The Age Discrimination in Employment Act of 1967 (ADEA) protects individuals who are 40 years of

age or older from employment discrimination based on age. The ADEA’s protections apply to both employees and job applicants. Under the ADEA, it is unlawful to discriminate against a person because of his/her age with respect to any term, condition, or privilege of employment, including hiring, firing, promotion, layoff, compensation, benefits, job assignments, and training. The ADEA permits employers to favor older workers based on age even when doing so adversely affects a younger worker who is 40 or older.

It is also unlawful to retaliate against an individual for opposing employment practices that discriminate based on age or for filing an age discrimination charge, testifying, or participating in any way in an investigation, proceeding, or litigation under the ADEA.

The ADEA applies to employers with 20 or more employees, including state and local governments. It also applies to employment agencies and labor organizations, as well as to the federal government. ADEA protections include:

* Apprenticeship Programs

It is generally unlawful for apprenticeship programs, including joint labor-management apprenticeship programs, to discriminate on the basis of an individual’s age. Age limitations in apprenticeship programs are valid only if they fall within certain specific exceptions under the ADEA or if the EEOC grants a specific exemption.
* Job Notices and Advertisements

The ADEA generally makes it unlawful to include age preferences, limitations, or specifications in job notices or advertisements. A job notice or advertisement may specify an age limit only in the rare circumstances where age is shown to be a “bona fide occupational qualification” (BFOQ) reasonably necessary to the normal operation of the business.
* Pre-Employment Inquiries

The ADEA does not specifically prohibit an employer from asking an applicant’s age or date of birth. However, because such inquiries may deter older workers from applying for employment or may otherwise indicate possible intent to discriminate based on age, requests for age information will be closely scrutinized to make sure that the inquiry was made for a lawful purpose, rather than for a purpose prohibited by the ADEA.
* Benefits

The Older Workers Benefit Protection Act of 1990 (OWBPA) amended the ADEA to specifically prohibit employers from denying benefits to older employees. Congress recognized that the cost of providing certain benefits to older workers is greater than the cost of providing those same benefits to younger workers, and that those greater costs would create a disincentive to hire older workers. Therefore, in limited circumstances, an employer may be permitted to reduce benefits based on age, as long as the cost of providing the reduced benefits to older workers is the same as the cost of providing benefits to younger workers.

Employers are permitted to coordinate retiree health benefit plans with eligibility for Medicare or a comparable state-sponsored health benefit.
* Waivers of ADEA Rights

An employer may ask an employee to waive his/her rights or claims under the ADEA either in the settlement of an ADEA administrative or court claim or in connection with an exit incentive program or other employment termination program. However, the ADEA, as amended by OWBPA, sets out specific minimum standards that must be met in order for a waiver to be considered knowing and voluntary and, therefore, valid. Among other requirements, a valid ADEA waiver must:
o be in writing and be understandable;
o specifically refer to ADEA rights or claims;
o not waive rights or claims that may arise in the future;
o be in exchange for valuable consideration;
o advise the individual in writing to consult an attorney before signing the waiver; and
o provide the individual at least 21 days to consider the agreement and at least seven days to revoke the agreement after signing it.

If an employer requests an ADEA waiver in connection with an exit incentive program or other employment termination program, the minimum requirements for a valid waiver are more extensive.

October 17th, 2008 | Tags: Age Discrimination | Category: Age Discrimination | Leave a comment

Consumer Protection

Beware of Fraud

“You-Have-Won” Calls and Mail Lotteries
Home Improvement Scams
Business Opportunities
Contests
Sweepstakes
Recovery Companies
Chain Letters
Bank Scams
Look-a-Likes
Work-at-Home
Nigerian Schemes
Pen Pal Schemes
Credit Card Scams
Door-to-Door Sales

Consumer Rights

Three-Day Cooling-Off Law
If You Have a Complaint
Writing a Complaint Letter
Where to Send Your Complaint Letter
Filing a Consumer Complaint
Legal Action
The Attorney General’s Consumer Protection Office
Additional Consumer Information

Charitable Giving

Know Where Your Money Goes

Investments

Careful Investing
Investment Fraud

Health Care

Medicare and Medicaid
Medicare
Medicare Supplement Policies
Medicaid

Health Products
Prescription Drugs
Hearing Aids

Health Care Directives

Nursing Home Care
Nursing Home Admission Contracts
Nursing Home Rates
Patients’ Bill of Rights

Schemes and Scams
Medical Quackery
Medical Alert Systems
Alternative Medicines
Cataract Surgery

