Money and Personal Finance

Welcome Back to myself??

2011-07-06T13:04:00.003-04:00

It's been a while but I'm still here. I quickly found respect for those that post frequently and take the time to put thoughtful content each and every day blogging.

It's not easy work that is for sure.

I'm not sure how often or what I'll post in the coming weeks/months; hopefully not 3 years again :)

A lot has changed since my last post and I likely will convert this to a more personal blog than a pure personal finance.

Net Worth History

2008-07-04T11:57:00.000-04:00

Below is a screenshot showing my net worth for the since November 2007. This gives me a trend to look at to see if I am meeting my financial goals.

I'm happy to say that one month before turning 24 years old I now have a positive net worth excluding my retirement accounts. I plan on keeping it that way for the rest of my life.

Net Worth - June 2008

2008-07-04T11:27:00.003-04:00

Before getting started I wanted to say that first I have temporarily decided to use the same formatting as shown in My Money Blog. It is quick, simple, and to the point.
Not much going on during the month out of the ordinary.
If I get a chance during the month I'll be back to comment on this.

Note:(Click on the screenshot to enlarge)

Finding one's passion - Priceless

2008-06-01T11:24:00.004-04:00

Most times if you choose to do what you love or have a extreme passion for you won't make as much income as you could doing other jobs. Sure some are lucky to be able to be a professional athlete, musician, or big time actor and do just fine. But what if for example the corporate marketing director wants to become a painter for a living. Chances are unless they are already well known at least in the short run your income will take a hit if that person decided to change careers. Even in the long run most likely this person will not make as much as if they stayed in marketing. Also this doesn't even mention other non-income factors that you get with bigger companies such as group health insurance, 401k matching, etc. Chances are if your painting you won't see any of those.

I'm excited to say that my wife has hopefully found her "passion" but as with the marketing director to painter example our income will be taking a hit. A lot of people that probably know me think I'm upset about this due to the fact that we aren't bringing home as much pay. Before my wife made a decent amount of money and tips as well. Now she will be making about $8/hr with a work schedule that isn't always guaranteed along with no benefits. For the first time though she says she is excited to go to work every day and looks forward to it. The truth is I'm extremely happy for her. To me that is more important than if she makes $10-12 an hour doing something she fights through every day.

Just because I love to manage personal finance doesn't mean I need to obsess over making the most or spending the least amount. It is all about finding a mixture between income and expenses that work best to meet your goals. For instance with a drop in income now we might have to eat out once less during the month or downgrade our cable for the expanded package to the basic package.

Hopefully anyone that really knows for sure what their passion is and has the opportunity to do it goes for it. I know as you get older and responsibilities become greater it is harder to make the jump but you will be happier after you get past the financial impact.

Net Worth - May 2008

2008-06-01T11:09:00.003-04:00

Before getting started I wanted to say that first I have temporarily decided to use the same formatting as shown in My Money Blog. It is quick, simple, and to the point.

May was full of abnormal cash flow issues. In the positive news we got our stimulus check from the government for $1,200. But this was offset by numerous big outflows during May. New brakes and other car maintenance took $700 out of my bank this month. Also as mentioned earlier this month on one of my posts I made a payment on my student loan of $5,445 that was not scheduled to help bring down my debts. To cap it off I am now on course to take the CPA exam over the next 6 months. So a review course plus examination fees totaling about $2,700 were also paid during the month (Just as a side not I do expect to be reimbursed for the CPA fees by my employer when I finish and pass).

So by my count that is a net $7,645 decrease in cash flow. With all that mess taken care of hopefully things will go back to normal now.

I finally pulled the trigger

2008-05-05T19:19:00.002-04:00

For quite some time I debated to myself whether to pay off some of my student loan balance or to just pay the minimum and hoard cash like crazy to have a 20% down payment for a home.

While a lot of folks consider student loan debt "good debt" nothing will ensure me that my income or job is safe. With that in mind I'm taking sort of a hybrid style of dealing with the student loan.

I just paid over $5,000 against my student loan which leaves me a shade over $10k left. I have the cash savings to pay if off now should I wish but I still want to have a large amount of cash to put down on a home in the next year to year and a half. I don't know that I will get to a 20% down payment now but I still can have a decent chunk of change.

It still does feel sort of weird to pay 5 grand and still not even really be close to paying off the loan though. I wish I would of sought scholarships, grants, etc. harder so I would not of even had to deal with this. If I paid the minimum amount each month it would be paid off in Dec 2017. However assuming I don't put any other large payments against the loan I should have it paid off by June 2011.

