June 2009
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When managing our finances and trying to save money, there are a lot of small ways to save here and there that can amount to a huge savings at the end of the year. Listed below are a number of ways to save a few dollars that may not seem like much individually, but can result in big money when added together.
Inkjet Printer Ink
The price for this stuff is insane. When the revolution comes, the CEOs of Epson and Lexmark may be the first against the wall because of the scam they’ve perpetrated. If you own an inkjet printer you may have noticed that the brand name ink cartridge refills can cost anywhere from thirty to sixty dollars. When you can buy a low end printer (which comes with at least one cartridge included usually) for less than the ink refill, there’s a problem. Save on these by buying off-brand cartridges or ink refill kits.
CDR and DVDR Media
Here’s another item that people spend too much money on needlessly. Recording media giants Memorex, Fuji, and TDK sell, for example, packages of CDR discs in groups of ten for about $8.00 -$12.00, depending where you buy them. Why does anyone pay that when packages of fifty discs in an off-brand can be had for the same price? CDR discs don’t work like the cassette tapes of the ‘80s when there was a discernable difference between Memorex and some run of the mill brand of recording tape. These are literally the same thing and whether you’re burning music or data, you won’t know the difference.
Video Games
The average video game player is between the ages of 18 and 35, yet most people still see video games as the domain of children. As such many parents do buy video game systems for their kids. If this is the case in your home, is there any reason that little Bobby has to have the newest games right when they’re released? If you wait a few months, those “hot titles” will start appearing on the shelves of the used game stores. A year after their released, many become “greatest hits” titles and are sold for less than half of their original price. Let Johnny wait six months or so to start playing Grand Theft Mortal Spill Your Guts on the Streets of LA or whatever game he just wants to get his hands on. Or, better yet, buy him books instead.
Written by srini on June 20th, 2009 with no comments.
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Financial advisors always suggest saving and investing as the best way to plan for a secure retirement. Many average people see the wisdom in these suggestions, but feel that they can’t realistically plan on investing because they don’t have the “extra money” and may feel that there is no such thing as extra money.
But, what about spare change? Everyone has spare change, right?
Start small by saving your spare change. Get yourself a good sized jar and have it become your coin jar. Every day, at the end of the day, put all the change that you have into the jar. You may be surprised how much you have. Most people are able to average about a dollar per day in change. At the end of the month the jar will have about thirty dollars. Deposit that money into a savings account just for this “extra money.”
After a year of doing this you’ll find that your “extra money” has grown to nearly four hundred dollars, plus interest. Even if you don’t move those funds into a more lucrative investment like stocks or mutual funds the balance on the account will grow to $11,329 over thirty years, assuming a paltry interest rate of 0.10% that many of today’s simple savings accounts carry. You couldn’t retire on it, but it’s not bad for extra money. Assuming that you do move the first thousand dollars that you accumulate this way into an account that pays more interest, the potential for growth is enormous. You can easily turn that dollar per day in extra money into nearly seventy thousand dollars over thirty years. Again, it’s not enough to retire on, but wouldn’t you like to have nearly seventy thousand dollars extra just lying around?
Savings like this are a good start in planning your financial future. Obviously you do not want to plan your entire retirement around saving your spare change, but it’s a good illustration of the potential a little financial discipline has.
The trick to making that extra money become more extra money is in finding the best ways to grow your money. Once you’ve saved even a few thousand dollars it is time to seek the advice of a financial planner who can show you how to really tap into the earning potential of the money you have.
All this can come from your spare change.
Written by srini on June 19th, 2009 with no comments.
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Birthday celebrations can be an important part of childhood. A birthday party makes a child feel special. It’s a day just for her with friends and family gathered together to celebrate in her honor and give her presents. There’s cake and ice cream and sometimes a cookout with merriment and amusement for all.
It can be very expensive.
If you’re living on a budget, a child’s birthday can be a stressful time. As parents we want to give our children that special feeling, that sense of importance that comes with a day that is all about and for them, but how do we pay for it? You can try telling your child that the family is converting and becoming Jehovah’s Witnesses (In the Jehovah’s Witness sect, birthdays and holidays are not celebrated) every year, but by the time they’re twelve or so, they’ll probably catch on that the family only starts attending Kingdom Hall services a few weeks before their birthdays each year. You could also tell the child she was left on the doorstep and so you have no idea when her birthday is, but this will probably cost you more in child therapy bills in the long run.
Instead of resorting to psychologically damaging mistruths and religious conversions, there are a few things you can do to celebrate your child’s birthday on a budget.
