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Author Archives: Chris Neighbors

About Chris Neighbors

As an employee of the Bureau of Land Management and an MBA student at the University of Nevada, Reno I've had a wonderful experience seeing how the government does business and how the private sector should do business. In my free time I like to pursue my passion for personal finance. Ever since I started studying finance I've been hooked. My goal in life is to take valuable financial information and use it to help others. I also enjoy spending time with my family, reading, fishing, and traveling.

Make Sure Your Free Credit Score is FREE

In one of my recent blog posts I mentioned that I was looking for a house to rent. I applied for one last week but hadn’t heard back from them (until this afternoon). I was starting to get concerned that I hadn’t gotten the place. I knew I made enough money to afford the rent, so that shouldn’t have been the issue. I started to think of other reasons I might have gotten passed up. The first thing that came to my mind was my credit score. What was it? Could I have missed a payment on something? Maybe that credit card I never activated affected me negatively? With all these questions about my credit going through my mind I remembered the popular jingle from freecreditreport.com. I decided to go on and check it out. After all it should be free. Their name has the word free in it.

 I went to their website and started filling out their questions. Once I was through, they gave me the option to wait two days and get my credit score for free or pay $1 and get it instantly. I was there to get it for free, so naturally I waited. Once I got my score back I was happy. It’s very good considering one of my credit cards is new, and I’ve never purchased real estate. I was so pleased with my score I decided to tell my girlfriend’s father about it. Once I was done, he seemed interested in checking his own credit. The only thing he asked me (which I’m glad he did) is if the website is secure. I wasn’t totally sure. At this point I was praying it was. I decided to do a little research to make sure. To my relief, everything seemed to check out OK. I was glad to find out my information was safe, but I was disturbed to also find out that after seven days they were going to start billing me almost $20 a month to track my credit score. Now, I know it’s my fault that I didn’t read the fine print, but the word FREE is in the name FREEcreditreport.com. I was able to call them and cancel my account before they charged me, but that’s how they make their money. I thought it was funny because when you call them to cancel they immediately offer you 50% off the first six months. I guess their accustomed to people actually wanting a free credit report.

This whole story boils down to a few things:

1) You can get a free credit score. One way to do it is to go to freecreditreport.com. Then, select to wait two days. After you get your score call them and cancel (you have 7 days from when you sign up). You don’t even have to talk to anyone. It’s all automated. I would recommend keeping the cancellation e-mail they send you just in case.

2) If you want to track your credit score you can get 50% off the first 6 months by signing up and then threaten to cancel your account.

P.S. I ended up getting the house!

 
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Posted by on March 23, 2012 in Uncategorized

 

3 Reasons You Should Celebrate Holidays Late

Ever since I was 15 I’ve worked in a restaurant. It is a great job for students trying to get through school. It allows you to work for a few hours, and then leave with a substantial amount of cash. The thing that has always really bugged me about working in a restaurant is having to work holidays. While everyone else is spending time with their families, I had to work. After a few years of this I became numb to the holiday spirit. This reminds me of my grandfather’s birthday. Every year when his birthday would come around he’d say, “when you get to my age it’s just another day.” At the time I didn’t understand it, but I think he was right. Every day is just another day, and we have the option of what we want to do (or celebrate) on that particular day. After working more and more holidays, I decided that just because most people celebrated that holiday on a particular day didn’t, mean I can’t enjoy it on a different one. After trying this a few times I decided it’s actually better to go this route.

1) Holiday Items are 50% Off: This year my girlfriend and I celebrated Valentine’s day on February 15th. I waited until the day after V-day to go shopping for her gifts. Normally I wouldn’t want to buy her the normal cheesy gifts because I would feel like I was getting ripped off,  but this year I was able to buy her a lot of presents because they were all on sale. If you wait to buy holiday themed gifts until after the holiday, you’ll normally get at least 50% off. Who doesn’t like a good sale?

