Monday, October 31, 2011

Leftover Halloween Treats

For many years, we've been giving regular size candy bars for Halloween trick-or-treaters.  Unfortunately, we tended to overbuy and had significant amounts of candy left over.  While we liked the candy, we didn't particularly like eating lots of it.  It would take six months for us to eat through the leftover candy.
 
For this year, we assumed that we would need to eat leftover treats. So we bought treats that we would be OK with eating: pretzels.   Of course, pretzels weren't as big a hit with trick-or-treaters.  One little girl gave her pretzels to her brother after seeing them.  No one ever gave away a regular size candy bar. :-)
 
Once again, we overestimated the number of trick-or-treaters and have about 30 packages of pretzels left.   However, we'll be able to finish the extra treats with no problem this year.
 
For more on Strategies and Plans, check back every Monday for a new segment.
This is not financial or Halloween advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC

Sunday, October 30, 2011

Back in Technorati's Top 100 Finance Blogs

A year ago, My Wealth Builder was among the Top 100 Finance and Top 100 Business blogs in Technorati.   In early 2011, My Wealth Builder fell out of both top 100 rankings.  I am now happy to report that My Wealth Builder back into the Top 100 Finance blogs at #44 and closing in on the Top 100 Business blogs at #119.  (Rankings as of October 30, 2011.)

One correlation I found was that the ranking decline happened soon after I stopped submitting posts to Money and Finance carnivals when I started a temporary full time job.   The other correlation is three weeks ago I started submitting posts to Money and Finance carnivals again.  In that three weeks, My Wealth Builder's Finance and Business blog rankings improved significantly.  

I will again be regularly submitting My Wealth Builder's posts to Money and Finance carnivals since my temporary full time job ends shortly.   By the end of November 2011,  I expect to return to both the Top 100 Finance and Top 100 Business blog Technorati rankings.  (My Wealth Builder's current rankings are here.)  Update:  On October 31, 2011, My Wealth Builder was #88 in for Business blogs and #44 for Finance blogs. :-)

For more on  New Beginnings, check back every Sunday for a new segment.

This is not financial or blogging advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC

Saturday, October 29, 2011

Student Loan Debt Relief

"If it sounds too good to be true, then it probably is."  ~ adage

The Obama administration just announced a relief program for student loan debt.   “College graduates are entering one of the toughest job markets in recent memory, and we have a way to help them save money by consolidating their debt and capping their loan payments,” said Education Secretary Arne Duncan on a conference call with reporters on Tuesday. “And we can do it at no cost to the taxpayer.”

The final statement leads me to wonder who it will cost.  After all, if the goverment can magically make all debt cheaper at no cost to the anybody, why wouldn't the government apply it to all debt?

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC

Friday, October 28, 2011

Retirement versus Un-Retirement

I've tried retirement and I've tried un-retirement and I like retirement better.

Since my retirement in October 2007, our savings and retirement accounts have been hobbled by the Great Recession. Therefore,  I've been trying to reduced our withdrawal rate by working various part time jobs.   In 2008, I earned 6% of our annual expenses.  In 2009, the percentage earned was 15%.   In 2010, I increased the percentage earned to 43% due to multiple part time jobs.   In 2011, I will earn about 86% of our annual expenses due to a temporary full time job.

I could have continued working the temporary full time job, earning 116% of our annual expenses.  The organization offered me the option to accept a permanent full time job.   However, I decided to gracefully decline and go back into retirement. My earnings will drop to about 10% of annual expenses.

My simple reason for going back to retirement?    A little work for a company, like up to 10 hours a week, can be fun.   A lot of work for a company, like a full time job, is real work and generally isn't much fun.  Not only was I spending over 40 hours a week working.  I was spending many non working hours thinking about work.  It was just like being back at my old job before retirement.  Definitely, I didn't want to sign up for that situation again :-)

In addition, I missed the time flexibility I had in retirement. I missed having lunch with my daughter at school whenever I wanted.   I missed  trying new jobs.   I missed working on things and ideas that I like.  I missed not checking a work schedule to decide whether to do something fun. 

Last, I finally figured out the work I'm doing isn't making much difference in whether our retirement and savings accounts would be sufficient or not.  Yes, it did make some difference, as my spouse will remind me :-)    However, a conservative estimate is that we have enough funds for 35 years of retirement and the work I've been doing doesn't have much impact on that estimate.
For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial or retirement advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC

Thursday, October 27, 2011

The College Education Trap

Since the mid nineties, the U.S. economy has seen quite a few bubbles and subsequent collapses.  First, there was the Internet stock market bubble and collapse.  Then, there was the housing bubble and collapse.  That resulted in a lifestyle and wage bubble collapse.  Now, it appears that college education is another bubble that is collapsing.  As a result, a college education has become a financial trap for an increasing number of graduates.

