The prudence of prenups
Prenuptial agreements “aren’t just for the wealthy and famous these days,” said Janice Revell in Fortune. Matrimonial lawyers say the financial crisis and high divorce rates have made prenups more popular than ever. Many considering marriage don’t realize that they’ll be pooling not only salaries but also 401k accounts, pension plans, and even the increased value of a home or business one partner brings into a marriage. In a divorce, a prenup allows a couple to override state laws governing how that wealth is split up—but only if it’s done right. Make sure, for instance, that the contract gets “signed at least 30 days before the wedding, to avoid the appearance of coercion,” and that each partner has his or her own lawyer. A prenup is hardly the most endearing suggestion to make to your intended, “but it could be the most valuable.”
Stocks that can weather budget reform
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The whopping federal debt means that “sweeping budget reform is coming to Washington,” said Jack Hough in SmartMoney, and whatever form that takes, it “could feel like another recession.” Stocks in firms that depend on government spending, such as defense contractors and medical insurers, look like an especially bad bet. You’re better off buying cheap shares in companies that provide basic products and pay decent dividends—such as Brown Shoe Co., which sells Dr. Scholl’s and Naturalizers, or Stanley Black & Decker, whose stock is a “handyman’s special” a year after the toolmakers’ merger. Chico’s FAS, a women’s clothing retailer that targets baby boomers, is another good choice. So is Arch Coal, since the U.S. “is expected to export more coal this year than it has since the 1990s.”
Own to rent and prosper
It’s a good time to be a landlord, said Amy Hoak in MarketWatch.com. With housing prices at historic lows, there are now many markets—such as Indianapolis, Tucson, and Salt Lake City—where smart investors can make a tidy profit buying rental property. But you should know the neighborhood in which you’re buying, and approach the purchase with an eye to what tenants want—“often the best investment is a home you wouldn’t necessarily buy to live in yourself.” Most important, be sure you’re ready for “the harsh realities of becoming a landlord.” You may not have the stomach to evict nonpaying tenants, or the grit to maintain a property, “no matter how your tenants treat it.”
