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Highlights of the January 2008 Issue of MONEY
[Full stories also available online at www.CNNMoney.com]
THE 28 BEST MONEY WEBSITES, by Joe Light, Ismat Sarah Mangla, and Pat Regnier, page 66
Holographic stockbroker? Maybe not. But these websites bring a virtual world of speed, simplicity, and intelligence to your financial life.
Networks, blogs and user-review sites are transforming the "social web" from the province of crackpots and cranks to a source of genuinely useful personal-finance information and opinion. Unfortunately, the number of sites that waste your time and give bad advice is expanding too, and no Google algorithm measures wisdom. That's where MONEY (printed on paper, no less) comes in. We've tested sites and consulted experts and users to create an easy-to-follow guide to where to go and what to do once you get there. Welcome to the future of your money. It works.
MILLIONAIRES-IN-CHIEF, by Marlys Harris, page 88
The Top White House contenders are a lot richer than the rest of us. But a review of their finances shows they make the same money mistakes we all do.
In this great nation, any boy or girl can grow up to be President, but it sure helps to get rich first. The seven front-runners, those with the highest standing in the polls and the biggest campaign troves, all have assets that would place them in the nation's top 10% of households, and most of them in the top 0.5%. As the campaign unfolds in the coming months, you're going to hear a lot about money: which candidate raised the most cash, who it came from and what conflicts of interest those contributions could pose. But there's another financial story — and this is where MONEY comes in — about the candidates' personal fortunes and how they manage them.
MAKE THE RIGHT CALL, by Janice Revell, page 82
You face tough financial choices all the time. Should you pay off your mortgage or invest? Buy or lease a car? Take Social Security now or later? For the answers, let's run the numbers.
As you invest your money, shop for a home or tackle any one of the many financial decisions you have to make over your lifetime, do you sometimes wish you'd paid more attention in math class? Do you find yourself having to "run the numbers" and wondering how? To help, MONEY has taken six common financial quandaries and done the math for you. And this guide will walk you through the caveats as well as the calculations.
- Pay off a credit card OR fund your 401(k)
- Lease a car OR buy a car
- Save in a Roth 401(k) OR a regular 401(k)
- Prepay your mortgage OR invest
- Buy a home OR rent a home
- Take Social Security early OR late
CHRISTOPHER BROWNE: THE PRINCE OF VALUE, interview by Eric Schurenberg, page 76
Christopher Browne traces his investing approach directly back to Warren Buffett's guru, Ben Graham. Guess what? It still works.
If there's such a thing as an aristocracy of American investing, Christopher Browne is a full member. He's one of five managing directors of Tweedy Browne, a firm co-founded by his father, who brokered stock trades for Benjamin Graham, the creator of modern securities analysis, and that holds three mutual funds that are pure examples of value investing—buying out-of-favor stocks on the cheap. Graham's buy-cheap discipline kept value funds, including Tweedy Browne's, out of tech stocks during the dotcom bubble; and while value funds have lagged lately, they still have the best five-year return of the major investing styles. In a recent chat with MONEY managing editor Eric Schurenberg, Browne explained why.
THE 4% SOLUTION, by Michael Sivy, page 78
The plunge in some of the market's highest-yielding stocks has created a buying opportunity for retirement investors. If you want income for life, it's time to pay attention.
Recent turmoil in the stock market may be frightening, but the sell-off could turn out to be a blessing in disguise, especially if you're in or nearing retirement and are worried about generating income from your portfolio. That's because several key groups of equities, especially the blue-chip financials that have been taking a beating of late, are so depressed that they're offering yields not seen since the end of the bear market. At the same time, other stocks that have always paid rich dividends are becoming more attractively priced. Over the next several months, therefore, you'll have the chance to construct a safe, diversified retirement portfolio of blue-chip stocks paying out 4% in dividends. MONEY explains.
BREAK FREE FROM YOUR CALL CARRIER, by Joe Light, page 17
It's getting easier — and cheaper — to change wireless plans. Here's how to tell if switching is the right call.
Cell-phone service providers have long tried to handcuff customers to their contracts. If you switched plans, they'd tie you down to a longer contract; if you canceled, they'd stick you with a larcenous fee. But now, pre-empting federal investigations, the country's five biggest carriers — AT&T, Verizon, Sprint, T-Mobile and Alltel — are loosening the shackles. Should you take advantage of your newfound freedom? MONEY investigates.