As a child, I was told that a college education was the path to a better future.  When I graduated from college in 1980, I was able to get a job even though the economy was in recession.    Since my degree was in engineering, I know that my college education helped me get a higher paying job.  In addition, my student loans were about 40% of my salary since tuition costs were much lower.  

A college education seemed like such a good idea that the Federal Government got involved to make attending college more affordable through expanding the student loan program.  The idea was to enable everybody to attend college and get that higher paying job.

Unfortunately, graduates are finding out that a college degree no longer guarantees a job, much less a higher paying job.  In addition, the cost of a college education has significantly increased due to demand created by student loan availability.   For example, in 1979 a friend of mine paid $1500 to attend a state university.  That same school costs $15000 to attend now, a ten fold increase.   In extreme cases, student loans can be as high as 2-3 times a graduates starting salary making debt a significant burden.   For reference, student loan debt just exceeded credit card debt at $1 trillion and is growing at $100 billion per year.

The solution is make college part of a wealth building plan.  For me, the purpose of college is to obtain skills and knowledge to get a higher paying job, at a reasonable financial cost.  If a chosen field of study cannot meet these criteria, then perhaps other alternatives should be considered.
For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial or education advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC

Wednesday, October 26, 2011

Good Debt Myth Debunked

Prior to the Great Recession, a common rationalization was to categorize debt as either good or bad.  Good debt was OK to have have.  Bad debt was not. People typcially put home mortgages and student loans in the category of good debt.  Car loans sometimes were good debt.   Credit card balances and payday loans were typcially bad debt.

However, the Great Recession has made even good debt look pretty bad.


  • Home mortgages.  This type of debt used to be the epitome of good debt.   Homes were appreciating assets.   Mortgage interest was subsidized by tax deductions.  Mortgage payments increased equity while rent payments were considered wasted.

    However, since the 2006 peak, home values have plunged 31%.  25% of homeowners have underwater mortgages where the value of the mortgage debt is great than the value of the home.  Mortgage interest deductions have low value when mortgagees can no longer make the payments.   In many areas, rents are now much lower that the mortgage being paid on similar properties.



  • Student loans.  This type of debt used to be justified as an investment.  College graduates earn about 60% more than high school graduates on an annual and lifetime basis.  In 2008, those with bachelor's degrees averaged $55,700 versus $33,800 for those with only a high school diploma.

    However, the high cost of a college education makes it more difficult of graduate to get a return on the investment.  With the cost of a top private college education exceeding $200,000, it would take 10 years at the higher paying job to recoup the cost of attending college.  Add to that the cost of repaying student loans used to finance the college education.   That's assuming the graduate can get a higher paying job, since only 51% are starting in jobs that require a college degree.

  • Home mortgages and student loans are no longer viewed as good debt.    Now they are just debt, as they always should have been.   As with any debt, home mortgages and student loans need to managed prudently to ensure they don't become a financial burden.
     
    For more on The Practice of Personal Finance check back every Wednesday for a new segment.

    Photo Credit: morgueFile.com, Author Name

    This is not financial or debt advice. Please consult a professional advisor.

    Copyright © 2011 Achievement Catalyst, LLC

    Tuesday, October 25, 2011

    The Wealth Builder Carnival #51

    Welcome to the fifty-first edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized them into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

    And now onto the Carnival:


    Earning


    Alaina Ellington presents The Wow Factor: New Addition To Swagbucks! posted at Living Simplistically, saying, "Learn about the new addition to the totally awesome site, Swagbucks, which gives me a way of freely earning an income online simply by searching, playing games, and doing tasks!"

    Barb Friedberg presents BEST MONEY TIPS FROM PEOPLE LIVING THEIR DREAMS (Part 1) posted at Barbara Friedberg Personal Finance, saying, "You must take action to become wealthy. Get started now!"

    J.B. presents Finding a Job After School In a Terrible Market posted at My University Money, saying, "You often hear the saying "wait until you see the real world, its a lot harder then." What do you expect in life after school?"

    vinman presents Starting Drop Shipping Home Business posted at Internet Home Business Opportunities, saying, "Want to extra income online? Want to convert a small beginning into a life style changing income. Internet business is the best vehicle and the Drop Shipping business is the best option to start your own business. Know how to start your own drop shipping business."


    Insuring and Protecting


    Chelsea Prescotti presents Preventing and Stopping Identity Theft | CreditScore.net posted at CreditScore.net, saying, "Identity theft is a serious crime, one that has become increasingly prevalent in our modern, technologically advanced society. Identity theft has evolved considerably since it first dawned; it is not simply an unauthorized charge on a credit card. Identity thieves can use your information to apply for loans, start businesses, and even traffic illegal drugs, all under your own name. As we use and store more information online, the threat of identity theft increases as cyber criminals have more ways to access your private information. Fortunately, there are active steps you can take to safeguard your information, detect suspicious activity, and defend against identity theft."

