Money Tips for Tomorrow

2 years ago I hit a stock that gave me tremendous gain. It was Dendreon Corp (dndn). I had bought it at $4.03 and sold it at $19.25 a couple of days for an astonishing gain. It did the same thing again this year. dropping below $3 and is already over $20. I missed this one and was mad I didn't invest when it was down. I love investing in the pharmaceutical companies! I just invested in a company called Human Genome Science inc. (hgsi) on Friday (July 17). I bought it for $3.44 and sold it today at $12.33! My point is this. I posted earlier about safe stock investing essentials. I do follow them but I am always invested in a more riskier pharmaceutical company. If you take a couple of risks the reward could be high or you could lose it all. Never invest money you are going to sleep over. I only invested $1000 on this and was ready to see what would happen. Take a little risk with some of your investments!

It's been a while since I last posted here since I had surgery and went to the Philippines on vacation.
I thought I would start back into this by listing some essentials for the safe stock market investment. When I say safe of course everything has its risk but some things you should look at before you buy a stock. I will explain them more in detail if asked but here they are.

1) Dominant brand
2) Repeat purchase
3) Convenience
4) Expanding possibility's
5) Your familiarity and interest
6) Sales growth of at least 10% year over year
7) Gross margins of at least 50%
8) Net profit margins of at least 10%
9) Cash no less than 1.5 times total debt

I use to be really bad at saving money. I was living from paycheck to paycheck as most people do when they first start out on their own. I got better over the years until one day it finally "clicked". I tried something and everybody thought I was a little "weird" but it worked and save so much money because of it. What I did was started writing every penny down that I had spent. I would keep a note pad in my car and at my house and wrote every penny down. At the end of the month I would go back and look to see where my money had gone. I really couldn't believe my eyes at where I had spent my money and became more disciplined on how and where I spent it. If you really want to get an idea of where your money is going or want to have an eye opener, try it...you will see!

One of the worst things you can do during stock trading is listening to everybody "talk around the water cooler" or listen to somebody who has an "insight" to a stock. If you listen to this kind of talk you are the last one to know! Most of the time I hear this at work. I laugh and try not to talk stocks (or money for that matter) with these people. They just don't get it! Where do you think they heard the news from? The paper? Radio? TV? Internet? Guess what! It's too late! Either the stock they are talking about has either already shot up or bottomed out. The most important thing you can do is do your own research. Find somebody who does as much research as you do! The stock market is to big to research all of the stocks out there. I have a guy I talk stocks with everyday and he lives on the other side of the country. He shares his research and I share mine. He warns me when I'm in too risky of a stock and I try to do the same. I spend a lot of time doing research and reading about the companies before I buy in. Just today I bought a stock to a company that I knew wasn't going anywhere. I made my 20% in the first hour and got out. I did research on another comany and missed out on its 46% because I didn't follow my instincts (I did share the stock with my buddy though). What I'm trying to get at is avoiding the "wannabe" traders who only repeat what they hear and do little or no research of their own.

In this post I wanted to talk about stock picks during a recession. The top of my list is pharmaceuticals. People are always going to need their medicine no matter what times we are going through (check out my link. He has a couple of outstanding picks for these). My other choices all go together. You are going to want to pick companies that you buy every day like Proctor and Gamble (PG), Walgreen's (WAG), Coke (KO), Pepsi (PEP) and stocks like these. Here is the reason behind it. During a recession people are always going to buy these products. Smokers are still going to smoke, drinkers are still going to drink. I threw WAG in there because that is the leading company for pharmaceutical buying although Wal-mart is now in that business and trying to take some of that away (that is another good stock). Here is the problem with this though. A lot of people know this already and stocks are in the $40 range for most of them. Stocks to stay away from are financial institutes and car companies. As I mentioned that most of the stocks you should buy in a recession are above $40 but check out my link (stock horizons) and he has a couple of good pharmaceutical companies listed that are cheap and great picks.

