Carnival of Everything Finance: # 18

Welcome to the May 27, 2008 edition of Carnival of Everything Finance.

We had over 125 really good articles submitted for this edition. Unfortunately I could not include all of them.

I hope you enjoy reading these articles.

Business

Dr. Joe Capista presents Systemize Your Sales Presentation for a More Successful Outcome posted at The Success Triangle

Martin Russell presents Long Copy Vs Short Copy - The Final Say. posted at Word of Mouth Marketing.

Fred Black presents What Can You Learn from Watching Big Product Launches? posted at Fred Black: Internet Business Blog..

Matthew Paulson presents Use Your Time Wisely posted at American Entrepreneurship.

Chris Carter presents Why the Gas Tax Should Be RAISED posted at David Makes Cents.com

Earning Money

Jonathan presents Different Ways of Calculating Interest posted at Master Your Card

Warren Wong presents Why Being Generous Makes You Wealthy posted at Personal Development for INTJs

Terry Dean presents 5 Keys to Successful Internet Business posted at Integrity Business Blog by Terry Dean

Eric presents Growing Money posted at Make Money Blog

Cindy King presents How An Information Product Strategy Develops Lead Generation Beyond Your Current Borders posted at Get International Clients

Mandy Trapper presents Low Cost Options Are Available For The Forex Beginner posted at Forex Trading System Secrets.

David B. Bohl presents Are You Cut Out to Freelance? posted at Slow Down Fast Today!

Raymond presents How To Make Money From Balance Transfer Credit Cards posted at Money Blue Book

debbie presents Make Money From Writing... Like Us! posted at Empowering Mom.

The Shark Investor presents Push Your Income By Taking Freelance Work posted at The Shark Investor

Everything Else Finance

SpiKe presents 7 Ways You Can Stop Wasting Food And Help Save The Earth posted at Organize IT

Nadege presents Learn why allocating your paycheck is the key to becoming wealthy posted at fabulous finances

Mag Herrera presents What I like about Credit Cards posted at Life. Money. Development.

Jeremy Zongker presents How to Stop Debt Collector Harrassment posted at Destroy Debt

Phil B. presents No Long-Term Planning is Stupid posted at Phil for Humanity

Linda W. presents How To Talk About Money With Your Partner posted at The Eclectic Female

The Financial Blogger presents Manage Your Anxiety, Manage Your Money posted at The Financial Blogger

Finance Tips 101 presents The Pros And Cons Of Personal Loans posted at Finance Tips 101

Larry Russell presents The Financial Services Industry is Still the Largest S&P 500 Sector - Even after the Collapse of its Stock Values posted at THE SKILLED INVESTOR Blog.

Wenchypoo presents Three Little Words Limit Severe Consequences posted at Wisdom From Wenchypoo's Mental Wastebasket.

Madeleine Begun Kane presents Dear IRS posted at Mad Kane's Humor Blog

Debt Freedom Fighter presents How To Get Rich By Being Smart With Money in Your Early 20’s posted at Discover Debt Freedom!.

BeThisWay presents Competitive Credit posted at Are You Going To Be This Way The Rest of The Time I Know You?.

Todd presents Deciding On Your Retirement Goals posted at HarvestingDollars

Michael Geoffrey presents How to Get Out Of Debt posted at Debt Smackdown.

Brice Hogan presents How to Create an Effective Spending Plan posted at Financialzip.com

presents Alternatives To School, Home, And Business Loans - HelpMyCashGrow.com by Anthoney Grigsby posted at HelpMyCashGrow.com

chica with issues presents Changing my address cost me $75 posted at Bumblefucked.

Michael Geoffrey presents Some Simple Debt Solutions For Getting Out Of Debt Faster posted at Debt Smackdown.

William Blake presents The Fair Debt Collection Practices Act (FDCPA) Explained posted at Becoming Debt Free.

