money making strategies

8/14/2019 Money Making Strategies

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There has never been a time in American his-tory when individuals have been moreinformed, more empowered, and more "in themood" to take charge of their personalfinance and investing success than now. Thesuccess of the stock market, the rise of theinternet, and the mainstreaming of personalfinance as a polite topic of conversation at

dinner parties have all contributed to thiswonderful trend.

The driving force behind this occurrence isaccess to information. Never before has theindividual investor or the household moneymanager had such low-cost access to suchhigh-quality information. This trend is spear-headed by our partners, the publishing com-panies you'll find featured in 101 MoneySecrets. They have invested and continue toinvest untold billions of dollars to ensure thateach of us has the opportunity to get world-

class personal finance and investing informa-tion, analysis, and advise on a regular basisand in a timely fashion.

We would like to thank them for their pastand future success in making this informationavailable to the American reading public, andfor their participation in bringing 101 MoneySecrets to you.


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Our sincerest thanks to the publishers of:

Bloomberg Personal Finance

Business 2.0Business Week Consumers Digest

Family MoneyForbesIndustry Standard

Kiplinger LetterKiplingers Personal Finance

Kiplinger Retirement ReportKiplinger Tax Letter

Morningstar FundInvestorMorningstar StockInvestorOnline Investor

Red HerringSmart Money

Technical Analysis of Stocks & CommoditiesUpside

Worth

Your Money

and all of our other partners. It is theirtalentand dedication to the mission of providing thisinformation to the American consumer thatmakes our work possible.

Prosperous reading...


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Table of Contents

Stock Market How-tos . . . . . . . . . . . . . . . . . 6

Mutual Funds . . . . . . . . . . . . . . . . . . . . . . . .16

Internet Economy . . . . . . . . . . . . . . . . . . . . .20

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

Retirement . . . . . . . . . . . . . . . . . . . . . . . . . .27

Startups & IPO . . . . . . . . . . . . . . . . . . . . . . .32

College Savings . . . . . . . . . . . . . . . . . . . . . . .33

Home Financing & Borrowing . . . . . . . . . . .35

Tax-savvy Investing . . . . . . . . . . . . . . . . . . .37

High Tech Investing . . . . . . . . . . . . . . . . . . .39

Career & Salary . . . . . . . . . . . . . . . . . . . . . . .42

Global Investing . . . . . . . . . . . . . . . . . . . . . .43

Telecommunications . . . . . . . . . . . . . . . . . . .46

Major Purchases . . . . . . . . . . . . . . . . . . . . . .47

Biotech & Health Investing . . . . . . . . . . . . .50

Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . .52Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53

Sports & Leisure Investing . . . . . . . . . . . . . .54

Manufacturing . . . . . . . . . . . . . . . . . . . . . . .55

Commodities . . . . . . . . . . . . . . . . . . . . . . . . .56


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Anticipate rate increases with these indices

Wouldn't it be great if you could read AlanGreenspan's mind? Follow the NationalAssociation of Purchasing ManagementProduction and Price indices, and youll get ahandle on what the Federal Reserve Bank is goingto do.

Values above 50 in these indices mean productionand price increases are speeding up; below 50,that they're slowing down. Whenever both haverisen above 60 at the same time, the Fed chair-man has responded by raising the discount rate.


Simple questions help investors pick winners

Confused by all the factors that others use to pickstocks? Simple screening techniques involveYes answers to questions like these: Does thecompany have a strong brand position within agrowing industry? Is the company gaining or atleast maintaining market share?

Other questions include whether the company'sstrategy makes sense, and whether it's focused ona single set of products and services.

Kiplingers Personal Finance


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Keep up with whisper numbers on the Web

Shhhh! Here's a tip to keep to yourself. Now youcan get a sneak peek at the whisper numbersinsider estimates on corporate earnings thatcan have a dramatic effect on the market.

Several websites, such as whispernumbers.com,earningswhispers.com, and streetiq.com, offer the

general public a look at what Wall Street insidersalready know. Since stock prices can turn onthese numbers, it pays to be in the know.

Online Investor

8

Ride safe with convertibles

Still searching for the silver lining in the technolo-gy sell-off cloud? Try looking into convertiblebonds. Converts are a higher yield over the stockand a more senior claim on assets in case ofbankruptcy; you get equity exposure withoutundertaking the full risk of a common stock posi-tion.

A convertible slides toward either the stock or thebond side. When the underlying common rises, ittrades more like stock, and its fixed-income char-acteristics become less important to its value.

Forbes


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Winning tech stocks tackle impossible jobs

Even if you're wary of the Net stock bandwagon,experts say you should try to keep about 30% ofyour portfolio in tech. One of the pros tricks forpicking tech stocks is to choose those withbusiness models that could never have beenachieved without the Net.

Stocks like eBay, for instance, allow a collabora-tive integration of previously impossible or difficultthings. Another tip: pick Net companies with themomentum of sales growth beating the momen-tum of expense growth.

The Industry Standard

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Warning: Steer clear of stock fraud

Unscrupulous scoundrels are out there to takeadvantage of investors. Peruse issuers public fil-ings and find the red flags: stock issued via war-rants, convertible debt, or bridge loans that con-vert to stockvisit the Edgar database at sec.gov.

Also, whenever you deal with new brokers, besure to ask for their personal, and their firms, dis-ciplinary records. Be skeptical, and check out pro-moters who boast stocks cheaper than $5 a share.



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Volume is as crucial as price in market watch

Although pricing data is the most commonly-usedindicator in analyzing stocks and the market,there's another, independent indicator that shouldbe used to confirm price action. Volume isextremely useful for such indications as animpending bear market.

Normally, volume rises with prices. However, ris-ing prices and falling volume, or falling prices andrising volume, are clues that the market is aboutto take a dive.

