Your Questions About Money Making Stocks For 2010

Laura asks…

I am 11 and want to make money?

I want to buy a amazon kindle but i have to come up with my own money. How?

John answers:

General Strategies on Saving Money and Earning More Money

Save as much money as you can! You’ll be surprised as to how quickly you can save a lot of money!

Here are a few suggestions:

Ways To Save Money & Ways To Earn More Money (Updated on 08/13/2010)

Don’t go out to eat. Example: don’t eat out at fancy, high-class restaurants. Instead, eat at a fast food restaurant or cook a healthy meal at home. It is much cheaper than the alternative.

If you are a teen or a young adult, you might want to hold a bake sale. You can have your other friends help you out, so that you can help attain your goal of saving and/or making more money.

If you have a habit of buying new clothes very often, then resist the urge to buy new clothes for a little while. You could potentially save a good amount of money.

Take personal finance courses online or at a high school or college/university.

If you are a teen or a young adult, you may want to have a dog-walking service.

To help you manage your money, try http://www.mint.com/

Talk to a customer service representative at a bank or other financial institution and learn more about financial instruments.

Don’t go out to watch new movies in theaters. Watch movies on your TV at home. Rent movies using Netflix.

If you are a teen, you may want to think about babysitting. You can babysit your neighbor’s children.

Don’t spend too much money when going out with friends. Have a budget in mind before you actually meet up with your friends.

If you are a teen, you could try to mow the lawn. Many of your neighbors probably want their lawns to be mowed at a fraction of the price that they pay others to do the same work.

Invest your money in a CD (certificate of deposit). You can hold your money in a CD for 6 months or even a year. It generally pays more interest than the interest you get from a traditional savings account from a bank.

If you are a teen, do chores around the house. Your parents will appreciate it and you might get some money for it.

If you like to invest your money in the stock market, then you may want to invest your money in a commodity, such as gold. The value/price of gold is expected to increase in the future.

If you are a teen, then make sure to save the money that you get from your allowance (if you get an allowance).

If you like to invest your money in the stock market, then you may want to invest your money in specific large-cap and medium-cap companies that you trust. Apple (Stock Symbol: AAPL) and Google (Stock Symbol: GOOG) are two such stocks where you can choose to invest your money.

Try to sell something of value that you are willing to part with. Sell your old stuff on websites where many people make purchases, such as ebay or craigslist. You could also sell your stuff through a garage sale or a yard sale.

Try to hold a donation drive where your family, close friends, neighbors, and other acquaintances will be able to help you out and donate a little bit of money. These people will include your parents, brothers, sisters, close friends, relatives, grandparents, neighbors, and other acquaintances.

If all else fails, borrow money from other people (parents, brothers, sisters, close friends, relatives, grandparents, neighbors, acquaintances, etc.) in order to get a short-term loan.

David asks…

Who creates money – the Fed or Treasury?

I’m not talking about “printing & coining money“, that’s obviously just a manufacturing process carried out by the Bureau of Printing & Engraving or whatever.

I’m talking about creating more money in the abstract. For example… the Fed buys Treasury bonds in a process called QE (“quantitative easing”, meaning basically expanding the money supply).

In other words, the Treasury borrows money from the Fed by selling bonds to the Fed. Treasury can then spend this money exactly as if it borrowed (sold bonds to) China or US citizens, or as if it had taxed US citizens.

But what does the Fed use to lend money to (buy bonds from) the Treasury?

Does the Fed order the Bureau of & Printing & Engraving to print up a ton of money so it can buy Treasury bonds?

OR WHAT?

And how is this different from the normal state of affairs i.e., before this whole quantitative easing business, which I believe in recent and unprecedented (please correct me if I’m wrong)? Normally, does the Treasury create new money? If so, on what basis?

John answers:

Spotty J is mostly right:

1. The Treasury does not create money. It does print currency and mint coins, but it gets paid for doing that by the Fed.

In theory a government can create money just by writing a check.
Http://en.wikipedia.org/wiki/Chartalism
In the U.S. It is illegal for the Fed to honor a U.S. Government check when there is no money in the U.S. Government account at the Fed – the federal government is allowed no overdrafts.

2. The Fed creates money out of thin air. When it buys a bond from a primary dealer, it just adds the price of the bond to the dealer’s (seller’s) account at the Fed. When it sells a bond, it just deducts the price from the buyer’s account. There are no balancing monetary transactions. The money is really created and destroyed.

This has nothing to do with reserves. Primary dealers are not U.S. Commercial banks.
Http://www.newyorkfed.org/markets/pridealers_current.html

(There are balancing entries in the asset ledger: buying a bond means the Fed has an additional asset in exchange for the money it created. Similarly when it sells a bond. But the money as money is created and destroyed.)

