Making money: What the experts say

Why companies should pay up

“Where have all the dividends gone?” asked Jason Zweig in The Wall Street Journal. In 2009, companies in the Standard & Poor’s 500 index slashed their dividends by $48 billion, and so far 2010 isn’t looking much better for income investors. It’s not that firms don’t have funds: U.S. non­financial companies are sitting on hundreds of billions of dollars of “pure cash,” according to one S&P analyst’s estimates. There are even some good reasons to hoard cash; it dampens stock volatility and can be used for revenue-boosting projects or acquisitions. But too much cash can lead to frivolous spending. One recent study found that the future profit margins of high-cash firms can be as much as 1.5 percentage points lower than those of low-cash firms.

Time to play landlord?

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Faced with the unsavory prospect of selling at a loss, some homeowners are opting to rent out their homes until the market takes a turn for the better, said Lisa Sherzer in SmartMoney. Yet playing landlord “doesn’t always make financial sense,” unless you actually plan to eventually move back into the house. Average rents have decreased right along with home prices, says John Vogel, a professor at Dartmouth’s Tuck School of Business. So there’s a good chance your rental will have negative cash flow. In addition, with rents expected to fall farther in 2010, Vogel says, “there’s at least as good a chance that the market will be worse a year from now.”

Finding lost loot

Discovering forgotten money that’s been balled up in a jacket pocket can feel satisfying, said Laura Cohn in Kiplinger’s Personal Finance. So can reclaiming money from the government. State treasuries and other agencies are currently sitting on an estimated $32.9 billion worth of unclaimed property, including everything from tax refunds to inactive savings accounts. The best place to look for forgotten assets is Missingmoney.com, a free site endorsed by the National Association of Unclaimed Property Administrators. Search different variations of your name, including common misspellings, which often are what cause assets to go missing in the first place. If someone contacts you about unclaimed property, however, “be wary.” That’s a popular line for con artists.