I used to think chronically poor people were just financially ignorant. Nowadays I am beginning to realize they may be closer to financially depressed. For the past eight years, I have been living (way) below my means. As a result, I was able to quit my job and self-financed a return to school. Although I have money in my name, I have no current income, so living below my means would leave me without basic necessities.
It occurred to me when I was making another cash payment for my house that those payments were starting to feel as though they were getting closer and closer. Most recently, I was tempted to take the $2.02 from my overpayment and buy something entirely frivolous (specifically a candy bar) since it would mean more to me now than it would mean to my mortgage in the long run. I equated the thought immediately with countless tales and occurrences I have heard and seen; all concepts that I never quite understood before that urge.
From this point onward, I may be way off-base. Now I don't plan to drain my portfolio to find out, but it seems to me that coming into money is where most people make missteps, overvaluing the security of the sum, and the inevitable splurging puts them right back where they have always been. In its most extreme form, it's seen as the "curse of the lottery." I once heard the description that money will not change a person, it will just lead them to be more themselves. Honestly, I still don't know what to think about the financial yo-yo, where people catch a break and spend it on themselves before they have to give it to others in the form of payments (usually for items that they have already purchased). All I can do is thank God that I was born to a father who knew otherwise.
In the simplistic words of John "Bradshaw" Layfield in Have More Money Now, "you can have when you have." I believe what the financially depressed are truly under-valuating is how the money that they're turning over to others before they even get their own hands on it is repayment for a pleasure that has already been received (and maybe already forgotten). Whether they are paying off a mortgage or a car loan, all the way down to the more forgettable purchases made on a credit card. There is an innate dissatisfaction when you get something before it has been earned.
Not that I am faulting people who fall into this mindset. At least once, I was one of them.
Wednesday, September 14, 2011
Thursday, August 25, 2011
The Hardest Answer
If you have a handsome amount of money built up inside your portfolio, or even just your savings account, then you may find yourself approached with one of the hardest questions to answer financially. When a good friend asks, "is there any way at all you can loan me some money?" If that were the exact phrase of the question, then I strongly advise answering no -- but if the actual question were tied to a specific sum of money (and in cases of sincerity, it usually is), then the request becomes more difficult to decline.
Unfortunately, there is no easy answer in this case, but I can share some of my own experiences and leave the actual response to your own preference since the best answer is neither "yes" nor "no" but rather whatever response enables you both to maintain the friendship comfortably thereafter.
It is no secret that financial strife is often listed as the number one cause of divorces, and I would imagine it is just as damanging to friendships as well. Therefore, my automatic answer is no for the most part. There have been exceptions, however, and there are a few steps to making the request a positive experience. The first is deciding on your own personal maximum, whether it is $1,000 or $100. Ideally, this number should be a direct reflection of your own financial security, but to assume you are financially independent, then this number would be determined by your own feelings of being used or abused (or, more frankly, when you feel as though you are being taken advantage of).
First off, you should donate to charity if you are financially comfortable. Aside from the good it does both for society and for yourself, it is also a good way to protect yourself against scams and other abuse, because it gives you a buffer of (what I call) "forgiveness protection." Whenever I am cheated out of money, I have the ability to reduce my donations by that amount so it does not affect my life at all. Unfortunately, there are people who will understand that mentality and other people who will misunderstand it. If it makes perfect sense to you, then hopefully you are already in practice of it to some degree. If it sounds like flawed logic, then you are probably in the latter half so please don't apply it to your life.
When you loan money to friends, take it from this amount of charitable donations. When your friend pays you back, then the amount goes to charity. Keep in mind that this buffer will not ease your feelings of potential mistreatment, so never give beyond that original amount with which you are comfortable. Ever!
I have given to friends who paid me back and I give the money directly to charity because, for all intents and purposes, my giving it to them was my charitable donation. The first time I loaned a friend a substantial sum of money and she paid me back, I just gave it directly to another charity. It immediately made me feel as though I got twice as much mileage from that charity by loaning it to a friend first (mind you, this logic only prevails if all goes well, so do not bank on that as justification for loaning money to friends).
In another instance, I once loaned a friend money and then I lost my job several months later (about 15 months later). She started paying me back when I was between jobs, so the money came back to me when I needed it most. The money I was getting back then was not money that I would have held in a saving account without loaning it to her. It was money that I would have given away to charity already. Therefore, when I got a new job, I increased my charitable donations to cover that amount as well. In that case, I was my own charity, and the money got thrice as much mileage. But that was an exception, not an expectation.
