InvestorMint provides personal finance tools and insights to better inform your financial decisions. Our research is comprehensive, independent and well-researched. InvestorMint compares financial service providers to provide helpful insights that better inform your financial decision
Over the course of a boxing career that spanned 25 years, former heavyweight world champion Mike Tyson earned more than $700 million.
Most of that fortune has disappeared, although you don’t have to worry that Tyson will be evicted from the luxury mansion in Henderson, Nevada, that he shares with wife Lakiha, their 8-year-old daughter, a white tiger, and 350 pigeons anytime soon. He’s still got an estimated net worth of $5 million after all.
“My whole life has been a waste—I’ve been a failure,” the man once nicknamed Iron Mike confided to a reporter for USA Today in 2005.
Is that really true, though? Here’s the story of Iron Mike Tyson’s net worth, from wealth and fame to prison and poverty, and back again!
Mike Tyson The Comeback Kid
There should be some sort of prize for losing more than half a billion dollars in less than 20 years.
After Tyson retired from the ring in 2005, he fell into a lucrative second career in Hollywood.
In 2016, Tyson moved away from playing heavily stylized versions of himself on screen and began breaking into character roles, first as “James Clown” in the movie “Meet the Blacks” and then as “Bouncer” in “The Keys of Christmas.”
Tyson is also lighting up computer screens these days with his own YouTube channel.
Daymond John | Hotboxin' with Mike Tyson | Ep 25 - YouTube
His channel, which is a collaboration with the production company Shots Studio, specializes in comedy sketches and parodies of music videos.
Digital personalities like Rudy Mancuso and Venezuelan-American actress Lele Pons star.
Little by little, Mike Tyson is rebuilding his net worth. Five million dollars is nothing to sneeze at. Still, you’ve got to wonder how he managed to run through $700 million like that. What happened, and will history repeat itself?
Mike Tyson: Before Boxing
Mike Tyson was born and raised in Brownsville, one of Brooklyn’s harshest ghettos.
He was a big kid who weighed 200 pounds by the time he was 12 years old, but he had an unusually high-pitched voice and a lisp, and that created problems for him.
Other kids laughed at him. They ridiculed him. Until he lashed back.By the age of 13, Tyson had been arrested 38 times.
When he was finally convicted of purse snatching in 1979, he was sent to the Tryon School for Boys in upstate New York.
There, he came to the attention of the legendary boxing trainer Cus D’Amato, who had worked with Floyd Patterson.
D’Amato sensed Tyson’s potential and was determined to help him fulfill it. In 1984, D’Amato became Tyson’s legal guardian.
Mike Tyson Early Boxing Career
Tyson fought for the first time in front of an audience in 1985 at the age of 18. He beat every opponent in his first 19 fights with a knockout punch.
Mike Tyson was only slightly more than 20 years of age when he knocked out Jamaican heavyweight Trevor Berbick in the second round of the World Boxing Council (WBC) championship match in 1986.
Berbick had become famous as the boxer who defeated Muhammad Ali in Ali’s final match.
In 1988, he successfully defended his titles with victories over Larry Holmes, Tony Tubbs, and Michael Spinks. “I’m the biggest fighter in the history of the sport,” Tyson boasted. “If you don’t believe it, check the cash register.”
Professional Boxing Career
Then, in 1990, in a stunning upset that turned the sports world on its head, Tyson lost his undisputed heavyweight title to a little-known boxer named Buster Douglas.
In the aftermath of the loss, sports writers’ theories flew fast and furious. Douglas had gotten lucky. Tyson had been out of shape. Tyson had gotten cocky.
That last theory is probably closest to the truth: It was simply inconceivable to Tyson that there was a fighter alive who could beat him. Pride comes before a fall.
His defeat at Douglas’ hand precipitated a change in Tyson. He scrambled to regain his title.
Douglas was handily defeated later in 1990 by Evander Holyfield, but Tyson had to pull out of a planned match with Holyfield due to a rib injury.
Mike Tyson Beyond The Ring
Outside of the ring, Tyson’s behavior grew more and more erratic. You might say he was a stick of dynamite looking for a match.
In 1991, he was charged with the rape of Desiree Washington, a Miss Black Rhode Island contestant.
He was subsequently convicted, and in 1992, he began serving a six-year prison sentence. He was only 25. While in prison, Tyson converted to Islam.
When Tyson was released from prison in 1995, he was eager to get back on top, and America was eager to watch him: Tyson’s first comeback fight earned more than $96 million.
Iron Mike defeated Peter McNeeley, Buster Mathis Jr., Frank Bruno, and Bruce Seldon easily.
However, the fight he’d had to drop out of continued to haunt him. The one champion he had never defeated was Evander Holyfield.
Mike Tyson vs Evander Holyfield
In 1996, Evander Holyfield was widely viewed as a has-been. He was 34 years old and had retired two years previously following the loss of his title to Michael Moorer.
Why did Holyfield agree to fight? Money, honey: The live gate alone was projected to be more than $15 million; the total take was expected to surpass $100 million.
Holyfield may have been the underdog going into the fight, but in addition to training, he’d spent his time before the fight studying Tyson’s moves and identifying Tyson’s weaknesses.
On the night of November 9, 1996, Holyfield had a strategy: Block Iron Mike’s punches and keep him on the ropes.
When a barrage of punches in the 11th round sent Tyson reeling to the sides once again, the officiating referee had seen enough. Holyfield was declared the victor, reclaiming his WBA title.
A considerable amount of controversy had arisen following the first Tyson vs Holyfield fight.
In the seventh round, Holyfield and Tyson had lunged toward each other with their heads down, which resulted in a collision.
Technically, Holyfield had head-butted Tyson. Head-butting is an illegal move in boxing, but in this instance, the referee judged that the head-butt had been unintentional.
Tyson’s fans went wild. A rematch between the two fighters was scheduled for June 28, 1997.
Tyson vs Holyfield: The Rematch
From the very beginning of this second match, Holyfield dominated Tyson.
In the second round, Holyfield’s habit of moving with his eyes down resulted in an unintentional head-butt once again.
In the third round, Tyson seemed to be getting his mojo back, but with less than a minute to go, Holyfield reversed the flow and snarled Tyson in a cinch.
Then it happened.
It was probably the most infamous incident in the entire history of American boxing: Tyson somehow managed to remove his mouthpiece and bit down hard on Holyfield’s ear.
He bit off a 1-inch piece of cartilage from Holyfield’s ear, which he spat onto the floor of the ring.
Remarkably, the referee did not disqualify Tyson. He merely deducted two points from Tyson’s score, and the fight continued.
In the fourth round, Tyson bit Holyfield’s ear again, and the fight was stopped.
Conventional wisdom had it that Tyson knew he was being outboxed and rather than risk getting knocked out in front of a vast pay-for-view audience, he preferred to get disqualified.
“The winner by way of disqualification and still the WBA Champion of the world [is] Evander ‘The Real Deal’ Holyfield!” the referee announced.
Tyson subsequently was stripped of his boxing license and fined $5 million.
Mike Tyson Bankruptcy
In 2003, Tyson was forced to file for Chapter 11 protection in U.S. Bankruptcy Court.
His lavish spending habits and the bad advice he’d gotten from people he had trusted to help manage his money had depleted his once vast fortune.
At the time of his bankruptcy filing, he was $23 million in debt.
Those debts accumulated because of a $9 million divorce settlement to his second wife Monica and more than $17 million in back taxes owed to the U.S. and U.K. governments.
Mike Tyson Off The Rails
In addition to his rape conviction, Tyson has gotten into numerous other conflicts with the law.
