Choosing A Broker Over Boots…

Posted on October 19, 2011 by Marci O'Connor

Sometimes the hardest part about investing is knowing where to begin. And the starting point for each person will be different.

For some, it will include a plan to pay down debts in order to start investing later on. For others, the funds may be there (in varying degrees) but the confidence will not.

Either way, I think most of us see, that in order to have financial security (however we choose to define that), we must build our own wealth.

For me, this awareness has been bittersweet. On the one hand, it means my husband and I have made some specific (and hopefully lucrative) changes to how we approach our finances.

On the other hand, it means I can no longer responsibly write a post about *investing* in a great pair of boots.

Or *investing* in a day at a spa…sigh…

It doesn’t mean I won’t continue to enjoy these things, it just means I will own up to what they really are: blissful bubbly happy indulgences rather than *investments*.  I think it comes down to owning up: There is nothing wrong with buying the extra cardigan because you cannot decide between the teal or the honeysuckle (really, there is not!!) but you don’t get to call it anything other than what it is: a splurge.

Likewise for investing: I have to own up to the fact, that for me, I have a long way to go before I am comfortable managing my own investments, and in the meantime, I require help.

So I know enough to know that I can’t call my new knee high black soft as butta leather boots an investment but I also know I cannot manage my finances alone.

Hence the need to learn about brokers. I am not convinced this is the route we will go, but learning about the difference options is all part of the process. And as always, mint.com makes it easy. The following is an infographic describing the various paths you can take when deciding what type of broker best suited to your needs. It is a simple yet useful approach to understanding the various levels of service available.

Have you ever used a broker? What type of experience did you have?

courtesy of mint.com

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Should We Invest in Diapers?

Posted on October 4, 2011 by Marci O'Connor

Oh Crap. Really.

You know we are in serious sh*t when diaper sales are going down and diaper-rash ointments are rising.

Because according to the Wall Street Journal, as the economy tightens that is exactly what is happening as more families are finding it increasingly difficult to provide even the essentials.

Things like diapers. Which can lead to higher rates of angry red diaper rash, hence the increase of sales in diaper rash cream.

And here I am talking about investment finance and the stock market. Shame on me, right?

How (and why) can we even address investing in this new reality?

Writer Hannah Karp writes, ” a growing number of parents…must choose between buying diapers and paying for food and heat”…”Proctor and Gamble (P&G) also suggests that parents are also potty training children earlier to save cash as economic uncertainty deepens.”

Prematurely potty-training out of necessity?

I am not even sure I can properly comprehend that properly.

In my culture we don’t bring any baby items into the house until after the baby has safely arrived. Which suited me fine. I was too busy Being pregnant.  I simply could not plan for a future of shriveled up umbilical cords or school yard bullies – my energy was devoted exclusively to wishing baby well – ok, that and timing my next vanilla milkshake.

Same goes for investment finance. Our daily obligations are important and overwhelming enough. Sometimes there is simply not enough time – and more importantly, resources – left over to even contemplate our financial futures.

So the question is: Is there a place for investment finance in our lives today?

The answer has to be yes.  Essentially, investing is just a way to manage (and grow) your savings. It doesn’t matter if it is $10 a week or $1000 –  investing provides hope for a manageable future.

“Experts” agree that the stock market is among the only ways for the average person to gain wealth, beyond wage earning. So, that means that for average person to be able to pay off debt sooner, save for retirement or simply buy their baby some diapers, they absolutely need to be invested.

So, I am asking you reader:  What is your financial lifestyle? What can we discuss that would be relevant and of real value?

[For full disclosure, I have decided to post this on both wrestlingwithinvesting.com and babble.com The former is where I discuss investment finance and the latter, personal finance. This is the first time I am recognizing how distinct these two  financial realities really are]

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Learning Finance Through Art (Via Infographics)

Posted on September 6, 2011 by Marci O'Connor

What if you could understand (capitalized) Finance through (capitalized) Art?

