Job Campaign Tips from Turner

Now that the U.S. Mid-term elections are over we can all go back to our everyday lives. In order to be able to save and invest we need a job.

Our main media outlets do not talk nearly enough about China or India. There are a lot of simple things you can do to learn more. Chances are you will report to an Indian or Chinese person at work one of these days. You will have an easier time getting a job if you know a lot about Chinese and Indian current events and culture.

Many cities have Citizens Diplomacy opportunities. A business or a city organization is hosting someone from another country and these people would like to meet Americans over dinner. In Chicago we have World Chicago and the Chicago Council on Global Affairs.

Google “Citizens Diplomacy and the Name of Your City”. If you do not obtain useful results contact the Chicago Council on Global Affairs http://www.thechicagocouncil.org/ or the http://www.careers.state.gov/contact.html.

Read The Economist Magazine on a regular basis http://www.economist.com/world/asia/. Check whether your local library (Yes I am sending you to the library) has The Economist in print.

The US State Department has excellent Country information
http://www.state.gov/misc/list/

Here’s something completely different - If you are frustrated over banging your head against the wall consider volunteering overseas for a while. There are numerous organizations that will gladly invite you to work. You will be able to feel useful and gain valuable skills. The cost of living is much lower than here.

PEACE Mexico north of Puerto Vallarta http://www.peacemexico.org/

Entreamigos North of Puerto Vallarta http://entreamigos.org.mx/

The International Friendship Club of Puerto Vallarta does an enormous amount for a large number of local charities http://www.ifcpv.com/

Place Eggs in Different Baskets

In season 4 of Brothers and Sisters, fictional character Holly Harper, who was a shrewd businesswoman, fell for a Ponzi scheme and lost her entire investment. Ponzi Scheme is named for Charles Ponzi a real life person, who in the 1920’s promised investors huge investment returns. He took money from one investor to pay huge returns to an earlier investor. Many investors lost enormous amounts of money. Eventually he was caught.

When I teach Investment classes I talk about Diversification. Many people advise diversification among types of investments. Example – Susie Sincerety invested $25,000 to buy shares of Apple 2 years ago. Her investment doubled and then she sold her shares. 3 months later she invested $50,000 into Apple again not thinking that in a month she needed the money to give her daughter for a deposit on the home she purchased. The home purchase date approached, Apple went down and Susie sold at a loss.*

Diversification – even investments that have once done very well, extremely well can go down when you need the money. Invest in different companies or in different mutual funds. You might have some investments in

Advertising
Food and Beverage
Construction
Consumer Products.
Financial Companies
Pharmaceuticals
Precious Metals
Shipping
Technology
There are MANY other investing categories.

Not everything goes up or down at the same time.

In addition to investing in different types of industries I recommend people divide up the money have invest through different advisors. It takes some time to do this. The first time you invest you will invest through one advisor. Make some money and then invest some of the gains with a different investment company. I talk about diversification and how to choose a financial advisor in much more detail in my upcoming book.

*Please note since 2004 Apple has been one of the most successful stocks in history.

"Wall Street Money Never Sleeps"

I saw “Wall Street Money Never Sleeps” with Michael Douglas, Carey Mulligan, Shia LaBeouf, Susan Sarandon, Frank Langella and Josh Brolin. Depressing. If you do go see it pay special attention to 2 scenes-

1 Gordon Gekko (Michael Douglas’ character) speaks before a group of college students. He warns about investing getting out of control. This is one of the few scenes in which financial matters are spoken about in plain English. I talk a lot about investing with moderation in my classes and my upcoming book.

2 Gordon Gekko tells his daughter’s fiancé, Jake (Shia LaBeouf’s character) of the Dutch Tulip bubble in the 1600’s. Investors, or better speculators wildly bet on the price of the tulips going up only to find the price came crashing down. Many people sold their land and other major assets to purchase the tulips and lost everything. I show how to avoid such situations in my classes and my upcoming book.

For showing times go to http://www.fandango.com/ and type in your zip code.

“Wall Street Money Never Sleeps” also shows people in the financial know getting caught up in the transactions and manipulating others. Their eye pupils get wide and you can almost see the Adrenaline rush to their hearts, just thinking about all the money they will make. In my experience precious few of those people teach others how to make money. I started this website to share what I have taught myself and been taught. No, I am not a Wall Street Market Maker but I have already helped a lot of people get into the swing of things.

