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The Power of Investing in Top Dividend Having to pay Stocks

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Whenever I talk to somebody about the virtues of investing in dividend having to pay stocks for the long haul, I always have to give a concrete instance of how the energy of compounded dividends (no make a difference how little) will include up to solid prosperity more than time. Phillip Morris and Pepsi are two traditional examples of how top dividend having to pay shares can construct a solid cash flow more than time. Right here are some other people just to prove this stage:

Johnson & Johnson (JNJ) – one of my preferred dividend payers and a excellent one to buy correct now. one hundred shares of JNJ twenty years ago would’ve cost about $6,750. By reinvesting these dividends back again into the stock, you’d have over 1200 shares today really worth more than $68,000 (10x your authentic investment) and paying more than $2,500 in dividends a year – nearly 40% yield on your original investment.

Think about the subsequent instance. Pepsi stock currently trades for about $70 and pays a dividend of $2.06 for a yield of 2.9% Now, that may not appear like much now…but let’s consider a look at Pepsi’s stock back again in 1980. Back in March of 1980, Pepsi traded for about $24 but that doesn’t imply that it took 30 many years for Pepsi’s stock cost to ambigu…it grew at a a lot greater price than that – if we look at the March 1980 share price adjusted for dividends and stock splits, then Pepsi’s stock traded at $.59 and compensated a dividend of $.01583 for a yield of about 2.7% (not a lot different from today). But look at what happened over the final 3 a long time: Pepsi’s stock went from $.59 to $70! And the dividend grew from one and a half pennies each yr to over $2 today!

With Phillip Morris, your $2,000 back again in 1980 would’ve grown to over $670,000 these days and would be paying over $9,600 a year in dividends. That is the energy of investing in more than time.

There are hundreds of examples like this and most of them are nicely known businesses that were well known back in 1980…that would’ve been most likely candidates for dividend raises more than time back then. The key to this magnificent accumulation of prosperity is the energy of compounding dividends. In both of these examples, the reinvested dividends account for nicely over fifty percent of the prosperity created and many thanks to the power of compounding, a portfolio of top dividend paying shares (even with just a 3% yield) will really pay considerably more on an annualized foundation time even if stock prices remain completely flat.

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Investing in Restaurants – Pros and Cons of Franchise Investments

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When it comes to investing in dining establishments, there are numerous different methods that you can get involved. Investing in a smaller sized, family-owned restaurant might prove to have a bigger payoff in the end if you are prepared to take the danger. Nevertheless, investing in a franchise is frequently considered by people because it is a much safer investment in terms of dining establishments. Franchises provide more safety because there is a smaller money capital required for startup, training is provided to proprietors and employees by the franchising business, and franchises have a reputation that already exists, instead of getting to build one like local dining establishments do.

The Professionals

Franchises are an simple model simply because there already IS a design in location. Whether or not you purchase into a franchise straight or invest in one that someone else is trying to open, you can assure a much better chance at good results.

Franchises help prepare people and permit owners to do things without any guessing, questions, or confusion. This makes a company at minimum 50-60% more likely to be effective than a company with out this support.

Investing in restaurants is generally a risky venture, but franchises provide much less danger and better rewards generally talking. No two investments are the same, but the probabilities of dropping it all are a lot decrease with a franchise investment than a regionally-owned investment.

The Disadvantages

Franchises are restricted. They have guidelines, laws, and ways that issues need to be carried out. Whether or not you are going to be the owner or just an investor, it can become bothersome to have to run things the way that someone else sees match.

When you commit in a franchise, you will likely not have as a lot involvement unless of course you commit as the owner. Even then, you will have less say in issues that happen and how things run. If you are prepared to sacrifice your viewpoint and creative freedom for a much better investment, this isn’t an problem.

Restaurant franchises are different from 1 owner to the subsequent. Although there is a better opportunity of long-phrase good results, you cannot rely on each simple franchise to stick.

Now that you comprehend a little much more about investing in restaurants, you can weigh the options and see what is right for you. Some individuals sort out this info and can easily make a decision about investing in dining establishments for themselves. Other individuals may require much more time, and might even decide that restaurant shares are the better choice for their investment. For much more info on investing in investment possibilities generally or normally not found in the marketplace,

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Your Questions About Investing In Stocks

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Ken asks…

In finance class we are investing in stocks. What are some of the most promising stocks for the next 16 weeks?

This is by no means a real investment, but it is a competition however, and our teacher said we could use our resources to research stocks. So I figured I would try and get the opinions of some possible professionals… Thank you for your suggestions!

Justin answers:

Id go with AT&T personally, its priced relatively low for the yr, the moving averages indicate it should go up at least temporarily, and because they just gave out the dividend its down even more to make up for that, plus it should have another dividend payment in that 16 wk period, and thats a guaranteed 1.5% increase if your teacher is counting dividends, id say it’d be up 2%-8% actual price depending on a few factors and if your teacher counts dividends after the 16 wks

James asks…

What are some statistics to look for when investing in stocks?

I’m looking for some stocks that I can invest in long term. What are some key stats to look for? Such as EPS, P/E ratio, beta, etc. What are the most valuable factors and good numbers to look for?

Justin answers:

The main thing is that you want to look at where a stock is going in the future, not so much what it’s done in the past. What does the future hold for the company going forward is one of the most important stats.

EPS (earnings per share) is a huge factor but it also must be compared with how much debt the company has on its balance sheets.

Watch insider buying as well, if a CEO for example is buying shares of the company for his own personal account, that could be a good signal.

PEG is also important this is the price to earnings growth and is determined by multiplying the analysts estimates for next year by the projected five year growth rate.

In Yahoo! Finance, the stock quotes have a link of the left hand side to “key statistics” and they include some of the important statistics when examining a stock. For example, the link below shows some of the key stats for Chesapeake Energy Corporation (CHK)

Robert asks…

How or where do I go to start investing in stocks?

I want to start investing, even if wont get me big buck at least a couple hundred.

