Stock trading is a tough game. Discipline, commitment and patience are what is required at the beginning of your journey. When you can control your actions and emotions, you will be on the right track to trading success.

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A professional trader once told me “the way you act when you enter a trade will determine if you are profitable or not”.

Here are my top 10 tips to fast track your trading success.

1. Keep a journal – Keeping a journal of your thoughts and actions after each trade is a great way to hone in on any recurring issues you may be facing. A simple word document is fine for this and can literally take 10 minutes per day. This is great for keeping an eye on what you’re doing well (and what you’re not).

2. Avoid trading with a smartphone or smartwatch – Both of these gives you access to trade anywhere, any time you have your phone or watch. This seems like a great idea but it’s dangerous to do. It’s better to take time to research whatever you’re thinking about investing in before making your selections instead of making quick decisions based on a whim. Professional traders don’t trade high stakes on smartphones and watches; why should you?

3. Get help – There are many great traders out there. Find a mentor and follow their advice. This might end up costing something, but think of it as investing in you! There are many great training courses in trading that will improve your knowledge and make you a more skilled trader.

4. Backtest your trades – Backtesting simply means knowing the results on past trades you’ve made. It gives you an idea of your success and failure rate and tracks your trading progression over time. It will answer the question of what your potential future profit might be. This is a must if you want to improve your long term results as an investor.

5. Keep records – All businesses keep track of how their business is doing. This could include profit and loss records and day to day expenses. Recording your investment trading patterns is no different if you’re doing it for business purposes. Depending on how much you trade, this could take you as little as 20 minutes per day and will keep you from looking up in a month’s time and wondering where all your profits have gone.

6. Take a Break – This sounds like a really easy thing to do right? But when there is money to be made nearly every day of the year, people don’t want to stop. Like everything in life, sports, work, being a full-time parent, the mind needs a rest from time to time. Trading is no different than any other career. Turn the computer off periodically, even for a week, to relax the mind and come back feeling refreshed.

7. Don’t think about the money – This is easier said than done. It’s hard to take our mind off the money which is our reward in the market. Instead try thinking about your trading process; are you following your plan? Do you abide by your rules? Are you following the risk profile in your trading plan? Focus on how you trade. If all you can do is think about the money, you are probably risking too much and need to decrease your trade sizes.

8. Being Fit for Work – How can you improve yourself for trading? A lot of mental energy is required for trading. Late nights and a bad diet or lifestyle don’t bode well for the trading game. Fitness, good sleeping patterns, a good diet and some mind exercises are some of the disciplines needed to keep yourself alert and fit. Try implementing some into your lifestyle.

9. Network with other traders – Trading can be an isolated profession to take on. Try finding someone you can bounce ideas off. You might find they may be experiencing the same trading issues as yourself. They may also have some great ideas that you may not have thought of.

10. Review, cleanse and repeat – The best traders and investors don’t rest on their laurels. Trading is a continually learning process, and most of the time you’re learning about your own processes to figure out what works and doesn’t work. Take time to review the records we talked about in point #5. Understand your edge in the market and spend more time following these types of deals. Conversely, look at your losers and stop investing your time doing trades that don’t work. Make sure to address any issues you are having so you can maximize your time and income.

Some of these improvements have a lot to do with common sense but most new traders only have one thing on their mind; “money”. You have to realize there are other aspects of trading and that doing it right involves a lifelong learning process. If it was easy, every man and his dog would be involved.

Every day you should be asking yourself “What can I do today to improve my trading”. Review the ideas above; you will be pleasantly surprised at your advancement and your growing portfolio.

