Courtesy of Mint.com and Wallstats:
Take a look. There is a lot about the American Monetary System that most folks don’t understand!
From over at WalletPop, an interesting graphic showing changes in the value of a few common items over the last decade.
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With spring in full swing and summer just around the corner, garage sales are popping up all over the place. If you haven’t had one before, you’ve driven by them. Generally on a weekend morning, if you are out and about early enough, you will see signs all over the place for yard sales, garage sales, boot sales, estate sales… The list of names goes on but the gist is always the same. A garage sale is a great way to get rid of items that are still in good shape that you don’t need or use anymore while bringing in a few extra dollars – seems like a financially healthy thing to do to me!
However, there are tricks that can make sure that you don’t end up with that pile of junk still sitting in your front yard at the end of the day. Obviously, some factors are beyond your control – if it decides to pour rain on the day you were planning, or if a construction crew blocks off access to your neighborhood, or any of a dozen other things – but there are still several things that you can do to ensure that your sale goes well!
- Spread the word. Getting word out that you will be hosting a garage sale is key to being able to sell off your stuff. Tell your friends, neighbors, local associations, post on local supermarket boards, craigslist, in the classifieds… The number of ways you can spread the word is endless. The more people that know about your yard sale, the more people will come – and the more you will sell.
- Ensure you can be found – signs, signs, signs! If you can’t be found in a car, getting the word out won’t do you any good. Signs need to be posted from the nearest major roads; if you have multiple entrances to your neighborhood, post at all of them! Make sure the letters are large (6-8 inches at least!) and well-written in high contrast to the surface. Black marker on a white poster board is a classic for a reason.
- Mark a price on everything. If people don’t know how much is being asked for a thing right away, many (myself included!) might hesitate to ask. Every person that doesn’t ask is a lost sale. Ensure that prices are clearly marked on items and visible. You don’t have to slap a sticker on every single item – you can just label a table ‘All Items $5’ and get the same effect.
- Display in a neat and organized fashion. There’s nothing worse than having to root through someone’s junk pile hoping to find something you are looking for. Few people will be willing to do so, and will just pass on to the next sale. If you’re selling clothing, sort it by type, size, and so on. Separate items in a logical fashion and you are sure to sell more!
- Say hello, but don’t hover. Greeting people is a business (literally – Wal-Mart employs thousands of people to do just that!) and an art form. Garage sales are too. Be courteous with a hello, offer to answer any questions, and then LEAVE your customers alone to browse. There’s nothing worse than someone breathing down your neck or watching your every move when trying to browse.
- The more the merrier. Garage sales with more items will have more people willing to stop. If you can get other families involved, that will be ideal! Which are you more likely to take a trip to and look around – a table with three or four items on it, or a yard full of interesting stuff?
- Provide coffee or kids with a lemonade stand. Both of these give people a reason to linger. Remember, a garage sale is a business. Retails stores around the globe know that the longer someone is in their store, the more they are going to buy! Beverages, donuts, even light music can improve the atmosphere and ambiance and make people want to stay. Plus, a lemonade stand could be a great chance for children to develop social skills and make a few dollars while doing so. You can even set them up with a savings account with their earnings!
- Have change. Many a sale has been lost because there wasn’t correct change and neither party was willing to budge the difference. Veteran garage sale buyers may travel with wads of twenties – be ready to break those! Fifty dollars in small bills and quarters (or, if you price everything intelligently, skip the quarters!) should be enough for most sales.
- Allow haggling. People love to feel like they are getting a bargain, and haggling can be a pleasure in and of itself. Putting prices on things will allow those who would rather not to simply pay what you ask, but allowing haggling will let people feel that they have gotten a great deal – and happy people buy more stuff!
- Know what to do with what’s left. If there are any items of value left, try using eBay or a similar auction site, or saving it for the next sale. If you really want to be done with your stuff, Goodwill or the Salvation Army are just two of many options – you are donating goods to support those in need and, if you want to, you may qualify for a tax write-off for doing so.
Good luck with your sales! Let me know of any other tips and tricks you have for making a garage sale a great success.
