Adverse Selection Bias is when one person in a transaction has more information than the other. It is a specific subset of selection bias and has recently been on my mind. A couple weeks ago, in my investment research for HIT Capital I found a stock growing 25% a year and trading at a P/E of 5. To translate that into English, I found a stock trading 4x cheaper and growing 8x faster than the average US company. But in my next level of research, I learned [...]
A Two-Decade Reflection on Happiness and the Age Positivity Effect As I reflect on my own life journey, I realize that my pursuit of happiness is still evolving. Initially, my goals were about me, as I focused on personal achievements like earning a degree, finding love, and competing professionally. Later my goals began to include others, like achieving financial independence for my family, and creating a business. Now my focus is just as much on me as on others, like supporting my wife’s mission to help our [...]
Imagine strolling through your favorite supermarket on a Sunday evening after finishing a game of soccer with your friends. You're worn out, hungry, and the air is filled with the tempting aroma of freshly cooked pastries. As you pass the second vendor he is frying up some crackling crispy pork, your mouth waters at the thought of biting into it. Your stomach is screaming "Yes!" and before you even have a chance to weigh the pros and cons, you find yourself buying some. This instinctive, visceral response [...]
529 plans haven't received much love from me in the past, mainly because they don't compete with their Roth IRA counterparts. However, thanks to the SECURE 2.0 Act of 2022, you can now use 529's to fund both your favorite person's education and their Roth IRA. If you aren’t familiar with Roth IRA’s be sure to check out my posts Fund Your Roth and Roth vs. Traditional. And if you need more information don’t hesitate to reach out to Kristin or me. If you're a US citizen subject [...]
It’s not often I get that lump in my stomach but yesterday it happened. Assertio Holdings, an investment of mine, had a stellar first half of the year. They were cheap, growing, and just closed a deal reducing their risk and adding a potential multi-billion dollar product to their repertoire. As I sat down to listen to their quarterly update, out of the corner of my eye, I saw a flash of red, Assertio's stock price plummeted. The market had just closed and their share price was down [...]
Our 2023 top credit card picks for savers were dominated by our long time favorites Citi Double Cash Mastercard and Fidelity Rewards Visa Signature Card. Each card continues to give us a straightforward 2% cash back reward year after year. HIT’s 2023 Credit Card Rankings Before I dive into our recommended credit card details it’s worth mentioning that these credit card recommendations are for Savers. Savers live within their means, never carry a credit card balance, and use credit cards as a safe and convenient payment tool. [...]
At HIT Capital, our stock picking process begins with filling the top of the funnel with as many stocks as possible. In 2014, I started value investing with data on 2000 stocks, and now nine years later we are up to 42,280. As I look back and review the path we took to get here, two primary and intertwined hurdles jump out, overcoming the mere-exposure behavioral bias and learning how to code. In 2013, the subset of 2000 stocks I was using were the same ones utilized [...]
When reviewing the stock market to gain insights into the future I prefer to use two tools or let's say lenses. The first lens is a magnifying glass of which I attempt to see what the market is doing today, tomorrow or next week. The second lens is a set of bifocals of which I use the magnifying portion to focus in on the market's value today, and then with that knowledge I look up through the distant lens to see the market further out. Magnifying Glass What [...]
This summer, while I was back on the farm reminiscing about childhood with my family, the topic of the money board came up. What is the “money board” you might ask? It was the bane of my childhood existence, but now it is better known as the method by which my mom taught us about morals, math, and money. When I was young, my sisters and I could earn a weekly allowance if we did our chores but if we misbehaved it would be taken away. Mom [...]
Have you ever dreamed of what you would do if you had too much money? I am not talking about dreaming of yachts, ponds full of hippos, and hanging with your entourage. I'm talking about your dreams of philanthropy, giving your neighbor a scholarship, stocking a food pantry, or funding a local psychiatric hospital. If you aren’t there yet, stay on our plan of living below your means, saving and investing and you’ll be there sooner than you’d expect. Some of our HIT Family is living out [...]
