If you would like to know more about investment strategies please visit our Investment Planning articles.
Showing posts with label Investment Planning. Show all posts
Showing posts with label Investment Planning. Show all posts
Sep 27, 2009
May Investment Results
The upward trend continues! Although the DJIA is still in negative territory our investments from Januaruy 1, 2009 thru May 31, 2009 reflects a Personal Rate of Return of 11.4 %. 
If you would like to know more about investment strategies please visit our Investment Planning articles.
If you would like to know more about investment strategies please visit our Investment Planning articles.
April Investment Results
April shows a positive trend for the DJIA and our Fidelity account reflects the same trend with a gain of 5. 4%. We're finally going the right direction!
Apr 10, 2009
Time-weighted formula
Fidelity Investments has an exclamation on their statements and their web site next to the field titled "Your Personal Rate of Return".
The exclamation states the following; "Your Personal Rate of Return is calculated with a time-weighted formula, widely used by financial analysts to calculate investment earnings. The calculated value reflects the result of your investment selections as well as any activity in the plan accounts shown. Other personal rate of return formulas may yield different results."
To better understand the term time-weighted we performed several searches. One of the searches produced the following definition from the site dailyvest.com: Time-weighted rate of return takes into account the amount of time an investor has been invested in a fund. It measures how well he or she performs in increasing the dollars that have been invested. Cash flows moving in and out of the fund do not affect the time-weighted rate of return.
The exclamation states the following; "Your Personal Rate of Return is calculated with a time-weighted formula, widely used by financial analysts to calculate investment earnings. The calculated value reflects the result of your investment selections as well as any activity in the plan accounts shown. Other personal rate of return formulas may yield different results."
To better understand the term time-weighted we performed several searches. One of the searches produced the following definition from the site dailyvest.com: Time-weighted rate of return takes into account the amount of time an investor has been invested in a fund. It measures how well he or she performs in increasing the dollars that have been invested. Cash flows moving in and out of the fund do not affect the time-weighted rate of return.
Based on this definition we are confident the time-weighted formula is perfect for our comparisons against the DJIA.
Fidelity Loss in March
Our investment performance in 2009 still reflects a loss. However our portfolio, like the DJIA, has started an upward trend. Due to the fact our portfolio has been performing better than the DJIA we believe our portfolio diversification strategy is working pretty well.
During the period January 1, 2009 through March 31, 2009 the performance of the DJIA has been down about 16%, which is an improvement from last month which reflected a loss of 22%.
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Our return for the same period reflects a loss of 2.75% using Fidelity's time-weighted formula. We'll perform some additional research to make sure the calculation of the formula does not invalidate our performance.
If you would like to know more about investment strategies please visit our Investment Planning articles.
Mar 7, 2009
Fidelity Loss in February
As expected, our investment performance in 2009 reflects a loss. Despite this loss we believe we have successfully minimized our risk and we have positioned our investments to perform well when the market begins to come back.
The performance of the DJIA on a chart found at moneycentral.msn.com shows a the Dow dropped 22% while our account dropped 8.7% since January 1, 2009.
If you would like to know more about investment strategies please visit our Investment Planning articles.
The performance of the DJIA on a chart found at moneycentral.msn.com shows a the Dow dropped 22% while our account dropped 8.7% since January 1, 2009.
If you would like to know more about investment strategies please visit our Investment Planning articles.
Mar 1, 2009
Passive Income Help
We are in the process of publishing our results for February and we're disappointed in our passive income results. Our definition of passive income includes interest earned on our savings and any revenue generated from affiliate arrangements and pay per click advertisements.
There are many claims on other sites about passive income result that are incredible. Are these claims real or simply weblore to attract traffic?
Perhaps our approach is completely wrong. Are we missing something? Do advertisements add any value on sites at all or do they simply clutter up the message the author(s) are trying to promote?
