I have to post this because it is the closest thing we have to a......soap opera.....in the investing world. I am fascinated with watching how this all ends up over the next few years. Stock rally not enough to save ARK from record 7-month losing streak https://finance.yahoo.com/news/stock-rally-not-enough-save-140513203.html (BOLD is my opinion OR what I consider important content) "NEW YORK (Reuters) - A sharp rally in the broad U.S. stock market over the last week in May was not enough to save star stock picker Cathie Wood's ARK Innovation Fund from notching its seventh straight month of losses, extending the longest losing streak in its history. The ARK Innovation fund, which garnered billions of dollars from retail investors in 2020 as it soared during the COVID-19 pandemic rally, fell 6.6% in May. That decline came on the heels of a nearly 29% tumble in April, the worst in the fund's history. The fund's 9.6% gain in October 2021 was its most recent positive monthly performance. The fund is down nearly 53% for the year to date. It gained 1% in morning trading on Wednesday. ARK's portfolio of high-growth companies has been hit hard by the hawkish path of interest rate hikes set out by the Federal Reserve, which have raised the cost of capital and left investors focused more on profits than revenue growth. Zoom Video Communications Inc, ARK's top holding, is down nearly 42% for the year to date, while Tesla Inc, its second-largest position, is down 28%. The benchmark S&P 500 is down 13.3% over the same time. ARK did not respond to requests for comment. Despite those losses, investors have largely stuck with the fund, sending positive net inflows for six of the past seven weeks. Investors pulled a net $69.7 million from the fund the week that ended May 25, its first weekly loss since April 6. The dedication on the part of investors may be a sign that they are willing to stomach losses from ARK Innovation because they see it as a way to diversify their overall portfolios, said Todd Rosenbluth, head of research at ETF Trends. "Many investors that own ARK ETFs combine them with broad market index-based products, dedicating a slice of the equity exposure to the higher risk, but higher potentially rewarding thematic investment approach," Rosenbluth said. "As such they are willing to be more patient that the strategy can and will bounce back."" MY COMMENT It will be at least a couple of years before we know how this all played out. In the meantime......it is very entertaining to watch.
Speaking of soap operas.....TV shows. How about investing based on movie dialog. (Emmett?) Easy Money is Money Easily Lost https://awealthofcommonsense.com/2022/05/easy-money-is-money-easily-lost/ (BOLD is my opinion OR what I consider important content) "John Candy is one of my favorite actors of all-time. I love Uncle Buck. I watch Planes, Trains and Automobiles every year on Thanksgiving. I’ve watched Spaceballs, Stripes, Splash, Brewster’s Millions and Summer Rental multiple times. Then you have his cameos in Home Alone and National Lampoon’s Vacation. Plus, The Great Outdoors is easily one of the better vacation movies ever made. It’s totally 80s but I love it. Candy plays the humble, down-to-earth, everyman Chet Ripley while Dan Aykroyd plays his antagonist Roman Craig, a loudmouth, arrogant, big-city guy who happens to be a trader. There’s a scene early on where the two men are grilling when Aykroyd begins to brag about his 300% profits trading Deutschmarks in just a week. Candy replies, “Well, easy money is money easily lost.” Not skipping a beat, Aykroyd snarkily comes back with, “I can’t believe how old-fashioned your thinking is.” The irony here is it was revealed later in the movie ***spoiler alert*** that Aykroyd’s character had actually gone broke through a series of bad investments. Chet was slow and steady. Roman was bold and flashy. Chet was risk-averse. Roman took big swings. Chet felt inadequate when looking at Roman’s Mercedes. Roman lost all of his money and had to lean on Chet for a financial lifeline. I watched The Great Outdoors for maybe the dozenth time this past week and couldn’t help but think about the juxtaposition of the two main characters and the markets these past few years. Just think about how easy it was to make money following the crash in early-2020. Jason Zweig discovered in the year following the bottom from March 23, 2020 to March 23, 2021, 96% of U.S. stocks had positive returns. That was the highest percentage of winners over any 12-month period in history. It was too easy. Everyone was getting rich investing in stocks, crypto, SPACs, IPOs, collectibles, NFTs, you name it. Remember headlines like these we were being beaten over the head with: The problem with these stories is you never hear the other side of it. The people who got in at the top and lost it all. The people who never rebalanced and completely round-tripped. The speculators who got rich overnight and went broke just as quickly. There were