Jason Hartman Foundation

One of the fundamental decisions a young investor must make is whether they are a trader or an investor. Most people tend toward one or the other, and choosing one certainly doesn’t preclude dabbling in the other, but it’s good to know which side you primarily come down on. The difference is simple.

A trader plans a strategy around short term market fluctuations. He might jump in and out of positions several times (or several dozen times) each day. The trader believes there is money to be made in the ebb and flow of the market day. Most traders prefer to be flat at the closing bell, which means they don’t hold open positions over night.

The investor looks at longer term market direction – months, years, decades – and employs a buy and hold strategy that, like the trader, takes advantage of a trend. The difference being that this trend takes much longer to play out. The investor does not concern himself with the daily hiccups that pull prices back and forth. They prefer to step back, look for quality positions, and add to them regularly.

One could extend this analogy to real estate. A trader would be a person who buys undervalued houses and flips them quickly for profit. An investor is one who acquires a property and holds onto it, allowing for long term price appreciation to create wealth. The young investor will likely be drawn to one side or the other and it makes sense to pay attention to your preference. Trading/investing against your natural style could make you a little crazy. Here’s an idea from Young Wealth. If you can’t make up your mind, try this – put most of your portfolio in investments and keep a small percentage, say 10%, to play short term trends. This is one way to satisfy both desires.

The Young Wealth Team

Flickr / artemuestra

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June  5, 2010 – Credit expert, Danny Rosario of Starting Over LLC, joins the Young Wealth Show to give young adults helpful information on building credit. During the third episode, Jason Hartman asks Rosario, “why is it so important to take care of your credit?” Rosario replies, “for anyone who is 18 or older, credit is going to be a quintessential part of your life.”

Although 80 million Americans have credit problems, bad credit is not the end of one’s life because it can ultimately be repaired. Using a secured credit card (backed by one’s own capital) for 12 months with on-time payments will result in the credit card’s conversion into an unsecured credit card (the institution’s money).

During the episode, Rosario stresses the importance of the FICO score and what it means to a consumer. The score ranges from 300-850 and serves as an identity by placing a risk category on consumers; the higher the score means that the banking institution views you as a lower risk. The score represents the likelihood that you will go 90 days late in the next two years. “The magic score is 740,” Rosario states, “it used to be 720, but now that credit is tighter, 740 viewed as an A+ to the banking institutions.”

Concluding the episode, Rosario gives away tips to help listeners improve their credit score. “Don’t screw up the first 12 months of having credit, but really, you don’t ever want to be late,” he says. “Keep a mixture of credit, keep credit history open and active, and keep a debt-to-income ratio around 10% and pay the balances off as soon as you can.” He also suggests obtaining the FICO score regularly. “Go to www.myfico.com,” Rosario continues, “and avoid all of the “free” credit report marketing schemes on TV.”

The Jason Hartman Foundation recognizes that life as a young adult can be very confusing and chaotic.  In the midst of completing formal education and beginning a career, there is a constant level of uncertainty concerning what will transpire in the future. The Jason Hartman Foundation is specifically concerned with helping young adults develop the necessary skills for financial success. The Young Wealth Show offers free educational information to help young adults develop the financial literacy needed to become financially independent. The show can be found on www.JasonHartmanFoundation.org/articles/young-wealth-show or the iTunes store.

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Contact Info:
Brittney Roberts
The Jason Hartman Foundation
Phone: 714-820-4267
Email: Media@JasonHartman.com
Web: http://www.JasonHartmanFoundation.org

FOR IMMEDIATE RELEASE–

June 27, 2010 — Jim Lowell, author of “Investing from Scratch,” joins the Young Wealth Show to speak on financial planning for young investors. The interview aims at the 20 to 30 year old beginning investor by suggesting actions to take to get on the right track.

Host of the Young Wealth Show, Jason Hartman, asks Lowell what basic actions young adults can take prior to investing. Lowell replies, “Time is on the young investor’s side to secure a bright financial future… make sure you are employed, have three to six months saved for a rainy day, then, with limited capital, invest in no-load indexed mutual funds to take advantage of compounding interest.”

