When you think back, the days of sitting in your dorm room debating the merits of your schools football team don’t seem that far away. But before you know it, little Billy and Sally are going to be headed off to the same hallowed halls that you once ran amuck in.
Of all the goals that people save and invest to meet, the college education of their children is near the top of the list. While you may still be paying off your college loans, getting an idea of how much school will cost for them is a valid concern.
Taking a look at the cost over the last few years, prices are continuing to go up. While the average increase per year is about 5 percent, from 2003 to 2004, public universities and colleges raised their tuition by a staggering 14 percent in one year. That is more than four times the current rate of inflation.
Assuming you didn’t choke reading that last paragraph, what can you do to try to figure out what college will cost for your kids? Well, the first step is trying to figure out which kind of school little Billy or Sally will want to attend. The least expensive choice would be an in-state, public university. The average cost of these in 2005 was around $67,000 for four years. And that is assuming that your child graduates in four years, most students these days do not.
The next choice up the ladder is attending a public school out of state. This can be a good choice if your child shows an aptitude for a major that another school out of state is highly regarded in. The average cost in 2005 for four years at an out of state public school is around $100,000 dollars.
The most expensive but some believe the best option would be a private university. These schools don’t figure in residency into their tuition numbers. For four years at a private school in 2005, the cost was around $137,000. Also, you should take into consideration majors, such as medicine or law, which take more than four years.
A final tip to consider is that these days, a bachelor’s degree is worth less and less. Graduate school is becoming more and more common just to be able to get a good job. And the tuition rates charged for grad school are usually much higher.
Paying for college isn’t easy. But with sound financial planning and a good knowledge of what it will cost in the future, saving for school doesn’t have to be as nightmarish as you think.
Thursday, 20 January 2011
Tuesday, 18 January 2011
Rebates – Reward or Rip Off?
Rebates have become increasingly popular in the last few years on a lot of items and certainly on electronic items and computers. Rebates of $20, $50 or $100 are not uncommon.
I’ve even seen items advertised as “free after rebate”. Do these rebates come under the heading of “too good to be true”? Some of them do and there are “catches” to watch out for but if you are careful, rebates can help you get some really good deals.
The way a rebate works is that you pay the listed price for an item then mail in a form and the bar code to the manufacturer and they send you a refund thus reducing the price of what you paid for the item except with a time delay of several weeks.
Rule #1. Rebates from reputable companies are usually just fine.
You can be pretty sure you will get the promised rebate from Best Buy, Amazon or Dell but you should probably not count on getting one from a company you’ve never heard of. If you really want the product and are OK with paying the price listed then buy it but don’t count on actually getting the refund.
Rule #2. Check rebate expiration dates.
Many times products will stay on the shelf of a retailer after the date for sending in the rebate offer has expired so check that date carefully.
Rule #3. Be sure you have all the forms required to file for the rebate before you leave the store.
Rebates will almost always require a form to be filled out, a receipt for the purchase and a bar code.
Rule #4. Back up your rebate claim.
Make copies of everything you send in to get your rebate including the bar code. Stuff gets lost in the mail all the time and if the rebate is for $50 it’s worth the trouble to back up your claim.
I’ve even seen items advertised as “free after rebate”. Do these rebates come under the heading of “too good to be true”? Some of them do and there are “catches” to watch out for but if you are careful, rebates can help you get some really good deals.
The way a rebate works is that you pay the listed price for an item then mail in a form and the bar code to the manufacturer and they send you a refund thus reducing the price of what you paid for the item except with a time delay of several weeks.
Rule #1. Rebates from reputable companies are usually just fine.
You can be pretty sure you will get the promised rebate from Best Buy, Amazon or Dell but you should probably not count on getting one from a company you’ve never heard of. If you really want the product and are OK with paying the price listed then buy it but don’t count on actually getting the refund.
Rule #2. Check rebate expiration dates.
Many times products will stay on the shelf of a retailer after the date for sending in the rebate offer has expired so check that date carefully.
Rule #3. Be sure you have all the forms required to file for the rebate before you leave the store.
Rebates will almost always require a form to be filled out, a receipt for the purchase and a bar code.
Rule #4. Back up your rebate claim.
Make copies of everything you send in to get your rebate including the bar code. Stuff gets lost in the mail all the time and if the rebate is for $50 it’s worth the trouble to back up your claim.
Retirement Budget
For many, retirement seems like a far-away stage of their lives, filled with carefree days with nothing to do but travel, sip wine and watch the sun set. While this may be the reality for some, for most people who don’t budget properly for retirement, their golden years are filled with work and penny pinching, not relaxing. Planning a budget for retiring is extremely important and a vital tool to properly saving.
