I really do enjoy seeing the annual numbers for new hire pay because it gives me some blogging fodder and since I’ve been doing it for a little while now I can really look back at historic number to see how this year compared to last year and this year is especially juicy. According to the National Association of Colleges & Employers (NACE), practically every field saw a jump led by marketing majors who saw starting offers increase a whopping 10.3%. Now, sometimes this is a result of languishing salaries and this may be the case here as the average salary was $41,285, which ranked second to last on the chart displayed. Computer science grads saw a mere 2.5% while the Mechanical engineers can expect a 5.7% increase and Chemical engineers saw a healthy 5.6% increase.

Last November, we saw Information sciences and systems major salaries increase by 7.5%, the highest increase, and marketing major degrees didn’t even make the list. Accounting saw a 4.6% in 2005 compared to 2.7% this year. Chemical engineers saw another “higher than inflation” increase with 4.9% – I’m sure oil prices with the continued prosperity of chemical engineers. Here’s another salary comparison list too if you want more data points.

Source: CNN Money

Have you ever known anyone that has found themselves with piles of debt, and yelled “WooHoo! Hey Honey, We’re doing great! We have huge piles of debt!” Of course not. No one is excited about being in debt. If you asked every American if they would like to be in debt or like to be debt free, 99 out of 100 would easily tell you that they would like to be out of debt. Generally a person’s home is their largest payment, and their largest debt item. Wouldn’t it be great to own a home free and clear? Your grass will feel different, trust me! So why not buy the mortgage that will enable you to have your home paid for the quickest?

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Hmmm… when I saw this article on finding out if you’re underpaid by discussing salaries with coworkers, it really piqued my interested because salaries are usually held really close to the vest. The article even starts off explaining why sharing salaries sharing salaries is dangerous, how feelings can get hurt, and how if done incorrectly can derail friendships. So, how does Money recommend you go about finding out salaries and talking money with coworkers?

First, do some online research with salaries databases. While they won’t be keyed in on your specific company, they will give you a general range for your demographic and geographic location. The next step is to find a mentor that will be able to sneak you some salary information without getting into specifics. Now, your mentor will have to be in the know because if they aren’t, they’re not going to be able to give you any useful information. After that, turn it into a game where people can anonymously share their salaries. Money illustrates a “game” where people put their salary on a slip of paper and look at the numbers.

Okay, did you think that was a weak answer with such a big buildup? Yeah, me too. Play a game? Honestly, the only way you can talk salary with a co-worker is if they won’t get worked up over hearing the numbers and can understand that by sharing numbers you’re only gaining more information to go into battle with against your employer when it comes to talking money again. Now, that means only a small subset of your co-workers are going to be okay with talking dollars and see it from that perspective. These aren’t the folks that you only see at the office every day, these will have to be people you hang out with at the bar on a weekly basis, and they will have to be able to check their ego’s at the door in this sort of talk.

Anyone have any tips to share?

This is a guest post by Sun of Sun’s Financial Diary and is the fourth segment of the Model Portfolios Built with ETFs series. Part III can be found here.

So far in this series, I have discussed possible choices to build some well-known portfolios with nothing but ETFs. Looking back at the six model portfolios being covered, we can easily see that none of them has exposure in the precious metal sector, one that is considered as a good diversifier in a portfolio due to its weak correlation with other major asset classes. In this part, we will have a chance to build a portfolio that has a new element: precious metal.

In his discussion of model portfolios, Jonathan at My Money Blog used an example from the book, The Intelligent Asset Allocator by William Bernstein, to introduce precious metal into the picture. The bold investor portfolio has 70% in stocks and 30% in bonds and consists of the following asset classes:

• S&P 500 index: 10%
• Small-cap stocks: 10%
• REIT: 10%
• International larg-cap stocks: 10%
• International small-cap stocks: 10%
• Emerging markets stocks: 10%
• Precious metals: 10%
• U.S. short-term bonds: 30%

Except precious metals, possible ETFs for all other components of this portfolio have been discussed before (in part I and part II of this series), thus, will not be repeated here. Using Morningstar’s ETF list, I identified the following precious metal ETFs as candidates for this portfolio:

• streetTRACKS Gold Shares (GLD)
• iShares COMEX Gold Trust (IAU)
• PowerShares DB Gold (DGL)
• Market Vectors Gold Miners (GDX)
• PowerShares DB Precious Metals (DBP)
• PowerShares DB Silver (DBS)
• iShares Silver Trust (SLV)

Among them, GLD and IAU have longer tracking record than the new comers such as PowerShares’ DGL, which incepted in January, and GLD is the leader in both net assets and trading volume. Another key difference between GLD, IAU and DGL is that both GLD and IAU are directly backed by bullion and their share values are based on the price of spot gold, while DGL mainly invests in gold future contract (more on DGL).

As the above table shows, most ETFs in the precious metal sector have been around for only several months, thus, it’s difficult to evaluate their performance. For GLD and IAU, the price of spot gold will determine their share prices. Considering that precious metal can be a powerful force in boosting a portfolio’s return, a 10% allocation seems to be appropriate.

*3-month return

This is a psuedo-Devil’s Advocate because it’s not generally assumed that one should always roll over their 401k’s when they leave their job but a lot of folks have recently been asking me, since I had just gone through the process, who they should roll their 401k over to (I wish with Vanguard). The troubling aspect of that question is that they’ve already decided to rollover their 401k before they’ve answered the crucial questions leading up to that decision. See, you should rollover your 401k if it makes sense – that is if you can get better options, better pricing, and better management elsewhere. By asking “where” to go after “if” you should go, you can’t analyze the differences. There are many reasons why you should stick with your 401k administrator even after you leave your job, here they are:

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• Flexo explains how not all target retirement funds are created equal.
• FMF adds commentary on a Yahoo article about five ways you’re supposedly wasting money.
• JLP hosted the 96th Carnival of Personal Finance… four away from a hundred!
• Nickel writes about how you can take your time filing taxes if you’re due refund.
• MightyBargainHunter writes about hotels and perqs.
• Yan at ProBargainHunter compiled a list of personal finance bloggers and ranked them according to a bunch of easily accessible statistics. It’s an impressive list and must have taken hours to compile, kudos to Yan!

