Money Management – Money Challenges of Today's Youth

We are living in 21-century but most of the old money laws still apply. So, what “old” laws I would like to tell to my kids or relatives who are soon turning 18? What are the money problems or challenges of today's youth?

Here is a list of things which come to my mind. Let’s say, I would be today a very rich man if someone had told these things to me 25 years ago.

Education

Many of today’s millennial's don’t have any common understanding of money. It is frustrating that they don’t teach any personal finance skills in school and it’s even more frustrating if the youngster does not get this very important education from home.

Budget Plan

They have never make any budget what comes to money. They just spend without knowing do they have money to buy stuff or not. This will lead to problems mainly because the interest rates in credit card loans are beneficial for lender not for you!

No goals or destination

It is common that they spend every penny they have. They don’t have any investment plans or goals. For example, they will have 50k$ in stocks when they turn 40 or they 50% left of mortgage.

Time

They think time is on their side and they can start saving a little bit later. Unfortunately, it is another way round due to compounding. Start saving today and invest this money, by doing this you will have much more in the future.

Lack of Knowledge

They will invest into very risky businesses and lose their money. It is true that risk and profit goes hand in hand. So, please remember the diversification. It’s your free lunch.

So, let's take care of our youngsters. Please try to teach them the money management ABC's. I know, it will be hard and painful, but hopefully they will thank us later. :)

Regards,
CVM

please also check my new site:

www.freedomsearcher.com

Investing For Dummies – TOP5 Investing Rules

Hi,

This time I will talk about a little bit about my investing rules. I try to avoid investing mistakes by any means and this is the main reason why I have created these rules to myself. Also, these rules will keep me and my investing strategy discipline and perseverance. If the investor does not have any investing rules, it is quite clear he or she will not reach the full potential of the portfolio.

1st rule; Pay Yourself

My first and probably the most important rule is to pay to myself first and then use the rest of the money to other costs (food, car and etc.). This rule comes from the book called “The richest man in Babylon”. The basic idea is to invest first 10% of your net income to stocks, etf’s, funds and etc and use 90% income to other stuff. People has a bad habit to use everything what they have in their bank account and by doing this (pay first to yourself and then to others) you will automatically adjust your spending into right level and your keep your savings.

2nd rule is: Don’t fear the loosing of the money

The longest time-period has been around 20 years the stock full cover from the recession. This happened a long time ago and cover periods of the last four recessions has been much shorter (around 5 years). Even if the recession would start tomorrow I know that “soon” my stock values will be at same level than today. Also, this recession would be a great time to buy stocks due to low valuation levels.

3rd rule: Please remember to use diversification when creating your portfolio

The max for one stock sector (example finance) is 20% and 5% of one stock. Okey, this “5%” rule applies when your portfolio grows to 6 digits, but when you are dealing with 5 digits or even smaller portfolio, try to remember this 20% rule what comes to sector picking.

4th rule: Create a rule(s) for valuations

Investor should create the rules what he or she will use when picking the stock. For example; stock value should be under 16 p/e or dividend yield should be over 2% and etc. Please study how the most successful investors like Warren Buffett use these valuations and copy.

5th rule: Trust yourself!

When you made the study about your stock and you chose the one to invest, trust yourself and please keep the stock in your portfolio more than one year. After one year, investigate what has happened. You will learn a lot of yourself as an investor and about your investing strategy. Please remember, as daily basis, only 1% of stock owners will decide the stock price. Like Warren Buffett has said; “The stock market is a device for transferring money from the impatient to the patient.”

Please use the comment section below and tell me what are your rules what comes to investing or did you learn something from the list I created, and off course, you are always welcome to copy my rules.

