Money and Financial Business

I’m still going back and forth between Wesabe and Geezeo. I’m curious to see what Mint has up its sleeves. For the time being, the sites don’t offer exactly what I want. Since I don’t have the time or skills to code my own perfect PF site, I figured I’d write out what the site would be like…

1. Sign In – would auto save my name, securely, on my computer.

2. Accounts – site would automatically update all of my accounts, including checking, savings, CD’s, and mutual fund accounts.

3. Graphs: Home Page would display relevant graphs/charts regarding my monthly spending versus income. Detailed graphs would be available to customize. For instance, I could place a graph on my homepage that would chart my monthly gas spending.

4. Tagging: each item would auto tag accurately as close as possible.

5. Tagging, part two: Retagging (or adding more tags) to items on a statement should be easy, and not require any additional drop down windows. Each item should include an entry text box where tags can be added. Each tag would autosave after a space is inserted. Double word tags would not require quotation marks. Tags would be separated by commas.

6. There would be a way to alter the date posted for income/spending since often I deposit my checks late or pay bills late. I still want to track these payments/income based on the month they should be posted for.

7. Graphics: Have little images for each basic tag.

8. Have separate tag/box to mark as “to be reimbursed” and a reminder to check that reimbursement has gone through

9. Optional income breakdown chart, for those of us who earn money from a variety of sources

10. Comparison on mutual fund income/losses versus other user’s investments.

11. Easy mobile access to my accounts.

12. Ability for all the accounts to “understand” each other. So if I transfer a certain amount of money from checking to an investment, it is not posted as spending for the month (it can be counted in separate investment category)

13. Budget tools: Ability to create charts w/ predetermined expenses, to know how much extra cash to spend/save per month is available.

14. Ability to pay bills directly through site, including cell phone bill and cable bill (I know this is a long shot, but It’d be nice)

15. Widgets and graphic saves that include graphs of above information that can be easily pasted in my blog.

Debt Hater has a good post today in which she discusses her habit of being "penny wise and pound foolish." But I think I'm just the opposite. It kills me to have to write a check for a hundred, two hundred or (gasp!) five hundred or more dollars, even for something I really, really want. I am never impulsive about pricey purchases like that. But, believe me, I can drop a couple hundred dollars five, ten, or twenty bucks at a time without even realizing it. How? My greatest financial weaknesses are Starbucks lattes, fast food, books, and small eBay purchases.

What's the common denominator? All those items fall into the category of "little treats." The "I'm working so much and sleeping so little so I deserve a little caffeine" treat. The "I'm not taking a vacation for the foreseeable future, so can't I at least buy a little reading escape" treat. The "I've been working my ass off and haven't had time to clean the kitchen or stock the fridge so how about another burger" treat. And on and on it goes.

Sometimes I wish I had a better, more interesting story to explain my debt and my general financial state. It would be so much more fun to say that I had fabulous vacations, bought a closet full of designer clothes, and sport a few multi-carat baubles and that's why I'm $32K in the hole. But no. I've had some great lattes over the years. But they sure weren't worth $32K.

Before he went to satellite, radio mega star Howard Stern would occasionally get into hot water in some US cities over the content of his show. This would be manifested by busy bodies in some towns starting a petition/protect outside the station re-broadcasting his show and occasionally threatening to boycott local sponsors of the show. Stern's usual answer to this (besides accusing these groups of racketeering) was to ask his listeners to support the local sponsors of the show (in their towns/regions) by giving them business and mentioning that they had heard about them from listening to the show.

Anyway, I also read yesterday how a major league blogger - John Chow acknowledges sponsors and thought it would be a good time to do the same.

So Thanks to;

Mama Mikes: who have a new promotion where all phone airtime ordered before 5 PM (Kenyan time) is topped up on the same day. Also, several phones can be topped up in one order, all for only $2.49

Business Post: A reminder that not all good writing is online; this monthly magazine offers a great collection of Kenyan business stories.

TED: Thanks for the invitation to TED Global Arusha. They have now begun to stream some of the most popular talks from the conference, starting off with George Ayittey, William Kamkwamba and Ngozi Okonjo-Iweala. These three talks were among the memorable. Ghanaian economist George Ayittey coined the race in African between the hippo and cheetah generation of leaders, while William Kamkwamba, a 19 year old Malawian embodies this as an inventor of a electricity producing windmill out of scrap metal. And former Nigerian Finance Minister Ngozi Okonjo-Iweala, famous for fighting corruption and restructuring her country's debt, who rightly put an end to the aid vs. trade debate by reminding us that both are needed. These should be up on Wednesday afternoon with a fourth from Euvin Naidoo - President of the South African Chamber of Commerce, America on strengthening meaningful corporate ties across the Atlantic.

Readers i.e. you, but especially commenters. No one has a monopoly on information, and I learn so much from comments on investments, and perspectives from readers. I’ve said it before, but anonymous comments are given less weight, no matte how insightful they are – so try and register/come up with a name e.g. bankelele to leave comments and so we can interact better.

Networking
- Linked In: I have not responded to some invites from people on Linked In. I apologize for not following up as I am not keen on that networking aspect – yet
- Pajama Nation - micro jobs and freelance work site.
- piloting request: any ideas where a Kenyan 'A' student with a passion for flying can obtain piloting scholarship?

All on July 31

election 2007 registration closed. If Oprah (no comparison) can endorse a candidate (Obama), then so can I - I support and will be voting for Jonathan Mueke who will be going up in a real David vs. Goliath battle in Westlands constituency. Good luck in party elections which can be more significant than the real election. Best wishes - Bwana J

Kenya Re IPO closed

Uchumi shareholder loan deadline passed. What's the future like for shareholders? Delta Airline (US) is a far different company in another country (different laws), but which emerged from a similar reorganization to chart a new direction. For Delta shareholders;
- The company will issue new shares to claim holders (previous debt holders) as part of its reorganization.
- Other claims remain in dispute.
- Previous shares were canceled and holders of those shares received nothing in the reorganization.

Here is the long-awaited continuation of the Financial Peace University overview series. As I was reviewing the course, the last half of the sessions were jam packed with useful information so I will be breaking them down into several posts.

This lessons will cover FPU lesson #6 entitled “Understanding Insurance.” Since insurance can be so convoluted and confusing it’s important to know what to look for. There are some highly actionable nuggets of information here so be prepared to pull out your insurance policies and see how you match up.

The types of insurance Dave covers are:

• Home owners/renters
• Auto
• Health
• Disability
• Long-term care
• Life

Auto and homeowners insurance

Saving money on car and homeowners insurance

Here are the main ways Dave Ramsey recommends saving money:

• Increase your deductible
  It seems to be pretty common knowledge that one of the best ways to decrease your insurance premiums is to raise your deductable. You really should only consider doing this if you have an emergency fund. Your emergency fund should allow you to pay the increased deductible.

  To determine how much to raise your deductible do a simple break even analysis. Take the amount the deductible will change and divide it by the amount that the premium decreases (you will need to call the insurance company to find this out). For example, if by increasing the deductible from $500 to $1,000 (a change of $500) your monthly premium goes down $25, divide $500 (the change in the deductible) by $25/mo (the change in the premium). This shows how many months it would take for you to compensate for the increase in deductible using the savings from the premium. Here is the calculation for this example (note: if you pay a quarterly or yearly premium, the result will be the number of quarters or years).

  $500/$25 = 20 months (1 yr, 8 mo.)

  In this example if you go for 20 months without an incident that would put you above you’re deductible and you would save money. You have to feel this out and determine what you’re comfortable with. In this example, there’s a pretty good chance you won’t have a major accident every 20 months so you’re probably better off raising your deductible.

