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This issue contains information on making your
money work for you, my Finance for New Engineers
course, a Funny Story on "Getting Rich with a Worm
Farm," a Children's Joke to tell your kids, and tips on
filing your next tax return. I will be publishing the
newsletter every quarter this year. Enjoy!!
| Making Your MONEY Work For You |
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Most people do not invest short term cash very wisely.
Leaving a $5,000 extra balance in your cash account
that does not earn interest is bad. That money can be
invested in short term Money Markets and make a
return for you. Here are the funds with the best yields
(returns).
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| Investing Acumen Test |
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Take this test to determine your financial investing
IQ.
- Real Estate investments (like houses, land,
buildings) have averaged a 6.3 percent return since
1968.
- Banks foreclose on less than 1.5% of residential
mortgages, according to Mortgage Bankers
Association of America.
- If you pay biweekly (every two weeks) payments on
your house mortgage, it will be the equivalent of
paying 13 payments on your house note for the
year.
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| Shameless Self Promotion |
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"NEW" ENGINEERS COURSE
Title:
Finance, Ratemaking and Business Case Analysis
for "NEW Engineers"
Many managers have asked me to develop a course
for Engineers new to the utility business. A new
engineer is a person with less than five years with the
utility. The course is oriented around the things a
person new to the Utility industry would need to know.
This course is HIGH IMPACT material from my top five
courses of what engineers need, and want, to know.
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| Facts on Filing Your Tax Return |
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Here are some important facts about filing your
2007 income tax return.
Filing Deadline: April 15
Filing Extension: You can get
an automatic extension to Oct. 15 by filing Form 4868
by April 15. Still, any tax owed must be paid by April
15.
IRS forms and publications:
Download from the IRS Web site - irs.gov -
by navigating to "Forms and Publications", order by
mail at 1-800-829-3676.
Tax questions: The IRS Web
site has links to every tax topic. Or call 1-800-829-
1040 for individuals, 1-800-829-4059 (TDD) for those
with hearing impairments, and 1-800-829-4933 for
businesses.
Filing help: The IRS Volunteer
Income Tax Assistance program offers in-person help
to people who earn less than $40,000. To find a VITA
site, call 1-800-829-1040. AARP offers a similar
program for low-to-middle-income people, with
special attention to those 60 and older. To find an
AARP Tax-Aide site, call 1-888-227-7669. Members
of the military can check with their legal office for
assistance.
Free e-filing: The IRS' Free File
Alliance with tax software companies allows taxpayers
with incomes of $54,000 or less to prepare and file
returns online for free if they access the tax-prep
program through the IRS Web site.
Refunds: The quickest way to
get your refund is to file electronically and have your
money deposited directly into an account. Paper tax
returns and refund checks can take up to eight
weeks. If requested, the IRS will split a taxpayer's
refund into three financial accounts, such as checking,
savings and retirement accounts.
To check refund status: Go to
the IRS Web site and click on "Where's My Refund?"
on the left. Or call 1-800-829-4477.
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| Lucian's Solutions Q&A |
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Question: I am interested in DRIPS. How do I
get started?
Answer: Most people do not know
what "DRIPS" means. It is an acronym for Dividend
Reinvestment PlanS.
DRIPS are sponsored by big companies for the
purpose of attracting investors who want to hold their
stock for the long term. When you buy a share of stock
from such a company, then they do not send you your
dividend. Instead the company keeps your cash
dividend and buys you additional shares of stock.
For example, assume you own a bunch of shares of
Wal-Mart stock. Assume further that the dividend on
those shares was $100 for the quarter when a share
of Wal-Mart stock was selling for $50. Instead of Wal-Mart sending you the $100 cash for your dividend, Wal-Mart would give you 2 more shares of Wal-Mart stock
with your $100 cash dividend. If you owned 100
shares before the dividend, you would own 102
shares of Wal-Mart stock after the dividend. Wal-Mart
would automatically do this every quarterly dividend,
assuming, of course, that you had signed up for their
Dividend Reinvestment Plan (DRIP). Over time, the
number of these shares piles up and increases the
value of your portfolio.
