How Nurses Decipher InvestmentsJan 24, 2023
Money For Nurses
Tiny Training Investing Series Video #2 (Part 3)
By now you should have located your investments by completing these steps:
✔️ Log into your brokerage(s) ⤵️
✔️ Click into the accounts you have inside of your brokerage(s) ⤵️
✔️ Take note of your investments 🪄
The 2 key things to look for with your investments are
- The ticker symbol: 3, 4, or 5 letters
- The name of the investment
If you didn’t find your investments yet, do that now. Go to Training Video #1 here.
Deciphering Your Investments
Now that you have the names of your investments, now you want to know what this actually means. Specifically, you want to know if your investments are made up of
- Some combination
- Something else – real estate or cryptocurrency for example.
It’s actually very easy to figure this out once you learn a little financial jargon and know where to look!
Step 1: Look In The Title
To learn the type of investments you have, start by looking at the investment name. Many investments say if they are stocks or bonds right in the title.
Example) Vanguard Total Stock Index Fund (Ticker: VTI).
The name of this fund tells us automatically that it’s a stock.
There’s more than 1 way to say the same thing in the financial industry. To help you decipher your investments, I created this key for you.
Investment Deciphering Key
Stock = Equities = Shares
Bond = Securities
Target Date Fund = Target Retirement Fund = an investment fund that holds a combination of stocks and bonds.
Money Market = Settlement Fund = Cash = NOT really an investment
Img: Investment Deciphering Key © Nurses Investing For Wealth
Step 2: Where To Look When Title Doesn’t Specify Stock or Bond
When your fund name does not specify if it’s a stock or bond, you have to research further. This happens commonly for investments that contain both stocks and bonds. Target Date Funds are a good example.
When you find an investment name that doesn’t specify whether it’s a stock or bond, click into the investment to research it further.
Here is a cheat sheet of some words or categories that you should look for to help you find the investments.
- Portfolio composition
- Portfolio allocation to underlying funds
- Portfolio allocation
- Asset Class
Example: Vanguard Target Date Retirement Fund
Img: Target Date Fund Interpretation
In RED you see the investment name.
In BLUE you see the investment (stocks and bond) names.
In GREEN you see the percentage distribution (allocation) to each investment.
In PURPLE you see an example of how this distribution would look if you had $100 invested in this fund.
This example is from Vanguard. Other brokerages will show similar information, but the way they show it and words they use will be different.
⚠️Warning: It’s easy to get lost when looking inside your investments. There’s a lot of information in there. Keep it simple. Right now, all you want to know is if you are invested in stocks, bonds, cash, or something else. Forget about everything else you see right now.
Estimating Portfolio Allocation: What percentage of your money is in stocks vs. bonds?
Try to estimate what percentage of your money you have invested in stocks vs. bonds vs. cash, vs. other.
This requires a little math, but don't worry! 🚫😖 Stick with me, and I'll get you using a tool that does this math for you.
I want you to see how this calculation is completed. Give it a try and if it gets too confusing, put it out of your mind.
To calculate your stock percent, divide [total money in stocks] by [total money invested]. Same for bonds.
For example, say you found 2 investments– 1 stock and 1 bond investment. You have $100 invested.
You have $90 in stock = 90% of your portfolio allocation. You have $10 in bond =10% of your investments.
Stocks = $90/$100 x 100 = 90%
Bonds = $10/$100 x 100 = 10%
🪄 Voila! You have your 90/10 portfolio allocation – 90% stock investments and 10% bond investments.
Example: Portfolio Allocation Calculation Inside Target Date Fund
Img: Target Date Fund Portfolio Allocation
In BLUE calculating BOND portfolio allocation. Do that by adding the two bond totals together.
In ORANGE calculating STOCK portfolio allocation. Do that by adding the two stock totals together.
Tip! Don’t get bogged down by these calculations or numbers. This exercise can get mathematically complicated and lead to frustration FAST! Good thing for you that you don't have to!
🤫 I’ll let you in on a secret.I already did the hard work for you. Across 5 years of teaching myself to invest, I created and tested a tool that does this math automatically. Now I use it monthly. It's called the Nurses Investing For Wealth Portfolio Allocation Rebalancer. I share it with nurses inside my programs. It takes the guesswork, confusion, and overwhelm out of investing once and for all. I don’t calculate my allocations by hand. I haven't for YEARS because of this tool!
What You’ve Learned Today
- What kinds of investments do you have inside your accounts now?
- Anything else? Yes there are other types of investments that we didn’t review here!
- How to get started calculating your portfolio allocation. Reminder: don’t stress about it! There are tools to do this work for you.
The next question that you're going to need to answer is,
“How do I know how much stock, and how do I know how many bonds I should have in my portfolio?”
It's essential to know. That's how you are going to use your money to achieve your specific life goals. It's how you manage the risk you take with your money. That's what you'll learn next.
If you landed on this page through a random internet search? Hi! Welcome! 👋🏻
Would you like full access to the full Tiny Training Investing Series?
💻 Webinar Training + 1.0 CNE
How My Students Earn 5+ Figures Within 1 Month Using the Nurses Investing For Wealth MethodTM
Learn 3 secrets to eliminating money confusion, getting unstuck from nursing work, and becoming financially free.
📘 FREE SELF-STUDY GUIDE + 1.0 CNE
The Transformational Nurse Money Ladder 🪜
➡️ Get instant access
Turn your nursing knowledge into money mastery.
Your info is safe, promise. I'll never sell it or share it with anyone.