• If you have an older car and have money to replace your car in case of an accident (emergency fund), you may want to drop collision coverage

Auto Liability Insurance

Ramsey recommends having 500,000 in liability insurance. When reading your insurance policy (e.g. 100,000/300,000) the first number is your liability coverage. LOOK UP OUR POLICY

Only use “Replacement cost” homeowners insurance

I thought this was one of the most useful tips and one which we don’t currently follow (I better find another insurance provider). Replacement cost insurance pays you what it would cost to replace your lost or damaged property rather than just paying you what it cost you to buy them originally. There’s a huge difference, particularly when it comes to your house. If you paid $100,000 for a home and it has appreciated to $200,000 and it burns down, the insurance company will only pay you $100,000 if you don’t have replacement cost insurance. Replacement cost would pay you the full $200,000. I can’t say from personal experience, but from what I hear, replacement cost is harder to find. Insurance companies these days don’t want to offer it because they have to pay out more.

If you have over 200k in assets, get an umbrella policy

Ramsy recommends an umbrella policy if you have over $200K in assets. An umbrella policy is essentially another level of liability insurance within your auto and homeowners coverage. Umbrella policies cover accidents that happen on your property (e.g. if someone slips on driveway) and can protect you against someone going after your assets. I personally don’t carry any right now but am probably at a point I should start considering it.

Health Insurance

How to save money on health insurance

Ramsey had three main recommendations for saving money on health insurance.

• Raise your deductibles - Again, this seems like standard, solid advice if you have an adequate emergency fund to cover you.
• Increase your co-pay - I loved this piece of advice and wasn’t previously aware you could raise your co-pay. In fact, reviewing this series reminds me that I need to do this. I imagine you would still want to do some sort of break even analysis similar to the one above for raising auto insurance deductibles. If your premiums don’t go down very much as a result of increasing your co-pay, you may not want to do it. I imagine if you have several kids and make frequent trips to the doctor, this also may not be such a great deal.
• Increase your “stop-loss” - This was also a tip I wasn’t aware of. The stop-loss is the total amount you can pay out-of-pocket before the insurance covers everything else. It “stops” your total “loss.” For example, if your stop-loss is $3,000 you would only have to pay that amount out-of-pocket (including deductibles, co-pays, etc). Once you’ve paid $3,000 out-of-pocket, the insurance company would cover everything else. Ramsey didn’t give any specific recommendations for how much to increase a stop-loss. I’ll have to research this a little more and post more details. If anybody has recommendations, please leave them in the comments.

MSA - Medical Savings Account (now called a Health Savings Account or HSA)

The next generation MSA is called an HSA (Health Savings Account). Emily and I are currently looking into starting one and are very excited about it. Here’s why. An HSA essentially allows you to save funds to pay your deductible amount tax-free. The money your save in an HSA is contributed pre-tax and grows tax free. You’re not even taxed when you use it. The reason this is so great is that it allows you to increase your deductible significantly which lowers your premium significantly. You can take the amount you’re saving on lower premiums and start putting it into the HSA.

This is honestly a topic I currently don’t know much about but as I learn more I will certainly pass the information along. In the meantime for more information on HSAs, check out the Wikipedia entry on HSAs

Disability insurance

Disability insurance replaces a percentage of your income (typically 50-75%, averaging 60%) in the event you become disabled and are unable to do your job. Disability insurance is one of the most under-insured areas. According to Ramsey If you’re 32 years old you’re twelve times more likely to become disabled by 65 than to die. Dave recommends “own occ” disability which stands for “Own Occupation.” “Own occ” means that you’re covered if you become disabled and are no longer able to do your job vs. covering only specific injuries. For example, if you’re a computer programmer and lose use of a hand, you are unable to complete you’re current job. Disability insurance would then kick in and cover you for the pre-defined time period. By the time coverage ends you’d have to have recovered from the injury or find employment that doesn’t require both hands.

Dave recommends getting long-term disability which should cover you for roughly 5 years. Dave also recommends a long “elimination period” because it’s cheaper. The elimination period is the time period it takes for the disability insurance to kick in from the date of proof of your disability. You should be able to cover your expenses in the meantime with your emergency fund. The elimination period is like a deductible in ways because the longer (higher) it is, the lower your premiums.

Emily and I didn’t have a disability policy until recently when my employer started offering a group plan. It was so darn expensive getting it independantly. Typically group disability policies are a great deal at about 1/4 the cost of individual policies. If your employer offers group disability GET IT. There’s really no need to shop around because the group policy will always be way cheaper.

Long term care insurance

Long term care insurance is typcially for elderly individuals and covers the expenses of nursing homes and other forms of long-term care. Ramsey recommends having a long term care policy if you’re 60 years or older and don’t have over $1 million in retirement investments.

He also mentions that care for parents is one of the largest expenses for adults. Statistically 60% of people over 65 eventually have some form of long term care - 20% will need 5 years or more of long-term care. Dave recommends addressing this issue with your parents to make sure they have a policy. I think it’s great advise but may be an awkward conversation to have. Emily and I have only brought up the topic casually one time with one of our parents. I need to get the guts up to really address the issue with them as both my parents are approaching 65.

Life insurance

There are two basic types of life insurance: term and cash-value (including whole life, universal life and variable universal life). Ramsey compares term life to renting and cash life to buying. In other words, with term you pay for coverage but no cash value is accumulated. With cash-value the money you pay (or a portion of it) goes into an account that accumulates and that you can use later according to very specific rules.

Get term life insurance and invest the difference

The standard advice about life insurance from most financial planners is to get term life insurance and invest the difference. While cash-value sounds more attractive, it’s much more expensive. And while cash-value policies can act like a savings account of sorts with money accumulating accumulating in them, you earn a very small return on those funds and are extremely restricted as to how and when you can use them. By getting term life insurance and investing the difference between what you would pay for cash-value, you end up paying less for the coverage you need while having full control over the money you’re investing from the savings.

Life insurance isn’t always necessary

One of the more interesting points Dave brings up is that, contrary to common perceptions, life insurance isn’t always a necessity. The idea of life insurance is to cover your funeral expenses and replace the “economic value” of the deceased person for those left behind. If you have savings adequate to meet those objectives, you don’t need life insurance. For familys that have a solid saving and investing plan, the need for life insurance decreases over time as their savings grows.

Don’t overlook life insurance for a stay-at-home spouse and children

Because the idea of life insurance is to replace the economic value of the deceased, stay-at-home spouses should be covered. Even if a stay-at-home mom doesn’t provide any income, she certainly provides economic value. To replace what she does would have a real cost in the form of day care, nannys, and even the cost of meal preparation and cleaning.

For children, you mainly need to cover the funeral expenses.

How much life insurance should I get?

Standard advice for the amount of coverage to buy is ten times your income. If you make $50,000 then you should get a $500,000 policy. Of course, you’ll have to make an estimation for family members that don’t produce an income.

What to avoid

Dave mentions a few more tips.

• Don’t get policies that cover college for kids.
• Smokers typcially pay double or more for life insurance.
• Avoid “credit” life and disability insurance that pays off the loan if you die. It’s 90-200x more expensive.
• Don’t buy credit card protection.
• Don’t buy cancer insurance. Your major medical should cover cancer.
• Don’t buy accidental death insurance.
• Don’t buy prepaid burial policies.
• Don’t do mortgage life insurance (decreasing term).
• Don’t get duplicate policies from more than one company. This causes disputes as to which company is responsible and may prevent you from getting your benefits at all.

Conclusion

This post is filled with actionable advice. Take some time today to check your policies and see if there are any ways to save money or optimize your coverage. Reviewing this lesson has caused me to identify several changes that I need to make.

Stay tuned for more FPU overviews.

