Personal Finance Blog

Tips And Stories To Help You With Managing Money

Alibaba Debuts On the U.S. Market

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alibaba-ipo-2014Friday, Oct. 20 will go down as the day Chinese mega e-commerce giant Alibaba Group Holding made its grand entry into the U.S. market. It was listed on the New York Stock Exchange Friday at 9:30 a.m. (Make that Friday at 9:30 p.m. for those in Asian markets.)

To celebrate the event, Alibaba Chairman Jack Ma was to ring the bull’s opening bell. The company’s shares will trade under the symbol BABA. The company hopes to raise as much as $125 billion in U.S. dollars. The analysts are saying that if share prices come in at the expected range of 66-68 U.S. dollars, they will make history as the biggest initial public offering (IPO) ever, eclipsing the record of Agricultural Bank of China, which raised $22.1 billion USD in 2010.

Alibaba.com Limited is an investment holding company that provides software, technology and related services, primarily on the online business-to-business marketplaces around the world. It was founded in 1999 and is based in Hangzhou, China. Its phenomenal growth has been the talk of financial circles. It is China’s biggest online e-commerce firm and handles more business than its rivals.

The last two weeks have seen a rigorous marketing campaign in major U.S. cities, which ended Thursday pending the Friday opening. The demand for shares has risen so fast recently that bankers had to stop taking orders in some places. Friday’s IPO will answer many of the questions that have arisen about the stock prices.

In its U.S. debut, it is offering 320 million shares, 123 million of them newly issued by the company and the remaining 197 million shares now currently owned by shareholders. Among top shareholders are Japan’s Softbank (34 percent) and Yahoo (22.4 percent.

Jack Ma owns 8.8 percent of the company’s shares and will be offering 12.7 million shares (0.5 percent) as the company starts trading in New York. Executive vice president Joseph Tsai will be offering 4.3 million shares, equivalent to a n 0.2 percent stake.

Flying High – With The Best Air Fares

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Save Money On Airline Tickets
Save Money On Airline Tickets
The cost of air travel continues to go up, but with a little bit of Internet time, you can find the best possible fares.

Start with a search of discount travel sites, and don’t stop with just one. Compare. Popular sites include Expedia, Travelocity, Kayak, Google Flight Search and Hotwire. When you have made your comparison and think you have the best price you can find, act. Prices can change within minutes.

Skyscanner.com is a search engine that tracks prices for particular routes for a certain period of time – a month or a year. It’s easy to spot the best prices and the optimum times to fly as well as finding information on hotels and car rentals. You can receive email notices when the data changes.

Booking your flight online is cheaper than using the airline’s phone service, which adds a fee. Travel agencies also have started adding booking fees to replace revenue they used to get from the carriers.

Inform yourself as to the best times to fly. Be flexible if you are able. Tuesday, Wednesday and Thursday are the best days for private travel. Sunday is the most expensive. If you’re willing to make a brief stopover en route, it is less expensive than a direct flight. Early morning flights also are less costly.

As you would guess, holidays are not times to expect great travel deals. Christmas, Thanksgiving, Presidents’ Day, spring break and other high-travel times are when to avoid air travel if you can.

Booking ahead – six weeks, if possible, when the airlines are still hoping to fill up their flights, is usually the best time to get a deal. If you wait until a week or two prior to the date you want to fly, the airlines are clear on whether their flights are going to be full and they’re less anxious to offer deals. There are, however, last-minute deals to be had if you can be flexible.

Use your credit card to pay to take advantage of air mile offers. In addition, keep track of accumulated air miles through the airlines, particularly if you fly frequently.

The great majority of airports have shuttles or public ground transportation to get you to a post-flight destination. It’s less expensive than a cab. If possible, walk. If you rent a car, opt for the green alternative, a small, fuel-efficient car. Return the vehicle to the rental business fully gassed. They charge a premium to do that for you. And if you are really thinking ahead, consider driving to your destination instead of flying, then you’ll avoid a car rental.

