Novel Investor

Compounding investing wisdom...

Google Play! Investing in Digital Distribution

by Jon

Digital DistribitionI was surprised to see the new Google Play feature at the top of the Google home page this week.  I hadn’t heard about a release date.  But I knew it would happen eventually, just not this quickly.  So why all the fuss?  Well, it’s definitely a new place to shop for all things digital, but it may offer an interesting investment opportunity.

Google Play is the new competitor on the block in the digital distribution service offering music, movies, books, and apps.  With its introduction, Android App Market, Google Music, and Google eBook store will be merged into a one stop shop for all things digital.

You can store it all on the cloud, making it easier to use across multiple devices.  That means you can reach anything and everything from your desktop, laptop, smart phone, and tablet.

Digital Shopping

Buying things online is nothing new.  But the transformation to digital is still new.  The four big players in the space are Amazon, Apple (through iTunes), Netflix, and now Google.  What sets Google Play apart? Continue Reading…

The Roth IRA: The Piece To Your Retirement Puzzle?

by Jon

Roth IRA PuzzleThe popularity of the Roth IRA has brought a myriad of questions about which IRA is best for retirement savings.  The answer is, it depends.  Yet, for some reason the Roth IRA keeps popping up as the single best retirement account for everyone’s money.  It’s simply not true.  Yes, it’s a great way to save for retirement.  But only for the percentage that meet certain tax conditions.  For everyone else it’s just a tax paying vehicle, costing you money.

You see, the government survives on tax revenue.  While deferring taxes until retirement is a great idea for you, it has no added benefit for the government today.  So the Roth IRA was born and with it, a way to collect taxes now on your retirement savings.

The Roth IRA rules state, we put after tax money in and at retirement we don’t have to pay taxes on withdrawals.  We tend to focus too much on the “don’t have to pay taxes” part because it sounds so good.   In turn, we’re blind to the fact that taxes are still paid.  It’s after tax money going in, at today’s tax rates.  But it’s not entirely a bad deal.  Under the right circumstances, the Roth IRA a great retirement vehicle. Continue Reading…

Happy Hour: State Grades, A Long Bet, & The STOCK Act

by Jon

Welcome to Happy Hour.  Another end of the week round of great reads I came across throughout the week.  Sit back, relax and enjoy!

State Grades

The Center for Public Integrity recently released its grades on accountability and integrity in state governments.  Surprisingly, my home state of Illinois got a C grade (not bad when 4 of the last 9 governors were sent to jail and 1,828 people have been convicted of public corruption since ’76).  The grade doesn’t include the local level, like the Chicago Machine that requires regular financial greasing.  How did your state do?

A Long Bet

I came across an article this week about a long bet between Warren Buffett and Protege Partners.  Good ole Warren is wagering $1,000,000 that the S&P500 will outperform a portfolio of hedge funds from 2008 to 2017.  The site is a great time waster reading through all the bets and predictions.  You can put some money on the line, accept a bet or make your own predictions.

The STOCK Act

The House and Senate finally passed the STOCK Act on Thursday, sending it on to be signed into law by the president.  It’s a good first step to gaining some public trust by preventing government officials  (themselves) from trading off of non-public government information.  Which is probably why they weren’t in a hurry to pass it.  The bill has been around in some form or another since 2006.  More than enough time to liquidate any profits. Continue Reading…

First-Time Home Buyer Credit – Is It Time To Repay?

by Jon

First-Time Home Buyer CreditThe first-time home buyer credit provided tax help to anyone who was eligible.  The bad news is, it may have to be repaid.  Depending on the circumstances, it could even be a lump sum amount due at the tax deadline.

Back in 2008, the government had a plan to nudge would be first-time home buyers into taking the plunge into the housing market.  It was a good first idea.  Then in 2009, the government extended and changed the rules.  Much to the dismay of the 2008 home buyers, but it worked a little better through 2010 when it ended for all but some military members (ending for them in 2011).

Recently, the IRS changed it’s notification process for everyone that took advantage of the first-time home buyer credit.  In the past everyone would have gotten a reminder letter in the mail before they had to file a tax return.  A good idea, since some people may have to repay the credit.  But the IRS no longer sends reminders in the mail.  Now it’s the participants responsibility to look up their account information online. Continue Reading…

Financial Emergency Kit: Are You Prepared?

by Jon

Financial Emergency KitEmergencies happen every day.  But when the impossible happens, will you be ready?  Having a financial emergency kit will make a big difference if the worst should ever happens.

The first step to preparing a financial emergency kit involves a well stocked emergency fund.  You may only need enough to cover insurance deductibles or basic bills.  But if income loss is involved, being ready for several months will be key.  Ideally, it should be enough to cover 4 to 6 months of basic expenses.

Second, is to round-up all the important financial documents into a few safe places.  Just having access to extra cash or contact information may be enough for the minor emergency.  It’s still best to prepare for the worst, by securing all the important financial information, too.

Financial Emergency Kit Checklist

It’s important to keep all the information as up-to-date as possible.  Doing an annual review of your financial emergency kit is a good idea.  Just replace any old or outdated information when necessary. Continue Reading…

Happy Hour: Beer Tax and The Perfect NCAA Bracket Odds

by Jon

It’s happy hour again.  Time to sit back, relax and watch some basketball!  For those crazy enough to not follow March Madness, here’s some of the more interesting reads I came across this week.

Outrageous Beer Taxes

The folks over at the tax foundation covered a state by state breakdown of beer excise tax rates.  Of all the things Americans can be outraged over, excessive beer taxes should top the list.  If our law makers overhaul the tax policy, this is the place to start.  How can anyone enjoy happy hour knowing their taxes climb with every sip.  It’s a travesty.

The Perfect NCAA Bracket Odds

The NCAA tourney is sitting on day two and has caused the most unproductive work week of the year.  Whether it’s spending time filling out brackets or taking a four-hour lunch to watch the games, the tourney is a time and money sink.  Of course the odds of picking the perfect bracket are beyond possible.  I made my annual bracket donation anyway.  Now I just have to hope that everyone else does worse than me. Continue Reading…

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