Warren Buffett’s 6 Fundamentals Of Investing

Warren Buffett Investing Advice

There’s a funny thing my dog does around the same time every night, when I grab her bowl to feed her dinner. She runs over to the spot where I’ll eventually set it down, and she’ll sit, tail wagging, watching my every move until I bring the bowl over with her food – which gets eagerly and immediately devoured. I tell this story not because I think you’d be interested in my dog’s eating habits, but because this is exactly how the whole of the investing community acts around this time each year as we await the release of Warren Buffett’s annual letter to Berkshire Hathaway shareholders.  The letter is more than your typical shareholders letter, it’s usually pretty entertaining and is always chock full of interesting insights and investing advice from Warren Buffett. Thankfully, this year is no different. Not only did Buffett outline his fundamentals for investing, he … Continue reading

What Makes A Good 401k Plan

is saving more or earning more money better

For most people the 401(k) plan is their main, and sometimes only source of retirement savings. We know that if we can’t max out our contributions we should at least be contributing enough to receive the full match from our employer, but we really don’t know what constitutes a “good” 401(k) plan. Every year the major financial news sites publish the same articles about this years “best” 401(k) plans, and every year I take major issue with the results in those articles. Too often the studies that these articles reference weigh criteria such as the average account balance per participant too heavily. The same goes for judging the generosity of an employer by looking at the average amount they contributed to each employee in the plan. Of course you’re going to tell me Goldman Sachs has a better 401(k) plan than Wal-Mart if that’s how you’re judging it! Metrics like … Continue reading

How To Invest Without A Lot Of Money

investing without a lot of money, how to invest $100, where to invest $1000, investing cheap

“It takes money to make money.” You’ve no doubt heard that phrase thrown around before. It’s a phrase that unfortunately stops people from investing before they even start. The idea that you need to have a lot of money before you’re able to invest (and make more) is all too common, and it’s simply not true.  Years ago when you needed a financial advisor at a big brokerage firm, and you had to pay them insane commissions in order to trade this may have been true. But now, the internet is your savior! You don’t need a financial advisor at all! Thanks to the internet, it doesn’t matter if you have $100, $1000, or $10,000. You can invest and get your money working for you no matter who you are. A couple of assumptions before we continue with this post…I’m assuming that A) you don’t have a mountain of debt hanging over … Continue reading

2013 Maximum Contribution Increasing For 401(k) and IRA

401k-limits

Savers everywhere, rejoice! The IRS has given us a gift for 2013. The maximum contribution limits for the 401(k) and Roth IRA are increasing! This means we’ll all be able to stash away just a little bit more tax advantaged cash in the upcoming year. Here’s what’s changing: 2013 401(k) Maximum Contribution: For 2013 the maximum contribution you can make to your 401(k) account will be $17,500. This is up just a touch from the $17,000 limit in 2012, and up a full grand from the $16,500 limit that we were stuck with between 2009-2011. Remember, your employer’s matching contributions to your 401(k) don’t count against the $17,500 limit. Only the contributions out of your paycheck count against the limit. It also doesn’t matter if you contribute to a standard 401(k), a Roth 401(k) or both. It’s $17,500 no matter how you want to split it. To find what percentage … Continue reading

The Retirement Plan For The Lazy Man

lazy-mans-portfolio

It was recently brought to my attention that not everyone likes to spend countless hours pouring over their 401(k)’s and IRA’s looking for the absolute best investments. Shocking! I know! I learned of this strange type of person just last week when I received an email from a friend asking for some advice on his 401(k). He sent me a list of the funds his 401(k) plan offered and asked me what he should invest in, with the caveat that he didn’t want to have to pay attention to it. He has zero interest in doing anything but contributing money out of his paycheck and getting on with his life. At first I was taken aback. Someone who doesn’t want to spend a lot of time managing their 401(k)?! I guess I had read about people like this before, but like a supermodel or rock star, never thought I’d actually … Continue reading

Investing Basics: Covered Calls

In a recent post I made mention of covered calls without really explaining much about them. I got a few emails asking if I could elaborate, so here we go… What Is A Covered Call? A covered call is an options strategy that can be used by investors in order to generate more income on shares of stock they own or to cut down on the risk they’d be exposed to if the share price fell. Simply put a covered call is a contract between two investors for the right (not the obligation) to buy 100 shares of stock at an agreed upon price any time before the expiration date of the contract. Example:  You own 100 shares of stock ABC that you bought for $20/share. You then decide to write (sell) a call option on the stock at a strike price of $25 and an expiration date of six months. The … Continue reading