Hey Guys,I am a graduate student and for a class I just started a Blog on personal finance. I was hoping some experienced and KIND folks at the Fool boards could check out my blog and let me know what they think.I am new to writing and to Blogging so I would appreciate your feedback and comments. You can comment on the blog itself.thanks much,Here is the addresshttp://www.gamblerruin.com/here is an example:7 Steps to Financial Security Step 1Pay off Credit Cards and high interest debtStep 2Create a reserve account for EmergenciesStep 3Buy Life InsuranceStep 4Create a Will and Power of AttorneyStep 5Start Investing in the Stock Market with an Index FundStep 6Become a perpetual Investor and SaverStep 7Invest in yourselfWelcome to the Gamblers Ruin Blog and thank you for visiting us.I have been a passionate investor for many years and I am a firm believer that there is no better place to increase wealth in the long term than the Stock Market. After reading a million plus words on other blogs, financial websites and books, I decided to start a blog of all that I have learnt or will learn in the world of investing and finance. I am using this medium to both investigate and comprehend the world of finance.What’s with the name?Gamblers ruin is a theory of probability that essentially means that if you play (read gamble) long enough, you will go bankrupt. The theory basically states that whoever starts with a larger pot has a greater chance of winning. Many people consider the stock market to be a supersized gambling machine with unbeatable odds. So Gamblers ruin was the perfect name to start a blog on finance. I truly believe that the stock market is NOT a gambling machine but a real vehicle for achieving long term wealth creation.Where do I start?I have made a list of Steps that are a good starting point for a journey to financial nirvana. Although, I came up with 7 to begin with, I am sure there are many more steps that make the journey even smoother. These 7 steps are:Step 1Pay off Credit Cards and high interest debtThis is a no brainer. If you have Credit Card balances that are outstanding with interest rates higher than 0%. Paying them should be the first step to financial independence. If you are paying interest on your balances, paying off your Credit Card guarantees that rate of return.Step 2Create a Savings or Money Market account for EmergenciesCalculate your monthly expenses into a dollar amount; this includes Rent/Mortgage, Insurance, Groceries, Utilities and other monthly expenses. Multiply this amount into 6 and you have your amount to be put into a Savings or Money Market account. This account is for EMERGENCIES only, like loosing a job or other real emergencies. This step is essential in becoming a good investor; if you have money for emergencies you are not likely to sell a stock that has lost a % of its value as the market gyrates downwards, when in reality you should be buying more of the stock.Step 3Buy Life InsuranceFor people with families, this is a must do. If your employer offers a group policy at a reduced rate, that is usually the best deal in life insurance. Life Insurance is generally sold to people by an eager sales force, very rarely priced and bought by individuals themselves. The amount of Life Insurance depends on personal liabilities, debts that your surviving family members will have to settle or live with if you are to pass away. For e.g. Mortgage. For Single people, this may be an optional step.Step 4Create a Will and Healthcare Power of AttorneyAlthough talking about a will and Power of Attorney may give some people the creeps, this is a very essential step to becoming a master investor. Although there are many resources available on the web, like do it yourself kits and other software packages that generate a will using a template, this is a step best done by a professional or attorney who deals with estate planning for a living. It is worth the few hundred dollars to get this done by someone who is well versed in the laws of the State of your residence.Step 5Start Investing in the Stock Market with an Index Fund or ETFAccording to the Oracle of Omaha, Warren Buffett, one of the best ways for new investors to invest in the Stock Market is through an index fund. The fund that I use is the Vanguard Total Stock Market Fund or VTSMX. This immediately diversifies a portfolio as it invests in the entire Stock Market. The rule of thumb when investing in the index fund or ETF is that if you are investing a certain amount per month, it is better to go with a fund, but if you are investing a lump sum, the ETF may be the best and cheapest way to go. The ETF for the Total Stock Market is VTI. The 5 year returns for the VTSMX are around 15.56%. Other ETF’s like SPY can also do the trick.Step 6Become a perpetual Investor and SaverThere is a power in perpetual investing; it helps take away the anxiety that may accompany investing in stocks for some people. Putting new money in each month into your portfolio, in good markets and bad creates for oversized returns in the long run. As many experienced investors have learnt that the best bargains are found in a bear market. The short term pullbacks can work to the advantage of the individual investor if you become a perpetual investor.Step 7Invest in yourselfAs Ben Franklin once said, “An Investment in knowledge pays the best interest”. Investing in an advanced degree or learning new skills may add substantially to the pocketbook. In an environment where we are not only competing nationally but globally getting ahead may mean learning new tricks and becoming more valuable by educating yourself.
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