Be Wealthy & Smart

Learn all about our trip to Naxos, Greece aboard a 110 ft. yacht which was televised this week and last on the Bravo TV show, Below Deck Mediterranean. Note: This podcast has NO financial information in it and is just about our trip! We appeared in "Episode 9: Fever pitch" on June 28th. Hear me discuss the crew, eating Ben's cooking, wave runners, the tender to the beach, how Bobby carries us, Ben cooks s'mores. How were the s'mores with strawberry peeps? Ben couldn't source the ingredients in Greece. We appeared on "Episode 10: Charter from heaven, charter from hell?" on July 5th. Next day breakfast, wave runners, jeweler, excursion on tender with Bryan and Tiffany, change for dinner, violinist, dinner (and unfortunate combination of motion sickness med and alcohol). Could use some love on my FB fan page (www.Facebook.com/LindaPJonesFanPage) or Instagram page, @lindapjones. Breakfast, give largest tip of the season and said good bye. Hannah says we are her favorites and she loves us! She misses us already when men acting like "frat boys" come on the yacht. More photos and stories on my blog. www.lindapjones.com/blog

Learn from reinvention expert Pamela Mitchell about how to find your passion, become an entrepreneur and find success. Pamela was called "The Queen of Reinvention" by Fortune magazine. She's a former entertainment exec-turned-coach. Pamela Mitchell is founder and CEO of The Reinvention Institute and host of The LiftOff Project podcast. As the nation's premier expert in reinvention, Pamela has appeared on CBS, CNN, NPR, MSNBC and the Today Show, and has been profiled and quoted in top publications including The New York Times, Businessweek, TIME, Men's Health, and Real Simple. She is the author of The 10 Laws of Career Reinvention: Essential Survival Skills for Any Economy, a Harvard Business Review Top Shelf Recommended Pick. Links to the mini-course and Pamela's book can be found at www.lindapjones.com/careerreinvention.

149: Crazy Surprise! Learn what's going on as I pull the curtain back and let you in on what's happening in my personal life. If you've been listening to me for a while, you know I stick to business and get to the point pretty fast. I want you to get value from my podcasts. Today is a little different because I am letting you in on what's happening behind the scenes in my life. The exciting news is on June 28th and July 5th, I'm going to be on a new reality TV show called Below Deck Mediterranean. It's a new show, the first season of a spinoff. I've been a fan of the original show, Below Deck Caribbean, for years. Below Deck Med is about the crew of a yacht in Greece called the Ionian Princess. They take on new charter guests and the show follows how the charter goes, the relationships the crew has and the drama that ensues. This Tuesday I'll be on the show as a charter guest. I'm with 5 entrepreneur friends/clients and we had an amazing time. I can't give details of what we did because I agreed to keep that confidential until after the shows air, but I can tell you I had an amazing time cruising in Greece! You can see some initial photos of our trip to Greece on my Instagram before we got on the yacht. My Instagram is @LindaPJones and there's also a @BeWealthy&Smart Instagram - check it out while you're there. It's an entirely new crew on the show except for Chef Ben Robinson who is also on Below Deck Caribbean. Things are definitely crazy and racy as the crew of 12 thirty-somethings have their share of drama and hookups! If you want to know more, you'll just have to watch on Tuesday, June 28th and July 5th on Bravo TV at 9pm ET/PT, 8 CT. Boy have I been shocked watching the show and seeing what happens with the crew below deck! I have to warn you, I didn't expect to see what's been going on at all! All was calm above deck! Watch it and let me know what you think! I'll be back with some more bonus episodes this week. Hint hint.

