It's been awhile since my last post. I'm convinced that my blogger's block is a result of my appendix being removed last month. Makes complete sense if you think about it. I was writing along just fine, my appendix had a desire to relocate, and whammo!...blogger's block.
Since the surgery, I've turned 31. A children's song includes the lyrics: "One year older and wiser too". I may not really be any wiser, but a birthday is like the new year. It's a great time to sit back and take stock of one's life. Or, if you're like me, you might sit back and take stock of one's stock (and mutual funds, bonds, etc.).
As I've reviewed our family portfolio, I've realized we've been much too conservative with some of our funds. We're missing out on significant gains without adding much risk. So the review, has been educational, to say the least.
Next step: find a good place to put the funds. I'm partial to American Funds, Vanguard, and T. Rowe Price because of the low fees. I'm not looking to invest money in any single stocks.
Stay tuned and I'll let you know what I find!
Monday, March 20, 2006
Saturday, February 04, 2006
Here's to Your Health...
Just over a week ago I had emergency surgery to remove my appendix. It was my first surgery ever, so I was a little scared of what might happen. Okay, so I was A LOT scared.
Anyway, as I sat in triage at the hospital, my mind raced and one of the things I kept coming back to was how grateful I am for my health. Aside from the current situation, I haven't really had to spend much time in hospitals.
I'm also grateful that there are people in this world that are interested in things like nursing and surgery. Neither of these occupations interest me from a career standpoint, but there are many highly skilled, wonderfully kind folks out there that are very good at what they do in these areas.
Finally, I'm grateful for my family. I'm definitely not deserving of such a fabulous wife and two great kids. They are everything to me.
So, while this blog is mainly about money, it's essential to acknowledge (on a regular basis, not just before surgery) that the most important things in life are:
Anyway, as I sat in triage at the hospital, my mind raced and one of the things I kept coming back to was how grateful I am for my health. Aside from the current situation, I haven't really had to spend much time in hospitals.
I'm also grateful that there are people in this world that are interested in things like nursing and surgery. Neither of these occupations interest me from a career standpoint, but there are many highly skilled, wonderfully kind folks out there that are very good at what they do in these areas.
Finally, I'm grateful for my family. I'm definitely not deserving of such a fabulous wife and two great kids. They are everything to me.
So, while this blog is mainly about money, it's essential to acknowledge (on a regular basis, not just before surgery) that the most important things in life are:
- Health
- People (friends, co-workers, doctors, nurses, garbage collectors, truck drivers, etc.)
- Family
There's no happiness in money or the things it can buy. Money is an enabler. It can reduce or eliminate some of life's worries. But it is a means, not an end.
EmigrantDirect = A Dud
EmigrantDirect.com is now paying 4.25% interest and so I just had to give it a try. Frankly, my experience has been less than stellar.
It took nearly two weeks for the entire account setup process to be completed. I honestly can't remember if ING took that long. If it did, my excellent experience with ING since that time has erased all memory of any problems or delays.
As mentioned in a previous post, ING set the bar pretty high as far as I am concerned. Maybe my expectations were unrealistic...nah, they were just fine.
I expected EmigrantDirect to not only pay a great interest rate for holding my money, but I expected an easy-to-use online account interface. Too bad for me. It's absolutely horrible. I don't expect super fancy design or lots of graphics, but I do want it to be intuitive and user-friendly. This interface doesn't cut the mustard...and if you can't cut the mustard, don't pick up the knife.
It's time for this bank to invest some marketing dollars into the account area of the web site to close the loop on its brand. A brand is a promise, and the only thing this bank's brand promises is that you will be disappointed.
It took nearly two weeks for the entire account setup process to be completed. I honestly can't remember if ING took that long. If it did, my excellent experience with ING since that time has erased all memory of any problems or delays.
As mentioned in a previous post, ING set the bar pretty high as far as I am concerned. Maybe my expectations were unrealistic...nah, they were just fine.
I expected EmigrantDirect to not only pay a great interest rate for holding my money, but I expected an easy-to-use online account interface. Too bad for me. It's absolutely horrible. I don't expect super fancy design or lots of graphics, but I do want it to be intuitive and user-friendly. This interface doesn't cut the mustard...and if you can't cut the mustard, don't pick up the knife.
It's time for this bank to invest some marketing dollars into the account area of the web site to close the loop on its brand. A brand is a promise, and the only thing this bank's brand promises is that you will be disappointed.
Thursday, January 19, 2006
Free Money from the Government?
