Facebook’s IPO finally hit the market at a raised price of $38 per share.
Some were expecting the shares to “pop” as soon as they start trading.
Instead, shares went up to the $40-41 range, but finished the day at $38.23.
I didn’t get into the action, but many others hopped on to get a slice of Facebook. I’m still not convinced they should be trading at a Price-Earnings ratio of 122. In comparison, GE trades at P/E of 15.5, Apple at P/E of 12.93, and Ford at P/E of 2.11 times earnings.
Most of us commonly think of Social Security as almost synonymous with retirement — but it was never planned to be.
When it was established in the 1930s it was set up to be primarily an anti-poverty program—or “social insurance”—dealing with old age, poverty, unemployment, and the burdens of widows and fatherless children.
The stock market crash of 1929 and the onset of the Great Depression collapsed incomes across the board and wiped out the savings of many of the elderly. The government responded by implementing Social Security to remedy many of these economic ills.
Strictly speaking, it was never intended to be a retirement plan as much as a supplement for lost wages.
The Depression is now deep in the history books and with it, the original intent of Social Security. Today it’s mostly seen as a retirement plan.
But is it really?
We all want to make more money.
And, for many, the dream is to make money quickly and with a minimal amount of work. This is why investing is such a popular method of making money.
If you take a measured approach, you should be able to regularly invest in carefully chosen stocks, index funds or some other boring investment, and, over time, amass a reasonable amount of wealth as you receive returns on your investment.
Many people, though, don’t want to take the measured approach.
There are stories of people making money fast by choosing the right investment, at the right time.
How many of us regular folks harbor the dream of, perhaps, taking $10,000 in capital and turning it quickly and painlessly into ten times that amount?
The unfortunate truth is that investments that promise such riches, fast and easy, are usually scams.
Years ago, children graduated from high school, got a job and shortly thereafter got married, bought a home and had children.
This pattern may have been delayed a few years as more and more people obtained college educations, but the pattern remained basically the same.
Now, however, the number of adult children living with their parents has skyrocketed. In fact, as recently as 2010, Calculated Risk shared that nearly 13.5% of individuals ages 24 to 35 lived at home with their parents. This group has even been given their own name—Boomerang Children–because they leave the nest for some time but then return back home, sometimes for years.
If your adult child has moved back in, should you charge them rent?
It used to be revolutionary to hold your money with a bank that didn’t have any brick and mortar locations for you to visit.
Now high yield online savings accounts are more common and the decision comes down to which online bank you should open an account with.
There are many key factors in that decision — high interest rate, customer service, and account fees — that Ally Bank’s online savings comes out on top if you compare to other accounts.
Ally Bank’s story sounds eerily familiar to the mythical firebird phoenix that is rebirthed out of its own ashes.
That might sound strange for a bank, but Ally Bank is the new edition of GMAC or General Motors Acceptance Corporation.
GMAC was originally founded in 1919 and grew over the course of time, but like many banks a few years ago, got caught up in the financial crisis due to loose mortgage lending standards. The bank had to take on TARP funding from the government and was rebranded to shed some of the bad image associated with the financial crisis. A significant portion of the company is still owned by the US government, although the company is actively repaying on the funds it received. (And a majority of the problems are on the mortgage side of the business, not on the personal banking side that Ally is on.) Continue Reading
Facebook is set to have its formal IPO this week and trading will likely begin on Friday.
It is one of the most anticipated initial public offerings in history and will make Mark Zuckerberg quite the wealthy individual.
His employees won’t turn out so bad either — although they’ll likely pay about 45% in tax on the shares they sell. That’s okay though, since the average tax hit is anticipated to be $1.1 million per employee. ($1.1 million is 45% of $2.44 million, which would leave the average employee with $1.34 million. Of course we know how averages work: some employees will have much more, some will have much less.)
One interesting tactic to avoid paying taxes on the IPO? Renounce your US citizenship. That’s what one of Facebook’s four co-founders just did.
Since reaching a high price of $1,913 back on August 23rd of 2011, gold seems to have fallen off the investment radar screen.
In fact it seems the only time gold is ever on that screen is when it’s on its way to establishing new record prices.
Now that gold has settled comfortably in the mid-$1,600 range no one seems to be paying much attention.
But how should we take that?
Will gold slowly drift its way back down below the $1,000 mark, or will it—as some claim—continue to rise to ever higher prices punctuated by periods of price stability? And should we even consider gold as an investment?
The rules surrounding your ability to contribute to an IRA generally require you to have earned income in order to contribute at all.
This prevents people trying to exploit loopholes such as parents opening and funding an IRA for a child well before the child earns any income.
However, there is one exception available for married couples that can allow for both individuals to contribute to an IRA even when both do not earn an income.
This exception allows stay at home parents and other non-working spouses the ability to still contribute to an IRA despite not earning an income.
The family vacation is pricey.
According to Free Money Finance, in 2007, the average American spent $1,654 on their summer vacation.
If the vacation is a week long, that is approximately $236 a day, of which I am guessing accommodations are a large portion of the expense. If you are a family of four, you may be able to stay in cheaper hotel accommodations, but if you have three or more children, hotel stays get to be tricky (and expensive) because most hotels will only sleep 4 to a room and want you to buy two rooms or a suite, both expensive options.
Every now again, we hear about inflation, and the way it erodes your earning power.
As prices rise, you either have to earn more money, to keep pace, or you have to cut back on your spending so that you aren’t using as much of your money.
Most people prefer to look for better returns.
The right investments, or leveraging your money on low-rate loans to position yourself for the future, can help you make the most of your money now and hedge against inflation.
However, you can also hedge against inflation in a more indirect way: Get an education.
Higher Degree = Better Earning Power
You’ve heard stories about how someone with a degree makes more money than someone without one. And, for the most part, it’s true. If you invest in a college education, you are repaid with a higher lifetime earning power.