In 2006, after he nearly crashed into a police vehicle in Scottsdale, Arizona, he was arrested and charged with driving under the influence and felony cocaine possession.
While awaiting trial, he checked himself into rehab and was subsequently sentenced to three years of probation and community service.
The sentencing judge made a point of lauding Tyson for seeking the help he so obviously needed.
Mike Tyson Awards
Throughout his career, Mike Tyson earned a number of awards.
In addition to the WBC, WBA, and IBF championships he won in the ring, he was a two-time winner of the Sugar Ray Robinson Award, in 1987 and then again in 1989.
In 1989, he was also named the BBC Sports Personality of the Year Overseas Personality.
Have you ever been tempted to sell shares and lock in gains when stocks in your portfolio rose?
Have you ever impulsively sold stocks that were nosediving because you were afraid they would fall further and lead to bigger losses?
If so, here’s what you need to know before selling a stock. When should you sell a stock?
Selling A Stock Has Bigger Tax Implications Than You Might Think
Paying taxes on gains, especially short-term capital gains taxes, can drastically lower your portfolio net worth over long time periods compared to a buy-and-hold strategy.
When you are selling a stock that has risen in price from the time you bought it in a brokerage account, you will need to pay taxes on the gains. The impact of these taxes over time is much bigger than most investors realize.
To understand just how much regular tax payments on gains hurt portfolio growth over time, imagine going back in time when a 30-year old Warren Buffett had a goal to build enormous wealth.
The year is 1960 and young Warren Buffett is looking to the future imagining how to become the most successful investor of all time. He calculates how much money he will make if he can earn 15% each year for the next 60 years.
Although we don’t quite know when Mr. Buffett made this calculation, it is clear from his investing method he ran the numbers at some point because his investing approach resulted in him becoming one of the richest investors in the world.
Let’s imagine back in 1960 Mr. Buffett compared two portfolios growing at 15% annually. One portfolio is taxed each year by Uncle Sam at the rate of 30% on short-term gains, and the other is not taxed until 60 years later at a long term capital gains rate of 20% (we’re making these numbers up as the year is 1960!).
Although this is a hypothetical example, it is helpful to compare the effect of taxes over time.
You can see in the table below that holding a portfolio growing at 15% each year and not paying taxes until the final year results in $100 growing to an astounding $381,217.
By contrast, paying taxes on gains each year results in the second portfolio growing to $61,576, meaning that the cost of paying Uncle Sam regularly is to amass a portfolio about one sixth the size it otherwise could be!
While paying taxes by selling winners regularly can hurt portfolio growth over the long term, it is generally a bad idea to hold onto a stock simply to avoid paying taxes – especially if it is fundamentally weak.
Nevertheless, the next time you are tempted to sell a stock simply to lock in gains, take a step back and think about how the cumulative effect of paying taxes regularly on portfolio gains can severely hinder the growth of your portfolio over the long term.
TAXES ON STOCKS IN THE RED
Stocks in the red – those that have fallen in value and are underwater – will not be subject to taxation in a brokerage account.
But selling losers can help you offset taxes owed on winners. You can offset capital gains on winning stocks by selling losers in a process known as tax loss harvesting.
Nobel prize winning research shows that it feels better to lock in gains when stocks rise in value than to risk them falling back to breakeven or worse. When you understand your own cognitive biases to make irrational investment decisions, you can consciously make better investment choices.
SELLING A STOCK BASED ON COGNITIVE BIAS
A Nobel prize winning theory, called Prospect Theory, states that people hate losing more than they like winning.
So, how does Prospect Theory affect your investment decision-making?
It turns out that by fearing losses more than we enjoy gains, we humans have a tendency to sell winning investments too soon.
It feels good to lock in profits and bank gains by closing out positions. But what feels good short term can hurt us over the long term.
As John Maynard Keynes once stated:
“The market can remain irrational longer than you can remain solvent”
Another way of saying this is that stocks can move further than you ever imagine possible.
As stocks rise, bearish voices clamour to rationalize why further upside is limited. But the old adage “stocks climb a wall of worry” has become famous because share prices often rise in spite of the doom and gloom prognostications of skeptics.
Selling a stock too soon is a common stock trading mistake but once you understand Prospect Theory, you become more aware of the risks of making irrational investment decisions based on a human cognitive bias.
SELLING A STOCK BECAUSE OF VOLATILITY
When fear grips investors, stock market volatility can spike higher and catalyze impulsive reactions. Buying and selling a stock because of share price swings is a common trading mistake, so how do you improve your chances of side-stepping these pitfalls?
First, ask yourself if anything fundamentally has changed? Is the stock rising or falling because the overall market has started to soar or a stock market crash is in full force?
If you buy a stock based on its share price, you may sell it based on its share price too. And if the overall market is soaring higher or crashing lower, your stocks will probably tag along for the ride.
But just because the S&P 500, Dow Jones Industrial Average, Russell 2000 or NASDAQ is rising or falling doesn’t mean the thesis behind why you bought a stock has changed. Maybe it has, but maybe the market swings and roundabouts are just noise to be ignored.
SELLING A STOCK BASED ON NEWS EVENTS
A news event about a stock you own may be important enough to warrant selling a stock, but to know one way or the other with certainty you should understand how to research stocks.
If a company missed earnings this quarter or management lowered forward guidance, nervous nelly shareholders may have a negative knee-jerk reaction and sell.
But if you understand how to research stocks properly, you will know how to distinguish fundamental shifts from news events that only have a temporary impact on share price.
For example, a company like Pepsi may miss earnings from time to time but if its brand value remains strong in consumers’ minds, its distribution network unaffected, its sales remain strong, and its market share resilient, the earnings miss may just be a temporary bump in the road.
It is better to buy, at a fair price, a company whose intrinsic value is constantly increasing than to buy at a discount a decent company whose intrinsic value is not growing by much.
When you buy a stock, you miss out on another. But what if the other stock rises more than the stock you own? That is the opportunity cost you must come to terms with when you buy a stock.
When you see another stock rising in share price more, it doesn’t necessarily mean you should jump ship, sell your stock, and buy another.
Forget about share price for a moment, and focus on what the company is truly worth – its intrinsic value.
What you want to find are what Warren Buffett calls:
“Wonderful businesses at a fair price”
By fair price, Buffett means share prices close to intrinsic value. And by wonderful, he means that over time the intrinsic value of these companies will grow.
Warren Buffett’s Video Address at the 2015 SelectUSA Investment Summit - YouTube
Perhaps it seems obvious, but this philosophy was not the original investing framework that Buffett used.
When he began investing, Buffett bought:
“Fair businesses at a wonderful price”
These were business trading below intrinsic value that had pretty good business models. By buying decent businesses at a discount to fair value, Buffett could make money when the share price rose but he learned that it’s much better to buy a business whose fair value is increasing too.
Greater long term wealth is accumulated by buying businesses whose intrinsic value increases over time than is amassed by buying businesses temporarily “on sale” in the market.
Should I Sell Stock Because
My Portfolio Is Not Balanced?
Make sure your overall portfolio is balanced and in alignment with your overall financial goals and risk profile, especially when one stock appreciates in value so much that it skews the weightings in your overall portfolio mix.
When you start investing, you may have your money spread across a number of stocks. But as time goes by, some stocks soar. Maybe you bought Facebook or Google when they came public.
When a company grows its intrinsic net worth fast, it generally doesn’t take too long before its share price reflects the increased value.
But when one company in your portfolio grows much more rapidly than others, your overall portfolio can fall out of balance.