Justin answers:

An introductory book like _Stock Markets for Dummies_ is a good place to start. This will give you a basic explanation of most things there are to know about the mechanics of stock investing including useful websites to surf.

Investors Business Daily (IBD) is a solid daily resource (and its complement, ). It’s a better newspaper than the Wall Street Journal and it is built around a particular approach to trading. You could read _How to Make Money in Stocks_ by William O’Neil too–he’s the founder of IBD.

Search your local library for other books on stock investing. Try to absorb as much knowledge and understanding as you can.

After you have extensively researched and gained a solid foundation/education then look to open a brokerage account and paper trade–this is trading with play money before you put real capital at risk. You should do extensively before you eventually place your first trade live. Your early live trades should be with a very small position size. Only increase position size when you have done well to limit losses when the market has turned against you.

Joseph asks…

How much should you start out with for investing in stocks?

I want to start an Ameritrade account or one of the other brands of online investing. What’s a good amount to get started?

Justin answers:

You really don’t need that much money. $500 is plenty to get involved. But you have to be wary of the fees of buying and selling the stocks. No Load (no fees) mutual funds are still good despite the problems with them. But you have to do a lot of research watch a lot of business progams before investing in anything to see what the “experts” think. CNBC, Bloomberg and Fox business block saturdays are excellent for picking information. One place I recommend for starters is no risk all play money but the stocks are real. And its free to enter.

As far as this goes its more of a question an answer for basic use. The poster needs to start reading these questions before babbling about this site. The question here has NO USE for the site you recommend.

Johnny it may be $4 to buy but nearly $15 to sell. Better options than that out there.

Richard asks…

What’s the best way to start investing in stocks without much money?

Are penny stocks any good to get into? Do I need a broker?

Justin answers:

For a person without a LOT of experience/knowledge in/of the stock market, penny stock are the WORST way. The best way is a well diversified index mutual fund, Schwab has a $100 minimum on theirs.

Michael asks…

How does one go about investing in stocks?

Is it a smart thing to do?
Do you profit from investing?
This question may be silly to some, but Im only 22 and Im curious to know about investing.

Justin answers:

You need to open a share dealing account with your bank but I would reccomend that you wait for the market to sort itself out. Wait for a couple of months and then invest because at the moment every day companies all over the world are going bust.

George asks…

Should I start investing in stocks now or later?

Due to troubles with markets everywhere, I am faced pondering about the question “Should I start investing now or later?” I am fairly young, meaning I have a lot of time and can handle high risk, and understand the historic growth rate of the economy, but was wondering if I should wait until the problem in Europe is resolved, or start investing now? Or are there other problems in the world that I should wait for to be resolved?

Justin answers:

The fear is factored into the price of stocks. If you wait until everything is just fine and dandy, then stocks will be overpriced. If you get in while everyone is afraid to buy, you can get some bargains. You get paid for risk, but you can lose everything. Thats why you’ve got to find solid companies that can whether storms. If you’re looking at Europe, look at Unilever (UL) although its price is not so cheap right now. TEsco (TSCDY) in the UK is pretty damn beaten up and Warren Buffet’s got a whole hell of a lot of it.

Donald asks…

how to start investing in stocks?

i want to start investing in stocks. i don’t know how to do it. should i first get a demat account? what to do after getting that account? i have a pan card.

Justin answers:

This is probably one of the most common questions I hear every day. People always ask me 1 of 2 things. How do I get started in investing? Or, how much should I start with?

To get started in investing, the best advice I can give you is EDUCATE YOURSELF before you do anything. I’m not saying you have to be a wiz to start, but don’t just jump in blind. That’s the express way to the poor house. So I suggest you learn the basics and don’t get ahead of yourself by letting greed go to your head.
There are various ways to educate yourself as well. Read books, attend seminars, pay for classes, and get a mentor! Just do whatever you need to do to learn more. Even though I’ve been doing this for more than 5 years, I still read every day and study new strategies, chart patterns and so on.

Second, don’t get discouraged when you first start investing. I say this because you will make mistakes. Sometimes costly ones to. I made mine. You will make yours. It’s like driving a standard car for the first time. Everyone stalls out. Even if your confident and know what you’re doing by the book, you don’t have the “feel” for it yet and so you will stall. No and’s, if’s, or buts’ about it.
Again, several ways to get around it, but it’s not going to be free. You have basically 2 choices, and I tell this to all the people whom I manage accounts for: you can either face it head on or take the knocks that are coming to you, or, you can pay someone like me to help guide you through the learning curve so the knocks won’t be so hard. Either way you look at it, you’re going to pay a price. In investing, there are 2 terms that investors use: “the dumb money” and “the smart money”. Dumb money is the crowd of investors who are new or don’t know what they are doing yet. The smart money is the investors that take the money away from the dumb money. Which one are you? Or where do you want your money to be?

For the second question, how much you should start with. Well that depends heavily on your financial situation. Although the more the better. For anything less than a $3000 start up, I suggest IRA’s, CD’s, BONDS, or SAVING CASH. Why at least $3000 well its simple, without at least that much in your account, it will be difficult to make money in a down market. Yes, there are ways to make tons of cash when the market is crashing. In fact, it can easier and faster to do than making money in an up market. But I won’t get into that here.

Anyway, if you don’t have money and still would like to try, then I highly recommend paper trading. Why? Well its good practice for when you do get money. I used to paper trade just for the practice. See how good my decision making skills are. Which brings us back to question one, and what you are doing right now, LEARNING! But remember, it’s not going to be free and it will cost you whether you pay for the education or you learn the hard way. Either way, just like Nike says, “Just do it”

Much Aloha,
Christian Nago – CEO & Chief Investment Officer

William asks…

I want to start investing in stocks please help?

I’m 16 and when I get a couple thousand dollars I want to invest in stocks. I have little to no idea what to do with stocks so can someone explain the basics or recommend books about it would be really appreciated. Thanks in advance

Justin answers:

In North America you must be 18 years of age to open a brokerage account. You can have a parent open a custodian account for you using your social security number and when you turn 18 the assets in the account can be moved to an account in your name

Before you spend $0.01 on any investment, you must know what you’re doing, why you’re doing it and how to do it. Before you invest in any security, the first investment you should make is in yourself, and the best investment you can make is by educating yourself.

