Stan Stonegate's Personal Finance Blog

CPPIB and Onex Eyes Bid for UK-based Tomkins

2010-09-08T10:36:00.000-07:00

The Canada Pension Plan Investment Board (CPPIB) and Onex Corp are working together to propose a takeover of UK-based car parts maker, Tomkins Plc, just as the weakening British pound attracts more North American investors eager to take assets off of UK companies’ hands.

While the CPPIB and Toronto-based Onex have not released a formal bid, the companies have proposed a deal, which is worth over $4 billion.

After Tomkins reported receiving the proposal on July 19, 2010, the possible takeover lifted the car parts manufacturer’s shares 33.1% to 306.6 pence by mid-morning in London, thereby valuing Tomkins at approximately £2.7 billion ($4.1 billion).

The stock reached 314 pence - the highest Tomkins has obtained since 2006. However, it didn’t make it to the 325 pence cash offer that potential buyers considered.

In May 2010, Onex CEO Gerard Schwartz expected the current economic situation to create investment opportunities for Canada’s largest private equity firm. At that time, the company possessed about C$1 billion ($950 million) in cash, as well as third party uncalled capital worth C$3.9 billion ($3.8 billion) for acquisitions.

The CPPIB is Canada’s second largest pension fund manager and oversees assets worth C$127 billion. It is also one of the top private equity investors in the world.

Survey: SMEs of Middle East Report High Business Confidence Level

2010-08-26T13:21:00.000-07:00

Even in the midst of a global economic crisis, small businesses continue to exude confidence, especially those in Turkey and the Middle East. A recent survey revealed that Middle Eastern small and medium enterprises (SMEs) are planning to hire more people and boost investment.

HSBC’s semi-annual monitor on global small business confidence showed that 49% of SMEs in these areas keep a positive perspective of the next six months, while 50% are looking forward to increasing capital expenditure by the end of the year.

The data, which included results from UAE for the first time, suggested a positive outlook among many businesses in all Middle Eastern countries. Saudi Arabia ranked second (after Vietnam) in the global rankings, and for the second time, the Middle East scored higher compared to developing and emerging markets.

HSBC’s bi-annual Small Business Confidence Monitor looks at the outlook of SMEs regarding capital investment plans, local economic growth and recruitment. The latest monitoring session covered more than 6,300 SMEs in North America, Europe, Latin America, the Middle East and the rest of Asia.

Saudi Arabia scored 145, the highest among all Middle Eastern countries. While Qatar’s score dropped from 159 in 2009 to 137 in 2010, it’s still well above the regional average (132) and the global average (118).

UK Falling Behind in Energy Industry Investment

2010-08-20T15:44:00.000-07:00

A government advisory organization said that the UK is falling behind other wealthy countries in terms of developing new technologies for energy, and this hampers the creation of green jobs in the country.

The Committee on Climate Change, a statutory body that provides emission reduction advice, said that the UK used up only 0.01% of GDP on energy in 2007, which is the latest year wherein comparative data is available, whereas Japan spent 0.09%, France 0.05%, and the US 0.03%

In 2009, the government spent about £550 million of public money for low carbon technologies. Only about £260 million of this money was used on energy.

The committee also quoted the International Energy Agency, saying that investment on energy should be two to five times more than the current levels so that climate targets can be met.

Furthermore, the committee called on UK’s government to focus on six areas, namely: wave and tidal power, offshore wind, carbon capture and storage, electric vehicles, smart grids and meters, and aviation.

The advisory group warned that without support from the government, an array of low carbon technologies will be trapped in a point termed as “valley of death,” a situation that the private sector isn’t willing to take the risk of investing in.

Sara Lee to Sell Bakery Unit

2010-08-10T09:42:00.000-07:00

In line with Sara Lee’s plan of revamping the company, it is currently looking at selling its struggling North American bakery and bread business. Sara Lee, famous for producing Jimmy Dean foods, hopes that this move would bring about a broader change for the company.

Sara Lee, a major player in the food industry, has been courting possible buyers of the bread unit, which has been seeing dwindling sales throughout the recession, according to sources that refused to be mentioned, for this matter isn’t public. The company has obtained the services of Bank of America, Corp to get financial advice on the bakery unit, which includes one of the largest fresh bread brands in the country.

The formal transaction process hasn’t started and advisers have only begun to focus on interest from private equity funds.

Over the last decade, Sara Lee has been constantly developing the expansion of the unit. The company started with closing a $2.8 billion deal to acquire Earthgrains in 2001, and then a $72 million deal to obtain Butter Krust Baking in 2006. However, due to tighter competition, the bakery division encountered challenging times. Eventually, its profit and sales significantly dropped. In February 2010, company CEO Marcel Smits announced to investors that the bakery business isn’t the company’s main source of profit.

More info:

http://www.thestreet.com/story/10812216/1/sara-lee-examines-sale-of-bakery-unit.html?cm_ven=GOOGLEFI
http://articles.chicagotribune.com/2010-07-20/business/ct-biz-0721-sara-lee-bread-20100720_1_bakery-sales-sara-lee-bread-business

Apple’s Revenue Lifted Thanks to iPad, Mac Sales

2010-08-05T09:12:00.000-07:00

The iPad’s strong debut and the new iPhone’s popularity helped gadget manufacturer Apple achieve its best quarter ever, the company reported.

Apple’s sales soared to an astonishing $15.7 billion, which is 61% greater compared to the same period last year. Net income increased up to $3.25 billion, which is higher by 78% from last year.

In the second quarter, the electronics company sold 3.47 million Mac computers - more computers than it has ever sold in a three-month span. Apple also sold 3.27 million iPad tablet computers, which was released into the market on April 3, 2010.

The iPad returned $2.17 billion in revenues, which represents about 14% of the California-based company’s total income for the second quarter.

As stated by Apple CEO Steve Jobs, users love the revolutionary iPad and the company has more products up its sleeves to hit the market this year. The CEO added that more people are purchasing Macs than ever before.

As for the iPhone, 8.4 million units were sold during the quarter, which is up by 61% from more than a year ago. The latest version of the touch screen smartphone, the iPhone 4, went on sale on June 24, 2010 in five countries, although Apple has been receiving complains about poor reception because of the mobile device’s unusual antenna styling.

BP to Sell Assets to Pay for Oil Leak

2010-08-03T10:19:00.000-07:00

BP Plc, the British energy company in the midst of an oil spill crisis, agreed to sell some of its assets to Apache Corp for $7 billion to pay for one of the worst oil leaks in history. These assets include production and exploration facilities in Egypt, Canada and the US.

The $7 billion deal is part of BP’s plan of raising $10 billion by selling some of its assets. Apache will pay a cash deposit of $5 billion on July 30, 2010.

As of July 20, BP’s share price decreased 1.54% in New York. Earlier that day, the energy company reported that it would sell assets in Pakistan and Vietnam worth $1.7 billion.

The gruesome disaster in the Gulf of Mexico remains on the priority list of both British and American governments.

British Prime Minister David Cameron commended BP for its continuing efforts in plugging the leak and paying for the spill’s damages. On July 20, US officials reported BP’s latest step in stopping the spill – a cap that prevented oil from gushing out.

Fishing and tourism industries operating in the area around the Gulf have been devastated by the millions gallons of oil that hit marshes and beaches. Natural environments and habitats have been threatened and as a result, the Obama administration received negative feedback and ties with Britain were affected.

More sources:
http://finance.yahoo.com/news/BP-to-sell-assets-for-7-apf-3900764604.html?x=0&sec=topStories&pos=3&asset=&ccode=
http://www.google.com/hostednews/ap/article/ALeqM5g9wOfmmrQmVwnYqaM5OpN5B3mxXgD9H319B80

Fiat Makes Second Quarter Profit

2010-07-29T10:36:00.000-07:00

Fiat, the Italian automaker that controls Chrysler, returned to a second quarter profit due to improved sales of agricultural vehicles and equipment. The company also reported that it may raise its 2010 forecast later this year.

The carmaker reported a net income of $115.6 million (or €90 million) for the second quarter of 2010, whereas the company had a €168 million loss last year for the same period. Net revenues rose 12.5% to €14.8 billion. In addition to this, earnings before interest or trading profit, taxes, and one-time losses or gains more than doubled and reached €651 million, which significantly trumps the €359 million estimate of 11 business analyses gathered by Bloomberg.

Fiat produces cars under the Fiat, Alfa Romeo and Lancia names, as well as trucks, construction equipment and farming machines.

Revenues at agriculture and CNH construction increased 16% to €3.3 billion as improved sales in South and North America compensated for the weak markets in the former Soviet Union, Australia, and Europe, according to Fiat. Iveco trucks climbed 18.3% to €2.1 billion with the number of deliveries up 32% to 34,318 vehicles.

In a release, Fiat added that recovery in the lightweight commercial vehicle division compensated for the decrease in sales of passenger cars, especially in Germany and Italy, following a cease in European eco-incentive programs.

Nokia Rises After Report on Search for New CEO

2010-07-26T13:27:00.001-07:00

After the Wall Street Journal reported that Nokia Oyj is planning to replace current CEO Olli-Pekka Kallasvuo, the major phone maker’s trading numbers in Helsinki rose up to 5.2% July 20, 2010.

Nokia has approached several US-based technology companies for the position of CEO and will decide by the end of July, according to the Wall Street Journal report, which mentioned unidentified people who had known about the situation. Arja Suominen, Nokia’s spokeswoman, refused to comment.

According to Ulf Moritzen, who works with Hamburg-based Aramea Asset Management and helps manage Nokia’s shares, getting a new CEO will do the company good. He added that it is important for Nokia to react quickly to economic changes.

A new chief executive officer can help in delivering products that can compete with leading portable devices, such as Research In Motion’s Blackberry and Apple’s iPhone, especially when Nokia has not been able to provide a smartphone that has all the mass appeal that the iPhone possesses.

To protect its market share, the Finnish phone manufacturer has focused on cutting prices and sacrificing profits.

Nokia’s stock increased as much as 35₵ to €7.115, which is the biggest gain ever since May 10, 2010. As of 10:23 of July 20, the stock was up 3.45%. Before this rise, shares declined by 24% this year.

KKR Green Portfolio Project

2010-04-20T13:49:00.000-07:00

The Deal has released a video featuring KKR's Green Portfolio Project.

This video shows how KKR is realigning its investments to encourage more environmentally friendly practices while helping its portfolio companies cuts costs (not jobs). We should all definitely support this great trend!

Paul Allen

2010-04-15T14:58:00.000-07:00

Paul Gardner Allen was born on January 21, 1953. Along with Bill Gates, he is the associate founder of Microsoft. He is one of the richest people in the world and the founder and chairman of Vulcan Incorporated, which is his private asset management company. He owns three professional sports teams: the Seattle Seahawks of the NFL, the Portland Trail Blazers of the NBA, and the Seattle Sounders FC franchise in Major League Soccer.

Raised in Seattle, Washington, Paul Allen is committed in giving back to communities in the region he still calls home. He founded the Paul Allen Institute for Brain Science and The Paul G. Allen Family Foundation, which supports the work of effective nonprofit organizations involved in arts and culture, community development and social change, economic relief, education and youth engagement, and scientific and technological innovation.

• He has donated to organizations that focus on human and health services, and toward the improvement of technology and science.
• The Paul G. Allen Family Foundation was founded in 1986 to disseminate most of his donations. Through this body, Paul Allen confers approximately $30 million in grants every year. About 60% of the organization’s finances go to non-profit organizations in Washington and Seattle; twelve percent goes to Portland, Oregon. The other 28% is disseminated to other locales within the Pacific Northwest.
• Allen has donated $900 million of his money, as of 2007. Allen also contributes through other charitable projects known as "venture philanthropy." The most famous of these projects are Experience Music Project, the Science Fiction Museum and Hall of Fame, the Flying Heritage Collection (airworthy vintage military aircraft) and the Allen Telescope Array.
• Allen has donated money in both Washington State University and University of Washington. In the late 1980s, Allen donated $18 million to construct a library named after his forebear, Kenneth S. Allen. He donated $5 million in 2003 to establish the Faye G. Allen Center for Visual Arts, named after his mother. Allen was also the top private contributor, with $14 million in donations to the "Paul G. Allen Center for Computer Science & Engineering," which was completed in 2003.
• Throughout the years, Allen has contributed millions of dollars to the University of Washington Medical School. The Foundation awarded $3.2 million for prostatitis research in 1997, followed by an additional $1 million grant in 2002. More recently, the Foundation contributed $5 million for an early cancer-detection project by the Fred Hutchinson Cancer Research Center.
• On November 19, 2008, Allen appeared at the Experience Music Project/Science Fiction Hall of Fame to present the second annual Founder's Award for musical achievement.

Private Equity looking ahead

2010-03-31T11:51:00.000-07:00

As the recession enters its second year, the Private equity industry is looking to 2014 to deal with the buyout spree of the past years. In this brief but incisive article by the Wall Street Journal's Liam Denning, the situation of the private equity industry know faces solid issues, not ambiguities.

Private Equity's Problems Fade From Red to Gray

Henry Kravis Prize awarded to Pratham

2010-03-26T09:18:00.000-07:00

KKR, led by Henry Kravis, does more than just broker some of the world's biggest deals. Every year, the Henry Kravis Prize in Leadership recognizes innovations in nonprofits. Pratham, India’s largest education nonprofit, was awarded $250,000

Pratham has reached 34 million children across India through its Read India program, which works with governments and communities to improve the reading, writing, and basic arithmetic skills of children aged 6-14.

“We are delighted that a very high profile selection committee picked us after a thorough process without involving any of the organizations in the running, Of course, the award is for what we have done in the past and there are many bigger challenges ahead,” said Madhav Chavan.

Past honorees for the Henry Kravis Prize include Roy Prosterman, founder of the Rural Development Institute; Fazle Abed, founder of BRAC, the Forum for African Women Educationalists (FAWE), and Dr. Sakena Yacoobi, founder of the Afghan Institute of Learning.