We learned in the last post on the Dunning Kruger Effect that our knowledge does not necessarily track our confidence. My knowledge of the unknown is limited and therefore I’d prefer to be prepared for the unexpected. Is that even feasible? Let’s dive into the ultimate unknown, our own and others' ability to stay alive. None of us think we are going to die tomorrow but there are a number of known and unknown risks that could wipe us all from existence: nuclear war, asteroid collision, volcano eruption, [...]
A little over a year ago, if you would have asked me about a European war, I would have betted against you and in reality I did. I had multiple investments in Russian run businesses and today I have none. As information became more readily available, the unknown risk transitioned into a perceived risk and now has become our reality. How can we plan for future unknown unknowns like the war in Eastern Europe? Acknowledgement The first step is acknowledging that you don’t know everything. Our Society and [...]
I was watching the baseball world series back in Oct of 2005 with some college buddies and during the pre-game I seemed to be the only one excited. The White Sox had a chance to make history by closing out the series in 4 games. As the night went on the excitement spread and by the end, we were all celebrating and caught up in the moment as the confetti flew and fireworks blew up. The White Sox finished the sweep, beating the Astros 1-0 and were crowned [...]
My Alternative to Expensive Insurance When reviewing health share plans we were drawn to Samaritan, which has been around since 1994. Samaritan describes themselves as “A community of Christians paying one another’s medical bills.” This is exactly what it is, those of us who signed up to be a part of this plan do not have insurance, and are committed to sending their monthly share to another Christian in need. Samaritan is based in Peoria, IL. That means it’s just over the river from us, and there [...]
“Who is your health insurance through?” “What do you mean you don’t have health insurance?” “Your husband is an attorney, he should have health insurance through work”. More often than not this is the start of my conversation with friends interested in learning about our health insurance. About a year ago, my husband was promoted to partner at his law firm. While we were celebrating, we learned partners are no longer employees and we would no longer have our employee sponsored health insurance. We had an option [...]
In my last blog post I addressed what action bias is, and why we, as humans, tend toward this bias. Hopefully looking through a few more examples will help you identify where you tend toward action bias, and then help you set up ways to minimize its effects on you. The following 10 examples are situations where taking action does not warrant praise and has proven more often than not to provide a detrimental outcome. The first 8 are personal finance, investment and business related, the next two [...]
Have you ever been stuck in traffic and found yourself honking the horn, waving your fist, or even releasing the bird? Did any of your actions improve the situation? Maybe you are similar to my parents who live where there is no traffic, but where there is gossip. Have you ever listened to someone talk about someone else and then validated their thoughts? Then in hindsight realized you should have done nothing of the sort. Ok, so you don’t drive in traffic or listen to gossip (congratulations!). [...]
In my last post, I connected an increase in anxiety with the additional choices and freedom brought on by financial independence. Thanks to Barry and Danielle’s insights I was able to take a step back and see what was happening inside my head, Choice Overload. I have a natural tendency to maximize every decision, and when I face multiple decisions at once it leads to decision deferral, and decision fatigue. While in my mind I was trying to do great things, in reality I was like the baby [...]
Sarah and my financial independence dream was coming to fruition and it was inevitable we were going to reach our magic number. So why, at the same time, did I feel overwhelmed and full of anxiety? Everything I heard or read up until this point led us to believe financial freedom would be just that, freeing. But so far it was more stressful than freeing. I felt the weight of opportunity upon our shoulders. Since the beginning of time, we as first world humans have never had more [...]
Severance Update In my last post, “No Power, No Water, No Heat, No Severance'' we were in the middle of a cold front that left us without electricity, water, and internet. This delayed all of my corporate work communications and the following week when the essential services came back online I received word on my severance request and... It was accepted. I am now twice retired, and can focus on HIT, family and friends. Financial Independence It has now been 3 months since retiring and financial independence has [...]
