Tag Archives: Personal Finance

Online Stock Tips? Buyer Beware.

There was an article in the Wall Street Journal on February 4, 2009  about new social networking services that allow users to share investing and trading tips. It is a great way for like minded people to build a community and share ideas. In many ways the idea is not new – we have seen chat rooms, message boards, and the like before. However, these sites operate more like Twitter where messages are limited or truncated to a preset number of characters and people only build ‘followings’ only if they have something of value to say. The idea definitely is progressive and timely as many people are seeking ways to build or rebuild wealth in a deepening recession.

But buyer beware! There are a few things to keep in mind or questions you ask yourself before you throw your money into any investment based on the advice of someone – especially someone you don’t know.

No one knows where this market is headed – let alone any individual stock. The current financial crisis is evidence that not even the pros on Wall Street have a handle on the markets. This could be one of the riskiest times to put your money into the unknown.

Speaking of unknowns, who is providing the information on the stock? What is the track record of this individual? I always seek advice from someone who has been successful in whatever subject they are discussing (not just money). So, if the person dishing out the information retired from an investing career, it might be worth considering. Otherwise, be careful.

Be realistic. We have seen with the Maddoff scandal – and countless other examples – that if it seems too good to be true it probably is. Yes, we have heard this before, but the tough economic times are giving life to more scams and con artists than ever before.

Is the timing right for you? Given how hard the markets and our portfolios have been hit, is now the time to put your hard earned money into ’stock tips’?  We all are eager to make up for our losses, but there is (still) no quick fix. Building wealth is a lifetime endeavor. Don’t get yourself into deeper financial straits by trying to make up for the market meltdown. We all are hurting.

Final thought. Personally, I would rather see my financial or investment adviser tracking and researching the markets. I worry that someone who is texting stock tips or using social networking services may not be focused on the right activities. Markets move rapidly. Information changes even faster. I need and want an informed adviser – not a good sales person.

Copyright FELA, Inc. 2009
Ms. Career Girl, a Financial Education & Literacy Advisers company
www.themindsetforwealth.com

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Checking in on Your 2009 Goals and $10 a Day

So it’s already February, and I have to ask:  how are those New Years’ Resolutions and 2009 goals going?  Most people fall off the wagon 6 weeks into the New Year.  Don’t let it be you!

 

Most of us (me included) set goals to get financially AND physically fit this year.  It’s not as easy as it seems, is it?!  Well, I’m here to be the annoying person who gives you your February “Reality Check” to help you stay on track. 

 

I was scanning my book shelf the other day to gather ideas for this post and came across Jean Chatzky’s book, “Pay it Down,” which I purchased at the peak of my over-spending days.  The book is based around the idea that you can get out of debt on $10 a day. 

 

I’m a huge believer that debt and overspending can be traced back to psychological factors and/or personal insecurities.  So before we get to the part where we find that $10 per day, I must ask: How did you get into debt in the first place?

 

For many women, the reason is simple: we needed to fill the gap of what we make and what we need to live.  For many others, we had inadequate savings to bail us out of an emergency.  Lastly, many women have a spending problem.  Although society constantly makes jokes out of shopping too much, i.e. the new movie “Confessions of a Shopaholic,” it is a serious problem for many.  Retail Therapy is a topic that deserves its own post, but in the meantime consider if you may be guilty of this “disease.”  Regardless of your reason, identify it so you can stop history from repeating itself in your life!

 

Did you follow my advice and get out ALL of those icky credit card statements at the end of 2008?  What did you see?  If you haven’t done this yet, you need to.  You should know exactly how much debt you have, and how much debt you’d like to end 2009 with.  Yes, a number is required here.  You aren’t allowed to say “I want to have less debt and more savings” because that is not a clear goal that you can work towards. 

