Rank #1: IFB43: Back to the Basics Pt 1: The Anatomy of Stocks and Shares
This is part 1 of the 5 episode “Back to the Basics” series from The Investing for Beginners Podcast. Each episode covers the fundamentals of the stock market and investing to provide a solid foundation for those who are looking to compound their wealth over time. Here are the links to each of the episodes: […]
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Rank #2: IFB114: Buying a Home vs Investing in the Stock Market
Announcer: 00:00 You’re
tuned in to the Investing for Beginners podcast. Finally, step by step premium
investment guidance for beginners led by Andrew Sather and Dave Ahern. To
decode industry jargon, silence crippling confusion and help you overcome
emotions by looking at the numbers, your path to financial freedom starts now.
Dave: 00:36 All
right folks, welcome to Investing for Beginners podcast. This is episode 114
tonight, Andrew, and I are going to discuss a listener question. We got this
great question from Jack, and I’m going to take a moment to read the question
and then Andrew, and I will do our little back and forth and have some
discussion about it. So starting we have, Hello Andrew. I’m thinking about
buying a home monthly mortgage costs are currently cheaper than renting in my
area, and my family would be able to pay the down payment for me in cash. Do
you have any insight into the financial advantages and disadvantages of buying
a home? In this case, I have read the buying a home is not a great investment
unless you are renting it out due to the hidden costs of home buying. And the
fact that a house is a liability until you pay it off. Do you think I should
put the money I would use on buying a house to instead invest in a stock
market? I’d appreciate any insight you have into this topic. So Andrew, what
are your thoughts?
Andrew: 01:30 You
want to open this candle warm?
Dave: 01:32 So
yeah, apparently, yeah, let’s crack it open.
Andrew: 01:35 Maybe
let’s, yeah, let’s talk about the biggest financial decision that most middle-class
Americans make and how that relates to their finances. It’s a very obviously
emotionally charged topic. , and there’s a lot of different things and kind of
like we mentioned in the personal finance series, it’s very personal. So try to
listen through the whole thing without making the concluding decision on it for
your own life. , I’m going to try to just kind of think about all of the things
I know about it and maybe it will help shine some light for people who are
considering this. Maybe it helps if I talk about maybe where I’m coming from
with the context of it, I would consider myself the furthest thing from an
expert on mortgages and homes that you can find.
Andrew: 02:29 I
mean, I still don’t know, like I know there’s like multiple agents when it
comes to closing and then all this blah blah blah. And I like, that’s all just
like [inaudible] I have no idea. I was talking to like a home stager the other
day, and she was trying to explain to me how she works with a type of real
estate agent. I was just like, Huh. So I don’t know about that aspect. What I
do know is the financial aspect of it. And I also know that it’s something that
a, I’ve been considering him for quite a while, like in the like half a decade.
, B, it’s something I’ve, I’ve run a ton of numbers and spreadsheets I should
come to. Nobody’s surprise about the different kinds of ramifications behind
it. , I have, I’ve researched some of the historical data too. And so the,
there’s a, I think I can help somewhat.
Andrew: 03:22 The
first thing I guess that comes to mind is you want to think, so for me the,
these are some of the benefits I see for buying a home in general because my
kind of weird take on it being somebody who’s 29 in that millennial category
that I shudder just with that word millennial. But I, I’m in the millennial
category, and you know, the typical kind of American dream picture story was
always to buy a home, own it and live in it. And retire in it. , and as all the
news outlets and internet blogs and websites will love to tell you I’m
homeownership is down among millennials. It’s been trending in the opposite
direction, and they want to blame either Avocados or student loan debt or
Airbnb, I don’t know, pick, pick, pick your poison. Right? So there’s, it’s an
evolving and moving landscape.
Andrew: 04:24 And
I think in general the attitudes around buying a home are changing, at least
the public viewpoints on it compared to let’s say like 2015 to 2019. I think
people are maybe more open to this crazy alternative where somebody doesn’t
want to buy a home. So like in my case, love my parents where they’ve been
pressuring me to buy a home for quite a while. I do admit I’m in an area, in
Raleigh, in the, in the south where home prices are very, very good and it
probably would be a great investment for me. That being said, you have to kind
of weigh the pros and the cons when it comes to, there’s a lot of hidden costs
and hidden time sinks that come with buying a home. So you want to budget home
maintenance, and I don’t know what that would mean for anybody, what I’ve seen
online or our figures such as, uh, what is it like somewhere between one to 5%
of the purchase price per year is what you should budget for maintenance.
Andrew: 05:36 So,
you know, you might be living in the house, and the roof needs work, or the
HVAC goes out, you know, your toilet or your sink gets clogged. These are all
things that may be in the past. If you’re renting with an apartment complex,
they will take care of that. Now you have to take care of that. And so I think
a lot of people, particularly first time home buyers, obviously I’m going to be
a first time home buyer. That’s something to consider. Uh, secondly, you know,
there’s going to be a lot of maintenance, particularly if you have a nice big
backyard here in Raleigh. We have lots of trees. And so I have a friend who’s
around my age, and he recently bought a house. And then the thing about having
trees everywhere is you have to trim them down. Some of them kind of die and
they might, again, I’m not an expert, I think.
Andrew: 06:26 I
think if you have a sick tree, it gets the other trees sick and then they can
collapse and ruin your home. Uh, you have to trim them. You have to cut them
down. And you have to get a specialist to cut them in the right way, so it
doesn’t crash into your neighbor’s home. , you have to clean the gathers
because a lot of trees will make a lot of the leaves. Uh, lots of different
things. And then if like my friend’s family in southern California, it’s an
unwritten rule. If you have a bad looking lawn that you’re pretty much your
life’s out of control. So you need to make sure you have that maintained. And,
and for a lot of people that come from my area where I grew up, that means
hiring maintenance people, groundskeeping people because, uh, generally we’re so
busy with our lives anyway, so a lot of, a lot of times sinks.
Andrew: 07:15 So
for me, you know, the trade-off between having a home and renting, renting is
more expensive. It’s not the best financial decision. But for me, uh, with how
busy my schedule is, how entrepreneurial my drive is, uh, that’s why I rent.
However, a huge benefit of buying a home. I think this should be obvious too,
is when you retire, uh, if you have a home that’s paid off, then that’s one
huge expense that you do not have to pay. And so now when we start to combine
that with the things we talk about with the stock market and investing, now you
can live on a lot lower of a dividend income, let’s say because you don’t have
a $2,000 rent payment or mortgage payment that you’re paying for. You pay that
off. So for me, longterm, I’m looking at, okay, cool, if I can pay off home by
the time I’m 65, well then I can kind of get the best of both worlds.
