Financial Success for Young Adults

How to Use Yahoo Finance to Research Stocks

LaTisha Styles — Thu, 17 May 2012 10:00:01 +0000

When I wrote last week’s Money Minute on Shorting Best Buy, I mentioned that I used Yahoo Finance to get the ratios and numbers for my quick evaluation. I like using finance.yahoo.com because it has a very clutter free interface with just the right amount of information I need to make a quick decision of whether or not I want to move forward with more in depth research.

So I decided to post a video tutorial on how to use Yahoo Finance to begin your online equity research. You can get information on how to use the information you find on their Key Statistics page in our previous article about using financial ratios to invest.

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The VIX: I go this way, you go that way

LaTisha Styles — Mon, 14 May 2012 12:00:00 +0000

Remember that scene in Rush Hour when Chris Tucker and Jackie Chan teamed up to kick some butt? They stayed together but fought in different directions to maximize their attack. Their method of attack is similar to the VIX and the S&P 500.

The VIX is the Volatility Index. It is managed by the Chicago Board of Options Exchange and it measures the market’s expectation of 30 day volatility based on S&P 500 options prices. Volatility is basically movement. Just like Jackie Chan and Chris Tucker, prices can go up or down in wild swings. The more wildly the price swings, the more volatile that price is.

The VIX was introduced as recently as 1993. It is based on the prices of both S&P 500 calls and puts. The idea is that investors trade based on fear and the VIX tracks the fear and uncertainty of investors through the option volume.

http://www.cboe.com/micro/VIX/vixintro.aspx

As you can see, the VIX tends to spike each time the S&P 500 index drops. The highest spike was during the recession and market drop in 2008. Traders can use this information to their advantage to plan a strategy for volatility. There are VIX options, VIX futures and options on VIX futures. So there are numerous ways to use this tool in your portfolio.

Before you start to trade the VIX, you should know that the CBOE plans to update the VIX methodology to reflect “the way financial theorists, risk managers and volatility traders think about – and trade – volatility.” The new symbol will be VXO. Also remember that options can be risky. Visit the Chicago Board of Options Exchange website at CBOE.com for more educational resources.

Standard & Poor’s, S&P, S&P 100, S&P 500, and S&P SmallCap 600 are registered trademarks of McGraw-Hill Inc. CBOE Volatility Index, FLEX, FLexible EXchange, LEAPS, MNX, OEX, VIX, XEO CBOE, and Chicago Board Options Exchange, are registered trademarks of Chicago Board Options Exchange, Incorporated. VXN(SM) and SPX(SM) are trademarks of Chicago Board Options Exchange, Incorporated. The methodology of the CBOE Volatility Index is owned by CBOE and may be covered by one or more patents or pending patent applications.

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Debt: The Elephant in the Room

LaTisha Styles — Fri, 11 May 2012 14:00:00 +0000

So far we haven’t talked to much about debt. I hate my debt. But most college graduates have debt and some more than others. Think about it. We go to college for 4 years, and often times more just to get our degree so we can join the workforce. That college degree can be pretty expensive, especially if you decided to go to a private school or if you had a hard time settling on a major. Some people successfully worked their way through college and did not have to take on any student loan debt, but for many graduates, student loan debt burden is common.

First I am of the belief that there is a difference between good debt and bad debt. Good debt is called leverage. Leverage is a way for you to do more than you normally would be able to and you experience a benefit far greater than what the debt cost you. Businesses use leverage all of the time to finance new projects because they’ve determined that the payoff from the new project will more than cover the cost to undertake the project. That is how you have to look at the debt you took on to get a degree. The expecting salary of a college graduate is higher than that of someone who only graduated high school.

Examples of good debt include student loans and certain business loans for example.
Examples of bad debt would include personal loans and credit card debt so you can go shopping. (Really? How important were those new shoes?) You should not borrow money to pay for something that will have less value as time goes on. I’m sure there are several bankruptcy lawyers in San Diego that could help you reduce or eliminate your debt, but bankruptcy is not the best solution all the time.

If you want to be a financially successful investor then you need to manage your debt the same way you manage your investments. You should monitor your credit score each month. You can get your credit score free once each year from annualcreditreport.com and there is also a free service called Credit Sesame that will give you your score each month. If you want to improve your credit score there are two key things you need to do.

