Reorganization

So the big news of the day (besides more Swine Flu details and Obama's 100 days in office) is that Chrysler is down to the wire in it's quest to stay alive.  It now appears that Chrysler could be headed to bankruptcy court or perhaps merge with Italian car maker Fiat.  Remember, bankruptcy does not mean "going out of business" or liquidation, it means restructuring debt and coming out stronger and healthier than before.  For details on how this can work, just look at Delta Airlines, who recently emerged from bankruptcy and after a merger with Northwest Airlines is the country's largest airline.  As a Dodge owner and longtime fan of Chrysler, I'd hate to see them go under, so let's hope Fiat and the courts can save them one more time!  Gee, I wonder what the resale value on my Durango is now?

Twitter Tales

I promise not to talk about the Swine Flu today.  Instead I want to share some disturbing news for the folks at Twitter:  Oprah is already bored of Twitter!  In fact, 60% of Twitters users quit after one month!  Now I have been on Twitter a little longer than Oprah, and although I am not "bored" with it, I have been at times, annoyed.  You see, of all the people that I have signed up to follow,  most of them send out bland "tweets" or updates.  I don't care what Newt Gingrich is having for dinner.  I'm not impressed by what radio show John McCain is scheduled to be interviewed on.  I want inside scoop!  I followed Ryan Seacrest for over a week, and he never had one mention of American Idol.  What?  That's what people want to hear.  What does amaze me is that there are people I do not know who decide to follow me.  How did they find me?  Are they looking for a different Scott Wheeler?  The composer or the political insider?  Here's what I know so far, I have 10 followers on Twitter, but 192 "Friends" on Facebook!  Well, I need to think of something clever to "Tweet" to my followers!  Follow me @scottjwheeler or send me a friend request!  I hope I get a good update from Nick Swisher today.

15 Minutes of Fame

So the Swine Flu continues to fill the airwaves on TV, radio and the internet.  The stock market braces for another down day as the contagion spreads to the Asian markets.  Instead of panicking, some people are suggesting ways to profit from this event.  Read about the latest Swine Flu Trading Ideas or how the Swine Flu is taking over Twitter.  As I mentioned yesterday, unless you are a day trader or are cashing in your chips to begin your retirement in South America, you do not need to be concerned about the Swine Flu's effect on the markets.  This is a short term play which will end as soon as everyone realizes that this is not as serious as the TV talking heads make it out to be.  The Swine Flu will go down with the Bird Flu, the West Nile Virus, and SARS, as localized outbreaks that did not end the world as we know it.  I'm still wondering if my peanut butter is safe to eat!  

Swine Flu Blues

Over the weekend the news reports and media buzz has centered around the Swine Flu outbreak in Mexico.  While only a limited number of people have been affected in the US so far, this situation has spooked the stock markets and bond markets in pre-market activity.  So what's an investor to do?  The stock market has always reacted negatively on uncertainty.  Since the flu outbreak is still in it's early stages, the US and other world governments are still trying to get a handle on how to contain it and prevent it from spreading into a panic situation.  Because there are too many unknowns, the stock market will feel downward pressure in the early going at least.  Of course, this only is a concern to anyone looking to sell stocks or stock funds today.  Buyers could have an opportunity to get lower prices and long term investors should feel no pressure at all to do anything but continue to add money to their retirement saving accounts.  Will the Swine Flu change my perspective on investing for the long term?  No more than the Bird Flu did.  Tamiflu anyone?

Blogging for dollars

After reading the following article on Pro-Bloggers:  Mythbusting the WSJ's Stats About Pro Bloggers, I decided to look into how I could make money by blogging.  Yesterday I wrote about how some bloggers are now getting some books deals.  That's one way bloggers can make money.  Another way is by advertising.  Ads on blogs are how, according to the article above, some bloggers make as much as $75,000 per year (although the median income is a reported $22,000).  So I have created an ad account with Adsense, a company that Blogspot uses for people looking to "monetize" their blogs by earning income off ads.  You will begin noticing some ads on my blog now and we'll see how much money starts to roll in!  With over 1700 clicks on my site so far, I'm sure I will be able to quit my day job soon!  I'll keep you posted when I get my first check.  This might be more fun that my Water Experiment.

