Are you looking at your home as a dwelling place, or as an investment where you are banking on price appreciation? Real estate is still an asset class, and depending on your view, it can provide good diversification to your overall portfolio.
Read MoreI hope this Tuesday evening is treating you well. With March Madness in full swing, I’m in a playful spirit despite Trump’s budget cut proposals, a potential repeal of the Affordable Care Act, and today’s stock market dip. I’m also on a high because I got the opportunity to spend time with a group of fellow Yale alums interested in investing and setting themselves up for financial success. I was honored to speak with another Yale alum - shout out to John Caserta, ’01. Selfie time from last Thursday…
John and I both have a similar approach to investing. I also shared my Top 5 philosophies. In case you need a refresher, here they are:
Invest in skill set
Run your money like a business
Find low-cost product
Take risk with cushion
Create personal investing mojo
Part of my own investing mojo is to stick to an investing philosophy, take action, and get results. I suspect that the market might be a bit choppy in the coming weeks, so remember to stay the course and execute on your own investing plan.
What Caught My Eye This Week
Basing Life on What You Can Afford – I love Ron Lieber’s NYT articles. The article goes into the stories of how and why everyday people make the hard financial trade-offs. As you subconsciously do the same by the end of the day, you might be surprised by what’s unveiled. To whet your appetite, one story describes how a mother has made serious trade-offs for her two daughters – inspiring.
A New Commercial Real Estate Investing Vehicle – Innovation is always happening on Wall Street. And, now individuals will have a chance to invest in commercial real estate. Currently, individuals can invest in this sector through REITs, or Real Estate Investment Trusts, which are pools of properties that trade like stocks. In the WSJ’s article, “A New Way For Individuals to Invest in Real Estate,” a new structure will give individuals easier access to commercial investments. Interestingly, “commercial real estate returned an average of 6.93% annually over the 10 years ended Dec. 31,” which is similar to the 6.95% return on the S&P500 Index. Keep in mind, however, that the new vehicle comes with hefty fees of close to 2%.
Boldness in Action. Several members of the Charisse Says community have inquired about getting a financial advisor in the recent weeks. Way to go! Keep on living the bold life and recognizing that a financial advisor can be the COO of your money (If this is not sounding familiar, check out my video on how to make this happen).
I’m checking in on you in the middle of the day today. Your fellow members of the Charisse Says community liked that I did so last week, so I’m trying again. If you need a laugh, press play again on the BBC video with the Dad side-swiping his little girl as she playfully interrupts him on live television. If you haven’t seen it, you’ve been working too hard, and I’m not judging you for missing out (wink wink).
In a follow-up interview, it is clear that the Dad loves his kids. While I do not have kids, I have plenty of godchildren and nieces and nephews, and I am a child of beautiful parents. Recently, I’ve gotten a lot of interest from parents about what they should be doing to help save and invest for their kids. I’m collecting the list and so if you have specific questions, please leave them on my blog so that we can address.
To get the ball rolling, here’s a few to ponder for your life, or for those around you with little ones:
Keep Watching
And while we are laughing at funny videos, the market continues to roll forward. Over the last week, all eyes have been on energy prices, which have tanked. Remember what I said last week – stick to your investment philosophy and be cautious of your own human biases. A New York Times article highlighted that “Oil Price Drop Triggers Herd Mentality in Selling.” Have a read and let me know your thoughts on my blog.
Also, I read this comprehensive article on “The High Cost of Health Care in America.” Considering that health care has taken on a bigger and bigger piece of our wallets, we will need to see how Washington deals with this continued crisis. Oh boy!
And, a special shout-out to all my Pisces compadres. My husband’s birthday was yesterday (go, honey!) and mine was earlier in the month, and so I hope you too are celebrating with the close Pisces in your life!
There’s been lots to digest over the past week…. A week ago this Wednesday, it was the start of Lent. For my fellow Christian sisters and brothers, blessings to you as we journey inward to grow in our relationships with God. Wherever you find yourself in this season, may it be a fruitful one.
A week ago this Wednesday, the Dow Jones was soaring above 21,000. Some readers have asked – What should I do with my investments? In short, I say – stick to your investment philosophy, no one can time the market, take some profits if you have serious gains, examine what is truly driving the market and its sustainability, and continue to speak to your financial advisor to help deal with it all. Check out my blog for previous articles on my views on a rising market. Here’s an NPR story that gives another view – keep investing in low-cost vehicles. I agree but I think this is part of your overall investment philosophy and approach.
A week ago was also the coming out party for Snap, the parent company to Snapchat. While it was priced at $17, everyday individuals like you and me could only get it when it popped to $24. For a reminder on why big institutional investors get preferred pricing, check out my episode on “How the Stock Market Works.”
