FIRE Finance

New Money Rules for Financial Security - #3. Earning Potential

noreply@blogger.com (FIRE Finance) — Sun, 05 Jul 2009 21:06:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

When we began disciplined investing through a diversified portfolio, "experts" were of the opinion that the more years one had to recoup losses, the more aggressive one could be. In other words the younger we were the more risk we could take on. Unfortunately we learnt that the rules of money are not so clear cut.

Rule #3: Earning Potential

Old thinking: The longer your time horizon, the more stocks you should own.

New rule: Time isn't everything. You must also consider your earnings potential.

Our take: In the last six years we moved four times and changed jobs twice. Since we were young (half a dozen years ago), and in relatively stable as well as high paying careers, we took the expert advice of investing for the long run in an aggressive mode. After all we had all these years ahead of us to make up for any losses.

Well, half our portfolio and years of savings disappeared just like that when the market tanked in 2008. Unable to stomach any more risk we reallocated our portfolio towards less risk via inflation protected bonds and fixed return investments. To make matters worse, we were laid off which cut off our stable inflow of cash.

On hindsight we wish that we knew about this new money rule of considering our earning potential and its stability while designing our portfolio. Present times are teaching us that no career is high paying or stable forever. We need to adapt to new cash cows and skills with changing times. In that light, capital preservation (a good percentage) should be on our agenda right from the start. This will give a person some bandwidth to create fresh cash inflows according to new necessities.

As you age, the value of your human capital declines, and you'll need to secure more of your savings. So the conventional advice to hold a lot in stocks when you are young and gradually trim back can still make sense.

But not for everyone. The nature of your career may make your human capital more bond-like or more stock-like, says finance professor Moshe Milevsky of York University in Toronto. Tenured professors like Milevsky have human capital that resembles a triple-A-rated bond, especially when they have a solid pension plan. Those lucky souls can dive aggressively into stocks and even stay there as they approach retirement, he says. The human capital of a commission-based mortgage broker, on the other hand, is pretty clearly a stock - and it's not a blue chip. That person should own a fair amount of bonds, even when young.

It is extremely important to assess our human capital and keep some room for adapting it to new careers for creating incomes. Also, keep in view the effect of our careers on our health. If our career is extremely demanding on our health and we have a short shelf life, then capital preservation of our portfolios should be high on the agenda right from the beginning.

A recession brings on new challenges every day. In such times, human capital is one of the most volatile assets in our portfolios. So we do need to learn how to balance our portfolio with this new asset of human capital aka our earning potential.

Question

What are your views and experiences about this idea of adding your earning potential to your portfolio with respect to keeping your financial security intact in the immediate present? We are looking forward towards your feedback.

Stay tuned for our take on New Money Rule #4: Handling Debt next week.

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July 4th - Happy Independence Day

noreply@blogger.com (FIRE Finance) — Fri, 03 Jul 2009 21:04:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

4th July, 2009: We wish you all a happy independence day. 233 years have gone by since July 3rd, 1776 when we adopted the Declaration of Independence and broke the shackles from the Kingdom of Great Britain. This is a special day since it commemorates the birth of a great free nation "The United States of America."

Independence is dear to most of us. This site was started to maintain a log of our journey towards financial independence. The day we break the 9 to 5 shackles of our jobs, we'd celebrate with fireworks :).

Apart from the patriotic overtones what we like best about July 4th is its summer festive tone. The fireworks, carnivals, parades, picnics, barbecues and baseball games are such great fun. We hope that you have a wonderful day. And God bless America.

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Calm Down - Enjoy Your Long Weekend

noreply@blogger.com (FIRE Finance) — Thu, 02 Jul 2009 21:03:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

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Starting A Small Business? Ace these 10 Questions

noreply@blogger.com (FIRE Finance) — Wed, 01 Jul 2009 21:02:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

July 2, 2009: With the growing power of the Internet and e-commerce, it has become easier to own a small business. Consequently the number of small business owners are on the rise. This is really good news since it helps us to be our own boss, do something which we enjoy and also earn a livelihood. Sounds like a win win situation :).