Technical Analysis of Stocks & Commodities

10

Stop yourself from making buy, sell mistakes

If you're unsure about your buying and sellingskills, as many investors are, try setting some lim-its for yourself. Use stop orders to be satisfiedwith 10-15% gains and similar losses.

This kind of self-discipline prevents you frompanic selling, and most particularly from having toworry about when to get out of a losing positionone of the hardest things most investors have todo.

Online Investor


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Standbys are essential for secure success

Dotcoms will continue to come and go, so it pays(literally) to keep a diverse portfolio. Holdingshares in financials, consumer goods, and phar-maceuticals will keep you financially dry when itrains on the Wall Street tech parade.

Investing in one of these indices can help smooth

out the peaks and valleys in a portfolio. The Kiplinger Letter

11

Get on the right path with a good tracker

Checking the markets in the newspaper limitsyour info. Use a Web-based tracker to checkyour investments. Sophisticated trackers helpyou keep a handle on your asset allocation; trackyour capital gains; alert you to buy or sell; andeven allow you to easily copy your portfolio.

You will also be able to record all your invest-mentsstocks, funds, and cashand display themon the screen.

Online Investor


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Buy from both ends

Truly conservative investors take the path of leastrisk. Check out the routes you typically leaveuncharted, and devote at least some money tomore growth-oriented companies. Covering allyour basesplaying truly conservativewill cer-tainly benefit when the road gets rough.

Keep the bulk of your assets in a laid-back portfo-lio and put a sliver in a more-aggressive group ofstocks.


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Trading workstation can make decisions a snap

Do you need your trading decisions to be simpleand direct, with real-time market information toback them up? Check out ProphetStation, anew screening workstation that's fast, flexible,and above all, easy to use.

ProphetStation (prophetfinance.com) boasts strongcustomer support and is altogether an excellentoption for online traders who base their trading on

simple principles.



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Stock analysis is easy as 1-2-3

The basics of stock analysis aren't hard to master if you know what they are, and where to getthe information. The first question you should askis What does the company do? Look at theshareholder letter in the annual report, andyoull get the answer.

Question #2 is,How fast is the company grow-ing? The answer lies in the income statement inthe quarterly and annual reports.

Morningstar Stock Investor

13

Know thyself: Trade when you're at your peak

Traders who hit the markets on a bad day areheaded for disaster. Among the questions youshould ask yourself before trading every day isCould I concentrate on a game of chess to beata strong opponent right now?

If the answer is no, you're not ready to competewith the big boys in the market today. Other fac-tors that effect trading performance are recentwins and losses, and whether you've been follow-ing a good trading plan in making those trades.



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Accounts receivable hold clue to success

Looking for the truth in a maze of high-tech start-ups and upstarts? Find out where the bodies areburied by taking a look at quarterly balancesheets, in particular accounts receivable.

Divide receivables by average sales per day todetermine how fast a company collects. A good

number, like Microsoft's, would be about 45 days.Taking more than six months to collect is badnews.


14

Time to ease out of tech and into bonds

With certain corrections going on in the market, itmight be a good time to consider scaling back thepercentage of your portfolio that's in tech stocks.Instead, consider buying high-quality bonds,which may well outperform the average stockbetween now and the next recession.

When growth slows and interest rates drop again,bond prices rise. Also, the U.S. Treasury's plans tobuy back most of its outstanding debt are causinglong-term Treasury bonds to soar.

Your Money


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Day-trading pros must pick professional venue

Serious day-trader wannabes must find reputable,quality off-floor venues where they can ply theirtrade. One crucial thing to look for in a compa-ny is a cost to you of one and a half to twocents per share and no more.

Keeping your trade costs down is crucial becauseprofessionals know that even the best tradershave good years and bad months too. Any firmthat relies on the current hot market streak andgouges you for more isn't a place you want totrade.


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Selling is such sweet sorrow

Although you should know when its time to sell,being overprotective and watching your stocksevery move is not the way. Review annuallyand set up an early-warning system. If youreview more often, youre probably not givingsome stars a chance to shine.

Scheduling a December review will allow you tomatch gains with losses for tax purposesjust intime for tax-planning season.



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CEOs welcome investors to the conference room

Companies are understanding that their needscoincide with investors and are making efforts tobe more personal. Visit a corporate website andaccess everything from the latest figures toexecutive speeches. Learn what institutionalinvestors know, and possibly figure out somethingthey havent!

The Securities and Exchange Commission wants tochange the rules of disclosure, proposing thatlarge and small investors receive information atthe same time.


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Stay on top of overlaps

Are you building your portfolio for diversity? Areyou sure youre not sabotaging yourself? Makeinformed decisions when you diversify.Overlaps could creep up and undermine yourefforts; funds that have a lot of overlap move upand down together, causing too much exposure toone sectorand thats risky business!

Know how funds fit into your overall portfolio.Theres software available to help you reduceoverlaps.



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Fly high with mid-caps growth

Although they struggled getting off the ground inlarge-cap-dominated 1997 and 1998, check outmid-cap growth funds. They grew 65% lastyear, and have been soaring ever since. Expecthigh volatility; the average fund in this group ded-icates more than 43% of assets to the technologyarena.

Check out MAS Mid-Cap Growth (MPEGX), InvescoDynamics (FIDYX), and Janus Enterprise (JAENX):

just to name few options in this category thatmight suit your needs.

Morningstar FundInvestor

Dont bank on sto cks staying down

The best thingsincluding big payoffscome tothose who wait. Buy bank stocks, even thoughthey may be seemingly beaten. Their profitscontinue to grow, modestly at the very least,regardless of climbing interest rates.

An exercise in patience is in order: be prepared tohold your shares until interest rates stabilize, andready to profit when bank stocks rebound.

