What makes a Bubble

You’ve probably heard the terms “tech bubble” and “housing bubble” tossed about. But do you know what really makes a bubble? Bubbles form when an investment enjoys outsized returns. As a result, investors flock to the investment, driving prices higher. The higher prices attract even more investors, and the price keeps going up. But at some point, the price exceeds a reasonable amount for the return that the investment provides. Investors realize that their investment wasn’t worth it, and start trying to unload the product. As a result, prices fall – often quickly – and the bubble bursts. Those who haven’t managed to unload the investment miss out on the gains they could have had if they had sold sooner. And when bubbles burst quickly, as they often do, investors usually lose some or all of their initial investment as well.

Why Munis could be Next

There are two ways to make money on municipal bonds: by receiving interest payments at regular intervals and then receiving your principal back at maturity, or by selling the bonds for a profit before maturity. With unemployment high and consumer spending still struggling in the wake of the recession, states and municipalities are dealing with lower tax revenue. A few bond issuers have failed to pay bondholders when the bonds mature. Investors who hold munis to maturity lose their initial investment when this happens.
The more common way that munis (or really all bonds) lead to a loss for investors is when interest rates and inflation rise, thus pushing bond prices down. When this happens, it is nearly impossible for investors to sell their bonds at a profit.

Municipal bond demand has remained high, even as returns have begun to stabilize. If the weak economic recovery continues, there might be more defaults on municipal bonds. If the economy stabilizes more rapidly, inflation and interest rates will increase. In either case, municipal bond prices will suffer – and with them, your investment returns could take a tumble.

What you can Do

Just like stocks, go with what you know and diversify. The best way to purchase municipal bonds is through a municipal bond fund. This way you are exposed to bonds from a variety of municipalities, and if one goes sour you won’t lose all your money. You can trust fund managers to get in and out of short and long term bonds as the interest rate and inflation environments change. If you absolutely can’t afford to lose any part of your money or don’t understand how the investment works, keep your money in CDs or Money Market accounts instead.

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A recent post on Frugal Dad, Do Your Kids Have Too Many Toys? reminded me of a frequent topic on the parenting forums I used to administrate: how to deal with your extended family and the gifts (or lack of) that they showered on your kids.

Many of us who limit the amount of toys our children own aren’t solely motivated by the desire to save money. Toys are expensive but the real goal is to raise children who aren’t focused on material things, who take care and pride in what they do have and who value quality over quantity. It can be frustrating when well meaning relatives ignore our desires and give our children mountains of flashy toys that don’t fit into the lessons we are trying to teach.

Even trickier is when one child or children in the family are favored above the rest and you are left trying to deal with questions about why Suzy got more or why Timmy gets less. What’s more, whatever the issue is surrounding gifts in your family, chances are good that it’s complicated by feelings from the past and current power struggles.

If you’re experiencing conflict over extended families and gifts, here are a few points to keep in mind to help resolve the problems in the best possible way for all involved.

Sometimes it’s best to just let it go

If the problem is just that your family members are giving your child too many gifts or aren’t buying the kinds of gifts you prefer (for example loud, plastic toys over simple, wooden ones) it might just be better to let the matter drop and choose to feel grateful that your child has so many people that love them. This is not to say that it’s not annoying that your wishes are being annoyed, just that it’s not worth the time to feel angry over something that is not that big of a deal in the long run.

You can always put away some or most of the toys and bring them out for rainy days so that they are not cluttering your house. Don’t worry about your child become spoiled because they get too many birthday or Christmas presents, as long as you are giving them a good example every day of a frugal, sustainable lifestyle they’ll get the message.

Be Proactive in Offering Gift Suggestions

Nobody wants to been seen as greedy or a gift-grubber, but sometimes it’s best to be direct about asking for what you want on behalf of your kids. You can’t control what other people do, but if you give helpful suggestions with solid reasons why you think it’s a good idea, there is a chance that they might do what you want.

Don’t be offended if they balk at the idea or insist their idea is better. After all, you think your ideas are better, too! Sometimes people need to feel like their point of view has been acknowledged and respected before they concede so don’t turn it into a power struggle. Instead respond with grace and tact and you might find that they change their mind and do as you suggest after all.

Try Not to Focus on the Past

Often dealing with these kinds of gifting issues can be surprisingly painful. Seeing your own child showered with gifts by grandparents that never visit can remind you of how you wished your own parents would spend more time with you. Or, if you were the odd child out, seeing your sibling’s children get more gifts and attention than your own can bring up feelings of rage and resentment that you thought had been buried years ago.

Your feelings are valid, but it’s important to remember that you are an adult now and your children don’t deserve to be saddled with your baggage. Do go to your spouse and friends for a supportive ear but be careful of what you say in your children’s earshot. Keep all discussions focused on the here and now rather than using it as an opportunity to bring up hurts from the past.

When to Speak Up

While sometimes it’s better to just say nothing and chalk things up to family weirdness, sometimes speaking up is necessary.

• When relatives are constantly giving your child things that are not age appropriate or go completely opposite your values or give items that present serious safety issues. Scale your response to the seriousness of the offense – giving an infant preschool toys might only require a gentle reminder to check the ages on the package while constantly giving your children who are being raised Jewish Christian themed items is a good call for a firm discussion on boundaries.

• If the discrepancy between gifts that the grandchildren receive is large and noticeable to all concerned, it’s important to take action so that relationships between family members are not permanently damaged. It might become necessary to avoid family gatherings to protect your children’s feelings. Ideally, these discussions should take place between the blood relations to avoid adding tension to relationships between in-laws.

• If family members are involved in the everyday care of your child and you feel that bad habits are being established. There is a large difference between getting spoiled rotten a few weekends out of the year and every day over-indulgence. Remember to show your appreciation for all the love your family member has for your children and be ready with suggestions of things that they can do to bond with your children that won’t cause issues with materialism or entitlement down the line.

Other Suggestions:

• Ask family members to buy things that provide value all year long, such as a zoo or museum membership rather than buying more toys. Point out all of the educational and social opportunities that this will give your child to make it extra attractive and promise lots of pictures.

• Suggest that family members draw names or buy family gifts for major holidays rather than buying for each person. Family members might see this as a welcome relief from the stress and expense of buying for so many people.

• Let grandparents and Aunts and Uncles know that your child would treasure some one on one time with them more than a gift on their birthday. A lunch date and the movies would be a treat for both.

• It’s fine to ask for a gift receipt if your child is truly not able to use the toy because it’s age inappropriate or unsafe.

• Make sure that you give your child great lessons about money, consumer culture and the value of spending time together as a family on a daily basis. No matter what, you are your child’s best and most influential teacher.

Your turn

Have gifts to children caused any conflict in your family? How have you dealt with it? Did it work as planned?

Post by Frugal Dad

“When you ain’t got nuthin’, you got nuthin’ to lose.” ` Bob Dylan

At least, that’s what I think he said.

The Great Recession has proven that almost everyone has something to lose, even if that something is as personal as self confidence. It’s easy to sit back and opine about the heady days of 2007, when credit was generous and houses never went down in value, when unemployment was just north of four percent and taxes were low. And while some tout the last three months as the “Summer of Recovery,” our unemployed neighbors who are losing their homes would beg to differ. So would those who’s retirement portfolios have dropped over 40 percent. So would those of us re-examining our household budget.

Given that hindsight is always 20/20, we can look back and see where bubbles were and venture guesses why they grew in the first place. We can also look back and advise others about what to do and what not to do in a recession. The truth be told, the following 10 items should probably be avoided even in the best of times, but certainly in a downturn like we’re currently experiencing.

10 Things You Should Never Do In A Recession

1. DON’T take your job for granted

With real unemployment hovering above 16 percent (that’s one in SIX people), having a job right now is a blessing – even if you don’t particularly care for it. If your job is putting food on the table, allowing your to keep up with your mortgage and other financial obligations, be thankful and give it your all. Hundreds of thousands of unemployed folks would love to trade places with you.

2. DON’T take on additional consumer debt

In a recession, you should avoid consumer debt like the plague. Student loans? Maybe. Business loans? Possibly. Mortgage loans. Probably. Consumer debt and loans? Absolutely not.

3. DON’T co-sign a loan

In a depressed economy, co-signing a loan for someone is a recipe for eventual disaster. The reason someone needs a co-signer is that the lending institution believes that they won’t pay. If they don’t, the loan falls on your shoulders. Are you prepared for that?

4. DON’T get an adjustable rate mortgage

With the uncertainty surrounding everything from health care insurance premiums to how much your taxes will go up, getting an ARM loan isn’t very smart. An ARM puts the uncertainty on your back rather than the banks. Besides, with 30 year fixed rate mortgages at historic lows, it makes no sense to NOT lock in a historically low rate.

5. DON’T live beyond your means

Living within your means is THE mark of maturity. Learning to say no to today’s current desires with an eye on the future means evaluating what you think you want today with what you know you’ll really want in the future.

6. DON’T plunge into risky investments

I know all the investment gurus are fond of quoting Warren Buffett’s line – “ Be greedy when others are fearful and fearful when others are greedy” – but you and I don’t have the means to do the research he does, nor do we have the time and experience to invest like him. Go back and re-read How A Second Grader Beats Wall Street, simplify your investments and sleep better at night.

7. DON’T ignore your emergency fund

That emergency fund could very well be your lifeline should something happen with your job. Don’t ignore its importance and use the excess money from living below your means to fatten it up to about six or more months of living expenses.

8. DON’T have a single income source

In a recession, knowing how to make extra money can be the difference between thriving and barely surviving. Just a few hundred dollars extra per month can help you jettison debt, buy some groceries, meet your mortgage payment, or pay your medical bills.

