138

Sorry if it seems to be nitpicking, but what does “family friend” mean? I have come to understand the spectrum of friendship to be; an acquaintance will send you an email congratulating you on your move. A friend will bring you a house-warming gift. A good friend will help you move. Your best friend will help you move a body. With all the questions that we ...


128

Almost nobody would just give you a pile of money with no expectation of return. In most cases you exchange equity in the company for the investment. A simple example might be that I estimate your idea/company to be worth $4M currently, so for $1M I want 25% equity. When you sell for $30M, I get 25% of the proceeds. If you go belly up, I likely don't recoup ...


114

In general, borrowing money to invest is a risky proposition for a very simple reason: investments can go down in value, while the loans you had to take to make the investment absolutely do not go down in price if the investment didn't work out. So you have a guaranteed cost, but never a guaranteed return. That said, there are a number of red flags here ...


110

It means they're making a big loss in cash terms, yes. The claim that they are profitable is based on a theory that they are accumulating valuable assets in exchange. In Netflix's case, it's that they are spending lots of money on their content, which they expect to produce income in future years too. So essentially lots of cash going out the door now, but ...


110

The vast majority of people that day trade lose money. Of those that make money, most aren't going to beat an index fund. Of those that actually beat an index fund, very few do so without investing so much time that they'd be better off working elsewhere. If you have a $1 M portfolio and you can reliably beat an index fund by 1%, that's worth $10,000. If ...


93

Investing is not a way to get rich quick. It is a way to get richer over time. Fund managers cannot "predict the market so well". They do not have a secret trick. What they can do, that other people cannot, is spend time researching into companies, understanding them, follow their news and understanding the results from those companies. This potentially ...


70

A few points. You may be interested in this website which helps you calculate the total cost of car ownership, and factors in things like insurance, gas, mileage, repairs, registration, etc... These costs are not inconsequential and have a tendency to add up. Even this calculator doesn't consider all the costs though because it ignores the lost opportunity ...


66

Do they want your help? Many times parents have difficulty taking advice from those whose nose and butt they wiped. Your accomplishments and investments are independent of the fact. What are their needs? They likely have social security and is that meeting their needs now? What happens after dad passes? Coming up with solid numbers is an important step ...


64

Private companies don't have liquid secondary markets. There are no identified buyers of your shares. The next time there's a fund raising round at the company they will include some or all of your shares in the transaction at whatever valuation is being used for the transaction. What you need to calculate the value of the shares is a buyer for your ...


59

In poker, you do a thing called "counting outs". That is, you count the number of cards that are still in the deck that, if you draw one of them, you will have a winning hand. "There are four 4s that will give me a straight, there are nine hearts, including the 4 of hearts, that will give me a flush, so there are 12 'outs' of the 47 cards lefts." In life, ...


59

If mean-reversion does exist, am I correct to say that timing the market is likely to reap great rewards? Sure!!! Just one problem: you can't time the market. why do so many people think it's a bad idea to invest when the market is high Because "they" think that the market will crash Real Soon Now. and a good idea to invest when the market is low? ...


54

First congratulations and well done in both your salary and investment. Hopefully there will be more of this in the future. First I applaud your initial approach. Give some, spend some, save some. The disagreement with your wife is standard. One member of a partnership tends to be more conservative than the other; the disagreements help bring balance into ...


52

It's not necessarily free money. If the stock declines by >15% in the six months after you buy it then you've lost money on the deal. However assuming your company is performing at least reasonably compared to other stocks, you are, on average, getting a 15% bonus to your savings. You shouldn't be turning your nose up at that. (if whatever other stocks you ...


46

Probably they shouldn't be investing. It's too late for that. And if they aren't investing it's pretty simple: Sell the big property before they urgently need the money because that takes time, then pay off the mortgage on the other house because the mortgage only costs money and they probably can afford to pay it off. In that order so they always have some ...