But owning a small business with being fully informed about various legal and tax implications can be disastrous. Thanks to Kiplinger for coming up with a quiz which tests some basic knowledge which all small business owners should know. We fared 8/10. Guess we need to do some more homework before setting up our small business:). Check it out to increase your awareness about small businesses.

10 Questions for Every Small Business Owner

Renting Versus Owning Costs

noreply@blogger.com (FIRE Finance) — Tue, 30 Jun 2009 21:01:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

July 01, 2009: The big debate these days is whether home ownership is still everything it's cracked up to be. Yes, we still get a tax deduction on the amount of interest we pay, but the building of equity is no longer a given with a home mortgage.

There are many areas around the United States with falling home prices, causing some people to be upside-down on their loans and leaving them unable to sell. On top of that, when we buy a home, we are responsible for the maintenance of our property, both interior and exterior. Many people think that once they buy a home, they will automatically build wealth, however, there are times when renting is better. Anytime we take out a loan, we also have to factor in the costs of carrying that debt even before we start to dream about fat returns in the future. This applies to any type of loan whether it is a home mortgage loan, a business loan, or even payday loans.

Costs of Carrying Home Mortgage Debt

The home ownership example is a good way to figure out the types of costs that can creep into finances that impact our lifestyle immediately. Everyone has heard of the adjustable rate home mortgage loans with creeping interest rates. This is one way that carrying a loan for a long period of time can cost us more every year. So, the terms of the loan are very important to understand before we sign.

Another way that homeownership costs can sneak up behind us is in the "invisible costs" that we have to pay to maintain our investment. We will either have to spend extra time caring for the property or pay someone else to do the lawn care and outside maintenance. This can include gutters, the roof, and even crawl space maintenance. Inside, any leak or appliance breakdown can spell financial trouble, if we don't add in several hundred dollars of extra monies for home repairs on top of the monthly mortgage to our budget. The same is not true if we rent and do not carry home mortgage debt.

Assess Our Situation

For some people, it just makes more sense to rent. Renting is good if we don’t plan on being in the area long enough for prices to appreciate to cover our closing and maintenance costs. Or, if real estate prices are depressed in our area and are continuing to fall. Buying too high will only cause distress for a homeowner. Elderly and single parents often choose rentals and town homes because of the lack of maintenance and some property oversight by someone who has more time or mobility.

In this day and age, we feel that owning is not always the answer. It definitely makes sense to take a detailed look at the real costs of ownership, in both time and money, before we sign on the dotted line. We look forward towards your views on renting versus owning.

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Save Money On Trash Can Liners

noreply@blogger.com (FIRE Finance) — Mon, 29 Jun 2009 21:30:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

June 30, 2009: Trash cans are a part and parcel of every household. So are trash can liners. It might pay to pause for a moment and reflect on our annual expenditure on trash bags.

Usually we need trash bags of three different sizes - for our kitchen, bathrooms and bedrooms. A roll of trash bags containing 30 replacements often lasts us three months. Since we purchase three rolls of different sizes at an average price varying between $5 to $6 per roll, the quarterly cost of the bags amounts to $15 at the least. That means we have to set aside a minimum of $60 for trash bags annually!

A couple of years ago when we did this exercise, we decided to save our money spent on trash bags by replacing them with empty plastic grocery bags. Being aggressively frugal, we wanted to shamelessly save every dime wherever we could. Extending this frugal philosophy we trimmed our spendings on gas, hair cuts, dining and eating out, energy bills, printer cartridges, and cell phones.

Now we explain how we went about lining our trash cans with grocery bags. Luckily for us, we had invested in small trash cans for our home. So the grocery bags were a perfect fit! If you are planning to replace your trash cans, we would advise you to go for medium sized rectangular models. Most empty grocery bags fit these models pretty well.

