Goldman Sachs is the face of what’s gone wrong with the American financial system. They are nigh universally reviled among the blue collar general populace who has no use for an investment bank.  Angela Merkel, the Chancellor of Germany, is considering dropping them.  In England, British Prime Minister Gordon Brown called them morally bankrupt.  Back in the US, the Securities Exchange Commission (SEC) is suing them.

So, obviously all this is having a pretty big impact on Goldman Sach’s bottom line right?  Right?  Well, it is true that there has been a big change in Goldman’s earnings for the first quarter of 2010.  They are UP.  A lot.  Goldman reported first quarter earnings of nearly three and a half BILLION dollars.

Sometimes numbers like this can be obscured by the the magnitude of the industry.  Does the average Joe know if $3.5 billion is a lot or a little for Goldman Sachs?  Probably not.  And it’s probably good for Joe’s blood pressure if he doesn’t know because Goldman’s earnings are up 91% from a year earlier.

How can this be?  Well, simply put, Goldman’s clients are leaving.  If you had a doctor who was a well-known scoundrel who was known to be grossly inept and was being sued for malfeasance,  you’d find another doctor.  But what if he was the only MD in town? Or what if there were other doctors, but you believed them all to be worse than yours?

You’d hold your nose and stay.  That’s more or less where Goldman’s clients are right now.  Somewhere between denial and out of options.  So they stay, Goldman proclaims its innocence, and the investment firm continues to make money hand over fist.

Until & unless the government’s lawsuit is settled, Goldman will continue to operate business as usual.  Investors beware.  Ignore all warnings, and you’ll end up with what you deserve.

Recently, sources have revealed investors are dumping large amounts of money into Twitter.  There has been much speculation and rumors that Twitter.com could be prepping for an IPO.  Why else would companies dump $100 million into a company with zero revenue?

According to Bloomberg.com, the company is believed to be valued at $1 billion.  The only rationale for valuing the company this high is if they are ready to unleash a massive revenue plan or if they are going public.  Either strategy would require some type of plan to make some money for this social media company.  The traffic is there to form unbelievable potential to investors.

Currently, Nielsen states that there are over 25 million “Tweeple” throughout the world.  Businesses, celebrities and entrepreneurs really are beginning to take advantage of this unique site.  Ashton Kutcher is followed by 3.7 million.  He capitalizes on this to help raise awareness for his television productions and charitable causes.  Businesses keep customers up to speed on new products and events.  Entrepreneurs are sharing marketing and business tips with their followers.  Even pastors and motivational speakers are able to share quotes and inspiration.

Twitter really gained worldwide recognition because of the media and recent events in Iran.  When no reporters could get firsthand information during the election protests and ensuing violence this summer, they relied on Tweeple.  The value of its communication power became evident and had everyone asking, “What is this Twitter-thing?”  How could they possibly turn this traffic into money, though?

Almost every financial website covering Twitter agrees on two main ways revenue can be generated.  One is to create business applications, such as calenders and private messaging.  These business packages would open the lines of communication to employees worldwide.  The business possibilities are expansive.  The other main way for income is for them to go with the advertising route.

No matter what they do, they are poising for major profit generation.  Keep your eyes posted for the IPO and let me know.  I’m on Twitter at (www.twitter.com/joeylaw) and so is Wasabi Media Group (http://twitter.com/WasabiMedia).

What other ways can Twitter generate profits for its investors?

The twenty-five richest people in America have a minimum net worth of $12 billion each.  Bill Gates, Microsoft founder and all around uber-genius tops the list with $57 billion.  Warren Buffett comes in a relatively close second at $50 billion.  Then there follows a significant drop off both in terms of dollars and name recognition.

The money is staying in the family, with a number of second generation billionaires on the list.  Four of the top six are members of the Walton family (the Wal-Mart Waltons, that is).  The Koch brothers, of whom you’ve probably never heard, are tied for ninth place with $19 billion a piece.  Counted together, they’d be in third place.  The same could be said of the three Mars siblings (as in M&M Mars) and their $13 billion each.  You could go all the way down to the four MacMillian children who come in tied for 42nd place with a paltry $7 billion a piece.  Added together, they’d also come in behind only Gates and Buffett among individuals on the list.  Of course, if you counted all the Waltons together, they’d be first by a good amount.

