The Daily Ticker’s Aaron Task and Henry Blodget interview economist Joel Prakken

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It’s happened to almost everyone at some point in his or her lives, especially with the downturn in the economy the last several years.  It’s a situation that can be extremely stressful and feel like it will never end.  I’m talking about running out of money before running out of month.

I know several people who have been strapped for cash to pay bills and found themselves in unfamiliar territory, having to ask for or find a loan.

It’s not easy finding your self in a situation where you have to pay a bill but don’t have the money in a savings or checking account to cover it.  Even for individuals who earn a good living they can spend their way into situations like these by not managing their finances well.

A good friend and mentor of mine says often: “it’s not what you make, it’s what you save that will make you wealthy”.

So when you find yourself struggling to make a payment on a bill and start looking for ways to cover the expense, keep these ideas in mind.

Options for short-term loans

Certainly, we all have family and friends.  If you’d like to keep them family and friends, I’d highly suggest against borrowing money from them.  I have loaned money to very close friends who said it was a short-term loan to just get by and they’d pay me back.  Those same friends came back to talk about the loan a few months later only to ask for more money.  I’ve lost very close friends because of loaning money to them.

The reason the relationships ended with people I’ve loaned money to, wasn’t because I cut them off, but rather their embarrassment of not being able to pay me.  They want to avoid me because they think of the loan every time we’re together and that makes them uncomfortable.  So take my advice from experience, what sounds like a good idea of loaning or borrowing money from friends and family – Don’t DO IT!

Another option is to get cash advances on credit cards.   However, this can be complicated unless you live in Las Vegas where every casino has cash advance machines that look like an ATM.  They charge high fees to get the money but it is an option.  Unless you have no other alternative I’d avoid this one.

Payday Loans?

Then there are companies offering cash loans online.  Are these businesses just preying on the unfortunate or are they real solutions for people?  I’ve had this debate with people for years.  In a previous business I started back in 2000, we assisted small business owners obtain credit to grow their companies.  The challenge was that a large number of small business owners had horrible credit.  The options were minimal and we had to look for alternatives from the traditional bank loan.

As I would tell small business owners looking for a loan, I’ll provide the same advice here; “Don’t look for a loan when you need it”.  Banks and lenders prefer to lend to those who don’t need the money and aren’t in a rush.

That being said, sometimes people are in a rush and need money quickly and are willing to pay just about anything for it.  If, (and I really mean IF) you find yourself in a situation where you need the money now, can’t wait and are willing to pay for the convenience of the ease and speediness of a loan, then you could consider an online payday or cash loan.

There are a few positives to these types of loans.  The ease of getting them, even with poor credit makes this option very convenient.  In some cases you’re not even required to provide a credit check.  Another positive of looking at these loans online is that you don’t have to deal with sleazy sales reps at a Payday Loan office in your town or have people seeing you walk in to one.

Negatives of Payday Loans

Of course the negatives for dealing with these types of loans are many.  The most obvious is the cost of the loan.  You can pay upwards of 400% APR.  It sounds fine when you hear, “your fee is $25.38 on a $300 loan”, but when you calculate that as an annual percentage rate it’s enormous.  Again, if you need the money now and have no other alternative, AND have the ability to payback the note quickly, then it’s worth considering.

Another negative is also one of the positives.  It’s easy to get.  The ease causes people to not think clearly and take time to consider other options before applying and getting the loan that they could have received cheaper elsewhere.

Most payback arrangements are very short term and if not paid within that time frame, the fees start to stack up.  This can put most people into a circle of lending.  Borrowing from one place to pay off another.  (If you ever find yourself doing this: STOP!  Seek the advice of a financial advisor and develop a plan to get out.  The stress of borrowing from Peter to pay Paul is not worth it.)

After reviewing all the alternatives outside of friends and family, banks, credit cards, personal savings or selling something you own, and you decide your only choice is to do an online loan, make sure you work with a reputable company.

I’m not recommending any particular website or business for this.  I don’t have any experience of working with these lenders directly, but in doing research on the sites and who is promoting these loans I found a few things you need to watch out for.