Yi Hui Chang presents Hospital bills from the incident of my baby’s fall posted at The Simple Wealth

Robert D Flach presents EVERYBODY OUGHT TO HAVE A WILL posted at ANYTHING BUT TAXES!.

Ryan Healy presents Outstanding Debt as of May 2008 posted at Debt Reduction Formula, saying, "Here are my latest debt numbers, plus how I reduced my debt by $19,693.45 in the last three months."

Mike Leonard presents Debt Free – Starting from where you are posted at Until Debt Do Us Part

Brice Hogan presents Micropayments Make Cents posted at Financialzip.com

Larry Russell presents The Top 25 Low Cost Best US Money Market Funds posted at THE SKILLED INVESTOR Blog.

Ken Clark, CFP presents Rules for the Annual Gift Exclusion for Parents and Grandparents posted at Saving for College - About.com

Laura Powers presents Retire Early posted at From the Inside Out

Investing

Barb A. Ryan presents Asset Allocation, Investment Asset Tax Location, and Emergency Cash Management posted at Pasadena Financial Planner.

Jed Norwood presents Patience is Key in Forex Trading posted at Forex Strategy

Investing Angel presents Why I Sold My Apple Shares Today » Free Stock Market Investing Tips posted at Stock Tips

Investing Angel presents Some Thoughts On Google (GOOG) » Free Stock Market Investing Tips posted at Stock Tips

Jed Norwood presents What Causes Moves During News Announcements? posted at Forex Strategy

Ideal4Investors presents Invest Your IRA in Real Estate for Beginners posted at Ideal Investment Corner

WhereDoesAllMyMoneyGo.com presents Portfolio Insurance posted at Wheredoesallmymoneygo.com

FIRE Getters presents Small Savings Can Still Save Our Retirement posted at FIRE Finance.

A.J. Brown presents Is Trading Stock Options a Lone Wolf Activity? posted at A.J. Brown's Options Trading Blog

Mark Runta presents 20 Trading Tips & Techniques posted at Smart Investing & Money Management.

Dividend Growth Investor presents Dividend Champions Watchlist posted at Create Rising Passive Income From Dividend Paying Stocks.

The Dividend Guy presents Dividend Yield or Dividend Growth? posted at The Dividend Guy Blog

Dorian Wales presents The Personal Financier: Know your Portfolio - Three Simple Charts Can Make a World of Difference posted at Personal Financier

Lane Wright presents Compete with the Pros posted at Awesome Forex Alerts.

Matthew Paulson presents Invest - Don’t Splurge Inheritance Money posted at American Consumer News.

mmhabits presents The Problem with Risk Measurement Calculators posted at Millionaire Money Habits

Babak presents Conditions Of New Bull Markets: Consumer Sentiment posted at Trader's Narrative

Real Estate & Mortgage

Joe Manausa presents The Real Estate Market - When Will We See The Turn? posted at Tallahassee Real Estate Blog

Joe Manausa presents The ?No Brainer? Investment posted at Tallahassee Real Estate Blog

Trevor McKay presents What Kind of Mortgages are Available? posted at All About Mortgage Calculators.

Stephan Grindley presents Foreclosure Scams posted at Essential Foreclorsure Pointers.

Joe Manausa presents Open Houses - Did You Know? posted at Tallahassee Real Estate Blog

Reba Haas presents Underwrite to Approve, Document to Defend posted at Team Reba Real Estate

Rosemary Rugnetta presents 3 Things That Appear On Your Credit Report posted at Her Home Blog

Joe Manausa presents Short Sale Advice posted at Tallahassee Real Estate Blog

Saving Money

Christopher Johnson presents Going Green, Saving Green posted at christopheraaronjohnson.net.

Sarah presents Are You Ready to Buy a House? posted at Tips To Save Money. Learn To Be Frugal

Tip Diva presents Top Ten Tips - Protecting Your Wallet posted at Tip Diva

Tip Diva presents Tip Diva | Top Ten Tips - Reducing Your Gas Usage posted at Tip Diva

Dollar Frugal presents Didn’t Save $80 on Insurance posted at Dollar Frugal.