Morningstar StockInvestor


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ETFs let you get in and out of funds quickly

Believe it or not, there is a way to get stock mar-ket thrills in your fund investing. Consider anexchange-traded fund, which mimics the per-formance of the major indexes and whoseshares can be actively traded.

One such fund is Qube (QQQ), which follows the

Nasdaq-100 index. Recently-launched funds suchas iShares from Barclays track the S&P index andnew offerings from State Street and Merrill Lynch.


Beware media-crowned fund gurus

When you're investing in mutual funds for thelong term, don't be dazzled by the fund guru ofthe moment. Instead, trust your money withless famous managers who have long-termrecords of steady, above-average results.

These managers tend to have an understandablestrategy and stylethey should be able to explaintheir strategy to an eighth-graderwhich is lessvolatile and easier to stomach than those of morehigh-profile managers.

Family Money


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19

Why are municipal bonds in trouble?

Bad news: E-commerce mania may be eroding thecredit quality of your municipal bond portfolio.Protect yourself by getting out of issues thatare backed purely by sales tax revenue it'sone of the top three sources of revenue for states.

The problem is that if traditional retailers suffer

under the tax-free e-commerce boom, there is lesssales tax to service your muni bond interest andprincipal payments.

Forbes

Large-cap fund allocation is key to the future

Traditional thinking tells us that your fund alloca-tions should lean toward small-cap companies,which have a better performance record thanlarge companies. Forget that old thinking andbuy large companies that can get larger byexpanding globally.

In today's economy, the winners of the nextdecade are those who can tap a viable marketoverseas as well as top the charts at home. In thefuture, well look back and think mere nationalbrands were, well, quaint.

Your Money


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Try these no-fail tips for picking funds

Don't be fooled by the current hot economy whenputting your money into mutual funds. Amongthe best tips for picking funds that are right foryou is checking a fund's long-term perform-ance, preferably over 10 years.

Don't chase recent hot performances, and makesure it's the current fund manager who achievedthat performance. Also, consider the fund's aver-age portfolio turnover rate during the past threeyears high turnover leads to higher brokeragecosts and tax liabilities for shareholders.

Your Money

Sell? Hold? What to do with that fund?

If you're not sure whether to dump or keep amutual fund, consider these tips from "The NewCommonsense Guide to Mutual Funds" by Mary

Rowland: Do sell if the fund switches assetclasses (small-cap to mid-growth, for example)and you already own a fund in that area.

Don't sell because the market has declined; expectups and downs. Do sell when a successful portfo-lio manager leaves, but don't sell on impulse.Instead, compare your fund to others in its assetclass and with its corresponding index, such as theS&P 500.

Ladies Home Journal


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21

Gourmet e-tailing could be wave of the future

Looking for the next big thing on the Net?Consider the future of specialty retailing, whichavoids the razor-thin profit margins of massmarketing, and is capturing the attention ofinvestors everywhere.

Specialty ventures selling everything from jewelry

to high-end sports apparel have big margins,more efficient marketing, and more long-term sta-bility than mass-market retailing.


E-banks are a good bet for the future

E-trading is hot, but what's the next big thing?Online banking is the Internet's sleeper indus-try, with projections of $39.5 million in annualrevenues in 2002, compared to e-trading's $5billion.

Unlike trading, banking is something everyone hasto deal with sooner or later. The best bets arebrick-and-mortar banks that offer online banking;they have an existing customer base, a recognizedbrand, and an established track record to attractneeded capital.



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Hot startups eye small-business online barter

Barter has long been a good way for small busi-nesses to stretch scarce resources. Now there's anew breed of b-to-b e-commerce startups trying touse the Web to make barter a key tool for millionsof small businesses.

Companies like Lassobucks.com, BigVine.com,

and BarterTrust.com have a long way to go yetwith this brand-new business model, but venturecapitalists are jumping on the bandwagon.

Red Herring

Bye-bye ERP companies. Make way for ASPs!

The end of huge sales and double-digit revenuegrowth may be in sight for enterprise softwaregiants like Oracle and SAP. Instead, companiesrenting out networking apps via the Net arepoised to take off.

New companies like Asera and BreakawaySolutions, and divisions of AT&T and EDS, arecalled ASPsapplication service providers. Rentingsoftware applications lowers up-front costs andsupport costs for corporations, and negates theneed for costly server hardware.

Forbes ASAP


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Online ballot box gets votes for hot Net newcomer

Looking for an industry that could consist of sever-al multi-billion-dollar markets? Consider online

voting companies, the first voting method everto substantially increase voter participation ina statewide election.

Election.com is the most prominent of such com-panies, including Voter.com and Grassroots.com,and has partnerships with companies like VeriSign,iVillage, and Cisco, as well as almost $10 million infirst-round funding in anticipation of an IPO.

Red Herring

Wireless Web challenges traditional portals

Powerful Web portals like Yahoo have become theblue chips of the Nasdaq, but that could changesoon. With the rise of the wireless Web, telcocompanies like Sprint can offer their own por-tal to the Web and Yahoo need not apply.

Gartner Group predicts that in three years, morethan one billion mobile phones will be in use toaccess the Net, and none of those users will berequired to enter via AOL, Yahoo, or any other tra-ditional portal.

Forbes.com


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E-biz relies on ERP consulting but not the usualsuspects

The big business of e-business isn't platforms,tools, or apps; its consulting services. But it's notone of the big five, like KPMG Consulting orAndersen Consultingin which you should beinvesting. Try newcomers like Scient, Viant, andBreakaway Solutions.

These companies offer flexibility, speed, customperformance, and deep accountability; they'vesteadily eroded the client base of the big five ERPconsulting firms.

Upside

Supply chain management is about to get sexy

Now that e-tailing has taken off like a rocket,what's next? Supply chain managementcom-panies that can help all those busy e-tailersactually fulfill the orders they receiveis a hotnew sector to be in.

