I have always found high dividend yielding stocks to be attractive as long as the company has the balance sheet and cash flow to support that dividend, but this week’s Federal Reserve decision makes them more attractive than ever. Why is this the case? Let’s look at the alternatives you have right now. Certificates of Deposit as well as Money Market Savings Accounts are both going to be yielding extremely low amounts in the coming months as the prime rate will be so low that banks simply cannot afford to offer an attractive yield. Treasury bonds are as safe as can be, but they have recently been trading at around 0, which obviously is simply a safety trade and won’t net you any money.

Which high dividend yielding stocks should you avoid? Avoid high dividend yielding stocks that are yielding such a high amount primarily because their stock price has fallen so drastically. Also, avoid dividend paying stocks that are losing money and/or trying find ways to raise new capital for their operations. If a company is needing to raise money to stay in existence do you really think their dividend is safe?

Companies with a solid balance sheet and strong free cash flow are your best friend when it comes to high dividend yields. I also find consistency to be a tremendous key to showing the strength of their business. There are some companies who have raised their dividend payouts consistently for over 40 years straight. These are the types of companies that should help investors in the long run.

A high dividend yielding stock isn’t necessarily immune to the markets volatility, but it does have a nice cushion to it because of the safety net of the cash on hand and the dividend payout. The bottom line here is that the best dividend paying stocks are going to be a very valuable asset that earns more than any savings account or certificate of deposit will, and if the company is solid through economic pressures you also have the opportunity for price appreciation. Consider high dividend yielding stocks in lieu of other investments that are less attractive with interest rates at zero.

Today, automakers got the life line from the government. It might save them and their employees. Other companies that went bankrupt recently were not lucky. Hundreds of thousands of workers lost the jobs because the companies entered bankruptcy. What will happen to the pension, 401k and health benefits of the employees if their companies are bankrupt?

Pension plans of bankrupted companies can’t be touched by creditors by federal law. Pension Benefit Guaranty Corporation insures the pension plans.

401k plans are also shielded from creditors by federal law. However, there is no insurance for 401k plans. If you made some poor choices in your 401k plan of if you have invested heavily in your (bankrupted) company’s stock, your 401k will suffer.

If the company files for Chapter 7 bankruptcy, your health benefits will be gone immediately. You will have no health insurance coverage at that point. However, if a company files for Chapter 11 bankruptcy, the health benefits will still continue for the employees. If health benefits are taken away from the employee, he/she should still be eligible for COBRA although the premium will be lot more expensive. If your spouse is working, it’s better to add yourself to your spouse’s health plan rather than opting for COBRA.

The current economic meltdown has taught us a number of things and I think one of the foremost things it will teach many people is that we must be very careful with our investments and our hard earned life savings. Investing your savings is certainly a good idea, but before you invest there are several things you should do. I put together a top five list of things to do before investing:

1. Know what you are investing in- This one is obviously the most important. Please make sure you never invest in something you don’t understand. If you don’t understand it, you shouldn’t be putting your money in it.
2. Figure out your time horizon- The way you invest will be very dependent on what kind of a time horizon you have for those investments. Sit down and think about when you might need that money and plan accordingly.
3. Understand your risk tolerance- The fact of the matter is some people can just handle more risk than others. Don’t invest in the stock market and as soon as you see it drop quite a bit decide it isn’t for you. Understand going in that the stock market has its swings and you have to be able to tolerate them if you want to invest in it.
4. Make sure you can diversify- Diversification is a huge key when investing your money, especially in things like bonds and stocks, so you need to make sure that you are able to keep your portfolio diversified. If you have a small amount of money you might want to consider a mutual fund.
5. Find the best broker for you- If you are going to be controlling your own investments then you should consider an online broker with low fees. If you need a financial advisor then look for one who will be able to implement the plans you have for your portfolio.

These five things need to be done BEFORE you invest your money. A common mistake among investors is to get so excited about investing and earning money that they forget these basic and important steps. Don’t let yourself make that mistake!

Wake up and Refinance! That’s the message given by Fed when they cut the key interest rate to almost zero. American public realized that and rushing to refinance their mortgages according to Yahoo Finance.

If you have good credit score (700 and above), you may even get 4.5% rate. That’s fabulous! Watch out for any charges levied by banks to refinance. You need to calculate your expenses and savings if you do refinance at current rates and make sure that refinance makes sense. In most cases, refinancing at current rates will make good sense. If you have lower outstanding balance and if your bank charges you extra fees to refinance, you may need to think twice.

Even if you don’t have great credit score, the rates are still good — around 5.4% according to bankrate.com. You can search for your local mortgage rates in Bankrate’s homepage.

Not only for refinance, it’s good time to buy your first house if you live in an area that is not much hyped up by real estate bubble. If you have good credit, good job and if you are able to find an affordable house, then go for it! It’s the time!!

Your personal savings is a very precious thing to you, so you obviously want to make the best choices of how to best invest your money and have it appreciate over time. A question I hear quite often is, “Should I invest my own money or find a financial planner to do it for me?” The truth is there is no single correct answer to this question, because it depends on the individual circumstances?

