Money Blue Book

Well, it looks like January 2010 has finally arrived. Goodbye 2009, and hello 2010!

According to most public sentiment surveys I’ve seen thus far, the overwhelming consensus is that 2009 was a particularly terrible year. The economy tanked, retirement savings were largely wiped out, and home equity values were pretty much eviscerated. However, where there’s misery, there always seems to be a smidgen lining of hope. Despite most people’s vastly negative opinion of 2009, the great majority of surveys indicate a very optimistic outlook for 2010. Maybe it’s because this time around, we are no longer staring at the barrel of an imminent financial sector meltdown and hearing the ghastly doomsday warnings of a possible decade-long economic depression, but things certainly feel less dire than the same time 12 months ago.

Most certainly, while we are still languishing under the worst economic recession in decades with depressive unemployment rates continuing to climb, the pace at which the economy continues to worsen has drastically decreased. In other words, while the economy is still deteriorating, it’s worsening at a significantly slower pace than before. This is very good news for the aspiring optimists and opportunists in all of us. Most significantly, there also does appear to be tangible economic metrics emerging to back up the growing optimistic fervor for 2010. While I personally think we are still many months away from a real and sustainable recovery, I think we are decidedly heading in the right direction as punctuated by the fact that I’ve been jumping back into the stock market of late and starting to invest strongly and aggressively in long term positions again – positions that I think will pay off handsomely in the future. Previously during the very early part of spring 2009, I exited and stayed away from the market to protect myself from the effects of the irrational fear and panic that was crippling the American psyche. But with the way things are now, I am pretty confident that the worst case scenario has been averted and all that remains now is for the economy to begin its long and steady natural progression towards recovery. While home prices will almost undoubtedly not return to pre-recession levels anytime soon, home prices will most likely stabilize during 2010, leading to a positive and steady ripple effect across other sectors.

In terms of my New Year’s resolutions for myself in the financial planning and income growth department, I plan to make 2010 a banner year for my bank savings account balances and investment holdings. Now is the most opportunist time to start placing one’s bets for the distant future. Despite the mild market run up since spring 2009, stock market prices on the whole are still lagging and have not returned to pre-recessionary panic levels. If you have cash on the sidelines and have been waiting for the so-called “best time to start investing”, now is the time to start opening up a discount broker account and start investing those excess savings into long term mutual funds, or better yet – into the exchange traded funds (ETF’s) of your choice. I’ve personally chosen to invest heavily into riskier financial and emerging market funds (such as the XLF and EEM funds) to fully maximize the potential of my future gains. However, your personal investment strategy is up to you and dependent on your willingness to assume risk today for a greater payday in the not too distance future.

My Current Net Worth and Financial Status Update Compared To Last Month

Allocating Cash Savings For The Closing Of My New Home Purchase

Back in August 2009, I signed a contract for the purchase of a brand new construction 4 bedroom, 4 bathroom cottage style single family colonial home. For several months now, I’ve been patiently monitoring the construction progress of my first home purchase ever – swinging by the home lot to take photos of the inside and outside at least once every week. Most recently, the transformation from a pile of dirt to a free standing wood and concrete structure has been nothing been dramatic. With the roof tiles now in place and the windows having been installed, the home is starting to really take shape. While the housing construction is proceeding rapidly and steadily, there have been a few slow downs due in large part to the recent snow storm activity that we’ve been experiencing in the D.C. Baltimore area the last few weeks. Coupled with the time off effects of Christmas and New Year’s, construction work has occasionally stalled – but I expect things to start picking up again briskly when construction starts rolling into January.

Currently, the new home is tentatively scheduled to be completed and delivered sometime early March 2010. As such, I’ve prepared and saved up a sizable cash balance to pay towards my new home mortgage 20% down payment. With the home priced at around $622,000 (this is pretty much average for the D.C. area), I presently have set aside and reserved more than the necessary $125,000 down payment I will need for home mortgage purposes. While there have been several times that I’ve been tempted to allocate this special purpose money into various lucrative stock market investments, I managed to do the right thing and keep the funds safely segregated in their own separate bank accounts.