Lowell spent most of his childhood and young adult life talking about stocks, bonds and cash around the dinner table, not sports, and suggests that investing clubs or groups can be beneficial for young adults to gain financial literacy. “But take a cautious approach to the existing investor clubs,” he says, “if you can, assemble an investing club with friends and share notes; often times, the long-standing clubs may require you to purchase the funds they are involved in.

Financial planning and goal setting can cast a young investor in the right direction; and increasing financial knowledge, and paying attention to economic activities, can help a young investor recognize opportunities or risks that exist. Lowell states, “With the government spending itself into oblivion, we need to secure our own financial future. Remember, it’s time in the market, not timing the market that creates long-term wealth.”

The Jason Hartman Foundation recognizes that life as a young adult can be very confusing and chaotic.  In the midst of completing formal education and beginning a career, there is a constant level of uncertainty concerning what will transpire in the future. The Jason Hartman Foundation is specifically concerned with helping young adults develop the necessary skills for financial success. The Young Wealth Show offers free educational information to help young adults develop the financial literacy needed to become financially independent. The show can be found on www.JasonHartmanFoundation.org/articles/young-wealth-show or the iTunes store.

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Contact Info:
Brittney Roberts
The Jason Hartman Foundation
Phone: 714-820-4267
Email: Media@JasonHartman.com
Web: http://www.JasonHartmanFoundation.org

In episode 168 of The Creating Wealth Show, Jason Hartman discusses some of the disadvantages of investing in gold.

Despite the crowd of investors clamoring to join this gold rush redux, Jason is not a fan. In fact, he likens buying precious metals with investing in insurance since neither meets his standards of a true investment, although they are touted as such. If you want evidence, consider that insurance companies turn around and invest your premiums in real estate.

Few would argue that gold and silver are essentially money. Thus, precious metals are equivalent to savings or wealth stores, not investments, and they are vulnerable to the weaknesses inherent in currency. Paper money is also referred to as “fiat” currency, meaning its value is conferred by authority; that is, it is only secured by a pledge. Furthermore, Jason predicts that “Money is in for a long-term loss in value,” prone to inflation and subsequent devaluation – similar to what happens with your investment in insurance.

This discussion is prompted by an addition to Jason’s list of disqualifiers that make gold and precious metals a bad investment, bringing the total to 7 reasons:

1. In contrast to property investment, there is no financing, thus no leveraging to allow you to build wealth.

2. In contrast to tax deferment opportunities, there is no tax advantage.

3. In contrast to real estate rental, there is no income potential.

4. Your investment is subject to confiscation; arguments that collectible coins are immune from seizure are flawed since there is no guarantee this protection won’t ever change.

5. Precious metals are prone to manipulation by those motivated to suppress their value in order to boost paper money.

6. The myth of superior gold liquidity. This argument fails on a couple counts. Proponents tout the facility of buying and selling gold, but there are hidden costs in offers of guaranteed buy-back of gold purchases. When you are ready to liquidate your investment, you’ll be penalized with a 1.5% premium for melt-down value, on top of shipping & handling plus insurance expenses. Real estate actually benefits from its lack of liquidity because combined with higher transaction costs, this equates to lower volatility. In contrast, the low transaction costs and high liquidity claimed for precious metals are a perfect formula for greater volatility.

7. If gold does go up in value, the gain is nominal rather than an actual increase in buying power. This is because when gold appreciates it typically coincides with a devaluation for paper money. Moreover, those gold profits are taxable, in contrast with the “most tax-favored” status enjoyed by real estate investment. By exploiting the 1031 tax-deferred exchange it is possible to trade up tax-free with property for a lifetime. Even if the dollar depreciates, your asset appreciates with inflation and you will have locked in a long-term loan that you repay “for free”.

Subscribe to The Creating Wealth Show in iTunes or listen online at http://www.jasonhartman.com/radioshows/.

FOR IMMEDIATE RELEASE –

June  20, 2010 – The Young Wealth Show, a free, educational podcast show, launched its first episode by discussing the 3 C’s of Financial Success – Credit, Capital and Competency.

Jason Hartman, founder of the Jason Hartman Foundation, begins the episode by introducing the Young Wealth Show and highlights the overarching objectives of the podcast show, while also speaking about specific topics coming up in future episodes.

