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|The Beardstown Ladies' Investment Club|
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Beardstown Ladies Investment Club: We're very happy to be here.
Beardstown Ladies Investment Club: I think it's a good idea to have a few cards, but I think they need use, even if it's just nominal use. We advocate paying the full balance off monthly, rather than the minimum payment. And in the computer world we live in, I think credit cards are necessary so you can establish a line with TRW and some of the large credit analysts. TRW is large nationwide credit reporting agency. And if you have one and keep your balance paid, it will give you a good credit rating. I think having them and planning on not using them at all would not be --it's redundant. Why have them if you don't use them? To establish your credit rating? As long as they're paid off that shows good credit. Good establishment of credit.
Beardstown Ladies Investment Club: Personally, I just bought a laptop and I purchased a three-year warranty, but I also have a young child, and in relation to the cost of the computer, it was about 5%. If I didn't have a little boy, I probably would not have gotten it. So with electronics, it's a good point -- out in the Midwest we burn up electrical things a lot with power surges. And those can happen anywhere -- a city during the summer -- brownouts. It would depend also on the cost of the product. If it's very valuable it may be advisable to get the warranty. My laptop was $2,000 and the warranty was $97. It was a no-brainer for me. Each case is different, but depending on the price, make your decision.
Beardstown Ladies Investment Club: Our favorite way would be to join or form an investment club. A group of people get together with a set of written by-laws all available through NAIC -- National Association of Investment Corporations. [See bottom for information on how to get in touch with the NAIC. --Moderator). We're a partnership, but we belong to NAIC, who guide all investment clubs -- and individuals -- nationwide. It really is our favorite advice, because it's a way you can learn to invest with a small amount of money -- $25 to $100 -- and all the members pool their money and buy their stock as a club. Before they buy it, the members study the company and give each other advice before purchasing, and you can learn together to utilize the brains of the whole club. Use the power of 15 brains instead of one brain before you decide. It's also a social outlet, too. We call joining an investment club the three E's: education, meaning we learn together about stocks; enjoyment, which would be the social aspect (and we also say that there are no dumb questions among friends -- not in a classroom or a boss-employee situation -- but among friends); and enrichment, meaning we make money doing this. Learning together is advantageous. You can study together. It takes the fear out of investing, and out of learning. Because you're afraid when you're trying to learn something new. We learn as a group.
Beardstown Ladies Investment Club: Not really. It would depend. Everybody can make their own decision. We, as a club, still use the $25 a month amount. We don't want people to think they can't invest because they don't have the minimum amount. "Well, I don't have a thousand bucks." Actually, you can use any amount! There's also dividend reinvestment plans. They're called DRIPs. What you can do with a DRIP is take the price of one share of stock along with the broker's fee to buy that share and buy stock directly from the company in which you invest. Every company that's involved in DRIPs has a company that handles this. There's also books in the library you can get more information from about DRIPs, with addresses and direct lines of all companies with DRIPs. Check your local library, or bookstore, or barnesandnoble.com.
Beardstown Ladies Investment Club: Our club deals basically in stocks, but as a club you can make your own decision. But technically, we buy the individual stocks and we become our own mutual fund. We're not a registered mutual fund, but we're like a mutual fund, almost a type of a mutual fund. The NAIC also has educational programs to teach you which funds to buy. That can be your own club's individual decision. What we like about buying individual stocks is that it's kind of fun to follow the companies' activities. New products, new store openings. We bought Hershey's and we brought chocolate home to test the new products as they came out. We can see that we own a part of Hershey's. If you have a mutual fund, part of the fun is gone. To us it's fun to know -- "Hey, I own part of the company." Granted, mutual funds send you a prospectus about what they own. But our club just does stocks and we like it.
Beardstown Ladies Investment Club: I always like payroll deductions. When you put just a little back, you don't miss it. Put a little back, but also pay those credit cards. The interest on the credit cards can nullify what you hope to make in your first year investing. I think Americans need to learn live below their means. Spend less than you earn, and invest the difference.
Beardstown Ladies Investment Club: It takes more time and you really have to look. But they are there. I recommend looking in the front pages of Value Line, under "Timely Stocks in Timely Industries." It's in the very front index page. Most of those are 15 percent or greater per year growth.
Beardstown Ladies Investment Club: It does not say that is possible in our books, but there is a chapter where the material is addressed. It's in our third book, SMART SPENDING FOR BIG SAVINGS. Unfortunately, it's probably easier to get a college to bid for membership if you're great in sports versus academically.
Beardstown Ladies Investment Club: Well, if you want to go with the national average, Americans are saving less than 5 percent. So minimally, 5 percent. But if you want to grow, I'd recommend 10 to 15 percent. It's documented that first-generation millionaires save 20 percent. The American average is less than 5 percent. If you want to grow, save 10 to 15 percent; if you want to be a millionaire, save 20 percent -- 20 percent of gross, that is. It's kind of interesting -- once you get in the habit of saving part of your paycheck, it will become addictive, in a good way. You will wish to be saving and investing more as you watch it grow, rather than going on a spending frenzy and having nothing left at the end of your paycheck. Payroll deductions: out of sight, out of mind. You don't miss it.
Beardstown Ladies Investment Club: Beanie Babies! [laughs]
Beardstown Ladies Investment Club: If you can keep good records. But it is and you're still establishing a credit bureau record. Be sure to keep good records and make sure you've got the money in the bank! [laughs]
Beardstown Ladies Investment Club: It started from the Business and Professional Women's Club, BPW, and they encourage women to learn about money and investing. Our families now pay attention to the market news. My son, who's four, once came running into the room screaming, "Coke is $50!" We began investing as a family personally, which we would never have done before. And it's fun to watch your money grow.
The NAIC can be reached by phone at 810-583-6242, by fax at 810-583-4880, or by email at firstname.lastname@example.org. The NAIC Web site is located at www.better-investing.org. The Beardstown Ladies' online address is www.beardstown-ladies.com.
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