Jason presents Save It for a Sunny Day posted at The Frugal Dad.

Ravi Kumar Moosad presents Achieve Financial Freedom - Fundamental Paths to Financial Freedom posted at Achieve Financial Freedom.

Save Money presents Save Money In An Emergency Fund posted at How I Save Money.net.

Larry W presents Avoid getting cheated! posted at moneylandmarket.com

debbie presents Create Your Own Bill Organizer posted at Destroy Debt.

Chris presents 9 Surefire Strategies NOT to Retire Early posted at nomad4ever.

Shopping

Talk Prom Dresses presents How To Talk About Money With Your Partner posted at The Eclectic Female

Kevin presents Dachshund - Breed Information posted at Dog Breeds

Matthew Paulson presents Speak Up to Get A Deal posted at American Consumer News.

Larry W presents Penny pinching shoppping tips! posted at moneylandmarket.com

Raymond presents The Best Frequent Flyer Airline Miles Credit Cards For Cheap Flights posted at Money Blue Book.

Hilary Green presents When Is The Best Time to Buy a New Car? posted at Cars for Girls.

Spending Wisely

Christopher Johnson presents The Value Of Money posted at christopheraaronjohnson.net.

ChristianPF presents How to make a budget posted at Money in the Bible | Christian Personal Finance Blog

Christine presents Eating in France on 10 Euro per Day for 2 People posted at Me, My Kid and Life: An American Single Mom Living in France.

Everything Finance presents How to prevent a financial blunder posted at Invest In India.

William Blake presents Getting Help Paying Off Student Debt posted at Becoming Debt Free.

Trevor McKay presents Top Ten Most Misunderstood Auto Insurance Terms posted at All About Auto Insurance.

Trevor McKay presents Does Anniuty Fraud Exist? posted at The Annuity Professor.

Tip Diva presents Top Ten Tips - Managing Your Personal Budget posted at Tip Diva

Wenchypoo presents More on the Oil Front: Subsidization By Country posted at Wisdom From Wenchypoo's Mental Wastebasket.

Christopher Johnson presents Tax Rebates, Economic Stimulus, And Annual Bonuses posted at christopheraaronjohnson.net.

FMF presents Reader Success Story: Asking for a Discount posted at Free Money Finance

Kevin Surbaugh presents The Great Ask Me Anything of 2008 Giveaway 1 posted at Becoming & Staying Debt Free

Leaving The Folks presents Building a Good Credit History posted at Real World Advice

Stocks

reekoinvest presents Taking Advantage posted at Reeko.com - Bulls don't fear bears..

Value Seeker presents Stock Investment Resource: Stock Market Investing Tips - Is Small Cap Value The Key For 2008? posted at Stock Investing

The Fund investor presents Why Invest In Mutual Funds? posted at Mutual Fund Investing Tips

Value Seeker presents Stock Investment Resource: Stock Market Investing Tips - Growth vs. Value Investing posted at Stock Investing

David Hunkar presents British Bank ADRs - A Bargain? posted at TopForeignStocks.com

Investing Angel presents Why Most Investors Buy High And Sell Low » Free Stock Market Investing Tips posted at Stock Tips

That concludes this edition. Submit your blog article to the next edition of carnival of everything finance using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: carnival of everything finance, blog carnival.

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Real Ways to Save money !!

I was reading a post on CNN money by Walter Updegrave where he was answering a question by a reader about the simple ways of saving money. Although Walter's answer was good , I found more practical tips for saving money in the comments left by various readers.

