Personal Finance Blog by Debit versus Credit

Apple: Are They Unstoppable?

October 22, 2008 | Filed in: Business/Entrepreneurship | 3 comments

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Through my daily readings I came across several articles about Apple’s (AAPL) quarterly earnings report and was pleasantly surprised to find that even in the midst of an economic slowdown they made fantastic earnings and even broke a quarterly sales record for their flagship line of Macintosh computers.

Some of you are probably aware that I’m a recent convert to Apple (I bought a MacBook Pro in January of this year) and also that I hold several shares of AAPL stock in an investment portfolio.  I’m probably, then, slightly biased but I just can not help having a healthy level of adoration for this company.  They really seem to have their stuff together.

Apple is (according to AMR Research) the most well-run company in the world when it comes to supply chain management (see the Supply Chain Top 25).  They have an extremely healthy trio of products, between their iPods, iPhones and Macintosh Computers.  They have the support of many educational institutions far and wide and also the support of audio and visual professionals around the world.  They also have a devout following among “Apple geeks” in the computer world.

Honestly they’re one of my favorite companies, not only for their products but for the amount of respect that they deserve for the way that they run their business.  So then I was happy to find that their quarterly earnings report was better than expected.

The company posted revenue of $7.9 billion and net quarterly profit of $1.14 billion…

That quote is from Digital Daily and the remainder of the article can be found through the following link: AAPLause, Please.  I really like this quote from Steve Jobs which he said sometime during the earnings report.

We don’t yet know how this economic downturn will affect Apple. But we’re armed with the strongest product line in our history, the most talented employees and the best customers in our industry. And $25 billion of cash safely in the bank with zero debt.

What a great position to be in.  Zero debt and billions of dollars of cash just sitting in the bank. Like them or love them you have to admit that Apple is one very well run company.

Congratulations Apple on a great quarter (and year) and may your future be filled with all the success that you’ve found over the past several years.

Tags: Apple, Earnings Reports

An Easy Way To Save Money: Plan.

October 21, 2008 | Filed in: Frugality | 3 comments

Today we’ll be featuring a guest post from Michael Caldwell at UseTheDollar.com, a finance blog for college students.

Stores Expect to Sell you more than you came for

The majority of my unplanned spending is composed of impulse buying of items in stores. Your lack of planning and Store’s tricky methods cause you to spend way more than you need to be.

Though many people, notably women, go shopping just for the rush; I rarely step foot in a store without some sort of mission. “I want this book” or “I want this new sweater” — So I go looking for that item. Barnes and Nobles is counting on me to see other things and walk out with them as well as my book though. Stores spend money to fool you.

A large amount of employees’ time, marketing expenses, and floor space is spent to build displays of items they’d like you to bring home. Here are some steps you can take to keep yourself from spending more than necessary at the store.

1. Always take a list.

Whether you are shopping for Christmas, for clothes, or just going to the grocery store; do not go without a list of what you need to buy. And do NOT deviate from the plan. Stick to your list and there’s no way for you to buy on impulse.

2. Take Cash

Another great control on your spending is to only bring cash. By deciding how much you’ll spend (using your list and prices) before you leave, you can take an envelope of cash in that amount. This way, you won’t charge or spend any more than you have planned.

Impulse buying adds up fast. Bringing cash is a surefire way to not go overboard.

3. Clip Coupons

The Sunday paper, cliche as it may be, will cost between $2 and $3 each week. It can contain anywhere from $150 to $300 worth of coupons. Granted, you won’t use all of them, but if you can find even $3 worth of savings then you’ve made it worth having bought that paper. Hey, maybe you’ll even read a little and educate yourself some.

Looking for another way to save more and build wealth? Check out my post on boosting your active and passive income.

4. Don’t fall for store trickery

How often do you see a mannequin with only a shirt on? Stores understand that psychologically, if you see a shirt that you want to buy that is on display with a nice pair of pants, you’re likely to buy the pants as well! Don’t fall for their trickery. Buy what you went in for and nothing else.