Reduce the outstanding balance on credit cards. The less of your available credit that you actually use, the better.
Pay each card on time each month. On time payments have a great effect on your score.

The best advice is to pay off debt so you won’t have to make decisions based on money or fear. Then you will be really free.

How are you managing your debt?

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Young Entrepreneurs: Setting Up Payment Processing

LaTisha Styles — Wed, 09 May 2012 14:31:27 +0000

We once interviewed a bakery owner in the past who had various ways to accept payments. If you are the owner of a bakery you might also want to know how to accept payments. Let’s take a look.

Getting your bakery ready to accept credit cards and mobile payments isn’t hard, but it is necessary to take several steps. While every business will have its own unique issues with card processing, it is possible to get a bakery set up with a set of general steps, then address any issues as they come up.

Start by researching the best merchant account processors. Most bakeries conduct the majority of their business in a single area, but some bakeries need to accept payments from customers as they make deliveries or sell in off-site areas such as fairs and food shows. Carefully consider the type of processing that your bakery requires, then look for the best merchant account processor for these needs.

Compare Payment Processing Services

Comparing services between merchant account processors can be tricky, however. In general, a credit card processing service can charge fees for several different types of services, and there are different payment formulas that determine how much a bakery will pay. Some services will charge a flat monthly rate simply for being able to access the service. In addition to this, credit card processing services typically charge a fee for every credit card payment that they process. This fee can be a percentage of the total transaction amount, a flat rate, or a combination of both.

Deciding what fee scheme is the right one for your bakery will depend on the total number of and average amount of your sales. Since many bakeries have a high volume of transactions but a low average sale amount, it makes the most sense for most bakeries to look for a merchant account processor who charges based on a percentage of the total sale amount.

Pay Attention to Fees

Merchant account processors that charge flat fees will typically charge around fifty cents to two dollars every time a customer swipes his or her credit card. Bakeries that provide many customers with small orders, such as a dozen donuts or even a single cookie can soon discover that these flat fees will eat up any profit that could be made on these items, and in some cases end up costing the business owner money. The exception to this is specialty bakeries that specialize in a small number of large orders. A bakery that only sells a few high-dollar wedding cakes every week might do better with a flat rate scheme than a percentage-based one.

After reviewing the fees and starting services with a merchant account processor, be sure to keep accurate records of the credit card purchases made in the bakery. New credit card processing companies can be elaborate scams and/or provide their customers with inaccurate billing statements. While many bakeries may find tracking a lot of their smaller sales to be tedious, it is important to make sure that the merchant account processor that your bakery has chosen to work with is fair, accurate, and honest.

How do you process payments?

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Business Life Insurance

LaTisha Styles — Tue, 08 May 2012 14:00:30 +0000

Standard life insurance is also known as death cover, because that’s when it pays out – in the event of a person’s death. Death cover is normally combined with critical illness cover, which pays out in the event of a person developing a critical (life-threatening) illness that is covered by the policy.

The Met Life Tower, aka the 'Clock Tower'. Madison Avenue, Manhattan

A Life Insurance Policy for Business Owners

Business life insurance works in a similar way in that it pays out in the event of the death (or critical illness) of certain key members of staff without whom the business would sink. If you’re a sole-trader, or work in a partnership with one other person, then what would happen to the business (and the livelihood of the surviving partner or their next of kin) if either of you were to die? What if your business is based on the skills of a particular person – perhaps you sell hand-crafted jewellery, for example: what would happen if the person who makes the jewellery were to die, suffer a terminal or critical illness or permanent disability? Could the business carry on after the death of that person?

Key Man Insurance

Even if the key person in question doesn’t have a critical illness, how would the business cope if they were unable to work for a significant period, for example because of a broken leg or bad back or mental health problems?
If your business relies on the skills or mere existence of a particular person (or particular people) then you should consider taking out ‘Key Person Insurance’ to protect up to two people (they can be a business owner or an employee). Then, if they were to die or develop a critical illness, the policy would pay out a lump sum, which should hopefully be sufficient to keep the business afloat whilst someone else with the necessary skills is found or trained up to fill the gap.

Some key person insurance policies will also pay out a monthly sum throughout the duration of an extended absence due to ill health.