    Boomer presents Power Of Attorney: Why It’s So Important posted at Boomer & Echo, saying, "When you appoint a person with “power of attorney”, you trust that person to make decisions for you in case you’re unable to because of illness, accident or absence."


    Investing


    Corey presents Hiring a Property Manager: What it offers you posted at 20's Finances, saying, "Some may not like the idea of real estate as an investment because of the idea of dealing with tenants and the potential damage that any tenant could cause. However, hiring a property manager can help free up your time and protect your investment."

    Investor Junkie presents Lending Club vs. Prosper posted at Investor Junkie, saying, "New investors have two great choices in the peer to peer lending industry."

    Dividends4Life presents 15 Dividend Stocks That Have Paid Dividends For Over 110 Years posted at Dividend Growth Stocks, saying, "Most CEOs give lip-service to their commitment to shareholders, but what happens when times are hard. When the economy turns down and the future looks bleak, will the company hoard cash and stop its dividend or put action behind its words? The key to successfully selecting dividend growth stocks is the ability to identify companies that will not only maintain but grow their dividend."

    Bill Smith presents Four Reasons to Try Forex Trading posted at Forex Trading System Central, saying, "If you’re considering starting up a Forex trading account of your own, here are four good reasons why you should go ahead and take the plunge."

    Billy Hart presents Stock Market Indexes, What are The Dow, The S&P 500 and The NASDAQ – Investing Basics posted at inMessment - Life Investments | Stocks | ETFs | Money, saying, "When one starts investing in the US Stock Market, one soon become acquainted with the big thee stock market indexes: The Dow, The S&P 500 and The NASDAQ. What are these three indexes that are listed on the home page of just about every major US online investment site?"

    Dividends For The Long Run presents Beginner Investing Mistakes posted at Dividends For The Long Run, saying, "Many investors stumble when they start to build their portfolio as they realize that they are still learning how to invest while at the same time risking real money. I go over three mistakes I made that were both completely avoidable and hazardous to my wealth."

    Dividend Growth Investor presents Ten Top High Dividend Growth Stocks for Long Term Returns posted at Dividend Growth Investor, saying, "Dividend Growth Stocks are one of the best kept secret in the investing world. After all, these are high quality companies which have strong competitive advantages that allow them to generate rising earnings over time. As a result, most of these companies generate so much in excess cash flow, that they are able to pay a higher dividend over time without sacrificing long term growth."

    Aussie Investor presents Highest Dividend Paying Shares - The Micro-Caps posted at Australian Investing, saying, "Over the long term dividends make up a large part of a share portfolio's returns. With that in mind, lets see what attractive dividend yields are available to us at the moment. We've already looked at the large caps and the small caps, so now it's time for the micro caps."


    Living Frugally


    Jon Elder presents Biblical View on Paying with Cash to Get Out of Debt posted at Free Money Wisdom, saying, "So simple, yet so powerful. Pay cash from now on, pay your debts faithfully and even if you do nothing else, in a few years, you’ll be debt free."

    Jason Price presents Free Fun Things to Do posted at One Money Design, saying, "Looking to save money? Here are a number of free fun things to do."

    Rodney Maley presents Eating Well on $5 a Day posted at Life-fficient, saying, "You don't have to spend a lot to eat well. Here's an example day of eating on a budget."

    John presents iPhone 4S: International Use, Mobile Hotspots and “Anytime” Minutes posted at Wallet Blog, saying, "By now, everyone knows what Verizon, Sprint, and AT&T have to offer in terms of standard data, texting and talk plans for the new iPhone 4S. But what about the niche aspects of major carriers’ iPhone offerings? We decided to take a look at how these networks differ in terms of international usage costs, mobile hotspots and how “Night & Weekend” minutes are classified so we can help save you some money."

    Jason@LiveRealNow presents Why I Hate Payday Loans | Live Real, Now posted at Live Real, Now, saying, "When an advertiser contacts me, my rate sheet says very clearly that I will not take payday loan ads. The reason for that is–in my mind–when I accept an advertiser, I am–in some form–endorsing that company, or at least, I am agreeing that they are a legitimate business and I am helping them conduct that business."


    Saving


    DJ presents The Definition of a Custodial Account posted at The Family Wallet, saying, "In its simplest terms, a custodial account is any account which is created for the benefit of a minor."

    Marie presents How Grandparents Can Help to Fund College Educations posted at Money Spending Mommy, saying, "There are many ways in which grandparents can help their grandchildren with college costs. Here are some to consider."


    Taxes


    Jessica Bird presents UK is the world’s third most expensive place to buy petrol | posted at CarTaxBands.org, saying, "If you thought the price of gas was high in the US you should be glad that you are not living in the UK. The UK has the third highest price of gas in the world."

    Al Peters presents How Much Can you Earn Before Paying Tax in 2011 posted at Tax Return Blog, saying, "Tax allowances and brackets change each year. This post shows highlights how much you can earn before you need to pay tax."