• Bake and decorate the cake yourself instead of buying one. Your child may want a cake with Sponge Bob painted in icing on the top, but one from Betty Crocker or made from scratch is just as tasty.
• Keep party favors to a minimum or don’t supply them at all. There is no law that says every kid has to get a bag of plastic toys and candy.
• Don’t even think about hiring entertainment. The kids will have just as much fun going nuts in the backyard or “helping” your child enjoy her new presents.
• No cook outs. The birthday party bill goes up considerably when you’re supplying hot dogs and hamburgers to everyone in attendance.
• Buy reasonably priced presents and keep the number down. You don’t have to shower your child with expensive toys on her birthday.
By following these simple steps, you can save money on your child’s birthday celebration and still make her feel special. And you won’t need to change religions.
Written by srini on June 18th, 2009 with no comments.
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Newcomers to the stock market or those who pay little attention to the financial goings on in our country may have heard the term “stock options” in the past and not fully understood what it meant. The assumption that many people make is that stocks and options are the same thing when, in fact, they are completely different animals. A lot of the horror stories you may have heard of people losing their life savings on the stock market may have had more to do with options than with actual stocks.
Puts and Calls
Stock options are sold in two types which are called puts and calls. Both are sold with an expiration date and at a fixed price which is referred to as the strike price. When you buy options you are basically gambling on what the stock will do before your option expires. When you buy a call option you have the right (but you are not obligated) to purchase stock at the strike price anytime before the option’s expiration date. Conversely, when you purchase a put option you have the right (but are not obligated) to sell stock at the strike price anytime before the option expires. In the case of a call option you’re hoping that the price of the stock climbs well above your strike price, allowing you to buy stock that’s trading at, say, $150 per share for a strike price of, say $90 per share. This leaves you free to turn around and sell those shares for a nice profit. With put options you’re hoping that the price drops well below your strike price, allowing you to sell shares for more than they’re trading for. It really is a gamble and it is very easy to lose money this way.
Regular Stocks
Actual stocks differ from options because when you buy stocks you are buying an actual piece of a corporation. You own something tangible and can be paid dividends if the company is doing well. While many people use the stock market as a way to try and make a quick profit, buying shares and holding them until the price goes up then selling them for a profit, it can also be considered a long term investment. Stock options, however, are always a short term gamble. Any poker player will tell you that if you gamble long enough, sooner or later you will lose.
Written by srini on June 17th, 2009 with no comments.
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Many people are intimidated by the prospect of investing in the stock market. While the prospect of making money certainly intrigues them, they may be put off by the risk involved. Everyone likes to make money; no one likes to lose it. Also, some people who want to invest are held back by a lack of capital. They have some small amount of money to invest, but it’s not enough to invest seriously. If you are like any of these people, an investment club may be just what the financial analyst ordered.
Investment clubs are simply groups of people who come together to pool their resources and make investments that benefit all of the members. A good investment club is structured, professional, and serious. If you’re interested in joining one of these clubs, there are things to look for.
Structure & Legality
An investment club needs to be a legally defined partnership or limited liability company (LLC). This is not the same as a bunch of office workers participating in a lottery pool and giving their money to one member who is trusted to run down to the local Gas & Sip to purchase Lotto tickets. By being a legal entity unto itself, the investment club can assure that its members all have a voice and access to the decision making process. You do not want to be a part of a group of fifteen people who each gave a thousand dollars to Larry’s cousin Bubba because Bubba knows a stock broker. By the time you start wondering what the cub has invested in, Bubba is on a beach in Mexico sipping Margaritas.
Professionalism & Assistance
The overall purpose of an investment club is for its members to profit from the club’s investments, but many may join simply to learn about how the stock market works. By investing smaller amounts of money with the club they learn how to invest larger amounts on their own later on. To this end the club should have an account set up in its name with a brokerage firm. Working with a professional broker is the best way to learn how the stock exchange and investment market works. It also assures that vital investment decisions are not being made by any one club member.
If you’re interested in joining or starting an investment club, speaking with someone already involved may be a good start. Try a Google search for ‘investment clubs’ for more information.
Written by srini on June 16th, 2009 with no comments.
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The internet is chock full of scams and rip-offs that are designed to wrench your hard earned money away from you.. The Federal Trade Commission (FTC) recently identified a list of twelve scams and rip-offs that consumers are likely to receive via email. Some of the so called “dirty dozen” offenders are listed here. If you’ve ever received an unsolicited bulk email, it was probably one of these.
