Fanelli's Personal Finance Has Moved!

I am still in the process on finalizing this move, so bear with me during the changeover. Please come visit me at The Journey to Success - My Finance and Accounting Blog! New and improved blog - will continue to concentrate on personal finance, however I will also be posting about current accounting issues, and the CPA exam! I am really looking forward to this change, as I hope you all are. Blogger just wasn't cutting it for me! If anyone has any advice to offer it would be greatly appreciated! Thank you.

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Buying a New Laptop – Mac or PC?

It seems that ever since the Apple ipod hit the retail store shelves, everyone is starting to consider Mac computers and laptops more frequently. I remember about 8 years ago I had a friend who purchased an iMac and I thought it was so weird. However, to his credit he was a big graphics junky, hence the reason for his purchase of the iMac. Now, I am at a point where I desperately need a new personal laptop. No more dealing with my 6 yr old Compaq PC, or having to use my employer-purchased laptop for personal usage. My wife and I will mainly use our personal laptop for email, Internet, word processing, and various photo projects (we currently use Adobe Photoshop).

For some reason I REALLY want a new Macbook. I am getting a little pushback from the ‘powers-that-be’ stating that we would have to buy all new software (ms office for Mac’s, Photoshop, etc) and the usually worry about file compatibility from PC’s to Mac’s.

The main reasons that I would like a Macbook are 1) the security of the Mac O/S seems to be much more secure than Windows XP or Vista, 2) to try something new, 3) I like the various software programs that can be purchased with a Macbook, i.e. iLife, iWork, etc. – however that adds cost to the puzzle.

I am essentially looking to spend between $1,000 and $1,300 for our new laptop purchase, and there aren’t any Windows based laptops that are really standing out to me at this time. Maybe a Sony Vaio? Maybe a Lenovo Thinkpad?

Does anyone have any experience with running Windows and the Mac O/S on a Macbook? I know this will cost more, however I am wondering how the usability is.

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5 1/2 Month Break From Blogging!

Hot of the press, Fanelli's Personal Finance is back in action! I took a 5 1/2 month hiatus from blogging, for a few reasons. 1) I got really busy at work, 2) I was planning a wedding, which takes of loads of time and loads of personal financial decisions (in which I should have been blogging about), 3) I lost focus of why I was blogging. #3 is the main reason that I want to focus on. I actually thought that I was going to start blogging to make some money on the side in advertising $'s. BAD IDEA! For all of you new bloggers out there, do not START blogging to make money. If the money does come - like sites such as Consumerism Commentary or All Financial Matters then GREAT, but the lesson of the day is.........blog about personal finance because you love talking about it and you cannot get enough of it. And that is what brings me to the present day. The wedding was absolutely wonderful, as was the honeymoon, and now it's back to reality. New items surrounding FPF consist of a new job coming 12/18, new education search - part time MBA or MS in Accounting upcoming in the near future, and back to studying for the CPA exam, which I got away from for the past 3 years. There is alot going on in the world of FPF, including a new Etrade account - love it - so let the blogging continue. Let's get back to basics and post once per week. Send me a comment - I'm ready to talk finances again!!

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MSN Features PFBlog article!

MSNBC.com - "Bloggers open up about money matters - Young online diarists reveal their financial facts, foibles to their virtual fans." This is just great! I love hearing about fellow pfbloggers in the news, I mean come on now, they are practically famous! To be featured on such a well-known site such as MSN is a great accomplishment. Bloggers mentioned were AllFinancialMatters, The Budgeting Babe, Boston Gal's Open Wallet, Make Love Not Debt, and of course our great friends at pfblogs.org!

I recommend that everyone reads the article. It is another feature that places pfbloggers on the map. Keep it up fellow bloggers!
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Part 1 - Online Brokers - Which one is for me?

Many people ask me “which online broker is best?” I always respond with, “well that depends on what you are looking for.” Readers do not like this answer, so I am going to try and break it down in a multi-part series here at Fanelli Finance.

Why do I say that it depends on what you are looking for? Each online broker is the same – they execute trades of various investment vehicles for individual investors. Each online broker is DIFFERENT. Each broker provides varying amounts of research, investment options, customer service availability, minimum account balances, interest on cash balances, no transaction fee mutual funds, commissions, and other various fees.

There are many online broker ratings out there on the web that break down various discount brokers, and I would recommend “googling online investment brokers” for further research.

Let’s start with some questions that you need to ask yourself before researching online brokers. 1) How much are you planning to invest, 2) How important is low commission fees, 3) How important is no load mutual funds with no or low transaction fees, 4) How important is stock research, 5) How important is an easy-to-use website, 6) How important is it to contact a customer service representative via phone, 7) How important is high interest rate on cash balances? This list of questions was utilized at Kiplinger’s Personal Finance web site.

