Tuesday, October 27, 2015

10 Ways to Save On Halloween

Welcome amigos!  Today I have a spoooky piece of financial literacy for you.  It's my Halloween edition of frugality.  People really get into Halloween, especially young people.  But even seasoned adults can often over do the festivities, and wake up on the first day of November with a money depletion hangover to go along with the alcoholic induced one.

You can do Halloween all out.  People just don't care about how much they spend on this holiday; they simply want to make it memorable and fun.  So they will do things like buy 2015 costumes...e.g...be The Martian with a state of the art space suit.  Or they will host a party at their home and invite all of their friends.  This can get costly.  So can going to your city's downtown and bar hopping, sharing the experience of checking out people's costumes with buddies.  If this is what you have planned for this 31st, I say to you: Hold!

For the sake of you making it financially to November 30th, consider altering your plans or doing some of the things below:

1.  Make your own costumes.  I suggest, The Walking Dead.  Zombies are in, and all you have to do is buy dark face paint, fake blood, sprinkle dirt on your clothes, maybe tear them, and make sure your hair is disheveled.  Alternative and less expensive costume: A ghost.  Get that white bed sheet and cut holes where your eyes go.

2.  Have a place to go, like a free community event.  Or turn off the lights.  You'll save on paying for candy.

3.  Don't buy pet costumes.  C'mon...it's cute and all, but it's also expensive!

4.  Go to consignment or thrift stores and look for props, or clothing you can use for your child's costume.

5.  Buy cheap candy.  If you will hand out candy, buy it at places like Walmart or a warehouse club like Costco (bulk).  I always find candy to be more expensive at the supermarket.  Chocolates always cost more than do suckers, and Tootsie rolls.  Candy corn for everyone!

6.  Do not deck out your house.  Making it into a veritable house of horros will set you back.  Sure it is loads of fun, but you may need to forego on this.  However, if you must spook out your home, buy decorations at party stores.

7.  The Dollar Store or Dollar Tree.  Go here for the fake blood and face paint.  Plus you can get arts and crafts supplies at these spots a whole lot cheaper.  Glow sticks!  Flashlights for walking at night!

8.  Buy your pumpkins on October 31st.  They may not be the pick of the patch, but they will be cheaper.  Go to town on making your Jack-o-lanterns with October 31st pumpkins, not a day sooner!

9.  Use a reusable bag or pillow case as a candy bag.

10.  Get yourself invited to a Halloween party, especially one that does not require you to BYOB (Bring Your Own Booze).  If it's a family event, then even better.  You can feed your kids for free on Halloween and save an evening of food for dinner on November 1st instead.

There you have it.  Halloween is around the corner.  Use these ten savings strategies to enjoy it even more, my money conscious friends!  See you next time.  

Saturday, October 24, 2015

Schooling Trends to Get Your Child And Business In Front Of

Welcome amigos!  Today's financial literacy installment is on the schooling trends you will want your child in front of, meaning, to be a part of.  It's also a post to inspire entrepreneurs or professionals to brainstorm ways to get in on the huge market this new schooling trend will provide.

I just got back from a Saturday student Leadership and S.T.E.M. conference.  Science, Technology, Engineering, and Mathematics (STEM) is not new as I have talked about it before on this blog.  I'm finally noticing the push for more students to be exposed to tech and engineering within their traditional science and math classes, and this is a good thing.  It's no surprise, however, that some schools are not keeping up with others at infusing their curriculum with the content of the future.

That's why today I'm calling on you to look out for your child, and enroll him/her at a magnet school that focuses on STEM.  Although I am in favor of other magnet specialties, e.g., health education, the arts, and so on, I cannot stress how important it will be for your child to have a solid foundation in STEM and the thinking strategies STEM courses instill in students.

Today's world is showing us its hand, like a poker player after a series of bets, and it is decisively in favor of STEM jobs.  A renaissance is happening in many job sectors, changing how things are made, sold, and shipped.  Low-skilled jobs are being replaced by programs and robots.  Innovation is the key to survival in the U.S. these days and will be more so five, ten, and so on, years from now.