With e-tailing growing, and fulfillment proving tobe the weak link, anyone who can help preventdisaster is in big demand. This includes everyonefrom outsource specialists like UPS and Fingerhutto Yantra, a company that makes fulfillment soft-ware and lets e-tailers build their own virtualwarehouses.

Upside


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Catalog-to-Net is route to e-tail success

Trying to figure out the eventual winners and los-ers in the e-tailing feeding frenzy? Definite prof-itability is emerging for catalog companies thathave gone online, while very few pure-play e-tail-ers are making any money.

Catalog retailers have long been direct-marketing

experts, and e-tailing is nothing if not pure directmarketing. Better still, online activities can actual-ly boost revenues for off-line operations, since thenumber of catalogs that must be mailed is drop-ping dramatically.


ECredit holds B2B Net commerce in its hand

The hot new business-to-business Internet econo-my is opening a window for a new application tobe the Microsoft Word of B2B. ECredit, a compa-ny which automates the all-important creditprocess in B2B transactions, has the potential tobe integrated into every business exchange on theNet.

ECredit has created a complex database that man-ages credit approval by connecting with majorcredit bureaus. Online credit is considered the keyto making a success of any B2B e-commerce busi-ness.

Red Herring


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Check out a real estate partnership for gain

Real estate investment trusts have stumbled lately,but tread carefully when looking for an invest-ment alternative. Real estate partnerships, alsoknown as syndication, are one option if youtake certain precautions.

Partnerships have a troubled history for a reason,

and it's important that you know the potential pit-falls, such as a variety of fees, illiquidity, pricing,and risk.

Forbes

Adult ed becoming high-growth business

An overlooked segment of America's gross nation-al product is experiencing a huge upsurge.Continuing adult education is the wave of thefuture, with Americans spending some $1 trillioneach year on education and training.

This boom is also fueled by profound changes insociety; as technology and the knowledge econo-my grow, so does the need for continuing educa-tion. Companies like Sylvan Learning Centers,Apollo Group, and Learning Tree Internationalhope to benefit in a major way.

Forbes


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27

Online banks eye new profits south of the border

There's a new market just waiting to be won overby online finance companies. Latin America hasone of the fastest-growing online populationsin the world, and it's ripe for online bankingbecause of the poor service provided by tradition-al financial institutions there.

Companies like Miami-based Patagon.com shouldeventually make huge profits providing onlinefinancial services, especially now that venture cap-ital is becoming more available for Latin Americanstartups.


Bn.com could be sleeper success story of the Net

Don't write off venerable bookseller Barnes &Noble as simply a footnote in the history ofAmazon.com. Wall Street is enthusiastic aboutthe future of the company's Bn.com, with someeven rating it a long-term buy.

Barnes & Noble plans to be much more thanAmazon.com; it's got plenty of cash, good man-agement, and a well-known brand; and it has nolong-term debt. What's not to like? In fact, it's abargain compared to Amazon.

Upside


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28

Traditional retailing holding its own againstthe Net

Think e-tailing is the wave of the future? Real-world retailers are still making the bulk of theworld's retail sales. Computer hardware andsoftware vendors will be the hardest hit by agrowing e-tail market.

Conventional retailers will have to add an Internetpresence to their efforts, but retail sales on the Netwill still only total a modest 4% of overall sales inthe next four yearsso don't dump your Winn-Dixie stock just yet.

Red Herring

Youre ready to retirebut are you prepared?

When youre facing a constant barrage of credit-card finance charges, it can be hard to contributeto your retirement account. Consolidate high-

interest credit cards into a home equity loan .Youll be able to reduce your debt and save forretirement at the same time.

If you wrap up credit-card debt into a loan thatrefinances your house, consolidate any remain-ing debt on cards with lower rates.

Business Week


29/57

29

Dont get 401 KOed!

Cashing out your retirement plan can leave youdown and out a lot of money. Keep your 401(k)intact with your former employer when youchange jobs. Youll allow more money to accrue,instead of paying penalties and extra incometaxes earlier than necessary.

Be sure to understand your companys matchingpolicy. The company 401(k) match plan is possi-bly the closest most of us will come to freemoney!


Profit on the IRA fast track

The amount of money in IRAs has more than dou-bled since 1993 to $2.1 trillion, and less 5% hascome from new contributions. Contribute up to$2000 to a Roth IRA and cash in on the bestsavings opportunity around. Youll earn moremoney for your retirement, and be able to with-draw it tax-free!

IRAs are no longer parking spaces for money;theyre the fast lane to wealth on the financialhighway.



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30

Bond portfolio beats funds for retirement

Shop around for bonds for retirement cash. Ifyou're a buy-and-hold investor with at least$50,000 to invest, a portfolio of high-qualitycorporate, Treasury or municipal bonds is prob-ably your least-expensive option.

Mutual funds offer one-stop diversification, buttypically cost much more to maintain than a port-folio of bonds. For instance, until you own morethan $100,000 in Treasury bills and notes, it won'tcost you a dime to manage them through the gov-ernment's Treasury-Direct program.

Kiplingers Retirement Report

Retire from your 401(k) years

If retirement doesnt turn out to be the NormanRockwell scene you imagine, try becoming a con-sultant. Youll be able to use your experience, stay

active at your own pace, and earn some extramoneywithout all the grief!

Would-be retiree consultants should polish theirneglected skills, such as typing, or learn new skills,such as managing an e-mail account. Look intoagencies like IMCOR and New Yorks ExecutiveInterim Management that match retirees and tem-porary assignments.

Business Week


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IRA-to-Roth conversion raises taxing questions

The creation of the relatively new Roth retirementplans raises the question of whether you'd be bet-ter off converting that old IRA. The question is:would you be better off paying taxes on yoursavings now or later?

