Many are against the proposed bailout plan for obvious reasons, but has anyone calculated the true cost of it? Let's do that here.
The proposed scenario is as follows:
It starts with the proposed $700 billion. Imagine it being spent immediately due to the purchase of toxic mortgages which is the downfall of economy at present. Its latest victim being WAMU, the worst bank failure in all of U.S. history, so far.
The actual "cost" of this $700 billion to us taxpayers?
At a mere 4.34% interest over the course of 30 years, the U.S. is looking at a cost of $30 billion in interest per year.
To simplify things and put it in even better terms, so to speak, $30 billion per year is approximately 1/5 of 1% of the U.S. gross domestic product.
Consider also the obvious: The repayment of this loan. It isn't just about interest. This very large sum of money needs to be paid back in a reasonable amount of time.
What is the worst thing that can happen? The U.S. spends $700 billion to purchase assets that are on a steady decline and even worse, it never gets any of the money back.
Then, it is left with absolutely nothing in return. (Not unlike many U.S. citizens who have purchased homes in the past five years.) Given this dire potential outcome, Uncle Sam would then have to hit up us taxpayers to pay off part of the principal every year for 30 years, until the loan is all redeemed.
What will the cost of that be to taxpayers each and every year?
The answer is $42 billion. $42 billion is the total of principal and interest.
Now that figure is 1/3 of 1% of the United States' annual gross domestic product.
So, there you have it. The cost of the bailout. It isn't $700 billion. But then, again, that is if the worst thing happens. That is only if the U.S. doesn't get a single dime back. The truth of the matter is, though, that the U.S. Treasury will most likely get money back, if not all of it.
Best case scenario: Perhaps the United States Treasury will actually make some money on this deal.
Sunday, September 28, 2008
Friday, September 26, 2008
Purchasing Stocks in Current Market
Anybody out there thinking "Hmmm. Maybe I can finally afford to purchase some stocks that I couldn't previously afford?" That is what I have been thinking. There are some stocks out there now that are "affordable" to either first-time stock traders (for those who have never purchased a single stock) or those others who have been in the stock market for some time but had their eyes on certain stock quotes that were beyond reach of purchase. Until now.
While we are in the midst of financial economic downturn, it is also an environment of opportunity. Let's face it.
I have had my eye on some certain stocks for a couple of years actually; however, the cost of acquiring them was prohibitive. Regardless, they are "affordable" now, and I do plan to make some purchases with some money that I do not need and plan to hold them for years to come. While it is true that investing right now is ultra risky if it is with funds that you need or you require a speedy return on your investment, if you have some funds set aside that you will not need in the immediate future and can invest, now is just a good time to do it.
I hate to use the term "safe stocks" as there is no such thing; however, there are just some stocks that are very simply going to recover and begin to reflect steady growth once more after the market hits bottom. Think medication, food, drinks, and utilities. When have these items ever been negotiable - regardless of what kind of economy we are in? When you have re-evaluated your finances and daily, weekly, monthly, and annual expenses, what was left in your budget? What can you not live without? When you are struggling to make ends meet and trying to chew the fat from your budget, and you have trimmed your budget down to what you believe are the bare necessities, it is likely that others have done the same and have found that they cannot do without those items, either. Items such as toothpaste, toilet paper, detergents (dishes, laundry), personal hygiene products (you name it), cat litter, and pet food all come to mind. I am certain that you have thought of others as you read this. You could easily add to this list.
Outside of the above most obvious pieces of advice, consider the companies that have stood the test of time. Services such as overnight delivery of letters and packages (Christmas is right around the corner, by the way) are not just going to disappear. Especially with the foreclosure crisis that we are currently facing. Many mortgage companies and even prospective marketers of refinance options are using overnight delivery options for contact with delinquent borrowers and prospective refinance customers, respectively. Seems that these days, overnight letters used by mortgage companies trying to get new accounts (refinance) is the way to go. I receive one of those sales letters about once a month. Sending an overnight letter to someone makes the issue look that much more important and even pressing. People who are in commission-based businesses - especially those who have remained in mortgages - know how competitive it is right now. It's a great sales technique, let's face it!
