Lois Center-Shabazz

Reasons to Read an Annual Report Before Investing in Stocks

Reasons to Read an Annual Report Before Investing in Stocks

Read an Annual Report

If you read an annual report of an interested stock, it will be one of the most thorough analysis of a company you will find. Most annual reports are filled with beautiful pictures and testimonies from satisfied customers, but this does not deter from the real purpose of the report, which is to give an objective and thorough overview of the company. The annual report is a valuable and necessary analysis tool for both current and potential investors interested in measuring value and risk of a company. The Securities and Exchange Commission (SEC) requires companies to send investors an annual report every year.

What do annual stock reports include?

  • A five-year comparison of selected financial data;
  • A consolidated Balance Sheet, an Income Statement, a Cash Flow Statement, and a statement of changes in stockholders’ equity for the past two years;
  • A management discussion and analysis (MD&A) of results and changes over the last two years; and
  • Notes to the financial statements that describe accounting policies as well as providing more detailed information in such areas as taxes, pension plans, business segment and geographical breakdowns, related party transactions, and future financial obligations.
  • Major aspects of the report an investor should review are the-Income Statement, Cash Flow Statement, and Balance Sheet.

Where should you begin your analysis and research with an annual report? To start, look at:

  • Sales, earnings, and various profit margins (from the Income Statement);
  • Debt levels and the composition of current assets (from the Balance Sheet); and
  • Actual cash flow versus reported income (from the Cash Flow and Income Statements).
  • Lawsuits and complaints about the company

The annual report is the single most complete and useful analysis of a public company available.

How do you acquire an annual report?

  • Investors holding individual stocks are automatically sent an annual report of the companies they own shares in, every year.

You can call the toll-free number of investor relations department of a company and request an annual report.

  • You can download an annual report from the website of some companies.
  • Edgar (SEC/Edgar), the financial database of SEC filings, contains the required annual SEC filings—the 10-K report—for most U.S. companies. Search:

The annual report is probably not only the most objective view of a company you will obtain, but it  also  contains valuable information to help predict a companies future.

Microcap Stocks and The Risk to The Investor

Microcap Stocks and The Risk to The Investor

Microcap Stocks and The Risk to The Investor

The term “microcap stock” applies to companies with low or “micro” capitalizations, meaning the total value of the company’s stock. Microcap companies typically have limited assets. For example, in recent cases where the SEC suspended trading in microcap stocks, the average company had only $6 million in net tangible assets–and nearly half had less than $1.25 million. Microcap stocks tend to be low priced and trade in low volumes.

Where Do Microcap Stocks trade?

Many microcap stocks trade in the “over-the-counter” (OTC) market and are quoted on OTC systems, such as the OTC Bulletin Board (OTCBB) or the “Pink Sheets.”

>OTC Bulletin Board: The OTCBB is an electronic quotation system that displays real-time quotes, last-sale prices, and volume information for many OTC securities that are not listed on the Nasdaq Stock Market or a national securities exchange. Brokers who subscribe to the system can use the OTCBB to look up prices or enter quotes for OTC securities. Although the NASD oversees the OTCBB, the OTCBB is not part of the Nasdaq Stock Market. Fraudsters often claim that an OTCBB company is a Nasdaq company to mislead investors into thinking that the company is bigger than it is.

>The “Pink Sheets”: The Pink Sheets–named for the color of paper they’ve historically been printed on–are a weekly publication of a company called the National Quotation Bureau. They are electronically updated on a daily basis. Brokers who subscribe to the Pink Sheets can find out the names and telephone numbers of the “market makers” in various OTC stocks–meaning the brokers who commit to buying and selling those OTC securities. Unless your broker has the Pink Sheets or you contact the market makers directly, you’ll have a difficult time finding price information for most stocks that are quoted in the Pink Sheets.

How Are Microcap Stocks Different From Other Stocks?

Lack of Public Information: The biggest difference between a microcap stock and other stocks is the amount of reliable, publicly available information about the company. Larger public companies file reports with the SEC that any investor can get for free from the SEC’s Web site. Professional stock analysts regularly research and write about larger public companies, and it’s easy to find their stock prices in the newspaper. In contrast, information about microcap companies can be extremely difficult to find, making them more vulnerable to investment fraud schemes. The SEC has proposed new rule changes that will increase the amount of information brokers must gather about microcap companies before quoting prices for their stocks in the OTC market.

No Minimum Listing Standards: Companies that trade their stocks on major exchanges and in the Nasdaq Stock Market must meet minimum listing standards. For example, they must have minimum amounts of net assets and minimum numbers of shareholders. In contrast, companies on the OTCBB or the Pink Sheets do not have to meet any minimum standards.

