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Sunday, 30 September 2007

American Express Credit Cards

Also known as AMEX, American Express is easily one of the most recognized names in the world of credit cards. Even though many people have Visa or MasterCard credit cards, they are still interested in AMEX. With Visa, MasterCard, and AMEX being the most popular and preferred types of credit cards, they are all great although there are also differences between them as well.

Both Visa and MasterCard are methods of payment. Both will allow different businesses to accept credit card payments using their systems. Neither of the two issue credit cards on their own behalf, instead they rely on banks throughout the world to issue the credit cards for them, provide the credit, and then charge the interest. Your credit card bill goes to the bank, as Visa or MasterCard doesn’t see any of it.

AMEX on the other hand, is very different. American Express has their own payment system, and they also issue their credit cards directly to consumers. Unlike Visa and MasterCard, AMEX runs the entire show. Therefore, when a credit card says American Express on it, you instantly know who has issued the card, what payment system it has, and everything else you would need to know.

Even though MasterCard and Visa are used more throughout the world, American Express is always expanding their networks. Visa and MasterCard are used in over twenty five million locations over the world, including third world countries, which makes them global credit card payments. AMEX on the other hand, doesn’t quite reach this degree. It is a great credit card, although it isn’t used around the world in areas where the other 2 dominant credit cards are.

You can get AMEX credit cards with rewards, although you’ll need to be careful where you look and what you select. Normally, with Visa and MasterCard, you’ll have to look at hundreds of banks before you can find the best choice. With AMEX, you can look at their website and find out what they offer and what type of APR you’ll have to pay. Most of the time, you can find a credit card with low interest and a great spending limit - providing you have good credit.

AMEX also has several advantages that it offers customers in North America and Europe. The credit card is accepted widely in both areas, offering you credit cards with great features and very attractive looks. AMEX offers you great rates, good rewards, and excellent customer service as well.

American Express also offers you Blue, which is a newly introduced credit card that offers you increased security, no annual fee, and 0% APR for the first year or so. Depending on your credit, you may be able to get an extended period with no interest. After that time has expired, you pay low fees, which makes it a great credit card for anyone looking for a deal. Blue is the newest card from AMEX, and will rapidly become one of the best - due to it’s amazing features.

In the world of credit cards, American Express is one of the best. They offer you a variety of different credit cards, designed to meet just about everyone’s needs. You find them online or through a local provider, although online is the preferred way to go. Simply fill out your application, and if you have good credit, you’ll be approved. Before you know it, you’ll have a credit card from AMEX - and be ready to experience life in the fast lane.

Rebates – Reward or Rip Off?

Rebates have become increasingly popular in the last few years on a lot of items and certainly on electronic items and computers. Rebates of $20, $50 or $100 are not uncommon.

I’ve even seen items advertised as “free after rebate”. Do these rebates come under the heading of “too good to be true”? Some of them do and there are “catches” to watch out for but if you are careful, rebates can help you get some really good deals.

The way a rebate works is that you pay the listed price for an item then mail in a form and the bar code to the manufacturer and they send you a refund thus reducing the price of what you paid for the item except with a time delay of several weeks.


Rule #1. Rebates from reputable companies are usually just fine.

You can be pretty sure you will get the promised rebate from Best Buy, Amazon or Dell but you should probably not count on getting one from a company you’ve never heard of. If you really want the product and are OK with paying the price listed then buy it but don’t count on actually getting the refund.


Rule #2. Check rebate expiration dates.

Many times products will stay on the shelf of a retailer after the date for sending in the rebate offer has expired so check that date carefully.


Rule #3. Be sure you have all the forms required to file for the rebate before you leave the store.

Rebates will almost always require a form to be filled out, a receipt for the purchase and a bar code.

Rule #4. Back up your rebate claim.

Make copies of everything you send in to get your rebate including the bar code. Stuff gets lost in the mail all the time and if the rebate is for $50 it’s worth the trouble to back up your claim.

The 3 Things To Avoid When Emailing Your List

When you decide to have an opt-in list, it is not just a matter of sending your subscribers your promotional newsletters or catalogs. There are many things to consider in avoiding many complications. While there are so many ways you can make people subscribe to your list, there are also some things you must do to avoid subscribers from wanting to get off from your list.

Aside from that, you also want to avoid any problems with the law and your internet service provider or ISP. There are now many laws and rules that are applied to help protect the privacy of the internet users from spamming and unwanted mails. With the popularity of the electronic mail as a medium for marketing because of the low cost, many company’s have seized the opportunity and have flooded many people’s e-mail accounts with promotional mail.

But, with an opt-in list, you avoid this annoyance because people subscribe to the list; they want to receive the newsletters and promotional materials. They have consented to being on the list by subscribing themselves, just don’t forget to put an unsubscribe feature everytime in your opt-in list so that you avoid any confusion. There may be times when an email account was provided when the real owner didn’t want to subscribe.

It is essential that you keep your list clean and manageable. Arrange it by using the many tools and technologies available for your opt-in list. Do not worry; your investment in this marketing strategy is well worth it with all the coverage you will get which will likely be converted into sales then to profit.

Keep yourself and your business out of trouble and potential run-ins with the law and the internet service providers. Keep your operation legit and clean. Your reputation as a legitimate businessman and a legitimate site depends on your being a straight and true marketing strategist. As a tip, here are three things to avoid when emailing your list.

1) Take notice of your unsuccessful sends. These are the e-mails that bounce. Bounced emails, also known as undeliverable messages, are those messages that, for whatever reason, were not successfully received by the intended recipient.

There are bounces that happen or occur because the server was busy at that time but can still be delivered in another time. There are also bounces because the inbox of the recipient is full at that time. There are those bounce messages that are simply undeliverable ever. The reason for this is that it may be an invalid email address, a misspelled email address, or an email address that was abandoned and erased already.

Manage your list by putting markings on those that bounce. Erase an email account from your list so that you have an accurate statistics and records as to how many are actually receiving your mail. You may also want to check the spellings of your email addresses in your list. One common mistake is when an N instead of an M is placed in the .com area.

2) Always provide an unsubscribe feature in your site and an unsubscribe link in your mails. When someone in your list files a request to be unsubscribed, always take that request seriously. If you don’t take them off your list and keep sending them your e-mails, you are now sending them spam mail.

When you are reported as a spammer, you and your business can get into a lot of trouble. You can be reported to the authorities and maybe blacklisted by many internet service providers. You will lose a lot of subscribers this way and many more in potential subscribers.

3) Do not provide pornographic or shocking and disturbing content in your newsletters. It is hard to decipher the age of the recipient and many complaints may stem from these. Controversial issues also are to be avoided to not be branded by your subscribers. Stick to the nature of your site and business.

Always remember these tips in this article so that you can have a healthy relationship with your subscribers as well as be kept within the boundaries of what is allowed in sending mails to an opt-in list.

Top 3 Ways To Boost Your Affiliate Commissions Overnight

The ideal world of affiliate marketing does not require having your won website, dealing with customers, refunds, product development and maintenance. This is one of the easiest ways of launching into an online business and earning more profits.

Assuming you are already into an affiliate program, what would be the next thing you would want to do? Double, or even triple, your commissions, right? How do you do that?

Here are some powerful tips on how to boost your affiliate program commissions overnight.

1. Know the best program and products to promote. Obviously, you would want to promote a program that will enable you to achieve the greatest profits in the shortest possible time.

There are several factors to consider in selecting such a program. Choose the ones that have a generous commission structure. Have products that fit in with your target audience. And that has a solid track record of paying their affiliate easily and on time. If you cannot seem to increase your investments, dump that program and keep looking for better ones.

There are thousands of affiliate programs online which gives you the reason to be picky. You may want to select the best to avoid losing your advertising dollars.

Write free reports or short ebooks to distribute from your site. There is a great possibility that you are competing with other affiliates that are promoting the same program. If you start writing short report related to the product you are promoting, you will be able to distinguish yourself from the other affiliates.

In the reports, provide some valuable information for free. If possible, add some recommendations about the products. With ebooks, you get credibility. Customers will see that in you and they will be enticed to try out what you are offering.

2. Collect and save the email addresses of those who download your free ebooks. It is a known fact that people do not make a purchase on the first solicitation. You may want to send out your message more than six times to make a sale.

This is the simple reason why you should collect the contact information of those who downloaded your reports and ebooks. You can make follow-ups on these contacts to remind them to make a purchase from you.

Get the contact information of a prospect before sending them to the vendor’s website. Keep in mind that you are providing free advertisement for the product owners. You get paid only when you make a sale. If you send prospects directly to the vendors, chances are they would be lost to you forever.

But when you get their names, you can always send other marketing messages to them to be able to earn an ongoing commission instead of a one-time sale only.

Publish an online newsletter or Ezine. It is always best to recommend a product to someone you know than to sell to a stranger. This is the purpose behind publishing your own newsletter. This also allows you to develop a relationship based on trust with your subscribers.