HOW THEY'LL SAVE SOCIAL SECURITY, by Walter Updegrave, page 19
The candidates reveal their plans (sort of).
What will Social Security look like when you retire? It may depend on who wins the White House. The next administration will have a big job ahead given that in 2017 the system begins paying out more than it collects in payroll taxes and the famed trust fund is projected to run dry in 2041. MONEY canvassed the leading candidates.
YOUR MONEY & YOUR LIFE, by Jean Chatzky, page 26
A Smarter Way to Pick Your Charity: When you're choosing a cause to support, act as if you're making an investment—because you are.
Like most donors, you probably spread your charitable contributions among several groups that you know or that your friends ask you to support. But when the request for help goes beyond the routine $50 or $100 check or if you decide on your own that you'd like to do something a little more significant, how do you know your money is going to the right cause? MONEY explains.
HELP! OUR KIDS ARE DRIVING US BROKE, by Kate Ashford, page 31
How to master the fine art of saying no to your little darlings.
All kids need stuff, and there's no reason to completely deprive them of things that they'll enjoy and even show off to their peers. But if other financial goals, like retirement or college savings, are getting short shrift — or if you're feeling weary of the never-ending stream of "I wants" — it's time to get your spending under control. MONEY tells you how:
- Examine your motives
- Stop the whining
- Teach money management
- Save on the must-haves
- Nip surprises in the bud
PLUS: Three fast fixes: A better spending plan.
DO IT NOW, by Alexis Jeffries, page 36
From lost papers, found money.
So you've permanently mislaid (okay, lost) that savings bond Grandma gave you as a kid. MONEY explains how to get a new copy of it and other important documents.
BOY, HAVE THEY GOT FREEBIES FOR YOU, by George Mannes, page 47
Home builders are throwing in the kitchen sink. Should you take it?
Just because you're offered a deal doesn't mean it's a good one. Some giveaways come with costly strings attached while others are hard to evaluate. Most important perhaps, you have to be careful not to let your lust for a car or a granite countertop — or even a peacock — overcome your goal of getting the best possible price on the home you want to buy. Rather than waste valuable bargaining power on such gewgaws, remember MONEY's rules:
- Make 'em show you the money
- Or go for the next best thing
- Calculate the offer's true value
- Watch for the gotchas
- Know what's in it for the broker
- Keep the negotiations friendly
- Get ready to walk
DIGITIZE YOUR MEMORIES, by Wilson Rothman, page 106
Dust off your old photos: There's now an easy way to get them onto your computer.
With a flatbed scanner and a whole lot of patience, you could scan in your own prints. But in the past few years, a host of scanning services have popped up, all eager to do the job for you. You send photos or negatives and the companies burn the images to a CD or DVD, the contents of which you can upload to your computer, no sweat. MONEY uncovers the best companies to care for your photos.
HOW SUPER IS THIS MANAGER?, by Penelope Wang, page 57
As market fears rise, "130/30" funds claim they can boost returns but not risk. Maybe you've heard that one before.
In a jittery market like this, when the Dow plunges more than 300 points in a single trading day and then gains it all back in another, it's anyone's guess which way stocks are headed. But if there's one thing you can count on, it's that Wall Street will try to find a way to capitalize on your uncertainty. Enter so-called 130/30 funds. If you haven't heard of them, you will soon — especially if this aging bull starts to deliver subpar returns. That's because this new breed of souped-up funds using strategies hedge funds employ, claims to have the power to beat the market indexes over the long run no matter how they perform. You believe in superheroes, don't you? MONEY investigates.
DEPARTMENTS
START: Behind the Buzz Testing the Registered Traveler program. Do the Right Thing Is it okay to ask for the gift I really want — money? PLAN: The Boom Years Builders are courting boomers with resort-like facilities. But do you want to live with oldsters only? Savings and Credit Despite Fed rate cuts, you can still lock in high yields. HOME: Spiff-ups for all Seasons A guide to protecting your home's value. SPEND: Burn Calories, Not Cash Get the best value on home cardio equipment. INVEST: The Intelligent Investor The good and bad of ethical investing. Sivy on Stocks Spots of hope in a rough month.
MONEY is available in digital format. To access this version go to http://digital.money.com
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Phil DiIanni
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phil_diianni@timeinc.com
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