Risk: While all investments involve risk, microcap stocks are among the most risky. Many microcap companies tend to be new and have no proven track record. Some of these companies have no assets or operations. Others have products and services that are still in development or have yet to be tested in the market.

Sell Your Home by Owner

Sale Your Home by Owner; For Sale by Owner

I have actually sold a couple of homes as a “for sale by owner” seller. So, it is possible to do a “sell your home by owner” home sell, but It wasn’t as easy as I thought it would be. But I made the decision based on the fact that I had not owned the homes long enough to generate substantial equity to pay a real estate commission. These are the things I learned from my actual experience, my research, talking to real estate agents, and talking to others who had sold a home. I spoke with two friends who are ex-real estate agents, and they helped me quite a bit. I also took an appraisal course many years ago in anticipation of starting a real estate appraisal business. I did not start the business, but I learned a lot about appraising homes.

First of all, expect to be bombarded by real agents eager to list your home, when they see your, “For Sale by Owner” sign. They will contact you over and over hoping that you will become frustrated with the whole process, throw up your hands and say, “where is that pesky real estate agent? I’m listing my house with her or him, yesterday!” Unfortunately, sometimes you will feel like that, but don’t give up too soon.

The following information should be helpful:

1. Fix up your home to make it presentable to sell. That includes electrical and plumbing in tip-top shape, clean carpet, clean walls, clean doors, an attractive front door, and well-groomed landscaping, and maintenance painting, just to name a few.

2. Then you need to decide how much to sell your house for. If your asking price is too high, your home could stay on the market a long time. If your asking price is too low you may lose money you deserve. There are several ways to find out the right sales price. If the homes in your neighborhood are very similar, i.e. square footage, number of bedrooms (bathrooms), and similar size yard, you can use the recent sales from the last two homes similar to yours, in your immediate neighborhood. It gets a bit more complicated when the homes are all different, but appraisers use a similar method. You will have to find homes with your similar square footage, number of bedrooms, number of bathrooms, and if the home is on a lake, gulf course or ocean. You can also pay for a sales appraisal, use your local yellow pages for a listing of real estate appraisers. The next option is to check city or county records. Just call your local city records office and ask them where you can find information on the most recent home sales in your area. Verify which of these homes are similar to yours and use those comparisons to price your home.

3. Then there are the forms, those dreaded forms! They are dreaded but necessary for the legal transfer of your property to another person. You will need legal real estate sales and disclosure documents for your home sale. You can get these documents from a title company or you can pay a real estate lawyer to do the work for you. The real estate lawyer will provide you with the documents and fill them out correctly, for no more than an hourly fee. Verify his/her fee, the time it will take, and agree on a fee before he/she fills out the documents.

4. Let the buyer know that he/she can pay for an independent inspection of your home, and put it in writing. The new buyer can have an inspection for plumbing, electrical, and structural soundness as well as other things. To be on the safe side, I paid for an independent inspection on one of my homes, I had several things fixed as a result, before I sold the home.

5. Let them know that they need to choose a mortgage company, you can also talk to mortgage companies up front. Both of the buyers in my case had never purchased a home. So, I did some research on the best mortgage companies in the area and gave them several to choose from, this just helped to speed up the process. The mortgage company gave them title companies to choose from or they can search for their own title company. For safety purposes, you could have the person go to your mortgage company of choice and get pre-qualified, before you show your home. This way you will know, who the person is, and that they are serious about purchasing your home.

6. Talk to escrow companies before your put your home up for sale, (in the case of fee simple states-talk to a title company or real estate lawyer for closing).

7. Now let’s get back to those pesky real estate agents. There may be an aggressive real estate agent or two who will actually present you a buyer. If that agent is willing to take 3 or 4%, which very few actually can, and they have a buyer, then you may want to talk. The problem you may experience is trying to negotiate with an experienced real estate agent, they will most likely try to get you to reduce your price for their buyer. Make sure you add up your cost, 4% to the realtor, fixing up the home for sale, your mortgage sellers cost (sellers usually pay around 2%), and your moving cost. Do you have enough equity in your home to pay all of these costs and still have a substantial amount to put down on another home? Most homeowners who sale their own home, do so because they don’t have enough equity to pay a real estate agents cost of 6 or 7%. So, don’t let an experienced real estate agent come along and talk you into decreasing the price of your home, and giving them 3 or 4% real estate commission, in that case you could have hired a real estate agent to do everything to began with, and the agent could get full price for your home.