Everyone has times when they have a need for money quickly. In my previous article, I wrote about the need for an emergency fund – a cushion of readily accessible money for you to fall back on in case of unexpected expenses. Not too long ago, I needed money quickly for some of these unwanted and unexpected costs. Fortunately, I had my emergency fund! Having one of these prepared can prevent you from having to worry about financial arrangements at the most inopportune of times!
However, not everybody has an emergency fund, nor will everyone have one that is full when they need it. In situations like this, it is quite possible that you will be forced to rely on other methods to procure cash – by which I mean money you can spend immediately, not actual dollar bills – quickly.
If this unfortunate situation arises, there are a variety of sources available to you. Credit cards are often set up so that they can offer cash advances at ATMs. Payday Loans are a source many people use for bills while awaiting their next paycheck. Pawnshops are another option, assuming you have items of some value. Obviously, if you are lucky and the amount you need is small, friends and family may be an available source – just don’t rely or depend on them heavily, and remember that they should be paid back just like you would any other lender (if not more quickly!).
Now remember – I only advocate using any of these in a TRUE emergency. Wanting that new video game or pair of shoes is NOT a good reason to dip into an emergency source of cash! If that is what you need, add them to your budget for the next month and start saving elsewhere. These sources come with hefty fees, interest, and other costs (irritated friends being one!), so beware. However, if you really do need the money in a pinch, they can save you a lot of grief.
Life often throws us around unexpected curves. Cars break down, water heaters blow up, medical expenses pile up, jobs lay people off… The best that people can hope to do is to be ready for the little things that come up – and be prepared ahead of time for the big ones too. Having a stash of readily accessible money can really help smooth even the worst situations.
Emergency funds are something that should be kept in everyone’s financial regimen. These are often among the most neglected aspects of personal finance. It can be very difficult to simply put aside a chunk of money and have the discipline to not touch it. However, you must consider – the last thing you want to do is to be forced to rely on a loan or on credit cards, compounding the problem in a time when you are preoccupied with other things.
Not too long ago, a friend of mine took a road trip through several states. During this trip, a variety of misfortunes befell him. His car broke down unexpectedly despite vigilant maintenance and care. He was caught in the middle of the Nashville floods. Motels were filled up, leaving little in the way of options for staying in town. All told, the trip ended up costing hundreds of dollars more than he had anticipated or budgeted for! These things can happen to anyone, at any time, with no warning. Had he not had an emergency fund, the trip could have been a tremendous disaster.
Traditionally, experts indicate that you should have between three and six months’ worth of living expenses saved to fund your emergency account. There are a huge variety of variables that will effect what you need – levels of debt, children, insurance coverage – all impact the amount of emergency funds you need. Take a look at your own situation and determine what is best for you.
The reason that so much is recommended is that the most common need for an emergency is a sudden and unexpected loss of income. Bills still must be paid, food must still be put on the table, and a new source of income must be found. All of these take resources! More than ever in the last months this become at the forefront of people’s minds; with joblessness rate so high, many people are worried about what will happen.
It can be tough to start an emergency 
fund. Many people think that it is hard to accumulate that much money without it taking a bite out of their lifestyle. Starting small is a good way to begin. Everyone can afford to put away ten dollars or so a month; maybe even per week. After a short while, you won’t even notice that ten dollars missing. Then you can add another ten, and another… pretty soon, saving $20 or $30 per week, you’ll have a good nest egg to act as an emergency fund. Put the money into an interest-bearing account that you can easily access when you need to – don’t put it into stocks, mutual funds, or anything like that, as the fluctuations could put you low on funds when you most need them. Now for the most important thing, the one that people have the most trouble with:
Don’t. Touch. It.
Temptation will be rife. You’ll see a new car, pair of shoes, a computer… There are hundreds of things that you’ll want to use that money on. Discipline must be maintained, or you won’t have that emergency fund during the time you most need it: during an emergency.
Tags: budget activities, Budgeting, experiences, goals, necessary, traditional
I found this article over at www.aol.com and thought it fit perfectly with recent news and stories out and about in the finance world at the moment. So here, in its entirety, is the article from AOL.
