Investing

Musings On Diversifying My Portfolio

The phrase “diversify my portfolio” has always made me giggle. An old friend of the family, who was quite proud of his highly blue-collar attitude and lifestyle, came into a large amount of money. He had a financial advisor invest it for him and teach him a little bit, and so he’d stand there, wearing …

Categories: Investing, Retirement

How Dave DeSmidt Lost $179,000 Out Of His Retirement Account In One Day – And Why A Few Reforms Are Needed At Brokerages

On the morning of October 23, 2006, Dave DeSmidt had $179,000.23 in his 401(k). He was on a business trip to China when the unthinkable happened: someone logged onto his brokerage account, registered a new checking account, and then requested a distribution into that account. By the time Dave checked his brokerage account a few …

Categories: Investing, Technology

Planning For My Roth IRA: Looking At Vanguard’s Target Retirement Funds

This year, I’ve made a commitment to start a Roth IRA and I’ve developed a very specific plan to make it happen. I’ve also decided to use Vanguard to manage the IRA because they’ve treated me very well in the past and their returns are strong. Now comes the hard part: how exactly do I …

Making Sense of Treasury Securities: Treasury Bills, Notes, and Bonds

Quite often, I read about using treasury securities as the “baseline” for what your money can return with no risk. Yet to the beginning investor, these items are a bit unclear: what are they? How are the returns? How can an individual investor get them? The Simple Dollar did a bit of research and found …

Categories: Investing

Should You Overpay On Your Mortgage?

Recently, I had an email exchange with a reader about whether or not they should overpay on their home mortgage or take that overpayment and invest it. I spent some time with Excel and Bankrate.com’s mortgage calculator and I made a few interesting discoveries. I don’t want to bury you in numbers, so I’m going …

Categories: Housing, Investing

Is Stock Investing Really The Best Way To Go?

Over the last several months, I’ve read a ton of personal finance material, and it all keeps coming back to the same idea that basically says if you want to make big money, you have to participate in stock investing, but as you approach your goals, you should move gradually to safer investments like bonds …

10 Steps For Checking Out Long-Term Stocks To Invest In

As I move into a small portfolio of individual stocks, I’ve developed a process for selecting stocks that reflect the values I’m looking for. In short, I’m looking for long-term stock investments in companies that are financially stable and exhibit good customer relations and values. My belief is that any company that has their books …

Categories: Investing

Ten Ways To Accelerate Your Net Worth Growth

Now that you’ve calculated our net worth, you’re probably excited about seeing that number go up, and once it starts going up, you’re going to want to see it keep going up, faster and faster, rocketing to the moon. For my net worth growth, I have a thumbnail goal of a 2% increase per month …

How I’m Using Dollar Cost Averaging – For Better Or For Worse

As I mentioned earlier, I recently bought into the Vanguard 500 using part of my emergency fund. Since then, I’ve set up a monthly deposit into that fund, intending mostly to focus on building up the balance to a sufficient level. The real purpose of the fund is to enable my wife and I to …

Categories: Investing

Rule #1: Buy or Don’t Buy?

During this final week in 2006, The Simple Dollar is reviewing one of the top investment book of the year (based on Amazon.com sales). What does Phil Town’s Rule #1 really all about, and does it bring anything useful to the plate that we didn’t already know? This week, we aim to find out. To …

Balancing An Investment Portfolio For The First Time

As the year ends, I’m thinking about one of the most common suggestions that people offer as an annual financial task: rebalancing my investment portfolio. For me, this is a relatively new concept, as I previously just selected something at random for my retirement money to go into and assumed it would do “well” without …

Categories: Investing

Rule #1: Implementing The Rule

During this final week in 2006, The Simple Dollar is reviewing one of the top investment book of the year (based on Amazon.com sales). What does Phil Town’s Rule #1 really all about, and does it bring anything useful to the plate that we didn’t already know? This week, we aim to find out. So, …

Calculating Phil Town’s “Sticker Price”: An Example

Yesterday, I posted a discussion of several interesting aspects of Phil Town’s book Rule #1. One of these points was Phil’s requirement that any stock you invest in have a Margin of Safety. To determine this margin, Phil offers up a formula that calculates a stock’s “sticker price,” which can be calculated by retrieving some …

Categories: Investing

Rule #1: The Five Numbers

During this final week in 2006, The Simple Dollar is reviewing one of the top investment book of the year (based on Amazon.com sales). What does Phil Town’s Rule #1 really all about, and does it bring anything useful to the plate that we didn’t already know? This week, we aim to find out. In …

Rule #1: The Four Ms

During this final week in 2006, The Simple Dollar is reviewing one of the top investment book of the year (based on Amazon.com sales). What does Phil Town’s Rule #1 really all about, and does it bring anything useful to the plate that we didn’t already know? This week, we aim to find out. The …

Yahoo! Finance Disappoints: Powerball Jackpot Climbs To $75 Million?

As I was surfing through Yahoo! Finance last night, I spotted an article on the front page that disappointed me greatly. Right on the front page was a link to an article with the headline Powerball Jackpot Climbs To $75 Million!, including the exclamation point. For those unaware, Powerball is a multi-state lottery in the …

How To Read A Mutual Fund Prospectus

Once you begin investing, you’ll find yourself receiving a wide array of financial documents. One of the most useful – and the most intimidating for new investors – is the mutual fund prospectus. This document is often written in a very dense fashion that convinces casual readers that they should be reading something else, but …

Categories: Investing

Rule #1: Overview

During this final week in 2006, The Simple Dollar is reviewing one of the top investment book of the year (based on Amazon.com sales). What does Phil Town’s Rule #1 really all about, and does it bring anything useful to the plate that we didn’t already know? This week, we aim to find out. I …

Should I Pay Off Student Loans or Invest?

Recently, I received an email from Nate, a reader of The Simple Dollar. He was wondering whether it makes more sense to invest or to pay off his student loans: I’m a regular reader of your site. I’m also a senior getting ready to graduate. I’m in an interesting situation and I was wonder what …