Vanguard on Investing Successfully in Today’s Market

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Vanguard has a cool new video series up on their website right now which talks about how to make the most of your investing ventures. Their reassuring voice couldn’t come at a better time, considering many people’s hesitancy to trust the market right now. Keep on reading for their four part video series which focuses on controlling your investment costs, managing risk, choosing the right investments, and the benefits of long-term investing.

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2. Manage Your Risk

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3. Choose the Right Investments

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4. Benefit From the Gift of Time

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How Much is Your Brain Worth?

Months back, we discussed ideas on how to generate some extra cash on the side, and followed up on those ideas with a how-to guide in pitching yourself as a freelancer or consultant to potential clients.  While doing some part-time work can be some great additional income, there are still other ways to make a quick buck with little work and relative ease.  While it’s not steady money, focus groups can provide some quick and painless cash if you qualify for a study.  Keep on reading for a look at what a focus group consists of, how to find them in New York, and what to expect in time and compensation.

What is a Focus Group?

According to the business dictionary, a focus group is a small number of people brought together with a moderator to focus on a specific product or topic.  They focus on discussion as opposed to individual responses to formal questions to produce qualitative data.

Companies hire market research firms to hold focus groups in order to get first hand knowledge of what consumers think about upcoming products and marketing ideas.  They look for a group of people showing diversity in ethnicity, age, and income.

How do I find out and sign up for them?

I’ve been participating in focus groups since I arrived in New York five years ago.  They’re the quickest and easiest way to make a few bucks on the fly — and especially helpful during weeks when you just have enough to make rent.

I’ve been most successful in finding upcoming focus groups through Craigslist.  I go to the “Jobs” and “Gigs” sections and type “focus group” or “market research” into the search query and see if I qualify for any of the groups.  “Gigs” tends to have more listings for them. The next step usually requires submitting some basic background information for their first round of selections.  This information commonly consists of your name, age, ethnicity, work status, occupation, and industry, followed by topic specific questions such as the brand of shampoo you use or what types of sports drinks you regularly consume.

What’s Legit and What’s Not?

Many of the spam emails and websites that ask you to sign up to receive focus group listings tend to be fraudulent.  This is a way for them to collect your personal info and get you to submit answers and opinions for a measly $2 per survey.  I avoid these because they’re not worth the time to fill them out.  Some of the more reputable companies (at least in NYC) are:  Focus Pointe Global, KGA Research, New York Focus, and Focus Suites of New York.

What’s the Typical Compensation?

Typical compensation can range anywhere between $25 and $300.  Most focus groups last between one and two hours, and the average compensation is $100 - $150.  Not bad for a few hours of round table discussion.  There is, however, a downside to focus groups, and that is that once you participate in one, you’re usually not eligible for another group for at least three months.

As mentioned earlier, focus groups are an excellent way to make the occasional quick buck, but not something you could try to turn into regular cash.  Unfortunately there aren’t nearly enough opportunities to turn this gig into a part-time job.  But hey, a benjamin in the palm in return for a few hours of time is well worth looking into.

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What I Learned From Damon Dash’s Financial Muck Up

On Friday, the New York Daily News ran a story about Damon Dash, the co-founder of Roc-A-Fella Records(most famous for a little rapper you may have heard of named Jay-Z) and the accompanying Rocawear clothing line. Dash, who just a few years ago looked to be the second coming of Russell Simmons, is now in the poor house.

I know what you’re thinking: how did this hip hop mogul who was estimated to be sitting on a very cool $50 million descend into a financial apocalypse so deep that even his lawyer dropped him for being a deadbeat? Quite easily it seems, and I vow not to go out like him. Here are some of the lessons that I learned from Damon Dash that have helped me in my own finances.

I DO NOT NEED TWO HOUSES

For many, owning a home is the American dream: white ticket fence, 2.3 kids,cute fuzzy animal, yadda yadda yadda. For those among us with significantly more cash who travel often, it’s not unheard of to have a home on, say, each coast. Hotels do wear on you, after all. Where Dash dropped the ball (big time) is that he owned two condos–in the same neighborhood! What type of financial retard requires multiple homes within walking distance of one another? Homes that totaled a wicked $78,504.26 per month mortgage. That’s outright stupid on a level that redefines the word. However, it’s muck ups like these that keep me sane when the fact that I’m paying $1,000 per month for my Midwood apartment (rental) begins to wear on me.

