Thursday, April 30, 2015

Which 401k Investor Are You? by Chris Costello, CEO of

I love to find my followers experts to guest author at CCM blog.  These experts truly enrich the available content at this site.  I mean…I can write a few winners here and there, but all of my experts hit it out of the park.  And why wouldn't they?  They offer insightful help and interesting ideas.

Several months ago, I featured Kevin Conard, Co-Founder of  Here is that very post in case you missed it: Blooom-co-founder-kevin-conard-one-of-the-good-guys.  Today, I am pleased to feature Kevin's friend, Chris Costello, Co-Founder and CEO of the multi-million dollar start-up, Blooom.  Enjoy everyone!

The Big List of 401k FAQs for 2020 | Workest

Which 401K Investor Are You?

1. The DIY investor enjoys researching investment options and in their free time can be found reading investing articles from The Wall Street Journal, Barron’s, Yahoo Finance, etc. This person may believe that paying someone for investment advice is completely counter-intuitive, since they are totally capable of doing it themselves for free. We joke that occasionally, these are the same folks (ahem, Men) who refuse to stop and ask for directions when lost. But that’s another discussion.

2. You have enough coin to actually get the attention of a qualified professional investment advisor. Maybe you are a bit long in the tooth and have done a good job of saving money. Maybe you got an inheritance at an early age. Or maybe you’re a silicon valley stock-option millionaire. Whatever the case – my guess is that you have at least 6 or 7 figures in your portfolio and have the benefit of working with a qualified (preferably fee-only) investment advisor.

3. You know you need help because you don’t have the time, desire, or knowledge to attempt to manage your 401k by yourself. You googled “401k help” and found 19 million entries. You have one of those know-it-all brother-in-laws but you just can’t bring yourself to flatter him by asking for his help. As a result, you’ve done your best to invest your 401k, possibly using one of those “one-size-fits-all” Target Date funds in your plan.

4. You don’t even know that you have a problem. This group of folks really worries me. These poor retirement savers are blindly socking money away into their 401k and have no idea if all of their money is going straight into a money market fund that is (and has been for some time) been paying close to 0% return. Some 401k participants have confessed to us that they thought it was their employer’s responsibility to manage the money and pick the investments for them.

So my question is – which of these 4 types of 401k investors are you? If you are #3 or #4 we invite you to click over to the blooom website and have a look at how we might be able to help. And if you are #1, just do your family a favor – if it’s after dark and you really don’t know where you are – please stop and ask someone for directions. In the end, getting your family there safely is more important than your personal pride.

Chris Costello is the CEO and Co-Founder of blooom. Chris has earned the prestigious CERTIFIED FINANCIAL PLANNER™ designation and has been working with individual clients and building portfolio allocations for almost two decades. At blooom, Chris builds the actual models used to generate 401k recommendations; allowing blooom users to tap into advice traditionally only available to investors with a gazillion dollars.

Chris Costello, CEO

11512 W. 119th Street, Suite Z.
Overland Park, KS 66213

Sunday, April 26, 2015

Latinos, Stop Buying Gold Jewelry!

Latinos should be the last people on the planet buying gold jewelry!  What is wrong with us?  Spending thousands of dollars over our lifetimes buying and selling different variations of the same things.  Gold chains, crucifixes, earrings, bracelets, rings, tooth caps, watches, and so on, what are they good for?  We have a complex, my people.  The gold fever imported to the Americas by Christopher Columbus, lives inside of us too.  The genocide of millions of native peoples in the Americas was fueled by this "precious" metal, now found on our own bodies.

Image result for vicente fernandez el arracadas

I've heard the myths: the gold bracelet on the child is to keep the evil spirits or people who want to do harm, as far away as possible.  The gold crucifix and the chain is to show how devout we are to Christ.  The gold earrings on the baby girl is to make sure people know it's a girl.