3. Most of the time, the Fed works with short term debt. The difference with QE is the deliberate inclusion of “riskier” assets. So far, they have been longer term treasury bills. In the past, the Fed used to buy government agency debt. Economists have suggested the Fed buy even riskier debt for QE in the future.
Http://blogs.ft.com/economistsforum/2010/08/we-need-more-qe-to-prevent-another-great-depression-round-2/
Also, most of the time the Fed is focussed on inflation and :”fine tuning” the economy. Creating money is just a side effect (too much money and inflation goes too high; not enough money and inflation goes too low.)
http://pages.stern.nyu.edu/~nroubini/NYT/krugeconairu.htm
of its attempt to control the overall level of interest rates.

With QE it is trying to do something else – short term interest rates are already very low. It is trying to get people invest in stocks and make other investments by make long term interest rates so low as to make bonds be unattractive for investors.
Http://www.dollarsandsense.org/archives/2011/0111reuss1.html

4. Most of the money in the economy is created by banks making loans.
Http://wfhummel.cnchost.com/moneybasics.html
The money the Fed creates directly is MB (monetary base). Until the recession, the total amount of monetary base was under $900 billion.
Http://research.stlouisfed.org/fred2/series/BASE/
Back then, M1 was about $1,400 billion
http://research.stlouisfed.org/fred2/series/M1
and M2 was about $7,000 billion
http://research.stlouisfed.org/fred2/series/M2/

BTW, in addition to real banks, loans are made by other entities. These loans also create money:
http://en.wikipedia.org/wiki/Shadow_banking_system

5. The Fed does not buy bonds directly from the Treasury. It only buys bonds from “primary dealers” in the private sector – bonds that they have bought from the Treasury or from other traders.

George asks…

kind of dumb/ but how can i make a 100,000 dollars by november 5 2010?

John answers:

Depends on how much money you have now.
You can use that for stocks..
Invest money in a really fast-earning business..like buying a house, fixing it up, and selling it for a 100k more than the cost of the house and the fixing costs
or the lottery
gamble 24/7 and be super lucky

Robert asks…

What can i do to make money?

I’m 17 and a senior in highschool. my mom doesnt want me to get a job yet, but i’m in DESPERATE need of money. so does anybody know any good ways?

John answers:

General Strategies and Techniques on Saving Money and Earning More Money

Save as much money as you can! You’ll be surprised as to how quickly you can save a lot of money!

Here are a few suggestions:

Ways To Save Money & Ways To Earn More Money (Updated on 08/14/2010)

Don’t go out to eat. Example: don’t eat out at fancy, high-class restaurants. Instead, eat at a fast food restaurant or cook a healthy meal at home. It is much cheaper than the alternative.

If you are a teen or a young adult, you might want to hold a bake sale. You can have your other friends help you out, so that you can help attain your goal of saving and/or making more money.

If you have a habit of buying new clothes very often, then resist the urge to buy new clothes for a little while. You could potentially save a good amount of money.

Take personal finance courses online or at a high school or college/university.

If you are a teen or a young adult, you may want to have a dog-walking service.

To help you manage your money, try http://www.mint.com/

Talk to a customer service representative at a bank or other financial institution and learn more about financial instruments.

Don’t go out to watch new movies in theaters. Watch movies on your TV at home. Rent movies using Netflix.

If you are a teen, you may want to think about babysitting. You can babysit your neighbor’s children.

Don’t spend too much money when going out with friends. Have a budget in mind before you actually meet up with your friends.

If you are a teen, you could try to mow the lawn. Many of your neighbors probably want their lawns to be mowed at a fraction of the price that they pay others to do the same work.

Invest your money in a CD (certificate of deposit). You can hold your money in a CD for 6 months or even a year. It generally pays more interest than the interest you get from a traditional savings account from a bank.

If you are a teen, do chores around the house. Your parents will appreciate it and you might get some money for it.

If you like to invest your money in the stock market, then you may want to invest your money in a commodity, such as gold. The value/price of gold is expected to increase in the future.

If you are a teen, then make sure to save the money that you get from your allowance (if you get an allowance).

If you like to invest your money in the stock market, then you may want to invest your money in specific large-cap and medium-cap companies that you trust. Apple (Stock Symbol: AAPL) and Google (Stock Symbol: GOOG) are two such stocks where you can choose to invest your money.

Try to sell something of value that you are willing to part with. Sell your old stuff on websites where many people make purchases, such as ebay or craigslist. You could also sell your stuff through a garage sale or a yard sale.

Try to hold a donation drive where your family, close friends, neighbors, and other acquaintances will be able to help you out and donate a little bit of money. These people will include your parents, brothers, sisters, close friends, relatives, grandparents, neighbors, and other acquaintances.

