Credit Cards: how the disadvantages may outweigh the benefits for some

Posted by Lindsey Connell

Credit card companies try to get you to spend as much as possible because the more you spend, the more they benefit. Credit card companies receive a percentage of each transaction a credit card holder has and these companies bank on the fact that the more a holder spends, the better chance that they will borrow more money with the company’s high interest rates. If the holder then exceeds their credit limit, the companies charge additional fees, which can be expensive. By relying on a credit card for most purchases, it makes budgeting and saving money more difficult and can often times lead to debt. Although carrying a credit card seems more convenient than money, the disadvantages of it seem to weigh heavily over the advantages. Hidden fees and penalties associated with credit cards often surprise many card holders because making purchases with a piece of plastic doesn’t always feel like spending money. Although credit cards seem dangerous, they are also useful for people who are responsible and stay on top of their payments. For those who have a secured amount of money coming into their possession soon but not at the moment, they can purchase something on credit now and pay for it when they get the sum of money. This is a major advantage that credit cards have over cash.

http://financialplan.about.com/od/savingmoney/qt/Overspending.htm

http://www.pcbs.org/credit-cards-can-encourage-overspending/

http://seekingalpha.com/article/20333-guide-to-credit-cards-how-credit-cards-encourage-you-to-overspend

2009 Christmas Spending Plans Slightly Below 2008 Levels

Posted by Lindsey Connell

Shoppers around the country say they are planning to spend an average of $417 for gifts this holiday season, down from $431 last year and $859 in 2007 according to the twenty-fourth annual survey on holiday spending from the American Research Group, Inc. The overall average planned spending is down a little over 3% from 2008 and it is the lowest level of planned spending recorded by the American Research Group since 1990 when planned spending was $399 (planned spending was $419 in 1991).

Results from the 2009 survey show that:
Those planning to shop on the Internet (42%) have surpassed those planning to shop from catalogs (36%) for the first time in the history of the survey.
Planned spending among those shopping on the Internet ($641) exceeds planned spending among those saying they will shop from catalogs ($450) for the first time.
Shoppers saying they will wait for sales say they will spend more ($439) than those saying they will pay full price for gifts ($402) for the first time.

Shoppers saying they will use the Internet to purchase gifts will spend on average $641, compared to $536 in 2008, an increase of nearly 20%.
Shoppers saying they will wait for sales will spend on average $439, compared to $382 in 2008, an increase of nearly 15%.
In telephone interviews with a random sample

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Personal Finance: Manage Your Money Better Online

Posted by Ka Lee Angel Lee

By Bill Snyder

Mon, November 23, 2009 — CIO — Let's be honest. Most of us could do a better job handling our money. When times are good, we probably spend too much. When times are bad, too many of us stick our heads in the sand. Both, of course, are bad ideas. The Web has a wealth, indeed a surfeit, of tools and information to help you manage your personal finances.

To get an idea of just how much, simply take a look at Google's personal finance directory. It's overwhelming. So I've culled the list to find Web sites and tools that you'll find helpful and I find trustworthy. This is by no means "a best of the Web" list. It's too difficult to make that call, and I've avoided sites that have no free information.

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Personal finance: Keep holiday spending under control this season

Posted by: Andrew Pia

Written by: Kathy DiCenso

As the year comes to a close, spending in most households heads up -- on holiday gifts, entertainment and, depending on where you live, on already high energy costs.

It's easy to lose control. So make a plan now to minimize debt while putting money where it absolutely needs to go.

Put your current finances under a microscope

Call it a gift from you to you. If you're trying to get your finances in order, plan a visit now with a financial adviser, such as a certified financial planner professional. This meeting should extend beyond your holiday spending to setting goals for saving, investing and extinguishing debt and setting financial goals for the future. You also can examine your spending patterns and the emotional drivers behind many of our financial decisions.

Create a holiday budget

If you have credit card debt now, you don't want to elevate those numbers. Set a spending number you will not exceed and start setting aside cash in an account to cover it. When should you make the budget? As early in the year as possible, but if you haven't started shopping yet, figure out how much money you can realistically set aside and stay as close to that number as you can.

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Money Monday: The Best Personal Finance Stories from the Weekend

Posted by Ka Lee Angel Lee

Here is a run down of the personal finance stories you might have missed this weekend:

In Forbes, we wrote about why long-term investors might want to think twice before investing in gold (whether the metal itself or stocks from gold mining companies), how to push for a better retirement plan at work and how to avoid costly mistakes in your Individual Retirement Account.

The New York Times, meanwhile, discussed how investors are in better shape with the Dow at 10,000 now than they were with the Dow was at 10,000 in 1999.

Los Angeles Times columnist Kathy M. Kristof (a sometimes Forbes contributor) listed steps to take before the end of the year to lower your tax bill.

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Choosing the right card

By Alma Zhumagulova

There are many payment options available nowadays: cash, checks, credit and debit cards and other types of cards. Soon after their invention, credit cards became widely popular in American society – one of the top payment methods. However, after the financial crises hit the wallets of consumers, the statistics have shown that now credit cards are out and debit cards are in.
While it might seem that debit cards are very safe and convenient, there are several cons to this payment option too. On the plus side, debit cards are very easy to obtain and are equivalents of cash, i.e. they let you pay for your purchases with your own money while not having to carry vast amounts of cash. However, if your debit card information is stolen, then you have much more responsibility for unauthorized payments than with the credit card. So paying with a debit card for online transactions is not the best idea. Another drawback is that debit cards don’t help you improve your credit score while they might “help” you worsen it: overdraft and other debit card fees are reported to credit bureaus and you cannot dispute them once they are incurred. Before choosing one or another method of payment you should consider all the pros and cons of each and also the purposes that you use them for as well as your long term goals.