Start your education by learning why you should invest and the importance of being able to make your own decisions or how the pro’s make theirs.
Here is some reading material that can get you started in the right direction,
Beating the Street by Peter Lynch
Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea
From Riches to Rags, by I.C. Freeley
Millionaire Traders, Lein & Schlosberg
How to Make Money in Stocks” by William O’Neil
24 Essential Lessons for Investment Success by William O’Neil
The Intelligent Investor, by Benjamin Graham
Common Stocks, Uncommon Profits, by Philip A. Fisher
One Up on Wall Street by Peter Lynch
Stocks for the Long Run, by Jeremy Siegel
The Interpretation of Financial Statements by Benjamin Graham
The Lazy Person’s Guide to Investing by Paul B. Farrell
The Warren Buffett Way by Robert Hagstrom
Trading for a Living, by Alexander Elder
Uncover the Secret Hiding Places of Stock Market Profits by Joel Greenblatt.
What Works on Wall Street by James O’Shaunessey
You Can Be a Stock Market Genius by Joel Greenblatt
Your Money and Your Brain by Jason Zweig

Get into the habit of making daily visits to some websites like MSN Money and Yahoo Finance. ( ,

Other website that can provide instructions and help with procedures and terminology are Investopedia –
Visit some of the more professional websites like Zacks Research – Smart Money – Schaeffer’s Some of these web sites will have advertisers who are worth looking into also. And remember, if they offer free information, get it. Or you can meet others who are trading at

Attend all the free seminars you can, just be careful and don’t get pressured into anything you really don’t want or need. Most schools offer courses in finance and economics, but very few will have courses on the mechanics of the investment markets, if they do try taking the course. You may want to consider on-line courses, the New York Institute of Finance use to have such courses. Try to get some fee information from the stocks exchanges they all have (had) free booklets, SIAC and some of the regulators (FINRA SEC MSRB CBOE) may provide some free literature.

And when you think you want to invest/trade, try some paper trading to test your skills without spending you money and/or

You at least have made the right decision to start investing, this is the first big step and it won’t be your last. Keep taking those steps forward and along the way never take the advice from people that are not in the market or try to tell you not to invest.

Good luck on your journey, study hard and you’ll invest well

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Your Questions About What Is Wrong With Japan Stock Market

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Mark asks…

How can anyone look at the tax code and say that government is qualified to manage health care, or anything?

Read the instructions for Schedule D (Capital Gains and Losses) and tell me you want these people making your health care decisions.

I made a piddly $35 in the stock market last year but it took me two hours to document this point to their satisfaction. This is an effective use of my time and tax dollars? When they’re going to blow $2.5 million tax dollars on a stupid Superbowl ad with Ed Begley Jr?

Justin answers:

Government Solutions Lack Understanding

Things seem to be unraveling quickly for the new administration. The latest unemployment numbers are worse than the last reports. For all the billions of dollars spent and committed to fixing our economic problems, the situation is only getting worse. This was to be expected by those who understand the root causes of the problems. Throwing money around and creating more government programs is both simplistic and damaging to the economy. Of course, the administration claims that we would have been much worse off without these efforts. You can’t improve this situation by adding to our mountain of public debt for the benefit of big banks and other special interests. The American people know this. When will Washington learn?

In addition, the president’s plans for healthcare reform – or health insurance reform – are becoming more and more unpopular as details are examined. But because of all the alarmist rhetoric, politicians in Washington feel obligated to pass something, even if it doesn’t help. Rarely are liberty and prosperity at greater risk than when politicians feel they must “do something”. It is frightening to watch Washington toy with our healthcare purely for political reasons.

However, the saddest shortcoming of this administration is its utter failure to pursue a more peaceful foreign policy. Just last week up to 90 people, apparently mostly civilians, were killed in Afghanistan in an airstrike, and the violence is only getting worse. The administration is mulling over how many more troops they will send as part of their “Afghan Surge” with advisors getting it exactly backwards. They qualify sending fewer troops as “high-risk” and sending more troops as “low-risk”. This is not the perception at all if you were to ask the families of those being sent over. The best answer would be to stop risking any of our troops for the sake of what is, for all intents and purposes, a violent occupation, helping no one.

But all of these problems and their wrong-headed solutions come from one greater problem – which is not understanding the reasons that we are here. The economy is in bad shape because of too much government intervention producing a myriad of unintended consequences and perverse incentives. Healthcare is broken because the doctor-patient relationship has been broken down by hyper regulation and too much government interference. Afghanistan is a mess because they ignored the mission approved by Congress – to seek out those who attacked us on 9/11. They have instead gotten sidetracked with nebulous interventionist tasks such as promoting democracy and nation building. Eight years later, there is no real progress. The Soviets bankrupted themselves fighting in the mountains and caves of Afghanistan and we’re about to do the same. If we would just look to history it would be self-evident that there is nothing left to win in Afghanistan, and everything to lose.

Most of all, we need to understand that we don’t understand Afghan culture and politics, and for that reason alone, intervening in their affairs is unlikely to produce positive results. The best thing we could possibly do now is to bring our troops home, from Afghanistan, from Iraq, from Japan, from Germany, from all occupied countries, and concentrate on mending badly damaged relationships around the world. Free and honest trade has always been the best way to do that, without fail. Not understanding the benefits of peace, freedom, and nonintervention will always bring about catastrophe.

Michael asks…

What are the similarities between Japans economic mess and ours?

esp in the 80s and ….does their stock market resememble ours and whats to come????

Justin answers:

We both blame it on China, and we’re both wrong.

Joseph asks…

What’s wrong with USA starting to be more Communist like China they are now the 2nd biggest economy?

I mean CHina is #2 right now an its cuz of communism their government is doing well an the country 2nd best now i mean why is all these ppl hating on communism?

China is like flying past russia an japan an liberal euro’s not cuz of being conservative its the communism their u see?