Funding My IRA and Opening Up A New SEP-IRA Account For Stock Investing

Most people rely on their employer’s 401(k)’s with matching contribution packages for most of their retirement planning needs. But because I am currently fully self employed with my network of online businesses and run my own legal practice from my home office, I have to depend on myself. Fortunately for solo practitioners and self employed folks like myself, the IRS provides a useful mechanism for us to still take full advantage of the tax deferred benefits of individual retirement savings accounts – namely the SEP-IRA. Because I’ve already maxed out my limited Roth IRA and Individual IRA contribution limits and desire to contribute more, I recently, I opened up a SEP IRA account with Fidelity Investments. The greatest benefit of a SEP-IRA account apart from the obvious tax deferred benefits, is that the maximum contribution limit is pretty generous – at 25% of an individual’s compensation, capped at a maximum of $49,000 for both individual tax years 2009 and 2010. Eventually, I may very well open up a few more other SEP-IRA investment accounts with other reputable online discount brokerage firms to test them all out – but for now, I’m going with Fidelity.

Relying On My Passive Online Income Streams For A Living

Unfortunately, due to several notable and rather complicated personal situations during the last few months, I’ve neglected to post on my personal finance blog and other online blogs as frequently as I would have liked to. While I’ve continued to maintain and tend to my online businesses and network of profitable websites on a regular basis, I have not really posted new articles with much regularity. But despite my lack of effort and lack of any substantial headway in the way of content creation, my online income streams continue to remain very stable (with even signs of growth). This brings me to the most powerful and compelling aspect of why I truly believe any person who is strongly self motivated ought to start blogging to make money online and not delay in tapping into the powers and limitless potential of the Internet. Because of all of the effort I had previously put into my online craft for the last 2 and a half years, I’ve built up a very substantial network of online traffic streams that remain solidly consistent despite my lack of present effort. Contrary to what most layman and blogging beginners believe, once you have built up solid search engine traffic and have earned reputational authority in the eyes of major search engines such as Google, Bing, and Yahoo – your keyword rankings pretty much stay consistent indefinitely (and dare I say it, permanently). Once you have this search engine authority built up, it’s very difficult for new blogging and website entrants into the field to supplement your existing position. This probably explains why numerous major media companies have been trying to contact me recently to inquire about potential buyout opportunities or website acquisitions. Frankly, I have very little incentive to entertain such offers as I truly enjoy the significant incomes I generate from the sites that I own, as they require very little effort on my part – but of course, with the right offers, anything is possible I suppose.

For those of you who have always thought about wanting to start blogging online to either share your  interests with the rest of the world or just to make some money on the side or even provide your family an alternative income source during these difficult and unpredictable times – now is the time to start blogging and pursuing your web business aspirations. The more you delay, the more such opportunities will gradually slip away. Carpe diem!

Special Promo Offer: 100 Free Trades For New OptionsHouse Accounts

Whether you’re a buy and hold investor or a savvy trader of penny stocks, I’m pretty sure commissions and fees are a few of those brokerage conditions that you pay particular attention to. If you aren’t too concerned with them, then perhaps you ought to be. After all, high fees and hidden trading costs have a nasty way of surreptitiously consuming huge chunks of your potential stock gains and profits. Nowadays, there really is no reason why any investor ought to pay full price for his or her stock investing needs. There are a broad range of heavily discounted brokerage firms to choose from, each offering its own unique online trading experience and each touting its own unique mix of low fees and hassle free conditions.