Young Turks Comment on Health Care Bill

2010-03-24T09:04:00.000-07:00

President Barack Obama just passed a landmark healthcare bill, but most people are still in the dark about precisely what the bill entails. Cenk Uygur of the progressive internet talk show The Young Turks weighs in on the pros and cons of the health care bill, and says that supporters' celebrations are premature; there are still some serious flaws in the bill.

via videosift.com

Kirk Kerkorian

2010-03-22T09:50:00.000-07:00

Kirk Kerkorian was born on June 6, 1917, in Fresno, California. Instead of finishing high school, he chose to drop out in order to help his Armenian family. Eventually, he followed his brother’s footsteps and became a Pacific amateur welterweight boxing champion.

In 1939, he was hired to install wall furnaces for 45₵ an hour. Soon after, he developed an interest for aviation. Without having the means to pay for flight lessons, Kirk Kerkorian went to the Happy Bottom Ranch in the Mojave Desert to clean barns and milk cows in exchange for his lessons. After receiving his commercial pilot’s license six months later, Kirk Kerkorian went to Montreal, Canada to apply for the Royal Air Force. He was then hired to do the dangerous task of delivering Canadian-built bombers to Scotland. For the span of one and a half years, he successfully delivered 33 planes and traveled to four continents.

By integrating the Bellagio and Mirage properties in 1999, Kirk Kerkorian brought to life three of the most profitable gambling resorts in Las Vegas. Currently, he remains as the largest shareholder of the Los Angeles based investment company, Chrysler. He is also one of the major stockholders at the Metro-Goldwyn-Mayer Corporation.

In addition to being the richest Armenian in the world, Kirk Kerkorian is also notable for his feats in philanthropy. His charitable foundation, the Lincy foundation, was named after his daughters Linda and Tracy. So far, the organization has extended its donations to cultural center renovations, highway reconstructions, city beautification in Armenia, as well as to Armenian Churches and to the United Armenian Fund. For the past few years, the Lincy Foundation has granted a total of $165 million worth of donations to the Armenian government. The donations were used to help overcome the damage that was brought about by the earthquake in Spitak.

Avoiding Plastic Blunders

2010-03-08T10:06:00.000-08:00

Anyone can make mistakes. Mistakes are a part of human nature and in this technology driven world of ours, some mistakes definitely have bigger repercussions than others. Making mistakes with regards to credit is more often the blunder that everyone has committed over the past couple of years. The recent global recession for example, is something that came to be from poor credit management.

But despite these, credit cards and other kinds of borrowing still fuel a lot of people’s lives nowadays. It is because of this dependence that one needs to keep a sharp eye on their credit card usage.

Some of the basic mistakes credit cardholders must avoid to avoid hurting their credit scores include:

• Asking banks or other lending institutions to lower the credit card’s limit. This is okay for people who do not have balances on their cards. In fact, lowering one’s credit limit will enable the user to be more in control of their credit spending. But when the card is full of outstanding balances, a lower limit will lessen the gap of what you owe and what you have.

• Making late payments will always be damaging to one’s credit scores. Passing out payments for a few days or worse, not making due payments at all will seem to be a sensible short term solution but will only hurt one’s scores in the future.

• Paying one credit card with another. Credit in payment for credit will always be a bad thing to do and this will reflect in the credit card scores.

• But so too is applying for a new credit card when one already possess many. More credit cards mean more temptations that will make one spend. More cards mean more rates to be handled; more balances to be paid out and more damage to one’s credit score in the future.

Avoiding all of these basic blunders is very important to be able to successfully manage credit accounts and not hurt the user’s credit score in the future.

Debit Cards and how to Properly Manage Their Usage

2010-03-05T08:56:00.000-08:00

Responsible financial management is important in today’s world especially since consumers are faced with a variety of choices that they can use to go about their spending and needs. With credit cards, debit cards, and ATMs being offered by banks and financial institutions today, people need to know what to choose from these and be able to take full advantage of whatever the plastic cards offer.

Among all of these, debit cards seem to be the best avenue to take since the user is not borrowing but is rather spending money he saved for his purchases. Still, users need to be fully informed about these debit cards and should use them wisely to avoid falling into bad financial situations like large transacting fees and debts.

First thing that users need to know are the types of debit card that banks and other financial institutions might be offering. Some charge fees per transaction while others substitute their ATM cards for debit cards. Knowing the differences and fees involved will make consumers more informed on how and when it is fully advantageous to use their debit cards.

Next is to hold on to receipts from all debit card transactions. This is useful when reviewing monthly statements and making sure that charges one did not make are not included and shouldered by one’s bank account.

Other basics with debit card usage include memorizing the Personal Identification Number or PIN, and not just writing it down on a piece of paper or worse, on the card itself. Keep debit cards, or all cards for that matter, in safe places. In cases of lost and stolen cards, report immediately to your bank so that the lost card may be deactivated and a new one can be issued out. Also, make sure PINs are not basic numbers such as birthdates or telephone numbers.

Lastly, always check the balances of the cards in one’s possession. This is the very basic step for responsible financial management. Some debit cards allow you access to funds that you may have set aside to take care of a check that has not been cleared yet.

Hobson’s Financial Resolutions for 2010

2010-03-03T14:01:00.000-08:00

Saving a significant yet manageable amount of money in a savings account might be one of the most important ways to enhance our financial standing in the future. However, that is not the only way to secure a clear financial future.

Mellody Hobson, the current president of Ariel Investments and personal finance contributor of “Good Morning America,” lays out some of the most sensible finance resolutions we can make for 2010.

Hobson thinks that investing in the stock market might be a good idea to start the year. According to her, the stock market was able to recover from hitting rock bottom last March 2009. In fact, the stock market was reported to have gone up an astounding 57% earlier this year.

Apart from that, Mellody Hobson also encourages people to consider reviewing the accuracy of their credit scores. According to her, credit reports are one of the most important items in each person’s financial life. Credit scores can bring most people bigger interest payments when getting loans for homes or new cars. In addition to that, Hobson also says that a person’s credit score can either make or break his/her bid for his/her dream job. However, to achieve all those, people need to give more importance to the accuracy of their credit scores. Mellody Hobson says that around 80% of credit reports are flawed. Major credit reporting agencies including Equifax, TransUnion, and Experian are not responsible for ensuring the accuracy of each person’s credit reports. Therefore, the owner of the credit report must take the responsibility himself.

In addition to those two, Mellody Hobson also advises people to prepare themselves for the possibility of rising minimum payments. Due to the new legislation, most credit card issuers including JP Morgan, Citibank, MBNA, and the Bank of America are increasing the amount of minimum payments.

Debit is the Way to Go

2010-03-01T09:30:00.000-08:00

With the US and the global economy still feeling the tail-end of the recession, many consumers have kept mum with regards to their spending and have tried their hardest to keep all of their finances inside their households.

Together with frugal spending and saving, more and more people are finding the advantages of using debit cards more appealing than using their counterparts, the credit cards. It is true that debit cards offer users a more responsible way of spending and is more convenient to use than most credit cards. But when used improperly, just like credit cards, they can seriously hurt users financially. And because debit cards are more loosely protected than credit cards, as they come with schedule of fees different from that of credit cards, knowing basic information about debit cards and their usage will make for better and responsible spending. Here are some things to remember for users with debit cards and frequently use them in their transactions.

Basic in the list is to know and understand everything written in the bank’s terms and conditions with regards to their debit card services. Users should take note the schedule of fees that their banks give. They should know the important rates such as basic transaction fees, over-limit fees, and cash-withdrawal fees among others.
Also, they should carefully review every billing statement that the banks send them. They should cross-check them with the transaction receipts to make sure that no dubious transactions are being debited to one’s name.

Since a debit card is always attached to an existing bank account, debit cards should be protected with utmost care and not just placed anywhere open and unsafe. PIN numbers should also be formulated in a way that not even the smartest thief or someone the user knows can figure them out.

Also, be aware of the rewards program that banks have for using their debit cards. Using debit cards is indeed a more responsible way of financing transactions than debit cards. But like credit cards, it should also be given the proper attention and due diligence that it deserves.

The Things People Should Avoid Doing During Economic Recessions

2010-02-26T09:11:00.000-08:00

People should always be conscious of their spending habits in order to avoid making mistakes that can jeopardize their financial status. Although this should become a lifelong habit, it becomes more applicable during times of economic recessions.

Serving as a cosigner of a loan is one of the most risky things a person can do when it comes to personal finance. Becoming a cosigner entitles the person to make the schedule payments once the owner of the loan fails to do so. A cosigner may lose more than a great amount of money in order to pay the loan.

Although it might be rare for most people to purchase a home during recessions, there are some people who actually do. There are some individuals who choose to avail an adjustable rate mortgage when purchasing a home. This might make sense in some cases since most people would opt to choose mortgages that have lower interest rates. However, doing this during recessions is a financial risk. People should be aware that these interest rates are more likely to rise as the economy recovers. Homeowners might find it difficult to keep up with the increasing rates.

People are also discouraged from getting a new car loan or a new home loan or any similar obligation during recessions. Although it’s okay to avail of these loans when the economy is in a good condition, it is not advisable to do so when the economy is in the middle of turmoil. The borrower might get laid off or in some way or another might get affected by the downturn in the economy. Availing of these extra obligations might add complications to the person’s financial situation in the near future if the economy fails to recover in a long time. People should be cautious about taking on additional debts in the midst of a recessionary environment.

Spend Now, Pay Now

2010-02-25T09:49:00.000-08:00

It is hard being levelheaded most of the time especially when being a little reckless can be more fun and enjoyable. But as much as many hate to say it, irresponsibility will soon pay back in the future and a little sacrifice now will not hurt your financial standing in any way.

The same principle also applies to credit card usage. People have the tendency to excessively indulge and overuse these plastics without knowing the long-term repercussions that await them. It will take a whole lot of discipline and presence of mind to control credit card usage especially since it offers a great many short-term rewards and satisfaction upon usage. Before being enthralled by the convenience that credit cards offer, one should always keep in mind that using them demands a huge responsibility. Here are some tips to always be on track with credit card usage.

1. Diligently settle balances monthly and avoid being tardy with them. Paying debts is not the most exciting thing to do but paying on time almost always outweighs the hassle. Creditors and banks know that by giving you credit, they are investing their money so a person can purchase what he needs. Needless to say, they will expect to be paid back in return and will take action if ever they are not.

2. Do not use one plastic to bail on another. Balances on credit cards should be paid with one’s own funds and not with another credit.

3. Don’t lend your credit card to family and friends. One balance is already something; splitting it to two or three monthly liabilities will only be a big blow to one’s credit score.

4. Keep receipts and other transaction proofs so that when billing statements arrive, cross-examining and validating them will be easier and unnecessary bills can be avoided ASAP.

5. Lastly, never borrow money that eventually cannot be paid off.

Financial Tips for 20somethings

2010-02-24T11:38:00.000-08:00

Most of the time, twenty-something people don’t see their money as resources for wealth building. Instead of saving, these people often use money to buy things or spend money to impress friends. They should know however, that the best time to start learning good money-handling habits is during their 20s. The chances are the habits they develop during these times are more likely to financially affect their future.

People in their twenties should consider developing a savings plan. Starting an emergency savings account would be a smart move for them. It is not necessary for them to place big amounts of money all at once. They can start small and set aside around 10% of their total income and deposit that amount into their savings account. So in case they experience financial crisis, they can always have their emergency savings account to fall back on.

Although they might think that it’s too early to start thinking about retirement, it might be a good idea to consider doing so. Everyone knows that having a Social Security account is important. However, not all of them know that it is not entirely advisable to depend on Social Security alone after retirement. In addition to their personal Social Security account, they might also use a portion of their salaries to contribute to their employer’s retirement savings account.

Apart from these two, twenty-something people must learn to cut down or minimize excessive spending. When it comes to practicing good spending habits, differentiating the things you need from the things you want before buying is always the golden rule. Buying tons of stuff might leave you with more liabilities than assets.

In addition to this advice, people in their twenties should develop the habit of paying their bills on time. Most of them might know by now that when bills become delinquent, will not look good on their credit reports. Apart from that, they may also pay for additional fees and higher interest rates if they fail to pay their bills before the due date.

The Goldman Sachs Group

2010-02-22T10:58:00.000-08:00

The Goldman Sachs Group operates as a major bank holding company that deals with securities services, investment banking, and investment management. The firm was established in 1869 by a German Jewish immigrant known as Marcus Goldman. A couple of years later, he was joined by his son-in-law Samuel Sachs. As a result, the firm’s name was changed to Goldman Sachs. The firm was able to make a name for itself by initiating the use of commercial paper for entrepreneurs.

In 1896, Goldman Sachs was invited to join the New York Stock Exchange.

During the preliminary years of the 20th century, the group was able to play a part in setting up the initial public offering market. It became one of the first companies to hire employees with MBA degrees from the most prestigious business schools. In addition to that, the group was also able to manage one of the biggest IPOs that still exist to date, such as the Sears, Roebuck and Company in 1906.

Nowadays, the group’s headquarters are located in New York City’s 85 Broad Street lower Manhattan area. The group also maintains a secondary office at 30 Hudson Street, Jersey City, New Jersey as well as offices in global financial centers.

Goldman Sachs provides its clients with advices regarding acquisitions and mergers as well as asset management and underwriting services. The group serves as a primary dealer in the US Treasury securities market.

Earlier this year, Goldman Sachs was able to announce strong quarterly earnings. The group’s profits was pushed forward by revenues totaling $6.56 billion in its fixed-income, currency and commodities unit. All in all, the group’s revenue was able to reach a total of $9.43 billion, showing a 13% increase from the first quarter of last year’s recorded review.

Handling Your Money Wisely

2010-02-16T10:39:00.000-08:00

The value of our money somehow depends on how it is used. Currencies may change but money’s main uses often remain constant. Money is used to purchase a house, send a child to school, as well as to save up for a comfortable life after retirement.

Seeing money only as a spending resource is one of the biggest financial mistakes people make. Although a majority of us may not be aware of this, practicing the proper way of spending money might just be as difficult as earning it.

The reason why most of us panic during difficult financial situations is because a majority of us do not have an emergency fund to fall back on. We have probably spent everything we have earned for the past few months or even years. One of the ways to guard yourself during the occurrence of depressed economies, sudden illness, and job layoffs is to set aside a certain amount of money that is sure to last between three to six months.