Sources:
http://money.cnn.com/2009/11/02/pf/debit_card_pitfalls/index.htm
http://www.mortgageloan.com/credit-versus-debit-cards-know-the-differences-2845
http://www.sayeducate.com/2009/05/13/debit-card-usage-increases-credit-card-usage-decreases/

Parking Payout

Posted by Shawn Gao

When I came back from NYC, I drove with two parking violation tickets in car, which is 100 dollar each. Without knowing any parking policy, I was fined in front of parking signs, which said “No Parking Without Commercial Vehicle”, but before I parked in that place with asking one police in that area. I cannot see why the parking violation fee in NYC is so expensive by comparing with violation fee in Syracuse, which is 35 dollar each.
People in cities also claim what they happened when they got the violation tickets. For example, Mr. Robert who did not find out a violation ticket which was find 5 years ago, and received a letter from city collection agent for his added- up penalty $1,012. Only choice that he had is either write a check to payout or hire a lawyer. As that second option would have cost at least twice as much, he really had no choice at all.
What can people do? City councilman Bernard argue if collection agent could limit fines to no more than five times the original penalty. However, other officials are considering whether limiting fines would decrease the parking revenue or not.
I would hope the city will still choose to do the right thing.
1. http://www.baltimoresun.com/news/opinion/editorial/bal-ed.parking15nov15,0,1543290.story
2.http://weblogs.baltimoresun.com/news/opinion/2009/11/upcoming_editorial_baltimores.html
3.http://greatergreaterwashington.org/post.cgi?id=4065

Tips for making college more affordable

Posted by Lindsey Connell

(CBS) For many parents, saving for college is a daunting task. Stephanie AuWerter, Editor of SmartMoney.com, has some tips for making college more affordable.

Between inflation, student competitiveness and school selectivity, college costs are rising - fast. Your best bet is to start saving now so that you have some money put away for your children when they're ready to start college. "In 18 years, these numbers could be $175,000 for a public school and $375,000 for a private school [for four years]," says AuWerter.

For starters, try a 529 college savings plan. "The account grows tax deferred and withdrawals taken for college costs are tax free," says AuWerter. Picking the right plan, however, can be a little tricky. AuWerter suggests looking at your home state's plan first, but if the investments aren't great or the fees are too high, look elsewhere. For a breakdown, click here to visit SmartMoney.com's article on the best and worst 529 plans.

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What to do to save for college

Posted by Lindsey Connell

It is important to know both how to save and when to start saving for college. The first important thing to know is that the sooner you begin saving, the better. Parents should begin putting money aside for their child’s college fund the moment they are born. Also, once the child begins working, they should immediately begin putting aside a percentage of their income for college. Another helpful tip is to invest in stocks because stocks are best for your college saving portfolio. Besides this, most people saving for college think they have to have the entire amount saved, but loans and grants can bridge the gap between what you have saved and what the school costs. Even with this in mind, it is important to save as much money as possible because with the economy down and more people requesting scholarships and loans, the chance of getting one is slightly more challenging. Another tip is to consider 529 college plans but it is important to know that they can be extremely expensive. With this plan, the account grows tax deferred and withdrawals taken for college costs are tax free.

http://money.cnn.com/magazines/moneymag/money101/lesson11/

http://money.cnn.com/2005/08/10/pf/saving/willis_tips/index.htm

http://www.cbsnews.com/stories/2008/04/20/uttm/main4029687.shtml

Do not let money ruin your honey

By Jameel Murray

Money issues are often cited as one of the top reasons for divorce in the United States. Recently, Shaquille O’neal and his long time wife Shaunie O’neal filed for divorce. Shaunie O’neal claimed that her former husband hid and kept money away from her while the Cleveland Cavaliers star claimed his wife mismanaged funds which included her buying a house for their personal trainer. The couple did not sign a prenuptial agreement, which would give Shaunie O’neal half of the couple’s assets. This story is yet another example of how important financial responsibility is to keeping a healthy relationship.
Managing finances as a couple is extremely important. Whether a couple both are financially well off or not, differences in the money management of a couple would cause major difficulties in a relationship. Money is one of the most sensitive subjects of any relationship. Studies have shown that the spouse that makes the more money tends to control all the financial decisions in a relationship. Many financial advisers suggest that couples have two separate checking accounts. This would allow both couples to individually manage their funds.

sources: http://www.nydailynews.com/gossip/2009/11/10/2009-11-10_shaqs_wife_shaunie_0neal_files_for_separation.html

http://www.fool.com/personal-finance/saving/how-to-guide-manage-money-with-your-mate.aspx

http://www.msnbc.msn.com/id/20108870/ns/today_technology_and_money-money_matters/

Asian Real Estate Investment Market Buoyed in 3Q

Posted By Shawn Gao

The Asian real estate investment market continued to gain momentum in the 3Q of 2009 as capital values generally stabilised, sentiment improved and the bid-ask spread narrowed, particularly for quality yield-accretive assets in prime locations.

Direct real estate investment in Asia jumped 25 percent quarter-on-quarter to an estimated US$9.1bn. Hong Kong accounted for 36 percent of the total volume followed by China, Korea and Taiwan. However, overall transaction volume remained low in the first nine months of 2009, falling by 49 percent year-on-year according to CB Richard Ellis’ 3Q 2009 Asia Investment MarketView report.

