Building Equity

Higher Returns with Online Savings Accounts

2008-12-12T12:44:00.000-08:00

Looking for a higher return on your savings. Visit www.savingsaccounts.com and check out some of the top rates currently available.

Etrade, Capital One, and HSBC all offer savings rates of 3.0% or higher right now. This will most certainly beat the tiny return you get from a standard bank, yet still offer rock-solid protection for your money.

Should you Cash Out of the Market?

2008-11-24T16:37:00.000-08:00

If you're thinking about cashing out of the market, here is an article from cnn.money that may help you make a decision.

5 Ways to Tame your Market Fears

Keep your eye on the prize - We have had 7 bear markets since the mid-1960s. Focusing on daily fluctuations can lead to unnecessary anxiety.
Figure in Risk - Reasess your risk tolerance.
Make a Statement - Put your long-term investment strategy in writing.
Shut your Eyes - Don't watch tv and check the markets every day.
Consult a Third Party - Consider using a financial planner.

Depending on how old you are, you may not be able to touch your 401k without penalty for many years. So try and remain focused on the long term as much as possible.

Where Do I Put My Short Term Money?

2008-06-22T14:57:00.000-07:00

Short term interest rates have certainly dropped over the past year. But there are still some decent rates to be found. Here is a list of current interest rates available from online banks. Etrade is still offering a rate of just over 3%, down from over 5% last year.

Its clearly a better option to stuff away cash for the short term than a traditional bank savings account, which can pay less that 1%. If you haven't examined your short term funds recently, now is a good time. Its important to make sure that all of your money is working for you in some way.

Don't Forget to Sign Your Tax Rebate Check Twice if Filing Jointly

2008-06-07T10:57:00.000-07:00

Just a little reminder for your tax-rebate check. I just received a $1,200 check last week because my wife and I filed our taxes jointly. I signed the check myself for deposit but did not get a signature from my wife. Apparently, this is not acceptable by my bank (U.S. Bank). The check is being returned to me in order to get two signatures, even though I deposited it in a joint account.

For those of you who received a joint economic stimulus rebate check, get two signatures before you deposit it, it will save you some hassle. Also, try to use it for savings if you can. Unexpected income is always a great opportunity to boost your savings.

Looking for a Cheap Cell Phone? Try Amazon

2008-05-22T17:36:00.000-07:00

I'm currently in the market for a new cell phone and I've stumbles across the cell phone store at Amazon.com. Amazon offers a lot of great rebates on phones that are purchased with a service plan. My service plan with T-Mobile has recently expired so I am able to shop around with other carriers.

Looking for a Blackberry Pearl? Virtually every pearl is either free or comes with a $50 cash rebate upon activation. Pretty good deal right.

The only caveat is that you must sign up for a 2-year contract and if you cancel or don't pay on time you have to repay $250. You also must choose a carrier that you do not already have an account with.

Now, I'm no fan of contracts. But with certain services I don't mind signing them in order to save money. The reason is, I see virtually no reason why I would need to cancel my cell phone over the next 2 years. But you have to make your own decision on whether or not the contract is worth the savings. I've signed multiple cell phone contracts and its never been an issue thus far.

Unless you plan on moving to Indonesia in a year and you're concerned about cell phone service in Indonesia, you might want to consider Amazon.com for your next cell phone purchase.

2 Great Ideas For a Cheap Vacation

2008-05-22T04:53:00.000-07:00

Gas prices are reducing America's bank accounts just in time for summer vacation season. If you are feeling squeezed but still would like to take that summer trip, you may have more options than you realize. Sometimes creativity and an open mind are all that is needed to have some fun.

Here are 2 great ideas for a great summer vacation.

Go Camping - I like posh hotels as much as the next person, but I've had some great experiences in the past on camping trips and the price can't be beat. If you sleep in a tent, there are lots of great campgrounds that charge around $25 a night. You can stay for 5 days for less that $150. You can also try to find a park that is in or near your home state to save on transportation expenses. Have you explored everything your state has to offer? Transportation and lodging are typically the top 2 travel expenses and if you can cut those down, you can have a great trip without spending a ton of money.
Share a cabin with 1 o 2 other families - This is a little pricier than camping in a tent, but you still can get great lodging at a relatively low price by renting a cabin and sharing the expenses with another family. A 3 bedroom cabin provides great space at a lower cost than a nice hotel. I recently stayed in a beautiful and spacious cabin in the Smokey Mountains with a hot tub, air hockey and pool table for about $170 a night. With 3 bedrooms, there was plenty of room for 8 people. Split between 2 families the price was around $85 a night (hard to get a decent hotel room for that price). The game room kept the kids busy for hours.

When will I receive my economic stimulus check?

2008-05-20T21:36:00.000-07:00

The economic stimulus check of $600 per person is currently being paid out to individuals and family's who filed a tax return in 2008. A few people that I know have received there payment but I have yet to receive mine.

To give you a better idea of when your payment may arrive, the IRS has a stimulus payment schedule based on the last two digits of your social security number and also on whether or not you are receiving a paper check or direct deposit. The payment schedule is based upon the last two digits of your social security number. The IRS also states that a small percentage of returns will take additional time to complete and may not match the schedule below.

DIRECT DEPOSIT

Last two SSN digits:	Payments will be transmitted no later than (and received by the end of the day of):
00 through 20	May 2
21 through 75	May 9
76 through 99	May 16

PAPER CHECK

Last two SSN digits:	Payments will be mailed no later than (and received a few days after):
00 through 09	May 16
10 through 18	May 23
19 through 25	May 30
26 through 38	June 6
39 through 51	June 13
52 through 63	June 20
64 through 75	June 27
76 through 87	July 4
88 through 99	July 11

Also, Consumerism Commentary is reporting that if you filed your taxes using a third party software like turbo tax, were owed a tax refund, and had your filing fees deducted from your refund and qualified for a stimulus payment, then you will not receive direct deposit. You will receive a paper check.

How to Use Debt Effectively

2008-05-20T08:19:00.000-07:00

Debt typically has a negative connotation in our society. Usually it's associated with financial stress and insecurity. American's have a bad habit of running up too much debt and not saving enough money. As a result the debt to savings ratio is typically poor.

But I often argue that debt can help you financially if used properly and with discipline.

I make a rule for all debt that I obtain. I must have cash to back every penny of debt that I take out. This is a key decision making principle that I follow. It forces me to save enough money before I make a purchasing decision.

This begs the question, if I have the money, why do I need debt?

The answer is cash flow management. I use debt as a financial tool and I look at my personal finances in the same way as I would look at finances for a small business. Many times debt can be obtained very cheaply. In fact, at times it can be obtained for so little that you can use your freed up cash to earn more money.

For example, if I am able to obtain 0% financing on a line of credit, I can use the freed up cash to earn 5% in a CD and then pay off the debt slowly with no penalty or interest paid.

Some may criticize this line of thinking because of an overall distaste for debt, but from a purely financial perspective it is safe and correct.

Here are a few guidelines that must be followed:

Make sure you have the cash to back your debt. Don't spend what you don't have. You are using debt as a tool, not a crutch.
Keep a minimum purchase amount in mind for using this method. It may not be worth it to take out a line of credit for only a couple hundred dollars.
Debt does affect your credit score. If you are looking to take out a mortgage soon, you may want to avoid any additional debt.
Never pay interest or late charges. If you are paying for the debt, there is no use taking it out. If you have a promotional interest rate, make sure you pay off the balance before that expires or you may have to pay back-dated interest charges.
Make sure you earn money off your freed up cash. A CD is a safe and easy way to earn a decent interest rate.

Want to Track Expenses - Learn to Use Microsoft Money or Quicken

2008-05-19T11:13:00.000-07:00

As I began to mature financially, one of the things I learned was the importance of keeping track of all of your accounts. This can be done manually, but at a certain point it pays to invest in some software to help you manage your financial life. Not only will it make you more efficient, but you will gain access to powerful tools that will help you understand your financial health in a new way.

Microsoft Money and Quicken are both great programs that allow you to create and organize all of your accounts and group your transactions. For example, you can put all of your checking and savings accounts in one area, credit accounts in another, followed by investment accounts, loans and liabilities, and asset accounts. If you keep everything updated, you will always know your net worth at any given time, and you can keep track of whether it is growing or not. Get Rich Slowly writes about setting up separate accounts for different needs that you may have....emergency, new car fund, vacation. These programs will help you keep track of those various accounts quickly and easily.

Grouping your transactions is one of the most important things you can do. Each time you buy something you simply select a label such as gas, groceries, electric bill....etc. The more specific you are, the more you will get out of your information.

You can then set up budget parameters and Money will let you know when you are in danger of going over budget. This is a great tool.

