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October 18, 2010, at 6:00 am If you're new to BFS, please subscribe to my RSS feed. It shows me a vote of support and keeps me motivated to keep your attention. If you have any questions or comments for me, please contact me and I'll get back to you asap. Thanks for visiting! The following is a guest post from Barbara Friedberg, the editor-in-chief of BarbaraFriedbergPersonalFinance, as well as a portfolio manager, and MBA professor. She has an MBA in finance, a BS in economics, and a MS in Counseling. Visit the website to download her newly released free eBook, 20 Minute Guide to Investing.
Last month I wrote a guest post entitled, I’ve got the Time, How do I Get the Money, here at BFS. That article broadly covered investing and underscored why you should start to invest NOW! Following with the educational mission of BarbaraFriedbergPersonalFinance, this article continues the investing theme and breaks down one of the most basic pieces of the investing puzzle: Stocks.
Flash back a million years (okay, a couple of decades)……When I first started investing, all I knew was that in the late 1920’s and early 30’s the stock market crashed, people lost all their money, and went jumping off of buildings. Armed with that one-sided information, at the beginning of my investing life, I WAS TERRIFIED OF THE STOCK MARKET. I thought it was a place where you put your money and it all went away!
Over time, education, and lots of experience I came to understand that investing in stocks is more than a one way ticket to the poor house. In fact, it might even be a way to build wealth. So………
WHAT IS A STOCK?
A stock is part ownership in a corporation. When you buy a share of stock, you are buying a small fraction of the entire company. Some stocks pay dividends and others do not. A dividend is a small cash payment expressed as a percent of the purchase price. These payments are paid from 1 to 4 times/year and range from 0.5% on up to 8% or more. The 49 year average for dividend payments from 1960-2009 was 3.17%. 3% looks pretty good today considering my savings account interest rate does not even approach 1%!
Historically, stocks had higher returns than bonds and cash assets; although during the first decade of 2000 something very unusual happened; bonds returned more than stocks. Does that mean that I should give up the idea of investing in stocks?
I don’t think so. As a matter of fact, contrarian investors might suggest that the best time to invest in an asset class (i.e. stocks) is after a period of poor performance. Have you ever heard of the statement, “Buy low sell high?” Typically, after a period of underperformance, it is a good time to invest.
What does this Mean to ME?
- Like any other investment, investing in stocks offers the opportunity for increases and decreases in your personal wealth.
- In the short term, the stock market is very volatile and goes up and down a lot. So, NEVER invest in the stock market any money that you need in the next 5+ years.
- In the long term, it is likely that a diversified portfolio which includes some stock investments will offer a return greater than bonds, cash, and the rate of inflation! In fact, over the last century, including dividends the S & P 500 (a proxy for the US stock market) returned approximately 9%/year*.
- If you are saving for retirement, a down payment for a house (greater than 5+ years away), or college expenses for your kid, you might want to put some of your cash in the stock market.
WHAT SHOULD I DO?
- Make sure you have some savings, term life insurance (if you have dependents), and NO credit card debt.
- Read and educate yourself about investing.
- A work retirement account (401K) is a great place to start investing.
In sum, don’t be afraid of investing in the stock market. Stock mutual funds are a great place to begin investing. But, before you begin, get educated!
*Caveat: This article is for information purposes only and may not be appropriate for your individual situation.
Crystal’s Question: Since stocks could be one of the best investments for 2011, do you have any stock questions for Barbara? Come on, this is your chance here at BFS since I know nothing, lol. 
October 17, 2010, at 3:00 pm
BFS is a member of the Yakezie Alexa Ranking Challenge! My ranking last week was 54,669 and is now 53,893!
The original goal was to be in the top 200,000 by July 4, 2010 and you helped me blow that out of the water in 2 months…a whole month early! Then we were shooting for 100,000 by July 4th and we hit that goal too!!! After that we started a new goal of 75,000 by the end of August, and I thought there was no way, but we hit that out of the park by August 15!!!
Now we are shooting for 50,000 by Halloween! I know it’s a little insane, but we are so close! We had a good week and hopefully we’ll do even better this one! Thanks for helping me out so much! Only 3,893 to go!
As always, I would like to sincerely thank all of my readers and the members of the Yakezie Challenge. Obviously, this would have been impossible without all of you. Thank you all so much! I repeat those words every week, but please understand that I mean it every time.
In case you didn’t know, Alexa traffic rankings are determined by the numbers of hits a site gets by people with the Alexa toolbar. If you want to be part of this ranking community, you can download the Alexa toolbar here.
If you are a Yakezie member and don’t see yourself on my member list, please send me an email or leave a comment here to be added. I copied the list originally in early March and updated it in mid-June. Please let me know if you are still missing. Thanks!
If you are interested in seeing how I went from an 8 million plus Alexa rank to about 60,000 in less than 7 months, you can see My Blogging Schedule over at Crystal Clear Thoughts.
BTW, I am going to start posting blogging stat and income updates at the beginning of every month since so many people, bloggers and non-bloggers alike, seem interested. This update will be posted on all 3 of my sites – Budgeting in the Fun Stuff, Crystal Clear Thoughts, and Dog’s Life For Me. Each site will have it’s own stats and income listed. Pop in once in a while and we’ll see whether blogging full time by 2012 is a silly dream or not!
