Have you ever seen a product that you thought was a great idea, yet simple and wondered why I never thought about it?  I ran across an article about a couple (Todd and Rahn Basche) that created a combination lock using easy to remember words instead of numbers.  Darn, why didn’t I think of it first? Remembering a simple 4 to 5 letter word is much easier than remembering numbers.

When Todd Basche came up with the idea, he first went shopping for a word combination lock and couldn’t find one.  As a result, his company, Wordlock, Inc. was born in 2007.  Prior to founding Wordlock, Mr.Todd Basche was Vice President of Software Applications at Apple where he was responsible for iPhoto, iMovie, iDVD and iTunes.
 
The company has a patented an algorithm which creates thousands of 4 and 5 letter words which removes inappropriate words from the dials. Wordlock locks are made of hardened steel, and are used on luggage, bikes, lockers, and anywhere a standard numerical lock might appear.

Wordlock locks are sold at Target, Ace Hardware, Kmart, Sears, True Value, Walgreens and online at Amazon.com, Edwards Luggage, HSN, just to name a few.

Visit Amazon.com to buy Wordlock Locks.

If you are looking to make money on the side with the Internet, then consider Affiliate Marketing.  I kept hearing about people making a killing with Affiliate Marketing so I decided to do some research and I soon became an Affiliate Marketer.  

Affiliate Marketing is promoting products/services that you don’t own or provide for a commission.  You register with an Affiliate Company to get an account, which gives you access to hyper-links (via text or banners) to products/services.  You take the link and place it out in the Internet world (via e-mail, website / landing page, paid advertising) to send traffic to your affiliate.  When an action is taken (sale or lead generation), you get a commission.  

Some of the top affiliate companies include Commission Junction (CJ), AzoogleAds, ClickBank, PepperJam Network and Sharesale.  There are many others, but these are the ones I use the most.

There are a few Blogs run by Affiliate Marketers with articles on how they make money with Affiliate Marketing.   I registered with a few of them to get their email updates  and learned a ton.  After a while, I realized that most of the information was the same.  

At first, I tried marketing a few items but I was not successful.  I didn’t lose too much money, but  I never gave up and just kept trying to promote different items.   Then my luck turned and I promoted 2 items that generated $125,052 in commission in 10 months (last year – 2008).  I spent $52,086.15 advertising the items on Google, $15,492.96 on Yahoo and $856.74 on Microsoft AdCenter and was able to net $56,616.15 (before taxes) in profit.  See screen shots below, keeping in mind the numbers do not match exactly with the numbers I’ve stated due to a variety of reasons.

Screenshot of Affiliate Account

Screenshot of Advertising Accounts

The great thing about pay-per-click marketing is that you can try marketing a product or service fairly quickly and cheaply.   No need to build a website or spam people with e-mail marketing.  Let’s say you want to market diet pills.  You can go to Google and write an ad for diet pills.  Many Affiliate Marketers will build an advertising page (called a landing page) to pre-sell the item while others will link directly to the affiliate’s website.  Now to get people to find your ad, you bid on specific keyword phrases.  The beauty of this is only people looking for diet pills using the specific keyword phrases will find your ad.  

Someone going to Google looking for auto insurance will not be presented with your ad.   Someone going to Google looking for diet pills, or maybe a specific type of diet pill will be presented with your ad.  Now if you create appealing ads, with a good landing page to pre-sell the visitor and good keyword phrases, you will be able to send converting customers (customer who will buy or sign up) to your affiliate.  

Now the numbers have to make sense.  Lets say it costs you $100 to send 200 visitors to your affiliate who will pay you $50 per sale.  If your conversion rate is 2%, meaning 2% of the 200 visitors buy, then you’ll generate $200 in commission.  Minus the $100 you spent on advertising you’ll profit $100.  Now when you see that your promotion is working, you then want to scale the campaign by spending more on advertising and advertising on Yahoo and Microsoft AdCenter, where you now spend $1,000 per day for advertising generating you $2,000 per day in commissions with a nice $1,000 per day in profits.  

Affiliate Marketing takes some risk, hard work, money and a little luck.  It’s a trial and error system.  Try a bunch of stuff; learn from your mistakes and hopefully, eventually you will make money.  Maybe not the type of money you want, but you will make money.  I would imagine the majority of people don’t make a lot of money, but there are people doing it full time making over $1,000 per day and are labeled as “Super Affiliates”.  These people spend all day before their computers promoting products and services via mostly by pay-per-click advertising and it’s making them rich!