It is important to start an emergency fund and build up on your savings to insulate yourself from financial distress. Things like unemployment as well as home repairs and expensive car maintenance can consume a huge amount of our money and most of our monthly salaries cannot cover these additional expenses all at once. So instead of using money to buy things you don’t really need, it might be a smarter strategy to deposit that money to an emergency savings account.

Apart from saving, it is also advisable to prevent yourself from having any extra expenses by acquiring debt. Most of us find it easy to purchase thing through credit. Instead of using credit cards to buy random things we don’t need, credit cards should be used only for immediate expenses.

Achieving Long Term Financial Security

2010-02-12T13:57:00.000-08:00

The idea of saving up for a life after retirement is an often ignored by most people under 30. People in this age bracket have this unfortunate propensity of not having this foresight. This is understandable as some are still set on saving up enough money to buy the things they need to settle down. While people are so caught up in achieving all these short term goals, it is not a smart idea to set aside plans for achieving a secure financial future especially after retirement when one can no longer work to earn a stable income.

However, young people do not need to sacrifice their dream of buying their own houses or cars in order to live comfortably after retirement. All they need to do is to practice how to handle money the right way.

Apart from gaining balance and self control, it is important for people to recognize their biggest and most important financial assets --- their abilities and skills that enable them to work and earn an income. Investing in your own self is sure to pay off in the future. And just like all financial assets, people should always seek for ways to upgrade themselves while they are still at the earliest stages of their careers. People can increase their value as an employee by constantly upgrading their knowledge and skills.

As you work your way up the career ladder, your regular income goes up with you too. When this happens, most people feel that they are obliged to live a lavish lifestyle. Instead of saving up all the extra money they earn they feel entitled to live the good life. There is nothing really wrong with that. However, they must keep in mind that they are not required to upgrade their lifestyle just become their paychecks have doubled in amount. People must consider this piece of financial information: raising the current mode of lifestyle is very easy once people start earning bigger salaries. There is a caveat though: becoming accustomed to an affluent lifestyle brings with it greater financial demands, making saving for the future a chore. It is also very difficult to lower a standard of living once someone gets accustomed to it.

The Costs of Home Equity Loans

2010-02-10T11:40:00.001-08:00

Several homeowners might find a home-equity loan as a convenient way of borrowing money. As compared to the interest rates that are offered by most credit cards and other types of loans, the home-equity loan actually offers a more appealing interest rate. In addition, a home-equity loan also entitled the borrower to deduct the interest rate when filing their taxes.

However, people should not assume that all home-equity loans are the same. It takes time and effort to look for a home-equity loan that offers competitive rates, terms, and other extra fees. People need to keep more than a few things in mind when looking for the right home-equity loan.

Before a person goes out to buy a home-equity loan, he/she must consider that leveraging his/her home is a big decision. Knowing the different types of home equity loans is important.

Interest is the single largest cost that comes with a majority of home-equity loans. Before choosing a loan, everyone should consider first that the APR or the annual percentage rate of a traditional home-equity loan is calculated differently from a home-equity line of credit. The home-equity loan has a fixed interest rate while the home-equity line of credit has a variable interest rate. The APR for a majority of home-equity loans includes the costs of starting the loan. On the other hand, the calculation for the APR of a home-equity line of credit is based on the interest rate of the loan. People can’t make a direct comparison of the variable-rate loans and the fixed-rate loans due to these differences.

Apart from interest rates, people should also be wary of hidden fees. Borrowers should also consider the other expenses that are associated with a loan. Getting a home-equity line of credit or a home-equity loan entitles the borrower to pay the same fees that come with a mortgage. Therefore, they should also consider the closing costs apart from the interest rates.

How to Bounce Back After Losing a Job

2010-02-05T14:33:00.001-08:00

No matter how much you hate your job, losing that job or getting fired from that job can be devastating. Given the circumstances, its okay for you to mope and wallow in your emotions for a while. But just like all things, there should be a time limit for that. You have to get back to your feet and eventually face the reality of your current financial state.

You can start by filing for unemployment as soon as you can. Then you can move on to computing how much money you have left and how much money you need to pay for certain expenses. Unlike most jobs, things like the rent, bills, and other expenses are not temporary. Employed or unemployed, you have to deal with them immediately before they start to become serious problems.

Although most people might find it sad, unemployment might only lead you to pursue the things you really want. It’s essential that you go on and look for another job or another career that actually allows you to do what you want. Pursuing a career path that compliments your inner passion motivates you to work better, thus minimizing your chances of getting fired again.

However, before you can do that, you must first take the time to think about what you really want. Once you figure that out, the only thing left for you to do is pursue it. One thing most of us fail to consider is that while you think you need a job to cover up your expenses, that job you were so passionate about might just need you as much too.

You must also reconsider your priorities once a new company hires you. You might want consider fattening up your savings account this time. A savings account will serve as your safety blanket not only after you lose a job but also during financial crisis and recessions.

The Top Five Insurance Policies

2010-02-01T09:45:00.000-08:00

It is advisable for people who want to create a solid personal financial plan to consider what their most important assets are and find ways to guard them. This is one of the most important steps in formulating a sound financial plan. Acquiring the right insurance policies is one of the most viable ways to help safeguard earnings and possessions. The five most essential insurances every person must have are a Long-Term Disability Insurance, a Life Insurance, a Health Insurance, a Home Insurance, and an Automobile Insurance.

The mere idea of having a long-term disability is in itself crippling. Most people find the prospect very frightening that they tend to ignore the idea completely. Although it is normal for people to hope that something as terrible as having a long-term disability won’t happen to them, relying entirely on hope isn’t such a good idea. For financial stability reasons, it is advisable for people to look for a disability policy and make sure they can continue to pay for their immediate needs and other expenses even if they can’t work anymore.

A Life Insurance on the other hand would benefit people who are financially dependent on the person who is getting the insurance. These people might include the person’s parents, spouse, and children. Apart from these two insurances, it is also necessary for everyone to acquire a health insurance. A health insurance can cushion them from the costs of medical care, medical bills, or even medical consultations in the future.

A Home Insurance as well as an Automobile Insurance can help people in several situations such as going though home replacements, home repairs as well as car repairs and road accidents. Acquiring an automobile liability is advisable for everyone even for folks who are driving old cars.

The Berkshire Partners

2010-01-27T10:06:00.000-08:00

During the early part of the 1980s, Berkshire Partners was established by a group of five individuals with a goal to create a private equity firm that is based on hard work, successful relationships, analysis, as well as the collective participation of all individuals involved in the dealings. This founding vision has been preserved and continues to influence the firm’s many successful operations.

Led by a set of responsible private equity investors, Berkshire Partners adheres to its mission of producing investment returns that constantly places them at the top quartile of competitive but analogous private investment firms. The group also aims to provide the management teams for several portfolio companies they handle with all the right resources necessary to grasp the business’ full potential. In line with these, Berkshire Partners consistently strives to uphold the highest of ethical standards by operating in an honest and fair manner. It formulates its decisions based upon selected critical factors like analytical thoroughness, open debate, as well as logical judgments. The firm maintains its commendable culture of teamwork, detailed and harmonized decision making while continuously supporting the development of its staff and encouraging each colleague to constantly search for balance in life with regards to their commitments and responsibilities for their families and loved ones. The firm also pushes for community service and other external interests. All these statements are symbolic of the firm’s philosophy. Holding on to these values help the firm attract and secure managers for their portfolio companies and the entire Berkshire staff.

Operating as an active investor, the Berkshire Partners firm takes on the responsibility to create well researched investment decisions that would represent their investors. The entire Berkshire team works towards attaining well grounded decisions in order to provide only the best services possible for their management teams.

http://www.berkshirepartners.com/role.shtml

Silver Lake’s Portfolio

2010-01-25T09:35:00.000-08:00

Formed in 1999, Silver Lake Partners, a Menlo Park, California-headquartered firm, has earned a named for itself as the leading private equity resource for the technology business. The firm is continuously seeking out more mature technology companies that are able to rule over their sectors, mostly those investing between $100 and $500 million. In addition to this, the firm has operating offices in London, New York and San Francisco.

Silver Lake’s holdings involve various big-time firms in the technology industry, mostly coming from its December 2000 connection with the equity recapitalization of web-based brokerage Datek. Investing for Datek eventually resulted to a stake in Ameritrade, which merged with Datek in September of 2002 and further merged with TD Warehouse USA. As a result of this, the company became TD Ameritrade.

Silver Lake Partners’ participation in NASDAQ (also known as the National Association of Securities Dealers Automated Quotations) is likewise a result of its Datek investment. This came about when Datek’s Island ECN was put up as an independent business. By September 2002, Island was fused together with the Instinet Group’s trading network called Instinet. The network was retained when NASDAQ bought the Instinet’s sister network INET. Later, in a deal that closed in February of 2007, Nomura Holdings purchased Instinet.

A number of the many investments of Silver Lake Partners include these business leaders:

• Serena,
• Network General,
• Business Objects,
• SunGard,
• Flextronics,
• Avago,
• Seagate,
• Thomson,
• UGS (presently known as software company Siemens PLM Software),
• Gartner,
• NXP and IPC.

Through TPG Capital from Texas Pacific Group, Silver Lake just added Sabre Holdings and Avaya to its portfolio companies.

The firm employed former Compaq and MCI chief executive officer Michael Capellas in October of 2007 as one of its senior advisors.

Meryll Lynch

2010-01-22T08:51:00.001-08:00

Meryll Lynch & Co is an international financial services firm that provides investment banking and advisory services, asset management, wealth management, insurance as well as capital markets services. Based in the thriving city of New York, the firm has grown big enough to occupy the entire 34 stories of the Four World Financial Center in Manhattan.

The firm was founded by Charles Merrill and his friend Edmund Lynch way back in the early 1900s. During its early years, the firm made a number of successful investments, including its acquisition of the Pathé Exchange.

In 1940, the firm joined with two other firms, namely the E.A. Pierce & Co and Cassatt & Co. After the merger, the firm became known as Meryll Lynch, E.A. Pierce, and Cassatt. The following year, Meryll Lynch became the first company to ever publish an annual fiscal report on Wall Street.

The firm was officially incorporated after Edmund Lynch’s death in 1952 and a few years later, Meryll Lynch successfully turned itself into the largest securities firm in the world. In 1958, the firm’s name was changed into Merill Lynch, Pierce, Fenner & Smith and at the same time, became a significant member of the board of the New York Stock Exchange.

In 2008, the firm was acquired by the Bank of America, one of the world’s biggest financial institutions. As a result of the merger, it has become the largest brokerage firm worldwide. It has also become a leading provider of international corporate and investment banking services that includes global high yield debt, commercial lending, global equity, as well as global M&A. As a team, Meryll Lynch and the Bank of America have become a global leader in retail brokerage, wealth management, and private banking.

The firm now carries the name Bank of America Merrill Lynch.

Thomas H. Lee

2010-01-11T10:30:00.001-08:00

Thomas H. Lee is a Boston, Massachusetts based private equity firm that deals with identification and acquisition of substantial ownership positions in large companies that are growth oriented. They work on these companies in the hopes of securing a venue where they can add strategic and managerial expertise that allows them to create value for their business partners. Considered one of the most successful private equity firms, Thomas Lee was able to raise an approximate of $22 billion worth of equity capital while placing investments in more than a hundred business establishments, with a cumulative purchase price of over $125 billion. In addition to that, the firm also continuously seeks to build more companies that possess a lasting value while generating superior returns for their fellow operating partners and investors.

This leading equity firm focuses on companies that are able to capitalize on certain key competitive advantages in order to boost revenue as well as to increase free cash flow by means of market growth, share gains, market consolidation and through product line expansion. A few of the targeted companies’ identifiable strengths include dominant market share positions, well recognized brand names, unique product features, manufacturing, as well as other cost advantages.

Thomas Lee emphasizes the importance of free cash flow as the main gauge of profitability and that it has a considerable capability in terms of developing the business of its portfolio companies. The group works together with its portfolio companies in order to enhance the growth of free cash flow by means of developing their market potential and product lines, as well as in establishing effective systems, increasing resources, pursuing acquisitions and changing managements. Thomas H. Lee is also in the lookout for the ability to advance core operations through increased efficiencies. The firm’s investment philosophy and growth oriented strategy underscores the general appreciation in the enterprise value of a purchased or acquired company as compared to the mere repayment of acquisition debts.

CVC Capital Partners

2010-01-05T11:29:00.000-08:00

CVC Capital Partners is one of today’s leading global private equity and investment advisory firms. Established way back in 1981, the firm now maintains a network of 19 offices all over Asia and Europe, as well as in certain parts of the United States, in addition to its main headquarters in Luxembourg.

CVC stands distinctively in the midst of the private equity industry. This is mainly due to the extensiveness of its office network, as well as to the length of time it has been active in several countries, combined with the depth of the knowledge of its investment professionals. CVC Capital Partners is armed with the capability to combine and deliver vast cross border resources in order to obtain high quality companies and help them realize their full potential. The firm’s local knowledge and expertise emphasizes the success that it has attained throughout the 27 years of its existence.

The firm places more of its focus towards establishing businesses over the long term, while typically holding investments for five years or more. The firm’s funds possess a variety of portfolio investments. CVC Capital Partners collaborates effectively with the management teams of their portfolio companies, as well as with industrial advisors and appointed non-executive directors, in order to develop strategies that would enhance their portfolio company’s overall performance while leaving it to realize a lasting value.

The firm believes that through an effective combination of ownership and management, the company becomes more capable of creating benefits for the whole of its stakeholders, employees, customers, suppliers, as well as to the wider community.

CVC Capital Partners’ investors receive distributions from the gains produced from the firm’s various investments that include public and corporate pension plans, insurance companies, financial institutions, university endowments, and even through investments from individuals.

The Carlyle Group

2010-01-04T14:11:00.000-08:00

With a total of more than $84.5 billion funds under its management, the Carlyle Group has become one of the largest private equity firms worldwide. The group takes on a global vision and combines it with local insight that relies on a top-flight team of more than 495 investment executives and professionals. These personnel operate in offices scattered in over 20 countries, including Europe, North America, Asia, the Middle East, Australia, and Latin America. These placements give the Carlyle Group a greater global foothold.

The Carlyle Group focuses its investments on certain sectors. These include automotive and transportation, aerospace and defense, consumer and retail, financial services, energy and power, healthcare, infrastructure, industrial, real estate, technology and business services, as well as media and telecommunications.