There are other reasons to consider this type of insurance. Let’s say that you own a business with your trusted business partner, who happens to be married to someone who couldn’t care less about the business and with whom you could never work. If your business partner died, their share in the business might pass to their spouse, depending on what was said in their Will and in the business’s constitution. You would probably wish to buy that spouse out, but might not be able to do so without a key person insurance pay-out.

Business insurance is starting to sound like a good thing to research. How are you handling your life insurance needs?

Carnival of Money Pros

LaTisha Styles — Sun, 06 May 2012 21:59:25 +0000

Welcome to the Carnival of Money Pros. We’ve got some great posts here today so without further ado, let’s get right into it!

PITR @ Passive Income To Retire writes The Power of Re-Investing Profit – Find out why re-investing profits is advantageous to establishing a sustainable business model.

Kevin @ Thousandaire writes How to Save Money on Vacation – Use frequent flyer miles, buy your hotel from groupon, and eat cheap foods if you want to save money on your vacation.

Jeffrey @ Money Spruce writes Hitting a Financial Knowledge Peak (and What Really Matters) – I’ve spent the past 2 years+ absorbing all the personal finance knowledge that I possibly can. Books, blogs, webinars, conferences, and more – I’ve read a ton on a wide range of topics. I don’t know everything, but I still feel like I’ve hit a knowledge peak.

Sustainable PF @ Sustainable Personal Finance writes Recession Gardening to Save Money – I recently discovered a practice that I’d never heard of before – recession gardening.

PPlan @ Provident Plan writes Seven Deadly Sins and how they lead to Financial Disaster – Learn how the seven deadly sins offer financial guidance.

Shaun @ Smart Family Finance writes Ways Your Family Can Invest In Gold – As many world economies continue to stagnate in today’s weak global economy. Investors are looking to broaden their portfolio horizons and gold is one investment that is popular.

TRL @ The Retired Landlord writes Real Estate Investing Has Risks – Investing in real estate has its risks and expenses. Find out what you can do to prevent a negative cash flow.

YFS @ Your Finances Simplified writes Top 11 Reasons You Should Use Yodlee MoneyCenter – You should keep track of your finances. It is as easy as that. Whether you decide to use a pen and paper, a spreadsheet, or an online account aggregator, you should have an idea of how much you are spending and on what.

Hank @ Money Q&A writes Which Is First: Paying Off Your Debt Or Investing For Retirement? – Should you pay off debt, or should they start a retirement account first? This is a question that has plagued experts forever.

Crystal @ Budgeting in the Fun Stuff writes Build a Home Series: The Waiting Sucks – Mr. BFS and I have been waiting to hear back about pricing on a bunch of options for our new house, but it takes forever to get information!

MMD @ MyMoneyDesign writes How to Pick Good Mutual Funds for Your 401k or Retirement Plan – Are you struggling to pick some good mutual fund options for your 401k? If so, here are my easy to follow tips for making the best of the choices you have before you.

Suba @ Broke Professionals writes How Playing Monopoly Can Improve Your Financial Knowledge – How Playing Monopoly Can Improve Your Financial Knowledge is a post from: Broke Professionals if you enjoy it, please visit us and subscribe to the Feed. If you haven’t played Monopoly before, you should download it to your phone or buy the board game. Don’t worry, there’s not much difference.

Corey @ 20s Finances writes Why Cars are Destroying Our Society – What kind of car do you drive? Are one of those people that worries about breaking down on the side of the road because your car is older than most high schoolers? Or are you someone who loves the smell of a new car. We all know that smell – it’s not just a sign of its recent production date, but is also about comfort, security, and assurances (aka warranties).

Wayne @ Young Family Finance writes Buying the Best Car for Your Money – Buying the best car for your money involves considering quality in addition to the sticker price. Find out if you are getting the best car.

Dr. Dean @ The Millionaire Nurse Blog writes I Can Cut Your College Costs by 40%, Guaranteed! – How can you save big money and still get your degree from that Big Name University? Let me show you.

Jen @ Master the Art of Saving writes I Hate Housecleaning…But I Love Earning Opportunities – I’m not one of those people who enjoy cleaning; I absolutely hate housecleaning. No way that sticking to my routine was worth passing up an earning opportunity.

MR @ Money Reasons writes Learning Versus Watching TV As Entertainment – Learning instead of Watching TV can be very rewarding! Why not try to learn something simple and quick and see if you find it rewarding or not?

