Stock Exchanges (2)

NasdaqUnlike the Amex and the NYSE, the NASDAQ (once an acronym for the National Association of Securities Dealers Automated Quotation system) does not have a physical trading floor that brings together buyers and sellers. Instead, all trading on the NASDAQ exchange is done over a network of computers and telephones. The NASDAQ began when brokers started informally trading via telephone; the network was later formalized and linked by computer in the early 1970s. In the subsequent decades it has become a serious rival to the NYSE, as certain big-name technology companies such as Microsoft and Cisco have opted to list on the NASDAQ instead of the Big Board. In November 1998 the parent company of the NASDAQ purchased the Amex, although the two continue to operate separately.

Orders for stock are sent out electronically on the NASDAQ, where so-called “market makers” list their buy and sell prices. Once a price is agreed upon, the transaction is executed electronically. It’s important to note that the NASDAQ does not employ market specialists to buy unfilled orders like the NYSE.

Over the Counter ExchangesThe term “over the counter” (OTC) has changed in meaning over the years. OTC used to simply refer to any trading system that did not have a trading floor. Under this definition, then, the NASDAQ would be considered OTC. As the NASDAQ has grown in prestige during the last few decades, however, the term OTC has changed to refer instead to those stocks that do not meet the listing requirements of any of the major exchanges, including the NASDAQ. This means that today’s OTC market primarily includes penny stocks and other marginal stocks. Today’s OTC market is sometimes referred to as the “pink sheets” since that is the color of the paper on which the penny stock listings are printed.
The OTC market presents the average investor with several problems. First, OTC stocks are usually very risky since they are the stocks that are not considered large or stable enough to trade on a major exchange. They also tend to trade infrequently, so it can be difficult to find a buyer for a stock that you wish to sell. Making matters worse is the fact that pricing information for these stocks are incredibly difficult to obtain. You will have to rely on your broker to get the information for you, and you have no guarantee that it is accurate.

Regional and ForeignIn addition to the exchanges mentioned above, there are also several regional exchanges around the country, including the Boston Stock Exchange, the Philadelphia Stock Exchange, the Pacific Stock Exchange, and the Chicago Stock Exchange. These exchanges originally listed only regional companies but now list both regional and national stocks.
There are also stock exchanges in foreign countries, such as the London Stock Exchange and the Nikkei Exchange in Japan. These exchanges are usually similar to the ones found in the United States, although there are differences depending upon the country in which they are located.
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Stock Exchanges (1)

Introduction
Private companies initially sell their stock to the public through a process called an initial public offering But what if you want to buy and sell shares of a company that is already public? How would you go about finding someone who owns the stock that you wish to buy? And when you're ready to sell, how would you find someone who wants to buy the stock that you own? Obviously, buying and selling public stock would be very difficult without a centralized system for buyers and sellers. Fortunately, there are stock exchanges that provide just such a system, whether it be in a physical building or on a virtual network. This paper takes at look at how some of these exchanges operate, how they differ from one another, and the important characteristics of each.

NYSE
The New York Stock Exchange (also known by its initials, NYSE, or its nickname, the “Big Board”) is the largest and oldest stock exchange in the United States. It traces its origins back to 1792, when a group of brokers met under a tree at the tip of Manhattan and signed an agreement to trade securities. Unlike some of the newer exchanges, the NYSE still uses a large trading floor in order to conduct its transactions. It is here that the representatives of buyers and sellers, professionals known as brokers, meet and shout out prices at one another in order to strike a deal. This is called the “open outcry” system and it usually produces fair market pricing. In order to facilitate the exchange of stocks, the NYSE employs individuals called “specialists” who are assigned to manage the buying and selling of specific stocks and to buy those stocks when no one else will. Specialists and traders use a three-letter ticker symbol in order to identify and trade securities on the exchange.

Of the exchanges, the NYSE has the most stringent set of requirements in place for the companies whose stocks it lists. The NYSE requires that all of its companies meet certain minimum listing requirements, including market capitalization, operating cash flow, and earnings. Companies must also provide their shareholders with certain voting rights, and they must have two or more outside directors plus an audit committee. It is important to note, however, that meeting these requirements is by no means a guarantee that the NYSE will list a company; it simply means that the NYSE will consider listing it. The NYSE still examines each company individually to ensure that it is a stable business before it decides to list it.

Amex
The American Stock Exchange (the "Amex") started as an alternative to the NYSE. It originated when brokers began meeting on the curb outside the NYSE in order to trade stocks that failed to meet the Big Board’s stringent listing requirements (in fact, until the 1950s it was actually known as the “Curb Exchange”). Nowadays, of course, the Amex has its own trading floor, just like the NYSE, and it operates in much the same way except that it lists mostly small and mid cap stocks that don't meet the NYSE's qualifications. In particular, it specializes in energy companies, start-ups, and biotech firms, as well as in options and other derivatives In November of 1998 the parent company of the NASDAQ purchased the Amex and combined their markets, although the two continue to operate separately.





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Initial Public Offerings (2)

Investor Research
Although it is difficult to get in on the ground floor of an IPO, there are still ways individual investors can make money on the IPO market. For one, full-service and online brokerages are increasingly offering IPO shares to their customers. Unfortunately, these shares tend to be reserved for clients with the largest balances (usually $100,000 and up), and are thus out of the reach of many investors. Furthermore, most brokerages will not allow investors to sell IPO shares within a certain time period (generally 60-90 days), which prevents any short-term gains.
The other, more-realistic way to profit from IPOs is to buy into some carefully chosen stocks after they've become available to the broad market. In a suitably-hot IPO, institutional investors will not get as many shares as they want before the stock becomes available on the broad market; thus, an individual investor can buy the stock as soon as its available, and count on the institutional investors to drive the price higher. And, of course, the stock may rise purely because the share price is undervalued. We should point out, though, that historically stocks tend to fall slightly in the first several months of trading, so it's often best to not buy on the first day.
As with any investment, proper education and careful research are vital to profiting from IPOs. Research should include a measure of the risks involved with investing in an IPO. Business, financial, and market risk are several of the risks that should be included in the evaluation process. Researching business risk involves examining the business model of the corporation and the management team of the corporation. Researching financial risk involves examining the corporation’s financial statements, capital structure, and other financial data. Researching market risk involves examining the appeal of the corporation to current and future market conditions
You should also inquire about the purpose of raising capital through an IPO. If the corporation were issuing an IPO just to get out of financial problems, is investing in this corporation a wise decision? Those previous problems could be indicative of other problems, such as weak management. Similarly, if the company was having an IPO just because the IPO market was hot and investors were currently paying too much for IPO shares, then you would want to think twice before buying. On the other hand, if the company has some smart plans for the money, then the IPO might be justified. The investor must thoroughly investigate all available information to obtain an objective view on an IPO.

