investing Archives - MoneyThumb

6 Investment Tips for Small Business Owners

Denise Grier — Thu, 02 May 2019 13:20:35 +0000

The Rules of Thumb blog from MoneyThumb realizes that it takes a lot of guts to run a successful small business. It usually means putting in a lot of hours to make your business become what you envision. This means you don't have a lot of time to focus on investments. We hope the following 6 investment tips for small business owners can help you learn more about investments and save you time:

Diversify Your Portfolio--Make sure you have a mix of stocks, bonds, and cash. In the long term, stocks usually provide a return of about 10% a year. That is actually enough to double your money every seven years. But it is smarter, for at least the first 5-10 years of starting your business, that the bulk of your investment goes into bonds. Though the return is less, around 5% a year, they are much less volatile or subject to change as stocks. As far as cash, though it will not grow much, it is advisable to make sure you have enough to run your business for a year.

Increase the Amount You Save--A healthy savings account is always a good idea, but especially when you own a small business. This is your insurance against trouble, and it can't be said enough that there should be emergency funds, even if there is never a need for it, the peace of mind a hefty savings account offers is invaluable in the changing fortunes of time.

Minimize Taxes and Fees--The more an investment relies on investment income - rather than a change in its price - to generate a return, the less tax-efficient it is to the investor.
This great article from Investopedia, A Beginner's Guide To Tax-Efficient Investing, is well worth a read.

View Investing as a Long-Term Game--To get the long-term gains you read about — 10 percent a year for stocks, for example — you have to leave your money in the market and reinvest all dividends and interest earnings. Many people who pull out of the market in downturns wait too long to get back in, missing the bulk of the rebound.

Use Indexing--Rather than try to pick hot stocks or bonds, a large class of mutual funds and E.T.F.’s simply buy and hold securities that reflect an underlying index, such as the Dow Jones industrial average or Standard & Poor’s 500-stock index. Many studies have shown this to be more successful than “active management,” largely because few active managers can consistently pick market-beating investments.

Avoid Options, Futures, and Forward Contracts--These aggressive, speculative instruments can turn huge profits-or suddenly become worthless. In the stock market, by contrast, the average investor makes money because the average stock rises in value over time.

Hopefully, the above 6 investment tips for small business owners will help you out. MoneyThumb also wants you to know that we offer a version of our PDF financial file converters specifically designed for small businesses. You can take a test drive here.

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Do You Listen to Investing Podcasts?

Denise Grier — Fri, 12 Apr 2019 12:52:20 +0000

If you don't listen to podcasts, this article from Forbes predicts that you most likely will in the future. In fact, as the article states, podcasting is the fastest growing form of online content delivery. There are many good reasons for listening to podcasts; podcasts are free to listen to, at your convenience, from anywhere you please, using any device you choose.

For our Rules of Thumb blog readers who are investors or interested in beginning your journey into investing, today we would like to share the best 8 investing podcasts of 2019. The 8 podcasts suggestions come from The Balance, and each is rated by what they offer listeners. The Rules of Thumb blog from MoneyThumb has listed the first four investing podcasts suggestions for your reading convenience:

Best Overall: The Investor's Podcast

The Investor's Podcast offers a top-level look at the latest investing news and trends and according to the website, it's the #1 downloaded stock podcast worldwide. Podcast founders Preston Pysh and Stig Broderson use their extensive finance backgrounds to analyze everything from the current state of real estate crowdfunding to the future of commodities and bonds. They're routinely joined by members of their Mastermind Group, which includes a LinkedIn executive and Calin Yablonski, founder of Inbound Interactive, an SEO marketing company, to discuss investing and wealth-building. Episodes are regularly dedicated to studying the attributes, attitudes, and mindset of some of the world's most famous billionaires and how they built their fortunes. Recent profile subjects have included Oprah Winfrey, Mark Zuckerberg and of course, the Oracle of Omaha himself, Warren Buffett.

