Did you watch the MythBusters TV series?

3 Myths About Stock Market Investing; Busted!

Did you watch the MythBusters TV series?

If you don’t know what I’m talking about, MythBusters is an Australian TV series where two guys do “weird” experiments busting myths. It’s astonishing to see how people genuinely believe in some of these myths, only to find out, they aren’t true.

We are biased from our society, culture, parents or friends to believe that stock market is risky, a kind of casino and only for rich people. The problem with market stock’s myths is that they are holding you back to access a wonderful wealth creation vehicle.

The stock market is a proven way to prosperity which is doing the heavy lifting for you. In fact, any wealthy person that I personally know, have money in the market stock. And the reason is simple; wealthy people are SMART with their money.

They know that investing in the stock market offer better returns than living money sitting in saving accounts, CDs or by holding bonds.

Now that I think about it, I’m guilty of procrastinating to invest in the market stock for years. I could have started in 2000 when I first get a paycheck, but I procrastinated till 2005. The result?

Hundreds of thousands of dollar in lost opportunities. My only regret is not have busted the market stock myths earlier.

That’s why in today post I’m going to bust the 3 biggest myths about stock market so you can start investing with confidence and peace of mind.

1# MYTHS – ONLY PROFESSIONALS CAN INVEST IN THE MARKET STOCK

One of the biggest myths about investing is that it’s hard and should be left to the experts.

“Oh dear”… I wish I knew any better. In my working years as Chef, I thought that market stock investing wasn’t suitable for the average person and should be handle over to professionals in the industry. I felt so scared to lose everything.

The logical next step (thinking back, not so logical) was giving my hard earned savings to a “professional” financial advisor. I prefer don’t share the amount of money I have lost, only the thought, make me sick – very sick. On the other hand, my financial planner bought a new Mercedes Benz and didn’t feel even sorry for my lost.

Over the years I’ve learned that we are responsible for managing our money. If we don’t, someone else will do for us but keeping most of the profits. Not only that, but you’re risking the capital invested whether the other party has no skin in the game.

Look, I feel your struggle in believing that you can do it, but believe me, you can.

I’m an ex-Chef, I didn’t go to university, I don’t have any investment qualifications or any fancy certificate… but today, I’m living comfortably by investing in the market stock. And I’m not the only one without a financial background to do so:

• Jay from FI Fighter – This guy is an engineer that gave up his successful career in Silicon Valley to truly experience life without the 8-5 drama. How? By investing. At the moment Jay is totally focused on investing in precious metal stocks. And let me tell you this; “He is making a hell of returns.” In 2016, he doubles his portfolio value.
• Sabeel from Road Map 2 Retire – Sabeel regularly saves part of his paycheck so he can grow his wealth by investing. He buys blue chips shares that pay regular dividends. He started in 2008 making a mere US$19 of dividend income in 2008. Last year he made US$ 9,000.

There are many regular guys out there that are investing and doing exceptionally well. Do you still think that you can’t?

Hell yeah! Investing is like any other professions. First, you learn the basics, and then you practice till you become an expert.

Man, just get started. It’s going to be an exciting journey.

2# MYTHS – DIVERSIFY OR YOU ARE GOING TO GET ROASTED

Can I be honest even if I’m going to be brutal?

This is really good advice for people who are ignorant about investing. This myth is been created by the financial industry to protect people from their own ignorance.

And it goes along these lines:

• Diversify to minimize risks.
• Diversify and hold your portfolio for the long term.
• Play it safe, diversify.
• Diversify by your age; % of stocks and % of bonds. The older you get, the more bonds you should hold.

I don’t say that diversity is a bad thing, but my point is that knowledgeable investors don’t diversify; Bill Gates major investment is Microsoft – Warren Buffett’s portfolio of over $100 billion is focused on about 10 stocks – Jeff Bozos main interest is Amazon.com.

By focusing on the thing that they know and can do best, rich people get richer while poor people get poorer.

