Categories
Investing

How You Can Start Investing Now, Before the Next Year Starts

Even though it’s almost the end of the year, it’s never to late to start investing!
If you’d like to start investing this year, there are a few things to keep in mind. Depending on how involved you want to get, investing can take up a lot of time or very little time. It’s easy to start investing, especially if your company offers a 401(k). If you want to ‘go big’, you can get as involved in investing as you want. There’s plenty to read out there about investing.
Consider your age, too. The younger you are, the more aggressive you probably want to be when you start investing. People in their twenties and thirties have many years to let their portfolios grow and change. They can weather some of the typical market ups and downs that happen over decades.
If you want to start investing, here are ways you can get started now:

Contributing to Your 401(k)

Many employers offer some type of investment plan for their employees. Most offer a variation of the 401(k). Public school employees and some who work at non-profits may have 403(b) plans. They are similar to 401(k) plans. Either of these plans are great for people who want to start investing but don’t know how.
The best part about 401(k)s is that some employers offer matches! This means if you invest in your company’s 401(k), your employer will match your contribution up to a certain point. That’s free money!
Contribution limits to a 401(k) are high: you can save $18,000 in your 401(k). The federal government’s Thrift Savings Plan also falls under this contribution cap.
Even if you can’t afford to contribute the maximum to your 401(k) this year, consider investing enough to get your employer’s match. Not every employer offers this perk, so check with your Human Resources department to make sure it’s an option. If it isn’t, consider some of the additional investing resources below.
For the self-employed and freelancers out there, the IRS offers several investment and retirement options for you, too! Check out the Simplified Employee Pension (SEP) plan here, as well as other options for self-employed people to start investing.
Find your investing style with this investing compatibility quiz.

Start Investing in an IRA

Traditional IRAs and Roth IRAs are extremely popular investment vehicles, particularly for those whose companies don’t offer a 401(k) or match. IRA stands for Individual Retirement Account. IRAs are easier to max out, as the contribution limit is $5,500 per person.
The main difference between a Traditional and Roth IRA is when you’re taxed – and yes, you will be taxed. With a Traditional IRA, you don’t pay taxes up front, but you do pay taxes when you take out your money at 59 1/2 years old. Note: you don’t have to start withdrawing that early, but you must start withdrawing at age 70 1/2 or else you will face a penalty. One benefit to a Traditional IRA is that by contributing to it now, you reduce your taxable income immediately.
A Roth IRA, on the other hand, does not reduce your taxable income. You invest in a Roth IRA with after tax income. However, when you withdraw from your Roth IRA, at 59 1/2 years old or older, you won’t pay any taxes on the amounts you withdraw. If you expect to be in a higher tax bracket when you’re older, a Roth IRA makes sense. A Roth IRA also makes sense for those who owe little to no money at tax time and don’t need to reduce their taxable income now.
There are some limitations to investing in both a Traditional and Roth IRA. Visit the IRS website on IRAs to determine if they’re right for you.
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Start Investing in Your Health Savings Account

Health Savings Accounts (HSAs) are quite possibly my favorite investment vehicle. I recently got started investing in my HSA. It’s a great way for those who want to start investing to begin and not be overwhelmed.
In order to get an HSA, you must be enrolled in a high deductible health plan (HDHP). HDHPs do have higher deductibles than typical insurance plans, so it’s something to keep in mind if you’re considering an HSA. For example, depending on the type of HDHP offered by your employer or through self-employment, your deductible could be $1,500. This means you have to spend $1,500 out of your own pocket before your health insurance kicks in.
Some people have the funds to cover that deductible from their emergency savings. If, on the other hand, you wouldn’t be able to cover your deductible amount, you may want to reconsider an HDHP for now.
If you choose an HDHP plan with an HSA, you’ll quickly find out how useful and awesome Health Savings Accounts can be. With an HSA, you can pay for many medical expenses, found here, from your HSA. Contributions are also tax free, meaning they come from pre-tax income and reduce your taxable income.
The maximum you can contribute to your HSA, as a single person, is $3,350. If you have family coverage, you can contribute up to $6,650 per year. You can also invest your HSA contributions and take your HSA with you, no matter if you switch jobs or quit to start your own business. Your HSA, and its investment profits, are all yours!
As long as you spend your HSA funds on qualified medical expenses, you won’t be taxed, making this investment one of the best out there. Medical expenses continue to increase every year, and you’re likely to find your HSA will come in handy as you spend money on regular medical expenses.
With all of these options, you’re sure to find something that interests you to start investing now. You can contribute to all of these accounts right now, before 2016 even starts. If you don’t yet have an HSA account, you will have to wait to enroll in an HDHP, but you can plan for it until then!
Want to start investing now, but not sure where to start? Find your investing style with this investing compatibility quiz.

