Be Wealthy & Smart

Learn about stock market seasonality and cycles in this interview with Garrett Jones from Peter Eliades Stock Market Cycles Management, Inc. Get 11 quick tips to boost your wealth at www.lindapjones.com.

According to Nat'l Association of Realtors, who is buying homes in 2016? Let's take a look at who is buying homes, by marital status: Married 66% Single females 17% Unmarried couples 8% Single males 7% Interesting because from 2005 - 2010, 20% were single females, but only 15% in 2015. Homebuyers' median income: Married couples $99,200 Unmarried couples $84,800 Single males $69,600 Other $69,100 Single females $55,300 So although single females have lower incomes than others, they are a big group of buyers. Why? 1. Possess own home 38% 2. Change in family situation 11% 3. To be closer to family/friends 9% 4. Desire for smaller home 7% 5. Retirement 5% To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

These are financial moves, not a pro or con commentary for a candidate. Check your taxes - income deferred if possible If Trump gets the 15% corporate tax rate in, then look for the dollar to soar and almost $3 trillion to come home. 2. Health care - look for new plans. Participate in health savings accounts - a savings account used in conjunction with a high-deductible health insurance policy that allows users to save money tax-free against medical expenses. 3. Faster growing economy. Possible raising of the economic growth to 3 - 4% annually. During the Reagan years the stock market boomed and the economy boomed. I hope that can happen again! 4. FED has signaled higher inflation will be allowed. Expect higher interest rates. 5. Cycles don't change based on who is President. Cycle going into higher inflation favoring commodities - metals, mining, grains, agriculture, farmland, etc. One sobering fact - inheriting $20 Trillion in debt is a lot. I don't believe taxes can pay that back. At some point we will have to deal with the debt and reboot the system. That's another good reason to be out of financial instruments like bonds and be in tangible assets like I just mentioned. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn how to look at investment opportunities in stocks like Amazon. (CANSLIM Method) Listener question Friday! One of the members of the Be Wealthy & Smart VIP Experience asked this question: Linda, Do you have an opinion on Amazon stock? We live in the Seattle area and have watched Amazon change the entire landscape of Seattle. Because the fundamentals always say Amazon is too expensive, we never bought any stock, but you said not to worry about the PE ratio too much on growth stocks. What's your thought on this hometown company? Mandy What are some of the things to consider when looking at an individual stock to buy? Consistency of earnings CANSLIM: C - Current quarterly earnings per share. Have they increased quarter over quarter in a year? A - Annual earnings increases over the last 5 years? N - New products, management and other new events. In addition, the company's stock reaching new highs? S - Small supply and large demand for stock? Acquiring their own stock? L - Leader or laggard in an industry? Use relative strength as a guide. I - Pick stocks who have institutional sponsorship by a few institutions with recent above average performance. M - Determining market direction by reviewing market averages daily. How does this apply to Amazon? According to CNN Money: "Amazon posted a profit of $252 million for the third quarter, or $0.52 a share, falling short of consensus estimates for earnings of $0.78 per share. Its guidance for earnings in the upcoming quarter also came in below estimates." What new innovations do they have? The company is also adding 26 fulfillment centers this year, compared to 14 last year. Amazon Echo could be BIG. "Bezos is fond of talking about the "three pillars" of the company's business. Those include its e-commerce marketplace, the Prime subscription option and Amazon Web Services." "During an appearance at the Economic Club of New York on Thursday, Bezos said either the Echo or its TV division "could become a fourth pillar on its own." - CNN Money Consistency of earnings? It may also be a reminder that investors always want more. For years, Amazon was rarely profitable for long. Now it has been profitable for six straight quarters -- but apparently not profitable enough. Jeff Bezos, Amazon's founder and CEO, has traditionally focused on reinvesting all (or almost all) profits back into big bets like fulfillment centers, hardware, video streaming and cloud computing. Profitability? Amazon posted a profit of $252 million for the third quarter, or $0.52 a share, falling short of consensus estimates for earnings of $0.78 per share. Its guidance for earnings in the upcoming quarter also came in below estimates. Do you want to have a short or long-term investment? Could be moving to $1000 according to analysts. What is the market capitalization? Mkt cap $367.35B Could this be the first trillion dollar company? Yes. That's a triple from here. P/E ratio 194.22 - that means you are paying $194.22 for each $1 of earnings. Does that make sense? Growth has already averaged 37.94% for the last 10 years. Can that rate of growth continue? It would have to be historic. Is that possible? Maybe. Could take over retailing for most retailers. There's more competition coming I'm sure. They have other areas of business they are moving in. Those are also huge growth areas. They are building warehouses and buying airplanes and the hard costs of that don't thrill me. Is it your best investment? No. The time to buy the stock was 17 years ago like I did! Would you rather have something that could triple or something that could rise 20 or 30 times? Personally I don't own the stock anymore. I do think it will reach $1,000. If I were going to pay that per share, I'd rather own priceline.com because it's leveraging cyberspace and is not becoming physical. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn whether it makes sense to buy or rent a high-end home. Interview with Jason Hartman of the Creating Wealth podcast. http://bit.ly/wealthpod To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn what to look for with dividend stocks. I saw an article about 3 stocks that are a "must own" for retirement. Whaaat? One was a huge telecom, one was a gas company and one was an insurance company. No where did it talk about earnings growth or dividend growth. I've talked about stocks. What makes them go up. It's all about earnings. Dividend stocks are no different, except they also have a nice dividend. You still want to have companies that are high quality, steady growth, increasing dividends, etc. IBD does a good job of curating dividend leaders. I've taken their list and picked 10 that seem to me to be a good mix and diversified. 1. International Paper 4.11% 2. Altria Group Inc. 3.7% 3. Toronto Dominion Bank 3.67% 4. IBM 3.67% 5. Cisco 3.4% 6. Paychex 3.34% 7. Prudential Financial 3.31% 8.Merck 3.13% 9.Qualcomm 3.1% 10. Proctor & Gamble 3.07% Again, all the credit goes to IBD, but I wanted to share a list of dividend paying stocks that are quality and fit all the aspects we talk about. You can find this in your IBD and I'll post on my website under podcast #201. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn ways technology is impacting value investing and ways it's not. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod Excited to have podcast #200! Thank you for listening to Be Wealthy & Smart! If you're a regular listener, I'd love to have a review from you and hear your thoughts about the show! Listener question Friday! Here's a question from Torben. Hi Linda, I've listened to your podcast for several months now and find it very useful. Your pragmatic approach to finance is very applicable in real life. I personally apply the value investing approach with inspiration from the growth investment theories. Perhaps you could do a podcast about value investing? From Graham and Buffet, over the ModernGraham approach, to how value investing will play a role in an investing world, where tangible assets are much smaller than intagibles, and most products and services can be replaced by technological developments in an instant? These developments challenge the fundamental value approach, which looks for large, stable, and cash generating businesses - so how are these theories going to survive in a world where these types of companies become more scarce? I hope this could be inspiration for a podcast topic. Best regards, Torben In value investing, you're looking to buy businesses below their value. Of course a business is worth it's assets minus liabilities + a multiple of cash flow. What is the multiple? It depends on the type of business, how regular the income stream is, etc. A steady rental income vs. a biotech. Being overly concerned with a PE ratio can be a value trap. Today, many financials have low PE's, but I wouldn't want to own them. I've found many of the best quality stocks have high PE ratios and I've always been ok with that as long as it's not excessive. There are times that the whole stock market can get excessive PE ratios, that's a time to be cautious. In 1999, PE's hit 50 and higher, but it was in 2009 that PE's hit 120! Today, they are at about 23-24 which is on the higher side historically, but no where near where they have been. A PE will average around 18, so anything above that is more expensive and below is considered a value or cheap. I've found placing too much emphasis on PE is NOT the way to buy stocks. For me, earnings are everything and IBD is good at putting stocks through a CANSLIM filter that picks the best for you. Some in the IBD 50 even have PE ratios of 14, 16, & 22 if that's important to you. They are not "value" stocks, they are "growth" stocks, but that's a matter of philosophy, personal choice and comfort level. I've not found a lot of investors who can copy Warren Buffett's success, but I have seen a lot of investors who are very successful investors without following his or Ben Graham's formulas. So what about valuing businesses? If a business doesn't have tangible assets, but is intellectual property, like an app, you're going to base the valuation more on the cash flow. If you're buying a gold mine and there's gold in the ground, obviously you have to value the gold separately from the cash flow. It doesn't change value investing. You still want to buy at a discount. You still can have a "margin of safety" if the valuation is higher than the stock price. If Google is worth X because of it's advertising revenue, but it's selling at a lower price because the stock market drops, you'll still want to buy it on sale! The fact that there are more businesses being started with intangibles is probably a long-term trend. But there are still a lot of brick and mortar businesses that are getting funded. Clothing, food, beverages, restaurants, etc. When making a long-term investing decision, you will want to think about such things. I think that's why Buffett was reluctant to invest in tech in the past, because it was hard to know who was going to be a winner long-term. I remember Nokia phones and Blackberrys and how they were the rage before iPhones replaced them. If Apple doesn't keep innovating, another phone may come along and replace it! Think about the things that we will still need to be using in 10 - 20 years. Keep away from a "trend" that could be a "flash in the pan" like maybe "Pokemon go"? Want to move ahead and get your money, wealth & net worth moving in the right direction?