people who started buying individual stocks in 2020 for the first time that made multiples of their original investment by simply buying the hottest stocks. Most of those stocks have now completely given up those gains. I compiled a list of 2020’s stock darlings to show the insane returns they had from the bottom in March 2020 along with the current drawdowns from the heights of those gains: This was easy money that was money easily lost. In January 2021, close to the zenith of the market madness, I wrote a piece called It’s OK to Build Wealth Slowly. That post wasn’t so much financial advice to others as it was a reminder to myself about the dangers of speculation and FOMO during a bananas market. We’re all human. It’s understandable that people get caught up with the herd mentality when markets are rocking and it seems like everyone else is making money hand over fist. It’s no fun to sit in the corner while everyone else is partying but the party always comes to an end no matter how much fun it is. In the short-term, it’s always tempting to be more like Roman Craig and go for the quick buck. But over the long-term, the vast majority of people are going to be better off following the slow and steady Chet Ripley approach. Hard money in the long run is more sustainable than easy money in the short run." MY COMMENT How.....obviously.....true. We see the same thing over and over in BOOM TIMES. It is called......human behavior. Yes.......old proverbs are true.....slow and steady wins the race.
LOL......I am GREEN at the moment by a very tiny amount. At least it does not register as 0%.....it is +0.04%. Who knows where I will be in 25 minutes at the close. I consider it a VICTORY the past couple of days to not be significantly down. that is a welcome change from the year to date.
Not that anyone cares at this point.....but....the FED will start to wind down their balance sheet today. Fed starts shrinking $8.9T balance sheet to combat sky-high inflation Fed on track to reduce balance sheet by $3T over next 3 years https://www.foxbusiness.com/economy/fed-starts-shrinking-balance-sheet-combat-sky-high-inflation (BOLD is my opinion OR what I consider important content) "The Federal Reserve is poised to start shrinking its $8.9 trillion balance sheet, deploying one of its lesser-known tools as it seeks to tame the hottest inflation in a generation. In a plan outlined at the U.S. central bank's May meeting, policymakers said they will begin winding down the balance sheet on June 1 at an initial combined monthly pace of $47.5 billion, a move that will further tighten credit for U.S. households. They will increase the runoff rate to $95 billion by September, putting the Fed on track to reduce its balance sheet by about $3 trillion over the next three years. The Fed's balance sheet, which consists mostly of bonds and other assets that it has purchased, nearly doubled in size during the pandemic as the Fed bought up mortgage-backed securities and other Treasurys in order to keep borrowing cheap. Policymakers say the portfolio runoff will work in tandem with interest rate increases to bring prices down by slowing growth and tightening credit. The Fed voted to raise rates by a half-basis point in May and has all but promised that similarly sized hikes are on the table at upcoming policy meetings in June and July. While it's unclear how effective reducing the balance sheet will be in fighting inflation, policymakers have suggested they are optimistic it will work to bring prices down. "Although estimates are highly uncertain, using a variety of models and assumptions, the overall reduction in the balance sheet is estimated to be equivalent to a couple of 25-basis-point rate hikes," Fed Governor Christopher Waller said Monday during a speech. The question now is whether the Fed can successfully engineer the elusive soft landing — the sweet spot between tamping down demand to cool inflation without sending the economy into a downturn. Hiking interest rates tends to create higher rates on consumer and business loans, which slows the economy by forcing employers to cut back on spending. Fed Chairman Jerome Powell has acknowledged there could be some "pain associated" with reducing inflation and curbing demand but has pushed back against the notion of an impending recession, identifying the labor market and strong consumer spending as bright spots in the economy. Still, he has warned that a soft landing is not assured. "It's going to be a challenging task, and it's been made more challenging in the last couple of months because of global events," Powell said Wednesday during a Wall Street Journal live event, referring to the Ukraine war and COVID lockdowns in China. But he added that "there are a number of plausible paths to having a soft or softish landing. Our job isn't to handicap the odds, it's to try to achieve that."" MY COMMENT Personally I dont see this as having any real impact on inflation or anything else. No one cares at all about this.
