February 2007
You are currently browsing the articles from General Finance written in the month of February 2007.
Before my wife and I moved into our current home we rented an apartment that was loft-like and about 1,100 square feet. We participated in a program through our gas company that allowed us to pay the same amount each month of the year. So our bill was $44 a month and some months went by where we paid nothing because we had overpaid through this plan. There was a furnace in the apartment and this program worked very well for us. Our total bill was never over $500 for an entire year.
Since we have moved we have a new gas company that offers the same plan, but the payment would be 3-and-a-half times as much as we paid before. Our new home is not even twice as big as our apartment was. Our first bill was the same amount as the price to participate in the plan and this was during the warm part of our winter. I found this outrageous because we do not use a lot of gas because we attempt to conserve and because there are only two of us.
Since our home is over 40 years old it does have a lot of leaks and I think this is a major cause of the price jump. Therefore, we are planning on adding some more insulation soon and I hope this can cut down on the bill a little. As it warms up I plan on replacing windows and doors so we can get rid of some of these leaks.
Our most current bill was over $180 so things are getting worse, not better. We shall see how all this works out, but so far I am not too happy with our gas bill.
Written by Nagel on February 18th, 2007 with no comments.
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I spoke a couple months back about opening a savings account with E-LOAN. Unlike my dealings with Everbank, E-LOAN has been smooth sailing so far. When I opened the account I deposited the minimum amount of $5,000. So far I have made over $42 in interest on that $5,000 deposit. Their 5.50% APY outstrips all other savings accounts (online or brick-and-mortar) I have looked in to as well as money market accounts. Once we finish our kitchen rehab we will begin depositing more money into this account.
I have had no problems with E-LOAN so far, but I guess there has not been much for them to screw up. Speaking of which, on Saturday I checked my Everbank checking account and I noticed a check was debited from my checking account. It was for $3,280 and I do not remember writing a check for this amount. Moreover, my records reflect that this check was voided to fulfill a requirement to set up a direct deposit for my wife’s work. I wrote VOID on the signature line and on the middle of the check. I hope my records are incorrect. I called Everbank and they said they could not do anything until Monday. I was not happy with that solution because I thought they could at least start an inquiry into the validity of the check. Needless to say, if this turns out to be fraudulent and Everbank does not correct this problem I will be leaving Everbank–their customer service has been ok at times, but the lack of information as well as the incorrect information has caused a lot of heartburn so far. We will know more soon.
Written by Nagel on February 15th, 2007 with no comments.
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Since moving in a couple months ago I have examined the electric bill and have not been outraged. Our first bill came, I opened it and I did not have sticker shock. At our old apartment our electricity bill was usually in the high $30s or $40s with little fluctuation. Our first bill at our new home was a little under $55 and I found this much more reasonable. Yes, it is a 25-35% increase in costs, but we did not have many appliances that we have now plus our electric company just hiked prices 25-50% after a government imposed rate freeze of several years.
I am not thrilled with the increase, but I saw it coming. Plus if my wife and I want to cut the electric bill down a little we can find ways to conserve so the bill does not get out of hand.
Written by Nagel on February 14th, 2007 with no comments.
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Starting a small business can be overwhelming. Entrepreneurs really need someone to show the way so time and money is not wasted trying to reinvent the wheel.
Smartmoney’s Colleen Debaise gives some insight on getting a mentor when starting a small business.
You’ve got your start-up. Now you need a sounding board.
Finding a business mentor who can help you shepherd an early-stage company to success is an important — and often overlooked — strategic decision. First-time entrepreneurs in particular can benefit from the smart advice of someone who’s been there, done that and is willing to share lessons learned.
“Mentors can provide a one-of-a-kind development opportunity,” says Elizabeth Ingrassia, who three years ago helped create the mentoring program at New York University’s Berkeley Center for Entrepreneurial Studies, which pairs business executives with students in the school’s business-plan competition. “We all need some form of insight that’s outside of our everyday life and educational experience.”
The best mentors offer feedback, constructive criticism and even a boost of confidence when needed. You don’t have to find one through a formal mentoring program, but it’s helpful to narrow down what you’re looking for. “Entrepreneurs typically are going to want people who have industry experience,” Ingrassia says. Or, an entrepreneur might seek a mentor who understands the process of starting a small business and can provide advice on everything from hiring employees to raising capital. “That person may not necessarily be an industry insider, but may have been on a similar journey,” she says.
