How To Make Your $1.5 Million Nest Egg Last

Making Investments Last

Retirement planning can often be a harrowing experience.  You have to decide which types of accounts you should have, the amount you should save, and when you should retire.  What all of this boils down to, at least for the most part, is that your money must be designed to last throughout your retirement.

Let's take a look at a scenario where you have $1.5 million worth of funds.  While a million dollars sounds like a lot of money, you must also realize that this money will need to last for a great number of years.  If you haven't planned accordingly, you might see yourself shortchanged, which could spell disaster.

To assist you with ensuring that your future goes of without a hitch, we have a few tips you can follow to help you stretch out that $1.5 million over the length of your retirement.

Tip #1:  Keep your expenses low and your returns high.

This might sound like an obvious consideration, but many retirees think of their retirement planning in terms of all the minutae of the ordeal.  They don't take the time to consider the "big picture," and that could cause problems rather quickly.  One of the best ways for your portfolio to remain in shape is to limit the amount of money that is given to the fund company rather than being placed in your own pocket. 

Tip #2:  Now is the time to lessen your risk.

When you're first starting out, a little risk isn't too dangerous.  If fact, if you play the stock market well and/or get lucky, you may see quite a windfall of funds coming your way.  Throughout the years, it's likely that you may be balancing those risky financial products with much safer ones, which is a smart thing to do.

Once you're into your retirement, however, you must lessen your amount of risk as much as possible so that your money will last.  This means trading in those stocks for safer financial products, such as bonds.  Some investors may find the switch a bit tricky, especially if they have a portfolio that is mostly made up of stocks, but a financial adviser can help you sort it all out.

Tip #3:  Annuities are a good backbone for your retirement plan.

Annuities are a great way to ensure that the money you've saved for your retirement is able to last.  An annuity works rather simply.  First, you obtain one through an insurance company.  Second, you provide either a lump sum payment, a periodic payment, or both.  And finally, whether immediately or at a future date (such as once your retirement begins), you will begin to receive payments.  One option you will have with many annuities is to be provided with funds that last for the rest of your life.

But that's not all.  Annuities have other benefits as well.  One of the most important of these is the option for a death benefit in most cases.  No one wants to think about the worst happening, but it's a reality that must be faced head-on.  With this benefit, a spouse will begin to receive payments once you've passed.  In addition to the death benefit, earnings from annuities are also tax deferred.  The only thing to watch out for is to avoid withdrawing funds early, due to penalties involved.  Most retirees can avoid this, however, so the likelihood of this becoming a problem is slim.

Source: http://firstsecurityfinancialshow.com/blog/bid/139500/How-To-Make-Your-1-5-Million-Nest-Egg-Last

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James K. Galbraith

Bill Moyers sits down to talk about the economic future with with James K. Galbraith, Lloyd Bentsen, Jr. Chair in Government/Business Relations at the LBJ School of Public Affairs at the University of Texas at Austin. Galbraith is the author of six books, the most recent, THE PREDATOR STATE: HOW CONSERVATIVES ABANDONED THE FREE MARKET AND WHY LIBERALS SHOULD TOO.

Source: http://feedproxy.google.com/~r/bmjvodcast/~3/uhzp1QaZVyQ/profile.html

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Why Futures and Options Expirations Won't Boost Wall Street

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With the pervasive investor uncertaintly, the so-called witching hour, a time when futures and options expire and investors usually make more trades, is unlikely to boost trading volumes Friday.The "quadruple witching" hour -- when index futures, index options, equity options and security futures expire simultaneously -- is traditionally a time of higher trading volumes and investors decide what to do next. But if the low trading volumes so far this week are any indication, the next quadruple witching hour, scheduled Friday, will likely pass with barely a bump.

The investor uncertainty that has characterized the market's choppy performance seems to be going strong. For the entire month of September, investors have behaved as if someone cast a spell rendering them unable to rally or retreat from stocks.

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The market has been stuck in a small trading range of between 1040 and 1130 on the S&P 500 ($SPX) index for the last four months. And there's been a lower-than-normal volume of stock and options trades as investors try to figure out which way the market might head next. Even the approaching quadruple witching hasn't been able to energize traders.

