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I Started Investing 3 Years Ago, Best Decision I Ever Made

I Started Investing 3 Years Ago, Best Decision I Ever Made

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In the beginning of 2015 I paid off my credit card debt for the first time and started to learn about investing.

It was terrifying, but so totally worth it!

How I Perceived Investing As A Kid

Up until 3 years ago (I was 28), I knew NOTHING about investing. To me, investing was some insane, chaotic spree that made rich people rich and the middle class poor. I didn’t know how it worked, but I knew tons of people who lost money during the recession.

If you’ve ever watched any movie that talks about Wall Street or Investing, it’ll have your brain swimming in confusion trying to understand it. Were they just trying to make it look hard and impressive? (Yes).

I was terrified of investing, I just shut down anytime someone talked about investing and assumed they were a financial genius if they owned stock. Someone who had enough money to pay their bills, live their life and put something extra away investing for retirement was a financial god to me.

I Started to Learn About Money On My Own

Like I said before, at the beginning of 2015 (3 years ago) I paid off my credit card debt after paying countless $70 monthly payments. So once I paid it off, I wanted to use that $70 for something else, something reasonable.

I will admit my company did have a financial planner come into our office and talk about our 401(k) plan. While the company plan was pretty awful, the financial planner did a great job at terrifying me to death.

I will always remember their words “Running out of money in retirement is worse than death”

Well f*&k, that was more terrifying than Halloween. So I started to learn more about money and how it worked.

I started reading finance books like “Total Money Make Over” by Dave Ramsey. I consumed it in a day.

I started listening to finance podcasts. Not the hardcore stock analysis ones, but the more Investing for Dummies type of podcasts like “Listen, Money, Matters”. I LOVED that podcasts and in my mind, being surrounded by those announcers talking about money and finance as a regular thing, I began thinking of money in a different way.

After reading books and listening podcasts. I started to view money not as static thing to sit in my bank account, but more as income streams.

Understanding how much money I had in my bank account mattered less than how much I had coming in each month. That’s why investing became a fascination because it’s one of the most common income streams for people.

I Tried Investing $100 To See What Happens

On the podcast “Listen, Money, Matters” they raved about the investing app “Betterment” (Adam uses Betterment and did a review). They brought the Betterment team on the podcast and explained it and how it’s meant for people who know nothing about investing but want to start. That was me!

I remember how nervous I was signing up. I had to put in my info and social security number. I was convinced that I would immediately lose all my money straight away and because they knew my social security number, the IRS would start to hunt me down.

This was a legit fear I had.

Since I had so much anxiety, I only invested $100 to see what happened. I invested in a “moderate risk” portfolio which they automatically invested for me. All I did was put in $100 and waited to see what happens.

They say not to check it daily, but I did. Oh my goodness, for the first week I checked it hourly. I wanted to see EXACTLY how the stock market worked. After a week I limited myself to daily. So for 5 months, I checked my Betterment account every day, scruitinizing everything that happened.

However, I found that my money fluctuated. One day it went down to $99 then up to $102 and slowly kept rising. This helped me understand how the market moved (at least during those 5 months), how it worked and it slowly became less mysterious.

In fact, I started to notice little things like every once in a while, I would receive extra lumps of change in my account. Just a few pennies, but they were dividends. I received money just from owning certain stocks. I couldn’t tell which stocks with Betterment because it doesn’t show that amount of micro detail, but it was a great feeling.

Then I started to invest more and look at other stockbrokers (companies which you need to invest) like the Robinhood App (I still use Robinhood, here’s my full review on how it works). With Robinhood I could start to pick my individual stocks and it was amazing! I chose stocks that were on the safe side such as Apple, Realty Income and Johnson & Johnson that were well known and established. I knew if these companies tanked, there was something seriously wrong with our economy, so I felt comfortable.

I Wasn’t Addicted, But I Was Obsessed

After I learned how the stock market worked, I felt comfortable but wanted to see more gains than the couple of cents I had been earning. So I could have gone in two different directions. I could have started to invest in risky stocks for bigger gains (don’t recommend) or find new ways to earn money so I could buy more stocks. I did the latter.

