Evaluating Your Personal Financial Statement

Month after month, many individuals look at their bank and credit statements and are surprised that they spent more than they thought they did. To avoid this problem, one simple method of accounting for income and expenditures is to have personal financial statements. Just like the ones used by corporations, financial statements provide you with an indication of your financial condition and can help with budget planning. There are two types of personal financial statements:

• The personal cash flow statement
• The personal balance sheet

Let's explore these in more detail.

Personal Cash Flow Statement

A personal cash flow statement measures your cash inflows and outflows in order to show you your net cash flow for a specific period of time. Cash inflows generally include the following:

• Salaries
• Interest from savings accounts
• Dividends from investments
• Capital gains from the sale of financial securities like stocks and bonds

Cash inflow can also include money received from the sale of assets like houses or cars. Essentially, your cash inflow consists of anything that brings in money.

Cash outflow represents all expenses, regardless of size. Cash outflows include the following types of costs:

• Rent or mortgage payments
• Utility bills
• Groceries
• Gas
• Entertainment (books, movie tickets, restaurant meals, etc.)

The purpose of determining your cash inflows and outflows is to find your net cash flow. Your net cash flow is simply the result of subtracting your outflow from your inflow. A positive net cash flow means that you earned more than you spent and that you have some money leftover from that period. On the other hand, a negative net cash flow shows that you spent more money than you brought in.

Personal Balance Sheet

A balance sheet is the second type of personal financial statement. A personal balance sheet provides an overall snapshot of your wealth at a specific period in time. It is a summary of your assets (what you own), your liabilities (what you owe) and your net worth (assets minus liabilities).

Assets

Assets can be classified into three distinct categories:

• Liquid Assets: Liquid assets are those things you own that can easily be sold or turned into cash without losing value. These include checking accounts, money market accounts, savings accounts and cash. Some people include certificates of deposit (CDs) in this category, but the problem with CDs is that most of them charge an early withdrawal fee, causing your investment to lose a little value.
• Large Assets: Large assets include things like houses, cars, boats, artwork and furniture. When creating a personal balance sheet, make sure to use the market value of these items. If it's difficult to find a market value, use recent sales prices of similar items.
• Investments: Investments include bonds, stocks, CDs, mutual funds and real estate. You should record investments at their current market values as well.

Liabilities 

Liabilities are merely what you owe. Liabilities include current bills, payments still owed on some assets like cars and houses, credit card balances and other loans.

Net Worth

Your net worth is the difference between what you own and what you owe. This figure is your measure of wealth because it represents what you own after everything you owe has been paid off. If you have a negative net worth, this means that you owe more than you own.

Two ways to increase your net worth are to increase your assets or decrease your liabilities. You can increase assets by increasing your cash or increasing the value of any asset you own. One note of caution: make sure you don't increase your liabilities along with your assets. For example, your assets will increase if you buy a house, but if you take out a mortgage on that house your liabilities will also increase. Increasing your net worth through an asset increase will only work if the increase in assets is greater than the increase in liabilities. The same goes for trying to decrease liabilities. A decrease in what you owe has to be greater than a reduction in assets.

Bringing Them TogetherPersonal financial statements give you the tools to monitor your spending and increase your net worth. The thing about personal financial statements is that they are not just two separate pieces of information, but they actually work together. Your net cash flow from the cash flow statement can actually help you in your quest to increase net worth. If you have a positive net cash flow in a given period, you can apply that money to acquiring assets or paying off liabilities. Applying your net cash flow toward your net worth is a great way to increase assets without increasing liabilities or decrease liabilities without increasing assets. 

The Bottom Line

If you currently have a negative cash flow or you want to increase positive net cash flow, the only way to do it is to assess your spending habits and adjust them as necessary. By using personal financial statements to become more aware of your spending habits and net worth, you'll be well on your way to greater financial security.

Read more: http://www.investopedia.com/articles/pf/08/evaluate-personal-financial-statement.asp#ixzz28JcbWX2o

How To Land A Finance Job With A Bachelor's Degree

Finance is an extremely competitive profession, especially at the entry level. The desks of investment professionals' are piled high with the resumes of students who have dreams of big money, nice cars and getting on the path to being Masters of the Universe by the time they are 30. Finance is also a cyclical job market: when the stock market is booming, finance jobs boom as well, but when returns dwindle, so do the job listings. And even when the market is flush with jobs, finding a good job is key. Follow these five tips to dramatically increase your chance of landing a finance job even before hitting graduation.

Tip No.1 - Land An Internship

For entry-level positions, interviewers do not expect candidates to know much. Many companies have orientation and training programs that teach new recruits the specifics of what they need to know, but having background knowledge is still expected. An internship can help to fill in for the lack of full-time experience and is not as difficult to get as a real job. Internships do not generally require much, if any, prior knowledge. They will likely be based around grunt work, performing tasks that anyone can do, such as making copies. But they provide learning experiences, references, networking opportunities and something tangible to talk about in an interview. Doing several internships also provides a great display of work ethic, which is a sought-after quality in the finance industry. 