A commonly used mathematical approach is to say that you need, on average 70 or 80 percent of what you make now per year to live on once you retire. A big part of what you need to figure in is how you plan on spending your retirement years. If you’re looking to travel the world and stay at 5-star hotels, you might want to budget on the high side. If you’re happy staying at home and relaxing, you can budget on the lower end.
To figure out your retirement budget, there a few things you need to do. First, figure out where your retirement income is going to come from and how much of it there will be. Most people get retirement income from a variety of sources like the 401(k) plan they had at various jobs they worked over the years, social security payments, retirement investments and savings as well as any possible income from a job that you would work after retirement. To figure how much you would be getting from social security, check the statements they send you in the mail and the amount you would be getting is broken down there.
The next logical step is to try to estimate your list of expenses. While this can be extremely difficult for those that are looking decades ahead, it’s best to try to put together some kind of plan. The best way to approach it is to itemize your expenses and break them down by category, such as living expenses, utilities, health care and so on.
A few final tips that can help you in the long run is to try to take care of all of your debt before you retire. Paying off the credit cards or your mortgage in one lump sum will help you out in the long run.
Don’t forget any possible dependants. If you are responsible for the expenses of others, you must figure them in, too.
Retirement can either be a wonderful time filled with happiness or it can be a scary time filled with uncertainty. The road you walk down is up to you. The choices you make now will influence how you spend the best years of your life.
A commonly used mathematical approach is to say that you need, on average 70 or 80 percent of what you make now per year to live on once you retire. A big part of what you need to figure in is how you plan on spending your retirement years. If you’re looking to travel the world and stay at 5-star hotels, you might want to budget on the high side. If you’re happy staying at home and relaxing, you can budget on the lower end.
To figure out your retirement budget, there a few things you need to do. First, figure out where your retirement income is going to come from and how much of it there will be. Most people get retirement income from a variety of sources like the 401(k) plan they had at various jobs they worked over the years, social security payments, retirement investments and savings as well as any possible income from a job that you would work after retirement. To figure how much you would be getting from social security, check the statements they send you in the mail and the amount you would be getting is broken down there.
The next logical step is to try to estimate your list of expenses. While this can be extremely difficult for those that are looking decades ahead, it’s best to try to put together some kind of plan. The best way to approach it is to itemize your expenses and break them down by category, such as living expenses, utilities, health care and so on.
A few final tips that can help you in the long run is to try to take care of all of your debt before you retire. Paying off the credit cards or your mortgage in one lump sum will help you out in the long run.
Don’t forget any possible dependants. If you are responsible for the expenses of others, you must figure them in, too.
Retirement can either be a wonderful time filled with happiness or it can be a scary time filled with uncertainty. The road you walk down is up to you. The choices you make now will influence how you spend the best years of your life.
How to Cash in Your Funds
Well, you’ve played the market like an expert, researched exactly the right mutual fund for you, and the fund that you’ve taken under your wing is showing a big, fat profit and you want to use a little of that money to go buy something nice. But how do you get your money back that is in the fund? And what sort of fees will be associated with that? Let’s take a look.
One of the best aspects of mutual funds is that they are “liquid”. That means that you can change your cash into mutual funds and back to cash right away with no delays. For many investors, especially first time investors who may not have a lot of extra income, liquidity is extremely important in an investment. If you need quick access to your money, you get it with mutual funds.
In some cases, you won’t even have to cash in your funds to use the money that is in them. A few different types of mutual funds, such as some fixed-income mutual funds and most types of money market mutual funds come with the ability to write checks against the money in your mutual fund. These are exactly like the checks your credit card company sends you. You’re writing a check that will be withdrawn from the amount you have invested in your mutual funds.
Many different mutual funds offer a program where you can contact the fund either over the Internet or by phone and let them know that you want to cash in a percentage of your holdings. While this transaction can take a few days, the mutual fund company will immediately transfer the cash value of your transaction into an account that you’ll have checks for. So while it may take a few days to cash in your shares, you will have instant access to the money in your account.
A final way that people usually withdraw money from their mutual fund is by a bank wire transfer. You simply tell the fund that you want to take some money out and they will wire it to your savings or checking account. Many funds, however, do require this request in writing and you will have to get an authorized form through your bank that can be sent to your mutual fund. This is done mainly to prevent fraud.
As you can see, taking money out of a mutual fund is quick and easy. The liquidity of mutual funds may be their strongest point since you know your money won’t even be out of reach when you need it.
One of the best aspects of mutual funds is that they are “liquid”. That means that you can change your cash into mutual funds and back to cash right away with no delays. For many investors, especially first time investors who may not have a lot of extra income, liquidity is extremely important in an investment. If you need quick access to your money, you get it with mutual funds.
In some cases, you won’t even have to cash in your funds to use the money that is in them. A few different types of mutual funds, such as some fixed-income mutual funds and most types of money market mutual funds come with the ability to write checks against the money in your mutual fund. These are exactly like the checks your credit card company sends you. You’re writing a check that will be withdrawn from the amount you have invested in your mutual funds.
