Be Wealthy & Smart

Learn why profits matter. Snapchat, the social media turned camera company went public last week. It was the biggest IPO Wall Street has seen since 2009. With little revenue (and much of it mysteriously appearing right before the IPO, like $1 billion from Google), it is nowhere near worth a $24 billion valuation! Years ago Facebook tried to buy it for $3 billion which was very generous. SNAP's $30B market cap, 74X sales and $15million per employee. Could be the sign of the peak of the stock market bubble here. SNAP lost $514 million last year and says "it may never be profitable" according to Business Insider. You have to detach yourself from looking at a stock price and look at this as a business you're investing your hard earned money into. There are many established, profitable businesses with market valuations less than SNAP. I'll post a chart on my website in the show notes. According to IBD, "Snap is set to be the first IPO of a high-profile unicorn since the term, which describes privately held companies with a market valuation of $1 billion or more, emerged. More than 200 firms currently fit that definition with a total valuation near $760 billion, according to TechCrunch." I'm having major deja-vu from 1999. Valuation matters. Even if the price rises, this is all hype and not much substance, so I would steer clear of this unicorn. I think it's aptly named, since unicorns are just a made up illusion. Move your net worth in the right direction by getting "11 Quick Financial Tips to Boost Your Wealth" at www.lindapjones.com.

Learn how to know when to sell a stock or investment. It's listener question Friday! I had a question from a listener about their investment portfolio: Linda, It is my very first stock "try's" . A very dear friend of mine started this portfolio for me and she has tried to teach me a little about stocks along the way. I want to learn more. I just am looking for a little direction. I have about $100,000 to invest. This is outside the my emergency savings of about $75,000. _______ She sent me a list of her stocks and I could see a great many of them were not quality names nor were they profitable. It concerns me to hear that a friend is making your investing decisions. You want to be in control of your investments and know what you own and why. Why do you want to own certain companies? Are you familiar with the company or do you think the sector they are in is going to be fast growing and profitable? Remember you are buying businesses. I couldn't tell the investment strategy from what I saw, so I'm a bit perplexed how your friend was selecting your stocks. Having said that, many of your stocks had losses. If you have more than an 8% loss, perhaps consider selling it. I'm not saying that at the bottom of the market after a steep decline, in which I might attribute some of the decline to the market But this is in a bull market, so I would consider selling and reallocating the money. You want to sell your losers and keep your winners. Give the winners time to run and continue to go up. Stocks that have been rising tend to keep rising, so keep those. I would get yourself up to speed on investing (good job joining the VIP Experience) so you can learn about investing. We have all levels of investors in the VIP Experience and I'll be keeping you up to speed with important articles and market commentary as well as ETF selection. I have lots of podcasts about investing, so I suggest you check them out. They are evergreen and most don't get dated. I try to keep them classic so you can use them as your investing library along with the VIP Experience. When creating an investment portfolio from scratch, I always recommend that investors follow an asset allocation model meaning they have some large caps, mid caps, small caps and international. You can add real estate and precious metals to that and have a well-diversified portfolio. If you want to add bonds, I would use short-term bonds since we are now in a rising interest rate cycle. I prefer to use ETFs because they are low cost and diversified, so you're buying a basket of stocks and not individual stocks. That's a better plan for a beginner. I'd love it you'd leave me a review on iTunes or Stitcher Radio. Move your net worth in the right direction by getting "11 Quick Financial Tips to Boost Your Wealth" at www.lindapjones.com.

Devin Carroll, a seasoned financial advisor specializing in Social Security and retirement planning, dives deep into the complex world of Social Security benefits. He discusses the critical decision of when to take benefits, weighing the pros and cons of early versus late retirement. Listeners gain insights into the impact of these choices on income, trends in retirement planning, and the future sustainability of Social Security. With real-life examples, he emphasizes the importance of strategic planning to secure financial stability in retirement.

