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The Big Move

November 15th, 2006 at 03:31 pm

Text is http://www.eFIPO.com and Link is

It's been a fun time on saving advice, but it's time for me to exit. I gotta spend more time on my main site. Please visit it for complete posts, and debates. Thanks again for the whole community for helping me out for the past few months.

Sincerely, Jeremie

Holidays’ Big Work-Out

November 6th, 2006 at 08:05 pm

As I have told you many times in the past few months, I knew that the stocks that I owned were going down. A lot of my portfolio relies on the consumer action for it to see stock prices soar. I have retail store holdings (like Best Buy & Circuit City) that usually only see profits in the non-business markets. Today a story in Wall Street Journal directly pointed out what I was saying in the past (I can’t link to the article I am referring to because you need a subscription. Sorry!)

“Forecasters are more divided than usual over what kind of holiday shopping season retailers will see this year, with predicted gains for overall sales ranging from a 2.5% hiccup to a gangbusters 7.5% advance.” I’m more on the optimistic side of the argument. A lot of those retail giants receive over 50% of their yearly revenue in less than two months of selling.

“Depending on who is counting and how they do the tallying, shoppers are expected to spend anywhere from about $250 billion to $786.6 billion.” That’s a lot of money to be made during just a few months. Last year a huge change happened in the retail market. Increase of sales happened without products moving off the shelf.

Who’s to blame for that phenomenon? Gift cards! Gift Cards stole a huge amount of revenue from products. This really doesn’t change the profits of large companies; it just changes their selling strategy. “Thirty-eight percent of the value of gift cards purchased in the 2005 holiday shopping period were redeemed in January 2006.”

What does this mean to you? If you have extra month laying around after your holiday budget is done, buy some stock so you can actually MAKE money while shopping.

Buying the Good Stuff

November 5th, 2006 at 08:44 pm

I received an email today with a great question. Here it is “Hey Jeremie I’ve been reading your blog for about 2 months now and I have a question. I just ran into a pretty large amount of money. Well to me it’s big money. My grandmother gave me $2,500 and I am trying to decide what to use it for. I don’t have any debt, I’ve already maxed out my IRA for this year, and I have six months savings already built up. What should I do?”

First, I would like to congratulate you on your successful savings habits. It seems you are on the right on track to a very early retirement. I would love to be in your position right now! There are a few recommendations that I would do based on the information you sent me.

Do you own a home?
Yes- See if you need to purchase anything around the house that might need to be replaced. Small home improvements are always a great investment too.
No- Open a separate savings account for your home. Try to save around 20% of the down payment. I know it seems high but that’s just a target. Use a high interest online savings account.

Are you currently married?
Yes- Consider taking a small vacation with your wife. It’s always nice just taking a quick getaway before the holiday season.
No- Save for a ring so you don’t have to go in a huge amount of debt when you decide to pop the question. It’s always good to have some sort of down payment on the ring.

Do you have kids?
Yes- Start saving for their education. As you know even a little can go a long way with compound interest. “Compound interest is the most powerful force in the universe.” - Albert Einstein
No- Put more money into your online savings account and save it for the holidays or an extra rainy day fund.

You can also invest some into something that will create passive income. These are just a few suggestions I would consider doing.

Jeremie’s Stock Performance#7

November 4th, 2006 at 09:09 am

Mutual Fund Performance (All grouped together)

* Friday, October 27, 2006 – Full Value $10,628.86

* Friday, November 3, 2006 – Full Value $10,485.46

* Decrease of $143.4 which is a ~1.4% decrease.

Individual Stock Performance (All grouped together)

* Friday, November 3, 2006 – Full Value $2,233.81

* Friday, October 27, 2006 – Full Value $2,281.27

* Decrease of $47.46 which is a ~2.1% decrease.

I expect 2 more weeks of a down market till my portfolio starts hitting homeruns. I finally calculated how much money I needed to achieve a 20% return on my mutual fund portfolio and 22% on my stock portfolio. It took me a while because I added money into both portfolios which makes it harder to calculate a needed return.

