For me, it is an opportunity.  An opportunity to buy great, growing, profitable companies at very cheap prices. There are so many great investments out on the market to be made, in the stock market and in real estate, you just need to grow a pair and take advantage of them!

The biggest risk in investing is not taking enough risk, you do not want to kick yourself in 10 years and think: “I could have bough Research in Motion at 58 dollars a share” “I could have bought into an S&P Index fund at a great price”.

Do yourself a favor and get your money off of the sideline.

A company like Proctor and Gamble, who sells necessary household items that will be bought no matter what, should not be too negatively affected by the economy.

A company like Apple on the other hand is more sensitive to the economy. People might opt to keep their old Ipod if they are low on funds instead of buying a new one or they might buy a cheaper, 600 dollar Dell laptop, rather than a more expensive 1400 dollar IMac.

Recession proof stocks obviously perform better than the market in rough economic periods and worse than the market when things are going well.

Here are my top 4 recession proof stocks:

1. Johnson and Johnson [Ticker symbol JNJ]: Johnson and Johnson is a well oiled machine, they are a huge company that simply makes money hand over fist. A recession might slow them down a little but they will still be churning out money left and right no matter what. The next time you think the economy might be in for a rough patch or two, invest in JNJ and reap the benefits.
2. General Mills [GIS]: This is another company that the average consumer should be very familiar with. People cut back on their spending during a recession but they will not cut out their cheerios and other cheap, healthy food options. General Mills has been around for hundreds of years and will be around hundreds of years from now.
3. Coca-Cola [KO]: Coca Cola is a great investment during periods of downturn in the economy for two reasons. The first is that Coke and coke products are one of the last things to be cut out of one’s budget. The second is that Coke is so diversified these days that it is basically like buying a mutual fund. Coke sells its product in almost every country in the world so you will be instantly diversified and safer by investing in Coke.
4. Potash [Ticker symbol POT]: Yes, the ticker symbol is funny, and no, it is not a joke. Neither is this recommendation. Potash sells high quality, cheap fertilizer’s to commercial farmers, a recession does nothing but strengthen their business.

Some hobbies are easier to turn into a job then others, but it is possible to at least get a stream of income from almost any hobby.

1. The easiest way to turn your hobby into a job is to start freelancing. Do you like writing? Check out sites like Elance and Odesk, both sites allow you to connect with people who need articles written or pages to be coded… You can also search sites like Craigslist and LinkedIn to network and connect with people in your field. The more people you know the easier it will be for you.
2. Another great way to turn something you like into something that makes you money is to create a website about it. If you love the stock market but you do not want to have to worry about the constant stress of losing your clients and your own money, create a website about the stock market. Once the site begins to flourish, you will be able to sell advertising on the site. You can make a website about anything and there are always people on the internet interested in your site’s niche.
3. You can always create your own business. Lets say you are an animal lover, find a niche within your niche [Organic dog and cat food for example] and attempt to separate yourself from every other business. You will be able to increase your margins this way and you will have more loyal customers.

These are the three most viable options that I can think of.  Working 40 hours a week for the rest of your life is not what I want to do. You only live once, go for it!

• The best and easiest way to save money on college is to go to an affordable college. College is almost a necessity, but you should never have to pay more than 15-20 thousand a year for college, and even that is pushing it. Vanderbilt is a great school, but is it really worth 40 thousand dollars when you can get a good education for 10 grand a year?
• Student debt coming out of college is alright, in small doses. 10-20 grand is manageable, you should be able to pay that off within 2 years if you are dedicated enough, however you should never eclipse 40 grand unless you are going to med school or law school. 50 grand in student loans will evaporate pretty quickly when you are making 120 grand right out of school as a pharmacist, however it is not that easy for everyone.
• Talk to your school’s financial aid department. They might not be able to give you much direct help, but their job is to ensure students set themselves up well financially after graduation. They will give you personalized tips and advice.
• Look for colleges that are not only reasonable in price, but also rank well as far as amount of debt the average graduate has upon graduating.

Pro’s of stock buybacks:

• Stock buybacks increase a companies EPS [Earnings per share] and makes each share of the stock more valuable, so in most cases, the value of a share of the company increases after a buyback is completed. If a company makes 1 billion dollars a year and has 100 million shares out on the market, it’s earnings per share is 10 dollars. If it buys back 10 million shares of its company, it’s EPS is now 11.11 a share, more than a 10 percent increase.
• A company buying back its own stock is a signal that the company thinks its shares are undervalued. Business’s do not make investments unless they think that the investment will generate a profitable return.  If a company that trades at 20 dollars a share decides to buy back a large portion of its shares on the market, the company, which has tons of insight and inside information, likely thinks that its stock is worth between 30-40 dollars a share.

Con’s of stock buybacks:

• Companies use their own cash to buy back its shares.  Instead of making an acquisition of a smaller company or making steps to grow its business, the company is simply buying its own shares. The more cash a company has the better position it is in financially. Also companies normally only buy back its own shares if their growth prospects look weak [they have nothing better to spend its money on].
• Companies could directly give you the money instead of buying its own shares.  I mentioned earlier that dividends are going out of style.  I for one am still a huge fan of getting a large dividend check every 3 months and reinvesting the money back into the stock.  It is tough to beat DRIP Investing over the long haul.

Mature, large companies in lower growth fields such as healthcare and the oil industry are the most apt to buybacks some of its shares. Stock buybacks are here to stay, whether you like them or not! Companies have done much dumber things with their money over time then buy its own shares, trust me!

Here are a few of his most famous quotes:

“I always knew I was going to be rich. I don’t think I ever doubted it for a minute.”

