We can't emphasize this enough: If you have a long-term time horizon, then right now is the best time ever to put your money to work in the stock market.
And who has more time to weather the market's ups and downs than anyone? Kids!
Here's how to get them started investing in stocks:
Accounts for kids
Minors cannot enter into any legally binding contract, so here are your other options, from most to least formal:
An UGMA (Uniform Gift to Minors Act) account: Set up by a custodian (parent, guardian, or other adult), this account legally belongs to the minor, but Junior can't take control of the dough until age 18 or 21, depending on the state (the custodian can also withdraw it earlier on the youngster's behalf).
A joint brokerage account: This lets you hand over the keys to the account when the little one turns 18. Until then, the adult is legally in charge. Because of tax issues, such as capital gains, the key is whose Social Security number is on the account. We suggest that unless you're dealing with a child star, use the kid's SSN -- you're probably in the higher tax bracket.
"Piggybacking" on your account: This is a more informal arrangement where your kids "buy" stocks and funds through you. (If you're feeling particularly generous, offer to pick up the tab for taxes and transaction costs, too.) When the children turn 18, you can then transfer their shares into their very own brokerage account. In the meantime, set up a virtual portfolio (try Yahoo! Finance) so the kids can track their portion.
When setting up these accounts, pay attention to housekeeping details: You'll need the child's full name, address, and SSN. If Junior is commingling shares with you, keep track of which shares belong to whom.
Friday, December 26, 2008
Online Coupons Catching On
On the Internet, nothing travels faster than a tip on how to score a bargain. Especially in an economic downturn.
With online retail sales falling this month for the first time, Internet merchants are offering steep discounts to anyone willing to punch in a secret coupon code or visit a rebate site for a "referral" before loading up their virtual cart.
Shoppers obsessed with finding these bargains share the latest intelligence on dozens of sites with quirky names like RetailMeNot.com, FatWallet.com and the Budget Fashionista. And more consumers than ever are scanning the listings before making a purchase at their favorite Web site.
Some online shoppers are so good at this game that they almost never buy anything at full price, making them the digital era's version of bargain hunters who used to spend hours clipping coupons to shrink their grocery bills.
Tavon Ferguson, a 25-year-old graduate student in Atlanta, became obsessed with finding online deals last spring, while planning her July wedding. She scoured the Web for coupons and got free save-the-date cards, $8 bracelets for her bridesmaids and free shipping on flash-frozen steaks for the rehearsal dinner.
"I was able to do my wedding at a price that nobody would even guess" -- $6,000, all included -- "because everything down from invitations to the photo album, I got for ridiculously low prices with online coupon codes," Mrs. Ferguson said.
Her favorite sites include RetailMeNot.com, which has one of the most comprehensive lists; CouponMom.com, which includes coupons for physical stores; and CouponCode.com, which is organized by category.
Mrs. Ferguson may be more fanatical than most people, but surfing for online coupons is growing in popularity. In October, 27 million people visited a coupon site, according to comScore Media Metrix, up 33 percent from a year earlier.
When Scott Kluth started CouponCabin, some retailers were displeased. Now stores send him a thousand codes a week.
"Coupons had never been a big factor online the way they are offline. This is something new," said Gian Fulgoni, chairman of comScore. "It's taken pricing power away from the retailers and given it to the consumers, because the consumer is totally up to speed on what the prices are." Retailers have mixed feelings about this shift.
Generally, companies prefer limited discounts, e-mailed to a select group of customers or sent inside packages with a purchase. When the coupons get wider exposure, retailers lose control, potentially costing them more money than they expected.
Two years ago, Sierra Trading Post, a site that sells overstock outdoor gear, sent a coupon code with 1,000 of its 50 million catalogs, expecting to generate $2,000 in sales. Instead, it led to $300,000 in sales after a customer posted it online.
"We certainly appreciated the sales, but sales with that code were at a very low margin," said David Giacomini, director of catalog operations for the company. Sierra Trading now sends some coupons directly to Web sites and limits catalog codes to three uses.