The office sector attracted US$4.7bn of investment during the quarter, or 52 percent of the total flow of capital. Residential properties accounted for 16 percent, with the retail sector comprising 13 percent of the total volume. Despite the relatively low transaction volume in the hospitality sector, a total of six hotel transactions worth a combined total of US$300m were concluded during the quarter, surpassing within three months the five transactions recorded in the first six months of 2009. Transactions involving industrial properties also showed signs of improvement with a total of 24 deals concluded between July to September, a similar figure to the total number of deals completed in the first six months of the year.
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There is hope

By Jonathan Tse



On the week of November 7th, there was an all time low of 502,000 first-time claims for unemployment insurance since the week of January 3rd. Some believe that this could be a sign that the problem of joblessness is beginning to be solved and that unemployment rates may begin to decline. This number of first-time job claims was much lower than expected since the estimate for this week was 510,000. It is believed that this is a sign that companies are cutting jobs at a slower pace than at the beginning of the year, but economists say that joblessness rates are expected to rise until they peak during mid-2010. The reason for this is that analysts say that claims must fall to approximately 450,000 or below to indicate that the economy is adding jobs. The concern that there will be a jobless recovery still worries many, but the government is working to improve the situation. President Obama announced that he plans to hold a new jobs forum and economic growth in December. Also, last week President Obama signed a bill that would provide 20 more weeks of jobless benefits to the unemployed. This plan will be funded by extending the long-standing unemployment tax on employers to 2011.

http://money.cnn.com/2009/11/12/news/economy/initial_claims/index.htm
http://www.reuters.com/article/ousivMolt/idUSN0243717320091112
http://www.nytimes.com/2009/11/13/business/economy/13econ.html?_r=1&ref=business

How to Budget Money During College

Posted By,
Meredith Anderson

College tuition is expensive enough these days. When we budget our money we might not realize how much er spend on our daily expenses. Rent, eating out, books, clothes, alcohol, and daily coffee runs, are expenses that we might not always budget for but in reality probably spend the most on.



There are a couple things that will help reduce our expenses by a lot. Reducing your meal plan to only purchasing a realistic amount is a good start. Most of us have double the meals we actually use a week. Right there is hundreds of dollars a month we can save. Buying used books is not as fancy as brand new ones, however each semester you can save a couple hundred on books that are already highlighted, and you probably won't look at ever again! Of course then there are the simple things that can save us over time. Making our own snacks, coffee, and evening reusing notebooks will add up after four years.

Its important to stay informed about your finances. Try to use cash as much as possible and make simple lists and spread sheets to keep track of your expenses. It is true that not everything we learn in college will matter after graduation, however the way you manage your money will be a life time lesson to remember.




Sources:
http://collegelife.about.com/od/moneyfinances/qt/savingmoney5.htm
http://www.msnbc.msn.com/id/14448831/
http://www.bankrate.com/brm/news/sav/20000814b.asp

Personal Finance: Time to get serious about Roth IRAs

For so many years, people have planned for retirement thinking that they would pay lower taxes than they paid while working. However, it’s no longer a sure thing.

Many people have saved money toward their retirement by putting it into tax deferred accounts. They will have to pay taxes on that money as they take withdrawals. Approximately 85 percent of Social Security benefits will be taxed for many of these tax deferred savers.

In 2001, the federal deficit was out of control and tax cuts were set by President Bush that are set to expire in 2010. This creates a chance that tax rates will be much higher than they were over the last decade.

Roth IRAs were created in 1997 tax legislation. Roth IRAs allow workers to put away money that could build tax-free for retirement. Contributions to Roth IRAs do not qualify for tax deductions, but the money that is withdrawn years later, in retirement, is not taxed. That is especially beneficial to younger savers whose accounts have many years to earn interest, dividends and gains that can compound over time. The law that created Roth IRAs also included provisions for allowing taxpayers to convert their existing tax-deferred IRAs into Roths.

But Roth IRAs have had their limits, too. Only taxpayers who earn less than $105,000 ($166,000 for joint filers) in 2009 can contribute the maximum amount ($5,000 per person, with a $1,000 additional catch up contribution for folks 50 or older) to a Roth IRA. And only people earning less than $100,000, single or married filing jointly, can convert their traditional IRAs to Roths.

In 2010, some of those rules will change. That $100,000 limit disappears, so folks with higher incomes can convert traditional IRAs to Roth IRAs. Deciding whether to do that, and how to go about it, is going to be difficult and complex. Here are some considerations.

Source 1

Source 2

Source 3

Posted By: Amy Nightingale

Celebrities are in Debt Too

In our current economy, we all seem to focus on the common persons’ financial issues. Yet we should keep in mind that celebrities get hit just as hard, maybe even harder, than us. They are human too and have the same financial issues as others whether they are bogged down from the stock market decline or are obsessed with purchasing items that they know they can’t afford. Anyone can get wrapped up in a specific lifestyle and lose track of their budgets and overall financing. For example, Mike Tyson was commonly known to make outrageous purchases which put him into some major debt over the years. His most news worthy purchase was a set of tigers! Apparently he was paying about $500,000 per month to keep up his lavish lifestyle, even though he couldn’t afford it. He was a person who spent money on whatever he wanted. Another celebrity who was financially hurting a few years ago is Donald Trump. Even though this man owned multiple hotels, plazas and casinos his own personal liabilities came to $900 million alone. About a decade ago, Trump’s three casinos and Plaza Hotel were pushed into bankruptcy. He also lost his yacht and Trump shuttle, and lost his mansion and $14 million in his divorce. It goes to show that the common person is not the only one with financial issues.

References:
http://moneycentral.msn.com/content/SavingandDebt/P75072.asp
http://www.gotdebt.net/85-even-celebrities-sink-deep-in-debt.html
http://www.nationalpayday.com/education/news/19-celeb-loan.asp

By: Kelsey Hoffman

Investing by burgers and beer

By Beth Kowitt, reporter
November 3, 2009
Posted by Alma Zhumgulova

NEW YORK (Fortune) -- You decide you're going to have some friends over to watch a little NASCAR. You hit the supermarket and buy some burgers, hot dogs and a 12-pack. You get home, fire up the grill, turn on the tube and let your dog out.

What does all this have to do with investing?

Steaks, beer, cable, car racing, pets -- those are all businesses that Intrepid Capital (ICMBX) fund manager Mark Travis owns stock in. They don't exactly fit the traditional definition of consumer staples, but even in an economic downturn, he says they're not going away.

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How to invest $10,000 right now

By Harry Domash

Posted by Lily Mei

You're not rich. You own a few mutual funds in a 401k or an individual retirement account. And you're ready to take the next step: to buy a few stocks with $10,000 or so sitting in certificates of deposit or languishing in a bank account.

But how do you get started?