When you loan money by this philosophy, then this next point should be a no-brainer: never charge interest for a loan! If you need any further evidence of that advice, then refer to Deuteronomy 3:19-20. Sure, banks do it all the time, but that's their business model. Investors do it all the time as their incentive. You are not in the business of profiting off friends. You are in a friendship with a person who is less financially stable than you are. If you give $1,000 and ask for $125/mo. for 10 months, then you have taken $250 more from your friend than they could really afford (extenuating circumstances aside). Potentially, your friend may offer to pay interest on top of the original amount (i.e. paying $100+ for 10 months for borrowing $1,000), but do not use that profit as incentive for giving the loan. Consider it your friend's gratitude for helping out in a time of need. The big difference here is that you are not entitled to the additional interest, so if your friend skimps on that amount, then consider yourself lucky to get the full principle returned.
Finally, the most important aspect of loaning money to friends is to never, ever ask for them to pay you back. Do not loan money you cannot afford to lose, and when you loan out money, do not assume control of when you will get it back. Truthfully, this aspect could be a real deal-breaker in most cases, and it is the reason for my first advice of the standard answer of "no" to most requests. There are ways to create payment plans and other such arrangements in order to stay on track, but they violate the "forgiveness protection" buffer, so you can never be sure. I have loaned money to a friend where we set up a payment plan, and invariably, there was often a reason why the payments had to be delayed. In the interest of full disclosure, it was actually he who insisted on the payment plan. And to my friend's credit, I got all the money back (but I told him to pay me whatever he could when he could, and it took about twice as long as he had originally designed).
Regardless, we are still friends today. And, perhaps surprisingly, he has not asked to borrow money since the loan was repaid. And that is the surest sign that I made the decision in that situation.
There are times when loaning money to a close friend is the best thing to do. But don't cloud your judgment with the best case scenario or swerve your expectations when you weigh the decision. Your friend's sincerity will not increase the likelihood of full repayment. It could just as easily end the friendship.
Unfortunately, there is no easy answer in this case, but I can share some of my own experiences and leave the actual response to your own preference since the best answer is neither "yes" nor "no" but rather whatever response enables you both to maintain the friendship comfortably thereafter.
It is no secret that financial strife is often listed as the number one cause of divorces, and I would imagine it is just as damanging to friendships as well. Therefore, my automatic answer is no for the most part. There have been exceptions, however, and there are a few steps to making the request a positive experience. The first is deciding on your own personal maximum, whether it is $1,000 or $100. Ideally, this number should be a direct reflection of your own financial security, but to assume you are financially independent, then this number would be determined by your own feelings of being used or abused (or, more frankly, when you feel as though you are being taken advantage of).
First off, you should donate to charity if you are financially comfortable. Aside from the good it does both for society and for yourself, it is also a good way to protect yourself against scams and other abuse, because it gives you a buffer of (what I call) "forgiveness protection." Whenever I am cheated out of money, I have the ability to reduce my donations by that amount so it does not affect my life at all. Unfortunately, there are people who will understand that mentality and other people who will misunderstand it. If it makes perfect sense to you, then hopefully you are already in practice of it to some degree. If it sounds like flawed logic, then you are probably in the latter half so please don't apply it to your life.
When you loan money to friends, take it from this amount of charitable donations. When your friend pays you back, then the amount goes to charity. Keep in mind that this buffer will not ease your feelings of potential mistreatment, so never give beyond that original amount with which you are comfortable. Ever!
I have given to friends who paid me back and I give the money directly to charity because, for all intents and purposes, my giving it to them was my charitable donation. The first time I loaned a friend a substantial sum of money and she paid me back, I just gave it directly to another charity. It immediately made me feel as though I got twice as much mileage from that charity by loaning it to a friend first (mind you, this logic only prevails if all goes well, so do not bank on that as justification for loaning money to friends).
In another instance, I once loaned a friend money and then I lost my job several months later (about 15 months later). She started paying me back when I was between jobs, so the money came back to me when I needed it most. The money I was getting back then was not money that I would have held in a saving account without loaning it to her. It was money that I would have given away to charity already. Therefore, when I got a new job, I increased my charitable donations to cover that amount as well. In that case, I was my own charity, and the money got thrice as much mileage. But that was an exception, not an expectation.
When you loan money by this philosophy, then this next point should be a no-brainer: never charge interest for a loan! If you need any further evidence of that advice, then refer to Deuteronomy 3:19-20. Sure, banks do it all the time, but that's their business model. Investors do it all the time as their incentive. You are not in the business of profiting off friends. You are in a friendship with a person who is less financially stable than you are. If you give $1,000 and ask for $125/mo. for 10 months, then you have taken $250 more from your friend than they could really afford (extenuating circumstances aside). Potentially, your friend may offer to pay interest on top of the original amount (i.e. paying $100+ for 10 months for borrowing $1,000), but do not use that profit as incentive for giving the loan. Consider it your friend's gratitude for helping out in a time of need. The big difference here is that you are not entitled to the additional interest, so if your friend skimps on that amount, then consider yourself lucky to get the full principle returned.