Some retailers try to battle the coupon sites. Harry & David, a seller of fruit baskets, threatened legal action against RetailMeNot.com this spring for publishing its discounts, prompting the coupon site to steer visitors to other gift-basket companies. William Ihle, a spokesman for Harry & David, said that all of its deals were available on its own site and the coupon sites "disingenuously mislead the consumer" by posting expired or unverified discounts.
Other retailers use the coupon sites as marketing tools. For example, when Scott Kluth founded CouponCabin in 2003, he had discounts for only 180 stores, and many of them did not like it. Today, 1,300 merchants, including Dell, Target, Home Depot and Victoria's Secret, send him discount codes -- totaling about a thousand a week.
"They have seen the power of a coupon, in this economy especially, and they're absolutely embracing us," Mr. Kluth said.
Most of the sites list coupon codes submitted by readers and retailers. Shoppers can comment on whether the coupon worked and share tips in user forums. Some sites e-mail coupon lists to subscribers. RetailMeNot.com goes further with an add-on to the Firefox browser that alerts users when an e-commerce site they are visiting has a discount.
Many of the coupon sites are run by Web entrepreneurs who see a business opportunity in collecting online discount codes at one site. They earn a commission from the retailer when a customer makes a purchase. Sites like FatWallet.com and Ebates offer shoppers cash back on purchases if they sign in and then click through to the retailer.
But other discount aggregator sites were started by passionate shoppers eager to share their bargain-hunting wisdom. Kathryn Finney began Budget Fashionista in 2003, when she finished graduate school and found herself broke and newly interested in bargains. Now, "it's in my blood," she said. "I cannot physically pay full price."
Ms. Finney's site was originally aimed at friends and family, but it quickly developed a following that has spiked 60 percent since August to 550,000 visitors a month. "We're gaining a whole new level of fans, who maybe weren't budget shoppers last year," Ms. Finney said. Her site now makes money through advertising and referral fees.
Among her coupon-scouting tips: search the name of an online store and the word "coupon" and compare the promotions, because bigger sites are often able to negotiate better offers; if you find a coupon for an offline store, call the Web site and ask it to match the price; and insist upon free shipping, even if it means calling the manager and asking for a coupon code.
Deborah Dockendorf, a power Web shopper in Chicago, has another piece of advice: if you cannot immediately find a coupon code for a specific store, just wait. "It might be two weeks, but you will have a code for it," she said.
Even though Ms. Dockendorf lives near the department stores of Michigan Avenue and the boutiques of Oak Street, she says she does 98 percent of her shopping online -- always with a discount. She recently bought six pairs of $45 Wolford opaque stockings from Saks Fifth Avenue with a 40 percent discount and free shipping. She also snagged a $400 feather bed at half off from Pacific Coast Feather Company.
"I used to feel a little embarrassed about using them, like I was one of those coupon queens at the grocery store," she said. "But now there is not a day that goes by when a friend doesn't e-mail me for codes, and if I don't have one, I can find one for them soon."
With online retail sales falling this month for the first time, Internet merchants are offering steep discounts to anyone willing to punch in a secret coupon code or visit a rebate site for a "referral" before loading up their virtual cart.
Shoppers obsessed with finding these bargains share the latest intelligence on dozens of sites with quirky names like RetailMeNot.com, FatWallet.com and the Budget Fashionista. And more consumers than ever are scanning the listings before making a purchase at their favorite Web site.
Some online shoppers are so good at this game that they almost never buy anything at full price, making them the digital era's version of bargain hunters who used to spend hours clipping coupons to shrink their grocery bills.
Tavon Ferguson, a 25-year-old graduate student in Atlanta, became obsessed with finding online deals last spring, while planning her July wedding. She scoured the Web for coupons and got free save-the-date cards, $8 bracelets for her bridesmaids and free shipping on flash-frozen steaks for the rehearsal dinner.
"I was able to do my wedding at a price that nobody would even guess" -- $6,000, all included -- "because everything down from invitations to the photo album, I got for ridiculously low prices with online coupon codes," Mrs. Ferguson said.
