Sunday, February 19, 2006

Home wireless network security

Wireless networks are great, most laptop computers now days come with built in wireless capability. I have one at home and use them at airports and coffee shops around the world when I am traveling for business. I bought my wife a new HP computer for Christmas and we were getting her setup on the internet and she said should I connect to the one wireless network that is found. I took a look at the network and I could immediately tell that it was not our network and had to be a wireless network of our neighbors.

There are several things that should remember when installing you wireless network to increase your security and prevent hackers and potential identity theft. Shop for books on securing your wireless network! First of all to access the wireless network router's setup screen you will need to know the website address of the router. This should be in the router's user manual.

1) Change Default Administrator Passwords (and Usernames)
First things first change the user name and password for the admistrator settings. Most hackers know what the default setting is.

2) Turn on (Compatible) WPA / WEP Encryption
All Wi-Fi equipment supports some form of "encryption." Make sure you enable the encryption on the router. You will also have to setup the laptop to recognize this encryption setting as well.

3) Change the Default SSID
Access points and routers all use a network name called the SSID. In my example my neighbor had obviously not disabled the SSID. As a result of this I could see their network and connect to it if I wanted to. Free wireless internet if you can depend on it. Since our SSID had been changed and we also set the router to not broadcast SSID which means that you need to know the name of the SSID to even be able to start to connect to the wireless router.

4) Enable MAC Address Filtering
Each piece of Wi-Fi gear possesses a unique identifier called the "physical address" or "MAC address." Access points and routers keep track of the MAC addresses of all devices that connect to them. Many such products offer the owner an option to key in the MAC addresses of their home equipment, that restricts the network to only allow connections from those devices. Do this, but also know that the feature is not so powerful as it may seem. Hacker software programs can fake MAC addresses easily.

5) Disable SSID Broadcast
In Wi-Fi networking, the access point or router typically broadcasts the network name (SSID) over the air at regular intervals. This feature was designed for businesses and mobile hotspots where Wi-Fi clients may come and go. In the home, this feature is unnecessary, and it increases the likelihood an unwelcome neighbor or hacker will try to log in to your home network. Fortunately, most Wi-Fi access points allow the SSID broadcast feature to be disabled by the network administrator.

6) Assign Static IP Addresses to Devices
Most home networkers grativate toward using dynamic IP addresses. DHCP technology is indeed quick and easy to set up. Unfortunately, this convenience also works to the advantage of network attackers, who can easily obtain valid IP addresses from a network's DHCP pool. Turn off DHCP on the router or access point, set a fixed IP address range, then set each connected device to match. Use a private IP range (like 10.0.0.x) to prevent computers from being directly reached from the Internet.

7) Position the Router or Access Point Safely
Wi-Fi signals normally reach to the exterior of a home. A small amount of "leakage" outdoors is not a problem, but the further this signal reaches, the easier it is for others to detect and exploit. Wi-Fi signals often reach across streets and through neighboring homes. When installing a wireless home network, the position of the access point or router determines it's reach. Try to position these devices near the center of the home rather than near windows to minimize this leakage.

8) Turn Off the Network During Extended Periods of Non-Use
The ultimate in security measures, shutting down the network will most certainly prevent outside hackers from breaking in!

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Saturday, February 11, 2006

Investing in Mutual Funds

I learned an expensive lesson back in 2000 when I had a large number of mutual funds. Thinking that I had diversification when in fact most of the mutual funds that I owned had the same stocks in their holdings. It is important to remember when you are investing that you need to own different mutual funds and they should be in different market segments to provide you with real diversification.

For example over the last several years small cap and mid cap mutual funds have been strong performers when compared to large cap stocks. Additionally, international funds and energy funds have done extremely well. However, making sure your mutual funds you own are really in different segments is very important to your diversification. Another example is the commodities such as gold which is up over 49% in the last 3 months. has a free online service that provides detailed information on mutual funds in regards to risk levels, stock holdings, and investment segments. When trying to select a top mutual fund for your portfolio it is important to look at the fund manager length of tenure at the fund, the risk level of the fund an you tolerance for risk, the past performance of the fund, and the worst individual performance years of the fund. For example if the fund is up and down as much as 25% per year can you handle this type of volatility.

