A Primer for Understanding Your Money, Part 1

Many people receive quarterly financial reports based upon their investments but do not understand the reports. Another, class of individuals that invests or wants to invest does not understand the companies or businesses of interest. September ends the last month of the third quarter of the year, and October starts the fourth quarter of the year.  Companies will provide what are called earnings reports. These reports tell you how the company is doing and can help you decide whether to continue to invest, purchase more stocks or bonds, or sell. Let’s begin with the basics

Examine Earnings

At the end of each quarter (December, March, June and September), public companies with stocks traded on the U. S. Stock Market provide Earnings Reports. The process begins with then filing Form 10-Q with the SEC ( Securities and Exchange Commission).

Why is this important and how does this impact you? If you are going to be a better steward of your resources, it should occur to you by now that financial literacy and money management is part of your stewardship responsibility. It really is more than simply making a charitable contribution of 10% or giving your church, Mosque or synagogue 10% of your income before or after tax.

These reports are important because your 401K, 403B, pension and retirement funds are all invested in these companies and the stock market. If you’re not paying attention to these reports and not changing your investment portfolio through your employer, if warranted, you’re simply not managing your money responsibly.

Educating Ourselves in Investments

The main components of the 10-Q are the income statement, the balance sheet, the statement of cash flows, disclosures, and management’s discussion. Starting next week we examine each of the components listed.

Most people ignore this kind of financial literacy in their own personal finance. Many people measure and plan their finances around their employment, you know, more education to acquire a better job. Or they seek to gain more work hours. Either way, their focus hinges on their employment and not their investment!

This series is intended to bring investment awareness, just one area of building wealth. Remember, building wealth includes several approaches: income (generally through employment), saving, investing and spending or debt management. The company earning reports provide information that can help you make investment decisions and you seek better money management. See you next week as we explore the components of the earnings report.

WHAT’S UP!

In the first five months of this year computer sales rose for desktop computers. Why? Since companies are adopting a new hybrid work model with more individuals working from home, sales of desktops are increasing. Desktops prices not just sales are also increasing. You might just want to consider purchasing one since you are going to be locked down working from home for the foreseeable future. Beside, when it comes to ergonomics and capacity, desktops may have the advantage over laptops. And that’s what’s up!

Ruthven R. Phillip, Esq., is a tax attorney, Stewardship and Philanthropy Ministry Assistant, and CEO of Give2Getrich, LLC . Give2Get Rich, LLC 2021. All Rights Reserved. Any distribution or reproduction of part or all of the contents in any form is prohibited.

 

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