Category Archives: Building Wealth

Cabo San Lucas, Mexico

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Cabo San Lucas is an excellent destination with adventure, relaxation, and romance.

Here’s a glimpse of what you can expect:

  • Land’s End (El Arco): A stunning rock formation at the tip of Cabo San Lucas. It’s particularly impressive at sunset, so consider a boat trip or dinner cruise during this time.
  • Playa del Amor (Lover’s Beach): Nestled next to El Arco, this beach is perfect for couples and offers a romantic setting for watching the sunset.
  • San José del Cabo: Often referred to as the “Old Town,” it exudes traditional Mexican charm and offers a quieter atmosphere with beautiful resorts, a lovely plaza, and excellent dining options.

For those seeking wellness and tranquility, Los Cabos provides a serene escape with its beautiful beaches, crystal-clear waters, and enchanting desert landscapes. There are also events like rooftop live shows, morning Ayurvedic sessions, and candlelight yoga that you might find rejuvenating.

Cabo San Lucas considers themselves the shrimp capital and is renowned for its delicious seafood, including shrimp.

The region’s restaurants offer a variety of shrimp dishes that are a favorite among visitors and locals.

One notable place is Maro’s Shrimp House, which is highly rated and known for its seafood offerings, especially shrimp. They offer a variety of shrimp dishes that are highly rated by visitors

While Cabo San Lucas may not hold the official title of shrimp capital, it certainly is a place where you can enjoy some of the best shrimp dishes.

Gratitude and Financial Freedom

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Practicing gratitude can have a profound impact on achieving financial freedom. Here are some key ways gratitude can improve your money mindset and financial well-being:

## Shifts Focus to Abundance, Not Scarcity

Feeling grateful for what you already have, instead of fixating on what you lack, fosters a mindset of abundance.[1][2] This positive perspective reduces financial worry and impulse spending, making you more patient and deliberate with financial decisions.[1]

## Increases Satisfaction with Current Situation

Expressing thankfulness for your present circumstances and material possessions leads to greater contentment.[2] This can curb the desire for unnecessary purchases and make you more willing to save and invest for long-term goals like financial independence.[1][2]

## Motivates Values-Based Money Management

Gratitude motivates you to align your finances with your core values and make choices that provide deeper fulfillment.[2] This could mean prioritizing saving for your children’s education, charitable giving, or working towards an early retirement.

## Improves Financial Resilience

Practicing gratitude, especially during tough financial times, can improve your mood, reduce anxiety, and provide motivation to work through challenges with resilience.[3] An attitude of thankfulness helps you stay present, solution-oriented, and decisive when faced with money issues.

In essence, gratitude nurtures a positive relationship with money. It allows you to feel financially secure with what you have while giving you the patience and motivation to manage your finances more effectively towards achieving true financial freedom.[1][2][3]

Citations:
[1] https://www.sagespring.com/4-ways-gratitude-can-improve-your-money-mindset/
[2] https://singerwealthmanagement.com/why-gratitude-is-essential-for-you-and-your-finances/
[3] https://www.northamericancompany.com/plan-for-tomorrow/gratitude-for-financial-wellness
[4] https://blog.gratefulness.me/money-affirmations/
[5] https://www.nerdwallet.com/article/finance/how-gratitude-can-help-your-financial-life

Best Small Cap AI Stocks to Buy and Hold

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The best artificial intelligence small-cap stocks for long-term investment

Sources
The 5 best small cap AI companies to buy now – MarketBeat

Here are some of the best small-cap artificial intelligence (AI) stocks to consider for long-term investment:

SoundHound AI (SOUN) is a leading voice AI company providing conversational intelligence solutions. It has strong revenue growth, with Q1 2024 revenue up 73% year-over-year. SoundHound is well-positioned in the rapidly growing voice AI market and has a median analyst price target of $7, representing significant upside potential from its current price around $5.40,

Recursion Pharmaceuticals (RXRX) applies AI to drug discovery and development. With a market cap around $2 billion, it is one of the larger small-cap AI stocks. Recursion’s unique AI platform for mapping cellular biology could provide an edge in developing novel treatments across many disease areas.

Duos Technologies (DUOT) provides AI-based vision technologies for rail inspection, logistics, and other industrial markets. Its rail inspection business is growing rapidly, and Duos has opportunities to expand into trucking and other transportation sectors leveraging its AI capabilities.

BigBear.ai (BBAI) offers AI-powered decision intelligence solutions for supply chains, autonomous systems, and cybersecurity. While facing recent challenges, BigBear.ai projects 25-39% revenue growth in 2024 and has made acquisitions to drive future growth in these key AI verticals.

CXApp (CXAI) provides an AI-powered workplace app for communications, meetings, and security. It has shown strong revenue growth, turning free cash flow positive in 2023, and analysts view it as an attractive small-cap AI play with room for further expansion.

The key points are that small-cap AI stocks offer higher potential returns but also higher risk and volatility compared to large established companies. A diversified portfolio and long investing horizon are advisable to manage the risks of this emerging, high-growth sector.

