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Stocks And Index Funds / Re: How to Increase Financial knowledge
« Last post by Raghav on October 27, 2020, 03:54:36 AM »
Financial tools and apps can be a great way to learn the basics of some financial concepts and you should check out some of them in the area of your interest. Download The Economic Times News App to get Daily Market Updates & Live Business News
Financial Advice From The Community / Reader Profiles / The Real Way to Budget
« Last post by mike_imm on October 26, 2020, 12:21:08 PM »
Something I have always struggled with is budgeting. While after every paycheck I track how much money I spend on each expense (and think by doing so that I am budgeting and saving), I always feel myself short on cash and spending less at the end of each pay period. This habit I have created is because I am not budgeting, but I am expense tracking.

Expense tracking is the act of noting every expense one incurs over a period of time and evaluating it based on your total savings. While expense tracking is a great way to determine how much of your savings have been allocated to certain expenses, it gives no projection of how to allocate your budget for future expenses. Through expense tracking, one is unable to properly weigh how they want to allocate their cash and savings over a period of time.

Expense tracking leads to short term lifestyle inflation, or the tendency to increase spending when one's income increases. A personal example of lifestyle inflation is my relationship with food. Whenever I receive a paycheck (and my bank account seems bigger), my drive to cook seemingly decreases, and I begin to order take out significantly more than usual. A week and a half later, I will track my expenses, feel worse about my savings, and you will find me eating 89 cent canned chicken for 2 meals a day. While this tactic of expense tracking and momentary lifestyle inflation is one way of living life, most of us can agree that it is not our ideal lifestyle.

The key to living a consistent and well-balanced lifestyle is to budget. Successfully budgeting is to list out all of your future expenses at the beginning of each year, month, and even week. By budgeting, you can get a clearer picture of how much of your savings you are willing to allocate towards a variety of expenses (or investing). Instead of ordering take out 5 times in a row, and then eating cheaply and unhealthily for 2 weeks, budgeting allows me to spread out my take out days, and allows me to manage how I want to allocate spending on take-out and home cooked meals versus all other expenses. While budgeting may prevent you from experiencing the short-term euphoria of lifestyle inflation, in the long-term, budgeting will breed a more financially stable and ultimately happier lifestyle.

While budgeting is a necessity, it is not easy. Knowing just how much to spend in each expense category is extremely difficult and takes time to master. However, it is possible. Here are some tips I have to increase your spend predictability and to budget effectively.

1. Use a budgeting app: There are many budgeting apps which can help you list out your expenses and provide tips as to how to allocate your savings most efficiently.

2. Subscribe: Using monthly-subscription based services is a great way to predict your expenses. Whether it is a subscription meal box or a streaming app, subscriptions in any expense category give a clear picture of how much of your savings need to be allocated towards a particular expense. (To save money on subscriptions, I recommend you subscribe annually to all your subscriptions, or use a third party platform which will offer you an added discount for committing to prepaying a subscription annually).

3.Invest to Save: When budgeting, people often believe savings entails leaving a particular portion of their budget in a savings account (and earning 1-2% interest annually). By investing safely in index funds, mutual funds, or ETFs (which all require very little investing knowledge to use), anyone can easily earn 10%+ on their savings a year. Through investing, your budget will slowly begin to look bigger and bigger.

