Desty Online -- Online and Offline Businesses, Online Marketing » Money http://www.destyonline.com Bringing offline business practices online. Turning bloggers into Businessmen. Wed, 23 Apr 2008 15:57:21 +0000 http://wordpress.org/?v=2.3.3 en The Investments That You Know About, but Choose to Ignore http://www.destyonline.com/the-investments-that-you-know-about-but-choose-to-ignore/ http://www.destyonline.com/the-investments-that-you-know-about-but-choose-to-ignore/#comments Wed, 04 Jul 2007 19:03:28 +0000 Desty http://www.destyonline.com/the-investments-that-you-know-about-but-choose-to-ignore/ Remember back in early to mid June I mentioned we would go over how to use the money that you used to pay yourself first?  You don’t?  Refresh yourself with this earlier article on paying yourself first.

 Remember now?  Super.

We are now going to use this money for safe investments.  When I say safe investments, I don’t mean mutual funds or index funds.  We are going to use your own knowledge and experience to see where your investment dollars go.

You: Investment Guru 

Get out a pad of paper and write down all of your hobbies and the jobs you ever had.  This is your sphere of influence.  We’re going to stick to these areas when it comes to investing.  Work for Microsoft?  Ok, how is the company doing?  You probably don’t know how well the company as a whole is doing, so you need to go to the company website and find the corporate link.  You’ll see various investor and shareholder  links and information.  What you’re looking for is the annual reports.  Try to go back atleast 5 years in your research.  For right now, unless you know how to read income statements, balance sheets, and cashflow reports, stick to the written reports.  Now, based off what you know from working there and what the annual report says about current operations and future endevors, what do you think of the company’s outlook?  Do you think things are doing well?  Do you feel, based off your own experience and the annual report, that this company can make money, and therefore, make you money as an investor?

Wait For the Fire Sale

Ok, you’ve determined that you want to invest in a company.  You know what the company does, you feel that things are going well and they will continue to do well in the future.  Don’t buy just yet!!!  Its time to go shopping.  When you go to buy a computer, you look for the best deal, correct?  That’s what we’re going to do.  We’re going to wait for the investment to go on sale.  That means waiting for bad news.  When that bad news comes, and it will, you have to look at the news with a critical eye and determine if this is a shift in what you think about the company.  Has anything about the basic structure of the business altered that makes you think the company will not make profits in the future?  An example of this is Apple.

Remember back in the summer of 2006 when Apple was in trouble over stock options?  Well the price per share fell down to $50.67.  Now, as an investor, stock options do affect the value of a stock and gives questions about management, but is the core business affected by this?  The iPod is still going strong and rumor has it that Apple might launch a new product, maybe even a phone based off the iPod.  Jump to summer 2007.  Price per share is $127!  If you had bought on the bad news last year, your investment would have  doubled!

I’ll Close With a Personal Example 

Back when I was working for a major food producer as a trucking dispatcher in their private fleet, I invested in the company’s 401k.  This was pre-Enron, so I invested in company stock.  While researching, I noticed a pattern in the stock.  The core product sales was responsible for over 90% of revenue, so if it sold well, the price per share was good; vice versa when sales weren’t so good, the share price tanked.  Well the product enjoyed a seasonal cycle.  In the summer months, with the grills fired up, everyone had to buy the product, so from May till September the price per share would be very nice.  In the winter months, no one was grilling, so demand for the product would lower dramaticly and so would the price per share.

So what I did was buy as many shares I could during the winter months with prices low.  As the price per share would start to rise with the warmer weather, I would keep the shares, but all my new investment funds going into the 401k would go into the money market account; the price to buy new shares had gotten too high for me to make it worthwhile.  Finally around August or so, with the temperatures at their peak, along with the stock price, I would sell all my shares of stock and put the money in the money market account.  The money would then sleep until winter, with the price per share in the tank, when I would put all my money back into the stock.

I no longer work for the company and unfortunatly the company has diversified somewhat, so it’s no longer possible to ride the ups and downs of its share price.

I’m investing in a company now, an oil tanker company.  I’ve never worked in the oil tanker business, but, at its heart, it’s just a transportation business that uses boats instead of trucks.  So, stick with what you know, and buy on the cheap!

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]]> http://www.destyonline.com/the-investments-that-you-know-about-but-choose-to-ignore/feed/ What Would You Do With $5000 per Month? http://www.destyonline.com/what-would-you-do-with-5000-per-month/ http://www.destyonline.com/what-would-you-do-with-5000-per-month/#comments Mon, 02 Jul 2007 00:42:38 +0000 Desty http://www.destyonline.com/what-would-you-do-with-5000-per-month/ Maybe it’s just me, but everywhere I go, I ask myself the same question:

“How the heck do they make money with that?”

I go to McDonalds, see how many people work there, figure about how much per hour they’re making, see how long McDonalds is open, and wonder how many happy meals, or Big Macs they have to sell to make a profit on a daily basis.