At the conference I attended, I met a gentleman who created a yet to be released tech product (I am not going to be the one to share it with the world) that allows students to do basic programming, and execute a visual command on a circuit board.  I found his product to be great for computer science teachers both at the middle and high school setting.  The kids who were first to try it out seemed comfortable and engaged the entire time.

Schools will have a hard time finding computer science teachers, and teachers with industry experience in math and science.  I am a science teacher with a Bachelor of Science degree from UCSB so I was trained to work in the lab.  However, I haven't done so since my college days.  You see the STEM gap there?  I need to be connected with scientists and programs that give teachers the training they need to insert the latest industry technologies into the classroom.

As a consumer of public education, it is your job (mom and dad) to find the schools with teacher professionals that are best equipped at delivering STEM curriculum.  You will most likely find them in Tech based magnet schools.  Enroll your child in one of these...trust me!

As for professionals also looking to branch out.  If you have a STEM job, this is your chance to help schools build their ever growing curriculum.  Our computer science, science, and math teachers will need the material and means to deliver a quality STEM education.  District leaders will be shopping around, believe me, looking for the cheapest, yet best available programs, gadgets, etc., to get in bulk for schools.  That's going to be the key.  So don't go out there and create a $5,000 3D printer to sell.  Instead, find a way to make a $300 3D printer with the same functionality as one that costs $5,000.  You will be a billionaire!

We will need micropipettes, and other micro scale organic chem stuff at a fraction of the cost universities pay.  If you can be the low-cost leader in STEM equipment for middle and high school students, you will be a billionaire too!  Finally, if you can create programming software that simplifies coding or makes it practical like in robotics, you will be a filthy rich person because schools will eat it up.

I'd like to make myself personally available to any company out there that is in need of an education professional with business know-how, and who is also science trained.  If I can be of help to you, please don't hesitate to email.  Great schooling is my number one priority!

Until next time.  Thanks for reading and don't forget to join my community before you leave by subscribing.       

Wednesday, October 21, 2015

5 Retirement Options for People Without Savings

Welcome amigos!  Today's financial literacy piece is on retirement.  The word, "retirement," has become synonymous with the word, "boogeyman" these days.  I mean...can it get any more depressing?  Today on yahoo: The 401k crisis is getting worse.  If you've not yet read it, don't waste your time now.  (Nothing we didn't already know).  And look at this shocking headline...another article at Yahoo today: Today's college graduates might not retire till age 75.  Great, right?

I don't know about you, but I'm certainly tired of reading about the inability to retire at a decent age.  By decent, I mean 62.  And I'm equally repulsed by the myriad number of articles suggesting "saving more" or "working longer" as the only solutions.  Duh!

It'll be a cold day in hell if I allow myself to work one day past 55.75 years of age.  I don't care what my financial situation will be at the time.  I've set my mind to end my years as a classroom teacher at that age.

You may be asking yourself, "Well, how you gonna do that, Carlos?  What if your financial advisor tells you that you don't have enough to last you until you pass away?"  I've thought about that exact scenario many times and have come-up with some possible solutions to a lack of savings (for retirement) situation.  I'd like to share them with you.  And no, not a one includes..."save more money" or "work longer."  They are in no particular order:

1.  Find a commune.  Here are the top 10 "Experimental Towns and Communes" in the world.  Some are in the U.S.!  Top Ten Communes.  You'll still be working, but not a traditional job.  Instead, your work will help the community continue to thrive.

2.  Downsize to a trailer home.  Yes, you are told to sell your McMansion and downsize to a small, low upkeep home.  Skip that!  If you really don't have retirement savings, buy a trailor home in the cheapest park (low rent for your space) you can find in your state.  Just make sure it meets your live-ability criteria.  Yearly housing expenses are a huge hit to your retirement savings, so make your money go further by living at a trailer park.  Some of these homes are really nice! 