 

Get Back on the Bus

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One morning, a mother was seeing her 8-year-old son off to school. She walked him to the bus stop, where they waited patiently. The bus came, and her son boarded. The mother then proceeded to go home so she could get ready to go to work.

About 15 minutes later, the doorbell rang, and her son was at the front door. She was shocked to see him since she had just gotten him on the school bus, and then she noticed the school bus with its door open in front of her house.

The mother asked her son, “What are you doing back home?”

Her 8-year-old son said, “I’m quitting school. It’s too hard, it’s too boring, and it’s too long.”

The mother looked at him and said, “That’s life, now get back on the bus.”

Lesson: Life experiences touch all, no matter how young or old.

Investing in Great Companies

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All investing is the discounted value of all future cash flow. 

Investing in great companies at reasonable prices is a smart strategy.

Below are nine promising stocks that you might consider for your investment portfolio. Keep in mind that investing always carries risks, so it’s essential to do thorough research and consider your own financial goals and risk tolerance.

Here are some stocks that have caught the attention of experts at Forbes:

  1. Alphabet, Inc. (GOOG, GOOGL): Alphabet, the parent company of Google, has a forward price-to-earnings (P/E) ratio of 22.1. It’s a leader in technology and advertising, making it an attractive choice for long-term investors.
  2. Citigroup, Inc. ©: With a low forward P/E ratio of 8.4, Citigroup is a major global bank. It offers financial services and has the potential for growth.
  3. Fidelity National Information Services, Inc. (FIS): FIS provides financial technology solutions. Its forward P/E ratio is 15.3, and it’s well-positioned in the industry.
  4. Intuitive Surgical, Inc. (ISRG): A pioneer in robotic-assisted surgery, Intuitive Surgical has a forward P/E ratio of 60.9. It’s a high-growth company with significant potential.
  5. The Kraft Heinz Company (KHC): With a forward P/E ratio of 12.2, Kraft Heinz is a food and beverage giant. It’s known for its iconic brands and steady performance.
  6. The Progressive Corporation (PGR): Progressive is an insurance company with a forward P/E ratio of 23.3. It has been consistently growing and is well-regarded in the industry.
  7. Spotify Technology S.A. (SPOT): Spotify, the popular music streaming service, has a forward P/E ratio of 98.0. It’s a high-risk, high-reward stock due to its competitive market.
  8. Tapestry, Inc. (TPR): Tapestry, which owns luxury brands like Coach and Kate Spade, has a forward P/E ratio of 8.7. It’s an interesting play in the retail sector.
  9. TopBuild Corp. (BLD): TopBuild, a construction services company, has a forward P/E ratio of 20.8. It benefits from the housing market and construction industry growth.

Remember that these are just suggestions, and it’s crucial to conduct your own research and consult with a financial advisor before making any investment decisions.

Additionally, consider diversifying your portfolio to spread risk across different sectors and asset classes. Happy investing! 📈👍

References:

  1. https://www.forbes.com/advisor/investing/best-stocks-to-buy-now/

Roth IRA

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The Roth IRA has become a darling of retirement savings accounts. Although funded with after-tax dollars, Roths offer tax-free withdrawals of contributions and earnings in retirement (so long as the account holder is 59½ or older and has held the account for at least five years). Plus, such funds can continue to accrue tax-free indefinitely during the owner’s lifetime because they’re not subject to the required minimum distributions (RMDs) starting at age 73 that are mandated from tax-deferred retirement accounts.

But there’s a catch: For 2023, only savers with incomes at or below $153,000 ($228,000 for married couples filing jointly) can contribute to a Roth IRA. And even then, contributions are limited to $6,500 per year ($7,500 if age 50 or older), though that limit is reduced if your income falls between $138,000 and $153,000 (between $218,000 and $228,000 if married).

The income limits on Roth contributions increased for 2024, which means savers with income at or below $161,000 ($240,000 for married couples filing jointly) can contribute to a Roth IRA. Also, for 2024, the contribution limit increased to $7,000 per year ($8,000 if age 50 or older), though that limit is reduced if your income falls between $146,000 and $161,000 (between $230,000 and $240,000 if married).

“Unfortunately, the income limits on Roth IRAs make it difficult for many higher-income individuals to contribute directly to these accounts,” said Hayden Adams, CPA, CFP®, director of tax and wealth management at the Schwab Center for Financial Research. However, with some planning, even high earners can contribute to a Roth account and reap its benefits. Let’s look at four strategies to consider.

1. Roth 401(k)

If your employer offers this option with no income limits, you can set aside up to $23,000 ($30,500 if age 50 or older) in after-tax contributions in 2024. Unlike Roth IRAs, Roth 401(k)s require RMDs—at least for 2023 and earlier. Starting in 2024, you’ll no longer need to take annual distributions under the SECURE 2.0 Act.

2. Roth conversion

Like a traditional IRA, those with savings in a tax-deferred account can convert some or all of that balance to a Roth IRA and pay ordinary income tax on the converted amount.1 As a result, you might choose to spread out the conversion over multiple years to manage the associated tax bill better. (If your traditional IRA includes both pre- and after-tax contributions, the converted amount will be taxable in proportion to the pretax value of the account, known as the pro rata rule.2)

“But before doing a Roth conversion, remember that once done, it can’t be undone,” said Hayden, “and each conversion will be subject to a separate 5-year holding period rule.”