I'm calling bullshit on all of it!  It's about status, and it always has been.  It's about what the Spanish did to the Latino psyche.  It's what the poor learned while working on the hacienda of the wealthy landowner, seeing the riches so close, yet so far.  The only way to show oneself superior to jewelry.  Even gold coins play a role in Latino culture via Las arras.

As a child I remember the first piece of gold jewelry my parents bought me, una esclava.  Ironically, the word, "esclava," translates to the English word for "female slave."  It's a bracelet that perhaps you have seen both female or male Latino children, adolescents, or adults wearing.  Mine looked something like this below:  

My name was not engraved on the plate though this is done in Mexican tradition often.  I outgrew my first "esclava" and my parents bought me a new one from their "gold lady."  Yes, there's a lady or man who is the gold pusher in the Latino neighborhood or barrio.  If not with one of these individuals, many Latinos will flock to their local jeweler for some of the latest gold pieces to arrive.  Latino owned jewelry shops make sure to have stock of pieces made in the likeness of religious symbols such as, crosses, saints, Virgins, etc., so as to prey on the devout who sometimes finance their purchases with the credit card!

The second piece of gold jewelry I wore on me and never took off was a chain and crucifix.  I was baptized Catholic and recall doing my first Communion in Mexico.  Never did complete the other Catholic rites and my mom regrets it to this day.  I don't recall how many gold chains and crucifixes I came to own, at least three I'd say.  One lasted me from 9th grade through Junior college before the crucifix bent out of shape.  My non-Mexican or Latino friends would make fun of me for wearing jewelry while running track and cross country meets.  They claimed laughingly that the gold would weigh me down and cost me valuable tenths of a second.  I wish now I'd listened.  Maybe my 400 meter personal best would be 50.68s instead of 50.88s?

It looked similar to this one below:

Image result for gold jesus on cross necklace

I'd like to remind everyone that I was poor growing up.  My parents had to borrow money from friends for food many times, yet we had gold jewelry we could have sold, but did not.  My mom wore these earrings called, "arracadas," and took really good care of them.  They come in different looks obviously, but my mom's looked something like this:

My two sisters have had their ears pierced as far as they can remember.  Their first earrings were, you guessed it, made out of gold.  Having girls can get expensive for Latinos! 

My parents had a friend who owned a ranch.  His name was Reymundo, and he went by "Mundo."  He had land and animals, and a nice house.  He also wore a ton of gold.  This man wore several gold chains and crucifixes around his neck, an esclava to make all other esclavas look like a loop of yellow yarn, and gold rings like Mr. T.  I was totally in awe of him as an adolescent.  I wanted to be like him, to one day be so rich I could afford as much gold as him--a foolish idea now.

With respect to Mexicans, wearing expensive gold jewelry has unfortunately also been adopted by elite drug lords and cartel top bosses.  In fact, Chalino Sanchez, who became famous in Los Angeles (was murdered in Sinaloa, Mex) for singing his own penned narco-corridos (ballads), was the father of the "Chalino" style = Western wear with exuberant gold jewelry.

Thanks for reading!

Friday, April 24, 2015

What Poor People Drink, An Inspirational Creative Story of Rising from Poverty

Have you ever drunk pinto bean juice as a beverage?  Pinto bean juice is what my mother used to call the water that was left in the steam pot once the pinto beans were done cooking.  God I hated it.  But she couldn't afford to buy milk for my sister and me, and water had no taste.  She also believed the bean water had nutrients that would be good for me, and a Mexican mother's beliefs are hard to dispel.

Immigrating to the United States in 1983 was the best present my palate could ever receive.  By the time we arrived in San Jose, CA, (we traveled from El Paso, TX to Los Angeles, CA, then to the Bay Area) a month later, I had been introduced to orange juice.  The stewardess on the plane flight from Texas to California must have thought I was dying of thirst, asking for second and third helpings of the stuff.  However, I would not be refreshed again by delicious orange juice, much to my dismay, until several years after.

