So yesterday was a fun day in the stock market as the DOW dropped 1,000 points in the blink of an eye. It however recovered to end the day down about 350. No one seems to know the exact reason. Whatever the case may be I am sure that many people had a sleepless night. I remain optimistic. I think this was a sizable correction but good companies are still good companies and can be bought cheaper now.

Yahoo has an article by the blog minyanville , The 1000-Point Plunge . It raises some interesting points and theories. I think it was due to hedge funds and institutional investors. They are the ones who make the market move. Either way I am staying in. After all if making money in the stock market was easy we would all be rich. I wish everyone the best and a summer full of high returns.

Matt

As promised one of my goals for FasLip is to provide us the tools for building wealth. This means that we have the tools to maximize every hard earned dollar. It is tax time and maybe you are getting some money back. I am sure you have earmarked part or all of these funds. Before committing to these plans please review the following information. Especially if you do not have an emergency fund.

Maybe you are aware or may you are not but interest rates for saving money right now is low. If you are looking for a loan they are great, but if you are looking to save it is a different story. However, these reward checking accounts buck the trend. They give you a better than average rate for some small monthly commitments. If you do not meet these requirements you simply get a lower rate. No fee, no penalty, no charge, unusual considering how we are abused by the larger commercial institutions. In fact, you still earn interest, it is just not the higher premium rate when you meet the qualifications.

As I said they all have specific requirements. However, most consumers should not struggle to meet them and the reward is worth the effort. For example, Pickens requires 10 MasterCard Debit Charges, 1 Automatic Bill Pay or ACH transfer deposit and sign up for electronic statements. Please click REQUIREMENTS next to each bank to see the details on the banks web page.

1 – Community Bank of Pickens County 5.01 % – REQUIREMENTS

2 – Charter Bank 5.01 % – REQUIREMENTS

3 – Focus Bank 4.51 % – REQUIREMENTS

4 – First Federal Bank 4.50 % – REQUIREMENTS

Matt
( Update to http://www.faslip.com/small-banks-offer-rewards-checking/ )

I am sure I am not the only one has a few choice words when it comes to paying taxes. Do not misunderstand I have no problem doing my share to protect my freedoms and have the opportunity for a certain standard of living. But I think that government waste and welfare programs have giving me and countless others an unfair tax burden. However, according to an article on cnbc.com this may not be entirely true. In fact it goes on to state and I quote, “About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability.” AP, Published: Thursday, 8 Apr 2010 | 3:01 AM ET.

There are things about this article that caught my attention but maybe I am just being cynical. The first thing is regardless of what happens at the end of the year money is paid to the government, often over paid by most individuals, and they are able to use it without paying any interest for securing those funds in advance. Also, things such as medicare and social security which are a significant bite are gone never to be seen again no matter how many credits you have. I am not saying I do not support these programs but I know there is a fair amount of waste in these programs like anything else the government runs.

It quotes a gentlemen in the article saying, “It’s not uncommon for people to think that their Social Security taxes, their 401(k) contributions, their share of employer health premiums, all of that stuff in their mind gets lumped into income taxes,” Stretch said. AP, Published: Thursday, 8 Apr 2010 | 3:01 AM ET. I cannot see people lumping their 401k contribution in with their tax disdain. As someone who’s employer has a 401k, they are constantly talking about the tax benefits and how it reduces your taxable income.

Now something to help many of us feel better, “It is a system ( US Federal Taxes ) in which the top 10 percent of earners — households making an average of $366,400 in 2006 — paid about 73 percent of the income taxes collected by the federal government.” AP, Published: Thursday, 8 Apr 2010 | 3:01 AM ET. This statement is also somewhat misleading because this does not describe the tax burden as a percentage of income. As Warren Buffet has said he may pay significantly more in taxes but he earned significantly more and what he paid is actually less as a percentage when compared to his assistant and other moderate income employees. “Warren Buffett, the third-richest man in the world, has criticised the US tax system for allowing him to pay a lower rate than his secretary and his cleaner. Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent.” The Times

I think it would be more accurate to say that many of us may not have to pay additional taxes at the end of the year and many of us may get a refund because we paid too much over the year or were able to take advantage of enough of the tax credits. But we all pay our share, and the amount of people who truly pay no taxes, meaning they are refunded every penny they paid in federal income tax, must be significantly less than 47 percent. If it is too good to be true it probably is. For the full article click cnbc.com.

Matt

So as if the current economic times with soaring health care costs, massive unemployment, obscene government spending, its resulting dizzying deficit and ever increasing energy cost were not enough, someone in their entrepreneurial cunning has thought of a new way to take peoples money. The devastation of Bernie Madoff’s misdeeds has obviously gone unnoticed by both the consumer and the no- gooder.

