Debt, Credit Card & Consolidation Current News Digest

How many times have you run into this scenario at work: you start a task that seems ridiculously inefficient or outdated, bring it up to your supervisor only to hear them say “that’s how we’ve always done it.” Sadly, it happens all too often and it’s the product of the “if it ain’t broke, don’t fix it” mentality that permeates almost every aspect of life. When was the last time you took a hard look at how you did things? Your commute to work every day, how you pay your bills, and how you set your thermostat? Probably not much, especially with all the other, more important, things you have to worry about right?

I totally get it because everyone does the same thing. There are a lot of things in our lives that we probably do the exact same way because “that’s the way we’ve always done it.” It’s familiar. It’s comfortable. It has worked… but it could be better. And, just like at work, we’ve done it that way because while it may not be the best way, it worked and you have a million other things competing for your time and energy.

However, today I want to work with you to try to find some ways we may be leaking money. It’s hard to know where you might be losing your hard earned cash bit by bit because it’s hard to know what you don’t know, right? So, to help get our mindgrapes flowing, I listed a few common money leaks in the hopes that you could kick in a few leaks you may have found recently.

Not Using Billpayment Services

It’s the year 2010 and if you’re still putting a stamp on an envelope to pay your bills, you’re wasting your money. The stamp is going to cost you 44 cents and the envelope will run you a penny or two, making each bill cost you about forty five cents each. Pay five bills a month, twelve months a year, and you have $27 you could spend on a case of good beer (or something else you enjoy). That doesn’t consider how much you’d pay in fees if the payment gets lost in the mail, which happens infrequently but is more likely to happen with the mail than with the photos of the Internet. Finally, think about all the time you’re wasting on making out the check, writing the address of the company on the envelope, and walking to your mailbox. With a few clicks, online billpay takes seconds.

Don’t Review Your Fixed Monthly Expenses

You don’t go to the gym as often as you think you do. You don’t use Netflix as often as you think you do. You don’t watch as much TV as you think you do. If you think I’m wrong, that’s fine, there’s a pretty good chance that even if you do use one of those things often enough to justify the monthly cost, you don’t do all of them enough to justify each of their monthly fees.

Keep a log of how often you use certain services and calculate how much you’re paying per use. Pay $90 a month for a gym membership? Even if you go every single day, that’s $3 a day. Once you do the math, you might be better off paying per visit if they offer it. This applies to almost everything and you’ll be surprised how much you don’t use your monthly memberships.

Don’t Optimize Your Savings

How much money do you have in your checking account? How much do you actually need in that account? This is one leak I know we are currently suffering from and it’s such an easy fix, if we take the time to do it. Money in our checking account earns nothing, whereas money we transfer into our high yield savings account has the opportunity to earn at least a percent or two. We keep a bit of a buffer in our checking account but everything else goes into a savings account where we get a little something while we’re waiting.

Drive Fast, Brake Hard

If your morning commute is 20 miles, it’ll take you about 21 minutes and 49 seconds if you go 55 miles per hour. If you drive 60 miles per hour, you get there in 18 minutes and 28 seconds – or three and a half minutes faster. The difference? You can get pulled over for speeding if you are going 60 in a 55 and while it will probably not happen, it will suck really bad the one time it does. Plan your trips better and stop speeding. You avoid tickets, you improve gas mileage and tire lifespan, and you don’t sacrifice much. (if you drive 80 MPH, you still takes 15 minutes to get there…)

While you’re at it, use Google Maps and map out your daily commute. You can drag your path around to see if you’re really minimizing your total mileage or the number of red lights you hit.

Don’t Review Your Insurance Coverages

When was the last time you took a look at your insurance needs and adjusted your coverage? Here’s a scenario that probably happens all too often – you increase your deductible to lower your premiums (great move) but over the years your car has gone down in value and now it’s worth less than your deductible. It sounds obvious right but do you know the blue book value of your car? Ask your insurer what they think the value of the car is (chances are it’s less than blue book)… you’ll be surprised. Anyway, it’s not an intelligence test, sometimes we just keep doing what we’ve been doing because it made sense once and I’m telling you that you should review them. If things have changed in your life and you need less coverage or a different type of coverage, tell your insurer and get your policies adjusted to fit your current needs.

Don’t Find Ways to Trim Electricity

Finding ways to conserve electricity around your home is a nice way to plug a leak because you often only need to do something once and you reap the savings for months. I personally like CFLs, despite their up front costs, but there are plenty of ways to trim your electricity bill without much up front cost. For winter savings ideas, here a post on ten quick tips to winterizing your home. If you do a quick search on Google on how to conservation, you’re sure to find a lot of tips you can implement to start saving on electricity.

Don’t Review Your Mutual Funds

How has your mutual fund been performing? Are you happy with it? How much are you paying? Do you own the world’s most expensive index fund? (it’s the Rydex S&P 500 and it charges a 2.28% expense ratio!)

My point is that you should review your investments, especially your mutual funds, to see if your investments make sense. Index funds are easy to review because it’s as close to an apples to apples comparison as you’ll ever get and it really makes little sense to pay more for one fund over another (there are some differences, mostly dealing with the speed at which they match index changes, but they’re fairly nominal). You wouldn’t pay $20 for a gallon of milk, right?

I tried to run the gamut from leaks in your home to hard money leaks, like overpaying for an index fund, but I don’t know what I don’t know so I need your help. What money leaks do you see every day that most people don’t seem to catch? What about a leak you may have plugged lately?

(Photo: johnx62)

Find and Plug Your Money Leaks from personal finance blog Bargaineering.com.

This post is from GRS staff writer April Dykman.

For many people, mindful consumerism starts with questioning the desire to buy Stuff. The reason might be to save money or avoid clutter — maybe both. It’s the first part of a journey to differentiate needs from wants and make mindful decisions about where to spend our hard-earned money.

But at some point, most of us will consume. We’ll buy food or clothing or household items. We’ll need to replace something, fix something, or upgrade something. When we make these purchases, we’re playing a role in a process. Much goes into creating a product and getting it on the shelf, though as a consumer, we don’t see that process. We don’t know if the companies involved in bringing it to us have decent working conditions for employees, pollute water systems, or include additives that pose health risks to our families.

Daniel Goleman, author of Ecological Intelligence: The Hidden Impacts of What We Buy, wrote about considering the global effects of our purchases in his essay, Making the Right Choice:

An organic cotton t-shirt may be called “green” because they didn’t use pesticides or chemical fertilizers when growing the cotton. That’s on the good side of the ledger, to be sure, but if we look into the life cycle of the t-shirt, we discover that organic cotton fibers are shorter than other fibers, so you need to grow a lot more cotton per t-shirt. Cotton is typically raised in arid parts of the world, and it’s a very thirsty crop, so a lot of water is implicated in the production of the t-shirt.

Also, if it’s a colored t-shirt, we have to take into account that textile dyes tend to be carcinogenic. When we consider all these angles, we may come to see that if you change one thing about a product and leave 999 unchanged, it’s not green.

