I hate investing

[Lauxa]

I think the number one thing holding me back right now from having more money is that I hate investing.

First let me point out that it's not that I don't have money. Right out of college I set specific monetary goals for myself that make me a millionaire by age 45 or so (I am 30 now... almost... ) and I am on track with that plan. But the plan requires me to double my net worth every 5 years, which either means investing at about 15% ROI or dramatically increasing my income or a combination of the two.

I was in mutual funds and index funds for a while but I didn't like it because of ethical considerations. The money is just spread out over a wide swath of companies and who is to say that they line up with my values? I don't want to invest in Coca-Cola, Walmart, Phizor, DOW Chemicals, etc. I don't know how to find companies to invest in that are providing genuine value to the world, companies that I can be proud to support. Even the "ethical" mutual funds seem a bit dodgy to me. Most of the businesses that inspire and excite me are private ventures without public stock listings.

I have some investment in gold and guns, but this feels like hoarding and not being in the flow of the universe. I am much better at hoarding, but I feel I need to change this if I want to attract more wealth. I looked into real estate investing for a while. It looks like there are 2 ways to profit: buy a house for below market value by taking advantage of someone who really needs to sell and/or own rental properties and be a hard-a** who evicts anyone who can't pay. This doesn't sound like much fun to me...

One thing I could "invest" in would be some employees, like childcare and house cleaning, to free up more of my time to work on growing my income. Somehow this doesn't feel like an investment as much as an expense, especially since I'm not bringing in much income from my business ventures right now. Anyone have opinions on this?

Any advice is welcome!

[ticktockclok]

This book is the stocks bible, imo. Get your hands on it immediately; you can't go wrong.

[Dani]

Start your own business, or a new one if you already have.

I had trouble finding something I could feel excited about doing for a while but then I changed what I was looking for, and now found something right in tune with my purpose, helping people become more successful, but which will also make me money as well.

[Lauxa]

Ooh, thanks for the book tip ticktock!

I did a little meditating on this last night and remembered something I read in a book (I think it was by Lynch) which was invest in what you know. He said some of his best investments have been in products and services that he or someone he knows is using. I have looked into a few products before, but got hung up because either they were not publicly traded companies or I did not know how to evaluate the financials. So now I am making a list of 100 products/services/retail outlets I use and then will hopefully narrow that down into the best investments.

The intention manifestation worked really well for me on this. I imagined the excitement of finding the perfect company to invest in, knowing that it was a really solid investment and that I could feel really good about supporting this company. After that, the ideas on how to get there started flooding in and now I am confident that any guidance I need on how to implement this will appear. Thanks!

[Dani]

When you get that list, post it here.

Maybe someone on the forums can put you in touch with an investment that is in line with what you want, once you work out what it is.

[Dating Specialist]

I'm not good in this area so can't give much advice.

Just like to suggest maybe you can consider engaging a financial planner? Or a fund manager and he will help to take care of your portfolio? Just give him your financial goals, what is your risk appetite and he will draw up a plan for you and keep track for you too. For a fee, you can save all the headache and still achieve your results.

[MyFinancialAwareness]

A few things to think about.

You can invest in a socially responsible index fund (just google it and there are some out there).

You can also invest in a REIT that owns real estate and are the hard-a** landlord (sometime to larger corporate offices instead of renters)

The key though is two fold:

1) Why do you hate investing?

2) Why do you want to become a millionaire by 45?

You may find your blocks to investing in your answers (or if you want to bounce them off me go ahead).

Pete
My Financial Awareness

[da1prophet]

Originally Posted by Lauxa

I think the number one thing holding me back right now from having more money is that I hate investing.

First let me point out that it's not that I don't have money. Right out of college I set specific monetary goals for myself that make me a millionaire by age 45 or so (I am 30 now... almost... ) and I am on track with that plan. But the plan requires me to double my net worth every 5 years, which either means investing at about 15% ROI or dramatically increasing my income or a combination of the two.

