Month: May 2014

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Does Gold Belong In Your Investment Portfolio?

GOLD – The MAGIC METAL
Humankind’s fascination with gold can be dated back as far as 4000 B.C., and for much of our collective history, possession of gold was a sign of wealth and status restricted solely to governments and nobility. Eventually, the first gold coins are believed to have initially financed long-distance trading around the world – around 500 B.C., Darius the Great of the Persian Empire is thought to have minted the first coin, the “daric,” to facilitate the expansion of his empire and the needs of his army as it moved into foreign territories.
 
Many countries came to use gold and silver coins as currencies for centuries. However, during the worldwide depression of the 1930s, every industrialized nation ceased using the gold standard, subsequently severing the close link between the value (and quantity) of gold and the value of money.
 
Despite this, gold continues to be a sought-after commodity due to its scarcity and reputation as a hedge against monetary or societal collapse. But does it deserve a place in your portfolio?

Gold in Modern Civilization

Today, gold is available in several forms, including the following:

Historic Collectors’ Coins

Minted as currency by many countries, these coins are now collected as much for their numismatic value as their gold content. Like other collector’s items, such as stamps and fine art, only experts, or those who have access to experts, should consider this investment.

Collector Gold Coins

Issued by countries and commercial businesses, these coins are priced according to their weight and purity. The more popular coins are the Canadian Maple Leaf, the South African Krugerrand, and the American Eagle.

Gold Bars

Available by weight of one gram, one ounce, ten ounces, and one kilo (32.15 ounces) generally with 99.99% purity, bars are also referred to as “gold bullion.” A standard gold ingot like that found in the U.S. Fort Knox Depository, and commonly depicted in movies, is seven inches long, three and five-eighths inches wide, and one and three-quarters inches high, and weighs 27.5 pounds. At current market prices, an ingot would have a value in excess of $500,000, much too expensive to support an active investor market.

Common Stock of a Gold Mining Company

Ownership in a company whose sole business is the search and discovery of gold, and the potential value of the element in the resources not yet produced is a common type of gold investment.

Gold Exchange Traded Fund (ETF)

A gold ETF does not typically hold gold as a commodity, but tracks its price with a combination of financial derivatives.

Gold Exchange Traded Notes (ETN)

A gold ETN is a debt security that’s value fluctuates based upon the price of the underlying index – in this case, the price of gold. While this investment includes credit risk, the benefit of being taxed as a long-term capital gain rather than paying ordinary interest exists with this vehicle.
 
Gold is not money or currency, but an investment which must be converted into money before it can be used to purchase other assets. Of course, individuals and businesses can agree to exchange an amount of gold for a service or product – as was done for centuries – but it would require negotiation about the relative value of each, a timely and potentially risky process for both parties.
 
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What is 3D Printing – Its Applications & Promise

3d PrintingNeed a new shoulder joint, a gun, or that tiny little part that fits inside your child’s toy? 3D printers have the potential to change our lives and make every person an inventor, a sculptor, or a chef.

These revolutionary printers are increasingly visible in our everyday lives:

  • Guns. In 2013, self-declared “crypto-anarchist” Cody Wilson designed, created, and printed a plastic gun via 3D printing technology. Cody fired a shot and distributed the CAD files for the gun over the Internet. There were more than 100,000 downloads before the U.S. government closed the site. In May 2014, Yoshitomo Imura was arrested in Japan of possession of five 3D printed guns.
  • Cosmetics. At the TechCrunch Disrupt show in New York City in May 2014, Harvard MBA graduate Grace Choi demonstrated the Mink, a 3D printer costing less than $200 that combines FDA-approved ink with a variety of substrates to create any type of makeup, from powders, to cream, to lipstick. According to Choi, “Big makeup companies take the pigment and the substrates and mix them together and then jack up the price. We do the same thing and let you get the makeup right in your own house.”
  • Body Parts. According to a 2013 report by TIME magazine, 3D printers are already carving out body parts like ears and noses from body cells. While early stage, the technology is promising for cosmetic and plastic surgery.
  • Food. The Massachusetts Institute of Technology has developed a 3D printer for food called “Cornucopia,” and the French Culinary Institute has been using the Cornell-developed FabatHome for food preparation. Perhaps the space-age food replicators depicted in the “Star Trek” are not as far in the future as we might think.
  • Forensics & Archaeology. In the television show “CSI:New York,” 3D printing is used to replicate a bullet inside a body to avoid surgery. Archaeologists can replicate fragile artifacts for study without damaging the original priceless objects. For example, visitors to the Discovery Time Square King Tut Exposition were able to see an almost identical 3D printed replica of the mummy by the company Materialise.

