What a Difference 100 Years Make

The year is 1909 – one hundred years ago. What a difference a century makes! Here are some statistics for the Year 1909:

• The average life expectancy was 47 years.
• Only 14 percent of the homes had a bathtub and only 8 percent of the homes had a telephone.
• There were only 8,000 cars and only 144 miles of paved roads and the maximum speed limit in most cities was 10 mph.
• The tallest structure in the world was the Eiffel Tower.
• The average wage in 1909 was 22 cents per hour. The average worker made between $200 and $400 per year
• A competent accountant could expect to earn $2000 per year; a dentist $2,500 per year, a veterinarian between $1,500 and $4,000 per year, and a mechanical engineer about $5,000 per year.
• More than 95 percent of all births took place at home.
• Ninety percent of all doctors had NO COLLEGE EDUCATION. Instead, they attended so-called 'medical schools', many of which were condemned in the press AND the government as 'substandard.'
• Sugar cost four cents a pound, eggs were fourteen cents a dozen, and coffee was fifteen cents a pound.
• Most women only washed their hair once a month, and used Borax or egg yolks for shampoo.
• Canada passed a law that prohibited poor people from entering into their country for any reason.
• The five leading causes of death were: pneumonia / influenza; tuberculosis; diarrhea; heart disease; and stroke
• The American flag had 45 stars.
• The population of Las Vegas, Nevada, was only 30
• Crossword puzzles, canned beer, and ice tea hadn't been invented yet.
• There was no Mother's Day or Father's Day.
• Two out of every 10 adults couldn't read or write. Only 6 percent of all Americans had graduated from high school.
• Marijuana, heroin, and morphine were all available over the counter at the local corner drugstores. (Back then pharmacists said, "Heroin clears the complexion, gives buoyancy to the mind, regulates the stomach and bowels, and is, in fact, a perfect guardian of health"
• Eighteen percent of households had at least one full-time servant or domestic help.
• There were about 230 reported murders in the ENTIRE U.S.A. mainly because there was a firearm of some sort in almost every home – an armed society is a POLITE society.

Try to imagine what it may be like in another 100 years.

21 ways to go green on a budget

Going green. Does the phrase make you want to hold your wallet a bit tighter? Look around and it would seem you’d need to spend more cash to be in tune with Mother Earth.

Drinking organic milk could cost you twice as much as regular milk. Dressing in earth-friendly clothes, which includes materials such as bamboo, hemp, and organic cotton, costs more than a standard set of threads. And the hybrid car? That could cost you thousands more than its traditional counterpart.

Are there ways to help the planet without parting with all the green in your wallet? Yes. Here are 21 ways.

Save money while being eco-friendly

There are probably as many ways to go green as there are flavors of ice cream. So how do you decide which ones to pursue first? Start with simple fixes that have a quick payback:

1. Switch out your lightbulbs. By replacing your regular lightbulbs with compact fluorescent light bulbs (CFLs),* you can cut your electric bill. These bulbs use less energy and last longer than regular bulbs.
2. Use a programmable thermostat. Using one of these so you’re not heating and cooling a house when no one’s in it could save you about $100 a year on your energy bills. If one in ten households did this, more than 17 billion pounds of greenhouse gases could be prevented from being emitted into the atmosphere, according to Energy Star Action Guide.
3. Kill vampires. The typical household has 20 appliances that use electricity even when they’re turned off, according to a Cornell University study, costing $200 a year. (The displays on these TVs, DVD players, stereos, and electric toothbrush docks continue to glow even when “off.”)  To kill these vampires, you can plug these into fuse-protected power strips (also called surge protectors) that allow you to cut the juice with the flip of a switch.
4. Replace the shower head. By replacing your current shower head with a low-flow one, you could save 20,000 gallons of water per year, assuming two six-minute showers a day.
5. Pay bills online. This will save you the price of stamps and trips to the post office (which will save you gas), and eliminate paper waste.
6. Keep your tires pumped. When you drive with tires that are properly inflated, you could improve your gas mileage by more than 3%, according to Kiplinger.com.
7. Shop at the local farmers market. Do this and you’ll not only get fresher produce, but you’ll be buying food that didn’t require a lot of gas to transport from across the country or from another continent. To find a farmers market near you, use your zip code to search Localharvest.org.*

Drive less

Let’s face it: If it were easy to do, we’d all be driving less and pocketing the savings. Easier said than done. But if you’re determined to save on fuel, here are four ways to go. Do it right, and you may even trim your waistline.

1. Walk to the train or bus.
2. Ride your bike instead of driving to run local errands.
3. Carpool. You may be able to find a carpool in your area through Carpoolconnect.com* or Erideshare.com.*
4. Consider a car-sharing program. Companies in some cities have cars that you rent by the hour, so you have a car only when you need one. You pay either an hourly rate or a flat rate for the day. The cost includes insurance, gas, and miles. Two examples are Zipcar.com* and Ucarshare.com.*

Go easy on the landfills

By buying less new, and reusing or recycling what you already have, you can help reduce the amount of waste going into our landfills.

1. Shop consignment stores. You don’t need to look like you walked out of a 1970s fashion magazine to save money on used clothing. There are plenty of consignment shops and online auctions that sell today’s fashions at a fraction of what they’d cost new. According to the Environmental Protection Agency, secondhand clothing stores prevent more than one billion pounds of textile from ending up as waste in landfills.
2. Recycle your electronics.  When you donate your used electronics,* you keep them out of the landfills and allow families and schools to obtain computers and other electronics they otherwise couldn’t afford. To find out how to recycle other things, go to Earth911.com.*

Gadget corner

Hooked on gadgets and gear? Here are five that can help you on your quest to protect the environment:

1. Use a travel mug for coffee or tea, instead of paper cups.

1. Use a long-lasting water bottle, instead of disposable ones.

1. Buy reusable shopping bags.

1. Use a rain barrel* to catch water you can use in your garden in drier weather.

1. Invest in a compost bin* to slow the growth of landfills. You can also build your own, whether it be a small one* or a larger one* made out of a 32-gallon garbage can.

