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5 Smart Ways to Invest $100

Before you say “$100 is not a lot of money for anything,” consider that there are a few strategic options you can use to grow $100 significantly . For example, while $100 may not seem like much today through the power of compounding it can increase substantially. Compounding works by allowing your money to earn interest on interest effortlessly. In other words, if you invest your $100 into the market and earn an average return of +7% annually you will begin to see that account balance grow exponentially over time. In this example, after the first year invested your account balance will be $107 dollars. Then, in the second year your +7% return will be calculated based on this larger account balance of $107 which results in an ending value of $114.49. Assuming an average return of +7% each year you can see how your account has started to increase its earnings power by returning $7.49 in year two after earning just $7 in year one. Over time, the larger the dollar amounts

Stop Being So Basic and Start Diversifying: Part 1

Common investment knowledge suggests that “you shouldn’t put all your eggs in one basket.” In effect, this phrase is attempting to convey that you need to diversify. In the context of your finances, diversification is not just placing your assets into random buckets with the hope that nothing bad will happen. Instead, you need to allocate your assets in an optimal manner to achieve your desired results . Diversification for Investing The right mix of diversification will be unique to each investor based on your preferences for risk and return. Accordingly, determining the appropriate blend of assets is the starting point in building a diversified portfolio. As an investor you may be more risk seeking than others who are more risk averse and yet an optimal portfolio can be built for both preferences along the continuum of risk and reward. Additionally, throughout your lifetime the diversification of your portfolio will naturally change. That is

Be a Savage and Crush Your 2017 Financial Goals

Even though we are just past the midpoint of 2017 there is still time to make improvement in your finances before year-end. Five areas that can make the biggest difference in your financial life right now include cutting costs, automating and diversifying your investments , paying down debt, making more money, and planning for the things you want. According to the paradox of choice, when we have too many options or goals we end up never focusing on any of them. Instead of getting overwhelmed by thinking about all the financial questions and ideas you may have, concentrate on the following five suggestions which will create big wins for you in 2017. Cut Costs Cut costs everywhere! Start by assessing your biggest costs first, like your mortgage, rent, or car payment, as there will be the most room for cash to be freed up by reviewing these big ticket items. Also, try to find any recurring costs, purchases or subscriptions that collectively amount to a la

The Best Financial Gift You Can Give Your Children

Frequently I am asked questions regarding how a couple should invest money for their children’s future. From my experience, the best option is to use a Dividend Reinvestment Program or DRIP. A DRIP is a stock-based investing plan that is issued by most major corporations that pay a dividend. A dividend is simply excess cash returned to shareholders. Historically, dividends have accounted for most of a stock's growth . To start a DRIP investment plan you will need to invest an initial amount of money, say $100, in the account and then your account will automatically reinvest dividends each time they are paid. For example, the $100 of cash used to purchase shares in a dividend paying stock may allot you one share of stock. Additionally, the stock has an anticipated yearly dividend of $2.00. Typically, dividends are paid quarterly or four times a year. Every time a dividend is paid the money is used to purchase new shares at the current market price. So

A Do-It-Yourself Plan to Start Investing

Starting anything new can be daunting. Certainly, learning to invest your money is no different. However, whether you have saved some money and want to begin investing or you just want to learn how to invest, putting a proven plan in place will set you on the right path to tackle this new challenge. If you don’t take the time to design and plan your life you will have to settle for what life gives you… - Joe Duncan, @Before5AM Select an Investment Strategy Before you start investing you need to learn about markets and understand how they work. The odds of making money are greatly stacked against most individual investors so getting familiar with different profitable strategies is important. Perhaps you choose to focus on timeless methods like value investing (buying under-priced stocks) or cost-effective indexing (passively managed assets) that are proven to grow your wealth. The “Little Book” investing series is a good place to get a basic unders