It is 8:30 am on Wednesday, day 3 of a 6-day cold spell across Texas. We lost power around 2 am Monday and have been relying on our fireplace, camping gear, and friends for warmth. I once laughed at the fact, 90% of homes in Houston had fireplaces. Thank goodness we bought one of those homes, as the fireplace is keeping our living room a toasty 48 deg F! The Damage In addition to losing power, our water has stopped flowing, and the technique of dripping faucets is [...]
In August 2020, Sarah and I met our financial goals. We reached “enough” and will begin forging a new path, not driven by money. The financial independence journey took me 37 years to accomplish and over half of those years I spent in the passenger seat. This post is about my early days and is dedicated to family, friends and mentors who started me down the path to financial freedom. A collage of mentors from top left to bottom right. Uncle Chuck and myself on the farm, [...]
My sister shared the following riddle based on implicit bias with me last week. If you are free from bias, good luck :) The Riddle A man and his son are in a terrible car accident and the father dies. The boy is rushed to the hospital and in need of surgery. Once in the operating room the doctor comes in, looks at the boy, and says “I can’t operate on him; he is my son!”. How can that be? Who is the surgeon? Was the answer quick [...]
Do you think you are a better driver than your friends? Is common sense ingrained in our veins? It appears not. In the 1970’s psychologists started proving we repeatedly make irrational judgements and decisions in similar circumstances. In fact, 93% of Americans surveyed thought they were a better driver than the median. That is not our common sense shining through, but one of many behavioral biases, and in this case illusory superiority. Uncertainty We each suffer from behavioral and cognitive biases and during times of uncertainty, like [...]
2019 was a lifestyle altering year where I committed to bike more than I drive. The seed was planted in 2017. We moved from the Four Corners to Houston Texas, purchased a home, flooded and re-built. Due to Hurricane Harvey it took us longer than expected to settle into a normal routine, but when we did I soon realized how much I missed the regular occurrence of outdoor adventures with nearby and active friends. It wasn’t long before my mind was racing on ideas to fill the gap. [...]
Have you ever been sold on something too good to be true? Just recently I made an appointment to get our van’s windshield replaced. I was told over the phone to bring a check for $300 and drop off the car in the dealership parking lot. After waiting about 45 minutes with three kids in tow, I found out it would cost closer to $1000, and I needed to come back later when they had the correct glass. If I had done a little more research and gotten [...]
Christmas and the gift-giving season is usually here faster than we expect. As you begin shopping for yourself and others, we want you equipped with the best credit card on the market. There are many choices for each financial lifestyle stage (borrower, spender, saver) and reward goal (cash savings, college savings, travel, debt transfers) but at HIT our focus is on savers and cash back. There is plenty of competition in the credit card market, which is a benefit to the cardholder who can seek out the best [...]
In my last post on Peer to Peer (P2P) Lending, I spoke about how we need to diversify, but we run into a problem if we try to just invest in everything. We have way too many P2P marketplaces, 106 to be exact, and so it is impractical to buy the whole sector. Even if we had the money to diversify across all the loans available in all the platforms, it would not be a wise choice as some loans are just too risky. Instead, we are constantly [...]
Death and Disability - What’s in your future and should you buy insurance? I have a 1 in 2700 chance of dying this year, and my wife’s odds are 1 in 5900. If 1 in 2700 wasn’t sobering enough, being at the luxurious age of 35 I have a 50% chance of becoming disabled for 90 days or more before turning 65. I find it easier to ignore the data and go on living with my head in the sand but in reality, I need the data to [...]
As our domestic stock market has become expensive, we continue to look for something better. One area HIT revisited in 2018 was the category of fixed income. The high-level overview of an asset class worth more than $247 trillion has since led me to focus on the specific sub-category of peer to peer lending. To my surprise, my sister showed a keen interest in the topic and as I started to dig, I found her in the trenches alongside me. We have since teamed up and researched over [...]