Andrew: 08:13 And
so when I’m, when the time is right, then maybe financially that that will
help. There’s so many different other financial advantages and disadvantages
when it comes to the down payment. The even we’re not talking about yet, like
the potential returns for mortgages versus, you know, real estate versus the
stock market. I don’t want to get there. Yeah, I don’t want to get too far
ahead. So that’s, that’s the context of my kind of backstory on why personally
I don’t have a home, but I plan to have a home and a lot of it eventually has
to do more with lifestyle than it does with financial, with finances.
Dave: 08:56 But
there’s also that huge factor of let’s still remember retirement and the fact
that having to pay off home by the time you retire is going to be huge. So
that’s kind of where my first thoughts are. I would agree with all that. Those
are all fantastic points. I like the point about the lifestyle part of it
because that kind of hits home to me a somebody that has both owned homes and
we lived in apartments and gone through the buying of the home and the selling
of the home and all the ins and outs and funds of that. And then the, I guess
relative ease of renting an apartment and then moving in. You know, I have to
admit as somebody who lives in, in the Midwest and has to endure the winters,
and I do say in endure, uh, the fact that you don’t have to shovel your
driveway to go to work every day is a blessing, uh, beyond all measure.
Dave: 09:52 And
you know, the that’s one of the things that a lot of people don’t, it’s not
discussed as much is the aspect of the upkeep slash maintenance of a home when
you buy it. And Jack is talking a little bit about the potential liabilities,
and that may not be up necessarily in money or large chunks of money, but it is
going to be, as Andrew said a time sink. And those are things that will take up
a large portion of your time. I was, uh, I was having nightmares slash
flashbacks of uh, Andrew talking about a home with lots of trees in the
backyard because the first thing is two things pop into my mind though. The
shade would be cool in the summer. And then the nightmare part of it would be
the leaves that you would have to pick up in the fall.
Dave: 10:44 That
is a very long, tedious process. Now of course you can pay somebody to do that,
but then that starts to creep into this as an investment part of it when I
guess, so questions that I would ask myself as if I was in Jack’s shoes is he’s
mentioning that the mortgage costs are currently cheaper than renting in his
area. You know, I know none of us to have a crystal ball, and we could see into
the future. I certainly don’t. And I’ll give you an example of what I’m going to
illustrate here. If something that happened to me personally. So my wife and I,
when we bought a home in Minnesota, when we live there, uh, the mortgage costs
were cheaper than renting a because we were renting a home before we moved into
another home and it was cheaper. But what happened was, as the city that we
lived in, uh, they decided in their wise decision making to raise our taxes.
Dave: 11:43 So
at first it was just an additional $100 a month on our mortgage. Then it became
$300, and then in two years, it went from our mortgage payment is what it was
to be $400 more in a little less than two years. And with more conversation
about, I’m raising it higher. So it quickly became way more expensive than we
were anticipating and that was a very unpleasant surprise. Then you have to
tack in all the other things that you have to do. The yard that we had for the
home, which was nice, was also bigger and it was far too big for my old bones
to have a push mower. So I had to buy a driving more, which are substantially
more expensive than a push or I could do a service, which is also very
expensive. So you know, those are all those things that I, we didn’t talk
through and have a plan for.
Dave: 12:39 What
were we going to do when we got involved in that? Excuse me. And I also want to
illustrate something that Jack said that he said it’s not a great investment
and that is very much a truth. A, there’s a lot of fallacies out there about
different things, but buying a home is not an investment, and it is. I’ve
talked to bankers and mortgage brokers at Wells Fargo, and I work there, and
they all said the same thing. It is not an investment. Uh, if you’re looking at
it as an investment, then you need to do other things with it, like renting it
out or something along with those natures. , it is not an investment. And a
banker said to me one time, which I thought was kind of, uh, an astute judgment.
By and large, we’re going to be paying for somewhere to live for the rest of
Dave: 13:27 And
what is more important than necessarily owning a home is finding something
that’s going to fit your lifestyle. Andrew talked a lot about a lifestyle and
how that fits in with thing. And that is crucial because you’re going to be spending,
you know, you spend 40 to 50 hours a week at work depending on what it is you
do. And you spend the rest of that time at your home for the most part, unless
you’re like Andrew and you’re a party animal, and you’re out all the time. ,
he’s not a party animal, but, if, uh, so you’re going to spend a lot of time in
your home, so it has to be somewhere, you’re comfortable with you like you want
to be. And it, it, it, I guess the crucial thing is to think about what it is
you want for your life beyond just the money part of it.
Dave: 14:14 You
know, where do you want to live? If you’re okay living in an apartment and it
fits all the different parts of your life that you want, then that’s great. And
if you want to be in a home because that fits your life and you know, you love
being outdoors; you love doing all the outdoor stuff, you, you ha, you know,
you’re way more handy than I am. I’m so not handy. And so having that ability
and those skills and wanting to do all that stuff, then a house is going to be
perfect for you. It’d be, you’d be miserable living in an apartment if that’s
the case. Uh, so those are things that I guess kind of spring to mind we are
doing, we are reading over this question and Andrew, and I were talking about
earlier, that was one of the things that I thought stuck out to me.
Dave: 15:10 Do
you have any other thoughts?
Andrew: 15:12 Yeah,
no, I love that. , the idea that a house is not an investment I think is
to the guy’s point. They that you were talking about. Yeah, you do
have to pay, what is it, death and taxes, the only to certain things in life.
So exactly. You even you pay off the home, you still have to pay those property
taxes as you talked about in your example too. So like you say, you’re always
paying to live somewhere. The one thing I, and I don’t want to like attack real
estate investors or anything like that, but I think the, I, there’s this idea
to where I hear the lot, personal finance, podcasts, the personal finance
world. This idea that well, I’m going to buy or I’m going to get a mortgage and
then I’m going to use renters to pay the mortgage.
Andrew: 16:03 But
we, what would you need to understand is for one and Ramit Sethi, he’s a
personal finance expert. He, I saw a tweet months ago when he said this, but
for one rent and Margaret’s prices don’t always go up. And he had like a
perfect example where, I think it was in New York or something, but alike a
real-time example of, of how rents didn’t always go out. Margeson didn’t always
go up. So you lock in the mortgage. If the rents in your area go down, well,
what are you going to do? Either kick out your renters, or you’re, you’re just
going to have like a negative cashflow. And that’s in an ideal state, a case.
What about the nonideal case where let’s say we have a recession and now people
are flocking from whatever your house was renting that to something a little
bit less, you know, maybe like lower-income type apartments.