3. Backdoor Roth

If you earn too much to make deductible contributions to a traditional IRA, you can still make after-tax contributions up to the annual limit and then convert them to a Roth. As with all Roth conversions, the pro rata rule applies.

4. Mega-backdoor Roth IRA

Before you begin, could you verify with your employer’s retirement plan administrator that your plan allows contributions of after-tax dollars above and beyond the annual contribution limit and withdrawals while you’re still working (which are required to perform the final step below)? If it does:

  • First, max out your normal 401(k) contributions.
  • Next, contribute after-tax dollars up to the overall limit of $69,000 ($76,500 if age 50 or older) in 2024, regardless of income. Take note: The rules will change in 2026 under the SECURE 2.0 Act, which mandates that those earning more than $145,000 a year (indexed to inflation) will have to put their catch-up dollars in a Roth 401(k)—which means those contributions will be after-tax, though their withdrawals in retirement will be tax-free.3
  • Finally, make an irrevocable transfer of the after-tax funds into a Roth IRA—the sooner, the better, since any earnings will become taxable once rolled over.

“Some of these strategies, especially the mega-backdoor Roth, can be complex, so I recommend seeking the assistance of a tax or financial professional if you’re interested in pursuing them,” said Hayden.

1Pre-tax contributions to your traditional account and any income or appreciation from those funds will be subject to taxes when converted to a Roth account. After-tax contributions will not be taxed upon conversion.

2Pro rata rules may apply. Please take a look at the IRS Notice 2014-54 for more.

3If you take a distribution of Roth IRA earnings before you reach age 59½ and before the account is five years old, the earnings may be subject to taxes and penalties.

Chop Wood; Carry Water

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The phrase “chop wood, carry water” has deep wisdom and multiple layers of meaning, according to Copilot:

  1. Enlightenment Happens on the Inside:
  2. Value of Hard Work and Persistence:
  3. Mindfulness and Gratitude:
  4. Yearning for Escape:
  5. Before and After Enlightenment:
    • The quote contrasts life before and after enlightenment. The external actions—chopping wood and carrying water—remain the same. However, the internal shift transforms how we perceive and experience these actions. It’s a reminder that true change occurs within5.
    • Takeaway: Seek inner transformation alongside external tasks.
  6. Embracing the Journey:
    • Whether mundane or profound, every task contributes to our journey. Chopping wood and carrying water symbolize life’s ordinary moments. Embrace them fully, knowing they shape your path toward greater understanding and enlightenment.
    • Takeaway: Every step matters; find purpose in the journey.

Remember, these meanings intertwine, and the phrase invites personal reflection. So, as you go about your day, consider the wisdom of “chop wood, carry water.” 🌿

Net Income vs. Free Cash Flow

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The world of free cash flow (FCF) and net income are intriguing. These two financial metrics often dance around each other, but they’re not quite the same:

  1. What Is Net Income?
    1. Net income (profit or earnings) represents the bottom line on a company’s income statement. It’s the total profit a company has made after accounting for all expenses, taxes, and interest.
    2. Net income is calculated as:
      Net Income=Total Revenue−Total Expenses
  2. What Is Free Cash Flow (FCF)?
    1. FCF is a powerful metric that goes beyond net income. It measures the cash a company generates from its operations minus the necessary capital expenditures (like buying new equipment or expanding facilities).
    2. FCF considers both cash inflows (from operating activities) and cash outflows (such as asset investments).
    3. The formula for FCF is:
      FCF=Cash Flow from Operations−Capital Expenditures
  3. Why Might FCF Be Higher Than Net Income?
    1. FCF can exceed net income for several reasons.
    2. Non-Cash Expenses:
      1. Depreciation and amortization are non-cash expenses that reduce net income but don’t directly impact cash flow. If these expenses are significant, FCF can be higher.
      2. Working Capital Changes: Changes in working capital (like accounts receivable, inventory, and accounts payable) affect cash flow. If a company efficiently manages its working capital, FCF can surpass net income.
      3. Capital Expenditures: FCF can be higher if a company has minimal capital expenditures (e.g., it doesn’t need to invest heavily in new equipment).
      4. Timing Differences: FCF considers the actual timing of cash flows, whereas net income is based on accrual accounting. Timing differences can lead to variations between the two.
  4. Why Does It Matter?
    1. Investment Decisions: Investors often focus on FCF because it reflects a company’s ability to generate usable cash. Higher FCF means more flexibility for growth, dividends, or debt reduction.
    2. Sustainability: A company with consistently positive FCF is better positioned to weather economic downturns or invest in future projects.

Media Perception: Media reports often emphasize net income, but understanding FCF provides a deeper insight into a company’s financial health.

Remember, while net income is essential, FCF tells us whether a company can use that income to fuel growth or weather storms. So, next time you analyze financial statements, watch net income and FCF—they’re like two dancers performing different moves on the same stage!