Blogging for book deal

After reading an article this morning about how publishers are going nuts for blogs, I decided to think of some catchy book titles for my book deal.  Here's what I came up with so far:

"Why you are poor"

"Why you aren't rich like me"

"How not to lose your money in the stock market"

"Quit buying CD's"

"Buy Bonds Because they're Better"

"From Stockbroker to Bond Trader, why I made the move"

"KC & the Sunshine Band...what happened?"

Well, I got to get back to work on some more titles while I wait for the publishers to call me.  Send me some of your ideas.

Jargon and Lingo

I know today is Earth Day, but it is also "Administrative Assistants Day".  Remember when it used to be "Secretaries Day"?  In my work as a financial advisor, I have to help people understand financial concepts that are fairly simple, but made to sound complicated by words used by insiders known as "jargon".  Some examples are "dollar cost averaging", "asset allocation" and "diversification".  Human resource directors and others have changed words over time in an effort to respect diversity and be politically correct.  Other changes to words are a result of new uses that happen over time.  Look at a few examples of words that were once used but have been replaced by new words:

Garbage man - Sanitation Engineer

Housewife - Homemaker

Lawyer - Attorney

Stockbroker - Financial Advisor

Journal - Blog

Computer - Laptop

Laptop - Notebook

Bank - Banking Center

Stewardess - Flight Attendant

Actress - Actor

Waitress - Server

Mailman - Mail Carrier

There are obviously many other examples, but I'm sure you get my point.  We seem to like to make things sound more important than they really are.  Most people can read through the lingo and are not impressed.  While it's impressive to have a large vocabulary, lingo and jargon can often confuse people.  If you want to get your point across, state it simply.  Well, I need to get going.  I have to take my vehicle to the fueling station on my way to my place of business.  Oops, I mean I need to stop and get gas on my way to work!

Your Mind on Caffeine

Today's blog is a guest blog from John Fischer, who writes the Catch of the Day on his site at The Fischtank.  Like me, he is a coffee lover.  He also has a unique outlook on life as you can see for yourself from this recent post:

This is your mind... This is your mind on caffeine. Apparently they are two different things. 

Researchers at the University of Queensland in Australia released a study showing that caffeine makes people more open to logical argument, even when it runs counter to their previously held opinions. The caffeine group, across the board, tested out as being consistently more open-minded than the decaf group. This would definitely lend new credibility to the belief that conversations over coffee are a good thing. 

An open mind is necessary for any relationship to grow. You have to be open to another way of thinking to relate to someone, because we are all different – we have different backgrounds, different gifts, and we see things from different points of view. Lasting relationships grow out of accepting one another's differences. We appreciate each other more through consensus than through conformity. 

This kind of open-mindedness in relationships is important for more reasons than just our differences. It is important because we are always changing, and since we are all in process, we have to remain open to that process in each other. My road will not be yours; yours will not be mine, even if we walk together. God has different plans for each of us. Jesus Christ did not die to create clones. He died so He could fill each one of our unique natures with Himself.

And finally, part of who we are becoming involves those closest to us. We are not who we are in a vacuum. We are a product of the people we know and how we have grown together. We shape each other. When this aspect is strong, there is a healthy push and pull at work. “As iron sharpens iron, a friend sharpens a friend.” (Proverbs 27:17 NLT) 

Belief has commonly been associated with a closed mind. This is unfortunate because nothing could be further from the truth. Belief opens you up to God and gives you his Spirit to help reinterpret the world around you. Belief is all about discovery, and just as our relationships with each other are not static, neither is our relationship with God. We are constantly discovering more about God and his world, and we are constantly discovering more about ourselves and those around us. 

So pour another cup of brew for you and that friend. Open your hearts and minds to each other, and get ready for a surprise! 

Podcasting

Thanks to a fellow St. Louis Bloggers Guild member, John Newmark, I found a neat new application called Odiogo.  It is a free website which converts your text into audio using a computerized voice which is very human sounding.  I have added this to my blog and you can check it out for yourself by clicking the link below ("Subscribe To My Podcast").  You can also click the "listen now" button below each blog post title.  So if you don't have time to read my blog, you can download into your favorite mp3 player and listen at your convenience.  Thanks for the tip, John!

I am now a Podcaster!