8. Keep yourself safe. Consider “for sale by owner” only when you can’t justify the real estate agents commission (6-7% of sale cost). Take appointments from interested buyers, get caller ID and other information up front. Ask lots of questions on the phone. Get their name, address, and employment before you give them an appointment. Ask to see an ID before they look.

Choosing An Investment Professional

Choosing an Investment Professional

Choosing an investment professional

Are you the type of person who will read as much as possible about potential investments and ask questions about them? If so, maybe you don’t need investment advice. But if you’re busy with your job, your children, or other responsibilities, or feel you don’t know enough about investing on your own, then you may need professional investment advice. But, beware, choosing an investment professional may be more difficult than you think; when you think Bernie Madoff. There are many investment professionals working who you should avoid.

Investment professionals offer a variety of services at a variety of prices. It pays to comparison shop. You can get investment advice from most financial institutions that sell investments, including brokerages, banks, mutual funds, and insurance companies. You can also hire a broker, an investment adviser, an accountant, a financial planner, or other professional to help you make investment decisions.

Some financial planners and investment advisers offer a complete financial plan, assessing every aspect of your financial life and developing a detailed strategy for meeting your financial goals. They may manage, or receive commissions from the companies whose products or services you are getting, how much they will cost, and how your investment professional gets paid.

In contrast to investment advisers, brokers make recommendations about specific investments like stocks, bonds, or mutual funds. While taking into account your overall financial goals, most brokers do not give you a detailed financial plan. Brokers are generally paid commissions when you buy or sell securities through them.

Brokerages vary widely in the quantity and quality of the services they provide for customers. Some have large research staffs. Others specialize in particular types of companies, for example, companies that are new and have never been in business before.

A discount brokerage charges lower fees and commissions for its services than what you’d pay at a full-service brokerage. But generally you have to research and choose investments by yourself.

A full-service brokerage generally costs more, but the higher fees and commissions pay for a broker’s investment advice based on the firm’s research.

The best way to choose an investment professional is to know what type of services you need. Once you know that ask your friends and colleagues whom they recommend. Try to get several recommendations, then arrange a face-to-face meeting. Make sure you get along. Make sure you understand each other. After all, it’s your money.

WARNING!! Before You Invest Always Check with the SEC and Your State Securities Regulator:

>Is the investment firm registered with the regulatory agency? Go to

>Is the investment registered with securities regulators? Go to

>Have investors complained about the investment in the past?

>Have the people who own or manage the investment been in trouble in the past? Go to

>Is the person selling me this investment licensed in my state?

>Has that person been in trouble in my state, or with other investors in the past?

Residential Real Estate As An Investment

You May Want to Think Carefully Before Deciding on Residential Real Estate As An Investment

Residential real estate as an investment

Owner-occupied real estate is one of the best long-term investments one can make. History has shown owner-occupied real estate has produced tremendous long-term returns. In a few areas of the country the tremendous returns have even been short-term. In some cases homeowners have sold homes held 30 or 40 years, for 30 to 40 times their original cost. Other types of real estate investments, are the non-owner occupied rentals, and a combination of the owner-occupied/non owner-occupied rentals. The least expensive for maintenance cost is the owner-occupied real estate investment. The most costly is the non owner-occupied rental. The hardest part of real estate investing is to know when prices are inflated or down. To understand this you must do a lot of research or endure a lot of pain until prices stabilize. Residential real estate as an investment requires, skill, intelligence, research, intuition, a lot of time, very hard work, and luck.

The advantages and disadvantages for all three types of residential real estate as an investment is listed below.

Advantages of owner-occupied real estate are:

  • You can qualify for the lowest interest real estate loans available
  • You can qualify for low down payment consideration, of 5%-10%. There are also extra low-down payment loans for first time buyers who qualify, as low as 3% down.
  • You qualify for a full array of owner-occupied tax deductions.
  • Most owner occupied homeowners take pride and joy in maintaining their own home, so the long-term maintenance is usually reasonable.
  • Owner-occupied real-estate profits have been tremendous when held long-term.
  • There is a capital gain exclusion for taxes up to $250,000 if you have lived in the house for 2 of 5 years.

Disadvantages of owner-occupied real estate:

  • The debt carried when a home is leveraged with a mortgage loan.
  • The responsibility of up-keep, for some this is an advantage, since they enjoy the up-keep.

The next possibility for real estate as an investment is residential real estate rental property or 100% non owner-occupied property. A few investors have very good luck with rental real estate as an investment, while most find it very costly and highly stressful to deal with tenants, even when a management company is hired to collect rents and maintain the property.