Justin answers:

Communism in theory:
. State owns all means of production.
. Everyone gets equal share.
. Classless.

In practice there have been different flavors, but all have these characters:
. Repressive and human right violator. No freedom of speech, no freedom of press, etc.
. Communist party is above the law, the state, the people, and everything.
. Dictatorship or totalitarian.

In China today,
. State owns all land. You get booted when “there is better use of land” and doesn’t need your consent or court order. You can’t sue. No one will take your case. Just in this week, 3 people burnt themselves to death in protesting their home and land being taken away.
. Still many state owned enterprises. If has public traded stocks, the state still owns majority shares and appoint the management. These enterprises receive special treatment like subsides and tax breaks.
. Police can arrest you without a reason. Your lawyer can get arrest, too. If you speak against the government, you’re charged with “leaking national secrets.”
. The party owns the army, the police, the court of law, the legislation, and all. Every office has party control/secretary.
. Party leaders’ kids and relatives are at high places such as mobile phone company, oil company, cable TV, venture capital company, finance institute, etc. They are the elite class.
. Each person has a registry record. If you got booted from the land you leased from government and you go into the city, your kids won’t be able to go to school, and there is no insurance for you.
. Corruptions everywhere.

PRC is now 2nd largest national GDP. But in terms of per capita (per person), they are number 98.

Their economy model at this time, per Chinese government officials, is “Socialist Market Economy”.

Still want to go?

William asks…

Is it me or has the free market economy sort of backfired?

I come from the UK where people are on average experiencing a 30% drop in their living standards. Social mobility is weaker now than it was in 60s and inequality has grown. Yet we were led to believe that a free market economy is the best thing for society!

One thing I cannot understand is why costs are going up yet people’s income isn’t rising at the same rate? Surely these prices set by the market are illogical? Wouldn’t it make more sense to lower prices, that way businesses would sell more and more people could buy them? Why doesn’t Britain have a conscious anymore? What‘s wrong with making travel, goods and housing more affordable?

Justin answers:

Problem with US is that it is spending more than earning.
Problem with UK is it is not earning. Yes, over 50 years UK has traveled a lot downhill.
UK needs complete revival of outlook like Japan.
UK need to adopt high self-sufficiency, shunned stock exchange, support to State than “Economy.”
The rat race which capitalism set in , is going to have many victims.
A country with 50% tax on salaries and 26% on corporate profits , makes people what they are today.

Problem with west is, generations have been brain-washed into believing that capitalism made their lives comfortable – No, it was imperialism of this sort or that. See how they are crazy for free market even in disaster !!!

James asks…

How does America buy goods from other countries if our currency is worth nothing to them?

I’ve always wondered how America can buy stuff from canada, china, japan, etc. but the U.S. currency is worth nothing to them? right?

Justin answers:


obviously wrong.
In fact, until recently, most of the world’s business was denominated in dollars.
Recently the Euro has come into favor, but i think that the dollar still predominates.
And the American stock market is also preferred around the world.

Chris asks…

What is the difference between LED,LCD and Plasma Screens?

I see TV ads saying that the television screens are LCD, LED and Plasma and asking customers to buy them. Without knowing what is what and advantages of the display screens I may buy a wrong one and regret for the same at a latter stage. Earlier they advertised Flat screen and fully flat screen with CRT screens. What is the benefits of LCD, LED and Plasma screens over CRT screens?

Justin answers:

Liquid-crystal display televisions (LCD TV) are television sets that use LCD technology to produce images. LCD televisions are thinner and lighter than CRTs of similar display size, and are available in much larger sizes. When manufacturing costs fell, this combination of features made LCDs practical for television receivers.

LCD-In 2007, LCD televisions surpassed sales of CRT-based televisions worldwide for the first time,[citation needed] and their sales figures relative to other technologies are accelerating. LCD TVs are quickly displacing the only major competitors in the large-screen market, the plasma display panel and rear-projection television. LCDs are, by far, the most widely produced and sold television display type.

LCDs also have a variety of disadvantages. Other technologies address these weaknesses, including organic light-emitting diodes (OLED), FED and SED, but as of 2011[update] none of these have entered widespread production.

An LED-backlight LCD television is an LCD TV that uses LED backlighting instead of the CCFLs used in traditional LCD televisions. It is not a true LED display but is called “LED TV” by some manufacturers.[1] The use of LED backlighting has a dramatic impact, resulting in a thinner panel, less power consumption and better heat dissipation, and a brighter display with better contrast levels.

The LEDs can come in three forms:

Dynamic RGB LEDs which are positioned behind the panel
White Edge-LEDs positioned around the rim of the screen using a special diffusion panel to spread the light evenly behind the screen (the most common)
A full-array of LEDS which are arranged behind the screen but are incapable of dimming or brightening individually
material may be challenged and removed. (April 2011)

Modern televisions consist of a display, antenna or radio frequency (RF) input (a TV aerial plug or an F connector), and a tuner. The existence of a television tuner (nowadays, a digital television tuner) in a display device distinguishes it from a monitor — which receives signals that are already processed. Additionally TVs almost always include speakers and teletext. Most modern TVs also feature additional inputs for devices such as DVD players, video game consoles, and headphones; the most common types are RCA (for composite and component video), mini-DIN (for S-Video, where old computers can be connected), SCART and D-terminal can be found in Europe and Japan respectively, the newer HDMI (which can also connect to computers), USB and Bluetooth. Some high-end TVs have Ethernet ports to receive information from the Internet, like stocks, weather, or news. Most TVs made since the early 1980s also feature an infra-red sensor to detect the signals sent by remote controls.

David asks…

Can anyone give an example on means of production?

Can someone please correct me if I’m right or wrong here, here are two scenarios to see if I understand it correctly.

Factory A is owned by private ownership, there is the owner and the laborers, the owners controls wages, profits, etc…

Factory B is common owned, therefore it is up to each employee to decide what to do with the wages, profits, etc…

Justin answers:

As Jai said, “Means of production refers to physical, non-human inputs used in production—the factories, machines, and tools used to produce wealth.”

