From the monthly archives:

May 2010

For the average investor you can’t, and shouldn’t, think like a day trader. I am a youngish guy. I have a lot of time before I retire so my investing outlook is extremely long term. I put the majority of my funds into my 401k and my wifes Roth IRA as long term investments for our future. i am not a day trader, or really an investor by any means. I have only recently opened my first non-tax advantaged investment account. Even this one account is still a long term investment in my mind, I am not trying to turn a quick buck it is still a relatively long term investment for me.

What gets me is these huge swings in the market. Don’t get me wrong, they are real bad but how do they really affect your outlook. I had a conversation with a relative the other day about that crazy drop in the market that seemed to scare the pants off of everyone. He and I looked at it the same way. 1.) it was a fluke and 2.) we both missed out on an opportunity to make some quick money. While that was an exception this recent recession fits the same play for me.

Like I said I am still youngish so at this point it is actually beneficial for me to have the markets hitting new lows. Last time I checked it is better to buy things when they are cheaper an sell them when they are higher. Right? Sure you may have bought some of it back when prices were high but now they aren’t and you are still buying. At the height of the markets we saw the DOW reach 14,000+ which then dropped to 6,600ish. We all bled a lot during those months but for those of us who didn’t give up we were buying into a market valued at half of what it was. My confidence in the US economy is pretty high so to me this kind of situation is an unfortunate occurrence the presents unprecedented opportunity.

I know there is probably some people out there who disagree with my though process. They are probably much closer to retirement and lost a ton of money. That is why general wisdom is that the older you get the safer you make your investments. Moving more and more away from stocks and more and more into bonds. The idea here is to keep your money safe as it gets closer to time to need it. I won’t say I buy 100% into it but it makes good sense right. You don’t just want that money to be there when you retire, you need it to be there. The people whose retirements were hurt the most by the recession were those people closest to retirement who were riding the high of the market and not thinking of the possibilities. The biggest thing to remember about investing, saving, living, working, and any decision you make is to remember.. it depends. Everyone’s situation is different so don’t buy into the hype, or think because my neighbor is doing it it must be right. You need to do what is right for and comfortable for you.

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Some of you may remember my first foray into investing. It was an half thought out idea that was, in hindsight, quite stupid. As a result of that I have been working towards a more sane and economical approach to getting some non-retirement funds invested into the markets. I am by no means a day trader or speculator. I just don’t have the knowledge or expertise to start throwing wads of cash at individual companies. So my main goal was to find a company with some decent No Transaction Fee (NTF) mutual funds. Enter Scottrade.

About the Company

Since 1996 Scottrade has been offering online trading to its customers. With over 350 branch offices they are both an online and person kind of shop. As a discount brokerage with a focus for online investing they offer an easy to use online trading platforms for idiots like me. In addition to the simple platform they offer ScottradeElite for true active traders. I am no active trader so their simple interface is all I use. They also offer a mobile site, not to mention that they have local branch offices.

Why I Chose Them

I had initially decided to open an account with Sharebuilder because they had a good automatic investment “plan” that would automagically pull money from your checking account and invest it in your stock/fund of choice. The problem with that was every time I invested my $100 they were going to charge me $4. It was brought to my attention that No Load/No Transaction Fee fund may be the better option for investing minimal amounts of cash. Looking into it I found some decent funds on Sharebuilder but they all required at least $1,000 initial investment. Scottrade on the other hand only required $500 to open an account and their minimum initial investment for a NTF fund was $250. Obviously it works better for me and my piddly amount of cash to go with Scottrade.

Account Process

Opening an account with Scottrade was relatively painless. In fact it was a lot like opening an account an online bank. They ask you the basic kind of questions you would expect to see with your bank and then presto you have an account opened up. One thing was a little bit different was that you do have to pick a local branch who will then send you out some information as well as a request to send in a signature card. Unlike most online bank accounts you actually will have to send something back to them to get full access to your account, I can’t remember what you couldn’t do without one but it didn’t affect me directly.

Using the Account

Using the account was not quite as intuitive as I thought it could be. I had a little bit of a problem trying to find exactly what I was looking for. I wanted to find no load/no transaction fee mutual funds. I went to research and mutual funds but all it let me do was search by symbol. It took me a while to find the mutual fund screener which allowed me to locate no load NTF funds for sale at Scottrade, there were 2915. 2915 was a daunting thing to have to look at so luckily I knew approximately what the symbol was I wanted and zeroed in on my choice. Once I found the fund I wanted buying is was easy as pie. The only thing that I miss about Sharebuilder was the ability to automatically do the investing. I have to remember to go in and buy into the fund when my transfer hits.

So far I haven’t found anything that would make me want to jump ship. Their user interface isn’t the flashiest thing on earth, in fact it is pretty bland but it gets the job done. I have enjoyed it and they make the transfer of funds from bank to brokerage super easy, which is refreshingly nice.

Who do you use for your online brokerage needs?

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As many of you know from some my previous posts, I have started a side job doing web design/programming. A big part of what I am trying to get into includes WordPress support. I have been at this for a while and I have learned a lot about WordPress and theme customization. Specifically I have done a lot of work now with both the Thesis theme and Atahualpa. This work is evident in sites like this one based on Thesis, and mobiled-tailz.com which is based on Atahualpa. Whether you are just getting started with a self hosted WordPress install, moving hosting providers, or moving from Blogger or WordPress.com I can help you get through it. Working with websites and WordPress has become more than a hobby to me, honestly I would much rather be doing that then writing articles. If you need help with you blog or website drop me a line at kyle [AT] suburbandollar.com or stop by my business site SuburbanMedia.net

Now on to this weeks articles.

@MoneyCrashers wants to make sure you don’t let social media ruin your career. I agree with the author completely. People do not think enough about the implications what they post on Facebook. With their privacy policy constantly changing and according to some longer than the bible you never know where your information is going to end up.

@RJWeiss talks about 5 weird habits that can make you rich. The one of these habits that stuck out the most to me was the one about setting big hairy goals. Obviously I have a hard time setting goals that are hard. Just look at my goal meters over there in the sidebar, I hit those pretty early on this year. I need to sit down and come up with some big hairy goals that will really challenge my ability to save.

@InvestorJunkie says to leave investing to the professionals.  No problems with that statement here. There are too many variables I don’t understand in true investing. I currently hold an investment account where I have been buying into an No Transaction Fee index fund of the S&P 500. The costs are low because it is an index fund and I pretty much just ride whatever is going on in the markets.

@RevanchGS thinks late nights increase eating out. I would add to that that busy days equally increase eating out. It is just more convenient to eat out when you are up/out late or super busy. This can put a strain on not only your budget but your waist line so be careful.

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Sell Your Car Yourself, Screw the Dealership – Part 2

May 13, 2010
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Yesterday I talked about the old ways of selling your car on your own. While occasionally effective they don’t provide the best bang for your buck. With the advent of the internet there are many ways you can tap this ever growing population to not only list your car for sale but make sure it […]

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Sell Your Car Yourself, Screw the Dealership – Part 1

May 12, 2010
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Let’s face it, you aren’t going to get squat for your car at the dealership so the only way you can maximize your profit is to sell it yourself.  When I was getting ready to buy my wife’s new car we talked to the dealership and they were thinking $3,500 or less, we talked to […]

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