Your Questions About Top 10 Money Making Stocks

Thomas asks…

Can i save money and take out student loans at the same time?

im wroking part time right now no money but will have 3K by years end. im starting community college in january. It will cost total 8K a year with all fees etc. I need to save up money to trade/invest in the stock market because thats my chosen career path .. i need 10 k just to get an interview at a firm in my industry. thing is when i transfer college will cost 40 – 50 K total im looking at ging to DePaul or other top 50 private unversity. when i transfer i will have a high GPA and use grant money or something to offset a little of the costs.. but ill be in debt to loans.. but i need to save money as well.. parents can t help me with the costs so il all alone.. so heres my numbers 80-100K total for school…. 10 – 20 K saved up in the bank by the time i graduate.. i can go lower on the loans if need be but cant on my personal capital… sooo what can i do? is there a way to make all this happen?

John answers:

As a dependent student, you’ll only be able to borrow $5,500/freshman year, $6,500/sophomore year, and $7,500/junior and senior years — that will not equal 80k – 100k. If your parents are willing to cosign, you might be eligible for some private loans; however, these are not recommended because of the variable interest rates. Choose a cheaper school to transfer to — go to a public state school and you’ll save 50k. You should only borrow what you’ll reasonably expect to earn your first year working… And it’s highly doubtful that you’ll be earning 100k that first year.

Think of it in terms of monthly repayments. If you borrow 27k in federal loans at 6.8% and 73k in private loans with an average interest rate of 9%… Your monthly repayment will be $1,235.45 every month for ten years. Now, add in the cost of rent, a car payment, car insurance, health insurance, groceries, entertainment, internet/cable, cell phone, medical costs, clothing, etc. – can you really afford to pay over $1200 to repay a student loan each month? If you default, future jobs could be at risk because your credit score will drastically be affected (and in the financial industry… That’s a big no-no).

Honestly, 8k/year for community college is over the average. The majority of community colleges cost around 3k/year. Are you attending a school in-state? You can protect your capital by keeping your personal expenses low over the next four years. If you can live at home with your parents… That will save you a ton of money (especially if they’ll cover the cost of utilities as well). Living at home will also save you in household expenses and grocery costs (although make sure you contribute to the household budget for these items or pick up chores in exchange). If you can go without a car that will save you money as well – ride a bike or use public transportation. If you have an expensive cell phone, consider a pre-paid phone for around $30/month (or less – depending on how much you use it). Bring your own lunches to school instead of eating out – this is another cost saver. Watch your entertainment budget by choosing lower cost activities with friends and only splurging once a month or so. Aim to save 50% of your take-home earnings if you really want to build your capital. Be aware that your income and savings will affect your eligibility for need-based aid (but it will not affect your ability for federal loans). Definitely look at transferring to an in-state public school instead of a private university – unless, the private school will offer you a ton of financial aid and bring down the tuition costs to that of a public, in-state school. Apply for all of the scholarships that you can to get “free” money for school. There are need-based scholarships and merit-based scholarships, so pick the category that fits your needs the best.

Realize that to get into the company of your dreams (or even any company), you’ll likely start at the bottom and you may only be making 30k/year. If so, then you will not be able to afford anywhere near 80k-100k in student loan debt.

Susan asks…

OK i’m really not satisfied with any of the answers I got, so ONCE AGAIN, can I afford these?

Ok. So, I’m really not into the answers i got from my last question. So, if any of you penny pinching cheapos are going to answer my question, I want you to start it off by openly admitting to everyone that you are a CHEAP SCAPE. Put it in caps before your answer.

So, here is my money. I have have 10,000 in my savings. (i forgot i have 2,000 in another account) I have like 300 in my checking, and 150 cash in my wallet.

I live on a school campus. I will need to pay my school bill of 5,000 soon, plus my credit card bill of 1,000 (books) My car might need a new O2 censor, and i have a 100 dollar fine to pay.