I have dreaded this day for the past week, realizing that today would be the day all my crazy spending will really strike home.

Although certainly the month had circumstances that are abnormal, ie. moving into a new apartment and having to buy a new computer, it nevertheless is just an excuse for the spending, rather than a financially responsible situation.

Compared to last month's networth update, I have made a 0.12% decline, decreasing my networth by $1,200. $500 still continues to be tied up in my student loans, as my new lender has not received the refund from my old lender for paying too much yet (and I may have lost this $500 if it weren't for the fact that blogging made me remember).

My networth is -$21,251.37 or -2.13% of the way to my million dollar goal.

Zillow has announced the launch of GeekEstateBlog.Com. The new resource's sole focus is on the rapidly changing world of real estate technology. I'm happy to be a contributing blogger and look forward to being a part of the process. As industry blogging evolves, vertical destinations with a clearly defined niche will emerge as "go to" sites for certain topics. I think it's a natural transition...

[[This is a summary of the content on Mike's Corner. Visit our blog to read the entire article. All content copyright 2007, 360Podcast, LLC.]]

I've heard Ray Vinson on the radio advertising a $72,000 mortgage loan for only $299 a month. In some of Ray's commercials I've heard Bill O'Reilly endorse Ray's "No-Spin Mortgage". Ray goes on to brag about how he's "saved" people hundreds of dollars a month.

I went to Ray's web site to see if he had any details on this wonderful mortgage, but if he had any they were well hidden. I brought out my financial analysis tool, Excel, and calculated that a 30-year fixed rate loan at the terms stated would require that the interest APR would need to be about 2.88%.

I didn't think that interest rates were that low, and at www.bankrate.com found that a 30-year fixed rate mortgage with zero points is running somewhere around 6%, or twice that. Looking around a bit, I saw an ad by Quicken Loans offering $200,000 for $585 a month. While the amounts are different the ratio of loan amount to payment is similar to that for what Ray is touting.

So I clicked on the link in the ad, and was rewarded with an explanation for the wonderful rate. In the fine print for the ad:

Rate is variable and subject to change. After the initial fixed-rate period, the rate will adjust every 6 months. The initial, minimum payment on a 30-year $200,000, 5-year Adjustable Rate Loan and 80% LTV is $583, with 3.25 points due at closing. The minimum payment is based on a rate that is implied solely for the purpose of calculating the minimum payment which in this example is 3.5%. Interest will accrue at a rate of 6.50%. Paying only the minimum payment will result in deferred interest or negative amortization since you will not be paying all of the interest that is owed each month. The unpaid interest is added to principal. Interest can be deferred until the outstanding principal balance is 15% (10% in New York) higher than the original loan amount. If the maximum limit is reached during the first 5 years, the payment automatically converts to an interest only payment. In this example, the maximum limit will be reached in the 53rd month, which is when the loan amount reaches $172,500.00. At this point, the minimum payment will convert to an interest-only payment of $1,245.50. After 5 years, the interest only payment is $1,437.11. After 10 years, the principal and interest payment is $1852.37. The Annual Percentage Rate is 7.533%. Rates could change daily. Actual payments and rates may vary depending on individual client situation and current rates. Some restrictions may apply.

So let me summarize: You're not really "saving" money on this loan. While your cash flow for the first few months after taking out the loan is reduced, you're going deeper in debt as the interest you didn't pay gets added to the loan balance. And when you took out the loan, you immediately went further in debt by $6500 (3.25 points on $200K) plus probably $2K - $3K of closing costs. The example in the fine print is also erroneous or at best confusing. With negative amortization (paying less than the interest) the loan balance will not be $172,500 after 53 months, it will be over $238K. And in reality will probably be higher when the interest rate adjusts above 6.5%.

The devil will be sure to point out all that high-interest-rate credit card debt that was retired when the mortgage was taken out from Quicken. True, you're paying a lower rate on that debt. But you're also paying interest on the $6500 in points you added to the loan, and will be paying interest for another 30 years or so. Perhaps even when you think you'd like to be retired. And if you refinanced from a mortgage that had a lower rate, you're paying a higher interest rate on that amount as well.

Plus, someone who would be suckered in by this deal probably will forget about the forthcoming doubling to tripling of their mortgage payment, and run up the balances on the credit cards, again. When their mortgage payments balloon up, they'll really be in a pickle and this time could find themselves on the street when their house is foreclosed. Learn more about these loans from this Federal Reserve pamphlet or this one.

If you're contemplating such a loan -- don't do it!!! Look for an alternative. Eat Ramen noodles for awhile and pay down the credit cards directly. If it's too late and you already have one of these loans, stop making only the minimum payments. Stop using your credit card and pay them off as quickly as you can. After your credit cards are taken care of, put all the payments against your mortgage so that you finish paying it off sooner. Read more about Dave Ramsey's debt snowball.

If your monthly payments are less than the interest being charged by the mortgage company and the credit card companies, you're not "saving" money. You're getting deeper and deeper in debt.

Is Ray Vinson's mortgage like this? Can't say for sure since he won't tell us. But I sure know which way I'd be betting. I think Bill O'Reilly's "No-Spin Zone" is really "Only-Bill-Gets-to-Spin Zone" but that's off the topic. I'd be interested to hear from someone who's has a mortgage brokered by Ray, either from Vinson Mortgage or from American Equity Mortgage.

In any financial transaction, be sure to find the fine print and read it carefully. And this goes double if you're looking at a "No-Spin" mortgage from Ray Vinson.

This week we're talking about mergers and acquisitions in class. Talk about good timing!! For the Tuesday night group -- it now looks like the News/Dow Jones deal will go through. There was a lot of last minute horsetrading, but both boards have now approved the deal. The Wall Street Journal has a short video explaining the deal that I'm going to try to play in class Wednesday and Thursday. Here's a link. The WSJ coverage of the deal is pretty extensive. Here are some articles to check out for more info:

• Dow Jones Deal Gets Closer (31 July) (UQ Library Link)
• News Corp is Poised to Win Dow Jones (1 August)

The other deal I discussed in last night's class was Wesfarmer's proposed takeover of Coles. You can read more about that deal at the Sydney Morning Herald website.

A new Fed report on the potential systemic risks of hedge funds strikes a decidedly ominous tone - one that is also reflected in a recent book and an event in New York this week.

My first paycheck for my new job was direct-deposited into my checking account. After taxes, it looks like I make $1,588.19 twice a month. So that’s like $3200 per month, which is hopefully how much I should be making after taxes (last year I ended up owing like $500 in taxes because I guess I didn’t have enough $ taken out.)

That’s very exciting. Up until June I was making $2200 a month. So I’m basically making $1000 more a month. That seems wrong, though. I feel like taxes should take out more, since I was making $35k before and now I’m making $50k. Hmm.

So in July, with my $300 in freelance work, I took in about $1888. Plus I guess I can count the $450 in rent money I earned last month letting my friend crash at my apartment while she looked for a place of her own. So I ended up making just about as much as I would have at my old job this month...

That’s not too bad, being as I took two weeks off for the month. It’s still not great, as $1050 of that went to rent, and I certainly spent more than $800 this month on random odds and ends, car keys being lost, gas, and cocktails. The good news is that next month I might break even. I might even put some money into my savings account. I might even, by then, figure out how I should actually be investing my money, as opposed to watching my mutual fund account depleting.

Fage with strawberries (5 oz) x 10*
Nature's Own whole wheat bread
8 oz shredded "Mexican" cheese
8 oz uncured organic deli ham x 2
16 oz bottle organic lime juice
8 oz can Izzi
Endangered Species milk chocolate with coconut and macadamia bar

Total (w/ tax) $17.28

The Fage have 8/20 sell by date. I wish we would have bought more... we may go back tomorrow. They come out to be $o.49 each; they sell for over $2 at Greenlife.

trial...