43

One benefit of cash ETFs over a bank deposit is if you're interested in diversifying your currency holdings, they are a cheaper method than going to traditional currency exchanges. For instance, if you're in the US, and you want some of your cash holdings to be in EUR to hedge against the possibility of the dollar falling, you could exchange your dollars to ...


42

No, it is not correct. You bought those 909 shares for $90,900. You sold them for $99,990. Your capital gain is $9,090 Or you could calculate the cap gain by multiplying the share price increase by the number of shares sold: 909 * $10 = + $9,090


41

You are currently in a phase of your life where you have a couple hundred € per month you can experiment with freely without hurting yourself too much. If you want to invest the money in stocks, you will likely soon realize that you don't actually have a knowledge which is as deep as you think. The stock market is the world's largest gambling den. Lots of ...


40

No doubt about it: vehicles are capital expenditures which depreciate over time. Referring to a car as "a good investment" because it hasn't depreciated very much is metaphorical. Having said that, the exception that proves the rule are low-supply, high-demand antique and specialty cars.


40

The six months of savings is for an emergency fund. The advice is for 3 to 6 months. This emergency fund is to cover you for a six month period of time if you are not employed. This isn't invested in any instruments that have the risk of losing money. So what other purposes should you have a pot of money, in addition to the job loss emergency fund, that ...


36

During a recession, economic growth slows. This can lead to higher unemployment which in turn results in lower consumer and company spending which in turn leads to decreased company revenue and profit, lowering the fundamental value of stocks. Lower investor confidence contributes to market decline as investors move to safer assets (defensive stocks, ...


36

Say you buy 25% of a corn field, and the other 75% is owned by others that decide how to operate the whole field (for this metaphor, assume the shares of the corn field are highly liquid and can be traded at "fair" value at any time). Every year, that field produces corn that is then sold for a profit. The majority owner can do two things with those profits: ...


35

You're talking about the difference between Profit and Loss (as in, the accounting report with the same name) versus Cash Flow (again, accounting report of the same name). The difference exists because not all assets are cash. Yet a non-cash asset is carried on the accounting books at its cash value - the value of a building, the value of vehicles, ...


35

The common expression in retort would be "Time in the market beats timing the market." Meaning: On average, the stock market rises [because on average, the global economy is expanding as outputs continue to increase] - a common rule of thumb for North American markets would be 7% / year, after factoring inflation. This general rise beats out the average ...


34

What you do with your income, and with your windfall, should be based on your retirement goals, which you have not mentioned. For many people, a paid-off residence and $1M in the bank would mean retirement could already start. But it seems your lifestyle (young children, Porche 911, etc.), won't quite allow for that. So you acknowledge that you will be ...


30

The standard answer is that if you need the money soon (less than three or so years), you should not be putting it in risky investments and just park the money in your savings account or similar "safe" holdings. Since you plan to buy in a year, you probably should leave it in your bank account. Sure, you won't gain much interest, but you also sound like you ...


26

Explain to your parents what a fiduciary1 is. Tell them that no matter how much they like this guy (gal?) they should only invest with someone that they have a fiduciary relationship with - because they only have one shot left and it needs to be the best thing for them. Steer them to someone who is a certified financial planner or any other ...


25

The cheapest way to buy stock is commission free Robinhood. They have many deficiencies but for a few Buy&Hold positions in a small account, that's probably your best bet. If you need anything more than that, you need to look at other brokerage firms.


25

I would call that strategy "waste of time": Your individual purchase decisions are not meaningful for the bottom line of the company. A single individual (you) simply isn't representative enough of the market as a whole. As the Canon example shows, how a company behaves depends of a lot more than consumer products, and many of those factors are difficult to ...


24

First, if you structured your rental properties correctly and had a Self-directed 401(k) you could each be contributing over $56,000 a year into it under various characterizations. As you mentioned, you are only making $40,000 and will never max it out, but you already indicated a desire to expand. It may be obvious to some, but there is still $40,000 that ...


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