Learn why individual stocks are never in style and why they might be right for you. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod If you've listened to me for a while, you know my story - that I was in the financial world working for money management firms. It was sacrilege to invest in stocks on your own. I did it any way and I turned a 5 figure investment into $2 million in several years. When I first got into financial services, there were "stockbrokers" who picked stocks for you. They had companies they built positions in and would put all of their clients in them. If it changed they would sell them all out of them. I had a friend who was my mom's age who was the secretary of the stock analysts. When they recommended stocks, she bought them for herself. She retired a multi-millionaire even though she had a modest salary. The only way that is possible is by compounding at a high rate. After the stock phase came the mutual fund phase. Instead of stockbrokers, they became "Financial Advisors" who placed your money with money managers (like the companies I represented). The FA's became asset gatherers but didn't manage the money themselves, they outsourced it and collected fees. Today passive investing is the rage. ETF's came into being because many professional managers were not outperforming the indexes, so ETF's were created to mirror indexes. Investors no longer try to out do the mark This year the S & P is up 3.5% YTD. That's it. That's all the return you're getting in the S & P. Small caps are outperforming. With the dollar so strong, it's hard for multi-nationals to make money. Corporate profits have been declining for 3 quarters. Small companies might not have business outside the US so they aren't impacted. Therefore their earnings are doing better. Small caps also do the best at the end of a bull market, this one being one of the longest in history. Asset allocation becomes important. Where your money is invested matters most. It's time to look at individual stocks again because I think you can do better than 3.5% YTD! Not on your own, not by throwing darts, not by "buying what you know", but by following earnings. Corporate earnings are the biggest determinant of a stock's price. IBD does the work for you and screens stocks through their funnel. If you haven't heard podcast #195 about the 8th graders in St. Agnes' school who picked stocks and got 25% in 2 years, you need to listen. Peter Lynch wrote about them in his book. I have the portfolio on my website. When you look at what they owned in 1990, it was Disney, Nike - some great companies that you recognize today. Success leaves clues and good companies are growing at high rates for a lot of years before they become blue chips. Start learning about individual stocks. I'm going to be teaching about them because I think it's a lost art, but one that is to worthwhile. Did you hear about the stocks and the compounding rates in my last podcast? I mentioned: Netflix 42% Amazon 37% Apple 28% Nike 20% Google 15% Starbucks 14% Get a current IBD and William J. O'Neil's book off the Resources page on my website. Thank you. It's time to resurrect individual stock picking, but only with the right tools. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn 3 reasons why reduced spending and savings are not going to make you wealthy. You still need to invest! Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod I heard it from financial podcasters and bloggers - building wealth is about spending less and saving more. What? That is only true if you make multiple hundreds of thousands of dollars and can save $1 million in a few years. For most people, that's not realistic! If you're making $75,000, paying for a house, car a spouse and 2 kids, there is NO WAY you are going to save yourself to wealth! You can't possibly save enough to become wealthy. Do you want to be a smart spender - yes! Can you "frugal" your way to wealth? Not in most cases. But you can invest your way to wealth. Most "experts" won't tell you that. Wealth = Compounding. There are only 3 factors that are part of the wealth building formula. Time. How many years you have to invest. Amount. How much money you have to invest. Capital. Compounding rate. What rate you can compound at. Example: $100,000 15 years, 8% = $317,216 If increase to 30 years: $100,000, 30 years, 8% = $1,006,265 $100,000, 15 years, 18% = $1,197,374 $100,000, 30 years, 18% = $ 14,337,063 Where can you find that rate of return? You know I'm a fan of IBD, the IDB 50 has a 17.9% rate of return! On podcast #195, I talked about the St. Agnes school of 8th graders that made 25% over 2 years by using IBD. What about since 2006 - 2016? How about compounding rates? Netflix 42% Amazon 37% Apple 28% Nike 20% Google 15% Starbucks 14% Is it possible to find a company like these? IMHO yes. They leave tracks and they are leaders. Maybe even in IBD 50. Or you can start your own business. Businesses can grow at high compounding rates too. Sometimes in the thousands of percent. Check out some of the fastest growing companies in America and their compounding rates. That's why 77% of wealth is creating by owning a business, including being a professional (doctor, lawyer, etc.). To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod Twitter has been in the news as a company that is for sale. Apparently Google, Yahoo, salesforce.com, Disney and others have been taking a look at it. IMHO, it belongs with a media company because Twitter is the next form of media after radio and TV. As I mentioned in my previous podcast about the DDoS cyber attack, I found out about it because Twitter was down and I Googled it. This is the way we think now. I didn't turn on TV until it was my fourth choice for news after Twitter, Facebook and Google! It's the first 2 way media we've had, meaning you can get instant feedback from viewers. For example, BRAVO TV uses it to take polls on their show - who is the most/least popular? They also use it to gather questions to ask in interviews. But more recently mainstream media has been using it as a source of stories. Media used to be top-down, but now they are driven by the narrative that is occurring on the "trending hashtags" of Twitter. It's what people are talking about and thinking - in real time! The first time I used Twitter years ago, I thought it was crazy. Someone tweeted about what they ate for breakfast. I couldn't care less! Then I used it as a business tool, posting blogs and podcasts. People are using it as a media platform. Combined with Periscope, anyone can be their own TV station. It's live, then recorded and tweeted out to your followers. The reason I bring this all up is I think Twitter should be bought by a media company - either a TV station or a newspaper. It would fit perfectly with their objectives, they could raise revenues by getting more advertising and it would be the next phase of media in this age. If I were the investment banker on the deal, I'd pitch it hard to the Washington Post, which also is owned by Jeff Bezos, who owns Amazon and is the second richest man in the US. It would be perfect for both companies. Although there are rumors from time to time about who will or won't buy Twitter, the main problem is the $16 billion to $18 billion valuation. It's very richly valued and although I think it will be worth much more in the future, not everyone wants to shell out that cash. Personally, I think it would be a much better buy than the $26 billion Microsoft paid for LinkedIn, but we'll have to wait to see if I'm right about that. Whomever buys it seems to be waiting for the price to drop some more, but I do think when the price is right, a buyer will step up to the plate. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. The morning of October 21st I tried to connect to Twitter to see the latest news and my computer kept saying it couldn't find the server. I went to Facebook and nothing was trending over there. I Googled it and found out about the attack. I turned on the TV and there was nothing, as if it was blacked out - maybe to keep everyone calm? It scared the heck out of me because I knew if it attacked a few sites, the whole internet could possibly go down. I checked my bank, it was still working online. I could only imagine how upset some Paypal customers were, my friend being one of them. She went apoplectic. The cyberattack of October 21, 2016 was notable for many reasons. 1. "It attacked the DDoS or A Distributed Denial of Service (DDoS) attack is an attempt to make an online service unavailable by overwhelming it with traffic from multiple sources. They target a wide variety of important resources, from banks to news websites, and present a major challenge to making sure people can publish and access important information." -DigitalAttackMap.com They go on to say: "Attackers build networks of infected computers, known as 'botnets', by spreading malicious software through emails, websites and social media. Once infected, these machines can be controlled remotely, without their owners' knowledge, and used like an army to launch an attack against any target. Some botnets are millions of machines strong." "Botnets can generate huge floods of traffic to overwhelm a target. These floods can be generated in multiple ways, such as sending more connection requests than a server can handle, or having computers send the victim huge amounts of random data to use up the target's bandwidth. Some attacks are so big they can max out a country's international cable capacity." 2. It effected many large websites such as Twitter, Paypal, Amazon, Reddit and Pinterest among others and cost businesses over $100 million in lost revenues. This is important because we take for granted our ability to read news, shop, communicate and bank online. While the waves of attacks kept these websites down, I realized how difficult it would be to communicate if we had a full-on attack or Electro-Magnetic Pulse that would take down the grid, which actually got me thinking of communication devices that would work if it all went down. The one that kept coming up was a ham radio. This is one of the only things that will work in case of emergency. Ham radios require a short education to use and the passing of a quick test, but otherwise seem easy to operate. 3. Research about what kind of hacking could occur next led me to find out that we have vulnerabilities in our apps on our phone. I'm going to read an article to you and leave you the link to it on my website at www.lindapjones.com at podcast #196. Just to give you a short summary before I read the article, it mentions that apps on our phone, even the blackjack app, may have malware that can cause a phone virus. Here's the article: http://www.nbcnews.com/tech/security/new-way-you-ll-get-hacked-through-banking-app-your-n651571 The conclusion is that we need to add an anti-virus app to our phones to protect them. That's why I added the free McAfee anti-virus app to my phone. It backs up contacts, photos, etc. and allows you to locate your phone if lost, all while protecting your information. It's CaptureCam emails you the photo and location of anyone who tries too many times to unlock your vault with the wrong PIN. I hope this protects you from getting hacked from your banking app on your phone. Get my "11 Quick Financial Tips to Boost Your Wealth" at www.lindapjones.com.