Learn why the Brexit leave vote won, what it means for Europe and the US and the impact it will have on investments going forward. Brexit is the term for the British exit from the European Union or EU. It voted 52 to 48 to leave. This impacts things like trade tariffs, migration, auto and car regulations. The politicians engaged world leaders, celebrities, and everyone they could to vote to remain. Really about 3 things: 1. Unelected government in Brussels having too much control. Non-elected leaders in power. 2. Immigrants a problem - more than 1 million immigrants have poured into Europe. 3. People never voted for, and do not want political union and the interference the European Union. Do you get that? These leaders in power were NOT elected by the people. They took power and control without elections and in many cases without disclosing who is really in control behind the scenes in Brussels. May cause problems for other European countries. Scotland may want to leave UK. Spain may take control of Gibraltar. Catalonia may leave. We don't know if the EU will survive. Even the Pope is saying European countries need to figure out how to work together. PM David Cameron resigned effective in October because he campaigned for Britain to stay and since he lost the vote, he felt he should leave. Boris Johnson, a member of Cameron's Conservative Party and former Mayor of London voted for independence and some people speculate he may be the next PM. In general, it is believed young people voted to stay and the older people voted to leave. Interest rates low and headed lower. Currencies may be headed lower and companies who trade may have to sign new agreements. This will be negotiated for 2 years between independent Britain and the rest of Europe. It will likely get worse before it gets better. Unsure what the banks will do and if it will negatively impact trading partners. According to Vox News: "If you are Nissan or some other car producer with major production in the UK, today, the same safety standards and environmental standards allow you to sell everywhere in the European market," Jacob Funk Kirkegaard, an economist at the Peterson Institute for International Economics. But if the UK leaves the EU, "you would no longer be able to sell into other European markets, not because you face a small tariff but because you'd have to go through another set of safety certifications. This kind of thing would be repeated in every industry you can think of." Financial companies are already talking about moving headquarters from London to Germany or France. In 1958 EU was 6 countries, 28 today. EU loses the 2nd largest economy. Pound was down 8% today to a 30 year low. Will be good for trade because English goods will be more affordable. European financials (banks) are down 5 - 16% which is worrisome. Deutsche Bank is one to watch due to the derivatives it holds. Some people speculate a downgrade of it's credit could cause another Lehman moment. According to Martin Armstrong, the real problem with the Euro is when they created the Euro, they did not consolidate countries' debt. Individual countries having economic problems and high levels of debt causes problems for everyone because they don't want to be responsible to bail out other countries, such as Greece. They also have a one interest rate policy for the EU, which means the ECB (like our FED) can't provide stimulus to just one country without doing it for all 18 euro countries. Such confusion, oh my! The EU agreement allows for 2 years to negotiate an exit, so expect it to be a long road ahead. In the end, this was a vote for democracy, for the people, for freedom and independence from politicians who took power without being voted in. The EU was a governing body who took control, for example with immigration and having to take Middle Eastern refugees. The terror attacks in Paris and Brussels are said to have been a deciding factor for the exit. How does this impact your investments? Today the Dow Jones Industrial Average was down 3.39%, the S &P was down 3.58% and the Nasdaq down 4.12%. -Expect multinationals who trade a lot with England and Europe to be down until they have more clarity. Boeing was down 5.26% today, Starbucks down 2.58% and Apple was down 2.81%. -Expect a continued flight to safety. -Expect money to flow into the dollar and make it stronger which could contribute to a recession here (listen to my podcast #144 about "7 Signs Why a Recession May Be Looming". -Expect money to flow into US markets for safety and stability. -Expect precious metals to move higher as an alternate safe haven - gold was up 4.91% and silver was up 2.43%. Mining stocks' ETF (GDX) jumped 5.92% today. -Inverse ETF SDS (double short S & P) was up 7% today. -Expect increased volatility in stock markets. The VIX (VXX) was up 24.32% today alone! This could spill into our markets and cause a drop…if it does, it's a buying opportunity because it will be short lived. Longer term I see a drop here and then more money coming from overseas that will eventually cause a big increase in classic stocks like those in the Dow. Keep some cash available and watch out for the rise in volatility. Keep a cool head because there's likely to be panic around you.

