Tuesday, July 11, 2017

Know Your Destination


" To get there you need to know your destination"

This is one of my favorite quote's and I use it a lot in work related tasks and with my personal goals. I really don't understand people who love to wonder around without destination and goals, but you see those quite often. Also, I heard time to time people saying; when I have more this and that, then I will do start to do this and that. To me this sounds like they are wondering around and soon they will be lost or at least they will not achieve their goals.

There is a popular quote in Finland; "money does not grow on trees" and you cannot avoid hearing it. Time to time it is use even by the middle class which should have money. But there is a trick, you just need to check they car and you probably understand why they don't have the money. Like Robert Kiyosaki has said, middle class buy liabilities and rick buy assets. Please check Rich Dad Poor Dad if you haven't.

So, how to avoid all these circumstances? You need to have a plan! Next time when you are starting to think; I cannot afford that one, stop it and turn the thinking around! How can I afford it and is this an asset or liability? And if it is a liability please think twice before buying it.

And how I use these thinking? For example, I have created a plan to my financial freedom. I know exactly how much money I need for retirement or freedom from work. At this stage and with current savings plan my freedom is 25 years away. My goal is to get portfolio to grew up to 600 000€ (~685 000 USD) and with 4% rule I think this is enough for me.


 

So, it took around 10 mins for me to create this plan you can see above. By doing this, it is much more understandable for me what I need to do and how much I need to save. This is only an one example, but you can use this ideology in many other topics and tasks when you think a little bit outside the box.

Happy Summer!

Regards,

CVM

Tuesday, July 4, 2017

Tips from Warren and how I use those




Hi All,

I have always been a big fan of Warren Buffett. Mainly because he can put investing strategies in simple and understandable form and his personal investing strategy is quite similar what I am looking after. Today I want to share some his tips and how I use those in my daily life.
  
1. Index Funds
 

This is to best way to investing for somebody who does not follow stocks daily or just want to invest with a low risk. I thinking also add some small cap indexes to my portfolio, but for now I haven’t. because there are some disadvantages what comes to tax planning (at least in Finland).
 
2. Compounding
 
One of my favorite quote from Warren is: “Someone's sitting in the shade today because someone planted a tree a long time ago".  Everybody should understand that there is no “quick money” what comes to stocks. The investing strategy should be close to hibernation. 
 
      3. Hold the stock
 
Only buy stocks which you can own for lifetime. The company needs to be dealing in business sector which is still alive in 30 years. Also, I have one personal rule here, only buy business which have several products. There is a change that the company is one hit wonder…

      4. Invest in yourself

      This was something I didn’t do let’s say five years ago, I just was happy in a situation what I was having. But for some reason I interested in investing and start to invest to myself as well. But this time I didn’t bought more gadgets but I bought books, started to watch educational videos and really started to think differently.  

       5. Trust yourselves

      In the early phase, I checked the value of stocks hourly and my heart beat increased when I saw red figures. But nowadays I know that 48% of time I see red figures and this is part of the game. Just stay cool and trust yourself! 

Hopefully these comments and ideas helps you understand a little bit better the game of investing and how the comments from Warren have helped me to get confidence when dealing with stocks. Also, it would be good if you find somebody who share the same ideology, because when you talk about these topics with somebody you will learn a lot of faster. 

Regards,

CVM

Wednesday, June 28, 2017

Tips For My Kids




Hi,

Today I will talk about a little bit about kids and money. I have two young boys and time to time I have thought about this topic; How I will teach the 8th wonder of world, different between good and bad loan, and etc. to them. There are some rules about money which my parents taught to me, but nothing related to stocks and power of compounding. So, I want to give them a little bit smoother start if they want to have it.

I found an article about this topic and I decided to wrote my TOP5 list about the topics which are important to me as a father and which are the rules and hints I want to teach to my kids:

1. Value

The purpose of lesson 1 is to learn value of money. How much you get candy if you have one euro or one dollar; one candy or two candies or the whole bag of candy?
  
2.  Patience 
 
With a patience, I mostly mean power of compounding. I have already talk about this in my blog, but the idea is; use a little bit less today and get much more back in the future.

3. Be the Bank 

What is interest and how it will impact to future salaries and purchasing power. What is the difference between good and bad loan. 

4. Weekly Money

At some point, I will start to give weekly money to my kids. This will be the money they can use to buy something from themselves, candy, toys and etc. Also, I want to create a rule that at least 10% of this money will be saved. They will learn the rule; pay yourself first and then for others. 

5. Hard Way

Okey, this is a likely scenario for sure with some topics 😀 They just need to learn some aspects by the hard way.

This is like an additional topic, but it would be nice they want to read at least one book about investing and money. And if they would only read one book it would be: A Random Walk down Wall Street by Burton G. Malkiel. At least this was the "eye-opener" for me.

What will be your tips for your kids or what those were? Please share your ideas in the comment section!

Have a great summer,
Regards,
CVM