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I have a passion for equities. I do. If there were a 12 step program for people like us, I would be standing in the middle of the circle and saying ‘My name is Hugh, and I am an equities addict”.

So, why exactly am I so passionate about equities? And for that matter, what exactly do I mean when I say equities? Let’s take those in reverse order, shall we?

As I mentioned last time, equity essentially means ownership. If you buy your house for $100,000 and put $20,000 down, you have $20,000 of equity. If, over a year or two, the house appreciates by $10,000 and you pay another $10,000 in principle payments, you now will have $40,000 in equity (even though you have only invested $30,000, effectively giving you a 25% return on your money. This is what keeps us equity nuts up at night…).

If you buy a share of stock, you are, in effect, buying equity in the company whose stock you purchased.  By buying a share of IBM, you now have ownership (or equity) in IBM.

Keeping this fact in mind is what drives investors like Warren Buffet. Buffett believes that the way you determine if a company’s stock is a good deal or not is by asking what he would be willing to pay for the whole company, and then divide that number by the number of shares outstanding. The resulting number is the price he is willing to pay for a share of stock… if the market price is less than that number, he buys. If it is more than that number, he does not. (This is what Benjamin Graham meant when he referred to investing in a business-like manner)

So, remember, any time you own something -  a share of stock, a bar of gold, a house, an apartment building, a long option contract - you are investing in equities. And the reason we invest in equities is because we think that, over some period of time, the value of it will increase and someone will be willing to buy it for more than we put into it.

In the next installment I will cover exactly why my blood races at the thought of equities and why I am virtually 100% in equities, virtually 100% of the tim

From:http://www.coolinvesting.com/

Here’s a tax-related post from Suze Orman that highlights some facts around the deductibility of state sales taxes on your federal income taxes. The details:

According to a recent government study, an estimated 2.1 million taxpayers didn’t take advantage of a valuable tax deduction last year: the ability to deduct either state income tax or state sales tax from a federal tax return. If you happen to live in one of the seven states that doesn’t levy income tax (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no income tax, while New Hampshire and Tennessee tax only dividend and interest income), it makes tremendous sense to file an itemized return and deduct state sales tax paid.

Even if you live in a state with a low income tax rate, I’d urge you to at least compare your potential savings from claiming the sales tax deduction rather than the income tax break. Of people who did claim the sales tax deduction, the average deduction last year was $1,718. That’s a big savings.

As Suze notes, unless Congress extends the sales tax deduction option, it’ll disappear after Dec. 31, 2007. That said, you may want to calculate your 2007 returns both ways — comparing the sales tax deduction to your state income tax — and see if you’d be better off financially claiming the state sales tax.

For me, the income tax in Michigan is at a pretty good level and I have a decent income, so I’d really have to buy a lot in a year to beat the cost of my state income tax. That said, it’s something my accountant always looks at just in case.

From:http://www.freemoneyfinance.com/