DPOs
A direct public offering (DPO), like the more traditional IPO, is a stock's introduction to the stock market. The stock is offered to the public for the first time. Unlike an IPO, which utilizes an underwriter to sell shares to the public, DPO shares are purchased directly from the issuing company. Individual investors have limited opportunities to participate in IPOs, so DPOs give the average person a chance to invest in a public offering. However, because DPOs are typically low-profile, it can be difficult to research and locate these offerings. These are less common and more difficult to research than IPOs.

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Initial Public Offerings (1)

Initial Public Offerings (IPOs) are the first time a company sells its stock to the public. Sometimes IPOs are associated with huge first-day gains; other times, when the market is cold, they flop. It’s often difficult for an individual investor to realize the huge gains, since in most cases only institutional investors have access to the stock at the offering price. By the time the general public can trade the stock, most of its first-day gains have already been made. However, a savvy and informed investor should still watch the IPO market, because this is the first opportunity to buy these stocks.

Reasons for an IPO
When a privately held corporation needs to raise additional capital, it can either take on debt or sell partial ownership. If the corporation chooses to sell ownership to the public, it engages in an IPO. Corporations choose to “go public” instead of issuing debt securities for several reasons. The most common reason is that capital raised through an IPO does not have to be repaid, whereas debt securities such as bonds must be repaid with interest. Despite this apparent benefit, there are also many drawbacks to an IPO. A large drawback to going public is that the current owners of the privately held corporation lose a part of their ownership. Corporations weigh the costs and benefits of an IPO carefully before performing an IPO.

Going Public
If a corporation decides that it is going to perform an IPO, it will first hire an investment bank to facilitate the sale of its shares to the public. This process is commonly called "underwriting"; the bank’s role as the underwriter varies according to the method of underwriting agreed upon, but its primary function remains the same.
In accordance with the Securities Act of 1933, the corporation will file a registration statement with the Securities and Exchange Commission (SEC). The registration statement must fully disclose all material information to the SEC, including a description of the corporation, detailed financial statements, biographical information on insiders, and the number of shares owned by each insider. After filing, the corporation must wait for the SEC to investigate the registration statement and approve of the full disclosure.
During this period while the SEC investigates the corporation’s filings, the underwriter will try to increase demand for the corporation’s stock. Many investment banks will print "tombstone" advertisements that offer "bare-bones" information to prospective investors. The underwriter will also issue a preliminary prospectus, or "red herring", to potential investors. These red herrings include much of the information contained in the registration statement, but are incomplete and subject to change. An official summary of the corporation, or prospectus, must be issued either before or along with the actual stock offering.
After the SEC approves of the corporation’s full disclosure, the corporation and the underwriter decide on the price and date of the IPO; the IPO is then conducted on the determined date. IPOs are sometimes postponed or even withdrawn in poor market conditions.

Performance
The aftermarket performance of an IPO is how the stock price behaves after the day of its offering on the secondary market (such as the NYSE or the Nasdaq). Investors can use this information to judge the likelihood that an IPO in a specific industry or from a specific lead underwriter will perform well in the days (or months) following its offering. The first-day gains of some IPOs have made investors all too aware of the money to be had in IPO investing. Unfortunately, for the small individual investor, realizing those much-publicized gains is nearly impossible. The crux of the problem is that individual investors are just too small to get in on the IPO market before the jump. Those large first-day returns are made over the offering price of the stock, at which only large, institutional investors can buy in. The system is one of reciprocal back-scratching, in which the underwriters offer the shares first to the clients who have brought them the most business recently. By the time the average investor gets his hands on a hot IPO, it’s on the secondary market, and the stock's price has already shot up.



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Stock Actions: Buyback

A buyback is a corporation's repurchase of stocks or bonds that it has previously issued. In the case of stocks, this reduces the number of shares outstanding, giving each remaining shareholder a larger percentage ownership of the company. This is usually considered a sign that the company's management is optimistic about the future and believes that the current share price is undervalued.

Companies may decide to repurchase stock for many reasons. They may be attempting to improve the price to earnings ratio by reducing market capitalization, or they may want to offer the stock as an incentive to employees. It's important to note that when a company's shareholders vote to authorize a buyback, they aren't obliged to actually undertake the buyback. Some companies announce buyback plans as a sign of confidence, but it's meaningless unless they actually go through with the repurchase.
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Stock Actions:Splits

A corporation whose stock is performing well may opt to split its shares, distributing additional shares to existing shareholders. The most common split is two-for-one, in which each share becomes two shares. The price per share immediately adjusts to reflect the change, since buyers and sellers of the stock all know about the split (in this case, it would be cut in half). A company will usually decide to split its stock if the price of the stock gets very high. High stock prices are problematic for companies because they make it seem as though the stock is too expensive. By splitting a stock, companies hope to make their equity more attractive, especially to those investors that could not afford the high price.

Stocks can be split two-for-one, ten-for-one, or in any ratio the company wants. (The less common "reverse split" is when the number of shares decreases, for example one-for-two.) To illustrate what happens when a stock splits, let’s look at a simple example. Say you own 100 shares of stock in XYZ Corp. that are priced at $100 per share. XYZ decides that $100 per share is too high of a price for its stock, so it issues a two-for-one stock split. This means that for every share that you previously owned, you now own two shares, giving you 200 shares. When the stock splits, the price will be cut in proportion to the split ratio that was chosen by the corporation (in this case, to $50 a share). If you compare the amount of your investment before the split and the amount after the split you will notice that they are equal (100 shares x $100/share = $10,000; which is the same as 200 shares x $50/share = $10,000). So, in effect, nothing has changed from your perspective.
But although technically nothing changes for the investor during a stock split, in reality often times there are changes. Not only does the split tend to increase demand for shares by making the shares more accessible to small investors, it also usually garners favorable media attention. This tends to cause the price of a stock that has split to increase after the split. The split is interpreted by some as a sign that the company's management is confident that the stock's price will continue to rise. Of course, there is no guarantee that this will happen.
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Stock Actions: Dividend

A dividend is a portion of a company's earnings that is returned to shareholders. Dividends provide an added incentive (in the form of a return on your investment) to own stock in stable companies even if they are not experiencing much growth. Many companies -- mature and young, large and small -- pay a regular dividend to their stockholders.
Companies use dividends to pass on their profits directly to their shareholders. Most often, the dividend comes in the form of cash: a company will pay a small percentage of its profits to the owner of each share of stock. However, it is not unheard of for companies to pay dividends in the form of stock. Dividends can be determined by a fixed rate known as preferred dividends, or a variable rate based on the company's latest profits known as common dividends Companies are in no way obligated to pay dividends, although they will almost always pay them to preferred shareholders unless the company is experiencing financial troubles.