3.  Rent a room at your child's house.  Let's be real...in this country, the wealth gap is out of control and we're a wake-up call away from all hell breaking loose.  That's many, many, many, unhappy people angry at a few, and I mean, few, people.  So chances are your child will need a little extra money to pay down their rent or mortgage.  Why not rent a room from them?

4.  Start scouting out third world countries.  I have!  I'm looking at Belize, Ecuador, Panama, Costa Rica, and Mexico to move to once I retire.  With dual citizenship, I can own a home in Mexico.  Although I may just rent a nice place near the ocean somewhere on the Pacific.  Don't worry about being immersed in a new culture.  American expats have been colonizing these countries for years!  They celebrate the 4th of July in Costa Rica!  Not kidding.  Renounce your American citizenship and you won't have to pay taxes each year.  Taxes in America are Un-American!  Do like these 1,300 plus Americans who gave up their citizenship in the first quarter of this year: New un-American Record.

5.  Find senior retirement housing.  There are communities in cities and towns all over America that rent homes specifically to seniors at a discount.  Rents are below-market value and there may be additional perks in store (use of a gym, e.g.) depending on the community.  Again, housing will be your biggest expense so seek to minimize the damage each month.

Well, these are the alternatives I have to the suggestions of "saving more" and "working longer."  I know this is not what most of us want to hear.  If you have an open mind, the five suggestions above may become something you really take into consideration.  Depending on your age, you may have some time to let the 5 options sink in and prepare yourself.  Or you could just work longer, work yourself to death, and not worry about retirement.

You guys got any other ideas for this problem you want to share with the rest of us?  Comment below.

Thanks for reading!  Until next time.  Please subscribe to this blog on your way out.  

Friday, October 16, 2015

How To Analyze Stocks

Welcome amigos!  This next financial literacy piece is on how I evaluate or analyze stocks for purchase consideration.  Every investor should have metrics for measuring the quality of an investment, and this includes shares of common stock for sale on the U.S. stock exchange.  I happen to enjoy doing my due diligence on a potential stock to add to my portfolio.  It's fun!  Some people would rather go off someone else's research or "tip."

Top Growth Stocks For June

For example, there are many main street investors who watch Mad Money and would rather have Jim Cramer recommend a stock purchase.  That may be because they trust Mr. Cramer's analysis, have had one or two of Cramer's stock picks pan out and feel he's a winning horse, or they simply do not know how to do the analysis on their own and need someone else to do it.  I must admit, Cramer has steered me into at least looking into a particular stock or two, but his picks usually do not fit my own criteria.

First, let me share where I get my stock ideas.  I subscribe to Barron's magazine, and they provide stock ideas every week.  I prefer the information I get from Barron's over any other media source because they have great analysts who follow companies and know how to convey their research in well-written articles.  Stock ideas are just the beginning.  If I like a story, so to speak, I then look outside of Barron's for additional information, and to construct a profile of a stock.  My stock profiles include fundamental analysis data like:

1.  A stock's Price to Earning's ratio, or, P/E, in context with that of direct competitors.  For example, United Technologies Corporation's (UTX) P/E versus that of Honeywell (HON).  Keep in mind that though they may be in the same sector (in the previous example both are, "Industrials"), the comparison may not be apples to apples.

2.  The Price to Earning to Growth or PEG ratio.  I give more credence to the PEG ratio than I do a stock's PE ratio because the former takes into account the earning's growth rate of a company.  Again, I compare the PEG ratio in context, i.e., in a matrix with that of those of other competitor's.  For example, Ford (F) has a PEG ratio of 0.41.  GM has a PEG ratio of 0.33.  Ford (F) has a higher PE than GM, 16.5 versus 12.24, so on a P/E basis, Ford is substantially better...on the brink of being a growth stock.  The PEG ratio paints a different story.  GM may be the more undervalued of the two with a lower PEG ratio.  End of year earnings estimates must be examined for a more thorough analysis.