Other things you can do

1. Plant a Victory Garden. Grow your own fruits and vegetables* in your backyard. You’ll not only eat more healthily and save money on your grocery bill, you’ll help fight global warming by eating food that requires no transporation to your home.

1. Be skeptical of buying stuff with vague green claims like “All natural.” Mercury and lead are naturally occurring elements, but you still don’t want them in your food or shampoo.

1. Try a volunteer vacation. You can visit some truly outstanding destinations for less money and help the environment at the same time with organizations such as Wilderness Volunteers* or American Hiking Society.*

Getting a low-carbon footprint

By following one or more of these 21 suggestions, you’ll do your part in helping to prevent a rise in the Earth’s temperature.

For more ways you can reduce your carbon footprint, check out Carbonfund.com.*

*When you access any of the sites mentioned in this article, you will be leaving our site. Vanguard is not responsible for the accuracy of information on third-party sites. Vanguard receives no remuneration for website links in this article. This article is for educational purposes only.

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This article copied from Vanguard

How to calculate compound interest

Compound interest is the amount that a dollar invested now will be worth in a given number of periods at a given compounded interest rate per period.

Although Microsoft Excel or most calculators does not include a function for determining compound interest, you can use the following formula for this calculation

FV=PV*(1+R)^N

where PV is present value, R is the interest rate over the period N, and N is the number of investment periods, and FV is the future value of the investment in N periods.

In this example, let's assume we have $100,000 and expect an 8% rate of return for 10 years. We also assume the interest will compound (interest is reinvested and we get interest on interest).

FV = 100000 * (1 + .08) ^ 10
FV = 215892.50

This means that in 10 years our $100,000 investment growing at 8% will have grown to $215,892.50. That is not taking inflation into account which would likely reduce the buying power of that money, but nonetheless, the balance would be as calculated.

If the interest was not compounded, the FV would have been $180,000. The calculation would have been essentially FV = (PV * R * N) + PV

Law of 72

The Law of 72 says that if you divide 72 by the percent return on investment you expect, then the result is the number of years it will take for your initial amount to double.

For example:

Law 72

If assume 10% rate of return then it will take 7.2 years to double.

So, if you have $1000 today, in 7.2 years invested at 10% you will have $2000 ignoring taxes, cost of investment, etc.

Some other examples:

72/10% = 7.2 years to double

72/7.5% = 9.6 years
72/5% = 14.4 years to double

72/2.5% = 28.8 years

72/1.25% = 57.6 years

Scott Adams (creator of Dilbert) guide to finances

Unlike Scott Adams cartoon, this advice is serious. It is great if you don't have special circumstances and just want a simple way to to invest.

I would insert before 4 to setup an emergency fund that is at least 3 months of living expenses in case you lose your job, car breaks, a/c goes out, family death that require travel, etc. I would also say that if you don't have a 401 (k) available then get an IRA or Roth IRA, or do automatic investment into a mutual fund.

Regardless the list below is good advice.

Do in the order below:

1. Make a will.
2. Pay off your credit cards.
3. Get term life insurance if you have a family to support.
4. Fund your 401(k) to the maximum. Fund your IRA to the maximum. Buy a house if you want to live in a house and you can afford it.
5. Put six months' expenses in a money market fund.
6. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement.
7. If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio.

Understanding Volatility

Most people judge the risk of an investment by its volatility—how sharply its value may rise or fall over time. The amount of volatility you may feel comfortable with depends on your investment goals, time horizon and tolerance for risk. For mutual fund investors, risk is often measured by two statistics that use volatility of returns in their determination: standard deviation and beta.

STANDARD DEVIATION
Standard deviation measures a fund's volatility relative to its own past performance. If a fund's annual returns vary widely from year to year, the fund will have a relatively high standard deviation of returns. If a fund's annual returns are fairly consistent from year to year, the fund will likely have a lower standard deviation of returns.

BETA
Beta compares a fund's volatility to an appropriate benchmark, often the S&P 500 Index for broad U.S. stock funds. A beta of 1.00 means that a fund's total returns have shown the same degree of volatility as the S&P 500 Index. A beta greater than 1.00 indicates more historical volatility than the index, while a beta less than 1.00 indicates less volatility.

HISTORY LESSON
Investors concerned about volatility may want to look for funds with a lower standard deviation or a beta that is equal to or less than the broader market. Looking at standard deviation and beta together is one way to get a good picture of a fund's historical volatility. .


-- Taken from SmartMoney THE WALL STREET JOURNAL MAGAZINE

What are sector funds?

Investors hoping to pursue specific growth opportunities may want to talk to their financial advisor about sector funds. A sector fund focuses exclusively on a well-defined segment of the economy such as technology, financials or health care. If your portfolio is underweighted in a specific sector, a sector fund can help you diversify and pursue specific growth opportunities that you believe may exist in the marketplace. However, with additional opportunity comes additional risk. Sector funds are typically more volatile than broad market funds, so you should carefully review your investment goals and tolerance for risk before considering whether or not a sector fund may be right for you.

I-bonds are inflation indexed

I-bonds are great because they are indexed with inflation. The rate changes as inflation changes. This is great for people that are on a fixed income that want a conservative place to keep their money that won't be eroded away by inflation. If it is saved for educational purposes it is tax free.