Finally, the most important aspect of loaning money to friends is to never, ever ask for them to pay you back. Do not loan money you cannot afford to lose, and when you loan out money, do not assume control of when you will get it back. Truthfully, this aspect could be a real deal-breaker in most cases, and it is the reason for my first advice of the standard answer of "no" to most requests. There are ways to create payment plans and other such arrangements in order to stay on track, but they violate the "forgiveness protection" buffer, so you can never be sure. I have loaned money to a friend where we set up a payment plan, and invariably, there was often a reason why the payments had to be delayed. In the interest of full disclosure, it was actually he who insisted on the payment plan. And to my friend's credit, I got all the money back (but I told him to pay me whatever he could when he could, and it took about twice as long as he had originally designed).
Regardless, we are still friends today. And, perhaps surprisingly, he has not asked to borrow money since the loan was repaid. And that is the surest sign that I made the decision in that situation.
There are times when loaning money to a close friend is the best thing to do. But don't cloud your judgment with the best case scenario or swerve your expectations when you weigh the decision. Your friend's sincerity will not increase the likelihood of full repayment. It could just as easily end the friendship.
Wednesday, August 10, 2011
Mid-3Q Update
Today is August, 10, 2011, which is the day I should have rebalanced my portfolio. However, if you recall from my last "Full Motley" entry, I started by noting how quickly the trigger date had arrived. Well, I was a full month ahead of schedule! The most interesting part is that if I had waited the month, then I would have made my adjustments today as the market closed around 10,700, instead of the 12,600 mark where it was a month ago. I also would not have ceased my contributions into my Roth IRA, which was the right move to make in my opinion for my daily finances.
Most likely, I will move a portion of bonds from my Roth IRA to the stocks during this valley. Also, I will have an unrelated entry later this month (that is, unrelated to my personal portfolio and the markets in general), but for now, let's continue tracking the Dow's third-quarter freefall....
No rest for investors: Dow plunges 520
http://money.cnn.com/2011/08/10/markets/markets_newyork/index.htm?iid=Lead
NEW YORK (CNNMoney) -- After a one-day respite, U.S. stocks plunged sharply yet again Wednesday as investors were confronted with mounting fears about Europe's ongoing debt crisis, this time in France.
The Dow Jones industrial average lost 520 points, or 4.6%, to 10,720. The index ended the day near session lows.
The S&P 500 fell 52 points, or 4.4%, to 1,121; and the Nasdaq composite lost 101 points, or 4.1%, to 2,381.
Stocks were led lower by the financial sector. On Wednesday afternoon CEO of embattled Bank of America Brian Moynihan tried to reassure investors that conditions at the bank and in the country are much better than they were four years ago when the financial crisis hit. The comments were made during a call hosted by investor Bruce Berkowitz of Fairholme Capital Management.
But the comments were not enough. Shares of the Dow component plunged 11% on the day. BofA has fallen nearly 50% so far this year.
Other names in the financial sector were hit just as hard. Shares of Citigroup, Goldman Sachs and Morgan Stanley dropped about 10%. Shares of Wells Fargo, UBS and JPMorgan Chase were down around 7%.
Along with BofA's problems, investors remain worried about the Europe's ongoing sovereign debt crisis.
Ever since Standard & Poor's stripped the U.S. of its AAA credit rating on Friday, fears have been building that rating agencies may also downgrade AAA-rated nations in Europe, since they are also struggling with massive debt problems.
On Wednesday, shares of French bank Societe Generale tumbled 15% on the Paris stock exchange amid speculation that France, Europe's second-largest economy after Germany, may be first to face a rating cut.
European banking shares also fell sharply. Deutsche Bank's stock dropped 12% while Spanish bank Banco Santandedr dropped 9.5%.
Most likely, I will move a portion of bonds from my Roth IRA to the stocks during this valley. Also, I will have an unrelated entry later this month (that is, unrelated to my personal portfolio and the markets in general), but for now, let's continue tracking the Dow's third-quarter freefall....
No rest for investors: Dow plunges 520
http://money.cnn.com/2011/08/10/markets/markets_newyork/index.htm?iid=Lead
NEW YORK (CNNMoney) -- After a one-day respite, U.S. stocks plunged sharply yet again Wednesday as investors were confronted with mounting fears about Europe's ongoing debt crisis, this time in France.
The Dow Jones industrial average lost 520 points, or 4.6%, to 10,720. The index ended the day near session lows.
The S&P 500 fell 52 points, or 4.4%, to 1,121; and the Nasdaq composite lost 101 points, or 4.1%, to 2,381.
Stocks were led lower by the financial sector. On Wednesday afternoon CEO of embattled Bank of America Brian Moynihan tried to reassure investors that conditions at the bank and in the country are much better than they were four years ago when the financial crisis hit. The comments were made during a call hosted by investor Bruce Berkowitz of Fairholme Capital Management.
