Archive for the ‘education’ Category
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 | No Comments »
Tuesday, February 17th, 2009 |
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 »
Sunday, November 9th, 2008 |
Live Below Your Means
Live a comfortable life, not a wasteful one. Do not spend to impress others. Do not live life trying to fool yourself into thinking wealth is measured in material objects. Manage your money wisely so your money does not manage you. Always live well below your means.
A penny saved is a penny earned.
- Benjamin Franklin
1. Redefine your definition of “rich”. – “I remember sitting in a cubicle at my first professional job staring at a picture of an SUV I wanted to buy (and eventually did). Now, I sit in my office and look at the pictures of my kids, and just outside my window I can see the beater I drive sitting in the company parking lot. What a difference a decade makes! To sum things up, my definition of being rich is having enough money to meet my family’s basic needs, a few of our wants, and to be able to give some away to others.” – via Frugal Dad
2. Borrow and share. Everyone wins! – “We borrowed a DVD from a friend instead of renting or buying and had a little snack from our own fridge! Way cheaper than using gas to drive to the theater/rental place, paying for a movie, and paying for a snack.” – via My Dollar Plan
3. Avoid the mall. – “Going to the mall is not entertainment! We used to go when we were bored. Of course, we usually ended up spending money while we were there. If you need clothes, then shop sales or go to stores that offer name-brands at a discount. You can save a ton on these items if you are a smart shopper. Dave Ramsey says, “Never pay retail!” We probably save $15 to $30 per month by staying away from the mall.” – via My Super-Charged Life
4. Limit your intake of advertisements. – “Advertising sucks. That’s the cold, hard truth. It’s engineered to make you feel like you’re incomplete, that you have an unfulfilled need, that you’re not good enough.” – via On Simplicity
5. Buy with cash. – “You can’t spend money you don’t have. Many bank accounts provide overdraft protection, so even with a debit card, it’s easier to go over your account balance than you think.” – via Simple Mom
6. Find a better deal and actually SAVE the difference. – “Regardless of what they sell, if you’ve switched companies for price reasons, save the difference. Think of phone companies, internet access, cell phones, credit cards, and others.” – via The Wisdom Journal
7. Adhere to a long-term investment strategy. – “I’m a long-term investor. The stock portion of my portfolio is spread over several mutual funds, a few ETFs and a few individual stocks. Each and every one of these holdings was carefully chosen, after thorough research. I believe in these stocks and funds. I consider them as my best bet in growing my money - LONG TERM.” – via MomGrind
8. Curb your consumerism! – “Have you ever watched how a child can play with a cardboard box for hours, and leave the toy that came in it by the wayside? How is it that children can enjoy themselves without a lot of “stuff”, but we as adults feel the need to reward ourselves by buying more stuff?” – via Billionaire Woman
9. Stay Healthy! Medical problems drain bank accounts. – “James M. Rippe, M.D is a best-selling author, world-renowned cardiologist, and founder of the Rippe Lifestyle Institute. He explains that if you look at all the risk factors for dying, the one that is most predictive is fitness level. In addition, an older person with high cardiovascular fitness is healthier than a younger person who is physically inactive. By increasing your fitness level, you can actually roll back your biological clock.” – via Abundance Blog
10. Stay in and relax. – “So, think about it the next time you go out. Are you going for with a purpose? Maybe the solution is to not go out at all. Stay home and save! Save up for something you really want or need.” – via The Jungle of Life
11. Gradually prepare yourself for a rainy day. – “Even when things are going great, and you feel on top of the world, you must always be prepared for a change. If you take the time and patience to set yourself up properly, then when things to take a turn for the worse, you will be prepared to handle it. If you live above your means, then when the slightest change occurs, you will not be prepared to adapt. Financial flexibility is more important then keeping up with the Jones’.” – via Yin vs. Yang
12. Stop competing. Forget about the Jones’ altogether. – “If getting rich makes us happy, then why don’t countries as a whole get happier as they grow wealthier? They discovered that as a country gets wealthier there’s no overall increase in happiness. Why? We continually compare our wealth against that of others. We are competitive and envious. Add to that the fact that Western countries encourage people to strive for more and more, and you have a formula that spins many into depression.” – via Color Your Life Happy
13. Get out of the “easy street” mentality. – “I think there is too much emphasis on the quick fix or the easy option in today’s society. For example taking diet pills to lose weight instead of the “hard option” - exercising and eating well…. money is sometimes being used as a substitute for hard work. Do you think there is an increasing expectation that you can get want you want by throwing money around instead of working hard and “earning” it? – via Forever Change