After emptying grocery bags, we neatly fold them and store them in a Rubbermaid basket. We also take an extra step and classify the recyclable ones and put them in a separate stack for use elsewhere. Next we separate the big sized shopping bags from the normal sized grocery bags. We use the big shopping bags for our kitchen trash and the smaller ones for our bathrooms and bedrooms.

While using a grocery bag to line a trash it is advisable to make sure that the bag does not have any holes. If it does, then we set it aside in an empty box. On our next grocery trip we carry these holey bags for recycling (most supermarkets recycle plastic bags).
To make the plastic grocery bags stick well to the trash cans we often tie the handles into a tight knot.

A caveat that might arise by using smaller trash cans is that we may have to empty them frequently. But we are not complaining since we are getting FREE bags. Not only that, this policy is more environmental friendly since we are trying to reuse the plastic stuff (most of which is not biodegradable) as much as possible before it ends up in land fills.
Also, we can reduce our trash bag usage by boosting our recycling of glass, paper, plastic and aluminum. Another neat trick is to start a compost pile for our vegetable waste.

We know that we shall not be able to retire on our savings by not purchasing trash bags. But our humble efforts to reuse materials before they hit the landfill is our little way of thanking Mother Earth for sustaining us.

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New Money Rules for Financial Security - #2. Building Cash Savings

noreply@blogger.com (FIRE Finance) — Sun, 28 Jun 2009 21:29:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

In continuation with our contemplation on the basic rules of money for attaining financial security, today we examine the importance of cash savings and emergency funds. In a deflating economy, unemployment is high. Most businesses go into an expense trimming mode and pink slips are a norm. In such a scenario how do we manage to keep our financial security intact in case of a loss of a stable cash inflow?

Rule #2: Cash

Old thinking: Keep enough money in ultra safe accounts to cover life's emergencies, but no more.

New rule: Relying more on cash can rescue you in an "asset emergency."

Our take: We faced the impact of an economy in recession when we were handed the dreaded "pink slip" one fine morning in a well kept surprise move from our employer. When we inquired into the reason behind this act, we were informed that it was a business decision. Our position was removed in an effort to trim expenses due to a tight budget. We are sure that many Americans have heard similar responses when they were shown the door. After all, the primary goal of any company is to stay in business. And they will do everything they can to remain afloat and improve their bottom line.

Thankfully we had successfully built an emergency fund which had about 8 months' worth of our living expenses. This fund protected us from an immediate financial disaster. You can say it was one of the most practical personal finance advices that we've implemented in our lives. More so, since a falling market had erased about 50% of our portfolio. In addition, we have also saved cash for some unavoidable big ticket expenses which are in the horizon for next two years. Now we are considering how we can trim our expenses further to stay afloat longer.

Cash is really king in a recession. With flooring real estate prices and a tumbling stock market, we cannot use our home equity or stocks to pay our mortgage in case of a job loss. So our take is to build to a comfortable cash fund for emergencies and must big ticket expenses in the near horizon before putting money into our portfolios for our nest egg.

Rande Spiegelman, Vice President of financial planning for the Schwab Center for Financial Research, recommends looking at the next one to three years and adding up any big-ticket stuff you see coming: tuition, a wedding, a down payment on a house. Once you have your total, aim to hold that much in a cash account or a low-risk investment such as a high-quality short-term bond fund.

Once the cash fund is in place, our next goal is to protect the principal in our portfolio (nest egg) by tweaking our asset allocation. It'd pay off to put our hard earned dollars in short term bonds or fixed rate Certificate of Deposits and watch the market carefully. We like Warren Buffet's advice of watching the game from the sidelines till we understand it better. Speculation without an iota of understanding means disaster.

