Where Should You Invest Your Money

Mr. Howley has 35 years of experience doing this as a hobby. He started off by asking a simple question. How do you get rich? (maximize profits) How are you going to become rich? Live below your means. Purchase items on sale and if you have difficulty managing your money, use cash or debit card. Also, start investing at a young age in order to capitalize efficiently your income and long term planning in terms of retirement and financial management. Student loans will diminish with time, even though you cannot erase them in bankruptcy. He then talked about compound interest and how it affects the average household. Additionally, looking at saving money over time through linear vs exponential growth. Finding a company match is important, as it can lead to free money.

Another important question asked by our speaker, which millions of Americans and people globally have trouble answering is: Where should you invest your money?

Brokerage account vs real estate

Financial Advisors – they work for their own interest not yours

Fee only commission financial adviser

Vanguard – largest brokerage firm

Non-profit

Fidelity – trading stocks in personal portfolio

Lowest management fees (0.5)%

John Bogle, founder, invented index fund, humanitarian awards…done more for individual investors

Located in Philadelphia, PA

This fund has $378 Billion in assets

Then looking at the difference and variety of available funds in the financial sector, Mr. Howley explained the options and also why each one acts in a certain way.

Index funds vs mutual funds (fees/performances)

Non proprietary funds to try and beat the market

ETF’s…Exchange Traded Funds, trade like stocks when the market is open everyday

Why invest in ETF index funds vs individual stocks?

Investing vs speculating (you aren’t an expert in forecasting)

Adversity: putting your eggs all in one basket (counterproductive)

Why purchase the needle in the haystack when you can own the haystack

He informed us of a Ric Edleman – WBC Radio – radio host who gives practical advice on investing. Another channel is the American Institute for Economic Research – Speaker has a subscription and suggests market is going to continue to go up. A quote he shared with us from Warren Buffet – “Be fearful when people are greedy, be greedy when people are fearful.”

Retirement Gamble

The CBS special video “The Retirement Gamble” is an in-depth look into the financial crisis our nation has been suffering through over the past few decades. Retirement planning, which has indirectly seemed a pretty standard and straightforward process, consists of many flaws and a broken system, which is hurting our very own people. Below is a summary of the many facts and statistics that the CBS correspondent discovered during his research into this sector.

The number of workers borrowing has reached 10 year high. America is facing a retirement crisis, and the statistics are grim. Half of all Americans cant afford to save for retirement. 1/3 have next to no retirement savings at all. The cost of living is going up, water, utilities, insurance, and food all contributing to that. Many baby boomers planning to delay their retirement. Americans are investing 10 trillion into financial advisors. 401 k – roughly half of US companies offer a retirement plan and insurance through their corporation. One of the only products Americans don’t know its price, quality and danger. The mutual fund industry has been able to protect themselves. Banks saw an opportunity to help employees save for retirement, having a portable vest of money that could be directly put into a pension. These plans place the burden on the individual participant to have a good retirement. People in the mutual find industry saw huge opportunity, making mutual funds the foundation of all 401 k plans. Things seemed to be going right, with people investing into the stock market left and right, seeing positive gains weekly.

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