Guest Post: First Generation White Collar

Today's guest post was written by PF blogger L. Marie Joseph. She has recently published the book First Generation White Collar: A practical guide on how to get ahead and not just get by with your money. As a fellow blogger, I have corresponded with Marie for nearly four years and have gotten to know her through her blog, Moneymonk. It is my pleasure to present her guest post on PFStock.

In the excerpt below, L. Marie Joseph discusses her views on Housing:


So now you’re making a great salary and have a college degree under your belt. Now your eyes are getting bigger. You want a house! That apartment you have is starting become a prison cell.

A home is usually the biggest expense we have. That being said, try your best to qualify for a mortgage that has a fixed rate, you don’t want any surprises down the road. You want to also have a payment that is under 30 percent of your income. You know this is going to be your biggest expense, so try to make it as low as possible. Your loan should also be limited to a fifteen- to thirty-year debt sentence.

For example if your take-home pay is $5,000 a month, your monthly house payment should be no more than $1,500 a month. So let’s not get house fever and buy something $2,000 a month because it looks better. Get what you can afford! You want to be able to pay for house payment AND save and invest comfortably. Not just pay your house payment and expenses. You always want to build wealth while you are paying your home off. Stick to renting if your payments will be more than 30 percent of your income. You do not want to own anything that will jack more than 30 percent of your income.

Ideally, you’re the price of your home should be two and one-half times your salary (two times if you want to be wealthy). Don’t fall for what the mortgage company tells you can afford. They do not know your personal situation. Divorce, sickness, and layoffs can all happens during the life of the loan. Always think of these factors when agreeing to a contract for so long. No one is immune to Murphy’s Law. Mortgage Brokers will not discuss these issues with you. It is your responsibility to education yourself.

"Education is when you read the fine print. Experience is what you get if you don’t."
-Pete Seeger

So if you make $50,000 a year, and the mortgage company approves you for $200,000 —RUN. This is four times your income, and you cannot afford it.

Depending on where you live, this can vary; I have friends in Washington, DC, and New York, and they cannot comfortably make this happen. If you live in a large, high-expense state, such as California or New York, your percentages may be slightly different.

Interest only and adjustable rate mortgages (ARMs) should always be avoided. ARMs almost always adjust higher not lower. You should always get a fixed-rate mortgage. You don’t want any surprises down the line.

Rule of thumb:

• Take out a fifteen- to thirty-year mortgage
• Make sure the payment is under 30 percent of your income, if you want to be wealthy.
• Having a mortgage payment that’s below 30 percent of your household income gives you more room to save and invest.
• Seek financing through a credit union or your local community bank.
• Interest only and ARMS mortgages should be avoided.

About the Author
L. Marie Joseph is the author of First Generation White Collar. Visit her blog and you can also follow her on twitter.

Moneymonk had a post offering a free Apple iPad drawing to people who purchase her book. However, that offer has ended. Sorry for the inconvenience.

2011 Tax Tips Contest

The folks at H&R Block have provided me with 5 online codes, each of which can be redeemed for H&R Block At Home Premium Federal Online Tax Preparation (a $50 value), to give away to lucky blog readers. H&R Block At Home was formerly known as TaxCut. This giveaway is for an (Tax Year 2010) online version of H&R Block At Home. While federal tax preparation is included in the prize, state returns are not included ($34.95 extra cost). For the purposes of preparing federal tax returns, this online software should be adequate for nearly all taxpayers to complete their own taxes. Although the software includes free federal e-file, you may have to pay extra if you want to also efile a state return.

I have decided to hold a random drawing each week (awarding one code per week) for 5 weeks for the software codes. The first drawing will be on January 14, 2011 and continue weekly until February 11, 2011. In order to enter:

1) Any reader can post a comment below describing your best tax or money saving tip.
2) For an additional entry, web site owners can link to this post, to let other know about this contest.
3) Lastly, my fellow bloggers can add PFStock to your blogroll (must be accessible from blog's main page) for one more entry in the drawing.

You can enter up to three times using the the form below:



If the entry form doesn't show up click here to go to the entry form directly.

Note that this drawing is for an online version of the H&R Block At Home Software that requires Internet access. If you do not feel comfortable with using the Internet to prepare your taxes, I would suggest purchasing H&R Block At Home 2010 on CD-ROM. Unfortunately, I don't have any CD-ROM versions of the software to give away but it is available in many stores such as Amazon.com.

The drawing is limited to US residents. Visit H&R Block for details about the online software. Winner will be randomly picked from among the qualified entries received by February 11. Winners will receive an online key code by Email to access the H&R Block website. The "key code" works like a gift certificate and is used on the payment screen before your taxes can be filed. In order to prepare taxes online with H&R Block, you will be required to create an account on their website. Good luck to everyone who enters!

DC

This promotion is held in conjunction with PFStock.com.
Note: H&R Block At Home provides tax preparation software. It is up to the individual winners to determine the suitability of this software for their tax situation. PF Stock does not provide tax advice or technical assistance. Contact H&R Block Customer Support for help with their tax preparation software. Opinions expressed here are those of PF Stock.

Guest Post: How is My Property Assessed?

Are you wondering exactly what it is that happens when your property is assessed? It's a question that many people preparing for their first inspection may worry about and one that can easily be answered.

What Happens When Property is Assessed?
The property assessment process is one that is often steeped in mystery to people trying to sell (or buy for that matter) home. Everyone wants a property to assess well but the actual technique and tactics involved prove elusive to many curious onlookers.

The assessor will come to your home and perform a thorough inspection of the inside and outside of your home. He or she will take note of various property characteristics that buyers may or may not connect with or find appealing. He will then make a determination of the value of your home based on his findings including the good and the bad about your home. It generally takes about two working days to receive the report with the inspector's findings.

How do Assessors Determine Worth?
First of all, you shouldn't be worried about their determination of worth. It is a very narrowly defined scope that allows them to assign one value to a home over another home. It is not a reflection of the worth of the home on an emotional level. They use a formula that enables them to find the value of your home on the market right now or within the next 90 days based on other, very specific criteria.

There are many who believe that evaluating or assessing property is one part art and one part science. There is a little bit of intuition that comes into play. The best or closest evaluators are often those who have been in the business for quite a while and have a "feel" for neighbourhoods, homes, and the people in certain areas. These assessors are usually able to gauge the value a home will sell for within a 90 day window very accurately.

Key Elements Assessors Inspect
In addition to the general condition and state of repair (or lack thereof) of a home, inspectors also take note of the size of the land the home is on, the neighbourhood and its proximity to services, accessibility of the home, condition of the home, architecture of the home, size of the home, and features that may be unique to the tastes and interests of the current home owners but may not exactly be mainstream tastes and interests.

Your home inspector is probably going to open doors and drawers, peak through closets, find cobwebs in the corner and dust bunnies beneath your beds. It is the job of the assessor to inspect the home inside and out for positive features and potential problems. Some inspectors may help you discover problems that can be easily fixed today but might be major problems tomorrow if left alone.

Comparing Properties as Part of the Assessment Process
No one really likes to be compared to another person. It's just as hard to listen as your property is compared to another. However, most property assessors will pull the information from a comparable home in the neighbourhood or area that has sold recently and compare the condition, state of repair, land mass, and features of your home with the other to decide if your home should have more value, about the same amount of value, or less value than the other home in question was sold for.

Home inspections or assessments may sound big bad and scary but they are very important in setting the value for your home when it comes to selling your home or even when refinancing your home for a more favourable interest rate.

This is the perfect opportunity to make all the little repairs you've been putting off and get your home neat and clean prior to the inspection so you can enjoy even better results!

About the Author
This article was written by William. In between surfing, cooking and supporting his favourite football team Liverpool, William writes for a home loan comparison service Home Loan Finder. Visit the Home Loan Finder website to compare home loans for more tips and guides on property valuation.

