“Stop worrying about missed opportunities and start looking for new ones.” ― I.M. Pei

MONEY MONDAY’S

The biggest opportunity I see for investment right now is in Bitcoin. In the year 2009 one bitcoin was about $0.16. This morning one bitcoin would cost you roughly $7,200.00. The price has skyrocketed and is showing no signs of slowing down.

What is Bitcoin?

Bitcoin is an international cryptocurrency and digital payment system. There is no central banking system that regulates this system. The design of the cryptocurrency system is known as Blockchain. Blockchain is a public ledger that keeps track of all bitcoin transactions.Afraid of getting hacked? It would cost someone 10x more to hack bitcoin than to just mine them legally, and with that said, Bitcoin has NEVER been hacked not even once since its debut almost ten years ago. More advantages of the blockchain system are explained HERE.
It is opinion that cryptocurrencies is the future of money on the planet. The older generations do not understand the concept of these cryptocurrencies and won’t invest for the most part. Although I am not an expert on investing and even created this blog so that we can educate ourselves together, I do believe bitcoin is the biggest opportunity for our generation. A chance to join the one percent.
Click here, I think this is a great place to start your education on Bitcoin and other cryptocurrencies. Let me know what you find!!

LET’S BUILD OUR FINANCIAL LITERACY ONE STEP AT A TIME!!!!

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“Five Ups of life: Buckle up, Start up, Keep it up, Don’t give up, Cheer up.” ―ikrmn, Corpkshetra

WEDNESDAY WINNER

According to Yahoo Finance, the biggest gainer on the stock market today was B&G Foods, Inc. (BGS). At the closing bell, BGS was up over 12%. BGS’s annual report shows that the company has increased its net income by +100% from 2015-2016. But the reason B&G Foods, Inc. had such a great day was probably due to the quarterly revenue jumping 28.3% every year. This translated to a .1% drop in adjusted net income to $36.8 million. Adjusted net income per diluted shares dropped $0.55, a 1.8% drop. Analysts were expecting an even lower drop to $0.47 per diluted share. Since the loss was much less than analyst expected, this translated to a higher valuation for investors who rushed in for the opportunity to buy something that seems to be undervalued.

Valuation is something that I am going to continue to work on. Currently, the main source I am using for valuation is Valuation by McKinsey and Company.

LET’S BUILD OUR FINANCIAL LITERACY ONE STEP AT A TIME!!!!

“The best cure for one’s bad tendencies is to see them in action in another person.” ― Alain de Botton

TACKLE TUESDAYS

The second day of the week, Tuesday derives its name from Týr the god of single combat. So every Tuesday we should tackle something that is weighing down our financial elevation.

According to Tom Corley’s Rich Habits, 88 percent of wealthy people read for half an hour or more a day. Over 60% listen to audiobooks during their commute, 79% read to help them in their careers, 55% read for personal development, and 58% read biographies of successful people.

Today I am going to trade in an hour of television for an hour of reading. The book I will be reading is an Elon Musk biography written by Ashlee Vance. I have been reading this book for a couple of days now and it’s quite insightful into the mind of a highly driven and focused individual.

What are you going to tackle today?

LET’S BUILD OUR FINANCIAL LITERACY ONE STEP AT A TIME!!!!

“Sometimes the smallest step in the right direction ends up being the biggest step of your life.” -Emma Stone

MONEY MONDAYS

In order to generate the type of wealth that millionaires do it is important to generate multiple sources of income. Last night I took a step in that direction by partnering with Arise with my customer assistance company, Desir Customer Assistance, LLC.

The Arise platform allows for virtual customer service companies to partner with them, and get contract offers with large corporations. You know when you call Amazon customer service and someone helps you with your issue? Well, you will be that person. This is not an employment opportunity from Arise, it is a business opportunity. You will not be working for Arise, instead, you simply use their platform to perform customer service

The first thing I had to do was incorporate so that I could partner my company with Arise. Should you choose not to incorporate, you may elect to become an agent of someone else’s company (Why not mine? Desir Customer Assistance, LLC), or you can research others.