I grew up a child of Sunny Delight.  From second grade through elementary that's what I had to drink at home, other than water.  I drank milk at school.  Sometimes I'd beg friends for their carton.  I'd score a few extra on any given week.  But home, a single bedroom apartment on McLaughlin Avenue was Sunny Delight's kingdom.

Most immigrant families improve their standing over time.  My parents were able to save money after three years of work as night custodians at the now defunct Rolm Corporation, and procure our family better housing: a two-bedroom duplex on 1192 South 12th Street.   I spent ten years at this domicile.   So did Tang.  My mom for some reason was convinced Tang was now healthier than Sunny Delight.  She had more authority over her children with Tang.  “Two spoonfuls only!” she’d yell at me as I ran to the kitchen dehydrated from playing outside.  My best friend, Isaac, an African-American insisted Kool-Aid was “way better” than Tang.  I liked Kool-Aid.  My mom never got it for us though.

I watched a lot of Yo! MTV Raps during my high school years, 1990-1994.  It was the living room couch, my 7-11 Big Gulp, and I passing the time after school.  Just the three of us.  What was it, fifty-nine cents for a liter of any available fountain drink they had on store?  My goodness, I felt like Charlie from Willie Wonka getting off the public bus, running to the 7-11 at the corner of my block for some of their Fizzy Lifting Drinks.   

What saved me from becoming a diabetic and from my sugar dependence was physical activity.  I didn’t know it at the time, but I suffered from anxiety and depression.  I still do.  But back in the early nineties, without a diagnosis or medication, running cross-country and track and field kept my body even-keel.  It also allowed my mind to concentrate and focus.  I got off the sugary drinks, heeding my coach’s advice.  I started to see the link between my poverty and the refreshments we had available at home.  Do rich people drink Coke or Pepsi for breakfast, lunch, and dinner? I asked myself.   No, they probably have butlers who serve them freshly squeezed fruit or vegetables and own several of those famous TV juicer machines, I thought.

When you’re poor, your choices are limited.  But you still have choices!  I chose to stop drinking poison.  I chose to read instead of watching so much television.  Though I pulled off a 3.3 G.P.A by the end of high school, I was not ready for a four-year college.  I chose to go to community college even though I had acceptance letters from several prestigious institutions.  Having a former illegal alien, Mexican, bi-lingual, and poor student on your campus…what Admissions Office wouldn’t want that?  Like Tom Hanks, community college saved me.  I was a horrible writer after high school, despite earning A’s in honors English courses three years in a row.  Undoubtedly, I would have flunked out at a university.

San Jose City’s writing lab was my salvation.  Tutors helped me get the basics of writing craft down.  So did being an avid reader.  Everyone has access to books!  While at SJCC, I read like a monk during the middle ages.  I read the classics.  I read philosophy.  I read about governments and ruling.  I read American literature from the 1800’s to the present.  And I wrote.  I fashioned my writing after Twain, Poe, and Steinbeck as writing exercises until I found something: my own voice.

And so although being poor is a financial condition of your place on the planet, it is not a condition of your heart or mind, unless you live in a country without freedoms.  America is such a great country because you can learn to read and write without reprisal.  Because you can make a living from reading and writing and replace poverty with endless wealth.

Who taught me to invest in real estate, stocks, and bonds?  I taught myself with only a library card.  I taught myself spending hours reading at the Barnes & Noble.  Now I’m worth over a million dollars at 38.  I can’t remember the last time I drank Sunny Delight or Tang.  That’s a great thing!

Thanks for reading!  

Tuesday, April 21, 2015

19 General Investing Tips for Beginning Investors

I have been an investor for over 12 years and what I have learned from my experience, and from mentors is that all investing is the same.  You buy something, you sell something.  It doesn’t matter if you’re buying one block of gold or an entire shipment, a stock, an existing company, an art piece, a house (not your residence), a foreign currency, etc.  The objective is to sell these things to someone else for more than what you paid.  The second and equally important objective is to get something (whatever) for less than what it’s worth.  And determining what something is worth can be hard.  What something is really worth boils down to what someone else is willing to pay for it!

