Like a number of you, I regularly get official looking emails asking me to verify my user name and password details by clicking a link which takes me to a site that looks something like my bank's actual site. In today's cyber-age these type of scams and phishing emails are growing and unfortunately new victims are found every day. However there are a number of easy and cost effective ways you can protect your credit and financial information if you transact over the Internet. This includes:

1. Keep your computer secure and the access to it. Make sure you have virus protection software that you update regularly. If you drive around with your laptop don't leave in the car when parking at public places as these hot spots targeted by car thieves. My laptop was stolen once this way and was found to be selling on ebay just 2 days later (serial number identified this). It may be a hassle, but carry it with you.

2. Check your credit card and bank accounts regularly (at least once a week) and report discrepancies to your issuer immediately;

3. Reject any email that asks you to follow a link to website and input account details for verification - even if the website looks authentic, its probably a fake replica "phishing" for personal financial information. A lot of these are going around lately and scam artists keep changing the bank logo's on their emails but the basic premise to get your financial information is always the same. Fortunately most of these emails go straight to the junk email folder, but some malicious ones (like the recent IRS stimulus email scam) do get through to your inbox.

4. Only make payments to secure websites - look for the padlock symbol in the bottom-right of your browser and click for details. Secure sites should also have the prefix "https://....", with the "s" indicating a secure site.

5. Make sure you log out of your on-line account when finished - especially at work, libraries and net cafes. Delete "Cookies" - data that stores your information on computers - on a regular basis.

6. If using a new site, don't start with large value transactions; Also try and keep a separate card for internet purchases with a lower credit limit.

7. No matter what don't send credit card, bank or personal financial details (like your social security number) by e-mail; Reputable financial institutions will not ask for your personal information via email or to verify it via a website.

8. Ignore the "remember my password option" on banking and shopping sites. Also don't store your credit information at on-line sites - if these sites get compromised, so do you.

9. Change your password regularly and pick something that is not related to your name/birthday. A good idea is to pick a unique phrase with numbers you would remember and in the middle add in the website name you are creating a password for. This way you generate a unique password for every site. For example - your unique phrase is the make of your first car and the year you bought it - Toyota94. If you use ebay, the password would be "Toyotaebay94". These are considered "strong" passwords according to password verification software. Even better add a symbol (! or #) at the beginning or end if you can remember it.

10. Read a company's privacy policy before buying on-line. You want to ensure that they will protect your financial information and not distribute it to 3rd parties without your consent.

LifeLock is the only Identity Theft Prevention Solution backed by a one-million dollar guarantee!
Click here to get a 10% discount.

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I hope you didn't reduce your 401K or other retirement account contributions over the last four to six months as stock prices and markets tumbled. Even though the value of your current 401K or retirement plan probably fell over this time, in the long term the power of dollar cost averaging and recovering/rising markets would have ensured that your portfolio will be worth more than it would have been if you stopped your contributions when things got rocky. Here's a simple example that illustrates this concept

Joe had a 401K portfolio of $100,000. Assume each stock (or fund) unit was worth $1000 in September 2007. So he had 100 stock units. He used to buy 1 unit every month when he got paid, which cost him $1000. However with the fall in share prices, the unit price dropped to $50. So Joe's portfolio is now worth $50,000. Joe is not very happy but is a long term investor. So he keeps investing the same amount every month, but now gets 2 stock units for the same price. So by June 2008, 9 months later, he has 100 + 2x9= 118 units. With a recovering stock market (just like we are seeing now), the units are back to being worth $1000 again by year end. So Joe's 401K portfolio of 118 units are now worth $118,000. By the end of the next year (2009) with the economy growing again and optimism in the markets the units are now worth $1500. So Joe's 118 units are now worth $177,000. So in the medium term, even though the stock unit price fell, the investment turned out okay as the price recovered. But what if Joe had stopped investment when things got rocky and only started back again at the end of 2009?

If he stopped investing way back in Sep 07 when the stock market tumbled, he would only have the original 100 units and they would be worth $150,000 based on the final price in the example above. So, Joe's retirement portfolio is $18,000 worse off (less $9000 for the cost of the 18 units) by not keeping up his contributions. This example is very basic and is based on assumptions like the market recovering - which I would be very confident of given historical trends. Still you get the idea and power behind dollar cost averaging. You can get more bang for your buck when markets are down and magnify the gains when markets rise.

In conclusion

Unless other circumstances prevent you from maintaining your regular retirement account contributions, don't stop investing when things get rocky. To ensure a comfortable retirement aim to commit 10% to 15% of your salary in a 401K or other retirement account. Best of all your contributions will be tax free and most likely accompanied by a company match.

