Wealth Bowl

The new bill’s supposed to stimulate the economy. The question is, who’s economy is being stimulated? Money being raised to support the bill comes from selling Treasury Bills. They are traditionally sold to countries that we owe to. In this case, it was China who bought the T-Bills. So the money starts from China, comes over to US, filters through the government and eventually you’ll get a check around June for $600. The government wants you to spend the money (instead of saving it). The problem is, our market’s saturated with products made in China. So who’s economy are we stimulating here?!

Dr J

Popularity: 44% [?]

BFFP broke down what it takes to earn a 2008 Tax Rebate Stimulus Package:

Singles

Determine Eligibility:
If you earned less than $3,000 - unfortunately you’d get nothing.
If you earned more than $3,000 but paid no taxes, you’d get $300.
If you earned more than $3,000 and paid taxes, you get $600.
If you have children, add $300 per.
Determine Phaseout Reduction:
The phaseout levels begin at $75k and end at $87k, at a reduction of 5% per $1,000 over the lower limit. If you earn above $87k, you’re over and thus get nothing regardless of the math.

Couples

Determine Eligibility (appears to be the same as singles):
If you earned less than $3,000 - unfortunately you’d get nothing.
If you earned more than $3,000 but paid no taxes, you’d get $600.
If you earned more than $3,000 and paid taxes, you get $1,200.
If you have children, add $300 per.
Determine Phaseout Reduction:
The phaseout levels begin at $150k and end at $174, at a reduction of 5% per $1,000 over the lower limit. If you earned above $174k, you’re over and thus get nothing regardless of the math.

Dr J

Popularity: 45% [?]

UBS is taking $14 Billion off it’s 4th-quarter balance sheets. Ouch!

Dr J

Popularity: 45% [?]

Did you know that in some languages and cultures, there’s no direct translation for the word “manager”? Instead, the best translation is “leader”, or “decision maker”. But nothing like USA’s definition. In fact, in some cultures, it’s illegal to manage! Can you believe that? It’s because managing implies superiority and inferiority. And obviously, we’re always striving for equality.

There’s 2 things to remember about being a manger. First, decisions need to be decided as a group, as in democracy. Let everybody participate in deciding what to do. That way, everybody can understand their role better, and they’ll be more willing to participate. Second, decisions must be executed with 1 person in charge. A totalitarian style of rule is necessary.

It’s very interesting to note that USA uses democracy, and we do a great job making decisions. However, the execution of those decisions is horrible!!! Please keep this in mind when voting… Vote for someone who not only chooses the right things to support, but also get around to doing them!

Dr J

Popularity: 48% [?]

Thanksgiving, Christmas, and New Years are among the busiest travel days in the year. Those same days are the best times to strike travel bargains. Jim over at Blueprint for Financial Prosperity suggests Kayak. Kayak is a travel search engine that scours the web for prices on plane tickets, hotels, cruises, and car rentals, among other things. Armed with knowledge of prices, you’ll be able to find one that fits your taste (3 stars or 4?), budget (dirt-cheap, connecting, economy class, or first class direct flight?), and time (red-eye or prime-time?)

My good friend was concerned about finding a place for his friend to stay for New Years Eve, so I plugged in his local zip code and date. Kayak easily pulled up their best rates, plus rates from 4 other websites (hotels.com, Expedia, Hotwire, and Priceline). I quickly sorted by price and found a 2-star hotel for $45. Great!

Enjoy the deals you’ll find. Travel safely, party responsibly, and see you in 2008!

Dr J

Popularity: 100% [?]

One advice that I always give to young persons is to invest early. The reason can be explained with the concept of Compounding Interest. It’s so effective, that Albert Einstein was rumored to have said, “The most powerful force in the universe is compound interest.” However, this concept can also be a beast, as Johnny Carson quipped, “Scientists have developed a powerful new weapon that destroys people but leaves buildings standing — It’s called the 17% interest rate.”

How does compounding interest work? Simply put, you have an original amount of money called “principle”. Interest is the charge to use the original amount. To compound means, during the next cycle, the interest is added into the principle. During the 2nd cycle, interest is charged not only to the original principle, but also the interested earned in the last cycle.

Now say you want to retire at age 65 with $1,000,000, yet you only have $1,000 to invest. If you’re 64 years old today with $1,000, you got some crazy investing to get to, in order to have $1,000,000 in a year. Yet, if you were 10 years old, and your family or friends accumulate $1,000 for you, it’s much more likely and easier to turn that into $1,000,000 in 5o years. take a look at the table below to see the Rate of Return needed to accumulate $1,000,000.

This is your call to action: Start investing immediately! Not only that, “front load” your investing by putting in as much as you can, so you can start with a larger principle for the compounding interest to work on. I know that some of you are worried about needing an emergency fund. I think the main concern is having liquid investment, so you can take the money out anytime. There are methods to achieve this, yet still turn a great return. Send me an email and I’ll explain it to you.

Have a great Holiday Season!

Dr J

Popularity: 88% [?]

How successful are you at picking stocks? I know a blogger who makes a living day-trading penny stocks. He’s great at anticipating news. He was so successful he took a year off to work on personal growth. That’s so great!