It is tempting to hang on to a winning stock but if it becomes such a large part of your portfolio that swings in its share price significantly impact your overall portfolio, then it may be time to pare back the holding so your overall portfolio is aligned with your risk profile and financial goals.
Avoid selling a stock if you plan to repurchase it again within 30 days, otherwise it triggers a wash sale.
As a calendar year end approaches, it becomes tempting to sell losing stocks in order to generate tax losses that can be counted against winners you have sold.
But selling a stock and buying it again a short time later – within 30 days – triggers a wash sale, meaning your tax losses cannot be counted.
The IRS views selling a stock in order to capture tax losses and subsequently repurchasing it within 30 days as an attempt to “game” the tax system and disallows it.
To “get around” this tax rule, some robo advisors, such as Betterment and Wealthfront, provide advanced tax-advantaged portfolio management strategies, such as Direct Indexing, whereby losers are sold and similar (but not the same) securities are bought.
By so doing, tax losses can be counted while reducing the risk of missing out on upside share price movement in a given sector.
Emotions like greed and fear have helped humans evolve into what we are today. Without them, your distant ancestor might not have hoarded the food needed to keep her family fed or she may have wandered into a field full of lurking predators.
As animals, we need greed, fear, and other emotions.
As investors, we need to build a wall between our feelings and our actions.
When a stock’s price changes suddenly, you may experience strong emotions that tell you to sell a stock. Perhaps the price just skyrocketed, and you want to earn a quick return on your investment. On the other side, the stock’s price might have plummeted, and you want to sell your stake to make sure you don’t lose more money.
Letting your emotions rule your behavior will almost always point you down the wrong path. Instead of letting greed or fear guide you, use logic and patience to get the highest returns on your investments.
If you know that you own stock in a company with good business practices and room to grow, then you need to sit back and watch the stock’s value increase over time.
Emotions might have worked well in the distant past, but they have no place in today’s marketplace. Do your homework, have faith in logic, and gain wealth over many years instead of responding to immediate changes in the market.
Are You Selling a Stock Because You Got a Hot Tip?
If you talk to enough investors, you will hear a constant stream of hot tips. “Company X is going to tank next week because its new product hasn’t met expectations!” “Company Y’s value is set to flatline tomorrow because the CEO got caught in a compromising position!”
How often do these insider predictions come true? If the people you talk to had such great information, then they wouldn’t want everyone else to know about it.
Ignore hot tips and focus on legitimate news sources. Your brother-in-law doesn’t know what’s going to happen to AAPL’s value. He’s probably getting his information from websites that post wild speculations.
Rely on vetted information from professionals; follow the news; and pay attention to trends. You may not make a quick buck this week, but you will build a robust portfolio that continues to earn money throughout your life.
Be Smart When Selling A Stock
The long and the short of selling a stock is to be smart about the steps you take before pulling the trigger:
Plan when you will sell before you begin buying
Consider dollar cost averaging in and out
If you plan to sell, avoid buying within 30 days or it will trigger a wash sale
Know your opportunity cost when you buy or sell a stock
Calculate the tax impact both short-term and long-term of selling a stock
Verify your decision to sell is based on a fundamental reason
What factors do you consider when selling a stock? What investing tips and trading lessons can you share? We would love to hear from you in the comments below.
If you are looking for ways to make money in the stock market, options can help you not only increase your income but also limit your risk.
Unlike passive investors in the stock market who rely on stock market gains and dividends to make money, options traders have many more ways to make money.
Options can generate cash flow similar to dividends. And options can protect investments much like insurance policies do.
Here are 5 options tips to help you with your goal to make money trading.
Option Trading Tips #1: Make Money Trading Covered Calls
If you already own a portfolio of stocks, you probably make money in two ways: when stocks rise, and when companies issue dividends.
But did you know that you can proactively generate income on your terms? You don’t have to rely solely on the company issuing dividends to earn income from your shareholding.
The covered call strategy is among the most powerful options trading strategies because it lets you sell options against your stock position.
When you sell calls against your stock, you receive money into your brokerage account.
It’s not free money though. It comes with an obligation, which is to sell your stock if it rises above a certain price.
For example, in the options chain below a shareholder who decides to sell a strike 126 call option would receive $1.86 per share or $186 per contract.
Generally, one contract corresponds to 100 shares so if you owned 1,000 shares you could pocket $1,860 (less commissions costs and fees) by agreeing to sell 10 call contracts at strike 126 for a bid price of $1.86.
What’s the catch? If the stock goes above $126 by expiration, you have to sell it at $126 per share.
You still get to keep your $1,860 – nobody can take that away from you if you hold the call option through expiration, at which point it will be assigned and your stock sold.
So if you don’t think the stock will rise above $126 by the option’s expiration date, then selling calls against your shareholding makes economic sense.
What makes options trading attractive compared to dividend paying stocks is you get to control when you generate income. You don’t have to wait for a quarterly dividend payment, you can sell call options weekly.
Option Trading Tips #2: Make Money Trading Weekly Options
How nice would it be to click a few buttons and money gets deposited into your account when you want it?
Now you know covered calls allow you to do that but how often can you do it?
For a few decades after options were introduced you were limited to generating cash flow from selling call options no faster than monthly.
But greater demand from options traders has resulted in greater choices, and these days you can trade options as frequently as weekly if you wish.
So, if you own shares in a company like Facebook or Twitter and want to pocket some additional income this week, you can.
The amount you can make on any given week tends not to be large when compared to the share price of the company, but the value of trading weekly options is not only what you can pocket on any given week but more so the compounded sum total of the income you can earn from selling calls each and every week.
>> Caution: When trading weekly options, beware of upcoming news announcements for the company. If a company is due to report quarterly earnings, volatility may be higher than normal causing options prices to be temporarily higher than usual. If traders react negatively to earnings and the share price falls, the premiums you receive from selling calls may not offset the losses in share price.
Option Trading Tips #3: Pick A Good Options Trading Platform
When you trade options to earn extra money, you will want to use an options trading platform that has a good understanding of options trading strategies to make sure your order execution is seamless and any hiccups or queries are resolved quickly.
Good options trading platforms offer fast and accurate order execution, knowledgeable staff who understand how to guide you when executing orders, competitive commissions and fees, tools and screeners to help you select trades, and mobile access when you are on the go.
The leading options trading platform for many years has been thinkorswim and these days it is rivaled closely by TastyWorks.
Both platforms were built by similar teams so you can expect a top notch experience from each of them.
Emotions play a big part in trading the stock market. It is difficult to remain rational when everyone else seems to be panicking and selling or fearlessly buying.
When you own a portfolio of stocks, it can be easier to panic and sell at the wrong time than when your risk is limited.
After all, when you own a stock, the most you can lose is the entire amount you paid for it if the stock were to fall all the way to zero.
In practice, the likelihood of that happening is really low. It is rare for companies to go bankrupt and share prices to get entirely wiped out.
But tell that to your inner self when fear takes over and, if you are like most people, you will find it is not so easy to stay calm.
So how do you hold on to the shares of good companies when fear is gripping the markets and still keep your risk contained to a fixed amount?
The answer comes in the form of the married put options trading strategy, which involves buying put options against shares you own.
MARRIED PUTS → STOCK MARKET INSURANCE
Married puts are about as close as you can get in the stock market to buying insurance.
Just like you might pay an insurance premium monthly to protect your car, home or even your health, so too can you pay a premium to buy protection on stocks you own in the form of put options.
The difference is that you cannot buy insurance on your car after a crash, but you can buy insurance on your stock even after it has fallen lower.