Some individuals only care about low commission fees. For those of you out there check out Trade King ($4.95), Firstrade ($6.96), along with Scottrade ($7). Most other brokers have fees between $9 and $25 per trade, but will lower their fees if you make a certain amount of trades per year, or if you have above a certain amount ($) in your investment portfolio with them.

Commissions are one item, but most companies blatantly advertise these fees, and there are usually no hidden items behind them. However, there are some pesky fees that may arise for various items such as inactive accounts, annual IRA fees, and fees to close an account. Schwab’s online broker firm is one of the best for customer service and investment research, but charges $95 to close your account, $2.50 to send you an old statement, and $50 to obtain a stock certificate directly from Schwab. According to Kiplinger, Vanguard, OptionsXpress and Siebert are the best at minimizing these “nickel-and-dime fees.”

Here is Kiplinger’s Personal Finance Online Broker Ratings for a $50,000 account:
1)optionsXpress, 2) Muriel Siebert, 3) Wells Fargo, 4) Firstrade, 5) Fidelity, 6) Vanguard, 7) TradeKing, 8) Schwab, 9) E*Trade, 10) Scottrade, 11) TD Ameritrade.

Please look for future posts at Fanelli Finance for further breakdown of online brokers, and a more detailed description of each.
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It's World Cup time, which means billions of $ in advertising

I am a huge soccer fan. The FIFA World Cup is the most watched sporting event of all time, no matter what any American naysayers have to say about it (fyi - I am American and love soccer). I just got done watching Germany beat Costa Rica 4-2 in a goal scoring frenzied game, and am currently watching Ecuador v. Poland, while hard at work of course. The World Cup also means huge amounts of advertising dollars spent throughout the world. Adidas is one main global sponsor, and American companies like McDonald's and Anheuser-Busch spend hundreds of millions of dollars for World Cup sponsorship rights.

I saw a great World Cup spreadsheet at http://www.2006fifaworldcup.co.uk/downloads.php, in which you can input the scores of all games, and it will automatically calculate the standings! Pretty cool stuff. Go USA!
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“I want a large tax refund”…..No you don’t……

Here is a typical conversation between me and one of our employees at our company.

“YOU didn’t take enough money out in taxes out of my paycheck this year, and now I have to pay when I am filing my tax return.”

This statement makes me chuckle a bit, because it is very typical of an uninformed employee. I do like when someone asks this, because then I can give my dissertation on employee tax withholding and tax refunds in general. Another statement I get is, “I want to make sure that I get a large refund when I file my taxes, because I can use this money to pay for…..” This statement actually makes me want to vomit (sorry so graphic).

So, let’s address these two items. First, the employee is responsible for the amount of tax withholding from their paycheck. This is generated by that W-4 form that you fill out when you are hired, and most people don’t ever think about it or change it ever again. The more allowances you claim, the less is withheld. My goal is to “break-even” on my tax return, which I just about successfully did for 2005, having to pay approx. $100 to federal and state. Here is my rationale. If you get a large refund from your tax return at the end of a given year, which means you paid too much in taxes throughout the year. Therefore you essentially loaned the government your money for the entire year, and gained exactly 0% interest on that money. Just think, if you had that money throughout the year you could invest it and make money on the interest and/or appreciation in your investment.

As stated above, you, the employee, are responsible for this. Each individual should consult a tax professional (or review it yourself) to determine how much you should withhold from your paycheck in taxes each pay period. If this amount needs to be changed from your current amount, fill out another W-4 form, which can be attained from your employer or at www. Irs.gov and elect the appropriate amount of allowances, and even withhold an “additional amount” if needed. See what’s changed each year. Did you purchase a new home? Did you have large capital losses? Did you get a raise or earn less than you did the year prior? All of these items will change your taxable income.

The easiest way to check your withholding is by using the IRS Withholding Calculator, which gives you a step-by-step process through the calculation.

The Withholding Calculator can be found here.

A printable W-4 form can be found here.

I hope this helps, and if you have any comments, questions, or concerns, feel free to comment!
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CNN Money Five Tips: Stocks are down, but rates are up = opportunity

Gerry Willis, a CNNMoney.com contributing columnist has five personal finance tips for the current market environment. It involves being patient with your stocks and mutual funds, and getting your cash out of traditional savings accounts, and into high-yielding savings accounts, such as with online banks. Her five tips are as follows:
1.) Don’t be asleep at the wheel
2.) Hands off your 401k
3.) Protect your emergency fund
4.) Catch the CD fever
5.) Get into bonds

You can read this entire article here. If you are a buy-and-hold investor, like most of us, the key to investing during a down market is patience. Keep pouring money into the stock market even when the market is down, and remember, the only time you need to worry about the exact state of the market on a particular day is when you are about to retire. (Notice I am not talking to all of you day-traders out there)
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