Learn how to analyze stock performance by checking the 1, 5, and 10 year performance numbers. Research is from FORTUNE magazine, June 15, 2016. Too often investors pick a stock that has only done well for one year. Look at the longer-term, especially 3 and 5 year numbers or 5 and 10 year numbers. I'm sharing numbers from 2015, but my point is to get you to think differently. What companies have done well for one year? 5 years? 10 years? What stocks have had excellent performance for 10 years? Do other research, but these companies should be looked at and considered if you're investing in individual stocks. The performance is all double digit. I will share the chart on my website show notes for podcast #147 so I can upload a photo of the chart.

Learn what smart moves LeBron has made that are very different from other successful pro athletes, high-paid actors and lottery winners. Congratulations to the Cleveland Cavaliers for winning the 2016 NBA Championship! I've been reading about LeBron James and what a smart businessman he is. I have to agree. 1. He knows a good deal when he sees one. LeBron signed a contract right out of high school. Under the NBA's collective bargaining agreement, he signed a 3-year deal worth a maximum $12.96 million. 2. He keeps his options open. "Next year, LeBron is expected to have the highest salary in the NBA for the first time in his 13-year career. He knew this in 2014, which is why he became the first megastar player to take a one-year contract (with a one-year player option) in the midst of his prime, and why he did the same this past summer, positioning himself to cash in on the upcoming salary-cap spike." 3. He takes equity positions. When a headphones company called Beats came to him in 2008 looking for marketing help, LeBron put an equity stake ahead of making immediate cash. He gave pairs of Beats headphones to his Team USA teammates. Perhaps he knew images of the product at the Beijing Olympics would help launch the brand. Beats later sold for $3.2 billion to Apple, and James made tens of millions. 4. He thinks long-term. Just signed a lifetime deal to wear Nike shoes. It is believed to be the first lifetime deal in the shoe and apparel company's 44-year history. No disclosure on the amount of the contract. Also, there are no personal blemishes to his reputation. 5. He thinks outside the box to create new roads less traveled. His production company, SpringHill Entertainment, currently has deals for shows with Starz, Disney, Showtime and NBC, and a development deal with Warner Bros. He's not afraid to think of new projects and to do something that hasn't been done before. 6. He thinks like an owner. That's why he recently left McDonald's to become an investor in an upstart pizza chain, and why he has cut back on commercials. Harden is getting paid for pitching Taco Bell; LeBron is trying to make his money from owning a franchise like Taco Bell. The other big-business announcement James made last week was a $15.8 million investment in Uninterrupted, a social-media platform he and his partners created last year that allows direct interaction between athletes and fans. 7. He contributes to charity. LeBron set up a family foundation and has a program called "I promise", paying college tuition to qualifiers. His foundation will donate $41 million to pay for 1,100 kids. The irony is he skipped college to join the NBA, but it certainly paid off for him. Now's he's giving back in a profound way by investing in young people and providing a way for them to have a better life.