Now I write articles online for money, use interest checking accounts, sell stock photos, sell things on Craigslist, use a cashback credit card and more to earn extra money each month and invest it!

Today, It Absolutely Was Worth It.

I’m not advocating for a certain investing approach, but I do want you to see money as income streams rather than a lump sum. It absolutely changed my life.

Before I was happy with $2,500 in my bank account. It was more than any of my friends had. I now keep $4,000 in both my checking and savings account as an Emergency Fund and invest the extra money each month in my investment portfolio.

Knowing I have the extra money and extra streams of income each month gives me SO MUCH more confidence to know I’ll be OK if an emergency comes up or I want to go on a vacation. That piece of mind is one of the greatest feelings ever.

Happy Holidays from Wallet Squirrel – A Look Back at 2017

Happy Holidays from Wallet Squirrel – A Look Back at 2017

Fun fact. Did you know there are a total of 29 holidays celebrated between Thanksgiving and New Years Eve?

So on that note, we at Wallet Squirrel, would like to wish you a Merry Christmas, Happy Hannuka, or any other holiday you might be celebrating!

Andrew and I personally would like to thank every single one of you for an awesome 2017!

Because of you, in 2017 we saw a tremendous amount of growth of interest in our journey to becoming financial guru’s, investing ninjas, and financially free. You all have decided to join us on this journey as we all learn together from our personal experiences.

Today, I would like to take a look back at our more popular and well-liked posts of 2017. Let the reminiscing commence!

Side Hustling

We, like everyone else, love to find new ways to earn more money and to see how others are making money. This is why we started searching around the globe for new awesome ways to earn more money outside of our 9 to 5 jobs.

How Andrew made $1.88 Selling Stock Photography in 10 Days – Both Andrew and I wrote several articles about stock photography throughout the year. His about how he made $1.88 within 10 Days of being accepted performed the best. I still own the title for making the most money off of one photograph though, $1,000 and counting.

Earn Money While Working Out With the Achievement App – Achievement is a fun application that syncs up with all of your activities, including your tweets. You earn more points the more you walk, workout, sleep, tweet healthy thoughts, and so on. Let the point earning begin!

How to Sell Something on Craigslist and Make Money – Andrew was able to sell some old stuff on Craigslist. He walks us through the whole process from posting his items to meeting up with the buyer. Pretty cool!

I believe he sold his old guitar. Now that he has a girlfriend, I guess he doesn’t need to walk the streets of Denver serenading women anymore.

Investing

3 Reasons Why Monthly Dividends are Better – Andrew talks about why he believes that monthly dividends are better than other dividend stocks. He walks you through why you should think they are awesome too and how to find those stocks that hand out monthly dividends.

Come learn how you can learn extra money on top of the normal gains of investing.

Cost-Benefit Analysis Example to either Pay Off My Car or Invest? – Andrew was not sure if he should pay off his car or invest the extra money he had. Enter the cost-benefit analysis. He walks through his thought process and how to properly perform a cost-benefit analysis. Check out the article to

see what he ended up doing.

Latest Stock Purchases – Andrew informs us throughout the year about the latest stock purchases he makes. This is intended to help inform us all about new stocks that might interest you. This is one example of those articles.

You can look at his entire portfolio in the investments page.

Personal Finance

How to Pay Off Your Car Loan Faster – Paying off our car early freed up $405 a month! This money has been great so we can be more aggressive at paying off our student loans. This article walks through the different ways we were able to apply to pay off $7,000 in only three months.

How and What to Teach Your Kids About Money – A lot of us have young kids. One question I had was, “How should we go about teaching them about money?” So I did some research and this is what I found out.

9 Bad Spending Habits that are Killing Your Budget – We all have bad spending habits that we need to drop ASAP. For me, I had a lot! Luckily, I have a loving and patient wife that has helped me break most of these bad spending habits.

What are your bad spending habits?

Blogging

How to Start a Blog – I could not believe blogging was still so hot! I thought I was caught in an episode of How I Met Your Mother where Barney was only focused on his own blog. Well, the blogging world is still massive and still hot! It is time for you to start your very own blog!