I pick stocks for my options trading. There’s about 27 stocks that I watch, and I’m looking for a specific pattern that arises about once a month. My style is technical analysis. That means I mainly look at charts. I know someone who’s a great fundamentalist, which means he looks at “news”, such as new product, change of management, earnings, etc. Besides reading the candlesticks and looking for patterns, I also use 50 and 200 day exponential moving averages, volume, full stochastic (fast and slow), and MACD Hist. These are all beginner tools, but so far I’ve had a very high success rate trading options.

When I’m lazy, I hop onto GStock.com to look at their recommended buy/sell analysis.

GStock is a Virtual Supercomputer formed by many computers calculating a huge amount of investment strategies with one goal - To give you timely BUY & SELL stock picks that make money.

They claim a 66% accuracy. Interestingly, the strategy I use for options trading is 66% successful too. Today, GStock suggested buying Amazon (AMZN) in the next couple days. After doing my technical analysis, I don’t think it’s a smart buy. Right now, I don’t have any favorite picks, So I’m just waiting patiently for my opportunity.

I’m sleepy right now, I’ll write a more complete post in the future.

Popularity: 69% [?]

When you have multiple credit cards, I’m sure you want to pay them off in the best way possible. Here’s how I do it.

I ran into problems towards the end of grad school. I wasn’t budgeting correctly and spent my money in the wrong places. What I really needed to do was use my money to pay for licensing exams and fees. Plus I should have allocated funds to live on while starting my new career. And nobody could have predicted my transmission shattering to pieces 300 miles from home. I had about $3,000 in credit card debt that started about a year ago. Realizing the need for more education, I spent another $8,000 on classes and seminars. Since I’ve always paid my cards in full, I was able to get 0% interest on purchases and balance transfers, and applied for 2 more cards with similar terms. At least I wasn’t paying too much interest. However, the party had to end and now the introductory offers have expired.

Snowball Debt Calculator uses a very simple formula: decide on how much money to allocate towards paying bills, and pay off the smallest balance first. It’s a psychological trick of accomplishing a lot of little goals, paying the small balances first. Hence, the snowball effect. That’s great, but what if the largest balance has the worst interest rate?!

So what I did was call all my credit cards and had them all end the monthly statements on the 1st of the month. At first I was scared cuz I’d be paying out a lot at a time, and I was afraid I wouldn’t have the funds to pay all the bills at the same time. All the statements arrive within a few days, and I order them according to the interest paid; not the balance nor interest rate. I budget $1000 each month to pay these cards, paying 2% on every card and throwing the rest into the one with the highest interest fee. All the cards should be paid off by March 2009. When I make purchases now, I either use my 0% purchases card for large purchases, or bank debit/credit for small stuff like food and toiletries.

I encourage you to try this calculator out, and get an idea of how you’ll pay off your cards. To find out your minimum payment for a card, take the total balance divided by minimum payment. It should be between .02 to .03 (2-3%). Good luck!

Dr J

Popularity: 72% [?]

Most people know that 401(k) is a great investing program if your employer offers some type of matching program, where every dollar you put in, the employer will “match” and contribute another dollar. As you can see, you can quickly double the amount of money put into this savings program. Government Accountability Office (GAO) states that there is more than $2 trillion invested by US workers in 401(k) plans. The median average account has only $22,800 balance. Workers aged 55 - 64 have $50,000, and those 60-64 have $60,600.

When you think about it, $60,600 isn’t very much to live on. Assuming a generous 12% interest from the stock market, that’s $7,272 to live on every year. There’s not many places in America where that kind of money affords a comfortable living. And be honest, when you think retirement, don’t you think about doing the things you want, when you want, with whoever you want, as long as it’s moral, ethical, and legal? Well, $7,272 probably won’t allow you to do that to the extent you want.

There’s couple things I want you to be aware of. First, is that you need to start saving as soon as possible. In a later post, I will talk about the power of compounding interest in relation to time. 2nd, you need to understand the fees, risks, and returns associated with 401(k) and/or other retirement/savings plans. 3rd, please investigate other methods of saving. The GAO found that 36% of workers participate in 401(k). Well, I’m sure that a portion of the other 64% use other retirement vehicles.

Dr J

Popularity: 95% [?]

Welcome to my blog. In the next few days I will be solidifying my mission statement and goals. I trust that my readership will hold me to them, so I may provide the best value. If there are topics you want more information on, just let me know.

To get things started, I want to review the documentary Maxed Out: Hard Times, Easy Credit,  and the Era of Predatory Lenders (2006) by James D. Scurlock. As the title states, it documents the abusive practices by credit card companies and banks. The argument presents that banks and credit issuers target a market where they know the consumer will have difficulty making payments. Once the consumer misses a payment, their consequence from the creditor is unduly harsh, to the point where some consumers resort to unconventional methods to escape their spiraling situation.

I wish that middle and high schools still had reasonable “Home Economics” classes, where this documentary will be highly effective in making a social change. As soon as young adults can legally own their own credit card, the credit industry hounds them without informing them of the responsibilities needed. I love Stan Lee’s quote from Spiderman movie: “With great power there must also come — great responsibility.” The power one wields is incredible: this year I discovered you can purchase homes with a credit card! In fact, I almost did that.

Click the image for the trailer:

Dr J

Popularity: 61% [?]