The next thing you have to do is take a pc scan. Usually, your average laptop should work as long as it’s Windows 8 or higher and, has several other features. They may even accept Windows 7 but I wouldn’t recommend it as it will probably run too slow. After you pass this exam you will need to take a voice assessment which I used my home phone for. It is required that I get a separate business phone line, which is what I will do in the coming week. The next thing that you will have to do is pay for a background check, which shouldn’t be more than $10 in most areas. Then I registered my IB or independent business or company, they all mean the same thing. I bring it up here because you’ll see them used interchangeably on their sight.

It took about two weeks for my LLC to be processed and registered in the state of Georgia, the PC scan took less than a couple minutes, voice assessment and background check took less than an hour.

Here’s how to register an LLC. There are fees involved with registering your LLC which vary by state. Find the link to your state through the preceding link that I provided.

You will have to purchase:

  • Telephone Keypad & VOIP/Gaming Headset ~$35-100
  • Phone Line ~$75
  • Initial Client Program Certification Course ~$50-250

After you’re done with the initial registration you must choose a client to train and get certified for. Do to disclosure agreements I’m not sure I’m at liberty to name drop, but there are opportunities to land fortune 500 companies as clients.

Here is more info on Arise here.

LET’S BUILD OUR FINANCIAL LITERACY ONE STEP AT A TIME!!!!

“The eye sees only what the mind is prepared to comprehend.” ― Robertson Davies

SUNDAY’S NEWS:

AMEX Says Goodbye to Kenneth Chenault

ken_chenault2

The last decade may have been the tail end of American Express’s hold on the niche of earning transaction fees. The last 16 years have been quite profitable for Amex while being headed by chief executive Kenneth Chenault, as credit-card usage has surged in the last decade.

Even with such growth, American Express is not doing so well in the rapidly evolving payments industry. Over 40 years ago, the amount of money for purchases channeled through AmEx was equal to 50% of what went through MasterCard and 70% of what went through Visa. In 2016 the ratio dropped to 30% and 14% respectively. MasterCard’s market capitalization is now two times that of American Express’s and Visa’s is three times as big.

PayPal is also gunning for AmEx because although they only have a tiny fraction of AmEx’s revenues and profits, they have surpassed them in market value. PayPal does not use cards, rather they give their customers a platform on their smartphones or computers tied to their bank accounts or MasterCard, Visa, or American Express. PayPal collects a fee for each payment processed. PayPal also offers Venmo (primarily for payments between individuals) and BrainTree (used by Uber, AirBnB, and Xoom).

The big banks are now targeting the customers that were well-off enough to be willing to pay for American Express transaction fees. They have also taken advantages of some of the co-branding deals that AmEx used to easily acquire which carried exclusive rewards for customers. For instance, they lost one of these types of deals with Costco to Citigroup. Costco accounted for 10% of its transaction volume. To counter these types of losses, AmEx has taken on bank-like characteristics and is lending more. Nomura/Instinet, a brokerage, predicts that interest income should bring in 28% of revenues for American Express.

Although the business has changed American Express may very well be here for the long hall. In my opinion, we are all probably going to switch over to some form of cryptocurrency in the future and make most of these financial institutions obsolete. But hey, I could be wrong.

LET’S BUILD OUR FINANCIAL LITERACY ONE STEP AT A TIME!!!!

(The Economist)

“Let the improvement of yourself keep you so busy that you have no time to criticize others.” ― Roy T. Bennett

BALANCE SHEET SATURDAYS

There are three types of financial statements(Income Statement, Balance Sheet, & Statement of Cash Flows) produced by a company of which to use to aid in your valuation of that company. This post will focus on the Balance Sheet.

A balance sheet provides information on a company’s assets, liabilities, and equity. Today I will focus on the Current Assets section of a company’s balance sheet.

Assets are things that the company owns, and these assets can either be current or non-current. Current assets are liquid, meaning that they can easily be converted into cash. For example, a company’s inventory or checking accounts are considered current assets. If you’ve assumed by now that non-current assets are non-liquid you would be correct. Some non-current assets could be real estate that the company owns or any patents or trademarks owned by the company, just to name a few things.