50 Amazon Affiliate Website Examples – The money that can be made off of affiliate marketing is amazing! This article provides 50 examples to get the ideas flowing in your mind.

Are you planning on starting an affiliate niche website in 2018? Andrew is doing one!

An SEO Strategy – What Works and What Does Not – We saw a 1,500% in traffic growth during 2017. This growth mainly comes from our SEO strategy (also our Marketing Strategy). This is the perfect next step after you start your very own blog!

A New Year

I love the end of a year as it is a great time to look back on the goals you succeeded at and failed. This is the time of the year to prepare how you will concur the upcoming year.

For me personally, I do not succeed at every goal on my list. I am alright with that as long as I learn from my mistakes to make the next year the best year yet!

Next week I will dive more into this concept.

 

Cheers!

Adam

Top 22 Warren Buffett Quotes the Internet Can’t Get Enough Of

Warren Buffett, CEO of Berkshire Hathaway, has a net worth of over $78.2 billion and is known as one of the greatest investors of all time. So when he speaks, people take notes. Here are some of the top 22 Warren Buffett Quotes the internet can’t get enough of.

Warren Buffett Quotes Infographic

Top 22 Warren Buffett Quotes the Internet Can’t Get Enough Of

Here are some of the top Warren Buffet quotes found on every list of Warren Buffet quotes around the internet. These quotes range in wisdom on investing to regular life. I try to live by these quotes on my own investment portfolio.

Warren Buffett Quotes

1. Rule #1: Never lose money. Rule #2: Never forget rule #1

One of my favorite Warren Buffet Quotes. The fastest way to grow your money is to never lose it in the first place. This applies from saving on your groceries to focusing on less risky stocks of well established companies.

2. It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently

Think about the Wells Fargo or Equifax scandals. It takes years to build enough trust for someone to have brand loyalty. Warren Buffet quotes it takes 20 years, but it takes 5 minutes or less to destroy all that goodwill you’ve built. People are quick to revolt if you’ve done anything to betray their trust.

It is infinitely harder to build trust than destroy it.

3. Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing.

Multiple studies show that diversification in the stock market will help protect you against market falls. Or it could be summarized in the old proverb “Don’t put all your eggs in one basket”. Unless you have insider information that a stock is going do really well, maintain a diversified portfolio to protect you. No one knows what they’re doing all the time.

4. If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value.

Unless you’re a day trader (I will never be), you should only be investing in the stock market with the intention to hold those stocks for a long time. You can do really well as a beginner if you’re buying stocks and not planning on selling till you retire. Those are where you get the best returns. Warren Buffett is infamously known for rarely selling stocks.

5. It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

When you buy a stock, you should think of it as owning a piece of that company. You should be looking at wonderful companies that have a competitive advantage in the industry. Those are the companies that will do well over the long run. You may find a wonderful price on a mediocre company, but really what are you getting? A mediocre company that will likely be edged out of the market by a better company.

Many of the famous Warren Buffett quotes are about investing in strong companies with a competitive advantage and strong brand loyalty rather than cheap companies where you think you can make a quick buck. Warren Buffett is never into buying a company for a quick buck.

6. Be fearful when others are greedy. Be greedy when others are fearful.

During the 2008 financial crisis when investors were all exiting the market, Warren Buffett invested in a few large companies even though their stock prices were falling. Those deals made Warren Buffett over $10 billion dollars when the market stabilized and it’s continuing to show dividends. When the market goes upside down during world events, politics, market forecasts, those are the times when everyone else is fearful, that Warren Buffet sees an advantage when the markets crash.

Think about it this way, the New York Stock Exchange has been around since 1817, it has always recovered. Chances are, minus a world apocalypse, that the market will always bounce back. Those who capitalize on those downturns are usually rewarded.

7. The difference between successful people and really successful people is that really successful people say no to almost everything.

