Posted by Ryan on January 20th, 2008 in Recommended Readings

Here is a list of some of the best personal finance articles from around the web. To kick start your week, spend some time digging through the Millionaire Money Habits archives and the links below to improve your financial literacy.

Investing:

• Personal Finance Blogosphere Best of 2007 at Moolanomy
• Pros and Cons of Investing in Target-Date Retirement Funds at My Two Dollars
• Interview with Investing Author Richard A. Ferri, CFA at The Dough Roller
• Wise Investing Made Simple Review Part 1: Markets and Performance at I’ve Paid for this Twice Already . . .
• A Little-too-Late Advice on Building Wealth at Brip Blap

Credit & Debt:

• How to Kiss Your Debt Goodbye This Year at Gather Little by Little
• The 401k Debit Card: Probably One of the Worst Ideas Ever at Generation X Finance
• Credit Reports: Interesting Equivocations at Mrs. Micah: Finance for a Freelance Life
• Getting Organized: Monitoring Your Credit Report at My Dollar Plan

Taxes:

• Family Feud on taxes at Rocket Finance
• The Rise and Fall of the Tax Kicker Refund Check at beingfrugal.net.net

Spending and Saving:

• The Economics of Feeding a Teenage Boy at DebtFREE-Revolution
• Addicted to Spending? at Plonkee Money
• The One Month Coupon Strategy: A Really Clever Way to Make Coupons Worthwhile at The Simple Dollar

Work and Life:

• 10 Signs It’s Time For a New Job at Cash Money Life
• Start a Money Club at Credit Withdrawal
• Worst Inflation Rate in 17 Years at Blueprint for Financial Prosperity

Financial Psychology:

• I Just Can’t Look Anymore! at Single Guy Money

Millionaire Money Habit: To build wealth, you need to perpetually improve your financial literacy. Digest as much information as possible and stick to a plan that works for you. In addition to the articles above, browse through the suggested readings listed at the very bottom of this website’s page, and be sure to subscribe to our RSS feed or by email.

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Posted by Ryan on January 18th, 2008 in How They Did It

What does Warren Buffett, baseball and patience have to do with one another? It is how the small-town billionaire made his fortune.

Being a big baseball fan, Buffett compares his investment philosophy to the wisdom he picked up from his favorite past time sport and his hero, Ted Williams. He told CNBC, “What’s nice about investing is you don’t have to swing at pitches. You can watch pitches come in one inch above or one inch below your navel and you don’t have to swing. No umpire is going to call you out. You can wait for the pitch you want.”

Just like Ted Williams, Buffett has been know to be very patient as he studies the opportunities and waits for the perfect moment. Then, when he receives the perfect pitch, he bets big. As Buffett has said in the past, “Don’t swing a lot, but if you do swing, swing for the fences.”

And he generally does bet big. According to U.S. News, his top 10 stock picks account for 90 percent of his publicly traded portfolio. When you are talking about well over $40 billion, those are some pretty high stakes by most portfolio manager’s standards, who generally own 150 or more different stocks in their portfolio. Buffett’s explains his thought process by quoting Ted Williams, “To be a good hitter, you’ve got to get a good ball to hit.” When you invest, you should be totally confident that you have a winning bet that will be a home run. Otherwise, you will strike out big.

Buffett has been known to be an incredibly patient investor, which has made him exceptionally successful. While he constantly pours through annual reports to find great pitches, he finds nothing wrong with holding onto his cash until the right opportunity presents itself. As long as money is being held in order to have purchasing power when the time is right, that is an acceptable part of an overall investment strategy. As he states, having cash will allow you to, “be greedy when others are fearful and fearful when others are greedy.”

Millionaire Money Habit: Investment opportunities will always present themselves. Resist wanting to invest in everything that seems like a good idea. Over-diversification will impede your ability to understand and manage all of your investments and can cost you more money in fees. Keeping cash on the sidelines to be prepared for the right moment is a suitable money management strategy. Play like Buffett and patiently wait for the perfect pitch.

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Posted by Ryan on January 16th, 2008 in Investment Planning

Wouldn’t it be a warm, fuzzy feeling to know that you kids or grandchildren will not have to worry about money, and they can retire millionaires? You don’t have to dream about it. It can easily happen.

Once teenagers are gainfully employed they can begin contributing to an IRA. If $4,000 is invested each year between the ages of 16 and 21 and not another cent after they are 21 years-old, their tiny retirement fund will grow to over two million dollars by age 65 - $2,045,042 to be exact. That’s assuming an annual 10% return on the investment, which the stock market has historically done on average.

Better yet, put the money in a Roth IRA and that money will be 100% tax free.

Millionaire Money Habit: Invest early and let compound interest take care of all of the work. With your advice and the help, you and your children can live comfortably knowing their future will be free of money worries.

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