Her favorite sites include RetailMeNot.com, which has one of the most comprehensive lists; CouponMom.com, which includes coupons for physical stores; and CouponCode.com, which is organized by category.
Mrs. Ferguson may be more fanatical than most people, but surfing for online coupons is growing in popularity. In October, 27 million people visited a coupon site, according to comScore Media Metrix, up 33 percent from a year earlier.
When Scott Kluth started CouponCabin, some retailers were displeased. Now stores send him a thousand codes a week.
"Coupons had never been a big factor online the way they are offline. This is something new," said Gian Fulgoni, chairman of comScore. "It's taken pricing power away from the retailers and given it to the consumers, because the consumer is totally up to speed on what the prices are." Retailers have mixed feelings about this shift.
Generally, companies prefer limited discounts, e-mailed to a select group of customers or sent inside packages with a purchase. When the coupons get wider exposure, retailers lose control, potentially costing them more money than they expected.
Two years ago, Sierra Trading Post, a site that sells overstock outdoor gear, sent a coupon code with 1,000 of its 50 million catalogs, expecting to generate $2,000 in sales. Instead, it led to $300,000 in sales after a customer posted it online.
"We certainly appreciated the sales, but sales with that code were at a very low margin," said David Giacomini, director of catalog operations for the company. Sierra Trading now sends some coupons directly to Web sites and limits catalog codes to three uses.
Some retailers try to battle the coupon sites. Harry & David, a seller of fruit baskets, threatened legal action against RetailMeNot.com this spring for publishing its discounts, prompting the coupon site to steer visitors to other gift-basket companies. William Ihle, a spokesman for Harry & David, said that all of its deals were available on its own site and the coupon sites "disingenuously mislead the consumer" by posting expired or unverified discounts.
Other retailers use the coupon sites as marketing tools. For example, when Scott Kluth founded CouponCabin in 2003, he had discounts for only 180 stores, and many of them did not like it. Today, 1,300 merchants, including Dell, Target, Home Depot and Victoria's Secret, send him discount codes -- totaling about a thousand a week.
"They have seen the power of a coupon, in this economy especially, and they're absolutely embracing us," Mr. Kluth said.
Most of the sites list coupon codes submitted by readers and retailers. Shoppers can comment on whether the coupon worked and share tips in user forums. Some sites e-mail coupon lists to subscribers. RetailMeNot.com goes further with an add-on to the Firefox browser that alerts users when an e-commerce site they are visiting has a discount.
Many of the coupon sites are run by Web entrepreneurs who see a business opportunity in collecting online discount codes at one site. They earn a commission from the retailer when a customer makes a purchase. Sites like FatWallet.com and Ebates offer shoppers cash back on purchases if they sign in and then click through to the retailer.
But other discount aggregator sites were started by passionate shoppers eager to share their bargain-hunting wisdom. Kathryn Finney began Budget Fashionista in 2003, when she finished graduate school and found herself broke and newly interested in bargains. Now, "it's in my blood," she said. "I cannot physically pay full price."
Ms. Finney's site was originally aimed at friends and family, but it quickly developed a following that has spiked 60 percent since August to 550,000 visitors a month. "We're gaining a whole new level of fans, who maybe weren't budget shoppers last year," Ms. Finney said. Her site now makes money through advertising and referral fees.
Among her coupon-scouting tips: search the name of an online store and the word "coupon" and compare the promotions, because bigger sites are often able to negotiate better offers; if you find a coupon for an offline store, call the Web site and ask it to match the price; and insist upon free shipping, even if it means calling the manager and asking for a coupon code.
Deborah Dockendorf, a power Web shopper in Chicago, has another piece of advice: if you cannot immediately find a coupon code for a specific store, just wait. "It might be two weeks, but you will have a code for it," she said.
Even though Ms. Dockendorf lives near the department stores of Michigan Avenue and the boutiques of Oak Street, she says she does 98 percent of her shopping online -- always with a discount. She recently bought six pairs of $45 Wolford opaque stockings from Saks Fifth Avenue with a 40 percent discount and free shipping. She also snagged a $400 feather bed at half off from Pacific Coast Feather Company.