In the mercurial and competitive field of the industry it specializes in, the Carlyle Group has a decisive edge over its competitors in that it can skillfully utilize the local insight of its investment executives and professionals. As a result of the Carlyle Group’s extensive collaboration with its investment disciplines that originates from deal sourcing, the firm now has a broader view of more opportunities in investments in addition to a more profound level of expertise.

The firm’s team of investment professionals and executives includes a total of 181 MBA holders, 31 JD holders, as well as six PhD/MD holders coming from the most prestigious universities around the world. The Carlyle Group stands out from other private equity firms due to its global presence and vast knowledge regarding the local market.

Headquartered in Washington, DC and having a total of more than 890 employees, the Carlyle Group manages a total of 64 funds across 20 countries. Its operations adhere to the firm’s conservative investment philosophy, which pushes the firm to strive for consistency in all its undertakings.

Apax Partners

2009-12-30T09:34:00.000-08:00

Apax Partners LLP serves as the holding company in behalf of the worldwide Apax partnership, which in turn serves as the lead investment adviser to the latest Apax Funds. The firm is an independent private equity advisory firm with operations worldwide. The firm technically places its investments in five different growth sectors including retail and consumer, media, technology and telecommunications, healthcare, and financial & business services.

The firm hands over capital for a number of important investors such as private pension funds, university endowments, insurance companies, and other financial institutions. It also purchases both minor and major stakes in huge companies that possess a strong and established position in the market and a good potential to expand.

Moreover, the firm also finances first-rate management teams in order to facilitate well-organized and sustainable businesses that possess a commendable track record of progress as a result of investing in research and development, sales, export, as well as employment.

The firm aims to help companies, management teams, and portfolio company employees to release their full potential in order to generate more returns for the vast number of individuals whose investment plans and pension funds are handed over to the firm’s funds.

The Apax Partners firm focuses its investments in large companies across the five specific aforementioned global growth sectors and has done so for the past 25 years. Staffed by local nationals, the firm’s offices were completed within an average of 13 years. The firm’s advantage in terms of finding new and fresh investment opportunities comes from its close relationships with tough decision makers in every country or location they operate in.

Currently employing an average of 300 workers, Apax Partners is among the small groups involved in the private equity industry to have effectively embraced the challenges of today’s issue of globalization.

Warburg Pincus LLC

2009-12-23T11:20:00.000-08:00

Actively operating as a private equity and venture capital firm, Warburg Pincus LLC places its investments in all stages of a company’s growth, from the primary founding startups, to early stage financing, to growth equity investments, as well as in developing companies, recapitalizations, restructurings, and the management buyouts of mature businesses.

The Warburg Pincus firm also invests in the changes made within control leveraged buyout transactions, minority private investments made in public companies, divisional spinouts of noncore corporate assets, as well as transactions made in favor of special situations while putting emphasis on the acquisition of undervalued companies.

In general, the firm typically invests in healthcare, financial services, media, telecommunications, energy, consumers and industrials, as well as in real estate sectors. In terms of life sciences and healthcare, the firm aims to invest in schemes that offer valuable services such as medical devices, healthcare services, specialty pharmaceuticals, and biotechnology. On medical devices, the firm shifts more of its attention to specific concerns including interventional cardiology, diabetes, orthopedics, as well as urology or gynecology. As for the investments made in financial services, Warburg Pincus places it investments primarily in private banking, specialty and consumer finance, payment and transaction processing companies, financial technology exchange, insurance companies, asset and wealth management, and in depository institutions.

With all these investments, the firm has become a global leader in the industry. Throughout its track record of more than 40 years, the firm has successfully invested over $29 billion in more than 600 companies in 30 countries all over the globe.

In an effort to create sustainable value, the firm has continuously partnered with superior management teams. As a result, Warburg Pincus has helped many companies formulate strategies, conceptualize, as well as execute creative financing structures, and employ talented and knowledgeable executives and professionals.

Madison Dearborn Partners

2009-12-16T10:32:00.001-08:00

The Madison Dearborn Partners is a private equity firm founded in 1992. Based in Chicago, Illinois, the firm offers specialized services that are relevant in the leveraged buyout of either privately held or publicly traded companies, as well as subsidiaries of a larger company, recapitalizations of closely held or family owned companies, acquisition financings, restructuring of balance sheets, and growth capital investments in highly developed companies.

Previously, the founders of the firm completed private equity investments for the First Chicago Bank. The firm’s chairman, John Canning, Jr., also holds a position as a minority owner of the Milwaukee Brewers baseball team.

Headed by a group of prominent visionaries, the Madison Dearborn Partners teamed up with Michael Eisner’s Tormante investment company on 2007 in order to purchase the baseball card maker Topps Company. For two consecutive years, the firm successfully completed a bunch of publicly traded companies including CDW, LA Fitness, Asurion, Nuveen Investments, Univision Communications, VWR International, Sorenson Communications, and the Yankee Candle.

On June 30 of the same year, the Bell Canada Enterprises (or the BCE) announced that the company entered into a definitive agreement that allowed Bell Canada Enterprises to be purchased with adherence to a certain plan of arrangement made by an investor group headed by the Ontario Teachers’ Pension Plan’s private investment arm, the Teachers Private Capital, as well as the Providence Equity Partners Inc., and the Madison Dearborn Partners. The all-cash transaction was valued at a total of C$51.7 billion, or US$48.5 billion, with the inclusion of C$16.9 billion worth of preferred equity, debt, as well as minority interests. The agreement was then approved on September of 2007 during a special meeting attended by a group of shareholders. The agreement was decided upon by more than 97% of the total votes casted by the holders of preferred and common shares.

Jumpstarting Your Investment in Stocks

2009-12-14T10:56:00.000-08:00

While in a time or two, other investment vehicles have outperformed stocks, it has been proven to be the most reliable. What type of stocks is right for you? There are several options: individual stocks, index funds, mutual funds, index funds, ETFs, domestic, and foreign. Before choosing, here are a few pointers to serve as guide for the inexperienced and experienced investor alike.

Personality type
Different personality types are well-suited for particular types of stocks. Generally, there are three kinds of investors – risk taker, risk averse, and middle. If you are not inclined to risk and want to stay safe and sure, go for mutual funds or index funds. Because these are well-diversified and contain different stocks, going for them reduces risk and does not entail individual stock research.

Time factor
Deciding to invest in stocks, funds, or both depends on how much time you are willing to dedicate. Individual stocks are the most time-consuming because investing in them requires research, judgments on earnings, management, and future prospects. Mutual and index funds are less time-consuming since the fund manager picks stocks for you. Index funds are even simpler since they move according to type of market or company they track.

Diversification
Do not invest in only one type of asset. It is potentially disastrous for your portfolio. Spread your assets across different sectors such as real estate, commodities, insurance, etc. Consider diversification across asset classes as well.

Recommended portfolio
For beginners: a portfolio for the inexperienced would consist of a couple of index funds. One index fund to track the broad market and one to give foreign exposure will be a boost.
For individual stocks: a portfolio composed of 12-20 carefully selected individual stocks will give you diversification and is just enough for you to follow regularly. For those who do not have or do not want to invest time on following many stocks, a portfolio mix of individual stocks and index funds is favorable.

The 10 Commandments of Sound Investing

2009-12-07T10:42:00.000-08:00

Like the Ten Commandment in the Bible, the rules presented in this article collectively act as a guide toward sound and responsible investing.

1. Thou shalt set clear goals. Invest only if you have clear objectives in sight. Without this, your effort and money may soon be put to waste.
2. Thou shalt put thy financial house in order. If you are up to the neck in credit card debt or bills, investing is a bad idea. Take care of these concerns first before investing.
3. Thou shalt question authority. Investment requires the initiative to ask and answer the questions. Do not rely on what the higher-ups – CEOs, CFOS, CFAs – say will be good for investment. Educate yourself and research on concrete financials.
4. Thou shalt not follow sheep. Herd mentality has proven to be injurious in Wall Street. Accepting information without being critical consequently leads to this behavior. Check things and determine the real value of stocks.
5. Thou shalt be humble. Overconfidence leads to overtrading that in turn leads to unnecessary risk-taking and losses.
6. Thou shalt be patient. Patience is a virtue in investing because the trait pays for itself. The best behavior in a crisis is to take your time.
7. Thou shalt show moderation. When you invest in too many stocks at the same time, you may find yourself pulling out prematurely, so practice moderation.
8. Thou shalt not ogle thy investment. Over-monitoring your investment is a no-no. The more you excessively oversee, the more you want to blend investments.
9. Thou shalt not court or spurn risk. There is a unique threshold of risk for every investor by creed and age.
10. Thou shalt not make heroes of mere men. Idolizing too much of finance greats and mimicking their strategy is a bad idea. You can learn from them but need to develop an independent mind.

Kohlberg Kravis Roberts & Co

2009-12-04T08:54:00.000-08:00

The New York City-based private equity firm Kohlberg Kravis Roberts & Co began its operations when Jerome Kohlberg, Jr. bonded with cousins Henry Kravis and George Roberts in 1976. Today, the firm has expanded to include a team of around 400 employees and 140 investments professionals.

More commonly referred to as KKR, the firm manages and sponsors a number of investment funds. With its primary focus fixed on leveraged buyouts of full-grown business establishments and growth capital investments, the firm entered into PIPE (Private Investment in Public Equity) investments in a number of public companies. Moreover, Kohlberg Kravis and Roberts & Co successfully created a total of nine dedicated investment groups by specializing in private equity investments and focusing on specific sectors in the industry. The firm effectively developed certain specializations in a couple of industries specifically on consumer products, chemicals, energy & natural resources, health care, financial services, industrial, retail, media and communications, as well as technology.

Since the firm’s inception, Kohlberg Kravis Roberts & Co has completed a total of more than $400 billion worth of private equity transactions that includes a number of landmark dealings such as the leveraged buyout of RJR Nabisco in 1989. That particular transaction goes down as the largest buyout in the firm’s history, in addition to the 2007 buyout of TXU. To date, the Kohlberg Kravis Roberts & Co equity firm has completed investments in more than 160 companies ever since 1977.

Aside from its headquarters in the Solow Building at 9 West 57th Street in New York, Kohlberg Kravis Roberts & Co has 11 additional offices in the United States, Europe and Asia including Menlo Park, San Francisco, Houston, London, Washington DC, Paris, Mumbai, Hong Kong, Beijing, Sydney Tokyo, and Dubai.

Henry Kravis and George Roberts continue to run KKR.

Got $1,000? Get Ready To Invest.

2009-11-30T10:55:00.000-08:00

This article will aid inexperienced investors in getting started with just $1,000 saved toward maximizing their returns while minimizing costs. When you are still new to the business, it is important choose wisely on what to invest and how to go about investing.

Account minimums: All financial institutions have requirements for minimum deposit. If you have only $1,000 to start with, understand that some firms will deny you in opening an account.

Stocks: Choosing a compatible stockbroker is important, and they usually come in two types: discount and full-service. Someone with a $1,000 investment amount has the option of the discount broker. Though they have low fees, you do not get as much service or investment advice. Other options include direct stock purchase plans (DSPPs), which have over $100 to $500 minimum investment restrictions and online brokers that have low or no minimum deposit restrictions but do impose higher fees for specific types of trades.

Mutual Funds and Bonds: If you are interested in mutual funds, you can purchase through brokerage firms or through the local bank. If you fancy government bonds, which feature a minimum purchase ranging from $100 to $1000, you can go to TreasuryDirect.

Investment Costs: Know the costs attached to an investment. Every investment you purchase will cost you money in commissions. When you trade frequently, you will incur trading fees that range from $10 to $30. Mutual funds have the management expense ratio (MER) charged by the management team annually. For the newbie investor, mutual funds are advantageous because of dollar cost averaging (DCA) where fees remain the same regardless of the amount of investment.

Diversification: Another important thing to consider is diversification. With a $1,000 deposit, getting a well-diversified stock portfolio is difficult and risky. Go for mutual funds instead since they tend to include a large number of stocks within the fund.

The Real Deal About Valuing Real Estate

2009-11-23T11:52:00.000-08:00

Dr. Steve Sjuggerud of Investment University gives two valuable real-world rules on selling or buying real estate.

The first rule: do not pay too much for good old earth. If you are after real estate stock, do not pay more than a 10% premium to the properties’ market value. If you want to buy a house, determine the comparable home values in the area and think carefully before you consider paying a 10% premium. The best advice in buying real estate is getting a 20% discount. It is hard, but not impossible to do, particularly if you are willing to groom up properties after buying them.

The second rule: do not pay too much for real estate “business.” Consider “price-to-earnings” (P/E) to determine your property’s true “intrinsic” value. Earnings take the form of rent. A good yardstick for real estate is the “1% above Treasury bond” rule. The nationwide net rent averages 6.15% (earnings-to-price ratio). In order to get P/E, inversing this value would mean that the “fair” value of your property should have a P/E ratio of 16. Forbes suggests that in order to get P/E for your property, one should get comparable rents data from relocation departments of large real estate firms. If you compute a low P/E, this means you got a sweet deal out of your property or you can expect high rental collections from it. If you compute twice as high as 16, then you should consider selling.

This is not however, a fixed guide. Real estate is liquid, unlike stocks, so there is a lot of guessing involved. Applying these rules does not guarantee success for you on a regular basis but it can improve your chances significantly by applying stock market rules to real estate. Just like the 1-2-3 model used in stocks, one always bears in mind that making money in the long run is impossible when the P/E is above 17.

Ten Ways of Evaluating Your Broker

2009-11-20T10:26:00.000-08:00

There are 10 things to consider in choosing a broker or in evaluating whether your broker measures up.