The truth is there are a lot of benefits to investing your own money if you are highly skilled at it, since you can reduce your overhead and get rid of the middle man. The problem is that many people manage their own investments when they really have no business doing so.

Things you should consider before investing your own money

• Do I have enough time to devote several hours a week to research of my investments?
• Can I do just as good of a job as my local financial planner at growing my investments?
• Will I be able to keep emotions out of investing decisions?
• Do I have a solid knowledge of all types of assets and the ability to decipher which asset class might be the best buy at any particular time?

If you answer no to any of these questions you may want to consider finding a financial planner to invest your savings. Your hard earned savings is not something to take lightly, so make sure you think long and hard before making any decision. If you choose to try to find the top financial planner, then you need to talk to them and let them precisely what your goals are for the money. The more you tell them about how you want the money invested the more they will be able to help you in the long run.

For some people its a no brainer, invest your money yourself because you know your personal goals better than any planner. For other people a financial planner who keeps your goals in mind can be a great partner to work with.

It was unthinkable even few months ago. U.S. is heading in the direction of Japan in terms of interest rates. Whether it’s necessary to reduce the interest rate to zero is debatable. But, the fact is interest rate is almost zero in U.S. today.

How it would affect you? There is good news and bad news depending on your specific situation. If you have mortgage on your house, it’s time to refinance. When the Fed reduces key interest rate, mortgage rate doesn’t really automatically fall down. Still, there is a high chance that mortgage rate would fall down by at least 0.75% in the near future. Refinance your house, it will save you lot of money.

If you owe any credit card debt or any other kind of debt, it’s time to refinance that as well. Talk to your lenders to reduce the interest rate on your debt. If your lender doesn’t agree to reduce the interest rate, find another lender that is willing to offer lower rate for you.

If you had parked your money in variable rate CDs, you will receive less interest. If you have invested in fixed rate CDs for a specific time frame like 6 months, you will be ok until the CD matures. When the CD matures, it will be reissued for the prevailing market rate at that time. If you have CDs maturing in the next few weeks, watch it out. If you don’t do anything, those CDs will be automatically reissued by the banks for the current lower interest rate.

We are entering a period of deflation. In inflationary period, the prices will increase. In case of deflation, prices will decrease. Decreasing price is good for the consumers. But, deflation is also an indication of serious pain in the economy. We can’t really control what the policymakers in Washington do. However, we can control and tailor our investments based on changes in economic environment.

Related Link: Fed cuts interest rates to virtually zero

Today the Federal Reserve took the unprecedented step to lower interest rates to what they call a “target range of 0 to 0.25%.” The central bank said that rates would need to be kept low for quite some time. Most economists and strategists believe that the historic move by the Fed today was largely to boost morale in the markets. At least for one day it worked, as the Dow finished the day higher by 359 points after the surprise announcement. Whether the enthusiasm on Wall Street will continue for very long is certainly something that is very unclear.

Not only did the Federal Reserve lower the fed funds target rate, but they also announced they will be buying treasuries as well as credit card debt and student loans. In the Federal Reserve’s statement they seemed to foresee that the biggest role they can play in helping turn around this ailing economy is through asset purchases in specific areas which they believe will serve to support economic activity.

What can consumers expect after today’s announcement? Borrowing money will be extremely cheap, so if you want to borrow for any kind of investment or purchase, you can expect to pay a whole lot less than you ever have before. On the flip side of things, those who have money in investments such as certificates of deposits will notice that the banks will be offering much lower yields on these safe investments. For every move that the Federal Reserve makes there is always someone who will benefit and someone who will suffer. In the long run I understand the Federal Reserve’s decision to lower interest rates to the lowest point ever, but I also believe that when the economy starts to recover the Fed should move quickly to bring rates back to reasonable levels. Why is this important? Many, including myself, believe that low interest rates contributed to the housing bubble that has currently burst and brought our economy with it. Take advantage of these lower borrowing costs if you have a specific need, but otherwise save up and get through this severe recession.

It’s becoming harder to see a honest person in Wall Street. Even the former Nasdaq chairman is involved in rogue ponzi scheme that duped $50 billion from investors. fifty billions dollars! Probably this is the largest fraud in ponzi scams.

Bernard Madoff was the chairman of Nasdaq stock exchange. He was well respected in financial community. People like Sen. Frank Lautenberg, Real estate magnate Mortimer Zuckerman, Movie director Steven Spielberg, DreamWorks Animation SKG Inc. Chief Executive Jeffrey Katzenberg and Nobel laureate Elie Wiesel trusted him. Billionaire Carl Shapiro believed in Madoff’s integrity and trusted him with $500 million+.

Bernard Madoff tricked all of them and the financial institutions’ regulators. He effectively ran a ponzi scheme to pay high returns to his investors.The beauty of this is that even the most skilled investors didn’t doubt Madoff’s investing methodologies.

