How to get rid of debt? You want to get rid of debt??

Yes, this is the question...do you want to get rid of debt? My answer is yes AND no!

First answer, YES, you should get rid of bad debt, so that you don't owe anybody money, and save on interest.

We know interest will keep compiling the moment you owe money to banks, companies, or even friends (who wants to charge interest on you!).
What do we do to get rid of debt? 
Cut your credit cards? Learn to be stingy? Run away from the country? Hmmm, none of these...

All we need to learn is to manage your credit cards, and I have a post just to talk about this
http://wealthstreetjournal.blogspot.com/2010/12/how-to-use-your-credit-card.html

And start budgeting yourself. I should ask you, at the moment what do you own? A car loan, and some personal loan for business purposes? Ok, regardless of what you have, always make sure that you have enough balance to pay back these debt each month. If you can't manage to pay back, then don't even borrow it in the first place!!


My second answer, NO we don't get rid of good debt. What is good debt?
Some of you may have borrowed money to finance on your mortgage or property loan. Well, these are assets, not liabilities...As year goes by, inflation rate will increase, and it will help to increase the value of your property.

1. Therefore if you purchase a house at $100,000
2. After paying deposit of $20,000; you need to borrow additional $80,000 for 20 years 
3. Assuming next 20 years it appreciates to $180,000.
4. Plus minus interest of loan, you could reap a $40,000+ nett if you sell it after 20 years.

Now this is a good debt, you borrowed the money to create more value to you in the future.
And bad debt? Bad debt is those money you borrowed that's gonna drag you further to poverty. Bad credit card management is one great example.

Do you think having $1 million dollar can be rich & financially free?

I just happened to have this idea of measuring $1 million dollar the other day.

Okay, you heard it from direct sales meeting, seminars, and books about achieving monetary goals:

“Yes, you can become a millionaire!”

” It’s time to earn your first million!”

“You can be financially free!”

If having $1 million dollar today is rich, then in the early 1940s having $1 million dollar is extremely rich!

This is because value of our current money will reduce every year, caused by our ‘generous’ inflation. 

Inflation rate goes up over the years, and average inflation hike rate is normally 3.5%.

Simply take this example of a cup of coffee. One cup today cost us $2, in the next 20 years one cup may cost us $4.

Therefore do you think you will be financially free, having $1 million dollar next 30 years? I doubt so.

If you are in your mid 30s, you will need money to start up a family, buy a house perhaps, taking care of parents and apart from all that you want to be financially free…How does $1 million dollar be enough??

A single family home in 1934 cost you $7,000;

In 1960 it will cost you $82,200;

In 1995 it will cost you $272,000;

Almost every 30 years the figure jump by a digit.

 So another 30 years, year 2025, how much will a single family home cost you?? I let you calculate the figure.

Here is the chart of an employee earning fixed monthly salary for living:-

When he first started, his income is still above inflation rate, he is fine. In the years to come, if he still gets the same salary, inflation will catch up with his rate. While still earning the same salary, he will become poor before knowing why!

$1 million dollar is not enough for years to come, so what should we do??

This is the chart we should be having:

You need to earn extra income that is beyond fixed salary through investment. You need to cope with the inflation rate, if the inflation rate goes up 3.5% every year, your investment interest should be compounding more than 3.5% every year. Then you make real money!

Tips for stocks that make you rich!

Here's what I have encountered in real-life.

Adam was an average middle-aged man, he is just like other common people wanted to earn extra money for his family and to live better... And one fine day he caught his eye on a half-paged ad on newspaper with big header, 

"Free 1-hour seminar to learn how to pick a profiting stock".  

Without hesitation he grabbed his cellphone and registered for a seat. 

Eventually the day arrived and he was in the seminar, comfortably seated. After listening to an hour's speech, speaker requested the audience to open up any questions. Adam raised his hand, the only question he asked was, "Tell me which stock should I buy to earn money?".  

Speaker replied, "Now if you want me to tell you what to buy, you are wasting your time attending my seminar. Similarly, if I know how to cook well, I won't let you eat my food, instead I will teach you how to cook like ME."

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I can't agree more with the speaker. Adam was practically asking a dumb question, forgive me for being sarcastic. But this is a real experience, people are always impatient to earn fast money.

Let me put this straight, so what if they get the tips to buy stock ABC? Eventually when they run out money, they ask for new tips again? Then again? Then another time??
How long can Lady Luck continue on?

