This is a guest post by Buy, Hold Long. Buy, Hold Long is a blog where smaller and sometimes unusual dividend growth companies are analyzed. His blog was created in late 2016 and shares insights into different investing methods and the story of the author’s net worth over time. Check out Buy, Hold Long and say G’day!
There are a number of publicly listed companies provide what is known as a dividend– a cash payment for being a shareholder of the company. Shares of a company can be bought and sold in different markets. Many people will focus on the appreciation of equities over time, but not today. Rather, we will focus on the dividends paid per year.
Many large companies past the growth stage will pay a dividend. They pay dividends because they don’t necessarily want to put their cash to work in new markets or products and would rather increase shareholder value.
When a company decides to pay a dividend at a certain time, they will nominate how much the dividend will be and when the payment will occur. The holders of these shares will receive that dividend in either a cash payment or in more shares, through a Dividend Reinvestment Plan (commonly known as DRP or DRIP). Most dividends are pay out on a quarterly basis.
Essentially, if you own shares in a company and the company issues dividends, you will receive a portion of profit from the company in the form of cash payments.
Now on to the analysis of dividend yield and dividend growth to determine which is best for long term investing.
Dividend yield can be considered as a stocks dividend payment divided by the stocks price. For example, if a company has a current stock price of $100 and pays you a yearly dividend of $2.25 per share, then the dividend yield is 2.25%. Note, dividend yield is a annual rate. As mentioned above, most dividends are paid out quarterly, so care will have to be taken when going from quarterly to annual. This is a simple calculation. Below is the formula to use to calculate dividend yield:
Let’s do a real life example. I want to analyze McDonald’s Corp Stock (MCD) to get their dividend yield. We know their last dividend payment per stock owned was $0.94 per quarter. To get the annual dividend payment, multiply $0.94 by 4. The current stock price as of today (March 27th, 2017) is $129.34.
Therefore, our calculation would be:
McDonald’s stock as pays us back 2.907% per year just for owning this stock. One thing that should be noted is that both the stock price and dividend can fluctuate. Not all companies increase their dividends and not all stock prices will go up.
Dividend Pop Quiz
Let’s take a pop quiz, the share price of McDonald’s falls to $115 per share from the current $129.34 per share, but the company decides to keep the current dividend of $0.94 per quarter per share. Does your dividend yield go up or down?
That’s right, it increases. As the price goes down and the dividend payment remains or increases, your yield goes up.
The next natural question is what is a good dividend yield? Is 2.907% good or bad for dividend yield? Let’s look at another company to compare. We already looked at McDonald’s (MCD); now let’s analyze Mattel Inc (MAT). Both are well known, respected companies in their field that pay dividends.
McDonald’s, as we have discovered, pay out a dividend yield of 2.907% per share owned. Currently, Mattel pays a dividend of $0.38 per quarter per share and their current share price is $25.16. Uusing the formula from above, we get a dividend yield currently of 6.04%.
So in reality, you would be getting double the cash payments from Mattel through dividends than you would be getting back from McDonald’s, right? While that statement is fundamentally true, the logic is flawed.
It’s important take into consideration dividend growth and the possibilities that they can create in themselves. Also, just because the company is paying a higher dividend, this doesn’t necessarily mean they are more financially sound than companies paying a lower dividend. The money could be borrowed, from a previous year’s cash holding or a company effort to attract more investors.
Let’s dive into dividend growth and see how it affects the analysis.
Dividend growth is the concept of a stock that pays a dividend that will continue to grow over time. When a company increases their dividend over time, with dividend growth, it increases your original dividend yield.
Let’s go back to the two companies we looked at earlier, McDonald’s (MCD) and Mattel (MAT). I’ve plotted the annual dividend payments over the past 17 years to show the dividend growth. The blue columns are MCD dividends and the red columns are MAT dividends.
In the year 2000, Mattel had a higher dividend payment and yield than that of McDonald’s. In 2003, the two companies had the same dividend payment. Now, we must remember that the prices of the two companies are vastly different, so while Mattel’s dividend was the same as McDonald’s dividend, Mattel’s yield was a lot higher as the price was lower.
As you can see, over time, Mattel’s dividend has fluctuated drastically. This volatility leads to uncertainty for the shareholder. To add to that point, if you bought the stock in 2000 at a great dividend paying year, you would have been severely disappointed in the following couple years. Mattel cut their dividend in 2001 and 2002!
