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Recent Posts from Molifeney

Gift Giving (the Remix)

I would like to be the first to remind you that the holidays are just around the corner, and with retailers pushing out holiday goods earlier and earlier, you have already been reminded, countless times. With that being said, we want to change it up a little, go flip-mode and recommend some wealth building holiday gifts you aren’t going to see at your local mall. These gifts are going to be relevant a lot longer than a new iPhone or even the Wii.

hey guys, it's christmas time!
Creative Commons License credit: THEMACGIRL*
Will Your Gifts Appreciate in Value?

Savings Bonds – I know you think bonds are boring, unless you’ve read The Beauty of Bonds, but in reality, bonds make great gifts. You can purchase bonds in several different denominations, and you can hold them in electronic or paper form. Savings bonds can be purchased from most local banks or through TreasuryDirect.gov. The two most common types of savings bonds purchased are Series EE and Series I. Series EE bonds are secure savings products that pay interest based on current market rates for up to 30 years. Series I bonds are a low-risk, savings product that earn interest while protecting you from inflation.

529 Plans – Raise your hand if you think college is a good thing. The best 5 ½ years of my life were spent there. The personal growth… the opportunities…the women’s studies classes that I never officially enrolled in, but tried my best to master….Who wouldn’t want their child/niece/nephew/cousin to take part in everything that college has to offer. Well maybe not everything.

UGMA/UTMA – These are essentially trust accounts set up for minors. The person that establishes the account remains custodian of the assets in the account until the minor reaches 18 or 21 depending on the state laws. These accounts are a great way for the youngin’s to start building wealth. But be advised. The income generated from the investments is taxed at the minor’s tax bracket and these assets may effect their ability to get financial aid for college.

Shares of Stock – This is a great way to give the gift of ownership. Those new Jordan’s or those Titleist clubs aren’t going to appreciate like stocks. These stock sharing websites give you the chance to give the gift of ownership AND make the gift look good.

As always for more info check out www.molifeney.com

Posted in: Personal Finance

Safety First

In an erratic market it pays to have sound financial products in your portfolio because you can bet that Uncle Sam won’t be passing the collection plate around for little old you or me. As faithful Molifeney.com readers you guys have already been schooled on the Beauty of Bonds as a safe investment. We’ve taking things a step further by putting together a list of some of the most conservative, yet best performing bond funds in the land for your viewing pleasure. These days you win by not losing, but you can’t win if you don’t play.

Estrategia bonos USA ZB 30 años, ZN 10 años y ZF 5 años (3 octubre 2008)
Creative Commons License credit: trackrecord
Safety First in Bonds

American Century Diversified Bond Fund (ADFIX): This bond fund invests at least 80% of assets in high- and medium-grade, non-money market debt securities. It ranks high on the Morningstar Credit Quality box and is a 5 Star Fund. It also has a one year return as of 9/30/08 of 5.52%.

Pacific Income Advisors Moderate Duration Bond (PIATX): This fund has low expenses and the lowest initial investment requirement of the group at $1,000. It also ranks high on the Morningstar Credit Quality box.

T. Rowe Price U.S. Treasury Fund (PRTIX): Consider this fund the safest of the safe. It invests 100% of the assets in either U.S. Treasury securities or U.S. Government Agency securities so it is backed by the full faith and credit of the U.S. government. On top of that the one year return as of 9/30/2008 is a whopping 10.15%.

If bonds don’t tickle your fancy, but you are still looking for a decent return on a safe investment then you may want to consider a Certificate of Deposit (CD). If you’re have problems stomaching the rollercoaster ride that is the stock market then check out these one year high fliers, they may be just what the Doctor ordered.

Min Deposit

APR/APY

FDIC Insured

Capital One Direct Banking

$500

3.68%/3.75%

Yes

E Trade Bank

$1000

3.59%/3.65%

Yes

ING Direct

$1

3.93%/4.00%

Yes

GMAC Bank

$500

4.26%/4.35%

Yes

Nationwide Bank

$500

3.97%/4.05%

Yes

For more info check us out at www.molifeney.com

Disclaimer: YBPGuide, nor do its owner or contributors, provide investment advice or endorse any investment strategy. Please consider all risks when investing, as the above is for informational use only.

Posted in: Personal Finance

Running with Scissors

As a child do you remember your mom telling you not to run through the house with scissors in your hand? The reason she said that is because she knew that even with all of your good intentions you’d stop paying attention and end up looking like Slick Rick, less the gold teeth and fedora. For the many that made it to adulthood without losing an eye or an appendage, we’re all grateful to mom for the oversight.