One of my favorite Warren Buffett quotes because it has so many applications. You will see many opportunities in your life and you may want to jump on everyone, but it’s ok to be selective and say no. You’ll burn yourself out if you say “yes” to everything. This also applies to going out on a Saturday night with friends drinking. It’s ok to say “no” to save a few dollars or have a night to yourself to finish your article on Warren Buffett quotes. =)

This also applies to going out on a Saturday night with friends drinking. It’s ok to say “no” to save a few dollars or have a night to yourself to finish your article on Warren Buffett quotes. =)

8. Develop and build the habits you admire in others.

Remember all those times that your parents wanted you to hang out with those “good kids”. The habits of the people you surround yourself with rub off you on, consciously or unconsciously. When you find people like Warren Buffett, the Oracle of Omaha, who is one of the greatest investors of all time. You should find out what makes him so successful and learn those traits to improve yourself.

9. Passive investing will make you more money than active trading

Oh my goodness, fees are the WORST! Active trading requires more work and more fees, so more of your money will be paid to your broker. Yet studies have shown over and over that passive investing where you set your money and forget it are far more successful for growing wealth. I don’t plan to ever touch my stocks currently making dividends.

10. There seems to be some perverse human characteristic that likes to make easy things difficult.

Great quote, people always imagine things are more difficult than they really are. When I first considered starting investing, I thought there were so many hurdles and financial experts I would have to pay. Yet, when I finally decided I wanted to start investing in the stock market, I just downloaded the Robinhood App and started investing. It took 10 minutes to sign up and buy my first stock when I worried about investing in the stock market for over 5 years. Things are often more simple than you think they are.

11. Tell me who your heroes are and I’ll tell you who you’ll turn out to be.

This is similar to the Warren Buffett quote “Develop and build the habits you admire in others”. If you want to be an entrepreneur, start joining local meetups of entrepreneurs. You learn SO MUCH MORE when you surround yourself with the people you want to be like. You can learn A LOT in a book, but you’ll learn even more by surrounding yourself with people you admire.

12. We have long felt that the only value of stock forecasters is to make fortune-tellers look good.

No one can predict the stock market, no one. Not even Warren Buffett. Anyone who says they know exactly how the market works is trying to sell you something. You can lump stock forecasters being as accurate as the carnival fortune-tellers. You know the ones with 3 teeth, crystal ball and you’re going to die in 2083.

13. When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.

If you invest in an outstanding company, even if the stock price goes up, why would you ever sell it? No matter when you sell it, outstanding companies will continually do better and better. Don’t sell until you absolutely have to, otherwise, you’ll just be losing money in the long run. Many of Warren Buffett Quotes are like this, they are all very Anti-Day Trader.

14. You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.

If you follow the basic principals of Warren Buffett and buy outstanding companies with strong competitive advantages like Apple (AAPL). You don’t have to be a genius. Just buy and hold forever, you literally don’t have to do anything until you sell.

Many Warren Buffett quotes are similar to this because he stresses that anyone can invest in the stock market. The simplest way is just to invest in index funds that follow the market. Set it and forget it. The market sees an average increase of 7% per year and that’s WAY better than a savings account.

15. I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.

Look for companies to invest in that are so strong that they can weather any storm because soon enough they will have to. Think about Apple (AAPL), as long as they keep pushing out iPhones it doesn’t matter who runs the company, they’ll continue to do well. People were worried when Steve Jobs passed because they didn’t know the future of the company, but Tim Cook stepped in and maintained the same Apple legacy. As long as Tim Cook sticks to the secret Apple recipe, they’ll be in good shape.

16. Buy into a company because you want to own it, not because you want the stock to go up.

If you see a company that you think is going to do well or heard will do well, don’t buy it unless you’re willing to hold it for awhile. If something goes wrong and the stock dives, you’re stuck with a company you don’t believe in and will likely sell at a lower price to get rid of it, ruining the reason you bought it in the first place.

17. Wall Street is the only place that people ride to work in a Rolls Royce to get advice from those who take the subway.

This is just a funny Warren Buffet quote.

18. Charlie and I have not learned how to solve difficult business problems. What we have learned is to avoid them.

I’m sure Warren Buffett and Charlie Munger have learned how to solve difficult business problems, but the best way to navigate murky waters is to avoid them all together. The more problems your business can avoid, the better shape you’ll be. You can avoid a lot of problems from being proactive instead of reactive.

