There is a thin line that differentiates investing and gambling.

We might consider professional gamblers—poker players, for example—a breed of speculative investors. Of course, we might also call investment professionals who take wild risks in financial markets gamblers. No matter how skilled the card shark or how practiced the investing maven, one thing is certain: in cards, as in the stock market, there are no guarantees.

Whether we gamble or invest, we take risks in pursuit of potential rewards.

We risk a dollar on a lottery ticket for a potential to win ten million dollars, we risk $25 on a hand of blackjack for the potential to double our money, we risk $5,000 to buy a penny stock for the potential it will triple in three months, or we risk our life’s savings in the stock market for the potential to earn consistent annual returns.

Each risk carries vastly different odds (and potential returns). At the one extreme, the odds you will lose your dollar is good; of winning the lottery, not so good. On the other extreme, the odds of making a modest return on a long-term investment in the stock market is good; the odds you’ll lose a chunk of your savings is much lower.

But are investing and gambling the same? Let’s use an example to find out: Read more…

Feb 8th, 2010 by Simon Zhen in Investing
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Online savings accounts are a critical tool—especially for young savers—to set aside savings in an insured account while earning better interest rates than at their local bank. This page examines the best online savings account rates and is updated monthly or when rates change. For a more detailed comparison of our most recommended online savings accounts, read: high yield savings accounts compared. Read more…

Feb 4th, 2010 by David Weliver in Saving
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To make a successful investment, you must know when to buy and when you should sell. The reality is that there are only a handful of companies worth holding onto for long periods of time—and there are very few investors who are perceptive enough to buy only those companies.

There will always be good times to sell stocks we own, and knowing when to sell is just as important as knowing when to buy. Yet we often find ourselves selling our winners too early and holding onto our losers too long.

Here are some questions to ask yourself to help decide when it’s time to sell your stocks. Read more…

Feb 4th, 2010 by Stan in Investing
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Have you ever wondered why your checking account is free? Obviously, it’s not because your bank is feeling charitable. Big banks make big money. The kind of money that leads to the obscene Wall Street bonuses we so often hear about. But banks make money even when they’re not involved in Wall Street’s multinational investment deals and billion-dollar hedge funds. Old fashioned “retail banking” (i.e., taking deposits and making loans) is quite a business by itself.

Banks are never short of come-ons for winning new customers; some banks offer new depositors free checks, cash bonuses or iPods (just to name a few).

That’s because banks can’t make money until they have your money. Read more…

Feb 3rd, 2010 by Simon Zhen in Personal Finance
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Last week, I wrote about how dating can get costly as you grow into your twenties and I offered some tips for learning how to avoid spending a lot on dating.

This week, I’m back with a list of a few inexpensive date ideas to help with your frugal dating journey. An inexpensive dating life is possible; it just takes a little creativity to plan dates that are fun and inexpensive but don’t feel cheap. The inexpensive dates may take more time to plan, but your wallet (and hopefully your date) will appreciate it in the end.

With Valentine’s Day just around the corner, hopefully these ideas will help you put a fresh and frugal spin on your next date: Read more…

Feb 2nd, 2010 by Carrie from "Carrie...On The Cheap" in Frugal Living
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Have a student loan, home loan, or personal loan? Have you ever wondered exactly how your lender calculated your monthly payment on the day you accepted the money? Sure, there are interest calculators and other available resources online to help you figure out just how much you will be paying back at the end of a loan, but sometimes it’s useful to figure it out for yourself.

Assume you are the proud owners of a new home and you need to finance a total of $250,000 over a 30 year fixed mortgage rate of five percent. Do you know what your monthly payment will be? Do you know how much money you are going to pay over the course of the full 30 years? Sadly, the numbers are probably a lot bigger than you think, but I’m going to show you just how to calculate this information on your own.

The formula for figuring out your own monthly payment on a principal loan is as follows: Read more…

Feb 1st, 2010 by Guest Writer in Debt Help
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Just over a week ago, the Obama Administration waged war on Wall Street.

