Let your money and other people’s money make you some money by having a good investment strategy!

Sitting on your ass and not being a prudent investor with a sound investment strategy for you and your family’s future will cost you dearly! Don’t be a pigeon.
Let’s face it, there is such a thing as inflation and it erodes that value of your money.  Currently, inflation is roughly 3%. What does this mean? Well, it means you lose 3% of the value of the dollars in your bank each year compounded (compounded interest explained in next paragraph). By the way, I am not selling or endorsing any particular investment plan for all of you but I am promoting an investment-oriented mindset where you will come out ahead in the money making game.
Compounding interest is a term I would like to introduce you to and the idea of compounding interest goes back since the beginning of recorded history. It is interest that is charged on top of interest. Let’s say you have $100 with 10% annual interest. In three years, you will have earned over $33 on top of your original $100 principal investment. Let the interest game work for instead of against you. For example, fuck credit cards unless you are using it for expenses on some type of investment that will earn dollars in terms of a rate of return better than what the credit card companies are charging you in interest).
I will introduce to the 72 rule which is a useful for figuring out the time period it takes to double or halve your money given an interest rate (or rate of return on your investment). This is a quick rule for finance geeks (like me) and very simple to use. Let’s take the 3% inflation that we currently experience in the U.S. The 72 rule goes like this. Let’s say you have $100 dollars and you are experiencing 3% inflation (approximate inflation rate in the U.S.). By the 72 rule and compounding interest, you will have lost half of your money by 24 years; 72 (always 72 on the top) / 3 (interest rate that you plug in for the formula). Now let’s say you have $100 and you can make 10% interest on that money. By compounding interest and the 72 rule, you will have doubled your money in 7.2 years; 72 (always 72 on the top) / 10 (interest rate that you plug in for the formula).

Investments are part of life and date back since the beginning of recorded history (about as old as fucking taxes). Consider it as basic as taking eating lunch. Invest in yourself and your future and hold back on using current dollars for things such as buying that brand new car. If you play your cards right, you will be buying swinging on a hammock enjoying a nice cold beer letting your investments make money for you.
Another example of investment opportunities are college savings investment plans, such as 529 plans. A 529 plan is an investment plan recognized by the IRS to promote saving for you or your child’s college tuition costs. These 529 investment accounts (“college savings investment plans”) can be used to invest in a variety of investment options that include stock mutual funds, bond mutual funds, and money market funds. The person that is setting up the 529 account, the account holder, needs to get a list of participating colleges and universities from a broker and find out which schools recognize these types of investment plans.

There are two general types of 529 investment plans: pre-paid tuition plans and college savings plans. There are many differences between pre-paid plans and the college savings plans but one important difference is pre-paid allows you to lock in a tuition cost and the college savings plans do not.  Another notable difference between the two categories of 529 plans is that the pre-paid plans are backed by state plans and college savings plans are not.
Some examples of investment plans for both individuals and employers are Individual Retirement Accounts “IRAs”. There main difference investment plans for individuals are retirement accounts that are taxed up front, “Roth IRAS”, and retirement accounts that are taxed later, “Traditional IRAs”. There are also retirement plans available for the self-employed and employers such as SEP IRAs.
There are many advantages to having these types of individual retirement plans in place for yourself besides being able to collect the money before you are at nice and ripe age of 59 and a half. The funds in your retirement account can be taken out earlier if you are planning on buy, build, or rebuild a first home. It is also exempt from bankruptcy due to the age restriction and most states protect the assets in your retirement accounts from creditors.
Investing is a concept when you take some of your money and put it in, or “vest”, in some type of asset. It can be stocks, bonds, mutual funds, options, futures, precious metals, ….even fucking baseball cards. Investors look at some type of asset and use valuation models to figure out what it is worth and what it will be worth in the future. They try to put a number regarding the value of that asset. One thing that is essential in this valuation equation is looking at the potential growth, or potential future demand for that asset. The bigger the future demand from everyone on this planet for that asset that you are holding, the more you can charge in the future and the more cash you can stick in your bank account.
In the stock world, valuation really takes in consideration earnings (or profit) and dividends. In the bond world, valuation looks at interest. When I talk about earnings and interest, I am talking about current and future earnings and interest. It is really more about future earnings and interest than current.

I heard a phrase in the Marines that will stick with me for life, “Scared money don’t make money!”.  This means that if you sit on your ass with money in the bank you have already lost in this investment game. Don’t be scared money but don’t be foolish with your money like betting it all on a Blackjack hand. Nothing is certain in life but investments are considered smart gambles as long as you, the investor, is aware of the risks with your investment plan. Make your money and other people’s money work for your future by developing an effective investment plan that works for you..