WELL.....the last 25 minutes of the market today cost me my TINY gain. I ended in the red today. BUT........I did get a victory....beating the SP500 by 0.25% for the day. It was actually a very minimal day for me. I am happy to end the day near where I started it this morning. At this point I am very content to NOT lose money o just lose a small amount....day to day.
We now move on to the final two days of the week. I have no reason why.....but....for some reason I am expecting a nice green day tomorrow. Probably a pipe dream with the FED stuff going on......but I still have a good feeling about the last two days of this week. PLUS....I am sure I will feel much better when the day ends on Friday and I have 20 times my current number of Amazon shares in my account.
Here is the economic news of the day that no one will care about. US Private Payrolls Miss Expectations in May https://www.newsmax.com/finance/str...-inflation-u-s-economy/2022/06/02/id/1072589/ (BOLD is my opinion OR what I consider important content) "U.S. private payrolls increased far less than expected in May, which would suggest demand for labor was starting to slow amid higher interest rates and tightening financial conditions, though job openings remain extremely high. Private payrolls rose by 128,000 jobs last month, the ADP National Employment Report showed on Thursday. Data for April was revised down to show 202,000 jobs added instead of the initially reported 247,000. Economists polled by Reuters had forecast private payrolls increasing by 300,000 jobs. The ADP report is jointly developed with Moody's Analytics and was published ahead of the Labor Department's more comprehensive and closely watched employment report for May on Friday. It has, however, a poor record predicting the private payrolls count in the department's Bureau of Labor Statistics employment report because of methodology differences. Government data on Wednesday showed that there were 11.4 million job openings on the last day of April, which lowered the job-workers gap to a still-high 3.3% of the labor force from 3.6% in March. The Federal Reserve is attempting to cool demand for labor, in order to lower inflation, without driving the unemployment rate too high. According to a Reuters survey of economists, private payrolls probably increased by 325,000 jobs in May after rising 406,000 in April. With no gain expected in government employment, that would likely result in nonfarm payrolls increasing by 325,000 jobs. The economy created 428,000 jobs in April, marking 12 straight months of employment gains in excess of 400,000." MY COMMENT There is no way to know if this data means anything or even if any of this stuff is accurate. The economy is so distorted now.....who knows. The data is all over the place and will continue to do so into the near future.
Can you say......FREE MONEY? $2 trillion in savings may not rescue the economy https://www.cnn.com/2022/06/02/investing/premarket-stocks-trading/index.html (BOLD is my opinion OR what I consider important content) "London (CNN Business) The CEO of the biggest US bank estimates that Americans are still sitting on $2 trillion in pandemic-era savings that can power the economy even as inflation bites. But what happens once that stash of cash is diminished? What's happening: Consumers in the United States should maintain healthy spending patterns for the next six to nine months, JPMorgan Chase CEO Jamie Dimon said at an investor conference on Wednesday. Stimulus checks are still making a difference. "That fiscal stimulation is still in the pocketbooks of consumers," Dimon said. "They're spending it. They're spending at very strong levels." But he conceded that may not be enough to keep an economic "hurricane" at bay as the Federal Reserve pulls back support and the war in Ukraine drags on. "Right now it's kind of sunny, things are doing fine," Dimon said. But, he continued, a "hurricane is right out there down the road, coming our way." Dimon said it's not clear if the hurricane will be "a minor one or Superstorm Sandy." Either way, JPMorgan is "bracing" itself. Big picture: Piles of savings have been the secret weapon of the pandemic recovery. The personal savings rate in the United States hit an all-time high of 33.8% in April 2020, quadrupling compared to February 2020. Covid-19 lockdowns dramatically limited spending options for Americans, while people who feared losing their jobs tightened