That is kind of like asking, What if we take one really hard-to-comprehend-concept and then explain it using an equally as hard-to-comprehend-concept instead? Sounds awesome,right?

But the thing is, it’s as if the overwhelmingness of these two worlds cancel each other out all with one simple tool: Infographics.

According to a post in Business2Community, one way to think of an Infographic (IG) is “…as a visual essay…the designer has used their skills to turn dry, starchy fact and figures into a tasty, dynamic feast for the eyes….If there’s not at least a handful of things on your IG that make you smile, nod your head, and actually think, then it still needs work”. This makes me think that an Infographic is way more interesting than a Picasso.

And really, what’s more dry and starchy than Finance? And that’s from  someone genuinely interested in learning more about it. As I stumble and wade through the murky world of finance, I sometimes find myself drowning in jargon and high syllable words better suited for a high-stakes Scrabble game.

As for Art, isn’t it meant to inspire, question, showcase, stimulate, and occasionally explain?

Sadly, I do not always *get* Art – I like pretty colours and patterns make me smile - but all is not lost with Finance. I am learning tons – mainly at WallStreetSurvivor, to be honest –  but I think infographics are a great supplement and provide a new way of grasping the basic concepts.

Here are my Top 5 Finance Infographics (Be sure to tell me what you think of them!)

infographic2

Personal Finance Software – Mint.com

Mint.com Budget Planner

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Why Women Are Better Investors Than Men (Really, They Are!!)

Posted on August 24, 2011 by Marci O'Connor

Did you know that your fear investing can actually make you better at it?

When I was nine or ten, I had a pale pink tee that read Anything Boys Can Do Girls Can Do Better. The felt iron-on letters were peeling and cracked from numerous washings yet still, I wore that shirt often. And proudly.  As I got older, I was tired of all the pitting boys against girls, it seemed unfair  - and more importantly – untrue. We’re equals, right?

Um, turns out, not really. At least as far as investing goes. We really do it better than men. At least according to a recent study by Barclays Wealth and Ledbury Research. As David Weidner at MarketWatch writes, “They  found that women were more likely to make money in the market, mostly because they didn’t take as many risks. They bought and held. Women trade this way because they aren’t as confident — or perhaps as overconfident — as men, the study found.

Turns out another academic study shows that women earn 1% more annually investing than men.  It’s not that I’m surprised (I’m not) I just wonder, since women perform better at this than men, why are there not more of us doing it? The study suggests that our need for self-control keeps us from trading as often as men, and that leads to higher financial results.

Weidner then goes on to become my new bff, by promoting the theory, that actually, women are better at just about everything. He points to a new book by author Dan Abrams, “Man Down: Proof Beyond A Reasonable Doubt That Women Are Better Cops, drivers, Gamblers, Spies, World Leaders, Beer Tasters, hedge Fund Managers, and Just About Everything Else”. (Apparently we are also better at book titles too ;)

From Weidner: “As Abrams notes, women are better soldiers because they complain about pain less. They’re less likely to be hit by lightning because they’re not stupid enough to stand outside in a storm. They remember words and faces better. They’re better spies because they’re better at getting people to talk candidly”.

This is interesting fodder for discussion. I would also add that I would make a terrible spy – the risk of being captured by big burly men in trench-coats and an unhealthy interest in dentistry is enough to turn me off it completely (those coats are so unhip, right?). And that my avoidance of lightening has not so much to do with intelligence as an absolute fear of it. I may not froth and whine like my dog does during a storm, but no amount of persuading would get me outdoors in a storm.

Hmmmmmm…..so is it possible that our fears manifests themselves into self-control? And that self control is what gives us the upper-hand at times? Or are we really just better at all of this than men? I genuinely want to know what you think.

(postscript: This goes beyond the scope of this post but if you have a few minutes, I strongly encourage you to read some of the comments left on the original post by David Weidner. It is probably the most insulting and negative comment thread I have read on a finance article ever.  There are over 500 comments and most of them raised my blood pressure by at least half that.)