2) Going Out = Better Service: I’ve always been amazed with how many people actually go out and eat on a holiday. When I was growing up, we always had big family events that involved a home cooked meal. I guess some people just don’t like to cook. If you’re going to celebrate a holiday by eating out, go the day before or after. Every holiday I’ve worked has been a cram fest (how many people can we cram into this room without them complaining). Even if you have a reservation you’ll end up having to wait for a table. Once you finally get sat, your chance of having a problem with your food is higher due to the amount of orders coming out of the kitchen. Also, it’s a lot harder to get the proper amount of attention from your  server because they are busy. You’ll have a better dining experience if you don’t dine out on holidays. Also, if you have a family tradition that involves going out in public (like going to the movies), it will always be crowded on holidays. Increase your odds of having a pleasant experience by celebrating your holidays a little earlier or later.

3) Coupons/Discounts Aren’t Valid– Because of the poor economy, many establishments are giving out a ton of coupons and discounts. Most of these bargains won’t be valid on holidays (or any other busy day). If you plan your entertainment around these days you’ll be able to save money.

I think it’s important to remember that the best part of the holidays is spending time with the people you love. Working in a restaurant has shown me that it really doesn’t matter if it’s celebrated on the actual holiday or the next week. So why not try to save a little money and make your activities, whatever they may be, a little better.      

 
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Posted by on March 18, 2012 in Uncategorized

 

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3 Things to Watch to Make Sure You Aren’t Being Overcharged

I think it’s safe to say that we live in a society where everything moves very fast. Most of us are busy, and life just seems to fly by. I think it’s great how much stuff we can get done at any given time, but it’s important to slow it down sometimes to make sure we aren’t being taken advantage of. Here are 3 instances I think it’s important to take a step back and make sure you aren’t being overcharged.

 1) Grocery Store Reciept– I don’t know about you, but I hate grocery shopping. I’m a poor college student so I tend to shop at Wal-Mart (it’s so cheap). Wal-Mart alone is probably why I hate shopping. It’s always so crowded, which make it impossible to navigate the isles! People are always walking around slow. They stand side by side and block the shelves. It’s just a giant mess. Because I hate it there, I’m always in a hurry to checkout. They don’t really use baggage people so I’m always busy packing up my own groceries. I’m sure there have been times where I’ve been overcharged because I wasn’t paying attention. It wouldn’t surprise me if they didn’t have baggage people just to distract their customers from noticing items being rung up twice or with the wrong amount. This is why it’s important to put the rushing attitude behind at the checkout stand and make sure you’re not overpaying.

 2) Monthly Bills– I’ve always been terrible at combing through my monthly bills. I like to just pay them and get it over with. Recently I’ve been hearing a lot about companies tacking on extra fees. It feels like most companies want to hold you upside down and shake every last penny free. Their like bullies stealing lunch money. Most of us probably have no idea if we’ve ever actually paid these extra fees, but in these tough times it’s important to pay attention and end the shakedowns. If we keep paying the fees, they’ll keep adding them.

3) Foreign Travel– My girlfriend’s parents recently got back from a cruise that went to Komodo Island. Tourist from all over the world travel to this island to see the endangered Komodo dragon. Before the cruise ship company would let them off the boat, they made sure they booked a tour with the local Komodo dragon tour company (they are a monopoly). The tour cost over $175.00 a person. If they didn’t book a tour with them they wouldn’t let them on the island. My girlfriend’s father is a very thrifty guy, and he read ahead of time that he could get a private tour of Komodo Island by going to the ranger station and paying $15.00. When he tried to do this the local tour company through a fit. It took a while to work out, but they ended up getting a great tour for 10% of the cost. This example shows how important it is to be informed when you travel to another country. He did his research and was able to get a great deal, and if he would have just gone on with everyone else he would have been overcharged.

