Step Away from the Mall

Blog for sale! Bidding starts at $600,000.

2012-02-23T05:03:00.002-05:00

Anyone catch Shark Tank recently? If you've never heard of it, it's one of the most ~~frustrating~~ inspiring shows on TV where regular folks like you and me pitch products to a bunch of one percenters in an attempt to sell or grow their bsiness. It's really cool with a lot of "why didn't I think of that" moments. Apparently one episode caught the attention of Entrepreneur.com because some guy selling a pretty cool wine balloon was offered $600,000 for his technology and turned it down.

First of all, the wine balloon (which he brilliantly calls the "wine balloon") is a pretty cool idea. I'm not sure of all the details and I'm no wine connoisseur but it helps save half bottles of wine. Apparently, most people don't finish every bottle of wine they open... who knew... haha. So this guy came up with a solution that combines a balloon, tube and pump. Simple. And brilliant!

So this guy goes on the show and is offered $600,000 for his balloon, tube and pump and says no! You have to respect the guy, but did he make the right decision? It certainly takes... well ... you know... to turn down that much cash for something at the start-up stage. Maybe he was drinking too many half bottles of wine for all of his demos...

But that got me thinking: What would Nick do?

Reasons to sell

Guarantied $600,000 (minus taxes) in my pocket.
This product is limited. The idea is great, for sure, but the concept is now out there and competition will be fierce. For some things, the first or flashiest remains the king of the ring for a long time (i.e., iPhone). In other cases, the first or even better product is the ultimate market loser (i.e., betamax v. VHS, CDs v. MP3s, etc. I'm sure there are more). $600,000 might be the best offer and it's a bird in the hand.
This money could mean a new beginning to your family. It can buy time - to spend with your family; to come up with your next idea; to put your family finances on solid ground; to make sure your kids will be able to afford college without debt some day - and the list goes on. The money might mean more to you than this product.
If you've invented this one product chances are you have some other great ones in you. This way of thinking can be applied in many different ways. No way this is your only idea. And now you know what it takes to make something happen.

Reasons to not sell

$600,000 is not "eff you" money. You know what I'm talking about, right? The amount of money that you need to have to run around telling all the jerks in the world to ... um... "jump in a lake." I have no idea how much that is, but I know when I see it. $600,000 is not enough.
It's your "baby." This is different from it being your "passion." Passions can be applied in different ways and be fulfilled. You only have one baby. Your passion might be wine, problem solving (or balloons, haha). But this product you worked nights and weekends to perfect is your baby. It's hard to let go of your baby. I get it.
Why would these "experts" offer to pay $600,000 unless they thought it would make them a ton more than that?

I'm sure there are more reasons on both sides, but that's enough to get me thinking. If you couldn't tell by the title of this post or the way I subconsciously telegraphed my opinion in the bullets: I'd sell. $600,000, even after taxes, is a lot of money.

And I could do a lot with that money. I'm thinking I would buy a nice little house, or a very little house, haha, with cash and then use my student loan funds that I've been earmarking for a larger down payment to ... wait for it ... actually pay off my student loans! Then I'd only have my sub prime mortgage and HELOC left, the latter of which I'm hoping will be gone in the near term anyhow. Sweet!

So anyone looking to buy a blog? Silent auction. Bidding starts at $600,000. E-mail all offers before April 21, 2012 to saftmblog (at) gmail (dot) com, haha!

What would you do? And what would you do with the money if you sold? You know it would be hard to turn down that cash, right?

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: ddpavumba / FreeDigitalPhotos.net

Gratuitous Self-Promotion: Festival of Frugality, Life Stages Edition

2012-02-22T14:07:00.000-05:00

When you have a chance, check out this edition of the Festival of Frugality, which includes my post on paying for college, over at Penniless Parenting.

Great job putting the carnival together Penny!

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: photostock / FreeDigitalPhotos.net

9 smart moves in a tough economy

2012-02-22T04:54:00.000-05:00

As my regular readers know, I like to find fault in others, haha. Just kidding, I only like to find fault in useless data (got some sweet hate mail in response to that post... seriously...) or even more useless data. I'm otherwise pretty supportive, especially of people who think! You don't have to agree with me (although it would make the world a better place). But if you show an ounce of thought and no sense of being a spoiled brat I'll still respect you for having an opinion, even if it's wrong... :)

But I love when people take control of their finances no matter what the world looks like around them. I'm not sure whether it takes brains or ... err... something lower...but following through with a plan while the news is telling you to stockpile guns and canned foods is something to respect.

For some cool examples of some bold moves made right when everyone else was panicking (see how I did that with the bold font for the word bold right there...) check out this slide show over at CNNMoney.com, which highlights nine people who took control over the last few years.

Let's dig in (link is to each page in the slide show):

Sold stock, paid off the house. This guy had $80,000 in company stock that he sold to pay off his mortgage. I know this took a lot of guts, but it is absolutely the right thing to do - even irresponsible not to, imo. Be really careful with company stock piling up. I would get it out as soon as you can and put it in index funds. Too much risk (you have both your income and your investments tied to one place - if it goes under you lose both your income and your nest egg, ya know..). Verdict: A+. I'd make this all...day...long (one reader will get that reference...(yes, I send subliminal messages to regular readers once I get to know you...creepy?))
Bought a condo in cash. Love it. I dream of a paid-off mortgage. I'm not a big fan of condos, but if you're going to do it, cash is king. Verdict: A-. Good move, but not a fan of condos.
Became a landlord. Not as bold because it's relatively conventional, but buying a place for a price that allows you to live for pennies a month or make a profit is pretty stylin' on one condition - that you could afford the total costs of the place if you lost the tenant. If it weren't your primary home, too, I wouldn't be as conservative. But the rent should be gravy, imo, not the entire meal... Verdict: A-. Not a fan of FHA loans, but it looks like he was conservative enough with the cash flow numbers. I love multi-families.
Tripled salary, maxed out savings. Hats off to finding a new job at triple your salary. Most people would just complain about their salary, right? The real brains come from maintaining a low standard of living and banking the difference. Why don't more people do this?!?!? Verdict: A+. Keep your costs down, OK?
Refinanced into a 15-year mortgage. For those of you unable to refinance have no idea how tempting it is to stick with a 30-year mortgage, especially with interest rates so low. These days a bunch of people are saving so much in interest that they end up paying less and shaving 5 or more years off of their mortgage. I'm all about the 15-year mortgage if at all possible. Verdict: A+. Took brains and ... something lower ... to make this move. It's the right move, imo.
Held onto my old Mustang. Doesn't sound very tough until you learn that it was a 2003 with 150,000 miles on it and the alternative was buying a Lexus CT Hybrid. Now, now, I know hybrids are better for the environment and all. This blog is not about politics. It's about money. The smart move was to stick with the clunker until he could better afford the hybrid. Don't worry, I'm sure he'll get one eventually. Verdict: A-. This was a very good move. I'd still sell the Mustang and buy a used Corolla or something, but can't fault the guy.
Resisted the urge to sell. This one's my favorite so far. Sometimes the best move you can make is to do nothing and stay the course. Remember, if you planned correctly, your strategy was based on a long history of performance, which included ups and downs. So selling when things were down would be the exact opposite of what you should do. (If, on the other hand, you picked a bunch of single stocks that you saw on some blowhard's late night cable TV show, you're on your own!) Verdict: A. Great non-move.
Focused on becoming debt free. Yay! These are getting good, right? It's hard to resist the urge to pile up cash when the world is going nuts. But if your job is pretty secure and you got some debt, aggressively paying it all off may be the best move for you. Imagine having no payments other than your monthly consumption... pretty cool. Verdict: A. Awesome move to take control.
Strengthened safety net. Oh man! The article was firing on all cylinders until they got to this guy. Even he started out great by plugging a few money leaks. But his second "smart move" was not very smart at all. It was luck, right? Sure it worked out, but the next time he gets a hunch he might not be that lucky. Plus, my guess is he wasn't buying at the low either, but it's not really clear. Verdict: C+. Sorry, but timing the market is not a good idea, even if it happens to work out once or twice. That's luck, not brains.

Am I too tough a grader? I'd say overall these folks made some pretty great moves.

What's the smartest thing you've done with money in the last few years? I'd say setting up auto-invest years ago and my "life insurance cash value" fund are the best moves I've made that were relatively new.