When I first wrote about the mental model for purchases I did not imagine that my own personal case study would follow. But then again, who would have thought Hurricane Harvey was going to bring more than 60 inches of rainfall. That volume of rain shattered the previous record by more than 12 inches! It has now been almost 600 days since thirteen of those inches found their way into our home and our entire first floor was destroyed. Since being rescued on August 30th, 2017, we have [...]
The golden age of investing is here. The internet, discount brokerages, and free index funds have brought together a trifecta of investing bliss for DIY'ers. My savings journey started 12 years ago when I retired from professional baseball and started work as an engineer. My initial thoughts as a saver was to find an expert in the field, a genuine financial advisor. Unfortunately, at the time I did not look in the right places, and the more interviews I did the sicker I felt. The research was leading [...]
One of the many benefits of writing a blog is the challenge of organizing your thoughts and having them questioned. It’s initially scary to put it out there, but as time passes there is a subtle switch from scary to educational. Our interactions have developed into a mutually beneficial relationship of learning. We rarely all agree on financial topics like the efficient market, behavioral finance, and saving till you are blue in the face. However, your rebuttals, comments, and suggestions expand and test my own understanding, which in [...]
I loaded up our HIT Investments fire box and got the research train rolling. Aggregating data from 14 fixed income classes, ranging from international high yield bonds to domestic short-term treasuries, was like shoveling coal: difficult, but necessary.
The illusion of control bias is the tendency for people to think that they have more control than apparent over events. It’s like wearing a rabbit’s foot to an exam or believing you’re safer driving than being a passenger. Neither can influence the outcome of events – good or bad – but the belief can cause real-world harm. In reality, chance plays a bigger role than we give it credit for, and in the case of investing, this can hurt your finances. Whether you’re investing in the wrong [...]
Financial innovation has opened a new and more efficient avenue to connect investors with borrowers. One of the technologies evolving since the mid 2000's has been the Peer to Peer (P2P) marketplace. Since their inception a decade ago they have grown from $0 to $54 Billion.
When studying finance in preparation for the Series 65 exam there was an emphasis on specific investment objectives. The "safest" investment objective was "Preservation of Capital" and its primary goal was to prevent loss. Preservation of capital investments includes Treasury Bills (T-Bill), certificates of deposit (CD), savings accounts, and money market accounts (MMA). These holdings are classified as the “safest” investments and are often insured against absolute loss. In industry lingo, they generate a “risk-free” rate of return. But before we take it as so, and solidify the [...]
The day after our home flooded, I went back for a few essentials that did not make our initial rescue. The trip began with a friend and I sitting in traffic for 2 hours trying to cross the flooded bayou and finished with us wading through dirty water for about a mile. As we came around the last corner and I saw our home, it hit me, I had I forgotten the house keys! Sure enough, after wading through the last 100 feet of water the front door was [...]
This year has been full of firsts. It was the first year we started as a family of 5, first time we moved cross country and into a new home together, first time we lived through a hurricane, and first time we re-modeled our home. With these firsts came forth multiple opportunities to spend large sums of money. We purchased: a mini-van a new home home re-model an 11 unit rental complex 2 angel investments additional equity in HIT Capital Each one of these purchases could significantly shorten [...]
As Hurricane Harvey began to move East so did the waters gathered in the reservoirs North and West of our home. After 4 days of torrential downpour the hurricane had moved on. The sun was shining. Then we fl......
As the kids go down for a nap and the waters begin to stabilize I gather some of our thoughts over the last couple days, and the days to come. I learned of what was soon to become Hurricane Harvey from a co-worker last Tuesday, 7 days ago. This consisted of nothing more than an awareness of a storm that was over the Yucatan. I came home from work that day and told my wife over dinner. Neither of us thought much of it as it didn’t come [...]
We all put off unpleasant tasks. In surveys 95% of all people admit to procrastinating, with about a quarter of them saying it is a chronic, defining characteristic. Our innate human behavior is to put off less appeasing tasks regardless of importance. I struggle at times to get out of bed, to tackle mundane tasks, or to get my workout in. I even had an urge to delay writing the article you’re reading today. It’s unfortunate the consequences or benefits of procrastination are many times unknown. Fortunately, in [...]
