Smart Saving and Investing

Today is Technology Tuesday. I’ll review various software and provide other computer tips and tricks that help folks understand their computers “more better”. Let me know if you have any computer questions that are challenging you.

FastStone Capture is a screen capture utility that allows you to grab “screen shots” of your computer. Why would you want to do that?

Well, for documentation purposes, “A Picture is Worth a Thousand Words.” If you ever have to create documentation where you wished you could provide a screen shot of something on your computer then this software will do that.

Let’s say your creating some “How To..” or other type of training documentation and you need to provide various screen shots to help someone understand what you’re trying to get across. Screen shots help tremendously.

What I really like about FastStone Capture is its small footprint. The screen below shows what you see when it is running on your computer. A small screen indeed. Which also means that it starts fast.

FastStone Capture has a great drawing feature that you can use right after you’ve taken a screen shot. This allows you to point out various parts of the screen shot and it’s very easy to use.

You can download FastStone Capture here to try. If it’s something you’ll use and want to purchase, it’s going for $19.95.

In contrast, there is the Cadillac of screen capturing tools, TechSmith’s SnagIt. For $39.95 this does just about everything you need a screen capturing tool to do.

I own both of these programs. I use FastStone most of the time because of it’s size (on screen, very small) and speed loading, read quickly.

When I have to get down and do some in depth screen capturing and manipulating then I use SnagIt. A bit bigger on the screen, slower loading, and more configuration options but something everyone would benefit from having in their toolkit.

written by Bill Stevens

To describe an Index Fund I’ll use the classic Vanguard 500 Index fund, symbol VFINX.

The VFINX fund is made up of stock in the 500 companies that the S&P 500 tracks. You would own a piece of all the 500 companies in the S&P 500.

The S&P stands for Standard and Poor’s. Standard and Poor’s is the leading provider of financial market information.

The S&P 500 is a leading benchmark for how the markets are doing. Many funds are compared to the S&P 500 performance. The 500 companies performance.

So if we take a look at the chart from Morningstar below, we can see that red, orange and green lines are stacked on top of one another. How in the heck can you see that if they’re stacked on one another!! Well, trust me.

The red line indicates the VFINX fund and its performance. The orange line indicates the category’s performance that the VFINX is in and the green line indicates the S&P 500 and its performance.

This is a great fund that a lot of folks invest in and it resembles the latest talk amongst those folks who want to make their lives simple by investing in index funds.

Some reasons include:

• The VFINX tracks the market, and we’ve been told that historically the market goes up. So if a person can hold the VFINX fund in their portfolio or as their only holding in their portfolio, and if they can stomach the downs of the market that we’ve been experiencing lately, then that is the promise. This fund will go up with the market and go down with the market. It will never do better than the market. In other words, it will NOT beat the market when the market goes up and it won’t try and lose less than the market when the market goes down. WOW!! What a mouth full.
• The expenses related to the VFINX are extremely low. The fund manager basically doesn’t have to do too much. At Morningstar it’s listed as 0.18%. We’ll talk through the “Express Ratio” in another post. But that is one indicator to look at that will tell you how much it costs to run a fund and the VFINX is good and low.
• The VFINX is considered tax efficient. Why? Because the fund manager doesn’t have to trade in and out of different investments that would cause a taxable event like selling a stock. There would be very little selling since the “makeup” of the fund doesn’t change often.

There is great power and trouble-free worry when it comes to owning the Vanguard 500 Index fund. Through the power of compounding over a long period of time this fund would do good for a lot of folks.

Of course, according to Morningstar it would cost you a minimum of $3,000.00 to get into this fund.

If it’s available to you in your employer’s retirement plan, you would most likely be able to get into this fund without the minimum. Check with your employer.

If you’re interested in holding the VFINX in your Roth IRA, you’re brokerage firm will list the minimum to get into this fund.

Disclaimer: Past performance is not a guarantee for future performance. Even owning this fund you are taking a bit of risk. The risk of the market.

written by Bill Stevens

Yikes folks!!

We’ve given up another 200 points on Friday, 7/27/07. Jeepers Wally!!

The DOW is down over 500 points this past week. I’m going to jump…, well, I’m going to jump to my back porch and grill me a steak!!

What a week!!

Well, remember we’re in this for the long term so hang tough. This is what happens. Be emotionally strong. There will be plenty of headlines to scare you off.

This is not the time to make the mistake of selling a mutual fund that has been doing good for you over time.

Now, we’re in the last week (or part) of July 2007. So here are some of those monthly reminders:

Savings

• Squeeze out that extra $x (where x is $10, $25, $50, $100, etc.) that you can transfer to your online savings account as described in action one.