The answer is to Invest in what you understand and only when is on sale. It’s like get a 10 dollar bill for a fiver. If you can learn to do that, diversification is a waste of time and most luckily going to reduce your returns.

So, what do you want to do?

The choice is yours.

P.S Please, don’t tell your financial planner about this. He might seriously act as a weirdo.

3# MYTHS – YOU CAN’T BEAT THE MARKET

This is a tricky one, and the reason is because only a small elite of investors can beat the market – regularly.

In fact, the Pareto law is at work here; 20% of investors take the 80% of the rewards. On the other hand, 80% of investors barely make a profit or lose money in the process.

You can understand better by studying the market wizards who have accumulate riches over the years.

However, the small investors like you have an advantage; FLEXIBILITY.

The BIG guys run BIG funds, making them quite illiquid and corner to a minority of investments and markets.

In fact, the act of a BIG guy exiting a stock or sector is the reason stock price goes down. As the price drop, other BIG guys feel the squeeze forcing to liquidate their positions causing “sell panic.”

Just think about the domino effect.

Save

The good thing going for you here is that you can access to a broader investment marketplace (small sectors where hedge funds can’t operate) and also, be much more flexible in your investment strategy. BIG guys need in average 3-12 weeks to exit a position. A small investor can exit in hours – few days most.

If you’re knowledgeable about that company and sector, you can stay calm and buy it at a great discount price while the BIG guys are in full panic mode. And when you do that, you will crash the market, literally.

And you might wonder: “Rudy, how much you would consider small?”

That is a good question, my friend. Look, there isn’t an all fit type of answer, varying by investments and sectors. However, if you are investing in the local market stock, until ten million dollars, you’re small enough to keep your agile advantage over the BIG guys.

THE MYTHS ARE BUSTED

In conclusion, there are many myths and misconceptions about the stock market. Most people hold back learning to invest for fear of losing money, maybe low self-esteem (I can’t do this, I’m just a Chef) and sometimes, not fully understanding the massive growth potential to one wealth.

Lastly, stop listening to your uncle Jerry’s advises. If he isn’t wealthy is because he doesn’t know how to create wealth in the first place. By listening to his market stock myths, you’re missing an opportunity for early retirement. Don’t work till 60 like your uncle, there is a better way.

I hope, by busting the 3 biggest market stock myths, you will feel confident enough to start investing in the market stock so you can leverage your savings and reach financial freedom faster.

http://smartmoneytoday.com/money/grow-your-money/stock-market/3-myths-stock-market-investing/

Is there a way to simplify investing?

Is there a way to simplify investing?

Does investing seem overwhelming? Do you think it’s hard investing in market stock? Is there a way to simplify investing?

Don’t give up! Fortunately for you and me, investing is a lot easier than what we think. There are steps you can take to automate the process, as well as to find investments that will allow you to sleep soundly no matter what the market is doing.

Why investing seem so complicate then?

Because there is an entire industry out there profiting from the chaos. Banks, financial advisors and other people working in the financial industry want you to believe that investing is hard, only accessible to professional. And the reason is simple; PROFIT. They make a lot of money from uneducated investors.

Also, the media add to the din, with advice on building a sound long-term portfolio conflicting with articles on the 10 hot stocks to buy now. And again, it’s all about; PROFIT.

The result is that over time, investors find their portfolios become increasingly complicated and cluttered. Multiple accounts without reason, few investments here and there not fitting your investment plan or maybe even few financial advisors (more brains, better results, right?)

I get it.

I spent years feeling overwhelmed and frustrated with investing, it seems everyone else had all figured it out. I felt like running around with a black box over my head, without direction.

Whether you’re just getting started as an investor or being engaged in the markets for decades, I’m going to show you in simple steps how to make investing much easier while being more profitable.

Finally putting a stop to that voice in your head screaming; “How can I simplify investing?”

Step 1: Reorganize Your Accounts

If you’re like most people, you have got multiple brokerage accounts, a retirement plan, mutual funds, insurance and more.

A bundle of accounts is not only hard to monitor, but you don’t get a grasp of your financial affairs which jeopardize your decision process to achieve your goals.

