Financial Idea's Blog

3 Holiday Shopping Stock Picks (NILE, SIG, HAS, MAT, BBY, AAPL)

Find out where the hot spots are going to be this holiday shopping season.

Technorati Tags: Financial Ideas, Investing strategy, Retirement

Should I Invest Internationally?

Maybe. This concept, like most investing concepts, is a very individual thing and is not necessarily the right thing for everyone. The explanation given here is not in any way intended to encourage you to invest internationally, only to understand the idea so that you can properly consider it.

It seems obvious that investing internationally means buying stocks, mutual funds or bonds which are issued by companies not based in the United States, but do you know what those companies are or what they do? We can guess with some names, like China Mobile (CHL), for example, and we might be mostly right, although they may also do some things that would surprise us.

Then there are harder ones, like Diageo (DEO) from the United Kingdom. What do they do? They’ve built themselves up over the years to where they now own brands like Guiness, Moet, Johnnie Walker, Smirnoff, Captain Morgan and Tanquery, among others. They also own Louis Vuitton, the maker of really expensive things for women.

So, is that all you need Read More …

Technorati Tags: foreign investments, Invest international, investment strategy, What to Invest In

What Does A College Plan Do For Me?

Well, it does lots of things – so where do we start? OK, before the first thing , let’s point out that anyone can contribute to it. That is, you can be our future student’s mom and dad, or grandma and grandpa, or godparents, or just family friends wanting to give a shower gift.
That aside, what it does for everyone involved is make it possible to have enough money for post-secondary education, which goes up at a rate of about 7% every year, double the amount of normal inflation.
This happens as a result of putting together a plan well before the last minute to ensure that your goals can happen. I can’t tell you how many people Read More …

Technorati Tags: college plan, Invest in college, pay for school, student loans

Your Kid’s College Loan: Who Should Foot The Bill?

Discover the federal student loan options for both parents and students.

If you could afford it, you’d pay for your kid’s future education expenses and not borrow a cent. But after reviewing your finances and potential scholarships offered, you may realize that student loans will be required to pay for part or all of the cost of college for your entering freshmen.

What are the federal student loan options for both parents and students for borrowing money? Read on to find out.

Technorati Tags: Financial Ideas, Investing strategy, Retirement

All Annuities Are Bad, Right?

This is a tricky one for most people, and for a couple of reasons.

One is that people like Suze Orman tell us that they are bad, and therefore they must be. Keep in mind that Suze Orman used to have a federal license for the securities industry, and that she let it lapse. The reason for that only she knows, but one characteristic of having such a license is that you are obligated to tell the objective truth or face possible civil or even criminal charges while perhaps even being barred for life from the industry. If you’re not licensed, you can say whatever you want within 1st Amendment rights. Why she says it is a different story which I won’t speculate on.

A second reason this is tricky is because many of them really used to be bad. While it’s not an absolute rule, it’s true in many cases that annuity contracts written prior to about 2003 lacked some of the really great features that are now available. We’ll get to that in a second.
A final reason comes down to how a professional advisor explains them to you, and whether they fully explain the four basic types of annuities, so that, if one is appropriate for you, you’ll know which type best fits your needs.

So, what is an annuity basically? It is an insurance contract, written by an insurance company, and like with most insurance policies, the company is betting that you won’t live as long as you think you might. This insurance contract guarantees either a specified amount of money which will come to you every month for the life of the contract, or it guarantees a minimum income or a minimum withdrawal which you could, but don’t have to, take every month. The contract runs typically for your life and the life of your spouse, but that’s just one of many choices. You could choose a reduced benefit if only your spouse remains, or no benefit, or you could Read More …

Technorati Tags: annuities, annuity, Retirement

What’s Wrong With Getting A Big Tax Refund?

The obvious answer here seems to be “nothing”.  But actually, it’s a big something.

I know many people who tell me that getting a big tax refund is actually a part of their “budget”, because it means they know that every April they can take a family vacation or upgrade their big screen TV or pay off some more debt or whatever it is in their case.

The first bit of honest truth is that these people don’t have a budget.  A budget is something you create and live by, with periodic adjustments, which is intended to keep you living within your means and actually saving and investing for your future as well.  It doesn’t allow for splurging without planning.

(On that note, before you all click the back button in disgust J, it is still possible with a budget to take a family vacation and upgrade your TV, you just have to plan for it and allocate a bit each paycheck instead of getting wild and crazy every April!)

Last off topic bit about budgeting, make sure that whatever budget form you use, that it starts with you putting down your Gross Income at the top, and the VERY NEXT THING should be how much you can save and invest.  If that is 10% of your gross income, you have a pretty good chance of reaching some of your goals.  If it’s 20%, you have really good chance of reaching all of your goals.  After that comes taxes, housing, insurance, utilities and everything else.  Most budget forms have taxes and such right after income, with saving at the bottom.  That says “save whatever is left over”, while the message should be “pay yourself first.”  Ok, I’ll get off that soapbox for now.

Why don’t you want a big refund?  Simple, because Read More …

Technorati Tags: tax deduction, tax rebate, tax refund, US finance

Why Shouldn’t I Just Buy An Index Fund?

Okay, on this one, I’ll start off by noting that, just like the idea of doing-it-yourself, it’s entirely possible that this could work, and in some specific time periods in the past it has worked. Of course, funds which follow the same index but are from different fund families behave a little differently, and within fund families there are funds which track dozens of different indexes. My English teacher would remind me that I should say “indices”, but I do what I do, and she does what she does.(That lesson did actually stick, I’m just having fun today.)

Let’s look at one of the most popular indexes, the S&P 500.

Lots of fund companies offer a version of this, which essentially is Read More …

Technorati Tags: how to invest, index funds, Invest Stock, learning index funds, What to Invest In

What’s A Dumb Financial Question?

Oh good, an easy question! ?

There isn’t one.
Say you came into my office and asked me a question, I explained the answer, and you nodded and went about your business, understanding a little bit of the answer but not really why or well enough even to remember a week later. Would I have done my job? Not really, or at least not yet.

That’s how a lot of information gets “shared” these days though. “Answers” are disseminated across the TV and the Web by people who know what they’re talking about and by people who don’t. Some of them are in official positions and so “should know” and others are not so official, like many bloggers, but could and do really know.

The opposite is also true,but what’s really important to you is, do YOU know? After all, it’s YOUR money.

Here’s my approach: Read More …

Technorati Tags: Financial Question, How to Invest Stock, What to Invest In

Why Shouldn’t I Use A Discount Brokerage?

This is a really great question, especially since many of the most popular investment books available today say exactly the opposite.

They tell you that you can do it yourself, and for a lot less money, and you know what? They’re right! But as you probably suspect, there’s a hidden catch that they’re not telling you about. The catch is you.

You see, most of us are really skilled at one or more things, but there’s thousands of things we could be skilled at. I could walk down the street and stop any one of you and find out maybe that you’re a top-notch web designer, or a first-rate auto mechanic, or that you run an Alaskan fishing expedition, or any number of other possibilities that I don’t do.

Could I learn Adobe’s Photoshop and InDesign? Sure. Would that make me a web designer? Nope. Could I go to a nearby technical college and learn how to be an auto mechanic? Yes, but that wouldn’t make me a good one. And in the interest of full disclosure, I do my fishing at the local Kroger. I could certainly save some fees on those tasks by doing them myself, and so mathematically the do-it-yourselfers are correct, but that’s not really the issue when it comes down to it.

So can you invest by yourself and save some fees? Read More …

Technorati Tags: discount brokerage, How to Invest Stock, Investing Stock, Learn To Invest, Stock Market Education, What to Invest In