Aloysa @ My Broken Coin writes Curb Your Spending with Pinterest – Yes, you’ve read it right and no, I have not lost my mind. I believe that you can curb your spending with Pinterest. If you’ve been reading this blog for some time now, you know then that I am a shopper and a spender.

Jon the Saver @ Free Money Wisdom writes Do Your Kids a Favor and Open a 529 Plan – Did you you can benefit from a 529 college savings plan if you open one? you can avoid taxes and shelter your money for future expenses!

Evan @ My Journey to Millions writes Wow. . .I Have Been at My Job for Five Years – I have pretty mixed feelings about being at my job for five years. On one hand, I absolutely love my job for reasons other than money I don’t think there are many people who get to say that. My bosses are awesome. Period. I choose to hang out with them outside the office, how rare is that? Each inspiring in their own way, but both men are self made wealthy individuals that are just fun to hang out with.

Linsey @ 1099 Mom writes Ask 1099 Mom: What Makes a Good Sales or Media Pitch E-mail – I get pitched numerous times during the day. Whether it’s for my blog, freelance articles, or social media promotion, there is no end to the requests for mention in my online properties. Some of these pitches are amazing. Truly. They make me warm and fuzzy and confident in my decision to promote. Others just stink. Here is what I look for in a great pitch. Use these guidelines anytime you reach out to a potential client, media rep or investor.

Little House @ Little House in the Valley writes Bialetti Espresso Maker Saves Money – Over the past 5-years, I’ve been able to bring my every day drink down to the lowest cost possible including using a Starbucks Gold Card to earn free drinks and free additions, like syrup or soy milk. Yet, I hadn’t figured out a way to make my drink at home without spending a fortune on an espresso machine. That was, until now….

Daisy @ Add Vodka writes Letting Go Of Ideals – I find that in the PF blogosphere, there is a lot of intertwining with self improvement blogs and I think that by tracking our spending, budgeting, investing, and working toward financial goals leaks into other parts of our lives as well.

John @ Married (with Debt) writes Addicted to Debt – We don’t really think of debt as an addiction. It’s not as though you have a burning desire to get debt if you don’t have it. You don’t hear about the car owner who recently made their last payment and started to crave making those monthly payments again.

Jeremy @ Modest Money writes Importance Of Diversifying Online Business – In the blink of an eye, your online business can get turned on its head. It is incredibly important that you diversify both your traffic sources and income streams.

101 Centavos @ 101 Centavos writes Using Cattle Panels to Support Tomato Plants – Staking up and supporting tomato plants has got to be one of the more time-consuming pastimes of the home gardener, and there’s plenty of ways to do it.

Don @ MoneySmartGuides writes Is Tipping Out of Control? – Growing up, I would see my parents tip the waiter or waitress at the restaurant where we ate. I would see my Dad tip the barber for cutting our hair. Other than that, there wasn’t much tipping done.

Todd Tresidder @ Financial Mentor writes Payoff Mortgage Early or Invest – The Complete Guide – This definitive guide explains the surprisingly complex issues surrounding your best choice for savings – either paying off your mortgage early or investing. It provides a step-by-step process to help you make this important savings decision.

A Blinkin @ Funancials writes It’s The Economy, Stupid! – With the Presidential election in the U.S. beginning to heat up, it is natural to forget about elections elsewhere in the world. But before our elections start to cause volatility in the Fall, a round of elections in Europe in May could have a very meaningful impact on the marketplace.

Jason @ Work Save Live writes How to Retire Comfortably: Start With the End in Mind – I hope you enjoy the 4th post of my ‘Understanding Retirement Planning & Investing’ series! If you’ve missed the first three posts be sure to check them out! Everything You Need to Know About a Roth IRA & Why to Start One.

Maria @ The Money Principle writes Money for all seasons II: income, spending and age profiles and received wisdom – In brief, I see the expectations of pitfalls in different -seasons- are the following.

Daniel @ Sweating the Big Stuff writes Things I’d Buy If I Were Rich – It’s fun to daydream about what we’d do with more money than we could ever need. Here’s my list of items I’d like to have if I were in that situation.

Kyle @ The Penny Hoarder writes How to Make $24/Hour Teaching English Classes Online – If you know how to speak a language, you qualify for this freelance job. There’s a world full of people that are trying to learn how to speak English.