I’m guilty of this for several years, till I asked myself: “How can I simplify this mess?”. It was much easier than what I thought.

Reorganizing my accounts is one of the most efficient and time-saving moves in my financial life. Not only I don’t have to deal anymore with multiple companies and multiple fees, but I could focus on my portfolio strategy gaining better returns.

Yes, my friend, you need to focus if you want GREAT investment results.

As you review your accounts to see what you can consolidate, try to view your investments as a single portfolio. Each account, whether it is a tax-deferred account or a taxable account, can have a very specific objective and type of investment. One account may be mostly fixed income and another might be more trading orientated, while yet another is just for global investing.

Step 2: Go On Autopilot

I believe in automation; it just makes life much easier.

When comes to investing, it also saves you from doing silly things with your investments. I’ll explain this in the next step.

Once you reorganized your accounts and developed an investment strategy, arrange automatic periodic transfers from your bank account to the investment account.

Investing periodically is the key to growing your wealth.

Step 3: Consider Indexing – ETFs

I love ETFs, they are simple, efficient and cost effective. If you’re new here, ETFs are vehicles mirroring an index providing diversification at low cost. If you aren’t a millionaire that can afford to buy shares of multiple companies to diversify their portfolio, ETFs are perfect for you.

For example, if you want to invest in gold, just buy a gold’s ETF which has diversify assets forward the yellow metal.  I recently wrote my recommendation for the best ETFs in 2017, it might help you to get started.

Investing can be complicated if you want to pursue it as a full-time Gig. You have to keep looking for bargains, analyzing hundreds of stocks every month and deciding which ones to buy and when to buy and, later, sell them.

A great way to avoid this process while still enjoying solid investing results is to be an index investor. According to John C. Bogle, with a simple indexing strategy, you can beat professional fund manager.

If you would like to learn more, read his best-selling book; Common Sense To Investing. One of the best book I ever read about personal finance.

As you can see above, by simply investing in the Vanguard S&P 500 Index Fund which mirrors the S&P 500 index, you can expect in average a 8% per year. Simple enough?

Step 4: Buy Undervalue Sectors

This is the pillar of my successful investing strategy which brings me double digits return every year. This is why I could retire at the age of 31 from the corporate world. Thanks, dear market 

I look for undervalue sectors. The markets are cyclical, meaning that at any point in time, a sector might be undervalued or overvalue.

The benefit in spotting undervalue sectors is that you can buy shares of the best companies within a bitten up sector for pennies on the dollar.

It’s like purchasing a house during a recession when foreclosure is at its highest. Everyone is selling, prices collapse and you get the deal. Sell the house a few years later for a good profit. Enjoy the ride.

For example, this year (2017), the Uranium sector is undervalued. In fact, I’m buying the best Uranium mining companies out there at a discount price. Sound risky? Much less than buying any company in the S&P 500 which is at its highest of all time.

Justin from Next Big Trade wrote an excellent article about this process to discover sectors which are undervalued and ready to take off. Justing knows what is talking about, and I have a great respect for his work.

Step 5: Don’t hire a financial advisor

Look, I don’t say that financial advisors are bad people, on the contrary, some are excellent. However, you have a small chance to find a killer of a financial advisor, but if you do, let me know.

In the meantime, it’s best you get educated about investing and how to live a rich life by following SmartMoneyToday.

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Let's keep in touch, we have a long journey ahead. Better together than alone. Right? 
If yes, write your first name and email address below. 

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Step 6: Rebalance Your Portfolio

Don’t chase investments, be discipline, patience and the market will do wonders for you.

Once you have established your desired asset allocation, it’s a relatively simple matter to rebalance between one and four times a year.

When an asset class has increased enough that it takes up too large a portion of your portfolio, you can sell high and buy more in another asset class where the prices are lower.

By doing so, you move assets from overvaluing to undervalue sectors. It’s a practical system that increases your margins of return.

RELATED: Expatriate Portfolio Part 2; Best Practice for Portfolio Rebalancing

Why Nobody’s Giving Those Tips?

