Becoming wealthy is simple

It’s true.  Most people know what to do to become rich.  You know that you need to spend less than you earn, have a savings plan in place, invest wisely, have a budget (simple of course) and have an emergency fund.  But knowing this is not the problem.

The hard part is doing it, actually putting it into practice.  That’s where most people fall down.  They don’t take action.

A lot of the advice that financial guru’s give you is simple enough, but unless you do something with that advice your situation is unlike to change.

You need to take action to change your life

I firmly believe anyone can change their financial future for the better, but you need to take action and have a plan to do so.

Many people are so stuck in their routines of life that changing something – whether that’s saving money instead of buying a morning coffee for example – is hard to do.

For many people change is hard.  But if you can make those small sacrifices and lifestyle changes you really can change your life for the better.

You need to believe in yourself

I know that sounds like some new age babble, but unless you can see it happen in your mind and believe you can change, you won’t be able to make it a reality.

It’s belief that you can do it that will inspire you to make changes in your life.  Of course you also need a plan and a commitment to follow through, but it’s hope and belief that will allow you to make such significant changes.

That’s why all my money making plans are easy to follow

All my money making plans are simple.  I’ve always said that they are.  I’m just an everyday person like you.  But even though I’ve had slip ups along the way I’ve never lost sight of my ultimate goal of financial freedom for me and my family.

And I use the same simple plans that I talk about on my blog.  I don’t like complicated action plans or convoluted budgets.  I just want a plan that works and I’m happy to share what I’ve learned.  They are powerful because of their simplicity.

Simple works.

Thanks for reading The Simple Truth: You Already Know How To Get Rich. I hope you liked it.

P.S. Just released my newest book "30 Day Spending Detox: The Simple Plan To Save Money & Get Out Of Debt In Just One Month". $4.99 on Kindle (print version and other readers coming soon). Tracey xx

Now personally I’m biased because I both am a stay at home mum of two AND I love investing in stocks – but sometimes I wonder if I’m the minority.  Many of my other SAHM friends think the stock market is a gamble, something that’s akin to betting on horses.

I disagree of course.

Other’s say it’s just for grey old men in pin striped suits or cocaine fueled twenty something’s from Wall St.

Again I disagree.

I believe that investing is for anyone (and everyone).  And even home makers like me.

First a bit of background so you know where I’m coming from.

Me

I was slightly geeky in school (I liked maths and science) but still popular enough to get invited to all the cool parties.

I always had an entrepreneurial streak (or stubborn independent spirit as my mum used to call it).

And since I grew up in a rather ‘poor’ family – my mother was a single parent living on welfare I was determined that this would not be my fate.

So I was always interested in money – or rather how to get money.  Legally of course.

Obviously that meant I had to go to University and get a ‘good job’ then right?  S0 that’s what I did.  Uni was fun but all those boys and parties were distracting.

I studied Journalism and Media Communication and though that being a TV news presenter would be the absolute coolest job on the planet.  That didn’t eventuate.

After uni, apart from a brief stint in PR, a fell into boring secretarial type roles.  Nobody seemed to want to take a chance on me.  So I got stuck as an admin assistant.

Look there is nothing wrong with being an admin assistant – but it’s not exactly a dream career is it.

I wanted more.

And being a geeky maths chick (albeit a cute one) I thought the stock market might be a good try.

And god damn I turned out to be good at it!

In fact I was able to leave my job after five years with the money I had accumulated in stocks.

I’ve not had a full time job since.

Of course I still live quite frugally, but the point is I don’t have to get a j.o.b.

God that sounded just like some infomercial didn’t it.

Sorry.

Didn’t mean it to sound like that, just wanted to let you know where I was coming from.

You

So anyway where was I (yes I do tend to ramble).

Oh that’s right.

Can stay at home mums (or dad’s – let’s not discriminate here) make money by investing in stocks.

Yes.

But not overnight.

It’s going to take some time.

You are going to have to learn a few basic fundamentals like Return on Equity, Earnings Growth and stuff.

Luckily it’s pretty easy once you get the hang of it.

I’ve gone over the basics in this post, like how much you need to get started (hint: $5,000 minimum).

And how you can diversify your portfolio, what to expect the first time that you invest, the price you should buy at, and even tips on what to do if the stock price goes down.

I’ll be including a lot more tips over the next few months as well.

They’ll all be free too.  Of course!

Us women (and stay at home mums) have to stick together.

To our (your) success.

Tracey

Thanks for reading Can (And Should) Stay At Home Moms Invest In Stocks?. I hope you liked it.

P.S. Just released my newest book "30 Day Spending Detox: The Simple Plan To Save Money & Get Out Of Debt In Just One Month". $4.99 on Kindle (print version and other readers coming soon). Tracey xx

But I do know how the stock market works in terms of us making money from it.  You know the whole buy low, sell high, do a happy dance thing.