9. DON’T buy a new car

If you need one, a used car is okay, but carefully evaluate your needs and do your best to remove the emotion from it. If your life was a business and you were the new CEO, would you authorize a new car? If you already jumped on a new car and you’re looking to get out of your lease, check out How To Get Out Of A Car Lease.

10. DON’T lapse your insurance

I’ve seen too many people get skewered by lapsing their insurance. It seems like some unforeseen conspiracy, but lapsing an insurance policy appears to be a sure way to guarantee a loss. Mostly I’ve seen this on car insurance, but health insurance as well as life insurance can also come into play.

What other things should someone NEVER do in a recession?

Photo by taberandrew

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OptionsXpress is a brokerage with an all-in-one trading platform that allows you to trade bonds, mutual funds, ETFs, options, futures and stocks ALL in one convenient online trading account.

Part of their company mission is to be the “ideal broker for options traders looking to maximize their returns.” Here is a closer look at what optionsXpress offers.

optionsXpress Fees

• Stocks: $9.95/trade ($0.01/share over 1,000)
• Futures: As low as $2.99/contract
• Options: $15 for 10 Contracts; $30 for 20 Contracts
• No Hidden Fees: OptionsXpress doesn’t require a minimum balance and doesn’t charge fees for periods of inactivity, volume or quantity of activity, or standard withdrawals or deposits. Check out their No Hidden Fee Policy.

optionsXpress Additional Trading Fees

One of the features of optionsXpress is the ability to consolidate all of your trading needs in one account. The trading fees for ETFs, mutual funds, and bonds are as follows:

• ETFs: $9.95/trade
• Mutual Funds: $9.95/trade
• Bonds: $9.95/trade

optionsXpress Details

Online Trading Tools. OptionsXpress offers traders a breadth of online trading tools to help customers with their investing strategies.

Virtual Trading. Among the many tools OptionsXpress offers, one of the coolest seems to be their Virtual Trading which allows you to develop your knowledge of investments in a real online trading environment before you actually jump in.

High Ratings. Forbes, Barrons and SmartMoney have all given OptionsXpress good reviews.

optionsXpress Overall

OptionsXpress offers a great array of tools for investors. If you’re trying to teach yourself more sophisticated strategies or are a bit naive when it comes to investing, the tools on their site alone could be of great help.

Some of the information on options and futures may overwhelm investors with a simpler strategy but optionsXpress recognizes this and their interface is easy to navigate for a variety of investing vehicles.

One of the nice features is the free broker-assisted trading, phone or online assistance. Other brokers often charge a higher fee when you need to get assistance with your trade, which is a comfort to traders who might need a little hand holding at first.

optionsXpress Sign Up Offers

Account Transfers. OptionsXpress will reimburse you any account transfer fees your other broker charges you up to $100. To get your $100:

1. Complete a full account transfer of $2,000 or more.
2. Fax optionXpress at (312) 629-5256 with a statement showing your charges.
3. Get your credit deposited to your account within 30 days.

$100 Sign Up Bonus. Don’t forget the free money OptionsXpress $100 Sign Up Bonus offer. To get the $100:

1. Open and fund an OptionsXpress account with $500 by December 31, 2011.
2. Execute three trades within 12 months of opening the account.
3. $100 will be deposited into your new account within one month.

If you’ve been on the fence about opening an account, now is a great time to check them out with the sign up bonus! Madison is planning on opening an account this week to take advantage of the $100 sign up bonus, and dig deeper into the trading tools.

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For the past two weeks I have gotten back into my coupon routine with a little help from some blogging friends. I see this as a true gift and a way that I can get more for less with my family’s budget. I will surely be focusing more on this in the near future, so look forward to SAVING! I know as busy moms, it is always a desire for us to save more money, but often times it gets complicated, seems like it takes too much time and just overwhelms an already busy schedule. But I would like you all to think again and look at it in terms of money saved – which is really then money earned. Make sense?

So since last Wednesday I’ve been using coupons and catalina’s (they are the coupons that are spit out after you have completed a grocery store transaction, you know those coupons perhaps you don’t pay attention to?) to get FREE kraft cheese and FREE Cool Whip at Albertson’s. Kraft has a great coupon that you can print out and receive $5 off 5 Kraft items. The best part is when you purchase 5 Kraft items it spits out a catalina to save $5 on your next purchase, making your current purchase virtually $0.00. I have received 25 bags of Kraft cheese for FREE, plus 5 containers of Cool Whip with another sale. Now, this is certainly worth my time – and it is not that hard!

I follow a few really great blogs that send me updates daily on current specials and actually give you the links for coupons too! It is virtually a no-brainer. Here are a few of the sites I follow:

Frugal Living NW – you can sign up for updates to be delivered to your inbox and never miss a sale!

Coupon Cravings – great updates and you can also sign up to have updates delivered to your inbox.

A Thrifty Mom – another great site that passes on deal and savings on all kinds of stuff.

You can also print coupons from a link on my moms resources page, which makes cutting coupons a thing of the past too!

So if coupon shopping sounds too complicated, stay tuned – it is not that hard and actually is considered a sport in some parts of the country! I cannot tell you how excited I get when I have out-smarted the system and the checker looks at me in sheer disbelief – ahhhh……another great day at the office for me, making more money for my family!

What goals have you accomplished this year?

This is a wake up call.  The year is two-thirds over already.  It is hard to believe, but it is true.

Are there important targets that you have yet to hit?  If so, then it is time to get busy finishing up your goals.

What resolutions did you commit to at the beginning of the year?  Do you remember?  I’m not here to create guilt, but I do want to motivate.

The year is not over yet.  There is still time to dig out those dusty resolutions and goals that you were so passionate about just a few short months ago.  Why not review them now and make one last surge toward the finish line?

It Is Easy to Let Goals Be Forgotten

There are many ways of going forward, but only one way of standing still.
~ Franklin D. Roosevelt

Goals slip into the abyss very easily.  They slither away from us and wind up totally forgotten if we aren’t vigilant in pursuing them.

It happens to almost all of us from time-to-time.  I’ll admit that this wake-up call is as much for me as it is for you.  Someone else rang the alarm bell for me this past weekend reminding me that the year was two-thirds over. 

As a result, I stopped for a moment to think, “What are my goals for this year?”

It is always good to review your goals for the year at least monthly to make sure you are still on track and to be certain you remain mindful of what is most important to you.

Standing still is lethal in today’s world.  It makes life stale, boring and it puts you in danger of losing your job, health and prosperity.  You’ve got to keep growing to stay alive.

Get Moving Toward Your Goals

People generally fall into one of three categories when it comes to achieving goals.  Let me address each category individually with some advice for those that need it.

Here are the three categories of people relative to goals:

1.  Goal Achievers

There are those people, albeit a small few, that set goals, stay focused on them and accomplish what they’ve set forth to do.  I call these people, not surprisingly, the Goal Achievers.  If you are in this group, then I’d like to congratulate you for your discipline, perseverance and, oh yeah, your tremendous success!

This is the group we should all strive to join.  They are the truly wealthy not the ones just pretending to be rich.  They have the best jobs, nicest families and go on the most exciting adventures.  How is it that they have all the things others desire?  Because they set meaningful goals for themselves that focused their efforts.  They then worked diligently to achieve their goals.  Hopefully, you are already a member of this group, but if not, please read on.

2.  Goal Neglectors

The second group is what I call the Goal Neglectors.  This is probably where the majority of people fall.  You might even be one of them.  The Neglectors at least occasionally set goals or verbalize resolutions, but their attention and resolve soon fades.  Within a short timeframe they generally completely forget whatever it was that they wanted to do.  It could have been losing weight, paying off debt, starting to exercise or increasing their education.  Whatever it was, it is soon completely neglected and mostly forgotten.

If this is where you find yourself two-thirds of the way through the year, then don’t despair.  Feeling guilty and beating yourself up won’t accomplish anything.  Instead, I recommend following my 5 Steps for Rejuvenating Your Goals and Resolutions.  I wrote this earlier in the year, but if you missed it and find that you are neglecting your goals or resolutions, then it should help you get refocused and headed toward being a Goal Achiever.

3.  Goal Lackers

Okay, the final category is the Goal Lackers.  As you might have guessed, these are the folks that don’t really have any goals or direction set for their lives.  They are floundering in a sea of aimlessness wondering, “Why does opportunity seem to always pass me by?”  They often believe they are the unluckiest souls on Earth.  Of course, what they fail to realize is what Thomas Jefferson put so eloquently, “I’m a great believer in luck, and I find the harder I work, the more I have of it.”  Setting goals and working hard to achieve them is the best way to improve your circumstances.

I doubt many of the Lackers are reading this, but just in case you are one and want some help or maybe you know one that you want to pass this along to, I’ll offer some advice on getting started with goal setting and personal improvement.  In fact, I’ll give Goal Lackers a framework to follow to develop meaningful, personal goals.  These Five Steps to Self Improvement work every time.  How do I know?  Because I’ve used them myself to develop goals and achieve greater success.

Wake Up and Achieve Your Goals

If you want to live a happy life, tie it to a goal, not to people or things.
~ Albert Einstein

Goals are extremely important to living a happy, fulfilling life.  However, we often fall asleep to our goals.  We doze off and forget them.  With the year two-thirds of the way over, an alarm is going off.  It is time to wake up, jump up and get going!  If I could reach out and gently shake you right now to bring you back to reality, believe me I would do it.  Please let this serve as your wake-up call.  A great life is out there.  All you have to do is go get it.

