Boing Boing

Two new reports: online ads will boom, as will ranks of "ex-bloggers" By Xeni Jardin Xeni Jardin: The popularity of blogging may reach its peak in 2007, at which point there may be as many as 100 million bloggers online -- according to a newly released Gartner report. Ars Technica has an analysis post up: Chief Gartner fellow Daryl Plummer pointed out that "a lot of people have been in and out of this thing. Everyone thinks they have something to say, until they're put on stage and asked to say it." Indeed, most people who start blogs don't keep them up forever, and Gartner says that there are now 200 million ex-bloggers. Link. Also out today, a Communications Industry Forecast report (Link) which predicts that online advertising will be the largest ad sector by 2011, outpacing dead-tree newspapers and broadcast television. Adario Strange at Wired News sees flaws in this report and others like it, and blogs: As for the future of newspapers, that's where this report, and many others like it, experienced a blind spot. The near-future emergence of electronic paper as the new medium of newspapers continues to go mostly ignored by analysts who should know better. Newspapers and magazine won't die, but the materials we use to read them will. Link

ASSETS: Retirement Planning for Women

"A longer life expectancy, less time in the workforce, and lower wages make it more difficult for women to save enough money to last."

By Doug Charney

Retirement planning is an important issue for everyone. Unfortunately, most people arent’s as prepared as they should be. According to Employee Benefit Research Institute (EBRI) in Washington, D.C., 45 percent of all American workers over the age of 55 have less than $25,000 in savings. Women, especially, don’t save enough for retirement. But, in reality, they are the ones who should be most concerned.

Women need to be even more concerned about their retirement planning than men for a number of reasons. According to the Bureau of Statistics, women live an average of four years longer than men. Seventy-one percent of women will live past the age of 85. Second, most women over the age of 65 are single, so they have to support themselves.

Because of their longer life expectancy, women should save more for retirement than men. But saving and retirement planning seem to be more difficult for women. They still bring home 76 percent less than men, according to EBRI. In fact, from 1983 to 1998 women, ages 26 to 59, made 38 percent of what men made, according to the Institute for Women’s Research.

Women also generally spend more time out of the work force, taking care of children and elderly parents. The shorter length of time spent in the work force, compounded with the fact that women are more likely to hold jobs that pay lower wages, means fewer retirement benefits. Social Security benefits are based on earnings and total years of employment, and a lower lifetime of earnings translates into lower Social Security benefits. According to the Social Security Administration, the average man received $1,008 a month while the average woman received $774 in 2003.

Pensions, like Social Security, are based on total years of service and earnings while you work at the company. Again, women are probably going to receive a lower pension benefit. According to the Women’s Institute for Secure Retirement, women are half as likely as men to have pensions, and if they do, their accounts are half the size of men’s.

If any of these situations sound familiar, you are probably asking yourself, “Will I have enough money?” “What happens when my savings runs out?” and “Am I prepared for the unexpected?” These questions are common for many women. In fact, the EBRI Retirement Conference Survey found that women are less assured than men that their savings will last through retirement.

The good news is you can take charge of your finances and build confidence in your retirement plans by using the following tips:

1. Don’t be Afraid to Invest

When women invest, they are often afraid they will lose what they have. In general, women tend to be more cautious in many areas of life. For example, women often make excellent pilots because they are less likely to take irresponsible risks. But when it comes to investing, women need to take on some level of risk to get the most out of their efforts

The real risk of retirement is not loss of money, but rather not planning to have enough. Therefore, women need to develop an Asset Allocation Plan that will meet their future needs. An Asset Allocation Plan is designed to suit an individual’s goals and personality. If you are a conservative investor, your financial advisor will develop a plan appropriate for you. Find a trusted financial advisor and a CPA and work with them to develop a plan.

2. Force Yourself to Save More

Most people like to live for today. They don’t like to think about the future and retirement. So people put off saving until they are in their forties and realize they want to retire early, but you can’t retire unless you have money saved. Use your 401(k) or 403 (b) at work to force yourself to save for retirement. Start small and increase the percent you add every year. Your goal should be generally 10 percent of your income every year.

And do not forget your IRA. Even if you work from home, you can still add to IRA's. IRA's grow tax deferred, while Roth IRA's grow tax free. Talk to your financial advisor or CPA to see which works best for you.

3. Plan With Your Spouse

Too often women let their husbands handle all the investments. They either take the backburner on investment issues, or they don’t feel confident handling them. As a result, many women have no clue where their money is. You need to ask your husband what you are saving and where it is being invested.