Andrew: 16:57 And
now either you’re, you’re struggling to find renters, or you’re having a lower
what your prices were and now your, your cashflow negative or used to be
cashflow positive. Or you know, what I think might even be more, more of, more
of a potential issue is as you can’t even fill it. And so now you have a front
the hole costs yourself and now all of a sudden you’re not, it’s not like an
investment for you. Not to mention. , there’s a reason why man, whether you
call them, the people who like Dave, like the people who do maintenance on the
home and they have them like, like attached to real estate investors. That name
is, it’s slipping my mind. A handyman likes management companies who, yeah,
they, they say like, oh, a turnkey real estate investment. Is it like
management companies? Yeah, I think so.
Andrew: 17:53 People
have the like deal with the renters, deal with noise complaints, deal with the
maintenance of a house. Like either, that’s going to be you, or you’re going to
have to hire that out, and you know, it’s not just this free thing. So I think
Dave Ramsey says all the time, it’s like you’re, you’re, you’re giving yourself
a full-time job when you become that. And today’s point, if you like to do that
kind of stuff, then great. But realize that that’s another time liability
versus the stock market, which we love to teach that you’re not giving yourself
a job. You’re researching the stocks and then occasionally updating yourself on
what’s going on with these stocks, but you’re not putting in, you know, 10 2030
hours a week maintaining properties or anything like that. So the idea, I think
that’s an older idea that has, I think through the years, especially through
the housing bubble, it’s, it’s an idea that’s changed over time.
Andrew: 18:50 That
real estate’s just like a no-risk investment. There’s a lot of risks and a lot
of ups and downs and, and a lot of liabilities both from expenses and from
time. So thinking, yeah, it’s, it’s a great investment if, if you’re renting it
out can also be, it could not be. So I think to be careful with that. The other
thing that pops to mind that I can give some contacts on being the type of
person I am with, you know, obviously wanting to see how the stock market
returned over very many decades. Lots of studies, lots of data, lots of
research saying that around 10% per year is what the stock market returns. You
take out the inflation; it’s a 7% normally nominal, nominal. Uh, so after
inflation it’s about 7%, 10% for the dollar amount. When it comes to real
estate, it was around 5% over a very, very long-time period.
Andrew: 19:50 But
what was interesting about that was depending on the area, the Oh the values of
real estate can fluctuate a lot more. So I think that’s something to keep in
mind. Yes, I think it can be a good investment. Yes. I think buying a home, you
know, and having it as an as a substantial asset for the rest of your life,
that’s a possibility. But I think some of the narratives behind the in the past
has always been, well, it’s like a guaranteed investment, whereas you really
need to be thoughtful and try to plan for all of the potential liabilities that
come with it and understand that it’s not anymore guaranteed than putting money
into the stock market is. And it’s a potentially a lot more hands-on than the
stock market would be.
Dave: 20:40 All
right folks, we’ll, that is going to wrap up our conversation for tonight. I
hope you enjoyed our conversation about buying or not buying a home and whether
it can be an investment or not. So those are some very deep things to think
about. And this, as Andrew said, it’s going to be the word just for most of us
asset wherever ever going to own possibly. So trying to think through all the
ramifications before you do it is very, very critical. So without any further
ado, I’m going to go ahead and sign this off. You guys have a great week. Go
out there and invest with a margin of safety and we’ll talk to y’all next week.
Announcer: 21:11 We
hope you enjoyed this content. Seven steps to understanding the stock market
show you precisely how to break down the numbers in an engaging and readable
way with real-life examples. Get access today at stockmarketpdf.com
until next time, have a prosperous day.
Announcer: 21:37 The
information contained is for general information and educational purposes only.
It is not intended for a substitute for legal, commercial and or financial
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The post IFB114: Buying a Home vs Investing in the Stock Market appeared first on Investing for Beginners 101.
Rank #3: IFB55: The Worst Money Advice that Beginners Always Hear
Welcome to episode 55 of the Investing for Beginners podcast. Tonight Andrew and I are going to discuss some of the worst money advice you can get. Invest 10% of your income Investing in a quick fad to make money quickly Try to get to cute and taking on more complexity just for the sake […]
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Rank #4: IFB92: A Refresher Episode on Some Investing Basics
Announcer: 00:00 You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew and Dave, too decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave: 00:35 All right folks, well […]
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Rank #5: IFB64: Personal Finance 105: Maximizing Passive Income
Welcome to Investing for Beginners podcast this is episode 64. Tonight we’re going to conclude our series on personal finance, this is episode 105 of our little series here. Andrew’s going to start us off we’re going to talk a little bit of passive income so Andrew go ahead and take it away. Andrew: […]
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Rank #6: IFB97: A List of Really Unwise Financial Decisions
Announcer: 00:00 You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginning led by Andrew Sather and Dave Ahern. To decode industry jargon. Silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave: 00:36 All right […]
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Rank #7: IFB52: The Art of Finding Undervalued Stocks
Alright, folks well welcome to Investing for Beginners podcast. This is episode 52 Andrew and I are going to talk about balancing the art and science of intrinsic value. Today we’re going to talk a little bit about intrinsic value, one of my favorite subjects and Andrew’s as well and this should be a little […]
Rank #8: IFB23: Warren Buffett Investment Advice to the Average Investor
Welcome to session 23 of the Investing for Beginners podcast. I am Dave Ahern and I am joined by my co-host Andrew Sather. In today’s session we are going to discuss some quotes from the great Warren Buffett. Buffett is arguably the greatest investor of our generation, possibly ever and he has been a fountain […]
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Rank #9: IFB85: Finding Good Dividend Stocks By Using Better Ratios
Announcer: 00:00 You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave: 00:34 All right […]
The post IFB85: Finding Good Dividend Stocks By Using Better Ratios appeared first on Investing for Beginners 101.
Rank #10: IFB04: Why DRIP Investing Your Stocks Should be Integral to Your Investing
DRIP investing is one of the untapped resources to investors. It can be one of the keys to growing your wealth. Compounding is one of the eight wonders of the world, according to Albert Einstein. Utilizing it with DRIP investing is a great way to double compound your investments. We will discuss this and much […]
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Rank #11: IFB115: How to Make Money with Dividends When It’s Just Pennies
Announcer: 00:00 You’re
tuned in to the Investing for Beginners podcast. Finally, step by step premium
investment guidance for beginners led by Andrew Sather and Dave Ahern. To
decode industry jargon, silence crippling confusion and help you overcome
emotions by looking at the numbers, your path to financial freedom starts now.
Dave: 00:37 All
right folks, we’ll welcome to Investing for Beginners, the podcast. This is
episode 115 tonight we’re going to go ahead and take some more listener
questions. We’ve got some fantastic questions that Andrew and I wanted to
answer on the air. So we’re going to go ahead and talk about those. So without
any further ado, I’m going to turn it over to my friend Andrew, and he’s going
to go ahead and read the first question for us.
Andrew: 00:59 Perfect.
