Should Young Professionals Invest in Dividend Stocks?

Posted on May 20, 2012 by yourPFpro | Permalink 0

With fixed income investments like bonds and CD’s returning decade lows, some investors have turned to dividend stocks as a way to receive predictable income at regular intervals.  Dividend stocks usually refer to companies that have a history of paying out dividends to shareholders.  In fact, each year, the S&P 500 publishes a list of it’s dividend aristocrats.  A company must increase it’s annual dividend payout every single year for 25 consecutive years to get onto that list.  Many beginning dividend investors turn to this list because of that reason.

Now that we know what dividend stocks are, should we invest in them?  It’s tempting to buy a few dividend aristocrats and see your dividends steadily increasing every year.  Especially when many companies are paying out dividends in the 3-4% range and the highest online CD’s are just under 2%.  But unfortunately dividends are a little more complex than that.  Dividends may seem like free money, but companies that pay dividends are actually leaving themselves with less money to grow. Read more »

Investments ,

Facebook IPO, Student Loan Debt Bubble and My Weekly Blog Round-Up

Posted on May 17, 2012 by yourPFpro | Permalink 2

Facebook’s IPO  
The world’s largest social media site said Thursday that it had raised $16 billion for itself and early investors through an IPO that values Facebook at $104 billion.  Starting friday, investors like you and me will be able to purchase stock in the social network giant.  CEO Mark Zuckerberg is expected to sell about 30 million of his 500 million + shares, but will still retain 32% of the company.

Facebook’s IPO culminates a year long period in which social media sites like Zynga and Linkedin have gone public with varying degrees of success.  But this is the one IPO social media investors have been holding out for.  Personally, I won’t be holding FB in my individual portfolio but I’m sure my Vanguard Total Market Fund(VFINX) will re-allocate to hold a small percentage in the near future. Read more »

Guest Post, Investments, Retirement, Weekly Blog Round-Up , ,

How I Achieved a 13% Rate of Return Investing with Lending Club

Posted on May 10, 2012 by yourPFpro | Permalink 4

I started investing with Lending Club in August of 2010.  Two years later, I’ve seen an awesome 13% rate of return on my initial investment.  Lending Club is a relatively new site that brokers peer to peer lending.  In essence, you become a bank and you are free to browse and invest in thousands of notes at various interest rates.

From a borrower’s point of view, Lending Club is a great option.  As long as your credit score is above 660, you can apply for up to a $35,000 loan.  The interest rate a borrower receives will depend mainly on their credit history.  In fact, the rates are very competitive when compared to banks(ranging from 6.78% to 29.99%).  The interest rate is fixed for the term of the loan, either 3 or 5 years and borrowers can apply for loans online with a relatively simple application process.

Lending Club seems like a great option for borrowers, but what about for investors? Read more »

Investments, Loans ,

Traveling on a Budget: A Review of my Vacation to Maui

Posted on May 6, 2012 by yourPFpro | Permalink 7

The View from our Lanai in Maui

I never realized the value of a vacation until I started working full time.  You could even say I took my travels to Thailand, Hungary & Turkey for granted.  My trips during college were an awesome experience that I would recommend to anyone at any age.  But for working professionals, who get anywhere from 2-4 weeks off a year, vacation time becomes a precious commodity.  I get two weeks a year but I think I would be a lot happier with four :)

The most expensive and crowded time of the year in Hawaii is from Dec. 15 to Jan. 10.  While most of the country is immersed in snow, Hawaii stays relatively tropical: 80 degrees and sunny.  During this time, you’ll find hotels are completely booked, parking is scarce, restaurants are full, and the beaches are packed.  During the offseason, Maui seems like a different place.  You won’t find it completely devoid of tourists, but the beaches will be less crowded, restaurants have more availability and best of all, prices for airfare and hotel can be up to 50% off. Read more »

Budgeting, Vacation ,

How to No Cost Refinance Before it’s Too Late

Posted on April 29, 2012 by yourPFpro | Permalink 8

I’ve focused mainly on personal finance issues the past couple months, but I wanted to shift gears today to real estate.  Real estate has gotten a bad rap in the recent years due to the housing bubble, but home prices and interest rates are at rock bottom right now.  In my opinion, now is one of the best times to buy if you have the rest of your finances in order.

