Personal Investing Advice

What Would You Do If You Were a Millionaire?

I remember when I was going to school as a youngster and taking part in a class exercise that was supposed to help determine what kind of career path I was headed on. At the front of the class, the teacher wrote a question on the board that said, “What would you do if you were a millionaire?” Your answer had to be an occupation or a passion that showed what you truly wanted to do.

I was reminded of this assignment when I was reading the sports section of my newspaper the other day and came across an article about a young professional basketball player named TJ Ford. At 24 years old, Ford has already suffered two career-threatening injuries to his back and neck and has been forced to contemplate retirement to avoid further, perhaps severe, injury.

Prior to this, Ford signed himself a lucrative five-year contract with the NBA’s Toronto Raptors, with $30 million in guaranteed salary. Not a bad retirement package by any means.

Knowing that he could walk away from his job and enjoy a long life of luxury, Ford decided to work as hard as he could to come back and play for his team. It wasn’t the money that motivated him; it was his love of the game. He loves his job so much he would put his health at serious risk to do it. Now, after over two months of recovery, Ford is back on the court, likely doing what he would have answered in my teacher’s assignment.

We can all learn a valuable lesson from Ford, and that is to do what we love. After all, what is the point of being rich if it’s making you miserable in the process?

Sure, having money is nice, but it isn’t what life is all about. Life is about living and doing what makes you feel good day in and day out. If you’re in a job you hate, develop a plan to leave. Start saving your money so that, when the time comes, you can quit your job and start the business you’ve always wanted. Even if times are tough financially in the beginning, you’ll hardly notice because of the happiness you derive from your new life.

As for my answer to the assignment, it was to “build places for people to live.” Well, it came partly true. Although I never physically constructed homes, I developed my own publicly traded real estate company!

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Review: Jim Cramer’s Getting Back to Even

Buy it now $26.00 $15.12

In his new book, Cramer offers the most detailed guidance he has ever given on how to invest in a changed market. Savvy investors will not just survive; they will thrive. Cramer begins with six rules for protecting the money you have and making sure that you have the money you need. (Rule Number 3: Skip the first four stages of portfolio grief: denial, anger, bargaining, and depression.) Your portfolio won’t fix itself; you have to do that. It’s easy to close your eyes and pretend that it all never happened, but you’ll never get back to even that way, much less profit from the opportunities that this new market offers to investors who know where to put their money. One key to making investment decisions is to watch what the mutual-fund managers are doing and — better yet — to anticipate their moves. Cramer tells you how to do this. Their decisions will move markets, and you want to profit from these moves.

Cramer explains why dividends may be another key to picking winners in the post-crash stock market, and he introduces a category he calls the accidental high yielders — stocks whose prices have taken a beating, boosting their yields. Some of these stocks could make a major move upward; Cramer tells you how to spot the ones that could take off.

For the first time in any of his books, Cramer offers a portfolio of twelve stocks that he says are poised to profit from the economic recovery. And he gives investors a list of five regional banks that could make big moves and return a handsome reward to shareholders. As always, Cramer explains why investors can’t just take his word but have to “buy and homework” on these stocks to make sure that their stories don’t change.

If you’re near or in retirement, your opportunities to recover and profit are more limited than those of younger investors. Cramer tells you why stocks should still be an important part of your investment portfolio. And for younger investors, Cramer explains why you must take advantage of what could be a rare opportunity to buy stocks at fabulous prices and set up a terrific portfolio.

Cramer offers advanced tips for investors who have the time and are willing to invest it to profit from the post-crash stock market. Call options may seem like exotic and dangerous investment tools, but Cramer shows why they can be a conservative investing strategy that can bring quick returns in a recovering market. He explains how to use IPOs and secondary offerings wisely to juice your investment portfolio.

And as if all that weren’t enough, Cramer has come up with twenty-five new rules for the post-crash market. (Rule Number 4: It pays to follow the dumb money.)