The two examples you give are basic, and multiple other possible arrangement.

For example, under Marxist Socialism, the factory would be owned by the government, which is supposed to act in the best interests of the people as a whole to help the society as a whole transition to Communism.

The way a cooperative is run is that the means of production are owned by the employees, but they may have shares they can trade amongst themselves, or they may each have only one share, or there may be shares differently proportioned according to position. They will have a charter of some sort which delineates voting procedure, and methods of voting to change the charter. They will decided by voting or by delegation as per the charter what to do with profits, and will each be paid wages. They individually get to decide only what to do with the wages.

It is now very uncommon for a Factory to be owned outright by private, direct human ownership. There is too much investment involved, and that means risk–if an employee gets a hand stuck in a machine, for example, a family-owned factory could push the private personal household of the owner into poverty.

Instead, factories tend to have corporate ownership. Why?:

“Corporations have neither bodies to be punished, nor souls to be condemned, they therefore do as they like.” (attributed to Edward Thurlow, 1st Baron Thurlow; 9 December 1731 – 12 September 1806)

More specifically, corporations can be put out of business without the past wages and collected personal wealth of the owners being put into much danger.

There are different kinds of corporate ownership. There are publicly traded corporations, like Coca-Cola and IBM and so on. For these, pieces of ownership can be bought and sold by the general public through historically arranged “stock markets”.

Control in these arrangments tends to be by a board of directors and CEO only indirectly accountable to the large numbers of shareholders, and the shareholders are usually either too diverse to directly control profits and wages, or else holders of large portions of the shares, and then influential on or in the board of directors.

Another kind of corporate ownership is private ownership, as (at least until recently) Ford Motors had, and (until a few years ago, when it was bought by News Corp., ow) the ownership of the Wall Street Journal had. In these cases, private owners typically make up a large number of the board of directors, and (I think) a charter designates how they are to make decisions, what they have to do. Whose agreement they have to get sell shares, and so on.

Another structure is that in which the corporations have close ties to the central government, and get a charter approved under the auspices of working generally for the public good. This you’ve seen
historically in European mercantilism of the early modern period, in European Fascism of the early 20th century, and in the more “Capitalist” East Asian economies since the 1980s, like Japan, S. Korea, and Singapore.

In this system control is harder to pin down, as there are assumptions between the owners and the government as to what kinds of interests the decisions about what to do with profits and expansion and so on are meant to fulfill.

Yet another development has been that of the Chinese system, which is similar to the above but more intertwined with the political system through the corporation’s bureaucratic structure, not just with the connection focused toward the top.

Daniel asks…

Why has America taken the wrong strategy to car making?

Instead of Lean manufacturing and makes to order, we build tons of them and let them sit on car lots. How much money does this cost us? Quality?

Justin answers:

I think both make to order and make for stock are used by all car companies but make to stock is the huge majority regardless of manufacturer. IF you go to the Toyota Dealer they have cars on the lot waiting to be bought.

The problem is that people probably don’t want to wait a week to get their car most of the time. (And from Japan that’s 3 weeks or so.) If they do that’s fine but in fact most car sales are based on what is in stock.

Of course you can order an exact car equipped as you wish. But if you do that more likely than not they will simply check the inventory for the region you are in and ship the car you want to your local dealership for you.

The weakness of American car manufacturers in the 70′s and 80′s were quality of product and market research to ensure the cars were what people wanted. The Japanese in particular excelled at this. Then in the 90′s it was still quality to a degree but much more that the Japanese still had a better handle on the kinds of cars and features people wanted. And that has slowly changed but the Japanese are still much more agile at adapting to conditions and producing what is desired while Detroit seems to remain focused on advertising and marketing to get people to buy what they make rather than making what folks want.

And the Japanese seem to be more innovative and aggressive about new technology and features. Ford has managed to reverse its culture to become a really agile company with innovative products and this has resulted in success. I buy Toyotas until I am convinced that what I get will match their performance, reliability, longevity and retained value.

Robert asks…

how does the nuclear test in n. korea affect stock exchange in the world?

how does the nuclear test in n. korea affect stock exchange in the world? as well as the attack like 9/11 in US.

Justin answers:

Hate to say it but every answer in here is wrong.

The asian and emerging markets took a hit when Kimberly had her nuke party Japan and S. Korea took the biggest hits. On the US front it did drop right at the start of trading but by the time the markets opened it didn’t register much reaction in the US. They are rumored to be staging another one in Defiance of the Useless Nations resoultion. It will take more than this to jolt the market and comparing it to 9/11 no comparion it was deliberate attack from a terrorist organization with a well planned attack scheme and that really jolted the markets hard.

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Your Questions About Investments In Restaurant

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Paul asks…

How to go about starting a restaurant?

Currently, I am in high school.
I had an idea for next summer.
I live in the San Francisco Vicinity, and was thinking about running a restaurant for the summer.
I have a few questions.
1. Would this be feasible?
2. How would I be able to get start-up capital?
What about for one year?

Justin answers:

No, not feasible. The investment alone would preclude you being a success in only three months. If you are under 18, you can’t do it anyway since you can’t sign a contract.

As for start-up capital, no investor is going to give you the hundreds of thousands of dollars necessary to open a restaurant if you are only going to be open 3 months.

Chris asks…

How can taking out fast food restaurants in your community improve the health of the community members?

Im writing a letter to the mayor and i would like to have some ideas on:

How can taking out fast food restaurants improve your communities, members of the community, and schools health? How can it make your community helathier Please explain. Thank you.

Justin answers:

‘Taking out’ sounds rather insidious – with undertones of Big Brother diktats – which even Communist China doesn’t impose. (They allow McDonalds to operate out there.)

You might well be approaching the ‘better health’ campaign from the wrong direction – ie trying to restrict suppliers instead of educating consumers.