Comment below any other budgeting tips you may have. Good luck budgeting!
Stocks And Index Funds / What is the required rate of return - RRR?
« Last post by free forex on October 24, 2020, 02:47:19 PM »
What is the required rate of return - RRR?
The required rate of return is the minimum return that an investor would accept to own a company's shares, as compensation for a certain level of risk associated with holding the share. The legal support rate is also used in corporate finance to analyze the profitability of potential investment projects.
The required rate of return is also known as the obstacle rate, which like RRR, denotes the appropriate compensation needed for the current level of risk. More risky projects usually have higher obstacle or repeat request rates than less risky ones.
The formula and calculation of RRR
There are two methods of calculating the required rate of return. If an investor is considering buying equity shares in a dividend-paying company, the dividend-discount model is ideal. The dividend discount model is also known as the Gordon Growth Model.
Dividend Distribution Model - Discount to Equity Ratio for dividend stock is calculated by using the current share price, dividend payout per share, and projected earnings growth rate. The formula is as follows:
RRR = \ frac {\ text {expected dividend payment}} {\ text {participation rate}} + \ text {expected earnings growth rate} RRR =
Share price
Expected dividends
+ Projected profit growth rate
Calculate RRR using the profit discount model.
Take the expected dividend payment and divide it by the current share price.
Add the result to the expected profit growth rate.
How to calculate the required rate of return
Another way to calculate RRR is to use the Capital Asset Pricing Model (CAPM), which investors typically use for stocks that do not pay dividends.
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The CAPM model is used to calculate RRR the beta version of the original. Beta is the risk factor of holding. In other words, beta attempts to measure the risk of a stock or investment over time. Shares with a beta greater than 1 are considered riskier than the market as a whole (represented by the S&P 500), while stocks with a beta greater than 1 are considered less risky than the overall market.

The formula also uses the risk-free rate of return, which is usually the yield on short-term US Treasury notes. The final variable is the market rate of return, which is usually the annual return on the S&P 500. The RRR formula using the CAPM model is as follows:
Calculate RRR using CAPM
Add your current risk-free rate of return to your security beta.
Take the market rate of return and subtract the risk-free rate of return.
Add results to achieve the desired rate of return.
Subtract the risk-free rate of return from the market rate of return.
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Take this score and hit it in the beta version of Safety.
Add the result to the current risk-free rate of return to determine the desired rate of return.
What does RRR say to you?
The required rate of return is a fundamental concept in valuing equity and corporate finance. It is a difficult metric to define due to the different investment objectives and risk tolerance of individual and corporate investors. Risk and return preferences, inflation expectations and a firm's capital structure all play a role in determining the required rate for the company. Each of these factors and others can have significant impacts on the intrinsic value of security.
For investors using the CAPM equation, the required rate of return for a share with a higher beta as compared to the market should be a higher interest rate. A higher high percentage ratio compared to other low beta investments is necessary to compensate investors for the additional level of risk associated with investing in higher beta stocks.
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In other words, RRR is calculated in part by adding the risk premium to the risk-free expected rate of return to calculate additional volatility and ex post risk.
For capital projects, RRR is useful in determining whether to pursue one project versus another. Program requirements (RRR) are required to advance the project although some projects may not meet the requirements of the program requirements but serve the interests of the company in the long run.


An update since my last post.

I found an attorney who is currently suing the developer of the Duval Way project. He is suing him for something else. That by itself speaks volumes to the lack of due diligence shown by RS. Stated another way, they blindly invested our money with crooks.

The first lawyer sent me to another lawyer.  The second attorney told me that : 1) He was not really interested in contingency.
 2) That I needed to think long and hard about spending $5,000 to sue over a $10,000 loss. Further because I would so far down the food chain, behind mechanics liens etc, that I would get pennies. If that.

As such I am in a holding pattern.

 If anyone has any additional comments or thoughts please share.

Family Finances / Open Enrollment and Potential Double Coverage - Is it worth it?!
« Last post by Irish247 on October 22, 2020, 05:50:37 AM »
Everyone knows its closing in on Open Enrollment season, and decisions need to be made for next year's healthcare. I was going to post some of this to one of FS' recent healthcare posts, but figured since the Forum is here I may as well use it.

So, here's the deal...

For the last 6 years, I have elected to not use my company's health care and went with my wife's plan for the family. We found the doctors were better or said differently she wouldn't have to change hers. As luck had it, all of mine were in her network as well. We always max out the family contribution to the HSA and likely would continue to do so. Yes, there are pros and cons to the HDP, but I think given our health and track recorded, it makes sense.  The current plan has a $6k deductible for the family with the HDP. So we haven't hit the deductible recently, aside from when the kids were born I guess. We always kind of make the decision or not for care, but given the HSA and the allotment provided by her company as well, we have had no reservations getting care when needed.

Anyway,  I have recently accepted a new position, in which the company will pay for 100% of my medical, and dental. They also cover my family 100% for medical at zero contribution cost from me, and they have a small contribution fee for dental for the family. So, it's decision time.

