Archives
- March 2011 (323)
- February 2011 (295)
- January 2011 (284)
- December 2010 (191)
- November 2010 (123)
- October 2010 (110)
- September 2010 (74)
- August 2010 (60)
- July 2010 (41)
- June 2010 (57)
- May 2010 (55)
- April 2010 (41)
- March 2010 (1550)
- February 2010 (657)
- January 2010 (316)
- December 2009 (558)
- November 2009 (1346)
- October 2009 (653)
- September 2009 (240)
- July 2009 (200)
- June 2009 (430)
- May 2009 (19)
- April 2009 (56)
- March 2009 (158)
- February 2009 (6)
- January 2009 (78)
- December 2008 (28)
- November 2008 (104)
- October 2008 (192)
- September 2008 (72)
Monthly Archives: October 2008
How to Improve Your Credit Rating
Some people feel that once they are in financial trouble the situation is hopeless and there is no way out. That is simply not the case. If you have a low credit rating there are things you can do to turn things around. Now we will discuss a few ways to do so. Continue reading
Alternative Investing Forget Buy and Hold
Author : Rachel Victoria
Am I Crazy?
Before you start raving that I am a lunatic for disagreeing with the sage advice given to you over the years by:
1 Financial Experts
2 Your Financial Planner
3 Wall Street Professionals
4 Of course, Dear old Dad
Please consider the following challenges with the Buy & Hold philosophy
What is Buy & Hold ?
In simple terms, the stock market often falls substantially about every 5 7 years and the stock devaluations may sometimes last 2 4 years At that time, an investor continuing with the Buy & Hold philosophy would do nothing This approach assumes that the stock market will eventually recover and it would be better to hold steady rather than try to time the selling and buying of stocks as the market recovers
Well, I agree with half of that Yes, the market generally does recover over time and it is difficult for the average investor to predict both the decline and the rebound in the stock market and to actually sell your stock high and buy low However, there are significant problems with the Buy & Hold approach
What is Wrong with Buy & Hold ?
First of all, if you are trying to build real wealth for retirement utilizing the Buy & Hold strategy, it is usually going to take you 30 40 years because of substantial losses every down cycle that result in overall low returns Consider this:
1 The Dow Jones Industrial Average (a blue chip stock indicator of the overall stock market) had an all time high of 11,522 as of 01/07/2000
2 Today, over eight and one half years later, on 09/22/08 the Dow Jones closed at 11,015
3 In between those two dates, the Dow Jones went as low as 7,702 on 9/27/02 and hit an all time high of 14,066 on 10/5/2007 with a lot of gyrations in between
4 It would be fair to say that anyone holding a similar Dow Jones portfolio on 1/7/2000 and used the Buy & Hold approach over the next eight and one half years would have gone for a wild roller coaster and be left with a 4 4 loss on their portfolio
5 Add to this the possibility that you may have had to pay taxes on dividends and capital gains if you were in a mutual fund, and this return declines further
6 Also, in my personal experience, the same down cycles and losses apply to the Real Estate Market as well
7 Oh and by the way, Inflation has depleted the value of your portfolio around 3 each year
It begs the question, how can you effectively accumulate Real Wealth if you keep losing a large percentage of your principal every 5 7 years and sit idly in down markets for another 2 3 years? No wonder it takes people 30 40 years to accumulate for a decent retirement portfolio
Another Problem
Institutional Investments take a portion of your profits as a fee, resulting in lower returns for you
If you are like most investors, you don t have the time or expertise to select your own stocks and monitor them, so you would normally utilize mutual funds and variable annuities to invest for you These institutional investments must cover their expenses:
1 An annual Management Fee
2 Huge Fund startup Fees
3 SEC regulation
4 Marketing Costs
This may all be fine in a profitable year, but when you have a losing year, you are still charged for all of these expenses (or the fund would go out of business) That s right, fund managers can lose 20 of your money one year and still bring home a six figure income and millions for their company!
