Diversification

I read a suggestion that the minimum number of stocks you should have in your portfolio is five -- all from different industries. In doing this, you should not have more than 20 percent of your portfolio in any one industry (i.e., you shouldn't have 20 percent in Yahoo! and 20 percent in Google). This principle would have saved a lot of people money during the Dot-com craze since people were pouring all of their money into high-growth, high-risk technology stocks -- allowing their entire portfolio to be nested in one industry! I think that smart investors, like Warren Buffett, probably still did okay despite the burst since they had properly diversified.

I'm sure that there are loads of people who do very well without properly diversifying. But one downturn in the chosen stock can lead to a loss of years of growth, just like the Dot-com era. I'm also reminded of Amaranth -- a Hedge Fund -- that lost one-third of its value in one week because of bets in the energy market. $6 billion down the drain because it weighed too heavily in the energy sector. I think that all investors would be wise to learn from that mistake -- diversify!

Multi-Tasking

I was reading a copy of Costco Connection today -- an interesting magazine that Costco puts out monthly. There was an article talking about multi-tasking that I thought was pretty interesting. It reminded me of an experience that I have with a friend who multi-tasks on a regular basis. We were talking, then somebody came into the room and he started to talk to that person. Then his phone rang and he started to talk on the phone. Then he finished the phone call, did something on the computer, finished his conversation with the other person, then came back to the conversation with me. I was quite annoyed because I had to wait through all of this while my friend cycled through all of his multi-tasks.

This experience made me start thinking about my own multi-tasking habits. My biggest problem is (or was) working on homework only to get distracted by a new email or news story. One thing that I feel that I have successfully mastered is to not answer my cell phone if I'm doing something that is more important (such as eating dinner with my wife or talking to a friend face to face). Michelle M. Weil, PhD, gave three recommendations for effectively managing time in relation to multi-tasking:

1. Estimate how long tasks take: We sometimes spend more time doing things than we realize. I think we would be amazed if we timed how long we spend just checking our emails on the computer. The author suggested that we set a time limit for tasks and try our hardest to stick to those time limits.
2. Develop an "external memory": We sometimes do things because we're afraid that we'll forget to do them later. If we set a method of remembering to do things (such as a "to do" list in a notebook), then we can avoid having to multi-task now.
3. Give yourself a chance to persevere on a task until completion: If you are engrossed in a task, stick to it until you are done. If you stop, then you'll have to spend time figuring out where you were in addition to the time you'll have to spend doing the task. Get it done and move onto the next step.

I Opened an HSBC account

Today, I finally gave in and opened an HSBC Direct online savings account. The application process wasn't too bad. Reading through all of the legal mumbo-jumbo wasn't fun, but there wasn't anything out of the ordinary that I found. One question I did have, though, was about the fee scedule. On the disclosure, it says that there is a $15 funds transfer-in fee and a $30 funds transfer-out fee. Based on the home page, I assumed that there would be no fees (just like for ING Direct). I called the customer service number (1-888-404-4050) and was talking with a live person within 15 seconds! He answered my question very quickly (the fee refers to wire transfers, which are different than the method of typical method of funding the account--thus, fees aren't charged on typical deposits)! I was very impressed with the customer service.

So now, I'm waiting for the test deposits to my checking account and the rest of the paperwork to fill out in the mail. Hopefully, everything should continue to go smoothly. I'll give an update later.

HSBC Direct

I might open up an HSBC Direct account. I opened up an ING Direct account about a year ago and have been very impressed with the site. However, HSBC has been doing a ton better in raising rates. HSBC just raised their rate to 5.05% while ING raised their rate to 4.35%. It's not a huge difference, but it definitely adds up over time. Basically, I'm wondering whether it is worth switching over. How's the service and website interface at HSBC?

I found this blog on Boston Gal's Open Wallet . It's got some good information, but I'm looking for more opinions specifically about HSBC. Thanks!

Google Checkout

So Google came out with Google Checkout today. Basically, it means that you sign up for one account with Google and can then shop at various stores through Google's website and don't have to make a new user name for each web site. Pretty nifty if you ask me.

In order to jump start the program, Google has partnered with Citibank so that you can recieve $5 or 5 Dividend Dollars or 1000 ThankYou Points if you make a purchase using your Citi Card by September 15, 2006. I think that I'll give it a try.

Free Backup Service

Mozy.com is a free remote backup service that securely stores your data on its servers. You get 2 gigabytes of free storage and can pay to receive more backup space. Or you can refer friends and you get more space for doing that, too. It's a secure and convenient way of backing up your important information. If you've ever lost a file (or worse, your entire hard drive), you know how important backups are. If you've never lost a file, don't learn the hard way.

