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365 Ways To Get Rich

I recently found an article on Forbes that I thought would be very fitting given the time of year.  With the end of the year coming, many will begin to make resolutions towards the new year.  While some people worry about losing weight, and others about making healthy life changes, there will be a large portion of the population that just wants to set goals to get out of a financial mess, or better their financial situation.  Here are 365 different ways to work towards those goals.  All of these may not be fitting for you, but I promise that just about anyone can find two or three things on this list to better their financial situation.

365 Ways To Get Rich

Sir John Templeton: “Invest at the point of maximum pessimism.”

Don’t mistake a low P/E ratio for a value stock.

Benjamin Graham: “Patience is the fund investor’s single most powerful ally.”

Let your attorneys ride shotgun, but not in the driver’s seat.

Remember Enron; reduce your employer’s company stock in your 401(k).

Warren Buffett: “Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1!”

Fund a Roth IRA if you’re eligible; your money grows tax free for retirement, and in an emergency you can take your contribution back without penalty.

Barry Sternlicht: Pay attention to the big themes, because they are what will help you earn ten times your money.

Back a friend or relative’s startup with a convertible loan, so you share in the upside.

Use commodities as a hedge against inflation.

Raise the deductibles on your auto and home insurance.

Form family limited partnerships to transfer assets at a tax discount.

Beat death taxes in 20 states by making big gifts while you’re alive.

For simple federal tax-free wealth transfer, make $14,000 annual gifts to children and grandchildren. It won’t cut into your $5.25 million lifetime exemption from gift and estate taxes.

Get tax advice before settling a lawsuit.

Read Reminiscences of a Stock Operator by Edwin LeFèvre.

To keep peace with both relatives and the IRS, document all family loans.

Peter Lynch: “Never invest in any idea you can’t illustrate  with a crayon.”

View collecting as a hobby first and investment second; psychic returns can make up for a lower average return than in stocks.

Add a personal items floater to your homeowner’s insurance to cover collectibles.

When the bear charges, stand your ground.

For protection from inflation and currency devaluation, buy the “gold you can eat”—farmland.

Know your risk tolerance. Pick an asset allocation that lets you sleep at night, so you won’t panic and sell stocks at the bottom.

Don’t keep too much in cash equivalents—over time, this “safe” investment barely keeps up with inflation.

After setting an asset allocation, rebalance yearly;  it forces you to take profits when stocks have surged and to buy more shares when they’re cheap.

Benjamin Graham: “Adopt simple rules and stick to them.”

Buy Bitcoin as a speculation or political statement, not a hedge.

Be a tax-smart investor. Hold taxable bonds in a 401(k) or IRA. Put individual stocks in taxable accounts so you can sell losers to harvest tax losses.

Pay attention to the IRS’ wash sale rule when harvesting capital losses.

Don’t invest in a hedge fund unless its audited results are reported in compliance with Global Investment Performance Standards.

Build an emergency fund outside your 401(k).

For the biggest tax break when donating collectibles to charity, make sure they’ll be displayed and not sold.

Put alternative investments like real estate (but never collectibles) in your IRA.

Burton Malkiel: “All index funds are not created equal. Some have unconscionably high expenses.”

Keep an eye on—but don’t obsess over—mutual fund fees and expenses.

Even committed indexers should use actively managed funds to buy municipal and high-yield bonds and value stocks.

Yield is nice, but total return is the metric that matters.

Gold is overrated as an inflation hedge—historically, its price moves are unrelated to inflation.

For inflation protection, buy floating-rate corporate bonds.

Don’t let the mood swings of Mr. Market coax you into speculating.

Beware affinity fraud; find God, not hot investments, at your church, synagogue or mosque.

Sir John Templeton: “The four most dangerous words in investing are: ‘this time it’s different.’”

Don’t put more than you can afford to lose into a crowdfunded deal; startups are always risky, and the new JOBS Act reduces both paperwork and investor protection.

Don’t underrate the importance of liquidity.

Use Quicken or a Web service to track all your finances and see your big picture.

Use different passwords for each of your online financial accounts; add optional security questions whose answers can’t be found in your Facebook or LinkedIn profiles.

Write down your passwords and hide them; tell one person where they are.

Don’t fight demographics—allocate a portion of your portfolio to health care and biotech stocks.

Diversify globally to boost your portfolio’s risk-adjusted performance.

Benjamin Graham: “Speculation is neither illegal, immoral nor (for most people) fattening to
the pocketbook.”

Cash in on companies with stealth dividends—meaning stock buybacks.

Diversify, but don’t overdo it.

Set investing rules for yourself that block impulsive decisions.

Look beneath a fund’s name, with Morningstar’s Style Box and X-ray.

Use software to track your asset allocation.

Ask for a “brokerage window” in your 401(k)—an opening that allows you to invest in any mutual fund and even individual stocks.

Bond laddering is good, but diversifying your income investments is important, too.

Treasury Inflation-Protected Securities (TIPS) offer protection from inflation—not from rising interest rates.

John Bogle: “Time is your friend. Impulse is your enemy.”

Use salary increases to boost contributions to your 401(k).

Defy conventional wisdom and increase your stock allocation after retirement.

To make money in small-cap stocks, look for novel business methods and niches, not the next blockbuster drug.

Don’t abdicate investment decisions to your spouse.

Be suspicious—and investigate further—when a corporation changes its auditors.

Carry a $2 million or bigger umbrella insurance policy to protect your wealth from liability suits.

Warren Buffett: “Be fearful when others are greedy,  and be greedy when others are fearful.”

Invest to meet goals, not to beat indexes.

Clarify your own objectives by writing an Investment Policy Statement.

When you get restricted stock in a startup, make an 83(b) election; if the company takes off, you’ll save big on taxes.

Consider your marriage tax penalty (or bonus) before setting a wedding date.

Aim to have five times your salary in your 401(k) and IRAs by age 55 and eight times before you retire.

Dan Ariely: “If you can’t save money, be really nice to your kids.”

Put peer-to-peer loans in your portfolio using sites like LendingClub.com for monthly cash flow and yields of from 7% to 9%.

Peter Lynch: “Go for a business that any idiot can run—because sooner or later, any idiot is probably going to run it.”

Never take on a mortgage just for the tax deduction.

Keep no more than $250,000 in any one bank.

Buy an index fund weighted to fundamentals.