For income, I make about $85 bi weekly for my first job, and roughly $350 bi weekly for my other job. On top of that , for every 1 day that I work (2 or 3 days/week) I will probably make about $65 dollars under the table cash in bonuses. OH also, I have 280 waiting to be deposited into my checking account because I sold that many text books on

These are things that I want to buy:

1. headphones, probably for like 150 or so. I have a best buy coupon for 20 dollars off, so I want to get them from bestbuy.
Headphone Comments: for those penny pinchers who say “why would you spend that much on headphones, I got mine for 10 dollars and they are perfectly fine) or (you don’t need an iphone for your music, why don’t you just listen to music on youtube?) WELL. music on youtube is not as high quality as an MP3. Plus, your 10 dollar headphones don’t sound as good as the 150 dollar ones with the good magnets, 50 level bass, comfortable over the ear fit – etc. Once again, i’m not looking for “adequate that will do” type of things here, I like nice things. What’s the point of saving money when you can’t spend it on things that you want? Would i be happier with my money sitting in my account? no not really, i’d like my nice headphones thank you.

2. I want the crystalift microdermabrasion machine for $200. I already have an acnelamp which costed 250. It made my acne go away Sooooo well! i love the results. Now, i want something for the scarring. Microdermabrasion from the clinic is sooo expensive, Laser resurfacing is out of the question but this home microdermabrasion machine would be perfect if it works!!

3. I probably won’t even get this, but I have an american express card and every year they have this thing where they have deals for the card holders. They had a brand new 2009 BMW 328i for 17,000!!! Tomorrow, the deal is a 26′ Sharp LCD tv for $300. I’m going to try for it, so if i get it i’m totally going to be paying only 300 dollars for that 500 dollar tv!

SO, now for all the others who say that I need to stock money for emergencies…blabla Ok. I’m only 20, my parents still support me pretty much… my phone bill is paid for, my dad bought my car for me, I’m on their health insurance, etc. I’m not going to become unemployed because i’ve been with the company for so long and their even making money this year. I can’t think of any other emergencies.
Plus, i’m taking 18 credits and i’m a student living on campus. no students have “emergency” funds, let alone the amount of money that i have.
SO remember, i like nice things so don’t tell me I dont “need” something or I should buy something that costs less because that’s dumb. I pretty much think i can afford it ps..

John answers:

I hope you like working, because I can tell from your questions that you never deny yourself consumer goods in order to save enough money to retire on. Happy work life!

Laura asks…

When should I sell company stock within a 401k and what to do with it?

I have 25% of my 401k in company stock. I happen to work for Wells Fargo. I have heard that having more than 10% of company stock in your 401k is risky. Is it? Wells Fargo matches money that I put in so the amount in company stock will continue to grow if I don’t do anything. I am assuming I should move some money out of the company stock into something else but when and where should it go? Interest rates are going up so I am assuming bonds are not good right now. It just doesn’t make sense to me to sell when our stock price is good cause won’t I just be buying at the top of the market in other stocks? Help is appreciated with those who have experience!

John answers:

Employees of Enron thought the same thing when most of their 401(k) was in Enron. Look what happened to them. Also Worldcom, too. They lost it all. That is why you shouldn’t put such a large % in your company stock

Take some of your Wells Fargo into other funds in your 401(k). If you like how it is going. Do only certain amounts at a time over a period of time. But eventually have less than 10% in your 401(k) in a year or two.

Charles asks…

Was and is this the America you and your ancestors fought/fight for ?

August 30, 2005: 12:24 PM EDT
By Jeanne Sahadi, CNN/Money senior writer

NEW YORK (CNN/Money) – If sky-high executive pay at publicly traded companies gives you vertigo, you might want to read this sitting down.
In 2004, the ratio of average CEO pay to the average pay of a production (i.e., non-management) worker was 431-to-1, up from 301-to-1 in 2003, according to “Executive Excess,” an annual report released Tuesday by the liberal research groups United for a Fair Economy and the Institute for Policy Studies.

That’s not the highest ever. In 2001, the ratio of CEO-to-worker pay hit a peak of 525-to-1.

