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How To Make The Forbes 400

How To Make The Forbes 400

On another fateful car ride to my son’s elementary school, we were listening to Bloomberg Radio, and they started discussing the Forbes list of The Richest Americans. My son asked me, “How did Bill Gates get so rich?”

I told him that Gates had started a company in his garage that grew and grew until it was so large that they decided to “take it public,” meaning that they allowed anyone to buy a “piece” of the company. When they did this, Gates still owned a large portion of the company, and everyone buying their small portions of the company caused his larger portion to increase in value. It increased so much, in fact, that he became the richest man in America (and remains at the top of the list with an estimated net worth of $80 billion).

“Oh, okay. Well who is the second richest person in America?”

“That’s Warren Buffet.”

“How did he get rich?”

Then we got to break down Buffett’s journey to wealth. I told my son how Buffett made his fortune by buying up large portions of companies like the one Bill Gates started.

“Who is the third richest person in America?” 

Finally, I just pulled up the Forbes list of the richest Americans on my iPhone, and I had my son read it to me.

I noticed while we looked over this list that many of the people in America who made this list had built their wealth by participating in the stock market. Most had either started companies, bought companies or were the children of people that had started a business that went public, like Wal-Mart or Campbell’s Soup.

When I told my son this, he asked, “Why don’t you put your company in the stock market?”

I smiled and said, “That’s called an IPO. You have to reach a certain size to be able to do that.”

Using Siri, I then pulled up the stock prices of some well-known Atlanta companies. I explained that these prices reflect the cost to buy one share of each business, Coke, Home Depot, Delta, etc.  I explained that they’re called public shares because anyone can buy them and own a piece of that business.

The point in buying into these companies, becoming an investor, is a way to participate in the company’s future growth. So if you can accumulate enough shares in the right companies or the market in general, and hold those shares for long enough, someday the value can be powerful enough to allow you to “retire early” or maybe even hit the Forbes 400 list.

“You know you don’t have to take a company public or own thousands of shares in a company to make money in the stock market, though,” I said. “You can start with a small amount of money, and that’s what my company Wela tries to people do every day.”

This conversation stuck with me for the rest of the day as I thought about how much of an impact the stock market has had in many people’s lives. I love the fact that the same system that made Bill Gates and Warren Buffett billions of dollars can also help anyone in the world grow their net worth.

With so many options now in the financial industry, it’s easier than ever for people to take advantage of this system. If you’re looking to get started, I would suggest looking at some of my past articles here, and even visiting my company’s website if you’re looking to get started investing.

God bless kids for asking important questions.


Read the original article here.  


Is Cheap Gas a Good Thing?

While the stock market has been making new highs over the last few weeks, there is one sector that continues to drop… dare I say plummet!

In June, a barrel of oil cost $107, today (less than six months later) we are at $66 per barrel. That’s a drop of 38 percent.
This has certainly had a positive impact for us at the pump. Nationally, gas is at $2.72 while Georgia has an average of $2.65… and falling. To put that in perspective, in June, Atlantans were playing closer to $3.70!

This is wonderful for you and me as we are able to enjoy this drop in price when we’re filling up our cars… but what about the rest of the US economy?

Energy stocks have hit a brick wall. While many energy sector stocks were up around +15 percent this summer, they’re now looking at a minus 10 percent return for the year.

There are several reasons why we have seen oil prices drop since the summer. First, there has been lighter demand growth around the globe for oil. China and Europe’s slower economies haven’t been as demanding of “black gold” as they face slower growth in 2014. Second, there is a persistently higher supply right now due to new drilling technology, tremendous amounts of new oil supply found right here in America, and the Middle East oil power houses having decided to keep their output supply as-is.

In a much anticipated announcement on Thanksgiving Day, OPEC (Organization of the Petroleum Exporting Countries) decided not to cut their production targets. They, of course, could have chosen to stabilize the price by producing and exporting fewer barrels of oil per day… but that’s not how it played out. Why would they do this?

There are oil producers/competitors all over the world that can’t survive with oil prices much lower than they are today. The US’s new oil producers represent some of that contingency and there are many other international producers likely to decide to shut down higher cost oil exploration, as well.

Ultimately, I think the countries in OPEC (especially Saudi Arabia) are flexing their muscles in an effort to reassert themselves back into the director’s chair. Unfortunately for the Saudis, though, I just don’t see this playing out in the long run. They are just too dependent on their one trick economy. On top of that, low gas prices are good news for consumers and businesses here in the US.

Let’s circle back to the original question; are low oil prices bad for our economy? Is it bad for oil dependent companies?

Of course it is, at least in the short term. However, the major US oil companies have plans in place for situations just like this and are likely set to ride out this drop in prices. In the meantime, economic growth for the third quarter was actually revised up from 3.5 to 3.9 percent. That’s almost 4 percent growth! It’s easy to see where this comes from, as well.

For every $1 per gallon drop in prices at the pump, you and I are going to save about $1,000 a year on gas. Just think about how big a dent that is for a family bringing in $50,000 a year?! That extra money is going to get spent somewhere, whether it’s Target, Amazon, Delta, or even a neighborhood shop.

This is exactly why we have seen stocks for airline companies, retailers, and hotels rally as oil prices have dropped. It’s not just these guys that win when the cost of oil and gas goes down, though. Transportation actually gets a huge lift. UPS and FedEx rallied on the oil price drop, as well. The chemical industry, groups producing plastics, rubber, asphalt, paint and more, also saw an increase in value. Even agriculture got a bump.

While OPEC drops the price of oil around the globe, leveraged oil companies (the ones with the most debt) are no doubt feeling the pain. US oil stocks also get hurt (i.e. the recent pain we’ve seen in the stock market). However, while OPEC plays the waiting game with their competition, the US consumer economy should be getting a huge boost!

The energy sector makes up less than 10 percent of the S&P 500, so a fraction of the overall market is getting hurt. Meanwhile, many of the other nine sectors in the S&P (and don’t forget you and me) are likely getting a little relief .

Bottom Line
Could this take out some of the most marginal, border-line energy companies across the globe? Yes. Could this dip hurt the junk bond market? To some extent, yes. However, the way I see it, for now the good outweighs the bad when it comes to low energy prices.

Read the original article here.


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