1. Trading commissions: Cheaper may not be better. The price per trade may be indicative of the level of customer service executed. If you go cheaper, you may find yourself at the end of the line with your questions unanswered, whereas paying more would most likely mean excellent service.
2. Other fees: It is important to know that brokerages charge other fees for services, such as for transferring assets into the account, wire transfer, IRA custodian, etc. Know what you need first so you won’t have to pay for unnecessary services.
3. Minimum initial deposit: Beginning investors should consider the initial investment amount they’re most comfortable with. Since some brokers have account minimums, choose one that suits your budget.
4. Customer service: Research on the services offered before signing up. Consider website performance and interface, speedy service, and a good phone service.
5. Traditional banking services: Look for a brokerage account that can adjust to your banking needs.
6. Research: Decide whether or not you have to pay for research (analyst reports, financial data, and real-time quotes) when you can do it yourself online.
7. Mutual funds: Check whether you have to pay for no-load mutual funds since some brokers charge fees. If you have a particular mutual fund family in mind, ensure that your broker offers that.
8. Investment product selection: Check so that the broker you choose offers investment vehicles you wish to use.
9. Other methods of getting your trades executed: Determine whether your broker has contingency measures such as touch-tone phone trading; things like this will prove helpful in the event you have no access to a computer.
10. Freebies: Though not entirely a big deal, free money is free and stress-relieving.

A final word: if you make less than 20 trades annually, never mind the cost; focus instead on customer service.

Socially Responsible Investing (SRI): The Basics

2009-11-18T10:19:00.000-08:00

Some people see investing as more than a rate of return but as a way where one’s values and beliefs are reflected and practiced. Socially responsible investing or SRI is a growing strategy that integrates financial with social and environmental objectives. Those who are considering investing in SRI need to know ten basic tips.

1. Define goals: Determine what you want to achieve based on your values and principles.
2. Choose an approach: SRI has three non-mutually exclusive approaches: 1) Portfolio screening either excludes (negative screening) or includes (positive screening) some companies from your list of prospective investments; 2) Best practices classification chooses firms that rank high in environmental, governance, social, or financial criteria; 3) Shareholder status usage to monitor and influence management through direct engagement of proxy voting.
3. Select an Appropriate Benchmark: Use either SRI or traditional benchmarks to evaluate a business’ performance according to whether they adhere to your defined goals and principles.
4. Choose an SRI Rating Firm: Select the best firm that can supply SRI ratings that help you implement a feasible SRI strategy.
5. Investigate SRI Vehicles: Pick individual securities that rank high based on realistic criteria and expectations.
6. Evaluate SRI Options in Your 401(k) Plan: Check your 401(k) plan to evaluate whether mutual funds screened are consistent with your goals and values.
7. Fees: Bear in mind that socially responsible mutual funds or ETFs pay higher management fees, ranging from about 0.40-1.00% of portfolio value.
8. Be realistic in performance expectations: Like other investment vehicles, be realistic in the performance of your investments. While possessing similarities, realize that an SRI does not perform like your traditional mutual funds.
9. Diversify: Come up with a well-diversified portfolio to reduce risk.
10. Consult an Investment Professional: It is important to consult with a competent and trust investment adviser to help you navigate and execute SRI goals.

Five Changes to Post-Recession Investment Thinking

2009-11-16T10:11:00.000-08:00

After the recession, several traditional modes of thinking about investing have changed. Below are five examples that investors can learn from:

1. Asset Allocation

CONVENTIONAL WISDOM: Traditional thinking says mixing stocks and bonds in a portfolio should be done according to an investor’s age and risk tolerance. Hence, young investors were encouraged to own growth stocks before transitioning into the more secure bonds and blue-chip company investments.

NEW THINKING: Bonds are the way to go. Barclays Capital U.S. Aggregate Bond Index indicates a 14% increase in bonds since 2007 October, while stocks dipped 28%. This is why investors have poured in $209 billion into bond mutual funds compared to the 200% more attractive stock funds before.

2. Stock diversification

CONVENTIONAL WISDOM: Maintaining a diversified portfolio will arm you in bear markets and assure the best returns. In the event of a downturn, rely on “value” stocks, while during the good times, maximize your gains by investing in “growth” stocks.

NEW THINKING: The fact remains that it will take several years before a full economic recovery. Experts predict more volatility and an unsteady recovery, instead of a consistent climb upward. It depends on what kind of economy emerges after the downturn.

3. Alternative Investments

CONVENTIONAL WISDOM: Build your portfolio around stocks and bonds and minimize investing in other assets.

NEW THINKING: Tangible assets like real estate and gold are the more secure option. Consider not only your home, but other forms of real estate and gold bullion.

4. Dividends

CONVENTIONAL WISDOM: Dividend-paying stocks assure you steady income.

NEW THINKING: This is no longer a certainty after companies made several dividend cuts to conserve cash. The only thing still certain is taxes.

5. Risk

CONVENTIONAL WISDOM: Choose risk-free investments to protect yourself.

NEW THINKING: Nothing is risk-free anymore. Large money-market mutual funds like the Reserve Primary Fund have proven to be vulnerable to the financial crisis.

Seasonal Patterns: A Helpful Tool for Investment Analysis

2009-11-09T09:12:00.000-08:00

When doing am overall market analysis, the primary factor must always be price or price movements, or the market trend. However, seasonal tendencies can be used as a secondary factor when performing your analysis as they reinforce your chances of securing a stronger position in the market. The technique to successful market analysis is to consider as many factors as possible. Supplement this with effective money management, and you have what it takes to become a successful investor.

There are recurring market cycles each year that create the so-called seasonal patterns. These seasonal tendencies are a major force in the market. You will be successful trading the markets when you work the odds to your favor prior to making a position. For instance, sugar tends to be priced lowest in September and highest in December every year. A smart investor would use this pattern to develop a good trade setup. The price of sugar starts hitting bottom-level in August to consolidate on a narrow channel through September before breaking out in October. To gain a strong position on the market, buy on the breakout in order to influence the price movement in your favor and gain protection in case the market opposes you. If the price of sugar monumentally drops, you can even make a fortune.

Other seasonal patterns of other markets include:

• soybeans are likely to be at their highest price level from May to July to drop from September to October;
• crude oil prices are at their highest in September and October and at their lowest from December to February; and
• the U.S. dollar is at its strongest within the first half of the year before regressing into year end.

The catch: seasonality is not the only factor to consider. One should also ponder on the cash basis and other fundamentals.

Nine Top Investment Sins to Avoid

2009-10-23T10:16:00.000-07:00

Before you tread on investing waters, it is helpful to know the most common pitfalls which every aspiring investor must avoid at all costs.

1. Doing nothing. Waiting for the grass to grow will not help you achieve a comfortable retirement.
2. Starting late. Procrastinating on an investment is the second biggest mistake to make. The earlier you start investing, the better off you will be.
3. Investing with unresolved credit card debt. Before even dreaming of a career in investing, pay off your credit card debt first. If you have $5,000 to investment and roughly the same amount owed to credit card companies, investing will surely be counterproductive.
4. Short-term investing. Invest money on shorter-term and safer havens for short-term goals. Invest the rest of what you have that you do not need for at least three years on the stock market.
5. Refusing free money. Never turn down a dollar offered provided it has no strings attached. Take advantage of what your company offers such as a 401(k) or similar tax-advantaged retirement savings plan with an employer match.
6. Playing it safe. This is a sin if you are young and you are missing out on investing in stock. Youth has its privileges. Be more of a risk-taker and reap long-term profits in stock. You have time on your hands to survive whatever the dips in the stock market and can choose to transition into bonds later.
7. Playing it scary. Being a daredevil is not always profitable. Do not risk all your money into a doomed investment.
8. Believing collectibles are investments. Collectible memorabilia or paraphernalia will not provide for you in the years to come.
9. Trading in and out of the market. Stick to a long-term investment for bigger profits. Trading in and out will burden you with fees later on and slice away your returns.

Goodbye, Bruce Wasserstein

2009-10-16T09:28:00.000-07:00

I was saddened by the news of the financial mogul, Bruce Wasserstein. He was a legend in the private equity industry. Bruce Wasserstein led Lazard during its some of its most difficult times, and transformed the firm into a modernized, streamlined powerhouse. Here are some links to some articles about Bruce Wasserstein's passing:

Lazard Tribute to Bruce Wasserstein, veteran of 1,000 mergers (Guardian)

Remembering Bruce Wasserstein (Newsweek)

Budgeting Basics for Lazy People

2009-09-28T11:02:00.000-07:00

Let’s face it. Most people find budgeting an unenjoyable activity. Many keep putting this task off until the next day, and end up never doing it. Are you that kind of person? If you are, Dayana Yochim of Fool.com has written a simple technique for the budgeting lazybones.

1. Know exactly how much you spend: To appreciate the virtue of saving, you must be personally aware of the excesses in your spending. List all your expenditures and categorize them. People who use cash can write down their expenditures on a day-to-day basis. Those who use credit or debit cards may get data from monthly bank statements. Input the data into a spreadsheet and be amazed.
2. Make your spending plan. After you get over the initial shock, you can start making your “spending plan.” The idea is to make a list of the most important purchases you need to make within the next three or six months. Include the physical purchases and financial plans you need to pay. This list will guide and direct your spending
3. Compute money to set aside. Single out the items on the list that will run you every month (ex. new tires), divide the total amount for that item with the number of months until you need them anew.
4. Put your savings on autopilot. To ward off surprise expenditures, hide your money from yourself. Open a separate savings account from the one you use for expenditures. You already computed how much money you need to put away monthly in
5. Instruct your bank to program recurring cash transfers from your main account to your separate savings account.
6. Discipline yourself. Use the “envelope method” to prevent mindless overspending. Compute the total weekly amount you need to spend on essentials. Categorize them and insert the allotted budget inside the envelope. This is the money you’re allowed to spend each week.

Vikram Pandit

2009-09-25T11:39:00.000-07:00

Vikram Pandit is the CEO of Citigroup Inc., a New York-based American financial services company that holds the world's largest financial services network and controls over 200 million customer accounts in over 140 countries. As of 2008, the company became the world's largest bank by revenues.

Born to a well-to-do Maharashtrian family in Nagpur, India on January 14, 1957, Vikram Pandit seemed to have the world at his feet. After graduating from the Dadar Parsee Youths Assembly High School, Vikram Pandit flew to the United States to attend Gannon University.

Vikram Pandit chose to further his education at Columbia State University where he received his Bachelor's Degree in 1976 and his Master's Degree in 1977. In 1986, he received his PhD in Finance from the Columbia Business School.

Before his success at Citigroup Inc., Vikram Pandit worked as a professor at Indiana University Bloomington. It was not until 1990 that Pradit built his ties with Morgan Stanley, a diversified group of corporations, governments, financial institutions, and individuals. He became managing director and head of the US Equity Syndicate until 1994.

In 1994 he became head of head of Morgan Stanley's institutional securities division. At Morgan Stanley, Vikram Pandit was instrumental in the introduction of electronic trading as well as the creation of services that helped cater to hedge-funds. By 2005 he had served at the company as President of Institutional Securities, Chief Operating Officer of Institutional Securities, and Member of Management Committee. The Indian government gave him recognition with the Padma Bhushan award in 2008.

In 2007, Vikram Pandit joined Citigroup Inc. In December, the company appointed him as CEO. At present day he is the Head of Alternative Investments, Chief Executive Officer, and Member of Operating and Management Committee at Citigroup Alternative Investments. He is also the Chief Executive Officer of Citigroup Inc. Vikram Pandit is Co-Founder of Old Lane, LP.

Marc Lipschultz (KKR)

2009-09-21T09:56:00.000-07:00

(This is my fifth article on the leaders of KKR. Be sure to check through my archives to find other KKR notables). -Stan

Being pioneers of the business, it is easy to assume that to replace Henry Kravis and George Roberts is something that the firm would rather not think about, especially now that the business is booming and opportunities seem to appear in every corner. KKR still looks ahead with gusto to the future with the two founders still at the helm of the ship.

But to give credit where credit is due, the two founding partners are not just resting on their laurels. Little by little, the two have taken steps in future-proofing their firm; in making sure that whenever they decide to give up the driver’s seat, they will be leaving the steering wheel at the hands of capable drivers. Many critics doubt that anyone can replace what the pioneers have done with regards to the business industry. But with these potential, one can see that they have at least a strong fighting chance to do so. One of the up and coming minds that play secondary captains to KKR’s ship is Marc Lipschultz.

Marc Lipschultz is one of the leaders of the energy industry group at KKR and was involved in all aspects of KKR's investment in International Transmission Holdings and the announced agreements to invest in UniSource Energy Corporation and Texas Genco. A graduate of Stanford University and the Harvard Business School, Marc Lipschultz also serves as member of the board of directors in companies like Amphenol Corporation and The Boyds Collection Limited. He also serves as a special advisor along with Henry Kravis for the company Accel KKR.

Dubbed as the rising star of KKR, Marc Lipschultz joined KKR 12 years ago, coming from Goldman Sachs. At 38, he has already been involved in many of the firm’s big company acquisitions like the $45 billion purchase of TXU, a Texas-based energy group.

Through hiring individuals with class like that of Marc Lipschultz, the doubts that the future of KKR after its founders have left will be forgotten in many of the critics’ minds.

George Roberts: Model Businessman

2009-09-17T11:04:00.000-07:00

(This is my fourth article on my series of the people who run KKR. Check out my bios of Henry Kravis, Scott Nuttall, and Bill Janetscheck).

George Roberts is a revered businessman in the realm of financial industry. Heading the successful financial firm Kohlberg, Kravis, Roberts & Co (KKR) with Henry Kravis, he has obtained success through careful and efficient leadership. KKR has been involved in many of the last three decades’ biggest acquisitions, most notably that of RJR Nabisco in 1988. This aggressive yet effective leadership style characterizes George Roberts’ skills as a businessman. For more than three decades, this financial industry leader has influenced many of his colleagues with the way he carries himself and the firm.

George Roberts reveals that the firm’s culture depends on their reputation; that their word is their bond; and both are paramount to their success. These values upheld by George Roberts are reflected in the way their firm operates as a whole. KKR is responsible for many of the world’s largest and most complex private equity transactions worldwide. A reputation for integrity and fair dealing, the firm relies on this reputation to generate and add to their distinguished record of profitable and successful ventures.

Majority of his colleagues in the financial industry see George Roberts as a model businessman. Throughout his career, he has received accolades reflecting how excellently he works not only in his corporate job but also with activities beyond his business. He received his alma mater Culver Military Academy’s Man of the Year Award and has been consistently included in the Forbes List of Richest Americans, merits that are deservedly his to take. Guiding their protégés, both he and his cousin, Henry Kravis, are building up and ensuring the future of KKR. By being an example to the next generation KKR management, George Roberts will be able to retire knowing that he has maximized every opportunity that has come his way.