So that’s what I’m going to focus on in this article: How it works in a way that you can profit from it.  Coolio, let’s get started.

Now I’ve already mentioned that you need to know which companies that you want to invest in by doing a bit of research to find those excellent stocks likely to give you a nice return.  You can learn more about that here.

I also mentioned briefly that we like looking for stocks that have high dividend yields as well.  Although high divs are more of a bonus than a necessity.  But I still think it’s good to keep a few high div yield stocks in your portfolio anyway to diversify.

How do you make money in the stock market?

You can actually make money a number of ways but probably the most common for regular investors is to buy shares of a stock at a certain price and then when it rises in price sell at the higher price netting you that profit.

There are other ways too which involve short buying and selling, naked buying and selling, buying just for dividend income, buying warrants and options and so on.  But let’s keep things simple because I don’t think it has to be complicated for you to make money.

And since I assume you don’t want to keep your eyes glued to the Bloomberg Channel for every little movement up and down in the market I would think that the majority of your investments should be based on long term stocks.

So that’s it then.  Buy low sell high.

Well yes basically that IS it.  Although it’s not always quite as easy as just picking any random stock and buying it.  You do need to put some thought into what you are going to buy first.

And that means looking at the financials (or fundamentals) of the company to make sure they are sound and the company is happily making a good profit for its shareholders.

But what if the stock price goes down?

It happens.  Especially in the turbulent times like we are currently in.  But if the financials remain good then there is no reason to panic sell.  We are nearly at the end of this cycle of the stock market fall and while there should be a few bumpy months ahead over the next twelve to eighteen months as they say “This too shall pass”.  The economy will recover and stock prices will rise again.

Besides if you want to look at it the other way, right now there are some great companies at bargain basement prices.  When the stock price recovers, you could be doing very well indeed if you choose wisely.

But of course that isn’t to say that the stock you choose will recover at all.  Perhaps you bought on the advice of someone else or just chose randomly because you liked the company?  Perhaps it isn’t going to ever recover?  In that case putting in place something like a stop loss (a price point where if it falls to this you cut your losses and get out immediately so you don’t lose any more money).

That stop loss could be a percentage below your initial investment (such as a fall of 15%), or it could be a particular price such as if it falls below $10.00.

Having that ‘insurance policy’ allows you to get out before any real damage is done.

Of course you have to be realistic and know that stocks jump around all the time and you don’t want to get out too early if it’s just moving normally, so knowing the volatility of the company you invested in is important (you can find this just by looking at it’s stock price chart and seeing what’s normal for that stock).

So let’s summarise what we’ve talked about so far:

• To make money (in it’s simplest terms) you buy low and sell high.
• There are other ways to make money including buying stocks for dividend income.
• Choosing good companies with strong fundamentals can help improve your chances of picking winners in the market.
• Having a plan, such as setting a stop loss up, can help minimise your losses if your stock price is falling.
• However you need to be aware of the share price history to see if the ups and downs you are seeing is normal or not.
• And that’s it really.  That’s how the stock market works in terms of making money from it.

See I told you it was simple.

Thanks for reading How The Stock Market Works So That You Can Profit From It. I hope you liked it.

P.S. Just released my newest book "30 Day Spending Detox: The Simple Plan To Save Money & Get Out Of Debt In Just One Month". $4.99 on Kindle (print version and other readers coming soon). Tracey xx

I know that not everyone wants to invest directly in shares and would rather use a more passive approach to the stock market such as buying managed funds instead (and that’s cool if you want to do it that way) but for me I like the thrill and excitement of getting my hands dirty in research and choosing to buy stocks directly (yes I’m weird like that).

This isn’t a get rich quick method of making money however (even though sometimes that happens when we are in a bull market), no, investing in stocks is a long term way of building wealth.

So having said that, should you invest in shares?  Do you still want to?  Coolio, here’s what to do.  Buy my other book Shopping for Shares.  Ok done, article finished.  Bye Bye.

Just kidding, I’m going to give you the basics here for free.  Aren’t I nice.

Anyway .. where was I?

Oh yes, the stock market.

I’m going to assume that you already have an account which you can trade through.  If not that’s your first step.

Next is doing your research to find the best companies.

To get a diversified portfolio I recommend using three different types of strategies:

1. Long term shares
2. Short term shares
3. Shares with high dividend payments

There are different strategies to all of them but here is a basic run down of what I do to choose stocks within each of methods:

Long term stock investment

While I go into more detail in my book Shopping for Shares, generally for the Australian stock market I look for the following things:

• In the All Ords Index
• Return on Equity over 15%
• Debt to Equity under 75%
• Earnings Stability over 80% (this one can be difficult to find)
• Decent share price return over 5% or 10% p.a.