October 16, 2010, at 6:00 am
If you haven’t already (or to see the new content),
please also check out my new blogs,
Crystal Clear Thoughts and Dog’s Life For Me!
If you want to take advantage of the weather to exercise, consider joining the
Crystal Light Challenge!
My Favorite Posts this Week
Guest Post on BFS
Thanks for the guest post and the day off!
If you would like to guest post on BFS, please send me an email with your idea or post and I’d love to have you over for the day! If you are a business, please email me for more details. Thanks!
Blog Carnivals that Included BFS
Carnival hosts, please email me if BFS is included in your carnival so I don’t miss it in my roundup, thanks! I know how much time these things take, so as always, I am truly grateful!
Other Info
And now to introduce a brand new part of Weekly Favorites and Gratitude - I gladly admit that I ripped it off of one of my favorite blogs, Len Penzo dot Com. I just think it’s nice. I’ll be listing the top 5 referring sites of the week on most of these roundups. The top 25 of each month will be listed on the first Saturday of every month.
Top 5 Referring Sites to BFS
- Free Money Finance
- Wisebread
- Yakezie
- Grumpy Rumblings of the Untenured
- Everyday Tips and Thoughts
Feel free to email me if you have any suggestions. I’d love to add a few more blogs to my regular reading list or at least give a shout-out for great posts or contests.
As always, thanks to all the bloggers that teach me something new every day. Thanks to all my commenters for making this blog the community I want it to be. Thanks to all my lurkers too. I hope everybody is enjoying this as much as me!
October 15, 2010, at 6:00 am
Today is Blog Action Day, a day where all bloggers are called to arms about a specific global issue. This year’s topic is water.
As most of my regular readers can attest, I do not blog often about conservation. I try not to be a hypocrite and I am far from uber green. Mr. BFS and I don’t go out of our way to screw up the world, but we aren’t activists either.
Our contributions mainly consist of owning a Prius since he drives so much and it has storage space, saving and recycling our aluminum cans and newspapers, only driving when necessary and combining trips, and saving as much water and electricity as easily possible to keep our bills low. We also don’t live on bottled water.
According to this Change.org website, the people of the U.S. drink an average of 200 bottles of water per person each year. I’m going to ignore the berating they give us for paying for something that we have access to already since I refuse to feel guilty for having access to something that someone else doesn’t. I am not personally trying to mess over Africans and would never sign a petition to keep clean water from them, so I do not appreciate articles that try to convince people through guilt.
I was surprised that it takes 17 million barrels of oil to produce the plastic water bottles for the U.S. every year and 86 percent of those aren’t ever recycled. They also bring up the fact that most bottled water comes from municipal water systems, which is the same as what you can get from your tap, or underground streams, which may hurt those environments by draining them dry.
This info tells me:
1) A water filter could give us the same water as what bottled usually ends up being.
2) I need to find a recycling center that will accept water bottles. We do not have recycling pickup and I’ve never looked into anything besides aluminum and paper.
3) Be very careful who you mention bottled water to since it is a hot button topic nowadays…
In the interest of full disclosure, Mr. BFS and I do buy 2-3 cases of bottled water a year (that’s about 72 bottles a year). We like the bottles. We stock our mini-fridge with them and refill them continuously until we decide they are too icky for a good cleaning to cure. We also take them on car trips since they fit in the drink holders.
Do you reuse water bottles? Do you try to avoid it altogether? What’s your take on the issue? Do guilt articles tick you off too?
October 14, 2010, at 6:00 am
The following is a guest post from Kevin at FinanciallyPoor.com, where he writes about many personal finance topics but focuses on changing your attitude about money.
As you try to reach your personal finance goals, sometimes a little extra money may be the key that you need. When money is tight, an extra $10 or $20 can really make all the difference. If you want a little extra money without going out and getting a side job, recycling is an easy way to start. It is good for your finances and is a great way to do your part to save the planet.
Use What You Have
Many people run out and get extra containers or storage bins before starting to recycle. This completely defeats the purpose. If you are recycling to get some extra money, spending money won’t do you any good. Recycling isn’t a get rich quick scheme. It will take a long time to build up to a small amount of money. Use things you have to maximize your earnings. An old cardboard box or trash can is a great place to start throwing bottles and cans. An empty trash bag will even do the job.
Get What You Pay For
One reason that recycling is such a good idea, is that you really are usually only getting your own money back. In many states bottled goods are charged a deposit. This deposit is encouragement to recycle. You might be paying five cents a bottle at purchase and then have this returned to you when you recycle. By taking your bottles and cans to the recycling center, you are only getting back the money you have already invested.
Little Amounts Add Up
Many people don’t recycle because they feel that the pocket change they are saving doesn’t matter. It is true, you aren’t going to make a ton of money recycling. However, you may be able to get $40 or $50 dollars each year. If you are running low on funds before payday, those bottles and cans might really come in handy. Many supermarkets have recycling centers right outside. This means that you can take your recycling quickly without having to run all across town.