Let's begin by admitting this much: All of us, no matter how good we are at stock picking, are going to pick an occasional loser. That's why diversification is important. How many stocks must you own? Opinions vary, but dividing your $10,000 into 10 chunks of $1,000 each is probably sufficient. With many discount brokers charging less than $10 a trade, the commissions won't be significant.

However, different folks have different investment needs. I'll describe three strategies, including links to screens to see today's picks. Feel free to mix and match the stocks turned up by the screens or stick with the strategy that best suits your needs.

I used free online tools to build these three screens. The first two use StockScreen123, arguably the most capable free screening tool available on the Web. The third uses the Finviz.com screener, which I find easier to use but not as capable.

As tools, screens work best if rebalanced every six months. Rebalancing means that after six months, you'd rerun the screen and update the portfolio based on the new screen results.

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Increase in Roth IRA Conversions

Posted By, Meredith Anderson

In retirement, your paycheck might go away, but taxes won't.
Still your tax bill can be hard to predict. To have some control over how much you pay the government each year, you should have both taxable and non-taxable accounts from which to draw your retirement income.
Imagine it this way. Perhaps early in retirement you choose to continue to work part time and supplement your income from retirement savings accounts. The combined income may put you into a higher tax bracket. However, if you take some money from a Roth IRA that year, because withdrawals are nontaxable, it could help keep you in the lower bracket.
In later years if you're not working and hitting the next highest tax bracket isn't an issue, you can pull more money from a traditional IRA or 401(k) account.
This type of tax diversification is one of the primary reasons people choose to put some of their money in a Roth IRA, or convert to such an account.

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GETTING PERSONAL: Wealth Transfers for Family Businesses

NEW YORK (Dow Jones)--The same weak economy that has stymied some family businesses' plans to sell their operations makes conditions ideal for transferring ownership within the clan.

"With business valuations depressed and interest rates near historic lows, owners can use wealth-planning strategies, such as trusts and other techniques, to pass bigger slices of their businesses to their heirs more cost-efficiently," says Joseph Fahey, the national director of business planning services for Wells Fargo & Co.'s Private Bank.

This can be achieved through a combination of tax-free gifting and sale techniques that freeze the value of a business at today's trough in the business cycle, advisers say.

Cornelia Spring, Northeast Head of Wealth Advisory for J.P. Morgan's Private Wealth Management, says she advises business owners on setting up short-term grantor retained annuity trusts, or GRATs, which are used to pass assets to heirs free of gift and estate tax. If shares held in the trust appreciate at a faster rate than a special Internal Revenue Service rate--which is 3.2% in November--then the upside value goes to the heirs at the trust's maturity.

"It's a way to transfer ownership to the next generation. There is no limit on how much or how often you do this, so it can be a powerful tool if repeated multiple times," she says.

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Posted by Kelsey Hoffman

Why Most Twentysomethings Don't Understand Personal Finance

By: MIA SAINI (OC), HARBUS Board of Directors & Section Representative

Posted: 11/9/09

Planning a wedding? Worried about how to pay off your student loans? Debating if you want to buy or rent an apartment next year after graduation? These are all decisions that can be made if one has a command of his or her personal finances and financial goals, both in the short-term and long-term.

As a personal finance junkie, I am often asked how I developed my knowledge on personal finance when I never had formal training during all my years of being schooled or even while I was working at Goldman Sachs. My knowledge of personal finance was built by various encounters with really smart financial experts I met after I graduated from college and was about to enter the "real world." Because there were very few fun resources out there to teach me this stuff, I found learning the information to be very boring but nevertheless extremely useful to how I planned to live my one wild and precious life.

When I found out one of our classmates, Alexa von Tobel, decided to take a leave of absence from HBS to pursue her dream of launching a website to make personal finance fun and exciting, I was thrilled for future generations of smart twentysomethings to have the ability to finally develop a mastery over their finances.

Right before Alexa graduated from Harvard College in 2006, she was sitting around a table with a group of friends, discussing how ridiculous it was she had never had a single class on personal finance. Ironically, Alexa was going to work as a trader at a hedge fund and had just deferred Harvard Business School for two years. Similar to me, Alexa realized the dearth of her personal finance knowledge was extremely apparent. After scouring various resources, she kept finding herself dissatisfied with what was readily available. She found that most personal finance education tools rarely began with the basics and that none spoke directly to her.


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Posted By: Amy Nightingale

Debt Management

By Quang Nguyen




Many people say that the average Americans are loaded with the credit card debts. According to CardWeb.com, each American household has at least $10,700 credit card debt on average. However, having debts on your balance sheet not specifically a bad thing.

If you borrow for a home or college tuition, it usually makes good sense. But before you borrow money, just make sure that you can afford to pay back and try to find the best rates. Besides this, in common sense, most of the debts are bad. So always rely on the credit card to pay for things you don’t really need is not the right thing to do. So how to make your debts under control?

First of all, you can get a handle on your spending, which means make sure you think carefully before any purchase --- Do you really need the product or service? Can you afford it?

Secondly, always pay off your highest interest rate debts first. The key to get out of debt in an efficient way is to pay off the debts which charge the most interest. Once the highest debt is paid down, move to the second highest debt, and so on. In addition to this, watch where you borrow is also an important factor to make your debt under control.

Finally, there is one more thing to keep in mind --- get help as soon as you need it. If you think you are not capable to pay off your debt on time. You should start to seek for help immediately before it turns to be a financial disaster. There are many reputable debts counseling agencies may assist you with mange your debts and improve your financial situation. So don't feel hesitate to get advices from these professional agencies.

References:
http://www.mint.com/blog/train-wreck/debt-management-the-bike-that-crashed-me-financially/
http://www.cgmahq.org/Assistance/Programs/Deb.htm
http://cardweb.com

Make money in 2010: The economy

Posted by Quang Nguyen




You may not feel as if we're out of the woods yet. But the consensus among the 50 leading economists regularly surveyed by the Blue Chip Economic Indicators is that the recession is indeed over, and from a technical standpoint at least, probably ended in the summer.

