PRUDENCE & DIVERSIFICATION: KEYS TO SAFE, PROFITABLE INVESTING

Apartment For Rent Sign

Well, it finally happened.  I had to evict a tenant at one of my duplexes due to their violation of their lease terms.  As a result, I now have a vacant unit in the real estate component of my Pay Me Plan. Because I typically buy my investment properties occupied so I receive cash flow from the moment I take ownership, this is the first time I’ve had a vacancy.  This gives me an opportunity to secure some new, long-term, quality tenants and gauge my property manager’s proficiency at renting a vacant unit.  To be honest, I’m actually pretty excited Continue reading

INVESTING SHOULD BE BORING (IN A GOOD WAY)

Investing is Boring

Sports can be exciting.  Travel can be exciting.  Movies can be exciting.  But your investing should be boring. Why?  Because proper investing mechanics are driven by investing systems that generate predictable outcomes.  And when outcomes become predictable, the excitement is lost.  While investing with a system may be boring, it can also be immensely profitable when applied with regularity. If you want to become an accomplished investor, it behooves you to understand that emotion should NOT be part of your approach.  Making money through investing is an intellectual pursuit, not an emotional pursuit. One of the challenges I occasionally face Continue reading

EVALUATING YOUR RETIREMENT ACCOUNT

Properly Diversify Your Retirement Plan

In 1974, Congress enacted legislation known as ERISA (Employee Retirement Income Security Act).  This ushered in a new era of financial self-reliance for millions of American workers.  With this transition from defined benefit plans (i.e., pensions) to defined contribution plans such as IRAs and 401(k) plans, the United States government conveyed their expectation that employees must now privately manage their financial futures. Moreover, as the sustainability of government-sponsored entitlement programs are called into question, more and more citizens are realizing the importance of taking a proactive approach toward their “golden years”. To be honest, as an independent investor, I’m not Continue reading

WHAT THE HECK… IS A P/E RATIO?

Stock Chart

“What the heck…” is an ongoing series within The Pay Me Plan Blog for Investing Novices where I dissect a financial concept or principle, and explain how it can apply to your investing activities.  In this post, we’ll be covering what a P/E ratio is and how it works. In the P/E ratio, the “P” stands for price and the “E” stands for earnings.  Thus, the P/E ratio means the price to earnings ratio.  This is a metric used when evaluating the price of a public company’s stock in relation to how much net income the company is actually generating.  Continue reading

LIKE SHOPPING? THEN YOU’LL LOVE INVESTING

Crowds storm a shopping mall on Black Friday

The day after Thanksgiving – known as “Black Friday” – is the busiest shopping day of the year.  News channels will often broadcast clips of people camping outside their favorite store days in advance.  And once the stores open, the crowds are absolutely maddening.  Fights occasionally break out between shoppers.  There was even a news headline a few years ago about an employee accidently being trampled to death as they tried to open the doors so customers could get inside.  Unbelievable. So what drives this kind of irrational consumer behavior?  Is it drugs?  Well, if you’ve been reduced to camping Continue reading