Learn where most millionaires live and don't live and 2 reasons why it may change in the future. This article was on CNBC. It listed where millionaires live and don't live. It was thought provoking for a few reasons. First let me read you the list of 5 cities most millionaires live in. 1. Maryland – 7.55 percent 2. Connecticut – 7.4 percent 3. New Jersey – 7.39 percent 4. Hawaii – 7.35 percent 5. Alaska – 7.15 percent This is not surprising for a couple reasons. I learned a long time ago that people can make a lot of money by being where large amounts of money flow. Since Maryland and WA DC are where large amounts of government money flow, it makes sense these are in the top 10 per capita. (I'm not suggesting anything illegal is occurring). It reminds me of the Tom Wolfe novel Bonfire of the Vanities when Sherman, the protagonist and "Master of the Universe", his wife describes to their daughter, Campbell, what her bond trader husband does: "Just imagine that a bond is a slice of cake, and you didn't bake the cake, but every time you had somebody a slice of the cake a tiny little bit comes off, like a little crumb, and you can keep that. […] If you pass around enough slices of cake, then pretty soon you have enough crumbs to make a gigantic cake." Chapter 10, page 229 That can apply to many types of businesses, but if a lot of money is flowing, someone's going to be taking crumbs from it, so it's no surprise to me that #1 is Maryland, near the government and #2 is Connecticut, home of many of the largest hedge fund traders and #3 is New Jersey where a lot of Wall Street firms work. WA D.C. is #9. #4 is Hawaii - you have to think a little harder, but their real estate market is very high from selling to Americans and Japanese, so I would imagine real estate has made a huge contribution to that market. Having a limited population due to small land mass also helps the per capita number. #5 being Alaska is a bit trickier. Of course Alaska is known for oil and military among other things but since this is per capita and Alaska doesn't have a huge population, it skews it a bit. For total numbers, CA, TX & NY win hands down. I don't think anyone is surprised by that. The bottom five are: 47. Alabama – 4.46 percent 48. Kentucky – 4.32 percent 49. West Virginia – 4.22 percent 50. Arkansas – 4.08 percent 51. Mississippi – 3.77 percent I'll post a link to the article on my website at lindapjones.com. Not really a surprise here either. Real estate, high tech, etc. are not these states' strong suits. But here are the game changers… 1. People still don't realize you can work from anywhere and make a very good living with your computer. They don't realize there's a quiet entrepreneurial revolution. Money is being made online from anywhere with a computer. Get your domain name, set up hosting and learn how to start a blog. Everyone should have a website. Grab your name as a domain name. Go here for directions how to get started: http://www.lindapjones.com/how-to-start-a-blog/ 2. Recently I saw a flying car. I will post a link to it on my website. It drove and flew! What are the ramifications of being able to fly door-to-door to where you want to go?! If this technology becomes commercially viable, property that is out farther will start to sell because the commute will be shorter. You also won't have to live near your job if you're an online entrepreneur. Entrepreneurship is the future. You could live in the San Juan Islands and fly into Seattle. How many years are we away from this? Who knows but it's coming and so are more creative ways to make money. You won't need to live near overpriced real estate for much longer. Please leave me a review on iTunes or Stitcher Radio. I really appreciate it! Move your net worth in the right direction by getting "11 Quick Financial Tips to Boost Your Wealth" at www.lindapjones.com.

Learn how to prioritize paying bills, debt and expenses. Listener question today. Dana asks: Linda, there are several things we want to do this year and are wondering about the best use of our funds to do so. 1. Consolidate some miscellaneous credit debt or pay it off in full ($8k range) 2. Home updates/renovations - small scale projects like painting, lighting, window treatments ($5k total range) 3. Upcoming medical expenses for birth of child ($3000 based on max out of pocket per policy) 4. Upcoming 1st installment property tax bill ($4500) We have the following sources to draw from to do all of the above: 1. Cash - enough to pay all of the above and still have 12+ months worth of total monthly expenses in cash savings 2. Credit - several rewards/points cards, average interest rate 11-15% 3. Home equity - access to $32k from our existing Home Equity line of credit at 4.25% interest/only 4. Sell some securities from a brokerage account - $58k in non-retirement investment accounts that we sell some shares 5. Federal Tax refund - expecting $8k-$9k refund per CPA Are there advantages/disadvantages to doing the above via one form of payment or another? My personal comfort level is to keep plenty of cash accessible. I have allocated several different savings accounts specifically for taxes, home improvements, travel, etc and can pull from those. Income will vary so I am not really counting on using our income for these items, as it will just be used for our regular recurring monthly expenses. Thanks, Dana Before I answer that, let's prioritize the payments and then look at the best way to pay them. I want to look at the non-elective expenses - ie. those things you can't put off. #1. Property taxes of $4,500. This is a MUST do, no wiggle room here! The consequences of NOT paying your taxes are too high, so this has to be priority #1. #2. You also can't put off the birth of a child. You will have medical expenses. Must allocate the $3,000 maximum costs. #3. Normally, I would look at the credit card debt first but because you had 2 non-negotiable goals above this, it became priority #3. Look to normally eliminate credit card debt as your #1 goal because it is so expensive. Dana tells us it's 11 - 15% interest. When you pay it, it's like earning that rate of return. Where else can you earn 11 - 15%? Pay off the credit cards. #4. Remodeling. This is the one with the most wiggle room that you can put off, do part of it, or do all of it. Minimize costs as much as possible.