    That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

    Technorati tags: , .  

    For more on Ideas You Can Use, check back every Tuesday for a new segment.

    This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

    Copyright © 2011 Achievement Catalyst, LLC

    Thursday, October 20, 2011

    Choosing a Career in First Grade

    In my daughter's first grade class, one of the activities is for students to tell what they'd like to be when they grow up.  There were some great standard answers: doctor, vet, and astronaut.  There were some cool answers like a dirt bike rider.  There was some really cool answers like a pirate.

    I really like the pirate choice.  First, I think kids shouldn't be too serious about careers as such a young age.  Second, I think being a pirate can have a number of financial benefits.   Here are a few:
  • No college education needed.  Think of the money the parents will save.  After high school, or even earlier, the child can start his career.  Name one pirate that has a college degree:-)


  • Free travel.  Pirates spend most of their time in international waters going from port to port. A pirate probably gets to visit a lot of different countries.


  • No taxes.  A pirate gets to keep all of their money since pirates probably don't file a tax return.  If  a tax return was filed, he could put "pirate" down as his occupation.

  • Of course, I'd be worried if this had been a high school class.  But I think first graders should still have the latitude to be what ever they want to imagine themselves doing.  The real world will catch up soon enough :-)

    For more on Crossing Generations, check back every Thursday for a new segment.

    This is not financial  or cool advice. Please consult a professional advisor.

    Copyright © 2011 Achievement Catalyst, LLC

    Wednesday, October 19, 2011

    Financial Stupidity by Banks

    I used to think that banks were financially savvy.  While the financial crisis may be sufficient proof, I now have personal experience with the financial ineptitude of banks.   Here are my experiences:
  • Home mortgage.  In 2009, we decided to refinance our home mortgage since interest rates had fallen to 4.5%.  Since I had retired, our regular income (wages, interest and dividends) was very low and income was the main qualification criteria..  The bank would not include capital gains or financial assets as part of the qualification calculations.  So the bank would only refinance our loan at 1/3 of the current balance.

    For reference, we were current on our mortgage payments, had never missed a payment, and had even made additional payments against principal.  We had over 60% equity and had sufficient financial assets to pay off the mortgage.   None of this mattered to the bank.   They only wanted to loan money based on "guaranteed income."

    I told them that their criteria were ridiculous since we had enough financial assets to pay off the mortgage by over two times.   The bank said that didn't matter.   So I told them to send us the pay off papers.

    So we paid off our mortgage on May 20, 2009 and achieved zero debt.  Since the bank tightened its lending standards, it probably didn't re-lend the money.  So instead of the bank receiving 4.5% on our mortgage, it's getting 0% from me.  Is it any surprise that banks earnings are falling?


  • Credit cards.  Recently, I needed to make a large credit card payment that exceeded the credit limit.  Since sufficient cash was in the bank, there wasn't a funds issue.  The issue was that only payment by credit card would be acceptable.

    So I came up with a clever way (I thought:-)to make the payment.   I decided to put a credit balance on the credit card.  Thus, I thought, the bank would let me over charge my card because the account had a credit balance of three times the credit limit.  I even talked to three customer service representatives and one agreed with my plan. 

    So I charged up to my credit limit without concern.  Unfortunately, my charging stopped at the credit limit.   It turns out I couldn't charge more than the credit limit, much less three times the credit limit, since bank rules would not allow it.  I had to wait 3-5 days for the charges to post and have the credit availability restored.

    The bank would not let me spend the money even though is was already paid into the account.  The bank wouldn't  give me a temporary credit limit increase nor would they post charges faster.   I had to follow bank rules to spend the money I had already paid them.  I told a couple supervisors at the bank that the rules were stupid.  



  • I can understand a bank being conservative to protect against risky loans.   However, banks have swung from reckless loans to not making loans to very qualified applicants or people that have pre-paid.   When a bank turns away zero risk candidates, I consider that stupid.   
     
    For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

    This is not financial advice. Please consult a professional advisor.

    Copyright © 2011 Achievement Catalyst, LLC

    Monday, October 17, 2011

    Three Types of Mentors

    A colleague of mine once explained that a person needed three mentors, not just one.   Here are the three types of mentors he described:
  • Career.  This is the type of mentor that most people consider.  This is someone that helps with career coaching, finding good assignments, and advocating within the organization.  This type of mentor is very important for career advancement.


  • Organization.  This type of mentor knows how to get things done within a company.  He can help with navigating the bureaucracy.   He can help identify key supporters needed.  This type of mentor is  important for getting work done effectively.


  • Expertise.  This type of mentor is a subject matter expert.  He can help with necessary knowledge in a career field.  This type of mentor is important for developing judgement credibility.  
  • When I was working, I primarily had a career mentor during my mid-career.  I didn't have the other two mentors.  When I heard my colleague's three types of mentors, the concept resonated with me.  I now share this three mentor concept with new professionals that have an interest in advancing their careers.