The advantages of residential non owner-occupied real estate as an investment (rental property):

  • It is possible to have high returns when held long-term.
  • You can depreciate the property (this is far more advantages for property purchased prior to 1987 though, the depreciation deduction is much less after that year).
  • You get a deduction for up-keep.

Disadvantages of residential non-owner occupied real estate as an investment (rental property):

  • Non owner-occupied mortgage loans carry a higher interest rate than owner-occupied loans.
  • Required down payment for non owner-occupied loans is much higher than owner-occupied loans. In many cases requiring 20%, compared to an owner-occupied loan of 3%-10% down.
  • You must pay capital gains tax on profits, when you sell.
  • Yearly maintenance cost for residential non owner-occupied real estate is usually much higher than owner-occupied cost. Most people simply do not properly maintain property that does not belong to them.
  • Long-term maintenance cost can be phenomenally high.
  • Is difficult to find reasonably priced properties in quality neighborhoods.
  • Neighborhoods with a lot of “four rent” signs are particularly difficult to avoid vacancies.
  • Lost rents are not deductible.
  • A low quality neighborhood (that with high unemployment), brings a low quality tenant, i.e. the default rate on rent payment is high.
  • The debt carried when the rental is leveraged with a mortgage.

The combination of an owner-occupied/non owner-occupied residential real estate can be a viable consideration for those who feel some form of non owner-occupied rental real estate is a must, as an investment. An example of a combination of residential owner-occupied and non-owner occupied real estate is a four-plex where you live in one unit, and rent the other three.

The advantages of the combination owner-occupied/non-owner occupied real estate investment:

  • You can qualify for the lower interest owner-occupied mortgage loan.
  • You can qualify for the lower down payment of 10% allowed with your owner-occupied real estate.
  • You can deduct the repairs and up keep on the rental portion.
  • You are present to monitor the repairs and encourage maintenance.
  • You can depreciate the rental portion.

You have a better probability of purchasing a property in a quality community since your initial cost are lower than a non-owner occupied property. A quality community brings a higher probability of a quality tenant. Attracting quality tenants is probably the most important aspect of residential non-owner occupied investments.

Disadvantages of the combination owner-occupied/non-owner  occupied real estate investment:

  • Your tenants may know where you live.
  • You can only deduct expenses for the rental real estate portion of upkeep, but not your own.
  • You will be liable for normal capital gains taxes on the non-owner occupied portion when you sell. There is a capital gain exclusion on the owner-occupied portion.
  • In our example, it would be 25% of the profit up to $250,000. This is current as of 2004.

Laws change on just about everything,  yearly. Consult directly with current Internal Revenue publications for the latest changes.

See IRS publication 527 at Residential Real Estate Property
See IRS publication 523 at Selling Your Home

Relates Links:
10 Ways to Save Money In Any Economy
Learn to Save Money Before You Think About Investing

The Ponzi Excuse; Lawmakers Reason To Privatize Social Security

Privatize Social Security, Update 2018 – It’s Getting Worse

Lawmakers privatize social security

Some lawmakers would have you believe that social security is a massive debt program in terrible trouble. A Ponzi scheme is how many have characterized it.

A Ponzi scheme is when a person runs a fake investment company that uses new investor funds to pay old investors, instead of actual investment returns. Most or none of the money is ever invested in anything. Because of this, Ponzi schemes collapse in a short period of time.

The Ponzi scheme collapses because the money is used to finance a lavish lifestyle of the Ponzi and runs out when the Ponzi can no longer attract new money or when the investors want their money back. An example of a well-known Ponzi schemer is Bernie Madoff.

How does social security compare to a Ponzi scheme? It does not. First of all, it has not collapsed in a short period of time; in fact, it has lasted for 72 years. Unlike a Ponzi scheme, where only a small number of investors are paid what they invest until the scheme collapses, social security has paid out what employees have invested.

Social security is a low-cost benefit program that pays inflation adjusted benefits, and has not had any missed payments.

Social security takes mandatory payments from employees while most 401k accounts have voluntary participation. Unlike 401k retirement savings accounts pre-retirees cannot take loans against social security accounts. These are a few reasons that social security is more secure than a 401k account.

Another problem with 401k plans is because participation is usually optional, many employees do not understand that they will have a limited or no retirement if they do not participate in their 401k plan.

Now lawmakers are trying to politicize social security due to the aging American population, the social security trust fund will run low in coming years. This has given some politicians the excuse to privatize social security, turning billions of dollars over to Wall Street in 401k type investments. This would be far more costly than the current system and the beneficiaries of the program would get far less money at retirement.