Originally posted 2015-12-09 10:00:21.

Categories
Budgeting & Saving

30+ Things Frugal People Don’t Do

Frugality is a lifestyle. Spending less so you can live more appeals to a lot of people. Practicing frugality often gets referred to as being cheap but there are distinct differences between the two.

Being frugal involves optimizing what you have by being creative. You want to establish a lifestyle that doesn’t revolve around spending and obtaining more things to be happy. Frugal people value experiences over things but don’t sacrifice the health or welfare of themselves or their family just to save a few dollars.

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Here are 30+ things frugal people usually don’t do.

1. Fail to Implement a Budget

Budgeting accurately helps keep your finances in order. This allows you to control where your money is going. Frugal people remain frugal and spend less because they implement a budget in some shape or form to remain on track.

2. Spend Money Every Single Day

There are some days when you don’t have to spend a dime. Having a ‘no spend day’ or a ‘no spend weekend’ is a financial challenge that requires creativity and a clear focus. But the more you do it, the easier it will become.

3. Choose Wants over Needs

Frugality helps put your needs before your wants by prioritizing what is most important to you. It’s also important to be content with what you have. Greed and frugality do not mix well.

4. Have Enormous Cable Bills

Cable doesn’t make sense from a financial standpoint. If you don’t even have time to watch television nor the money to fork over for a rising bill each month, try going without cable and using a cheaper alternative to watch shows and movies. Consider Netflix ($8/month), Hulu ($8/month) or Amazon Prime (with free two-day shipping on items for $99/year).

5. Waste Food

Wasting food is something everyone should try to avoid. Food is a privilege in some countries. It’s important to be mindful of what you eat and the food you buy so you can avoid waste. Throwing away food is almost identical to throwing money in the garbage. Frugal people eat all of what they buy.

6. Make Impulse Purchases Based on Emotion

Frugal people try to keep their emotions in check. They realize that retailers tend to create a sense of urgency with their products and appeal to consumers’ emotions in order to increase sales. Asking yourself if you truly need the item can bring your shopping impulses to a halt.

7. Buy Brand Name Items and Clothes to Make an Impression

The idea of buying expensive name brand and designer clothes really serves no purpose in the life of a frugal person. Clothes that look nice, fit well, and are on sale (bonus) will suffice. Why spend money over and over again if you can buy timeless?

8. Shop as a Form of Entertainment

Shopping as a habit is expensive and is usually done to fill a void. Frugal people try not to associate spending money with fun and entertainment. Frugal consumers find more enjoyable ways to lighten their mood and have fun.

9. Drive Cars They Can’t Afford

Driving a car that you can barely afford to make payments on is not a wise decision and will often leave you drowning in debt. Frugal people practically despise debt and some even drive older, more economical cars to avoid going into debt over a depreciating asset.

10. Ignore Vehicle Maintenance

Failing to maintain your vehicle and schedule timely repairs can result in having to pay thousands of dollars to fix big things later on. The frugal way to keep your car running well for longer is not to avoid maintenance and repairs, but rather budget for these expenses ahead of time. This way, you can take care of them quickly without causing financial strain.