Learn why buying what you know, without doing more research, can get you into investing trouble. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod The book is "Beating the Street" by Peter Lynch, former portfolio manager of the Fidelity Magellan fund. To see the St. Agnes portfolio, go to www.lindapjones.com.

Learn what shorting is and the pros and cons of shorting. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod It's Listener Question Friday I've been watching the German bank, Deutsche Bank with some concern. DB is trying to get a reduced fine from the DOJ from $14B to $5B for mortgage security improprieties during the last financial crisis. If you haven't been following the news, DB may need a bailout but Chancellor Merkel has said she will not support one. That's because other banks in the EU may also need bailing out and if one was bailed out, they'd all have to be bailed out. Italy's banks are having big problems and so are other European banks. The real problem with DB is it is unique in that id also has massive derivatives there, so if it goes down, the effect could be quite serious on the whole EU and the Euro. Remember derivatives are securities that do not include the underlying stock and can be bets on their directional change among other things. DB has declined about 50% this year to roughly $12. A listener asked, if I was watching Deutsche Bank and concerned it might fail, why not short it? First, let me explain what happens when you "short" a stock. You are borrowing shares that you sell at a high price and hope to buy them back at a lower price to "cover the short." If a short goes against you, it's a potential unlimited loss! There's also something known as a "short squeeze" which is quite common. Because investors know the shorts have to buy the stock to cover the short, they can buy shares and move the price up (if they are large enough, like a hedge fund is), panicking the shorts to pay any price to cover their short and protect themselves from large losses. DB's stock price has been volatile. For example, in September it went from $15 to $11.50 to $13.99. Percentage wise those are 23% and 21% moves, so volatility is high. They are making changes that could cause more volatility up or down in their stock price: *They are laying off 1,000 workers. *The country of Qatar is rumored to be buying 25%. *They are also reportedly considering spinning off a subsidiary. *If there is any positive news, there goes the stock price up and away from the short trade. So for all those reasons, I am not shorting DB. That's not to say some big hedge fund won't make a killing, but for the small investor there are other trades to be had and personally I prefer to be investing in what will go up, than trying to pick the precise time a stock will drop, which is what you need to do to be successful as a short. If you're looking to become wealthier, get my free report: "11 Quick Tips to Boost Your Wealth" at www.lindapjones.com.

Learn what a hedge fund is and why they are often preferred by millionaires and billionaires. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod Hedge funds are an interesting topic and generally misunderstood by the general public. They are for sophisticated and high net worth investors, who are known as "accredited investors." They have more than a $1 million net worth excluding their home, or they make $300,000 and are experienced investors. Hedge funds invest in many types of securities, but they are unregulated by the Securities and Exchange Commission (SEC). You are familiar with mutual funds in your 401(k) which are pools of money that invest for a particular objective and in a particular type of security. For example, a large cap mutual fund may invest in the S & P 500, which are the 500 stocks with the largest capitalization (share price x number of shares outstanding). Hedge funds can invest long or short (listen to the next episode for an explanation of what "short" means). Hedge funds may also invest in options and futures, which are also known as "derivatives". Options are a bet on a stock's direction, but you don't own the underlying stock. For example, a "call" option on Amazon is a bet the price will go up, but you don't own shares of Amazon's stock. Many hedge funds use leverage and borrow money to increase their returns. That of course increases the risk of loss and must be used carefully. Unlike mutual funds which can be liquidated daily, a hedge fund has limitations to when you can access your funds and usually has the funds "locked up" for a period of 90 days at a time. At the end of the 90 days you can tender your shares and liquidate some or all of them. They also can charge fees differently than mutual funds. While mutual funds earn fees regardless of performance, hedge funds may charge a fee like 1% - 2% of the assets and also a percentage of the gains they make, like 25% of the profits. Many top mutual fund managers have left mutual fund companies to run hedge funds because if they are good investors, they can make a lot of money. Hedge fund managers have even made $1 billion in one year. There are different investment objectives of hedge funds, but the idea is to take less risk and provide higher returns. Because they can make money whether the market goes up or down (as opposed to mutual funds that only make money when market go up), they should be able to "hedge" risk and provide a higher return. There are some common objectives of hedge funds such as Activist, Convertible Arbitrage, Emerging Markets, Equity Long Short, Fixed Income, Fund of Funds, Options Strategy, Statistical Arbitrage, and Macro. Each of those invest differently. A hedge fund can pretty much invest in whatever they want wherever they want without their hands tied by regulators. It can get pretty complicated and that's why we had the hedge fund bailout after 1998 because a Nobel Prize winning investing model called Black Scholes worked on paper, but failed miserably in reality and had to be bailed out by major banks for $3.5 billion. If you want to read more details about it, I'll put a link on my website at lindapjones.com under this podcast #193. https://priceonomics.com/the-history-of-the-black-scholes-formula/ Hedge funds are performing poorly and are the worst performing asset class in 2016. So what is going on? They need volatility to be able to make money in a long or short strategy and the markets have been uncharacteristically un-volatile plus the stock market has only returned about 5% year to date. With so many underperforming, there are likely to be a lot of hedge funds closing their doors in the near future. So don't feel like you're missing out on anything. At this moment, you're not! If you're looking to become wealthier, get my free report: "11 Quick Tips to Boost Your Wealth" at www.lindapjones.com.