Getting Back to Even is indispensable for any investor still reeling in shock from the 2008-2009 market collapse and wondering where to go from here. From investment strategies to specific stock recommendations, it’s the foundation for the portfolios that will soar when the economic recovery takes hold.

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Review: The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition)

Buy it now $21.99 $7.99

More than one million hardcovers sold
Now available for the first time in paperback!

The Classic Text Annotated to Update Graham’s Timeless Wisdom for Today’s Market Conditions

The greatest investment advisor of the twentieth century, Benjamin Graham taught and inspired people worldwide. Graham’s philosophy of “value investing” — which shields investors from substantial error and teaches them to develop long-term strategies — has made The Intelligent Investor the stock market bible ever since its original publication in 1949.

Over the years, market developments have proven the wisdom of Graham’s strategies. While preserving the integrity of Graham’s original text, this revised edition includes updated commentary by noted financial journalist Jason Zweig, whose perspective incorporates the realities of today’s market, draws parallels between Graham’s examples and today’s financial headlines, and gives readers a more thorough understanding of how to apply Graham’s principles.

Vital and indispensable, this HarperBusiness Essentials edition of The Intelligent Investor is the most important book you will ever read on how to reach your financial goals.

Among the library of investment books promising no-fail strategies for riches, Benjamin Graham’s classic, The Intelligent Investor, offers no guarantees or gimmicks but overflows with the wisdom at the core of all good portfolio management.

The hallmark of Graham’s philosophy is not profit maximization but loss minimization. In this respect, The Intelligent Investor is a book for true investors, not speculators or day traders. He provides, “in a form suitable for the laymen, guidance in adoption and execution of an investment policy” (1). This policy is inherently for the longer term and requires a commitment of effort. Where the speculator follows market trends, the investor uses discipline, research, and his analytical ability to make unpopular but sound investments in bargains relative to current asset value. Graham coaches the investor to develop a rational plan for buying stocks and bonds, and he argues that this plan must be a bulwark against emotional behavior that will always be tempting during abrupt bull and bear markets.

Since it was first published in 1949, Graham’s investment guide has sold over a million copies and has been praised by such luminaries as Warren E. Buffet as “the best book on investing ever written.” These accolades are well deserved. In its new form–with commentary on each chapter and extensive footnotes prepared by senior Money editor, Jason Zweig–the classic is now updated in light of changes in investment vehicles and market activities since 1972. What remains is a better book. Graham’s sage advice, analytical guides, and cautionary tales are still valid for the contemporary investor, and Zweig’s commentaries demonstrate the relevance of Graham’s principles in light of 1990s and early twenty-first century market trends. –Patrick O’Kelley

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Why Diversification is So Important For Investing

You must never park all your investments in just one stock and no other stock in the market. An experienced player would always spread out their investments among a mix range of stocks to minimize the risk to their portfolio on a bad day in the stock exchange.

We’re talking here not just about investing in the various stocks but also about investing in the different range of the industries. Like say, if commodities are doing well then oil may be on the downslide or vice versa. You must concentrate on investing in the different sectors of industry so that your portfolio remains unaffected due to occasional big hit taken by a specific sector. Usually it has been seen that people with more diversified portfolio see a much balanced and consistent return on the investments they make than the investors who just make investment in one or two stocks. You can diversify even with penny stocks.

You must remember that you don’t have to limit your investments in your portfolio to just stocks. You can make investments in property, bank CDs, etc also. The entire idea of diversification is to protect your interests while making profits on the investments.

I will tell you my personal experience, as to how important and beneficial it is to diversify. When I first made investment of about 15K in a very popular and growing stock which was climbing year after year in the value. I was satisfied that my investments were safe and would grow upwards. Wrong!! I lost 9K as I watched sadly the value of my stock plummet to new lows due to a corporate fraud in the company. Learned learned? Diversify!! I learned that lesson of a lifetime with a monetary loss but I believe that you won’t have to to diversify your portfolio and minimize risks.

Michael has been writing articles online for 10 years. Check out his latest website Air Conditioner Portable which help people find more about Portable Air Conditioning.

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