Wealthy people are always willing to learn. They are enthusiastic about the tools and ways to earn money. They don't take shortcuts. Even a robber will plan before robbing a bank!

Though I am not an expert, AND I also know that some people earn more than me buying stock through tips. But I always have that in mind thinking that it won't last too long. Even long, it won't make them wealthy enough for the years to come.

My post title attracted some readers, most people will! Because fast money is always been perceived to be good money.  But they are not good! They are short-term satisfaction. So please do not to be like them, you can start to make some changes. Learn to earn money, that is for the better future. Tips is for very average people, you are not one of them.

How to pick the next profit stock - fundamentally

I love to learn, and I am constantly doing it. I don't think there are any other ways to earn money except learning it first. Either from people, from books, mentors, or whatever it may be...!

We have seen many books about getting rich in stocks. Some of us love fundamentals and others prefer technical analysis. While both ways can help earn money, I choose to be fundamental on stock!

One of the reason being that love economics and I was fascinated on the fact that small little things can change a stock price so much! And how small little news can earn you a lot, or make you lose money till your pants drop.

Saying how to pick a profit stock, I will go by some of these points:

First, knowing what happened around the world...Company especially cyclical ones are sensitive to economy and world environment. So this is the first and most important thing to look at before choosing. Let's take a great example, Japan's earthquake triggered the nuclear reactor...this is a bad news for Tokyo Electric Power Co (TEPCO). The company had a hard hit on the bad news, and those stock owners who did not read the news suffered great losses..

Second, company profile. This is simple, wanna know the company? Google it, or search it in wikipedia, or go to their site. Read it. After reading, ask yourself...do you really know this company well? Is the company as simple as saying  'Coca cola sells carbonated drinks'? or  'Starbucks sells coffee'? For some cases, if you can't figure out what a company is doing then avoid owning the share.

Third, is company earnings. Now you need spend some effort reading some of their earnings figure, profit numbers, etc. These are very much related to accounting. But wait, you don't need to be an accountant to read it. I flunk my accounts paper before and now I am reading income statement, balance sheet and cash flow statement. Ripley's??? Believe it or not??

Fourth, the management. Investors will only invest their money in a company that are trusted...If company was facing trouble or sudden change on management. We surely know that share price will be triggered. Great example of what happened yesterday, David Sokol resigned from Berkshire Hathaway (company own by billionnaire Warren Buffett). This triggered an impact over the company, and for sure a change will respond to a drop of share price. Be it short-term/long-term.

Legendary investor, Warren Buffett

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Go through this steps...you will find a company that's worth investing. I am sure of it!

........but if you are lazy, then you have just wasted your time reading my post just now. Too bad, find some other magic article worth your time. 

Are you thinking of getting profit over market uncertainty?

The market doesn’t like uncertainty. Yes, I am talking about the stock market, very uncertain since last month.

Dramatic events came like a chain of problems. Starting from Egypt’s protest to Libya’s battle to Japan’s tsunami. Things don’t slow down don’t they?

But still, face it…this is a stock market we’re talking about. Economy is a very sensitive element on such investment. I admit that novice investors are getting panic thinking that market is over, everything is going down!

Let me tell you, its wrong! Being a discipline investor you need to stick your head on the game. We don’t beat the market, we move along with it. Market is trading sideways right now, no denying, but as things are getting stable in the future, stock will move upwards. What goes down will always comes back up. Be optimistic!

So here’s some plan that perhaps you can do. I will target on certain industry that may help and when things are getting better, you know where to get profit from.

Japan suffered great losses over the unfortunate disaster. However they are not gone! They are the 3^rd largest economy in the world. And as they reported that they will need estimated 5 years to rebuild the wreck. They need a lot of materials for rebuilding.

And you come in play here. You may begin to target on cyclical industry such as energy, timber, metals/mining, and construction as it’s obvious that Japan will need plenty of those to proceed with their restructuring. And therefore, requesting imports from other countries in that case. Despite having to spend more money, Japan is actually helping these companies to earn profit.

Big companies like General Electric and Caterpillar have confirmed to participate in rebuilding Japan. You may start doing your homework now to see which other companies that may benefit from here.

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And that is for future, and for now I am not going to touch on anything yet. Market is still unstable, and share price swing even faster than my mood. I choose to wait and standby. Perhaps you can do so~ let the fund manager and analyst do their job.