May 2, 2008
It's no surprise that people are becoming more careful with their money. Research shows that folks are more interested in what people like Clark have to say. He's like a firefighter and the economic house is on fire -- they want him to put it out.
The San Francisco Chronicle recently ran a chart that detailed what's "in" and what's "out" when it come to your finances. These are classic examples and you may already be doing many of these. It's "in" to save, eat in, take a staycation, fix your old car, work past 65 (!), go to the library, drink tap water, take public transit and patch up your house. It's "out" to borrow, dine out, take an expensive foreign trip, buy a new car, retire early, go to the book store, drink bottled water, drive and remodel your home.
Clark recently read another story about a remodeling company that catered exclusively to wealthy clientele. This company is pink-slipping 25% of its workforce because even the rich folks are scaling back on remodeling. Likewise, the volume of laser eye surgery is declining because of cost. Maybe wearing glasses isn't so bad after allÉ
There's one area where Clark doesn't think you should cheap out. Waiters and waitresses are reporting that their tip income is down. The reason isn't only attributable to a decline in traffic. Rather, people are becoming stingy tippers. But you shouldn't take the tip income out of your server's pocket because you lived it up with fancy wine and lush desserts. Tip fairly based on service.
May 2, 2008
Are you afraid to open your own mail for fear of seeing your 401(k) statement? Clark recently spoke to one man who referred to his plan as a 301(j) because it keeps going the wrong way!
The Financial Times of London reports that every mutual fund company is seeing people pull money out with all the market volatility. American Funds saw a 7% decline in assets during the last 90 days, while Vanguard has seen a 4% decline.
Why is this happening? People fear a loss twice as much as they enjoy a gain. It's part of being human. We're backwards creatures; when stocks roar along, people pour money into them. So we're always paying too much on the way up and getting too little on the way down.
No one can time the market. Rather, it's time in the market that matters. Clark has 3 rules of thumb to help you maximize your money over the years. First, avoid paying commission fees. Buy only no-load funds. Second, beware of 12b-1 fees. These are phony charges that won't be disclosed unless you read through the prospectus. They are a made-up fee designed to take money out of your pocket. Finally, make sure your management fees don't exceed 1% or more. Avoid those 3 gotchas and you'll have more money over time.
Just don't try to figure out when to sell and when to buy. Keep buying every month through your 401(k) or other retirement plan. Time in is more important than timing. People are always asking Clark, "Is it time yet to get back in the market?" His standard reply is, "I never got out."
April 21, 2008
Members of Generation X don't think they'll ever be able to stop working, according to a survey from the BetterInvesting organization. Most adults age 27-42 have saved minimally at best for their retirement. In fact, 40% have saved almost nothing at all!
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April 14, 2008
401(k) plans are in reverse right now. No, Clark's not talking about that massive decline in your quarterly statement. That's simply the give and take of stock investments. Hopefully you're continuing to contribute to your plan. That will soften the blow by allowing you to buy more shares at a lower price.
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April 14, 2008
Every other year, the Federal Reserve tests high school and college students on their basic knowledge about money. The most recent test results reveal that the average high-school student got a 48, out of a possible 100, on the test. The average college kid only got a 62.
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