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The *F* Word With Jessica Gottlieb

Posted on August 18, 2011 by Marci O'Connor

I realized recently that my favorite phrase is “Me too!! Me too!!”  You too, right?

As in “You can sing every song from Wicked even though your friends and family accuse you of being tone-deaf??” “Me too!! Me too!!”

Or “You think that Dorothy Parker would have been a way snazzier friend  than Jane Austen? “Me too! Me too!”

My connections with people, at least initially, have more to do with similarities  rather than differences. Frankly, people are just a lot less frightening when they are familiar. Ditto, it seems, for finance.

Which brings me to this new series.  I frequently pose random questions on facebook and twitter. It’s as if I am moon-lighting as a game show host:

“If you were forced to enter a food eating contest but YOU could choose the food, what would it be?”

“If you were forced to enter a donut eating contest, how many do you think you could handle?”

Did I mention that this game show is secretly sponsored by a weight loss centre? *wink*  But it’s fun and quirky and raises my Klout score (It’s 69, in case you’re wondering).

OK, but then I ask a simple question about finances and its crickets. Nothing. I have seen people admit to eating ten hot dogs in one sitting. Others have posted graphic descriptions of their bowel movements (yep, really) but I ask gentle questions about financial competencies and I get crickets.

So this series is designed to address that. By showcasing a few women – hopefully some, just like you – we can find a comfortable way to talk about finance. I adore talking about savvy money tips and other awesome ways to save/spend a few bucks. But this series is designed to dig just a little bit deeper. I sincerely want to know:

  • Are you one of the 77% of Americans (and by extension, possibly Canadians) living pay cheque to pay cheque? If so, does that frighten you?
  • Are you one of the 86% of women who are responsible for the day to day household consumer purchases but at a loss when it comes to your investments (aka retirement funds) ?
  • Why can’t we discuss investments without palpitations?

The hope is that by sharing these stories, we can normalize all the uncertainties and fears and doubts and questions we have about finance. Trust me, there are tons.

So, with that in mind, I had a chat with Jessica Gottlieb about her families finances, specifically their investment finances. Jessica is a mom, wife, and writer. She is also extremely patient and graciously accepted my invitation to be the first women profiled here.

Me: Jessica, in your household who is responsible for your investments?

Jessica: I am solely responsible

[At this point, I choke on my coffee. She is so clearly the exception to the rule. So of course my next question had to do with how she hid any financial losses from her husband. Not that I was looking for tips or anything...cough...cough....

Me: Do you tell your husband about the losses too?

Jessica: Here's the thing, I'm 41, he's 46. We have no business worrying about daily gain/losses with our 401k. Our job is not to micromanage that. Our job is just to beautifully contribute to that. And every time he gets a raise, we contribute more.

Me: Do you sit down together and determine amounts to investment?

Jessica: My husband was making $11/hr the year my daughter was born. We were saving 2% of his income, living in Los Angeles that's what you can save. When we've increased our income, we increase the percentage of our savings before we increase our lifestyle [editor's note: That is brilliant actually].  Our lifestyle is not the norm. My husband works ALOT of hours. In the beginning it really was simply that I was interested [in investing], he wasn’t, we had nothing, y’know? He works so many hours so I just don’t think its fair he comes home form work and needs to do one more thing

“Investing is a pretty emotional thing”.

Me: What about you, do you use a financial advisor?

Jessica: Ok, so when I was around 7 or 8, my dad gave us graph paper and we started charting stocks from the newspaper. I don’t have a deep and rich understanding of the stock market but I know enough to know that if i have an extra $100 I am putting $90 towards my mortgage and $10 in the bank. i know that I want to invest in things that keep me safe and my home keeps me safe. I want to own our home. I think that like everybody else, investing is a pretty emotional thing. I invest in things that will let us sleep at night. I want to invest into our retirement, in our home and I want a lot of cash.

Me: Do you think if your husband was more involved in your investment portfolio it would look different?