Bill Conway

2009-09-16T10:29:00.000-07:00

Bill Conway is one of the three co-founders of The Carlyle Group, a Washington-based private equity investment firm that focuses on leveraged buyouts, growth capital, real estate, and leveraged finance investments. The company is one of the largest private equity firms in the world with nearly $50 billion under management.

Born William E. Conway Jr. in 1949 in McLean, VA, this business powerhouse led a pretty conservative life. His genius shone through early on as he received his undergraduate education at Dartmouth College and later on, his M.B.A. at the University of Chicago Graduate School of Business.

Bill Conway, who has 20 years of experience in the industry under his belt, always had an uncanny knack for business and finance. Before founding Carlyle with Dan A. D'Aniello and David M. Rubenstein, Bill Conway spent almost ten years with The First National Bank of Chicago. There he served an array of positions dealing with corporate finance, commercial lending, workout loans, and general management.

In 1981, after his time at The First National Bank of Chicago, Bill Conway served at MCI Communications, the second largest long-distance provider in the United States. At MCI, Bill Conway was instrumental in several of the company’s most significant acquisitions and divestitures. He served as a Vice President and Treasurer of MCI from 1981 to 1984. He then spent as three years the Senior Vice President and Chief Financial Officer.

In 1987, Bill Conway founded The Carlyle Group. The company continues to broaden its scope for potential investment opportunities. They also constantly improve their level of expertise in order to provide superior returns to investors. Presently, Bill Conway serves as Managing Director The Carlyle Group and chairman of Carlyle's investment committees.

Constant in his reserve, Bill Conway continues to support several local charities, especially those that support the causes of education and the Catholic Church.

Bill Janetschek

2009-09-15T10:51:00.000-07:00

William J. Janetschek, better known as Bill, is the Chief Financial Officer of KKR & Co. L.P. (Kohlberg Kravis Roberts), one of the largest investment and merchant banking houses in the United States.

Bill Janetschek received his B.S. in Accounting from the College of Business Administration at St. John’s University, where he graduated cum laude in 1984.

Everyone who knew Janetschek in his early years agreed that he was destined for greatness. Right out of college, Bill set out for the fast-paced world of business and finance onboard the Tax Department at Deloitte and Touche LLP as a Staff Accountant. Shortly after that, he received his M.S. in Taxation from Pace University. He is a Certified Public Accountant.

Thirteen years after his introduction at Deloitte and Touche, and after being promoted to Tax Partner, Bill Janetschek left the company to join up with Kohlberg Kravis Roberts and Company.

Since Bill Janetschek joined KKR, the company has adapted deftly to the current economic condition. It holds over $60 billion in assets, management fees and profits from direct interests, adding to Bill’s already impressive portfolio. Due to its lineup of competent personnel, KKR & Co. L.P. has continually given clients superior returns through solid management, operational excellence, optimal capital structures, and a sound, long-term investment program in any situation regardless of fluctuations in equity markets, lending rates, or lending capacity.

Bill Janetschek was recently awarded the Alumni Outstanding Achievement Award of St. John’s University at the 28th Annual Alumni Convocation. He currently serves as a member of the President’s Dinner Committee and participates in the contribution of academic scholarships to exceptional students in the university.

I've recently profiled other KKR alumni, Henry Kravis and Scott Nuttal.

Stephen Feinberg

2009-09-14T09:54:00.000-07:00

Stephen Feinberg is an authority in hedge-funds and private-equity arena. That is, if anybody can find him; the co-founder and CEO of Cerberus Capital Management, L.P. does all he can to remain invisible despite all the attention his success draws.

Cerberus Capital Management, L.P. is the company Stephen Feinberg founded in 1992 with William L. Richter. The 49-year old became a success story when he fathered one of the largest private equity investment firms in the United States with only $10 million.

You would think that little fact alone is enough for the press to be banging down his door in hopes of a picture. Stephen Feinberg does not see it that way. “If anyone at Cerebrus has his picture in the paper and a picture of his apartment, we will do more than fire that person. We will kill him. The jail sentence will be worth it,” Feinberg said at Manhattan’s Waldorf-Astoria in 2007. Though the Wall Street investors present responded with nervous laughter, the mysterious and guarded business powerhouse made his philosophy perfectly clear: reveal little as possible.

As the camera-shy head of Cerebrus continues to elude the press, the company continues to climb the ladder of success. On May 14, 2007 Cerebrus, along with 100 other investors, bought an 80% stake of Chrysler. Even as the firm made history, Feinberg was a no-show at the press conference saying, “we knew it would get an insane amount of press, and boy, we don’t like that.”

Nearly three decades after his years as a loner at New Jersey’s Princeton University, Feinberg has not abandoned his secretive style. His brilliance, success, and extremely private ways will always make him a target of the media. But until they catch him, Stephen Feinberg will continue to hide from plain sight.

Scott Nuttall of KKR

2009-09-10T10:16:00.000-07:00

I've decided to run a series of profiles of the people who run the private equity firm KKR. Each of these investors has an extraoridnary story. I've talked about Henry Kravis. Today, I'll profile KKR Financial Holder Director Scott Nuttall.

Running a multi-billion dollar firm is not an easy task. To run it for as long as three decades requires hard work and a whole lot of business smarts. Kohlberg, Kravis, Roberts & Co is a company that has been running smoothly for over three decades now. Its founding partners have worked very hard since they started operations in 1976 to take the firm to where it is now. Pioneering the process of leverage buyouts, the KKR team has continually found success in every venture and company that they enter deals with.

The constant additions of young minds ensure the continuous success that the firm is experiencing. One of the top directors for the firm is Scott Nuttall. Fresh and still very young, Scott Nuttall is one of the leaders primed to take over the firm if ever the founders decide to step down from their respective posts.

Scott Nuttall is the one of the youngest members of KKR’s so-called “next generation”. He has been with the firm for 10 years already and first served as a member of the board of Willis, an insurance broker, while it was owned by KKR. Currently, his main task is as a member of the General Partner, Head of the Financial Services Industry Team of Kohlberg Kravis Roberts & Co. He also oversees the Global Capital and Asset Management Group and played a significant role in investments such as that of Alea Group Holdings, Amphenol, Walter Industries, and Willis Group. Aside from these, he is also affiliated with the firm’s funds, specifically the KKR Private Equity Investors and KKR Financial Holdings. Scott Nuttall also oversees the combined capital raising, distribution, and broker-dealer efforts for the firm. Likewise, he acts as the Secretary and Treasurer of KKR BDC Inc.

A graduate of the University of Pennsylvania, Scott Nuttall graduated with Summa Cum Laude honors.

Scott Nuttall and other brilliant young minds like him at KKR serves as an assurance that the future of the firm will continue to look bright.

Investment Pointers for Every Age

2009-09-10T10:07:00.000-07:00

While all people share and are governed by a similar economic and investment climate, age groups experience different economic situations, risks and opportunities. Thus, the young and old may vary in terms of financial focus and investment opportunity. Money Magazine’s Peter Freeman gives the following investment pointers for those in their 20s, 30s, 40s, 50s and 60s.

1. The 20s. People from this age group are rookies to the workforce and have just started to generate income. Moreover, they have semi-permanent relationships. The financial focus at this age is to save up for a deposit on a home or to pursue an investment that appeals to one’s lifestyle. Prior to building wealth, they must either control or erase credit card debt. They may also consider investing in equity funds to build deposit.
2. The 30s. At this age, people have either settled down, have children, or bought a home. The main concern is how to secure renovations, reduce mortgage, and acquire or upgrade to a better property. Main threats to this age are downsizing and inflation, so taking out income insurance and saving up for emergencies are recommended. Those who are still single may pursue aggressive investments (geared share funds, portfolio or direct share investments) with extreme care.
3. The 40s: Financial stability during the 40s depends on how well you managed your money during the past decade. As the kids are grown up and education becomes more expensive, budgeting is of extreme importance at this age. High income folks may expand their investment portfolio.
4. The 50s: Establishing your own business is advantageous at this age. Children are married and enjoy financial independence, ergo, reduced expenses. Higher salaries are also enjoyed.
5. The 60s and later: The main focus at this age is how to maximize one’s savings in order to continue generating post retirement income. People usually build investments around allocating or complying pension in order to maximize tax and social security.

Saving Money and Mother Earth in Ten Easy Ways

2009-09-08T09:16:00.000-07:00

Feeling helpless against the recession and climate change? No need to be. One can perform simple lifestyle changes that will not only battle climate change but expand your personal savings as well. Patti Prairie, CEO of Brighter Planet, suggests 10 doable steps that will save you a whopping $2500 and a total CO2 emissions reduction of 19,419 lbs. a year.

1. Reduce, reuse, recycle: Buy less or reuse items. When you do buy something, go for bargains or discounts. Do trade-ins for non-essentials, or donate them to charity or thrift shops. Save $564 (2902 lbs).
2. Drive with efficiency: You can extend the life of your car and reduce CO2 emissions by driving smoothly, keeping your tires inflated always, reducing idling, and driving below 55 mph. Save $385 (2882 lbs).
3. Reduce air travel: Land travel is the way to go. If flying is inevitable, choose daytime, economy class, and direct, non-stop flights to trim your emissions. Replace air travel with Web, phone or video conferencing once a year. Save $347 (2492 lbs).
4. Laundry changes: Cut your wash-and-dry laundry load by half. Just wash the other half with cold water and hang to dry. Save $287 (322 lbs).
5. Eat less meat: Cut your carnivorous intake to just 3 times a week. Save $285 (1107 lbs).
6. Commute: Twice a week, you can commute, take public transportation, or carpool. Save $276 (1177 lbs).
7. Save water: Switch to inexpensive shorter showers or use low-flow shower heads to conserve water. Save $194 (2123 lbs).
8. Light up: Change your lighting with compact fluorescent bulbs to conserve energy. Save $188 (1429 lbs).
9. Heating and cooling: Install a programmable thermostat for heating/cooling efficiency. Save up to $131 (1413 lbs).
10. Power use: To conserve power and lengthen the life of your appliances, make use of power strips, power management settings on your PC, and unplug charges. Save $64 (743 lbs).

Kevin Landry

2009-09-04T10:28:00.000-07:00

Kevin Landry is CEO of TA Associates, one of the oldest and most significant private equity firms in the world. The firm focuses its attention on making investments in private companies and helping them build their businesses.

Kevin Landry did not start out as the success he is today. At one point, he was just a 16-year old boy who literally had his head in the clouds. On his father’s Cessna airplane, you could say that Kevin Landry really had nowhere to go but up. After a short stint in the army, he was hired fresh out of the University of Pennsylvania’s Wharton School of Finance by TA Associates founder Peter Brooke in 1968. He often talks of it as his only white-collar job.

Over the many years in business, TA Associates’ strategy has evolved and Kevin Landry has been onboard every step of the way. It became clear right away that with his down-to-earth character, coupled with his preference for informality, that he would go places even with his feet planted firmly on the ground.

Under his leadership, TA Associates has adapted a more conservative approach that is better suited to the aggressive industry of today. Landry takes it upon himself to make sure that the company does not get caught up in the hubbub.

TA Associates, which holds $10 billion in assets under management, stands out from other private equity firms because of their thorough investment practice. While other private equity firms acquire more than 50% in debts on a regular basis, TA Associates’ does not go up to more than 30%.

Kevin Landry was also on the board of directors of several companies like Ameritrade Holding Corporation, Biogen, Alex Brown Incorporated, Continental Cablevision, Keystone Group, Standex International Corporation, Instinet Group, the National Venture Capital Association, and SBA Communications.

Five Tips for Picking an Investment Partner

2009-09-03T10:30:00.000-07:00

If you have succeeded in forming a company without external financing, there is great likelihood that you will attract private equity investors. When the time has come to consider an investment partner, selecting who to choose will be a major decision. Here are five tips to ensure you pick the best investment partner:

1. Know your needs. It is important to determine exactly why you are raising capital. Is it for personal liquidity, growth equity, a management buyout, or a combination of all three? Before making the big decision to gather outside financing, understand what business opportunity confronts you. Only then can you determine the type of capital required and the right investor.
2. Evaluate each firm's track record. Choosing the right firm requires diligence. If you must, evaluate data on each firm, such as size, stability, capital resources, and track record. Be aware of the firm’s success history and level of experience with businesses related to your own. Assess the firm’s capacity to deliver returns for both investor and business owner.
3. Make sure the culture fits. Find a private equity firm you can work hand-in-hand with. Conducting interviews with CEOs of the firm’s portfolio companies can give you a feel of what working with a particular firm would be like. Narrow down your choices to firms who can provide capital and keep your management team in control of decisions.
4. The value of personal trust. Chemistry is a must when assessing a potential investment partner. Among the questions you can ask are: Does the firm operate with honesty and integrity? Do we share common ethics? Do we like them as people?
5. Look for stability. Stability helps raise follow-up capital as well as provides potential for growth. Monitor retention of personnel as well as investors. Determine if there is a succession plan crafted for smooth transition of the firm to the next owners.

Kevin Griffin: A Career in Success

2009-09-01T10:23:00.000-07:00

You could say that Fennebresque & Co. founder and Managing Director Kevin Griffin has been around the block in the world of investment banking and corporate finance. The rise of the company is the latest notch on his belt of experience. Having marked more than 12 years in the industry, with seven dedicated exclusively to the middle market, Griffin is the embodiment of genius and hard work, proving that even in this competitive world, small steps still count.

Kevin Griffin’s brilliance sets him apart even as he received his education. In 1999, he received a Master of Business Administration degree from the University of Chicago Graduate School of Business where he graduated with honors. Prior to that, he studied at The University of North Carolina at Chapel Hill where he received a Bachelor of Science degree in Business Administration.

Before the emergence of Fennebresque & Co., Griffin served as a Partner and Vice President with McColl Partners, an investment bank that provides services to middle-market companies and financial institutions. AT McColl, he was responsible for creating and executing middle market Mergers and Acquisitions transactions.

