It’s been a while since I’ve done a site review and it’s about time. I’ve come across a great site over at The Simple Dollar.

This blog has been up and running since October of 2006 and it continues to provide quality content. It’s well laid out and easy to read. It’s updated quite frequently so there’s always something new. There’s also such a broad variety of topics that you’re bound to find something of interest.

Just today there was a great book review, The Now Habit, that covers the problem of procrastination.

So head on over to The Simple Dollar and browse around. It’s definitely a site worth checking out.

One of the great investors of our time is Peter Lynch. He was the manager of the famed Magellan Fund at Fidelity Investments from 1977 until 1990 when he retired.

At an investment conference in 2005, he gave a checklist of 8 fundamental principles that he used in his stock picking. I think there’s a lot to learn from the following 8 items:

1. Know what you own. This advice seems so simple, but is actually rarely followed by many investors. If you own mutual funds or ETFs, do you know what the fund is invested in or what the ETF is actually tracking?

2. It is futile to predict the economy and interest rates. Doing so is characteristic of short term and emotional trading. It can be important to understand these things, like he says, they’re difficult to predict.

3. You have plenty of time to identify and recognize exceptional companies. So many people are worried about getting into an investment at the best and most opportune time. Take your time to research and look into any investment your considering. You’ll always have enough time to do enough research if the investment is worthwhile. There will also always be another good investment. If you missed Microsoft or Google, don’t think there will never be another good investment.

4. Avoid long shots. I think it says enough.

5. Good management is very important - buy good businesses. Even the greatest business concepts can fail with the wrong team in place. Mediocre businesses can also be outstanding with the right leadership. Take Steve Jobs and Apple for instance. Look at the companies’ performance with and without him at the helm. It speaks volumes.

6. Be flexible and humble, and learn from mistakes. This is good advice not only for investing. Realize you’re going to make mistakes and make it a point to learn from them.

7. Before you make a purchase, you should be able to explain why you’re buying. If you can’t explain your reasoning, you probably don’t understand the investment, and you shouldn’t invest in things you don’t understand. Most people hear this, throw their hands up, and don’t invest. Instead, take the time to try and understand the business if you’re interested in it, and then buy it if it makes sense.

8. There’s always something to worry about. Nothing is a ever a sure thing. Don’t wait for something to be perfect, just put in your due diligence to alleviate and mitigate your risk.

We can learn a lot from these principles, especially since they come from such a successful investor. I also like a couple of Peter Lynch’s quotes. They can also teach a lot:

“Go for a business that any idiot can run - because sooner or later, any idiot is probably going to run it.”(McDonald’s is a great example of this)

“If you stay half alert, you can pick the spectacular performers right from your place of business or out of the neighborhood shopping mall, and long before Wall Street discovers them.”(Look at everyday products you and others are buying)

We can learn a lot from successful investors such as Peter Lynch. Hopefully some of his strategies will be helpful as you begin and continue to invest.

These radio ads have been around for a while now, and they’re a great example of what marketing can be. They’re also really funny. So here are a few spots to brighten your day:

• Mr. Hot Stock Tip Giver Outer
• Mr. Nosebleed Section Ticket Holder Guy
• Mr. Gangsta Rapper Posse Member
• Mr. Pro Sports Heckler Guy

Aside from just being funny, these spots accomplish many marketing goals. The product is remembered afterwards. The ads are memorable. They also generate a certain level of buzz. It’s also been such a successful marketing campaign that they keep making new ones because they’re so recognizable.

There is a power in positive thinking, and it’s important to maintain this type of attitude even amongst all the negativity in the world.

I have very high goals and aspirations, yet there will always be those who don’t think that it’s possible. The problem comes when you start believing what others around you are saying.

Everyone has their life experiences upon which most opinions are based. You can’t let one person’s viewpoint skew your own into thinking that your goals are unachievable. Henry Ford’s quote in Developing a Wealthy Mindset really is true.

The opportunities are out there each and every day for us to take advantage of that will move us ever closer to attaining our goals. When negative thought creep in, however, we will essentially be blind to these opportunities. They’ll be seen as too risky, too difficult, or perhaps not seen at all.

There will be setbacks and failures along the way, but these can’t become the basis of our thoughts. Someone once told me what he thought to be the formula for success, and I happen to believe it also:

Persistence + Failure = Success

Looking back in history at the many successful individuals and there is one thing that links them all together. They were all “persistent failures”.

Keep striving, keep achieving, and don’t pay attention to the naysayers out there.

The insurance industry is enormous and can be quite intimidating. Insurance is being sold for almost anything and everything you can imagine. Determining what’s right for you can be a very daunting task. Hopefully I’ll be able to shed some light on the subject.

First of all, insurance is a product. There are companies that sell it and consumers that buy it. Don’t falsely believe that insurance companies are doing some sort of charity work by offering a huge payout in exchange for small monthly payments. Insurance companies are in the business of making money and they do it very well.

This doesn’t mean that you shouldn’t ever buy insurance. You just need to determine what’s right for you, and this isn’t necessarily what a company may say is right for you. We need to understand what the purpose of insurance is.