The similarities between the performance of the last half decade of our economy and the indiscretions of an innocent child are eerily similar. This era has been one of gross negligence, greed, and down right stupidity. There is absolutely no question that the system is broken, but the $850 Billion question is who broke it? I’d love to stick the blame to George Bush, Hank Paulson, hell even OJ, but none of them alone are the true culprit. The economic issues that exist today don’t belong exclusively to Main Street or Wall Street…we did this to we.

Running With Scissors
Creative Commons License credit: thorinside
Are You Running w/ Scissors?

Remember when the housing market was hot, when you could get a home loan for $5 down and a smile?
Remember you could take the world’s worst credit into a luxury car dealership and drive away in a $50,000 gas-guzzler with no payments for 90 days?
Remember when the requirements to get a credit card were a pulse and pen?

As consumers we reveled in these times and used the easy credit to enrich our lifestyles beyond belief. Where in the universe did any of these transactions make good economic sense? We discounted the fact that the day would come when we had to pay the piper.

In addition to living like Diddy on a $45,000 a year salary, we also pushed and pushed to make sure our investments were as prosperous as we were. We celebrated the sexy earners on Wall Street and clamored to get a part of their financial windfalls without asking how. If a company wasn’t performing as well as its peers, then there was a problem. Oust the existing CEO and get a real earner in there.

CEO’s got rich, 401K’s got fat, and home values got higher than KC and Jo Jo at a Columbian Cocoa convention.

Through it all we never asked ourselves how or why is this right. We just took it and ran.
I once had an economics professor who asked the same questions on every one of his tests. The question was:

What does Caveat Emptor mean and why is it important?

For those who don’t know, it is the Latin translation for Buyer Beware. It seems like a simple enough question to answer on a test, but it’s more difficult to apply to life. Today I realize why that question was so important. Of the two parties involved in a transaction, the buyer has to be better, more educated, and the more rational risk taker. If he is not, he’ll lose it all on one turn of pitch-and-toss. Sure, human nature, the sales pitch and our love of vanity/riches, make us as American’s drunk on the possibility of the one hit wonder, but one hit wonders fade quickly.

Wall Street Bull
Creative Commons License credit: PittCaleb
We were All Bullish

If Wall Street and Main Street had been aware, maybe we would not have witnessed 650,000 properties being foreclosed on in the first quarter of 2008. Maybe financial icons like Lehman Brothers and Morgan Stanley would still be around. Maybe your neighbor would still have the title to his home.

I wish my mom had been there to tell my neighbor and the CEO of AIG to stop running with scissors in hand. I know, hindsight is 20/20 and now we’ve got to focus on how to get out of this mess, but if past performance is indicative of future results, we’ll be dealing with this mess for another 45-50 years. I just hope that we’re all able to make better decisions.

Caveat Emptor Forever

As always, for more info check us out at www.molifeney.com.

Posted in: Featured, Personal Finance

Blinged. Out.

Dearly beloved, we have come today to put to rest a true icon of the 21st century. An everlasting symbol of the technology and real estate booms. The quintessential flag bearer of Wall Street’s hedge funds and private equity firms. The overused word that described over the top opulence and conspicuous consumption. The Hot Boyz pushed it into our lexicon and we have never looked back. Until now. God bless you Bling, you had a good run, but now it is time to let you go.

Bling
Creative Commons License credit: ZenOptic
Is the day of bling over?

There is a new phenomenon slowly gaining acceptance across this nation. There is not much empirical evidence to back it up yet, but there is strong anecdotal evidence that we, as Americans, lovers of material possessions, have begun to back off the spending throttle. Some portion can be attributed to the obvious economic straits we find ourselves in. High-energy prices and a real estate market that is still overpriced for many have made downsizing consumption a necessity. There are a great many of folk who are eschewing excessive consumption for other altruistic reasons. A counterculture is gaining momentum with the affluent and the not so affluent where less is more, consciousness is better than couture, and the lines between the have’s and have not’s are blurry.

It is quite possible that the new glam is actually…not.

Y.A.W.N. Young. Affluent. Wealthy. Normal.

The term actually comes from Great Britain where the Sunday Telegraph actually coined the acronym. Think of YAWN’s as the anti-Diddy. They eschew the high profile, big spending ways of the yuppies that preceded them and focus their energy and resources on fixing economic and social ills. Think of Warren Buffett as the godfather of the YAWN movement, boring, maybe so but definitely impactful.