If you think a stock will continue declining you can buy protection to limit risk and contain further losses.
For example, assume the options chain below displayed put option prices.
If you were concerned the share price would decline, you could buy the strike 124 option to limit your risk if the stock falls below $124 per share.
The insurance is not free and will cost you $2.80 per share in this case. But much better to pay $2.80 than lose a lot more in the event the stock fell a good bit lower or worse if there were a stock market crash.
Above all, the married put offers peace of mind to help you make rational decisions.
The time may come where you want to sell your stock for fundamental reasons. But if nothing fundamentally has changed with the company yet market sentiment is causing a selloff, then married puts can be an ally to save your portfolio from short term dips that would otherwise occur.
Volatility often breeds fear among most passive investors who have retirement accounts, such as Roth IRAs and 401(k)s, tied up in index funds.
Generally spikes in volatility accompany stock market declines so the fear is not without some merit.
But with options, you can take advantage of, rather than suffer from, volatility.
The options strategy that can make money when volatility spikes is called the straddle and involves buying call and put options.
When you buy call options you are betting on the underlying stock or index going higher. And when you buy put options you are placing a bet that the underlying stock will fall.
So when you buy calls and puts, you don’t necessarily care whether the stock goes up or down, as long as it goes up or down by a large amount.
The reason the stock needs to move a lot is the share price must generally move by a greater amount than the cost of both options in order to make money. If it hasn’t by expiration, the straddle will be under water.
So, if you think a stock could move a lot before an expiration date, the straddle can make money from the volatility in share price if it occurs.
But keep in mind the straddle is generally a speculative options trading strategy. Where the covered call strategy can be applied as part of a core investment approach, the straddle is more akin to a gamble that may payoff big but equally may fall flat.
Tip #6: Simulate Stock Ownership Buying LEAPS Options
Stocks don’t always perform the way you predict they will. Instead of directly investing in a company, you can purchase LEAPS options that give you an opportunity to earn money when a share prices increase.
LEAPS, which stands for “long-term equity anticipation security,” options are significantly cheaper than the cost of buying stocks. In fact, you get to decide what price you want to purchase stocks. For example, if a stock trades at $50 today, you could use LEAPS options to purchase the stock when it falls to $30.
Typically, you want to purchase LEAPS options that are about 20% lower than the stock’s current trading price. When the stock’s price recovers, you can sell them to make money.
Keep in mind, though, that you must pay a premium for LEAPS options. You can expect to spend about $8 per share.
If the stock’s value recovers to $50, you can share your share to earn $20 minus your $8 premium. You end up with a profit of $12 per share.
As with all investments, LEAPS options come with risk. If the share prices fall, then you won’t make any money from your purchase. You could even lose money, especially since you still have to pay the premium.
Option Tips #7: Hedge Event Risk
Hedging acts like an insurance policy against falling index values. A hedge event risk doesn’t prevent you from losing money, but it does limit the amount of money that you can lose.
When major economic events are announced, indexes can respond by increasing or decreasing in value. If the report offers good news, then your portfolio’s value could rally and earn you money. Bad news, however, could wipe out your portfolio.
Hedge event risk prevents you from losing an excessive amount of money by limiting the decline that your portfolio can experience. When you buy index puts, you earn the right to sell assets when they reach a certain price.
For example, you could use index puts to sell assets that fall below 10% of their current value. If the market plunges, you will lose at most 10% (plus the cost of the puts).
What Options Tips Have Paid Off For You? Share Your Options Trading Stories Below, We Would Love To Hear From You.
Figuring out how much should be in your 401(k) could quickly cause you to start scratching your head. Factoring in life expectancy, inflation, spending, income and earnings is no mean feat.
But it can be simplified quite easily when you step back and look at the big picture plan you have for retirement. The goal of retirement for most people is to maintain at least the same standard of living enjoyed during their working careers.
So, if you earn $50,000 as an employee, you will want to estimate how many years you expect to enjoy retirement and multiply it by $50,000.
To keep the math simple for now, you could estimate that a 30 year retirement period would require $1,500,000 in savings ($50,000 x 30 years).
This easy calculation allows us to put a stake in the ground, but alas, it’s not quite that simple. We will need to factor in a few other items to get a more accurate projection of how much should be in your 401(k).
How Much Should Be In My
401(k) After Factoring In Inflation?
The straightforward analysis above ignores the impact of inflation, which is significant. But it does at least allow you to estimate the very minimum amount you will need excluding increases in the costs of goods and rising prices due to inflation.
Inflation is defined as the general increases in prices and loss in purchasing power as time goes by.
Most people think of inflation as prices rising, but there is more to inflation than meets the eye, literally!
How to Spot Inflation When Prices Don’t Rise
When you go to the store and buy a pack of chips these days, you may reminisce fondly on how much cheaper it was when you were a few decades younger.
But inflation has a more sinister way of creeping into your life.
For example, a sneaky trick cereal manufacturers learned long ago is to charge you the same amount this year as last year for a box of cereal, so it seems like the price did not rise.
The trick is that they sometimes reduce the amount of food inside the box.
In essence, you are paying more this year for the same amount you bought last year – it’s just not so obvious because you don’t see it affect your wallet right away.
The number seems so small that it could almost be ignored – until you realize that the compounded effect of this seemingly small annual increase is for prices to double every 20 years!
If you are 45 years old and plan to retire at age 65, then inflation will eat up half your purchasing power over that time frame. That means if you require $50,000 to live today, you will need $100,000 in 20 years to live the same lifestyle.
So, in our example, a 30 year retirement requires not just $1,500,000 but $3,000,000 to live a similar lifestyle as today – yikes!
But can you save that much when restricted by 401(k) contribution limits?
How Much Should Be In My
401(k) With Contribution Limits?
The most you are permitted to contribute to a 401(k) each year when under the age of 50 is $19,000 and $25,000 when aged 50 or older.
If you are 45 years of age, and max out savings for the next 20 years, the total principal contribution you could make is $470,000 (5 years * $19,000 + 15 years * $25,000).
Generally, the limit increases regularly so if you max out contributions, the total may end up being closer to $500,000 or more.
But both of these numbers are a long way from $3,000,000. So what can you do?
How To Increase Your 401k:
Max Out 401(k) Employer Matching
If you are working for an employer who matches your 401(k) contributions already, it is financially wise take full advantage of this benefit.
At the low-end, the 45 year old employee in the example above can save $470,000 if they max out 401(k) contributions, and perhaps they can contribute closer to $500,000 or more if limits continue to rise.
When your employer matches your 401(k) contributions, you basically get ‘free’ money.
Every dollar you contribute, your employer contributes one dollar also. Some employers will match a lower amount, say 50% of each dollar you contribute. Whatever the % contribution match, it’s money you otherwise wouldn’t have in your pocket.
By 65, the employee who takes advantage of a 1:1 matching employee 401(k) contribution program has an extra $450,000 → $500,000+ in their nest-egg!
But that’s not where it ends, it gets better…
How Much Should Be In My
401(k) If I Earn 7% Annually?
The amount you have at retirement is not just the principal you invest but also includes the earnings on investments.
The average annual return of the stock market from 1950 to 2009 when factoring in inflation and dividends was 7.0%.
Now here’s where the power of compounding comes to your rescue.
In year 1, if you max out your contributions of $19,000, your principal will turn into $73,524 after 20 years growing at an average annual rate of 7%.
The key is to start investing earlier. The difference between 19 years of growth and 20 years of growth is almost $5,000!
Every year you delay investing, you lose out on the power of compounding working in your favor.