HAIR

Preface: I pretty much only know about my own hair so that is what I am addressing when it comes to cheap and natural products. I have typical NDN hair - super thick with very fine strands and I keep it long all over.

There are two methods for cleaning my hair that are cheap and natural:

Baking soda scrub with vinegar or lemon rinse. Take about 1/4 cup baking soda in a small jar (leftover baby food jar to small jam jar is a good choice) and mix with equal part HOT water (it will cool off considerably). If you have dandruff or scalp issues, a drop of tea tree oil is beneficial and if you have dry hair or dry scalp two tsp honey or molasses mixed in works too. I actually use BOTH additions and prefer the molasses to the honey but mainly for financial reasons. Shake all of the combined ingredients together; wet your hair thoroughly - cannot stress wet head enough! - and then pour combined (nectar thick) mixture onto your SCALP and rub gently all over your scalp. For me, I focus a lot on the crown and borders, especially behind my ears. Smooth what you can through the rest of your hair but the stands are not too much of the focus. Rinse out well, the rinsing take more time than if you were using a traditional shampoo. After you are rinsed your hair may feel very dry and like straw - this is because the PH balance is very off. Now take about 1/4 cup of apple cider vinegar, red wine vinegar, white vinegar or lemon juice (basically, an acid) and mix with 24 to 32 oz warm water. Shake well and douse head thoroughly. I used to use a quart Mason jar for this but have since moved to an old Oyin honey wash bottle that allows me more control over getting the rinse onto my head. Use your hands to work it in and then rinse THOROUGHLY.

The most common question is "won't my hair stink of vinegar?!" Yes and no. When it is first rinsed, it will a bit, but once dried (either with blow dryer or by air) there is no smell of vinegar at all. Plus if you use product (and I recommend Oyin Handmade, you will smell of the product.

The second most common question is "how often will I need to wash?" and there's no quick answer. I have an oily scalp with dry hair, with this method I wash every fourth day and my hair always looks clean and well-cared for (not too dry or oily). When I use any of the shampoos, Suave to expensive organic brands from Whole Foods, I must wash every other day at the maximum.

This is a natural and cheap way to clean hair (like mine) because the ingredients are cheap and most likely you will be spending less on water and gas/electric due to shampooing less. The drawback, for me, is that each time I have to make everything up because none of it stores well. I have it down to about 4 minutes to get everything in their respective containers and I eye ball the water when I am in the shower.

The second method of cleansing is just using commercial conditioners. I have used this method a time or two but it leaves my hair too oily although my cousin (with the same type of hair) swears by it. Wet your hair all over, apply a small amount of conditioner and focus on washing the strands up through to your scalp. Rinse clean. I can't say much more because I didn't care for it, but it might work for any one of you reading.


SKIN

Skin care is my passion. Unfortunately, nothing I use is all that cheap. I use a combination of virgin coconut oil and shea butter for all over my body with a tiny bit of either on my face when it is very dry. I get my coconut oil from Tropical Traditions and my whipped shea butter from Oyin Handmade. I have also found that slathering wet legs or armpits with coconut oil is the best shave gel - I never get in-grown hairs or nicks plus it's the best way to get a really smooth shave.

But I recently discovered a fabulous mask via poppy__petal that helps plump skin and hydrate it as well. It's a yogurt-vitamin C mask. Take 1/2 cup plain REGULAR yogurt and mix with 4-5 crushed vitamin C aceloa tablets and 1 egg white. Whisk together and then use clean hands or a clean facial brush to paint face with mixture; leave on 15-20 minutes. Wash off with warm water, pat dry.

If you need to exfoliate, try a salt or sugar scrub. Mix 1/2 cup solid, but softened, oil (coconut or shea is good) with 1 cup kosher salt or grainy sugar (you can also add any essential oil that you like here) and then place in a cool area so that it will harden slightly (not the fridge or you will just have a block). Smooth on skin and rub into elbows, knees, heels... any place you like that needs a bit of a scrub. Rinse clean. For further softening, right before bed, take a glob of coconut oil (or vaseline or really any oil) and massage into feet; the put on a very THICK pair of socks. You can do the same with hands. The expensive sock and hand sets for this deep conditioning are a rip-off - old tube socks work great.

I hope these helps some of y'all out! I am working on more for home and the body so stay tuned for part two!

Here's a quick, easy-to-use tool to quickly search for high yielding CDs. For example, this spring you could have locked in 10% in a one-year, federally insured CD. The catch? Well, you needed to belong to the Dearborn Village Community Credit Union in Michigan and the rate was only good for the first $1,000 on deposit.

Still, if you want to find out if you can qualify for local deals, check out BankingMyWay.com. It's free. Just type in your ZIP code to look for deals. You can also search for internet deals, too.

For example, I found out I could get 7.00% on a $1,000, 12-month CD special that Patelco Credit Union is offering for new members. Not bad!

Thanks to Plonkee for hosting this week’s Carnival of Personal Finance. He adds a nice British flair to it with his Glastonbury Festival theme.

My contribution was When Less is More, a reminder about keeping in mind the purpose of money and why more isn’t necessarily better.

My picks for best posts from the carnival are:

• Money and Happiness at My Money and My Life. She writes about Jean Chatzky’s book You Don’t Have to Be Rich which talks about how, after a certain point, money doesn’t really make us that much happier.
• Lifestyle Inflation by Amy Fontinelle at savingadvice.com. It’s about how lifestyle inflation can easily sneak up on us. She has a few pointers on how to avoid it.
• Personal Rate of Return at The Financial Buff. He talks about the difference between Time Weighted Rate of Return and Dollar Weighted Rate of Return and how they should be used for different purposes.

Well, maybe not God, but rather the market. A disappointing day for both Tamerlane Ventures and Vena Resources after their fantastic run yesterday.

I'm not that suprised though with the outcome though and not that worried either. It just shows that some have a problem with seeing TAM go over 3.00 and some people decide to take their profits instead of waiting. VEM, well that's more of a mystery too me, but it got a tendency to jump all over the place. Canada isn't really known for it's lake of volatility...

News
The price target for Cameco is being cut by RBC(from 80->70CAD, still top pick) and UBS(from 66->61CAD, still buy). I've read that the average is 59.15 CAD(from 14 different price targets). The most negative one is Desjardins with $34 and the most positive toward Cameco is RBC with it's $70.

General Motors presents fantastic numbers for it's Q2, $2.48/share instead of the expected $1.13/share. A rather mild response by the market though, down -0.21 (-0.64%) at the end of the day.

Dow
13,211.99
-146.32
(-1.10%)
Nasdaq
2,546.27
-37.01
(-1.43%)
S&P 500
1,455.27
-18.64
(-1.26%)

It never even occurs to me to go back and read my own BLOG for good ideas!

Well, I was looking back at postings from March and I found one reminding myself that the girls have some US Government Bonds that are in their name that they can get tax benefit from if they utilize them for education.

In fact, this is exactly why my mother gave them.....for college!

Now that Kim is a senior, she needs to spend them this year on school.....or pay taxes on them when she ultimately cashes them in. I will have to talk to our accountant (Terry Strout) and ask him how we have to document their use as being for education. (Can we cash them in and just dump the money into checking and then write checks of an equal or greater amount for education expenses....and how do they define those anyways?)

So I guess I've learned something by reading my own BLOG.......if others come out with even a small bit of insight, I suppose I am doing something good. (at least I would like to hope so)

I have come across some great new Canadian bloggers this past little while. I find that PF blogs very generally can fit into two categories- those about paying off debt, and those about investing money. I hope to graduate one day from the first, into the second, as Krystal at Give Me Back My Five Bucks has done. So the new Canadian bloggers fit into one of these categories, and it is so nice to have this mix to balance the reading content each week.