If you are looking for a great way to build up a little extra cash for something you already have laying around, consider doing your part to save by planet by recycling. Don’t just send your extra cash to the dump, take a little time and recycle; it will be worth your effort.
Do you recycle?
Crystal Comments: We don’t have recycling pick up, so Mr. BFS and I only save up aluminum cans in trash bags and newspaper in a couple of cardboard boxes. We stopped drinking soda regularly and only get 2-3 newpapers a week, so we have yet to do anything with our cache. I’m hoping for $10-$20 when I finally drop off the cans.
October 13, 2010, at 6:00 am
If you have a chance, please check out my staff writer post, Did Money Make a Difference in My Marriage Decision?, at Sweating the Big Stuff today!
Len Penzo posted 5 Items in Nature With Enormous Finder Fees at the end of September that made me smile. Here are the 5 really expensive things he listed that you could hunt for to make some money and my personal take on each one:
1. Truffles ($6000 per ounce)
Other than the yummy chocolate bites, I don’t do truffles. I can stand a few mushrooms here and there but I will never understand how anybody could pay so much to eat fungus. Since the only truffle dish I can think of right this second is truffle ravioli, I’ll just say I rather have 4 cheese ravioli with some grated parmesan on top.
2. Saliva Nests ($285 per ounce)
This is yet another truly expensive food that I cannot wrap my head around. Even if birds nest soup tasted like rainbows and cotton candy, I couldn’t justify spending so much for bird’s spit. Give me baked potato soup any day of the week!
3. Saffron ($172 per ounce)
We actually received a tiny tube of saffron as a gift and have yet to use even one sprig. We’re not saving it for anything special; we just can’t seem to find any dishes that would include saffron that we’d actually enjoy enough to make. Our most used spices are salt, pepper, garlic, and onion powder.
4. Meteorites ($50,000 per ounce)
I will never understand paying that much for rock. Unless you are going to study the piece for proof of an existing alien species, I can’t think of any reason to own a piece of a meteorite anyway. If you aren’t a professional, you run the risk of being sold a $50,000 piece of quartz anyway…
5. Sturgeon Eggs ($225 per ounce)
I have seen caviar but couldn’t work up the nerve to try it. I’m sure it just tastes a little salty, but I’m a girl that took 26 years before trying her first raw oyster. If these fish are endangered, why are people still eating their eggs anyway? Kind of hard to reproduce if you kill ‘em all now…no more salty fish eggs in the future if we eat them out of existence now. 
Can you think of any other super expensive natural items that just don’t seem worth it to you?
Lobster isn’t super expensive, but I always thought it was way overpriced for its flavor. It looks like a sea insect and tastes a little off to me…even smothered in butter, I rather have crab or steak.
October 12, 2010, at 6:00 am
My husband received a 4-burner propane grill for his birthday in July from his very sweet family and we have gone grilling crazy! We use it 2-3 times minimum every week and I just realized that the propane tank probably doesn’t last forever.
Most people around us in Houston seem to own one propane tank and pay $20 or less to have it refilled or exchanged when it runs out. We were going to do that too except, wouldn’t it be completely inconvenient to run out while we’re in the middle of cooking? I don’t want to have to go to CVS or Lowe’s or Home Depot in the middle of a potluck. So, I bought another $48.50 tank.
Propane Grill Cost
As I signed my little credit card receipt, I realized that I didn’t even think twice about it. Mr. BFS and I decided that a second tank would make more sense and I bought one. I never even thought, “but it’s $50!”
At first, that worried me. I don’t want to get complacent with our money. Then I thought, what is the use of saving as much as we do and living on one salary if we can’t buy things that make sense when we want them? So, there is where I am right now. I like that feeling actually.
It also got me to thinking how much the propane is going to cost us every year. We currently use the propane 2-3 times a week for 10 minutes or so each time. We also used it for one big potluck to grill tons of chicken breasts for 45 minutes. It isn’t empty yet, so our tank is lasting us at least 3 months.
If we only refill or exchange our tanks from here on out, that is $20 every 3 months or $80 a year. The hamburgers, fish, and steak we’ve been having totally tastes like it’s worth an extra $80 a year. Woot for propane grills!
Propane Grill versus a Charcoal Grill
Before anybody asks, yes, I prefer the taste of charcoal, but charcoal doesn’t heat up in 5 minutes or less and cook the whole meal in 10 minutes or less. Well, at least our little charcoal grill doesn’t. We also wanted a larger grill in case we ever had another long-term power outage like after Hurricane Ike.
We didn’t have any grill for those 8 days and all of the meat in our freezer went bad. Altogether, we tossed out at least $200 worth of food that week while waiting for electricity again. I also found out that I am in love with air conditioning and am surpremely bitchy without it. Poor hubby…
Anyway, do you own a grill? Propane or charcoal? Which do you prefer?
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DISCLAIMER I am not a professional or a financial advisor. BFS posts are informational opinions only. Please make your own financial decisions based on personal research or see a financial advisor.
Also, there are paid links on this site. There is no obligation on your part to purchase any products advertised on this website.
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