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The answer is No. According to the IRS website - "You will not owe tax on your payment when you file your 2008 federal income tax return. But you should keep a copy of the IRS letter you receive later this year listing the amount of your payment." That's a relief. I am still waiting for my check, but over the last few weeks the stimulus check has been a very hot topic with some stuff being said way off the mark. For accurate and verified information, go to the source - The IRS Economic Stimulus Payments Information Center - where you can get all the information and frequently asked questions on the stimulus you could ever need.

With that, and to find what else is the buzz, here are some of the recent blog carnivals and festivals my articles were featured in over the week. Great job by all the hosts.

Money under thirty hosted the Carnival of Personal Finance #152, which featued my article on starting to budget for $5 gas

Festival of Frugality #125 was hosted at the Quest For Four Pillars, and featured my article on frugal ways to keep your home safe. This was an editiors pick!

The 88th Festival of Stocks was hosted at the Stock Market Prognosticator, which included my article on Macau Play : Melco PBL (MPEL) - on the up and worth a gamble

The Money Hacks Carnival was hosted at Can I Get Rich on a Salary which had a greek gods theme and had my article on understanding Taxes and my Paycheck.

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This is the second of my three part series looking at myths around buying, running and owning a franchise based on my own personal experience. Following some comments I received on the first article of this series, I just wanted to clarify that I am not anti-franchising. I think it can be a very profitable venture if done correctly and you go in with your eyes open. That is the aim of this series of articles - to set your expectations and to ensure you are armed with the knowledge (truth) to make the right business investment decision.

In the first article, I covered the first 3 of 10 myths of franchising which were:

Myth #1 - Buying into a brand
Myth #2 - One-sided contract
Myth #3 - Turn Key Operation

Here are the next three myths you need to be aware of:

Myth #4 – I will form a corporation to protect me – It is always a good idea to form a corporation to protect yourself from creditors if things go bad. In addition, corporate tax rates tend to be lower than personal income tax rates; therefore there are some savings involved with a incorporation. The problem is not with the corporation itself, but with specific creditors. The Small Business Administration (SBA) may back the bank loan you receive, but they are still going to require you to sign a personal guarantee. In addition, most landlords – especially those with sought after locations – will require a personal guarantee. Most commercial leases run – at a minimum – five years, therefore you are on the hook, personally, for five years worth of rent. When I sold my franchise for a massive loss to the new owner, the landlord required me to do two things:
> Agree to guarantee payment of the rent for the new owner for one year.
> Agree to pay all lawyers fees for the landlord and myself to transfer all the lease documents, etc.

This cost me about $7,000 in attorney's fees. It was well worth it, but hurt nonetheless, given the loss I took on the sale.

Myth #5 – Franchisor will guarantee me a good Location, Location, Location – Most franchisor's perform traffic/volume analysis on any location before you are allowed to begin negotiating the lease. This is supposedly for your benefit, but in reality, they are just statistics and do not guarantee a profitable volume. As Mark Twain said, "Lies, Damn Lies, and Statistics". You can "spin" data to fit your objective. A great location is probably the most important decision – period. And yet like finding a good boyfriend/girlfriend, there are only so many great ones out there. And the competition among all types of businesses is fierce for these coveted locations.

Myth #6 – I will make lots of money (while being my own boss) – Most franchisees make between 30K and 70K per year and work long hours. Sure there are a few stores that produce six-figure incomes for the owner, but this is not the norm. After all, if a franchisee is making 200K at his store at the intersection of X and Y, then the franchise company will put another location a few miles away to take advantage of that volume. Franchisors would rather have two stores making 100K each, than one store making 200K. It gives them better control. They don't like "powerful" franchisees; they are potential threats. The only way to make a lot of money with a franchise is to:

1) Buy a good franchise company - very few will be a runaway success;
2) Get in early;
3) Own multiple stores (four or more) in good locations

Look for the final edition, with Myths # 7 to 10, of this series on franchising in the next couple of weeks. As always do leave a comment and I will endeavor to get back to you as soon as possible. Thanks to Andy and Saving to Invest for publishing this series.

This was a guest post by Tony Parker, an experienced investor across various asset classes and a past franchise owner.

Here are three good books on franchising worth reading if you want more detail on buying a franchise and the pro's and con's of doing so:

1. Street Smart Franchising
2. Franchising For Dummies
3. Real Franchising Stories

Related articles and information links:
Top ten myths about buying a franchise - Part 1
Federal Trade Commission - Buying a Franchise
Small Business Association

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