RamblingFever Money

Loan sharks vs payday loans: It’s a no brainer

noreply@blogger.com (Anonymous) — Wed, 02 Jul 2014 02:26:00 +0000

There is a lot of confusion surrounding payday loans these days. Look online and you’ll soon discover many articles and news stories branding payday lenders loan sharks. While there is no doubt quite a few loan sharks masquerading as payday lenders, consumers need to know that they aren’t all bad. There are some pretty good ways to tell them apart and if you look hard enough you’ll easily spot the reliable lenders.

Payday lenders fighting to regain reputation

A lot of negative press has been given to the payday loan industry over the past six months. Most recently the Archbishop of Canterbury has made comments aimed at the younger generation to be wary of such lenders. There was even a rap created to highlight the dangers of the industry. Now, responsible payday lenders have had enough. The BBC News has recently reported that payday lenders are fighting to rebuild their reputation. The Corporate Affairs Director of Dollar Financial UK, Caroline Walton, states: “Our critics are miscommunicating by claiming payday lenders are legal loan sharks. This is causing confusion for consumers on what a loan shark actually is.” So what is a loan shark? This is the question many consumers are confused about. The good news is, they are actually quite easy to spot.

Differences between a loan shark and payday lender

On the surface, loan sharks and payday lenders look alike. They offer the same amount of cash and you pay them back on your next payday. There are also loan sharks operating in the personal loan industry. The amount of money you can borrow is higher, but the way that they operate is exactly the same as a loan shark offering payday loans. The one thing to look out for is reputation. Loan sharks operate under the radar. They aren’t well known and you won’t find a lot of information about them online. Larger lenders such as Wonga, are well-known and provide clear information regarding their terms and conditions. You’ll find hundreds of reviews from happy customers online so you know they are a company you can trust. The one difference between a loan shark and a payday lender is the way in which they operate. Once you have the money from a loan shark, that’s when the problems begin. Up until this point a loan shark will appear friendly and helpful. In fact, they’ll likely bend over backwards to make you feel at ease. However, once you get the money and have signed the contract, that’s when the intimidation begins. They use underhand tactics to try and get the money back. If you fall into any difficulties making repayments you’ll often be threatened and intimidated. For victims of loans sharks it’s a terrifying experience. You’re already stressed because of your financial situation, then you have the added stress of being intimidated, sometimes even with the threat of violence. Another way to tell whether you’re dealing with an illegal lender is by looking at the application process. How easy is it to get the money you need? Do they carry out any credit checks? Loan sharks will make it as easy as possible for you to get the money you need. No checks will be carried out because they prey on the most vulnerable. So, as much as you might be worried about your credit, try to avoid lenders who don’t check your ability to pay the loan back.

Loan sharks victims increase

The amount of loan shark victims has actually doubled in Scotland according to The Herald. In 2010 to 2011, the figures showed there were 28 reports filed against loan sharks. The latest figures from 2012 to 2013 show an increase up to 65. It’s estimated there are more than 150 illegal lenders operating throughout Scotland alone. One of the most worrying things about loan sharks is the interest rates they charge. Some have even been known to charge up to 10 million percent. This is an alarming figure. Trustworthy lenders charge up to a maximum of 5000%, though those rates don’t usually affect customers because they are annual rates. Consumers are urged to borrow responsibly from well-known payday lenders. Ensure the rates and terms and conditions are clear and that they operate in accordance to the latest regulations.

AUTHOR BIO

Luke Young is an independent financial adviser with 10 years’ experience in the industry. He uses this experience to update his personal finance blog.

Four Ways to Fund the Cost of Home Improvements

noreply@blogger.com (Anonymous) — Sat, 27 Jul 2013 02:22:00 +0000

Every year, huge numbers of people across the UK decide to carry out home improvements of one type or another. Some decide to do this because they simply want to upgrade their home. Others have struggled to sell their property and decide instead to adapt their existing home to make it more suitable to their needs, rather than to sell up and move.

Whatever your reasons for making home improvements, and no matter what types of improvements you are carrying out, one thing you will need access to is funding for your project. Whether you're looking to improve your home with fitted bedrooms or whether you want to install double glazing and improved heating, you will need to ensure you have the money available to pay for the work.

How to pay for your home improvements

There are a number of options available if you are looking for ways in which you can fund the cost of your home improvement project. Some of the popular options you can select from include the following.

Personal loan

You can approach your bank or another lender with a view to taking out a personal loan in order to pay for your improvements. If you do decide to go for this option, make sure you shop around to find the most competitive rates, as interest rates can vary from one loan and lender to another.

Secured loan

If you have some level of equity in your home, you may want to consider taking out a secured loan, which is borrowed and secured against this equity. Depending on the improvements you carry out, you may be able to recoup some of the money you spend on your improvements through an increase in the property's value.

Savings

If you have money in savings, you may find that this is sufficient to carry out the work you are planning. Shopping around for the most competitive prices on materials as well as labour can help to bring the cost of the work down, which means that you won't have to make as big a dent in your savings.

Credit card:

You may be able to put the cost of your home improvements on your credit card. This will depend on your credit limit and the cost of the improvements. However, do bear in mind that the interest rate on credit cards can be high. If you are able to pay off your credit card in full within a relatively short period, such as a year, you may be able to get a zero per cent credit card to avoid any interest charges.

These are just some of the options that may be available to you in order to fund your home improvement project. You need to weigh up the options to work out the most cost-effective one before you make any decisions about which method of funding to choose.

References:

Image: "And now I'm ripping out the closet" from Flickr by slworking2

Feed Your Pet Raw Food and See Your Vet Bills Drop

noreply@blogger.com (Anonymous) — Sat, 13 Jul 2013 11:28:00 +0000

Dr . Kollath, of the Karolinska Hospital in Stockholm, headed a study done on animals. When young animals were fed cooked and processed foods they initially appeared to be healthy. However, as the animals reached adulthood, they began to age more quickly than normal and also developed chronic degenerative disease symptoms. A controled group of animals raised on raw foods aged less quickly and were free of degenerative disease. In nature, we see other examples of wild animals eating entirely enzyme rich raw foods being free of the degenerative diseases that afflict humans.

If you spend a little time observing the physical condition of animals in the wild, you will find that so-called degenerative or old age diseases are relatively unknown to them. Except for the danger from natural predators, wild animals generally live quite long and healthy lives. Now, what happens when we domesticate animals and make them into house pets? Are you aware that they quickly develop the same diseases as their human "owners"? We must be making the same mistake with them that we're making with ourselves. Some years ago, Dr . Francis Pottenger tried an experiment on several hundred cats. He divided them into two groups and fed one group their natural diet of raw meat and the other group a man-made diet of cooked pet food. He carried on this experiment through three generations. The cats that were fed their normal uncooked diet thrived. The cats that were fed a cooked diet developed the same diseases, and required the same medical treatment, as we humans. (excerpt from an article at the NewVeg site)

Dr . Donald Ogden D. V. M. writes that commercial pet food (even the best known and most expensive brands) have had their nutrients altered, adulterated, devitalized and destroyed by heat, processing, coloring, preservatives and other chemicals. Feeding your animal such food on a regular basis causes waste-toxins to accumulate in the blood, lymphs and tissue which contributes to a weak immune system and renders our pet susceptible to chronic diseases.

Jesse Dallas writes that Processed foods and drugs have seriously depleted the natural vitality and immune systems of many pets. Dogs and cats are anatomically very different to humans. Their intestinal tract, for example is only about half as long as a human's, and food is therefore processed and assimilated very differently. Whereas large amounts of red meat can cause cancer in humans, a lack of raw red meat in an animal's diet can lead to serious health problems.

Animals, like humans, require the enzymes, amino acids and other nutrients in the raw meat in order to stay healthy. Many skin and coat problems are a direct result of a lack of raw animal fat in the diet - fat which humans often believe is bad for their pet. Animals need at least 30% raw fat, and their systems are not designed to handle cooked meat or cooked fat. In the wild, a panther or jackal does not barbecue, grill or smoke its prey. It definitely does not walk to the local supermarket to buy dry food either. Yet most pet owners recoil at the thought of feeding raw meat to their dog or cat, concerned about bacteria or parasites. However , dogs and cats don't get salmonella poisoning because their digestive system is so acidic (or at least it should be) that it kills everything. This is why a dog can bury a bone and dig it up two weeks later and eat the rotting meat.

For a return to health, pets require a diet which strengthens the immune system and most closely resembles that which they would get in the wild. It's really easy to do. Essentially, you feed your pet a combination of certain raw meats and select from a host of raw vegetables. Wondering about the cost? Here is an excellent example from a blogger who details her raw dog food diet costs. No matter the cost of the diet, the overall health and well-being benefits will certainly offset it by lowering your vet bills. Will you consider trying a raw diet for your pet today?

Resources:
Image: "Rose, a puppy, chewing on a bone..." from Flickr by Wonderlane
Original version of most of this article by Shirley Lipschutz-Robinson

The Massive Advantages of Mobiles

noreply@blogger.com (Anonymous) — Sun, 23 Jun 2013 20:30:00 +0000

Everyone these days has a mobile phone. In fact, I don’t know anyone who doesn’t have one of these devices almost glued to them. Even lower-end of the market phones have incredible functionality, but I think that many people underutilise their mobiles when they could be using them to save money.

You might this thinks sounds crazy but with these tips you will soon see that using your mobile can actually help you save money, whilst capitalising on the features available in the palm of your hand.

Free Wi-Fi

If you are spending a fortune downloading or streaming movies and music via a home internet connection start using free Wi-Fi hotspots to download large files and data. Most coffee shops and restaurants offer free Wi-Fi and many public places allow you to use their connection at no cost. Use your mobile to download apps, movies or other large files and save yourself a fortune in bandwidth and internet bills.

Free apps and games

PC and console games can be incredibly expensive and only cater to a device utilising specific software. There are hundreds of thousands of free and low cost apps that offer the same entertainment on your mobile and you can enjoy them across different platforms thanks to mobile optimisation. You can even play real money iPhone casino games on your mobile, alleviating the need for pricey a PC or laptop.

All-in-one multimedia capabilities

Most smart phones offer all-in-one multimedia functionality that allows you to watch movies or clips, browse the internet, download files and send and receive emails whilst making calls or sending texts. Smart phones can replace everything a PC or laptop can do and are far more cost effective. You don’t have to upgrade software and your multimedia device is completely portable, so it’s far more practical and can save you large amounts of money.

Chat for free

Psychologically anything with the word free in it attracts people, but you can actually use your mobile to chat for free if you utilise a program that doesn’t cost a cent and you only switch it on when you are in range of free Wi-Fi. Free chat programs are simple to download and allow you to communicate either via voice or text internationally.

Your mobile has massive cost saving benefits, don’t fall into the trap of thinking it’s just a phone.

Image: "Image007" from Flickr by Spino73

Comparison Shopping for Insurance and Gas

noreply@blogger.com (Anonymous) — Fri, 14 Jun 2013 11:21:00 +0000

When it comes to saving money, most consumers like you and I are very short term thinkers. We care about saving money now - the money that's in our pockets. But regarding some of our longer term and bigger expenses - we don't even pay attention. It's a psychological mystery for sure. Why do we do it? What makes us care about the cash that's in our pockets now, while we ignore savings opportunities that could put more cash in our pockets later?

Shopping Around for Insurance

One of the easiest ways to save money in the long term is to shop around for insurance. You should always check prices and get quotes from several companies or agents before buying insurance. And I'm talking about every kind of insurance here. Whether it be more common and personal types of insurance, like: home, auto, life and medical. Or even for more obscure types of insurance like what is offered by Lloyds of London - things like: casualty, property, marine, energy, motor, aviation and reinsurance. Money can certainly be saved at a personal and at a corporate level by simply shopping around and comparing prices.

So why don't we do it? I know I'm guilty of not shopping around and I know why. I could probably stand to save a little bit of money long term - but I don't bother. My reasoning is pure laziness and unwillingness to deal with the hassle. I already have my insurance policies set up and I simply refuse to spend the time to shop around to see if there are better deals available for me. It's just easy for me to make my payments every six months to the same companies and continue with the same amounts of coverage that I set up in the past.

I'm not a total idiot though. I did, of course, shop around and get the best price at the time I originated each policy. Even as long as 10 years ago (when I switched my auto insurance to my current company), it was very easy to comparison shop online. It's really a no-brainer these days to get online and check quotes from several different insurance companies before making a decision.

Shopping Around for Gas

Here is an example of the other end of the spectrum now - saving money in the short term by shopping around for gas. Almost everybody does this to the point that it is really ridiculous. Some people go way out of their way to save just a minuscule amount of money. They might drive all the way across town because they heard from somebody else that gas was just a little bit cheaper. Just like with insurance, it is now easy to comparison shop online to find the best gas prices. Sites like gasbuddy.com are totally dedicated to providing consumers with up-to-date information. They even have smart phone apps so consumers can get this information while on the go.

Personally, I don't do this either. I could care less if I pay a few pennies more per gallon. I'm not wasting my time to research and I'm not driving out of my way to save a dollar or two. I get my gas when needed at the nearest gas station along the route that I am currently traveling. I will sometimes do the math in my head when I realize that I am paying 6 cents more per gallon than the gas station I just passed on the way to the one I am at. It doesn't take me long to realize that I couldn't even buy my favorite burger from McDonald's with what could have been the difference in savings.

But I know that a lot of people like to go out of their way to save money on gas. And they like to talk about it too. Talking about gas prices is like talking about the weather. People will always do it.

"Hey Hank, ya hear it's supposed to rain tomorrow?"

" Yeah Frank, and did ya see that station across town has gas for 8 cents cheaper?"

Compare, Save and Tell Your Friends

So, it goes without saying that it is smart to comparison shop to save money. Many people, unlike me, do it for short term things like gas. And they like to talk about and even brag about their savings. But not as many people tend to comparison shop for longer term expenses like insurance. They just stick with their current provider, or the one that was suggested to them. Why shouldn't you shop around for things like this? You probably get countless offers in the mail, but just ignore them. It's easy to check prices online. So what are you waiting for? You'll drive across town to save one dollar in gas. Why won't you spend 10 minutes online to potentially save hundreds of dollars in insurance costs? Get a better deal and then brag about it to all your friends. When they tell you how little they saved in gas - retort back with how much you saved in insurance!

