christmas: Ebeneezer Scrooge and Santa Claus.  

I have shown you in every way, by laboring like this, that you must support the weak. And remember the words of the Lord Jesus, that He said, ‘It is more blessed to give than to receive.’ — Acts 20:35 The Holy Bible, New King James Version

There are people in this world today who claim that being wealthy is a sign of greed, and that somehow the rich people of the world are responsible for causing the poverty in it. This is far from the truth. Wealthy people pay the majority of all taxes collected, and donate the largest sums to charities. They build the factories, fund the businesses, and create the jobs.   

The protagonist of A Christmas Carol written by Charles Dickens is a miser named Ebeneezer Scrooge. Some people get the idea that he’s the villain of the tale because all he cares about is money. Scrooge isn’t the bad guy because he has money, but because he lives a joyless existence, he mistreats his employees,  and he’s horded his wealth instead of using it to bless the needy and do acts of great good. After he’s visited by the Christmas spirits, he sees the error of his ways, and is transformed by the renewing of his heart and mind. He then does great acts of charity that would not have been possible had he been poor. There are some acts of generosity that only  a wealthy person has the ability to do. Anyone can smile, say a kind word, do good deeds, or pray for other people. These things are good, and we should always do them. Most people can even afford to donate money to the less fortunate, even if it’s only coins in the Salvation Army Kettle at Christmastime.

Only the rich can give charities million-dollar endowments or build factories to create jobs.

 His master said to him, ‘Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master.’— Matthew 25:23, New English Translation

 Santa Claus is a bit more tricky. His origins have been mixed with fable thanks to L. Frank Baum and Clement C. Moore. Elves and reindeer aside, ‘Father Christmas’ is based on a real person, Saint Nicolas of Myra was a Christian bishop who helped the needy. He was born circa 280 AD and died December 6th 345 AD. In the twentieth century, Santa Claus stated to supplant Christ as the focus of Christmas, basically because he was a fun way to make the season more ‘inclusive’. Some people who were not religious felt left out. So advertising departments of companies like Coca-cola and Macy’s ran with Santa as a jolly alternative, and a new representative of Christmas goodwill.  This is both good and bad. Bad because Santa distracts us from ‘the real reason for the season’ and can be confusing for young children. Good because Santa is FUN, and inspires giving.      

As a Christian, I KNOW that ALL things come from God, and everything I have ultimately came from The Lord of All Creation. Christians especially have a duty to use their God-given gifts in the service of God, and Christmas gives us many great opportunities to help the less fortunate. I find myself a little merrier wearing a red Santa hat, it inspires me!

I’m going to wrap this up with the inspiring true story of Larry Stewart, the Secret Santa.  

 Kind words and kind actions can change lives!

Larry Stewart (April 1, 1948 – January 12, 2007) was an American philanthropist from Kansas City better known as “Kansas City’s Secret Santa.” After poor beginnings, Stewart — from 1979 through 2006 — made a practice of anonymously handing out small amounts of cash, typically in the form of hundred-dollar bills, to needy people.

Larry was a traveling salesman in 1970, and he wasn’t very good because by 1971 he was broke and sleeping in his car. After a few days of not eating, in desperation he decided to ‘rob’ a diner by ordering a big breakfast he couldn’t pay for, and then claiming he accidentally lost his wallet somehow.  Ted Horn owner of the Dixie Diner realized the true nature of the situation, and instead of getting mad, or calling the cops, decided to give Larry a $20 bill he ‘found’ on the floor, which ‘might’ have fallen out of Larry’s ‘lost’ wallet. This lesson of kindness and generosity stayed with Larry Stewart. Ashamed of his initial act of deception, and humbled by the kindness of the diner owner, he vowed to himself that he would  ‘pay it forward’ as soon as he was able.

Around Christmas of 1979 on a very cold day, he stopped at a drive-in restaurant. A carhop waitress was outside wearing a small, thin coat, and freezing as she served the diners at their cars in the hope of maybe nickel or dime tips. When she brought Larry his lunch, he handed her a $20 bill, and told her to keep the change. Her lips begin to tremble and tears begin to flow down her cheeks as she said, ‘Sir, you have no idea what this means to me.’

Stewart went on to become a multimillionaire, earning his fortune from cable television and long distance calling. Each Christmas from 1979 until his death in 2007 he continued giving cash away to the needy as Secret Santa.  He quickly progressed from giving out $20s to handing out $100s, not just in Kansas City but traveling to other areas in times of tragedy, like NYC after 9/11/01 and Mississippi in 2005 after Hurricane Katrina.  Sadly, he developed cancer, but because he was concerned about the poor and needy, he trained an army of Secret Santas and assistant ‘elves’ who would pass out $100s to the needy after he was gone. By the time he passed away on January 12th 2007, Larry Stewart had given away over a million dollars, all inspired by the kindness of ONE man who gave him a $20 bill decades earlier. Today, the army of Secret Santas continue to hand $100 bills to poor, their efforts supported by other wealthy philanthropists, and inspiring others to do likewise.

So as we open our gifts on Christmas morning, and give presents to our friends and family, let us all be inspired by all the beauty and wonder of all the aspects and icons of the season. Let us not focus on ourselves, but think of our fellow man, and be grateful for all that we have. May we all find the courage to better ourselves, so that we can extend a hand-up to the fallen, and together we can with a smile, encouragement, charity and kindness, make this a better world. As always I wish you happiness and success!  Merry Christmas and God bless us, everyone.