For the last few months, I’ve been developing this site, mostly on my own, on nights and weekends whenever I can find free time. Development has been slow considering I’ve had to teach myself html, css, and php – and now, I’ve reached the limits of what I can reasonably do by myself.

For this reason, I’m looking to scale, and I’m looking for, well, for lack of better words, a “rockstar”. While the term “rockstar” has been incredibly overused over the last few years, it really describes who I want – someone so disgustingly good that it makes you want to be their groupie.

Who (or what) you should be

• Someone with demonstrable code – a site or side project that you’ve developed before.
• An affinity for design – you’ll notice that HapiMoney isn’t great, and it needs to be improved!
• Expertise with html, css, mysql, and php for now. Ruby or Django would be a huge plus.
• Someone who takes pride in clean code and fast prototyping.
• You should have a brokerage account, and know the basics of personal finance.
• You should be genuinely interested in personal finance!

Time requirements are very flexible. This is not a full time gig (yet) so if you are looking to just get your feet wet, this might be perfect for you. We all know that selecting a co-founder is a delicate process, so let’s get together over a beer and talk.

If you are interested please email me at alex@hapimoney.com or find me on twitter @alexanderking.

If you know someone who might be interested, please forward this on!

Mapping your financial infrastructure is a mundane task. It’s not exciting. It’s not likely to save you big bucks. Instead, it’s the sort of Big Picture exercise that each of us ought to perform from time-to-time just to be sure that everything’s working the way we think it is. If you do this every year or two, you just might catch some inefficiencies that need to be corrected. I did.

J.D. Roth – Get Rich Slowly

Roth is right—while charting your financial infrastructure may not be the most exciting task in the world, it’s helpful. Real helpful. By looking at how money enters and exits your life, you’re better positioned to reorganize and clean up any inefficiencies. Think of it as a spring cleaning for your personal finances.

I tend to map out my finances once or twice a year, mostly to make sure I’m not doing anything too wacky, but also to think about how I can improve my general financial infrastructure. Am I using the right credit card? Should I adjust how much I’m saving, how much I’m investing, how much I’m funding my retirement account? That guy mentioned something about a Roth IRA—do I need that? More often than not, you’ll find a way to improve your current situation, especially if you’ve never sat down and really thought about it.

So, in the spirit of spring cleaning, I mapped out a portion of my financial infrastructure. Enjoy!

Checking and Investing

While I’ve used Bank of America for the last six years, recent instances have driven me away from their services. I now use Charles Schwab for both checking and investing. For the record, my experiences with them so far have been nothing short of fantastic.

Investor Checking Account
Through my employer I have a direct deposit into this account. I travel a lot for work and was looking for an ATM card that minimizes its foreign transaction fees. Schwab reimburses all ATM fees! I use this account to withdraw cash, pay monthly bills, pay off student loans and fund my various investment/savings/retirement accounts.

Brokerage Account
Due to the economic crisis, the stock market has been on sale since 2008! I’ve used the opportunity to put some money into a few different mutual funds. Schwab’s brokerage account lets me do that for $8.95/trade. There are better deals out there, but having all my accounts in one place makes the few extra dollars worthwhile.

Roth IRA
I recently started a Roth IRA to 1) take advantage of the tax system and 2) leverage my retirement savings. Schwab has their own Roth IRA program. Again, all on the same platform. Makes things really simple.

Savings

Here I use ING Direct. Their Orange Savings account has two features that I find attractive. 1) They offer competitive interest rates and 2) You can create and label multiple savings accounts on one screen. For instance, I have one “emergency fund” account that I put money into in case of – you guessed it – an emergency, and another one for a climbing trip I plan on taking in the next couple of years. Setting up targeted accounts makes savings goals more reachable.

Credit Cards

For work, I use a corporate AMEX. I also have a personal Visa (Bank of America World Points), which is now only used for emergencies. My primary personal card is the Citi AAdvantage Mastercard. I received 30,000 American Airline miles (basically a free flight) for signing up. I knew I wanted a credit card with an airline rewards program, and even though they charge an $85 annual fee, the move from BoA Visa to Citi Mastercard made sense.