Planning Ahead

Planning for Incapacity
Formal Arrangements
Guardianship and Conservatorship

Planning for Your Estate
Wills
Living Trusts

Planning a Funeral

Human Rights

Age Discrimination

Protection Under the Law

Crime Victims Rights
Vulnerable Adults

Utilities

Assistance Available
Cold Weather Rule
Disconnection of Utility Services
Energy Assistance Program
Telephone Assistance Plan (TAP)
Link-Up America
Telephone Services to the Deaf

Telephones
Leasing Telephone Equipment
Inside Wire Insurance
Blocking 900 Numbers
Caller ID
Call Blocking
Slamming
Cramming

October 17th, 2008 | Tags: Consumer Protection | Category: Consumer Protection | Leave a comment

AARP announces 37 millionth member

WASHINGTON, Oct. 26 /U.S. Newswire/ — AARP welcomes Patricia Hernandez as its official 37 millionth member. As a baby boomer, Ms. Hernandez is part of a demographic shift in AARP’s membership. The wave of aging baby boomers who are joining AARP have made AARP one of the largest baby boomer organization’s in the world with nearly 12 million baby boomer members who are now in their 50s and 60s. AARP is honoring the 37 millionth member during the association’s annual member event which will convene more than 20,000 AARP members in Anaheim, Calif. from Oct. 26 to 28.

“More people are choosing AARP than ever before. It is a combination of factors–from new volunteer opportunities to a desire to support AARP’s initiatives; from the great market changing products and services AARP makes available to its members through third party providers to the chance to “give back” by supporting AARP’s social programs,” observed Shereen Remez, AARP’s group executive officer for member value.

Patricia Hernandez, the official 37 millionth AARP member said, “I like knowing that I am a part of an organization that is looking out for the best interests of those in my age group. I am also looking forward to meeting other AARP members who share similar interests.”

With the country’s aging population realizing the benefits of AARP membership the organization is positioned to become more prominent and will be able to leverage its influence to make even more of a difference in the lives of people age 50+ than ever before. The numbers are already undeniable. Enrollment is only expected to increase as more people experience the benefits of joining AARP.

The sheer numbers of baby boomers is alone cause for consideration. There are 78 million baby boomers and organizations are racing to replicate AARP’s strong connection to this demographic. By the year 2050, there will be 2 billion in the world who are 50 or older, as compared to 600 million today. For the first time in world history, by 2050, 50+ people will outnumber children. The 50+ population will more than double over the next 35 years. This is changing the fundamental age distribution in our population and puts AARP in a position to further enhance the lives of people 50+.

AARP has recently leveraged its influence to make a substantial difference in the lives of the 50+. AARP’s recent contributions for its membership include:

– AARP’s Social Security Campaign — AARP successfully lead efforts to preserve social security for generations to come.

– Medicare Part D Education — AARP launched a campaign that educates members and others about the new Medicare Part D benefit ensuring that millions benefit.

– AARP Watchdog Reports — AARP’s Watchdog reports and forums were instrumental in keeping the spotlight on rising drug prices and AARP lobbied for state and federal laws to allow safe and legal prescription drugs to be imported from Canada.

– AARP Foundation — Through the AARP Foundation, we led a large-scale funding effort to provide disaster relief to older victims of the 2005 Gulf Coast hurricanes. In total more than 41 grants totaling almost $1.6 million were issued to local organizations in the affected areas, which provide food, shelter, health services, housing and legal assistance.

– AARP Services — Through AARP endorsed providers, members have access to a growing array of services ranging from hospital and medical coverage to dental plans, credit cards and travel discounts. AARP members rave about the member benefits. Recent additions include the launch of AARP Financial, which is dedicated to helping people achieve financial security through education and guidance and by offering products and services designed to meet their retirement needs. AARP Financial makes available through third party providers a carefully chosen array of investment products, including mutual funds, auto and home insurance from The Hartford; credit cards from Chase; life insurance from New York Life; and mobile home and motorcycle insurance from Foremost.

About AARP
AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP produce AARP The Magazine, published bimonthly; AARP Bulletin, AARP monthly newspaper; AARP Segunda Juventud, AARP bimonthly magazine in Spanish and English; NRTA Live & Learn, AARP quarterly newsletter for 50+ educators; and AARP website, AARP.org. AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. AARP has staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

October 17th, 2008 | Tags: AARP | Category: AARP | Leave a comment

Coaching can help older adults speak up at medical visits

Coaching sessions can help seniors become more assertive during medical visits, suggests a new review of studies on methods to increase older patients’ involvement in their own health care.