President Obama has proposed financial reform that would limit the size and activities of the largest U.S. banks by separating proprietary trading, hedge funds, and private equity operations from banking (taking deposits and making loans). Theoretically, these reforms would simultaneously reduce the size of these banks and curb risk-taking.

Assuming that the new proposal passes the Senate, how effective will Obama’s proposal be? Will it ensure financial stability and long-term economic growth for the U.S.? Not necessarily. Here’s why. Read more…

Jan 29th, 2010 by Stan in Investing
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It’s an age-old conundrum: How do can you make a good impression on a date and not spend a lot?

Still in college? Then a night out at “Quarter Draw Thursdays” might be all it takes. The rest of us don’t have it so easy. There’s no way around it, a typical post-college “dinner and drinks” date can really set you back. If you’re smart, however, you can have great dates for fewer dollars. Here’s how:

Go Easy on First Dates

Your desire to make a great first impression on a first dates can tempt you to pull out all the stops. Think twice. If this date’s a flop, you never know just how many first dates you’ll be going on, and following your urge to splurge could get expensive pretty fast.

First of all, don’t pay if you don’t have to! Post 1959, there may be as many arguments for how to divide the check on a first date as there are romantic restaurants to choose amongst.

The rule of thumb (or one we like, anyway) is that the asker foots the bill.

That means you can wait around for somebody to ask you out or go looking for other ways to save. (Which would be wise, because first dates don’t have to break the bank). For example, you could forgo the tired dinner and a movie routine for a home-cooked meal (though this works best if you’re already friendly with your date; not so much for Match.com first meetings).

Or, meet for lunch instead. At many restaurants the tab will cost half as much as dinner (plus the date will be quicker so you can make a fast break if things get awkward).

Lastly, don’t be afraid to bust out a coupon, even on the first date. Call me a financial freak, but I’d have gone gaga had a guy used a coupon on a first date! (Put it this way: If you’re the kind that likes coupons but your date is horrified that you would use a coupon on a date, how far is that really going to go?) Read more…

Jan 27th, 2010 by Carrie from "Carrie...On The Cheap" in Frugal Living
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So, you want some answers.

• On priorities: I’m 25. What should my financial priority be?
• On saving: How much should I be saving if I earn $45k?
• On spending: Can I afford that vacation next summer?

In three years I’ve written roughly a half million words (about two or three average-length books) about money. I am proud of those words; I like to believe they help readers take control of their finances every day.

Sometimes, however, I flip flop.

I don’t intentionally provide contradictory advice. I simply believe that in spite of all the numbers involved, personal finance is more art than science. I like to point out to readers there are many roads leading from A to B. Some are fast and difficult, others longer but scenic.

But many readers aren’t looking for whimsical debates on the best way to budget; readers want answers. They want somebody to tell them: “If you’re in this situation, this is what you should do, and this is why.”

I get it.

If a reader doesn’t think the advice in an article is sound, they won’t follow it. But readers certainly don’t want to be confused by myriad possible solutions to their problem.

That is why I give you the Seven Precepts to Prosper By:

1. Avoid debt unless it can provide, with certainty, a return on the money borrowed.
2. Save and invest 25 percent of your income.
3. Account for your spending.
4. Know what you value.
5. Improve yourself.
6. Keep it simple.
7. Give back.

I wanted to bring all of my own financial beliefs that I write about in various articles together in one place. Not only to showcase my own beliefs about money, but also to provide a starting point for future readers to learn what this site is all about.

I hope these precepts inspire you on your own road to financial peace whether that means being free of debt and having “enough” or climbing higher mountains of wealth. Read more…

Jan 25th, 2010 by David Weliver in Personal Finance
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This past week, the Boca Raton Resort & Club hosted the Third Annual Inside ETFs Conference, the world’s largest exchange traded fund (ETF) event with over 750 participants. CNBC even broadcasted live from the event with interviews from ETF issuers, marketers, fund managers and others involved in the ETF business.

With over 800 ETFs in the U.S. and total ETF assets recently surpassing the $1 trillion mark [WSJ sub. req'd.], the ETF industry is certainly growing fast. But where are ETFs going? Let’s take a look. Read more…

Jan 23rd, 2010 by Stan in Investing
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