finance

What You Should Know About Mutual Funds

Filed in archive Finance , Investing on July 19, 2010

What You Should Know About Mutual Funds
© alancleaver_2000
What exactly is a mutual fund?

A mutual fund is a pool of money from many investors to build a portfolio of stocks, bonds, real estate or other securities, according to its charter. Each investor in the fund gets a share of the total profits of the investments.

Mutual funds make it easy to diversify investments.

They require moderate minimum investments, from a few hundred to a few thousand dollars. This allows investors to have a diversified portfolio more cheaply than they could on their own.

There are different kinds of stock funds.

Growth funds buy shares of burgeoning companies; sector funds buy shares of companies in a particular sector, like technology or health care and index funds buy shares of every stock in a particular index, like the S&P 500.
There are also safe investments, like government bond funds; high-risk investments, like high-yield bond funds; and low-tax investments, like municipal bond funds.

You have to think about risks.

When you buy into a fund, think about how risky its investments are. Can you take big market swings to get higher returns? If not, stick with low-risk funds. Check three factors: the fund's biggest quarterly loss; its beta, which measures a fund's volatility against the S&P 500; and the standard deviation, which shows how much a fund bounces around its average returns.

Look at the expenses.

Funds charge a percentage of total assets. They may not sound big, but they create a serious drag on performance over time.

Consider taxes as well.

Think about how much of your fund is going to pay taxes. You may be surprised to learn they owe taxes - both for dividends and for capital gains - even for funds that have declined in value. Tax-efficient funds avoid rapid trading (and high short-term capital gains taxes) and match winning trades with losing trades.

Never go after winners.

Look at consistency of performance over longer periods of time.

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How To Get Out Of Debt Faster

Filed in archive Credit , Finance on July 18, 2010

How To Get Out Of Debt Faster
© kainr
Having debts can really be a source of pain and can ruin your health. It can cause you stress which in turn can lead to illnesses like high blood pressure, heart ailments and diabetes. Debts can also ruin your relationships. Many previously happily married couples break up when money problems start to take more and more of their time together.

And of course, debts can certainly ruin your credit score. This makes it difficult for you to get financing for important things like your home and stop you from saving for your retirement.

Here are some steps you can take to help you clear your debts as quickly as possible:

1. List down your debts.

Get a copy of your free credit report and write down each debt starting from those with the highest interest rates. You may have to gather up previous statements of your different accounts to figure out how to correctly list down everything you owe.

2. Figure out how much extra money you have.

Paying out only the minimum amount due on each of your debts will keep you bogged down for a very long time. Try to find any extra money you have and then use it to pay off debts.

3. Pay off debts with the highest interest rate first.

Use all those extra money you found to erase off the debt that has the highest interest rate first. However, do not forget to pay off at least the minimum for all other debts you have.

4. Roll over your extra cash to pay other debts.

When you're done paying the debt with the highest interest, move on to the one with the next highest interest rate. At this point you will have more extra money than you had before because you've already cleared off the first debt. Use all that extra money to pay off the next debt. This will certainly increase the rate at which you can get rid of all debts you have.

5. Repeat the process until you're free of debt.

Work your way down your list. Cross off each debt you have paid off and then move on to the next.

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Cutting Down On Your Electric Bills

Filed in archive Buying Stuff , Saving on July 15, 2010

Cutting Down On Your Electric Bills
© boliston
The summer heat is on and people are trying to look for energy-efficient means to keep themselves cool. One way to do this is to make sure that all your cooling equipment are in good shape and working at the right settings.

Check out the following tips:

Have your cooling equipment checked. Get in touch with your certified technician and schedule an annual inspection of your home's heating, ventilation and air-conditioning systems. Make sure all of these are at peak operating efficiency. Non-efficient cooling equipment can cost up to 20% more in energy bills.

Buy the right cooling appliance for your room. Make sure the air conditioning unit you buy is the right size for the room it will cool. An A/C unit with too much power only wastes energy. Use Energy Star guidelines to determine how much power you need in purchasing your next A/C unit.

Clean your cooling equipment regularly. Air filters must be cleaned monthly for central air and individual window or wall units. Dirt and dust both prevent effective air flow, resulting in reduced cooling efficiency.

Check the thermostat. Set the thermostat about five degree higher during the workday, especially when no one else is in the area.

Purchase appliances that come with incentives. Many qualifying central air conditioners are eligible for a federal tax credit of 30% of the cost through the end of 2010. Tax credits will include costs such as installation and can go up to a maximum of $1,500 for all projects. Several states also have give out rebates through the 2009 American Recovery and Reinvestment Act.

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Wasteful Consumer Items You Can Stop Buying

Filed in archive Buying Stuff , Saving on July 4, 2010

Wasteful Consumer Items You Can Stop Buying
© quinn.anya
Everyone is trying to cut some costs these days, but we are often at a loss as to where to start.

Well... if you really are serious about cutting down your expenses, here are some household items you might be able to do without:

1) Paper napkins. If you use cloth napkins instead and assign each family member a different colored napkin, you won't only eliminate the cost of paper napkins altogether, you will also cut down on laundry costs. Getting rid of paper napkins can save you and your family as much as $57 a year.

2) Paper towels. Use cloth towels or rags instead. Cut up old bed sheets, clothes or towels into smaller pieces and use them to wipe up spills. You potentially save $83 a year from eliminating the cost of paper towels.

3) Resealable, plastic storage bags. If you didn't use these to store raw meat, washing out plastic bags and re-using them will save you about $78 per year. If you have leftover food, store it in a plastic or glass reusable container.

4) Paper coffee filters. There are reusable coffee filters now being sold in stores. Switch to them! You get to save about $15 a year.

5) Single-serve bottled drinks. Use a reusable bottle to carry your water or other drinks. Make sure you use one of those stainless steel bottles.

6) Aluminum foil. As in the case of plastic bags, you can do without aluminum foil if you use plastic or glass containers to store leftover food instead.

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Don’t Buy the Following Items New

Filed in archive Buying Stuff , Finance on June 29, 2010

Don’t Buy the Following Items New
© brewbooks
If you're trying to save some cash (like we all do!), it helps if you know that there are some products that you can buy just as good when they are used as when they are new.

All you have to do is look them up either on the internet or your local newspaper to find some valuable treasures you may still enjoy.

1. Houses. You get better value for your money if you buy an old home. There is more architectural variety and older houses were usually built in better valued lots.

2. Office furniture. Most of these were built to stand lots of use and abuse. Most solid pieces are built heavily and will likely last a lifetime. Good pieces of used office furniture will work just as well as new ones and will of course come at a fraction of the cost.

3. Cars. Most people will always want a new car, but there's really no point in buying something that depreciates in value immediately after it is driven out of the dealer's lot. Aside from that,you save on insurance and initial costs. Just make sure you have a good mechanic to take a look at the car so you can anticipate problems you may have with it in the future.

4. Hand tools. Hammers, screwdrivers, wrenches and hoes are among the many household tools that will work just as well when they are old as when they are new. Just look out for neighborhood or garage sales to save a bundle on these items.

5. Sports equipment. People hardly use these items until they are really worn out. And it takes quite a long time for sports equipment to really give out.

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