This strategy is a delicate balance between providing useful information with a sales pitch. If you continue to write informative editorials you will be able to build a sense of reciprocity in your readers that may lead them to support you by buying your products.

3. Ask for higher than normal commission from merchants. If you are already successful with a particular promotion, you should try and approach the merchant and negotiate a percentage commission for your sales.

If the merchant is smart, he or she will likely grant your request rather than lose a valuable asset in you. Keep in mind that you are a zero-risk investment to your merchant; so do not be shy about requesting for addition in your commissions. Just try to be reasonable about it.

Write strong pay Per Click ads. PPC search engine is the most effective means of advertising online. As an affiliate, you can make a small income just by managing PPC campaigns such as Google AdWords and Overture. Then you should try and monitor them to see which ads are more effective and which ones to dispose of.

Try out these strategies and see the difference it can make to your commission checks in the shortest of time.

5 Ways To Improve Your Adsense Earnings

If webmasters want to monetize their websites, the great way to do it is through Adsense. There are lots of webmasters struggling hard to earn some good money a day through their sites. But then some of the “geniuses” of them are enjoying hundreds of dollars a day from Adsense ads on their websites. What makes these webmasters different from the other kind is that they are different and they think out of the box.

The ones who have been there and done it have quite some useful tips to help those who would want to venture into this field. Some of these tips have boosted quite a lot of earnings in the past and is continuously doing so.

Here are some 5 proven ways on how best to improve your Adsense earnings.

1. Concentrating on one format of Adsense ad. The one format that worked well for the majority is the Large Rectangle (336X280). This same format have the tendency to result in higher CTR, or the click-through rates. Why choose this format out of the many you can use? Basically because the ads will look like normal web links, and people, being used to clicking on them, click these types of links. They may or may not know they are clicking on your Adsense but as long as there are clicks, then it will all be for your advantage.

2. Create a custom palette for your ads. Choose a color that will go well with the background of your site. If your site has a white background, try to use white as the color of your ad border and background. The idea to patterning the colors is to make the Adsense look like it is part of the web pages. Again, This will result to more clicks from people visiting your site.

3. Remove the Adsense from the bottom pages of your site and put them at the top. Do not try to hide your Adsense. Put them in the place where people can see them quickly. You will be amazed how the difference between Adsense locations can make when you see your earnings.

4. Maintain links to relevant websites. If you think some sites are better off than the others, put your ads there and try to maintaining and managing them. If there is already lots of Adsense put into that certain site, put yours on top of all of them. That way visitor will see your ads first upon browsing into that site.

5. Try to automate the insertion of your Adsense code into the webpages using SSI (or server side included). Ask your web administrator if your server supports SSI or not. How do you do it? Just save your Adsense code in a text file, save it as “adsense text”, and upload it to the root directory of the web server. Then using SSI, call the code on other pages. This tip is a time saver especially for those who are using automatic page generators to generate pages on their website.

These are some of the tips that have worked well for some who want to generate hundreds and even thousands on their websites. It is important to know though that ads are displayed because it fits the interest of the people viewing them. So focusing on a specific topic should be your primary purpose because the displays will be especially targeted on a topic that persons will be viewing already.

Note also that there are many other Adsense sharing the same topic as you. It is best to think of making a good ad that will be somewhat different and unique than the ones already done. Every clickthrough that visitors make is a point for you so make every click count by making your Adsense something that people will definitely click on.

Tips given by those who have boosted their earnings are just guidelines they want to share with others. If they have somehow worked wonders to some, maybe it can work wonders for you too. Try them out into your ads and see the result it will bring.

If others have done it, there is nothing wrong trying it out for yourself.

8 signs it's time to change jobs before you get fired

By Anne Fisher, FORTUNE senior writer

Dear Annie: For the first time in my (16-year) working life, I dread coming to the office in the morning. It's gotten so bad that I can't sleep Sunday nights, and I think I might be getting an ulcer. Why? I took what I expected would be a great job - at least the pay is great - about a year ago, and since then I've felt more and more out of place.

My boss keeps giving me tasks that an entry-level hire, without half my experience, could do. He has also stopped including me in meetings where important decisions are made about my department's activities. (All my peers are invited.) To top it off, most of my colleagues have been avoiding me ever since an incident a few weeks ago when I questioned a practice that seemed to cheat one of our clients, and I'm starting to think I should have swallowed my ethics and kept quiet.

I don't want to look like a job hopper, but I'm not sure how much longer I can stand working here. What should I do? -Outcast

Dear Outcast: Yikes. According to Richard Bayer, Ph.D., chief operating officer of The Five O'Clock Club (www.fiveoclockclub.com), a national career-counseling network based in New York City, you would be smart to leave before you get sacked, or you lose your sanity, or both.

Over the years, Bayer has compiled a list of eight signals that usually mean your job is in jeopardy. "If you've noticed three or more of the warning signs, it's time to update your resume and start job hunting," he says.

From your e-mail, I'd say you are suffering from more than three. Check out the list and see if you agree.

1. You don't fit in. Your values don't match the company's. If your colleagues are "dishonest and focused on getting ahead regardless of legal or moral barriers," Bayer says, it's time to quit before an Enron-style scandal sinks the ship.

2. Your boss doesn't like you and you don't like him or her. If your boss never asks your opinion, and never wants to chat or have lunch with you, and if you disagree with her agenda and dislike her style, your days are numbered. Adds Bayer: "If you've ever done something that undermined your boss, you might as well get out now."

3. Your peers don't like you. Feeling isolated, gossiped about, and excluded from the inner workings of the organization is a very bad sign, as is feeling that you're not part of the team and wouldn't socialize with your colleagues even if they asked you.

4. You don't get assignments that demonstrate the full range of your abilities. "Watching all the good assignments go to others, while you're given the ones that play to your weaknesses or are beneath your professional level, should tell you something," says Bayer. Likewise, if it seems the boss doesn't trust your judgment, you're in trouble.

5. You always get called upon to do the "grunt work." Everybody has to take on a dull or routine task now and then, but if you are constantly being singled out to do the work no one else wants, alarm bells should ring.

6. You are excluded from meetings your peers are invited to. Sound familiar? If it's painfully clear that your ideas aren't valued, why stick around?

7. Everyone on your level has an office. You have a cubicle in the hallway. Bayer notes that, whatever your title, your digs can speak volumes about your real status in the organization. If your peers have offices with windows and you're asked to move into a broom closet - no matter what the official explanation - start cleaning out your desk.

8. You dread going to work and feel like you're developing an ulcer. Ah, here's yet another of your symptoms, and a particularly nasty one at that.

"If the idea of going to the office makes you anxious or physically sick, and you're counting the hours from the time you arrive until the second you can leave, it's time to move on," says Bayer. Do it before you do serious damage to your health, or get so demoralized that you can't be upbeat in job interviews, or both. Once things have deteriorated to this point, being perceived as a job hopper should be the least of your worries. Get out while you still can.

When a Recession Threatens Cash Suddenly Has Cachet

by By Jonathan Clements

provided by
When recession rules, cash is king.

It's tough to figure out where the economy is headed, and some folks think today's biggest risk is inflation, not recession. Still, in trimming the federal-funds rate last week, the Federal Reserve noted that "the tightening of credit conditions" could "restrain economic growth."

Indeed, the signs are ominous. August's jobs data were notably dismal, with nonfarm payrolls shrinking by 4,000, instead of the 112,000 job increase expected by Wall Street. Americans are getting squeezed by tumbling home prices, rising mortgage payments and $80-a-barrel oil, and all this could cut into consumer spending.

If the economy turns sluggish, it will be rough on those who lose their jobs, while offering buying opportunities to those still employed. But either way, there's one thing you'll want -- and that's access to cash.

Taking advantage.

A mountain of cash would, of course, be a great comfort if you're laid off. But even if you hang on to your job, a little extra money in a high-yield savings account or a money-market fund could prove mighty useful.

Maybe a recession will further pummel the housing market, and you can put your savings toward buying a vacation home or trading up to a larger house. Maybe a slowing economy will knock shares lower, and you can use your cash to buy stocks at bargain prices.

For the cash-rich, a recession can also be a good time to purchase a car, as dealers slash prices to unload inventory. Alternatively, you might seize the chance to remodel the kitchen, knowing that contractors will likely bid more aggressively for your business.

Reclaiming savings.

With all this in mind, stockpile savings.

But where? If you think your job is in jeopardy, forget funding the kid's college account and don't make extra-principal payments on your mortgage. The problem: If you lose your job, it may be hard to get your hands on this money.

You might also be tempted to skip your 401(k) plan. But in fact, sticking enough in your 401(k) to get your employer's full matching contribution should remain your top financial priority.

True, if you're laid off and strapped for cash, you might be forced to tap your 401(k), triggering income taxes and possibly tax penalties. That double whammy, however, will likely be more than offset by today's twin benefits, in the form of an initial tax deduction and the matching employer contribution.

After you have funded your 401(k), direct additional savings into a Roth individual retirement account. You can fully fund a Roth if you are single with income below $99,000 or married filing jointly with income under $156,000.