    For more on  Ideas You Can Use, check back every Tuesday for a new segment.

    This is not financial or career advice. Please consult a professional advisor.

    Copyright © 2011 Achievement Catalyst, LLC

    Trading the Channel

    Since August 10, 2011, the S&P has been in a a trading range between 1120 and 1220.  Last Friday, October 14, 2011, the S&P closed at 1224.58.   Last week, I decided to start trading the channel.  I sold a couple stocks (Boeing and Century Link) that I had purchased, coincidentally, on August 10, 2011.  Then I sold one of my spouse's purchases, Nordstrom.  Today, I sold my remaining shares of Monsanto, which had been a core holding at one time.

    Today, the market declined and the S&P 500 lost almost 24 points and closed at 1200.86.  Except for Nordstrom, every stock is already below its selling price.  (On reviewing the charts for all the stocks and the S&P 500 index, I've concluded that maybe I shouldn't have sold Nordstrom.)  At this point, I plan to wait until the S&P is close to 1120 and then buy back all the stocks that I recently sold.  Then wait for 1220, sell and repeat.

    If the market should go below 1100, I will consider it a buying opportunity and put 10% of our funds back into the market.

    Disclosure:  We have no positions in any of the stocks mentioned in this post.

    For more on Strategies and Plans check back every Monday  for a new segment.

    This is not financial or investing advice. Please consult a professional advisor.

    © 2011 Achievement Catalyst, LLC

    Sunday, October 16, 2011

    Expecting Something Big to Happen

    "Get used to disappointment." ~ masked man in The Princess Bride
     
    The EU has promised a solution to the sovereign debt crisis by the end of this month.   Timothy Geithner has promised support from the U.S.   The global stock markets are cheering with major indices rising 5-7.6% last week.  If a viable positive solution is offered next week, that would be big.  The markets would soar.
     
    I hope the market results of last week are correct in predicting a positive solution.  However, I'm not betting on it. For now, the downside risk is much higher than the upside potential.  In Europe, Greece may default or Germany may withdraw from the EU.  But there are other non-European elements.  The Occupy movement may move away from a peaceful demonstrations and start using force.  The U.S. may fall back into recession.  The upside potential from corporate earnings is not sufficient to offset these downside risks.
     
    For now, I expect the conflict of upside potential versus downside risk to keep the stock market in a trading range until the big event happens.   Hopefully, the big event will happen sooner rather than later so that I can get  a better indication of the near term market direction.  In the meantime, I plan to sell into this rally since I believe the big event is likely to be negative.
     
    For more on  New Beginnings, check back every Sunday for a new segment.

    This is not financial advice. Please consult a professional advisor.

    Copyright © 2011 Achievement Catalyst, LLC

    Saturday, October 15, 2011

    Is it Different this Time?

    "This time is different." ~ adage about financial situations
     
    In the past decade, I've heard the comment, "This time it's different." numerous times.  For the Internet stock bubble.  For the housing bubble.  For offering or using risky no money down mortgages.  For taking enormous student loans to attend college.  For using one's home as an ATM.   In all these cases, it was different for awhile  
     
    Eventually, time proved that it wasn't different.   The Internet stock and housing bubble popped.  Risky no money down mortgages were a significant factor in the financial and housing crisis.  Many recent graduates have significant student loan debt and are unable to find jobs.   Almost 30% of homeowners have underwater mortgages.

    Now, "This time is different." seems to apply to investing in the stock market.   Many people, including me, have taken money out the stock market.   People are investing in bonds or cash equivalents, even though interest rates are very low.  Perhaps, this time is different :-)   More than likely, it is not. 

    So the question for me is not if, but when to get back into the stock market.  While I believe the market will be higher ten years from now, I need to be more cautious about market volatility since we're currently retired. Currently, I still think the downside risk of the market is still relatively high.  So my plan is to wait until after October 31, 2011 (the deadline for EU bank recapitalization plan) and  decide if the market downside risk is reduced. 
     
    For more on  Reflections and Musings, check back every Saturday  for a new segment.

    This is not financial or investing advice. Please consult a professional advisor.

    Copyright © 2011 Achievement Catalyst, LLC

    Friday, October 14, 2011

    Two Secrets for Retirement Success

    Recently, I ran into the authors of a retirement strategy book, which I had not read.  So I asked him what were some secrets were for retirement success.  The author shared the following two points to consider.
  • Recognition of freedom.   In retirement, people have more freedom to choose what they would like to do with their time.  They are no longer restrained by the need to work for money.  Retirees can choose new careers, as the author did,  that are much different from their former jobs.  Or they can choose to do hobbies, volunteer work or many other choices.  Many retirees don't realize the level of freedom they have.