Image: "Neon Insurance Office Sign" from Flickr by David Hilowitz

Tips for Being a Better Spender and Saver

noreply@blogger.com (Anonymous) — Thu, 06 Jun 2013 00:44:00 +0000

Spending and saving just don’t seem to go hand in hand, and yet we must continue to spend in order to survive. It’s tough to watch the pennies all the time and it can make you feel hard done by and somewhat resentful.

However, with our tips you can have your cake and eat it too, as there are clever ways to spend and still continue to save money.

Don’t live off your earnings

Psychology is powerful. Looking at your paycheque, you will find yourself automatically budgeting how you can spend using the money you now have in your account. Even if you intend to save some of it, you will end up spending it all before your next payday.

The way around this is to automatically deduct 2 per cent off your income and put it straight into a savings account. Then make your budget based on the smaller amount. You’ll still be able to afford everything, but you’ll have a nice little lump sum nestling in the background.

Save what you spend

Certain items are called luxury items for a reason. We may have gotten ourselves into a café culture, but that doesn’t necessarily mean we can still afford to maintain that lifestyle.

This is not to say that you have to cut luxury items out of your life, but its important to make sure you can still afford them. Have a savings account or even a piggy bank in which you deposit an amount of money equal to what you have spent on luxury items. If you can’t afford to save the £3.50 you spent on your coffee this morning then the chances are you couldn’t afford the double macchiato with whipped cream you had either.

Spend more to save more

When it comes to saving money, most of us by cheap items in the hope they’ll see us through. However, this can lead to a vicious cycle as cheap materials waste out quickly and we find ourselves back in the shops before we know it.

A much more practical and sensible option is to buy hardwearing top quality material at good prices when possible. Tough options such as women’s leather jackets will see you through the change in seasons and will last longer than just a few wears.

Forget the plastic

It can be all too easy to overspend when you’re putting everything on your credit card or using your debit card to make purchases. Instead, take out how much money you’ve budgeted for the week and put it in your purse. Only purchase items using that money and if you run out before the week is up then you know you’ve gone over budget.

Plastic is a case of out of sight, out of mind – don’t fall into that trap.

Image: "saving and spending" from Flickr by 401(K) 2012

Croatia Financial Update

noreply@blogger.com (Anonymous) — Tue, 04 Jun 2013 09:30:00 +0000

There has been discussion of Croatian wine in this column in the past but now, with EU accession in clear sight, it has become a serious matter. The tight control of Brussels over the naming of products (think Champagne and Parma ham, which can only be named as such if they come from a particular region) could affect Prosek and Teran. Prosek is on days-to-do, not as a drink but as a label, because the commissioners think it sounds too similar to

Italy

's Prosecco. Never mind that the commissioners fail to realise that Prosek is sweet and flat, Prosecco dry(ish) and fizzy. Croatian Teran could suffer a similar fate if

Slovenia

has its way. Ljubljana got in first with its EU membership and territorial nomenclature and wants to maintain its monopoly of the name.

After a decade of effort to join the European Union, such political bickering ought to come as no shock to

Croatia

, especially from its close neighbours. It is the price of membership, as is joining the euro. One of the precursors to euro membership is participation in what used to be called the Exchange Rate Mechanism and is now known as ERM2. Originally, membership of the ERM meant a currency remaining within a range of ±2.5% around a central rate. Today, the parameter for ERM2 is far more generous; a currency can vary by ±15% against the central rate.

Croatia

's kuna, though not yet a member of ERM2, remains very comfortably within that band. Over the last year, with a de facto central rate of 7.55kn to the euro, its range has been mainly between 7.30 and 7.80; ±3%.

Over the same period the variation of sterling against the euro was ±6% but, because the kuna and the pound tend to move in the same direction relative to the euro, the variation of GBP/HRK was also ±6% (give or take a couple of decimal points) around a central rate of 9.25. So Brits with an interest in

Croatia

are far more exposed to the variation of GBP/EUR than they are to EUR/HRK.

Sterling started the year badly, falling broadly in January and February, but the recovery which started in February continued through April. In the last month the pound has moved ahead against everything except the Canadian dollar and the euro, where it is roughly unchanged. Half a dozen times in the last two months GBP/EUR has tried and failed to move above €1.19 (roughly 9.0 for GBP/HRK). It might eventually make the break but, for now, there are plenty of sterling sellers at that level.

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Image: "Make a Splash 364/365" from Flickr by gravity_grave

4 Ways to Keep More of Your Money

noreply@blogger.com (Anonymous) — Wed, 15 May 2013 10:23:00 +0000

Image from Flickr by aluedt

Like most people, you probably work simply to pay bills. Even if you’re financial responsible, your mortgage payment, health insurance and other necessary expenses may take a large portion of your income. This leaves very little for savings, which can make it difficult to survive an emergency.

Fortunately, there are several simple tricks to keep more of your cash. You can’t avoid everyday living expenses, but you can control how much you spend on these expenses.

Ways to Keep More of Your Money

1. Rethink your mortgage loan.

What is your current mortgage loan rate? With rates at historic lows, there has never been a better time to refinance and take advantage of falling home rates. A cheaper interest rate can significantly reduce your home loan payment. In fact, refinancing can realistically reduce your mortgage payment by $150 to $250 a month. Imagine what you could do with the savings. And if you decide to cash out some of your equity, a refinance can payoff your credit cards and other high interest debt.

Talk with your mortgage lender and discuss your options. You’ll need a credit score of 680 for a conventional refinancing, as well as funds for closing. Some lenders, however, will wrap closing costs into the mortgage loan, thus reducing your out-of-pocket expense.

2. Take less out of your check.

Review how much your employer takes out of your check for health insurance and retirement accounts. If you’re struggling and need extra cash, you might modify these deductions to keep more of your money. For example, rather than use your employer’s group plan, apply for individual health insurance. If you don’t have preexisting conditions, you may qualify for a better rate on your own. Likewise, you might temporarily reduce your 401(k) contribution. This results in a bigger paycheck, which can help make ends meets.

3. Take control of your energy costs.

A high electricity bill might give you a mini-heart attack. However, there are ways to lower this expense and save money each month. Begin by comparing rates and switching to a cheaper energy provider. If you live in Texas, websites like www.shopelectricityratestexas.comlet you compare energy companies and save. You can take other steps, such as turning off lights when you leave a room, unplugging electronic devices, servicing your HVAC unit, changing air filters, sealing cracks and using energy-conserving lightbulbs. Take the right measures and you can save up to 20% a year on energy.

4. Become a coupon addict.

Coupon clipping isn’t a favorite activity for some. But if you learn to love coupons, you can save money on practically everything from groceries to clothes. It doesn’t take long to check the weekly newspaper or join retailer email clubs. Plus, many places let you combine coupons with sales for greater savings. Imagine the joy of walking out the grocery store with $75 worth of groceries, but only spending $30 or $40. Start clipping coupons and this can happen every week.

Keeping cash in your house is easier than you may think. This calls for smart shopping and the willingness to compare prices. Choose the method that works best for you and watch your money grow.

Ways to Subsidise Your Gym Membership

noreply@blogger.com (Anonymous) — Fri, 29 Mar 2013 09:35:00 +0000

Image from Flickr by lu_lu

Gym memberships can be a tricky thing to get wrapped up in. They are pretty good at locking you into a contract that legally binds you in unfavourable ways unless you’re very careful when it comes to reading the terms and conditions.

Going to a good gym isn’t exactly affordable anymore, either. It takes a good deal of saving up to be able to afford to go and work out, unfortunately, unless you plan on assembling your own mini-gym at home, which takes time and dedication.

This article offers you some ideas on how to subsidise your gym membership, if you’re set on getting one.

Save up by cutting down on your unhealthy lifestyle

Eliminating your unhealthy habits can actually make you a quick buck. Sell your video games on sites like www.musicmagpie.com and stop spending your spare cash on unhealthy snacks.

If you’re a smoker, this is something that you quite clearly have to give up if you want to lead a healthy lifestyle. It can also save you enormous amounts of cash in the long run. Your gym membership will probably pay for itself if you quit smoking.

Be careful when you’re paying

You can make the most out of your gym membership by being careful about how you pay for it. It’s universally accepted that paying for an entire year up front is definitely a bad idea.

You should pay in monthly instalments, in case something comes up, like an injury that’ll put you out of commission for a while, or if you’re leaving the country for a time. You stand to lose a lot of money if you pay annually up front.

Try and get a group membership

You may have to do some negotiating in person here, but it could be well worth your while. Try and recruit your colleagues by sending a work email around to ask if anyone’s interested in joining the gym.

By bringing more people in for a group membership, you all stand to join the gym for much cheaper than you would have by applying alone.

Join at the right time

Gym memberships tend to cost more during the ‘peak’ months. These are usually at the start of the year when people are keen to keep their New Year’s resolutions. Memberships also cost more during the colder months of the year, when it’s too cold to exercise outside.

Gyms are less likely to offer you a deal when they’re full up, so try during the summer months or towards the end of the year, when gym attendance in general tends to shrink.

3 Ways To Avoid Student Loans

noreply@blogger.com (Anonymous) — Thu, 21 Feb 2013 10:00:00 +0000

College tuition prices are through the roof these days with the average student loan debt increasing to over $26k in 2012 (source). These rising costs cause most students who want to earn a degree to fall further and further into debt just to be able to get a job that pays better than minimum wage. However there are ways that you can get yourself a useful but cheap degree if you plan ahead. Here are a couple of smart ideas we have to help you obtain that college degree cheaper.

Option 1 - Scholarships/Grants

Getting scholarships or education grants is an old tried and true method of getting help for school. If you qualify for them you can get that degree affordably or even free depending on the school. While many students don’t think they will qualify for scholarships or can feel overwhelmed at the choices given to them it is a worthwhile path to take. When researching these scholarships you will want to take the time to make a profile of yourself, and classify yourself under the following four headings: Academic Achievements, Intended major, extracurricular activities and ethnicity. These are the main categories in which most scholarships can be broken down. From there start doing your research and start applying.

Option 2 - 2 year Community College

Many state universities have transfer plans with local community colleges. These programs enable you to have a 4 year degree with half of the time and cost. You do have to make your choice very early on if you wish to take part of this type of program but deciding on it really is a great way to get a cheap degree. The qualifications for these transfer programs will be different for each college but most require that you maintain a decent GPA and fulfill certain requirements of your major at the community college. If this sounds like a program that will work for you do the research on which state schools in your state offer this kind of program.

List of community colleges by state - Here

Option 3 - Distance Learning Program

If your someone who is good at working on your own and motivated you can get yourself a bachelor’s degree from such schools as the University of London (yes that London) for an amount that is in the range of $4,500 dollars. The University of London along with several other such distance schools offer these distance learning programs affordably. You will have 3-8 years to finish the courses in these programs standardly and you pay the fees as you go. So the less time you take the cheaper your degree is going to be. You will have to work just as hard

The Top 8 Reasons People File Bankruptcy

noreply@blogger.com (Anonymous) — Sat, 02 Feb 2013 10:42:00 +0000

There are many different reasons why people file for bankruptcy. The most common reason is because the person doesn't have enough income coming in the home to cover the outgoing expenses. Unexpected events can come up, lack of financial planning or out of control spending are just a few situations that can throw a person into the bankruptcy hole. Credit cards that are used for living expense can cause a financial disaster, as well.

Medical Expenses Sometimes the unexpected medical emergency comes up. If the person doesn't have health insurance that will cover the expense, this can lead into a lot of debt, fast. Hospital bills and other medical bills are very expensive and sometimes they seem like they are never ending. Once the bills get to high and the person can't afford to pay them, they will turn to filing for bankruptcy.
Job Loss Another reason why people turn to bankruptcy for a way out of a financial disaster, is when they all of sudden experience a job loss. When a job loss occurs and the savings isn't big enough to cover the monthly bills and unexpected bills, then creditors will start stalking their phone and mailbox. Sometimes the person will feel like bankruptcy is their only way out of the mess.
High Interest Rate Loans When an unexpected emergency comes up, either it is medical or maybe a car repair, some people will turn to high interest rate loans. These loans are payday loans, these loans will help the person manage the bill until their next payday. The problem with these loans is that the interest rate are so high that many people have trouble paying them back or they will never pay them back. This will lead to poor credit and then bankruptcy.
Divorce When a family is dependent on two incomes, they forget how hard it would be if it dropped down to only one. When divorce or a separation happens, each person will move into his or her own place and then one person may get stuck with the other persons debt. If the debt is too high, then the person may not be able to handle it. This is when the bankruptcy option may come into play.
Poor Financial Planning Poor financial planning can be the root of all evil when it comes to household's finances. There are many people who live beyond their means and lack when it comes to their saving efforts. When unexpected expenses come in, the person won't have the means to pay it. This can lead to the bill being turned over to a creditor. Once the bill is very late, it can be a hunting experience and the person may turn to bankruptcy for their only way out.
Uncontrolled Spending There are many people who love to live like the Jones's. This is called, not living your wage and impressing people who don't matter. Uncontrolled spending is something that is usually a sign of a person trying to fill a void somewhere else in their life. It is important to create a budget and try to make small percentage money to just spend.

Also, never use credit cards when spending money on items that are not an emergency or needed. Credit cards that are used out of control, can lead to large amounts of debt. When that percentage is used up, it is over for the month. If this is not put to a stop, bankruptcy may be the only option for the situation.

Stop Foreclosure When money becomes a problem and person's expenses are higher than their income, this may lead to a foreclosure on their home. This can become a scary feeling when a person finds out that their financial situation may lead them into losing their home. Many people in this situation rather stop the foreclosure and file bankruptcy, than see their home be taken away.
Prevent Repossession Just like when someone may experience a foreclosure, repossession on their car can happen, as well. Depending on their location, an automobile can be a necessity to get back and forth from work and other places the person needs to go. Auto loans can be very high depending on the interest rate the loan is set on. If the person becomes behind, it can become a nightmare for them to recover and dig them selves out of the auto loan hole.

No matter what the reason is for filing bankruptcy is, there a few things a person should consider. There are different types of bankruptcy's, different laws for each and the person may not be free and clear of paying the debt completely. Sometimes filing for bankruptcy can lead to future problems, such as finding employment, getting a auto loan, mortgage or even renting a home for their family to live in.