Consider hotel alternatives such as condo or house rentals. Most units can be rented nightly or by the week. VRBO.com offers photos, details and prices and doesn’t charges a fee for the service. Make travel an occasion to visit family or friends, if possible. In exchange for their hospitality, help with groceries or take the hosts to dinner or some activity. And when it’s their time to travel, reciprocate.

Home exchanges can be arranged through homeExchange.com, SeniorsHome Exchange.com or Craigslist. That way, your home is not empty while you are away and you have housing at your travel destination. A win-win situation for both parties.

Motherhood And Working Can Co-Exist

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working-mothersTo no one’s surprise, there has been a consistent rise over the past few decades in the number of women who combine parenthood with jobs. The Pew Research Center says that in 1960, just 10.8 percent of women were the primary support of their families in households with children under 18. By 2011, the figure had risen to 40.4 percent.

That means that in near half of the country’s households, a woman is juggling the responsibilities of child-rearing and working outside the home. The challenges are especially daunting for those experiencing motherhood for the first time. There are tips that will help meet the needs, including:

Carefully consider career decisions. Parenthood may require some adjustments in a women’s career goals. Making thoughtful decisions is better than knee-jerk reactions that may have serious effects in the future. Some new mothers develop guilt symptoms when they believe they are short-changing their jobs or, on the flip side, they are concerned that they are not spending enough time with their children. Quitting the job entirely to focus on home responsibilities could be counterproductive later on. When you are expecting a child, before the challenges have become reality, is a good time to list the pros and cons of being a working mother. The list will be personal to yourself and your situation, but a good and honest airing of your ultimate desires will be a guide to making decisions. The more thought you give to the task, the more satisfied you will be with the outcome.

If you choose to continue working, don’t feel obligated to go overboard to convince the boss that you can be a competent worker and a good parent. Especially in the months after the arrival of your child, allow yourself some leeway – obviously within the parameters your particular job can accommodate. Among other things, your body will take awhile to return to normal after childbirth. Accept help when it is offered. Many employers are understanding of the adjustments new parenthood requires and are willing to work with you.

Look for ways to ease your workload at home. Mothers are more likely to develop a deep rapport with their children in the first few months than are fathers, but try to share the load as nearly as possible to prepare Dad to play a bigger role in child rearing in the early phases of parenthood. Share cooking duties and household chores. Hire help, if possible, for the deep cleaning and “hard work” aspects of keeping up. Sometimes a relative – Grandmothers are usually a willing source – will step in to assist when there are particular needs such as a sick baby.

Hang onto values and priorities. Jobs are important and certainly necessary to most households these days, but children? They’re family, and that comes first. Circumstances, obviously, vary greatly, but with thought and planning, women can mix jobs and parenthood and find both rewarding.

Know About Your Social Security Benefits

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social-securityFICA is an acronym known to everyone who works for pay. It’s that little bit of money that disappears from your paycheck each time. Most people have a vague sense that this money is held back by the government to aid in your retirement. But not everyone knows how it works.

Don’t expect a lot of help from the Social Security Administration. They aren’t into the nitty gritty for each beneficiary. It’s up to you to learn where your FICA dollars go and when you can expect to draw on the accumulation as you retire. There are many ways and you need to analyze these and choose what’s best for you.

Married couples have a number of options, according to a Bankrate.com article. Alicia Munnell, director of the Center for Retirement research at Boston College, advises that the ultimate option is to wait until you are 70 to begin benefits. The payment then is 76 percent higher that it would be if you start at 62 and 32 percent higher than if you chose to start withdrawing at age 66.

If this is your choice, of course, you have to accept the fact that you are gambling on living far enough beyond 70 to make it worthwhile. If you have inklings that your health is not going to be that great, you probably should opt for the earlier benefits.

Some financial experts believe that the odds are against your making money by waiting until age 70 to claim benefits. They advocate the “take the money and run” position. It’s what Verton Bernstein, retired law professor and Social Security expert, advises.

Marital status can make a difference. Divorcing before you have been married 10 years will deprive you of the ability to claim a share of the ex-spouse’s Social Security benefits. If you are ready to bail out of the marriage at nine years and 11 months, hold on a month. Then you are eligible for Social Security benefits on up to half of the ex’s earnings or on the basis of your own earnings, whichever is greater.

