Shoebox Investor

What is a shoebox investor? An investor who generally pays himself first. The idea is that any money you can store in a shoebox or piggy bank, should be invested in the market. It is not how much you invest, it is the time value of money you should focus on. The earlier you put the money in the market, the longer you keep it in, the higher the chances of reaping the benefits of accumulating dividends. The reinvested dividends will buy you more shares.

Pay yourself first

Monday, February 18, 2008

Invest with emotions

The conventional thought is not to invest in the market with your emotions
involved. I am here to tell you to do the opposite. With the key factors
(listed below), you should go with your gut feeling. These factors include
the following.

1. Does the company have a brand recognition? Eg Coke, John Deere, IBM,
BofA.
2. Does the company have a large market cap...in the billions?
3. Is the PE ratio low?
4. How is the EPS?
5. Does it give dividends?

Now, as you can see from the above Google fits all with the exception for
#5. And, therefore should not be a long-term investment company in your
portfolio. The reason for this (and Apple) is that if the stock price goes
down you don't win. But, if dividends are given out, you still receive
returns.

Pay yorself first.

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