How To Calculate Your Student Loan Consolidation Rate

noreply@blogger.com (Anonymous) — Mon, 21 Jan 2013 09:42:00 +0000

Federal student loan consolidation rates do not differ all that much from what borrower is already paying, as the rate is a weighted-average of the borrower's current loan rates that has been rounded up to the nearest one-eighth of a percent. For example, if a borrower has two current loans, one that makes up three quarters of the total borrowed at 7 percent, and one that makes up one quarter of the total borrowed at 5 percent, the new rate calculates as follows:

7% x .75 = 5.25 percent
5% x .25 = 1.25 percent
Add these two totals together: 5.25% + 1.25% = 6.5%

So the new student loan consolidation rate would be 6.5 percent, which is pretty much what the borrower was paying across the two original loans, now combined into one consolidated loan. One common question is can student loan consolidation help? Read about this question and answer at PayMyStudentLoans.com

Which loans are eligible for student loan consolidation?

Student loan consolidation rates are applicable to several different types of loans, listed here:

Stafford Loans - Subsidized and Unsubsidized
HEAL/HPSL Student Loans
Parent and Graduate PLUS Loans
Existing Federal Consolidation Loans
Perkins Loans
Nursing School Loans and more...

Student Loan Consolidation Rates and Private Loans

Since private loans, like credit card debt, car loans, mortgages, etc., are entirely different types of loan than a federal student loan, they usually cannot be consolidated into a federal loan. Private loans may be consolidated with other private loans and will most likely have variable interest rates, which means if a borrower applies when rates are low, he or she could potentially save thousands of dollars, but since the rate is variable, it may get higher as time goes by. See reviews of the most popular private student loan consolidation companies here. Another way private loan interest rates can differ greatly from federal loan rates depends on the borrower's credit history. When borrowers apply for private loans, the lender will require them to pass a credit check; if the borrower's credit score is wanting, the borrower will end up paying a lot higher of an interest rate on the loan. Private loans also usually lack the kind of borrower protections available with federal loans, such as deferment (payment suspension due to unemployment, active military duty, etc.), and forbearance (payment postponement with interest accrual due to financial hardship). That said, borrower protections offered with private loans vary widely from lender to lender.

Also Good to Know

There do exist significant potential drops in student loan consolidation rates at the Federal level, but those rate decreases are available only to those borrowers who have government PLUS loans. Many PLUS loans have more than the maximum allowable student loan consolidation rate of 8.25 percent; if a borrower currently has more than one PLUS loan, say at rates of 8.5 percent, it would be helpful to consolidate those two loans into one new loan with a rate of 8.25 percent. And lastly, a note of caution: Thinking of consolidating private and federal loans together? Think again. As noted, it's not usually possible to combine private and federal loans, but there are indeed plans out there that offer to do just that. Bad idea, according to Betsy Mayotte, director of regulatory compliance for American Student Assistance. Mayotte tells borrowers to steer clear of consolidation loans that combine federal and private loans, as putting the two together automatically prohibits the borrower from any federal protections.

Yakezie Carnival by One Dumb Guy

noreply@blogger.com (Anonymous) — Sat, 08 Dec 2012 19:48:00 +0000

Welcome to this weeks Yakezie Carnival! Many of the bloggers listed below probably don't know who I am and have never heard of this blog. My name is Matthew Allen and I signed up to host a Yakezie carnival early this year (2012), then kind of abandoned this blog around May. I completely forgot that I had signed up to host a carnival until I got the e-mail last week telling me that I was the next host. Dumb me!

I e-mailed the Carnival Admin and explained the situation and told them it wouldn't be a problem to post the carnival if they couldn't find a replacement. I think they forgot to look for a replacement. So here it is!

By the way - if you didn't know of me when I was active in Yakezie and regularly blogging on this blog - you can find out more about why I quit and what I am doing now on my new blog. My new main hub is Dumb Passive Income and I also started another new blog recently called The Pay Off Credit Card Network. If you dig deep into the archives of Dumb Passive Income, the explanation for why I quit this blog to start a new one is there.

Now, onto all the great posts in this weeks carnival! -

MMD @ IRA vs 401k Central writes What are the 401k Withdrawal Rules for Getting My Money Back? - Before putting too much money into your employers retirement plan, it helps to understand the 401k withdrawal rules and when you'll see your money again.

Steve @ Grocery Alerts writes Holiday Savings Tips by Top Personal Finance Bloggers - The Holidays are sneaking up on us and I wanted to find out from some of the top Personal Finance Bloggers, their best tips for saving around the holidays.

Jacob @ My Personal Finance Journey @ My Personal Finance Journey writes Do You Spend Rationally or Emotionally? - Why is it that so many of us have difficulty making the math work when it comes to budgeting and our personal finances? Isn't budgeting simply a basic math problem? This post discusses the idea of spending rationally and spending emotionally, and how one of them can cause many financial woes.

Kurt Fischer @ Money Counselor writes Overlimit Fees: Don't Opt In! - The CARD Act of 2009 gave consumers the power to opt out of overlimit credit card transactions and fees. But have you unwittingly opted in?

James Petzke @ This Is Common Cents writes The Only Real Get Rich Scheme - If you follow a simple two step plan, you'll find that you will build wealth no matter what.

Rohit @ The Money Mail writes Make Simple Budgets that work - Making a budget can be a lengthy and boring process. Use this new simple budget template that is easy to modify. Just plug in the numbers and you have a simple budget ready for your use.

Pauline @ Reach Financial Independence writes Being outside of average - This is a guest post from the Outlier Model about their dreams of early financial freedom and sacrifices to get there

Lance @ Money Life and More writes 2013 Standard Mileage Rates Announced by IRS - The IRS has released the new standard mileage rates for 2013 that many companies use to reimburse you for business miles driven on your personal vehicles.

Andrew @ 101 Centavos writes Be A Modern Magician - To be a modern magician, there are no requirements for pointy hats or chanting incantations of arcane magical lore. Just spend some time on Investopedia, pore through a couple of investing tomes (preferably Benjamin Graham’s Intelligent Investor), and prepare to let concepts such as debt-to-equity ratios, free cash flow, and EBITDA seep into your noggin.

Drew @ Objective Wealth writes A to Z of Objective Wealth: J is for Judgemental Heuristics - Drew goes back in time to the late 60's, and finds out that the early pioneers of behavioural economics knew even back then that investors can be their own worst enemy if they don't separate their emotions from reason.

Michelle @ The Shop My Closet Project writes Whole Paycheck-Buying groceries without breaking the bank - In this fast paced life we live, it is easy to throw a meal in the microwave take it out and that's it. Quick, fast, and easy. For me this isn't an option. Why? Because I live to eat. I don't eat to live. But I don't want to go broke going to the grocery store.

Ted Jenkin @ Your Smart Money Moves writes Should You Pay Off Your Mortgage? - One of the more difficult questions that I get from both younger and older people alike is whether or not it is a good idea to pay off their mortgage.

Matt @ How to Make Dishwasher Detergent writes How to Make Homemade Dishwasher Detergent - Making homemade dishwasher detergent is easy and convenient. Gathering the ingredients and mixing together is a little out of the ordinary at first, but worth it to many frugal families in order to save a little money and get back to a more natural way of living.

Jen @ Master the Art of Saving writes Things I Didn't Expect About Buying Our First House - I didn't really know anything at all about buying a house when we jumped into it. Sure I had a general idea about how things would go, but that's pretty much...

Kyle @ The Penny Hoarder writes Know Your Options in a Financial Emergency - You're going to need some money, and sometimes that need can come up at the worst possible time. All across North America and Canada families find themselves short of cash with days or even weeks to go before the next paycheck comes in.

BARBARA FRIEDBERG @ Barbara Friedberg Personal Finance writes 7 HOLIDAY SHOPPING TIPS - Shopping tips to have a great holiday. How to enjoy the season and avoid debt.

Crystal @ Budgeting in the Fun Stuff writes Unprepared - I like to think of myself as being financially knowledgeable. But we are unprepared.

Mr. Money @ Smart on Money writes 5 Tips for a Successful Homemade Christmas - One way to reduce your costs during the holiday season is to go for a homemade Christmas. Not only can you save money, but you can also produce unique gifts that are personal for the recipient. Here are some tips for making your homemade Christmas a little more successful:

Evan @ My Journey to Millions writes December 2012 Net Worth Update - From November 2012 to December 2012 my net worth increased 1.29% Year to Date my net worth has increased 39.19% From January 2011 to October 2012 my net worth has increased 140.48%

Beating Broke @ Beating Broke writes The Cost of Civic Duty - As this is posting, (thank you scheduler) I’ll be arriving at my local court house to perform the civic duty of jury duty. It’s an interesting civic duty; one that’s is both afforded us if we are ever persecuted, and one that we must perform for those that are. But, what is the cost of doing your civic duty?

Jason @ Live Real Now writes Comfort Zone - Leaving your comfort zone is, by definition, uncomfortable. Sometimes, it’s downright painful. Without it, you can’t grow as a person. Find yourself someone who is willing to obnoxiously drag you into situations that push your limits. It really can be fun.

Invest It Wisely @ Invest It Wisely writes Weekend Reading, November 2012 Edition - Weekend reading edition, I hope you enjoy!

Ryan @ Early Retirement Investments writes 3 Ways to Enjoy Your Retirement Online - Here are three ways to enjoy your retirement online.

Mike @ Personal Finance Journey writes Four great ideas to use a Big Screen for an Autumn Festival or Company Function - Four great ideas to take advantage of Autumn weather, keep the kids entertained or plan your Company Function in a fun unique way.

harry campbell @ Your Personal Finance Pro writes A Review of My Experience With Car2go San Diego: A Car Sharing Service - Although Car2go hasn’t reached every major city yet, there is probably some type of car sharing service available in your local metropolitan. Whether it’s Zipcar or some other service, the idea of car sharing has really taken off over the past couple years. I’m pretty intrigued by the whole idea because less cars on the road is better for the environment and traffic congestion. This is pretty important for a city like San Diego with millions of people and no viable public transportation

Maria @ The Money Principle writes Top Errors People Make When Looking For Car Insurance - Loyalty is a great thing but not when looking for car insurance. Be informed, ready to switch and truthful to come top trumps in car insurance.

Daisy @ Add Vodka writes Just Add Beer - Many Uses For Beer (Other Than Drinking) - Read about the other fascinating uses for beer other than just consumption.

Robert @ My Multiple Income writes 6 Steps to Starting a Business - The different steps to start a business.

CAPI @ Creating a Passive Income writes Passive Income: Cashing in on Publishing Royalties - Find out how to generate passive income buy publishing writing.

IMB @ Investing Money writes Keeping Management Fees Low - Find out what fees you can expect and how to keep management fees to a minimum.

MR @ Money Reasons writes An iPad Mini For Christmas - Why and iPad mini for Christmas? This article is why I'm buying my daughter an iPad mini for Christmas but not one for myself.

Suba @ Broke Professionals writes In Today's Workplace, Is There A New Normal? - I've never had an average workday, but now that I freelance, I don't have a traditional workplace either. I'm not the only one. Is this the new normal?

Luke @ Learn Bonds writes Investing in International Bonds - I would like to mention a few ETFs worth exploring if you plan to venture into the world of investing in international bonds.

Rich @ Growing Money Smart writes Afraid of Success - Every think about why you are not rich, or why you're not trying to make more money? Perhaps you are afraid of success? Read how to overcome this fear.

krantcents @ KrantCents writes How to Shop for the Holidays - Have you started to shop for the holidays? Here we are again, the holidays are here and the day after Thanksgiving is the official opening of the season. A couple retail stores are talking about starting on Thanksgiving. This confirms we are a consumer oriented country! I know some of you have started already.

Matt @ Living in Financial Excellence writes Refusing to Conform: Why I Am Not Shopping on Black Friday - All across America, there are two groups of people gearing up for Black Friday. Those who can’t wait to check out the deals, and those who want nothing to do with it and are planning to stay home.

TDB @ Tax Deduction Blog writes How to Get the Most Out of Your Flexible Spending Account - Check out this article for tips and tricks on how to get the most bang for your buck with your flexible spending account before it’s too late.

Jon the Saver @ Free Money Wisdom writes How To Pay Your Credit Card Off Faster - Paying off a credit card is not fun. In fact, it can be quite painful! Don't let it hinder your future, take these steps to conquer your debts!

Deacon @ Well Kept Wallet writes Get Cash Back Using a Debit Card - Most people don’t realize that they can get cash back by using a debit card. Every day people make purchases with their debit card and never get anything in return. That is about to change. There is a bank called Perkstreet where you can get up to 2% cash back on your purchases. Kim and I have been using it for about two months and love it.

Roger the Amateur Financier @ The Amateur Financier writes Eight Ways to Save During the Holidays - Eight suggestions for how you can keep your costs to a minimum during the holidays, while still have a great time and giving out plenty of presents.

Bryan @ Gajizmo.com writes Types of Insurance For Homeowners - Consumers are well-aware of auto, health, life, and home insurance, but what about the other, less common types of insurance most Americans use at some point? We cover the importance of title, mortgage, liability, umbrella, earthquake, and flood insurance.

Miss T. @ Prairie Eco Thrifter writes How to Meet New Friends in a New City - Making friends in a new city can be very difficult if you don’t know where to look. Here are some tips and tricks on making friends in a new area.

SFB @ Simple Finance Blog writes The 4 Most Popular Ways To Save For Your Child's College Education - This article will discuss four ways to invest and save for your children’s college education. These strategies include 401k, ROTH IRA, 529 plans, & ESA.

Edward Antrobus @ Edward Antrobus writes Three Tips for Christmas Decorating on a Budget - Christmas decorating doesn't have to break the bank. Follow these three tips to creating an incredible display without blowing all your money.

Hank @ Money Q&A writes Should You Work For Yourself? Things You Should Consider - Should you work for yourself? There are many things that you must consider before you make that leap. There are questions that you need to ask yourself before you go.

Corey @ 20s Finances writes The Potential of Green Technology - The future of green technology seems to be in sustainable energy systems that is privately owned and operated. Learn more about my creative idea.

Emily @ One Smart Dollar writes Not All Bills Help Rebuild Credit - http://www.onesmartdollar.com/not-all-bills-help-rebuild-credit/

Don @ MoneySmartGuides writes Ways to Get a Personal Loan - I recently posted an article about things you should know before borrowing money.