You often hear people expressing a desire to become rich and famous.  Interestingly enough, many of the people on the list are not household names.  It may well be that the rich part holds more allure than the famous part.  For example, George Soros, the far-left hedge fund guru, is famous for supporting liberal causes with exorbitant amounts of money.  He’s tied for twenty-eighth on the list with Edward Johnson III.  Most people who are somewhat aware of the financial world are familiar with Soros, but what about Johnson?  Johnson is exactly as rich as Soros, but unless you did your term paper on Fidelity Mutual, you’ve probably never heard of him.

If you’re hoping to crack your way onto the list, learning to program a computer would be a good place to start.  Six of the top 15 earned their billions in computers – three from Microsoft, two from Google, and one from Oracle.  That’s the only advice I have.  After that, you’re on your own.

It is coming up on the summer months, and there are two great stocks to help earn you some lemonade money for the upcoming heat.  There is a great one to watch and another great one to pounce on right now for almost instant returns.  I am talking about General Electric (NYSE: GE) and Harvest Energy Trust (NYSE: HTE).

The stock to watch is GE.  General Electric is currently much lower than their usual range in the $30′s sitting at $10.94.  Just looking at the technical, I expect them to drop in between $8-9 range in a month or two.  However, even buying them right now is a 60% off bargain deal.

General Electric is leading the way in alternative energy ideas.  They are the largest producer of the new Compact Flourescent Light (CFL) bulbs.  These bulbs soon will be taking over our normal bulbs because of their energy savings and long lasting durability.  GE will capitalize on this market.

GE is also a very solid company, famous for their excellent leadership throughout the years.  Everything they build is of great quality and affordable price.  From light bulbs to home appliances.  From medical equipment to aircraft engines.  They are everywhere and appear to have a vision for the new “green” market we are entering.

My top pick that you need to run out and buy now is Harvest Energy Trust.  This company is an energy company based out of Canada.  Their normal range prior to the recession was in the $20′s and now are a steal at 80% off of that.

Coming up on summer and the normal trend of skyrocketing gas prices at the pump, they are poised to make a decent profit.  This is an excellent time to buy a stock like this.  My only regret is that I don’t have more money to throw at them right now.

Oh, I almost forgot.  Dividends.  Harvest Energy Trust pays out monthly dividends.  Normally, they are about $0.30 per share.  Now they are a mere $0.05, but with one hundred shares (dividends reinvested) you get one free share a month.  That is 12 free shares a year just for having faith.

Our economy sucks!  Plain and simple, but I am a firm believer in looking for the silver lining.  That ray of hope has been given to us by our former bosses.  “You are my number one asset.”  Hearing this always made us chuckle inside, but with some effort you can get the last laugh.

Many people are talking about investing in the cheaper stocks (including myself) and to buckle up for this economic roller coaster.  I think we all need to take time to invest in our number one asset…ourselves.  The way I look at it is that we all have three resources at our finger tips: time, money and knowledge.  Currently, the money is just out of reach.

Many of us (because of lay-offs or cutbacks in hours) are very rich in time.  Often we see this as a bad thing.  However, we can use this time to develop our knowledge and ultimately our money.  How?  The Internet is a beautiful thing.  There is nothing that you can’t learn.  Most colleges now offer classes online, and because of your lowered income you may qualify for some federal aid for education.

If that is not your forte, indulge yourself in the topics that you are passionate about.  Learn all you can for free.  For the past seven years or so, I have been listening to audiobooks on my way to work.  I usually get through one in about a week.  I am using this normally wasted time to invest in myself.  The best part is they’re free.  Go to your local library, and grab all you want.

What to do with this newly found knowledge?  Start the small business you always wanted to try but didn’t have the time or know-how.  Now you have both.  You can start most businesses for very cheap and can make some decent spending cash.