Net Worth - April 2008

2008-05-05T19:13:00.003-04:00

Before getting started I wanted to say that first I have temporarly decided to use the same formatting as shown in My Money Blog. It is quick, simple, and to the point.

April was a fairly "normal" month cash flow wise. We did spend some of our vacation funds but our expenses weren't that bad as we increased our cash savings by almost 10%. By next month you can kiss the negative net worth worth goodbye when excluding retirement savings.

Giving back to your school

2008-04-23T14:43:00.003-04:00

I guess this is as much of a question as it is a post. I've been getting requests from both schools I attended and graduated from for donations. I still have student loans that I'm paying as a result of attending these institutions.

Should I still give back to the schools at this time?

Wait until I'm older and have the loans paid off?

The way I see it is if I have loans and am still paying those no way am I going to fork out more money to those schools. The time will come when I can be more generous and give back but now is not the time.

Things I'm thankful for

2008-04-23T14:11:00.002-04:00

Too much is made about the things you don't have in life. For example it is easy to say I wish I had a big house like Joe, a nice boat like Jim, or a rich grandfather that would send me massive amounts of money each year so I had nothing to worry about.

Instead of going on and on about the things I don't have I thought today I'd post some of the things I'm thankful for.

* I've got a good paying job that I enjoy at the moment. Sure I'm not making a ton by any means but overall if you look at most people I do ok. More important I don't dread the drive into work everyday and countdown the hours until I get to leave once I'm at work. The people I work with are enjoyable and easy to get along with which also makes it fun for me.

* I have family that supports and cares about us like none other. No neither has a fortune or is going to by us a mansion but they care very much about spending time with their family. I'm sure all families make mistakes at some point, and ours is not exempt from that either, but I appreciate their help and support that they offer even if their attitudes, believes, etc might be different than my own.

* While currently no kids are in our life we do have 2 dogs that make it pleasant to come home every evening. I have to admit it but I hated dogs my whole life until my wife and I moved into our townhouse and had a dog. I was then even more worried not but 1 month later another dog was brought in after it needed a home. Now though I can't imagine not having them running around the house. They also keep us sane when we are alone by ourselves.

* I have great determination. I feel blessed that I can be tough enough mentally to go through some of the things I have without too much trouble. I also might not be the smartest, prettiest, or charming guy but I do my best to get better every day and improve.

* That I have a car. I know some people that have to ride the bus to work or walk every day to just work and put food on the table. Sure my 92 Accord is not the best ride out on the streets but I am happy that it gets me from point a to point b without much trouble.

* That I have an education. While getting a degree does not ensure success it does give me opportunities I might not of had if I hadn't of went to school. On top of that I have a Masters degree so I do feel good about what I've accomplished thus far.

* Amazing wife. Right now she works more hours than I do, gets paid 1/2 as much, and still manages to keep things running at our place. I'm a pretty good helper around the house but I am very thankful that I have someone like her to live with everyday. Without her I'd be living at fast food joints and be taking clothes over to Mom's house. Ok maybe not that bad but still it would not be pretty. Maybe I should cut this part out and write it in a card or flowers.

This list is surely not all inclusive and I'm sure I'm leaving something/someone out.

Random Thoughts

2008-04-12T16:41:00.002-04:00

- My wife's company award party is tonight. We are planning on getting a hotel room with some other couples so that we don't have to take the chance with having too much to drink and being stuck driving home. While this is good decision making from a life standpoint from a financial standpoint it makes no sense. The party is only twenty minutes away from our townhouse so it's not like it's a long trip. Also if we both wanted to not worry about driving we could probably get a cab there and back for less than the hotel room is going to cost (Which another thing is going to be a Marriott hotel @ $200/night). We do save $200/mth for vacation type of expenses so in the end its not that big of a deal as it will come out of that. However something still irks me about it.

- So since Jan my wife and I have been working out regularly and trying to eat a much better balanced diet than the pizzas, tacos, and junk food we both like to eat. I'm happy to say I've lost over 15 lbs since then but man does it cost a fortune now in food every month. I even shop at Aldi for the basics and still spend over $400 on food every month for just the two of us. We don't eat out very often (Once or twice a month usually) and I buy Smart Ones or Healthy Choice lunches at $2 or less (Depending on what is on sale) instead of eating out. I guess the short term payments are going to be much higher when trying to have a healthy lifestyle. The long term reward should be a smaller risk for having health problems as I get older. Knowing how much healthcare is today I ought to just stop complaining and be happy.

