Personal Finance Guide

Archive for July, 2010

Question: Is there anyone who thinks that Barclays Personal Reserve is actually a good thing?

I received a letter from Barclays a few months back saying that from the 18th of this month I would have £250 personal reserve.

Many people feel this is a bad thing that Barclays has introduced this, does anyone think its a good thing?

http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?site=pfs&task=homefreegroup&value=14790&target=_self

http://www.easier.com/view/Finance/Banking/Current_Accounts/article-196830.html

Answer: I do, it’ll help you out a great deal otherwise if you’re overdrawn you could get charged at least £40 a day.

Investing for Dummies/Personal Finance for Dummies: …

Question: Someone in London claims to have appointed me as beneficiary to US$5.6 million is this real or a scam?

Someone send me an email claiming that she has appointed me as beneficiary to her money that she had deposited in Global finance security company.She also said that she was suffering from an incurable sickness and wanted me to use her money to finance orphanage homes.I replied indicating my willingness to take up the offer.But to my surprise i received another email from a man who claimed to be her lawyer in London and that he was instructed to make me the beneficiary.This lawyer then said that i should either travel to Ghana or send a US$1500 value air ticket for a diplomat to bring the consignment to me .He has send me beautiful certificates showing that am already the owner.
Now how true can this be?
Kanulu – Nairobi ,kenya

Answer: scam scam scam! They are phishing.

Grameen Shakti, Bangladesh, Micro-finance solar home systems – Ashden Award winner

With most mutual funds managers underperforming the stock market benchmark such as the S&P 500, added to the fact that most of them carry mutual funds expenses, it is easy to see why investing in Index Funds is attractive.

Index Funds hold all or a representative sample of the stocks or bonds in a particular market benchmark. The expenses of Index Funds are also very very low, especially when compared to mutual funds. An index fund aims to match the performance of the market. It does not try to beat the performance of the market.

Considering that most mutual funds underperform the market in the long run, aiming for the average of the market return does not sound so bad. You would at least beat 60% -70% of all mutual funds out there most years and over the long run.

Tax advantage

Since Index Funds don’t trade as often as mutual funds do, you will incur less capital gains tax. This does not apply to you if you are investing in a tax-qualified accounts such as a traditional IRA. You will not incur any taxes on your gains until you sell your investments.

Which Index Funds to invest in?

There are index finds that specialize in all sorts of stocks and bonds. There are Index Funds for small cap stocks, mid cap stocks, large cap stocks, international stocks, long term bonds, technology only stocks, to name a few.

It is most important when investing in Index Funds to bear in mind that the lesser the fees of the Index Funds the closer the performance will be to the market. For example, check out the Vanguard Index 500 fund for expenses and read its prospectus.