their purse strings. When the economy reopened, that fed a spending boom. And even as consumer confidence has dropped, as people worry about rising food and fuel prices, households have largely continued to whip out their wallets. US retail sales in April were up 0.9% from the month before and were 8.2% higher than April 2021, according to the Commerce Department. But that mountain of savings is starting to get drawn down as bills rise. The personal savings rates as a percentage of disposable income fell to 4.4% in April 2022, its lowest level since 2008. High inflation is also eroding the value of those savings, since a dollar doesn't buy as much as it used to. "That large pool of savings that many refer to is getting eaten up by higher inflation and wages that aren't keeping up," said Peter Boockvar, chief investment officer at Bleakley Advisory Group. Households are turning to credit to help offset higher costs. Bank of America found that credit card spending in April climbed 22% year-over-year. But as borrowing costs tick up, taking on debt may start to look like a riskier proposition. These trends underscore an important question: How long can high levels of savings continue to prop up the economy as pressures mount? The answer could determine whether the United States falls into a recession next year, as some economists predict. Dimon, for his part, wasn't all doom and gloom. He said he remains an optimist even in the face of huge uncertainty — though his remarks don't inspire much confidence. "I think it's okay to hope that we'll end up okay. I hope it. That's my Goldilocks," Dimon said. "Who the hell knows?"" MY COMMENT "Who the hell knows?" That is the guts of this little article. No one knows what is going to happen short term. BUT.....there is no doubt that the amount of FREE MONEY given away during the pandemic was RIDICULOUS. People saved piles of money and are using that money to continue a massive spending spree. That money is also causing much of the inflation issue we are having.....along with the supply chain and supply/demand issues. That free money is also distorting the labor supply and jobs markets.
The poor little markets....they are directionless today. I doubt that will last for long. The bad thing is a directionless market on the daily level....means that the markets will probably default to the trend which at the moment is negative. If I dont get my green day today.......I am going to have a foot stomping hissy fit. Well not really.......
HERE is the reason for the red in the markets today......corporate positioning for future earnings beats. Microsoft cuts quarterly forecast for revenue, profit on forex hit https://finance.yahoo.com/news/microsoft-lowers-revenue-profit-forecasts-131435503.html (BOLD is my opinion OR what I consider important content) "(Reuters) -Microsoft Corp on Thursday cut its fourth-quarter forecast for profit and revenue, citing a hit from a stronger dollar, sending the tech giant's shares down 3%. The dollar has climbed about 14% against a basket of currencies over the last year, driven by a hawkish Federal Reserve and heightened geopolitical tensions. A stronger greenback has pressured the profits of U.S. multinational companies that convert foreign currency into dollars, adding to corporate worries over soaring inflation and pushing some to more actively seek ways to hedge their earnings. Microsoft, which gets the bulk of its revenue from cloud services, expects revenue for the quarter to be between $51.94 billion and $52.74 billion, down from its prior range of $52.40 billion to $53.20 billion. It cut the profit view to between $2.24 and $2.32 per share from a prior expectation of between $2.28 and $2.35 per share. Analysts are forecasting earnings of $2.33 per share on revenue of $52.87 billion, according to Refinitiv data. Microsoft had in April forecast double-digit revenue growth for the next fiscal year, driven by demand for cloud computing services. Salesforce.com, Coca-Cola Co, Procter & Gamble and Philip Morris International Inc are some others that have warned of a profit hit due to a stronger dollar." MY COMMENT I seriously doubt that anything has changed since Microsoft gave guidance in April. This is positioning for future earnings beats........or......CYA for future earnings misses. In other words.....company game playing. BUT......day to day....this is the sort of stuff that short term day traders just love.