19. Long ago, Ben Graham taught me that “Price is what you pay; value is what you get.”

Ben Graham, Warren Buffett’s mentor had this popular quote. I always think about it simply. Price is what you buy a stock for and Value is what you sell that same stock for.

20. It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.

If you can’t tell, Warren Buffett believes in surrounding yourself with the right people. He credits much of his success from surrounding himself with smart, good people.

21. If past history was all there was to the game, the richest people would be librarians.

When you analyze a stock based on its historical performance, it’s called technical analysis. Yet past performance does not necessarily mean future performance. Just because you know what the stock has done in the past doesn’t mean it’s going to follow that same trend.

22. You only have to do a very few things right in your life so long as you don’t do too many things wrong.

It’s ok to mess up, focus on learning from those mistakes for the next time. It just sounds cooler when Warren Buffett quotes it. Or you can take this as no matter how many mistakes you’ve made in the past, you always have a chance to do more good. It’s one of those life quotes that can go many ways.

Latest Stock Purchase & Analysis – Cisco (CSCO)

After seeing multiple investor friends pick up Cisco (CSCO) lately, I had to check it out. So these are the insights I looked into and ultimately factored into my first purchase of Cisco.

Why am I sharing my latest stock purchase?

Each month I try different ways to make extra money and share how much I make in my Income Reports. Every month I use this money to buy more stocks and other investments to build a $10,000,000 investment portfolio. It may take a while, but it’s done with one investment at a time.

This month I bought 9 shares of Cisco.

What is Cisco

Cisco (Stock Ticker CSCO) is a hardware and software company that designs, manufactures, and sells Internet Protocol (IP) based networking and other products related to the communications and information technology industry worldwide.

I basically just like to think of Cisco as the infrastructure of the internet. All of the highways that connect websites and databases and funny cat videos of the internet are primary run on Cisco products.

If you want to know what a company does look at their revenue. In 2016 this is where their money came from:

  • Switching (30% of revenue) – Switches connect computers, printers, and servers within a building or campus. These allow everything to talk to each other. Switches create a network of devices.
  • Routers (15% of revenue) – If a switch is a network, routers connect networks. A router links computers to the internet.
  • Collaboration (9% of revenue) – This is a general term to describe their immersive video conference software, IP telephones, software to connect the devices to talk to each other. This includes Jabber, Cisco WebEx and Spark. For example, my office uses Cisco WebEx to coordinate all of our in/out video conferences.
  • Data Centers (7% of revenue) – Data Centers allow large scale flexible computing. This can be from storage to computing power.
  • Wireless Infrastructure (5% of revenue) – These are the base stations and infrastructure for Wi-Fi. Think of hotels, casinos, grocery stores, airports and any building that provides Wi-Fi. Most of these devices are Cisco related.
  • Security (4% of revenue) – These are the firewalls that block out Russian hackers and malware from accessing their infrastructure and their client’s servers/computers/Internet of Things.
  • Services (24% of revenue) – These are the people that run these services, train clients how to use them, manage networks, operate systems and support their wide variety of products.

We can say that the other 6% is “Other”, but you get the idea they do a lot with the internet. Combined all these products and services generated $49,247,000,000 in total revenue in 2016.

Why did I buy Cisco?

When looking over Cisco, they really hit some of the key factors that I look for when buying a stock.

1. Dividend (good)- They have a 3.69% dividend that they’ve had since 2012. That 3.69% is really nice considering this is a tech stock that traditionally has lower dividends.

2. Historical Performance (good)- They say that past performance doesn’t indicate future performance, but I like the graph of the stock price over the last 5 years. It has its dips, but overall it has a progressive climb. That is a plus for me.

5 Year Graph of Cisco’s Stock Price

3. Strong History (good) – I’m not a big fan of crazy risk, so I like to invest in proven companies. Cisco has a market cap of 161.702 Billion, they’ve been around since 1984 building the internet. I want to make sure that the company has been tested long enough that they know how to manage market downturns.