If all else fails, borrow money from other people (parents, brothers, sisters, close friends, relatives, grandparents, neighbors, acquaintances, etc.) in order to get a short-term loan.

Lisa asks…

i need ideas of how to make money?

i live in a small town of about 2000 people and it’s realllly difficult to get a job. i’ve literally applied everywhere and haven’t gotten a job anywhere. i just need some different ideas of how to get money. if i can’t get hired anywhere is there any other ideas?

John answers:

General Strategies and Techniques on Saving Money and Earning More Money

(Updated on 08/29/2010)

Don’t go out to eat. Example: don’t eat out at fancy, high-class restaurants. Instead, eat at a fast food restaurant or cook a healthy meal at home. It is much cheaper than spending a lot of money at an expensive restaurant.

If you are a teen or a young adult, you might want to hold a bake sale. Post fliers around your neighborhood, school, and community center to advertise your bake sale. You can have your other friends help you out, so that you can help attain your goal of saving and/or making more money. Keep your bake sale open for at least four hours, spanning a substantial portion of the morning or the afternoon. You can also decide to host the bake sale for multiple days. Example: Bake Sale Weekend: Friday, Saturday, and Sunday from 2:00 PM – 6:00 PM.

If you have a habit of buying new clothes very often, then resist the urge to buy new clothes for a little while. You could potentially save a good amount of money. If you are used to buying

If you are a teen or a young adult, you may want to have a dog-walking service.

To help you manage your money, try http://www.mint.com/

Talk to a customer service representative at a bank or other financial institution and learn more about financial instruments. These financial instruments (which include certificates of deposit) will help you understand how to grow your money.

Don’t go out to watch new movies in theaters. Watch movies on your TV at home. Popular channels where you can see movies on the weekends include TNT, USA, and TBS. If you like to rent movies, try using Netflix.

If you are a teen, you may want to think about babysitting. You can babysit your neighbor’s children.

Don’t spend too much money when going out with friends. Have a budget in mind before you actually meet up with your friends. Example: Do not spend more than $25.00 when going out on a Saturday night.

If you are a teen, you could try to mow the lawn. Many of your neighbors probably want their lawns to be mowed at a fraction of the price that they pay others to do the same work.

Invest your money in a CD (certificate of deposit). You can hold your money in a CD for 3 months, 6 months, a year, three years, or even five years. Generally speaking, the longer you decide to invest your money in the CD, the more interest you will earn. Also, it is generally the case that the larger the amount of money you decide to hold in the CD, the larger the more interest you will earn. It generally pays more interest than the interest you get from holding money in a traditional savings account at the bank.

If you like to invest your money in the stock market, then you may want to invest your money in specific large-cap and medium-cap companies that you trust. Apple (Stock Symbol: AAPL) and Google (Stock Symbol: GOOG) are two such stocks where you can choose to invest your money.

Other stocks in which you can invest your money include:

Bank of America Corp
Stock Symbol: BAC

Microsoft Corporation
Stock Symbol: MSFT

Yahoo! Inc
Stock Symbol: YHOO

Wal-Mart Stores Inc.
Stock Symbol: WMT

Abercrombie & Fitch Co
Stock Symbol: ANF

Home Depot Inc
Stock Symbol: HD

GameStop Corp
Stock Symbol: GME

Ford Motor Co
Stock Symbol: F

AT&T Inc
Stock Symbol: ATT

Coca Cola Co
Stock Symbol: KO

Try to sell something of value that you are willing to part with. Sell your old stuff on websites where many people make purchases, such as ebay or craigslist. You could also sell your stuff through a garage sale or a yard sale.

Try to hold a donation drive where your family, close friends, neighbors, and other acquaintances will be able to help you out and donate a little bit of money. These people will include your parents, brothers, sisters, close friends, relatives, grandparents, neighbors, and other acquaintances. Have a box or jar in place so that people can deposit money into it. Stick a label on the box or jar with an updated amount in comparison to the target goal amount, so that more people will feel like contributing to your goal amount. Example: You may find a graphic representation of a thermometer representing how much money is left to reach your goal (the box/jar has $55.50 out of the target goal amount of $200.00, which translates to a little more than 25% complete; therefore, the thermometer would be about 25% filled up.).

If all else fails, borrow money from other people (parents, brothers, sisters, close friends, relatives, grandparents, neighbors, acquaintances, etc.) in order to get a short-term loan. Set a goal: it can be $5.00 from each person or $10.00 from each person or $25.00 from each person. Breaking up the goal into smaller, more manageable goals is easier than taking on the entire goal, which may seem like an impossible task (example: raise $5,000.00 in 3 days).

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