When your husband retires, make sure you fully understand what he is doing with his pension and 401(k). Often men roll over their accounts with a short-term horizon. During this planning phase you should always be involved in meetings with your financial advisor. When your husband is getting ready to retire, you need to consider your survivor benefit, life insurance, and your life expectancy. Does your husband have the option to choose from a survivor benefit and a single life expectancy on an annuity? If he takes the single life expectancy option and dies a few years later, his pension benefits will cease. You’ll be used to living off his pension with him, and be left with no income from his pension at all.

Many husbands take the single life expectancy option because they get a higher income from their pension, but taking a survivor benefit option gives the wife the full amount or portion of his benefit until her death. While many couples take the single life expectancy pension and supplement it with a life insurance policy, this may not be the most beneficial route. A survivor benefit is usually the better way to go.

Also, if your husband is taking a 401(k) or pension rollover, you need to know where the money is going. Women who are going through a divorce need to work with lawyers who have experience in evaluating pensions and tax consequences.

4. Plan for the Unexpected

Many people dip into their retirement savings when something unexpected happens. This can result in a 10-percent penalty for early withdrawal if you’re under 59 and a half years old, plus state and federal income taxes. So don’t forget to put three to six months’ income aside in case of the unexpected, such as a job loss, divorce, or death of a spouse.

While retirement requires major planning for everyone, women need to be most concerned about their finances. A longer life expectancy, less time in the workforce, and lower wages make it more difficult for women to save enough money to last for a retirement lifetime. However, by following prudent measures to take charge of your finances, you can help secure your future and live your retirement years with confidence.

Doug Charney, a financial advisor with the Harrisburg office of Wachovia Securities, can be reached at 1-888-529-2973.

Photo from stock.xchng.

ASSETS: Will Your Golden Years Be Golden?

"I believe those people who own a portion of the economic machine are more likely to build their wealth, while those who choose to lend their money to banks in the forms of CDs, savings bonds and savings accounts, rarely achieve wealth."

By Doug Charney

Many of us start our careers believing we’ll retire as millionaires, but we do little to help make that belief a reality. That’s why a dangerous fantasy is not in disbelieving in the pot of gold, but in believing that somehow it will just appear when we need it through no effort on our parts. In fact, I believe we have two choices. We can work for that pot of gold through discipline and perseverance throughout our careers, or we can end up working part-time in our golden years just to survive.

I’ve seen many retirees have to work at least part-time. They believe when they retire that their $100,000 in savings means they have a lot of money, but they fail to see it’s not nearly enough to live on. Many people plan for their nest egg to run out at about age 65 to 70, when they feel they will not need it any longer. Actually, most people mispredict how long they will live. According to the Centers for Disease Control (CDC), the average man lives to be about 75 and women live to be about 80. (Health, United States 2005, Table 27, National Center for Health Statistics, Nov. 2005)

Here are eight steps designed to help you achieve financial independence so that when you retire, you may be able to find yourself asking, “Will you please pass the suntan lotion?” instead of “Would you like fries with that?”

1. Start now.

Of course, the earlier you start saving and investing for financial independence, the better, but it’s never too late to start. Commonly, people put off investing. They wait for the market to be right, believing that the secret to the market is timing. They look at the numbers and think, “Oh, the market’s too high to invest now.” Frequently, they procrastinate, not even going to an investment advisor when the market is low! In point of fact, a great instinct for timing the market will not necessarily lead to financial success. However, asset allocation and regular contributions to your 401(k), your IRA and your retirement plan will help you move closer to your retirement goals.

2. Choose a competent advisor.

Do you believe you only need an investment advisor if you have a big pile of money ready to invest? Do you think investment advisors generally charge too much? Don’t let these myths hold you back from starting to save and invest now. If you are just starting to invest, you may find it more economical to start with an investment advisor who is also starting out. Even new investment advisors have more training and knowledge than most investors--and can offer sound advice and information about relevant changes. Even with a modest income, I believe you need an investment advisor, an attorney and a CPA (one who does tax planning, not just your taxes) on your team in order to help you gain financial independence.

Choose your financial advisor carefully, interviewing several and looking for compatibility with you and your goals as well as integrity, accessibility and the ability to bring a variety of products to the table, not just one company’s. Once you have picked out an investment advisor, lay all your cards on the table and work together to develop a plan to achieve your financial goals.