Learn what happens when you make a claim for a jewelry loss and what Kim Kardashian might experience. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod I had the unfortunate experience of having jewelry stolen from my home. Although I usually keep it locked away in a safe, I unpacked my bag and threw the silk pouch with a Tahitian pearl necklace, earrings and ring into my drawer with plans to put them in the safe later. When I went to look for it, it was missing. In between that time there were several people in my home including house cleaners, window washers, repair men, etc. that could have taken it. It was devastating because it was my favorite jewelry and very valuable. The pearls also had diamond on the ring and earrings. I called my insurance agent to report the loss. The ring and necklace were insured but the earrings weren't. I bought the ring and necklace from the same jeweler and received written appraisals for them which I used to insure them. The earrings I bought from someone else and didn't get an appraisal, so I didn't insure them. Needless to say, I was so sad for my loss. What I learned about making an insurance claim for jewelry is you have to make the claim within 30 days of discovering it. Once you make the claim an insurance adjuster calls and asks you details about what happened, dates, the details about the jewelry, etc. It goes to an underwriter who reviews the case and decides whether to pay the claim or not. But back to our story about Kim Kardashian. Kim will have to speak with her insurance company and give them the details about what happened. After review, the claim is paid. You have a choice whether to replace the jewelry and have them pay a jeweler or take the cash. Since Kim's ring can't be replaced very easily and it will take time to find a 20 carat emerald cut D-color diamond since they are very rare. Who knows what else was stolen, but it's reported to be worth a total of $11 million. I would bet she will take the cash and take her time finding a suitable replacement, if she wants one which apparently she is doubtful about but her husband wants to replace it. I'm sure the rumors will fly from people who don't understand how the process of the insurance works and she will be accused of some kind of a scam. The reality is, she is just following how the insurance process works. You can see pictures of some of Kim Kardashian's jewelry here: www.lindapjones.com/kimkardashian If you're looking to become wealthier, get my free report: "11 Quick Tips to Boost Your Wealth" at www.lindapjones.com.

Learn where to invest and find high rates. I've mentioned Jason Hartman's Creating Wealth podcast and how there are 700 podcasts about real estate investing. Now we're going to talk to Jason about his investing experience and whether it's better to invest in real estate for capital gains or cash flow? http://bit.ly/wealthpod It's listener question Friday! Dear Linda, I love your podcasts! They are simply fabulous! I am wondering where can I get some financial products with a high rate of compounding? Let's say 8 to 10%. I need your great help for that, Linda. Thank you very much. Best regards, Marie I wish 8 to 10% was so easy! Be careful when reaching for yield. A friend of mine was pitched 5.5% junk bonds that weren't diversified and were 30 year bonds! He was actually considering them because a "friend" recommended them. High yields equal high risk. Bank yields are 1 to 2%. 10 year bonds are 1.5%. How can you get 5.5? Lower the quality - but you don't want to do that. Consider alternative investments - but they can be complex. Dividends on stocks - but it entails risk to principal. There's no easy answer for a "guaranteed" rate. But here's the question: should you be investing for growth instead of income anyway? Growth does involve risk, but over the long-term risk is minimized and returns are maximized. Get started investing to grow your wealth. Read Testimonials from iTunes. Have you left me one yet? To get your "10 Quick Financial Tips to Boost Your Wealth" at www.lindapjones.com.

Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod Please see LindaPJones.com for the list of 11 undervalued real estate markets.

Learn if it is better to invest in real estate for capital gains or cash flow. I've mentioned Jason Hartman's Creating Wealth podcast and how there are 700 podcasts about real estate investing. Now we're going to talk to Jason about his investing experience and whether it's better to invest in real estate for capital gains or cash flow? http://bit.ly/wealthpod

Learn why the scandal at Wells Fargo is even worse than you're hearing. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod It's listener question Friday and one of our listeners asked: Do you think the penalties were big enough for Wells Fargo? The media reports the Wells Fargo fraud as "you received an extra account." Ah no, that's not what happened. Money was taken out of accounts without customer permission to create bogus accounts. Fees were charged in the new accounts. Loans were generated without asking, effecting credit scores negatively. Senate Banking Committee hearing last week into the bank's sales tactics, which earlier resulted in a $185 million fine and regulatory action. During his appearance before that panel, Mr. Stumpf and the bank were roundly criticized for firing 5,300 employees over five years, yet taking no action against top executives. As many as two million accounts were opened using fictitious or unauthorized information. Clients of mine have found that they have 2 - 3 more accounts than they thought they had. They aren't showing up on the computer. One person lost a business loan because of Wells Fargo. The first class action lawsuit has been filed. IMO, much more will come of this. No executive in the C-suite has lost their job. Only employees doing what they were told. They did announce millions of dollars in stock options would be forfeited. CEO John Stumpf to forfeit $41 million in unvested equity awards, forgo salary during investigation; former retail banking head Carrie Tolstedt to forfeit $19 million in unvested equity awards The female exec in charge is retiring with over $100 million. The CEO has not taken responsibility, but will give back $40 million in options. There are reports by whistleblowers that they were fired for reporting illegal practices. The illegal activities weren't even caught by Wells Fargo auditors! It was caught by a reporter. This has continued, undetected by senior management, so they say, for several YEARS. This is THE most egregious act of fraud I have ever seen in my life. The harshest penalties should be charged for people who take money out of your account without authorization. This has gone on years after they caught it. I strongly suggest you close your account if you bank there and move to a credit union or small town bank with more integrity.

Learn why there are more millionaires today, according to a wealth management study, and how they are getting wealthier. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod I'm going to share with you an article from Barron's called "Penta Millionaires: The New Rising Class" written by Stacy Perman. I'm going to read a lot of the information because it's statistics, but I'll also comment where I can. I'm sure you'll want to know why are people becoming wealthier at an increasing rate and how can you participate?! Last year the number of households with more than $5 million in investible assets crossed the 1 million mark, up 5% from 2014. The $1MM to $5MM category increased 42%. The $5MM to $20MM category increased 38%. The $20MM to $100MM category increased by 64%. The $100MM to $1B category increased by 61%. The $1B+ category increased by 26%. Wealth is created by money engines that are compounding! Businesses are a large part of it. So are investments in real estate and stocks. It's hardest to make your first million dollars, but keep working on it! Use the 6 Steps to Wealth. Educate yourself. Hang out with millionaires. Join the VIP Experience!