There are basically three dates to keep in mind when considering dividends. The first is the declaration date, on which the company sets the dividend payment date, the amount of the dividend, and the ex-dividend date. The second is the record date, on which the company compiles a list of all current shareholders, all of whom will receive a dividend check. For practical purposes, however, this is an obsolete date -- the more important date is the ex-dividend date (literally, without dividend), which generally occurs 2 days before the record date. The ex-dividend date was created to allow all pending transactions to be completed before the record date. If an investor does not own the stock before the ex-dividend date, he or she will be ineligible for the dividend payout. Further, for all pending transactions that have not been completed by the ex-dividend date, the exchanges automatically reduce the price of the stock by the amount of the dividend. This is done because a dividend payout automatically reduces the value of the company (it comes from the company's cash reserves), and the investor would have to absorb that reduction in value (because neither the buyer nor the seller are eligible for the dividend).
Why do some companies offer dividends while others don't? For that matter, why do any companies offer dividends? The answer, naturally, is to keep investors happy. The companies that offer dividends are most often companies that have progressed beyond the growth phase; that is, they can no longer sustain the rate of growth commonly desired by Wall Street. When companies no longer benefit sufficiently by reinvesting their profits, they usually choose to pay them out to their shareholders. Thus regular dividends are paid out to make holding the stock more appealing to investors, a move the company hopes will increase demand for the stock and therefore increase the stock's price.
So what is the appeal of dividends? They offer a consistent return on a low-risk investment. An investor can buy in to a company that has a stable business and stable (albeit low) earnings growth, rest easy in the knowledge that the value of his or her initial investment is unlikely to drop substantially, and profit from the company's dividend payments. Further, as the company continues to grow, the dividends themselves may grow, providing even more value to the investor. This is one way to treat dividends; however, there are other strategies for profiting from dividends. Some investors try to "capture dividends": they will purchase the stock right after the dividend is announced, and try to sell it for the same price after they've collected the dividend. If successful, the investor has received the dividend at no cost. This usually doesn't work, because the stock price usually adjusts immediately to reflect the dividend payout, as interested buyers know the stock no longer includes the current dividend payment and they adjust the amount they're willing to pay accordingly.
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Tracking Stock

A tracking stock is a type of common stock that is tied to the performance of a specific subsidiary of the company. This means that the dividends and the capital gains for the stock depend upon the subsidiary rather than the company as a whole. Owning a tracking stock does not give the owner voting rights in the corporation, nor do owners of tracking stocks have a legal claim upon the general assets of the corporation. A company will sometimes issue a tracking stock when it has a very successful division that it feels is under appreciated by the market and not fully reflected in the company's stock price.



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Defensive Stocks

Defensive stocks are the opposite of cyclical stocks: they tend to do well during poor economic conditions. They are issued by companies whose products and services enjoy a steady demand. Food and utilities stocks are defensive stocks since people typically do not cut back on their food or electricity consumption during a downturn in the economy. But although defensive stocks tend to hold up well during economic downturns, their performance during upswings in the economy tends to be lackluster compared to that of cyclical stocks.



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Sector Stocks

Stocks are often grouped into different sectors depending upon the company's business. Standard & Poor's breaks the market into 11 different sectors. Two of these sectors, utilities and consumer staples, are said to be defensive sectors, while the rest tend to be more cyclical in nature. The other nine sectors are: transportation, technology, health care, financial, energy, consumer cyclical, basic materials, capital goods, and communications services. Of course, other groups break up the market into different sector categorizations, and sometimes break them down further into sub sectors.




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Penny Stocks

A penny stock is a stock priced under one dollar per share (or in some cases, under five dollars per share). Most penny stocks have only a few million dollars in net tangible assets and have a short operating history. Penny stocks are almost always small cap stocks, but the reverse isn't necessarily true. The term "penny stock" is sometimes used in a derogatory fashion, since many penny stocks are virtually worthless and should be considered extremely high-risk investments. There are also many cases of fraud involving penny stocks each year


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Large Cap, Mid Cap and Small Cap

Stocks can be classified according to the market capitalization of the company. The market capitalization of a company represents the total dollar value of the company's outstanding shares. This is equal to the current market price of its stock multiplied by the number of shares of stock that it has outstanding. That number gives you the market value of the company, which is one measure of the company’s size. Roughly speaking, there are three basic categories of market capitalization: large cap, mid cap, and small cap (although some analysts include others such as mega cap at the large end and micro cap at the small end). The definitions for each of these might vary somewhat depending on whom you’re talking to, but usually they are as follows:

• Large cap: market cap valued at more than $10 billion
• Mid cap: market cap valued between $1 billion and $10 billion
• Small cap: market cap valued at less than $1 billion
In general, the larger the cap size, the more established the company, and the more stable the price of its stock. Small cap and mid cap companies usually have a higher potential for future growth than large cap companies, but their stock tends to fluctuate more in price.

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Stock Classes

Although common stock usually entitles you to one vote for every share that you own, this is not always the case. Some companies have different “classes” of common stock that vary based on how many votes are attached to them. So, for example, one share of Class A stock in a certain company might give you 10 votes per share, while one share of Class B stock in the same company might only give you one vote per share. And sometimes it is the case that a certain class of common stock will have no voting rights attached to it at all.

So why would some companies choose to do this? Because it’s an easy way for the primary owners of the company (e.g. the founders) to retain a great deal of control over the business. The company will typically issue the class of shares with the fewest number of votes attached to it to the public, while reserving the class with the largest number of votes for the owners. Of course, this isn’t always the best arrangement for the common shareholder, so if voting rights are important to you, you should probably think carefully before buying stock that is split into different classes.

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Types of Stock: Part 2

Preferred Stock
The other fundamental category of stock is preferred stock. Like common stock, preferred stock represents partial ownership in a company, although preferred stock shareholders do not enjoy any of the voting rights of common stockholders. Also unlike common stock, preferred stock pays a fixed dividend that does not fluctuate, although the company does not have to pay this dividend if it lacks the financial ability to do so. The main benefit to owning preferred stock is that you have a greater claim on the company’s assets than common stockholders. Preferred shareholders always receive their dividends first and, in the event the company goes bankrupt, preferred shareholders are paid off before common stockholders. In general, there are four different types of preferred stock:

• Cumulative: These shares give their owners the right to “accumulate” dividend payments that were skipped due to financial problems; if the company later resumes paying dividends, cumulative shareholders receive their missed payments first.
• Non-Cumulative: These shares do not give their owners back payments for skipped dividends.
• Participating: These shares may receive higher than normal dividend payments if the company turns a larger than expected profit.
• Convertible: These shares may be converted into a specified number of shares of common stock.
Since preferred shares carry fixed dividend payments, they tend to fluctuate in price far less than common shares. This means that the opportunity for both large capital gains and large capital losses is limited. Because preferred stock, like bonds, has fixed payments and small price fluctuations, it is sometimes referred to as a "hybrid security."