I was in mutual funds and index funds for a while but I didn't like it because of ethical considerations. The money is just spread out over a wide swath of companies and who is to say that they line up with my values? I don't want to invest in Coca-Cola, Walmart, Phizor, DOW Chemicals, etc. I don't know how to find companies to invest in that are providing genuine value to the world, companies that I can be proud to support. Even the "ethical" mutual funds seem a bit dodgy to me. Most of the businesses that inspire and excite me are private ventures without public stock listings.

I have some investment in gold and guns, but this feels like hoarding and not being in the flow of the universe. I am much better at hoarding, but I feel I need to change this if I want to attract more wealth. I looked into real estate investing for a while. It looks like there are 2 ways to profit: buy a house for below market value by taking advantage of someone who really needs to sell and/or own rental properties and be a hard-a** who evicts anyone who can't pay. This doesn't sound like much fun to me...

One thing I could "invest" in would be some employees, like childcare and house cleaning, to free up more of my time to work on growing my income. Somehow this doesn't feel like an investment as much as an expense, especially since I'm not bringing in much income from my business ventures right now. Anyone have opinions on this?

Any advice is welcome!

Like one of the other posters suggested, creating your own business is definitely a good way to "invest". You can run your business according to your own philosophical and ideological views, while creating value for yourself, jobs for others, etc.

I'm on the other extreme, since I'm passionate about and fascinated by financial markets. On one hand, I agree with your concern about investing in companies that you find to be incompatible with your beliefs. The good news is that there are thousands of companies all around the world to choose from, and its doubtful that *all* of them you'd find objectionable.

As far as investing in stocks or similar equities, there's a ton of mutual funds that are geared to people just like you. Whether you want to invest according to environmental, religious, or other principles there's probably a mutual fund with a similar focus. Here's a website to start with, but if you Google "socially responsible investing" or a similar term you'll find a ton of resources:

The Social Investment Forum: Promoting socially responsible investing, community investing and shareholder advocacy

Of course you can approach the financial market the way I do--that it's a way for me to make money. I approach it almost like a game, trying to find investments that offer the potential for profits without regard to the underlying companies. Now, granted, what companies do and how they do it are part of the consideration but I don't personalize my investment to the degree that you do. I'm not a big fan of Wal-Mart, but were I to buy their stock I wouldn't feel like I'm "investing" in their company--I would do it if I thought it was a good opportunity for me to make money.

And with the money I make I'm free to use it to further my own beliefs and philanthropic goals. I'm a big dog lover and I give a lot of time and money to charities that find adoptive homes for abandoned and neglected dogs. The good that I'm able to do directly in this area that is very important to me more than outweighs any sort of misgivings I may have about how Wal-Mart conducts their business.

Again, that's just me but I'm a big believer in the power of economic marketplaces. Using Wal-Mart as an example again, I may not like certain things about them as a company but its clear that many people shop there. In other words, the marketplace has decided that whatever value Wal-Mart can provide outweighs whatever liabilities they have as a company. Now, if Wal-Mart was doing something that I considered extremely important to advocate against I would--for example, if they were killing puppies I'd be all over them. Since they're not, however, I view the money I can make my investing in them (or other companies) to be resources that I can use to advance the "greater good" specific to things that are very important to me.

As a disclaimer, I'm just using Wal Mart as an example here and don't really have an opinion one way or the other about the investment potential of WMT stock.

[Lauxa]

Originally Posted by MyFinancialAwareness

The key though is two fold:

1) Why do you hate investing?

2) Why do you want to become a millionaire by 45?

My Financial Awareness

1) My dad invested in mutual funds and followed a market timing plan reccommended by Doug Fabian which he did quite well with. However, it required watching the 30-week moving average of the funds and selling when the price dropped below that number, so you had to monitor everything closely. He reccommended to me that I have Fabian manage my money for a percentage to save me the hassle, which I did, but then the guy started using a different system because he was having trouble making any money after the .com bust since the market was so flat, and he lost some money for me. My reaction being to bury my head in the sand and not look at the numbers. I finally got my money out from his management, but have trouble trusting any other investment firm with my money. I read books by Peter Lynch and Warren Buffet and all said that it's best to invest your own money, but you have to do it right. And I'm afraid I won't do it right, that I don't have the dicipline to monitor the markets, and that I'll lose money. Also, once I started looking at ethical considerations, I realized that I didn't really want to invest in most of the companies in mutual funds/index funds anyways, even the so-called socially responsible ones. And then I felt overwhelmed by trying to pick my own stocks, and started feeling like maybe there aren't even any companies out there worth investing in.