 
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Posted by on March 16, 2012 in Uncategorized

 

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Only Buy Stuff Online With a Picture? Maybe You Shouldn’t

Technology has completely changed the way we buy and sell items on the internet. The better technology gets the higher our expectations become. As I mentioned in my last post, I’ve been looking for a house to rent. I noticed that one of the main things I look at, before I even consider a post, is if it has a picture or not. As I look through the endless rental posts, such as Craigslist.com or Hotpads.com, I skip over everything without a picture. I just assume they are scams or too damaged to be worth my time. I mean, who doesn’t know how to post a picture online? Anyone that was serious about selling something should have a picture of it. My girlfriend found a post on Craigslist last night that sounded great but didn’t have a photo. I told her not to bother, but she e-mailed the “owner” anyways. To my surprise she received a response that seemed legitimate, and we are going to check the house out later today. This whole situation has made me re-evaluate my method for showing interest on items that are posted online. I might have been missing out on a ton of good deals because they didn’t have pictures, and I know I’m not the only one. I was discussing this issue with a co-worker of mine, and she admitted that she also only considers buying something online if the owner posts a picture. I still think it’s a good idea for sellers to post pictures of the goods they’re trying to sell, but I can think of 3 reasons why a legitimate seller wouldn’t post a picture.

1) The seller isn’t Tech Savvy: I’m 25 years old, and I often forget that some people aren’t comfortable with technology. I looked up the owner of the house we are going to look at today, and it turns out that he is 78 years old. He might not have a clue on how to post a picture online. Just because someone isn’t good with technology doesn’t mean their post isn’t sincere.

2) The seller doesn’t have proper equipment to post a photo: Nowadays, it seems like everything can take a picture and link to the internet. Pretty soon we’ll have shoes that have cameras on them! That being said, it is still possible that someone doesn’t have the proper equipment to post pictures online. It’s rare, but not everyone has a digital camera, computer with a camera, or smartphone. I’m constantly working with customer’s that don’t use these technologies. Also, they might own a digital camera but it’s broken. I used to go through tech gadgets like most people go through toilet paper. It seems like they’re always breaking.

3) The seller doesn’t think it’s necessary to post a picture: I have a friend that was trying to rent out their home a few years ago. It was a nice house, but no one ever responded to their rental adds. I looked at the post and realized there were no pictures. When I asked my friend about it they said, “I didn’t think I needed any pictures.” It may not seem reasonable but it happens.

I still feel more comfortable checking something out online if I can see a picture first, but I know I’ve missed out on some good deals because of this. Things are harder to sell online if there isn’t a picture, but just remember that it could present a golden opportunity to buy something cheap. Odds are if a seller doesn’t post a picture they will have a harder time selling. If they’ve been trying for a while it might give you the leverage you need to make a good deal. Remember, there are A LOT of scams online, but pictures shouldn’t make or break a deal. Have I missed any reasons a seller wouldn’t post a picture online?

 
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Posted by on March 15, 2012 in Uncategorized

 

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A Cry For Help! Finding a Home to Rent

Over the past year I’ve known numerous people that have been having difficulties finding a home to rent. At the time I shrugged it off because I didn’t understand the difficulties that they faced. I thought to myself, “All I hear about is how terrible the housing market is. I bet there are tons of nice, cheap homes out there for rent and my friends just aren’t looking hard enough.” Unfortunately for me, they were right.

It makes sense to me, someone who doesn’t know a lot about real estate, that if you can buy a house for dirt cheap then you should be able to rent a house for cheap too. After starting my hunt for a rental I realized that isn’t the case.  The reasoning for this wasn’t apparent to me so I asked a friend from work, who I know owns rental properties, why people were still asking so much for rent. He explained that people that own rental homes need to build up a cash reserve to take care of any future problems that might occur with that home, and maintain the house and cover the mortgage in case it sits vacant. His reasoning makes sense, but I’m still not happy with the rent prices. Another thought that occurs to me is that with all the foreclosures as of late (Reno is the foreclosure capital) there must be a huge demand for rental homes. Unlike a high demand for home ownership drives prices down to get more bids, a high demand for rentals drives prices up. There is no way rental prices will go down when people have to live somewhere and are willing to pay that high price.