And, when you have a profitable year, the Management Fees are never capped
By the way, if you think that investing in individual stocks eliminates these hidden expenses, consider the common million dollar CEO salaries, perks, and corporate expenses that cut into shareholder s profits
So, what s the solution to help you create Real Wealth? You need to somehow achieve consistent high returns You need to limit losing your principal You need to diversify And, you need to stop giving away your profits In short, you need a Strategy that gives you much more than what Buy & Hold has to offer
Copyright (c) 2008 passiveincomeopportunities net, All Rights Reserved
This article may be freely used and transmitted, but only in it s entirety, without any changes to it s content or linking
Rachel Victoria, is a former CFP with an MSFS in Financial Planning. Ms. Victoria owned an American Express Financial Services Franchise for 20 years. Please visit my website to learn more: http://www.passiveincomeopportunities.net/rachel/members.php Continue reading
Surviving a Stock Market Crash 5 Tips to Show You How
Author : Fern LaRocca
It is scary when the money you were counting on for retirement, education, or your home is rapidly declining in value Don t panic though Here are some 5 tips to help you survive:
1 People are living longer:
Males that reach the age of 65 nowadays will have a 49 chance of living to 86 Women will have a 49 chance of living to age 89 With that in mind, it s obvious that you will still need the help of equities (stocks and stock mutual funds) to help you grow your portfolio and keep ahead of taxes and inflation
Don t abandon these investments
2 Rebalance where necessary
Take a look at your portfolio winners If you had targeted say 20 in international and it is now 30 of your portfolio Sell enough to bring it back down to 20 and use that cash to invest in another sector that you don t own Remember that you don t have a realized loss until you sell Take just enough of a loss to offset the gain that you took above, and then you will pay no tax on the transaction
3 Diversify
Don t have any winners? Then you weren t diversified enough to begin with You should have had enough in each asset class (large cap, mid cap, small cap, international, etc ) and each style (growth, value, blend, balanced, etc ) to create an investment plan to reach the return you need with the risk you are comfortable with, and in the time period that you targeted Believe it or not, there are some mutual funds that have managed to keep their returns higher than the more than 23 loss of the S& P500 Index this year There are a lot of free resources such as morningstar com that will give you the data you need to diversify and feel better about your holdings
4 Make decisions now
Act now Don t look for bottoms You don t ever know where the bottom is but you do know that stocks are steadily getting cheaper and there are some fantastic buys out there You may not have control over the market but you do have control over what you buy and what you sell Don t wait
5 Get a guaranteed income for life
Along with positions of cash, bonds, and equities, a fixed annuity should play a part in a portfolio of someone close to working part time or retiring altogether An annuity is an insurance contract that in return for a lump sum of money gives you a steady fixed stream of income that is guaranteed for your life or the life of you and your spouse For people who want to spread out their risk, this is an excellent addition to a portfolio The downside is that you don t get any inflation protection since the payments remain the same The upside is that you get an income stream guaranteed by the insurer so you don t have to worry about managing the money Of course, you need to make sure the insurer is financially strong enough to be able to pay you throughout the term of the contract
People like Floyd Odlum made millions during the Great Depression, not by fleeing into cash and bonds but by buying into stocks as the market dropped His motto during the crash was: There s a better chance to make money now than ever before
Don t lose this opportunity to arrange your portfolio to meet your future needs Follow the five steps above, and you won t have to worry about what the stock market is doing ever again
Interested in more tips to survive this crisis? Get the Whole-Hearted-Way eNewsletter written by Fern Alix LaRocca, a fee-only Certified Financial Planner TM with over 24 years in the industry at http://www.wholeheartedway.com. Continue reading
Why Buy Combined House Insurance
Author : David Thomson
If you are looking for home insurance, have you ever considered buying a combined home insurance policy? This is where you buy both your buildings insurance and contents insurance in one package, often getting a discount for doing so, from the insurer
Certainly, combined home insurance is any essential consideration for all homeowners as if the worst should happen and you have to totally rebuild your home or replace the contents it would be a total disaster if you were without adequate insurance cover It goes without saying that it would be hard enough losing memories in your home, without facing the expense too
So, what are the two elements to combined home insurance cover?