Here are a few of my favorites:

• I had a friend however whose husband would spend whatever balance was in the checking account. So one week she would pay the bill to “BellSouth” for the actual phone bill and a couple weeks later she would put a payment to “southern Bell” for the same phone bill. It basically deducted the bill twice from the account. She could go back and add up all the Southern Bells and see what her savings was and it provided emergency funds for her when needed. No not an ideal system but it worked for her.
  Posted By K Hofmann, Gastonia, NC
  

• My wife and I set up several savings accounts at ING (no fees, good rates) and a set amount goes into each account every pay period. We use these accounts as savings and “escrow” accounts, we save all year long for car repairs & registrations, car insurance, home heating oil, our property tax bills, vacations, etc. My other suggestion is to split pay raises into 3 parts, increase regular savings, retirement savings and to fatten the budget (more breathing room each month).
  Posted By dugdg1, Manch-Vegas, NH
  

• I think that the best “savings strategy” for most people in the United States is a healthy dose of perspective once in a while. Do some reading about how the majority of people in the world live. When you get the urge to whine about how life is not worth living without all the latest electronic gadgets, think about the women in Malawi whose children are dead of AIDS, and who are raising their grandchildren on rotten bug-infested grain, because they have no other food to give them. When you feel personally offended by rising gas prices, think about the sweatshop workers in Bangladesh who walk for two hours to get to work, and feel it’s the best opportunity they’ve ever had. Realize that you have all of what you need and most of what you want, make do with a little less, and go make a donation to Oxfam already.
  Posted By Johanna, College Park, MD

• My paycheck gets deposited to an online savings account (ING) on a bimonthly basis. When I started, the assumption was to save atleast 10% of my annual salary, 10% for retirement, and the rest for normal expenses, debt, etc.
  This strategy has worked very well for me so far and since I started, I am saving about 20% of my pre-tax income and an additional 10% (pre-tax) for retirement.
  The benefit here is that I don’t even see the money in my checking account so I am not tempted to spend it and it earns a fairly good interest rate. Additionally, when I get a raise, my expenses don’t go up automatically and the extra money is automatically saved.
  Posted By Asad, Houston, TX

• I am lucky that my work offers direct deposit up to 7 accounts. On top of that I am on a bi-weekly pay schedule so all my budgeting is done on a monthly basis allowing me 2 extra pay checks a year to either pay off debt or stock away in savings. The way I have it set up is that I have a small amount of money each paycheck going into a “spending account” which we use for “wants” and another into a high yield money market account through Vanguard. Both of these are done automatically so I do not have to worry about it.
  Posted By KMoran, Dublin, CA

• I have a savings account in another bank that is separate from my checking and savings. I have automatic deposits sent to it each month. There is no debit card on the account so I have to drive there to withdrawl any money.
  It makes you think twice before withdrawls. last year when my car starter died, the $500.00 bill was paid for with cash. I am now saving to pay cash for my next car.
  Posted By DJ South Bend, Ind.

• For expensive items like a car or the cottage we’ve been thinking about, I setup an phony account in my financial software and automatically transfer the amount from our checking account each month. The money never really leaves checking but I don’t see it in my software. We build up the downpayment in this way and also see if we can truly afford what we want. It’s far better to test your ability to make those payments (while building up that downpayment) than to jump in and realize you couldn’t afford it!!
  Posted By Brian, Kalamazoo, MI

• One method I use is pocket change. I never spend my “change”. The coins that come back from everything. It goes home and in the evening it goes in a jug. Every few months I take it in and deposit in my savings account.
  I am told that your change equates to 5 to 7% of your expenditures. Not a lot, but more than most and its isn’t terribly painful. I know it is a surprize how much that deposit is.
  For me it supplements the direct deposit to savings that automatically comes out of my pay check, but it is a start for those who don’t have anything else.
  Posted By V Woolley, Bakersfield, CA

You can read the the entire conversation and Walter's "Past due: Your savings"

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Who makes the Tough Money Decisions ?

The people, who make decisions in accounting, make it based on three categories. First, people who manage a business, second, the external people of a business who have a direct financial interest to a business, and third the people and organizations that have an indirect effect on a business. This applies to non profit organizations as well. Management refers to the group of people who are in charge for operating a business and for measuring up to the profitability and liquidity goals. If a business is extremely large, then the management will most often require more than one person, and the people are hired to perform their job. Managers need to answer important questions such as what was the company’s net income, and if they have a substantial rate of return. Does the company have enough assets, and which products bring in the most money? When making a decision, managers usually follow a systematic approach. Even though larger businesses require a more concrete analysis, they follow a similar pattern to small businesses.