11. Go the Most Convenient Route

Convenient practices like ordering dinner to avoid cooking it, paying for valet parking, or driving when you can walk or bike will eventually start to add up and deplete your funds. This is why frugal people try to avoid ‘convenient’ money traps.

12. Avoid a Great Deal

Frugal people don’t sit around all day staring at their bank accounts and thinking of ways to avoid spending any money. They know how to spend. They just wait for a great deal and snatch it up as fast as possible!

13. Use Credit Cards To Inflate Their Lifestyle

Using credit cards to spend more than you can afford will lead to greater money problems. You can use credit cards frugally by optimizing them for points, spending on items you would normally purchase, and paying off the balance in full each month.

14. Ignore Giveaways and Freebies

Whether you consider yourself a frugal person or not, we all should appreciate an occasional freebie or giveaway. It only takes a few moments to enter a giveaway or respond to an advertised freebie offer. It’s typically a really good return on your invested time.

15. Run the AC or Heat When It’s Unnecessary

Frugal people are all about conserving energy and keeping utility costs low. They know that paying attention to the thermostat is worthwhile. There are several things you can do to avoid running the heat too soon and running your air conditioning too much.

16. Spend a lot on Gym Memberships

A gym membership can be a great source of motivation to help you get fit. However, a lot of people don’t fully utilize their gym membership given the amount of money they spend on it each month. On the low end, a gym membership generally costs around $58 or $696 per year. According to recent studies, about 67% of people with gym memberships don’t even use them. If you don’t go to the gym at least two or three times per week all year round you could be wasting quite a bit of money.

Whether you want a gym membership or not is your preference. But it would be wise to avoid a costly one and stick to free and natural workouts that you can do out in nature or in your home. There are plenty of mobile apps and YouTube videos to utilize. Used and affordable gym equipment is usually plentiful any time of year.

17. Believe Entertainment Is Expensive

A big part of being frugal is the ability to override the myth that you need to spend lots of money on entertainment. There are tons of free and low cost ways to entertain yourself and your family. Look around your neighborhood, research events and take advantage of deals.

18. Pass up a Thrift Store or Garage Sale

Garage sales and thrift shops are thrilling for the frugal shopper. Garage sale and consignment shop items that are in good condition beat department store prices every time.

19. Try to Overcompensate by Giving out Elaborate Gifts

This ties into the idea of trying to impress others with name brands. Sometimes it’s best to make gifts and provide the recipient with something they need instead of trying to impress them with a popular brand.

20. Purchase Work Lunches Each Day

When you work for an employer (especially in an office) lunch time can be a much anticipated release or break from the work day. If you go out and buy lunch each day though, you could easily waste more than $1,000 per year. Frugal people choose not to purchase work lunches each day. They bring a lunch from home to save that $1,000 for a vacation, home repair, or a memorable experience with loved ones.

21. Buy Snacks at the Movie Theatre, or Meals at Carnivals and Fairs

It’s not about being cheap. Who really wants to spend $5 on a soft drink, $4 on a box of candy and $7 on a bowl of popcorn that might be fresh? If you don’t want to avoid going broke just by snacking, it’s best to eat a large meal before you go out and drink water if you need a beverage. This allows you to focus more on the experience rather than the overpriced, subpar food.

22. Take Luxurious Vacations Without Reward Points

Many frugal people still go on vacations. Dropping $5,000-$10,000 on a vacation each year though is often not in the question. Instead of charging vacation expenses to your credit card and returning home with debt, you can churn credit cards and use the reward points and cashback to fund your travels.

23. Ignore Their Health Needs

Maintaining an adequate amount of medical coverage is very important, no matter the cost. Eating healthy foods and going to regular check-ups can help prevent costly medical problems in the future.

24. Spend Copious Amounts of Money on Summer Music Festivals

Frugal people might wonder why someone would pay hundreds of dollars to meet up with friends, camp outside and listen to music for a weekend. That’s because there are tons of free music festivals happening all over. Although frugal people may use credit card reward points to help pay for tickets to an occasional concert.