It turns out that investing $19,000 each year for the next 20 years and earning 7% per year on average results in a nest-egg of almost $1,000,000!
With employer matching, that’s closer to $2 million!
And those amounts are even higher for the employee over age 50 who gets to contribute $25,000 annually.
Management Fees and
Fund Fees Low
What is even more interesting is how your 401(k) grows with and without fees.
If you invest your money in actively managed mutual funds that have high expense ratios, your portfolio may end up hundreds of thousands of dollars lower than if you avoid high fees.
Let’s imagine you pay a financial advisor 1.25% each year and pay 0.75% in expense ratios to your mutual fund managers on average, for a total fee cost annually of 2%.
It turns out that 30 years later, you end up with $550,338 when you start with $100,000 compared to your non-fee paying neighbor, who ends up with $1,006,266.
Annual Gain (8%)
By paying seemingly small fees of just 2% each year, the power of compounding hurts your retirement nest-egg very significantly; you end up with just over half what you would have if you had paid no fees.
Most 401(k) plans are quite restrictive and require you to invest in only a certain limited range of mutual funds.
But when you move on to another employer, you have flexibility to rollover your 401(k) into an IRA, and invest your retirement portfolio in a much broader range of lower fee exchange-traded funds, or ETFs.
The Amount You Need Is Lower if You Receive Social Security
About 62 million people in the United States receive benefits from the Social Security Administration SSA). According to SSA, 80% of those people are retired workers, dependents, and aged widows.
If you qualify for SSA benefits, then you don’t need to invest as much in your 401(k) to fund your retirement. Instead, you can use the benefits to help you maintain your lifestyle during retirement.
On average, retirees got $1,413 per month in 2018. The amount of money that people get from Social Security varies significantly. The more money you put into the system while you worked, the more benefits you will get after you retire.
It’s unlikely that you can count on Social Security to pay for everything during retirement. Still, the more money you get from SSA, the less money you need to invest in your 401(k). Knowing how much Social Security you can expect will help you decide how much money you need to put into your 401(k) account now.
Inheritance Coming? You’re in Luck
If you’re fortunate enough to receive an inheritance, then you don’t need to invest as much money in your 401(k). Instead, you can use your inheritance during retirement.
Keep in mind, however, that you might not inherit as much money as you think. Even if your parents have plenty of money, they may need to spend a lot of it on medical services as they get older.
On average, American retirees say that they expect to leave $177,000 to their families. That’s a fair amount of money, but it might not last long when you don’t have any other sources of income. Most people still need to contribute to their 401(k) accounts even when they plan to get inheritance money.
You also have to consider the possibility that you won’t get the inheritance that you expect. Don’t assume that your parents or other relatives will leave you everything they own. Talk them to now to make specific plans.
Otherwise, you might discover that they left a significant portion of their money to charities. If that happens, you might not have enough money to retire.
How Many Years Will I Be Retired?
Without getting too morbid, you should make an approximate calculation for how many years you will live after retiring to make sure your savings cover your financial needs.
In the example above, we used 30 years as a benchmark. But all sorts of factors play a role in life expectancy from health to environment to genetics. You will be able to make a more informed guess based on your own personal circumstances.
More generally, the average life expectancy in the US is 76 years for men and 81 years for women, with an average of 78 years.
That means instead of covering 30 years of retirement from the age of 65, our avatar retiree would need to cover approximately 11 years if male and 16 years if female.
This means that the 45 year old maxing out their 401(k) contributions and taking advantage of employer matching while growing their nest-egg at approximately 7% on average annually in an environment with approximately 3% annual inflation could just about cover their retirement needs if they want to maintain a similar lifestyle as when earning $50,000 annually in employment earnings.
If you are starting younger you can afford to save a lot less to end up with a similar sized nest-egg due to the power of compounding.
If you start saving at 45 and expect to live longer than average, you will need to save more than the $1,500,000 calculated above.
If you earn half the amount calculated, say $25,000, or double the amount, say $100,000, and plan to live a similar lifestyle upon retiring, you will need to halve or double the amounts calculated respectively.
Should you make your own investing decisions or trust a computer to invest on your behalf? In a nutshell, that’s your choice when choosing Robinhood vs Personal Capital.
Personal Capital is an online robo-advisor while Robinhood is a more traditional stock brokerage.
At Personal Capital, your portfolio is managed and created by a digital algorithm. So, if you want to put your money to work but do not have the knowledge, time or interest to learn the ins and outs of investing, it may be the answer for you.
Robinhood, on the other hand, is best suited to investors who want to make their own investment decisions, and rewards them with zero commissions to enter and exit trades.
But which service makes the most sense in terms of fees, minimums, account types and customer support? We’ve done the research to help you decide in this Personal Capital Vs Robinhood review.
Robinhood vs. Personal Capital: Quick View
Robinhood is a free platform that offers you a limited selection of exchange-traded funds (ETFs), cryptocurrencies, stocks and options.
Among its lineup are more than 2,000 no-commission ETFs and American Depository Receipts for about 250 companies around the world.
Robinhood provides you with some research and data free of charge, support via email during business hours, and a regular newsletter, called Snacks. It does not require a minimum balance to get started.
Robinhood vs Personal Capital
The minimum deposit amount needed to open and maintain your Personal Capital managed account is $100,000.
At this level, you get all the basic tools, features and services, including access to a pool of human investment advisors.
Personal Capital Perks
Personal Capital assigns more perks as your account balance goes up. The more you invest over the minimum threshold, the more you get from Personal Capital.
For example, with a minimum of $200,000, you get two specific advisors who are dedicated to overseeing your account, and so the level of personalization rises accordingly.
Another perk of putting more into your Personal Capital account is a lower management fee.
For instance, if you invest between $3 million and $5 million, you pay just 0.69% per year rather than the base rate of 0.89%.
Robinhood offers you a basic account with no investment minimum.
You can access its tools and articles without funding your account, but if you wish to invest, of course, you have to deposit some capital.
Robinhood also offers its Gold margin account, which requires a $2,000 minimum deposit.
It includes the benefits of commission-free trading, but you can also borrow up to the amount of your accessible funds. This means that you can take advantage of leverage to possibly “goose” your returns, but keep in mind leverage can also amplify losses.
You pay your loan back with a monthly payment. The fixed payment includes interest that is determined by the amount you borrowed.
For example, if you have $75,000 in available funds in your Robinhood Gold Margin account, you can borrow up to $75,000 in investment capital, and your interest rate at this level will be around 5%.
Personal Capital supports retirement accounts, IRAs and trusts. It offers professional guidance for your existing 401(k) and/or 529 accounts but does not directly manage those accounts.
At Robinhood, you can opt for the instant investment account or the Gold margin account detailed above. You have a cash-only account option too.
As a downgrade from the standard instant account, it does not include the same instant settlements or deposits.
Minimizing the tax you owe is an important part of your financial strategy, and if you are new to investing, it is probably one of the gray areas that make investments daunting.
If you are only dabbling, you may not consider tax on your investment income to be that important. However, as your portfolio begins to grow, you will recognize the need for a good tax-savings strategy.
Your Personal Capital account comes with a tax strategy that includes tax-loss harvesting, primarily for portfolios comprising of both ETFs and individual securities.
This strategy optimizes your tax savings on investment income by:
Avoiding tax-inefficient mutual funds
Strategic fund allocation into taxable and tax-free accounts
Tax-loss harvesting to offset gains and reduce the associated taxes
Robinhood does not offer tax-loss harvesting. Neither does it offer retirement accounts or trusts with tax-deferred or tax-free features.