Want to know how much you are spending at Starbucks. Simply run a quick report and you will see how much you are spending each month. The results may scare you, but its a great way to get an understanding of areas where you may be overspending.

I encourage you to demo a copy of Microsoft Money for free and try it out for 60 days. If you want to upgrade to a full copy simply purchase a code and you won't lose any information.

10 Secrets of Breakthough Businesses

2008-05-19T09:12:00.000-07:00

There are two ways to increase your personal equity. Earn more or spend less. Sometimes the easier of the two to control is to spend less. Usually your spending decisions can be analyzed and cuts can be made.

However, some people build equity by earning more, and one of this quickest ways to do this is to start a new business. Keep in mind though, only the top 10% of entrepreneurs make more than those working for others.

But if you do still want to jump out there with a great idea and start a new business, here are 10 secrets of breakthrough companies by INC.com.

Sexy businesses don't always win.
The company is more important than the entrepreneur.
Entrepreneurs don't always take risks.
Founders don't need to let go - they need to refine their roles.
Be prepared to change as you go along.
You don't need other people's money.
Its not all about hiring the right people - make the people already in the company more productive.
Your school doesn't matter.
MBA's are optional.
Strategy is the job of everyone, not just the CEO.

Maximizing Your Food Resources - Dinner By Design

2008-05-18T19:17:00.000-07:00

About 6 weeks ago my wife and I started using a company called Dinner by Design for most of our meals. Since then, I have noticed considerably less waste from the food we purchase.

Dinner by Design allows you to prepare about 1 month's worth of meals for 2 people. They do all of the shopping and portioning and provide great menus for weekly dinners. You simple arrive and assemble the meals. You then take home 24 meals in a couple of laundry baskets and freeze them until you need to use them. When my wife and I work together, we can put together all of the meals in about an hour. The current price is $219 (about $3 - $5 per serving).

Last month we used every bit of food that we purchase. Zero waste. This is a great improvement from doing our own grocery shopping. At Dinner by Design, you only purchase what you will use for each serving. No more, no less. No need to buy bag of carrots when you only need a few.

The meals are tasty and healthy and we've enjoyed the variety. We're hooked at this point and intend on visiting the store every month.

Credit Score Myths

2008-05-18T07:30:00.000-07:00

If you are planning on applying for a mortgage or car loan soon, you may want to take some steps to boost your credit score in order to qualify for a great interest rate. There are some items that have absolutely no effect on your credit score at all, but many people are under the impression that they do.

These are 3 common credit score myths.

Closing accounts does not help your score and may hurt it by damaging your debt to available credit ratio.
Checking your FICO credit score multiple times will not lower your score if you are checking it for yourself. If you are applying for credit, FICO treats all inquiries within a 45 day period as one inquiry.
You actually have 3 different credit scores depending on which bureau you run your credit report from. Equifax, Transunion, and Experian all have different data on your credit history that does not get shared. Make sure you check your score with each of these bureau's to ensure that there are no errors. I've had to correct errors before from a credit report medical bill on Experian that did not show up on Transunion or Equifax.

Remember too, you can run a free annual credit report online each year from each of the bureau's. However, if you want to see your credit score it will cost you extra.

Want to Save Money on Gas....Slow Down!

2008-05-17T14:53:00.000-07:00

Its a pretty simple principle. Drive slower, use less gas. With gas at $4 a gallon, driving slower can literally put a few extra bucks in your pocket. Earlier I wrote about gas saving myths that save you very little in fuel consumption. This is no myth.

In a test by Edmunds.com, accelerating more slowly can cut fuel consumption as much as 35% driving and Land Rover and 27% in a Mustang.

Let's translate that into some real numbers. If you car gets 22mpg, slowing your acceleration would get you almost 30 mpg. That's about 100 extra miles per fill-up in a 13 gallon tank or about $14 saved per fill up. Not bad.

Don't slam the accelerator when you see a green light and save $14. Pretty simple. Although, maybe this style of driving will be harder than it seems.

Travelling: Try a Prepaid Visa Travel Card

2008-05-17T09:21:00.000-07:00

Years ago travelers checks were the currency of choice for vacationers. These days though, you may find more convenience in purchasing a prepaid visa travel card. Cards have become a much more common currency than checks these days, and they offer a high level of convenience and great features.

Here are some of the great features.

Use the card to get local currency at ATM's.
Emergency card and cash replacement.
Reload from anywhere.
Zero liability
Lost luggage reimbursement
Purchase security
Travel and emergency assistance.

Remember, always read the find print for details. Also, keep the card for a while after the funds have run out in case you need to return something.

It looks like a great option for traveling, especially overseas.

Steel Prices Increasing Worldwide

2008-05-17T07:24:00.000-07:00

There has been a lot of discussion about rising gas prices lately, but steel prices are also rising fast. The average consumer notices gas right away because we buy it often, but steel is also an important commodity that can affect the consumer's wallet in other ways.

The cost of steel is up about 40-50% since December. Toyota recently agreed to a 30% cost increase for steel purchases.

These costs will certainly be passed onto the consumer and result in higher prices on products ranging from automobiles to appliances. Automobile import prices have risen 3.3%, the largest rise in a dozen years.

Steel price indices us$

Gas Savers - 6 Myths

2008-05-17T05:04:00.000-07:00

For you gas savers out their looking to save money on fuel, here are a few myths that might save you some time in your search for better fuel economy.

From CNN Money

Fill your tank in the morning - Gas temperature varies little throughout the day and filling up in the morning will probably not result in much benefit.
Change your air filter - Modern cars adjust for this automatically when a filter gets clogged.
Use Premium Fuel - May result in higher peak horsepower but not better gas mileage.
Pump up your tires - Keeping them optimally inflated will add to fuel economy, but don't overinflate.
A/C - Will reduce mpg by 1 mile per gallon on average. But rolling the windows down at high speeds will increase drag and lower your fuel economy even more.
Additives - Don't do it.

7 Radical Savings Tips on MSN Money

2008-05-14T14:04:00.000-07:00

If you're looking for new ways to save money, try these out.

Have a garage sale
Quit smoking
Drive less
Buy used
Stay at home
Cut housing expenses
Cut credit cards up

Is the All Electric Car Coming?

2008-05-13T04:54:00.000-07:00

Renault-Nissan has ambitious plans for the electric car. By 2012, they plan to have a complete range of electric cars in every large car market. And at a price that is cheaper than current gasoline powered vehicles. They are also working on building up a network of charging stations that will give a 70% power-charge in about the same time it takes to fill up a tank with gas.

The initial target will be fleet buyers who can provide their own charging stations. It may take many years to completely build up the infrastructure necessary to support electric cars. But with gas now around $4 a gallon, it can't come soon enough.

Go Southwest to Avoid the Recession

2008-05-07T20:31:00.000-07:00

Not every city is in economic decline right now. A few cities in the American southwest appear to be thriving. Here are the top recession-proof cities according to Forbes. Factors that were taken into account include low-unemployment, job growth, median home price, and foreclosures.

Oklahoma City, OK
San Antonio, TX
Houston, TX
Charlotte, NC
Dallas, TX
San Jose, CA
Raleigh, NC
Salt Lake City, UT
Seattle, WA

Cut Your Home Phone Line to Save Money

2008-05-05T05:16:00.000-07:00

Saving money should always be a priority. However, when prices go up, saving becomes more of a necessity than a luxury. Its important to periodically review your expenses and look for areas where you can make cuts.

Here is an idea that can save you hundreds of dollars a year. If you have a cell phone, consider shutting off your home phone service. At my house, we use cell phones now about 99% of the time. The land-line phone just sits there and sends us a bill every month. Its redundant and unnecessary.

If you don't use it, you probably don't need it.

Recession Solutions: Thrift Shop

2008-05-04T20:15:00.001-07:00

Although we're technically not in a recession, prices are clearly rising on everything from food to gasoline. Couple that with mortgages that are adjusting to higher interest rates, and you have a recipe for disaster.

If you've noticed that your cash flow is suddenly tighter, here's one solution: buy clothes at the thrift shop. You can often find quality used clothing at fantastic prices, and save big bucks off of department store markups.

Here's a website to get you started: www.thethriftshopper.com

Recession Proof Jobs: Financial Advisor

2008-05-03T19:00:00.000-07:00

With baby boomers nearing retirement and the economy in a downturn, the demand for financial advisers is on the rise. The Bureau of Labor Statistics predicts that jobs for financial planners will rise by 41% between 2006 and 2016.

To become a certified financial planner, you need a bachelors degree, 3 years of work experience, and the passing of a 10-hour test.

If you are good with finances, have good people skills, and are looking for a career change, this may be a good place to look.