I did not buy any Snap shares, but plenty of people in the Charisse Says community did and proudly shared their enthusiasm with me. A few messages went like this:
These comments underscore that some of our investment decisions are made out of emotion. I want to remind you that money IS emotional. Embracing this reality will help you realize that sometimes these moves will work in your favor and sometimes they won’t. At some point, we all make investment decisions that involve emotion over reason. The important thing is to recognize this bias and figure out how to protect yourself if things don’t go as planned and how to make money if things do go as planned. In the meanwhile, you’ll have to roll with your decisions and learn along the way.
Time will tell whether Snap will be a good investment. I must admit, I downloaded the app for the first time this week. Here are a few things that stick out to me:
Want to share what has stood out to you or why you invested (or did not)? Please leave a comment on my blog. It will be fun (yup, fun for me and perhaps for you too), to see Snap journey in the public markets.
Until then, enjoy the rest of your week.
……YOU! I surely wish we had a Money & Investing Oscars for our everyday gurus. If we actually celebrated the achievements of everyday people for making great investing moves, that would be something. [Side note – I LOVED the movie Moonlight – if that doesn’t represent an investment in bringing to life the stories of everyday people, I don’t know what does.]
In the interim, I am going to continue to celebrate members of the Charisse Says community who make bold moves. Last week, Danielle B., one of our members said:
“Charisse – You would be so proud of me because I paid off a big chunk of my student loan debt. I now know what it feels like to have a mindset around wealth building.”
I believe that having a mindset around wealth building means that you must:
If you have other wealth facets that you want to contribute, leave a comment on the blog.
How to Link A Wealth Building Mindset to Actions Today:
I read several articles over the last few weeks that really highlight the importance of having a wealth mindset today.
I was shocked by an Employee Benefit Research Institute analysis that said that people in the U.S. ages 65 to 74 hold more than 5x the borrowing obligations Americans their age held two decades ago. I found this info cited in a WSJ article, “With $15 Left in the Bank, a Baby Boomer Makes Peace With Less.” If you are a Baby Boomer, leave a comment on my blog and let me know what you are doing to build wealth amidst a more debt-burdened environment. And if you are a child of Baby Boomer, like me, it will be important for you to understand what your parents are dealing with as it will have implications on the overall family wealth transfer.
Simultaneously in the last two decades, “assets in ETFs have expanded to more than $2.5 trillion in the United States alone, making them one of the fastest-growing investment products in history.” The Atlantic’s “Wall Street Diversifies Itself,” reminds that ETFs are an efficient way to invest because they have low fees and give you access to the market’s returns. If you’re unfamiliar with ETFs, please check out my webseries on how ETFs work and what they can do for you – you’ll laugh and stay informed. One of the best actions you can take now is to consider adding ETFs to your investment strategy. Again, continue to educate yourself and you too will be on your way to winning the wealth game.
Just to keep it real, everyone WILL have investment blunders. While it may not be as horrifying as what we witnessed on Sunday night, it’s par for the course. In order to claim your Money & Investing Oscar, you’ll have to embrace it all.
I hope you enjoyed your President’s Day holiday yesterday. If you were not off, it’s OK – you worked for the rest of us. Consider this –
“Investors like to get rich quick, like to gamble and have too much faith in their own analysis, so stocks that look like lottery tickets are particularly appealing.”
It’s a quote in one of today’s WSJ articles, Kraft-Unilever Deal Is Off, but Warren Buffett’s Anomalies Live On. The quote reminds me of how our own human behavior can sometimes make us the worst investors. But, there’s hope – if you can be aware of your human biases, you can try and position yourself to be a good investor, like Buffett.
I say this to you because you might be preparing for a windfall of cash to hit your account, or you’re sitting on it already, from a tax refund or bonus from your job.
Before you go and plop all of your money into the market, here’s a few things to remember:
I’m looking forward to hearing about what you are doing with your potential extra cash. Leave a comment on my blog and let other members know how you’re planning to use your money.
It was 70 degrees in Chicago this past weekend, so I got outside a lot. I hope the sun shined on your this weekend too. Have a great week!
I hope that this Valentine’s Day brings love, joy, and peace your way. I simply ask:
What’s Love Got to Do With It?
Well, most of the time, I say…..”A lot!”
Borrowing the question from Tina Turner, one of my favorite performers, I am answering it in my own voice. I think most of us want to build wealth for not only ourselves, but for the people we love. Most people tell me that if they want more wealth in order to have more experiences with their loved ones, leave something behind for posterity, and/or have new experiences.
Wealth is no replacement for time, but it might help make more time for doing things with (and for) the people you love. I think many pending retirees, whether yourself or a parent, are thinking a lot about their own wealth situation and may agree with me. I received this bold question from a fellow Charisse Says member:
What would you recommend to someone who is 5-10 years from retirement?
Here’s my take on a few things you can do:
Figure out your post-retirement lifestyle monthly number. Basically, figure out what will your post-retirement life cost you. I went through this exercise with my own parents, and it’s important to be honest with whether your cost of living to be the same, increase, or decrease. Many pending retirees want to downsize their living situation but also go on more trips, spend money on their grandbabies, and incur more medical expenses.
