Building A Stock Investing Strategy

My friend Adrian over at Shareyournumber.com asked me to write a post on how to build a strategy to invest in stocks.

To check out the post and comment click here. Enjoy!

Discipline Is Imperative

Discipline is the characteristic needed to:

• push yourself past the point most others stop at
• Resist the urge to spend more then you should
• Pull second shift working on your part time business after getting home from your day job
• See the potential in that stock, ignoring the fear
• Continue to learn, grow and risk

...succeed in whatever you want to succeed in.

I'll leave you with some motivational quotes.

"Discipline is choosing between what you want now and what you want the most."
"Discipline is the bridge between goals and accomplishments."

Motivate Yourself To Make Money Part 2

This is the second part of an X-part post (I'm gonna just keep posting on this subject as I come up with ideas) which focuses on becoming motivated from the inside, because most likely you don't have a personal motivation coach just waiting in the wings to cheer you on when you don't feel like pushing forward.
My tip for this month is to constantly tell yourself, "my time is valuable" whether you think it's true or not. Would someone who's time is valuable watch television, stumble aimlessly online, or socialize to much? The answer is obviously, no.
I also find this statement empowering and enlightening in a plethora of situations. So try it the next time you find yourself evading a task you need to accomplish.

Feelings On Retirement

My girlfriend is taking a class called "Dimensions of Aging" and retirement is a large subject in class.

One assignment in the class was to watch a PBS documentary on retirement and answer several questions. One question was...

5. After looking at this documentary,...how do you feel about the process of retirement? Do you plan on retiring from the workforce in the traditional fashion (i.e., taking Social Security as well as withdrawals from any private pension plans you might participate in), or do you plan on working beyond the normal retirement age determined by Social Security? Do you have any other questions or feelings about the process of retirement after viewing this video?

The link to the video is Here. By the way, it's 2 hours long; so I'll understand if you don't watch it. And just in case your curious, here's my answer to the above question.

"I believe the process of retirement is as good as can be expected. The population as a whole is asked to delay gratification now in anticipation of the inability to work at a reasonable age. This request is asked 30-40 years prior to gratification. In the age we live in today of McDonald's and microwaves, asking someone to delay gratification and set a significant amount of money aside each paycheck is asking a lot.
I plan to retire in my early 30's from the sale of various independent business' reinvested in stocks and possibly real estate.
I feel that society as a whole has lost the discipline and frugality needed to endure the temptation to spend more then you earn and not save at all. These virtues need to be infused into the curriculum of pre-k through high school; until we give our young the tools to act responsibly, how can expect them to save and invest in the fashion needed to independently secure their future?"

What's your answer?

The Simple Choices

The everyday choices in life become simpler when a decision is made to settle for nothing less then spectacular. When a student attends high school and he or she wants to go to one of the best colleges in the U.S., the decision is simpler then a mediocre student anticipating a position at mediocre college. The decision is much more complicated for the second example student then the first, because the choices offered to those who demand a seat at the top are very few.
The same is true when making a decision to retire thirty-five years early. The decision to live fearlessly becomes simple. The decision to try hard every day becomes simple, and the decision to actually follow through and take those leaps of faith is simple. It simply must be done. Although the option to get a real nice and cozy job where mediocrity is protected is always an option for those who want to work till 65.

401(k) Adjustment

Today I went ahead and adjusted my 401(k) to 1% over my employers match down from 22%. I added 1% to the match because I want to ashore I meet the requirements for the company match. If I were to allocate less then the company match, I wouldn't meet the requirements and the company wouldn't add any money.
The reason I did this is to donate more money to investments I can take advantage of right now! The money in retirement accounts can only be tapped (I'm not including things like home purchase, sickness, ect.) after the much later years of 59 and 1/2. This age is unacceptable.
So why don't I just reduce my 401(k) contribution to 0%, you may ask. Well, my momma didn't raise no fool and if you want to give me free money I'll take it.
p.s. check out this website which explains government subsidized loans as well as other benefits to take advantage of for first time home buyers.

Save

Following the last post about self-investing, I would like to start exploring other areas of investing probably considered more conventional.

I will be researching, writing and calculating how to invest. Assuming you are below the age of thirty (>80% of my investment funds will be in stocks), have some money to invest (meaning, you can afford to lose it) and are willing to accept more then average risk, these posts will apply to you. I have a fairly high level of risk tolerance and will invest accordingly. I understand the average investor will fail to beat the market and most are better off putting a portion of their paycheck every two weeks into an index fund, but this is not where I stand. I believe with the right system, earning quadruple what the S&P500 did this past year is not fantasy. (YTD percentage yield, as of today, the Vanguard Total Stock Index Fund (VTSMX) has lost -7.52%, so even index funds are prone to significant loss).

My plan right now is to save and start investing. I opened an e-trade savings account to help me do this, earning 4.01% interest at the present time. I have right now about $600 and will accumulate until I reach $1,000. At that point I will begin to experiment with different investment vehicles while sharing my gr0wing pains and results with this blog. I will choose stocks based mostly on my own level of confidence with that company's product, while supplementing decisions with a combination of fundamental and technical research.

I will begin investing within the next three weeks using Zecco as my preferred trading tool, chosen based upon it's reputation for free trades.