If we are nearing retirement, cash becomes even more important when the stock market is providing low returns. Common sense tells us to have at least two years worth of living expenses in low risk investing instruments. The rest remains the same: trim expenses, watch the market and tweak the wheel of asset allocation according to our needs and the momentum of the market.

Question

What are your views and experiences about building cash savings and emergency funds with respect to keeping your financial security intact in the immediate present? We are looking forward towards your feedback.

Stay tuned for our take on New Money Rule #3: Earning Potential next week.

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Job Security? Be Careful About Competition

noreply@blogger.com (FIRE Finance) — Thu, 25 Jun 2009 21:26:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

At work be careful about how you use or talk about products that are in direct competition with your company's current line of products. Else you might earn the pink slip ........
Create a nice weekend and enjoy it thoroughly :).

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Top 100 Money Saving Sites

noreply@blogger.com (FIRE Finance) — Wed, 24 Jun 2009 21:25:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

Liz P Weston has put together a very informative and useful list of 100 sites that will save us money. Along with sites that save us money, it also covers those that will help us to:

spend in savvy manner
conduct smart bargain hunting
save money on groceries
get hold of useful coupons
do comparison shopping
save and invest intelligently
find creative ways to pay for college
manage our credit
understand real estate and mortgages
find free government help
understand the game of insurance
repair stuff by doing it yourself (DIY)
plan our travel without busting our budgets
improve our productivity and careers
find free entertainment
generously give in charity
find freebies
swap stuff and
look up free tech stuff.

Check out this useful list as well as the comments where people have added links to cite their own favorites which were left out from Liz's 100 money saving sites.

The 100 Most Useful Websites

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Generic Drugs are Cheaper - A Complete Guide

noreply@blogger.com (FIRE Finance) — Mon, 22 Jun 2009 21:23:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

June 23, 2009: Most of us are aware that we can save money by using generic drugs, but how much? The figures are really astounding! Let us consider the following facts:

Patients whose needs can be fully satisfied with generics could enjoy 52% savings in the daily costs of their medications.
According to an estimate by the Food and Drug Administration (FDA) more than half of all prescriptions are filled using generic drugs.
The Congressional Budget Office quoted an estimated annual $8 to $10 billion in savings for generic drug customers (at retail pharmacies). Imagine how much more can be saved if all hospitals use generics.

So, what are Generic Drugs?

Any drug which is biochemically identical to a brand name drug in dosage form may be termed as a generic drug for that particular brand name drug. Further, FDA requires that the generic must also have same strength, route of administration, performance, quality, characteristics and intended use. In other words the generic and its brand name drug are exactly the same in the way they work.

But how do generics save money?

Although generic drugs are bio-equivalents of their branded counterparts, they are sold at substantial discounts in comparison to the branded price. The reason is generic drug makers do not develop the drug from scratch. Typically the first manufacturing company has to spend billions of dollars in research, development and extensive testing of a drug before it gains a patent and FDA approval. The patent for the new drug remains valid for 20 years. Only after expiry of the patent can other drug manufacturers start selling a generic equivalent. But before that they too must do testing and get a FDA approval.

Is a generic drug available for my brand-name drug?

Not all brand-name drugs have equivalent generics. As explained above, when the patent is in effect, no other manufacturer is allowed to develop and sell an equivalent drug. But there is certainly hope once the patent expires.

Please use this catalog of FDA-approved drug products to determine if there is a generic equivalent for your brand-name drug. The interface is not very consumer friendly. Here is a step-by-step example to use this website.

Step 1: Suppose we are looking for generic equivalents of Motrin which is a proprietary name for a drug. In the search box we should type Motrin.
Step 2: In the results page we should look for the active ingredients column. In this case we would see IBUPROFEN listed as the active ingredient.
Step 3: Open the same catalog search page in another browser window or tab. This time type in or copy-paste the active ingredient name, which is IBUPROFEN for our example, in the search box and hit enter.
Step 4: Voila! We should now see a table of all drugs that have the same active ingredient. Besides Motrin, the table contained Advil, Ibuprin, Midol, Neoprofen etc.