One of the Roth's little-known benefits: At any time, you can withdraw your contributions -- but not the account's investment earnings -- without paying taxes or penalties. That means this year's $4,000 Roth contribution could be next year's unemployment fund or next year's home-improvement fund.

Got additional money to save? Stuff it in a savings account or a money fund held in a regular taxable account. If you lose your job or buy a vacation home, this is the first place you should go for cash.

Downsizing debt.

As you prep your finances for a possible recession, also get your debts under control.

Buy yourself some financial breathing room by paying off your credit cards. If you're worried you might get laid off, think twice before taking on new financial obligations, such as car leases and loans.

Also, set up a home-equity line of credit and check whether it's worth refinancing your mortgage to lower your monthly payments. You will likely find the mortgage company more receptive today, while you are still employed and still creditworthy.

If the economy slips into recession, and you lose your job or undertake major home improvements, the credit line could be a godsend. What if there's no recession? This extra borrowing power might still come in handy -- and you will no doubt find some use for all that extra cash you've saved.

Copyrighted, Dow Jones & Company, Inc. All rights reserved.

Saturday, 29 September 2007

Investors to Fed: Thanks for nothing

The reckless are getting relief from Bernanke while the prudent are paying the price, argues Fortune's Allan Sloan.
FORTUNE Magazine
By Allan Sloan, Fortune senior-editor-at-large

(Fortune Magazine) -- One of the core principles of the U.S. medical profession is the Hippocratic oath, the most famous part of which is "Do no harm." It's too bad that the governors of the Federal Reserve Board don't have to take such a pledge when they assume office, because their recent interest rate cut has done a lot of harm to those of us who've managed our finances prudently.

Even though the Fed's stated reason for cutting short-term interest rates by half a point was to help keep the economy from falling into recession, anyone who's been paying attention knows that a major motivation - if not the major motivation - was to try to calm the turbulence that has been roiling the markets since August.

The players in the biggest trouble, of course, were the ones who'd taken the biggest fliers in junk mortgages, ultra-risky leveraged buyouts, and other financial esoterica that proved to be malignant.

The stock market, which had been begging for a bailout and hasn't ever seen an interest rate cut that it didn't like, responded to the Fed's half-pointer by running prices up. Ben Bernanke, the Street decided, is just what the doctor ordered.

However, if you look at the financial markets' overall reaction to the Fed move - not at just the stock market's reaction - you realize that as a result of the cut, those of us who keep score in dollars and didn't need to be bailed out are less wealthy than we were in terms of anything other than our home currency.

Why? Because the rate cut contributed heavily to the dollar's recent sharp drop in the currency markets - parity with the Canadian dollar, for God's sake! - and to the price spike in hard assets like gold, silver, copper, and oil. So our wealth, relative to these other things, has diminished.

And wait, there's more. Even though the Fed has cut short-term rates, long-term rates, which it doesn't control, have risen in reaction to the cut. So whatever economic benefits may flow from lower shortterm rates will be partly offset by the rise in long rates, which are at least as important to the economy as short rates.

Finally, consider this. Even though Bernanke's cut may mean that some junk mortgages will reset at lower rates, the cost of large, high-quality fixed-rate mortgages, which are tied to long rates, will be higher than they'd otherwise be. (Yeah, penalize the people who are prudent - way to go!)

When I talk about prudent people being penalized, I don't mean just the decline in their wealth in terms of anything other than the dollar. I'm also talking about the price paid by investors who wouldn't play the subprime mortgage game and thus got lower returns than players who took bigger risks.

The folks who didn't get carried away (and avoided huge losses) look smart today - but they looked prudish and foolish until the housing bubble finally popped.

Look, as I've said before - and will probably say again - the Fed's job is to protect the financial system. It doesn't dare let a giant financial institution fail, lest it drag down other big players and trigger cascading failures.

But if we taxpayers are going to bail out the likes of Countrywide Financial (Charts, Fortune 500), even indirectly, I'd like us to get a market return on our money. That would reward us for the risk we're taking and seriously penalize companies that so overindulge that they need Dr. Ben's Magical Money Elixir.

Let's get the Treasury to negotiate deals like Bank of America's (Charts, Fortune 500) with Countrywide in August, when the bank put up $2 billion and got a high current coupon and a below-market conversion option.

The Treasury could do what it did years ago with Chrysler and get stock-purchase warrants in return for guaranteeing loans to companies that we can't afford to let fail. The idea would be to reward U.S. taxpayers and send a message to gunslingers without risking a worldwide financial collapse.

This different way of thinking won't cure Wall Street of its "heads I win, tails I get bailed out" syndrome - but it will reduce the number of bailouts and mitigate the harm they now do to those of us who haven't overreached. If Hippocrates were in the investment business, I'm sure he'd totally approve.

Tuesday, 25 September 2007

How to invest when rates are falling

Laura Bruce
The Fed rate cut isn't a signal to completely rejigger your portfolio but it can be an opportunity to consider investments that generally perform better as interest rates drop.

While lower rates often mean lower borrowing costs for businesses, a continually declining rate environment may mean that the economy is so soft that businesses aren't doing well, unemployment is rising and consumers are cutting back on purchases.

A portfolio that does well in those times may look bit different from one that does well when the economy is performing better. A few changes may be all your portfolio needs to keep it in the green.

We asked two portfolio managers for some ideas that do-it-yourselfers can consider when reviewing their portfolios.

Where to invest now

Bryant Evans: In his own wordsBryant Evans is a portfolio manager with Cozad Asset
Management in Champaign, Ill. He specializes in high-yield stock portfolios.

There are two very important things to keep in mind. You know rates have fallen recently, you don't know for sure they will continue to fall. You need to consider what you think rates will do going forward because that's what really matters when it comes to investments.
The other thing is: What does the yield curve look like? If we go with the assumption rates will continue to fall -- and that's not a bad assumption when the economy looks like it's weakening a little bit -- there are certain kinds of investments that do very well, especially short- to midterm Treasury bonds.

As rates go down prices go up and bonds tend to do quite well in a falling-rate environment. But this leads to that question about what will happen going forward. If you get in now and rates continue to go down, you're in good shape. But let's say we're at a historically low rate and they start rising again. Well, those same investments -- short- to mid-term Treasuries -- are not a good place to be.

Let's remember that good investors think well beyond the current interest rate cycle. If you have a good diversified bond portfolio or a laddered strategy, you'll be fine. Diversification and a long-term outlook will mitigate the short-term effect of market and rate fluctuations.
How to diversify in bondsYou can diversify into different kinds of bond funds. Diversified bond funds are often called "total return funds." I like them for someone who doesn't have a lot of money to invest and wants diversification. If you can diversify by investing in two different kinds of bond funds, then you might avoid the total return fund and build a portfolio of bond funds. Think long-term and mix and match. You might have a floating-rate bond fund as well as an inflation-protected fund with Treasury Inflation-Protected Securities or TIPS. Just in case we're at a historic low and rates are going to start coming back up, those tend to do OK as rates rise. Then mix in some Treasuries and some high-yields and some municipal bonds.

Utility stocks usually upOften times when the Fed is reducing rates, the stock market does very well. The reason doesn't have much to do with the rates per se and what's going on in the bond market, the reason is because people think the Fed is making the right move to improve the economy down the road. A strong economy is very good for stocks, but may not be very good for bonds. If rates are going down, the bond market will do well, almost regardless of whatever else is going on.

There are certain kinds of stocks that tend to do well in a low interest-rate environment. One group is utilities. Utilities are high-yield in nature and compete a little bit with bonds. When bond rates are rising, utilities don't do so well. But money starts moving into them as bond rates go down because the dividend you get off utilities tends to increase year over year regardless of fixed income.

There's another aspect. Relative to other stocks, utilities on average carry fairly large debt loads. They're always borrowing money, so part of their cost of doing business is paying interest on their loans. So if rates are down, their costs go down.

REITs may be rightWe might talk a little about real estate investment trusts as income. REITs have come down; even the ones that are taking advantage of problems in the housing market, such as apartment REITs, have been thrown out with the bath water. They're actually looking quite attractive right now. They also tend to carry big debt because they borrow to finance new acquisitions, and they tend to do well in a falling-rate environment. Add in the factor that a falling-rate environment is often highly correlated with a falling broader economic environment.
REITs have a safety effect to them relative to other stocks because their income is fairly reliable. If you go back to 2001 through 2002 when the stock market was getting hit, REITs really held up well. I like commercial and industrial but especially apartment REITs.
Put money on financial servicesIn addition to utilities and REITs, I would also say, in general, finance companies do well in a low-rate environment. We're in a weird time for finance companies. Banks are getting hit, everything's getting hit by the mortgage problem, but lower rates going forward will help to save these companies. So, to me, their valuations are looking pretty attractive.

Consumer staples, not to be confused with consumer discretionary, also tend to do pretty well in a slowing economy.