"We are at a point where the economic numbers are a little bit better, but they are not good enough to convince the buyers or sellers to take a stance with any kind of conviction," says Nate Peterson, senior derivatives analyst for Charles Schwab. "It's a market where you continue to wait and see. As the [reports] come out, you look for indicators that will give you a reason to buy, or to short the market."

Waiting for News

Options investors seem to be waiting for news and economic reports to help them reassess their positions before making trades, Peterson says. As a result, the average options volume in September has slipped to 15 million contracts per week from the 20 million contracts per week the market averaged through May.

That options volume may stay low until closer to October, when companies may begin making announcements in advance of the earnings season, Peterson says. Those announcements may then give investors better clues to where the market is headed. Unfortunately, while providing some clarity for investors, those announcements can also create higher market volatility.

"Right now VIX futures are around 25 - so traders are not pricing in a lot of volatility for October," Peterson says, referring to the Chicago Board Options Exchange Market Volatility Index ($VIX), which measures the market's anticipated volatility based on the sale of S&P 500 index futures and options. Historically, volatility has usually grown during earnings seasons, and an increase in the market volatility index generally makes options and futures more expensive, so Friday may be traders' last chance to lock in positions before higher volatility -- and higher prices -- kicks in.

Leading up to the quadruple witching, some traders bought new options on Wednesday and Thursday, but it seems that most are waiting until next week to decide if they need options to protect their long positions. Those who choose to buy put options for that protection as earnings season approaches can likely get them cheap, relatively speaking, on Friday, Peterson says.

And getting cheaper protection would definitely take the hex out of quadruple witching.

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Source: http://www.dailyfinance.com/2010/09/16/futures-options-expirations-wont-help-stocks/

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Why Spirit Airlines Will Never Be Great Again

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Spirit Airlines
Sometimes you get what you pay for when you book a cheap flight.

Passengers on Spirit Airlines (SAVE) Flight 310 over the weekend had to wait nearly 20 hours to fly from Los Angeles to Florida, after an unruly passenger forced the crew to make an emergency stop in Texas.

A vision-impaired 86-year-old man, flying alone, began kicking and ranting in what appears to have been a moment of confusion. The pilot landed in Houston, an airport not served by Spirit. After customers were stranded for two hours on the tarmac and another 10 hours in the terminal, a new plane and crew were brought in to fly the passengers to their destination. (The original crew was already over the federally mandated maximum number of hours that they could be allowed to work.)

Why didn't the original crew either land in Dallas -- an airport serviced by Spirit -- or simply fly out to Dallas after the problematic passenger was detained?

When you specialize in fares as low as $9 and your ticker symbol just happens to be SAVE, cutting corners to save costs is just part of the game.

There's No Free Lunch

The secret to Spirit's low rates is a laundry list of fees that make even legacy carriers seem charitable. Passengers have to pay as much as $45 for a carry-on bag.

You read that right. Even the carry-on bags that most airlines allow for free sometimes may cost more than the actual fare. There are also fees for reservation bookings, assigned seats, and even soft drinks -- extra charges that you don't see at the airlines Southwest (LUV) loves to make mock for their ridiculous fees.

The result is that passenger reviews are generally negative for Spirit. Read any online account of the Flight 310 incident that allows for reader comments and the venom kicks in fast.

Spirits and Ghosts

You wouldn't know that anything is amiss at Spirit if all you were doing was kicking the tires of its financials.

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Operating revenue climbed nearly 30% higher in this year's first quarter, fueled by flight expansion and higher fares. The company makes no bones about letting investors know that its strategy is to "stimulate traffic by offering low base fares while increasing revenue from non-ticket sources."

You see it in the metrics. The average ticket revenue per passenger flight segment actually fell 7% to $76.65 over the past year, while the non-ticket revenue soared 21% to $51.68.

Investors may love to see that, but passengers will see things differently over time if more unruly Spirit passenger stories emerge.


Fasten Your Seat Belts, Investors

Spirit has a rock-solid balance sheet. The company closed out its March quarter with no debt and $421 million in unrestricted cash.