For those that own AMAZON......as i do.....here is a little bit of analysis. As Amazon Preps Its Stock Split, Let's See If It's Past Its Prime https://realmoney.thestreet.com/inv...rs-split-too--16015753?puc=yahoo&cm_ven=YAHOO (BOLD is my opinion OR what I consider important content) "With just days to go before Amazon (AMZN) splits 20 for one, it's worth putting pen to paper to understand the bull case and see if it holds up. For those who haven't followed the news, the online retail and web services giant's shareholders recently OK'd what amounts to a stock split that will give each shareholder 19 additional shares for each Amazon one they already own -- with the price of each share worth one-twentieth of its previous value. Trading for the split-adjusted shares is slated to start June 6. As we close in on that date, we can see a remarkable aspect of AMZN: Analysts are universally bullish and have been for years on the name. The last downgrade of Amazon shares by a major firm came in 2017 by Raymond James, which at the time broke a streak of over a year without a downgrade. With virtually every firm with a "Buy" recommendation, and significantly higher price target, why is everyone dogmatically bullish? I understand that this is Wall Street sell-side research for a reason -- they are in the business of selling. Still, top stocks sometimes get downgraded, especially after weak earnings. Certainly, many high-profile stocks are not as universally loved. Apple (AAPL) , for instance, has far more detractors in the analyst community. Clearly, the shares of Amazon had gotten ahead of themselves during the pandemic, and last quarter's earnings were a disappointment, leading to a dramatic fall in the shares this year. Analysts still held the line. Perhaps there's an unwritten code about Amazon within the analyst community: Thou shalt not downgrade AMZN. I generally feel a contrarian attitude when everyone is leaning on the same side of the boat, but let's put that aside and start with a clean slate. Numerous analysts have been bullish for over a decade, so knee-jerk contrarianism could be unwise. Perhaps in an unforgiving market, the shares have been overly discounted. Amazon management did emphasize that the earnings disappointment was not a demand problem. For starters, Amazon has many moving pieces, and many analysts choose to use a sum-of-the-parts analysis to derive a price target from their five businesses -- online/physical retail, third-party seller services, Amazon Web Services, subscriptions, and advertising. Analysts rely on an outsized valuation for AWS, 10-times to 12-times of current sales, to justify much higher price targets. At the current market valuation, the $70-plus billion business is valued far less aggressively, closer to 6-times revenue, and more in line with the re-rating of growth stocks. AWS grew revenue by 36.5% in the latest quarter to $18.4 billion. Still, concerns have emerged, including higher stock-based compensation from the competition for engineering talent and unprofitable tech companies cutting back on web services in a world leaving growth-at-any-cost behind. Several headwinds currently prevail in their core retail business, such as the cost of diesel, higher wages, negative worker productivity from over-staffing, and under-use of the logistical footprint. Interestingly, where the stock market has been unforgiving of these challenges, analysts anticipate that continued growth will eventually turn some headwinds into a tailwind. Capital expenditures will moderate significantly and growth will resolve under-use -- helped by Prime Day in the third quarter. Amazon is among a small cadre of companies that can consistently create multi-billion-dollar businesses. History does suggest giving Amazon the benefit of the doubt, and leads analysts to trust the company will work through issues and emerge stronger. Brian Nowak from Morgan Stanley notes that the logistics over-capacity is leading to improved delivery times and increased use of Prime, as well as helping to expand their budding third-party logistics business. Viewing Amazon's revenues over the past three years to smooth out the pandemic surge still shows around 22% compounded annual revenue growth, which can potentially start to re-accelerate in the back half of the year. Analysts are relying on this continued growth to alleviate recent headwinds. At current levels, analysts' bullishness for Amazon makes complete sense with a justifiable valuation. Most retail giants had a tough quarter; history suggests Amazon will make the most of the moment to gain share. The streamlining and focus on profitability by new CEO Andy Jassy is a welcome change and can turn sentiment quickly. Although a 20 for one split does not change fundamentals, we will see some benefits: AMZN will likely be added to the Dow Jones and it allows smaller investors to use a broader set of options strategies, including buy/writes. Universal bullishness is often a caution sign, but after a more than 30% pullback Amazon is on sale." MY COMMENT I am STILL not sold on the new CEO. It is going to be some time for shareholders to see if he can manage the company and deliver. I cant say I am impressed so far. The other issue that I do NOT like with the company is their talk at various times about bricks and mortar locations and facilities. In my view any approach that involves actual retail or other consumer locations is a mistake. I have not been a fan of the way the Whole Foods acquisition has panned out. I am STILL looking at the stock as a two year evaluation. Their last earnings report was not great and the stock performance over the past 1-3 years has been underwhelming. I do believe that the handwriting WILL be on the wall in about two years......so I will continue to hold the stock and see where we are at that point.
