Apple Stock Paying Dividends

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Apple (AAPL) announced that after years of building up a massive pile of cash with its record earnings that it will begin to return some of that money to shareholders. Apple will pay a quarterly dividend of $2.65 per share starting in July. It will also repurchase up to $10 billion in stock over the next three years. So, what does this Apple announcement mean for the stock and for the company? Apple Dividend At first blush, Apple’s announced quarterly dividend seems very large. But, how much is Apple’s dividend? It works out to $10.60 per year. That’s higher than most companies pay out in dividends. However, remember that Apple’s stock price is much higher than most companies. The stock currently trades around $600 per share. That makes the dividend approximately 1.8 percent, which, while respectable, is nothing to write home about. Why did Apple announce a dividend now? There are several reasons that Apple has finally decided to start paying a quarterly dividend after refusing to do so for years. First, and foremost, is that Steve Jobs is no longer around. Apple’s iconic CEO had the street cred to tell people, “No dividend,” no matter how high the companies cash balance got without …

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PIMCO Equity Funds Win Again

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PIMCO is synonymous in the investing industry with bond mutual funds. More specifically, PIMCO is synonymous with Bill Gross and the PIMCO Total Return fund, which is the world’s biggest, and one of the best, bond mutual funds. However, PIMCO actually offers a full range of investment products, including equity mutual funds. As Reuters reports, PIMCO actually managed to win the best large company equities award from the Lipper Fund Awards. I’m not sure whether to mock Reuters for repeatedly using Pimco, when everyone knows it’s PIMCO, or if there is an AP Style rule I’m missing. Either way, the bond mutual fund giant won the award last year as well, marking two straight years at the top. Before you load all your money up into PIMCO StockPlus TotalReturn or PIMCO StockPlus Short Strategy fund, it is interesting to note that PIMCO’s funds of this nature aren’t very traditional. Rather than owning shares of publicly traded U.S. companies, these funds have a lot of investments in various derivatives and contracts. This allows PIMCO to profit from moves of a macro nature rather than being right about specific companies. There is an advantage to this form of investing. For example, if …

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Dow 13,000 What Does It Mean?

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As always, the mainstream media perked up about the stock market and investing world when the Dow Jones Industrial Average passed the made-f0r-headlines 13,000 level. The guys that write news story headlines love round numbers, maybe because everyone else does too. But, just like our infatuation with round number birthdays, such as turning 40, there is no real difference between Dow 12,956 and Dow 13,000, just like there is no real difference between being 39 and being 40 years old. Is Dow 13,000 Meaningful? The 13,000 number is purely psychological, but it does provide an opportunity to take a look at how the stock market and the economy are doing lately. First, and foremost, most storied correctly noted that this is the first time the Dow has managed to gain the 13 K level since 2008. That is significant for two reasons. One, 2008 basically marks the beginning of the stock market crash caused by the bursting of the housing bubble and the subsequent financial crisis, all of which triggered what has become known as The Great Recession. Two, it means that maybe some investors should be seeing a recovery in their portfolios. It is tempting to draw the conclusion that …

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2012 IRA Contribution Limits

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An IRA is an Individual Retirement Account. The IRA allows taxpayers to save money for retirement in a tax-advantaged manner. There are two types of non-business IRA accounts. With a traditional IRA, contributions are tax deductible for certain taxpayers. In addition, all monies within the account grow tax-deferred until withdrawal. A Roth IRA offers no deduction for contributions. However, the Roth account also offers tax-deferred growth. More importantly, money withdrawn from a Roth IRA account in retirement is tax-free. To prevent abuse of the powerful tax advantages offered by IRAs, the IRS limits the total allowable IRA contribution each taxpayer can make. In addition, there are income limits for tax-deductible IRA contributions as well as limits on high-income taxpayers making Roth IRA contributions. IRA Contribution Limits 2012 The 2012 IRA contribution limit is the same as it the 2011 IRA contribution limit. Taxpayers under age 50 may contribute up to $5,000 annually to an IRA account. Taxpayers age 50 and older may make an additional catch-up IRA contribution of up to $1,000, for a total IRA contribution of $6,000 each year. 2012 Roth IRA Income Limits Contributions to a traditional IRA are allowed for all taxpayers regardless of income. However, contributions are …

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Payroll Tax Cut Extended

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Yea! Just got news that Congress decided not to kill off the fragile economic recovery in the U.S., well, not yet at least. Congress has passed legislation that extends the payroll tax cut through the entire year. The tax cut was a 2 percent reduction in the amount of Social Security tax paid by workers. The employer part of the social security tax (and therefore a significant part of the self-employment tax) was not cut. However, this tax cut put additional money in the pockets of households across America. Letting it expire and seeing what happens when people suddenly realize their paycheck is smaller than they are used to would have been a big problem. Virtually every respected economist in the world warned that failure to extend this particular tax cut would have a big impact on the U.S. economy, perhaps causing the tepid growth to teeter, or plunge all the way back into recession. I’ll be back later with more details once I have a chance to comb through the actually bill on its way to President Obama’s desk.