Citibank 7-Eleven Free Coffee Coupon?

When I received my most recent Citibank statement, it included an advertisement (which they refer to as a "marketing notice") for ATMs at 7-Eleven stores. The ad says that Citibank customers can get cash from 7-Eleven ATMs without paying any ATM fees. At the bottom of the advertisement was a coupon good for a free small coffee from 7-Eleven (expires Dec. 31, 2010).

This got me wondering that if I had previously signed up for Citibank paperless statements, then I wouldn't have received a statement in the mail. Therefore, I would not have received this free coffee coupon. It is merely a curiosity of mine, but do people who only have online statements get the free coffee coupon mailed separately? Or do they lose out on the deal?

DC

Final Results for Net Worth Poll

For several months, I've been conducting a net worth survey in the sidebar of the PFStock blog. The poll is now closed and the final results are in. A total of 73 readers have voted on this poll. So without further ado, here are the reader poll results:

Net Worth Survey: What Is Net Worth

Net Worth	% of Readers
Negative	4%
$0 - $19,999	4%
$20,000 - $49,999	8%
$50,000 - $99,999	4%
$100,000 - $249,999	19%
$250,000 - $499,999	17%
$500,000 - $999,999	17%
Over $1 million	24%

Note that the percentages do not add up to 100% due to rounding. From these statistics, I found it interesting that a large percentage of my readers fall into the higher net worth categories. Over 75% of PFStock readers have a net worth greater than $100,000. Does anybody want to share their insights on this data?

From my last survey on annual income, I had calculated that the average median net worth of PFStock readers was over $500,000. However, the results of this poll show that the median is actually between $250,000 and $500,000.

If you've read this far, please participate in the annual income survey in the sidebar of my blog. Also, please leave a comment on this post: How much do you make?

Additionally, here are some additional related posts:
Annual Income Survey (2/10)
Net Worth Update (8/09)
Net Worth Comparison (6/08)
Are You Wealthy? (3/08)
Calculating Net Worth (9/06)

DC

Tax Questions for 2010

Like Christmas time, tax season seems to start earlier every year. I just received a note from the PR folks at Intuit (TurboTax) letting me know that they are once again offering to answer personal tax questions for free. I guess it is time to start thinking about 2010 taxes. I have been using computer tax software to prepare my taxes since 1996, and I plan to do so again this year. Once again, the two main contenders are TurboTax and H&R Block At Home (formerly known as TaxCut). I have not yet decided which of these software products I will use.

Anyway, the point of this post is that TurboTax is again offering to answer personal tax questions for free. They have IRS-Enrolled Agents and tax preparers available to help you with your tax question. To get started, you need to submit your question through their website: www.freetaxquestion.com. A tax advisor will research your question and give you a phone call to discuss your tax issue. Questions about this offer should be directed to TurboTax Support.

There are a couple of catches to the offer. First, it appears that their hours of operation are 8am to 5pm PST, Monday to Friday. Second, this free offer is only valid through January 31, 2011. So, you need to be organized enough to know what tax question you want to ask before then. My criticism here is that the average person doesn't even get started with their taxes until February or March. By that time, it will be too late to take advantage of this free service. After January 31, TurboTax will charge $39.95 for this advice. In the past, H&R Block had a similar free offer, but I have not heard if they will be offering that service again this tax year

Getting back to tax preparation software, last year (tax year 2009) both TurboTax and H&R Block provided me with evaluation copies of their tax software. So, I prepared my taxes twice: once using H&R Block At Home, and again using TurboTax. Without going into a lot of detail, the end result of using either programs was identical. My recommendation is if you have used TurboTax in the past and were happy with the end result, you should probably stick with that choice. On the other hand, if you used H&R Block At Home (or other tax software) and found that to be satisfactory, you probably won't gain much in switching to TurboTax. I have found that TurboTax usually ends up costing a little bit more than the equivalent competitive tax software.

Note to Commenters: If you represent a company such as Intuit, H&R Block, Microsoft, etc., please leave your contact information or send me an Email (my Email address is listed in the sidebar) to let me know that you left a comment. If I cannot determine that your comment is authentic, it will be deleted.

DC

Money Market Rates 11/10

Here are the latest money market interest rates of the banks that I've been tracking on my blog. Note that these rates are sorted by APY, and represent institutions that I have accounts at, or have otherwise mentioned in my blog:

1.25% Discover Bank Online Savings
1.20% Ally Bank Online Savings
1.20% Shorebank Direct Online Savings**
1.10% HSBC Advance Online Savings
1.10% ING Direct Orange Savings
0.65% Citibank Ultimate Savings
0.65% Western FCU Money Market
0.40% Chase Plus Savings
0.30% E*TRADE Complete Savings
0.14% PayPal Money Market*

NOTES: *The PayPal Money Market fund is NOT FDIC insured.
**On August 20, 2010, ShoreBank was closed by regulators, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. Accounts were transferred to Urban Partnership Bank of Chicago. The FDIC has issued a press release regarding this matter.

Rates are believed to be accurate as of 11/4/10. I did not include banks that had special, or introductory rates in the list because they are not ongoing interest rates. I am also not including non-liquid accounts such as CD's in the list. By a small margin, Discover Bank has the highest interest rate of the banks that I'm tracking.

I want to acknowledge that Barbara Friedberg recently mentioned my post Pay The Early Withdrawal Penalty on her blog. In this post, I discuss the strategy of opening a long-term, 5-year CD with a low early withdrawal penalty as an alternative to keeping your cash in a money market account. If you are searching for a higher savings rate that might be something to consider.

So, that is the latest list of money market rates. Please let me know if you know of any higher interest rates.

DC

Guest Post: A Graceful Exit-How to Sell an Investment Property

While is usually considered wise to hold on to an investment property for as long as possible, there are certain instances when it is a good idea to sell. Here are some of the cases where selling might be a good idea.

1. Capital Growth
If capital growth hasn't been considerably higher than inflation for at least five years then the asset is no longer worth it and should be sold.

2. Decline in housing demands
If there has been a long-term decline in the demand for housing in the area, selling would be your best choice. There is a good chance that your yield on rental income and capital growth could remain negative for a long time. This would mean that the rise in vacancy rates would mean you would have to service a property loan and it would not be possible to make a claim for any tax deductions.

3. Near retirement
Another time when it would be a good idea to sell an investment property would be when you are getting close to retirement and want an income stream that is ongoing, consistent and also unencumbered. In this case it would be a good idea to go through your portfolio and keep any consistent income performers.

The cost of trading property
It can cost a lot of money to do property trading. Transaction costs can be as high as 10% and you will also have to pay the tax for capital gains. The amount of time that you have been in the real estate market should be maximized whenever possible so that a compound effect can take place.

You should never sell a property when the LVR (Loan to Value Ratio) is under 60% because once it reaches that level you will start to see a positive or neutral cash flow. From that point on, you will be able to enjoy the true income benefits that come with an investment property.

Even if the property value has doubled, it does not necessarily mean that the value will not continue to rise. This is the point where some investors choose to sell and this is usually not the best decision since the rise in value may continue for some time.

Selling because of need
There are certain things to avoid so that you don't end up having to sell due to poor management. Here are a few things you can put in place right at the beginning to make sure that everything goes smoothly down the road.

1. Always have the right insurance
You will need to have landlord insurance and if you have high gearing then you could also get some insurance for income protection. By having the proper insurance put into place you won't have to sell out if anything goes wrong.

2. Always have a plan B
Figure out what would be the worst thing that could happen and plan for it. An example of this would be a vacancy for an extended amount of time. If you plan ahead and know how to handle any problems before they happen you'll be well armed and will not be put in the position where you need to sell in a panic.

3. Look into the future.
What is your cash flow going to be in the future? You should consider future capital gain along with the rental returns you are receiving today, and always create a buffer. Figure in all of the costs that you will have to pay for the five years that follow and have a buffer put in place so that you don't end up selling if you don't really need to.