Remain anonymous after winning the Powerball jackpot.

Work for a charity for ten years and get your federal student debt forgiven.

Beware personal finance gurus pitching products.

The most successful investors spend many hours at it each day and have passion and patience. There are no shortcuts.

Warren Buffett: “Diversification is protection against ignorance.”

Like Captain Kirk, have advisors from different planets.

Before funding college accounts make sure you’re saving enough in your retirement accounts.

To avoid a tax penalty, tap IRAs, not 401(k)s, to pay college tuition.

Borrow from grandma at 4% for grad school; Uncle Sam’s Graduate Plus loans go  for 6.41%.

Marry a billionaire, or perhaps even more rewarding, divorce one.

When buying a luxury condo, ignore superfluous amenities like massage rooms and pet spas; they won’t contribute to resale value.

Add commercial real estate to your portfolio.

Wait for inflation to rise before buying TIPS.

Howard Marks: “Rule number one: Most things will prove to be cyclical. Rule number two: Some of the greatest opportunities for gain and loss come when other people forget rule number one.”

Before remarriage, discuss estate plans.

Track gambling losses to offset taxable gambling winnings.

Confess any tax crimes to a lawyer, not a CPA.

Deduct your yacht loan as mortgage interest on a second home.

Don’t do deals between yourself and your own IRA.

Don’t roll your old 401(k) into an IRA if you might face a lawsuit.

When creating a trust or family limited partnership for asset protection, don’t give it your own name or one obviously identified with you.

Profit from stock market volatility: Buy into a VIX futures fund and use wild, seemingly irrational swings as buying opportunities.

Gary Shilling: “The market can remain irrational longer than you can remain solvent.”

Beware dividend traps—fat payouts supported by declining cash flow.

Bet against weak currencies, like George Soros.

Back up your financial records using a secure cloud service.

Before investing in your own state’s 529, compare its fees and tax breaks to New York’s rock-bottom cost plan.

Buy liens on homes of real estate tax deadbeats.

Know thyself: Read books like Dan Ariely’s Predictably Irrational and Your Money & Your Brain by Jason Zweig.

Learn a lesson from each stock-picking mistake.

Julian Robertson: “Buy into forgotten markets.”

Join an angel investing club.

Keep your own entrepreneurial options open by refusing to sign onerous noncompete agreements.

Buy stocks of companies still controlled by their billionaire founders.

Leon Black: Do your homework, but still don’t  bet the ranch.

Louis Bacon: “As a speculator you must embrace disorder and chaos.”

Almost all great value investors look for market anomalies or disconnects that they can exploit.

Warren Buffett: “Big opportunities come infrequently. When it’s raining gold, reach for a bucket, not a thimble.”

Always keep some investment powder dry.

Allocate investments against your life risks.

Andrew Tobias:  “A penny saved is two (pretax) pennies earned.”

Deduct losses from your sideline/hobby by bunching your expenses and showing a small profit in 3 of 5 years.

Postpone real estate gains tax with a 1031 exchange.

Qualify as a “real estate professional” to save big  on taxes.

Be leery of investments sold for tax savings.

Burton Malkiel: “Start saving now, not later: Time is money.”

Before making a big discretionary purchase, calculate future cost—what the dollars you’re spending could grow to if invested for 20 or 30 years.

Read How to Make Money in Stocks by William J. O’Neil.

Buy designer goods at consignment shops; when you get bored with them, sell for a profit on eBay.

Discuss any prenuptial agreement way in advance of your wedding.

Hell hath no fury. Never cheat on your taxes and your spouse at the same time—exes are a big source of IRS leads.

Don’t buy a large amount of a thinly traded stock all at once.

Buy and hold at your own risk.

Don’t be afraid to buy into strength.

It’s okay to chase performance—sometimes.

Burton Malkiel: “In the stock market, past is not prologue.”

Start a 529 college savings plan for yourself before you have children. If you don’t use it for graduate school, transfer it to your kid.

Make your kid rich by helping him fund a Roth IRA.

Deplete Junior’s UTMA—you can spend it on a laptop, camps, private school and tutoring—before applying for college financial aid.

Reduce your student loan interest rate with auto debit.

Julian Robertson: Suggest your kid take an accounting course—“It was the course that helped me more than anything.”

Robert Shiller: “If you want to get rich, go into finance or a related field. Finance is the technology for making things happen.”

Identify companies that gouge you yet keep your business. Buy them.

Buy stocks like socks—good quality on sale.

Buy into big ideas just like a global macro hedge fund for as little as $1,000 to start.

Use limit orders when buying small-company stocks with low trading volume.

Don’t leave it all in the dollar. Invest globally for currency diversification.

Dollar-cost average the whole stock market.

Buy companies with high ratios of gross profits-to-total assets.

John Neff: “Buy on the cannons and sell on  the trumpets.”

Monitor your individual stocks; set a Google news alert and watch for signs of possible trouble.

Bone up on “risk parity” diversification.

Always know how a financial advisor is getting paid and what if any commissions she’ll earn.

Watch out for paid shills at investment seminars.

Ken Fisher: “You know who didn’t have bad years? Bernard Madoff—until he got caught.”

Buy a retirement annuity cheap by delaying Social Security until 70.

If you need to tap retirement cash early, study up on the exceptions that let you avoid a 10% penalty, including taking “substantially equal periodic payments.”

Burton Malkiel: “Tune out the financial TV channels. Watch the cooking channel or the gardening channel if you want useful advice.”

Warren Buffett:  “Returns decrease as motion increases.’’

Ron Baron: “Don’t waste your time short-selling. Show me the short-sellers’ yachts.”

If you earn too much to contribute to a Roth IRA, fund a nondeductible IRA and convert it.

If divorcing, get a “QDRO” from the court that allows you to split retirement assets without owing immediate tax.

Claim the American Opportunity Tax Credit for your kid’s college—if you’re eligible.

Don’t make multiple $9,900 bank deposits—the government might seize your money and keep it on the grounds you’re trying to skirt anti-money-laundering laws.

Do a bond fund swap to harvest tax losses.

Gain funding—and a market—on Kickstarter.

Barry Ritholtz: “Never confuse investing with trading.”

Don’t let the tax tail wag the investment dog.

Hold illiquid assets in a Roth IRA, not a regular IRA.

