The Investment Advice That
Have rising costs ever eaten up your pay increase? If so, the investment advice that we followed may prove helpful to you.
Before we proceed, we must share with you that we are neither certified financial planners nor advisors.
We are simply sharing with you our own personal experience what we have learned through the years and have followed ourselves.
Over the years, we have tried numerous types of investments, but only one led us to fulfilled dreams, the largest among them we describe as our dream come true.
What is an Investment?
Wikipedia defines investment this way:
"In finance, investment is the commitment of funds by buying securities or other monetary or paper (financial) assets in the money markets or capital markets, or in fairly liquid real assets, such as gold or collectibles. Valuation is the method for assessing whether a potential investment is worth its price. Returns on investments will follow the risk-return spectrum."
Some investments are clearly winners and others are clearly losers. Some investments are well-timed and others poorly timed. The wisdom or foolishness of making some investments is not apparent for a long time. The wisdom or foolishness of relying on some investments may not be apparent for a long time.
Some readers may remember an episode of The Andy Griffith Show -- Mayberry Goes Bankrupt -- in which a man's 100-year-old bond is thought to be worth nearly $350,000, but it turns out to be worthless.
The Challenge That Preceded Investment Advice
In early 2007, Vicki met a woman at an event hosted by an organization in which we shared a mutual interest. Vicki did not know it at first -- because she and the other woman held diametrically opposite views on a particular subject the day they met -- but the woman would become important in Vicki's life.
As it turned out, the woman challenged Vicki on her thinking on the topic about which they had initially disagreed. Vicki did the research and found that the woman was right! Vicki's thinking underwent a major paradigm shift and by extension so did Mike's.
In the months that followed as a direct result of this lady's influence, Vicki met, mixed and mingled with more and more people with whom she shared a common ideology. For a focused period of time, they labored side by side to meet a common objective and succeeded.
This freed Vicki up to start thinking "outside the box" on other matters.
Investment Advice from an Old Acquaintance
During those days, Vicki started listening more closely to the advice of an old acquaintance. He shared with her the investment advice he was using to start preparing for a really bad economic collapse.
Among his investment advice strategies were:
Regarding the first three strategies and to the extent possible, we have written an article about how professional truck drivers can help be prepared for an economic collapse by having an emergency kit assembled and on hand.
For the purposes of this page, we wish to focus a bit on the last investment advice strategy....
Increase, Pay Increase Gone!
What Investment Advice Now?
In late 2008, we received a letter from our landlord who said that he was raising our rent.
This was in direct contradiction to a rental agreement that four of us -- Mike, Vicki, the landlord and the landlord's wife -- had signed some years before. Due to the relationship between us, we didn't fight the rent increase.
However, the new figure meant that our rent was going up a whopping 40%!
Although some people might consider our rental rate low, the rent increase completely ate up every bit of the pay increase that Mike had gotten after a year's worth of service.
Completely swallowed up!
We had a decision to make about where we were going to put our money.
Would we put the extra money into our landlord's pockets or make some kind of a change so that we could keep following the investment advice we'd been following?
Investment Advice Should Lead to Long Term Return
Part of what bothered Vicki about the rent increase was that our landlord had not been doing (or paying to have done) needed maintenance and repairs on our rented home.
We felt as though he was not holding up his end of the rental agreement. Our respective investments were not well balanced, in our opinion. And here he wanted us to pay more for the same thing! No return! This was a losing proposition!
When we received the letter from our landlord, Vicki made the bold statement that for as much as he wanted us to pay, we could afford to neglect our own maintenance (that is, on our own home, assuming we ever got one).
What about you? Are the things you're investing in leading to long term return?
Investment Advice: The Investments We Had Made Saw Us Through a Hard Time
Despite the photo, money does not grow on trees.
Previous to our rent hike, we had experience of putting savings into a bank savings account and a money market account. Then, Mike schooled himself on how to research other investments.
He learned how to invest in stocks and mutual funds. We made some investments in the stock market and we watched our investments grow a bit. When they began to tank badly, we looked for other types of investments.
In 2007 and for most of 2008, Vicki had had a paying part-time job. During that time, we had begun to make regular acquisitions that followed the investment advice we had received. When Vicki's job ended in late 2008 and the rent increase started at the beginning of 2009, our investment acquisitions all but stopped.
However, the "value" of the investments continued to increase. In late 2010 when we had to take care of our urgent family matter, Mike literally had no income for quite a number of weeks. Some professional drivers would not have been able to survive financially in such a situation, for they live paycheck to paycheck. We ended up tapping our investment account a few times before Mike was blessed with a local truck driving job that allowed him to have regular income once more.
Investment Advice: Thinking Ahead About Home Ownership
Because of the nature of Mike's new job, we needed a place to stay. We had a choice: we could either get back into a rental home or buy a place of our own.