Photo by koka_sexton

Related posts:

• New Year’s Resolutions: Seeking Good Advice and Ideas
• 5 Steps to Rejuvenate Your New Year’s Resolutions
• How To Keep Mindful And Committed To Goals And Resolutions

It’s easy to feel ripped off when it comes to car insurance. Different rates in different states just doesn’t seem like a credible business model to most consumers, but each state has its own laws and its own insurance commission. Still, the variation is HUGE — from over $2,500 per year to a low of $900 per year. What isn’t easily seen in the table below is the variation that can occur between companies within the same state.

The fact is, each company has its own actuaries and statisticians and though state insurance commissions set maximums on what insurers can charge, markets are still allowed (for now) to determine how low the companies can go before they cry “Uncle!” It’s up to you and me to make certain we’re getting the lowest rate from the best insurance company we can find.

Where does your state rank?

Annual Car Insurance Rates by State

After you see what your neighbors are paying, make sure you’re getting your best insurance rate by getting a free quote from reputable companies like:

• Insureme.com
• NetQuote.com
• Esurance
• AARP Insurance (The Hartford)
• Allstate

Links to products or services may be affiliate links. See my disclosure policy in the footer of the site or on my About page.

I spent the latter part of last week in bed with a nasty virus. Because I was so wiped out, the only thing I felt like doing was lounging and watching old movies. In between Godfather DVDs I caught an episode of My First Place on HGTV. I’m fairly confident I have seen this show before, but as I was reaching for the remote control, a comment from the young couple being featured caught my attention.

“Our budget is $475,000 to $490,000.”

Huh? These young people barely looked old enough to buy an adult beverage, and they were considering a half-million dollar home? They had my attention.

For the next thirty minutes or so I watched these young people roam from house to house with their real estate agent. I was extremely impressed with their thoughtful considerations of each house. You know, like which one had enough room in the backyard so their two dogs could play without feeling “claustrophobic,” and which house would be best for “entertaining.” After all, these are important considerations when just starting out. End sarcasm.

It was at this point that I began to regain my strength. I think it was adrenaline actually, as I had the overwhelming urge to reach through the television and smack some sense into these people.

Admittedly, I know very little about this couple, other than one is an “account executive” and the other is in medical sales. However, I think it is safe to assume that unless they inherited a couple hundred thousand dollars, they planned to borrow most of their first purchase.

$3,000 a Month for Thirty Years

Let’s run some numbers working with our assumptions. I think the couple settled on a house listed for $490,000 and paid about $475,000 (I don’t remember the exactly sale amount). I’d like to think they saved up at least 10% to put down, which is a fairly large amount of money for this size house. Perhaps they did have $50,000 to put down, and financed the remaining $425,000 on a 30-year mortgage.

Their monthly payments would be around $2,281 before taxes and insurance, which could easily add another $800-$1,000 a month, bringing their total monthly mortgage payment to over $3,000. Let that sink in for a moment.

This 27 year-old couple was about to sign a binding contract promising to make 360 payments at $3,000 a month for the next 30 years. They would be 57 years-old by the time they paid off the mortgage.

During those thirty years they would likely have children, and have to continue working like maniacs to make that $3,000 a month payment. They would need to save for retirement, pay for the annual vacation (or two), buy, maintain and replace seven or eight cars between them, deal with a medical emergency, deal with a medical emergency with their parents, deal with a job loss, etc. They would have to deal with all of life’s curve balls with a $3,000 a month obligation hanging over them.

“But We Can Afford the Payments”

When I watch people engage in this type of transaction, I can’t help but be a little sad for them. And my feelings aren’t limited to those taking out a huge mortgage – even though these are usually the longest of financial commitments. Many people borrow money for expensive cars and such which obligate them to costly monthly payments for a number of years because they can “afford the payments.”

Hearing the statement, “we can afford the payment” is a sure-fire sign someone can’t afford the payments. Marketers have won the battle of convincing us that we can afford things we can’t if we only have to pay for it every thirty days, rather than all at once. But what happens when you hit a bump in the road? What happens when life happens? Because trust me, it will.

Someone will get sick. Someone will get hurt. Someone will lose a job. Someone will get stuck in a soul-sucking job and dread Monday mornings like a trip to the dentist. Life is not always rosy. Things happen. I’m not being a pessimist, I’m being a realist.

It’s hard to tell that to a couple 27 year-olds with their whole life ahead of them and without a care in the world. Sometimes people have to find out the hard way. I just wish people would listen to others who have been down the same road (if you are a parent, you can relate to this).

My First Place: An Alternate Ending

Imagine if this same young couple decided to put their $50,000 down payment on a $200,000 home, and finance only $150,000. Their monthly payment drops to about $800 before taxes and insurance, they avoid having to pay private mortgage insurance (PMI), and they can seriously consider a 15-year mortgage, or paying off a thirty-year mortgage in the same amount of time. They could easily be debt free before 40, house and all.

Yes, they would be giving up a little space for entertaining, and the dogs would have to get used to a smaller backyard, but imagine the freedoms they would enjoy. Imagine them as a 40 year-old couple with a $225,000 house, a modest pile of savings, and zero debt.

Imagine a young mom having the option to stay home with the kids. Imagine those kids going to college and graduating without debt because their parents can afford to help. Imagine those kids getting married and making a similar first-home purchase decision because they admired their parents’ frugality. In one single decision, that couple could complete change their family tree, and one day leave behind a legacy of debt freedom for generations to come.

Post by Frugal Dad

It’s finally September…the most wonderful time of the year! Call me crazy but I love packing away my summer clothes and bringing out my sweaters and light jackets. Growing up in Michigan, I absolutely loved fall because the weather was always crisp and the colors on the trees were absolutely gorgeous. When I think about fall, the first items that pop into my mind are trips to the cider mill, apple cinnamon doughnuts, pumpkin patches, beautiful colors, pumpkin-flavored treats and…football. That’s right, to me, fall means that it’s the beginning of football season.

Why do I love football season? I love spending time with family and friends as we watch college football on Saturdays all while enjoying delicious tailgate food. Hot dogs, hamburgers, fajitas, chips and dip, finger foods and, best of all, chili are some of the traditional dishes that are served during tailgate season. Whether you are cooking for a tailgate or preparing a weeknight meal, chili is a great go-to dish since it can be prepared in one pot and it only requires a few ingredients to make it taste great.

This Turkey and Black Bean Chili recipe, which is slightly adapted from a Swanson recipe that I came across a long time ago, is a breeze to put together for a quick weeknight meal or before your family and friends arrive for the big game. Serve it with some tortilla chips, sour cream, crackers or cheese and you’re guaranteed to serve a great dish that your guests will thoroughly enjoy.

Turkey and Black Bean Chili

Ingredients:

• 1 tablespoon vegetable oil
• 1 lb. ground turkey
• 1 yellow onion, chopped
• 2 tablespoons chili powder
• 1 teaspoon ground cumin
• 1 teaspoon dried oregano
• Salt and pepper (to taste)
• 2 garlic cloves, minced
• 1 ¾ cups chicken broth
• 1 cup chunky salsa
• 1 tablespoon sugar
• 1 can (16 ounces) black beans, drained and rinsed
• 1 can (16 ounces) sweet corn, drained
• 1 tablespoon of fresh lime juice

Directions:

1. Heat vegetable oil in a large sauté pan. Add turkey, onion, chili powder, cumin, oregano, salt, black pepper and the garlic. Stir frequently and break the turkey into pieces. Cook until turkey is browned.
2. Stir in broth, salsa, sugar, beans and corn. Bring the mixture to a boil and then reduce the heat to low. Cover and simmer for at least 30 minutes (mixture can stay in pan over low heat until ready to serve).
3. Stir lime juice into the mixture right before serving.

More People Like Him

You’d like Jaydee a lot. Most people do. He’s the kind of guy who listens when you talk, who smiles often, and who says things that make the people around him smile. He’s intelligent, but in a way that makes others feel comfortable. It’s the way he expresses himself in simple terms that you can understand – almost like he’s articulating the thoughts you already have in your head, but haven’t yet found the right words say aloud.

It doesn’t matter who you are either. Jaydee always has a way of relating to you. Because, in a way, he’s been there with you all along. He can think like you, so he understands you. So many of us have limitations in our perceptions. We understand the soldiers but not the politics governing the war. We understand the people who go to the movies but not the ones who attend NASCAR races. But somehow Jaydee gets all of us. It’s his gift.

If he hasn’t actually been to the NASCAR race you’re talking about, he’ll be honest about it – but he’ll make you feel as if he was right there with you. And once you return home after spending a night with Jaydee, you’ll catch yourself smiling and thinking that there needs to be more people like him in the world. Because if there were, there would be far less to worry about.

Jaydee passed away today. I don’t really want to discuss the details, because honestly they aren’t relevant. It could have been a car accident. It could have been old age. We are often far too concerned with how people died, rather than how they lived. And I want you to know how he lived. He told stories – lots of stories that contained subtle insights and wisdom about our lives and the world around us. And today, I want to share with you the last story he told me before he died:

His Last Story

One Sunday morning when I was a little boy my father surprised me and took me to the fishing docks. But instead of fishing, like all the other little boys and girls were doing with their fathers, we sat down on the end of one of the docks and watched all the other children fish. For hours, we sat there and watched until we left without ever casting a single fishing line into the water.

I was simultaneously sad and angry. On the drive home I told my father that I’d never forgive him for being so cruel to me. He looked at me, smiled and said, “I love you, Jaydee.” When I didn’t respond, he asked, “Did you notice how happy all the other little boys and girls were? Did you see their smiles? Could you feel the happiness in their hearts?” After a moment of silence I quickly snapped, “I don’t really care! I just want to go fishing like everyone else!” My father sighed and kept driving.