This catalog is for informational purpose only. Please make sure to check with your pharmacist or doctor for professional advice before taking any generic drug. The search database and catalog usually lag behind, so it may not be up to date. For the latest monthly approvals of generic drugs please consult First Generics.

Ok, tell me how much I can save?

The FDA estimates that we can slash our drug bill by 30% to a whopping 80% simply by purchasing generic drugs instead of brand name prescription drugs. According to the National Association of Chain Drug Stores, in 2004, the average price of a generic prescription drug was $28.74, while the average price of a brand-name prescription drug was $96.01.

Needless to say that the savings can be significant if our plan requires us to pay a percentage of the cost. Even if the plan requires a fixed copay instead of a percentage, it still makes sense. The total cost incurred by the prescription plan provider will be lower, which in turn will enable them to keep the monthly premiums low. And the best part is that all this is possible without any compromise on the quality of drugs at any level.

If you still have questions, the FDA FAQ may be worth checking out.

Our sincere hope is that this information benefits you. Kindly let us know if we missed something or if you have a concern regarding generics. We shall gladly explore further.

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New Money Rules for Financial Security - #1. Handling Risk

noreply@blogger.com (FIRE Finance) — Sun, 21 Jun 2009 21:22:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

Recent times are challenging and unprecedented. Needless to say that it has brought its own bag of lessons for us. The recession, a topsy turvy stock market, job loss and several unanticipated changes are forcing us to reexamine and contemplate on the basic rules of money for attaining financial security.

While we were researching in this domain, we came across an interesting article at CNN Money which gleams light on 7 new rules of financial security. Here is our take on them based on our life's experiences and lessons learnt thereby.

Rule #1: Risk

Old thinking: If you can stomach the ups and downs that come with risk, you'll be rewarded.

New rule: Risk isn't about your stomach. It's about making or missing an important goal.

Our take: It's a no brainer that risk has to be embraced if we want to grow our money. We did that and the current state of the stock market wiped off 50% of our portfolio. So we learnt the hard way that it's not only about one's ability to stomach risk.

It's about using common sense and constantly keeping one's immediate basic needs as well as long term goals in view. Common sense says that if staying invested in a falling market is going empty our coffers, then by all means pull out of risky stocks and invest in relatively stabler instruments like bonds or certificates of deposits. In the process if we miss a little bit of upward curve while the market recovers, it's fine. After all we need to pay our rent, purchase groceries and have an emergency fund for the rainy day. More so, since no one can predict exactly when the market is going to recover and have a steady upward trend for a good period of time.

A practical way of approaching this goal might be to implement stoppers on gains or losses for each investing instrument in our portfolio and changing our asset allocation based on the momentum of the market. This strategy is a somewhat midway approach as compared to a total passive investing strategy (like buy and hold) and an active trading strategy which tries to time and beat the market on a daily basis.

If we are on the verge of retirement and the market is providing low returns on our investments, then a passive buy and hold methodology with no change in asset allocation and stoppers for arrest of losses is a sure shot recipe for disaster. What is disaster? - It means chances are high that we'd run out of money before we run out of our time on earth :(.

Question

What are your views and experiences about handling risk with respect to keeping your financial security intact in the immediate present? We are looking forward towards your opinions.

Stay tuned for our take on New Money Rule #2: Building Cash Savings next week.

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Happy Father's Day

noreply@blogger.com (FIRE Finance) — Sat, 20 Jun 2009 21:21:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

June 21, 2009: Our heartiest best wishes to all fathers on this special day. We are indebted to our dads* for taking such good care of us. At an early age they laid the foundation of a strong character by leading from the front with integrity. That played a major role in shaping our character and personality based on solid values and principles.

