Be Wealthy & Smart

According to Nat'l Association of Realtors, who is buying homes in 2016? Let's take a look at who is buying homes, by marital status: Married 66% Single females 17% Unmarried couples 8% Single males 7% Interesting because from 2005 - 2010, 20% were single females, but only 15% in 2015. Homebuyers' median income: Married couples $99,200 Unmarried couples $84,800 Single males $69,600 Other $69,100 Single females $55,300 So although single females have lower incomes than others, they are a big group of buyers. Why? 1. Possess own home 38% 2. Change in family situation 11% 3. To be closer to family/friends 9% 4. Desire for smaller home 7% 5. Retirement 5% To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

These are financial moves, not a pro or con commentary for a candidate. Check your taxes - income deferred if possible If Trump gets the 15% corporate tax rate in, then look for the dollar to soar and almost $3 trillion to come home. 2. Health care - look for new plans. Participate in health savings accounts - a savings account used in conjunction with a high-deductible health insurance policy that allows users to save money tax-free against medical expenses. 3. Faster growing economy. Possible raising of the economic growth to 3 - 4% annually. During the Reagan years the stock market boomed and the economy boomed. I hope that can happen again! 4. FED has signaled higher inflation will be allowed. Expect higher interest rates. 5. Cycles don't change based on who is President. Cycle going into higher inflation favoring commodities - metals, mining, grains, agriculture, farmland, etc. One sobering fact - inheriting $20 Trillion in debt is a lot. I don't believe taxes can pay that back. At some point we will have to deal with the debt and reboot the system. That's another good reason to be out of financial instruments like bonds and be in tangible assets like I just mentioned. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn how to look at investment opportunities in stocks like Amazon. (CANSLIM Method) Listener question Friday! One of the members of the Be Wealthy & Smart VIP Experience asked this question: Linda, Do you have an opinion on Amazon stock? We live in the Seattle area and have watched Amazon change the entire landscape of Seattle. Because the fundamentals always say Amazon is too expensive, we never bought any stock, but you said not to worry about the PE ratio too much on growth stocks. What's your thought on this hometown company? Mandy What are some of the things to consider when looking at an individual stock to buy? Consistency of earnings CANSLIM: C - Current quarterly earnings per share. Have they increased quarter over quarter in a year? A - Annual earnings increases over the last 5 years? N - New products, management and other new events. In addition, the company's stock reaching new highs? S - Small supply and large demand for stock? Acquiring their own stock? L - Leader or laggard in an industry? Use relative strength as a guide. I - Pick stocks who have institutional sponsorship by a few institutions with recent above average performance. M - Determining market direction by reviewing market averages daily. How does this apply to Amazon? According to CNN Money: "Amazon posted a profit of $252 million for the third quarter, or $0.52 a share, falling short of consensus estimates for earnings of $0.78 per share. Its guidance for earnings in the upcoming quarter also came in below estimates." What new innovations do they have? The company is also adding 26 fulfillment centers this year, compared to 14 last year. Amazon Echo could be BIG. "Bezos is fond of talking about the "three pillars" of the company's business. Those include its e-commerce marketplace, the Prime subscription option and Amazon Web Services." "During an appearance at the Economic Club of New York on Thursday, Bezos said either the Echo or its TV division "could become a fourth pillar on its own." - CNN Money Consistency of earnings? It may also be a reminder that investors always want more. For years, Amazon was rarely profitable for long. Now it has been profitable for six straight quarters -- but apparently not profitable enough. Jeff Bezos, Amazon's founder and CEO, has traditionally focused on reinvesting all (or almost all) profits back into big bets like fulfillment centers, hardware, video streaming and cloud computing. Profitability? Amazon posted a profit of $252 million for the third quarter, or $0.52 a share, falling short of consensus estimates for earnings of $0.78 per share. Its guidance for earnings in the upcoming quarter also came in below estimates. Do you want to have a short or long-term investment? Could be moving to $1000 according to analysts. What is the market capitalization? Mkt cap $367.35B Could this be the first trillion dollar company? Yes. That's a triple from here. P/E ratio 194.22 - that means you are paying $194.22 for each $1 of earnings. Does that make sense? Growth has already averaged 37.94% for the last 10 years. Can that rate of growth continue? It would have to be historic. Is that possible? Maybe. Could take over retailing for most retailers. There's more competition coming I'm sure. They have other areas of business they are moving in. Those are also huge growth areas. They are building warehouses and buying airplanes and the hard costs of that don't thrill me. Is it your best investment? No. The time to buy the stock was 17 years ago like I did! Would you rather have something that could triple or something that could rise 20 or 30 times? Personally I don't own the stock anymore. I do think it will reach $1,000. If I were going to pay that per share, I'd rather own priceline.com because it's leveraging cyberspace and is not becoming physical. