Cheat Sheet Q&A:
Topic: Getting starting investing in your 40’s
I need your help figure out what to do to start investing. I am a 40-year old (working since) 1998 (locally). I have no kids and no wife, but planning on it. I have a school loan, and a mortgage. I hardly saved all throughout the years that I worked, but I have about $8000 in the bank. I have no retirement plan, except for (a pension). I would like to start investing the $8000 or part of it instead letting it sit in my saving account.
Do you have any ideas for me?
Bottom Line: Let’s get started…
- Open a Roth IRA account and max it out: I recommend using either Fidelity or E*TRADE because of the ease of use and the ability to freely reinvest dividends automatically for free
- Take the additional money after you’ve max out your Roth IRA and open a regular investment account with the same brokerage
- Take any additional money you have at the end of each month after you’ve paid all of the bills and split it into two camps: Debt reduction & Investment account
- Take the 50% and begin to pay off debt starting with the highest interest debt first. Save your mortgage for last as the interest paid is tax deductible but once that’s your only debt pay it off as well
What’s a key number to save each month if possible? If you can average investing $500 per month and you start with $8000 right now you’ll be able to save over $500,000 by the time you’re 65. How? The average stock market rate of return is 8.4%. $8000 in principal plus $500 per month at an 8.4% rate of return equals more than $500,000 that will be income producing because of your reinvested dividends. Along with a pension and Social Security you’ll be on a pretty good path for retirement.
As for what to invest in… I can only be so specific but I prefer companies that:
- Have more cash than debt on their balance sheet
- Pay a dividend that yields more than what you can earn through fixed rate investments
- Is growing revenue year over year
If you have a topic or question you’d like me to address email me: brianmudd@clearchannel.com
President Obama hits post election low in approval - implications:
Bottom Line: It’s not unusual to find a President reach a certain undesired status in their second term. It’s hard to create a list of Presidents who were more successful in their second terms that were more successful in their second terms than their first(FDR). It is a bit early to reach the injured bird status – at least in the polling age.
If history is a guide though… President Obama has reached lame duck status.
It’s been awhile since I’ve discussed how I go about analyzing polling data to project outcomes. I take the average of all polls during a window of time and use history to project outcomes. I’ve found this to be highly effective (most recently projecting the outcome of the President Election while accurately projecting the outcome of 49 of 50 states – ironically only missing Florida which was decided by less than 1%). So let’s get down to business.
Since the three D.C. scandals have surfaced we have four polls to average and project. What are the results?
President Obama’s average approval rating:
- 47%
President Obama’s average disapproval rating:
- 48.25%
In the polling age we’ve never had a President with a net disapproval rating in a second term (in the polling age of course) ever pass major agenda items. That would place President Obama officially in lame duck status if history is in fact a guide.
EHarmony meets employment:
Bottom Line: There are many employment sites already so what’s so special about another one that’s going to launch later this year?
EHarmony is working on its second site that will go live later this year. This one will be an employment based site that will use the same EHarmony approach to the job market. They will look to provide (29) levels of compatibility to pair potential employees with employers. It’s certainly an interesting concept and there’s no denying the success of EHarmony, more than 500 people are married everyday as a result of meeting on EHarmony.com
Google's new music service is anything but revolutionary:
Bottom Line: Full disclosure – I do have a dog in the the hunt. We are an iHeartRadio group. But that potential conflict isn’t why I’m not impressed by Google’s new streaming music service, All Access. It’s that there isn’t any thing new here and what’s worse is that they’re going to charge for it.
In a world of Spotify, Pandora and iHeartradio, Google music doesn’t deliver anything that can’t be found with the existing streaming companies. You create your own playlists of music and store them in the cloud. Perhaps if you’re a Google groupie it will be nice to seamless work within the Google Cloud environment. But here’s what is a huge disincentive… They are going to charge for the service.
Unlike iHeart, which is free and can do more, the All Access service will come with a monthly price tag of $9.99. They are offering an initial 30 day free trial period and if you decide to subscribe during the trial they’ll provide the service at $7.99.
http://www.bbc.co.uk/news/technology-22542725
Affordable health care - part of a solution could rest in 3D printing:
Bottom Line: Since we don’t seem to be doing anything to combat the rising cost of healthcare, 3D tech might be the best chance we have to reduce cost.
By now you may have seen the prosthetic hand that was 3D printed and shown to be fully functional (if you haven’t click the link below). What’s even more impressive – the price. A typical prosthetic hand costs about $10,000. So how much would the material cost be for a 3D printed model? Try $150. That’s not a typo. As viable body parts and other medical adaptation via 3D printing is created, we may have a big aid in controlling the cost of healthcare.
http://mashable.com/2013/05/14/makerbot-robohand-3d-printed-hand/
The world's most expensive cup of coffee:
Bottom Line: How much would you pay for a cup of Joe? $6? Even that may seem high. I don’t think anyone could imagine a cup going for $610,000, but that’s exactly what recently happened.
Ok so this is a bit misleading. It’s about who the cup of coffee will be with. Apple
While we don’t know the id of the winning bidder, it’s been identified as a rights group.
http://thenextweb.com/apple/2013/05/14/coffee-time-apple-ceo-tim-cook-auction-closes-at-610k-with-86-bids/