Learn the truth about money and wealth building. I'm going to push back on experts who write about how to build wealth! The articles usually go something like this: Budget yourself silly. Don't spend any money. Don't live beyond your means. Pay off all debt. Contribute to your 401k. Have a great life! Lol! Some of these have merit, but some don't. I'll go through each point in a minute. I'm going to give you a step-by-step plan. There are two different financial scenarios - one scenario for people that have massive credit card debt and one for those who don't. Credit card debt and student loans are a real problem that need to be taken care of first. High interest rates compound and grow quickly so the debt will grow fast unless you vigorously attack it. Make them Priority #1! Student loans may be at low interest rate, but it is not excusable in court even in bankruptcy. It's a permanent weight around your neck that has to go! Let's revisit the points I mentioned earlier. 1. Budget yourself silly. 2. Don't spend any money. Budgets can be hazardous to your wealth! Like diets: feel restrictive, want to go off them, can give you a bad relationship to money. Don't live beyond your means - Obviously! Don't get yourself into consumer debt except a mortgage. Pay off all debt - wrong! A mortgage is ok, tax deductible. You need to establish credit. Pay off debt that's not mortgage debt or business debt that you are successfully using to grow your business. Contribute to your 401k - yes, but it's not enough if that's all you do to save and invest! Have a great life! Lol! How can you spend nothing, try to pay off a huge mortgage, pay for kids to go to college and have any money left to enjoy life? The second financial scenario is for people who earn more than they spend. For them I have advice that I call the 6 Steps to Wealth. 1. Create a wealthy mindset Work on a positive mind, thoughts, goals. Repetition. 2. Save a nestegg Save money to invest, need capital to start. 3. Find a mentor Follow people who have successfully made millions, not starving journalist. 4. Invest in a money engine Must invest to create wealth! Can be a business, stocks, real estate, etc. No one way is right, but be smart about valuations you are paying! Money moves in cycles and peaks in bubbles. 5. Compound at a high rate Let your money compound. Try to improve your rate of return. Bank vs. stocks 6. Protect your wealth Don't lose the wealth you have created. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn the world's most affordable housing markets (8 out of 10 are in the US). Source: 13th Annual Demographia International Housing Affordability Survey Looked at "affordability in 92 major housing markets in nine countries found 11 affordable areas - all in the US." "The survey used Q3 2016 data to gauge the 'median multiple', the ratio of median home price to median pretax income." Ratio of median home price to median pretax income, with 3.0 or below being "affordable." For example, if median pretax income is $100,000, you can afford a $300,000 home pretty easily so it's deemed "affordable". According to CNN, the world's most affordable housing markets are: 1. Racine, Wisconsin, US 2. Bay City, Michigan, US 3. Decatur, Illinois, US 4. Elmira, New York , US 5. East Stroudsburg, Pennsylvania, US 6. Karratha, Australia 7. Lima, Ohio, US 8. Moncton, Canada 9. Peoria, Illinois, US 10. Rockford, Illinois, US (Source: 13th Annual Demographia International Housing Affordability Survey) It's interesting to note that housing inventories are at 17 year lows, indicating a possible peak of a bubble? Listen to podcast 228 for the most affordable housing markets in the U.S. On my website www.lindapjones.com, I will post a link to the entire report. It's quite interesting and I think it's worth your time if you're interested in real estate. Go to www.lindapjones.com/worldsmostaffordablehousingmarkets Here is the link to the full housing report: http://www.demographia.com/dhi.pdf If you enjoy the show, I'd love to have your review on iTunes or Stitcher Radio! It's the one way I get to hear from you what you like about the show and a way to give back if you have received knowledge from listening to the show. I'd so appreciate it, thank you in advance! For more information, go to www.lindapjones.com.

