levselector.com 
Personal Finance:
On this page:  Other pages: 
* intro
* links * mortgage 
* repair credit 
Intro  home  top
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Here is a simple plan for an average american:
1. Get out of debt  www.debtfree.com
, repair credit, and accumulate 6 months
cash reserve
2. Invest maximum allowed into retirement plans:
 From your employer ( 401(K) )  www.401k.com/401k/pfp/rp/fringe.htm
 Individually (IRA, Roth IRA )  www.strongfunds.com/strong/Retirement98/ind/products/roth.htm
 From your small business (Simple IRA, SEP IRA, Keogh, etc.)
 www.newenglandfunds.com/smallbusiness/index.html
3a. Buy a house
3b. Open account with one of the online brokerage firms and invest
in index funds
3c. Other investments  other funds, stocks, bonds, real estate, annuities,
etc.
Recommended reading:
* The Millionaire Next Door : The Surprising
Secrets of America's Wealthy by Thomas J. Stanley, William D. Danko
* Rich Dad, Poor Dad : What the Rich Teach Their Kids About Money That the Poor & Middle Class Do Not! by Robert T. Kiyosaki, Sharon L. Lechter (also  www.richdad.com/  ) * The Gorilla Game : Picking Winners in High Technology by Geoffrey A. Moore, Paul Johnson, Tom Kippola * Investing  read here: www.moneyandmore.net * http://users.erols.com/scambos/  the article describes that one can legally live in USA without paying taxes. 
Links  home  top
of the page  email 
Starting point:
* www.edreyfus.com/qsys/web/headers/menu
 many links
* http://www.guidenet.com/market.shtml

* marketperform.com
good site, Offers the First Investment Tool to Measure Performance of Financial
Institutions' Recommendations. See which firms' recommendations yield the
highest returns and get notified when they release their next calls.
* www.fool.com
 The Motley Fool
* quote.yahoo.com
 good to start and plan portfolio
* cbs.marketwatch.com
original news and comments
http://www.smartmoney.com/
* www.dailystocks.com
 links to data and analytical tools
* www.bigcharts.com
 charts
* www.investor.msn.com
 useful, but costs $9.95/mo
* www.marketplayer.com
 poweful screening
* www.quicken.com
 stock search  simple and free
* www.freeedgar.com
 offers all SEC filings, can be downloaded
* www.bigcapgrowth.com
 large cap stocks to buy
Mutual Funds:
* www.findafund.com
* cgi.netscape.com/cgibin/rlcgi.cgi?URL=www.findafund.com
* www.indexfundsonline.com
* cgi.netscape.com/cgibin/rlcgi.cgi?URL=www.indexfundsonline.com
yahoo >> Business and Economy (Finance) > Mutual funds > Reference and Guides
News and services:
* Netscape
Personal Finance
* Dreyfus
Brokerage Services
* Quote.com
* Financial
Times
* The
Economist
* Barron's
Online
* News
Alert
* The Wall
Street Journal
* Stock
Smart
* Forbes
* DLJdirect
 Home
* E*TRADE
 Home
* www.nasdaqtrader.com/dynamic/
* Nasdaq.com
* Nimi
* Nasdaq
Newsroom
* Nasd
Regulation
* Investor's
Business Daily  Financial Web Site
* Fox
Market Wire
* Investornet
* Table
Of Contents
* www.isld.com/
 http://www.josh.com  Island
* www.mtrader.com/
* www.ecinvestor.com/
 Piper Jaffray Inc
* www.gomez.com
 Review of Online Brokers
Mortgage  home  top
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p  principal, the initial amount of the loan ($400,000)
y  years (30)
n  number of months (12 * y = 360)
i  the annual interest rate ( 7%)
j  monthly interest in decimal form = 0.01 * i / 12
( 0.005833333)
t  total cumulative interest = (1+j)^n
( ~8.1165)
m  monthly payment = p*j*t / (t1)
For our example: m = $2,661.21 (=$400,000
* 0.005833333 * 8.116497475 / 7.116497475)
a  total amount of mortgage = m*n ~ $960,000
Theory:
Let's calculate the balance during the payment time.
We start with the principal amount. Then we have 2 forces: monthly
payments reduce the amount by "m" every month. And between the payments
the amount grows  multiply by (1+j).
To make calculations we will start from the very last payment (#360)
and go back in time. We will use a coefficient f = 1/(1+j),
which is ~1 (~0.996 in our example).
Payment #  r remaining balance after payment  b  balance before payment  principle paid
b  b_{next} 
interest paid
mpr.paid 
  0  0  0  0 
360  0  m  m  0 
359  mf  r+m = mf+m  mf  m(1f) 
358  (mf+m)f = mf^2 + mf  r+m = mf^2 + mf +m  mf^2  m(1f^2) 
etc  ...  ...  ...  ... 
1  mf^359 + mf^358 +...+mf^2 + mf  r+m = mf^359 + mf^358 +...+mf^2 + mf + m  mf^359  m(1f^359) 
so original principal p=mf^359 + mf^358 +...+mf^2 + mf + m.
This is a simple geometric progression. Let's calculate it:
pf = (mf^359 + mf^358 +...+mf^2 + mf + m) f = mf^360 + mf^359 +...+mf^3 + mf^2 + mf
pf  p = (most of stuff cancel each other) = mf^360  m
so:
m = p (1f) / (1f^360)
note that:
1f = 11/(1+j) = j/1+j ~ j
f^360 = 1/t
thus: m = pjt/(t1)  which is the formula we used above.
Amortization table:
As you making payments  your remaining principle balance decreases
by "m", but then it grows because of interest.
So the actual amount of payment which went towards principle is (b
 b_{next})  see the table.
See more in the book: The Vest Pocket Real Estate
Advisor by Martin Miles (Prentice Hall)
Mortgage + Investment  home  top
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First approach:
Pay off your mortgage first  then start investing. Never take a 30
year mortgage. Take 15years and the one, where you can accelerate payments
(thus actually paying it in 5 years). Use weweekly payments plan to further
decrease the amount of interest you are paying.
Second Approach:
Instead of putting all your cash into paying off your house, you take
a low interest mortgage  and put most of your cash into investments.
This approach has the following advantages:
 investment can add to your networth at a higher rate than
mortgage substract
 all mortgage interest is taxdeductable.
 plus you have more flexibility with your cash
Math models show that 2nd approach is better. In reality it depends how you manage your money.
One thing for sure  you should NOT pay PMI (Private Mortgage Insurance).
If your downpayment is too low (usually less than 20%)  you will be asked
to pay PMI, which is very high extra payment. So you better make a 2025%
downpayment. If you don't have money  get a shortterm loan for this amount.
It will be at higher interest than mortgage  still it is much better than
pay PMI.
* www.originlab.com/
* www.wavemetrics.com/