3. Educate yourself.

Once you’ve found an investment advisor, you’ll want to learn as much as you can in order to supplement his or her advice. The better educated you are, the better you can work with your investment advisor, because you’ll better understand what he or she is trying to do for you. Improve your investment knowledge by attending as many advisor-sponsored seminars as you can. Read basic investment planning books, concentrating on them rather than articles in periodicals and newsletters. Books generally provide more depth than periodicals, in my view. As for the Internet, be careful in deciding whether to accept advice from people you don’t know. Surf the websites of well-known mutual fund companies, which often contain valuable articles and prospecti. Many investment firms also have websites that provide good information.

4. Pay yourself first.

Invest your money before you spend it. Treat your investment program as another necessity, along with food, shelter and transportation. When you sit down to pay bills, write the first check to your investment program. Or set up an automatic deposit system to put money from your checking account into your investment plan.

The old rule of allocating 10 percent of your income to investment still stands if you are starting to save early enough. If you are starting to save later in life, you will generally have to contribute a lot more than 10 percent in order to make up for years of not saving. Your best first investment should definitely be your employer’s retirement plan, which enables you to invest while receiving the advantages of tax deductions as your money grows, tax-deferred.

5. Choose your investments carefully.

Always be sure your investments match your objectives. If you’re seeking a long-term capital appreciation, then you may want to consider growth-oriented investments such as international and domestic mutual funds. (Investing in foreign securities presents certain unique risks not associated with domestic investments, such as currency fluctuation and political and economic changes. This may result in greater share price volatility.) If you’re retiring and seeking a monthly check from your investments, consider selecting those designed to produce income, such as balance funds (part stocks and part bonds) or bond funds.

In my view, slow and steady wins the game! Be consistent and stick with your program. Rather than chase after last year’s hot mutual fund, I believe you should look for those mutual funds that have a long-term consistent track record (although past performance is no guarantee of future results).

6. Spread your risks.

Working with your financial advisor, allocate your assets among several different mutual funds and different industries. This diversification of your investments can help to reduce the volatility of your portfolio. As you set it up, ideally, your portfolio will contain companies of all sizes, international and national companies, and bonds. (The prices of small- and mid-company stocks are generally more volatile than large company stocks. They often involve higher risks because smaller companies may lack the management expertise, financial resources, product diversification and competitive strengths to endure adverse economic conditions.) By not putting all your eggs in one basket, you are more likely to get a more consistent return on your investment. Moreover, international diversification can enable you to participate in an expanding world economy. Keep in mind that diversification cannot eliminate the risk of fluctuating prices and uncertain returns.

7. Be an owner, not a lender.

I believe those people who own a portion of the economic machine are more likely to build their wealth, while those who choose to lend their money to banks in the forms of CDs, savings bonds and savings accounts, rarely achieve wealth. To achieve financial independence, it may be prudent to take some risks, but don’t gamble with your investments. Achieve ownership through equity investments such as common stocks and mutual funds.

8. Avoid temptation.

If you’re investing for a long-term goal of financial independence, resist the temptation to spend your assets on short-term rewards such as big-ticket electronics or a new car. You lose considerably less when you buy a used car, for example. Taking money from your savings and putting it into something that depreciates as rapidly as a new car is counter-productive, in my view. If you receive a large distribution from a retirement plan because you change jobs, consider rolling it into an IRA immediately. Yielding to the temptation to spend some or all of the money can have an even more devastating effect on your long-term financial security than the taxes and penalties already imposed on premature distribution.

You don’t have to be a doctor, attorney or high wage-earner to achieve financial independence, pay for your child’s college education or even take an early retirement. People with moderate incomes and modest lifestyles often retire with enough money to support themselves during retirement. By following these eight steps and investing regularly and with discipline, I believe you’ll not only be able to potentially improve your financial situation, you may also become a financial role model for your children and future generations. I believe that if the rich really do get richer, it’s not because of opportunity so much as because each generation instills in the next the skills that it takes to make and save money.

Doug Charney is a senior vice president-investments with Wachovia Securities in Harrisburg, PA. For more information, he can be reached at: 1-888-529-2973.

Mutual funds are sold by prospectus. Please consider the investment objectives, risks, charges and expenses carefully before investing. The prospectus, which contains this and other information, can be obtained by calling your financial advisor. Read it carefully before your invest. The accuracy and completeness of this material are not guaranteed. The opinions expressed are those of the author and are not necessarily those of Wachovia Securities or its affiliates. The material is distributed solely for information purposes and is not a solicitation of an offer to buy any security or instrument or to participate in any trading strategy. Wachovia Securities, LLC, member New York Stock Exchange and SIPC, is a separate nonbank affiliate of Wachovia Corporation.

Modified photo. Original image from stock.xchng