But the comments were not enough. Shares of the Dow component plunged 11% on the day. BofA has fallen nearly 50% so far this year.
Other names in the financial sector were hit just as hard. Shares of Citigroup, Goldman Sachs and Morgan Stanley dropped about 10%. Shares of Wells Fargo, UBS and JPMorgan Chase were down around 7%.
Along with BofA's problems, investors remain worried about the Europe's ongoing sovereign debt crisis.
Ever since Standard & Poor's stripped the U.S. of its AAA credit rating on Friday, fears have been building that rating agencies may also downgrade AAA-rated nations in Europe, since they are also struggling with massive debt problems.
On Wednesday, shares of French bank Societe Generale tumbled 15% on the Paris stock exchange amid speculation that France, Europe's second-largest economy after Germany, may be first to face a rating cut.
European banking shares also fell sharply. Deutsche Bank's stock dropped 12% while Spanish bank Banco Santandedr dropped 9.5%.
Thursday, August 4, 2011
MSN MONEY: Dow plunges 513 points; 2011 gains are wiped out
Stocks plunged, with the Dow Jones Industrial Average ($INDU -4.31%) tumbling 513 points, their worst one-day loss since December 2008 and ninth-worst point loss, as investors worried that the U.S. economy may be slipping back into a recession. The overall market carnage wiped out all of the 2011 gains for the major averages.
The market rout was prompted in part by concerns that the Federal Reserve won't try to boost the economy again and the prospects of little -- if any -- help on the way from the federal government. A huge concern was what Friday's big jobs report will say. In addition, there were deep fears about the health of the European financial system; stocks on the continent fell sharply. Stocks in Brazil were down nearly 6%.
With today's losses, the market is now in a correction, with the Dow, Standard & Poor's 500 Index ($INX -4.78%) and the Nasdaq Composite Index ($COMPX -5.08%) all down more than 11% from the closing highs for 2011, reached on April 29. Nearly all of the declines for the indexes have come since July 21; the Dow's loss in that time is about 1,340 points.
Gold briefly surged above $1,680 an ounce for the first time and then sold off, and crude oil dropped below $88 a barrel for the first time since mid-February.
The Dow closed down 513 points, or 4.3%, to 11,384. The S&P 500 was off 60 points, or 4.8%, to 1,200, its lowest level since Nov. 30, 2010. The Nasdaq was off 137 points, or 5.1%, to 2,556, its lowest level since Dec. 1, 2010. The Nasdaq 100 Index ($NDX -4.57%) was down 106 points, or 4.6%, to 2,207.
While gold fell back, investors bid hotly for Treasurys. The 10-year Treasury yield fell to 2.458% from Wednesday's 2.599%.
Gold settled down $7.30 to $1,659 an ounce after reaching as high as $1,684.90. Silver was off $2.33 to $39.43 an ounce, a decline of 5.6%. Crude oil was down $5.30, or 5.8%, to $86.63 a barrel, its lowest level since Feb. 18 as the Egyptian revolution neared its climax. It had reached as low as $86.04.
What started the blow-off?
The number raised the worries for Friday's nonfarm payrolls and unemployment report. The report, which will come out at 8:30 a.m. ET, is expected to show little change in the unemployment rate, which was 9.2% in June, and maybe an 85,000 gain in nonfarm payrolls.
But there were other big issues, including a move by the Bank of Japan to push the yen lower against major currencies, especially the dollar.
In addition, European stocks plunged on worries that debt problems for Greece, Portugal, Italy and Ireland were worsening. The European Central Bank unexpectedly began large-scale intervention in the eurozone debt markets, the first time since March, buying bonds in an apparent attempt to prevent the region's sovereign debt crisis from engulfing Italy.
The market tensions also set off a furious battle between investors wanting safety in Swiss francs and the Japanese yen and the central banks of those countries, which don't want their economies priced way too high.
Posted 8/4/2011, 5:19 PM ET, by Charley Blaine
The market rout was prompted in part by concerns that the Federal Reserve won't try to boost the economy again and the prospects of little -- if any -- help on the way from the federal government. A huge concern was what Friday's big jobs report will say. In addition, there were deep fears about the health of the European financial system; stocks on the continent fell sharply. Stocks in Brazil were down nearly 6%.
With today's losses, the market is now in a correction, with the Dow, Standard & Poor's 500 Index ($INX -4.78%) and the Nasdaq Composite Index ($COMPX -5.08%) all down more than 11% from the closing highs for 2011, reached on April 29. Nearly all of the declines for the indexes have come since July 21; the Dow's loss in that time is about 1,340 points.
Gold briefly surged above $1,680 an ounce for the first time and then sold off, and crude oil dropped below $88 a barrel for the first time since mid-February.