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Types of Stock: Part 1

Stocks can be classified into many different categories. The two most fundamental categories of stock are common stock and preferred stock, which differ in the rights that they confer upon their owners. But stocks can also be classified according to a number of other criteria, including company size and company sector. This paper look at the different types of stocks that are available and the important characteristics of each of them.
Common Stock
Most shares of stock are called "common shares". If you own a share of common stock, then you are a partial owner of the company. You are also entitled to certain voting rights regarding company matters. Typically, common stock shareholders receive one vote per share to elect the company’s board of directors (although the number of votes is not always directly proportional to the number of shares owned, The board of directors is the group of individuals that represents the owners of the corporation and oversees major decisions for the company. Common stock shareholders also receive voting rights regarding other company matters such as stock splits and company objectives. In addition to voting rights, common shareholders sometimes enjoy what are called "preemptive rights." Preemptive rights allow common shareholders to maintain their proportional ownership in the company in the event that the company issues another offering of stock. This means that common shareholders with preemptive rights have the right but not the obligation to purchase as many new shares of the stock as it would take to maintain their proportional ownership in the company. But although common stock entitles its holders to a number of different rights and privileges, it does have one major drawback: common stock shareholders are the last in line to receive the company’s assets. This means that common stock shareholders receive dividend payments only after all preferred shareholders have received their dividend payments. It also means that if the company goes bankrupt, the common stock shareholders receive whatever assets are left over only after all creditors, bondholders, and preferred shareholders have been paid in full.




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Introduction to Stocks

Stocks are among the most talked about and most popular investment opportunities available. But although virtually everyone has heard about stocks, many people don't understand the basic concepts underlying them. Indeed, the starting point for any investor interested in investing in stocks should be to understand what shares of stock actually represent and why there is a market for them. Simply put, shares of stock represent partial ownership in a company. That is to say, when you own a share of stock, you actually own a part of the company, not just a fancy sheet of paper.
This means that you have a say in how the company is run and that you have a claim on the company's profits if and when they are paid out in the form of dividends. The more shares of the company that you own, the more say you have in how the company is run and the greater your claim on the company's dividends. Ownership in the company is determined by the number of shares you own divided by the total number of shares outstanding. So, for example, if a company has 100 shares of stock outstanding and you own 50 of them, then you own 50% of the company (of course, most companies have millions of shares outstanding.) That, in essence, is what it means to own stock. In reality, of course, there is much more to it, starting with the reasons why companies have stock in the first place. In fact, not all companies have stock. Only a certain type of company called a corporation has stock; other types of companies such as sole proprietorships and limited partnerships do not issue stock. What distinguishes a corporation from these other businesses is the structure of its ownership. A corporation is in itself its own entity and is owned by shareholders, whereas in a sole proprietorship or limited partnership the company is directly owned by the sole proprietor or partners, respectively. The owners of the corporation own it through the ownership of shares of stock. There are many reasons why a company might choose to become a corporation. First of all, incorporation gives the company separate legal standing from the owners and protects the owners of the company from being personally sued in the event that the company does injury or harm to another person or corporation. This concept is known as "limited liability" and it protects the owners of a corporation from being held personally liable in the event that the company is the subject of a lawsuit. Incorporation also provides companies with a more flexible way to manage their ownership structure. In addition, there are different tax implications for corporations (although these can be both advantageous and disadvantageous). So how does one obtain stock ownership in a corporation? For many companies, shares of stock are limited to the founders of the company and/or their employees. These companies are called "private" companies because their stock is owned privately; that is to say, it is not possible for the public to buy shares in the company. All corporations start out private; after all, the founders of the company usually want to maintain control over the company and its profits. However, after a company has grown for a while, the private owners will sometimes decide to sell shares of stock in the company to the public. This is what is called "going public" or performing an "initial public offering" Companies choose to sell shares of their stock to the public in order to raise money for the company. They might need this money in order to expand their operations, pay off existing debt, develop a new product, or for any number of other reasons. So for a certain price the corporation decides to sell its rights of ownership to the public. Once a company has sold shares of its stock to the public, those shares can then be resold by the initial buyers to other investors. This buying and reselling of stock is done on what is called an exchange, which is essentially just a marketplace for stock. As the demand for a stock rises and falls on the exchange (which can be due to a number of different reasons), the price for the stock will also fluctuate. Price fluctuations, in turn, create another opportunity for investors to make money through stock, namely through capital gains. Capital gains are those profits that an investor makes when he or she buys a stock for one price and then later sells that stock for a higher price. Capital losses, the opposite of capital gains, occur when the investor sells the stock for a lower price than he or she originally paid. So, companies sell stock in order to raise money and investors buy stock in order to make money. But, as economists are forever reminding us, there's no such thing as a free lunch. Each side must give something up in order to have the opportunity to make money. As mentioned, corporations, when selling their stock, give up some control as to how the company is run and what is done with the profits. In return, they get an influx of capital for the business. On the flip side of the equation, individuals give up their money in order to buy the stock (and become "shareholders"); in return, they gain control over the corporation and the right to future profits. There is, however, the chance that there won't be any future profits, that the profits will be much lower than what the investor anticipated, or that the company will go out of business entirely. That means that the investor takes on a certain amount of risk when investing in a company's stock, If any of these things happen, the investor could lose most or all of the money that he or she paid for the stock in the first place. That means that there is a certain amount of risk associated with investing in stocks. Of course, most of the above is a vast simplification of what is actually involved in investing in stocks. Deciding how much a stock is worth, evaluating the risks associated in investing in them, and trading them are all very complicated processes that are discussed in detail in this paper.



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Investment Instruments

There are some investment instrument that we can choose it for our retirement plan. Here is some example:
1) Stocks
2) Mutual Funds
3) Bonds
4) Currencies
5) Futures
6) Commodities
7) Properties, etc
We'll start the explanation from stocks, because it will be give us high return as high as its risk.
Here is some articles about stock I compiled from various resources, but I forgot to write those author.. :-D..May be useful for you all!



