The Motley Fool Take
In recent years, cloud computing has made traditional cybersecurity solutions obsolete. Sensitive data and applications are now in the cloud, so routing traffic through a separate data center for threat testing, and then forwarding that traffic onto the internet. meaningless. Instead, it makes much more sense – and is more effective – to enforce privacy policies on the internet itself. That’s what Zscaler does.
Zscaler is the gold standard in cybersecurity, operating the largest secure cloud platform in the world. Its platform, which offers a secure service advantage, relies on artificial intelligence to inspect network traffic, block threats, and securely connect employees to corporate resources and the open internet. The company also offers cloud workload protection and digital experience tracking.
Zscaler processes 240 billion requests and blocks 150 million threats daily. Financially, the company is growing at breakneck speed. In the last quarter, revenue grew 63% year-over-year to $287 million, while billing calculations grew 54%.
The continued adoption of cloud services will be a constant windfall for Zscaler, helping it maintain or even accelerate its momentum. Long-term investors should take a closer look at Zscaler. (The Motley Fool owns shares and recommended Zscaler.)
Ask the scammer
From MB, Bixby, Okla: Does it make sense to make a mortgage payment with money from my Traditional IRA? Should I?
The Fool replied: Think carefully about the decision. If you’re under age 59 and a half, traditional IRA withdrawals are taxed at your ordinary income tax rate — and you could also face a 10% early withdrawal penalty. Additionally, the amount you withdraw will increase your taxable income, which can push you into a higher tax bracket. Meanwhile, writing off your mortgage means you’ll lose the mortgage interest tax deductions you may have claimed.
Compare your mortgage interest rate to the growth rate you’d expect on your IRA holdings. Paying off any of your mortgage early will keep you from paying interest on it for the rest of your years. If your mortgage is charging 4% interest and you’re hoping to get a return of 6% or 8% or more on your IRA investments, you could lose your chance. Withdrawing your IRA also means that the money won’t grow for you over time. That’s a big deal, since most of us need to save for retirement.
You might consider keeping your IRA and making extra mortgage payments whenever you can. A few extra payments each year can cut years off your loan and save you thousands of dollars in interest payments.
From PC in Cheyenne, Wyo.: Can I transfer my entire stock portfolio from one brokerage firm to another without having to sell the shares and avoid generating any taxable gains?
The Fool replied: You certainly can. Your new broker should be able to guide you through the process. If the stock is in a tax-advantaged account, read the tax rules carefully first.
The Fool’s School
If you’re just saving a little and investing for retirement while hoping for the best, you could be jeopardizing your future financial security. See if you’re making any of the following errors:
Not saving enough. Some suggest saving 10% of your income, but that may not be enough, especially if you haven’t already saved and invested it all. See if you can get 15% or even 20% or more off. Remember that the earliest money you invest will have the most time to grow for you. They can be your most powerful investment.
Ineffective investment. Bank accounts, money market accounts, and government bonds may be safe, but until interest rates are much higher, your money won’t do well in them. Look to the stock market to build lasting wealth. If you’re decades away from retirement, consider keeping most or all of your dollars in stocks. Also give careful consideration to simple, low-fee index funds, such as those that track the S&P 500.
Borrow or withdraw cash from retirement accounts like 401(k)s and IRAs. If you’re changing jobs and your 401(k) doesn’t have much in it, consider rolling it into an IRA or into your new employer’s plan. Let that money keep growing for you.
No plan. Take a moment to read about investment and retirement matters, and come up with a plan. Figure out how much you should accumulate before retirement – and how you’ll earn it. Try to determine when you should retire; Doing so too soon can deplete your money too quickly. Come up with a withdrawal plan to help your money last as long as possible. Fixed annuities are worth considering for the reliable income they can provide.
Do not seek help. Searching online for “retirement calculators” can produce a number of useful tools. Also consider consulting a fee-only financial advisor; you can find some at NAPFA.org.
My worst investment
From CS, online: My dumbest investment is in real estate, not stocks.
After buying a co-op in Hawaii for just under $1 million in 2013 and spending nearly $500,000 on renovations, it proved difficult to sell. Despite being in a prime location, it doesn’t have parking, and although the building itself is beachfront, my particular apartment is not. On top of that, the cooperative voted to do a major whole building renovation. Although I already have the pipes replaced in my unit, the cooperative requires me to pay my entire share for this project. My total cost was about $180,000.
While I eventually sold the apartment, between the cost of the pipeline project, the interest on the line of credit, and the management fees on my home, I realized a loss of about $300,000 – or almost 20% – on a property that I held for about eight years. There must be a better place to put my money.
So this is a learning experience for sure. I learned that liquidity – the ability to turn an investment into cash – is important. And so is considering all the downsides of an asset, even if they don’t bother you. And beware of collaborators, as they can impose unexpected expenses on you.
The Fool replied: Those are excellent lessons – thanks for sharing them!
Who I am?
I trace my roots back to 1731, when my founder registered me and created one of the world’s oldest brands. From 1851 to 1915, I won many awards and medals at fairs around the world. Today, based in Germany, I am a respected name in the field of cooking and household knives, cookware, scissors, kitchen tools and beauty tools, with brands such as Staub , Ballarini, Miyabi, Demeyere, BSF and Fontignac. I earn close to a billion euros annually and my logo features twins. Since 1970, I have been a member of the Werhahn Group. You could say I’m on the cutting edge. Who I am?
Can’t remember last week’s question? Find it here.
Last week’s quiz answers: Brown-Forman