Fairly soon I’ll be making a list of all of those companies that fit my rules over at my shopping for shares website.

Short term stock investment

I use quite a different strategy for short term investing (obviously).  In bear markets (like now) it can be difficult to find good quick growth stocks but you can still do it if you know what to look for.

• In All Ords Index
• Look for Outperforming sectors
• Look at which companies within that sector are doing the best
• See what the increase over the past two months has been.
• Buy with that increase as your target over the next few months.
• Sell if it falls below about 10% or if it hasn’t reached your target within 6 months.

Buying for the Dividend Income

This strategy is a newer strategy for me, but one I’ve become increasing more interested in as I invest since it allows you to take advantage of both capital growth when the market is good and also receive regular dividend payments no matter what the market is doing.

• Stocks within the All Ords (although generally I tend to stick with the top 100 or even top 50)
• Decent financials (as close to my long term rules as possible)
• A dividend yield of over 5% (the higher the better).

Having a good mix of all of the three methods should give you good basic diversification for your portfolio.

So how much money should you invest in stocks?

Hmm, let’s see.  As a ball park consider the following amounts (for the average Australian).

- You should have $2,000 in your emergency account.
- No debt.
- $10,000 in a high interest savings account.
- $50,000 in shares / managed funds (either, or, or combination)

So yes.  Around $50K.

Sounds a lot but you’ll be building it up gradually over time and it depends on how the market is doing as to how quick you’ll be able to get there.

The rest of your money is going to go to pay off your mortgage.  And that’ll be what I’ll concentrate on next …

Thanks for reading Should You Invest in Shares And If So Which Ones?. I hope you liked it.

P.S. Just released my newest book "30 Day Spending Detox: The Simple Plan To Save Money & Get Out Of Debt In Just One Month". $4.99 on Kindle (print version and other readers coming soon). Tracey xx

Well I’m here to say it does make a difference.

It’s been proven many times with various investment studies that men are more risky than women and often at their detriment because they tend to panic sell more often.

Women however are far more conservative in their approach and are much more likely to take their time to do some research first, will often stick with the more well know stocks (the blue chips) and are far less likely to sell out when the stock market falls (although they are much more likely to complain to their husbands about it but that’s an entirely other story).

And because they are more conservative, wouldn’t you know that very often they actually do BETTER than men do.  I know – cool huh!

Ok, so you probably know this already so now it’s time to get started investing.

Since I’ve already talked quite a lot about what to look for when choosing a company here and here I thought I’d go further into the actual final decisions for making that buy order.

Let’s say (for example) you are ready to invest $5,000 in AT&T (T) since it has pretty good fundamentals and also a really great dividend yield.

How do you go about doing that?

Before you place an order I’d suggest looking over at what the stock has done over the past week to see a guide of the types of prices that it has reached.

As of writing, last week it reached highs of around 28.75 and lows of 27.50.

So based on that I’d recommend putting your buy order in at around the bottom of the price range and probably aim for putting in a market limit order of $27.75.

That means the order will only go through if it is below that price point.  So the highest you will end up paying is only $27.75 per share (you could also pay lower than this if that is what the market price is at the time of putting your buy order in).

More often not you’ll get at the price you want it although if it’s in a strong uptrend you will either have to increase your buy price or wait a bit longer in case it has another dip.

The same goes with selling.  You want to see a range of prices and choose something towards the top over the past five days.  Again if it’s in a strong downtrend you might not get out straight away so it’s worth waiting or changing your price point.

So back to our buy example, let’s say you got your shares for $27.70 so now you hold 180 shares of AT&T.

Congratulations – you are now a stock holder!

Now what?

Ahh now you wait.  Put that stock away in a cupboard and forget about it.  Whatever you do don’t check it every day or even every week.  You’ll only freak out.

Long term investments DO do well over the long term but can be quite jumpy over the short term so you’ll save yourself a lot of stress if you ignore it for a while.

Start saving up for the next company to invest in so that you can expand your portfolio.

Then repeat the process.

If you can manage it, try to build up around 10 or so companies in your portfolio with a mix of both long term stocks, dividend stocks and if your temperament can handle it some short term stocks as well.  That’ll give you some good diversification.

And having $50,000 in your stock portfolio is a good amount to have for the average family.  (You really don’t need more unless you have lots of disposable income).

So that’s it.  My quick and easy stock market beginners guide for women (and men too if they want to use it).

Enjoy.

Thanks for reading The Stock Market Beginners Guide To Investing (For Women). I hope you liked it.

P.S. Just released my newest book "30 Day Spending Detox: The Simple Plan To Save Money & Get Out Of Debt In Just One Month". $4.99 on Kindle (print version and other readers coming soon). Tracey xx