Its Bargain Time for Car Hunters

2008-05-03T18:47:00.000-07:00

Car sales are expected to be down in 2008. That means you may be able to find a very good deal on an automobile from a dealer desperate to unload inventory. Here are five tips from Marketwatch to help you get a great deal on a new car.

Use the Internet - Use Autobrag.com to find no-haggle pricing at actual dealerships.
Know what you can afford - Loans can be harder to get right now.
Consider older model years - Save money buy purchasing last years model.
Negotiate before incentives - Keep all transactions separate.
Don't cave in to pressure - If you're not getting what you want, walk away.

Save Early and Often

2008-04-20T15:07:00.000-07:00

Walter Updegrave has written a nice article on cnnmoney.com about the secret to financial security. Its a simple suggestion, spend less than you make and invest your savings wisely in a diversified set of assets. Too many people spend more than they make and never generate enough savings to make their money work for them.

The best way to invest your savings is through a work-sponsored 401k plan. You can automatically deduct money from each paycheck, it is a pretax investment, and you will likely receive matching funds from your employer.

Don't over-think your financial planning. It all starts with saving. Once you begin to set money aside, put it in a good place. Don't try to be fancy. Just do some research and select a smart set of diversified assets.

Never Pay ATM Fees

2008-04-19T05:44:00.000-07:00

ATM fees for out-of-network transactions can be outrageous. Transaction fees can be as high as $4, plus an additional fee of $2 charged by your bank for using an out-of-network ATM. That means if you are getting $100 in cash, you are paying around 5% in fees to have access to your own money.

If you are traveling, it can be difficult to find an ATM location that is in your bank's network. However, there is a solution to this problem. Some online banks such as Etrade bank or Schwab bank, will refund all of your ATM fees any time you pull out cash from any bank. Furthermore, they won't charge you for using another bank. The result is that you can get cash anywhere without being charged (there may be a limit to the number of free transactions per month).

If you are reluctant to close your bank account and switch to one of these banks, then don't. Simply open 2 accounts at the same time. Transfer a little bit of money to your online bank and then pull out cash for free when you need it. Its a great option that can save you lots of wasted money on ATM fees.

Don't Forget To Run Your Free Credit Report

2008-04-01T07:29:00.000-07:00

Your credit score has become an important factor in determining your ability to get loans and even land a new job. Its important to check your credit score at least once a year to make sure that there are no errors and to identify problems. You can do that for free with each of the 3 credit bureau's at Annualcreditreport.com

Although you can check your credit report here, you will need to pay extra to get your score. It is a good idea to check your credit score before your apply for credit or even a job. If it is low, check you credit report to identify what may be causing the problem. Depending on the lender, a score of 680 or higher may be needed to get a competitive rate on a mortgage. With the recent credit crisis, lending standards have tightened.

Here are the 5 factors that make up your credit score.

Payment history - 35%
Amounts owed - 30%
Length of credit history - 15%
New credit - 10%
Types of credit - 10%

Dinner By Design - Cheaper than Eating Out?

2008-03-31T06:27:00.000-07:00

There is a new trend in food service developing that assists you with much of the work involved in preparing a home cooked meal. I've been keeping an eye on this trend and trying to decide whether or not it provides a financial savings. I'm beginning to think that it does. One franchise that appears to be growing in the mid-west is Dinner By Design.

Here's how it works. Each month Dinner by Design presents about 15 recipes. They do all of the shopping and gather all of the necessary ingredients. Then, you show up and put together all of the necessary ingredients for 12 family size meals (4-6 servings). It takes about two hours to prepare and package 12 meals. The meals are designed to be stored in the freezer. Each week, you take out the meals that you need for the week and put them in the refrigerator. Then when you get home in the evening, your meals are ready to bake and eat.

The average cost per serving is around $3-$5, which is cheaper than fast food, and healthier. And if you have any special requirements you can leave certain ingredients out when you are preparing them. Also, for an additional $50, the staff at dinner by design will even prepare all of the meals for you.

What does this save you.........time, and maybe even some money. It is clearly less expensive than eating out every night. And if you cook at home a lot, you know how much energy it can consume to find recipes, plan a menu, go to the grocery, organize and prepare the ingredients, and prepare the meal. Clearly, Dinner by Design offers a more streamlined and efficient process at a very reasonable cost. And all reports say that the quality of the food is good.

I think I just sold myself on the idea.

15 Ways to Lower Your Bills

2008-02-26T12:12:00.000-08:00

Every now and then it is important to go through your finances and examine all of your regular bills and expenses. Look at everything you spend money on each month and ask yourself 2 questions.

Is this something I need?
Is there anyway to lower this expense?

I'll give you an example. I recently began evaluating my phone service at the house. I pay for 2 cellphones and 1 home phone. I applied the 2 questions above and decided that I no longer needed a home phone. I got rid of the expense completely by lowering the service.

Here are some other ideas:

Lower your cable bill by switching to a lower level of service or canceling pay-movie channels.
Cancel your cable and watch your shows over the Internet for free. Many networks now offer streams of their shows free on their websites.
Make sure you have chosen the most efficient cellphone plan for your lifestyle. Don't buy too many minutes and don't go over the minutes allowed by your plan.
Cancel your home phone and switch to Skype.
Call your Internet provider and switch to a lower speed.
Turn down your thermostat in the Winter.
Turn off lights and computers when they are not in use.
Cook more food at home and eat out less.
Stop renting movies and switch to Netflix. You pay 1 monthly fee instead of $4 per movie.
Skip Netflix and get movies from your local library.
Loan books from your local library and read more in your leisure time.
Get new quotes for your car insurance and consider switching.
Plan your driving trips efficiently so that you save on gas.
Carpool to work with a friend who lives near you.
Make your own coffee and bring it to work - skip Starbucks.

Warren Buffett Is Buying Stocks - Should You Be Too?

2008-02-25T12:22:00.000-08:00

When the market is down, Warren Buffett goes shopping. The Washington Post is reporting that Warren Buffet has bought up large shares of Kraft and Wells Fargo recently. Buffett is looking for good companies that are undervalued, yet has a solid management team and good growth potential.

In a period of recession and decline, people often rush to pull money out of the stock market because the value of the market declines. But some investors feel that this is the best time to buy because equities can be purchased at a lower cost.

What should I do? Stay the course. Keep investing money in my 401k. Keep my eyes on long-term gains and don't get caught up in year-to-year fluctuations in the market. The longer you are in the market with a diverse portfolio, the more stable your overall returns will be. Investors like Warren Buffett have information and resources far beyond the average investor. If you try to copy them, you will most likely be a step behind the whole time.

Ditch the 401K? No Way!

2008-02-22T07:45:00.001-08:00

It is very difficult to beat the advantages that are offered by a 401k plan. Some have argued recently that the taxes charged in a 401k when you withdraw are so high that you are better off avoiding it altogether. Regular investments held for more than a year are taxed at a rate of 15% (the current capital gains tax). 401k investments can be withdrawn without penalty at the age of 59 and 1/2 and are taxed as regular income. This could be 28% or higher.

But does this make 401k's a bad idea. Absolutely not. Here is why:

$10,000 pre-tax dollars invested for 20 years at a rate of 8% will result in a sum of $33,559 after taxes (28% rate).
$10,000 invested outside a 401k is equivalent to $7,200 after-tax dollars invested (28% tax bracket). After a 20 year period years at 8% you will end up with a sum of $28,950.
Most 401k plans offer a matching plan that contributes a certain percentage of money to your account depending on how much you withhold.

The 401k holds up as the better investment even without the matching funds. Add the matching funds and its a no-brainer. If you have a 401k, invest in it before you even consider other investments.

Don't Get Fancy With Your Investing - David F. Swensen

2008-02-19T19:32:00.001-08:00

Don't get fancy with your investing. This is the advice of Yale's top investor David F. Swensen. According to Swensen, individual investors have neither the time nor the resources to try to "beat the market." His advice, stick to index funds and ETF's (exchange traded funds).

Here is Swensen's proposed portfolio for the average individual investor.

30% domestic stocks
15% international stocks
5% emerging market stocks
20% real estate (REIT's)
15% Treasury bonds
15% Treasury inflation protected securities (TIPS)

Swensen advises against trying the beat the market and focuses on long-term gains in tax-advantaged accounts like 401k's or IRA's.

Don't Get Ripped Off By ATM's

2008-02-18T18:17:00.000-08:00

ATM fees can be outrageous. In addition to the ATM charge issued at the machine, your bank may also charge you a couple of bucks for using an "out of network" ATM. The resulting charges can be in excess of $5.00 per cash withdrawal. If you are only taking out $20, you are paying a 25% fee in ATM charges. I would love to earn that kind of interest on my money.