Be like Peter Thiel and put hot startup stock in a Roth IRA to make all gains tax free.

Learn about your fiancé’s debts, before you walk down the aisle.

Beware high-yield investments pitched as being like a bank CD.

Watch out for stock hoaxes on Twitter.

Be leery of pitches involving a self-directed IRA.

Benjamin Graham: “It is absurd to think that the general public can ever make money out of market forecasts. For who will buy when the general public, at a given signal, rushes to sell out at a profit?”

Avoid sudden lifestyle changes after a windfall.

Automatically divert money from your paycheck into savings to the point where it hurts.

Retire to a place without state estate or inheritance taxes.

Benefit from 20/20 stock market hindsight by reversing a Roth conversion if stocks tank.

Donald Trump: “Sometimes your best investments are the ones you don’t make.”

Ben Stein: Don’t move into a neighborhood of poverty. Avoid any situation that could leave you with too much unsecured debt.

Get an entrepreneur mentor from SCORE, an organization of retired business folks.

Tap your ethnic community for business funding.

To get the best effort and thinking from employees in your startup, give them stock options.

Like Spanx’s Sara Blakely, solve an irritating problem.

Larry Page: “It is often easier to make progress on mega-ambitious dreams. …Since no one else is crazy enough to do it, you have little competition.”

Don’t blindly rely on a target date fund in your 401(k).

Don’t let your advisor manage you.

Don’t rely on regulators to protect you from financial fraud.

Warren Buffett: “What is smart at one price is dumb at another.”

With large-cap stocks, focus more on cash flow than earnings.

Strong stocks tend to stay that way. Buy high and sell higher.

Don’t let family wealth become a curse on your children.

Start your kid at the bottom of your business.

Read Common Stocks and Uncommon Profits by Philip A. Fisher.

Buy a gift annuity from your alma mater.

John Neff: “When you feel like bragging, it’s probably time to sell.”

Mine your closet for eBay gold.

Mine your network for investment ideas.

Warren Buffett: “The risks of being out of the game are huge compared to the risks of being in it.”

Sell put options like Warren Buffett does.

Buy stocks when a magazine cover declares “The Death of Equities.”

Don’t count on an inheritance. If you get one, don’t blow it.

Leon Cooperman: “Getting rich takes hard work, a passion for what you do and luck.”

If you win the Powerball jackpot, hire a tax advisor before making any decisions.

Hunt down pensions from old employers.

If you’re 50 or older, with substantial self-employment income, use a custom-designed defined benefit plan to shelter $100,000 a year or more from tax.

Max out your 401(k) contributions: In 2014 you can contribute $17,500, or $23,000 if you’re 50-plus.

If your marriage is shaky, make a copy of all financial documents.

If your spouse is shady, file separate tax returns.

Burton Malkiel: “Never buy anything from someone who is out of breath.”

Know when to fire your financial advisor.

Be skeptical of “principal protected” products—ask how much is guaranteed and at what cost.

Be wary of companies that have gone public in reverse mergers.

Low-priced stocks aren’t necessarily cheap.

Make sure a stock’s dividends are less than its cash flow and likely to remain that  way.

Warren Buffett: “Risk comes from not knowing what you’re doing.”

Beware unlisted REITs.

Save remodeling receipts to add to your home’s basis and cut gains taxes when you sell.

Buy no more house than you can afford.

Don’t accept a high property tax assessment of your home—you can appeal and talk it down.

Don’t assume you should buy a house. Start by calculating rent-versus-buy costs for homes in your market.

If you have no time for complexity, diversify your portfolio with just three mutual funds.

Buy a deferred fixed annuity to make sure you don’t outlive your money.

Build your own ersatz retirement annuity with savings bonds.

Boost income with closed-end, covered call funds.

Burton Malkiel: “Trust in time, rather than timing.”

Delay retirement as long as you can.

But don’t assume in your planning that you can work full-time until 70.

Compare insurance costs before choosing a new car model.

Then go shopping for that model at month’s end.

To save even more, don’t own a car, share one.

Hold actively managed mutual funds—the kind that pass on the most-short-term gains—in tax-deferred retirement accounts.

Hold real estate in your IRA—but carefully.

Don’t let the groupthink of investment clubs cloud rational investment analysis.

Warren Buffett: “Diversification is a protection against ignorance.”

Follow top money-manager moves. Even the great investors piggyback on other smart investors.

David Dreman: “The time to buy is when there’s blood on the streets.”

Beware superstar CEOs with weak boards.

Compare benefits (including options) before switching jobs.

Find out how your 401(k) rates at BrightScope.com; if expenses are high or fund choices poor, lobby for a better plan.

Don’t give Uncle Sam an interest-free loan; adjust your withholding so you don’t overpay your taxes.

Even if you can’t pay, file your tax return.

Take a cue from Mark Zuckerberg: Get maximum tax savings for your charitable buck by giving appreciated assets to a donor-advised fund or supporting organization.

Read Market Wizards and The New Market Wizards by Jack D. Schwager.

Warren Buffett: “Time is the friend of the wonderful business, the enemy of the mediocre.”

Don’t chase yesterday’s winners unless they’re still winning.

Purchase “own occupation” disability insurance.

Remember that market underperformance—just like costs—compounds.

Ramit Sethi: Set up systems to automate desired behaviors. Leave your gym clothes at the foot of your bed. Have contributions to savings automatically deducted.

Open a spousal IRA for a stay-at-home husband or wife.

If you work from home, get a rider on your homeowner’s insurance policy to protect you if the FedEx man slips.

To maximize college aid, make Roth 401(k) contributions, not pretax ones, while your kids are in college.

Like Warren Buffett, make concentrated bets in stocks that you have high confidence in.

Live dangerously; invest your emergency fund instead of keeping it in cash.

Barry Sternlicht: Study outliers rather than eliminate them. You can learn everything there
is to know about the industry or the player  from the company that  is performing better or worse.

Don’t wait until expiration. Always look to buy back cheap options.

Most stock market gains since 1950 have occurred in the November-Aprilperiod.

Over the long run, small-cap stocks have outperformed big blue chips.

Take only calculated risks on the smallest Pink Sheet stocks.

Move inherited IRAs from trustee to trustee only.

Name primary and contingent IRA beneficiaries so your heirs can enjoy the maximum years of tax deferral.

Maximize your Social Security using a couples claiming strategy.

