Explaining Investing to Kids – Stocks, Proxy Statements

For my nephew’s 13th birthday, I transferred some shares of stock into a UTMA account for him under a dividend reinvestment plan (DRIP), and I’ve been using the investment as a teaching opportunity. Every time I get a statement or other correspondence about the investment, I forward it to him with a brief note explaining what it is and what it means to him and his investment. As I was crafting my latest email to him about the proxy statement we received, I realized that others trying to teach children about investing might appreciate reading my notes, too. So I lightly editted it to make a bit more cohesive for people without a knowledge of the background, and I offer it to you…

I got a message from Fortune Brands (Ticker: FO) and since you’re an owner, too, I wanted to share it with you.

In a small corporation like mine (I own an IT consultancy), I’m the sole owner, president, and most of the workforce. However, public companies like Fortune Brands are owned by thousands or even millions of individual investors like you and me. As owners, we get to control the company, but there are too many of us for everyone to be involved in the day-to-day operations – that would be crazy. Instead, we exercise our control by electing a board of directors to provide direction and guidance for the company. The board of directors hires a CEO for the company, and some of the other top officers, and those officers handle the day-to-day operations of the business.

You and I don’t participate in decisions about manufacturing, sales, shipping/receiving, hiring/firing of employees, payroll & benefits, business hours, or office locations – we leave that to the company’s officers, who are selected by the board of directors you and I elect. Since we don’t get involved in the daily grind, the company produces annual and quarterly status reports for us about its activities, successes, and failures. An annual Proxy Statement asks for our votes for the board of directors and for our input on a limited few additional important issues. We can submit our votes by mail or over the Internet, or we may attend the meeting in person in Illinois at the end of April.

I’ve attached the company’s 2010 Proxy Statement (omitted from this article), containing information about their upcoming shareholders’ meeting. It’s going to seem very confusing, but don’t worry – I don’t need you to read the whole thing – I just wanted to show you something on one page of it…

Board members have a limited term, so we’re voting to replace the ones who are expiring this year. Knowing who to vote for can sometimes be a difficult matter. Different people approach this different ways. All of the candidates being offered to us have been selected by our existing board of directors, so they are people that our board thinks we’ll like and will be a good fit with the other board members. For many owners, that’s good enough, and they just go with the board’s recommendation, especially if they’re happy with the way the company has been running. Other owners may do some research into the resumes and past experiences of the various candidates before deciding.

I approach it a different way: I want the board members to have my interest at heart, and that is that I want my investment to increase in value. To be sure that they have the same interest, I look for candidates who, themselves, have large investments in the company’s stock. If you open the attached PDF file and flip to page 60 (sorry, readers – just imagine it), you’ll find a table entitled “Certain Information Regarding Security Holdings” that reveals this information. The table shows the number of shares owned by each officer and director of the company, and by multiplying these numbers by the share price, I know how much money each of them has invested in the company. I only vote for those with sizable investments. Today, it was all of them, but I always check because I’ve occasionally seen candidates who own few or even no shares of the company.

Besides the election of directors, the proxy statement goes on to ask for our votes on several other items, such as approving an auditor, approving a change in voting requirements, and approving a plan to pay directors with additional stock. I like the way the board has been handling things, so I voted in favor of all of their requests.

There’s one last special item on the list, too. As owners of the company, you and I have a right to propose our own issues to be put forth to vote upon by the other shareholders. The last item on the list is one such proposal from another shareholder. He wants us to make a rule that anytime 10% of the shareholders feel strongly about something they may call a “special meeting” of all of the shareholders, rather than wait for this once-a-year regular meeting to discuss and vote on the matter. It’s the sort of thing you’d like to be able to do yourself, but it could start to get expensive and disruptive for the company to have to send out announcements, reserve auditoriums, and arrange flights and lodging for executives every time a vocal minority wanted to talk about an insignificant issue. I voted against it.

As the custodian for your shares, they sent me a single proxy statement for the total of both your and my shares, so I’ve already voted for both of us. In the future, when you’re old enough to control your own investments, the responsibility of voting on these issues will rest with you. If you have questions, I’m always happy to help.

Do I Need A Real Estate Investing Course?

Taking a real estate investing course will introduce lots of helpful information needed in today’s market. Most investors find that their motivation and desire to succeed is all the help needed. However, there are some that may need additional guidance with their projects. The real goal is understanding the basics of real estate investing (REI). These basics are essential to being successful in this business.

