The convertible debentures I bought for the purpose of funding my mortgage were all in the same basic category. They were all for the same purpose, and were all from the same company with the same amount of capital. I found that the level of self-awareness it brought with it was one that was just as important to me as the underlying investment.
In case you didn’t know, convertible debentures are a little like real life certificates. You put down a certain amount of money in a certain amount of time. When you’re done with the investment you can then exchange it for the same amount of money back. The way they work is that if the market goes down the stock will be worth less in the future. If the market goes up then the stock will be worth more in the future.
It’s an interesting twist on the real world. In traditional real life the price of a company or stock is set by the market, and it can only go up or down. If the market goes up then the company will rise in value, but if the market is down, then the company will fall in value. To some people this is the whole basis of the system, but to me its just one more way that it’s managed to get me really excited.
The real difference between companies and stocks is that companies are publicly traded and companies can only go up or down. But unlike stocks the price of a company’s shares can change without the company’s being able to see the effects of those changes. The stock market is also much more volatile, and the more times you buy or sell a company’s shares, the more your profits go down. So basically, it’s a way for companies to hide their true value in the market.
Its also been a while since I was able to buy a stock, so that’s definitely a big reason why I always try to buy more. But when I do buy a stock, I always do it in increments. I buy a lot of shares at once, which I think will help me time the purchase of shares right.
Yeah, stock trading is a big reason why I buy shares, as it helps me time the purchase of shares, and also helps you do the math. But the problem with it is that in the stock market, for every dollar you buy or sell, you have to pay taxes. So every time you make a trade, you have to pay taxes. That means if you spend $40,000 buying or selling shares, you have to pay $30,000 in taxes.
The good news is that you can buy convertible debentures for a fraction of a penny, which means you don’t have to pay taxes. I know, you want to get rich quick, but it is much more convenient to pay taxes one time and then just buy the shares. That’s not the case though for the more traditional ways of investing (dividends and stocks) where you have to pay taxes every time you invest.
The idea of owning a convertible debenture is that you invest in a company that will pay you a certain amount of dividends per year. What you can do is buy shares in a company that pays you a certain amount of dividends every year. The problem with this method is that your investments are not tax free. It’s possible to invest in a company that pays you a certain amount of dividends every year that pays you less than you invested originally.
That’s the problem. When you buy a convertible debenture, you are effectively buying a company that pays you a certain amount of dividends every year that you can’t keep. Like if you invested in a company that pays you a certain amount of dividends every year and then that company goes out of business, you are effectively still paying for the company’s dividend payments, even though you are now investing in a company that pays you less than you invested.
That is the real problem with convertible debentures. When you invest in a company that pays you a fixed amount of dividends regardless of how many years it takes for the company to grow, you are effectively buying a company that pays you less than the amount you originally invested in the company.