3.  Growth Estimates are just that...estimates.  Nonetheless, they are useful to get a vibe of a company's future earnings performance as predicted by multiple analysts.  Using GM versus Ford again, and the Analyst Estimates page on Yahoo: GM+Analyst+Estimates, we see that GM's "Growth Estimate" for next year is 16.30%.  Ford's "Growth Estimate" for next year is 13.50%.  Although the 5-year Growth Estimate is available, looking at what analysts believe about the next five years is pretty much a waste of time.  Looking that far out into the future is pointless as no one can prognosticate with any realistic measure of certainty beyond a year.  But back to the Ford versus GM comparison.  Once again, the growth estimate validates GM being a better option for investors.

4.  Management Effectiveness.  To look at how company leaders are running the ship, I look at Return on Assets, Return on Equity, and Return on Capital.  For these, I like to use MSN-Money.  Here are the returns for Ford: Money/stockdetails/analysis/F.  I glanced at GM return metrics and with the exception of Return on Equity, GM is again the victor.

5.  Cash.  Ignoring how much cash a company has available, i.e., in its coffers is a recipe for losing money.  Ford's "Free Cash Flow" at end of 2014 as Money/stockdetails/financials/F.NYS reports is 7.044 billion.  GM's was 2.967 billion.  Should GM investors be worried when taking Ford's free cash flow into comparison?  Not necessarily...

6.  Debt!  The Current Ratio is my go to window when I want to see how capable or incapable a company is in fulfilling its short-term and long-term obligations.  Essentially the current ratio is a measure of a company's financial health and whatever it happens to be, you want it to be close to the industry average.  GM's CR is 1.22, below the industry average of 1.27.  Ford's CR is 3.03...whoa!  No before you go dumping all of your Ford stock, you may want to dig deeper.  Is Ford more levered for a reason?

7.  The story.  This is a non-numerical, i.e., an intangible that I like to look for in a company's released statements and conference calls.  What are the company leaders saying about the company's future?  Are they up-beat?  Do they sound passionate and positive about changes they've made...e.g. cutting costs, spending more on R & D, buying back shares, and so on?  Or are they playing the blame game when they miss on a quarter?  You can tell a lot about a company's management from listening to a CEO on a conference call...so don't tune these out!

Okay, there you have it.  This is how I analyze stocks at a rudimentary level.  A more sophisticated approach would be to attempt to determine a company's intrinsic value in its shares.  The discounted cash-flow method requires the use of Excel, but it can provide you with additional insight others may not have.

Thanks for reading!  See you back here soon.  Don't forget to subscribe to this blog on your way out.    

Tuesday, October 13, 2015

7 Books to Teach You How to Invest in Stocks

Welcome amigos to another financial literacy installment here at CCM blog.  For you today I have the books I credit with my success as a stock market investor.  Unless you have a parent that has been a stock market investor for a long time, or is in the financial industry, most of us will need to learn how to make money in the stock market the conventional way, by teaching ourselves.

A library card and frequent visits to Barnes and Noble was my approach.  There were some titles that were referenced over and over in trade books on stock market investing, and these I wrote down for further inspection as they were not always available for check-out.  When I couldn't find books for sale at reasonable prices at Barnes and Noble, I relied on the Internet, namely, Amazon and Ebay.

The seven titles I have for you here today are too valuable not to own.  I may have started by reading them for free, but I then got my own copies for my investment library.  They are what I consider to be essential to anyone's collection.  They are meant to be passed down to your children, and so your children can pass them down to their children.  That's how much I esteem these books and their authors.

My personal stock market investing philosophy includes finding "value" stocks and "value-contrarian" hybrid stocks.    I have never been a "growth" stock investor.  If you are familiar with these books, you will see why I have adopted my current style.  Here they are without further delay:

1.  All About Stocks: The Easy Way to Get Started, Third Edition, by Esme Faerber.  From this book I learned all of the terms, simple math concepts, and basics of investing in stocks.  It is a survey book that is practical and hands-on.

