Laying groundwork

The world of finance is really confusing from outside. But really it is just human beings like you and me on the inside. They have their own flaws, notions, ideas, homogeneity, cohesion and apply to the basic nature or the general human nature. Really, it is one window or view of the state of the human society. In a way, it is just an amazing picture of the kind of things that happen in the world. It is definitely a worldly thing, a materialistic thing but then rather than dig deeply into philosophical aspect of thing, let me tell that there is nothing spiritualistic or philanthropic about such things. In the grand scheme of things, money buys time and is an essential thing is today's society. But one has to be just careful to consider the costs of acquiring and investing said money. Hence, we would discard the illegal investments even if they were to return us higher return of investments :D.

As previously said, at this point of time, we will also not pursue much on Forex and Derivatives. Both are instruments for the very very big investors with more than a billion to invest and with heavy amount of disposable liquidity like governments and agencies. So sticking to just stocks and bonds, debts, the main instruments that are available are your friendly credit unions, CDs and savings accounts, investing in real estate thru your home and rentals, stocks, bonds thru brokerages and mutual fund companies. It is imperative to have some sort of accounts with the Vanguards, Schwab or TD Ameritrades. Many offer to trade their own ETFs or mutual funds for free. Have some accounts opened under your name for the IRAs - Traditional and Roth; 401ks, Simple IRAs, Rollover IRAs as soon as you leave your job to the next one, 529s, HSAs and general taxable accounts. Now all the big hitters or rather the funds that you think will appreciate well such as REITs, stocks etc will stay in tax-advantaged accounts such as IRAs while the slow growers stay in taxable account. That way you are not holding off a big bill come tax time.

So don't overthink such things, just open some accounts. Practice with some play money and maybe put 5000 USD in couple of them and buy basic, brand name stocks from DOW Jones Index. This will give you a feel about the funds. It is just like driving your car and getting a grip. You need the first car drive to be smooth and you take in simple places and in a predictable fashion. Explore your own mentality and feelings and emotional level, risk feel etc. Don't take this as a be all end all. You change. The market will change you. Time always changes human beings. There will be a lot of learnings ahead telling no active management or active trading and just stick to index funds. Now, everyone start putting in index funds, the market will become inefficient by definition. Maybe, come up with your own index. Along the way, you might not agree with some companies - don't agree with them on environmental policies, their strategies and goals, their growth practices and the way they are, the stories and associations you have with them. For instance, if you are in the computer industry, many folks like Linux and dislike a Microsoft or Apple. No matter what or how much return is, one might not invest in them. Which is fine. Invest what you are comfortable with. Your principles and you matter. Money is just an extension. Similarly it is perfectly fine for individuals who slug it out in the private sector and not have the security and buffer or pension from those in the public sector to crave some security and instead want to put money in cash or just CDs. Totally fine and this is what the point of this blog is. It is not just another money blog. It is not another finance blog. Those info will be always available in government sites and whole tons of other blogs. This is about finance philosophy and how that drives what we invest and where we invest and what stocks we invest and what strategies we follow. 

My approach for the accounts are rather have a sprawling set of them than having one shop for all your investing needs. Some names that are quite common in the trading world are the Tradeking, zecco, TD Ameritrade, ETrade. I have been exploring the Level 3 which helps you buy fractional shares of brand names companies. Similarly, there is no harm in opening multiple types of accounts especially at the time of this writing when we have 0% savings rate for about 5 years running now. For most part, the online savings etc. give minimal APY in the US where the liquidity is available in plenty for the businesses.

Some Basics ...

There are tons of info on the types of accounts out there. So I will simply blaze thru them fast assuming you have read some of those, visited some websites, wikis such as those related to Vanguard, Fidelity, Boggle heads and about 10 big books speaking 10 different philosophies each of which are cornerstone of a major market like the US ones. Dont get too bothered on the semantics like NYSE or NASDAQ or any such stock exchanges - they are just places - electronic or offline where money changes hands. I will also steer away from Futures - I think they are pretty close to the gambling tendencies such as betting and contemplating rather than making an informed guess. Fundamentally there is a component where the outcome is manipulated or follow inconsistencies beyond what would constitute as investing or banking one's hard-earned money. Options are fair game and can be used as a risk management or hedging tool. But right now, I am steering away  from Options too as I think they also have a betting component. There is a certain detached action associated with investing in such instruments or derivatives or similar kind investments. They also come in various forms presented to the naive investor in the form of Inverse ETFs or similar stuff. 