14. Avoid impulse buying. Buy things you truly need. – “Don’t you just love the excitement you feel after coming home with a new TV? Driving home in a new car? Opening the box on a new pair of shoes? I sure do. But, from watching the behavior of myself and my friends I’ve found that the new quickly becomes just another item. The excitement of novelty passes quickly.” – via Think Simple Now
15. Time is money. Properly manage your time. – “The fewer tasks you have, the less you have to do to organize them. Focus only on those tasks that give you the absolute most return on your time investment, and you will become more productive and have less to do. You will need only the simplest tools and system, and you will be much less stressed. I think that’s a winning combination. Focus always on simplifying, reducing, eliminating. And keep your focus on what’s important. Everything else is easy.” – via LifeDev
16. Find ways to give without spending. – “Want a quick, easy and (almost) free way to be guaranteed that you’ll make someone’s day special? Send them a letter. Why not set aside some time this weekend to sit down and write to a few people? If you don’t enjoy writing, try buying some nice postcards of your home town. If you’ve got an artistic streak, why not design your own note cards? You don’t have to write a long letter for it to be effective. It’s the thought that counts and the personal touch that makes it special.” –via Dumb Little Man
17. Don’t let greed and deceit get the best of you. – “According to Stephen R. Covey, if you reach an admirable end through the wrong means it will ultimately turn to dust in your hands. This is due to unintended consequences that are not seen or evident at first. The example he gives in The 8th Habit is: The parent who yells at their kids to clean their rooms will accomplish the end of having a clean room. But this very means has the potential to negatively affect relationships, and it is unlikely the room will stay clean when the parent leaves town for a few days. Now, to return to the topic of wealth, I think it is possible to see much of the world’s current financial problems as stemming from people who wrongly believe the ends justify the means. My advice? It is fine to aspire to wealth, but don’t lose sight of the means to accomplishing it.” – via The Change Blog
18. Never ever pay retail. – “You can easily save hundreds of dollars a year on clothing purchases by waiting for sales or shopping at discount retailers like Marshalls. Better yet, avoid name brand clothing all together.” – via Marc and Angel Hack Life 
Posted in Generate income, Inspirational, Personal debt, education | 4 Comments »
Friday, November 7th, 2008 |
Jesse Jackson, Colin Powell, my mother and countless others around the world had the same sense of accomplishment, pride and overall acceptance at 10pm CST once it was official that Barrack Obama was named the 44th president of the United States.
Obamas victory was a victory for America. Not because of the majority vote but because of it’s significance. His winning the election signifies the country is moving well past the hate filled days of slavery, white pride and power. It instead lays the foundation for us to stick together and to know that we can and will prevail in the face of adversity.
My only regret of it all is that my grandfather didn’t make it 3 extra months in order to celebrate in the moment. I can imagine him now, tearing up and snotting with his tissue in hand while showing admiration for something he thought he’d never see in his lifetime.
America, we have a chance to do something special here. Barack preaches personal responsibility for all. Some think he’s their savior for their financial woes while forgetting that it was their bad spending and debt habits that got them there in the first place.
THAT’S RIGHT! It’s time for YOU and ME to become personally responsible for our actions. By doing so, first we must educate ourselves. We must know that prime mortgages are a precursor to failure. We must know that, “keeping up with the Jones” will have us as stressed as them.
So before looking for a handout with foreclosure help or jobless claim help, think about what got you there in the first place. It wasn’t Obama, IT WAS YOU!
Prime lending? You have to educate yourself instead of getting caught in the NOW moment.
Jobless? (again) You have to educate yourself instead of looking for someone to magically pick you out of a lineup in order to secure employment.
Of course there’s circumstances that go beyond this article where things aren’t so pronounced but then again, maybe they are. Maybe if we’d take personal responsibility those unpronounced things may not happen to us also.
Posted in Inspirational, education, goals, purchases | 1 Comment »
Saturday, November 1st, 2008 |
I’ve Been away for a while and I apologize. I’ve been swamped with different projects and things. I’ve been paying really close attention to the market lately because of it’s downward spiral. It’s actually a good thing it’s like this.
Think of it this way… There’s a big sale at the moment. Instead of commodities such as clothes and other goods… It’s stocks and mutual funds.
To put things into perspective… I’ve lost 40+% from my 401k & IRA as well as other investment options. It’s horrible news for the short term but GREAT news for the long run. Not only am I will I get that 40% back down the road but with the prices I’m currently buying in at I’ll be gaining 40% on those purchases.
I’ve taken out $25000 recently and $20000 of it is going on long term investing. I’ve been really paying attention to the ticker (OIL). It’s currently REALLY low and bound to rebound once the summer rolls around for you short term investor’s.