Here’s where to find a mentor:
The government
Free counseling is available through the Small Business Administration’s Small Business Development Centers and its affiliated organization Score, both of which have chapters throughout the country. At the New York City chapter of Score, people often stop in for advice because they have a great idea but no clue how to start or run a business, says Herb Winkler, the chapter’s chairman. Volunteer counselors, many of whom are retired business executives, will explain the ropes. “Everything that goes on in business — good and bad — we’ve been though,” he says, ticking off common concerns such as managing cash flow, making payroll and getting a loan. “We tell them what’s involved and some of them never come back.”
The chapter advises about 9,000 clients a year — and many times, those first meetings turn into long-term mentoring . Winkler, a veteran of the apparel industry, has spent the last six months counseling the owner of a start-up sportswear company. He’s met with her about a dozen times, and brought in another Score counselor with accounting experience to help her write a business plan and apply for a $200,000 bank loan. What’s in it for the mentors? “There is a great satisfaction of taking someone who is not in business, and doesn’t know what to do, and see them open a business,” he says. “You can’t even put it into words.”
Industry and trade associations
Imitation is the sincerest form of flattery, plus it’s a really smart idea. When Stacy Francis, a New York financial planner, started her own practice in 2002, she turned to the local chapter of the Financial Planning Association to connect with seasoned professionals in the field. At one of the committee meetings, she met her mentor, Nick D’Ambrosio , who was already years into running a similar fee-only financial-planning firm. “He really had the ideal firm that I wanted to build,” says Francis, who met with D’Ambrosio numerous times for advice. “It was really wonderful, because I was able to understand how to get from Point A to Point Z. I was able to leapfrog a lot of the mistakes that new business owners make.”
For instance, she asked D’Ambrosio for help on what fees to charge her new customers. Figuring out prices is tricky for business owners. Many are so desperate for clients that they’ll offer too deep a discount. “I learned I would be doing a disservice to my clients if I didn’t charge appropriately, because I’d go out of business,” she says.
Business groups, alumni networks and nonprofits
A professional association where members meet for networking and support, whether it’s the National Association of the Self-Employed, the National Association of Women Business Owners or the Hispanic Chamber of Commerce, is an excellent place to find a mentor. Your alma mater may prove useful, especially if you attended a business school that pushes alumni connections. Some nonprofits have sprung up to help entrepreneurs.
Elissa Bloom, an accessories designer in New York, found her mentor, Meryl Waitz, through a volunteer mentoring organization called Women As Mentors. For the past year and a half, the two have spoken weekly and meet once a month, usually at a Starbucks at the end of the business day. Bloom, who started her business five years ago, will talk about the goals she’s set while Waitz, who has run a home-products and jewelry-design business for close to 15 years, will offer feedback and advice. “She’s very good at playing devil’s advocate,” Bloom explains. “It’s very easy to get caught up when you’re by yourself in a small business. It’s nice to have the voice of reason.”
Written by Nagel on February 13th, 2007 with no comments.
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I have never liked Comcast. In the past I have used their cable television services and i always thought their customer service was pitiful. This matters little to Comcast because in many areas they have a monopoly on services like that and high speed internet.
Once my wife and I move a couple months ago I searched and searched for internet services. I wanted to retain our Yahoo internet services because it was inexpensive and I never had problems with it. Well, where I moved Comcast has a virtual monopoly on internet services and Yahoo has not reached our area yet. Unfortunately I had to sign up for Comcast high speed internet. I made sure that it was a month-to-month agreement and when I signed up there was an introductory rate for
the service, but after it ends the bill rises by 2/3. When I had Yahoo internet services my bill was from $15-$23 a month and it was a good service and the customer service department was good. There was never a hook up fee and my internet moved along much faster than it does with Comcast even though I pay almost twice as much and soon much more.
Since day one Comcast high speed internet has been a problem. They came out to hook up the service, but the technician could not get a regular hook up so the wire is in our utility closet in our basement. therefore, I had to purchase a wireless router and other equipment so I could access the internet two stories up where our computer is. Then the first bill I received stated that I was past due. I was in a somewhat panic so I called Comcast and straightened the problem out. Fortunately I did get the $49.99 hook up charge waived, but otherwise their customer service has not been very helpful.