It does provide you with an investment income form to file with your IRS return.
If you want to build your investments over time, you may want to consider an online investment platform that includes tax-reduction strategies.
Digital investment advice is based on Nobel prize winning research so that your portfolio is diversified and remains balanced.
However, human advisors continue to bring a level of flexibility, customization and expertise into investing that appeals to many investors.
While newbies may only be looking for the basics that a robo-advisor can easily deliver, you may be interested in extra guidance with a personal touch.
If so, you can get that at Personal Capital where it’s possible to consult with an advisor by email or speak with your own duo of dedicated financial gurus (if your account balance is sufficiently high).
Dedicated advisors are aware of your financial goals and the makeup of your portfolio, so they are better equipped to help you optimize returns based on your risk profile.
Robinhood, in contrast, is a brokerage platform tailored to self-directed investors who know how they want to allocate money.
It is ideal for getting a start on investing, but if you want human advice, you will have to get it elsewhere.
Personal Capital offers full-time customer service support via email or mobile device plus an FAQ page.
It also provides answers to your financial questions by email from either a team of advisors or your two dedicated advisors by phone, email or chat.
Robinhood’s customer support is strictly by email.
It does not provide you with a phone number, but it does have an online support center where you can search for your problem and the suggested solution. The help center is intuitive and logically organized.
Personal Capital Mobile App Vs Robinhood
The Robinhood mobile app for iOS devices works on the Apple Watch and the iPhone.
You can also download the Robinhood app for Android devices.
Personal Capital offers account holders a mobile app for either Apple or Android phones and/or tablets plus the Apple Watch.
Both the Robinhood and Personal Capital apps are very similar to their web-based versions.
You can use them to check all your accounts and financial activities, track your spending and follow the performance of your portfolio.
Which Is Best for You:
Robinhood or Personal Capital?
The difficulty in declaring a winner between these two online investment platforms lies in their differences.
On the one hand, Robinhood is considerably less expensive and far more financially accessible, but on the other hand, Personal Capital provides so much more as far as tools, guidance and investor resources.
As an entree into investing, Robinhood wins. As a management platform for hands-off investors, Personal Capital takes first place.
If you have the means to meet the investment minimum, Personal Capital is ideal for investors who want to put their retirements on auto-pilot.
It offers a number of upgrades as your portfolio prospers and your investments grow as well as automatic tax-loss harvesting that could save you money when April 15th rolls around. Plus, you get human financial advice to customize and optimize your computer-generated portfolio.
If money is tight, you really cannot go wrong with Robinhood. No fees and low risk are bound to be attractive if you are a fledgling investor.
Exchange-Traded Funds (ETFs) offer an interesting alternative to mutual funds. Both allow you to buy shares in a pool of stocks, so you get automatic diversification without the pressure of selecting individual securities.
While most mutual funds are actively managed, there are some that passively track specific indexes. On the other hand, most ETFs passively track specific indexes. Very few are actively managed.
The biggest difference between the ETFS and mutual funds is how shares are traded.
Mutual fund shares are bought and sold once a day, after the market closes. ETFs can be traded throughout the day, so investors who want flexibility in timing purchases and sales are better off with this type of product.
Are ETFs Better Than Mutual Funds?
Actively managed mutual funds and actively managed ETFs have higher fees than their passively managed counterparts.
Morningstar notes that the average for actively managed mutual funds is 1.09 percent, the average for actively managed ETFs is 0.76 percent, the average for passively managed mutual funds is 0.79 percent, and the average for passively managed ETFs is 0.57 percent.
If you have determined that ETFs are right for you, the big question is which one to choose. There is a long list of options from a wide variety of reputable financial service providers, and even market experts struggle with this decision.
LendingClub is a U.S. online lender that is best known for peer-to-peer lending. It was the first marketplace to register its products with the SEC as securities. However, it does have some traditional offerings, including auto loan refinancing.
LendingClub will refinance a wide range of existing auto loans, and it has helped many borrowers lower their monthly car payments and/or lessen their overall obligations.
Online offers are instant and, after accepting an offer, it usually only takes a few days and no more than a few weeks to complete the refinance.
But is it right for you? In this LendingClub auto loans review, you’ll find out everything you need to know.
Auto refinancing through LendingClub was introduced in 2016. Although relatively new, it has had an immediate impact in the auto loan world due to offering many borrowers refinancing options that are 1 → 3% lower than rates on their original vehicle loans.
When it comes to car loans, LendingClub is very much focused on refinancing. It does not explicitly offer lending to cover the cost of a new vehicle.
While it is possible to get that kind of funding through LendingClub via a personal loan, that solution would involve peer-to-peer financing.
Unlike most of the other financial products available through LendingClub, auto refinancing is not peer-to-peer. Instead, all refinanced auto loans are made by WebBank, a member of the FDIC.
When you apply for LendingClub auto refinancing, LendingClub will offer you up to two different refinancing options.
Whether you get the second offer depends on credit quality and other factors, such as the value of the particular car being refinanced.
Refinancing Option #1
The first proposal will be a term-match offer, which means that the length of the new loan will match the existing loan.
The offer will, however, have a reduced APR, which is what will enable you to pay less for your vehicle overall or have a lower car payment each month.
Refinancing Option #2
The second proposal, if applicable, will be a term-extension offer. This lets you extend the period of the current loan by up to 12 months.
This means that you can have a lower car payment each month as well as pay less for your vehicle overall.
Soft Pull vs Hard Pull Timeline
LendingClub makes these initial offers to you via a soft credit pull. A soft pull or soft inquiry does not affect your credit score.
Only if you accept an offer does LendingClub require a hard pull in order to finalize the loan. A hard pull or hard inquiry does, in fact, affect your credit score.
The initial offers are instant and available online, and they only require minimal and general personal information.
Accepting an offer requires a more substantial loan application, but the process is still rather simple and fast.
There are no origination fees. Plus, no prepayment penalties apply, however there may be title and state fees depending on where the vehicle is registered.
LendingClub Car Loan Rates
3.99 → 24.99%
Minimum Credit Score
The interest rate is fixed, however advertised interest rates are subject to change.
Although LendingClub accepts a credit score as low as 510, it does expand its restrictions for borrowers with credit scores of 630 and under.
These expanded restrictions are not published, and they are determined on a case-by-case basis.
The best auto refinancing rates at LendingClub are reserved for credit scores of 720 and above.
LendingClub has certain restrictions that may limit the auto refinancing options offered to you.
These limits are based on information about the individual borrower, including where that person lives, but they also account for the terms of the existing loan and the particular vehicle being financed.
If you are considering refinancing your auto loan through LendingClub, then your first step should be to ensure that you, your vehicle, and your current loan are within the acceptable parameters:
Eligible loan terms
Available in your state
Maximum vehicle age: 10 years
Maximum vehicle mileage: 120,000 miles
As for loan terms, your current loan must have been open for at least a month, which commonly means that you will have made at least one payment toward it.
Additionally, the current loan must have at least 24 months remaining, or the refinancing is generally not deemed worthwhile to the lender.
The loan amount must also be for at least $5,000 but not more than $55,000.
In order for auto refinancing to be available to you, the financed vehicle must be eligible.
Eligible vehicles are less than 10 years old, a benchmark based on the model year rather than other factors, such as the initial purchase date.
The vehicle must also have less than 120,000 miles on it and generally be deemed to be in reasonable condition at the time of the refinancing.
Note that certain vehicles are ineligible regardless of age and mileage. These include:
There are also certain makes and models of passenger vehicles that are ineligible.
