Learn Investing Basics A Book Excerpt

Start to Learn Investing Basics A Book Excerpt From The Book:

Live Rich Save Money!: Learn Investing; From Stocks to Mutual Fund Research in 47 Wonderful Ways


Investing is the single best way to increase your net worth, over time. Over the past sixty years, investing in stocks—when you take into consideration both inflation and taxes—have outpaced every other form of investment. But, in order to invest, you must first know: what it means, how to do it, and where it can take you.

To start, study LiveRichSaveMoney.com, along with this book, to get a basic understanding of the markets, to sharpen the skills you already have, and to stay abreast of what is going on in the financial world. In order to invest, whether you do it yourself, or use a broker, you must first know the basics of investing. Learn how to monitor your investments, before you invest, and continue to study the markets, after you invest. And, learn to acquire the investments that are appropriate for you.


  1. Analyze your investments’ effectiveness in your
  2. Evaluate, from time to time, your investments’
  3. Hold investments long-term, because you know how to under- stand and monitor
  4. Choose the investments that are appropriate for you, or be able to work with your broker in choosing such


With stocks and mutual funds, the long-term gains are often so large because of the effects of compounded (versus “simple”) interest. With simple interest, you only get interest on your original principal. With investments such as stocks and mutual funds, you get interest on your original principal, plus interest on that principal along with its previous interest, and so on, provided that your investment holds its value. Let’s demonstrate—with an investment of one dollar.

Suppose you save one dollar per day, for several years, at the following interest rates and number of years invested. How much would you end up with, by continually compounding interest on interest on interest? (Remember, you are taking a new dollar out of your pocket and investing it, every day.) Assume that there are 28 days in every month, and that the resulting amounts are deposited, each month, using compounded interest.

$1 invested per day, using compounded interest:


8% 10% 12%
5 years $2,071 $2,186 $2,511
10 years $5,156 $5,783 $7,802
15 years $9,753 $11,701 $18,952
20 years $16,602 $21,439 $42,446

Try my “Monthly Deposit Savings Calculator,” found at LiveRichCalculators.com, to figure out some more likely scenarios, such as $5, $10, or $20 per day.


I periodically present myself at trade shows and give lectures. At these, a few people have confided in me that they couldn’t get a broker to invest for them, because the broker said that they didn’t have enough money. This is not true! You can invest with small amounts of money: through monthly deposits into a mutual fund, or into stock accounts that let you buy shares or partial shares.

Look at a few online, brokerage, or your local library’s mutual fund reports, and you will find mutual funds that can be purchased directly from the mutual fund companies for only small amounts of money to start, so long as the buyer promises to make regular monthly payments into the fund.


Three worksheets:

Make three worksheets:One for short-term goals, one for mid-term goals, and one for long-term goals. At the top include: 1) your goal, 2) monthly contributions, 3) time to save, 4) investment type (e.g., equity-income fund, growth fund, money market fund), and 5) date the money is needed.Use the “Monthly Deposit Savings Calculator, and the “Variable Compounded Interest Calculator, both at LiveRichCalculators.com, to estimate how long it will take for you to reach each of your goals. Use different interest rate scenarios, and make graphs. Be conservative with estimated interest rates.

Live Rich Book Will Show You How to Learn Investing Basics, Available Now! This excerpt from the book:

Live Rich Save Money! Learn Investing From Stocks to Mutual Fund Research in 47 Wonderful Ways


Many married couples have problems with their finances, usually because each partner in the marriage will have different spending habits. Each has a different expectation about money, and failed to discuss or discover this before getting married. And, for some, money is a taboo discussion before marriage, particularly if they are young, for they still think that love can “fix just about anything.” Well, not to be the bearer of bad news, but—love can’t cure all.

According to divorce attorneys, financial differences are one of the biggest reasons for divorce. When a couple gets divorced, the division of “things”—which includes accumulated savings, assets, and debt—becomes a divisive factor. Because of this, some divorce attorneys recommend that each person in a marriage have their own checking and savings accounts, in addition to the joint account.

I would also add that each person should have their own retirement account—particularly the wife, since, according to one major study, women comprise 79% of the elderly poor. And, spouses who are homemakers need to have their own retirement accounts, just like those spouses who work outside the home.

It is also important for each person in a marriage to have his and/or her own debt account(s) (i.e., until each gets completely out of debt).

That way, each would have control over some money, and neither would feel as though the other were controlling all of the finances. And, if— heaven forbid—there should ever be a divorce, each would have minimal involvement with expensive divorce lawyers, and their lives would proceed—as normally as possible—with minimal financial disruption.

So, before you marry, get to understand your spouse’s financial habits. Get to know his or her financial background, and find out if you are compatible financially, as well as in the other important ways. I asked my husband to allow me to see his credit report before we married. He obliged, because he had nothing to hide.

A credit report can give you a wealth of information about a person. I had always prided myself on my excellent credit rating, and I didn’t want to marry someone who was financially irresponsible.

If you really think that it’s okay to marry a high-income (or other) individual who is also financially irresponsible—think twice! Generally speaking, the higher the level of financial irresponsibility, the more financial problems there will be, to match that financial irresponsibility, the amount of that person’s income notwithstanding. Learn investing basics so you can monitor your accounts.

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Lois Center-Shabazz
Save Money Advocate and Artist

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