Bottom line: I look at the debt model. I loan a company, a product or a project some money and expect timely interest payments and full payment on principle after certain years. Similar to what your local credit unions does. Now, add an ownership component and you have stocks. So basically I will focus on stocks and bonds, mutual funds and ETFs. I used to actively trade once upon a time. There is simply not too much for a retail investor to make in this route. Yeah, I did have about 20% + returns at times but I think one is better off this is a strategy that is applied when there is large-scale amount in picture. Also, most big managers or hedge fund folks that capture imagination of 20s and 30s are essentially people who are making money off the fees rather than hitting a homerun. The money in most developed market like US is saturated and you have recent IPOs who might have a real world evaluation of 20s but are propelled by big players to keep them in 60s by actively buying off pools of shares. Of course, some MBA from Harvard will try to put a noun and spin on it so that it is not known as manipulation. Those stuff aside, without getting overwhelmed by lot of stuff from the finance bling bling world, the  most important things to consider are the writings of Warren Buffet in his annual letter. The archives are there in the Berkshire website for free download. A bunch of books like the "Random walk down the wall street" or some study showing that the monkeys make better fund managers. Must read for any one, beginner or veteran needing a constant reinforcement in their beliefs is the writings of John Boggle of Vanguard. I will go over their philosophies and differences in subsequent posts.

About and stuff ...

Pretty much everything about this site, the legal stuff, disclosures and disclaimers, any affiliates or legalities, any thing is derived from its sister blog: https://creditcardsteroids.wordpress.com

I wanted to combine all this into one blog but from a reader perspective it makes sense to just break them down rather than have one large blog, just like any other blog out there and have multiple tabs or links in them. It is much neater design to have separate blogs. It would lead to some more time management at my end. Some more sporadic or rather sprawling collection of contents but I guess it would be all inter linked and loosely coupled so in a way, it would be like small boxes of peaches of different varieties and one tries different stuff. All the views here are my own and more in line with my own thinking related to the investment world and more on the world of finance itself. For credits cards , I have the other blogs and if anything else catches my interest in future, I would take them in here or a different blog. I definitely want to dabble in Music or some other Art form. Art is cool and gives a different perspective to Math and Science and a well-developed balanced brain requires all three of them in varying measures throughout life.

Personal Capital - Few Thoughts

Recently, I was exploring some tools similar to Mint, YNAB or any software which helps me give varied views of my financial landscape. The thing is I like to rotate them and put them in various sites for fear that if one site has all the data and for what-so-ever reasons the site security gets compromised, then you are in for a ride. That is one of the primary reasons why I created multiple accounts with the likes of mints/yoddlee or something that is preferably away from the big companies.

A new site which caught my eye is Person Capital. It is a San Fran based start-up and the site is pretty impressive and very easy to understand and operate. There are no unnecessary clutter and "tools" on the website. It is pretty neat and elegant design. I liked the speed of the site and the overall value it provides in terms of reminder emails as well as fresh articles in their blogroll.

Further, any such site will have their value measured by the database of third-party banks with which they integrate and how fast they do that. I hate PayPal for this particular reason that their integration features are from the last century. In that respect, Personal Capital integrated with many banks and financial institutions with elan and ease. I threw obscure credit unions, big banks, investment accounts, insurance companies, mortgage accounts and even an odd international bank to boot with not many local branches. So, having passed all the test, I have referred it to a few of my friend and colleagues, who gladly signed up for their services. In case, anyone here is interested, here is the link: http://refer.personalcapital.com/share/k3w6m
It is a slight departure from the usual credit card centric theme of this blog but oh well, it is just an odd post before I get my other blog running related to the money matters.

Welcome

Welcome to my blog!

This blog is aimed primarily at Gen X and Gen Y ( or the popular slang Millenials) but the content is useful for people of any age group. The basic premise remains the same and will explore the world of finance, general strategies, try to debunk certain theories, emphasize on simplicity, costs of managing money in terms of money and time, the frugality aspect of money, the spending aspect of money where it is better to invest or spend some money to gain some time and finally the human aspect of money. At the end of the day, money is a man made construct. Though it is an important construct and plays a central part in most people's lives, the point of money is also to gain freedom and do what you really want to do rather than spending all your lives scheming how to make money and how/where to compromise. Speaking of compromise, we will also look at different values objectively and see where it makes to compromise and by how much degree and what it gets ya.

Pretty lofty goals all and hopefully this does not die a natural death. There is also an affiliated credit card blog with this blog:

The main blog can be found here:

http://creditcardsteroids.blogspot.com/

And there is also a better blog with same content but with no ad fees for me here:

https://creditcardsteroids.wordpress.com/

Both are not having any affiliated links at the moment and is true to its core spirits. The philosophy and general strategy will remain the same for this blog too.