I DO NOT NEED A CAR

Let’s face it: a car in New York is a luxury, not a necessity. With one of the best mass transit systems on the planet, I can pretty get to any neighborhood in the 5 boroughs at any hour by bus or subway. In a pinch I could call up a 24 hour cab service like Mex Express and be dropped of anywhere for a very reasonable price. Damon Dash, on the other hand? His ride of choice was a gas guzzling SUV, which was ordered to be seized by the city thanks to several outstanding $714.99 lease payments. We should each examine the merits of a car purchase and weigh it against the total cost of ownership (gas, insurance, maintenance, etc) to determine if its worth the purchase.

I DO NOT NEED EXCESS

Put this in your mental blender and mix well: Damon Dash owned 1,300 pair of shoes. I’ve never owned more than three pair simultaneously in my life. I now understand why he needed two Tribeca condos. Everyone has their hobbies ( I like reading graphic novels and playing video games), but I don’t have over a 1,000 books or games. Why? Because books and games, like shoes, have a purpose, and sitting in a corner covered in dust is not it. I’d rather pay my bills on time.

So is Damon Dash’s situation irrepairable? Not in the least. We all make financial miscues (I, for instance probaly eat out more than I should), but learning from those mistakes and striving for financial balance and responsibility is something that should be a constant in our lives. I say good luck to you, Damon Dash, as I prepare my lunch for tomorrow.

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Mayor Bloomberg to Raise Taxes in NYC by 15%

If you’re thinking “WTF!?” right now, then you sum up our thoughts pretty well. Mayor Bloomberg’s tax increase follows the nearly 20% tax increase after 9/11, and is mirroring similar tax increases in other cities across the U.S. in an effort to close budget gaps due to the lull in the current economy.

According to The Daily News, the tax increase that will fill this gap will be hard hitting for the city’s middle class, most directly affecting people earning between 50K - 90K. However, instead of being aghast at another tax increase, I think the concern for most people is in what manner these funds will actually be utilized. NYC has plenty of issues that need attention (affordable middle class housing and more money funneled into public schools come to mind), but the lack of movement on these projects over the past few years has a lot of people believing that this will, once again, be another raise without much to show for it.  Instead of cutting out some extra meat from the local government, it seems as if residents will have to pay more to see even less being done.

Why The Increase: Over the next two years, NYC is projected to see a $4 Billion dollar budget gap. Also, aside from the proposed tax increases, Bloomberg has made clear that he wants to cut expenses by either eradicating or slashing funding for other city projects.  Here’s what he’s proposed so far:

• Cutting 300 city jobs (including street cleaners and child welfare supervisors)
• Slashing $359 million from school budgets over the next 2 years
• Increasing fees and fines
• Getting rid of the $400 homeowners rebate that was supposed to go out this month
• Rescinding the 7% property tax cut
• Canceling the January Police Academy Class
• Less training for firefighters
• Shorter hours for libraries

Although these cuts will help ease the pain (although some like the slash in school funding seem a bit ridiculous), these changes will still leave the city with a 1.3 billion dollar budget deficit, and it looks as if New Yorkers will be picking up the tab.

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I’m Debt Free!

I’m not one to toot my own horn, but I will today because, frankly, I deserve it.  Today I became a card-carrying member of the Debt-Free club.  This beautiful day follows an intense two year period of handing over half of my salary towards debt repay, and I am tickled pink to have finally gotten to the point where I don’t have to throw away my paycheck on crap that I purchased eight years ago.  [You can check out how I screwed up my finances in the first place here.]

Now that my student loans and credit cards are paid off, I can start focusing on the  next goals I have for my financial future.  The big picture focus is to start building my net worth by investing in a few choice funds, and to start doing some serious saving for retirement.  I’m gonna share my goals and plans to reach those goals with you guys below.

1.The next item on my to-do list is to save $10K to put in a savings/emergency fund.  My plan is to have this completed by the end of April 2009, and since I’ve become accustomed to living on half my salary, I’ll throw everything I was putting towards debt repay into my money market and high-yield savings accounts.

2. After I save my 10K, I am going to invest $2,500 (the minimum) into the Vanguard Emerging Markets ETF.  I’ve been looking at this fund for a while, and since I am still young and have a long investing future ahead of me, I’ve decided to invest in a riskier fund that has a lot of potential for a high return.  I’m also going to start contributing the maximum to my Roth IRA account.

3. My ultimate goal, once I have a nice financial cushion in my checking and savings accounts, is to quit my 9-5 and find a part-time job three days a week doing something I enjoy (possibly fundraising/grant writing for a nonprofit), and spend two full days each week focusing on building this site.

Since I’m in a positive and story-sharing mood today, I’d really like to hear from you guys about any financial goals you’re working on or have reached so far.  Feel free to share your tips and stories in the comments section!

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