So I have a question here from Camberley. She says I have some questions
regarding IFB episode four the eight or the fine stock indicates a failing
business. , I guess let’s go through these questions one by one. Number one. If
you don’t know this, a falling stock until it’s too late, whether the options
is the only option just to sell right then and accept your loss. So if you
don’t mind, Dave, I’m going to take this one first. Absolutely. Go for it. So
that’s, it’s tough, right? Because if we could figure out how to avoid falling
stocks, we would do it. We would all do it, and we would all be very, very
wealthy. The, so she did mention she listened to the episodes. So I did try to
explain how you need to figure out the difference between a stock that is
falling because the business is bad and a stock that is falling because of
temporary sentiment that is negative in the stock market. I think a, and it
goes really to what we try to teach.
Andrew: 02:08 To
understand that very important difference, you have to understand the
financials of a company. And so that’s why a tool like the value sharp
indicators spreadsheet can be very useful in understanding the financials. So
as an example, if you look at a stock and let’s say, the perfect example is
like some of the recent developments we’ve seen, which I find this comical
yesterday. Um, you know, we’re recording this podcast format, so people who
might be listening monthly there. So it’s, it’s Kinda tough to do news on the
podcast, but I’ll tell you we’re, we’re recording this at the very beginning of
August 2019, and so there was like two, there’s like two or three big news
themes. One of them is the Federal Reserve just in another rate cut, um, in a
time where rates are arguably, really low already. Um, that’s a separate issue.
Andrew: 03:05 Second,
but the president is involved on Twitter with that as well. And then the second
thing is the trade war, which is still going on. And so we’ve had this thing go
back and forth, back and forth between Donald Trump tweeting about tariffs and
how maybe we’re making progress with the trade talks with China. And then stocks
jump up and then, oh, maybe Trump has a bad day. And he says, I want to add
more tariffs. And then it’s just funny to watch the stock market crash after
that. So we didn’t have a crash per se in the, in the entire stock market
yesterday. And that might be because of some of the balance between like good
news from the Fed cutting rates and, and bad news about the Trump tariff tweet.
But like in the apparel sector particularly, and some of these other stocks
that export a lot to China, they really, they took, took a big, big hit.
Andrew: 04:07 So
that can be one example where if you look at the financials of the business,
and right now that theme is apparel stocks among some other ones too where of
course this is all going to be a personal opinion. But in my opinion, the negative
sentiment does not, does not; it’s like doesn’t justify what we see in the
financials. So what we see in the financials, depending on which stock you’re
looking at, um, you might see maybe an earnings drop where maybe earnings got
cut in half or maybe revenue went flat or even went lower. The things of that
nature. Right. And then you compare that to how our stocks doing. So like as an
example, in my opinion, let’s say a stock goes down 25%, but maybe earnings are
down 10% that might be an obvious example of like, well maybe they’re
overreacting, but it’s not always black and white like that either.
Andrew: 05:16 So
I kind of struggle to save it to say that that, oh, you compare the
percentages. I don’t think that’s the case either. And I think Wall Street’s
usually pretty smart about; they’re looking a little bit forward versus in the
rear. However, if you’re, if you’re taking a longer-term approach and you’re
okay with like, there’s a big difference between a, a company with earnings were
there maybe 20% less profitable for the next two years, three years. And so
Wall Street doesn’t like that. But I’m a longterm investor; I don’t care. I’m
looking ten years out, and I understand that, that there are these cycles in
profitability, even in some of the best businesses. And so I’m not going to
worry about that kind of a drop versus okay. A situation like toys r us a couple
of years ago, I’m, I’m failing to think maybe like GE more recently and I’m
sure there are some other stocks that are having, we’re talking about like
major, major profitability issues where sometimes you can see it as a company
with negative earnings.
Andrew: 06:24 That’s
a really easy one. , I mentioned debt to equity increasing and the leverage
getting kind of out of hand. Sometimes you’ll even see a stock with more total
liabilities and total assets, which I can’t even imagine how sustainable that
would be. Or even something as simple as, you know, they’re just burning
through cash from free cash flows or operating income. And it’s, it’s getting
to a point where it starts to look concerning, and it’s not some small thing,
but maybe another scene over very many years, you know, versus just being one
year hiccup, I guess. There are so many different factors, and there’s not
going to be, again, one black or white answer. And you know, every industry is
different. Some of them kind of have more ups and downs than others. And these
news developments are always different.
Andrew: 07:18 You
know, you always have different political issues, you have different economic
issues, and there’s a lot of different cycles to go along with that too. So I
think having more experience just being tuned in with what goes on in the
market, I think that helps to have a toe dipped in. I think reading
particularly about historical events, and I think that gives so much context
because there’s something about looking at the past and not being emotionally
invested in it and just kind of observing it. And then it’s funny how you can
see the same parallels today. So one great example of heard referenced in
several books is like the Cuban missile crisis and how the stock market
crashed. And so, I don’t know, maybe looking back today from the safety of not
having missiles pointed at us at our other office chairs and our nice air
conditioning, that’s easy for us to say, well you know, these investors are
Andrew: 08:17 That’s
stupid. The type of businesses that were crashing is going to be around five, ten
years later, regardless of whether missiles hitting from Cuba or not. But at
that moment, Wall Street still freaks out. People still sell the type of stocks
that you would think they should never sell in. The type of businesses that you
would think would be around for a very long time. And so when you see a similar
type of scare or something that you can perceive as being more temporary rather
than a 10 or 20 year kind of development, then maybe you start to see those
same parallels and you see the stocks crash and instead of feeling nervous and
feeling like, well, do I need a sell? You feel confident because you, you
understand like historical context. You understand that what the stock market’s
doing is kind of like that’s the way it is.
Andrew: 09:07 You
know, get mad at a fish for swimming. You don’t get mad at the stock market for
behaving in the way it does and, and you don’t get mad if your stock is falling
in that case because you understand that this is just the way of things, the
natural way. But that also, so having that historical context helps. Having
that kind of ear to the ground helps. But also I think you need confidence in
your analysis that the business is doing fine and that this is a temporary
thing and that the business model is strong. Another part of, of seeing the
strong business model outside of maybe noticing that these historical cycles
are kind of normal or maybe the company has these, these sort of temporary dips
in their earnings or their revenues, you know, and, and that’s not something to
be concerned about.