There are 2 ways to solve this problem.

Plan ahead - take enough cash out of your own bank's ATM machine to cover any cash needs that you may have for the next couple of weeks. Don't put yourself in a position where you are forced to use another bank's ATM machine.
Open an account that refunds ATM fees. An Etrade brokerage account will refund you up to 5 ATM fee's per month. An Etrade Checking account will give you unlimited ATM transfers if you maintain a balance over $5,000. Plus, Etrade will never charge you for using another bank's ATM.

These fees can quickly add up. Do not pay them under any circumstance. Its the equivalent of throwing away money and it can be easily avoided if you take the right steps.

Avoid the 99-cent Recession Menu.

2008-02-13T04:53:00.000-08:00

Apparently the fast food restaurants are picking up on the recession scare by offering expanded 99-cent menus. Both Wendy's and Burger King have recently added the double cheeseburger to the $.99 menu. Taco Bell has added the Gordita Supreme to its 99-cent menu as well.

While this is a great value in terms of the amount of food for the money, you also need to factor in the long-term health costs of eating a double-cheeseburger everyday. In the end, paying only $.99 now may cost you much more in the future.

My recommendation: use the 99-cent menu as an occasional fill-in but don't abuse it on a daily basis.

It is Time for Your Annual 401K Checkup

2008-02-12T04:42:00.000-08:00

You should make a habit of reviewing your 401K once a year. Remember, a 401K is a long-term investment vehicle. Your goal is not to "beat the market" in the short-term. However, annual tweaking can be beneficial in the long-term. Here are some tips from The Street for optimizing your 401K.

Be aggressive - From 1926 to 2005, stocks averaged 10.4% vs. 6 % for bonds.
Diversify your portfolio - Some types of stocks rise when others fall. Diversifying can help balance out your 401k and protect against risk. Consider funds such as emerging markets.
Identify Losers and Overlapping funds - If you own a small stock fund, make sure its performing as well as its peers and toss out any losers. Also, make sure that two funds don't overlap (own the same types of stocks).
Coordinate your 401K with your IRA - If you own and IRA and 401k, look at the big picture. Your IRA may give you some investment options that you don't have in your 401K.

Don't Assume that Mortgage Interest Will Reduce Your Taxes

2008-02-07T13:50:00.000-08:00

Mortgage interest will reduce my tax bill. This is one of the biggest myths in home ownership. It is a myth because it is misleading. Mortgage interest is only tax deductible if it exceeds the IRS standard deduction ($5350 for individuals in 2007, $10,700 for married couples that file jointly). If your mortgage interest is significantly below this amount, then you will receive no real tax benefit for that interest.

Typically, two types of mortgage payers fall into this category. If you buy your first home at the end of the year, you may not accumulate enough interest to exceed the standard deduction for the year. Also, if you are many years into your mortgage, your interest payments may decrease to a point where you do not exceed the standard deduction. The size of your mortgage will also factor into this equation. Larger mortgages carry higher interest payments and vice versa. Property taxes, state taxes, and charitable deductions can help boost your tax deduction beyond the standard deduction.

Ultimately, however, the only real benefit your receive is the amount of interest you pay beyond the standard deduction.

Car Maintenance Can Save You Thousands of Dollars

2008-02-05T04:55:00.000-08:00

The Car Care Council has released a study claiming that the bill for accidents related to unperformed vehicle maintenance tops $2 billion a year. Beyond the risk of accident, unperformed maintenance can reduce your cars lifespan. They recommend that you follow these steps to maintain a healthy car.

Regular Oil Change
Rotate Tires and Check Air
Replace Timing Belt
Annual Brake Checkup
Replace the PVC regularly
Change Spark Plugs and Filters

A Car is one of life's big expenses and its important to manage your transportation expenses effectively. That means getting maximum value out of your vehicle purchases.

Dump that ARM in a Hurry!

2008-02-03T04:59:00.000-08:00

If your still holding an ARM mortgage, this is a great time to get rid of it. Bankrate shows an average 30 year fixed mortgage rate of 5.47%. If your ARM is adjusting in the near future, I would take this opportunity to refinance and lock in a very good rate. In my opinion, ARM's are risky business. If your rate adjusts to a level you can't afford and your house won't sell, then you are flirting with foreclosure. My advice, play it safe with your home and take financial risks elsewhere.

The only problem with refinancing right now is that you will need a good credit score to qualify. Lending standards have tightened and it may be more difficult to secure a loan than it was in the past. Run a credit report and look for anything that may be lowering your credit score. Pay off anything late and clean up what you can before applying for financing.

How Much Money Do You Save Each Year?

2008-01-30T06:38:00.000-08:00

The personal savings rate in the United States is dropping like a rock. Americans saved over 11% of disposable income in the 80's, 6.4% in the 90's, and .4% since 2000. This is an atrocious savings rate. In plain terms, nearly every dollar that is earned is being spent by Americans, leaving very little, if any, room for error.

If you aren't currently saving money, there are 2 simple ways to change this. Make more or spend less. In fact, if you can do both, you'll be in even better shape. If for no other reason, savings can be key in helping you avert financial disaster. This is especially true now with a recession looming and the housing market tanking. In Ohio, 1 in 50 homes are in foreclosure. I would venture to guess that many of theses families have little to no savings.

Other reasons for saving money:

Earn interest - make money off of your money.
Avoid paying interest - Having money saved can help you avoid loaning money for things like an automobile.
Peace of Mind - Living on the edge financially can be very destructive.
Avoid credit card debt - Credit card interest can be extremely expensive. Having an emergency savings gives you another option.

Take a close look at what you are spending on a monthly basis verses your monthly income. You should save at least 10% of this. If you are not, its time to start making some cuts.

Tax Deductions - Don't Leave Money on the Table

2008-01-29T13:01:00.000-08:00

If you do your own taxes, sometimes there is a temptation to just "get it done." But if you take a little extra time and do some research, you can potentially save yourself a lot of money on taxes that you do not really owe. Here are some deductions to look for.

$250 educators expenses for teachers.
College tution - Check out the Hope credit and Lifetime Learning credit. If you don't qualify for these, you may be able to deduct up to $4000.
Out of pocket charitable contributions.
State tax paid last spring.
Child Care Credit

Check out the Yahoo finance article for more info.

Work at Home Careers: Blogging for Money

2008-01-28T13:20:00.000-08:00

Earlier I posted about the low success rate of entrepreneurs. Most ventures fail and most entrepreneurs make less than they would have made working for someone else. Here is another reality check about blogging for money from a very successful blogger, Darren Rowse of Pro Blogger.

Darren spells out 5 truths of professional blogging:

A long-term effort
Luck
Lots of work
Not much money is made by most people
Its hard.

Does this mean you should kill your entrepreneurial dreams? No. But smart, long-term financial decisions are a safer bet to ensure future wealth. Its a classic example of the tortoise and the hare. Stay steady, work hard, and make smart decisions for the long-term.

Don't Buy Another Car without Reading This!

2008-01-28T11:08:00.000-08:00

Cars are a massive expense for most Americans, and I believe that most people mismanage this expense (translation: people spend way too much money on cars). There are lots of reasons for this. For many people, cars communicate a message about an individual. They are a fashion statement and a status symbol. Most CEO's don't drive old junkers because it communicates the wrong message.

However, at its essence, a car is simply transportation. Its easy to get caught up in the marketing, but overall, the priority for most people should be to buy something that is safe, reliable and practical. And if you can avoid getting caught up in the marketing, you can save yourself a ton of money and still drive a nice car.

Many people would argue that used cars offer the best value because you avoid the first couple of years of depreciation. However, if you must buy a new car, there are many cars out there that offer a great value for under $15,000. My choice would be the Honda Fit because it is both reliable and versatile.

Before you spend loads of money on your next vehicle, ask yourself this, "Do I really need this much vehicle?" Don't buy a truck if you only haul stuff once a year. You can rent or borrow a truck for those occasions. Don't buy a car with 300HP to drive to work everyday. Buy a car for how you drive it 99% of the time, not 1% of the time.

Get up to $2,000 back on your Taxes

2008-01-28T06:38:00.000-08:00

If you've taken post-secondary education classes to improve your job skills, you may be eligible for a tax credit of up to $2,000 (20% of your tuition up to $10,000). Even if you only take one class to improve your job skills, you can claim the lifetime learning credit on your taxes. Its a great opportunity for those looking to boost their job skills and build their career. When you consider the cost of taking classes, keep this credit in mind.

Still Want to be an Entrepreneur?