Digiprove sealCopyright secured by Digiprove © 2017 Mitch Mitchell

This is something a little different. Over 6 years ago I wrote a post titled 5 More Things To Know About Buying A House. It was the follow up to an article I wrote for a client who owned a housing blog that was, obviously, titled 5 Things To Know About Buying A House. That blog is now gone and, though I could probably try to find that post, I think it’s more important to write an almost entirely new blog post that incorporates some of what I’d written before and add 5 new things that I feel are important for potential new home owners to know.

flowers and house

The reason I’m calling these “real” things is because I have a guest post here from 2012 when I accepted them titled Top 5 House Buying Tips that, while not bad, only had one tip that I’d have ever written. Since I don’t accept guest posts any longer, I thought it was time to be real in the things you should consider before making such a crucial move.

1. Why do you want a house?

This is a very important question you need to ask yourself, or that you and your significant other should discuss. The process of trying to find the right house or having one built can be very tiring and stressful. You don’t want to put yourself through it if you’re not really interested in buying one.

I never wanted to buy a house because I’d rarely lived in one throughout my life. I was content with apartment living, and my wife and I were living in a very nice 3-bedroom apartment. What happened was within the first year after we got married her friends started putting it into her mind that we should buy a house. She mentioned it to me, even knowing my reluctance, and I decided I’d go ahead and see what it was all about.

Don’t buy a house because someone tells you it’s a great investment; that statement’s not true unless you’re buying a million dollar house. Even if your house appreciates in value over the years, you’ve probably put more money into the house that, along with paying your mortgage, will end up with you taking a loss.

Although I love my house now, if I’d never had one I probably would have been very happy; I’ll tell you why in another point further down.

2. Can you afford to buy a house?

Wanting to buy a house and being able to afford one are two different things. I’m going to tell you a couple of dirty little secrets that you might not hear anywhere else.

The first secret is that the first realtor you visit to see how much house you can afford is probably going to give you a figure that you really can’t afford. When my wife and I met ours, he did some calculations and said we could afford to buy a house as much as $275,000. At the time, our combined income was around $75,000 a year. That didn’t make any sense at all to me, so we never pursued any houses close to that amount, although we did look at a couple just to see what we might have been missing (some of them were fantastic!).

kitchen

The second secret is that if you’re a new home buyer you’re actually going to end up paying for two things; that’s where it gets tricky. The first is actually the mortgage; the second is escrow. Escrow is what you pay to whomever finances your home loan to pay your state and property taxes.

Say you’ve been told that your mortgage payment is around $575 a month; that sounds pretty affordable doesn’t it? Depending on where you live, your monthly escrow could be anywhere from an extra $300 to $1,000 a month. Most of the time no one tells you about that part of your monthly payment until you’re sitting down getting ready to sign the papers; talk about sticker shock!

The best way to figure out if you can afford an house is to take what you’re paying for rent and double that. Once you’ve done that, look at what you’re paying for your utilities and, unless they’re included in your rent already, double that also. All your other normal bills will pretty much stay the same, so looking at that initial figure will give you a quick idea of the kind of money you might need to pay for a house you’ll like.

By the way, to be fair, some of this will depend on what interest rate you can qualify for, how much you can put down up front, and how energy efficient the house you buy happens to be. Still, it’s a nice guide to use when thinking about your monthly outlay for your mortgage.

3. Be prepared to look at a lot of houses.

I thought I had it all figured out; I was going to look at 3 or 4 houses at the most and find the perfect one in the bunch. I turned out to be kidding myself.

We ended up looking at 14 or 15 houses over the course of two years. Each house had at least one thing we didn’t like; some had way more. The problem is that it’s hard to tell a realtor what you actually want if you don’t have real experience in explaining what you want in a home. I hadn’t lived in a house in more than 15 years and my wife hadn’t lived in one in 8, and since neither of us had experience in owning a home we didn’t have a lot of information to give to any of our realtors.