In college, I saved as much as I could in order to invest in my first property, a 2 bed/2 bath condo in San Diego.  Real estate is one of the only investments in which you can put down as little as 20-35% as principal and still get back 100% of the investment gain.  I always recommend real estate to investors who have already maxed out their 401k and IRA’s.  It’s also a great alternative for anyone looking to diversify away from stocks and bonds. Read more »

Real Estate, Savings , ,

Getting Away From Internet Job Searches: Networking Tips for Young Professionals

Posted on April 22, 2012 by yourPFpro | Permalink 4

With unemployment at 8.2% as of March 2012, many Americans find themselves relying on the same unsuccessful job hunting tactics.  Recent graduates are stuck looking for work in an extremely saturated job market where supply is high and demand is low.  So what makes one candidate stand out from another?  When I entered the workforce in the summer of 2009, I applied online for every job I could find and unfortunately didn’t hear back from any of them.  But I also went to every career fair I could find, had a few on campus interviews and networked with every one I came in contact with.

Ultimately, I was hired by an engineering firm through a contact I had made at a birthday party(very random!).  In tough economic times, it would make sense to hire the most qualified people.  However, I have clearly seen the opposite.  Companies are hiring more and more based off networking than ever.  The most qualified person doesn’t always get hired.  Managers tend to hire people they trust, people they can get along with, or people that have been recommended to them.   Read more »

Employment , , ,

How a Mutual Fund’s Expense Ratio Impacts Your Bottom Line

Posted on April 19, 2012 by yourPFpro | Permalink 3

There are literally thousands of mutual funds out there and many of them claim to be diversified, low cost, low fee, etc.  But if there’s one thing that has the most direct impact on a fund’s return, it’s the expense ratio(ER).  When comparing similar funds, I primarily look at the expense ratios first and foremost.  Most mutual funds have expense ratios varying from about 0.1% to almost 4%.  With the abundance of low cost mutual funds available today, there is no reason to ever consider ER’s of 1% or higher.

Some of us might be stuck with certain options in 401k plans.  But for everyone else, finding funds with low ER should be a priority.  An expense ratio is what it costs an investment company to offer a mutual fund.  Actively managed funds tend to have higher ER’s because the fund manager is constantly buying/selling stocks while passively managed funds are the exact opposite.  They buy/sell very infrequently and require little active management.   Read more »

Investments, Retirement , ,

How to Use a Virtual Credit Card

Posted on April 15, 2012 by yourPFpro | Permalink 0

You may have heard about the recent Global Payments Breach in which credit card data for over 1.5 million users was exposed to hackers.  Although this is only a fraction of the billion credit cards currently in use by Americans, it’s alarming to see how easily hackers can penetrate secure sites.  A virtual credit card is a nifty and relatively new option offered by some of the major credit card companies.  It’s a great tool to use in conjunction with the others in my do it yourself identity theft protection plan.

In essence, a virtual credit card is a wrapper around your credit card.  It provides an additional layer of security when shopping online.  You might come across some shady sites when shopping online.  If you’re worried about the integrity of the site, you can use a virtual credit card.  These cards are auto-generated by your provider and are for one-time use. Read more »

Shopping ,

The Social Media Bubble: Facebook Just Bought Instagram for $1 Billion

Posted on April 9, 2012 by yourPFpro | Permalink 6

No matter who you are, one billion dollars is a ton of money.  But to Facebook, this is barely 1% of it’s estimated $100 billion value.  Facebook’s looming IPO has drawn Google like valuations of the soon to be public company.  This most recent absurd purchase is the latest to define the social media bubble.  Social media valuations are becoming more and more ludicrous.  Instagram is a photo sharing app(that most people already use through Facebook!) based out of Silicon Valley and has a grand total of 13 employees.

The thing that strikes me most about these valuations is the implied growth and monetization of users.  How is Facebook worth $100 billion?  Potential.  Facebook boasts 845 million active monthly users, an active growth rate and a 27 percent profit margin(comparable to Google’s 26 percent).  The big question though is, can Facebook maintain it’s growth rate and how does it plan to make more money from it’s existing users?  Personally, I use facebook primarily on my mobile device, and they don’t even advertise yet on that platform.   Read more »

Investments , ,

Help Me Buy Something with My Tax Refund

Posted on April 5, 2012 by yourPFpro | Permalink 13

I just received my yearly merit increase: a whopping 3% to stay right in line with inflation.  Don’t get me wrong, I’m very appreciative of the extra money, but in the grand scheme of things, how much will this improve my life?  Will I be able to buy more, spend more, save more?

In the same week, I also got my tax refund from the government: $1,500.  This is actually less than 3% of my salary, but for some reason it feels like a significant chunk of change!  Now let’s figure out what to do with all this money. Read more »

Retirement, Savings, Taxes , ,