Jessica: It would probably look a lot more aggressive right now. He’s a bigger risk taker than I am. As the housewife, I have already given up so much control. I have given up a career, [totally not true, check out her bio!] I have given up the ability to change our financial landscape. I don’t think I could give up that much more control.  [here is where I blather on with boring financial stuff like the Merrill Lynch study that backs up exactly what Jessica inherently knows - women make better investors than men! Jessica yawns politely, she already knows this]

“It’s not so much what I don’t know as what I don’t trust.”

Me: What don’t you already know about investing that could help you?

Jessica: It’s not so much what I don’t know as what I don’t trust. I don’t trust that the prices of stock and bonds are reflective of their value. I don’t trust Wall Street. And that’s why I’m not in it in a big way. I mean every body is in it in their 401k. But I think I understand enough to understand that they are criminals and they’re not to be trusted with my money. Isn’t that terrible?  I just want to be in real estate, REIT’s, I have a few old stocks.

Right before I was married, it was 1995, the year I met my husband. I got a $2500 commission cheque ( I was 25 years old) So I ran to Rodeo Drive to go to Chanel to get my purse because that’s what everybody would do with their $2500 cheque, right? [um, of course!!!]  And then I stood there and thought maybe this purse won’t be that popular next year. And then I went home and went on ETrade and I bought Intel at, like, $20/share. Then in 1998 when my daughter was born and our apartment manager didn’t think our leaky toilet was a priority, we bought our first house with Intel.

Me: It’s not always easy though.  I mention that the next post in this series is featuring a woman who is unaware of her household investment portfolio. Jessica’s reaction?

Jessica: A part of me is jealous of those women. They don’t wake up in the morning freaking out when they hear the news. It’s probably really nice to feel that taken care. Even though it doesn’t actually take care of them, it’s just a feeling [yep, that is the unfortunate truth, isn't it?]

Me: So I read recently that 77% of American are living pay cheque. That’s scary and downright discouraging. When I bring this up to Jessica, she had another take on what this could mean:

Jessica: “Well, We live pay-cheque to pay cheque.  I am a spender, I love nice things, I want nice things. Nice things cost money.  So ok, my husbands pay cheque gets directly deposited, minus the 401K, so we have a good chunk we just never get our hands.and then I pay all our bill s and then in 2 weeks we get the next pay cheque. If there was $571 left in our chequing account by the next pay cheque it goes directly into savings, we do not roll over anything. If we didn’t need need for that two weeks, we don’t get it for the next two weeks either. I figure we didn’t need this week, we won’t need it next week either.

I’ve been working with this brand, ThreeJars – it’s an online allowance system. I was talking to the kids about compound interest. And the reason I was drawn to this is because the system lets you give the kids any interest you want if they’re saving. So I give my son 40% interest on his savings. Because his allowance is $10 week….My daughter gets 20% because she makes more money. It’s more about the lessons. We go through excel sheets, and it’s fun pointing out the magic of compound interest….I don’t have the opportunity that my parents had to show [interest] with bank statements because they’re so low. I can however show them that with a credit card because they are so predatory and spiral out of control so quickly. I don’t have a lot of real life experience unless I manufacture them with Threejars. I think that thing that really made the difference in our lives financially, both negatively and positively has been compound interest, and there’s just not many ways to teach it.

Then we went on to discuss children, houses and nyc in August. There may have been a few “Me too!” explosions along the way….just sayin…..

Takeaways

  • Jessica and husband have defined responsibilities regarding their household finances, where she is primary investor.
  • They have a very clear understanding of their financial horizon and comfort level. In their case, that means more is invested in real estate than in Wall Street.
  • Tackling compound interest is the cornerstone to tackling investments.

So what about you? Have you been yelling “Me too! Me too!” while reading or is your story very different? Would you rather talk bowel movements than finance? If you chose finance, let me know –  I’d love to feature you in our new series!

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The US Downgrade, Explained by many.