By DANIEL SOLIN
Usually, by the time investors ask me for an opinion, it’s too late. Chances are they will have already made a big investing mistake, and they can’t do much about it. It’s all too easy for investors to make bad choices: The securities industry is very clever about always coming up with the “latest and greatest” way to make a quick buck. But almost all of these investment vehicles are structured to benefit brokers and investment managers. Investors wind up getting relegated to their usual status as victims with no redress.
Since prevention is cheaper than cure, here’s a list of 10 investments you should avoid in 2010 and beyond.
1: Limited Partnerships
These are private deals sold to “sophisticated” investors who meet minimum net worth requirements. The pitch is you are investing with the “big boys” — large brokerage firms with the inside track on elite investments.
The reality is that these partnerships are illiquid. Because they aren’t subject to Securities and Exchange Commission oversight, there’s no requirement for audited financial reports, so it is difficult to monitor them. They’re characterized by high fees paid to the general partner and affiliates. And there’s no evidence that the average returns of limited partnerships beat those of a broadly diversified stock portfolio.
Limited partnerships are great for the promoters and operators who shill them.
2: Any Offshore Investment
Many deals are based offshore, typically in locations like the Cayman Islands or the Turks and Caicos islands. Avoid them.
The U.S. is a large country with well-established laws and a comprehensive (albeit imperfect) regulatory system. The primary purpose of establishing an investment offshore is to avoid U.S. regulation. However, investors need more — not less — regulation.
Deals structured offshore have a much higher probability of engaging in questionable (if not fraudulent) conduct than deals subject to U.S. laws.
If you think investing abroad shields you from the IRS, think again. A recent agreement between Swiss banking giant UBS (UBS) and the U.S. and Swiss governments provided for the release of the names of wealthy Americans who thought they outsmarted the IRS by secreting money in Switzerland. Those folks are now scrambling to turn themselves in and hoping to avoid prison time for their conduct.
3: Hedge Funds
No guru is going to deliver outsize returns without taking commensurate risk. This includes hedge fund managers. (One pundit has correctly noted that hedge funds are for “stupid rich people.”)
These funds are illiquid. When things go bad, the fund can prevent you from liquidating your investment for significant periods of time. And the fees are obscene. Usually 2% of the assets, plus 20% of the profits.
They’re difficult to monitor. If the fund changes its investment strategy, you’ll never figure it out in time to do anything about it.
And they’re very risky. Since 2006, more than 117 hedge funds at 71 fund families have gone bust. The list includes funds from stellar names like Russell Investments, ING (ING), Carlyle Capital, Bear Stearns and Dillon Read.
4: “House” Funds
“House” funds are actively managed mutual funds created, owned and operated by brokerage firms. They can be sold only by brokers who work for that firm. The Morgan Stanley Emerging Markets Fund (MSF) is an example of a house fund.
Independent studies have shown that house funds usually underperform funds from major independent fund families, like Fidelity and Vanguard.
Brokers love them because they get paid a higher commission. You should avoid them.
5: Variable Annuities
Insurance companies sell variable annuities through brokers. The pitch is that you get the benefit of an investment and the protection of a death benefit. The reality is that these are high-commission products, which is why they’re sold so aggressively.
The costs of an annuity are difficult to discern, but they frequently exceed 2% a year, which will erode your returns.
The big selling point is that profits are tax-deferred. However, what the broker may not tell you is that you’ll be taxed at your marginal, ordinary income tax rate when you withdraw your funds. You’re also subject to a 10% penalty for early withdrawal, prior to age 59 1/2.
A former SEC economist concluded that, instead of investing in a variable annuity, “in virtually every instance” investors would have been better off in a mutual fund or a portfolio of stocks.
6: Equity-Indexed Annuities
Have I got a deal for you! You get the benefit of the stock market when it goes up and the protection of an annuity when it goes down. That’s the promise of equity-indexed annuities.
Sound too good to be true? It is.
This is really an insurance product so complicated it would take an actuary to figure out its true returns and costs. They are illiquid and saddled with significant penalties if you surrender the annuity prematurely. And the insurer can change the provisions even after you sign up.