How do you sign up for the DRIP in a company? First
you have to find out which companies have a DRIP. I
suggest you contact Vita Nelson, editor of Money
Paper. They specialize in advice and investing in
DRIPS. She is not a financial advisor. She will send
you the names of companies, or she will tell you
which Money Paper issue contains the list of all the
DRIP companies. Many large companies have
DRIPS. Once you have the name of the company, you
can contact them via email and follow the simple
steps to sign up with their DRIP investment program.
The DRIP company you choose will be very
cooperative with you because they really promote
these programs to attract long term investors.
If you want more information about DRIPS, find the article I
wrote on DRIPS and read it. You can easily surf the
Internet to find the article. I wrote it so long ago, I
forgot where it was published.
Question: Can you give me a general
guideline on when to do a Traditional IRA Versus a
Roth IRA?
Answer: This is a very complex question that is
dependent on you personal investment facts like age,
goals, and/or salary.
However, I would say the following guideline would be
a good rule of thumb.
Choose the Roth IRA if two things are true.
- First, are you at least 15 years away from
retirement.
- And secondly, are you willing to fully fund the Roth
IRA.
"Fully Fund" means to fund the Roth at the same level
as is allowed by the Traditional IRA. For example, if
the maximum funding allowed for the Traditional IRA
is $4,000.
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| Lucian's Funny Life Story |
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Worm Farm "Get Rich Scheme"
My dad was a Baptist preacher. He always needed to
make extra money because he was not paid much for
preaching. He came up with a number of plans to get
rich.
One day he came home and said, "I have
a great idea for making lots of money."
My mother said, "What is the idea?"
Dad responded, "A Worm Farm."
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Joke of the Day |
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While walking down the street one day, a US
senator
is tragically hit by a truck and dies.
His soul arrives in heaven and is met by St. Peter at
the entrance.
"Welcome to heaven," says St. Peter. "Before you
settle in, it seems there is a problem. We seldom see
a high official around these parts, you see, so we're
not sure what to do with you."
"No problem, just let me in," says the man.
"Well, I'd like to, but I have orders from higher up.
What we'll do is have you spend one day in hell and
one in heaven. Then, you can choose where to spend
eternity."
"Really, I've made up my mind. I want to be in
heaven," says the senator.
"I'm sorry, but we have our rules."
And with that, St. Peter escorts him to the elevator and
he goes down, down, down to hell. The doors open
and he finds himself in the middle of a green golf
course. In the distance is a clubhouse and standing
in front of it are all his friends and other politicians
who had worked with him.
Everyone is very happy and in evening dress. They
run to greet him, shake his hand, and reminisce about
the good times they had while getting rich at the
expense of the people. They play a friendly game of
golf and then dine on lobster, caviar and
champagne.
Also present is the devil, who really is a very friendly
guy and who has a good time dancing and telling
jokes. They are having such a good time that before
he realizes it, it is time to go.
Everyone gives him a hearty farewell and waves while
the elevator rises...
The elevator goes up, up, up and the door reopens on
heaven where St. Peter is waiting for him.
"Now it's time to visit heaven."
So, 24 hours pass with the senator joining a group of
contented souls moving from cloud to cloud, playing
the harp and singing. They have a good time and,
before he realizes it, the 24 hours have gone by and St. Peter returns.
"Well, then, you've spent a day in hell and another in
heaven. Now choose your eternity."
The senator reflects for a minute, then he
answers: "Well, I would never have said it before, I
mean heaven has been delightful, but I think I would
be better off in hell."
So, St. Peter escorts him to the elevator and he goes
down, down, down to hell. Now the doors of the
elevator open and he's in the middle of a barren land
covered with waste and garbage.
He sees all his friends, dressed in rags, picking up
the trash and putting it in black bags as more trash
falls from above.
The devil comes over to him and puts his arm around
his shoulder.
"I don't understand," stammers the
senator. "Yesterday I was here and there was a golf
course and clubhouse, and we ate lobster and caviar,
drank champagne, and danced and had a great time.
Now there's just a wasteland full of garbage and my
friends look miserable.
What happened?"
The devil looks at him, smiles and says, "Yesterday
we were campaigning...... Today you
voted."
Children's Joke: Joke to
Tell Your
Children
How do you catch a squirrel?
Answer: Sit
under a tree and act like you are a nut!
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