Janet Schlarbaum, Mark Schlarbaum Ideology of Capital Making

Posted by: Janet Schlarbaum
Author: Vince Shorb

Harness the power of your investments by starting to invest young. There are simple stock market investment vehicles that will allow the inexperienced investor to achieve solid, long-term, returns without having to be a stock market expert.

Importance of Investing Young. It is essential that you start investing young; if you don’t your actually loosing money and missing out on the most important thing young investors have in their favor ‘compounding interest’.

Each year that you have money and are not investing you’re loosing about 3% of its value due to inflation. So after 10 year of sitting on $100 cash it could be worth less than $75. What’s more, by investing young you benefit because the money you made from your investments - make you more money. Making money from money you’ve already earned from your investments is known as ‘compounding interest’. This powerful force can make you a millionaire well before retirement age with saving as little as $70 per month.

Now that you know you need to invest; how do you start? The stock market offers a great place for young investors to get their money working for them; the good news is that you don’t need to have a ton of money to start. Plus, with the investment vehicle discussed in this article, you don’t need to be a stock market expert to begin.

What’s the solution? An ideal investment for young and inexperienced investors is to get on the road to financial independence are low-cost broad market index investments. Warren Buffet states, “A very low-cost index is going to beat a majority of the amateur-managed money or professionally-managed money.” Reduced risk, solid returns and it one of the simplest investments you could make. An added bonus is that it takes only minimal knowledge and about 60 minutes to start getting your money working for you.

What’s a broad market index? A broad market index is a group of stocks that you can purchase as one. It allows young investors to buy a collection of top performing stocks that mimic the performance of the entire stock market. Since these index funds allow you to earn returns similar to the overall performance of the market it greatly reduces the risk. This is an advantage to the beginning investor since it is safer than investing in a single stock or some mutual funds; plus there is a history of double digit returns.

Broad based index investments may not sound like something you know; however if you ever watch the news chances are you have heard of this investment. -The Dow Jones Industrial Average index contains 30 top industrial stocks. -The Standard & Poor’s 500 contains 500 of a variety of different stocks. -The NASDAQ 100 contains 100 stocks that are mostly in the financial and technology sector.

When you invest in a broad based market index you actually own a small piece of each individual stock. For instance, when you invest in the S&P 500 broad market index, you’re buying a piece of all 500 stocks in that index. So for each S&P index share that you own your actually own 1/500th of companies like: American Express, Google, Ford, Nordstrom, Home Depot, Staples and Yahoo to name a few.

For those young investors that don’t want to stay glued to their computer all day broad based market indexes are great solution. Since this investment matches the overall return of the market if you believe over the long-term the stock market will continue to rise in value this could be a good investment. If history were an indicator of future performance, it would be clear that over time, you would generate solid returns. The key benefits associated with broad market index investing are:

1) Higher Returns - According to Standard & Poor’s, less than 30% of managed funds in 2006 beat broad market index investing. What’s more over the last ten years the average person that invested in broad based index funds has beaten the returns of most mutual fund investors.

2) Added Diversification - Diversification lowers risk. If you invest in one individual stock and bad news comes out on the company you could loose a lot of money fast. Now, for instance, if you’re invested in an S&P 500 index fund and one stock has bad news you really don’t care. That will only affect your investment one five hundredth.

3) Lower fees - Index funds fees are typically lower and are often around .5%. While the average mutual funds fees are around 2%. Over time this will make a big difference in your overall return.

4) Passive investment - When investing in individual stocks or mutual funds it is important to keep your eye on the market and up-to-date with current trends. Investing in broad based market indexes takes less stock market knowledge and requires less time to track.

The earlier you start investing the sooner you can reach financial freedom. invest with broad-based index funds that have similar returns to the overall market, because then we are receiving similar returns while hedging our portfolio - again, investing for young and beginning investors is all about diversifying to improve your chances for financial success.

How do I invest? There are two ways for young investors to begin investing in broad market indexes. Both are similar in their returns; but they are different in how the index is bought and have different fee structures.