Because nobody makes money off it.

Imagine your financial advisor teaching you these tips. What would happen? You would fire him and his expensive managed funds. Bloomberg would be a dead channel. And the financial newspaper and magazine couldn’t sell issues with headlines like 10 Hot Stocks to Buy Today!

But for me, I’m happy to share my knowledge and see you succeed in life.

So, the bottom line is simplified your portfolio with the above tips and you should see improved overall performances.

After all, with a simpler, less complicated portfolio, you will be able to focus your efforts on improving its performance, rather than trying to sort out how it works.

http://smartmoneytoday.com/money/grow-your-money/personal-development/how-simplify-investing/

Expat Finance; 8 Tips For Handling Your Money Abroad

Planning to move abroad and live the expat life?

So, you’re moving abroad… That’s great!

Being an expat for 15 years, I can tell you that it’s been a rewarding journey. New cultures, food, people and way of doing things – It’s a different world out there.

Like most of you, I had a hard time to get financially set up while working/living abroad. Back then, I couldn’t find any valuable resources how to move money around countries, pay little in exchange commission or how to send money from/to home. In a few words; It was frustrating!

However, a lot has changed in recent years, from internet banking that let you manage multiple currencies accounts to cheap money transfer companies. All in the name of avoiding fees and minimizing costs.

The truth is, what used to be so easy in your home country no longer proves to be quite as simple abroad. No matter where you go, things just won’t be the same as they are back home.

Today, I’m going to share with you the same valuable tips that I learned by managing my money as an expat so you can move abroad with confidence and enjoy your time without financial stress.

Ready? Let’s go!

1# ARRANGE AT HOME FIRST

Before leaving, put all the pieces in place with your home finances.

For example, some bank required token or other security future to make payments online. Do you get text messages with a code whenever using online banking?

Well, you’ll change your phone number abroad for a local, cheaper option, so you need to find an alternative way to use online banking in your home country.

Contact your bank explaining that you are moving abroad, and ask for alternative arrangments. Also, tell them to unblock your ATM and credit cards to be used aborad.

Whenever I use online banking in the UAE, I get an email with the token. Very convenient, indeed.

Also, plan how to pay your bills, taxes, mortgage and so on before moving abroad. You don’t want to fly back home to pay the bills, right?

The best way is to set up “automatic bill payment” to pay:

• credit card bills
• utility bills
• car payment
• house payment and more.

Transfers between your accounts can also be automated. Some banks will offer more automation features than others, so you should check directly at your bank’s website to see what can you automate.

And if I wasn’t clear till now, the best way to manage your bank account is to use “online banking”. Don’t have online banking? Change bank before departing.

2# THE WIRING NIGHTMARE

The biggest money-related challenge is to wire money across international borders. Most banks required your physical presence in the branch.

However, a good number of bank allow you to initiate the transfer by phone or internet banking, but there is a catch. Usually, they allow only a small amounts every day, like US$3,000 – US$5,000.

Not only you waste a considerable amount of time to initiate these transfers, but you get charged heavily for each transaction.

Imagine what it took to transfer US$30,000. Besides calling the bank every day for 2 weeks period, it cost me a whopping US$350 in fees.

That wasn’t fun 

Do yourself a favor, open a bank account that let you transfer a “considerable amount of money” without restriction and with a mouse click.

3# CASH IS KING

I noticed that people freaking out traveling with cash. That is a pity because carrying cash with you is the cheapest and best option to start settling your finances in a new country.

The common question I get asked is “Should I change money in my home country or at the destination?” If your currency is one of the following, change at destination:

• American dollar
• Australian dollar
• Pound sterling
• Euro
• Japanese Yen

Most countries in the world are craving for those major currencies. You’ll get a sweet deal on your exchange rate. I only carry American dollars because is the most accepted currency in the world. so the exchange fees are very low.

Regarding how much you can take with you, usually is $US 10,000 per person. Check with your home country and destination custom policies to find out how much you can bring.