More on Twitter and Facebook

Since Twitter has kind of been my theme this week, let's continue with more thoughts on them since they continue to be in the news now that Oprah has set up her Twitter account @Oprah.  I was dismayed to learn that she has passed my 7 followers with her 63,000 before she even sent her first Tweet!  While Twitter still hasn't come up with a real plan for making money, they have at least gained momentum in the media by attracting more and more celebrities.  While Twitter may be growing faster than Facebook, they do not yet have the income and money in the bank ($200 million) that Facebook does.  Yesterday it was reported than Facebook is eyeing their own IPO deal and has valued themselves at $5 billion!  At least they seem to be doing things the right way and not giving themselves a black eye like United Airlines did when they announced that they would be charging obese passengers (customers) double!  Wow!  Now there's an incentive to lose weight.  I wonder if any of them would try my water experiment?

Guest Blogger - Rich Harrison

Yesterday I discussed Skype and Twitter and commented on their strategies for making money.  It appears Skype is making money but not enough for Ebay, so they have decided to spin them off in an IPO.  I read an article yesterday afternoon which suggested that Ebay was using the pre-IPO buzz to set a market price for Skype, indicating that Skype could be sold off to the highest bidder before the IPO even happens.  As for Twitter, the jury is out, but I found a clever blog post from my friend Rich Harrison, that I wanted to share.  Enjoy!

The lost Elvis Presley twitters

Does anyone really use Skype?

News in the business world today is that Ebay will be spinning off Skype in an IPO soon.  

"eBay had hoped to use Skype to facilitate communication between auction buyers and sellers when it purchased the business in 2005 for a current total of $3.1 billion", according to Colin Sebastian, analyst with Lazard Capital Markets."The synergies they had hoped to achieve have not materialized," he said, and a spinoff makes sense since "eBay is fighting hard to turn around its core business."

Read the whole story here:  Ebay Plans to Spin Off Skype

Now this got me thinking...does anyone besides Oprah and Jimmy Fallon really use Skype?  I mean, I have not met one person who uses it or swears by it.  So who are these 400 million users?  And if Skype is such a great company, why did Ebay write down $900 million off them last year and is putting them up for sale now?  Makes you wonder.  Speaking of company's that are not making money, Twitter, while all the rage and currently up to 8 millions users worldwide, is also not making any money.  See the story here, Twitter:  Buzz first, Profits later.

Twitter strikes me as a company that is capitalizing off a fad and hoping that someone like Google will see value in them and buy them for millions of dollars and make their founders very wealthy.  At this point, while they are gaining traction, I see Facebook as the true leader in this type of social networking platform.  Time will tell of course.  Well, I need to think of something clever to Tweet to my followers!

Understanding Social Networking

Like many people in business, I look for new ways to find new prospects and turn them into clients.  Traditional methods like advertising and direct mail only attract a very small percentage of new customers as most people are sceptical of anything they read anymore, hence the term "junk mail".  Small business owners and entrepreneurs know that word-of-mouth "advertising" and referrals, while harder to develop, have a higher closing rate for new sales.  One way to get referrals is to belong to a business networking group.  These are small groups made up of business men and women who meet one a week for breakfast or lunch, to talk about their businesses and help each other know what's new in their area of expertise.  They refer business to each other in the group.  For example, if I have a client looking to sell their house, I have a realtor in my business networking group that I can refer them to.  Now, businesses are beginning to look to social network sites like Facebook and Twitter to attract new customers.  By setting up groups to attract "fans" and "followers", companies are finding new ways to interact with shoppers and savers.  Loyal customers are using Facebook and Twitter to find new deals at their favorite online and brick-and-mortar stores.  But like anything in life, you have to be smart and in some cases skeptical.  

"As more corporate users embrace social networks such as Facebook, Twitter and others in their business interactions, it seems likely that individuals or groups committing fraud would use those tools, too. That's why investigators are constantly trying to stay abreast of the latest in so-called "out-of-band" communications", says David Remnitz, an FTI senior managing director specializing in electronic evidence. "We're spending a good amount of time understanding how [social networks] will be used in coming years," he says. "We always need to be one step ahead of the curve."

Read the whole article here: Online fraud coming to social networks

So as Sgt. Phil Esterhaus used to say on Hill Street Blues, "Let's be careful out there!"