If you expect to be in a higher tax bracket when

you retire, then it makes sense to convert and paytaxes now at the lower rate. If you expect to bein a lower tax bracket upon your retirement, itsbest if you dont convert.


Retirement savings should combine with taxplanning

One of the keys to a solid retirement plan is tointegrate your tax and investing plans. Keepincome-generating investments in tax-deferred accounts, and keep aggressive invest-ments outside those accounts.

You should also employ trusts, foundations, andpartnerships to save on taxes as part of yourestate planning, and take advantage of everydeduction available to you, including prescribedvitamins, home-office deductions, and even homecomputer costs, if you use it to track your owninvestments.

Your Money


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Avoid Social In-Security

The decision about when to start collecting SocialSecurity benefits can mean the difference betweengetting the most out of the systemor leavingmoney on the table. Wait until you turn 65 tocollect social security. Youll get the full benefitscalculated on your lifetime earnings.

Under the new Social Security schedule, whichgoes into effect this year, retiring at 62 will costyou 20.83%a bite that will climb, in stages, to30% by 2022.

Business Week

Dont corner your retirement in your company

Professional money managers wouldnt dare stufftheir portfolios with one stock, but 401(k) investorsdo it all the time. Avoid heavy doses of compa-ny stocks. Keeping company stock between 5%and 10% of your 401(k) holdings can be morebeneficial!

Unless it can show compelling reasons for doingotherwiselegallya corporate pension plan canonly invest 10% of assets in its own company.

Family Money


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Portable processor could be a huge tech hit

On a few historic occasions, high-tech companieshave placed enormous bets on technology thatcould transform an industryfor instance, theMacintosh. The next such historic winning betcould be Transmeta's Crusoe, a microprocessorfor portable computing devices.

Handhelds and cell phones are considered thenext big hardware wave, but they won't go any-where without a standard platform, whichTransmeta believes it can develop.

Red Herring

These brokers let individual investors in on IPOs

Most brokers require huge balances$100,000 ormorefor investors to get IPO shares on releaseday at the offering price. Now some firms are let-ting less high-rolling investors in on the deal,including e-trade (etrade.com), FBR InvestmentServices (fbr.com), and Wit Capital(witcapital.com).

Dutch auctions and lottery systems are among themethods used to allocate the shares, and youdon't have to be Warren Buffett to be eligible.

Online Investor


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Find the financial planner who's right for you

No matter how modest your portfolio, sometimesit pays to spend money getting a pro's help inmanaging it. First, decide what your specialneeds are, then find a financial planner whospecializes in your area such as college sav-ings, retirement, or single parents' finances.

You can start your search with groups such as theNational Association of Personal FinancialAdvisers (888-333-6659; napfa.org) and theFinancial Planning Association (800-282-7526;fpanet.org).

Consumers Digest

Higher education cost-shortcuts

Take advantage of the change in next years capi-tal gains taxes. Give stock to your children inschool now for next years tuition, assumingyoure too affluent to receive financial aid. Yourstudents will pay capital gains at an 8% rate.

A couple can give someone up to $20,000 a yearwithout incurring gift-tax liability. BeginningJanuary 1, 2001, for taxpayers in the 15% taxbracket, the capital gains rate will fall from 10% to8% for assets held for 5 or more years.

Forbes


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35

Save college fundsand some taxes!

Finances for higher education could be just a stateaway. Save money for college in a state-spon-sored college-savings plan. Your savings will geta boost because it will grow tax-deferred until itsused for college; then the earnings are taxed inthe students tax bracket (usually 15%).

This year, 14 states have added new plans, andsome existing plans have waived fees, reducedpenalties, and expanded tax breaks. Luckily, 24state-run savings plans are now open to anyUnited States resident, and all allow you to useyour money to pay expenses at any accreditedcollege in the U.S.


Finding the way to your childrens education

The biggest asset when it comes to financing yourchildrens education may not be your income,investments, or home equityit just may be yourchildren! Search near and far for scholarshipmoney. Youll find local chapters of fraternalorganizations like the Kiwanis Club, and nationalcompanies like Coca-Cola, offer scholarships.

National databases rarely list local awards, so find-ing them often requires old-fashioned page-turn-ing. Begin your scholarship search in the highschool guidance office.

Family Money


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Good lending sites make mortgages painless

Mortgage lending sites abound on the Web, right?Yes, but it's still a tricky proposition, so use siteslike Quickenloans to find the best rate, andthen contact the lender directly.

No site can tell you exactly what your rate will beuntil your credit history is factored in, and youdon't want to give such details immediately. UseQuickenloans (quickenloans.com) to find a varietyof products, get live telephone support, and makethe most of Web lending.

Forbes.com

Pay student loans slowly to maximize savings

So you're saving to buy your first home, but thosepesky student loans are hanging over your head.Don't spend your money paying off those loansearly unless your total debt is more than 36% ofyour monthly income.

Mortgage lenders typically only look at monthlycash flow in determining how much to lend, sogetting those old student loans out of the waywon't really help, and it might slow you down inreaching your down-payment goal.

Online Investor


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Find your way home with MAP100

Prospective homebuyers often tap into their401(k)s when they need cash for down payments.Looking for another option? Ask your employerabout the Mortgage Acceptance Program(MAP100). If they offer MAP100, youll be able toget a no-down-payment mortgage from an out-side lender at lower rates than youd normally payfor such a loan.

With MAP100, you can keep your 401(k) savingsintact and save yourself the worry of a loan com-ing due if you lose or switch your job.


Don't pay cash, get a mortgage for empty nest

Thinking of downsizing now that your nest isempty? It can actually be smarter to get anoth-er mortgage, tempting though it might be to paycash with the proceeds from selling your formerhome.

