“One Up on Wall Street” by Peter Lynch Book Review – Open Your Eyes to the Opportunity Around You

Open Your Eyes to the Opportunity Around You

Warren Buffet is reportedly worth over $81,935,540,999. Part of the reason for his wealth is he is a meticulous supergenius (when it comes to business) with over half a century worth of experience at choosing companies to invest in.

But just because Warren Buffett reads the charts every single day, and works with some of the smartest business leaders in the world doesn’t mean you need that to do all that to pick a good stock.

Sure, if you want to start the next Berkshire Hathaway, you will have a lot of years of work and study left ahead of you.

But if you are tired of losing money to inflation, and/or want to watch your money grow, investing in stocks is just one method to grow your money, and you don’t need to be Warren Buffett to do it. You can’t try to be like him if you don’t invest any money in the first place, but then again, don’t even bother trying to be like Warren Buffett.

At most, study his work, but no one is ever going to call you Warren Buffett (unless you are Warren Buffett)… The reason I keep mentioning Warren Buffett is to demonstrate an outlier of what people might perceive stock investing to be. It doesn’t need to be that “far out of current reach.”

You cannot expect to be an outlier before you ever risk your first dollar. You have to at least learn some of the tactics first…

And here is where “One Up on Wall Street” by Peter Lynch comes in…

Everyone has a chance to be successful at picking and investing in stocks.

If you read the famous Benjamin Graham book “The Intelligent Investor,” you might have gotten intimidated about investing by all the charts and math, and perhaps the fact that the rates and company data is very outdated.

But Peter Lynch shares many tips and secrets on how to find stocks that are sometimes literally right in front of you. For example, the next company that could be a great investment is:

  • The company that makes your mobile device
  • The IPO on your next mobile app
  • That random hotel you stayed in when you were driving across the country…

You don’t need to be a supergenius. There is a great investment story that Peter Lynch talks about that might even make you listen to your wife or girlfriend more…

Sure, if you want to be one of the worlds richest men, you will need to do more than just read a few books about investing.

“One Up on Wall Street” is a fantastic read that can help you get started looking for those investment opportunities that are all around you.

As with all investing, yes there is a chance to lose money, and yes there is a level of uncertainty and risk. But you can reduce the risk by learning from some of the best, and Peter Lynch is one of the best.

“One Up on Wall Street” is a remarkable book even if it is the first book you ever pick up about stocks. And fortunately for those of you who get bored easily, Peter Lynch has a great way of turning his successes and failures into stories that you can apply to your life to help you get started on investing.

Everyone needs to take the first step.

You don’t need to spend 10 hours a day reading company Annual Reports, and you don’t need to research every single company out there before making a decision.

You can read “One Up on Wall Street” and start recognizing the opportunities right in front of you.

And here is the other thing that gets repeated in work by Buffett and Lynch – the idea that there is something more important than simply “choosing a stock based on what you read on a report.” That is understanding their management team…

If you have ever wondered “how do some people pick winners” in the stock market, Peter Lynch shares many of his hows. But be warned, there is some math and a few charts to study.

And after all this has been said, you will still need to do your research even after reading “One Up on Wall Street,” but at least you will have a foundation of where to start or even continue your search for your winner.

Plus Peter Lynch makes it all crisp and clear to understand.

I had to re-read a few sections multiple times, and there were a few sections I did not fully grasp personally, but overall, I think this is a fantastic book that turns something intimidating to many people into something that is more accessible.

With that, I give “One Up on Wall Street” a 5/5. It isn’t often that you get an investor like Peter Lynch who shares the methods that helped make him and his clients HUGE TREMENDOUS BOUNTIFUL TONS of money, in a way that everyone can understand. And Peter Lynch also goes over some of the other skills you need such as emotional management and rationality.

==> Purchase a copy of “One Up on Wall Street” by Peter Lynch on Amazon today and open your eyes to the opportunity around you.

Got Student Loans???

By: Joshua Krafchick CRPC®

Originally posted on The Millennial Slacker’s Guide

This article republished with permission from original author.

I have recently received a lot of questions in regards to student loans and what are the best strategies in order to pay them in the most efficient way possible. Well for those who have questions…. here we go.

Subsidized vs. Unsubsidized Loans

The key difference to realize here is SUBsidized loans are loans that you do not have to start paying interest on until you graduate college. In order to qualify, you must be a ½ time student and be in a financial situation where a loan will help you with the burdens of college expenses.

Unsubsidized, are just the opposite. You do not have to qualify, the interest of the loan starts adding up immediately, and unlike a subsidized loan, there is no 6-month grace period for you start paying after graduating.

Get it?

Student Loan Interest Deduction

If you have student loans, the current amount of interest that you can deduct is $2,500. The easiest way to figure out how much of your loan is tax deductible is to do the following:

  1. Take $2,500
  2. Divide it by your average interest rate
  3. This gives you the amount of your loan that is going to provide you the highest tax deduction benefit

Example:

You have $50,000 in student loans, with an average interest rate of 7%.

$2,500 divided by 7% (.07) is approximately $35,714.

What this means is that the difference of $14,286 is not providing you any sort of tax benefit if you qualify for the tax deduction.

Which loans do I pay off first?

