designed the patented made-in-America Invis-A-Rack, the most innovative cargo management system for pick-up trucks ever developed. This collapsible truck track can be unfolded in seconds to carry everything from kayaks, to ladders, to lumber. Since starting his business last September, Donny has grossed over $40,000 with no marketing, and Donny knows that’s just the tip of the iceberg. Fresh off his win for Best New Product of the Year for 2010 from Popular Mechanics, Donny and Invis-A-Rack are primed for their next move.

If you haven’t watched the show, what occurs is that the entrepreneur tries to get “the sharks” who are very wealthy investors to take a look at their product and go into business with them.  The sharks would not deal with Donny because he wanted to keep all production in America and they thought it would just be too costly to make and thus result in slimmer margins.

Right about now you are probably thinking things like “Go America” and “The Sharks are dicks” and that is easy to say but ask yourself this question:

• If you had two competing products next to each other on the shelf all things about the products are equal but one had a stamp that said Made in America would you pay more?

How much more? Is it is a whole number that would get you? or is it a percentage?

It is easy to just blurt out Yes, but if I had 2 toys and one had made in America on it but was $22 more than the Chinese version I don’t think I could pull the trigger that easily.  If the cost was another $2 or 3 bucks I might be able to.  What if the item was only $1 and the American version was $2? That is 100% difference but it is only a buck?

Thoughts? Would you pay more for a “certified” stamp that said Made in America?

Some people love to see how I am doing, some people hate that it doesn’t provide prospective as to whether I am increasing my net worth by $100 bucks this month or $10,000 since I am only sharing percentages.  I completely understand their annoyance, but isn’t this sharing better then no sharing at all?

Calculating my Net Worth

The assets I include are:

• My Cash Savings Accounts
• My 401(k)
• Random Non-Qualified Investments Accounts
• The Wife’s Roth IRA
• My favorite personal finance item, my small but Awesome Dividend Investment Portfolio
• Value of my House
• My Traditional IRA

The liabilities I include are:

• Law School Loans
• Mortgage

What is missing?

• Car loan  – Paid it off about 9 months ago
• Credit Card debt – Don’t  have any except a revolving AMEX account so no reason to put it up
• Checking Accounts – Always changing and moving kept low on purpose so no reason to track it
• Cars – Wife’s is leased and I don’t consider mine an asset

My Net Worth Growth

• From January 2, 2012 to February 1, 2012 my net worth has increased 7.64%
• Year to Date number is obviously same as above.
• From January 2011 to February 2012 my net worth has increased 85.97%

How did you do so far in 2012? Please share your links below!

Not necessarily.

Simply put, a home should not be viewed as an investment.  A home affords you a comfortable place to live, which is a necessity, but it should not be looked at as investment.  Consider how many homeowners in recent years have found themselves upside down in their mortgages for tens of thousands, if not hundreds of thousands, of dollars.  Ultimately, many of them just walk away from their homes, foregoing any money they have paid out thus far for mortgage payments.

If you are truly interested in real estate as an investment, consider buying investment properties.  Buy to let mortgages allow a landlord to invest in property and let it out to tenants.  If the investment works as it should, the landlord will make at least 125% more per month in rent than she pays out in mortgage payments.  Ideally, the property will continue to increase in value, giving the landlord more money in his pocket.  Yet, even if the property doesn’t rapidly appreciate, there are still many tax deductions such as the interest paid for the loan that the landlord can take to cut his tax liability.

When buying a primary residence, don’t delude yourself that it is an investment.  Buy what you can afford to comfortably pay each month.  If you later sell and make a profit, great, but don’t expect that.  If you seek to make money from real estate, look into owning property to rent and making a profit from that.  Rental properties are investments, not primary residences.

Guest Post by Melissa

In the post Jonathan warned that about a  change in how Sprint was applying a company discount as it relates to a family plan.  Specifically, it was reported that Sprint would be taking my 16% discount would only apply to the main account and not to the second line.  I quickly signed into my account and found:

Effective your February bill cycle, Family and Business Share monthly plan charges will be billed differently.  Discounts will only apply to the monthly recurring charge for the primary line.  Line 2 will be billed at the applicable Add-a-Phone rate and will not be discount eligible.

In reality this would only increase my bill by a couple bucks a month.  But it wasn’t the increase in my monthly bill that mattered to me.  What matter is that when your cellular provider materially changes its terms and conditions it provides an opportunity for you to leave your cellular provider without an early termination fee.  So I did what any good personal finance nut would do…I saw an opportunity to pounce!  This isn’t the first time I used a material change in my cell phone bill to my advantage.