After looking for a few weeks, I’ve come to the understanding that I won’t get to live in the type of house I want.  The only thing I can do is keep looking. I don’t know how many of you have ever looked for a home to rent, but it isn’t a pleasant experience. I’ve tried looking online; I go to websites like Craigslist.com, Zillow.com, and rent.com. The frustrating thing about these sites is they advertise so many apartment complexes, but not many houses. Then, once you do find a house, there is a 50/50 chance it’s someone trying to scam you! I finally found a house that I’m interested in checking out.  I called the rental company that’s in charge of this property and expressed my interest. They told me that I needed to bring $40.00 down to their office so I can leave a deposit and pick up the key and a take a look at the house myself. I guess the days of people showing you the homes are gone. The funny thing about what they said to me is that I can only see the home Monday-Friday and it has to be between 8AM -3PM.  Those days and times just happen to be the same days and times I’m at work, and I’m pretty sure most people work a similar schedule. How does this company plan on renting out homes if their hours are so limited? In case you were wondering, yes I’m frustrated!

So the online hunting hasn’t been working out very well. Maybe a better thing to do would be to drive around neighborhoods I like and look for rental signs.  Because I’m on a budget, I’m looking for a small home. I found a few that looked small so I thought I was on the right path; however, when I called the owners I found out that the tiny houses on my list were all 4 bedroom homes and weren’t anywhere near my price range. I guess driving around doesn’t work as well as I thought it would.

Here is where I need help. I have 1 ½ months left until my lease is up, and I don’t have an effective strategy to find a home to rent. There has got to be an easier way, maybe a website that has a ton of listings for homes but excludes apartment spam, or just some other strategy that I haven’t explored yet. Do any of you have any ideas for me? I’d really appreciate them.

 
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Posted by on March 13, 2012 in Uncategorized

 

Penny Stocks? That’s the Best You’ve Got?

I just don’t get it. When I logged on to my computer this morning I opened up my browser and the first thing I see is “How thousands of people are making Fast Money in the stock market.” I wanted a good laugh so I opened the link. The article that opened was titled Penny Stocks Can Mean Huge Returns – If You Know The Right Ones To Buy. When I was 15 I would have loved this article. Now that I’m a little older, a little more educated, it just makes me mad. Here we are in the middle of horrific financial times: we are losing homes, we can’t retire when we plan on it, and we still can’t find jobs (or we took a huge pay cut). At this point in time we can use all the help we can get when it comes to investing, but instead of assisting us by showcasing valuable information they feed us crap!
I think the title says it all. Penny Stocks Can Mean Huge Returns – If You Know The Right Ones To Buy. ANY stocks can mean huge returns if you know the right ones to buy. Heck, I can play the lottery and get colossal returns if I know the right numbers to pick! I love the example they used in the article to help sell their idea. “Now imagine if you bought 20,000 shares of a penny stock at half a cent a share (which would cost you $100), and it goes to a dollar next week…” To that I say “Now Imagine if you bought 20,000 shares of a penny stock at half a cent a share (which would cost you $100), and it stays like that for years so your $100 is tied up. Meanwhile, you lose your job and can’t afford to eat. You try to sell your shares to get that $100 back, but the bid/ask spread is so far apart you end up only getting $20 back!” You might think both scenarios are unlikely, but I think the second is a lot more likely than the first.
Just in case you didn’t know, the bid/ask spread is the difference in price between what someone is willing to buy the stock for and what someone is willing to sell the stock for. It doesn’t play a big role with most normal stocks, but it plays a huge role in penny stocks. If you have a stock that is said to be worth $.01 but people are only willing to pay $.005 for it, you can’t sell it unless you take the lower offer. It works the other way around for buying penny stocks.
With our current economic condition it’s more important than ever for us to be careful with our personal finances. We all want a miracle, but penny stocks aren’t the answer. If it was that easy, everyone would be doing it. It may seem like $100 isn’t that much money. It might be worth the risk to make “fast money”, but if we thought like that all the time we’d be broke. If I haven’t changed your mind about penny stocks do a few things before you invest in them: 1) Look up a few, 2) Check their bid/ask spread (you can use yahoo finance), and 3) Watch them for a while. If you’re still into it, go for the gold.

 
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Posted by on March 8, 2012 in Uncategorized

 

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Stop Paying the “Dumb” Tax

Many of you may already be aware of the term the “dumb” tax, but until last night, I had never heard of this concept. My supply chain management professor was going over shipping processes (which can be extremely complicated and boring). He mentioned that it’s important to know what you’re doing so you don’t make a mistake and pay the “dumb” tax.  According to him it’s a real estate term used for someone that is new to a process. They make a mistake, which loses them money, and therefore they are taxed. If they would have been better EDUCATED on the topic they could have avoided the extra tax.

