Hot money is always chasing the next big investment. In the past decade or so, hot money has moved from internet stocks to real estate to gold and now might be coming to back to real estate. One indicator of where the hot money is going is to watch for initial public offerings (IPOs) on stock exchanges. Insiders rush to bring a company to the stock market when they think they can make the most money. If a sector is hot, it is easier for them to make money than when a sector is hated. For example, there were a lot more IPOs in early 2000, while internet stocks were soaring, than there were late in the year, after the crash. The real estate industry is a “hot” sector to invest in? It could be. Real estate web site Trulia recently announced plans to complete an IPO that is expecte...

Facebook shares have been crushed since it's IPO In May, investors fought each other for the right to purchase shares of Facebook, the social media company that was “changing the world”. The company was worth about $100 billion after the stock began trading and it has been falling ever since. Three months later, Facebook was recently worth a little over $51 billion and has lost about $40 billion in market value since the first day of trading. This makes it the worst performer among all large stock offering in history, according to data compiled by Bloomberg. After a drop of nearly 50 percent, many analysts are warning investors that further declines lie ahead. Learning from Facebook’s catastrophic IPO failure Nothing has changed in the past three months. Investors hav...

Recent reports show that the average family makes almost $1,000 a week. According to USA Today, “Inflation-adjusted median household income increased 4%, from $49,434 to $51,413, from August to December, according to a study released Thursday by Sentier Research.” That’s the biggest jump since the start of the recession in December 2007, according to an analysis of Labor Department data by the economic research firm. With this data as a starting point, we can see that future generations may have an average annual income that sounds rich by today’s standards. One of the easiest rules to apply in finance is called the “rule of 72” which shows how quickly money doubles. You simply divide the annual growth rate by 72 to learn how long it will take for the initial amount to ...

It was big news when Bernie Madoff was sentenced to more than 250 years in a federal prison following his confession in running the largest Ponzi scheme in history. And it looks like the Madoff family isn’t done yet. Bernie’s brother, Peter Madoff, was formerly arraigned and charged with fraud and providing false statements to regulators. What we can learn from the Madoff brothers No one will ever know exactly how this tragedy was able to go undetected for years. But investigators and prosecutors are continuing their efforts to learn all they can.  For now, all they know for sure is that many investors lost billions of dollars. For those of us who could not withstand large losses, there are valuable lessons to learn from all of this. First and most important is to remember tha...

Income usually drops in retirement, and expenses may decline somewhat – but they rarely fall as much as retirees would like them to. Housing expenses are one of those costs that may not decline by much. Utility expenses will not drop just because your income fell, and in fact they may actually increase because you will be home more and may need to run the air conditioning or heat more often. How to keep retirement expenses in check: downsize A smaller home could help lower costs. Utilities are generally more expensive for larger homes. Downsizing is a strategy that could make retirement less stressful from a financial perspective. There is also less maintenance required for a smaller home, so you may find you have more time to enjoy retirement if you downsize. While downsizing may ha...

By starting your own business, you have a chance to become your own boss. This idea appeals to many people in their working lives. Frustration within large corporations is legendary and even forms the plot in movies like “Office Space,” where workers turn to an illegal and ill-prepared, yet hilarious, ploy to steal money from the major corporation the central charaters work for, all in an effort to escape the drudgery of life in a cubicle. Retirement is an opportunity to become your own boss doing something you love. Those dreams of starting your own business are often delayed in order to build financial security, and then fears of financial security in retirement often develop and most people retire from their job without realizing the dream of becoming a business owner. But you don&...

A ticket to Disneyland is going to be a little more expensive this year. The happiest place on Earth raises the price of admission a little every year. Over time these price gains have significantly outpaced the rate of inflation, but the park has added more attractions – a justification they use to charge those prices. This year, daily passes for the Anaheim Disney parks, Disneyland and Disney California Adventure Park will cost $87, up almost 9 percent compared to last year’s admission fee of $80. Every year, an estimated 300,000 park visitors buy annual passes that include the cost of parking. Those tickets will be 30 percent more expensive this year, jumping to $649 from $499. Last year, prices were only up about 5 percent for daily admission when compared to 2010, and season p...

There is a small window of nice weather once a year when fearless adventurers can reach the summit of Mount Everest. Nice weather is a relative term. In San Diego, it usually means sunny and warm with a slight breeze, but on Everest, it means high temperatures that are about ten degrees below zero, more than twenty below with the wind chill, and light winds of five to ten miles per hour with gusts up to 100 miles per hour if the weather changes suddenly. Whew! This trip isn’t for everybody, but we can get some perspective on adventure travelling from a trek to the top of Everest. By the way, in 2012, a 73-year old woman reached the peak proving that age is not a anything that should stop you in perusing your dreams! Fun facts on the Mount Everest climb It’s a heck of a vacation a...

When you make any investment, there is always a cost. When you buy a batch of stocks, there is always a commission on each side of the transaction. Bonds bought directly also generally carry a commission charge, too. Some mutual funds come with a commission and all funds carry an annual fee. While all of these expenses are fully disclosed, there are some hidden charges investors may not realize they are paying. Commissions are only one of the expenses involved with buying stocks or exchange traded funds.  Many brokers, exchanges and regulators add a variety of fees that appear on the purchase confirmation and will be paid again when the investment is sold. In addition to these expenses, there is a cost of trading. The price you pay is usually a little more than the price you could immedia...

In a recent article, US News and World Report identified some easy-to-use web sites that can help you save money. We know our readers who are retirees and family members of retirees often find that they face even more challenges than young families when it comes to budgeting, so we thought we would mention a few of the sites they identified. One reason retirement budgets become stretched is because the things you buy most often in retirement can be the things that rise faster than inflation. Medical care seems to go up by two to three times as much as the Consumer Price Index, as does the price of energy. Temporary price drops in gasoline are nice to see, but it seems that the long-term trend is higher for gas prices. Food prices also seem to rise faster than general inflation. Aisle50 ...