25. Buy Brand New Electronics Each Year

Keeping up with the newest versions of electronics is exhausting, not to mention financially draining. Frugal people try to keep up with their electronics for a few years at least instead of buying something new the moment it comes out.

26. Throw Away Broken or Old Electronics

When electronics break, instead of tossing them out and creating more waste, frugal people may try to fix up and sell older electronics for cheap or sell their parts if the item is broken. A broken iPhone is still worth a lot of money.

27. Put Off Investing

Putting off investing can put you in a rough financial situation when you get older. Some people who are nearing retirement age can’t even leave work because they failed to invest and save early. Frugal people love setting money aside for their future.

28. Buy Coffee Every Morning

Drinking coffee every day is normal. But buying it each day from a café or coffee shop is a bit much for frugal people. They usually make coffee at home and buy an occasional drink at Starbucks every now and then. This saves big money.

29. Pass up a Side Hustle

People who live frugally are always looking for more ways to earn money easily on the side. This is why it’s hard for a frugal person to pass up an opportunity to use their skills to earn extra money on the weekend, help a friend or start a side business.

30. Go on a Road Trip without Bringing Food

Road trips are very fun and they’re the perfect frugal getaway for a family or group of friends. To make the trip even more frugal and save money to use for attractions and other activities, bringing food along is a must. It’s also easier than stopping the car for a snack.

31. Compromise the Safety and Welfare of Others

Frugal people don’t opt to save money at all costs; especially when it comes to the expense of other people’s health or safety. They are not like the people you see on shows like Extreme Cheapskates. Since frugal people place needs and necessities above wants, it allows them to live a life that doesn’t compromise the safety and welfare of others.

32. Care What People Think about Them

Frugal people are judged a lot and sometimes negatively referred to as ‘cheapskates’ or ‘penny pinchers’. After you’ve been frugal for a while and you see the positive affects your choices have had on your lifestyle and your bank account, it won’t matter what other people think. Frugal people always have the last laugh. While others think they are cheap or poor for bringing lunch to work each day or living a different, simpler life, they are busy saving, investing, and living a fulfilling life.

Do you consider yourself frugal? Can you think of anything else that frugal people might not do?

Originally posted 2015-11-09 10:00:15.

Categories
Investing

Simple Steps to Become a Millionaire

“I want to be a millionaire, so freaking bad.” You might have been thinking it, but Bruno Mars sang it first. Many people strive to become a millionaire. In fact, there is even a day dedicated to those people. This year Be a Millionaire Day is May 20th. On this day we answer the question, “Who wants to be a millionaire?” with a resounding shout, “Me! I do!” While it may seem difficult to save a million dollars, there are a few tips you can use today to make it to millionaire status sooner rather than later.

Steps to Become a Millionaire

Start a Savings Account

If you plan to reach the Millionaire’s Club by saving money, then you must first open a savings account. In order to accumulate one million dollars within 30 years, you will need to save around $750 per month at a 4% interest rate.

Use this calculator to determine your required savings rate.

Lately, interest rates have been pretty low on traditional savings accounts. Instead of simply shopping at your local bank, try an online bank. Then, look into a certificate of deposit. A certificate of deposit or CD is a way for your money to earn more. CD’s sometimes have higher rates than traditional savings accounts. A Discover Certificate of Deposit is great option with flexible terms from 3 months to 10 years and you can open your FDIC insured CD account with as little as $2,500.

Begin Investing

Let your money work for you. Investing your dollars gives each dollar a job and that job is to earn more money. When you invest, each dollar has the ability to earn a return. If you decide to invest by purchasing 100 shares of stock in a company, and those shares rise in value, your money just earned more money!

However, you have to be careful because if those shares drop in value, then so does your investment and you could lose money. Investing is not as safe as saving in an FDIC insured savings account. However, over the last ten years, investments in the broad market index, as measured by the S&P 500 have averaged 8.3% per year.

Mind the Gap

The gap separates a potential millionaire from a person that will never make it. What’s the gap? The gap is the difference between how much you earn and how much you spend. That unspent portion is available for saving and investing. Growing the gap will allow you to accelerate your millionaire status. How large should that gap be? Well that depends on how soon you want to become a millionaire. A larger gap means faster millionaire status.