The combination of nondisclosed costs and uncertain returns makes these investments a poor choice for investors.
7: Exchange-Traded Funds
I’m not opposed to all exchange-traded funds (ETFs). Some, like the iShares MSCI ACWI Index (ACWI), are a low-cost way to achieve a broadly diversified stock portfolio. However, you can achieve the same goal with low-cost index funds like the Vanguard Total World Stock Index Fund (VTWSX).
I prefer the use of low-cost index funds over ETFs because you don’t need to open a brokerage account to buy index funds. This means you don’t have to pay a commission that reduces your returns, especially if you buy regularly or over an extended period.
ETFs have “bid-ask” spreads, which further add to your costs. And you can’t automatically reinvest dividends back into your ETF. But you can with an index fund.
You should avoid the niche ETFs that track small sectors like cancer research stocks. Your chance of selecting an outperforming sector of the market is very small.
On balance, I don’t see the appeal of ETFs for most investors.
8: Individual Bonds and Most Bond Funds
The purpose of holding bonds is to stabilize the returns of your portfolio. If your bonds or bond fund defaults or loses significant value, you’ve failed in achieving that goal.
Most investors can’t buy enough bonds to properly diversify. Brokers love to sell individual bonds because they make more money doing so. You should avoid individual bonds altogether.
The key to buying bond funds is to focus on low-cost, short-term, investment-grade (rated BBB- or higher) bond funds. Ignore comparisons of the returns of these bond funds to those boasting higher returns. They may produce higher yields, but they do so by taking greater risk. The Schwab YieldPlus Ultra-Short Bond Fund (SWYPX) is a perfect example. It was sold as a safe bond fund that gave investors extra yield. It performed as advertised for a couple of years before it dropped by more than 30% in late 2007 and early 2008.
You should confine your bond fund selection to a fund like the Vanguard Total Bond Market Index Mutual Fund (VBMFX) or comparable, low-cost, high-quality, bond index funds from other major fund families. Avoid most of the bond funds on the market.
9: Pooled Funds
Pooled funds are funds from different investors aggregated for purposes of investment. There’s no evidence they perform better than publicly traded funds. They’re often structured in a way to avoid SEC oversight, which is a major disadvantage because it’s difficult to monitor their costs and investing style, and to verify their returns.
They’re often illiquid and valued only periodically.
More than 14,000 publicly traded mutual funds have established track records and can be monitored daily. I see no benefit to pooled funds but many disadvantages for the investor. Like hedge funds, they’re structured to benefit the advisers who sell them and the fund managers who run them. I would advise avoiding them.
10: Individual Stocks
Probably more money has been lost pursuing the latest “hot” stock than in any other area of investing. No one has ever proven to have Superior stock-picking skill. The price of any stock is determined by tomorrow’s news. Since no one knows what tomorrow’s news will be, picking a stock based on your instinct about its future price is simply gambling. The stock-pickers graveyard is littered with bad choices that once looked great: Lehman Brothers, Worldcom, Enron, Refco and General Motors are just some examples.
Holding individual stocks has another problem. You assume risks that are unique to that stock, like the death of its founder or embezzlement by its chief financial officer. When you hold a low-cost stock index fund, you diversify away almost all of this risk without sacrificing your likely return.
Individual stocks aren’t suitable for the portfolios of most investors.
______________________
Avoiding these 10 investments won’t eliminate the possibility of losses. But it will improve the quality of your portfolio and keep you from becoming another victim of the poor advice all too frequently dispensed by brokers and advisers.
Many people know that there is a difference between a credit union and a bank, but not many people truly understand what the benefits are. Credit unions are owned by members rather than investors, meaning that there are distinct advantages for their clients. Membership in a credit union generally has some restriction – only military members, or employees of a certain company, or something similar. Despite the fact that millions of people have (or could have) access to a credit union, most people never take advantage of this fact!
