Archive for April, 2009
Wednesday, April 29th, 2009
Yup.
This is one of those articles that should have no place in a financial freedom blog.
Let’s be honest. Who am I kdding?
There’s a reason I haven’t been one of those success stories I constantly read about. You know the one, (The typical Dave Ramsey caller just sending in their last mortgage payment and get to yell “I’M DEBT FREE!!!” with some idiot named Jimbo in the background). I Loathe to become “Jimbo”.
Or do I?
How is it I can hear the background so clearly in their household? And how did they pay off $120K in mortgage debt in five years while only bringing home $60K/year between them? I started thinking about the difference between me and them and quickly realized that the reason that their background is so quiet is because of the absense of kids.
Now, I’m probably an atypical parent that makes jokes about kids being worrisome or being around. Truth is, I’d be lost without them. I have a great nuclear family and couldn’t /wouldn’t ask for anything more out of what the wifey and I have made. Having said that, we currently have 4.7 to be exact (one due in July) so there has to be an end to this madness somewhere right?
RIGHT! On April 10th, 2009. I sat down on the Dr. Teitjan’s slab in Lee’s Summit, MO and did the unthinkable/most femenizing thing a man could do…
I GOT SNIPPED!
Not only did I get snipped. Teitjan had problems finding my left vas deferens and poked and prodded for 20 minutes too long causing post operative complications. It’s not his fault my vas defrens was retracted further than normal so I blame him for nothing. However that doesn’t stop the hemotoma I’ve now developed immediately afterwards because of the complications.
So as I’m typing this article almost 3 weeks to the day later, I have a hard lump the size of a egg in my scrotum. It’s not as bad as it sounds and Teitjan says it should go down after several weeks while the body slowly absorbs it.
Now enough about my castration. Back to Jimbo in the background. Jimbo is able to pay his mortgage down so quickly because he doesn’t have the pleasure of paying for $80/month gymnastic classes, $250 for softball registrations, $640-$1400/month in daycare (when the wife was working), $1000 Christmases, $80 every time a violin string gets severed. I stopped there but that doesn’t include the co-pays and extra money we have to pay for health care costs for the kids.
Sounds like I’m bitching about my predicament with the kids. Trust me, I’m not. I love my life and the challenges that present themselves. The kids keep the wife and I young, entertained, and constantly appreciative.
So while I’d love to have that paid off mortgage in the next five years, I’m going to have to cut back on my intensity towards my goal because our family is evolving at the moment. We’ll eventually get there, but I’ve come to understand that Rome wasn’t built in a day (we’re only 32) and sometimes it’s just not in the cards.
The reason I’m writing this is because even though I can get preachy/demanding towards my goal, I have to realize that my goal is to really be healthy and fit for my kids for as long as I can. I’ve always realized it and have never put the kids or my family second. I just felt I needed to say it loud in case some of you may have forgotten.
Having had this cum-bah-yah moment… we still need to get to work on our secondary goal on becoming debt free so having kids doesn’t let us off the hook.
Posted in Inspirational, Personal debt, Uncategorized, goals, relapses | 2 Comments »
Monday, April 20th, 2009
This is where I’m at…
The wifey wanted to go to HR Block this year to get our taxes done because (in here words) we should be getting more back. We’ve had a 7 year history of getting at least $2k back in refund.
NOT THIS YEAR!
We earned approximately $40k more than last years income. This was do to me getting laid off and immediately finding a job while on severance. basically, there was a 6 month period where I was receiving 2 checks. There was also a 2 month period I was receiving my unemployment benefits (tax- free) while receiving my severance.
Then my wife got laid off with a 4 month severance. She was also receiving unemployment benefits (tax-free). To sum it up, we had $4k+ of unemployment benefits we hadn’t had the taxes taken out on. We also didn’t take out more taxes on the additionally income we made (which put us in another tax bracket).
I guess it’s a nice problem to have as we were really blessed in ‘08 and actually had about $80k more than last year (thanks to “the gift“).
So we’re in HR Block getting our taxes done. To make a long enthusiastic quickly turned downright ugly story short, we owed… $2850 in taxes and $750 in tax preparation fees.:oops:
Yep! $3600 WE OWE instead of getting back. Needless to say the Block lady was quickly rejected when she asked if we’d like to schedule next years appointment.
