Re: Free fallin'

On Jan 28, 3:11 pm, "Greendistantstar"
<pde63539removet...@xxxxxxxxxxxxxx> wrote:

I would really like to go from there, if possible.

Fine. My advice to you will only be general...specific advice is impossible
without all your financial data.

First, create a budget and stick to it. Most people don't do this one very simple
thing. I use MS Money, and it's as good if not better than most PC-based
budgeting tools.

Check - I've been on a budget since 2002. It has grown in complexity
*quite* a bit. It's all done on excel. I have some macros. They're not
complex but they're funky cool. But I disgress. It's generally
working. I have estimates out till 2010 and projections beyond that.
I'm never more than $50 us or so off at the end of the month and when
I sit down to figure it out I usually learn something about myself and
make a slight change to the future estimates.

Then apply surplus cash to any 'high interest and/or non-deductable debt' that
isn't invested in assets that are appreciating faster than your APR. Take into
account tax-effects.

I created several interlocking worksheets; at risk of boring you i'm
really quite proud of them so i'll describe some.. one such takes my
surplus cash and calculates what percentage I should pay to debts
versus investments based on the historical and projected returns. Then
it splits up everything accounting for my minimum payments where
appropriate. It tells me that at the rate I'm going I'll pay
everything off completely by the end of this year. Within 2 years I'll
be able to put down 10 or 15% on a 5 million dollar home (in NTD of
course) and pay it off within 4 or 5 years after that. I only mention
the mortgage because it's a debt I will be taking on. Then another
records all my precious metals transactions. It has columns for
everything. It automatically calculates the value in us dollars,
including amounts for commission.. gain and loss.. then it hooks into
another portfolio chart which automatically weights my investments and
tells me which ones are overweight in the grand scheme of things.

And to top it all off it charts the data for me too. How cool is that?

As for tax; my unique situation is that I currently do not pay tax.
That is to say, my business pays my tax for me. It's all legal and
aboveground. As for the tax on my capital gains, that is somewhat
relevant but not overly so, as I have a quadruple benefit; tax-
deferred retirement accounts in both Canada and the USA. Physical gold
is another matter but I'm well within my tax bracket; i.e. I don't
make enough to pay taxes even in Canada. Anything I make for quite
some time will be tax free. I've had this checked with an accountant
and with H&R Block. The only problem with my tax is my student loan
situation, because it's a government loan they wont pay me my refund
until the loan is paid off. Poor me ehh?

What's left over you can apply to any investments that meet your criteria. Your
criteria need to take into account whether you want income, capital growth or a
mix of the two.

That's generally how it works now - I don't have tons left, I pay
about 35% of my free cash to the debts and invest the rest - but it
pisses me off because I find it difficult to invest reasonable amounts
in the stock market each month because of commissions. I mean hell it
would be nicer to not have to pay a $29 commission but I don't have
that much in the account yet. Thats why I have an account at a no-fee
(well, 1% a year or so) mutual fund company, I can buy and sell a
market index without paying a commission. But again I disgress.

I certainly don't want income from my investments atm.

Unless you're earning OS income, denominate your debt in the same currency as
your assets, or you end up with currency risk. Most folk don't know enough about
this to do it.

Currency risk is a blessing and a curse for me. What I know I know
from experience. Back when I moved here the rate was around 27. Now
it's 31. The peak was 33. I think it's going back down now. 5-6 years
ago it was 22. By a fluke I had to sell some of the money I had
invested in stocks at 27-30 at the peak around 32 ro 33. So I made a
little. Ehh. And now I'm re-investing and the exchange rate is working
well for me. At any rate investing into the canadian dollar has been a
winning strategy versus the US dollar ( I also have a US dollar
investment account ). Just saying.

As for currency diversification thats kind of what I use gold and
silver for. I don't really trust cold hard cash.

If you want to play the stock market, you have to do a lot of research and be on
top of the market daily, at least. You need to learn how to read a balance sheet.
I'm a fundamentalist, not a chartist, so don't ask me to debate Elliot Wave
Theory. Charting (imho) is for soccer moms and those who think a day-course and
some online help is going to make them a fortune. Chumps is what they are. It
takes YEARS of diligence to properly read a balance sheet, which is why so many
find charting so much more enticing. Hell, I used to teach experienced corporate
lenders how to do this, and half of them were clueless...pity all the other mugs.

I must admit I like to "read charts". I think there is some value in
it especially because a lot of other people read charts too. The
question is what charts. While the basic chart of a company isn't so
interesting, learning how that company reacts compared to something
else (i.e. ratio charts) are much more interesting to me.

And although it is not a 100% reliable indication of what is going to
happen, so-called "channel trading" where a stock seems to trade in an
upward or downward sloping "range" is far too common a reality to
ignore...

Play the market 'in your head' for a few months...trade with imaginary money and
see how you go.

LOL - I remember doing this with my father way back when. When I
showed him that I was beating the market he said "thats nice" or
whatever but he just didnt get it. He did like the report however and
reccomended me for a job at his friend's engineering company editing
corporate reports and proposals. Hah.

Remember, there are teams of highly qualified and experienced
traders on bourses all over the world, and you are competing with them. You are
the buyer of their sales, they are the buyers of your sales, so you'd better know
more than they do or you are going to lose.

If you want more specific info, email me.

Well Peter I've been there and done that with respect to everything
you have said in this message. It's all sound advice. Beyond this no I
did not study economics in university. So I don't know what "more
specific" really means.

To be honest I just wanted to discuss some trends like the dow:oil
ratio or what not. I'll send you an e-mail but at the moment I don't
see the point of getting more specific. We've already gotten extremely
specific hehe :)

-
.

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