John's wife wants to go on a family trip to Disney World. John would rather invest the money. What should he do?

Labels: College Planning, Dave Ramsey TV Show, investing

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Tim is building a house and has cash to finish it. An investor suggested he take out a mortgage so he can invest 40K. Is this a good idea?

Labels: Dave Ramsey TV Show, investing, Mortgages

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When Paul Navone decided to give away millions of his hard-earned wealth to two area schools, the last thing he was looking for was fame.

In December, 78-year-old Paul Navone donated $1 million to Cumberland County College in New Jersey. He still has millions left. Navone has been a factory worker most of his life and never earned more than $11 per hour. His financial discipline has been praised in blogs and on the news. What is his secret?

1. He lived well below his means. Despite a net worth in the millions, he still frequents flea markets and rarely buys anything at full price. His wardrobe is almost entirely second-hand, he said, except for maybe the socks.

2. He allocated his time, energy, and money efficiently, in ways conducive to building wealth. Navone told Newsday, "I don't know when I buckled down and got serious about making money. It just grew into my lifestyle. With age, it got more serious. I never denied myself anything, but I certainly never spent on something outstandingly lavish." He set aside money and invested it in stocks and bonds. Along the way, Navone also bought rental properties in Millville and Atlantic City, NJ.

3. He believe that financial independence is more important than displaying high social status. Navone,who has neither a phone nor a television at his home is a multimillionaire. He has never taken advantage of his wealth in the way most people might large houses, fancy cars, lavish vacations. He drives an old-model SUV and lives in a small house in Center City Millville. And he still goes to the High Street McDonald's in Millville every day, where he announces bingo on Wednesday mornings for a group of seniors who meet there regularly.

4. His parents did not provide economic outpatient care. The middle of five children born to immigrants, Navone grew up modestly in Depression-era Vineland. His family was by no means wealthy poor as church mice, he said and his father worked as a laborer laying railroad ties while his mother was a homemaker. While his father was away at work, he said, Navone and his siblings cultivated half of the five-acre parcel in south Vineland they shared with another family, growing vegetables like sweet potatoes for sustenance. "Paul never inherited money, "[his broker] said last week. "Paul started from zero. He just worked hard." "Paul has always been the perfect client. He gave me money and never took it out," said his broker of 20 years, R. Douglas Smithson, senior vice president for investments at Wachovia Securities in Vineland. "He took my advice, he stuck to a plan, and he reaped the benefits of it."

5. He is proficient in targeting market opportunities. In the interim, he regularly worked 60-hour weeks. He made enough money to buy several rental properties throughout his life, either in Millville or Atlantic City, although he never owned more than three properties at any given time. The rental income, he said, was what enabled him to save his paychecks for a rainy day.

6. He chose the right occupation. As his wealth increased, he continued living frugally. He also never aspired to rise through the professional ranks, preferring to remain a wage earner.

Although he was only schooled to the eighth grade, 78-year-old city resident Paul Navone has had a lifelong love affair with numbers. It was that passion for math or figures, as he likes to call it that saved him from getting bored with his longtime factory job as a quality control technician at a local manufacturing plant.

Navone's broker, R. Douglas Smithson, said the septuagenarian has never received a windfall. "Paul never inherited money," Smithson said last week. "Paul started from zero. He just worked hard. He stayed the course even through the bad markets. Paul rarely ever took money out. He was the perfect client."

References:
Philly.com

Lending Club Blog

Labels: investing, Millionaire, Paul Navone, Wachovia

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I recently came across an article by Mary Dalrymple and she had a few good points about dealing with a recession.


Do not invest your grocery money in stocks. Just because the market took a steep dive keep the steady investing up every month and plan for the long run with the dollar cost averaging. This gives you plenty of time to weather the market’s cyclical ups and downs.

Take risks that let you sleep at night. Stocks will go up, and stocks will come down. If this rule has you reaching for a sleep aid, diversify your investments to match your tolerance for risk. Dave Ramsey recommends noload mutual funds and to put 25% into each of these four types of funds: Growth, Growth & Income, Aggressive Growth and International.

If it seems too good to be true, it is. Now that the market took a dive, my inbox gets loaded with different stock advice for some real winners, especially penny stocks that offer 400% returns. Plan for the worst-case scenario. Have a fully funded emergency fund, that is 3-6 months of living expenses saved.

Let your conscience be your debt guide. If times are tight for your family, you might not need that extra pair of shoes or eating out every other night. Actually, writing out a budget and sticking to it, can show you where you money is really going.

Labels: Budget, investing, mutual fund, recession

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Michelle and her husband have a $1.2 million net worth, $350k in the bank and 2 mortgages. Should they pay off their mortgages?

