About the Book
Praise for Break Down Your Money "Tracy Byrnes writes like she speaks on FOX-clearly, passionately, and yes, lovingly. She is that rare expert who helps enrich your portfolio and your soul. You can do both, and Tracy shows you how. Others talk about what your goals should be. For the first time, finally, someone who shows you how to reach them in finances, and in life."
—Neil Cavuto, FOX News Channel, FOX Business Network
"Break Down Your Money is unique-smart, wisecracking market insights. You'll learn and laugh, a lot."
—Dan Colarusso, Managing Editor, Conde Nast Portfolio.com
"Tracy Byrnes is truly one of the best at helping investors get a grip on their finances. In Break Down Your Money, she delivers on that promise so eloquently-with the kind of bite-size information and entertaining flair that makes her a TV standout. This is one money book you won't want to put down."
—Jennifer Openshaw, author, The Millionaire Zone, host of ABC Radio's Winning Advice
"Being in the financial business, I have read plenty of books about the markets, and would never use the word 'fun' to describe any of them. Until now. Tracy paints a colorful picture of the markets. Her book is an entertaining, well-informed, fun read for the expert and the novice alike."
—Steven Grasso, Floor Governor at the NYSE, Managing Director, Stuart Frankel & Co.
"Tracy offers a comprehensive walk through the basics of finance in an easy-to-understand manner. A great read!"
—Todd Harrison, founder and CEO, Minyanville Publishing and Multimedia, LLC
"As a money manager, university professor, financial writer, and frequent media guest, I am constantly challenged with the objective of explaining complex concepts to an audience that is trained to focus on sound bites and instant messages. You have to boil down these complex concepts to a quick and digestible form accented by down-to-earth language and humor when necessary. Tracy Byrnes has accomplished these goals in Break Down Your Money and, in the process, makes learning about financial and money management more enjoyable to the reader. I wholeheartedly recommend Break Down Your Money to readers of all ages and investment skill levels."
—Scott R. Rothbort, founder and President, LakeView Asset Management, LLC, Professor of Finance, Stillman School of Business, Seton Hall University, founder and Manager, TheFinanceProfessor.com
"Tracy has a unique knack of explaining the market to folks who are not 'in the market.' It is really a wonderful gift. A must-read for anyone wanting to invest and who is too overwhelmed to dive in."
—John Layfield, CEO, Layfield Energy, and, as WWE wrestler John "Bradshaw" Layfield, the longest reigning World Champion in SmackDown history
Table of Contents:
Foreword xi
Introduction xiii
Acknowledgments xv
Part I Be An Owner, Not an Employee 1
Chapter 1 To Market to Market, to Buy a What? 3
So What Exactly Is the Stock Market? 3
Buy a Stock and Become a Restaurateur 7
Look to the Indexes for the Market Scoop 10
Wrap-Up 16
Chapter 2 The Lamborghini Murciélago LP 640
Roadster: A Lifetime of Dividends 19
The Derivation of Dividend 21
Dissecting a Dividend’s Date 23
Rev the Engine with Some Ratios 25
Drive through the Financials 25
It’s All About the Little Things 26
Get To Know a DRIP (Dividend Reinvestment Program) 28
What’s a DRIP? 28
Of Course, the Company Benefits, Too 30
So How Do You Find a DRIP? 31
DRIP Downers 32
Wrap-Up 33
Chapter 3 Bond, James Bond 35
Bond with the Family 36
The Mature Bond 37
A Bond’s Yield 38
Wrap-Up 39
Chapter 4 Mutual Funds and ETFs: For Folks on the Go 41
Mutual Funds: Funds for Kegs 41
Mixing in Exchange-Traded Funds 53
Wrap-Up 59
Part II Look under the Hood 61
Chapter 5 Navigating the Financial Statement: Your “Just Get to the Good Stuff” Guide 63
Find the Financials (Hint: They’re in the Annual Report) 64
Where to Begin 66
Wrap-Up 68
Chapter 6 Auditing Your Potential Investment 69
Open the Company Checkbook: The Balance Sheet 69
Check the Company Report Card: The Income Statement 77
Wrap-Up 85
Chapter 7 Cash Is the Real Deal. Earnings Reports Are Not. 87
Find Your Two Dollars on the Cash Flow Statement 87
Earnings Release: The Ultimate Optimist 93
Wrap-Up 99
Chapter 8 Breakfast with the Federal Reserve: Getting the Economic Porridge “Just Right” 101
Where Did the Fed Come from and Why Do We Need It? 102
Inflation: Bad for the Porridge and the Economy 103
Recession: Bad for Your Hairline and the Economy 104
How the Fed Keeps the Porridge “Just Right” 106
Adjusting Interest Rates: The Long, Slow Simmer 108
Testing the Porridge 113
Wrap-Up 115
Part III Decisions, Decisions 117
Chapter 9 Will You Still Love Me Tomorrow?: Growth, Value, and Momentum Stocks 119
Growth Stocks: Hidden Gems 120
Value Stocks: Till Death Do Us Part 122
Momentum Stocks: One Night Stands 123
Wrap-Up 125
Chapter 10 Evaluating Cars and Stocks 127
Price-to-Earnings Ratio 127
Price-to-Book Ratio 130
Growth Rate 132
Knowing What’s Important: A Case-by-Case Decision 135
Hard to Get Good Help 136
Wrap-Up 136
Chapter 11 The Ins and Outs of IPOs 139
Pop Goes the IPO 140
A Beneficial Blow 143
Knowing When to Make the Move from Public to Private 146
Take That IPO on the Road 147
Sorting through the S- 1 149
Getting a Ticket to the Hottest Party in Town 152
Leave the Stock, Take the Fund 156
Wrap-Up 157
Chapter 12 Options and Futures 159
An Introduction to Options 159
Check the Expiration Date: Options Expiration Week 165
Use the Futures Market to Foresee Market 167
Wrap-Up 172
Chapter 13 Bringing It All Together 175
1. Be Specific about Your Goals 176
2. Spread the Risk Around 176
3. Don’t Marry Your Holdings 179
4. Do Your Homework 181
5. Don’t Forget to Pay Uncle Sam 184
Wrap-Up 186
Appendix 189
About the Author 193
Index 195
About the Author :
Tracy Byrnes has been a financial journalist for over ten years, covering tax, accounting, and personal finance issues. She is currently an on-air reporter for the FOX Business Network. Prior to that, she wrote weekly finance columns for the New York Post and TheStreet.com, where she also did daily videos for the Web site, and was a regular guest on numerous financial television shows. Before diving into journalism, Byrnes spent five years as a senior accountant with Ernst & Young LLP. Byrnes has an MBA in accounting from Rutgers University and a bachelor of arts in economics and English from Lehigh University.