Retirement Plan

• DON’T check your retirement portfolios whether it’s your employer’s retirement plan or your Roth IRA. I know this might sound crazy but it could possibly keep you from making a bad decision of selling a good or great fund.

Roth IRA

• Squeeze out an extra $50 to send to Roth IRA at Excelsior Funds if you’ve done what was talked about in action three. If you have a Roth IRA already that might be at a brokerage firm, then try and send some extra $$ to it or up your monthly automatic payment to your Roth IRA by $5.00 or more.

Motivational Monday

“Have a project going all the time. Something you can work on in the evening after you get home from work.”

The above quote is from a working man who was married with two kids and who built his own airplane in his off time. After working all day, he’d come home and spend some time on the plane. After years of doing this, he successfully flew the plane.

Now, I don’t know about you but if someone has the sustained motivation to build a plane over many years to a successful conclusion then I’m sure I can find effective projects in my life that will enhance mine and maybe some other lives.

Not to mention that this could lead to a very practical action like shutting off your TV and maybe even canceling Cable TV. Which in the long run will save you money.

written by Bill Stevens

Here are some links you can chew on over the weekend:

From one of my favorite personal finance sites Get Rich Slowly:

• Save on Groceries with ‘Strike-Point Shopping’
• Small-Town Personal Finance

From another excellent personal finance blog and the Best of The Simple Dollar go to The Simple Dollar:

• 31 Days ToFix Your Finances: A Wrapup
• The FICO Battle: Ten Common Tactical Mistakes When Dealing With The Credit Score Blues

Personal Development Blogs:

• Steve Pavlina.com
• The Personal Development Carnival - July 22, 2007

From mint:

• Four Steps to Becoming a Financially Responsible Newlywed
• 30 Free eBooks To Learn Everyting You Want to Know About Personal Finance

Mutual Funds Articles:

• Mutual Fund Distributions Explained
• Fund Basics
• Mutual Funds

Looking for Credit Card Information:

• Your Credit Advisor
• CreditCards.com
• Ask Mr Credit

written by Bill Stevens

On Wednesday, I wrote about the ups and downs of the market and how that affects the way you invest, sleep and keep your sanity. Well, everyone is being tested after today with the DOW closing down -311.50. WOW!!

Well, this is what happens sometimes. The markets have been going crazy all year long and everyone kind of knew something like this would happen and more could be coming, we’ll see.

But not to worry. If you’re a new saver and mutual fund investor, then this is part of the show. This is where you start looking at what mutual funds lose the least in times like this but make the most in the up times.

If your a trader or someone who buys and sells stocks for the long haul or short term, there will most likely be some stocks you’ll be able to get into cheap that you’ve been waiting for.

If you’re an options trader and you watch the volatility jump all over the place because of all this and the swings that are most likely to follow, then there will be nice opportunities to grab some profits from both Calls and Puts.

Talking about Puts, wouldn’t it have been great to be in some of those today? Puts allow you to make money as stocks go down. You heard me right. Again, I need to put an Options definition page up soon.

No matter how you look at it, things are sure exciting to watch.

I hope you can stomach all this and stand strong for the long-haul.

Here are some quotes on perseverance to keep you going:

“Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.“ - Thomas A. Edison

“Perseverance is a great element of success. If you only knock long enough and loud enough at the gate, you’re bound to wake up somebody!” - Henry Wadsworth Longfellow

“A diamond is a lump of coal that stuck with it.” - Unknown

“Take time to deliberate, but when the time for action has arrived, stop thinking and go in.” - Napoleon Bonaparte

“The wise man bridges the gap by laying out the path by means of which he can get from where he is to where he wants to go.” - John Pierpont Morgan

“Buy when everyone else is selling and hold until everyone else is buying. That’snot just a catchy slogan. It’s the very essence of successful investing.” - J. Paul Getty

And on a lighter note…

“Getting on a plane, I told the ticket lady, “Send one of my bags to New York, send one to Los Angeles, and send one to Miami.” She said, “We can’t do that!” I told her, “You did it last week!” - Henny Youngman

“I told the doctor I broke my leg in two places. He told me to quit going to those places.” - Henny Youngman

“What’s the use of happiness? It can’t buy you money.” - Henny Youngman

“For my birthday I got a humidifier and a de-humidifier… I put them in the same room and let them fight it out.” - Steven Wright

“I went to a general store but they wouldn’t let me buy anything specific.” - Steven Wright

“What happens if you put a slinky on an escalator?” - Steve Wright

written by Bill Stevens