Here in the UK most of our larger towns have a rich diversity of different ‘eateries’ – fast food, chinese, thai, greek, indian, japanese, greasy-spoon – and of course ‘pub grub’ and hotel catering.
A huge range of choice. No-one opens a catering establishment – and remains viable – unless there’s a sufficient demand from consumers.

As in the US – we have an obesity problem – with grim forecasts that many kids stuffed with ‘fast food’ – 25% over-weight etc – have a shorter expectation of life than their parents and grand-parents. But this isn’t simply due to the relentless expansion of fast food chains.

Back when I was a kid – in post-war London when food-rationing applied, we had fairly mixed but balanced diets. No fridges/freezers – so most food was fresh – and little ever wasted. Some of the food I ate when young would be ‘illegal’ nowadays – but a compensating factor was that we EXERCISED much more. Walking to school, playing games, competitive sports, etc – rather than
spending hours in front of tv, computer and play-station screens.

This is just as important a factor as calorie-intake.
As happens here – and presumably mirrored in the US – the likes of McDonalds have been under pressure to improve both the quality and ‘balanced’ health benefits of their products. As also have schools and hospitals.

Time was schools followed the trend – cutting costs with fast food – chips and burgers/sausages etc -on limited budgets. But series of tv programmes have reversed this trend – with well-known chefs showing how even ‘capped’ allowances for meals could be spent in better/healthier ways.

I’d suggest your letter to the mayor eschews any suggestion he/she tries to restrict or close any fast-food restaurants in your community. I doubt he has any power/authority to do so – in a free democratic society. I suggest you concentrate on more positive measures – to counter-act the growing problem. Community-centred campaigns to educate the locals about healthier eating, more investment in sports/exercise facilities – checking to what extent schools/hospitals are doing/not doing to tackle the problem.

I hope this helps.
; ))

David asks…

What is the fee of opening a restaurant of KFC or McDonald’s?

I want to open a restaurant of KFC or McDonald’s. How much is the fee?

Which is better?

Justin answers:

There both a franchise, so you will have to enter into a franchise agreement. You will need to hire a architect, a civil engineer and a construction contractor to design/construct the building and the surrounding area. You will have to contact economic development of the city you are in. Once approved by city council, the city will review and approve your site plan as well as the construction plans. Once those are approved. Your construction contractor will pull building permits. All said and done your looking at a1,000,000 investment give or take.

Steven asks…

How to change the name of established restaurant?

How to change the name of established restaurant in the state of California under new ownership?

Justin answers:

Are you referring to how to “legally” change the name? Your question was rather vague. As a consultant I advise clients to stay away from restaurants because they are risky investments and take far more work than most owners realize.

Depending on how your company is set up it should be a simple matter of submitting a new Fictitious Business Name statement. Contact your local governmental business licensing office or your accountant.

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Your Questions About What Is Driving The Stock Market Today

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Daniel asks…

can you liberals please explain this to me?

Is the Reagan Era Officially Over?

Sen. Chuck Schumer has called the recent Democratic takeover of Congress the end of the Reagan era.
Friday, December 1, 2006
Star Parker – Scripps Howard News Service

Sen. Chuck Schumer has called the recent Democratic takeover of Congress the end of the Reagan era.

If we believe a red flag that the Wall Street Journal has run up about a possible Republican capitulation with the new Democratic majority on Social Security reform, our own Republican president might prove Schumer right.

The Wall Street Journal, and other sources, now report that the Bush administration is expressing openness to forget the idea of private ownership as the basis for Social Security reform, and to work with Democrats to “save” Social Security as it is with tax increases and benefit cuts.

Badly needed reform of our wounded and limping Social Security system has been seriously hampered by what I call the politics of cynicism.

These politics are driven by politicians primarily motivated by protecting their own power and interests as opposed to those of their constituents.

What‘s my proof that Social Security reform is driven by this cynical brand of politics?

No one could possibly argue that Social Security is a good program today. If we did not have it, and any politician tried to propose it and get it passed, he or she would be laughed out of Washington.

Social Security is a unique government program in that every taxpayer can personally evaluate it by asking the simple questions – What am I paying, What am I getting, and Is it worth it?

The Heritage Foundation’s Social Security calculator tells me, for example, that a 25 year old male earning $31,000 can expect, based on the Social Security benefit he’ll receive, almost a negative one percent return on the money he puts in over his working life.

If he purchased a diversified portfolio of stocks and bonds over this same period with this same amount of money, this guy could get an annuity five to six times greater than this Social Security benefit. But even a bank CD would produce a monthly payment that could double Social Security.

There are other relevant points that anyone who has been following this debate can recite. With a private account this guy owns his money. Under Social Security, he doesn’t even have a legal right to the benefit. Which is material because the government is constantly changing the rules.

Can you imagine getting a letter from your bank or broker saying they are lowering the return on your investment because they can’t afford to pay you what they promised?

But, this is what is about to happen, again, with Social Security.

Not only are the returns to taxpayers negative, but they are guaranteed, beyond any question, to get worse. The system is bankrupt and can only continue in its current form through some combination of tax increases and benefit cuts. Which will drive what individuals get for what they put in even further south.

Why, then, does there seem to be a political consensus to save this monstrosity?

Politicians will tell you it’s because the American people want it. The polls say so.

And indeed they do. But the fact is taxpayers support this status quo out of fear and not knowledge.

Certainly, no sane individual would buy a program that has the personal investment economics that I just described.

When President Bush proposed changing the program to one of ownership and private accounts, the Democratic Party launched major league into the politics of cynicism. The message that working Americans heard was that they would be kicked off a government program guaranteeing them a payment at retirement in exchange for taking their money and investing it in the stock market.

Is it any wonder that many dived for cover?

I call this the politics of cynicism because there is not a single Democratic senator or congressman who would purchase an insurance policy with the type of legal and economic realities of Social Security. Shut the door and one by one they know the truth.

The Democrats’ campaign to “save Social Security” has really been a campaign to save their own butts.

To have endorsed the president’s reform would have been an endorsement of a fundamental move away from welfare state politics that has been the bread and butter of the Democratic Party.