2) The milliionaire thing goes back to my dad also. He taught me about "the miracle of compound interest" and I'd sit around and work up spreadsheets that charted my net worth going up and up and it just always made me feel good to think that I could do that. And money was important to him and I think he is proud of me that I am good with money and with saving for the future. I do have some conflicting beliefs though, because having 8 or 9 investment accounts is a pain at tax time and in some ways the money is a complication. Also, I feel guilty about not giving enough, but also a huge pull to hoard. I don't think right now I would be a "vibrational match" for a million dollars, and it could very well take me until 45 to get there, although I've started being open to the possibility that it could also be sooner.

[Lauxa]

Originally Posted by Dani

When you get that list, post it here.

Maybe someone on the forums can put you in touch with an investment that is in line with what you want, once you work out what it is.

01. Vital Choice salmon
02. Laura Scudder peanut butter
03. Buddy's chicken
04. Newman's own
05. Graco stroller
06. Adobe
07. Mini shower
08. Snappi
09. Apple
10. Disney
11. Dream Works
12. Nickelodeon
13. Hayhouse
14. Wayne Dyer's books
15. Prismacolors
16. HP
17. Applegate farms
18. Robeez
19. UPS
20. DHL
21. Southwestern Airlines
22. Pella
23. Epiphone
24. Yamaha
25. n:vision
26. LifeTime Fitness
27. Berkey
28. Cannon
29. Nikon
30. Nokia
31. Motorola
32. Red Hat
33. Suse
34. Home Depot
35. Breed & Co.
36. Amazon
37. Callahans
38. Kerby Lane
39. Chuy's
40. 7th Generation
41. Bose
42. igloo
43. Scotch (tape)
44. Hanes
45. Lodge (cast iron)
46. Hall (cough drops)
47. King Arthur (flour)
48. John McCann's Irish Oatmeal
49. HEB
50. Whole Foods
51. The Contatiner Store
52. allegro coffee
53. Horizon organic
54. Cuisinart
55. Enterprise
56. Muir Glen Organic (tomatoes)
57. Bubbies
58. Black & Decker
59. Capitol Metro
60. Really Raw Honey
61. Back to Basics
62. Ball (mason jars)
63. Bernina
64. Nomadic Notions
65. Savers
66. Goodwill
67. Bounty (paper towels)
68. Avent
69. Medena
70. Bausch & Lomb Boston Cleaner
71. Play Dough
72. all (laundry detergent)
73. ERA
74. Jason (shampoo)
75. Paul Mitchell
76. Toyota
77. White Mountain Yogurt
78. Allstate
79. Panasonic
80. Time Warner Cable (AOL)
81. Wilderness Family Naturals
82. Signing Time
83. Legos
84. Whirlpool
85. KitchenAid
86. Gillette
87. pHisoderm
88. whoever makes the GPS for Denali, Honda
89. Singer
90. OralB
91. citgo
92. VitaMix
93. Lowe's
94. Kinko's
95. Fry's
96. Half Price Books
97. The Economist
98. Stickies
99. NewTrends Publishing
100. Shady Maple Farms
101. Warner Brothers
102. Maya

This is my first cut of a list, basically I just wrote down every company that I shop at retail or that I have their products in my house. I believe that I am investing at these companies when I buy their products, so if I start researching and then find a big moral issue for myself then I should look for alternatives to buying their products as well, so it's kind of 2 birds with 1 stone. The next step will be to find out how many of these are even publicly traded companies, and what their stock symbols are. Then I'll sort that list by which companies products and vision excite me the most, and then start going down that list looking at financials. I'll keep y'all posted.