For starters, here are a few things that an investors course will teach:

Negotiations: As you begin investing, you will find that negotiation is a major aspect of these investments. In terms of time, negotiation may seem like a small part of an extensive process, but the rewards resulting from negotiation can be quite financially rewarding. Learning to negotiate through courses will prove beneficial during your endeavors with investing.

Using Trusts: Trusts involve companies that channel real estate transactions with investors in a way that is more profitable. By using trusts, you can operate with less taxes while protecting your assets in the event of a dispute. If you are a new investor, trusts may seem like an undesirable and unnecessary investment tool, but the effective form of protection offered by this system can easily prove worthwhile.

Managing Your Real Estate Investment: Owning a real estate investment can be a financial burden, and can be a headache even more so if you are uninformed about how to manage your investment. When managing a property, you are essentially operating a home-based business. The overall nature of real estate investing requires investors to incorporate proper management techniques in order to be successful. REI courses provide a detailed outlook on management, an unrivaled perspective that can only be given from experts who have managed real properties.

How To Buy and Sell: REI courses will provide worthwhile education about buying and selling properties, such as information on financing your purchase or tips for finding the best deals. If you are a beginner, it will be difficult for you to access this information without the help of an experienced source. Since this stage is the first in finding good investments, it is important that you learn these tips about buying and selling before you actually get started.

General Tips & Information: There are many insignificant aspects of real estate investments that can actually be very important when conducting business. REI courses contain information that, while trivial, can be just as important to success in the long run. These courses serve as a source for information that is often times unobtainable elsewhere.

All in all, the resulting advantages of consulting with REI courses are countless. The knowledge you learn will advance your success both directly and indirectly, as each piece of information will help you to acquire useful techniques while simultaneously gaining valuable experience in investing. Investors of all calibers will find that REI investing courses are a more than worthwhile tool in your real estate business.

Five Basic Tips for Investing in Real Estate

There are a lot of things to learn in Real Estate before you start investing. In fact, investing in Real Estate is much more complicated than the stocks investing. That is why Real Estate has become the common investing area for many people and thus have become more popular over the years. One needs to have financial and legal knowledge before investing in the Real Estate.

So, here we are providing you five basic tips which helps you to familiarize yourself with the basic concept of Real Estate.

1. Location:

Location Matters which is an old age saying perfectly suits when we think of the investing in Real Estate. The first thing you should make sure while investing in a property or proceeding forward is whether it is located in a good place or not.

If it is the best location, it can be the worst house there, but that doesn’t matter as you can just fix the issues or resell it to someone who wants a house in the best location. This is called as the Fixing and Flipping formulae by the professional Real Estate investors.

2. Wholesale properties:

Being wise is also very much important while investing. You need to follow the Warren Buffet formulae from the stock market investing which says “You need to be greedy, while everyone else is feeling fearful.” You need to look out for the wholesale properties that are being offered at great discounts and thus avoid paying full prices.

Using this technique, you can buy the property at low price and keep the selling price twice the buying price which helps you in maximizing your investment return.

3. Connect with local investors:

Hanging out with the local investors and talking with them about the local Real Estate market will help you in knowing the things better. Ask them to show their properties and take in every single bit of information they give you.

4. Reading helps a lot:

There is a tremendous amount of information available online these days. You can also gain information that you may need regarding the Property field and investing as well. Buy and read books that give you practical knowledge about buying, flipping, renting and selling the properties.

5. Find a good Realtor:

This is the best part. When you are all set and finally ready to invest in some property, then a Realtor is the person who helps you with it. And a good Realtor who understands the concept of investing returns and also have sold a number of properties can be the best choice.

Property investment can offer fabulous returns, but there are also people who are bankrupted after investing in Real Estate. It is all in your hands, so be sure and know everything involved before you invest.

What Are the Tips for Investing in The App Market?

The market on apps is usually ruled by the smartphones. We see the advent of thousands of apps that are invading the market, which are vying for a place among the competition. So, no one knows, when the apps will be viral and which are the types of apps resulting in the successful downloads. This year, we have seen the gaming apps dominating the market, like the formidable Pokemon Go and the latest Super Mario Run. The investors in this market are always keen to look for the next big thing to happen to the market.

