September 17, 2007

No Posts This Week

Sorry everyone, I’ll be in training and away for the week. I’ll try to post something over the weekend or on Monday.

Maybe this will teach me to make a backlog of stories!.

September 14, 2007

Countrywide Workers Sue over Company Retirement Plan Losses

images.jpgEmployees of Countrywide Mortgage are suing the company because of significant losses incurred due to the company’s financial troubles, and the fact that news of those financial troubles were kept from employees investing in company stock through their retirement accounts. The lawsuit cites that investors have lost a significant amount of the value of their retirement savings because Countrywide officials either inadvertently or intentionally did not warn investors of the company’s financial difficulties.

As sad as this is for the employees, this is the exact reason that people shouldn’t invest a majority of their retirement funds in any one company or stock. Enron is the leading example of a retirement investing “don’t” and it’s shaping up like Countrywide could be another. Investing in your own company is attractive, and the company makes it doubly so by stock purchase plans, easy payroll deductions, and an on-going low-level propaganda campaign touting how good the company is. Too many people sink entire life savings into company stock, only to find that the company suddenly loses value.

Investing should take risk into account as well as returns. Riskier investments have higher returns, but can also have higher losses. For retirement accounts, risk should be a factor in how investments are chosen.

  • 20’s and 30’s - People are early in their careers, making less than they will make later on, but are in a perfect position to put away money that will be the lion’s share of their ending retirement funds. This age group can max out the IRA’s, 401k’s, 403b’s etc, and take some more risk than their older compatriots. Losses here can be recovered in later years.

  • 40’s - People are in mid-late career and are generally earning the most they will in their lives by this time. Prudent investors scale back on the risk by re-balancing their accounts and moving some of their money to less risky investments. Don’t move too much, as there’s still a significant amount of time until retirement and you want your money to still work hard for you, but losses at this point will be harder to make up later.

  • 50’s and 60’s - People in this range are looking more toward retirement and activities post-work. Gradually move funds from risky investments to less risky or non-risky investments.

  • Retirement Years - At this point, risk is virtually intolerable. There is no time to recover from losses, and you are using current funds for living. All investments should be in as stable and risk adverse investments as possible.

Putting all your eggs in one basket by buying only company stock is very risky. Tempering your judgment on retirement funds by spreading the risk can lead to a much more comfortable life later on.

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September 12, 2007

New Garage Doors

garage.jpgI’m going through the ordeal of replacing my 10 year old garage doors. Mainly because they’re about to fall off, but additionally to hopefully save some money on electric bills.

My original doors are the heavy, wooden, run-of-the-mill contractor special doors. They’ve lasted quite a while, but are starting to show their age. Also, I accidentally backed into one of them and cracked the lower section, (which I then repaired with a bracket and screws). It’s a scary thing to see parts of the door reaching towards the ground before other parts. I opted for new doors with a 6.5 R-value insulation. Not the highest, but should show some savings on the electric bill.

It’s amazing, at least to me, the changes in building products in the last 10 years. These doors are only 1 3-8ths inch thick, steel on both sides, and MUCH lighter than the panels they’re replacing. They also have a much higher insulation rating and look great.

I figure that if I keep working on improving the house with little energy-saving features, I could save an additional 5-10% per year. Look for an upcoming winterizing post!.

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September 11, 2007

A Moment of Silence


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911.jpg Sun-Through-WTC.jpg

We will never forget.

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September 10, 2007

Countrywide Lays Off Up To 12,000 Employees

30846_bull_market.jpgCountrywide announced Friday, after hours, that they would be laying off between 10,000 and 12,000 employees over the next few months. This adds up to approximately 20% of their workforce. Countrywide management apparently is expecting things to get worse before it gets better, even after the combined 13.5 Billion dollars invested into the company (11.5 Billion credit line, and ~2 Billion investment by Bank of America).

What with the doom-and-gloom forecasting going on throughout the media, it doesn’t look too promising for the short term. The unexpected report of the 4000 non-farm payroll positions also continued to emphasize the downward spiral that the ‘experts’ see us entering. Even the word ‘Recession” has been bantered around on some of the more popular news outlets.

What does this mean for the middle class person, just getting by??

Continue Reading,…

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