We learnt about wise money management and frugality at a very young age. A part of the credit goes to our dads for spending time to educate us about personal finance. They also made us aware about the pitfalls of poor money management and debt. And thanks to the universe that we followed their advice. Many grateful thanks to our wonderful dads!

* - Since we're a husband wife team, so we're appreciating the role of dads on both sides.

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Are You Totally Lost?

noreply@blogger.com (FIRE Finance) — Thu, 18 Jun 2009 21:19:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

We usually trust doctors and surgeons. A feeling that we are in safe hands often helps us to ease off when we consult them for health complications. But with onset of cost cutting measures like outsourcing of crucial tasks to other countries, the question that arises is: "Can we still trust them?" This cartoon definitely does not inspire confidence :(.

We wish you a wonderful weekend. Stay healthy and have fun :).

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Top Creative Blogs - Simply Awesome

noreply@blogger.com (FIRE Finance) — Wed, 17 Jun 2009 21:18:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

Creativity unleashes joy and vigor in life. A life without creativity soon becomes boring and dull. Whether it is our jobs or hobbies or own business, our creativity unleashes fathomless spectres of success. Prosperity and abundance emanate from creative and simple ideas that serve a social need. Sometimes they also give birth to new social needs. Marleisa from Abundance Blog has compiled a very useful list of top creativity blogs. Check it out to create and harness your own idea garden. After all today's aspirations are tomorrow's realizations :).

Awesome Creativity Blogs

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Closed End Mutual Funds - Should We Stay Away From Them?

noreply@blogger.com (FIRE Finance) — Tue, 16 Jun 2009 21:17:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

June 17, 2009: Most references to mutual funds in articles, posts and talks are meant for conventional or open-ended mutual funds. Closed-end funds are seldom talked about. Both are investment entities that invest collective assets of investors and trade securities according to a specific strategy. However there are significant differences between the two.

In an open-end fund, shares are created or destroyed at end of each business day as an investor invests in the fund or withdraws from it. Number of outstanding shares is the total shares owned by investors of the open-end fund. Thus both the number and value of shares vary each day due to changes in number of investors and value of securities. Merits of such a fund include liquidity, convenience, safety and ease of trading.

On the contrary the number of shares issued by a closed-end fund at an IPO (initial public offering) remains fixed thereafter. Here is the big one. The fund company is not responsible for redeeming shares. In other words if I am an investor in a closed-end fund and decide to get out of it I have to sell my shares through a broker at the market price. Just like any stock trade. In the unfortunate event of non-existent buyers I would be stuck with my shares. This also implies that one may be able to buy or sell such shares at premium because the share price depends on market's perception of the fund's prospects (among other factors). On the other hand for an open-end fund, the fund company is bound to redeem my shares even if it necessitates the manager to liquidate securities to raise cash.

Are closed-end funds worth it?

In spite of the above characteristics, a closed-end fund is not to be ignored. Suppose a major crisis strikes the market and investors are fleeing away. Everyone wants to sell their investments and sit tight on hard cash.

What will happen to an open-end fund in such a scenario?

The fund manager will be compelled to liquidate all its securities to generate cash for satisfying the redemptions.

But a closed-end fund's manager does not need to do so - he/she is in complete control. Case in hand - devaluation of Mexican Peso in 1994. Thus, single country closed-end funds or those focusing on a specific region may be worth considering. More so if they can be purchased at a discount.

Finally a word of caution. Closed end funds are better for savvy investors. One has to keep an eye for such funds being sold at a bargain to make a good buy.

Do you invest in any closed-end funds? If yes, which ones? Please feel free to share your experiences and expertise.

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Save Money: Reuse Mailing Boxes and Packing Supplies

noreply@blogger.com (FIRE Finance) — Mon, 15 Jun 2009 21:16:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

June 16, 2009: Twice a year we de-clutter our house. Invariably we discover quite a few books, CDs and DVDs that we can part with. We list them on Amazon.com. Ebay charges a fee for listing, so we stay away from them.