2.  Security Analysis: Sixth Edition, by Benjamin Graham and David L. Dodd.  This may as well be the Bible of investing in securities (stocks and bonds).  It is over 730 plus pages of pure brilliance by the Masters of value investing.

3.  The Intelligent Investor: The Definitive Book on Value Investing, by Benjamin Graham.  Another Benjamin Graham masterpiece.  Don't even begin to think about investing in individual company stock without first having read this book.

4.  What I Learned Losing A Million Dollars by Jim Paul and Brendan Moynihan.  A commodities trader relates his rise, and erroneous mindset that led him to make some epic mistakes on the job.  But the lessons he learned along the way are extremely helpful to readers.

5.  Beating the Street, by Peter Lynch.  These are some of the best personal anecdotes from a stock picking legend.  If you prefer investments in mutual funds, this is your book.  Find another Peter Lynch (if even possible) and ride it out!

6.  The Little Book That Beats The Market, by Joel Greenblatt.  If you ever want a method for investing in stocks, this is your book.  Mr. Greenblatt's system for stock picking is presented with simplicity.  The easiest book to read out of this collection.

7.  The Most Important Thing Illuminated, by Howard Marks.  The most elucidating book on risk I have ever read.  There's more of course, but this expounding on risk is what makes this a special book on stock investing.

Seven great books to pick up and read as soon as possible if you are serious about making money in the stock market.  They have set my foundation on solid ground and I'm 100% confident they will do the same for you.

Take care amigos!  See you next time.  If you liked this post, please don't leave without subscribing to this blog.    

Saturday, October 10, 2015

When Mr. Market Makes A Fool of You

Welcome everyone!  Today I have another financial literacy tale for you involving the all mighty U.S. stock market.  What I appreciate the most about being a stock market investor is that try as I may to understand the market, it always finds a way to fool me.  I believe the expression, "fool me once...shame on you...fool me twice...shame on me," is never applicable when it comes to investing in U.S. equities simply because nothing is ever predictable, and experience gained investing simply allows you to better understand your mistakes.

Take the case of my most recent trade, selling 50 shares of Actuant (ATU) stock.  I published a post on the 5th of this month: How Best to Minimize Losses on Stock Trades, touting my ability to minimize capital losses on an investment in the red.  Let me put things into perspective once again.  On September 29th, ATU closed for the day at $17.57.  My cost basis for the nearly three hundred shares of the stock I owned was at $22.50.  I was down a little under three points per share on the stock, a good sum.  Jessica, my wife, had asked me to liquidate shares (our emergency fund is fully invested within our Brokerage account) in preparation for our property taxes.  Now, she did not have a gun to my head, and really, I am in complete control of our investing decisions.  So there was no rush to get out.  Property taxes aren't due until December 10th in California.

The setting for the next couple of days in the market was typical, more volatility.  ATU settled at $18.39 on September 30th, and at $18.73 on the first of the month.  O.k., I'm seeing three days of upward stock price action on ATU and I'm liking it.  The overall market is also starting to get the attention of investors and the beginning of a week long rally rears its pretty face.  No one knows at the time where the market will go...remember the previous week (and month) had been a red fest with the volatility index working out like a hot lady at Zumba.

On October the 5th before market opened, I took a look at the Yahoo stock page for ATU and see that the 1-year target estimate is $20.50.  I wished I hadn't done that.  It primed my mind.  What happens to ATU on that day would have made anyone who bought on Friday, 10/2, consider unloading it for a quick, one day, 10% payday.  The stock closed at $20.80!  My premise on that day was that surely, after three days of rallying, investors would begin to take profits, leveling ATU stock.  Believing this was the peak before another lull in the stock, or even a small descent, I decided to sell 50 shares at $20.76 to raise the $1K I needed for property taxes.  I lost $225 on the trade as some of my most expensive shares were first out (FIFO...First In, First Out).  I felt good at the time.

