Is The Tech Bubble Worse than 2000?

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Mark Cuban made his fortune (well, his second bigger fortune) during the first tech bubble (some call it the internet bubble) when he sold Broadcast.com to Yahoo for $5.4 billion in stock. The real financial genius of Mark Cuban turned out to be not so much in the founding and selling Broadcast.com, but in quickly and effectively diversifying his investments (including all that Yahoo stock) before the bottom fell out of the internet bubble. Is 2015 a Tech Bubble? There have been a lot of people wondering for a few years now if technology is once again in a bubble. You’ve seen the big headlines, of course. Facebook bought Instagram for a billion dollars. Yahoo paid over a billion dollars for Tumblr (even though the company was probably quickly running out of money). These days, having a zero revenue company purchased for a billion dollars is commonplace. The idea is that somehow, someway, those users are worth money, even if the current company has no idea, or even plans, to make any revenue off of them. In many ways, this is like the stock market bubble that built up in the late 1990s, when any website was considered a good …

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What Is a Good Mortgage Rate Today?

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When shopping for a home loan, it can be tough to tell if a certain mortgage rate is good these days. The trick is that all matter of gobbledygook can complicate what you are looking at when shopping for a good mortgage rate. In fact, the mortgage companies and mortgage brokers have made it pretty hard to know exactly what is the best mortgage rate today, or any day. Lookup Good Mortgage Rates First, stop worrying about what the “best” mortgage rate is. Chances are that the best interest rate for your mortgage is different from someone else. This is due to differences in credit scores (check your credit scores for free with Credit Karma, or Credit Sesame), differences in home price, and differences in areas. Then, don’t forget that like anything else, the advertised price for a mortgage is only for a specific mortgage in specific circumstances. One of the few good things to come out of the Great Recession and the near-collapse of the banking system is the Consumer Financial Protection Bureau, or CFPB (who for inexplicably uses lowercase latter for their logo). The CFPB has been building out not only an enforcement division to help protect consumers, but …

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401k Fees at Supreme Court

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Somehow I missed this until today. The Supreme Court is hearing arguments regarding a new(ish) law about 401k plans. Under something called the Employee Retirement Income Security Act (one of the few legislative acts of recent years that doesn’t have a snappy acronym), a company that has a 401k plan has a fiduciary responsibility to employees in the plan. This means that the company must act in the best interest of the employees. As you can imagine, in U.S. courts this gets pretty nebulous, but it does set a standard. Supreme Court 401k Case In this particular case, the company, Edison International, has a 401k plan with six mutual funds that charge higher fees than identical options. In other words, the plan administrator, through incompetence, or for other reasons chose the more expensive options for the plan. Unfortunately, this is very common. Usually, this isn’t the company, or the HR person, deliberately trying to screw over the employees. Instead, what happens is a 401k company comes in and offers up some proposals. It will say something like, you can have a plan with these investments and it will cost this much, or you can have these other mutual fund investments and …

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When Can I Spend My Emergency Fund?

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Most professional financial advisors, and most non-professional know-it-alls as well, say that you should keep three to six months worth of expenses in an emergency fund for, well… emergencies. They aren’t wrong. You never know when life will throw you a curve ball, and when it does, you don’t want a few months of problems to turn into a crushing blow to years of hard financial work and smart decisions. However, the reality is that an emergency fund will never stand up to the worst financial calamities (long-term medical problems). Another reality that causes a lot of people stress is that your emergency fund is designed to be used. Over the course of your life, you fund will likely get drawn down, and then get refilled by more saving. Emergency Fund versus Reserve Fund When I was a professional financial advisor in Denver, I stopped calling it an emergency fund when people would find themselves torn about using it when they needed the money for something worthwhile. For example, imagine your son or daughter spent the last several years in the band. During that time, there have been numerous practices, and your child has built up a real love for …

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All Three Credit Reports Free

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Credit reports are a very important, and very frustrating part of personal finance. Nearly all financing requires a credit score, which is generated from the information in your credit report. However, you get no say in what is in your credit report. In fact, with one exception, you have to pay money if you even want to see what your own credit report says about you. Seems unfair? Blame the millions of dollars the finance industry spends on lobbying and the politicians that care more about where their next campaign contribution comes from than about what is right for the American citizens they supposedly represent. There are various services springing up to help fill this gap, but they all come with the potential for scams and abuse. You can get a free credit score from Credit Karma, or Credit Sesame, and you can buy a credit score from myFICO, but none of these come with full access to all three credit reports. Free Credit Scores Website The one (and only) thing the government has ever required the credit bureaus to do is give each person free access to their credit report, but only once per year. To comply the three …

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What Is Bitcoin Is It Worth It?

