What is COMPOUNDING INTEREST and How It Can Benefit YOU!

Posted on July 10, 2008. Filed under: -- Building Wealth, -- For The Investor In YOU, -- Investing, -- Money Help (in simple terms), -- YOUR Retirement | Tags: , , , , |


 

By Molly Greaves

If read my posts regularly, you’ve probably noticed that I always say ” if time is on your side.” That’s because when you’re so lucky and don’t even realize the opportunities you have to create a large abundance of wealth. That’s because the sooner you start saving, the more time your money has to compound.

Compounding occurs when the money you invest earns money–such as interest in a savings account or returns on your 401(k) investments– and those earnings in turn earn money. In other words, the more you save now, the more compounding can increase your savings. 

Let’s apply it to real-life.

Start at 20, and set aside 15% of everything you earn (including gifts and such) and you will be in good shape at retirement. Wait until you’re 40, and it will be 25% or more of every dollar earned. Wait until 50, and it will be 45% of every dollar earned.

You can look at it this way too. If you invest $1,000 per year in a tax-deferred account that earns 7% a year beginning at age 25, you will end up with $199,635. If you invest the same amount, starting at age 40, and you’ll end up with only $63,249.

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So You Want To Be An ENTREPRENEUR? Don’t Jump In Unprepared…

Posted on July 8, 2008. Filed under: -- Book Summaries, -- Building Wealth, -- Entrepreneurship And YOU, . More Resources For YOU! | Tags: , , , , |


By  Molly Greaves: Another GREAT resource from The Acton MBA program website

 

 

 

 

 

 

 

 

“Bubba,” he asks, “how in the world did you make so much money?” 

“It’s easy,” Bubba replies. “I make these widgets for one cent each, sell them for four 

cents each, and I sell about a million of them a day. You know, it’s amazing how 

much money you can make on a three percent markup.”

 

Some people portray business as a complex enterprise, requiring the mastery of 

impressive-sounding jargon, complicated flowcharts, and spreadsheets —  a “secret 

society” limited to Fortune 500 CEOs, highly paid consultants and business  

school professors…

This PDF also teaches you amongst other things…

There are three areas of knowledge that are critical for starting a successful business: 

1   In-depth knowledge of the competitive structure of an industry and a network of 

contacts within that industry; 

2  The skills to run the daily operations of a small, rapidly growing company; and 

3  The ability to raise money. 

As you begin a new career, think of yourself as being on a scavenger hunt with three 

bags labeled “industry knowledge,” “running a business” and “capital.” In each bag 

is a list of the items you (or your partner) will need to improve your odds of be- 

coming a successful entrepreneur. While others spend their time at their next job 

standing by the watercooler or having lunch with friends, you will be busy collect- 

ing the knowledge and relationships you need to launch your business. The more 

items you collect before you launch, the better your chances of success. 

Read the REST OF THE PDF HERE!

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What Kind of Entrepreneur ARE YOU? Take This QUIZ To Find Out

Posted on July 8, 2008. Filed under: -- Entrepreneurship And YOU, -- Quizes, . More Resources For YOU! | Tags: , , , |


Click the black box or go to http://www.actonmba.org/quiz_entrepreneur.php

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How to Place a Fraud Alert if You Think Your ID Has Been Stolen

Posted on July 7, 2008. Filed under: . More Resources For YOU! | Tags: , , , , |


By Molly Greaves

Lucky for you, I’ve already gone through this process. Yes, my identity was stolen.  By a college buddy, in fact! I went to a smaller, private Catholic school, and my “good friend,” of three years made me her victim. Her name was/is Kate Heiple from Lexington, KY. 

I was wondering why in the heck my money was gone and my cards were maxed. I always kept a budget and knew what I was spending my hard-earned money on. That’s what made me alert. I then found out my money was indeed gone and that everything I’d ever earned went toward her shopping, partying, and hell raising while I was on Christmas vacation at home with my family in Vermont. She even went on a trip to NY courtesy of me. How lovely. 

 

All you need to do is put a FRAUD ALERT with one credit bureau, and they will send the alert to the other two. 

Fraud Division Contact Numbers:

TransUnion:800-680-7289

Experian: 888-397-3742

Equifax: 800-525-6285

This process will also inform anyone who takes a look at your credit report that there may be a fraud problem and help better explain your low score.  Also, make sure you contact all of the companies where you’re an account holder to alert them or make any necessary changes you have.

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Don’t Forget: Saving is for a Short-Term Goal and Investing is For Your Long-Term Goals

Posted on July 7, 2008. Filed under: -- Building Wealth | Tags: , , , , |


*Short-term refers to 5 years or less. So, dont invest short-term money in stocks.