We went back to the fishing docks dozens of Sunday mornings throughout my childhood. And each time we saw hundreds of other little boys and girls jumping and laughing and celebrating as they reeled in fish. But we still never cast a single fishing line into the water. We just sat in there on the end of that same dock and watched. And my father never explained why. But he didn’t need to. Because years later, as I entered adulthood, I suddenly realized that those mornings we spent sitting on that dock was where I learned how to love.

Photo by: Yasin Hasan

How to Get Your 30,000 Miles

1. Sign up for the CitiBusiness/AAdvantage Visa card.
2. Make $750 in purchases in the first 4 months of being a cardmember.
3. The AAdvantage® miles will appear as a bonus in your AAdvantage® account within 8-10 weeks.

Citi/AAdvantage Terms and Conditions

• The $75 Annual Fee is waived for the first year of cardmembership.
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• American Airlines has no restricted dates for award travel but seats for award travel are limited and may not be available on all flights.

More on AAdvantage

Multiple ways to earn miles. You can earn miles via purchases on the card, flights on American Airlines or their partners, purchases through the AAdvantage shopping mall and bonuses at partner hotels, car rentals, florists, etc.

Individual applicants. Don’t forget, you can use your individual name and select sole proprietorship as the type of business to qualify for a business card.

Redeeming miles. AAdvantage allows you to redeem miles for one-way flights, often for as low as 12,500 miles per leg. That means this bonus could earn you close to 3 one-way flights and save you at least $300!

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The recent downturn in the economy has had an effect on more than just consumers. Governments are desperately seeking money for their spendthrift ways and one way to insure they get it is to regulate cash transactions. It appears that governments would like to do away with cash altogether, making hard currency something only seen in museums. Certainly, the death of cash as we know it would make tracking transactions a lot easier for governmental agencies.

In the United States, large cash transactions aren’t banned yet, but there are severe penalties (read: significant jail time) for failing to report a large cash transaction. For example, your bank is required to file a currency transaction report with the federal government for every deposit, withdrawal, or exchange over $10,000 in cash. Some banks voluntarily lower that amount – some are as low as $3,000, presumably to stay on the good side of the IRS. Basically, if you sell your car for $10,001 in cash and then try to deposit it, the bank has to turn you in to the government; sell it for only $3,001 and they voluntarily turn you in. “Have a nice day!”

Additionally, if a bank “knows, suspects, or has reason to suspect” that a cash transaction over $5,000 is “suspicious”, then a suspicious activity report must be filed with the government. I guess the bank has to act as FBI agents as well as snitches.

But the reporting requirement goes beyond just banks. Small businesses have to report those same cash transactions as well, and thanks to the “health care bill” recently passed, those reporting requirements extend all the way down to $600. As Jeff Schnepper explained in an article for MSN Money, if you are in business and receive in excess of $10,000 cash in a single transaction, you must report it to the IRS or you will go to prison. According to Schnepper, cash used to be king but now it’s evidence.

If you’re in a business and receive more than $10,000 in cash from a single transaction, or from related transactions within a 12-month period, you have to file Form 8300 and report the buyer to the IRS. Don’t file, and you go to jail.

The IRS isn’t kidding. I had a client who was a dealer in Corvette sports cars. He told me he didn’t have time to file the forms. I told him several times to file. He thought he knew better. He went to jail. So did his children who were involved in the business.

US gold transactions must also be reported

ABC News has reported that ANY gold transaction in excess of a paltry $600 must now be reported to the IRS. That $600 figure doesn’t just apply to gold either. All businesses, large and small, are now responsible to track and report the miscellaneous income associated with services rendered by independent contractors or self-employed individuals. That tracking has an expense and it will be born, not by the business, but by the consumer, as all business expenses ultimately are.

Large cash transactions in some countries are banned

Yep, believe it or not, more and more countries are orchestrating how almost all business is transacted by making large cash transactions illegal.

Italy

As part of Italy’s new “austerity measures”, all cash transactions over 5,000 euros (approx $6,400 USD) will be banned. Passed in the name of cracking down on tax evasion, this seems quite severe to me when you consider that it also applies to cashier’s checks.

Mexico

A bill before the Mexican legislature would completely ban the purchase of real estate in cash. In addition, the new law would ban anyone from spending more than MXN 100,000 (about $7,659) in cash on vehicles, boats, airplanes and luxury goods. $7,659 isn’t a whole lot of money when it comes to those types of items. Don’t think you can just ignore this law if it is enacted. Violators will face up to 15 years in prison.

Currently, 75% of all transactions in Mexico are completed in cash.

Europe

In Europe, many of the “austerity packages” being introduced include severe restrictions on the use of cash. For example, in Greece, all cash transactions above 1,500 euros ($1,923 USD) are effectively banned starting in 2011. According to Greek Finance Minister George Papaconstantinou as reported by Reuters:

“From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards.”

With Visa and MasterCard getting a cut of every card transaction, think of the money they will make in Greece alone.

Cash is ABNORMAL

Anyone using cash, especially large amounts of cash, is looked upon as abnormal and suspicious. We’ve been taught for three decades that anyone spending a large amount of cold hard cash is trying to hide something and is probably a criminal or tax cheat.

Certainly, a lot of criminals do use cash exclusively, but millions upon millions of normal, law-abiding citizens simply prefer to use cash as well. Should we take the freedom to use cash away from the rest of us just because a small minority abuses it?

Unfortunately, the freedom to use cash is being slowly stripped away from citizens in an increasingly large number of countries, not just to clamp down on the criminal element, but to pad the coffers of inefficient and spendthrift governments.

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We had a fantastic time in Seattle, and I was pleased that the American Express SkyMiles card worked well to save on baggage fees.

So here I am on vacation again! I drove down with the boys earlier this week and Scott is flying down with our daughter today to join us for the long weekend.

It was the first long drive that I’ve done by myself with the kids, but we set up BuddyWay GPS tracking so Scott could keep an eye on us during our trip. It was pretty slick!

Of course, before we came down, I looked to see if the vacation home we were considering earlier this summer was still available… and the price was reduced by $10,000!

That makes it really tempting… however, since vacation season is wrapping up, I’m going to keep an eye on it and see if the price drops more over the winter and see how bad the seller need to unload it. Maybe we’ll be able to scoop it up for really cheap in March!

Retirement

• Withdrawing Money During Retirement
• 10 Guiding Principles For The “New Retirement”
• How To Find More Money for Your Retirement Account

Real Estate

• Is Home Ownership Still Part of the American Dream?
• Landlord-Tenant Relationship (A Tenant’s Perspective)
• How Much Mortgage Can I Afford?

By the Numbers

• 6 Strategies for Beating Inflation
• 20 Ways to Untie from Whatever Is Holding You Back
• 18 Great Reads That Changed My Life
• 5 Keys to Retire Overseas

And More!

• Things vs. Experiences
• I Want To Become a Minimalist, But I Could Never Give Up My…
• How to Become a Successful Consultant
• Emergency Preparedness: How Does Your Family Rate?
• MonaVie Blackmailing Me
• How A Second Income Stream Can Give You Some Financial Security
• Carnival of Personal Finance

Click here to leave a comment on this article.
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How engaged and satisfied are you on the job?

Many people hate their jobs or are seriously bored with what they do at work on a daily basis.  This is a serious issue that needs to be addressed.

As I mentioned in my last article a Lack of Engagement at Work Is Bad for You.  It carries many different risks that can really mess up your life.

Gallup says that two-thirds of American workers are “not engaged” or “disengaged”.  If you fall into this majority, then you should take action to correct the situation so you can live a more satisfying life.

See Being Disengaged as an Opportunity

It is easy to blame your employer, partners or even external factors such as the economy for your situation, but this important matter is one that you need to become responsible for and address.  Based on the negative impacts I detailed in my last post, you simply can’t continue ignoring the problem.  It is time to take the bull by the horns and make things better.

If you feel disengaged, then I’d suggest that you view this as an opportunity.

You might ask, “How is being disengaged at work an opportunity?”  Well, you are basically already at the bottom in terms of job satisfaction.  Therefore, you have nowhere to go but up.  This means that you have the opportunity to make changes with very little additional risk.  If you try something and it doesn’t work it isn’t really going to make you less happy, now is it?

Look at it this way, you are already risking your livelihood by being disengaged.  What more damage can you do?  Any change will likely be positive because it will give you a sense of control and enthusiasm that will almost surely turn things around.

Furthermore, you have the justification to change.  Having good justification is an opportunity.

Sometimes spouses, friends, partners and family members will resist change especially when it messes with their source of income.  But how can they argue when you let them read all the negative effects disengagement is having on your health, relationships and overall well-being?  It will certainly reduce their resistance if you present it correctly.

Here is this opportunity staring you right in the face.  What will you do with it?  Life is sending you a message.  It is time to respond.

What You Can Do About Your Disengagement at Work

Okay, you know the negative impact and you know that this is an opportunity to make some changes.  Now what do you do?  Well, I’m going to lean heavily on the advice offered by Douglas LaBier in Three Sources of Boredom in Today’s Workplace — And What Helps.  Here’s some of what Douglas suggests:

1.  Identify the Kind of Work that Engages You

Think about a past work experience where you felt very engaged.  What kind of work did it entail?  What were the challenges?  Did you work with a team or alone?  What specific things about that work did you find most satisfying?  Now think about your current situation.  What is lacking?  Is it your boss?  Is it your coworkers?  Is it the environment or the type of work?  Figuring out what makes you tick at work is the first step toward fixing the problem.

2.  Scope Out Opportunities

Once you have identified the kind of work that engages you, then look for opportunities at your present employer that are more stimulating for you.  Often, it is possible to carve out new responsibilities for yourself with a little initiative and extra effort.  Mold your job like Play Doh.  Craft it into something that you find more engaging.