Incidentally, I've been aching to talk about my life insurance strategy and the rip-off whole life that I was being peddled for a while. Maybe I'll do that soon. I got a detailed quote from a whole life broker and almost puked on my shoes when she tried to convince me that I was irresponsible for buying term and investing the difference. She actually didn't believe me and called me a liar! Turns out I was lying. I was investing less than the difference and still doing better than her piece of junk policy... don't get me started....

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: digitalart / FreeDigitalPhotos.net

Oh, man, I can't even die right!

2012-02-21T05:24:00.000-05:00

Disclaimer: There's very little I do well. I'm pretty good at my top-secret day job. I'm a decent mathlete. I'm also very good at annoying people. But other than that, I'm a few pints short of a gallon (is that a saying? probably not, I make stuff up...).

Anyhow, up until recently I thought "dying" would be something I couldn't screw up. I mean, there's really only one result, right? Plus, I have way too much life insurance (enough that I sleep with one eye open sometimes...haha). I have also spoken with my wife about what to do if I die to take care of the family, etc. And I have written out some directions to help her get through the grief without having to worry about all the ministerial stuff, you know, passwords, things to pay, things not to pay (my student loans, which disappear), autopays, etc. Hmm... maybe I should have a "Nick won't be blogging anymore" post in the queue for her... OK, this is getting really creepy...

But then I saw a post over at Yahoo! finance about how to die the right way and I scored a paltry 25% complete. Wow! According to the post, there are 8 steps to dying right. Let me know how you score in the comments. I'll post my embarrassing stats right there in the list. Man, I need to get my butt in gear!

Write a will (put it in writing). Swing and a miss! I have a basic will drafted, but I need to finalize it and get it signed. I did one of those do-it-yourself wills online for my wife and me but got distracted. I should probably see a pro, but as they say, perfect is the enemy of good. I need to just get it freakin' done. Our biggest hang-up is who is going to raise our kids if we both die. (yes, that means either too many good choices or two few... I won't say which one...).
Consider life insurance (provide for basic needs). Done. My wife's going to be all set financially if I die. We got 30-year term policy that will set her and the kids up for house and college. Yep... like I mentioned... too much probably. But it was so damn cheap I figured I would err on the side of too much versus too little. Got 28 years to go on the term, too. I may re-price it this year though to see if I can drop the price more. It keeps getting cheaper.
Establish 3 critical end-of-life documents (delegate control). Fail. I have no durable power of attorney to manage my $$ and legal affairs. Same with release of information form to let the docs share my medical info. Same with advance directives like living will and health care proxy. All started with the will. None finished.
Avoid probate (pass it on with less mess). Fail, for the most part. If I die right now, probate is in the cards. Same with my wife. When we buy a house, we'll hold it to pass automatically upon death outside of probate. Our joint accounts already do that. But we each have property and accounts only in our names. They'll be a pain in the butt for sure, but because I own property with a buddy (and related accounts) we've kept a bunch of stuff separate in case all heck breaks loose with that property.
Set up trusts (transfer ownership). Ooohhh... fancy. Definitely need to do this at some point. Not sure it's really necessary now though... Bigger fish, IMO.
Divvy up your stuff. Get your grubby hands off my stuff! Ha! Seriously, I don't have much "stuff" but plan on giving it all away before I die. I'd rather see people enjoy it than hold onto it for no particular reason. If I die early, of course, my family will have to pick through my things and divvy it up themselves. Maybe I'll stick silly pics of myself around the house, just to creep them out. Too mean? I'm known for randomly sending goofy pics of me to my family (and coworkers during meetings). Just silly faces pervs! Imagine finding a drawer full of silly headshots... haha. I play a lot of pranks. Why should that stop when I die?
Plan your memorial (personalize your send-off) / prepay your funeral (plan, don't prepay). A bit creepy, but I've thought of this a few times (not prepay but preplan). I've "almost" joined Funerals.org a few times. I really should do this. I've also thought of recording one of those videos that says "if you're watching this, I'm either dead or you're a jerk for playing this when it clearly says 'don't view this unless Nick's dead' on it. If that's the case whoever is watching this is out of the will!" Anyone do this or see one of these? Creepy?
Choose burial or cremation. Burial. That was easy. I've always been intrigued by the burial v. cremation debate? Any cremationites (?) out there?

Ouch! I only nailed 2 out of 8 and one of those is choosing to be buried, not very impressive. A few others are in progress, but definitely incomplete. New goal: 6 months to be ready to die right - either get each of these done or choose not to do some of these after appropriate consideration by the end of August.

How'd you do? Anyone else creeped out about this stuff? What were your sticking points? There's really no excuse to stick your head in the sand and leave a mess if anything should happen to you.

Until next time, put your credit card down and slowly step away from the mall!
Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: ddpavumba / FreeDigitalPhotos.net

9 big money wasters

2012-02-20T04:52:00.019-05:00

Ahhhh... Perkstreet. How I remember you fondly, then not-so fondly during our little fling back in the day... I've been thinking about you lately. Sometimes I feel sad. Other times I think about what might have been had you not been so short-sighted in rejecting me. I mean, seriously, what the frankenberries went wrong?!? Or was it me? Well, according to you it was me (isn't that the opposite of letting someone down easily?). (In their defense, they apologized and some kids got a little closer to literacy as a result of the drama...)

But now, Perkstreet, you bring me a list of nine money wasters and how to avoid them. You know how much I love not wasting money. Why do you dangle such fine money-saving goodness in front of me? You know I have a weak spot for you...

Nevertheless, I know it's not Clint and Katy's fault that your left hand wasn't talking with your right hand and that you were so obsessed with some stupid algorithm that you denied someone who would have swiped that debit card and kept a pretty hefty balance running with you for the last year and a half... (I guess I'm still a little bitter, haha!).

Anyhow, let's start saving some money! What do Clint and Katy offer as 9 big money wasters to avoid? Let's dig in:

Neglected Rebates. I hate rebates. I have no idea why because I should be pretty diligent in turning them in. My wife's pretty good at it, so she definitely saves us with this one! Although because I bank with Bank of America, I often get annoyed even when rebate checks come in. What is it with banks and stupidity?!?!
Unclipped Coupons. I'm lukewarm on coupons lately. I believe in clipping "enough" coupons, but not to obsess over them. My wife generally spends a couple of hours doing the sale/circular/coupon tango and then I go shopping. This usually nets about $25 to $50 per hour for her time. We don't buy coupons or anything like that, although we live in a condo building with about 250 units and score a bunch of extra coupon books from fancy pants residents who are too good to save money! :)
Overlooked Tax Breaks. Hire a pro to do your taxes, OK? My bet is you save way more than you pay.
Spending With No Rewards. Again, lukewarm on this. If you can do it without "spending more" then go for it. But if you end up spending more than you normally would then don't worry about rewards. Pay cash, negotiate the price down and stick to a written budget.
Life Insurance Scams. Agree completely. Whole life is a waste of money. Get some term life insurance if anyone would be harmed financially should you die early OK? I may put a whole new page detailing what a freakin' ripoff I think whole life insurance is using actual numbers from a quote I received compared to my current plan. Getting at least 10 times your income for a 20 year term is dirt cheap (especially for healthy young people).
Extended Warranties. Ripoffs. Maybe auto warranties direct from the dealers are an exception to the "ripoff" allegation, but I still think they're a waste of money. If you couldn't afford to repair a car, just buy a cheaper car. (Same with TVs, etc.) That's my motto.
Late Fees on Bills. Dumb. Don't pay late. Set up auto-pay if you can't remember to pay everything. You'll play catch-up if you think they overcharged you, but at least you won't miss anything.
Wasted Food. This one's tough for me. I try and follow the Santa Clause method now (making a list, checking it twice...) when buying groceries. It helps.
Impulse Purchases. Haha! I hate impulse purchases. Try avoiding buying anything located within 10 feet of the cash register! Stores like to put impulse items right there, so you start filling up the cart while waiting in line. Oh, and stay out of freakin' malls where you have to walk by five Annie's Pretzels or Cinnabons to get back to your car... those suckers are dangerous!