We're looking for your advice, tips and tricks, and approaches so please drop us a comment or send us an email at solidplanning@gmail.com. Thanks! sp:)
There are many claims on other sites about passive income result that are incredible. Are these claims real or simply weblore to attract traffic?
Perhaps our approach is completely wrong. Are we missing something? Do advertisements add any value on sites at all or do they simply clutter up the message the author(s) are trying to promote?
We're looking for your advice, tips and tricks, and approaches so please drop us a comment or send us an email at solidplanning@gmail.com. Thanks! sp:)
Feb 7, 2009
Fidelity Investments
The downturn in the economy has pummeled the balances of most retirement plans and our account is certainly no exception.
We've decided to ignore our losses in 2008 and to focus on performance in 2009. With just a few clicks we can review our 2009 Personal Rate of Return at Fidelity Investments. We don't change our investment mix, we just like to see how we are performing compared to the the Dow Jones Industrial Average.
Today's review brought fantastic news!!! Our return for 2009 is "0."
Why is this fantastic? Check out the performance of the DJIA on a chart found at moneycentral.msn.com. While the DJIA is down, our Personal Rate of Return as of February 6, 2009, shows we have broke even in 2009.
Based on this information we believe we have successfully minimized our risk, and we have positioned our investments to perform well when the market begins to come back.
If you would like to know more about investment strategies please visit our Investment Planning articles.
We've decided to ignore our losses in 2008 and to focus on performance in 2009. With just a few clicks we can review our 2009 Personal Rate of Return at Fidelity Investments. We don't change our investment mix, we just like to see how we are performing compared to the the Dow Jones Industrial Average.
Today's review brought fantastic news!!! Our return for 2009 is "0."
Why is this fantastic? Check out the performance of the DJIA on a chart found at moneycentral.msn.com. While the DJIA is down, our Personal Rate of Return as of February 6, 2009, shows we have broke even in 2009.
Based on this information we believe we have successfully minimized our risk, and we have positioned our investments to perform well when the market begins to come back.
If you would like to know more about investment strategies please visit our Investment Planning articles.
Feb 6, 2009
Planning 101
We believe setting goals without creating plans to accomplish them is similar to wishful thinking. Wishful thinking may make you feel good however it produces no fruitful outcome. For real results you need to create a plan, which is really a series of steps to perform. Creating a plan to reach your goals isn’t as daunting as you might think. To assist you we’ve listed an approach to creating a plan below:
1) Document your goals in writing. The process of collecting your thoughts and documenting them allows you to clarify your goals. The more specific your goals are the easier it is to create steps to achieve them.
2) After reviewing your goals, think about the steps can you take today, tomorrow, in the future, to make them a reality. Write down these steps and assign a date to them that you would like to see the step accomplished.
3) Review your documented goals and steps every morning and every evening. This reminds you of the importance of your goals and keeps them fresh in your mind. If you think of additional steps during your review write them down and assign them a date as well.
4) Perform the steps. Completing the steps you have written down is your plan to achieving your goals. Ask yourself, “What can I do today that will take me a step closer to my achieving goal?”
5) Share your goals and steps with others. Sharing your goals allows you to internalize them. It also allows people to help you achieve your goals as well as support and encourage you along the way.
6) Don’t give up! Your goals will not be achieved in one day. Goals are achieved by completing steps over a period of time. By completing each step along your plan you become closer and closer to achieving your goals.
1) Document your goals in writing. The process of collecting your thoughts and documenting them allows you to clarify your goals. The more specific your goals are the easier it is to create steps to achieve them.
2) After reviewing your goals, think about the steps can you take today, tomorrow, in the future, to make them a reality. Write down these steps and assign a date to them that you would like to see the step accomplished.
3) Review your documented goals and steps every morning and every evening. This reminds you of the importance of your goals and keeps them fresh in your mind. If you think of additional steps during your review write them down and assign them a date as well.
4) Perform the steps. Completing the steps you have written down is your plan to achieving your goals. Ask yourself, “What can I do today that will take me a step closer to my achieving goal?”