Andrew: 10:01 I
think another big indicator for me that makes me feel good about the stock is
when they have a strong balance sheet. So you know, I can have a stock that may
earn 50% less than; ideally, I would like it to or that Wall Street would like
it to. But the main, if they’re stuck with, with all these assets, they have
all this property, maybe they have all this inventory or all this equipment or
even just a ton of cash on their balance sheet, or they have like no debt. It’s
very hard for a company that has no debt to go bankrupt unless they suddenly
have terrible, terrible losses where you know, they’re like throwing cash into
a furnace, and you can pick those out too. So I think having, to understand the
balance, you need to understand the fundamentals of financials and the
Andrew: 10:49 So
it kind of all circles back to whether it’s the value type indicator
spreadsheet, whether it’s some other valuation tool, whether it’s, making your kind
of analysis based on whatever metrics you know, and then building that base of
knowledge as you go along. All of those sorts of things help you make that
decision. So the question doesn’t become, what are my options? What am I
options for having a falling stock until it’s too late? Right. , the question
becomes, is the stock falling? Because the business is really in trouble or
because it’s just a temporary thing. And so the question then is, am I selling
because yes, the business is bad or am I just going to hang on? And so if I’m hanging
on, is it a loss? You know, can’t use the words to accept your loss. Yes, you
have to accept your loss when it’s a stock in a business that hasn’t performed
from a business perspective the way you’d like, but if it’s something that
you’re confident is going to bounce back based on all of these things I’ve
said, then it’s not really a loss. And this, I think buffet said, or somebody
said a quote where it’s, it’s not a loss until you sell. And so in those cases
you’re, you’re hanging on and waiting for the further developments — so good
question. A good follow up to what we talked about in that episode. Hopefully,
it wasn’t too repetitive, but those are the types of things I would think of when
it comes to a stock that’s falling.
Dave: 12:24 Yeah.
Those were the things I would think about as well. , all those, all those
different ways of looking at it. And I, you know, I guess the, to hammer your
point about the difference between the kind of the near term and the far-term.
Look at the company yesterday when the Fed announced those losses are the
losses, the cuts in the rates, particularly the banking sector got hammered,
yesterday, and it will bounce back because most of these companies haven’t even
reported their financials yet, for their next quarter.
Dave: 13:00 And
so the fundamentals of the company hasn’t changed, but now all of a sudden the
stock is going down because they’re anticipating that it could change, but they
don’t know. And so wells Fargo was taking a beating yesterday because everybody
thinks they’re going to make less money because of the cut in the rates and you
won’t know that for another two or three months. So it’s, it’s, you know like
Andrew was saying, it’s an overreaction to a short term news event. You won’t know
until the next, the next quarterly reports come out, or that, or the annual
report comes out. And I think having the advantage to having a smaller
portfolio that we’ve talked about in the past is you don’t have a lot of things
to look for. And so if you have 15 to 20 stocks, then that’s 15 or 20 things
that you can easily create.
Dave: 13:53 You
know, a checklist if you will, of things that you can look at on a quarterly or
every six month basis and looking at a way of, you know, analyzing, you know,
it could be just a simple thing like just looking at revenue, earnings and debt-equity
and that’s it. And maybe those are the only three things that you pay attention
to. And if you find something in any of those ideas that look like it could be,
you know, something that is caused for our alarm, then you can dig deeper into
it. But I think a great focus is a debt to equity. Because as Andrew very
adroitly said, if a company has no debt for them to go bankrupt is going to
take something catastrophic. You know, like every iPhone all of a sudden
immediately burst into flames and nobody can use them. Well, that would sink
apple pretty darn quick, but they have almost no debt on them, on their under
Dave: 14:52 And
so for them to have a permanent loss that would be significant would be, you
know, a catastrophic event and so, and something like that as something that
you’re going to be ordered to in the news. And I’ll give you another example of
kind of a difference between the examples I was showing you and something more
permanent. So everything that we talked about a couple of episodes ago with Gamestop
and my investment with them, they’re down, it’s now down to $3 and 83 cents a
share. So it’s even fallen further from two weeks ago when we discussed the
stock. And so those are something that’s a permanent loss. And what do you do
with that? You either, you either hang onto it and the vague, vague hope that
it’ll go back up or you accept your loss and sell out of it and try to learn
from, from what happened.
Dave: 15:44 And
you read a lot about that, that people try to learn from their mistakes as much
as they do about their gains or their good choices. And I think that’s one of
the crucial things that people need to focus on when they’re talking about
investing, is trying to look at what happened, why did it happen, what, what
kind of fallacy did I fall into? Was I making a good assessment of what was
going on with the company? And in my case, obviously I was not, and like I told
Andrew, I was drinking the Koolaid. I wanted to like the company because I fell
in love with it. And so I did, I tainted what I was looking at based on that.
And those are, that’s a normal fallacy. It’s a normal thing to happen to
people, but that’s something that you can do when there is a loss with your
company is you can try to look at what happened and why it happened like that.
Dave: 16:42 And
unfortunately it’s part of the risk of investing in, in a company, in the stock
market is that there are, there are going to be losses sometimes and not
everybody’s going to hit it out of the park. Even Warren Buffett has had
mistakes. Charlie Mugger has had mistakes, but when these providers had
mistakes, he had a company that he invested in not too long ago that went
bankrupt, and he lost a lot of money, and it’s unfortunate, and it was a
mistake on his part. But you know, he, he incorrectly assessed the management
of the company, and that’s what caused the company to go bad was they made a buck.
They made a bunch of very bad decisions, and it caused the company to go
bankrupt. So nobody’s perfect, and you know, try not to beat yourself up when
you’re, when you’re looking at these things and try not to let it discourage
you from investing in the stock market. Because as Andrew and I have talked a
lot about, this is one of the greatest ways to create wealth for yourself as you
get closer to retirement or any other options that you want to have farther
down in your life.
Andrew: 17:44 That
was very good. Brilliant. I think. Said after that. Okay. Okay, so let’s, let’s
answer the second part. So what happens when a company leaves the stock market?
Does this only happen when they declare bankruptcy, or are there other times
also what happens to shareholders’ investments? So there are several ways that
a company could exist. So a company could go private. We saw this with Dell
computer a couple of years ago. Basically what happens is whether that’s a
group, like whether it’s a group inside of the company, insiders, management,
and board of directors, a what, or if it’s just some private group with a bunch
of money and they want to take ownership of that company. So they can make an
offer, hey, we’re going to, we’re going to pay, let’s say, Dell, I don’t
remember what they closed that. I think it was something like $30 a share. So,
hey, we’re going to, we’re going to pay $30 a share to all of your
shareholders. Um, and so that comes out to whatever, $2 billion, whatever it
Andrew: 18:48 And
then now the shareholders, they, they, they hold a vote, then they say it’s
called the proxy vote and they all vote on whether they want this deal to go
through or not. And so if the deal does go through, um, the group that is
taking ownership of the stock, they pay the money, and then they acquire all
the shares, and all the shareholders get the pay that and then that company’s
ticker symbol disappears and it’s gone. Another way is a merger and
acquisition. We’ve talked about those in the past, in the archives and similar
kinds of the story except instead of a private group taking it, it’s a public
corporation. And so there’s a lot of different ways those transactions can go
through. It can be an all-cash thing. Like the example I just said, it can be a
mixture of you get some shares of the company that’s acquiring the business you
own or, um, you could get all shares and no cash.