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn whether it makes sense to buy or rent a high-end home. Interview with Jason Hartman of the Creating Wealth podcast. http://bit.ly/wealthpod To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn what to look for with dividend stocks. I saw an article about 3 stocks that are a "must own" for retirement. Whaaat? One was a huge telecom, one was a gas company and one was an insurance company. No where did it talk about earnings growth or dividend growth. I've talked about stocks. What makes them go up. It's all about earnings. Dividend stocks are no different, except they also have a nice dividend. You still want to have companies that are high quality, steady growth, increasing dividends, etc. IBD does a good job of curating dividend leaders. I've taken their list and picked 10 that seem to me to be a good mix and diversified. 1. International Paper 4.11% 2. Altria Group Inc. 3.7% 3. Toronto Dominion Bank 3.67% 4. IBM 3.67% 5. Cisco 3.4% 6. Paychex 3.34% 7. Prudential Financial 3.31% 8.Merck 3.13% 9.Qualcomm 3.1% 10. Proctor & Gamble 3.07% Again, all the credit goes to IBD, but I wanted to share a list of dividend paying stocks that are quality and fit all the aspects we talk about. You can find this in your IBD and I'll post on my website under podcast #201. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn ways technology is impacting value investing and ways it's not. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod Excited to have podcast #200! Thank you for listening to Be Wealthy & Smart! If you're a regular listener, I'd love to have a review from you and hear your thoughts about the show! Listener question Friday! Here's a question from Torben. Hi Linda, I've listened to your podcast for several months now and find it very useful. Your pragmatic approach to finance is very applicable in real life. I personally apply the value investing approach with inspiration from the growth investment theories. Perhaps you could do a podcast about value investing? From Graham and Buffet, over the ModernGraham approach, to how value investing will play a role in an investing world, where tangible assets are much smaller than intagibles, and most products and services can be replaced by technological developments in an instant? These developments challenge the fundamental value approach, which looks for large, stable, and cash generating businesses - so how are these theories going to survive in a world where these types of companies become more scarce? I hope this could be inspiration for a podcast topic. Best regards, Torben In value investing, you're looking to buy businesses below their value. Of course a business is worth it's assets minus liabilities + a multiple of cash flow. What is the multiple? It depends on the type of business, how regular the income stream is, etc. A steady rental income vs. a biotech. Being overly concerned with a PE ratio can be a value trap. Today, many financials have low PE's, but I wouldn't want to own them. I've found many of the best quality stocks have high PE ratios and I've always been ok with that as long as it's not excessive. There are times that the whole stock market can get excessive PE ratios, that's a time to be cautious. In 1999, PE's hit 50 and higher, but it was in 2009 that PE's hit 120! Today, they are at about 23-24 which is on the higher side historically, but no where near where they have been. A PE will average around 18, so anything above that is more expensive and below is considered a value or cheap. I've found placing too much emphasis on PE is NOT the way to buy stocks. For me, earnings are everything and IBD is good at putting stocks through a CANSLIM filter that picks the best for you. Some in the IBD 50 even have PE ratios of 14, 16, & 22 if that's important to you. They are not "value" stocks, they are "growth" stocks, but that's a matter of philosophy, personal choice and comfort level. I've not found a lot of investors who can copy Warren Buffett's success, but I have seen a lot of investors who are very successful investors without following his or Ben Graham's formulas. So what about valuing businesses? If a business doesn't have tangible assets, but is intellectual property, like an app, you're going to base the valuation more on the cash flow. If you're buying a gold mine and there's gold in the ground, obviously you have to value the gold separately from the cash flow. It doesn't change value investing. You still want to buy at a discount. You still can have a "margin of safety" if the valuation is higher than the stock price. If Google is worth X because of it's advertising revenue, but it's selling at a lower price because the stock market drops, you'll still want to buy it on sale! The fact that there are more businesses being started with intangibles is probably a long-term trend. But there are still a lot of brick and mortar businesses that are getting funded. Clothing, food, beverages, restaurants, etc. When making a long-term investing decision, you will want to think about such things. I think that's why Buffett was reluctant to invest in tech in the past, because it was hard to know who was going to be a winner long-term. I remember Nokia phones and Blackberrys and how they were the rage before iPhones replaced them. If Apple doesn't keep innovating, another phone may come along and replace it! Think about the things that we will still need to be using in 10 - 20 years. Keep away from a "trend" that could be a "flash in the pan" like maybe "Pokemon go"? Want to move ahead and get your money, wealth & net worth moving in the right direction?