If you’re not completely new to the world of investing, I recommend checking out OptionsHouse, a fairly intriguing newish entrant to the discount broker foray. While the name OptionsHouse may be unfamiliar to those not intimately plugged into investment circles, the company is a fairly established company, associated and backed by PEAK6 Investments, one of the biggest options trading brokerage companies around. Despite the “options” moniker in its name, the firm is not an exclusive options trading firm as it provides a large wealth of resources for stock trading as well.  While options trading is its primary expertise and specialty, the company still caters to the stock and fund investors out there – touting trading rates that are some of the cheapest, if not the absolute cheapest rates in the market today. At a mere flat $2.95 for each stock and exchange traded fund (ETF) trade, you would be hard pressed to find another reputable discount broker capable of matching such low commission fees for equity transactions. In the cost arena, OptionsHouse is a standout, even amongst all of the other top recommended names in my online discount broker review list.

Like most legitimately established online broker firms, OptionsHouse is a member of the Securities Investor Protection Corporation (SIPC), the non profit federal government entity tasked with protecting investors from financial harm in the event of a catastrophic brokerage failure. As such, OptionsHouse customer accounts are insured against loss and protected by SIPC insurance up to $500,000 with a variety of other protection measures in place as well. In terms of its target customer, OptionsHouse’s primary account base consists of active individual stock and options traders with some semblance of investing savviness. While OptionsHouse may also appeal to true beginners to investing, its advanced trading tools and technical analytical option analyzers may slightly intimate newbies. If you are a first time stock market investor, I’d recommend going with a more down to earth, more accessible discount brokerage firm like Scottrade, TradeKing, or even E-Trade. But if you are an active stock or options investor, Options House’s incredibly cheap stock trading commissions and low cost fees for options trades will certainly offer you immense appeal. Stock and options investors who trade frequently or execute larger than average trade sizes will have the most to gain from what this discount brokerage firm has to offer.

OptionsHouse Is An Up and Coming Award Winning Discount Brokerage Firm

While I personally don’t think one should judge or make a decision on which is the best discount broker based on the number of accolades and rewards received alone, these type of editorial recognitions do go a long way in helping investors and traders weed out the winners from the losers. Despite its fairly recent entry into the market, OptionsHouse has already earned a reasonable amount of attention from the professional reviewers – including a 4 star rating in Barron’s 2008 Best Online Broker Survey, along with a #1 ranking in the category of “Usability”. In its 2009 Online Broker Survey, Barron’s awarded OptionsHouse a 4.5 star overall, tagging the brokerage firm the “Best For Options Traders”, as well as rating it #1 in “Trade Experience”, beating out other notable brokerages like thinkorswim, optionsXpress, Etrade, and Charles Schwab. However, it will probably take a few years of such consistent performance before OptionsHouse will truly be able to unseat the current reigning champs like E-trade Financial or TradeKing – firms which have consistently ranked at the top on multiple review listings like SmartMoney’s Best Broker Survey, and Kiplinger’s annual review of the top online brokers.

Cheap $2.95 Flat Commissions Rate For Stock Trades, and Low Flexible Rates For Options

As I indicated above, OptionsHouse offers some of the lowest commission fees in the market today – adopting a primarily flat pricing model that is very popular among those account holders who want to avoid the hassles of tier based or volume influenced pricing. Currently, Options House touts a remarkably cheap $2.95 flat rate for all stock trades, regardless of the number of shares purchased, and regardless of whether the trade was executed online or with the assistance of a broker agent. I have yet to see many other legitimate brokers that can even come close in terms of pricing. The only cheap discount broker firms that can even remotely compare are perhaps the ones that offer conditional free stock trades such as Zecco. While Zecco does indeed offer an allotment of monthly stock trades for its customers free of charge, there are certain pre-qualifying conditions that must be regularly met (either the maintenance of a certain account balance or satisfaction of a certain volume of trading activity).

