The Importance of Positive and Creative Stimulation

Positive ThinkingI usually talk about investments and things relating to financial matters, but I feel I need to take a step back and reiterate the importance of positive stimulation and nurturing creativity in people. I will begin by recalling an incident earlier today. I was re-reading one of my favorite books, “The Intelligent Investor” by Benjamin Graham when my two-year old niece came up and grabbed the book and ran off with it. I didn’t get mad, instead I laughed and began to chase after her. I grabbed her and she laughed uncontrollably and started  flipping through the book. It was then that my sister yelled at her and told her to give the book back to me. She told her, “Give the book back to Brandon, that’s a boring book, Brandon reads boring books.” I responded, “don’t tell her that!” ” I don’t read boring books. I read books that can help you. They are not boring.” And my sister responded with, ” She belongs to me and they’re boring to me, so I’ll tell her whatever I want.”

This is a most dangerous way of thinking and is infectious. My sister and I are exact opposites. She is a negative person and always talks negatively about others. I am determined, generally happy and some say I’m a incurable optimist. How is it that I’m a optimist and my sister a pessimist? We were raised in the same household by the same parents. The answer is what the individual focuses on. Your thoughts affect what you focus on and what you tend to focus your efforts on changes how you see the world. Change your thoughts, change your world.

To go back to the incident with my niece and sister, I really want to stress the importance of allowing your child, if you have one, or future child if you plan to later on in your life, the chance to explore and not shut them out of things, events, or experiences even if you don’t agree with it.  To tell a child not to touch a book because it is boring is a fallicy in the parents perception. As I said, my sister is generally a negetive person. Now I’m not saying she is a bad person, just that she generally has a negative perception of life and on people. What is boring to one may be exciting to another. What you focus on can literally change your world.

Napoleon Hill

Napoleon Hill

When I was twenty I found my true calling and it happened by pure accident. During the school year of 2011 I was staying with my aunt and uncle finishing my senior year of high school. While staying with them I would lift weights just about every other day. I made it a ritual to always watch motivational videos usually of powerlifter or bodybuilders but during one of the videos a man spoke in the background about the mind and how it had the potential to change your world. The “power of thoughts” I heard him say and I have always been obsessed with the body’s ability to change, grow stronger, how bones heal, how the brain grows neural pathways to learn new things. I was instantly intrigued by his words and I began to research and find out who it was. I asked in the comments but no one replied or knew. It took me three weeks but I finally found out it was Napoleon Hill.

I began to research all I could about Mr. Hill and came upon the book “Think and Grow Rich”. Not only did I ultimately purchase the book but I dug further and found out that the book had come into existence because of a meeting he had with the great industrialist and philanthropist Andrew Carnegie. I even researched and read Andrew Carnegie’s biography and learned he had started in poverty and through determination, having a sense of purpose and knowing what he wanted and going after it he was able to see and take dvantage of opportunities and rise to the top and become the richest man in the world!

It was then that I decided from here on out I would do the same. I began by believing that I too could become rich and as I believed it was not only a possibility but that it was inevitable my life began to change. I thought if I could become rich I could help my parents in their life and in their retirement. My parents have worked hard and my dad has gotten up at 4-5 am every morning for the past 20+ years to provide for us. He has done everything he can to help me and now its time for me to help him.

I began by reading everything I could about personal finance, from saving accounts to credit scores to mortgages and learning what interest rates are. Then I moved on to learning about investments, from what a brokerage account is, to stocks and bonds, mutual funds, compound interest, the tax laws and loopholes, to studying various businesses and sectors. I even taught myself basic accounting and how to read financial statements and how to make an investment portfolio by observing companies financial statements. I got so good that my portfolio started beating the market. I even go so good that my portfolio began to beat the portfolios of billionaires via the ibillionaire app. (Although to be fair they manage way more money than me).

thinkandgrowrich

Think and Grow Rich

The book highlights the importance of thoughts and how to transcend those thoughts into their physical equivalents. Mr. Hill speaks about the importance of having a positive mental attitude in any and ever aspect of life because it opens you up to opportunities to help you along the way to finding your passion and calling in life. The book has examples from real men who have used the powers of their minds to turn their passion and opportunities into businesses and have  become very successful in their lives. The book gives highlights and interviews from the likes of Henry Ford, Thomas Edison, William Wrigley Jr., Theodore Roosevelt, Charles M. Schwab and of course Andrew Carnegie among many others.