Steps to YAWNing success:

  1. Go Green: Much has been written about the benefits of green living, but it is also great for your wallet. A few tips:
    • Use public transportation/walk/bike/pogo whatever you have to do to leave your car parked. You will spend less on gas, need fewer oil changes and you may be able to qualify for a discount on your auto insurance for driving less. Plus, I have found there are some really cool people on the bus. There’s also some weirdo’s, but the drunken guy talking to himself just spices up my ride to work.
    • Use local markets for your food. The fruits and veggies here are almost always better in quality and cheaper than those at the grocery store. On top of that you can get excellent recipe ideas from folks that actually know what they are talking about.
    • Craigslist. Craigslist has to be one of the greatest Internet concepts EVER. In the past 3 weeks, I bought a brand new bedroom set (for the dirt no less) and sold my guitar (unfortunately, also for the dirt). Craigslist combines free market capitalism with old school bartering. If you are in the market for furniture, automobiles, tools, companionship, etc. check out Craigslist first.
  2. Pay it Forward: Being a do-gooder is finally envogue. Bill Gates and Warren Buffett have decided to leave a good portion of their fortunes to charity and many other YAWN’s are showing that you can do good and do well. Here are some advantages outside of the warm fuzzy feelings to being a do-gooder.
    • Giving money to nonprofits whether it be religious organizations, scholarship foundations, or charities means you are entitled to a tax deduction. Uncle Sam lets you write off those contributions on your taxes.
    • Getting involved civically will get you connected. People that have money, usually hang out with other people that have money. Many of these people are big wigs on local charity boards because of their influence. There are a lot of ways to climb the ladder and having a helping hand up does not hurt.

As always for more info check out www.molifeney.com.

Posted in: Featured, Lifestyle, Personal Finance

In God We Trust

Prosper: To succeed in an enterprise or activity, especially to achieve economic success. To become strong and flourishing.

What you are about to read will enlighten you and is aimed to invite a new perspective on the meaning of prosperity and wealth.

God doesn’t care if you are rich or poor. There is a good chance that you and I will never be rich, at least by conventional standards. I’m convinced of that now. It took me awhile to get to this point, but I’m here and I’m sticking to my guns. As a matter of fact, God may be happier with you less rich. I know that is a tough pill to swallow, but read on.

Cash Money
Creative Commons License credit: lincolnblues
In God We Trust

The beauty of the Bible is how each person applies it to their own personal settings. The truth, no matter how the Osteens, Dollars, Jakes, etc. feel, is that there are abundantly more poor people than rich. God fearing, faithful, obedient…poor people. While my theology knowledge is debatable, this fact I feel secure about. If trusting and believing in God was all it took to be rich, why aren’t you?

God commissions us to spread His word to those that do not know Him. He also commissions us to serve and worship Him. That is why we are allowed to stay on this thing we call Earth. In none of the Bible translations did I see “make a lot of money” or “become rich”. Either God didn’t say it or that cat King David left it on the editing room floor. As a matter of fact, becoming rich may hinder you more than help in making God happy. The time, energy and resources you spend chasing those dollars may be better used in fulfilling God’s true wishes. On top of that, turning our backs on God becomes a lot easier to do when you have more than enough money to supply all your needs and wants.

Occupation, not Dedication

Your occupation has a lot more to do with getting rich than your dedication to your faith. On paper accumulating wealth is a simple equation. Assets – Liabilities = Net Worth. If person A’s income allows them to create Assets at a faster rate then person B’s then they should be able to increase their Net Worth faster (if they keep Liabilities in check). Now, this is not to say that person B can not have a wonderful, fulfilling life. Money is a utility, and we all should know it can’t buy happiness. We are supposed to be managers of the resources we have. Having a Bentley and a big house may be all-good, but spending all your time praying for one is not. I know the above mentioned pastors would argue that prosperity preaching is not just praying for material items, but if it looks like a duck and quacks like a duck then…

Can you lend me some change?

We all know that America is the land of opportunity and prosperity. There are rich folks and poor folks and folks in the middle. God wants us to be prosperous; it says so in the Bible so I am not denying that. But have you considered that the mainstream definition of prosperity and God’s definition may be totally divergent? Have you thought about how the definition of prosperity has changed for all the folks in America? Consider the following:

  • 43% of all poor households actu­ally own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.
  • Nearly three-quarters of poor households own a car; 31 percent own two or more cars.
  • 97% of poor households have a color television; over half own two or more color televisions.
  • 78% have a VCR or DVD player; 62% have cable or satellite TV

Do you need more proof? Review these articles from american.com and heritage.org.

What you can do

Get in where you fit in. Live under your means, way under if possible.

Appreciate the “small” miracles in life.

Be optimistic AND realistic. Dream big, but realize God isn’t Santa Claus.

Give back your money AND your time. If time is money, then shouldn’t you be tithing both?

Have mustard seed faith and coconut sized cojones.

For more info check out www.molifeney.com.

Posted in: Personal Finance

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