With summer coming up, you could take up landscaping.  I would pay someone with a green thumb to make my yard beautiful.  Become a dog sitter.  Sell people’s stuff on eBay, etc.

Be creative, and invest your time for your future.

It is official.  Our unemployment rate has just risen to 7.2%.  524,000 jobs were cut in December alone.  The jobless rate is the highest it has been in sixteen years.  It seems as if everyone is getting laid off, and few are safe.  How can we overcome this and find a job?

Don’t panic.  I know this is easier said then done, but just sit on your hands for a minute and think through your actions rationally.  Don’t sell all of your belongings or organs just yet.  We normally have that “flinch” reaction when something bad happens.  Most of the time that reaction puts us in a worse position.

I have some free financial advice in the form of an ebook titled, Money for Tomorrow.  It was written to get us all back to the basics.  That must be step one.  We have to determine what we actually have and how much we need.  Once we figure that out, we know what we must look for in a job.

If we need $2,500 per month and as a gut reaction run out and start flipping burgers 50 hours a week, we still might not make it.  It would be smarter to work less hours and search for a better paying job.  My brother was just laid off and after sitting on his hands for a moment realized that he is in ok shape for a little while.

He saw that with unemployment, savings and not sending the kids to daycare they can hold down the fort.  Instead of wasting his time doing odds and ends for long hours, he is solely focused on finding a job.  I am very proud of how he is handling the whole situation.

In conjunction with that, a good friend of mine, JB Bryant, wrote a great article on job hunting.  He, too, has been a victim of the recession and has done extensive research on this topic and organized it for all to see.

Do any of you have great advice or tips to share with us?  Tough times are easier to get through as a unified team.

My personal goal is to make every reader of this website financially secure.  I want us all not to lay in bed at night and wonder how (or even if) we will pay our electric bill.  Money is not the most important thing in our lives, but when we don’t have it…our worlds crumble.

“Financially secure? Sure, if I made six-figures!”  The truth is that it does not matter how much we make, it is our margin that matters.  Basically, I am talking about living within our means.  Take fish for example.  For the most part, a fish will not grow larger than the aquarium in which it lives.  Instinctively, they live within their means, or they have a comfortable margin.

We are the opposite.  We see the shark next to us in a huge tank with castles and envy  her “crib.”  Next, we pretend we are that shark and try to live like our budgets are that expansive.  All of a sudden, we have overstretched our means and are fighting to stay afloat.

You know that two-thirds of America’s millionaires are self-employed.  Not that interesting until you factor in the average salary of a small business owner is $233,000.  Compare that to the average Doctor’s of $250,000 per year.  Why are more small business owner’s actually richer?

Margin.  Small business owners are used to being frugal to ensure the doors stay open and employees get paid.  The ones who spend lavishly, go under.  Doctors have a status they must maintain.  They need to look and act the part of the shark.  Therefore, many overstretch their means.  Both make the same, but one is wiser.

If you make $30,000 a year, you can be rich.  You just can’t act like you make $60,000 yearly.  My grandparents lived by this philosophy.  My grandma was a school teacher, and grandpa ran a small manufacturing business.  Neither teachers or middle managers are notorious for being rich, but they respected the margin.

Naturally, they weren’t rock star rich with private planes.  However, they were able to travel all over the world and were still financially secure.

Respect the margin!

Christmas has always been associated with good food, gifts, and spending. But having a wonderful Christmas season doesn’t necessarily entail dipping into your savings. The holidays will not be as enjoyable as they should be if you’re thinking about the bills to be paid come January.