- With about 20k in cash it is getting to that point where I really can feel the ability to perhaps purchase a home. My thoughts also sway back and forth though on if some of my cash should be used for other things. For instance, I still have almost $17k on a student loan from graduate school. In theory I could pay it all off and be debt free except for the auto lease my wife entered into 2 years ago. Then my head tells me that doing that would leave less cash for a down payment on a home. Anyways I'm not really sure and because I'm someone that has trouble making a definite decision who knows when I'll make my mind up.

What would you do if this was your life?

-$20k in cash
-$17k in student loans
- Hope to purchase a home for $115k-$140k
-Already contribute to get employer match at work and the full amount for a Roth ($5k/yr)

I'm not dead just sorting things out

2008-04-12T16:34:00.002-04:00

Hi to all readers that stop by still or happen to come about this site. I haven't been able to post frequently do to a couple things which aren't really important for everyone to know.

In the meantime I am figuring out what to do with this blog. It will remain in some format or another but after posting for at least 2 months with regularity I don't think I can continue to keep up the pace (I'm not quite sure how other bloggers seem to do it).

I'll probably slow down the pace of incoming posts but try to deliver better content. I don't really like to say this is a link I just read from xyz.com and leave a link. I'll still mention articles I come across that might be helpful to others but that is about it.

The rest will be mostly about my own financial stories and/or opinions.

So if you care, I'm still here but figuring out how I want to continue going forward.

Take care now,
Moneyandpf

Net Worth History - March 2008

2008-04-01T18:48:00.002-04:00

Before getting started I wanted to say that first I have temporarly decided to use the same formatting as shown in My Money Blog. It is quick, simple, and to the point.

March could be considered a "crazy month" from a cash flow perspective as many 1 time or periodic payments were made that thankfully came to a $2k surplus in cash. I had car insurance (6 months paid in advance), a vacation, tax refund (Large due to student interest deductions), and a nice babysitting income for the month that we normally don't have. It looks like by June I should be positive net worth excluding retirement if not sooner.

Out on Vacation this week

2008-03-22T08:27:00.001-04:00

I'll be out of town this coming week on vacation to SC.

Look for more posts starting next Sunday for when I return.

Earn $25 dollars for free by opening Orange Online Savings Account with ING Direct

2008-03-20T06:37:00.001-04:00

Thought today I would pass along this to all readers trying to setup an online savings account. Currently if you use one of the links below you can get a $25 bonus for free with a $250 deposit to a Orange Savings Account with ING Direct. The APY % is 3.10% as of this posting date and if you are keeping your savings at a local bank earning less than 1% shame on you. Make the switch now if not to ING than to another online savings bank that will let you earn some real money. Setting up is very very simple even for those of you who hate the internet.

Here are the requirements aka "fine print":

1. Bonuses are only paid for accounts that are opened with an initial deposit of at least $250

2. Initial deposit does not include bonus or gift funds

3. You must keep your initial deposit in the account for 30 days to keep the bonus.

Just click on one of the links below to start the process (This will take 5 minutes or less just make sure you have a check nearby to get bank information to link the accounts)

*Note make sure that at the top of the link there is no warning that says

"The link you’ve used to open a new Orange Savings Account has either expired, or has already been used. This is no longer a valid referral link."*

I will make sure I note which links have been used periodically and update the list with new links as they become available.

Get Great Coupons Online

2008-03-19T20:15:00.000-04:00

I'm sure many fellow readers might already know but for those of you who don't there are some great coupon sites out there that can get you some nice savings. These are free, reliable (With every one I've used thus far), and cover a lot of different stores. The key is to not spend all day searching the web when buying something so bookmark these sites for the next time you make an online purchase.

http://www.couponmountain.com/
http://www.fatwallet.com/
http://www.Dealcatcher.com
http://currentcodes.com/

Get paid Cash to Kill - Kwari

2008-03-19T15:15:00.000-04:00

When using the newsreel on my site I came across this possible money making opportunity. Online shooter game called "Kwari" lets players go head to head to win jackpots of cash. Already launched in Europe the idea is that you have to spend some money to make money.

Ammo costs $5 for 5,000 bullets and that is what the publisher keeps while the rest of the money for jackpots is funded by money spent on in-game goods such as weapons, health upgrades ,etc.

While US gambling laws can be strict Kwari is now approved in 37 states according to the article. The top earner thus far has won $32,610.81

I know a lot of people that spend countless hours gaming. Personally, I always down for a quick game but I suppose if you were a hardcore gamer this might interest some.

Here is a preview of the gameplay that I found. It looks a little rough graphics wise but hey your not playing this to see state of the art graphics.

5 Audit Flags for the IRS

2008-03-18T03:15:00.000-04:00

If any of these items apply to you they are often flagged by the IRS and have a more likely potential to be audited.