Granite Credit Card Review

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Getting a credit card with poor credit is no easy task. Credit card debt is easily wiped away in bankruptcy. Furthermore, because most credit cards are unsecured, banks and card issuers have little recourse to collect the unpaid balance other than reporting negative information to the credit bureaus. People with poor credit aren’t as likely to see that as a motivation to pay up. Be sure to monitor your credit score on an ongoing basis so you know if it is getting better or worse. Residents of the U.S. can use online credit score reporting services like Credit Karma to monitor credit scores free. Check out the CreditKarma review here on Finance Gourmet for more details. Granite Card Review The granite Credit Card is available to residents of the UK who are not legally restricted from obtaining credit. The card is issued by Vanquis Bank, which bills itself as a financial institution that can help with credit repair. It is a Visa card which ensures wide acceptance at most retailers that take credit cards. As you might expect from a credit card for people with low credit scores, the Granite Card is not cheap. The variable interest rate is currently …

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Higher Tax Audit Chances?

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Shortly after publishing my post about your odds of being audited by the IRS, a reader sent me a message with a link to a CBS News article suggesting that your chances of being audited were actually much higher than previously thought. That is what the bold type headline screams, at least. In reality, if you read the entire article, you’ll find that the odds of triggering an IRS audit are pretty much right in line with what I said in my article. What this other news article points out is that there are ways for the IRS to contact you that aren’t really audits. If you include these not-audits in the count of actual audits, then you get, not surprisingly, a much higher number of audits. In particular, the article focuses on ominous letters that IRS sends out to taxpayers, which are very much not audits. In fact, the letters cited in the article are about as far from an audit as you can get. One of the letters informs taxpayers of a math error in their tax returns. This is not an audit. This is a notice that you messed up your math and therefore need to pay …

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IRS Audit Odds

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As tax season approaches, America’s thoughts turn to the required filing of income taxes. Theoretically, America’s tax system is a voluntary reporting system, however, that voluntary part is backed up by a pretty big stick, IRS audits. Odds of Being Audited According to IRS statistics, the chances of being audited by the IRS is about one in 100, or one percent. A deeper look, however, reveals the the IRS audits certain tax returns much more often than other returns. IRS audit statistics suggest that high-income taxpayers and those who own small businesses are more likely to be audited that middle and low income taxpayers who earn the majority of their income from wages and salary or brokerage-style investments. The reasons certain groups get audited more than others are two-fold. First, and foremost, there is more money to be gained by auditing higher income taxpayers. For example, consider a middle income wage earner, who is married filing jointly, bringing down a salary of $70,000 with no other income. Taking the standard deduction for 2011, of $11,600 for married couples filing joint, that leaves $58,400 of taxable income. Do the math and that taxpayer isn’t going to pay any more than around …

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Best Time to File Bankruptcy

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While there is never a good time to file bankruptcy, there are some things that make filing bankruptcy at a certain time more or less advantageous for the filer. Making sure you understand the various bankruptcy rules and timing a bankruptcy filing correctly can save you some time and money. Good Time to File Bankruptcy One of the things that trips many bankruptcy filers up, even after speaking with a bankruptcy attorney, is that the bankruptcy court will take 40 percent of your unpaid earnings. If you get paid once per month, this can be a very big deal. For example, if you get paid on the 30th of each month and you file your bankruptcy petition with the court on the 28th, you will have to pay almost half the amount of your pay check to the bankruptcy trustee. In a case like this, you would be much better off waiting the following month to file for bankruptcy. However, there is a catch. You don’t want to file too soon after being paid because the other thing that the bankruptcy court is entitled to is almost all of the cash in your bank accounts on the day you file. For example, …

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Meredith Whitney Muni Bond Defaults Fails to Materialize

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Remember Meredith Whitney? Right about now, she’s probably hoping you forgot. Whitney is the analyst who said, “There’s not a doubt in my mind that you will see a spate of municipal bond defaults…” She went on to say that there could be 50 to 100 sizable defaults or more and that those defaults would amount to hundreds billions of dollars worth of defaults. Municipal bond markets reacted by bidding up the yield for muni bonds. Most experts didn’t buy Whitney’s prediction. Even I wrote a 2011 article about how safe are muni bonds when people kept asking me about it. Of course, none of those stories was a big, inflammatory prediction of doom from a “name-brand” financial analyst. Analyst Predicts Muni Bond Defaults Wall Street and the financial markets are a very weird place. Preeminent analysts are created by making market calls or predictions that come to pass, especially when they make calls that no one else saw coming. Ironically, those same analysts aren’t necessarily held accountable when they make bad calls. Goldman Sachs’ Abbey Joseph Cohen made a name for herself by making ever higher market calls during the technology fueled stock market bubble of the late nineties. …

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