So, don’t be afraid to carry money, no one is going to point a gun at you. Keep your money in different pockets of your trousers, jacket and shorts, so you don’t risk to lose the full amount.

4# OPEN A LOCAL BANK ACCOUNT

Now you’re settling in the new country but at one point, your cash will run out. You might be tempted to use your home ATM card to withdraw some cash. Don’t!

You get charged by your bank,  as well as the local bank. And one more thing, the secret that your bank doesn’t want you to know; the hidden conversion fee.

They will not mention “conversion fee”, instead is expressed as a higher-than-market rate (the bank pockets the difference). That isn’t smart. What is the smart way then?

Open a local bank account and transfer money directly there. It’s cheap and easy.

You pay the same fix charges for any amount, either you transfer US$100 or US$100,000, so it’s smart to transfer only one time the amount necessary for your living costs.

The second smart move is to open an account denominated in US dollar (for Americans) or Euro (for European). Doing so, you can hold money in your new account without risking to lose money if the local currency is WEAK. Also, converting money locally is cheaper than let the big banks convert for you during the International transfer.

If you’re a US citizen, check out Jeremy’ s tips about opening an account with Charles Schwab to avoid ATM fees.

5# APPLY FOR ONLINE BANKING

Just as you would back home (I hope), sign up for online banking, especially if you’re in a country where you don’t speak the native language. The teller, not always speaks English and that can be frustrating.

In Asia, online banking work very well. In fact, the last time I visited my bank was one year ago. Hey, online banking is really convenient, sometimes too convenient.

6# OPEN AN ACCOUNT WITH AN INTERNATIONAL BANK

If you consider being a permanent expat, open an account with an International bank with a strong presence around the globe. The most widespread retailer bank is definitely HSBC with 7,500 offices in over 80 countries, but there are other options.

7# HAVE AN OVERVIEW OF YOUR ENTIRE FINANCIAL PICTURE

Knowing where your money are not only it’s important but crucial. In the past, I had a hard time to move money quickly when needed. By keeping a simple spreadsheet in Excel updated every month, you’ll have a better understanding of your financial picture, so you can plan accordingly.

After 15 years of expat life, having worked in 4 countries and collected 5 bank accounts, 2 brokerage accounts, and a physical gold deposit, things can get messy fast.

I have a gift for you. You can download a sample of my spreadsheet below to keep in check your net worth:

Click here to download the NEW Net Worth Calculator + Gold Standard conversion!

8# CONSIDER HEALTHCARE

This is a tough one. In foreign countries, you need a private healthcare insurance if you want access to quality health care.

As you might know, private hospitals are expensive and accept you only if you have an insurance or a credit card as collateral.

Last year, I gave a lot of thoughts about renewing my medical health insurance. I can’t decide for you as your needs and situation are totally different than mine, but I hope my thinking process is helpful to assist you in making the SMART move.

Alright, my friend, time to pack your luggage and be confident to start your new life abroad (I know you can!).

http://smartmoneytoday.com/money/grow-your-money/expat-investing/expat-finance-tips-handling-money-abroad/

Do you feel that you aren't where you would like to be?

Do you feel that you aren't where you would like to be?

The internet is packed with “How to goals guides”, and yet I didn’t want to make another one. The reason is simple; unless your goal is meaningful, you hardly will achieve it.

Meaningful goals create a meaningful life

Just a little story here. Back in 2012, I set goals for the next five years. I thought I needed some direction. One of the goals was to increase my yearly income every year, and it was quite aggressive. Back then, I was still employed as Chef, so was natural to set a goal to get a promotion after promotion.

Not only this goal was unrealistic, but it was meaningless to me. I wasn’t happy to work for someone else, I had enough to serve guests, I had enough to work longgggggg hours. I wanted to make more money to improve my financial future, but what I really wanted the most was FREEDOM.

I didn’t examine my motivations closely, It was just another numerical goal. I don’t need to say that I never achieved that goal.