Investing also involves various levels of negotiation.  There will be times when no negotiation is required, i.e., someone will take your price.  Why?  There’s always a reason and in these cases, desperation is the emotion driving the other side of the deal.  You’ll get the best deals when the seller is in a distressed situation.  Most of the time there will be some negotiation involved and in these cases you have to know your maximum price to pay for whatever the seller is selling.  Any price point beyond this maximum and you will fail to turn a profit later.  The point between maximum profit and no profit is your “margin of safety.”  If you’re not careful, and buy at the wrong price, you will erode your margin of safety and in turn diminish your returns.

I’ve taken the liberty of writing out 19 general investing tips for beginning investors with the intent of shedding more light on the topic.  Perhaps these tips will simplify what investing is, and let you visualize yourself taking part in something I find to be truly enjoyable.

  1. In real estate, investing is more of a win-win.  In the stock market, it’s every man for himself.  Know the playing field.

  1. Enter the playing field (the stock market, the real estate market, the Forex market, etc.) knowing as many of the rules as possible.  It’s always best to have another investor introduce it to you.

  1. Get really good at appraising value.  Time and experience improve your appraisal skills.

  1. You make most of your money when you buy, at the front-end, not when you sell, or the back-end.  If you’ve bought high, only a miracle will keep your deal from not smelling like backend.

  1. Taxes are expensive.  However, never overestimate the impact of taxes, meaning don’t let taxes keep you from selling to either get out or get cash for a better opportunity.

  1. Taxes are expensive.  However, never underestimate the impact of taxes, meaning don’t let taxes eat away your profits by not minding them, i.e., not having a tax saving strategy for each of your investments.

  1. If you see money as a hammer, every opportunity will turn into a nail.  Money is a tool to be used, not left gathering dust in a bank account earning zero interest.

  1. There’s risk and there’s reward.  But your behavior, how you deal with risk and what you do with your rewards, matter more.

  1. There’s death.  There’s taxes.  And there’s inflation.  All three are certainties.

  1. In any deal, you’re not charged a single penny for asking a question.

  1. Don’t fall in love with the first investment home you ever buy.  Get a few flips under your belt as quickly as possible, so you have staying power, working capital to get on with your next deal and be able to deal with the things that will invariably come-up.

  1. If you want maximum and accelerated gains, don’t diversify.  Put all your eggs in one basket, but make sure you have a tight grip.

  1. Just get out there and do it.  Thinking too much about it will paralyze you.

  1. Don’t let one mistake stop your investing career.

  1. My father-in-law made millions of dollars investing. He spent it all on booze, women, and divorces.  Don’t be like my father-in-law.

  1. You DO need money for investing.  Using Other People’s Money (OPM) is preferred.

  1. Surround yourself with good and reliable people.  If they don’t have these qualities, don’t hesitate to get rid of them.

  1. Learn how to negotiate.  Negotiations and investing are dance partners.

  1. The best tip of all...don’t invest money you can’t afford to lose.

If investing is still too scary for you, consider this:

There is more risk in driving a car than there is in investing.  People are okay placing their lives in danger almost every single day, getting behind the wheel.  Yet it’s the thought (fear) of losing money that keeps them up at night.  Go figure.
Thanks for reading.  Need courage?  Email me:  Before you go, don’t forget to subscribe to this blog so you won’t forget it exists!  Also, go ahead...leave a comment and let us all know, what scares you about investing?     

Sunday, April 19, 2015

This is “Why” You’re Not Making Big Money

"My Mind Playin' Tricks On Me"
Geto Boys
[Verse 2: Willie D]
“I make big money, I drive big cars
Everybody know me, it’s like I’m a movie star...”