ARM holders benefitIf you have an adjustable-rate mortgage, you should be considering refinancing. A falling-rate environment is a lot better for ARM holders, but mortgages are long term. A lot of people are enticed into ARMs with artificially low beginning rates. Those are the ones that are going to ratchet up regardless of what happens with the Fed. Those are the people who really need to think about getting a fixed-rate loan.

As a general rule, if you have a mortgage and you can get a rate that's about 1 percent better, it's a pretty good time to refinance. That's a very general rule because it depends on how many years you have left, and it assumes you can be efficient in terms of minimizing closing costs.
Diversification and a long-term approach are incredibly key variables and investors who focus on the short term nine out of 10 times are the ones who don't do very well and end up frustrated.

You have to be a little bit brave, but brave investors capture value because some short-term problem is making companies look unattractive.

Jeff Layman: In his own wordsJeff Layman is director of investment services at BKD Wealth Advisors in Springfield, Mo.

Effectively we've been in a declining-rate environment in terms of market rates even (before the Fed cut the federal funds rate). Bond market yields have come down to reflect the anticipation that the Fed will be busy.

That, in our view, makes stocks more attractive on a relative basis than the yields available on bonds. We feel that the starting point for stocks is pretty attractive at a little over 15 times this year's earnings estimate. The Fed rate cut should help this along. Stocks benefit in multiple ways from a lower interest rate environment, so we think stocks, generally, will look even more attractive than they do right now.

With interest rates and inflation even at current levels, a 15 multiple is pretty cheap. Fifteen times earnings or 16 times earnings is generally where we've been trading for the last few months. We feel like a federal funds rate cut would increase the chance we might get a little multiple expansion between now and the end of the year. We're not talking about up to 20 times earnings, but even to 17 or 18 times earnings if there was enough optimism about how those rate cuts might improve the outlook for 2008. And that would really give a nice boost to the total return for equities this year too.

What's a stock worth today?The other thing that's very important with lower interest rates is looking at the valuation of equities and what they're worth today; that present value of their future earnings stream is an important thing to look at. That becomes a bigger number the lower interest rates go. In other words, the future earnings are worth more today in a lower interest rate environment than they are in a higher interest rate environment.
Obviously, lower interest rates lower the cost to borrow for corporations, which, all things being equal, ought to help their earnings potential as well. And as important, the thing that's been very concerning to the market over the last several months is how will consumers do in this environment? Will they stay engaged in the economy? They drive two-thirds of the spending. It's been a little spotty but, generally, they've hung in there pretty well, but the consumer's been a big concern to investors. To the extent that the cost of borrowing comes down and also the availability of credit -- that's the other thing we've been keeping an eye on -- the extent that credit is available and reasonably priced and helps them stay engaged in the economy that would be a positive as well.

Dividends may pay off

Dividends are nice, but we don't really look at them as the end all as far as attractiveness. But if you could find good-quality companies that pay nice dividends -- the financial stocks are pretty good examples of that right now, in that they've been beaten up a bit right now irrespective of the amount of subprime mortgage exposure they have. You can find banks that in some cases are in the range of nine or 10 times earnings with dividend yields of 3 percent or greater. We think that looks like a pretty good investment opportunity over the next few years, knowing that there's going to be more negative news about subprime for some time.
What about bonds?Total returns from bonds have improved in the last couple months as rates have come down, so if you're an existing bond fund holder you should have done pretty well. For the new entrant looking to make a purchase of a bond fund, the only thing I can suggest is that rates are now back down in the Treasury market to as low as they've been in some time, so the prices have been pushed up. We don't particularly look at now is this a great opportunity to buy a bond fund. For just raw opportunity it still offers a good diversification benefit, but we think the return opportunity is going to be somewhat limited in general.

The typical individual investor may not realize that (the Fed rate cut) has really already been reflected in the bond market with prices going up and yields coming down the last few weeks. That doesn't necessarily mean good things will happen to your bond fund investment; in fact, not much might happen at all.

The market has priced in about 75 basis points of future Fed cuts through March of next year; so, over the next six months or so 75 basis points of cuts. Do they go further than that? That will play out but that's what the expectations are that are built in right now.
Real estate, another major investable asset class, didn't start to roll over because of higher rates; it was that prices got ahead of themselves in a lot of commercial and residential properties around the country. We think that that's not necessarily going to be helped by small Fed rate cuts on the front end. I think it will take a little longer to work out, so we're not really particularly active in real estate or REITs right now.

Stocks are tops

Equities are still our favorite place to be. We find lots of value in a lot of areas, particularly the large-cap U.S. market. Growth is a lot more attractive in our view right now. We like the health stocks and technology stocks; they're coming along pretty nicely this year after several years of underperformance as well.

“Equities are still our favorite place to be.” I think we'll have a bumpy ride in financials, but we have been allocating new dollars there. Some of the stocks have really come down and can be bought at attractive valuations, but we're paying a lot of attention to the amount and type of exposure they have to the worst-performing part of the loan market because it will take some of these companies a long time to recover. Some of the others don't have a lot of exposure and have probably been over-punished. I don't expect they'll have a big run between now and end of year, but they represent a pretty good value over the next couple of years.

Saturday, 22 September 2007

Tips Of The Month - Ancient Wisdom That May Change Your Life

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Recently, I heard a story from a self-made multimillionaire. The moral of the story is profound. I hope you can learn something from it.

Here's the story......

A sage challenged his students with a question. The question is "Assuming that you have piece of land full of weed, propose what you would do to get rid of the weed."

One student suggested to pull out the weed by hand. One said use a shovel is faster. Another said why not we just burn the weed.

"The answers are all wrong," said the sage. "The answer is to farm the land."

The moral of the story......

We all face problems everyday. Problems are just like weed. They will grow regardless of how you remove them. When facing problems, most people will think of ways to solve the problem, just like the sage's students who proposed to use hand, shovel and fire to remove weed. Regardless of what they do, new weed will continue to grow and there is no end to this.

Instead of focusing on how to solve the problem, we should focus on how to ADVANCE from the problem. As what the sage said, the solution to get rid of weed is to farm the land. What he meant was to develop the land. Once the land was developed, weed would no longer be a problem. He didn't solve the problem directly, but the problem would no longer be a problem when he developed the land. In other words, instead of solving the problem, he made good of the entire situation so that he didn't even have to waste time solving the problem, which was just a trivial matter. This is what I mean by ADVANCE from the problem, i.e. making good of the entire situation so that the original problem is no longer a problem.

For example, let's say you are in debts. What most people would do is to think of ways to clear the debts. However, instead of focusing on how to clear your debts, you should focus on how to get rich! Once you become rich, your existing debts will no longer be a problem. You may argue that clearing debts and getting rich are the same. This is not true. The strategies to clear debts are very different from the strategies to get rich. Just like the strategies to make extra $1000 and $100000 are very different. Thinking of strategies to make extra $1000 to clear your debts may solve your current problem. But the same problem will arise again. On the contrary, once you get rich, your existing debts will become trivial.

Another example. A friend of mine is presently running a loss-making business and he is spending most of his time chasing after bad debts to pay his bills. The total amount of bad debts is about $30000. However, instead of spending his time chasing after the bad debts, he should focus on changing his business model. Once he gets the right business model, he can easily make extra $30000 and many times more. By then, the $30000 bad debts would just be a lesson he has paid to learn.

Ask yourself, how often did you focus on solving your problems. Stop solving problems but advance from the problem. If you take every problem as an opportunity for you to grow or to advance, you will realize that once you advance, you will no longer have to solve the problem.

Look around for the weed in your life now....... How would you get rid of your weed?

Avoiding Impulse Spending

Answer these questions truthfully:

1.) Does your spouse or partner complain that you spend too much money?

2.) Are you surprised each month when your credit card bill arrives at how much more you charged than you thought you had?

3.) Do you have more shoes and clothes in your closet than you could ever possibly wear?

4.) Do you own every new gadget before it has time to collect dust on a retailer’s shelf?

5.) Do you buy things you didn’t know you wanted until you saw them on display in a store?

If you answered “yes” to any two of the above questions, you are an impulse spender and indulge yourself in retail therapy.

This is not a good thing. It will prevent you from saving for the important things like a house, a new car, a vacation or retirement. You must set some financial goals and resist spending money on items that really don’t matter in the long run.

Impulse spending will not only put a strain on your finances but your relationships, as well. To overcome the problem, the first thing to do is learn to separate your needs from your wants.

Advertisers blitz us hawking their products at us 24/7. The trick is to give yourself a cooling-off period before you buy anything that you have not planned for.

When you go shopping, make a list and take only enough cash to pay for what you have planned to buy. Leave your credit cards at home.

If you see something you think you really need, give yourself two weeks to decide if it is really something you need or something you can easily do without. By following this simple solution, you will mend your financial fences and your relationships.

Why Publish an eZine?

On the Internet, it is very possible to make money without selling any product. One way of doing so is through starting your own eZine, also known as an electronic newsletter.