Tip No.2 - Start Early

If you start in the summer before your first year in college, you can have a total of four summer internships before senior year. Is it necessary to do that many? No, but why not? Many finance internships are paid, so there are no excuses. If you are going to get a summer job anyway, it is better to do something that will further your career instead of just flipping burgers. The same holds true when attending college in a metropolitan area. Instead of working part-time at the local clothing store during the school year, file papers for a local investment advisor.

Tip No.3 - Diversify Your Experiences

Don't do five internships for equity traders unless you're 100% sure you want to trade for a living. Try to switch it up a little and land internships around the industry. This will help you gain a better perspective in different areas and help you figure out what you really want to do. If you want to research bonds, an interviewer is likely to ask why. If you had an internship in fixed income and another in equities, you can give a more eloquent answer than, "I just like bonds." Also, the different branches of finance are generally interconnected somehow. Portfolio management makes use of trading and research, for example. Knowing a little about how the different sectors of finance work can give you an edge in the job market.

Finally, work hard at any internship you land. The references can be valuable no matter what, but more importantly, impressing your bosses during an internship can be a great way to open doors for a future full-time job with that company. Many of the summer analyst/internship programs at big banks are created to look for entry-level hires for the next year.

Tip No.4 - Learn to Talk the Talk

To get a job in finance, you should ideally pick a business-oriented major like finance or economics. Many companies say that this does not matter, and it is very common to hear, "We hire all majors - we even have art history majors working at XYZ Company." All is not lost for the art history majors, but it is still certainly better to apply for finance jobs with a finance degree.

Another great way to learn is to make reading the financial news part of your regular routine. Pick up a subscription to The Wall Street Journal and/or the Financial Times and read it every day. As a student, you can normally get discounted subscriptions for these publications. Picking up a weekly magazine like The Economist orBarron’s will help expand your knowledge as well.

Immersing yourself in financial reading will help you get used to the terms and jargon of Wall Street, which is one of the biggest hurdles to cross. Do you know what MBS, CDS, BPS, EBITDA and federal discount rate mean? Regularly reading the financial news throughout college will help you pick up all the basics in due time. Even if you are studying this vocabulary in your courses, reading more about finance will help you to solidify that knowledge and feel more comfortable discussing it. Other ways of picking up financial knowledge are reading investing books, from basic to advanced topics, and reading tutorials and guides from financial websites (looks like you're already on the right track there). Treat learning the financial language the same as learning a foreign language. Instead of ignoring words that you don't understand, look those terms up to help broaden your knowledge.

Tip No.5 - Start Your CFA

As stated earlier, the job market in finance is always very competitive. Many applicants will have high GPAs and degrees from good schools and will have done the things listed above. It is always good to go above and beyond to differentiate yourself from the pack. One way of doing this is to take the Chartered Financial Analyst (CFA)Level 1 exam. The CFA designation is well respected in the financial industry. You'll need to pass three exams and have four years of eligible work experience to obtain the designation, but the first exam can be taken in the final year of a bachelor's program, either in December or June.

Financial professionals know the amount of time and dedication that the program entails (a minimum of 250 hours of study is recommended per exam), so coming out of an undergraduate program having passed the first exam will certainly make you stand out among other job candidates. The commitment to the program will display your work ethic and dedication to finance.

The Bottom Line

In both good and bad times, it is difficult for undergraduates to land a good entry-level position. Your resume is going to get lumped in with hundreds of others from candidates with strong credentials. The competitive nature of the finance job market means that focusing early, gaining experience with internships and gaining knowledge from following the news and reading will help you stay at the front of the pack. Finally, doing something to break off from the pack, like entering the CFA program in your final year of college, can better your chances of landing a good job. Work hard and good luck!

Read more: http://www.investopedia.com/articles/financialcareers/08/five-undergrad-tips.asp#ixzz28JbtpWhc

4 Ways To Get A Head Start On Your Financial Career

In the 1970s, financial planners essentially had two career choices: they could become stockbrokers or insurance agents. Their paths were set, and the expectations were simple. Much has changed since then. There are many more choices available, but this also means that students are expected to know more and do more than ever before in fierce competition. Preparing for a career in financial planning requires a great deal more training in areas that were traditionally relegated to other professions, such as accounting and psychology.

In this article we'll explore things that recent and soon-to-be graduates can do to decide where they want their financial planning career to go and to then get a leg-up on the competition.

Prepare Before You Graduate

Perhaps the first and most obvious course of action is to simply choose an appropriate major. These include business, economics, finance or accounting. Personal financial-planning programs are being offered at more universities, both at the graduate and undergraduate levels. These programs can be especially helpful because they also often touch upon a number of topics that other programs fail to cover. These topics include consumer rights, the dynamics of finance within the family and the psychology of retirement.

Traditional financial-planning curricula will only cover material that is directly relevant to the Certified Financial Planner (CFP®) Board exam, such as investments, insurance and taxes. Therefore, choosing financial planning as a major will provide students with a much broader base of knowledge from which to begin their careers. Understanding the psychology of finance and investing will be an invaluable aid when dealing with clients, and is in fact a skill that all financial planners must master to some extent. 

Extracurricular Activities

Of course, choosing the correct major is only one step that students can take to further their careers before graduation. There are a number of other options available to students that will look good on a resume to prospective employers. Here are some examples.