3.  Talk It Out

Meet with your boss and explain that you are interested in getting involved in the type of work you identified above.  I wouldn’t tell them that you “feel bored” or “disengaged”.  I’d suggest putting it in more positive terms.  For example, say something like, “I’d like some new challenges.” or “I’m interested in growing in a new direction where I can make a greater contribution.”  Most bosses will appreciate this kind of interest.  If your boss isn’t open to the idea, then talk to someone in HR or another leader that you trust.

4.  Think Outside the Box

If you just can’t figure out a way to make your existing situation work, then look for another opportunity that is more engaging.  You might be able to find something in another department or you might have to move to a completely new employer.  Be patient and look for something that really excites you.  Of course, work is not the only place that you can apply your skills.  You can also consider things outside of work altogether such as volunteer opportunities, starting a micro-business or beginning a hobby.

Make Changes to Become More Engaged at Work

You simply cannot remain disengaged at work and expect to live a great life.  You’ve got to deal with this problem before it causes issues with your health, relationships and finances.  Apply the suggestions above and you’ll find yourself in a much better situation at work in no time.

 Photo by CarbonNYC

Related posts:

• Lack of Engagement at Work Is Bad for You
• How to Make the Work in Our Life Rewarding
• 10 Tactics To Stay Invisible And Slack Off At Work

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Just a simple question for you..are you ready for some football? I know I am. And what’s this rumor about extending the NFL season to 18 games? I don’t like it. As much as I love football, I don’t think extending the season would be popular. With 16 games, every game counts. With 18 games, each game counts a little less.

Besides, the season would drag well into the next year. Imagine Superbowl Sunday in March. Just doesn’t seem right.

The Frugal Roundup

It’s Still a Good Idea to Buy a House in this Economy. You should only be looking to buy if you are debt free with a solid emergency fund, and have a decent down payment. Record low interest rates are not enough to make up for poor financial footing. @Free From Broke)

12 Reasons Why You’ll Be Happier in a Smaller Home. One of the biggest early expenses of buying a much larger home is buying more furniture to fill it up. If I had more money to spend on real estate I’d buy more acreage, not more square footage. (@Becoming Minimalist)

My College Savings Plan, Look Out for #1. It’s fairly easy to convince people to save for their own retirement before savings for their kids’ college education. Perhaps other financial goals should come before college savings, too. (@Budgeting in the Fun Stuff)

Finding the Rhythm. I can certainly relate to this one. As soon as I get in a groove with anything (money, diet, etc.) I hit a speed bump and it completely derails me. (@The Simple Dollar)

7 Simple Ways to Say No. The word “No” continues to be one of the more difficult words to say in the English language. If you struggle saying no, to people, to stuff, to whatever, I suggest reading this one. (@Zen Habits)

Best of the Rest

• Making Donations Truly Count
• 10 Lies You Will Hear Before You Pursue Your Dreams
• The Beauty of Handwritten Note
• 20 Ways to Untie from Whatever is Holding You Back
• Do You Have to Pay Taxes on Unemployment?
• Decorating With Photos

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Given this, you would think that the government would not make you pay income tax on that money as well. However, you would be wrong; you do need to pay taxes on unemployment income. Well, wrong and right, depending on what year you were unemployed.

Unemployment Taxes: Pay Now or Pay Later

During my unemployment, I had failed to fill out a W-4V form indicating that I wanted income taxes withheld from my unemployment benefits. I reasoned that come April I would be making much more money and could afford to pay the tax bill at the end of the year; besides, I could use all the money I could get at the time to cover things like the rent, food, student loan payments, and gas bills that didn’t cease just because my job did. Because of my choice I took a tax jab in April 2007 to the tune of $450 which doesn’t sound like a lot, but was something I had failed to plan for.

When you file for unemployment, I would recommend choosing to withhold taxes on your unemployment compensation as you receive it, which means the government will automatically take out a flat 10% no matter how much your paycheck is.

Some states exempt unemployment compensation from state income tax, but many states, such as Massachusetts, Wisconsin, and New York, take their tax share of your unemployment as well at around 5%. Check with your state’s Department of Revenue for more specific information.

Those Who Don’t Need to Pay Unemployment Taxes

With the unemployment rate hovering around 10%, the government took action to make the first $2400 of your unemployment compensation you received in 2009 excluded from taxation (if you are married and both spouses were unemployed in 2009, each spouse may exclude $2400 from taxation, totaling $4800). If you were unemployed in 2008, or are unemployed in 2010, you must still pay income tax on your earnings. Also, even if you are exempt from the federal income tax in 2009, be aware that your 2009 earnings may still be liable for state income tax.

To determine if you’ll need to pay taxes on other income you make during the year, you can see the guidelines for minimum income to file taxes.

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When my son was little he had a mild addiction to Thomas the Train collectibles. Those things were everywhere (you may remember Harold the Helicopter’s flight to the bottom of our guest toilet and my mission to retrieve him)! Then it was monster trucks. Now, Legos are all the rage.

And what about these new Legos? When I was a kid you could buy a ton of plastic Legos blocks for cheap. They came in four colors – red, blue, green and yellow. Now, a larger Star Wars Lego set runs about $99, and includes hundreds of tiny pieces and 37-step instructions for assembly! I digress.

You see a pattern developing here? My son, like many kids, goes from one greatest thing to the next. Individually, these things are not that expensive (save the aforementioned Star Wars Lego sets), but collectively they can add up.

In addition to being expensive for parents, they do have a cost for kids, too. And I’m not just referring to toys’ way of eating into allowance savings.

Too many toys usually means too many distractions. Between the television, the Wii, the computer, the buckets of army men, trucks, Legos, etc, etc. there is little time to devote to things like books, and outside play.

I’m certainly not advocating getting rid of all toys. In fact, some toys can be quite educational. Others can be incorporated into outside play (my kids love the game Hyper Dash). But often toys are played with a while and then tossed aside, collecting dust and taking up space in the kids’ closets and toy boxes.

The number of toys accumulating never seems to diminish, nor does our kids’ appetite for more of them. Are kids born with a consumer gene?

Hey Mom and Dad – Make Sure You Don’t Own Too Many Toys

Kids learn much from the behavior modeled for them by their parents. Many parents are guilty of buying too many toys themselves. And many of us fall for the same toy fads that kids do, although our “toys” are often much more expensive.

Need evidence? Just hang out around a Best Buy store the morning Apple releases a new product – any product. I’m quite certain most people in line for the iPhone 4 already owned a phone – maybe even an iPhone 3. But they had to have the latest and greatest.

Kids notice this stuff. Maybe Dad buys a new pickup truck every two years. Mom picks up a new laptop with the first hint of a problem with the one she just bought 6 months ago. And both parents are always buying new shoes, new clothes, new jewelry and watches, etc.

Allow Kids to Buy Their Own Toys…At Least a Few of Them

At around age 5 we started giving our kids an allowance. Over the years we’ve gone back and forth on whether or not this allowance should be tied to chores. A final compromise was to identify a set of basic chores to be performed throughout the week that must be completed as a contributing member of the household. Additional chores could be performed to earn extra money, or not, depending on school schedules, motivation, etc.

We encourage the kids to use a portion of their allowance for spending, a portion for saving and some for giving. With their spending allotment, they usually pick up something small during weekly grocery/household supply trips – a magazine, a CD, a movie, a game, etc.

Of course, we still buy them a few things all along (I rarely turn down a request for a new book), and don’t expect them to pay for things like clothing (not yet, at least) and basic supplies. Eventually, as they mature, I’d like to increase their budget and include more spending categories for which they are responsible.

We’ve noticed that the kids are much more selective about what they buy, and often fret over “spending all their dollars” on a new game – leaving them with an empty wallet for another week.

I’m not unlike any other parent. I want my kids to have things better than I did. I want them to have more. I want them to have the best. But I also want them to grasp the connection between having nice things and the sacrifice required to earn them. I want them to be able to say “no” to themselves; to avoid the trappings of debt and consumerism as they grow older. Maybe they will avoid some of the mistakes I made along the way, or at least be prepared to learn from the ones they are bound to make themselves.

Post by Frugal Dad

Franchises offer a lot of benefits for entrepreneurs. The biggest benefit is the “system” that a franchise develops and then sells to franchisees. With a franchise, you get instant name and brand recognition, and the assistance of a team or professionals who have “been there, done that.”

But all that glitters is not gold in the world of big time franchises. Put on your thinking cap and ask yourself, why would a company wish to franchise its operations? Why would they give away their most closely guarded secrets, their unknown formulas for success, and their highly classified and confidential information? For money, of course.

Back several years ago I filled out all the necessary paperwork to get a Uniform Franchise Offering Circular from a well known sandwich franchise. After they crawled over my bank accounts, my credit history, my assets and liabilities, my grades from elementary school, and my sister’s cat’s first owner’s grandfather’s ex-football coach’s nephew twice removed, they told me everything I needed to know. Sort of. Most of what I learned, I figured out by talking to other franchisees, and what I learned made me say NO!

Why I didn’t buy a franchise

You have to pay to play

The up front franchise fees were horrendously large, and that was just for the “privilege” of using their name! Before you ever walk through a potential site, before you taste the first dollar, before you even open a business checking account, that fee has to be paid. It can be a large six figure number for the larger franchises and in many cases, it has to be paid every few years, just to maintain the “relationship.”

You have to pay each day

The royalty fee for the franchise I was considering was 7 percent, but I’ve seen royalty fees as high as 12 percent. I’m sure some are even larger and some are probably a bit smaller. This money is swept from your bank account each night. Sell 300 combo meals at 7 bucks each and the franchisor will debit your account that night $147. That might not sound like much compared to the $2,100 you grossed, but when your food costs were $1,260 and you paid three employee’s salaries of $240 plus the cost of utilities and the cost of advertising, and the cost of insurance, and the lease on your facility … you get the picture. You essentially have two new partners in your business and both have their hands out: Uncle Sam and the parent company.