So here’s what wwere working with for the beginning of ‘09. We have some medical bills to take care of, which shouldn’t be more than $1k (freaking healthcare hustlers). The good news is we’re probably going to take advantage of the cheap travel deals go on a short 3 day family and friends cruise.
We’re expecting our 3rd child and the tattooing business will start to pick up soon. So all in all, if I wasn’t to make a dime outside of the normal paycheck, we wouldn’t have to touch savings until July. Hopefully the tattooing will pickup to where I don’t have to touch it at all.
My plan is to hold everything down until the beginning of ‘10. By that time, we’ll know if the wifey should be a fulltime mom or start seriously looking for employment. Only time will tell.
A side note: The picture is my latest and greatest.
Posted in Generate income, Informational, Personal debt | 1 Comment »
Thursday, April 16th, 2009
By Jeff Schnepper
Refunds: They’re wrong!
It’s hard to get that through to my clients. But refunds are bad.
Sure, it’s exciting to get a check from the Internal Revenue Service. Well, actually, it’s from the Treasury, but you know what I mean. That misses the point, however.
It’s not like you’re gaining anything. That money was always yours. The feds are just giving it back. And that’s the point.
When you get a refund, what that really means is that you’ve given the federal government an interest-free loan. You’re just getting your money back.
In fiscal 2007, 105.9 million Americans received tax-refund checks averaging $2,324 — about the same as the IRS paid out the year before. Either way, when you do the math, that’s a whole lot of interest-free dollars.
An offer you can’t refuse?
People just don’t learn. They want that check from the government. But I can give you the same deal.
I hereby offer to allow anybody reading this to send me money. I’ll take cash, checks, money orders, even food stamps. Send me as much as you want. And I promise — on my word as MSN Money’s tax expert — that I’ll send it back to you on April 15, without interest.
It sounds silly when you put it that way, doesn’t it? But it’s no different than getting a tax refund from the IRS.
Some people argue that refunds are a great way to save money. If they never see the dollars in their checks, it’s easier to put aside money for, say, that big-screen plasma TV they’ve been drooling over.
Open your eyes, financial fool! That’s what payroll savings deductions are designed to do. Buy savings bonds or, better yet, increase your retirement-plan contributions. Or just put an extra $50 per paycheck into a money-market fund.
Here’s what I’ll do. I’ll up the ante on my original deal. Not only will I give you your money back, but I’ll add a whopping 2% to your original contribution. That’s twice what the money-market funds were paying not too long ago. You can’t beat that kind of deal.
Posted in Uncategorized | No Comments »
Wednesday, April 15th, 2009
Here’s what pisses me off about the American Dream. Excuse me while I politically rant but I have to get this out because it’s currently pissing me off at the moment.
HEALTH CARE!
Medical bills are the number one reason families file for bankruptcy.
Instead of doing something about it that helps the common man (i.e. democrats), the republican’s try to shoot nationalized healthcare down so it can keep big businesses pockets lined. So instead of (mostly) responsible families being rewarded for their hard work, they get the shaft by having to foot an enormous bill once a family member falls ill.
I understand that other countries have nationalized health care and I also understand that some of those countries have problems with their nationalized systems. But why should we have to pay $100 for a prescription to get filled when other people pay as little as $4 in other countries? This is, I’m only mentioning prescriptions. In Canada all necessary surgeries are free (free meaning you’re taxed more but don’t have to come out of savings or file bankruptcy later).
It’s time for a major overhaul of our healthcare system. The old system does not allow Americans to achieve the American Dream. It keeps American’s slaves to the the medical fraternity while prohibiting personal and social growth needed to revitalize the country.
If I want to take a chance and open a small business I’m immediately hit by a road block that keeps me in one sided employment contract that offers a healthcare plan. One sided meaning you can be let go for any reason but you’re more apt to stay there because of the health benefits.
I get it! We’ll get taxed more in order to provide a universal healthcare plan. So be it. We’re already getting taxed out the ass, why not tax an extra 3-5% out of my check to cover me and other U.S. citizens health care costs?
I’m willing to bet once the country as a whole stops filing bankruptcy on the inability to pay for rising healthcare costs, we’ll quickly see a prosperous America built on the ideas that anything is attainable.