Guaranteed Loans
Many emails solicit “guaranteed loans” regardless of your credit history. They may be for homes or automobiles and sometimes credit cards. Don’t fall for it. Usually you’ll wind up paying for a list of lenders who will turn you down if you don’t meet the requirements of any lender. Any loan you can get with poor credit is likely to have an exorbitant interest rate. The same is true of the credit cards.
Credit Repair Services
Emails offering a service that will repair a poor credit rating go out all the time. Don’t buy it. There are two things that will mend a poor credit rating and bring up your FICO score: time and money. Anyone offering to do it for you with little or none of those being involved is trying to rip you off.
“Free” Merchandise
Emails offering free high-tech items in return for operating as a secret shopper, filling out surveys, and other such activities are sent to millions every day. The items offered may be digital cameras, Sony Play Station and PSP systems, personal computers, you name it. According to the FTC, most of these are just disguises for pyramid schemes. You’ll wind up paying some form of “application fee” and never see the promised merchandise or your money.
Health Pills/Diet Pills/Bodily Improvements
Many solicitations offer effortless ways to lose weight, have more energy, even enlarge certain parts of the male and female anatomy without exercise or plastic surgery. Obviously these things don’t work. If you want to lose weight, eat less and exercise more. If you want to feel better, take vitamins or discuss your options with a physician. If you want a bigger… whatever… consult a plastic surgeon.
When receiving emails that promise you the world, the best thing to do is remember that if something sounds too good to be true, it probably is. Press the delete button and call it a day.
Written by srini on June 15th, 2009 with no comments.
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In his film Bowling for Columbine, director Michael Moore makes a point about the role that the media plays in keeping Americans frightened. Frequent news reports about violent crimes, terrorist threats, and all manner of mayhem are designed to keep people fearful and preoccupied with the terrors of the world around them, Moore’s film says.
However you feel about Michael Moore’s politics, you have to admit that Bowling for Columbine makes a good point and a strong argument. There are certain buzzwords that seem to be hyped by the electronic and print media that certainly do conjure fearful emotions and frightening images in people’s minds when they hear, see, or read them, especially in the post 9/11 world. Terms like terrorism, molestation, and identity theft are thrown about enough by the nightly news, CNN, and FOX News that they can make even Stephen King wet his pants.
Identity theft is a problem, of course, but is it as rampant as we’re led to believe? Does the problem warrant the spike in sales of personal paper shredders in recent years and the fear people have in making transactions by internet or telephone? Probably not. It’s something you want to safeguard yourself against, but those safeguards should be common-sense precautions. You don’t go walking in the bad part of town late at night with your pockets stuffed with fifty-dollar bills and you don’t post your name, address, and social security number on the internet. If you’re keeping every document that you ever may have written your name on locked in a strongbox that is locked in a safe that is locked in a bomb shelter that is beneath your basement, you may be letting the fear of identity theft have a little too much control over your life.
While it may not be necessary to shred every document that might be linked to you in some way to prevent identity theft, there are some precautions you should take to help prevent this and other types of fraud.
• Don’t use your social security number as your driver’s license number
• While over phone with customer service folks, do not give out your mother maiden name loud..even walls have ears.
• Use a PO-BOX for all your incoming mail. Even better if you get an full address from Mail Boxes etc. Usually it costs $15 a month. This way..your place of stay may change but your mailing address will stay content. Helping your credit score as well ensuring mail deliverability.
• Don’t keep your social security card with your other identification.
• Don’t keep your ATM PIN number on or with your ATM or debit card
• Always write “SEE ID” on the back of the credit card’s signature panel. NEVER SIGN IT with your signature.
• When accessing online portals from computers in public places such as Kinoks Library etc. Make sure you log out completely. Delete all the cookies and temporary file too.
These are commonsense precautions, but you’d be surprised how many people don’t do these things. The real key to preventing identity theft is the same as preventing other types of crimes: don’t let yourself look like a victim.
Written by srini on June 14th, 2009 with no comments.
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Being in debt is certainly no fun. The feeling of dread every time the phone rings, the sense of impending doom because you know that you can’t possibly dig yourself out of the hole that you’re in, and the self loathing that comes from essentially feeling worthless can cause undue stress and mental anguish at a time in your life when you’re probably already pretty stressed out.
The best way to deal with debt collection agencies is to avoid ever having to do so. By making sound financial decisions and saving money for unforeseen hardships you can stay out of the hot water of past due bills and collection accounts. Unfortunately, sometimes things just happen and eventually the bill collectors start calling. Here are some things to keep in mind if you’re dealing with debt collectors.