[mtrimpe]

I say don't invest! Seriously, don't invest on principle. Also don't borrow on principle. Never accept or pay interest! It's the best thing you can do for the world!

The concept of compound interest is just a really clever good-looking way of mathematically disguising that you're having other people work to fulfill your needs without giving them what they deserve. By accepting interest you're saying that it's a good thing that some guy in china beats children to make your clothes cheaper.

I think that's why most people somehow feel uneasy about investing, after they've overcome the fear of losing their money. I'd say take the trouble to understand the concepts in this book and be free from the demons of investment for good! It will make you a better man.

[Nala]

Dear Lauxa,

I am not going to give a lecture on the topic, simply because there is so much to be said.

However, I will say this:

(1) Educate yourself (try Charlie Munger's classic, Poor Charlie's Almanack)
(2) Once you have wisdom and confidence, invest your own money -- I do it and my own investments perform much better than my ridiculous mutual funds. I actually started *before* I had true financial confidence, but I did know I could probably do it better than the pros -- which I have done consistently.
(3) Save all that you can and invest it. Whatever anyone else says, compound interest is simply amazing. Get wise about money, save, and invest -- and literally watch your money multiply. It will take a few years before you start to see the real growth, but it will happen.

[da1prophet]

I'm not big on mutual funds either, but like I said I have a sick fascination with financial markets anyway so its no big deal to do my own investing.

Just looking down your list I see a number of companies that you could have done very well with. Whole Foods, for example, was a darling of the investment community for a year or so before taking a hit in mid 2006. It was as high as 72 and is now in the mid 40's. My guess (and again, if you're thinking of buying do your own homework) is that it might be a little undervalued at this point.

Of course this brings up another point--there's a big distinction between trading stocks and investing in them. That's a discussion onto itself however...

Long story short, though, there's plenty of investment opportunity in just the companies you feel comfortable about dealing with. Even if you're planning to buy and hang onto a company's stock for the long haul there's still some work involved--either you have to do it yourself, or get a professional to do it which puts you back in the boat of having someone else responsible for your finances.

There is such a thing as too much loyalty--for example, my dad has been a "Ford man" for years. He's owned Ford stock for over a decade and basically watched the share price drop by almost 50% in the past five years. Every few months during that timeframe I've tried to convince him to sell. He's a smart guy, understands the changing nature of the auto manufacturing industry but he's loyal to Ford to a fault in this case. He'll very likely ride the Ford stock down for the rest of his life...

Unless you do it for a living, its impossible to follow all of the companies on the US exchanges alone. What I've always tried to do is focus on companies in industries that I know alot about--in my case its the restaurant industry, the computer/tech industry and the gaming/casino industry. I've done my best investing in stocks of several companies that build those big hotels in Steve's home town. I know about these industries and enjoy following them so its a lot less overwhelming and certainly less like "work".

Anyway, I'm rambling but the trick is to start somewhere. Though some would argue with me I'm of the opinion that effective investing in the equities markets is one of the better financial opportunities available. In your case you have to "pick your poison"--find a professional you trust to do the work for you or do it yourself. I'm in agreement that your best option is to do it yourself, and that's the route I'd suggest...

[Dani]

Originally Posted by mtrimpe

I say don't invest! Seriously, don't invest on principle. Also don't borrow on principle. Never accept or pay interest! It's the best thing you can do for the world!

The concept of compound interest is just a really clever good-looking way of mathematically disguising that you're having other people work to fulfill your needs without giving them what they deserve. By accepting interest you're saying that it's a good thing that some guy in china beats children to make your clothes cheaper.

I think that's why most people somehow feel uneasy about investing, after they've overcome the fear of losing their money. I'd say take the trouble to understand the concepts in this book and be free from the demons of investment for good! It will make you a better man.

I can see the blatant link between interest and beating children in China.

When someone lends me money to start a business that I could never have started without borrowing that money, and I pay them interest because they deprived themselves of that money to give me my chance. The first thing I feel like doing is taking a dirty big stick to some little sweatshop kids for more cheap t-shirts!