Posted on August 9, 2011 by Marci O'Connor

Trying to figure out what happened to the $20 bill in my wallet is hard enough. I swear, it was just there…before I bought a magazine..oh and a coffee…um, ok and some really minty gum. So on the one hand I totally get how the US landed in this position. On the other hand, I didn’t even know trillion was a real value – I thought it was a made up amount, like bajillion or kabillion.  That said I used to work for a credit rating agency and remember the security measures taken when we downgraded a country.  The impact of the recent US downgrade from AAA to AA+ is far-reaching and severe.  I know this because of all hushed voices and  furrowed brows I see on the news. But I do not really get what the bad news means to me. Y’know?

So dear readers, you get the benefit of my inexperience once again.  I spent all day yesterday chatting on twitter working hard to compile a list of articles that can help make sense of what the downgrades mean, and why they matter to us.  There were literally thousands to choose from. Maybe even trillions.  But I have read – and more importantly, understood – the following list. I will continue to follow closely and send out twitter links to the articles that do not make my brain explode or send me into sweet slumber.

MSNMoney: “It’s like our collective 850 credit score has been downgraded below 720 — from beyond excellent to good but not spectacular.”  (with video)

Learnvest: “A judgment flawed by a $2 trillion error speaks for itself”

Montreal Gazette: “This would be akin to priests downgrading God”

Investopedia: “If U.S. debt is now seen as a slightly shakier bet, where in the world is money safe these days”?

Financial Post: “All downgraded countries have taken anywhere from 9-18 years to regain their ratings”.

Forbes: (TheIndexer): “The fact is that I am to blame. Yes, me. The voter.”

Forbes: “For the downgrade junkies, the complete list of links”.

Economist: “Sovereigns aren’t like companies. They can’t go bankrupt, and creditors can’t seize their assets”.

Please send me any links to articles or videos to help add to this list, I’d really appreciate it!!

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Choosing Stocks: Or Why I Like Watching Martha Stewart Dance

Posted on August 2, 2011 by Marci O'Connor

Not the actual Martha Stewart

Eight years ago, Martha turned my son’s birthday party into a baseball extravaganza, complete with colour coordinated banners, sprinkly baseball shaped cupcakes and personalized home-made jumbo pretzels for all.  Three years ago, I let Martha guide me through the myriad shades of cream for our new house, settling on a warm Buckwheat Flour and using her signature Robin Egg blue paint as a welcome accent colour. Her Everyday Food has helped me perfect boiled eggs (yes, there really is a way to perfect them) along with my pasta bolognese. Her brand is ubiquitous, a wealth of information and impossible to ignore – but would I invest in it? I am not so sure….

(Disclaimer: This post is obviously not about me making an actual stock pick. Unless you are willing to take stock picks from a 16 year old (as that is the extent of my understanding of the stock market), you will already know this.  This disclaimer is there for those that do not).

They say to invest in what you already know and like.  Well, I already know and like red wine, coffee, my kids occasionally and Jeremy Pivens, always.  I am not entirely sure that this makes the best investing list.  So Martha Stewart, or Martha Stewart Living Omnimedia (MSLO), as the brand is known, initially makes for an interesting choice, though for me, not necessarily the right one.

Martha reminds me of the owner of a favorite restaurant of ours.  I adore their tender, golden calamari yet am repulsed by the ill-mannered owner who rudely ignores us as we enter the joint.  Every time we go there, I am keenly aware that I am supporting the efforts of someone who most likely is spitting in the soup, literally.  Really – he just seems the type. He seems to be a rainbow killer too. We’re not totally sure but to make ourselves feel better we steal the silverware and insist on ordering off the menu.

I don’t think I would be friends with Martha.  She would probably boss me around and insist I learn how to knit.  In a recent article about Ms. Stewart, by Ben Wallace for the New York Magazine Wallace quotes someone who edited Ms.Stewarts food stories as saying, “There’s a list of things she loathes.” At times, the office resembled a shelter for battered crafters (Mr.Wallace says) . “That women’s bathroom, ” the editors adds, “there are women in there crying literally all day long.”

