The Motley Fool’s Take
In recent years, cloud computing has made traditional network security solutions nearly obsolete. Sensitive data and applications now live in the cloud, so it makes no sense to route traffic through a private data center for threat inspection and then forward that traffic over the internet. Instead, it makes much more sense – and it’s more efficient – to enforce security policies on the internet itself. This is what Zscaler does.
Zscaler is the gold standard in network security, leveraging the world’s largest cloud-based security platform. Its industry-leading security platform leverages artificial intelligence to inspect network traffic, block threats, and securely connect employees to corporate resources and the Internet open. The company also offers cloud workload protection and digital experience monitoring.
Zscaler handles 240 billion requests and stops 150 million threats daily. Financially, the company is growing at a steady pace. In its most recent quarter, revenue soared 63% year-over-year to $287 million, while calculated billings rose 54%.
The continued adoption of cloud services should be a continued tailwind for Zscaler, helping it maintain or even accelerate its momentum. Long-term investors should take a closer look at Zscaler. (The Motley Fool owns stock and recommended Zscaler.)
ask the fool
From MB, Bixby, Okla. : Does it make sense to pay off my mortgage with money from my traditional IRA? Should I?
The madman responds: Think carefully about the decision. If you’re under age 59.5, withdrawals from a traditional IRA will be taxed at your ordinary tax rate — and you may also face a 10% early withdrawal penalty. Also, the amount you withdraw will increase your taxable income, which could put you in a higher tax bracket. Meanwhile, erasing your mortgage debt means you will lose any mortgage interest tax deductions you may have claimed.
Compare your mortgage interest rate to the growth rate you expect for your IRA holdings. Paying off part of your mortgage earlier saves you from paying interest on that amount for the remaining years. If your mortgage is charging you, say, 4% interest, and you’re expecting a return of 6% or 8% or more on your IRA investments, you could lose ground. Cashing out your IRA also means the money won’t be able to grow for you over time. This is a big problem, because most of us need to save for retirement.
You might consider keeping your IRA and making extra payments on your mortgage whenever you can. A few extra payments each year could save you years on the loan and thousands of dollars in interest payments.
From PC in Cheyenne, Wyo. : Can I have my entire stock portfolio transferred from one brokerage to another without having to sell the stocks and avoiding taxable gains?
The madman responds: You certainly can. Your new brokerage should be able to guide you through the process. If the stock is in a tax-advantaged account, find out about the tax rules first.
school of fools
If you only save and invest a little for your retirement while hoping for the best, you are probably putting your future financial security at risk. See if you are making any of these mistakes:
Not saved enough. Some suggest saving 10% of your income, but that may not be nearly enough, especially if you haven’t been saving and investing since the beginning. See if you can save 15% or even 20% or more. Remember that your first dollars invested will have the longest time to grow for you. They can be your most powerful investments.
Not investing effectively. Bank accounts, money market accounts, and government bonds can be safe, but until interest rates rise a lot, your money won’t perform well. Look to the stock market to build long-term wealth. If you’re decades away from retirement, consider keeping most or all of your money in stocks. Also pay special attention to simple, low-cost index funds, such as funds that track the S&P 500.
Borrow or cash out retirement accounts such as 401(k) and IRA. If you change jobs and your 401(k) doesn’t contain much, consider turning it into an IRA or your new employer’s plan. Let this money continue to grow for you.
Not having a plan. Take the time to learn about investment and retirement issues and develop a plan. Determine how much money you should accumulate before you retire and how you will earn it. Try to figure out when you should retire; doing it too soon can deplete your funds too quickly. Develop a withdrawal plan to help your money last as long as needed. Fixed annuities are worth considering for the reliable income they can provide.
Don’t seek help. An online search for “retirement calculators” may reveal some handy tools. Also consider consulting a paid financial advisor; you can find some at NAPFA.org.
My dumbest investment
From CS, online: My dumbest investment was 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 to be a tough sell. While in a prime location there was no parking space, and although the building itself was beachfront, my particular unit was not. To top it all off, the co-op voted in favor of a massive plumbing renovation for the entire building. Even though I had already had pipes replaced in my apartment, the co-op asked me to pay for my full share of this project. The whole thing cost me about $180,000.
Although I eventually sold the unit, between the cost of the pipe project, the interest on my home equity line of credit and the management fees, I realized a loss of approximately $300,000 – that’s almost 20 % – on a property I owned for about eight years. Surely there had to be a better place to put my money.
So it was a learning experience for sure. I learned that liquidity – the ability to turn an investment into cash – is important. The same goes for all the downsides of a property, even if they don’t bother you. And be careful with co-ops, as they may be able to impose unexpected expenses on you.
The madman responds: These are great lessons – thank you for sharing them!
Who am I?
My roots date back to 1731, when my founder registered me and created one of the oldest brands in the world. From 1851 to 1915, I won many prizes and medals at the Universal Exhibitions. Today, based in Germany, I am a respected name in kitchen and household knives, kitchen utensils, scissors, cookware and beauty tools, with brands such as Staub, Ballarini, Miyabi, Demeyere, BSF and Fontignac. I collect almost a billion euros a year and my logo represents twins. Since 1970 I have been part of the Werhahn Group. You could say I’m cutting edge. Who am I?
Don’t remember last week’s question? Find it here.
Answer to last week’s quiz: Brown Forman