Now I thought this concept was hilarious. It may be a little insensitive, but I loved the name. The dumb tax, HA. What makes it even funnier, I can look back and recall many times I have paid this tax. I mentioned a few examples in my blog post 4 Mistakes I’ve Made So You Don’t Have To. Almost every transaction I made when starting in the stock market could be used as a perfect example of the dumb tax. The one thing that really stands out to me though, is when I bought my first car. I started out by only wanting to spend $5k on a car. Once I saw I couldn’t get much for that I pushed it all the way up to $10K. I knew I wanted something all-wheel drive, but I wasn’t really sure what else to look for (or avoid). I ended up deciding I wanted a Subaru WRX (turbo). Once I put my mind to it, I had to have that car. In my area, Reno-Nevada, there weren’t many WRXs around. When I finally found one I was so excited I rushed to go buy it (private party). I checked her out. She looked nice enough; after all she was a WRX. So I bought her! Seriously, I worked just like that: I looked at her and two minutes later I bought her. When I look back I wish I could yell “YOU IDIOT! GET THE CAR CHECKED OUT AND DON’T PAY TOP DOLLAR!” I rushed, and I paid the dumb tax big time. I was new to the process of buying a used car, and instead of learning about it I hurried through it and paid the price. After I bought my WRX I found out she needed at least $3K in work done to her within the next 10K miles and she needed new tires. So I ended up paying $14K for a car that was maybe worth $9K. I wish I would have taken the time to educate myself instead of taking a kick in the shorts.

Since the car debacle, I’ve learned a lot about the importance of having patience. When you make a $14K mistake it’s bound to teach you something.  Whether you’re a new investor or buying a new television service take the time to educate yourself. If you’re unwilling to do that then find someone you trust who knows SOMETHING about the topic. I think it’s funny how we all complain about taxes, but the amount of a single tax can be minuscule to the price you pay for paying the “dumb” tax. From now on I’ll take my time to learn about a topic before I make a purchase and skip the dumb tax all together.  

 
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Posted by on March 6, 2012 in Uncategorized

 

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Stocks- No Such Thing as Overvalued

With all these tech companies going public (LinkedIn, Pandora, Yelp ect.) I’ve been hearing the term “overvalued” a lot lately, but what does that term really mean? When someone says a stock is overvalued it’s important to keep in mind it’s just a matter of opinion. People say beauty is in the eye of the beholder. I would say value is in the eye of the beholder.  If you’ve ever watched the TV show Pawn Stars you’ll see continuous examples of this. A customer goes to the pawn shop to sell their grandmother’s shoelaces that are supposedly worth $1000. When Chum (a character from Pawn Stars) only offers them $5 they get offended and leave. The customer is mad because Chum thinks the shoelaces are overvalued at $1000. The thing to keep in mind is Chum has no idea how much the shoelaces will actually sell for. An item’s value is different for everyone.  This is why valuation is one of the hardest subjects to master.

How do we figure out the price on something if its value is different for everyone? Well, generally we go off its market value. It makes sense to me that market value is equal to the intrinsic value (real value plus outlying factors). An example of this is Yelp’s IPO. The real values of Yelp’s shares were evaluated at $15/share, but as soon as the markets opened the price shot up over 60% and closed at $24.58! This happened because the real value ($15) met with the outlying factors ($9.58) to create the market value ($24.58). I think it’s overpriced, considering they have never posted a profit, but just because I don’t see the value of the outlying factors doesn’t mean they aren’t there. That’s why I hate when people give specific stock picks. They have no clue what a stock is actually going to do. That’s why I think it’s better for people to use their own gut instincts when it comes to buying individual stocks. You might be in tune with some outlying factors that others aren’t.

If someone says a company is overvalued it means that they don’t see what the rest of the market see at that point in time. The real value and the value of the outlying factors are continuously changing. This means the stock’s intrinsic value  is always shifting. There is no way of actually knowing if a stock is overvalued, because it’s impossible know the future of its intrinsic value. There are so many outlying factors at work it’s incomprehensible to know them all. The only way you can even get close to knowing is if you are completely in tune with not only the company, but people’s perception of the company and their products. Anything short of that is pure speculation.