That’s another thing; we ended up with 3 different realtors… and even then we ended up finding a home on our own by going online. They took us to funky styled homes; homes where people never cut the grass or took care of the landscape; homes with a lot of trash and garbage that would have taken a small fortune to get into shape. We saw a lot of small homes and a couple of very large homes that were outside of the budget we gave. And one of the realtors we only used once because… well, she got on my last nerve! lol

You won’t believe how tiring house hunting can be. You’ll be drained from the searching, even though when you first start out it feels exciting. You also won’t be seeing a house a day… be glad for that. Try to think about all the features you want in your new home: how big; how many bedrooms; finished basement or not; garage, two car or not; large or medium sized kitchen; one story or two; big, small or no yard; general preferred layout; neighborhood; price range. Even that might not be enough, but it’s a good start.

4. Other than price, your most important preference should be neighborhood.

No one else will tell you this, so let me be the first. I mentioned above how my wife and I looked at a bunch of houses, yet in the end we found a house online that we wanted to look at, which ended up being the one we bought.

Out of all the houses we looked at with the realtors, only 2 of them ended up being in neighborhoods we actually wanted to live in. When I look back on what we described to the realtors, the one thing we never talked about was where we wanted to live. We were thinking price and space and little else; that was a major mistake and a big time waster.

bathroom

The thing is that I knew the neighborhood I wanted to live in because I actually “knew” the neighborhood. I didn’t want to live in a place I didn’t already know; that’s not something that bothers a lot of people but it was one of my peccadilloes. If you don’t know the neighborhood you need to research it pretty thoroughly before deciding to move there.

If you have kids you’re going to want to know what the schools are like. You might want to know how close you are to grocery stores or restaurants. You might want to live closer to people or be fairly secluded. Do you want to live on a dead end street or a cul-de-sac? Do you want to live in a full development or one where there’s lots of land where new houses will be built? Quiet or busy street? Parks, places to walk or bike, rivers or lakes, entertainment… it’s all about quality of life. True, you can drive anywhere if you have a car, but if you have a lot of what you want in your neighborhood you’re going to enjoy life more.

5. You’re going to need even more money after you move in.

This is the point I alluded to up in #1. It’s the one point that most people either never think about or underestimate how much they’re going to need or want to have.

I thought I was brilliant when I planned for an extra $15,000 to spend once we moved into our house. It turned out I wasn’t even close. We purchased a pre-existing house that seemed to have everything we needed and wanted. As we were moving in, we realized that not only were there things that had to be done but a lot of things we had to purchase.

Even though we had lived in a 3-bedroom apartment, we moved into a 5-bedroom house where it turned out we didn’t have enough stuff to put into all the rooms. We said we were going to go minimal; that didn’t happen. We also had to do a lot of maintenance things that the inspector didn’t either bring up fully or didn’t explain to us how much these things might cost (although it’s possible we didn’t understand what he was saying as new homeowners).

We needed a new roof. We had to paint every room in the house. We had to hire someone to clean out the basement because the previous owner had 3 cats (ugh; the smell…). We had to cut down some trees in both the front and back yard. We had to bring in an electrician because parts of the house weren’t wired properly. We had to have part of the front of the house redone because the foundation wasn’t as strong as it should have been. We had to buy things like lawn mowers and snowplows because we didn’t need either of these things while in the apartment. We had to buy some new rugs, and we needed to replace half of the windows. All of that was in the first 6 months of owning the home!

You might fare better if you have your house built from scratch, but recognize that will cost you more money than buying a pre-existing home. At least you’ll get to select all of your own appliances, and you’ll probably not need to spend a lot of money once you move in but your costs will be much higher across the board. Can you see why I said I’d have been happy if I’d stayed in an apartment?

6. Don’t get pushed into buying a house if you’re not feeling it.

Realtors are taught that many people will suffer from what’s known as “buyer’s remorse”, so they’ll work hard to encourage you to buy a house that you might have some hesitations on. Stick with your feelings because a home investment is not only costly, but it’s a long deal, the longest arrangement you’ll ever enter into other than marriage.

ranch house with woods

My wife and I looked at one house that was pretty nice… and small! All the fixtures were pretty new and the house didn’t look like it needed any work, but it was in a crowded neighborhood where all the houses were not only pretty close to each other but the backyards were pretty small and close to the houses in back of them. Also, the hallways were fairly narrow, and neither my wife or I were (or are) tiny people.