Hmmm... What do you think? I'd say a pretty good list of things to avoid. Sorry for getting a little emotional at the beginning there... haha, no I'm not! It's my blog and I can cry if I want to! ;)

What's your biggest money waster? I'd have to say restaurants lately. We're pretty busy and with two kids sometimes we take the easy way out, although I've done a pretty good time of limiting my work lunch spending lately. It's definitely something I'm focused on this year.

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: scottchan / FreeDigitalPhotos.net

Who let the blogs out!?

2012-02-19T23:01:00.000-05:00

If you're anything like me trolling the blogosphere on a Sunday night, check out these posts from around the web. Each of them is some combo of fun, informative or inspiring! And one of them mentions Step Away from the Mall, which is also a way to get on my good side :)

Anyhow, here are a few good reads in no particular order:

10 ways I save money, over at American Debt Project (stepping away from the mall is a good one...).
Ever do something stupid with money? Laugh at yourself and others (including me in the comments) over at Budgets Are Sexy.
Unusual ways to get money fast, over at Cash Money Life (Looking for someplace to sell your hair? Emily has the link.).
Jana serves up a daily money shot over at ... wait for it ... "DailyMoneyShot." All her hard work paid off and she's officially a member of Yakezie (it's sort of a big deal for blogger folks like me). So congrats to Jana! As my Boston buddies would say, she's a wicked big shot! She also has very good taste in blogs, if I do say so myself... haha! (Yes, a roundup linking to another roundup...)
If you're looking to spend a few bucks and want to find a deal check out ModestMoney's post on finding the best bargains.
Ever wonder what it takes to blog for money? Check out MoneyInfant's intro to blogging for dollars!
If you don't have a retirement account yet here are two good steps. First, slap yourself for being so irresponsible! Then check out this post answering a few important FAQs on IRAs over at Money Smart Guides!
Finally, more on this in a future post, but don't tell me you can't save money for retirement, OK? Just. Don't.

That's enough for now. It's the first edition and will certainly grow as I start bookmarking more great posts throughout the week or so. Think you've been snubbed? You probably have... so take me to task in the comments.

Oh, and if any readers find absolutely must-read blog posts send them my way, so I can check them out. If I agree, maybe I'll include them in my next "Who let the blogs out" roundup!

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: renjith krishnan / FreeDigitalPhotos.net

Breaking News: Colleges think you should borrow for a degree!

2012-02-17T00:29:00.001-05:00

I'm not sure why, but apparently piece of junk studies and I have been strangely attracted to each other lately... This one comes courtesy of a post at MainStreet.com called "The Other Student Loan Problem: Too Little Debt." Apparently, "as college prices and average student loan debt rise, educators in some sectors of higher education report they're also seeing plenty of students...determined to avoid loans no matter what." Sounds like a good thing, right? Well, from the post:

What's surprising is this: Educators aren't sure that's always such a good thing.

Students who take extreme steps to avoid debt at all costs, they say, may get stuck with something much more financially damaging than moderate student loan debt. They may not wind up with a college degree.

Really? That's surprising? Obviously colleges want you to borrow money to pay for school! Also, bloggers say you should send them cold hard cash (paypal accepted). Wait, there's more:

What's the upside of borrowing? Federal data analyzed by Santiago's group and The Institute for Higher Education Policy (IHEP) in 2008 shows roughly 86% of students who borrow for college are able to attend full-time, compared to 70% of students who don't borrow. That matters because roughly 60% of full-time students receive a bachelor's degree within eight years, compared to 25% of part-time students.

Really? In case you're wondering, ^^ this quote ^^ is a bunch of crap. The first sentence may just be poorly worded because "are able to" is a pretty useless phrase. My guess is they meant 86% of full-time students borrow money versus 70% of part time students. The second sentence has nothing to do with student loans - it just compares full time versus part time students and concludes that full time students graduate at a higher rate within an eight-year time frame versus part time students. Is this revolutionary? I'd hope the ones who are full time get done faster... (Also isn't 8 years a bit long for a full-time student to get a 4-year degree?).

Then how the heck do they tie the two sentences together? My guess is the people who are smart and hardworking enough to pay for things they buy and work so they don't have to borrow are probably better off than Sallie "I'll sign anything" Student....

Also, if those stats are somehow true and related, it means 40% of full time students don't graduate! 40%! That's right - no bachelor's degree (maybe an associates, I guess...). So borrowing money probably wasn't a good idea for at least 40%! A bunch of loans but no degree leaves you in a bit of a jam, don't you think? Seems like a pretty big risk to me. If I told you to close your eyes and there's a 40% chance of me kicking you in the throat would you do it? I know I wouldn't...

I know... it's a bit "glass housey" for me to get up on a soap box and yell at you for taking out student loans. But that was a different Nick. No way I come out with over $100,000 in student loan debt today, even if it meant taking an extra year or so. So don't let some loony toon tie two unrelated figures together to convince you to go in a ton of debt to get a degree, ok?

What's with it with these piece of crap studies?

Anyone regret borrowing for school? I was lucky enough to come out of school with debt that, while enormous, was manageable. So I wouldn't say I regret it, but I definitely wouldn't do it again.

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: ddpavumba / FreeDigitalPhotos.net

A fun way to frame the "want" versus "need" debate

2012-02-16T05:07:00.002-05:00

Back in the day I talked about wants versus needs as part of our "best advice ever" series. Living in Hoboken, New Jersey and working in NYC I'm around my fair share of "fancy folks," which probably doesn't come as a surprise. So pretty much on a daily basis I hear something stupid like:

You can't send your kids to public schools! Really, why the eff is that? I went to public schools. "Why you so fancy? If the schools are too dangerous, move. If they're terrible, move. If you can't afford to move, how the heck will you afford private school fancy pants?!?! Don't get me started on private schools (too late... here I go...) Stop obsessing with private schools! First of all, they're not always better than public schools. Second, you can probably do more good for your kids after school and the weekends by actually parenting than a private school can do Monday through Friday from 7 to 3. So try reading a freakin' book with your kid after school instead of letting him play video games online and you... might... just... make... a... difference... (Don't get me started on parenting... (too late... here I go...) I'm not perfect for sure. But don't blame the poor teachers for your kids being brats! They have them a few hours a day and need to watch like 20 or 30 of them. You have them the rest of the time and only need to worry about yours!);
My kids need to go to "sleep away camp" in the summer. What else are they going to do? Um...... I don't know, read a freakin' book maybe! (See a theme?) It's funny, the first time I heard the phrase "sleep away camp" was in NYC and I had no idea what it was... When I wasn't in school I went to work with my parents and slept on a stainless steel shelf using a bag of potatoes as a pillow (seriously) or watched whatever channels would come in on a 13-inch TV using bunny ears.. Oooorrr... get this... I helped them work! And I turned out just fine, thank you very much. I'm sure your kids would survive without sleep away camp.

And my favorite, which I heard a while back in the office from someone who is probably too sexy for a renter when I mentioned that I'm looking to buy a simple house:

That's not fair to your kids! You need to get a nice house and should get the biggest house with the biggest mortgage you can possibly afford because you have a larger asset growing and your kids won't want to bring friends over if you don't have a nice house because they'll be embarrassed or made fun of. Wait, what?!?! Really!? Not fair?! To my KIDS!?!?! Where do I start? I only "need" a place for my family to be safe and call home. I'd like for it to be "nice" but there's no way my definition of "nice" is the same as yours fancy pants! And one more thing. If your kid is too embarrassed because your family lives in a regular freakin' house then you raised a brat! That's a parenting breakdown. Your kid didn't learn what's important. Geez...

Wow... this post got angry haha! Anyhow, it was precipitated by a Facebook status update I saw yesterday that got me heading down this path of anger.... specifically with respect to people's warped sense of wants versus needs. Anyhow, the status update seemed like a really fun perpective on the wants versus needs debate. So I figured I'd post it here because I thought it might make you think twice next time you're pulling out the ol' Amex to buy those shoes with the red soles (ladies... you know what I'm talking about...) or that new set of Clevelands (right guys?)!

If they don't sell it at Walmart you don't need it!

What do you think? It's not perfect but it makes a few good points and sticks in your brain a bit. (As you can tell by the name of this blog I like "silly" but "sticky" phrases that point you in the right direction.)

So:
You might need clothes, but you don't need Armani. You might need food, but you don't need Kobe steak. And along the same line of thinking, even though they don't actually sell them at Walmart, you might need a car (maybe not), but you don't need a Lexus.