These include Daewoo, Dodge Neon, Hummer, Isuzu, Oldsmobile, Pontiac, Saturn, Suzuki and Volkswagen diesel vehicles.
Which States Are LendingClub Auto Loans Available?
Auto refinance products from LendingClub are only currently available in 35 states.
The vehicle must have valid registration in an eligible state in order for a loan to be refinanced.
Prior registration in other ineligible states does not matter. Therefore, if you originally financed an auto loan in Colorado, an ineligible state, but have now moved to California or another eligible state and registered the vehicle there, you could refinance.
States that are eligible for LendingClub auto refinancing include: AL, AZ, AR, CA, DE, FL, GA, ID, IL, IN, KS, KY, LA, MD, MI, MN, MO, MT, NE, NJ, NM, NY, NC, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, WA and WI.
This lender does cater to lower credit scores of 500+. It also refinances vehicles with up to 125,000 miles.
However, it stipulates a hard pull as well as a $1,100 monthly income. LendingClub, on the other hand, requires no income verification at all.
Clearlane is similar to LendingClub, but it refinances auto loans with amounts as high as $100,000.
It requires borrowers to have higher credit scores of 600+ and an income of at least $1,800 a month.
It is a strong option for borrowers with fair credit but does not compare as favorably to LendingClub for borrowers with strong credit.
Borrowers who live in a state where LendingClub is not available may want to consider Clearlane since it is available in every state but Nevada.
LendingClub Auto Refinancing
Arguably, it has never been easier to refinance an auto loan, and companies like LendingClub are the reason why.
Accessibility is incredible no matter where you live, and competition among lenders is fierce. That competition makes it quite easy to get the best possible annual percentage rate for your credit score.
Is LendingClub the best online auto refinancing option available? The answer to that question for many people will certainly be yes.
The exceptions will generally be consumers at the edges. Borrowers with superb credit quality may not find the best deal available to them at LendingClub.
Borrowers with fair or poor credit may find acceptance and better deals through lenders who specialize in them.
For everyone else, LendingClub is a simple and an effective way to lower your monthly car payment, reduce the overall cost of your car and perhaps even achieve both at the same time.
Enjoy Flowers is a family-owned company that offers online flower delivery services.
It caters primarily to weddings, and lets you customize flower arrangements for ceremonies and receptions. If you need a helping hand, wedding experts are available to answer questions and to provide professional guidance.
You can choose from several different products, including DIY arrangements if you prefer. Another option is to gift a subscription that comes with a personalized card.
In this Enjoy Flowers review, we share what type of flowers are available, how much they cost, and when they will arrive.
Enjoy Flowers is, at its core, a subscription box flower service.
It is similar to numerous other box subscription services that have cropped up online for which you pay a monthly fee and receive a box of various products with a particular theme, such as types of cosmetics or a style of clothing. In this case, the product is fresh-cut flowers.
All flowers are shipped within four days of being cut and are guaranteed for seven days of freshness upon arrival. You even get flower food to keep fresher blooms.
The varieties you receive may depend on the season, but you do have some control. Collection options include:
A do-it-yourself version of farm fresh
You can prepay your subscription or have Enjoy Flowers bill you with each delivery, but no commitment is required.
If something crops up whereby you need to skip a particular delivery or cancel your subscription outright that’s no problem either.
The wedding options are different in that there is no subscription involved; it’s a one-time purchase. You simply choose the collection you like, set an amount you want to spend, and indicate a date.
In order to decide whether or not Enjoy Flowers is right for you, you need to consider the various pros and cons of this service.
Enjoy Flowers Pros
Enjoy Flowers Cons
✅ Convenience: It’s easy to order flowers and select a regular delivery, which is particularly helpful if you run an Airbnb, small office, or other business establishment.
❌ Automatic Renewal: Some customers will shy away from the ongoing charges for deliveries. However, the flipside is customers who want regular deliveries can place orders on auto-pilot.
✅ Product Quality: Each bouquet comes with a quality guarantee. And the selection of products is large.
❌ Lack of Precise Choice: Customers don’t have full control over flower selections as part of subscription box purchases. This can be viewed as a positive for those who simply want flowers to show up but don’t want the hassle of picking them monthly.
✅ Price: Compared to similar services, the price is fair.
❌ Limited Return Options: No or few return options exist if you don’t like the flower selection delivered to you.
✅ Free Shipping: No additional charge is applied to ship your bouquets of flowers.
✅ Coupon Codes: If you are not in a hurry to receive flowers, discount coupon codes are frequently made available.
Is Enjoy Flowers Right for You?
Whether Enjoy Flowers is right for you will depend largely on how you view the box subscription model in general.
This approach requires you to relinquish some degree of choice, and that may be problematic for some buyers.
Enjoy Flowers does not offer a returns option or a money-back guarantee if you are not satisfied with the flower selection, which is something many of its competitors provide.
However, it does offer a product warranty, which means that if the flowers arrive damaged or if they fail within the guaranteed seven-day period, the company will send a new bouquet at no cost to you.
Compared to its competition, Enjoy Flowers is a stellar option. It is a convenient service for the person who wants fresh flowers regularly.
The product quality is superb, and the shipping container ensures it. Plus, the prices are fair compared to the competition.
Shipping is included at no additional charge, and coupon codes are often available.
Note that both the biweekly and monthly plans automatically renew. Therefore, you have to remember to opt out or to cancel the subscription as needed.
It works similarly to the prepay option discussed in the pricing section. One significant difference is that the order will not automatically renew unless you specifically make that change.
The person receiving your gift will get three or more deliveries depending on your choices, and each will include a signature box, a hand-tied bouquet, a personalized card, flower food, and simple instructions.
Note that while Enjoy Flowers does offer some preconfigured gifting options, those are not your only choices. You can also customize an order, add it to your cart, and select the “this is a gift” option.
Deliveries are generally received on Thursday or Friday.
If you place your gift order by Sunday 10:00 P.M. ET, then your gift will be delivered on the following Thursday or Friday.
“The 4 most dangerous words in investing are: this time it’s different” Sir John Templeton
When markets rise, it’s tempting to think they will continue to soar forever.
You might hear stock market commentators claim that a so-called “goldilocks” period has arrived. But markets rise and fall, and cycle over time, so expect the swings and roundabouts, and be skeptical of any claims of perpetual growth.
Equally, it’s important to be wary of fear merchants who peddle gloom and doom.
Even after stock markets crash, they tend to bounce back over time as value investors step in to buy undervalued companies.
“The individual investor should act consistently as an investor and not as a speculator” Benjamin Graham
Think of a stock you own as an investment you will hold for the long-term as opposed to a vehicle to generate a quick buck from one day to the next.
This is especially true when you are investing savings in a retirement account, such as an IRA, over the long-term.
“In investing, what is comfortable is rarely what is profitable” Robert Arnott
If you went to the local department store and found an item on sale that you wanted to purchase, you would probably be pleased to find the price is lower and consider it a good deal.
But when a stock has sold off, it can be hard to think of it as being on sale because fear creeps in and the doubts weigh heavily, such as “what if the stock falls further?” – sometimes you need to be courageous and buy when stocks are on sale and other times you need to ring the register and sell when euphoria is in the market and fear among stock market traders seems to have evaporated.
“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful” Warren Buffett
Perhaps the most famous investing quote of all from Warren Buffett is to be fearful when others are greedy and be greedy when others are fearful.
This means when markets have been rising for a long time and appear as if they will never fall, yet people are rushing in to the stock market to buy more stocks, it’s time to be cautious.