Open all mail from the IRS.

Don’t cheat the IRS and your business partner at the same time.

Never ignore a 1099, even if it’s wrong—the IRS won’t.

Don’t lie to your tax pro.

After you hit 70, take the required minimum distributions (RMD) each year from your traditional IRAs or face near-confiscatory tax penalties.

If you don’t need your RMD, consider rolling it directly to a charity.

Sign a living will, health care proxy and power of attorney, even if you’re still healthy.

Get a will. What happens to property if someone dies without one (intestate) varies by state and might not be what you would want.

Warren Buffett: “No matter how serene today may be, tomorrow is always uncertain.”

Insure your home for its replacement value; buy flood insurance if there’s a risk of water damage.

Scan in your tax records, and keep a copy on the cloud or on an external drive at work; fires and floods happen.

Keep business and personal expenses separate.

Maintain at least some financial accounts separate from your spouse’s.

Peter Lynch: “Know what you own and know why you own it.”

Have your kid read The Little Book That Beats the Market by Joel Greenblatt.

Don’t fall for cheap stocks that are really worth even less.

Read the classic Where Are the Customers’ Yachts? by Fred Schwed Jr.

Run from a pitchman “guaranteeing” high returns.

Benjamin Graham: Speculate only with a separate small portion of your capital.

Snitch on tax cheats and collect a multimillion-dollar IRS whistle-blower award.

Learn what behavioral economists have found about self-destructive investor behavior—so you can try to avoid these common and expensive mistakes.

Understand the risks of using leverage and inverse ETFs, which rebalance assets daily.

Benjamin Graham: “Every nonprofessional who operates on margin … is ipso facto speculating.”

Register for Medicare at 65, even if you’re still covered by your workplace insurance, to avoid having to pay a penalty later.

Rob Arnott: “No strategy can make up for inadequate savings or premature retirement.”

Start saving for retirement in your 20s to put the compounding winds at your back.

Use the Rule of 72: Divide your expected percentage return into 72 to figure how long it will take you to double your money.

Never sell a stock that keeps on rising in price.

Warren Buffett: “When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

Ben Franklin: “An investment in knowledge pays the best interest.”

Use ETFs to be your own international fund manager.

Don’t try to impose your ego on the market.

Set up 10% trailing stop-loss orders to avoid unexpected nosedives in your portfolio.

Barry Sternlicht: You have to be willing to change your mind. If you are a stubborn mule, you’ll get killed.

Read Warren Buffett’s favorite book, Benjamin Graham’s Intelligent Investor.

Be a vulture investor: Buy distressed bonds at pennies on the dollar like Marty Whitman and David Tepper.

Pay attention to moving averages. When the 20- or 50-day average crosses below the 200-day average it’s bearish.

Monitor the level of fear in the market with the CBOE put/call ratio and theVIX.

Get tax help if you’ve got incentive stock options—they carry tax benefits but also a nasty alternative minimum tax trap.

Pay public school tuition for your overachieving teen by getting steep discounts at great private colleges.

Don’t treat your 401(k) as a piggy bank; you’ll regret it come retirement.

Read Money Masters of Our Time by John Train.

Never buy anything from a cold-calling broker.

Be alert for the signs that a bubble is forming.

Use sentiment indicators as contrarian tools.

Don’t confuse correlation with causation in markets.

Small-cap stocks with lower price-to-book values tend to outperform.

Tap an IRA—not a 401(k)—without penalty for a first-time home purchase.

Leave the dollars in a Health Savings Account growing tax free for retirement while you cover medical deductibles and copays from your current income.

Use a “flight path” approach to asset allocation, raising your exposure to stocks as you become a more confident investor.

Know your sell rules before you buy.

Read letters of great investors such as Warren Buffett and Jeremy Grantham online.

Become an online stock researcher.

Beware of asset protection scams.

When stuck paying AMT, accelerate some income.

Rent out your vacation home for two weeks a year, tax free.

Most people don’t need a whole life policy; buy a 20-year level-premium life insurance policy before your first child is born.

Warren Buffett: “You only find out who is swimming naked when the tide goes out.”

Save $40,000 or more by sending your overachiever to community college and then have her transfer to a top public university or the Ivy League.

Save on a master’s—for yourself or kids—by earning it in Britain in one year.

Have your eldest child take a gap year before college so that more than one child is in school at the same time—you’ll get more financial aid.

Rothify—Roth conversions make sense in more cases than most people realize.

Time 401(k) contributions to make sure you grab your full employer match.

Factor your individual health and life expectancy into your decision on when to take Social Security.

Use an online calculator to help you determine the best strategy to maximize your Social Security benefits.

Put junk bond funds in tax-deferred accounts.

If your spouse dies, file an estate tax return to preserve his $5.25 million estate/gift tax exemption (rising to $5.34 million in 2014) for your own use later.

Buy master limited partnerships late in life to avoid their tax drawbacks.

Only buy closed-end funds trading at discounts to net asset value.

Invest in businesses with sustainable competitive advantages.

Don’t fight the tape.

Remember, three out of four stocks follow the market’s overall trend.

Spend 25% less than you make—it will give you flexibility to pursue the big opportunity.

Bruce Greenwald: To get really rich, copy the hedge fund, private equity and VC masters and “get your hands on somebody else’s money.”

Warren Buffett: “Investors should remember that excitement and expenses are their enemies.”

Watch out for high fees hidden in some tax-sheltered products like 529s and variable annuities.

Protect your assets before there’s a claim against you; after-the-fact moves can backfire.

Check your advisor’s ADV at www.sec.gov.

Remember Bernie Madoff: Make sure your investment advisor keeps your money in an account with an independent custodian.

Gary Shilling: Don’t try to reinvent the wheel. Instead, intelligently and efficiently apply what is already well known.

Warren Buffett: “You don’t have to make money back the same way you lost it.”

When selling a business, plan ahead and you may be able to save big on tax.

Retire to a place where jobs are plentiful.

Factor taxes into your retirement income strategy.

Take $500,000 per couple in gains on the sale of your home, tax free.

Don’t be afraid to deduct a legitimate home office—you can now claim up to $1,500 a year, with minimal recordkeeping.

Review the assumptions an ex-employer has made in calculating your pension. Mistakes aren’t unusual.

Keep 5% of your portfolio in gold.

Own gold through ETFs like GLD.