It's not supposed to be perfect! You don't "need" freakin' video games, big screen TVs and things like that, which Walmart sells. And you need a place to live which Walmart doesn't sell (yet?).

So don't take it too technically and have some fun with it for what it is - a nice simple way to double check if you're being too fancy...

How about you?
How do you tell if you're wasting money by buying "too much" or "too fancy" of something, or just something you don't "need"? I'm pretty cheap, so my problem is I usually buy something to crappy and end up having to replace it too soon. I need to work on that...

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: David Castillo Dominici / FreeDigitalPhotos.net

Paying down debt

2012-02-15T16:15:00.002-05:00

This is a guest post:

The debate between debt management plans or do-it-yourself debt reduction is one that freezes even the most dedicated debt destructor. One frequent stumbling block is the fee for the non do-it-yourself plans, which is often a percentage of your monthly payments. Some companies, however, are funded by others or for whatever reason are low or no cost.

In any event, like with any financial plan, it is vital to read everything you can about what is involved. If you hire a company to assist you, it is also important to read every piece of literature about the particular company you plan to hire before you do so. Also, the effects of the specific plan or what you are planning on doing yourself on other parts of your finances are also important pre-plan information so you can make an informed decision about what's best for you. In short, the decision to put a plan in place, do-it-yourself or otherwise, is one that needs to be taken very seriously.

More importantly, any plan to pay down existing debt is only as good as the other side of the equation - stop debt from piling up. That involves a change in your personal habits from someone who buys stuff and then pays for it to someone who saves up and then buys stuff. After all, what good is paying off debt only to be neck-deep in a new pile of credit card debt two years later?

Changing your borrowing habits is an emotion process for many people. Sometimes people see use of credit, even with carrying balances and paying some interest on purchases, as a necessary part of running your finances. Others take the other extreme, arguing that any credit use is irresponsible and should be avoided. Perhaps somewhere in the middle is the correct answer.

At the end of the day, if you are drowning in a pile of debt, one thing appears clear: your plan probably is not working very well. Perhaps it is time to try something new. Paying down debt is likely only one part of an appropriate plan. Stopping the borrowing is equally important.

This was a guest post.

Until next time, put your credit card down and slowly step away from the mall!

Image: renjith krishnan / FreeDigitalPhotos.net

Gratuitous Self-Promotion: WiseBread Best Money Tips

2012-02-15T14:51:00.000-05:00

If you're ever looking for some great money reads, WiseBread's "Best Money Tip" Roundups are the place to go - featuring "Top 5 Articles" alongside other essential reading and news and events.

If you stop by today, you'll find my very own 10 ways to pay for college right now as one of the Top 5 Articles! Very cool stuff. I'm honored!

So thank you very much to WiseBread and go check it out along with the other really cool posts!

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: David Castillo Dominici / FreeDigitalPhotos.net

Are you too sexy for a renter?

2012-02-15T04:33:00.000-05:00

I'm sorry, but this has to be one of the dumbest surveys I've seen in a long time. I'm not even sure what to make of it, so I figured I would ask you the questions and see what you think. On the one hand, the survey seems to confirm the obvious. On the other hand, at least some of the "results" they cite don't seem to support the hypothesis. Anyhow, in the wake of St. Valentine's Day, let's explain.

According to this post over at CNNMoney.com, "When it comes to dating, home ownership can be the ultimate aphrodisiac." In other words, people prefer dating home owners than renters. (See what I mean about confirming the obvious?)

So if you're looking for a date, buying a home may be the solution. (Really? I'm thinking if I need to own a house in order to get a date, I might have some bigger issues... I'm pretty sure it's a dumb idea to buy a house solely to score dates... especially if you're broke.)

I don't know about you but I'd rather date someone who rents than someone who spent a couple hundred grand or more because she was lonely... Also, shouldn't it matter how old the person is or what stage their life is in? I mean, I'm not sure it matters for a 21 year old college student as much as a 58 year old guy, right?

Sure it makes sense generally. In the traditional sense, home ownership tells people that you're willing to settle down, make commitments, think about the future, have a relatively-stable financial picture (well, maybe not so much anymore), etc. etc.

But then the post starts talking about some "survey of 1,000 single people" and things start to fall apart. In support of their home owners are sexier than renters theory, they cite this:

In a survey of 1,000 single people, more than a third of women and 18% of men said they would much rather date a homeowner than a renter.

Let me focus on the ladies a bit here... "More than one third of women" usually means somewhere closer to 34% than 84%. So about one third of women would "much rather" date a homeowner. One third? Hardly justifies a conclusion that home ownership is the ultimate aphrodisiac, right?

By contrast only two percent "prefer" a renter. Big difference for sure. But that still leaves about 65% of people surveyed. Did they not care? Or would they just "rather" date a home owner instead of "much rather" date one? If they "don't care" then a house really isn't an aphrodisiac for most women... So who the heck knows what the "results" are or mean....

But there's more!
According to the post, people also don't like to date people with roommates or who live with their parents.

Biggest turn-ons?
Master baths, walk-in-closets, hardwood floors, outdoor decks and home theaters.

Irrelevant amenities?
Hot tubs.

Haha! I'm pretty sure I could have made all this crap up... But let's put it to the test. I'll give you my answers and reasons.

Feel free to do the same in the comments or on your own blog if you're a blogger. If you post it to your site, send me the link and I'll link it to the post.

Would you rather date a home owner? Renter? Or don't care? And why?

I'd rather date a responsible home owner than a renter just because of the "traditional" reasons. But I'm not sure a monster subprime mortgage and huge HELOC on rental property qualifies me as "sexy." Would make for some great pickup lines ending in "you should see my HELOC" I guess... would those work on you ladies?

Do you prefer to date someone with a roommate or who lives alone?

Alone, just so I don't have to worry about roommate drama I guess. Back in the day when I was part of "the scene" I really didn't care though (especially if her roommate was cool, cute or both...). Also, I'm pretty cheap so I'd like that she was into "saving money" by having a roommate, so it's a close call.

Would you date someone living with their parents?

Sure, why not? All things being equal I guess I'd prefer someone who didn't just because of privacy, supervision or boundary issues. But it's the same roommate preference - not strong - just a minor inconvenience I guess...

House turn-ons?

I'm simple. I don't really care, but if I could choose, I'd prefer a clean house, hardwood floors, good heat and a/c and at least a small yard. I don't care if I can walk into a closet or even if I had a "man cave." A place to set up a drum set and make some noise would be cool, too. Oh, and it must have a grotto....no, no grotto... (But remember, this is "real estate" in my neck of the woods.

Irrelevant amenities?

Swimming pools and hot tubs are definitely pointless for me (mostly because they're too much work and expensive for their worth to me). What else... hmmm... Pretty much everything else... granite counter tops, stainless appliances, wine cellars... I could go on and on.

***Of course this is all irrelevant as I'm married (sorry ladies! haha!). So I live with a home owner (who also rents - we each own rental property and rent where we live). She also has three roommates (including me and our 2 kids) and helps keep a nice home. (By "helps" keep I nice home, I mean does pretty much all of the work, but don't tell her I conceded that...don't worry, she doesn't read this blog.).***

What do you think ladies? Gents?

Would you rather date a home owner? Renter? Or don't care? And why?
Do you prefer to date someone with a roommate or who lives alone?
Would you date someone living with their parents?
House turn-ons (or must haves)?
Irrelevant amenities (or must not haves)?

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: Salvatore Vuono / FreeDigitalPhotos.net

Perspective, and introducing another new blogger.

2012-02-14T04:46:00.002-05:00

I check out a lot of blogs. In doing so, I see a lot of really cool blogs and some that just seem blah. My favorite blogs are ones where I can instantly "hear" the writer telling her story and feel her passion to learn, share or just have fun. Most of the time, those are established blogs where the author found a comfort zone over time.

But every once in a while I find a new blogger with a cool message or voice - something real. When I do, if there's something in particular that that resonates with me enough to share it with you, I like to point out the blog here with a link and explanation. Over the weekend I found one that really got me thinking about perspective.