• Preparing Income Tax Returns - This is a good, practical skill that can greatly benefit the student in a number of ways. In addition to providing solid, hands-on experience with customers in the financial industry, it will also teach the student basic tax information that will be tested on the CFP® Board exam.
  
• Working at a Bank - Student planners often find that working at a bank provides multiple career benefits. It's a job that easily fits around an academic schedule. The pay is better than many other after-school jobs. It looks good on a resume, gives practical work experience and shows that you are a responsible person.
  
• Sitting for the Enrolled Agent Exam - This exam is administered by the IRS every September. The test covers virtually all of the tax material found in the CFP® Board exam. Passing this test and earning this designation will be an impressive credential to present to prospective employers in any field of financial practice. You'll also gain a tremendous advantage over CFP® applicants that have had no previous tax training.
  
• Internships - Working as an intern at a financial planning firm will provide obvious benefits for any student. However, while any internship can be beneficial, working at a smaller company will likely provide more hands-on experience with clients and the financial planning process than a larger firm, where interns are often relegated to administrative support or marketing roles.

Finding a Job

Graduates have a number of tools at their disposal that can greatly increase their exposure to the financial community. Obviously, a graduate who completed an internship at a local company has a substantial advantage over an unknown competitor in the job-selection process.

For those who do not have this luxury, the Internet can be an indispensable resource. Websites such as brokerhunter.com continually list all available postings from many companies. Those who prefer to take a face-to-face approach and network themselves (and even those who don't) would be wise to join the local chapter of a financial planning organization, such as the Financial Planning Association or the National Association of Insurance and Financial Advisors. These groups offer many resources to both rookie and veteran planners and are well worth the cost of membership. Their websites often contain job postings, too.

After Graduation

Knowing what job is the best fit for you can be a challenge. Here are some more items to consider when choosing your career path:

• There are a number of different business models being used in the financial planning industry today. Stockbrokers and insurance agents generally work on commission, while Registered Investment Advisors tend to charge either an hourly fee or a percentage of assets under management as compensation.
  
• The size of the company matters. Large companies will provide such amenities as office space, business cards and letterhead. However, larger companies may also have stiff production quotas, lower payouts on commissions and a highly regulated environment.
  
  In turn, small financial companies offer a more relaxed atmosphere and a more comprehensive array of products and services. Working at a smaller firm can also provide a much broader range of experience for new representatives, who may have the freedom to implement a well-rounded financial plan for a client. This plan could include such things as mortgage planning and income tax preparation. It's doubtful you would have this kind of responsibility at a large company.
  
• Training and support differ from company to company. Financial firms such as Smith Barney or Northwestern Mutual will provide their employees with all the necessary education and training that they need in order to pass the requisite tests, as well as thorough sales and product training. Many new advisors will benefit from the training programs offered by the large companies. Even if you ultimately lose out to the competition at a large firm, you will still have marketable skills that are attractive to small firms that can't provide the kind of training and licensing you've received.
  
• Finally, regulations from the Financial Industry Regulatory Authority require sponsorship by a broker/dealer in order to sit for any securities licensing exam.

The Bottom Line

College students have many things that they can do to improve their marketability before graduation. Once you're out in the real world, remember that the initial key to success in the financial planning business is persistence. Some graduates will find their place in the field immediately, while others may have to try a few different working environments to find the one that best suits them. Hard work and perseverance will always pay off for those who are willing to risk failure to achieve their dreams.

Read more: http://www.investopedia.com/articles/financialcareers/07/student-advice.asp#ixzz28JX7DuSu

5 Ways To Fund A College Education

According to CNNMoney, the average tuition cost at the average public university rose over 8% in 2011. The following tips are designed to dissuade you from skipping college because you think you can't afford it, and to show you some strategies for making higher education expenses fit into your budget.

Choose Your School 

Go to an in-state public school or a public school in a surrounding state that has reciprocity for reduced tuition, which will be much lower than rates at a non-reciprocal out-of-state public school or a private school. If you are not satisfied with the quality of the state schools where you live, consider moving to a state with schools you like and establishing residency.

To establish residency, you will have to meet strict requirements that vary by state and sometimes even by school - but for the savings, it may be worth it. Most states require you to live in the state for at least one year in order to be eligible, but there are other criteria to meet as well. In California, for example, it is very difficult for students who don't have a parent living in California to establish residency before their mid-20s. In addition to living in-state for 366 days immediately prior to requesting resident status, potential students must provide objective documentation demonstrating an intent to make California their permanent state of residence, such as a driver's license, ownership of property or steady employment, as well as financial independence.

If you can wait it out and meet these criteria, then you can attend quality schools at in-state rates. 

Another money-saving strategy that doesn't involve postponing college is to apply to schools that have a shortage of people like you. People like you could be people interested in your major, people from your state, people with your ethnic background, people who are as smart as or smarter than others applying to the school, people who play the unusual instrument you play or any other number of traits. Schools where you'd be a unique addition may give you scholarships.

Think About Cost of Living

Keep in mind that housing and other living costs will vary by location, especially if you choose to live off campus. An apartment in New York City will be much pricier than an apartment in the Midwest. Also, the college where you obtain your undergraduate degree can sometimes influence where you will end up working and living after school. If possible, choose a location where you'd actually want to live, where the cost of living is affordable, and where your school will be a recognizable name that will allow you to get more mileage from your diploma. UCLA may be considered a good school in the West, but may not be held in the same high regard in New York.