1. Dude Where's My Money is the blog from a 22 year old student who is trying to pay off her $21,000 student loan debt before she graduates from school. So far she has paid off 42.8% of that, great progress!

2. Triaging My Way To Financial Success is a DIY investing ER RN who writes about Building an Investment Portfolio, ups and downs in the current market, and general thoughts on how to be an intelligent and well-researched investor.

3. Money Relations is the newest blog I have come across and she also writes about investing and building personal knowledge in the investment world. She is candid about some of her mistakes, and writes about how she is making investment decisions.

I am looking forward to some more informative Canadian reading!

In about three weeks, I'll be heading out for a two-week vacation.  If anyone is interested in submitting guest posts to be featured at Money and Values while I'm away, please let me know in comments or by e-mail.  Obviously I have a preference for money-and-values posts but you can really write about whatever you want!

Oprah is doing a show on having designer Nate Berkus renovate small apartments. I've seen this one before, but I can't help but watch it again. The first renovation was for a woman in a New York City apartment that's 250 square feet. The second one they've shown is his own place that he just purchased, 550 square feet.

I find a smaller space more comfortable from a financial point of view. I can live in a smaller space and stay more financially healthy. It has huge environmental benefits too, with less energy use.

As a real estate agent, I see many clients shy away from the condos that are smaller, have a small bedroom, etc. I have to say that while I really enjoy helping people find that perfect spot, I am amazed when they come to me with a limited budget and won't consider a smaller place that's still in a great location. Even someone who's single! It's o.k. if a first home is small, and there are lots of options for those places.

I think of real estate in terms of price per square foot. Less square feet means less price!

Had an interesting conversation with a finance-minded friend of mine this past weekend.

Like most Canadians, I have a natural distaste for Canadian banks. Don't get me wrong -- as an owner, I love them for the profit-making machines they are. But as a consumer and citizen, it doesn't take very many TV ads trying to trick yuppies into buying a house they can't afford, or conning Boomers by showing how happy the grandkids would be if they'd only take the plunge and finally get that palatial Muskoka cottage to bring my blood to a slow simmer.

Combine my natural aversion to them with the fact that online banking is so prevalent these days, and the result is what it is -- I don't think I've actually stepped up to a teller at a bank branch in a couple of years.

That might be costing me money, my friend informed me over a pint last weekend. "Go down and meet with a banker," he suggested, because they can actually do some good things for you. He said his decision to meet with a banker a few years ago was one of the best decisions he's ever made. Once he opened up about all his debts, all his assets, and discussed what his financial goals were -- everything from home ownership to estate planning, the banker formulated some semblance of a long-term plan, and actually helped it along somewhat by cutting out expenses and maximizing returns in places along the way.

He's now in the market for a house, and he says he's getting mortgage offers well below the posted rates and has fees waived for all sorts of services.

The idea, I think, is that if you grant someone access to every level of yoru financial life, they can occasionally surprise you by coming up with plans and options to make it all happen.

Given how bankers make their money (hint: rhymes with bees) I'm somewhat skeptical of his claims, but I must admit I'm intrigued. I'm curious -- for all we hear that bankers are just in it for the money, does anybody out there have any truly good stories to tell about how bankers have really helped them?

Some have noticed that recently, I have not been blogging. I have been very busy with other things. I will be back posting starting August 15th. Thanks.

No, Lance, there still is a housing bubble and most housing markets in bubble metro areas continue to decline.

In the unfortunate event that you get a divorce, worrying about your credit score may be the last thing on your mind. However, even during the most trying times of our lives, the world keeps spinning and the fact is, divorce can greatly impact your finances and credit history. If you are seeking or have finalized a divorce, it is time to assess what needs to be done to preserve or restore your financial reputation. Below, we will explain how divorce can affect your credit, as well as what you should do before and after your separation.

I had recently praised Capital One in their willingness to refinance my line of credit a few months ago. But everything nice I said about them is now null and void.

As I arrive home last night and sort through my mail, I notice I have received a nice little pamphlet from Capital One. As I pull it out of the envelope I see on the front: "important notice of a change in terms". No biggy. I've received plenty of mail from them letting me know that late payment fees and over-the-limit fees would be rising. Never bothered me because I've never been late or over my limit with them.

So I open it up and find out that they're jacking my interest rate up. Well more than jacking it up, they're more than doubling it. I currently have a 9.9% interest rate. When these changes go into effect after September 16, my rate will go to the Prime rate plus 11.65% which is currently equal to 19.9%!!!

I know they have the "right" to do this. But geez. I have never been late or over-the-limit with them. But that means they aren't making any money off of me.
Guess they took a gander at my credit report and probably saw some collections on there that haven't cleared yet or that my credit utilization was very, very high.

I have the option to decline these changes, but in doing so it will close my account. I really don't want to close my account because it will hurt my credit history. I've had a CapOne card for over 6 years now. The only older card I have, I got about 6 months before this one.

Luckily, my balance on this card is just over $900. I'm only accumulating about $9 in interest per month on this account.

Here's my plan:

1. Pay down as much as possible as quickly as possible
2. Consider a balance transfer after the interest rate goes up.
3. Write a letter to the address in the pamphlet to find out why my rates are going up
4. Write a nasty letter to someone in an exec position to let them know how ass-backwards they are with helping me on a personal loan and then raising my interest rates somewhere else.

I discovered this Podcast while surfing the Personal Finance BLOG world, and I listened to Podcast #7 about 1/2 way through and found it kind of interesting. I think I'll at least sample the other 6 shows and perhaps subscribe to it if I continue to like it.

It seems to be a fairly common and average person who discusses personal finance questions that most people will have, but don't feel comfortable talking about. She drags those topics right out and bares her soul.

As I said, I just scratched the surface with the small segment of show I heard....but I think I liked what I heard enough to suggest that you might want to give it a listen.

The web address is:
http://momsmoney.com/blog

The Evolving Relation between Earnings, Dividends, and Stock Repurchases

Skinner, Douglas J., (May 2006)

Abstract:

There have been fundamental changes in corporate dividend policy over the last several decades (Fama and French, 2001; DeAngelo, DeAngelo, and Skinner, 2000). To shed new light on the disappearance of dividends, this paper examines how the relation between earnings and corporate payout policy changes over the last 50 years. Since 1980, two groups of payers emerge: firms that both pay dividends and make repurchases and firms that only make repurchases. For firms that both pay dividends and make repurchases, managers increasingly coordinate dividend and repurchase decisions in a way that maps total payouts into earnings. Because managers use repurchases to pay out earnings increases, this helps to explain why dividend policy becomes increasingly conservative. The large majority of these firms have paid dividends for decades. Earnings do a good job of explaining payouts for firms that only make repurchases as well, suggesting that newer firms without a dividends history use repurchases in place of dividends. Overall, the evidence suggests that corporate earnings now drive total firm payouts - dividends and repurchases - and that repurchases play an increasingly important role, which helps to explain the disappearance of dividends.

Though gas prices have been dropping recently, it’s never a bad time to revisit our options when it comes to gas rebate cards. To that end, I’ve compiled a list of 22 cards that rebate at least 5% on gas. The list includes several cards that I have previously mentioned, as well as a number of new ones. Please check it out and let me know what you think.

Link

The internet has made communications so much better.....from person to person, and especially from customer to business.

The internet is a force multiplier.....it makes competition stronger because it allows people to have a lot longer "reach" out to even more suppliers.