The new year brings with it another new tax season. For some, this is annoying or even frightening. For others, it's a blessed event. What? Ah, of course, the tax refund. It's like getting free money from the government! At least that's what some folks think. I disagree.
I personally hate tax refunds. A tax refund means that the government has held my money and hasn't paid me anything for that privilege. I'd much rather have that money in an ING account earning some interest.
Don't get me wrong, I don't like to owe taxes either. My ideal world is where April 15th rolls around and the government and I agree that I've paid enough throughout the year, thank you very much.
I can't exactly have the ideal, so my goal is to get as close to it as I can. One of the ways to do this is to adjust withholdings on form W-4 at work.
I like to review my withholdings once a year and make any changes to account for any surplus or deficit in taxes collected. It's super easy to do. Just speak with your friendly neighborhood HR department.
Special note: This isn't for everyone. Some people that don't feel like they are disciplined savers would much rather have a refund in than have to come up with money for any tax deficit. If you know your weaknesses, this is probably a wise move.
I personally hate tax refunds. A tax refund means that the government has held my money and hasn't paid me anything for that privilege. I'd much rather have that money in an ING account earning some interest.
Don't get me wrong, I don't like to owe taxes either. My ideal world is where April 15th rolls around and the government and I agree that I've paid enough throughout the year, thank you very much.
I can't exactly have the ideal, so my goal is to get as close to it as I can. One of the ways to do this is to adjust withholdings on form W-4 at work.
I like to review my withholdings once a year and make any changes to account for any surplus or deficit in taxes collected. It's super easy to do. Just speak with your friendly neighborhood HR department.
Special note: This isn't for everyone. Some people that don't feel like they are disciplined savers would much rather have a refund in than have to come up with money for any tax deficit. If you know your weaknesses, this is probably a wise move.
Friday, January 13, 2006
Money is a Stewardship
I am not obsessed about money. This might sound a little strange coming from a guy who calls himself Cheapwad and blogs about personal finance. My wife might even disagree with me because I do expend some amount of effort worrying about our family finances. But the fact of the matter is that I care about money for one main reason: I believe money is a stewardship.
An obsession is all-consuming. It's a hunger that cannot be satisfied. My grey matter doesn't view money in that light. Rather, I think of money in terms of making the best use of what I've been given. Any money I receive becomes a responsibility. My greatest desire is to be wise in the spending and saving and investing and sharing of that responsibility. It doesn't matter if the amount is large or small, I feel the same sense of duty.
By viewing money in this way, I combat the temptation to ever think that money or financial security equates to happiness. One doesn't have to look very far to see celebrities, athletes, or even close friends and relatives that have plenty of cash, nice homes and cars, fine jewelry, etc. but are not happy. Those people face challenges just like everyone else. If I can avoid that temptation, then my primary pursuit in life will always be happiness. I won't be distracted and begin to pursue the almighty dollar and sacrifice everything else that is so much more important...especially family.
Would it be nice to have a lot of money? Sure. Would it be great to be financially independent? Of course. But, having a million dollars in the bank will not solve all my problems. It won't make me a better husband or father, a better son or brother. It won't make me kinder, gentler, or more thoughtful. Money (or the lack thereof) does not define who I am. My thoughts and actions are guided by my character, which is a much better indicator of success in this life. And it is my character that will help me be a wise steward.
An obsession is all-consuming. It's a hunger that cannot be satisfied. My grey matter doesn't view money in that light. Rather, I think of money in terms of making the best use of what I've been given. Any money I receive becomes a responsibility. My greatest desire is to be wise in the spending and saving and investing and sharing of that responsibility. It doesn't matter if the amount is large or small, I feel the same sense of duty.
By viewing money in this way, I combat the temptation to ever think that money or financial security equates to happiness. One doesn't have to look very far to see celebrities, athletes, or even close friends and relatives that have plenty of cash, nice homes and cars, fine jewelry, etc. but are not happy. Those people face challenges just like everyone else. If I can avoid that temptation, then my primary pursuit in life will always be happiness. I won't be distracted and begin to pursue the almighty dollar and sacrifice everything else that is so much more important...especially family.
Would it be nice to have a lot of money? Sure. Would it be great to be financially independent? Of course. But, having a million dollars in the bank will not solve all my problems. It won't make me a better husband or father, a better son or brother. It won't make me kinder, gentler, or more thoughtful. Money (or the lack thereof) does not define who I am. My thoughts and actions are guided by my character, which is a much better indicator of success in this life. And it is my character that will help me be a wise steward.