It’s enough to make the average consumer’s head spin. Most people would like to make informed choices and reward companies whose processes make us feel good, but doing this in practice is daunting. If a busy parent is in the grocery store with two children to wrangle, it’s not feasible for that person to stop and trace the life cycles of Cheesy Poufs versus Cheddar Puffs. People can’t be expected to spend hours on the web researching the health, societal, and environmental effects of every purchase. Not gonna happen.

Technology provides the tools
Luckily, it’s getting easier to know what’s behind a brand. Skin Deep and GoodGuide are two web databases that provide the backstory on the Stuff we buy.

• Skin Deep is a safety guide to cosmetics and personal care products researched by the Environmental Working Group. You can search by product, ingredient, or company, and the site will return a hazard rating with the product broken down by ingredients.
• GoodGuide is a database of more than 70,000 food, toys, personal care, and household products that rates the products and companies based on the effects they have so that users can make informed decisions based on what is important to them.

For example, GoodGuide provides information about Quaker Quick Oats, which it rates a 7.3 overall (out of 10), and Nature’s Path Organic Instant Hot Oatmeal, which is rated 6.7. We might assume that the organic brand would be healthier, but in fact it’s higher in sugar than similar products. When it comes to environmental effects, Quaker Quick Oats scores lower for water and energy management. Users can delve deeper into how these ratings are determined by clicking on See All Data.

The brainchild of Dara O’Rourke, a professor at University of California-Berkeley, GoodGuide was developed with experts from Harvard and MIT, with tech input from talent at Google, eBay, Amazon, and Intuit. And the tech part is what makes GoodGuide great. The database is available as an iPhone, iPod Touch, and iPad app that allows users to scan barcodes and compare products. Users also can create personalized shopping lists and lists of products to avoid, making it easier shop mindfully when you’re on the go.

Start small
If you’re interested learning more about where your Stuff comes from, make a few changes and build from there. Don’t feel like you have to throw out all of the “bad” Stuff you own and replace it with the “good” Stuff. To start, pick one product you’re curious about, and see if it’s listed on Good Guide or Skin Deep. How does it score? Is there a better alternative that will still meet your needs? Often the better-rated product also is the less expensive, which is a great bonus. In fact, I’ve slowly replaced my skin-care products with cheaper products that also rate better when it comes to health and societal effects. Sometimes the expensive products packaged in “green”-looking bottles rate surprising low.

I’m interested to know what you think about databases like Skin Deep and GoodGuide. Have you ever wondered how some of the products you buy get to the shelf? Would you use tools like these to learn more about the effects of the Stuff you buy?

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Related Articles at Get Rich Slowly:

• Obsessive Consumption
• Word2Word: Free Online Language Tools
• links for 2007-04-16
• Use a No-Spend Month to Become Mindful of Money
• links for 2006-11-21

If Google wanted to create a quick buzz around its new social networking service, it's certainly accomplished that. Last week, when the Web giant automatically signed up millions of Gmail users for its new Buzz social network, much of the Internet was sent into a privacy tizzy.

Google announced serious modifications to the service, later in the week, but that wasn’t enough for the Electronic Privacy Information Center (EPIC).  On Tuesday, it filed a formal complaint with the Federal Trade Commission, asking the regulator order more changes. EPIC also accused Google of violating federal consumer protection law and suggested the firm may have broken wiretap laws, too.

While the details of the Buzz privacy dispute can seem esoteric, the main thrust of EPIC's complaint is simple: Google should never had pushed all 37 million U.S. Gmail users into a social networking service without asking, said EPIC Executive Director Marc Rotenberg.

"E-mail is one area on the Internet where we have a well-understood expectation of privacy," Rotenberg said.  "E-mail is for private messages. You sign up for social networking to communicate publicly with people, Google tried to turn e-mail into social networking, and that's where they ran into trouble."

The complaint lays out a series of alleged Google missteps that EPIC says constitute unfair or deceptive trade practices that violate the Federal Trade Commission Act. For starters, it says, all users who checked their Gmail account last week were suddenly signed up for Buzz.  While Google offered users a chance to "check out" the service, it didn't give them the option to avoid it.

"Regardless of whether a user clicked the button labeled 'Sweet! Check out Buzz' or “Nah, go to my inbox,’ Google Buzz was activated," the complaint says.

Gmail account holders who then began using Buzz found their first public posting was essentially a list of their most frequent e-mail contacts.  Buzz decided for itself who users e-mailed most often, then put those users on a list as "followers" and made that list public. Quickly, nightmare hypothetical scenarios were published — workers who had recently e-mailed about job interviews had their job hunt exposed, for example.   Cheating lovers or spouses were outed.

"Gmail contact lists routinely include deeply personal information, including the names and email addresses of estranged spouses, current lovers, attorneys and doctors," the EPIC complaint said. "Users were not explicitly warned that their lists would be automatically visible to the public. … Anyone looking at a newly activated Buzz user’s following list would know that the list indicated which people that user communicated with most often."

In addition to causing potential embarrassment — or worse – Google may have broken the law by disclosing e-mail contacts, EPIC said.

"Improper disclosure of even a limited amount of subscriber information by an e-mail service provider can be a violation of both state and federal law," it said. "An attempt by an e-mail service provider to attempt to convert the personal information of all of its customers into a separate service raises far-reaching concerns."

Google has already gone through two rounds of revisions with its service, and Buzz now tells new users that frequent e-mail partners will be “followers” unless the user prevents that.  New users now see a list of potential followers — checked by default — when they sign up for the service.

 

Google's revised start-up doesn't go far enough, EPIC says

But on Tuesday, Rotenberg said that Google still hadn't gone far enough to address privacy concerns.  Buzz still ropes in Gmail users and their e-mail contacts by default, which can lead to unintended disclosure of personal information, he says.

Rotenberg said Buzz users should have to actively opt in before Buzz is activated, rather than opt out.

"It's always about the defaults," he said.

EPIC has called on the FTC to force Google to:

*make Buzz a fully opt-in service.
* force Google to cease using Gmail users’ private address book contacts to compile social networking lists.
*give Buzz users more control over their information.

For a company that has already dealt with plenty of privacy related issues, Google's misreading of public reaction to Buzz is a surprise, said Larry Ponemon, a privacy researcher who runs The Ponemon Institute.

"It is astonishing to me that a decision was made to release a product that the average person would see as a potential privacy snafu," he said. "Things like this seem to happen because people making decisions just aren't thinking about privacy. … Sometimes companies don't when they are about to release something they think is really cool."

Ponemon did say that he was impressed with Google's quick response to the controversy, taking only a few days to made changes to the service.

"They did take it seriously, you could tell they had all hands on deck," he said.

Rotenberg said Google was more worried about stiff competition in the social media world than privacy.

“Google tried to take advantage of its market position" by dragging all Gmail users into Buzz overnight, he said, thereby giving the service a running start in the uphill battle to catch Facebook and Twitter in the social networking space.

That's why he wants the FTC to be more proactively involved in privacy policy.

"The FTC has had a hands-off policy, leading to some bad business practices," he said.

Google said in an e-mail statement to msnbc.com that it was working hard to make adjustments to its service based on user feedback, and will keep "user transparency and control top of mind.

