I’ve been intrigued by investing for years, and lately find myself engaged in frequent conversations about the topic with friends.
Here are some of the best tips I’ve picked up over the years. Please keep in mind that I’m not a financial advisor, and you may want to consult with one if this motivates you to dabble in the market.
- Keep your costs low, whether you go with a low-fee mutual fund or a stock reinvestment program offered by many corporations.
- Time is your greatest ally – start young.
- In general, the greater the potential reward, the greater the risk — and many people don’t think enough about risk.
- Read everything you can about Warren Buffett.
- In most cases, your home is not an investment.
- Think twice about investing in things you don’t understand.
- Pay yourself first. A 401 (k) plan where you work is a great option and you’ll probably never miss the money from your paycheck.
- Playing too safe brings the risk of not keeping up with inflation, and seeing the purchasing power of your dollar drop.
- Putting your investments on autopilot is an easy way to save. For example, you can make automatic, monthly contributions to an Individual Retirement Account (IRA) from your bank account.
- Every little bit helps, and adds up over time.
- Put enough into your employer’s 401 (k) to earn the company match. If the plan matches the first 6 percent of your contribution at 50 percent, you’re immediately turning $100, for example, into $150.
- People know the mantra “buy low and sell high,” but often do the opposite. A dip in the market might bring an opportunity.
- Diversifying your investments helps spread your risk by avoiding “too many eggs in one basket” syndrome.
- The web has a wealth of investment tools. Use them to help you make decisions about investment options, risk, retirement planning, and more.
- Spend less than you earn.
- Know your tolerance for risk and invest accordingly. It’s very likely different from mine, from your neighbors, co-workers, etc. Be realistic about how much you can risk, and how much of a loss you could tolerate.
- Building an emergency fund is a top priority.
- Follow the data, and invest in something because it makes sense, not because you love the company’s product line or because your neighbor says it’s a great investment.
- On the other hand, if you really like a product, consider looking into the company to see if it makes sense as an investment.
- While the stock market is generally considered the best long-term investment, making money in stocks is far from guaranteed.
- As with anything in life, if something is too good to be true, it probably isn’t.
Your turn. What’s the best investment advice you know?
I recently discovered ABC’s Shark Tank, a show that brings together entrepreneurs who ask a group of billionaire “Sharks” to invest in their product or service.
Even if you’re not an entrepreneur, the show is interesting and provides some good tips about business and finance:
Whether you’re interviewing for a job or applying for a loan, the person on the other side of the table will have a list of questions for you. Anticipate what they might ask, and be ready with responses — and data to back them. How? See the next bullet….
Know your audience
It seems as if some of the entrepreneurs on Shark Tank have never watched the show. For example, offering a 5 percent share of your company in exchange for a Shark’s investment pretty much guarantees a black mark on you ledger, yet it continues to happen. Before you walk into a meeting, learn as much as possible about the interviewer, client, employer, etc., to avoid making obvious blunders.
The Sharks can be harsh at times, but the entrepreneurs pitching their products need to stay on the high road. Rudeness often brings a quick dismissal from center stage.
Listen to experts
In addition to their financial investment, the Sharks bring a wealth of knowledge. Some entrepreneurs take their advice to heart; to others it sounds like Charlie Brown’s teacher. If a successful person offers a suggestion, listen carefully.
Be flexible and realistic
Entrepreneurs often walk away empty-handed after turning down a counter offer from a Shark. One man declined a multi-million dollar deal for his company. Understandably, he has a passion for the product, but $4 million is a big hunk of change to pass up. Think carefully before you turn down an opportunity because it differs from your original plan.
Your turn. What lessons have you learned from watching Shark Tank?
Flowers are blooming, kids are anxious for school vacation, and it’s time to be thinking about summer. If your idea of a day well spent is bringing a book to the beach, here are a few that you’ll enjoy:
11/22/63, Stephen King
While the book focuses on man who travels back in time to stop the Kennedy assassination, his life prior to the fateful day are what makes this book so enjoyable.
Summer of ‘49, David Halberstam
Halberstam follows the 1949 pennant race between the Red Sox and Yankees, weaving in stories about Ted Williams, the DiMaggio brothers, and the other players that suited up for this magical season.
Unbroken: A World War II Story of Survival, Resilience, and Redemption, Laura Hillenbrand
The inspiring story of Louis Zamperini, the Olympian runner who was stranded at sea for more than 40 days, and became a POW during World War II.
Harry Potter and the Sorcerer’s Stone, J.K. Rowlings
The first book in the Harry Potter series introduces us to the young wizard and the brilliant imagination of J.K. Rowling’s.
Small Vices, Robert Parker
One of the best of Parker’s Spencer series, the Boston private eye almost meets his match.
The Hunger Games, Suzanne Collins
Girl with bow competes in government-sanctioned, televised fight-to-the-death.
The DaVinci Code, Dan Brown
Murder, religious cover-up, and symbolism combine to make this a first-class whodunit.
Tuesdays with Morrie, Mitch Albom
Albom’s affectionate story about a former college professor who is in the final stages of ALS, and the lessons he still teaches.
The Adventures of Sherlock Holmes, Sir Arthur Conan Doyle
Classic stories of the great detective.
Your turn. What are your favorite summer reads?
Everyone loves a good movie. Let’s see how well you remember some notable quotes from a few flicks from years past. Answers at the bottom.
- “You’re going to need a bigger boat.”
- “Frankly, Scarlett, I don’t give a damn.”