Negotiating with Sprint For Savings

The Wife got her black berry bold one year ago this month, thus she has another year to go before she can upgrade to the iPhone she has been coveting recently.  However, I thought by threatening to leave I could  push forward her upgrade eligibility.  I calmly explained the situation to the very nice retentions specialist,

Me: Could I cancel that Account with no repercussions?

Sprint: Yes, but the change is only going to add a few dollars to your bill

Me: But this means I can get her an iPhone on your competitor with a reduced rated.  Can you push forward her date?

Sprint: She has a year left, there is nothing I can do.

Me: Can we push it forward 6 months as a sign of good faith to stay with the company.

Sprint: No.

Me: Can you hold while I call my wife to see if she wants me to port this number somewhere.

FAKE CALL THE WIFE

Me: You have to help me out here I am trying to keep my life as simple as possible, but she wants this phone.

Sprint: Hold on.

Sprint: Here is what I can do – I can’t touch your eligibility dates but I can provide an $80 credit to your account for signing up with another 2 year contract.

Me: Are you sure this won’t affect the money I get off when I get a new phone?

Sprint: Yes.

At this point I could just tell they pretty much called my bluff because I know (since I researched the hell out of this topic) I can’t get anywhere near the deal I have with Sprint, however, the offer has me interested.  I ask them to note my account of the offer and I would talk to The Wife.  When I told The Wife the conversation she knew it was the right call to stay with sprint and let the wants wait till January of next year.  I called them back a few days later and took my $80 to extend my contract.

Moral of the story: READ PERSONAL FINANCE BLOGS!

Whilst home insurance providers may offer unlimited cover for the contents of your home, limits will probably be specified for individual items. This limit could be as much as £15,000 on some home insurance policies but could be considerably less with cheap home insurance plans.

If you shop online to find cheap home insurance coverage, make sure that the limits stated in the home insurance policy documents are high enough to give you adequate cover for old antique furniture.

Which home insurance is best for antiques?

Reputable home insurance tends to cover damage to antique furniture in a wide variety of circumstances. Not only will theft and accidental damage be covered, damage caused by fire, smoke, earthquakes or even lightning could also be included in your home property and contents insurance.

Antiques can transform the feeling of your home. Dark woods such as mahogany and rosewood can establish a stately mood whilst lighter woods like pine can create a feeling of space and modernity. Walnut items often have a remarkable whorled grain that can create a stunning feature. Whichever wood you opt for, your antique piece should be covered by your home insurance.

Online auctions can be a great way to find unusual antique pieces. A variety of companies hold online auctions and this commercial enterprise continues to grow. In fact, one antique auction company turned over £30,000 in 2006 and by 2009 this figure had risen to £850,000. ¹

If the idea of an online auction appeals to you, bear in mind that antique pieces can appear differently on screen; it is especially difficult to get an accurate sense of the size of a piece when looking at a photograph. If you are thinking of making an online purchase try to arrange a viewing before the auction date.

There are also companies that offer online valuations so if you have a piece of antique furniture and aren’t sure how much it is worth you can easily find out and inform your home insurance provider if necessary.

If you decide to invest in a particularly expensive piece and are concerned that it may not be included in your home insurance cover, speak to your home insurance provider. They may be able to alter your home insurance policy to include this new addition to your home’s interior.

[1] – www.telegraph.co.uk/property/interiorsandshopping/antiques/7619240/Antiques-auctions-go-online.html

Guest Post Company Profile:

John Lewis Insurance offers a range of insurance services selected by the John Lewis Partnership. These include car, life, travel, wedding, event, pet and home insurance products.

For more information about John Lewis Home Insurance please visit the website here – www.johnlewis-insurance.com/homepage/home-insurance.html.

John Lewis Insurance is a trading name of John Lewis plc. John Lewis plc is an appointed representative of AXA Insurance UK plc which is authorised and regulated by the Financial Services Authority.

Terms, conditions, limitations, exclusions and eligibility criteria apply. A full copy of the policy wording and the insurance complaints procedure are available on request.

Of course, there are some bills you are always going to have to pay. For instance, you’ll need to pay your mortgage/rent, gas, electricity, water, phone, car, insurance and internet bills (give or take a couple, depending on your situation). Some of these are likely to be fixed or largely beyond your control due to contractual commitments, such as if you have to make a regular rent or car payment.

However, you can more than likely lower the cost of many of these bills, either by changing your habits so you use less energy or by taking action so you get better deals. One good example is your energy bill. Simple, small changes to the way you use energy can add up to big savings in the long run. Switching off lights when you are not in the room, having a thermostat that only comes on for a few hours a day and turning down the heating can all make a difference to your bills while having very little – if any – impact on your life.