Learn what multi-millionaires talk about with their friends. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod I'm on vacation with friends in Huntington Beach, CA. Saw a random post on FB about someone who wanted to hang out with people that have a higher net worth. I believe it was in regard to Jim Rohn's comment that your income is the average of the 5 people you hang out with - with a twist to net worth. It made me realize I'm here with 4 other multi-millionaires. One owned a famous blue jeans company frequently worn by celebs, one is an apartment landlord, two own many houses in at least 4 states. They have all lived near me in Palm Springs at one time or currently do. I didn't even think about our net worths consciously before I saw the post. Our conversation has been very financial this whole trip. Discussing whether or not RE is in a bubble? Looking at RE to buy, walking the best neighborhoods, getting educated about the area. Talking to a random City Council member about real estate. Shopping at Nordstrom Rack (a "Millionaire Next Door" typical move). "Once you leave Orange County, CA, you can't afford to get back in. Homes went up 30 times over." Investing choices, cities, rentals, apartments, houses, stocks, silver, art, the Federal Reserve, financial crises, bubbles, etc. These are all things we routinely discuss in the VIP Experience. You don't have to hang out with multi-millionaires, but you should be thinking about these 5 questions: 1. Do your friends have a similar net worth to yours? 2.What do you spend your time talking about? 3. Do you do investment research on an everyday consciousness basis? 4. What net worth do you want to achieve? 5. Do you allow yourself to dream and not let "reality" stop you? www.lindapjones.com

Learn how to determine whether investing in a home improvement is a good idea or not. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod Linda, I have a rental house that is also our beach house. I rent it out on VRBO for extra income. I've been wanted to make some cosmetic changes and wanted to ask your advice. I like painted baseboards better than wood baseboards - should I change them? I also am thinking of replacing the carpet in the bedrooms to tile and the kitchen countertops from tile to granite or quartz. Is it worth it to make the investment? I love your podcast and listen religiously. Your advice would be greatly appreciated! Bonnie Thank you for the questions, Bonnie! When thinking about making home improvements to a rental or your primary residence, consider this: 1. Will it improve the value of the home? 2. How long will it take to make my money back (if a rental)? 3. Is it a matter of personal taste or does it appeal to most buyers? 4. Is this the best improvement I can make for the money? 5. Knowing that kitchens, bathrooms and closets sell homes, does it fit within an improvement of one of these important categories? Get "10 Quick Tips to Boost Your Wealth" at www.lindapjones.com

Learn why people who earn 6 figures don't necessarily have it made and need to save more. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod "Make Six Figures? There's a Decent Chance You've Got Almost Nothing in the Bank", article by Polly Mosendz Here is the link: http://www.bloomberg.com/news/articles/2016-09-20/make-six-figures-there-s-a-decent-chance-you-ve-got-almost-nothing-in-the-bank?cmpid=BBD092016_BIZ

Learn the do's and don'ts of purchasing and storing silver. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod It's listener question Friday! Dear Linda, I've been listening to your podcasts and I'm curious about how to buy silver. Do you recommend buying it online? Should I buy an ETF? Can I pay someone to store it for me? Kris I get lots of questions about silver. The most often it's why do I recommend buying silver and not gold? Where to buy it? 1. Your local dealer with a good reputation 2. Online at JMbullion.com or SDbullion.com 3. Goldmoney.com 4. PSLV 5. Not an ETF like SLV How to store it? 1. At home in a safe that is bolted to the floor 2. Not in a safety deposit box 3. Don't pay someone to store it for you 4. In a storage facility (not a bank) 5. At goldmoney.com

Learn why impulse buying of money traps is making you poorer. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod Are you buying depreciating assets like boats and RV's then wondering why you don't have any money? Boats need trailers, moorage, insurance, gas, repairs, covers, motors, ski equipment, etc. RV's need gas, garage, insurance, repairs, car to tow, fees, washing, etc. The cost of the boat or RV is not it's true cost! It goes way beyond that. You've increased your monthly expenses by more than you think. Those extra thousands could be going to work for you and producing more money. If you're in your 50's or 60's, you need to pay special attention to this and get serious about saving and investing. You can build your wealth or buy these toys, but you can't do both very well. Rent instead of buy. Use it and leave the cost and headache to someone else!

Learn 7 investment strategies of centimillionaires. Have you listened to the Creating Wealth podcast with Jason Hartman? It has over 700 podcasts on real estate. If you like this podcast, you'll like that one too.http://bit.ly/wealthpod Here are the 7 Investment Strategies of Centimillionaires: 1. Own the game 2. Alpha-mail (instead of blackmail) 3. Niche monopoly 4. Work on building a full chess board portfolio 5. Leveraged resource strategy 6. Horse trading 7. Identify choke points Find links to all the books mentioned at www.lindapjones.com/centimillionaire

Learn how billionaire Sara Blakely learned to reframe to word "failure". Have you listened to the Creating Wealth podcast with Jason Hartman yet? There are over 700 podcasts about real estate. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod Sara Blakely, founder of Spanx, is the youngest, female self-made billionaire in history. Learn why reframing the word "failure" helped her become successful. Want to jumpstart your wealth building? Get the free report: "10 Quick Tips to Boost Your Wealth" at www.lindapjones.com.

Learn Why Mansions Are the Result Not the Cause of Wealth Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod Listener question: If it is about not buying too expensive but buying smart, then why are billionaires and millionaires buying 40/50 million dollars houses, yachts, cars?? Dave Good question. I can see why it's confusing. You might think that's how they are getting rich, by buying huge mansions. The ability for the to afford a mansion came after they built their wealth, it's not the way they built their wealth. Just like athletes sometimes get huge contracts and then buy a big mansion, their athletic prowess is what made them their wealth. Or a Hollywood actor or actress buying a huge mansion. Buying a $50 million dollar house is not what made them rich. Now that they are rich, they may want to enjoy it by buying a trophy property, or they may be looking for ways to park money that is outside of the banking system, in my opinion. That was happening in Miami and NYC (Russians), Vancouver (Chinese), etc. Their are currency issues in foreign countries, so parking some money in the US is an option. That's why we are seeing crazy prices being paid. On a smaller scale, I see this happen with new money all the time. Someone had an influx of cash due to their business or job and they go out and buy a $200,000 Bentley or other car. They do it so they can show the world how successful they are. The problem with it is they have just stopped themselves from creating real wealth because if you don't understand how wealth is built and you don't understand the 6 Steps to Wealth, then you are probably oblivious to the fact they just spent their nest egg or capital that would have created wealth for them! They think their business will go on forever, and I hope it does, but with habits like that, whatever money they make won't be kept, it will be spent! No matter how many millions they make, they still have to pay taxes and they still have to invest for wealth. If they don't invest, the money won't continue compounding and it's gone! That's why professional athletes, lottery winners, and other people who inherit money have gone through it within 5 years. Spending does not equal investing. Especially spending on depreciating assets! The $200,000 spent on the car will be worth less 5 years from now. Whereas if he could have invested it at 8%, it would already have grown to almost 50% more: $293,865 or $294,000! Over 20 years, the $200k at 8% would have grown to almost $1 million! ($932,191) In 30 years, over $2 million! A person buying a $50 million mansion also already has their wealth, so if they want to use it for toys, that's up to them. For anyone starting out building wealth, it isn't the right move. You have to follow the steps that make wealth grow, understand how to compound money and not buy depreciating assets. That's why they always say the first million is the hardest! Get "10 Quick Tips to Boost Your Wealth" at www.LindaPJones.com