The New England Oil website allows you to look up the prices charged by home fuel oil suppliers in New England. I have not used it, but if the numbers are at all current, it sounds like a great idea.

GasBuddy.com does the same thing for gasoline prices, and I have used that site a lot...and it works well.

But this depends on you and all the other users.....we all put the prices in....so if it isn't right we can all collectively look in the mirror for the reason.

United Therapeutics Corporation (UTHR)

The mark of an original thinker may be that you never know how they’re going to answer a question you’ve never heard them get asked.


That’s how NotMakingThisUp started a recap of the private equity discussion at this year’s Berkshire-Hathaway annual meeting, which came about when a shareholder asked Warren Buffett—The Oracle of Omaha—this simple question about the private equity mania then raging across the land:

“What could cause it to bust?”

The shareholder's question seemed entirely reasonable and timely, given the fact that we had as recently as February seen the classic “cover story” top-of-the-market headline from Fortune Magazine, about the Blackstone Group and its top Alpha Male, Steve Schwarzman:

Wall Street’s Man of the Moment

In the 1980s, Wall Street Power brokers wore red suspenders, dined at Le Cirque, and made their money in junk bonds and arbitrage. A decade later they wore polo shirts and played Foosball at the venture capital firms that line Silicon Valley's Sand Hill Road, reaping billions from tech. Today Wall Street's newest titans can be found every Monday morning gathered around a long, slightly scuffed conference table in a windowless boardroom high above Park Avenue, the home of the Blackstone Group.

Wearing white shirts and pinstriped suits that underscore their Harvard Business School credentials, Blackstone's top dealmakers have learned well the techniques pioneered by previous masters. What makes them different is that they also happen to dominate the iconic business of this decade - private equity.

The rest of the article was highly predictable, having appeared in various forms regarding various Masters of the Universe overseeing various Thousand Year Reichs including, but not limited to, Drexel Burnham, Enron and Tyco.

.

Indeed, anybody with more than ten minute’s experience on Wall Street, upon reading that article, should have experienced shivers of precognition that the end of the private equity mania was in sight, if not immediately overhead.

But not Warren Buffett. Here’s how we reported it:

As it turns out…Buffett doesn’t think the private equity mania is a bubble, despite, in my view, all the evidence to the contrary, what with everything from deeply cyclical semiconductor companies to fashion-dependent retailers being leveraged up with the kind of debt loads that would make Donald Trump nervous.

In fact, Buffett said the whole private equity thing “isn’t really a bubble.”

While he did bemoan the high prices the private equity wizards were willing to pay—making it harder for him to put Berkshire-Hathaway’s ample cash to work—he did not seem to think the mania was unsustainable, citing the fact that private equity investors lock in their investors for years as being a bulwark against some kind of dramatic end to the feeding frenzy.

“It takes many years for people to take their money out” of private equity funds. Thus Buffett makes the subtle distinction between a mania that might well end in disappointment for all concerned, and one likely to end in a crash.

.

Perhaps back then (this was early May) Buffett did not contemplate the hysterical buildup to the June 22 IPO of Blackstone Group—poster child of private equity’s self-proclaimed “golden era”—in which a private partnership whose income consists largely of one-time gains on asset sales would go public at a valuation approaching that of the highly diversified, recurring-revenue generating Lehman Brothers.

Or perhaps Buffett did not look more deeply into his argument that the bubble couldn’t “burst” simply because the buyers wouldn’t get margin calls, and ponder whether the bubble could burst because the buyers’ financiers would indeed get margin calls.

Or perhaps he was just being nice about it.

But he was wrong.

For now that the music has stopped, the investors who have committed their funds for “many years” are stuck; the banks who committed many billions of dollars for short-term bridge financing are stuck; and the poor shlubs who bought Blackstone Group on the IPO are probably wishing they’d never read Warren Buffett’s “all-clear” on private equity.

The private equity bubble has burst, and nobody knows how it will end. But one thing we can take to the bank: trust Warren Buffett to pick through the debris and find the values.



Jeff Matthews
I Am Not Making This Up

© 2007 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

We've just completed our monthly budget meeting and per previous requests posting it here online.

$1027. this month's budget will be allocated for the plumbing problem that occurred yesterday. We agreed to increase the grocery expenses by $60. We also added a transportation expense of $40. for our sons' football practice.

Please feel free to offer your comments and suggestions.

Click Here To Open Up In Another Window

I had posted last week about our July net worth updates, here's our budget for August (this one my wife put the numbers together and I just gave her current balances on things):

Income

200 On-call Computer Job (so far, we have $100 guaranteed, the rest is uncertain)
$1050 Rental Income (3 roommates)

$350 Possible Rental Income (new roommate)
$2698 Day Job
Total: $4298

Expenses

$430 Tithe
$1150 Mortgage - This went up this month due to taxes and homeowners insurance, will be our monthly payment for the next year
$240 Gas - This has gone down from $300, with me using a hatchback to get to work and back, we're saving gas and a second vehicle allows my wife to stay home instead of taking me to work when she needs the car
$145 Natural Gas
$140 House Phone - They came out and repaired our Internet, which cost us. I REALLY need to argue with them since it was their fault the modem got fried (not grounded outside).
$50 Water
$89 Electricity
$158 Cell Phone - Yes, I know, high.
$95 Life Insurance
$10 Small monthly debt payment
$30 Her Fun Money
$30 My Fun Money
$30 Dining Out
$30 Toiletries
$500 Home Maintenance - We need insulation everywhere, I'm going to do the parts I can this month and in September we'll have a professional do within the walls. In addition, I have some work to do around the chimney (convincing myself to go up there and do myself) as well as install some gutter guards so I don't have problems this fall with leaves.
$250 Car Maintenance - My car needs a radiator flush as well as a connector from the engine to the muffler pipe. I'll be doing the flush on my own, I'm going to see if I can get a friend to do the connector.
$1000 e-fund - We're down to $100 in it right now, so we're going to need to build it back up this month.

As you can see, this coming month there is not much attacking the debts, but if we don't take care of these problems now, they will cost us a whole lot more later on. The insulation seems more like a "want" than a "need" to most, but they haven't lived at our house for 2 winters. I don't want to lose any renters due to the cold, so we need to invest in the insulation.

One item I leave out (which maybe I should include) when I post my budget is that this is just the outline. We also generate a second version where every check is allocated based upon the first budget. That way, when we get a check we go "OK, time to pay X" instead of trying to guess as we go along which one should be taken care. It's mainly been the 1st and 15th we take care of the basics (mortgage, utilities, gas, etc) and the other checks through the month take care of that month's goals (e-fund, maintenance, debt snowball). That way if one of the smaller checks is delayed in any way (which happens almost every month), we're not relying on it for a basic.

Any good ideas on how to collect an uncollectable personal debt? I loaned $5000 to my friend back in 2001. It was meant to get him temporarily thru a job loss. So I never asked for any interest on my loan. Maybe he had a series of bad luck, or something. He [...]

I am scribbling up a larger treatise on the personal finance blogs that I read, why I read them, and also some choice posts from each blog - sort of like my own personal carnival.

Yet I stumbled upon Penny Nickel's Money and Values after reading her guest spot on Get Rich Slowly about Community Investing and Other Socially-Conscious Banking Options and now I am reading all of her back entries. She sites a wide array of blogs, most I've not seen linked to on other PFB so I am doing a lot of clicking and bookmarking too. She's also convinced me to open at least one Roth IRA with Self Help Credit Union.

So check her out, and stay tuned to for a more comprehensive post on PFBoggers that I am into.

Traffix, Inc. (TRFX-$5.73) is an interactive media company that owns and operates a variety of websites with a broad range of content. The websites feature content ranging from music for downloads to sweepstakes. Virtually all of its websites generate revenue from client advertisements.