Mutual fund balance January 1st, 2006 $9548.45
Needed money to return 20% – $11,458.14
So I need another $972.68

Stock Performance balance January 1st, 2006 $2042.78
Needed money to return 22% – 2492.19
So I need another $258.38

Retirement Rules

November 3rd, 2006 at 02:52 pm

(Congratulations…now you’re
down to only one boss!
Happy Retirement!)

Are you worried about retirement? Probably not… I mean you’re young and you don’t have to worry about it for such a long time. I don’t think so. The “Are you worried about retirement” question is so vague. I better question would like “When do you want to retire, and how much money do you want when you retire at that specific age?” Personally, I want the ability to retire around the age of 40 and then dedicate my life to public service. What are your retirement goals?

Everyone has their own ideas about retirement. Do you want to live lavishly or comfortably? The real question is - how do you plan to fund your retirement? There are so many options out there such as: 401(k), IRA’s, real estate, investing in business, owning your own business, ect. I plan to use pretty much all of the above.

According to the U.S. News & World Report, there are 5 keys to resting easy concerning retirement. Beside the key points are some articles that may interest you concerning that precise topic

1. Plan for the financial transition. Couldn’t find any, which means I will be writing on this very soon. If you find an article on this subject please leave it in the comments!
2. Pay down debt before you retire. Jeremie (me!) from eFIPO.com article on Why save when you’re Broke.
3. Evaluate your assets. 2million article on Asset Allocation
4. Health insurance is a must. Jeremy from Generation X Finance article on Why do I Need Insurance? - Part 2
5. Take care of your health. JLP from AllFinancialMatters article on Health Care.

Go to

Text is http://www.efipo.com/20061103/retirement-rules/ and Link is
http://www.efipo.com/20061103/retirement-rules/ for all the links to the articles

Generation Y Not?

November 1st, 2006 at 10:08 pm

According to a new study conducted by the American Institute of Certified Public Accountants, Generation Y (eFIPO generation, 17-35) are not saving money and are engulfed in debt. Why is this happening? Times have changed. We live in complex world that promotes the need for immediate gratification. Whether it’s the media (TV & radio) or celebrities, we just can’t help but want more.

Americans aged 25-34 had a median net worth of $3,746 in 2004, which is a significant decrease from $6,788 in 1985. Debt accumulation has also increased from $3,118 to $4,733. The net worth figure is also skewed because it doesn’t encompass inflation. The value of $6,788 in today’s dollars would be about ~13,000 (using a 3.7% inflation rate). If I used the savings rate it would be even higher. What does that mean for you? Start saving, spend below your means, and invest in your future. You can’t use the ignorance card anymore. Don’t come up with more reasons why not to save for retirement. Learn from your mistakes and start being proactive.

I know this data seems very frightening, but the eFIPO Generation have a few aces up our sleeves. First, we are the most educated generation in American history. The baby boomers have to retire at some point, and who do you think will fill those spots? Illegal immigrants? Of course not! Second, time is working with us. We are young and we can correct the screw ups that we’ve made over the years. Start to pay down your debt, and use the awesome powers of compound interest and market returns in your favor. Learn your investment strategy and begin building your nest egg.

We don’t have to be the debt generation. We are Generation Y and we have the ability ask “Y not?” Y not be rich? Y not retire young? Y not get involved in politics? We have the ability to break the cycle. It’s up to you if you want to be part of the experience or sit on the sidelines.

Goals Equal Success #2

October 30th, 2006 at 12:08 pm

Continuation of “A Different kind of Investing”, Goals Equal Success #1, and more things that I’ve learned from “The Richest Man Who Ever Lived” by Steven K. Scott.

Dreams are nothing more than the completion of goals set by the individual. Like I said before, I truly believe that every dream is possible if you have a detailed plan to achieve it. The world cannot stop you when you have the drive and plan to succeed.