Before his years with McColl Partners, Griffin worked in the M&A and corporate finance divisions of Lazard, JPMorgan, and Bank of America in New York, Chicago, and Charlotte. Even further back, Griffin began his career as an investment banking analyst with NationsBanc Capital Markets in Charlotte, where he concentrated on fixed income products for real estate.

At Fennebresque & Co., a company that provides middle market advisory services in order to aid clients in the evaluation and execution process of financial transactions, Griffin belongs to a team of senior-level investment banking professionals who are objective, creative, and committed to providing effective advice to clients.

Kevin Griffin is also connected with several professional and civic affiliations including the Association of Insolvency and Restructuring Advisors, the Charlotte Country Day School Alumni Council, the Charlotte Youth Basketball League, and the Myers Park United Methodist Church.

Nelson Peltz: From Truck Driver to Brand Builder

2009-08-31T09:36:00.001-07:00

Nelson Peltz is not the man one would think of when he drives into an Arby’s. His name does not explode in your mind as the All-American Roastburger does in your mouth. It should though --- Nelson Peltz is the man behind Trian Partners and Triarc Cos., two related firms that focus on food and beverage operations. They own restaurant franchises such as Arby's, Wendy’s, TJ Cinnamon, and Pasta Connection.

Not what you would expect of a billionaire, the 64-year old’s silver hair, deep voice, handsome features and compelling nature are not all that set him apart from all the other big shots on Wall Street. The success story that is Nelson Peltz goes beyond mere genius. Nelson Peltz is defined not only by his hardworking and competitive nature, but also his devotion to the people nearest and dearest to him. Before seeing his empire launch in the 1980s, he enrolled at the MBA program at the Wharton School of the University of Pennsylvania. Here, his path to success hit a speed bump when he had to drop out to drive trucks for his father’s food-distribution business. Now with sons of his own, Nelson Peltz has made sure that his boys never have to go through the same.

Insightful and a natural dealmaker, Nelson Peltz is able to focus on the bigger scheme of things. After dropping out of college in 1962, he was able to turn his family’s little frozen-food distribution business into the largest distributor in the Northeast. In 1985, Nelson Peltz assembled Triangle Industries, the largest manufacturer of tin cans, containers, and packages of tin in the United States. Building companies from the ground up since he was out of high school, it is no wonder that Nelson Peltz has lived his life knowing business inside and out.

Looking back on his truck-driving years, Nelson Peltz makes no apologies. He has been known to say, “I believe in pay for performance.” In the years since then, it is evident in the pay that the performance is nothing short of extraordinary.

Henry Kravis: LBO Pioneer

2009-08-28T14:49:00.000-07:00

(This is the first in my series of profiles of big time private equity investors. I've done a piece on Ken Mehlman already, so I decided to continue with other major figures of KKR. Enjoy!)

Henry Kravis has mastered the art of leverage buyouts and takeovers. With George Roberts and Jerome Kohlberg, Henry Kravis founded KKR, a firm capitalizing on leverage buyouts and reselling companies for profit. Since its foundation, the firm has had more than 30 company buyouts and has invested over $90 billion in these ventures reaping profits for the firm and their investors. In 1987, Jerome Kohlberg retired from the firm and Kravis was left with his other partner, George Roberts. In 1988, the two of them led the takeover of RJR Nabisco for $25 billion dollars, the biggest acquisition of its kind during that time.

Henry Kravis graduated as an economics major at Claremont McKenna College and spent his summers working in Wall Street and companies like Goldman Sachs, where he learned the movements of the financial industry. After he graduated, Henry Kravis worked at Madison Fund where he fine-tuned his skills and knowledge of the financial industry. It was in this job that he learned decision making with regards to buying stocks and companies. He took his Masters degree at Columbia and went back to working for Madison Fund. He then transferred to Bear Sterns where he met Kohlberg and with Roberts, founded their own company in 1976. And the rest, as they say, is history.

Henry Kravis has been a staple in the Forbes list of richest Americans because he has continued to be passionate about his craft. Likewise, he remains one of the pioneers of leveraged buyouts. Alongside JP Morgan, he is considered one of those who significantly changed the financial industry landscape.

Taking over a company and turning it from struggling to profitable is a difficult task. A business venture is not like your normal walk in the park. It takes a lot of work; long and very hard work. It takes risks; risk that the company you obtain have a 50-50 chance of being a bomb. It takes research and carefully calculated moves. It is pressure exemplified. Henry Kravis, without a doubt, is the greatest master of this extremely difficult art.

Check out this great interview of Henry Kravis and George Roberts on YouTube.

Three Essential Investing Tips

2009-08-28T14:17:00.000-07:00

True, most people understand the concept of investing: exchange your money today for a company you hope will earn you more money over the coming years. While this may seem simple, what we have seen in reality suggests that doing it “right” and succeeding in it is far from easy. Those who have proven their mettle have done it differently from in their own ways --- take Warren Buffett, James Simons, and George Soros, who have made it big with varying approaches to investing. As the market evolves and becomes more complex, every investor, whether freshman or veteran, needs three essential tips to secure a return on their investments.

1. Know what kind of an investor you are and make sure your investments are consistent with that. Is your personality fit for a “speculator,” looking to maximize on short-term movements? On the other hand, are you the “investor”; more interested in buying stocks off a great business to hold on the long-term? Your chances of succeeding depend on how and where you put your money on the market.
2. Think independently and avoid becoming a market lemming. The thing that draws the crowds is not always the wisest thing to follow. This particular bandwagon syndrome that focuses on short-term results makes investors “act like a herd of crazy lemmings.” It pays to be independent in making decisions. Take Warren Buffett’s example. During the tech boom, almost everybody placed bets on short-term tech companies while Buffett stuck to his long-term investment methods on “boring” companies like Gillette. Rookie investors criticized Buffett for his “relic” style. Eventually, the tech bubble burst and Buffett proved them all wrong.
3. Do not rely too much on stock tips. Sure, stock tips can help point you in the right direction, but it is wiser to research on a stock first and buy it for a good reason.

Investment takes practice. Eventually, you will get better at it, especially when you unfailingly consider these 3 essential tips in your decision-making.

Warren Buffett: The World’s Richest Success Story

2009-08-26T09:51:00.000-07:00

The success story behind Berkshire Hathaway’s Warren Buffett---who is also the company’s largest shareholder and CEO---spans back to his years packing groceries at his grandfather’s grocery store. Buffet showed maturity beyond his years when he decided that he would rather make money than play games with the other children his age.

Born Warren Edward Buffett on August 30, 1930 to a stockbroker-turned-Congressman, it is no wonder that Buffett showed an amazing flair for business and numbers at such an early age. At 11 years old, he jumped into the world of high finance by buying three shares of Cities Service that he later sold. He immediate regretted the decision as the numbers for Cities Service soared. Buffett learned his lessons earlier than most, paving the way for the plethora of critical real-world decisions he was going to make.

Warren Buffett was educated at Woodrow Wilson High School, Washington, D.C. after his father was elected into Congress. He received his college eduation at The Wharton School, University of Pennsylvania then later at the University of Nebraska where he received a B.S. in Economics. Choosing to further his education, Buffett enrolled at the Columbia Business School where he graduated in 1951 with an M.S. in Economics.

Warren Buffett experienced a variety of jobs before he landed himself at Berkshire Hathaway. Fresh out of school, he worked as an investment salesman at Buffett-Falk & Co., Omaha until 1954. From 1954 to 1956, Buffett served at Graham-Newman Corp., New York as a Securities Analyst. From 1956-1969, he sat as a General Partner at the Buffett Partnership, Ltd. Since 1970, Buffet has served at Berkshire Hathaway Inc., Omaha as its Chairman and CEO.

Berkshire Hathaway Inc. is a conglomerate holding company that oversees and manages a number of subsidiary companies. Since coming onboard, Buffet has been instrumental in driving the company to the colossal status it stands at today.

In 2008, Warren Buffet was ranked number one on Forbes list of World’s Billionaires making this the richest success story in the world.

Six Mutual Fund Investing Tips You Need Now

2009-08-25T09:20:00.000-07:00

Mutual funds are great investment vehicles. They combine money from hundreds and thousands of investors to create a financial portfolio of stocks, bonds, and real estate, among others. Moreover, every investor gets a slice off the total profits. In order to succeed in mutual fund investing, here are six important tips:

1. Keep ongoing expenses as low as possible. Closely monitor sales charges and other fees of your mutual funds. This is crucial for newbie investors who want to keep their own money working for them as much as possible.
2. Be wary of short-term performance. Do not be overwhelmed by spectacular one-year performance figures. In evaluating funds fit for long-term investment, look at past performance in terms of return, within three, five, or ten years. Moreover, you also need to assess how consistent the return is comparatively to similar funds, as well as to the overall market.
3. Evaluate your manager’s track record. Check the track record of your fund’s manager. Pick a manager with experience of five years or more who has worked on a particular fund, follows a consistent strategy, and has delivered impressive returns for long periods.
4. Develop automatic plans. Set up a mutual fund using an automatic plan with your fund company or employer. If you can, use your 401(k) plan to have automatic deductions on your paycheck before taxes.
5. Monitor your fund's performance. Monitor your mutual fund’s performance monthly, or at the least, quarterly. This will enable you to make decisions such as whether to increase your investment or to sell. Compare your fund’s performance with other funds as well as with the overall market.
6. Diversify. One of the most attractive features of mutual funds is that they are usually diversified. Based on economic and historical data, it is wisest to diversify by using asset allocation (as stocks, bonds, and cash equivalents).

Going Green and Saving Money in 10 Simple Steps

2009-08-24T10:38:00.000-07:00

Switching to simple and doable initiatives can save you money and reduce carbon emissions at the same time – approximately $2500 and 19,419 pounds of CO2 for a year. Patti Prairie, CEO of Brighter Planet tells us how.

1. Be frugal: Be wary of what you buy. If you must buy items, purchase them at little or no cost. Trade in what you don’t need or donate them to thrift shops or charities. Savings: $564, 2902 lbs.

2. Change driving habits: A few driving tips - drive smoothly; keep tires inflated; avoid idling; drive below 55 mph - to help your pocket and the environment. Savings: $385, 2822 lbs.

3. Save up on travel: If you must fly, choose direct non-stop flights. Fly economy class and book daytime flights to reduce your share of emissions. Use the Internet, phone, or video conference in lieu of air travel once a year. Savings: $347, 2492 lbs

4. Adjust laundry: Washing and drying eight laundry loads weekly is costly. Wash half of that load with cold water and hang them to dry, and you will cut costs. Savings: $287, 3211 lbs.

5. Reduce meat intake: Limiting your intake of meat to three times a week can save you money and reduce methane gas. Savings: $285, 1107 lbs.

6. Commute or carpool: Commute, take public transportation, or carpool two days a week to save up. Savings: $276, 1177 lbs.

7. Save water: Shift to shorter showers, or inexpensive low-flow shower heads that consume only half of the water compared to profligate counterparts. Savings: $194, 2123 lbs.

8. Use CFLs: Outfit your home with compact fluorescent and other energy-saving bulbs. Savings: $188, 1429 lbs.

9. Intelligent heating and cooling: Have a programmable thermostat installed to avoid heating/cooling when your house is empty or when you are asleep. Savings: $131, 1413 lbs.

10. Power down: Use power strips, power management settings for computers, and unplug chargers to prolong the life of your appliances and reduce emissions. Savings: $64, 743 lbs.

Top Ten Investment Strategies from Warren Buffett

2009-08-20T09:49:00.000-07:00

Readers get a glimpse of how Berkshire Hathaway’s Warren Buffett generates wealth in John Train’s book “Midas Touch.” The following are the top ten investment principles used by Buffett himself.

1. Buy a share as though you were buying the whole company. Determine how an enterprise is worth but do not rely on formal financial projections or mathematical formulae. Invest in “a business you understand, favorable long-term economics, able and trustworthy management, and a sensible price tag.”

2. Volatility does not create risk. A serious investor sees opportunity in volatility.

3. Value should include “growth at a reasonable price” or GARP. The ideal companies have a business “moat” that has steady and reasonably predictable growth. In the long run, these businesses are more tax-efficient and more convenient than one bought at a bargain.

4. Invest on what you know best. Refrain from seeking the “newest” thing because it is too risky. Buffett's biggest investments are firms founded in the 1800s, such as American Express, Wells Fargo, Procter & Gamble, and Coca-Cola. Said Buffett: “Startups are not our game.”

5. Avoid investing in bad industries, or turnarounds. It is not sound to invest in a business that requires a revival.

6. Seek out businesses that can reinvest at high rates of return over long periods. Avoid investing in low-margin businesses that require cash from you periodically and can expect only modest rates of return.

7. Do not sell a great stock just because it has doubled. Its value could go up when you least expect it, sometimes going up 20 or even 100 times during the next generation.

8. Never offer your own underpriced stock for the fully valued stock of an acquisition candidate. You will end up on the losing end of the bargain.

9. Avoid long-term bonds. Given how easy it is to inflate currencies, this is not a wise move.

10. Invest like a fanatic. Concentrate relentlessly on how you can transfer wealth to your own pocket.

KKR’s Ken Mehlman and the EDF: Green Portfolio Project

2009-08-17T09:43:00.001-07:00

You don't normally associate tree huggers and green activism with pinstripe suits and private equity financing, but Kohlberg Kravis and Roberts (KKR) is breaking stereotypes with its innovative Green Portfolio Project. KKR, led by the legendary financial wizard Henry Kravis, understands the Environmental Movement is not some momentary fad; recycling, renewable energy, energy efficiency, air pollution and waste reduction are fast becoming the normal way of life rather than an "alternative" way of doing things. Think of it this way...we don't think twice about women having the right to vote, or that the FDA ensures food and drugs are safe. But in their time of their implementation, these normal standards were considered radical and revolutionary. So it will be with Environmentalism. And KKR recognizes this<.a>.

KKR's Green Portfolio Project is a joint effort between KKR, the Environmental Defense Fund, and the companies in KKR's portfolio to adopt environmental best practices. Ken Mehlman, the Head of Global Affairs for KKR, recently announced how KKR is working towards a greener planet. KKR and the EDF have set up a series of environmental measuring tools to The first phase of the Green Portfolio project involved three companies: US Foodservice, Primedia, and Sealy Mattresses. US Foodservice saved $8.2 million in fuel costs and cut 22,000 metric tons of carbon dioxide emissions in 2008 by simply improving the efficiency of their truck fleet. Primedia, a publishing company, saved $2.9 million by reducing its paper use by 3,000 tons.