The Importance of Positive Thinking

Now you see it is important to have a positive demeanor. See things differently than others and your life will flourish. If you have a child or even if you don’t you may be around some, try and be a positive stimulus for them. Give them encouraging words and uplift them. Instead of putting them in a play pin by themselves, play and laugh with the child as it will help with healthy brain development. If a child is trying to do something on their own, let them be. Let the child explore and if they fall or fail at whatever task they are doing just be there to encourage them to try again. It will show them that success is not achieved all at once but through repetitive efforts. In addition, the more children and people in general,  do a task we get better at it because our neural pathways grow and shape to allow us to become more fluent at the task.

Another important thing to remember is to always give your child a choice. I remember growing up my dad wouldn’t just get us a toy or something we wanted, he would ask us to choose between two things. I believe it developed critical thinking and made me think carefully about my choice. But that’s what life is. Our lives are shaped by the choices we make. Our choices are shaped by our thinking and I choose to focus on the positive.

Positive Life

How to live a Positive and Fulfilling Life

  1. Think positive thoughts. If you go to work hating your job you either need to find a new one or change how you think about it. So many people hate going to work. Instead, you should be glad to work. Be grateful that you have a job. If you have a job, you are making money and if so then you also have money to spend which helps the economy. Not only are you helping the economy but your helping the business that employs you. Be grateful that you have a job so you can support your family and make a living.
  2. Quit watching so much television. Just stop. If you want to see a difference in your life set a goal and make a commitment then and there to work towards it. A better habit is reading. I am a vicarious reader. Don’t just read to be entertained. Read to help you in your field or a field of work you may want to go into or switch to. Become an acquirer of knowledge, it will open up opportunities for you.
  3. Set a goal. Know what it is you want and strive to reach it. Break up your goal into smaller more easily attainable goals. As you work towards it and have a positive attitude about it you will enjoy more of what life has to offer. You can start by writing a daily list of things to do but include a part that will help you toward your goal. Always strive to do something daily to get you closer to your goal. Whether it’s monetarily, physically, mentally, or relationship wise, always move forward.

Wrap Up

I hope what I said will sink in. If not, please re-reading this article. I do my best to help people and I want you to succeed in your life. Remember, show children that they can do anything if they set their minds to it. As Napoleon Hill said, “Whatever the mind can conceive and believe the mind can achieve. ” Have a positive outlook on life and help others along the way. Stimulate your mind to grow by reading, grow your knowledge base and others will start to see you as an expert in your field. Find joy in work, as you show enthusiasm opportunities will open up for you.

To your success,

Brandon Gomez

Stocks: What you should know before investing in stocks.

Wall StreetStocks. The word brings to mind images of Wall Street and bankers, wealth and power. But what exactly are stocks? You hear about them in the news or maybe you tune to a channel and see symbols run across the bottom of your screen during a commercial. You ask yourself, what are they talking about?

Most of the time when people hear about the “markets” on the news they are referring to the stock market. The stock market is a group of exchanges that list financial securities. To be accurate, the stock exchanges list other securities besides stocks, such as bonds, units and even derivatives. But before we get into all that lets focus on stocks.

Stocks are Businesses

So, you may be asking yourself, what are stocks? Stocks are financial securities that represent businesses. Every public company has stock listed on the stock exchanges. How do you find a company? If you want to look up a specific company you can just type in the ticker symbol in Google search.

For example, if you wanted to look up the stock price of Microsoft Corp you would type MSFT. Or if you wanted to know the price of Facebook’s stock it would be FB or Apple Inc, AAPL ect.

Stocks represent part ownership in a company. When you are buying stocks you are buying a piece of a business. In fact, stocks are also called shares. If you ever hear someone say they have shares in “xyz” it means they have stock in that company, its one in the same!

Apple Stock

Understanding the Basic Layout

The above picture is a snapshot of the stock app in the iphone. At first glance it may seem overwhelming but it is actually quite easy to understand once you learn the basic layout. We will start on the left side.

You will see a bunch of other ticker symbols, the price, and either red or green with a number inside the rectangular colored box. To  begin, it shows the Apple Inc ticker symbol, AAPL. Next is Apple’s stock price for that day, $665.18. Last is a negative 8.36, what this means is that Apple Inc stock has gone down $8.36 on that day. Below this is Apple’s stats.

“Open” is what Apple shares started at as soon as the stock exchanges opened for the day. The “high” and “low” show the highest and lowest price of the stock during the trading day or intraday if the exchanges have not closed yet. Below the high and low is “volume” which is the amount of shares that have traded hands from buyers to sellers throughout the day. (To the right is the volume average, the average volume level within the 52 week time frame.) Think of the volume as the amount of activity that a certain stock recieves. A higher trading volume means the stock is more liquid, which is good. Next, is the “P/E ratio”. The P/E stands for “price to earnings”, it is a basic way to measure how expensive or cheap a stock is. It basically says investors are willing to pay some multiple ” x” over the earnings of the business.