So, you still want to play the stock market, and you are still insistent on purchasing some of those more popular and typically more expensive stocks, but you've no idea where to begin. Begin with your own budget. What are you still purchasing these days? Make your list. Then get busy and start doing some research on the cost of those stocks.
You don't need to be a stock expert right now. Your best stock advice can come out of your own budget. All you need to be is a consumer, and that you are.
While we are in the midst of financial economic downturn, it is also an environment of opportunity. Let's face it.
I have had my eye on some certain stocks for a couple of years actually; however, the cost of acquiring them was prohibitive. Regardless, they are "affordable" now, and I do plan to make some purchases with some money that I do not need and plan to hold them for years to come. While it is true that investing right now is ultra risky if it is with funds that you need or you require a speedy return on your investment, if you have some funds set aside that you will not need in the immediate future and can invest, now is just a good time to do it.
I hate to use the term "safe stocks" as there is no such thing; however, there are just some stocks that are very simply going to recover and begin to reflect steady growth once more after the market hits bottom. Think medication, food, drinks, and utilities. When have these items ever been negotiable - regardless of what kind of economy we are in? When you have re-evaluated your finances and daily, weekly, monthly, and annual expenses, what was left in your budget? What can you not live without? When you are struggling to make ends meet and trying to chew the fat from your budget, and you have trimmed your budget down to what you believe are the bare necessities, it is likely that others have done the same and have found that they cannot do without those items, either. Items such as toothpaste, toilet paper, detergents (dishes, laundry), personal hygiene products (you name it), cat litter, and pet food all come to mind. I am certain that you have thought of others as you read this. You could easily add to this list.
Outside of the above most obvious pieces of advice, consider the companies that have stood the test of time. Services such as overnight delivery of letters and packages (Christmas is right around the corner, by the way) are not just going to disappear. Especially with the foreclosure crisis that we are currently facing. Many mortgage companies and even prospective marketers of refinance options are using overnight delivery options for contact with delinquent borrowers and prospective refinance customers, respectively. Seems that these days, overnight letters used by mortgage companies trying to get new accounts (refinance) is the way to go. I receive one of those sales letters about once a month. Sending an overnight letter to someone makes the issue look that much more important and even pressing. People who are in commission-based businesses - especially those who have remained in mortgages - know how competitive it is right now. It's a great sales technique, let's face it!
So, you still want to play the stock market, and you are still insistent on purchasing some of those more popular and typically more expensive stocks, but you've no idea where to begin. Begin with your own budget. What are you still purchasing these days? Make your list. Then get busy and start doing some research on the cost of those stocks.
You don't need to be a stock expert right now. Your best stock advice can come out of your own budget. All you need to be is a consumer, and that you are.
Friday, June 20, 2008
Stock Buying Tips in Economic Downturn
Wise Decisions in a Slowing Economy
If you are new to the stock market, you may be concerned about making wise investment choices. Nevermind that it appears that we are in a period of recession. You may be wondering if now is a good time to even attempt your hand at investing in stocks.
Never fear, it is possible to make right choices and to minimize your risk of loss during a tough economy. You may be thinking that in such tough economic times, stock values are sure to fall.
Here are some things to consider when making stock purchases in tough economic times:
First Consideration: Should you break open your piggy bank?
In a slowing economy (also known as a bear market), you really need to research the stock or stocks that is of interest to you. That is of utmost importance since overpaying for anything right now could jeopardize your portfolio.
Regardless, purchasing stocks is always somewhat of a risk, and no amount of caution or education is a guarantee for success. However, you can always try to make a purchase of some shares when a company that appears to have a promising future is offering stocks below tangible book value. Tangible book value takes into consideration what common shareholders can receive if the company fails and all of its assets are liquidated at their book values. It is a means of insurance, if you will, in the event that the company goes belly up. In tough economies such as the one we are currently experiencing, a company’s profits could decline or even become non-existent. If that should happen with a company that you have invested in, this can offer you some protection. There is also a chance that you can recover some or all of your investment through asset sales of the failed company.
Second Consideration: Variety really is the spice of life (or investing)
For as long as I can remember, we have all been told that we need to eat a variety of foods and have many colors on our plates in order to be healthy. This also applies to investing. So, taking what we already know, we simply need to remember to fill our investment plate (portfolio) with different industries. Don’t be afraid to check out investments abroad.