“We also welcome dialogue with EPIC and appreciate hearing directly from them about their concerns," the statement continued. "Our door is always open to organizations with suggestions about our products and services.”

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Welcome to the 243rd Carnival of Personal Finance!

What in the world does that mean? Well, a blog carnival is a weekly round-up of articles on a particular subject (in this case, money). The carnival moves from blog to blog, and gives readers a chance to find new writers they may enjoy.

It’s been over two years since Get Rich Slowly last hosted a carnival (it takes many, many hours to put this together), but I wanted to do one for old time’s sake. Besides, it’s a great way to support up-and-coming financial bloggers. I found several great new money blogs while looking through the submissions this week.

So how does this carnival work? I received submissions from 72 other personal-finance blogs. Yes, I read every one of these articles. Yes, it took forever. I’ve cut out the worst of the submissions, as well as any that don’t apply to personal finance.(Come on, folks: “the economic link between China and Canada” has nothing to do with the day-to-day financial life of the average person.) The 61 articles that remain are included in this carnival.

I’ve organized the articles by topic. The categories below are listed in alphabetical order — except for Relationships, which I bumped to the front in honor of Valentine’s Day! Within each topic, I’ve ranked the articles in order of how much I liked them. (So, the first article in the investing category was my favorite investing article this week.) And if I really liked an article, I marked it with a happy star: . If you’re looking for just the best, skim through and find the starred posts.

Which of these articles is your favorite?

Relationships
Mr. Cheap at Four Pillars has a mind-boggling look at two views on the economics of dating. He explains how a man he knows literally keeps score of how much he spends on the women he dates; and how a woman he knows who tries to get men to spend as much as possible on her. This is “personal” finance in the true sense of the term.

Ray from Financial Highway, whose site slows my browser to a crawl, has a look at frugal Valentine’s Day gift ideas.

Jason at One Money Design also has some inexpensive Valentine’s Day ideas. (Although, I don’t know: Pizza can be romantic? Really?)

Joe from Personal Finance by the Book has a short look at Love and Money, just in time for Valentine’s Day!

Budgeting
Dough Roller has a great article about improving your finances by using an overall financial goal. We have so many financial goals, many of which won’t be met for years or decades, that it can be easy to get discouraged by our progress. Borrowing an idea from David at MoneyNing, DR says that instead of focusing on the future, we should strive to simply do a little better every month. Doubleplusgood.

Darwin at Darwin’s Finance wonders, “How much could you reduce your budget if you were laid off?” Running the numbers on his own life, Darwin finds he could save over $1,000 per month if he had to. As you know from my own experience, I too was able to save $1,000/month when I cut my spending and paid off my debts. I wonder how many other folks could do this if they had to…

At the Canadian Finance Blog, Tom urges readers to control spending with a budget. It’s basic stuff, but it’s important.

Anastasia from Living on a Budget is a 36-year-old Russian woman living in London. This week, she has a short quiz to help you figure out which budget personality you are. (I scored a 55, by the way.)

Career
Mike, the Financial Blogger, explains how he got three salary increases in less than a year. Mike uses a poker analogy — and lots of winky faces — to make his point, which is an excellent one! Remember: Negotiating your salary is one of the best things you can do to improve your personal finances.

At the Early Retirement Blog, Kyle argues that you should set aside 10% of your work for retirement, not 10% of your income. “The miracle of compound interest will get you where you want to be in 40 years,” he says, “but dedicating 10% of your time to generating alternative streams of income will get you there in 5.” While I think Kyle’s guilty of some hyperbole here — it’s extremely unlikely (read: nearly impossible) that you’re going to retire in five years just by spending 10% of your work hours on side projects — I think his overall idea is good.

Paul, the FiscalGeek, argues that the secret to success is hustle. I happen to agree: Hustle is vital in almost every area of life, especially personal finance. (But Paul, please, learn how to use an apostrophe.)

Jonathan from Christian PF has a look at five legitimate work-from-home jobs. I know there are legitimate work-from-home jobs out there, but even the real ones make me wary. I think it’s much better to create a job of your own doing something you’re passionate about…

At Grad Money Matters, guest-poster Caroline shares the secret to finding a part-time job in tough economic times. The advice here is good, but I wish the article were a little more in-depth.

Debt
Though I found the writing a little sloppy and hard to follow, I really liked the submission from Penny Farthing who asks, “Is debt okay if it leads to self-improvement?” This is a fantastic question, and I think most people would say that yeah, this sort of debt is acceptable. (Think college loans and so on.) But where do you draw the line? I like this question so much that I may actually write a post here at GRS about it sometime in the future.

The always-awesome SVB from The Digerati Life explains how to apply for a loan at a peer-to-peer lender. I know know much about peer-to-peer lending, but I know that many folks have found it a useful way to attack their high-interest debt. This brief guide is a great way to get started.

Lakita from Personal Finance Journey has a look at everything you ever wanted to know about the new credit card laws but were afraid to ask. We’ve covered this recently at GRS, too, but Lakita’s take is a good reminder of the coming changes in credit card terms.

Craig from Money Help for Christians answers a question about options for when you can’t make your student loan payments. Because I know nothing about this subject, I learned something from this article.

If you really can’t make your student loan payments, you may end up in bankruptcy. If that’s the case, then Single Money Guy has some tips for rebuilding your credit after bankruptcy.

JS from Smart Money Daily goes over the 9 reasons Dave Ramsey hates HELOCs. Wordy wordy wordy.

Finances
Studenomics has a fantastic look at how you can make money as a tutor. I often think making money is the most-neglected topic in personal finance, so it’s great to see articles that offer real-life experience and advice about earning extra income. Great stuff.

David, the Personal Finance Analyst, has a long look at your secret credit scores and their implication. He doesn’t have any concrete recommendation, but these “secret” scores are important, and not enough folks know about them.

Sun at The Sun’s Financial Diary encourages readers to become master of their financial domains. Sun says that when getting and accurate picture of your financial situation is the first step to becoming a master of your finances.

Adam at Magical Penny has a thought-provoking look at why it’s okay to lose money in a savings account. He argues that even while inflation is chipping away at the value of your cash, there are great reasons to build your savings. I think his advice is right on.

RJ from Gen Y Wealth takes a look at the wealth effect, which occurs when your net worth increases due to an increase in home or stock prices. This increase makes you feel richer, and therefore causes you to increase your spending.

At his blog, Len Penzo explains inflation by showing that Avatar isn’t the biggest move of all time. Inflation can be hard for some people to grasp, and this is a good way to explain it.

Frugality
RC at Think Your Way to Wealth wonders, “Is self-reliance a lost art in this day and age?” This is a great mediation on our throw-away culture.

Ryan, the Financial Student, shares the story of how he’s getting 30 hours of college credit for 15 bucks using something called the post-secondary education option, which allows high-school students to take college classes for free. Way cool!

The Well-Heeled Blog argues that you can save money by embracing your natural hair, and says, “I used to spend $250+ and 4 hours in the stylist’ chair to straighten my hair. After I’ve come to accept (and even love) my wavy hair, however, I stopped the straightening treatments. I’ve discovered that I’m getting better hair and a fuller wallet in return.”