Hopefully in the next several months I can find an alternative for my internet services otherwise my bill will be about $50 a month.
Written by Nagel on February 12th, 2007 with 1 comment.
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New York Stock Exchange (NYX) tumbled on Friday after Goldman Sachs cut the exchange’s rating to neutral from buy, saying volume growthwould not meet previous expectations on its new hybrid trading system. NYX recently let go thousands of employees because of their new automated system would handle those jobs now. Shares were down $4.92, or 5.1%, to $92.32.
Jim Cramer made a compelling case for this stock about 5 weeks ago and I jumped on NYX along with Goldman Sachs–little did I know that GS’s downgrade of NYX would spell its future doom. I bought into the idea that Cramer gave with automation, layoffs and the case study of the Chicago Mercantile Exchange’s soaring price after going public. Fortunately I put a lower-than-usual amount into the New York Stock Exchange stock. I still have faith in the stock and if it goes down a little more, but still shows positive signs I will invest some more into it.
Friday came as a big shock as I watched the stock steadily go down all day. I was disappointed, but I do not think it is time to panic.
Bloggingstocks covers a lot of large cap companies and more . . .
Written by Nagel on February 11th, 2007 with no comments.
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The kitchen cabinets are installed, but the kitchen is still far from finished. Countertops are still needed for the bottom cabinetry plus the floors still need sanding. The countertops were measured and ordered on Tuesday and it can take from 1-4 weeks to arrive. The floors will be sanded next Wednesday-Friday and they will also install some wood flooring in a small area near the front door. We plan on being out of the house on for all the sanding and varnishing. Since it is my wife’s birthday that weekend we plan a trip so we would not have to deal with the vapors, and celebrate her birthday at the same time.
It is exciting to see the kitchen cabinets complete. They look great and once everything and the kitchen sink (literally) is complete it will look great while bring much more value to our home if we ever decide to sell.
Written by Nagel on February 10th, 2007 with no comments.
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This piece by Christian Zappone, CNNMoney.com staff writer, is an excellent primer as you get ready to do your taxes.
The IRS conducted 1.3 million audits last year, up more than 5 percent from the year before.
And now, President Bush’s recently released budget calls for a step-up in efforts to close the $300 billion “tax gap,” the difference between what is owed in taxes and what is collected.What’s more, there are some new rules on the books that could trip up tax filers.
Any way you look at it, more tax audits may be on the way. Here are five red flags the IRS is likely to watch out for this tax season.
Earning too much money
It’s a problem most people would probably love to have, but high earners should be aware that they’re more likely to end up on the IRS’s radar, according to David Sands of Buchbinder, Tunick and Co.
Sands says once an income tops $100,000, the chances start increasing.
The emphasis on flagging high-net-worth filers makes financial sense from the IRS’s perspective.
“The IRS is under pressure to close the tax gap,” said Bill Stromsem of the American Institute for Certified Public Accountants. “It doesn’t pay to find a $100 error in a filer in the 10 percent category instead of $1,000 from someone in 30 percent tax bracket.”
In 2006 the IRS audited the returns of 17,015 tax filers reporting income of $1 million or more. That’s up 33 percent from the 12,835 audits of million-dollar earners it conducted in fiscal year 2005.
The IRS’s audits of taxpayers with reported incomes above $100,000 rose 18 percent in 2006 from the previous year, to more than 257,000 returns.
The IRS declined to comment on the specifics of audit red flags.
Giving too much to charity
Excessive contributions to charity could trigger an audit, too.
Sands estimates that once contributions exceed 5 percent or 10 percent of income, that may raise questions.
Complicating matters is that this year the rules related to deductions for charitable giving have gotten stricter, with the IRS demanding more documentation. Sands says there is a feeling there has been “some abuse in this area” in recent years.
Taxpayers will have to keep a qualified appraisal of donated clothing and household items that exceed $500.
They must have a receipt or bank record that shows the name of recipients of financial donations. For most taxpayers this change only applies to contributions made after the start of 2007.