1. 6 figure salary

- Think about it would the IRS rather find out you didn't claim $200 babysitting income or go after the guy who bought a booming business and failed to pay taxes correctly. Simply put the IRS runs a business as well and you are more likely to find larger items on those who earn more.

2. Neatness

- I know if you are reading this blog you are probably filing your taxes online and not by paper and pen. Still if you do choose to go this route and fill it out the old fashion way you leave yourself more vunerable to being audited. Mistakes are easier to make by hand and forgetting to simply sign your name can leave to the tax man knocking on your door. While filing electronically doesn't mean your return is 100% accurate most will alert you if you have obvious errors.

3. Charitable Donations

- Before you claim small contributions without having documentation. Now however the IRS wants written documentation on all deductions claimed. Also if you give a extemely high proportion of your income, say more than 2%, you might be more likely to face an audit. Remember as well that if you give property to a charity and it is valued at more than $5,000 you need to have an appraisal done. While it is nice that you are so giving make sure you have all the proper documentation come tax time.

4. Unusually High Expenses

- Basically if you claim anything that doesn't pass the eyeball test if you were scanning over it you might face an audit. Most don't claim over $50k in medical bills so if this was you it might not be a bad idea to send copies of medical bills along with your return. This doesn't gaurantee anything but still might not be a bad idea if you had unusual expenses for the year that you are deducting.

5. Home office Deductions

- I always heard about this one in class where John Doe decides that 80% of his house if an office expense and tries to claim it on his return. Well be careful because it doesn't work this way. If you are claiming specifics be sure to have a log or organized receipts. If you child uses the computer you claim as an office expense that won't fly if your facing an audit. Your best bet is to close of that section of your home from others, most notably children, to ensure that it remains an office and not a play zone.

My Retirement Portfolio

2008-03-16T15:15:00.004-04:00

I think I have mentioned in earlier posts where I keep my investments but I thought I'd post a little more detail on it here in one post.

I have two accounts for retirement:

Roth IRA - Opened in 2005 with Vanguard while still in college. Now contribute the max per year ($5,000 for 2008) for myself.

401K - Eligible once I started my job last July although employer match will not begin until a year after I have been working. This account is run through Fidelity.

Before posting the details let me just say that some adjustments need to be made. When I first contributed to my 401k I picked some diversified funds that had higher fees and recently I have begun to contribute 100% of my 401k contributions to one fund. Despite having a financial background in college I still feel too often that I'm not sure what to do so that causes me to just sit and watch. So if you have any comments, ideas, suggestions, please leave them.

ROTH IRA

VFIFX - VANGUARD TARGET RETIREMENT FUND 2050 - 100% of contributions

I choose this fund for the low fees and because it adjusts automatically as I age into less stocks and more safer investments. Also I get exposure to international funds which is what I want. I guess the downside is I almost want to be 100% invested in stocks at my age but this fund has 10% of holdings in a bond index fund.

All info taken from Vanguard.com

Expense Ratio - .21%

Who Should Invest - Investors seeking long-term growth of capital and income, a broadly diversified of stocks and bonds that will gradually become more conservative, and investors seeking to retire between 2048 and 2053.

Who Should not Invest - Investors unwilling to accept significant fluctuations in share price, investors seeking significant current income, or investors expecting a guaranteed level of income upon retirement

401K
FID US EQ INDEX POOL - Currently 100% of my contributions are going into this. This was the best fund I could find with an extemely low expense ratio. This is actually per the website "A commingled pool of the Fidelity Group Trust for Employee Benefit Plans (not a mutual fund). Not exactly sure what that means other than I know there is no ticker symbol for it. This investment is built to match US stock returns so its downside is if our markets tank I suffer. Ideally I would be able to find another fund like this one that covers international stocks in the same manner.

All info taken from Fidelity.com
Expense Ratio - .10%

What it invests in - 90% of the pool's universe will be invested in securities of companies which compose the S&P 500 index. Its goal is to provide results that correspond to the total return performance of common stocks publicly traded in the United States.

Investments I still have kept but no longer contribute to:

FID Diversified Intl (FDIVX) - I liked this fund as I mentioned above to take care of my international exposure but the Expense Ratio is .93%. No thanks that is too much off the top for me.

FID Value Fund (FDVLX) - This fund tries to find domestic stocks that are undervalued and get nice earnings for the investor. Again an expense ratio of .70% made me steer away.

FID Real Estate Investment Portfolio (FRESX) - a .83% expense ratio plus the fact that it could be very volatile made me get out of this fund.