Having an exit strategy in place should be a key part of investing in the property in the first place. As long as you have created enough buffer and have planned for any shortfalls, you will be able to sell when you want to, not because you need to.

About the Author
This article was written by William. William writes about saving money, property investment and real estate for a home loan comparison service.

Two New Blogs for the Blog List

I recently added two very interesting personal finance blogs to my blog list. The first one is Investrepreneurship written by Justin Teo. Justin is also the author of a recent guest post about the stock True Religion Apparel, Inc. (Nasdaq: TRLG) on PFStock. Justin told me that he is from Malaysia, and I am glad to have the international exposure for PFStock.

The next addition to my blog list is Smart Money Guide written by Leakkhena Ung. She is from Sydney Australia. So, I'm glad to have these additions to my blog list. I regularly read posts in my blog list, and it is automatically updated with the most recent posts at the top.

A few other PF blogs are listed on my Links page. Some bloggers have inquired why their blog is listed on the Links page rather than on the blog list.

Guest Post: Are Hotel Rewards Credit Cards Worth It?

As we all know, there are a plethora of reward cards on the market. Those that give cash back and airline miles tend to be the most popular, but what about hotel rewards credit cards? Are their rewards worthwhile? To find out, consider the following:

Do you always stay at the same hotel chain?
Hotel rewards credit cards are typically associated with a specific hotel chain. For example, there is the Marriott Rewards Visa, Starwood American Express, Choice Privileges Visa, and so forth.

With these, any rewards you earn can only be used at the card’s affiliated hotel chain. So if you always stay at Marriott, for example, then their card might be worth looking into. But if you find yourself staying at different chains all the time, then it probably wouldn’t make sense to get a credit card that’s only affiliated with one of them.

How much will you be charging per year?
With the exception of the Choice Privileges Visa and the Best Western MasterCard, almost every hotel credit card on the market charges an annual fee. Fortunately it’s not that much – usually around $45 to $65 – but it’s still something you need to take into account.

Let’s say your card had a $65 annual fee and the rewards were only worth 1 penny per dollar spent. If that were the case, that would mean the first $6,500 spent each year would just go towards breaking even on the annual fee. So it’s important to weigh your expected spending, the rewards, and the annual fee to see if a card is worth it.

How does the rewards program work exactly?
Of course the most important thing is the rewards program, but get out your calculator to figure out if they’re really worthwhile.

Take the Choice Privileges card; it gives 2 points per dollar spent which sounds nice at first (most people assume that would mean 2% on spending). But allegedly, the value of these points may only be worth as little as 0.6 to 1.0 cents each when you redeem them. The online source which claims this got the figure by comparing how many points it would take to get free rooms, compared to the price if you simply paid for the same rooms with cash. So make sure you take a close look at what your points will actually buy you before you apply for a hotel rewards credit card.

Do you want the ability to exchange points for airline miles?
The high-end hotel credit cards give you the option of converting reward points into airline miles. If this is something you plan on doing, make sure you pay attention to each card’s conversion formula. Only the Starwood American converts on a 1 point = 1 mile basis. The others penalize you big time. For example, with the Hilton credit card, 6.7 points = 1 mile.

What other perks does the card give?
Hotel rewards credit cards often give perks like free room upgrades, free breakfast, late checkout, and more. If you stay at their hotel frequently, those perks alone may be worth the annual fee.

Some cards also offer special benefits outside of the hotel. For example, the Best Western card includes an AAA basic annual membership; this gives members discounts at restaurants and various attractions. Benefits like these are something to take into account when trying to decide if a card is worthwhile.

What are the online credit card reviews saying about them?
There are a number of websites which feature credit card reviews. Check out the user-submitted comments to see what people are saying about a given card. Sometimes, a credit card may look good on the outside, but you may research it and find out that there are a lot of complaints about bad customer service or some other problem.

Conclusion?
If you travel frequently and often stay a specific hotel chain, it may be worth checking out their credit card if they have one. But just make sure you do your research to determine if the rewards and benefits truly outweigh the annual fee.

About the Author
This guest post was written by Michael from Credit Card Forum, a social media site for credit card reviews and discussion. He regularly writes on the site’s credit card blog and also assists with forum moderation.

Guest Post: Why You Should Have An Online Savings Account

The whole idea of online bank may appear quite eerie to many people. What is an online bank? How can a bank operate without any physical entity or even an ATM? Such questions cross our minds when we discuss stuff like online bank. Well, an online bank is a banking institution that operates only on the internet; you need to transact either on the internet or over telephone.

The older generation accustomed to the safety vaults of normal banks may cast skeptical glances at it. But, the concept of online banks is gradually becoming a great hit among the net-savvy youngsters. If the absence of a physical bank location is a reason not to put faith in online banks, then there are plenty of reasons why you should have a savings account in an online bank. Wondering how? Then take a look at the following:

• Higher interest rates: Having a savings account in an online bank can be quite lucrative. They usually offer higher rates of interest than the normal banks. Online banks can afford to give your more interest because they do not involve added costs of maintaining branches and teller facilities. The lower overall operational costs allow the online banks to offer you some tempting interest rates.
  
• User friendly websites: Online banks have very sophisticated websites, where you can perform all the banking transactions easily. They usually get upgraded and user-friendly features built into the website to help you pay your bills, make instant or scheduled money transfers, change your account information and also create or close accounts as simply as possible. The more features they can incorporate, the fewer staffs they require to handle telephonic operations.
  
• Lower charges: Most online banks charge you no maintenance fees and minimum balance fee for your accounts. Some banks even do not charge anything for opening an account. So, banking gets really inexpensive and super easy with online banks.
  
• Your money is safe: The absence of a physical entity should not make you feel that online banks are unsafe. In fact online banks are Federal Deposit Insurance Corporation (FDIC) insured, which means your money is in safe hands. Online banks are as safe as their brick and mortar counterpart. While in other investment options you need to take higher risks for higher profits, online banks will spare you such risks. Moreover, the FDIC is great assurance for the consumers.
  
• Separate savings from expenses: If you are one of those kinds that do not want savings accounts to be easily accessible lest they end up spending more, then an online bank is just your cup of tea. Since online accounts provide no teller or ATM facility, your savings are not available at your fingers. And this could prove a great way to keep your savings from getting encroached by your spending sprees.
  
• Automate your savings: Online savings account is a great way to automate your savings. You can have a certain amount automatically deposited into your online account from an attached account regularly. Recurring savings thus becomes quite hassle-free with online banks.
  
• Time Saving: The best part of an online bank is that it is superb time saving banking option that allows transactions in as less time as possible. You can open an account and get your transactions performed within a few minutes.
  

Now if that seems convincing and you are already thinking of opening an online savings account, then you are just a click away from it. All you need to do is search online to find out an online bank that best suits your circumstances and get on with an online savings account. And then savings will be more fun, profitable, easy, secured and superbly time-saving!

About the Author
This guest post was written by "Jack Reed". He writes on various financial topics with a special focus on bankruptcy. If you are interested in writing a guest post, please contact PF Stock at the Email address listed in the sidebar.

We are the Super Rich

My post about annual income and net worth was recently referred to in the comment section of another post titled Pity the Poor Couple Who Make $450,000 Per Year (Yet Another Failure of Our 'Elite' Educational System) on a blog called Mike the Mad Biologist. The commenter used the data from my post to declare that "the median net worth for people making more than $150k/year is $1.1 million." Ordinarily, I would not consider this to be a notable event since a few of my posts are frequently referenced by other websites. However, this post has over 60 other comments on it, and I wanted to find out what all of the hubbub was about.