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bitcoin investing

Bitcoin is a topic that pops up in the news every now and then. It’s also the kind of thing a freelance writer with ADD might get distracted by when he was supposed to be rebuilding the content on an old website. In fact, he might feel guilty for spending so much time looking into it that he would have to write several articles about Bitcoin as a way to make it seem more like work. * Ahem. * What Is Bitcoin? Explaining Bitcoin is a little bit tricky. In essence, Bitcoin is a digital currency. There are no actual coins, only computer data. In many ways, this is not unlike most of the US currency, which exists electronically on bank computers and balance sheets, not in stacks of hundred dollar bills in the basement of GE headquarters. Bitcoin has no intrinsic value. That is, that there is no organization or group that gives it a value. Instead, it is simply a means by which bitcoins are generated in a limited supply. Like anything else, supply and demand can set a price for Bitcoins in other currency, including US Dollars. How you convert Bitcoins to Dollars is that you find …

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Social Security If Still Working

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Social Security is a supplemental retirement income program run by the federal government. The idea is simple. While you are working, you pay money into the Social Security system in the form of FICA tax. When you retire, you get a monthly income check from the Social Security system. Social Security is full of political controversy, and we aren’t interested in that here. This is about personal finance and your actual retirement plan, not about what should or should not be according to someone. Social Security While Working Once upon a time, 65 years old was the mandatory retirement age in many fields. In addition, most people didn’t live much past 65. These days, plenty of people live long past 65 years old, and plenty of people also work long past the age of 65. This introduces some new wrinkles to the Social Security program. First, with people living longer, Social Security was paying out more benefits than it used to. So, Congress passed a law that changes the retirement age for Social Security. If you were born between 1943 and 1954, your full retirement age is 66 years old, not 65. You can start collecting Social Security retirement benefits …

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What You Need To File Your Taxes

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If you are an American, chances are you have started receiving tax forms and reports from various companies. Recently, many companies, banks, brokerages, mortgage companies, and charities have started providing tax reports and forms electronically. Ironically, you may get a notice in the mail from these entities telling you that you will get your tax documents electronically. Forms Required to File Taxes Exactly which forms you need to file your income taxes depends upon your individual tax situation. People who own their own business have more tax forms they need. Likewise, people with more deductions, or various financial vehicles such as trusts require additional documents as well. If you have any financial accounts or situations that are not “standard” you’ll need to check with an accountant or tax professional to find out what is required for you to file you taxes. Employed by an Employer If you, or you and your spouse, are not self employed, then you will need a W2 Form from your employer to file your taxes. The W2 form lists several numbers including your total wages for the year, as well as various contributions to things such as 401k plans, or cafeteria accounts, or pre-tax insurance …

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Why Cheaper Oil Hurts Stocks

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There is a lot of new lately about lower oil prices hurting the stock market. This comes as a shock to casual investors who are used to HIGHER oil prices hurting the stock market. If lower oil prices are good for consumers, and the consumer drives the American economy, then why would lower oil prices hurt stocks? Short-Term Stock Price Movements First, never forget that short-term stock price movements are much more about speculators maneuvering for quick profits than about the actual value or prospects of the stocks in question. One way to calculate a company’s value is it’s market capitalization which is the number of shares outstanding the company has times the company’s share price.  As I write this, for example, IBM has a market capitalization of $154.76 billion dollars. However, it’s stock is down approximately $3 per share from yesterday. That means that, theoretically, the company was worth $157.85 billion dollars yesterday. No matter what the price of oil is, there is no way that anything changed enough to make IBM worth $3 billion dollars less than yesterday. Short-term price fluctuations are the result of supply and demand. And, since a large majority of daily trades are actually between computers, …

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How To – Refinancing a Home Mortgage Steps and Tips

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When considering refinancing your home mortgage, the first step is to get all of the details on what you have now.  Sure, you have vague numbers in your head, but that won’t help you answer all of the loan application questions, or make a real hard-numbers based calculation about the value of refinancing.  What exactly do you need to know before you dive into looking for low interest rates and refinancing your mortgage? Required Information Before Researching Interest Rates and Refinancing Current Balance of Home’s First Mortgage – Not a ballpark, an exact number according to your last statement. Current Balance of Home’s Second Mortgage or HELOC – Again, the number from the last statement. Current Interest Rate – What are you paying on your mortgage right now? ARM or Adjustable Interest Rate Features – When does your rate go up? (The actual date, not just the year.)  How much can it go up in the first year?  The second year?  Each year after that?  Is there a floor (minimum)?  Is there a ceiling (maximum)? When Did Your Mortgage Start? – What day did you close on? Current Home Value? – Check Zillow and Trulia to get a ballpark.  Print …

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