When pundits declare the death of “buy-and-hold” it could well be the sign of a market bottom.

Warren Buffett: “It’s optimism that is the enemy of the rational buyer.”

Burton Malkiel: “ ‘Efficient markets’ does not mean that the price of every security at every moment in time is correct.”

Look for undiscovered stocks with market caps between $1 billion and $10 billion.

Understand how the businesses you invest in make money.

If the short sellers are swarming around your stock, investigate the bears’ thesis.

When company insiders buy, you should, too.


Benjamin Graham: Those who want “freedom from concern” must accept lower returns.

Warren Buffett: It is “far better to buy a wonderful business at a fair price than to buy a fair business at a wonderful price.”

Burton Malkiel: “Avoid the temptation to follow the herd.”

Steve Jobs: “Your time is limited, so don’t waste it living someone else’s life.”


Source: http://www.forbes.com/sites/janetnovack/2013/11/27/365-ways-to-get-rich/

Too Many Credit Cards Hurts Credit Score

I recently came across a great Q&A session at Bankrate that I felt compelled to share.  I have received many questions in the past about how opening new credit cards impacts a credit score.  While the long-term effects may be positive, there are also short-term consequences to consider.

Does Opening a New Credit Card Hurt My Credit Score?

Question: Dear Credit Card Adviser,
I have a balance of $2,100 on a credit card with a $2,500 limit. I want to transfer that balance to a new card with zero percent interest. I opened another credit card with a $3,000 limit, but realized too late that I won’t be able to transfer my balance to it. So I applied for another credit card with zero percent annual percentage rate and no balance transfer fees, but I only got approved for a $500 credit limit. My girlfriend recently opened a store credit card under my name with a $1,000 limit as well.

Did opening too many cards at once hurt my credit and that’s why I only got approved for $500? Would closing the second card help me to get a higher limit on the balance transfer card?
– Steve


Answer: Dear Steve,
This is a common snafu when it comes to balance transfers. Unfortunately, there’s no way to know if your credit limit will be able to accommodate the balance you want to transfer until after you open the card. But generally, higher credit scores often get larger credit limits.

For example, some cards come with a credit limit range — say between $500 and $2,000 — and your credit score determines which end of the range you receive. In other cases, lenders will use a sophisticated system that considers credit scores, income, debt-to-income ratio or other types of scores to determine your customized credit limit.

This all means that your credit card issuer gave you a $500 limit because of your credit score, which was hurt by at least two factors: the two new credit cards and your utilization rate.

New credit makes up 10 percent of your credit score. The FICO credit score considers credit report requests from lenders to complete your application — called hard inquiries — that occurred in the last 12 months. Multiple hard inquiries often indicate a higher credit risk. The fact that you opened two cards in a short amount of time certainly didn’t help your credit score.

There are important caveats to understand regarding inquiries. The FICO credit score doesn’t consider so-called soft inquiries, such as when a lender pulls your credit for prescreening or account reviews or when you pull your own report. The score also allows for rate shopping and considers multiple mortgage or auto loan inquiries in a 45-day period as just one inquiry. The rate shopping isn’t applied to credit cards though — each of those applications submitted is considered a hard inquiry.

Inquiries aside, the bigger factor hurting your credit score is your current balance of $2,100. That balance raises the percentage of available credit that you’re using, also called your utilization rate, which influences your credit score even more than hard inquiries. Right now, you are using 84 percent of your available credit on the card with a $2,100 balance. Ideally, you want to keep your utilization rate below 20 percent.

Closing the second credit card won’t negate the negative effect of the hard inquiry on your credit score, and it probably won’t help negotiate a higher credit limit on the balance transfer card. It’s a long shot, but you can request a credit limit increase from the lender, but most don’t offer increases unless the account has been opened for some time.

Otherwise, transfer the $500 to the new zero percent APR card and work on paying it off during the interest-free period, while also paying more than the minimum on the remaining $1,600 on the other card.

While this isn’t the ideal outcome, you are saving interest payments on $500 at least. You’re better off than before. Good luck!

Read more: http://www.bankrate.com/finance/credit-cards/balance-transfer-mishap-hurt-credit-score.aspx#ixzz2bA0yZPyO

Harp 2.0 Refinance with Wells Fargo

I recently started a HARP 2.0 Refinance with Wells Fargo.  Before I started the refinance process I did some research online and found that a lot of people are being misinformed about the process and a lot more people have questions that are going unanswered.  Sharing my story will hopefully answer some of those questions.

First of all it is important to know that everyone’s situation is different.  If you situation is not exactly the same as mine then your experience in the HARP refinance will probably be different.  I own a property that according the the Freddie Mac automated appraisal is worth $259,000.  I currently owe $223,000 so I am at an LTV (Loan to Value) of 86% according to Wells Fargo.  I purchased the home for quite a bit more than it appraised and my PMI was just about to come off, but at the time of the refinance I did have PMI on the loan.  The original mortgage was through Wells Fargo and sold to Freddie Mac prior to the June 1st 2009 deadline to qualify for HARP, I bought the home in 2008.   Wells fargo used my middle credit score which was 731.   I was told by Wells Fargo that since they are  the original servicer of the loan they would only verify my two year employment history and they would be using a stated income for underwriting purposes.  I have never had a late payment on the home and was at an interest rate of 5.625% going down to a 4% rate because this is now an investment/rental property. 

I have seen a lot of people claiming that Wells Fargo is declining their HARP application because they pay on time so why would the bank want to give you a lower rate for an on time customer and make less money?  This is antirely UNTRUE!  While you may be paying on time, if you are at 80% LTV or higher you still carry a significant risk of default with the lender.  By allowing you into the HARP program they not only extend your loan, in my case adding 5 years, but they eliminate all risk of default since the government has guaranteed these HARP loans.  Think about it this way, if I am making $5000 per month at work and I get paid on time every month I am happy.  There is the risk that I could be laid off which would mean I no longer have that $5000 per month and I may be losing money due to my monthly debt obligations.  If you were offered a job paying $4,500 per month that guaranteed you would never be laid off, is that really a bad deal?  Absolutely not, and it is no different for the banks.

The biggest setback to HARP 2.0 loans is the amount of time it takes for closing.  Originally these loans closed in 60 days but there are so many applications out there it is now a 90 day process or longer.  I have gone through the extremely limited underwriting process and now I am just sitting around waiting for everything to finish.  I am self employed and have been for two years and Wells Fargo did not ask for my tax returns or anything else aside from a letter from my accountant stating I have been self employed the last two years. 