In a nutshell, you send out your eZine issues on a periodical basis to your subscribers. The good part is that you have a flexible choice in automating the process of sending out your eZine issues for you or manually sending them on a periodical basis.

As an eZine publisher, not only can you easily achieve the benefits a conventional newsletter publisher enjoys without having to chop down several trees in the process, you can easily and conveniently spread your marketing influence and expertise to your base of subscribers from the shoes of an ordinary individual.

In other words, you do not have to invest in expensive printing equipment, brick and mortar business, and hiring staff just to run your own newsletter publication, resulting in a lot of time, money and effort saved.

Basically, all you need to start your own eZine are an auto responder and broadcast feature to go with, enabling you to reach out to your massive subscribers whom you can regard as your prospects, too.

All in all, if you do not have the commitments of creating your own product for sale, then publishing your own online newsletter can be one of the wisest decisions you will ever make, given the benefits of impressive marketing power and influence it can offer to you.

3 Quick And Easy Ways To Build A Profitable Opt In List

You finally realize that you need a good opt-in list. After reading countless articles and sought expert advices and have read many success stories of people creating a small fortune with opt-in lists you finally decide to have one of your own. Then it happens, you think you have known everything there is to know about opt-in lists and have followed their advices to the T and you still weren’t able to make a profit.

In fact, you may be losing money. You maybe hiring writers to help you out, or there are some expenses incurred, even if you have a big list, but only a very small percentage actually buys from you, your still losing profit. You’ll realize that after a few months when you see your statistics and sales figures.

So what could have gone wrong? Why have others succeeded where you have failed? The most common mistake is that you dived straight right in. You chose a topic where you think could be quite popular and would earn you money. This just not the case. Just because you wrote people from the list doesn’t mean they are going to buy instantly.

Here I will offer more advice, for those who have started an opt-in list and have failed, you can rejuvenate your failed venture. For those who are starting, here are three quick and easy ways to build a profitable opt-in list.
1) Get your customers to trust you and your products first. Just launching your opt-in list would not make you an expert and a believable seller. Put many articles first before you start an opt-in list. Write about the topic you know and have started and used for your site. Try to put forums first to gain knowledge about your customers about their wants and needs and target those wants and needs.

Join forums from other sites as well. Provide expert advices and recommendations. When you feel that people trust you already, you will be able to start your own opt-in list. You can build a base as well with other forum users. You can ask them to join your list. Friends are always good customers. Put up a link to your site so that they may be able to see what you're business is all about.

The certain truth is, the money will only come in when the consumers and subscribers believe and trust in you. They want a product or service that could be a good exchange for their money. People are not going to buy something out of your recommendation if they don’t know you.

2) Find a product or service that people want and need. Although it may not be your forte, if you provide a service and product that you have researched and learned about well, you can carry it on forward. Invest your time, effort and money that you could sell as well as the buyers or subscribers of your opt-in list can use.

While it is true that it is best to sell something that you have interest in, there are not many people who have the same interest as you if you decide to sell something that is not entirely popular or profitable. Do your research well and you would see the profits come in. Also provide your subscribers with promotional material that they could actually use and spread around.

3) Make friends with other opt-in list users. This is basically beneficial especially if it is someone who has already launched a successful opt-in list. These are people that have the experience in this venture and experience is still the best teacher. While there are many articles available for you in the internet to use, there is nothing like getting a first hand account from someone you trust.

Experienced opt-in list users will be able to tell you what to do and what not to do because they have gone through it. While different situations occur for different people, the general concept can still be very helpful. There are many things to avoid and these people will be able to tell you which ones.

Building a profitable opt-in list don’t just happen overnight. There are many preparations and effort to do. Opt-in lists are built from scratch, as your list grows, you should also maintain the quality of your list. Keep it organized and manageable. Get or hire help if need be, just make sure that your subscribers are happy and satisfied and they will be willing to buy from you.

3 Things All Affiliate Marketers Need To Survive Online

Every affiliate marketer is always looking for the successful market that gives the biggest paycheck. Sometimes they think it is a magic formula that is readily available for them. Actually, it is more complicated than that. It is just good marketing practices that have been proven over years of hard work and dedication.
There are tactics that have worked before with online marketing and is continuing to work in the online affiliate marketing world of today. With these top three marketing tips, you will be able to able to increase your sales and survive in the affiliate marketing online.

What are these three tactics?

1. Using unique web pages to promote each separate product you are marketing. Do not lump all of it together just to save some money on web hosting. It is best to have a site focusing on each and every product and nothing more.

Always include product reviews on the website so visitors will have an initial understanding on what the product can do to those who buys them. Also include testimonials from users who have already tried the product. Be sure that these customers are more than willing to allow you to use their names and photos on the site of the specific product you are marketing.

You can also write articles highlighting the uses of the product and include them on the website as an additional page. Make the pages attractive compelling and include calls to act on the information. Each headline should attract the readers to try and read more, even contact you. Highlight your special points. This will help your readers to learn what the page is about and will want to find out more.

2. Offer free reports to your readers. If possible position them at the very top side of your page so it they simply cannot be missed. Try to create autoresponder messages that will be mailed to those who input their personal information into your sign up box. According to research, a sale is closed usually on the seventh contact with a prospect.

Only two things can possibly happen with the web page alone: closed sale or the prospect leaving the page and never return again. By placing useful information into their inboxes at certain specified period, you will remind them of the product they thought they want later and will find out that the sale is closed. Be sure that the content is directed toward specific reasons to buy the product. Do not make it sound like a sales pitch.

Focus on important points like how your product can make life and things easier and more enjoyable. Include compelling subject lines in the email. As much as possible, avoid using the word “free” because there are still older spam filters that dumps those kind of contents into the junk before even anyone reading them first. Convince those who signed up for your free reports that they will be missing something big if they do not avail of your products and services.

3. Get the kind of traffic that is targeted to your product. Just think, if the person who visited your website has no interest whatsoever in what you are offering, they will be among those who move on and never come back. Write articles for publication in e-zines and e-reports. This way you can locate publications that is focusing on your target customers and what you have put up might just grab their interest.

Try to write a minimum of 2 articles per week, with at least 300-600 words in length. By continuously writing and maintaining these articles you can generate as many as 100 targeted readers to your site in a day.
Always remember that only 1 out of 100 people are likely to buy your product or get your services. If you can generate as much as 1,000 targeted hits for your website in a day, that means you can made 10 sales based on the average statistic.

The tactics given above does not really sound very difficult to do, if you think about it. It just requires a little time and an action plan on your part.

Try to use these tips for several affiliate marketing programs. You can end maintaining a good source of income and surviving in this business that not all marketers can do.
Besides, think of the huge paychecks you will be receiving…

Effectively Using Overture/Yahoo To Get Website Visitors

Overture or now known as Yahoo because of Yahoo’s takeover, was the original inventor of the use of the P4P or Pay for Performance. Overture saw that the internet was fast becoming the easiest and most convenient way to shop, and advertising was going to hit at an all time high because of the many businesses in the arena.

To get a person to go to a site than others, it needs to be very visible. Providing ads that could direct potential consumers and costumers to their site would allow them to have an increase in traffic as well as sales. Yahoo provides a service that can put a site or company’s ad in their sites that can be shown when certain keywords are inputted.

Yahoo offers a chance for any company to increase their traffic by using their services. With more people being aware of your site, there would be more traffic and visitors to your site given the chance to view your pages as well as your products. With even a small percentage of successful sales, with a high traffic volume this could still be a substantial figure for your company.

Getting a consistent substantial flow of website visitors is every company’s goal. Many methods are devised and utilized to ensure that there would be more people to boost the sales and to be aware of the existence of such a product or service. Website visitors are potentially the life blood of your internet based business.

Yahoo/Overture utilizes the same principle as Google’s Adwords. In fact, they are very similar to each other that they use keyword and keyword phrase searches and to determine which ads to show per search. When a person types in a keyword or keyword phrase to search for anything, the search engines gives out the results in a page. Then at the right side of the page, you will see selected ads that have paid for their ads to be viewed with certain keywords and keyword phrases searched.

For example, Lets say you run a car parts retail/wholesale site. You choose keywords that can prompt or trigger your ads to be shown in the page when a keyword is searched. When a search engine user types in Honda Accord, your ad may come up if you have designated that as one of your keywords. You don’t need to fully optimize your site with Search Engine Optimization methods and techniques.

While some labor so hard to make their site one of the high ranking sites per keyword search, you get the chance to be on the top of the list or at least in the first page of a search result increasing your chance to be clicked on. With that, you drive traffic and website visitors to your site a lot faster.

You will have to pony up some cash when using this service though. There are different ways Yahoo/Overture will charge you. It may be in the number of Keywords or Keyword phrases your ad uses or in the many times your ad is clicked on. Others offer many other services like having your ad show up not only in the search engine pages but also with some third party sites.

Third party sites support ads that have the same theme or niche as them. With more areas your ad is shown, you increase the chances of people knowing about your site or product. With more website visitors you increase the sales of your site which makes your investment with your ads a wise one.