I’m always on the hunt for another big moneymaker, however, I do make some money with embedded affiliate links on my websites.  To find out more about affiliate marketing, I recommend using Google to find a ton websites and Blogs that will give you free information.  No need to pay for any training or buy e-books.  There are tons of people trying to sell you these items, when all the information is already free on the Internet.  It’s not rocket science.  It’s all about learning the basics, then trying it, learning from your mistakes, having discipline, hard work and never giving up.  That’s how I started!

In the late 1990s to early 2000’s when Internet stocks were blowing up, I went along for the ride and was exhilarated like most other investors.  Those were the good old days when everyone was making money.  

You didn’t have to know anything about investing in the stock market – just purchase some Internet stocks and you were almost guaranteed to make money.  Never mind if a company had no earnings, just buy it and watch your money double within days or weeks!  It was that simple.  

In the 3 years I spent investing in Internet stocks I invested about $40,000 and watched my portfolio (taxable and IRA) balloon to about $365,000 when the NASDAQ hit 5,000.   With my margin account, I had over $477,000 in stocks and felt my portfolio could hit $1 million in a matter of months.  Looking back, when the NASDAQ hit 5,000 (in March 2000) I should have sold everything because that was the beginning of the end of the ride! 

See screenshots of my stock statements before the downturn

Unfortunately, I ended up losing most of that money for 5 main reasons listed below:  

Reason one – I got greedy and started borrowing money to invest, using a margin account.  When the market started tanking, the value of my portfolio dropped faster with the margin account and I ended up having to sell fearing a margin call.  A margin call is when the value of your portfolio drops to a certain point to where the brokerage house wants their money back ASAP.  If you don’t sell your stocks to pay back the money or deposit extra funds in your account, the brokerage house will liquidate your stocks for you.

Reason two – I listened to the so-called experts and company executives in the news and on CNBC telling investors to hold on and to ride it out.   They all ended up being wrong. Looking back, many of the company executives pretty much lied so you wouldn’t sell their company stock.  They would paint a rosy picture of their company’s future, but many of them ended up bankrupt or were sold off.

Reason three – I got emotionally attached to my stocks.  There were many times I looked at my portfolio and thought about dumping all my stocks, but just couldn’t.  I liked my companies and I rationalized that it was just a market correction and soon the good old days would come back.  

Reason four – I didn’t want to send Uncle Sam a big tax check.  If I sold about $326,000 in profit, I would get killed with taxes.  I didn’t want to pay at least 40% (or $130,000) to Uncle Sam.  That would have been one hard check to write.  Looking back, I should have happily paid the money.

Reason five – Nothing goes up in a straight line forever.  A good friend of mine kept warning me that the Internet bubble would eventually burst and I should take some money out the market.   I wish I had taken his advice.

To this day, I’m still amazed that I rode the market all the way up and rode it all the way down, losing most of the money.  For a few years when I think about it, I would get this warm tingly feeling all over my body of anger at myself.  But today I’m over it. I’ve learned from my mistakes and hopefully I will not repeat them in the future.

The lessons I’ve learned about investing in the stock market are:

It’s never a profit until you sell – If you invest in the stock market, whether it’s in individual stocks or mutual funds, it’s never a profit until you sell.  Looking at your portfolio and feeling happy that it’s worth a certain amount is great, but remember until it becomes cash by you selling, the money can vaporize almost overnight.

Have an entrance and an exit strategy – It’s easy to buy a stock, but for many people it’s hard to sell.  If a stock goes up and makes you money, you may hold on hoping it goes up further.  If a stock goes down, you may not want to sell at a loss and you might want to wait for a recovery that may never come.  

Set Stop Orders – In your brokerage account it’s a good idea to set Stop Orders to automatically sell a stock if it falls below a certain point.  This will protect your money from substantial losses.

Don’t be greedy – If you purchase a stock looking for a 30% return and you get it, sell it and be happy.  Why risk losing your nice profit?

Don’t become emotional, it’s all about business – Money is very emotional.  If you lose it, you will be unhappy, if you gain it, you will be happy.  Develop an investing strategy and stick to it no matter what.  If your strategy is to sell a stock that falls 15% below the purchase price, then stick to that strategy no matter what.  If you strategy is to sell if you earn a 30% return, then stick to it no matter what.  Don’t get emotional and deviate from your strategies.

