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Your Money and the Stock Market
Tweet Share on Facebook September 30, 2008 Comment (5)Investors planning to keep their money in the stock market for the long term have come to expect returns in the region of 10 percent, the historical average for the 20th century. But since 2000, returns have been significantly lower. From the start of 2000 through the end of this past May, annual returns for the S&P 500 Index were 1.1 percent. Since then, things have only gotten worse.
The popular press, for the most part, tells us not to worry and says we'll see 10 percent average returns once again. On My Own Two Feet, a personal finance book for women, bases its savings suggestions for today's 20- and 30-somethings on the assumption of 10 percent returns. Vanguard's chairman, John Brennan, assured his customers earlier this year that he believes the markets will return to historical averages, but not necessarily anytime soon. In its October issue, Martha Stewart's Body + Soul magazine took an even more optimistic perspective, advising a reader that the historical average is closer to 11 percent. (Perhaps they didn't adjust for inflation?)
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Audio: Are Money Market Funds Safe?
Tweet Share on Facebook September 30, 2008 Comment (1)Over the weekend, I spoke with WTOP about whether money market funds are safe. Listen now, download in
iTunes, or subscribe via 
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Are Wachovia Credit Card Rewards Points Safe?
Tweet Share on Facebook September 29, 2008 Comment (9)This morning, the Wall Street crisis really hit home for me. Citigroup purchased my bank, Wachovia. I had noticed Wachovia's shares falling over the last week, largely because of its hefty mortgage debt, and the thought that it could fail crossed my mind. But because I have nowhere close to the $100,000 limit that the FDIC insures, I was mainly concerned about logistics: Would my credit and debit cards still work? What about my credit card rewards points?
So far, since the purchase was announced, my account is functioning as normal, and Wachovia assures its customers that we should "continue banking as usual, and feel confident that their deposits are secure."
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Ron Paul: Don't Ask for a Bailout
Tweet Share on Facebook September 26, 2008 Comment (272)So, have you made up your mind yet?
Americans are apparently divided on whether or not to support the financial bailout. Poll findings have been inconsistent, with USA Today reporting that almost 80 percent want the bailout and the CBS Evening News saying only 16 percent of Americans think it's a good idea and more than 1 in 3 thinks it's a bad idea. Judging from yesterday's comments, most Alpha Consumer readers come down firmly against it.
I asked Rep. Ron Paul, the Texas Republican who was one of the first people to speak out against the bailout because it conflicts with his small-government beliefs, what the plan would mean for consumers who are struggling with foreclosures, credit card debt, and other financial stresses. (Some versions of the proposal include provisions to aid such borrowers.) He told me:
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The Bailout: What It Means for Consumers
Tweet Share on Facebook September 25, 2008 Comment (39)President Bush had a tough job to do in his speech last night. He had to convince the nation—including people who are on the verge of foreclosure, struggling to pay student loan debts, and falling behind on their credit cards—that it was financial giants, and not them, who deserve the $700 billion bailout.
The proposal has been met with fierce opposition this week as consumers ask themselves why they should squeeze their own budgets even further to help hand over $2,300 per taxpayer to companies run by people who earn more than that per hour.
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Presidential Debate: Your Financial Questions
Tweet Share on Facebook September 24, 2008 Comment (22)In preparation for the first presidential debate this Friday, I want to know what you would ask the candidates. Do you want to know what they would do to help your drooping retirement account? Or how they plan to deal with rising gas and food prices? Or maybe whether you can get a government bailout for your own bad debts?
To start things off, I asked Catherine Collinson, president of the Transamerica Center for Retirement Studies, what she would like to ask. Here's her question: "With more Americans struggling to make ends meet, often at the expense of retirement, what would you do, if elected, to help Americans better prepare for a financially secure future?"
Now it's your turn—what would you ask the candidates? One randomly selected commenter will receive a copy of Jennifer Barrett's The Smart Cookies' Guide to Making More Dough.
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Podcast: Credit Card Deals
Tweet Share on Facebook September 23, 2008 Comment (1)For this week's Alpha Consumer Podcast, I spoke with Justin McHenry, research director at IndexCreditCards.com and Zen Personal Finance blogger. He explained how consumers—especially those with strong credit scores—can benefit from the financial crisis by taking advantage of lower interest rates. He also reveals why small banks tend to come with lower fees and fewer penalties, something to consider when choosing a financial institution. And he gives his own tips on paying off credit card debt, which involve focusing on getting rid of the smallest debt first. You can also hear the Alpha Consumer Tip of the Week on dealing with stock market losses. Listen now, download at
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Audio: Best Places to Retire
Tweet Share on Facebook September 23, 2008 CommentOver the weekend, I spoke with WTOP about the 10 places we selected as America's Best Healthy Places to Retire. Because the radio station is based in Washington, D.C., we focused on Reston, Va.—a town filled with European-style plazas and walking paths. Listen now, download at
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Painful Package: Hard Plastic Is Hard to Open
Tweet Share on Facebook September 22, 2008 Comment (12)Dear Alpha Consumer,
My dear 85-year-old mother has trouble opening the ridiculously difficult plastic packaging that consumers have to pry apart and slice op en every day. Arthritis has twisted my mother's hands, so things that are tricky for the rest of us are nearly impossible—and always time consuming—for her. She has particular trouble with the Oral-B toothbrush. Have you heard of this problem, and what can people like my mother do about it?
You don't need arthritis to realize that the stiff packaging used on many products today is hard on our hands, let alone the environment.
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Single Women Don't Save Enough for Retirement
Tweet Share on Facebook September 19, 2008 Comment (5)The Transamerica Center for Retirement Studies has some scary news for single women: Many aren't saving enough to fund the kind of retirement they might want.
On average, the center estimates that a single woman needs to have saved $500,000 by the time she reaches retirement. But according to its annual survey, most are on track to store up far less than that. One-third of single female respondents had saved less than $25,000 and only 1 in 10 had saved more than $100,000. Only 6 percent had calculated how much they will need to fund themselves once they stop working.
