Money Management

Perfect for everyone who thought high school reading assignments were fun! 

One of the most important skills you learn to become more successful at investing is research. The more knowledge you can acquire about the companies in which you wish to purchase stock, the more prepared you will be to make decisions about those investments.

But what’s the best way to get to know your prospective investments? According to popular finance icon Graham Stephan, it’s all about the 10-K. (And no, he’s not talking about a marathon!)

“If you really want to know about the company you’re investing in,” he tweeted, “you need to learn how to read its 10-K.”

The 10-K in a nutshell

Alright, so if we’re not talking about races, what are we talking about? Essentially, the 10-K is an annually updated document that covers more or less everything you’d want to know about a company before investing.

An average 10-K can be more than 100 pages long. It includes information about the company’s:

HistoryOrganizational structureFinancial statementsEarnings per shareSubsidiariesExecutive compensation

The SEC (U.S. Securities and Exchange Commission) requires every listed U.S. company to provide a 10-K so investors — and potential investors — can learn about the company and the condition of its finances.

If a company is publicly traded, it will more than likely have some sort of “For Investors” or “Investor Relations” page on its website. This is typically where you’ll find the 10-K.

Pro tip: While the 10-K is updated annually, it’s not what most investors mean when they refer to the “annual report.” Instead, this typically refers to the chairman’s letter, which is a much shorter document. Think of the chairman’s letter as the Sparknotes, and the 10-K as the full, unabridged book.

How it’s organized

All 10-K documents are organized in the same way, which makes it easy to find exactly what you’re looking for when you dive into one. Each 10-K has five parts, broken into 15 different “items.”

While there is a ton of great information packed into the 100-plus pages, most stock brokers and other investors don’t actually read every word. Instead, many experts focus on four key areas:

Business: This is the very first section, and it gives you an overview of the company’s operations, products, and services. In other words, this section tells you all about how the company makes money.Risk Factors: This is the next section, and it outlines all of the potential risk factors the company is currently — or soon to be — facing. They’ll be listed in order of importance.Selected Financial Data: Here’s where the company provides a basic look at its financial data for the last five years. There’s far more detailed data provided later in the document, but this is a great place to get a feel for a company’s financial situation.Management’s discussion and analysis (MD&A): This part of the 10-K is where the company’s management discusses the business’s operations over the last fiscal year. It’s the company telling its side of the story.

Another interesting area to check out? The section on Executive Compensation. This juicy section is all about the company’s compensation policies, including how much was paid to the top company executives.

Invest within your competency

One important thing worth pointing out here is that the best 10-K in the world is only going to do so much if you don’t understand what’s inside of it. For instance, if you don’t understand much about the energy sector, then reading the 10-K for an energy company may not be as enlightening as you hope.

That’s why it’s important to make sure you stick to what you know — or what you can learn.

In the words of popular online investing personality, Compounding Quality, “It’s very important to always invest within your circle of competence. If you don’t understand the business model, you can skip the company right away.”

Knowledge is power. But wisdom tells you how to wield it.

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The answer to which store is most convenient may surprise you. 

There are lots of reasons to pick one store over another to shop at. For some customers, price is a top priority and the goal is to spend as little on groceries as possible to keep credit card bills down. Others prioritize organic products or short wait times or great store brand items.

For many shoppers, though, convenience is key, and that’s understandable for people with busy lives who want a close, convenient store and a quick shopping experience.

If convenience is your top priority, you may be wondering what store is the best place for you to shop. Consumer research has provided an answer that might come as a surprise.

Is this store the most convenient for shoppers?

According to this year’s Retailer Preference Index (RPI), one retailer topped the list for convenience: Walmart. Walmart stores came in first when it came to convenience, and Walmart Neighborhood Market came in third, so different variations on the big-box store actually took two places on the list.

Although Walmart doesn’t always have the best reputation, there are some good reasons why consumers found the retailer to top the list of most convenient stores. For one thing, there are Walmarts everywhere. There are 5,317 total Walmart units including Supercenters, Discount Stores, and neighborhood markets. By comparison, Target — a close competitor — has only 1,948 stores. So, if you’re looking for a store that is close by, chances are you’ll find a Walmart — no matter where you are.

Walmart also sells a huge variety of products, which adds to the convenience of shopping there. You can pick up some automotive parts, get your grocery shopping done, hit up the toy aisle for a present for your kids, and buy some clothing — all without ever leaving your local neighborhood Walmart.

How to pick the best store for you

While Walmart wins on convenience, that doesn’t necessarily mean it is the best place for everyone to shop. You’ll want to think about what makes sense given your priorities and your lifestyle.

While Walmart generally has competitive prices, you can’t assume it’s necessarily the cheapest for every purchase. If keeping more money in your bank account is a top priority for you, you may want to do a price comparison between Walmart and other local stores for the items you buy the most to see where you can get the best deals.

