How to leverage out of the margin
Margin Accounts A margin account is an account that allows you to make quick transactions and take more risks. It allows you to take credit and have access to credit. If you were to have one and sell a stock you can choose to have it go to the margin account or cash. The transaction is faster if sent to the margin account. You will be able to buy something else the same day. If you ask for cash it could take a few days to have access to the funds. A margin account will also give you the ability to take a loan from the broker. In general I would not recommend doing this as it is risky. Another benefit is the ability to use options when you have a margin account. Example: $10000 cash in brokerage. You buy Disney at $100 per share. You now have 100 shares of…
How to fund your life in the future
Exchange traded funds vs mutual funds What they have in common: They can be in cash accounts or retirement accounts. They hold a variety of stocks/bonds/commodities etc. Where they differ: ETFs: Generally follow the trend of earnings of an index such as S and P 500. Can be actively managed or passively. Have lower costs. Have lower taxation only when sold. Transactions are between stockholders and buyers not managers of the fund. Traded on the exchange. Options can be done. More liquid investment. Can be traded quickly. Have leveraged etfs that perform better than the index fund by using margins. Can specify investment industries. Have not been around as long as mutual funds. Mutual funds: Generally managed. Higher cost. Not always follow indexes. You buy in and it is not as liquid. Takes longer to get cash out. Gets taxed by capital gains. Not traded on exchange. No options. No…
The magic of car ownership if you must have one
Vehicle lease vs purchase Many people have written about the topic of a lease or purchase of a vehicle. In most instances a vehicle is a depreciating asset. In other words you lose money on it. It is completely fair to not have the expense of a car. If you do obtain one expect to pay for it, the insurance, the maintenance, fuel, etc. A lease is an agreement with a dealer that you agree to pay the amount per month to essentially rent the car. You then get the option of buying the car at the end of the lease term. A car purchase you either take a loan or pay with cash. In order to decide which is financially beneficial for you let’s crunch some numbers. Example: A 2022 Toyota Corolla is MSRP 20k. 1. You pay cash. 20k is gone and you pay expenses for the car.…
The awesome fantastic magic of owning a property
Real estate: is it a goldmine? You can certainly search the internet for topics of wealth building and people that can advise you for a fee. What I have learned is that real estate is what you can make it. What makes it attractive for investors is that you can have a great yield (5% to 100%) on the money you use to purchase. You can write off depreciation of a property and maintenance. You can gift assets and be taxed less by the government. Property prices increase with inflation. You own a physical asset and can borrow against it. Maybe they enjoy fixing up houses. What are the negative aspects of this strategy? This is where many of these websites or advertisers fail to explain. What I found is that real estate is a lot of time and work. This asset is not quickly available if you need your…
Time is the most precious asset: know how to monetize it
Why you should always monetize your time…consider a side hustle. Any professional should always monetize their time because time is the finite resource that you do have. You only have a certain amount of time to devote to earning income. Anything that you were doing with your time that does not earn income or bring you some type of improvement in your life or pleasure you should probably not be doing. Calculating the amount you earn per hour is highly beneficial for deciding on if you should take a certain position or ask for more money or if you should be doing the activity that you were planning on engaging in. For example: It takes me approximately 2 hours to clean up my driveway after a massive snowstorm. If I were working as a moonlighter/contractor for those two hours I would earn anywhere from $320 to $640. It is not…
People are losing money on rent! Find the wealth!
If you have seen my other post about real estate you know the benefits of investing in it as well as the negatives. In my opinion the way we live is backwards. We should be buying property first when we are young not renting and we should be renting when we are older. Example: Young adult: You are 22 years old and just finished college. Starting your first professional career in banking. You earn $50000 per year. You do all the right things maximizing retirement, emergency fund, doordash on the side, making some extra money, start SEP ira, have a Roth IRA, and have an HSA account. You have $0 for a home down payment and you don’t have a lengthy job history for the bank to give you a home loan. You will be stuck living in a rental. You end up paying $1000 per month. You are spending…