Amanda L Grossman @ Frugal Confessions writes Hidden Fees Make Rental Car Quotes Bogus - I have rented a car three times in my life. The first was on a memorable first business trip to Fargo when I was 23 (a difficult feat, as rental companies get

PPlan @ Provident Plan writes Preparing for an Emergency - As many of you know, Hurricane Sandy hit the north east a few weeks ago.

Eddie @ Finance Fox writes What was Your First Job? What Did You Take Away From It? - What was your first job? What did you learn from your first job? Here's my story on my fist job and hopefully you can share a story on your first job.

Jennifer Lynn @ Broke-Ass Mommy writes Festively A Minimalist - Being a minimalist is great! Read why

Megan Russell @ Kittenomics writes Financially Savvy Kittens on Gifts to Charity - This kitten gifts appreciated stock. Be more like this kitten.

Everything Finance @ Everything Finance Blog writes Gift Ideas for Your Mother-In-Law - With three presents a year (Christmas, Birthday, and Mother’s Day), I quickly run out of ideas. Here is a list of gift ideas that have worked for my mother-in-law.

Cash Flow Mantra @ Cash Flow Mantra writes Buried My Father Last Week - When we looked at my mom's budget, it worked as long as my dad was alive. Now that he is gone and loses his pension and social security, her budget will be somewhere between $500-$1000 short per month. Looking at that kind of burn rate, she could probably make it for 15-17 years.

Sustainable PF @ Sustainable Personal Finance writes Australia's Most Sustainable Cities - Although visitors are drawn to Australia for its natural beauty and stunning array of wildlife, the majority of its residents live in urban areas. Nearly 90% of its residents live in cities, mainly along the coastlines of this massive country.

Little House @ Little House in the Valley writes More Mason Jar Ideas - Here are a few new ideas, or new to me, on how to use Mason jars in your everyday living

Teacher Man @ My University Money writes Get Your Parents To Buy You a House! - To most parents, buying a house for their 18-20 year old son or daughter to manage as a rental property as they go through school seems like a ...

Ashley @ Money Talks Coaching writes Job Transition - My family is going through a small job transition right now. If there is such a thing. My husband's company got bought out by another company.

Joe @ Midlife Finance writes Are You Making Financial Headway? - It’s not a bad idea to take stock of your financial decisions this year — even if most of them were unplanned.

Steve @ Ready To Quit My Job! writes Why You NEED to Quit Your Job RIGHT NOW! - The days are gone forever where you went to college, got a job that was not personally rewarding, worked at the same place for 40 years, retired and then got bored, depressed and finally died.

Josh Thompson @ Becoming Your Own Bank writes Alternative Investments - Alternative investments to stocks, bonds, mutual funds, and government sponsored plans.

Young @ Young And Thrifty writes How The Canadian Banks’ Spending Spree Affects You - The recent headlines that smack of patriotic pride concerning Canadian banks buying up distressed financial assets in the USA over the past few months have been interesting to say the least. I don’t know a heck of a lot about corporate finances at the highest levels, or even what metrics these guys are using in order to gauge if these acquisitions make sense or not. Anecdotally though, as a Canadian citizen, I think I should be interested, and possibly even concerned about these goings on, e

A Blinkin @ Funancials writes How Are You Affected by the Mortgage Interest Tax Deduction? - Interest deductions, in general, began in 1913. At this time, the majority of Americans paid upfront for their homes rather than financing so the deduction wasn’t highly utilized. The deduction, which included interest paid on personal loans and credit cards, was later revised in 1986 to exclude these items.

Corey @ Steadfast Finances writes Best Holiday Gift Ideas - Find out why giving experiences as gifts is the better alternative to buying lots of stuff this holiday season.

Jason @ Work Save Live writes Secured and Bad Credit Cards - Whether you are looking to build credit for the first time, or you have bad or fair credit, it is difficult to find a company that will agree to loan you money. Fortunately, there are specific bad credit credit cards that have been created to help in these situations.

Passive Income Earner @ The Passive Income Earner writes Dividend Stock Analysis: Canadian National Resources (CNQ) - Dividend stock analysis of Canadian National Resources (CNQ)

Daniel @ Sweating the Big Stuff writes 5 Things We Need To Buy, But Hate To Spend Money On - There are things that just about everyone spends money on, whether we like to or not. Here are the 5 worst offenders in my book.

David Carlson @ Young Adult Money writes The Costs Involved in Sinus Surgery - Millions of people have sinus issues, and for thousands of people each year this leads to surgery. I explain how much sinus surgery costs and how to deal with paying for this major expense.

Kanwal @ Simply Investing writes Do You Think Investing is Easy? - You don't earn more if you have the higher IQ, nor do you need to be a math genius to make money.

Tushar @ Start Investing Money writes What Are the Top 5 Commodities Exchanges? - Just as stocks and shares are traded on the stock exchange, so commodities are traded on a commodities exchange. Commodities may be viewed as tangible items, mainly those that are derived from agriculture.

SBB @ Simple Budget Blog writes Stop Living Paycheck to Paycheck - Are you having difficulty saving extra money? Are you sick of living paycheck to paycheck? Find out how to improve your life with a budget.

Jester @ The Ultimate Juggle writes Secrets To Santa's Success - In my recent interview with Santa, he revealed to me the elements that makes him a huge success.

Jeff Rose @ Good Financial Cents writes Is an Annuity The Worst Investment a Young Person Can Make? - First, let’s look at the basics of annuities. Annuities are another form of retirement savings, different from IRA’s, 401(k)’s, stocks, bonds, mutual funds and savings accounts.

J.P. @ Novel Investor writes Gifting The 21st Century Savings Bond - For decades the savings bond was the easiest way to gift money that would grow over time. Times have changed and now there is a better option.

Arnel Ariate @ Money Soldiers writes Blogging for Money - I treat blogging as a business. Blogging is just like any other business. A business needs customers and quality products to thrive. Customers need quality products and vice versa. In this article, I talked about all the different ways I did to build my blog's readership.

Glen Craig @ Free From Broke writes Chase Ink Bold® Business Card Review - Run a business? Looking for a card that can earn you rewards as well as help you manage your business? Take a look at what the Chase Ink Bold Business Card offers.

FMF @ Free Money Finance writes Gym Memberships are Good Deals -- If You Use Them! - Memberships are not all bad. If you actually use a membership, it can save you a great deal over a per use payment structure.

Jefferson @ See Debt Run writes That Christmas Time of Year - Christmas is the time when tradition and togetherness combine to bring together some family happiness.

PK @ Don't Quit Your Day Job... writes Wealth is Not Income - Wealth and income may be closely related, but they are not the same thing. Although you may know people who have high wealth and income, high earners aren't automatically wealthy.

John @ Frugal Rules writes How do Credit Cards Make Money? I Found Out the Hard Way - When you make a purchase with your credit card, do you know who you’re borrowing money from? I didn’t and years ago after getting myself into some credit card debt, I realized that I made an assumption that was fundamentally wrong about credit card companies - that they cared about me. I asked myself the question, ‘how do credit cards make money?’ and realized the answer would be my motivation for never getting into credit card debt again.

Robert @ The College Investor writes Keep Safe During the Holidays - How to keep family and valuables safe during the holidays

Robert @ My Multiple Income writes My Monthly Income Stream Report – November 2012 - November Monthly Income Stream report

Robert @ Entrepreneurship Life writes Backing Up Your Business Files - Keeping your business files safe and backed up is important. If your computer was stolen or crashed tomorrow, would you have everything you need?

Philip @ PT Money Personal Finance writes 15 Fantastic Financial Christmas Gift Ideas for Children - If the last thing your child needs is one more toy that will be cast aside in a few weeks, consider getting him/her one of these financial gifts that will teach them more about money.

Buck Inspire @ Buck Inspire writes My Housing Crisis of 2012 - We all heard of being upside down on a house, but what about inverted or reversed? Here's my crisis just before closing on my new home.

Lisa @ Thriftability writes The Fight Against Credit Card Rip-Offs - Unexpected - and unauthorized - charges are often added to orders we place online. Read Ms. Thriftability's account of how she avoided these charges recently, plus tips to avoid these "grey charges."

Emily @ Evolving Personal Finance writes November 2012 Month in Review: Money - I share our spending from November, which was our highest usage of our targeted savings accounts to date because of car trouble and travel.

Obamacare Screws the Lower Class

noreply@blogger.com (Anonymous) — Fri, 29 Jun 2012 11:31:00 +0000

On June 28th, 2012, the Supreme Court of the United States upheld the individual mandate portion of the Obamacare law that states that all U.S. citizens must purchase private health insurance or else. Basically, if you don’t purchase health insurance, for whatever reason, you will have to pay a penalty to the federal government. Instead of calling it a penalty or a fine, they are now calling it a tax. This is part of what enabled them to get it past the Supreme Court because the Constitution doesn’t say anything about limiting taxes or how and why they are collected.

To put it in simple terms, President Obama’s healthcare law is causing a major tax increase. The experts are calling this the largest tax increase in the history of the world! Who gets to pay this new tax? The people who don’t have health insurance. In other words, the very people who Obama claimed he wanted to help with this healthcare law are the people stuck paying the new tax.

People Who Don’t Have Health Insurance

There are three income classes and types of people in the United States. The upper class who are the high income earners. The middle class who are middle income, or average wage earners. And the lower class who earn or receive a very low income. There might even be a fourth class, which are people like the Amish or other fanatical groups who disconnect themselves from society as much as possible.

The upper class. The rich. Many of them have health insurance because they can easily afford it. No matter how much it goes up, it is just a drop in the bucket to them. Most of these people are wise. That is how they got rich. Wisdom tells them to buy health insurance because it deters their costs for healthcare. Some of the super-rich choose to not buy health insurance though. They don’t need to. They are what is called, self-insured, meaning they pay for their own healthcare costs out of pocket. Even for catastrophically major medical expenses they are able to pay. What’s a hundred grand for major surgery when you have a few hundred million in the bank? This is one example of the uninsured. To them, this new tax for not buying insurance isn’t going to matter.

The middle class. The average man or woman who is trying to live the American dream. Most of these people also have health insurance, usually provided by their employer and at a discounted rate to them. But some of these people do not have insurance. Whether by choice or by matter of circumstances, some just choose not to buy health insurance. Maybe their employer no longer offers it, or it has become too expensive as a result of Obamacare. Whatever the reason, if these people choose to continue being uninsured, they will now have to pay the new tax. For most of them, this will be merely an inconvenience. It will basically offset the cost of what they would have been paying for insurance. In other words, they might as well buy the insurance. In essence, they are being forced to purchase health insurance.

The lower class. The poor. This category includes people who earn very low wages (minimum wage), welfare recipients, or the unemployed. A very small percentage of these people have health insurance, unless they are in some sort of “free” state-sponsored program. The reason they don’t have insurance is obvious. They either don’t have an employer who offers it and/or they simply can’t afford it. The bulk of the people who will be stuck paying this new tax come from this class. Seems fair, doesn’t it? The people who would like to have healthcare but don’t because they can’t afford it will now get to pay a penalty (or fine) to the government in the form of a tax. Obviously, they cannot afford this new tax, otherwise they would have bought insurance in the first place.

The fourth class. The Amish or other fanatical groups. Did you know that the Amish don’t buy health insurance because they believe that doing so means that they distrust God. I’m sure there are other crazy groups of people who don’t purchase insurance for similar reasons. At least with the Amish, they will probably be exempt from having to pay this new tax for religious reasons. In much the same way, they are exempt from having to participate in the Social Security program. So groups like this really don’t enter into the discussion.

Who is Really Going to Pay?

As you can tell by my logical explanation, the lower class holds most of the uninsured in America. They will be the ones who are supposed to pay, but they will not be able to. What is going to happen to them? Will the ever-powerful IRS actually enforce this new law? Will it drive America’s poor into deeper poverty?

The real burden is going to fall on the uninsured in the middle class. The hard-working man or woman who is trying their best to make ends meet will be stuck with yet another tax if they fail to buy health insurance. And if they do buy health insurance, the costs are now skyrocketing as a result of Obamacare.

We’re pretty much all screwed by this law. The rich continue to get richer and are barely affected by this law. The poor continue to get poorer which will only be enhanced by this law. The bottom of the middle class is slowly drifting into the lower class and the top of it is working its way towards the upper class. The middle class is starting to disappear. Soon we will have only the rich and the poor in America and everybody knows that the rich rule over the poor. Money wins elections and money writes the laws. We the people are falling victim to the results of greed and power and there is seemingly nothing we can do about it.

Readers: What are your thoughts and feelings about the recent Supreme Court decision to uphold the individual mandate within Obamacare?

This post was written by Matthew Allen from Dumb Passive Income.

Nothing To Lose

noreply@blogger.com (Anonymous) — Wed, 20 Jun 2012 01:41:00 +0000

Injuries – no one likes suffering them, but if you do, one of the many different thoughts which are likely to enter your mind is the question of who is at fault. In many circumstances, accidents just happen, but in some cases, they’re often caused by someone else without prior warning. Injuries which arise from those types of accidents are sometimes the most serious and can be hard to cope with because of the way in which they occurred, mainly because you didn’t expect it to happen to you.

The problem with surprise injuries is that you don’t know how to react, how serious your injury is or what will happen over the course of the coming weeks and months. While seeking help with your injury should be the first thing on your mind, you might also want to think about what else you might need to do in case it could cost you financially. When you sustain an injury which stops you from working, loss of income could cost you thousands of dollars, which could leave you struggling to survive at a time when your aim is to recover from your injuries.

I have always been on the lookout for extra money. I have yet to find a get rich quick scheme that works, however I have seen a gap in the market for claims compensation. If I was injured and it wasn’t my fault I would look to make a claim. This would increase my personal finances and not cost me a single penny. This is how companies such as www.nowinnofee.net and www.personalinjurylawyers.com operate. They will not charge me for claiming! I could be entitled to some extra money to cover the cost of time lost at work, monthly bills and many other financial obligations. So I guess what I am trying to push out to my readers is that claiming will increase your finances and bring justice to the situation - and that’s always a win-win situation.