However, the realtor loved the house for us (and her commission) so we found ourselves hours from looking at this house sitting with her and the real estate lawyer she had in her office getting ready to sign papers to buy it. That is… until I looked at my wife and said I wasn’t sure I liked the house. She said the same thing back to me, and the shock on the face of our realtor and the lawyer almost made both of us laugh. It was after that experience that I went online and found the house we eventually purchased; what a horrible mistake we almost made because we almost didn’t stand up for what we wanted.

7. Make sure you send in your own inspector and make sure you understand what they’re telling you about a property.

Realtors will recommend inspectors for you, and I’m not saying that they’ve got a cozy relationship with each other, but you’ll do better finding your own. Once you do that, when they give you a report make sure you ask them what they mean by some of the things they say. This is something I touched upon in point #5.

Often they won’t give a red mark to something specific, but they’ll indicate something that’s less than being totally positive. Those types of things could end up costing you a lot of money later on, so it’s best to know up front what’s going on. Don’t even be afraid to ask questions and keep asking for more details; remember, buying a house can be a long term deal.

8. Even with disclosure laws, you might not hear about every problem a house has.

A homeowner might not tell you that the roof leaked during a major rain storm, especially if it doesn’t leak every time it rains. The same goes for flooding in the basement. They might not tell you about the nasty habits of their pets (remember the cats) or that the heating ducts might not be sealed properly. You might not know that the water heater or furnace are on their last legs. It’s possible that many of the appliances are ready to die (these are things your inspector won’t check).

If you ask a lot of questions and get false answers, which you’d know later on, if you document everything you’ve been told, you’ll have earned some rights of protection. Sometimes you might have leverage to either get some things repaired before you move in or you can dicker for a reduction on the cost of the house. If you don’t ask questions, it’s all on you.

9. Know your own credit report and credit score.

Even if you’ve been approved for a loan by a realtor, the mortgage interest rate you qualify for might not be up to snuff because of your credit rating. Although I think the concept of credit scores are worthless overall, lenders still use these things, and you might not get that wonderful 3.25% mortgage interest rate you’ve been hearing about if they’re worried about your credit viability.

If you know what your credit is like and it’s not top notch, you can always put more down on your home to get a better interest rate. The caveat is that if you’re credit rating isn’t all that good then you might not have the money to put down up front in the first place. This part takes you back to point #2; can you really afford a home?

10. Even if you’re having a house built, make sure you have everything agreed upon down on paper.

When my parents decided to have their house built back in 1986, they were dealing with a salesperson that ended up having a bad reputation later on. However, my parents weren’t the trusting sort, and it worked out in their benefit.

He promised my mother a lot of things and she made him write them all down. When the company learned about the kind of salesperson he was and fired him, they met with my parents and said they couldn’t get all the things he’d promised them. Mom produced the paper that he’d signed guaranteeing all those things she had asked for and she got them, much to their dismay. As Judge Judy used to say, if it isn’t written down it didn’t happen.

Considering buying a home needs to be taken seriously. Unless you’re extremely rich, don’t just dream for what you want. Put the early work in, then get ready for the real work. If you do it right, you won’t end up dealing with a lot of problems and issues later on.
 

Digiprove sealCopyright secured by Digiprove © 2017 Mitch Mitchell

Back in November, I had something strange happen. I’ve had life insurance for a long while now, but for some reason I had more money taken out of my account than expected. I called my insurance agent and left a message for him to get back to me. Instead, someone who reports to him stopped by the house a few days later and we sat down to look at my policy.

Young apneist
Seif Alaya via Compfight

It turns out I actually had 3 policies with them! That shocked me because I always thought I only had 2. It seems that when my account was given to two other people after my first agent left, they set me up with another policy that I had no recollection about.