Wallace writes:

“One of the intriguing aspects of her high compensation is that if she were simply to take a $1 salary, along the lines of Steve jobs, the market would almost certainly reward the move with a hike in her stock price”.

So to an un-savvy (non) trader like myself, that suggests that stock fluctuations are as much a product of popularity as they are in the actual value of a product.  Like, I could create a product that eliminates dog halitosis while giving a painless bikini wax (to the ladies – not the dogs – people), but if I am a jerk about it, my company’s stock (and by extension the company’s future success) could be jeopardized. So it begs the question, could you invest in a product or brand if you are at odds with  their founding principles?

Wallace later comments unfavorably on a television appearance with Ms.Stewart pole dancing, recalling that is was  ”a little bit painful to watch“ and I agree – and really, who wouldn’t – but I actually admire her earnest attempts to gyrate - that’s the Martha I’d be into.  She was uninhibited and goofy and especially uncoordinated, yet brave enough to do it anyway. I would so completely invest a few bucks on that Martha.

I imagine there are all sorts of in-depth financial reports to learn about companies to invest in.  Looking beyond the financials when choosing stocks makes sense, to me at least. And thanks to Mr.Wallace’s refreshingly honest portrayal of MSLO and it’s founder, I will pass on this one.  I hear Steve jobs over at Apple is only taking a buck a year and I  am already naively wondering if it’s the shareholders who get the rest?

So: Would you invest in (or even purchase a product from) a company if you question the owner’s integrity? Or is that simply being too idealistic?

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Shifting Financial Priorities

Posted on July 22, 2011 by Marci O'Connor

Last week my pool exploded. Not the whole pool luckily, just the in-ground pool light.  It was the scariest thing ever – my son was about to jump in at the deep end. When he walked past the diving board, he noticed the flutter board was melted & burning. He reached down to grab it and the glass from the light exploded – there was a loud noise and a burst of flames. Luckily, he was not hurt, just really freaked out. The *what ifs* kept me up for a few nights afterwords.

Fear quickly turned to frustration - first at the insurance company who is not terribly interested in helping us – but then at ourselves for not being prepared financially for these kinds of emergencies.  So, once again , I am giving you the benefit of my lack of experience without any actual actual hardship for you to endure.  I am re-thinking my financial priorities and may need to shift how I allocate my funds (btw, I use this term quite loosely..it suggests that there are considerable amounts of money, just lounging around lazily by the pool, under the watchful eyes of guard dogs and laser beams. Dear potential bank robbers – sadly it is not. But it’s all I’ve got for now and I am realizing, regardless of it’s amount, I should still be making the most informed decision possible where it goes).

Stuart Robertson discusses how to rank your financial priorities at Forbes.com. Specifically, the article suggests where to place your retirement savings into your overall financial plan. Since my foray into finance began, I have been schooled in both investment and personal finance. I have gained a deep respect for those that have a clear understanding of their own financial paths and even more so for those that have been able to successfully teach me about it along the way. And here we go again. According to Mr. Robertson, in the grand scheme, the correct order of personal finance priorities is:

  1. 1. Build an emergency fund of at least one month when you first join the workforce. Here he discusses those unexpected expenses (like exploding pools and last minute trips to nyc, perhaps??). When the unexpected happens we are more likely to use our credit cards and as these are unsecured loans, they come with a much heftier interest rate. Having a contingency savings of 3-6 months is ideal.
  2. 2.If you’re in credit card debt, focus on paying it down (if you’re not, stay out of it) Here he prefaces this by suggesting to do this after you’ve put at least $500-$1000 in savings first, and suggests that if you have multiple credit card balances (is there any other way to have them, really?) to try “consolidating ot the one with lower interest rates or pay off the one with the smallest balance first. then take the amount and apply it to what you are already paying to the bigger balance card…it’s called the snowball effect where you gain momentum in eliminating debt by focusing on the smallest balance first and then taking down the next and then the next”. writes Robertson.
  3. 3. Start saving for retirement – the earlier the better. So essentially, the younger you can start the better. I am not disagreeing, but I would like to argue that younger is a relative term y’know? If I was a tortoise I would still be in my infancy, playing with dolls and eating pre-sliced goldfish  practically. And I still giggle at the word Uranus and watch Glee – that’s totally immature right? So I tell myself I am ok for retirement savings. For now…
  4. & 5.  An affordable home and car come in four and five on his list. According to Robertson (and I heartily agree), “A home is so much more than an investment; it’s where you live and at the same time it shouldn’t own you”.