McDonald’s has continued to grow for many years since the 2000’s. Currently, the dividend yield might be a little low compared to other companies, but it’s growing each and every year.
What if You Had Bought in 2000?
Consider the following: what would your dividend yield today be if you bought in 2000? As I stated, if you bought MCD today you would have a 2.907% dividend yield and if you bought MAT today, you would have a 6.04% dividend yield.
Back to the question, if you bought in 2000, your dividend yield would be 28.5% dividend yield for MCD and only a 11.20% dividend yield for MAT. The conclusion is obvious, dividend growth is a powerful tool to harness in your investment portfolio!
As you can see from this analysis, dividend growth beats dividend yield when you are looking to invest for many years. I am a buy and hold for a very long time type of investor – this style fits my personality greatly.
Even if a stock has a relatively low yield, if there is potential for dividend growth, the potential will outweigh the temporary low yield. This is why so many investors favor low dividend yields with high growth over a volatile high yield with low growth.
Thanks for writing Buy, Hold Long! Buy, Hold Long is a blog where smaller and sometimes unusual dividend growth companies are analyzed. His blog was created in late 2016 and shares insights into different investing methods and the story of the author’s net worth over time. Check out Buy, Hold Long and say G’day!
A few of us took some interest in the freelancing site Fiverr this week without having a plan down to use it and after my previous post of cold calling and Whitelisting arbitrage. In this post, I we’re going to go down to its most minimal actionable level. Brace yourselves, because this entire post is spoon-feeding you exactly what you need to to make passive income via Fiverr Service Arbitrage -a fancy phrase to mean paying someone else to work for you over a cheap freelancer website.
I made a lot of mistakes in Fiverr, whitelisting, outsourcing, and purchasing freelancing work. You’ll learn from my mistakes so you can save a year long struggle of getting things right.
This post is split into four parts, each with their own segment. I ask that if you’ve gotten value from this post to say so below in the comments.
0. SCOPE OF THE WORK & REQUIREMENTS
Fiverr Service Arbitrage can be done can be completely hands off. Depending on your experience on WordPress and your hustle, it does not matter what your level of expertise is for this website builder. Depending on your skill set, you will be outsourcing work to developers for web design services which is completely scale-able. You can assemble a team of people who will spend a few hours to complete their part and profit the rest.
At the end of the day, you will be able to create a website with the core pages a basic site needs as you hand off the website to your client. Given everything you do is based off the work of an individual on Fiverr, charging $250 for the design will net you $200 in profit. If you offer a five-page website, the cost and revenue breakdown is as follows:
- Spend $5 a week for local Craigslist ads in an effort to get a payment of $250 to start the project.
- Next, you’ll spend 2-4 hours with the client collecting all the needed details for the site.
- You will earn $65 off a BlueHost affiliate purchase when you tell your client to purchase a domain and hosting via BlueHost.
- To Install WordPress, you can either use EasyEngine.io to rapidly start using it OR pay someone $20 to install WordPress and a good looking premium theme (2 hours of their time or 5 minutes via installing via EasyEngine.io)
- For $30, you pay someone to fill out the rest of the core pages that you negotiated for the basic website:
- A home page
- An about us page
- A contact us page
- A product/service page
- Any additional pages you can up-sell for $50 per page while charging $5 or $10 for a 1k word article on a website.
At this point, you will have your client’s website completed and will have paid $50 in labor. At this point you deliver the website back to the client. Once you deliver, you need to be front and center explaining what the website has. At this point, the client is eager to get started. Explanation might take an hour and an hour of ‘support’ such as answering questions such as, “What’s my password again?” and “Where’s the Admin Page?”
That is the scope and high level summary of what the rest of the post will touch on. Now, on to the details!
1. COPYWRITING AND CRAIGSLIST
Copywriting is the art of marketing aimed towards creating a sale through the written word. It is also a numbers game. I welcome you to post this SAME ad and see where that gets you – you can also purchase a virtual assistant who can post twice every day to your Craigslist account but you will find the same level of success by offering this to your friends and family off Facebook.
Contact EVERY single person, and show them this ad. You could press urgency and say that you’re looking to get a client this week; otherwise, at the end of the week, you would bump it up to $500. I’ve had cases where someone was told that, beat around the bush, and paid an extra $250 as a “hesitation tax”.
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With your ad in hand, clients will contact you. Now, on to dealing with the client!
