The stock market can be intimidating for anyone just starting to invest. One of the most common fears new investors have is how to choose investments. Choosing a company to buy stock from opens the door to a myriad of frightening possibilities. What if that company isnโt disclosing their finances properly? What if Iโm not doing enough due diligence before purchasing shares? Buying individual stocks also leaves you at risk of not diversifying your portfolio enough.
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What Is an Investment Portfolio and Why It's Important /
A portfolio is a collection of like things. A photographer's portfolio is a compilation of photos they've taken. A graphic designer's portfolio is full of designs they've done from logos to brand identities, to websites, and illustrations. A portfolio is used to show the breadth and depth of whatever it is showcasing.
An investment portfolio is the entire collection of all your investments.
And just for good measure, let's review the definition of an investment. From an economic standpoint, an investment is when you purchase goods for the future purpose of creating wealth. From a finance perspective, investments are monetary assets bought to produce income or make a profit by selling the asset in the future at a higher price.
Read MoreYour Cash Is Losing It's Value. This Is What You Can Do About It /
How many times have you thrown a penny away? Like you saw a penny on your desk, or you got it as a change, and instead of putting it in your pocket to use later, you throw it in the actual garbage? I'm not trying to judge you; I'm just trying to illustrate how the penny has lost its value over time.
In 1909, you could buy a copy of the New York Tribune for one cent. And in 1932, you could travel a mile in Southern Railway System. And I'm sure you might have heard a grandparent speak of buying candy at a local five-and-dime for a penny.
How does a penny go from getting you an entire newspaper to being so annoying that you'd rather throw them away than carry them around?
When money becomes less valuable, it's usually due to inflation.
Read MoreFour Investing Myths You Need To Stop Believing /
I know, I know. You think investing is not for you. Trust me when I tell you, I know how you feel. As someone who has been in the finance world - like actually in it - itโs easy to feel like you donโt belong there.
But itโs kind of our responsibility to work through that so we can actively participate. We have to know how something works before we can make any judgement about it. And we have to understand it before we try to change it. So, if you want to make a difference or if you just want to get rich, you have to pony up and grab a seat at the table. Even if you think you canโt afford to play, the truth is you canโt afford to not learn how to play.
If youโre someone who has gotten close to investing, but never follows through, tried to learn, but has given up, itโs probably because you are letting these four common investing myths hold you back.
Read MoreHow To Be Awesome At Investing: Lessons From A Decade In Finance /
People always assume I am so deeply passionate and stoked about finance. Like I jump out of bed and get excited about interest rates. That's not exactly true. I am super stoked and passionate about helping people, feeling like my work matters and having autonomy over it. So when people ask me why I started The Hell Yeah Group, the answer is often that, " I looked inside of my tool box of skills and realized I had some sharp tools that all pertained to bookkeeping, running a small business and personal financial planning.โ As much as I wanted to create a cool company that had nothing to do with finance, I had constraints: I needed to earn money and there was no denying the skills I had, no matter how uncool I thought it was. Not exactly visions of grandeur, more like shining a turd.
But Iโve really grown to love how my work makes me feel, regardless of itโs non-passion status. I want to share the industry-specific things Iโve learned and observed over the years that I think everyone should know.
Read MoreHow to Be "Financially Responsible" /
How to Be Financially Responsible | The Basics of Financial Responsibility
One of the most frequent financial struggles that people talk to me or email me about is having trouble being "fiscally responsible".
When it comes to doing the things one ought to do with their money, according to what I've learned from the industry and society at large, we fall short in a few common ways. Most people have trouble saving when you know you should save, curbing spending on bull shit that you don't need and understanding how the financial markets and economics. I get it. I make weird choices too. A lot of us do it because we're emotional creatures that act on our feelings.
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Where Are You At? The Mid-Year Financial Gut Check. /
If our calendar year could be compared to a basketball game, we're at about half time. Halftime is a chance to pause and reflect. What's the score? How is the other team playing? How are you playing? You probably went on the court with an objective. Maybe the objective is to win. Or maybe the object is to not lose by 30 points. Whatever the objective is, now is the time to take stock of the score, your performance and how you can make adjustments to finish strong.
Read MoreEverything You Need to Know about IRAs: The Definitive Guide /
You've probably heard your accountant or that one friend who totally has their shit together talk about how you should be saving for retirement in an IRA. And like a good adult, you probably make all the right noises at the right times to suggest you understand what the hell they're talking about. In case you've been living a lie because you don't really know what the hell an IRA is, I'm here to free you from the shackles of your own confusion.
So let's go balls deep into the non-sensical world of IRAs.
Read MoreHow to Finance Your Company: Know Your Options /
How you will finance your company is an important decision. Financing will impact how you operate and how you make decisions. For example, a company financed by the founder's personal savings will operate differently than a company that has received funding from venture capital investors.
Read MoreWTF Are Investments? Part 7: Account Types, Portfolios and Diversification /
Here is a lesson (and not investment advice) on the different type of investment accounts and the importance (and definition) of an investment portfolio and diversification.
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