Just finished another good, practical book about finances and money management. This one targets investing. And not investing like day-trading and obsessing over the stock market, but investing for the average joe, but still getting a great return on investment.
The book is centered around the investing rules of Warren Buffet:
Rule 1: Don't lose money
Rule 2: Don't forget rule 1
Basically the book teaches you how to use the free tools on the internet (MSN Money, Yahoo Finance, etc) to find good, stable businesses at a great price (at least 50% off the actual value), and then invest your money in them by moving in and out (in when the stocks are going up, out when they are going down - and it shows how to predict this), so that you are virtually guaranteed not to lose any money.
The book is not about making a quick buck, or making millions and millions off the stock market (although the author had only $1000 to his name when he started and is now a multi-millionaire). You don't get in when the stock is at rock bottom, and you don't get out at the ultimate peak, because you can't really know where the bottom is until it starts going back up, and you can't really know where the top is until it starts going back down. But you learn to watch for the signs that is a safe time to invest your money.
So far the hardest part is just finding businesses that fit all the qualifications he says to look for - stable history, rising values, etc. I went through probably 150 different companies and came up with a watch list of about 20 that actually met all the criteria. And then only 5 of those were priced right. And then none of those had all the buying signs. So I don't have anything to invest in quite yet, but I have a great list of companies to watch for. And every few days I'll just go online, check where everything is at, and once I find the right price and the right buying signs, I'll put some money in. And then a little more. And a little more.
I'm actually pretty excited!
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