It turns out that this post was a reaction to a blog post originally written by Professor M. Todd Henderson of the University of Chicago Law School. The original post was available on the blog Truth on the Market and had received over 400 comments. However, the author deleted the original article and has decided to get out of blogging all together. This left me even more intrigued as to what was said in the original post to start off this firestorm. So, I started a search for the original text.

Fortunately, I was able to retrieve an original version of the post and have included it below. Before I reproduce that post here, I wanted to say that I think Prof. Henderson's point of view is that President Barack Obama's plan to increase taxes will impact those who are in the lower end of the high-income tax bracket (i.e. making more than $250k per year) and those who are in a situation similar to his. It is clear that the author's family will feel the squeeze since they already have "less than a few hundred dollars per month of discretionary income" to spend. It seems that any tax increase will force the Hendersons to trim some expenses. However based the comments I've seen, I think that few readers will empathize with Prof. Henderson.

Here is the original article:

We are the Super Rich, posted by Todd Henderson on September 15, 2010 (Truth on the Market)

The rhetoric in Washington about taxes is about millionaires and the super rich, but the relevant dividing line between millionaires and the middle class is pegged at family income of $250,000. (I’m not a math professor, but last time I checked $250,000 is less than $1 million.) That makes me super rich and subject to a big tax hike if the president has his way.

I’m the president’s neighbor in Chicago, but we’ve never met. I wish we could, because I would introduce him to my family and our lifestyle, one he believes is capable of financing the vast expansion of government he is planning. A quick look at our family budget, which I will happily share with the White House, will show him that like many Americans, we are just getting by despite seeming to be rich. We aren’t.

I, like the president before me, am a law professor at the University of Chicago Law School, and my wife, like the first lady before her, works at the University of Chicago Hospitals, where she is a doctor who treats children with cancer. Our combined income exceeds the $250,000 threshold for the super rich (but not by that much), and the president plans on raising my taxes. After all, we can afford it, and the world we are now living in has that familiar Marxian tone of those who need take and those who can afford it pay. The problem is, we can’t afford it. Here is why.

The biggest expense for us is financing government. Last year, my wife and I paid nearly $100,000 in federal and state taxes, not even including sales and other taxes. This amount is so high because we can’t afford fancy accountants and lawyers to help us evade taxes and we are penalized by the tax code because we choose to be married and we both work outside the home. (If my wife and I divorced or were never married, the government would write us a check for tens of thousands of dollars. Talk about perverse incentives.)

Our next biggest expense, like most people, is our mortgage. Homes near our work in Chicago aren’t cheap and we do not have friends who were willing to help us finance the deal. We chose to invest in the University community and renovate and old property, but we did so at an inopportune time.

We pay about $15,000 in property taxes, about half of which goes to fund public education in Chicago. Since we care the education of our three children, this means we also have to pay to send them to private school. My wife has school loans of nearly $250,000 and I do too, although becoming a lawyer is significantly cheaper. We try to invest in our retirement by putting some money in the stock market, something that these days sounds like a patriotic act. Our account isn’t worth much, and is worth a lot less than it used to be.

Like most working Americans, insurance, doctors’ bills, utilities, two cars, daycare, groceries, gasoline, cell phones, and cable TV (no movie channels) round out our monthly expenses. We also have someone who cuts our grass, cleans our house, and watches our new baby so we can both work outside the home. At the end of all this, we have less than a few hundred dollars per month of discretionary income. We occasionally eat out but with a baby sitter, these nights take a toll on our budget. Life in America is wonderful, but expensive.

If our taxes rise significantly, as they seem likely to, we can cut back on some things. The (legal) immigrant from Mexico who owns the lawn service we employ will suffer, as will the (legal) immigrant from Poland who cleans our house a few times a month. We can cancel our cell phones and some cable channels, as well as take our daughter from her art class at the community art center, but these are only a few hundred dollars per month in total. But more importantly, what is the theory under which collecting this money in taxes and deciding in Washington how to spend it is superior to our decisions? Ask the entrepreneurs we employ and the new arrivals they employ in turn whether they prefer to work for us or get a government handout.

If these cuts don’t work, we will sell our house – into an already spiraling market of declining asset values – and our cars, assuming someone will buy them. The irony here, of course, is that the government is working to save both of these industries despite the impact that increasing taxes will have.

The problem with the president’s plan is that the super rich don’t pay taxes – they hide in the Cayman Islands or use fancy investment vehicles to shelter their income. We aren’t rich enough to afford this – I use Turbo Tax. But we are rich enough to be hurt by the president’s plan. The next time the president comes home to Chicago, he has a standing invitation to come to my house (two blocks from his) and judge for himself whether the Hendersons are as rich as he thinks.

Any opinions?

DC

New Poll: How Much Do You Make?

I've asked the question before, and I'm asking again. It is the question that everybody wants the answer to, but nobody wants to ask it. Since I write an anonymous blog, that gives me the unique luxury of being able to ask the question without personally offending anybody. I mentioned before how readers are innately curious other people's net worth. I think this is because of people's natural curiosity -- wanting to assess how one is doing compared to others.

The last time I asked the question, I received a few responses such as these:

married female, 30 years old (husband is 30 years old). both of us completely self made professionals with degrees from state schools. rental income is approximately $60,000. combined household income is approximately $200,000.

Male, Married,Age 29 and 28, both MSEE, both work for the same company, combined salary 240k. Networth 273k.

So, now I'm asking again: how much do you make? Anonymous comments are welcome. I want to assure you that my Blogger account does not collect Email addresses or any other personal information, if you select "Anonymous" on the comment form. To be doubly sure, you can also sign out of Blogger.

Also I have an updated annual income poll in the sidebar of my blog. I recently reset the poll to adjust the income ranges. In constructing the original poll, I deliberately set the income ranges to correspond with the net worth comparison tool on the CNN Money website; the ranges that CNN Money used were not consistently spaced. This time, I've evenly spaced the ranges in $50k increments. Also, I mentioned that I've been having problems with blogger polls, and that the old poll was no longer recording new submissions. If you've answered the old poll before, please submit your answer again.

DC

Celebrate Arts Month 2010 and Win Prizes

This blog originates from Silicon Valley, California. One of my local readers has again asked me to mention an event celebrating the arts that will take place in Mountain View, California. During the month of October 2010, Arts Action 21, the City of Mountain View's Performing Arts Committee and the Community School of Music and Arts will present "Sunday Arts Live" -- a new performance series celebrating National Arts and Humanities Month.  The first event will be "A Multicultural Celebration" on October 3; and the second event will be "Finding Home: A Kaleidoscope of Musical Journeys". More information about these events is available at: Arts Action 21.

In addition, there will be a free random drawing for prizes worth several hundred dollars, which will be awarded on October 17th. In order to enter the contest, you need to fill out an "Arts Challenge" entry form, and return it by October 16, 2010. Drop off and online entries are accepted. The online entry can be found here: ArtsChallenge2010 Survey

Most of the prizes are provided by local, Silicon Valley organizations. So even though the entry is free, the giveaway is really geared toward people who will be able to attend events and participate in activities in the area. The following organizations will be giving away prizes:

• The Community School of Music and Arts in Mountain View.
• The Mountain View Center for the Performing Arts.
• The horn quartet QUADRE.
• Art-n-Fun of Los Altos.
• The Children's Discovery Museum of San Jose.
• The Peninsula Youth Theatre.
• The Tech Museum in San Jose.

For last year's entry form, I wrote that entries could be mailed in. This year, it seems that you have to drop off your form at the Mountain View library, which is located at 585 Franklin Street, Mountain View, California. Alternatively, you can submit an online entry.

If you would like to publicize a local, Silicon Valley event or know of other special deals that readers might be interested in, please send me an Email message (my Email is in the sidebar) with the details.

DC

Chase Screwed Up!