* An Index Fund is a mutual fund that purchases the stocks that make up an index in order to match the returns of the overall market. For example, if investing in an S&P index fund, that mutual fund would own all the 500 stocks that make up that particular index. Index mutual funds may require a minimum investment, but some can be waived with a direct deposit investment plan that automatically invests money every month from your account. Typically, fees on index funds are higher and there are minor restrictions on when you can sell.

Posted by: Janet Schlarbaum
Author: Jacquelyn Lynn

The facts are frightening: Women earn approximately 80 percent of what men earn. They live an average of five years longer than men, so they need more for their retirement. And yet, because they earn less and often work less because they take time off to care for children and elderly parents, they save less for retirement and receive lower Social Security benefits.

There are women who have conquered the historic wage gap, most struggle with unique challenges generated by the multitude of roles they play, including wage earner, wife, mother, homemaker, and caregiver. And in that struggle, the principles of sound money management often get left behind.

In an article for Forbes.com, author Warren Farrell notes, “Men make decisions that result in their making more money. On the other hand, women make decisions that earn them better lives (e.g., more family and friend time).”

This statement raises two questions: One, is it possible to strike an effective balance between financial security and quality of life issues? The answer is yes-but it takes education and action. And two, while family and friend time are indeed important, what is the value of peace of mind in being able to provide for yourself and your family?

Women have a complicated and often dysfunctional relationship with personal finance. The issue is not capability-women have the ability to manage money, save, invest, and build wealth as well as men. But all too often, they simply don’t do it. Even women with successful business track records, who outwardly appear confident, competent, and accomplished, have been to known to have disastrous private financial lives.

Even one woman in poverty is too many

Let’s take a look at poverty statistics. According to the U.S. Census Bureau, the 2004 poverty level for a family unit of one person under 65 is an annual income of $9,827. In 2004, the official poverty rate was 12.7 percent, with 37 million people in the U.S. living in poverty. The U.S. Department of Health and Human Services reports that the poverty rate for all women 18 years and older in 2003 was 12.4 percent (13.8 million women). Poverty rates vary by age group among women, with the youngest women aged 18-24 years reporting a poverty rate of 19.7 percent. The lowest poverty rate (8.9 percent) was found among women aged 45-64. The poverty rate increases to 10.6 percent for women aged 65-74 and to 14.3 percent for women aged 75 years and older. Women in female-headed households with no spouse experienced higher rates of poverty (24.4 percent) than women in married-couple families (5.2 percent) and men in male-headed households (8.8 percent).

It doesn’t have to be that way. Women of all ages and income levels can take control of their lives and enjoy the exhilaration of financial self-determination.

Putting it in perspective

The most powerful thing to know about money is that it is a tool that can help make your dreams come true. Money is what pays for homes, furnishings, cars, food, healthcare, clothes, entertainment-all of the material things we enjoy. It also pays for non-material things, such as allowing us to support churches, charities, and other causes. Yet money can only work for you if you understand how to manage it. And knowledge isn’t enough, because there is so much emotional baggage attached to how we deal with money. According to a Fannie Mae study on personal finance: “Money usage is value laden. Budgeting decisions, daily money choices, savings behavior, and attitudes toward money are at least partly informed by values that stem from one’s ethnic group, educational level, class background, income status, and gender.” In addition to learning sound financial strategies, you may need a major financial attitude adjustment.

It’s also important to recognize that financial education is a lifelong process. A single book, seminar, or class is not enough. Needs change over time-a young woman just finishing college, a Gen-Xer climbing the corporate ladder, a Baby Boomer preparing for retirement, or a retired senior all have distinctly different financial needs. And certainly circumstances and motivations change as one’s life evolves. Along with changes in personal situations, women must also cope with a changing economy and totally unpredictable events that can impact their financial security.

When it comes to financial information, technology is a double-edged sword. Affordable computers and the internet have given us access to a tremendous amount of data that wasn’t widely available before, but not all of it is sound. It takes a fundamental education in financial basics to discern what advice is good and what isn’t.