Many different mutual funds offer a program where you can contact the fund either over the Internet or by phone and let them know that you want to cash in a percentage of your holdings. While this transaction can take a few days, the mutual fund company will immediately transfer the cash value of your transaction into an account that you’ll have checks for. So while it may take a few days to cash in your shares, you will have instant access to the money in your account.
A final way that people usually withdraw money from their mutual fund is by a bank wire transfer. You simply tell the fund that you want to take some money out and they will wire it to your savings or checking account. Many funds, however, do require this request in writing and you will have to get an authorized form through your bank that can be sent to your mutual fund. This is done mainly to prevent fraud.
As you can see, taking money out of a mutual fund is quick and easy. The liquidity of mutual funds may be their strongest point since you know your money won’t even be out of reach when you need it.
What is Automatic Investing?
For many, the idea of investing in mutual funds, stocks and bonds is appealing, but it all seems too complicated. Too much jargon, too much danger, too much hassle. Thankfully, the companies that run mutual funds know this and have come up with a way for new investors who may not have a big wad of cash to invest right off the bat.
It’s called automatic investing and it is highly recommended for those new to mutual funds and for those that want to invest but don’t have a lot of up-front funds.
Automatic investing is done through a mutual fund company, and what happens is, you sign up to purchase a set amount of funds either every month or every few months (usually quarterly). You buy a bit at a time, whatever you feel you can afford, and your shares are managed by the mutual fund company. It is a great way to watch a nest egg form from money you didn’t even know you had.
A great part about automatic investing is that most mutual fund companies are so excited to get new investors in, they will waive most if not all transaction and investment fees for those that are signing up for automatic investing. They understand you may not have a lot of extra cash to throw away on fees and they want you to get your feet wet with mutual funds.
Maybe the best part about automatic investing is that it is a very disciplined form of investing. Instead of opening up an E-Trade account and investing from your home computer, an investment expert at the mutual fund company that you invest in will handle your shares and in this case, it is probably best to let the experts handle it. It’s extremely tempting to chase mutual funds when investing yourself. You hear the latest news about funds that may be surging and its tempting to take your money and jump on the hottest fund, but disciplined, long-term investing is a much more beneficial way to go.
Whichever company you choose to use for automatic investing will supply you with a prospectus that will outline all of the fees that may or may not be associated with your account. This is key since you’ll need to know what any possible cost might be for things like early withdrawals.
For many, automatic investing takes the guesswork and the fear out of mutual fund investing by allowing a large amount of money to build up over time. Contact a mutual fund company to see if automatic investing is right for you!
It’s called automatic investing and it is highly recommended for those new to mutual funds and for those that want to invest but don’t have a lot of up-front funds.
Automatic investing is done through a mutual fund company, and what happens is, you sign up to purchase a set amount of funds either every month or every few months (usually quarterly). You buy a bit at a time, whatever you feel you can afford, and your shares are managed by the mutual fund company. It is a great way to watch a nest egg form from money you didn’t even know you had.
A great part about automatic investing is that most mutual fund companies are so excited to get new investors in, they will waive most if not all transaction and investment fees for those that are signing up for automatic investing. They understand you may not have a lot of extra cash to throw away on fees and they want you to get your feet wet with mutual funds.
Maybe the best part about automatic investing is that it is a very disciplined form of investing. Instead of opening up an E-Trade account and investing from your home computer, an investment expert at the mutual fund company that you invest in will handle your shares and in this case, it is probably best to let the experts handle it. It’s extremely tempting to chase mutual funds when investing yourself. You hear the latest news about funds that may be surging and its tempting to take your money and jump on the hottest fund, but disciplined, long-term investing is a much more beneficial way to go.
Whichever company you choose to use for automatic investing will supply you with a prospectus that will outline all of the fees that may or may not be associated with your account. This is key since you’ll need to know what any possible cost might be for things like early withdrawals.
For many, automatic investing takes the guesswork and the fear out of mutual fund investing by allowing a large amount of money to build up over time. Contact a mutual fund company to see if automatic investing is right for you!
Sunday, 9 January 2011
Online Trading
The invention of the Internet has brought about many changes in the way that we conduct our lives and our personal business. We can pay our bills online, shop online, bank online, and even date online!
We can even buy and sell stocks online. Traders love having the ability to look at their accounts whenever they want to, and brokers like having the ability to take orders over the Internet, as opposed to the telephone.
Most brokers and brokerage houses now offer online trading to their clients. Another great thing about trading online is that fees and commissions are often lower. While online trading is great, there are some drawbacks.