Related links:

Invest in U.S. I Bonds
Saving for College

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Free credit cards no annual fee and credit card rewards

Are you using a credit card that charges you an annual fee? Does your credit card give you cash back or other rewards? Did you get a free give when you got your credit card? Does your credit card have a competitive low interest rate? If not what are you thinking. There a thousands of credit card companies out there just waiting to have your business. They will literally will pay you to use there cards.

For example I signed up for a free credit card from Schwab that pays me 1% cash back and I got a free IPOD shuffle just for signing up. Additionally if you don't want to take advantage of the cash back you can order stuff in there online catalog. AT&T offers a credit card that pays up to $300 per year cash back.

The Discover Card was one of the first companies to offer cash back credit cards. Additionally, some of the credit cards give even larger rewards for items like gas, groceries, etc. Click Here to Apply for the Discover® Platinum Card!

Discover Card Platinum Application

Another good example is to use a credit card from an airline or an auto company. For a while I was using the Northwest card to earn miles. However, they charged and annual fee that got to large so I took my own advice and switched to a free card. If you really want a new car and you like a particular brand you could get a GM or Ford car for example.

Other resources:

Get out of Debt
Making Money online with Google Adsense
Investing with Mutual Funds

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Friday, February 10, 2006

Saving for college

Saving for college is a scary think for most parents to tackle. Average tution cost over the last 10 years have increased 6.9% for public universities and 5.7% for private schools. The important thing is to start saving for college early. We started a mutual fund for our kids 12 years ago and even though the return of the fund was not that great (4%) we have been able to get a good start on saving for their education. Additionally we continued to contribute every month and also raised our monthly contributions over the years.

Fortunately it is becoming easier with the arrival of 529 plans and prepaid tuition plans. Several states offer prepaid college tuition plans. These programs allow you to pay for your childs tuition in advance either through a series of payment plans or a lump sum payment. The drawback to the prepaid plans is the tuition guarentee only applies to state colleges and universites. Some 250 private schools also offer theri own Independant 529 plans. The catch is the gains are capped at 2% per year if your child doesn't attend that school.

The 529 plan is another option to funding your child's college education. A 529 plan allows you to invest in a mutual fund and withdraw the fund to pay for college with paying taxes on the gains.

Monday, February 06, 2006

Preparing for retirement without a 401K.

Businessweek had a great article the other day on life without a 401K. It is bad enough that most young people cannot depend on social security or a pension fund to help fund their retirement. Just over a 1/3rd of the employees between 21 and 30 don't even have access to a company sponsored 401K. So if you are a freelancer, temporary work, or contractor and find yourself without the benefits of a 401K here are some top 5 ideas from to prepare for your retirement.

Five ways to save for retirement without having a 401k:

  1. Open an Individual Retirement Account (IRA). A 401(k) isn't the only way to get tax-preferred savings. IRAs provide tax benefits of their own, and come in two distinct flavors, traditional and Roth. Both are available from most mutual fund companies. Many financial advisors recommend Roth IRAs, especially for young people. Investors can't put pretax funds into a Roth IRA, but qualified withdrawals are tax-free. The after-tax nature of the accounts makes them ideal for anyone who is presumably in a lower income-tax bracket now than they will be at retirement. However, if you currently earn $110,000 or more per year, you can't use a Roth IRA. Some young workers may prefer a traditional IRA, which defers taxes until withdrawal. In other words, money goes into these IRAs on a before-tax basis, as with a 401(k). Depending on annual income, assets going into a traditional IRA may be tax-deductible, too. Contribute by Apr. 15 to take deductions for the 2005 tax year. For savers below age 50, the annual contribution limit for either type of IRA is $4,000, enough for most young professionals. In 2008, the limit rises to $5,000. Most experts recommend leaving contributions in an IRA until retirement. Early withdrawals typically carry a tax penalty, but there are exceptions for medical expenses, higher education costs, or a down payment on a first home.
  2. Explore other savings options. Plenty of young people worry about locking up their money in the long run. After all, they might need to crack their nest egg for weddings, children, or rainy days. So contributions to an IRA can be supplemented with savings outside a tax-favored retirement plan. Meanwhile, self-employed individuals have access to a wider array of retirement-plan options (see BW 12/05/05, "A Perfect Match"). A Simple IRA allows contributions of up to $10,000 a year and can be established anytime between Jan. 1 and Oct. 1 by visiting a financial institution. "They're very easy to use, and you can put a ton of money away," says Terry Balding, a certified financial planner at Terry Balding & Associates. The self-employed have access to the same types of plans used by big corporations. A one-person 401(k) or pension plan could make sense for those with high income. But the cost and hassle of maintaining these complex programs will be too much for most young professionals.
  3. Make savings and investments automatic. Once workers start saving, the best way to keep up the momentum is to ensure that it happens by default. "The biggest piece of advice, beyond 'start now,' is to use a 'set it and forget it' approach," says John Curry, managing director of retirement management with FundQuest. Most mutual fund companies allow deposits into IRAs or taxable accounts to be made directly from another account via bank draft. Like contributing to a 401(k), setting up a systematic bank draft allows savings to pile up in the background, without requiring any further effort. These days the details of investing can be automatic, too. Mutual funds called lifecycle funds aim to take out the legwork, and they're growing in popularity (see BW 07/26/04, "Funds That Adjust As The Years Go By"). These funds shift their asset allocation from stocks to bonds as they approach a certain retirement date. Assets in the funds have more than doubled since 2003, according to Financial Research. Products like the T. Rowe Price Retirement 2040 Fund (TRRDX ) and Vanguard Target Retirement 2045 Fund (VTIVX ) have earned praise for low fees and ease of use.
  4. Investigate index fund: Then again, fees are usually even lower for an index fund. Young investors are widely encouraged to invest primarily in equities, because of their longer time horizon. An index fund lets them reduce management costs while they do it. A fund tracking an index like the big-cap Standard & Poor's 500 gives exposure to a broad array of U.S. companies. Fidelity Spartan 500 Fund (FSMKX ) has a low expense ratio of 0.1%, while the Vanguard 500 Index Fund (VFINX ) costs only 0.18% (see BW Online 2/8/06, "How to Kick a Fund's Tires"). S&P 500 funds are also tax-efficient, so they can be relatively painless even outside a tax-favored account like an IRA. "The last thing you have to worry about at this point in your life is asset allocation, because you don't have a lot of money," says Patrick Doland, a financial adviser in Northbrook, Ill. "So let's get you in an investment vehicle to start out, and let's not overcomplicate it." Index funds make sense for young people who are confident they'll remember to give their portfolio a tune-up once it reaches $10,000. Indexes can be volatile, so the risk-averse should either be prepared or consider other options.
  5. Follow the 10% rule. Financial advisers suggest workers save 10% of what they earn. That may sound steep, especially since the national savings rate sank into negative territory last year for the first time since the Great Depression. But it is possible. On after-tax earnings of $30,000 a year, saving 10% would mean setting aside less than $60 a week. So give up a night on the town, or start packing your lunches and skipping Starbucks in favor of the office coffeepot. The trick is to get your house in order first. Keep paying off those student loans, but don't necessarily pay them ahead of schedule. In many cases, if a student secures a low, fixed interest rate, it may be better to invest that money. On the other hand, it's almost always smart to pay off credit card debt first. Only extremely risky investments would have a chance of overcoming the high interest rates credit card companies typically charge. Better yet, avoid racking up debt in the first place.

Other resources:

Get out of Debt
Making Money online with Google Adsense
Investing with Mutual Funds
investment calculator

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Sunday, February 05, 2006

Protecting Yourself From Identity Theft

Identity theft protection is an important topic now days. Unfortunately with the internet, credit cards, and e-commerce identity theft prevention is even more critical. There are a lot of smart people out there just looking for ways to rip you off. From stealing your credit card numbers to transferring your bank account to another account you need to make sure you are aware of the identity theft and all of the potential ways for it to occur.