5) Share your goals and steps with others. Sharing your goals allows you to internalize them. It also allows people to help you achieve your goals as well as support and encourage you along the way.
6) Don’t give up! Your goals will not be achieved in one day. Goals are achieved by completing steps over a period of time. By completing each step along your plan you become closer and closer to achieving your goals.
Jan 27, 2009
Prepaid Tuition
A prepaid tuition plan, or Section 529 plan, is an excellent vehicle for college savings. These plans are guaranteed to increase in value at the same rate as college tuition. Therefore parents can lock in tuition prices at today's rate with no risk to their principal. Many plans are guaranteed by the full faith and credit of the state. However these plans may require the account owner or the beneficiary be a state resident when the account is opened.
Anybody, not just parents, can contribute to a prepaid tuition plan. Prepaid tuition plans can be an excellent estate planning tool. Prepaid tuition plans are exempt from federal income tax, and may be exempt from state and local income taxes. In addition, some states offer a full or partial tax deduction for contributions to the state's plan.
Plans have annual enrollment deadlines to lock in the current year’s rates so interested individuals should be sure to remember the deadline as part of their planning process.
Anybody, not just parents, can contribute to a prepaid tuition plan. Prepaid tuition plans can be an excellent estate planning tool. Prepaid tuition plans are exempt from federal income tax, and may be exempt from state and local income taxes. In addition, some states offer a full or partial tax deduction for contributions to the state's plan.
Plans have annual enrollment deadlines to lock in the current year’s rates so interested individuals should be sure to remember the deadline as part of their planning process.
Jan 24, 2009
Book Review: Gimme My Money Back
We purchased Gimme My Money Back to learn more about the 2008 financial crisis and to learn how to improve upon our retirement plan investment strategy.
Despite the ridiculous title the book does an excellent job of explaining investment terminology and the events that lead up to the current economic situation found in the United States. The book takes you through asset allocation, investment diversification, and a step by step approach to build your own custom-tailored portfolio.
Based on the information we gained from the book we have changed our investment elections in our 401(k) account. We believe our portfolio is now better positioned to handle the fluctuations in the market.
If you want to build your financial knowledge and minimize your investment risk we highly recommend this book. It is a pleasure to read and it contains excellent information, tools, and guidance. We give Gimme My Money Back two thumbs up.
Velshi, A. Gimme My Money Back. New York: Sterling & Ross Publishers, (2008)
This is the second book review of our planned fifty two book reviews.
Despite the ridiculous title the book does an excellent job of explaining investment terminology and the events that lead up to the current economic situation found in the United States. The book takes you through asset allocation, investment diversification, and a step by step approach to build your own custom-tailored portfolio.
Based on the information we gained from the book we have changed our investment elections in our 401(k) account. We believe our portfolio is now better positioned to handle the fluctuations in the market.
If you want to build your financial knowledge and minimize your investment risk we highly recommend this book. It is a pleasure to read and it contains excellent information, tools, and guidance. We give Gimme My Money Back two thumbs up.
Velshi, A. Gimme My Money Back. New York: Sterling & Ross Publishers, (2008)
This is the second book review of our planned fifty two book reviews.
Manage Risk with Disability Insurance
Most individuals purchase insurance products to protect their home, health, car, and their life. However an often overlooked item is protecting your income. If you’re like most folks , you can’t afford to become disabled.
We believe disability insurance is an important part of financial planning and risk planning. Per the Social Security Administration "nearly 3 out of 10 workers entering the workforce today will become disabled before retiring". Creating a solid financial plan includes managing risk associated with health, home, vehicles, protection of your assets and protection of your income.
If disability insurance is not currently part of your plan we recommend you contact an insurance provider right away.
We believe disability insurance is an important part of financial planning and risk planning. Per the Social Security Administration "nearly 3 out of 10 workers entering the workforce today will become disabled before retiring". Creating a solid financial plan includes managing risk associated with health, home, vehicles, protection of your assets and protection of your income.