Current Assets

 (Company’s cash or any assets they plan to convert to cash within 12 months)

  • Cash- There are several types of cash accounts
    • Merchant Account: This account holds all the deposits made from the company which processes the credit card payments made by customers.
    • Payroll Account: This account is used to pay employees
    • Operating Checking Account: The deposits in this account are used to pay company bills and handle business operations.
    • Petty Cash Account: This cash is used to pay for the company’s small daily expenses.
    • Sweep Account: This account is used to house any left over money after companies operating expenses are handled. This cash is used for investments in a pool with other companies and is ‘swept’ back in operating account as needed.
  • Short-Term Investments
    • Stocks- these are equity securities which a company can purchase and sell in the short-term for a profit.
    • Bonds- these are debt securities that a company can purchase to sell in the short-term for a profit.
  • Accounts Receivable
    • This is the amount of money owed to a company by customers who have purchased merchandise or received a service from them, that the customer has not yet paid for.
  • Notes Receivable
    • This is a short-term debt that someone owes the company.
    • There are three major components:
      • Principal: Amount owed to company
      • Rate: Amount of interest the debtor pays on the principal
      • Time: Time period debtor has to pay back the note
  • Inventory
    • Retail Inventory- Goods the company purchases from manufacturers for resale.
    • Manufacturing Inventory
    • Direct Material Inventory- raw materials the company owns to make products
    • Work-In-Process Inventory- Items that are in process but are not yet complete at the end of the financial period
    • Finished Goods- Cost of the completely processed item
  • Pre-Paid Expenses
    • Expenses that the company pays before they are due. For example, a company may make a year’s commercial real estate insurance payments all at once.

LET’S BUILD OUR FINANCIAL LITERACY ONE STEP AT A TIME!!!!

(Maire Loughran, 2011)

“YOU DON’T BUY LIFE INSURANCE BECAUSE YOU ARE GOING TO DIE, BUT BECAUSE THOSE YOU LOVE ARE GOING TO LIVE.” – Unknown

Life insurance provides a superb way of providing for your loved ones even after your life has ended. I have an uncle who has recently passed away. Though we share many memories, the one thing that I always thank him for is being the person who gave me my first job.

I saw my uncle wake up 7 days a week at 4:30 AM and not clock out until around 11:00 PM that night. We worked for a Jewish grocery store that also provided delivery and catering services for Jewish events. In an entire year all of his days off combined may amount to about two weeks. This man was the definition of hard work. When he died after my freshman year of college it rocked everyone who knew him.

What stood out most of all was that there was NO money to bury him, leaving cremation the only affordable option. How could a man that worked so hard not have any funds to attribute to his own funeral? What if he’s leaving a wife and children behind, how will that loss of income be supplemented? Among the many investment options we have, life insurance is the most unselfish. You are leaving actual funds your loved ones can use to help buffer the financial blow the loss of your life will cause them.

Maybe my uncle was aware of the necessity of life insurance but couldn’t afford the premiums. The premiums my uncle would have been offered would have certainly been high due to his age(late 40’s) and health issues. The younger you are, the lower your premium. This premium will be locked in and wont change as you get older or sick.

Click Here to find out about some of the different types of life insurance policies.

LET’S BUILD OUR FINANCIAL LITERACY ONE STEP AT A TIME!!!!

“If your ship doesn’t come in, swim out to it.” -Jonathan Winters

There are many companies that offer shareholders dividends for owning shares of common stock in the company. Dividends are the shareholder’s share of company profits. For example, Coca Cola (KO) offered shareholders a dividend payout of $0.37 per share for the third quarter of year 2017. Someone that owned about 2,703 shares of Microsoft would have earned you about $1000.00 for each quarter (every three months) of year 2017.

2,703 shares may sound like a huge number, almost unreachable but allow me to show you how attainable it actually is. If one wanted to purchase 2,703 shares of Coca Cola (KO: $45.90) today it would cost about $124,061. The average household income America today is around $34,000 a year[i], and saving 20% percent of that salary would yield about $6,800 for that year. Assuming the salary stays the same, and the share price doesn’t shift much, and the dividend payout doesn’t change it should take about 18 years to purchase 2,703 shares. With that many shares, along with all assumptions included, you will receive a dividend payout of $1000.00 every three months in the year beginning in the year 2035 if you started today.