The Law is on Your Side
Collection agencies are governed by a law called the Fair Debt Collection Practices Act or FDCPA. Enforced by the Federal Trade Commission, this law spells out specific guidelines concerning what a collection agency can and can not do.
• Collectors may not contact you more than once per day regarding a debt.
• Collectors may not give information about your debtor status to any third party
• Collectors may not threaten any legal action which they do not actually intend to take
• Collectors may not call you before 8am or after 9pm in your local time zone
• If you inform a collector that you are represented by an attorney, the collector must deal with your attorney and not with you directly
• Collectors must inform you that their communication with you is an attempt to collect a debt and that any information they obtain from you will be used for that purpose
• If you advise a collection agency, in writing, that you wish them to cease and desist all contact with you, they must do so
It is important to keep in mind that these laws apply to third party collection agencies only, and not to the original creditors you owe. Being represented by an attorney or sending a cease and desist letter to a collection agency will not stop them from suing you. The law applies to consumer debt only. Certain civil debts (such as past due child support payments and federal or state taxes) are not covered by the FDCPA.
Written by srini on June 13th, 2009 with no comments.
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“I’m an idea man, Chuck. I get ideas all the time…sometimes I get so many ideas that I can’t even fight them off. You know I had the idea for wash ‘n’ dries? First? But they already had ‘em.”
Michael Keaton as Bill Blazejowski in Ron Howard’s Night Shift (1982)
A good idea can mean the difference between poverty and riches, between fame and obscurity. Have you ever had an idea that you just knew was good, but you ignored it? There are a great number of people who are very wealthy today all because they had just one good idea. Here are a few examples.
George was a filmmaker who had found success with his first major release, a movie about teenage life in the 1950’s. Still, he was having trouble getting his next movie OK’d by any studio. George was almost going to shelve the project when he had a good idea. He approached the studio and offered to make the movie for free. He’d take no pay as writer or director, but would own all of the rights to the film’s merchandising. The studio agreed. Star Wars went on to break all previous box office records and spawn five sequels. The movies also resulted in merchandising the likes of which had never been seen before and George Lucas is now a very wealthy man.
Bessie was working as a secretary in the ‘50s when she had her good idea. Using white tempera paint as a starting point, she created a “correction fluid” that typists could literally paint over their errors, allow it to dry, and keep on typing. Liquid Paper is still used in offices all over the world, despite the prevalence of computers. When Bessie Nesmith died in 1980 she had made a fortune and none of it had anything to do with her son Michael’s being a member of The Monkees.
Not everyone is going to be a George Lucas or Bessie Nesmith, and not every idea is going to create an empire. But a good idea can turn into a moneymaker, even if it just gives you a little extra cash. The next time you have one, don’t shrug it off and ignore it. Look into it, develop it, and see what happens. One day someone may write about you and what you did with your good idea.
Written by srini on June 12th, 2009 with no comments.
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Your credit rating plays an important role in your life. It is both your right and your responsibility to understand how the credit system works, how it affects you, and what you need to do to make sure that the information gathered and reported about you by the credit reporting companies is as accurate as possible.
Credit Scoring
Your credit score is the first thing most lenders look at when determining whether or not to grant you credit. It is also the one aspect of credit reporting that most people understand the least about. Your credit score is a numerical assignment (ranging from as low as 500 or so to as high as 900 or so) that tells the lender what kind of a credit risk you are. The score is based upon a number of factors, some of which you have control over and some of which you may not. Your income level, payment histories, and income to debt ratio all affect your credit score and are all things that you can control to some degree. Things that also factor in but which you may have less direct control over (or may never have realized can affect your score) are things like where you live, what kind of car you drive, what you do for a living, whether you’re married or single, whether you have children, and so on. This portion of credit scoring works similar to how insurance companies assess risk. Married people with children tend to be more stable than single people with no attachments, for example, and can therefore score slightly higher. Much more important than these esoteric factors, however, is your actual credit history.
Credit History
More people understand credit history. This is simply a record of how you pay your credit obligations and how many obligations you have. The Fair Credit Reporting Act dictates how long certain items may stay on your credit history. This is good because mistakes that you might have made when you were young should not be able to follow you all your life. It also gives everyone a “second chance”. It is possible to “clean up” your credit history, but it takes time. There is no “quick fix.” Companies that offer one should be avoided at all costs. They simply want to charge you to do something that you can do yourself. Many of them are nothing short of a scam.
Written by srini on June 11th, 2009 with no comments.
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