Learn the 1 thing that is holding you back from reaching your goals. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod Recently, I was in New York City and wanted to meet a friend out by the JFK airport, about xx miles east of Manhattan. The first thing I did was get directions from my friend. She emailed me, "take the A train". I was confused already. Did she mean the "A" subway line or a real "train" from Grand Central Station I wondered? So I asked another friend. He took out his phone and opened an app of a subway map. He told me to take the number 6 subway to 14th street, change to another route and then another route. Since none of the names of the stops were familiar to me, I couldn't remember them. So the next morning I found my way to the subway and made it to 14th street, no problem. But then I got totally lost because I didn't have a map and couldn't remember where to transfer. I thought a map would be posted inside the underground hallways, but they weren't. So I had to go back through the gate and get a map from the token seller. Once I had the map, I had to figure out where to go. I identified it was the "L" train. I finally found my way and boarded it. It turned out it was a local and not an express, so it was stopping every couple of minutes. Then the train announced everyone had to disembark because it was being retired for maintenance, so I had to get off. I asked someone where to catch the express. The next train that came wasn't the one he said was the express, except it really was because apparently sometimes the wrong name is on it. So a nice stranger told me to get on that train until the next transfer point where I got off. The stranger and I got to talking. It turns out his name was Ray and he was a dancer and had been on a Talent show. He was injured. Had excuses - mom sick, 2 jobs, etc. A friend won the contest and said Ray was a better dancer. I explained the map to him. How confidence and vision work in place of a map. The point is, I never gave up or doubted that I would make it to see my friend. Why not? Because I had a map. I knew I could get from where I was to where I wanted to go because I could see it on the map! That's what's missing in your life. "Indecision is the mark of a fearful mind" - Vernon Howard Don't be waiting to start until you have the whole map! Get started and you'll find your way. Get your "10 Quick Tips to Boost Your Wealth" at www.lindapjones.com

Learn the 3 things to prioritize to keep you on a happy, healthy and wealthy path and the winner of the Twitter BW&S Wealth Journal giveaway! Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod 3 Things to prioritize: Faith - Honor God, Go to church or temple, meditate, do your tithing, etc. Family - Love your family Spend time with loved ones Includes health, of course Wealth - Give your wealth 30 minutes a day Check your bank accounts Review your stock portfolio Check retirement accounts See if it needs tweaks Give it attention Calculate net worth Read a book Read IBD Say affirmations or watch your Flipagram Write in Wealth Journal Today is my birthday! Time for reflection over the past year Good year Fun to be on Below Deck Mediterranean Trip to Greece On TV show Podcast - reaching 153 countries and approaching 400k listeners VIP Experience community - Connect, have people joining regularly Exciting plans for the next year - stay tuned! Want us to connect in more ways IG - posted jingle lyrics to LIFE by Beckah Shae and post content in short paragraphs on LPJ& BWS pages Twitter - giveaway Wealth Journal Winner is Chaviano - Buhager from Miami Florida! Periscope app - my escapades out and about and more! For 10 Quick Tips to Boost Your Wealth, go to www.lindapjones.com

Learn what assets make up your asset allocation and how to decide how much to invest. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod Question: "When working out asset allocation, do financial planners usually start with overall net worth, and then work back from there? Or do they not include everything in the asset allocation calculations? I can find plenty of examples of how to work out asset allocations, just nothing on what should be included when figuring what you have to start with." "It's hard to invest 10% of your portfolio in something when you don't understand how exactly to work out the figure you have to start with." - Gillian Financial planners usually segregate liquid assets from your net worth. Of course, Net Worth = Assets - Liabilities Most financial planners will only do asset allocation for investments in the stock and bond markets. They won't include your home, rental real estate, business, etc. They will break it down into Large Cap, Mid Cap, Small Cap, International, ST bond, Intermediate Bonds, LT bonds, REITs, sectors, etc. If you want more in-depth information on asset allocation where I really drill down deep, see Be Wealthy & Smart podcast #165. If you're serious about improving your net worth, get my "10 Quick Tips to Boost Your Wealth" at www.lindapjones.com.

Learn which cars are the most expensive and least expensive to maintain and what problems occur with greater frequency in some car models. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod ***The information mentioned in this podcast can be found on my website at http://lindapjones.com/cars *** Twitter promo - win a free Wealth Journal & Mini Course valued at $67. Just follow me @Linda P Jones and retweet for a chance to win on Monday. Get 10 Quick Tips to Boost Your Wealth at www.LindaPJones.com.

Learn how to get savings from retailers you frequently purchase from. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod 1. Gelson's groceries: 10% + $5 2. 30% on CVS online to card, gives coupons at checkout too. 3. Saved $51 on dog sitting with spoton.com/app Other reward programs I like are at Ulta, Nordstrom, and Amazon.com. See Be Wealthy & Smart #127 for best credit card reward programs Your homework is next time you're at a store you frequent, find out if they have a loyalty program and sign up. Twitter promo - win a free Wealth Journal & Mini Course valued at $67. Just follow me @Linda P Jones and retweet for a chance to win on Sept 5th.

Learn what steps you can take to make a different growing your wealth. Have you listened to Jason Hartman of the Creating Wealth podcast yet? Check out his latest episode "Real Estate Will Never Be the Same." There's over 700 episodes and a wealth of RE investing knowledge there. http://bit.ly/wealthpod Listener Question: I've read Rich Dad Poor Dad and How to Make Money in Stocks. I'm maxing out my 401k, but it doesn't feel like I'm doing enough. What can I do to get out of the rat race sooner? The 6 Steps to Wealth - how wealth grows The Twin Pillars of Wealth Building Continuously read Wealthy Mindset books like Power of Positive Thinking, Think and Grow Rich, and The Magic of Thinking Big Learn about investing at the Be Wealthy & Smart VIP Experience. Find it at http://lindapjones.com/joinVIP

Learn why billionaires are all around you, how they invest and what they look for when investing. Get an inside view of the ultra wealthy, what's myth and what's reality? Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod

The host of the TV show "Making It" shares his wisdom from interviewing over 1,000 successful entrepreneurs. Have you checked out the Creating Wealth podcast yet with Jason Hartman? It's full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you'll like that one too. http://bit.ly/wealthpod

Learn about mortgage loans, refinancing, Harp loans and how to ensure a successful closing with Loan Officer Dana Zito Bator of GuaranteedRate.com. Dana can work with home buyers and home owners in the US and Virgin Islands. She can be reached at GuaranteedRate.com/DanaZito or 847-592-9201. Have you listened to Jason Hartman of the Creating Wealth Podcast yet? Check out his latest episode with client case studies, property management best practices and increasing occupancy rates. There's a wealth of real estate investing knowledge there. http://bit.ly/wealthpod

Learn about starting an online business with one of the pioneers of internet marketing, Jason Van Orden of the Internet Business Mastery podcast. Have you checked out the Creating Wealth Podcast yet? Listen to Jason Hartman's latest episode about nominal dollars vs. real dollars and understanding investor psychology. If you like this podcast, you'll like his too.

Learn about starting an online business with one of the pioneers of internet marketing, Jason Van Orden of the Internet Business Mastery podcast. Have you listened to Jason Hartman of the Creating Wealth Podcast yet? Check out his latest episode with client case studies, property management best practices and increasing occupancy rates. There's a wealth of RE investing knowledge there.