Tuesday, January 10, 2006
It's Not What You Earn, It's What You Save
Is it true that it's what you save that matters? I believe so. I know several persons that make a lot of money, but are literally living paycheck to paycheck. On top of that they have no security basket or retirement basket to speak of.
I also know individuals that make less than $40K per year, yet are building quite a nest egg for themselves.
What's the difference? Debt has a lot to do with it. Where debt is involved, it is difficult to pay that down and build any sort of savings.
What else? Disciplined spending. Money wasted on eating out, travel, entertainment, and gift giving might be better tucked away in a money market account earning a little interest. I'm not saying that eating out every once in awhile isn't a fun thing to do, but it can be costly.
Suppose I go out for lunch every afternoon at work. If my average meal costs $7, I'm spending $35 a week on food. That's over $1800 a year on work lunches! Where I come from, that's a lot of money. And it gets better...
Let's say that I am a 25 year-old young professional. If I were to invest that $1820 from my first year on the job in something that returns 8% annually, I'd have over $36K when I retire. And that's just from the first year.
Now let's suppose I save that lunch money every day of my working life. How does over $471K sound to you?
Again, I don't think this means one should eat ham sandwiches from home every day, but there is something to be said for identifying the money leaks in your buckets and plugging some of the holes.
I also know individuals that make less than $40K per year, yet are building quite a nest egg for themselves.
What's the difference? Debt has a lot to do with it. Where debt is involved, it is difficult to pay that down and build any sort of savings.
What else? Disciplined spending. Money wasted on eating out, travel, entertainment, and gift giving might be better tucked away in a money market account earning a little interest. I'm not saying that eating out every once in awhile isn't a fun thing to do, but it can be costly.
Suppose I go out for lunch every afternoon at work. If my average meal costs $7, I'm spending $35 a week on food. That's over $1800 a year on work lunches! Where I come from, that's a lot of money. And it gets better...
Let's say that I am a 25 year-old young professional. If I were to invest that $1820 from my first year on the job in something that returns 8% annually, I'd have over $36K when I retire. And that's just from the first year.
Now let's suppose I save that lunch money every day of my working life. How does over $471K sound to you?
Again, I don't think this means one should eat ham sandwiches from home every day, but there is something to be said for identifying the money leaks in your buckets and plugging some of the holes.
Monday, January 09, 2006
What's In My Wallet?
I'm a huge advocate of avoiding debt if at all possible. That doesn't mean that I'm anti-credit card. I just think it's important to pay off the entire balance every month. That being the case, it literally pays to find a card that will work to your advantage.
After a couple of weeks of research, I chose the Citi Diamond Preferred Rewards card.
Citi Diamond Preferred Rewards
Reasons I chose this card:
1. No annual fee
2. Citi has some great identity theft solutions
3. 5,000 free bonus points after your first purchase
4. 5 points for every $1 spent on purchases at supermarkets, drugstores, and gas stations
5. 1 point for every $1 spent on all other purchases
6. Trade points for merchandise, restaurants, travel, etc.
No annual fee is number one. With so many options, there's really no need to pay for the privilege of using a credit card. The ability to choose my own rewards was also a huge plus. Baby might need a new pair of shoes, but daddy might want a fancy, new digital camera or a home theater system!
I think it's important to reiterate that paying off your balance every month is one of the keys to financial security. If you aren't in a position to do that right now, then that is a worthy goal for 2006.
After a couple of weeks of research, I chose the Citi Diamond Preferred Rewards card.
Citi Diamond Preferred Rewards
Reasons I chose this card:
1. No annual fee
2. Citi has some great identity theft solutions
3. 5,000 free bonus points after your first purchase
4. 5 points for every $1 spent on purchases at supermarkets, drugstores, and gas stations
5. 1 point for every $1 spent on all other purchases
6. Trade points for merchandise, restaurants, travel, etc.
No annual fee is number one. With so many options, there's really no need to pay for the privilege of using a credit card. The ability to choose my own rewards was also a huge plus. Baby might need a new pair of shoes, but daddy might want a fancy, new digital camera or a home theater system!
I think it's important to reiterate that paying off your balance every month is one of the keys to financial security. If you aren't in a position to do that right now, then that is a worthy goal for 2006.
Thursday, January 05, 2006
CNNMoney.com: Do it now
CNNMoney.com: Do it now
A great article on some areas for improvement in your financial life. One of my main goals for the early part of 2006 is #10 on this list: craft a long-term investing plan.