Many people are aware that the Chase website, Chase.com, was offline for a couple of days this past week. For three days (Monday, September 13 through Wednesday, September 15), customer account information was either inaccessible through the website, or there were intermittent outages. Bill payments that had been previously scheduled were not being made. How this affected me is that I had scheduled a bill payment for my American Express card to be sent on Monday, and completed on Tuesday, September 14 (which was the bill's due date). Unfortunately, that payment was not received by American Express until Thursday, September 16 (two days late).

What happens if you pay a credit card bill late? It could result in a late fee, finance charges, and the credit card issuer can increase the card's interest rate (in my case, that would be increased to 27.24% APR). And that is not even to mention the effect that a late payment can have on your credit score. Well, this was definitely not my fault; I had scheduled the bill payment on-time. It was Chase that screwed up!

Anticipating that many angry customers might be contacting Chase, they sent me a message explaining the situation. Here is the message that I received from Chase:

We are sorry for the difficulties that recently affected chase.com and we apologize for not communicating better with you about this issue. As you may know, we experienced a significant service interruption at the time you tried to initiate, cancel or modify one or more of your scheduled online bill payments.  As a result, the request was not processed.

Please log on to chase.com to check the status of your payment.

If you tried to change or cancel your payment, we are asking that if you have not done so already, please log on to chase.com and resubmit your cancellation or change, if appropriate. If you have concerns about a bill payment that has been made, please contact us.

If you tried to initiate a new payment and it was not made (if you do not see your payment in your online account activity summary), we are asking that if you have not done so already, please log on to chase.com and submit a new bill pay request for any payment that was not made.  If our delay in processing your bill payment resulted in late fees, we will cover 100% of those late fees.

If your payment was made after the date you scheduled, there is no further action needed on your part. Please note:

·    If your payment was to another Chase account (for example, Chase Credit Card Services), we are automatically refunding any late fees.

·    If your payment was to anyone other than Chase (for example, your telephone service, utilities or another financial institution), we are contacting many payees to prevent late fees from being charged.

o   However, if your payee charged you a late fee, please call us at one of the numbers below or visit your nearest Chase branch. We will refund the late fee to you.

We recommend that you keep this letter in case you need to provide information to your payee. 

Please be assured that Chase's online security has not been compromised as a result of this service interruption. Your accounts and confidential information remain safe and secure. 

Giving you 24-hour access to your banking is of the utmost importance to us. This was not the level of service we know you expect, and we will work hard to serve you and communicate with you better in the future.

Again, please accept our apology for this disruption and thank you for your patience. If you have any questions, please stop by your nearest Chase branch or call:

·    1-800-935-9935 for Personal accounts

·    1-877-CHASEPC (1-877-242-7372) for Business accounts

·    1-800-848-9136 for Home Lending and Auto accounts

·    For credit card accounts, please call the number on the back of your card.
 

Sincerely,

Patricia O. Baker
Senior Vice President
Chase Executive Office

One of the key points of this message is that Chase is contacting payees to prevent late fees from being charged. They should; it is their responsibility! It remains to be seen what will happen. I haven't seen any late fees assessed to my credit card yet, and I hope that there won't be any.

Was anybody else impacted by Chase's problems?

DC

Guest Post: True Religion at a Glance

It can be quite a lengthy process to properly research a stock. That’s why I established a few guidelines to help me identify stocks worthy of further research. In this article, I will use these guidelines to evaluate the attractiveness of True Religion Apparel, Inc. (Nasdaq: TRLG) as a candidate for potential further research. All the data I need to do that can be obtained from Google finance.

P/E ratio
I usually look for stocks with low P/E ratios or at least reasonable P/E ratios (generally about 13-15 for blue chips, maybe a bit higher for the really good quality ones), but may accept a higher P/E ratio if the stock has good revenue and profit growth. True Religion has a P/E ratio of a bit more than 10.5 at the time of writing. That’s very good, considering True Religion has had pretty good revenue and profit growth.

Revenue and profit growth
I also look for companies that are growing profits and revenue healthily, and True Religion is doing great in those categories. True Religion grew revenue from about 140.5 million USD in the year 2006 to about 310 million USD in the year 2009. Operating income grew from about 35 million USD in 2006 to about 77.5 million USD in 2009. In percentage terms, from 2006 to 2009, True Religion had a compounded annual growth rate of about 30.2% for revenue and a compounded annual growth rate of about 30.3% for operating income.

Profit margins and return on equity
Investors should generally look for companies with high profit margins and high returns on equity. True religion had an operating profit margin of around 25% and a return on average equity of about 28% in 2009; all in all, pretty good. I looked at operating income growth and operating profit margin instead of net income growth and net profit margin, as the operating profit is the one that gives us the better picture of the company’s everyday business performance.

True Religion might have earned lower profits in the second quarter of 2010, but there will only be trouble if we base our investment decisions only on the latest quarterly reports. Investors need to look at profit growth in terms of years, and True Religion has had stellar growth over the past few years.

Companies don’t always grow straight up, they are capable of having some down years, which is OK; what matters after all is long-term growth. I believe that True Religion is still a very attractive candidate for further research, where we can try and determine, among other things, if the drop in profit is due to permanent impairment to True Religion’s business or if it is a result of the company spending more on activities like opening new stores, which will set True Religion up for greater future profits.

Low debt and good liquidity
Everyone knows that too much debt is bad, and that’s why I usually look for companies with low or at least reasonable debt levels. Liquidity is also very important, as there have been many companies that got into trouble because of a lack of liquidity. At this stage, I simply look at current assets to current liabilities to determine if a company has ample liquidity, I will take into account things like inventory turns and etc later when I look into the annual reports and conduct proper research.

At 2010/06/30, True Religion had 120 million USD in cash and short-term investments to only about 35 million USD in total liabilities, which indicates the company has good liquidity and very little debt.

Conclusion
If a company meets the guidelines that I have set, I would then consider digging into at least its latest annual report and its latest quarterly report, and conduct thorough research. When conducting proper research, all decisions that require information from the financial statements should be based on the financial statements in the company’s annual report, as I think that’s the best source.

In my personal opinion, I think True Religion meets the guidelines I have set. But as always, decisions to invest or to single out stocks for further research should be independent and based on your own research. If you liked this article, you might like to check out: Real Estate Real Returns and Things I think about before making investment decisions. Take care and may your portfolios generate good returns.

About the Author:
Justin Teo is a private investor and is currently studying for his degree in international business.

Guest Post: Why Credit Card Companies Charge Yearly Fees

For many consumers, credit cards provide a very helpful tool in their pursuit of financial independence. If used properly, credit cards can help people build their credit and even reward users with cash bonuses and gifts. However, if not used properly, that little piece of plastic can engulf irresponsible shoppers in a vicious cycle of debt that spirals out of control.

How Credit Card Companies Make Money
Credit card companies make the majority of their revenue from interest charged on existing debt. So while consumers enjoy the advantages of delaying full payment and accumulating rewards, credit card companies will happily oblige because they're making a mint on interest. On the surface, it seems like a mutually beneficial relationship.

In theory, it would make the most sense for financial institutions to have as many people using their cards as possible. Like most businesses, having more people use your product should equate to making more money.

That isn't necessarily the case, however, with cards offering generous rewards. Sure, most companies provide bonuses to consumers to instill customer loyalty and encourage frequent transactions each month. That only works if those same users are keeping a balance on their card.

Users who pay off their full balance each month, but still spend enough to collect hefty rewards, are known in the industry as "free riders." To dissuade these types of users, credit card companies charge annual fees. Doing so filters out these frugal chargers. Further, with the Credit CARD Act of 2009 taking effect, financial institutions are trying more than ever to find new ways to cut costs and drive new revenue streams.

No More Free Rides
In the past, credit card companies would entice new customers with low interest rates and high rewards. Companies could make more money on customers who accumulated debt interest than on annual fees. Once in the door, they could get their money back in many different ways, chiefly, raising interest rates at a whim. Not anymore.