Syncing It All Together

On the first of every month, I use an Excel sheet to compare the amounts in each account. I also note things like my company 401K, student loan payments, and my overall budget for the following month. Sometimes I log into Mint.com, but I prefer Excel for a simple financial snapshot. The act of logging in once a month to update the numbers forces me to think about my money on a regular basis.

So, that’s my system, more or less. What’s yours?

The last two weeks have been tumultuous for the stock market to say the least. Many analysts even think that this might be a “double dip” into recession. I don’t think this is likely, but the market has finally realized that we are not clear from the recession by any means – unemployment has stabalized but it’s at a rate we haven’t seen since 1982, interest rates have been kept artificially low but will likely increase dramatically for corporations to get access to capital from investors, and Europe is in a very weak state.

The last two weeks, Europe has been the talk of the town. Greece, until a $1 Trillion rescue loan, was on the verge of bankruptcy. Spain has now been downgraded, and investors are beginning to wonder how Portugal and Italy will fare with their large governmental budgets, rapidly shrinking revenues and enormous pension liabilities.

But there is good news in all of this for the US! The US Dollar has been performing incredibly well – especially against the Euro, meaning that US importers of European goods now can buy more product for the same amount of dollars (or the same amount of product for cheaper). This could mean a shrinking trade deficit (fewer dollars leaving the US), and more savings for people who buy a lot of products overseas.  As an added bonus, a strong dollar means travelling to Europe is relatively cheaper for an American Tourist (though plane flights are astronomical, which I’ll get into later).

The dollar is still the world’s currency, and foreign states such as China will likely hold on to their vast dollar reserves (in the form of US government bonds) instead of trading them out for Euro Denominated or even Yen Denominated Bonds.

Lastly, it’s possible that we’ll see overseas investors get skiddish about investing in the EU and start bringing their money over to the states (further stabalizing our stock market).

We aren’t out of the woods yet, and while Europe’s problems raise questions about the stability of the market in totality, there is positive news we can be optimistic about.

The following is a guest post written by David Brown. David is a financial writer for OVLG, a law firm with expertise in Debt Consolidation, Bankruptcy, and Debt Settlement.

The world economy is yet to recover from the overwhelming effect of recession which has driven many families to financial ruin over the past couple of years. Foreclosures are at an all time high, bankruptcies are also on the rise. However, you can come out of the ever mounting, rib rushing burden of debt without filing bankruptcy. If you are considering debt relief programs then you must have heard about debt settlement. It is an effective way of making you debt free within a relatively short period of time. Nonetheless, debt settlement is a rather intricate process and is not a perfect solution either. So let’s probe deeper to understand debt settlement better before you put your right foot forward.

What is debt settlement?

Debt settlement is a debt relief program in which your creditor agrees to accept a reduced sum of money as full payment. A part of your debt is forgiven. Usually, only a lump sum is accepted by the lenders.

• Why should the lender agree to a reduced payment?

Debt settlement is essentially for people who are in a poor financial state, unable to make monthly payments, in short on the verge on bankruptcy. It is explicit that debt settlement is for people who are in the red zone. If you file for bankruptcy then your lenders risk losing everything. Being financially wise people, they will rather settle for a lesser sum than for nothing. Remember that it needs some skillful negotiation on your part to get your creditors convinced that settlement is the best option for them as well as you. If you are not so confident about your own negotiating abilities then better hire a debt settlement company. Apart from dealing with the creditors on your behalf, the settlement company would also handle the intimidating collection calls.

• What are the advantages of debt settlement?

The greatest advantage of debt settlement is, of course, the reduction in the payable amount. Usually you need to pay something around 50% of the outstanding balance. Effective negotiation coupled with critical monetary condition can result in even 70% of the debt being forgiven.

Debt settlement can get you out of debt faster compared to other debt relief programs like debt consolidation or bankruptcy. The whole process should be over by a couple of years if you manage to gather the agreed lump sum and make the payment. You cannot hope to be debt free within two years with any other debt relief program.