And, while Walmart does have house brand products (Great Value is its house brand), it doesn’t offer the variety of unique foods that places like Costco or Trader Joe’s have. So if trying little seasonal delights is your cup of tea, you may be better off shopping elsewhere.

The point is to make a mindful decision. It’s so easy to go to a store just because it’s close to you or because you’ve always gone there. But, you work hard for your money and you deserve to do your shopping at a place that’s going to provide the best value for you. So don’t just stick with the status quo without taking the time to consider what you prioritize most in a store and which place can best suit those priorities.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.

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Don’t sign that loan until you address it. 

There’s a reason personal loans tend to be so popular among U.S. consumers, as evidenced by the fact that total personal loan balances rose to $222 billion by the end of 2022, according to TransUnion. With a personal loan, you can borrow money for any purpose, whether it’s to renovate your home, repair an ailing car, or start a small business of your own.

Plus, compared to other options, like charging expenses on a credit card, a personal loan can be a more affordable way to borrow. And personal loan interest is fixed, not variable, so once you sign your loan, you don’t have to worry about your payments increasing over time.

But if you’re going to take out a personal loan, it’s important to make sure it truly fits into your budget. That’s because falling behind on one of these loans could have serious consequences.

What will your monthly payments look like?

The main question you have to ask yourself before putting a personal loan in place is how much you’ll end up spending each month on loan payments. Once you have that figure, you can run the numbers to see if a personal loan will fit into your budget.

Let’s say you really want to renovate your kitchen and decide that a personal loan is the best way to finance that project. Based on the amount you need to borrow and what personal loan rates look like today, that could leave you with a $300 monthly payment.

If there’s room in your budget to carve out an extra $300, then that doesn’t sound too risky or problematic. But if most months you’re barely left with $75 after paying your bills, then you probably should not be taking on a personal loan that will require you to spend $300 on a monthly basis.

Falling behind could have consequences

Any time you’re late paying a debt, it goes on your credit report and can cause serious damage to your credit score. Personal loans are no exception, and sometimes, all it takes is a single late payment to turn an otherwise great credit score into a score that barely qualifies as good.

That’s why you can’t take the risk of signing a personal loan whose payments don’t seamlessly fit your budget. If there’s any doubt in your mind about your ability to repay your loan, hold off — especially if you’re borrowing for a non-emergency purpose, like renovating your living space.

The idea of a personal loan may be tempting, and if you have strong credit, you might qualify for a competitive interest rate on one. But if you fall behind on your loan, that impressive credit score might become anything but. And that could put you in a tough spot financially if you run into an emergency expense you need to borrow for.

Even if you don’t fall behind on your personal loan payments, taking on large payments could result in financial stress. That’s not something you need in your life. So make sure you understand what monthly payment you might be signing up for, and make certain that it’s a number you can afford with relative ease.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Take these steps if your housing expenses are becoming too much. 

If you bought a home in the past year and are now struggling to keep up with the expenses involved, you may be in good company. Recent home buyers have faced much higher mortgage rates than those who bought a home in 2020 or 2021. And between that and inflation, which was still up 6% on an annual basis as of February, you may be struggling to keep up with the cost of everything from property taxes to maintenance and repairs.

Of course, there’s a danger in falling behind on your mortgage payments — losing your home, eventually. And falling behind on other bills could damage your credit score, severely limiting your borrowing options. So if your housing expenses are getting to be too much, it could pay to use your home as a means of generating income to help offset them. Here are a few options to look at.

1. Rent out a room or area of your home

There may be an area of your home that could function as its own separate rental unit. If you have a finished basement with a bathroom and small kitchen or kitchenette, that could be an option. Renting out a portion of your home might mean giving up some usable space, and also, having to deal with the privacy issues that ensue when you have a tenant living under your roof. But the steady income you collect might really help you manage your housing costs.

2. Rent out your home on a short-term basis while you’re away

If money is tight and you’re struggling to pay your housing expenses, then there may not be room in your budget for travel. But you might be away from home for a period of time to see family, or to fulfill another obligation. If so, consider renting it out on a short-term basis. This option works especially well if your home is located near a popular beach town, ski resort, theme park, or any notable attraction.

3. Rent out a parking spot in your driveway

If you live in an area where parking is hard to come by, and you don’t have a car of your own or have a two-car driveway, you might be able to enjoy your share of rental income without having anyone occupy your home’s interior. That’s because you can rent out a parking space in your driveway instead.

For many people, there’s nothing more frustrating than coming home after a long day of work and having to circle the neighborhood for 20 minutes finding a place to park. As such, you may be surprised at how much monthly rent your parking spot is able to command.

It’s easy to see why so many new homeowners are having a hard time keeping up with their costs. Rather than risk falling behind on your bills and housing expenses, use your home as a means of generating income, even if it means having to inconvenience yourself a bit for a period of time.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
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It’s a cost I’m stuck with, but I’m dealing with it. 

At this point, our dog, Champ, has lived in our home for about 2.5 years. And it’s hard to remember a time when I didn’t have to share my bed with a 72-pound giant or get interrupted 15 times a day by his barking right outside my office.