Make sure it’s a direct lender.  There are a lot of sites selling leads to several companies and you don’t want to apply with one of those.  You’ll be harassed by sales reps and have your name on a list that will likely be sold to several companies in this niche.  Almost every site will tell you if they are selling your information or shopping your application with other businesses.   If you can’t see that written on the site look for a phone number, customer service section and a member login button.  If they are a direct lender they want people to be able to call them and login to make a payment.

Second, make sure you check the websites reputation online.  Do a search for the name of the site with the word “Scam” behind it.  You’ll uncover a lot with a simple web search.

Final bit of advice; never borrow more than you can payback quickly.  With the exception of education or a house.  I don’t believe any loan you take out to buy something should be longer than one year.  If you can’t afford to make payments to get something paid off in twelve months, you need to look at a cheaper item or at saving the money until you can afford it.  Yes, even a car.  Why make payments for four years on a vehicle, you’ll likely get tired of after two?

The Daily Ticker’s Aaron Task interviews David Kirkpatrick about Facebook’s IPO

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What do you think about Facebook stock?

Are you an optimist on FB telling your friends it’s a BUY, or are you netural?  Do you think it’s time for anyone who got in to sell now and take the loss?

The IPO Friday started with an opening of $38 and jumped to over $42 for the high.  The second day of trading the stock plummeted to a close of $34.03.  Currently at The Street.com there are two ‘Strong Buy’ recommendations. (Not sure who put those in there, because it doesn’t have a link to the analysts.)  Most financial sites I’ve researched don’t have analyst recommendations yet.

However, this Washington Post article states that it’s possible the stock will double or even triple over the next five years.  I’ll agree with this.  Although the initial reaction to the stock has come with doubts based on the drop in the stock price, it has huge potential.  Yes, there is still a big upside coming for this stock in my opinion.

About a month ago one of my investment banker friends sent me an email asking if I wanted in on the pre-IPO purchase of the stock.  The offer was to buy around $38 but you were locked in with the investment company to hold for six months.  My first reaction was not to buy just because I didn’t think the stock would do much and second because I had to sit on my money for that long with someone else controlling it.  After telling my friend, “I’m out”, I had second thoughts.  My doubts about Facebook doing much was based on personal opinion.  I’m online all day, typically 10-12 hours.  So I visit a lot of sites and see myself as someone with a handle on the pulse of online activity.  At the same time I have a bias toward certain sites.  I found my personal opinion was getting in the way of looking at the investment as just that an investment.

So I sat back and started to write down the pluses and minuses of the company.  The biggest plus that switched my opinion from neutral to buy was the conversation I had a few online marketers a couple months ago.  These guys spend a lot of money advertising online and have made a lot of money over the years with their websites.  They had recently tested Facebook ads to drive traffic and found that it was so successful, they cut their Adwords accounts with Google and moved the money to Facebook.  If advertisers are this successful with the ads just in the infancy of the program, it can only get better, which means it’s going to get bigger as well.

That’s when I called my broker and placed the buy order for Friday.  I got in but at a price of $40.  As of the second day of trading I’m down 15%, but am I worried.  Not a bit.  I know this stock has a long way to go and the company has huge potential.  I remember several years ago, doing the same analysis with Google when it went public.  Even though I came to the same conclusion – “BUY”, I never did.  This time I’m in.

So what do you think?  Do you buy, what price?  Are you selling, holding or keeping out?  Where do you see the stock in 90 days and 1 year? Let us know the comments.

The Daily Ticker’s Aaron Task and Henry Blodget interview Simon Johnson about JPMorgan’s $2 billion trading loss.

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For many young people – as in, 20-somethings – the idea of investing money is a relatively new one. Sure, you may have toyed with some minor investments in your younger years, or you may have taken classes that familiarized you with the stock market and general economic system. But to actually consider where to put your money and why to choose certain investments is a whole new ballgame, and it is one that requires a great deal of thought and preparation. Investing money can be an extremely beneficial practice if gone about properly – it’s figuring out just how to go about it properly that presents a challenge.

Particularly in today’s economic client, investment strategies are very tricky. In the U.S. for example, the economy has been relatively unstable for quite some time now, which directly translates to a generally difficult and unpredictable stock market. It has been very hard, even for experienced investors, to make money in the U.S. stock market in recent years. However, this is not to say that there are not opportunities available for young investors. In fact, it simply means that young people looking to invest a bit of money might want to diversify their options and look to less traditional types of investment.