We did some paperwork to get rid of one of the policies. It wasn’t the oldest or newest but it was for the least amount of coverage. While we were going through the process, my agent asked me how much coverage I wanted and why, and what I was hoping to get out of them. Based on this conversation I’m going to talk about the concept of how much life insurance you need or think you might need.

First, you need to think about what you’re looking to cover. The majority of life insurance policies are for less than $15,000, and that’s to cover any funeral expenses so that the family doesn’t have to worry about how to come up with the money for it since funerals can be expensive.

If that’s all you want then you’re just fine. But what if you want to make sure your family has some kind of financial protection if you’re gone? You might want to help pay off the house, or have enough money to put the kids through college, or even put enough away to help pay for your retirement down the line.

Second, you have to come up with an appropriate amount for all of these things based on what you’re hoping to cover. Do you want your family to have the equivalent of a year’s worth of your income if you pass away? What about extras if your demise is caused by something like a plane crash? Are you looking to help your money grow like an investment? Are you thinking ahead that you might want to borrow against the policy?

This one is important because it can be seen as the “dream goal” or something practical. If you think you might want or need to borrow against it, you’ll learn that it’s tax free, but could come with the caveat that you need to replace whatever you borrow against.

You also might want to purchase a policy that allows you to change your needs as time goes by. For instance, if you buy a policy when you have young children you might want one with a higher death benefit, but once they’ve grown up and moved out of the house you might want to reduce it. At the same time, maybe you bought a policy that has grown to the point where it’s covering the monthly payments on its own, so you never have to think about it.

A girl should be two things: who and what she wants...
Well-Bred Kannan (WBK Photography) via Compfight

All of these are considerations you should think of before you move to step #3, which is contacting an insurance agent and setting up a place and time to meet. You might think this should be step #4, believing that the third step should be considering how much money you have to spend. In this regard I’m going to tell you that worrying about cost is pretty much a waste of time. Why?

Like most big purchases, you shouldn’t even consider buying life insurance if you don’t have any disposable income you can part with without hurting yourself. Insurance is one of those things where it’s for protection, not anything tangible. Most people don’t get to be around to “enjoy” the benefits of their life insurance policies, unlike buying a car.

Yet figuring out how to pay for it is just like a car. You have to make monthly payments, and the only difference between life insurance and a car or house payment is that some policies you’ll be paying on for the rest of your life; sounds ominous doesn’t it?

The reason you talk to an agent first is that, for the most part, it’s hard to come up with a payment amount on your own without talking to someone. True, there are some websites that have widgets on them that can help you estimate what your payments might be life. What they don’t tell you is how much extra fees you’re going to get charged will be; sometimes your final amount isn’t anywhere close to what you thought it was going to be.

How much life insurance am I paying for? I’m not going to give the exact amount because… well… it’s none of your business. 🙂 However, I will tell you that if I die before age 65, my policy will pay off the house, no matter how much is owed on it at the time; that’s covered under one of the policies. Strangely enough, if I make it to age 70 it will expire; that means I’ll have paid for it all these years and get nothing back from it. That part stinks, but it’s nice to know that I’ve taken care of my wife up to that point.

The other policy is growing in value, which I can borrow against, but it has a guarantee that no matter how much is in the policy, it will cover the amount of a death benefit up to $10,000. If I don’t touch it and continue paying into it, the policy will be worth more than $50,000 if I reach age 70, as long as I never touch it, and it will continue to grow if I want it to. The best part about it is that if my wife predeceases me I’ve named other beneficiaries to the fund, since I have no children.

The answer to how much life insurance one needs depends on what you want to use it for. Regardless of that, the reality is that you need life insurance, and you should purchase it at a young age, before you get ill or injured and have to pay more for coverage than you do before any of those things happen to you.
 

Digiprove sealCopyright secured by Digiprove © 2017 Mitch Mitchell