Here are a few things to also consider:

  • There are some companies that you will find that will offer a very high dividend yield. Usually that sends me a red flag that there is something negative going on with the companies financials and they are attempting to attract investors by offering a very high dividend payout. Beware of those companies.
  • Usually a company with a history of consistently raising their dividend payout will continue to do so. Companies with payout amounts that are inconsistent have a higher risk value. I usually check company dividend history using Fidelity.com (contact me for more info).
  • Not all companies offer dividends
  • Dividend payout amounts are not guaranteed and may change at the company’s discretion. But most companies keep in mind what the happiness of investors and try not to change or deny dividend payouts.

LET’S RAISE OUR FINANCIAL LITERACY ONE STEP AT A TIME!!!

[i] https://www.usatoday.com/story/money/personalfinance/2016/11/24/average-american-household-income/93002252/

“Someone’s sitting in the shade today because someone planted a tree a long time ago.” -Warren Buffett

On July 1, 1997 Amazon (AMZN) common stock was trading at $1.54 per share. Today AMZN is $1052.80 per share. I was still a child at this time, but what if my parents were start buying me shares of AMZN in 1997. If they bought $10.00 worth of AMZN shares for me in July of 1997 that $10.00 would be roughly $5,264.00 today, in just 10 years. Don’t you want to find a company to start investing in?

How to Search for companies on the New York Stock Exchange (NYSE)

The NYSE contains three Indexes:

NASDAQ, S&P 500, and the DOW JONES

Within these three indexes are the different company common stock shares. Imagine that the three indexes are three major car companies (ex. Toyota, Ford, Honda). All three car companies have cars have their own types of cars that they sell. Now, you can purchase a share of the entire car company or you can go into one of the car company dealerships and buy one or more of the different cars they offer.

For example, to purchase a share of Nasdaq today it would cost me about $6,421.00 or I can purchase a share of Apple, Inc. (AAPL), which is a company trading shares out of the Nasdaq index, for about $150.00 per share.  The Nasdaq share price is an average share price of all of the companies that are contained within the index (NASDAQ). Just about each and every publicly traded company in the United States is contained in one of those three indexes (mentioned above).

There are many ways to go about finding different companies to invest in; I am only here to offer part of the process I go through. The first thing I do when looking for a new company to invest in is go to finance.yahoo.com and click on one of the three indexes in order to find their different companies under the components tab. Here are three links I found listing the companies contained within each index.

NASDAQ:

http://www.nasdaq.com/screening/company-list.aspx

DOW JONES:

https://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average

S&P 500:

https://en.wikipedia.org/wiki/List_of_S%26P_500_companies

After I find the list, I go through each company and try to assess their value. I will cover valuation at a later date as it can be quite complex.

You will still need an online broker in order to purchase any shares but you don’t need a broker to analyze the companies of which you intend to buy shares of. Do some of your own research, you may find a more efficient way of finding companies to evaluate. If you do share with me.

BUILD YOUR FINANCIAL LITERACY ONE DAY AT A TIME!!!

 

 

“Nothing is more expensive than a missed opportunity.” -H. Jackson Brown, Jr.

A portion of my investments is in peer to peer lending (p2p). Peer to peer lending gives you the opportunity to act as a bank and loan your money out for a certain interest rate. You get to choose the rate in which you loan out the money. You are able to see the individuals’ credit score, occupation, debt to income ratio (percentage of their income that remains after all monthly expenses), any delinquencies (missed payments on other credit accounts), and much more. Essentially it gives you the opportunity to act the same as the mortgage company that owns most of your homes.

This is just a suggested place to invest some of your income and build your assets. I would like to be as objective as possible. There can also be some downsides to peer to peer lending. As of now I have yet to experience any. But here is a video laying out some of the pros and cons of peer to peer lending.

Click: https://www.youtube.com/watch?v=mLqzGCwniEk

The site that I have a peer to peer lending website that I use is www.Lendingclub.com

lc

It is one of my best investments. The only thing I don’t like about it is that it is not a liquid asset. Meaning it is not easily turned back into cash. I have to wait until the loan matures (paid back at the last due date, which could be as long as 5 years), or if the individual pays back the principal in full early. Do your homework. Leave comments or questions.

BUILD YOUR FINANCIAL LITERACY ONE DAY AT A TIME!!!