Carnival of Financial Planning - Money Management Edition #239

noreply@blogger.com (Anonymous) — Fri, 01 Jun 2012 11:04:00 +0000

Carnival of Financial Planning 06-01-2012

Financial Planning Articles this Week

Welcome to the June 1, 2012 Edition #239 of the Carnival of Financial Planning.

This edition is arranged by subject heading, so that you can browse efficiently.
Enjoy!
The Skilled Investor, Editor

Budgeting and Economics

Miss T. presents How Pinterest Can Save You Money posted at Prairie Eco Thrifter, saying, "If you’re anything like me, you’ve most likely found yourself sucked into the wonderful world of Pinterest at least once. With a few clicks of your mouse, it’s easy to build boards of inspiration for countless numbers of items, interests and passions. But did you know that Pinterest is also a fantastic resource for saving money?
Matt presents Monthly Grocery Sale Cycle & When to Stockpile posted at Living in Financial Excellence, saying, "A savvy shopper waits until a product is on sale and then buys lots of it to get it at its lowest price! The idea is to create a stockpile that will last you 3-9 months or until the product goes back on sale and can be bought at its lowest price. Packaged foods are seasonal, just like produce. Check out the list below and find out when your favorite foods will more than likely be at their cheapest.
Amanda presents How to Splurge On A Budget posted at My Dollar Plan, saying, "How and when to splurge even on a tight budget!
PITR presents Ways to Retire Early posted at Passive Income To Retire, saying, "Find out what it takes to retire early. Do you have what it takes to quit your day job before everyone else?
Lance presents Christmas is Seven Months Away – Have You Started Saving? posted at Money Life & More, saying, "My monthly spending allowance is much less than what I plan to spend on gifts so how do I get the money to buy my gifts at the last minute in December? I’m going to save in advance!
Janet presents Expense budgeting posted at Fee Only Financial Planner , saying, " Many people do not track their living expenses and do not understand the magnitude of their consumption. Failure to monitor your consumption expenditures means that they are flying blindly regarding their future finances. "
Emily presents Joint and Separate Money Series: Odds and Ends posted at Evolving Personal Finance, saying, "I provide short summaries of three papers concerning couples' decisions to join or separate their money upon marriage or cohabitation."

Financial Planning

Wayne presents Cheap Hobbies to Save You Money posted at Young Family Finance, saying, "Find ways to save money with these cheap hobbies. You will save money and find enjoyment at the same time.
MR presents Are Robert Kiyosaki's Books a Stepping Stone To Wealth? posted at Money Reasons, saying, "After re-reading the rich dad poor dad author Robert Kiyosaki's books, I now think that they serve a great purpose on the road to wealth... Believing!
Aloysa presents Why I Took Out a 401K Loan posted at My Broken Coin, saying, "Two years ago I took out a 401K loan to pay off my personal loan. Don't gasp. Don't shake your head. Don't judge, or be judged, remember? Most financial bloggers recommend to never borrow from your 401K. They are right: the risks of taking out a 401K loan outweigh the benefits by far.
Marie presents Dividing Your Estate Unequally Between Children posted at Family Money Values, saying, "Expert sources all agree that you have the right to do whatever they want to with your estate. If you want to leave unequal distributions, that is your business. However, they also agree that leaving unequal distributions can lead to more legal challenges to your estate’s distribution as well as to more anguish and conflict between your heirs. In this post, Marie explores suggestions to reduce the conflict and anguish.
Stephen presents Credit, Debit, or Prepaid? Choosing the Right Card posted at NerdWallet | Education, saying, "Managing your money starts in your wallet. This video discusses the various financial products and gives recommendations on which card(s) are best for your lifestyle.
Lazy Man presents When Should You Retire from the Military? posted at Lazy Man and Money, saying, "How long should you stay in the military? Obviously the longer you stay in the more your pension is, but the whole point of having a pension is to use it and enjoy it, right? There's no right or wrong answer for everyone here, but when I looked at the pay charts there were answers that seemed a lot more "right than others.
Daisy presents Are Bloggers Really Writers? posted at Add Vodka, saying, "I was in Kindergarten when I picked up my first novel Babysitters Little Sister holla! that a family friend had given me to save for when I was actually old enough to read it, and I never looked back.
PPlan presents Should You Pray for Good Fortune? to Win the Lottery? posted at Provident Plan, saying, "Do you find yourself wanting more money? Maybe you want to win the lottery. Find out how prayer comes into play and whether it can help you win the lottery.
Frank presents Passively Managed Funds posted at Individual Investor Strategies, saying, "Short-term mutual fund trading is a zero sum game played against other very well informed mutual fund traders and other securities market traders. On average, higher mutual fund turnover is far more likely to result in lower investment fund performance — instead of superior risk-adjusted performance."
Eddie presents 5 Full Proof Ways To Beat Rising Gas Prices posted at Finance Fox, saying, "Prices of gas at the pump are just going up, and its our due diligence to keep fighting back by saving money every time we fill our car.
KT presents How to Make Money While Traveling Around the World posted at Personal Finance Journey, saying, "I've read hundreds of stories about people who have made money while seeing all that the world has to offer while still making enough money to pay their bills.
Jeremy presents Putting Your Health Before Your Finances posted at Modest Money, saying, "One area that I was particularly naive was how I viewed health. I thought that while I was young with no obvious problems that I just didn’t need to worry about it. As a result I was irresponsible and abused my body. This may not seem like a financial mistake, but I’m really learning it all comes full circle.
Martin presents Why You Shouldn’t Invest a Dollar Into Your Business posted at Studenomics, saying, "When to NOT invest money into a business.
Suba presents You Better Not Die Without These Three Documents! posted at Broke Professionals, saying, "You Better Not Die Without These Three Documents! is a post from: Broke Professionals if you enjoy it, please visit us and subscribe to the Feed. Death is something that no one wants to think about, but is inevitable. Like the saying goes, no one comes out of this life alive.
Dave presents Active Alpha Returns posted at Wall Street Nerds , saying, " The Old Testament of indexing is Burton Malkiel’s classic A Random Walk Down Wall Street, first published in 1973 by W.W. Norton and now in its ninth edition. For typical individual investors, without special access to information, it offers what is likely the best financial advice they will ever get: It is hard to consistently beat the market, especially after fees. A passive strategy will do better in the long run. "
ETZ25 presents Is BP a Dividend Stock For Entertainment Money? posted at Entertainment Timez, saying, "Would BP make a good stock because of it's dividend as a cashflow for entertainment timez?
Daniel presents IKEA's As-Is Department: How We Saved 40 Percent on a China Cabinet posted at Sweating the Big Stuff, saying, "This article is about how we saved 40 percent on a China Cabinent by buying it thru IKEA's AS-IS Department! Read about our great deal!
PFP presents Investment Tax Management posted at Pasadena Financial Planner , saying, " As you move your cash, bond, and stock financial assets into lower cost, more broadly diversified investment mutual funds and/or ETFs, you should also consider how to “locate” your investment asset allocation with respect to more optimal taxation."
SFB presents The Rise of Electronic Money posted at Simple Finance Blog, saying, "What is electronic money or e-money? What are its advantages and disadvantages.
Maria presents About the importance of spotting opportunities and acting on them posted at The Money Principle, saying, "Looking at my plan and what I have really achieved it struck me that my main achievements didn't have much to do with my plan and a lot to do with serendipity. Also, although my talents, skills and knowledge were absolutely necessary for some of these to come off, they are by far not sufficient. These achievements needed opportunities, my ability to recognise these and the courage to ride with them.

Income

Corey presents How to Turn Artistic Creativity Into Supplemental Income posted at Steadfast Finances, saying, "Find out how you can turn your creativity into a side income and perhaps even replace your day job income.
MMD presents Can You Afford to Work? posted at MyMoneyDesign, saying, "Does your daycare cost more than you make? Would it make sense for you to simply quit your job and stay at home with the kids? There are many reasons on both side of the argument. Let’s explore a few of them.
Stefan presents Investors cash flow posted at Investing: Strategy, Risk, Tools, and more..., saying, "Without a positive cash flow, a individual cannot make the ends meet. And just like companies, individuals can have multiple flows of cash. Employees receive money from their employers. Company owners receive money from their property. And investors receive money from their investments

Insurance and Risk

Jeff Rose presents Can You Get Approved for High Risk Life Insurance? posted at Life Insurance By Jeff, saying, "Perhaps a more common reason for a high risk life insurance policy is some type of health problem that places you in a high risk group.
Jocelin presents How to Be Prepared for an Insurance Claim posted at One Money Design, saying, "Follow these tips to help you be prepared in case you need to file a claim with your home or auto insurance.
Larry presents Identity theft protection posted at Objective Financial Planner, saying, "As a threat to your financial security, you should take the potential for identity theft very seriously. Identity theft sometimes entails a loss of your money, but whether or not you lose money, it can take a very large amount of your time to rectify."
Matt Black presents How to Save Up To $600 a Year on Auto Insurance posted at First Car Insurance Quotes, saying, "Owning a car is something that we often take for granted. The convenience of driving to and from work, collecting kids from school and a trip to the mall is a part of everyday life and we tend to forget about car insurance. That is until the time comes for it to be renewed."

Investing

Mike presents May Net Worth Update +0.03% posted at The Financial Blogger, saying, "A look at where I stand financially.
Ryan presents Investing Lessons from the FaceBook IPO posted at Cash Money Life, saying, "The FaceBook IPO was full of important investing lessons, especially for independent investors.
TSI presents Mutual funds and Morningstar Ratings posted at The Skilled Investor , saying, " Individual investors and their advisors appear to make investment decisions that are heavily influenced by the Morningstar Rating system. Because the stars are very widely used and often misunderstood, these are articles to help investors make more rational decisions about the stars."
J.P. presents The Complete Shareholder Proxy Vote Guide posted at Novel Investor, saying, "As a shareholder, understanding your rights, the proxy voting process and knowing the SEC proxy rules is the best way to stay involved. How you vote could have a direct impact on the company and your money going forward.
DJL presents Distressed Global Financial Markets posted at Nerds on Wall Street , saying, " Stock markets are almost perfectly transparent, with full information available to all, and the best electronic clearing and settlement in history. These technologies were omitted in building the skyscraper of cards (“house of cards” seems too mild) out of collateralized debt obligations (CDOs), credit default swaps (CDSs), synthetic collateralized debt obligations (SCDOs), and the rest."
SB presents How to Control Stock Trading Impulses posted at One Cent at a Time, saying, "People with investible money often gets attracted to stocks after reading an article or two. It is important to not buy out of impulse. Take time, do research and set some guidelines to control your impulses
Roger the Amateur Financier presents How to Create Buckets and Buckets of Money posted at The Amateur Financier, saying, "A short guide to the 'bucket' method of investing, putting your retirement money into different investments that can be drawn upon, with the riskier investments being used to refill the money in the safer investments.
Glen Craig presents Good High Yield Dividend Stocks Are Better Alternatives to Bonds Today posted at Free From Broke , saying, "In today's economy bonds may not be a great investment. See why a good high yield dividend stock may be a better investing alternative.
William presents Superior Mutual Fund Performance posted at No Load Funds , saying, " Screen out inferior mutual fund performance — but only after using other ETF and mutual fund selection criteria. Superior or even average mutual fund performance in the past simply does not predict similar fund performance in the future."
Dividend Growth Investor presents How to generate $1000/month in dividends posted at Dividend Growth Investor, saying, "The goal of every dividend growth investor is to create a portfolio which throws off a sufficient stream of income that pays their expenses. As soon as the amount of dividends exceeds the monthly expenses, the investor has reached financial independence.Now that we have the end goal in mind, we have to determine when exactly we need to be able to achieve the target monthly dividend income.

Managing Debt

Sustainable PF presents HELOC For Consumption vs Investment posted at Sustainable Personal Finance, saying, "The Smith Manoeuvre might not be for everyone, but basic math shows that it isnt insane. In fact, for many people, it makes a lot of sense.
Jester presents Watch out for These Scams When Opening up a High Risk Merchant Account posted at The Ultimate Juggle, saying, "Merchant account scams have become more common as more businesses have become able to accept their customers' credit cards. High risk merchant accounts can be especially vulnerable to these types of scams.
Ashley presents We Paid off $37,000 in 58 weeks! posted at Money Talks Coaching, saying, "My friends Vicki and Alan became debt free this week!! I asked if they would do a little interview for this site and they graciously agreed.
John presents PMI: The Shadow Debt posted at Married with Debt, saying, "PMI is annoying, but is it a debt? Private mortgage insurance, or PMI, is a cost of ownership, but it behaves like a shadow debt.
Beating Broke presents I'm Fine, Thanks posted at Beating Broke, saying, "I’m Fine, Thanks, the documentary that Adam Baker has been traveling the country recording over the last several months is almost complete.

Real Estate

Sandy presents I Bought A Rental Home With My 401K posted at Yes, I am Cheap, saying, "Less than two weeks ago that I told you that I had been thinking about buying a second investment property, and now here I am telling you that I’ve gone ahead and done so. Do you still think that I made a bad decision? Would you have done the same?

Retirement

Jeff Rose presents Should You Rollover Your Pension into an IRA? posted at Good Financial Cents, saying, "e you considering rolling over your pension over to an IRA? Before you do, make sure you’ve explored all your options.
Theresa Torres presents Paying Off Student Debt vs. Saving for Retirement posted at Retirement Calculator, saying, "Here are several things to consider before deciding to focus on paying off student debt first or saving for retirement. You can also choose the option to balance both goals. In the end, it's all about finding out what would work best for you."
Frank Knowles presents S and P 500 Funds posted at Large Cap Funds, saying, "The no load index fund strategy of the Schwab S & P 500 Index Fund tracks the S and P 500 stock index. This no load index fund was listed as one of the top 25 lowest cost index mutual funds in a research study."
Mike presents Would You Retire From a Job You Love? posted at Do Not Wait, saying, "Would you retire from a dream job?
Franklin presents Traditional IRA Versus Roth IRA posted at Better Retirement Planning , saying, " Many taxpayers puzzle over whether to contribute to traditional versus Roth tax-advantaged retirement plans. For most people, contributions to traditional tax-advantaged plans will probably provide a higher net present value over their lifetimes."