“Elderly patients should … have more of a say in not only treatment decisions but they should be supported during the whole consultation to make clear their needs and expectations about their health care,” said lead author Raymond Wetzels, a general practitioner at the Radboud University Nijmegen Medical Center in the Netherlands.

Even when coaching and handouts are provided to encourage elderly patients to play a more active role in their care, a majority may remain uninvolved in their doctor visits, one of the reviewed studies found.

In this study, more than half of the patients, 54 percent, had not identified specific issues to discuss before their visit to the doctor. Further, 80 percent did not bring a list of questions, problems or medications to the visit and asked no questions about their illness or tests or procedures. And 77 percent did nothing whatsoever to prepare for their visits.

The review appears in the latest issue of The Cochrane Library, a publication of The Cochrane Collaboration, an international organization that evaluates medical research. Systematic reviews draw evidence-based conclusions about medical practice after considering both the content and quality of existing medical trials on a topic.

The review, of three studies encompassing 433 patients, focused on two basic types of interventions: face-to-face coaching sessions, either individually or in a group, and written material such as booklets or a checklist to prioritize reasons for the visit. Two of the studies combined these types of interventions, while a third study used only coaching sessions.

More-involved patients tend to adhere to advice better, Wetzels said. This involvement is particularly important for elderly patients because they tend to have more contact with doctors. While figures vary, an estimated 80 percent of people over age 65 have at least one chronic condition, and 65 percent have multiple conditions.

For a variety of reasons, some elderly patients are reticent when dealing with doctors. In some cases, the problem is simply impaired hearing or vision. Seniors dealing with dramatic environmental changes such as the loss of a spouse or moving to new living arrangements may also have difficulty communicating with doctors.

But there are other explanations, said Ming Tai-Seale, an associate professor at Texas A&M Health Science Center. Tai-Seale, who recently wrote a separate review focusing on elderly patients and office visit time, said older patients “may be of the generation where they still see doctors as superior beings. They wouldn’t challenge their opinion. They may feel they are taking too much of the physician’s time.” Older patients “may not be as information savvy as some in the younger generation.”

But one patient left an impression on Tai-Seale: “She was a former city councilwoman. She held the floor throughout the visit. She would make sure that the physician addressed her concerns,” Tai-Seale said. “The conversation was among two equals.”

For patients unable to be assertive, face-to-face coaching sessions may help, according to one of the studies in the Cochrane review.

The 45 study patients were divided into an intervention group and a control group. Before patients in the intervention group visited the doctor, a medical student interviewed them and helped identify questions about their treatment. Of that group, 14 of 22 patients asked at least one question during their visit with the physician. In the control group, eight of 23 patients asked at least one question.

But to some degree, the intervention may have influenced study results in that “patients entering the doctor’s office with a booklet, cue card or question list may have been identified by the doctor as belonging to the intervention group, which may have influenced the doctor’s attitude,” Wetzels said.

While all participants in these studies were 65 or older, the average age was 72 in one study and 77 in another. Two studies had low patient numbers, the reviewers said, and because evidence was limited, they couldn’t recommend specific interventions in daily practice.

Asked if there is an argument for more education aimed at doctors, Wetzels said that doctors already get that training. The trend is toward patient-centered care where both “patients and doctors are responsible for patients’ health care.”

Future studies should focus on follow-up after seniors are coached. “The follow-up should be at least a year after an intervention, but ideally even longer,” according to Wetzels.

“But perhaps more important is to measure objective health outcomes,” he added. For example, an objective measure could be the walking distance of an osteoarthritis patient six months to one year after the intervention.

There should be a balance, the reviewers concluded, between respecting a patient’s autonomy and stimulating active participation in health care.

October 17th, 2008 | Tags: medical visits | Category: medical visits | Leave a comment

401k Retirement Plan

Begin Providing for Your Future

Anyone familiar with the time value of money knows that even small amounts, when compounded over long periods, can result in thousands, or even millions, of dollars in additional wealth. This simple truth is one of the reasons many financial planners recommend tax-advantaged accounts and investments such as traditional / Roth IRA’s and municipal bonds. In the past, these decisions were not as crucial because of the prevalence of defined-benefit pension plans. Today, those old-world pensions are going by the wayside at many U.S. firms; instead, most of today’s workforce is likely to find their retirement years funded by the proceeds of their 401k retirement plan.

What is a 401k retirement plan?

