Warren Buffett, Cash, Stocks, and Award-Winning Book Invest Now

Warren Buffett, Cash, Stocks, and Award-Winning Book Invest Now

Warren Buffett, the world’s greatest investor, richest man, and dedicated philanthropist, wrote an op-ed post in The New York Times on Oct 16. In this post, Buffett stated that he is getting rid of cash (lots of it) and buying stocks. Buffett’s decision to trash cash and buy stocks amid an ongoing financial crisis has created heavy buzz and it is expected to bring some confidence back in this time of market turmoil. I find Buffett’s article somewhat interesting because what he mentioned in it resembles with what I said in my book, Invest Now. Let me point it out to you by doing a comparison.

What Warren Buffett Said

What I Said In Invest Now

Page No.

“Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value.”

“Stay away from savings accounts. Even if you hold one of those high interest–paying savings accounts, you will not beat inflation in the long run.”

Page 9

“I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now.”

“Let me give you an eternal stock-market tip that will remain true forever. No one can predict the market. Not I, not you, not any analysts, not Warren Buffett. Simply no one can or ever will.”

Page 83

“What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.”

“No one can predict the market, which will always have ups and downs. Focus on your long-term goals. Start investing, keep adding money, and stay invested. If you start early, you will have time on your side; even a smaller amount will turn into a large amount in the long run.”

Page 117

Invest Now is jam-packed with timeless material which is true today, and will remain true forever. In Invest Now, I emphasized staying invested for the long run and asked you not to panic in market turmoil such as what’s happening globally right now. Start investing, focus on your long term goals, and you will survive global financial meltdown.

What Is a FICO® score?

What Is a FICO® score?

The FICO® score is a number (a credit score) between 300-850®. FICO® score is the most widely used credit scoring system in the world. Most of the financial institutions in North America use FICO® score to determine an applicant’s credit risk. Fair Isaac Corporation – the pioneer in credit scoring, developed the FICO® score. Engineer Bill Fair and mathematician Earl founded this corporation in 1965.

A high FICO® score is considered a good score for consumer. Most consumers score in the 600 score and 700 score. Above 700 score mean you are in good financial position and lenders will most likely approve your credit request. Below 600 score indicate you are a high-risk client and lenders will most likely decline your credit request or will approve with much higher interest rates. Lenders buy your FICO® score from credit reporting agencies such as Equifax, TransUnion.

Five Parts

FICO® score is based on the five general categories:

·   Payment History = 35% – Paying bills on time helps. Avoid late  payments.

·   Amounts Owed = 30% – If you owe a lot of money, it lowers your score.

·   Length of Credit history = 15% – A longer history increases your score.

·   New credit = 10% – Too many credit inquiries will lower your score. Lenders consider you a high-risk client when you actively seek credit.

·   Type of Credit = 10% – If you use a combination of different types of credits such as credit cards, mortgage, car loans etc, and have good paying history – it may increase your score.

How To Obtain FICO® score

A regular credit bureau report does not provide FICO® score. For example, regular Equifax Credit Report costs $15.50; however, it will not show your FICO® score. To see you FICO® score, you can purchase Score Power Credit Report – it costs about $24. Or there are free providers such as Mogo, Borrowell, Credit Karma who provide FICO® score for free. Your banks may provide this for free as well. Check your online banking portal.

Are There Any Personal Finance Software Programs That Are Particularly Good For Canadians?

Are You Aware of Any Internet Based Personal Finance programs?

First Published: November 6, 2008 ADawnJournal.com

I always get emails from ADJ readers asking questions on a variety of topics. I try to reply those as soon as I can. Take the email snapshot on the top left, for example. A Canadian couple wants to know which personal finance software programs to use. Today, in this post, I will let you read my answer. I haven’t changed their questions, or my answers, except one thing – their names are being withheld for privacy.

On Tue, Oct 7, 2008 at 11.14 AM, A Canadian Couple XXXXXX@sasktel.net wrote:

Do you recommend any software programs such as Money or Quicken?  Are there any that are particularly good for Canadians? Are you aware of any Internet based personal financial programs?

Here Is My Answer:

Hello There,

Thank you for reading my site. Your questions can be answered in two parts.

Part 1

If you are looking for a software to bring all your accounts such as bank accounts, mutual fund accounts, credit card accounts under one platform, there are two options. You can use either MS Money or Quicken. These two have Canadian versions and you can budget, track your expenses, and see all your accounts and transactions on one screen. Quicken would cost about $100 and MS Money would cost about $50. Many computers have MS Money installed on it. So check first to see if you already have MS Money. Which one is better? Quicken is my choice but it costs more. If you can get free MS Money, do not spend money on Quicken. One point I would like to mention is probably you will get notifications every year asking you to update (meaning spend more money). Do not upgrade. It is unnecessary and a waste.

Part 2

If you do not need to see all your accounts and transactions under one software,  go with an online program.  There are the two I would like to mention: www.Expensr.com and https://www.moneytrackin.com/. I use Expensr. With these you can track your spending, make budgets, set goals etc. Check both and pick the one you like.