Follow me on Twitter

After attending the most recent monthly meeting of the St. Louis Bloggers Guild I decided to check out Twitter and see what Twitter is all about.  I have been on Facebook for a while now and like how it has connected me with so many people and especially reconnected me with my former high schools friends (I'm even attending a high school reunion this summer in Boston which came about as a result of Facebook).  But I haven't really figured out the whole Twitter thing yet.  To me, telling the world "what I'm doing" is the same as telling everyone "what's on my mind", but alas, I have set up an account and will see who begins following me.  If you want to follow me, check to link in the sidebar below and to the right (scroll down, you'll see it).  Maybe I'll call this the Twitter Experiment!

Water Experiment Update #3

Today is a special day.  I know, it's Good Friday, but it's also special for me because today marks the 100th day that I have gone without drinking a soda.  I began this "experiment" at the beginning of the year as my New Year's resolution and have continued it to this point.  In my last update I listed the restaurants that I have frequented and listed them into two categories, the Water Supporters and the Water Discriminators.  The main point of my blog today is just to exclaim that this works!  After 100 days of not drinking soda (and making no other changes to my diet), I have lost 10 pounds!  I don't even think about soda anymore.  No matter where I go, I order water or water with lemon (to be fancy) to drink with my meal.  So give it a try.  It will take a couple of weeks to break the habit of wanting soda and wanting to order a soda with your meals, but once you get used to it, it's easy.  If you go to a place with good waitresses that remember you (like CJ Muggs in Clayton), they will even bring you your water (with lemon) without asking!  And remember, "water's free man"!  You'll even save some cash on the side!

Buying bonds

For people who have become disillusioned by the stock market but still can't see the value in putting all of your money in low yielding CD's, bonds could be a nice compromise. Let me dispel a few myths about buying bonds. A lot of people think that you have to have a lot of money to buy bonds. This is not true. Bonds are sold in increments of $1000. Now while it is not practical to buy one bond, you don't need to pony up $50,000 or $100,000 to get in the game either. Ask your broker to find you some odd lots. These are small baskets of bonds sold on the secondary market in weird or odd increments, like 8 or 13. Someone who needed to sell their bonds prematurely, sold them back to their broker, who in turn placed them in inventory. Since most big players don't want odd lots, they typically sell at a deeper discount, so you can get a good buy if you find some available. Another common myth is that you have to own bonds for 20 or 30 years. While bonds are typically sold in the primary market with 15, 20, or even 30 year maturities, you can find bonds in the secondary market that mature in 5 years, 3 or even next year. Remember, the bond market is huge, way bigger than the stock market. Ask your broker to search for the time frame you need. One strategy is to set up a bond ladder. It works like this: Buy a portfolio of bonds with staggered maturity dates. Some that mature in 3 years, some in 4, some in 5, and so on. That way, you will have money come available in each time period that you can use for something else or reinvest in new bonds. Then you won't be in a position to have to sell something at a loss in case of an emergency. Most brokers don't deal in bonds that much, that's why they peddle stocks and mutual funds, but if you find a broker that knows about bonds, he can make you some money without the downside risk of the stock market.

Still afraid of stocks?

Over the past 4 weeks, the stock market has seen it's best performance since 1933.  Still, after last year's crash and the current recession that is still taking it's toll on workers, many people are not convinced that it is safe to get back in the market.  Instead of going from one extreme (stocks) to another (cash), why not try bonds?  

“Bonds are the new stocks,” says James Sarni, managing principal at Payden & Rygel, a Los Angeles–based investment firm.

Corporate Bonds are a great opportunity to find higher yields than cash and CD's, without the risk and volatility of stocks.  Unlike bond mutual funds, if you buy an individual bond and hold it to maturity, you will receive your full principal back.  If you bought it at a discount, you can even make a profit on your initial investment.  All along the way, you will get the income, called coupon payments (think interest) that typically are paid every six months.  The main risk in buying bonds are default risk, meaning the company that issued the bonds go out of business.  But this is a low risk when buying investment grade bonds, that is, bonds with credit ratings of BBB or higher.  You want to buy solid companies, just like stocks, but don't be afraid to buy a bond with a rating of A or AA.  You do need to bring a little more cash to the table when buying bonds too.  Commissions are priced in to the price you pay for the bond, so the more bonds you can buy at one time, the better price you will get.  For more on bonds and some specific bond ideas, read the article "Better Off in Corporate Bonds".  So call your broker and set up an account, and you can be a Bond trader.  It's a quite bit safer than a Day trader!

