blog, blogging, money

WEEKLY MARKET RECAP

Red hot sector.

This week the cannabis sector has been on fire. Stocks such as Tilray, Canopy Growth, Aphria & Aurora have been gaining momentum this last month as Canada prepares for legalization of recreational marijuana on October 17,2018. Also , with whispers of larger tobacco, alcohol and pharmaceutical companies looking to enter the sector expect a lot of interest in these stocks.

Is it too late to get in the game? I don’t believe so. I believe a stock like Tilray , which has reached a high of $300 recently is way overpriced but there are other companies I believe still has lots of room to grow. Aurora, Hexo & Aphria are 3 marijuana stocks that aren’t as pricy as Canopy Growth or Tilray but have long term potential.

Aurora Cannabis is looking to uplist to US markets next month but at this time trading OTC under ACBFF. Also, their earnings date is coming up 9/25/18 so there is time to purchase some shares and receive possible future gains. Also , with recent whispers of large beverage companies looking to partner with the company, I think this stock is fairly undervalued when compared with the other stocks in the sector.

Hexo (Hydropothecary) is also a reasonably priced marijuana stock. They currently have a joint venture with Molson Coors. At a price under $7.00 there is still time to hop on the cannabis train for a decent price.

Aphria is also one of the top 5 Canadian marijuana companies and has the potential possibility of being picked up by a beverage, tobacco or pharmaceutical company.

I listed some of the different stocks in the sector and believe there is a lot of potential for high long term gains. Remember, this is a new sector so expect a lot of volatility in the short term. If you are risk-averse these stocks may not be in your best interest. If you are okay with high risks, high rewards, I suggest you research some companies and look to invest.

DISCLAIMER*** I do not associate or work with any of these companies. I recommend you do your own research or contact a financial/wealth advisor if you need assistance in deciding if these stocks are right for you.

blog, money

Financial Freedom

The idea of financial freedom is being able to afford your current lifestyle without actively working for a regular paycheck. Some may look at retirement as an example of being financially free. I personally believe financial freedom is being able to live the life you want without having to stress about money. It is when you no longer have to worry about money coming in or what bills you need to pay. I believe most of us desire to reach a place of financial freedom but the reasoning for this desire is different among each individual. Not everyone desires to stop working especially if they are doing something they love. Let’s take a look at the richest man in the world today, Jeff Bezos. He was and still is very passionate about his company Amazon. Lucky for him, his passion has lead him to extreme wealth where if he handed the company over to someone else he would have no worries about money. In this case, financial freedom is not about retiring but being able to do the things that you are passionate about. It gives you the freedom do what you really want in your life or take risks without worrying about when money will be coming in.

Think of the term starving artist. Imagine living, breathing , creating art or music but not making enough to live on. In this scenario, you would have to get a full time job in an office and live a life that doesn’t make you happy and it will take away your time from dedicating your energy into what really makes you happy. This is why learning how to make your money work for you is important. If you just work this other job for the next 30 years and don’t properly manage your money to allow you to also do what you enjoy then you would have lived an unfulfilled life.

My goal is to reach a place of being financially free which will allow me the option to have the choice to work or not. Since I am working full time for a company, I make sure I invest my money into things that will bring in future passive income that will help me afford my basic necessities. Examples of this can include dividends from stocks, real estate, side gigs, own business etc. I think it is important that you don’t just work for a paycheck , pay bills and “hope to retire” one day. I believe the sooner you begin to put money into things that can make you more money and find ways to generate more streams of income outside of your employment, the more wealth you can accumulate in which you can reach financial freedom sooner than the national retirement age. Life is about balance. Let’s be honest, none of us know how long we will live to so managing your money to enjoy it today and also making sure you have enough for the future is extremely important. I get it, some people have the mindset that they don’t want to wait until they are older,  sick and can’t move around like they do now. That’s why you must capitalize off of the things you are good at and enjoy yourself while also working for someone else if you cannot withstand the risks of solely relying on your talents/passions. Also, let’s be real, not everyone wants to work for themselves or be a boss and that is fine. The idea of financial freedom is to allow yourself to retain as much of the money you make and find ways to grow it so at some point you can do the things you enjoy without worry. If you feel like traveling to another country next month, you will be able to without stressing how to make that happen.

