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Learn how to invest

There is so much to learn about investing money. With so many different theories and methods, we gathered some helpful tips to get you started.

Social Security, Ponzi Schemes, and Realistic Expectations

Recent political debates have brought up comparisons between Social Security and Ponzi schemes. (Have you read the book about the real Ponzi?) Even though seemingly every single economist on Earth has weighed in, this discussion has been around for so long that the Social Security website already has an entire page dedicated to addressing it. ...

LendingClub and Prosper Tax Forms: 1099-OID, 1099-B, and 1099-MISC

Ive gotten a few tax-filing questions regarding P2P lenders Prosper Lending and Lending Club. I finally got around to starting my taxes for the year as a results of my P2P Lending Experiment, and below are my notes. ...

Rule of Thumb: When To Pay Off The Mortgage Early

There was a lot of good discussion in my lengthy early mortgage payoff post. Now instead of lengthy details, let me try out a quick rule of thumb about early mortgage payoff. Recall from Wikipedia: A rule of thumb is a principle with broad application that is not intended to be strictly accurate or reliable for every situation. ...

Pay Off Mortgage Early vs. Save More For Retirement? Digging Deep Into The Details

In the world of personal finance, you can always generate a good debate if you talk about paying off your mortgage early. The argument usually boils down to something like this: If your interest rate is 4%, then paying extra towards that mortgage will earn you 4%. If you think you can earn more than 4% elsewhere, then dont pay off your mortgage. ...

Market Timing Is Hard: Actual Investor Returns Lag Fund Returns

When you look up the historical performance of mutual funds, you are typically getting what is called a time-weighted return. For example, the 5-year return is what you would have gotten if you bought the fund five years ago and held it continuously until today, all the while reinvesting dividends, with no additional purchases or withdrawals. But real life is different. ...

Jemstep Portfolio Manager Review

When I first reviewed JemStep in 2011, it analyzed your current portfolio and made customized mutual fund rankings. Flash forward to 2013, and they?ve moved into the portfolio management and advice space, similar to previously-reviewed sites like Betterment or Personal Capital. Now it's called Jemstep Portfolio Manager. ...

Basics of ETF Tax Loss Harvesting

Tax-loss harvesting (TLH) is a technique used to minimize taxes on your taxable investments without altering them significantly by harvesting capital losses during market declines. ...

Market Timing Prediction + House Payoff Focus

As you probably know, Im not an advocate of market timing. Jumping in and out of stocks is usually based on fear either fear of missing out on hot returns or fear of more losses. However, if youre going to do it, I figure you should announce your move beforehand, as opposed to making self-congratulatory pronouncements afterwards. ...

What's Inside the Vanguard Total Bond Index Fund?

The Vanguard Total Bond Market Index Fund is designed to track the entire spectrum of US bonds (well, those that are publicly-traded, taxable, and investment-grade). It is the second-largest bond fund out there, with $160 billion in assets and behind only the PIMCO Total Return Fund. It is available to retail investors as a mutual fund (VBMFX/VBTLX) or ETF (BND). ...

US Treasury Ends Paper Savings Bonds in 2012

According to a press release, the Treasury will no longer sell paper U.S. savings bonds through banks and other financial institutions as of January 1, 2012. You can still buy electronic savings bonds through TreasuryDirect.gov. I didnt see any news regarding the purchase limits changing. ...

Savings I-Bonds March/April 2012 New Rate Prediction: 2.21%

New inflation numbers for March 2012 were announced on April 13th, so its time for the usual semi-annual update and rate predictions. New Inflation Rate September 2011 CPI-U was 226.889. March 2012 CPI-U was 229.392, for a semi-annual increase of 1.1032%. ...

Found an Old Paper EE Savings Bond

Heres a blast from the past. I think I was reading an article about how savings bonds stop earning interest after 30 years, and so I asked my mom if she bought any bonds when I was born. I dont know why, I figured thats just what people did back then. It turned out she did, and the earliest bonds happen to stop earning interest next this month. ...

Potential Unique Advantages of Savings I-Bonds

Even though the current interest rates on Series I Savings Bonds arent much higher than other alternatives, these I-Bonds do have some unique characteristics that can keep them attractive. Inflation-Linked Returns Along with TIPS (Treasury Inflation-Protected Securities), these are the only investments you can make that are explicitly tied to a measure of U.S. inflation. ...

TreasuryDirect Electronic Savings Bond Purchase Limit Now $10,000 Annually

The Treasury announced today 1/4 that the annual purchase limit for electronic U.S. savings bonds bought at TreasuryDirect is now $10,000 per series, per person. Im not sure why they waited so long to decide this, given that its been six months since they announced that they would will no longer sell paper U.S. savings bonds through banks and other financial institutions in 2012. ...

Fidelity U.S. Bond Index Fund (FBIDX): Trying To Beat The Benchmark?

Since I am expanding my portfolio to beyond just IRAs and 401ks, I will need to move my more tax-inefficient investments like bonds into those tax-deferred accounts. This way, Ill put more of my stocks in a plain taxable account which is taxed at the more favorable long-term capital gains rates. Fidelity is my Solo 401k provider, so I was looking through their bond offerings. ...

Fidelity Drops Trade Commission Price to $7.95

Fidelity announced today that starting February 3rd, 2010, the price of all online equity trades through their brokerage would cost $7.95, with no limit on the number of shares. Previously, the commissions ranged from $8 to $19.95 per trade depending on asset value and trading volume. This is great news for my Self-Employed 401k at Fidelity. ...

Fidelity Offers Free Commissions on iShares ETFs, Make Your Own Free Portfolio

In addition to their new $7.95 per trade price structure, Fidelity is also waiving commissions completely for 25 iShares ETFs. This appears to be a partnership where iShares partially compensates Fidelity themselves for promoting their ETFs. ...

Emerging Markets ETFs: EEM vs. VWO Comparison

One of the hottest asset classes in 2009 by far was Emerging Markets, which includes stocks from developing markets like China, Brazil, Korea, Taiwan, India, and South Africa. Two of the most popular ETFs in this category are the iShares MSCI Emerging Markets Index (EEM) and the Vanguard Emerging Markets ETF (VWO). ...

Morningstar Lifetime Allocation Indexes

Morningstar recently started publishing their Morningstar Lifetime Allocation Indexes, which are designed as benchmarks for mutual funds that shift their asset allocation as a target retirement date nears. An example is the Vanguard Target Retirement 2045 fund (VTIVX), a buy-and-hold fund designed for those retiring around the year 2045. ...

Fidelity Portfolio Advisory Service Review w/ Actual Holdings

Have you seen those follow the green line ads from Fidelity? Well, they reminded that a reader sent me their retirement account holdings for review which was managed through the Fidelity Portfolio Advisory Service (PAS). This is a managed portfolio service, which means that you pay Fidelity a fee and they do all the research, selection, buying, and selling for you. Fidelity has two managed-portfol ... ...