Learn the least affordable housing markets in the world. Investor's Business Daily report, week of 2/6/17. "The survey used Q3 2016 data to gauge the 'median multiple', the ratio of median home price to median pretax income." Source: 13th Annual Demographia International Housing Affordability Survey Ratio of median home price to median pretax income, with 3.0 or below being "affordable." Ratio of median home price to median pretax income, with 3.0 or below being "affordable." For example, if median pretax income is $100,000, you can afford a $300,000 home pretty easily so it's deemed "affordable". The 13th Annual Demographia International Housing Affordability Survey covers 406 metropolitan housing markets (metropolitan areas) in nine countries (Australia, Canada, China, Ireland, Japan, New Zealand, Singapore, the United Kingdom and the United States) for the third quarter of 2016. A total of 92 major metropolitan markets (housing markets) --- with more than 1,000,000 population --- are included, including five megacities (Tokyo-Yokohama, New York, Osaka-Kobe-Kyoto, Los Angeles, and London). "Overall, there are 29 severely unaffordable major housing markets, including all in Australia (5), New Zealand (1) and China (1). There are 13 severely unaffordable major markets in the United States, out of 54. Seven of the United Kingdom's 21 major markets are severely unaffordable and two in Canada." - NewGeography.com Hong Kong, Sidney and Vancouver are the 3 most unaffordable housing markets in the world. 1. Hong Kong 18.1 2. Sydney, AU 12.2 3. Vancouver, Canada 11.8 4. Auckland, NZ 10.0 5. San Jose, CA 9.6 6. Melbourne, AU 9.5 7. Honolulu, HI 9.4 8. Los Angeles, CA 9.3 9. San Francisco, CA 9.2 10. Dorset, UK 8.9 Interesting to note, Vancouver BC put a 15% foreign buyer tax on housing which reduced foreign purchases dramatically. The city of Vancouver also instituted a 1% vacancy tax on the assessed value of an empty property, as many foreign buyers let houses sit empty. In response, many Chinese buyers have moved to the Seattle market. China spent a record $33 billion on foreign real estate in 2016, according to global real estate group JLL. Hong Kong median home price $5,422,000 and income $300,000 vs. San Jose, CA $1,000,000 and $104,100. Prices in Australia, Vancouver, Seattle seem to be inflated from Chinese buyers - are they dependent on the Chinese economy? On my website www.lindapjones.com, I will post a link to the entire report. It's quite interesting and I think it's worth your time if you're interested in real estate. Go to www.lindapjones.com/leastaffordablehousingmarkets Here is the link to the full housing report: http://www.demographia.com/dhi.pdf If you enjoy the show, I'd love to have your review on iTunes or Stitcher Radio! It's the one way I get to hear from you what you like about the show and a way to give back if you have received knowledge from listening to the show. I'd so appreciate it, thank you in advance! For more information, go to www.lindapjones.com/podcasts

Learn the most affordable housing markets in the U.S. Graph printed in Investor's Business Daily report, week of 2/6/17. Source: 13th Annual Demographia International Housing Affordability Survey Looked at "affordability in 92 major housing markets in nine countries found 11 affordable areas - all in the US." "The survey used Q3 2016 data to gauge the 'median multiple', the ratio of median home price to median pretax income." Ratio of median home price to median pretax income, with 3.0 or below being "affordable." For example, if median pretax income is $100,000, you can afford a $300,000 home pretty easily so it's deemed "affordable". The 13th Annual Demographia International Housing Affordability Survey covers 406 metropolitan housing markets (metropolitan areas) in nine countries (Australia, Canada, China, Ireland, Japan, New Zealand, Singapore, the United Kingdom and the United States) for the third quarter of 2016. A total of 92 major metropolitan markets (housing markets) --- with more than 1,000,000 population --- are included, including five megacities (Tokyo-Yokohama, New York, Osaka-Kobe-Kyoto, Los Angeles, and London). 1. Rochester, NY 2.5 2. Buffalo, NY 2.6 3. Cincinnati, OH 2.7 4. Cleveland, OH 2.7 5. Pittsburgh, PA 2.7 6. Oklahoma City, OK 2.9 7. St. Louis, MO 2.9 8. Grand Rapids, MI 3.0 9. Indianapolis, IN 3.0 10. Kansas City, MO 3.0 The United States scores 3.9 on the index. On my website www.lindapjones.com, I will post a link to the entire report. It's quite interesting and I think it's worth your time if you're interested in real estate. Go to www.lindapjones.com/affordablehousingmarkets http://www.demographia.com/dhi.pdf If you enjoy the show, I'd love to have your review on iTunes or Stitcher Radio! It's the one way I get to hear from you what you like about the show and a way to give back if you have received knowledge from listening to the show. I'd so appreciate it, thank you in advance! To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn how to run your family finances like a Chief Financial Officer (CFO). Interview with author of Family Inc., Doug McCormick.