You have to buy their stuff

As part of this franchise agreement, a franchisee had to buy 100 percent of all food items from the parent company. I can understand that. Franchises want consistency above all else and you can’t have some rogue franchisee selling Oscar Mayer bologna and passing it off as Black Forest Ham. But to demand that all napkins, straws, cups and paper products, the cash registers, the software to run them, tables, stools, benches, artwork, plastic silverware, the aluminum foil, uniforms, coffee filters, mustard packets, salt, pepper, and ANYTHING else used in the restaurant has to come from the parent company, well, it smells a little greedy to me, especially when their prices on those items are 10 – 25 percent higher than Costco.

Competition can be tough

Franchises claim to give franchisees an “exclusive” right to a certain geographical area, and many honor that agreement. Some do not but get around it legally. It’s in the franchisor’s best interest to get as many sales as possible in a given territory and it’s perfectly legal under many franchise contracts to amend the agreement so that the size of your geographical area effectively shrinks and competition moves in. If the parent company controls your prices, your profit is decreased while the franchisor’s is increased.

Financing means debt up to your ears

Many franchises don’t offer financing, but some do. If you need financing, I’d suggest obtaining it through a third party. Asking a franchisor to finance your entrepreneurial dreams is like asking the car dealer to finance your wheels. You DON’T get the best rate, even though the process seems easier than using a third party. Think about it, not only do they make money from you up front, and by the day, and from your purchases, but also from the interest you have to pay? Yikes, not me.

Lack of creativity could drive you to tears

In many franchises, you cannot change anything. I understand that franchises don’t want some guy selling Harley-Davidson parts at a hamburger franchise, but in the long history of franchising, it was the franchisees that brought innovation to the table. That’s how McDonald’s came up with the Filet-O-Fish! Who knows the customers better than the guys that are nose to nose with them daily? Why is it that corporations refuse to listen? A system is great, but it shouldn’t result in slavery.

Beware of the real estate craze

Franchises generally determine where you will put your store. Though you can submit requests, they have the final say, and that can mean big bucks on the purchase or lease of land and buildings. Of course they want you to be successful, but many don’t recognize that there’s some balance to that! Sure I can put a store on an outparcel next to the shiny new mall, but I can’t sell enough sandwiches to cover my $30,000 per month lease!

Brand recognition cuts both ways

Imagine working night and day to build your business. Then one day, some crazy loon puts a cadaver finger in a chocolate vanilla swirl milkshake and promptly rushes to a lawyer … and to CNN. Suddenly there’s a lot of bad press and your business goes south as a result. Maybe the CEO of the parent company gets caught in some indiscretions with his 17 year old neighbor. Maybe the local church youth groups decide to boycott your store in protest. Brand recognition indeed does cut both ways.

Advertising don’ts and advertising dues

Some franchises won’t allow you to do any advertising unless you run it by them, their ad department, and their legal team first. The problem is that from the day you open you doors, you’ll be hit up for donations to schools, yearbooks, Little League, MADD, SADD, RADD, and Eagle Scout projects. Why do franchisors NOT want you advertising without their permission? Why, money of course! Many franchises demand that you contribute a percentage of your gross sales each month to the advertising pool, especially if the franchises advertises nationally. While this advertising certainly does instill brand awareness, for my money, nothing beats getting involved in the local community and helping out the people who will frequent your establishment.

The parent company has nothing to lose

What exactly DO they have to lose? You pay for the right to use their name. You pay them daily. You buy their products. You buy their services. You pay your lease, they don’t. You pay your employees, they don’t. You pay your insurance, they don’t. You pay YOUR salary, they don’t. You pay your utilities, they don’t. You pay for your FICA, medical insurance, building repairs and maintenance, office expenses, community organization dues, your accountant, your taxes, your depreciation expenses, your “lost” inventory, and all the other costs needed to effectively run the business. What do they pay? Nada. Who’s making the money? They are!

Maybe the best idea is to start your own sandwich shop, or chicken wing stand, or burger joint and sell franchises once you have it up and running. Trust me, people are doing it all the time.

While I’ve outlined a lot of the negatives I encountered, that doesn’t mean you shouldn’t do your own investigation into any franchise you’re interested in starting. Not all franchises are the same and if you have an interest, go over that UFOC with an extremely fine toothed comb, then have a lawyer look it over for any big negatives that might pop up down the road. No, not all franchises are bad, but not all of them have your best interests at heart either. Do your homework, get some professional guidance, and then do what you feel is best for you in your situation. For me, a franchise wasn’t it.

I guess it all boiled down to control. I didn’t want someone else telling me how I HAD to use my capital.

• Cups photo by RiRi Trautmann
• Filet-O-Fish photo courtesy of Wikipedia Commons

This article was included in the Carnival of Personal Finance at Sustainable Life Blog.

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What is the Marriage Tax Penalty?

Ten years ago, married couples had to pay more than double the taxes they would if they were two single filers. Owing more tax as soon as you married became known as the marriage tax penalty.

The culprits of the marriage tax penalty were standard deductions and tax brackets that were only larger than, but not double, the single deductions and brackets.

Marriage Tax Penalty History

When the 2001 Bush tax cuts were put in place, the marriage penalty tax was eliminated for most taxpayers by doubling the single standard deduction for married taxpayers. The tax brackets were also aligned accordingly, so there wouldn’t be any additional taxes just for getting married.

Marriage Tax Penalty Returns

When the Bush tax cuts expire at the end of the year, the marriage tax penalty will return, increasing taxes for many married couples.

The amount of tax differences will vary based on your situation. You can use the 2011 Tax Calculator to try to predict how it will impact your family. To use it as a marriage penalty calculator, fill it out twice, once as single and once as married to see the differences.

Those taking the biggest hit will be couples with one large income and one smaller income. Right now, couples with very different incomes often see a marriage tax benefit, sometimes called a marriage tax credit, under the current rules.

Married Filing Separate

The marriage tax penalty is different than married filing separate, which is a popular way to file in some states. For example, in Ohio, it’s often beneficial for spouses to use the filing status married filing separate rather than to file joint as they have more tax savings.

When I do a tax return, I always run it both ways, joint and separate, to see which method will have the biggest tax savings.

If the marriage tax penalty returns, we’ll probably see some changes to the most beneficial filing status too, which will be something to keep in mind if you often file separately.

Action Plan

Now even if the marriage tax penalty returns, I’m not going to recommend divorces across the board. If you are like me, the benefits of family health insurance will more than outweigh the costs of the tax increase. But I will be putting on my thinking cap to try to get creative and maximize our tax savings with the new rules!

And of course, Congress is being encouraged to make a decision on the expiring tax cuts and marriage penalty relief… so we’ll have to wait and see what happens.

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Are you fully engaged at work?

I want to say right up front that a lack of engagement at work is bad for you. Yes, it is bad for your employer too, but the negative effect it is having on you is my main concern. So, let’s take a look at this and see what we can do about it.

Engaged Versus Disengaged

Engaged workers are all out involved. They are enthusiastic, proactive and dedicated to making their business a success. They enjoy what they do.

Disengaged workers are bored, stressed, distracted, disillusioned and sometimes holding back from giving their organizations their full potential. They do not enjoy what they do.

Which are you?

When you think of a disengaged worker you may imagine the burned out cubicle dweller or the slacking construction employee, but I think it goes beyond this. In fact, I think there are also a lot of disengaged CEOs, managers, entrepreneurs and freelancers out there. Are you one of these? If you are, then this information will help you too.

Feeling less than fully engaged at work is a troubling problem that contradicts living life to the fullest. Your work engagement level has a lot to do with your success and satisfaction on the job. If you aren’t fully engaged, then it isn’t likely that you are going to be happy, healthy or effective. Therefore, we need to do something to fix it.

The Majority of Workers are Bored and Disengaged

If you are not fully engaged at work, then you are not alone. Studies show that worker engagement is dropping. Gallup says that more than two-thirds of American workers are “not engaged” or “disengaged”. Two-thirds! This certainly constitutes a major issue.

Bored and disengaged workers fritter their time away on the Internet, socializing, gossiping and going to make-believe appointments. One article I read recounts Joel’s story. He is a disengaged, mid-level executive who sneaked out of his office one afternoon to go to a movie. When the movie was over, he ran into his boss coming out of the same theater!

Other studies have confirmed what Gallup has found. Workers around the world are bored and do not feel fully engaged. They feel under-utilized and under-appreciated which leads to heavy dissatisfaction on the job and in their personal lives.

The Negative Effect Disengagement Has on You

A lot of articles address the negative consequences that a lack of engagement has on employers and businesses, but again that’s not my focus. I’m concerned about the internal agony it creates for individuals like yourself. This inward division causes stress which is a contributing factor to many serious health issues, but this is just a part of the story.

Overall, what I found about the effects of disengagement at work on our quality of life is very concerning. For example:

• An English study followed a group of healthy men over 10 years. What they found is men who were engaged at work are 30% less likely to suffer from coronary heart disease than employees who are disengaged at work. This confirms the link to negative health effects.
• Another study found that, 5 in 10 engaged workers (53%) strongly agreed that they had gotten the important things they want in their lives, compared to just 13% of actively disengaged workers.
• It was also found that work stress had caused 54% of actively disengaged workers to behave badly with friends or family members three or more days in the last month.

Bottom line, a lack of engagement at work causes health issues, relationship trouble and reduces the likelihood that you are going to get the important things you want in life. In my mind, this makes it a serious problem that you need to deal with before it wrecks your life.