Andrew: 19:47 So
those are some of the things that could happen. And then the same thing happens
where the ticker goes away. What I found interesting, as an aside real quick is
as I was doing a lot of historical research on, a bunch of different stocks and
even with some of the stocks that I’ve owned so that I would like to recommend
some for the leather. And then I was even; I was tracking them, I was doing
this for a while where I was tracking them after I sold and to see how they did
afterward. And that’s kind of, if you want a good way, the torture yourself,
that’s a great way to do it because now not only are you highlighting the times
where you sold for a loss, but then you’re also seeing them recover and bounce
back and now you see how much you could have gained.
Andrew: 20:30 So
I don’t know if I would recommend doing that. Um, but, as an effect, effective
doing that, I saw two or three stocks I owned that eventually became acquired
in a merger and acquisition. And when you research, on the history of the stock
market, the history of stocks, backtests, things like that, there’s not a lot
of talk about how those and of um, transactions happen. And so I think, you
know, as we talked about this, at least a year ago I think where I have that
booklet, right, with all these different stocks back in the 70s, and, and this
big long list and some of the stocks on, there are a bunch of names that we
just never heard of in today’s world. But you know, so s coming as somebody you
might think, oh, well those have just been a bunch of stocks that have gone
Andrew: 21:26 And
so those would have been terrible investments. But that’s not always the case.
A lot of these stocks can and do get acquired or go private, and so you don’t
hear their names anymore, but the shareholders aren’t necessarily left out to
dry. They can also be handsomely rewarded. And now they can take that cash and
move it towards a different investment in the stock market. A lot of times with
the mergers and acquisitions and even companies going private, you know, the,
as those proxy votes happen, a lot of times they’re not going to agree to the
deal unless it’s a good deal for them. And so a lot of times a company who
wants to acquire another company will have to pay a premium for that. And so as
a shareholder who owns that, that’s generally a pretty nice, pretty nice deal
for you. So, you know, don’t, don’t look at the past and look at how, how much
the names have changed and made them make you think that all those past
companies went bankrupt.
Andrew: 22:26 That’s
not always the case. And understand that this is a way that stock tickers kind
of leave, the indexes. And then obviously the last thing that happens is a
bankruptcy, which we’ve covered that in the past too. Um, those leave the
index. What happens is goes to the courts. Usually, the stockholders get
nothing. The bondholders sometimes get some of their investment back, but all
depends on how much money’s left, how much, how many assets are left. And
sometimes the bondholders get like 40 cents on the dollar to what they were
owed. So this is um, kind of the, the different scenarios. There might be a
couple more. I’m not thinking of it in general. These are the big ones that
you’ll tend to see, and so it’s not always bad and kind of what I was saying a
couple of weeks ago, I tend to have maybe that personality where I look at the
worst case scenario, which will be great. But at the same time, um, maybe that
kind of sheds a negative light on really, um, some of the great things that
happen with the stock market. And so I think, you know, holding stock in a
company that gets acquired can be an excellent thing. The ideal is to have
these types of long investments where they could pay you dividends. I continue
to increase, and you have a nice income forever. But also taking the gain every
once in a while is nice too, and that can happen as companies leave the stock
Dave: 24:01 Hello,
Andrew. , I’ve been trying to binge your podcast as much as I can. We talk so
much about dividends. However, I started investing in Robin Hood started in
early May before I heard you don’t like Robin Hood. Haven’t quite understood
why yet. I have thrown money into it way too fast without making much thought
besides looking at which companies I know that are successful like Disney and
will continue to do so. Other ideas they use, we’re looking at a three month,
one year and five year past and if they seem to be trending up, I bought some,
but back to dividends. I’m trying to figure out how to make money based on
those because I only have made 30 cents on one stock so far and 18 cents on
another. I couldn’t imagine investing millions to make thousands of dividends
because it would take me a hundred years to get to that point. I don’t know
enough about investing obviously to get the ins and outs, which is why I’m
listening to your podcast. I appreciate the time taking to answer my question.
Andrew, what are your thoughts after all you are the Drip King.
Andrew: 25:10 I
love it. So, um, the Robin Hood thing, I don’t want to get too into that. I
think maybe re-a listen to the episode, bunch of reasons why their business
model, um, there are better options for a standpoint and the fact that they
don’t drip, which kind of leads into the second part of the question. And so
yeah, totally get the whole thing with the dividends and seen such small
amounts in the beginning and thinking, how is this ever going to make me
wealthy? I get that. And that’s good; it’s a, I think it’s a, it’s a, something
that began there. Investors need to get past. And I think a lot of them need
to. And so I talked a little bit about um, being optimistic and, and some
examples of companies that if you invested and did the drip, how I became fantastic
returns for a lot of these investors.
Andrew: 26:09 The,
the thing I would say about this is when you look at a dividend, you don’t want
to look at it as a one-time thing. So when I’m buying a stock, and I’m buying
it for the dividend, I’m not buying it for the dividend today. I’m buying it
for the dividend ten years, 20 years, 30 years and 40 years later and the, and
the most ideal of cases. And so what’s nice about buying a stock with a
dividend as you’re just putting that money in once and now you have an income
stream. So think of it like the way people think about buying rental
properties. People like to buy rental properties because you kind of, you have
the mortgage that you pay off once, but then now you’re getting this recurring
sense of revenue from people who are renting from you. And so stock is the same
way, except you don’t have a lot of the downsides that come with rental
Andrew: 26:59 And
so not only do you get, you know, you invest that money once you got a dividend
in year one, and then if you hold it again, you get again in year two, year
three. So that, you know, if you got 18 cents, it’s not just the 18 cents
sister, you’re going to get 18 cents next year and next year, next year, next
year. So eventually, you know, hopefully, that, that will pay for your
investment on its own. Now you also have to take into consideration that
companies are going to grow that every year. So if they’re doing 18 cents this
year, maybe next year they’re doing, like I had a stock yesterday eland their
pick. I loved, I loved seeing this, by the way, news that they, they upped
their dividends by 25%. So you know, if they could do that every year, men, the
type of compounding you will see.