2. Best for Beginner Investors: Stacking Benjamins

Are you clueless about where to start investing for retirement? Not sure whether you should pay off debt before making your first investment? Wondering what ups and downs a new year may bring to the markets? You can find answers to all of those questions and more on the Stacking Benjamins podcast. Co-hosts Joe Saul-Sehy and OG (aka The Other Guy) are experienced financial professionals who are on a quest to take investing knowledge and financial literacy to the masses. Every Monday, Wednesday, and Friday they upload a new episode covering the latest investing and finance headlines, including Fintech news so you're always up to date on the newest investing apps. Saul-Sehy and OG are regularly joined by recognized finance experts who are eager to share what they know about investing and money. It's a fun, friendly, and candidly conversational podcast that's great for the investor who's just beginning to build their portfolio.

3. Best Expert Interviews: Invest Like the Best

The Invest Like the Best Podcast isn't so much a conversational show as it is a tutorial in investing, led by instructors who have achieved real-world success in the market. Host Sean O'Shaughnessy focuses each episode on a deep-dive interview with industry experts and leaders like Abby Johnson, chairman, and CEO of Fidelity Investments; Eric Balchunas, senior ETF analyst for Bloomberg; and Albert Wenger, a managing partner at venture capital firm Union Square Ventures. The topics go beyond the usual discussions about investing and cover more complex ground, such as cryptocurrency investments, private equity, and high yield credit investing. If you've ever wanted to pick the brain of a career investor to learn how they maximize returns and identify the best investment opportunities, this investing podcast is a can't-miss addition to your listening schedule.

4. Best for the DIY Investor: Money for the Rest of Us

Some investors rely on a professional financial advisor to guide them through their decision-making. Others, however, may prefer to chart their own course as they shape their portfolio. Money for the Rest of Us is designed with the latter in mind. The podcast, hosted by financial expert David Stein, has a central theme: to help listeners save and invest enough money to enjoy the type of retirement they desire. Stein's experience as a professional money manager led him to create the show to help everyday investors get ahead. Topics are far-ranging, covering key investing issues such as asset allocation, how trade policy may impact the markets, and how to invest to keep pace with inflation. You'll also find shows dedicated to how to invest when you only have a small amount of money and how to teach kids about investing at a young age. It's a one-stop resource for the investor who's ready to take control of their money.

Those are the first 4 best investing podcasts as suggested and rated by The Balance. Read about the other 4 of 8 by following this link. Along with listening to investing podcasts to learn and grow as an investor, keep in mind that MoneyThumb offers PDF financial file converters specifically designed for investors.

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Investing for Beginners: We Found the Holy Grail!

Denise Grier — Tue, 07 Mar 2017 15:14:32 +0000

At the Rules of Thumb blog from MoneyThumb we have learned that online research is amazing. We are always searching for new tidbits of financial information, helpful articles and blogs for our accountants, CPAs, bookkeepers and small business owners.

In today's blog post, we would like to share what could be considered the holy grail of investment advice for beginners. This wealth of financial investing advice for beginner's comes from the About.com blog, The Balance, and author Joshua Kennon.

Before we lead you to the directory of articles Joshua has amassed, here is a description of him and his articles on About.com from the author's website:

"Since 2001, Joshua Kennon has been the Investing for Beginners Expert at About.com. In the going-on two decades since he first published for the network, he has built up a body of work of more than 1,000 articles, essays, and lessons that are available to read for free, covering everything from how to analyze a balance sheet to strategies for portfolio risk reduction. More formally structured than the content on this personal blog, they are a fantastic introduction to the basics of wealth building and asset management for new and experienced investors alike."

In what must have taken many, many hours of work, Mr. Kennon has created a directory of all the financial articles on investing he has written for About.com. Here is the link to that directory.