These lyrics by Willie D of Geto Boys just about sum-up why the average person never gets to be rich.  Being rich isn’t everyone’s desire.  Many people are happy to work a long career, budget, and save for retirement.  Sorry, this post is not for you.  However, if you’ve ever aspired to have the things in life you feel you deserve, for example, enough money for an early retirement, a fancy car, a big home, etc., and have failed to get there, your problem may not be a lack of money sense or skill.  I am here to tell you that what could be holding you back has nothing to do with lack of want, energy, or even regular motivation, but rather has everything to do with your life: who you are, what you stand for, and why you’re on this planet.

Most people associate wealth with being able to afford more things without concern for depleting one’s funds.  It’s a lifestyle thing.  The typical working class individual is after the lifestyle the wealthy get to enjoy.  I mean, who wouldn’t want to be able to eat like a king, travel often, have a personal chef, (insert your dream state of existence) and so on?  People get after it, meaning, they work hard, without rest sometimes, in an effort to make their dreams come true.  Not seeing the financial outcomes they’d hope for, tired and defeated, they give up.  They go back to what they can depend on to keep them living, not alive: a job.

Where in the path to becoming rich do people err?  It’s not at the beginning, the middle, or the end.  People screw-up becoming rich before the beginning!  In what I learned network marketers call, “The Why.”  Your, “why,” is something greater than you, believe it or not.  It’s the selfless blueprint of your reason for starting on your path to financial independence.  My wife, Jessica, is an Arbonnista (Arbonne International).  Before she could get really good at presentations, selling to people and convincing them to join her team, she had to work for numerous hours on her “why.”  All the Arbonne consultants, just like most other network marketers, have a “why.”  Somewhere in their presentation they share their “why” with their guests.  Having a good “why” makes them thousands.  Having a great “why” makes them millionaires.  But it’s no gimmick!  You see this is as sincere as sales can get.  I’ve never seen so many people cry at an event (other than a funeral) as much as I have when witnessing a great Arbonne consultant relating his/her “why.”

An Arbonne "opportunity" meeting taking place.  Lady on the left thanking her team on the right.

Why do you want to be rich?  Is it because you want more things?  That’s a horrible, selfish, and insincere “why.”  It won’t add meaning to your life.  

Is it because you want a super lifestyle?  Okay, but this is still about You, and may be what deep down sabotages your every move.  

Self-made millionaires started out with huge, and I mean huge, “why’s.”  They wanted to be rich in order to get their family out of poverty.  They wanted to be rich in order to pay for a loved one’s cancer treatment.  They wanted to be rich to send a sibling to college.  They wanted to buy a loved one the prosthetic they needed.  They needed the money for a parent’s operation.  They see a need to provide a service to underserved people and they want to give to these people (via a charity, e.g.) throughout their lives.  Do you see the difference between the motivations to get rich here versus what you may be holding onto in your mind for motivation?

Your “Why” Can Evolve

When I first came to this country as an immigrant from Mexico, my “why” for becoming rich consisted of helping my family out of poverty.  This fed my being for many years, until I became a professional and a successful investor, and realized my parents can now count on me whenever in need.  I’ve been able to help my parents financially many times.  But the need to do so has lessened over the years (my parents are in good health and spend below their means) and this became a problem.  My motivation for becoming rich diverted back to me, and I had to find something more pure, so to speak, a worthier cause to continue my wealth-building path.  My “why” had to change.

Money as a motivator can work for some people.  You don’t want to be like these people.  Deep down you want to matter for/to someone other than you.  What’s the point of living otherwise, right?  Well, as it turns out, making lots of money goes hand-in-hand with helping others in a way that inspires you.  My “why” today is all about helping others become wealthy.  My platform is this blog.

To help you get started on your own worthwhile “why” I invite you to go to my About Me page.  In it you’ll read my core belief: “Every person has limitless potential to be successful, wealthy, happy, and helpful to others.”  And this is my educational agenda: “I also believe financial literacy has the power to transform the lives of members of ethnic minorities (especially Latinos and Blacks) who are economically challenged.”