Also, many journeys that we take in the car are short – often less than a couple of miles. These are distances that most people could easily walk, and so leaving the car at home for short journeys could certainly help you cut down on the amount you spend on gas. As an added bonus, reducing the amount you drive can also reduce your car insurance premiums, which can help you to save more money.

Another tip for keeping your household spending down is to shop around for the best deals. How many people can honestly say they compared a range of deals when looking for an energy company or an internet provider? Lots of people could save by switching their provider or, if that isn’t an option, asking your current provider about different deals might also benefit you. For instance, they might be able to bundle together your phone, internet and TV package into a smaller monthly payment.

Using comparison websites to find out about different deals for bills such as home insurance can also make a difference. As an example, many people overestimate the value of their possessions, which means they end up paying more than they need to for their contents insurance. Getting an accurate quote and comparing different policies online will help make sure you get a home insurance policy that is not just accurate and appropriate for your needs, but better value for money. The same principle applies for other types of insurance, such as car insurance.

Overall, while it might sometimes seem like there’s not much you can do to reduce your spending, there is actually quite a lot of action you can take to save money. Just a small amount of time and effort to review your habits and make changes could make a significant difference to your expenditure.

Where is Daniel Ruettiger Today?

I was reading the January Issue of Registered Rep Magazine when I came across the blotter titled, “Notre Lame”

According to the SEC, Ruettiger deceived investors into buying stock in Rudy Nutrition, his sports drink company meant to compete with Gatorade. Instead, Ruettiger used the company as a vehicle for a pump-and-dump scheme that occurred in 2008 and generated more than $11 million in profits.

The SEC claims the company gave investors false and misleading information about its activities in press releases, SEC filings and promotional materials. This included materials that claimed the company’s sports drink “Rudy” outperformed Gatorade and Powerade in taste tests, and outsold Gatorade. The participants also manipulated trading to artificially inflate the price of the company’s stock while selling unregistered shares to investors.

Ruettiger has agreed to settle with the SEC for $382,866, and other participants have agreed to final judgments also ordering disgorgement, prejudgment interest, and financial penalties.

OH NO RUDY SAY IT AIN’T SO!  It was hard for me to believe Rudy would be involved but it wasn’t too hard to find the official SEC Press Release,

The SEC alleges that investors were provided false and misleading statements about the company in press releases, SEC filings, and promotional materials. For example, a promotional mailer to potential investors falsely claimed that in “a major southwest test, Rudy outsold Gatorade 2 to 1!” A promotional e-mail falsely boasted that in “several blind taste tests, Rudy outperformed Gatorade and Powerade by 2:1.” Meanwhile, the scheme’s promoters engaged in manipulative trading to artificially inflate the price of Rudy Nutrition stock while selling unregistered shares to investors. The SEC suspended trading and later revoked registration of the stock in late 2008. Rudy Nutrition is no longer in business.

“Investors were lured into the scheme by Mr. Ruettiger’s well-known, feel-good story but found themselves in a situation that did not have a happy ending,” said Scott W. Friestad, Associate Director of the SEC’s Division of Enforcement. “The tall tales in this elaborate scheme included phony taste tests and other false information that was used to convince investors they were investing in something special.”

According to the SEC’s complaint, Ruettiger was the principal founder and namesake of a company called Rudy Beverage Inc. that he and a college friend ran out of South Bend, Ind. until October 2007, when Rocky Brandonisio became the company’s president and day-to-day business manager. He moved the company’s operations to Las Vegas, where he and Ruettiger live. Ruettiger remained CEO. During this time, the company struggled financially with few customers, few assets, and no profits.

The SEC alleges that Ruettiger and Brandonisio brought in an experienced penny stock promoter named Stephen DeCesare to orchestrate a public distribution of company stock in late 2007. Ruettiger knew DeCesare from previous business dealings, and they were neighbors in Las Vegas. Ruettiger and Brandonisio gave DeCesare sufficient control to turn Rudy Beverage into a publicly traded company. DeCesare became the primary organizer of the resulting pump-and-dump scheme

It sounds from the press release that Rudy had an alright company that was just hemorrhaging when someone said, “hey I know a away to raise money, lets go public.  Don’t worry a friend of mine knows a guy.”  ORRRR I am just trying to make 13 year old Evan feel a bit better.

How to Lose Your Shirt in Real Estate

During the housing boom, a popular method of real estate investing came about and showed up in books everywhere. This method focused on purchasing one house every single year for 10 years. Then, after the 10^th year, you should be earning enough income to quit your day job and “retire”. At the time, since property values were on the rise, not only did you have a cash flow from rent money, but you also had a large value of equity in your 10 homes.