You're right, though, to feel less than sanguine about this pronouncement. The majority of those economists put growth at just 2.5% next year, and several believed 1.7% was closer to the mark -- well below the U.S. long-term average of 3%.

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Making College Affordable

By Linda Stern

WASHINGTON (Reuters) - The college application process that dominates senior year for many high school students is always stressful, but this year it's even worse.

A report from the College Board shows that college costs continue to rise far faster than parents' salaries: In-state public schools are pushing $20,000 a year and it costs double that to attend the average private college.

At the same time, college savings account balances have fallen, other costs have risen as many parents face unemployment, debt problems and other financial challenges. And more students than ever are applying for college, providing increased competition for the most coveted seats and scholarship programs.

Feel discouraged yet? Don't be. Instead, remember that there are many, many paths to happiness and success that don't run through Harvard yard or Yale's central campus or even straight through any four-year program.

Go out and talk to folks in their mid 20s, and you'll discover many, many people in great jobs and happy relationships who transferred into (and out of) those top name brand schools, took pre-college breaks, started at community colleges, finished at their state schools or took myriad other routes to their current situations.

So avoid worrying and avoid the stress-spewing mother (you know who she is) who waits for you in the parking lot at all of the soccer games wanting to know how your kid is doing on his apps.

Click here for more information

Could the Supreme Court Boost Mutual Fund Fees?

Posted by Jonathan Tse



By David Bogoslaw

Investors in mutual funds may need to brace themselves for higher fees in the future if a case under review by the U.S. Supreme Court results in a substantially different legal standard for judging whether or not fund advisory fees are excessive. On Nov. 2, the Supreme Court heard oral arguments in Jones v. Harris Associates LP, in which the plaintiffs—individual shareholders in the Oakmark Funds—claim the mutual fund adviser, Harris Associates, violated its fiduciary duty by charging them fees that were double those the adviser charged institutional investors.

What complicates the case is the fact that Chief Judge Frank Easterbrook of the Seventh Circuit Court of Appeals, in ruling for the defendants, rejected Gartenberg v. Merrill Lynch Asset Management, a decision by the Second Circuit Court of Appeals in New York in 1982 that has served as the legal standard by which all excessive-fees cases have been evaluated for nearly 30 years.

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Strategy on Buying Health Insurance

By Quang Nguyen




Insurance is what most people planning to get when living in the United States. Since the medical cost is too high, it is important to get the right insurance. Especially with the current economy, with the increasing amount in medical cost, Americans should look for plans best fit for themselves and prevent from looking for ones with lowest premiums. Choose the plan that’s most important to you.

You can begin with the group plans from your employers. Group plans are usually a lot cheaper than individual plans. I suggest you should get insurance and health benefits from your employer even if they might pay you less than someone else that do not offer benefits.

There are 3 main types of insurance plans you can select. The first one is health maintenance organization (HMO). The second one is preferred provider organization (PPO). The last option is high deductible health plan. Fee-for-service still exists, but the use of it has been decreasing.

Choices are limited if you choose HMO, because you can go to doctors that are associated with HMO’s network. The advantages are that you don’t have to pay deductible and co-payment, and it is a low-cost option.
For PPO you can go to the doctors without its network and only pay a small portion of co-payments. High deducible health plan allows deductible to be higher. The plan is connected with a health savings account. You can save pretax amount in the savings account and withdraw it when you need to pay for deductibles.

In conclusion, it is important to find the insurance plan that fits you. Different people have different needs. A single mom might have a different insurance plan than a senior citizen. You should talk to your doctors before purchasing an insurance plan in order to make sure it covers your needs.

References:
Source 1
Source 2
Source 3

Be a smarter charitable giver

Posted by Quang Nguyen




When it comes to charitable giving, some well-intentioned moves can backfire.

Here's how to make sure your donations have the biggest possible impact, whether you're giving on a large scale or a small one.

Don't be swayed by a pretty face. You like to think you give money based on the worthiness of a cause, but less elevated emotions are often involved. According to a 2005 study led by economist John List at the University of Chicago, people are far more likely to give when a fundraiser is an attractive woman rather than a plain Jane.

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Where is the economy going?

By Jonathan Tse



We are now in the worst recession since the Great Depression. Although the economy seems to be recovering, increasing at a 3.5% rate in the past July-September quarter, the unemployment rate continues to rise. For the first time since 1983, the unemployment rate has hit double digits. In October, the unemployment rate was 10.2, representing almost 16 million jobless Americans. October was the 22nd consecutive month of rising unemployment, which is the longest record of growing joblessness in the past 70 years. The unemployment rate is expected increase beyond 10.5 percent because employers are still reluctant to hire. Demand for oil and other commodities have also been on a decrease as consumers are still not confident in the market and are not willing to spend. Oil prices have dropped 2.8% in October during the same time payrolls for workers dropped $190,000. President Obama signed a new unemployment insurance bill last Friday that not only aids homeowners and the jobless, but also aids businesses. This bill allows businesses to recognize their losses from 2008-2009 and to apply them to any of the past 5 years, before 2008, so they are able to get tax refunds on the taxes they paid in those five years. The only catches are that companies who have accepted TARP money are not eligible and tax refunds for the fifth year are reduced by 50%. This will benefit companies who have suffered the most during the recession.

http://www.google.com/hostednews/ap/article/ALeqM5gNiyJ905Ho0Ur96V2TQhsBX19lGwD9BQ6PG00
http://www.bloomberg.com/apps/news?pid=20601087&sid=a_GNhLXtDs0M&pos=2
http://money.cnn.com/2009/11/05/news/economy/tax_breaks_for_business/index.htm?postversion=2009110611

Daycare is A Major Cost for Working Parents

By: Sara Sindelar

When people start up a job they don’t always factor in the cost of childcare for the future. When you have both parents working and their children are under school age, daycare is a must. If it is a nanny, which can get very expensive, a public or private day care or a family member who will help out you need an option. Daycare is a must for working parents to keep their jobs. With rising fees like licensing and inspections that are being proposed are causing fear among parents. The issue of daycare varies across the nation. Some states are fighting for the best option for the residents while others are raising fees and getting strict on laws.