I would also like to add that a home is a place where you should feel safe. There is no way we could have prevented the light from exploding but having an emergency fund would give me more peace of mind knowing that when pools explode  - or roofs leak, or refrigerators break – that we are covered financially, at the very least. As my buddy Gail Vaz-Oxlade likes to remind me, Where you are today is not where you are going to be tomorrow. I think I am finally beginning to understand what she may have meant by that.

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Why Invest?

Posted on July 19, 2011 by Marci O'Connor

Pop Quiz: Why should you invest?

  • A: Because my blog encourages you to?
  • B: Because you want to keep up with the rising cost of your favorite shoes/toothpaste/wine?
  • C: Dream vacation
  • D: Dream retirement
  • E: Because Forbes says to?

In theory, I realize that I should be investing for my retirement and my dream vacation to Italy (which by the way, is more of a feel-good social mission, to help improve this countries recent downward economy. I swear, it has nothing to do with my love of gelato, pizza and Italian leather). Yet, these goals still seem too far away to jolt me into action.

For me, the biggest motivator is B – which is just another way of explaining Inflation (the term for prices going up each year) . Roughly, inflation has averaged 3%.  I know there are smarter, more relevant  metaphors to drive this point home, but as far I’m concerned Learnvest got it right with this: “The biggest reason to invest is to make sure your money grows at least as fast as inflation. That’s the equivalent as being able to stay in the same size jeans in your twenties, thirties, forties. Keeping the status quo.  but, if you do a really good job of investing, you can get your money to grow even faster than inflation”.

They go on to say, “Suppose you had $1000…In thirty years, if inflation averaged 3%, you’d still have the same $1,000…However, it would only buy buy as much as $400 would today.  and that’s if inflation were only 3%. If inflation averaged 5%, your money would only buy as much as $230 would today.  Inflation is the equivalent of financial termites munching away at your foundation”.

I have seen the power of inflation, just not in my bank account but rather in my pant size (OK, this totally just reminded me of that game where you add, “…in my pants” to the end of every sentence and really annoy amuse everyone around you. As in, “The funniest thing happened last night…in my…” or ” I can’t get over the lightening last night…in my…” Try it, I dare you not to snort  coffee out of your nose.)

What I mean to say is that the lessons are everywhere and they are obvious: I did not go on a pie eating quest - though I am not ruling it out either – this was not an overnight explosion, I simply allowed  small choices that resulted in more pounds than my jeans could handle. The dream now, is to find a way to harvest these clever weight gaining *skills* of mine into financial investment ones….

Discovering that I could increase my savings with my choice of finances – mainly by investing wisely – is the proverbial icing on the pie. Regardless, there are tons of valuable reasons to be investing and I have discovered that most likely, you need to discover your own for it to actually jolt you into action.

(postscript: I have been been known  to spend an obscene amount of time searching for images to accompany these posts. The challenge is to find the least *stock-like* image as possible. Recently, I decided that I was banning all piggy images from this blog (for those that don’t know, I write a personal blog about losing my *thyroid* weight and I find all these piggy bank images a bit discouraging, insulting even).