Some people may not think it at all objectionable to undertake a mortgage in order to buy a home. However, Vicki had made a vow to the Lord in 1988 (long before she met Mike) that she would not go into debt. If you read our credit card statement page, you know that Mike had a tough lesson to learn in that regard.
Once debt-free, however, he endeavored never again to get into debt. This included debt for a home.
Perhaps you have read the stories about the millions of people who have lost their jobs, gotten behind on their mortgage payments, and either had their houses foreclosed or experienced the downside of the housing bubble.
One snippet of investment advice is obvious: when one buys one's real property outright and has no mortgage, it cannot be foreclosed.
But how were we going to ever have enough money to buy land and a home of our own? The price of both seemed outrageous.
Investment Advice: Waiting, Taking New Risks and Being Rewarded
Even though we married in 1991, we had only ever lived in places we had rented. We had never owned a home before. The thought of it sometimes filled Vicki with trepidation. Yet the receipt of that rent increase letter prompted her to re-evaluate her thinking. Was it time for new risks?
We had an idea of the kind of land and location we wanted. For one thing, it had to be in an area that is considered truck-friendly. Many places are not.
We had looked for over 2 years for suitable homesteads. Many were rejected as less than suitable for one reason or another. Vicki prayed and prayed that the Lord would grant us "wisdom, knowledge and understanding" and that we would know when the time was right.
At one point, we thought we had found a suitable homestead, but the Lord intervened. He had something much nicer in store for us!
The purchase of the land required that we tap our investments, which had been growing in "value" since its purchase.
Once the land was purchased, we needed a home to put on it. The Lord also raised up a home for us. We once again tapped our reserve and paid for it outright.
Neither of these two acquisitions would have been possible without the Lord's provision of
We praise Him entirely for this.
The Lord was the one who gave Vicki the desire to be debt-free and He is the one who fulfilled her desire regarding debt-free land and home purchases.
Think of it: the investment advice we followed from God's Word -- to "Owe nothing to anyone except to love one another"(1) -- meant that we wouldn't be paying hard-earned money in mortgage interest to the bank. Some people justify paying this interest since they can deduct it on their income taxes, but it's not a 1:1 deduction.
The Investment Advice We Followed
This is the investment advice we followed. We picked an investment vehicle
Not only did we make this kind of investment leading up to our land and home purchases, but we continue to make these investments today.
Investment Advice Regarding Currency Value
In the USA, the value of the dollar has been decreasing ever since 1913 when the Federal Reserve was instituted. You can calculate the toll that inflation has taken since then through this calculator. We will provide two examples (as of August 2012):
Question: $1.00 in 2012 was worth what in 1913?
Answer: $0.04 (meaning that the value of the dollar has decreased by 96%).
Question: $1.00 in 1913 had the same buying power as how much money in 2012?
Hopefully, you're shocked. This is part of the reason why things seem to cost more than they used to. It isn't so much that the price of products and services has gone up so much as the value of the currency being used to buy them has gone down (figuratively down the drain, as the photo pictures). It takes more of a currency worth less to equal the same.
Obviously, you want an investment vehicle that is going to be a hedge against hard times. Do your due diligence to make sure you understand what will be required
Investment Advice Regarding Investment Vehicle Options
Evaluate all of your investment options to help you best grow your money so that you, too, can have a dream come true.
Among the various investment vehicles are:
Some of these investments have stable rates; others vary.
Some of these investments have a better return on investment than others. Find out for yourself: Does the return outpace that of inflation?
If you invest in real estate, make sure that you do all of the research ahead of time, including learning about demographics; zoning; crime rate; subdivision associations, restrictions and covenants; utilities; comparable land rates; etc. Visit the proposed tract of land and talk with prospective neighbors to see if it would be a good match for you. Be especially aware of any prohibitions regarding big trucks (if you plan to take yours home with you).
If you invest in stocks, bonds or mutual funds, you may or may not have flexibility regarding buying or selling online. Many but not all of these can be obtained through online accounts. If you plan to open up an online account, search for the one that meets your needs on all fronts, including the per trade cost and any monthly fees. Learn what the various trading terms mean and familiarize yourself with trading houses that use them.
If you invest in precious metals, make sure that you take physical possession of the metal itself; do not depend upon certificates saying that the metal is being stored somewhere for you. Understand the difference between "solid" and "clad" (or "layered") coins or bars. Be aware of how paying "over spot" and selling for "under spot" prices work. Since it can be heavy, store your stash outside your truck with someone you know and trust.
The basic investment advice that everyone knows is summarized in the pithy statement:
"Buy low, sell high."
Those of us who have not been born with a silver spoon in our mouths (so to speak) and do not hail from families with large portfolios of investments may consider themselves as unable to make wise financial choices. Nothing could be further from the truth.