You know when you're all panicky about whether you're saving enough or spending too much?
Well you might just be lost in the details, caught up in the daily grind or hysteria of emotions. When that happens to me, I hit pause for an hour or so and take an inventory of what I have and, importantly, what kind of shape I would be in if everything went wrong. Sometimes that's all I need to catch my breath. (And this is just numbers... add in the value of my personal relationships and that usually knocks me out of my funk!) I'm all about pedal to the medal when it comes to making and saving money, investing and paying down debt. But it's important to stop and take inventory every once in a while so I don't go nuts!

Take Below Her Means, for example. She's a new blogger who late last month posted a question to the world about her budget and short-term savings. "I'm stumped," she said. Now paraphrasing....

I'm told to save 10% of income. I take home $3,500 per month and put $5,000 per year in a Roth. I also pay $836 extra per month on my student loans. If I put another $10% into savings I'll only have $400 per month to spend. What would you do?

Back to quoting... "I know I need to be more frugal, as evidenced by my out-of-control spending" but am I saving enough or paying too much on my loans? Let me know.

In case you're wondering, this is her budget. Here's a pic.

You see any out-of-control spending? I think she's rocking it! Of course, I couldn't resist commenting (I am a commentaholic, so make sure you leave one every time you stop by. I'll respond to pretty much all of them, although sometimes it takes me a day or so to catch up.). Of course I left my standard "what would Nick do in that situation" answer based on the numbers I could figure out on the site.

But then I thought she needed a little perspective! Remember, we're talking about someone who takes home $3,500 per month. Out of the $3,500 she pays $836 extra to student loans, saves $417 for a Roth, another $250 for apartment savings (to buy housewares and stuff as needed) and still saves another $320.

That means she has $1,823 a month going into savings, retirement or extra debt payments. This is over half of her take-home pay! I'll ask again, anything out-of-control? Of course not!

She just needed some perspective.

Not including retirement accounts she had over $9,500 in savings. Sure it's not retirement money, but if all hell broke loose and she had no income she could cut her student loans down to the minimum, stop saving and investing and maintain her lifestyle for over five months. Not a lot of people can say that.

I know it's not her plan. (Her plan is to pound down on the debt and save up as much as possible.) But it's perspective. She's doing great. Don't be afraid to see how well you're doing. It's good confirmation that a plan is working!

Now go check out her blog, welcome her to the blogosphere and let her know how well she's doing.

Oh, and how's your plan working? Don't know? Maybe it's time for a little perspective.

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

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10 ways to pay for college right now!

2012-02-13T04:46:00.001-05:00

Does it drive anyone else nuts when someone says they "paid" for something when really they financed it? It's really not the same. You didn't pay, you promised to pay later, plus interest.

So if you're considering taking out a parent plus or some other loan to pay for your kid's college, please think very carefully about what you're getting into. You aren't "paying" for their school and haven't paid for their school until you pay off the loan (sorry, but it's true!). You did, of course, take some pressure off of them by taking on some of the costs. So don't get me wrong, it's admirable to want your kid to get through college student loan free, but I'd prefer you did it without going into debt, cool?

So what do you do if you or your kid is getting ready to head to college? Simple. Follow these ten steps from Forbes with great passion and you'll be in much better shape. Also make sure you're not buying a Rolls Royce when you only need a Honda, especially if you still come up a few bucks short, ok?

So what are the ten steps that Forbes says you should take? (I've mixed in some relevant thoughts from me and my Rolls Royce post, too.... Sorry, I can't help but give my two cents!)

Apply for financial aid. Thanks Captain Obvious! Seriously, do it. I was pleasantly surprised at how much grant money was out there (and had no idea how or why I qualified...).
Apply for national grants. You see a theme here? Apply for every national grant you can find. Ask everyone and anyone who will listen about available national grants. Call your guidance counselor. Ask colleges. Ask anyone. Just in case you don't know, "grant" generally means you don't have to pay the $$ back! Wahoo! This is HUGE.
Apply for local scholarships. Just like national grants, you should apply for as many scholarships as you can. Ask your priest, rabbi, teachers, guidance counselors, the college, local government reps and anyone else you can think of. I ended up scoring a few hundred bucks by filling out just one form in my town that was sent to a bunch of places. Not bad for about 10 minutes. I wish I filled out about a thousand more...
Cast a wide net. This is definitely worth the time. Applications are expensive for sure, but applying to less than 5 schools may end up costing you thousands of dollars in lost scholarships, grants or other valuable financial aid.
Bargain. Definitely, definitely bargain! Just think, you're bargaining with someone who is giving out someone else's money (usually the school's or the government's). As long as they're "in budget" they'll be fine. When I got my financial aid package from my first choice I called and asked if they could up my school grant. They did (I think they gave me an extra grand or so per semester. Not bad for a call, right? I also met with them and got more $$.). Call. Go in person. Go again if you must. Be polite but ask specifically what you can do to get more grant or scholarship and if there is any way they can up it - even just a little bit. They have wiggle room. It's a seductive dance...
Find an official benefactor. This is pretty cool. I didn't do this at all and didn't know it was very common. I knew about ROTC, but that's about it.
Look abroad. Another thing I didn't even think of. How cool would it be to get a top-notch education in Paris or Rome and save a ton of cash at the same time!? My guess is your resume would look pretty cool, too. This would definitely be on my to-do list if I were doing it all over again. Muy bien.
Live at home. I'm now pretty indifferent about this one. Living at home certainly could save you some cash, especially if it's the first two years before transferring to a "better" school. But there's something about getting a job (or two) on top of college and learn to pay bills, manage an apartment and play well with others. Also, cutting the cord is pretty important in my opinion. I won't be bad at you if you live at home to save money though. It's huge money sometimes.
Tax tricks. "The American Opportunity Tax Credit and the Lifetime Learning Credit are two excellent options." Cool. Take them if you got them!
Ask a guidance counselor. Believe it or not, they know what they're doing.

Well, that's all that Forbes has to say! What do you think? You know you wish you did all of this before you took out all of those student loans! I know I do.

I did only some of these and came out of undergrad (a five-year program) with about $35,000 (the rest of my mess was for grad school). You'd think I could have found another $7,000 per year by doing all of these and those in my list, right?

Anyone have other ways to score free money for school? How did you keep your costs down?

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

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Game on! Vote for me!

2012-02-12T13:53:00.000-05:00

Earlier this month I announced my entry into Free Money Finance's March Money Madness! Well, my game is up, so check out the post and make sure to vote for my post on how to slowly but surely become a millionaire.

All you need to do is leave a comment with the word "surely." Best of luck to my opponent, Master the Art of Saving, too!

Now go vote! :)

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: Stuart Miles / FreeDigitalPhotos.net

7 Secrets of Self-Made Multimillionaires

2012-02-10T05:27:00.001-05:00

I don't know about you but I'm a sucker for numbers, lists, secrets and becoming a multimillionaire. So when I stumbled upon Entrepreneur's seven secrets of self-made multimillionaires, I started giggling like a school girl... Surely, Entrepreneur must have some inside info on becoming a self-made multimillionaire, the only type of multimillionaire I have a chance of becoming (I don't play the lottery and won't have millions of dollars pass down from my parents (unless they win the lottery, which they play))...

Before we go into the list I see nothing wrong with wanting to become a multimillionaire, so don't get all 99% on me :) I don't care if you have two dollars or two billion dollars, a jerk is a jerk no matter how much money you got. I'm not a one percenter and don't occupy anything but a rented two bedroom condo in Hoboken, NJ. I'm also not very political (that is, until I become El Presidente in 2033 (after winning the November 2032 election). Haha! So just be nice to people and we can be friends no matter how much cash you have...

So what are the secrets? And what do I think?