The solution to the social security dilemma is simple. The current social security payroll tax limit is based on the employees first $106,800 in earnings, if this limit is raised just a small amount, a large part of the problem going forward will be solved by adding substantial money to the social security trust fund. There are other viable solutions as well. Putting our social security taxes in private 401k type wall street funds is not a viable solution. Find out more about saving money here.
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Why a Personal Finance Site for Women

At, we are occasionally asked the question, “Why a financial website targeted to women?” The following article will attempt to explain our website. is a personal finance website, women and girls

The Statistics:

>Women are three times more likely than men to be single parents, or early widows.

>Women are more likely to transfer budgeting and saving habits to their children.

>Single mothers today are still more likely to live in poverty than single dads.

>The percentage of men who invest is much greater than women who invest.

Why Focus on Budgeting and Investing?

> Women need to know how to budget and invest for emergencies, savings, college planning and retirement.

>Women need to know how to keep the money they earn, and increase their net worth, through budgeting and investing.

>There is a significant number of women who make high incomes  but do not have enough money to pay monthly bills or to invest. The main culprit, is lack of budgeting skills.

>Woman need to know the field of budgeting and investing, so they can pass it along to their children.

Why invest rather than just save in a less than 1%, simple interest, bank account?

> In order to keep up with, and stay ahead of inflation and taxes, history shows that investing in stocks long-term has given us the greatest returns.

>Our website is important because many women have retirement accounts with their employer, but do not understand the investments in those accounts. Learning and using may enable you to understand the importance of funding your 401k and 403b employer retirement accounts. It will also enable you to choose the appropriate investment, when given a choice.

>Many women are self-employed, homemaker moms, or have a job that does not provide a retirement account. Since retirement planning is a mystery to these women, they choose not to fund a retirement account.

>Many women are not familiar with college savings plans.

>Woman need to know that saving with stocks and mutual funds, you can acquire compounded interest vs. the banks low simple interest rate.

>If women choose to use a broker to invest, understanding investments will increase chances that they are purchasing investments that are appropriate for them.

>In order to purchase stocks and mutual funds for an Online Investment Account, women must understand the stock market first.

Use to learn to budget and invest money now! If you are already familiar with stocks and mutual funds you can use our tutorials for a review. Use our stock quotes and charts, financial calculators, feature articles, book reviews, and investment bookstore, whether you are a beginning, intermediate, or advanced investor.

Start an Online Investment Club at, and learn to invest money with your friends and family members. is targeted to women, but everyone is welcome!!! Use these financial tools with our website.

Join My Personal Finance Facebook Group WomenVestors Chat Stop  

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1. Your daily action business success sheet
2. Your 30-page daily motivational Cash Flow Journal
3. Your Cheat Sheet to Get Your Money Right and Get Out of Debt

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Education Reform Signed As A Part Of Health Care Reform Bill

Education Reform

Education and healthcare

As a part of the health care reform bill President Barack Obama signed a long over due education reform bill as a part of the health reform package. College has become progressively more expensive and less affordable for the middle class in America. The education reform bill is absolutely essential.

The key points of the education reform bill is as follows:

1. Ends subsidies to special-interest private lending companies, cutting out the middle man and decreasing the cost of school loans.

Under the current program banks can act as the middle man for federally subsidized student loans, collecting billions of dollars in federal subsidies, protecting either government money or bank money from default. Under the new program, starting July 1, 2010 banks can still offer student loans, but they are not guaranteed by the government. Cutting out the banks as the middle man will create more money available for more and cheaper college school loans, coming directly from the government.

2. Doubles funding for Pell Grants to help more students afford a college education.

The extra money from decreased bank subsidies will go to more and larger Pell grants. Pell grants are targeted to low and moderate income students, more than $40 billion will go toward these grants. The maximum award will increase to $5,975 from $5,550 and the number of available grants will nearly double.

3. Will cap a graduate’s annual student-loan repayments at 10 percent of his or her income.

This will insure that every graduate can make their school loan payment, therefore decreasing the amount of school loan defaults and saving graduates credit ratings. For students who make their payments on time the government will forgive their balance after 20 years, instead of 25. Public service workers (teachers, nurses, police officers) or those in the military will see their loans forgiven after 10 years.

4. Helps an additional 5 million Americans earn degrees and certificates over the next decade, by revitalizing programming at our nation’s community colleges.

Community colleges, a growing population, will receive $2 billion over the next 4 years.

5. Increased funding to HBCU’s.

Over the next 10 years these colleges will receive an additional $2.5 billion in funding.   Get more personal finance education here.