Buy the best stocks – Many amateur investors look for cheap stocks or stocks that have been beaten up (i.e., the current auto stocks).  They figure they can get a lot of shares for cheap.  This is backwards thinking.  The fact is, you should look for stocks that are going up with great financial performance and don’t worry about share price or number of shares you can purchase.  Worry about the return on your investment.  (See Related Article: Find the Best Stocks Using Investors.com Screening Tools)

Never put all your eggs in one basket – Diversify your portfolio.  Never put all your money in one thing.  I’ve heard countless stories of people putting all their 401K money in their employer stock (Lucent comes to mind) and for years enjoyed watching their portfolio balloon, and then all of a sudden it’s wiped out, leaving them penniless. (i.e., the current Bernard Madoff story also comes to mind).

It would be nice to say “No, the government should not continue to bailout AIG”; however, the US government has no choice but to bail out AIG.  This is because if AIG collapses, it will be a nightmare and would seriously damage the already fragile U.S. economy, and even the world economy. Most experts feel a collapse of General Motors would be a thunderstorm, while a collapse of AIG would be a category 5 hurricane to the U.S. economy.

AIG currently has more than 375 million policies with a face value of $19 trillion.  If the 375 million policyholders lost faith in AIG and rushed to cash in their policies at once, the entire insurance industry would tank.  Simply put, AIG is too big to fail.  There is also the fear that if AIG collapses, many people would be unable to obtain the same insurance from a competitor for the same price, which would cause many people to be shut out.

Unfortunately, no one knows when AIG will turn around and how much more money the U.S. government will have to pump into the company to keep it afloat. The government has rescued AIG four times in the last six months.

Last Monday AIG reported a $61.7 billion quarterly loss, the worst ever for a U.S. company. The US Treasury then announced the same day that it would provide A.I.G another $30 billion loan from the $700 billion financial bailout program, although the company already received more than $170 billion in taxpayer money.

Video: AIG Receives Billions More

How did AIG get into this mess?  Contributing factors were as follows: the company used its triple-A rating from the insurance part of its business to run a risky hedge fund, which wrote hundreds of billions of dollars of credit default swaps without hedging itself, or buying protection against the prospect that it would be forced to pay up.

What’s a credit default swap? Credit default swaps are insurance contracts sold by banks, hedge funds and others that promise to cover losses on various securities in the event of a default. They are usually purchased for mortgage securities (we all know what happened here), corporate debt, and municipal bonds. Buyers of credit default swap insurance policies pay premiums over a period of time in return for peace of mind, knowing that losses will be covered if a default happens. Credit default swaps work similarly to someone taking out home insurance to protect against losses from fire and theft.  

When AIG’s credit ratings were downgraded last September, the insurer’s trading partners demanded more collateral, but AIG didn’t have the cash. The US government, worried by the bankruptcy of brokerage firm Lehman Brothers a day earlier, gave $85 billion to keep AIG afloat which went to satisfy the trading partners’ demands for more cash.  

Video: Credit Default Swaps Explained

Who is AIG? American International Group, Inc., (AIG) via its subsidiaries, provides insurance and financial services in the United States and internationally and has 116,000 employees. It operates in four segments:

1. General Insurance – underwrites various business insurance products, including large commercial or industrial property insurance, excess liability, inland marine, environmental, workers compensation, specialized forms of insurance and excess and umbrella coverages.
2. Life Insurance and Retirement Services – offers individual and group life, payout annuities, endowment, and accident and health policies, as well as retirement savings products consisting of fixed and variable annuities.
3.  Financial Services – provides aircraft and equipment leasing, capital market transactions, consumer finance, and insurance premium financing.
4. Asset Management – investment-related services and investment products, including institutional and retail asset management, broker-dealer services, and spread-based investment products.

I am ecstatic that the new Obama administration is finally going to do something about the American Healthcare System, which is a complete mess.  Over a year ago when I saw the movie “Sicko“, produced by film director Michael Francis Moore, who also produced “Bowling for Columbine” and “Fahrenheit 9/11”, it made me very angry.

If you haven’t seen Sicko, I highly recommend seeing it. Sicko is a documentary that highlights the problems and catastrophes with the American Healthcare system. The film profiles several ordinary Americans whose lives have been disrupted, shattered and in some cases ended because of the healthcare catastrophe.

The film highlights that the crisis doesn’t only affect the 47 million Americans who are uninsured, but the millions of other citizens who pay their premiums only to get strangled by the bureaucratic red tape.