Determine how you will fund your lifestyle, and for how long. You need some money coming in to fund your lifestyle. If you’re lucky, you will have some pension money. But, most people will need to tap into their retirements accounts (401k, IRAs, 403b, etc.), so this then triggers other questions:
Can your current portfolio can completely fund your future lifestyle?
Can I afford to retire in 5-10 years, or do I need to work in my current job for more than I thought?
What are my other complementary benefits going to be – Social Security, Medicare, etc.?
Should I have some other form of income coming in during retirement?
How long will I live? - I know, a bit morbid but think positively.
Assess whether you need help navigating the waters. Some people want to change their asset allocation in their portfolios in order to either make extra money, or not lose any money, in retirement. It all depends on whether it’s worth it to try and gain a little extra money, or avoid losing any. Since many people are retiring at later ages, your personal preference may vary. Consider consulting a financial advisor. Check out my video on “Dating a Financial Advisor.” If you have more specific questions on changing portfolio allocation to meet retirement needs, leave a comment on my blog.
Boldness in action
I told you that I would continue to share bold moments with you in my personal journey, so here you go – check out this unexpected scene with this parrot on my head on my recent trip to San Diego. My husband was clearly game too.
Again, I come back to…”What’s Love Got to Do With It?”....
Everything!
Enjoy this week and continue to hug those people in your life that you love – that’s why many of us are on this pursuit to build wealth.
Good Evening! The first week of February has hit us with lots of stuff – members of the Charisse Says community are acting boldly when it comes to their money, Black history month, more Presidential activity that could affect your wallets, and economic news that affects the stock market.
First and foremost, Grant C. shared with us that he opened up a Roth IRA account and specifically:
“It’s been on my mind for a good while and I told myself - I just need to do it. I can forego a couple of records this month! I couldn’t afford to start off with a ton of money but, I plan on contributing into it for the long run. Just wanted to thank you for the financial investing tips/education/energy! Looking forward to mastering it over time and adding other investments.”
Congrats to Grant! If this isn’t bold, I don’t know what is. I want to encourage you to reflect on the trade-off Grant made to make his investment happen. You may be thinking of taking a bold move and I’m hopeful that Grant’s story inspires you too. Get to it!
Now, here’s what you need to know:
Lastly, I was recently interviewed by YouCollective, a platform that democratizes voices of individuals with achievement and impact. I was humbled to be selected as a YouCollective Pathmaker and shared my personal story on how I forged my path and overcame challenges along the way. Feel free to listen to my story here.
Thank you for all of the responses – via email, Twitter, Facebook – on the Year of Boldness. We are ready for action. Boy, doesn’t it seem like we have already been through emotional whiplash over the last few days? My goodness. In the words of my pastor, stay #woke, please.
In true spirit of being bold, you have the power to put your money where your mouth is in this moment. Your wealth is directly affected by how you spend your dollars. How can you make a difference today?
Now, in case you missed it last week amidst all the chaos, the Dow topped 20,000.
Boeing and Microsoft reported strong earnings last week, and these two companies contributed significantly to the Dow’s move. One of the most frequent questions I received this week was – “Will the market keep going up?” Well, I have a real answer for you – “I don’t know.” As unsatisfying as that might seem, it’s true. No one, not even me, can predict what the market will do. If someone tells you that they can predict the market, I would run away.
What I do feel very confident in reminding you is that you need to examine your portfolios and assess whether you need to take any profits. As a rule of thumb, I like taking some profits when my U.S. equity stock holdings make 15-20%. And, by “some,” I usually sell the amount of the profit. So, if it cost me $10,000 to buy a stock, and it went up to $12,000 because of a 20% gain, I will sell $2,000 worth, which locks in my gain of 20%, minus any commission I pay to trade the stock. This way, I still have $10,000 invested. If the stock(s) goes down, I can decide to buy more if I still fundamentally believe in the stock. At the very least, I won’t suffer guilt from not selling the stock when I had the chance to make some money.
What Should You Do?
Stock prices are a function of how the market values the future growth of a company. As such, we expect stock prices to grow at the same pace of earnings growth. When prices grow faster than earnings growth, we have a problem: the market gets overvalued, and thus we are susceptible to falling stock prices and potentially losing money.
So the question you should be asking yourself is whether earnings will keep up with stock prices. The Wall Street Journal addresses this very question by reminding us that many companies have yet to report earnings. This week, many more companies will be reporting earnings, and thus we must be paying attention to not only how these companies performed last year, but also their earnings expectations for 2017 and beyond. [If you have forgotten how company earnings reports work, or why they’re important, no sweat – check out my video on company earnings.]
In short, pay attention to what’s happening around you and evaluate how you will respond.
You ready to build some wealth? I hope so – for yourself, your kids, extended family, and/or your community.
Read More#WealthyGirl
“Most of us want to be wealthy, but more often than not, don’t have a handle on how to achieve this goal. I will share with you the secrets and strategies on how to do so. ”