During the 14 minute introductory episode, Jason Hartman spotlights a professionally read article on “the 3 C’s of Financial Success” contained in the first the Jason Hartman Foundation Newsletter.

The Jason Hartman Foundation stresses the importance of the 3 C’s its significant role in obtaining long-term success as a young adult. “Credit is necessary for obtaining long-term fixed-rate mortgage to purchase assets that produce income,” the article reads. “Capital is necessary for investing in future opportunities…this can be obtained from your own savings, friends and family, or private investors.” Competency, or financial literacy, “represents the most valuable capital…it will allow an investor to see opportunities easier and make intelligent decisions.”  The article also states that knowledge and action are the core competencies of an investor.

The Jason Hartman Foundation recognizes that life as a young adult can be very confusing and chaotic.  In the midst of completing formal education and beginning a career, there is a constant level of uncertainty concerning what will transpire in the future. The Jason Hartman Foundation is specifically concerned with helping young adults develop the necessary skills for financial success. The Young Wealth Show offers free educational information to help young adults develop the financial literacy needed to become financially independent. The show can be found on www.JasonHartmanFoundation.org/articles/young-wealth-show or the iTunes store.

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Contact Info:

Brittney Roberts
The Jason Hartman Foundation
Phone: 714-820-4267
Email: Media@JasonHartman.com
Web: www.JasonHartmanFoundation.org

If you want to build wealth and keep it, you’re going to have to get serious about financial management, and better sooner than later. What is financial management? It sounds like a fuddy duddy term that only old dudes in three-piece suits should be bothering with. Wrong! Unless you like the idea of working the drive-thru window at McDonalds the rest of your life and burning through every penny as soon as you make it – you need to learn about financial management.

Let’s define what we’re talking about. Financial management means taking the actions necessary to insure that your personal cash flow remains positive. That sounds like a good thing, right? Positive cash flow is an idea we all should be able to get behind. Most of us have experienced the opposite at some point in our lives. Maintaining positive cash flow is possible at any age but the sooner you learn it, the more likely you are to have extra cash to throw around as you get older.

Financial management is about managing risk. Risk is what can destroy your assets. Protecting them should be job number one. And wandering blithely through life waiting for the risks to wave a red flag normally doesn’t work. You’re going to need the knowledge to identify them, which comes only with education and experience. Experience – well that kind of unrolls at it’s own pace. Education is something you can accelerate on your own. When should you be in stocks? Bonds? Real estate? How can you protect assets from the tax man? These are all questions that you answer on a day-to-day basis as you go about the financial management of your growing portfolio.

We’re not big fans of turning all this over to a financial planner. That’s just adding another set of fingers to the mix and another chance for a screw-up. Manage your own finances and watch the wealth rise.

The Young Wealth Team

Flickr / Mitmensch0812

According to a recent YoungMoney.com poll, 65% of respondents believe that all Americans deserve health care. 13% think we all should have health care but are queasy about the price of Obama’s overhaul plan. 52% are flat our in favor no matter what it costs. Think about that for a second, young adults. More than half of your fellow citizens (and obviously some of you also) believe that a giant leap toward socialism will cure all the system’s ills.

And now comes news that doctors are prepared to leave medicine altogether if Obama’s health plan is actually put into action.

The issue here is one that might make your noggin hurt a little bit. You might have to think, darn it. Here it is: What exactly does a human being deserve? The only thing our Declaration of Independence guarantees is the life, liberty, and the pursuit of happiness. By what chain of logic does a group of people come to the conclusion that health care is their right?

Just because you want it doesn’t mean you deserve it. The word deserve, in this instance, indicates there is some innate quality inside each and every one of us that causes us to claim ownership of the fruits of another person’s labor. Where we come from that’s called communism, socialism, or flat out thievery, none of which are tenets our country was based on.

And where does it stop? Do you also deserve a high-paying job, a new car in your garage, and a six-figure salary for doing nothing but picking your nose?

Just wondering where the 52% draw the line at what they deserve.