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Save To Retire

Once upon a time in America many corporations offered their employees a benefits package that included a pension. In return for faithful years of hard work employees were given enough money in their retirement years to enjoy a comfortable life. However, this became a financial drain on corporations, and as a result, most companies made the decision to cut pensions out of their benefit programs. This development created the need for alternate ways for people to fund their retirements.
Over time it became obvious that people were going to be responsible for creating their own individual savings plans. Initially, there were limited amounts of options and information that was available. However, this has changed dramatically over the last several decades. Let's take a look at the basic steps of establishing a retirement savings plan.

Steps for Saving

• Create a budget. This is an important first step for a variety of reasons. It will often help unover areas where an individual may be overspending. It will also establish how much money is available for savings/investing.
  Pay off high interest debt. It makes little sense to save for the future by placing money in an investment that may make 12% per year if you are struggling with credit debt which is costing you 18%. Hopefully, by enacting your budget you will begin to live within your financial constraints, with enough left over to pay off these debts.
  Start an emergency savings fund. Most experts suggest that you save enough money to cover 2 to 3 months of living expenses. This will act as a financial cushion if an emergency arises or a job is lost. This will help to preserve an individual's credit and prevent him from going into debt.
  Begin saving 10% of your income. 10% is simply a rule of thumb. Your budget may dictate a lower figure, and many people choose to go higher. Generally, younger investors benefit by placing their money in higher risk investments. There will be time to overcome any dips in the market, while at the same time taking advantage of high growth opportunities.
  Start Early. The longer an investment grows the more it is effected by compound interest. Each year the balance gains interest which becomes the new balance. For example. If a person begins with 2,000 and gains 10% interest annually, then after year one the interest is $200 and the new balance is $2,200. At the end of the 2nd year the interest is still set at 10% but it now totals $220. In this example the total balance (with no additional investments) after 30 years is $34,898.80. This shows the power of compound interest if you start early.
  Plan your retirement. Although you won't know every detail, try to determine when you would like to retire, and how much money you will need to live the lifestyle you desire. These figures will help give you an idea of how much you will need to save. It's important that you don't underestimate your desired lifestyle. This can only hurt you in the long run.
  Factor in inflation. The amount you would need to retire today will almost certainly be greater 10 years from now. Be sure and figure inflation into the equation. There are some great free online inflation calculators available on the internet.
  By following these steps now, you can help ensure that you will be able to enjoy your retirement years. The longer you wait the harder it will be to reach your goals, so start today!
  
  
  

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Investing Basics

I write these investing basics in order to make you, investor candidates, to learn investing principles easily. You only need less than 15 minutes to read these principles, and we divide its explanation to some sections as below:
Section 1: Setting financial goals of your life
There is a parable that said if you don’t know where you are going, probably you will be lost and don’t know where you are. And so does investment. It’s very important for you that you must set what goals are you want to get it in the future before you begin to invest.


Here is two steps will help you setting your life goals in the future:
1. Imagine your dream in the future
Where will you live? Is in the house or apartment? How big the house that you dream? Are you wanted to live in the town centre or near the villages?
How much children that you want? How you imagine about their education?
What kind of career that you imagine? What kind of lifestyle will be yours? Is the car and famous brands is your lifestyle? How often you want to go holiday in a year?
How you imagine about your retirement? Are you wanted to get monthly fixed income in our retirement age? If yes, how much its amount?
2. Write your life goals in a letter then categorize it according to when you will reach it.
As an illustration, Anne is a woman who already fresh graduated from the college and probably has some life goal as below:
Age 25-35: Having a small house with two bedrooms, a car with the value about $ 120,000 and get married then has two children
Age 35-55: Able to make their children graduated from the university, taking vacation on the abroad annually and having a resting house outside the town
Age 55-75: getting retirement fund i.e. passive income

Section 2: Setting your risk tolerance of the investment.
Commonly, an investment that give you high profit will has higher potential risk. Conversely, an investment with lower potential profit has lower potential risk.
The most important thing is we must feel comfortably with the ways we invest our money. To know about your risk tolerance for investment, try to answer fast five questions below:
1. You feel more comfortable with kind of investment:
a. Money markets
b. Government bonds
c. Corporate bonds
d. Stocks
2. After you make an investment decision, you feel…
a. little worry
b. satisfied with your investment decision
c. optimist
d. motivated
3. E.g. you plan to invest about $ 2000, you feel comfortable if your investment gain…
a. potential gain and loss of each other about $100
b. potential gain and loss of each other about $300
c. potential gain and loss of each other about $700
d. potential gain and loss of each other about $1000
4. In the last five years, your investment has gained profit average about 15% annually. But in the last five months, your return becomes loss about -30% annually. What will you do?
a. Selling all your investment
b. Selling a half your investment.
c. Do not do anything
d. Buying its investment more
5. What is sentence those describe you in facing the life?
a. Do something carefully, don’t take unnecessary risks
b. Take a little and measurable risks, be patient in gaining life dreams
c. Plan everything with good, as long as it’s planned, then the life dreams will come true someday
d. Never be doubt, reach your life dreams quickly.
How about your risk profile in investment? Bagaimana profil anda dalam menghadapi resiko dalam berinvestasi?
If your most answer is A:
You don’t like any risk. Probably you must learn more about investment, because if you can learn more about potential risk and profit of investment, you will be able to manage your investment portfolio.
If your most answer is B:
You decide an investment carefully, but you can tolerate its risk, as long as the risk is clear for you and you can measure it. My advice is you would build diversified investment portfolio, then the profit you can get is better than the inflation.
If your most answer is C:
You understand the risk concept and its consequences of investment. In getting the higher profit, probably you need to have a balanced investment portfolio between investment instruments that give conservative, moderate and aggressive profit.
If your most answer is D:
You’d like to take a risk and probably you have an aggressive investment portfolio like stocks. This investment is relevant with young men (25-35 years old) who has an appropriate income and not depend on investment return. Please remember to diversify your stocks portfolio and think for long term investment.


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Saving versus Investing

There’s a difference between saving and investing.
Investing is about trying to increase your dollars. It involves more risk than saving, but it is possible to make a lot more money. This can be a good decision for long-term goals.

Investing is:

• Used for long-term goals
• Spending money with the expectation of making profit
• Risky, but can make you a lot of money

Saving, on the other hand, can be a safer and slower way to grow your money. This is a good way to store money for emergencies or short-term goals.

Saving is:

• Used for short-term goals
• Low return (your money may grow slowly)
• Less risky than investing

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A New Chapter for Retirement

John F. Kennedy once said, “Change is the law of life. And those who look only to the past or present are certain to miss the future.” This is certainly true of preparing for retirement. If we continue to expect that the ways of the past will see us through to our futures, we will be left behind. The methods that helped prepare us for retirement are quickly disappearing, and we must start using others.

