Don't Just Blindly Enter the Markets

If there is one thing I talk about all the time wherever I write, it is about the importance of understanding and participating in the stock market. I talk about it as much as I do because I think being in the stock market trumps all other means of income and wealth building, aside from owning your own successful enterprise.

But there is a caveat to this that I often do not have the space to dig into more deeply, but it as important as my advice to understand and participate in the stock market, and that's to make sure that you know what you are doing when you decide to invest your money.

It's not unlike many things we do in life. We can't just blindly step into something and expect to have an instant good outcome. Knowledge is everything when it comes to not only saving your money but also investing your money.

The thing to keep in mind is that, generally speaking, the stock market is not all that complicated a place. Granted, some may find it a bit scary. Some may believe that it's rigged against the little guy. Some people think it's not a place to make money, but to lose it.

You can learn it.

A great book to read, if you have not already, which is often considered the Bible of Investing is The Intelligent Investor by Benjamin Graham, the man who was the mentor for Warren Buffet and a lot of the ideas he has about what to look for in a company—and essentially how to invest.

I will contend that it is not an end all be all guide. But it is a great book to get started to get your feet wet.

In order to ever be in the money, you must first be in the know. You need to know, when you pick a stock, why you are picking it, and keep in mind in so doing that you are not investing in a stock, but rather you are investing in a company.

What that means is that stocks do things day to day. The interest is not in what a stock does day to day, but what the company does and the value of the company over the long term. Many people get overly cautious or skeptical when a stock moves—they either get scared and sell at a loss, or they sell too soon if the stock suddenly jumps and lose out on the real future value the shares may generate.

It's not as simple as putting a bunch of company names on a dartboard, blindfolding, and simply start tossing darts. It is important to read balance sheets and understand how a company makes money, and how it will either potentially keep on making money or make more money.

It's important to know how a company manages its debt, how much money it keeps in cash, what the costs of operating the business are and what external factors may drive margins up or down. It's important to understand terms like price to earnings, debt to income, EBITDA, and it is important to understand how to compare companies against their peers or to evaluate companies that are similar.

For example, I invest in both Walmart and Amazon. But I invest in them for different reasons. For one, I don't view Amazon, really, as a total retail company like Walmart is. Amazon is much more about distribution and tech, and I think that separates Amazon. Both have lasting value, just in different ways.

For the same reason I invest in Ford Motor Company and Rivian for different reasons.

Granted, you could probably be relatively safe investing in iconic brands that have stood the test of time and likely will for the foreseeable future like Coca-Cola, Kraft Heinz, McDonald's, Proctor & Gamble and things like that. But there are myriad other businesses just as good, with just as much future potential to rocket, that are worth investing in.

You just have to make sure to know what you are doing and do your homework. Due diligence is a tenet of sound investing, and it is key to generating profits that can not only provide future income, replace current income, and generate wealth—but even change the entire way you view money and its benefits.

I think it is vitally important to point all of this out, because the fear I always have is that if people simply go blindly into the markets and then lose their money because they didn't know what they were doing, it will stop them from ever exploring more and they will likely never get ahead or reap the benefits of what the stock market truly offers. Most importantly, to ordinary working folks like you and me.

When I advise people to get into the stock market, I want them to actually succeed. And unfortunately, I can't always take the time to fully explain what it all means, what to look for, and how to actually do it. I also don't like to make investment suggestions, although sometimes I will, because I also feel it is more important for individuals to seek out information on their own, and to have their own perspective and ideas about why Company X is a good investment or not.

A lot of people get it wrong, including me. And you will get it wrong too. But at least you have the goods to understand what you missed because you did your own research in the first place.

At the same time, a lot of people want to rely on brokers or other so-called experts. They watch certain business news programs and want to trust that guys like Jim Cramer know what they are talking about all the time.

Never invest in a company because someone told you it is a good investment. Invest in a company because that's what your own research tells you. If you aren't sure, don't invest until you are. I can't stress that enough.

At the end of the day, it's your money and every penny is important. You work hard to make it, and you work hard to save it. Blindly investing what you have worked hard for and worked hard to save is as much of a waste of money as walking into a casino and expecting a big win or buying a lottery ticket and expecting a big jackpot.

Even a blind man doesn't simply walk blindly. He has the tools and the knowledge to get where he wants to safely be before he ever walks out the door.

Like the way I write and the things I write about? Follow me on my Facebook to keep up with my latest writing. Feel free to follow me on Twitter @jimbauer601 as well.

Dave Ramsey in Some Heat

One day it seems to eventually come that certain faces we know and love have a dark side. To be fair, don't we all? I think it could be safely said that nearly everyone has at least one skeleton tucked away in their closet.

To be fair, it may not even be an example of a dark side or a skeleton in a closet, but there does seem to be another side to financial advice radio talk show guru, Dave Ramsey in light of a recent lawsuit seeking $150 million in damages from a time share exit company he has touted on his show for years, Timeshare Exit Team.

The lawsuit alleges that customers of the company Ramsey endorses has robbed them of tens of thousands of dollars and that the company rarely actually gets people out of their timeshares, but simply pushes customers to simply default on what's due.

That's a far cry from what Ramsey advertises about what Timeshare Exit Team actually does. The company also seems to have found itself in legal trouble before—including in May of 2019 when it was deemed by the U.S. District Court for the Middle District of Florida to be unfair and deceptive. The company was also sued by Washington's attorney general stating that every aspect of Timeshare Exit Team's business was deceptive or unfair.

It would seem that Dave Ramsey would be aware of what a business he promotes does, yet he continues to promote the company on air. And over the years it is estimated that for doing so he has received over $30 million in payments from the company.

Perhaps beneath the surface Ramsey is just an opportunist? Which seems a bit counter to how he advertises himself as a "helper of people," and often cites his Christianity on air and off air. Over the years he has gained quite the following and is loved and admired by many. Thus, he has made a fortune doing this.

I actually listen to Ramsey often and find most of his advice, although some of it a bit on the extreme side, to be informative and useful. I think he is mostly a genuine guy with the right ideas at heart behind what he does.

But he is a businessman, of course, and sometimes in business you do things to simply bring home the bacon. I am not sure there is much wrong with that either, but I do take issue with misleading your listeners and find it puzzling that despite mountains of evidence that Timeshare Exit Team is not an above-board company that he continues to promote it.

But Ramsey is not without other issues against him. He's been sued for discrimination in cases where he fired employees who were unmarried and became pregnant. Certainly a result, likely, of his Christian beliefs, but not necessarily an appropriate workplace policy for any company. It also seems, to me, that's a bit mean-spirited.

The bottom line is that for decades Ramsey has always come off a squeaky clean guy with the best of intentions at heart, and in light of some of these new details, it suggests that behind the helpful face behind the microphone, there may be darker things afoot and perhaps Ramsey is not as much the loveable, likable guy he portrays himself as.

He's got a few skeletons in his closet, some of which are being seen, and it makes you wonder what else lies in the deeper, darker corners of his closet?

Like the way I write or the things I write about? Follow me on my Facebook page to keep up with all the lastest writings from all the places I write.