 

Back to finding an extra $10 a day.  The obvious answer is to cut lattes and going out to lunch but for many American’s, this isn’t the answer.  We like to get out of the office and we have a Starbucks addiction, fair enough.  $10 a day is about $300 per month.  I took inventory of my own spending habits and wanted to share ways that I found an extra $300 per month to put towards debt or savings:

 

  • Going out.  My biggest spending weakness.  I’m not at ALL saying don’t go out.  Live it up, have fun but just keep an eye on it and maybe limit the # of nights you go to the bars if it’s cutting into your pay check too much.
  • Books.  I can’t stop buying books on amazon.com!  I suppose this is a healthy way to spend money, but I’ll admit sometimes I buy more books before I’ve even started reading books from my last order.  Perhaps I should consider going to the library for FREE…
  • Gym Membership.  Jean Chatzky says that if you use your gym 0-1 times per week, then it may be time to cancel it because you are wasting money.  This is a matter of personal values and choice.  For me, I can’t imagine life without my gym, but if you aren’t using yours consider cutting it.
  • Travel.  Don’t go unless you can pay for your ticket in full.
  • Hair.  Platinum blonde is super expensive.
  • Manicures/Pedicures.  Do you really need them every week?

 

You get my drift.  In order to reach goals, you will need to identify your weaknesses and hang up’s.  I don’t want you to start living like a pauper who wears ugly clothes, has roots and never goes out-gross!  I don’t think that is realistic.  Find out what you value, and maybe have less of it.  If you really can’t part with being blonde, for example, find a way to spend less on being blonde, or better yet find a way to make more money (yes, part time jobs are GREAT!) so that trips to the salon are no longer a burden you need to charge on your credit card.

 

I’d love to hear more of your ideas on how you can save $10 a day (or $300 per month) because I know there must be a thousand ways to do it.  I could use the advice just as much as any other girl could.  Please share your thoughts!

 

26 Reasons I think America is Great, Weird and Contradictory.

America is an interesting place. In the handful of times I’ve left the country, I’m always so happy to be home and so proud to be an American. Yet at the same time I also observe how odd our culture is.  Here are 26 things I find interesting about America.

1. We have access to some of the best health care in the world yet have a huge obesity rate.
2. Most Americans feel like their pay checks just aren’t enough, yet we are one of the wealthiest countries in the world.
3. We order Diet Cokes with Big Mac’s.
4. The average American watches about 4 hours and 35 minutes of television per day according to Nielsen Media Research.

5. Dunkin Donuts-I love it and can’t imagine life without it.
6. People can drive Escalades but can’t pay a medical bill without charging it to their credit card.
7. We love Italian food that isn’t necessarily authentic Italian, and Mexican food that isn’t necessarily authentic Mexican.
8. Going on spring break each year of college is normal and expected. (I’ve never understood where the money to fund these vacations comes from?)

 
9. Strip malls and franchises are overrunning our land.
10. Debt is socially accepted as “part of American life.”
11. Disney World is a huge craze, yet when’s the last time anyone has seen Mickey Mouse in a movie or show?
12. Most people know exactly who Paris Hilton is, but don’t know who represents their local and national government.

 
13. Many young Americans consider success getting on a reality show and having their “big break.”
14. CostCo, Wal-Mart and Sam’s Club.
15. Generally speaking, America loves quantity not quality when it comes to clothes and shoes.
16. If your kid acts like a normal kid, he will probably be diagnosed with ADHD and put on Ritalin.

 
17. Professional Sports games were created for the average American family, yet most Americans can no longer afford to attend games.
18. 10 year olds have iphones.
19. America is obsessed with celebrities. Perhaps this is why people overspend: are we trying to live the lives of the rich and famous on a dime?
20. High School in America: homecoming, text messaging, MTV, football games, prom and drama.

 
21. Physical appearance is a top priority and plastic surgery is becoming the norm. No wonder the diet pill industry is a multi- billion dollar industry.
22. We have a show called “My Big Red Neck Wedding” now?? hmmm…
23. We are obsessed with money and material things and therefore have a love hate relationship with money.
24. Some Americans attempt to find their soul mates on TV shows like The Bachelor. (Guilty pleasure but odd reality.)
25. It’s cool to be unique in America- whether that is your ethnicity, personality, outward appearance or talents/passions.
26. And of course, I can’t leave out American Idol!