- “I’ll be back.”
- “Hello. My name is Inigo Montoya. You killed my father. Prepare to die.”
- “You had me at ‘Hello.'”
- “A Cinderella story … former greens keeper, now about to become the Master’s champion.”
- “May the odds be ever in your favor.”
- “Snakes. Why does it have to be snakes?”
- “Was it over when the Germans bombed Pearl Harbor?”
- “Hey Stella!”
- “Why so serious?”
- “To infinity and beyond.”
- “Say hello to my little friend.”
- I think I’ll miss you most of all.”
- “It was beauty killed the beast.”
- “So, come up to the lab, and see what’s on the slab.”
- “I solemnly swear that I am up to no good.”
- “I wish the ring had never come to me.”
- “You’ve got to ask yourself one question, ‘Do I feel lucky? Well, do you, punk?'”
- Gone with the Wind
- The Terminator (and a couple of other Schwarzenegger movies)
- Princess Bride
- Jerry McGuire
- The Hunger Games
- Raiders of the Lost Ark
- Animal House
- Streetcar Named Desire
- The Dark Knight
- Toy Story
- The Wizard of Oz
- King Kong
- Citizen Kane
- The Rocky Horror Picture Show
- Harry Potter and the Prisoner of Azkaban
- The Lord of the Rings: The Fellowship of the Ring
- Dirty Harry
1-5 Left on the cutting room floor
6 – 10 Co-star
11 – 15 Oscar nominee
16 – 20 A-list celebrity
March is an underappreciated month. Its placement between the cold of February and the bloom of April leaves it almost without an identity. But before we sign a petition to delete March from the calendar, let’s look at some of the good things that happen in our third month:
1. Longer days
2. For my Irish friends, St. Patrick’s Day
3. Temperatures become bearable
4. Baseball returns
5. Shrinking snow banks
6. Birthdays of relatives and good friends
7. Pi Day
8. College basketball’s March Madness
9. It’s time to make summer plans
10. First day of Spring
11. March was once the first month of the year. Despite its demotion to the third slot, March hung around.
12. For school kids, March is easier to spell than, say, February.
13. Chuck Norris was born in March (according to the legend, at a hospital he built).
14. Reopening of the local Dairy Queen
15. The late-month storms that reminds us that winter still isn’t over (okay, maybe not so much on this one)
Your turn. What do you like about March?
I generally keep my blog and work lives separate, but this one is an exception.
The American Red Cross, my employer, launched a five-year effort to reduce the number of fire-related deaths and injuries, primarily by promoting the importance of working smoke alarms and emergency escape plans.
Why are these two elements so critical? Consider this: we asked Americans how much time you have to escape a burning building. More than half, 62 percent, answered 5 minutes. Another 18 percent responded 10 minutes.
In reality, you have as little as 2 minutes to get out of a burning house. Part of this is due to the speed at which a fire spreads; the other element is that 40 percent of fire deaths are from asphyxiation, due inhalation of smoke or burning chemicals.
A working smoke alarm alerts you to a fire. An escape plan — that your family has practiced — ensures you get out of the house as quickly as possible. The combination of the two can be life-saving.
Smoke alarms have a life of about 10 years. After that, replace them. Some of the newer models come with ten-year batteries, so you’re free of the yearly replacement (although you should test and vacuum them monthly).
Last year, 30 Mainers lost their lives in house fires, the deadliest year in decades. Most of the fatalities were young people, with lots of life ahead of them. According to our State Fire Marshall, all but two deaths could have been prevented.
Don’t become an “if only…” Check your smoke alarms. Replace the batteries or replace the alarms if they’re more than 10 years old (look for a birth date on the back). And create an escape plan. Include your kids in that process, and practice it a couple of times a year.
You may never experience a fire, but if you do, these simple steps can increase the odds of getting out alive.
I was watching morning-after news coverage of the Super Bowl and was struck by the second guessing of both the coaching and commercials. Seahawks fans are upset that the team elected to pass on their ill-fated final possession — an interception ultimately sealed the victory for the Patriots.
Others are angry at a Nationwide Insurance spot, in which a young boy spoke of the things he’ll never do because he was killed in an accident.
Whether you agree or disagree with either of these decisions, what’s interesting is the tide of negative comments on social media:
- “Too bad I don’t have #Nationwide insurance….so I could cancel it after that commercial.”
- “Seriously, who with @Nationwide’s PR/Marketing team thought a commercial during the #SuperBowl about kids dying was an idea worth $4.5M?”
- “That @Nationwide Commercial makes me want to call Geico”
Twitter also chimed in on the Seahawks choice to attempt a pass, targeting Seattle coach Pete Carroll, generally considered one of the best in the game:
- “Worst call in NFL History. Pete Carroll will never recover from this … Horrible! Horrible! Horrible!”
- “Pete Carroll just made the biggest screw-up in Super Bowl history.”
- “This was the mother of all screwups.”
Two lessons here. First, everyone has an opinion, and social media gives them a platform to share —good or bad. While these tweets (or posts) may not represent any more frustration than you’d hear at the water cooler, when combined, they create a wave of public opinion that reaches farther and wider than anything previously available to the everyday person.
Secondly, because of the potential of “bad press” in the social media world, the consequences of errors are greater. While people may not mean any ill intent by posting video of a news anchor accidentally dropping an F-bomb during a newscast, the potential damage is far beyond what existed in days past.
Your turn. Does social media magnify issues, or is it a valuable way for the public to be heard?