Now, playing on fears and not the real interests of working Americans, and the inability of Republicans to stick to and sell their message, the Democrats have won.

The real victims are the low and middle income Americans whose hard earned money is being sucked into this black hole that will only get deeper and blacker. This is happening while Democrats bewail wage and wealth stagnation at the lower end of our income spectrum.

Is a Republican White House, for fear that it will look like it did nothing on Social Security, about to join Democrats in the ranks of the politics of cynicism?

The Reagan era is still alive for this writer. Let’s hope it’s still alive in the Bush White House.

Photo Copyright Getty Images

Copyright Scripps Howard News Service 2006
you want Bush to “work” with you but you pick the things you your self think is stupid and nobody would do. you just want to make sure the service state stays in tact is how I read it but Im a stupid conservative.
obviously not one of you read this….

Justin answers:

You are absolutely correct. I wonder how many congressmen have diversified portfolio’s, and why they don’t figure out a way to wean us off the Social Security to a system of mandatory private accounts. I’d bet most have mutual funds where they see 8-12% gains a year. Is it right that our money goes to retired people? Before I get labeled uncaring, I’ll tell people that I don’t want my children supporting me in retirement. I’d rather they invest the money in mutual funds for their own retirement.

Some numbers for some perspective. If you are employed and make merely 20k a year, you pay $1530 into social security and medicare a year. And your employer matches it. If that money, not the employer’s money, just the employee’s money went to a mutual fund, using very conservative figures (conservative small c) of 8% return, which is low, ask a broker, then from 20-60 years old, at retirement, you have $445,103 at retirement. Consider that is never getting a raise making over 20K a year. If you use the median income about 40K, at retirement you have, $890,206. Which a person can pass on to their children. And that is using the low 8% return.

Knowing this, how can politicians not be serious about private accounts? This shouldn’t be about Republicans and Democrats, it should be about the numbers.

Joseph asks…

Do you believe – Obama Is In Trouble?

Tapscott’s Copy Desk – Obama Is In Trouble

POSTED March 6, 2009 | 5:13 PM

Did you feel it? The political ground shifting beneath President Barack Obama since his speech last week to Congress? It’s been downhill since and I’m not referring mainly to the Dow Jones record-setting dive. The pivot point of the shift was the speech, or rather what the speech did to the evolving public narrative of Obama.
Let’s review:
* Since the first of the year, Rush Limbaugh’s audience has exploded , according to Howard Kurtz of The Washington Post, even as his daily assaults on Obama have intensified. The conservative Talk Radio maestro has become quite possibly the most listened-to radio personality in America since before Paul Harvey (God rest his soul).
Demand for his air time hs suddenly become so intense, Limbaugh told The Examiner’s Byron York earlier today, that his network sold 80 percent as much advertising in January 2009 as it did in all of 2008, and expects to sell-out the year by the end of March. That was before Obama and White House chief of staff Rahm Emanuel launched an explicit counter-attack against Limbaugh that seems only to be making him bigger.
* Glenn Beck’s eminently forgettable presence on CNN has been transformed, according to The Los Angeles Times, by his move to Fox News where his main theme has been variations on this question – Wake Up! Wake UP! What in Heaven’s name does Barack Obama think he is doing to America? Beck has a tough time slot from which to win big ratings because he’s in the middle of evening drive-time. Even so, in a very short period of time at Fox, his audience has grown to the point that it is now exceeded only by those of Bill O’Reilly and Sean Hannity.
* Obama remains personally popular with the public, but worries and even outright opposition to some of his cornerstone proposals are growing. Democrats in Congress are even beginning to express in public print their worries that Obama has reached too far with the $787 billion economic stimulus package, the $410 billion omnibus spending bill and the $3.6 trillion budget proposal (and the trillions more senior aides whisper are coming in further bailouts, loan guarantees, “tax cuts” that are really just grants, and other spending accountrements of Leviathan Unleashed.)
* Paralleling these developments, a potentially devastatng conservative case against Obama is coming together rapidly. Two influential columns this week tell the tale: On Thursday, Daniel Henninger offers this crucial observation in a WSJ piece otherwise devoted to asking why Republicans aren’t more eagerly and quickly taking advantage of the fact the Obama Democrats have all but declared war on the 75 percent of the U.S. economy that is private and therefore productive of the nation’s wealth:
“Beyond the stock market, there is a reason why, despite much goodwill toward his presidency, the Obama response to the faltering economy has left many feeling undone. There isn’t much in his plan to stir the national soul. It’s about ‘sacrifice’ now so that we can live for a future of small electric cars and windmills. This may move the Democratic Party’s faith communities, but it cannot revive a great nation. If the Democrats want to embrace market failure as a basis for their ideology, let them have it. As politics, it’s a downer.”
The second column appeared today in The Washington Post and was written by Charles Krauthammer. Obama’s mastery of public speaking has heretofore served to deflect attention away from the details of what he is actually proposing. And there is in those details, according to Krauthammer, a fundamental deception: Obama summons visions of catastrophe that are the result of too little government regulation of the financial markets and he offers as a solution vastly more government regulation of …. health care, energy and education.
The ‘day of reckoning’ has now arrived. And because ‘it is only by understanding how we arrived at this moment that we’ll be able to lift ourselves out of this predicament,’ Obama has come to redeem us with his far-seeing program of universal, heavily nationalized health care; a cap-and-trade tax on energy; and a major federalization of education with universal access to college as the goal.
“Amazing. As an explanation of our current economic difficulties, this is total fantasy. As a cure for rapidly growing joblessness, a massive destruction of wealth, a deepening worldwide recession, this is perhaps the greatest non sequitur ever foisted upon the American people,” Krauthammer said.
In other words, Krauthammer said, Obama tries to have it both ways, with the alleged errors of deregulation being compounded into the worst economic crisis since the Great Depression by America’s failure to nationalize health care, shift our economy to alternative energy sources and give everybody a free pass to college. Obama is trying to make the cause and the cure synonymous. “Clever politics, but intellectually dish

Justin answers:

We are in trouble for allowing Obama to be elected, and I agree with Krauthammer.