The secret to wealth creation is helping people, period.  Sure there are mechanics to making money, but you won’t get anywhere without first scripting a great “why” for becoming rich.  This is fundamental.  Once you’ve clarified your “why” I guarantee you’ll never be devoid of purpose.  And when obstacles appear along the way, which invariably they will, you’ll always have your “why” giving you strength to find solutions.  Finally, you’ll better appreciate the lifestyle of your dreams when you know you didn’t step on everyone to get to the top, that along the way you guided and assisted others.   

If you need help with your “why” email me:  I’d be more than happy to help you get your mind to stop playin’ tricks on you.  Thanks for reading!   

Wednesday, April 15, 2015

Tax Refunds are for Morons

I admit I’m a moron.  My wife and I got over $11K in state and federal refunds this tax season.  That’s ridiculous.  I can’t believe I gave Uncle Sam that much money to hold interest free for over a year.  I made nothing on that $11K!  And that pisses me off.  Upon being given the bad news by my Enrolled Agent, I emailed my Human Resources department and informed them I’d be submitting a new W-4 (Employee’s Withholding Allowance Certificate) immediately.  I was only claiming my wife, Jessica, and myself, having neglected to change my allowances after the birth of Rehani in 2011 and Ajani in 2013.  I say neglected because in 2012, 2013, and 2014, I received similar hefty returns, but I was too weak-minded to do anything about it.

Where is my refund 2019: How long does it take IRS to process taxes?

Jessica likes the idea of using taxable income as a form of savings.  Pay more taxes each month, more than you need to, and then get it back in late February of the subsequent year.  This was her thinking: Since we don’t have our home’s property taxes impounded each month, let’s use our tax refunds to pay both installments.  Our yearly property taxes are $4950. Meanwhile, we got back $10K in 2012, $9K in 2013, back to $10K in 2014 and $11K this year.  Meaning our strategy of saving for property taxes by over-paying our taxes was a poor one.  After paying our installments, we still had $5K plus left over.  I was disgusted.  “Do you know how much money I could’ve made with that extra monthly income available to me?”  I’d ask Jessica rhetorically.  Change in the money habits of a couple is slow to take shape sometimes.  In our case it took four tax filings for me to finally be given the green light to submit a new W-4.  Now I’m happy to say my allowances are at 4, and my monthly net pay is over $300 better!

I want you to see how much money you’re leaving on the table when you get a tax refund.  I found this great article: Dont-be-so-happy-about-that-tax-refund/ that allows you to enter your tax refund amount and see how much money you’d lose in stock market gains AND if you don’t invest, how much money you could’ve devoted to paying down credit card debt.  Do you feel stupid now?

Many people don’t know enough about how taxes work.  They overpay because they’re afraid of owing the IRS money at the end of the year.  But you don’t have to be scared.  The IRS provides a site where you can calculate how many withholdings you should have: IRS-Withholding-Calculator so that you submit the best case for a neutral tax return.  You can also work with your CPA to ensure you’re not under paying your taxes each month.  Don’t be like the Obama’s.  They over-paid to the tune of $25,641.  See: The Gomez’s saving grace (that’s my family) was that at least we’re NOT paying at the tax rate typical of an “employee.”  Thanks to deductions coming from my real estate business, my personal business: Common Core Money, LLC, and my expenses as an Author (my Educator deduction amount is a joke!), my tax rates were,

Federal Nominal, 15%
Federal Effective, 13.2%

CA Nominal, 6.25%
CA Effective, 3.1%

President Obama paid a bigger piece of his pie.  A total of $146,465 in taxes paid places him in the 33% federal income-tax bracket.  What an American!  He truly does pay his fair share of taxes, maybe even more than his fair share.  Of course he’s not in the business of using the corporate tax code to his personal benefit as is Warren Buffett.  

