Business & Investing

Thanks to the subprime mess, and the huge losses in the housing market, banks have been more reluctant to lend money. Although I think the credit crunch is greatly exaggerated, if you want to get a loan, you need to be able to show that you are credit-worthy. One of the main things you can do to help your cause, is to take care of your FICO score. Here are some things you can do (and avoid doing) to rack up points.

Things to do:

• Pay your bills on time. Your track record for making timely payments accounts for about 1/3 of your FICO score.
• If you are having trouble making ends meet, contact your creditors.
• Use different types of credit. Having a blend of revolving credit, like credit cards, and installment loans can help boost your score.
• Once a year you can get a free credit report from www.annualcreditreport.com. Here you can check for any mistakes and dispute them.

Things not to do:

• Don’t ...

In my post from a couple days ago, detailing the Investment Advice Of David Swensen, I thought there was a good lesson in diversification. I thought I would breakdown the different ways you can diversify your investments, and hopefully avoid getting hurt in an unstable market.

• Owning many different stocks: If you have the bulk of your money in company stock, and your company tanks, you could easily lose a large chunk of your savings. If you have a diversified portfolio you take away much of that risk. One way to own many different stocks is through mutual funds, index funds, and exchange traded funds.
• Own stocks in different sectors: Energy companies have been doing great lately, but financials and home builders have been hurting. If you were heavily invested in the wrong sector recently you would have likely seen your savings ...

I have been contemplating a cross-country move from where I live in Arizona, to South Florida for the last couple of months now. I haven’t officially decided what to do, but I know that if I go, selling my house will probably not be easy. The market here has seen home prices dropping, and taking much longer to sell than in the past.

Lately I have been fixing various things around the house, and making any improvements I can think of. New paint, landscaping, new flooring, bathroom and kitchen upgrades are kind of a given when it comes to getting top dollar for your home. In doing some research for cheap, but effective home improvement tips, I landed on THIS PAGE, which details some recession-proof home improvements.

As flipping has stalled, and many would-be sellers are sitting out the market, they’re turning to green changes as a way to ...

There is a really great piece from NPR about David Swensen, and how he managed to grow Yale’s endowment at an average of 16.8 percent a year over the past two decades. Swensen’s basic formula for creating an investment portfolio for good returns while managing risk:

• Domestic Equity (30 percent) - Stocks in U.S. based companies listed on U.S. exchanges.
• Emerging Market Equity (5 percent) - Stocks from emerging markets across the globe. Brazil, Russia, India, China, etc.
• Foreign Developed Equity (15 percent) - Stocks listed on major foreign markets in developed countries, such as the UK, Germany, France, and Japan.
• REITs or Real Estate Investment Trusts (20 percent) - Stocks of companies that invest directly in real estate through ownership of property.
• U.S. Treasury Notes and Bonds (15 percent) - These are fixed-interest U.S. government debt ...

I was just recently doing a bit of traveling. If there is one thing I learned all over again, it’s that vacations can be expensive. Whether you are just trying to get away for the weekend, or planning an all out adventure, there are some simple things you can do to stretch your money.

• Be flexible. The more flexible your schedule, the more opportunities you’ll have to save. You’ll be able to take advantage of airline ticket sales and the cheapest days to travel. It’s usually a better deal to travel during the week than over the weekend.
• Find deals. Saving money on airfare and hotels can be as simple as looking around at a few travel sites. Hotwire, Travelocity, Expedia, Orbitz, ...

There is a good article at Kiplinger.com by Erin Burt, about the lessons she learned from being broke. Times are tough for a lot of people right now, so hopefully everyone can learn these lessons and improve their financial situation.

The lessons she mentions in the article are:

• Know your priorities. Learning early on how to prioritize and to sort our needs from our wants.
• Debt is a vampire. Learning quickly how debt can steal your money. Making the minimum payments but never making much headway.
• Have a cushion to fall back on. Life is full of unexpected expenses. If something comes up when you’re living paycheck to paycheck, even a small expense can mess up your finances in a hurry.
  
• Set goals and tune out peer pressure. See your situation ...

Record numbers of foreclosures, rising gas and food costs, and just overall tough times have seen many people dipping into their 401(k)s to make ends meet. Although it may seem like the place to go when you’re facing serious hardship, there are some things to consider before you raid your retirement accounts.

The disadvantages of taking a hardship withdrawal:

• Taxes. If you are under 59 1/2, you will have to pay income taxes on the money you take out. You will also have to pay a 10 percent early withdrawal fee.
• Interest. If you take money out of your 401(k) early, you won’t be able to take advantage of the compound interest on that money. Taking out a small amount now can mean forfeiting huge amounts when you are ready to retire.
• Future Deposits. Most employers will not allow you to make fresh 401k contributions for six months ...

According to Russ Alan Prince and Lewis Schiff, middle-class millionaires now account for 10% of the U.S. population. In doing research for their book The Middle-Class Millionaire, they studied almost 4,000 households to better understand attitudes, values and purchasing patterns.

Some of the interesting things they found out were:

• 7.6% of American households, or 8.4 million households are middle-class millionaires

• The average middle-class millionaire works 70 hours per week

• Middle-class millionaires are five times more likely than the average worker to say they are always available for work

• 89% believes that anyone can attain wealth through hard work

• 62% believes that networking, or knowing many people, is the key to financial success

• Nine out of 10 ...

I was listening to a great piece on NPR (National Public Radio) about the weakened condo/housing market, and especially the weak market in Miami. I’ve visited Miami many times within the last few years, and since my brother is a real estate attorney there, I feel like I’ve seen what they’re referring to.

A bit from the article:

Dozens of new high-rise condo projects are going up downtown. At the same time, foreclosures have doubled, sales have slowed to a trickle, and prices are dropping.

These conditions have attracted a new type of opportunistic buyer to Miami — the “vulture investor.”

Peter Zalewski, who runs a Web site and consulting company called Condo Vultures, says the term doesn’t have a negative connotation.

“Vultures don’t kill, they clean up,” he says.

These “vulture investors” are able to come in and pick up properties at a steep discount ...

The largest initial public offering (IPO) ever in the U.S. is set to take place within the next month. Visa is set to sell almost a half-billion shares, and is expected to begin trading around the $40 a share mark. Although I would need to do an awful lot of research before buying shares myself, there are some reasons I think this may be worth looking into.

• It’s a large IPO - Typically large IPOs don’t rocket higher the moment they start trading. So investors won’t need an exclusive brokerage account to get a deal on shares ahead of time, as with most IPOs.
• Best of breed - It’s a chance to buy stock in a company that is one of the world’s most recognized brands. It has more cards in circulation that any other credit card company, and processes far more transactions.
• Good pricing - Investors should get a decent price because Visa’s owners are launching this massive initial ...