The media and the liberal lunatics have elected a marxist into office who doesn’t have a clue on how our great country can be successful, Obama ‘knows’ only one thing, how to WASTE Trillions upon Trillions of our hard earned money.

George asks…

For people who say “the GOP has no ideas,” what do you think about these?

In 2013, when President Mitch Daniels, former Indiana governor, is counting his blessings, at the top of his list will be the name of his vice president: Paul Ryan. The former congressman from Wisconsin will have come to office with ideas for steering the federal government to solvency.

Not that Daniels has ever been bereft of ideas. Under him, Indiana property taxes have been cut 30 percent and for the first time, Standard & Poor’s has raised the state’s credit rating to AAA. But in January 2010, Ryan released an updated version of his “Roadmap for America’s Future,” a cure for the most completely predictable major problem that has ever afflicted America.

Some calamities — the 1929 stock market crash, Pearl Harbor, 9/11 — have come like summer lightning, as bolts from the blue. The looming crisis of America’s Ponzi entitlement structure is different. Driven by the demographics of an aging population, its causes, timing and scope are known.

Funding entitlements — especially medical care and pensions for the elderly — requires reinvigorating the economy. Ryan’s map connects three destinations — economic vitality, diminished public debt, and health and retirement security.

To make the economy — on which all else hinges — hum, Ryan proposes tax reform. Masochists would be permitted to continue paying income taxes under the current system. Others could use a radically simplified code, filing a form that fits on a postcard. It would have just two rates: 10 percent on incomes up to $100,000 for joint filers and $50,000 for single filers; 25 percent on higher incomes. There would be no deductions, credits or exclusions, other than the health care tax credit (see below).

Today‘s tax system was shaped by sadists who were trying to be nice: Every wrinkle in the code was put there to benefit this or that interest. Since the 1986 tax simplification, the code has been recomplicated more than 14,000 times — more than once a day.

At the 2004 Republican convention, thunderous applause greeted George W. Bush’s statement that the code is “a complicated mess” and a “drag on our economy” and his promise to “reform and simplify” it. But his next paragraphs proposed more complications to incentivize this and that behavior for the greater good.

Ryan would eliminate taxes on interest, capital gains, dividends and death. The corporate income tax, the world’s second highest, would be replaced by an 8.5 percent business consumption tax. Because this would be about half the average tax burden that other nations place on corporations, U.S. companies would instantly become more competitive — and more able and eager to hire.

Medicare and Social Security would be preserved for those currently receiving benefits, or becoming eligible in the next 10 years (those 55 and older today). Both programs would be made permanently solvent.

Universal access to affordable health care would be guaranteed by refundable tax credits ($2,300 for individuals, $5,700 for families) for purchasing portable coverage in any state. As persons under 55 became Medicare eligible, they would receive payments averaging $11,000 a year, indexed to inflation and pegged to income, with low-income people receiving more support.

Ryan’s plan would fund medical savings accounts from which low-income people would pay minor out-of-pocket medical expenses. All Americans, regardless of income, would be allowed to establish MSAs — tax-preferred accounts for paying such expenses.

Ryan’s plan would allow workers under 55 the choice of investing more than one-third of their current Social Security taxes in personal retirement accounts similar to the Thrift Savings Plan long available to, and immensely popular with, federal employees. This investment would be inheritable property, guaranteeing that individuals will never lose the ability to dispose every dollar they put into these accounts.

Ryan would raise the retirement age. If, when Congress created Social Security in 1935, it had indexed the retirement age (then 65) to life expectancy, today the age would be in the mid-70s. The system was never intended to do what it is doing — subsidizing retirements that extend from one-third to one-half of retirees’ adult lives.

Compare Ryan’s lucid map to the Democrats’ impenetrable labyrinth of health care legislation. Republicans are frequently criticized as “the party of no.” But because most new ideas are injurious, rejection is an important function in politics. It is, however, insufficient. Fortunately, Ryan, assisted by Republican representatives Devin Nunes of California and Jeb Hensarling of Texas, has become a think tank, refuting the idea that Republicans lack ideas.

Justin answers:

Gee isn’t that nice. A $2,300 tax ‘break’ to help pay for a $350,000 major hospitalization bill.

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Your Questions About Stocks And Bonds Basics

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Ken asks…

How to invest for beginners?

could someone tell me about the basics of invest like for someone who is totally clueless, and what you need to get started etc. Especially stuff like stocks, bonds, IPO’s, etc. Just like a basic run through of everything

financi4 answers:

If you are new to the stock market, some research is necessary to be done on your part.

Try the below url:…

For New visitors, it has extensive information available like:
How do I get started?
How do I fund my account to buy stock?

And Investing section gives information like:
How does the stock market work?
What are the risks and advantages of investing in the stock market?
How do I choose what to buy?
What are some tips for beginning investors?

The following tutorials might be helpful to you:

Daniel asks…

Where can I go to learn the very basics of stocks?

I’ve been pretty interested in stocks for awhile now but I have never really gotten into learning more about trading and buying/selling stocks. I have some really basic knowledge about ET Fs, bonds, mutual funds and things like that but I feel like I barely know anything about actually using a site like etrade to begin. It may seem silly but I borrowed Investing For Dummies from my friend.

Anyway, if you guys could give me some sites or maybe even books to really help me get started, that’d be amazing. Also, I’d like you to know I’m 17 years old so I don’t think I’d actually be able to invest some real money into stocks as of now, I’d just like to know a little bit more about the whole idea.

Thanks in advance

financi4 answers:

It’s nice to start out young and you should get a lot of information to give you a bird’s eye view as early as now. You may want to look into penny stocks which range from $1-$5 give or take. It’s not really lucrative in real time but at least you get a hands on feel of trading. You can also look out for trading software’s that will also help you analyze stock data, predict the market etc.

Its always best to consult a professional broker or financial adviser to get an experienced advice and knowledge on the matter. What ever investment option you take would involve risk so get as much possible information for you to come up with an informed decision.

Good luck in your investment endeavor.

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