Also at this time the ticker (FNARX) is a mutual fund I use in my Roth IRA investments and it’s bound to make a huge comeback long term as the world grows more dependent on natural resources.
Of course, I’m not a professional and you should always seek the help of one when thinking about investing. At the same time, I’m just informing you of what I’m going to jump in really soon.
I’ll keep you posted. I think I’m going to jump in on another one of these days when the market takes a huge dive Hopefully really soon. I have to admit it’s scary timing the market but considering we’re in our lower 30’s we have a lot of time to play around.
Til next time…
Posted in Generate income, education, purchases | 1 Comment »
Thursday, September 18th, 2008 |
Sorry for the long delay but I’ve been really busy with the new job and all and in the process got some good news…
The wife’s company is now sold and we inherited our share of the proceeds I blogged about earlier. It feels great to have a nice chunk of change in savings. We are sticking to our plan of taking 10% of it and helping others in need. So far it’s been family & friends.
It’s great to see people get a blessing because we received one. I’m not religious but lately I’ve been thinking that maybe there is a plan created by someone or something.
For instance, I feel like I worry less over things I can’t control because I feel that if something’s right for me, it will happen.
I’ve had 2 great interview within the past 3 months. I haven’t even called them back to check on the status. If I get it, I get it… If I don’t, I don’t! It’s that simple.
I’ve also had everything to be lined up so that when my severance ran out with Sprint, I’d have a friend that was going to put my wife & I on his plan. That didn’t turn out so well either so I’m going to chalk that up in the “it’s not supposed to happen category” at no fault of my friend.
Anyhow, for some reason this layoff has taught me a lot of things just as I’ve predicted.
It sucks having to wake up in the morning to get dressed to go to work, but at the same time it’s great knowing that I don’t have to worry about job security. Plus I work less than one mile away from where I live.
It sucks taking a $13K pay cut, but at the same time, I’ve actually made more this year with my severance, unemployment & my new job. I’ll also be getting a significant raise in’09 or ‘10 as i’m being groomed to replace someone that’s retiring after next school year. Did I mention the experience factor is GREAT. It’s like I’m over an entire section of the IT department because I’m the most familiar with the SCCM/SMS technology we’re implementing.
So in all… My layoff was actually a blessing in disguise. It’s been great throughout the entire process as it was something that was supposed to happen as it must’ve been in my cards. Actually, it was an exciting time which I can’t explain for some odd reason why it was exciting.
I guess it was a challenge of the change I am going through at this time. It was exciting to know that you’re forced to do something and you have other people relying on your for support. Since the layoffs, we haven’t missed a beat considering this is one of the worst economic times since the great depression. Some people are actually calling it worst.
I will tell you that if I would’ve been financially irresponsible, then this wouldn’t have been such a grand time in my life.
Posted in Inspirational, Personal debt, education, success | 1 Comment »
Tuesday, August 19th, 2008 |
It’s simply amazing how people sacrifice so little to sacrifice a lot. Millions of people around the country are living the American dream and the mountain of debt that goes along with it just because they don’t want to start a (GOD forbid) budget. Check out this story I simply had to shake my head at:
Mary earns an after-tax weekly salary of $675 and gets weekly child support of $142; her income averages $3,462 a month.
Her monthly expenses: $1,485 for rent, $175 for utilities, $275 for a car payment, $361 for car insurance, gasoline and maintenance, $415 for her son’s college tuition, $124 for cable television and Internet service, $350 for grocery bills and $100 for dining out. That’s a total of $3,285 — and it doesn’t include incidental costs for clothing, hair care, gifts or entertainment.
She’s also overdue on several bills, including $282 for medical costs, $233 for a student loan and $80 for 2-year-old phone charges.
In a nutshell, Mary spends close to or more than she earns each month, and she runs out of money before she can make payments on her existing bills. That means there’s nothing left over to pay down her growing debts.
Mary is the first to admit a lot of her financial problems are in her head. She’s always had trouble with money, so her financial woes have become part of her identity — so much so that she carries her folder of bills with her wherever she goes, like a security blanket.
She says she wants to have the means to take vacations and buy presents for her grandchildren, even have a little in the bank for emergencies. But her self-sabotage has stopped her from attacking the real problem: her attitude about money.
Mary, like most people, dreads the “B” word: budget. But budget is not a dirty word. It’s the secret to financial freedom.
Without reading the article any further I immediately so ways to improve her situation in a matter of months. Instead Mary, would rather sacrifice budgeting instead of her attitude about wasting money.
