Monday, March 31, 2008

Heres a joke to break up your work day...

Marvin was a 14-handicapper, but one day he walked up to his club pro, a scratch golfer, and challenged him to a match. He proposed they put up $100 each on the outcome.
"But," Marvin said to the pro, "since you're so much better than me, you have to give me two 'gotchas'."
"A 'gotcha'?" the golf pro asked, "what's that?"
"Don't worry," Marvin replied, "I'll use one of my 'gotchas' on the first tee and you'll understand."
The golf pro figured that whatever 'gotchas' were, giving up only two of them was no big deal - especially if one had to be used on the first tee. So he agreed to the bet, and the pro and Marvin headed to the first tee to start their match.
Around four hours later, club members were amazed to see the pro handing Marvin $100.
The pro had lost to Marvin!
The club members waited for the pro to enter the clubhouse, then asked him what happened.
"Well," the pro said, "I took the club back on the first tee, and as I started my downswing, Marvin knelt behind me, reached up between my legs and grabbed my crotch, and yelled 'Gotcha!' "
The club pro just shook his head. "Have you ever tried to play 18 holes waiting for the second 'gotcha'?"

Thursday, March 27, 2008

Where to stash your cash...an article from Fortune.com

(Fortune Magazine) -- Where do I keep my cash? During times of financial crisis (like now), that's the question on many investors' minds. And when the financial crisis involves the credit markets (as it does now), the answer isn't so simple.
Keeping money in "cash" generally means putting it where it is guaranteed not to lose value and can be accessed quickly, with no fees or taxes. As some investors have learned the hard way, not all investments touted as "cash-like" meet those requirements.
The first scare came in August, when it turned out that money-market funds, long thought to be super-safe, had been buying risky mortgage-backed bonds. While no investors have lost money, fund sponsors, including trusted names like Janus (JNS), Wells Fargo (WFG), and Credit Suisse (CS), have had to step in to prevent some funds from registering losses.
Close calls
Just how big a problem is it? In December, Janus took a $16.2 million charge when it bought such securities from its money-market portfolios. "They would rather reach into their own pockets and take earnings losses than incur the wrath of investors by fouling up a liquid investment that is supposed to be fail-safe," says Lipper senior analyst Jeff Tjornehoj.
The second near miss has come in the market for auction-rate securities - essentially long-term bonds that pay interest at a rate determined by periodic auctions. Some individual investors put money into funds that bought auction-rate securities believing they were similar to money-market funds but with slightly higher yields.
However, the credit crunch has put a crimp in the market, and several auction-rate funds, including ones run by Nuveen and Eaton Vance (EV), are frozen. Investors are still earning interest, in some cases at extremely favorable rates, but they can't get their money out.
What to expect
So where does that leave nervous people with money at hand? There are still safe options, but remember that safety means lower yields. "If you are getting more than a market rate on your cash, you are taking some risk, which is not cash investing," says Madelynn Matlock, a director at Huntington Asset Advisors.
Or as Peter Crane, head of money-fund research firm Crane Data, says, "Cash is the money you need on hand, so safety and liquidity are your first concerns. Yield comes after all of that."
If you keep your assets in cash while the storm passes, stick with the classic menu of investment options. That means Treasury bond money-market funds, high-yield savings accounts, and short-term CDs. Those options seem plain, but they offer the safety and liquidity that defines true cash investments. And take heart. You can still find decent yields by shopping around, but you have to shop carefully.
Let's start with the safest investments of all: short-term Treasury bills, or T-bills, which range in maturity from a few days to 26 weeks. You can buy bills directly from the Treasury at treasurydirect.gov; the minimum purchase is $1,000. (On Friday the Treasury Department announced that it would reduce that minimum to $100 as of April 7, in order to open up the market to smaller investors.)
Money-market funds that invest only in short-term Treasury bills were yielding an average of 1.9% recently, according to Crane Data. They carry zero risk of default, and because they are short term, no risk that rising interest rates will reduce their value.
Considering money markets
Bank money-market accounts, insured for up to $100,000 by the FDIC, are another super-safe choice. They recently yielded 3% on average, according to bankrate.com. But some are paying much more: Flagstar Bank in Troy, Mich., is offering 4.18%.
If you don't mind locking up your money for a few months, bank CDs offer similar protection and, sometimes, higher yields. Metropolitan National Bank in New York City is offering 3.46% on a three-month, $2,500 CD, while Corus Bank in Chicago is paying 3.79% on a six-month CD. You can check bankrate.com to look for the best rates.
If you prefer money-market funds, keep in mind that they are not guaranteed to maintain their value. Stick with companies known for low expenses and conservative management, and likely to stand behind their funds, such as Vanguard, Fidelity, and T. Rowe Price. The average money fund yields 3.4%, according to Lipper, and the average tax-exempt money fund yields 2.4% -equivalent to 3.7% for someone in the 35% federal tax bracket.
Finally, remember that inflation - currently running at about a 4% annual rate - erodes the value of cash holdings. So don't keep your money parked forever.
Says Matlock: "Once the market chaos clears, you can take advantage of opportunities you would have to miss if you weren't in a low-yield but secure and liquid investment now."