As for me personally… this rant is brought on by the fact that I’m about to drop $3000+ out on medical bills (and that’s WITH insurance) at a time my wife is without work. We have an emergency stash but that’s beside the point! $3000 on medical bills that could be easily avoidable?
Hopefully Obama gets it and I think he will make the change needed.
Because of the new stimulus, we no longer have to pay $378 to Cobra /month for the wife and kids health insurance plans. Instead we get a 65% discount. Hopefully, Obama is going to do more to bring us to socialized medicine cause I’m sick and tired of being sick and tired of paying for medical help out of pocket WITH insurance.
Posted in Uncategorized | 1 Comment »
Tuesday, April 14th, 2009
A number of the people profiled in “Millionaires tell how they did it” made their millions as entrepreneurs. But working for the Man doesn’t mean you have to be a wage slave or resort to buying lottery tickets to strike it rich. The trick is to maximize your income on the job (and know when to move on), make the most of your employee benefits and tax breaks and use that extra money to start investing.
1. Keep your eyes peeled for better ways to do your job. Streamline a procedure, shave costs, create a new profit center, become an expert on a specific topic, volunteer for a company committee — anything that will make you stand out as a prime candidate for a promotion or a pay boost.
2. Don’t be afraid to negotiate. In a study of master’s degree graduates from her university, Carnegie Mellon economics professor Linda Babcock found that those who negotiated their first salary boosted their pay by 7.4% compared with those who didn’t bargain.
3. Get your ducks in a row and your numbers on paper. If possible, quantify how much your efforts add to the company’s bottom line. If that’s not feasible, spotlight your value with comparable salaries for workers in your position from a Web site, such as Salary.com, or from a professional association.
4. Plot your strategy when it’s time to move on. Create a professional-looking page on MySpace that tells prospective employers why you’re an exceptional candidate, recommends John Challenger of the outplacement firm Challenger, Gray & Christmas. And don’t neglect more conventional networking: Join a professional association or show up at school reunions toting business cards.
Milk your benefits
5. Contribute as much as you can to your 401(k) and other tax-deferred retirement plans. You’ll not only build a bigger nest egg, but you’ll also cut your tax bill. In the 25% federal tax bracket, every $1,000 you contribute to a 401(k) trims your taxes by $250. And you’ll save on state income taxes, too.
6. Flex your tax-saving muscle. Contribute pretax dollars to a flexible spending account to pay for dependent care or out-of-pocket medical expenses. If you set aside $1,500 per year and you’re in the 25% bracket, avoiding federal income and Social Security taxes means Uncle Sam will subsidize almost $500 of your expenses.
7. Review your tax withholding. If you’re expecting a refund this spring, you’re having too much tax withheld from your paycheck — and making an interest-free loan to Uncle Sam. That’s no way to become a millionaire. Put more money in your pocket by using Kiplinger’s withholding calculator and then filling out a new Form W-4.
8. Stash savings in a Roth IRA if you’re eligible. Withdrawals in retirement, including decades of compounded earnings, will be tax-free. This year, income-eligibility limits for a Roth increase to $114,000 for individuals and $166,000 for married couples.
Invest like crazy
9. Don’t delay. The quicker you get a jump on putting money aside, the easier it will be to stuff a seven-figure cushion. If you start at age 25, for example, investing $286 per month will get you $1 million by age 65, assuming you earn 8% annually.
10. Invest automatically, either through your employer’s retirement plan or by setting up a regular deposit to a mutual fund or broker. You’ll never miss the money, and you’ll avoid two big mistakes: buying too much when stock prices are high and not buying at all when prices fall.
11. Watch for fund fees. The more you pay, the tougher it is to earn an above-average return. The typical hedge fund, for example, takes 20% of any gains, a huge hurdle to overcome. A better bet: no-load mutual funds with expense ratios of 1% or less. If you trade individual stocks, watch those commissions.
12. Keep it simple. Be wary of get-rich-quick schemes or sales pitches for complex investments, such as oil-and-gas partnerships, that trade on the millionaire cachet to lure investors into buying high-fee products they don’t understand. Most millionaire households accumulate their wealth over the long term by sticking to a regular investing plan in a balanced portfolio.
Posted in Informational, Inspirational, education, success | 1 Comment »