So, it’s important to set meaningful goals because only goals with a strong meaning keep you going when things get tough. There may be time, for example, you don’t feel like waking up early to work on your goals. That happen to everyone. But if you have a reason, something you really want to accomplish because it means a lot to you, you’ll run out of bed with excitement.

I believe in setting goals in life to achieve greatness, and if you do that, you’re going to live a rich life. I also believe you should set simple goals. In fact, I advocate one goal at the time instead than multiple which are required a complicated system to keep track.

Focus your energy on a small number of goals, making you more effective.

In today post I’m going to show you step by step how to set meaningful goals so you can achieve greatness in personal life and business.

Here’s what I recommend:

1# SET ONE GOAL PER TIME

We get stuck in life because we want to achieve one zillion things. Unfortunately, we hardly achieve any if don’t unclutter our life.

According to Health.com, multitasking isn’t efficient as we like to believe, and can even be harmful to our health. You cannot maintain energy and focus if you are trying to do two or more goals at once.

Most people would say that having just one goal is impossible for them. I have two solutions:

1. You can still to other goals, but put them off for one or more months for now. Focus on one goal for at least one month, turn it into a habit, then move to your next goal.
2. Do more than a goal but keep them very simple. You don’t want to spread yourself too fine. Risking to fail any goal can be demoralizing leading to a lack of self-esteem. You want to set goals to improve your life, not to sabotage it.

2# VISUALIZE YOUR GOAL

The better you can visualize your goal, the easier will be.

Arnold Schwarzenegger stresses the importance to visualize goals in life. Arnold’s clarity is incredible. His goals were precise and concise. At the age of 15, Arnold visualized his goals:

I want to be the best built man in the world. Then I want to go to America and be in movies. I want to be an actor. – Arnold Schwarzenegger

If you don’t know much about Arnold’s life, at the age of 15 he was living in Austria and couldn’t speak any English. Imagine his friends listening to his goals. They might have thought he was crazy. Be sure it’s something you’re passionate about, or you’ll lose motivation.

Instead, Arnold shows the world the power of visualizing crystal clear goals in life. You can achieve anything, even what seems impossible.

You can do it!

3# THINK ABOUT THE STEPS TO ACHIEVE YOUR GOAL

Here you need to put on your plan cup.

Can the goal be achieved with a series of actions? Like 1-4 daily or weekly tasks. For example, to be a successful blogger, you’ll need to write a post every day.  Throughout regular actions,  eventually, the goal will be accomplished.

If your goal will take more than one month to be accomplished, break it down in smaller subgoals.

4# THINK ABOUT DETAILS

Writing an article every day isn’t going to make you a successful blogger. But writing 800-3000 words article everyday, and also post at least 2 times per month on someone else blog while writing quality articles, should make you a star.

Write down each action you need to accomplish to achieve the goal. Be specific.

5# SET A DEADLINE

Without explicitly set an expectation to achieve the desired goal, most likely you will get lost along the way. So, “When your goal will be accomplished?”. An example; I want to be a successful blogger in one year time from today.

6# STAY FOCUS

Focus on the action for a whole month to create a habit. One habit per time. The first month, write every day an article without bothering about other details. On the second month, write every day an article between 800-3000 words long. And so on… You get me?

7# GO IN AUTOPILOT

Here the sweet part; once all the habits are ingrained, your goal is on autopilot. That means no more struggle or sweating to write a blog post.

Instead, you will feel writing to be natural like having breakfast each morning.

WHEN TO SET GOALS?

There is no perfect answer here. If you haven’t written a list of goals yet, the BEST time is now. Once you get started, make sense to create yearly goals while breaking them down into monthly goals.

Monthly goals help to accomplish your long-term goals, and at the same time to review your progress. I think, progress it’s important as much as setting goals.

Every end of the month, I review my personal and financial goals. And of course, on the end of the year, I take a full day to go throughout the big goals.

Keep focused on your goals, and put all your energy into achieving them. Don’t let obstacles to unfocus you from your journey. Keep in sight the horizon, you’ll get there.

http://smartmoneytoday.com/self-development/hot-set-goal-life/