Of course, disengagement can also put you at risk for losing your job which is most likely your primary source of income. Without steady income, you are likely going to suffer financially. This can lead to additional stress which can further complicate health and relationship issues. 

The whole matter can snowball on you very quickly which is pretty scary. Disengagement at work is obviously bad for you. There is no two ways about it.

Again, two-thirds of all American workers are suffering from some level of disengagement at work. This means that a lot of people are living less than a great life.

You Need to Deal with Your Lack of Engagement at Work

Don’t you want a better life for yourself? Don’t you want to avoid the health, relationship and financial issues that being disengaged at work can lead to? Heck, don’t you want to be happy at work where you spend a good deal of your time? If so, then it is time to deal with your lack of engagement. It is time to take action to correct the situation.

Keep in mind that the needed change might be modest or radical. Either way, the need to fix things is staring you right in the face. In my next article, I will explain how a lack of engagement at work is an opportunity and how to go about making the necessary corrections.

 Photo by joshuahoffmanphoto

Related posts:

• Being Disengaged at Work Is an Opportunity
• Three Common Excuses For Less Than Excellent Work
• 10 Tactics To Stay Invisible And Slack Off At Work

Searching for Something New

I live in the greater DC metro area, which is a very expensive place to rent. I had a roommate for the first two years out of college, but have lived alone for the past year. I would be willing to share an apartment with a friend, but am not really willing to live with a stranger. Since all of my friends are locked into situations they’re happy with, I was once again searching for an affordable studio or 1 bedroom.

I found a newly converted basement apartment in a great location. All utilities and bills are included, down to cable and internet. I would be saving a total of 41% of my current housing and utility expenses. With the money I will save, I can likely pay off my student loan balance (my only outstanding debt) in the next 12 months – a full 11 years ahead of schedule. The cons: shared laundry with the homeowners and a kitchenette with only 2 burners and a convection oven. The apartment is probably 30% smaller than what I have now. The walk to work is longer, but the walk to public transportation is shorter.

Things to Consider

Before deciding whether to make this leap and sign a lease on this apartment, I came up with a list of major considerations:

• I spend most of my non-work time at home. It’s probably worth being comfortable!
• Housing is one area where it might make more sense to spend money up front to save money in the long run. With a reduction in kitchen size, I might be tempted to eat out more, thus erasing some of my savings.
• Paying off debt ahead of schedule is always preferable to the alternative.
• I’ve enjoyed living alone and would like to continue doing so.
• Since graduation I’ve lived in managed buildings with on-site maintenance, secure entries, pools and fitness centers. On the other hand, I’ve used the latter fairly irregularly, the basement is part of a house in a very safe neighborhood, and maintenance needs are likely to be minimal since the unit is brand new.

The Big Decision

So my question for you is – how far would you go to save money? Does the answer differ depending on whether or not you have debt to pay off? What would you give up to eliminate your debt? Would you take a substantial decrease in your standard of living? Would you switch your diet to consist of slow cooker, one-pot, or microwaved meals? Would you give up cabinet space, closet space, and living space? Or would you suck it up and pay the money to keep what you are used to? Alternatively, would you live with a stranger in a nicer building?

I’m getting close to needing to make a decision, as my lease ends at the end of this month. I’d appreciate any help you all can offer before then!

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Have you ever wondered what it would be like to live a minimalist lifestyle? It’s a movement I’ve been an admirer of for some time, but unwilling to put into practice in my own life until now.

Recently, I began watching a new survival show on Discovery Channel called “Dual Survival.” One of the featured survivalists, Cody Lundin, is also a minimalist, and goes about surviving extreme situations barefoot, and without other forms of survival gear.

My feet are too tender to go around barefoot, so I think I’ll keep my shoes for now. However, I do admire this guy, and others like him. They may have adopted minimalism for environmental reasons, economic reasons, or maybe some combination. Either way, their level of commitment reminds me just how addicted to stuff I still am, and has inspired me to rethink that addiction.

“But I Could Never Give Up My…”

How did you finish that sentence above? Daily cup of Starbucks? CD collection? Season football tickets? All of us probably have one thing we aren’t willing to give up. And maybe that’s the first thing that should go.

On the other hand, life is to be enjoyed. I’m reminded of words of wisdom from my grandfather who often reminded me to, “Stop and smell the roses. Life is to be enjoyed.” Well, there are plenty of “roses” available to smell that don’t cost much, so I am trying to adopt his philosophy with a frugal approach.

How Many Things Do You Own? How Many of Those Things Own You?

As I’ve tried to learn more about the minimalist approach, I’ve discovered a number of new blogs on minimalism. I’ll be sharing a few of my favorites in upcoming editions of the weekly roundup.

Several of the authors behind these blogs have advocated taking an inventory of just how much stuff you own. And they mean that quite literally. If you have 20 DVDs, 30 CDs, an Xbox with 5 games, a house, a car, a bicycle, 10 pairs of shoes, and a 5-piece art collection, you have 74 things. At least I think that’s the idea.

Not sure how far to break down the count – do I count the dishwasher and refrigerator inside my house? Do I count the things inside my refrigerator and the dishes currently in the dishwasher? Probably. You get the idea.

The point is, even if we don’t think we own a lot of stuff, we do. And how many of those things are things we continue to accumulate without receiving much value from them after the initial shine wears off?

I am not much of a collector, and I have few hobbies, so I naturally don’t collect a lot of things. But I haven’t always been that way, and my inventory of stuff is still representative of former life as a spendthrift.

Letting Go of Stuff is Hard

Over the next few weeks, as the weather beings to cool, I plan to begin making a weekly effort to get rid of some number of “things.” My plan is a sort of incremental minimalism in steps. Maybe I’ll get rid of 10 things a week, or completely empty one desk drawer, or garage shelf.

One week I’ll pull ten shirts I no longer wear and donate them to a shelter. Next week I’ll round up 10 games (video games, old board games, etc) I no longer play and drop them off at the children’s hospital. The next week maybe I’ll contribute to a neighbor’s yard sale by adding 10 DVDs to their collection for sale.

I’m still not settled on what is a reasonable number to get rid of each week, or if I’ll even track it by week or specific number. But I am convinced this is something I want to do. Having too much stuff is costly. It costs money to store it. It takes too much time to find the few things that are really important. And of course if you have really expensive things, you might even have to pay to insure it, or operate it, or clean it, or whatever. That’s the point where things begin to own you, and I want to begin moving away from that point.

Traveling Light

Oddly enough, some people are comforted being surrounded by stuff. I am the complete opposite. For me, stuff is a distraction. There is a certain freedom that comes with owning less stuff. You feel less pinned down. You have less payments. You have more options. You more fully appreciate the few things you do have, and find yourself wanting less.

Over the next several weeks I’ll periodically update you on the things I’ve given away – maybe even share pictures of my collections on our Facebook page. I hope it will inspire a few of you to look around and free yourself of an addiction to things.

Look around the room you are in right now. Could you find 10 things to get rid of and barely even miss them? I see at least 10 in my already frugal home office (OK, I cheated a bit because my office doubles as our closet – and there are plenty of things to get rid of in here!). Off to grab a box and get on with round one.

Post by Frugal Dad

Getting past a call screener is easier than you think. Of course, some people are totally confident in their ability to use the phone and get to a decision maker (we generally call them high powered salespeople). However, 90 percent of us are reluctant to pick up the phone and make a “cold call” if we think there’s a call screener involved (we usually call these job seekers).

If you’re not experienced in using the phone, believe it or not, it’s a mostly friendly and helpful world out there. Most executives I know DO screen their calls but generally are courteous and polite and go out of their way to project a good image of themselves and their company. The same holds true for others such as secretaries or administrative assistants … and call screeners.

Still, there is a certain misconception that all assistants will keep you from speaking with their bosses. They do screen calls, but it is part of their job to make sure that contact is made when appropriate.

Know the real reason you’re calling

When you plan to seriously connect, you have specific goals and you use a standardized procedure for making a large number of calls.

Use these tips to get past a call screener

• The best way to get around a call screener is to use a referral from someone well respected by the person you wish to connect with.
• If that isn’t feasible, start by using the name of the person who is the “screener.” Once he or she has been identified, their manner will become more personal.
• When asked your name, identify yourself with an organization if possible. Remember, the more difficult and expert the screener is, the more valuable that person is likely to be, especially as an ally in your future relationships with the firm.
• If you don’t get through on your first attempt, and you can’t get a suitable time to call back, suggest a time when you will call the screener back. Until you have established direct contact, don’t leave messages.
• When you call back, use the screener’s name with the receptionist. After establishing that the person is difficult to reach, try this procedure: “Since he (or she) is so hard to reach, would you do me a small favor? May I call back at ten o’clock to see if he would be interested in speaking with me for a few minutes?” If you must leave a message, leave one of potential benefit to the person you are calling.
• Consider reversing your attempt to speak with the decision-maker. Instead, ask for an internal referral to another line manager in the area in which you wish to make contact.
• After a few minutes of discussion with the call screener, ask two or three penetrating questions about the firm’s needs. When asked difficult questions, those who don’t know the answer are more inclined to refer you to someone who can – hopefully that will be the person you want to speak with.
• If the screener tries to forward your call to someone other than the person you’re wishing to connect with, get the name of the person to whom you will be speaking. Call back later for that person or request an immediate transfer. After a few days, call back the screener and explain that while the person she referred you to was helpful, they couldn’t answer the questions you had in mind and you still need to speak with the person you originally called.

It all boils down to persistence. Whether you’re looking to make a big sale, trying to get in touch with a venture capitalist, or seeking a job, persistence is the one character trait that all successful people claim was vital to their success.