Today is Listener Question Day! Brian asks: Dear Linda: Thank you for podcast #125, which brought me back as I began to drift into investing outer space. I want to know how earnings forecasts are made; what are they based on? Are earnings forecasts the same as earnings predictions? Are they based on past earnings? Because I didn't think we used a company's historical data when looking at current market trends. Thanks, Brian Thank you for the questions, Brian. Earnings forecasts are a compilation of information that is obtained by stock analysts at brokerage firms from a company's management and their own estimates. As you know from my podcast "What makes stocks go up?", earnings are what matters! Analysts are called "sell-side" analysts because they are "selling" their research to large pension funds, portfolio managers, and other institutional managers. Their job is to estimate what a company's quarterly and annual earnings will be. Since earnings are reported quarterly, 4 times a year the actual numbers are compared to the consensus's numbers. To calculate them the net earnings are divided by the number of shares outstanding, for an estimate per share. For example, $1.20 earnings per share or EPS might be $12 million/10 million shares). Coverage is initiated with either a "buy" or "hold", rarely is the term "sell" used because often the investment banking side of the firm may have a relationship with the company and wants to support the stock price rather than encouraging selling it. The consensus is made up of an average of all the analysts estimates. For large cap stocks that can be over 100 analysts and for a small company it may be only a few. Once the consensus number is calculated, sometimes there is a "whisper" number that emerges which is a rumor of a different number (often higher) than the consensus. If a company is growing quickly, a whisper number used to get thrown around indicating the company is doing better than was forecasted and as a result it may boost the stock more. Fair disclosure laws (known as Regulation Fair Disclosure or Reg FD) made this illegal and companies now have to give all investors access to this information at the same time. A publicly traded company has rules about when they can release information to the public, so analysts fill the void and try to calculate what the earnings will be. They can meet with management and talk about sales projections, stores opening and closing, overseas trends, etc. and the analyst then puts the pieces together to come up with an estimate of what he or she thinks earnings will be for the quarter and the year. It's a big deal when a company misses estimates by having slower growth or lower earnings than were expected. This happened to Apple recently and they lost $47 billion in market capitalization in one day. That's because money managers manage their portfolios by following what stocks have increasing earnings and a stock becomes a real darling if it is increasing earnings at an increasing rate (but you already knew that because you've been listening to me). You can listen to the podcast on Apple in podcast #125. When a company misses the consensus earnings estimate, even by a penny per share, it's a big deal. A stock can drop like a rock in that case because the thought is that the company's growth is slowing, which means it might be time to redeploy the money invested in it into a company that is growing faster. To answer your questions, yes, historical data is considered when analysts are trying to predict the future. They will take into account what I mentioned earlier and try to get as close as possible to the actual numbers. When actual earnings reported beat the forecasted earnings, usually the stock rises because it has "exceeded expectations". If it meets consensus earnings, it often will sell off a bit because it only "met expectations", especially if the stock price has risen going into earnings season. That's an old Wall Street expression known as "buy on the rumor and sell on the news", which is what often happens during earnings season. One bad quarter can impact a stock's price negatively for fear that it's a trend of future slower growth. However, if there's a good explanation such as a colder winter with more snow caused shoppers to be snowed in and stay home thereby temporarily depressing sales, there's some leeway allowed. But if there's a trend of slower sales that persists and turns into lower earnings, it will eventually be reflected in a lower stock price. The best thing to do is keep finding those companies that have earnings rising at a rising rate. That company will continue to exceed expectations until they don't. Hopefully by then they are the size of Apple's market cap and one of the largest companies in the world. Before I go I'd like to share some listener reviews. Thank you for subscribing, rating and reviewing the show! You can also share the podcast with friends by clicking the little box with an up arrow that is to the right of the little gear wheel symbol on your phone toward the top of your screen. I really appreciate you letting your family and friends know about the show! You're so kind to me in the reviews and honestly sometimes it's a little embarrassing to read them out loud, but I want to thank the people who leave me reviews. It means a lot to me and it helps more people find the show.