What is your definition of financial freedom?

Create a list of your hobbies, talents and come up with ways you can make money off of them. You can even take personality tests. If you are an extrovert who likes people and good at selling things you can be a sales consultant. If you are an introvert who is good with computers or website designs you can offer those services to make money. There are so many ways to make money. Utilize the resouces you have available such as books and the internet.

“It is not how much money you make, it’s how much money you keep.”—unknown

After finding ways to make more money put that extra income to work so you can generate enough passive income that will allow you to live a financially free existence.

Self help

Sunday [RESET]

Sunday is the perfect time to reflect on your upcoming financial goals. Is there anything you want to change? Looking to rearrange your budget? Sunday is the perfect day to map out the steps you will like to take for the week that will help you meet your long term goals.

Create a list of the things you need to buy for the upcoming week such as food, gas, tolls, maintenance, bills etc… If you know where your money is going ahead of time it will be easier for you to account for where it’s going. Review any retirement accounts you have or your current investment strategies. Sunday is a day to unwind and it will be easier to handle finance goals when you are in a relaxed state of mind. Managing your finances when you are not stressed will make it a more pleasurable experience. What you do today will show in the future. Remember when you have a plan and execute it you are more likely to reach your goals. Action gets you results. Inaction leaves you standing in the same place. Don’t keep holding off until tomorrow, today is the best day to get started.

finance

Compound Interest

If you are new to investing you may not know how investing works or what it exactly entails.  It sounds easy but if you have no clue what it actually means to invest or how investing makes you money, you may avoid it altogether.

If you invested $1,000 in Amazon when it first went public in 1997 , it would be worth over $1 million dollars today. Please note that not many people would have stuck with the stock for the last 20 plus years to ride out the lows to get to where it’s at today but this is an example of compound interest at work. I am using Amazon as an example because it has been one of those stock success stories that people look to replicate but if it was that easy to make millions we would all be millionaires so please keep in mind that Amazon is quite the anomaly.  I chose this example to show you how compound interest can work wonders and since it is a company that most people know it is easy to follow along.  Although, there is more to the high returns with Amazon stock I just want to focus on compound interest for this blog post because it really is the reason people risk investing their money.

A simple way to explain compound interest is “interest on interest”.  It is where interest is calculated on the initial principle amount plus any previous interest you accumulated. The compound frequency varies depending on the type of account you have your money in. The compounding frequency can be daily, weekly, quarterly semiannual, annually or continuously.   If you are still lost to what any of this means please see the following example below to help you get a better understanding of how this works.

 

Let’s say you invest $100 in an account with an annual/yearly 10% interest rate. If you initially invested $100 , your money would now be worth $110 at the end of the year. The following year, you make another 10% return on your money which would now leave you with $121.00 at the end of that second year.  The $121.00  in the second year was calculated by taking the initial principle amount you invested the year before of $100 plus the 10% interest which was $10.00  totaling $110 and adding another 10% to that amount.  You can do the same thing for the following year and add 10% to the $121.00 from the second year so that by the end of the third year your money is now worth $133.10. It may not sound like a lot but if you keep that money in that same account for 20 years without touching it that money will be worth $672.75. Most people would continue to add money to the account and not just make one deposit. This is where the magic of compound interest can help you build a nice size nest egg for retirement or any large purchase you may be planning.  If you continue to add money to that account over the 20 years you will have a nice amount of money to fall back on. Let’s say after your initial investment of $100, you continue to add $1,500 to the account annually for 20 years from the date you made the initial investment. Your account would be worth $86,585.25.  There are many different investment vehicles and I would recommend researching this information in books or online immediately.  The earlier you start, the easier it will be for your money to grow. If you have 30 years until you retire you can invest less money over time than if you wait until later on in life and have to play catch up by putting away much more just to be able to enjoy a comfortable retirement.

If you have any questions please feel free to ask below. You can also google compound interest calculators if you want to play with different numbers and lengths of times to see how much money you can have in the future if you start investing now.

 

Disclaimer: Returns aren’t guaranteed and there are risks when investing especially in the stock market. Please do your due diligence in researching or get help from a financial professional before investing your money if you are not sure where to start. ***