2. CONNECTING WITH THE CLIENT
Now, let’s say you actually got someone interested. It’s time to get them to agree to give you $250 of their hard earned money. This is a question-based methodology that helps cement your position as someone who can genuinely help them.
Here’s how the story goes. You get a trickle of inquiries once or twice a day if you’re really good or one a week if you’re only posting ads.
For each one you follow the following mindset: you establish yourself as a salesman and an expert before offering your solution and price. First, you need to establish credibility. To show you know the market, ask them STATUS questions where it’s a one word answer to qualify them and understand where they’re at.
Uncover Their Issues
After you ask those, they know that you have some level of competency. The next step is to build rapport while uncovering ISSUES. These are longer form questions where you want them to talk a bit more.
You want to keep them talking, and you want to ask this question at least once: “To What Extent Is X Important To You?” This forces them to dive deeper into the issues they may have.
Guide The Prospective Client to the Sale
Now, it’s the time to press them. We’re not telling them that they have a problem. The more forceful you are in your sales pitch will result in a higher defensive state from them. They need to come to the conclusion that they need your services. Let’s guide them towards that through IMPLICATION questions like these.
It’s good to develop 3 implications per issue that they have. For the most part, they might just want a website. Others might want a web store. Maybe they just want to get this done as fast as possible. It might be good to press into each need they have for this by creating a need in their mind.
Close the Sale
After asking the questions above and determining the issues and wants of the prospective client, it’s time for the close. You should be able to just say, “to offer the solution I presented in the ad, I’m asking for $250 if you close by the end of the week.”
If your client is a local business, for the love of god, don’t sell a website for $250. Even though they say they might not be able to afford it, pick up top notch sales book that covers everything in this segment and after reading you will be able to pitch your $250 services for $2,000 or $3,500.
Don’t think that people would pay that much for a website? This business paid $3,500 and is full of spelling errors. Here’s what you can close with if you want to close a business client. (If it’s a friend or family member will be OK if you just say the first line.)
“So, would it make sense for me to send you an invoice right now so we can [[fix your specific problem]] and build that site?”
Now, once they are close, ask what they need. Most of the time they will give you basic requirements such as I would prefer a certain color or feel. Whatever it is, it is up to you to bring what they want to reality.
3. COMMANDING YOUR FORCES
Great job. You have a client! Now on to making the website through Fiverr Service Arbitrage.
If you have patience, this will be a true test of that. Going on Fiverr.com and finding any virtual assistant to copy and paste an ad can be done. Negotiating $5 for 5 minutes of work a day for a month is possible but international workers are interesting to work wit and some can be great.
I’m not sharing my virtual assistant, but creating a request on the site with a description of each stage of your work will bring you 2o to 30 bids. Most of these are one sentences saying “BUY NOW FOR MANY RESULT FAST THANKS” or a variation of how happy I will be.
Thanks to the hiring info from one of our book review posts, you want to filter out people who have the hustle and speak English. The best way to filter through all the people who want to work for you is by adding this sentence to the the ad:
“Start your first sentence of your reply for this job request with Chocolate to be considered for the position”
Install WordPress Job
Anyone browsing in the ‘Install a WordPress’ job requests board already can do WordPress Installs. They’re just looking for bids. Now, those 20 job bids become 2 or even 3. Very easy to look at all and then close a sale.
You need to purchase a gig to Install WordPress. This is done by a technical person and will cost $10 to 20. Some people pirate their designs and don’t use the real deal. Make sure you ask if they have a licence for the theme. If so, then they will show you examples of what they can use. You can also purchase a theme for your client over at a website like themeforest or if you’re really into this you can get an annual license at elegantthemes.com for roughly $89 a year.
You then need to purchase a gig for someone fill out the WordPress Template. This is done by a technical content writer. The pages you have are already made, but you need to go through and finalize it. Telling your content writer of the specifics it just needs 5 pages is really all you really need. Excellently researched articles can be done at $30 per article, but you need someone proficient in English.
4. COMPLETING YOUR CLIENTS WORK
Now your gig is done and you got the site back. It looks great. Your client knows you’re working on it, and now that it’s done, spend some time to double check the website. Test everything. Make sure each button doesn’t go somewhere it’s not supposed to or that there isn’t an extra template page there with sample words left behind in the template.
Once that’s done, ping your client and schedule a time to chat for 15 minutes for a Q/A. This is where you could upsell extra services for $500/month if you had read this sales book. Give them the rundown of what you did. You made 5 pages, and they can login at the WordPress admin page. The default login for a WordPress site looks something like this (this is ours):
Login yourself as they would, and tell them how to make a new page. Explain that WordPress is everywhere and that they can easily find help on Google. This is where you can start to up-sell extra features.