FID Utilities Fund (FIUIX) - As you can see my prior holdings were pretty well rounded from diversity standpoint but this had an expense ratio of .85%.

Overall here is my breakdown in all retirement funds (Keep in mind the top 2 will continue to take up more of the total over time because they are the only two I contribute to)

84% - VANGUARD TARGET RETIREMENT FUND 2050
8% - FID US EQ INDEX POOL
3.5% - FID Diversified Intl
3.3% - FID Value Fund
<1% - FID Real Estate Investment Portfolio
<1% - FID Utilities Fund

I think in another post I'll breakdown how much I have in Intl vs. Domestic, Stocks vs. Bonds, etc.

About Me

2008-03-15T15:07:00.008-04:00

I thought today I would post a little bit more about myself . I didn't want to take up a lot of room on the main page but I also thought I'd share my background with readers for those that are interested.

I know I always check the about me page to sites I go so without rambling on any further here it goes.

I graduated within the past year with my Masters degree. I decided to knock that out of the way right after I graduated with my undergraduate degree so I would be able to sit to take the CPA (Certified Public Accountant) exam. I had to wait 6 months before my employer would foot the bill to pay for the exam fee so I am now in the process of studying and completing the exam. Without going into my exact job I am an accountant but not working in the public sector.

With that being said I guess I have a thing for managing money especially my own. If I ever decide to leave accounting I'm most likely headed to become a personal finacial advisor. For now though I get my fix contributing to this blog.

So in conclusion do I have any knowledge on finanical topics? Yes, probably more than most Americans, but for sure not as much as some people. As always I'm learning everyday either through mistakes I have made or that others have made. I look forward to sharing with readers my views on personal finance topics as I work my way to becoming successful both in life and financially.

For those of you who hate reading by paragraph here is my stats in a nutshell:

* 20-25 yr old male
* Recently married
* No kids (None planned at least for a few years)
* Working on obtaining CPA certification
* First college graduate from either my side of my family
* Enjoys personal finance topics of all kinds
* Other interests include fantasy sports, sports, fitness, movies, music, and games.
If you want to know anything else it most likely should not be a problem just contact me or leave a comment.

52 Weeks 52 Topics Update

2008-03-15T14:52:00.003-04:00

For those of you who noticed you might have been wondering where this week's 52 weeks 52 topics post was.

Well your eyes did not fool you because I did not get the chance to post this week on a topic. I am finding it difficult to write a quality post given my personal and professional life. I would rather take the extra time and make sure readers get a good understanding than read a half done post.

I'm probably not going to be able to stick to posting once weekly about a topic. I'll keep all new posts under this label but it might take longer than a year for me to complete it all.

Thanks for understanding and I hope these do help people understand certain financial topics better.

-Moneyandpf

Anybody drop cable because of this...

2008-03-14T06:22:00.001-04:00

I'm not the most up to speed with websites, technology, and happenings but I just found this site where I can watch a lot of full length episodes for free. This includes all the shows I watch on a regular basis from 24, Prison Break, Friday Night Lights, and the Office. I even saw full length movies on the site to. Has any of you ditched cable because you can watch a lot of your favorite shows online. I know that the station websites have clips too but I didn't think they showed full length episodes and I was under the impression you had to buy a lot of things on Itunes.

For a personal finance standpoint I love these kind of sites. Eventually I think I'm going to get rid of cable all together. It costs over $50/mth to have cable plus we have a DVR with is an extra $10/mth. I believe eventually it will get to the point where I can just watch my shows on the internet. The only problem I have is I love to watch sports. But even for that I've found a different site where I can watch many of the games. Also as technology improves I can imagine most Americans will have a big screen tv hooked up to the internet and essentially you will just be watching your computer on a Tv instead of a monitor.

Have any of you gone strictly to the internet for shows/tv?

Here is a clip just to start the day off with a laugh.

6 Simple Rules for Retirement - If you want a wealthy one

2008-03-13T06:34:00.001-04:00

Came across an article that lists 6 rules for retiring wealthy. It mentions that 401k are the way we have to save for retirement these days and that a trend is developing where employers are automatically enrolling employees in it as a way to force savings. Of course you can always opt out but this takes care of things for the extremely lazy person. Here is the list along with my comments along the bottom.

1. Sign up
Nearly 95% of surveyed adults agreed that automatic 401(k) plans make saving for retirement easier, and 85% said they had started saving earlier as a result. Only 7% of those who had been automatically enrolled in a plan opted out. (If you are automatically enrolled in your company plan, you can get your money back without tax penalty if you back out within the first 90 days.) Although automatic 401(k) plans are a major step forward, they have a downside. Most employers set the initial deferral rate at 3% of salary, and many plans with automatic-escalation features top out at 6% of pay. That's well below the 15% of gross income (including employer matching contributions) that's generally recommended as a target for retirement savings. An early start on saving, coupled with the power of compounding, will work its magic over time. But if you're a late bloomer, don't despair. By starting now and increasing your contributions a little each year, you could still reach your goal.