2008-01-27T15:51:00.000-08:00

Scott Shane, professor of entrepreneurial studies at Case Western University, has written a new book that seeks to dispel the romantic notion of being an entrepreneur. Shane claims that the average new venture will fail within 5 years and that entrepreneurs typically make 35% less than they would working for someone else after 10 years. Only the top 10% of entrepreneurs make more than those working for others?

Does this mean that you should keep your job? From a purely numbers based standpoint, the odds for you are better. Play it smart and make good financial decisions and you should have a long and happy financial life. However, risk takers are essential to a capitalist economy. If you are a true entrepreneur and you believe in what you are doing, this study probably will not sway you from your mission.

Tax Rebate Calculator: Find Out How Much You May Get

2008-01-27T15:38:00.000-08:00

This is a pretty simple little tax rebate calculator that tells you how much to expect from the recently agreed upon economic stimulus plan. Remember, this is not a signed bill yet so don't spend it. The rebate checks could arrive in May so spend the next few months planning how you are going to invest this money.

Need A Job: Head to the Ship Yard

2008-01-27T14:59:00.000-08:00

The shipbuilding business is currently experiencing a boom that has led to a shortage of workers needed to assembly and weld ships. An industry that was in decline for a number of years has begun to grow due to increased demand in new ships. As a result, shipbuilders are searching around the globe for experienced workers. A top welder at Erie Shipbuilding earns $18.50 an hour.

Don't Spend Your Economic Stimulus Money

2008-01-25T11:13:00.000-08:00

Many of you have probably heard the news that a tentative agreement was reached between the White House and the House of Representatives on an economic stimulus plan that would pay individuals $600, couples $1,200, and $300 per child. But you'd be wise not to spend that money.

First of all, the deal is still tentative and must be passed into law by the Senate. The money is not guaranteed yet. Secondly, its a great opportunity to provide a boost to your IRA or an emergency savings account. If you haven't started an IRA yet, $1,200 is a great start. Etrade offers dozens of no-load, no transaction fee mutual funds to pick from.

Its tempting to take unexpected funds to use for something fun, but you'll do yourself a big favor by boosting you savings and building your equity.

Is Your Job Recession Proof?

2008-01-24T08:07:00.000-08:00

A recession often leads to either job cuts or slow job growth in many industries. However, there are some industries that are currently viewed as recession proof for various reasons. These include education, healthcare, security, energy, and international business.

If you are in these industires already, you may not have much to worry about if recession hits. Job seekers may want to look in these areas as a career opportunity. Maybe you already have some of the necessary training to get started in a career like education. If you job search has hit a wall, take a look in these areas.

What to Do in a Recession? (Part 2) Refinance

2008-01-23T11:45:00.000-08:00

Mortgage rates have dropped to their lowest point since 2005, closing last week at 5.87%. If you are running with a higher rate, refinancing could be a way to boost your cash flow during a recession. However, lending practices have tightened and it may be more difficult to qualify for this loan than in the past.

On another note, if you do not yet own a home, this is probably the perfect time to buy. Not only are interest rates low, but home prices are also falling. Just make sure not buy too much house, otherwise you could put yourself in a situation of financial crisis.

What to Do in a Recession?

2008-01-22T11:31:00.000-08:00

Panic. Thats the first thing most people do when the economy starts to turn bad. Its difficult to watch all of your investments lose value. However, its too difficult to try and "play" the market in times like this. Case in point: the DOW dropped 465 points today when the market opened. At the end of the day its only down 85 points. If you were to sell at the bottom you would have missed the upswing that took place immediately thereafter. Its just too difficult to time. You may win some, but you'll lose too.

The best strategy is to maintain a balanced long-term portfolio that is diverse enough to handle the downswings and take advantage of the upswings. In the meantime, prepare yourself for the possibility of a recession fueled layoff. This means stocking up on savings and securing a backup line of credit in case of an emergency. Put your savings in a short-term CD or high interest savings account and stock away 3-6 months of emergency funds.

Try a Dividend Fund for Short-Term Savings

2008-01-13T05:37:00.000-08:00

Over the past couple of years, it has been easy to find a high-yield savings account or CD that returned a yield greater than 5.0% annually. However, those percentage yields have begun to drop over the past few months and may continue to drop.

Dividend stocks and funds may provide an alternative to CD's and savings accounts. Bank of America stock pays around 6.6% annually. Duke Realty pays around 8.7% annually. These payouts are significantly better than the 4-5% yields provided by CD's and savings accounts.

However, keep in mind that the value of your equity is at greater risk. CD's and savings accounts carry virtually no risk to the value of your equity. Stocks and funds can lose value so make sure to do your research before plunging in and be prepared for the potential consequences. On the flip side, you can also gain equity making your overall investment potential more valuable.

5 Financial New Year's Resolutions

2007-12-27T06:17:00.000-08:00

Sometimes getting ahead financially means taking care of the little things. Do you spend your raise or save it? Do you shop for food efficiently? Do you avoid interest by paying off your credit card each month?

New Years day is a good time to try and change some bad financial habits and right your ship. Here are a few ideas for some financial New Years resolutions.

Pay off your credit cards.....completely.
Increase the amount of money you put in your 401k by 1%.
Pay $100 extra a month on your mortgage.
Set aside every penny of your annual raise for savings.
Eat out 1 less night a week.

Business Start-Ups: Play it Safe

2007-09-07T10:32:00.000-07:00

I was watching a house flipping show on T.V. the other weekend, and the show really caught my attention. Call me a pessimist, but when the show was giving background information on the first-time house flipper, I cringed; he had quit his computer programming job to become a house flipper. The old saying, "if is sounds to good to be true then it probably is" came to mind. Or, how about, "nothing is for free." While those sayings are cliche, they are pretty much true.

So, I had to watch the entire episode to see if this new house flipper would come out ahead. In the end, he went over budget, didn't make nearly what he was expecting, and was feeling the heat to get a job--quick!

This brings us to the common sense principal: when starting a new business hold on to your current salary, health benefits, etc. as long as possible before going out on your own. Most successful small business ventures are launched while the entrepreneur is still working 40 plus hours a week at their day job. Take the tough route, and you'll come out ahead.

Microsoft Money Plus Releases with New Features

2007-09-07T10:09:00.000-07:00

A great financial software tool can be a huge advantage in your quest to build personal equity. One program I've always liked is Microsoft Money. The new version has some added features to help you get even greater control of your finances. These features are as follows.

Insights - Bill insights let you know when bills are due or overdue. Spending insights help you keep track of spending by category. Cash flow insights give you a quick view of account balances as well as spending and deposits.
Link to scanned check images or receipts right inside of Microsoft Money.
Enhanced background banking - This can be a great time saver. Download bank transactions directly into money.
Better information on the financial markets available within Microsoft Money.

How To Borrow Money from a Friend or Family Member So Both Parties Benefit

2007-09-07T08:02:00.000-07:00

If you want to borrow money from a relative or a friend then organizations such as CircleLending can provide structure and support for your borrowing activities. CircleLending claims that through their services both parties interest and emotional concerns are protected.

If your aging parents are house poor but cash rich, CircleLending can provide a formal agreement between parents and their children that provides parents with income without using the traditional reverse mortgage. This financing option is called "Family Advantage" and it allows family and friends--instead of bankers--to lend money. Family Advantage is just that, it gives the financial advantage to the family instead of a lending institution by keeping costs lower by thousand of dollars and by keeping the house in the family.

So, if you are looking to fund a personal expense, start a business, or avoid a reverse mortgage then you will want to consider lending services like CircleLending before signing a contract with an independent institution outside of your circle of friends and family.

Three Things You Can Do to Minimize Your College Costs

2007-09-07T06:36:00.000-07:00

Attending a learning institution after high school is expensive, but there are a few things you can do to minimize your spending and debt accumulation.

Limit your Credit Card Risk
If you are sending your child to college, beat the credit card advertisers that will hound your student. Find a credit card with a low credit limit ($1,000) and a low interest rate. Discuss the problems of credit cards with your child, and agree that he or she will not pick up another credit card while they are away.

Double Major
While your student will be extra busy, double majoring will broaden his or her career opportunities after school. Double majoring is especially recommended if you student wants to major in something like English, Art, or Philosophy. While these majors are satisfying and will develop your child in ways that other majors cannot, they do not pay the bills. In our highly competitive world, it is smart to double major with a more technical degree that your child will be able to earn a living with. Best of all, there is minimal expense associated with double majoring. So, you get more bang for your buck.

Used Books and Online Retailers
On average, freshman spend roughly $900 on textbooks. While the college bookstore may offer used books at a discount, your child will probably find their best deal online. Many local bookstores are happy to match the prices online, in order to retain the business.

