Credit Card Front: It doesn’t add up!

I’m constantly baffled by people that are the front man for credit card purchases.

You know the types… the people that have a credit card that fronts the purchase for someone without a credit card and will be reimbursed with cash?

For instance, I know someone (Person A) that bought plane tickets for someone (Person B) because they didn’t have a credit card. The Person B gave them the cash immediately, but instead of paying the credit card down the Person A will spend it elsewhere and continue paying on the payments.

It’s literally throwing money away. Lets say, the plane tickets cost $400. With interest and the continuouse minimum payments building up on the credit card, Person A might as well pay Person B $150 so they can front the $400 plane ticket purchase the non credit card user.

And that’s a low estimate since credit card interest rates are higher than normal. And considering that it could take YEARS to pay down a credit card on minimal payments, they could end up paying double.

It doesn’t add up nor make sense. You’d be better telling the person NO or telling them you don’t have a credit card if all you’re going to do is burying yourself deeper and DEEPER in debt.

Posted in Informational, purchases, relapses | No Comments »

hmmmm… One of those days

This is one of those days where I just start writing and write until stuff comes to mind. Having said that, I have no responsibility of what may be said and the order they’re presented.

I guess you can call it my “hmmmm” moment in RDL.

For starters, I’m currently wondering when will the tattooing thing going to take off like I want it to? I’ve been handing out business cards to at the oddest of places. Fast food drive thru attendants that have tattoos. Waitress’s that have tattoos. I’ve even posted my portfolio on a couple of message boards. I’ve since tattooed on one customer from a message board and none by manually handing out my cards. For some odd reason, I’m getting customers out of the blue through word of mouth though.

Another thing that’s been on my mind is my income and outcome. For some reason, I have money even though I feel like I’m broke as hell. I’ve been spending a lot lately and it doesn’t seem to be catching up with me. Hopefully it’s all in my head.

Seems like I’ve inherited my middle daughter’s softball team. The head coach officially asked me when did I want to practice in front of the other parents. Kind of caught me off guard as I rambled while trying to think of the audacity. We all finally agreed on Saturday morning (tomorrow).

I’m at a cross roads with the wife and her job situation. It’s nice having her home taking care of the home but at the same time, it’d be nice to have another source of income coming in. To top it off, (not saying it’ll happen) I was reading about this guy that had a stay at home wife and as soon as the kids left, she got bored and wanted a divorce. A divorce I could handle (not want to but could deal with it), but she get’s half of his everything all because she was a stay at home mom. Oh well, I guess you can’t live thinking of the possibilities, or can you?

Now I’m left with wondering how much spending money I should take on the October cruise we’re going on? I did my first betting goal on my first cruise (bet $100) on one blackjack hand. Now I want to accomplish my next goal of placing $500 on one blackjack hand. By the way, I lost the $100 bet. Not only will there be gambling, we’re going to South beach the day before the cruise for a day of partying. I’m thinking $1000 should be enough for the entire trip.

We seem to be looking at some more money come in soon. My wife is getting a small settlement (under $5k) from when she got in a car accident last year. It’ll basically be money we spent on her medical expenses being reimbursed plus some small additions of pain and suffering of her sphincter or whatever.

I’m also wondering when will this egg sized hematoma inside my scrotem from vasectomy complications go away? The doctor says it may be a couple of months and it feels like it’s shrinking a little bit but I’m skeptical of doing anything active because I know it’s there. It’d be nice to play some softball or flag football (might even give it a shot at quarterbacking tomorrow)

Another thought is… when will the market be up to near it’s all time peak again? We’d tend to make a lot of money if that was the case since we currently have about $40k in the market at the moment. This weeks gain was nice but somewhere near it’s all time high would be GREAT!

There you have it… those are my most current random thoughts I decided to write about. What are some of yours?

Posted in Informational, Personal debt, goals, purchases, success | 1 Comment »

Giving money away: $4000

We’re done! My wife and I set out on a mission to give 10% of our generous gift to various family and friends in need. Do you know how hard it is to give money away to people not only in need but deserving?

We figure, we could have blown the money on dumb stuff ourselves so we wouldn’t give it to friends and family members who had no business with a lump sum of money. So we had to quietly (since no one knew we even inherited the money) weed out qualifying targets.

We gave the money on 2 conditions:
- They don’t tell anyone we gave it to them
- They help someone else out in the future.