Of course, when the housing market plummeted, this method of acquiring passive income put quite a few people into bankruptcy. They couldn’t afford to make the payments on their properties, and the houses themselves were worth much less than what they owed the bank. So, their only option was to give it all back to the bank, start with nothing all over again, and ruin their credit for the next 10 years. This plan of acquiring 10 houses in 10 years certainly did not benefit these investors.

 Why Is This Method So Dangerous?

Think about the year you bought your first house. You picked out the perfect home and were ready to sign the dotted line. “Ready to sign your life away?” joked the real estate agent. Most people understand that a house is one of the single largest investments a person makes, and it takes a long time to pay back the loan – sometimes even more than 30 years! For some, that joke has some truth.

Now imagine doing that 10 times in 10 years! You could easily owe the bank $1,000,000 once you acquire all of your properties. At that point, life could be great IF: (1) you have all of your houses rented out, (2) each of your properties has a positive cash flow, and (3) no large incidents happen (such as roof repair or a new water heater or maybe even mold removal). I don’t know about you, but that’s a ton of “ifs”!

Over the course of one year, you can almost guarantee that some of your properties will remain vacant, some of them will not have a positive cash flow, and I can promise you that incidents WILL happen. There will always be some sort of repair on your properties – big and small, and you’ll have to be ready financially to take care of them.

A Better Method When Investing in Real Estate

Rather than take on a massive debt-load with your properties, why not take a more safe approach? If you are diligent in paying down the mortgages and creating a positive cash-flow with your investments, you could acquire those 10 houses in 20 years without any outstanding loans! Yes, it takes a little longer, but wouldn’t you rather be completely debt-free rather than owing the bank 1 million bucks?!

The method is simple – pay off your house first. This can be done with an extra mortgage payment each month (yes, this will probably require some additional income, but that’s a topic for another article) and you could do it in less than 4 years (which is what my plan is).

Once that’s taken care of, you take on your first investment property and use the funds from your old mortgage payment and the cash-flow from your investment property to pay off the new loan. With the extra income, this can be done in less than 3 years. Then you take on the next property and do the same. Repeat these steps and you’ll soon have your 10 properties without one iota of debt. With no debt, you’ll have plenty of passive income rolling in.

Which method would you prefer? Please tell me that you’d agree to move slowly and invest in properties the non-debt way.

This is a guest post by Derek from Creating A Passive Income, a website that is dedicated to hunt out every possible passive income source there is. Be sure to check it out.

I should mention that all this spending was done on my American Express Premier Gold Card so it has to be paid off monthly (i.e. I incur no interest charges and I recently got my annual fee waived).

My Monthly Discretionary Expenses

While my sprint bill may not be discretionary, for the most part these expenditures are stuff I could cut down if I chose to:

Last month I almost had a panic attack when I ran these numbers and found out I spent over $5,400 (Probably closer to $4,400 after being paid back and rebates receives). This month’s $3,100 is still much too high for my tastes and it seems it comes from one main expenditure:

• FOOD
  

I eat out way too much and I don’t think our grocery shopping is particularly efficient.  I am going to try and work on this month to maybe bring down the bill below $3,000.  I think the easiest way is to reach this goal is to lower the amount we buy out but I think the most realistic would be to help The Wife with the grocery shopping.

Make Logical Decisions that YOU Believe are Best for YOU

There are some things that I do that some people think are extreme like buying whole life insurance on my child, but for the most part I follow a middle of the road approach in almost money decision in my life:

• I own index funds, but I invest in undervalued companies that pay dividends;
• I use a credit card, but only one credit card that I use;
• I have both a traditional IRA and a Roth IRA;
• I own term life insurance and whole life insurance;
• I don’t budget but I know my cash flow chart by heart

Regardless of the decision I make I usually have a logical and thought out decision for doing so; hell, I need one if I am going to write a post on it.  That being said I think this is what makes me and most people with somewhat control over their lives different. It annoys me when I speak to people, especially through this blog or other blogs, that have no idea why they are doing something.

They “believe” index funds are the best thing ever, but can’t handle a simple rebuttal OR if they believe that someone should have NO DEBT EVER but then make an exception for schooling without even asking if the person is majoring in a bullshit major that will never be able to pay back the loans.

I get there are no easy answers when it comes to personal finances or everyone would do the same exact thing, but you should at least know why you are doing something. Actually the question of why is starting to pick up steam in an area of social science known as Behavioral Economics.

While you might not know why your risk tolerance is a bit above an 87 year old grandma like mine without intense psychoanalysis, at least I can make a logical reasoning why I do certain things based on the knowledge that my risk tolerance is that low.

That type of knowledge is both inspiring and powerful. 

Are you a financial sheep?