Savings

Mike presents Summer Vacation: Boost Your Travel Rewards posted at Rewards Cards USA, saying, "School’s almost out, and summer vacation season is right around the corner. If you are looking to boost the frugality of your summer vacation, and earn more rewards at the same time, look no further than your travel rewards card.
Financial Freedom presents Personal Savings Rates posted at My Financial Freedom Plan , saying, " Understand how your current savings rate and retirement withdrawal rate would affect all of your lifetime personal financial planning goals "
Laura presents Wells Fargo Puts Free Checking on the Chopping Block…Again posted at NerdWallet, saying, " Check out NerdWallet’s recommendations for local credit unions in the states affected by the Wells Fargo fee hike. These free accounts have no monthly fees and no minimum balance requirements, and many of them earn competitive interest too.

Taxes

Dr. Dean presents Innovative Ideas posted at Dr. Dean's TheMillionaireNurse.com Blog, saying, "Are you looking for new ideas? Do you want to learn how to look for ideas in a new way? This is an innovative way to expand your search for creativity."
Paul Tabbet presents Retirement Planning Worksheet Software posted at Tax Planning Software, saying, "Retirement planning software should automate the development of lifetime projections that incorporate tax laws and rules associated with tax-advantaged retirement investment incentive programs such as traditional IRA, Roth, 401k, 403b, SEP, Keogh, and other retirement plans."

That concludes this edition. Submit your blog article to the next edition of Carnival of Financial Planning using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.
Technorati tags: carnival of financial planning, blog carnival.

Side note from blog author/editor: At the time of the publication of this post, this is not exactly an active blog anymore. I have moved and now focus more of my time and efforts over at my new blog - DumbPassiveIncome. I did, however, agree to host this blog carnival a while ago.. so here it is. I hope you enjoyed all of these awesome links. -Matt

The End of The Blog

noreply@blogger.com (Anonymous) — Thu, 24 May 2012 11:10:00 +0000

Greetings all 4 readers who still check this blog to see if I’ve written anything. It has been exactly 3 weeks since my last post, which brings me to the conclusion of an experiment. I was going to conduct the experiment in a 2 week time period, but I wasn’t quite ready. The experiment was simple. Stop writing and posting then watch the blog statistics. Just as I suspected, the visits and pageviews went down dramatically. The Alexa ranking is steadily climbing and the Adsense revenue is pretty much the same. Zero. All-in-all, this pretty much confirms and reaffirms my decision to do what I’ve already begun to do. I’m taking my online ventures and blogging in a completely different direction. Allow me to explain...

It’s All About the Money

Many of the PF bloggers I came across claimed that they don’t blog for the money. They do it because they love it, like a hobby, and because they enjoy helping others. Sure. Me too. But let’s be real. I wouldn’t have made myself get up at 5:30am most mornings in order to blog before work if I didn’t think it was going to eventually lead to money. Nobody, err... very few people get up in the wee hours of the morning to work on their hobby.

For me, yes I really do enjoy everything about blogging. I do love writing about personal finance and money and knowing that some of what I write may be helping people. But at the same time, I was excited about the prospect of making money from blogging. Who wouldn’t want to make money doing something that they love? I did make a little bit of money. About $100 from a sponsored post and some minimal Adsense earnings. Nothing to write home about.

I think my blog was just about to the point where I could have started making some actual decent money. My stats were consistently rising and my Alexa rank fell to 181k (lower is better). So why did I stop? To tell you the truth, I kind of got burnt out. I was actually stuck in a rut. I knew what I needed to do to grow my blog more, but all of that stuff takes time and more time is one thing I did not have. So I just stopped writing one day. I regrouped and re-evaluated what I am trying to do online and made a decision.

Blogger and Yakezie

For those who didn’t know, this RamblingFever Money blog has been on Blogger since day one. I stubbornly went against the grain and stayed on Blogger despite all of the advice to move to Wordpress from nearly all of my Yakezie friends. All of this will be explained in greater detail on my new blog.

Speaking of Yakezie, I have to say thank you to all of my friends and acquaintances who I’ve met through the network. I’ve learned so much about blogging and the inner workings of the internet that I would not have learned otherwise. I did initially complete the Yakezie challenge of getting my Alexa rank below 200k and developing relationships with at least 10 other bloggers. However, I am not an official member. Since I am abandoning this blog, I will not be applying for the official membership. To be honest, I’m not even sure what the added benefits are if you do become a member.

As part of my 3 week non-writing experiment, I did find out that Alexa rankings will steadily climb as readership goes down. Duh! In this 3 week time period, my Alexa rank went from around 182k up to almost 235k. The good news is that since I no longer care about trying to get into Yakezie, I also no longer obsess about my rankings and stats. Yakezie has been awesome, for sure, but is hasn’t exactly led me to where I want to go.

Here is Where I Am Going

I do want to make some money online and I have found another obsession that will likely lead me to do so. While I am abandoning this blog, I have become slightly addicted to blogging and feel that I still need to blog. So, I am starting a new blog in order to document and show exactly how I have failed at making money online and what I plan to do in the future to try to change that.

My new blog is Dumb Passive Income. I finally moved over to Wordpress and it has taken me the last couple of weeks to learn the platform and figure out how to set up different things on the blog. I have most of the basic stuff on there and my first post is up.

I will not be obsessively posting 3 or 4 times per week. It will probably be more like once a week or even once every two weeks. My main intention with this blog is not to make money from it, but rather to show this other way that I am delving into in an attempt to make money. If I do make money with the Dumb Passive Income blog through ad banners or affiliate links, that will just be an added bonus.

I will not be joining any blog networks or doing any of the extra things to try to build page rank, such as submitting to carnivals or writing guest posts for other blogs. All of this stuff takes time away from doing what I really want to do.

Lastly, I am not completely abandoning my love for writing about personal finance and money. I do have another outlet for that, which I link to in my introductory post on Dumb Passive Income. Make sure you check that out and then click through to see that other outlet.

The End

The end of RamblingFever Money is really just the beginning for me. I want to personally thank all of the loyal readers of this blog. Your comments along the way were always encouraging and kept me going. Please don’t hesitate to follow along at my new blog. The easiest way to stay in touch would be through one of the Follow or Subscribe options on the top of the sidebar at the new blog. I look forward to seeing and hearing from you over at Dumb Passive Income.

Get Rich Slow Is Insane

noreply@blogger.com (Anonymous) — Thu, 03 May 2012 12:08:00 +0000

In my previous post, The Truth About Getting Rich Quick, I stated that my stance on the topic has changed. I no longer think of get rich quick as merely a scam. Get rich slow is still a good plan, but maybe not the best plan. It’s as if I have recently had a revelation and have seen the light. Some of the commenters in the previous post were quick to warn me about staying away from get rich quick schemes and to avoid “systems,” where you have to pay to play. Believe me, the new get rich quick that I am thinking about is not a scammy system. I’ve been there, done that, and didn’t even get so much as a t-shirt. The new get rich quick is more of an ideal or a principle. Getting rich quick is the goal. Think of it as a short term goal. Compare this to the old way of thinking - getting rich slow is the ultimate long term goal.

The Old Get Rich Slow Is Insane
In his interview with Pat Flynn, MJ DeMarco (author of the book The Millionaire Fastlane) uses the work “insane,” to describe the get rich slow way of thinking that has become a part of the American dream. Everybody goes to school then gets a job. Throughout their adult life they work. Year after year, they trade five days of hard work for two days off. They diligently save and invest a percentage of their income in hopes of one day becoming rich. At this point, they retire. For most people, this is around age 65.

Why do you think they call it retired? Of course you are tired if you’ve worked your butt off your entire life. A bumper sticker attached to a forklift at one of my daily stops says it best...

I’m RETIRED. I was tired yesterday and I’m retired today!

Think about it, most of us are trained early on that this is the way to go. We are put into the school system at an early age, mostly schools run by the government. We are trained to sit in school from a specified start time until a specified end time. Whether we have our school work done or not, we have to stay until the closing bell. This is perfect training for our future working careers. You have to work the entire day. It doesn’t matter if you are able to accomplish all of your tasks before lunch, you still have to stay until 5 o’clock.

The reward for getting through school, working a full time job your entire life and diligently saving is that hopefully you will live long enough to enjoy it. Hopefully. Do you see how insane this is? Anybody can do the saving part. Building wealth this way is really not that hard. The living long enough to enjoy it is the uncertain part. Nobody knows how long they are going to live. And how much enjoying do you really think you are going to do when you reach your so-called golden years?

The New Get Rich Quick Plan
The get rich quick I am talking about has nothing to do with any scams, schemes, systems or other crazy plans that claim that it is easy. The get rich quick I am talking about involves hard work, knowledge and constant learning. It requires coming up with a plan and executing that plan. It has everything to do with creating your own passive income. Whether through a business, investment or even monetizing a hobby - creating your own income is the way to go. You need to be in control of your own destiny. The ultimate goal is to escape the imprisonment of the full time job.

In his Millionaire Fastlane book, MJ DeMarco discusses the importance of being able to appeal to the masses. Whatever your business idea or passion is, when you monetize it you need to be able to sell it to the masses. This doesn’t mean having a little store front in a small town where a limited number of people are going to visit. It means harnessing the power of the internet to be able to sell to an unlimited number of people. The selling could be that of an actual product, or it could be selling ideas or information.

The possibilities are endless with the internet. I’m not going to go into detail right now, but you see what I mean. The entire world is your audience. The entire world is your customer. All you have to do is figure out a way to monetize whatever it is you have a passion for. Work hard at something in the short term in order to reap monetary benefits in the long term.

Readers: What are you passionate about and how do you think you can monetize it by harnessing the power of the internet?

The Truth About Getting Rich Quick

noreply@blogger.com (Anonymous) — Mon, 30 Apr 2012 11:59:00 +0000

When you hear the words, “get rich quick,” your first thought is that of something scammy. You’ve probably sat in a hotel conference room and watched somebody draw pyramids on a presentation board. I, like many others, have been burned by the get rich quick lie in the past. I’ve tried the multi-level (or network) marketing businesses. I believed it was as easy as getting a few people to sign up. I thought it actually would be that easy to get rich quick. It didn’t work. Everybody knows that get rich quick doesn’t work. For most folks, get rich slow is more realistic. In fact, most financial bloggers know about a very popular blog that was named after and themed around exactly that... GetRichSlowly.org. Good blog. Check it out. But not before you read why my way of thinking on this get rich quick idea has changed. I was formerly content with getting rich slow, until I heard this...

The Millionaire Fastlane
This monetary revelation I recently had came via podcast. This is how I get most of my information and revelations these days. I recently discovered Pat Flynn’s podcast that accompanies his Smart Passive Income blog. In the last week and a half I’ve listened to every single available episode. Most episodes are filled with all kinds of tips, advice and instruction on exactly how to create online passive income. Some episodes highlight success stories via interviews with others who have done it. One episode really stood out to me though and I might even call it life-changing. This is the one that inspired me the most to get serious about creating a passive income and getting on the get rich quick road.

In session number 18 of his podcast, Pat Flynn interviewed MJ DeMarco, author of the book, The Millionaire Fastlane. I haven’t read the book yet, but it is on my list. Just hearing the interview with the author was enough to change my mind, so I’m positive the book will be a worthwhile read.

In the interview, MJ talked about the myth that get rich quick is a scam and that getting rich slow is a better plan. Here is a quote from the interview that stood out the most to me (paraphrasing)...

“Sure, getting rich slow is great - if you want to be the richest guy in the retirement home.”

MJ’s theory is that you should get rich as quickly as possible. Create enough passive income to live on so that you can enjoy life and do whatever you want for the rest of it. Working a job you kind of like, but don’t love, and slowly saving for retirement in order to be rich when you are old is not a great plan in his eyes. It is far better to hit The Millionaire Fastlane earlier rather than later. By doing so, you can enjoy the riches while reinvesting some of them in order to create even more wealth.

This sounds great, right? Who wouldn’t want to do that? The trick is to actually take action and make it happen.

Live Like No One Else
I’ve been listening to Dave Ramsey on the radio for a long time. One of his cornerstone sayings is, “Live like no one else, so that later you can live like no one else.” Usually, he applies this phrase to getting out of debt. Sacrifice lifestyle in the short term in order to pay off debt and build wealth so that later you can live a lifestyle like no one else. It’s a great saying and a great concept, but...

How much later is later? How long do you have to wait before you can live like no one else? Yes, I want to be the richest guy in the retirement home, but I don’t want to wait to be that rich. I would rather be rich sooner, and then be the richest guy in the retirement home. For this reason, I am going to highjack Dave Ramsey’s saying, combine it with MJ DeMarco’s theory, and come up with my own saying. Here it is...

Live like no one else, so that SOONER you can live like no one else.

Essentially, my saying is the same as Dave Ramsey’s, except it implies that the riches will come sooner rather than later. I like mine better. Another one I thought would go nicely with this concept is this...

Work like no one else, so that SOONER you can NOT work like no one else.

This one could be kind of a motto for putting in the hard work to create passive income. Yes, I said hard work. That is exactly what it is. Nobody said that getting rich quick is easy. It is very hard work. But, I believe it is worthwhile and worth it.

Anybody can get rich slow. Anybody can work any old job and slowly but diligently save a percentage of their income. Anybody can build significant wealth this way. In fact, everybody should do this. Not everybody can get rich quick though. Anybody can, but not everybody will. Too many people believe the myth that getting rich slow is more reasonable and better. As for me, I am going to jump on The Millionaire Fastlane and figure out ways to create passive income in order to get rich quick. Getting rich quick really is the better plan and it is not just a scam.

Recommended Resources

Smart Passive Income Blog by Pat Flynn

Smart Passive Income Podcast by Pat Flynn

The Millionaire Fastlane by MJ DeMarco (Amazon Affiliate Link)

Credit is Not Money

noreply@blogger.com (Anonymous) — Fri, 27 Apr 2012 08:00:00 +0000

The following post was written by John at Married (with Debt) as part of a blog swap today. Make sure you visit his site to read my post, Addicted to Debt.

When I was younger, I’d see someone driving an expensive car, wearing fancy clothes, and think “man, I wish I had that much money.”

Now when I see that same person, they look different. They don’t look like money anymore; they look like debt.

That’s right. The fancier you look, the more likely I am to assume you are in debt up to your eyeballs. If I smile at you, it’s not because I think your car is cool, it’s because I think you are a poser.

That’s Because Credit Is Not Money
Yes, I know, some people driving fancy cars are truly rich, but I wonder how they feel knowing there are so many who look just like them, masquerading as wealthy.