For Apple, the P/E ratio is 15.63 so investors are willing to pay about 16 times earnings or $16 for every dollar of Apple’s earnings. Because this is a ratio you can also tell what the earnings are if you reverse the equation. You can take Apple’s $665.18 price and divide it by the 15.63 to arrive at 42.55, it’s earnings per share.

On the right is market cap or market capitalization. This is what the company’s market value is, the share price multipled by all shares outstanding. It is what the markets assessment is of the company at any given time. As mentioned earlier, stock prices fluctuate throughout the day but over the long term it will reflect the true worth of the business. Notice how I said the market cap is not what the company is worth but what the market thinks it is worth. This is because sometimes the market misprices shares of a company, meaning it can trade at a discount or a premium. This is what Warren Buffet calls value investing, he finds companies who’s stock trades at a discount to its true value and buys them up before the market realizes and corrects the imbalance. But over the long term the true value will be reflected in the stock price.

The 52 week “high” and “low” shows the lowest and highest price of the stock during the 52 week time period. The “yield” is the dividend of the stock. A dividend is a payout to the stockholders of a company in the form of cash. Not all companies will have a dividend, but if it does you will have another form of compensation.  If you own stocks there are basically two ways to generate money or wealth. One is the price appreciation of the shares and the other is the dividend or yield. Keep in mind that not all companies give a dividend. As a stockholder you may like receiving money for holding on to your shares but there is a drawback. As I said a dividend is a payment to stockholders taken from company profits, but in doing so it means there is less money for the company to use to fund projects, to fund research and development or for expansion which means slower growth. However, if you are looking for income with price appreciation this is an option.

Stocks Power: Compound Interest

As I mentioned, there are two ways to generate money or wealth. Although they sound the same they are different. If you want money, buy dividend paying stocks. A company that issues a dividend will payout to the stockholders so you will receive money in your brokerage account every pay period.

Let’s look at Apple Inc again. Apple has a yield of 1.60% so with a stock price of $665.18 the dividend is $10.64 per year. Keep in mind that the dividend of most companies is paid out every quarter or four times a year. However, some may pay their dividend every 6 months or even monthly, it just depends on management.

However, the real power of stocks comes not from the dividend but from price appreciation. Although income investors may disagree, ideally you want most of your investment gains in the form of price appreciation. This is because over the years compounding takes effect. Albert Einstein once said, “Compound interest is the eighth wonder of the world. He who understands it, earns it…he who doesn’t… pays it.”

I want to help you become the person who understands it. Most people understand that the interest rate is the cost to borrow money but the interest rate can also be thought of as the rate of return on an investment. In today’s market the interest rate on savings accounts are at zero or close to it. In other words cash investments generate 0 or negative returns. Most bonds offer a 3-4% return but with the fed about to raise rates bonds will likely lose value. The best case is for stocks which have generated an average 6-7% over the past 50 years. Think about this that 7% return over 50 years will turn a mere $10,000 investment into almost $295,000! And thats with a one-time investment of $10,000. Imagine when you save and put more into investments! This is due to the effect of compound interest. Compound interest is when money is generated from interest. Instead of earning money off of your principal balance your money will start to earn money off of the new balance.

If you had $10,000 and it earned simple interest, it would only earn money on the principal balance and nothing more. Using the same example the $10,000 with a 7% return would only grow to be worth $45,000 after 50 years. That’s a $250,000 difference with continuous compound interest. That’s the power of stock investing. As long as you leave your investments alone, reinvest your returns and put more savings into investing you can really ramp up your retirement portfolio. This is why I urge everyone my age, millennials and the younger generations to start investing as soon as possible. The earlier you start and the longer you keep at it, the more money that will be earned in the later years of investing. Start now and watch your wealth grow over the years.

The Basics of Investing

Investing 101Now that we’ve covered how to develop the right frame of mind that will lead to success and how to save and budget your money lets talk about investing. Hopefully you have implemented a good budget and keep track of your expenses as well as your income sources. If you only have one source of income right now that’s OK. Investing is the secret driver to financial success.

It doesn’t matter how many jobs you have or how much you make a year. You can’t retire on working wages alone. This is especially true if you are making minimum wage or sub par wages or spending too much on non essentials. The way to financial freedom is to set up a system that pays you when you’re not working. What I’m talking about is residual or passive income. The best way to achieve this is to put money to work for you with investments.