The next subject I would like to touch on is savings accounts. I recently got a new account at Wells Fargo. I love the bank (even lets me transfer money to international accounts for $2.50 instead of the $20 or more at other places)! The thing I wanted to talk about though is the savings account at this bank and all of the other traditional banks you walk into and open an account. Check out their interest they give you. I stopped listening when I hear .0...something. Understand that banks use your money to loan out to other people at a 6% or higher interest and give you back .01%! I use an online bank called ING DIRECT which gives back 1.5%. Yes the 1.5% is much lower than the 6% they loan the money out. The only problem is that you have to wait a couple of days to transfer your money to where you can get it but most of the time you don't need it because you want to use it on impulse buying and this will give you the 48 hour rule I talked about earlier. 1.5% does add up, trust me. Check it out and guarantee you will not have a savings account with another traditional bank again.

http://www.ingdirect.com

When is the last time you took a vacation? How did you get your plane tickets? When I tell people that I'm going to vacation all I hear is "travelocity", "cheap tickets" or "orbitz". I can honestly say that I have NEVER saved money using these sites (hotels are a different story. I have never tried any other option). Don't even go to the airlines web page. CALL the airline companies! The last airline ticket I bought was $300 cheaper than any web site had to offer. When you call the airline company they are going to find every discount they can to sell you a ticket. Try it...prove me wrong! The airline company I found to be the cheapest has been Southwest. I flew my daughter out for Christmas and by calling the company I saved over $800 over the other companies. My daughter is a minor so I had to pry the hidden cost out of the other airline companies (like $75 for putting her on the plane and $75 for taking her off of the plane). Southwest was $0! Find out the hidden cost before committing!

This is my first stock input that I have made. I strongly think will continue to go up and make me lots of money. Serious XM satellite radio has caught my attention. Not only have I made a 700% profit off of this stock, I seriously think it will continue to rise. The 1 year target estimate has jumped almost .30 in 1 week. I sold the stock when I made my 700% profit and have since gotten back in the stock. This stock will continue to fluctuate but I see nothing but profit from this stock...dollar signs are in my eyes!

Please check out http://www.stockhorizons.blogspot.com/. This site deals more with stocks from a good buddy of mine who does as much research on the stock market as I do and his blog goes more in depth. It mainly deals with penny stocks. Penny stocks are more risky but also have a higher gain.

*Info taken from yahoo finance.

The thing that has saved me a lot f money is something I refer to the "48 hour rule". Next time you go out shopping just to "look" or get out of the house and you see something you really like. I'm not talking the $5 to $100 items. I'm talking the new TV, sofa, computer, things like that. Here is a basic system that will save you from buying the thing you already have and don't need. After you see something you really would like to have (not need), wait 48 hours. Think about it during that time. I guarantee that 90% of the time you will not buy that item. You will realize that the money would serve you better in you savings account waiting for the time when your want becomes a need. AVOID the impulse buying! At the end of the 48 hours and you are still thinking about how bad you would like to have the item in question, buy it. Like I said earlier. You are far less likely to buy the item and later down the road you will be glad you didn't especialy when that item goes on sale and you can get it far less than what you originally would have paid for it.

My first blog is going to be one of "common sense". Many people have several credit cards hidden away in their wallets and purses. Many get their first one with the mind set of "I'm only going to use this for emergencies." That one card leads to another and before you know it you have 4 to 6 credit cards all with a balance on each one of them.
Many people then only pay the balance due on each of them. This s the biggest mistake people make and this is why I made this my first blog. It's your money so you should know which card has what interest rates. The first rule of credit cards that the companies don't want you to know is that they give you those cards because when you use them it makes you feel like you are not using money. Every time you use this card and only pay the minimum due just keep in the back of your head that by the time you pay your bill you could have bought two of whatever you just bought and God forbid if you happen to be late on the payment you could end up paying up to 26% interest. First thing you should do besides not getting a credit card is never be late on the payments. Here is the deal. If I loaned you a $100 at 15% interest a month and told you that you only had to pay me $15 a month until it is paid off, you would always owe me $100. Now add another $100 to that. Don't get me wrong. A portion of your payment will go towards the money you spent on the card but most of it goes to the interest you owe. You can see where this is going!
You should also know what the interest rate is on each card. No matter what the balance is on each of your cards always pay off the card with the highest interest rate first. When that is paid off shred the card. YOU DON'T NEED IT!
Always read the fine print. Most of the time that is the most important part of the credit card deal. that is why it's so small. Many don't realize it but before you even use the card you already owe the company $100 plus whatever interest THEY set.