Possibly try to stay risk free by putting your money in some of the online savings accounts I have highlighted on the page...and some of them have sign up bonuses which you cant complain about. Also, through sharebuilder you could invest in a money market account and get a $50 bonus when you start to invest in it...just a few ideas to help you make more money.

Thursday, March 20, 2008

Put your tax refund to work for you

How many of us are getting tax refunds?

Put that to use, as opposed to buying a PS3, or an XBOX 360, put some of that money to work for you. Either buy some mutual funds, partially fund a Roth IRA, or buy stock you have been looking at. Instead of having your tax refund make you spend hours in front of the TV vegging out, or have a killer time at the bar one night, put that money away and make it work for you. It was probably money you did not expect to be receiving in the first place, so it will not be as painful to kick start your savings.

Or maybe you don't want to start investing just yet, but you want to put it away for a rainy day...then e-mail me and Ill send you an invitation for ING Direct, put $250 in ING, and right away you'll get a 10% gain as you get a $25 bonus for opening an account.

Maybe you aren't getting $250...how about $100, put that in Virtual Bank, you'll get a 20% bonus right away.

If you want, take a look at share builder and use that bonus code to make an easy $50.

If you have any questions on any of the options above, shoot me an e-mail or post a comment.

Friday, March 7, 2008

$50 to help get started with investing

You shouldnt jump into it unless you feel you are prepared for it, but sharebuilder is offering $50 to open up an account with them. Use the promotional code "share50" when you are signing up. A few weeks after your first transaction they will add $50 to your account balance. Let me know if you have any questions or need any suggestions on how you would want to get started.

share 50

Sunday, March 2, 2008

Intro to Investing Part Two

I started the other day giving readers a solid base of information on where they can put their money to make it work for them. I started with Mutual Funds, DRIPS, and Savings Accounts. Here are a few other ways to make your money work for you as opposed to sitting idle...

Index Funds - Like a mutual fund, but has a portfolio put together to match or track a market index (S&P 500, Financials). A benefit to this is you get good market exposure and because it is not as actively managed as mutual funds the operating expenses are lower and the funds tend to have much lower turnover with the holdings which can be beneficial at tax time. Because of the lower expenses and the broad exposure, index funds are said to beat other forms of investments, and it is passive investing, so you dont have to keep an eye on it from day to day and trade. You can buy these anywhere (Scottrade, Schwab, E*Trade), some like many things, may have minimums. But, as Ive mentioned before, you can usually waive the minimum purchase by setting up for an automatic investing plan where they will pull $50 or $100 out of your account monthly to invest in.

Bonds - With bond you are pretty much just loaning money to the government, or the corporation that you purchase the bond through. They have a set period of time, and they have a set interest rate. They are used by various entities (states, US government, companies) to get cash flow for projects they want to undetake. These are fixed income investments, you know how much money you are going to get when you invest in these. You can purchase them from a 30 day period of time up to years. A major concern with bonds is the credit rating of the issuer, you want to buy bonds from a a company with good credit, but by doing so, you get a lower rate of return. Adversely, if you buy bonds from a company with a lower credit rating, the interest rate will be higher, because of course, the risk is higher. Just like lendning money to a friend...if they are trustworthy, they have a good flow of incomes, your likely to loan them money, and if you charged interest it would be a lower rate then if you were going to lend money to a kid with no job, whos shady and you never know if you are going to get it back (I dont know why you'd ever lend to the second guy, but you get my point).

Stocks - The infamous stocks...when you buy shares of stock in a company, you own part of the company...depending on how large of a position will determine what percentage of the company. Common stock is the type of stock most of us would like to get familiar with, and you can buy and sell these through out the day as the price goes up and down. When you look to buy stocks you want to think that way too...you want to think about it in a sense that, I am going to be part owner of this company, do I feel its a good enough company to buy into? Thats the general idea of stocks, and there will be many more articles going far more into detail about stocks, if you have questions let me know, but stocks will be a major part of my talking on this blog. Also, stocks for the most part, have historically outperformed the investment vehicles that you are fmailar with.