Online Investing…. the Smart Way!

Compound Interest Calculator

Have you been thinking about your future? Online investing can help make sure that you can live a rich, rewarding and comfortable life when you get older.  Here’s how:  saving, investing, strategic planning and paying attention.

Let’s Start With Saving, Then Online Investing

If you don’t have a savings account, it’s never too late or too early to start saving and investing online. Demonstrating the ability to save is the first step to financial security. It doesn’t really matter how much you start your savings with.  It only matters that you ‘start’ and get into the habit of doing it routinely.  Saving and investing can be complicated.  Fortunately, there are some wonderful free tools at your disposal that you can use online, courtesy of the U.S. Government.  I’ll dig right into this and focus on my favorite federal resource that Uncle Sam provides which is the Compound Interest Calculator.

Compound Interest Calculator
Compound Interest Calculator

The Compound Interest Calculator helps you realize what you COULD BE EARNING from your savings or investing.  All of these you can do online from the convenience of your home.  If you have a savings account already, enter the APY that your getting right now from your last savings statement. Enter the amount you plan to add each month, along with the balance you have in your account right now or the amount you plan to start with.  Using the government’s calculator, you will learn what you could be earning from your savings alone.

Shop For the Most Competitive Savings Rates

I’ve talked to many clients who have been savings for years.  Yet, when I ask them what they’re earning, they don’t have a clue.  This is the most important part of the plan. It’s the area where you have the most control but most people overlook this step. They don’t know their earning rate and they don’t shop for their rate.


In my role as a Quickbook Pro Advisor and supporting Intuit’s products, I see bank accounts with savings earning .01% regularly! This paltry rate is clearly out-gunned by many banks.  Don’t believe me?  Look for yourself.  But in the meantime, here’s the difference between two of my actual clients and the different rates they’re earning and progressing with their investing goals. One person is doing well.  The other, not so much. I modify the figures because they both don’t have the same account balance.  But using the different rates, you can see where they differ greatly in just 5 years!

Saver A – Nice Job!

Starting with an equal amount of $1,000, compounded daily at 1.80%, Saver A has $4,233.23!  Nice job.  Now let’s look at Saver B, which sadly is a scenario most people find themselves.

Saver B – Mediocre

Saver B starts with $1,000, compounded daily at 0.13%, Saver B has $4,001.62!  It good, but mediocre.  Both Saver B & Saver A are actually saving and because of the DISCIPLINE of adding a measly $50/month to their savings they both have over $4k to start their online investing.  Follow my logic.  You work to save.  Then, you save to invest.  Finally, you invest so you don’t have to work.  The BIG DIFFERENCE is that Saver A invested let’s say, an hour of their time to find out which bank was paying more, and actually opening a savings account. So, one hour invested of TIME. The difference is $231.61 between Saver A (who paid attention and choose wisely where to start saving) compared to Saver B (who just opened a savings account without considering the rate their money would earn).

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Online Investing

Now that both Savers have $4,000 bucks to start investing, let’s turn them into investors and look 5 more years down the road. Years ago, I announced to a girlfriends family that they should heed my advice (which was free) and immediately buy Facebook, Netflix, and Amazon.  I boldy told them that if they listened, they would be rewarded.  I also told them, that if they didn’t they would look foolish. No one listened.  Hypothetically, had they listened here’s what would have happened. I’ll imagine that Saver A is the oldest of the children, and Saver B is the next to the oldest of the family’s children.  Let’s give them names.  Saver A we’ll call Mark.  Saver B we’ll call John.

Mark immediately listens to my advice and quickly opens an online trading account. He shortly thereafter transfers the FULL AMOUNT of his $4,233.23 into his online trading account to buy the stocks I recommended.  Mark splits the money and buys Facebook, Netflix and Amazon. John does the same. Both restart their savings to replenish their savings account while continuing to invest. Here’s where the two boys (Mark and John) are in five years:

Facebook Stock
Facebook Stock

Buying Facebook Stock

Mark has Facebook worth $9,312.96 (based on today’s price of $194.02 per share). When I told him to buy it, it was priced at $29.03 per share.  Mark bought 48 shares. Remember, Mark restarted his savings when he originally emptied his savings to start investing online. His savings account went to ZERO.  However, his investing account went from 0 to $4,233.23! In just five (5) years, his investing portfolio’s Facebook holdings went to $9,312.96! His savings account now has another $4k or so plus his other holdings.  Let’s take a look at those also.

He also has Netflix stock worth $17,222.17 (based on today’s price of $395.40 per share). When I told Mark to buy Netflix, it was priced at $32.32 per share. Mark bought 44 shares!  When I told Mark to buy the shares, I was joking that “…all these people with ‘SMART’ phones don’t know what to do with them but text each other about stupid stuff, and send photos back and forth.  They NEED content.  Netflix has the content.

Netflix Stock
Netflix Stock

At the time, I also discussed this with my brother Sean, who is no slouch in investing himself. He is very sharp.  But alas, Sean strongly dislikes Netflix because of Reed Hastings. Nevertheless, Netflix has performed. Even though Netflix stock is priced much higher, it’s not too late.  I believe Netflix is going over $1,000 per share.

Netflix Marches On

I can’t even begin to tell you what Mark will be worth in another 10 years but so far, he’s doing well. Him following my FREE advice paid him handsomely.  My rationale was that Bandwidth is King, and content is his Queen.  Netflix has content. Smart devices (smart phones, tablets, tv, etc) will consume content. A large part of that content will be coming from Netflix.  I think the stock is going much higher.