As a result of working in the defense industry, I’m very cognizant (as is anyone who works in this industry) of the impropriety of any sort of kickback, whether it’s something minor like lunch or something huge like … a job. However, kickbacks are a way of life in the private sector and so it’s always surprising when you see a story about something semi-private get busted for accepting kickbacks. In the last year, you’ve seen lots of 401k plan administrators come under the microscope for accepting kickbacks for offering certain funds… but most recently, it look like eight universities have been settled allegations for accepting “payments, travel and other perks” from lenders.

My fiancee used to work at L’Oreal in their purchasing department (she was a trained biomedical and chemical engineer, but go figure how big companies do business) and would get free lunches all the time from vendors selling things like labels and plastic bottle caps (she worked in hair coloring). I spent a few months working as a materials manager (rotational program and that rotation, not doing software development, was probably the best rotation I ever had…) and had to be very cautious in accepting anything from anyone because kickbacks are a huge no-no and being caught accepting one had serious repercussions.

I only had government backed loans (Stafford, Perkins) in college but this probe investigates the “private” loans, those that aren’t backed by the government, and so it’s appropriate that universities don’t receive kickbacks for offering a particular bank’s loan – especially if that loan isn’t in the best interests of the students. I didn’t even know that universities accepted kickbacks but I think that was naive of me. If there is every a gray area and an opportunity to exploit it, someone will until an attorney general shuts it down (way to go New York! Eliot Spitzer really set the tone… and now Andrew Cuomo is continuing the tradition).

I’m glad someone with visibility into these types of issues is able to watch the consumer’s back.

The writer of Blueprint for Financial Prosperity will accept kickbacks in the form of “payments, travel and other perks” and it is not illegal for me to do so. So please, someone send me two tickets to somewhere warm and sunny.

My name is Phil and I’m a guest poster here at Blueprint for Financial Prosperity (thanks, jim!). My family and I live in the great State of Georgia (US). I’m a technologist by trade and hobby, and I also enjoy dabbling with finance, politics, theology, and anything else I happen to find interesting when not enjoying the family. It’s my hope that the views I express will be practical and beneficial to you. If you feel the need to opine in my specific direction, I can be reached at phil dot the dot blogger at gmail dot com.

There are conversations all over the blogosphere and in everyday life concerning investing. You know you’ve got to sock away some money and never touch it until retirement. But does anyone anywhere say much about how to not lose money while managing a portfolio? My intent for this post is to give you some pointers on how to invest as opposed to what is a good investment, to help you lay a foundation to make better choices in the future.

It Takes Money to Make Money, So Don’t Lose It!

Rule number one of any kind of investment strategy really is “don’t lose money.” In reality, what this means is that it’s far better to take numerous small losses than one huge loss. How do you do this? Make sure that whatever individual investment you own — be it a stock, exchange-traded fund, mutual fund, bond, etc. — has a “stop loss” of, say, no more than 25%.

What is a “stop loss?” It is an investment term that means, “once the market price for this security drops below the threshold of x % of what I bought it for, I must sell.” For instance: you buy shares of Microsoft for $30 and the price drops to $22.50 (25% of $30), you sell. There is an interesting investing concept that goes along with the “stop loss” discipline, and that is the “trailing stop.” This is a cool strategy that’s very easy to establish with your broker. The gist is that if your Microsoft stock goes from $30 to $50, your “stop loss” is then adjusted upwards to maintain, say, a 25% stop at the new market price. Then, if MSFT goes from $50 to $37.50, your new stop loss takes effect and you’ve theoretically turned a profit while protecting your down-side.

The important things to remember here are establishing a percentage range that is comfortable for your situation and then stick to it. This is one part of investing that will help you sleep better at night!

Don’t Put All Your Eggs in One Basket

The other part of investing is knowing how much of your portfolio to put in one security. Let’s say you have $10,000 to invest. A common rule of thumb is to put no more than 5% of the total portfolio value into a single security/idea. So, 5% of $10,000 is $500. This may not seem like a lot of money, but the idea is to shore up the other part of the “don’t lose money” equation. If you were to lose 10% of the value of XYZ corporation from your $500 investment, you’re not going to be nearly as hog-tied as you would have been if you put half of your savings there.

Again, the point here is to be disciplined about keeping tabs on how much you’re investing in one investment idea.

OK, So When Do I Sell?

That is the $64 question, isn’t it? Personally, I’m a long-term investor and not a short-term day-trader, so I’d prefer to keep my investments going for the long haul and only sell if the market takes a big dip. When using trailing stops with a stop loss strategy, I can continue upwards with my investment and I have reasonable loss insurance on the downside. This strategy also takes all the emotion out of my investment decisions so that I am less susceptible to make a sudden move with something I own.

With few exceptions, I’m a big believer in ETFs (exchange-traded funds), because they’re just like mutual funds except they cost less and trade like stocks. Here are a few sites that have helped me develop a long-term investment strategy:

• The Armchaire Millionaire
• Winning Investing
• “Lazy Portfolios” (MarketWatch.com)
• ETF Portfolios (Moneycentral.com)

Disclaimer: I, too, am an amateur investor and offer the above post for educational purposes only. Nothing is to be construed as a proposal for the sale of investments of any type. Only you can determine the risks that your individual situation can sustain.