The worst reason to ignore investing for income is also the most common -- you don't think about it.
Sometimes I feel like I'm watching a hypnosis show, and everybody in the audience is under a hypnotic spell except me. This includes brokers, financial advisers, the entire financial media and even many authors I respect.
When You Invest Your Money, You Haven't Received a "Return" Until You ACTUALLY Receive CASH Back
I mean -- cash. Real, hard, spendable or reinvestable C*A*S*H.
Just what is so difficult to understand about that concept?
I'm now reading a book by John Bogle, founder of Vanguard, about investing and mutual funds. He's saying many important and powerful things, but he keeps driving me crazy by using the word "return" when he really means "a security's market price on a given day."
In the case of stock (or other financial securities) market price rises, there's NO "return" unless you sell the security. That's the only way to receive a "return" from an increase in the market price of a security.
And if you do so, guess what? You no longer own that security.
If the market price continues to go up, you can weep and gnash your teeth all you wish, but you're not participating.
There Are Good Reasons to Sell Stocks, But Profit Taking Is Not One of Them
If you sold your stocks because you needed the money for something more important, I can't argue with that. You have to do what you have to do. I've been there, unfortunately.
But if you want to keep those funds invested, then selling to take your capital gains is a mistake unless you have some inside information the company is about to follow Enron into nonexistence.
Now you've realized your return. You have cash back in your pocket, and you're lucky enough to wind up with more cash than you started with. Not every stock trade ends that way.
Now You Need Another Winner
However, what are you going to do now? You picked one winner. Now you need another one. If you believe that's easy, you're far too naive and over-confident. You didn't pick a good stock because you followed the right guru or read the right book or picked the right chart -- you did so because you got lucky. Just as though you'd walked into a casino, put all your money into a slot machine and hit a jackpot. It happens every day, but it's luck, not skill.
So you must depend on luck to beat the odds yet again. Maybe you will, and maybe you won't.
But you should remember what you're up against:
Many of the planet's most educated brains (PhD.s in Math and Finance)
Billions of dollars of computer hardware
Custom software
Databases going back to 1926
Real-time price feeds from markets around the world
Propriety algorithms
Transaction costs a small percentage of yours
Yet almost every investor and guru simply assumes they can buy stocks and mutual funds and later on sell them for a profit -- and that's what "investing" means.
My advice is to dehypnotize yourself. Learn the truth. Think about the facts. When you change your strategy to investing for income, you receive a return -- of REAL cash -- without having to sell any stocks, bonds or mutual fund shares.
Author Information: You too can benefit from investing for income. Click here to get the information you need to effectively make money from your investments whether the markets go up or down. If you're ready to discover how investing for income can help you retire with financial security, visit this page, enter your email address into the form and click on the Submit Button. Then go to your inbox and verify that. It's free for the taking. http://www.incomeinvesthome.com/.
![[Valid RSS feed]](http://societyandculture.org/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites 
![[Valid RSS feed]](http://societyandculture.org/images/rss.jpg "XML Feed For RSS")