Decide to Be a Multimillionaire. Done! Does that mean I'm 1/7 of the way there? Seriously though, a committed mindset is a powerful tool. Pretty odd that Mr. Cardone wrote "I am worth over $100,000,000!" Every day for years. But that's dedication (or delusion) for sure.
Get Rid of Poverty Thinking. Hey, he must know something I don't but I see nothing wrong with thinking to not waste money or food. I do like getting rid of the thinking that money is scarce. There's plenty of money out there people. And there's plenty to go around. Just because you accumulate millions doesn't mean it comes from someone else. There's more than one pie out there...
Treat it Like a Duty. Don't be motivated just by money but by something bigger - something bigger than you. I like it. Money for the sake of money is pointless (and won't work). So what are your reasons? I want to become a multimillionaire so we can travel, live by our rules (and the laws...), donate boat loads of cash to charities of our choosing (I actually have a dream of starting a charity involved in boating that starts with me donating a boat filled with cash... some day!).
Surround Yourself with Multimillionaires. Is there a club or something? Sign me up. You've all heard of the "you'll make within 20% of your 5 closest friends" theory, so this works with that, too. I do think you could learn great habits and get tons of great opportunities if you surround yourself with multimillionaires. Maybe I can wait tables at a multimillionaire club in NYC. If any of you know of one, let me know...
Work Like a Millionaire. I'm really terrible at this. I definitely need to get better. "The wealthy know time is more valuable than money itself, so they hire people for things they're not good at or aren't a productive use of their time, such as household chores." I'm way too cheap for this. I need to delegate more to free up time for me to make more cash and enjoy some time with the family.
Shift Focus from Spending to Investing. This one I got! 2/7 of the way there? You know that feeling when you win a bottle of wine at the local KofC raffle? Or the feeling when you find the dress you've been trying to find for months - and it's on sale! Or the feeling when box seats to Fenway Park land in your lap? Yeah, that's the feeling I get buying mutual funds, ETFs or other investments. I'm always thinking of ways to create cash flow... sad?
Create Multiple Flows of Income. Absolutely a must. I've been saying for years that way too much of my income comes from one gig. If I lose the gig I got little coming in, which is why I'm dedicated to growing at least two online sources of income this year. A few bucks have started trickling in here at SAFTM, but I'm still 99% reliant on my paycheck (and stocks I guess...) 3/7?

Hmmm.... seven secrets. I guess it's a bit different than other lists out there, like those by Dr. Tom Stanley (I read everything Dr. Stanley publishes... you should too).

What do you think? How many of these are you rockin?

Oh, and I hope I can count on your vote in 2032...

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

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My Debt. Progress and a plan.

2012-02-09T05:10:00.002-05:00

Sadly, I live on the wrong side of the tracks in Debtville. I have a monster subprime first mortgage at 6% (variable). I have a monster HELOC at 8.75% (fixed). And I have enough student loans to make Sallie Mae blush at 2.5% (fixed).

You'll also see from the student loan post that I initially set a goal to pay off the loan by 2011 through a combination of existing savings, selling crap and saving as much money as I could. That changed to saving enough to pay it off, but not actually paying it off. (I didn't do a separate update post because I did so many goals, spending, etc., updates and figured you'd seen enough, but I piled up enough cash to pay them off but haven't triggered the payment (yet).) Wahoo! Long story short, because we're thinking of buying a house, our plan was to put that money towards a bigger down payment and then address the student loan (Until recently the interest rate spread was pretty significant and because the house hunting was pretty active we thought it made sense. It's getting closer now, especially given our tax situation...).

You'll also know from recent posts, that I'm looking to grow my net worth faster than Jose Canseco in a testosterone factory (naturally of course - no juicing with my money). So one option would be to sell everything and start over with leftover cash. With how much I hate paying interest, you would think I would just pay it off, right?

Well because I own the investment property (and owe the mortgage and HELOC) jointly with a buddy who has been tackling some other, more pressing debt, I was a bit married to him with those loans and agreed to take a bit of a bullet so he could direct his excess cash towards other debts. I figured I knew (or should have known) that his money life would affect me when we bought the house. The drain on my cash flow for the "greater good" of him paying off more pressing debts I viewed as stupid tax. Don't get me wrong - I'm no saint. It's been stressful. But I signed up for it, so I really have no one to blame but myself (not even Wes Welker...).

Enter the progress and a plan. A few weeks ago I got a call from my buddy letting me know he was expecting to come into some significant bonuses over the next year and has cleaned up most of his other messes. He proposed a plan to pound down the HELOC using his extra cash (and me matching it) with a goal of getting rid of it and refinancing the first mortgage as his bonuses clear! If all goes according to plan, we should be able to get rid of the HELOC within 12-18 months. I agreed. Progress. And a plan.

In some ways, I'm counting some chickens here when I only have a nest of eggs for sure. But I thought it was worth mentioning here, as extinguishing the HELOC has been a goal for quite a while now. Plus, he was pretty sure the cash was coming in.

We've also kicked around the idea of selling the property. I've loaned a ton of money to the property in past years and we think the property could sell for enough to pay off the mortgage, HELOC and, most likely, me back. But if we pay off the HELOC and refi the first, the property should give us both some pretty nice cash flow (well, it would give only me the cash flow until I'm paid back the loan and then "us."). So the plan is to get rid of the HELOC and "stabilize" the property as much as possible with a better, fixed-rate first mortgage.

Part of me would love to get rid of the house, pay off the student loans and then be completely debt free (until, perhaps I get a house). For now, because I'm a bit married to my buddy with respect to the property, we're going with the "pound down refi plan."

What do you think? I figure these are a bunch of options:

Sell and forgive whatever part of the loan we are short?
Sell and have my buddy pay me back 1/2 of the loan (to make it "even")?
Go with the "pound down refi plan" as my buddy gets his bonuses in, leaving as much of my cash and investments alone pending our home purchase decision (this is what I chose)?
Do the HELOC tango with my buddy but follow the debt snowball in the process, paying off my student loans in a lump sum now, ignoring my house hunt, and then cash flow the HELOC as my buddy's bonuses come in?
Pay down the HELOC without regard to my buddy's half?

And many, many more for sure. What would you do?

Incidentally, anyone else get into a business / real estate investment with a family member or friend? How did it go? Let me tell you, it takes a LOT of patience and perspective to get through the roller coaster when things dip.

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: Salvatore Vuono / FreeDigitalPhotos.net

3 reasons why investors fail

2012-02-08T00:40:00.000-05:00

Is it odd that ever since my disappointment with the Super Bowl I've spoken nonstop about failure?!?! Maybe I need to go talk with someone... Anyhow, onto the post...

I've made some really stupid mistakes in my day, investing and just good-old-fashion stupidity. But I've done a decent job avoiding investing failures for a little while now. It took a lot of trial and error (READ: stupidity and losing money) to get there. In case you're wondering, some of my dumb investment mistakes are:

Penny stock investing (READ: Pump and Dump) (you probably should check out that oldie post - yeah... I was really, really dumb there);
Day trading (luckily got out before I got taken down);
Options trading (lost some nutso cash but had one big win offset most of my losses and got away before I got taken out); and
Buying stocks based on 30-second sound clips on TV investing shows (I quickly ran out of money to buy the next night's "must have" stock and had no idea when to sell the first ones!).

Which brings me to my list of 3 investment mistakes that cause a lot of heartache. If you can avoid these three blunders you'll likely sleep better at night and have some killer results!

Paying too much attention. How many times per day do you check the stock market? If it's more than one or two, you're probably starting to get into a danger zone. Daily or hourly swings in stocks are way too extreme and frequent for most investors to ignore. If you see your largest holding taking throughout the day and have no idea why it's way too easy to just hit sell.
Worrying about the price you paid. The price you paid for a stock or mutual fund should have very, very little to do with holding onto that stock. The only thing that really matters is where you think the price will go moving forward. If I told you that the stock you bought for $50 that is now selling at $20 would drop to $10 over the next month what would you do? Sell, of course! What numbers were you focused on when you made that decision? Right. $20 and $10. Once you learned that the stock was going to $10 you stopped basing your sell decision on the price you paid. Let's reverse it. What if you knew the stock was going to hit $100 by the end of the year? You'd hold or buy more, right? Same examples but change the purchase price to a buck. Same answers right (sell if it's at $20 going to $10 and buy or hold if it's at $20 going to $100)? So stop waiting to get back to even and start worrying about where you think the stock is actually going. (The one time when the purchase price matters is beyond the scope of this post, but it's called tax gain/loss harvesting, which involves selling losers when they're down at the end of a tax year to write off the loss against other gains. More on that in later posts.)
Buying stuff you don't understand. If you buy a stock based on some flash-mob investment rant on CNBC you're treading in dangerous water. First, you likely have no idea what you're buying or why. Second, you often have no idea when to sell. Third, the next day the same guru is going to have another "can't miss" stock that you're going to want to buy and eventually you're going to run out of money. Like I mentioned I fell into this trap a number of times. Ready? Quick, what's a mutual fund? What's a bond? What does PANL sell? GE? DNDN? To whom? How do they make money? If you don't know you should strongly consider not buying the stock. Why? If you don't understand what you're buying or why you'll have no idea when to sell and why and you'll end up making mistake number 2, above.