Say you get a mortgage for about 8.5%, but

you're only paying about 6% because of the taxdeduction for mortgage interest. You can actuallyearn more than that with your cash by investing itin long-term CDs or mutual funds, so it makessense to borrow even if you're retiring.

Your Money


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Alpine annuities offer safe tax haven

If you want tax-free savings, which are paid out ininstallments after retirement and taxed as incomeat post-retirement bracket levels, try an annuity.Your best bet these days are Swiss annuities,which usually charge lower fees while providingyields that are often higher than U.S. annuitiesallwith a lower default risk.

Two online sources for researching and buyingSwiss annuities can be found at mtbi.com andwarburg.com.

Online Investor

Investors: Avoid making the most common taxgoof

Even the most savvy investors suffer from amne-sia of sorts. When you sell a fund, alwaysremember to include the long-term capitalgains and dividend profits you reinvested whencalculating how much you paid for the fund.

Forgetting about that later reinvestment, especiallyover the course of the 10 years or so that mostinvestors keep a fund, is easy to dobut it couldraise your taxable capital gains profits by thou-sands of dollars.



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Splitting heirs lays tax woes to rest

Although estate heirs dont have to pay incometax on inheritances, they do owe income tax onpost-death payouts from inherited annuities, 401(k)plans, and IRAs. Claim itemized deduction forestate taxes. Youll be able to deduct a proratedportion of the estate tax; this amount would be amiscellaneous itemized deduction.

Deduction is available even if the estate tax hasntbeen paid.

Kiplinger Tax Letter

Win by having portfolio losses?

Let Uncle Sam help you ease the painshare yourlosses! Look for losses to offset your gains andavoid taxes. You can use losses to offset as muchas $3000 in wage and salary income.

Short-term losses are most usefulon assetsyouve owned less than a yearbecause they canoffset short-term gains that would otherwise betaxed at up to 39.6%. Keep close tabs on yourportfolio to make it work; and revisit your taxesperiodically.

Business Week


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40

A tech stock for all seasons

Own stocks that can weather rough patches alongthe way. Look for companies involved withintegrated access devices (IADs). Youll be ableto play these stocks several ways: look for brand-name companies like Ericsson; the electronics-manufacturing service providers like Celestica;and companies, including Texas Instruments, thatprovide components inside the device.

These devices combine various elements of per-sonal computers, televisions, and mobile handsetsin many forms. Smart phones are one example.

Red Herring

Avoid huge returns resulting in hefty capital gains

In 1999, there were a lot of big winners amongmutual funds as 178 funds reeled in 100%-plusannual returnskeep it out of Uncle Sams pocket!Know your funds that have the potential toyield a hefty income-tax bill. Youll be able toplan ahead and avoid some tax-season woes.

Plan ahead: avoid buying a fund that has a lot ofunrealized gains, if youre shopping for a newfund; or place funds that typically have been bigwinners with a high turnover rate in a tax-advan-taged account.



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Climb every branch of the technology tree

Technology is a hugely important engine of eco-nomic growth; make sure your holdings are diver-sified across the technology sector. This broadsector spans numerous industries, all of whichhave different growth patterns, profit dynamics,and valuations; diversity within the sector canhelp keep you ahead during technology sectordrops.

If you also own stocks in tech subsectors such assemiconductors and hardware makers, the dam-age doesnt seem quite as bad when Internetnames take a fall.

Morningstar StockInvestor

Technology: Smaller is better

High tech just keeps getting smaller. Investorsare beginning to eye handheld devices,whether cell phones or PDAs, though there's alot of volatility in this industry.

The key to success will be developing softwarethat works on both kinds of wireless devices, and

while no clear-cut favorites have emerged yetamong app developers, now's the time to startpicking horses.

Upside


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The future of the Net is in optical networks

Some observers are predicting a 2-billion user traf-fic jam on the Internet in the next two years sowhere does that leave Net investors? Those whohave put their money into optical networkproviders, infrastructure, and manufacturerswill be celebrating, while others weep.

That's the view from venture capitalist Jennifer GillRoberts, who predicts a huge cycle of growth forthose who provide these services as well as thetransmitters, receivers, filters, switches, and thelike.

Worth

Green, green is my portfolio

You may not be as concerned about sociallyresponsible investing as you are about marketshare, indices, and valuations, but there's a grow-ing consensus that green companies are alsowell-managed companies.

For instance, an energy conservation policy is alsoa money-saving endeavor, leading to higher profits.Thus, the Domini Social Index of 400 stocks actu-ally outperformed the S&P 500 by 1% from 1995to 1999.

Red Herring


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Deferred compensationa trap for the unwary

Deferred compensation has become a status sym-bol for flashy CEOs, but it would probably be abig mistake for youalbeit a big advantage foryour employerunless you're planning on yourcurrent job being your last.

The primary advantage of deferred compensationis a decrease in taxes, but if your income won't bedropping for years to come, there's no reason todefer taking your money. If you're young, let'sface it, you'll find plenty of uses for your moneysoon enough.

Worth

Play the options game for salary gain

So, you accepted a large share of stock optionswith your tech company instead of a big salary,and now they're worth a whole lot less? Don't

panicthis might be the time to ask for moreoptions, to help you cash in on the opportunityat hand, and average out your higher-pricedoptions.

You could also ask your firm to reprice youroptions at a lower rate, though this is less desir-able for companies. Either way, if you still haveconfidence in your company despite recent techsetbacks, now's the time to opt in.



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Look to Internet commerce to blast off in Asia

What's the new frontier for the old new frontier,the Internet? The Asian Internet is poised forincredible growth, with about 374 million peopleprojected to be online by 2005 (more than thecurrent U.S. population).

