Recent events have caused a surge in online trading accounts. Lots of free time, commission-free trades, and a volatile stock market have many young investors thinking that road to riches goes through their online trading accounts.
According to Envestnet and CNBC “Trading stocks was among the most common uses for the government stimulus checks in nearly every income bracket”
Looking to build long term wealth? Pursue a strategy based on common sense, not the whims of the stock market.
1) Start saving 10% or more in a workplace retirement account.
2) Create a game plan to “up” your career and increase your income.
3) Start a business.
Twenty five years ago books by Burton Malkiel and John Bogle inspired me to
1. Change the way I look at building wealth
2. Create The Coffeehouse Investor based on three timeless principles
3. Inspire you to inspire others to embrace these same principles
Building a life of wealth and happiness during your retirement years can seem like a daunting challenge. It doesn’t have to be. I continue to be inspired by the work of others press on in helping others achieve this lofty goal.
I have listed my top three books that I have read this past year and hopefully they can inspire you to press on as well.
Whether you are signing up to participate in your company’s 401(k) plan, or establishing your first IRA, there are some basic fundamentals for you to keep in mind.
Save, Save, Save. That’s the hard part.
The easy part is investing those dollars. A simple “Target-Date” mutual fund is all you need. These investments generally consist of one investment made up of low cost index funds, that automatically re-balance over time to a more conservative allocation as you approach retirement.
For beginning investors, I have compiled a short list of Target-Date funds to consider for your first investment.
A recent NBC News/Wall Street Journal poll found that 80% of voters feel things are out of control in the US.
This “out of control” feeling can sap the energy out of our bones and out of our lives.
Let’s focus on the things we can control of our personal lives, and share our good energy with each other. Together we can move forward and make good things unfold in the global community.
It starts by being in control of your financial destiny.
What are the expectations you have for the growth of your portfolio? The Vanguard Group recently released its “June 2020 Market Perspectives” that includes Vanguard’s ten-year annualized nominal return projections. Take a moment to review them to see how they match up with the numbers you are including in your retirement planning projections.
College graduates embark on a new journey, with unlimited opportunities to engage in a global community crying out for change.
The job market they enter is in shambles. How they embrace this moment might determine how they live their life.
For college graduates who are intent on saving and investing right now, I provided 4 outstanding websites for review to increase their fund of knowledge – on investing and life.
The financial media has turned up the volume to match the heightened volatility in the stock market. This volatility is likely the new normal for months, if not years ahead. Use this opportunity to create a new normal in your life, and take charge of your financial destiny.
Keep track of how your spend your money – how money flows through your life, maybe not down to the penny, but at the end of the year, this awareness benefits you in at least three ways. . .
1. It allows you to identify certain expenses that can become added savings.
2. It allows you to redirect certain expenses toward other expenses that bring more meaning to your life.
3. Keeping track of money flow in your life allows you the emotional freedom to direct that mental energy towards your creative self – and a better world.
The global community invites us to foster our creative energy to defeat COVID-19.
Let’s challenge each other and ourselves to spend more time accentuating our creativity and less time tuning in to the political theater that is unfolding across the country as we move forward in the months ahead.
For the past 20 years I have connected with Coffeehouse Investors who are vibrant in the way they celebrate their creativity to make this a better world. I have compiled three themes they continue to focus on during these challenging times to see them through. Click here for a free worksheet that you can integrate in your life as we support each other in the weeks and months ahead.
On March 27 the U.S. Governement passed the CARES Act to offer relief for Americans impacted by this fallout. The following link offers a free summary of this Act as it pertains to your financial well-being. https://mailchi.mp/soundmarkwealth/caresact
Remember, bear markets in common stocks are inevitable.
In the short run, stock markets are irrational, driven largely by the emotions of investors, because it is investors who set the price of stocks, not the underlying companies.
Fortunately, over the longer term, markets are highly efficient, reflecting the productivity and profitability of companies and employees.
As our global community sets out to find a new normal in both the health and economic arena, instead of trying to navigate the stock markets next 25% move, use this time to create a new normal in your portfolio, and more importantly, your life. Coffeehouse Investors focus on three timeless principles.
1. Save for a rainy day (Create a financial plan)
2. Don’t put all your eggs in one basket (diversify based on your need and ability to absorb short term volatility to capture longer term returns in common stocks)
3. There is no such thing as a free lunch. (Maximize returns using low cost index funds and passively managed funds)
These principles have guided Coffeehouse Investors through the bear market of 2000-2002, the financial crisis of 2008, and the 2020 COVID-19 pandemic.
There will be more bear markets down the road. Don’t let bear markets control you. Take charge of your financial destiny – three timeless principles are a good place to start.
Are you struggling to make sense of this volatile stock market? Coffeehouse Investors have a better idea; Focus on your financial plan, ignore Wall Street and get on with your life.
In light of the coronavirus pandemic that continues to impact the United States and global community, we are challenged to get on with our lives like never before.
Through this challenge, we recognize that life is fragile. Bill Schultheis shares a personal story of his friend Andrea, who introduces “Gracenotes,” the wisdom of sharing your eulogy of a loved one now, while they are living, not at their wake.
During these days that hopefully are offering you some moments of solitude, consider writing and sharing your own Gracenote with someone in your life.
You can view Andrea’s TEDx talk at https://youtu.be/6N0U6iri2As
With the stock market experiencing a steep decline of late, many investors are questioning how best to invest in this asset class for the long term.
There are three ways to invest in the stock market.
1. Select individual stocks yourself.
2. Hire a professional stock picker to pick stocks for you.
3. Invest in a low cost index fund or passively managed fund that mirrors the returns of its respective index.
Because capital markets are fairly efficient, professional stock-pickers have historically had a difficult time outperforming a comparable benchmark. According to SPIVA, over the past ten years ending June 30, 2019, 87% of domestic large cap, actively managed funds under-performed the S&P 500 index.
For Coffeehouse Investors, common sense wisdom suggests you are better off approximating the stock market average through low cost index funds and passively managed funds.