Posted under Finance
VMware is about to go IPO. So if you have extra money money laying around, then it might be wise to buy some of its stocks.
I think they will be offering it around $24/share.
VMware is currently making 41 millions dollars profit per quarter, so it’s doing extremely good. Meaning that its stocks will appreciate a lot right after the IPO.
Posted under Finance
Today I closed about 8 credit cards that I have.
I had so many that I never used. So there was no reason to keep them.
Goodbye Chase, goodbye Citicard, goodbye Bank of America.
Next month I should be able to close the remaining credit cards that I have after paying them off completely.
Owing 20,000 dollars in credit card bill is not fun at all.
Posted under Finance
What is the smartest way to invest your money?
Pay off your credit cards!!!
Seriously, before you can even start thinking about investing your money elsewhere, pay off off your bills. Credit cards charge you over 15% in interest, this is a whole lot more than any investment will give you. Putting your money in a saving account will only return 5% a year. Putting it in a safe mutual funds will average you around 10%. Investing it stocks might even give you a negative return.
So the smartest investment that you can make is just to pay off your credit cards or any outstanding bill.
But there is an exception. Suppose if you have a student loan, but the interest is only at 3%, then you do NOT want to pay it off. In this case paying it off will be a big waste of money. Instead, put your extra money elsewhere like a saving account. You will actually be making money by delaying paying off your student loan. Since the saving account will give you back 5% which results in a 2% net gain after accounting the interest from the student loan.
So be wise, pay off high interest bills, but don’t pay off low interest loans.
Posted under Finance
Income tax sucks.
Best way to avoid it or minimize it is just to set up a dummy coporation.
With a corporation under your name, you can deduct all kind of expensives like car lease, cell phone bill, insurance bill, etc. And maybe even deduct your house mortgage. Effectively you will be reducing your taxable income next to nothing, therefore you will only have to pay very little income tax. For example, if your corporation made $100,000 in net profit, and you managed to creatively write off $80,000 in expensives, then in the end, you will only have to pay income tax on $20,000 instead of the original $100,000.
Setting up a corporation is dead simple. You might need to pay about $500/year in administration fee, but this is little compared to tax money it will help you save.
Posted under Finance
I was chatting with Ivy today who used to work at Ameriprise. Anyway she told me to start saving toward my retirement by opening a Roth IRA account.
She said, if I put in 4,000 dollars every year, then when I turn 42, I should be a millionaire.
Is this too good to be true? If I only invest 4,000 dollars for the next 20 years, then they will only add up to 80,000 dollars. I mean how can this 80,000 going to help me become a millionaire? I don’t have the answer to this. But according to Ivy, this is how it works. Maybe it’s possible after compounding earning on top of earning. Who knows. She told me that she got this number from a financial calculator that Ameriprise uses.
So there you have it. Start putting away 4,000 dollars into your Roth IRA account annually then you will be a millionaire in about 20 years.