Buffett is the largest shareholder of Berkshire Hathaway, but because he’s the boss, he gets to decide against any dividends for himself and his shareholders.  He’d be in a world of tax hurt if he did pay himself income in the form of dividends.  Berkshire is also allowed to use tax deferment, meaning, not pay company taxes in anticipation of needing that money to make another acquisition.  And Berkshire acquires many companies.  Owning individual shares of BRK A or B is like having a diversified stock portfolio.  It’s very American for Mr. Buffett to give his billions to charity once he dies; he kind of owes it to America, however, for all the years he has gotten away with not paying his fair share.  Yet this is what he’s asking wealthy Americans to do.  Maybe he should lead by example and stop using Berkshire-Hathaway as his tax saving machine?  It’s not his entire fault.  The IRS gives him a pass.  What about you, friend?  Is the IRS giving you a pass?  No?  Stop being an “employee” with a single source of income then.  Create or buy other business with that extra money you will get once you correct and submit a new W-4.

Thanks for reading!

Monday, April 13, 2015

Target-Date Investors, Lazy But Smart

I knew I was onto something when I wrote, Invest in the stock market in 5 simple steps. My thinking when writing this piece was to make the point that investing in securities (stocks and bonds) doesn’t take intelligence or much effort.  I wrote in the intro paragraph:

“Investing in the stock market is one of the easiest ways of creating wealth over time.  When I say, ‘easy,’ I mean it.  And I think this is where many people get held up, believing it requires intelligence and constant effort.  Yes, I get that in order to invest in the stock market one also needs money.  People may imagine it takes thousands of dollars to get started for it to be worthwhile.  Well it doesn’t.”

Then I gave all of you five simple steps to get started.  Now, I could’ve suggested various stock market investing vehicles, including a Total U.S. Stock Market Fund and a Total U.S. Bond Market Fund.  I could’ve also thrown in the mix a Total Emerging Market Fund and a Total Foreign Fund…etc.  I figured this would just make things over-complicated for the majority of you.  Yet, these investment vehicles are often the ones recommended in financial magazines (Money, Fortune, Kiplinger, e.g.).  “You need a total stock ETF, and a total bond ETF, and…”  No wonder people don’t invest in securities!  I decided to make things as simple as possible because let’s face it, people don’t have time for complexity.  I gave you one investment vehicle, the Target Date Fund, one way to figure out which one you needed by giving you the link to Vanguard’s retirement guide, how to set-up an account online, how to Buy your first shares, and how to Buy subsequent shares on auto-pilot.  I practically did the work for you.
I also advised you how to stay in the market long-term:

But, to do this the right way you need over a decade of time in the market, plus an automatic and periodic investment plan in place, and lots of apathy.  Apathy?  Yeah, like don’t look at it.  If the market tanks, don’t freak out and sell.  Remember that you will be buying shares of your TD fund when the market is low and when the market is high.  Over the course of time, you will come out alright.”

The same day I published this post with this advice, recommending apathy of all things, and forgetting about your investment, Jim Cramer on Mad Money tells his viewers they should “keep an eye on the market” so that they can double down on their automatic investment 401K holdings when the market tanks.  His logic is sound: take advantage of a down market to buy more shares of your investments…you don’t want the same dollar amount committed when the buying opportunities are best.  Makes perfect sense…if you’re a disciplined investor!  It is proven over and over that the mom and pop investor is terrible at timing.  They’ll sell and buy at the wrong times.  And I bet there is a huge correlation between their psychological errors and how often they check their accounts.  After many years of investing, I will execute as Jim Cramer suggests, but most Americans will not.  That is why I suggest you let time, patience, and apathy work in your favor.  And I’m not alone.  Check what came out today, 4/13/15, on


