Wealth Planning

If you are between 25 and 34 you either are not too concern about building wealth through investing or you have no idea where to start. My basic philosophy when it comes to investing is never invest more than what I can lose, avoid investing in things that have no long-term value (physical such as gold and other minerals, technological hardware or health). Another thing I look at is dividends. If the company offers little to no dividend than I look at its projected growth and how much cash it has. Look into opening an IRA.

This morning I found an article on CNNmoney.com which showed how to mix stocks and bonds. Some of the stocks being advised to take I know well such as Google but there were others such as Amgen. The symbol for Amgen is AMGN according to CNNMoney.com ” The world’s biggest biotech company is about to reaccelerate with the help of three new potential blockbusters emerging from its pipeline. More promising drugs are on the way, since Amgen’s cash allows it to spend twice as much as its nearest competitor on R&D. ” The unheard of company for me is Abbott Laboratories which is described by CNNmoney as “After spinning off its slow-growing drug business, Abbott is looking to use its cash to expand abroad. Good start: Already 40% of sales — ranging from arterial stents to diagnostic devices to infant formula — come from emerging markets such as China and Brazil.” Click on the picture to read the full cnnmoney.com article titled Building wealth: Best moves if you’re 25 to 34.

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Cost of Living Calculator

Looking around this morning for news and I came across the cost of living calculator on CNNMoney.com. I highly recommend using it if you are relocating to figure out how far your salary will go in your new location. For example if you make a yearly salary of 50k in NYC it will take you far in a place like Chapell Hill NC.

Difference in Chapel Hill, NC ?

Groceries 28% less
Housing 69% less
Utilities 42% less
Transportation 20% less
Health Care19% less

Use the calculator to budget how much you will spend on a new home or transportation. As the economy improves people will be moving around. Go to http://money.cnn.com/calculator/pf/cost-of-living/?iid=s_pf_mid, to get full use of the callculator.

Privacy

AlterEcoSF

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 Information only available to those with legitimate purpose
•Employment information
• Credit reports
• Tax information (IRS/state tax boards)
• Criminal records
• Social service records (welfare, Medicaid, etc.)
• School records
• Medical records

Privacy act necessitates each federal agency that preserves records to permit individuals to request amendment of his or her record. To amend or expunge a record you must do the following:

  •   Contact the agency in question
  •   Await administrative review of request
  •   If request is denied, you can request a court review

Fair credit reporting act gives consumers the right to dispute imprecise information and authorizes them to insert their own version of incorrect information into a credit report. The information age has allowed us to share a lot of things about each other which makes protecting private information a lot harder now. So every time you get your credit report check to make sure everything is accurate.

Financial Instruments

 Instrument Maturity Risk  
Certificate of Deposit   90 days or more   None if insured

 

 

Bonds

   Corporate 5–30   years   Some
   Municipal 1–20   years   Some
   Stocks Immediate   Low to high

 

 U.S. Treasury

   Bills  1   year or less   None
   Notes  1–10   years   None
   Bonds  10–30   years   None
   Mutual Funds  Varies   Low to high
  Retirement Funds  When buyer is 60 years  old   Low

Getting Out of Trouble

I found this information on practicalmoneyskills.com. It’s a great website for increasing financial understanding and options. I would highly recommend exploring the site; even if you feel that you are the best money manager in the world.

Reasons why consumers can’t pay

  •  loss of income (48%)
  • Unemployment (24%)
  •  Illness (16%)
  •  Other (divorce, death) (8%)
    overextension (25%)
  • Poor money management, Emergencies, Materialism, Need for instant gratification
    defective goods and services (20%)
  • fraudulent use of credit (4%)
  • other (3%)

Signs you are in Trouble

  • You don’t know how much you owe.
  • You often pay bills late.
  •  You get a new loan to pay old loans.
  •  You pay only the minimum balance due each month.
  • You spend more than 20% of your net income (after paying rent or mortgage) on
    debt maintenance.
  • You would have an immediate financial problem if you lost your job.
  •  You’re spending more than you earn, using your savings to pay for day-to-day expenses.

 First steps to take if you can’t pay your bills

  •  Take another (close) look at your budget and cut your expenses.
  •  Be realistic about what you can afford (the hardest) and
    contact your creditors
  • Tell them why you can’t pay, that you intend to pay, and when/how much you will be
    able to pay.
  • You may be able to work out a new payment schedule.