Learn the 3 types of real estate and which is the best to invest in to create wealth. Interview with Jason Hartman of the Creating Wealth podcast. Check out Jason Hartman's Creating Wealth Podcast and his 700 episodes about how to successfully invest in real estate, here: http://bit.ly/wealthpod

Today we're going to talk about something that's been bothering me. I call this episode simply "Investing". It's the truth about how money works. There's a lot of teaching about what people think makes you successful with money. But the reality is it's focusing on the wrong things! Before we get started with today's show, I'd like to thank today's sponsor, Jason Hartman of The Creating Wealth Podcast and invite you all to check out his latest episode with Dr. Bruce Weinstein, on Ethics, Ethical Intelligence, Wall Street and evaluating character. It's juicy stuff, people! http://bit.ly/wealthpod There's a lot of focus on obvious things like "spending less than you earn". I agree that will keep you from accumulating debt, but I also disagree that it's all you need to know to live a comfortable life or to become wealthy. One thing I learned from my family is investing is not an option. It's a requirement! My family had a belief that you spent wisely - you were careful with money - and also invested money into investments that would grow it. Whether stocks or real estate, we always somehow just knew investing on the side was not optional, it was required in order to grow your net worth and have more than enough for retirement. My parents worked hard in their spare time to create something of worth that would grow and amount to some significant wealth. All 5 of their children deeply internalized this belief and I believe that's why all 5 of us became millionaires. It wasn't from handouts, it was by imitating our parents' behavior and investing on the side - some in real estate, some in stocks. We all learned the importance of investing and owning assets that grew in value. It could also be that they taught us at a young age that we had to work for money. We didn't have an allowance. We worked in the yard or at the apartment building my parents invested in and were paid hourly. That's how we earned our allowance. It wasn't handed to us. The more hours we worked, the more money we made. We learned that lesson early. So when I see so much emphasis put on "spending less", "being frugal" or "living below your means", it makes me crazy because I know it's missing an important point. The point is to invest and grow your money. I don't care how much you save, it's rare that savings alone is going to give you the financial freedom you want. It is more likely that investing will do that for you. One of the things I learned about billionaires recently is their #1 priority is how to gain more control over their money. I don't think that's a coincidence that billionaires want more control over their money! I think that's how they got so rich, by taking control of their money. By watching over it, watering it, pulling weeds and making it grow. I love to tell the story about John D. Rockefeller starting out as a humble clerk who calculated his net worth every day! That's keeping your eye on it, that's keeping control of it and making sure it grows! Wealth is created by compounding at high rates in a money engine, not by being a tightwad…not by living in a 400 sq ft home, not by canceling cable. Don't get me wrong, that's fine if you are on a very tight budget and are having a hard time making ends meet, but if you are earning a good living, then you need to be investing in money engines that are going to grow and compound your money because getting your money working harder for you is the easiest path to wealth.

Learn why asset allocation models are broken, why and what to watch out for. Just want to mention our sponsor, Jason Hartman of the Creating Wealth Podcast, and it's a MUST listen for anyone who is looking to create additional revenue streams. His show is full of smart stuff and if you like this show, you'll love his too. http://bit.ly/wealthpod. Asset allocation is the backbone of investment firms. It's usually displayed by using pie charts with models of how much to invest in each slice to achieve a conservative, moderately conservative, moderate, moderately aggressive or aggressive mix of investments. The choices to put into the slices of the pie chart are things like small company stocks (roughly under $2 billion in market capitalization - price per share x number of shares), medium companies (mid-caps - $2 to $10 billion) and large companies ($10 billion+), International and bonds. The bonds can be divided into short-term (under 3 years), intermediate (3 to 10 years) or long-term (10+ years). Sometimes a sector fund or two are also added like technology, healthcare or real estate. Real estate has become a staple in the last 15 years because it has been a top performing sector. As I've mentioned on podcasts before, we are likely near a peak in bond prices because we are at low in yields, and yield and bond valuations move inversely. The coupon rate is the yield or interest rate the bond pays when issued. The higher interest rates move up, the lower the value of the bond goes. The lower the yield goes, the higher the value of the bond. When you look at past-performance, the track records look phenomenal because yields have been dropping for over 30 years! That's one heck of a bull market for bonds. As interest rates dropped, the performance of the bonds was fantastic because again, they move inversely to interest rate movements. Now that we're at the bottom for rates, what does that mean going forward? A strong headwind for bonds. Bonds issued at low yields will lose value when interest rates rise and new bonds with higher yields become available. Interest rates have to go up someday and usually move in 30 year cycles, so don't be fooled by investments that have a substantial portion of their money in bonds (like balanced funds which can be part stocks and part bonds, for example). The PAST looks great, but what will the future bring? Likely trouble for the bond portion of the fund. That's where looking only at past performance can hurt you. What happens when you sit down with most Financial Advisors? They show you great PAST PERFORMANCE numbers and encourage you to invest in a portfolio that has done well in the PAST. It has no relation to doing well going forward. In fact, in my podcast, Why NOT to Invest in 5 Star Funds, I proved that 5 star funds are actually worse performers going forward than 2 star funds. The difficult thing is there's no risk-free asset that yields a decent yield anymore. You used to be able to get a few percent in a Treasury, but no more unless you go out years on the yield curve, meaning take more risk of volatility by moving into a longer maturing bond. A 20 year bond will fluctuate in value a lot more than a 3 year bond. So if interest rates rise and you have long-term bonds, you could lose substantial amounts of money. So what can you do for asset allocation to avoid the low yields on bonds? You can mix in some other assets in place of bonds like large company stocks that pay dividends, REIT's, and other options. The purpose of this podcast isn't to explore all the alternatives, but to show you why past track records of bonds are tricky in asset allocation models and you need to be aware those great numbers of the last 30 years are not repeatable. Interest rates going from 18% in 1982 to roughly 0% today, means a dramatic decline in interest rates that boosted bonds cannot happen. The only thing we know is someday 0% rates will go up and that won't be positive for bonds. So be aware and don't be dazzled by past performance that's mathematically impossible to repeat going forward.

Learn whether to invest in hedge funds, what returns are possible and a special $1 offer for the Be Wealthy & Smart VIP Experience! Just want to mention our sponsor, Jason Hartman of the Creating Wealth Podcast, and it's a MUST listen for anyone who is looking to create additional revenue streams. His show is full of smart stuff and if you like this show, you'll love his too. http://bit.ly/wealthpod. Here is our listener question: Hi Linda, I hope you don't mind my sending you this e-mail about your podcast 090. I have listened to roughly 35 of your podcasts now and find them to be very informative. I especially liked 090 "why not to invest in 5-star rated mutual funds". It was a real eye opening segment that was constructed in a way that resonated with me. The "if, then" references were right on point. I am trying to build a personal knowledge database/decision matrix about investing and you are the starting point for me. My wife and I have 3 pensions/401K's between us as well as stock investments with large brokerage firms. Frankly we are tired of the roller coaster of performance fluctuation. Is it unrealistic to believe that we can do better than 5-8% annual return on our investments? I have a friend who runs a hedge fund that I could get into. Is this a good investment? What questions should I ask about the fund? Would the Hedge Fund topic be a good podcast topic for you to discuss? I think what you are offering is great. I am not sure which of your pay services/products may be right for us yet but we are still evaluating and when we understand more will make some decisions. Based on your recommendations I have purchased "how to make money in stocks" and IBD, also the "biology of belief". It is all great reference material. I am absolutely committed to mastering the skill sets needed to become proficient at investing. If you have a syllabus that best defines how to get there, other than what I am doing that would be great. Thank you for what you are doing for others. Ron Linda's response: Hi Ron, Thank you for your email! I'm glad you're investing in your education by reading books I've recommended and that you are starting with step #1 of the 6 steps to wealth: create a wealthy mindset. Hedge funds are for accredited investors with $300k of income or $1 mill net worth excluding their home. It can be lucrative if they have a good process and track record. You're going to want to ask what those are and how much leverage they use. It's not uncommon for hedge funds to use 300% leverage. The high point to low point in a hedge fund is called the "drawdown", that's the volatility of the fund. Because it's leveraged the volatility can be high, but most hedge funds try to minimize volatility while providing returns above the market indexes, aka "alpha". A hedge fund is for a sophisticated investor who can afford to lose their money. It is not a basic investment to start out with. If you're looking for where to start investing, I'd suggest you listen to my asset allocation podcast. If you're looking for education and guidance from me where to invest, there's the Be Wealthy & Smart VIP Experience. It's where I work with the members and provide live webinars with them monthly, source the most pertinent financial articles that show trends in the market and suggest exactly where to invest. In the VIP Experience, we have been investing in alternative investments which as an asset class are up over 42% year to date as opposed to about 6% for the stock market. You won't hear what I teach and the information I give you anywhere else. I'm very specific about what to do and you can always ask me questions at the end of the webinar, in our wealth building forum or our Facebook group. I serve up what to do with your investments on a silver platter! To join the VIP Experience go to www.lindapjones.com/joinvip and I've got a special offer just for listeners of this podcast - you can join for 30 days for $1 and then get a 50% savings off the regular price. The regular price on the website is $1997 but it you use the promo code "1dollar" at checkout, just for listeners of the podcast you can try it for $1 dollar for 30 days! After 30 days, you are charged one-time only $997 and then after 45 days from the purchase date you are sent a Wealth Journal where I share the "6 Steps to Wealth" I used to make my first $1 million. You have 30 days from the date of purchase as a 100% money back guarantee and once you pay $997 you have lifetime membership with no further charges. You pay once and never again, but have full membership and access to me and my webinars! Go to www.lindapjones.com/joinvip and enter promo code "1dollar".