Investing
Note: There were a lot of of submissions in this category, and they’re all pretty good actually. They’re still ranked in order of how I liked them, but I felt these submissions were much stronger than in other categories, so even those near the end of the list are still worth reading.

My favorite post of the week is from Pop Economics, which I’d never heard of until today. Pop explores the illusion of control — our compulsion to do something with our investments. Studies show that we feel happier if we feel like we’re in control of our investing future. When we don’t have control, we feel depressed. With that in mind, how do you reconcile those instincts with passive, low-cost investing? This article explores a couple of options. I love this blog. It just started on January 1st of this year, which is why I’d never heard of it, but I’m a subscriber now!

Mike, the Personal Finance Ninja, gives three reasons the average joe is a bad investor. Mike says that you are not Warren Buffett. For most of us, active trading is not a good idea; instead, we should keep expenses low and diversify with index funds. Ninja cartoons! Warren Buffett quotes! Index funds! How could you not read this article?

Mike at Gather Little by Little shares the second part of a series on what he calls “investing baby steps”. In this installment, he examines some investing strategies for beginners. (There are more strategies to come in the future!) I think this is could be a useful series of articles for folks wanting to learn more about how to invest.

The Dividend Guy shares seven warning signs that you need to repair your investment portfolio, a good reminder that it’s important to review your investments at certain intervals. (I recommend reviewing your asset allocation once per year, though some folks think you should do it every quarter.)

Jim at Bargaineering just published another in his ongoing series of Devil’s Advocate articles, in which he tries to argue against conventional financial wisdom. (He doesn’t necessarily believe what he’s writing; he just wants to present the other side.) In this case, he tries to argue that you shouldn’t invest in the stock market.

Another Mike — Mike Piper, the Oblivious Investor — has a review of Zvi Bodie’s Worry-Free Investing, a book that argues investors should put their money almost exclusively into TIPS, advice that Piper thinks is…well, oblivious!

The Smart Wallet has a good post on a dry subject: Paying capital gains taxes when you trade stocks. This explains yet another reason it’s not a good idea to be an active stock trader.

At Free Money Finance, a guest poster explores the eight biggest mistakes investors make. Solid advice here.

Paul Williams from Provident Planning has an article with a very narrow target audience: He’s reviewed Prudential’s Retirement Red Zone, which is apparently a pitch at soon-to-be-retirees to use variable annuities.

Money Management
Jeff Rose from Good Financial Cents has a great piece on how to find the best financial advisor for you. If you’re in the market for a financial planner (or other advisor), be sure to read this.

Can you retire early without getting lucky? That’s what Tim from Canadian Dream: Free at 45 wonders. He says that nearly every story he’s heard of early retirement has included an element of luck. But can the average person retire early? Tim ran the numbers and found that if you do everything right, yes it’s possible. But you have to avoid consumer debt, buy a small house, and keep away from lifestyle inflation. Great piece!

Ron at The Wisdom Journal has a thought-provoking piece about goals. He notes that 80% of accidents on Mt. Everest happen on the way down, and wonders if this isn’t a metaphor for how we handle financial goals. We spend so much time planning how to reach our financial destinations that sometimes we forget to think about what happens after. Interesting stuff.

At Sweating the Big Stuff, Daniel takes a look at compound interest and why it’s important to pay yourself first.

K from Family Balance Sheet shows how to create your own family balance sheet, which will let you manage your household like a business. (Includes a sample Google Docs spreadsheet you can use!)

PT Money has a run-down of joint savings accounts. What are they? Why should you care?

Modern Gal (a great blog I’ve never seen before) has some short-and-sweet financial advice for thirty-somethings. These are basic but important tips.

Big Cajun Man from Canadian Personal Finance (there are cajun Canadians?) wonders, “Do you have a financial GPS?” He thinks it would be great if there were some automated way to know when you’ve made a wrong turn with your money.

Real Estate
Though it’s basic stuff, I really liked Austin’s article about Renting 101: What you should know before you sign at Foreigner’s Finances. This basic info is valuable for folks just starting out on their own. Maybe you have a brother or niece to forward this article to.

J. Money from Budgets are Sexy warns that owning a home is more expensive than you think, writing, “There are a ton of benefits that go along with this American Dream (tax write-offs, stability, equity, etc), but you’ve got to be aware of the financial drains as well.”

Thinking of buying a home buy confused by the terminology? Elle at Couple Money has a post that explains how amortization and mortgages work. It’s a pretty math-y article, but will probably prove useful to those folks looking to buy in the near future.

Rob at Free Family Finance has an 8-minute video about the differences between 15- and 30-year mortgages. TL;DW.

Taxes
Free From Broke has a quick run-down of qualifying for and claiming the first-time homebuyers tax credit. I’ve had some people ask me about this, and frankly I don’t know much about it. You folks should head over to check this out.

Matt from Debt-Free Adventure explains how he prepares his taxes online and offers tax help and tips for first-time online software users. (Apparently he’s a big fan of TurboTax Online.)

Miscellaneous
Mighty Bargain Hunter has a great reminder about identity theft and financial security: Sometimes your bank will call you for a legitimate reason; if they do, call them back. He explains the process using his own situation as an example.

At Eliminate the Muda, LeanLifeCoach takes a look at money and time, and how we waste them. I’ve said it before, and I’ll say it again: One of the keys to my financial turnaround was that I stopped wasting time. It’s amazing what you can accomplish when you actually do things!

The Weakonomist goes on a rant against bundling, the practice of making you pay extra for crap you don’t want by packaging a bunch of stuff together. I think he’s got a valid point, though his Microsoft example seems to go against his argument. (Or am I missing something?)

Kyle from Suburban Dollar shared a 4-minute video review of Gary Vaynerchuk’s book Crush It! I’m not a fan of video posts (see my whine about Free Family Finance above) because they force the blog “reader” to sit there passively and prevent them from skipping spots. But Kyle does a good job here of staying succinct, and his review of the book pretty much matches my own. (Including the complaint that there isn’t really any actionable advice in the book.)

The blogger from Don’t Quit Your Day Job takes a look at why parents with children seem to volunteer more than others. (Answer: It may be because they volunteer to help with their children’s activities.)

Jason from Live Real, Now has a cute piece about what Dungeons and Dragons taught him about finance. In a similar vein, B Simple from Simple Financial Lifestyle shares the keys to winning your own personal financial Super Bowl. Gimmicky, but fun.

Helen at Science and Money (another blog I’ve never seen before) has a review of Saving Money by Mary Firestone, a financial-literary book for children. Helen thinks it’s lame.

Final carnival stats: 72 submissions, 11 rejected (and another 7 nearly so), 61 accepted (10 of which were highlighted). Six hours to prepare: Five hours to compile and list links, and another hour to create theme and post the carnival. 3705 words. Photo by Sophiea.