The app for Dough

Better World Books

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Please download the app at googleplay.com and look for BloggApp; the picture for the app is a green apple. Using the app you will be able to locate credit unions, seek and find financial coaches, shop for mortgages and compare savings. Its free !! so what can you lose.

IRA Contribution

Contributions made only between ages of 22–30 (9 years)

•$2,000 contributed each year
•Total investment of $18,000
•At an interest rate of 9%, by age 65 will have $579,471

 

Contributions made only between ages of 31–65 (35 years)

•$2,000 contributed each year
•Total investment of $70,000
•At an interest rate of 9%, by age 65 will have $470,249

Business Development Companies (“BDC“)

Last Friday I wrote a post about BDC and why I would take a look at it. As previously stated BDC is a good way to invest in startups without necessarily being an angel investor which requires a lot of money. Today Wells Fargo Business Development Company ETN is trading at $ 25.90. As always please ,please do research and determine if in the long run its worth a buy and as always make sure that you don’t invest more than what your comfortable loosing. As Much as I like this company I would not buy more than two stock because I would want to limit my exposure to a potential significant loss; after all stocks go up and down. Please click on the picture to see the full profile of Wells Fargo Business Development Company ETN (BDCS)

Holdings

Top 5 Sectors
Portfolio weighting
Business service 
Consumer goods 
Consumer service 
Energy 
Financial service 

Performance

1 month -2.28%   3 years
3 months +2.00%   5 years
1 year +24.76%   Since inception +9.11%
Data through 04/06/2013
 
There is a lot of room for growth in startups and it could be exciting just accept that at the same time there might be some losses.

Jobs Jobs Jobs Rate

Woke up this morning to hear some good news. According to reliable resources the U.S jobless rate has fallen below eight percent; The rate has fallen because of a combination of job creation and people simply giving up in finding jobs. Within the group of those that have given up there a few who decided to create their own wealth. This truth brings me to an article I saw on CNNmoney.com called “Investing in startups: More fun than profit “. A great point made by the article is that investing in a startup will not always provide a big return of the initial investment; in their own words the author of the article wrote the following;

The risk: The majority of startups don’t make it in the long run. “I get calls where someone may have inherited $50,000,” says Jeffrey Sohl, director of the Center for Venture Research at the University of New Hampshire. “I tell them, ‘You’re not going to find the next Google. Put it in a bank so you don’t lose it all.’ “Risk aside, retail investors have limited options to get in early.Venture capital funds invest in young companies that typically have a track record, but you need a net worth of at least a million dollars and must be able to put up $250,000. And while anyone can back an entrepreneur with a dream, “angel” funds, which diversify their holdings among startups, also restrict themselves to high-net-worthers.

If you aren’t a high net worth individual but would like to get in on funding startups the article suggests looking at something called Business Development Companies (BDCs). The way BDC’s work is by buying equity or convertible debt in startups. The investor may receive interest payments or dividends, or get a future payoff via an initial public stock offering.

Creating your own fortune requires initial investment which highlights the importance of saving for a raining day. I like to think starting a business as social activism because you are contributing to society. Considering the dismal economy I think that now is the perfect time to create your own fortunes; specially for those new college graduates. Please click on the picture to read the full CNNmoney.com article.

BitCoins

Google Bitcoins and you get many answers but in a nutshell its an electronic currency. What does that mean ? it means that you can buy just about anything without having paper money. The downfall is its extreme volatility but if you are a Cypriun, Greek, Spaniard or even Portuguese and have been hit by the recent European economic storm it might seem safer than putting it in a bank. One Bitcoin is currently trading at over $100 and there are numerous places for you to buy some. I will admit that yesterday I was very tempted to buy a couple but after thinking about it I found it too risky. Besides the volatility in value I am worried that some idiot will go ahead and hack the system since it is all electronic. The positive side of this currency is that it could lead to more stable world economy if its done right. It also has the possibility of making consumption stable. I am not sure Bitcoin currency will hold on but I see this as the start of a day when you and I will no longer carry Dollar bills, Yens or British Pounds in our pockets. I saw this article on CNNmoney.com about someone who is apparently trying to install Bitcoins atms in Los Angeles and Cyprus. To see the full article please click on the picture.