Learn the characteristics of a successful entrepreneur, why passion isn't enough and what you must do to thrive as an entrepreneur. Just want to mention our sponsor, Jason Hartman of the Creating Wealth Podcast, and it's a MUST listen for anyone who is looking to create additional revenue streams. His show is full of smart stuff and if you like this show, you'll love his too. http://bit.ly/wealthpod. Interview with Jason Myers, Co-founder and CEO of CXO Collective, part 2.

Learn the characteristics of a successful entrepreneur, why passion isn't enough and what you must do to thrive as an entrepreneur. Interview with Jason Myers, Co-founder and CEO of CXO Collective. Just want to mention our sponsor, Jason Hartman of the Creating Wealth Podcast, and it's a MUST listen for anyone who is looking to create additional revenue streams. His show is full of smart stuff and if you like this show, you'll love his too. http://bit.ly/wealthpod.

Learn how much home equity Americans have, how many Americans own their home free and clear and if it impacts your wealth. Recently a friend told me she'd rather rent than buy a home. Is it still a good idea to own a home? Listen to Be Wealthy &Smart podcast #137: "Should I own a house or rent?" Ever wonder how much equity most people have? According to the Urban Institute, it's a little over $150k. Not only do you have to come up with a 20% downpayment (not always), but you're also paying into principal each month. The forced savings is powerful, even if the home doesn't appreciate. Americans over age 60 hold 52% of all home equity; under 50 hold 23%; and those under 40 owned 17%. Of 73 million homeowners, 46 million have some debt on the home and 27 million have it paid off. Homeowners tend to have more wealth in areas where real estate has increased more. Makes sense, since it's most peoples' largest asset. Read podcast reviews.

Women in households across the US manage $5 trillion! More than half of women with investible assets of $1 million think their financial advisor doesn't understand them, according to a 2014 study by the Center for Talent Innovation, a NY think tank. A study by National Bureau of Economic Research in 2011 found that FA's ask women fewer questions than men in the initial meeting and 40% are likely to tell women than men that they must first transfer their portfolio to the advisor's firm before receiving any advice. It goes along with what I've been told…that FA's don't speak to the woman, even if she's the breadwinner, they look at the man the whole time, don't ask her goals, etc. According to Wells Fargo, the median retirement balance in women's accounts is $500k vs. $700k for men. On average, women drop out of the workforce for 11 years to care for children. That amounts to $224k lost in lifetime earnings and SS benefits, according to AARP. Less than 25% of advisors are women, with no change in a decade. By 2054, $40 trillion in wealth will be passed on, much of that falling into womens' hands according to the Center for Talent Innovation. Seventy (70%) percent of women leave their financial advisor after their husband's death. Women with $1 million in investible assets 45% were deemed financially literate, but only 30% said they felt confident in their knowledge vs. 39% of men deemed financially literate and 34% of men felt confident. Men were more interested in performance and investment choices and women were more interested in services, charitable giving, tax management, & long-term care. I want to encourage women to learn through the podcast. Share with your friends. Financial literacy is important.

Learn why independent researcher Steve St. Angelo of SRSrocco report believes there is a coming shortage of silver. See charts at www.lindapjones.com/srsrocco

Learn why a 30 year mortgage can be better than a 15 year mortgage when investing in real estate. Here is our listener question this week: Hi Linda, You talk about using leverage to purchase rental properties as well as making an extra payment each year to pay down the mortgage quicker. I have a rental property that currently has a 15 yr note at 4% and we are paying approximately $360 per month out of pocket to cover the mortgage (incl. taxes, insurance, and PMI). We refinanced about 4 years ago into the 15yr in order to reduce our interest rate and pay down the principle faster since we were underwater at the time. Now we are back in the black and were considering refinancing into a 30yr mortgage (which would also be at 4%) in order to increase our cash flow and invest the savings each month either in the market or save it toward a down payment on another property. Our payment would go from $1260 to $760. I wanted to hear your thoughts on this plan. We currently receive $900 per month in rent, which is slightly above market value, so I would not expect rent to go up for a few years. Thanks so much. Love the show. I love this question! This is why I don't like 15 year mortgages! 1). All debt is not bad 2). Debt will enhance your return. Example: $100,000 cash vs. 10% down 3). A 30 mortgage will shift your cash from from negative to positive cash flow 4). You can still pay off your 30 year mortgage early by making extra principal payments. 5). You control the payoff, not the bank. 6). Pay extra to get rid of PMI payment. Need to get to 20% equity. Can pre-pay, get a new appraisal, refi, or remodel. 7). $1260 current payment - $760 new payment = $500 per month less, which would cover the $360 negative cash flow. Why not? Then: $900 rent - $760 payment = $140 positive cash flow All this talk that debt is evil is bunk! Debt is your friend in real estate. It's called leverage and helps you get higher compounding rates.

Learn what asset is near the top of its cycle and which asset is near the bottom of its cycle. What asset is in a bubble? Bonds - IOU's that pay the investor interest. Interest rates move in 30 year cycles. Near the low in interest rates. It's a process. In Europe, some countries have negative interest rates (NIRP - Negative Interest Rate Policy). Investors pay to own sovereign bonds. Fear of losing money or default and want a guarantee. What asset is near the bottom? Silver. You can see cycles in the chart. Go to my website to see it: www.lindapjones.com/silver Chart shows cycles and the MACD. Shows the moving averages or calculations that show the trends and help you see the direction of movement and when it is turning into the opposite direction. Also can see it is peaking here, short term. Waves of energy flow through everything, even investments. You can see the cycles of the energy waves in this financial chart of the price of silver, which is our #1 holding and the #1 performing investment year-to-date, up 42%! Turning into the down part of the cycle now before it moves higher. We have a clear indication silver is about to move lower. It's normal to have regular corrections in the price before it moves higher. Don't be scared when silver moves lower, it's expected right now. There's a lot more on the upside for silver long-term, so I'm not getting caught up with short-term trading because the greater risk is that you could be out of it and miss it when it finally blasts upward. So hang in there. Don't be a buyer here, that time will come again in the next month. If you want to know what to buy and what NOT to buy to take advantage of silver, that's what the BWS VIP Experience is for. Go to www.lindapjones.com/joinvip