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Related Articles at Get Rich Slowly:

• Carnival of Debt Reduction #43
• links for 2006-09-12
• Carnival of Personal Finance - Call for Submissions
• Carnival of Personal Finance
• Daily Links: Debt Reduction, Stupidity, and Mutual Funds

 

Courtesy PandaLabs
 

Turning hijacked computers into cash is still hard work for most computer criminals.  They've got to trick the infected PC into sending spam, then trick a recipient into buying a useless product — or they have to steal online banking passwords, log onto a victim’s account, bypass the bank’s money transfer fraud controls, and so on.

It's much easier to just demand cash directly from infected users — a crime that's the Internet's equivalent of kidnapping. 

"Give me all your money or your computer gets it-" is the basic proposition. 

The technique was dubbed "ransomware" many years ago by computer virus researchers, and is not new.  What is new is the explosion of ransomware, thanks to the evolution of ever-more-believable tactics during recent months.

In December, the FBI issued a warning about a broader category of malicious programs called "rogueware.” These programs appear on users' machines and claim to find viruses, then offer to clean them for $50.  Rogueware looks so realistic — complete with Windows-like dialog boxes and scary warnings — that Web users were tricked into sending $150 million to criminals last year, the FBI says.

The new ransomware is similar, but far more aggressive.  Once a computer is infected with it, the program does more than recommend a software purchase –it simply won't let users continue to use their PC until they pay up.

Luis Corrons Granel, a researcher at Panda Security, said use of ransomware by criminals is exploding — 25 percent of all rogueware in the past quarter involved a family of intimidating products named "TotalAntivirus.” It demands that users pay $50 for two years, $79 for a lifetime license.

“The increase (in ransomware) has been really significant,” Granel said. A single family of ransomware programs called “Total Security” made up one-quarter of all rogueware programs detected during the past three months, he said.

To an average user, most rogueware would be indistinguishable from other standard antivirus products.  They look like fully functional software, showing Windows-like screens for firewall settings, file scanning, and every other tab you'd expect from standard antivirus products. “Total Security” even lets users choose their language — English, Spanish, and German are offered.

The switch to ransomware by the bad guys makes sense, says Peter Cassidy, spokesman for the Anti-Phishing Working Group — because computer criminals are refining their programming methods, and getting more aggressive about taking people's money.

See ransomware in action with this video from PandaLabs.

"Instead of trying to fool people and getting one out of 1,000 to pay, what they're doing now is just locking up the PC and telling them they have to pay," he said.  "It's a really violent approach, really nasty."

There might be one silver lining to the rise of ransomware, Cassidy said. 

"It's not in that gray area of selling people useless crap," he said.  “It’s clearly criminal, and extortion does get the attention of law enforcement officials.”

As is customary, computer criminals are fusing this new attack with successful, older methods, said John Harrison, a security researcher at Symantec Corp. In one recent example, criminals first engaged in search engine "poisoning," so their booby-trapped Web sites would rate high in Google searches about Haiti’s earthquake. Visitors who clicked were tricked into downloading the ransomware software; and then were confronted with extortion demands.

"That's their distribution model," Harrison said -. "They used to do it subtly, but now they are doing it much more brazenly."

 

Screen capture provided by PandaLabs.

In some versions, users will see a message that says, "Google recommends you install this," or "Microsoft recommends you turn this feature on- … then, they take over your computer and all of a sudden it looks like you have 900 viruses," he said. 

The latest flavor of ransomware, described on Jan. 8 by security firm F-Secure, doesn't disable all software, but it does something just as debilitating — it encrypts all the files on a victim's computer, and forces them to pay for decryption.  The program, which calls itself Data Doctor 2010, costs $89.

RED TAPE WRESTLING TIPS
In some cases, researchers say, paying the ransom does work, at least initially. Still, it's a terrible idea to pay. On a grand scale, you've just subsidized a criminal. But there are far more practical concerns — why would you trust the author of ransomware with your credit card number?  Perhaps you think you'd never do this, but remember, the FBI says rogueware writers have made $150 million, so someone is paying up.

If an unexpected antivirus dialog box lands on your computer screen, close the window immediately by clicking on the 'x' in the upper-right hand corner.  Don't use the "OK/Cancel" buttons in the window — criminals often reprogram these.

You may or may not be infected anyway — it's possible you are already the victim of a "drive-by download" that doesn't require user interaction. So run an antivirus scan, if you can.

If the rogue software has actually taken over your computer, physically disconnect it from the Internet to avoid having your personal information sent back to the criminal. Then go to a different computer to search for solutions. Type in the name of the rogue software and search for information on well-known antivirus Web sites. Many antivirus firms offer free cleaners you can download or place onto a USB memory stick, and run on your infected computer.

But maintain healthy suspicion at all times. Ransomware authors have gone so far as to create fake software reviews about their products and place them around the Internet, even stealing logos from reputable technology publications, says Harrison.

"The idea is you search for information about the program and this turns up, and you figure it's ok so you install it," he said.  "Some of this is soft sell, some is very hard sell."
As always, it’s never a good idea to follow links in e-mails when heading to Web sites – it takes an extra moment, but always click into your browser’s address bar and manually type the address.

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This is a guest post from MD of Studenomics — the perfect place for those who are looking to destroy their credit card debt, who want to have more money now and wish to enjoy life a little bit. Come on over to check out my new design! If not then at least consider subscribing to my feed.

Work From Home Jobs: How To Find Legitimate Opportunities

With all of the get rich quick schemes and work from home scams that plague the Internet, many young people are wondering this: are there any legitimate work from home jobs out there?

Of course there are.

The problem is that many amazing opportunities are buried below scams and penny earning jobs. If you search hard for these jobs and are willing and comfortable to work from home, then here are some possible options for finding a real work-from-home position:

Within Your Own Company

Don’t look now, but you can potentially find an opportunity like this from within your own company. So how is this possible? Well, it’s 2010. Does every single person have to commute to the office every single day? Nope. As long as you can prove that you’re productive from home and that your quality of work won’t deteriorate because you’re away from the office, then telecommuting from home could certainly work out.

How is this entrepreneurial? Because most of the other people within your company will want the comfort and discipline of being confined to working at their desks. You, on the other hand, know that you can work from anywhere, as long as there’s an internet connection and a cup of coffee available. There’s nothing wrong with being the entrepreneur within your company.

Freelancing

Write some articles. Create some website designs. Draw some logos. Give some lessons. Sell some products. Maybe start an online business. Do whatever it is that you’re good at. I can’t give you all of the answers, nor can anyone else. You know yourself the best. You know where you excel, more so than anyone else out there does. So use it to your advantage.

My friend is an amazing guitar player. He’s studying guitar in college, he plays in a band, and spends all of his spare time practicing. The unfortunate thing is that guitars are not cheap and neither is studio rent. So he decided to go into freelancing; he put up a bunch of posters and got the word out that he was available for gigs. Now he makes money playing the guitar in ways that he thought were originally lame. He plays at weddings and teaches others to play guitar. He’s not going to get rich any time soon but he has enough money to support his hobby and have some left over to do as he pleases.

Blogging (apparently!)

Setting up a blog is idiot proof (I did it!). The challenging part is making some decent money off a blog. Anyone can tell their buddies to click a bunch of Google ads for pennies a day, but that’ll get you banned by Google in no time.