Can Facebook and Twitter Save You Money?

Today's blog is a piece that I wrote for the St. Louis Bloggers Guild, which was posted on Saturday.  As a member of the Guild, I have an opportunity to write for them about once a month.  I want to thank my editor, Kelli Stuart, for helping me with this article:

Most people using social networking sites do so primarily to keep in touch with friends, family, and business associates. However, a newer trend that’s emerging is for businesses to reach out to their customer base and make special offers and discounts to their “fans”. If you become a “fan” of a retail company that you regularly shop, you can get coupons sent to you for online or, sometimes, in-store purchases. This is beneficial to both the customer and the retailer as it connects them in a profitable way during today’s economic crunch.

It is wise of companies to be thinking outside the box in a time like this.  Using the innovative technologies that are present before them, companies are building a connection between themselves and their customers that couldn’t have existed otherwise.

As a customer, however, there is one critical point to remember before connecting yourself too closely with a company online:  by adding businesses to your friends list, you are giving them access to your profile information. You should think carefully about this before adding, say, The Melting Pot as a friend.  Do you really want whoever is in charge of their online activities to see the photos of your vacation to Cancun?  And, honestly, how often are you going to eat at The Melting Pot?  Does the benefit of adding them as friend outweigh the risk? 

The Melting Pot is just an example of course.  You should think carefully before you allow anyone access to your personal information.  Also, if you’re adding these companies in order to obtain coupons for their services, you need to decide whether the discounts they offer are for items you would normally buy anyway.  Because if they’re not, you’re not really saving money.

For a list of companies that are participating in offers like these, read the article “How Facebook, Twitter Can Save You Money.”

The bottom line is this: online social media is extremely beneficial if used properly and with a healthy dose of caution.  Read up on the benefits and risks of your actions and make educated decisions.  If you do this, you set yourself up for success in the end.

Emergency Savings

Amidst all the doom and gloom that this global recession has brought to us this past year and a half, thanks to the networks and CNBC, is worries about your job. Unemployment is growing in America and it's not just happening in Detroit. I have recently heard from friends in Oklahoma City and St. Louis who have lost their jobs and are actively looking for work. So what should you do if you are still gainfully employed? For one thing, don't assume your job is safe. As Rick Wagoner recently found out, even if you are the CEO of a large corporation, your job is at risk. So if you don't already have an emergency savings account set up, open one right away! Many people today are living paycheck to paycheck, without any short term savings of any kind. So if they lost their job tomorrow, how will they pay the bills next month? The rule of thumb is to have 3 to 6 months of expenses set aside in an emergency savings account. This is money that should not be invested aggressively in the stock market or held in CD's. It needs to be liquid, meaning its available at a moments notice, typically accessible by writing a check or transferring money into your checking account. The preferred type of account for this is a money market account. These usually pay a higher interest rate than normal checking or savings account do, and are available at your local bank or through your investment rep in a brokerage account. The amount of money you want to ultimately save in there is an amount equal to the total monthly expenses you have times the number of months a person with your job skills would need to find a new job. So if you are a nurse, it might only be 3 months, but if you are a factory worker for Chrysler, it could be much longer. If you never lose your job, great, you can use this account to pay for other large expenses like replacing your refrigerator or washer and dryer. So get down to your local bank and open up that new account. If you need a suggestion for a good bank, I know of one!

Downsized

Well, we need to report a State of the Blog today. We found out yesterday that our application for TARP money was denied by the Treasury Dept. We were told that we don't have a viable business model for surviving the next 90 days. At first we were upset, but after thinking it over, we were actually kind of relieved. You see, since I am the CEO of my blog and pay myself a salary of over $500,000 per year, I would have had to take a salary cut. It's kind of hard to support a family of 7 on less than $500K you know? We would probably have to cut our cable package, and gas is surely going to hit $3/gallon this summer which will make fueling up the Navigator much more expensive. So things didn't seem so bad after all. That was until we got the letter in the mail that President Obama was asking me to step down. Seems his staff had been reading my blogs and determined that a different person at the helm would be better for my blog and for this country. So effective immediately, we will not be writing our blog until I can find an acceptable replacement.
I heard Melody from the Toasted Rav may be looking for work. I'll give her a call.