Financial Planning, Retirement Plan, 401k, Investment Blog

Financial Planning, Retirement Plan, 401k, Investment Blog

Archive for February, 2009

Condos – Nightmare Investment or Dream Deal?

Posted February 8, 2009 by Bernz

Condominiums have the potential to be great investment properties.  But if you’re not careful, they can turn into an unexpected nightmare.  Make sure you do your homework upfront to turn your condo purchase into your dream deal.

Here’s the good news.  Many condominiums are at the low end of the neighborhood’s pricing scale.  This means your purchase price will be low.  It also means that more people can afford them, so there will always be a ready supply of buyers.

This may be a good situation if you’re planning on fixing up the distressed condo and selling it for a profit.  But if you’re planning on holding it as a rental, be sure to ask questions and read all the documents before you sign the final papers.  Here are some things to watch out for.

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Posted in Investing in Real Estate, Misc | No Comments »

Bartering Away the Recession

Posted February 5, 2009 by Bernz

As the daily economic news continues to paint a bleak picture of the health of American business, consumers seek out new ways to make the dollars stretch until the end of the month. A very old way of doing business is once again gaining popularity for its frugality and simplicity. Barter has been around ever since the beginning of commerce, only becoming more scarce as money took over as a means of trade. In the past several years, however, barter has become fashionable and organized barter networks have popped up all over the country.

Barter networks bring together those who have goods and services to trade and allow them to do so with pseudo-cash. These “barter dollars” accrue in members’ accounts and can be used to purchase other available items or services offered on the network. The bartering can be done face-to-face at barter meetings or, increasingly, on the internet.

Bartering helps the under-employed use their skills for compensation from customers who might not otherwise have the cash to spend. It then lets members purchase from any other member on the network with the “money” earned.

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Posted in Frugality, Misc, Saving Money | 2 Comments »

Making the Right 401(k) Choices

Posted February 3, 2009 by Bernz

Knowing which investment choices are right for you in your 401(k) plan has never been easy, but in the current economic environment, it can be downright torturous. Most funds that are available to choose from in your plan are declining in value and producing negative returns. This is also the case of the stock market as a whole. That means that your job is to select investment funds not to make the biggest return but to lose the least amount of money. Preservation of capital is tantamount during this extended recession.

Many investors make the unfortunate choice of trying to beat the stock market. However, it has been proven time and time again that, over time, managed funds rarely outperform the stock market as a whole, regardless of how talented and well-compensated the fund manager is. If seasoned experts cannot beat the market, it is highly unlikely that you will be able to. The best many investors can do is to match the performance of the stock market.  How can you choose investments in your 401(k) that will follow the stock market and preserve your retirement funds? Index funds.

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Posted in 401k, Financial Education, Financial Goals, Investing Strategies, IRA, Tax Reduction | No Comments »

How to Avoid Ponzi Schemes

Posted February 2, 2009 by Bernz

The recent arrest of celebrity financier Bernard Madoff brought to light an old investment scam, one that is enjoying a recent resurgence as investors try desperately to hold on to their returns.

The ponzi scheme is named after 1920’s investment manager Charles Ponzi. Ponzi had promised his investors that they would double their money in 90 days- a feat which was not being accomplished anywhere else at the time. Dubious investors were won over by testimonials by happy clients and were soon bringing in amazing returns on their own investments. What Ponzi didn’t tell anyone was that it was impossible to make that kind of return on investment. What he had to do to keep up appearances was to pay the astronomical returns out of new investment contributions. Ponzi’s scheming would have eventually collapsed when the new money couldn’t keep up with the promised returns but instead Ponzi called himself out. He was irritated that a firm down the street had started a similar program and he called the police. Ponzi spent several years in jail before being deported back to Italy. He died penniless two decades later.

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Posted in Estate Planning, Financial Education, Financial Goals, Misc, Wealth Building | No Comments »