These aren’t the “New Rich” or “Old Money” - they are “Fake Rich.” Problem is they all look alike. And when you are at the bottom of an Occupy Wall Street facepunch pile, it’s kinda hard to explain, “No, I’m not rich, I just look that way!”

So if credit isn’t money, what is it?

Credit is living a life your paycheck can’t cash.

It’s the idea of “future money,” that at some point down the road you will have it. It allows us to leverage our current income in exchange for not only buying the product, but an agreement to pay more for it if you give it to us now.

Wow, your expensive suit hides your poor negotiating skills quite nicely!

Addicted to Debt
I’ve heard people from older generations talk about debt like a drug. They are addicted to debt.

“Everybody is doing it” they say. “It’s the American Way,” they add.

Sadly, they are right.

Then they throw the knockout punch - “you can’t take it with you.”

This too is technically true, but they are ignoring the flipside - “you can’t leave your debt behind.” When you die, your estate will absorb the debts and ensure that your heirs receive less.

Credit Is Stealing from Your Future Self
When you borrow money on credit, you are actually stealing (from your future self).

Why are you such a jerk to yourself?

All kidding aside, borrowing until you are maxed out is an abusive relationship with your future. Debt commits us to working more than we should. Debt commits us to working longer than we should. Debt steals from our future.

Aside from trading your future money for I NEED IT NOW, you are trading away other important things, like dignity, patience, and honor.

Why is debt dishonorable? Because you are making a promise that you can’t guarantee you will keep. You are putting yourself in a situation where you might have to stand in front of a judge and undo your promise.

Is it worth trading your word for stuff?

Hoping Is Not A Plan
Instead of worrying about keeping up appearances, let’s worry about keeping up with what we have today. Personal finance needs a long term outlook, and hoping that we will have a certain level of income in the future does not constitute a plan.

Though you may look like a truly rich person while living on credit, you can’t fool yourself.

Oh and by the way, your 65 year old future self called from work at 8pm on a Saturday night and said, “I hope it was worth it.”

Readers: Is it worth waiting longer to retire in order to have things we can’t afford today? Would love to hear your thoughts in the comments section below.

John writes about debt freedom and rewriting the rules of money at Married (with Debt)

Passive Income Aspirations

noreply@blogger.com (Anonymous) — Wed, 25 Apr 2012 11:36:00 +0000

Passive income is something that I desire but something that I do not have. I’ve always had intentions and back-of-the-mind plans to create passive income. I have just yet been able to carry through with any of my well intentions. I know the importance of having at least some passive income in order to accomplish financial freedom. I’ve read the books and the blogs. I’ve listened to podcasts and radio shows. I’m well informed on the things I need to do and why and how I should do them. I just haven’t done them yet. I seem to be stuck in this thing they call life. Work, sleep, eat, poop then repeat. It’s about time I take some of that useful information and put it to use.

What Is Passive Income?

Passive income. Income (such as investment income) that does not come from active participation in a business.

Smart Passive Income
Not only is Smart Passive Income the title of the heading for this section, it is also the title of a very popular blog by Pat Flynn. Anybody who knows anything about the blogosphere knows about Pat Flynn. He stumbled into an online income stream by accident and is now making a killing with all of his different ventures. His most popular is the Smart Passive Income blog, where he teaches others how to do exactly what he is doing.

I had heard his name mentioned time and time again when I first got serious about blogging, but never really took the time to thoroughly read through his site. I recently stumbled upon his podcast though. If you know anything about me, you know that I drive a truck for a living. All of my drive time is a perfect opportunity for me to educate myself by listening to podcasts, audiobooks and talk radio. I found the Smart Passive Income Podcast last week, and I’ve already listened to the first 19 episodes. As of this writing, there are 37 episodes available. I plan to finish listening to each and every one by the middle of next week.

The information provided by Pat Flynn via his site and his podcast is incredibly valuable. His story and the stories of some of his guests are really encouraging and are inspiring me to get more serious about creating a passive income for myself.

My Not So Passive Minimal Blog Income
There are a lot of people who make a lot of money with their blogs. I am not one of them. Yet. I’ve been seriously working on this blog for 8 months now, and have yet to see a sizeable income. I am optimistic though, as I hear about the success of those who are able to stick it out for the long haul.

Whether or not blog income is passive is debatable. Pat Flynn’s opinion is that it is. At the same time though, he admits that running a blog is a ton of work. There are two ways to look at it. Passive income can be accomplished by income being generated by older blog posts. Yes, this part is passive. If people are finding your older blog posts via Google, or something like that, they still see your current ads in the sidebar. They might click on an affiliate link in an old post and make a purchase. These are two ways that passive income can be generated by a blog. I suppose if you abandoned the blog and just stopped publishing on it, but left it out there, this could be totally passive blog income.

In many cases though, blog income is more active. You need to be writing and publishing regularly. You need to constantly promote your blog and interact with others within your niche. You need to work with advertisers or affiliates in order to generate income via your blog. All of this is a lot of work and takes a lot of time. This would be considered and active income, but it could lead to some passive income.

Currently, my blog is active. There isn’t much passiveness about it. I’m fine with it not making very much income at this point, because I still consider myself new. I still look at it as kind of a hobby, and I enjoy it very much. At the same time though, I do want to make an income from it. Not just to be rewarded for all the time that I’ve put into it, but because I see and read about everybody else who is able to make money from their blogs. I want a little piece of that pie. You know what I mean? I like pie!

Other Passive Income Sources On My Radar
There is one type of passive income that I am actively working to create. That is the investment return income that is being created within my retirement accounts. All of this money is currently invested in good growth stock mutual funds. This is not typically something that is considered passive income. I don’t see why not though. It is there. It is making money, and I am doing nothing more than adding more money to the pot on a monthly basis. Even though I am actively working to be able to add that money to the pot, the money that is being created within is a passive form of income.

Owning rental real estate is something that I have always had a desire to do. I did own a duplex when I was in college. I rented out the upstairs and lived in the downstairs while attending school. I sold that property soon after dropping out of college because it was five hours away from my hometown. I did the long-distance landlord thing for a few months, and that is just not fun. I’ve always had in the back of my mind that I want to own and manage somewhere between 8 and 12 rental properties at some point in time. When I am able to accomplish this, the income from those properties should be more than enough to support me. Especially if I don’t have debt on any of the properties. I could get into all of the excuses for why I don’t currently own any rentals, but I won’t. Instead, just leave it as that is a long term goal of mine.

One other passive income source that currently hit my radar is by building niche websites. Being in the personal finance blogosphere, I’ve read about other bloggers who have dabbled in this arena. Pay Flynn talks quite a bit about his niche sites. I have some great ideas and am really interested in learning how to build a successful niche site. I am currently in the process of learning all the fine details of exactly how to do this the right way. It will just be a matter of time and finding enough of it to actually execute my plan.

Executing Ideas
That is just it. Executing. By executing, I don’t mean killing ideas. I mean actually implementing and carrying through. This is the challenge for most people. Everybody has great business, income or product ideas. Very few people actually follow through and do something with their ideas. I am no different than the masses. I find every excuse in the book to not carry through with my ideas and I remain stuck in my work, sleep, eat, poop life. It’s about time I find the motivation to move forward. It’s time to create the time I say I don’t have. It’s time to start creating a passive income in order to obtain financial freedom!

Readers: I would love to hear about your dreams, goals or aspirations to create a passive income. What have you done to do so, or what do you wish to do in the future?

Keeping Your Golden Eggs In One Sturdy Basket

noreply@blogger.com (Anonymous) — Mon, 23 Apr 2012 09:30:00 +0000

I am going to play the part of the contrarian in this post, even though I may not totally agree with what I am about to write. It has to do with diversification. Specifically, income diversification. We’ve all heard the saying, don’t put all of your eggs in the same basket. Typically, this is really good advice. It is especially good advice for investment holdings. But, when it comes to income, is this really realistic for the average person? Can anybody find the means and the time to gather several different income streams? Is this really the best way to insure financial freedom for the future? Maybe for some people, but maybe not for others. Personal finance is personal, and each individual must find what works best for them. Perhaps putting all of your eggs into one basket just might be the best thing for you.

Income Diversification by Multiple Baskets
I recently read a post by Amanda on her blog, Frugal Confessions, about this topic. She states that Keeping All Your Eggs In One Basket is Risky. In her case, this isn’t just an analogy. She actually grew up on a farm and her post talks about literally gathering eggs from the chicken coop and putting them into a basket.

I was reminded of this post when I more recently read another post by Sam over at Financial Samurai. This one is entitled, Achieving Financial Freedom One Income Slice At A Time. If you read much of Sam’s blog, he is always writing and dreaming about one day quitting his day job and living off of personal business, investment and even unemployment income. This post lays out in detail all of the income streams that he is working on. He writes about the importance of diversification and creating buffers for your income sources.

I agree with both of these posts and think they both offer sound financial advice. But, is this advice for everybody? Obviously, it can’t hurt to have multiple income streams. If a person is at a point in their life where they can work to achieve this, I say go for it. By all means, make as much money as possible in as many different ways as possible.

Focused Income With All Eggs In One Basket
And now here is the contrarian point of view. I can’t say that this idea is an original one of mine. I heard it mentioned on a podcast I listened to this week. I can’t remember which podcast, as I listened to a ton this week. In a nutshell, this is what the guy said...

I think it is okay to keep all of your eggs in one basket. As long as you own that basket and you are always keeping a close eye on it.

As soon as I heard that I immediately thought of both of the blog posts I linked to above. It then got me thinking that this might actually make sense. If you take the power of focused intensity and pour all of your energy into one income source, you could come out ahead. If you put less energy into several income sources, each one may not get the attention it needs to be successful and profitable.

This could especially hold true for a small business owner, which ties this into the analogy of owning the basket. When you own the basket, or the business, you have control of it. You keep your eye on it and you make decisions that affect the outcome. If you don’t have actual ownership, you may not take ownership. This could have a negative affect on the amount of income from that source. We’ve all heard advice from employers saying that you should treat the business as if it’s your own. Well, that’s a lot easier to do if it actually is your own.

The point is, if you own a business it will have a better chance of success if you give it 100%. This means putting all of your eggs into one basket. One basket that you own and one basket that you are constantly watching and controlling. Putting 100% effort into one business will likely be more beneficial than putting far less than 100% into each of several businesses.

A Personal Conclusion
Being that personal finance is personal, not every person has the desire to own a business. For that person, income diversification is probably the best route for the long term. This person should create future income from their main income by saving and investing. Income diversification within a married couple could simply mean that each spouse has an income. Income diversification during retirement could mean that some of it is through a government program like Social Security, some of it is from a pension and some could be private savings and investments.

A personal goal by many is to one day own their own business. Create their own income and be their own boss. Income diversification for this person is perfectly okay and probably even smart. It may be just as smart though for this person to not diversify. By focusing all of their time, energy, money and effort into one income source, they could strike gold. They might just find the goose that hatches golden eggs. If they do, why not get one sturdy basket and keep all of the golden eggs in that one basket. Own the basket and keep a close eye on it. Be the contrarian and go against conventional advice.

Readers: What do you think of this unconventional advice? Can you see the benefits of not diversifying and instead putting all of your attention and effort into one income stream?

Paying Children for Work and Knowledge

noreply@blogger.com (Anonymous) — Fri, 20 Apr 2012 12:04:00 +0000

Money is in an excellent motivator. Duh! If you don’t understand this, you don’t understand life. At some point in every persons life, they come to this realization. It usually occurs during childhood and is most likely brought on by their parents. When kids become a certain age and start to understand the importance of money, parents begin to use it as a motivator. Money can be used as positive or negative reinforcement. It can be given as a reward or held back as a punishment. Having been a kid myself, and now raising children of my own, I want to express some of my thoughts on this topic. I recently had a certain revelation and would like to share it for the benefit of anybody who reads this.

Paying Your Kids to Work
Work - get paid. Don’t work - don’t get paid. That is how it works. Pretty simple and straight forward, right? You would think so, but unfortunately not. Many parents give their kids an allowance. They allow them a certain amount of money on some sort of set schedule. Whether this allowed amount of money is tied to work or not varies for each individual situation.

I can tell you that I did not get an allowance when I was a kid and my kids will never get an allowance. The word itself just bothers me. Allowance. It sounds too much like an entitlement, which to me means welfare. By giving my kids an allowance, I would think that I would be sending them the wrong message. I will be happy to pay them commissions or wages, based on work or performance. But allowance? Not happening in my household!

Paying your kids to do actual work builds character, integrity and a strong work ethic. These are some of the most important characteristics to develop in order to be successful in life. Teaching your children that money comes from work helps intertwine these life lessons with the ability to obtain financial gain.

Paying Your Kids for Good Grades in School
Knowledge = more money. Ignorance = less money. This is the part that I talked about in the opening paragraph where I said that I recently had a revelation. Should parents pay their children for getting good grades? What kind of message does that send?

When I was a kid, I did not get paid for school performance. No, it was not because I didn’t get good grades. It just wasn’t something that my parents did. However, I did have friends and classmates whose parents paid them for good grades. Because I did not receive the same reward, I opposed this behavior. I thought it was ridiculous that they were getting paid to do something they were expected to do anyway.

In the real world, as it turns out, people actually do get paid for what they know. This is known as experience and education. People with more experience tend to get paid more than people with less experience. People with a college education typically get paid more than those without an education. More knowledge usually equals more money.

With that in mind, perhaps paying kids for good grades isn’t such a bad idea. This is the revelation I had. By paying your kids for getting good grades, you are teaching them that a gain in knowledge is tied to monetary gain. This life lesson can and should be just important as the one that shows that money comes from hard work. Knowledge and education lead to monetary increase.

A Blue or White Collar Conclusion
Money for work is more the blue collar way of thinking. Perhaps this is why I chose a blue collar career as a truck driver. The life lesson of getting paid for work was instilled in me at a young age. I was never rewarded monetarily for gaining knowledge. This could have had a psychological affect on me which may have played a part in my career choice.

Money for knowledge is more the white collar way of thinking. Due to my recent revelation, I will probably pay my kids for getting good grades. Not that long ago, I would have thought of this practice as being completely absurd. Now, it just makes sense.