When our listed items get sold at Amazon we are required to mail them promptly. We pack each item with a lot of care so that they are delivered in a tip top condition to our customers. To do that we use a good amount of filling materials. You may wonder how much do these packing stuff cost us? Nothing!

How do we do it?

We never throw away any packing supplies, bubble wraps, fillers and polystyrene foams. Throughout the year we collect and store them neatly in a big box. We examine each and every mailing box or bubble wrap envelope in which we receive our online purchases. If they are strong and in an acceptable condition, we clean and store them as well. So next time when we need to ship an item, we merrily reuse an appropriate mailing box or envelope.

However we diligently carry out these three simple steps while reusing old mailers or boxes:

Print the mailing addresses on white paper. Almost always we reuse one sided printed paper for making the address labels.
With a black permanent marker we blacken any markings or writings on the boxes.

Glue or tape the address labels over previous printed labels that were affixed on the boxes or the black markings. We make sure that the new address labels completely cover them.

Are there any other ways of reusing mailing boxes?

Recycling mailing boxes need not end with the mailing of merchandise. If we are creative we could certainly discover many other uses. We have reused them for storing small items and other odds and ends.

The following picture shows how we use an USPS priority mail box for storing coupons, fliers and pending mails on our desk. We have cut out a portion from the top of the box, to make a lid. Works like a charm!

How much do we save?

Well, let us do the math.

On an average each shipping box with fillers cost us around $5.
We ship at least 50 times a year.
So total savings = 5 x 50 = $250.

Now we would not get rich by reusing our old mailers and boxes. But tiny drops make an ocean. So every single effort that saves us money counts.

But in the bigger picture, apart from saving us a few hard earned dollars, recycling the boxes and envelopes helps Mother Nature. Playing our little part towards maintaining a harmonious relationship with our environment gives us immense satisfaction and joy. So we make sure not to miss a single opportunity of doing so.

We would love to hear back from our creative readers about their novel uses of mailing boxes and packing supplies. Please do drop by and leave some comments.

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Tax Equivalent Yield Calculators

noreply@blogger.com (FIRE Finance) — Sun, 14 Jun 2009 21:08:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

We were thinking of adding tax exempt investments (like MUNIs) to our portfolio. In the process we needed to figure out the tax equivalent yield of these investments. We cannot compare the returns from a tax exempt investment with that of a taxable one without accounting for our tax savings.

To calculate the yield on a taxable investment that's equivalent to the yield on a tax-exempt investment we found the following useful calculators:

Morgan Stanley - Taxable Equivalent Yield Calculator - This one is particularly designed for those of us planning to invest in MUNIs. This simple calculator helps us to compare what a taxable investment would have to yield to match the tax-exempt returns offered by municipal bonds. To use it, we need to enter our tax free yield, tax bracket and the state in which we live. They have also provided a chart with 2009's Federal Tax Rates and Brackets for easy perusal.

Bankrate.com - Tax Equivalent Yield Calculator - This is a visually pleasing tax equivalent yield calculator that will estimate the tax-equivalent yield (TEY) for a municipal bond. It has added some extra flavors like what TEY we would need if our tax exempt investment has only federal tax exemption or both federal and state tax exemptions. Bankrate has also provided a useful chart for Filing Status and Income Tax Rates for 2009.

Vanguard's Taxable Equivalent Yield Calculator - To get the taxable equivalent yield, we need to enter the tax exempt yield and our current tax bracket. We can also calculate a taxable-equivalent yield based on a specific Vanguard® fund.

We'd like to know what tax equivalent yield calculators you use. Kindly leave a comment with your feedback. Thanks in advance for sharing :).