Andrew: 27:50 So,
you know, if it’s 18 cents this year, um, maybe it’s 20 cents the next year,
maybe it’s, um, 25 cents next year, 30 cents next year. And so that’s
compounding. And companies all are trying to do that when they’re paying a
dividend. And if they’re not, you know, you need to get out, and you need to find
a company that is so, so that’s growing and you can see how it’s expanding and multiplying
over time. And then you can also throw in the compounding that you get from
re-investing. So if you take that dividend in year one and instead of saying,
Oh, I’m going to buy a piece of gum with it, maybe you put that back into the
stock and now you’re accumulating shares of the stock. And so as you accumulate
more and more shares of a stock, it’s going to pay you higher and higher
dividends. So now the company is growing the dividend, you’re growing the
dividend manually by reinvesting.
Andrew: 28:46 And
so it starts to snowball from there. And like I said, you’re not looking at it
year one, I’m looking ahead at year 10 and looking at those dividends. And
that’s really where you’ll see the type of returns. So obviously it’s going to make
finding the right companies to do that. You want to find companies that are
going to grow their dividend. You want to find them that are going to do it
without sacrificing the longterm health of the business. So that means you need
to be in fundamental, really good companies with good profits and you also need
to hang on and, and one thing that we know about the stock market is it goes
crazy up and down. And um, kind of like that first question today, you’ll have
stocks that fall, and you might feel like it’s, it’s too late. And I wish I
would have caught this and sold it before it fell.
Andrew: 29:35 While
that’s, it’s always going to happen if it’s not the stock, it’s the next stock.
So how do you recover from that? So if you’re thinking ten years ahead instead
of this year, well then I’m thinking I’m going to hold through this because
everything else looks fine. So that’s really what you need to think about with
the dividends. And again, I always stress like trying to work through some of
those hypothetical examples yourself and really if you can see how the numbers
get insane as the longer length you let it compound the, the better stocks you
buy that grow their dividend year after year after year. It multiplies through
a lot. So yeah, in the beginning, it’s really small. I’ll give two examples of
just how powerful this can be. Number one, I first started the leather, this
was 2014, and for those of you who don’t know, super quick snapshot, Eli
Leather, I have a real-money portfolio.
Andrew: 30:30 It’s
a Roth IRA. I’m putting a $150 a month in it every month, and I’m buying one
stock with that $150 a month. And then those are giving dividends, and I’m
reinvesting those in a drip program. So that first year I think I made, cause I
started there in October, I wish I had this pulled up, but it was probably less
than the dollar in dividends. And then you fast forward three or four years,
and I had something like $150 in dividends. So what was that? Well, first it
was that first stocks dividend grew. So maybe it grew from like let’s say 18
cents. Maybe it was like, I don’t know, 25 cents. Right? But it, so that grew
and then it was accumulating shares, and it continues to the payment that
dividend year after year after year. And so that helped to the dividend, payment.
And then each new stock you’re buying, that’s, that’s a new income stream
that’s coming in.
Andrew: 31:31 So
not only is it not just the first year, but it’s also all the other investments
you have coming in. Those are all adding to it. And then when those are all
growing, now it’s multiplying even faster. So I, in that case where I was three
or four years later, I had a special dividend come in from one of the stocks. I
had a pretty large allocation, and so that’s that combined with the other
stocks that were growing, combined with the fact that I have more money in the
market versus when I first started. So now we’re talking about $150 in that
year in dividends versus just like 18 or a dollar, whatever it was the first
year or so. A part of it is patient. Part of it’s the compounding part of it is
as you put more money in overtime, that’s going to grow.
Andrew: 32:18 But
it’s really, I think the biggest thing is putting that money in first and how
it’ll pay you a dividend continually and growing continually over time. That’s
really how you’re going to make your fortune, so you’re not going to see
overnight, you’re not going to see it in year one. I think the perfect example
too, to wrap it up with the second example, the perfect example of this is
Warren Buffet and I talked about this and then an email I sent out a couple of
days ago. He put something like one point $4 billion into Coca-Cola back in
1989, so I don’t even know if I was alive back then or not. But really in the
world of investing, that’s not a crazy long period. That’s 20 years. So 1.6
billion today, 20 years later, he is making 600 million-ish in dividends every
year from that Coca-Cola investment. So almost half of what he put in back then
he’s getting, and not just once, but every single year.
Andrew: 33:23 The
imagine like if we have those, that type of an opportunity, you know, to make
that kind of investment now people would be, everybody would be a billionaire
cause how can you, you know, put money in once and have it double basically.
Essentially it’s doubling every two years. And those, then those dividends are,
he, he’s funneling those into other companies, and they’re making even more
money. And that’s really how Buffett’s made his fortune. And it hasn’t been
something that’s, that’s because of what he did in one year. It’s something
that’s accumulated over the years. So I hope, you know, every, every time I try
to introduce drip and, and get people excited about drip, I tried to come at a
different angle. And I hope one of these times that I explain it to people, and
it lights that fire for you.
Andrew: 34:13 And
so that’s just another way of, of how these dividends can build great fortunes.
It’s a castle’s not built overnight. It’s built brick by brick. And the same
thing with your wealth. The same thing with income streams and the same thing
with um, the way that dividends are going to make you wealthy. And so those,
for those reasons and probably more that I haven’t thought of today are all
reasons why you can take those small dividends and, and feel confident that
over time it can lead to serious, serious gains.
Dave: 34:47 That’s
perfect. And you know, there’s not much more I would want to add to that. I
guess a question that I have for you when we talk about the returns of the, of
the stock market over the last, you know, period, whatever you want to pick,
how much of that is based on, how much is that including dividends or?
Andrew: 35:08 You
gave me a softball.
Andrew: 35:11 This
is, talked about in a lot of different investing books. So anywhere from like
60 to 75% of the total return over the very, very, very long term with the
stock market has been because of dividends. So that’s gotten lower over time
based on a lot of different factors, interest rates, buybacks, but it’s still a
significant portion of investor return. And so part of that is the fact that
when there’s a bear market or a recession, you’re not getting hardly any or
maybe even negative returns from the stock market because stock prices are
crashing. So that dividend is keeping your returns afloat, and it’s making up a
big part of the return. Um, but the second and the one I think is, is even more
of an of a factor. And something that conceptually is kind of like the next
level up is this idea that if you’re reinvesting those dividends, um, you’re
compounding your wealth, you’re compounding your ownership, and it’s
exponentially expanding over time.
Andrew: 36:17 And
so if I have a stock and I paid 100 bucks on it, and it doubled, let’s say,
let’s say a 10 x, 20 years from now, that’s great. I got a 10 x. But if I had
dividends, so now instead of $100 of the stock, I have $200 of the stock, then
my 10 x on that is 20,000 instead of 10,000. So maybe that’s a great kind of
number, numerical explanation in podcast format that encapsulates just how much
of a difference compounding and, and dividend reinvestment can make. And it’s,
it’s because of things like that.