And then...the humbling experience began.  On 10/6, ATU closed at $21.28.  On 10/7, the darn thing closed at $21.69.  I felt like Homer Simpson, hitting myself in the head for the bonehead move of having sold any of my shares of the stock.  I'd lost almost a buck per share for being "tactical."  The stock market is known for adding salt to all wounds, and of course, ATU rallied some more, closing at $23.61 on 10/8!  For you math folks, that represent a 34% rally in the stock on 7 days of trading.  A market rally fueled by the belief that the Fed will not be raising interest rates after a dismal jobs number, and who knows what else, helped to spur an appetite for investing in industrials of all sizes, but especially for shares of ATU, already full of potential after an excellent quarter report.     

What I learned:

From this experience, I learned not to be so hard on myself.  Yes, I lost money, but on the bright side, the remaining stake I own in ATU is finally back in the green!  My process of exiting a position (in installments) saved me from future losses.

I also learned that Mr. Market is crazy!  You can't reason with him.  You can't expect him to do what you think is most logical.  In fact, logic shouldn't even be in the same sentence as Mr. Market.  The best one can do is to work with Mr. Market, whatever his daily whims.

Thanks for reading!  May you be having as much fun in the market as I am.  Until next time.

Monday, October 5, 2015

How Best to Minimize Losses on Stock Trades

Welcome back everyone!  Today's financial literacy installment deals with selling shares of stock for a loss, and how best to do it so that capital losses are minimized.  I believe I have shared on this blog several times that I keep my so called, "emergency fund," almost fully invested at all times.  I hardly ever keep a bunch of cash on hand; perhaps less than 10% of my emergency fund is cash liquid.  It's a strategy that has been gaining more acceptance as of late.  Here's a great article on not following conventional emergency fund wisdom by the good people at Betterment.com: Safety Net Funds:...

Back in August, I shared I had been notified by the property management company I use to take care of my three out of state rentals that a tree on one of my properties needed to be cut down.  See: Ask these 6 questions when buying an out of state rental.  This was one of those obviously unexpected expenses, and it set me back over $2500!  The rents covered most of it; however, I had to stroke three mortgage payments in September.  Enter the need to sell stock.

The timing could not have been any worse.  I mean, September was an awful month for stock market investors.  One of my positions, McDermott (MDR) was trading within a narrow range ($4.52-$4.54) that was three quarters of a point from my cost basis.  This is a five dollar stock so that was quite significant at the time.  I had made up my mind to wait for a rally day, and one was sure to come along with all of the volatility in the market, to sell all 310 shares of MDR as close to my cost basis as possible.  I wouldn't have sold a single share of MDR if I did not have to.  The tree situation forced me into a liquidation event to raise the money I needed to cover my monthly expenses, including my three rental property mortgages.

On September 17, the market rallied.  The price action at the time gave me a sense of a potential intraday top for the stock.  I used a limit order with an asking price of $5.23, only 6.5 cents from being even with my cost basis.  The trade was executed.  At close, the stock settled at $5.12 so my trade was a good one.  I lost money on this stock.  A grand total of $20.17.  Considering that MDR closed at $3.46 on August 26th, this mere $20 hit to my portfolio was a huge victory for me.

It's property tax season and for a home owner like me without a monthly escrow account drawing funds, making the bi-annual payments is challenging.  April's installment is the easiest to make.  I use my tax refund money to take care of April's first half of the annual total.  Whatever cash I have left over, I transfer it to my Brokerage account, my "emergency fund," and invest with it.  Risky, yes.  This year I started a position in Actuant (ATU) stock.  My plan is to hold until 2016 when the stock and company is slated to outperform as economic conditions improve.  However, I had to sell shares to raise money to pay for December's property tax installment.