Don't Get Just Any Job to Pay for School

Make your job count by sticking to high-paying work. To find high-paying work, especially for summer jobs when you'll be free during business hours, seek out office jobs through temp agencies. Temp agencies do most of the job hunting work for you, and the office jobs they offer tend to pay above minimum wage, provide work experience closer to the situations you'll encounter post-college, and may give you connections that will help you land a meaningful internship or your first salaried position. Also, despite what the name implies, you can find both short and long-term jobs through temp agencies.

If you can't get a high-paying job, get a job that will keep your living expenses down, such as working in a restaurant where you get free food. If you work at a bakery, for example, any unsold goods at the end of the day may be fair game for employees since the business can't sell day-old bread. Another possibility is to find a campus job that offers perks. If you can get a job in your school's residential life office, you may be able to get a discount on housing during the school year or the summer.

If you're still in high school, start working now and save all your paychecks for college. You're still living at home; you probably don't have high living expenses chomping into your earnings like you will later on. Also, see if your high school has a program that will allow you to leave school at noon every day to go to work during your senior year. This will increase your job options, including opening up the possibility of the aforementioned office job, and allow you to work more hours.

Be Flexible with Your Schedule

Some college programs, such as engineering, are more intense than others, making it quite difficult to work while in school. For these programs, consider attending school part-time so you can still work part-time. Even if you're not in an overly demanding program, attending school part-time can help you spread out tuition costs and free up more time to work. However, part-time students may not have the option of living on campus, which can make it more difficult to be involved in the social aspects of college.

Wait

Another option is to take a year or two off after high school to work full-time so you can save up enough money to make school affordable. If you don't want to postpone college, you could take your classes during evenings and weekends in order to work full-time during the week. This strategy may take more than four years to complete, but it can be easier to budget. One argument against this approach is that many people find it easier psychologically to go straight from high school to college because study habits are still ingrained.

With education costs as high as they are and certain financial situations that fall outside the norm, even some middle-class parents may not be able to make significant contributions to a child's higher education costs despite what the formulas insist.

If you have a lot of patience, you can wait until you become an independent student as defined by the Higher Education Act, which has a different definition of "dependent" than the Internal Revenue Service (IRS). If you identify with some of the following you may qualify as an independent student.

• 24 years or older by December 31 of the award year
  
• Orphan or ward of the court
  
• Armed Forces Veteran or serving actively
  
• Graduate or professional student
  
• Married
  
• Dependents other than a spouse
  
• Student for whom a financial aid administrator makes a documented determination of independence by reason of other unusual circumstances

Being an "independent student" under the Higher Education Act could make you be eligible for more financial aid because the financial aid formulas applied to this group won't take parental contributions into account.


The Bottom Line

Some of these measures are purely practical and don't take into account many of the intangibles of the college experience, such as the learning experience of freshman dorm life. Before you start on your college plan, consider everything you want to get out of college so that you don't have regrets later. Although you may have to make some sacrifices that your peers don't, such as starting school later or staying in the state, you can still have the experience you want and attain a degree that will lead to a financially successful and stable future.

Read more: http://www.investopedia.com/articles/pf/08/affordable-college-education.asp#ixzz28JV1tjSu

Print Textbooks Vs. E-Textbooks

For college students, deciding on what textbooks to buy can be a tough decision. The emergence of e-textbooks has only made that decision more difficult to make. Now students must decide whether they want to buy a traditional paper textbook or an e-textbook. Students should use criteria such as cost, efficiency and personal comfort before making their purchases.

Price

Price will be the most important factor for many students. There is no doubt that college is expensive and the costs of a post-secondary education will only continue to rise. After paying for tuition, fees and various other expenses, there might not be enough money left to allocate towards traditional textbooks.

Even when you consider that certain sites sell textbooks at a much cheaper price, e-books still will be the more affordable option. A quick review of a textbook retailer will show that the online version of a textbook can be up to 60% cheaper than its print equivalent, but that is not the only factor to consider. If you already own a laptop, then there will be no extra costs necessary, as your laptop will be compatible with the e-book. Nevertheless, if you don't own a working laptop, then you will more than likely have to buy a tablet.

e-book Readers	Price Range
Kindle	$70 to $499
Android Tablet	$50 to $350
Netbook computer	$300 to $500
iPad	$500 to $900
Laptop computer	$500 to $2000

A review of the leading tablet retailers will show that you will be paying up to $900 for a tablet. That high of a price may not be necessary for a student, but depending on how many e-books you will be buying, one of the cheaper ones may not be an option, as they tend to have less storage space and may not be able to hold all of your books. At the end of the semester, you can always try to sell your paper textbooks in order to get some of that money back. When you buy an e-book, it cannot be returned.

There are also several miscellaneous costs to consider, including insurance and maintenance of your laptop/tablet. If you damage the book or leave too many annotations, then you may not be able to sell it back. There's also the possibility that you may not be able to use the book for more than one semester as a new edition may be released, rendering your version obsolete.

