The rule of investing success

From: Internet

THE RULE

You must have stocks and bonds in your investment portfolio

Asset allocation

TYPE	Age	Stocks	Bonds
GROWTH	40s or younger	70%	30%
BALANCED	50s to 60s	50%	50%
CONSERVATIVE	70s or older	20%	80%

Or simply

% stocks = 120 - age

Index mutual funds

You really only need 3 mutual funds to cover entire stock and bond market.

1) Total US market stocks index fund

2) Total foreign stocks index fund (10% to 15% of your stock portfolio, most large US companies already are global company.)

3) Total bonds index fund

Asset allocation with Vanguard index funds

From Morningstar.com

Assuming you want to build a portfolio of 70% stocks and 30% fixed income

%	Index funds	ETF
50	VTSMX	VTI
20	VGTSX	-
25	VBMFX	BND

Please note that you could easily build a similar portfolio with all Fidelity funds.

Free tools for asset allocation

From: Internet

Moringstar: Instant X-ray

Tip: If you have ETF in your portfolio, enter its corresponding mutual fund instead.


SEC: Asset Allocation 101


Iowa Public Employees Retirement System: Online Calculator

Five Basics for Building a Solid Financial Future

From nytimes.com

0. Live within Your Means. And start an emergency fund.

1. Simplify Your Investments. Allocate your investments among index funds. Reallocate occasionally.

2. Occasionally Pay For Help. Discipline in investing is worth paying for. Also, get help on taxes and financial planning.

3. However, there is a lot of good advices are on Internet.

4. Automate everything.

5. Communicate. Discuss your finances with your family.

5 BIG goals in your life

Updated: 5/18/08
TNS reported that millionaire houldholds in US raised to record-breaking level of 9.9 million.

Posted: 6/9/07
Source: Amanda Gengler, Josh Hyatt, and Penelope Wang of money.com

Become a millionaire

About 9.3 million U.S. households (out of 114 million households) have a net worth of at least $1 million, excluding primary residence.

However, it's not as hard to become a millionaire as you might think.

1. Start early and make saving automatic
2. Make full use of any tax benefits for your savings
3. Invest in stock markets - the long-term rate of return for stocks is ~9%.
However, 46% of millionaire households also own real estate as investment.
4. Boost your earning power
Most (32%) wealth of millionaires comes from job earnings.
5. Don't stop saving, keep going even after you hit the $1,000,000 mark.


Own your dream home (i.e. 2nd home)

1. Save the estimated monthly payment
2. Tap your primary home
3. Take advantage of the buyer's market
4. Go in with family and friends


Send your kid to Harvard (or any really expensive school)

Try to save a third of the bill; the rest should come from financial aids, student loans, and your future incomes.

1. Start to save now
72% of parents think their kids could get merit aid - but only 28% of kids actually do.
2. Save in a 529
3. Plan for financial aid
4. It really doesn't have to be Harvard!
Success in life has more to do with overall ambition than where you go to school.


Retire early

1. Save, save, save
2. Live less than large - saving has to be your first priority.
3. Be aggressive with your portfolio
4. Bank your extra income
5. Design a post-retirement career


Launch your own business
Starting a company is hard. But if you succeed, you're on your way to financial independence.

1. Write a business plan
2. Go sell something
3. Look for smarter advisers
4. Warn your family
It will take you three years make a profit.
5. Expect the unexpected

Fidelity's asset allocation strategies

Source: Fidelity

Why we need to allocate our portfolio:






The following table shown the updated annual returns from 1926 to 2007

FI vs Stocks	100:0	80:20	50:50	30:70	15:85
Average return	3.7	6.2	8.2	9.2	9.9
1 yr best	15	31	77	110	136
1 yr worst	-0	-18	-41	-53	-61
5 yr best	11	17	22	27	32
5 yr worst	+0	-0	-6	-10	-14

Fidelity mySmart Cash account in Quicken program

Source: Fidelity Investments

By default, Quicken treats mySmart Cash account as an investment account.

Q: Can I designate a mySmart Cash Account as a checking account in Quicken?

A: Quicken recognizes a mySmart Cash Account as a checking account when you follow these steps:

From the Main Menu in Quicken, choose Tools > Accounts List

Select the investment account to which you'd like to add a linked checking account, then click the Edit button.

On the General Information tab on the Account Details window, choose "yes" to "Show cash in a checking account." Quicken will prompt you to back up your data file.

Once the backup is complete, the linked checking account is created in Quicken with the same name as your investment account, plus the suffix "Cash." Click the OK button to save your changes.

Quicken converts all transactions in the investment account to their transfer equivalents. For example, "Buy" transactions are converted to "Buy X" transactions, and "Sell" transactions are converted to "Sell X" transactions.

Online tools for your taxes

Online tools from IRS

Where is my Stimulus Payment can show the status of your tax rebate check or deposit.

IRS recommend checking the Payment Schedule prior to using this online tool since your payment information will not be available on this tool until the time that your payment is scheduled.

Where is my refund can show the status of your tax refund check or deposit.

New interest rate for US savings bonds

Treasury Direct released new interest rates for the saving bonds:

Series I savings bonds will earn 4.84% for next 6 months; however, the fixed rate is 0.00%!

I Bond earnings rate is a combination of a fixed rate, which applies for the life of the bond (30 years), and the semiannual inflation rate.

For the I bonds purchased from May 1 of 2008 to October 31 of 2008, their earning rate will only match the inflation rate.

Also, series EE savings bonds purchased from May 1 of 2008 to October 31 of 2008 will earn 1.20% for the life of the bond (30 years).

However, if the EE bond does not double in value as the result of applying the fixed rate for 20 years, the U.S. Treasury will make a one-time adjustment at original maturity (20th year) to make up the difference.

Is there any reasons to buy series EE instead of series I saving bonds?

Rebate check from IRS will be earlier than planned

Updated 2:

I got mine deposited on 5/1/08

Updated 1:

The IRS started making the direct deposits on Monday with the goal of completing 800,000 payments each day over the first three days of this week. No deposits will be made Thursday while the IRS prepares a big batch of 5 million direct deposits scheduled on Friday.

First week:
4/28/08 - 800,000 direct deposits
4/29/08 - 800,000 direct deposits
4/30/08 - 800,000 direct deposits
5/1/08 - 0
5/2/08 - 5,000,000 direct deposits

From the news:

The rebate checks will be deposit or mail to us 1 week earlier.

Direct Deposit Schedule

Last two digits of your Social Security number:
00 – 20 --> April 28
21 – 75 --> May 2
76 – 99 --> May 9

Check by Mail Schedule

Last two digits of your Social Security number:
00 – 09 --> May 9
10 – 18 --> May 16
19 – 25 --> May 23
26 – 38 --> May 30
39 – 51 --> June 6
52 – 63 --> June 13
64 – 75 --> June 20
76 – 87 --> June 27
88 – 99 --> July 4

Of course, you have to file your 2007 returns early enough.