Regards,
CVM

Best Personal Finance Books - My Book Recommendations

To know more than 95% of people you should read the following books I recommend here. By reading the books you will learn:

• You won't be millionaire in one night.
• It takes time, unfortunately quite long, so better start today :)
• Difference between good and bad loan
• Difference between rich, middle-class and poor
• How to maximize your time
• And much more

Here is a list of my favorite books:

Investing Related:

Rich Dad Poor Dad by Robert Kiyosaki

Intelligent Investor by Benjamin Graham

Random Walk Down Wall Street by Burton Malkiel

Self-Help

The 4 Hour Work Week by Tim Ferriss

Tools Of The Titans by Tim Ferriss

How To Friends & Influence People by Dale Carnegie

Happy Reading,

CVM


Please check my new site:

http://freedomsearcher.com/

Money Management - 5 money saving tips you should know

“Financial Freedom Is Available To Those Who Learn About It And Work For It”, this is famous quote from Robert Kiyosaki. First step to your financial freedom is to make a decision and start to work for it. Second step will be to start to saving money and investing those to assets which pays you instead of taking money out of your pockets.
Today I want to share my best tips which I have learn from the book or the hard way. Living paycheck to paycheck can be stressful and hopefully my tips will help you to achieve better money skills.

Make a budget

You need to know where your money goes. You need to have plan which guides your spending and saving habits. You can find good templates from the internet, just modify those a little bit to suit better for you.

Pay yourself first

On the payday, please pay yourself first. At least 10% of the wage and invest this money to stocks, ETF or etc. Also, set a personal goal, for example I want to have 100 000 dollars when I am 50 years old.

Lunch

Don’t buy the canteen lunch. Make a little bit more food day before the workday and eat this instead of expensive canteen lunch. Also, plan the whole week menu to avoid unnecessary purchases.

Buying a non-necessity

In every purchase think twice before buying. What comes to bigger purchases, it would be good think few days before buying and if there is something you really need (e.g. toilet paper), buy it in bulks.

Credit card debt

Pay your credit card off completely every month because the interest rates are very high (~20% ). If you have credit card debt you should pay it off as soon as possible.
Please let me know are you doing the same and what are your favorite saving tips.

Regards,


CVM


Please check also my main site:

http://freedomsearcher.com/2017/08/10/5-money-saving-tips-you-should-know/

Personal Finance - 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

Stock Investing For Dummies - 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

Personal Finance - Monthly Summary; March 2017

March 2017- A bad month

Hi all, it is time for monthly reporting. This was the first full month with the blog and let say, not a good month. Some overrated stocks dropped to correct levels and I made a bad investment what comes to Fingerprint.

Portfolio in € end of FEB 2017

Portfolio Total Sum in February was 13 909,15 €.

Portfolio in € the end of March 2017

Company	Shares	Price (€)	Total sum
KONECRANES PLC	183	33,30 €	6093,90 €
Nordea Bank AB	43	10,72 €	460,96 €
Intrum Justitia AB	36	35,09 €	1 263,30 €
Ocean Yield	136	6,65 €	904,86 €
Austevoll Seafood	95	6,87 €	652,79 €
Norwegian Finans Hol	93	7,42 €	689,77 €
Betsson AB ser. B	110	8,18 €	900,11 €
Verkkokauppa	136	7,28 €	990,08 €
Hoivatilat	125	7,35 €	918,75 €
Albemarle	14	98,81 €	1 383,37 €
		Total Sum	14 257,88 €

The portfolio grew in €’s was around +2,5%, but I acquired 22 Konecranes stocks and lost around 200€ with fingerprint, so total gain was around -4,2%. So, a bad month overall.  But, this is investing and sometimes the stocks goes up and sometimes those go down.

TOPS:

• Albemarle; solid month. Betting high on lithium.
• Intrum Justitia; nice, steady growth.
• Dividends from Nordea, Verkkokauppa and Hoivatilat

FLOPS:

• Case Fingerprint, no more to say, please check my post from few weeks ago.
• Some price pressure of salmon. It has had negative impact to all salmon stocks. Maybe good time to add few shares of Austevoll.
• Norwegian Finans; regulation rules from the Norwegian government, but in the end, these should be good news for NOFI, waiting stock to get back on it’s track. Hopefully after Q1 result.

LOOKING FORWARD:

I will decrease the number of Konecranes stocks at some point. I have read a few books about investing during this month and I think I need to modify my portfolio strategy, and this will not happen fast. I would guess that next picks will be some non-cyclical companies. 

Regards,

CVM