Curious, I googled why all the fat pig images. Seems it was all a big misunderstanding.  In the middle ages, a common clay, called pygg was  made into jars for people to store their extra coins. Over time, the name just morphed its way into pig banks. So once again, I am reminded that learning totally helps to de-mystify things and it turns out not everything was designed to make fun of my chubby thighs. Which is awesome, because the alternative to piggy bank images to depict investment finances tends to be stiff -armed men, shaking stiff- armed women’s hands, usually with a dollar sign floating above them or a random dollar bill being trampled.)

What say you: What is your biggest motivation to invest?

 

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Investors look just like everybody else….

Posted on July 13, 2011 by Marci O'Connor

So there is this snort-worthy scene in  The Addams Family movie, where the character Wednesday (played by Christina Ricci) is out trick or treating. Upon opening the door, a women looks at her costume (Wednesday is not dressed in costume, instead she is simply wearing her regular every day clothes) she asks her, “And what are you dressed up as little girl?” Wednesday replies ” I’m a homicidal maniac. They look just like everybody else”. Well, apparently Investors do too.

What I mean to say, as I fumble my way through the labyrinth of investing and personal finance – is that investors can be as diverse and confused as the rest of us – they just do it in suits and with a fancy pants vocabulary! Yet at the end of the day when the whistle blows to announce the days end trading (that is how it works, right?) there are no certainties in investing.

So I was struck by a recent article by Jonelle Marte for SmartMoney.com about smart investment strategies for uncertain times.  She writes about the wide range of investment strategies out there, and it makes me think of the wide range of investors. She uses the half half empty/half full glass stock market scenario and again, I am thinking of the investors, rather than the *market*scenario. To the point, her article focuses on the diversity within the stock market these days but I saw it slightly differently (In a half glass full kinda way): It suggests to me that eventually I will need someone to invest my money, whether that be me, my uncle or the women at the bank with the kick ass heels that instill my confidence: The point is for every uncertainty in the market right now, there is someone with a plan to help over the hurdles.

According to Marte, “the stock market lately seems stuck at a crossroads, not clearly headed up, nor clearly headed for the double-dip some have predicted. The bond market hasn’t crashed – but neither has the housing market come back.  As a result, investors have embraced a wide range of strategies.”

So, what’s going on? Again opinion seems to be divided. Against the odds, I actually find that reassuring. It suggests that there is not just one approach or even one strategy that will guarantee success. I have yet to commit to an investment strategy yet but I like the idea that there is not just one *correct* way to be doing this.

Marte goes on: ” Most markets have their bulls and their bears, but typically a consensus is built.. Not so this time around. Market bears certainly have plenty of ammo: The unemployment rate rose to 9.2% (in the US) in June and shows no sign of improving soon. Debt worries are clouding Europe’s outlook, Japan is still reeling from its earthquake disaster and the U.S. has yet to agree on how to handle it’s mounting pile of I.O.U’s. “The concern is that things are going to get slower this year and decelerate next year”, says Jon Fisher of Fifth Third Asset Management”

OK, so things suck then, right?

Except she goes on to exclaim, ” there are reasons to be optimistic. Manufacturing in the US has picked up. Commodity prices have fallen from their peaks, meaning lower costs for companies. And perhaps most importantly, US companies are expected to report strong second-quarter earning starting this week, which some investing pros say could provide a positive catalyst for stocks. The tide has turned and is starting to go up, says Oliver Pursche, president of Gary Goldberg Financial Services”

Personally, if I was having a Toga party Oliver would be the guy I’d want to be doing tequila shots with and stomping grapes out back and yet…when it comes to my money (or rather, my lack of it) I am so possessive. I try to reserve it for Anthropologie and coffee. I may prefer to have Jon – and all his slower than a turtle walking backwards pessimism – very very carefully look out for my money. It turns out that even though I generally scoff at people’s pessimism – and I have been known to scoff loudly – I am happily willing to concede the importance of their nature. I probably wouldn’t want to get on an airplane or a scale with one nearby, but it turns out their cautious outlook suits my bank account fine.

What Say You: Who would you invite to your investment portfolio party, the turtle or the toga?

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