Real Money

Max answers:

The bank can’t take anything that is at a different institution.

If your stock is held by Key Bank, then you want to read the loan/creditcard/checking agreement and look for a “cross-collateral” clause. This is common, and means “we can take from one of your accts to pay another”…but again that’s only accts held at the same bank.

I don’t know about the state. But for just $50…I would guess not. May just send it to collections.

Max answers:

It’s truly sad that people often don’t give thought to investing till they are in debt and need the money. Unfortunately, it doesn’t work that way, when you are in debt, it is others who are making money off you not the other way around so there is no investing until you are out of debt, it’s only damage control at best.

There’s no easy way out with debt, you simply have to stop digging the hole, don’t run up any more debt and then focus on getting rid of a debt as soon as possible and roll the cash flow that was going into that debt into the next shortest term debt to get rid of that one as quickly as possible, etc. It’s the snowball effect and that’s really the only way out other than to default which is to declare bankruptcy and just walk away.

What always make the most money is a job, she or you may wish to consider a small part time job. The added income goes a long ways to retiring debt quickly. It could be as simple as getting a professional quality windshield repair toolkit and taking the occasional appointment online to repair a stone chip or two. It could be just selling some garden vegetables and crafts at a weekend community farmer’s market or it could be a full blown part time job at the local MacDonald’s. You can also save a lot on groceries if you use the local food bank for a while and of course, there are the backyard gardens for fresh vegetables. It doesn’t have to be much, just a few dollars every week will be a lot more than you’ll get from a decent investment unless you are investing a lot of money.

Max answers:

When you purchase stock, you are purchasing a very small percent of the company. Right now, there’s about $74 billion worth of Disney stock out there and each share is trading for about $40 a share. If you invest $250, you’ll buy about 6 shares of stock (you can buy a fraction of a share, so you’ll really buy about 6.25 shares of stock).

With that, you own a very small percent of the company, Disney. As the company makes profit, they pay out dividends. Right now, the dividends are set to be about 40 cents a share, once a year. That means they will pay you about 40 cents once a year for each share you own, or about $2.50. This is your share of the company’s profit.

That’s not all that much. So, you might wonder, why would you buy the stock if you’re only getting a couple dollars a year in your share of company profits? Well, if the stock price goes up, you can sell it for more money. If it goes up to $50 a share, you can sell your 6 shares and get about $300 out of it. If it goes down to $30 a share, you can sell those 6 shares and get around $180 out of it. You don’t gain or lose money as it goes up or down unless you sell your stock.

Analysts currently rank this as a “hold” stock (if you have it, don’t sell it. If you don’t have it, buy something else), although there are a couple that call it a “buy” stock (buy it if you don’t have it).

Another similar stock is Cedar Fair (stock symbol FUN), which owns a bunch of amusement parks (Cedar Point, Canada’s Adventure, King’s Island, California’s Great America, etc.). It’s selling for about $17 a share and they pay a $1 annual dividend.