The amount of your loan that does not provide you any tax benefit, considering the highest interest rate, should be the loans you prioritize first.

From there, as you make your monthly payments, you will see that your total loan balance decreasing, you are maximizing your tax deduction, and pin-pointing the loans that are working against you.

Loan Repayment Financing

The goal here would to be lower the amount of interest you pay on your student loans. However, beware if you speak to someone who says they can lower your payment, your interest rate, but increase your term.

The reason why is that despite you saving “money” on your payment each month, in reality you are just paying more interest than if you just kept your normal payments.

Always consult with someone that you know who is knowledgeable in the subject before making a big decision such as refinancing your student loans.

Income Based Refinancing

Be very careful when it comes to refinancing your student loans that are “income” based. The reason why is if you expect to be receiving raises or promotions in the future, this can negatively affect you in the long-run.

A friend of mine refinanced based off of their income, which was around $35,000. After working at their company for a few years, they received a promotion, a raise, and that ended up hurting them because of income based refinancing.

Now, they are stuck in a payment that is actually larger than it was originally, which is not a benefit, but added baggage onto their financial picture.

If you are someone who’s income is not going to be fluctuating over the first 10 years of their career, then maybe income based refinancing makes sense. Just be cognizant that sometimes, it pays just to keep things the way they are.

Loan Repayment vs. Investing

This is a tricky question and it all depends on two details:

  1. What is the interest rate you are paying on your student loans?
  2. How much risk do you need to take in order to make more interest than your student loans?

According to Investopedia, “Approximately 10% is the average return for the S&P 500 since its inception back in 1928.  Adjusted for inflation the “real return” is more like 7%.  Also, worth noting that nearly half of the gains from the S&P 500 resulted from dividends. “

What this means is, if you are to invest your money, you need to invest in a way where the amount of “return” that you earn is more than what you are paying for your student debt.

Before you begin investing your extra money, it is very important to set a goal to have 3-6 months of your yearly income in liquid cash. I had an event last year on my home that was an unexpected expense. By having extra money for me to use, I was able to pay it without having to worry what account to take from.

When your interest rate is higher than 7%, historically, you can expect to obtain similar returns if you were to invest in an index such as the S&P 500.

 

Congratulations! You are now on track to becoming financially independent!

If you enjoyed this article, please share with your friends, and I will continue to post more help on various subjects that are important.

If you have any questions or suggestions for more articles, please contact me directly.

Warm Regards,

Joshua D. Krafchick CRPC®

Financial Advisor

4776 Hodges Blvd. Suite 203

Jacksonville, FL 32224

Jkrafchick@rfwwealthadvisors.com

Office:   (904) 517-5413 

Mobile: (407) 637-6276

Fax:        (904) 517- 5415

Examples are hypothetical and for illustrative purposes only. The rates of return do not represent any actual investment and cannot be guaranteed. Any investment involves potential loss of principal.”

Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC.  Cambridge and RFW Wealth Advisors are not affiliated.  Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor.

Indices mentioned are unmanaged and cannot be invested into directly. These are the opinions of Joshua Krafchick and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Past performance is no guarantee of future results.

How Will You Spend Your Riches?

There is an obstacle keeping many people from financial wealth.  personal development, wealth, success, law of attraction, think and grow rich, spending, capital allocation, visualization, money, riches, bank account, how to make money, capital allocation, investing

One of which is not believing they deserve it.

Another obstacle is not knowing what to do with wealth should they attain the amount they want. Let us remove that obstacle right now.

Many people just say, “I want $1 million” or “I want to be a multi-millionaire.”

If you’re reading this, you probably already visualized the numbers in a bank account.

Maybe you even wrote yourself a check for that amount already.

Let us take this a step further through visualization and writing.

Without focusing on “how” you got there, let’s focus on exactly where your riches are going to be allocated in the future. 

The wealthiest people in the world know where to and where not to put their money, aside from their own personal extra luxury expenses.

Investors know what companies to put their money in, oil magnates know the most effective ways to obtain and distribute oil, the frugal wealthy know exactly what they want out of life, and more.

To get started, imagine your net worth was suddenly increased to $100 million. Chances are you do not have all of that in liquid cash, as that would put your money at tremendous risk.

You want this money to last you your lifetime, as well as protect generations of your family, but you also want it to grow.

Remember, the incredibly successful have cultivated their ability to spend wisely over many years.

Begin visualizing the answers to these questions below:

  • How many houses do you own?
  • What businesses are you invested in?
  • How much do you keep in liquid cash?
  • Breakdown your $100 million into different percentages and categories, for example, “$30 million is in the stock market, you own $50 million in properties, you have four cars worth a total of $1 million, etc…”
  • Breakdown the costs of the objects in one of your houses (or all).
  • What industry have you mastered?
  • How much money to do you need to live, annually? (i.e. taxes, food expenses, etc…)
  • What does your closet look like, and how do those tie into your $100 million?personal development, wealth, success, law of attraction, think and grow rich, spending, capital allocation, visualization, money, riches, bank account, how to make money, capital allocation, investing

Do this exercise on your way to financial success and find that it will help you obtain whatever it is you are looking for.

Believe and understand that once you can see it, dream it, feel it, plan it,  then you can achieve it.

WISH YOU SUCCESS!