Learn why individual stocks are never in style and why they might be right for you. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod If you've listened to me for a while, you know my story - that I was in the financial world working for money management firms. It was sacrilege to invest in stocks on your own. I did it any way and I turned a 5 figure investment into $2 million in several years. When I first got into financial services, there were "stockbrokers" who picked stocks for you. They had companies they built positions in and would put all of their clients in them. If it changed they would sell them all out of them. I had a friend who was my mom's age who was the secretary of the stock analysts. When they recommended stocks, she bought them for herself. She retired a multi-millionaire even though she had a modest salary. The only way that is possible is by compounding at a high rate. After the stock phase came the mutual fund phase. Instead of stockbrokers, they became "Financial Advisors" who placed your money with money managers (like the companies I represented). The FA's became asset gatherers but didn't manage the money themselves, they outsourced it and collected fees. Today passive investing is the rage. ETF's came into being because many professional managers were not outperforming the indexes, so ETF's were created to mirror indexes. Investors no longer try to out do the mark This year the S & P is up 3.5% YTD. That's it. That's all the return you're getting in the S & P. Small caps are outperforming. With the dollar so strong, it's hard for multi-nationals to make money. Corporate profits have been declining for 3 quarters. Small companies might not have business outside the US so they aren't impacted. Therefore their earnings are doing better. Small caps also do the best at the end of a bull market, this one being one of the longest in history. Asset allocation becomes important. Where your money is invested matters most. It's time to look at individual stocks again because I think you can do better than 3.5% YTD! Not on your own, not by throwing darts, not by "buying what you know", but by following earnings. Corporate earnings are the biggest determinant of a stock's price. IBD does the work for you and screens stocks through their funnel. If you haven't heard podcast #195 about the 8th graders in St. Agnes' school who picked stocks and got 25% in 2 years, you need to listen. Peter Lynch wrote about them in his book. I have the portfolio on my website. When you look at what they owned in 1990, it was Disney, Nike - some great companies that you recognize today. Success leaves clues and good companies are growing at high rates for a lot of years before they become blue chips. Start learning about individual stocks. I'm going to be teaching about them because I think it's a lost art, but one that is to worthwhile. Did you hear about the stocks and the compounding rates in my last podcast? I mentioned: Netflix 42% Amazon 37% Apple 28% Nike 20% Google 15% Starbucks 14% Get a current IBD and William J. O'Neil's book off the Resources page on my website. Thank you. It's time to resurrect individual stock picking, but only with the right tools. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn 3 reasons why reduced spending and savings are not going to make you wealthy. You still need to invest! Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod I heard it from financial podcasters and bloggers - building wealth is about spending less and saving more. What? That is only true if you make multiple hundreds of thousands of dollars and can save $1 million in a few years. For most people, that's not realistic! If you're making $75,000, paying for a house, car a spouse and 2 kids, there is NO WAY you are going to save yourself to wealth! You can't possibly save enough to become wealthy. Do you want to be a smart spender - yes! Can you "frugal" your way to wealth? Not in most cases. But you can invest your way to wealth. Most "experts" won't tell you that. Wealth = Compounding. There are only 3 factors that are part of the wealth building formula. Time. How many years you have to invest. Amount. How much money you have to invest. Capital. Compounding rate. What rate you can compound at. Example: $100,000 15 years, 8% = $317,216 If increase to 30 years: $100,000, 30 years, 8% = $1,006,265 $100,000, 15 years, 18% = $1,197,374 $100,000, 30 years, 18% = $ 14,337,063 Where can you find that rate of return? You know I'm a fan of IBD, the IDB 50 has a 17.9% rate of return! On podcast #195, I talked about the St. Agnes school of 8th graders that made 25% over 2 years by using IBD. What about since 2006 - 2016? How about compounding rates? Netflix 42% Amazon 37% Apple 28% Nike 20% Google 15% Starbucks 14% Is it possible to find a company like these? IMHO yes. They leave tracks and they are leaders. Maybe even in IBD 50. Or you can start your own business. Businesses can grow at high compounding rates too. Sometimes in the thousands of percent. Check out some of the fastest growing companies in America and their compounding rates. That's why 77% of wealth is creating by owning a business, including being a professional (doctor, lawyer, etc.). To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod Twitter has been in the news as a company that is for sale. Apparently Google, Yahoo, salesforce.com, Disney and others have been taking a look at it. IMHO, it belongs with a media company because Twitter is the next form of media after radio and TV. As I mentioned in my previous podcast about the DDoS cyber attack, I found out about it because Twitter was down and I Googled it. This is the way we think now. I