Obviously... can't you see it too?

[MyFinancialAwareness]

Lauxa,

There are a few things that came to mind in your last reply to my message.

My question is how is your self-worth defined by your net worth. I bring this up because you mentioned:

1) You burried your head in the sand when your investments did not do well

2) Your dad put the idea of millionaire into your mind (so you may equate doing well with pleasing him - everyone wants to please their parents). You even said " I think he is proud of me that I am good with money "

3) You make investing sound like a stuggle (hard work) - it can be, but does not need to be (similar to someone trying to work hard to be successful)

The key is that if our self-worth is based on our net worth, we will never feel good enough. Some may, yet it is only a temporary feeling because it will never be enough. Self-worth and pride from our father should be based on who we are, not wat we have.

[mtrimpe]

Originally Posted by Dani

I can see the blatant link between interest and beating children in China.

Obviously... can't you see it too?

I doesn't matter that you don't get it yet. It's as difficult to grasp for this generation as the concept that the tides are caused by the moon was a few generations ago...
You will get it one day, I'm just trying to get people to get it sooner so we can stop living in the illusion that we can all live off of the efforts of everyone else.
Just know that from now on you can't say nobody warned you ... from now on it's your choice to remain ignorant of the damage you're causing.

And no, I'm not going to explain the physics that cause the tides to you, you're going to have to do that yourself

[Greg]

Well, what about this:

Everything is an investment.

How you use your time,
What you read,
How you choose to develop yourself,
The people you communicate with,
The friends you make
etc.

Would it be fair to say, you already invest in things you might not know??

[RT Wolf]

I'm not entirely sure you understand Lynch and Buffett's strategy if you say you don't have the time to monitor your investments. Admittedly, you have to spend time looking over the new annual reports and keep an eye on the company's underlying fundamentals but it's really not that much time. You dont have to keep an eye on the stock price on a minute-to-minute basis. Especially compared to something like momentum trading or a full time job, it's not very much time at all.

Nala, didn't Poor Charlie's Almanack come out last year? It's already a classic, eh? I'm actually reading a copy at the local reference library. I can't take it out, so I go there every once in a while and read a bit more. I shold stop being so cheap and just buy a copy.

[Dani]

Originally Posted by mtrimpe

I doesn't matter that you don't get it yet. It's as difficult to grasp for this generation as the concept that the tides are caused by the moon was a few generations ago...
You will get it one day, I'm just trying to get people to get it sooner so we can stop living in the illusion that we can all live off of the efforts of everyone else.
Just know that from now on you can't say nobody warned you ... from now on it's your choice to remain ignorant of the damage you're causing.

And no, I'm not going to explain the physics that cause the tides to you, you're going to have to do that yourself

I do get it. I know exactly the process you are getting to actually. The success of the current super economies relies totally on them getting more value out of poorer countries than the return.

This does not however invalidate the concept of interest.

It does invalidate the long term prospects of the current economic model, and I agree it will have to collapse eventually or the top countries will have to force the bottom countries to remain undeveloped and exploited.

What you are essentially saying is that 'Hammers can be used to kill people, therefore hammers are a lie and evil illusion.' Which is factually true, but completely ignores the positive benefits of using hammers.

Interest, when used properly, allows people who have no chance to get a chance by borrowing from others. Without interest there is no incentive to lend, and no incentive to help others or take a risk.

It's also the most fundamental flaw in communism, and unionism - any major invention or improvement requires you to do more than other people to make it a reality. If you will recieve no benefit for working harder than other people there is no incentive to ever do more than the minimum.

If Interest was abolished there would be no reason to ever lend anything to another person, because you deprive yourself for no benefit. Whcih would stop every economy in it's tracks because there would be no innovation whatsoever, and no new companies could ever start, or compete with the existing ones.

It makes a great read while on the toilet, and a nice dream for when human beings become perfect.

btw. Fingerwaving and saying 'don't say I didn't warn you' without actually providing any sort of realistic debate to support your claims, just makes you look like a raving madman at worst, or a conspiricy theorist with his little aluminimum hat at best.