Daycare today is growing in cost averaging from $250 to $1250 per month. Some companies offer daycare but costs are still high. When looking for a job daycre may be something you think about in your compensation package. Another way to discount your daycare costs is to see if your employer offers a tax-free spending account for childcare like most offer a health care tax free spending account. Though this is not something recent graduates may be looking into in a job it is something to think about for the near future.

http://www.washingtoncitypaper.com/blogs/citydesk/2009/11/05/daycare-fight-continues-union-files-new-lawsuit/

http://www.kgun9.com/Global/story.asp?S=11404009

http://www.babycenter.com/0_daycare-centers-how-much-do-they-cost_6056.bc

The downside of debit cards

Posted By: Sara Sindelar

Rising rates and soaring credit-card fees mean many are switching to debit cards. But there are risks to using debit cards as well.

By Gerri Willis, CNN personal finance editor

November 2, 2009: 3:40 AM ET

NEW YORK (CNN) -- Out: credit cards. In: debit cards. As more and more Americans shun traditional credit cards, they're turning to debit cards. But you should know there are downsides to debit cards too.

1. Security

This can be a big issue -- You know that if your credit card is stolen, you're not responsible for unauthorized charges over $50. But if your debit-card number is stolen, you have fewer protections. First off, you have to report any misuse within two days to get the same $50 limited liability. If you miss that deadline but you report the loss or misuse within two months, you could be on the hook for up to $500. After 60 days, your liability is unlimited. Card issuers do have different policies though-so make sure you go through the fine print says Curtis Arnold of cardratings.com.

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How to Save on Health Insurance

By: Nicole Nelson

With open enrollment for many plans starting soon, it is important to know how to chose and maximize your health insurance plan. This may mean changing such things as deductibles, co-pays or co-insurance. It could also mean that you should start buying your own insurance, or switch to your spouse’s plan. In determining whether you should sign up for a high or low deductible plan, you should consider how many times you use your coverage during the year. Usually higher deductibles have lower co-pays and lower deductibles have higher co-pays. Therefore, if you are financially stable and a relatively healthy person that doesn’t visit the doctors that often, a lower deductible plan may be a better idea. Also, flexible spending accounts have become easier to obtain and more beneficial. Some employers may also let you have until March of the following year to use these funds. Flexible spending accounts are a good idea because these funds are taken from your pay pre-tax, saving you tax dollars. Also, in determining health care one should look into an HSA (health savings account). These are usually only offered if you have a high-deductible plan. Not all high deductible plans offer an HSA though. There are many options in choosing a health insurance plan. Therefore, all options should be considered in finding the best option for you.

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The Cost of Ending A Marriage

By, Meredith Anderson

Many wouldn't usually think about divorce as a business, however the shocking truth is that divorce is $28 million dollar a year-industry in the United States. The average divorce is about $20,000. When we think of divorce we think of how sad and emotional it is for everyone involved. We tend not to think about the finical price tag on happiness.

When a relationship is bad and you want to get out of it to be happy, its unfortunate that money can be a reason that keeps you in it. Its ironic how much money can break up the marriage in the first place but keep people in the marriage because the cost of divorce is more then they can afford.

So how does it get so expensive? In most divorce cases lawyers and other legal expenses are required. Lawyers are extremely expensive and many times two are needed. We tend to forget that with divorce comes separate living situations, so many times a new home must be obtained. Finally one of the hardest and most expensive parts of divorce is when children are involved. Child support, alimony, and other expenses will add up for years to come. You can leave your spouse but you have legal responsibilities to your children.



Sources:

http://money.cnn.com/2009/10/30/pf/marrying_finances.moneymag/?postversion=2009103004




http://www.bankrate.com/brm/news/advice/19990903a.asp



http://www.nytimes.com/2009/10/24/your-money/24money.html?em

Mo' Money Mo' Problems for Antoine

By Jameel Murray

Besides reading of Nicholas Cage squandering his money, there have been numerous reports of celebrities going broke. One recent report has been the unfortunate story of former NBA star Antoine Walker. According to the Boston Globe, Antoine Walker owes over $4million dollars to his creditors. Walker faces up to four years in prison if he is convicted on several felony charges for writing bad checks. Over Walker’s career in the NBA, he earned over $110 million dollars including several endorsement deals. Walker is yet another example of a celebrity who did not manage his money correctly.

According to several sources, Walker was a big spender. He purchased a suit for each game, gambled hundreds of thousands of dollars, and supported 70 friends and relatives. Some also say that Walker’s driveway reflected an auto showroom, filled with Bentleys and other luxurious cars. Walker also picked up the tab on several team dinners, increasing the former All Star’s debt by hundreds of thousands of dollars. The reason for Walker’s situation basically is a consequence of Walker not investing his money wisely. Had Walker taken a course or two on financial planning, he may have been able to live the rest of his life out of debt. Because he is extremely out of shape, he may never get a chance to play on an NBA team to pay off some of his debt. Walker’s only other option is to take his game overseas.

Sources: http://www.sportingnews.com/blog/the_sporting_blog/entry/view/40285/antoine_walker_picked_the_wrong_place_to_do_too_much_the_real_world

http://www.suntimes.com/sports/basketball/1851241,antoine-walker-nba-broke-28.article

http://dealbreaker.com/2009/10/aw.php

Poor Nicholas Cage. Literally.

It turns out that Celebrities are just like the rest of us- they hate paying taxes just like all the rest of us do. The latest celeb to fall victim to a public personal-finance debacle is Nicholas Cage. According to sources, Cage owes about $6million in unpaid taxes from 2007 to the IRS. He owes more than $350,000 for back taxes from 2002-2004.