You can fix their WordPress problems at 50$/hour. Most people think that’s too steep. If that’s the case, you can bring that $50 an hour down to $50 for gigs where it takes longer than 2 hours and you give them half off the first hour. You can even offer extra page creation for $50 per page. I’ve had people order 100 pages of content deliverable throughout a year where I outsourced every single article.
Conclusion for Using Fiverr Service Arbitrage
Well, there you have it – you now have the exact steps to start practicing Fiverr Service Arbitrage today. Create an free account on Fiverr right now and your first step will be to hire a Virtual Assistant to start posting the same ad above for you. It will cost you $5 or $10 for you to hire someone for a few minutes of their time for 30 days.
Leave a comment below if you think I presented value for you in this post.
We have a guest post today from Troy who runs a hedge fund in Austraila and blogs about his historical market research.
Everyone talks about the importance of budgeting and cutting down on expenses with regards to getting wealthy. If you think of your life as a business, adhering to a strict budget is akin to rigorous cost control. While it’s important to not wasting money on non-essentials, I believe that we should try to maximize the “revenue” side of our life instead of minimizing the cost side.
Theoretically speaking, you can only cut the costs side down to $0, while you can increase the revenues side infinitely.
As you work, save, and invest over the years, your investment income from real estate or stocks will perhaps one day become greater than your income from your full time job.
That being said, what if you aren’t healthy enough to enjoy your investment income!
I want to share with you an aspect of investing many people don’t talk about: physical and mental health. Investing is ultimately a game of decision making. Your health will impact your decision making capabilities. For example, someone who has poor health will probably become easily frustrated in his/her life. This will result in poor decision making skills when things turn sour.
Instead of making a rational decision about whether to sell an asset when the market turns down, the individual might make an irrational decision based on his/her emotions instead. Living a healthy lifestyle via healthy dining and abundant exercise provides many benefits to investors.
Benefits of Being Healthy
A healthy body is a temple for a healthy mind. Scientific studies show that exercise trains your mind to think quicker and analyze situations in more detail. It also improves your memory – you don’t need to waste time on finding studies/research that you’ve done in the past.
Eating delicious, nutritious food makes you happier by releasing hormones called endorphins. People who are happier are also more optimistic in life. Since the stock market goes up more than it goes down, you need to have an optimistic bullish bias if you are to succeed in the stock market. Perma-pessimists inevitably get killed in stocks.
In addition, investing is a long term game. Warren Buffett said you have to treat your body as if it were the only car you have in your lifetime. You need to change the oil frequently, take it to the repair shop, and run it every once in a while (or else the engine will die).
People who live healthier lifestyles live longer than those who don’t. You can just imagine the final difference in wealth between someone who dies at 65 and someone who dies at 85. The person who dies at 85 benefits from an additional 20 years of compounding!
Investing isn’t all about money. The purpose of money is so that you can have a good quality of life. Healthy living isn’t only beneficial for your investment decision skills, it also leads to a markedly improved quality of life.
My Healthy Lifestyle
My lifestyle revolves around 4 tenets.
- Eat vegetables/fruits and foods that are high in protein.
- Exercise regularly.
- Take a lot of mini-vacations.
- Wake up early and sleep early.
I recognize that not everyone can follow my lifestyle. Being young and single, I don’t have many of the constraints that other adults have.
I believe in spending modestly but not too modestly. This means I don’t tighten my belt too strictly when it comes to groceries. Although the monetary benefits of having a tight budget are obvious, there is no way to be “cheap” in when trying to live a balanced life and to eat healthy.
Start in the Kitchen
My diet is high on vegetables and protein while low on carbs. In addition, I prefer organic, natural, and low salt foods. I stay away from frozen foods. While a diet rich in carbs such as pasta/bread is definitely cheaper, I don’t eat many carbs because they aren’t the best for me. Here in Sydney, a loaf of wholewheat bread is $3 while a single head of lettuce is $3.50 (Sydney is ridiculously expensive)!
By eating healthy foods I feel better, have more energy, and think more clearly. Sugar-rich foods may provide the body with an immediate boost in energy, but that energy drops precipitously after a few hours. Meanwhile, vegetables and fruits cause energy levels to rise and remain elevated for many hours, after which it declines rather slowly. It is important for an investor to stay sharp at all times.