Home contents insurance cover will help to recoup the costs of replacing lost or damaged belongings within the home as well as furnishings This includes things like pictures, cooking utensils, clothing and CDs
The structure of your home, plus walls, and often sheds and greenhouses too, are covered by buildings insurance cover This will include fixtures and fittings such as fitted wardrobes and bathrooms
Both these elements of home insurance cover gives you the peace of mind that you would at least not have to face financial distress when finding repair costs or replacing items Losing your belongings or, even worse, the actual roof over your head, would mean you would have to start from scratch again and without cover you would be under severe financial pressure
So, what do you need to consider when taking out a combined home insurance policy?
Look at things such as any excesses you would need to pay on in the event of a claim By offering to pay more on the excess, more you can make savings on the cost of taking out cover
Security measures can help you to shave a little off the amount you have to pay for your policy For example, some insurance cover companies will supply a list of recommended locks for windows and doors, along with burglar alarms and by installing these you could make savings on the cost of your protection
Do make sure that you do not underinsure when taking out contents insurance cover as the part of the cost of the premium is based on this figure Take an inventory when deciding how much insurance cover you need for your contents, including absolutely everything You may well be surprised how much they all add up in value to
Finally, however boring the small print is you do have to read it if you are to be sure of what the cover entails As an example, valuable jewellery, home office equipment and items over so much are probably not included as standard, so you would need to pay an additional premium in order to protect these
Always check out the different options offered by providers for taking out combined home insurance Buying the two policies separately can often cost you more, so do your homework and find out where and how you can get the best deal
David Thomson is Chief Executive of BestDealInsurance (http://www.bestdealinsurance.co.uk) an independent specialist broker dedicated to providing their clients with the best deal on their home, motor and life insurance. Continue reading
The Lasting Effects of Bankruptcy on Your Financial Life
Choosing bankruptcy is never an easy decision, and the sure and certain knowledge that your credit will be affected in a major way for many years afterward is sobering to say the least, but sometimes this is truly the only option available to some. Let’s look at some of the lasting effects of bankruptcy on not only your financial well-being, but also your psyche. Continue reading
Budget Budging The Key To A Debt Free Life
Author : Jenni Snook
Before I begin, let’s get one thing straight Your budget is not a constraint It’s a powerful tool to give you the life you desire
You may not like the term, personal finance budgeting Or let alone, personal finance planning I know I don’t It’s 3 words long and anything more than 1 word long already begins to turn us off
Nevertheless, whether we do or don’t like the term, it does not matter The bottom line is that we are better off understanding its meaning and the role it can play in shaping the life that we want
Why? Because they give us tools with which we can build the lifestyle we all desire Who doesn’t want a debt-free life? If you didn’t, you wouldn’t be reading this article in the first place
So, how do you achieve a debt free life? I’ll make this as easy as possible Two words: Budget Budging Try to repeat those words 10 times as quickly as possible It’s quite fun
Whatever you do, don’t ever forget these 2 words because it will become a central part of your personal finance planning
So what is Budget Budging? It means taking control of your budget rather than letting your budget take control of you The key to all this is dictating your budget If you are able to dictate your budget, then you can dictate your lifestyle Simple as that
First things first Set up a budget that you are able to live with, and stick with it Keep a record of all the money that you spend, whether it be cash, check or credit card Keep a record of all expenses
By doing this, you know where your income is going You also know what steps you must take to participate in personal finance budgeting and create yourself a good budget However, it must one that you are able to live comfortably with and make really large strides towards budgeting all your debt away completely
Second point Eliminate waste As you go through all your expenses, you will realise how wasteful you are with your money sometimes Here’s where you have to be ruthless No ifs, no buts
This may involve making some sacrifices One way to get around this is to think deeply and decide what things do you really need Be honest with yourself Don’t hesitate to forego some luxuries that you don’t really need
The reason why people don’t cut such waste is because they think short term They think about the short term pain, not the long term gain
In the beginning, you may feel as if personal finance budgeting is a frustrating and complicating process, but once you have successfully created a budget for your finances that you can live on, you will see that the dedication of your time and effort was well worth the frustrations and complications There’s nothing like a debt free life, right?
