Archives For February 2007

The 10-biggest drops in stock market history.

I have noticed a couple of bloggers talking about yesterday’s 416-point drop in the Dow Jones Industrial Average. Then, this morning I see this article on the front page of MSN titled Should You Fear a Market Meltdown (titled in such a way to get LOTS of attention).

Yes, 416 points SEEMS like a lot of points. I mean, according to my local newpaper, yesterday’s drop was the 7th largest point drop in history as the graphic below shows (I highlighted yesterday’s drop):

Dow Jones Industrial Average - 10 Biggest Point Drops in History

So, point-drop wise, yesterday’s drop ranks right up there with the big boys. However, lets look at it percentage-wise:

Dow Jones Industrial Average - 10 Biggest Point Drops in History - Table 2

Consider this: Had the market dropped 22.61% like it did in 1987, it would have been down 2,856.18 points yesterday!

Always remember that the higher the market goes, the GREATER the point drop is even though the percentage drop may not be that big. It’s kind of like tax cuts. Say taxes drop 10% for everyone. Someone who pays $100,000 per year in taxes will get a $10,000 tax cut while someone who pays $10,000 per year will get a $1,000 tax cut. The percentage cut is the same, the dollar amounts are vastly different.

you hide something so other people won’t find it and take it but then you CAN’T FIND it when you need it? I like this certain kind of pen. If I keep them in my desk drawers they get “borrowed” but never return. So, I bought several extras and I’m pretty sure I hid them so that no one would find them. Well, now I can’t find them! ARGHHHH!…

What’s funny is that once I have given up and go out and buy more pens, I come across 2 or 3 that I lost. Go figure.

A Giveaway For the Ladies

February 28, 2007

It’s been awhile since I have hosted a giveaway. I was in my local Books-A-Million yesterday and picked up two copies of Thomas Stanley’s Millionaire Women Next Door. Anyway to celebrate the fact that AFM is halfway to 1,000,000 clicks (I should reach the 500,000 mark in the next hour or so), I’m going to give away both copies. To be entered in the drawing, just leave a comment below (oh, and you don’t have to be a woman to enter although the book is written for women). Also, you must be a resident of the United States or Canada. I’ll announce the winner on Friday.


DISCLAIMER – I’m not recommending any of the following stocks.

There was an interesting article in this week’s Barrons about stocks that could benefit as Baby Boomers age. The list (click on the ticker symbol to see the company’s stats):

Boomer Stocks




Allergan Pharma



AMN Health



Estee Lauder



Hartford Financial



Pulte Homes



Starwood Hotels












Whole Foods Market



Remember the Dave Ramsey: Give up the 401(k) Match in Order to Pay Off Debt post from a couple of weeks ago?

That post received some excellent comments, one of which was this one from a reader named John:

What I saw my dad do was keep funding his 401k and still using credit cards, without paying off the debt. As his minimum payments went up and up he wasn’t willing to stop the contributions to quit using the cards, and he wasn’t willing to cut his lifestyle either. He ended up with about $65,000 dollars in credit card debt and he had to file for bankruptcy because all his payments were MORE than his paycheck. At this point he was STILL making the employer match. He just retired, and he only has $250,000 to live on. If he had just cut his lifestyle, cut his 401(k) funding for a few months, paid off those cards, he could have started putting in EVEN MORE, and STILL enjoying his luxurious lifestyle without those credit card payments. If you are DEEP in 20-30% interest debt you understand how much damage it does, it’s UNIMAGINABLE.

Personally, I think the cutting of the lifestyle is the key. However, it is one of those things people simply don’t like to do. It sounds to me like John’s dad just didn’t want to pay off the credit cards. In order to get out of debt you first have to WANT to do it.

I guess if you want to look at the good side of things, we should be happy that his dad was able to save up $250,000. Lots of retirees have nowhere near that much money at retirement.

What do you guys think?

First, I’ll ask the question:

How much is too much to spend on kids’ sports or hobbies? Where do you draw the line?

I ask this becuase of this short article I read in the January issue of Money. This quote really stuck out to me:

“In the early years, lessons cost about $20,000 annually. By 2000 my [now ex-] husband and I were spending $40,000-plus a year on coaching and travel. Expenses climbed as they qualified for more international competitions. We gave up meals out, vacations, redecorating our house. We drove Volvos with six digits of miles. At one point we owed $80,000 on credit cards. But we were happy because our kids got to do what they loved.”

“…And in the end, our quarter of a million dollars in expenses paid off. Our kids hit the jackpot. Marten got a full scholarship to Penn State, and Mariel to Notre Dame. Merrick is still in high school and fences competitively. Now my ex and I, having since paid off our debts, can sit back and enjoy our children’s achievement. Perhaps one of the biggest thrills was watching Mariel win a gold medal in the 2004 Athens Olympics. But honestly, we look at all our kids as champions.”

I was thinking $2,000 per year was excessive! LOL! I can’t imagine spending $20,000 per year on my kids’ hobbies. Of course, the article doesn’t say what kind of income this couple had but considering the fact that they had $80,000 in credit card debt, they were living beyond their means.

One other thing the article doesn’t point out is whether or not the couple funded their 401(k)s over the years. My guess is no but I have no proof either way.

What do you guys think about this?

The U.S. Postal Service is kicking around an idea of a $.41 ‘Forever’ postage stamp. Customers who buy this stamp would be able to use it even after future postage-rate increases. I guess it is kind of a hedge for those who mail lots of letters. ‘Forever’ stamps will be sold in limited quantities. Once prices rise, new ‘Forever’ stamps will be introduced at the new price but the old ‘Forever’ stamps will still be honored (hence the name ‘Forever’).

Maybe this is how all postage should be handled?

For more, you can read this article I found in the York Dispatch or the article that was published in today’s WSJ ($). Oh, and here’s the price and inflation history of the First-Class Stamp:

Price History of the First-Class Stamp

Inflation History of the First-Class Stamp