So a little background on principal of each program needs to be told. Bi-weekly mortgages became popular a few years back when interest rates were extremely high and it made a lot of sense to pay as much on principal of your mortgage as you can in a systematic way.

The way it works is that your mortgage payments are split in two every month so you end up paying (26) 1/2 payments instead of 12 whole payments which in effect ends up paying one additional month towards your principal.

Doing this ends up saving average homeowner thousands of dollars on interest payments over 30 years and shaves off around 7 years of payments. Not bad for back then. But as interest rates started to drop net effect of savings are not as great now as they were when rates were higher.

If you are like most people today, you have either thought about investing in stock market or you actually went out and bought some stock. If so that’s great, there is lots of money to be made in stock market, but important question is; How do you pick your stocks?

Are you buying stock, because your brother told you to?

Did you get a hot tip from your mailman?

Or are you just buying stock because you like company’s products?

Believe it or not, a very large percent of people who invest in stock market are investing their hard earned money based on above examples without any further research.

Does this sound like a smart way to invest to you? It certainly doesn’t to me.

Now if you ask your brother what stock to buy and your brother happens to be Warren Buffett, well then I think its safe to say you will make a good investment, but how many of us can claim Warren Buffett as our brother?

For vast majority of us this kind of investing is very risky, while you could make money, it is more probable that you will lose money.

To help you keep from losing your money and to help you make best choice when picking stocks, below you will find five most important questions to ask yourself before buying a stock.

1. What Does Company Do? This sounds like pretty basic information, but it can be tough to find. Most companies offer more than one product; a big conglomerate might offer hundreds of different products in a range of industries. Digging into company’s lineup can give you a better sense of forces that will drive its results.

Scrutinizing a company’s product line cans also tell you where its profits come from. For example: video games accounted for 11% of Sony’s SNE total sales in 2000 but 40% of its earnings.

The annual report is best source for this kind of information. Be sure to read shareholders letter, as well as presentations of company’s product lines. Those are also part of company’s SEC filings.

2. How Fast is Company Growing Over long periods of time, stock prices are driven by earnings growth. That can come when a company cuts costs, but ultimately, revenues have to increase if earnings are to keep going up. If revenues, also called sales, are increasing, that’s a good indication that something is working. Maybe company boasts a better-than-average product or a more effective sales force. In contrast, flagging sales can signal trouble.

Earnings growth signifies that company is making more that enough to offset its costs. Established companies should show consistent results, but young companies often display strong revenue growth with little or no earnings. Witness myriad of Internet companies with lots of sales and no profits.