Neither of us grew up in a rich family or one that invested in stocks, bonds, mutual funds, etc. Most of the investment advice that we've followed over the years -- some good and some not so good -- we have learned either directly or indirectly online. And, yes! Truckers can easily make the same kinds of investments we've made.
Many a financial advisor has given specific investment advice for a specific reason. Perhaps the client is looking for investments in a particular industry or on a specific commodity.
It must be stated that if the advisor is a professional, he/she must be paid for that advice. Determine for yourself if the financial model used by a particular advisor is best suited to you -- for example, no upfront fees but rather a part of the return on your investment (ROI).
Also beware of a financial advisor's potential conflicts of interest. Does the advisor want for you to continually buy, sell, buy, sell -- and with every transaction costing you a bit? Don't let the advisor "nickel and dime you to death." Could you do better yourself and save money?
Investment Advice Regarding Market Fluctuations
That being said, we chose to invest in a commodity that had a strong history and which was predicted to increase in price. As is the case with so many investments of this nature, the purchase price is tied to the market and other factors (such as politics).
As of this writing (August 2012), the price at which this commodity is being sold is lower than the price at which we sold a bunch of it for for over a year ago. That is the nature of financial markets.
Timing the markets can be risky. Some people believe in and practice "dollar cost averaging."
Even now, with the commodity being lower in cost, it is a pretty good time to buy because based on the state of the U.S. economy, the price is predicted to go up.
When the price does go back up, then we'll ride it out. We don't anticipate ever needing to make another purchase the size of our land and home.
Investment Advice When Looking Ahead to the Future
If you choose to invest in a commodity, you'll want to make sure that it can be easily liquidated in tight financial markets.
Also, remember the application of the statement made on just about every investment prospectus:
"Past performance is no guarantee of future results."
Just because a particular investment performed well in the past does not mean that it will continue to do so.
Investment Advice that is Short-Sighted
Some inventions are just too short-sighted.
Old-timer truckers will remember the old PNV or "Park N View" terminals (like the badly banged up one shown at right) installed in some truck stops years ago. The idea was to provide Internet and other communications options for truckers parked overnight.
However, this start-up did not bank on the sudden rise and popularity of individually owned cell phones.
Of course, in the meantime, other services have arisen in truck stops that provide the same types of services -- plus climate control so that trucks don't have to idle. This reincarnation of an old idea has done very well. Now there are a number of companies offering their own version of idling alternatives.
See if you can school yourself to look for the right opportunities at the right time. That's the best investment advice you can get.
Investment Advice: Reviewing One Track Record
Some pieces of investment advice about stock purchases are superb. According to Wikipedia, Microsoft went public in 1986 with an opening stock price of $21. "As of July 2010, with the company's nine stock splits, any IPO shares would be multiplied by 288...." One may view the current per-stock price of Microsoft (MSFT).
Let's look at some levels of investment in a table:
|Number of shares||Cost of shares in 1986 (opening price)||Value of shares after all stock splits (based on 1986 opening price)||Buying power due to inflation (1986 to 2012)|
If someone had given investment advice about just holding onto the currency all that time, you can see how bad a choice that would have been, since more than half of its buying power would have evaporated.
The investment advice we received (and followed) is to find something into which to invest money that will grow in value over the long term.
Investment Advice on In-Person Purchases Only
Truckers may want to invest in something that can be purchased only in person (such as from a business that does not take credit cards or orders over the phone). That can be hard when they're on the road so much.
For transactions such as buying real estate, documents have to be signed by the person making the purchase. So, arrange a time to be available in person for those.
For transactions that can be made by anyone who is available to make a purchase in your behalf, you may be able to assign that duty. There are "shopping services" that take care of things like that, but they may charge you a bit for the service.
Also, depending on the nature of your investment, it may not be wise for anyone else to know the kind or size of investment you're making.The ideal thing would be to have a reliable and trustworthy home support team member make an in-person purchase for you.
Find out what kinds of payment(s) the vendor accepts. Make sure that the person buying in your behalf has enough money to pay for the size of the investment you wish to make.
Money saving tip: There is an old proverb that says, "He who tills his land will have plenty of food, But he who follows empty pursuits will have poverty in plenty."(2)
Each of us invests in something daily. Beyond what we "need" to survive, some folks spend money on fancy clothes, rich food, or a home that is more than they can afford.
Sometimes people spend money on discretionary items that have nothing to do with survival, such as on entertainment, high-powered communication devices and so-called vices. Mike's dad invested cigarette smoke in his lungs and it hurt his health as well as his finances.
Check your priorities. Determine if such things as a beautiful rig or pretty chrome is a priority for you.
Vicki Simons is pleased to
be part of this initiative:
(Click the image to go
to the Facebook page.)
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