I have a decent handle on our family finances, but there is a lot of room for improvement, especially in the retirement basket area. I feel pretty good about the security basket.
The dream basket is totally invested for the short-term right now (1-24 month time frame). We use it mainly for family vacation funds. I'd like to set some mid-term and long-term goals in this area, but nothing major comes to mind. I thoroughly enjoy using these funds for making family memories.
A great article on some areas for improvement in your financial life. One of my main goals for the early part of 2006 is #10 on this list: craft a long-term investing plan.
I have a decent handle on our family finances, but there is a lot of room for improvement, especially in the retirement basket area. I feel pretty good about the security basket.
The dream basket is totally invested for the short-term right now (1-24 month time frame). We use it mainly for family vacation funds. I'd like to set some mid-term and long-term goals in this area, but nothing major comes to mind. I thoroughly enjoy using these funds for making family memories.
Tuesday, January 03, 2006
Great Interest Rates on Savings Accounts
I've been a huge fan of ING Direct for several years. That's where I keep my emergency cash reserve (security basket). I also put our dream basket money there every month. I like the ability to set up multiple accounts and log in and see them all from a single interface. I also like the ability to add and remove automatic deposits at will. The ability to automate everything is a crucial component to our financial plan.
Though I'm a loyal ING fan, I've been tempted by some great rates at other banks. Here are some of the most recent rates I've seen:
ING Direct: 3.8%
EmigrantDirect.com: 4.0%
hsbcdirect.com: 4.25%
There are others, but these are the ones that caught my eye. A great rate is not enough. Great customer service and quality of the company both factor into the equation.
So, in the interest of earning more interest, I'm going to do a test and see how these companies stack up to ING. The bar is set pretty high. I'm interested to see how they fare.
Though I'm a loyal ING fan, I've been tempted by some great rates at other banks. Here are some of the most recent rates I've seen:
ING Direct: 3.8%
EmigrantDirect.com: 4.0%
hsbcdirect.com: 4.25%
There are others, but these are the ones that caught my eye. A great rate is not enough. Great customer service and quality of the company both factor into the equation.
So, in the interest of earning more interest, I'm going to do a test and see how these companies stack up to ING. The bar is set pretty high. I'm interested to see how they fare.
Monday, January 02, 2006
Best Online Broker
Scottrade
This company wins the award in my book. I've used a company that was purchased by Ameritrade (can't remember the name), Ameritrade, and now Scottrade. I love these guys!
Top 5 Reasons I Love Scottrade
1. $7 commissions
2. No inactive account fees
3. No account maintenance fees
4. Only $500 required to open an account
5. Super friendly customer services folks
Ameritrade is not very friendly for the buy-and-hold investor. An inactive account fee is levied during each quarter in which you do not place a trade. That is the primary reason I left Ameritrade.
Apparently Ameritrade is planning to acquire TD Waterhouse. I don't know how that will shake out, but I'm sure the two companies combined will be a force to be reckoned with.
I have not used ETrade at all. I hear positive things about them, but Scottrade was a better fit for me right now.
This company wins the award in my book. I've used a company that was purchased by Ameritrade (can't remember the name), Ameritrade, and now Scottrade. I love these guys!
Top 5 Reasons I Love Scottrade
1. $7 commissions
2. No inactive account fees
3. No account maintenance fees
4. Only $500 required to open an account
5. Super friendly customer services folks
Ameritrade is not very friendly for the buy-and-hold investor. An inactive account fee is levied during each quarter in which you do not place a trade. That is the primary reason I left Ameritrade.
Apparently Ameritrade is planning to acquire TD Waterhouse. I don't know how that will shake out, but I'm sure the two companies combined will be a force to be reckoned with.
I have not used ETrade at all. I hear positive things about them, but Scottrade was a better fit for me right now.
My Retirement Basket
Currently, my retirement basket is made up of the following accounts:
- 401k at my work (John Hancock Pensions)
- Rollover IRA from my previous employers' 401k accounts (Scottrade brokerage account)
- Traditional IRA for me (American Funds)
- Roth IRA for my wife (T. Rowe Price)
- SIMPLE plan from the company my wife owns (T. Rowe Price)
- Regular brokerage account (Lincoln Financial Advisors)
We regularly contribute to the 401k, SIMPLE plan, and brokerage account. We'll begin contributing to the IRAs in 2006. The rollover account is essentially a holding place for any old 401k money.