Here are some additional factors to consider:

Weight

If you have multiple classes in one day, then traditional textbooks may present a problem for you. Textbooks are heavy and typically contain thousands of pages, so carrying multiple books in your bag might put a strain on your back. With e-books, you would only need to carry one device that will house all of your books.

Notes

When you are in class listening to a professor's lecture, writing notes and highlighting important text can help you study efficiently. With traditional textbooks, this is always an option as all you would need to do is own the book. Only some e-books allow you to highlight and write notes.

Extra Features

This is one category that the e-book absolutely dominates. If you're buying a textbook, especially a used one, you are getting the book and the book alone, whereas e-books typically come with a myriad of extra features which can range from an integrated dictionary, online and media tie-ins that go over sections of the book, and a text-to-speech reader.

The Bottom Line

When deciding between buying a print textbook or an e-textbook, a good idea would be to create a list of pros and cons for each option and rank them based on importance.

Read more: http://www.investopedia.com/financial-edge/0912/print-textbooks-vs.-e-textbooks.aspx#ixzz28JUOvbnb

6 Ways To Avoid Paying For Hotel Wi-Fi

It's not hard to find free Wi-Fi as long as you're not staying at a hotel. How many times have these annoying series of events played out for you? After a long day of traveling, you finally make it to your hotel. All you want to do is go to your room, kick off your shoes and check your email, surf the net or watch a movie on your laptop.

When you get there, you're relieved to see a strong Wi-Fi signal in your room so you log on, but rather than bouncing straight to the net, you see pricing options. You don't need 24 hours of Wi-Fi since you'll be asleep for most of it, so paying $10 to $15 for a few hours of service doesn't seem cost effective to you. You could use your phone, but the screen is too small for your tired eyes. Having to pay for Wi-Fi at a hotel seems contrary to the idea of true hospitality, but fortunately there are ways around the charge.

Head Downstairs

Wi-Fi may come with a price when you're in your room, but in the lobby, bar and other common areas it may be free. Much like other restaurants, setting up an environment for business lunches and dinners encourages more traffic to the restaurant, making Wi-Fi a necessity since other restaurants close by are likely to offer the service free-of-charge. Head downstairs with your laptop or tablet and you'll likely find a connection.

Tether

Most cell phone carriers provide an option to use your cell phone as a hotspot that provides connectivity to your tablet or laptop. Newer phones allow for a wireless connection that requires only a password.

The downside is that tethering will cost money. In order to use the option, you'll have to enable it with your cell service provider. If you're not a frequent traveler, paying the fee for hotel service may be cheaper than paying for the tethering service, even for a month or less.

Rent an Aircard

If you are a person who travels frequently, an aircard provides a connection to the Internet regardless of where you are. Unless you travel frequently, paying $35 or more each month for the card isn't cost-effective. To solve this problem, some companies allow you to rent an aircard for around $6 per day. With some hotels charging $9.95 or more each day for Internet service, renting an aircard is not only cheaper, but it allows you to take it with you, ensuring service anywhere you go while traveling.

Loyalty Has Privileges

Even if you don't travel many times a year, try to remain loyal to the same hotel chain. Just as airlines have frequent flyer programs, hotels have similar loyalty programs that come with privileges as you amass more points. Often one of the perks that come with even the lowest levels is free Wi-Fi. Sometimes just being a member of their loyalty program is enough to earn the privilege regardless of how infrequently you book a reservation. Having your contact information for advertising is more valuable than charging you for Wi-Fi.

Just Ask

Hotels are in the hospitality business and they know that saying no to a customer is bad for business. Rather than complaining about the fact that even fast food restaurants offer free Wi-Fi, politely ask if they can provide the service free to you. If you're a frequent guest, they'll likely say yes and if they do say no, they'll probably help you find a way to get connected free-of-charge.

Become a Hacker?

There are numerous Internet sites that tell you how to work around the hotel Wi-Fi system to obtain free service, but it's unethical. You may have to make changes to your computer that could cause you to lose connectivity even when you leave the hotel. The network settings in your computer aren't easy to navigate if you aren't an IT professional. Instead of trying to steal a hotel service, pay the fee or go without it for a night.

The Bottom Line

Although a hotel may charge $10 or more for 24 hours of Internet service, there are ways to avoid paying the fee. If it's not available for free in its restaurant, consider eating at a nearby restaurant or go without connectivity for a night. It wasn't too long ago that people found a way to live a prosperous life without a constant connection to the Internet.

Read more: http://www.investopedia.com/financial-edge/0912/6-ways-to-avoid-paying-for-hotel-wi-fi.aspx#ixzz28JSpLHZt

The Everyday Lives Of Frugal Billionaires

When you think about the richest people in the world, you may envision them surrounded by all the trappings of wealth: race cars, yachts, mansions and other toys that most of the rest of us can only dream about. The term "frugal billionaire" may seem like an oxymoron, but a small subset of the richest of the rich are well-known for their penny-pinching ways. While most people will never have that kind of money to throw around, everyone can take a page from the fiscally-responsible habits of these billionaires. 