•    Look into your financial obligations – while giving gifts is one of the most exciting parts of the season, it is important to remember that you will have other expenses for the holiday. These include family dinners, travel expenses, and giving to charity. Knowing about these financial expenses beforehand will help you avoid unplanned spending.
•    Consider your resources – how much can you spend for the holidays? Do some number crunching to come up with a realistic amount. Maxing out your credit card limit is not the answer. Spend only what you can afford to pay.
•    Come up with a budget – after you have looked into your resources, come up with a budget. You need to apportion a set amount to your financial commitments to prevent unnecessary spending. In certain cases, you might find that you need to pay more than you anticipated. Try to reallocate your resources and stick to the original budget.
•    Think creatively to cut down on spending – instead of buying new tree decorations, why not use old decorations and just add a couple of new ones instead? Or if you are having a reunion with extended family members, why not ask them to bring the dessert and beverages? They might be happy to share their favorite dish.
•    Be smart in using your credit card – it is challenging not to give in to temptation at Christmastime. For this reason, a lot of people accumulate debt. Avoid this hazard by not applying to multiple credit card “offers” because it can get you deeper into debt. In addition, this can worsen your credit rating, and you might end up paying more than you bargained.

For the past decade people have been leveraging the equity in their homes for more credit.  Housing prices, and the market in general, crashed, moving the fulcrum to a point impossible to lift like a fat kid on a teeter-totter.

Currently, we are weighed down emotionally in these tough times.  Our money situation will take a huge portion of our time and thoughts, especially when the numbers are beginning to dwindle.  The mutual funds we have been nesting are plummeting, and our homes are losing value.  Is there anything safe left?

Yes, there is.  It is time to get back to the basics.  I recently wrote about getting a budget in order, and now it is time to get some leverage back into our finances.  The budget is our fulcrum, and everything is based off of that.

If you don’t have a savings account, first build a balance there.  My dad always told me to have at least enough to cover six months bills.  Even $50 dollars a month will get you there in time, just be patient.  Having this safety net will relieve loads of stress immediately.  This is a great strategy for businesses also.  I am slowly building up my business savings to reach this point as we speak.

Once I get enough there, I am going to save another three months of bills and place that money into one year CDs.  They have higher interest than normal savings, and by forgetting this money is even there will yield big interest rewards way down the road.

Now that we have built a very safe foundation to our finances we can sleep easily.  In fact, we can afford to have some fun.  My next financial move will be to invest in some stocks or aggressive mutual funds.  This is the same strategy I have employed in my own finances, and it is working wonders.  I am anxious for my business account to get there, too, one day.

Remember to reward yourself.  Once you hit a goal, treat yourself.  Six months saved, buy something from your want list.

What a crazy time in our history!  Our economy is in turmoil.  We have soldiers at war.  For the first time since 1776 a non-white man has been elected as president.  Gas is affordable.  Tiger Woods and GM end their endorsement partnership to pinch pennies.

Many corporations are scrambling to find ways to keep the doors open.  One of the first reactions is to cut personnel.  Save on costs.  What is your gut reaction to weather this storm?

Mine is to cut costs and not get involved in new ventures.  I scrubbed my household budget to examine where I can save some extra change.  Just four years ago, I did the exact same thing as my wife and I were saving for our first home.  At that time we found over $700 a month.  There I said this wouldn’t happen again…

Never say never.  My latest scrubbing uncovered $200 each month.  Sure this was not as bad, but the point is that I was making a conscious effort and still got up to this point again.  Even those of you who think you have no room to grow…look again with an open mind and B.E. H.O.N.E.S.T.

Bills; Essentials-Housing, Outfits, Num-Nums; and Extras-Savings, Throwaway.  Quick translation.  Break down budget into needs and wants.  Needs are bills, housing, clothing and food.  Wants are savings accounts and luxuries like travel and entertainment.  I cover making a budget a little more in another post.

My goal here is to get you into penny-pinching mode.  Really dig to see where you can save a couple of bucks each day/week/month/year.  One blogger commented, “Buy the paper towels that come in smaller sheets (the 1-2-3 sheet).  Most often you only need a small one but take a whole sheet.”  What a simple cost-cutting idea!

Over the past five years I found a collective $900 each month by pinching pennies.  How much can you find?  Instead of getting into debt over your head, get free from it.  I used my extra money to buy a home and save for my future wants and needs.

Give me some money saving ideas.  What will you do with the extra $$$$?