Earth and Money @ Earth and Money writes Planning a Green Frugal Wedding – Venue – When it comes to the venue, you can be both green and frugal without seriously defying standard wedding traditions.

Ted Jenkin @ Your Smart Money Moves writes 5 Things You Won’t Hear At The College Graduation Commencement Speech – It’s been over 20 years since I heard my college graduation commencement speech. I can’t say I remember very much of it except that it was like hearing some sort of State Of The Union speech. So many kids will be graduating school soon and beginning their journey into Real Life 101. You’ll be getting unsolicited advice soon from friends, family, professors, and then inevitably some final words of wisdom from a renowned speaker at your graduation. Here are five things you won’t h

Jeremy Waller @ Personal Finance Whiz writes How to Wreck Your Car, Buy a New Car, Refinance Your Mortgage and Pay off A Credit Card at The Same Time – What a crazy month it has been. I feel like I’ve gone through a financial blender. As I mentioned a few weeks ago, my beloved Jeep was totaled. I was rear-ended by someone going 60 mph. My car didn’t stand a chance. State Farm estimated it would cost $10,132.95 to repair. But, the Jeep was This post was originally posted to Personal Finance Whiz.

Amanda L Grossman @ Frugal Confessions writes Sifting Through Energy Company Offers in a World of Deregulation: Part 1 – Two weeks ago while shopping for electricity I gave up. By “giving up”, I mean that after finding out I would be charged a $9.9

KT @ Personal Finance Journey writes Do You Take an Honest Look at How You Spend Your Money? – When you see your friends buying nice things such as a new car or a second home, do you automatically think that they have gone deep into debt for the purchase or do you secretly envy them and think they must have come into some money? Do you think, some people have all the luck

Steve @ Money Infant writes 5 Smart Things to do With Your Money – The following was written as a guest post for MI: Learning to make your money work for you is a good idea for anyone who has suffered from the economy in

FG @ Financial God writes Five Tips on How to Protect Yourself from Getting Financially Destroyed – 1. Invest money in precious metals. Even the gold pessimist Jon Nadler recommends that it is wise to store about 10% of your net assets in the form of physical, allocated gold. This means gold you hold in direct physical possession, or in vaults overseas.

Miss T. @ Prairie Eco Thrifter writes How to Save Lots of Money by Making a Few Simple Drink Changes – The following list features some common drinks and how to save money when you buy them.

Lazy Man @ Lazy Man and Money writes MLM of the Week: Youngevity – Scam or Not? – It is a seemingly never-ending battle to help prevent consumers from being scammed by MLM schemes. Today we look examine another one of them: Youngevity. When I looked into the prices of Youngevity’s products, it had all the tell-tale signs of an MLM scam.

Mr. Money @ Smart on Money writes ING Direct Remote Deposits Now Available: Does Your Bank Offer a Remote Deposit App? – Today I thought I’d do a quick look at the ING Direct App and it’s functionality, and then take a look at what other major banks currently offer some sort of remote deposits.

SFB @ Simple Finance Blog writes Are Mortgage Points Worth It? – Breaking down the numbers to see if mortgage points to secure a lower interest rate on your home loan is really worth it.

Ashley @ Money Talks Coaching writes We Maxed Out Our Roths! – We are having a good April! Earlier this week I revealed that we refinanced our house.

Eddie @ Finance Fox writes I Filed My Taxes, I’m Owing and I’m OK With That! – This weekend I got around to completing my taxes, and without much surprise I’m owning the government $1,800 in taxes.

Tushar @ Start Investing Money writes Can Fun Money Fit into a Smart Investing Plan? – This Post was Originally published at Can Fun Money Fit into a Smart Investing Plan? on Start Investing Money

krantcents @ KrantCents writes The 3 N’s of Success – The 3 N’s of Success is the fourteenth in a series of articles to help you reach your goal.

Investor Junkie @ Investor Junkie writes How to Manage Risk? Diversify! – The best question I always ask “What’s the worst that can happen?” Once you created this list, attack the low hanging fruit first, the ones most likely to occur, or the easiest to mitigate. Creating this list won’t obviously help with the “black swans”, but they more than likely be on your radar. By planning ahead of time for possible risks, you will minimize the possible outcome should the occur

Sean @ One Smart Dollar writes Rent, Don’t Buy – Do you have a home project that needs to get done, but a $500 tool is standing in your way? Save your monday and don’t buy it, just rent.