The Young Wealth Team

Flickr / Fibonacci Blue

When it comes to increasing your money education, you’d be well advised to pay no attention to the clowns in Washington D.C., unless, of course, you learn by watching what not to do. The recent Obama stimulus package was so large it almost required the invention of a new number system. To be fair, it was around $787 billion, and what do we have to show for this amazing feat of presidential prowess?

Here are few of the more choice tidbits:

1.$100,000 for socially conscious puppet shows in Minnesota

2.$2 million for a replica railroad tourist attraction in Nevada

3.$700,000 to Oregon fishermen to recover lost crab pots

We’re stopping at this point, not because there are no more glaring examples of wayward stimulus spending but because we’re about to lose our lunch at the lengthy list of political stupidity. But we can’t go without revealing a special little boondoggle to the tune of $3.4 million. Have you heard about the poor little sea turtles down in Florida that get crunched on the road by passing automobile tires every season when they go the wrong way and miss the ocean? Lake Jackson, Florida, is spending the $3.4 million to build an underground turtle crossing.

Didn’t they already try something like this down in the Florida Keys to keep the key deer from getting run over? And the silly things couldn’t figure out how to use it and are STILL getting splattered. Sorry, unless they’re writing the directional signs in “Turtlese” the critters will only be using the new tunnel by accident.

Lesson for today. Do not build your personal financial plan using government logic.

The Young Wealth Team

Flickr / andryone

Being laid off from work can send a person into a panic at any age. Older workers (hopefully) have savings to fall back on. Younger ones who haven’t had a chance to accumulate much in the way of savings or investments might feel like they’re out on a limb and someone’s sawing at it.

So you’ve been laid off. Don’t freak. It’s not forever. You will find another job. In the meantime, there are some constructive things you can do rather than mope around the house, watching television, and eating ice cream.

1.File for Unemployment: Do this immediately, before anything else. It’s not hard and you’re just being silly if you don’t take advantage of this benefit. Swallow that silly pride and get real. Being unemployed is just a speed bump in life; don’t let it de-rail you.

2.Start Looking for a New Job: When is the best time to start looking? Today! The day you walk out of your old job. Network. Tell everyone you know you’re looking for work. Get into a routine of searching job sites and sending out letters of interest every single day. Until you are hired, your job is to find a job.

3.Tweak Your Resume: Add your last job to your resume and take advantage of the opportunity to update and revise the whole thing while you’re at it. Be clear and focused with your language. Try to keep it to one page – never more than two, and tell your references they might be getting a call.

4.Get Health Insurance: If you had health insurance at your old job, federal law requires they make it available to you for 18 months after you are laid off. You’ll have to pay the whole monthly premium yourself but it’s still cheaper than buying an individual policy off the street. Without it, one accident and your whatever savings you might have had could be toast.

5.Cut Out Extras: Now would be a good time to learn to go without cable television, your morning Starbucks latte and other frivolities. You can add them back in later but, for now, you need to be clipping coupons and eating Ramen noodles.

The main thing to keep in mind is that being unemployed is not forever. Finding work is simply a numbers game. The more jobs you apply for, the nearer you are to securing your one.

The Young Wealth Team

Flickr / erix!

Maybe you’ve been studying stocks for a while now but, as a young investor, find it difficult to pull the trigger and risk real money in the marketplace. Never fear, your friends at Young Wealth have an idea that might help.

The trick is how to get a close approximation to live trading conditions without losing real money. Currency market brokers had this figured out a long time ago and now we’ve begun to notice stock brokers taking the cue – practice accounts are what we’re talking about.

A practice account with an online broker is exactly what it sounds like. You register at no charge, open an account, and are immersed in a real world computer screen with charts, graphs, news, live streaming quotes. There’s money in your account even though but it’s not real. This is how to simulate trading and not lose a penny.

In almost any endeavor, practice makes perfect, or at least a lot better than you were before you started practice. With a simulated trading account you can execute trades, lose or gain money, test strategies, or just find out if you’re ready for the big time of making trades with real money.

We think it’s a great idea for a young investor to use his practice account as long as it takes to prove himself a profitable trader. If you can’t trade profitably on a practice account, why the heck would you want to move on to a real one? Be patient. Sooner or later, you’ll get there.

The Young Wealth Team

Flickr / YoTuT