If the ex-spouse dies, you’ll be treated as the widow or widower in this scenario. If the ex was a big earner, it would be wise, if possible, to delay collecting on this benefit until you are 70, when you would receive the maximum benefit. If the ex continues to live a long life, encourage him/her, if possible, to delay retirement until age 70. If you both survive beyond age 66, you might choose to collect half of the ex’s benefit while leaving your own intact until you are 70.

The intricacies of the shared benefits are baffling to some, and it may be wise to hire a lawyer or tax expert to help you make decisions.

The same holds true if you are applying for SSDI benefits related to health issues. An applicant is entitled to representation from the onset of the application process, but Social Security doesn’t always make that clear. Many applicants wait until a claim has been denied, then seek help. That slows the process considerably.

When you’re thinking about retirement, remember that Social Security bases your benefit on the 35 highest earnings years. The figures are adjusted for in If you have less than 35 years of work experience, they will use zeros to make up the difference. That seriously brings down the total that is the basis for your benefit. If you are in a reasonable reach of 35 years, make an effort to stick it out for the sake of a higher benefit.

Do You Really Need A Credit Card?

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credit-cardsSome folks love them. Some folks hate them. Either way, credit cards have become an almost universal financial fact of modern living in America.

Having one is probably a good idea, says Christopher Viale, board chairman of the Association of Independent Consumer Credit Counseling Agencies. They’re important in building a good credit score and many card holders judiciously cash in on the related perks – rewards programs, points, cash back or miles, to make their money go farther.

However, Viale says, there may be a downside to using your credit card as first choice in making payments. They constitute a serious temptation to overspend, which could result in excessive debt and damage to your credit score.

Experts list these warning signs that your credit is controlling you instead of the other way round:

No. 1: Pay your credit card bill on time each month. Missing payments can create chaos. Your VantageScore could drop 70 to 90 points for the first instance of missed payment. If you are able to make only minimum payments and are struggling to do that, take it as a warning sign. Stop using the card and pay with cash. Make a plan for getting the card back on an even keel. If you have multiple cards, concentrate on the one with the highest interest, while continuing to make minimum payments on the other cards. Resist the temptation to spend just to benefit from special offers or discounts from retailers. What you stand to lose is more than what you stand to gain. At least once a year, write down your expenditures and scrutinize them. If an honest analysis shows you are overspending, adjust.

No. 2: If you are using a card that carries interest rates of 18 to 20 percent, consider that a red flag. It’s important to your credit scores and competitive loans to show some smart spending habits. Cards with lower interest rates are available. If you apply for a card with lower interest and are turned down, you can be assured your credit use is out of balance and needs attention. Brand loyalty at this point is counter productive. Don’t stick with a card that doesn’t offer you the rates and rewards you deserve. Too many inquiries into credit card offerings can hurt your credit score. Don’t apply for a new card until you’ve done your homework. Closing a credit card account also can have negative connotations, so consider if it is worth keeping your current card as part of your overall assessment.

No. 3: If you have been beguiled by the lure of attractive sign-on bonuses and lucrative rewards offerings and now have a wallet full of cards, it’s time to assess and start trimming. The more credit you have in your pocket, the more likely you are to overspend. And you may find yourself confused about which payments you have made and when. Not worth the prospect of missing a payment. Viale suggests two cards that have good rewards points.

No. 4: Luxury credit cards are designed to attract attention. Flashy colors and materials heavier than plastic seem (only seem) to lend some extra legitimacy to your card. Beware such ego strokes. If you see them as status symbols, take a closer look. Luxury cards may carry high annual fees. They may have very high or even unlimited credit limits, a clear invitation to overspend, a disaster for average card holders. Be certain your credit limit is manageable. If you have one of these “status cards” in your array, consider closing it out. Look for a more reasonable card in the same issuer’s selection. Closing out a card entirely could affect your credit score, but there are times when that is the best thing to do. A temporary dip in the score is preferable to keeping a high-fee card that tempts you to overspend.