WELL, well, well.....the market worm has turned......at least for a brief moment. We are now green in the SP500 and the NASDAQ with the DOW having also greatly improved. A new begining to the day.
Yes. So much of what is showing up all this time later is directly related to many of the incompetent decisions made way back then. And it just kept coming...then it was free rent, free this and free that. Then some folks didn't want to work and then they didn't want to be "under employed." According to most media we should all be eating cat food and living under a bridge by now. Geez!! It was a disaster in the making if you think about it. Rant over...for now. Positive...It was mentioned some posts back, but the SP 500 is down around %14.64 so far (YTD). While none of us enjoy being in the downturn at the moment, that is actually not bad considering everything currently in play right now. I figured it would be further considering all things. It may very well drop us a lot further. I have often heard it said the volatility in the markets is the price of admission. Well, we are paying a bit of an admission price to stay in the game. Here is the positive thing though...if we weather the storm and stay in our positions we will be rewarded in the long term. As far as you can look back, that has been the case.
and that, my friend, is how socialism works. You give everyone an EQUAL amount of money, the lazy and incompetent folks will spend it, and the smart and savvy folk will collect it, further expanding the gap between low to middle income societies. Brilliant idea!
When I looked a short time ago.....I was in the green......GASP. I had six of ten stocks UP for the day. Of course....this early in the day....I have no confidence that the close is set in stone for me or anyone else.
Investing is very important to secure your family future......obviously. What I would consider the second most important aspect of being an investor is the EDUCATION of the next generation. It starts with your own kids and perhaps others around you. I post this article as a basic guide on this topic. I am NOT going to BOLD any of it......because I believe the whole thing is very IMPORTANT. As an investor I am doing everything I can to provide for future generations in my family. This will all be a WASTE if there is no ability for the next generation to manage the money that they receive from me when that time comes. I DO have faith in my kids and their spouses to manage and invest money properly. We exposed our kids to money and investing lessons throughout their lives. Op-ed: Financial literacy should be a family affair to help empower future generations https://www.cnbc.com/2022/06/02/how-parents-can-empower-their-kids-through-financial-literacy.html "Key Points Today’s financially troubled adults may be setting up future generations for failure, so it’s important parents instill money management skill and values in kids of all ages. Kids who grow up with a good financial education are less likely get stuck in debt cycles, are better prepared for emergencies and have the surplus to give to charity and support their communities. Here’s a look at suggested educational steps for kids in four age categories. The Covid-19 pandemic really highlighted how financially troubled our society is. Debt levels are extremely high, bankruptcies are commonplace and many Americans are living paycheck to paycheck. Today’s adults are suffering and may be setting the next generation up for trouble, as well. Tackling the financial literacy crisis in America begins in the home, as financial education courses are still not being taught consistently in schools across the country. Yet, according to a T. Rowe Price study, 36% of parents are “very” or “extremely” reluctant to discuss finances with their children, and another 26% say they are “somewhat” reluctant. As a result, kids today have no concept of money or how it works. Despite this reluctance, it’s important for parents to start the money conversation at home with their kids. With that said, here’s a basic guide of financial concepts that you can discuss with kids at various age ranges. Ages 3-5 You need money to buy things. You can talk to them about the different forms of money we use — coins, dollar bills, and credit and debit cards. Have them consider all the things that cost money — toys, groceries, their backpack, etc. Also explain that a lot of things that have value are free. Spending time playing with a friend or cousin is really fun and doesn’t cost a dime. Money is earned by working. Talk about your job or profession and why you chose it. Use examples of jobs they recognize like teachers, fire fighters and mail carriers. You can talk with them about ways they might think of to make money. You might have to wait to buy something you want. Delayed gratification is a hard concept even for a lot of adults to understand. The sooner children accept this fact, the better. Have them identify an item they’d like to buy. Maybe it is a toy or piece of candy. Talk about how much it costs and help them count out the money required to purchase it. Ages 6-10 There is a difference between what you want and what you need. Talk about all the things we need to buy with our money — clothing, food, a home to live in. Then make a list of things we like to have, but don’t necessarily need to live — toys, candy, Paw Patrol slippers. You must make choices about how to spend your money. There are trade-offs, and