Every business has a fixed cost, be in inventory, property costs, taxes, payroll, or salary for the owner. Bloggers have fixed costs. Web hosting and domain registration isn’t free, unless you use Blogger or Wordpress.com, but you’ll find that most serious bloggers have their own domain and servers. When bloggers are actually able to make money thru their blog, I wonder what they do with that money. I’m relatively new to the blogging scene, so I can’t think of any other fixed costs to blogging. So after paying their hosting and domain fees, is the rest of the income free cashflow?

It seems that alot of the people who read the ‘how to make money online’ blogs want to be able to quit their job and have blogging be their primary source of income. While that would be nice, there’s no way I could handle doing that. My JOB is that of a trucking dispatcher; I send semi tractor-trailers to shippers to pickup and deliver to customers. It’s a detail-oriented career and I love it to death. I’m the type of person who MUST keep his mind occupied, otherwise I’d go crazy! It’s just like if you won the lottery, would you quit your job?

What would you do with $5000 per month from blogging? Would you quit your job?

Here’s exactly what I would do:

  • Speed up current debt repayments while investing $500 per month into my current stock profile
  • Enlarge current emergency fund from 3 months to 1 year’s worth of JOB income
  • Inject more funding into current businesses to expand
  • Save up and make down-payment on larger house
  • Pay off new home
  • Invest the income

Every point, except for buying a larger house (wife would insist), is working towards not only securing future income, but also expanding future income. That’s why, currently, even though I could take a small salary out of my current businesses, I don’t; all business income is directly reinvested back into the business, along the lines of cash management established in my business plans.

I actually have a written cash management plan I wrote long ago, but I can’t find my old business journal (too busy actually running the business to write a journal about it anymore), so I’ll wing it.

We check to see if 90% of the monthly income will cover the fixed costs and any variable costs that have popped up. If it does, take 10% of the monthly income and put it into the investment capital pool, the rest goes to paying off monthly costs. Any leftover income gets measured against the predetermined business plan goals in expanding the business. If the leftover income will allow the next goal to start, it does so, if not then the leftover income goes into either the company’s money market account or into CD’s; where the money goes is a judgment call depending on how long I think it will take to pay the investment to start the next step on the business plan.

It would be SO easy to pocket that leftover income, but then my businesses would never get where I want them to be. Businesses are always a work in progress; they’re never exactly where you want them to be. While the end result of those businesses may be pie-in-the-sky goals, you take them one step at a time in a preplanned and measured set of mini goals. When the business is where you want it to be, then you can enjoy the fruits of your labors.

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]]> http://www.destyonline.com/what-would-you-do-with-5000-per-month/feed/ What’s With All This Beer??? http://www.destyonline.com/whats-with-all-this-beer/ http://www.destyonline.com/whats-with-all-this-beer/#comments Wed, 13 Jun 2007 17:41:00 +0000 Desty http://www.destyonline.com/?p=36 Everywhere I go, well, almost everywhere I go, I see people asking for donations on blogs in the form of ‘if you liked his post, buy me a beer.’ Too many people have their priorities out of wack! Have you seen the price of fuel these days? Hello???

So if you read an article of mine and you were entertained or learned something, if you would, please consider buying me a gallon of gas for my daily commutte. I drive 62 miles, round trip, per day, 5 days per week. Gas is around $3 per gallon here and I have to fill up every 4 days.

If you liked this post, please buy me a gallon of gas.

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]]> http://www.destyonline.com/whats-with-all-this-beer/feed/ The #1 Secret to Creating Wealth http://www.destyonline.com/the-1-secret-to-creating-wealth/ http://www.destyonline.com/the-1-secret-to-creating-wealth/#comments Sun, 10 Jun 2007 18:53:00 +0000 Desty http://www.destyonline.com/?p=31 Everyone wants to know how to get rich and create wealth. Everyone has a gimmick or something to sell. There are several ways for the normal person to get rich, but most of these require some education, training, or experience in certain skill sets.

There is a secret to getting rich that anyone and everyone can follow. Its so simple that most people discount it without trying.

Pay yourself first

Its that simple. A portion of what you make is yours to keep. Before anyone else can take their cut out of your check, pay yourself a set percentage from the gross. Put that money aside. Don’t use that money for a vacation, pay off a bill, or buy that killer dress. This money has one job to do and one job only: to make more money. We’ll go over simple ways for this money to make more money in a future article. For now, do this one thing:

Pay yourself first!

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]]> http://www.destyonline.com/the-1-secret-to-creating-wealth/feed/ My Other Blog http://www.destyonline.com/my-other-blog/ http://www.destyonline.com/my-other-blog/#comments Sat, 26 May 2007 01:46:00 +0000 Desty http://www.destyonline.com/?p=7 The Everyman’s Investment Education has been closed.  All my investment articles, now and in the future, will be listed on Desty Online. 

I’m adding my other blog, The Everyman’s Investment Education in as a link. Where at my Desty’s Adventure blog is my personal account of my adventures online to make a buck or two, the investment blog is my serious attempt to help others understand investing and what that actually means. Sadly, so many people think of investing as stocks and bonds, when it is so much more. I’m looking into the legality of offering actual investment advice over the blog, also, in the future, I plan to start investment partnerships, but that is some time away. So until then, keep checking in on The Everyman’s Investment Education.

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