To read more about Mozy, check out this article at PCMagazine.com.

Help Your Child Save Money

I read a good tip from my Credit Union (BECU) on helping children to save money. I copied the following text from their website.

Consider matching part of what your child saves

By doing this your child will be apt to save more. And as your child gets older, this may help him or her to better grasp the benefits of company matching plans for 401ks or other profit-sharing opportunities.

I think that matching our children's money will encourage them to save more because they will see their savings increase quicker. Also, we need to implement some withdrawal policies so that they won't abuse this benefit (just like there are limitations on 401ks).

Another point that BECU made is that children learn how to handle money by following the example of their parents. If we're spending money haphazardly, then chances are that our children will tend to do the same.

Are there any parents out there with more advice for helping our kids (or us as parents) to save money?

Click here for the whole article for tips on teaching your kids lifelong financial lessons.

Apple and Nike working together

Nike just came out with a shoe that syncs with your iPod Nano to record the distance traveled, calories burned, and other workout statistics while you're running. This information is stored in the iPod, which can then be downloaded to your computer so that you can track your workout history. A great new use for the iPod! Although, I'm still more likely to buy a GPS receiver before I buy an iPod.

Read more about it at ZDNet.

Top 10 Tips To Improve Your Gas Mileage

Here are ten tips for conserving gasoline. To me, they are common sense, but for others, these tips have to be spelled out.

Click Here! hybridcars.about.com/od...

Hooray for Mothers

There was an interesting article posted on Reuters about how much a stay-at-home mom would make based on what she does around the house. They calculated the figure based on its relation to ten types of jobs: housekeeper, day-care teacher, cook, computer operator, laundry machine operator, janitor, facilities manager, van driver, chief executive and psychologist. Based on the study, the average stay-at-home mom would make a salary of $134,121. Not bad. However, I think that in comparison to the good that they do for society as a whole, that estimate is low.

My mom is a stay-at-home mom, so maybe I'm a little biased in my viewpoint. But she has done so much good for our family, taking the roles of the ten types of jobs listed above and even more! Happy Mother's Day (a week early)!

BYU Tanner Building Preview

Today, I attended a meeting with Ned Hill, the Dean of the Marriott School, who shed some light on the upcoming plans of the expansion to the Tanner Building at BYU. The expansion looks like a miniature of the current Tanner building (it's about half the size) and will connect to the west side of the current building, connected by an atrium. Based on the plans, it seems like one of the emphases is to expand student study and group areas, which I think is a very good idea, since students are randomly located in nooks and crannies around the Tanner building. There are also some new classrooms, which will allow for more students to attend the Marriott School of Management. Here's a cool video that gives a virtual tour of the expansion. I'd highly recommend taking a look at it.

Be Careful of Scam Internet Companies

Be careful the next time that you use an escrow (or any) Internet company to secure your eBay transactions. An associate of mine showed me USA-Trader, which claims to be a leading escrow provider. However, the funny thing about the web site is that all of the business information has been stolen from EscrowTech, a legitimate company.

The web site (USA-Trader) has done everything possible to make the company look legitimate. They have the entity number, license type, and state origin right on the home page. They have a Lindon, UT address where the company is located. Yet, all of this information is actually related to EscrowTech. Another item that is meant to "legitimize" the company is the customer service phone number, which is actually a New York phone number. Or look at the secure connection certificate on the login page. The fraudsters have taken every effort to show people that they are a real company.

Defrauding people over the Internet is very easy. A rule of thumb is to only trust companies which are well established and that other people recommend. Yet, then you run into the pyramid-scheme technique of fraudsters where they intentionally build trust in current customers. That way, they can lure more people into the fraud. At USA-Trader, the first few transactions are run properly. Then, the third or fourth never goes through and suddenly all contact with the company is gone. An extremist would say to not do business over the Internet. But that is the direction of our economy. Just remember how easy it is to set up a web site, make up some information, rent a P.O. box, get a phone number, even get a security certificate. Take everything you read on a web site with some healthy skepticism, especially before sending your money to it.

Quicken Update

Quicken is one of the best things that I have found to manage my finances. When I got married, my wife and I tried to manage our finances just using the basic checkbook ledger and writing out a budget on paper. But I've never really been that great about keeping the ledger up-to-date (even though by profession I am an accountant) and it was difficult to calculate whether we were staying within our budget. But in Quicken, we can categorize our expenses and incomes, manage our investments, download our transactions directly from our banks' web sites to reconcile, and the list goes on. It's made it a lot easier to manage our money... maybe even fun.