So while annual fees do provide revenue for financial companies, it's not really a huge factor in relation to how much they can potentially earn from high-frequency users who carry a balance.

Also, if you notice, large annual fees can also serve to attract more desired customers, which helps to maintain a level of prestige for the brand. They want those customers who are willing to pay the annual cost. Yes, there is such thing as luxury-brand credit cards. It's the same idea of paying $200 for a T-shirt with a designer logo on it.

Credit Card Rewards
So does this mean that all rewards cards charge annual fees? Not even close. There are still many cards that provide users bonuses without the yearly membership payment. The difference is the rewards aren't as bountiful as they once were. That doesn't mean you can't still take advantage of them, though.

Here are a few cards that offer customers generous rewards, with and without an annual price tag. Depending on how much you earn back, sometimes it does make sense to bite the bullet and accept the fee.

No Annual Fee Rewards Cards
As with most no annual fee rewards cards, these usually require good to excellent credit to qualify:

• Chase Sapphire and Chase Freedom: These two cards from Chase charge no annual fee and offer cash back rewards at select merchants. Sapphire lets you earn $100 cash back after your first purchase. Free lets you earn 5 percent cash back on select quarterly categories, and an unlimited 1 percent on all other purchases. Both cards provide additional discounts with cash back rewards through select retailers.
• Discover More: This card provides 5 percent cash back on changing categories that you need to sign up for like travel, restaurants, shopping, etc. You can also earn 1 percent on all other purchases. There are additional discounts available through select retailers.
• Capital One No Hassle Rewards: If you're looking for a card with no expiration date for rewards, this card has it covered. You can earn 2 percent cash back on gas and groceries, and 1 percent on other purchases. The card does charge annual fees for average to low or limited history credit scores.

Premium Reward Cards with Fees
Usually, credit cards will charge annual fees for individuals with less than stellar credit. In this section, we're focusing on cards that charge fees for their premium rewards.

• American Express Green and Gold Cards: These cards waive the annual fees for the first year ($95 and $125, respectively) and let you earn one point for almost every dollar spent, three points when shopping with select online retailers and double points on its travel program. Though you can redeem points for rewards, there isn't a cash back option.
• Chase Sapphire Preferred: For $85 a year (first year waived), earn one point for almost every dollar spent, and double points for airfare booked through the card's reward program. There is also a 7 percent annual points dividend for all points earned. You can also get $250 in rewards; that is, if you spend $3,000 within the first three months.
• CapitalOne Venture Rewards: If you're a traveler, you can accrue miles with this card. The $59 annual fee is waived the first year. You can earn two miles on every purchase and get 10,000 bonus miles if you spend $1,000 in the first three months. Reward points allow you to fly free on any airline with no blackouts. You also won't get dinged for foreign transaction fees.

High Roller Cards
This bunch stand in a class of their own:

• American Express Centurion Card: Though it isn't necessarily a credit card, you can't mention high roller cards without mentioning the original "black card." The Centurion card is actually a charge card that users have to pay off each month. There is a one-time activation fee of $5,000 and an annual fee of $2,500. It's so exclusive, even the website is designed to be cryptic and vague for outsiders.
• American Express Platinum: Like the Centurion, this is also a charge card. The annual fee is a friendlier $550 per year, but applicants need to have an annual income of $65,000 or more. While you earn one rewards point for every dollar spent that can go to travel or charity donations, the card also provides luxurious perks, too. Members can get complimentary airline tickets for companions, access to VIP lounges, complimentary upgrades and more.
• Visa Black Card: Designed to compete with the two above, the Visa Black Card is actually more of a traditional credit card than charge card. The annual fee is $495, but members get similar benefits as the American Express Platinum. One difference is that users can opt for a 1 percent cash back return over airline points.

So there you have it. Which rewards cards do you like using? Are you willing to pay an annual fee for extra bonuses?

About the Author
This guest post was written by Go Banking Rates, bringing you informative personal finance content and helpful tools, as well as the best interest rates on financial services nationwide.

Guest Post: Learn To Be Smart With Your Savings

With the debt figure in America rising precariously every minute, it is no surprise that most of the people today are rather unwise with money management. What should one do in such a scenario? Resort to debt relief companies for help? Well, they can probably help you but is it really an answer to your problems? Can these companies help you keep away from debt problems in the future too? Face it, the problem lies in you! And you are the solution yourself. The answer to your worries lies in some smart ways which can teach you to save your money and be financially savvy!

Listed here are some steps you can consider to start saving your money:

Open a savings account: The very first step you can take is to open a savings account with a bank. Shop around and choose a bank which just suits your needs; the one which offers the highest interest rate and low service fees.

Start saving: Now, start putting your money in your savings account. Do not be bothered about filling your savings account with huge cash, it is important to first start putting something into the account, however small it is. Develop the habit of contributing something regularly towards your savings account.

Consider investing your money: You can make more money by starting to invest in the market. Here are some investment options to consider:

• Stocks: When you buy a stock, you actually buy a tiny piece of a big company. Though the stock market abounds with several market risks, you can still make quite a lot of money here with some intelligent dealings. Since there are fluctuations in the stock market, it is advisable that you start investing in stocks after gaining considerable experience at the stock market.
  
• Bonds: Bonds are defined as a piece of big loan. This can be one of the safest investment options for you because it has the backing of the government. When you buy a bond, you get it back with interest on the date of maturity of the bond.
  
• Mutual funds: The risk involved with mutual funds is very low because of the diversification of assets across different sectors. Therefore, this can be the perfect choice for you to start your investment career. Because of this reason, sometimes mutual funds are also regarded as risk free investments.

Everyone should try to build up some easily accessible cash to be prepared for the rainy day. In the current environment of market uncertainty, there is no better way to help oneself other than building up a solid foundation of some wise money management. It requires a degree of commitment and making a determination to make your money work for you is what is required to secure a financially secure future.

About the Author This guest post was written by "Jack Reed". He writes on various financial topics with a special focus on bankruptcy. If you are interested in writing a guest post, please contact PF Stock at the Email address listed in the sidebar.

Guest Post: How to Earn Passive Income At Home

Nearly everyone has the desire to earn extra income, I know that I did. My situation was probably similar to many of you. I was the stay-at-home and take care of the house portion of our large family. While I did not mind staying home each day and watching my husband go off to work there were a few things about having a job that I missed like earning money and feeling like I was contributing financially to the household. However, with a brood of children, I knew that the cost of day-care would not be worth my going to work outside the home. Instead my husband and I started researching ways for me to earn a few dollars on line, just to keep me a little busy.

If you want to work from home you first have to think about what it is that you are good at, in my case it was writing. Even though I stay home now I used to work and had a Master's degree so I knew a little bit about writing. There are tons of ways to earn money on line if you want to write, web sites like Elance, Textbroker, Ezine, and HubPages are great places to look for work or to post articles that you have written. In my case, the first job a found was from a webmaster looking for someone to write a blog about different reality based television shows. All I had to do was watch the programs and then write an interesting and opinion filled recap of the episode.

This first job was not at all difficult, but it did require a lot of time. Between watching the actual episodes and then writing the article I had to spend a lot of time on lock down in front of the television or computer screen. The lucky thing was that I could record an episode, and watch it late at night or during the day at nap time. This allowed me to continue taking care of the house and the family while still earning some extra money. This job was a great way to get my feet wet and learn a little bit about Internet writing. I did not make a lot of money at first, but that was alright with me. What was more important to me was to make sure that this was something that I actually enjoyed doing and to find out if I was any good at it.

If you are thinking about taking on an at home job I suggest following a similar path. Others might suggest that you throw yourself whole-heartily into your new at home job, but I prefer a more cautious approach. I went into my online job search expecting nothing. Even when I got a job, that only paid about $50 a month at first I knew that there was a possibility that it would not work out and that the pay was not going to be very much. I even referred to it as my "shoe money" so that it never was considered part of the family budget. In the end it turned out that I was pretty good at writing so I started taking on other writing jobs that I found at the previous mentioned web sites and eventually left that low paying blog job in favor of higher paying gigs.