Today’s companies are rewriting the retirement rules for working Americans. Traditional pension plans, which gained prominence in the 20th century, are rapidly disappearing because of the high costs involved in funding them. Some corporations are defaulting on their plans, and an increasing number of companies have underfunded or at-risk plans.

To help protect employees with corporate pensions, the federal government has enacted laws requiring employers to meet a 100% funding target for their defined-benefit plans. Companies that sponsor pension plans are also required to pay higher insurance premiums to the Pension Benefit Guaranty Corporation (PBGC), which was created by Congress in 1974 to help protect American workers from the risk of pension default. Premiums have increased because the PBGC itself is facing a deficit as a result of more companies defaulting on their pension plans.

Because of these costly requirements, it is becoming less and less attractive for companies to provide traditional pensions to retirees. Employers with underfunded plans may simply choose to eliminate them, and even companies with healthy plans may decide that defined-benefit plans are not worth the cost. As a result, it is likely that more companies will offer defined-contribution plans like the 401(k) to attract new employees and to help employees fund their own retirements.

Thus, it is important to be aware that you will have less help from your employer and will have to rely more on your own savings and investments to fund your retirement.

The government has tried to help by raising contribution limits to most employer-sponsored retirement plans. You can contribute money to these plans on a pre-tax basis. Your contributions and any earnings accumulate on a tax-deferred basis. Of course, remember that distributions from most employer-sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59½, may be subject to an additional 10% federal income tax penalty.

A number of companies are taking steps to help workers fund retirement. Many have instituted automatic-enrollment in their defined-contribution plans to encourage more employees to participate. Some are enhancing the benefits of their plans by increasing the amount they contribute to employee accounts and/or enhancing matching contributions.

Many companies that still have traditional pension plans should be able to pay their promised benefits. But in light of recent trends, it would be wise to consider all possible sources of retirement income when reviewing your retirement strategy. With the changing retirement landscape, there may be no better time than now to size up your current situation. Your company-sponsored retirement plan will be just one piece of your retirement funding pie.

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A Matter Of Lifestyle

By Stacey L. Bradford SmartMoney

DANIEL FUNK, a 40-year-old small-business owner from Santa Monica, Calif., is in the prime of his life. He exercises regularly, eats right and doesn't smoke. Yet when he went to purchase life insurance a couple of years ago, he found he would have to pay through the nose for coverage because he was considered "high risk." The problem wasn't his cholesterol or blood pressure. Rather, the insurance company, Metropolitan Life, was concerned that he liked to go mountain climbing and scuba diving.
And Met Life wasn't the only one. It was only after some serious shopping with online insurance broker AccuQuote that Funk was able to find an insurer that was more impressed with his health than his hobbies and was willing to provide a decent rate.

Many people are surprised to discover that qualifying for the best rates typically involves much more than receiving a clean bill of health from your doctor. Insurers also try to identify people who lead certain, shall we say, risky lifestyles. Believe it or not, an insurance company might be more forgiving of someone who controls his high blood pressure with medication than someone who, like Funk, participates in dangerous hobbies. "The healthy bungee jumper scares me more than the well-medicated money manager in midtown Manhattan," says William Carroll, an actuary with the American Council of Life Insurers (ACLI).
So how much will your lifestyle cost you? It could more than double your expenditure over the life of the policy. To understand why, you first need to have a grasp on how term-life policies are priced.
When reviewing risk, insurance companies automatically divide people into two groups: smokers and nonsmokers. (Incidentally, some companies consider someone who uses any tobacco, including an occasional cigar or dip of chewing tobacco, to be a smoker.) Then, within these two groups, each person is broken down into one of three risk categories: Preferred Plus, Preferred or Standard. Some companies also have lower classifications for those who are perceived to be at greater risk of early death. But even within the top three tiers, the premium varies drastically depending on one's status.
Here are the current rates from Pacific Life for a $1 million, 20-year term policy for a 40-year-old male. A nonsmoker will pay $945 a year for a Select Plus (same as a Preferred Plus) policy, $1,065 for a Select policy and $1,965 for a Standard policy. And the rates are substantially higher for smokers: Select Plus is as high as $1,435 a year, a Select Smoker policy costs $3,525 and a Standard policy goes for a whopping $4,405. (Just another reason to quit smoking — as if you needed one.)
Generally speaking, if you engage in activities that the insurance companies believe are risky, you're knocked out of the running for a Preferred Plus or Preferred policy. At best you may qualify for a Standard policy; toss in a few medical conditions and you'll be relegated to something below that. Here are the details on some less commonly known risks that could lead to hefty life-insurance bills.
Mental HealthMost people don't realize that insurance companies are just as interested in mental health as physical health. So if you're on Prozac or another antidepressant, it could cost you. The insurance companies worry that if you're depressed you may eventually take your life. And after two years, most policies are required to pay if someone commits suicide.
Not all depression is viewed as a risk factor, however. Most companies, for example, won't penalize you for what's known as "reactive depression." This would apply if, say, you took a minimal dosage of Zoloft for a few months after a specific (and traumatizing) event such as the death of a family member or a divorce. Be careful, though: A longstanding prescription could increase your premiums, says Don White, a spokesman for the Million Dollar Round Table, an insurance industry group.
According to AccuQuote, Transamerica Life Insurance Co. will classify you as "Standard Plus" if you're taking a regular prescription of Paxil and seeing a therapist. ("Standard Plus" is a notch above Standard, but below Preferred.) Some companies are even stricter, says the online broker: Protective Life Insurance Co. would give this same person a Standard rating.
Driving RecordEveryone knows a person's driving record affects his or her auto-insurance rates. Unfortunately, it also affects life-insurance rates. Just a couple of speeding tickets will do the trick. Most people are surprised that life-insurance companies ask about your driving record, says Byron Udell, chief executive of AccuQuote. The thinking: If you get caught speeding twice in five years, you're probably a habitually risky driver, he says. In fact, Bryan Place, a principal owner of online-insurance broker Termassistant.com, says Travelers Insurance will give someone a below-standard-rate policy if he has two moving violations in two years.
Place recently came across this issue while trying to find an insurance policy for a healthy 30-year-old male client who wanted to purchase $1 million in coverage now that his wife was pregnant. Even though his client was in perfect health, companies kept offering him the more expensive Standard rating because he had three moving violation within five years. Place finally found a policy at a Preferred Plus rating after he wrote a letter on his client's behalf explaining that the man is more mature now than he was at 25 and that he would surely be more careful now that he has a child on the way. Unfortunately, not all cases are so easily solved.
Credit HistoryWhat does one's credit history have to do with life expectancy? Insurers worry that people with bad credit or a bankruptcy in their past might not pay their insurance premiums, says Termassistant.com's Place. And since it takes an insurance company roughly five or six years to break even on the underwriting process, they take this risk pretty seriously. There's also the issue, once again, of suicide. Someone who's under great financial stress may feel that if he takes his own life, at least his family will be taken care of. Morbid, yes, but that's the theory.
(Wondering who else is looking at your credit score? Click here .)
Family HistoryHere's one more thing to blame on your family. If you have a parent or sibling who had cancer or a heart attack before the age of 60, you'll pay for his or her poor health. Even if your mother or father ate poorly and never exercised while you're a vegan marathon runner, the underwriter is unlikely to make a distinction. The reason is simple. Statistically, you're more likely to die from one of these ailments than someone who has no family history of heart disease or cancer. "The acorn doesn't fall far from the tree," says ACLI's Carroll. "People who live to be 90 have parents who lived to be 90."
How much will your father's poor health cost you? At First Colony, someone with a parent who had one of these ailments before age 60 will automatically be rejected from the Preferred Best and Preferred categories.
HobbiesInsurance companies also care what you do in your spare time. One of the first questions a life-insurance agent will ask you during the screening process is whether you're a private pilot. That's a fair question, since flying a small plane can be highly dangerous. But plenty of more-common hobbies also raise eyebrows. As we mentioned earlier, mountain climbing makes the list, along with scuba diving, bike racing and helicopter skiing. In fact, anything that's considered an extreme sport will force you to write a bigger check to your insurer.
TravelIt's against the law to charge someone a higher premium if they live in a city like New York vs. a quiet suburb in Wisconsin. But where you travel is another story. If you regularly visit "dangerous" locales like Russia or if you volunteer with HIV patients in Africa, you're considered a much greater risk than someone whose most adventurous trip takes them to sunny Orlando, Fla. If your parents live in Israel, an underwriter may assume that you're going to visit them often in the future, warns Round Table's White, even if you don't mention it on your application.
Fighting BackThe good news in all of this? What's viewed as risky can vary by company, and in an effort to be competitive, companies will often change their criteria from year to year, says ACLI spokesman Jack Dolan. So by shopping around, you may find a company that won't penalize you for certain activities.
And a word of caution: While it might be tempting to lie about your hobbies or family health history on your insurance application, don't do it. Should you die in an accident related to the sport, for example, and the company discovers that you participated in this avocation before your signed the paperwork, it won't pay your benefit. "You don't want to give it a reason not to pay the claim," says AccuQuote's Udell.
Finally, don't forget that you can always apply for a new policy. So if you, say, clean up your driving record, go ahead and ask the company to lower your premium. If it won't, another company might.
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Will You Ever Be Able To Retire?