The Dow closed down 513 points, or 4.3%, to 11,384. The S&P 500 was off 60 points, or 4.8%, to 1,200, its lowest level since Nov. 30, 2010. The Nasdaq was off 137 points, or 5.1%, to 2,556, its lowest level since Dec. 1, 2010. The Nasdaq 100 Index ($NDX -4.57%) was down 106 points, or 4.6%, to 2,207.
While gold fell back, investors bid hotly for Treasurys. The 10-year Treasury yield fell to 2.458% from Wednesday's 2.599%.
Gold settled down $7.30 to $1,659 an ounce after reaching as high as $1,684.90. Silver was off $2.33 to $39.43 an ounce, a decline of 5.6%. Crude oil was down $5.30, or 5.8%, to $86.63 a barrel, its lowest level since Feb. 18 as the Egyptian revolution neared its climax. It had reached as low as $86.04.
What started the blow-off?
The supposed trigger was a weak report on initial jobless claims. They were down 1,000 to 400,000. A week ago's estimate of 398,000 was revised to 401,000.
The number raised the worries for Friday's nonfarm payrolls and unemployment report. The report, which will come out at 8:30 a.m. ET, is expected to show little change in the unemployment rate, which was 9.2% in June, and maybe an 85,000 gain in nonfarm payrolls.
But there were other big issues, including a move by the Bank of Japan to push the yen lower against major currencies, especially the dollar.
In addition, European stocks plunged on worries that debt problems for Greece, Portugal, Italy and Ireland were worsening. The European Central Bank unexpectedly began large-scale intervention in the eurozone debt markets, the first time since March, buying bonds in an apparent attempt to prevent the region's sovereign debt crisis from engulfing Italy.
The market tensions also set off a furious battle between investors wanting safety in Swiss francs and the Japanese yen and the central banks of those countries, which don't want their economies priced way too high.
Posted 8/4/2011, 5:19 PM ET, by Charley Blaine
- Stocks plunge as worries about global growth cause traders to dump stocks and seek safety.
- Gold briefly tops $1,680 but falls back.
- Treasury yields fall as the dollar rises.
Friday, July 29, 2011
REUTERS: U.S. Stock Market Ends Its Worst Week In A Year
(Caroline Valetkevitch) - Stocks ended the worst week in a year as time runs out on Washington to reach agreement before the government loses its ability to borrow money.
The S&P 500 fell every day this week and was down 3.9 percent for the week as legislators failed to work out an agreement to raise the federal borrowing limit, which expires on Tuesday. Investors also worry about the likelihood of a U.S. credit downgrade.
The CBOE Market Volatility Index .VIX, a gauge of investor fear, jumped as much as 9 percent to its highest level since mid-March before paring its rise.
Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, said investors are taking a more defensive stance, possibly moving more into cash.
"It's frustrating for investors and for U.S. citizens to see this unfold in the way it has been," she said.
"From an overall asset allocation standpoint, in an environment like this, you get bigger moves into cash and safe havens."
The Dow Jones industrial average .DJI was down 96.87 points, or 0.79 percent, at 12,143.24. The Standard & Poor's 500 Index .SPX was down 8.39 points, or 0.65 percent, at 1,292.28. The Nasdaq Composite Index .IXIC was down 9.87 points, or 0.36 percent, at 2,756.38.
President Barack Obama told Republicans and Democrats to find a way "out of this mess." The United States will be unable to borrow money to pay its bills if Congress does not raise the debt limit by August 2.
A second attempt for a vote in the House of Representatives is expected after the close of trading on Friday after a bill was modified to try to win over more conservative lawmakers. The measure has little chance of passing in the Senate, however.
At least one credit rating agency has said it is likely to lower the United States' prized tripe-A rating if the cuts in Washington don't go far enough.
"Will the deal be enough to satisfy the credit rating agencies is really what's at stake here," Trunow said, whose firm manages about $14.8 billion.
The S&P utility index .GSPU is down 2.1 percent for the week, while the Dow is down 4.2 percent and the Nasdaq is down 3.6 percent for the week.
The S&P 500 briefly fell below its 200-day moving average, seen as key support, and bounced back from its worst levels of the day.
Weak economic data also weighed on equities. The U.S. economy stumbled badly in the first half of this year and came dangerously close to contracting in the January-March period.
Among declining stocks, Chevron Corp (CVX.N), the second-largest U.S. oil company, fell 1 percent to $104.02 despite reporting a 43 percent jump in quarterly profit that beat estimates.
(Reporting by Caroline Valetkevitch; Editing by Kenneth Barry)
The S&P 500 fell every day this week and was down 3.9 percent for the week as legislators failed to work out an agreement to raise the federal borrowing limit, which expires on Tuesday. Investors also worry about the likelihood of a U.S. credit downgrade.