Warren Buffett

Probably the most famous cheapskate since Scrooge, Buffett lives a modest lifestyle despite his net worth of around $44 billion. He purchased a five-bedroom house in Omaha in 1958 for $31,500 and has lived there ever since. Buffett doesn't spend his money on electronics and reportedly doesn't carry a cell phone or have a computer at his desk. Although he could afford a whole fleet of limousines to be at his beck and call, he prefers to drive himself and owns a Cadillac DTS, which comes in at a modest $50,000 or so. When it comes to entertainment, the investment mogul shuns splashy parties and trips and spends his time playing bridge.

Mark Zuckerberg

Zuckerberg makes the list as the world's youngest billionaire. Though he's still in his 20s, this Facebook creator has an estimated net worth of $17.5 billion. Almost all of his money is tied up in the social media company's equity. It can be argued that Zuckerberg simply hasn't had enough time to splash his wealth around or that it really doesn't exist until he takes the company public later this year. By all accounts, Zuckerberg keeps his life low-key and spends up to 16 hours a day at the office. He doesn't own his home, but prefers to rent a house down the road from Facebook's Palo Alto headquarters. Zuckerberg chooses t-shirts and jeans over expensive tailored suits and sneakers and sandals over Italian leather loafers.



Carlos Slim Helu

In 2010, Helu passed Bill Gates on the billionaire list to become the richest man in the world, with an estimated net worth of $69 billion. He built his fortune in Mexico, where he owns over 200 companies including Telmex, the country's largest telephone service provider. He shares many frugal traits with Warren Buffett, including living in a modest home and eschewing computers. Helu, widowed since 1999, spends most of his downtime at home with his six children and his grandchildren. In a country where security is often sketchy, he still chooses to drive himself wherever he goes. Although much more dandily dressed than Mark Zuckerberg, Helu purchases most of his clothing off the rack from one of the many retail franchises he owns.



John Caudwell

You might argue that Caudwell, now retired from the British cellphone empire he built from scratch, doesn't belong on this list at all. He owns many rich toys including a helicopter, yacht and a car worth more than most people's homes. When it comes to wasting money, Caudwell is a skinflint at heart. He cuts his own hair because he thinks barbershops are a waste of time and money. He buys his clothing off the rack at the British retailer Marks and Spencer. Before retirement, he would bike 14 miles to work each day rather than have someone drive him in his Bentley. Now, he bikes 40 miles every week to and from his favorite pub.

The Bottom Line

The uber-wealthy don't always live the high life, which helps them stay rich. The frugal billionaires listed above all came from modest means and frugality was learned and practiced by their families. They carried these lessons with them in business and, one hopes, they will pass them on to their children.

Read more: http://www.investopedia.com/financial-edge/0412/the-everyday-lives-of-frugal-billionaires.aspx#ixzz28JPtDUir

A look at the stock/quotes table

Open any financial paper and you will see stock quotes that look something like the image below. In this section, we'll explain how to make sense of these tables so that you can use the information to your advantage.

Let's take a look at the stock/quotes table:

Columns 1 & 2: 52-Week High and Low. These are the highest and lowest prices at which a stock has traded over the past 52 weeks (1 year). This typically does not include the previous day's trading.

Column 3: Company Name and Type of Stock. This column lists the name of the company. If there are no special symbols or letters following the name, it is common stock. Different symbols imply different classes of shares. For example, "pf" means the shares are preferred stock.

Column 4: Ticker Symbol. This is the unique alphabetic name which identifies the stock. If you watch financial TV, the ticker tape will quote the latest prices alongside this symbol. If you are looking for stock quotes online, you always search for a company by the ticker symbol. If you don't know a particular company's ticker symbol, you can search for it at Yahoo Finance.

Column 5: Dividend Per Share. This indicates the annual dividend payment per share. If this space is blank, the company does not currently pay out dividends.

Column 6: Dividend Yield. The percentage return on the dividend, dividend yield is calculated as annual dividends per share divided by price per share.

Column 7: Price/Earnings Ratio (P/E ratio). This is calculated by dividing the current stock price by earnings per share from the last four quarters. (For more on how to interpret this, see Understand The P/E Ratio.)

Column 8: Trading Volume. This figure shows the total number of shares traded for the day, listed in hundreds. To get the actual number traded, add two zeros to the end of the number listed.

Column 9 & 10: Day High and Low. This indicates the price range in which the stock has traded throughout the day. In other words, these are the maximum and the minimum prices that people have paid for the stock.

Column 11: Close. The close is the last trading price recorded when the market closed on the day. If the closing price is more than 5% above or below the previous day's close, the entire listing for that stock is bold-faced. Keep in mind, you are not guaranteed to get this price if you buy the stock the next day because the price is constantly changing, even after the exchange is closed for the day. The close is merely an indicator of past performance and, except in extreme circumstances, it serves as a ballpark of what you should expect to pay.




Column 12: Net Change. This is the dollar value change in the stock price from the previous day's closing price. When you hear about a stock being "up for the day," it means the net change was positive.

Quotes on the Internet
Nowadays, it's far more convenient for most people to get stock quotes off the internet. This method is superior because most sites update throughout the day and give you more information, news, charting and research.

To get quotes, simply enter the ticker symbol into the quote box of any major financial site like Yahoo Finance, CBS Marketwatch, or Quicken.com. The example below shows a quote for Microsoft (MSFT) from Yahoo Finance. The data can be interpreted exactly as it would if it were from the newspaper.