In addition, Traffix builds end-to-end online marketing solutions for clients who seek to generate new customer contacts and increase user transactions and sales. Its full solution marketing services group delivers media, analytics and results to third parties through its four business groups:

1. Hot Rocket Marketing is an online direct-response media firm servicing advertisers, publishers and agencies by leveraging vast online inventory across sites, networks, search engines and email to drive users to client web properties, generating qualified leads, registrations and sales. The marketing strategy integrates affiliate-marketing networks with [controversial] promotion-based lead generation programs;
   
2. mxFocus develops and distributes content and services for mobile phones and devices and provides interactive mobile media solutions for advertisers, marketers and content providers;
   
3. SendTraffic is a performance focused, search engine marketing firm focused on building online presence, optimizing marketing expenditures and retaining customers by leveraging proprietary solutions, such as search engine optimization and website analytics; and,
   
4. Traffix Performance Marketing offers marketers brand and performance based distribution solutions though the Traffix network of entertaining web destinations, via its proprietary ad-serving optimization technology.

Traffix generates and records revenue primarily on a performance-based model, whereby revenue is recognized upon the successful delivery of a qualifying lead, customer, survey, completed application, ultimate sale or the delivery of some other measurable marketing benefit as defined in the client’s underlying marketing agreement.

Second Quarter Highlights

On July 16, Traffix reported net income for the second-quarter ended May 31, 2007, of $765,000, or $0.05 per share, compared to net income of $637,000, or $0.04 per share, in the comparable quarter of 2006.

Net Revenue for the quarter was $19.8 million, representing an increase of $0.8 million, when compared to net revenue of $19.0 million for the second quarter of fiscal 2006. The 4.4% increase in sales was driven principally by Search Engine Marketing services ($2.6 million, or 61%), offset by a nominal decline in Online Advertising ($0.51 million, or 4.0%).

Search Engine Marketing service revenue increased as a result of an increased focus on the identification of new third party clients and the enhancement of existing Search client relationships. We view the decline in online advertising as transient, for management continues its focus on generating revenue via Websites for new wireless client relationships (offset—in the short-run--by anticipated declines in other historically traditional clientele).

Gross Profit as a percentage of net revenue fell 590 basis points to 31.5% during the three months ended May 31, 2007, primarily attributable to a decrease in the gross profit margin of the Online Advertising component, which due to its higher relative revenue contribution (58.2% of net sales) yields a higher proportionate impact on the total relative decline.

The 10Q Detective is cognizant that net income was boosted by an increase in consolidated Other Non-operating Income of approximately $305,000 for the three months ended May 31, 2007, up from approximately $140,000 for the three months ended May 31, 2006.

The factors contributing to the increase were (i) a 16% increase in interest income of approximately $40,000,the result of more favorable rates available during Fiscal 2007; (ii) a $17,500 in realized gains on the sale of marketable securities.

Liquidity & Capital Resources

As of May 31, 2007, the Company had aggregate working capital of $30.5 million, compared to aggregate working capital of $31.7 million as of November 30, 2006.

Free Cash Flow provided by operating activities was approximately $1.9 million for the six months ended May 31, 2007.

Future plans and business strategy continue to call for Internet-based Online Advertising and Media Service activities to be the sole operating focus—as it was for the three and six-month periods ended May 31, 2007. Cash demands for capital expenditures and equipment lease obligations declined to $239,990 during the six months ended May 31, 2007, compared to $257,749 during the six months ended May 31, 2006. The significant portion of such capital expenditure was for email servers that substantially reduced Traffix’s reliance on and related additional costs associated with third party email delivery suppliers.

We observed that days-sales-outstanding ("DSO") in accounts receivable at May 31, 2007 improved: at 42 days, compared to 44 days at February 28, 2007, 45 days at November 30, 2006, and 56 days at August 31, 2006. The two day, or 4.5% decrease in the current quarter’s DSO compared to the first quarter of this fiscal year was due to continued efforts in monitoring clients and improving rates of collection across all of client relationships.

Investment Risks & Considerations

The income tax provision for the three months ended May 31, 2007, was approximately $643,000, or 45.7%, that differed immaterially from Traffix’s annual effective rate of 46.2% recognized during the year ended November 30, 2006.

Under its current tax structure, the Company’s Canadian subsidiary’s foreign earnings are fully taxed in Canada, and as such, based on the lack of any foreign source income, a foreign tax credit is not available to Traffix on the related foreign taxes. Ergo, with such taxes being fully included in the US tax provision; the result was inordinately high tax rates. Management is formulating tax planning that should be in place for the 2H:07, whereby the future effective tax rate should decline in the range from approximately 36% to 39 percent.

The Company’s Success Depends On Its Ability To Continue Forming Relationships With Other Internet And Interactive Media Content, Service And Product Providers. Today’s online lead-generation space is a crowded and highly competitive industry. The Company is modifying its business methods and practices, including diversification of its revenue drivers, in an effort to diversify its customer base. However, as in prior fiscal periods, a significant portion of the Company’s revenue is still dependent on a limited number of major customers. Albeit no single customer exceed 10% of the Company’s consolidated net revenue, Traffix’s five largest customers during the six months ended May 31, 2007 accounted for 8.3%, 8.1%, 8.1%, 6.1% and 4.3% of consolidated net revenues during this period.

Demand For Traffix’s Services May Decline Due To The Proliferation Of "Spam" And Software Designed To Prevent Its Delivery.

On May 18, 2007, online advertising competitor ValueClick, Inc. (VLCK-$21.01) received a letter from the Federal Trade Commission ("FTC") stating that the FTC was conducting an inquiry to determine whether the Company's lead generation activities violated either the Federal Trade Commission Act or the CAN-SPAM Act. Specifically, the FTC is investigating certain ValueClick websites, which promised consumers a free gift of substantial value, and the manner in which the Company drives traffic to such websites, in particular through email.

ValueClick defines the use of ValueClick websites that promise consumers a free gift as "promotion-based" lead generation.

During the six months ended May 31, 2007, Traffix recognized a decline in its email marketing revenue of approximately 55% when compared to the six months ended May 31, 2006. In our view, the potential for state and/or federal legislation to further limit the Company’s ability to contact consumers online is already discounted in its share-price.

Buy Thesis

The Internet operating landscape is changing. Numerous studies show that it is easier and as much as six times less expensive to sell to an existing customer than to acquire a new one. Consequently, the demand for lead generation and customer value management and retention demands more complex customer intelligence processing—entailing a 360-degree view of the customer.

Management previously said that future plans and business strategy called for Internet-based Online Advertising and Media Service activities to be Traffix’s sole operating focus; however, we believe that the product-mix should be inclusive of the Internet Game Development subsidiary, too—given gross profits of 69 percent!

Traffix rewards its shareholders with a 5.6% dividend yield to patiently hold the stock while management works to re-define its growth strategy and execute on growing its bottom-line. The catalysts for a sustained upward swing in share valuation will come once management demonstrates its ability to execute on prior promises: sustainable online advertising sales combined with sequential profits generated by the build-out of Traffix’s proprietary search optimization platform.

The valuation is compelling—despite the heretofore risks. Market capitalization, Price/sales, Book Value/share, and debt of $86.20 million, 1.15 times, $3.08, and nil, respectively.

Editor David J Phillips holds a financial interest in shares of Traffix, Inc. The 10Q Detective has a Full Disclosure Policy.

After a week of tumbling stocks last week, and a huge gain for the market today, I think its a good time to recommend to the world the stocks I've been thinking about.

Typically, my top 3 choices are Apple (APPL), Google (GOOG), and Exxon Mobile (XOM). This week it's no different.