2. Get help from the pros
If you are automatically enrolled in a 401(k) plan and you don't actively select an investment, your employer is now required to direct your contributions to an appropriate long-term investment, such as a target-date retirement fund, also known as a life-cycle fund. Buying shares of mutual funds when prices are low positions you for big gains when the market rebounds. And most employees benefit from matching contributions from their employers -- often 50 cents on the dollar up to the first 5% or 6% of pay. A guaranteed 50% return on your investment is better than any fund can promise. With regular contributions, most newly enrolled workers will see their account balances grow, even in a down market. Many employers now offer all workers access to personalized financial advice or all-in-one investment solutions, such as professionally managed accounts or target-date funds that invest in a diversified mix of stocks and bonds that grow more conservative as you near retirement. Researchers found that after five years, 81% of workers who picked their own investments would have accumulated higher balances -- about 2 percentage points more, on average -- if they had invested in a life-cycle fund instead.

3. Check your progress
Nationally, about 40% of employers offer investment-advisory services to employees.
Frazier and his wife, Ann, gathered all of their financial documents, including life insurance policies, Social Security statements and individual-retirement-account information, and met with a Principal adviser to review their entire financial picture.

4. Consider a Roth
Most retirement savings vehicles offer upfront tax deductions plus tax-deferred growth on investments. But when you withdraw your money in retirement, you'll owe taxes at your ordinary tax rate, not the lower capital-gains rate reserved for most other long-term investments. The Roth IRA -- and its new cousin, the Roth 401(k) -- operate on the opposite principle: You get no tax break on your contributions now, but all of your withdrawals, including all of your earnings, are tax-free once you are at least 59 years old and the account has been open for at least five years. Roth IRA contribution limits are the same as for a traditional IRA: $5,000 in 2008, plus an additional $1,000 in catch-up contributions for those 50 and older. But not everyone is eligible. To contribute to a Roth IRA this year, your income can't exceed $116,000 if you are single or $169,000 if you are married and filing jointly. Roth 401(k)s, however, have no income-eligibility limits. And now that Congress has made these plans permanent, more employers are starting to offer them. Younger workers, such as Chance Webre, are prime candidates for a Roth 401(k) because they will benefit from decades of tax-free growth. Webre, 21, a unit operator for Placid Refining in Port Allen, La., also wants to minimize paying taxes today, so he splits his contributions between a traditional 401(k) and a Roth 401(k). (That's OK as long as your total contributions to both don't exceed annual limits.)

5. Roll it over
One of the greatest benefits -- and biggest challenges -- of 401(k) plans is their portability. When you switch jobs, you have several choices of what to do with your retirement savings. You can leave the money with your former employer if you like the investment selections in the company plan. But in most cases, you're better off consolidating your savings in a rollover IRA, which gives you the greatest flexibility in choosing your investments, or in your new employer's 401(k), if it accepts transfers.
The worst option is to cash out your 401(k), which nearly half of all workers do, according to a 2005 study by Hewitt Associates. That's because you could lose as much as half of your account balance to taxes and penalties, as well as sacrifice all future tax-deferred growth on your savings.

6. Sell company stock
Employer stock presents a unique challenge to 401(k) participants and plan providers. Many employers use their stock to match contributions, but individual stocks can be much more volatile than mutual funds and don't fit easily into recommended asset-allocation models or target-date-fund portfolios. Thanks to the sweeping Pension Protection Act of 2006, employers must now allow workers to cash out their company stock within three years to diversify their 401(k) investments, and many employers now allow their employees to transfer out at any time.

1. This is the easy part for anybody even if you don't like investments or retirement. I'm enrolled and contributre 6% currently of my salary to our 401k plan. Our match is up to 5% of our salary so I put in slightly more that I get matched. More on why I don't fully contribute later.

2. Personally I don't have the skills or the time to put into finding out which stocks or sectors will beat the market. Beats me and if you can do it let me know how you accomplish that. The fact is a lot of mutual fund managers can't even beat the market over time and that is enough to tell me to invest in low cost index funds. Currently in my 401k I have a fund that is supposed to mirror the S&P 500 called Fidelity U.S. Equity Index Commingled Pool. It has the lowest fees offered by any of the investments and doesn't lock me into individual stocks. I am hoping that the economy stays down over the next few years so I can accumulate a lot of shares for less money. Then when it eventually rebounds I'll get some nice earnings.