Debt settlement has a number of advantages over its most common alternative-bankruptcy. The former indeed looks bad on your credit report but bankruptcy is absolutely fatal to it. Bankruptcy stays on your credit report for 7-10 years depending on whether it is chapter 7 or chapter 13 bankruptcy. “Settled in full” (which comes with debt settlement) statement will make it less difficult for you to get loans in future than having bankruptcy on your credit report. Filing for bankruptcy would also mean that all your financial records will be accessible to everyone. Debt settlement, on the other hand, helps you to maintain anonymity. With bankruptcy you can lose important assets like your home but not so with debt settlement. Finally, bankruptcy is a social and economic stigma and a humiliating experience. Post-bankruptcy life is not easy. Debt settlement is a more dignified way to clear your debts.

• Debt settlement has some disadvantages as well

The main problem with debt settlement is that if your financial condition is truly bad then you will have a hard time gathering the lump sum. It is natural that you will need some time to collect the money; meanwhile the interests will accumulate and add to your debt.

Debt settlement does no good to your credit score. So avoid settling your debt unless you are a bankruptcy candidate.

The money you save by negotiating with your creditors will be taxed ( if the amount forgiven is above $600 ). The more you save , the more you pay in terms of tax.

Hiring the services of debt settlement company can be a costly escape. They charge outrageous fees and don’t give a clear answer about the total money that you need to pay. Thus you are left in the dark which make things even worse. Some companies do take care in educating their clients properly but you need to do proper research to find them out.
It is not always easy to convince the creditors for settlement. They will not easily give up a large part of the money.

• Things to remember while negotiating for debt settlement

Make sure that you do not jump at the first offer that you receive from your lenders. It may not be the best one.

Whatever agreement is reached after negotiation should be written down. Remember that verbal words have no value at all.

Be calm and mentally strong during the negotiation process. If you have iron will and perseverance then you will certainly make a smart negotiation.

Don’t be afraid if your creditors threaten to take you to court. Such a process is too costly and time consuming for them to follow under usual circumstances.

Debt settlement is indeed a good choice for people who are submerged under debt and will not be able to pay the entire amount under any circumstance. However, if you have manageable debts then you may not want to consider this option considering the odds. So thoroughly analyze your economic condition and take the advice of a financial advisor before you decide to opt for debt settlement.

12 Steps for Getting your Finances in Order

Getting your finances in order is so easy to put off. That’s why every few months, it’s necessary to do a financial audit of yourself. Brush off those dollar cobwebs and get to work!

Everyone should take some time out of their busy schedule this upcoming weekend and complete a full financial audit. It shouldn’t take much time at all, but can help save you money.

1. Make a list of all of your assets

No, I don’t mean every last paper clip or flip-flop. But you should have a general idea for what you’re worth over time. Take a look at your bank accounts, investment accounts, 401k, as well as thing you have laying around the house. Guesstimate the value of things like your TV, computer, and other personal assets .

2. Analyze last months bank statement

Where could you start saving more money? Perhaps instead of going out every weekend, cut back and spend a night in with movies and friends.  See if you can’t save 1% more a month (assuming you spend $1000 a month, that’s just $10).

3. Check how many credit card points you have

Points don’t really do you much good just sitting there. If you have been eyeing a purchase – see if you can’t use some of those points. I, myself, had over 60,000 points recently just sitting there wasting away. A few gift cards for things I was going to buy anyways (with cash!) took away a large chunk of that.

4. Find a better bank to put your cash

Check out this list of high yield savings providers and determine if your bank is the best place to store your money.  Signing up for a new account is easy and typically only takes a short while to be approved.

5. How much below the limit are you on your 401k or Roth IRA?

Employers typically allow you to save up to $16,000 per year in your retirement account. If you don’t have an employer sponsored account, that limit is typically much less.  Analyze how much you saved last year and see if you can’t bump up your savings rate.

6. Rebalance your investments

Every portfolio should be well diversified, including assets like cash, stocks, bonds, and even real estate. Look at your investments and do a quick back of the envelope calculation.  If it looks like you are over weighted in one sector, try selling some of that asset and buying up another asset class. If you don’t know what your asset weight should be, go to HapiMoney.com and let our service tell you (for free of course).

7. Start an emergency fund

Imagine you had to live off of savings for 6 months. Now start putting that amount away into an emergency fund. This is is also the amount of cash you should keep in a high yield savings account.