Here’s the story of two groups of people that share a common dream, but have two totally different ways to attain it. They both want to be popular musicians in two different genre of music. They both have great bands, vocals, talent, and lyrics, but one band lacks motivation and planning skills.

The first band started small, but they all had the dream of greatness. The band developed a plan on how they would be able to accomplish that dream and make it a reality. They played at every place they could and always try to get their name out there. They also saved as much money as possible to be able to record their songs in a studio. They spent countless hours trying to perfect their sound. When everything was done, they finally released a studio quality CD. They found a music manager to market the band to record labels and are on the track to stardom.

On the other hand, the second band’s popularity ignited much faster. They were invited to play at some big bars in Atlanta and everyone liked their sound. After hearing a couple of their songs, I asked them to play at a party I was having. They were incredible. They just had that sound that everyone liked, but lacked the most important aspects to achieve true success.

They didn’t have any motivation or anything that resembled a detailed plan. They had less motivation than a college student wanting to study calculus (Which means they had zero motivation). After playing at a few bars, they decided that they were too good for those places and declined the offers to play again. They thought someone was just going to listen to their album and give them millions of dollars.

Instead of practicing they partied. Eventually, they couldn’t play anywhere. The band to this very day doesn’t know where they went wrong. Even with all their talent they still crashed and burned. I guess they just felt they were too good and didn’t need to practice, play, and promote.

Goals Equal Success #1

October 30th, 2006 at 07:52 am

Continuation of “A Different kind of Investing” and more things that I’ve learned from “The Richest Man Who Ever Lived” by Steven K. Scott.

You ever wonder why some people are successful and others fail? According to this book, there are two significant things to do to become successful. The first thing is to plan correctly, and the second is to seek consul. This post will discuss how planning correctly can really change your life.

Let me first ask a question that I know everyone has heard before. Do you want to be rich, successful, and have loving relationships? I would say everyone I know would want to answer yes. Here comes a question that most people don’t hear after that first question is asked. How are you going to be rich, successful, and find loving relationships? Isn’t that question much harder to answer? Let me show you some steps to make this process as fun and easy as possible.

1st. What are your goals? Everyone has there own individual goals like: being rich, successful, loved, and popular. Everyone also has a dream job that they would want to do: movie star, rock star, politician (my dream), doctor, astronaut, stand-up comedian, and etcetera. Write out all your goals. They can be short term, mid term, or long term. Make them as broad as possible. After you have them all written down, list them in the order of importance to you.

Here are my broad, but arranged goals: Relationships, eFIPO & other Websites, Knowledge, Career, Money, Charity, High School, House, Higher Education.

2nd. After they are to your liking, write how you plan to achieve those goals. Again, make these pretty broad. Here’s my first goal with broad steps to achieve that goal.

Spend as much time with wife and kids (I’m not married or have any kids, but still a dream of mine)
Get my kids involved in school activities
Take trips with my wife and kids as much as possible
Bring kids to grandparent’s house as much as possible

3rd. Take your most important goal and describe it in detail. My most important goal is relationship building within my family. Here is the definition of the family life that I would like to achieve in the future. -Spend as much time with my wife and kids and have a loving family. I would love the ability to have a really strong family by always having an open door and an open heart. I want to love and motivate all my children to be whatever they dream to be. I want a loving wife that shows that we will be in love till we are grey and old. I want to be with her sitting in a hammock at 65 and still cuddling and loving each other like the first day we met. Our home will be warm and inviting to our kid’s friends, and family. I want to participate in as many activities with my kids in and out of school. I want them to feel loved, secure, and a bond that cannot be broken.-

4th. Take your description and add a short, mid, and long term steps that are easy to accomplish. The way I want to achieve a loving family is to begin with a loving relationship with my future wife. Here is how I hope to accomplish it.