Read between the lines of Morningstar’s 2015 Target-Date Fund Landscape Report and you’ll see tacit permission to be an investor who takes a simplistic, if not lazy, approach to managing money.”
“Typically, target-date funds are the default choice, literally and figuratively, for investors who don’t know how to build a portfolio or an allocation plan, or who don’t want to bother of completing such a chore.”
“All too often, investors only buy a fund after it has been on a hot streak, meaning they buy high. They stop contributing to the fund — or sell it — when performance flags; even if they stay in place, they may not contribute again until performance goes through another good stretch.”
“What is magical is the steady dribble of savings — weekly, bi-weekly or monthly contributions made in all market conditions — and how that adds up over time for people who are not particularly interested in managing their money on a day-to-day or year-to-year basis.”
“Investors who pick target-date funds are hands-off,” said Yang. “We know that hands-on investors tend to have worse performance because they’re moving at the wrong time, which is not surprising because even fund managers have a hard time trying to deliver superior returns.”
“Buy good funds and ride them, rebalancing as needed, adjusting for age over time and you can get the same edge that target-date investors get by showing up regularly and doing nothing more to manage their portfolio when the market gets noisy.” 
Wow.  It’s like I had insider knowledge of this article coming out.  I didn’t of course, but it sure seems this way.  All in all, I’m glad I was able to write a great piece for you that has some professional validation.  Maybe now you will consider investing in securities sooner than later given a proven and simple strategy.
Thanks for reading!  

Sunday, April 12, 2015

A Certificate of Deposit with A Rate Raise Option

In my last post, invest in the stock market in 5 simple steps, my goal was to inspire all of you to get into the stock market.  After reading in an article that 52% of Americans do not participate in the stock market, I saw this huge need to help this segment of our country realize that there's nothing to it, and the risks are mitigated over time, given a decade or more in the market.

As great as I am at inspiring people, I know many readers will still go back to status quo, relying on their savings strategy...which is no strategy at all.  The Certificate of Deposit or CD, is better than putting money in a savings account.  And although it is often referred to as a "Certificate of Depreciation" by investors, especially in a low-interest rate, high inflation environment, there are times when a CD makes a little more sense for people who simply will not enter any market.  This is one of those times.

According to: Usinflationcalculator the rate of inflation was -0.1 for January and 0.0 in February, meaning that "overall" inflation was non-existent.  March's rate is soon to come out.  I would keep this website handy and check back for March's inflation rate and every month there after so you can see how much ahead of inflation you are staying with the CD I'm about to promote (I'm not getting paid to do it...none of these links earn me money).

At Ally Bank you can get a 2-year CD for 1.29%.  There is no minimum deposit!  That's great for many of you who may not have that much money to invest.  You could invest whatever amount of savings you won't need for two years.  Compare Ally to other CD's: 2-year-cd-rates.  You will see that many of these do have deposit minimums.  Ally's rate is not the highest does one better.

Say inflation should rise to 0.5%.  Your effective interest rate now becomes 1.29 - 0.5 or 0.79%.  Well...that sucks!  Your money is growing at a lower rate than you expected (1.29%).  Making matters worse, if CD interest rates should rise, you're stuck powerless holding onto a rate you got in the past.  Or are you?  Not with Ally.  Ally will allow you to get a better rate on your two year CD one time!  Since it is a one-time thing, you want to be smart about when to set your new rate.  If there is an interest rate spike, and within two months of getting your CD you see CD rates at 2.0% with people predicting it will stabilize, I'd call Ally and change my rate. Otherwise, you could simply wait for the one-year anniversary of your CD and do it then.  So you'd get 1.29% for year one and X (new rate) for all of year two.  One last perk with Ally, there are no maintenance or hidden fees.

Savers, take a step up and at minimum have some of your money earning interest.  Your savings account is where money goes to die.  If you're not going to ever invest in the stock market, the least you can do is give the money in your savings account a new lease on life and place it in a CD.  Go with Ally's 2-year CD with one time option to raise.  I like it!  

Thanks for reading!