You might be reading this thinking that you hate to write so maybe earning passive income from home is impossible for you. However, there are loads of at home income options that do not require you to write one single word. You can also do customer service from home. This is especially great for people who crave interaction with others. With these jobs you simply have wait for calls to come in from people placing orders for items or looking for customer service assistance. All you usually need is a reliable Internet connection and a phone line to get started in this lucrative field.

Data entry is another way to earn extra income and requires neither great writing or customer service skills. While this type of work can be a little bit repetitive it also has the benefit of requiring no special skills and allowing you to work whenever you want. Much like writing articles you can set up a schedule where you work in their early morning hours before the rest of your household gets up, after they go to bed for the night, or any other time of day when you can get an hour or two to focus on your work.

In my opinion, the best part about earning passive income from home is that you get to decide when you work and how much you work. If you want to add a little bit to the household income you only have to work a little bit. But, if you decide it is time to start working full time you can do that too, the choice is completely up to you. Just remember in the beginning to be both patient and cautious.

Be cautious about working for just anyone that you meet on line. Make sure that the person or company whom you are doing work for is reputable. Trust me, there is nothing more discouraging then not getting paid for a job. However, if that does happen do not give up, those who do not pay are truly the exception and not the rule.

Also, be patient. Do not start out expecting to make a hundred dollars on the first day or even in the first month. If you are writing, be willing to write a few things for a low price in order to build a strong reputation, once you have that you will be able to command higher rates. No matter what job you choose to do from home you will quickly find that you can earn a lot more money in a much shorter time then you ever anticipated. Before you know it you will be adding to your household income and feeling great about your choice to work from home.

About the Author
Timothy Ng is an experienced personal finance writer, specialising in credit card comparison. Check out his guide to best credit cards where he will step you through the process of finding the best credit card.

Guest Post: Stock Investment Tips for Beginners

If you are planning to invest your cash then you need to have a stable financial base. Your priority task would be to pay off your existing debts, added to it save a decent amount of money from your income and control your expenses. In order to avoid any loopholes in the plan a guidance of a financial advisor is mandatory.

You need to have an excellent understanding about your financial condition. If you are still not aware then try to acquire more knowledge in the field of financial investment.

In case you are planning to invest your hard earned money in stock market then you need to study the stock market structure carefully. This article would share few tips for the beginners in the investment field so that you can glide in this journey.

Some Useful Tips:

• Right financial education: The newbie in the field of investment should acquire enough domain knowledge about the stock market. Do an extensive research on annual report and market history in order to get better perception on stocks. You need to expand a wide range of knowledge in case of personal finance. So consult the experts in order to get right information on the investment theories. Keep yourself updated with latest news on finance so that you can analyze the market well.
• Definite time for investment: If you are nascent in this field of investment then take some time out to trace the definite period for investment. If this is your first investment then take advisors guidance to make correct decisions. Once you start buying and selling stocks you would get a better knowledge on this field.
  
• Logical approach: Always have a logical approach when you are dealing with stocks. As you are investing your money so you would always expect a successful deal. While investing get a fair idea about the investment plan where you are putting the money in order to get a positive result. Look for companies that are booming and has a good reputation in the investment market.
  
• Look for a stock broker: If you are looking for a reliable broker only online searching won’t fetch you better result. Ask your friends and relatives who are veterans in this field to find you a trustworthy broker. Even if you have found one then verify his reliability from your friends and relatives as well as his market reputation. If you make a wrong choice in this case then you might land up in a soup.
  
• Look for a reputable company: If you look for investment in a reputable company then you are bound to get reward for it. The success rates of the investment plans are quite high. If you are investing your hard earned money then you need to go for loyal and trustworthy companies.
  
• Investigation is crucial: You need to collect information regarding the investment plan as it would help you to take correct decision. Try to get information from multiple sources and do a comparative study of the different plans as this would help you get a better result. In case you are evaluating the investment plan it would help you to trace the flaws in it.
  
• Go for low risk investment: One of the low risk investments would be to invest in bonds. If you compare the returns of savings account with bonds then opting for later would be a better option. In this case your money is quite secured and would also boost quickly. As you would invest in low risk securities so you would reap a low income from it.
  

About the Author
This is a guest post by Kevin Craig who is a financial writer. He has helped lots of debt burdened people with free counseling and advices on many finance related topics.

Money Market Rates 8/10

Here are the latest money market interest rates of the banks that I've been tracking on my blog. Note that these rates are sorted by APY, and represent institutions that I have accounts at, or have otherwise mentioned in my blog:

1.35% Discover Bank Online Savings
1.29% Ally Bank Online Savings
1.10% HSBCAdvance Online Savings
1.10% ING Direct Orange Savings
1.03% Shorebank Direct Online Savings**
0.70% Citibank Ultimate Savings
0.65% Western FCU Money Market
0.40% Chase Plus Savings
0.30% E*TRADE Complete Savings
0.16% PayPal Money Market*

NOTES: *The PayPal Money Market fund is NOT FDIC insured.
**On Friday, August 20, 2010, ShoreBank, Chicago, IL was closed by the The Illinois Department of Financial & Professional Regulation, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. The FDIC has issued a press release regarding this matter.

Rates are believed to be accurate as of 8/20/10. I did not include banks that had special, or introductory rates in the list because they are not ongoing interest rates. I am also not including non-liquid accounts such as CD's in the list.

This month, Discover Bank Online Savings has the highest interest rate of the banks that I'm tracking. So, there is the latest list. Please let me know if you know of any higher interest rates.

DC

Problems With Blogger Polls

For a while now, there have been technical problems with some of the polls that I use in the sidebar of my blog. I have one poll about annual income and one about net worth in the right sidebar. In short, these polls have not been properly recording votes. In my post about annual income and net worth, I stated that there were already 93 respondents to the annual income poll. However, since I wrote that post, new votes have not been recorded and the total number of votes has actually dropped below the 93 that were already recorded.

I first noticed this problem when Blogger upgraded their "Template Designer" a couple of months back. The polls in Blogger are supported by Google. Some bloggers have complained about this problem in the Blogger help forum. But, judging by how Google is responding in posts like this one, it is clear that the polls are not working. Google doesn't really have a solution to the problem, and they are denying that any problem even exists.

In any case, this is a word of caution that my polls might not be up to date. Are there any suggestions for more reliable polling sites that I could use for my blog?

DC

Guest Post: Simple ways to pay off your credit card debt

The total consumer credit card debt in the U.S. today exceeds a whopping $800 billion! Credit card debt can be crippling and lead to a lot of stress. This menace is almost like an epidemic today gripping a large number of people across the globe. Are you also one of the victims? If yes, then read on to know how you can avoid being in credit card debt.

1. Assess your financial situation: First of all, you should stop panicking. Try to get a complete picture of your financial situation. Figure out how much debt you need to deal with. Prepare a list of your debts and prioritize them as paying the wrong debts could be costly. Tackle the balance with the highest interest rate first, when that one is paid off move on to the next highest interest rate.
   
2. Prepare a budget: If you think that budgeting means financial handcuff, then you are wrong. On the contrary, it helps to inculcate a sense of financial discipline in you. When you are fully aware of your financial situation, you are less likely to overspend. Thus you keep yourself away from debt. Create a budget that will help you to stop relying on credit cards.
   