With so many competitions in the internet based businesses, it is necessary to take a huge leap forward from the pack by advertising. Yahoo/Overture will be a great place to start. Many have utilized their services and have reaped the rewards of this decision. It’s a marketing strategy that will increase your website visitors as well as increase your sales resulting to profit.

It takes money to make money, while there are some methods that are basically low cost or free, using a marketing service such as what Yahoo/Overture offers will provide results faster and on a larger scale. Many businesses have learned this the hard way, don’t be counted with them.

3 Reasons Why Adsense Is Essential For Content Sites

To know why Adsense is essential for your content sites is to know first how this works.

The concept is really simple, if you think about it. The publisher or the webmaster inserts a java script into a certain website. Each time the page is accessed, the java script will pull advertisements from the Adsense program. The ads that are targeted should therefore be related to the content that is contained on the web page serving the ad. If a visitor clicks on an advertisement, the webmaster serving the ad earns a portion of the money that the advertiser is paying the search engine for the click.

The search engine is the one handling all the tracking and payments, providing an easy way for webmasters to display content-sensitive and targeted ads without having the hassle to solicit advertisers, collect funds, monitor the clicks and statistics which could be a time-consuming task in itself. It seems that there is never a shortage of advertisers in the program from which the search engine pulls the Adsense ads. Also webmasters are less concerned by the lack of information search engines are providing and are more focused in making cash from these search engines.

The first reason why Adsense is essential for content sites is because it already has come a long way in understanding the needs of publishers and webmasters. Together with its continuous progression is the appearance of more advanced system that allows full ad customization. Webmasters are given the chance to choose from many different types of text ad formats to better complement their website and fit their webpage layout.

The different formatting enables the site owners the possibility of more click through from visitors who may or may not be aware of what they are clicking on. It can also appeal to the people visiting thus make them take that next step of looking up what it is all about. This way the people behind the Adsense will get their content read and making profit in the process.

The second reason is the ability of the Adsense publishers to track not only how their sites are progressing but also the earnings based on the webmaster-defined channels. The recent improvements in the search engines gives webmasters the capability to monitor how their ads are performing using customizable reports that has the capacity to detail page impressions, clicks and click-through rates. Webmasters and publishers can now track specific ad formats, colors and pages within a website. Trends are also easily spotted.

With the real-time reporting at hand, the effectiveness of the changes made will be assessed quickly. There would be time to sort out the contents that people are making the most clicks on. The ever-changing demands would be met while generating cash for the webmasters and publishers. The more flexible tools are also allowing webmasters to group web pages by URL, domain, ad type or category, which will provide them some accurate insight on which pages, ads and domains are performing best.

The last and final reason is that the advertisers have realized the benefits associated having their ads served on targeted websites. Thus increasing the possibility that a prospective web surfer will have an interest in their product and services. All because of the content and its constant maintenance. As opposed to those who are no using Adsense in their sites, they are given the option of having other people do their content for them, giving them the benefit of having successful and money-generating web sites.

Adsense is all about targeted content, the more targeted your content is, the more target the search engines’ ads will be. There are some web masters and publishers who are focused more on their site contents and how best to maintain them rather than the cash that the ads will generate for them. This is the part where the effectiveness is working its best.

There was a time when people were not yet aware of the money to be achieved from advertisements. The cash generated only came into existence when the webmasters and publishers realized how they can make Adsense be that generator. In those days, the content were the most important factors that is taken quite seriously. It still is. With the allure of money, of course.

Wednesday, 19 September 2007

Recession-Proof Your Investment Strategy

by Ben Stein

Now for some vital news about what to do differently with your investments, as we may or may not be sliding into a recession.

In a word, buy (and keep buying) broad indexes of foreign and domestic common stocks.

Lunch Is on the Gunslingers

Here's why. Unless you're a short-term trader -- in which case you shouldn't pay much attention to my words at all -- you're looking for how your results will be in 10 or 20 years. Your results will be better if you have an entry point at which your cost is low. Your cost will be lower if stocks have been hammered by short-term traders selling out of panic because of a recession.

That's one of the few "free lunches" -- as my investment guru pal Phil DeMuth calls them -- you get from the stock market. If short-term traders allow you to buy stocks at a discount, thank them, take a polite bow, and go out and buy.

The short-term trader will bail out of stocks if there's higher unemployment, temporarily lower corporate profits, slowdowns in housing sales, worries about mergers and acquisitions, and fears about credit availability. That's fine -- it's what short-term traders on Wall Street do. They hope to be a fraction of a second ahead of the other gunslingers and make a buck that way.

Focus on the Future

To you, the long-term investor, all that is just static. You don't care about what corporate profits will be in the second quarter of 2008 -- you care what they'll be in 2018. The only reference to 2008 in your calculations is if that year's profit disappointments drive down the prices of the Dow, the Spyders, the EFA, or the EEM and allow you to buy in cheap.

The short-term player desperately worries about what the employment numbers are. You as a humanitarian are concerned about the well being of others and wish them happiness and prosperity. But if unemployment rises and stocks fall, you buy in at the lower price and show a handsomer gain by 2018 or 2028 or whatever your anticipated sell date is.

You have no interest at all in selling if employment falls. Why should you? It's irrelevant to you -- except, again, if it lowers your buy prices.

Buy in the Fall

What if the United States goes into a painful recession? Sadly, people will suffer. But stocks will probably fall. Typically, their absolute price falls and their price/earnings (P/E) ratio falls.

To put this as plainly as possible, this is a good time to buy stocks. The evidence is overwhelming and consistent that if you buy when stocks' P/E is below its 15-year moving average, you'll make far more money than you would if you bought at the economic peak, when P/E's are high. So, unless you're out of money to buy with during the recession, you buy. You don't go on margin to buy, and you don't re-mortgage your home to buy. But if you're employed and have money to invest, you buy.

Recessions in the post-World War II world are generally short; they end after about two quarters. Within about 15 months, stocks have moved from their last peak to their next peak. This is an average -- each case varies, but in every case the very long-term investor is better off if he or she keeps on buying through the recession.

Wait for the Morning After

I wouldn't try and wait until the absolute bottom of the downturn is reached to buy. No one can predict with any certainty when that'll be -- it's visible only in the rearview mirror. But if you've been reading this column for a while, you know that I urge you to buy every month and add more every month. Just keep doing that through the recession, if it comes.

I know you'll be scared. I know wild-eyed TV commentators will urge you to panic. Don't do it -- just keep on buying and wait. There's got to be a morning after, even if it takes years, and on that morning you'll be a happy guy or gal.

Lower prices because of sort-term fear are one of life's great gifts to the long-term investor. Don't look that gift horse in the mouth.

When the Squeeze Is On, Bargains Abound

by Robert Kiyosaki

As you know, in early August of this year the Dow dropped nearly 400 points. Within hours, I received phone calls from producers at Fox News, CNN, and Bloomberg asking for my perspective on the near-crash.

The first question they asked was, "Are you still investing?" I answered, "Yes." In fact, I told them that on August 9 my wife, Kim, and I closed on a $17 million apartment complex in Tulsa and were quite happy with the investment.

Their next question was, "Do you think the Federal Reserve should intervene to save the economy by dropping interest rates?" My reply then as well as now: "No. This is a capitalist system, not a communist one. Anyone who expects the government to bail them out every time their greed and stupidity causes them to lose money is being foolish."

Winners and Losers

While this sounds harsh (and it is), I explained that the hedge funders, private equity players, and those with other portfolios losing money were big boys and girls. They know the game and how it's played, and shouldn't expect the government to bail them out.

I went on to explain that I did feel for the little guy whose home value was dropping as fast as his 401(k) plan, and that if the little guy loses confidence in the system, a recession may follow.

The ripple effect caused by the subprime meltdown and stock market volatility doesn't inspire confidence or encourage spending. If people stop spending, a lot of small business and families will suffer as the economy contracts. So while I talk tough about the big players, I do feel for average investors.

The Squeeze Effect

I know it's not polite to say "I told you so," but early this year I wrote two columns here predicting that what happened in August might be coming. Well, it did, and I told you so.

In one of those columns, I wrote about the upper-middle class possibly taking a beating by what stock traders call a short squeeze. I also wrote that many middle-class people could be caught in a cash squeeze -- and that's happening, too. Today, millions of people are caught in cash squeezes that cause them to default on their home loans.

A cash squeeze ripples through the economy when people, desperate to hang onto their real estate, begin selling other assets -- such as their cars -- just to raise the money to make their mortgage payments. This is what's happening now, and I expect it'll become worse through October and possibly into the holiday season of 2007, as more and more homeowners reluctantly turn over the keys to their homes.

A Cash Crash

The August stock market mini-crash I predicted was also a short squeeze for cash. Many banks, afraid that hedge funds and mortgage companies were holding subprime debt, called the loans on those businesses. And because the companies' subprime debt wasn't liquid and no one wanted it, the businesses had to begin selling liquid assets that institutions did want to buy.