The differences between banks and credit unions have definitely come into sharp focus in recent years. One primary reason for this is that banks have increased fees and other means of income to remain profitable. Credit unions have not been nearly as aggressive in raising rates in their branches. While these two opposing models of doing business definitely each have their advantages, credit unions defeat banks at their own game in several ways. Consider these, particularly if you’re in the market for a new place do to your banking:
Better Interest Rates
Credit unions often have significantly better interest rates. Keep in mind, we’re not just talking about interest that you pay on a loan, mortgage or a credit card, but also interest earned on your deposit accounts as well. Savings, checking, CD, and other interest rates are all better. By banking with a credit union, more money stays in your pocket. Compare the rates you receive or are charged between two or three institutions (even between credit unions). Wise choices always begin with information gathering efforts.
Lower Fees
Since credit unions are not “for profit” entities, they are under less stringent requirements compared to banks when it comes to money-making activities. Because of this, they do not consider banks as direct competition and are able to keep their fees lower.
There is a list of fees that you should be aware of any time that you open a new account: monthly minimum fees for checking and/or savings accounts, ATM fees, overdraft or NSF fees, and similar drains on your money. These are by far the most often levied against customer accounts, but you need to check with the institution that you are considering. While all financial institutions are subject to federal regulation when it comes to financing a house, any fees that you incur along the way are generally lower than a bank or what you will find offered by a mortgage broker.
Insured Funds
The FDIC (Federal Deposit Insurance Corporation) is in the throes of rescuing failing banks and reports are saying that the money is running out. Now, this is not to say that the funds aren’t covered – but it’s 
always best to stay as safe as possible. The funds that are on deposit with credit unions are guaranteed by a different organization – the NCUA. Yes, both banks and credit unions are insured by the Federal government, but right now, the NCUA is under far less stress than the FDIC due to troubled bank assets.
Better Customer Service
These days, it is a rare joy to walk in anywhere and get decent service. Generally, at credit unions someone actually greets you from behind the counter and acts as if you are important no matter how much money you have in their vaults. The fact is that most employees of credit unions are members too, which puts you on the same level as them – and they know how to treat their customers.
Less Stringent Loaning Rules
Credit unions, for much the same reason that they have lower rates, have less stringent rules on who they loan money to. Because they have rules about who they let into their circle of membership, it is easier for them to lend money out. Try taking your business to a credit union and see what happens. Since a credit union is member-owned, the rules are more relaxed for granting of loans. Yes, they too are subject to certain provisions and even a credit check, but they are also more forgiving and willing to work with you. They actually care about you and want your business!
Organization. The very word itself makes many people shudder, roll their eyes, or imagine filing cabinets and neat labels. Organization, from organize, defined as “to give structure or character to similar parts,” is a difficult thing to motivate oneself to do, particularly if it hasn’t happened in a while.
But we all know it is important -and when dealing with your finances, it can be especially so. It is too easy to lose track of where your extra checkbooks are, where last year’s tax returns were stashed, or 
how much you spent last month on groceries.
In order to be truly financially healthy, it is critical that you form some sort of organizational system. It is obviously going to be different for everyone – what matters is that you find something that works for you! For some people, throwing everything into a shoebox works just fine. Others need labels, folders, stickers, markers, and a passel of other tools to keep everything straight.
Now, I don’t mean that you need to color-code everything and have it alphabetized. I have seen some incredibly simple organizational structures – one person I know keeps thing ‘in the first place they would look for them.’ (This works very well for some – I tried it with some level of success, but after a few failures went back to something with a little more structure.) The goal is for you to be able to locate or identify what you need without unreasonable effort. Most people can make do with a few manila folders and some pens to label things – bills, receipts, old paystubs, tax forms, and so on.
To be financially healthy, it is important that you be able to
- Locate important documents quickly and effectively
- Be able to quickly access information you need (both on- and off-line)
- Maintain a balanced checkbook
- Keep track of relevant financial information, including insurance documentation, tax information, and so on.
Your system does not have to be glamorous. It does not need to be shiny, or colorful, or pretty – only functional. I have a beat-up old filing cabinet and some hanging folders with tags, and it works for me. Having your paperwork and finances organized will let you see problems coming and handle unexpected ones quickly and with ease.
Find something that works for you, and share it in the comments!
Tags: budget activities, goals, lists, necessary, organization, organize, writing