One specific type of investment that comes to mind is gold bullion, which has gained some popularity in recent years. This may seem a bit strange, but if you head to a site like bullionvault.com, you will quickly find that gold bullion investment is a very legitimate and developed practice. Keep in mind, investing in actual gold bullion is entirely different from investing in gold mines. However, it still represents one way to manage your money, and one that might be particularly strategic under a turbulent economic climate.

Generally, people invest in gold as a means of protecting their wealth from currency value depreciation. As economies surge and struggle, their respective currencies gain and lose value accordingly, which means that without even spending or losing any money, you may lose value if your currency drops. Gold, on the other hand, is an extremely stable resource in terms of value, and is thus less prone to sudden gains and losses. So, the theory is that if your economy is weak, you can protect the value of your money by putting it in gold bullion, which should remain relatively stable even if your economy drops. This does not mean that gold investment is always a good idea, but if you are a young person concerned with the state of your currency and economy, you may want to look toward this type of investment, rather than something more traditional.

Guest Post

Source: bullionvault.com

Guest Post: The lending industry has undergone many changes during the last few years. Lenders are having difficulty meeting their obligations, and many have filed bankruptcy. Some loan programs are being eliminated making it harder for people with poor credit to get good loans.

Factors that Led to the Decline of Bad Credit Mortgage Lenders

• Increasing interest rates

• High foreclosure rates

• Loan buybacks

• Defaults on commitments

People with bad credit have fewer options for obtaining mortgage loans today. Some loans are requiring larger amounts of cash for down payments making these loans impossible for some people to obtain. Lenders are setting harder guidelines for first time homebuyers since they have been identified as being high risk for mortgage loans. Individuals who apply for bad credit mortgage loans can expect to wait longer for approval.

For some individuals, the only choice for a first time homebuyer’s loan is with a hard moneylender. Individuals can go to www.badcreditloans.com to see if they qualify for a loan.

What to Expect from a Bad Credit Mortgage Loan

• Individuals who do qualify for a typical bad credit mortgage loan can expect to receive their first mortgage with high interest rates, and if it is the second mortgage, they can expect the interest rates to be even higher.

• Some of these loans will offer fixed payments for the first couple of years, and then the payment can change to a higher amount.

• These bad credit loans will usually have a prepayment penalty attached preventing an individual from getting out of the loan without a large price.

Even though some lenders are offering bad loans to individuals with bad credit, some lenders offer loans with better terms. These good loans allow individuals better opportunities to acquire money to become a homeowner.

Good Loan Options

• Some lenders do not base the loan on an individual’s credit score, and these lenders are more willing to lend almost all the money necessary for the home.

• Alternative ways are used to cover the closing costs and other expenses for obtaining the loan instead of the buyer having to come up with large down payments.

• Someone can assist in helping the borrower become qualified by becoming a co-borrower on the loan.

• Grants are available to help with down payments.

• Some good lenders welcome first time home buyers.

• Loans are available with no penalty for prepayment. This allows individuals to be able to refinance once their credit rating is improved. They can refinance with lower interest rates for a better loan option.

Miscellaneous Things to Consider When Choosing a Bad Credit Mortgage Loan
Some lenders offer two options for interest rates. One is the fixed rate, which remains the same percent throughout the loan. The other one is the variable rate, which is flexible. When the market rate changes, it will cause the interest rate on the loan to change as well.

Some mortgage loans will allow individuals up to thirty years to pay back the money. However, it is better if an individual can pay the loan back sooner. A property that is not completely paid for will be harder to sell if someone chooses to put the property on the market. In addition, if an individual fails to meet the payment obligations, the loan will be in default and the bank can take possession of the property.

Before financing a property, an individual will need to do some research to find the best lender. By researching loan terms, an individual can find better choices for bad credit mortgage loans. The lenders will need to be investigated to ensure that they are reliable.

While in college I really screwed up my credit score.  Just like many college students, no one taught me how to manage my money or the importance of a personal credit score.  Who knew how much impact your personal credit score would have on your life?