The app market space is dominated by the Venture Capitalists(VCs). Most of the users are either searching, for an information or obtaining some information. It is best to compare the experience as that of a movie, either you watch it or you simply do not. It is always a better investment for a bigger company, who has already made some achievements in the mobile app space.

Investing in an app is about cultivating relationship, thereby establishing a complete inside track with the founder. No apps are perfect, as they might be the first attempts and most of them are still evolving.

However, before investing in the app market, certain factors are to be considered and these are:

Cross-pollination Apps

There are two hard parts about the app based market. First, is the downloading of the app and subsequently comes the harder part of letting the users open the apps for more than once. Multiple third-party apps are encouraged by many apps, instead of the single standalone apps.

Importance of Trends

The messaging apps are the most recent trends, as they allow the user to converse with each other, without even looking at each other. Snapchat and iMessenger are the types of Messenger apps, allowing collaboration between friends. In fact, Zappos from Amazon helps to shop with friends.

The safest bets are the food and drink apps. You get important information on recipe, nearest restaurants or the food that is eaten by you. We see that in the food and drink category, most of the apps are popular but those without human to human conversation are the apps which are doing well.

Investors are however unable to predict the outcome of app success, similar to what happened with Pokemon Go.

Thought on Diversifying

The risk on individual companies are reduced by the diversification on multiple app companies. The companies are trying to improve in the market for apps. The limitation of number of apps to be stored are based on the phone memory. So, more are the number of apps downloaded, better are the chances of putting other apps into oblivion.

Consideration of ETFs

The investors are also interested in the Emerging-growth technologies (ETFs). The portfolio is based on apps, chosen at discretion that you are comfortable losing.

It is not always true that the coolest of the apps succeed. The trained investors will always be equipped with tools on probabilities, but then human nature is quite unpredictable. So, whether the user will really like the app idea as extremely appealing or just refuse to accept the idea as something worthwhile for downloading, is only a matter of chance. Your decision on the app becomes wiser, when you have better knowledge of the existing trends. Many companies in the app market are privately held ones, the investors must keep an watch on when they turn into a publicly held firm, based on strong invest-able qualities.

Best Rated Investment Newsletters Guide: What to Look for in Quality Stock and Investing Newsletters

If you’re becoming serious about investing, then it’s time to consider subscribing to a newsletter. The better ones aren’t for free, because the advice they offer is very, very useful and valuable. Pricing structures and availability all vary as well. The best rated investment newsletters tend to be the ones that are offered by established companies with quality reputations.

One important thing to look for is a newsletter that implements a strategy with a “buy-and-hold” investment style, and a high percentage of average return performance with its picks. If the return performance percentage is over 100%, the better the quality of the information and analysis.

Not only should you be provided with new stock recommendations every month, you should also be provided with an in-depth analysis about WHY each of those stocks is recommended. Even if you make the decision not to invest in those particular stocks, you will at least be better educated about how the stock market works and which indicators to look for when evaluating any stock or other investment opportunity.

If stocks aren’t your thing, then look for the best rated investment newsletters that allow subscribers to decide which specific type of investment they wish to receive information about. The price might vary depending if you want to subscribe specifically to a stock newsletter, “rule breakers” kind of newsletter, comprehensive retirement guidance, and so forth.

Why Subscribe to the Best Rated Investment Newsletters?

Why subscribe to a newsletter in the first place where there are so many “free resources” and “tools” available on the internet? Because when it comes down to it, you really can’t trust everything you read for free. Even if some of the information is legitimate, how confident are you in your ability to weed out the worthless stuff from the useful? And do you really think the top, knowledgeable experts in the world are going to spend their time evaluating and analyzing investment opportunities and the stock market for free?

This doesn’t mean that you have to spend a whole lot of money for a subscription to a quality newsletter. Sometimes you can find coupons or internet discounts to bring the price down.

You get a lot more than just an analysis on stock picks. Depending on which subscription you choose, you can receive “model portfolios” with examples and guidance, community resources, and many other great features and perks.

Of all of the best rated investment newsletters, the one that gets recommended the most is The Motley Fool. Discounts are available to help you save on whichever specific newsletter you are interested in, whether it’s “Rule Your Retirement”, “Rule Breakers”, “Market Pass”, “Stock Advisor” or one of the many others.