If disability insurance is not currently part of your plan we recommend you contact an insurance provider right away.
Jan 16, 2009
Building Equity for Refinancing
The economy has really battered home prices in Florida. We purchased our home in March of 2005 right about the peak of the housing bubble. I had accepted a new job in Florida so we needed to find a home quickly. Don't get us wrong, we love living in Florida, and we love our house, so we'll do what we must to stay. (Go Rays!)
Now that mortgage rates are at an all time low we would like to refinance our home to lower our payments. However we are concerned that our equity has sunk along with economy. So here are our thoughts to boost our home equity.
1) We have found that a minor kitchen remodel is hands down the top choice in terms of the best return on investment. Statistics indicate that a well executed remodel will net an 88-percent ROI. Based on this ratio a remodel of $3,000 may increase our equity by $5,640.
2) A bathroom remodel is another great choice which reflects an 81-percent ROI. A $2,000 minor remodel should approximately yield an equity increase of $3,760.
3) An additional way to increase equity if you are close to the value you need is to make additional principal payments. Most loans have an option that allows you to make extra payments toward the principal in addition to the basic payment.
Using all three of these options we believe we can refinance our home to receive lower payments and enjoy our new kitchen and bath as well.
Now that mortgage rates are at an all time low we would like to refinance our home to lower our payments. However we are concerned that our equity has sunk along with economy. So here are our thoughts to boost our home equity.
1) We have found that a minor kitchen remodel is hands down the top choice in terms of the best return on investment. Statistics indicate that a well executed remodel will net an 88-percent ROI. Based on this ratio a remodel of $3,000 may increase our equity by $5,640.
2) A bathroom remodel is another great choice which reflects an 81-percent ROI. A $2,000 minor remodel should approximately yield an equity increase of $3,760.
3) An additional way to increase equity if you are close to the value you need is to make additional principal payments. Most loans have an option that allows you to make extra payments toward the principal in addition to the basic payment.
Using all three of these options we believe we can refinance our home to receive lower payments and enjoy our new kitchen and bath as well.
Jan 14, 2009
Book Review: Rich Dad Poor Dad
Although I have not finished re-reading Rich Dad Poor Dad to complete our book review. A few items stood out that I had to publish:
"I CHOOSE DAILY: The power of choice. That is the main reason people want to live in a free country. We want the power to choose. " "Financially, with every dollar we get in our hands, we hold the power to choose our future to be rich. Poor people simply have poor spending habits."
"PAY YOURSELF FIRST: The power of self-discipline. If you cannot get control of yourself, do not try to get rich."
"Why consumers will always be poor. When the supermarket has a sale on, say, toilet paper, the consumer runs in and stocks up. When the stock market has a sale, most often called a crash or correction, the consumer runs away from it. When the supermarket raises its prices, the consumer shops elsewhere. When the stock market raises its prices, the consumer starts buying. "
Kiyosaki, R. Rich Dad Poor Dad. New York: Warner Books, (2000)
"I CHOOSE DAILY: The power of choice. That is the main reason people want to live in a free country. We want the power to choose. " "Financially, with every dollar we get in our hands, we hold the power to choose our future to be rich. Poor people simply have poor spending habits."
"PAY YOURSELF FIRST: The power of self-discipline. If you cannot get control of yourself, do not try to get rich."
"Why consumers will always be poor. When the supermarket has a sale on, say, toilet paper, the consumer runs in and stocks up. When the stock market has a sale, most often called a crash or correction, the consumer runs away from it. When the supermarket raises its prices, the consumer shops elsewhere. When the stock market raises its prices, the consumer starts buying. "
Kiyosaki, R. Rich Dad Poor Dad. New York: Warner Books, (2000)
Jan 9, 2009
Spousal IRA
A "Spousal IRA" is a rule which allows the employed spouse to make an IRA contribution on behalf of a non-working spouse or a spouse who has little income. This rule allows you to rely on your spouse's income when you make contributions. These contributions are referred to as "spousal IRA contributions".