But once you do start making money from blogging (the legitimate way), not only can you work from home but you can work from anywhere in the world.

How do you make money blogging? I’m nowhere close to there yet but the plan is to use Adsense, to join affiliate programs, and yes — to eventually sell my own products.

The next time you see a flyer or an internet site or ad promoting the fact that you could make a ton of money from home, give pause and think twice. Research that opportunity very well. Check for web and offline chatter about these endeavors (in fact, watch out for those proprietors, sites and companies that don’t have any footprint on the web or anywhere else) and find out what you can about the opportunity. Any promises of easy money should be met with suspicion. Be wary of big promises as many of these leads are merely scams that are set up to separate you from your money. So please watch out!

Work From Home Jobs: How To Find Legitimate Opportunities

I am a Starbucks addict. I will openly admit it. Starbucks is an indulgence for me, on days when I am having difficulties at work, a relationship crisis, or when I just feel like procrastinating. If you are like me, and you are attempting to stick to a budget every month and trying to be diligent about paying down your debt, then Starbucks does not fit into that equation very well. Especially, when your habit turns into a twice a week or every other day experience!

So, I decided there had to be a way for me to enjoy a gratifying, extra sugary coffee treat without paying $4.65 for it. I always get the Grande and pretty much have the prices memorized. The medium cup sizes work well if you’re under stress. The Venti is for those days when you feel like you are going to have a nervous breakdown, and the Tall is for those days when you fall for the temptation of the impulse buy: when your subconscious mind makes you head for a Starbucks in the middle of a busy day. In my efforts to curb my $15 a week habit (let’s be honest here) as my money management software encourages me to do, I’ve decided to search the web for coffee recipes. I am not a barista and have never played one on TV, but I can sure come close: how? Well let me tell you that Google is a wonderful thing!

So how can you have your cake and eat it too? You don’t have to spend money on that $4 latte if you’re fine with the DIY approach. I realized that I wanted to save money but still continue to enjoy my Starbucks fix. So here’s what I did.

Try Gourmet Coffee Recipes: Make Your Own Starbucks Coffee Drink!

I did a search on Google.com and typed in my favorite Starbucks coffee drink, Cinnamon Dolce Latte. To my delight, I found recipe after recipe of my favorite drink. There are even baristas that work for Starbucks that are posting recipes. I found one that I liked (from bfeedme):

Make a Cinnamon Dolce Latte!
Ingredients:

• 1/2 cup strong coffee
• 1/4 teaspoon ground cinnamon
• 1 1/2 teaspoons sugar
• 1 1/3 cups 1% low-fat milk

What’s Next:

1. In a large pan, mix the cinnamon and sugar with a bit of milk.
2. Add the rest of the milk and bring to a boil.
3. Just as the mixture comes to a boil, take it off the heat.
4. Pour your coffee into your favorite mug.
5. Pour in the milk and serve immediately.

Earnestly, I ran to my kitchen and began heating milk on the stove and brewing an EXTRA strong, half cup of coffee. After the milk heated, I added in the cinnamon and sugar amounts that were suggested on my recipe. Then, I mixed the milk with the half cup of brewed coffee. Wow! It tastes just like Starbucks minus the cute cup and the smiling barista that hands it to me.

So, why am I paying $4.65 for a cup of this, when I can make 20 cups or more for $10? I don’t know! However, since I have made this discovery, I can tell you that when my subconscious mind prompts me to go to Starbucks, I stop myself. I look at my food budget envelope (working on a cash system here using an envelope budgeting system), and say, I think I can make this here today. I brew my cup of coffee and enjoy it just as I would at Starbucks.

The point I am making is that often, in order to get out of debt, we have to find ways to appease our impulses and control the desire to get instant gratification. We need to prioritize our finances and maintain control of our money. In many ways, this can be achieved by doing the simple things ourselves rather than seeking the convenience of buying those things we want elsewhere, for a premium price. Remember that service has a cost! I have determined that if I do my own gourmet coffee drinks, I will save $4.65 a pop and I can potentially save $725 in the coming year — quite a good amount to add to my high interest savings account.

Do you have a habit that costs money and that isn’t something you need but rather, something you want — which is triggered by an impulse? Why not try to find a suitable substitute that costs substantially less? I encourage you to evaluate where you are spending your money. Weigh the rewards and the consequences of your spending. Is this cup of coffee worth staying in debt for a while longer? No, certainly not for me, and I would think your answer would be the same. Now, I did not completely cut out my Starbucks visits. I still like to meet friends there for a cup of coffee. However, my new strategy now allows me to save a substantial amount of money (over time) and to maintain the pleasure of the experience as well.

 
Contributing Writer: Selena

Gourmet Coffee Recipes: Make Your Own Starbucks Coffee Drink

Are you as sick as I am of blogs, ebooks and gurus all promising to teach you how to “make money online”? In many cases, they’re people flogging a product that they swear any idiot could use to make a fortune … overnight … on the beach … in just two hours a day…

Let’s get real about this. Making money online, just like making money offline, takes real work. However much you might wish you could just press a button and get a steady income stream going, that’s not how it works. Scams, pyramid schemes, dodgy traders and fly-by-night sites abound: none of these are going to get you closer to paying off your debts or quitting your day job.

However, it is perfectly possible for you to make money online. I’m going to outline five straightforward, no-nonsense, spam-and-scam-free ways to do so. I’ve had experience – i.e. dollars coming in – with each of these areas, and I’ll share some of my best tips.

(Hint: I’m also linking to some useful sources, so you may want to bookmark this post for handy referral.)

In almost all cases, you’ll want to get set up with PayPal so that you can get paid.

1. Freelancing
   First up, freelancing. This is how I got started with my business, Aliventures. Freelancing means selling a particular service, getting paid by clients either by the hour or by the project.

   You can do all sorts of things as a freelancer, but some of the most common freelancing areas online are:

   • Writing: including copywriting, blogging, newsletters, ebooks, articles
   • Designing: including illustration, graphic design, logo design
   • Programming: including web coding, custom software
   • Administration: including accounts, personal assistants

   To get started with freelancing, pick a particular skill that you have, and put together an online portfolio showcasing your work. Tell your family, friends, and Twitter followers that you’re looking for clients.

   Freelancing is becoming much more common as people look for flexible patterns of working (and multiple clients to provide job security) – so there’s a lot of advice, support and help around, often including grants and loans when you’re getting started. Your local Chamber of Commerce – or a similar organization – may be a good source of advice.

   Insider Tips:

   • Specialize. It might seem counter-intuitive, but it’s better to concentrate on one area than try to cover all the bases. For example, writers might choose to specialize in copywriting (and ignore blogging, editing and so on).
   • Approach potential clients directly. Most of the freelance blogging jobs that I have weren’t from applying for advertised jobs – they came through making contact with editors. You wouldn’t be reading this blog post if I hadn’t sent Jay (DLM’s editor) a guest post ( and several hopeful emails) back in 2008!

   
   

   Resources:
   Freelance Switch and Freelance Folder are both blogs aimed at freelancers, and well worth subscribing to by RSS.