The CBOE Market Volatility Index .VIX, a gauge of investor fear, jumped as much as 9 percent to its highest level since mid-March before paring its rise.
Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, said investors are taking a more defensive stance, possibly moving more into cash.
"It's frustrating for investors and for U.S. citizens to see this unfold in the way it has been," she said.
"From an overall asset allocation standpoint, in an environment like this, you get bigger moves into cash and safe havens."
The Dow Jones industrial average .DJI was down 96.87 points, or 0.79 percent, at 12,143.24. The Standard & Poor's 500 Index .SPX was down 8.39 points, or 0.65 percent, at 1,292.28. The Nasdaq Composite Index .IXIC was down 9.87 points, or 0.36 percent, at 2,756.38.
President Barack Obama told Republicans and Democrats to find a way "out of this mess." The United States will be unable to borrow money to pay its bills if Congress does not raise the debt limit by August 2.
A second attempt for a vote in the House of Representatives is expected after the close of trading on Friday after a bill was modified to try to win over more conservative lawmakers. The measure has little chance of passing in the Senate, however.
At least one credit rating agency has said it is likely to lower the United States' prized tripe-A rating if the cuts in Washington don't go far enough.
"Will the deal be enough to satisfy the credit rating agencies is really what's at stake here," Trunow said, whose firm manages about $14.8 billion.
The S&P utility index .GSPU is down 2.1 percent for the week, while the Dow is down 4.2 percent and the Nasdaq is down 3.6 percent for the week.
The S&P 500 briefly fell below its 200-day moving average, seen as key support, and bounced back from its worst levels of the day.
Weak economic data also weighed on equities. The U.S. economy stumbled badly in the first half of this year and came dangerously close to contracting in the January-March period.
Among declining stocks, Chevron Corp (CVX.N), the second-largest U.S. oil company, fell 1 percent to $104.02 despite reporting a 43 percent jump in quarterly profit that beat estimates.
(Reporting by Caroline Valetkevitch; Editing by Kenneth Barry)
Friday, July 8, 2011
The Full Motley: 3Q 2011
Wow, things have been moving along at such a fast pace that I am surprised how soon I am to my rebalancing again. Sunday will be July 10, 2011, so I can submit my changes today or on Monday. Based on the amount of homework I have to finish, I opted to distract myself by rebalancing today.
When I logged onto my accounts today, I saw this as my current allocations:
Fund # - Real / Current / Target
Fund 24 - 25% / 0% / 25%
Fund 29 - 5% / 0% / 5%
Fund 59 - 25% / 0% / 25%
Fund 84 - 10% / 0% / 10%
Fund 85 - 25% / 0% / 25%
Fund 113 - 11% / -1% / 10%
Due to rounding, I had 101% of allocations in my 401(k) and I had no discernable means of moving the excess 1% anywhere. Obviously, this glitch was due to rounding. When I got into the more specific details of the funds, I ascertained that the following moves were needed:
Once again, not much activity, but the gain in the Vanguard Total International Stock Index Fund was removed from the fund and dispersed amongst other funds that have fallen. The overall expectations of the domestic markets right now is that they will fall through October and then hit a sharp rise, although that has not happened quite to the extreme that I have been anticipating. The markets have been going up lately and they are still above where they were in January 2011, which is especially surprising to me. My prediction was that the markets would gain under 10% for the year. At this point, it looks like they are in position to gain 10-15% for the year.
Therefore, I have a decision to make. I can either continue contributing to my Roth IRA or I can suspend contributions until later. After a couple days of consideration, I opted to suspend contributions because (A) I was expecting the market would be well below 12,000 (maybe even below 11,000), and (B) I need liquid assets in case I am unable to get part-time work (or if I decide against pursuing work) before I complete my degree.
When I logged onto my accounts today, I saw this as my current allocations:
Fund # - Real / Current / Target
Fund 24 - 25% / 0% / 25%
Fund 29 - 5% / 0% / 5%
Fund 59 - 25% / 0% / 25%
Fund 84 - 10% / 0% / 10%
Fund 85 - 25% / 0% / 25%
Fund 113 - 11% / -1% / 10%
Due to rounding, I had 101% of allocations in my 401(k) and I had no discernable means of moving the excess 1% anywhere. Obviously, this glitch was due to rounding. When I got into the more specific details of the funds, I ascertained that the following moves were needed:
- Vanguard High-Yield Corporate Fund (add small amount)
- Vanguard PRIMECAP Fund Investor (add small amount)
- Vanguard Total Int'l Stock Index Fund (remove 1%)
- Vanguard Total Bond Market Index Fund (add <1%)
- Vanguard Total Stock Market Index Fund (remove small amount)
Once again, not much activity, but the gain in the Vanguard Total International Stock Index Fund was removed from the fund and dispersed amongst other funds that have fallen. The overall expectations of the domestic markets right now is that they will fall through October and then hit a sharp rise, although that has not happened quite to the extreme that I have been anticipating. The markets have been going up lately and they are still above where they were in January 2011, which is especially surprising to me. My prediction was that the markets would gain under 10% for the year. At this point, it looks like they are in position to gain 10-15% for the year.