Adopting Champ is one of the best decisions my family has ever made. But one poor decision we made was not getting pet insurance right away. And now, we’re paying the price.

When your insurer won’t cover a pre-existing condition

It’s common for pet insurance companies to deny coverage for pre-existing conditions for animals. And that’s why our insurer won’t pay for my dog’s arthritis medication, which costs us several hundred dollars a year.

See, when we got Champ, we were more focused on helping him adjust to life in our home than buying insurance (he’d been bounced around a bunch as a rescue, so we were sensitive to that). Since he initially got a clean bill of health at the vet, we figured we could take our time shopping around for the right coverage.

Only shortly after his adoption, Champ began to limp and show signs of pain. The reason it only first came out on our watch was that his previous caregivers didn’t take him running — namely because he’s really hard to keep up with. But since my husband and I are runners, we started running with him daily, which wound up not being the best thing for his arthritic joints.

Now, there was no way we could’ve known he had arthritis until he started showing signs. After all, he was a pretty young dog (just 3.5 years old) when he came to us. But this condition, our vet tells us, is fairly common for large breeds even at a young age. And thankfully, it’s easily treatable with medication.

But because this condition was diagnosed before we put pet insurance in place, our coverage won’t pay for it. Our insurer also won’t pay for the yearly bloodwork Champ needs to make sure his meds aren’t causing too many side effects. And that’s another couple of hundred dollars a year we have to fork over.

Making room in our budget

Champ isn’t our first dog, so we knew going into his adoption to budget for certain costs. And actually, our last dog had a lot of health issues toward the end of his life, so we knew to pad our savings account in case our next dog happened to come with a host of medical problems.

Still, we’ve had to make some adjustments to account for the cost of Champ’s care. One thing we now do is groom him ourselves, even though it’s torturous (imagine having to hold down a 72-pound animal who hates being bathed and having his fur dried). We’ve also had to scrap certain weekend plans that would require us to hire a dog-walker, because we’re looking to avoid that expense given that we have these other costs to contend with.

Furthermore, we’ve made an effort to be more frugal in general since taking on the expense of a dog. We still order takeout and treat our kids to things like ice cream at the local shop. But we do those things less frequently now.

Get pet insurance right away

Forbes reports that pet insurance costs an average of $44 per month for a dog for $5,000 of annual coverage. And paying for pet insurance could get you off the hook for paying for other costs related to a condition your pet is diagnosed with.

I regret the fact that we didn’t buy insurance for Champ right away. But I’m thankful that the cost of his care is manageable.

If it were more expensive, we’d still find a way to make it work. But this way, at least we only have to make small adjustments to compensate, not major ones.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
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You may want to hold off on signing a loan if you can help it. 

Maybe there’s an area of your home you’ve been looking to improve. Or maybe your car needs serious work, and you don’t have the money in your savings account to pay for it.

When you need money, and you’re looking for a relatively affordable way to borrow, you may be inclined to turn to a personal loan. Personal loans let you borrow for any purpose, and if you have great credit, you might snag a decent rate on one — or at least a lower rate than you’d get with a credit card.

But the cost of getting a personal loan is likely to increase in the coming months. So if you’re able to hold off on taking one out, that might be a better bet.

Why personal loans could get more expensive

Inflation has been surging for well over a year, and the Federal Reserve is trying its hardest to do something about that. The central bank has been raising interest rates to try to discourage consumer spending and cool inflation to a notable degree.

So far, the Fed has raised interest rates twice this year — first in early February, and most recently on March 22. Both increases have been in 0.25% increments.

But let’s remember that the Fed also raised interest rates seven times in 2022 to fight inflation. So all told, borrowing is expensive right now across the board, and it might get even more expensive in the short term.

That’s why a personal loan may no longer be the affordable option you’d expect it to be. And unfortunately, this holds true even if you have excellent credit.

What’s more, if your credit is pretty poor, now may not be a good time to take out a personal loan at all. You could get stuck with a high interest rate that makes your debt completely unmanageable.

When will personal loan rates come down?

The Fed likes to see inflation around the 2% mark, and the most recent Consumer Price Index had it at 6%. So clearly, there’s still work to be done. And until inflation really starts to dip, we can expect interest rate hikes to continue.

If your need to borrow money isn’t so pressing, then you may want to hold off on taking out a personal loan and put your plans on hold. If you wait a year, you may find that it’s less expensive to borrow.

And if you’re going to move forward with a personal loan anyway, try your best to boost your credit score a bit before submitting that application (unless it’s already in the upper 700s or higher, in which case, you’re pretty set). The more creditworthy a borrower you come across as, the more likely you’ll be to snag somewhat of a break on your personal loan.

You can boost your credit score by doing things like paying bills on time and correcting errors on your credit report. Credit reports are still free on a weekly basis this year, so there’s ample opportunity to get a hold of yours and make sure it’s accurate.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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