   Skellie’s post 30 Days to Become a Freelancer is a great step-by-step plan for new freelancers.

   On Dumb Little Man, there’s some freelance-related advice in:

   • An Entrepreneur’s Guide to Setting Service Rates
   • 8 Important Money Saving Tips for Web Workers
   • 10 Great Ways to Jump-Start Your Creativity




2. Selling electronic products
   Freelancers sell a service. Even when that service results in a product, like a logo, a website or an ebook, it’s custom-made at the request of a particular client. That works well for some people, but what if you want to make money without having to work by the hour or by the project?

   A tried-and-tested way of making money online is to sell electronic, usually downloadable, products. I’m sure you’ve come across a few sites selling ebooks – if you have a particular area of expertise, you can write an ebook (which doesn’t need to be anything like as long as a paper book), and you’ll find buyers. Time-sensitive information does particularly well in ebook format.

   There are also plenty of options if you’re not a writer. You can pay someone to write an ebook for you: then you can market and sell it. Alternatively, you can sell audio or video files, graphical content, software.

   Insider tips:

   • Start with something small, like a $5 or $10 product; the learning curve is usually steep.
   • Either build up an online audience of your own (via a blog or e-newsletter), or partner up with people who have a big audience – offer them commission as an affiliate for your product.

   Resources:

   • Create Ebooks That Sell – article on Copyblogger
   • The Comprehensive Paint-by-Numbers Guide to Writing and Publishing Your Ebook – article on ProBlogger that’s pretty much described by the title!

   Sites where you can sell (and indeed buy!) electronic products include:

   • e-junkie – mainly used for ebooks
   • iStockphoto and fotolia – for graphics and illustrations
   • Theme Forest – for website and blog themes
   • Envato Marketplaces – other sites from the makers of Theme Forest
3. Selling physical products
   If virtual products don’t interest you, how about selling physical ones? You may well have done this already if you’ve ever offloaded some second-hand books on Amazon.com, or if you’ve gotten rid of those wrong-size-wrong-color clothes on eBay.

   You don’t necessarily have to have a large amount of storage space to sell physical products, and you don’t need to spend hours standing in line at your local post office; you can use drop-shipping to outsource warehousing and shipping.

   Many small businesses are run entirely on ebay, often buying stock in job lots (at discount warehouses, for instance) and splitting it up for sale, thus turning a profit per item.

   Artists and crafters can sell handmade products on sites like etsy, where customers are often willing to pay a premium price for uniqueness and quality.

   If you have a site or concept which you could produce merchandise for (online comics often do well with this, and humor blogs), try CafePress.

   Insider tips:

   • Take the time to get a great photo of what you’re selling. Make the photo as large as possible too. (Many new ebay sellers make the mistake of not using good photos.)
   • Use testimonials, especially if you’re selling items which customers would normally want to examine and touch before buying – such as clothes or craft materials.
   • Stick with one site – at least to begin with – so that you can build up feedback from buyers: I found that selling on ebay and Amazon was much easier once I had a good rating.

   Resources:

   • Timothy Ferriss’s book The 4-Hour Workweek: Escape 9-5, Live Anywhere.
   • News article “Doc makes more money selling clothes on eBay” – which gives an encouraging indication of what’s possible, just working part-time!
   • Starting an eBay business – article from startupnation
4. Owning websites
   If you own a website, you’ve got a potentially money-making asset. You can run adverts on the site. A good place to start is Google Adsense. Once your site starts getting a reasonable level of traffic and/or a reasonable Google rank, you can sell advertising directly. (Warning: Google sometimes penalizes sites which sell text links.)

   For an example of Adsense and private ad sales in action, see my site www.theofficediet.com. You’ll notice that:

   • There is a 125×125 banner, as well as a number of links under the headings “Adverts”. These are private ad sales.
   • I’m also running Google Adsense

   I don’t make a living from this site by any means, but I do make several hundred dollars each month from advertising.

   Another method is simply to sell the site, which is often known as “flipping” it. If you have a site that makes regular income (such as through advertising or affiliate sales), then there’ll be interested buyers. A good rule of thumb is that you can sell a site for around 12-18 times the monthly income. You may be able to sell a site which has strong potential – perhaps a good domain name and some high-quality content – even if it isn’t yet generating income.

   You can sell sites – and even great domain names (which should cost under $10 to register) – on the SitePoint marketplace.

   Insider tips:

   • Once you have a large site that’s easily found on Google, advertisers will often come to you. Be prepared for this: decide what you charge for different types of ads, and have a simple means of accepting payment.
   • You may have to decide between advertising income and maintaining the quality of your website. I run text ads and Adsense on www.theofficediet.com because I’m not too attached to that site – I’m much pickier about the ads on my “home” site, www.aliventures.com!

   Resources:

   • My Adsense Tips on the Official Adsense Blog – videos from Darren Rowse (aka Problogger)
   • ProBlogger: Secrets for Blogging Your Way to a Six-Figure Income – by Darren Rowse and Chris Garrett has good information about advertising and about flipping blogs.
   • Find an Undervalued Asset. Fix It Up. Flip It. (Now It’s Web Sites, Not Houses) – article from the New York Times which is a good introduction to the area – and financial possibilities – of flipping websites.
5. Selling other people’s products
   Lastly, perhaps you don’t have anything of your own to sell – and you don’t want to create anything. How about selling other people’s products? This is a great way to let others do the hard work while you reap the rewards!

   Like the other four methods, though, this isn’t without work on your part. Affiliate marketing (acting as an affiliate for someone else’s product, and earning commission on sales which you refer) requires you to have two things:

   1. An audience
   2. Trust

   If you have a blog, e-newsletter or Twitter following, that’s your audience. Establishing trust takes time, though. Some good ways to do it include:

   • Provide high quality content (blog posts, emails or Tweets)
   • Be honest, personable and real – we trust people who we can see as friends
   • Don’t give an overblown review just for sales: mention any bad points about the product too
   • Own every product and use every service that you review as an affiliate

   Note that the FTC has brought out new guidelines, which many bloggers have interpreted to mean that affiliates do need to declare their connection. This is often to your advantage anyway, as it can show that you’re trustworthy and honest. (See Affiliates – New FTC Rules and $11,000 Fines for Non-Disclosure for more information.)

   When looking for products to promote, start with things you already own. You can promote anything sold on Amazon as an affiliate (though the commission isn’t great) and you’d be surprised how many sites and companies have affiliate programs. You can also review a post from Dumb Little Man that lists over 40 ways to make money online.

   Insider tips:

   • Think about what you like in a review – and provide that! I put the price up front in all my reviews, for instance, as I hate not knowing the price of a product till I’ve read a ton of text about it.
   • Give a personal story about your experience with the product or service. If you say in the review that your webhost has great customer service, give a concrete example.
   • Many ebook authors (and sellers of other downloadable products) will let you have a review copy if you have a reasonable-sized blog or newsletter, so you can sometimes get free products this way!