I find I’m always hungry when I’m investing and working. This is a common problem that many hedge fund managers, traders, and professional investors have (that’s why so many hedge fund managers are overweight).
Eating too many sugary foods or carbs makes you feel bloated and slightly dizzy, thereby worsening your investment decision making skills. That’s why I’ll usually eat fruits while I’m working. Eating while working acts as a good semi-distraction and relieves stress.
While I spend a lot more on groceries than most people, my expenditures are far from extravagant. I cut down on the non-essentials in life to save more money. I don’t eat out (which for a person of my appetite can become ridiculously expensive!)
Another frugal thing I do is I still use an old phone instead of keeping up to date with every iPhone refresh! It’s all a matter of spending the same amount of money but improving your quality of life.
In addition, I work out a lot. I lift weights for 50 minutes and run on a treadmill for 20 minutes 5 times a week in my home gym. Science shows that consistent exercise improves your memory and quickens your decision making skills. It also improves your ability to think rationally.
You’ll probably make poor investment decisions after you’ve had a tough day at the office. Working out is a great way to release stress because your body produces more feel-good hormones called endorphins.
I go on a lot of mini-vacations. It doesn’t have to be a big multi-week trip that includes 10+ hour flights (flying to anywhere from Australia takes forever). It might just be a day trip to a remote beach. Getting out in the world has 2 main benefits for investors.
- It broadens your view of the world! I have gained so much knowledge that aids my investing. For example, I’ve learned a lot about the economies of different states in the U.S. and different countries just by talking to taxi drivers.
- It does miracles to your body. A vacation is a nice break from everyday life. Certain investments decisions are hard to make because there are too many factors to consider. When I come back from vacation, my thinking becomes a lot more focused. Thus I can more easily strip away the factors that don’t matter and focus on the factors that are important to the particular investment.
Early to bed, Early to Rise!
I wake up early and sleep early (I understand this is hard for adults with kids). Certain studies show that the body starts to regenerate after 9 pm and stops regenerating by 5-6am. However, this regeneration occurs at a much faster rate if you’re sleeping during this time. That’s why I usually sleep from 9:30 pm – 5 am.
“Early to bed, early to rise, makes a man healthy, wealthy, and wise!” – Benjamin Franklin
If you are looking to maximize your returns in the stock market, it might be best to supplement your market research with some gym time and time in the kitchen!
Start trying to get to bed a little earlier and you will reap the benefits!
Troy is an investor who shares his thoughts on stocks, commodities and currencies on the web.
Over the past two weeks, I’ve been constantly challenging my thoughts on how the world works, what is important in my life, and what do I want to be doing in the coming years. A thought which has been constantly in my head is how can I make responsible choices in saving and spending money, and growing my wealth? This post is going to talk about some thoughts I have and some actions I have taken with regards to saving and spending money, and growing my wealth.
How can I make responsible choices in saving, spending, and growing my wealth?
Where I’m at Financially in 2017
First off, I’ll give a brief overview of my current financial status in January 2017. For income, I work at a regional bank where I make fairly good salary for my age. I also own a house and have 2 roommates who pay me rent. From an income standpoint, I’m doing fairly well for age, but am always looking to improve. It is important to never be complacent in your life. This is why I’m reading 75 books this year; I want to improve each and every day.
I’m a Natural Saver
For savings, I contribute 4% to a Roth 401k (company match is also 4%) and am able to save around 1.9k to 2.3k in cash a month. I believe saving money is very important and is essential to building wealth.
Like I mentioned above, I’m able to save around 1.9k to 2.3k in cash in a given month. I live fairly frugally, and do not spend much on non-necessary items. For spending, I have my mortgage, which I am not prepaying (the loan is a 2.625% 5/1 ARM), and have usual expenses of around $600 a month (food, utilities, fun). In addition, I have about $10k in savings which I treat as an emergency fund for myself and my house.
Here’s a simple snapshot of my net worth at the end of 2016. (Serious question here, how should I value my house?? Zillow has given me 60k in appreciation in 1 year!!)
Now that we have gone through and discussed where I am currently at financially, I can start discussing where I want to go and what actions I have taken so far in 2017 to get there.
First, before I get into my action steps, I’ll discuss what I want to set myself up for in the future.
- I want to be able to run my own business in the future. Whether that be in real estate, where I have some experience already with my house, running a website, such as this one, or running a brick-and-mortar business, I need to work on my management skills sooner rather than later.