Read more: http://www.investopedia.com/university/tables/tables1.asp#ixzz28JJkx9Ou

A look at a currency table

Now, let's take a look at a currency table:

Row 1 & Column 1: Currency Name (or symbol) The currencies are exactly the same in both the column and the row. This table allows you to compare the value of a currency in relation to another. The only exception on this table is gold, which is commonly quoted in currency tables because it is considered to be an alternative currency that anyone can purchase.

If you are reading this table the values are in the following context:

$1 in currency of row #1, is worth $___ in column #1 dollars.

For example, 1 euro is worth $1.3926 in Canadian dollars. If you were in Canada and you wanted to exchange your 1 euro for Canadian dollars, you would get $1.3926 in return. On the other side of the equation, if you had $1 Canadian and you wanted to convert it to euros, you would get 0.7181 in return. Both of these numbers are circled in red on the table.

It is also important to note that 1/1.3926 = 0.7181. If you only have the currency rate for one direction, then all you need to do is divide one by that number to find the value in the other country's currency.

Read more: http://www.investopedia.com/university/tables/tables5.asp#ixzz28JIVJCza

A look at the mutual fund table

Take a look at the mutual fund table below:

Columns 1 & 2: 52-Week High and Low. These are the mutual fund's highest and lowest over the previous 52 weeks (1 year). This typically does not include the previous day's price.

Column 3: Fund Name. This column lists the name of the mutual fund. The company that manages the fund is written above the column in bold type.

Column 4: Fund Specifics. Different letters and symbols have various meanings. For example, a "*" means the fund is retirement account eligible, "N" means no load, "F" is front-end load, and "B" means the fund has both front and back-end fees. For other symbols, see the legend that accompanies the financial tables in your newspaper.

Column 5: Dollar Change. The dollar change in the price of the mutual fund from the previous day's trading.

Column 6: % Change. The percentage change in the price of the mutual fund from the previous day's trading.

Column 7: Week High. The highest price at which the fund traded during the past week.

Column 8: Week Low. The lowest price at which the fund traded during the past week.

Column 9: Close. The last price at which the fund traded.

Column 10: Week's Dollar Change. The dollar change in the price of the mutual fund from the previous week.

Column 11: Week's % Change. The percentage change in the price of the mutual fund from the previous week. 

Read more: http://www.investopedia.com/university/tables/tables4.asp#ixzz28JHnCUuf

A look at the bond table

Let's take a look at the bond table, and see how to break it down. 


Column 1: Issuer. This is the company, state, province or country that is issuing the bond. 

Column 2: Coupon. The coupon refers to the fixed interest rate that the issuer pays to the lender. The coupon rate varies by bond. 

Column 3: Maturity Date. This is the date when the borrower will pay the principal back to the lenders (investors). Typically, only the last two digits of the year are quoted, so 25 means 2025, 04 is 2004, etc. 

Column 4: Bid Price. This is the price that someone is willing to pay for the bond. It is quoted in relation to 100, regardless of the par value. Think of the bond price as a percentage, a bond with a bid of $93 means it is trading at 93% of its par value. 

Column 5: Yield. The yield indicates the annual return until the bond matures. Yield is calculated by the amount of interest paid on a bond divided by the price -- it is a measure of the income generated by a bond. If the bond is callable it will have a "c" followed by the year in which the bond can be called. For example, c10 means the bond can be called as early as 2010. 

Read more: http://www.investopedia.com/university/tables/tables3.asp#ixzz28JH2UqLJ

A look at the Options table

Let's take a look at the Options table:

Column 1: Strike Price. This is the stated price per share for which underlying stock may be purchased (for a call) or sold (for a put) by the option holder upon exercise of the option contract. When you exercise a call option, this is the value for which you purchase the shares. Option strike prices typically move in increments of $2.50 or $5. In the example above, the strike price moves in $2 increments.

Column 2: Expiry Date. This shows the end of the life of an options contract. Options expire on the third Friday of the expiry month.

Column 3: Call or Put. This column refers to whether the option is a call or a put. A call is the option to purchase, whereas a put is the option to sell.

Column 4: Volume. This indicates the total number of options contracts traded for the day. The total volume of all contracts is listed at the bottom of each table.

Column 5: Bid. The price someone is willing to pay for the options contract. To get the cost of one contract you need to multiply the price by 100.

Column 6: Ask. The price for which someone is willing to sell an options contract. To get the cost of one contract you need to multiply the price by 100.

Column 7: Open Interest. Open interest is the number of options contracts that are open. These are contracts that have not expired or have not been exercised.

Read more: http://www.investopedia.com/university/tables/tables6.asp#ixzz28JFzYsK6

Morgan Stanley’s Best Stocks for Long-Term Growth

Laura Joszt

Published: Monday, October 1st 2012

Although stock picking is incredibly inaccurate and often wrong, that doesn’t stop analysts from predicting which stocks they think will do the best. Given the state of the world, Morgan Stanley has come up with its list of stocks that do well no matter how the economy is doing.