In other words, just like the middle-class couple forced to sell their BMW at a discount to raise cash, these businesses were forced to sell their liquid assets. And because of the banks' margin calls, good assets dropped in price and bad or questionable assets weren't able to be sold. Consequently, August was a great time to be an investor, because you could pick up great stocks at cheap prices (more on that below).

The Confidence Factor

Another question I've been asked a lot lately is, "Will this loss of confidence spread?" Again, my answer is, "Yes." As I wrote in February, my concern is that we may be entering a deflationary period -- not an inflationary period, as many economists believe. And deflation is a lot harder to cure than inflation.

To cure inflation, the Fed simply raises short-term interest rates. That slows the number of dollars entering the economy. In a deflationary economy, however, you can pump money in, but if confidence is gone the economy can continue to deflate. That is, people become savers, not consumers.

If people become savers, then those in a short squeeze for cash may start selling more and more things of value, such as second homes, boats, cars, and jewelry, just to raise cash. And if people stop spending and start selling, the ripple effect is that millions -- even those with good credit -- begin to get hurt.

Not only will housing prices continue to drop, but restaurants and small specialty shops will suffer, and people will begin losing their jobs. When people lose their jobs the situation grows worse, as more confidence leaks out of the system. The Federal Reserve can lower interest rates again, but once that confidence is shattered, it might take awhile for the economy to rebound.

Drop and Correct

As I wrote in February, when cash and credit are plentiful, the economy expands. When cash goes into hiding, even if the Fed makes more credit available, the economy may deflate or stagnate. It's these last two scenarios that I'm concerned about. If we deflate or stagnate, the financial problems will grow regardless of what the government does.

I stated in my August TV and radio interviews that it's best to just let the economy drop and correct. If the government keeps saving people from their own greed and foolishness, the crash will only be put off to a later date.

I say let the market correct itself, even if it's painful. Let the foolish ones take their lumps and learn their lessons.

Bargains Are Plentiful

The silver lining to all this is that it's a very good time to be bargain hunting. In the current economy, cash is king. As more institutions and individuals are forced to sell assets to raise cash, you may come across that one investment you've been waiting for.

For example, in 1987, the stock market crashed, real estate took a dive, and savings and loan institutions were wiped out. It took about five years for the economy to recover. During that period, the government formed the Resolution Trust Corporation (RTC). The RTC took some of the best real estate in the world and sold it for pennies on the dollar.

Thanks to the RTC, in five short years Kim and I went from struggling financially to becoming financially free. It was a five-year short squeeze on cash that made us rich. I sincerely hope you can profit from the next short squeeze the way we did then, rather than being among those who get squeezed.

Saturday, 15 September 2007

How to Make Your Millions

By Nichole L. TorresSara Wilson

Making a million is a milestone--the defining moment of success for many entrepreneurs and an attainable goal for those tapped into today's hottest trends. Entrepreneurs are keeping their fingers on the pulse of what's hot in today's marketplace. They are the trendsetters, the pioneers, the ones to watch as they lead the pack, followed closely by franchisors poised to capitalize on winning ideas and spread concepts nationwide.

Already dreaming about living the good life as a millionaire? We've compiled the most lucrative trends across seven industries. But keep in mind that regardless of the route you choose--whether it's going solo or buying a franchise--arriving at your first million in sales will require persistence, strategy and, in most cases, multiple locations. And in case you doubt it's doable, we got the scoop from savvy entrepreneurs who went from zero to a million.

Fountain of Youth
With the first baby boomers starting to hit 60, America is fighting tooth and nail to stave off the signs of time. In 2004, Americans spent about $44.6 billion on anti-aging products and services, according to Business Communications Co. Inc., an information resource company. But that's nothing compared to the $72 billion market it's expected to mature into by 2009.

Why the sense of urgency? Vanity is part of it, and the fact that we're living longer adds to the need for enduring youth. But there's also the fact that many baby boomers won't be financially able to leave the work force as early as their parents did and will have no choice but to stay vital and active, says Maddy Dychtwald, co-founder of Age Wave, a think tank focused on boomers and the aging of the population. According to a study by the National Association of Realtors, the median age at which baby boomers expect to stop working is 70, but 27 percent say they never intend to stop working. Dychtwald predicts that this will open up all kinds of opportunities to entrepreneurs--such as those who can create wellness centers and bring together a variety of health and nutrition specialists under one roof.

Jeni Garrett is one of those entrepreneurs providing a mind and body oasis to baby boomers desperate for rejuvenation. In 2001, after enjoying the benefits of spa visits herself, Garrett, now 28, founded The Woodhouse Day Spa, a luxury spa in Victoria, Texas. A year and a half later, she set her sights on turning the brand into a household name. She first planned to open more company-owned locations, but Garrett soon turned to franchising to spread the concept. "With our business model, you really need an owner/operator present because of the staffing issues and to do the marketing initiative," she says. "Franchising lent itself very well to that."

To move forward, Garrett knew the foundation had to be solid. She chose a top-notch franchise lawyer and streamlined operations, even ordering the fixtures for the franchisees. With her franchise system in place, she has positioned herself perfectly to accommodate the growing clientele of baby boomers. To further meet the needs of this segment, she added a menu of services that boasts 15 holistic, all-natural treatments that focus more on wellness than pampering. She is enjoying success with a multimillion-dollar business as more boomer women--and men--make the spa experience part of their lifestyles. Says Garrett, "We're seeing [spas] move from a level of luxury to a level of necessity for wellness."

The Sweet Life
The nation's sweet tooth is becoming more insatiable, driving everything from the franchising industry, where cookies and ice cream concepts are growing categories, to the fine-dining industry, where diners are staying more often for the grand finale.

Dessert has become such a significant portion of the food industry that it's warranted its own annual trade show since 2003. Meanwhile, according to Hudson Riehle, senior vice president of research at the National Restaurant Association, almost 1 in 3 fine-dining operators reported that consumers bought more desserts last year than in the two previous years. In an increasing number of cases, high-end desserts are stealing the spotlight, as entire independent restaurant concepts are being founded on the premise of tasty, upscale indulgence.

Paul Conforti and Kim Moore, 36 and 40, respectively, researched the restaurant industry for a year while attending Harvard Business School before they opened the doors to their first upscale, dessert-focused restaurant, Finale Desserterie & Bakery, in Boston in 1998. Offering an exquisite menu featuring Valrhona chocolate, honey caramel gelato, nougat mousse and cherry almond Florentines, they are often credited with the distinction of starting the first high-end dessert concept. Their focus is as much on high-quality ingredients as it is on the overall experience. Says Conforti, "Making sure [customers] have the best dessert of their life is important, but it's also about the atmosphere, service, background music [and] cleanliness of the restaurant."

They have since grown their restaurant concept into a $6 million-plus business and are about to open their fourth location this month. Planning to open three more locations in Massachusetts next year and to reach Washington, DC, by 2009, they are working toward their ultimate goal of going nationwide. With an idea as divine as upscale desserts, $1 million in sales can be achieved with only one location, and the proof is in the pudding: One of Conforti and Moore's locations makes twice that much annually.

Starbucks revolutionized the coffee industry by transforming the beverage into the most necessary of luxuries, but numerous independents and ambitious franchisors have profited from coffee's popularity and are riding on their own caffeine high. According to Rob Stephen, immediate past president of the Specialty Coffee Association of America, a coffee trade association, opportunities in the industry abound. In fact, according to the SCAA and Mintel Group, the industry grew to an estimated $12.27 billion last year. So if you thought Starbucks had the market locked down, think again--many are drinking in their own share of the profits.

Eric Schmidt, 43, is the owner of a Dunn Bros Coffee franchise in Lawrence, Kansas, and although he just opened his coffee drive-thru in March, he's already working on opening two more coffee kiosks and estimating total year-end sales to be in the low seven figures. While he believes he could have reached this point with his own coffee concept, he has no doubt that buying a franchise helped him avoid many of the initial difficulties. The wealth of information available to him and the one-on-one assistance with finding the right location enabled Schmidt to get off to an impressive start.

But in moving forward, the defining strategy for success has simply been Schmidt's own commitment and constant presence in the business and his community. From personally making sure that customers' needs are met to being involved in local civic organizations and the nearby university, Schmidt makes sure all his bases are covered. "That's probably the single biggest thing about it," he says. "You have got to be completely involved in it from the day you open [your] doors."

For those looking to establish their niche, Stephen identifies two trends taking place in the industry: product differentiation and point of view. In a market once defined by regular or decaf, coffee consumers now pay attention to the very farm where the beans are grown. Says Stephen, "You're seeing coffee labels growing to three lines."

Customers are also looking to retailers for opinions and overall expertise, so it is important for coffee entrepreneurs to be knowledgeable about the products they're selling. Stephen believes that quality products, knowledge, point of view and a good location are the defining factors of success for both independent coffee entrepreneurs and franchisees.

So what's ahead for the industry? Says Stephen, "We're seeing a renaissance in iced and frozen beverages as a way to get to a part of the market that's interested in soda or energy drinks."