“The amount of money you have has got nothing to do with what you earn… people earning a million dollars a year can have no money and… People earning $35,000 a year can be quite well off. It’s not what you earn, it’s what you spend.” -Paul Clitheroe

Here are a few examples.

Patrick and Jenny are 25 and both earn $50,000 per year. After taxes they each earn a take home pay of $3,000 per month.

Patrick keeps his expenses low and saves $1,500 per month or 50% of his take home pay.

Jenny enjoys shopping, dinners out, traveling, and attending concerts. She saves $300 per month or 10% of her take home pay.

In ten years, Patrick has saved a total of $220,876 with an interest rate of 4%. If he maintains the same saving rate he will become a millionaire by the time he is 55.

In the same ten years, Jenny has saved a $44,176 at a rate of 4%. If Jenny lives long enough, she will become a millionaire by the time she is 88.

Ultimately, becoming a millionaire is a simple process that requires diligence and persistence. Ready to become a millionaire? Open a savings account, begin investing, and create a budget that allows you to spend less and save more.

This post was created as part of the Discover partnership program.

Originally posted 2015-05-20 10:00:28.

Categories
Investing

December Investing Challenge Results and 2015 Challenge Begins!

It’s January! And time for the final update on my Grow Your Dough Throwdown portfolio. You may remember that at the beginning of 2014 I entered a challenge to grow $1,000 in the markets. I decided to take a combined approach using passive and active methods.

For my active portfolio, I invested $400 with Loyal3. For my passive portfolio, I invested $600 with Betterment. Here is my post that details the stocks that I purchased.

Even though it is not an even split, I decided to call my portfolio the Gemini Portfolio. It’s a little of this and a little of that. Sometimes balanced and sometimes not as we Gemini’s can be.

The passive side lagged a bit during the year because I had some bond funds in the ETF portfolio. After I updated my allocation, the passive portfolio started keeping up with the markets nicely.

The active side performed poorly for the first few months of the year but then it started kicking butt and taking names! Choosing the right individual stocks helped boost my portfolio performance and I finished the year up 9.71%. If you are an email list subscriber then you know what my annual return goals are. And I’m happy to say that in 2014 I made it!

December & Year-End Portfolio Results

December Investing Challenge Results- Gemini Portfolio | Young Finances

What’s Next?

Up next is the 2015 Grow Your Dough Throwdown! This year I’m adding a $500 dollar portfolio with Motif Investing. I also moved all of the cash from last year into my Loyal3 account and I purchased a few more stocks.

What is Motif?

Motif Investing is an online brokerage firm offering an intuitive platform that empowers individuals to invest in real-world ideas through motifs. A motif is a carefully researched and balanced portfolio of up to 30 stocks reflecting a specific idea or trend. Examples include Renter Nation, Caffeine Fix and Seven Deadly Sins. Motifs are fully customizable—you can add and delete stocks, and change their weightings. You’ll pay just one low commission – and no management fees. And, you’ll get important diversification both within a motif and across motifs.

Motif Investing offers brokerage accounts as well as no-fee retirement accounts, including Roth IRAs, Traditional IRAs, and Rollover IRAs.

Motif Investing also provides a social network where its members share and discuss investing ideas. Ask for feedback. Find out what other investors have to say about the motifs that may interest you. You can invite people you trust most to join your own investing circle. Share only what you want, with the people you’ve chosen, or share nothing at all. It’s all up to you. And you’re always in control.

Investing Challenge Tracker

To make it easier to keep up with all of the challengers and our portfolio performance, the guys at Motif created a handy widget that will display the leaders. A quick but VERY IMPORTANT note. All investing involves risk and past performance is no indicator of future results. As I always say DO YOUR RESEARCH before investing.

Grow Your Dough 2.0 - Motif Leaderboard | Young Finances

Use this link to open a Betterment account and start investing today.