  • Live within means.  The author believed a common mistake was to create a lifestyle vision and then determine the financial requirement.   His recommendation is to understand one's financial situation and then develop a lifestyle consistent with the financial means.

  • I thought these were two excellent recommendations for retirement success.   In my case, I think both points are true.  Probably worth getting the book and learning about the other recommendations for retirement success that the author makes.
     
    For more on  Reaping the Rewards, check back every Friday for a new segment.

    This is not financial  or retirement advice. Please consult a professional advisor.

     Copyright © 2011 Achievement Catalyst, LLC

    Thursday, October 13, 2011

    Strategy Tips for Taking the ACT Test

    Since 2010, I've been tutoring students to prepare for the ACT college entrance exam.   I've been able to help many students increase their test scores.   Here are my top three tips:


  • Review content.    Know what is going to be tested.  Study and practice topics which are no longer familiar.  For example, English grammar is a lost skill in today's world of texting and acronym usage.   Relearning English grammar rules is often an important activity to prepare for the ACT.

  • Do the easier problems first.   All that matters is the number of problems answered correctly.  There is no bonus for getting the harder problems.  Since there is a time limit, doing the easier problems first usually ensures more right answers.

  • Guess. In the ACT, there is no penalty for an incorrect answer.   Guess, rather than leave an answer blank.   There is a 25% of getting a correct answer.  If some choices can be eliminated, the probability can be a high as 50%.

  • Through these strategies, I have helped students improve about 3 points.  In some cases, students have increased their score by as much as 9 points.


    For more on  Crossing Generations, check back every  Thursday for a new segment.

    This is not financial or education advice. Please consult a professional advisor.

    Copyright © 2011 Achievement Catalyst, LLC

    Wednesday, October 12, 2011

    Billionaires and Millionaires

    I think the Obama administration's definition of millionaires and billionaires is interesting.

    To me, millionaires have over $1,000,000 net worth. Billionaires have over $1,000,000,000 in net worth.  Some people may have a less stringent definition.  Instead of net worth, they use asset value, which doesn't account for debt.  In both cases, the basis is still having a million or a billion dollars, in net worth or assets.  

    I had never heard the definition of a millionaire or billionaire being someone making $200,000 (single) or $250,000 (married).   As far as know, neither had anybody else who has good understanding of finances.

    For more on The Practice of Personal Finance, check back every Wednesday for a new segment. 

    This is not financial advice. Please consult a professional advisor.

    Copyright © 2011 Achievement Catalyst, LLC

    Tuesday, October 11, 2011

    The Wealth Builder Carnival #50

    Welcome to the fiftieth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized them into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

    And now onto the Carnival:


    Earning


    Matt presents How to buy a business bad credit and no money posted at ocMOZ.com, saying, "Buying a business with as little as $200 in your pocket!"

    B.B. presents Quick and Easy Passive Income Ideas posted at Beating Broke, saying, "When you’re first getting started, there are several ways you can set up some small passive income streams that will provide you with different forms of passive income. Here’s a few passive income ideas."


    Investing


    Dividends4Life presents 7 High-Yield Dividend Achievers With 25 Years of Increases posted at Dividend Growth Stocks, saying, "While the S&P 500 Dividend Aristocrats may be the most recognized list of dividend stocks, it is certainty not the largest. Since the Dividend Aristocrats list is limited to only stocks included in the S&P 500 Index, many smaller stocks are excluded. To expand the population of potential investments, many investors look at the dividend growth stocks included in Broad Dividend Achievers™ list."

    Mike Piper presents A Request for Vanguard (or Fidelity, or Schwab…) posted at The Oblivious Investor, saying, "Why don't more brokerage firms allow for one-step rebalancing, rather than having to enter a separate transaction for each of your holdings?"

    My Journey presents October 2011 Dividend Investment Portfolio Update posted at My Journey to Millions, saying, "About 18 months ago, I started my Perpetual Income Machine which then eventually morphed into my dividend investment portfolio. Now every couple months I update those specific stocks which are on my “watch list” for the following months to come."

    Investor Junkie presents When Should You Sell A Stock? posted at Investor Junkie, saying, "When trying to decide when to sell a stock, you need to take a step back and figure out how selling (or not) might affect you in the long run."

    Joshua M Schultz presents Inter-Strategy Correlation Risk posted at The Corner Office, saying, "A talk on the diversification benefits of Multiple Strategies"


    Living Frugally


    Marie presents Smaller House = Smaller Mortgage = Better Lifestyle posted at Money Spending Mommy, saying, "A small home may not be as glamorous as a large mansion. But it does offer advantages of its own. These include:"

    Jon Elder presents Let Savings Fall Onto Your Lap posted at Free Money Wisdom, saying, "As a massive money-saver, I really enjoy the fact that my off-season vacationing can lead to a lot of savings, but most of all I appreciate dealing with a lot less crowds!"