   Resources:

   • What Is Affiliate Marketing? and 10 Tips for Using Affiliate Programs On Your Blog – great introductions to this topic, on ProBlogger
   • How to Suck at Affiliate Marketing – what not to do, from IttyBiz
   • Cloud Living review – where I discuss Glen Allsopp’s comprehensive and beginner-friendly ebook about affiliate mini-sites and blogging.

Any one of the above methods could make you a full-time living online – or could provide you with a great source of side income. Which appeal to you? What skills or resources do you already have that you could leverage? And do you have any other methods to add to the list? Let us know your thoughts in the comments!

Wisdom on Value Investing by Gabriel Wisdom is based on Wisdom’s professional experience and his Fallen Angels investment strategy, a way to identify good companies that have been punished by the stock market.

Value investing is an investment strategy made popular by Benjamin Graham and brought to the forefront with the successes of Warren Buffett. The idea is that you want to buy a great company at a great price, when it’s been discounted by an emotional stock market.

The book does more than give you a framework for analyzing companies and discusses the important tenets of value investing. Wisdom writes about the ten traits of the world’s most successful value investors, how to tell the difference between a falling vs. a fallen company, establishing your exit strategy and and a clever point called time arbitrage (which he says he learned from Joel Greenblatt’s The Little Book That Beats the Market).

But all those ideas, while valuable, aren’t specifically called out on the cover. I want to know how I can idenfity Fallen Angels and I find that in chapter 10. Wisdom does a detailed job walking you through two stock screens – one that looks for business quality and the other on buying at the right price. For business quality, the screen looks at:

• Revenue growth: Compound annual growth rate of 10% or more for the last five years.
• Earnings growth: 10% compound annual growth rate, erratic earnings and revenues companies should be discarded.
• Return on equity: At least 15% ROE for the last five years.
• EBITDA margin: EBITDA stands for earnings before interest, taxes, depreciation or amortization and for this you want an EBITDA that exceeds that company’s industry peers.
• Debt-to-equity ratio: 40% or less.

Notice that none of those metrics, which are common value investing metrics, talk about the price of the stock itself. From there you’ll want to analyze them for earnings yield, prices to sales ratio, PEG ratio, and a few other metrics.

The book is far more than the chapter on Fallen Angels (which is a lot more than the two screens I just mentioned!) and overall, I liked this book because it presented value investing in a way that wasn’t intimidating. It touched on a lot of investing topics, such as portfolio management and categorizing Fallen Angels, and subjects I haven’t even mentioned and does so in a very casual and conversational way.

If you think this book might be for you, you can get a preview on Google Books. You don’t get every page in the book but you can get a sense of the writing style and some of the content so you can decide whether it’s right for you.

Wisdom on Value Investing by Gabriel Wisdom from personal finance blog Bargaineering.com.

Gregory Fayer opened an e-mail on Monday night that looked like it was from a fellow lawyer at Gipson Hoffman & Pancione. Instead, it was a message that placed Fayer and his firm in the middle of what might be the biggest international cyber-conflict to date.

This week, seach engine giant Google disclosed that it had also been a victim of cyber-attacks from China, and has taken the bold step of threatening to shut down the Chinese version of its search engine.  On Thursday, computer security firm VeriSign said it had traced the Google attacks back to "to a single foreign entity consisting either of agents of the Chinese state or proxies thereof," and that 30 companies were targeted.

Fayer's law firm is likely one of those victims, as the technique used against it is similar to the Google attack.  The e-mail Fayer received was laced with a computer virus intended to allow the sender to spy on Fayer's computer; a blatant act of espionage, he said.  But Fayer wasn't terribly surprised. Last week, his firm filed a blockbuster lawsuit against the Chinese government on behalf of CyberSittter LLC, which makes parental control software.  CyberSitter says the Chinese stole its computer code while creating the infamous Green Dam censorship program, which was designed to be placed on every Chinese citizen's PC last year. After a backlash, the government decided to make installation optional.

"Our law firm was certainly on high alert because of the lawsuit," he said.  "This is somewhat to be expected when you file a high-profile lawsuit against the government of China.”

Fayer said he couldn't share much information about the e-mail, as FBI officials are investigating the incident. But it was designed to look like part of a normal electronic chat with a colleague. 

"I was the first recipient at the firm," he said. "But there have actually been three waves of these customized e-mails.They'd each been made to look like they had a different sender, and a different pretense for the links or attachments embedded in the e-mails." The cybercriminal was clearly moving down a list of potential contacts at the firm, looking for someone to take the bait, he said.

"The program was designed to go in and get information from our servers and computers and sent it back to the sender," he said.

Computer researchers call the technique "spear phishing."  Rather than flooding a firm with thousands of spam-like phishing e-mails hoping to dupe dozens of victims, the new technique involves very specific, targeted notes designed to fool one victim at a time – and then use that computer to spy on the target agency or steal data.

While Fayer could say little about the potential agent behind the attack, he said the firm assumed that "the timing of the e-mail attacks are not a coincidence."

No lawyers fell for the trick, Fayer said, and he did not believe any information had been stolen.

The alleged attacks from China are troubling on many fronts.  On Thursday, security firm McAfee released a report saying the program used to target U.S. firms involved a so-called "zero day" vulnerability — one that was to this point unknown to the security community, and thus indefensible by anti-virus software. The flaw involved Microsoft's Internet Explorer, McAfee said, and the firm has now made a software patch available to protect against it.

But the malicious software attacks other software flaws too, McAfee said, adding this ominous note: "There very well may be other attack vectors that are not known to us at this time."

"These highly customized attacks known as advanced persistent threats were primarily seen by governments and the mere mention of them strikes fear in any cyberwarrior,” wrote McAfee's George Kurtz in a blog post today.  “They are in fact the equivalent of the modern drone on the battle field. With pinpoint accuracy they deliver their deadly payload and once discovered - it is too late…All I can say is wow. The world has changed. Everyone's threat model now needs to be adapted to the new reality of these advanced persistent threats. In addition to worrying about Eastern European cybercriminals trying to siphon off credit card databases, you have to focus on protecting all of your core intellectual property."

Mark Rasch, former head of the Department of Justice computer crime unit, called the attacks “cyberwarfare,” and said it was clearly an escalation of digital conflict between China and the U.S.

“At least it’s an escalation of the rhetoric, and that’s an escalation,” he said. “War is the extension of politics by other means, and the Internet is the extension of politics, and this is a form of cyberwarfare.”

While isolated examples of government-sponsored hacking have popped up through the years, Rasch – who now runs Bethesda, Md.-based security consulting firm FTI - says this week’s incidents of alleged Chinese attacks are “new in the sense that they’ve been so  blatant,” and apparently so widespread, ranging from attempts to read dissidents’ e-mails to spying on a legal adversary.

“We’ve had attacks in the past but by and large they were done in a way that gave the country plausible deniability,” said Rasch. “But this was different. This was fairly clearly a government-run operation.”

China has yet to directly address the allegations. At a regular press briefing in Beijing on Thursday, Foreign Ministry spokeswoman Jiang Yu said only “The Chinese government administers the Internet according to law and we have explicit stipulations over what content can be spread on the Internet,” according to the Bloomberg news service.

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