As a general rule, your IRA contribution for any year can not exceed your qualifying income for the year. However, if you file jointly with a spouse who has qualifying income, you don't need qualifying income of your own. Other rules also apply as well so you should clarify your situation with your financial institution before making contributions.
An interesting point on a Spousal IRA is that the source of the money really does not matter. Your spouse can suppy the money or you can get it from another source.
As a general rule, your IRA contribution for any year can not exceed your qualifying income for the year. However, if you file jointly with a spouse who has qualifying income, you don't need qualifying income of your own. Other rules also apply as well so you should clarify your situation with your financial institution before making contributions.
An interesting point on a Spousal IRA is that the source of the money really does not matter. Your spouse can suppy the money or you can get it from another source.
Jan 8, 2009
Don't Reduce, Increase Your 401 (k) Contributions
We have all heard and probably agree with the saying "buy low and sell high." However, a recent poll by A
ARP find that "nearly one in five respondents said they had stopped or reduced their contributions to their 401(k)". With the market at the lowest level in years right now seems like an excellent time to increase your salary deferrals. Once the market starts to rise again you may have missed out on some gains.
Our plan for 2009 is to fund the 401(k) to the maximum allowed. Our 401(k) plan allows us to contribute $16,500.00 in deferrals. This amount plus our matching contributions should help us recover some of the losses we experienced in the market downturn.
Pretax Salary Deferrals + Matching Contributions + Low Prices = Big Retuns in the Future?
ARP find that "nearly one in five respondents said they had stopped or reduced their contributions to their 401(k)". With the market at the lowest level in years right now seems like an excellent time to increase your salary deferrals. Once the market starts to rise again you may have missed out on some gains.Our plan for 2009 is to fund the 401(k) to the maximum allowed. Our 401(k) plan allows us to contribute $16,500.00 in deferrals. This amount plus our matching contributions should help us recover some of the losses we experienced in the market downturn.
Pretax Salary Deferrals + Matching Contributions + Low Prices = Big Retuns in the Future?
Jan 4, 2009
Receive the full match on 401(k) Contributions
One of our goals for 2009 is to ensure we receive the full match available on our 401(k). If your employer offers a retirement plan with a match this is a“must-do” step in your retirement planning.
Every individual should take advantage of their employers match since it really is free money! With a match on your 401(k) contributions every time you save some of your paycheck by putting it into your 401(k) account, your company puts in a "match" contribution as well. However, if you fail to make a contribution then your company's match contribution also goes away.
Each retirement plan can be different so carefully review the plan information provided by your Human Resources department. Some employers have very generous matching programs while others have minimal matches or no matching program at all. Be sure to understand your matching program and don’t turn down free money.
In our case we plan to maximize or hit the contribution limit in our retirement plan. This means we plan to contribute the full amount allowed by law to the plan throughout the year. One drawback or concern in fully funding contributions is hitting the contribution limit before the end of the year. Once an individual reaches the limit contributions must cease and as a result the individual may loose the match available on "future" contributions.
Every individual should take advantage of their employers match since it really is free money! With a match on your 401(k) contributions every time you save some of your paycheck by putting it into your 401(k) account, your company puts in a "match" contribution as well. However, if you fail to make a contribution then your company's match contribution also goes away.
Each retirement plan can be different so carefully review the plan information provided by your Human Resources department. Some employers have very generous matching programs while others have minimal matches or no matching program at all. Be sure to understand your matching program and don’t turn down free money.
In our case we plan to maximize or hit the contribution limit in our retirement plan. This means we plan to contribute the full amount allowed by law to the plan throughout the year. One drawback or concern in fully funding contributions is hitting the contribution limit before the end of the year. Once an individual reaches the limit contributions must cease and as a result the individual may loose the match available on "future" contributions.
Partnership Opportunitiy
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