1. Happiness The overarching reason why we want to become debt free is that it can lead to increased happiness. Here are 18 reasons for getting out of debt and how it can lead to a happier life: 2. Complexity Eliminating debt reduces the complexity of your monthly finances. No debt, means no more: tracking home mortgage interest in preparation for taxes, worrying if your adjustable interest rate will go up, and ensuring your loan payments are sent on time. 3. Stress The burden of borrowing and having [...]
A burger and a slice of cheese together cost $1.10. The burger costs a dollar more than the cheese. How much does the cheese cost? (It’s more impactful if you answer how much the cheese costs before continuing on) Your answer to the cost of cheese may have depended on which psychological mode of thinking you engaged in. If you chose to answer quickly, your answer was likely 10¢, but if you stopped and worked the answer meticulously then you should have come up with the correct answer [...]
Benjamin Graham, the forefather of fundamental value investing once taught Warren Buffett, “Price is what you pay. Value is what you get”. Since Benjamin Graham wrote Security Analysis in the 1930’s, more academics, quantitative analysts, and Warren Buffett, have made strong cases that value investing outperforms the general market over the long term. In one example, Buffett’s firm Berkshire Hathaway employs value investing, and their track record outperformed the S&P 500 by 1,586,929% over the last 51 years. (1964-2015 Berkshire Hathaway gained 1,598,284% while the S&P 500 gained [...]
We have many behavioral biases and the latest data shows that “home bias” is one of them. Home bias is where we invest more of our assets in the country and community we live rather than globally. Becoming aware of our biases, including our home bias, enables us to make more rational personal finance and investing decisions. The IMF (International Monetary Fund) and MSCI All World Index gathered data from the five largest countries by market size. All five demonstrated a significant home country bias, rather than a [...]
With the shopping season upon us, let me introduce you to one of HIT Investments’ favorite deal sharing sites: Slickdeals. Slickdeals has over a million active members submitting, commenting, and ranking products they believe are selling at a discount. The members (myself included) and editors create an online shopping ecosystem that results in a never ending stream of product deals from reputable merchants. If you are looking for Christmas gift ideas, scroll through the front page deals. The front page deals are products from merchants that have made [...]
The steady stream of questions and comments from interested readers has led me to the creation of a new HIT Investments Series: The Mailbag. Since I write for you, I might as well write about what interests you. The mailbag will be a recurring piece that responds to your questions, comments, and concerns. There will be no magic formula regarding what topics are covered. It may be that many of you are interested in one topic or it may be that one of you poses an interesting question [...]
Our natural human condition is to know and communicate the price of a product while ignoring the product’s value. Oscar Wilde once said “Nowadays people know the price of everything and value of nothing.” This is a fundamental flaw in how we think and it has played a part in strengthening the consumerism culture we live in today. An everyday example of a marketer taking advantage of this flaw is the marking up of an item by 50% to only then place it on sale for an equivalent [...]
Loss aversion refers to our tendency to strongly prefer avoiding losses over acquiring gains. This behavior is at work when we make choices that include both the possibility of a loss or gain. For example, when making investment decisions we most often focus on the risks associated with the investment rather than the potential gains. The loss aversion bias is not always dreadful to have, as in many cases it is beneficial to our way of life. Naturally responding more powerfully to threats than to opportunities is a [...]
Warren Buffett and Charlie Munger, possibly the most successful investors of our time, have regularly emphasized the importance of rational investing or just being “rational” human beings. When Charlie was asked, “What one word accounts for your remarkable success in life?” his response was “rational.”1 Warren Buffett thinks similarly as seen in Berkshire's annual letter where he stated his successor will be a rational, calm and a decisive individual”.2 So What's Rational Investing? Rational is to be sane, reasonable, of sound judgment, and to derive from reason. [...]