"I used to feel a little embarrassed about using them, like I was one of those coupon queens at the grocery store," she said. "But now there is not a day that goes by when a friend doesn't e-mail me for codes, and if I don't have one, I can find one for them soon."
The Six Best Budgeting Sites
Get your financial house in order and online.
With the slow economy and fast-approaching holidays, keeping track of your money can be like a stomach-churning roller-coaster ride.
If you haven't already done it, now is the time to get your finances under control. The World Wide Web seems to crank out a new budgeting site every time there's a dip in the Dow. So to help settle your stomach and your accounts, we've picked the best Web sites to help you set a steady course for spending and saving.
For a fresh view of your big financial picture, Mint.com is my favorite. The online money-management tool lets you easily track all your accounts: checking, savings, credit, loan and investment. Signing up is fast and free; to get started, you need only provide an e-mail address and zip code, then select a password.
Next, link up your accounts. The site connects to more than 7,500 U.S. financial institutions and is adding more. You have to provide user names and passwords for all your bank accounts, but don't worry: The site maintains a secure connection. All user names and passwords are encrypted so that no one at Mint ever sees them. And you don't provide the site with any personal information besides your e-mail and zip code.
Mint updates all your accounts at least once a day and automatically labels each expense with a category -- groceries, credit-card payments, gas and so on. You can use customized tags to create more-specific categories, and you can add notes to each transaction. The site also offers personalized savings tips, such as suggesting better credit cards for cash rebates and travel rewards.
Mint's sleek screens make even the ugliest of finances just a little bit prettier. Under the Trends tab, the Where You Spend pie charts break down your expenses into a rainbow of categories. Click on a slice and you'll see a new, more-detailed pie chart with its own slices. For example, the food-and-dining category splits into groceries, restaurants, fast food, coffee shops and the like. And the site's SpendSpace bar graphs let you compare your spending habits with average outlays of people in selected cities or states -- or the whole country.
Unfortunately, you can't manually add transactions to your Mint account, so you can't project future costs or tally any extra cash or expenditures. To remedy the latter issue, the site suggests you split ATM withdrawals into separate cash transactions. The Mint's support forums are another weak aspect of the site.
If you're more interested in an online community, i suggest Geezeo.com or Wesabe.com. The latter keeps your budgeting focused. Although you can manage credit and savings accounts on the site, we had trouble uploading that data and stuck primarily to tracking our checking. However, Wesabe lets you manually enter cash accounts and transactions. You can link all your accounts to Geezeo, but we experienced some difficulty when trying to add more than one account from a single financial institution. Also, its investment-account tracker is rather bare bones, listing only your holdings' shares and market values–unlike Mint, whose investment tool tracks fund and stock performance and portfolio allocation. Like Mint, Geezeo automatically tags your expenses; Wesabe invites you to create your own labels.
But the power of Geezeo and Wesabe lies in its participants. Members set goals they share with the community and form groups in which they can support, inspire and advise one another. Wesabe provides tips tailored to your specific situation. Geezeo offers more: expert advice, community confessions, and a marketplace of financial products for you to review and compare.
Although all three of the above sites are secure, some people are still not comfortable linking bank accounts directly to a budgeting site. If that describes you, try BudgetTracker.com or BudgetPulse.com. Both sites let you manually enter your account balances and transactions. You can also schedule bill payments using the sites' calendar features. A limited free account with BudgetTracker includes up to ten bank accounts, 50 calendar reminders and 15 bill-payment entries; an unlimited account costs $2.95 per month. BudgetPulse, currently in beta testing, is free.
Buxfer.com is a site that specializes in group budgeting and IOUs among friends. Perfect for roommates or group vacations, you can invite contacts to join and track shared bills (you can even access Buxfer via a Facebook application). For your individual budget, you can choose either to provide your bank-account information -- as you would with Mint, Wesabe or Geezeo -- or manually add your accounts, as with BudgetTracker or BudgetPulse. Buxfer's free basic membership affords you five accounts, five budgets and five bill reminders; an upgrade to unlimited membership costs $2.79 a month or $21.48 a year. Invite friends to join and for each person who accepts you'll earn a 60-cent credit toward an upgrade.