Older airlines -- weighed down with debt, costly employee contracts and pensions -- won't necessarily be able to compete with Spirit as it "liberates" new markets in its expansion path. It's ironic that just days before the Flight 310 fiasco, the company announced that it would start servicing Houston's George Bush Intercontinental Airport.

Flights there won't start for another two months, so perhaps the Flight 310 mishap was just a test landing.

Spirit went public at $12 last year, and it's one of the few IPOs from last year to be trading sharply higher today. Every quarter in its brief public tenure has generated better-than-expected profitability, and that will likely be the case when it reports again in two weeks.

However, investors know that evaluating companies isn't just about healthy balance sheets and growing income statements. The model has to stand the test of time, and that's where Spirit -- and all of the ill will that will tarnish the brand in the coming months and years when it comes to its non-ticketing fees -- comes up short.

You can be cheap and still provide a great product. Southwest has been doing it for decades. JetBlue (JBLU) provides complimentary perks that passengers often associate with pricier carriers.

Sorry, Spirit. You just don't make the grade.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. Motley Fool newsletter services have recommended buying shares of Southwest.


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Source: http://www.dailyfinance.com/2012/07/12/why-spirit-airlines-will-never-be-great-again/

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This LED IPO May Be the Bright Way to Invest in Smarter Lights

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LED-light-bulbFirst, there was the lightbulb. Then came the compact fluorescent. Now, the latest improvement in energy-efficient lighting has arrived: "bulbs" built around light-emitting diodes -- LEDs.

Anyone who lived through the introduction, consumer acceptance, and eventual widespread deployment of CFLs can predict what will happen next with LEDs. First, a small percentage of the market will adopt them, then production will ramp up, prices will drop, and more people will buy LEDs as they get cheaper. Ultimately, ultra-energy-efficient LEDs take over the lighting market, and anyone who figures out today how to invest in this trend will make a bundle of money when that happens.

But that's just the question: How should we invest in this trend?

Many companies play parts in the LED saga, after all. Rubicon Technology (RBCN) sells monocrystalline sapphires for use in making LEDs. Germany's Aixtron (AIXG) and Plainview, N.Y.-based Veeco Instruments (VECO) manufacture industrial-scale equipment for LED manufacture. Over the long term, General Electric (GE) predicts that LEDs will eventually make up 75% of its lighting business.

Meanwhile, LEDs Magazine calls Cree (CREE) "one of the premier LED chip suppliers," and among alternative energy investors, this LED specialist has always been a favorite. The problem with Cree, however, is that because it's so popular, its stock has always looked expensive -- about $3.7 billion in market cap today, on $1 billion in annual revenues. Isn't there a cheaper way to invest directly in the popularity of LED lighting?

A Future Stock for the Lights of the Future

Not yet, perhaps, but there soon may be. Last week, Siemens lighting subsidiary Osram, another big player in the LED market, announced it's planning to IPO later this year. Osram's been contemplating this for some months, but it's finally getting serious, and targeting an autumn IPO.

Analysts suggest many potential valuations for Osram -- from as high as $11.4 billion when the IPO market is hot to as low as $5.6 billion when the market is not. But here's the thing: Even at its most expensive, Osram looks much cheaper than Cree. Based on the $6.5 billion in revenues it collected last year, an $11.4 billion market cap would only price Osram at about 1.75 times annual sales. Cree, in contrast, costs nearly twice that today -- 3.4 times sales.

Foreign IPOs don't get a lot of press in the U.S. But with stronger sales, and similar profit margins (5% to 6%) to those Cree makes, Osram is one IPO you should pay close attention to.

Motley Fool contributor Rich Smith holds no position in any company mentioned.

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Source: http://www.dailyfinance.com/2012/05/04/this-led-ipo-may-be-the-bright-way-to-invest-in-smarter-lights/

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Printing Electricity from Sun and Heat

Solar cells are needed on everything from clothing to packaging, toys, spaceships, consumer goods, medical testers, skin patches and tools. Mostly, they must be thin and flexible, lightweight, environmental and low in cost – even disposable in many cases. Optical transparency would prevent them defacing items and higher efficiency and working from heat as well [...]

Source: http://www.alternative-energy-news.info/press/printing-electricity-sun-heat/

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