In the interest of full disclosure, the mortgage rep I was working with said Wells Fargo will randomly ask for tax returns which is why they have you sign a form 4506T during the application process.  The rep did say that everyone they requested returns on was denied, so if you do try a Wells Fargo HARP refinance in a Wells to Wells situation there is a chance they will verify your income and deny you.  For me, the income verification isn’t a big deal because I rent the home out and positive cash flow, plus I have only a very small amount of personal debt.  A vehicle financed at 0% interest costing $400 per month and a $300 per month student loan payment.  The home I currently live in is finance by my wife because we bought it before I had a full two years of self employment so I was not able to be on the loan.

Even if you get denied for HARP refinance, or any other refinance for that matter, you are not out of luck.  With the fiscal cliff sure to hit I wouldn’t be surprised to see interest rates drop even lower and HARP 3 to have even more relaxed guidelines to make your deal even sweeter at some point in 2013.  If they agree to some kind of fiscal cliff deal I don’t think the refinancing options will improve much, but it looks like they won’t reach a deal so refinancing in the second half of 2013 should be a great deal.

How to Build an Emergency Fund

Life rarely goes as planned. That’s why it’s always good to have an emergency fund in the bank.

Brad Smith, CEO of debt management company Rescue One Financial, in Irvine, Calif., works with more than 100,000 clients trying to avoid bankruptcy.

“Many of them could have avoided enrolling in a debt management plan had they had any type of emergency fund set up,” he says. “There are many people out there who are living so paycheck to paycheck that a blown transmission would send them into bankruptcy. An injured child or a natural disaster could easily be handled with additional funds.”

Avoid letting unexpected expenses or events lead you to financial ruin. Build your emergency fund by using these tips.

Start building your emergency fund with a specific goal in mind. While your savings goal will depend on your income and expenses, a general rule of thumb is to save enough to cover four to seven months’ worth of expenses.

“Everyone has wants, needs and desires when it comes to spending money,” says Pete D’Arruda, financial radio show host, author and president of Capital Financial Advisory Group in Cary, N.C. “Make sure you have seven months’ worth of emergency income available for the needs.”

Kevin Gallegos, vice president of Phoenix operations for Freedom Debt Relief, says to focus on having enough to cover expenses when setting your savings goal, not on replacing your entire income.

“Remember, in an emergency, we don’t fund vacations, fancy new clothes, dining out or other luxuries,” he says.

While you may aim higher eventually, Smith recommends making small goals at first, such as saving $1,000 and working your way up to a reserve to cover several months’ worth of expenses.

Your rainy day emergency fund should be easily accessible, but not so easily accessible that you’ll be tempted to make withdrawals for everyday spending.

“I like using an account away from my normal checking account to build a psychological wall between my spending habits and my emergency fund,” says Ray Lucia, a Certified Financial Planner and nationally syndicated radio host. ”Credit unions work well because they normally allow you to start with smaller amounts of money.”

Online banks also are good locations for your emergency savings account because you can’t just walk into the bank and withdraw your cash.

Danielle Marquis, adjunct professor of personal finance at Red Rocks Community College in Lakewood, Colo., recommends keeping emergency funds in a combination of locations and/or saving accounts, including an online savings account, in savings bonds and as cash in a lockbox at home.

If you can’t stomach keeping a significant amount of money in a standard savings account with a low interest rate, consider a money market account that allows withdrawals only at certain minimum levels, or purchase short-term certificates of deposit with three- or six-month terms on a regular basis. You’ll earn some interest and be required to constantly reinvest.

Establish a monthly savings goal and make it part of your regular budget. Marquis recommends setting up an automatic monthly transfer, just as you would with the electric bill or fitness club membership, to ensure the money is saved each month.

“The forced savings should feel like a bill pay transaction that is done on the same day of every month,” Smith says.

Paying yourself first through a direct deposit from your paycheck into your emergency fund account will help you build your fund steadily. But make sure you’ve created a balanced budget so you know you have enough money to save, says financial coach Matt Wegner of Matt Wegner Coaching in Sheboygan, Wis.

“Too many people direct deposit money in their savings accounts, only to turn around and pull the money back out to pay bills,” he says. “A solid monthly spending plan can help avoid this situation.”
Read more: 5 Ways To Grow An Emergency Fund | Bankrate.com http://www.bankrate.com/finance/savings/5-ways-to-grow-an-emergency-fund-1.aspx#ixzz2AvXb9Q4z

Which Credit Card Is The Best?

Anyone looking to change credit cards wants to make sure they get the best card available.  Which credit card is the best will depend on what you are using the card for.  You can classify credit cards in three categories; low interest, rewards and balance transfers.  The best credit card is going to be different for each individual circumstance.

Low interest credit cards seem to come from American Express.  Their Optima Platinum allows you to carry your balance over month to month and for excellent credit they have rates from 8-9.5% available.  Those looking for a low interest credit card are the types that don’t usually charge on credit cards but want to make sure they have one available for a true emergency.

The best rewards credit card depends on the rewards you are looking for.  If you fly one particular airline there is a good chance that airline offers a rewards program that would earn you more miles than any generic travel rewards card will earn you.  If you want cash back the current leader would have to be a tie between the Discover More card and the Chase Freedom card.  Both of these cards offer 5% cash back up to $75 on quarterly promotions like gas and groceries.  They offer unlimited 1% cash back on all purchases.

For balance transfer cards there are a lot of options available.  American Express has very good entry offers. but it is rumored that if you max out your balance transfers with American Expresss they will lower your credit limit.  Citi and Discover both have offers of 0% interest for 15-18 months with a 3% balance transfer fee.  You can find a lot of 12 month 0% balance transfer options with no fee.  Those looking for balance transfers are probably people that over utilize their credit and were put in a position that they are carrying a larger balance than they like on the card.  This is the type of spender that credit card companies love to solicit.  Someone that can’t live within their means but still has decent credit making payments on time is the perfect customer for any credit card company.

However you use credit cards, and whichever perk you are looking for, the best credit card available is the one you pay off every month.  For more information on credit card rates visit HowsTheRate.com.

Please tell us in the comments what you think. which credit card is the best?