With the slow economy and fast-approaching holidays, keeping track of your money can be like a stomach-churning roller-coaster ride.
If you haven't already done it, now is the time to get your finances under control. The World Wide Web seems to crank out a new budgeting site every time there's a dip in the Dow. So to help settle your stomach and your accounts, we've picked the best Web sites to help you set a steady course for spending and saving.
For a fresh view of your big financial picture, Mint.com is my favorite. The online money-management tool lets you easily track all your accounts: checking, savings, credit, loan and investment. Signing up is fast and free; to get started, you need only provide an e-mail address and zip code, then select a password.
Next, link up your accounts. The site connects to more than 7,500 U.S. financial institutions and is adding more. You have to provide user names and passwords for all your bank accounts, but don't worry: The site maintains a secure connection. All user names and passwords are encrypted so that no one at Mint ever sees them. And you don't provide the site with any personal information besides your e-mail and zip code.
Mint updates all your accounts at least once a day and automatically labels each expense with a category -- groceries, credit-card payments, gas and so on. You can use customized tags to create more-specific categories, and you can add notes to each transaction. The site also offers personalized savings tips, such as suggesting better credit cards for cash rebates and travel rewards.
Mint's sleek screens make even the ugliest of finances just a little bit prettier. Under the Trends tab, the Where You Spend pie charts break down your expenses into a rainbow of categories. Click on a slice and you'll see a new, more-detailed pie chart with its own slices. For example, the food-and-dining category splits into groceries, restaurants, fast food, coffee shops and the like. And the site's SpendSpace bar graphs let you compare your spending habits with average outlays of people in selected cities or states -- or the whole country.
Unfortunately, you can't manually add transactions to your Mint account, so you can't project future costs or tally any extra cash or expenditures. To remedy the latter issue, the site suggests you split ATM withdrawals into separate cash transactions. The Mint's support forums are another weak aspect of the site.
If you're more interested in an online community, i suggest Geezeo.com or Wesabe.com. The latter keeps your budgeting focused. Although you can manage credit and savings accounts on the site, we had trouble uploading that data and stuck primarily to tracking our checking. However, Wesabe lets you manually enter cash accounts and transactions. You can link all your accounts to Geezeo, but we experienced some difficulty when trying to add more than one account from a single financial institution. Also, its investment-account tracker is rather bare bones, listing only your holdings' shares and market values–unlike Mint, whose investment tool tracks fund and stock performance and portfolio allocation. Like Mint, Geezeo automatically tags your expenses; Wesabe invites you to create your own labels.
But the power of Geezeo and Wesabe lies in its participants. Members set goals they share with the community and form groups in which they can support, inspire and advise one another. Wesabe provides tips tailored to your specific situation. Geezeo offers more: expert advice, community confessions, and a marketplace of financial products for you to review and compare.
Although all three of the above sites are secure, some people are still not comfortable linking bank accounts directly to a budgeting site. If that describes you, try BudgetTracker.com or BudgetPulse.com. Both sites let you manually enter your account balances and transactions. You can also schedule bill payments using the sites' calendar features. A limited free account with BudgetTracker includes up to ten bank accounts, 50 calendar reminders and 15 bill-payment entries; an unlimited account costs $2.95 per month. BudgetPulse, currently in beta testing, is free.
Buxfer.com is a site that specializes in group budgeting and IOUs among friends. Perfect for roommates or group vacations, you can invite contacts to join and track shared bills (you can even access Buxfer via a Facebook application). For your individual budget, you can choose either to provide your bank-account information -- as you would with Mint, Wesabe or Geezeo -- or manually add your accounts, as with BudgetTracker or BudgetPulse. Buxfer's free basic membership affords you five accounts, five budgets and five bill reminders; an upgrade to unlimited membership costs $2.79 a month or $21.48 a year. Invite friends to join and for each person who accepts you'll earn a 60-cent credit toward an upgrade.
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