8.  Write down the effective interest rate on all of your debt

Make a list of all your debt and write the interest rates next to them. If you get tax write offs for certain debt, make sure to adjust the interest rate accordingly (multiply the rate by 1 minus your tax rate).  Now order them from most expensive to least expensive. Note: Make sure to include your credit card balance as part of this debt (if you have a balance)!

9. Make an extra payment on your most expensive loan.

Debt weighs us down and prevents us from taking risks when we should. The more of your debt you can pay off now, the better. Save those low interest loans, however, for later.

10. Look for a lower interest credit card

If you’ve got a balance on your credit card, you are likely getting killed by the interest rate. If you can’t completely pay off your credit card, look for a better rate and see if you can’t transfer your balance.

11. Look into setting up a Will and Trust.

A will lets the courts know what to do with your estate when you pass away. It sucks to think about, but not having a will can be EXTREMELY costly to your family, and they might spend thousands of dollars in attorney fees fighting in court. Help your family out by letting them know your wishes, and helping to minimize any potential squabbles.

12.  Analyze your insurance coverage

Do you have rent? If so, you should get renters insurance – an incredibly cheap way to get coverage on your belongings.

What about owning a Home? Homeowners insurance is a necessity.

Own a car? If you are a safe driver, try looking into higher deductible plans.  You’ll save on the premiums by having a higher deductible.

Some of the most shocking news in the last few days has been the fact that Apple (AAPL) is now considered larger than Microsoft (MSFT) in the S&P500 rankings. While technically it’s not accurate (the S&P numbers don’t reflect a large number of common shares outstanding from Microsoft which are not available to the general public), it does point to an anemic problem within Microsoft.

Over the last 10 years, Microsoft’s stock has returned NEGATIVE 20 percent while Apple’s stock has returned over 800 percent.  Combine this with the fact that Microsoft has a dividend yield (the dividend amount divided by share price) barely above those of high yield savings accounts (about 1.8%) and you’ve got a recipe for investor disaster.  Remember our post on why risk should yield reward or why money today is worth so much. In short, why keep my money in a highly risky asset with uncertain returns, when I can make the same amount in a much less risky asset class.

What will be interesting is to watch these two companies battle it out over the next few years. Will Microsoft discover a new innovative solution to their fiscal woes? Will Apple be able to continue to ride the gravy train with biscuit wheels?

What are your thoughts?

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I’d like to start a little series on the important financial statements that every public company has to issue. This will cover a brief overview of the annual report (10k) as well as 3 of the most important financial statements that you should look at before deciding to invest in a company. These statements are the Income Statement, the Balance Sheet and the Statement of Cashflows.

To start the series, I’d like to cover what a 10k is and what you can find in them. Every publicly traded company is legally required by the SEC (Securities  and Exchange Commission) to release a report of their business each year called a 10k. These reports are, in theory, independently audited by an accounting firm to verify the authenticity of the numbers. And these reports are CRITICAL for evaluating any investment.

To find the 10k or annual report of a company that you are researching, head over to the SEC’s EDGAR platform. You can search for your company and find the most recent filing. To see what the 10k looks like for Google, click here. It ain’t pretty, but it has more relevant information that you’ll know what to do with.

The Structure

Every 10k is laid out in essentially the same format – with small variances here and there.

1. Title page – letting you know what company you are looking at and some basic legal information.
2. Table of Contents – I think you should get this without explanation
3. Part 1 – Basic Company information: what the company does, risks it sees in it’s business, the property it owns for it’s business, and any legal proceedings which could adversely affect the company.
4. Part 2 – the financials (and where we will spend the bulk of our time).
5. Part 3 – An overview of who’s running the company and how they get paid (yes, you can see their salaries and any stock grants).
6. Part 4 – Residual information

I highly recommend sitting down with an annual report before deciding to invest in any company. It will take a few hours to understand, but you’ll know much more about the company, and get a better feel for what it does.  Don’t worry about the financial information yet, we’ll break it down soon enough. Just try understanding the business as a whole, their risks and anything else you can glean that might be important.

And you won’t be alone in your endeavor, slowly slogging through Annual Reports – it’s been noted that legendary investor Warren Buffet almost exclusively relies on them before making an investment decision. And as the WSJ notes, they also help him avoid bad investment decisions.