Cage's financial troubles are due to speculative real estate investments and accounting techniques. He is now involved in a $20 million dollar lawsuit. He is being forced to sell major assets and investments at a signicantly lower price which he will take as a loss. Cage is faced with huge tax liabilities because of one of his accountant's incomeptence, misrepresentations, and recklessness. His biggest mistake was a failing to file his client's income taxes.

In order to rake up some cash to pay all of his taxes, Cage is being forced to put the following properties up for sale:

His Bel Air mansion for about $10 million.

His Las Vegas digs, also for roughly $10 million.

A $3.55 million mansion in New Orleans' Garden District. Described as "haunted."

A 24,000-square-foot $12 million mansion in Rhode Island.

Source One

Source Two

Source Three

Posted By: Amy Nightingale

Marrying finances - for the second time

Posted by: Nicole Nelson

Written by: Karen Cheney

When Kimerby and Tony Simmons were married last month at a vineyard in the foothills outside Atlanta, they participated in the African-American tradition of jumping over a broom - an act symbolizing their entrance into a new phase of life together.

For Tony, 41, this was the second time making such a leap, his previous marriage having ended in divorce. That breakup "put a big dent in my finances," says the software sales executive. "I thought there was no way I was getting into another relationship."

But then, on a flight from Chicago to Atlanta, he met Kimberly. And, soon, he fell in love. "It was the flight that changed our lives," says Kimberly, 39, for whom this is a first marriage.

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The downside of debit cards

By Gerri Willis
Posted by Jameel Murray

NEW YORK (CNN) -- Out: credit cards. In: debit cards. As more and more Americans shun traditional credit cards, they're turning to debit cards. But you should know there are downsides to debit cards too.

1. Security

This can be a big issue -- You know that if your credit card is stolen, you're not responsible for unauthorized charges over $50. But if your debit-card number is stolen, you have fewer protections. First off, you have to report any misuse within two days to get the same $50 limited liability. If you miss that deadline but you report the loss or misuse within two months, you could be on the hook for up to $500. After 60 days, your liability is unlimited. Card issuers do have different policies though-so make sure you go through the fine print says Curtis Arnold of cardratings.com.

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Senior's Benefits of 're-tiring'

Posted By, Meredith Anderson

People who began collecting Social Security at age 62 and restart their retirement benefits at 70 would get about 76% more a month. The catch is that they must repay what they had already received.

By Kathy M. Kristof Personal Finance
November 1, 2009

The Social Security Administration recently announced that retirees would get no cost-of-living adjustments this year -- and maybe not even next year -- because the inflation measure it uses to determine them has declined for the first time in more than three decades.

Congress and the administration are working on legislation to provide seniors a $250 consolation prize, a one-time check that would amount to about 2% of the average senior's benefits. But retirees may be able to do far better than that by taking advantage of a loophole in the Social Security law. Using this loophole, which allows you to "restart" your retirement benefits years after you've retired, can be risky. But if you're healthy, have some savings and are under age 70, it may well pay off in spades.

Someone who originally retired at age 62 and "re-retires" at 70, for example, would boost monthly benefit payments by 76%, said Brett Horowitz, a certified financial planner with Evensky & Katz in Coral Gables, Fla.

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How to survive this holiday season

By Alma Zhumagulova

Results of numerous surveys conducted on this year’s holiday spending plans show that this year many of the respondents intend to spend less than last year. Everyone is looking for large sales discounts and coupons (at least 20%), free deliveries and competitive pricing. In response to that many retailers are already having sales and discounts, for example, Wal-Mart and Target are decreasing their prices on toys and other gifts.
The top gifts of this holiday season are clothes and small but smart electronics such as notebooks, MP3 players, e-Books etc. Gift cards are promising to be one of the most popular gifts of this season averaging at $35 per card as found by Deloitte’s 24th Annual Holiday Survey. The top store destinations of this season are department stores, grocery stores, internet electronics stores, and candy and sweets stores.
During these difficult times many of us are struggling to make presents to all the loved ones while not overspending when the money is already tight. The right decision is to develop and stick to a certain holiday budget and a gift list. To avoid excessiveness one should set aside some amount of cash for holiday gifts so that one would always remember that the budget is restricted when shopping for gifts. Starting the holiday shopping early on is another good tactic; it gives more time to comparison shop and helps avoid last minute rushes. Now is a good time to get more creative with gifts: make them yourself, arrange fun gift exchanges with family members and friends, organize parties-as-gifts, and make group gifts to a family. Lastly, if you are out of options, give gift certificates for smaller amounts that although being small give the recipients a choice to get what they want.

Sources:
http://www.nacsonline.com/NACS/News/Daily/Pages/ND1102094.aspx
http://abcnews.go.com/Entertainment/WireStory?id=8948891&page=2
http://www.minyanville.com/articles/shopping-retail-consumer-walmart-sales-target-hasbro-mattel-limited-clothing-toys-holiday-cadbury-books-clothes-amazon-apple-electronics/index/a/25242
http://www.alvaradopost.com/articles/2009/10/29/community/doc4ae9f02f096bb757915954.txt

10 Tips to Save on Holiday Gifts

Given the shaky job market, holiday budgets are tighter this year. According to a survey by PriceGrabber.com, 53 percent of consumers are planning to spend less on gifts. Retailers are anticipating greater demands during the holiday season because of higher-than-expected Halloween purchases this year, says Ken Burke, the founder of MarketLive, which does E-commerce research. Already 30 percent of those surveyed have begun their holiday shopping, with 22 percent having started in October. So to avoid the winding lines and sold-out merchandise, here are 10 tips to save you time and money as you kick off your holiday shopping:

1. Comparison-shop online
Left with excess inventory last year, retailers are going to sell fewer items in stores this holiday season. As a result, more people are going to go online for research, price comparison, and convenient shopping, says Burke. In PriceGrabber.com's survey, 70 percent of consumers said they're planning to research and comparison-shop online for the holidays. One way to do that is through sites like ComparisonShopping.com, which aggregates product search results from the 10 leading websites for price-comparison shopping, including BizRate, PriceGrabber.com, NexTag, and Shopzilla. These sites have vendor prices, reviews of vendors and items, and product descriptions. Also, visit FreeShipping.org, which provides free shipping coupon codes for more than 1,710 stores. Other websites have threshold free shipping, where shipping doesn't cost anything after a minimum purchase; Amazon.com, for example, provides free shipping for members whose purchases are over $25.