I have an older version of Quicken and they are starting to phase it out, though. We've decided that it will be a good investment to purchase the latest version. I found this web site called SoftwareOutlet.com, where I can get the Premier Version for $34.99 (or you can get the Basic version for $21.99), which is half the original cost according to the web site. That's a lot better than going to Best Buy and paying $79.99 for the Premier Version. I guess according to Best Buy, SoftwareOutlet.com is more than half the cost. :) Either way, though, it is a great investment.

12DailyPro - An Example of a Ponzi Scam

How would you like to receive a 12 percent return on your money everyday? All you have to do is run an autosurf program on your computer everyday and such returns are possible. Or are they?

People should be skeptical when they hear about offers that sound too good to be true. The above example is taken from 12DailyPro, which is a classic example of a typical Ponzi scheme. People pay money to the company and are paid the promised return. However, the money they receive is only a portion of their money being returned to them. They think, though, that they are receiving interest payments and that the company is legit. Then they refer their friends, who also receive interest payments, and the cycle continues until the mastermind behind the scheme takes off with all of the money. A few people may end up ahead, but the majority loses everything.

Yet, people who have invested in 12DailyPro claim that that the secret to the return is savvy business tact. Users prove that such returns are possible by showing examples of Real Estate investments and online businesses with little overhead. I don't dispute that such returns are possible, but one also needs to remember the factor of risk that such people incur. A real estate wholesaler may make a down payment of $500 to purchase property for $150,000 (the example given on 12DailyPro's forum). He or she then turns around and sells/assigns this contract to somebody else for $165,000. That's a return of $15,000 on a $500 investment--a 3,000 percent return! But look at if from a flip side. What happens if the wholesaler can't sell the property at a profit and is forced to liquidate at $100,000? That is a $50,000 loss on a $5,000 investment--a 10,000 percent loss! High yields are possible, but come with certain risks attached.

Another point that users would like to make is that "the more members and traffic that visit an autosurf website, the more valuable its ad space becomes." This is true, which is evidenced by Google's phenomenal profits for its advertising space. However, what value is their in autosurfing a web site? In essence, advertisers are paying extra money for computers, not people, to view the web site. Eventually, smart advertisers would realize the poor return on this investment and cease the practice.

Lastly, people should be skeptical when a company requires a down payment in order to become an employee of the company. Typical companies do not pay based on the amount invested if everybody does the same thing (such as autosurfing a website). Compensation is usually based on skill, seniority, and other things of the sort.

Of course, users will discount all of these red flags and hail that 12DailyPro is different than any other business that has ever existed. I, for one, will still choose to invest in the stock market rather than investing in sketchy business practices.

A Mac Virus?

It looks like somebody finally decided that Macs needed to have a virus of their own. The Washington Post reports that a virus is now being spread through Macs using the iChat program. It disguises itself as a file containing a picture of the next-generation Apple operating system, called "latestpics.tgz." Once opened, it sends itself to everyone in the iChat buddy list. Although it is only one virus, it proves that even Apples can be the targets of viruses. I just hope that Mac users weren't too boisterous about the lifetime, virus-free history that they have enjoyed by not downloading anti-virus software.

Fossett Breaks Flight Distance Record

Wow! Steve Fossett traveled around the globe about one and half times, doing the trip in 3 and a half days and covering 26,389 miles! It's crazy to think that he did that alone in an experimental plane . And to top it all off, he had several close calls on the way (losing 750 gallons of fuel at takeoff, doing an emergency landing in England, and hitting stormy weather in India that almost caused him to eject). Sometimes I wonder what drives people to set records, especially when it involves such risk. I guess everyone has their own thing to drive them in life.

Top 10 Investing Books

I just opened a Scottrade account, so I'm trying to learn about investing. I found a list of Top 10 Investing Books that I thought might be helpful in learning some strategies. I've learned plenty in college about the theory behind stocks and why they go up and what not, but I've never actually learned anything about picking stocks. Maybe these books could help.

Good Year For Boeing

My Dad works for Boeing, so I'm a little biased when it comes to the airplane industry. However, statistics don't lie. It looks like Boeing won the airplane market last year, although Airbus disputes saying that it sold more planes. However, most of those planes were single-aisle planes while Boeing's majority were wide-body jets (777 and 787). Thus, Boeing won the market share in dollar figures with a total share of 55 percent.

I'm still interested to see what will become of the A380. Airbus has had a lot of bumps trying to get it released. I personally think that Boeing made the correct decision in choosing to emphasize the more cost-efficient 787. In a time when gas prices are unstable, does anybody else see the wisdom in opting for fuel-economy? I think that Delta felt the gas price strain contribute to its recent bankruptcy. Southwest Airlines, on the other hand, faired well with their strategic derivatives that secure a low gas price for a few more years. What happens when those run up, though?