Don’t give up!

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Unfortunately, just before you take your first step on the righteous journey to pursue your dreams, people around you, even the ones who deeply care for you, will give you awful advice. It’s not because they have evil intentions. It’s because they don’t understand the big picture – what your dreams, passions, and life goals mean to you. They don’t understand that, to you, the reward is worth the risk.

So they try to protect you by shielding you from the possibility of failure, which, in effect, also shields you from the possibility of making your dreams a reality.

As our friend Steve Jobs says:

“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma, which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice, heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”

Here are 10 ill-advised tips (lies) people will likely tell you when you decide to pursue your dreams, and why they are dreadfully mistaken.

1. You can follow your dreams someday, but right now you need to buckle down and be responsible. – Someday? When is ‘someday?’ Someday is not a day at all. It’s a foggy generalization of a time that will likely never come. Today is the only day guaranteed to you. Today is the only day you can begin to make a difference in your life. And pursuing your dreams is what life is all about. So don’t be irresponsible. Don’t wait until ‘someday.’ Make today the first day of the rest of your new life.
2. You’re totally screwed if it doesn’t work out. – Wrong! This is a giant, lame load of BS. You’re not even close to being screwed. In fact, the worst case scenario is that things don’t work out and you have to go back to doing exactly what you are doing right now.
3. It’s safer to stay at your day job. – Sure, I suppose. But you know what’s even safer than that? Going home, locking yourself in your bedroom, and never, ever coming out. And just like that you will have flushed your entire life and your dreams down the toilet. Remember, safer doesn’t always mean better.
4. That’s impossible! – It’s only impossible if you never do anything about it. The reason certain things seem impossible is simply because nobody has achieved them yet. But this doesn’t mean that with your help these things won’t become possible in the future. If you truly dedicate yourself to an end result, almost anything is possible. You just have to want it bad enough.
5. Only a lucky few “make it.” – That’s because those lucky few got off their rear ends and did something about it! They had the drive, determination, and willpower that you have right now. You can be one of them. It’s up to you, and only you.
6. You might fail. And failing is bad. – Failures are simply stepping stones to success. No matter how it turns out, it always ends up just the way it should be. Either you succeed or you learn something. Win-Win. The biggest mistake you can make is doing nothing because you’re too scared to make a mistake. If you can’t handle failure, then you can’t handle success either.
7. You don’t have access to the right resources. – It’s not about having the right resources; it’s about exploiting the resources you do have access to. Stevie Wonder couldn’t see, so he exploited his sense of hearing into a passion for music, and he now has 25 Grammy Awards to prove it. Get it?
8. You need more money saved before you can take the first step. – You don’t need more money. You need a plan. You need a budget. Eliminate ALL the nonessential costs in your life. If pursuing your dream requires you to leave your day job, figure out the absolute minimum amount of income that you require to realistically live. Studying those who have succeeded with similar ventures also helps. But above all, take baby steps. Don’t be foolish and assume that you must have a certain amount of money saved right now, or that you must quit your day job today in order to pursue your dreams. Instead, ask yourself, “What actions can I take right now with the money and resources I have right now that will bring me closer to desired goal?”
9. You don’t need any help. It’s smarter to go after it alone. – You are the sum of the people you spend the most time with. If you hang with the wrong people, they will negatively affect you. But if you hang with the right people, you will be far more capable and powerful than you ever could have been alone. Find your tribe and work together to make a difference in all of your lives.
10. That sounds like a lot of hard work. – You’re darn right it does! But that doesn’t mean it’s not worth it. I think success in life hinges on one key point: Finding hard work you love doing. As long as you remain true to yourself and follow your own interests, values and dreams, you can find success through passion. Perhaps most importantly, you won’t wake up a few years from now working in a career field you despise, wondering “How the heck am I going to do this for the next 30 years?” So if you catch yourself working hard and loving every minute of it, don’t stop. You’re on to something big. Because hard work ain’t hard when you concentrate on your passions and dreams.

Disregard these misguided bits of nonsense and you’ll be well on your way to fulfilling your dreams.

Now get out there and make a splash!

Photo by: Gigi 62

Social Lending Arbitrage

Its been six months since I first introduced my Social Lending Arbitrage method to the mydollarplan community, and Madison has asked me to provide an update on where I stand with my method.

To summarize the idea, this method basically plays an arbitrage game similar to the no-interest credit card arbitrage popular on the site but with a slightly different twist in that I’m borrowing money at a lower interest rate and lending it out at a higher interest rate — and pocketing the difference.

Social Lending Arbitrage Numbers

I borrowed $10k from lenders at the Lending Club website at an interest rate of 7.78% and turned around and invested that capital (minus some service fees taken out by Lending Club as a part of the loan) to other borrowers with a higher risk profile than myself. It is a method wherein I profit off of varying appetites of risk. I have a higher risk appetite with this money than other lenders and as such, I make a return off borrowed money (Note that I have enough cash held in reserve from other sources that I am able to cover my loan should the social arbitrage world end tomorrow, so my sense of risk is appropriately higher than someone who does not have that).

Metrics as follows:

• Amount Borrowed: $10,000
• Interest Rate: 7.78% (Or $1,245 over 3 years)
• Total Fees: 1.25% (note that this has since gone up to 2.25%) (Or $125)
• Total Cost of Capital (3 yrs): $1,370 (13.70%)

Loans:

• Amount Loaned: $9,875 ($10,000 minus $125)
• Loans filled ($25 per loan): 395
• Est. Default Rate: 2.5% ($247 in total)
• Net Invested: $9,628
• Average Annualized Return: 14.69%
• Service Charge: 1%
• Net Return: 13.69%

Total Return of Invested Capital (3 yrs): $2,166 (22.5%)

Arbitrage Gain (3 yrs): $797

Social Lending Details

I personally choose all 395 loans, which I feel was incredibly time-consuming, but also ended up being to my benefit, as the default rate is lower than normal (outlined in more detail below). I have not decided whether I would go that route should I do this again in the future, since it was more time-consuming than I was ok with.

The beauty of this system is that I have isolated all transactions related to this set up to one bank account which is fully automated — I don’t touch it month over month. My only real work after initial set up was to determine whether my default rate is staying below my forecasted rate of 2.5% (which I update quarterly).

I am 1 year into this plan and thus far, of the 395 loans I have funded, I have had 2 default (one with 3 payments made in total, the other with 6), which translates into a 1.50% default rate (assuming I will have another 2 default per year through the remaining 2 years). This equates into more of a return than I had originally forecasted. Happy day!

While it is next to impossible to determine which loans could potentially default in the future, I was highly surprised that of the sheer number of loans I have funded, 10 have had any late payments, and of those, only 2 have defaulted. My thought behind this is that barring unforeseen financial hardships that could occur to my borrowers, I would expect those that have been paying so far to continue to do so through the end of the loan term.

Selling Riskier Loans

I have kept a close eye on the credit scores on all my loans with a lower than B rating (the riskier loans in my portfolio) to see if they are getting “riskier” than they were when I originally funded the loan. Should any fall substantially far below their original rating (something at this point I consider subjective from both a rating perspective as well as my own viewpoint), I plan on selling the debt to someone with a higher risk appetite than myself.

How to do so? Luckily for me (and others), Lending Club and Prosper have provided their members the ability to sell the debt they own to other members on a trading website Folio Investing. This adds a degree of flexibility to lenders in case they want to pull out on one or many loans. It effectively provides me the ability to increase my liquidity should I need it (although there is the potential I would lose my return or even my principal should I have to firesale the debt). In my mind, the more options I have for worst-case scenarios, the better I can exit this position and minimize my losses should the worst happen.

Social Lending Projections

Using the updated default rate, my new forecast calls for me to earn approximately $835 over 3 years. This assumes I do not reinvest the return I make on new loans (which at this point I am not doing), so theoretically this return could be higher than that should I choose to do that (which I am considering, but have not had the time to properly research new loans). The idea that by reinvesting, I compound my return makes this plan all the more enticing! Not only am I receiving free money, I begin to see an even greater return as the free-money snowball gets larger over time.

I must reiterate that this investing method is definitely not for everyone. Every investment has a level of risk and while I feel this is easy enough for myself to earn a small return, others may not like the inherent risks of investing in a new vehicle such as social lending is. This is a relatively new type of investment and while the intent behind the system is very noble, some may consider the relative ease of borrowers’ ability to game the system to be riskier than worthwhile. Others may consider the return in actual dollars to be too small for some people to consider – this may be more work than worthwhile. Again, its a personal decision.

For myself, free money is free money, and is completely passive income, which in my mind makes the process worthwhile. What kind of free money returns do you have?

Lending Club is giving a sign up bonus to try out social lending for free. If you haven’t taken advantage of it yet, you can try it out at: Lending Club $25 Sign Up Bonus.

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source: woodley wonderworks

My monthly column is up at Zen Family Habits, and I’m talking about back-to-school routines!

Has the new school year started for your family?

Whether it’s already back in session or you’re gearing up for it to start in the next few weeks, take some time to think through your family’s routines and schedules during the school year. Look for ways to connect more and get through “transition” times more efficiently to decrease stress for the whole family.

Here are some tips to help you get started, and they’re tips that apply whether your kids attend school or are homeschooled:

Evening Routines

To make your mornings smoother and easier on everyone in the family, try incorporating some of these tasks into your evening routine:

• Lay out clothes for the next day
• Make sure backpacks are ready to go by the door
• Pack lunches
• Review your schedule, to-do list and meal plan

Getting these things done the evening before – when there is no rush to get out the door – eliminates the stress associated with morning routines so you can start your day out more peacefully.

Read more at Zen Family Habits…

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