Seniors
While the industry to preserve vitality and youth among baby boomers is thriving, so are the businesses one generation ahead in the senior-care industry. Millions of Americans currently make up the "Sandwich Generation," a generation of people raising their children while taking care of their aging parents. This is already creating a demand for assistance, both medical and nonmedical, but that need will skyrocket as the baby boomers approach an age in which they, too, will need outside help. "People 65 and over will increase from 12 percent of the U.S. population to 20 percent by 2030," says J. Kevin Eckert, dean of the University of Maryland, Baltimore County's Erickson School of Aging Services. "It's almost a no-brainer that the whole need for senior housing, for adaptive housing, for all kinds of services, businesses and products will be burgeoning."

Topping things off, a large number of baby boomers won't have their own families to turn to for assistance. According to a 2004 U.S. Census report, 19 percent of women aged 40 to 44 were childless--twice the percentage reported in 1976.

Having watched his father struggle to care for his own brother, his aging grandmother and himself, Adam Brown was inspired to purchase a Home Helpers franchise. Getting the word out about his nonmedical and personal-care business was the most crucial step to securing his success. He did so by advertising, visiting local businesses and hospitals, and joining networking groups to educate the community about his services. Says Brown, 28, "This is a referral-based business, particularly because you're working with people's family members, so there has to be trust."

With 170 employees, Brown has positioned his franchise as a strong competitor in the Philadelphia area. After two years, he purchased a second territory and has since secured the "right of first refusal" for two other territories, which gives him first dibs before any other buyers. After working from home for two years, Brown has moved his business into an office, has just opened a satellite office and plans to open additional satellites in the future. Although having a physical presence isn't required, it has paid off: His franchise looks more established, and the neighborhood where the office is located is bringing in even more business. By reaching out to the community and expanding his territory, he has successfully grown his franchise to 350 clients and is projecting year-end sales of approximately $3.5 million.

Eckert sees a bright future on the horizon with the development of new homegrown communities where baby boomers can "age in place," as well as new services and technological products to help individuals remain at home. Says Eckert, "We're in for an exciting array of possibilities and real opportunities for people who are creative, innovative and have entrepreneurial sense."

Tech
Calling all geeks: Have you got a mind for technology and a passion for business? This could be the industry for you. If franchising is your tech dream, consider starting a tech support or consulting company--industrywide, franchise units in our most recent Franchise 500 grew 13 percent in 2006 over the year before. If you're a true maverick, though, you can jump into the exciting world of Web 2.0--where advances like social networks, blogs, podcasts, wikis, RSS feeds and the like have turned the dotcom business model on its head. Today, web innovators are coming up with better ways for end-users to share information and are creating applications and websites where shared video or user-generated content is king. Just a glimpse of the marketplace: The web gained a record 30.9 million sites in 2006--a 41.5 percent jump from a year earlier, according to data from research firm Netcraft. And according to data from Hitwise, in early 2007, visits to the top 20 social networking sites like MySpace and Facebook grew 11.5 percent in one month alone.

Although a lot of hugely successful companies are already out there, a startup can get in with the right niche. "The web is the great equalizer," says Jeff Stibel, CEO of Web.com, a provider of websites and services that has created over 4 million websites for small businesses. "It's the only place where a small business can compete nationally." He suggests starting a company with a great Web 1.0 foundation--a solid web address with an appealing design that works well for customers and first-rate search engine optimization to point users to your site.

Most important, though--fill a need. "If you say, ‘I'm going to do what Facebook or YouTube does,' it won't work," says Stibel. "But if you solve a market need, you conquer that niche and expand from there."

Conquering a niche is precisely what Greg Demetriades did when he founded WhiteBlox, an IPTV software suite, in 2005. The company sells IP video solutions so businesses can broadcast interactive IPTV content under the banner of their own brands. It's a subsidiary of his parent company, Continental Vista Broadcasting Group Inc., an IPTV provider that delivers interactive broadband TV content globally, started in 2003. Demetriades, 46, sells his WhiteBlox technologies to media, entertainment and sports-related companies--even contracting with the Indy Racing League to broadcast all its races online through 2009, including the famous Indy 500. "We allow [customers] to mix and match and build their own broadcast networks," he says. WhiteBlox also enables interactivity with tools for polls, contests, chats, forums, blogging and even sending live messages to the announcers at an event. Located in The Woodlands, Texas, the company projects 2007 sales of $16 million.

To make your mark in the tech space, be on the lookout for trends. Says Stibel, "It's a matter of keeping your eyes wide open."

If you're a pet lover, consider getting into the fast-growing pet products and services industry. Pets are a part of the family in 63 percent of U.S. households. In fact, in 2006, Americans spent $38.5 billion on pet products and services--a figure expected to rise to over $40 billion in 2007, according to the American Pet Product Manufacturers Association. Traditional pet lovers might consider a pet franchise business like pet grooming, pet products, pet walking or training. In fact, in our 2007 Franchise 500, the number of pet-related franchise units grew 23 percent from 2005 to 2006.

There are many niches in which to start your profitable pet business, according to APPMA president Bob Vetere. Natural and organic pet food is a particularly hot area, he notes. Much like in the human world, where green products are all the rage, green pet products are quickly gaining in popularity. "Any trend you see in human foods, about six months later, it pops up on the pet food side of the ledger," says Vetere. "This is what's happening with organics and naturals. It's finally dawned on marketers that the same person who's buying food for the family is buying food for the pet."

Convenience products are heating up as well--from automatic feeding devices and timed watering devices to automatic pet doors--anything that allows owners to have a busy lifestyle while still taking care of their pets is hot, notes Vetere. On the same convenience trend, consider pet services--pooper scoopers, for instance--to do the dirty work that many pet owners would rather pay someone else to do.

And just as moms buy top-notch products for their children, many pet owners are all about luxury for their precious pets. If it's high-end or a treat, pet parents will want it. That's what Janet McCulley, 39, and Georgia Goldberg, 44, found when they started Muttropolis, a chain of upscale pet boutiques based in Solana Beach, California. Janet McCulley, a proud pet parent herself to dogs Lulu, Sepia and Zoltan, knew she wasn't alone in wanting to pamper her dogs. She researched the market and opened the doors to her first store in 2002; four more locations and an online store have followed.

McCulley describes the business as "retail meets the dog park." Aside from offering upscale products such as Swarovski crystal dog collars and eco-friendly chew toys, McCulley designed special fixtures in her stores to appeal to the discerning pet lover. Photographic tiles on the ground look like grass, a fountain in the center is full of dog toys, and tree graphics on the walls complete the look.

Winning the "Hottest Retail Concept of 2006" award from the International Council of Shopping Centers was a coup, but it's at the monthly Mutt Meet-Up events, where owners bring in their pets for fun and mingling, that McCulley sees the fruits of her success. "We have created a brand that resonates emotionally with the pet parent," she says. With 2007 sales projected at more than $4.5 million and plans to open 150 more locations within the next five years, Muttropolis is sure to become a household name among the two- and four-legged alike.

Marketing and Advertsising
Companies always need new clients, so if you've got a knack for getting customers to buy, think about starting a marketing and advertising business. Aspiring marketers can go the franchise route with diverse opportunities ranging from direct mail and coupons to promotional products and outdoor media.

But if you want to be a trendsetter, check out the online ad marketplace. It's a booming market--online ad spending alone hit $16.9 billion in 2006, a 35 percent leap from 2005, according to a joint report from the Interactive Advertising Bureau and PricewaterhouseCoopers. Trends shaping the industry include the use of audio and video technology in online marketing campaigns as well as integrating online and offline marketing for clients, notes Chip Cummings, a marketing consultant and author of Stop Selling and Start Listening! Marketing Strategies That Create Top Producers. "It's not just being on top of the technology, because the technology itself isn't going to sell anybody products or services," Cummings says. "It's the creative use of that technology."

Finding a creative use of technology is exactly what has catapulted Blue Lithium Inc., an online advertising network in San Jose, California. Founded by Gurbaksh Chahal in 2005, the company provides specifically targeted marketing for clients, using data from 145 million consumers worldwide. "That [online] advertising model is focused on display media--banner ads, [etc.]. The model I wanted to recreate was using different ways to add data and using data to create sophistication around individual users," says Chahal. "So when you're serving an ad, it's actually relevant to that user--because you know they're male or female or you know something about their lifestyle through different data sources you can aggregate over time."

Chahal's expertise in providing targeted online ads has grown his startup at least 100 percent per year, pushing 2007 sales projections to nearly $100 million. Working with clients like Anheuser-Busch, Best Buy and Verizon, Chahal, 25, is looking to grow his company into international markets such as Germany, Italy and Spain in the near future. Staying ahead of this rapidly changing market is the order of the day. "You've got to make sure you continue to evolve with it and [that] you're evolving faster than the industry is evolving," says Chahal. "Every couple of years there's a bigger company out there. Before it was Yahoo!; now it's Google. There's a trend going on, and whoever is creating the trend ends up being the winner."

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