Financing a business: Financing for a company is critical, because they need that money to continue their operations. Here is a nice website to find out more information about financing a business. http://www.sba.gov/financing/
Investing in a business: Companies invest in their current assets so that it will make money for them in the future.
Producing goods or services: Operations and production management is responsible for developing and producing goods and services that the company can sell.
Marketing: Learning marketing and advertising skills so that they can distribute goods and services more efficiently.
Managing workers: Human resource management requires the hiring of qualified employees, and also paying them.
Providing information: The information management retrieves data about the company such as how much they made in the last month, and organize the information in a way so that it can be used. It also releases information to managers, and to important people outside the business.

Another group of individuals that needs knowledge in accounting is those you have a direct interest in the business, go figure. They use the information to analyze how a business is performing. Most businesses generally publish their financial report which shows how well they meet their profitability and liquidity goals. These statements display how well a company did in the past and probably most important, how well they will do in the future. However, many people outside the business also study the financial reports. They are the investors and the creditors. The investors are the individuals that invest in a business and will keep a part of the ownership. They are concerned with their past success and failures, and also will like to know the potential earnings. A concrete analysis of the financial statement will help prospective investors base their decisions. Once they finish investing they must continue to study a business financial statement. Next, the creditors are the companies that lease money to businesses for short or long term needs. Creditors are the people that deliver money or provide services for companies in advanced before getting paid. Their main concern is whether a business will have the money to repay the money with interest in an approximate time. Some of the things they study before they make their decisions are a company’s liquidity, cash flow, and profitability. Some examples of creditors are banks, mortgage companies, and insurance companies. Over the years the shift of people who used accounting information has varied drastically.

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Tushar Mathur, mentioned in SmartMoney magazine

I was recently mentioned in one of the articles in the May, 2008 edition of SmartMoney. About 2 months back I received an email from the author of the article Anne Kadet, asking to talk to me over the phone about my experience with Bank of America during my hunt for a mortgage.
She as writing about a practice that was now being used by banks called "Price Profiling". Price profiling is a very common practice in the travel industry, but Banks ??

Here is an excerpt of the article.

TUSHAR MATHUR HAD every reason to expect Bank of America's best deal on a mortgage. After all, the 31-year-old software developer kept a checking account and a credit card with the giant consumer bank. He had a ridiculously high credit score — 785 — and was willing to make a 20% down payment on a brand-new four-bedroom colonial in the Atlanta suburbs.

But a funny thing happened on the way to closing the deal on his first home. After reviewing his application, he says, a Bank of America representative offered him a rate of 6.5%, nowhere near as good as the 5.8% to 6.2% rates he had been quoted from other lenders. And the difference wasn't lunch money: Had he gone with Bank of America (BAC), his mortgage payments, over the life of the loan, would have cost an extra $21,000 more than the deal he ultimately accepted. "They were higher than anybody, and I don't know why," he says of his branch's offer.

You can read the entire article here.
Banks Are Latest Industry to Try Optimized Pricing By Anne Kadet


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Long Term Investing

Buying stocks you can hold in your portfolio for years is quite a different process than buying a stock you expect to sell next week. Of course, there is no guarantee that once you buy a stock with an eye to the long-term you'll never have to sell it. But identifying companies that are more likely to turn in a solid performance over the next five to ten years isn't that difficult if you focus on three key areas: Growth, Quality, and Value.

Going for Growth

Long-term stock investors hold one truth to be self-evident -- that ultimately, over the years, one factor can usually drive a stock's share price higher and higher. That single factor is the growth of a company's earnings (the company's profits). In turn, a company's overall growth is ultimately dependent on the company's growth of sales or revenues. Companies that sustain earnings growth over the years are likely to be rewarded with ever- rising share prices. On the flip side of the equation, companies with no profits can rarely be considered solid long-term holdings because it's impossible to predict when (or if) those companies will be able to maintain growth over the years or even stay in business.

