A Juicy Enough Life with Money in Real Life
Most of us aren't in the wealthiest 1% demographic. We have complicated lives, need steady incomes, and face money anxiety. But we can still live a luxe, fabulous life on less. Here we share the tips, hacks, and resources for financial freedom through slow FIRE*: squeezing the most satisfaction out of every dollar spent. *FIRE - Financial. Independence. Retire. Early
Saturday, February 4, 2023
IBonds - Now Paying 6.89% until May 1st, 2023
Monday, November 14, 2022
How To Evaluate Stocks: Financial Expert Investing ABCs
A client asked me to recommend the best books for learning to pick stocks. It's a common question, and I wasn't aware of any one-size-fits-all answer.
So I went to the experts during the Money Moves Conference. It is a new effort by Tulane University professors, public radio stations and local financial institutions to bring money basics to south Louisiana community members.
The speakers included world-class financial experts who boiled down tough topics to the basics.
Mara Baumgarten Force presented "The ABCs of Successful Money Management." She is a Professor of Practice, Associate Faculty Director, Master of Finance Program, A.B. Freeman School of Business, Tulane University. Mara teaches financial management, analysis, and investment courses at the undergraduate and graduate levels.
Her experience includes managing 150+ trust professionals at JPMorgan serving 13,000 clients with more than $13 billion under management, so she should know about stock picking resources!
During the Q&A, she responded to the stock-picking resource question with surprisingly simple responses.
A screenshot of her "recommended resources" slide is here. The list includes investopedia.com, yahoo.finance.com, TD Ameritrade's YouTube channel, Bloomberg.com and The Fundamentals of Corporate Finance, 10th Edition, by Brealey, Myers & Barcus.Mara added these nuggets during the discussion:
- Anything that Warren Buffet has written or said, i.e.,
- "Being greedy when people are scared and being scared when people are greedy."
- "Buy stocks in companies you know."
- A Random Walk Down Wall Street (book)
- The Intelligent Investor (book, old style of writing, but classic and good information).
- Investor.gov
Reducing Risks with Research
Macro Level Basics:
- what does the company make?
- do people like buying it?
- is there any other company that makes something similar?
- can they grow their business so that having an ownership interest in this company is worth more?
- Spread your risk (Mutual funds and ETFs do that for the basic investor)
- Keep your expectations realistic (stocks go down in value as well as up, lightening can strike in a bad way)
- Do your research (low cost and free options are available)
- Buy what you know and like
- Warren Buffet is successful. Invest like Warren.
Friday, November 4, 2022
Treasury Bond and CD Buying - FAQs and Book Recommendations
Interest Rates are Up Again - Time to Lock in Gains!
Once again, the Federal Reserve is upping the interest rate by .75 basis points.* It's a golden time for those wanting secure investments that pay a pretty interest rate and the rates may go even higher according to Fed Reserve Chairman Jerome Powell.
Here is what US Treasuries and CDs are paying at Fidelity.com today, 11/4/2022 at 8:23 a.m up to 5 year maturity. Not only can you purchase these with money in your after-tax brokerage account there, but you can also purchase via your IRAs or 401K.
Real-Life Case Example:
I have an extra $10K that is coming to maturity in my CD ladder. (I bought it as a short-term, 6 month CD of $9,000 back in May of 2022. It has only been accruing .95% interest at the time. Less than 1%).
Now is my chance to lock in a longer, better, very secure rate with a CD or a bond. You can do the same!
CDs offered on this platform at the 2-year mark are paying higher rates than Treasuries. They are also very safe, as they are F.D.I.C. insured. I'm planning to pick up a 5% CD next week for the 2-year short term. It's only a $ 500-a-year return, but I'll take it! If I had more cash to invest, I would.
CD ladders have really helped my F.O.M.O. with current CD and bond rates. I have new money freeing up for investment every few months. Keep in mind this money has only been earning .05 - 1.5% for a while, so it needs a boost!
Are you planning to buy a CD or bond soon and have questions?
Google searches about bond buying today that are most common include these:
- Buying bonds at a discount
- Buying bonds on a premium
- Treasury Direct
Here are a few highlights from the book:
Buying bonds (or bills) at a discount
The author, plus info from this Investopedia page about T-bills, gives simple straightforward advice on buying bonds at a discount. Let's use this Treasury bills purchase as an example:
- Let's say you purchase ten Treasury bills for $100 each. They mature in 52 weeks. The T-bill sales info declares a 5% coupon rate or yield to maturity (YTM) rate. Because the bills are sold at a discount, you only pay $950 for all of them. At the end of the 52 weeks, you will receive $1,000 back.
- Your yield is the difference between the T-bill's discounted purchase price and the face value due back to you on the maturity date.
- Test your knowledge -- what if the YTM was only 3%? Did you come up with $970 as your discount rate? It would cost you $970 to buy the bills that would return $1000 52 weeks later
Buying bonds at a premium
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