Teacher Man @ My University Money writes We Are Officially Media Moguls – Hey man, you want to buy a blog” “Can we do that?” “Yah, but our girlfriends will kill us…” And just like that, we began the process that ultimately led to us buying a blog that is pretty cool by any metric (maybe even as cool as this one) – Young and Thrifty.

Young @ Young And Thrifty writes Time to Take a Step Back – About three years ago, I had a dream of starting a personal finance blog. My family and my boyfriend laughed at my lofty idea. I thought- I’ll show them! I can be successful if I work hard at it. It was my dream to make it successful and show the world that a female voice could swing with the big boys in the personal finance blog realm (woot!).

Brent Pittman @ On Target Coaching writes I Don’t Want to Be a Financial Advisor – Reasons why it would be cool to be a financial advisor and ultimately why I don’t want to be a financial advisor.

Matt @ Living in Financial Excellence writes April Financial Literacy Month: April 27–Moving Costs – Yay!! It’s my turn to do a video for Financial Literacy Month! Since I’m in the middle of moving from Wisconsin to Iowa, I thought it would be timely to share how we looked at a few of the financial issues we’re experiencing during the move.

Beating Broke @ Beating Broke writes Money Rules by Jean Chatzky – Chatzky is a pretty big name in the realm of personal finance media, so when I was asked if I wanted to review her latest book, I jumped at the chance. In Money Rules, Chatzky aims to break down personal finance into it’s most simple denominators and give it out in a set of rules.

SB @ Finance Product Reviews writes Best 3 Credit Cards For Travel Rewards in 2012 – We searched all travel rewards cards, analyzed their features and then listed the top three in 2012 based on the research. These are the top 3 leading travel rewards cards in USA in 2012

SB @ One Cent at a Time writes Saving Money or Earning Money Where to Put your Priority? – The problem comes when you are choosing one over the other or, giving priority to one over the other, due to limited time and resources. A guide to help you make informed decision.

Paul Vachon @ The Frugal Toad writes The Effect of FICO Credit Scores on Wealth Creation – We all know that a good credit score can result in a better interest rate on loans but you may be surprised to learn that a bad credit score can affect you in ways you might not have thought about. In addition to paying higher interest rates, a poor credit score can result in higher insurance premiums, denial for employment, or having to pay a security deposit when leasing an apartment or opening a utility account.

Kay Lynn @ Bucksome Boomer writes Lessons I Hope to Teach My Son – My son is only seven, but I hope to teach him quite a bit about finances, specifically, those things I never learned.

Steve @ Brip Blap writes Stability and Desperation – Many of the employees around me are in total terror of a single week without a paycheck. Their expenses continue without pause and their income stops at the drop of a hat. What all of these people fail to realize is that the instability they feel in uncertain times like these arises from their own lifestyle, and not from the government or the corporations or “the economy.”

Penny Thots @ Penny Thots writes How to Get the Most from the Credit Card You Already Have – Credit cards fuel the idea that there is money for nothing, but many consumers don’t realize the price that they have to pay for maintaining a credit card. Paying in cash for those desired items is always the best route, but if you already have a credit card… you should make the most of it.

Robert @ My Multiple Incomes writes The Ultimate Guide to Shopping for a Home Loan – Over the course of the last two weeks, I’ve gotten a crash course in shopping for a home loan, and I want to share with you what I’ve learned so that you can make an informed decision when you go to buy a home. So, here is my ultimate guide to shopping for a home loan.

Robert @ The College Investor writes Ask the Reader: What Is Your Favorite Purchase? – My favorite purchase of all time has been my car. I love this car because I negotiated so hard to get it. I had my eye on a new car that was on the car lot, and it was December. I knew that car dealers tried to sell out old model years before the end of the year, so I tried to use that to my advantage. The car was listed for $33,500, which, to me, was over priced. I did my homework, and I knew where I wanted to be and what was fair, which was right around $28,000.

Michelle @ Making Sense of Cents writes Buying Too Much House – Micro homes and smaller living areas are an interesting concept. Many people do it for lots of different reasons. The reasons could be to save money for your future house, be more eco-friendly, not needing a large space, and being more efficient with what you have already.

