Making Money 101? What to do today!

I write about advanced financial strategies; these are designed in three stages: Making Money 101 – Get on your feet, financially speaking; Making Money 201 – Build your wealth; and, Making Money 301 – Keep your wealth.

Another way to look at it is that my blogs are all about getting you to your Number, then keeping you there!

Since we are dealing in time-frames of years (at least 7 years to go from ‘zero to financial hero’) we have to expect to deal in all phases of market cycles – both the up’s and the down’s – so I avoid talking about specific ‘today’ strategies in favor of the longer-term.

However, my son has said that I need to help people through the current financial ‘crisis’, so that’s what I am going to do over the next 3 days:

Today, advice for all those Making Money 101 …

Wherever your money is right now, keep it there!

That’s it, thanks for reading 😉

Oh, you want details?!

OK, here it comes:

– If you are currently in cash, stay in cash.

– If you are currently in stocks or mutual funds, stay in stocks/mutual funds.

– If you are currently in real-estate AND can afford the payments and are not ridiculously in credit card and other consumer debt, stay in real-estate.

Why?

Well, as this post explained, over the long run, you will achieve the market averages for all of these investment choices … only if you stick with them through thick and thin.

Right now qualifies as being about as ‘thin’ as anything in the last 100+ years 😉

If you run away during the bad times (now) and only buy in the good times (2006) you will be buying high and selling low: the exact opposite of what you should be doing …

… then, you will be lucky to make 3% or 4% annual returns – the same (or less) than if you had kept your money in cash!

So, for those MM101’ers out there, what are you doing with your assets while the financial world seems to be crumbling around you?

Be Sociable, Share!

7 thoughts on “Making Money 101? What to do today!

  1. AJC,

    Sage advice! I had a conversation similar to this with my father a couple weeks ago. He’s near retirement and in a balanced portfolio but is understandably concerned about his stock market holdings.

    My advice to him was the same as you state here. “Sit on your hands and stay the course!”

    A downside to the numerous information conduits that exist today (TV, Radio, Internet…) is that the “talking heads” who espouse doom and gloom can influence a wide audience. Given the down turn over the last year, I can think of nothing worse to do than SELL into the panic that exists.

    Talk about finalizing the destruction of wealth.

    This is likely one of those times that Mr. Market is incorrectly pricing companies. Have you noticed Warren Buffet has been buying lately?

    I’m with you 100% on this one AJC. Don’t toucha nothin!

    My investments are staying put and I’m continuing to add to my positions every two weeks.

    -Jeff
    Learn to manage money.

  2. @ Jeff – But, your Dad is prob. in Making Money 301 (wait for Part 3 of this 3 part ‘special’ later this week) … let me know if you still think my advice is ‘sage’ then 🙂

  3. Pingback: Making Money 201? Whoohoo … time to have some fun! « How to Make 7 Million in 7 Years™

  4. We’re recovering from unpaid medical leave that chewed up and spit out our savings, so my 401(k) is all we really have right now. Mostly in index funds / mutual funds. HOWEVER, I did just sign up for the company’s employee stock plan. My gut feeling is that my company’s stock will at least match the S&P, and I’d rather jump on board during thin than during thick. This will reduce the amount of cash that we have on hand, but the employee purchase plan includes a 10% discount on stock – so we’re taking a slight risk that we won’t need that cash in the next three months to get a 10% return. It’s

  5. @ Ethel – Buy low … nice. Just make sure that you understand your company’s long-term prospects now that BOTH your working life AND your retirement prospects will be, at least partially, in their hands …

  6. Argh, pressed submit too fast. That’s 10% gain, starting in 3 months, and I’ll probably be buying close to a low for at least the first quarter and probably for several quarters afterwards. I’m going to hold on to the stock unless we run into an emergency and need the cash.

    I feel very comfortable buying stock right now. I think it’s easier to buy at a low, especially since I have a flexible time frame for meeting my (first) number. If I have to put it off – oh, well. My second number is 30 years off and should be a breeze to meet.

  7. Wow, you replied fast . . . I do feel confident about my company’s future. Their stock has felt a good amount of pressure from the recession, but I don’t think the company itself is really feeling that pressure. Furthermore, the company is doing a lot of great things with their products and their marketing, and fixing some image-problems. I think the stock will really catch a lot of investor’s dollars as we come out of the recession, whenever that happens, and I like the idea of being set to benefit from that. Even if I have to wait for a couple of years first.

Leave a Reply