    Mckay Stevens presents Buying Versus Renting posted at Vacancy.com, saying, "To buy or to rent is a perplexing question. Both can be good options if you know how to gauge your situation. Learn the pros and cons of both as well as some great tips."


    Retiring


    David Leeman presents Financial Planning for Retirement, Basic Financial Planning posted at Financial Freedom Advantage, saying, "It is never too early to start basic financial planning. Though it is a process that is easy to put off, too many find themselves at the end of a working career with no idea how they will survive financially for the next several years."

    Boomer presents Minimize Your Estate Costs posted at Boomer & Echo, saying, "There’s an old saying that goes, “The only things that are certain are death and taxes.” But, even after you die, you still don’t get out of paying income tax."

    Lazy Man and Money presents Is Social Security a Ponzi Scheme? (Part 3: How to Fix Social Security) posted at Lazy Man and Money, saying, "I still plan for my retirement as if Social Security doesn't exist - simply because a lot can happen in the 30 years before I get to take it. If I do end up receiving benefits, that’s just frosting on the retirement cake."


    Saving


    Dividends For The Long Run presents Book Review: The Millionaire Next Door posted at Dividends For The Long Run, saying, "A review of Dr. Thomas J. Stanley's bestseller The Millionaire Mind. I expand on three major concepts from the book and look at how they can be used to assess an individual's progress toward achieving true financial health as measured by net worth."


    Taxes


    Mark Roberts presents How To Choose The Right Filing Status posted at Tax Brackets, saying, "This article provides a guide to choosing the right filing status for your tax return."

    Gemma Flannery presents Tax Codes and your Personal Allowance posted at Tax Codes, saying, "Each year you can earn a certain amount tax free. This post shows how your tax code is affected by your tax code."

    J.B. presents Simplifying the Tax Code posted at My University Money, saying, "Band aid solutions are never good, and they shouldn't be used on our tax codes."

    Steve Zussino presents The Great American Tax Hunt for Canadians posted at Canadian Personal Finance, saying, "The U.S. Internal Revenue Service is on a campaign to chase down Americans squirreling funds offshore to evade paying taxes. But the crackdown aimed at large-scale tax evaders is also hitting people of more modest means."

    Gregory Stokes presents Your Basic Guide to Child Tax Credit posted at Tax Credit Calculator, saying, "If you have children under the age of 16 you may be able to claim child tax credits. This post is a guide on how to make claim."

    Marie presents How You Can Donate Your Car for Tax Credit posted at Money Spending Mommy, saying, "Donating a car is a great way to help a worthy charity. And it can also save you money on your tax bill."

    Jonathan from Debt Loans presents Tax Deductions for Freelancers, Part 1 posted at Frugal Living, saying, "While you run the risk of getting slammed with taxes because you never had them taken out of your paycheck, there is a silver lining: freelancers can claim a ton of deductions. And when I say a ton I really mean a ton. Below you will find a list of common deductions freelancers can claim when filing their taxes."

    That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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    For more on Ideas You Can Use, check back every Tuesday for a new segment.

    This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

    Copyright © 2011 Achievement Catalyst, LLC

    Sunday, October 09, 2011

    Occupy - Broadening Its Appeal

    The Occupy Movement is an interesting populist expression of dissatisfaction. To build on President Obama's comment, not only the Republicans, but all politicians (including the President himself :-) need to pay attention. Here is how I think the Occupy can continue to gain momentum:

    • Cover 100%.   I think Occupy should represent 100% of Americans.  Singling out 1% seems to be non-inclusive and tends to vilify that small group.  After all, we are all facing this economic disaster together.
    • Choose the right 1%.  If Occupy wants to keep representing 99%, choose the another group to exclude.   To me, the 1% that should be excluded are career politicians.  Career politicians don't seem to get it.   There should be term limits to keep elected officials from holding the same office for multiple terms. 
    • Create distance special interest groups.  Organized labor's involvement in the Occupy movement will be polarizing.   To me, organized labor only represent the 11.9% of American, not 99% or 100%.  Occupy doesn't need organized labor or any other formal special interest group.  
    • Create distance from current politicians.  Charlie Rangel (D-NY) has tried to capitalize on Occupy Wall Street by expressing sympathy for the cause and giving a speech at the New York gathering. To me, all career politicians are part of the problem that Occupy is trying to address.
    The Tea Party was a beginning.  Occupy continues the process.  Before long, Americans will take back the country from the career politicians who are no longer in touch with or governing for the people.

    For more on  New Beginnings, check back every Sunday for a new segment.

    This is not financial advice. Please consult a professional advisor.