Low savings, longer life spans increase odds of coming up short

By John W. Schoen
Senior Producer
MSNBC

In 1972, when Krystyna Strozniak went to work for Western Electric, the former manufacturing arm of AT&T, saving for retirement was the last thing on her mind.
Intent on being a teacher, she soon found herself drawn to a career in telecommunications, a 31-year path that included a succession of technical jobs, the breakup of AT&T and her promotion to a management position in a piece of the company that eventually became part of Verizon. Through it all, she diligently participated in company-sponsored savings plans and enjoyed the security of knowing she would collect a monthly paycheck for life after 30 years of service.
“I never worried about retirement,” she said.
In 2003, Strozniak took the company up on a retirement buyout offer to devote herself full-time to the care of her 12-year-old son. But she opted for a lump-sum payment, which she then turned over to a professional financial adviser, in place of the security of a guaranteed monthly check.
“I don’t think it’s going to be secure and guaranteed,” she said, referring to the promised pension. “I think they may take it away some day. I see businesses now taking away health care benefits and businesses declaring bankruptcy, and they want to get rid of the pensions.”

For much of the last half of the 20th century, the idea of retirement for many Americans included a public or private pension that guaranteed income for life and provided for a period of “golden years,” usually after age 65, spent on leisure, volunteer work or other personal pursuits. But today, the financial security of American workers is more uncertain than it has been in decades. Once reasonably assured of a comfortable retirement, Americans are now watching private pensions collapse and public pensions come under pressure. And even those like Strozniak, whose retirement security was once all but guaranteed, are now finding they have to fend for themselves.
There is mounting research that most Americans are ill-prepared to cope with the task of creating a nest egg to rely on when they’re too old to continue working. They're also woefully unaware of the risks they face in retirement investing. And they're falling further behind in providing for their long-term financial security.
“I don’t think were going to see another generation that’s going to fully retire,” said Doug Lockwood, a financial planner who specializes in retirement at Harbor Lights Financial Group in New Jersey. “There's going to be a lot of people that are going to continue to work for the rest of their lives.”
Long list of risksAs traditional pensions fade into history, employers have shifted the financial risks of a secure retirement to individual workers through company-sponsored savings plans like 401(k)s. No matter how well you save and invest, the list of risks is a long one, according to Alicia H. Munnell, director of the Center for Retirement Research.
“We now have all the risks,” she said. “From the first day, the employee has to decide whether or not whether to join the plan, has to decide how much to contribute, has to decide how to invest those contributions, has to decide how to change those investments over time, has to decide what to do about company stock, has to decide what to do about cashing out when moving from one job to another. And then, at retirement, this person is going to get, if they’re lucky, $100,000 and be told goodbye and have to figure out what to do with that over an uncertain lifetime. So it’s an enormous challenge.”
As employers have shifted responsibility for retirement to their workers, they've also left them largely on their own when comes to learning how to managing their investments. Most individuals are poorly prepared to duplicate the professional investment management that is a critical component of traditional public and private pensions. So even those workers who do accumulate retirement savings are often frozen into inaction when it comes to the daunting task of actively managing their investments, according to Lockwood.
“What a lot of people do with their 401(k) — because they still treat it like a company-sponsored plan — they don’t treat it like their own money," he said. "They put it under the pillow and really don’t think about it.”
Many Americans aren’t even aware of the scope of the financial challenge they face. Surveys repeatedly have found that many Americans have woefully underfunded their personal retirement savings and remain largely clueless about how much more they will need to support themselves once they stop working. More than half of workers 55 and older have saved less than $50,000 toward retirement, according to an April survey by the Employee Benefits Research Institute.
The study also found that half of current workers expect to get by on 70 percent or less of their pre-retirement income. Yet among people who have already retired, two-thirds say the 70 percent level is inadequate. Nearly six in 10 workers haven’t even bothered to calculate how much they might need to live on, according to the EBRI.
How long will you live?The biggest risk of all — that you might outlive your savings — is all but impossible to predict. Traditional defined-benefit pensions spread that "longevity" risk among a large pool of workers, using actuarial research on predicted life spans. So an investment fund supporting pensioners might have to pay more to those who lived longer than average, but it would pay less to those who died sooner than expected. With individually managed plans, that longevity risk falls fully on each retiree.
Other forces are also chipping away at the financial well-being of future retirees. Changes in Social Security benefits have eroded the security provided by the world's largest government-sponsored retirement plan, as the age at which American workers qualify for full benefits has been gradually rising. Looming deficits in Social Security funding increase the odds of further benefit cuts.
Until recently, historically low interest rates have reduced the amount of income retirees can expect to generate from their nest eggs.
“There’s no silver bullet here,” said Munnell. The solution, she says, is simple but stark: “Work longer and save more.”
Are you at risk?The risk of coming up short in retirement depends a lot on how old you are, according to a study released this month by the Center for Retirement Research. Older workers are more likely to enjoy the security of a regular monthly check in retirement. About a third of “early boomers” — those born between 1946 and 1954 — face the risk of not being able to maintain their living standard after retirement, according to the center's latest research. For Generation Xers — born between 1965 and 1972 — roughly half are at risk of not being able to retire.
Financing your own retirement is daunting for even the most sophisticated savers and investors. For starters, it means trying to determine how much you’ll need to set aside. For those in their 20s or 30s, the exercise involves the nearly impossible task of predicting the inflation rate for the next three decades. A prolonged period of high inflation like the 1970s will shred even the most conservative plan.
Then there’s the question of determining how fast you can expect your nest egg to grow. While historical returns of the stock market have averaged more than 12 percent over the past seven decades, that average hides the devastating impact of a rough patch in the financial markets, like the prolonged inflation of the 1970s or the raging bear market that followed the bursting of the Internet bubble in 2000.
For example, a worker who invested $1,000 in stocks in 1964 and retired 35 years later in 1999 would have accumulated more than $60,000, adjusted for inflation, based on the return of the Standard and Poor's 500 index. But if that same worker started saving just three years later, investing $1,000 in stocks in 1967, that nest egg would be worth about half as much in 35 years — due largely to the heavy back-to-back stock market losses just before retirement. A lot of the success of your retirement plan rests on dumb luck.
For some workers, just setting aside the money to invest is an insurmountable hurdle. Dennis Mallum, a cement truck driver in central Illinois, began working when he was 13, washing dishes after school. “I’ve never made enough money to put anything away,” he said. “I’ve made enough money to pay my bills, and that’s the ways it’s always been.”
His 50-hour workweek includes stints as a volunteer firefighter and emergency medical technician. Now, at 51, Mallum said he suffers from arthritis that may eventually prevent him from working.
“I hope like hell that Social Security is going to be there when I retire,” he said. “Because that’s what I’m going to have to live on.”
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Meanings of Rich