- I want to be able to build my income to a level where I could choose to not have to work for an extended period of time. This goes hand in hand with the first thought; if I owned cash-flowing assets which produced decent income, I would be free to do what I want, when I want. Certainly, this is a fun thing to think about! In addition, by becoming financially well off, I will be able to provide for my future family and friends.
My Action Steps Taken in 2017
1. Open up 2 New Credit Cards
One thing which is very important in business, and life, is being creditworthy. I have opened 2 credit cards in 2017 to take advantage of perks and rewards. 1. A Target Credit Card, which gives 5% back on all purchases and 2. an Amazon Credit Card, which gives 5% back on all purchases through Amazon, 2% back on select other purchases, and 1% on everything else. In addition to these great perks, I received a $70 Amazon gift card!
By opening these new lines of credit and paying them off each month in full, I will be able to increase my credit score. In addition, my credit score should rise automatically due to my utilization rate coming down. At a maximum, I might spend 2k in a month, which previous to me opening these new cards would have been 50% of my total limit. Credit bureaus want to see your utilization rate under 30%. The Target card has a credit limit of $500, and the Amazon card has a credit limit of $5,000. Now, my utilization should never be above 20%!
Result: Increased credit limit by $5,500 and unlocked avenues to save 5% on various purchases.
2. Increasing my Credit Limit on Main Credit Card
In addition to opening new lines of credit, I requested my main credit card’s limit be increased from $3,000. The bank came back and told me my credit limit would be increased to $5,000, a decent increase. In addition to this increase, and the 2 new lines of credit, my utilization rate will be very low. My credit score should increase, as a result, in the long run.
Result: Increased credit limit by $2,000.
3. Started a Blog
Henry and I met each other about a year ago and we are both interested in running businesses. We both have rental properties, but do not have any experience working in a team on a small business. We started this blog in late December and believe this is a low risk way to figure out if we would be good business partners (in Decisive, they call this “ooching”). In addition, having a blog is a great way to improve as an individual.
Blogging is a potential income producer in the long term. Currently, we are trying to make connections with other bloggers and individuals to help them out in increasing their viewership. Along the way, we hope that these connections can help us with our goals of 15,000 views and 10 guest interviews/posts. Hopefully we can stay consistent and make The Mastermind Within a place where readers can learn, grow, and become more successful.
The first two weeks of 2017 have been solid for me financially. I’ve increased my credit limit by $7,500 and am setting myself up for improvements on the income front in the new year.
Have you been taking action steps in the new year to move towards your financial and business goals? Do you look to increase your credit limit to the maximum? (Also, should I use Zillow for my house estimates?? I’m still stumped on this one…)
“Would you like to save 5% today by applying for the Target Red Card?”
I’ve been to Target 114 times in the past 2 years and every time I got to the cash register, the cashier said, “Would you like to save 5% today by applying for the Target Red Card?” I always said, “No, not today.” What a big doh I had when I actually realized I was wasting money… a total of $161.87.
Like I said, I’ve been to Target 114 times in the past 2 years, and spent $3,237.36 on those transactions. Each and every time, I was leaving at least 5% on the table. When you hear 5%, you don’t think it’s much. However, when compared to other credit cards, 5% is an insanely good reward for spending money. My main credit card only gives me 1% cash back on all purchases (So, really, I cost myself $129.49).
There are two takeaways from this experience that I want to bring to light: number one, when a person is young, a person should try to build credit as responsibly as possible. By building credit at a young age, that person will be more attractive to borrowers in the future and will be able to take on more debt to finance a company or get a better interest rate on a home in the future. Number two, the amount of savings over a lifetime taking advantages of programs like these can have on a person.
Building credit is huge in today’s world. If a person wants to start a business, invest in real estate, or buy things on credit in the future, they will need to convince a lender to do so. How do we build credit? Simple: open up different lines of credit, be it credit cards, loans (for cars, education, houses, boats, home improvements, etc), lines of credit, and pay them off (by making timely payments). It’s that simple! (Make sure to pay it off on time though!)
Improving my Credit Score
Credit scoring companies recommend having more than 12 open accounts at a given time to obtain a favorable score. While this has a low impact on your score, it is still something lenders will consider. I only have 3 currently, which is one of the reasons I finally applied for the Target Credit Card.
In addition to opening another account, my utilization will decrease. Credit scoring companies recommend keeping utilization under 30% if possible. I usually never have to worry about being utilized more than 30%, but there are times when it creeps up to 50% if I’m doing a project or an unexpected expense needs to be paid.