Young People: Max Out Your 401k

2007-09-06T09:50:00.001-07:00

When you are young there are a million other things you would rather spend your money on than your retirement. Many people do not properly plan for retirement, and when they do start (late in life) they must contribute much more in an attempt to make up for previous years.

While it is difficult to start saving for retirement when you are in your 20s, it is one of the smartest things you can do for yourself. Set up a direct withdraw from your pay check. A direct withdraw will decrease your taxable salary and it will prevent you from spending the money.

Should you rent your house?

2007-09-05T17:33:00.000-07:00

The number of homes for sale is three times the number in 2004.

Because it is harder to obtain a mortgage than it was a few years ago, there are less buyers. Less buyers and more sellers indicates that it is a buyers market--not a sellers market.

So, if you are considering renting your home instead of selling it, there are a few things that you need to consider before you become a landlord.

- Can you charge enough in rent to cover your costs?

Costs Include: mortgages, taxes, increase in homeowners policy, liability insurance,
lag time between renters, unexpected maintenance.

-If you have to rely upon equity built in your house to purchase your new home then renting your old home may not be a good solution for you. This is because home equity interest rates are rising. Thus, borrowing against your equity is more expensive making it even harder to break even.

-Capital gains taxes could place a big dent in your profits when it's time to sell the home. If you rent your home for three years or more, you will need to pay capital gains taxes on your profits.

-Do you have the time, expertise, and energy to be a landlord who fixes problems, collects past due payments, or handles other difficult problems in conjunction with you other
daily tasks.

If you think your neighborhood's value will explode in the next few years, you will still want to assess the above mentioned points before you start renting. You want to make sure that in the end you will come out ahead. If you do not think you will be better off in the future then you are now, you may want to sell. It is better to take a little loss now than it is to put yourself in harms way.

Save $31,000 by Driving Your Car to Death

2007-09-05T12:42:00.000-07:00

We are a car culture. There is no way around it. However, this is an extremely expensive addiction for the average family, and one that can cost you huge amounts of money.

Consumer Reports did a recent study that suggests you can save as much as $31,000 by driving a car for 15 years or 225,000 miles. This is compared to trading in a car every 5 years, which is the average rate of time for a trade in.

There are many reliable vehicles that can reach this level easily these days. Consumer reports recommends following the regular maintenance schedule and buying vehicles that rate high in safety in order to help get the most out of your vehicle.

It Takes Money to Make Money

2007-09-01T07:30:00.000-07:00

We've all heard the expression "it takes money to make money." In the world of small business, this is typically true. Yet, this puts most people who want to make money in an awkward position: if you don't have any money then how can you make money?

If you want to build your own personal equity, typically the best way to do this is through a small successful business venture . Owning a small successful business is much more lucrative than not owning a business, or working for a successful business. You can set your own salary, for one thing, and pay for "business expenses" that were at one time only personal expenses i.e., expenses paid out after taxes vs. expenses paid prior to business taxes. It is a sure thing, that if your company succeeds then you will see your personal net worth explode and grow at only a rate that is unique to business owners.

In order to purchase an existing business or start a new business, the company will need capital to finance its operations. Small businesses are financed with either debt financing, equity financing, or both debt and equity financing.

Debt financing is some form of a loan: a bank loan, a line of credit, an IOU. If you have a good credit score, and you are not over burdened with personal debt, then typically it is fairly easy to secure a bank loan. One positive thing about debt financing is that the borrower retains complete control over his or her business because all of the equity in the company belongs to the borrower. Therefore, the business owner--as long as he or she meets the debt obligation--retains complete control over the company.

Debt financing can be difficult and inflexible. For example, if the company is cash strapped for one month but expects a flood of cash the following month the business must still meet its monthly debt obligations. That is to say, debt financing is inflexible in the face of cash flow variance.

Equity financing is different from debt financing in that investors give the company money, they invest in the company, but in return the financiers are given a proportion of company ownership. This form of financing is typically more flexible than the debt financing at first, but eventually it can lead to its own complications. For example, different equity owners may have differing views about how the company should operate. Similarly, some equity owners may eventually want to liquidate their position before other equity owners are willing to sell.

In reality, many small businesses are financed through both equity financing and debt financing, and if you can find the right combination for your small business you have the opportunity to significantly increase you personal net worth.

Financial Planning Retirement Calculators

2007-08-30T11:29:00.000-07:00

The web is full of high-quality, free financial planning retirement calculators and there is no good reason not to take advantage of them as financial planing tools. Here is a list of some great financial planning calculators that I have found on the web. I will update this post as I continue to find more.

Financial Planning Calculator Retirement Links

Motley Fool - Includes a great calculator that estimates how much your monthly expenses will change after retirement. Also includes the following calculators:

How will retirement affect my expenses?
Am I saving enough? What can I change?
How will this account be used?
What will I earn with this account?
How advantageous is increasing my savings?
Which savings or income source will be the largest?
How much can I invest before taxes each year?
What if I underestimate my expenses?
What will my income be after I retire?
What will my expenses be after I retire?
What happens if tax laws change?
How much of an effect can inflation have?
Which savings should be used first?
How much will Social Security provide?
What if Social Security no longer exists?

Yahoo Finance - Includes a nice current cash flow calculator plus the following:

How much will I need to save for retirement?
When should I begin saving for retirement?
What is my current cash flow?
What is my projected cash flow?
What may my 401(k) be worth?
Self-employment Retirement Plan Maximum Contribution calculator
How much can I contribute to my IRA?
Should I convert to a Roth IRA?
Social Security retirement income estimator
What is the impact of increasing my 401(k) contribution?
How will retirement impact my living expenses?
Income generated by a savings plan
Value of reducing or foregoing expenses
How does inflation impact my retirement income needs?
How should I allocate my assets?
What is my current net worth?
What is my projected net worth?

Kiplinger Find out how much your 401K will grow and how much income Social Security will provide.

How much will my 401(k) grow?
Am I saving enough for retirement?
The power of boosting 401(k)
Which will provide the most retirement income?
How much income will Social Security provide?
What is my minimum required IRA distribution?

Money Central on MSN - Provides a fairly simple retirement calculator.

Top Cities for Saving Money

2007-08-30T10:24:00.000-07:00

A recent article from Kiplinger.com suggests that the city or region of the country that you live in can make a big difference on whether or not you are able to save for retirement. Although income levels are higher on the east and west coasts, so is the cost of living. Furthermore, the increase in wages are not enough to cover the proportionally higher costs of living in these areas.

Unless you are making a huge income, you are probably better of relocating to an area with a much lower cost of living. You may trade in some of the ambiance of coastal living, but you will reap huge benefits in savings and quality of life. In fact, if you save prudently, you should be able to afford to move back to the coast later in life and maintain a high standard of living.

Check out these recommended places.

Top five cities for young professionals:

* Washington, D.C.
* Denver
* Austin, Tex.
* Raleigh, N.C.
* Lexington, Ky.

Top five cities for young families:

* Atlanta, Ga.
* Minneapolis/St. Paul, Minn.
* Des Moines, Iowa
* Provo, Utah
* Green Bay, Wis.

What is the Best Personal Finance Budgeting Method?

2007-08-29T20:19:00.000-07:00

Home budgeting is an essential part of managing your personal finances. There are many different methods, but what is the best personal finance budgeting method? That depends on both personal preference and skill level. A paper and pencil budget is better than no budget at all. However, if you take the time to learn a personal finance software like Quicken and Microsoft Money, you can save yourself a lot of time and access powerful tools for taking control of your finances.

Personal finance software allows you to track all of your spending by category and analyze where your money goes each month. You can set up budget categories for all of your expenses and get automatic notifications when you are in danger of exceeding your budget categories. Furthermore, you can easily look back at your spending over a long period of time to examine spending trends and find areas of improvement.

Best of all, the software performs all of these tasks for you, saving you valuable time that you can use to build equity in other areas..........or just have some fun. I encourage you to try out one of these programs today and take your personal finance budgeting to the next level.

Financial Planning for Individuals Living Alone

2007-08-27T13:21:00.000-07:00

If you are an individual living alone, financial planning presents some unique challenges. Currently, 19% of men and 40% of women over 65 live alone.

Having a partner to retire with is clearly an advantage. The cost of one person living alone is more than half the cost of two people who live together. Therefore it is important to begin planning as early as possible. Since an individual living alone often does not have a spouse to discuss financial decisions with, it can be useful to have a financial planner planning retirement with you.

Health care concerns are also unique for individuals living alone late in life because it may be more difficult to find someone to take care of you. It is important to have the proper insurance coverage that will cover you if you become incapacitated late in life and need special care.

Finally, premiums and POA need to be considered. Make sure to get the proper coverage years before you retirement when the costs are still reasonable. Also, it is important to give someone power of attorney who can make important financial and health decisions for you if you are incapacitated.