Echo @ Boomer & Echo writes Our Fast Track To Financial Freedom – After all our bills are paid, we have an extra $2,000 per month to work with. So we came up with a fast track to financial freedom. Here’s our 40/40/10/10 savings solution:

Glen Craig @ Free From Broke writes How Will Your Student Loans Affect Your Credit Score? – Many don’t think about the long-term affects of student debt when they go to school, especially not how it affects their credit score.

Sicorra @ Tackling Our Debt writes Let’s Talk Money – The Series – With Erika at From Shopping to Saving – Check out this week’s Let’s Talk Money interview with Erika from the very popular blog known as From Shopping to Saving.

Ken Faulkenberry @ AAAMP Blog writes Is a Strategic Asset Allocation a Failed Model? – An analysis of the advantages and disadvantages of a strategic asset allocation model should make most investors reconsider how they allocate their portfolio.

Kraig @ Young, Cheap Living writes How to Handle Life When it Attempts to Drive You Nuts – I’ve been through more than my fair share of drama and hard times in my short life so far. On the positive side, I’ve learned a lot. It has also motivated me to not let it or any future road blocks stop me from pressing forward with hope and inspiration.

J.P. @ Novel Investor writes Bond Basics: Bond Price And Yield Relationship – One of the more confusing aspects of bond investing is the relationship of bond price and yield. In a time where interest rates are at all time lows, understanding the bond price and yield relationship is important.

Thanks for a great carnival!

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Entrepreneur Fridays: Mckys Bstro

LaTisha Styles — Fri, 04 May 2012 10:00:40 +0000

Welcome back to Entrepreneur Fridays! I’m very excited about this week’s interview with the creators of Mckys Bistro, a fresh clothing line from very talented young adults.

With a combination of youth, freedom, and a pinch of style, comes something amazing. Having a complex mindset and an eye for art, Mickey’s Bistro was created. The minds of the individuals who are responsible for this creation are very different, yet so similar in taste. “Mickey’s Bistro” comes from having the mind of a young creative character and having that different taste for style and fashion.

Check out the interview here.

See more interviews with young entrepreneurs right here on Financial Success for Young Adults!

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Sell in May, Go Away?

LaTisha Styles — Mon, 30 Apr 2012 14:00:00 +0000

You may be asking yourself, “Where is the stock market heading?” Especially now that the market has rebounded from its lows in 2008 and has been rising ever since. Some people will tell you that it is impossible to time the markets, but I disagree. There are some very interesting market phenomena that occur at various times in the year. I call them my stock market indicators and seasonal trends. If you decide to buy and sell at these times you will generally be taking that action with numerous other investors who are doing the same thing. And if you are a smart trend trader then you know that you shouldn’t try to swim against the tide. It’s better to go with the flow. Here are some seasonal trends that I have seen to hold up time and time again.

Sell in May, Go Away

What Happens?
The stock market generally sees declines in the time period between May and October.

What Causes it?
The stock market crashes of 1929, 1987 and 2008 occurred between May and October.
The months between the U.S. Memorial Day holiday in May and Labor Day at the beginning of September, are typically seen as vacation time and there is generally less market activity between these dates. An article by the Huffington Post details more about this seasonal market trend.

How Can I Profit?
If you are not interested in selling and getting hit with capital gains taxes, you can go with an ETF that profits from short positions. The Motley Fool suggested the UltraShort QQQ ETF which is based on the Nasdaq or the ProShares Short Dow 30 to make money when the markets fall.

The Santa Clause Rally

What Happens?
The stock market generally sees a rally in the final weeks of December.

What Causes it?
This stock market trend is primarily caused by fund managers and investors trading for beneficial tax purposes. Some claim that it is because of a general optimism that occurs at the end of the year and investors spending their Christmas bonuses on stocks. There is a lot of activity in the market. It could also be a precursor to the January Effect. Investors want to take advantage of this market seasonality and so they will buy in December instead of waiting for January, especially since purchases in a tax-deferred account can reduce their overall tax liability. Fund managers have the incentive to cover shorts, or buy back shares that they previously sold, if they experienced losses.

How Can I Profit?
Buy additional shares of stocks that are already in your portfolio or that you have been following and researching in the beginning of December.

The January Effect

What Happens?
The stock market generally sees a rally in the first weeks of January.

What Causes it?
New Year’s resolutions, fund managers shopping spree. Individual investors churning. There is also a general optimism in the air at the start of the new year. The January Effect has not been as prominent in recent years. This is primarily because the markets have already adjusted for the anticipated increase back in December.