I don’t have any idea what kind of career path my children will choose. I want to encourage them to do or be anything they want. I wouldn’t want to psychologically hinder one path or encourage another based on behavioral characteristics that I instilled in them. By paying my kids for both work and good grades, I hope to instill both life lessons within them. My hope is that they will have belief in themselves and confidence to do whatever they want. Their options will be unlimited when it comes to choosing a career.

Readers: Were you paid, as a kid, for work or knowledge? How do you think it has affected your life? If you have kids, do you or will you pay them for work, knowledge, both or neither? I would love to hear your thoughts!

The Massive Advantage of the Roth IRA Over the 401k

noreply@blogger.com (Anonymous) — Tue, 17 Apr 2012 11:16:00 +0000

As many of you know, there was a movement a few weeks ago started by Jeff Rose from Good Financial Cents where nearly 150 bloggers took part in The Roth IRA Movement. Nearly all of them wrote posts for their own respective blogs on the benefits and advantages of investing within a Roth IRA. One post really stood out to me though, because this particular blogger actually opposes the Roth IRA. Sam’s post over at Financial Samurai discusses what he believes are the Disadvantages of the Roth IRA. To my surprise, many of the comments on his post even agree with him. Many of those commenters are all over the map with their complicated calculations and future income and tax presumptions. The purpose of this post will be to lay out some simple math to show you exactly why the Roth IRA absolutely makes sense.

To illustrate my point, I will make up a hypothetical situation. (Haven’t done one of these in awhile) As with all hypotheticals, assumptions will have to be made. In order to keep it as simple as possible, we are going to ignore inflation. Pretend that inflation simply no longer exists. (Wouldn’t that be nice?) Also, we will assume that the people in my example are American and are taxed at ordinary U.S. tax rates. Furthermore, we have to assume that tax laws and rates will stay the same for the duration of time as laid out in this hypothetical example. Also, (for simple sake) we are going to ignore any other tax deductions that could have an affect on adjusted gross income. Here goes...

The Story

Samantha and Madison both become flight attendants for the same major airline. At age 25 they have very similar life situations. Both are married and plan to work until retirement. Both are aware of the state of Social Security in the U.S. and know the importance of saving their own funds for retirement.

They both understand mutual fund investing and the power of compound interest. They are good friends and they talk about this stuff on occasion. They decide to invest in the exact same funds. Their only difference in opinion is in which investment vehicle to invest through. Samantha refuses to pay the government taxes up front in order to invest in a Roth IRA, so she sticks with the company 401k plan. Madison prefers to take advantage of the tax free growth within a Roth IRA, so she pays her taxes up front and does just that. Here is a basic look at their numbers on a yearly basis:

	Samantha	Madison
Annual Income	$50,000	$50,000
401k Contribution	$5,000	0
Adjusted Gross Income	$45,000	$50,000
Annual Taxes Paid	$6,750	$7,500
Roth IRA Contribution	0	$5,000

Some Numbers
This example assumes a current and future tax rate of 15%. As you can see on the yearly numbers, Samantha pays $750 less in taxes each year than does Madison. They both put exactly $5,000 into their investment accounts. Madison simply has $750 less to put into her household budget. This works out to $62.50 per month or $14.42 per week.

The Story Continues
Samantha and Madison continued to work together for the same airline for their entire careers. They monitored and compared their retirement savings from time to time over the years. Just as planned, their balances were pretty much dead even. Samantha loved to brag about the wonderful tax savings she was taking advantage of by investing through her 401k. Madison would just smile and think to herself how she would be bragging later.

By age 65, 40 years later, Samantha and Madison are quite pleased with their results. They were able to yield average annual investment returns of 10%! They decide to retire. Their life situations are still very similar. Both have their home mortgages paid off and both of their kids have already completed college. $50,000 per year is more than enough for them to live off, but they want to live it up during retirement. They both agree that $50,000 per year is what they will need to cover their planned living and travel expenses.

Samantha understands that she now has to pay taxes on the money she withdraws. But, who cares! Look at her balance! Samantha needs to withdraw $58,823 to come out with $50,000 after paying 15% in taxes. Madison already paid her taxes before the money was put into investments. Her entire balance, including all of the growth, is sitting there tax free! She only needs to withdraw $50,000 per year. Here is a look at their numbers after 40 years:

Samantha
Madison
Total Taxes Paid
$270,000
$300,000
401k Balance
$2,657,000
0
Roth IRA Balance
0
$2,657,000
Annual Withdrawal
$58,823
$50,000
Annual Taxes Paid
$8,823
0

Commentary
Over their 40 year working lifetime, Madison paid $30,000 more in upfront taxes. Divide that by the $8,823 that Samantha now needs to pay in taxes annually, and you get approximately 3.4 years that it will take for Madison to break even with her friend. From that point forward, Madison will come out ahead. She will be making tax free withdrawals while her friend Samantha will be paying taxes for the rest of her life.

The End of The Story

20 years into retirement, at the ripe old age of 85, a twist of irony takes the life of both Samantha and Madison as they die together in a plane crash. Before takeoff, they were sitting in first class reminiscing about their days as flight attendants. They couldn’t help but make fun of, while at the same time admire, the costumes that the Singapore Airlines flight attendants were wearing. More importantly, they got to talking about their retirement funding. They got out a calculator and did some simple calculations.

Samantha multiplied her yearly withdrawal amount, $58,823 by 20, to find out that she has taken out $1,176,460. After she paid her 15% tax bill, she has spent a cool $1 million in retirement. Madison has spent the same cool $1 million, but she hasn’t paid any taxes on her retirement income.

Suddenly a light bulb goes on in Samantha’s head. Looking at the numbers, she finally sees the light. She has now paid more than $176,000 in taxes during retirement, when she saved only $30,000 up front by taking the tax deferred savings. She decides to do another quick calculation. Recalling that her total retirement contributions were $200,000 and they grew to $2,657,000, she now takes 15% of the total amount just out of curiosity. If she were to withdraw her entire retirement savings in one lump sum, she would have to pay nearly $400,000 in taxes. Meanwhile, Madison get to keep her entire balance completely tax free.

Samantha never thought that the power of compound interest would have such a great affect on her 401k balance. After seeing for herself that the bulk of her balance was from growth over time, she finally understood the tax advantages of a Roth IRA. All of the growth is completely tax free within a Roth IRA. Madison sits next to her friend on the plane and quietly thinks to herself, I told ya so! Samantha flicks herself on the forehead, curses, then vows to start a blog as soon as they get home from this trip. She plans to blog about the power of compound interest combined with the tax advantages of the Roth IRA. She wants as few people as possible to make the same mistake that she did. Too bad she is about to die in a fiery plane crash.

Fortunately, I was able to get inside Samantha’s head before she died (because I made her up). I was able to tell her story for her, because I have the foresight.

I would like to add that investment rate of return doesn’t really matter that much in this example, as far as taxes are concerned. Even if they only earned 7% on their investments, they still would have ended up with balances over $1 million. Their withdrawal amounts would be the same and the tax implications would be the same. There would just be less growth.

Conclusion
There are three situations that I can think of where it may not make sense to pay taxes up front in order to invest in a Roth IRA.
You are going to die early and not be able to take advantage of the tax-free growth.
Your investments suck and you earn crappy returns that don’t even keep up with inflation.
Tax laws change

None of these three reasons can be accurately predicted. The one you have the most control over is your investments. Do your due diligence, learn about investments and choose wisely. Tax laws are what they are. Nobody knows how or if they are going to change in the future. The only way we can plan is to go by what current laws are. And death. Everybody knows that they are going to die, but nobody knows when. For this reason, we can only plan according to life expectancy averages. Most people, on average, are going to live well into their 80’s.

My advice is obvious. Invest in a Roth IRA. Try to choose the best possible investments within your Roth IRA in order to maximize the power of compound interest. Make healthy lifestyle choices that will help to ensure that you live long enough to enjoy your savings. Vote for politicians who aren’t going to screw up this wonderful tax advantage.

For those of you who aren’t going to invest in a Roth IRA, my advice is exactly the opposite. Choose crappy investments in order to minimize what would have been massive tax savings. Vote for politicians who will screw up the tax advantages of the Roth IRA. And lastly, make unhealthy lifestyle choices such as smoking cigarettes, to help ensure that you won’t live long into your golden years.

Did this story help shed some light for you on the tax advantages of the Roth IRA? Do you agree or disagree with my assumptions or calculations?

Rambling Road: Trucking to Traverse City

noreply@blogger.com (Anonymous) — Sat, 14 Apr 2012 14:18:00 +0000

Sunset on Grand Traverse Bay

Since it is officially official, and I made it through my first entire week, I am ready to reveal the details on the recent change at my day job. This is relevant to this blog only in the fact that it does have some affect on it. I have a new route! I now drive to beautiful Traverse City, MI everyday. From my home terminal, it is a mere two and a half hour drive (minimum) to my first stop each day. In the week and a half that I’ve been on this route, I’ve been averaging about 10 or 11 stops per day. With the added drive time, my work days have been about 11 hours each day. I couldn’t be happier, as I thoroughly enjoy the peaceful drive up and down US-131. It doesn’t hurt either that the Traverse City area is one of the most beautiful in Michigan’s lower peninsula.

How the Route Change Affects this Blog
My former route was to Kalamazoo, MI, which is only about an hour south of Grand Rapids (where my home terminal is located). An hour drive is basically a hop, skip and a jump for a truck driver. I could do that route all week long on only 5 to 6 hours of sleep each night. I had made it a habit to get up at 5:30 every morning to work on the blog, even though my start time at work was 10:30. All of that work paid off, as the blog has progressed to my satisfaction. I pretty much have a system down now, and I’ve been able to push out some pretty decent content.

With the route change, I am no longer comfortable with letting myself be a little bit tired during the day. Driving an 18-wheeler for two and a half hour stretches while struggling to keep your eyes open is not fun. It’s also a little bit dangerous. My new start time is 9:30, and I’ve been letting myself sleep in until 6:30. You do the math... I have almost 2 hours less each day during the week to do blog stuff.

I’ve been trying to prioritize and focus on doing the things I need to do to run this blog before I spend time visiting other blogs. If this blog ever starts to make some decent money, I will definitely look into hiring a virtual assistant to do some of the tedious time consuming tasks. For now though, I am still going it alone. I am going to make a serious effort to allocate more of my weekend time to writing. In a perfect world, I will have my two or three posts for the week done and scheduled before Monday morning. This way, my time during the week can be spent promoting, replying to comments, and visiting other blogs.

Podcasting Down Rambling Road
An added bonus to my added drive time each day is all of the added time I now have to listen to podcasts! Except for when the Detroit Tigers are playing a day game, all I’ve listened to between Grand Rapids and Traverse City have been podcasts.

Average Joe and the Other Guy are really getting into a groove with their podcast, The Worst of The Free Financial Advisor. Episode 4 was entertaining as the roundtable had a bit of a disagreement around the topic of debt. PK, from DQYDJ.net, somehow finagled himself into having his own segment on the show! It is quickly becoming my favorite. Check out episode 4 for the top 5 stupidest ways to spend your income tax refund.

I recently blew through some iTunes and Amazon gift cards by purchasing books. I bought two audio books from iTunes and two Kindle books from Amazon. Of the four books, three of them were by Andy Andrews. I recently finished reading his most recent release, How Do You Kill 11 Million People? via Kindle. It is a very short read (only about 20 minutes) and highly recommended by me. The reason I am mentioning this here is because I stumbled upon Andy Andrews podcast, In The Loop, while I was shopping in iTunes. I am certain that after you read one of his books, you will want to purchase the rest. His podcast is a perfect compliment to his books, as he gives you some behind-the-scenes information into his life and his writing.

The BlogCastFM podcast is still one of my favorites, and I still listen to at least one episode every day. A lot to catch up on with more than 2 years worth of valuable content in their archives.

I found another blogging and niche site related podcast called Adsense Flippers. I’ve listened to a few episodes so far and really like what I am hearing. Add them to my rotation!

Rambling Road: 2 Weeks Ending 04.14.12
Even with my limited time to read and comment on other blogs, I have managed to browse through a few. I try to quickly scan through some of the posts in my RSS reader when I have any down time at work (waiting to get loaded or unloaded). Side note to fellow bloggers: Sorry if I didn’t leave a comment on one of your posts. It is challenging, time-consuming and annoying to do on a phone. I also occasionally check The Twitter to see if people are talking about any good posts that I need to read. Here are some of my favorites from the past two weeks:
2 dumb excuses for not having a Roth IRA | Step Away From the Mall
Put Your Financial House in Order like Company’s Coming Over | Frugal Confessions
Canada Gets Rid of the Penny; Should the U.S. Follow Suit? | Stupid Cents
Allowances and Overprotective Parents: Our Cuppa Joe Thursday Discussion | The Free Financial Advisor
Don't Quit Your Day Job… » The Three Account Method of Automating Your Funds
Financial Uproar » Why Don’t More People Get A Metal Roof?
When it Comes to Money, One Size Does Not Fit All | So Over Debt
Early Retirement Extreme - Married (with Debt)

Carnivals and Mentions
Carnival of Wealth, Themeless Edition | Control Your Cash: Making Money Make Sense
Totally Money Blog Carnival #62 – Easter Edition | StupidCents
Self Directed Investing for Retirement Carnival - Easter Edition | AAAMP Blog
Sunday Morning Dump: Sports = Awesome | Financial Uproar
Weekly Roundup & Mentions #5 – Road to 1 Percent | I Am 1 Percent

Penny Thots
Last, but not least, I need to tell you about a brand new site. JT, who runs Cash Flow Mantra and Grand Per Month has started another multi-contributor site! I was lucky enough to be chosen as one of the contributors. Go check out Penny Thots and my first publication on the site, What if Stocks Were Sold at a Gas Pump? I wrote this post several weeks in advance. Ironically, the day it got published the stock market dropped like a rock, with the Dow falling over 200 points.

This site is going to be epic and I am really looking forward to watching, and being a part of, its development and success. Go check it out. There have already been several great posts!

Have a great weekend everybody. I hope we run into each other again on Rambling Road!

	Samantha	Madison
Total Taxes Paid	$270,000	$300,000
401k Balance	$2,657,000	0
Roth IRA Balance	0	$2,657,000
Annual Withdrawal	$58,823	$50,000
Annual Taxes Paid	$8,823	0