In all honesty, things aren't very balanced in these baskets. I'm not an expert on asset allocation, however one of my goals for 2006 is to figure out a better way to manage these accounts and find some balance.
I'm contributing 15% of my gross income to this basket. Ultimately I'd like to be at 20%. My wife laughs at this since 10% use to be enough. As soon as we achieved that goal, I wanted to bump it to 15%. Now that we are there, I'd like to bump it to 20%. She jokes that what I really want is to put 80% into this basket, buy some Ramen noodles with the rest of it, and live in a single-wide trailer. I tell her not to give me any ideas...
Saturday, December 31, 2005
Password Manager and digital wallet for Pocket PC, Palm and Smartphone.
Password Manager and digital wallet for Pocket PC, Palm and Smartphone.
With all the different bank accounts, brokerage accounts, and email accounts one has there is a real challenge in remembering usernames and passwords for every site. This little piece of software solves that problem and is a "must have" in my book.
EWallet is more than just a password manager. It's like a wallet and a safe all in one. And it's much more secure that the Post-It® notes you have attached to your monitor.
There are differnt versions available for Pocket PC , Palm, Smartphones, and Windows desktops. I purchased the Professional edition so I can synch my eWallet on my desktop and my PocketPC.
There's a 30 day trial available if you want to check it out, but I trust you'll find it to be invaluable.
With all the different bank accounts, brokerage accounts, and email accounts one has there is a real challenge in remembering usernames and passwords for every site. This little piece of software solves that problem and is a "must have" in my book.
EWallet is more than just a password manager. It's like a wallet and a safe all in one. And it's much more secure that the Post-It® notes you have attached to your monitor.
There are differnt versions available for Pocket PC , Palm, Smartphones, and Windows desktops. I purchased the Professional edition so I can synch my eWallet on my desktop and my PocketPC.
There's a 30 day trial available if you want to check it out, but I trust you'll find it to be invaluable.
Friday, December 30, 2005
Million Dollar Idea
Cash pours in for student with $1 million Web idea
I attended a lecture in college in which the speaker claimed that everyone will have at least one "million dollar idea" in his or her lifetime.
"The difference between you and me," he said, "is that I'll actually take action on my ideas."
Apparently Alex Tew already found his at the ripe old age of 21.
Most of my ideas so far have been hundred dollar or thousand dollar ideas.
What million dollar ideas do you have tucked away that might alter your financial future?
I attended a lecture in college in which the speaker claimed that everyone will have at least one "million dollar idea" in his or her lifetime.
"The difference between you and me," he said, "is that I'll actually take action on my ideas."
Apparently Alex Tew already found his at the ripe old age of 21.
Most of my ideas so far have been hundred dollar or thousand dollar ideas.
What million dollar ideas do you have tucked away that might alter your financial future?
Thursday, December 29, 2005
The Mystery of the Three Baskets
Okay, so it's not really a mystery, but the story of the three baskets has literally changed my life.
A couple of years ago I happened upon a book called Smart Couples Finish Rich. In it I learned of three baskets (you can call them buckets or pockets or whatever you wish). Those three baskets are:
A couple of years ago I happened upon a book called Smart Couples Finish Rich. In it I learned of three baskets (you can call them buckets or pockets or whatever you wish). Those three baskets are:
- The Retirement Basket
- The Security Basket
- The Dream Basket
These baskets are essentially the primary areas of your financial life. Simple, I know, but my brain likes it when things are simple.
The Retirement Basket
This is where things like an IRA (Roth or Traditional), a 401k, or any other money or any other accounts dedicated to retirement belong.
The Security Basket
This basket includes insurance (life, medical, disability, etc.) and an emergency reserve (3-24 months worth of cash).
The Dream Basket
This is my wife's favorite. It's not that she dislikes the other baskets. She agrees they are good things. They just aren't a lot of fun! The purpose of the dream basket is to save for the fun things. Vacations, decorations for the house, scrapbooking supplies, new golf clubs...they all come out of the dream basket.
Though it's my sweetie's favorite, this is a very important basket for me as well. I'm a saver. I like to save and invest and watch our portfolio grow. If it were up to me, we'd save 10 times what we are saving now. But in marriage there are compromises. That's where the dream basket comes in. I get to save and she gets to spend, but we each benefit.
So, David Bach changed my financial view of the world with a simple metaphor that we use to this day. The purpose of this blog is to share a little about my three baskets and what goes in them. None of what is presented is rocket science, nor will this information bring world peace, but it might give a few folks some peace of mind regarding their personal finances.
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