Michelangelo once explained that every block of stone has a statue in it, and it is the task of the sculpture to discover it. Once the artist understands the three-dimensional image he seeks, his task is to carefully chip away the extraneous material to reveal the hidden structure. If Michelangelo had been able to use a 3D printer, his creative process would had been exactly the opposite: starting with nothing and gradually creating his mental image by adding substance until the form he sought was complete.

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5 Reasons Now Is The Best Time to Start a New Business

start-business1The combination of inexpensive technology, accessible virtual markets, and easy funding through crowdsourcing is changing the face of entrepreneurship. Today’s new business starters are socially sophisticated, willing to bear more risk than previous generations, and more likely to work out of a home or small office and rely on others for business processes. Some are small guerrilla outfits surfing from one hot concept to the next, and some are venture capital-funded geniuses with disruptor ideas.
It is a great time to start a new business – the best time in history.
 

The Keys to Success

America has always been the land of opportunity, the Mecca for entrepreneurship. While great fortunes have been made by immigrants and first-generation Americans such as Andrew Carnegie in steel, John D. Rockefeller in oil, and William A. Clark in copper, thousands of others formed successful small companies that provided financial security and employment for hundreds of thousands of their fellow citizens.
 
The possibility of being responsible for one’s own fate has never been greater in the history of the country. Latent opportunities for new ideas and businesses have exploded exponentially, each new concept and novel interpretation of old methods pregnant with possibility, just waiting to be birthed. There are several key reasons why this is so.

1. Cultural Accommodation

For much of history, capitalism was restricted to the beneficiaries of high birth, ancestral wealth, and exclusive education. The wide-open spaces and untapped resources of the new continent in the 19th century shattered cultural norms that had existed for hundreds of years. Entrepreneurs flooded the country, exploiting new resources, new markets, and new technology to create the greatest industrial nation in the history of the world.
 
Despite the success, access to these new possibilities was unfortunately generally limited to white males. Minorities (except in their limited communities) and women were excluded, restricted by racial prejudice, cultural stereotypes, and inefficient educations.
America in the 21st century is a more open society and access continues to broaden regardless of sex or ethnicity – anyone smart enough and brave enough to create a new business can try. According to a 2013 American Express report, there are 8.6 million women-owned businesses in the country, generating more than $1.3 trillion in revenues and providing jobs for 7.8 million employees. The rate of growth between 1997 and 2013 in new women-owned businesses has been one and a half times the national average. In a U.S. Census News release in 2011, Tom Mesenbourg, deputy director of the U.S. Census Bureau, proclaimed, “The growth in the number of minority-owned firms – both employers and non-employers – has far outpaced that of businesses overall.”
 
Led by federal and state governments, programs to assist potential new business owners are readily accessible and generally free. An entrepreneur can access classes ranging from basic accounting, to sophisticated product and service contracting. Face-to-face onsite mentoring is available from organizations such as S.C.O.R.E., while municipalities, colleges and universities, and private businesses offer incubator facilities with administrative and accounting assistance at low cost. Federal laws require that a percentage of federal contracts be subcontracted to small businesses and provide detailed contracting assistance for those individuals and companies who seek such work.
 
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Should I Buy or Lease a Car? New or Used?

buy lease carThe automobile occupies a special place in the American psyche. For most of the 20th century, it was the economic backbone of the nation, spurring growth and innovation across industries including steel, rubber, glass, and petroleum. It was the impetus for the geographic spread of cities and the dispersion of families across the continent.

The car symbolizes freedom, status, and utility. It remains the first major acquisition for many Americans, and obtaining a driver’s license is a rite of passage for every teenage boy and girl. While aircraft and railroad passenger miles have steadily increased over the years, auto passengers still log 7.25 miles for every airplane and rail passenger mile combined.

According to the U.S. Department of Transportation, there were 192,513,278 automobiles and light trucks registered in the United States at the end of 2011. In 2013, the average age of the typical American’s car on the streets was 11.4 years.
 
Even as new cars are added to the total, older cars continue to be maintained and driven on a daily basis. On average from 1990 to 2010, for every 100 new cars purchased there were an additional 220 used cars purchased and 23 cars leased. In 2012, approximately 7.25 million new cars were bought, with an additional estimated 16 million used and 1.6 million leased vehicles.

Considerations When Buying a Car

When buying your first car or trading up, there are a number of factors to consider.

1. Ego

Whose heart doesn’t beat faster to the deep rumble of a big V-8? Who doesn’t imagine rolling down the broken shoreline of Highway 1 in a red convertible, top down and hair streaming in the breeze? The trick to managing ego is understanding the trade-offs. A new Corvette is fun to drive, but it costs considerably more money than a Honda Civic.

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