The stock market is going crazy today and there are more huge losses.  I was chatting with my friend about a mutual friend’s promise to us.  His portfolio was doing so well and had more than tripled in the last 12 months.  He was going to take us all for dinner when it hit 31  (His exit number).  Hmmm things were going so well, that exit moved up and up.  We could have been sipping margaritas by now, but after today, I doubt it will be for awhile!    He got greedy, as most of us do, and we hold on for that little bit extra and the hope of making more.  When BANG, someone hits the wrong button on wall street or some new bill gets released, or some other unexpected event happens catapulting all we knew out the door and sending things into chaos!

All those dreams dash out the window and we hope that we have enough profit to ride it out, but where do we get off that crazy train?  It is great to manage your own stock portfolio but it is tricky to know when to get in and out of trades.  In doing some research, I was able to discover that less than 10 Mutual funds have successfully and consistently performed at 10% per year for 20 years straight.  That is staggering considering there are over 1500 mutual funds in Canada.   When you factor in the fees you pay to manage these funds as well, you don’t end up with much left over and if you don’t know when to get out of certain trades, it is ovbious by this discovery, that your broker doesn’t either! 

I believe that people are becoming  more aware of the facts now a days.  NO ONE CARE AS MUCH ABOUT YOUR MONEY AS YOU! 

You should not have all your eggs in one basket.  You might believe you are diversified but are all your investments in stocks such as mutual funds?    This is all in one place, the stock market.  The stock market no matter how you slice it or dice it, is volatile.  Capital preservation is important.  When you factor in the time value of money, and the rate of returns, it should make sense.  You can  not safely project those returns in your mutual fund portfolio and that is becoming more and more obvious. 

Managing your own stock portfolio is not easy either.  Knowing when you should get out, and doing it is another thing.  Not letting greed get the better of you is not simple!   We are so attached emotionally to our money, it is hard to think straight when you are loosing it!  Some times it is easier to just find a great company, with a solid track record, fixed rates of returns, assets to back your capital and invest in something real like real estate, or private oil and gas companies, or a business that is run very efficiently.  I believe that  there are many more excellent Canadian companies that can prove a positive track record over the last 20 years of 10% per year or greater without the fees than you will ever find in Mutual funds!  I recommend two to look up if you are interested.  Jaymor and Foundation Capital!  See my Opportunity page as well for other amazing companies.  I know you won’t be disappointed. 

Preserve your capital!  Manage your own money and take back your control of your financial future!

I just got back from Vegas!  It was Super Bowl Weekend in America, the second busiest time of the year.   (New Years Tops it!)  It sure wasn’t very evident that the US was in any kind of recession the way the casinos were packed!

Every fancy store you could think of is there!  It was fun to see what kind of things people spend their money on.  We saw a Cell phone that was $150,000.  Can you only imagine?  We stayed at the 5 star Wynn on the 58th floor looking over the strip!  It was really amazing!

As I watched the poker chips fall on the table and slot machine lights flashing, I could not help but notice how many men were gambling.  I suppose their wives were shopping, getting value for their money and having something other than a hangover to show for the next day! 

It made me think of how we look at investments and risk.  Do we chance it like a slot machine that requires no strategies, are we playing the odds at Black Jack, do we have a strategy like poker?  Maybe you leave it up to your partner and just go shopping and hope for the best?  Or are we conservative and hold onto our money and walk on by the casinos, taking in a show instead?

What it all boils down to, is not paying attention to your financial situation is really like gambling in the end.   Not having an active role in your investments is like giving it to the house, you might end up with a bit extra in your pocket at the end of the day, but most likely you won’t be a winner! 

Here are 5 simple tips to make sure you don’t gamble away your money!

1.)  Begin to understand more about finance.  Being here is an excellent start!  Add to that by checking out the books we recommend and do a bit of reading too!

2.)  Start saving and become an investor if you haven’t already!  You absolutely need to think about your future, time flies and at some point you will be unwilling, or unable to continue to work.  If you haven’t got any plan, you will be dependant.  No one wants to be a burden so start small if you have to, but the main message is start, period!

3.)  Take an active role in your investments.  Don’t hand that job over to someone else to do it for you.  Be clear on what you are investing in, how long it is for, what  kind of projected returns they are offering, who the managment team of the organization is!  Do some due dilligence and take control of your money!

4.)  Diversify with more than one investment and more than one company!  NEVER put all your eggs into one basket.  Trust me!

5.)  Never invest more than you can afford to loose in any one investment, no matter what!  That is like going to a casino with no budget, and making one big bet with your credit card.  You don’t really ever know if you are going to win or not, and no matter what anyone says, there is RISK in everything!  Even T-bills and Savings accounts have risk attached to them.  Oh course there is managed risk, but it is still risk!   Don’t let this idea scare you and stop you from investing, but diversify and due diligence are your friends when it comes to risk management! 

Take your time and you will be the winner not the house!

So many Questions… I am excited about starting this journey with you! Why isn’t there more education around finances. What does all the talk about the DOW and S&P 500 really mean… Where is your money invested and do you even care? Do you ever open the statements you get quarterly, or annually to see how you are doing? Has anyone ever showed you how to read one of those confusing statements? Or are your investments neatly tucked away in some investment your banker suggested during RRSP season and you are imagining that when you reach 55, or 65 that you will have a big nest egg?

Or maybe you aren’t a saver? Maybe you are a spender and you aren’t going to worry about tomorrow… Possibly you are really an avoider and just can’t deal with all this stuff right now?

Whatever you may be, I want to help you! I was like you once and I know you better than you think. I know what society has done to us, and the conditioning we are caught up in. I know that deep inside all of us we crave to be taken care of, nurtured and loved! We look for safety and trustworthy people to help us yet in this fragile element of our lives, as we have seen again and again in the media, money brings out corruption, dishonesty and greed in so many. Fear raises its ugly head and we become paralyzed in taking control of our hard earned money! We continue to feed the banks, or drive ourselves into debt, or just continue avoiding the whole matter and do nothing that will get us to our goals of a well deserved nest egg or better yet, give us that golden goose that lays wonderful golden eggs so we can finally enjoy having more all the while not having to work as hard as our money is working for us!

So you find yourself here, the first of many blogs on the Golden Goose Secret, where all will be reveled for you to discover the mysteries behind your money!

Welcome to The Golden Goose Secret!