Entrepreneurship/Early Stage Companies
I have known some people who teach entrepreneurs how to make their businesses more profitable. In the 1990’s I organized financial seminars for entrepreneurs and investors in downtown Chicago. Tim Krauskopf, Art Roldan, Jeff Coney, Scott Woodard, Tom Parkinson, Marc Achler, Pat McGivney, Wally Cornett, Jerry Mitchell, Ellen Carnahan, Dan Howell, J.B. Pritzker, the late, Don Frey immediately come to mind.

J.B. founded the Chicagoland Entrepreneurial Center www.chicagolandec.org.

The MIT Enterprise Forum
http://www.mitefchicago.org/
The MIT Enterprise Forum is also in South Florida, Pittsburgh, D.C., San Diego and others.

The Illinois Technology Association. For similar organizations in your area just Google “City or State Name Technology Association”I served on its predecessor’s (Chicago Software Association) Entrepreneur’s Business Plan Advisory Board.

Chicago's Shorebank Shut Down Today

August 20, 2010

Chicago's Shorebank was closed today by governmental financial regulators. This action, although necessary, makes me very sad.

Shorebank, founded in 1973, was for idealistic folks working in Chicago's financial world, our pride and joy. I worked for a private investor during the 1990's and met some people who were then working at ShoreBank. For many of us it was a dream to work there because of ShoreBank's mission to serve low income communities. There was a branch (closed down now for a few years) about 1 mile from my home which I often pass on the way to the city.

According to AP, Shorebank was the 114th bank to fail in 2010.

Now about the FDIC-Federal Deposit Insurance Corporation. When we deposit money in a U.S. bank it is vital to first check whether the bank is insured by the FDIC. You can look for the FDIC sign in your bank's window. You can also go to the FDIC website

http://www.fdic.gov/about/affaq.html

The Frequently Asked Questions section is short and easy to read. On the Home Page is a link "Is My Account Fully Insured". You can click on this link and choose from a list of dozens of banks that have failed (listed in alphabetical order).

Hay bastante informacion en la pagina web del FDIC en espanol.

The Chairman of the FDIC, Sheila Bair, wrote an educational, entertaining book for young children, Rock, Brock and the Savings Shock.

I will have a chapter in my upcoming financial book about How to Talk to Your Kids about Money.

Respectful Comments and Questions are Welcome

Maggie Magilicutti Holds Onto JC Penney

JC Penney announced on Friday, August 13, 2010, that it made money in the 2nd quarter of 2010 but is concerned about future sales in 2010. The price of the stock went down 5% that day.

When I teach seminars about the stock market, I say the stock market is sometimes described as being about fear and greed and that’s it.
I say the stock market is about psychology and math – and I don’t mean Calculus.

JCPenney’s 52 week high was $37.21 per share. On Friday it reached a 52 week low. Maggie Magilicutties* bought JC Penney for $26 per share in 2004. Over the years she made $40 in dividends which were reinvested in the stock (which means that with the dividend monies JCPenney paid to shareholders, Maggie elected to buy more JCPenney stock).
Maggie’s sister, Meanie Magilicutties, yelled at her on August 13th, saying “You should have sold a long time ago.” If that stock fell 5% in one day it holding onto it is like gambling. “Look”, Maggie replied “I am holding onto the stock”.

Discussion
Some people hold onto stocks for over 10 years. Others buy a stock and sell it on the same day. The vast majority of people who buy and sell on the same day lose money.

Maggie has done her research and learned that JC Penney is a well run company. Some of the analysts recommend to sell and others recommend to buy, still others say ‘Hold’.
Maggie believes that the U.S. will get past these tough times and that JCPenney will be well positioned to do very well, once U.S. consumers begin to buy again. Maggie has friends who sold their shares of JCPenney on Aug. 13th because they saw the stock taking a steep dive that day. Often this is called panic selling.

I often tell my stock market students, if you can not sleep at night wondering about how a stock will perform, it is not worth it and you will most likely lost money.

Vocabulary When a person owns stock, s/he often receives a dividend 4 times per year. This is the company’s way of saying “Thank you for believing in us”. The stockholder can decide whether to receive the dividend as money or as a fraction of the same stock. Over time, these fractions of stock can often add up nicely and become whole. Either way, some investors learn about the dividend before deciding to invest.



NOTE The author of this blog, is a financial educator, not a stock broker and therefore can not make stock recommendations. The purpose of this blog is to educate. Her book, Don’t You Go Broke Learning about Money will be forthcoming.


* Maggie Magilicutties is a made up person for educational purposes.