A 401k retirement plan is a special type of account funded through pre-tax payroll deductions. The funds in the account can be invested in a number of different stocks, bonds, mutual funds or other assets, and are not taxed on any capital gains, dividends, or interest until they are withdrawn. The retirement savings vehicle was created by Congress in 1981 and gets its name from the section of the Internal Revenue Code that describes it; you guess it - section 401k.

What are the benefits of a 401k retirement plan?

There are five key benefits that make investing through a 401k retirement plan particularly attractive. They are:

• Tax advantage
• Employer match programs
• Investment customization and flexibility
• Portability
• Loan and hardship withdrawals

Tax advantage of 401k retirement plans

As touched on in the introduction, the primary benefit of a 401k retirement plan is the favorable tax treatment it receives from Uncle Sam. Dividend, interest, and capital gains are not taxed until they are disbursed; in the mean time, they can compound tax-deferred inside the account. In the case of a young worker with three or four decades ahead of them, this can mean can mean the difference between living at the Plaza Hotel or the Budget 8.

Employer match for 401k retirement plans

Many employers, in an effort to attract and retain talent, offer to match a certain percentage of the employee’s contribution. According to Starbucks’ “Total Pay Package” brochure, for example, the company will match a percentage of the first 4% of pay the employee contributes to their 401(k) retirement plan. Employees at the company for less than 36 months receive a 25% match; 36 to 60 months receive a 50% match; 60 to 120 months receive a 75% match; 120 or more months receive a 150% match.

In other words, an employee working at the coffee giant for over ten years earning $100,000 that contributed $4,000 to their 401(k) would receive a $6,000 deposit in the account directly from the company (150% match on $4,000 contribution.) Anything the employee deposited above the 4% threshold would not receive a match.

Even if you have high-interest credit card debt, it is preferable, in almost all cases, to contribute the maximum amount your company will match! The reason is simple math: If you are paying 20% on a credit card and your company is matching you dollar-for-dollar (a 100% return), you are going to end up poorer by paying off the debt. Factor in the tax-deferred gains generated by the 401(k) plan, and the disparity becomes even larger. For more information on this topic, I suggest you read the work of Suze Orman.

Although the topic will be discussed in further detail later in this article, be aware that employer matching contributions up to six-percent of an employee’s pre-tax salary are not included in the annual limit. For example, if you qualified, you could make a 401k contribution of $13,000 in 2004 and have your employer still match the first six-percent of your salary; that match would be deposited above and beyond the $13,000 you contributed directly.

Investment customization and flexibility

401k retirement plans give employees a range of choices as to how their assets are invested. An individual that knows he or she does not have a high tolerance for risk could opt for a higher asset allocation in low-risk investments such as short-term bonds; likewise, a young professional interested in building long-term wealth could place a heavier emphasis on equities. Many businesses allow employees to acquire company stock for their 401k retirement plan at a discount although many financial advisors recommend against holding a substantial portion of your 401k in the shares of your employer in light of the Enron and Worldcom scandals.

One of the benefits of a 401k retirement plan is that it can follow an employee throughout his or her career. When changing employers, the investor has four options:

1.) Leave his/her assets in the old employer’s 401k retirement plan
Many 401k plan administrators charge record keeping and other fees to manage your account, regardless of whether you are still with the company. These fees can take a significant bite out of your future net worth, especially if you have accounts maintained at several different employers.

2.) Complete a 401k rollover to the new employer’s 401k plan
Practically speaking, this option is only available if the employee has another job offer before leaving their current employer. In some cases, it may be the best option as it is simple. How do you know if it is the right choice? The decision should largely be made based on the investment options of the new 401k plan. If you are unsatisfied with the choices available to you, completing a 401k rollover to an IRA may be a better option.

3.) Complete a 401k rollover and move the assets to an Individual Retirement Account (IRA)
Completing a 401k rollover is almost always the best choice for those interested in providing for a comfortable retirement because it allows the investor’s capital to continue compounding tax-deferred while providing maximum control over asset allocation (i.e., you aren’t limited to the investments offered by the 401k plan provider.) Here’s how it works: A distribution of the current 401k plan assets is ordered (this is reported on the IRS Form 1099-R.) Once the assets are received by the employee, they must be contributed into the new retirement plan within sixty days; this deposit is reported on IRS Form 5498. The government limits 401k rollovers to once every twelve months.