  1. Password protection your first key to identity theft prevention: First of all one of the most important things to do to prevent identity theft is to have good passwords for your online activities. Many experts state that you should also change your passwords frequently to prevent identity theft. Strong password checklist Microsoft has the following recommendations to establishing a strong password. A good, strong password should meet all three of these criteria: A. Over eight characters in length. Short passwords are easier to crack than long passwords. B. Combines letters, numbers, and symbols, but not sequential or repeating combinations, such as "12345678," "222222," "abcdefg," or adjacent letters on your keyboard. Not common words with letters replaced by numbers or symbols, such as "M1cr0$0ft" or "P@ssw0rd". Unfortunately, hackers know these tricks, too. C. Easy for you to remember, but difficult for others to guess, and not your login name, your spouse's name, or your birthday. Not hard-to-remember. Random combinations of letters, numbers, and symbols that must be written down to be remembered, can be misplaced, or found by others and used. Not words found in the dictionary, in any language. Hackers use sophisticated tools that can rapidly guess passwords that are based on words in the dictionary, in a variety of languages, and using words spelled backwards. Microsoft even has a site the rates the security of your password. Give it a try it is a pretty cool little service. MS Password Checker
  2. Phishing scams a popular tool for identity theft: Phishing according to Wikipedia is defined as: In computing, phishing is a form of social engineering, characterized by attempts to fraudulently acquire sensitive information, such as passwords and credit card details, by masquerading as a trustworthy person or business in an apparently official electronic communication, such as an email or an instant message. The term phishing arises from the use of increasingly sophisticated lures to "fish" for users' financial information and passwords. I first started receiving phishing scams the referred to my Paypal and Ebay accounts. Please check out the Tips to protect your identity from phishing scams.
  3. Credit cards: Make sure you review your credit card statements in detail each month. Look for suspicious transactions that don't appear to be inline with you spending. Call the credit card company as soon as possible to determine if it is a fraudulent transaction. If you have a significant number of transactions make sure you cancel the card and immediately check your other cards for similar activity.
  4. Shredders: One of the key techniques of to steal your information is dumpster diving. With simple information obtained in your trash identity theft can be accomplished. Invest in a paper shredder to destroy trash that has personnel information on it. There are even shredders available now that can destroy a credit card.
  5. Social Security numbers: Protecting your identity is hard to do and your should always remember to not give out your social security number to organization or stores that you don't feel need the information. Reserve giving this number out only when you are taking out a loan or other key financial functions such as starting a new investment account.
  6. Computer viruses: Make sure you have the latest virus protection on your computer. Running without this type of protection can expose you to identity theft. Many hackers can install a virus onto your computer that will monitor your web history and record passwords and key strokes to help them steal your identity.
Other resources:

Tips to protect your identity from phishing scams.

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Get Rich Quick?

Get Rich Quick?

Everyone wants to get rich quick and not have to work to do it. I see people that want to make $5000/week working from home. I would like to do this as well but it is not reality. There are very few get rich quick scemes that work.

Some of the best advice I have found toget rich is in several get rich books. None of them claim that you can get there quick, however they do give a lot of great trips on how to get rich.

Some of my favorite books are The Millionaire Next Door, Millionaire Mind, Rich Dad Poor Dad, Think and Grow Rich, and The One Minute Millionaire. These books have a lot of great tips, some of the basics on getting rich, spend less than you make, invest the rest. Get more education, get a degree or a skill. Get a job using this education and then get an advanced degree. You can also start a business. Rich Dad Poor Dad talks about the Cash Flow Quadrant.

The 4 quadrants are, 1. Employee 2. Self Employed 3. Business owner 4. Investor. The concept is if you can do all 4. For example I have a full time job, I am self employed through my website business, I don't really have a business yet because that would mean I have employee, and I am an investor. I still don't have quadrant 3 covered yet however, I am dreaming about it and looking for ways to start a business. Rich people usually own a business.

Other resources:

Get out of Debt
Making Money online with Google Adsense
Investing with Mutual Funds

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Life insurance to buy or not to buy

Many young people don't buy life insurance thinking that they don't need it. They feel that they are young and won't die. Additionally, a lot of people that don't have any dependants such as a spouse and kids also do not feel the need to buy life insurance. There are several important reasons to buy life insurance early in your carreer.

  1. First of all you can usually buy life insurance on a fixed rate that the insurance company will hold for 10 years. I bought a policy and it was $225 per year for ten years. A $250K policy will cost you $270 per year and they will hold the rate flat for 20 years. That rate stays the same until you are 40 years old. At this rate it is less than a $1 per day. You spend a lot more than that each day on gas, coffee, lunch, beer etc.
  2. Also you maybe 20 years old now but in five years you might get married and start having some kids. You and your wife might buy a house. Having a $100K or $250K in life insurance is an excellent safety net.
  3. Some policies also have benifits if you get hurt such as loosing a limb or and eye. All things that you may not want to think about however, after you get hurt you can't buy the insurance and expect the coverage.