Disclaimer

All investing involves risk, past performance is not indicative of future results. There is no guarantee that I will make money. I could lose everything. When mentioning how I plan to invest, it should not be taken as a recommendation or investing advice. You should consult your personal financial advisor to determine what type of investing suits your personal situation and risk tolerance level. There can be substantial risk of loss in trading stocks. You should, therefore, carefully consider whether such trading is suitable for you in light of your financial condition. All transactions in the financial markets are risky. No information I present is intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor.

S&P and S&P 500 are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”), a part of McGraw Hill Financial. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). Past performance of an index is not a guarantee of future results.

It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments based on that index.

Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise.

Originally posted 2015-01-13 06:00:49.

Categories
Investing

The 60/40 Passive Active Investing Portfolio

It’s time to get invested!

Read this post for details on the Grow Your Dough Throwdown. In short summary, I am competing with several other bloggers in a challenge to invest and grow one thousand dollars in an investing portfolio.

In this post I will explain my specific investing decisions.

The 60/40 Investing Plan

I plan to invest 60% passively and 40% actively. Passive investing simply uses index funds to mimic the return of an index. Active investing is the process of choosing individual investments, stocks in this case, in order to beat the return of an index.

I plan to invest $600 dollars with Betterment. I’ve mentioned before that Betterment is my preferred ETF broker. With one easy step, I deposit funds with them and they invest in a diversified index portfolio on my behalf.

I think it is the easiest way for young adults to start investing.

How to Add a New Goal in Betterment

I already have an account with Betterment and I detailed the account opening process here. For this challenge, I will be adding a new goal in my current account.

In a few short steps, I added the Investing Portfolio Throwdown goal.

Betterment Goal Setup1

Betterment Goal Setup2

Betterment Goal Setup3

You’ll notice that they recommended a pretty conservative portfolio allocation for me. Because I mentioned that I would need the funds in 1 year, the allocation is skewed more towards bonds; which are typically used to minimize volatility and therefore risk of lost funds. (Although bonds are thought to be less risky, there is still a chance of losing funds.)

However, I would personally prefer to experience the returns, highs and lows of a more stock based portfolio, so I changed the allocation manually.

Betterment Allocation Change

On Tuesday, December 31st, I deposited $600 dollars into this account. The deposit process takes 1-2 business days so the funds were in my account and invested by January 2nd on the first trading day of the year.

Betterment Portfolio Allocation

For this challenge, I chose a 80/20 split of stocks and bonds. I will have the following Exchange Traded Funds in my account.

Stock ETFs

  • VTI: US Total Stock Market 14.6%
  • IVE: US Large-Cap Value 14.6%
  • IWS: US Mid-Cap Value 4.7%
  • IWN: US Small-Cap Value 4.1%
  • VEA: Developed Markets 33.9%
  • VWO: Emerging Markets 8.3%

Bond ETFs

  • SHV: Short-Term Treasuries 0%
  • VTIP: Inflation-Protected Bonds 0%
  • AGG: US High Quality Bonds 6.6%
  • LQD: US Corporate Bonds 3.4%
  • BNDX: International Bonds 7%
  • VWOB: Emerging Markets Bonds 3%

These percentages should stay relatively constant. Betterment handles the rebalancing to maintain your allocation decision. This means that they will sell and buy so that the account continues to be 80% stocks and 20% bonds.

They also reinvest dividends as they come into the account. This account should do as well as the broad market. No one really knows what the markets will do and a passive investing strategy, like this one, is expected to perform in line with the market.

Investing in Stocks with Loyal3

Loyal3

I plan to invest $400 dollars with Loyal3. Investing with Loyal3 is a new experience for me. This broker allows you to invest as little as ten dollars in companies that you know and love. There are a limited selection of companies so I plan to choose from the options available to me.

Loyal3 Browse Stocks2

Loyal3 Browse Stocks

Loyal3 Stock Choices

Creating a Portfolio With Morningstar.com

To narrow down this list, I went to Morningstar.com and created a portfolio with the full list of options. I have to be honest, it took me a few hours to decide how I wanted to invest.