Therefore, I have a decision to make. I can either continue contributing to my Roth IRA or I can suspend contributions until later. After a couple days of consideration, I opted to suspend contributions because (A) I was expecting the market would be well below 12,000 (maybe even below 11,000), and (B) I need liquid assets in case I am unable to get part-time work (or if I decide against pursuing work) before I complete my degree.
Sunday, June 5, 2011
AOL: Feds Sue 'Winning in the Cash Flow Business' Infomercial Huckster
Feds Sue 'Winning in the Cash Flow Business' Infomercial Huckster
http://www.walletpop.com/2011/06/02/feds-sue-winning-in-the-cash-flow-business-infomercial-huckste/?a_dgi=aolshare_twitter
by Jorgen Wouters
The mastermind behind a get-rich-quick scheme whose infomercials lured hundreds of thousands of victims is being sued by the Federal Trade Commission for defrauding consumers.
Russell Dalbey, CEO and founder of the company behind the "Winning in the Cash Flow Business" program, swindled consumers with fake claims about the fast, easy, big money they could make finding, brokering and earning commissions on seller-financed promissory notes, the FTC charged.
Although consumers paid as little as $40 to get started, they were pressured into spending far more on worthless products, the FTC charged, with many consumers losing thousands of dollars.
"'Winning in the Cash Flow Business' was a real loser for hundreds of thousands of consumers nationwide," David Vladeck, director of the FTC's Bureau of Consumer Protection, said in a statement.
"When someone is selling a program designed to help people make money, they have to accurately describe how much consumers can expect to make and be truthful about how quickly they will be able to do so," Vladeck added. "None of that happened in this case, and people who bought the program paid the price."
The FTC's complaint against Dalbey and others involved in marketing the program, which was filed jointly with Colorado Attorney General John W. Suthers, accuses the defendants of misleading consumers about the amount of money they could earn using the program, as well as how quickly and easily they could rake it in.
The FTC and the state of Colorado are seeking a court order to stop Dalbey, his wife and their businesses from making misleading claims, as well as to recover money to refund their victims. Defendants include Russell T. Dalbey; DEI LLLP; Dalbey Education Institute LLC; IPME LLLP; Catherine L. Dalbey; and Marsha Kellogg, a consumer who provided a false testimonial for the service.
Dalbey began pitching his "wealth building" program on the Internet and via direct mail in 1996, and since 2002, millions of consumers nationwide have been bombarded with 30-minute infomercials for the "Winning in the Cash Flow Business" program, which were hosted by TV personality and repeat DUI offender Gary Collins.
The program promised to teach consumers how to find, broker and earn commissions on seller-financed promissory notes -- privately held mortgages or notes that are often secured by the home or land. The infomercial claimed consumers could successfully earn substantial income brokering promissory notes in three easy steps -- "Find 'Em," "List 'Em" and "Make Money."
"[Y]ou'll be amazed at just how easy it is to generate a stream of extra income every month. Build financial freedom and a better quality of life in just minutes a day. Or even retire earlier than you ever dreamed possible. Order now and you'll be ready to profit in minutes," the infomercials claimed.
These claims were supported by "testimonials" from consumers who claimed to have made "$1.2 million in 30 days," "$79,000 in a few hours" and "$262,216 part time," according to some. "In less than 30 days, I closed two transactions, and I netted 1 point – a little bit over $1.2 million," a testimonial by "Don B." from New York stated.
Those who fell for the infomercial's spiel shelled out approximately $40 to $160 on the initial program but were soon encouraged to spend hundreds or thousands of dollars more on multi-day seminars, coaching sessions and promissory note holder lead lists. Very few of these consumers ever made the money Dalbey promised them, the FTC said.
The complaint accuses Dalbey and his co-defendants of violating the FTC Act and Colorado law by making false and unsubstantiated claims about the "Winning in the Cash Flow Business" program, as well as their coaching programs, workshops, seminars and note holder leads.
Although Dalbey claims to have made big money in the promissory note business, the FTC charged, most of his note-related income for the past two decades came from pitching products and services that purportedly teach consumers how to find and broker these notes.
The defendants are also accused of inflating the success customers could expect with the program in the consumer testimonials. One of these customers, Marsha Kellogg, claimed in one testimonial that she earned $79,975.01 from a single promissory note transaction, while she actually earned $50,000 less.
