Tag Archives: Investing Basics

Entry level investing topics.

DEVELOPING GOOD FINANCIAL HABITS

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Piggy Bank

We demonstrate habits in nearly every area of our lives.  We brush our teeth with the same hand every morning, we drive the same route to the grocery store, and we practice the same general mannerisms when interacting with others.  Habits, both the good ones and the bad ones, are a function of our subconscious minds, and they literally run the majority of what we do – even how we handle our finances and our investing activities. Habits are a fascinating human construct.  You weren’t born with any habits, but you’ve managed to acquire them over the course of your Continue reading →

EVALUATING YOUR RETIREMENT ACCOUNT

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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?

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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 →

3 COMMON INVESTING QUESTIONS ANSWERED

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QuestionsAnswered

If I had to select the top three questions that I’m asked most often by new members and coaching clients, the questions would undoubtedly be the following: 1)  WHAT SHOULD I INVEST IN? There are two primary factors that determine what you should be investing in:  1) Your personal investment criteria and 2) The current investing and economic landscape. Both are independent variables, but both should be taken into consideration. Starting with your personal investment criteria, this includes things like your current level of disposable income, your level of risk tolerance, and your long-term financial objectives.  For example, if you’re 50+ Continue reading →

CONSUMER DEBT & INVESTMENT DEBT

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Credit cards are one of the most common forms of consumer debt

We’ve been conditioned to think that debt is bad – and in many cases, it is. Whether you blame peer pressure or clever marketing campaigns, I think we can all agree that the pursuit of status symbols and instant gratification has come to define our modern culture.  When we want something, we want it NOW.  And we don’t just want it, we NEED it. Something about the phrase “low monthly payments” has a tendency to overwhelm logic and reason.   Our rational, objective side gets trampled by emotion as we thumb passed the cash in our wallet in search of plastic.  Continue reading →

THE PROBLEMS WITH YOUR JOB

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Frustrated Employee

I can feel you rolling your eyes right now. As if you really need me pointing out everything that’s wrong with your job, huh?  I’m sure you’re more than capable of figuring out this one on your own. Well, there are a lot of problems with the whole job concept in general: workplace politics, discrimination, sitting in traffic, high taxes, favoritism, lack of control, big egos… I could keep going. Well, I’m of the opinion that the biggest travesty associated with jobs is that they commit the cardinal sin of directly linking time with earnings.  With a job, you’re trading hours Continue reading →