There were tons of people that needed the money but we were skeptical as to if they’d actually be responsible with it. Some we KNEW wouldn’t be, so we paid bills off for them. Others we gave straight cash to because they had no choice but to be responsible with it. You know the types that have plenty of mouths to feed or young ones depending on them and just need a small “push”. Some just bought a house and since they were first time home owners, didn’t expect bills to mount so quickly and the utilities to be so expensive.

I must say, the feeling it gives you to be able to help someone is AWESOME! We all talk about what we’d do for each other if we ran across some money. The wife and I, actually followed through with it. What’s amazing about it is we all fantasize about the million $ lotteries, all the while, we were able to make a difference in a lot of people lives with only $4,000.

The reaction from people was various. It’s amazing how many people quickly turn to God to thank you for their blessings. Some started tearing up. One confessed that we’d changed his life (beyond comprehension) since he was dealing with some personal issues and he’d let me know when it all got sorted out (still waiting).

Truthfully, after having the money for about 6 months, it started to feel like a curse. It started feeling like, “we had good intentions”, and would just pocket the rest. We were constantly trying to identify people to give the remaining $1000 to. It got to the point we were like Will Smith in seven pounds where we were trying to see if people had a bad side to them before we sacrifice the money to them.

I actually, ran across one person (who shall remain nameless) that kept ignoring me over the Internet when I asked him a questions about how much things were going to cost to get him out of a rut. Only after I’d already given the remaining $536 away would he respond with “what did I want again”. His loss.

All in all, I’m happy to even have the had opportunity to bless people. Giving should be something that we all practice. I’m even leaning towards a new idea that instead of going Xmas shopping for the kids this year, we take that money to do a sort of Secret Santa type deal during the holidays. That’s only in thought at the moment, because right now, we’re in the brunt of the recession just like everyone else.

Maybe I’ll compromise my thoughts and get them all one gift a piece and plant a bigger seed in their heads with the gift of giving.

So what would I do differently if the opportunity presented itself again? Not a damn thing. The experience was awesome and right up there with the births of my children or swimming with the dolphins in Nassau.

Posted in Inspirational, Uncategorized, success | 2 Comments »

Vasectomies, Tube Tieings and Historectomies are on the rise.

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 | 1 Comment »

‘09 Tax year in review

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 »

Millionaires Club: 12 similarities of millionaires

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 | No Comments »

How to Negotiate a Mortgage Loan Modification With Your Lender

Posted in Generate income, Informational, Personal debt | 2 Comments »

Thinking twice before refinancing home or car.

It never fails.  A relative of mine called me about refinancing their car and then the conversation switched to the home.  After discussing the options available it occured to me that I was once there thinking of playing the refi game also.

I used to have a ‘99 Isuzu Rodeo and I was tired of the $330, 5 year (13.9% interest rate) monthly payments and wanted to do something about it. I searched the Internet until my finger prints wore off and found great interest rates I could refinance at.

Then there was a problem.  I started thinking…

After paying for 2-3 years on the car, I’ve had enough with the high interest rate. But if I was to refinance, my payments would’ve been lower but the number of payments would have increased. To put it in layman terms, I would’ve paid for the car twice.

Same with my house. I wasn’t always this financially crazed Deity that knew it all.

In 2001 we bought our house on a 30 year 6.85 fixed interest rate.  In 2003 we refinanced it to 5.875%. Luckily not much was lost.

Others aren’t as fortunate.  Imagine owning a house for 15 of those 30 years and wanting to refinance.  Most people refinance again for 30 years.  Of course you’ll have a lower payment but you’ll be paying more in the long run. In effect you’d be paying 45 years (15 (already in)  + 30 more) for the home when you should only been paying for 30 years.

For instance, let’s say you took out a $100k loan on a home @ 6.85%. You’re looking at $650/month.  15 years later  you owe $74K (and have paid $91K in interest).  Now you refinance that $74K @ 5% for 30 years and your payment is now $536/month.

So basically, you’re willing to save $114/month for 15 extra years of payments. Not to mention you’ve wasted $91K in interest over the last 15 years. And guess what? The new refinanced loan will be just like the previous loan meaning that the first 10-15 years you pay your loan will be applied to mostly interest.

Same with a car.

The only time to refinance would be when you haven’t been in a loan for a significant amount of time and the interest rate is at least 1.5% lower than your current rate.  If you do finance, make sure you finance for the life of the loan you’re currently financed for.  So if you’re into year 10 of your thirty year loan and the interest rates are unbeatable, refinance for 15 years or 20 in order to not be paying twice for the home.

Something to think about when you’re ready to pull the refinance trigger.  Of course, I’m here all week and don’t forget to tip your waitress.

Posted in Informational, Personal debt, education | 1 Comment »