Click here to read more.

Posted by Kelsey Hoffman

Personal Finance: Investing by gender

Men are from risk; women are from caution

SOUTH BURLINGTON — Women and men have different investment habits: Women tend to be more conservative while men are more willing to risk their savings with an aggressive portfolio, a longtime financial adviser said.

“Women, as a whole, are conditioned to seek safety and avoid risks,” said Heidi Clute, owner of Clute Wealth Management in South Burlington. “It’s part of our upbringing.”

“Most women tend to be a lot more conservative in asset allocation strategies,” said Clute, who has been advising clients on financial matters for 29 years. “Women tend to be more defensive in where they invest their money. And men tend to be more aggressive.”

Women on average live longer than men — meaning savings must be stretched for additional years. Women typically earn less than their male counterparts, prompting them to invest more conservatively, Clute said.

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Posted by: Amy Nightingale

Pay less to stay warm this winter

Posted by Jonathan Tse


Money Magazine) -- This year you can score a rare recession-induced break on your energy bill: The combination of a weak economy and a production boom has dropped the cost of heating with natural gas to a six-year low and is keeping a lid on other heat sources as well. But you can still save more. These questions will help you figure out the most cost-effective ways to keep out the cold.

How much will I pay for heat this winter?

If you use natural gas, you'll spend $434 to $1,044 to keep your home toasty, according to the Energy Information Administration. That is 3% to 22% less than last year. You'll also catch a break if you use propane, which is a byproduct of natural gas, since propane prices are forecast to fall 12%. If you heat with oil, you won't be so lucky: Depending on where you live, you'll spend $912 to $1,722, or 0.3% to 18% more. Electric heat costs will range from $792 in the West to $1,526 in the Northeast.

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How to Avoid Dumb Investing Mistakes

By: Lily Mei

Due to recent economic downturn, it has affect many investors decision to moved their money into cash or bonds this time around. To avoid any as I call it “dumb” investing mistakes, the best remedy as Christopher Long, a certified financial planner recommends is to set up a “play” account where you can trade the market to your heart’s content without harming your long-term investments.

He also states to transfer at least 5% of your total assets to an Independent Retirement Account. The reason behind transferring to an IRA account is that with this account any gains you incur buying and selling securities will be shielded from taxes until you withdraw the proceeds, hopefully after you have already retired.

Long also mentions that the only downside with this account is that in the case where you do incur losses, you won’t be able to use them to offset gains in other accounts, as you would be able to do so if you held securities in a taxable account.

Setting up the “play” IRA accounts seems to work particularly well for couples. Long often says that he “encounter husbands who are new and market junkies and incorrigible traders, but whose wives are anxious to take a much more hands-off approach to investing.” With this play account, it gives the husband the freedom to trade and their wife the comfort that in the worst-case scenario, the damage will be limited.

Sources
http://www.moneymorning.com/2009/10/09/stock-pickers-market/
http://portfolio-management.suite101.com/article.cfm/common_investment_mistakes_to_avoid
http://seekingalpha.com/article/54628-10-investment-mistakes-to-avoid

Personal Finance: Credit card companies pump up rates, fees

By Claudia Buck
Posted by Alma Zhumagulova

If you've got a credit card, you've likely been zinged already.

Higher interest rate? Yep. Lower credit limit? That, too. New fees for late payments? Absolutely.

In the months since Congress clamped down on what it deemed as "unfair and deceptive" credit card practices, dozens of credit card companies have been busily hiking fees, rates and penalties in anticipation of stricter rules.

In the last few weeks alone, Bank of America tacked annual fees of $29 to $99 onto some cards and Citibank jumped some annual interest rates to nearly 30 percent.

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Barter for the Services You Need

By: Jessie Bruyn

Camille Tominaro's vacation home near Hunter Mountain in New York could use some new floors and a good paint job, but she doesn't have the money to hire a professional to do the work.

So, to get the job done, she is using another form of currency: her house. In exchange for getting the home improvements done, Ms. Tominaro is offering painters and carpenters a free stay in the vacation home.

Cash-strapped consumers are increasingly bartering to get needed products and services. If you're considering bartering, here are a few things you should know:

Web sites that allow people to post ads for barters, such as Craigslist.org and U-Exchange.com, can help you track down someone who provides a service or product that you want and needs what you have. You can place an ad detailing what you're looking for and what you have to offer in return. You also can respond to an ad you think would be a good fit.

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Donate Your Stuffs

posted by Shawn Gao
When we entered supermarkets, like Wegmans and Price Chopper, in the account desk, there were sign that show we donate money for every time we shop there. These signs are trying to let us know that many hungers need our help. And there maybe something we can do for them. For example, we can donate something for them, In Syracuse, there are many places accept people’s donations. At the end of every term, students can donate their needless books and clothes in the students’ centers. Also, there is a donation center in Erie Blvd where may accept a variety of things that people don't want to have. During economy recession, many people are hungry to death. For people who don't desire money and food so much can do something to help out the poor. After the Halloween, people may have a great amount of candy left. For these candies, people can donate these candies in the original wrapper to those donation centers. Before donations, remember to call the centers to make sure whether they accept those candies or not. People can do something good for the poor with some institutions. Ronald MacDonald House Charities, which includes a program that provides housing for parents of children staying in nearby hospitals. Some people may need help from others. Let us donate something.
1.http://online.wsj.com/article/SB125702566786620951.html
2.http://online.wsj.com/article/SB125694047773419513.html
3.http://online.wsj.com/article/SB125702415622320915.html