Feed: Finance under 30 - AggScore: 50.1

Strategies for Investing

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I believe in investing in stocks as a way to make money, and build wealth.  I believe in investing in companies with solid fundamentals.  For me to invest, companies must have a good product first and foremost.  I must believe in the potential for growth of the company, and the industry that they are in.  I must believe the company leadership is taking steps to direct the company toward growth and improvement.  If all of the fundamentals are in place I look for companies that have been undervalued.  It is possible to invest in a good company with good growth prospects and still lose money if they are overvalued in the market.  It is responsible investing to look for companies that have seen their stock prices seemingly drop for no conceivable reason.  Two of these companies that I look at and like a lot at this time are GE and Johnson and Johnson (JNJ).  GE suffered a lot during the recession because they have a large GE capital division, and they suffered a similar fate to much of the banking industry.  Johnson and Johnson struggled in 2010 because of a number of product recalls.  They have a number of solid products and should exhibit good overseas growth as smaller markets continue to grow and develop.  Also, both of these stocks payout quarterly dividends and have paid dividends for a long time.  Dividends offer a "guaranteed" income and if a company is willing to pay out cash seems to me to offer a sign that the company is in a good position to return money to their stock holders.  For young investors dividends can really pay off by increasing the capital with which they can invest, and with the prospects of compounding, and long term investing, those dividend payments can be turned into large gains.

Great Sites for Savings

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• mint.com- A great site to use to organize all of your finances
• CreditKarma.com- with this you can track your credit score.  It does not provide your FICO score, but uses a complex algorithm to estimate it, and provides you with information which can direct you toward steps you can take to improve your credit score.
• Walletpop.com this site offers a number of money saving tips.  I particularly like the Bargain Babe and Fantastic Freebies sections.  I recently took advantage of one of the freebies advertised on the website for free business cards from Vista Prints, and I could not have been more satisfied.
• Retailmenot.com- A great coupon aggregator which I check any time I am shopping online to see if there are any active coupon codes I can use to save money on whatever I am buying. 

Brown Bagging Lunch

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One great way to save money is to bring lunch to work rather than going out to eat every day.  By bringing lunch everyday you can eliminate a lot of unnecessary expense.  I generally try to take something that is left over from dinner from the night before, and I consider this to have essentially cost nothing because I had already made the food, and if it were not eaten then, it may have simply been wasted.  Even if I make a lunch, I figure it costs less than three dollars to make.  If you figure an average lunch out somewhere will cost you between 5 and 10 dollars, you are saving 5 dollars a day.  over the course of a year (5 working days a week x 52 weeks in a year= 260 working days) you could potentially save over dollarsignr1000 a year simply by brown bagging lunch.  Not only does it save money to bring lunch, but it is also, likely healthier than eating out regularly.  When eating out, the control you have over what goes into your food and how it is made, are severely limited.  I figure that by taking lunch to work everyday, I not only save myself money, but promote healthy habits, and encourage myself to eat healthier.