Insurance should be bought to protect you against a calamity that would otherwise be financially devastating.

Let’s take a few examples and hold them up against this criteria.

One type of insurance I see advertised is a life insurance policy for children and even babies. The attempt here is to play on your emotions because you love your children right? If (heaven forbid) you were to lose a child, it would be devastating emotionally, but is a cool half million going make it better? A family (usually) doesn’t rely on a child’s income to maintain their standard of living, so why would you need to insure them?

Now let’s examine auto insurance. A certain level of coverage is required by law, but this is mainly to cover the other party in case of an accident being your fault. The other options are exactly that, options. If having your car totaled in an accident would devastate you financially, there’s a case for more insurance. If you would be unable to come up with $100 to repair your car, you’d probably want a really low deductible, but you’d be paying higher premiums. Once you have an emergency fund, you should be able to handle a much higher deductible such as $1,000 or even $2500. This can significantly lower your premiums.

This same line of reasoning can apply to adult life insurance. Say you currently have a 20 year term policy. After actively saving and investing, when the term is up, you don’t necessarily need another insurance policy. If you’ve already got a couple hundred thousand to a million stashed away, would your loved ones be financially strapped if you were to pass away unexpectedly?

I realize that every situation is unique, but some thought should be put into what amount and type of insurance you need, if any at all. Also, realize that situations change over time and what was once right, may not be anymore. Take a look at your current policies and see if you could save some money by raising the deductibles. Maybe there are policies that you no longer need at all. It can’t hurt to review them from time to time.

The use of credit is becoming more and more frequent. It’s also getting easier and easier to acquire. Almost everyday we’re bombarded with new credit card offers. Wise use of credit is actually very beneficial, but how do you choose the right card for you among all the different options?

Your Credit Network is a website that can help you find a credit card with the features that are most important to you. The website is well laid out and very easy to navigate.

You’re able to research the many different types of credit cards that are available. You can search by specific card issuers if you’re partial to one bank or another. You’re also able to search by certain features such as rewards cards, business cards, student cards or even prepaid cards.

Once you’ve narrowed your search, compare all the specifics such as introductory rates, regular APR, annual fees, and types of rewards. You can see user ratings and they also have written reviews of the different credit cards. After you’ve found a card you like and that fits your situation, you can then go and apply directly for the card.

They also have a great resource with their credit blog. They talk about the latest credit card offers, how to use credit wisely, and other credit related topics. Overall, it’s an informative and easy to use site that focuses on the responsible use of credit.

This is a sponsored review.

I’d like to respond to a reader question that I received as an anonymous comment to a previous post entitled Starting my Roth IRA. Here’s the question:

“Any advice for newbies on how to pick what you’ll invest in with the IRA, especially for those not savvy with stocks, etc.?”

First of all I think the reader mentions a very important aspect of an IRA. A Roth IRA (or a Traditional IRA) is not an investment in and of itself. You may hear someone say that you should open up a Roth IRA because they have great returns. You have to remember that the IRA doesn’t produce returns; the investments IN the IRA produce these returns. An IRA is like a basket which holds these investments.

Now, on to what investments to pick for your IRA.

Realize up front that your IRA may not be your only investment account. Even though you may want a well diversified portfolio, your IRA doesn’t have to be. You may have a 401k or a 403b at work. You may also have a money market account that you use as an emergency fund.

You aren’t more diversified if you hold the same mutual funds in your IRA as you do in your 401k. The same applies to holding cash in your IRA if you already have a cash reserve elsewhere. These aren’t the only scenarios, but I’m illustrating a point. You may want to figure out what you’re ideal portfolio would consist of, see what you already have, and begin to fill in the blanks.

I would make sure that I had a sizeable amount of cash in an emergency fund. I would hold this cash in a money market account outside of an IRA, but read my post, Best of the Roth IRA, and you may decide to hold it inside.

Mutual funds are a great way to provide instant diversification because you’re immediately invested in a wide array of stocks or bonds. ETFs or Exchange Traded Funds are very similar but don’t have some of the fees that mutual funds will usually have. You may choose index funds because you want to match the returns of the general market as a whole. I choose to hold these types of investments in a 401k because my only options are a handful of funds.

After mutual funds and ETFs, you can move on to individual stocks and bonds. I would start with solid blue chip companies that pay a dividend. Start by looking at the 30 companies that make up the Dow Jones. As you begin accumulating more and more stocks, you’ll be able to build off of this solid foundation. Essentially you’re creating your own personal “fund” at this point.

I choose to buy individual stocks in my Roth IRA because I already have cash in a money market and mutual funds in a 401k.

It may seem very daunting at first as you decide what to specifically put in your Roth IRA, but as you look into some of the different options, you’ll be amazed at how much you’ll learn so quickly. Also, once you set up your account, say, with an online brokerage such as Scottrade, you’ll have access to a lot of information that can help you decide what to choose.

I hope all this helps. There’s no one right answer, and everyone’s situation is different. If you still have questions, feel free to email me with more information about your specific situation and I’ll help out as best I can.