Let me present 3 steps to making an investment decision:
- Make an observation
- Determine who will profit based on (1)
- Determine how YOU can profit based on (2)
Frank, Jason and I were having dinner this past Saturday and we were discussing future markets. Jason brought up Biotech and was talking about some of the possibilities for future advances, and how they may affect the industry. Now, Biotech is something I know very little about — in fact, I know almost nothing about it. As a result I probably am not going to invest in Biotech in the near future.
We’ll be on vacation the rest of the week for Thanksgiving, so there will be no posts Thursday or Friday. Stop by next Tuesday for our next article. Happy Thanksgiving!
What follows is a question posed to us after Jason’s article last week. As well as my response to that question. I hope to have answered the reader’s questions completely, and I hope that my response proves valuable as well. I’ve left the response as is, and I’ll be covering different sorts of investments and other strategies in weeks to come, as I build my own confidence and knowledge. I’ll close with a few comments that cover some areas that I feel my original response did not adequately address.
I read your Savings Speech article today, and it was not unlike many time-value-of-money articles I have read in the past. I am curious, though, what type of investment you would expect to see an average 9% return from?
Today Cisco announced that it would be purchasing Scientific Atlanta, for close to 7 Billion dollars. Which after taking Scientific Atalanta’s cash into account will mean the actual cost is closer to 5.3 Billion. Most of the sources are speculating that this is the expression of Cisco’s desire to move deeper into the consumer market. But I think that it’s more than that and Cisco already has a plan for this acquisition.
To be successful in this life, either personally, financially or otherwise, you have to have goals. It’s not just something our parents and counselors have been babbling about our whole lives; it’s a fact. Even those who aspire to be successfully lazy must set a goal to be adequately lazy each and every day! So as in any other endeavor, being an investor requires a little goal setting.
“If goals are imperative, then what goals shall I have?” you may be asking yourself. Whatever the goal may be, it must have some purpose, and it must have smaller sub-goals so you can consistently have small victories (a very real morale boost). I often run across people who choose $1 million dollars as a goal because they want to be a millionaire. But really what does that mean? A millionaire today is not the same as a millionaire in 1905, and will not mean the same thing in 2055. With an annual inflation rate of 3.5% for the last 80 or so years, a million dollars looses half its value every 20.2 years.
It’s frustrating to see such a purposeless goal — floating about without any foundation — because without a purpose a goal is just an arbitrary target that is too easily changed at a whim. A goal must have meaning and a foundation on something real. Fear not though, for I am here. I present, for your consideration, my milestones…
My Milestones
1. Total Investments of $150,000
2. Total Investments of $500,000
3. Total Investments of $1,000,000
4. Every-day Wealth
5. Uncommon Wealth
In the last 6 months, I’ve gone through the process of acquiring a car twice. In July my fiance and I purchase a new Volkswagen Jetta, and just this past Monday we leased a Subaru Impreza. Having gone through both the process of leasing and buying a car, I feel comfortable commenting on both, and taking a look at reasons for choosing one over the other. I also have a few suggestions as to what one should do before even starting the process.
One of my favorite “Savings Speeches” comes in David Bach’s book Automatic Millionaire. David goes on to explain in detail how to save and invest your money, but only after giving a very convincing argument for why you would want to.
I’m going to share with you the thought process I went through as I tried to figure out how much to save and when. First, download the InvestorGeeks Future Wealth Calculator. This is an interactive article.
On Tuesday Chris posted about “Digital Media Convergence”, and picked Microsoft as one of the main benefactors/facilitators of just such a shift. A reader responded to the post with some excellent comments, and a due amount of concern, as to why one should be wary of investing in Microsoft.
I would first like to say, that this is just such an environment which we hope to foster here at InvestorGeeks. It’s one of the reasons we started the Forums. So in that spirit here is why I think that Microsoft is ripe for investment.
Below is an excerpt from a conversation that Chris and I had last night. It concerns emerging markets, and some thoughts on how best to enter them. I’ve just posted the conversation as is, not even bothering to modify for typos and mispellings. In a few weeks, I’ll post more thoroughly on this topic, as it interests me, and deserves my full measure of attention. Also, this is just an aside, and not a substitute/cop-out for my weekly article, that will follow sometime tomorrow.