Europe is still fighting off a debt crisis, China’s economy is finally slowing down and the U.S. is facing a scary fiscal cliff at the end of 2012 (in addition to the end of the world?). Plus, investors seem to be scared of stocks again. And the truth is no one can really predict where the economies of the world are going — although they will try their hardest to come up with accurate indicators.

Business Insider has posted the 42 stocks on Morgan Stanley’s list that should help investors in this uncertain environment. These companies benefit from strong long-term growth prospects, so don’t expect to make a quick buck and get out like other stocks.

Here are the companies on the list with the highest earnings per share (EPS) growth.

Note: The EPS growth is the projected compound annual growth rate (CAGR) from 2011 to 2014; the P/E estimates are based on 2012 EPS expectations; and the PEG ratio refers to the price earnings to growth ratio, which is an indicator of the stock's valuation.

Stock information and estimates are from Morgan Stanley.

10. Lululemon Athletica

Ticker: LULU
EPS growth: 29.9%
P/E 2012: 40.0
PEG ratio: 1.3

9. American Tower

Ticker: AMT
EPS growth: 34.3%
P/E 2012: 50.1
PEG ratio: 1.5

8. Apple

Ticker: AAPL
EPS growth: 34.4%
P/E 2012: 15.4
PEG ratio: 0.4

7. Under Armour

Ticker: UA
EPS growth: 34.5%
P/E 2012: 45.1
PEG ratio: 1.3

6. Rackspace Hosting Inc.

Ticker: RAX
EPS growth: 35.3%
P/E 2012: 87.0
PEG ratio: 2.5

5. Michael Kors Holdings

Ticker: KORS
EPS growth: 40.0%
P/E 2012: 37.2
PEG ratio: 0.9

4. (tie) Fusion-io

Ticker: FIO
EPS growth: 43.8%
P/E 2012: 83.6
PEG ratio: 1.9

4. (tie) Amazon

Ticker: AMZN
EPS growth: 43.8%
P/E 2012: 327.9
PEG ratio: 7.5

2. Crown Castle

Ticker: CCI
EPS growth: 50.1%
P/E 2012: 67.6
PEG ratio: 1.3

1. Linkedin Corp

Ticker: LNKD
EPS growth: 89.9%
P/E 2012: 214.1
PEG ratio: 2.4

The information contained in this article should not be construed as investment advice or as a solicitation to buy or sell any stock.

Read more:
Morgan Stanley: These 42 Stocks are Winners No Matter What Happens in the Economy – Business Insider

How the rich get richer and you can, too

By Mitch Tuchman

We all know, innately, how the rich get richer. Money begets money. But how does that actually happen, aside from compounding interest and purely financial factors?

You could take the cynic's view that the game is rigged. But the more accurate answer, backed by research, is that the rich get richer because of great parenting. How rich you become over your lifetime is directly related to how early you capture the basic truths of finance and investing.

You have seen the exception that proves the rule, the rich kid who blows his family's wealth in a generation through poor decisions. Chalk that up to absentee parents. Truly, teaching is the missing link.

According to a report in Time magazine :

In a paper unveiled a few months ago, researchers led by Annamaria Lusardi, professor of economics at George Washington University, found that an early understanding of financial concepts accounts for as much as half of the wealth gap between the affluent and those with low incomes . Lusardi also found an exponential effect: Those who acquire financial understanding early tend to accumulate assets faster and those with more assets tend to keep learning about personal finance because they have more at stake. (Emphasis added)

There are two powerful forces at work here, in terms of how the rich get richer. Let's tease them out so that you can benefit from the knowledge.

First and foremost, how the rich get richer has a lot to do with picking the right parents. Kidding aside, being born into a developed-country household, availing yourself of a quality education at a low relative cost, enjoying the benefits of a healthy diet and a safe childhood, all of these things give a person automatic advantages.

Yet there are people born into good circumstances who nevertheless seem to just "get by." They see the rich get richer and, quite rightly, question their own choices.

Instead, they should question, or at least examine, their parents' choices. Kids don't listen to what their parents say. They do what their parents do. A parent who saves diligently and consumes moderately is setting a very good, lifelong example for his or her children. A parent who constantly overspends and lives in debt does not.

How the rich get richer: They start early

But the kicker here is learning by doing: Teaching by example is great, but a child learns the power of saving and investing not only by seeing it done by others but by doing it themselves. Practice is how the rich get richer.

Once a young person gets a little bit of capital set aside, they begin to think more conservatively about money: How can I protect and grow that wealth? What are the risks to my plan?

How the rich get richer is by passing on simple lessons about compound interest, about risk and reward, and about the role of money in a healthy, happy life. Rich parents don't fear money; they consider it a useful tool. Those attitudes pass on, compounding in value with each succeeding generation.

Working hard at getting an education is a great base. The simple act of periodic, automatic saving is another excellent lesson. Prudent, effective investing is yet another.

Great fortunes are often built not on chance events but on steady, risk-controlled investment plans that take into account the best practices of generations . 

http://www.marketwatch.com/story/how-the-rich-get-richer-and-you-can-too-2012-10-03

Can Drive-Through Grocery Shopping Save Tesco?

Bloomberg's Tom Gibson on how Tesco is trying to win back customers with their `click-and-collect' service.