Sicko details how the American healthcare system came to be such a mess and highlights countries around the world where all citizens receive free healthcare, including Canada, Great Britain and France. The film also shows how 9/11 rescue volunteers who now suffer from debilitating illnesses have been denied medical attention, however, the suspected terrorist held at Guantanamo Bay, Cub prison receive free healthcare.

Michael Moore’s healthcare proposal is as follows:

1. Every American must have full, uninterrupted healthcare coverage for life.
2. Private, for-profit health insurance companies must be abolished.
3. Profits of pharmaceutical companies must be strictly regulated like a public utility.

Hopefully, Sicko has awaken the American public as to how terrible our healthcare system is and that change is needed.

Trailer for Sicko

Michael Moore is urging people to videotape and post their healthcare nightmares on YouTube to help convince Congress that radical change is needed.

Resource Links: 
California Nurses Association
http://www.calnurse.org/
The FealGood Foundation
http://www.fealgoodfoundation.com/
Guaranteed Healthcare
http://www.guaranteedhealthcare.org/
Health Care for All
http://www.healthcareforall.org/
HealthCare-NOW!
http://www.healthcare-now.org/
California State Senator Sheila Kuehl
http://www.sen.ca.gov/kuehl
National Health Care for the Homeless Council
http://www.nhchc.org
OneCareNow
http://www.onecarenow.org/
Physicians for a National Health Program
http://www.pnhp.org

A couple of years ago I was unemployed, and my wife was working for herself as a personal trainer.  We purchased our own medical insurance because it was much cheaper than paying the Cobra insurance premiums offered by the company that laid me off.

A few weeks after being laid off, my wife unexpectedly got pregnant.  We were very excited!  I then assumed I could call my insurance company and tell them to add maternity insurance to my policy for an additional few hundred dollars per month.  Boy, was I in for a rude awakening!  My insurance company, Aetna, didn’t offer maternity insurance, so I shopped around and soon learned that you have to purchase maternity insurance before getting pregnant.  Also, many insurance companies require you to pay the premiums for 1 year before becoming pregnant.  If you got pregnant before the 1 year period, the policy may only cover 50% of normal charges.

Being pregnant is considered a pre-existing condition and many insurance companies will not want to cover you.  If they do offer coverage, your premium will be extremely high, possibly over $1,000 per month.  The average delivery of a baby costs about $10,000, assuming there are no complications.  The insurance companies are in business to make money. So charging you a few hundred dollars in premiums makes no sense, when they will be hit with an $8,000 bill, assuming you pay 20% of the cost.

So the advice here is to plan ahead.   Before you become pregnant, make sure you have maternity insurance or it may cause you dearly.  Unfortunately, my wife had a miscarriage very early into that pregnancy.  By the time she got pregnant again, we had maternity insurance with my new employer.  

Related Page: Compare Medical Insurance Quotes

Have you ever loaned or given someone money who you thought really needed help only to find out that soon after they spent the money on something lavish like a big screen TV or vacation without first paying you back?  How did that make you feel?  

Well I hope you are outraged, as I am, about the news of Bank of American paying bonuses of $3.6 billion when they were given $45 billion of taxpayer TARP (Troubled Asset Relief Program) money due to bank’s potential collapse  (see Show me the  TARP Money) .  

As far as I’m concerned, the bonus money needs to return to the government.  That’s our money and the employees of Bank of America didn’t earn or deserve it.  The bank was on the verge of collapse before Merrill Lynch & Co. merged with it.  

Merrill Lynch, a New York-based securities firm, lost a whopping $15.8 billion in the fourth quarter of last year and they are paying out bonuses.  What is wrong with this picture?  Bonuses should be paid when a company meets goals, not when they are on the verge of collapse and the government has to infuse cash just to keep it a float.  Some people really need to go to jail for this.

Yesterday, Kenneth Lewis, C.E.O of Bank of America Corp., flew in on the company’s very expensive jet to testify for four hours at New York Attorney General Andrew Cuomo’s offices about the $3.6 billion in bonuses.  As a result, a subpoena has been issued to Bank of America to produce a list of the individual bonuses.  This is after Bank of America refusing not to turn over the specific information.

The government is investigating whether Merrill Lynch broke securities laws when it paid the bonuses. There is an on-going federal probe of executive pay at banks that received money from TARP. Merrill Lynch and Bank of America have received about $45 billion in TARP money.

I encourage everyone to e-mail, call or write his or her congressman of this outrageous or possible illegal act by Bank of America.  We as taxpayers should want the $3.6 billion returned!  It’s the right thing to do!