    Copyright © 2011 Achievement Catalyst, LLC

    Saturday, October 08, 2011

    Great Rainbow Viewings

    Last spring, we decided to go to our daughter's soccer practice even though rain looked imminent. While driving there, a flash rain storm occurred while the sun was shining. As the rain let up, we were give two great surprises.
    First, we saw a rainbow touch the ground for the first time.   We decided to approach the end of the rainbow since it was only a short distance away.  To our surprise, the end of the rainbow moved every time we got close.   We were always a constant 30-40 yards from the end, and we are driving to close the gap.  Needless to say, we never did find that pot of gold :-)

    Second, while driving home from the cancelled practice, I saw a double rainbow for the second time.  While not as cool as seeing the end of the rainbow, it was still a beautiful sight to see.

    Just think of what we would have missed if we had decided to skip our daughter's soccer practice.
     
    For more on  Reflections and Musings, check back every Saturday for a new segment.

    This is not financial advice. Please consult a professional advisor.

    Copyright © 2011 Achievement Catalyst, LLC

    Thursday, October 06, 2011

    Travelling Without a Cell Phone

    Recently, I made a 9 hour drive for a conference.  Before the trip, when one of my colleagues found out I didn't have a cell phone, he commented, "And you're driving to the conference?"   His point was really, "What will you do if there's an emergency or the car breaks down?"   

    My response was, "What did people do before cell phones existed?  They made the drive and they survived.  If there was an emergency, they got off at the nearest exit.   If they broke down, a passing motorist would help or they could walk to the next exit."    In all the long distance trips I have made, I have never (knock on wood :-)  had an emergency or breakdown.

    As a last resort, I could always let someone with a cell phone report my issue.  Once when I came upon an accident with a minute of it happening.  I used a non-activated car phone to call 911.  (For reference, non-activated phones can still access 911.)   The operator informed me that the accident had already been reported.

    For more on Crossing Generations, check back every Thursday for a new segment.

    This is not financial or safety advice. Please consult a professional advisor.

     Copyright © 2011 Achievement Catalyst, LLC

    Wednesday, October 05, 2011

    October: Bear or Bull Month?

    October. This is one of the peculiarly dangerous months to speculate in stocks. The other are July, January, September, April, November, May, March, June, December, August, and February. ~ Mark Twain
     
    October is supposed to be one of the worst months for the stock market.   People remember the declines of October 1987, October 1997 and October 2008. But the article October: Stock Market Myths and Legends points out that October is the sixth best month since 1958.  In addition, October has marked the end of many bear markets.  Finally, October precedes three (November, December and January) of the best four months for stock market gains, making it the month to buy.

    So I guess it's best to be cautious in October and be ready to buy when the market drops :-)
     
    For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

    This is not financial or investing  advice. Please consult a professional advisor.

    Copyright © 2011 Achievement Catalyst, LLC

    Tuesday, October 04, 2011

    Boycott Monday Night Football

    I find it interesting that ESPN pulled Hank Williams, Jr.'s opening from Monday Night Football.  To me, ESPN has every right to do so.  After all, there is probably a clause in the contract that covers it.
     
    However, I don't like the fact that a company has that much control an individual's 1st amendment rights.   So I am going to make my small statement to protest:
    1. Boycott Monday Night Football.    This is easy for me to do since I don't have cable.  However, I will expand the boycott to establishments that broadcast Monday Night Football.  In addition, I will boycott establishments that broadcast ESPN.
    2. Boycott Disney.  Since Disney is the parent company of ESPN, we won't include Disney as one of our vaction optioins this year.  Good thing we took our seven year old daughter to Disney last year :-)  In addition, I will not buy any Disney stock.
    To note, I don't agree with what Hank Williams, Jr. said.  It's just that I don't think ESPN should have any say in what it's employees say off the job, provided it does not violate any laws.

    Finally, this is probably a sneaky way to be frugal :-)    I now have a reason to excuse myself from going to the after hours social events at bars. 
     
    For more on Ideas You Can Use, check back every  Tuesday for a new segment.
     
    This is not financial, investing ,or social policy advice. Please consult a professional advisor.
     
    Copyright © 2011 Achievement Catalyst, LLC

    Sunday, October 02, 2011

    The New Obama

    While I don't agree with his position, I applaud President Obama for finally taking a clear side on a political issue.  Up until now, President Obama has been trying to leverage his ability (the Gift, subscription may be required) to have all listeners believe the President agreed with them.   I recall having a discussion with a colleague in 2008 before the election.   She was voting for Obama because she felt he represented all her views. 
     
    So I asked, " Is Obama for or against nuclear power?"
     
    She answered, "Against, because he said he would only support nuclear power if it were safe."
     
    To prove my point, I said,  "Well, I think he supports nuclear power because I think its safe."
     
    Her jaw dropped, either because she understood my point, or thought I was stupid for believing nuclear power was safe.
     
    I'm glad that President Obama is finally making it clear what he specifically wants to do instead of letting people think he always agrees with them.  Thank you Mr. President.
     
    For more on New Beginnings, check back every Sunday for a new segment.

    This is not financial  or politcal advice. Please consult a professional advisor.

    Copyright © 2011 Achievement Catalyst, LLC