Got it? If you find yourself falling into any of these tree traps it's likely time to reconsider your plan. If I have money I'm looking to invest and don't need for five or more years, that cash goes directly into mutual funds or ETFs that tracks an index like the S&P 500 - then I take a nap or hang out with my wife and kids. This way I don't have to worry about whether some start-up's iPhone killer is actually going to hit the market, take market share, avoid labor disputes and keep costs down enough to survive.

What are your biggest investing Achilles heals?

Until next time, put your credit card down and slowly step away from the mall!

Image: Idea go / FreeDigitalPhotos.net

Learn from Gisele Bundchen's mistake. She's not just a spelling bee nightmare anymore...

2012-02-07T03:36:00.002-05:00

Before I get into the post, bear in mind that I'm cranky. :) What is it about sports? In the grand scheme of things whoever wins a particular game is meaningless, right? Then why does it hurt so much when my teams lose? Whyyyyyyyyy!?!?! How can something stupid that quarterback's wife says on the night of a big loss create so much discussion? And why am I falling into the trap of continuing the conversation? Because hopefully we all can learn from her mistake. I was so put off by the quote below that I just had to reschedule today's post for tomorrow and give Ms. Bundchen a piece of my mind...

Those of you who don't follow the NFL, the New England Patriots, like many teams, have a secret code - a set of rules you must follow or you'll be cut faster than a blindfolded man in a knife fight. Rule number one is you keep all team secrets until you die. Rule number two is anything having anything to do with the team is a secret.

Over the last two weeks, the code was broken. First, Rob Gronkowski's dad blew a secret about the extent of his injury - twice, although the second one might have been trying to make up for the first. Then, after watching her husband and his teammates blow a game they easily could have won, Gisele Bundchen was caught on camera trashing the Patriots' receivers for dropping balls when the game was on the line.

As a Patriots fan, count me as voting for Gisele and Rob Gronkowski's dad to be sent to a deserted island for two weeks if the Patriots make the Super Bowl next year. Mr. Gronkowski might second that vote...haha!

Seriously, truer words have never been spoken:

You've to catch the ball when you're supposed to catch the ball. My husband cannot [bleeping] control (or throw?) the ball and catch the ball at the same time. I can't believe they dropped the ball so many times.

If you're interested in checking it out, here's the video (her outburst starts about 15 seconds in). If a ball hits you in the hands you're supposed to catch it. And the quarterback doesn't catch. I get it. But what the heck were you thinking Mrs. Brady!?!?! You obviously haven't read up on the Patriots' code or read Step Away from the Mall lately because none of my readers would ever be caught on camera speaking those truths (not to mention the potty mouth...).

But what was Gisele thinking? Does she really believe the receivers are to blame for the loss? Or was she just trying to defend Tommy Boy's good name?

Either way, it's ugly, should never have been said. After all, we're all about taking control of our lives and money - not blaming others for our "messes or successes." Don't let me catch you doing the same thing. Even if someone else actually performed the screw-up, most likely you could have done something differently or better to have helped avoid that screw-up. You could have reviewed the work, spent more time, trained more/better, lead better, etc. I know that's how it works in my world, for sure.

What's your take? Overblown emotion or indicative of deeper issues? I'm torn. But even if it's truly overblown, playing the blame game is ugly. This woman is a super-duper-model, but watching her react like this is just ugly.

Next time you're thinking of blaming someone else remember the pic at the top of this post and the cliche attributed to the noted philosopher "Anonymous" that whenever one finger is pointing at someone else three more are pointed right back at you.

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

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You messed up. Now what? How to bounce back.

2012-02-06T04:00:00.000-05:00

Two times in the last four years I've had a pit in my stomach after watching my New England Patriots hand the New "York" Giants a Super Bowl victory. It's the ultimate sports fail. The biggest game. The biggest stage. The most pressure. Facing all the Giants (and even Jets) fans in the office today is not going to be fun.

So how do you bounce back from such a failure? The secret is found found, in a very simplistic sense, in noted philosophers Chumbawumba's 1997 dissertation on recovering from failure.

It's really simple. It's a combination of sticking with your plan and rule three in my "how to hit your target" post, calling for monthly reassessment and moving forward with a new and improved plan. Also, it usually takes 3 to 4 months for any plan to take shape, so make sure you don't beat up on yourself. Briefly look back at what went wrong and then fix whatever you can for month two. Wash, rinse, repeat for months 3, 4, 5, etc.

When I swing and miss, even in month one, I go in a bit of detail to figure out what went wrong before writing out the next month's plan. Also, if you didn't write out your plan (the "how" you were going to hit your target in month one) it's time to write it out for month two.

It's the only way that's worked for me. The key is to do all of this with brutal honesty so you can figure out what went wrong.

If your plan was just unrealistic, that's OK, too. I have a habit of making aggressive (some may say unrealistic) goals. If I'm falling short on one I don't feel too bad as long as I'm moving aggressively in the right direction. If you look back at January and you did everything you could think of and still fall short, maybe you just aim for $1,000 per month for the remaining $17,000.

But if you look back at January and can identify one, two or more leaks that cost you $500 then look forward to February with a new, aggressive plan. Item one is to plug those leaks. This is important. Plugging those specific leaks is what makes the plan new and improved, and what will make it work better.

But now you have $500 to make up, right? Right. But not in February. The natural tendency is to make it up right away. Bad idea. If you missed in January, trying to up the ante the next month is not a good idea. It's like someone who drops 200 lbs of weight on their chest trying to bench press asking their spotter to put another 50 lbs on for their next attempt. Doesn't make any sense, right? So maybe you just stick with the $1,000 you were able to do in January. You can make up that $500 in March, April and/or May. (I like to aim to make up the month one pitfall by the midpoint of the plan.)

Bottom line:
It stinks to fail. But we all do it. That's one reason why we break goals into small chunks. If your plan is for one month that's all you screwed up. You didn't screw up your whole plan. You were always expecting to do a new plan for month two. You got knocked down, but now get up again.

This is exactly what I'm doing with my 2012 goals. And in once sentence, I reassessed and developed a new plan for February to get me back on track. "If I'm going to hit 130 that means I have to exercise 12 times per month on average from here on out." So February I'm targeting 12 trips to the gym. I'll let you know how it goes.

How are your 2012 goals going? Any failures? What's the new plan?

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: renjith krishnan / FreeDigitalPhotos.net

Dividends, uh yeah... What are they good for?

2012-02-04T19:48:00.001-05:00

Making lot's of money, Uh-Huuuuuhhhh. (sing it with me) Here's the melody... Dividends, uh yeah... What are they good for? Making lot's of money! Say it again!

Ok. Enough singing....

I've been doing a lot of posts about investing lately, including how not to invest and how to slowly but surely build up a million-dollar nest egg. Well, obviously my life is not as exciting as it used to be because my Saturday evening is consisting of checking out personal finance blogs and getting ready to go grocery shopping while my wife gives the kids their "tubbies..." I know... yeerrrrr jealoussss....

Anyhow, in case any of you are "as cool as me" this Saturday night or are waking up on Super Bowl Sunday and just jonesing for some added ammo on "investing the right way," check out my friend Barb Friedberg's post walking you through investing with dividends and why reinvesting dividends is a great way to build up some good dough. I couldn'y have said it better myself... even if I used my "sexy voice." So check it out!

I have all my accounts set up to auto-reinvest dividends with one exception. I always own 10-25 shares of Disney stock directly with the company to use as gifts to kids in our extended family. (In order to get those "pretty" stock certificates I need to have Disney hold the shares and then they'll issue certificates for free. Apparently I didn't have a dividend reinvestment program active with them because I just got a $6.00 dividend check in the mail. I'll have to activate it, assuming it's available - I'm sure it is.)

In case you're wondering, setting up to automatically reinvest dividends is usually pretty easy. I have most of my investments in TD Ameritrade accounts. I literally just sent a message on the "contact us" page saying "please enroll all eligible holdings in your DRIP plan." (DRIP stands for Dividend Re-Investment Plan). Feel free to use "drip" if you want to sound ~~cool~~ geeky... They wrote back about 3 hours later saying "all set."