Edmunds.com Lowest True Cost to Own Vehicles

2007-08-26T16:32:00.000-07:00

Cars are one of the largest expenses of many people living in the United States. Therefore, spending less money on reliable transportation is a great way to contribute to the growth of your overall equity. Edmunds.com maintains a list of the lowest "true cost to own" vehicles currently available in the marketplace. Edmunds.com calculates the true cost of vehicle ownership using the following factors: depreciation, maintenance, repairs, insurance, financing, taxes, and fuel.

Here are a few of the cars currently on the list.

Honda Fit
Toyota Prius
Toyota Avalon
Ford Focus
Kia Rio
Toyota Yaris
Honda Accord
Chevrolet Colorado
Honda Element
Ford Escape Hybrid

6 Figure Jobs - SAP Managing Consultants

2007-08-25T07:08:00.000-07:00

One of the best ways to build equity is to make more money. And one of the best jobs right now in terms of high demand and high pay is an SAP professional. According to TheLaddders.com, the growth is due to an increase in ERP investments by large companies, and SAP is one of the biggest vendors. Not all technology jobs are being outsourced as jobs for india or jobs for pakistani. Many of these SAP positions have their strongest demand in the Mid-Atlantic and Midwest. The jobs require a lot of traveling, but six-figure incomes are common.

If you have a computer background, additional SAP training may be a great way to launch yourself in to a lucrative new career and improve your ability to build equity.

Does Dave Ramsey Go Too Far?

2007-08-24T20:23:00.000-07:00

I lived in Nashville for a brief period and while I was down there, I listened frequently to the Dave Ramsey Radio program. For those of you who aren't familiar with Dave Ramsey, he is a personal finance adviser who preaches about debt free living. He also teaches personal finance in classes and online at his website through the financial peace university.

I am not one of the biggest dave ramsey critics by any means. Ramsey clearly makes a good living off of people in financial trouble, but I really believe that he helps a lot of those people in the process.

But I also believe that Dave Ramsey's message, although sound, is geared toward a specific type of person with lots of debt and very little financial training.

Debt is not completely evil.......it is how you use debt that is important. Every successful business in American relies on some level of debt to survive and grow. It is one of the key elements of capitalism. Without debt and risk, there is very little growth.

I think Dave Ramsey has a good message for people who use debt poorly and become trapped inside of it. However, in order to reach an even higher financial position, it is important to accept debt and understand how to use it as a tool for growth and innovation.

Housing Prices are Down but it is More Expensive to Borrow Money

2007-08-24T11:46:00.000-07:00

It is becoming increasingly difficult in the current housing market to find good mortgage rates. For example, if you apply for a wells fargo home equity loan with bad credit, you will have a much harder time getting a good mortgage rate now than even a few months ago. Wells Fargo recently raised rates on a 30-year jumbo fixed rate mortgage from 6 7/8% to 8% overnight. In many larger markets, this is the price of an average home.

Although housing prices are down, the potential for rising interest rates could ultimately take away any potential savings. It appears as though it may be quite some time before the housing market recovers to a state of normalcy. For many people, the best plan may be to sit tight and ride it out.

How to Get a Low Interest Rate on a Car Loan

2007-08-23T16:02:00.001-07:00

Yahoo Finance is currently running a story claiming that 12 percent of all new car buyers are paying cash rather than taking out a loan. This is up from 8 percent in previous years.

Ultimately, this is resulting in better deals for the consumer at the dealership. Car dealerships typically earn a commission on financing packages that they sell. If a buyer pays with cash, or arrives with prearranged financing then the dealer makes a lower profit.

A smart car buyer can turn this current trend into an advantage by either avoiding interest rates, or using it as leverage to negotiate a lower financing rate at the dealership. If you can negotiate a financing deal of 3% or less, then you can keep your money invested yourself and earn an interest rate that is significantly higher than what you are paying to the dealership. In the end, you wind up on top.

Arrive at the dealership with the intent of paying with cash, but be open minded if you are offered an interest rate that is too good to refuse.

Don't Waste Money on a Car

2007-08-22T19:55:00.000-07:00

If you are a person who buys a new car every three years, then you need to know that you are wasting a ton of money. Its common knowledge that cars depreciate in value as soon as they are driven off the lot. If you've taken out a big loan, then you may even owe more than what the car is worth after a couple of years. Buying new cars regularly does not help you build equity.

Here are a few tips:

Resist the urge for a fancy new car......they are fun, but unless you are completely loaded, you can't afford it. The newness feeling can wear off quickly and ultimately leave you feeling bad about having to make a big monthly car payment.

Buy used cars.........cars have become much more reliable in recent years. Let someone else take the initial hit in depreciation and then buy a reliable used car at a great value. Enterprise car rental supplies a nice quality used rental car at affordable "no-haggle" prices. You can even browse these cars online. Or, use an online service like autotrader.

Repairs aren't as bad as you may think.........no one wants to get their car repaired, but sometimes you have no choice. But don't let a costly repair talk you into buying a new car. You'll almost always save more money in the long run by having a repair done and driving your car for a couple more years.

The more you can squeeze out of every car you buy, the more equity you will build long term. There is nothing wrong with simply driving a safe, quality, reliable, automobile for at least 10 years.

Retirement Tools: Jumbo Reverse Mortgage

2007-08-22T12:23:00.000-07:00

A friend of mine in Massachusetts was recently talking about retirement and was considering a jumbo reverse mortgage (refinance mortgage) as a way to fund his retirement. A jumbo reverse mortgage is geared towards homes valued over $500,000 and is a a loan against the equity in the home that provides tax-free cash advances. The loan is not due until the buyer no longer lives in the home for their primary residence or passes away.

A jumbo reverse mortgage is useful because in addition to providing a cash flow, it also can serve as an estate tax tool by reducing the overall value of an estate through the use of a trust.

If you have a home of this value, it may benefit you to do further research.

Good Debt vs. Bad Debt

2007-04-17T08:28:00.000-07:00

Debt plays a big role in personal finance in the United States. But if its not used correctly it can lead to personal financial disaster. Some financial advisers suggest avoiding debt completely and proclaim it to be evil. However, if you are smart about debt it can actually help you increase your wealth.

Here are some of the differences between good debt and bad debt.

Good Debt:

Used to buy things that can increase your net worth (real estate, a small business)
Frees up your cash every month to invest in high interest savings accounts (as long as you pay off your entire balance each month and do not pay interest charges).
Rewards each of your transactions with points or cash back
Used to pay for education that increases your earning potential (student loan for a law degree).

Bad Debt:

Decreases the value of your net worth.
Eats up your monthly cash flow with interest charges.
Used to purchase depreciating items that you can't currently afford (computers, cars, clothes, dining out, vacations).

If you are using a credit card on a regular basis, you need to make sure that you have cash to back up every dollar that you spend on a credit card. Remember, you are using the card as a tool to build equity, not to purchase things that you can't afford.

401K vs. Extra Mortgage Payment

2007-04-16T10:17:00.000-07:00

If you find yourself with some excess income these days, you may be wondering whether you should put more money into your 401K or pay off your home mortgage faster.

Which is better?

From a purely financial perspective, if you have a low, fixed mortgage rate you are better off putting money into your 401K account. There are 2 reasons for this:

Any extra money you put into your house will have already been taxed. That means that your money has already lost 20% of its value before you are able to use it to pay down your mortgage. 401K contributions are pre-tax, meaning the money goes into your 401k account before any taxes are removed from your paycheck.
Your 401K will likely earn more than what you pay in interest on your house. Let's say your mortgage rate is 6%. Even at a conservative 8%, your 401k will out-earn what you pay in interest by 2%.

However, this doesn't necessarily mean its a bad idea to pay off your house early. You will most likely still save thousands of dollars in interest payments. Moreover, you will eliminate a high monthly debt responsibility. This is a nice scenario if you happen to find yourself without a job for an extended period.

Although both scenarios make financial sense, putting extra money into your 401k will probably give you the most bang for your buck.

Stay Away from Tax Refunds!

2007-04-15T06:31:00.000-07:00

April 17th is tax day this year. But if you're getting a refund then you've been giving away money.

Although getting a check for $1000 in April from the IRS may feel pretty good, its nothing more than the IRS paying you back for a zero interest loan that you've given them all year. You're much better off keeping that money yourself and placing it in a high interest savings account.

Always charge someone to use your money!!

The best situation is to finish the year owing the IRS a small amount of money. If you don't withhold enough money during the year, you may be subject to IRS penalties, so be careful not to underpay too much.

If you manage your money well, its actually better to owe the IRS a little bit of money than to get a big refund.

