IFB153: Cruiselines vs Autos vs Tesla
Announcer (00:00 ):
You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now,
Dave (00:30 ):
Alright folks, welcome to Investing for Beginners podcast. Tonight. Andrew and I are going to go back to archives and we’re going to pick out some more questions. We’ve got some great questions. We recently, and we have had some great guests so we haven’t had chance to answer them, but we’re going to answer them tonight. So we have three of them. We’re going to talk about a little bit tonight. I’m going to go ahead and read the first question and Andrew will go ahead and give us the answer and we’ll kind of do our little good, give and take. So here we go.
Dave (01:04 ):
So I work for Walmart logistics and they offer a company stock option. If I buy $1,800 worth of stock in a year and they match me $300, I own about 13 shares before I ever started taking investing seriously. Putting Walmart in the VTI, I’ve got a number in the mid four hundreds. Do you think this money is better off somewhere else or do you feel that extra $300 off sets a lack luster? BPI score? Andrew, what are your thoughts on his question?
Andrew (01:32 ):
So just to give some perspective to new listeners. When the reader, the listener is talking about VTI, that is a formula I created called the value trap indicator. Basically it takes the financials from a company and spits out an numerical value based off of that. If it’s low versus if it’s high, that signals for example, if it’s above 800, then that signals a strong sell. So the mid four hundreds that’s relatively high for a stock. So to, I guess there can be two different parts of this question. The first part, getting company stock options. In general, it’s a good thing to participate in, particularly if they’re giving you any sort of the match. So a $300 match on $1,800 of stock, that’s like a 16.6% return right off the bat. You could find out in the stock market. But I don’t think most of us can find that reliably, consistently over and over and over again, particularly when you consider that over this great economic boom we’ve had in the United States over the last 100 years, since about the 1910s and 1920s the average stock market return has been around 10% a year.
Andrew (02:54 ):
So you’re getting higher than that just from the company match. So I would take advantage of as much as you financially comfortably can. And you know, even if you have a stock that you feel is suboptimal compared to a different stock...
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