Why We Spend Unnecessarily and What to Do About It

Why People Spend More Than They Earn

First Published: ADawnJournal.com July 21, 2010

Remember “the number one personal finance tip of all time” I mentioned in Ten Timeless Personal Finance Tips By Financial Author A. Dawn article? That is, you need to spend less than you earn. To spend less, you need to know why we spend more than we earn. If you can grasp the basics of the “spending more than earn” scenario, it will be a lot easier for you to save money by spending less. Let’s look at the most important factors that cause us to spend more.

Lack of Information – The majority of the population have no idea where their money is going exactly. We often ignore small spending here and there; but at the end of the month all these tiny expenses add up and turn into something big and beyond our control. To handle this, you need to keep track of your spending. I don’t believe that dollar-for-dollar budgeting works. However, you need to keep track of your spending to see the patterns in your spending behaviour and take steps to cut down on unnecessary expenses. Here is an article to help you find personal finance software to track your spending: Personal Finance Software Review by Financial Author A. Dawn

Lifestyle Habit – Keeping up with the Jones, competing with colleagues, a tendency for showing off riches to the world, acting rich and successful but not able to survive without steady paycheques, feeling a sense of power while spending money, being jealous at other people’s stuff and trying to match their possessions, an inability to say NO to others when they ask for something (although you’re not in a position to afford it), not treating credit card spending like real money, not being true to yourself, and much much more – all these are variations of lifestyle habits. Let’s be honest here – If you aren’t able to save money because of one of these reasons or a similar one, it can be a serious problem and has to be dealt with seriously. I doubt that reading articles online will be any good resolving this. If you think you have this problem, I would suggest you read a few books, and based on the severity of your problem you may need to consult a qualified financial professional. Books I recommend:

The Simple Living Guide
Your Money or Your Life by Dominguez and Robin
The Millionaire Next Door by Thomas Stanley & William Danko

Instant Gratification – Here is an excerpt from my book Invest Now which is very suitable: “Every day, we face tempting opportunities to spend money. A sea of indulgences can distract you from investing for your future. “Buy now!” “Pay after one year!” “Don’t pay interest for six months!” Everyone everywhere is urging you to spend, spend, spend. I’ve even seen a “Vacation now, pay later!” advertisement on the subway. But every dollar you spend now is a dollar in lost investment opportunities that could have grown a lot more in the long run”. We are bombarded every second to buy into some “now and pay later” scheme. We want what we don’t need when we want it, and are willing to drag on paying interest to fulfill our instant gratification mentality year after year. What we don’t realise is that a $100 item is costing us $150 at the end of the interest paying term and it is prohibiting us from investing for our future – because we are paying interest on many other similar things and becoming money constrained. How should you handle instant gratification syndrome? Here are a few simple tips: try to pay for everything in cash; learn to delay major money sucking purchases, your urge will likely wither away if you can delay a few days; if you are at a store and can’t stop yourself from purchasing something you don’t need and/or is out of your budget, try counting 1 to 10, or take a few deep breaths, or try walking around the store. Once you try one of these; most likely your strong desire will go away.

Not Having Any Goals in Life – We tend to spend recklessly if there is nothing to look for in the future. Setting up goals for different stages in life is a smart way to save money and accomplish goals. These goals can be broken down into smaller parts. For example, instead of saving for a $20,000 down payment for a condo, it’s a lot easier to save $5000 each year for 4 years. Also, have set plans about your life such as buying a house by 30, paying half of the mortgage by 40, retiring at around 50, and so on. Each time you purchase something, think before paying for that item. Take a moment to think whether this purchase will help you achieve your goals or will take you away from your goals.

Whether your spending habit is causing you debt problems or keeping you from achieving your future goals, take a deep look at the causes and eliminate them to start saving for your life. No one else will care for your future and money like you do, and only you can take the necessary steps to secure your financial future.

You Are Rich If You Have $3650

Where Most Millionaires Live

First Published: ADawnJournal.com Published Date : December 19, 2014

According to Credit Suisse Global Wealth Report 2014, you are one of the half wealthiest people on earth if you have $3,650. The other unfortunate half own less than one percent of global wealth. If you would like to be the top 10 percent of wealthy people, that would require $77,000. This top 10 percent owns 87 percent of global wealth.

And almost half of the global wealth owned by the richest 1 percent. You will need $798,000 to belong to the top 1 percent of the richest people. Where are all the rich people? 41 percent of the world’s millionaires live in the USA. Other top countries where millionaires reside are Japan (8 %), France (7 %), Germany and UK (6 %), Italy (5 %), Australia (4 %), China and Canada (3 %). The highest density of millionaires can be found in Europe.

By 2019, global millionaire numbers are expected to increase by 53 percent, the global middle class is expected to increase 30 percent and upper-middle class only 22 percent.

China is expected to give birth the most millionaires by 2019 due to its skyrocketing population growth. Millionaires growth in the USA will not be as vigorous as China, however it will still retain its title of the country where most millionaires live by 2019.