Category Archives: Money

A brief note on emotions and investing

In the last two days I’ve “lost” a bit over $10,000 in the market.  Nothing has changed – the outlook for the companies whose stock I own is about what it was last week, but there were some negative comments from the Chairwoman of the Federal Reserve that moved the market.  As the tide went down in some corners of the market, the values of my stocks have gone down as well.

There are lots of things that affect stock prices, which I will be covering later.  But one of the key skills of being an investor is the ability to sit back and observe without getting emotionally attached.

Lots of things will cause the market to react, and it can be very difficult to keep one’s head when the market moves in big ways.  Especially when you are new to investing, a position is moving against you, and you’ve got no idea why.  It can feel like everyone else knows something that you don’t, and the pressure to cut your losses and stop the pain can be incredibly powerful

But almost invariably, as soon as you do you’ll find the market turns around.  When you sell a stock that you believed in because it dropped 30% only to watch it turn around and happily rise to new highs, you’ll really feel stupid.

I’m going to address investing a lot here, because I see it as the wealth building method that anyone of average intelligence can participate in.  But in order to be successful you’ve got to be able to ignore the day-to-day and month-to-month moves of the market and their effect on your (theoretical) net worth.

That’s it.  Nothing life-changing or particularly deep here – I just realized that I was down a lot, and once upon a time this would have caused a great amount of anxiety.

Wealth Building Part One: Thoughts on Retirement

I will open by giving you a Frontline video to watch.  Check it out when you have time (it’s a bit longer than 45 minutes).  The video is located here.

So that probably pissed you off a bit.  401Ks are the typical retirement vehicles that regular folks have access to, and they use mutual funds that pay kickbacks to the management companies, and you suffer the consequences.  Sucks to be you. Continue reading

On being an entrepreneur…

This is a response to a post on Inominandum’s blog today.

The concerns he lists are very real, and will strike you in a visceral way especially if you are the primary breadwinner in the family.  But at the end of the day you confront the fact that half of all millionaires are self-employed or own a business.  Depending on your skillset self-employment or starting a business may simply be the best road to financial independence and financial freedom. Continue reading

Defining and achieving “wealth”

I see posts like Jason’s Three Tips for building Wealth with Sorcery this morning, and my immediate reaction is “lots of folks don’t see wealth and money the same way I do.”  Jason’s post is on-target, but I don’t think his advice is far-reaching enough.  This post is my attempt to add some more depth to this discussion.

I should start with a disclaimer: my goal here is to talk in general terms about complicated concepts.  I’m generalizing a bit – understand that going in.  Readers who have never taken a finance class and know nothing about investments should be able to follow along, and if you want to be picky then you’re missing the whole point of this.

Continue reading