didn't turn on TV until it was my fourth choice for news after Twitter, Facebook and Google! It's the first 2 way media we've had, meaning you can get instant feedback from viewers. For example, BRAVO TV uses it to take polls on their show - who is the most/least popular? They also use it to gather questions to ask in interviews. But more recently mainstream media has been using it as a source of stories. Media used to be top-down, but now they are driven by the narrative that is occurring on the "trending hashtags" of Twitter. It's what people are talking about and thinking - in real time! The first time I used Twitter years ago, I thought it was crazy. Someone tweeted about what they ate for breakfast. I couldn't care less! Then I used it as a business tool, posting blogs and podcasts. People are using it as a media platform. Combined with Periscope, anyone can be their own TV station. It's live, then recorded and tweeted out to your followers. The reason I bring this all up is I think Twitter should be bought by a media company - either a TV station or a newspaper. It would fit perfectly with their objectives, they could raise revenues by getting more advertising and it would be the next phase of media in this age. If I were the investment banker on the deal, I'd pitch it hard to the Washington Post, which also is owned by Jeff Bezos, who owns Amazon and is the second richest man in the US. It would be perfect for both companies. Although there are rumors from time to time about who will or won't buy Twitter, the main problem is the $16 billion to $18 billion valuation. It's very richly valued and although I think it will be worth much more in the future, not everyone wants to shell out that cash. Personally, I think it would be a much better buy than the $26 billion Microsoft paid for LinkedIn, but we'll have to wait to see if I'm right about that. Whomever buys it seems to be waiting for the price to drop some more, but I do think when the price is right, a buyer will step up to the plate. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. The morning of October 21st I tried to connect to Twitter to see the latest news and my computer kept saying it couldn't find the server. I went to Facebook and nothing was trending over there. I Googled it and found out about the attack. I turned on the TV and there was nothing, as if it was blacked out - maybe to keep everyone calm? It scared the heck out of me because I knew if it attacked a few sites, the whole internet could possibly go down. I checked my bank, it was still working online. I could only imagine how upset some Paypal customers were, my friend being one of them. She went apoplectic. The cyberattack of October 21, 2016 was notable for many reasons. 1. "It attacked the DDoS or A Distributed Denial of Service (DDoS) attack is an attempt to make an online service unavailable by overwhelming it with traffic from multiple sources. They target a wide variety of important resources, from banks to news websites, and present a major challenge to making sure people can publish and access important information." -DigitalAttackMap.com They go on to say: "Attackers build networks of infected computers, known as 'botnets', by spreading malicious software through emails, websites and social media. Once infected, these machines can be controlled remotely, without their owners' knowledge, and used like an army to launch an attack against any target. Some botnets are millions of machines strong." "Botnets can generate huge floods of traffic to overwhelm a target. These floods can be generated in multiple ways, such as sending more connection requests than a server can handle, or having computers send the victim huge amounts of random data to use up the target's bandwidth. Some attacks are so big they can max out a country's international cable capacity." 2. It effected many large websites such as Twitter, Paypal, Amazon, Reddit and Pinterest among others and cost businesses over $100 million in lost revenues. This is important because we take for granted our ability to read news, shop, communicate and bank online. While the waves of attacks kept these websites down, I realized how difficult it would be to communicate if we had a full-on attack or Electro-Magnetic Pulse that would take down the grid, which actually got me thinking of communication devices that would work if it all went down. The one that kept coming up was a ham radio. This is one of the only things that will work in case of emergency. Ham radios require a short education to use and the passing of a quick test, but otherwise seem easy to operate. 3. Research about what kind of hacking could occur next led me to find out that we have vulnerabilities in our apps on our phone. I'm going to read an article to you and leave you the link to it on my website at www.lindapjones.com at podcast #196. Just to give you a short summary before I read the article, it mentions that apps on our phone, even the blackjack app, may have malware that can cause a phone virus. Here's the article: http://www.nbcnews.com/tech/security/new-way-you-ll-get-hacked-through-banking-app-your-n651571 The conclusion is that we need to add an anti-virus app to our phones to protect them. That's why I added the free McAfee anti-virus app to my phone. It backs up contacts, photos, etc. and allows you to locate your phone if lost, all while protecting your information. It's CaptureCam emails you the photo and location of anyone who tries too many times to unlock your vault with the wrong PIN. I hope this protects you from getting hacked from your banking app on your phone. Get my "11 Quick Financial Tips to Boost Your Wealth" at www.lindapjones.com.