This quote means the most to me personally.  I am young and not rich yet by any means, but I have always known that I am going to be rich.  It is in my blood.  I do not want to be rich out of greed, even though I certainly won’t mind the money, it is just something that I have always known will happen.

“I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.”

This is another great quote by Warren Buffett.  You do not have to hit a grand slam every time you pick a stock when investing or a piece of property when it comes to real estate.  It is okay to hit singles, steal bases, and hit the occasional home run.  You should not expect 50% yearly returns in the stock market, but its okay, you will become rich over time if you get 10% returns every year year after year.

The two quotes above mean as much to me as anything. You need to realize that you are capable of becoming very wealthy. You do not need to do anything special to become rich, just consistently invest and put money away day after day.  Keep on hitting singles and in the end it will turn out to be something great.

The traditional way is to pay off the credit card that is hitting you with the highest interest rate first while making the minimum payments on all of your other cards. This is the best way to pay off your debt mathematically and you will get rid of your credit card debt the fastest using this strategy.

However Dave Ramsey, the preacher of financial common sense, urges his followers to pay off their credit card debt by using the “debt snowball method”.

The snowball method is where you pay off your smallest debts first while paying minimum payments on all of your other debts.

Lets pretend that Steve is in credit card debt with 3 different companies, Visa, Mastercard, and American Express.

His debt with Visa is 10,000 dollars and Visa is charging him 18%, his debt with Mastercard is 2,000 dollars and he is being charged 15% by Mastercard.  His debt with American Express is 12,000 dollars and AE is charging him 20%.

Using the traditional method, Steve would make minimum payments to the two cards that are charging relatively low rates [Visa and Mastercard in this case] and he would make much larger payments towards his American Express debt.

Using Dave Ramsey’s debt snowball method Steve would make minimum payments towards Visa and American Express and large payments towards Mastercard.

If he has 600 dollars each month to pay towards his credit card debts Steve would put 50 dollars towards Visa, 50 towards AE, and 500 towards Mastercard.  After 4 short months Steve would owe nothing towards his Mastercard debt.  The 500 dollars he was paying to Mastercard can now go towards Visa, his second smallest debt.  After Steve paid off Visa he would now have the full 600 dollars monthly to help him tackle his largest debt, American Express.

If you are completely dead set on paying off your credit card debt and you need no more motivation along the way, make your largest payments to the credit card with the highest interest rate. This is the smartest and best way to tackle credit card debt in a perfect world.

However it is obvious that we do not live in a perfect world. Using the debt snowball method will help the 60-75% of you out their that struggle with motivation to get their finances together. Once you get rid of your smallest debt in a few months you will have the wind at your back and you will really start picking up steam financially.

There is no right or wrong way to get rid of credit card debt.  The traditional way of paying off credit cards has its merits but so does the debt snowball method.  Do not listen to anyone on the internet or in person that lives by only one of these methods.  It all depends on your particular situation and how driven you really are to put credit card debt behind you.

Selling covered calls is where an investor sells the call option of a company [which means the investor is anticipating the stock to perform badly] while owning the same number of shares of the company. This may sound contradictory, because it is! However it can also be an easy way to get a decent return on your money.

This is how you win with the method of selling covered calls: If a stock is trading at 50 dollars a share and you sell calls for the company to go to 60 dollars a share and the company only gets to 55 dollars a share by the time the call expires, then it should be a win-win situation for you.  You owned shares of the company that appreciated 10%, 55-50= 5/50= .1 X 100= 10%! Also, the calls you “shorted” are now worthless, which means you have to pay nothing back.

This is how you lose by selling covered calls: Lets use the example above but pretend the stock skyrocketed to 70 dollars a share by the time the call option expired. Yes, you did make a 40% profit on the shares of the company you owned, but the calls that you now have to cover are very expensive. You would end up losing your shirt with this scenario.

If you have extensive experience in the stock market and you know what you are doing, you can do well by selling covered calls. However most will simply fail in the long run by trying to attempt to do something that is way over their head. 90% of investors should just stick to buying shares of solid, profitable, dividend paying companies.

It is absolutely possible to make a living day trading, but it is not easy or recommended. If you haven’t yet, read this article, day trading for dummies, to get an overview of what day trading is exactly.

To me day trading is much more like gambling and much less like investing, I simply do not know what the price of a company will do in the short term, but there are some out their talented enough to make a living doing it, more power to them!

Do not fall for scams out their that claim it is easy to make a living day trading. They likely want you to either subscribe to their newsletter or buy their product, either way they are trying to make money off of you and they have no intention of helping you with your quest to become a day trader.

The stock market is not meant to supply individuals with money quickly. People who get greedy usually get burned. If you want to day trade for a living, think twice about it. I’ll be content with my 10% returns year over year!

What are penny auctions? Penny auctions allow you to have a chance to buy expensive products, like jewelry, TV’s, video game systems, camera’s, and much more for just a few dollars. You place bids on the auctions and in most cases, the lowest unique bid wins. TV’s that normally sell for 1000 dollars can be bought between 5-10 bucks, 500 dollars in cash has been won for 3 dollars…

How can these sites stay in business? Each bid costs the user one dollar, so if 800 bids are placed on a 500 dollar prize, the site nets at least 300 dollars. It is a clever idea and many of these sites are really starting to rake in the money.

Are penny auctions legal? Absolutely.

Are penny auctions scams? Well, it depends. You really can buy expensive items for just a few dollars, but more often than not you will waste your money buying bids that will end up being worthless.

The verdict: Penny auctions are “too good to be true”, but they are not necessarily scams. It is very easy to get addicted to auctions in which you can buy things at a 95-99% discount, so make sure you keep your bid buying in check!