While your savings rate gets you to the playoffs (the race for retirement), making it grow will win you the championship of financial freedom! That's why it's crucial that you learn how to make money work for you. A great way to grow your money is to invest a portion of it in the market, whether that be through stocks, bonds, real estate, ETF’s, mutual funds, or something else you believe will gain a positive return. Whenever investment professionals reference the idea of “making money work for you”, [...]
If you are even remotely thinking about retirement, our guess is that you have heard a number of vastly differing opinions on what decisions will most impact the age at which you can retire. The primary lifestyle decision is whether you are, or going to become, a saver. The benefits that savers experience over the spenders and the borrowers are vast, “5 reasons to live below your means” can give you a glimpse of a few of those benefits. This may be a bit of a surprise coming [...]
Global oil production has been outpacing demand for over two years. This oversupply has pushed oil prices to lows not seen in more than 10 years, so it's a good time to start contemplating investments in oil and gas stocks. For consumers, this is a welcomed reduction in fuel prices. For independent producers, the price decline is causing extreme pain. According to Haynes and Boone, 42 energy companies filed for bankruptcy in 2015 and Deloitte believes 35% of the remaining energy companies are at risk of declaring bankruptcy [...]
In the last newsletter we discussed a few of the inherent consequences of dividends. This article compares the dividend to one of its alternatives, the stock buyback. Stock buybacks, otherwise known as share repurchases, occur when a business purchases shares of its outstanding stock from the shareholders. Importantly, the fundamental value of the business does not change. The result is an increase in the ownership percentage of each remaining share. For example, if a company has 100 shares and is worth $100, each share is worth $1 and [...]
Businesses should consider the objectives of their shareholders like you and me. After all, we are the owners of the business. This article explores the dividend and suggests to businesses why the dividend may no longer be the best way to reward loyal shareholders like us. An upcoming newsletter will take a deeper look at an alternative, the stock buyback. How Investors Have Historically Used Dividend Dividend-producing businesses have long provided a steady stream of income to their investors. Historically, investors have depended on dividend income to fund [...]
Living below your means is an essential step in your path to financial freedom. However, spending less than you earn goes against the consumer first culture we live in. Marketers do not profit from our financial well-being, they profit from our spending. Go against the grain, spend less, earn more and be happy about it. Here's 5 reasons why: 1. Reduce Stress According to one study by the American Psychological Association, finances are the leading cause of chronic stress in America. When you submit yourself to chronic [...]
We'll begin with a telling quote about investment cost. “Whether markets are efficient or inefficient, investors as a group must fall short of the market return by the amount of the costs they incur.” – John Bogle So what does Investment cost mean? It's the cost of investing or the fees associated with particular investments such as commissions paid and annual fees. Market returns are unpredictable but investment cost can be known. When investing, you shouldn't assume that because you're paying higher costs, it means you're receiving a better [...]
“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” ― Albert Einstein So what is the eighth wonder of the world, Compound Interest/Growth Simply put, compounded interest is interest on top of interest and compounded growth is growth on top of growth. If you invested $100 today and the stock market grew at an average compounded annual growth rate of 9.11% your investment would be worth: $100 with a 9.11% compounded annual growth rate invested for [...]
Why am I investing? What is my Time Horizon? What is my Risk? What is my Liquidity Requirement? These are all thought-provoking questions meant to aid in building a firm investing foundation. Once you've built the foundation, you can start choosing your investment goals. Investment goals are split into four categories based upon the risk/return tradeoff. This tradeoff infers that higher returns are associated with higher risk investments and lower returns are associated with lower risk investments. While this may not always be true with respect to any [...]
Liquidity is the ability to quickly convert your investment into cash with little or no loss in value. This is important if there is a possibility that you will need cash in the near future. For example, a down payment on a new home means that you can sell the house later and turn it into cash. But a property like that can take a while to convert. However, assets like bonds or stocks can be turned into cash fairly quickly. Cash is the most liquid asset, while [...]