There is no way to know how long these tough economic times will last, and there is no way to predict the bottom with absolute certainty. So, to minimize your losses, remember what the nutritionists have been telling us for years. Fill your plate with variety.
Third Consideration: Stocks are tried and true
Stocks have, over the course of time, proven to be resilient and a good investment, but it takes time. If you have the money and the patience, your investment will eventually be rewarded, and investing in stocks can be a rewarding experience.
Fourth Consideration: More on resilience
When making stock purchase considerations, watch for companies who advertise because they will win consumers. During this tough economic time, consumers may not be spending money on “luxuries” such as cars, computers, electronics, etc., but they still need to spend their hard-earned money on necessities. Think food. Think utilities. Anything that falls into those two categories will outlast any recession.
So, pay attention when watching television, perusing newspaper ads, or listening to the radio. If you notice more advertising by a certain company (increased TV ads, i.e., Sweetbay Supermarkets, Walmart, Target), you may want to consider stock purchase, if available to the public because these companies will fare better than those companies who cut back advertising or did not increase their campaigns.
Fifth Consideration: Do your homework
Pay attention to what you hear on the news when stock reports are being issued. If a stock’s value is repeatedly reporting losses or on the decline, it would most definitely be a risky venture to buy any number of those stocks during an economic slowdown.
If you are new to the stock market, you may be concerned about making wise investment choices. Nevermind that it appears that we are in a period of recession. You may be wondering if now is a good time to even attempt your hand at investing in stocks.
Never fear, it is possible to make right choices and to minimize your risk of loss during a tough economy. You may be thinking that in such tough economic times, stock values are sure to fall.
Here are some things to consider when making stock purchases in tough economic times:
First Consideration: Should you break open your piggy bank?
In a slowing economy (also known as a bear market), you really need to research the stock or stocks that is of interest to you. That is of utmost importance since overpaying for anything right now could jeopardize your portfolio.
Regardless, purchasing stocks is always somewhat of a risk, and no amount of caution or education is a guarantee for success. However, you can always try to make a purchase of some shares when a company that appears to have a promising future is offering stocks below tangible book value. Tangible book value takes into consideration what common shareholders can receive if the company fails and all of its assets are liquidated at their book values. It is a means of insurance, if you will, in the event that the company goes belly up. In tough economies such as the one we are currently experiencing, a company’s profits could decline or even become non-existent. If that should happen with a company that you have invested in, this can offer you some protection. There is also a chance that you can recover some or all of your investment through asset sales of the failed company.
Second Consideration: Variety really is the spice of life (or investing)
For as long as I can remember, we have all been told that we need to eat a variety of foods and have many colors on our plates in order to be healthy. This also applies to investing. So, taking what we already know, we simply need to remember to fill our investment plate (portfolio) with different industries. Don’t be afraid to check out investments abroad.
There is no way to know how long these tough economic times will last, and there is no way to predict the bottom with absolute certainty. So, to minimize your losses, remember what the nutritionists have been telling us for years. Fill your plate with variety.
Third Consideration: Stocks are tried and true
Stocks have, over the course of time, proven to be resilient and a good investment, but it takes time. If you have the money and the patience, your investment will eventually be rewarded, and investing in stocks can be a rewarding experience.
Fourth Consideration: More on resilience
When making stock purchase considerations, watch for companies who advertise because they will win consumers. During this tough economic time, consumers may not be spending money on “luxuries” such as cars, computers, electronics, etc., but they still need to spend their hard-earned money on necessities. Think food. Think utilities. Anything that falls into those two categories will outlast any recession.
So, pay attention when watching television, perusing newspaper ads, or listening to the radio. If you notice more advertising by a certain company (increased TV ads, i.e., Sweetbay Supermarkets, Walmart, Target), you may want to consider stock purchase, if available to the public because these companies will fare better than those companies who cut back advertising or did not increase their campaigns.
Fifth Consideration: Do your homework
Pay attention to what you hear on the news when stock reports are being issued. If a stock’s value is repeatedly reporting losses or on the decline, it would most definitely be a risky venture to buy any number of those stocks during an economic slowdown.
Sunday, February 24, 2008
What is a Cheap Stock Broker?
