Net Worth

Carrie Mauriello

• Publisher: Routledge
• Year: 2009
• eBook ISBN: 9781136377143
• Topic: Business
• Subtopic: Finance
• Index: Business

First Published in 2001. Carrie Mauriello invites readers to take maximum advantage of the Internet's plethora of financial resources with Net Worth, Second Edition. This book helps to make the electronic superhighway a personal partner in building wealth. This edition includes discussions and Web resources that examine financial planning as well as investment tools to aid readers in identifying the most promising strategies. This book reveals that the Internet is a robust, powerful and profitable resource. This volume is a must-have for the shrewd investor and financial partner. · Helps the reader calculate net worth · Gives basics of capital accumulation · Discusses a wide variety of investment tools, including stocks, bonds, mutual funds, options, IPOs and futures · Explains the fundamentals of life, health, disability, property, and liability insurance · Covers debt, financing, taxes, education funding, retirement planning, home buying, and estate planning Net Worth Second Edition will also introduce readers to websites, books,. Magazines, on-line services, and more. The book comprises a primer on personal financial management and an exhaustive collection of finance-related tools, links, and resources available on the internet.

CHAPTER 1

INTRODUCTION

Wealth is not without its advantages and the case to the contrary, although it has often been made, has never been proved widely persuasive. — John Kenneth Galbraith, The Affluent Society

THE SHREWD INVESTOR’S MOST IMPORTANT PARTNER: THE INTERNET

Along with delivering everything from real-time weather to video-clips of your favorite band, the Internet provides a heretofore unheard-of degree of information on investment and financial planning. In fact, some of the richest resources on the Internet and World Wide Web address the information needs of those interested in stock and bond investment, estate planning, life insurance, debt management, and real estate. Thus, for the shrewd investor or financial planner, the Internet can be a robust, powerful, and profitable resource.

Net Worth is designed to help you navigate, use, and get the most out of the rich financial resource that is the Internet. To that end, Net Worth comprises both a primer on personal financial management and an exhaustive cyber-guide indentifying a collection of finance-related tools, pointers, and resources on the Internet. In sum, Net Worth has been designed to help you take maximum advantage of the Internet’s many financial resources and, thus, make the electronic superhighway your personal partner in wealth-building.

FOR INVESTORS IN STOCKS, BONDS, OPTIONS, FUTURES, AND MUTUAL FUNDS…

Net Worth provides tools and techniques with which you can view real-time quotes and even buy and sell securities via the Internet. The book also shows you how to dig into authoritative on-line research databases (such as those maintained by Morningstar Mutual Funds and Value Line), and how to view real-time Internet charts and graphs that track stocks and mutual funds right on-line. Figure 1.1 shows the Morningstar Web site where you can get information about mutual funds.

Figure 1.1 Mutual fund information available from Morningstar on the World Wide Web.

FOR PURCHASERS OF LIFE, HEALTH, AUTO, AND HOME INSURANCE…

Net Worth is your guide to Internet tools and resources to help you insure yourself, your life, your health, your possessions, and your family—and do so without paying a dime more in premiums than you have to! Figure 1.2 shows the MetLife Web site where you can get information on life insurance.

Figure 1.2 Life insurance information available at MetLife on the World Wide Web.

FOR THOSE SHOPPING FOR MORTGAGES AND OTHER TYPES OF LOANS…

Net Worth gives you complete, exhaustive, information on how to use the Internet to comparatively shop for loans from a range of lenders and even make applications for credit right over the Internet!

And there’s more. Net Worth is crammed with information on how to use the Internet to help with estate planning, income tax planning, and retirement planning. It also features a host of Internet tools and information resources that are essential for those involved in real estate investment. Figure 1.3 shows the IRS Web site where income tax information is available.

Figure 1.3 Income tax information available from the IRS on the World Wide Web.

Whether you want to find and read corporate annual reports on-line or download terrific investment software from a score of excellent finance-related archives, Net Worth will make it all easy to do. In the process, Net Worth will turn you into the ultimate cyber-finance guru capable of using the Internet to leverage your own personal net worth!

YOUR CORNUCOPIA OF OPTIONS

Most people, over the years, use a number of different financial instruments to achieve their various financial objectives. In these complex economic times, the average middle-class or upper-middle-class individual is usually involved at one level or another with an amalgam of financial tools including common stocks, bonds, mutual funds, insurance, fixed and variable annuities, IRAs, home real estate, and cash savings. Planning for the interplay of these various instruments, at the right times and in the right amounts, is what financial planning is all about.

It is also what this book is all about. There is no better tool than the Internet to help you gather information on the cornucopia of financial instruments and options made available to you. There is no better resource than the Internet to help you construct the series of coordinated plans that will work in unison for the achievement of your overall, long-term, financial objectives. Figure 1.4 shows The Street Web site produced by an A list of financial journalists offering financial information.