And when stock markets have fallen, perhaps even crashed lower, and everyone else is panicking and selling, that is when great opportunities to buy appear.
“An investment in knowledge pays the best interest” Benjamin Franklin
Warren Buffett has a similar philosophy as Ben Franklin that you should invest in learning and acquiring wisdom. In the world of investing, it will enable you to conduct smarter due diligence, make more rational decisions, and allocate capital more intelligently.
“The stock market is filled with individuals who know the price of everything and the value of nothing” Phillip Fisher
The danger of looking at stock prices alone is that you don’t necessarily know what stocks are worth, so if stocks fall in price you won’t know if they are on sale or overvalued.
Learn how to value stocks and you won’t ever be left wondering whether a price fluctuation is something to be concerned about or something to dismiss.
“Know what you own, and know why you own it” Peter Lynch
It is easy to buy a stock but when its price falls it can be just as easy to panic and sell it if you don’t know the quality of the company you own and the reason you purchased it in the first place.
If the idea of performing due diligence on investments doesn’t sound appealing, consider a more hands-off investing method whereby a robo-advisor automatically invests your savings in a diversified way that matches your risk profile and financial goals.
“If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks” John Bogle
Investing in the stock market can feel like a rollercoaster ride with turbulent swings from time to time.
If the idea of big account swings is not appealing, consider a diversified portfolio that allocates a greater portion of your portfolio to fixed-income investments, such as government bonds, municipal bonds and corporate bonds.
“Value investing is at its core the marriage of a contrarian streak and a calculator” Seth Klarman
Seth Klarman is not as famous as Warren Buffett but when he reaches Buffett’s age he might be as wealthy.
The legendary investor highlights the importance of being both quantitative in knowing the value of a company and having the propensity, courage and willingness to go against the crowd in order to invest successfully over the long-term.
When markets are trading at elevated levels and your analysis reveals they are overvalued, sometimes you need to have the courage to sell. And when markets are low and the numbers suggest they are undervalued, sometimes you need to have the courage to buy.
“Risk comes from not knowing what you are doing” Warren Buffett
Speculation in the stock market can be deadly if you don’t know investing basics. Learn how to analyze companies, read quarterly statements, and understand financial statements. It’s important to keep learning so you can more intelligently invest.
“If investing is entertaining. If you’re having fun, you’re probably not making any money. Good investing is boring” George Soros
In a world where financial news networks are compensated from advertising dollars that increase with higher viewer figures, the temptation of the financial media is to make stock market investing entertaining to engage audiences.
But successful investing is often as boring as watching paint dry. Besides, the more you trade, the more commissions you pay and quickly you risk churning your account and making your broker rich instead of yourself.
Action bias is the danger of confusing action with progress. Trading more doesn’t necessarily mean making more money. Sometimes trading less results in making more money.
“All intelligent investing is value investing. You must value the business in order to value the stock” Charlie Munger
Warren Buffett’s business partner for most of his life has been Charlie Munger, who advocates that before deciding to pay for a stock you should know what the underlying company is worth.
You wouldn’t buy a home or a car without knowing what they are worth so why buy a stock based on the price alone; better to pay heed to the value of the underlying business.
“Buy not on optimism. Buy on arithmetic” Benjamin Graham
As markets and stocks rise in value, optimism increases that they will continue to soar. But pay close attention to what a stock is actually worth, calculate its value, and make a decision then on whether the price you pay reflects the value its worth.
“Investing is the intersection of economics and psychology” Seth Klarman
Financial institutions spend billions each year crunching through data analysis to assess company valuations but stock market investors sometimes act as a herd, and when they all run in one direction, quantitative measures are replaced by emotional decision-making. When the so-called smart money acts dumb, more opportunities appear for you to make money.
“Markets can remain irrational longer than you can remain solvent” John Maynard Keynes
This is one of the most famous investing quotes of all time from John Maynard Keynes in which he succinctly identifies what most investors have experienced: an incredulity when markets move further and longer than ever expected in one direction or another.
“Investing should be like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” Paul Samuelson
Investing successfully frequently means holding stocks for the long-term and there is little excitement in that, but that’s okay because when your Roth IRA or traditional IRA growth is compounding over the long-term, you’ll have a larger nest-egg at retirement.
“Rule No. 1: Never lose money. Rule No. 2. Never forget rule No 1” Warren Buffett
This tongue-in-cheek investing quote from Warren Buffett has some deep wisdom hidden under the surface.
If you understand the value of companies, you will know what the downside risk is to an investment. And if you minimize that risk, you can mitigate the chances of losing money, which should be your top priority.
“People don’t like the idea of thinking long-term. Many are desperately seeking short-term answers because they have money problems to be solved today” Robert Kiyosaki
If you could receive $85 now or $100 in a year, which would you choose?
If you think rationally about whether you could generate $15 of profit in a year for every $85 you receive, you would realize it’s not an easy task. Rationally, it’s smarter for most people to choose $100 in a year’s time.
But research shows that most people select the $85 today because they like the idea of pocketing the money today rather than waiting for more tomorrow, even if most people would be unable to successfully invest $85 and turn it into $100 in one year.
Focus on investing for the long-term and your wealth in the..
The fact is that over time, few professionals can consistently beat index returns, which makes index investing a compelling strategy. Plus, it’s simple, convenient, and worry-free.
Vanguard is a leader in low-cost equity funds, but that doesn’t mean all products are created equal.
With so many options, it can be a challenge to determine which fund best fits the goals of your portfolio and your preferred investment strategy. This is the breakdown you need to get a clear picture of two top contenders: the Vanguard 500 Index Fund Admiral Shares (VFIAX) and the Vanguard S&P 500 ETF (VOO).
VFIAX vs. VOO: The Basics
First things first. There are a few points that investors should clarify when considering and comparing any product.
Focus – VFIAX was a pioneer when it was launched on November 13, 2000. It was the first index fund in the industry that offered individuals an affordable opportunity to gain diversified exposure to the S&P 500 market.
From an industry perspective, VFIAX is quite diverse, as it covers a collection of businesses that represent approximately 75% of the value of the US stock market.
VOO launched on September 7, 2010, with a very similar focus – to offer individual investors affordable access to the S&P 500. However, there is an important difference between the two.
VFIAX is a mutual fund, while VOO is an exchange-traded fund (ETF). That means there are variations in how shares are traded and evaluated.
Mutual fund trades are executed after the market closes each day, while ETF trading goes on throughout the trading day.
Mutual fund share prices are determined by the net asset value (NAV) of all holdings in the fund, while ETF share prices are determined based on the volume of trades.
The cost of purchasing shares differs, which affects your overall expense. If you use an investment broker other than Vanguard, you will pay a fee each time you buy or sell ETF shares.
However, with mutual funds, you typically only pay a fee once – the first time you buy shares and when you sell. You generally do not pay fees when you add additional shares.
Expenses – When it comes to the expense ratio, there is an important distinction between VFIAX and VOO. While VFIAX comes in at 0.04%, VOO is just 0.03%.
Minimum Investment – VFIAX requires a minimum investment of $3,000, but there is no minimum for VOO. This can be critical for small investors who want to get into the market.
Net Holdings – Both funds have similar net holdings, with VFIAX at 459.65B and VOO at 459.65B (*at time of research).
Yield – These are quite similar, with VFIAX coming in at 1.96% and VOO at 1.97%.
Risk – Because both funds track the same index, both are exposed to similar levels of risk. Specifically, investors take on risk of volatility in the stock market.
Historically, the market has always recovered from drops, but there are ups and downs along the way.
Investors with a need to sell shares during a low point are at risk of losing principal.