5. Put on the blinders

I used to work in Retail and whenever I would work the cash register (actually, we called it the Box Office at the Disney Store) I would be required to ask each customer if they would like to add one of our counter items to their purchase. These ranged from $1-$5, and it amazed me how many people actually fell for this. They never needed that stupid cup or poorly made stuffed animal, but hey: it was cheap, convenient, and they might even hurt my feelings if they didn’t buy it; so they did. Put on your blinders at the register. You’ve nearly completed your mission — don’t succumb to the corporate mischief now.

By following these tips I think you’ll be very surprised just how much you manage to save. An amazing amount of your money goes towards items you never planned or needed to buy — if you can eliminate impulse spending, you’ll be able to build some serious wealth.

You may also be interested in checking out these easy money saving tips for students.

About The Author

Michael Caldwell is a lifelong entrepreneur who has become active in the Financial world. He is the Co-Founder of UseTheDollar.com, and provides valuable, insightful posts, videos, and explanations to help students better understand the financial world.

Tags: Frugality, Guest Post, Money Saving Tips

Buffett’s Buying - But Should You?

October 20, 2008 | Filed in: Investing | 1 comment

If you read any financial news at all, then you’re likely to have read about Warren Buffett, the “Oracle of Omaha” and his proclamation to the world that he’s buying stocks.  A would-be investor would naturally assume that if Warren Buffett (who has made his fortune from the stock market) is buying then now is a great time as any to buy themselves.  However this logic is flawed, on the basis that what’s best for Buffett may not be best for you.  Let’s take a quick look at the facts.

Warren Buffett is extraordinarily wealthy

The point here is that Mr. Buffett can afford to take risks that some of us may not be able to take.  He’s wealthy beyond most of our imaginations and if he loses half of his fortune by taking chances in the stock market he’ll still be wealthy beyond our imaginations.  With a net worth of $62 billion (as reported by Forbes in March of 2008) he’s got plenty of room to take risks.  We however may not be so wealthy and may not be able to handle losing all of our cash is poor investments.

Warren Buffett admits that near-term we’re going to see more pain

While I’m no believer in market timing (it just can’t be done without some degree of luck) it’s still important to remember that we’re likely to see more pain in the economy over the coming months.  With this being the case we may still see more fallout on the markets.  Things will eventually get better, but in the meantime it might not be quite the best time to throw all of your money into the market.

Being greedy has always worked for Warren Buffett

Moving away from playing the devil’s advocate I want to point out that Warren Buffett is, in fact, the richest man in the world.  He has gained his fortune from investing in companies and he is likely to continue to increase his wealth. He has a rule for investing in companies, which I’ll quote for you now…

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful

This rule has played out well for Mr. Buffett over the years.  If there has ever been a time when people are fearful it is now.  Thus if you are willing to follow the mantra of the Oracle of Omaha you may do well for yourself over the long-term.

Follow these rules, and you’ll be okay

We absolutely have to pay attention to what others are doing when it comes to investing, but more importantly we need to pay attention to our own personal needs.  The question is “should I buy?” and the answer is that I just don’t know.  It’s going to be a personal choice based on hundreds of variables.  I can’t answer that question for you, but I can help you answer it yourself.  Based on what we’ve learned from Warren Buffett’s behavior we can formulate a simple list of reasons why investing now may or may not be in your best interests.

• Don’t invest anything that you can’t afford to lose
• To lower your risk it might be best to invest smaller amounts over a long period of time
• Diversifying your portfolio can help you to avoid unnecessary risk
• Being greedy has worked for Warren Buffett… can you make it work for you?

Be careful out there.  Don’t risk more than you can afford to lose, but please do take advantage of this fantastic opportunity to invest in great companies that will still be around after all of this mess has blown over.  You’ll be much wealthier for it in the future!

Tags: Asset Allocation, Investing, Investing over Time, warren buffett

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