Hello folks. Thought I would start this blog off with a question. What is a Cheap Stock Broker?
I don't know about you but I can't hardly go one day without seeing an ad on television for online stock brokers claiming to have the best price and service available for investors. Lately I have been seeing a lot of Scottrade, E*Trade, and TDAmeritrade ads and they all claim to be a cheap stock broker.
Well I am here to let you know that while these brokers are all priced below $10 a trade (provided you meet their minimum requirements), they are by no means a cheap stock broker. These guys all have huge advertising budgets, a large staff of brokers, and some even have local branch offices. As far as I am concerned, all these services only mean one thing to me, more expenses for the company. And when there are more expenses, usually there is a more expensive product.
I have a feeling that if you are reading this, you are probably interested in only one thing, who are the cheap stock brokers? Therefore, you may not be so interested in who has the most branch offices or who has the most TV ads. Don't get me wrong, having the ability to go and sit with the a real life broker is a great thing but it does have its cost. Usually in the form of a higher commission.
If you are anything like me, I want to make a stock purchase with the smallest commission possible. A cheap stock broker, to me, is a company that charges $5 or less such as TradeKing. Preferrable less. Free would be even better, and what do you know, there are actually a few companies that offer free trades. Now that is what I call a cheap stock broker!
Next time I will introduce you to a few companies that are truly cheap stock brokers.
I don't know about you but I can't hardly go one day without seeing an ad on television for online stock brokers claiming to have the best price and service available for investors. Lately I have been seeing a lot of Scottrade, E*Trade, and TDAmeritrade ads and they all claim to be a cheap stock broker.
Well I am here to let you know that while these brokers are all priced below $10 a trade (provided you meet their minimum requirements), they are by no means a cheap stock broker. These guys all have huge advertising budgets, a large staff of brokers, and some even have local branch offices. As far as I am concerned, all these services only mean one thing to me, more expenses for the company. And when there are more expenses, usually there is a more expensive product.
I have a feeling that if you are reading this, you are probably interested in only one thing, who are the cheap stock brokers? Therefore, you may not be so interested in who has the most branch offices or who has the most TV ads. Don't get me wrong, having the ability to go and sit with the a real life broker is a great thing but it does have its cost. Usually in the form of a higher commission.
If you are anything like me, I want to make a stock purchase with the smallest commission possible. A cheap stock broker, to me, is a company that charges $5 or less such as TradeKing. Preferrable less. Free would be even better, and what do you know, there are actually a few companies that offer free trades. Now that is what I call a cheap stock broker!
Next time I will introduce you to a few companies that are truly cheap stock brokers.
Sunday, February 17, 2008
Low Cost Brokers
Welcome to Low Cost Brokers. Here you will find detailed information about online stock brokers, in addition to an extensive stock broker comparison. Online stock trading has become very affordable lately with the advent of the internet and increased competition. Now is a great time to be in the stock market and what's better than a quality cheap stock broker like TradeKing
? The less fees involved with your transaction the more money you will make. Happy investing!
If you have any questions about Low Cost Brokers, feel free to contact me at mailto:crhwebsites@gmail.com
If you have any questions about Low Cost Brokers, feel free to contact me at mailto:crhwebsites@gmail.com
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Looking For A Small Business Growth Opportunity?
As seen in Fortune and Inc. Magazines
I did an online search to see what is available to those wanting to start their own lawn paint business, and frankly, I was disappointed at the lack of resources. To be even more frank, I was surprised by advertisers who seem to be offering a lawn painting business in a box, for lack of a better term, and at a huge upfront investment to the entrepreneur. It is not wise to put so much money out up front at the beginning of any business.
In my ebook, you will learn:
- How to formulate a business plan and how to reach your personal/professional goals;
- What equipment you need, where to get the equipment, and how to use the equipment;
- How to market your grass paint business, to include building a website, online marketing, search engine optimization, "on foot" marketing, how / where to purchase marketing materials, and who your likely customers are;
- How to prepare estimates, where to get your information from, and how to deal with your customers (recommendations for payments, billing, etc.);
- Common pitfalls and mistakes to avoid;
- List of best resources with hyperlinks included so that you can click on the resource and be immediately directed to the recommended vendor, website building company, etc.
- And much, much more!
