Barrington’s Blog » 2009 » February: "Only certain types of people read and studies about money - successful ones! Or at least those who are looking to be financially responsible with their money in the long run, and are not depending on Social Security for a lifeline. Take charge of your financial position - learn, grow, invest, and have your money work for you.
Why would you want to use your money when you can use someone else’s?
Today the stock market is down and it is the perfect time to buy depending on your financial position (age, debt, and income) while everyone is running away from the market like Losers. Losers sell their shares while the market is low and buy shares while the market is high. Winners buy while the market is low and sell when the market is high.
Which are you? A Loser or a Winner? Are you studying how to better your situation? Financial literacy is the key to financial freedom."
February 25, 2009
February 24, 2009
Company takeover - Got stock? Should You Sell it?
Barrington’s Blog » 2009 » February: "I was asked a question today by a peer of mine asking what happens to his shares of stock in a company if it is being acquired by another company. Should he sell? Will he lose all of his money? After some research, I told him he should sell. Why? Because usually if there is a risk of a company being bought by another company - the stock price of the acquiring company decreases, and the stock price of the company being acquired increases.
So you have two options:
1. Cash out (sell) your shares and take the money.
2. Purchase shares of the acquiring company
If you take option 1 - then you are subject to capital gains tax which is 15% as of this writing. On the contrary, if you decide option 2 is better - then you avoid capital gains tax, plus you sell your shares at a high price and you have the option to buy stock of the acquiring company at a low price.
In my opinion, option 2 is the win-win. Why would you pay capital gains tax if you didn’t have to?"
So you have two options:
1. Cash out (sell) your shares and take the money.
2. Purchase shares of the acquiring company
If you take option 1 - then you are subject to capital gains tax which is 15% as of this writing. On the contrary, if you decide option 2 is better - then you avoid capital gains tax, plus you sell your shares at a high price and you have the option to buy stock of the acquiring company at a low price.
In my opinion, option 2 is the win-win. Why would you pay capital gains tax if you didn’t have to?"
February 21, 2009
10 years is all you have?
Barrington’s Blog » 2009 » February: "How many years can you expect to live off of your savings when you reach retirement age? About 10 years is the average, not including social security. America’s personal savings rate is a negative 0.5 percent. Therefore, many of us are not saving what we should be saving in order to retire comfortably when we decide to retire.
So why are we told to save? The dollar is depreciating rapidly considering that currently the government is spending and borrowing massive amounts of money in the form of bailouts to the banks, Troubled Asset Relief Programs (TARP), and other methods in order to jump start the economy. Some elderly people who are between 50 - 60 years old have lost massive amounts of money in their pension fund, 401k, and stocks they’ve invested in….therefore they must continue working past their retirement age of 65 in order to recoup some of those losses so they can eventually retire when the market and economy bounces back.
How do we avoid this? Why risk building just a nest egg that will be severely taxed when you decide to use it for your retirement? The answer is to build your cash flow while at the same time saving a nest egg - if you focus on building a cash flow first, then you’ll be able to always have a nest egg.
What do I mean? Well most poor and middle class people try to reach retirement by using their own money - this is totally wrong. However, since most Americans don’t know about money - due to the lack of financial education in our schools - we sometimes make bad and uneducated choices. To be financially responsible we must invest our money into dividend paying stocks, REITs, Rental properties, and owning a few businesses wouldn’t hurt either."
So why are we told to save? The dollar is depreciating rapidly considering that currently the government is spending and borrowing massive amounts of money in the form of bailouts to the banks, Troubled Asset Relief Programs (TARP), and other methods in order to jump start the economy. Some elderly people who are between 50 - 60 years old have lost massive amounts of money in their pension fund, 401k, and stocks they’ve invested in….therefore they must continue working past their retirement age of 65 in order to recoup some of those losses so they can eventually retire when the market and economy bounces back.
How do we avoid this? Why risk building just a nest egg that will be severely taxed when you decide to use it for your retirement? The answer is to build your cash flow while at the same time saving a nest egg - if you focus on building a cash flow first, then you’ll be able to always have a nest egg.
What do I mean? Well most poor and middle class people try to reach retirement by using their own money - this is totally wrong. However, since most Americans don’t know about money - due to the lack of financial education in our schools - we sometimes make bad and uneducated choices. To be financially responsible we must invest our money into dividend paying stocks, REITs, Rental properties, and owning a few businesses wouldn’t hurt either."
February 18, 2009
How the rich get richer
Barrington’s Blog » 2009 » February: "In doing some research about how or what the rich people in America do vs. the middle class and poor people - I’ve found an answer. There is definitely more depth to this post than what is written here, however, there is one quality or set of rules that the rich cling to…and therefore they become richer.
Rich people use OPM.
What is this? OPM stands for Other People’s Money. The rich uses OPM when they acquire property, when they invest, and in return they become richer without ever using their own money. When the rich want to acquire an apartment complex or rental property, they borrow money from the bank, friends, or family to put a down payment on a loan. Then they have the tenants within the property pay the loan balance off in the form of Rent.
Once the balance of the loan is paid off - the rich keep 100% of the profits…
In a nutshell, that is how the rich get richer…they use OPM. Think about your financial position - how are you acquiring assets? Your Investments? I bet you’re funding your 401k using your money from your paycheck. Or are you saving money for retirement yourself?
