investors | Bigg Success

Tag Archive: investors

Savers Spenders and Investors

Written on February 23, 2009 by George Krueger & Mary-Lynn Foster in Money

investments When personal finances are discussed, the experts usually divide people into savers and spenders. We ran across a press release from Fidelity, the mutual fund giant, about a survey of workers in the non-profit world. They asked the participants if they were a saver, a spender or an investor.

___

Hear George & Mary-Lynn discuss today's topic on The Bigg Success Show! Click the purple player: Play Now | Play in Popup | Download

___

We thought it was very astute to add that third category. Which one do you fit in?

The workers in the study split themselves about evenly between saving and spending. 46 percent claimed to be savers while 45 percent admitted to being spenders. So that leaves only 9 percent who classified themselves as investors.

Merging the two categories

We suspect that fewer people today would classify themselves as spenders than say a year ago. A lot of us are getting on the savings bandwagon. That’s definitely a step in the right direction, but saving it isn’t good enough.

This data suggests a bigg idea. We shouldn’t think of ourselves as either savers or spenders. We should always think like an investor. We should merge the two categories – spender and saver – into the third category – investor.

We must know how to invest it or we won’t end up with the resources we need to live the life we want.

From spender to investor

Here’s some good news for spenders: thinking like an investor doesn’t necessarily imply that you don’t spend. It means that you spend differently.

You look at every single dollar you spend as an investment. Is it going to bring you enough return to make it worth giving it up? And that “return” may not come in dollars earned on dollars invested.

It may mean that it adds enough to your level of “happiness” to make spending the money worth doing. If it passes that test, then spend, spend, spend! If not, hold onto it.

For example, you may see a real deal on some non-perishable consumer good. Buy it. Stock up. Say an item is on sale for half off. Let’s pretend that you know that it only goes on sale once a year. If you buy a year’s supply, you’re making 100% on your money. That’s hard to beat!

So get to know the promotional cycle of the brands you use regularly and time your investment appropriately. Know when various businesses need the money more. For example, from car dealers to contractors, there are seasons when people are buying a lot and times when people aren’t. Time your purchase for their slow periods and reap the benefits.

From saver to investor

Now let’s think about savers. It’s great to save, but if you’re only earning two percent on your money, where’s that getting you?

We know … we know … you’d rather earn 2% than lose 40%! We completely understand that thought process.

However, investors don’t operate out of fear. They operate rationally. And we have to resist the temptation to go with the masses because they’re usually wrong in the long run.

Just like with consumer goods, there are some real deals out there on assets right now if you can afford to hold them long-term.

The best time to get out of a particular market is often when everyone else is getting in. And the best time to get in is usually when everyone else is getting out.

Years ago, we were told by a very successful real estate investor that when you see the no-money down real estate infomercials proliferating, it’s time to get out of real estate. How many of those do we see now compared to three years ago?

Now think about stocks. Many of the same people who are touting doom and gloom now were spouting off about the end of the business cycle and the ever-upward spiral of stocks just a couple of years ago.

So to think like an investor, think for yourself.

___

Get the tips and tools you need to be a BIGG success. Subscribe to the Bigg Success Weekly – it’s FREE!

___

Thanks so much for spending some time with us today. Join us next time when we ask, “Does haste still make waste?” Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes.

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00336-022309.mp3

When It Comes to Investing, Time is on Your Side

Squirrels, Nuts and Business Cycles

(Image in today's post by woodsy)

0 Comments

Smart Investors, Tough Times

Written on September 29, 2008 by George Krueger & Mary-Lynn Foster in Money

investing People who find joy in bad news have to be pretty happy lately. The financial crisis has dominated the news, as we watch Wall Street and Washington scramble.

___

Hear George & Mary-Lynn talk about today's post on The Bigg Success Show! Click the purple player: Play Now | Play in Popup | Download

___

We don’t usually do this – in fact, we’ve never done it in the 230 shows we’ve done so far. But this subject is so important and so timely. So we want to share some valuable information that our newsletter subscribers received in their In boxes last Friday.

In the last edition of The Bigg Success Weekly, we discussed “Profiting from Panic”. It was about maintaining the proper mindset in the midst of all this turmoil.

We started with the safety net that exists for depositors, investors, and insureds. Here are some links directly to pages that can answer your questions about banks, brokers, and insurers in a hurry.

Banks

In general, banks are insured by the Federal Deposit Insurance Corporation (FDIC). However, not all money invested through banks is insured. What would happen if your bank failed? If you have accounts with a failed bank, what should you do? How can you obtain a release of lien, if a failed institution is your lienholder? The following links provide the answers to all of these questions:

What is the FDIC

A Guide to What Is and Is Not Protected by FDIC Insurance

FDIC Bank Find (make sure your institution is FDIC insured)

When a Bank Fails- Facts for Depositors, Creditors, and Borrowers

Is My Account Fully Insured?

Obtaining a Lien Release

Brokers

Accounts with brokerage firms also offer some protection through the Securities Investor Protection Corporation (SIPC). The coverage isn't anything like that offered by the FDIC, but it's still important to know what remedies might be available to you.

How SIPC Protects You

Insurers

While banks and brokers have federal backing, insurance companies have backing through associations at the state level.

The National Conference of Insurance Guaranty Funds

If your insurance company fails, you'll want to contact your state's Department of Insurance, since insurance companies are overseen by that department in each state in which they operate. Click here for a directory of each state's office.

Your State's Department of Insurance or Guaranty Association

Two billionaires, two eras, one mindset

Warren Buffett, the richest man in the world according to Forbes, recently invested $5 billion in Goldman Sachs, in the midst of all this turmoil. That’s pretty typical of how he’s made his fortune – he says he’s “fearful when others are greedy and greedy when others are fearful.”

He has also opined, “We want to do business in [a pessimistic] environment, not because we like pessimism but because we like the prices it produces.”

From: The Warren Buffett Way: Investment Strategies of the World’s Greatest Investor, by Robert Hagstrom, Jr.

Warren Buffett is not alone.

J. Paul Getty was one of the first billionaires and the richest man in the world in his day, according to The Guinness Book of World Records. He said, “I began buying stocks at the depths of the [Great] Depression. Prices were at their lowest, and there weren’t many stock buyers around. Most people with money to invest were unable to see the forest of potential profit for the multitudinous trees of their largely baseless fears.”

He went on to say that he made over 100 times his investment on many of these stocks!

From: How To Be Rich, by J. Paul Getty.

Our best strategy

So we can learn from these two men that we shouldn’t panic, even in turbulent times. Now, you may not want to rush out and buy a bunch of stocks. However, you probably shouldn’t sell out right now either.

These two billionaires made a fortune by going against grain. So keep making those 401(k) contributions. By investing consistently over time – paycheck by paycheck – you’re dollar-cost averaging into the market. In bad times, you’ll buy more shares with the same money than you can in good times – just like the billionaires.

Above all – diversify, diversify, diversify. Diversification is one of the four key investment principles, according to William Sharpe, a Nobel Prize winning financial economist. Our newsletter subscribers read about these as well as some ideas to simply put them into practice.

Today, more than ever, it’s important for you to take on the role of Chief Investment Officer for you and your family. You can’t count on Wall Street or Washington to do it for you!

___