Savings Tips for 2011

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1. Start an emergency savings fund in a high yield savings account. Interest rates today may be minuscule with the highest yielding savings accounts yielding about 1.0-1.5%, but receiving the maximum guaranteed yield you can is still beneficial.  By placing your money in a high yield savings account rather than investments or CDs it remains liquid and is FDIC insyred so you will know that you have access to it if and when you need it.
2. Don’t Pay Banking Fees. Find a  bank that offers free checking, and some even offer checking with a low interest rate.  Also look into banks that either don’t charge ATM fees or reimburse those fees.  Personally, I use PNC bank.  I have a “My Wallet account” which offers a free checking account, a high yield savings account, and reserve account which offers a low interest rate yield.  They also reimburse any and all ATM fees if you maintain an average monthly account balance of dollarsignr2,000.  The only drawback to this account is that if you write more than three checks a month they charge you a fee, but for me this is not an issue because I pay all  my bills online.
3. Pay Bills Online: By paying bills online I receive bonus points from the bank and my credit card company.  On top of that I save money on the stamps that would be used to mail bills back.  At 44 cents and rising, stamps may not seem like a big expense, but when you consider rent, electricity, water, cable and internet, phone, and insurance you are spending nearly  3 dollars a month which adds up to dollarsignr36 a year.  Small steps to saving can add up to big savings over the years.
4. See what you spend: Budgeting…I know it sounds like a bad word, but establishing a budget is one of the keys to saving.  By seeing where you spend money, you can see where you can save money.  I like mint.com for this.  If you sign up and register all of your accounts, mint will help you to categorize all your spending.  After a couple months of tracking you should be able to estimate what you will need to meet your ordinary monthly expenses in everything including housing, utilities, automotive care, and even restaurants and bars.  If you don’t want to use mint.com it is relatively easy to set up a budgeting spreadsheet which can track the same things using microsoft excel.  If you are interested in this and need some help getting started let me know, and I can help you establish this spreadsheet.
5. Establish a retirement account: If you work, and they offer a 401k  with a match, contribute at least enough to capture the full employer match.  If you are not doing so, you are throwing money away.  At my employer they will provide a 25% match on the first 6% of our gross annual income.  It may not seem like much, but it is like being paid an extra 1.5% annually, consider that on a dollarsignr50,000 salary, that would be an extra dollarsignr1,500 a year, and I don’t know anyone who wouldn’t like to make an extra dollarsignr1,500 a year.  Plus these contributions are pre-tax, so you decrease your overall tax burden for the year by contributing to these accounts. If your employer does not offer a 401k with match, consider opening a RothIRA which will allow you to pay the tax on your deposits as ordinary income, but then will allow your money to grow for years and years without having to pay tax on this money when you withdraw it form the account.
6. Pay off Credit Cards: Do not carry a balance on your credit cards from month to month.  This is again like throwing money away.  With credit card interest rates being anywhere from 10-20%+ it is simply wasteful to put that extra money in the credit card company’s pocket every month.  Responsible use of credit and credit cards are necessary for the building of credit, and in my opinion, part of this responsible use is not spending more than you can pay off each month, and then paying the bill off every month.
7. Take advantage of Credit Card Rewards:If you are going to use the card, and they offer you something for it, why not take advantage of it.  If you aren’t carrying a balance from month to month the higher interest rates on these cards, are not an issue, and eventually you will get something back from the credit card company.  the return on your input may not be great, but something is certainly better than nothing.

These are my savings tips for 2011, please share your thoughts and any additional tips you have so we can all benefit from the maximum savings we can this year.

Online Investment Brokers

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Financial Goals for 2011 and Standings as of Jan 15, 2011

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Let me start this by saying I am a huge fan of mint.com  I love the way that it draws together all of your account information from all of your banking, loan, credit card, and investment accouts together.  It also allows you to add other assets you own to calculate your net worth, and offers you ideas of ways you can save/make more money
Net worth from Mint.com estimate: -dollarsignr11,315.95
Student Loan Balance: -dollarsignr19,803.64
Investment portfolio balance: dollarsignr1,920
Goals for the year 2011;

1. Establish an Emergency Savings fund in a High Yield savings account with 2.5 months salary saved.
2. Increase investment portfolio balance through appreciation of assets and regular contributions to dollarsignr10,000.
3. Pay Student Loan Balance down to dollarsignr15,000
4. Increase net worth to +dollarsignr20,000 before Dec 31, 2011.

I will provide 2 monthly updates towards the progress towards completion of these goals.  Updates should be posted on or around the 1st and the 15th of each month.

Financial Beliefs

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Introduction and Background

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I’m a 22 year old young professional.  I graduated from college at 20 and have been working since then. During the day, I work in Biotechnology.  I am not a finance or investing expert but the idea behind it fascinates me and I have worked hard to learn as much as I can about the markets in whatever time I have available.  When I have time I enjoy reading up on stocks and investing, and am always trying to figure out what the next move that I will make is.  Over the next days, weeks, months, and years I want to invite you to join me as I share information about my finances, investments, tips, strategies, and random musings.   This blog will follow my finances, investments, net worth and the moves that I am making to improve all of the,.  Along with that comes whatever setbacks may occur along the way and ideas that appeal to me, but that I do not act on.