3. Reduce your expenditures: You are in the process of repaying your debts; therefore cutting out on expenses would be a great idea. Look for ways to lower your phone bill, electricity bill, auto insurance and the like. Challenge yourself to restrict your expenditures for bare necessities. You will be surprised at the savings that you make after this. Now apply your savings to pay off your debts.
4. Opt for low interest cards: Transfer your balances from high interest rate cards to the low interest one. Now you can make a single monthly payment towards this card. You are basically consolidating your credit card debts into one affordable payment. This way you are eliminating the need to manage too many payments at one time. While transferring your balance, do not close all your cards at once as this can affect your credit score.
   
5. Increase the monthly payments towards your balances: Now that you have started paying down your new consolidated balances, double the minimum payment you were paying on the old balances. Avail yourself of the low monthly interest and pay more in order to reduce your total debt.

Keep these points in mind to ensure that you stay away from debts forever. Clearing off your debts completely takes time and you should be patient. Determine to take a pro-active approach and then even you can proudly live a debt free life!

About the Author
This guest post was written by "Jack Reed". He writes on various financial topics with a special focus on bankruptcy. If you are interested in writing a guest post, please contact PF Stock at the Email address listed in the sidebar.

S&P 500 Video

I have recently figured out how to embed videos into my blog thanks to the folks at INO.com (pronounced "I know"). This video is about the Standard & Poor's 500. More specifically, it is about the battle between the Bulls and the Bears, and analyzes whether the S&P 500 and the general stock market will move up or down. INO.com uses Trade Triangle technology for technical price analysis of the stock market. You can view this video without leaving PFStock.

This short video talks about the price movements of the S&P 500 over the past couple months. The presenter, Adam Hewison, shares his views on the stock market. I think you'll find this video technically interesting as well as educational.

For more trading ideas, visit the Trader's Blog

When I viewed the video, I noticed that it appears a bit grainy unless you view it in full-screen mode. The embedded video also seems to slow down the loading of blog pages slightly. So, I'll try not to publish more than one video at a time. Please Email me, or leave a comment if you have any difficulty viewing the video. At the end of the video, you can click on the video for a Free Email Trading Course offer. I encourage you to sign up for this since it is free.

Disclaimer: I am an affiliate and member of INO.com. Although I have been able to make money using their MarketClub product, no guarantees can be made. All investments involve risks, so please consider your objectives wisely before investing.

DC

Pay The Early Withdrawal Penalty?

When you hear the term "Penalty" as in Early Withdrawal Penalty, do you automatically recoil thinking that if you have to pay a penalty that you have done something wrong, something bad? I am here to tell you that one alternative to keeping your cash in a low-yielding money market account or short-term CD is to get a long-term, 5-year CD now. Then "pay the penalty" if you need to withdraw the money, or find a better interest rate later.

I recently opened a 5-year Ally Bank High Yield CD that yields 2.94% APY. Some people may think that it is not a good idea to lock in such a mediocre interest rate for 5 years since only a couple years ago, these interest rates were in the range of 4-5% or higher. However, the rate currently being offered by Ally is much better than any short-term CD or money market available.

The second part of the equation is that Ally Bank charges an early withdrawal penalty of 60-days simple interest if you close your account prematurely. I did some research and found that this is one of the lowest early withdrawal penalties available.

If CD or money market rates go back up to the 4-5% range, I intend to close my CD account, pay the penalty, and establish a new account at the higher rate. I already did some back-of-the-envelope calculations that show I would be much better off doing that even after having to pay an early withdrawal penalty.

Let's take a quick example of a $10,000 CD and for simplicity, round off the interest rate to 3% instead of the 2.94% offered. Assume that you deposit the $10,000 in a 5-year CD, but have to withdraw your money after a year to handle an emergency. At 3% simple interest, you will earn $300 before the penalty. Sixty days of interest equals about $50. So your actual return for the year would be $250, or 2.5%. Even with the penalty, the 5-year CD beats out the typical rate on a 1-year CD (which currently yields about 1.5%) by a wide margin. Another point is that the $50 penalty is tax-deductible as an above the line deduction. (This is line item #30 "Penalty on early withdrawal of savings" on form 1040).

The main risk of a long-term CDs is the chance that interest rates will rise and you’re committed to the lower rate until the CD matures. But with a small early withdrawal penalty, if rates rise significantly, you can still consider withdrawing the money, paying the penalty, and putting the money back into another account with a higher interest rate.

Disclaimer: The example provided here is for illustrative purposes only. I am not providing tax or investment advice. I encourages readers to consult with a tax adviser if they have specific questions about how to deduct early withdrawal penalties on their taxes.

DC

Guest Post: 7 Keys to Smart Stock Investment

Have you been contemplating lately to make money by trading in the stock market? Are you aware of the fact that thousands of people have filed for bankruptcy after suffering huge losses in the stock market? Are you sure your knowledge of how the market functions is good enough to give you a great return on your investment? If you really want to maximize your trading opportunities for maximum gains, then read on to know how you can go about achieving it.

1. Plan: Many investors do the mistake of jumping into the investment market without even having a clue as to what they want to accomplish from it. This is the worst mistake you can make. Sit down and plan. Prepare a strategy and ask yourself what you want to achieve with your investment plan. Do you want to buy a car by the end of this year or a house after 5 years? Planning out this way and being clear about your goals helps you to plan effectively.
   
2. Do extensive research: You should identify the industries which are losers today but are posed to return handsome investments in the long run. Be aware that the companies which are doing well today may altogether be left behind in the investment race tomorrow. The market is volatile and the losers of today might provide you with great returns once the economy turns around.
   
3. Begin with small investments: It is advisable to start of your investment career by investing small. If you start off with big investments and lose it immediately, it might put you off stock investing for life. Learning the basics and gathering experience is vital to increase your confidence in the investment market.
   
4. Diversify: An effective strategy in building a long term investment plan is to opt for a combination of investment options. Just going for an arbitrary collection of stocks will not be very beneficial. The idea is to find a combination of investments which will help you to achieve your financial goals. Spread your investments to lower the risks involved. This will help you create an unsinkable portfolio!
   
5. Wait for the right time: Timing is everything in the stock market. To maximize your returns, you should know how long you should hold on to your investment before selling them. It can make the difference between earning and losing money.
   
6. Seek advice from a stockbroker: Stockbrokers are experienced and can help you out with valuable advice with your investment plans. However, they charge fees and it’s up to you whether you want to seek their advice.
   
7. Never risk more than what you can afford to lose: The most important advice is never to risk more money than what you can afford to lose. People are tempted to invest beyond their means if the potential investment seems safe. This is a mistake, there is always a risk involved and it’s better to always be prepared for it.
   

Making money in the stock market requires learning. Do not get carried off by stories of people making millions of dollars in the stock market overnight. The shifts and turns in the stock market are consistently fluctuating. With patience, practice and education you can also pave the path to a successful and rewarding investment career!

About the Author
This guest post was written by "Jack Reed". He writes on various financial topics with a special focus on bankruptcy. If you are interested in writing a guest post, please contact PF Stock at the Email address listed in the sidebar.

Money Market Rates 7/10

Here are the latest money market interest rates of the banks that I've been tracking on my blog. Note that these rates are sorted by APY, and represent institutions that I have accounts at, or have otherwise mentioned in my blog:

1.35% Discover Bank Online Savings
1.29% Ally Bank Online Savings
1.10% HSBCAdvance Online Savings
1.10% ING Direct Orange Savings
1.04% Shorebank Direct Online Savings
0.80% Citibank Ultimate Savings
0.65% Western FCU Money Market
0.50% Chase Premier Savings
0.30% E*TRADE Complete Savings
0.15% PayPal Money Market*

NOTES: *The PayPal Money Market fund is NOT FDIC insured.
Rates are believed to be accurate as of 7/15/10. I did not include banks that had special, or introductory rates in the list because they are not ongoing interest rates. I am also not including non-liquid accounts such as CD's in the list.

This month, Discover Bank Online Savings has the highest interest rate of the banks that I'm tracking. So, there is the latest list. Please let me know if you know of any higher interest rates.

DC