Again, I waited for a market rally day and daily monitoring of the stock to attempt to get as close to my cost basis ($22.50) as possible before selling some shares for a loss.  Now, this stock has beat the past two quarters, giving me a nice uptrend as new investors piled in.  Today the stock was up over 9% when I first took a look at it early in the morning.  Using a limit order, I set my asking price for $20.76.  The trade executed later in the day.  I sold 50 shares, losing $225.72 in the process.

Investing in the stock market is a mental endeavor.  As an investor, you have to understand how to work with any type of market: up, sideways, or down.  You also have to master the difficult skill of minimizing your losses when you are forced to sell, i.e., when you need to liquidate to cover your business or personal expenses.  I have shared with you two trades where I lost money.  Why?  To teach you how to approach a tough spot (needing to liquidate) without emotion or haste.  Losing the least amount of money is just as much of a skill as making as much money as possible.  By waiting for a rally day, estimating price action, setting a limit order, and grabbing an intraday high, you will get the most upside of a losing trade and live to fight another day!

Thanks for reading.  See you next time!      

Friday, October 2, 2015

How Millennials Can Pull Up From Their Uncontrolled Descent

Hello there!  Welcome to another installment of CCM blog.  Today's financial literacy lesson is inspired by a recent article I found on Yahoo.com: Young Americans are giving up on getting rich.  Yikes!  I personally think we have all been exposed way too much to the Millennial economic plight.  We can thank the media for making us all depressed, providing non-stop coverage of Millennials' woes.

Is anyone out there trying to help Millennials?  Certainly.  There are a slew of financial bloggers like me readily posting financial tips and suggestions these youngsters can use to better their circumstances...all for naught.  You see, it dawned on me that there are deep seated emotional issues that only live within Millennials, making them especially resistant to doing anything with any form of financial advice.  These are as follows:

1.  Millennials feel as if their success is entirely up to themselves.  They feel a camaraderie knowing others like them are in the same plane falling from the sky, and this makes them believe this situation is "normal."

2.  They are petrified with fear.  The media and people in general have created this context of failure among Millennials that is sort of like a science "textbook," difficult to question.  We have pinned a failure button on Millennials for going to college and racking up debt.  We have made them feel stupid for shelling out what we believe to be way too much for an education.  In turn, Millennials have internalized this sentiment, chalked it up as a huge mistake, and now are completely risk averse.

3.  They have developed a strong sense of learned helplessness.  That uncontrolled plane descent Millennials feel they are in, by virtue of being inundated with economic signals of lack of opportunity and potential financial pay-off, are like electric shocks.  They'd rather plunge then get up out of their seats and look for a parachute.

How can Millennials pilot themselves out of their dire straits?    

The individualism that was the hallmark of the 20th century cannot be copied in our 21st century economy.  The money that was once more evenly distributed has trickled up into the hands of fewer and fewer people over the last fifty years.  Therefore, Millennials must understand that in order to be financially successful, they have to team up with like minds and pool resources, networks (social capital), and brain power.  This of course would result in shared equity, but given the alternative, trying to start a business, create a product, e.g., solo, is a lot more difficult to do alone.

Focus on the future and not the past.  College loan debt is a huge reminder of a financial "mistake" that was made in the past.  Millennials must shift their way of thinking about this.  They also need to stop wasting mental energy on the obvious, and focus on innovating ways to become successful, money aside.  Put the horse before the cart!  It sounds like awful advice, but if you don't mind your goals and aspirations, they will not mind you.  Don't settle for a decent paying job and a steady salary, shutting down you entrepreneur imagination, and expect to get out of your college debt hole.

Be counterintuitive.  Fear of the unknown must be tamed, and be put in its place by you.  Investing in higher risk assets like stocks must be as customary and painless as putting on your pants each day.  It is insane to think that you will get out of your financial mess avoiding free markets, the bedrock of capitalism, and other investment chances...chances you may never get again.

Alright Millennials...it is time to rewrite your script and pull up on the steering control.  Don't do the same thing every day and expect to get out of your mom's house.  Innovate, create, and entrepreneur yourself to a new you.

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