Tales of “Woe” from Girls Who Date Bankers

My sister sent me a link to a New York Times article which I found as oddly addicting and bizarre as an issue of US Weekly. The article is called, “It’s The Economy, Girlfriend.”
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The article highlights a group of twentysomething aged women in New York City who started a support group called “Dating a Banker Anonymous” and a blog. The women who started DABA noticed their romantic relationships with investment bankers and traders tanked with the economy. The women said that as the economy went down, the stock market shed points, and jobs were being cut on Wall Street their sex lives, gifts and date nights were cut as well.

Their blog is totally funny and addicting. Women write in to tell their dating stories and misfortunes of having their trips to foreign countries cut, their bottle service being eliminated and how sad it is that someone would want to move to the Midwest for a more affordable lifestyle. There is even a story that mirrors a segment that aired on Good Morning America yesterday which tells the story of a 24 year old girl who is dating a married millionaire who enjoys trips and designer gifts from her “sugar daddy.” When he is faced with having to eliminate 20 people at work, all of which have children to support, she whines that he isn’t getting her enough stuff anymore.

Although the stories are fun to read, they definitely make me question what was significant enough about these stories of “misfortune” and high expectations to make the New York Times?  While most of America is losing their job, their home and their retirement accounts, the New York Times is highlighting a tiny group of twentysomething ladies who are no longer receiving Louis Vuitton bags, bottle service, Manolo Blahniks and trips to Italy from their boyfriends. Seems out of balance. Apparently the public is ready for an escape from reality though, which might explain why these girls already got a book deal.

The concept that the DABA girls created is absolutely entertaining. Unfortunately, I don’t think it promotes financially savvy and independent women. Then again, the girls’ experiences of dating rich men was enough to get them a book deal and perhaps they can start buying their own Louis Vuittons now!

Surviving Adult Children

I came across an interesting press release about a new website for parents who are dealing with immature adult children, called SurvivingAdultChildren.com. It sounds funny that there is now a support group for parents whose adult children still live at home with them, but as we’ve heard it is more and more common for Gen Y’ers to come back home and sometimes never leave. This is an interesting debate for me, because it is one I can see both sides of.

3020643003_76909156d1_mTo illustrate the website’s purpose, there was a video that shows a mother vacuuming, and then her 26 year-old son comes out at noon and basically says “I’m still sleeping Mom! Can you stop that!? Oh and can you help me with my car payment and cell phone bill this month too?”  Eek!!

Now that I do NOT understand! But the point is that there is enough of this happening in America for there to be a whole community created around it. According to the website, adult children who are living at home are causing a serious financial strain on their parents. It also says that some parents are afraid to let go out of “fear of rejection, losing contact with grand children and even physical abuse.” Seems a bit strange, no?

So my boyfriend and I got into this debate yesterday as we both have friends and relatives who still live with their parents. Luckily none of our friends or family are like the 26 year old in the video though! Both of us also lived at home for a while after graduating college and felt it was beneficial to get us started.

Here are a few of my thoughts on the topic:

• If you’re living at home so you can buy more purses, shoes and clothes that is not cool.
• If you’re living at home to save for a down payment on a condo/house, that is awesome! Just make sure you are really saving that money instead of taking your third trip to Vegas this year.

• If you are unsure about your career path or how long you will be at your current job, it might be smart to live at home so you aren’t locked into a lease.  Just remember that eventually you will have to take a risk and decide on something!
• If you live at home, you should pay “rent and utilities” to a money market account so that you become used to the financial burden and budget that living on your own will require when you DO move out. I would prefer if you couldn’t touch or see this money market account so you can’t tap into it. Remember, when you move out, you can’t “borrow back” your rent/mortgage payment.
• Make sure you are working towards an established goal otherwise before you know it the months and maybe even years will pass you by and you will have nothing to show for living rent-free.
• If you are living at home to pay down debt, put your debt payments on auto-debit from your checking account so that each month a pre-determined chunk of your income goes towards those. Don’t wait for the bill to come and “decide how much you feel like paying this month” otherwise you will never get rid of it.

Beware of the Newest Credit Card Game

ABC’s Good Morning America aired an interesting segment today about credit card companies that are looking at the places people shop to determine credibility.  So for example, if the credit card company’s data shows that a high percentage of people who shop at XYZ Store don’t pay their bills on time, some companies are using this as a reason to significantly cut customer’s credit limits without warning. 