Kellogg agreed to an order settling the FTC charges against her -- the first time the FTC ever charged a consumer with making misrepresentations in a product or service testimonial. The order forbids Kellogg from making future misrepresentations, and she has agreed to cooperate in the case against Dalbey and his co-defendants.
Consumer information from the FTC about how to spot and avoid investment fraud, "get-rich-quick" schemes and other types of wealth-building scams can be found at the link below:
http://www.ftc.gov/bcp/edu/microsites/moneymatters/jobs-wealth-building.shtml
http://www.walletpop.com/2011/06/02/feds-sue-winning-in-the-cash-flow-business-infomercial-huckste/?a_dgi=aolshare_twitter
by Jorgen Wouters
The mastermind behind a get-rich-quick scheme whose infomercials lured hundreds of thousands of victims is being sued by the Federal Trade Commission for defrauding consumers.
Russell Dalbey, CEO and founder of the company behind the "Winning in the Cash Flow Business" program, swindled consumers with fake claims about the fast, easy, big money they could make finding, brokering and earning commissions on seller-financed promissory notes, the FTC charged.
Although consumers paid as little as $40 to get started, they were pressured into spending far more on worthless products, the FTC charged, with many consumers losing thousands of dollars.
"'Winning in the Cash Flow Business' was a real loser for hundreds of thousands of consumers nationwide," David Vladeck, director of the FTC's Bureau of Consumer Protection, said in a statement.
"When someone is selling a program designed to help people make money, they have to accurately describe how much consumers can expect to make and be truthful about how quickly they will be able to do so," Vladeck added. "None of that happened in this case, and people who bought the program paid the price."
The FTC's complaint against Dalbey and others involved in marketing the program, which was filed jointly with Colorado Attorney General John W. Suthers, accuses the defendants of misleading consumers about the amount of money they could earn using the program, as well as how quickly and easily they could rake it in.
The FTC and the state of Colorado are seeking a court order to stop Dalbey, his wife and their businesses from making misleading claims, as well as to recover money to refund their victims. Defendants include Russell T. Dalbey; DEI LLLP; Dalbey Education Institute LLC; IPME LLLP; Catherine L. Dalbey; and Marsha Kellogg, a consumer who provided a false testimonial for the service.
Dalbey began pitching his "wealth building" program on the Internet and via direct mail in 1996, and since 2002, millions of consumers nationwide have been bombarded with 30-minute infomercials for the "Winning in the Cash Flow Business" program, which were hosted by TV personality and repeat DUI offender Gary Collins.
The program promised to teach consumers how to find, broker and earn commissions on seller-financed promissory notes -- privately held mortgages or notes that are often secured by the home or land. The infomercial claimed consumers could successfully earn substantial income brokering promissory notes in three easy steps -- "Find 'Em," "List 'Em" and "Make Money."
"[Y]ou'll be amazed at just how easy it is to generate a stream of extra income every month. Build financial freedom and a better quality of life in just minutes a day. Or even retire earlier than you ever dreamed possible. Order now and you'll be ready to profit in minutes," the infomercials claimed.
These claims were supported by "testimonials" from consumers who claimed to have made "$1.2 million in 30 days," "$79,000 in a few hours" and "$262,216 part time," according to some. "In less than 30 days, I closed two transactions, and I netted 1 point – a little bit over $1.2 million," a testimonial by "Don B." from New York stated.
Those who fell for the infomercial's spiel shelled out approximately $40 to $160 on the initial program but were soon encouraged to spend hundreds or thousands of dollars more on multi-day seminars, coaching sessions and promissory note holder lead lists. Very few of these consumers ever made the money Dalbey promised them, the FTC said.
The complaint accuses Dalbey and his co-defendants of violating the FTC Act and Colorado law by making false and unsubstantiated claims about the "Winning in the Cash Flow Business" program, as well as their coaching programs, workshops, seminars and note holder leads.
Although Dalbey claims to have made big money in the promissory note business, the FTC charged, most of his note-related income for the past two decades came from pitching products and services that purportedly teach consumers how to find and broker these notes.
The defendants are also accused of inflating the success customers could expect with the program in the consumer testimonials. One of these customers, Marsha Kellogg, claimed in one testimonial that she earned $79,975.01 from a single promissory note transaction, while she actually earned $50,000 less.
Kellogg agreed to an order settling the FTC charges against her -- the first time the FTC ever charged a consumer with making misrepresentations in a product or service testimonial. The order forbids Kellogg from making future misrepresentations, and she has agreed to cooperate in the case against Dalbey and his co-defendants.
Consumer information from the FTC about how to spot and avoid investment fraud, "get-rich-quick" schemes and other types of wealth-building scams can be found at the link below:
http://www.ftc.gov/bcp/edu/microsites/moneymatters/jobs-wealth-building.shtml
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