from:http://ardictionary.com/Rich/6265

Rich 1: Having an abundance of material possessions; possessed of a large amount of property; well supplied with land, goods, or money; wealthy; opulent; affluent; opposed to poor.
Rich 2: Hence, in general, well supplied; abounding; abundant; copious; bountiful; as, a rich treasury; a rich entertainment; a rich crop.

Rich 3: Yielding large returns; productive or fertile; fruitful; as, rich soil or land; a rich mine.
Rich 4: Composed of valuable or costly materials or ingredients; procured at great outlay; highly valued; precious; sumptuous; costly; as, a rich dress; rich silk or fur; rich presents.
Rich 5: Abounding in agreeable or nutritive qualities; especially applied to articles of food or drink which are high-seasoned or abound in oleaginous ingredients, or are sweet, luscious, and high-flavored; as, a rich dish; rich cream or soup; rich pastry; rich wine or fruit.
Rich 6: Not faint or delicate; vivid; as, a rich color.
Rich 7: Full of sweet and harmonius sounds; as, a rich voice; rich music.
Rich 8: Abounding in beauty; gorgeous; as, a rich landscape; rich scenery.
Rich 9: Abounding in humor; exciting amusement; entertaining; as, the scene was a rich one; a rich incident or character.
Rich 10: To enrich.
rich 11: affording an abundant supply; "had ample food for the party"; "copious provisions"; "food is plentiful"; "a plenteous grape harvest"; "a rich supply"
rich 12: strong; intense; "deep purple"; "a rich red"
rich 13: marked by great fruitfulness; "fertile farmland"; "a fat land"; "a productive vineyard"; "rich soil"
rich 14: pleasantly full and mellow; "a rich tenor voice"
rich 15: highly seasoned or containing large amounts of choice ingredients such as butter or sugar or eggs; "kept gorging on rich foods"; "rich pastries"; "rich eggnogg"
rich 16: very productive; "rich seams of coal"
rich 17: possessing material wealth; "her father is extremely rich"; "many fond hopes are pinned on rich uncles"
rich 18: having an abundant supply of desirable qualities or substances (especially natural resources); "blessed with a land rich in minerals"; "rich in ideas"; "rich with cultural interest"
rich 19: suggestive of or characterized by great expense; "a rich display"
rich 20: high in mineral content; having a a high proportion of fuel to air; "a rich vein of copper", "a rich gas mixture"
rich 21: marked by richness and fullness of flavor; "a rich ruby port"; "full-bodied wines"; "a robust claret"; "the robust flavor of fresh-brewed coffee"
rich 22: of great worth or quality; "a rich collection of antiques"





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Retirement: An Etymological View

from:education.yahoo.com/reference/dictionary/
re�tire �� (r-tr) KEY �VERB: re�tired , re�tir�ing , re�tires
VERB: intr.

• To withdraw, as for rest or seclusion.
• To go to bed.
• To withdraw from one's occupation, business, or office; stop working.
• To fall back or retreat, as from battle.
• To move back or away; recede.

VERB: tr.

• To cause to withdraw from one's usual field of activity: retired all executives at 55.
• To lead (troops, for example) away from action; withdraw.
• To take out of circulation: retired the bonds.
• To withdraw from use or active service: retiring an old battleship.
• Baseball
  1) To put out (a batter).
  2) To cause (the opposing team) to end a turn at bat.

ETYMOLOGY: French retirer, to retreat, from Old French, to take back : re-, re- + tirer, to draw ; see tier 1

re�tired �� (r-trd) KEY �

ADJECTIVE:

• Withdrawn from one's occupation, business, or office; having finished one's active working life.
• Received by a person in retirement: retired pay.
• Withdrawn; secluded.

NOUN: (used with a pl. verb)
Retired people considered as a group. Used with the.

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The Beginning

hello guys..
let me introduce my blog
we'll discuss everything about retirement planning here, including our plans to gain that goal Read More...