Ken Mehlman said these Green Portfolio initiatives were "good examples of how smart companies can cut costs and support the environment."

The Green Portfolio Project is still rolling along. Five more companies have joined the Green Portfolio: Accellent, Biomet, Dollar General, Hospital Corporation of America (HCA), and SunGard. (You can click on each company logo to get the details of their environmental initiates).

KKR's push for Green Investment was inaugurated in its surprising takeover of TXU, the Texas Utilities company. Cooperating with the EDF, Henry Kravis made sure TXU adopted several environmental principles, including reducing the number of coal-fired plants that company wanted to build. From that PR success, KKR saw the long-term wisdom of adopting green best practices. That's possibly why they hired on Ken Mehlman, former Republican Party Committee Chairman and an experienced environmental lawyer. You may or may not agree with Ken Mehlman's politics, but his organizational skills and environmental credentials can't be denied. Whether you're a Republican, Democrat, or independent, the future definitely hold stricter environmental standards, and Ken Mehlman will be the voice promoting this new movement in environmentally responsible investment.

So you want to make a surefire investment? I'd bullish on KKR and its Green Portfolio companies...and I bet Mother Nature is, too!

Recommended Reading: Private equity – Easing the barbarians through the gate: An excellent overview of KKR's ethical practices and new attitude towards responsible investing.

Ken Mehlman will be speaking at the Fortune Brainstorm Green 2010 conference.

Check out this video about the Green Portfolio Project entitled "Ken Mehlman of KKR and EDF Members Discuss Partnership"

The Procrastinator’s Guide to Budgeting

2009-08-14T11:01:00.000-07:00

When it comes to budgeting, there are two camps: those who keep track of what they spend and balance their checking accounts promptly, and those who keep putting off these tasks until tomorrow. Dayana Yochim of Fool.com wrote an easy-to-follow and systematic guide to govern everyday spending for the procrastinator.

Step 1: Take a snapshot of your spending
Be aware of your own spending habits. People who spend using their credit or debit card may review raw data from monthly statements. Those who pay in cash can write down their daily expenses. Using a spreadsheet, categorize your expenditures and be shocked at how much money you are throwing away.

Step 2: Plan your next shopping spree
Once the initial shock recedes, start working on your “spending plan.” Make a list of all the important purchases you need to make in the next three to six months, including physical purchases or financial plans. This simple list will serve as a tangible reminder of your money goals and keep you focused on what to spend on.

Step 3: Do some simple division
Identify what items on the list will run you on a monthly basis. Divide the total amount for that item by the number of months until you need them.

Step 4: Set up a no-brainer savings system
Keep your cash out of your spending reach. Create a separate savings account from the one you use for daily expenditures. In Step 3, you already computed how much you need to set aside monthly. Get help from your bank and set up automatic recurring cash transfers from your main account to the separate savings account.

Step 5: Stop mindless overspending
Use the “envelope” method of budgeting. Compute a reasonable weekly amount you will allow yourself to spend on (food, transportation, housing, entertainment). Create envelopes for each category and put the allotted weekly amount per envelope. Once the cash on that envelope is depleted, so is your stipend for the week.

The Investment Phases of LIfe

2009-08-13T09:23:00.000-07:00

Peter Freeman of Money Magazine summarizes the status, characteristics and investment strategies for different age groups. While there are differences in every group, all are bound to the same economic and investment climate. In the end, financial success depends on how we make decisions based on our assessment of risk and opportunities present.

The 20s: People are relatively new to the workforce and are semi-permanent, relationship-wise. The main concern is saving up for a home deposit or an appealing investment. Before they can start building wealth, the first step is to control or eliminate credit card debt. Building a deposit through investment in equity funds may be a good strategy.

The 30s: Most people in their 30s have settled down, have children and bought a home. The focus is how to reduce mortgage, do renovations, or upgrade to a better property. They are recommended to take out income insurance to counter the threat of downsizing. Moreover, they must save enough for emergency expenses. Single people in their 30s may engage in aggressive investments, including geared share funds or direct share or portfolio investments, with a great deal of caution.

The 40s: Financial comfort at this age group is reflective of how restrained spending was for the past decade. The 40s are a difficult time financially because the kids are grown and education is more costly. Budgeting is crucial. Those who have high incomes may, however, gear up for expanding their investment portfolio.

The 50s: At this time, the children are financially independent, family costs are reduced and salaries are higher. Wealth creation at this period is advantageous and favorable for establishing your own business.

The 60s and later: The 60s is a time to invest one’s savings to generate income during retirement, or to maximize age pension. Investments are usually built around how to allocate pension in order to maximize tax and social security efficiency.

Tax Advice from Roni Lynn Deutch

2009-08-12T13:54:00.000-07:00

I ran across this interesting video on the Wall Street Journal. It's an interview featuring the remarkable "Tax Lady," Ms. Roni Lynn Deutch. (I'm linking to her amazing blog, which has a plethora of great tax and financial advice.

In addition, Roni Lynn Deutch offers six options for the tax-wary Americans indebted to the IRS. Roni Deutch suggests resolving tax debts immediately in order to avoid burdensome penalties and interests that go with delays. After checking the numbers on the tax bill, one may choose from among these six options:

1. Pay in Full. Deutch says this is better than “IRS collections hounding you day and night, putting liens and levies on everything you own.”
2. Offer in compromise. If full payment is not doable, an offer in compromise, or paying a lump sum for a smaller amount than was originally owed, could help.
3. Installment agreement. The IRS will calculate based on your income less your “allowable expenses” to determine how much your monthly payment will be.
4. Streamlined installment agreement. Streamline installment agreements apply to tax bills under $25,000 and based on the amount to pay off taxes within five years or less.
5. Currently not collectible. The IRS will stop squeezing money out of you if you prove your money is exhausted on “living expenses.”
6. Wait it Out. Although tax debts expire 10 years from the date of assessment, this might be a gamble on your part since the IRS is shrewd and may extend the life of your tax bill.

Roni Lynn Deutch has written several articles in Women Entrepreneur, including how to prepare audit-ready tax returns and keeping good tax records.

And did you know Roni Lynn Deutch was the first girl to play in an all-boy's Little League in California? No kidding!

Ten Best Nuggets of Financial Wisdom Ever

2009-08-12T11:43:00.000-07:00

Some of the world’s experts, money managers, and ordinary folk who have had experience share some of the best financial tips ever on saving money, spending money, and building wealth. I found these words to live by on MSN's Money Central site at http://articles.moneycentral.msn.com/SavingandDebt/SaveMoney/TheBestFinancialAdviceEver.aspx. Enjoy!

“No matter how much or how little you make, always save a little bit.” Whatever money comes your way, you should make sure to set some aside. You can never be too broke to save.

“Live like a broke college student.” Young people tend to find the most affordable ways to live. Do with less in order to save money.

“Know the difference between needs and wants.” Control your spending. Distinguish real needs and mere wants. Ask yourself “What do you need that for?” before you spend your money.

“Think of the true cost.” Before purchasing an item, think of the true cost – the price tag plus time and energy you will expend over the item.

“Don’t co-sign a loan.” Co-signing a loan puts your good credit in the hands of someone who could smear it by with a single late payment.

“If you need more money, then go out and make more money.” The fastest way out of debt and into building wealth is to generate more income.

“You pay in advance for capacity.” Don’t drive yourself crazy. Hire and pay someone to help you out to make your small business grow.

“Own your own business - including the building it's in.” Money manager David Bach learned that the wealthiest owned their own businesses, including the buildings, which eventually ended up valuing more than the business.

“Don't gamble more than you can afford to lose.” Control risk whenever you can. Be realistic when you do take it.

“Prince Charming isn't coming.” Don’t rely on other people to save you from financial woes. In order to achieve financial security, your only armor of protection is you.

Five Things to Learn From the Rich

2009-08-11T13:42:00.000-07:00

Many of us may not live to be as wealthy as George Soros or Donald Trump, but there are habits that we can learn from affluent people in order to achieve financial freedom, and possibly, become millionaires as well.

1. They give back to charity. The wealthy tend to give away more, as a way of paying it forward for the financial success they reaped. Households with assets worth at least $500,000 donated 6% of their incomes in 2004, while those having a net worth of more than $5 million gave away 6.1%.
2. They own businesses. Surprisingly, the Federal Reserve estimates that over 12% of American families own all or part of a privately-held enterprise. The wealthy tend to own closely-held or family-owned businesses, and go forward with diversification once their wealth becomes too concentrated in a single investment.
3. They borrow strategically. The extremely rich tend to owe less money than the average person or owe installment debt. They are more likely to have mortgages than average households and carry more real estate loans than the general population. Although most of them own their homes, they nonetheless invest in real estate expecting higher rates of return.
4. They do not blow a lot of money on cars. With a few exceptions, the rich spend only a small proportion of their wealth on vehicles, roughly 2.4% of their net worth according to the Federal Reserve.
5. They are almost always homeowners, and many own investment property, too. Almost all people in the upper 10% own their homes. Almost 40% of them invest in real estate, but the bulk of their wealth comes from investments. The rich apportion their wealth as thus: 46% (stocks and bonds, managed accounts, IRAs, mutual funds, deposits and alternative investments); 10% (pensions and defined-contribution plans like 401(k)s); 6% (insurance and annuities).

To achieve a richer life, one must take strategic risks, give back, live within your means, and invest.

You can read up on other prominent financial leaders in my other site, Private Equity and Finance News.

Hottest Stock Tips

2009-08-10T11:16:00.000-07:00

The market is seriously volatile as we enter the latter stages of the Great Recession. I say "latter stages" because I'm confident our economy will eventually recover. There is just too much innovation and wide open markets for the market not to recover.

But the world of finances is going through a massive shift right now. I would say the markets are going through the biggest shift since the mid 1980s, when technology stocks starting coming to forefront and changing the way private equity flows. There are several industries to watch out for, and the sky's the limit on these growth markets.

1. Green/Renewable Energy: President Obama has called on massive government investment in green energy, including wind, solar, and geothermal options. So I would say "buy" for established companies that are expanding green energy, such as GE, First Solar, and Siemens. There are some excellent websites that are devoted to the subject of green energy, such as Seeking Alpha and Green Chips Stocks. Electric cars are hot commodities, too. Check 'em out!

2. Private Equity Companies. After the economy bottomed out last year, private equity firms such as The Blackstone Group, Carlyle, and Berkshire Hathaway took a serious hit. But now as the stock market is recovering, private equity firms are part of America's return to prosperity. For example, The Blackstone Group, led by Wall Street legend Stephen Schwarzman stumbled to an all-time low of 3.55...and now it's trading for nearly $15. And it's still proably going up. Even investment firm villain AIG, now helmed by Robert H. Benmosche is not doing too doing too badly. From a low of $3, it's now at a robust $28. Keep looking for private equity firms to make big gains in the year.

3. Technology Stocks: Companies like Dell, Microsoft, and Intel took a big hit during the Great Stock Crash. The companies remain profitable and stable, and were only innocent passerbys as their worthy stocks were dragged down. Now their stocks are recovering, and are still are a bargain.

In conclusion, I feel the stock market will continue to regain as the economy slowly gets back on its feet.

A Scientific Way of Saving Money

2009-08-10T11:05:00.000-07:00

A Scientific Way of Saving Money

Understanding the fundamentals of how money behaves can help us control and accumulate it. One way to do this is to view money as nothing but a form of energy. Using principles of energy, there is a scientific way of ensuring personal savings.

Rule 1: Energy attracts more of itself. If you are currently in debt, there is a possibility of attracting more debt. Similarly, if you have money, you will attract more of it. In order to attract more money, you must first accumulate it. This will start a chain reaction and allow you to accumulate more wealth.

Lesson 1: Open a savings account. This is an important step to building wealth because it gives the money somewhere to go.

Rule 2: Energy follows the path of least resistance. This means that money naturally flows to the areas that are of immediate need. Essentially, it is you who decides where the money goes and how much needs to be allocated. The more needs you identify, the more money is expended. Wealth is accumulated only when inflow exceeds outflow. Thus, in order to accumulate wealth, fewer needs should be identified.

Lesson 2: Prioritize your needs. People have varying needs, but those who tend to accumulate more wealth are those with very few needs. Those who live beyond their means tend to end up broke or bankrupt.

Rule 3: Energy requires exchange. In order to receive something, something must be given in exchange. You simply cannot gain from nothing. This may explain why people who are banking on the quick way to earn the buck, such as lottery tickets or slot machines, invariably end up broke. Those who do win in the lottery also tend to lose them all back. Accumulating wealth by chance is not sustainable.

Lesson 3: Invest and manage your money well. Wealth is acquired by employment, savvy investments and good management. The more you give, the more you will receive.

Seven New Tips Toward Financial Security

2009-08-05T11:59:00.000-07:00

How can you become financially secure considering the current chances in economic climate? Money Magazine keyed in tools on understanding the risks that the new economic climate poses including tips on adjusting to them in order to attain financial security. The article challenges people to get rid of old assumptions and take in new ones. It highlights seven new ways to achieve financial security.
Risk tolerance is about making or missing an important goal. Analyst T. Rowe Price suggests that relying on the volatility of the markets is not a wise move. The market lesson is: weigh the amount of risk you can lose and still meet your basic goals.

Save and rely on cash more. Analysts recommend redefining the scope of savings to include significant expenses such as tuition, a wedding, or a down payment on a house. Build an emergency fund before anything else. Consider your earnings potential. Instead of focusing on stocks and investments, think about human capital, or your capacity to earn while working on a job. Evaluate how secure your human capital is and make adjustments. Borrow cautiously. Be very conservative in borrowing for a mortgage or for college. Get a mortgage you can afford and put a 20% downpayment. Be wise about owning a home. Face the fact that owning a home will not make you rich but it has advantages. Have modest expectations when you do decide to purchase a home. Diversify. The best way is to go out and buy 16 new mutual funds that can kill two birds with one stone. T. Rowe Price recommends investing 20% of assets in emerging markets and the remainder in developed countries. Do not retire early. Delaying retirement for one year can increase your retirement income by 9%.