E-commerce will, as in the U.S., be the initial driv-

ing force in the Asian Internet, fueled by compa-nies like FirstEcom.com, which enables banks andcustomers to process electronic payments via theNet. Other e-commerce ventures in Asia shouldfollow in FirstEcom.com's success.

Worth

Buy beyond the border and benefit

There are many financial opportunities to befound abroad. Invest internationally, and youllcreate a more stable portfolio; stocks in foreignmarkets do not move simultaneously with theirU.S. counterparts.

Cellular telephone leader Nokia, food conglomer-ate Nestle, and entertainment superpower Sonyare highly popular and extremely profitable, butnone of them are U.S. companies.



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China tech companies eyeing major world role

In a huge potential market, several Chinese firmsare hoping to become the AOL of China, completewith AOL's dominance. These include PacificCentury CyberWorks and Tom.com, both ofwhom have raised millions in venture capitalfunding.

What's more, China's government is so anxious tonurture its tech sector that it's actually backing offits previous role of tight control. Such stocks willprobably start by trading in Hong Kong's GrowthEnterprise Market.

Forbes

What do Finnish investors know?

It's stock-market mania on a global basis. Thevalue of a $10,000 investment in an index ofthe Finnish stock market, largely led by Nokia,after one year is now at $111,990 that's awhopping 1,120% return.

Other winners were the Hong Kong index($28,953), and Brazilian index ($27,907); and tech-nology index ($26,548). Japanese stocks, small-gap growth funds, German stocks, internationalsmall-caps and China regional funds round out thetop nine, all roughly doubling. Number 10 is theNasdaq index.

Consumers Digest


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Half-a-world away

Although the world is moving toward a uniformaccounting standard, were not there yet, so for-eign numbers can be difficult to compare, when

youre trying to pick individual foreign stocks.Check out the value and income of AmericanDepository Receipts (ADRs). With ADRs youget financial reports in accordance with UnitedStates accounting standards.

ADRs are negotiable certificates that representone or more foreign shares, which are in the cus-tody of a big U.S. bank, such as Citibank andBank of New York.

Forbes

See the sites before going abroad

U.S. companiesall of which are required to reportaccounting methods uniformly and have full dis-closureare more investor-friendly than our over-seas neighbors. Seek global investing expertise.Seeing the (web)sites before you take off canreduce the turbulence.

Start at The British Dailys website, ft.com; theyoffer surveys on over 50 countries and follow70,000 public companies.



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Satellites eyed as next Net partner to hit big

Streaming media has become the latest buzz onthe Net, but it's fraught with quality problems.Many observers believe the answer lies insatellite streaming media, and new partnershipsbetween satellite providers and Net content com-panies are being formed daily.

Companies such as RealNetworks, Akamai,Cydera, and iBeam are betting they can beat ter-restrial providers at the streaming media game,especially if big-event Net broadcasting takes off.

Business 2.0

Telco firms about to take market by storm

A number of soon-to-be-public telecommunica-tions companies are sure to be among those fuel-ing the Nasdaq's future rise above 6,000. Theseinclude Chromatis Networks, Inc., CopperCom,Corvis Corp., Jetstream Communications, LuxN,and Sonus Networks, Inc.

With their demonstrated staying power in a toughsector, these firms are considered very viableprospects for the long term among all privatecompanies preparing to go public.

Upside


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European telcos eye global Net domination

The world's first truly global Internet companiesmay not be born in the U.S. European telecom-munications companies are poised to dominatethe Internet and reap the world's first global prof-its, too.

Backed by their governments, the telcos havelaunched major Net spinoffs. The purchase ofLycos by Spain's Terraspun, for example, fromTelefonicahas created the first international Netcompany.


Inspect the unexpected

Buying a house is exciting and time consuming.So even though it may seem like one more both-ersome detail, get a prepurchase inspection

done. An inspection will yield a catalog of prob-lems, shortcomings, failures, and their possibleremedies; it will help you make a wise invest-mentinstead of a costly mistake!

If you still decide to buy a house in which prob-lems are found, youll know what trouble spots lieahead and can better negotiate purchase terms.

Family Money


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The best jumbo grills have more power, baby

Suddenly, top-of-the-line gas grills are hot. Makesure you're getting the most versatility for yourmoney by getting as many BTUs as you canafford if you're going to spend as much as $7,000for the newest big-boy toy.

That way you get the most versatilitythe high

heat you need for direct cooking, and lower heatyou need for slow, indirect cooking. Also key areceramic radiants (not lava rocks), durable stainlesssteel or cast aluminum, and side burners for theside orders.


Think again before you click to buy a car

Smart car shoppers use the Internet, but theyarent buying online. Get price quotes online.You can take them to the dealership and negoti-

ate an even better price for the car you want.

Consumers who bought a car over the Net paidan average of 6.5% more than those who went tothe dealership. Most dealers will meet or beat aprice quote they made over the Internet when youshow up in the showroom.

Family Money


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You can save money and still get a hot PC

PCs just keep getting cheaper, but it's not alwaysthe cheapest deal that's the best deal. Among thetop cheap PC manufacturers, your best bet isCompaq, which can offer a fast Celeron processor,lots of RAM, high-quality graphics, a solid warran-ty, and Internet-service rebates, all for less than$600.

The flashy newcomer to this field, eMachines, hascheaper computers, but it makes up for that withskimpy technical support and warranty policies.

Consumers Digest

Plan to rest financially peaceful

Beyond the cost of a funeral, there's also risingburial costs to worry about as you plan yourestate. One less-expensive alternative is to

contact local or regional memorial societies,which find less-expensive (yet dignified)options and offer them at the lowest pricesaround.

Other options include burial brokers, who willprice and make all arrangements for you, and reli-gious groups, which offer reasonable packages.