Was I looking for good long term names or did I want names that would allow me to win the challenge over the next year?

In the end, I decided to create a dividend portfolio that pays monthly, with names in 4 of the biggest sectors in the S&P 500; Consumer Discretionary, Consumer Staples, Information Technology and Financials. I used this site to find constituents, or members, of the S&P 500.

SP500 Sector Allocation

It would be nice if these names helped me win the challenge over the next year, but if not, they are still names that I would be willing to own long term.

Here are the companies I chose.

Consumer Discretionary
LB: Limited Brands, pays dividends in Feb, June, Aug, Nov
YUM: YUM Brands, pays dividends in  Jan, Apr, Jul, Oct
AMZN: Amazon.com
BUD: Anheuser Busch

Consumer Staples
MDLZ: Mondelez International Inc., pays dividends in Mar, June, Sep, Dec

Information Technology
AAPL: Apple Inc., pays dividends in  Feb, May, Aug, Nov
FB: Facebook, Inc.

Financials
BRK.B: Berkshire Hathaway

I’m going to split the $400 dollars evenly across the 8 names. On December 24th and 31st, I deposited $200 in the account. The funds typically take 1-3 business days to show up in your account. On Thursday January 2nd, I placed my purchase orders for all 8 stocks but at $25 dollars each. The $200 that I deposited on the 31st was available for use on January 3rd but I didn’t invest the remainder until the 9th.

Loyal3 places orders in batches once per day. My purchases were executed on January 3rd and January 10th.

buy apple stock with Loyal3

This is the process to buy stock with Loyal3.

How to Invest in Facebook Stock

Step 1: Select an investment amount

select amount to invest in Facebook

Step 2: Click to confirm

click to invest in FB stock

Step 3: That’s it!purchase Facebook IPO

Using the free Instant X-Ray tool available via Morningstar, this is how my individual stock portfolio looks.

Instant X-Ray Morningstar Portfolio

Morningstar X-Ray Portfolio Stats

Based on the stocks that I chose, my portfolio is weighted towards domestic stocks and the style skews towards growth.

Morningstar X-Ray Portfolio Allocation

On a final note, my portfolio is positioned to be more sensitive to the economy’s changes. A portfolio with cyclical names, tend to be more volatile. This is because when the economy is not doing so well, in general, people tend to cut back on unnecessary or discretionary spending. Then when things are good again, people tend to spend more.

This affects sectors like Consumer Discretionary and Information Technology especially. You may be less likely to buy expensive beers or go out to eat as much when you have less certainty over whether or not you will be paid.

Sectors such as Consumer Staples are less sensitive to economic changes.

side eye emoji

You will always need toilet paper, right?

Right??

Morningstar X-Ray Portfolio Sensitivity

Now that I have my investing portfolio, I don’t plan on making many changes. In the challenge we are allowed to buy and sell as much as we like. I prefer to see investing as a long term strategy where you buy stock in companies that you like and that are expected to grow over the long term.

What do you think of my portfolio? Are you interested in joining the challenge? Do you have questions about investing? I’m all ears!

See the investing portfolio challenge results here.

Use this link to open a Betterment account and get $25 dollars added to your account.

Disclaimer

Just because I chose these stocks, doesn’t mean that I am recommending them for purchase.

All investing involves risk, past performance is not indicative of future results. There is no guarantee that I will make money. I could lose everything. When mentioning how I plan to invest, it should not be taken as a recommendation or investing advice. You should consult your personal financial advisor to determine what type of investing suits your personal situation and risk tolerance level. There can be substantial risk of loss in trading stocks. You should, therefore, carefully consider whether such trading is suitable for you in light of your financial condition. All transactions in the financial markets are risky. No information I present is intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor.

S&P and S&P 500 are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”), a part of McGraw Hill Financial. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). Past performance of an index is not a guarantee of future results.

It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments based on that index.

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Originally posted 2014-01-10 06:00:38.