From the October 1997 issue of Entrepreneur

Behind every stock, there's a story waiting to be discovered . . . at least that's the theory legendary investor Peter Lynch believes in. For 13 years, Lynch used this method to grow the Fidelity Magellan Fund into the mother of all mutual funds. Now he's created a software program to teach novice investors the benefits of equity investing.

The Stock Shop With Peter Lynch CD-ROM, developed with Fidelity Investments' Strategic Advisers Inc. and financial planning software company Vertigo Development Group Inc., is divided into several sections. In the first section, Lynch discusses his stock selection theory and provides easy-to-digest information on what causes stock prices to rise or fall. He follows with guidelines on when to buy stocks and also reveals how a company's balance sheet gives investors a peek into its health.

For $6.95 a month, Internet users can also take advantage of an arrangement with Telescan Inc., an online information source, which allows them to download financial data on nearly 6,000 publicly traded companies.

The CD-ROM requires Windows 3.1 or Windows 95 and costs $69.95. Order from Houghton Mifflin by calling (800) 829-7962, or visit http://www.hminet.com to find a retail outlet near you.

For Better . . .

Though it's not well- known, there is a way for small-business owners to deduct 100 percent of health insurance premiums and out-of-pocket medical expenses from applicable federal, state and self-employment taxes. All it takes is two words: "I do."

Under Section 105 of the IRS tax code, small-business owners who hire their spouses can provide their husband or wife and their children with health benefits.

But getting this deduction isn't easy, says Phil Harrington, president of BizPlan, an Adel, Iowa, firm that helps small businesses establish deductible benefits plans. "The IRS and Department of Labor have strict rules and regulations [for the Section 105 deduction]," says Harrington.

It doesn't matter how many hours a spouse works, he says, as long as their services are necessary and compensation given is reasonable. A good rule of thumb is to consider whether you would hire someone else if your spouse were not there.

Sole proprietors are the best candidates for the benefits; however, partnerships and corporations may also be eligible.

No Fees, Please

Banking is rapidly becoming more computerized, but small businesses are not necessarily keeping pace. That's according to a recent small-business market survey by Payment Systems Inc. (PSI). For its annual survey, the Tampa, Florida, provider of syndicated consumer and corporate market research polled 900 entrepreneurs and found that 67 percent cited fees as an important consideration when choosing what banking services (ATM, telephone or PC-based transactions) to use for doing business.

"With telephone banking, for example, more banks are starting to tack on volume fees after a certain number of phone calls, and people don't want to pay for things they've always had for free," says Maria Erickson of PSI.

The survey found that while banks are pushing services such as telephone and PC banking, 85 percent of small-business owners prefer to go into the branch to handle routine transactions such as transfers. "This is the most expensive way for a bank to deal with customers," says Erickson.

It's not that small businesses aren't able to use PC banking, because the survey found that 71 percent own computers. And there's been an 86 percent increase in ATM access since 1995. "More banks are putting ATM cards in the hands of business owners, but only one-fourth of entrepreneurs use them," says Erickson. "There is still some mistrust about depositing checks. Tacking fees onto ATM banking is a further disincentive to use the service."

Fees for PC banking have typically been high, says Erickson, but prices are now dropping, and some banks are even experimenting with no monthly fees and charging only for usage.

The good news for banks is that it takes a substantial fee increase--25 percent to 30 percent--to send small-business owners searching for a new financial home.

Contact Sources

BizPlan, (800) 626-2846, http://www.plan105.com

Houghton Mifflin, 120 Beacon St., Sommerville, MA 02143

Payment Systems Inc., 3030 N. Rocky Point Dr. W., #800, Tampa, FL 33607, (813) 287-2774.