Do, we jump ship and move the family to the new plan covered 100% by new company. Or do we keep my wife on her plan, and I take the kids to the new plan? Or do we do the double coverage and each of us keep the kids on our plan, but each hold our own?

As I'm writing this, I realize it's likely that I would put everyone accept for my wife on the plan since it's free, at least for healthcare. And now the decision is whether to keep her and the kids on her plan as well, or just to keep her on her plan.

Some information to help in the selection process:

Her plan is with AETNA - national and well known. Has the HSA, DCRA, FSA, etc. lots of options, and a solid listing of funds to choose from in the HSA.

New plan is with Health Plans Inc, doesn't have an HSA, but has an HRA, DCRA, FSA.  The company has a large contribution to the HRA as well.

I realize there is other information needed here, but I'm just trying to gauge what people have done in the past in this scenario?

I think I want to keep part on her plan for the HSA as it at least gives some tax sheltering option. I also know that the carrier is accepted nearly everywhere so no issue on the out of network services.

As a side note, the new position is in a new state, so we are moving as well - which eliminates the fear of losing our current care providers, because they are all changing.

Anyway, please help decide if you can.

Stocks And Index Funds / Re: The Graham Formula
« Last post by SteveGood on October 22, 2020, 12:06:37 AM »
Is it apply for all over the world or any particular targeting area?

Hello All,

I have been reading everyone's comments for the last 18 plus months and this board and shaking me head. How could this have happened? How could these people have been so wrong about these investments?  I have several theories, the most likely of which is that RS was run by a bunch of know nothings who thought that an MBA from Stanford meant that they actually knew how the world works. A classic example of confusing education with knowledge.  Add to that the real estate / hard money business is filled to the brim with shady people. What does that give you? The recipe for disaster which comes with mixing naive children and hardened skells. 

Be that as it may, here we are. And like the man said in the movie :  DON'T GET MAD. GET EVEN.

I have several "sinking boats" but the one that has prompted me to post is 26088 Duval Way, Los Altos Hills, CA 94022

It seems that a very shady outfit got money from RS ( Including some of mine) and has managed to turn a spec house in the hottest real estate market in the US into a losing proposition.

What I need from you fellow contributors to this blog is the following :

A good pit bull attorney in that part of the US who can chase these guys down. I am taking writs of replvin on their cars, wage garnishment, etc. etc. I dont care if I get $26.88 a month for the next 40 years. I want my money.

Please post name address / phone / email of a good attorney.  We need to strike now while the iron is hot. RS will ( like they did elsewhere) let themselves be fast talked by these thieves.

After all , its NOT their money.



I hear you and feel your pain. One of my remaining investments was a PE deal on a rehab/redevelopment of a SFR in the Seattle area. The sponsor has/had dozens of SFR and small MF projects in the area. Now I am being told the sponsor is on the verge of Ch. 11. Have you followed Seattle residential RE over the last 10 years? A company with this business model that's going bankrupt in this area is either run by crooks or idiots. RS did ZERO research on the sponsors it brought to the platform. IMO it's a miracle that they've seen as much success as they have.

BTW, RS was not alone. Crowdstreet just recently offered a deal by the same sponsor. I mean within the last few months. All it would have taken is 5 minutes on the internet to find the dirt on this company. I used to think CS was much more diligent than RS. I'm not sure if ANY of the crowdfunding platforms really does any serious vetting.

As for your pit bull lawyer. PLEASE find one. We need to go after Nav and the VC investors. I'm right there with you if you can find someone, but it will have to be on a contingency basis. IF anything is ever taken from these crooks we'll see pennies on the dollar. Just my $.02.

Stocks And Index Funds / The Graham Formula
« Last post by wzhang18 on October 15, 2020, 05:59:20 PM »
For beginner investors who are interested in stock valuation, I wrote a blog post on the Graham formula. Experienced investors, feedback/comments are welcome.
Managing And Investing In Physical Real Estate / Refinancing Investment Property
« Last post by PandaAtlanta on October 14, 2020, 07:56:03 AM »
Just wanted to ask to see if any of you recently refinanced one of your investment properties and what rate and closing costs you paid.
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