There are several types of investments or investment vehicles:

  1. Stocks
  2. Bonds
  3. Real Estate
  4. Personal Side Ventures

I’m not going to get too much into detail with this post. This is just a basic rundown of the different kinds of investments there are so you can be aware of them. If you want further explanation or in-depth view stay tuned in for my upcoming posts.

Investing in StocksStock news

The main concept you must understand is that stocks are parts of a business. When you are buying stock or a share, you are buying a piece of a business. Many people trade stocks like they do with their iphones but I believe the best way to invest in Stocks is to take ownership. Think of yourself as a business owner instead of a trader.

Stocks can offer extremely high returns but be wary. If you do not know what you are doing you can lose out on a lot as well. Stocks tend to fluctuate in value rapidly but for the long term investor it can be worth your while. Please make sure you do your due diligence in researching on your own before you dive into investing in Stocks.

In any case, stocks can be very useful and a powerful weapon in your financial arsenal for the tax advantages as well as the effect of compound interest.

Investing in BondsI.O.U. paper

Bonds are a bit different from Stocks in that they don’t represent a share of a business. Instead, bonds are debt investments. A bond is basically an I.O.U. in which you give or lend money to a city, state or country.  In exchange for lending the money the entity agrees to pay a certain interest rate to you.The interest rate is basically a specific payout of your principal balance. Bonds are considered safer investments than stocks because the principal is preserved and you get a nice interest payout typically every six months.

To go with an example, say you bought a bond with a principal of $1,000. Now, lets say the bond has a interest rate of 3%, what that means is you will receive $30 a year or $15 every six months for the duration of the bond until the maturity date.  This leads to the next point, the maturity date. The maturity date is basically the life of the bond. Bonds can range in time durations from 1 to 30 years or longer. Once the bond reaches its maturity date the issurer of the bond will repay you the principal amount.

Investing in Real Estate

House sold sign

House sold sign

Now onto the next subject, ready?

Most people have probably heard stories of the succeses real estate investing. In fact, real estate is probably what most think of when they hear of people making investments. Well, real estate is just another thing to invest in!

But what most people are not aware of is the scope of real estate. To say your an investor in Real Estate is not specific enough. There are lots of ways to invest in real estate. Some of the more common ways to invest are flipping houses, owning rental properties or even owning reits.

Flipping houses is a far more tedious and laborious task as you have to buy a property for a good price, renovate it, a lot of times this means hiring contractors to fix up the property so you can resell the property later for a higher price than you paid. Keep in mind though that this way of investing requires a lot of time and money. You can expect most flips to take a few months and if your lucky, several weeks if you hire a lot of labor. However, this can be lucrative if you have the money and know the demographics well.

The other is owning rental property. This one is pretty self explanatory, you buy a property, whether that be a home or apartment building. Then you would rent it out to a person interested in the property. Just make sure that whatever rent you charge them is more than enough to cover your mortgage as well as basic repairs as they arise. Also be sure you know the area well because you want to be able to find an area with high occupancy rates. If not, you could buy a property only to end up paying the property taxes and upkeep, unable to find someone to rent to.

The third is more simpler and can be used by anybody looking into real estate. If you are short on money or don’t have the time to find and renovate houses reits could be your solution.

REIT stands for real estate investment trust. A real estate investment trust is a company that buys real estate assets things like commercial or apartment buildings and is listed on the public stock exchanges for people to buy “shares”. I put quotation marks because for reits they are called units. But reits are bought and sold just like publicly traded stock on the exchanges.

So if you are interested in owning real estate but don’t have the large funds or time to do so reits could be right up your alley. A good way to think of reits is a high yielding stock. Reits tend to have high dividend yeilds so it can become a good source of income.

Personal Side Ventures

The last way to make money is hustling on the side. Investing doesn’t just have to be about stocks, bonds or other financial securities. You could be investing your time into a side project that has the potential to generate money for you. In fact, if you are passionate about a particular subject you could take that idea and form a viable business plan and start earning another stream of income for yourself.

There are a lot of ways to make money beside your main job. You could sell something on the side or online. If your passionate and knowledgeable about a particular subject you could start a blog and monetize it to generate money via ads or affiliate links. Or you could even start a small business with a friend whom you trust and with the added benefit of not going it alone, you could pull resources together and have the business flourish to enable you to quit your day job if you wanted to do so.

Conclusion

There are many ways to make money through investments. If fact, the scope is so large I don’t know why more people don’t do it. There are lots of ways to make money outside your main job and no one is going to look after your well being more so than yourself. This is your life and you deserve financial freedom to do what you want in this life. Start today, make a plan and start having your money generate money for you!