There doesn't seem to be a subject concerning investing that Joshua hasn't covered in this directory, and there is plenty for seasoned investors as well as beginner's. But if you are considering your first foray into investing your money, this directory offers everything you need to know to get started and much more. A few of the sections covered in the directory, with plenty of different articles and essays concerning each topic, are as follows:

Investing in Stocks
Investing in Mutual Funds
Investing in Retirement
Investing Lessons
The Basics
Portfolio Management
Investing in Bonds
Investing in Small Businesses
Personal Finance
Taxes

And those are just a few sections! We really do advise you to check out the directory of finance and investing articles in the link above, whether you are just starting out or you are looking for additional information to help increase your current financial portfolio.

And as always, please share this post with your readers and followers on social media!

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Which Career is Right for You: Accountant or Financial Planner?

Denise Grier — Fri, 25 Mar 2016 13:09:41 +0000

First of all, welcome to the Rule of Thumb blog from MoneyThumb. If you have come here looking for advice on a career in either accounting or financial planning, you have come to the right place. Hopefully the following blog post will help you understand the difference between an accountant's job and the job of a financial planner so you chose the career path that is right for you.

Accountant or Financial Planner?

Even though both careers, accountant and financial planner, involve a lot of math, the jobs are actually quite different. An accountant records, summarizes, analyzes and reports a business's financial transactions. Public accountants work for third-party firms and audit clients' financial records, a legal requirement for any publicly traded company. Internal accountants work for private companies and perform duties such as internal auditing, inventory accounting and financial forecasting. Sales is not a part of the career, other than the process of selling yourself and your services to potential clients.

On the other hand, a financial planner specializes in areas like tax planning, portfolio management and retirement planning. Financial planners often hold specific licenses and designations, the most common being that of a Certified Financial Planner (CFP). A CFP must pass rigorous exams in multiple areas of financial planning. While a financial planner must be good with numbers and possess a keen understanding of how the markets work, it is important to have strong sales and networking skills.

REQUIRED EDUCATION

Most accountants and financial planners have at least a bachelor's degree. For accountants, the only time a licensing board requires you to complete a certain level of education is when you sit for the Certified Public Accountant (CPA) exam. Becoming a CPA requires 150 hours of post-secondary education, which is more than a bachelor's degree but does not necessarily entail completing a master's degree. Otherwise, individual firms doing the hiring, not state or federal boards, set education requirements for accountants.

You can become a financial planner without a bachelor's degree, as long as you pass the securities exams for your specialties. Gaining the CFP designation requires completion of a bachelor's degree from an accredited school. This designation is almost a necessity to be taken seriously in the field.

NECESSARY SKILLS

As an accountant, you have to be focused, detail-oriented, great with numbers and driven. For public accountants, the work hours are long for the first few years of your career. Accountants refer to the period from January until April as the busy season, when 60-hour weeks and beyond become the norm. The hours lessen as you work your way up the ranks, but this is unquestionably a field where rookies must pay their dues.

Financial planners are first and foremost salespeople. Networking and selling yourself is an around-the-clock job. Along with sales skills, a financial planner must love the markets to succeed. If you do not enjoy waking up and immediately turning on a finance channel or accessing a mobile app that tracks the markets, this career might not be for you.

PAY INFORMATION

Pay structure marks a huge difference between accounting and financial planning. Accountants receive a straight salary; bonuses, when applicable, are usually determined by the performance of the firm as a whole. Financial planners, by contrast, receive either straight commission, or commissions and bonuses on top of a small base. It is very much a pay-for-performance career. Build a large client base, and you can become lavishly wealthy; struggle to generate business, and your financial planning career will likely be short-lived.

IN CONCLUSION: Accountant or Financial Planner?

The choice between accounting and financial planning depends more on your personality than anything else. Both careers require mathematical proficiency and a great work ethic. Beyond that, if you hate sales, financial planning is not the career for you. Similarly, if you are not keen on crunching numbers and prefer big-picture analysis, accounting is likely not your dream career.