For option trades (the firm’s bread and butter), OptionsHouse offers its customers the flexibility to pick the rate that works best for them. Those that trade less than 10 contracts can pick the “Up to 5 for $5 rate” where their  first five option contracts are only $5. Trade over 10 contracts? You can select OptionsHouse’s low $8.50 +.15/contract rate for maximum value. You are free to change your options commission rate as your trading behavior changes to help you maximize your savings. In a comparative analysis of OptionsHouse’s option contract savings to its competitors for anywhere from 5 to 100 contracts, OptionsHouse easily beats out other top performers such as TradeKing, TradeMonster, thinkorswim, E-Trade, optionsXpress, and Fidelity Investments. Contrast that with what some of the other top name brokerages charge and you’ll understand why OptionsHouse’s prices are so remarkably cheap. For example, top brokers like TradeKing may charge just $4.95 per option trade, but they also tack on an extra $0.65 fee per options contract. Those that trade large quantities of option contracts will benefit the most from OptionsHouse’s efficient pricing structure.

When it comes to investing in stocks, ETF’s, and options – OptionsHouse is an extremely affordable brokerage choice. However, if you’re looking to trade other financial products beyond just those three such as mutual funds or bonds, you may want to be mindful of the fact that while OptionsHouse’s commission fees for stocks and options are super cheap, it’s prices for other products beyond its core base are higher. My advice is to open an account and use OptionsHouse for stock, ETF, and option trades, but go directly to the mutual fund sources for all of your other investment needs. For example, Fidelity and Vanguard are the two most popular providers of mutual funds and index funds today. If you want to invest in either a Fidelity or Vanguard labeled fund, you should open accounts with both of them directly to avoid the extra transactional fees associated with mutual fund investing.

Overview Of OptionsHouse’s Online Brokerage Account Features

Along with its extremely low cost commission fee structure for both stocks and options, OptionsHouse also offers its customers the conveniences of no maintenance fees, no minimum trade requirements, and no extra charges for broker-assisted trades (a rarity among discount brokers). Those traders and investors who trade frequently or trade large volumes of equity in one sitting will benefit strongly from OptionsHouse’s flat pricing for stocks and very competitive flexible pricing for options.

In terms of its basic account offerings, OptionHouse provides all of the usual assortment of cash and margin account types that most customers have come to expect from their online discount brokers. OptionsHouse account holders have the ability to conduct purchases and sales in transactions involving stocks, options, ETF’s, mutual funds, Roth IRA’s, Traditional IRA’s, Education IRA’s, and many more. To assist account holders, the firm provides its customers a broad range of educational resources including books, guides, webinars, calculators, simulators, and various screeners to help them take maximum control of their financial lives – and they’re not just all for options trading either. Those that want to test out OptionsHouse’s investment functions and tools but don’t wish to commit to using real funds can opt instead to take a trial run using OptionsHouse’s Virtual Trading tool, which allows an individual to execute mock transactions using what’s essentially play money. It’s a good way to get familiarized with all of the widgets and trading features that the company has to offer.

After having used my OptionsHouse investment account for some time now, I have to say that the trading platform is generally pretty intuitive and similar to what I’ve come to expect from my online brokerages. While account holders are given some limited ability to customize, such as the ability to change colors here and there, and offered the ability to tweak how various charts and graphics display information, most of the online account features are intuitively preset. The firm keeps its award winning (rated highly by online reviewers for “trade experience”) interface simple and offers an online trading platform that ought to satisfy and beat the needs of most active stock and options investors. You are of course welcome to take a video tour of the brokerage firm’s online interface for more information.

Bottom line, I would recommend OptionsHouse as a deep discount brokerage choice for stock and options trades. If you believe you will invest primarily in mutual funds on the other hand, I’d recommend opening an account with the appropriate mutual fund provider directly (example: Vanguard, Fidelity, Charles Schwab) to avoid the extra mutual fund transaction costs. Also, if you’re a relatively new investor who is still getting the hang of investing, I would recommend going with a brokerage firm that caters more to beginner investors – firms like Scottrade and TradeKing. But if you already have some background or basic experience with investing, then OptionsHouse’s incredibly low rates and transactional costs will suit you very well. At a flat $2.95 for stock trades, it’s almost impossible to beat that with any other discount online broker.

In case you still need a further incentive, for a limited time during the firm’s special promo period, OptionsHouse is offering new customers a special promotional 100 free trades during the first 60 days after a new account is funded with a minimum of $3,000.