Wall Street Journal reports that Madoff played the options game. He claimed that he sold and bought thousands of option contracts per day. But, the total number of option contract transactions, carried out in the exchange in that time period, was far less than what he claimed to trade. Some investors may get the money back because of SIPC insurance. SIPC covers upto $500,000 per customer. If someone lost $500 million+ in Madoff’s fraud, it would be hard to get anything back.

In 2000, Madoff served on the government’s Advisory Committee on Market Information, established to protect investors by ensuring accurate and full public disclosure of information to them. He was just an advisor. Advisors don’t need to follow their own advice, I guess.

Related Link: Fund manager in the scandal

The current state of the market hasn’t lent itself to people being overconfident and investing on borrowed money, but one this is for sure, there will be plenty of investments made on borrowed money. While this may seem to many as too blunt of a statement I firmly believe that those who invest using margins, or borrowed money, are very foolish.

Why is investing on borrowed money foolish? The very first reason is simple, the market has a way of humbling those who are overconfident about how well they can do. You may think you are the best investment guru in the world and things may look great for quite some time, but it can all come crashing down in a hurry, just like it has for many this year. By investing on margin you are greatly increasing your chances of running your entire portfolio into the ground. Always remember, if you invest on margin, margin calls can kill you in a hurry. This is because if the investment loses a lot of ground the lender will issue a margin call and require more capital immediately.

Let’s be clear, investing on borrowed money isn’t just a bad idea in the stock market, it’s a bad idea overall. Investing on borrowed money in things like real estate or commodities is also very foolish. Remember, when borrowing money, you’ll still owe the interest on the loan even if your investment goes down in a big way.

Recently many major company managers have learned the hard way that investing on margin can run a company into the ground. Manager after manager decided that their stock was far too cheap and they borrowed from the balance sheet to buyback shares, only to have it come back and bite them. As wise investors of our money let’s not repeat the mistakes of these bigwigs. Save up your money and invest it all you can, but please don’t invest on borrowed money!

This is a hot topic. There are literally hundreds of thousands of website owners that try to find the secrets of how to make tons of money using google adsense. There are thousands of people that try to capitalize on this gold rush.

Recently, I came across a website that promises to teach you how to make $40,000 per month using Google Adsense. There is no typo. It’s forty thousand dollars per month. I don’t want to give the website’s name because I don’t want to give them free publicity. There are similar websites all over the Internet. All of them are trying to sell the “secrets”. Many people fall for this and pay $$ to get an e-book that just reproduces the free information that is already available in the Internet.

Ok, let us go back to our case study website. Let me point out how these websites scam people and how they make money. The $40,000-per-month-adsense-secrets website start the pitch like the one below.

First, the website owner throws a big number to get your attention. $40,000 per month. That’s something! He also promises that he will give you his website to copy. So, you get a feeling that “wow.. it doesn’t look like hard work… I just copy his website and make $40k!”.

When your mind is conditioned to believe this guy, he shows his adsense earnings for a month.

He made $41,278 in November. We don’t know which November it was. He also claims that he made all the money from the website designed to sell his pitch. He is also showing the page impressions, clicks and page CTR (click thru rate) for his adsense ads. It’s against Google Adsense’s policy to reveal the CTR numbers, he doesn’t seem to worry about that. Next, he throws strong marketing message — you will make more money than many CEOs!!

Oh…yeah..if you do make $40,000 per month, you would make money more than many CEOs of small companies. But, the question is can you really make $40,000 per month just by having a website (that too copied from someone) and putting adsense in it? Obviously, the answer is “No”.

How can this guy do it? How can he make $40,000 per month using adsense? The secret lies in the example pages he gives away all over in his marketing page.

When you click to see the example web page as shown above, you will see a page that is filled with adsense ads. When people click on it, this guy makes money. This guy might have similar “adsense secret sauce” websites where the adsense ads are shown in the same way. All the websites contribute $40,000 per month, if we believe his snapshot of the earnings.

At the end of his marketing page, he sells his secrets for $97. Basically, he is going to give you a website and content to copy. You pay $97 for the content and put the adsense ads in your new website… and you expect to make $40,000 per month. Then, you would realize that you don’t even have anyone visiting your new website — let alone someone click on the ads.

See.. the problem is that this guy is selling the same content and same website to anyone that pays $97. So, there would be hundreds of websites that look exactly or almost similar. Google or any other search engine won’t even add those websites in their index because of duplicate content. Google slaps duplicate content penalty as soon as it recognizes it. It would be a total waste of time and money to pay $97 to someone just to copy his website and content.

It’s quite possible that “adsense-secret-guy” would make more money by selling his secrets than thru adsense ads.  Next time, if you see any website that promises to teach you adsense secrets and tips, you would know what to expect.

Is there a real, genuine way to make money using google adsense? Yes. You don’t need to pay $97 to learn the secrets. Create a good website that has rich, original content every day. Market the website. Form a great team of people that contribute quality content to your website. Make your website useful to the visitors. All of this is going to cost money. Prepare to spend the money, provide a useful website to your visitors and place the adsense ads in your website. At this point, you will start making money using Adsense. Even then, it is going to take long time before you get closer to $40,000 per month target!