4. Reoccurring Revenue (getting there) – Cisco has traditionally been a hardware company, but they are transitioning into more of a software company and one that wants to focus on a subscription model. Their CEO, Chuck Robbins even mentioned in their 2016 Annual Report that they are “working to move more of our revenue to a software-based and subscription-based model”. I am a huge fan of reoccuring revenue, so when I see a company of this size transitioning to that business model, I can get on board.

Since I liked what I saw, I bought 9 shares at $31.89 per share for a total of $279.09.

Why did I buy now?

In honesty, I probably rushed into buying Cisco because I wanted to buy their stock before their earnings call on August 16th (yesterday). I thought the stock would increase after the earning call, but it dropped a bit after coming short on revenue. F*&K.

The stock price has dipped about a dollar since then. I failed.

I will continue to hold Cisco because I think they are in the right direction, but it just sucks that I bought it right before the dip. This will probably teach me not to rush into anything when looking at future stocks.

Conclusion

I like Cisco and look forward to following them, but will be hesitant into rushing into any future buying just because a earnings report is coming up and everyone else is bullish on a stock.

If Cisco continues to invest more into their subscription-based business model, I’ll likely add more to this position.

Get a free share of stock from Robinhood for New Signups & Referrals

Robinhood App now offers a free share of stock for New Signups & Referrals

Robinhood App the free stock trading app that I’ve used for my portfolio and reviewed last year has a new promotion making some unique headlines. Now for every person you get to sign up with the broker Robinhood, both you and the person who signed up, get a free share of stock.

What Stocks Do You Get?

It appears to be a randomized assortment of stocks from the messages posted on social media. Robinhood states that the stocks range in value from $3 – $150, so you could technically get a share of Apple (AAPL) randomly if you sign up now, or you help a friend signup.

What Are Your Chances of Getting $175?

Depends, how lucky are you? Like REALLY lucky. You have a 1% chance of getting a stock valued at $175. Reading the fine print on their website you’re most likely to get a $2.50-$10 stock.

Here are your chances for a free share of stock when you sign up.

  • 98% of getting a stock valued at $0.50-$10
  • 1% of getting a stock valued at $10-$50
  • 1% of getting a stock valued at $50-$200

Thanks to Social Media, we have an idea what it looks like.

So get all your friends to sign up?

For everyone you get to sign up, both you and your new sign up friend get a free share of stock. All you need to do is use the referral code that Robinhood gives you.

If you’ve been with Robinhood for a while, this is the same referral code you’ve always had. Now there are just perks for you to refer a friend to Robinhood.

Here click on my referral code (http://share.robinhood.com/andrewk48) to see what it looks like. You don’t have to sign up.

However, if you’re someone like Kim Kardashian who can get ONE MILLION people to sign up, you won’t get $1M free shares of stock. You’ll be capped at $500 worth of stocks no matter how many people you refer. Lame I know.

Is this promotion available to anyone with Robinhood?

It started off a few months ago. I was NOT one of the early testers for this. However earlier this week I saw on my Robinhood App that I’m NOW able to this. I’m not sure what changed. If everyone is able to do this now or what (I’m not special). They must have just opened this up to a much wider pool of users.

If you’re curious if this works with your Robinhood referral code. Go to your app and if you can’t find “Free Stocks” in your sub menu. You’re not in the program yet. Maybe send the Robinhood App people a tweet (@RobinhoodApp) and say “Hey, can I join this super cool referral club like @WalletSquirrel”. I’ll retweet for you.

 

Should you feel comfortable referring friends to Robinhood?

If it helps, I refer all my friends to start investing with Robinhood. It’s a great broker to start off with (one I personally use) because there are $0 fees to start buying stocks and all of their securities customers are insured up to $500,000 by the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).

Also keep in mind that Robinhood recently raised $110M in Series C round of fundraising, which they’re valued at $1.3 Billion. Some of the investors working with Robinhood are Google Ventures.

These guys are growing and they have the support of some major players in the game.

This promotion makes Robinhood worth considering

If you’ve ever considered the stock market, you should do some research on Robinhood because not only are you going to get free trades while using their app, you’ll start off with a free share of stock that could be Apple.

This isn’t on our list of ways to make money, but maybe it should be.