Dave: 36:54 Yeah,
that’s a perfect illustration. And I think that’s one of the things that to me
is so, um, exciting about dividends is how much it can grow your money. A while
you were talking, I just for Giggles, I pulled up a calculator and a compound
interest calculator on the Internet, and if I put in a hundred dollars, just
that’s my initial investment, and I don’t make any other contributions over 20
years at three and a half percent. , which would be, you know, a pretty, a nice
dividend. You’d earn another a hundred dollars for doing nothing. , I mean s
you know, just the continuation of the dividend being, you know, invested, um,
which, you know, give you a hundred bucks for doing nothing. I mean, wouldn’t
want a hundred bucks for doing nothing. I mean, that’s, I mean, that’s just the
power of compounding and you know, what dividends could do for you.
Dave: 37:48 So,
you know, yes, you know, drew, when you’re talking about starting, it looks
like peanuts, and it may feel like peanuts, but if you, I promise you, if you
keep at it, it’s, it’s going to add up, quite substantially over time. You
know, it may never get to the Warren Buffet level, you know, that’s, you know,
those are the US mere mortals may not be able to afford to buy, you know, one
point $5 billion worth of coke., you never know. But anyway, so, um, I think
that was kind of my thoughts on that.
Andrew: 38:20 No.
I mean, yeah, three and a half percent. You’re just taking like the worst case
as if the business never grew and it just paid like a steady dividend. That’s
it. That’s a great example of compound interest, and stocks can do wonderful
things. Businesses can do wonderful things. So the dividend can even be just
the cherry on top. Sometimes, it just depends, but I think the options are limitless
and the ceiling is so, so high, and dividends can be a big, big part of that
depending on which stocks you buy.
Dave: 38:55 Yeah,
exactly. I guess another thing is I’d like to illustrate too is you know the
point that Andrew made about when the stock is not doing well on the stock
market, if it’s paying a dividend, they’re not going to cut that. I mean,
unless there are financial reasons that caused them to do that, they’re not
going to cut those dividends. So that’s still going to be returned that you’re
going to be able to earn even while if the stock is not doing well in the
market because of other factors besides, you know, the company not doing well.
You know, like we were talking about earlier with Kimberly’s question, you
know, if the stock market is, is beating the stock down for whatever reason, if
there are economic factors going on but the company’s still making money. Every
everything else is doing well; you’re still going to get paid a dividend, which
is still going to help you, you know, your wealth growth. So it, you know,
there are so many advantages to dividends that it just needs to be something
that’s, you know, a part of your investment strategy. Absolutely. 100% all
right folks will, that is going to wrap up our discussion for this evening.
Dave: 39:58 I
hope you enjoyed our conversation. , we had some great questions, and those
were a lot of fun to answer, and I am glad we got to hear that Dirk King and
I’m glad he was in the house for us for a little bit today. So hopefully you
understand a little bit more about how the power of dividends and compound
interest can make you a very wealthy person if you stick with it. So without
any further ado, I’m going to go ahead and sign us off. You guys go out there
and invest with a margin of safety. Emphasis on the safety. Have a great week,
and we’ll talk to y’all next week.
Announcer: 40:26 We
hope you enjoyed this content. Seven steps to understanding the stock market
shows you precisely how to break down the numbers in an engaging and Rita gold
way with real-life examples. Get access today at stockmarketpdf.com
until next time, have a prosperous day.
Announcer: 40:51 The
information contained is for general information and educational purposes only.
It is not intended for a substitute for legal, commercial, and or financial
advice from a licensed professional. Review. Our full
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Rank #12: IFB11: A Complete Guide to to the Most Useful Stock Valuation Methods
Today we are going to talk about stock valuation methods. Andrew has a great ebook that he wrote a while back that talks a lot about how to value a stock. These are methods that I use personally every day . A breakdown of the 7 valuation metrics that we use P/E ratio and its […]
The post IFB11: A Complete Guide to to the Most Useful Stock Valuation Methods appeared first on Investing for Beginners 101.
Rank #13: IFB105: Q&A: Is Acorns Worth it? Should I Buy Small Cap Stocks?
Announcer: 00:00 You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave: 00:37 All right […]
The post IFB105: Q&A: Is Acorns Worth it? Should I Buy Small Cap Stocks? appeared first on Investing for Beginners 101.
Rank #14: IFB03: Doesn’t a Stop Loss Contradict Buy and Hold?
When you are looking for advice on how to buy stocks, you will find thousands of articles on the internet. All of them touting the various ways to buy stocks to make money. But what about selling a stock? Crickets. There is not much out there to tell you when to sell. […]
The post IFB03: Doesn’t a Stop Loss Contradict Buy and Hold? appeared first on Investing for Beginners 101.
Rank #15: IFB18: Your Path to Financial Freedom Explained
Welcome to session 18 of the Investing for Beginners podcast. Today we are going to talk about financial independence and some ideas to help you achieve that. Understanding what financial freedom is Finding the motivation that inspires you to achieve your goal of financial freedom Creating income that you can live off of without […]
Rank #16: IFB45: Back to the Basics Pt 3: Stocks vs Other Investments
This is part 3 of the 5 episode “Back to the Basics” series from The Investing for Beginners Podcast. Each episode covers the fundamentals of the stock market and investing to provide a solid foundation for those who are looking to compound their wealth over time. Here are the links to each of the episodes: Back […]
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Rank #17: IFB87: Buying Stocks in a Downtrend, Selecting From a List of Stocks
Announcer: 00:00 You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew and Dave to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts. Now. Dave: 00:33 All folks, we’ll work […]
The post IFB87: Buying Stocks in a Downtrend, Selecting From a List of Stocks appeared first on Investing for Beginners 101.
Rank #18: IFB44: Back to the Basics Pt 2: Share Dilution on Wall Street
This is part 2 of the 5 episode “Back to the Basics” series from The Investing for Beginners Podcast. Each episode covers the fundamentals of the stock market and investing to provide a solid foundation for those who are looking to compound their wealth over time. Here are the links to each of the episodes: Back […]
The post IFB44: Back to the Basics Pt 2: Share Dilution on Wall Street appeared first on Investing for Beginners 101.
Rank #19: IFB61: Personal Finance 102: Building Assets in the Adult World
Welcome to Investing for Beginners podcast this is episode 61. We’re going to go ahead and talk a little bit about personal finance today. Andrew has a disclaimer he wanted to discuss before we get started so Andrew why don’t you go ahead and chat a little bit. Andrew: sure so real quick I […]
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Rank #20: IFB32: An Example Buy and Sell Stock Checklist
Welcome to investing for beginners podcast I’m David Ahern, and Andrew Sather is here with us tonight. We’re going to talk about investing checklists; we’re going to talk a little bit about when to use checklists and how they can help you when you make buying stock decisions as well as selling stock decisions. Checklists […]