Labels: Dave Ramsey TV Show, investing, real estate

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I actually found an article on CNN Money that I agree with 100%. It discusses the advantage of dollar cost averaging over lump sum. This is the strategy I use on my Roth IRAs that enable me to sleep at night.

Labels: investing, IRA, mutual fund, Roth IRA

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Alexis Glick talks to Dave Ramsey about his advice for surviving this tough economy.

Part I:


Part II:

Labels: Dave Ramsey TV Show, investing

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Dave Ramsey gives advice to a new father who has 3k to invest.

Labels: Dave Ramsey TV Show, investing

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About 20 years ago I remember there were several pyramid schemes (not to be confused with legit multi-level-marketing organizations) going around. Today, they are still around in one form or another, now it is as a HYIP. High-Yield Investment Program (HYIP) disclose little or no detail about the underlying management, location, or other aspects of how money is to be invested and little information on how returns are actually generated.

These online HYIP schemes rarely last for more than a couple of months and typically accept small deposits while promising astoundingly high returns (the usual is 200% in three days). Promoters claim that the transactions must be kept strictly confidential by all parties, making client references unavailable. The Securities Exchange Commission warns about them and also prosecutes them. If it sounds too good to be true, it probably is.

Labels: HYIP, investing, money saving tip, Scam

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Studies show that the heaviest lottery players, the 20% of players who contribute 82% of lottery revenue, disproportionately are low-income, minority men who have less than a college education.

About one-half of American adults spend $45 billion annually on some 35,000 lottery games in 42 states, plus the District of Columbia, Puerto Rico and the U.S. Virgin Islands. It isn't news if someone earning $7 an hour scrubbing floors wins a dollar with a ticket, but it is news if they win big.

So who is playing the lottery? According to the National Coalition Against Legalized Gambling, in The Georgia Study,

*Blacks are three times more likely than nonblacks to be active lottery players.
*Males are almost four times as likely as females to be active lottery players.
*An individual without a high school degree or GED is more than four times as likely to be an active lottery player as an individual who has an education above the high school level.

Alabama is one of the few states that has successfully kept the lottery out. In a fact-finding study it was noted that legalizing a state lottery would create more than 16,000 new pathological gamblers, and cost the state more than $200 million socially and economically.

Do you play the lottery?

Have you ever won?

Labels: investing, lottery

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One of my brothers emailed me about buying the Iraqi Dinar and so I did some digging. Did you know that Utah Division of Securities lists Iraq Money as one of the biggest scams on the internet along with other currency trading? It has been almost five years since the current Iraqi Dinar (IQD) was introduced by the Coalition Provisional Authority some time between October 2003 and January of 2004. Since that time, a multitude of websites appeared and heavily promoted in the investment of the new Iraqi currency as a once in a lifetime opportunity to make a fortune.

The new Iraqi Dinar is real and not a scam itself, it's the selling of the Dinar without telling the buyer that they are doubling the price and that it can only be redeemed in Iraq. The promoters like to make a convincing sales pitch using the Kuwaiti Dinar (KWD) as an example of what can possibly happen. They want you to believe that your 1 million IQD will one day be worth between $100K - $1M USD. If the sellers really believed that, why are they not just hoarding it all for themselves? Why are they going through all the trouble setting up websites and buying Dinars to resell?

In comparison to Kuwait, this is the current status of Iraq:
*A broken infrastructure or no infrastructure
*$125 billion of external debt
*Millions of dollars in post-war debt
*No stable government
*An ongoing insurgency
*Limited oil production

The Vietnam Dong (VND) is another currency to take a look at. It has been almost 35 years since the end of the Vietnam War. It was not until 2001 was trading normalized with the U.S. In those 35 years, its infrastructure was being rebuilt and its economy is now on the rise. How long do you think it will be before you can make a profit on the dinar?

Labels: currency speculation, currency trading, investing, Iraqi Dinar

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The soaring price of gold is causing mining companies in South Africa to sink to astonishing depths. Gold Fields plans to drill to 2.5 miles (13,200 feet) at a mine outside Johannesburg, and that would be a record, reports National Geographic News. Other companies are not far below (or, above) that mark. But the deepest mine in the United States reaches just 8,000 feet.

Gold is never a good investment. You need to do all your investing based on the long term,five, 10 and twenty year track records. Gold, any way you analyze it, has a horrible twenty year track record. It is a high risk investment and it is a risk you should not take with your money

One dollar invested in bonds in 1801 would yield $13,975 today.
One dollar invested in stocks in 1801 would be worth $8.8 million today.
One dollar invested in gold in 1801 would be worth $14 today.

Labels: Gold, Greed, investing

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