What are these gifting parties? First, those organizing such parties deny they are pyramid schemes and have employed counsel to argue their position. However, to me believing this would be the same as arguing the world is not round. Each group consists of eight members at any given time. These gifting parties currently are women only. The example in the article explains the pyramid having four members at the base. These are the new recruits and they must give $5,000 to the top member to buy in to the group. In between is a row consisting of three members and another with two members. At this point I am sure you see the irony the actual membership is a pyramid where the new members ( bottom ) pay the top member ( point ) . Never does it mention the gifting party doing anything to create income that is not a direct investment by another recruit. Therefore, you can see that everyone but the top member loses should a group find themselves unable to recruit new members. And as this scheme, catches on the pool for new recruits will dry up.

If you happen to make it to the top, you get $40,000 and can either leave or buy your way back in to the bottom again for $5,000. This works because people feel desperate now and just would do anything for a quick windfall to take care of things until the economy turns around. However, this like the many frauds that preceded it will leave the majority of women who participate worst off than before.

Matt

I have asked myself this same question. Is coffee good for you ? Or is it bad because of the caffeine. Am I going to cause my heart to explode ? First, you may be questioning why I am writing about this on a finance blog. Because obviously taking care of yourself means that you will live longer ( time for your investments to  grow ) and because the healthier you are hopefully the less medical expenses you will incur over your lifetime, meaning more money to save. So health is indeed a very important component.

I remember reading articles about coffee being high in antioxidants. Products containg antioxidants is very big right now, with different supplements and acai juice. An article found at msnbc explains in greater detail those findings. In an article written by Irene Middleman Thomas for Costco Connection they point out benefits from more recent studies. Health benefits are that it causes an inverse association with risk of Type 2 diabetes, cardiovascular disease, liver cancer and liver cancer and disease according to a professor at Harvard. The article goes on to discuss that initial studies find those who consume 6 or more cups a day of regular or decaf coffee reduce their risk of prostate cancer by sixty percent. Saving the best for last it may also help you live longer especially if you are a woman. The only negative to note was it is not good for pregnant woman to consume coffee as it can increase risk of a miscarriage.

Now obviously too much of anything is bad for you but as a coffee drinker myself this is good news. I of course do not see this as an excuse to not eating healthy and exercising but every little bit helps. As mentioned before being healthy means less medical related costs. This is money that can be saved and invested for better returns. So drink up and enjoy.

Matt

I read an interesting article and I am not sure what to think. I wanted to make my readers aware of this important change so that you can make an informed decision. If you have not already you may be receiving literature from your bank to urge you to opt in to overdraft protection. The reason for this is because recent legislation will require come August 15th that account holders make this choice.  Banks are obviously concerned and are willing to spend large sums of money to get those who often use overdraft protection to opt in. In fact a nytimes article states they collected an estimated $20 billion from ATM and debit card overage fees.

How are they pitching this great consumer account feature? By more or less trying to scare people that it is more of a risk to not opt in to overdraft protection. This includes using phrases such as “in an emergency.” I am not sure about you but I cannot remember any instance where I occurred and overdraft fee charge from an “emergency”.  Conveniently this same legislation will not impose a limit on the number of times banks can impose these huge overdraft fees. It would seem to me instead of muscling consumers to opt in maybe offer them literature on budgeting and responsible spending. I would think the rational solution is not offer people a way to live beyond their means but teach them how to track and control their finances. Then again how else will they pay for their big bonuses.

Let me know what you think and if you will be opting in to giving your money away in the form of gross overage fees.

Matt

    Today February 22, 2010 the first phase of the Credit Card Accountibility and Responsibility Disclosure act goes into affect. Given the time banks had from when the law was actually passed last year many consumers have already been hit with new fees and higher interest rates but as many things government it is better than nothing. And to be fair it does create some real consumer protections on a going forward basis that did not previously exist. For the details of what rules are active today and when the remaining rules phase in click this link, credit card reform passed and what it means to you.

Matt

I found an interesting article on yahoo today. I am sure it will not stop most of us, myself included, from enjoying these from time to time but it may cause you to reconsider how often. In the article it explains how text messaging is a cash cow for cell phone carriers. Especially if you are paying per message. The other lesson I took away from this is that selling a product can be very profitable. So maybe after reading this you will find your own “bottle of wine” and present it in a way that adds value. This way you are the one making the 60 to 200 percent markup. To conclude I too away the following from the article;

1 – Movie theatre popcorn is outrageously overpriced. Bring some snacks from home and pop a bag of the fluffy white stuff when you get home.

2 – When it comes to over the counter medication buy the store brand, you will save several dollars each time and the savings only gets better if you have children. Trust me I know from experience.

3 – When it comes to wine and other spirits you will save significant money by drinking these  at home. Even better have some friends over for a glass of wine and some good conversation.  I definitely have taken notice of this since a bottle Corona at a restaurant or bar is usually $5.00 to $7.00. I can get a 12 pack at the local package store for $18.99 which is $1.58 per bottle. Makes you think twice about going to the bar.

No one is saying you can not go out and enjoy yourself from time to time but if you are buying these items and then using a credit card to purchase them it gets even worst. So make a budget and if you have some cash left over at the end of the month, then treat yourself to a drink or dinner.  And if you were buying them often stash some of that cash away in an emergency fund or investment that will allow you to escape the rat race.

Yahoo.Com – Click Here To Read

Matt