If you are one of the 947 companies that rely on us (taxpayers) for a free ride, this newsletter is not for you; if you are a taxpayer without the bailout luxury read on and learn about two types of risk, tolerance and capacity. Risk tolerance is behavioral based and risk capacity is goal based, each type is different but equally important in the process to knowing your investment goals. Risk Tolerance Risk tolerance is the degree in variability of investment returns that you, the investor, are willing [...]
This week we will continue on the path to knowing your investment goals by discussing what is my time horizon. Your answer to last newsletter's question, why am I investing?, will directly relate to how you answer this week’s question, what is my time horizon?. Time horizon is the period of time from when the investment is made to when it is liquidated or sold. If your answer to why am I investing was to fund your retirement, then your time horizon is from now to sometime between the [...]
Maybe you're thinking of going on a huge shopping spree or perhaps, it's the holiday season and you want to make some purchases. Whatever the occasion, just about everyone can use a little extra cash and that's the purpose of cash back rebates! So today, rather than our usual investment talk, we’ll load your wallet with an online shopping tip that pays, therefore, saving you money! Plus you know what they say, 'If you don't save, you can't invest'. What is a Cash Back Rebate? A cash back rebate (not referring to [...]
The next chapter in the investment fund series is "Know your investment goals". I'll take you through an easy and repeatable process to help clarify how to choose the right investment goal(s). It is difficult to become a successful investor if you don't know your investment goals, thus we ask our-self. Why do I invest? All our situations are unique, as no one investment goal is right for everyone. If your goal is to purchase a home and your neighbor’s is to prepare for retirement, the specific investments [...]
Mutual funds may not have the same pizazz as choosing your own stocks but they do allow average investors to take advantage of low costs, diversification, and access to professional management. There is no legal definition of “mutual fund” but the term is most commonly applied to investment funds regulated and sold to the public. The four most often referred to mutual funds are: Open-end funds (OEF), Closed-end funds (CEF), Unit Investment Trusts (UIT) and Exchange traded funds (ETF). Open-end funds $17.1 trillion in holdings are currently the [...]
You've probably heard someone say it before but what are investment funds, really? An Investment fund is a vehicle in which multiple investors can aggregate their money towards a particular strategy. In other words, it's a supply of capital that belongs to numerous investors where each person has control and ownership of their own shares. Mutual funds, money market, and exchange funds are examples of investment funds. Understanding Investment Funds This type of investment can be split into two categories: public and private. A public fund is open to [...]
When investing in your retirement one of the questions you’ll need to answer is.... Should I invest in a Roth or Traditional investment vehicle? Another way of asking the same question is, do I want to be taxed now or later? The best retirement vehicle is tough to predict unless you know your financial future and tax rates. Knowing the future may not be feasible, but becoming familiar with a range of potential outcomes is. Bankrate created a Traditional vs. Roth Calculator for us to do just this. If you [...]
ETFs or Mutual Funds? Exchange Traded Funds (ETF) and Mutual Funds (MF) are investment vehicles that pool multiple securities into one fund, allowing investors like you and I to diversify efficiently. These funds have become so popular that they account for more than $20 trillion in assets*. That $20 trillion has been more than enough market share to breed healthy competition between fund providers. So how do we capitalize on this competition to maximize our investment return potential? We learn the differences between ETFs and MFs that are material [...]
“The rich rule over the poor, and the borrower is a slave to the lender.” -Proverbs 22:7. As we progress toward financial freedom, most of us will go through three financial lifestyle stages: borrowing, spending, and saving. The first two, borrowing and spending, are stepping stones to achieving the final stage of saving. Saving is the only stage with the power to progress us toward our ultimate goal of financial freedom. Borrower We are all born into the first lifestyle stage, the borrower. As we grow up [...]
Christmas and the gift giving season is usually here faster than we expect. As you begin shopping for yourself and others we want you equipped with the best credit card on the market. There are many choices for each financial lifestyle stage (borrower, spender, saver) and reward goal (cash savings, college savings, travel, debt transfers). At HIT our focus is on developing savers and our credit card recommendation is to simply put the most money back in your pocket. There is plenty of competition in the credit card [...]