The subject of the segment was a man named Kevin Johnson, a 29 year old who owns a PR Firm in Atlanta and has stellar credit (a 764 FICO score).  He had been a loyal American Express user when he received a letter saying his credit limit was lowered from $10,800 to $3,800.  Ken says he rarely kept any balances on his credit cards and has always paid on time.

This new twist is called “behavioral analysis” or “behavioral scoring” and it seems quite unfair.  Apparently this is just another way for credit card companies to assess their risk during the recession.  It’s a bit strange to me, especially for those who are trying to save money by shopping at a discount store or for those who have always been loyal paying customers. 

The other weird part of the story is that American Express received more than $3 billion in taxpayer money from the “Troubled Assets Relief Program,” yet they are choosing to cut off great customers like Kevin Johnson.  It is the Kevin Johnsons of the world who are paying the taxes to fund thse bailout programs…

I guess the moral of the story is that in a battle between a single consumer and a huge credit card company, the credit card company is going to win.  During times like these, we as consumers need to remember that we can’t count on using our credit card company’s money to get by.  They have the right to revoke our privileges at any time.

Read the whole story here for more details.

Nicole’s Review of Suze Orman’s “Women and Money”

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As featured on justthrive.com!

Only Suze Orman could talk about two topics as sensitive as Women and Money so honestly and accurately. In her eighth book, Women and Money, Suze uncovers the mysterious stumbling blocks that so many women face when it comes to their finances, “It doesn’t matter if I am in a room full of business executives or stay-at-home moms, I find the core problem to be universal: When it comes to making decisions with money, you refuse to own your power, to act in your best interest.”

Women are typically the givers of the world: they are always putting others before themselves, nurturing their families, and sacrificing for others. Suze is NOT suggesting women replace “nurturer with narcissist.” She says, “I simply want you to give TO yourself as much as you give OF yourself. By taking care of yourself financially, you will truly be able to take care of those you love.” She asks why women don’t show their money the same attention they show every other relationship in their lives and claims it is because women have a dysfunctional relationship with money.

It is this dysfunctional relationship that has intrigued me personally to start a business to help educate women about their finances. My belief is that it is not intelligence or information that women lack, it is a mental “block” that is holding women back. Suze points out that so many women feel they must be all things to all people, “mother, wife, dutiful daughter, supportive friend, school volunteer, cheerleader at home and at work.” With the demands of life, it’s easy to keep denying the importance of learning new things that may be uncomfortable or hard to face. It is much easier to deny that money exists, say you are just “too busy” or blame others for your financial shortcomings.

My favorite chapter of Women and Money is called “The 8 Qualities of a Wealthy Woman.” I like it because it sheds light on what many women are not doing and clarifies how changing our thoughts and behaviors will improve our relationship with money.

For example, numbers 1 and 2 are harmony and balance. When you are in harmony, what you think, say and do are aligned. How many women do you know who say, “Oh I’m fine!” or “Ok daughter, you can have that new ___” even when they don’t feel that way or can’t afford it. That leads us to quality 3: courage. Courage gives you the ability to make sure your thoughts, feelings, and actions are aligned. So many women fear that if they say no, they may hurt someone else or not be loved as much. Suze points out, “It’s so much easier to hurt yourself than to hurt someone else, isn’t it?” When you think logically about that statement it is so true, yet women do it several times a day.

I believe that courage is important because it allows women to set boundaries with quality number 4: generosity. Women are known for being too generous with their time, support, love and money. Suze points out that the act of generosity must benefit the giver as much as the receiver, or it is not true generosity.

Quality 5 and 6 are happiness and wisdom. Quality 7 is cleanliness, which is really just another word for organization. And lastly, number 8 is beauty, which is a combination of the other 7 qualities.

Notice I haven’t gone into any detail about the technical side of money in my review. Suze Orman and I could sit here all day and tell you about the importance of saving, investing, and organizing your finances but if you don’t have a relationship with money first, you will never stick to making good decisions with your money. Just like losing weight, we have to get to the bottom of what is really causing that “stumbling block” in order to conquer it.