4.) Cash out the proceeds, paying taxes and the 10% penalty fee
With the exception of failing to take advantage of an employer’s contribution match program, cashing out a 401k when leaving jobs is the single most stupid decision a working individual can make. According to a press release by the 401K Help Center, research indicates “as many as 66 percent of Generation X job changers take cash when leaving their jobs, and 78 percent of workers aged 20-29 take cash.” The tragedy is far greater than the taxes and penalty fee alone; indeed, the greater financial loss comes from the decades of tax-deferred compounding that capital could have earned had the account owner chosen to initiate a 401k rollover.

The purpose of your 401k retirement plan is to provide for your golden years. There are times, however, when you need cash and there are no viable options other than to tap your nest egg. For this reason, the government allows plan administrators to offer 401k loans to participants (be aware that the government doesn’t require this and therefore it is not always available.)

The primary benefit of 401k loans is that the proceeds are not subject to taxes or the ten-percent penalty fee except in the event of default. The government does not set guidelines or restrictions on the uses for 401k loans. Many employers, however, do; these can include minimum loan balances (usually $1,000) and the number of loans outstanding at any time in order to reduce administrative costs. Additionally, some employers require that married employees get the consent of their spouse before taking out a loan, the theory being that both are affected by the decision.

401k Loan Limits

In most cases, an employee can borrow up to fifty-percent of their vested account balance up to a maximum of $50,000. If the employee has taken out a 401k loan in the previous twelve months, they will only be able to borrow fifty-percent of their vested account balance up to $50,000, less the outstanding balance on the previous loan. The 401k loan must be paid back over the subsequent five years with the exception of home purchases, which are eligible for a longer time horizon.

401k Loan Interest Expense

Even though you’re borrowing from yourself, you still have to pay interest! Most plans set the standard interest rate at prime plus an additional one or two percent. The benefit is two-fold: 1.) unlike interest paid to a bank, you will eventually get this money back in the form of qualified disbursements at or near retirement, and 2.) the interest you pay back into your 401k plan is tax-sheltered.

The Drawbacks of 401k Loans

The biggest danger of taking out a 401k loan is that it will disrupt the dollar cost averaging process. This has the potential to significantly lower long-term results. Another consideration is employment stability; if an employee quits or is terminated, the 401k loan must be repaid in full, normally within sixty days. Should the plan participant fail to meet the deadline, a default would be declared and penalty-fees and taxes assessed.

401k Hardship Withdrawal

What if your employer doesn’t offer 401k loans or you are not eligible? It may still be possible for you to access cash if the following four conditions are met (note that the government does not require employers to provide 401k hardship withdrawals, so you must check with your plan administrator):

1. The withdrawal is necessary due to an immediate and severe financial need
2. The withdrawal is necessary to satisfy that need (i.e., you can’t get the money elsewhere)
3. The amount of the loan does not exceed the amount of the need
4. You have already obtained all distributable or non-taxable loans available under your 401k plan

If these conditions are met, the funds can be withdrawn and used for one of the following five purposes:

1. A primary home purchase
2. Higher education tuition, room and board and fees for the next twelve months for you, your spouse, your dependents or children (even if they are no longer dependent upon you)
3. To prevent eviction from your home or foreclosure on your primary residence
4. Severe financial hardship
5. Tax-deductible medical expenses that are not reimbursed for you, your spouse or your dependents

All 401k hardship withdrawals are subject to taxes and the ten-percent penalty. This means that a $10,000 withdrawal can result in not only significantly less cash in your pocket (possibly as little as $6,500 or $7,500), but causes you to forgo forever the tax-deferred growth that could have been generated by those assets. 401k hardship withdrawal proceeds cannot be returned to the account once the disbursement has been made.

Non-Financial Hardship 401k Withdrawal

Although the investor must still pay taxes on non-financial hardship withdrawals, the ten-percent penalty fee is waived. There are five ways to qualify:

1. You become totally and permanently disabled
2. Your medical debts exceed 7.5 percent of your adjusted gross income
3. A court of law has ordered you to give the funds to your divorced spouse, a child, or a dependent
4. You are permanently laid off, terminated, quit, or retire early in the same year you turn 55 or later
5. You are permanently laid off, terminated, quit, or retired and have established a payment schedule of regular withdrawals in equal amounts of the rest of your expected natural life. Once the first withdrawal has been made, the investor is required to continue taking them for five years or until he/she reaches the age of 59 1/2, whichever is longer.

A 401k hardship withdrawal should be a last resort. An IRA, for example, has a lifetime withdrawal exemption of $10,000 for a house with no strings attached.