Finally, IRA holders older than 70-1/2 years can directly transfer up to $100,000 tax-free to any charity, but the funds must be given directly by the IRA trustee to the charity.
Knowing when the alternative minimum tax applies to you
Taxpayers can be subject to the alternative minimum tax and not know it. Failing to submit an AMT schedule when you are in a high-risk group may grab the IRS’s attention.
Some people aren’t attaching an AMT schedule and are subject to it, according to Sands. Those that fit the AMT profile: High earners in high-tax states.
Sands puts the threshold for a filer entering the AMT category at about $100,000-$120,000.
Stephen Buschel, tax partner at BDO Seidman, calls the AMT “an insidious tax because you never know when it’s going to hit.”
The AMT aims to collect taxes that are lost when filers use so many deductions they pay no taxes at all. This is because while the tax was invented in 1969 to prevent wealthy filers from avoiding taxes through extensive deductions, it has never been adjusted for inflation, and so it captures ever more filers lower down on the scale.
When a return is filed, the IRS will do the calculation to see if it qualifies, said Buschel.
Taking too many credits
Tax credits are another area of concern, especially for people at the lower end of the income scale. The biggest mistakes are made with earned income credits, according to Sands, who cites a general confusion about credits for education, seniors and earned income.
“I can understand why it’s very confusing,” said Sands, pointing out that people often take credits they’re not entitled to.
He suggests that lower-income filers use the IRS’s walk-in services. A Volunteer Income Tax Assistance Program has been set up to help low- to moderate-income filers who cannot prepare their own returns.
There is also the Tax Counseling for the Elderly Program, which offers help to filers 60 years of age and older.
Careless errors
Things as simple as a sloppy return can derail an otherwise routine tax return. Matters as small as incorrect Social Security numbers, math errors or simple misspellings can bring a tax return to the attention of the IRS.
“There’s no excuse for that. Just show a little care and get your material together,” Stromsem remarked.
He also pointed out that banks and brokerage houses send in reports of your 1099, which the IRS will compare. “If you forget a 1099, it will cause the IRS to pull it out of the pile.”
The best way to lower your odds further is by following the advice of IRS spokesman Robert Marvin: “Taxpayers should take deductions and credits that they are legitimately entitled to and that make economic sense,” Marvin said. “They also should keep accurate books and records.”
For filers who do that, not even an audit should scare them.
Written by Nagel on February 9th, 2007 with no comments.
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I am not a strict Chartist, but I do use some information from charts to make buy and sell decisions on stocks. Information like the trading volume, 200 and 50-day moving averages, all-time stock price peak are important to me in understanding stock charts importance. The aspects are some information I look for in charts of stocks. I combine this stock chart information with fundamental stock analysis. Here I will look at earnings,forward p/e ratio, return on equity and many others. I think this is a healthy combination of both quantitative and qualitative stock analysis and it has done well for me in my stock picks.
Here is an IBD example of a chart analysis for the Indian stock Infosys (INFY).
Written by Nagel on February 8th, 2007 with no comments.
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I am a bit of a civics geek. I enjoy the political process so I have been going to some village meeting to get the scoop on my new community I live in. Saturday, it was about 3 degrees, but I still walked over to the Village meeting–it is only a five minute walk. I thought it was more of an informal meeting so I did not arrive at the starting time. They were in the middle of a Powerpoint presentation detailing the changes they will be making to the central business district. These future changes will help bring in more businesses and help keep our train station in the place that it is. These factors alone will dramatically help our property value. We are already 5 minutes from the train and central business district (well, it is a small town central business district). Because we are some of the closes houses to this area, and this area will become a more popular area we will gain from this significantly. Currently, there are only a few businesses down there but there are plans for a grocery store and other conveniences so when we go to the train in the morning or when we return from work at night we can easily get some chores done and not have to drive 10-15 minutes somewhere to do it.
I also spoke to a Trustee of the Village about some issues that affect my wife and me. This was very rewarding because I received direct answers on what is currently being done to address my concerns. In the past I have written to Congressmen and women only to receive general answers. I am even more satisfied with our choice of towns because it looks as if we are getting in on the ground floor of something really good for the community. And within the next several years many of these projects should be finished while others are in progress.
Written by Nagel on February 7th, 2007 with no comments.
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