Figure 1.4 Wall Street savvy financial information from The Street on the World Wide Web.

THE SEARCH FOR WEALTH

Pirates of yore, searching for treasure, most often had a map to guide them. Olympic athletes, working diligently through long years of childhood and adolescence in their quest for another form of gold, have precise training plans without which their quest would be in vain. Like these seekers of different forms of gold, we must all be careful to plot well-planned strategies in order to ensure our own fortunes. And then, we must conduct ourselves according to these strategies. The treasure map that guides you to wealth and financial security is your personal financial plan.

What I have in mind when I speak of financial planning for the maximization of wealth is not a get-rich-quick scheme, or a method of ferreting out “fast plays” on the stock market that are “sure-bets” for vast returns with minimal risk. Not at all. What I have in mind when I speak of financial planning is as follows. (Get out your highlighter for this one!)

Personal financial planning is the construction of a series of coordinated plans that will work in unison for the achievement of one’s overall, long-term, financial objectives.

Planning and careful, strategic investment are your keys to safe-and-secure old age, the ability to fund your children’s college education, and so on. Your financial planning also provides the keys to the luxuries of life: a ski lodge, a sailboat, or whatever other “perks” your instincts steer you towards.

Over the years, investors have used a number of different financial instruments to achieve their various financial objectives. Your use of these various instruments, at the right times, and in the right amounts, in a way that assures both short- and long-term solvency for yourself and your dependents, is what financial planning is all about. It is also what this book is all about. Figure 1.5 shows the Web site for the New York Stock Exchange where you can find valuable information.

Figure 1.5 Information about the New York Stock Exchange on the World Wide Web.

WHO SHOULD PLAN?

Everybody. And most especially, you.

The notion still lingers that if one’s name is not Vanderbilt or Morgan, then one need not spend much time worrying over financial matters: that one’s pot is so small as to not matter very much, and that one’s options are so limited as not to count for much. One should simply put whatever one can afford away, possibly in an IRA (individual retirement account), and hope for the best.

But the fact is that even this lazy approach to financial planning forces one to make critical choices. Should the IRA be invested in the money market or in stock mutual funds? If you decide on a stock mutual fund, should the fund be aggressive growth, income, or balanced fund?

If you are like many people, you may not fully understand what a mutual fund is, how such a fund operates, or how to use a mutual fund as an investment vehicle, let alone terms such as aggressive growth or balanced fund. Don’t worry. That’s what this book is for. And, as you read through these chapters, you will find there are thousands of other financial and investment resources on the Internet and the World Wide Web.

Of course, the most sophisticated tools of investment and planning (T-bills, zero-sum bonds, and tax-free municipal bonds) tend to be used by those with high incomes, large properties, and extended business interests. But the majority of investment and planning tools are of as much value to the average investor as they are to a Dupont or a Rockefeller.

In fact, the rise of the middle class over the past half-century has dramatically increased both the need for and the complexity of financial planning. Never before in the history of the planet have the “non-rich” been so in need of planning to balance and maintain the stability of their income, assets, gifts, inheritances, and investments. In short, what we most need to manage is the fabled affluence of the common man—the affluence of John Kenneth Galbraith’s “affluent society.”

START PLANNING AND MAXIMIZING YOUR WEALTH RIGHT NOW

The time to start planning for your financial future is now at this very moment. Remember the old cliche: Today is the first day of the rest of your life. Well, today is truly the first day of the rest of your financial life.

Within this...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• Chapter 1: Introduction
• Chapter 2: Where are you Starting? Calculating your Net Worth
• Chapter 3: The Basics of Capital Accumulation
• Chapter 4: The Joy of Stocks
• Chapter 5: For the Rich and/or Brave: Stock Options, IPOS, and Commodities Futures
• Chapter 6: The Zen of Bonds
• Chapter 7: The Art of Mutual Funds
• Chapter 8: Insurance Fundamentals
• Chapter 9: What are you Worth? The Art of Life Insurance
• Chapter 10: Calculating Risk: The Economics of Health and Disability Insurance
• Chapter 11: The Ground We Stand on: Property and Liability Insurance
• Chapter 12: Understanding the Different Kinds of Debt
• Chapter 13: Good Debt: Mortgage Debt
• Chapter 14: The Rip-Off of Revolving Credit Debt
• Chapter 15: College Loans and other Solutions for Financing Higher Education
• Chapter 16: Financing your Car
• Chapter 17: Basics of the U.S. Federal Income Tax
• Chapter 18: Tax-Saving Techniques and the Art of Electronic Filing
• Chapter 19: Gimme Shelter: The Art of Tax-Sheltered Investments
• Chapter 20: Retirement Planning Using Employment-Related Investment Options
• Chapter 21: The Art of Home Buying
• Chapter 22: Estate Planning Fundamentals
• Chapter 23: [email protected]
• Index