So who benefits from a different broker with technical trading tools, low commissions, etc? Day traders and gamblers. That’s not to say these things are bad, but they probably shouldn’t influence your decision as much as you let them.

Basics of Investing
Paul Gunning, Planning and Guidance Consultant, Fidelity Investments
Wed Jan 6, 12-01:00pm, W20-306
Tue Jan 12, 12-01:00pm, W20-407
Tue Jan 19, 12-01:00pm, W20-306

No enrollment limit, no advance sign up
Repeating event. Participants welcome at any session

This workshop provides investors with a basic understanding of stocks, bonds, and short-term investments; covers the concepts of asset allocation and diversification; and shows how determining risk tolerance and time horizon can help develop an appropriate investment strategy.
Contact: Paul Gunning, Fidelity Investments, 258-8872, paul.gunning@fmr.com
Sponsor: MIT Human Resources
Cosponsor: Fidelity Investments

Personal Finance: 101
Mark Porter’05
Tue Jan 5, 05:30-07:00pm, 10-105, Bush Room

No limit but advance sign up required (see contact below)
Single session event

MIT has done a great job teaching us how to earn money.

Unfortunately, no one has taught us what to do with it when we get it! This hour long seminar will give you the basics of a financial planning approach. We will cover definitions and best practices regarding:

• Cash Reserves
• Liability Management
• Tax Planning
• Insurance Planning
• Savings Vehicles
• Investments

Class will be most useful for those already working or graduating in 2010, but all are welcomed! Taught by Mark Porter, CFP® Class of 2005.

Pizza will be served. Please register using the link below so we know how much food to order.
Web: https://alum.mit.edu/smarTrans/register-login.vm?eventID=38641&groupID=194
Contact: Katie Maloney, W98, (617) 452-3372, kcasey@mit.edu
Sponsor: Alumni Association

And for you ubernerds, and those interested in more advanced portfolio selection techniques, read on below. I’ll hopefully be going to these sessions, if I can make it.

Professional Portfolio Selection Techniques: From Markowitz to Innovative Engineering
Antonella Sabatini
Enrollment limited: first come, first served
Limited to 100 participants.
Participants welcome at individual sessions (series)
Prereq: Students encouraged to attend all sessions; not mandatory

Reviews most important & widely used state-of-the-art Portfolio Selection Techniques, as used by capital firm wealth management institutions as well as for a personal financial portfolio. Introduces innovative methodologies, including the GAM model as a tactical asset allocation technique, with working examples. Gentle introduction to the subject, specifically targeted at undergraduates in Economics, EECS and other fields with interest in quantitative finance, economics and management, with emphasis on innovation and research

Pizza and beverages offered at last class.
Contact: Matthew Goldstein, austein@mit.edu
Sponsor: Electrical Engineering and Computer Science
Cosponsor: Institute of Electrical and Electronic Engineers

Introduction to Portfolio Management Techniques Part I
Antonella Sabatini
Review of the most important & widely used state-of-the-art Portfolio Selection Techniques. Targeted at people with no knowledge of portfolio management and investment. Process of portfolio construction – Asset allocation: strategic asset allocation; tactical asset allocation. Portfolio
Optimization, Markovitz’ model, Black & Litterman (B&L) model.
Tue Jan 19, 12-01:30pm, 4-237

Introduction to Portfolio Management Techniques Part 2
Antonella Sabatini
Conclusion of the theory presented in first session. Working examples of B&L in Excel and/or Matlab. Lab session.
Wed Jan 20, 12-01:30pm, 4-237

Introduction to the GAM Model Part 1
Antonella Sabatini
The GAM Tactical Asset Allocation model will be presented. Quick review of PID feedback control theory. Prereq: having taken 18.03, 8.02, 6.003, and material covered in first two sessions helpful.
Thu Jan 21, 12-01:30pm, 4-237

Introduction to the GAM Model Part 2
Antonella Sabatini
Conclusion of the theory presented in third session. Working example of the GAM model in Excel. Attendees are welcome to bring their own portfolio of securities for a practical application (contact Antonella Sabatini for further
info: asabatin@mit.edu). Lab Session. Pizza and beverages
Fri Jan 22, 12-01:30pm, 4-237