I never filed bankruptcy or defaulted on a payments.  I just worked out exactly how to pay back the debt and get my score back to a solid number “800″.

Yahoo Finance asked me to tell the full story, so I did and you can read all about it…

Click Here to read the full article on raising your FICO Score

If you believe the doomsday prophets and the naysayers, you have no chance of landing a dream job within the first five years after graduating from college. This kind of sensationalized approach to a generational problem is not only inaccurate, it has a downward pull on graduate motivation and optimism. If you’re going to land your dream job, you need to set the statistics aside, set your sights on the future, and determine to get ahead quickly.

It’s possible to land your dream job right out of college. Doing so takes a lot of hard work, some knowledge of workforce tactics, a good handle on the job marketplace, and even a little bit of luck.

8 Tips to Land Your Dream Job

If you want to land that dream job, here are some things you’re going to need to do:

Dream Job Tip #1

Target specific positions at specific companies. This is going to require you to do some legwork. You’re going have to make some phone calls, do some reading, and maybe even become a bit of a Facebook or LinkedIn snoop. Figure out what position it is that you want. Even if there’s already someone in that position, identifying what it is will help you as you develop your resume and your job pitch.

Dream Job Tip #2

Forget geographic limitations. If you’re single and don’t have kids, you’ve got a lot more flexibility than the guy with an infant son and a wife. If you really want to land that dream job, there’s a good possibility you’re going to have to go somewhere else to do it. For example, if you want to work in finance, you’re probably going to need to go to New York, Chicago, or San Francisco. If you want to work in Tech, Atlanta and Raleigh-Durham have been hot for the past few years. If you’re willing to take a job in Alaska or Texas, you’re more likely to get hired.

Dream Job Tip #3

Learn to master the interview. If you’re one of the lucky ones that gets an interview, you need to make it perfect. Dress to succeed. Have a positive attitude. Develop nonverbal communications skills like mirroring and matching. Beyond all of that, however, you need to be honest and authentic. Employers know when someone who’s fresh out of school is embellishing. Be honest about your limitations, but then demonstrate your desire to overcome them by working hard.

Dream Job Tip #4

Don’t beg. You don’t need a job. You need a few basic things like food, water, and shelter. But you don’t need a job. If a company isn’t the right fit even though it seems like your dream job, it’s time to move along.

Dream Job Tip #5

Ask questions. Gather all of the information you can. This goes for before, during, and after the interview. Don’t ask questions about benefits or pay on the first interview; if it’s truly your dream job, those things will work themselves out later on. Get the interviewer to talk as much as possible, and consider taking notes.

Dream Job Tip #6

Don’t make assumptions.  You might get the impression from the start of the interview that the position has already been filled, and that the interviewer is just going through the motions. You might be dead wrong. On the other hand, the position could be filled, and the candidate could fail within a few weeks. You want to be next on the list.

Dream Job Tip #7

Don’t be afraid to take an internship. Because of the lagging job market, the fact is that your dream job might just already be filled. That doesn’t mean you give up; you need to stay as close to that dream job as you can. Consider doing an unpaid internship in order to build up significant experience, and maybe even get your foot in the door when a position does open up.

Dream Job Tip #8

Rely on your network. Your professional network is probably pretty small when you’re still in school, but it’s growing. Talk to those professors with whom you have rapport about identifying leads. Ask for introductions to key players that they may know. Get your name out there by connecting with your network via social media. LinkedIn has led to more than one recent graduate getting a dream job offer.

Getting your dream job takes patience, but more than that it takes dedication. Don’t let yourself languish in a dead-end position while you wait for a dream job to open up. Chances are that, by the time it does, you will have lost that passion. Stick to it, and don’t stop until you’ve got the job you want.

GUEST POST: Author bio

Dominick Frasso is the SEO/SEM Specialist at Vistage International, an executive coaching organization that helps CEO members build better companies through unique executive development opportunities. In order to provide a powerful learning environment for members, Vistage identifies qualified mentors seeking CEO jobs and positions them as leaders of CEOpeer groups. Dominick leverages his experience in multiple marketing roles, including advertising, media buys, direct mail, email, marketing analytics, and SEO / SEM to help Vistage acquire qualified Chairs and recruit members with a high potential for success in the program.