3. I don't use any financial services to help me pick or evaluate my earnings. I check up every few months on my portfolio and then adjust if neccessary. Since I have all of my 401k in US stocks if another good fund comes available that has low fees I would look into investing more internationally.

4. I've been contributing to a Roth since I was 20 years old. Not to the max every year but still pretty good for a kid in college. I now contribute to the max for myself into a Roth. This is why I don't invest the max in my 401k. I probably could put even more away towards retirement (My wife could open a Roth as well and contribute to the max) but we are trying like crazy to save up for a house and need money for a downpayment. I did not mention this above in part 2 but my roth is totally invested in a life cycle fund that matches investments with my age. So currently basically 100% of my investment into that account is in different types of stock (Foreign, US, Large Cap, Small Cap, etc.). As I become older it shifts to more bonds and cash type securities that fluctuate less.

5. I'm in my first job so I have never had to roll over a 401k plan. When/if that times come I will probably transfer it to a traditional IRA for better investment selections. Under no circumstances will I cash out my 401k and absorbs extra taxes and penalties.

6. I have to be in the 401k plan a year to get matched by my employer so that starts soon (July). I believe have of what my employer matches goes into company stock but I don't remember off the top of my head. In any event you can bet I'll be moving that out and into a low cost index fund to avoid having a weighted portfolio towards just my companies stock. I feel bad for Enron employees that probably had no clue what was going to happen to them.

Before I eat that next meal....

2008-03-12T06:02:00.000-04:00

I was wondering today as I ate my leftovers how much it costs me on average to eat each meal of my day. I figured I eat 4 times a day on average (Morning, Lunch, Dinner and snack) which we would be a total of 1460 meals a year. Then I looked at how much I've spent on food over the past year. That total came to just about $5,000. Now before moving forward I must recognize that some of that money was spent on supplies such as trash bags, toilet paper, shaving cream, etc.

That amount is for two people which includes my wife and I. So that would mean each time I stuff my face (Or drink) on average I'm spending $1.71 ($5k/(1460 meals*2 persons). Of course I have nobody else to base that off of but that doesn't seem too bad considering I see lots of people every day go out to lunch at work and easily spend $5 or more.

So how do we watch our costs as far as spending on food goes:

1. Eat generic - Probably the most common theme you will ever hear on how to save money at the grocery store but its true and works. Not only do I eat generic when I can but I also shop at a place where generic's are even less than the huge grocers (More on this later).

2. Eat out less - As mentioned above I see co workers buying lunch every day in our cafe at work. Yes the food is pretty good and its reasonably priced. Still though for a decent meal it is at a minimum $3. I tend to pack except on Fridays where I join my coworkers for a meal either in the cafe or a local restaurant. I know that I could save even more if I avoided this but I feel it is important to maintain good working relationships as well as this can have a financial impact as well.

3. Shop at Aldi - I guess this would be my secret weapon. The store isin't big, doesn't have everything you would need, and doesn't take credit cards. But it does have the lowest prices around town in my opinion. Milk was $2.37/gallon, Plain cheerios $1.39/box, large eggs $1.79 just to give a few examples. The store is smaller and has less selections so you get in and out quicker. While I can't get everything I need there it is where I do the bulk of my shopping plus the other store is just across the street so its not out of the way to swing over there afterwards.

4. Shop for specials/deals - Every week I look at the flyer we get to see what will be on sale. I circle the special items and write them on a list for when I shop. This prevents me from buying items that are overpriced. It also helps that Aldi doesn't have coupons so I don't even have to worry about it when I go there.

In summary our food spending could probably go down another $500 or so easy with a little better judgement. We have been trying to purchase healthier foods though since the new year as we both are shedding pounds off so that can sometimes be difficult depending on the product you are purchasing.

How much does your average meal cost? I'm sure some of you get by on half of what I spend.

Making work fun

2008-03-10T05:47:00.001-04:00

For my Monday morning post I thought today would be a good time to go a tiny bit off track. In this article from Kiplinger the author gives 8 ways to make your job fun. While this is not a money article it is important that no matter what you are doing that you can enjoy it. That doesn't mean that there won't be bad days or boring moments but I would not recommend working a job just to collect a paycheck if you are not happy at all. Anyways on to the 8 reasons with small excerpts.

1. Have the right job. Nothing makes your work life more pleasant than having a good job: a moderate amount of moderately difficult work, a good boss and co-workers, reasonable pay and commute, and a place of employment you're proud to work for.