If you are new to investing, having the ability to actually speak with a broker can be quite beneficial. If you aren’t stock market savvy, online trading may be a dangerous thing for you. If this is the case, make sure that you learn as much as you can about trading stocks before you start trading online.
You should also be aware that you don’t have a computer with Internet access attached to you. You won’t always have the ability to get online to make a trade. You need to be sure that you can call and speak with a broker if this is the case, using the online broker. This is true whether you are an advanced trader or a beginner.
It is also a good idea to go with an online brokerage company that has been around for a while. You won’t find one that has been in business for fifty years of course, but you can find a company that has been in business that long and now offers online trading.
Again, online trading is a beautiful thing – but it isn’t for everyone. Think carefully before you decide to do your trading online, and make sure that you really know what you are doing!
We can even buy and sell stocks online. Traders love having the ability to look at their accounts whenever they want to, and brokers like having the ability to take orders over the Internet, as opposed to the telephone.
Most brokers and brokerage houses now offer online trading to their clients. Another great thing about trading online is that fees and commissions are often lower. While online trading is great, there are some drawbacks.
If you are new to investing, having the ability to actually speak with a broker can be quite beneficial. If you aren’t stock market savvy, online trading may be a dangerous thing for you. If this is the case, make sure that you learn as much as you can about trading stocks before you start trading online.
You should also be aware that you don’t have a computer with Internet access attached to you. You won’t always have the ability to get online to make a trade. You need to be sure that you can call and speak with a broker if this is the case, using the online broker. This is true whether you are an advanced trader or a beginner.
It is also a good idea to go with an online brokerage company that has been around for a while. You won’t find one that has been in business for fifty years of course, but you can find a company that has been in business that long and now offers online trading.
Again, online trading is a beautiful thing – but it isn’t for everyone. Think carefully before you decide to do your trading online, and make sure that you really know what you are doing!
Investing in Unstable Market
There are many buzzwords associated with investing, words that, as an investor, you’ll probably get sick of after a while. You can only listen to so much advice telling you to be disciplined when you just got a hot tip that Fidelity Investment’s mutual fund is about to explode. One of those buzzwords that people hate to hear is market volatility. Volatility is a part of investing, plain and simple. If that concept makes you feel queasy, join the club. There have been patterns over the years in the Dow and the Nasdaq where a slow and steady climb happened. Most of the mid to late 1990s saw a slow and steady rise in the markets. The only real blemish on the market during that time was the mini-crash of 1997. Even then, the market showed a gain for the year.
So, how do you cope with market volatility? There are many different strategies that are used, and most of them include investing discipline. Studies have shown that during periods of extreme market volatility, like after the attacks of September 11, the market has rebounded and gone on a bit of a run. A great way to deal with volatility like that is to move some of your money into funds or stocks that might be a little lower risk and focus on blue chip stocks. When you and your broker feel that the market is at or near the bottom, you can invest in technologies or companies that you feel will be in high demand in the near future. Just because the market is doing its best yo-yo impersonation, is no reason to take your money and go home.
Another common practice is known as dollar-cost averaging. This is the practice of waiting until a particular stock that’s going through a rough period and waiting for it to bottom out. While the exact time of a stock bottoming out is unknown, most wait until the stock sets a record low, and then they pour thousands of dollars into that stock. The same technique can be used with the market as a whole. If the Dow is experiencing a series of bad days, some investors with withdraw all their money, wait for the Dow to set a 30 or 60 day low, and then shove everything back in at once. While there is no guarantee of this working, it’s been a common practice recommended by brokers the world over for generations.
Dealing with market volatility isn’t easy, but it is part of investing. If you’re a smart investor, however, market volatility won’t mean the end of your investment.
So, how do you cope with market volatility? There are many different strategies that are used, and most of them include investing discipline. Studies have shown that during periods of extreme market volatility, like after the attacks of September 11, the market has rebounded and gone on a bit of a run. A great way to deal with volatility like that is to move some of your money into funds or stocks that might be a little lower risk and focus on blue chip stocks. When you and your broker feel that the market is at or near the bottom, you can invest in technologies or companies that you feel will be in high demand in the near future. Just because the market is doing its best yo-yo impersonation, is no reason to take your money and go home.
Another common practice is known as dollar-cost averaging. This is the practice of waiting until a particular stock that’s going through a rough period and waiting for it to bottom out. While the exact time of a stock bottoming out is unknown, most wait until the stock sets a record low, and then they pour thousands of dollars into that stock. The same technique can be used with the market as a whole. If the Dow is experiencing a series of bad days, some investors with withdraw all their money, wait for the Dow to set a 30 or 60 day low, and then shove everything back in at once. While there is no guarantee of this working, it’s been a common practice recommended by brokers the world over for generations.
Dealing with market volatility isn’t easy, but it is part of investing. If you’re a smart investor, however, market volatility won’t mean the end of your investment.
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