A company reports its earnings per share, or EPS, each quarter and each year on its financial statements, which are summarized in SEC Filings reports. Other financial news web sites report the EPS growth in the past as well as the future growth expected by analysts.

If a company demonstrates the ability to grow its earnings over time, you can reasonably expect similar performance in the future. Just remember, though, that since most companies experience a slowdown in growth as they get larger, you should expect the growth of even the best companies to slow a bit over the years.

Growth is the first benchmark to look for as you go through the process of selecting a stock to buy. If the company you're researching doesn't have a solid history of earnings growth, consider it a candidate for speculation, not investment. A company may increase its sales year after year, but unless it also consistently demonstrates its ability to convert those revenues into earnings (or profits), you can't be sure the company will ever figure out how to make a buck.

The Quest for Quality

Once you've identified that a company is growing at a reasonable rate and should continue to do so in the foreseeable future, you'll want to make sure it is built upon a stable foundation of quality. Besides being able to grow its sales, the company has to be able to generate sufficient profits from those sales, and in addition, provide a sufficient return for its investors. Well-run companies that consistently achieve these two goals will outperform their peers.

If you are looking for stocks that you can buy and hold for many years, you want to own solid, well-run companies. A company's management holds the keys to its success. But since you can't conduct in-depth interviews with the CEO and other members of the management team, you'll have to look at some other criteria. For instance, how do the company's profit margins stack up against those of their competitors? Has the company generated a decent return for its shareholders over the years?

A View on Value

The final benchmark in your quest to purchase suitable long-term stock is value. While you should aim to own a portfolio of well-run growth stocks, you have to be able to recognize when a stock is selling for a bargain price, and when it's selling at a premium. Simply finding high quality, growing companies isn't enough to make a successful investment. You also have to know when it's the right time to buy a particular stock. Buying a stock when it is undervalued will enhance your possible total return. Knowing the potential upside of your investment, as well as the potential downside, is key to making sure you have a good shot at your target rate of return.

The most common measure of a stock's value is its Price/Earnings (P/E) Ratio. The P/E Ratio compares a stock's price to its earnings. It's often described as how much investors pay for each dollar of a company's earnings. P/E Ratios can be used to compare a stock's current price with its historical prices to give you an indication of how the stock is valued today compared to a point in the past. You can also compare the P/E Ratio of a stock to other stocks in its industry, or to the market in general, or to an industry average.

Putting Dollar-Cost Averaging to Work

Rather than try to find the absolute best time and price to buy a stock, many investors use dollar-cost averaging to invest in shares over a long period of time. As we discussed in Lesson 1, dollar-cost averaging allows you to build a portfolio by investing a fixed amount on a monthly or other regular basis. When you use this method, you can choose companies that are well-managed and growing nicely, and then invest in their shares on a continual basis - without worrying whether the stock is currently under-valued or over-valued. Your dollars automatically buy fewer shares when the price of a stock is high and more shares when the price is low.

Dividends Can Add to Your Returns

For dividend-paying stocks, the dividend can provide an extra boost to your investment return and should also be considered. The amount of dividends a stock pays on an annual basis is its yield. A stock with a yield of 2.3% is expected to pay dividends that amount to 2.3% of the current purchase price of the stock. You can compare the yield to the interest you receive on an account at your bank, but it's important to note that dividends aren't guaranteed and could rise or fall.

Wrapping Up

By following the three benchmarks of Growth, Quality, and Value, you have a better shot at investing successfully in common stocks and growing your portfolio. You can learn a great deal about a company by reading its financial statements, press releases, news stories, annual reports, and other documents. As you become more experienced, you'll learn how best to interpret the information you discover in those documents in order to help you make better investing decisions.

I found these excellent points made in an article written by Douglas Gerlach.

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