Have a great relationship with my girlfriend

Be kind and gentle
Be respectful and listen
Do not overreact
Spend time with her instead of my friends

Save for a ring
Prepare a speech to deliver to her parents to ask for her hand in marriage

Outline how long we have been together
Say how much I love her and her family

Get married

Help in the wedding, let her make most of the decisions because it’s her day

Have a lot of fun with my new wife

Do things we both enjoy
Do things she enjoys
Have nights for just us
Have nights with friends
Always tell her what is on my mind

Develop a very strong relationship before we decided to have children
Move to a house with a good school district and neighborhood
Have the kids
Be there for my wife in time of need
Decide whether she should work or I should work
Play sports with my kids and share my wisdom with them
Talk to them and be supportive of their aspirations and dreams
Make them feel secure by promoting a safe and comfortable household
Show my kids that their mother and I have a great relationship and bond
Promote a healthy lifestyle and exercise with my family
Have family discussions and keep an open door policy
Always stay true and loyal to my wife and kids

5th. Do this with all your goals. I know this seems long and tedious, but it works wonders. You may be asking yourselves “Jeremie do you do this?” Yup! I have about six pages of ways to accomplish my goals and its growing. I truly believe that if you have a detailed plan, you can achieve anything. If I were to give you an address to my house, it would be nearly impossible to find. But if I gave you detailed directions then it would be extremely easy to find. Your life is not much different.

More to come soon….

America Is Getting Fat. Population Wise.

October 28th, 2006 at 02:02 pm

According to recent reports from the U.S. Census Bureau, America has finally reached the 300 million mark. What does this mean for the U.S.? Well according to most economic statisticians it will not be affecting America for quite sometime. On the other hand, other developed countries are already seeing the impact caused by population changes. Most of Eastern Europe, where the population is decreasing, will be going through a ton of social changes in the next couple of years. Social security, health care, and other retirement benefits will be causing their taxes to increase even higher than they are now. Currently Scandinavian countries are paying over 40% of their income to pay for taxes (Man! And you thought America has high taxes?!? Check other countries taxes here).

One of the coolest things on the internet is the Census Bureau’s Population Pyramid graphs (Can’t get much cooler than this site eh?). As you can see America will be just fine till the year 2050. Check out Italy. They will be in serious trouble by the year 2025. When you have more 70 year olds than you do 20 year olds, serious problems will occur. They will not have enough people to support the retired population. When your country has an inverted pyramid, you should start worrying about the effects that will come in the future. Developing countries such as: China, India, and Pakistan have near perfect pyramids. Meaning they have large amounts of young people and very little older citizens.

What are some other issues that will come from the population increase in America? Is it a good thing or a bad thing?

Calculating your REAL Return

October 26th, 2006 at 12:06 pm

Let me just start off with an example.

You have five years of return data from your portfolio.


1- 10%

2- 18%

3- 21%

4- -3%

5- 17%

The way most people calculate their returns is to add all of them up and divide by the amount of years. Your average annual return would be 12.6% ((10+18+21+ (-3) +17)/5) =12.6).

This seems like the correct answer right? Not really. Let me show you another example so you can see the flaw using this kind of equation.

You purchased a mutual or stock at $100.00 per unit and it does not pay any dividends. The first year it goes down to $50.00 per unit. The second year it doubles up to $100.00 per unit. You would assume that you didn’t make or lose any money right? Well wrong again. Using the same equation your annual return would be 25%!


1- 50%

2- 100%

(-50+100)/2= 25%

Now that you see why the conventional way of finding your return is flawed and delivers false returns, let’s view the real way to calculate your return.

1st. You have to change all your returns to decimals. After that use this equation to find your real return.

((1 + (1st yr. return)*

(1+ (2nd yr. return)*

(1+ (3rd yr return)*

(ect….)) ^ 1/ (number of years)-1

We will use the information from the first example.


*(1+.17)) ^ 1/5=.122 *100% = 12.2%

I know this equation involves a calculator and an extra one minute of work, but it shows you the real return on your investments which is crucial.