Jenni Snook is the chief writer of www.HealthyWealthySoul.com, a website dedicated to giving people the advice and tools to achieve both financial and spiritual happiness in their lives. Continue reading
A Bountiful Thanksgiving Dinner On A Budget
Author : Debbie Allen
When the holiday season rolls around many of us immediately start thinking about how it is going to affect our budget It is not that we do not enjoy the holidays but unfortunately we have to be realistic and work with limited funds We all want to have a bountiful Thanksgiving dinner, but doing that on a budget can be trying
There are ways to save on your expenses though If you are having guests consider allowing each of them to bring their specialty food item Almost everyone has at least one dish that they feel confident in preparing If each guest will bring a dish then your work will be much less and the expenses of the meal will be minimal
If you go that route be sure to coordinate the dishes The point is that you do not want to end up with a dozen desserts and no side dishes
Another way to go about the distribution of food items is to give assignments or to use the old-fashioned method of drawing the assignment from a cup This will ensure that you end up with all the food items that you want at your Thanksgiving dinner
Typically every home in America will have leftovers to deal with after the meal This can be wonderful but it can also mean that you spent more than necessary for you holiday meal Planning ahead can prevent such an issue Cook only what will be needed for the holiday meal
Many restaurants offer special Thanksgiving dinners This can actually save money because you will only pay for what you eat and you will not have to deal with the preparation or the clean-up
Another thought is buying the dinner in a box from a grocery store Many of the major chains offer the turkey dinner for a reasonable price Then you simply add a few special touches of your own and your meal is complete Easy preparation and low cost
Buying food ahead of time can ease the cost of the huge meal Some people buy their frozen turkey early and begin storing non-perishables early in the year This prevents the sudden cost of all foods from impacting your budget at one time
Keep the reason for the holiday in mind Giving thanks for all you have is what is important Opting to have a meal that is not quite traditional in order to save money is perfectly acceptable The holiday is about you and your thankfulness Creating unique family traditions add to the fun and memories Do not be afraid to be original!
Find out how you can get a free report on saving at the grocery store and another on saving at the gas pump by visiting:
http://www.money-savingideas.com
Debbie Allen is an Internet marketer and a writer. Continue reading
College Tuition How Much You can Expect to Pay
Author : Beth Ibarra
It seems like it is getting harder and harder to buy something that does not cost a lot with the economy of today Prices are increasing everywhere from at the gas pump to the clothing stores So if you are someone that has been thinking about attending college, or is already attending college and are afraid that your class bill will keep increasing, you are probably right
College tuition tends to be a fairly expensive thing This can scare some people away from continuing their education because they are afraid that they will not have enough money to cover the bill If you are hoping that college tuition prices will go down, you will probably be waiting a long time, because it is standard for the tuition to rise at least by a small percentage each year, no matter what the state of the economy is
However, even though the cost of college tuition may be increasing more and more each year, you should not let this deter you from continuing your education Earning your college degree is one of the best choices that you can make to improve your financial condition With the struggling economy, you will likely need a college degree in order to find a good paying job, or even find any type of job because companies seem to be tightening their wallets more with each passing week
If you are worried about coming up with the money to pay for your college tuition, you should look into the resources that are available to help you keep down the costs of the bill If it is graduate school that you are planning on attending, you can look into the option of graduate assistantships, because you will usually be given a reduced tuition price if you are awarded an assistantship
If you are thinking about attend undergraduate school, you can look into the option of working a work study position Although you probably will not be awarded a lower college tuition price, you will still be earning a paycheck to help with the class bill while you are in college
You can also apply for scholarships to help with the tuition bill Scholarships are a great resource available to students because if you are awarded one or more, that is money that will help pay your class bill that you will not have to pay back You may even be able to cover almost or your entire bill depending on how many scholarships you are awarded
You can also look into the option of grants Depending on your situation, you may qualify to apply for grants to help pay for your college bill There are many types of grants available, so there may be more than one that you qualify for
College internship opportunities are also available for you if you are a student There are many college internship opportunities that pay well, so you will be able to save up money quickly to pay for college In addition, a college internship will give you the experience needed to land a good paying job
No matter what your financial situation is, if you are thinking about going to college but are afraid that you can not afford the price, look into your options before dismissing the idea Although the price of college tuition may be increasing each year, there are options available to help with the price
More information on College Works Painting, College Works Painting estimates and College Works Painting home repair opportunities for students in your area is just a click away. Continue reading
Posted in Finance
Leave a comment