Consumers Digest


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Buying biotech? Here's a way to hedge bets

The biotech sector is treacherous but exciting, andthere's a considerable sum to be made in invest-ing. A good rule of thumb for investing inbiotech funds is to consider dollar-cost averag-ing, in which you put a small amount of moneyinto a fund regularly, instead of one lump sum.

Biotech is volatile, and many of the stocks aretrading at heady multiples. Dollar-cost averaginglets you hedge your bets while still taking advan-tage of biotech's best.


There's a right way to invest in biotech

A lot of naysayers fear biotech stocks, but othersare excited about the sector in the new millenni-um, with decades of research about to pay off.

One key to picking the best bets are checkingout the management team, looking for NobelLaureates, finding managers experienced atnavigating the FDA process, as well as choosingsolid underwriters such as Merrill Lynch orGoldman Sachs.

Also be sure to check for adequate cash on hand,any profitable partnerships in the works, and largemarket cap.

Online Investor


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Retain the right attorney

The patent mania for undefined intellectual mate-rial in the tantalizing genomics biotech sectormakes this an investing minefield. It's not a bul-letproof test, but one of the most importantassets a startup can have is an on-staff patentattorney who specializes in biotech and haslitigation experience.

Better yet, a lawyer who's been associated withAmgen or Genentech is ideal. Many biotechupstarts don't have any patent intelligence onboard at all, unbeknown to most investors.

Red Herring

Cure bad biotech investing

There may be considerable profit to be made frombiotechnological advances, but that doesnt meanyou should invest blindly. Look for a health-care

fund with a long track recordone thats provenitself in a variety of markets. Youll avoid the gim-micks of unappealing investments that hidebehind words like genomics and medical.

Interested in young funds? Consider those thatare offered by an established fund family, whereyou can be reasonably confident that experiencedanalysts back the portfolio manager.



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Avoid second-visits to medical funds

Although there are some differences amongbiotechnology funds, they all invest in a similarbasket of stocks. Dont buy more than onebiotechnology or healthcare fund. This wayyoull avoid buying most of the same stocks twice.

Dresdner RCM Biotechnology (DRBNX), Fidelity

Select Biotechnology (FBIOX), RydexBiotechnology (RYOIX), and Monterey MurphyNew World Biotechnology (MNWBX) are a fewfunds that may suit your needs.


53

Big Brothers watching you on the road and saving you money!

Insurance companiesthough they know yourgender, age, and residenceare clueless aboutthe actual driving risks you take. Ask yourinsurance company about cellular trackingtechnology like Autograph. You could end upwith a more accurate premium.

A device is installed in your car; insurance com-panies compare driving patterns with safety sta-tistics and calculate your premium. It gives youincentive to reduce risky driving.

Business 2.0


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When interest rates rise, look to CDs to save

With interest rates rising, CDs have been making acomeback. Choose a three- or six-month CDwhen interest rates are rising. You can lock inan even higher rate when you renew.

Conversely, you should take on a two and a half-to five-year CD when interest rates start to drop, in

order to hang on to that higher rate as long aspossible. Thanks to banks' need to meet hugeloan demands and the Fed's raising of key interestrates, you can find interest as high as 6 or 7%.

Your Money

Money mismanagement 101

Nellie Mae, in 1998, found that 60% of collegeloan applicants had credit card debt, with an aver-age of $1,843. If your student needs help, try anonline debit card. Youll be able to control themoney and monitor the spending via the Internetor telephone.

PocketCard (pocketcard.com) is an online debitcard that allows you to provide your student withfinancial supportwithout having to take a crashcourse in managing credit card debt!

Family Money


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Have fun investing in hot leisure companies

Several trends will effect the success of leisurecompanies over the next few years. Companieswhich cater to shorter vacations (Carnival andRoyal Caribbean cruise lines) and plain oldspeed (Harley-Davidson) are popular with WallStreet.

Another trend to keep in mind is that televisionisn't just broadcast anymore, and companies likeATT-Liberty, which has large holdings in cablechannels, will also fare well.

Family Money

Music firms must change their tune to survive

The music industry is in for a major shakeup. Thebig winners will be the traditional music com-panies who successfully join in the Internetrevolution, with a business model that protectscopyrights while still offering value to the con-sumer.

Companies who already own copyrights and tradi-tional distribution methods, ultimately, can't beatthe brash newcomers of downloadable music, sothey'll have to join them.

Business Week


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GM hopes to lead carmakers into cyberspace

Nothing is more old-economy than America's car-makers, and GM is the most lumbering of thesedinosaurs. But a new, young president and hisplans to use the Net to generate revenue andtrim costs has Wall Street eyeing GM with newrespect.

GM plans to use the Net to save $1 billion in pur-chase orders and keep revenue rolling in on newcars with its high-tech OnStar navigation system.And where GM goes, others will follow, includingFord and DaimlerChrysler.

Forbes

Put your money on Matchbox, not gizmos

There's one high-tech sector to be avoided like theplague. Toy manufacturers have discovered thehard way that simple is still better those whohave classic brand names like Monopoly,Crayola crayons, and Play Doh are the onesenjoying success, even in the new high-tech era.

High-tech toys have been a disaster for most man-ufacturers, leaving Mattel, Hasbro, and other old-economy firms a better bet than new companiesbased on technology toys, such as The LearningCompany.

Forbes


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Hydrogen eyed as oil of the future

If you're in the market for a long-term sleeper,consider hydrogen: companies such as ShellHydrogen and DaimlerChryslerare backing apromising effort to replace dirty, inefficient oil-burning vehicles with hydrogen-powered ones.

Many countries are hoping to replace fossil fuelswith hydrogen, for political, economic, and envi-ronmental reasons. And with gasoline prices ris-ing steadily, the economics of producing hydrogenare looking better and better.

Red Herring

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