That being said, does anyone else feel like speculation is all we have left when it comes to investing in individual stocks?

 
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Posted by on March 2, 2012 in Uncategorized

 

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Sex Ratios & Men’s Finances- I Bet You Didn’t Know This

An academic study came out suggesting that men are less responsible with their finances when they live in an area with a male biased sex ratio (more men than women). The article is called The Financial Consequences of Too Many Men: Sex Ratio Effects on Saving, Borrowing, and Spending (from the journal of Personality & Social Psychology January 2012).  What the article comes down to is men spend more money when women are scarce. Now I’m sure the ladies love hearing stuff like this because it makes them feel special, and in all honesty it should. It shows that we need you, and are willing to go through extraordinary measures to get you.

When I first started reading this article I didn’t buy it. I always seemed to me that I spend way more money having a girlfriend then I would if I didn’t. All the dinners for two,  the vacations for two, and even filling up two gas tanks. No, this article had to be wrong. If men spend more money when women aren’t around then what are they spending it on?

As I read further, the picture began to fill itself in. Every man wants a woman. When there are more men than women it makes matching of partners impossible. Every man wants a woman, but they all can’t have one. So what do we as men do? Well, thousands of years ago we probably would have ran around beating our chests and killing each other to find out who’s the strongest. Since we can’t do that anymore (and women have more say in the matter), we go out and spend money to try and lure women into choosing us.

As it turns out, the more male biased the sex ratio, the more money women are expecting men to spend on them. If you can’t take them to a nice dinner and buy them expensive gifts they will find someone who can (I realize not all women are like this). So to prevent that from happening what do we do? We take on debt. So not only are we spending more but we also have more debt, and with more debt comes less savings; However, when the tides have turned (and there are more women than men), men spend less on their women.

I think this article is interesting because it shows us that there are underlying issues that affect our finances that we might not even think about. They use an example of two cities that are located close together, but their finances are completely different. The city that has more debt is the one with a male biased sex ratio. It’s an issue most of us would never have even thought about, but it seems like it could have a substantial impact. That’s why the study of psychology, sociology, and finance mixed together is so great. Have any of you heard about other psychological/sociological issues affect finances (I’m always looking for some good reading materials)?

 
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Posted by on February 26, 2012 in Uncategorized

 

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Forget Those Other Guys- Take Control of Your Own Finances

Can you believe all the crazy things that have happened within the last decade in the financial community? I’ve never heard about so many crooks within one industry; all the scandals have really affected my view on personal finance. I can’t turn on the news without seeing examples of people cooking the books or running Ponzi schemes. These really are unfortunate times. Luckily for us we can help ourselves when it comes to personal finance.

When I was looking up the definition of the word personal, many explanations came up. The one thing they all had in common is the word personal involves one person. I strongly believe that all the corruption in the finance world really shows us that everyone should take a hand on approach when dealing with their own finances. The days of having confidence that other people can take care of your money are over. Finance might not be the most interesting topic in the world (or even close to it), but it is one of the most important. People need to start educating themselves on their own investments and stop trusting others to take care of it for them. No one wants to lose everything because of financial greed. It’s a real life monster that will steal your heart and soul when you least expect it.

I understand it may not appear like an easy task, but you have a responsibility to yourself and your family to take care of your finances. Remember that no one will care about your money as much as you do. You don’t need to go off and start dealing in derivatives and swaps to make money; you can keep it simple and still be successful. I’m not ignorant to the fact that some people will continue to trust the wrong people. The way I see it, you already have enough market risks tied to your investments, so you don’t need to add risk by using an outsider to manage your investments.

For those of you that have no interest in managing your own investments I have one suggestion: Only use fee based financial institutions to manage your money. They have no ulterior motive when they give you advice. They aren’t making a commission by getting you to buy their products, and they won’t hedge their bets against you. I don’t think they are as good as taking responsibility for your finances, but they are definitely better than those other guys.

 
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Posted by on February 23, 2012 in Uncategorized

 

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