Netflix is buying billboards, to attract interest of actors in the LA area to attract interest so it can, wait for it – make more content.  The logic might be, as an actor, “…wow, Netflix billboards are everywhere.  They are dominating and disrupting the entertainment landscape.  I better do a deal with Netflix for my career’s sake!”.  I’m just saying, that’s one possible though process.  Mark’s a winner. But wait, there’s more.

Amazon Stock Investing

Amazon Stock
Amazon Stock

Mark wisely bought Amazon stock that today is worth $9,269.03 (based on today’s price of $1,700.74).  When I told him to buy it, it was $258.05 per share. He picked up a mere 5 shares. That didn’t stop Mark from winning on this trade.  Amazon has performed and performed well.  When it was just $258 a share, I remember seeing analysts on TV posturing and saying that Amazon hasn’t turned a profit and looses money for investors.  Okay. Why people say go left, I recommend going right.

I worked for Amazon in the past.  I’m very familiar with their business model.  Basically, it’s “….run like hell!”.  Forget about the competition and just RUN! They know the competition is their, so they run.  They don;t look back. Amazon acts like it’s still day one and they’re competing like hell to survive!  Jeff Bezos will continue to be as thrifty as hell, pinching every penny he can to invest heavily, almost defiantly into infrastructure.  I told Mark’s Amazon is building the roads, and building the toll booths.  Eventually, everyone will have to pay Amazon.  My attitude is based on my internal observations and feelings as a result of being there.  Looks like my feeling is right.

Mark’s Total From Online Investing After 5 years

Mark’s online investing and saving has rewarded him well. At the end of saving for five years, and investing for another five years, he is on his way.  His stock portfolio is worth $35,804.16 which he could liquidate and turn into cash at any time.  I wouldn’t advise Mark to do this.  Mark still has $4233 in savings assuming he continues to earn the same APY by using the same deposit bank or another one. This brings his online investing grand total to approximately $40,037.16!

Let’s look at John’s Portfolio

John did the exact same as Mark but started out with slightly less.  He bought 46 shares of Facebook now worth $8,914.82. John also bought 41 shares of Netflix now worth $16,211.40.  Last but not least, John bought 5 shares of Amazon now worth $8,503.70.  John’s total portfolio is worth $33,629.92.  He also could liquidate his portfolio but decides not to. He has his cash in savings, the same as his brother Mark in the amount of approximately $4233 bring his grand total to $37,862.92.  John is way behind Mark by $2,174.24, or 5.74%!  Mark’s online investing performance is ahead of John by paying attention and choosing where to deposit his savings based on research and one hour of his time which has grown in value to $2,174.24.  Mark has paid attention.  John has not paid attention (at least in the beginning).

Mark's Online Investing Growth
Mark’s Online Investing Growth

Fast Forward Ten Years

Nobody can know precisely where any stock portfolio will be, but we can make a calculated analysis and predict performance will either go up, or go down. Let’s assume for simplicity sake that both brothers stock portfolio continues to do well.  Using compound interest, we use a performance basis of 20% growth each year for the next 10 years.  Both have profited tremendously from their online investing. Here’s where Mark and John stand after their twenty years of savings and investing:

Mark – $314,829.85

John – $298,773.07

One simple decision made over 20 years ago in this example can result in huge difference.  Mark has $16,056.78 more than his brother John.  The only difference was that John had a savings just like Mark but John didn’t PAY ATTENTION initially to his APY! Although he quickly corrected this mistake at the end of the 5 years when the brothers started having regular family investment meetings.

The Importance of Family Investment Meetings

Family investment meetings are important. Yet many do NOT HAVE THEM.  The purpose of the family investment meetings is to ‘flesh out’ the good performance so everyone can see what is winning versus the bad so that corrective action can be made.  It also puts pressure on those family members who have gone astray, or worse yet, take no action at all.  In the example above, I mentioned that I announced to the family what they should buy. Sadly, most family members did NOT do what I suggested at all.   In this hypothetical (but reality based) scenario, Mark and John look like geniuses!  Together, they have a whopping $613,602.92 of wealth assets that are GROWING IN VALUE! They could do anything they want!

Another family member, who elected NOT to buy the stocks I announced they should buy, decided to buy a house instead.  The property had a value of $270,000 when they bought it.  Because she was eager to move in and become comfortable, she pulled out $40,000 from her stock portfolio and due to the structure of her investments, she had to pay a prepayment penalty of 20% losing an immediate 20% in valuation and missing out on any growth or upswing. Bad move. By having a family investment meeting, perhaps there could have been other options considered to achieve the nearly similar ‘comfort level’ she desired without missing out on the growth while simultaneously taking a hit to the capital.

Seek Professional Help

While I am not licensed stock broker, or financial investment adviser, I do online investing and make investments for myself.  I share what I’m doing from time to time with family or friends. They do what they want.  I would advise anyone who wants to see real growth to get started with online investing now!  Start saving now!  Start online investing NOW! It’s never too late to take control of your own self-managed stock portfolio, or hire a competent licensed professional to do it for you.  If you do, the results will amaze you.

Use FINRA or

If you’re hiring someone, use FINRA or  They have some free tools and resources on their sites that can really help you get going and achieve your financial goals.  If you prefer to do things yourself and learn as you go, that’s a possibility too.  There are a lot of tools and resources for you to consider.  VectorVest as helped me in the past a great deal.

I like TradeStation too. They are used by a lot of investors who have had success with their platform. TD Ameritrade is good and also has an Alexa Skill you can use with your Amazon Echo to get stock updates from Alexa. Just hit the link below and enable the Alexa TD skill.

Good luck with plans and if you have comments, I’d love to hear about your progress.



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