If you want to be rich - start using OPM."
Rich people use OPM.
What is this? OPM stands for Other People’s Money. The rich uses OPM when they acquire property, when they invest, and in return they become richer without ever using their own money. When the rich want to acquire an apartment complex or rental property, they borrow money from the bank, friends, or family to put a down payment on a loan. Then they have the tenants within the property pay the loan balance off in the form of Rent.
Once the balance of the loan is paid off - the rich keep 100% of the profits…
In a nutshell, that is how the rich get richer…they use OPM. Think about your financial position - how are you acquiring assets? Your Investments? I bet you’re funding your 401k using your money from your paycheck. Or are you saving money for retirement yourself?
If you want to be rich - start using OPM."
February 12, 2009
Barrington’s Blog » 2009 » February
Barrington’s Blog » 2009 » February: "Did you know that most “financial advisors” are just sales people? Have you ever thought about why they try to sell you on their investment products or cross sell you on some other vehicle that may or may not be the best option for your life?
As we get older we must get wiser, and we must become financially responsible for our own well-being. Most Americans leave there retirement and finances up to chance by taking the advice of a so called “professional”. If you’re going to put your finances in someone else’s hand - then why not get the advice of more than one professional?
When our cars need maintenance, we take it to a mechanic for their advice on what needs to be fixed to get our car running again. But if the mechanic gives us a diagnosis or price that sounds a little peculiar to us - we go get a second opinion. Why don’t we do the same for our money? Is it because we don’t know enough about money? So we just believe anything our “advisor” tells us?
When seeking financial advice from an advisor, make sure you introduce yourself to more than one advisor - from different companies, and let them know you’re interested in setting up an appointment to discuss your finances. Then be sure to set up a time and place where you can have both advisors show up at the same time - let them be surprised when they see each other meeting on behalf of the same client (you).
Inform the advisors on why you’ve chosen to meet with both of them at the same time to discuss your finances (because you want the best advice). And let them debate amongst themselves about what options are the best for you!"
As we get older we must get wiser, and we must become financially responsible for our own well-being. Most Americans leave there retirement and finances up to chance by taking the advice of a so called “professional”. If you’re going to put your finances in someone else’s hand - then why not get the advice of more than one professional?
When our cars need maintenance, we take it to a mechanic for their advice on what needs to be fixed to get our car running again. But if the mechanic gives us a diagnosis or price that sounds a little peculiar to us - we go get a second opinion. Why don’t we do the same for our money? Is it because we don’t know enough about money? So we just believe anything our “advisor” tells us?
When seeking financial advice from an advisor, make sure you introduce yourself to more than one advisor - from different companies, and let them know you’re interested in setting up an appointment to discuss your finances. Then be sure to set up a time and place where you can have both advisors show up at the same time - let them be surprised when they see each other meeting on behalf of the same client (you).
Inform the advisors on why you’ve chosen to meet with both of them at the same time to discuss your finances (because you want the best advice). And let them debate amongst themselves about what options are the best for you!"
Financial advisors
"Did you know that most “financial advisors” are just sales people? Have you ever thought about why they try to sell you on their investment products or cross sell you on some other vehicle that may or may not be the best option for your life?
As we get older we must get wiser, and we must become financially responsible for our own well-being. Most Americans leave there retirement and finances up to chance by taking the advice of a so called “professional”. If you’re going to put your finances in someone else’s hand - then why not get the advice of more than one professional?
When our cars need maintenance, we take it to a mechanic for their advice on what needs to be fixed to get our car running again. But if the mechanic gives us a diagnosis or price that sounds a little peculiar to us - we go get a second opinion. Why don’t we do the same for our money? Is it because we don’t know enough about money? So we just believe anything our “advisor” tells us?
When seeking financial advice from an advisor, make sure you introduce yourself to more than one advisor - from different companies, and let them know you’re interested in setting up an appointment to discuss your finances. Then be sure to set up a time and place where you can have both advisors show up at the same time - let them be surprised when they see each other meeting on behalf of the same client (you).
Inform the advisors on why you’ve chosen to meet with both of them at the same time to discuss your finances (because you want the best advice). And let them debate amongst themselves about what options are the best for you!"
As we get older we must get wiser, and we must become financially responsible for our own well-being. Most Americans leave there retirement and finances up to chance by taking the advice of a so called “professional”. If you’re going to put your finances in someone else’s hand - then why not get the advice of more than one professional?
When our cars need maintenance, we take it to a mechanic for their advice on what needs to be fixed to get our car running again. But if the mechanic gives us a diagnosis or price that sounds a little peculiar to us - we go get a second opinion. Why don’t we do the same for our money? Is it because we don’t know enough about money? So we just believe anything our “advisor” tells us?
When seeking financial advice from an advisor, make sure you introduce yourself to more than one advisor - from different companies, and let them know you’re interested in setting up an appointment to discuss your finances. Then be sure to set up a time and place where you can have both advisors show up at the same time - let them be surprised when they see each other meeting on behalf of the same client (you).
Inform the advisors on why you’ve chosen to meet with both of them at the same time to discuss your finances (because you want the best advice). And let them debate amongst themselves about what options are the best for you!"
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