Refinancing Your Home

With interest rates hovering near all time lows, everyone is talking about refinancing their home.  Some people have curious talk asking things like “Should I refinance my home?” or “Is now a good time to refinance my home?”  Others have doer talk, asking “Should I refinance at a 15 year or 30 year mortgage?”

If you are the curious individual not sure if refinancing is for you then the following bits of information should help you make your decision.  If you are a doer and already committed to refinancing your home then the following information should serve as a guide for you.

So what factors go into the interest rate when you are refinancing, and what is most important?

Your loan term and loan size will be most important because the amount of your monthly mortgage payment will be considered in your debt to income ratio.  Obviously with a 15 year mortgage you will pay less interest, but you may not qualify for that short of a mortgage term.  The size of your loan is important too.  Can you refinance the $200,000 you owe on your existing mortgage or do you need to do a cash out refinance at $350,000 because you want that in ground pool or some other expensive home addition?  The amount of your loan will certainly impact the term you are eligible for when refinancing.

Your credit score is probably the second most important factor when it comes to refinancing your home.  (It probably takes the top spot on a new home purchase.)  These days with tight credit guidelines you are only going to qualify for the 3.75% on a 30 year mortgage or 2.75% on a 15 year mortgage if you have a credit score above 750.  Sure you can buy points to get those rates if your score isn’t that good, but you are spending money you wouldn’t have to if you improved your credit.

The loan to value is another key factor when refinancing your home.  Many times on a traditional primary home refinance you can go to 90% loan to value.  On a second home you can find refinance offers at 80% loan to value and for investment properties you are looking at 70-75% loan to value.  This is because the amount of risk associated with default is highest on a rental property, followed by a secondary home.  I wouldn’t recommend refinancing your primary home unless you are at 80% loan to value or better because if you’re not you will have to pay private mortgage insurance or PMI.  Today’s PMI rates are double the rates from just 5 or 6 years ago.  Refinancing might save you $200 per month in your mortgage payment but cost you an extra $150 per month in PMI.  When you factor in closing costs it is silly to pay all that money to save $50 per month on a home that you will probably not own for the amount of time it would take to make up the difference.

Best CD Rate Return

I recently found an article that speaks to optimizing the returns available on the currently abysmal CD rates.  While it is the full recommendation of RPP Financial that investors seek other investments to replace CDs from their portfolio, those that refuse could use this bit of information.

It’s been a challenging few years for low-risk investors. Certificates of  deposit used to offer the guarantee of increased earning potential, but opening  a CD in 2012 doesn’t give account holders many reasons to celebrate.

However, banks and credit unions have begun to offer new products with  greater potential for CD returns. With more flexibility, more liquidity and more  ways to break the traditional restrictions of timed deposits, today’s CD climate  has become more welcoming.

If you’re in the market for fixed rates with fewer reasons to feel on edge,  here are four ways to get more comfortable with locking your money away

For savers who want a CD that functions more like a savings account, some  financial institutions have begun offering an add-on or add-to function that  allows account holders to contribute more funds before maturity. Instead of  locking away a lump sum on account opening day, customers can arrange monthly  deposits that increase the principal and therefore a bump in CD returns.

Shawna Thompson, senior product strategy manager of BECU, the Tukwila,  Wash.-based credit union, says that the add-on CD option makes a great match for  consumers who are saving for specific expenses with set dates, such as annual  property tax dues.

Thompson says the option provides a way for consumers to learn how to save  with self-discipline through automatic monthly transfers that cannot be  withdrawn without paying a penalty.

“We think the add-to option provides a strong way to help our members  understand how to save more,” Thompson says.

While traditional CDs lock account holders in to one set rate, bump-up CDs  give account holders the ability to raise their interest rates.

The ability to increase your earnings potential in the middle of a term can  be attractive, but knowing when to exercise that rate increase can be  challenging. Thompson recommends paying close attention to when the Federal  Reserve raises the federal funds rate.

“Keep your finger on what’s going on in the economy,” Thompson says.

Some institutions send customers notifications when the bank’s rates rise on  savings and investment instruments. Beth Coggins, spokeswoman at Midvale,  Utah-based Ally Bank, says account holders can schedule alerts when rates cross  a certain threshold.

However, today’s sluggish market means that CD rates may not reach much  higher. While raising your rate sounds like a winning scenario, consumers often  wait too long to actually utilize a rate increase on bump-up CDs, says Ryan  Bailey, senior vice president of TD Bank.

“Bump-up CD holders typically hold out hope that rates will rise, but we’re  in a flat-rate environment,” Bailey says. “Before you know it, the CD is ready  to renew, and you never had the chance to raise your rate.”

While bump-up CDs require timing the market and being aware of interest rate  shifts, Bailey says that step-rate, or step-up, CDs provide predictable annual  increases.

“CD buyers generally like the certainty of CD rates,” Bailey says. “Step-rate  CDs provide the certainty that your rates will climb over time.”

The frequency of rate increases varies with the financial institution. While  some banks offer step-rate CDs that increase every six months, similar CDs may  only increase once each year.

Regardless of how often predetermined increases go into effect, account  holders can use the schedule of interest rates and the principal deposit to  calculate their earnings before opening a new step-rate CD.

Traditional CDs come with one heavy piece of baggage: a penalty for removing  money before maturity. Today, many banks and credit unions are offering CDs that  lighten that load. While interest rates and CD returns for no-penalty CDs are  typically lower than traditional CDs, account holders benefit from the assurance  that they will not lose a penny of their principal.

For consumers who worry that they may need their money before the end of the  term, TD Bank’s Bailey says that no-penalty CDs provide the benefit of a small  earnings bump with the additional perk of easy access to money.

“If you have concerns about job security or the economy in general, a  no-penalty CD can make a great choice,” Bailey says.

Read this article in full at Bankrate.com.

Buying A Home Without A Down Payment

Credit guidelines for home mortgages are extremely tight right now.  To qualify for the best rates available you need a great credit score, low debt to income ratio and a large down payment.  Even on an FHA loan you are still required to come with a 3.5% down payment.  One a $200,000 mortgage you are looking at $7,000 down.  So why is it that you can still hear about people buying a home without a down payment?  It is happening everyday, there is no doubt about that.  Here are a few tips if you are buying a home without a down payment sitting in your bank account.

