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

Money Management - 7 Hobbies You Can Afford

Having a hobby can be very expensive. The costs can rise over four digits per month easily in certain sports. The costs are coming from rent, interval of practices and training costs. For example, ice-hockey, horse riding and figure skating are very expensive. I have two kids and am just hoping that their hobby selection would be from the cheap end :)

Off course you can watch TV all day long or play free games with your tablet or mobile phone, but at least for me these are not "free hobbies" even though those might be free. It would be beneficial for you if you would skip the TV today and you would go outside for having some fun and sweat :)

So, what could be a hobby which does not cost much? Here are my findings:

Reading

You can borrow a book from the library for free. Nowadays you can also use google play store or other similar provider which offers some books for free.

Learning a Language

You can borrow a book from the library or use internet based cheap learning programs, like duolingo, memrise or hellotalk.

Body Weight Fitness

Just go outside, you can go running, cycling or do muscle exercises to which you use your own body weight.

Drawing

Every has a pen and paper?

Writing / Blogging

You can start a blog at no cost at all. You can use free platform providers like blogspot or wordpress. If you want to have own website, prices start at 4-5 €/$ per month. Cheapest host is BlueHost.

Cooking

Making your own food is much cheaper than eating in restaurants. You can also prepare next day lunch, so you can skip the canteen lunch.

Programming

This needs a little bit skills but you can learn programming skills almost at no cost. You can also turn this to profit by making your own apps and programs.

Have fun with your new hobbies,

CVM

Please check my latest post on my new site:

http://freedomsearcher.com/2017/08/14/7-hobbies-you-can-afford/

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 - 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 8^th 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

Personal Finance - Monthly Summary; June 2017

Monthly Summary

Hi all, it’s been a while since my last post. It has been quite busy spring time, mainly with work related topics and some home renovation things, so I haven’t had time to update the blog. Sorry about that one.   

The portfolio has changed a lot during past 3 months. Mainly because I have decrease number of KC shares and put more diversification to portfolio.

Portfolio in € 21th of June 2017

Portfolio Total Sum in June was 16 106,26 €. So, the increase from March has been +13%. This growth is mainly due to purchases not so much about stock price increase.

Portfolio in € 21th of June 2017

KONECRANES PLC                      120                      39,28 €              4 713,60 €

Nordea Bank AB (publ) FDR    43                        11,34 €              487,62 €

Intrum Justitia AB                       36                        31,82 €              1 145,58 €

Austevoll Seafood                     95                        8,01 €                760,56 €

Norwegian Finans Holding      93                        8,08 €                751,90 €

Betsson AB ser. B                       110                      7,78 €                855,65 €

Verkkokauppa                              136                      8,10 €                1 101,60 €

Hoivatilat                                       125                      7,93 €                991,25 €

Albemarle                                     14                        96,58 €              1 352,06 €

UPS                                                  11                        98,25 €              1 080,77 €

JCI                                                    26                        37,66 €              979,08 €

SCA-B                                              30                        6,589802716    197,69 €

PZE                                                   31                        30,08246683    932,56 €

Essity                                               30                        25,21137586    756,34 €

                                                                                      

                                                                                       Total Sum         16 106,26 €

This time I will not list the TOP and FLOPS. Mainly because so much has happened during this few months I have been away. The main TOP has been that I have purchased more stocks with my savings :)

LOOKING FORWARD:

The summer time will be quite busy time for me and I would guess that I don’t have time to investigate stocks. The main thing is that money works for me in the market.

Regards,

CVM