money can run out. Give them some money with the task of choosing which snacks to buy for the week. Do you want to spend money on something, or can you borrow it or buy it somewhere used or at less cost? Once it is spent, it is gone. It is good to compare prices. Explain there are lots of ways to buy things. You can physically go into a store to buy it, look for it online (perhaps via the magical land of Amazon) or buy it used from someone else. They can help you look through coupons or wait for sales to get better pricing. Ages 11-13 You should save a at least a dime for every dollar you earn. Encourage the habit of saving 10% of all money your child receives. Have them set goals for things they’d like to save up for. Using a credit card is like a loan. Most likely, they watch you use cards all the time and might have questions about it. They need to understand this is actually a financial transaction taking place and money is going out. Ages 14-18 You should avoid using credit cards if you can’t pay the balance off each month. They need to understand if you don’t pay the bill in full every month, interest can work against you and you’ll end up paying more for the item than it actually costs. At this age, they are a lot closer to having their own credit card. You must pay taxes on your income. This is an important concept to understand well before they graduate from college and get their first full-time job. Explain what taxes pay for in your community. The importance of having an emergency fund. Provide examples of why it is important to always keep some cash in savings. You can cite examples of emergencies you’ve experienced — appliances breaking, losing a job and medical issues and how having a savings cushion helped you get through these times. Or alternatively, talk about how you regretted not having an emergency fund when you needed it. Basic investing concepts. If they are earning income, you may consider setting up a Roth individual retirement account for them and talking about basic investment concepts so they can get some hands-on experience in watching their money grow. Education is power Provide real-time examples of trade-offs you make. When you are at the store with your kids, compare prices together and tell them why you are choosing to purchase one item over another. Talk to them about something you saved up for and how long it took you to do it. Use allowance as a learning tool to create teachable moments. We need to put our kids in scenarios where they make and manage their own money before they are out in the real world. Let them spend the money they earn and help them set goals to save up for bigger items. If you are going on vacation, let them bring their own money to spend on snacks or trinkets that you wouldn’t normally buy for them. Help them get a feel for what these items cost. Let your kids fail and learn. Let them make silly purchases and check in with them a week later to see how they feel about it. Are they still enjoying that $10 pack of Pokémon cards, or did they end up in the recycle bin last week? Congratulate them on the purchases that they got a lot of use out of or saved up for. Let them practice, fail and learn how the real world works. You want them to learn and make mistakes while they are still under your roof. By age 14, start “real-world” training. Take the amount that you would normally spend on them for entertainment, clothing and other needs and put that into their checking account each month and let them manage it. If they spend it all on a pair of designer sneakers in the first week and have no money to go to movies with friends later, they have learned the lesson that money is finite, and they need to manage it better next month. Education is power — when you know better, you can do better. When it comes to money, being able to manage it well is part of a healthy lifestyle. If you can engrain a behavior early on, the better it will stick. Kids who grow up with a good education around money with healthy habits will grow into adults who are less likely get stuck in a dangerous debt cycle, are better prepared for emergencies and have the surplus to give to charity and support their communities." MY COMMENT The most important job of any parent........leaving the next generation with the skills and knowledge needed to be successful in family and life.
Yes it is. And I agree with your earlier post...we should stomp and throw a fit if it doesn't end GREEN...I mean throwing a fit because we didn't get our way seemed to work for some the last 2 years. Okay...I need to behave myself. I just hate to see things progress like they have. Just as Zukodany pointed out above.
Great posting. I too, have done as much as possible to instill a financial foundation with my kids. It has paid off in so many ways in their young adult lives. It really is the foundation to any future success they will have. It does not mean that life will be an easy road, but it will give them the confidence and the ability to navigate those times when everything does not go as planned. It gives them accountability and responsibility to chart their own course and not rely on others to bail them out.
Today has turned into a killer day for the markets. We just have to hold on for another 40 minutes.......an eternity in the current volatile environment. BUT....I am expecting a nice close today and another green day tomorrow. I am using the power of positive thinking......besides.....we deserve it.