Before you can even consider buying a home without a down payment you need to make sure all other areas of your mortgage profile are in order.  For instance, you will still need good credit and a low debt to income ratio.  You will need to have a verifiable income and stable job history.  If you have all of those things then you will most likely qualify for an unsecured line of credit.  Be warned, this is essentially the same thing as a credit card.  A survey of some of the major banks in the United States shows a line of credit for excellent credit scores will have interest rates as low as 9% for qualified individuals.  You open that line of credit and leave the money in your savings account before you apply for an FHA loan.  Hopefully your line of credit is high enough to cover the 3.5% required down payment for an FHA loan.  Your debt to income will need to be low enough that you still qualify for the mortgage with the added minimum monthly installment amount on the line of credit.  This is a risky way of buying a home without a down payment and may not be a good fit for everyone.

Another option is buying a home on contract.  Many people seem to be scared of buying a home on contract but it is no different than getting a mortgage from the bank.  The risk you run is the homeowner having a mortgage that they fail to pay and you are in a legal battle with a bank on who owns the property.  If a homeowner owns the property outright then buying on contract really is no different than a mortgage.  You need to make sure the contract is filed at your county recorders office in case the homeowner decides to try anything shady.  If you are buying a home on contract then you need to make sure it is a good fit that both you and the current homeowner are comfortable with.

If you have any experience of your own for buying a home without a down payment please feel free to share your insights in the comments section.  For more information on mortgage rates please visit HowsTheRate.com.

What is an ETF? Plus the Pros and Cons

what is an ETF?A lot of investors are making the change from mutual funds to ETFs.  So what is an ETF? An ETF, or Exchange Traded Fund, is essentially a mutual fund that trades like a stock.  Anyone that has bought a mutual fund knows that when you make the buy order it does not get processed until the market closes that day depending on when the order was placed and the cutoff time.  Buying an ETF gives you the opportunity to know the exact buy and sell price when the order is placed.  You can buy and immediately own an ETF if your buy order was made while the market is open.  The same is true for when you sell your ETF.

An ETF will have many holdings like a mutual fund does so you are not limited to one investment like you are when buying a stock.  For instance, if you want to follow the S&P 500 you can buy an ETF index that follows that particular index.  For example, say shares of an ETF S&P 500 index are trading at $10.00 per share when you put your buy order in for a total investment of $1,000.  You now own 100 shares of this ETF that will perform very similar to the S&P 500.  Using the same example, say by the time the market closes the S&P is up one percent on the day.  (See HowsTheRate.com for investment return rates for the S&P 500.)  If you made a similar buy order for a mutual fund that was at $10.00 per share when the market opened, your buy order wouldn’t go through until market closed and shares were at $10.10 per share.  The same thousand dollar investment would have bought you 99 shares of the mutual fund.  So you are out one share and $10 profit because you had to wait for your buy order to go through on a mutual fund.

That same example can work in the opposite direction too.  Just like a stock you can lose money the second your buy order goes through.  If you are taking a buy and hold approach the small difference from your order being executed at the end of market day probably won’t make much difference in 20 years.  This brings us to another benefit of ETFs.  Say you buy into a large position of a mutual fund and things look bad for the sector it is invested in.  You want to sell, but shoot…. There is a 90 day holding period or a 2% early redemption fee.  With an ETF you don’t have that problem.  You are simply out your brokerage fee for the buy order.  Many discount brokerages will charge you less than $10 for the purchase of an ETF.  The 2% early redemption fee can cost you a lot more than a $10 commission.  A round robin trade is buying and selling the same mutual fund.  Many mutual funds have restrictions on the number of round robin trades allowed within a given period of time.  If your investment takes off and you want to dilute your position you may be forced to pay another penalty or fee for the sale.

Now you know the answer to the question a lot of investors have been asking lately, what is an ETF? There are pros and cons to ETFs, but in short they allow investors to buy and sell mutual funds like they would a stock.  The biggest benefit to this is the limited risk that comes from an ETF over a stock because of diversification.

Best Dividend ETF

For those of you that don’t know an ETF or Exchange Traded Fund is a mutual fund that trades like a stock throughout the day.  We recently received an email request from a visitor looking to save time on research.  They were looking for the best dividend ETF available.  Why anyone would prefer a high dividend ETF over a mutual fund is beyond me.  An ETF will not have the same minimum holding period or round trip trade caps that a mutual fund will have, but you also won’t make any more money buying and selling an ETF around the dividend execution dates than you will holding a mutual fund.  Also, it should be known that the “dividend” an ETF pays is many times actually a distribution, not an actual dividend.  But in the interest of providing the information our visitors are looking for, this is what we found for the best dividend ETF.

Best Dividend ETF List

BDCL (14.76% Distribution Yield) – This fund seeks to replicate the Wells Fargo Business Development Company index.  The index is a float adjusted, capitalization-weighted index that is intended to measure the performance of all Business Development Companies (“BDC”) that are listed on the New York Stock Exchange or NASDAQ and satisfy specified market capitalization and other eligibility requirements.  The BDC business model is to lend to small and midsized companies at high yield equivalent rates while also at times taking equity stakes in such companies.

NLR (13.64% Distribution Yield) – The investment seeks to replication as closely as possible, before fees and expenses, the price and yield performance of the DAX global Nuclear Energy Index.  The fund normally invests 80% of its total assets in equity securities of U.S. and foreign companies primarily engaged in various aspects of the nuclear energy business.

TAN (13.62% Distribution Yield) – This investment follows solar energy and is NOT recommended by RPP Financial.  As we have stated in previous posts, it doesn’t seem that solar is going to be the sector to be involved in if you are looking for an alternative energy play.

REM (11.47% Distribution Yield) – The investment seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE NAREIT All Mortgage Capped Index. The fund invests at least 90% of its assets in securities of the index and in depositary receipts representing securities of the index. The index measures the performance of the residential and commercial mortgage real estate, mortgage finance and savings associations sectors of the U.S. equity market. It is non-diversified.

These figures are based on the ETF screener available through Schwab.com.  This is not an all-inclusive list of ETF investments available.  Our screener’s only criterion was a dividend or distribution yield above 6% interest.  This is the top four listings for the best dividend ETF.  Please also note that a dividend and a distribution yield are not the same like many investors think.  The distribution an ETF provides is income from dividends the investment holds as well as capital gains.


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