How Can I Profit?
Hold on to the purchases you made in January and sell anything you wanted to get rid of while the price is high.

See more seasonal stock market trends at Investopedia. Does your investment strategy include timing the markets? Or do you think that it is a futile task?

Disclaimer: I do not hold positions in any of the afore-mentioned ETFs.

Photo Credits: http://www.marketoracle.co.uk/Article4577.html

Hy Rosen Cartoon: http://library.thinkquest.org/J001570/hyroseninterview.html

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The Power of Compound Interest

LaTisha Styles — Fri, 27 Apr 2012 14:00:06 +0000

What is Compound Interest?

Compound interest is often termed as the ninth wonder of the world. It’s said that Einstein made that statement because of the sheer power of compound interest. If you paid attention in science class you remember the word exponential linked to bacterial growth. Compound interest works the same way.

The Difference Between Simple Interest and Compound Interest

Simple interest is pretty easy to understand. A 10% return on 100 dollars is 10 dollars. This means that if you deposit one hundred dollars in the bank at a ten percent simple rate of interest, your money will earn ten dollars. However compound interest is different.

How Does Interest Compound?

Interest compounds when interest is paid on interest. If a bank offers a 10% rate of interest that compounds annually, they are committing to pay 10% on your principal, or the initial deposit, each year. If you leave the interest paid in the account, the bank will pay 10% on the new principal and so now interest is being paid on interest paid. On the borrowing side, it is the reason the balance on your credit cards goes up so fast. If you don’t pay it off every month you will be paying interest on interest.

How to Calculate Compounding Interest

Compound interest is pretty easy to calculate once you understand the idea. The interest rate will be multiplied by itself over and over again for the number of years or periods you choose. To multiply the interest by itself you will just take the interest rate plus one then raise it to the exponent number of years/periods. Then you will take that number and multiply it by the initial deposit amount.

Calculation: Initial Deposit X 1+rate ^ #periods

Compounding Interest Calculator

Money Chimp has a really nice compound interest calculator that you can use to figure how much your principal will grow based on a certain interest rate.

The Best Thing About Compounding Interest

Compounding interest is the most exciting for me is that when used in a Roth IRA, I get to keep all of the interest tax free! And that’s how you retire with tax free money.

Photo Credits: http://eliminatethemuda.com/2009/11/compound-interest-friend-or-foe-part-i/

http://skwerk.com.au/p-c_s-12_u-85_t-161_c-518/compound-interest-as-formula/nsw/compound-interest-as-formula/consumer-arithmetic/compound-interest

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5 Acronyms Every Investor Should Know

LaTisha Styles — Wed, 25 Apr 2012 14:00:00 +0000

Ever wonder what all those abbreviations mean? Well here is a list of some investing acronyms to look out for.

ETF
Exchange Traded Fund
This is a security that attempts to mimic an index or a basket of stocks. The ETF will trade like a stock on an exchange with prices changing throughout the day. Double check with your broker about margin requirements for ETFs.

TARP
Troubled Asset Relief Program
A government program that was created for the establishment and management of a Treasury fund, in an attempt to curb the ongoing financial crisis of 2007-2008.

The TARP gives the U.S. Treasury purchasing power of $700 billion to buy up mortgage backed securities (MBS) from institutions across the country, in an attempt to create liquidity and un-seize the money markets.

FIFO
First-In First-Out
This is a tax strategy and accounting method for individual investors to report to the IRS the gains and losses made in their portfolio by assuming that the first equities in were the first to be sold. It also applies to a business‘ accounting strategy for inventory as well as being a rule for proper food handling.

LIFO
Last-In First-Out
This is also a tax strategy and accounting method for individual investors to report to the IRS the gains and losses made in their portfolio by assuming that the last equities in were the first to be sold. It applies to a business’ accounting strategy for inventory as well.

DRIP
Dividend Reinvestment Plan
This is a plan offered by a corporation that allows investors to reinvest the dividends as fractional shares. So instead of receiving a cash dividend you would instead get a partial share and your account would grow that much faster. For example, you could continually invest in a company that sells a home security system in Canada and profit from gains and dividends.

Did I miss one?

Photo Credits: http://softwareselection.technologyevaluation.com/DOC-Glossary-Of-Terms/Acronym-Introduction.html