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Your Investment Portfolio: Changing With Your Career

Posted on July 7, 2008. Filed under: -- Building Wealth, -- For The Investor In YOU | Tags: , , , , , , |


By Molly Greaves

 

 

June 2008 Money Magazine says that in your:

EARLY TO MID-CAREER, your portfolio should look close to this:

40%   Blue-Chip U.S. Stocks    

30%   Blue-Chip Foreign Stocks

10%   High Quality Bonds

5%     Inflation-protected bonds

5%    Cash

5%    Value

5%   Small-Cap                                      Average Portfolio Performance

14.3%  5-year annual return

38.7% Best 12 months 

0.22% Average Annual Expenses

-21.6% Worst 12 months   

LATE CAREER, your portfolio should look somewhat like this:  

30%   Blue-Chip U.S. Stocks

25%   Blue-Chip Foreign Stocks

20%   High Quality Bonds

10%     Inflation-protected bonds

10%    Cash

2.5%    Value

2.5%   Small-Cap                        Average Portfolio Performance

12.1%  5-year annual return

29.8% Best 12 months 

0.23% Avg. Annual Expenses

-14.4% Worst 12 months

IN RETIREMENT, your portfolio should look like this:

20%   Blue-Chip U.S. Stocks

15%   Blue-Chip Foreign Stocks

30%   High Quality Bonds

10%   Inflation-protected bonds

20%   Cash

2.5%  Value

2.5%  Small-Cap                    

 Average Portfolio Performance

9.3%  5-year annual return

20.6% Best 12 months 

0.25% Avg. Annual Expenses

-6.7% Worst 12 months

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Your Credit Card Interest Rate and Your Savings Account

Posted on July 7, 2008. Filed under: -- Building Wealth, -- Investing | Tags: , , , |


By Molly Greaves

So what is one to do if they have credit card debt, but want to start saving too? 

It comes down to your interest rates. I mean the interest rates on all of your credit cards where you have debt (aka owe a balance), and also the interest rate you’re receiving from your savings account.

Although I do not recommend this, I know people do this, so I wanted share how to best tackle this if you’re about to. 

If the interest on your credit cards is lower than your savings account, then you could pay the minimum required against the debt on your credit card, and put the rest into a high interest yield savings account (do not spend it). But, if you’re interest rate on your credit cards is higher than your savings rate will pay you, then by all means, get that card paid off. I still have the mindset though to not try and juggle around like this with credit cards. Credit card companies are risky to do business with. The rules seem to always be in fine print.  A sudden change in your credit score could unexpectedly spike your rate and most people dont know that. Yep, if your card does a new inquiry to your credit, and things have changed, you betcha your rate is subject to change.

By all means, make sure that if you do this, that you have enough money saved to pay off your card balance once your interest rate rises above your savings account. 

How do you do that? Don’t spend the money from the beginning. Instead, use it to make some “capital gains,” and that’s it.

I use this theory with my student loan. I was so fortunate to be able to finance my tuition bill at the interest rate of 2.85%. I consider that one of the cheapest loans you can get, and practically free money. I mean, it’s lower than inflation! Not that my bill is free, because it sure isnt, but the loan seems almost like free because of the low rate. So, instead of rushing to pay off my huge college bill, I  send in only the monthly minimum needed to satisfy my agreement and keep my credit score in good health. Whenever I have extra money, I certainly dont send it to my student loan. Instead, it goes to my Roth IRA, where my chances are more likely to get a higher return on my money than by making the small progress on my college bill. 

**If you do this with your credit card, make sure you’re always checking in to see what your interest rate is so it doesnt backfire on you. Also make sure you have enough saved to pay off your balance when the rate is expected to go up. Double check your rates on both accounts frequently because they both can fluctuate. DO NOT spend the money that you are putting into your savings instead of using toward your debt/credit card balance. You want the money to be accessible once your credit card rates start going back up. Chances are they will. What you do instead, is come out with some “capital gains” on the short “loan” for your money.

Molly    greaves.molly@gmail.com

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Top 10 Environmental Issues

Posted on July 6, 2008. Filed under: -- Book Summaries, -- Energy/Being GREEN, -- How YOU Can Help!!, -- Top 10..., . More Resources For YOU! | Tags: , , , , |


By Molly Greaves

Daniel C. Esty and Andrew S. Winston are the authors of this new book Green to Gold, which I started andfinished today.  Here’s what they claim are the Top 10 Environmental Issues facing us today:

1. Climate Change

2. Energy

3. Water

4. Biodiversity and Land Use

5. Chemicals, Toxics and Heavy Metals

6. Air Pollution

7. Waste Management 

8. Ozone Layer Depletion

9.  Oceans and Fisheries

10. Deforestation

 

It’s a good read so check it out!

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