Learn 7 Signs Why a Recession May Be Looming. 1. Corporate profits are tanking. Corporate profits have been weak since late in 2014 according to JP Morgan economist Michael Feroli. Growth in corporate profits has been negative since Q3 and Q4 of 2015 and flat Q1 of 2016. The three main reasons corporates are under so much pressure are the strong US dollar, collapsing oil prices, and rising wages. "Declining corporate profits as measured by US equity EPS have been closely followed by, or coincided with, a recession 81% of the time since 1900," said Dubravko Lakos-Bujas at JP Morgan. Paul Mortimer-Lee from PNB Paribas projects that the risk of recession over the next 12 months is somewhere between 40% and 50%, depending on how terrible the incoming labor market data looks. Some people speculate there is little to no earnings growth expected globally. 2. Unemployment report Only 38,000 jobs were added - far short of the 160,000 estimated. 3. The dollar has been strong since 2015. Strong dollar makes US exports more expensive. Other countries' currencies are pegged to the dollar so it hurts their exports too. 4. ISM (manufacturing) report has been neutral. An indicator of 50 is neutral. March was 51.8, slightly expanding. Last 5 months were over 50, prior 5 months under 50. 5. Construction is declining. -1.8% is the largest drop since 1/11. 6. Baltic Dry Index (shipping) is very low. BDI measures iron ore and coal. More ships built to transport iron ore and coal have been scrapped so far this year than in all of 2014 as the commodity slump stunts the life expectancy of bulk carriers. Twenty-nine Capesize vessels with an average age of 21.4 years have been turned into scrap through March 4, according GMS Inc., the world's biggest cash buyer of ships for recycling, citing data from Clarkson Plc. That's a faster pace than the 93 destroyed all of last year and the 25 in 2014. The Baltic Dry Index, a measure of what shipowners earn from transporting commodities, has plunged to the lowest in more than 30 years amid slowing Chinese demand. 7. Consumer spending is a bright spot, or is it? Biggest increase in 6 years (mostly autos). Scary trend of auto loans for 125% of car value.

Learn why wealth building requires investing, that frugality is not what is going to make you rich and the steps to move forward. In financial articles, I often hear people say the secret to being financially successful is "spend less than you earn." Spending less than you earn will obviously keep you out of debt, but it won't make you rich. People miss the point. Spending less and earning more are not the crucial parts of wealth building. (This is what drives me crazy about the frugality movement). Its really all about investing. Remember the "6 Steps to Wealth" and step 4 is investing in a money engine and step 5 is compounding at a high rate? Those are the crucial steps to wealth building! So the question becomes, how are you investing? What are you investing in? Why are you investing in those things? Have you consciously thought, "where is the best place to invest now?" meaning "where is the place that is going to grow my money best or at the highest rate?" Because THAT is how wealthy people think. Then they look for those opportunities, opportunities to compound at the highest rate possible without taking foolish, undue risk. It's not about gambling. Or buying a lotto ticket. Those are things that leave winning to chance. It's about controlling what you invest in as much as possible to build more wealth. Obviously you don't "control" a stock, but you do control choosing a stock or the company you're investing in. That's why people join the VIP Experience, because they want to know where I think the best place to invest is. www.lindapjones.com/joinvip Action steps included.

Learn where you're wasting money, what's really causing problems with saving money and 6 ways to have more money at the end of the month. This is listener question Friday. Here is our question for today: Linda, I make a good income but at the end of every month I don't have any money and I can't seem to save money. What can I do? Thank you, Chris Well Chris, this is a common problem. Many Americans make a good income yet have nothing to show for it. An article says the poorest Americans percentage-wise spent almost as much on restaurants as the richest. 16.6% of their money is spent on eating out. Only the top 20% spend a higher percentage than that at 17.8%. My friends in NYC made a high income and couldn't afford to buy a home. The most common problem is eating out too much according to this article. As Elizabeth Warren and her daughter, Amelia Tyagi, revealed in their book The Two-Income Trap, the problem wasn't lattes and other frivolities. In fact, the cost of everything was significantly lower than it was in the 1970s. Warren and Tyagi demonstrated that the problem was the fixed costs, like housing, health care, and education cost the average family 75 percent of their discretionary income in the 2000s. The comparable figure in 1973 was only 50%. According to the article, people also spent more percentage-wise on gas and groceries. It comes down to making smarter choices. Planning instead of being too spontaneous. Here are 6 suggestions to help you save money: 1. Plan your meals and eat fresh food. Learn simple, quick recipes. Stay away from processed food and fast food. 2. Plan your trips and use public transportation when possible. (airport $5) 3. Pay yourself first. Put 10% of your paycheck aside first. 4. You can use apps to help you (like acorns and digit) to help you save. 5. Open a brokerage account and start investing asap. 6. Move closer to your job so you can walk or ride a bike.