For number two, my lifetime savings will increase by a few thousand dollars. As mentioned above, in 2 years, I spent $3,237.36 at Target and would have saved at least $161.87 through their rewards program. Let’s extrapolate that over 5 years, 10 years, and 30 years.
A savings of almost $5,000!?!? That’s not even considering any investing I could do with these savings over those 30 years!
To sum up, I was stupid for the past two years and missed out on $161.87. Going forward, I will be able to save 5% at Target and as time goes on, this will help me in my pursuit of financial freedom.
What other rewards cards should I be taking advantage of? Home Depot and possibly Costco are next on my list.
Most students are pursuing an MBA select a specialization or concentration to pursue. MBA programs today allow you to focus on a specific business aspect through MBA concentration, giving you a competitive advantage in the industry. The focus will signal skills and credentials in a specific field, making you a more attractive candidate. Having an MBA concentration on your resume increases your chances of being considered for a job that requires expertise in a specific field.
When deciding what concentration to pursue in a graduate program, making the right decision can be challenging. Several factors influence your decision, including your career goals, previous experience, and the length of the program. To make things easier for you, we have provided below a list of the most in-demand MBA concentrations and how you can choose one.
MBA in Supply Chain Management
Obtaining an MBA in Supply Chain Management prepares graduates to take on organizational management responsibilities to ensure supplies and products are available when needed. This MBA concentration provides students with the skills necessary to obtain jobs involving logistics, procuring raw materials, developing production methods, and cost and risk management.
These jobs would require specialized training in the specific industry. They can make a big difference in business logistics, so pursuing your education and gaining relevant industry experience is essential. So students looking to work in these areas can pursue an online MBA in supply chain without the hassle of attending physical classes.
MBA in Finance
An MBA in finance aims to give students an in-depth understanding of critical financial issues, including corporate finance, investment management, and financial markets. The curriculum emphasizes the development of critical thinking abilities, decision-making skills, and the study of global finance, investment strategy, and risk analysis.
This degree prepares students for careers in financial management, which include accountants, risk managers, financial managers, and chief financial officers (CFO).
MBA in Marketing
An MBA in marketing allows you to reach consumers, predict their behaviors, design marketing campaigns, and increase public awareness of your company. You can develop a solid understanding of marketing fundamentals as you study advertising, public relations, and sales topics.
There are a variety of job opportunities in marketing since it is used in a variety of industries. Even though an MBA is not a prerequisite for entry-level marketing positions, it can be valuable when seeking a job at a higher level. Specialization in this area may lead to brand director, brand manager, marketing director, marketing manager, and digital marketing manager positions.
MBA in Human Resource Management
An MBA in human resources emphasizes strategic approaches to managing human resources within an organization. The curriculum includes leadership, employee development, labor relations courses, organizational behavior, and finance courses. Graduates of the program will be prepared to assume management positions in the human resources field, such as human resource manager, training manager, payroll administrator, etc.
MBA in Business Management
A management specialization is recommended for students who wish to pursue leadership positions. The objective of this degree is to provide you with skills that will enable you to efficiently and effectively manage resources to maximize efficiency and productivity for the organization. The student acquires the ability to communicate, make decisions, delegate, and solve problems through this program.
Graduates with an MBA in management typically find employment in project management or general management.
How to Choose the Right Concentration for Your Career?
For those considering specialization in a specific area, picking a concentration can be a source of anxiety. As you make your choice, this small guide may be of help.
Do Your Research
Start by researching the requirements of the company you dream of working for. Consider what these employers and similar ones are looking for. There may be specific requirements or qualifications they prefer. Getting in touch with MBA graduates in a particular field can also provide insights into the needs of that field.
Identify Your Strengths
The acquisition of new skills may prove beneficial. However, when making decisions about your course of action, it is often helpful to build on the skills you already possess. It is essential to recognize your strengths. Identify subjects or personality traits that you are good at or possess. Choose a concentration that will allow you to make the most of these strengths. An MBA concentration in financial management may be more effortless if math has always been your forte.
During this process, consider the aspects of previous employment you enjoyed or disliked. Your career path may be influenced by how you perceive specific tasks at work.
Define Your Goals
Understanding what you seek will help you select the right concentration. For instance, if earning a high salary is your primary objective, you may consider pursuing an MBA in one of the most lucrative business fields. Several industries offer starting salaries over $100,000 on average, including financial services, consulting, information technology, and health care, according to a report by U.S. News & World Report.
