Have you ever heard your buddy brag about how much money he made on “X” stock? It usually goes something like:
“I bought Intel when it was trading for mere dollars. Then I sold it at the peak and had a 500% return on my money!”
Here are some things your buddy probably didn’t tell you:
That he only used about $500 of his $600,000 portfolio to buy shares. So his overall portfolio return attributable to this investment is quite small.
That time he bought Enron stock and lost all of his investment.
The amount of risk he had to take to generate the return on his Intel investment
And point number 3 is the one we need to focus on today. In order to generate return on investment you have to take risk. And the expected return should be in line with the amount of risk.… Continue Reading
“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair.”
If you buried your cash in your back yard and dug it up 10 years later, inflation would have caused it to be worth less. It’s like a loss on your money, even though the actual dollar amount stayed the same.… Continue Reading
I have 2 unhealthy food favorites: fried chicken and donuts. I try to limit my exposure to these. That means rarely having donuts in the house.
As for fried chicken, I generally only eat it once a month. This is usually the 3rd Sunday of the month, also known as “fried chicken” day at church. We bring in a big platter of it for lunch after worship service.
If you’ve never played it before the simplified explanation would be you are trying to get all your “pegs” around the board before your opponents do. And the “Joker” card is a really good card to have.
It’s a game of chance of course. If you get a bad hand it can be hard to win the game.
But it’s also a game of skill. You have to play your hand wisely. And save up different good cards for just the right time.… Continue Reading
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