Friday Quote

it's better to skip supper and go to bed hungry than it is to wake up in debt

-Ben Franklin

Mid-life Crisis

The mid-life crisis is a stage when many men are plagued by feelings that their life has no meaning or that their physical and mental powers are spent.

(w)


Sometimes this can rollover to a financial crises. We all seem to fall into jobs simply because it pays more than the last job and then we realize that more money is not as fun as having a greater purpose in life.

Waking up every morning, jumping into your car and driving off to work just to do the same mundane activity every single day can frustrate you. You're 35 years old and you wonder what you have accomplished.

You have a mortgage, some other debt, a marriage and kids. Half of you want to act crazy and buy a bunch of stuff that you always wanted. The other half is saying chill out and take an aspirin.

Stop feeling sorry for yourself and get busy. What do you really want to do in life? Start doing it. Don't quit your job (be happy you have one). Work part time on your fun activity. Want the ability to spend frivolous? Pile up cash and do it. Be an adult and don't act rational. Real men and women devise a plan and achieve what they want. Children act silly.

Investments grow based on DEMAND

When there's a big demand for a product, the stock price will rise. So when you pick investments, think like a consumer of the product. If you know a company will grow each and every year because they have a product that will always be in need. Go for it! You're as rich as your investments are in demand by the consumer.

Of course you may want to research deeper such as the P/E ratio, management, etc.

But first I always look towards the future and say to myself "will this product still be around 10 years from now"? Coca-Cola is one and Apple is another. There will always be a demand from these companies they are truly "growth" companies.

I do see my investments as a producing asset. But even good companies can be affected by downturns. Let's take the recession for example, Apple, Coca-Cola and a lot others are good companies but their stock prices went down. Simply because people were withdrawing (cashing out) investments daily, which makes the price of a stock go down. Which in fact made others panic and stop contributing creating a domino effect?

It's Human Nature to react when your investments are steadily declining. Moments like these I re balance, taking about 70% out of stocks and moving it to CASH (if I need the money within 5 years).

Try not to choose sexy stocks, instead choose boring stocks that products will always be in demand-- recession or not.

Consumer Staples are a good sector. P&G makes toilet tissue, paper towels, toothpaste, skin moisturizers, dog food, potato chips, household cleaning products and much more. This is a well diverse company, regardless of economic factors. P&G will always ride out any storm.

Before you invest, save cash first! At least a few months of rent and enough to buy some groceries, you don't want to be cashing out investments every time a mini emergency occur.

In order words: dig the well BEFORE you get thirsty

Friday Quote

There is no security on this earth; there is only opportunity

-Douglas MacArthur