Still, it’s quite a leap year over year, and it ranks on the high end historically. In 1990, for instance, CEOs made about 107 times more than the average worker, while in 1982, the average CEO made only 42 times more.
The cumulative pay of the top 10 highest paid CEOs in the past 15 years totaled $11.7 billion.
And though the specific individuals in each of those annual top 10 lists changed year to year, many bosses did pretty well throughout the entire period. Citigroup’s Sandy Weill, for example, has made $1.1 billion since 1990.
“Pay” in this instance refers to total compensation – including salary, bonuses, restricted stock awards, payouts on long-term incentives and the value of options exercised during the year.
The report also compares the growth in average CEO pay – which was $11.8 million in 2004 – to the growth in the minimum wage. Had the minimum wage risen as fast as CEO compensation since 1990, the researchers calculated, it would now be $23.03 an hour instead of just $5.15. And the average production worker would be making $110,126 a year instead of $27,460
Most people will have read the recent reports of how Microsoft Chairman Bill Gates has had his personal net worth soar over 100 billion dollars and then drop down to 55 billion. He certainly knows how to make (and lose) money.

(Note: This article was written in 1998, Bill’s Fortunes have dropped a touch since then.)

Consider that he made this money in the 25 years or so since Microsoft was founded in 1975. If you presume that he has worked 14 hours a day on every business day of the year since then, that means he’s been making money at a staggering million dollars per hour, around $300 per second.
About one-third of the adult homeless population have served their country in the Armed Services. Current population estimates suggest that about 154,000 veterans (male and female) are homeless on any given night and perhaps twice as many experience homelessness at some point during the course of a year. Many other veterans are considered near homeless or at risk because of their poverty, lack of support from family and friends, and dismal living conditions in cheap hotels or in overcrowded or substandard housing.

1. What is The Carlyle Group?

The Carlyle Group is a global private equity firm with $91.5 billion of assets under management committed to 66 funds as of September 30, 2008. Carlyle invests in buyouts, growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services and telecommunications & media. Since 1987, the firm has invested $52.7 billion of equity in 866 transactions for a total purchase price of approximately $225 billion. The Carlyle Group employs more than 1000 people in 21 countries. In the aggregate, Carlyle portfolio companies have more than $109 billion in revenue and employ more than 415,000 people around the world.

By Bob Willis
Jan. 15 (Bloomberg) — First-time claims for U.S. unemployment benefits last week rose more than forecast, signaling companies stepped up the pace of firings at the start of the year.

Initial jobless claims jumped by 54,000 to 524,000 in the week that ended Jan. 10, from a revised 470,000 the prior week, the Labor Department said today in Washington. The total number of people collecting benefits decreased from a 26-year high.
The estimated population of the United States is 305,466,894
so each citizen’s share of this debt is $34,768.32.

It is believed President-elect Obama’s inauguration will be the costliest in history — around $50 million — despite the recession. President Bush has declared a state of emergency to free up federal funds to help the district cop

John answers:

Wow. Just wow.

Robert asks…

401Ks for Well Paid Executives (USA)?

First, I totally agree with free enterprise, capitalism, and making as much money as you can while one is alive.

Second, I don’t understand how executives can make contributions to their 401Ks well above the 2009 limit of $16,500?

Here’s my reference, last sentence, second paragraph: “And coming in at No. 10 was Michael Jeffries, chief executive of Abercrombie & Fitch. Despite a tough year for retail, in which Abercrombie’s stock dropped nearly 70%, Jeffries made more than $60 million in stock options.

Jeffries was also awarded a $6 million “stay bonus” after remaining as the company’s chairman and CEO through December 2008, on top of his $1.5 million salary, $1.3 million for personal aircraft usage and $382,687 towards his 401(k).” (; downloaded 17 Aug 2009)

From my understanding, one can contribute $16,500 and receive matching funds up to that amount, which equals $33,000. How is it possible for this guy to receive $382,687 towards his 401K?

Like I said, I’m all for getting well paid, but I’m jealous that I receive a modest $1,600 a year from my employer’s match towards my 401K, while I max it out.

Please, can someone explain how he can contribute well above the $16,500 towards his 401K because if there’s a way to do so, I’d also like to do it.


John answers:

It all depends on how the plan is written. Very often senior executives have something called a Supplemental Executive Retirement Plan, which allows the deferral of money into a tax deferred plan above the $16,500. The difference is that it is “at risk” money. If they defer it, and the company goes under, that money is lost. For most executives, if they have faith in their company’s survival, it is an easy bet because their tax rate will be lower after they retire so it’s good to set money aside.

It’s also possible that this is a 401k profit sharing plan, which allows an employee to save up to $49,000 in a plan, wiht additional matches from a company.

There is a very good website for all sorts of tips and strategies for retirement planning. Check it out if you are curious about the subject.

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