What is the maximum contribution limit on your 401k account? The answer depends on your plan, your salary, and government guidelines. In short, your contribution limit is the lower of the maximum amount your employer permits as a percentage of salary (e.g., if your employer lets you contribute 4% of your salary and you earn pre-tax $20,000, your maximum contribution limit is $800), or the government guidelines as follows:

401k Maximum Contribution Limits
2004: $13,000
2005: $14,000
2006: $15,000

Once the year 2006 has been reached, the total maximum contribution limit will be increased based on changes in the cost of living.

Catch Up Contributions

If you are fifty years or older and your employer offers “catch-up” contribution for your 401k, you are eligible to contribute additional amounts up to the maximum contribution limits as follow:

401k Maximum Catch-Up Contribution Limits
2004: $3,000
2005: $4,000
2006: $5,000

Once the year 2006 has been reached, the total maximum contribution limit will be increased based on changes in the cost of living.

A Reminder on Employer Matching Contributions and 401k Contribution Limits

Once again, employer matching contributions up to six-percent of an employee’s pre-tax salary are not included in the contribution. For example, if you qualified, you could make a 401k contribution of $13,000 in 2004 and have your employer still match the first six-percent of your salary; that match would be deposited above and beyond the $13,000 you contributed directly.

September 15th, 2008 | Tags: 401k Retirement Plan | Category: 401k Retirement Plan | Leave a comment

The Secret To Making Money Online

June 22nd, 2008 | Tags: Making Money Online | Category: Making Money Online | Leave a comment

What Is The Stock Market

What is the stock market? This is a great question. Being a budding stock investor myself I went on a search for an answer to the question “What is the stock market”. I believe that what I have found will help any beginner in understanding what the stock market it and how it works.

WHAT IS THE STOCK MARKET?

The word stock simply refers to a supple. You can have a stock of anything you want (from pencils in your pencil case, to clothes on your wardrobe). In the financial market stock refers to a supply of money that a company has raised. This supply comes from people who have given the company money in the hope that the company will make their money grow.

A market is a public place where things are bought and sold. The term “stock market” refers to the business of buying and selling stock. The stock market is not a specific place, though some people use the term “Wall Street”—the main street in New York City’s financial district—to refer to the U.S. stock market in general.

WHY DO COMPANIES SELL STOCK?

If a company wants to grow and expand then they need money to do that. They might need money to build factories, or shops or to hire more workers. In order to do that they need money, they could go to the bank and get a loan but then they would be in large amounts of debt. Instead, they can sell the business to get more money, but continue to control the business. How? They sell it to hundreds and even thousands of people in what is known as shares.

If you have a pie and you cut it into 100 pieces (it must be a pretty big pie), then each person would have a ”share” of the pie. It is the same with companies. Companies sell shares to people. Say a company sells 100 shares and you own 1 share then you would own 1% of the business. People who buy the stock (or the shares) are giving the company the money it needs to grow and expand.

WHY DO PEOPLE BUY SHARES?

The people who own the shares own a part of the company they have shares in. Therefore whenever the company makes money the shareholders (the people who own the stock/shares) get part of the profits that the company made. If the company makes money then the stockholders share in the profits and over time owning stock will earn people more money than leaving their money in the bank or making other

Stockholders in a company also usually have voting rights. They vote on such issues as who will be elected to the board of directors—the group of people who oversee company decisions—and whether to buy other companies. Stockholders typically have one vote for each share they own. Every vote counts, but a stockholder with 5,000 shares will have more influence on the company than someone with only one share.

WHAT ARE CAPITAL GAINS ON SHARES?

As a company makes money, the value of its stock goes up. It is similar to if you owned a restaurant. If your restaurant started off making $50,000/year then you might be able to sell it for $500,000. But say later on your restaurant was earning $100,000/year, then the resaurant might well be worth $1,000,000. It is the same with stocks, you own a percentage of that restaurant so as their profits increase your ’stock’ becomes more valuable as it is part of the business. This increase is value is called ‘capital gains’

Well I hope that helped explain some things about the stock market and I hope you now understand what the stock market is and how it works on the most basic level. Please leave any comments and questions below.

June 22nd, 2008 | Tags: What Is The Stock Market | Category: What Is The Stock Market | Leave a comment

Investing In The Stock Market For The Long Run

June 22nd, 2008 | Tags: The Stock Market | Category: The Stock Market | Leave a comment

June 19th, 2008 | Tags: SEO ELITE IS A SCAM | Category: SEO ELITE IS A SCAM | Leave a comment