Sorry for going off topic.

[Glass Joe]

Hi Lauxa,

You might want to try out Marketocracy.

It's a free investment simulation site where you can run your own fantasy mutual fund with $1,000,000 to start with.

I started around spring of last year - doing pretty much the same thing you want to do – investing only in companies that I personally know of and admire, and that provide products/services that I use every day.

I also wanted to get a baseline, just to see what would happen if I did absolutely zero market research and invested purely on blind intuition. So I bought 12 stocks and just held onto them, never tweaking any of my positions afterwards. And every week I got a status report emailed to me.

Although there were a lot of times over the past year where this "intuition fund" did horrible compared to the overall market, right now I'm up about 13%, with my fund's overall value being $1,134,540.86 as I write this. So I guess this fund did ok, but not anything outstanding.

Also, if you want, you can set up more than one fantasy investment fund. For example, you can set up a unique fund for...

- trying out value investing
- trying out day trading
- trying out selling-short on all the companies you dislike
- seeing what happens when you pick your stocks by throwing darts at a newspaper pinned to the wall.
- seeing what happens when you pick your stocks using only your gut-level intuition.

Personally, I only got as far as setting up that one “intuition fund” and stopped studying investing for the rest of last year. And I totally forgot that I wanted to set up that dartboard fund until I started writing this post. (Oh well...)

Anyways, last year I didn’t follow the market consistently enough yet or read enough investing books yet to actually want to get started on those other fantasy funds, where I’d test out buying and selling stocks weekly, based on the news headlines that week or by analyzing charts or by analyzing company fundamentals. My one intuition fund, using fake money, was stressful enough!

So yeah, whether you buy stocks and hold, or want to try out other investing strategies, it’s still probably a good idea to test things out first, just to get the experience. The only thing (I think) marketocracy can’t do yet is buy/sell options. But there are other sites out there that will let you simulate that too.

Hope this helps.

[escapee]

It's actually good to "hate" investing at the moment because i believe right now is the suitable time for institutional funds and big players to dispose off their shares to the unaware and unsophisticated public. Share investment is a dog eat dog world. Always go for great fundamental stocks that pay good dividends + potential of appreciation in value but i know it's kinda hard to spot such a gem.

remember 1987 , 1997 and 200? ( or may after olympic in Beijing )

[Lauxa]

Hi everyone and thanks for all the replies to my thread!

mtrimpe: I think it is a bigger sin to hoard the money away. I have been thinking alot about the Parable of the Talents in the New Testament.

Dani: I recently took a class on the Qur'an which prohibits interest and the professor pointed out that there are other models than fixed interest, such as profit sharing. And it turns out that the stock market is more on this model, since you get returns if the company does well.

RT Wolf: To clarify, it was the market timing model of investing that I didn't feel I had time to monitor. The Lynch/Buffet model I think I will be able to monitor if I can get past the initial stock selection process.

MFA: I guess my sense of self-worth is tied up somewhat in my financial success. Also, I feel intimidated by people that are wealthier than I am. But I used to be quite depressed regardless and since finding Steve's site this is starting to lift, so hopefully my new more positive outlook can withstand financial fluctuations as well.

Also, to clarify, I have about 60% of my net worth in tax-deferred accounts such as IRA's, 401k's, etc. So really my options are (1) figure out how to invest this money (2) let someone else invest for me or (3) watch the money shrink to nothing as inflation eats my savings. Right now my husband invests the money and I run a report every year or so to check our net worth, but I am not really happy with this situation.

I'm about 60% through my list, I'll post some results when I get them.

[escapee]

Boommm !..I hope members here arent learning a whole lot about stock investment a few weeks ago.

[iry]

Probably you can check out the books written by David Bach (www.finishrich.com) . I’ve read his “Start Late, Finish Rich” and “Automatic Millionaire” and I think there are quite a number of good points on how to invest in real estate and mutual fund without much fuss and grow money consistently.