Examine the Outlook of the Industry
MBA is often regarded as a highly esteemed degree. In 2021, based on data from the Graduate Management Admission Council, 91 percent of employers in the United States were planning to hire candidates with an MBA degree. It is crucial to consider this when examining specific career fields and concentrations. However, it is also essential to consider how the field will evolve over the next ten or twenty years. If you are interested in analyzing career statistics and job outlook predictions, the U.S. Bureau of Labor Statistics is a valuable resource.
A student’s career goals determine the usefulness of a particular MBA concentration. Depending on their chosen specialization, students can develop skills in a specific area and prepare themselves to succeed in their chosen career field.
Selecting the ideal MBA concentration for your career may seem overwhelming, but the effort and time invested in this will be well worth your while. When you follow the tips outlined here, you will be able to remain focused and succeed academically and professionally as an MBA graduate.
Currently, I am reading Money Master the Game by Tony Robbins and it is a fantastic book(I’m excited to keep reading and be able to provide you with a book review in the coming days). In chapter 4, he is discussing asset allocation and interviews many top money managers.
One of the money managers Tony interviews in MONEY is Ray Dalio, Chairman and Chief Investment Officer of Bridgewater Associates, a hedge fund which has $160 billion in assets under management. Bridgewater Associates has two main funds, the Pure Alpha fund and the All Weather fund, both of which have made investors very happy over the past 25 years (so happy that Bridgewater had to stop taking on new clients as they became too big).
Ray Dalio is becoming a role model of mine. He is constantly asking himself, “What don’t I know, and what should I do about it?”and looking to find the answers. Ray Dalio put together a presentation on the economy: How the Economic Machine Works, and it was very beneficial for my understanding of, well, how the economy works. I want to share it with you; I have attached the YouTube video later down in the post. First, a picture of Tony Robbins and some key points and takeaways.
Main Points from the Video
Some key points and takeaways to watch out for in the video:
- There are three things that drive the economic machine:
- Productivity Growth
- The Short-Term Debt Cycle
- The Long-Term Debt Cycle
- A market is all buyers and sellers of a certain market
- The economy is the sum of all transactions in all markets
- The central bank of a government control credit.
- The central bank can modify interest rates and print money.
- Credit is the most important part of the economy.
- The cycle of economic growth is as follows:
- Income -> Borrowing -> Spending -> Productivity -> Income
- Productivity matters most in the long term
- Credit matters most in the short term
- Short-term credit cycles last 5-8 years, while long-term credit cycles last 75-100 years
- Anytime you borrow, you create a cycle
- Spending drives pricing,
- If spending increases and prices rise, inflation occurs and the central bank can step in raise interest rates.
- If spending decreases and prices fall, deflation occurs and the central bank can lower interest rates or print money.
- Debt burden is very important to be aware of when assessing the health of an economy.
- If debt burden is high, individuals or corporations will have to divert income to debt repayment which will result in less spending, which will result in less income for others, which will result in less wealth, which will result in less credit, which will lead to less income, and so on and so forth.
- If prices decrease and deflation occurs as a result, this is what is commonly referred to as a “depression”.
- If debt burden is high, individuals or corporations will have to divert income to debt repayment which will result in less spending, which will result in less income for others, which will result in less wealth, which will result in less credit, which will lead to less income, and so on and so forth.
- After a “depression” starts, deleveraging occurs, i.e. debt burden reduction.
- There are a few ways to accomplish this:
- Cut Spending – this will lead to less income and possibly bring on deflation
- Reduce Debt – through defaults or restructuring, will possibly bring on deflation
- Redistribute Wealth – leads to less growth and stability, will possibly bring on deflation.
- Print Money – Use new money to buy assets, this will only help those who hold assets and will possibly bring on inflation.
- There are a few ways to accomplish this:
- It is a central bank’s job to balance deflation and inflation.
- Spending is what matters most in inflation
- 3 Rules of Thumb
- Don’t have debt rise faster than income
- Debt will crush you
- Don’t have income rise faster than productivity
- You will become less competitive
- Do all you can to raise productivity
- Productivity is what matters most in the long run
- Don’t have debt rise faster than income
How the Economic Machine Works
For more information, visit www.economicprinciples.org.
Did this increase your understanding of the economy? Are videos like these helpful to your understanding of things in general, or how do you prefer to learn?