Why do I pick these 3 stocks consistently when I talk to my family and friends? Because these three company continue to amaze me.

And this week especially, I recommend these stocks because two of the three (Google and Exxon) missed earnings expectations, making them especially juicy buys after the initial dip in their stock prices.

Let's start with Apple. With all the hype of iPhone, and the continued success of the iPod, it shouldn't be hard to see the media attention Apple gets. But, with initial reports that the iPhone sales were below analyst expectations, the market was worried, until they heard about the "sweet deal" AT&T gave Apple (story here). AT&T is not only subsidizing the cost of the iPhone, but Apple is picking up monthly residuals on each subscriber, each $9 a month per user. Apple may be an one-product company now, but when that product is so huge, it doesn't really matter.

Speaking of one-product companies, Google is another one of those technological wonders that has succeeded off the back of one good product, their search engine. However, they too felt a huge hit to their stock price when their quarterly reports missed analysts expectations. But the stock has been creeping back slowly. Why? Because a further analysis of the 10 cent miss, and according to their CEO Eric Schmidt (story here), shows that a majority of the miss is attributable to a 10% increase in headcount and a shoring up of their accounting procedures. For a large stable company, such a hiring bonanza is cause for worry, but for a growth company, such an increase is akin to buying a larger factory or any other asset. Sure it costs money now, but eventually, they'll figure out how to turn that expense into profit.

On to Exxon Mobil. I don't need too much of an explanation. With continued high profits and soaring crude oil prices, who wouldn't think a gas company is a great (long-term) buy?

To move forward in your quest for wealth, you need to establish a clear financial picture

Is one of your aspirations to have complete control and power over your finances? Are you ready to reign in frivolous spending and not allow hard earned money to continuously be sucked into a spiraling black abyss?

Here is a small but effective strategy to guide you toward – and keep you firmly planted on – the prosperous road to abundant wealth.

Create a Financial Action Plan, Write Your Personal Goals

In order to move forward, you must first develop a very clear and concise picture of your finances. Why not take a moment to physically write out your personal goals? (Yes, I mean really do it, Lazy One.) This is a powerful financial strategy which allows you to determine precisely where you’d like your money to go, regardless of income size.

Begin by separating your financial snapshot into three distinct categories;

¤ Your Necessities

¤ Things You Enjoy

¤ Things Which Are Important To You

• Your Necessities are monthly expenses which can’t necessarily be cut back on, such as shelter (mortgage or rent payments, electricity bill, etc), food, clothing and transportation expenses (the cost of a vehicle and maintenance, gas, car insurance). But be honest with yourself on this part while distinguishing what is actually a pertinent necessity. For example, a car may seem so, but a brand new one would fit more appropriately in the category below.

• Things You Enjoy includes your personal interests and hobbies. These are fun activities and items which bring enhancement and fulfillment into your life, such as traveling, gourmet cooking, musical endeavors, sports, gardening, collectibles, movies/entertainment, racing cars, etc.

• Things Which Are Important usually require discipline and wise financial foresight, such as tucking away a cash savings cushion, various retirement investments, a college tuition fund, having life or home insurance, etc.

Now take a moment to consider your ambitions. Financially, what would you like to accomplish in three months, six months, a year, or even five to ten years and beyond? These general goals may include:

• Investing in a Roth IRA or contributing to a 401(k)
• Aggressively eliminating credit card debt
• Contributing to a charity or spiritual institution
• Saving for an exotic trip around the world
• Paying off student loans
• Purchasing a car or home
• Establishing a cash safety cushion
• Investing in additional real estate
• Starting your own business venture

Once you have an accurate overview of what your ambitions are, start formulating a detailed plan on how to accomplish them. (”I’d like to take a summer trip to Copenhagen, therefore I will contribute $50 a month for xx amount of months, while meeting with travel agents to compare discount flight rates and accomodation options.”) 

Here is a quick rundown of my personal snapshot.

Necessity - Sufficient funds are set aside every month to cover these expenses, which include food, shelter, clothing and transportation expenses.

Things I Enjoy - traveling, a yearly gym membership, funds for movie/theatre/entertainment purposes, playing my piano, and eventually saving for a Lasik eye surgery procedure.

Important Items - Funding a Roth IRA and establishing a plump cash savings cushion for emergencies.

From this overview, I can immediately glimpse where I’d like to allocate money and decide what portion of each paycheck to devote toward each item, and what may need to be sacrificed. I’m also able to clearly calculate how to productively contribute to more than one endeavor while simultaneously working toward many or all goals at the same time.

Visually I’ve created a clear financial action plan for each aspiration, which is a powerful gesture in prioritizing and transforming these goals into reality. By taking a moment to physically write down each of these personal financial goals, I’ve been given clarity, purpose and structure within my limited income stream.

Do you know what your current personal financial snapshot looks like?

1. Get power and control over your finances and reign in frivolous spending
2. Stop living paycheck to paycheck
3. Learn how to save and plan for future goals and dreams
4. Avoid becoming entrapped in unnecessary debt; learn how to live like a lender instead of a borrower

~†~ Baby Steps Are Key ~†~ Create a written action plan to give purpose, structure and specificity to your personal financial dreams

=^..^=

~¤~¤~

Sayings of the Wise 

“Great estates may venture more, but little boats should keep near shore.” Benjamin Franklin

“Just as the rich rule the poor, so the borrower is servant to the lender.” Proverbs 22:7

“Dost thou love life, then do not squander time, for that’s the stuff life is made of.” Benjamin Franklin

 

The Hewitt 401(k) Index™ Observations June 2007

June was a very quiet month for 401(k) participants. Although the stock market had a weak month (DJIA had triple digit drops on five days of the month), the 401(k) participants didn't react much to the changes, according to the results of the Hewitt 401(k) Index™. In fact, the average daily net transfer activity was at historical lows — only 0.02% of balances were transferred on a net basis. In addition, none of the days in June had above normal activity.

trial

I just got back from a week away, my seventh flying-out-of-town trip in the past three months. The household neglect finally caught up: I crossed the apartment threshold last night and wondered what kind of animal sacrifices had been going on. Apparently the target gods rejected them all and left the slaughtered bits scattered across our living-room floor.

In despair, I cancelled my Monday evening plans and resolved to spend the night attacking the house with Pine-Sol, the dustbuster, bleach and maybe some healing crystals.

Causing me particular angst was the bathroom. Our shower curtain has long been a cleaning bane: no matter what I do to it, a week later, it's covered in a fine layer of mold and dirt. This time, the dirt looked so advanced I was pretty sure it was not just sentient but actively pursing MENSA membership.

This dirt was going to take me HOURS to fight back. I muttered dark curses and checked my supply of sponges and 409.

Then, I had a brainstorm: Our much-hated shower curtains are actually just liners. Cheap liners. The kind of cheap liners you can buy for $6 at a ritzy overpriced Manhattan homewares store (*cough* Bed Bath & Beyond *cough*) or probably for 99 cents apiece at any decent dollar shop.

Why was I going to spend two hours (seriously, that's what it took last time, to get them not even clean but relatively fit for exposure to guests) attacking with nasty chemicals liners I could just replace quite cheaply?

And so, tonight, instead of heading home early to clean, I made a Bed Bath & Beyond pilgrimage and bought new liners for $12. The environmentalist in me felt vaguely guilty for throwing out something I could have cleaned and reused. The pragmatist on me snipped that I probably wreaked more environmental havoc with the rental car I drove last week, and suggested I shut up and enjoy the quick, easy and cheap solution.

Our bathroom is now vastly improved and probably no longer a toxic threat to all surrounding life forms.

The moral of the story: Sometimes, you can solve your problems by throwing money at them.

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