Top 5 Cash Back Credit Cards

2007-04-11T09:40:00.000-07:00

If you have the discipline to pay off your entire credit card balance every month, cash back credit cards are a great way to get the most out of your money. You earn a percentage of every dollar you spend in the form of a cash payment. Plus, you can keep your own cash in a high interest savings account until your credit card bill is due.

Here are the top 5 cash back credit cards:

Emigrant Direct - 1.40% cash back Platinum MasterCard
American Express One - 1% deposited monthly into a high interest savings account.
Chase Freedom Visa - 3% on groceries, gas and quick-service restaurants plus 1% on everything else.
Citi Dividend MasterCard - Earn 2% cash back on purchases at supermarkets, drugstores, gas stations, convenience stores, and utilities including cable, plus 1% on all other purchases
Capitol One No Hassle - 1% cash back on purchases plus 25% annual bonus on cash earned.

Just make sure to pay off those balances or you'll never see a benefit from these cards.

The Dangers of an Adjustable Rate Mortgage

2007-04-10T18:38:00.000-07:00

The rise in mortgage foreclosures received a lot of attention lately in the media. However, anyone with a little financial common sense could have seen this coming years ago. If you keep playing the adjustable rate mortgage game, eventually your going to get caught standing without a chair.

The hook works like this. Your mortgage broker asks if you plan on moving in the next five years. If you answer yes, then your broker will recommend that you get a 5 year ARM. You'll have a lower interest rate for the first five years, and before your mortgage adjust to a higher rate, you will have sold your house for more than you paid and you'll be on to a new mortgage in a new house.

This works great as long as house prices continue to rise. However, if the value of houses begins to fall, as they have been for the past couple of years, then you will most likely end up in a very uncomfortable position. In a worst case scenario, you could end up losing your house.

Many people today are in a lot of trouble because their mortgages have adjusted to a higher interest rate, causing their monthly payments to rise. At the same time, the value of their house has fallen and can't be sold quickly. Some people are in a position where the debt owed on their mortgage is more than the house is worth.

When it comes to your own home, it is almost always wiser to chose a fixed rate mortgage. Although interest rates on fixed rate mortgages can be higher for the first few years, they do not change throughout the life of the loan. If you choose a 30 year mortgage, your monthly payment will be the same for the next 30 years. This allows you to avoid unexpected rises in interest rates and puts you and your family in a more secure position.

5 Reasons Not to Carry Cash

2007-04-09T06:22:00.000-07:00

Do you still go to the bank every Friday to cash your check? If you do, you're probably costing yourself a lot of time and money. These days, nearly everyone accepts credit or debit cards as payment forms. And if you do need cash, there's an ATM on nearly every corner. There's nothing wrong with carrying around a little bit of cash in case of an emergency, but its time to break the habit of keeping a lot of cash in your wallet. Here are 5 reasons why not to carry cash:

You can't earn interest on cash - The cash in your wallet is losing value by the second. Why not keep it in a high interest savings account and make it work for you.
You won't earn any rewards points on purchases - Many credit and debit cards offer points or cash back rewards on all purchases. There's nothing wrong with using other people's money as long as you don't carry a balance and pay interest charges.
Its harder to track your spending - Using cash makes it much more difficult to track your spending and maintain a tight control over your finances. Card companies will allow you to download all of your transactions into a program like Money or Quicken so that you know where your money is going.
Coins get lost - When you use cash, you typically get coins back as change. If you are like most people, you either lose coins in your car or around the house or they pile up in a jar for 3 years losing value.
Security - Lost or stolen cash will likely never be seen again. This is not always the case with credit cards. A lost credit card can easily be canceled and replaced before any unauthorized charges are made. Furthermore, unauthorized transactions on a stolen credit card can be credited back to your account.

Last Year You Gave Away $500!!

2007-04-08T17:24:00.000-07:00

Ever wonder how much money you give away by not putting your money in the right place?

Here's a quick little calculation for you.

Lets say you have $10,000 dollars in savings and you keep it in a standard bank savings account that pays an average of .25% APR. After one year, your investment earned a mere $25.

Now, lets say you keep that same $10,000 savings in a high-interest online savings account that pays 5% APR. In this case, you would have earned an extra $500 at the end of the year. That's a pretty nice sum of money.

If you haven't spent time thinking about where you are keeping your money, now is the time. You can't afford to keep giving money away.

Do You Know Where Your Money Goes?

2007-04-08T15:37:00.000-07:00

Knowing where your money goes is an essential part of successfully managing your personal finances. If you don't track your spending, you have may have no idea where your money is going. Chances are you are probably spending more than you realize on things you may not need.

The best way to track your spending is to start using a software program like Quicken or Microsoft Money. These are inexpensive programs that will run on just about any PC. You will have the option of putting every dollar you spend into categories like food, gasoline, electricity, ....etc. You can set up ledgers for multiple accounts including checking, savings, credit card, and investments.

After a couple of months, you will start to get a better idea of where your money is going. I found that I was spending much more on dining out than I every realized. Changing my habits enabled me to save hundreds of dollars every month.

Do yourself a favor and set up your finances in Quicken or Microsoft Money. You'll gain much more control over your finances and you'll be able to pinpoint areas where you can save money.

Improve your Credit Score and Lower your Auto Premium

2007-04-08T07:23:00.000-07:00

Like it or not, your credit score is becoming an important factor in your personal financial management.

Insurance agencies have been using credit scores to determine whether or not they will insure your Automobile and how much they will charge. A low credit score can lead to higher premiums, even if you have a perfect driving record.

Credit scores can be improved by paying off outstanding debts, paying your bills on time, and reducing the amount of debt you carry. If your credit score improves, be sure to let your auto insurer know and ask for a reduced premium.

Last day to make IRA contributions for 2006

2007-04-08T06:59:00.000-07:00

April 17th is the last day to make IRA contributions for 2006. IRA (Individual Retirement Account) contributions can be a great way to reduce your taxable income and realize a tax savings for the year.

Remember, IRA contributions are not taxed until they are withdrawn during retirement (if you withdraw any money before you are 59 1/2 then you will be subject to an early withdrawal penalty).

For 2006, if you are under 50 you can contribute up to $4,000 annually. People 50 and over can contribute $5000.

IRA's can be opened through any broker. If you are a do-it-yourselfer, you can open an IRA online through Etrade, Fidelity, or Schwab.

Many of these companies offer low-cost, no-load funds for you to invest in.

Top 5 Internet Savings Accounts - 5.00% APR

2007-04-07T20:13:00.000-07:00

Internet savings accounts have become a great way to get the most out of your savings. Many are paying Annual Percentage Rates (APR) of over 5%. If you keep $5000 in the account, you will earn around $20 a month in interest - light years better than a regular bank savings account.

Here are my top 5 internet savings accounts:

AM Trust Direct - APR 5.36%
Etrade - APR 5.05% - No other company offers a suite of products like Etrade.
Emigrant Direct - APR 5.05%
HSBC Direct - APR 5.05% (Pays 6% promotional rate through April 30 for new customers)
Capital One - APR 5%

As always, these rates are subject to change at any time. However, they have been hovering over 5% for over a year now. Enjoy your new money.

5 Steps to Having More Cash Each Month

2007-04-07T12:15:00.000-07:00

Managing your money correctly can make a huge difference in how much cash you have available at the end of each month. If you manage it correctly, you will end up with more money without working any more hours.

Here are five things you can do to make your money work for you:

Contribute to a 401k plan - If your company offers you a 401k match, you are foolish not to take it. Its free money. Many companies will pay you at least 50 cents for every dollar you contribute. Even if you invest all of your 401k money in a money market account, you are still doing better. Furthermore, it lowers your taxable income for the year, meaning you pay less taxes on the money you make.
Open an internet savings account - Its time to get over your fears of internet banking and start raking in the cash. Banks such as Etrade and Emigrant Direct offer no-minimum savings accounts that pay over 5.00% annually. All you need to do is link the savings account to your regular checking account and you can move money back and forth electronically whenever you wish.
Earn cash back or points on your credit card - Many credit cards now offer cash back or rewards points for using their card for purchases. Take advantage of this. Its another way to get free money. Just make sure you pay off your balance each month before you start accumulating interest charges, otherwise you won't reap the benefits of these offers. Furthermore, you can use your new high-interest savings account to earn interest off of the money you've borrowed from your credit card each month.
Sign up for autopay for your monthly bills - Many companies now offer discounts for signing up to automatically pay your bills each month.
Bundle your services - Take advantage of companies that allow you to bundle your phone, television, and internet services onto one bill. You may not be able to work with all of your favorite services providers, but you will save money.

That's it. Stick to these methods and you'll put more money in your pocket every month.