2. Don't fight work. Don't you know people whose most productive at-work activity is shopping online? Fact is, work is key to a meaningful life, even if you're just a payroll clerk whose job is to recount the beans counted by a co-bean counter.

3. Remember, a spoonful of sugar helps the medicine go down. Whatever task you're doing, ask yourself "What's the most fun way I could do this?"

4. Reward yourself. For example, why not promise yourself that if you finish that stupid task in 59 minutes or less, you'll give yourself ten minutes to flirt in the break room. That ticking clock can be fun to compete against.

5. Threaten yourself with punishment. This can be just the motivation you need to stay on task -- and keep things interesting.

6. Think of difficult problems as challenges rather than annoyances. That's more fun. And if you can't meet a challenge by yourself, find someone who'd be fun to solve it with.

7. Think of your work life as an endless series of choices. Even if you're a peon with a micromanaging boss, you are the emperor of your (admittedly small) dominion, with many choices: What do I wear today? Which task should I do first? Should I wear headphones? Should I make the report pretty or no-nonsense? Should I spend my break chatting with my honey or schmoozing with someone who might help me get a better job?

8. Consult this compendium: For a cornucopia of capers and other condiments to catalyze your colorless career, see Leslie Yerkes' book, Fun Works. But caution: continual cavorting can cause catastrophic calamity, culminating in career carrion. Curses.
(Excuse the alliteration ... I'm just having a little fun with my job.)

Now as always I'll give you my own thoughts on each section as this gives myself a nice self critique.

1. For right now this is the right job for me. Sure there are other jobs out there that I'm not sure if they would be better or not but if you ask me right now I like what I do and I am constantly learning so its all good here.
2. At times I feel like my job is viewed as not very important while other times I feel like someone that adds value to the company. I guess the thing I would tell myself is to focus on the things that bring value to the company and are important to them. I've been told before focus the most on the things that will get you fired if you don't do them. Everything else try to put off or distribute to others.
3. I constantly like to have fun while working and while it might sound stupid it works for me. For instance if I'm reviewing items on a spreadsheet I'll try and get say 50 lines done in a half hour and then work off that pace for the rest of the day. I don't try and rush things but just set mini goals that make me feel better throughout the day.
4. I also like to reward myself if I stay focused on the task at hand and work well for a lengthy period of time. For me I love to be on the internet reading about sports, music, fitness, and personal finance blogs. So if I work really hard I'll give myself a 5 minute break to read up on some stuff and to keep my mind from going crazy.
5. I don't really punish myself but if I feel like I've slacked a lot throughout the day I usually will make myself stay a little bit later to get some extra work in.
6. Again this really just means making your work more fun and not viewing it as a task or chore.
7. I like this line because really its all about handling the situation you have and making the best decisions possible in your role. Maybe that means dressing nice to work or picking up some extra training in your spare time to improve your on the job skills. I really do try to control my own situation given the constraints I face.
8. I'm a little lost on this one other than the author stating he is having fun doing his job.

Risky Types of Home Loans

2008-03-08T08:38:00.002-05:00

Scanning through the ConsumerReport.org website I came across this article that I think can be useful for a lot of people.

It talks about types of home loans and ones that they find potentially risky. Here were the types they listed and why they don't recommend them.

Interest-only mortgages. After 3, 5, or 10 years of paying only interest on your loan, monthly payments can jump 25 percent when principal is added to the bill. Because most of these mortgages have adjustable rates, you could get hit with a double whammy. If after 5 years the rate on your $200,000, 5 3/8 percent mortgage rises by 5 percentage points, for example, your payments, including principal, could double, from $896 to $1,871. With rates rising, it may be hard to find a cheaper loan or to sell. Because you haven’t paid down equity, you can end up owing the bank more than your home is worth if housing prices fall.

Option ARMs. These adjustable-rate loans let you make payments that may not cover interest, meaning your mortgage balance could balloon over time. “When the loan balance hits 110 percent or 115 percent of the original loan amount, you might find yourself on the bad end of a gamble,” says Keith Gumbinger, vice president of HSH Associates, a financial publisher in Pompton Plains, N.J. You’ll eventually have to pay down the loan, and payments might be unaffordable.

Piggyback loans. If you don’t have enough for a down payment, you can take out a loan that piggybacks your mortgage. But this could swamp you in debt, especially if the loan is adjustable. Many lenders also offer piggyback home-equity lines of credit, or home-equity loans with risky features such as interest-only payments. With both, payments can quickly become unaffordable and you could lose your home.

Bottom line. With today’s low interest rates, the best option for most buyers is still a 30-year fixed loan.