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Worst Job In The World?

noreply@blogger.com (FIRE Finance) — Thu, 11 Jun 2009 21:09:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

Last night we had a personal college reunion dinner party. It comprised of our college friends with whom we used to hang out the most. Among various topics of discussion, one was about the dismal state of our country's economy and the resulting job losses. We chose to keep the mood upbeat. So we cheerfully talked about how lucky we were to have our jobs and wondered aloud about a possible set of worst jobs in today's world. To that end one of our friends emailed a nice cartoon which we felt could be shared with you.

Please accept our apologies if you found the cartoon offending :(. All said and done, have a wonderful weekend ahead :).

Image Source(s): Friend's email

Top 20 Online Entrepreneur Blogs

noreply@blogger.com (FIRE Finance) — Wed, 10 Jun 2009 21:11:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

Whether our country's economy is booming or in recession, it always pays to build a side business even if it's on a part time basis. The main investments needed are interest, sweat, intelligence and some money currency.

With the advent of the Internet and e-Commerce, online entreprenuership has become an attractive option for those who have an entreprenuer bent of mind. The internet has opened up a world of commerce which is accessible with a simple click of a mouse from the comfort of our homes. With easy availability of broadband access in the developed countries, it makes more sense to invest our energies in building an online business. And as our online business expands we can consider making it our full time profession and quit our day time jobs. Slowly we can even consider become Location Independent Professionals (LIP). That will give us the supreme freedom of making a livelihood from anywhere in the world at our own pace and time. It also enables us to unleash our creativity without any bounds. Best of all we will be our own bosses :).

To that end it is important to educate ourselves about online entrepreneurship and how to go about it. It's a challenging field which is ever changing. Freelance Folder has put forth a good list of top 20 online entreprenuer blogs. This list provides 20 thought-provoking, and potentially lucrative sources of information which are run by successful online entrepreneurs and web companies. Check it out to add some good resources to your daily reading list :).

20 Must-Read Blogs for Online Entrepreneurs

Image Source(s): iStockPhoto

Electronic Deposit Insurance Estimator - Protect your Bank Deposits

noreply@blogger.com (FIRE Finance) — Tue, 09 Jun 2009 21:10:00 PDT

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

With banks failing every other week, it is but natural to wonder about the safety of our bank deposits. Choosing a safe bank is only the beginning of the story. The next part is making sure that our deposits are FDIC insured. This will protect our monies in case our bank fails.

Now suppose that we have several deposits at one or more banks and need to find whether all of our deposits are covered by FDIC's insurance or not. How do we go about this task?

Thankfully, FDIC has designed a tool named EDIE (Electronic Deposit Insurance Estimator) that will do the job for us.

EDIE - The Estimator

EDIE can calculate our FDIC insurance coverage for each FDIC-insured bank where we have deposit accounts. It is designed to give an accurate deposit insurance calculation, assuming it is properly used and the account information is correctly entered. EDIE provides a printable report for each bank which shows whether our deposits are within or exceed coverage limits.

Business owners can use this tool for verifying the safety of their bank deposits. In addition FDIC has provided four step by step tutorials about how EDIE has helped real life depositors (with different combination of bank accounts and ownerships). We cite them here to give you an idea about the utility of EDIE:

A family has over $700,000 at the same bank. See why it's all fully insured.

A couple has their living trust account at the same bank as their IRA deposits. See how they are covered.

A family wanted to have as much of their money as possible at the same bank. See how they made sure all of their deposits were fully protected by the FDIC.

A business owner got some good news from EDIE about both his business and his personal accounts.

The results and conclusions generated by EDIE are strictly advisory. All actual claims for deposit insurance shall be governed exclusively by information set forth in the FDIC-insured institution's records and applicable federal statutes and regulations then in effect.

The standard insurance amount of $250,000 per depositor is in effect through 12/31/2013. On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except IRAs (and other certain retirement accounts), which will remain at $250,000 per depositor.

We hope that EDIE will be a useful tool for you to check the FDIC Insurance coverage on your bank deposits. Hopefully it will help us to take action to protect and keep our money safe in case of bank failures.