Off the top of my head, I see she could lose some cable television programming and possibly opt for cheaper internet services. She could sell the car and buy something older while at the same time being reliable. Doing so would also lower her car insurance rates.
So lets say she creates a budget and is able to milk $200/month (on the low end) out of the deal. The $80 phone charges would be pai off the first month. That leaves $120 left over for the month. Next month add that up with the $200 and pay off the $282 medical costs. Take the rest and pay off the $233 bill the next month.
After 3 months those debt collectors are paid off and now she has $200 to spend on more debt in order to get the debt reducing snowball rolling.
Life shouldn’t be that hard people. Sacrifice your laughing now so that you won’t be crying later. Reverse the trend!
Posted in Generate income, Informational, Personal debt, education, relapses | 1 Comment »
Sunday, August 17th, 2008 |
As a follow-up to my previous entry here’s where it gets interesting. I’ve done the research for you. so here’s a list of investment options from (my opinion) best to worst.
Bust first here’s a quick dumbed down vocabulary to decipher some terms:
- Stock: A single unit of ownership of a single company.
- Mutual Fund: A collection of stocks fro different companies.
- Bond:You loan a corporation or government money and they repay you with interest at the end of the predetermined term.
- CD:You loan the bank money so that they can make money and give you some of the profit at the end of the predetermined term.
Now that you have that highly detailed explanation, lets get to it:
ROTH IRA (Individual Retirement Account): Paid into with your post tax dollars. As of 2008 you can contribute up to $5000/year. It’s an individual account that has nothing to do with an employer. You can withdraw your contributions at any time tax and penalty free. At the age of 59.5 you can withdraw contributions & earnings tax & penalty free. Before hand and you have to pay the taxes and 10% penalty on the earnings only. At the age of 70, you have to start receiving monthly distributions from the account or roll it over into something else altogether.
ROTH 401K: Paid into with you post tax dollars. As of 2008 you can contribute up to $15,500/year. It has to be offered by your company as they’ll match a percentage of your contirbution (sometmes 100%). You cannot withdraw your money without penalty (sort of). you have to take a proportionate amount of earnings with the amount of contributions you are withdrawing. So if you take 50% of your contribution out, you have to also take 50% of your earnings. The earnings are then included in your income for federal tax purposes. At the age of 59.5 you can withdraw contributions & earnings tax & penalty free. Before hand and you have to pay the taxes and 10% penalty on the earnings only. At the age of 70, you have to start receiving monthly distributions from the account or roll it over into something else altogether.
401K:Paid into with pre-taxed dollars (meaning you’ll have to pay taxes later when you withdraw). This setup through your employer and they have the option to match a percentage of your contributions (some dollar for dollar). At the age of 59.5 you can withdraw contributions & earnings tax & penalty free. Before hand and you have to pay the taxes and 10% penalty on the earnings only.
403b: Strikingly similar to a 401k plan in every way. The biggest differences are investment options which are limited to:
Mutual Funds:Paid pre or post tax depending on the account. You can purchase mutual funds by selecting them within you ROTH, 401, 403 or individual accounts. They’re the 2nd choice of investing for individuals. They’re not as volatile as individual stocks. When researching which MF’s are best for you, choose the 4 best percentage gainers over a 10-15 year period and allocate 25% in each.
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nnuity and variable annuity contracts with insurance companies.
- Retirement income accounts for churches.
- A custodial account made up of mutual funds. This is known as a 403(b)(7).
CD’s (Certificate of Deposits):Safest of all investment options as there’s a contract that you’ll get a preset return at the end of a contract. The drawback is that the interest rates are usually low and is almost the same as the increase of the yearly cost of living increase. Usually, the longer the CD is held, the higher the interest rate. If you cash in the CD before the specified time, you will have to pay a penalty. CDs are also insured (up to $100,000) if the institution is federally insured.
Savings Bonds: Usually yields lower interest rates than a CD and also come without a garuantee (unless it’s government issued). Not really an option in the investment cycle (for me at this point) so I really didn’t feel like doing my full research on it. If you want to know more, read here.
Stocks: Can be good or bad depending on your research. RESEARCH RESEARCH RESEARCH. There’s a reason you hear about day traders going postal. I’d suggest going the mutual funds option instead of the stocks route.
Note: All of these options (except for most CD’s) have risks involved. I’m a 31 year old male that can afford to take the risks at this time. Even though this is an informative blog entry that may persuade your opinion to invest one way or another, I’d advise you to seek the help of a professional. Of course, I’m always willing to give advice so if there’s something you need explained in further detail, don’t hesitate to ask.
Posted in Generate income, Informational, Personal debt, education | No Comments »