Anyhow, get reading and then go have some fun tonight! I'll be partying vicariously through you.

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: sheelamohan / FreeDigitalPhotos.net

Money Leaks Update

2012-02-03T15:20:00.002-05:00

Back in December I announced that I was going to save $1,800 in 2012 by fixing only 3 money leaks. Here's a quick update on how that's going. I'm going to try and identify a few more to save some more cash!

Memberships. Cancelled the $200 annual that same day. No regrets so far. Still need to find another $300 per month though.
Lunch. The goal was to "save at least $1,000 per year." I really didn't know how much I was spending, but my estimate was around $2,000 per year. The goal is to spend less than $1,000 out of pocket for work lunches. This leaves me room for about 2 lunches per week. I think it's easily doable. Including today's lunch I'm at $72.73. So far so good.
Gym reimbursement. Filled out the form and will stop by to pick up the info from my gym tomorrow. Wife is just getting back to the gym as of this week (after giving birth) so we're on our way to this. Good stuff.

Verdict: Good, not great results. Need to identify $300 more in memberships and get that gym reimbursement in. Lunch is going great though, considering where I came from. Thanks for helping me stay motivated and accountable!

How about you? Plug those leaks!

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: cooldesign / FreeDigitalPhotos.net

How NOT to invest

2012-02-03T04:07:00.019-05:00

Assume you have $50,000 in investments and can beat the market by 2%. Remember, the Dow Jones Industrial Average has returned about 9.4% over the last 20 years. So let's assume this year it will do the same (it won't... it will be higher or lower but the average is a useful metric). You could do nothing but stick that 50 grand in a DJIA index fund, reinvesting the dividend and make $4,700. Or you could spend whatever time reading, writing, watching, etc., get an 11.4% return and make $5,700. All that work for $1,000 in a year. And that's assuming a good-sized portfolio of $50,000. If your portfolio is less than that you would make even less... Now assuming it took you just four extra hours per week to get that extra 2%, that's 208 hours in a year! Congratulations, you just made $4.80 per hour... You could make more than $1,000 in a month delivering pizzas.

Now think of it in this context: I'm reading CNBC.com the other day and a pretty interesting article caught my attention. The title? Stocks Form 'Golden Cross' With Today's Market Close. The point of the article was this:

Stocks formed the much-heralded "golden cross" on Tuesday, but traders waited until the market's [sic] actually closed before confirming it.

The so-called golden cross — which occurs when the [] 50-day moving average of the S&P 500 rises above the 200-day moving average—is considered a long-term bullish signal.

On Tuesday, the “cross” was formed just after the opening bell and managed to survive even though the S&P closed a fraction lower.

The [] 50-day moving average closed at 1257.79, just above the 200-day average of 1257.19.

Birinyi Associates analyst Kevin Pleines said his analysis shows that when the 50-day crossed the 200-day in the 26 instances since 1962, the market was higher six months later 81 percent of the time.

Still awake? Oh oh... WAKE UP!!! Great. Welcome back.

I'll never claim to know everything about anything but a golden cross?  Seriously? Who invests like this?  Please, PLEASE don't let it be you. Let me tell you something: I understand that having the 50-day moving average (which shows the trend of stocks over the last 50 days) higher than the 200-day moving average (which shows the trend of stocks over a longer 200-day time frame) means that momentum of the stock market is positive. (It's telling you that the market was stronger over the last 50 days, basically, and suggests that the path of least resistance is UP...)

But if you base your investment decisions on some nutso technical indicator like this you're asking for trouble. You hear about "head and shoulders," "reverse head and shoulders," "cup and handle," or "wedge pattern." Yes, those are actual technical indicators that people follow. Interesting, but nothing to go "all in" over....

Next thing you know you'll be running for the hills because some plaid sombrero told you the market's going to plunge and then go all in because a purple dinosaur tells you to get back in QUICK!

So just stop. I'm convinced that the less investment TV or articles you read (except for this one, of course...) the better you'll be at investing. In the interest of full disclosure, I do own a few individual stocks but they're a very small part of my portfolio and I've been phasing them out for a while now. If all goes according to plan they'll be phased out completely by the end of the year.

But the vast majority of my investment portfolio sits in mutual funds and ETFs, most of which are in the "index fund" variety. And let me tell you, it cuts out at least 80% of the time I used to spend watching TV and reading up on what was happening in the market or a particular industry or stock. I felt I needed to know more to make sure my portfolio held up. Now I don't even log into my investment accounts at work. I check them once in a while on my phone in between meetings and usually at the end of the day.

But the big benefit to ignoring pink elephants and discount double checks is not doing stupid things like shorting Netflix when it was at 75 and all the "news" said they were screwed. Don't believe me, check out the stock today. I haven't checked in a while but I'll bet it's well over $100. I guaranty you a bunch of people are going to lose their shirts buying Facebook the day it starts trading on the open market for the same reason.

I've said it before and I'll say it again: Unless you have buckets of money in the market (like millions, really) even a 1-2% better return than the market (which is really hard to do on a regular basis) is probably not going to be worth the extra time spent researching, reading and worrying. I would rather spend that time with my family or making more money.

Think about it this way: Look at your investment account balance. Assume you can beat the market by 2%. Now take 2% of that and write it down on a piece of paper. That's your salary for all of the work and worry you spend researching, etc. Worth it? I doubt it.

Also, with more "human interaction" based on incomplete data or slight-of-hand investment analysis you'll probably do more harm than good. I know I did.

So stop investing because some golden cross told you it was safe to buy, OK?   Seriously... who invests like this? Keep it simple.

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: Nutdanai Apikhomboonwaroot / FreeDigitalPhotos.net

Get ready for March Madness!

2012-02-02T10:47:00.000-05:00

Just a quick note that I'm participating in Free Money Finance's 2012 Personal Finance March Madness competition this year. It's a fun way for geeks like me to have a little fun with some of our best posts, going head to head with other personal finance bloggers.

I just found out this morning that my post 5 ways to slowly but surely become a millionaire will be competing against Master the Art of $aving's extreme couponing reality check post in the first round. I'm not really sure when it will go "live" but I'll let you know. Master the Art of $aving, for those of you who don't know, is a fun blog with a TON of readers. So chances are this will be a tough match-up for us. I'll need all the help I can get to vote on my post!

Of course, only vote for mine if you think it should win. I'm all about getting people "to vote," not getting people "to vote only for me." :)

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: jscreationzs / FreeDigitalPhotos.net

2012 Goals Checkup

2012-02-02T04:02:00.000-05:00

Last year I was a complete failure. I'm convinced that part of the reason was because I didn't check in. Setting annual goals, breaking them into small chunks and checking in every month is pretty much the only way I'm able to stay on track. So this year, I set family, work and "me" goals that, for the most part, lend themselves to monthly checkups. Let's dig in!

Family Goals:

Take one family vacation of at least one week and shut off my phone and Internet. Not done yet, but my wife and kids were away for 3 weeks with family, so this wasn't expected yet. My in-laws go to Florida all winter, so each year my wife and kids go and visit for 2 or 3 weeks. It's a great, cheap trip to Florida when it's freezing here (they drive down with my in-laws and stay at their house, so it's super cheap). And my wife gets a lot of help. I join them if and when work permits. This is not counted as a family vacation.
Take at least one vacation with just my wife and me, leaving the kids with family. Same.
44 date nights. Zero. Again, not expecting many so far (they were gone from January 6 through the 29th). But we have a few planned over the next couple of weeks.
Be home at least one hour per day with the phone and TV off and computer closed. So far so good. But it's only been a few days...
BONUS Goal: Read at least 12 books about being a better father and/or husband. Halfway through one. Need to catch up.

Grade: Incomplete. Family was away, so it's pretty tough to grade.

Work Goals:

Lead at least two projects. So far so good. I have two projects that I'm leading. There's someone watching over me in each of them, but that's company policy for people my level. These are big tests for me.
Work less but focus on performing higher-level functions. So far so good. I worked a little extra trying to get ahead when my family was away, but I've definitely been working "less" than before and have focused on higher-level stuff.
Become cash flow positive even without considering the value of my work. Not. Even. Close. But it's still early and I have a few things brewing.
Read at least 12 books about work. Working on the first one. Not yet halfway there.

Grade: A-. Things are moving in the right direction. Most people work with generic "company customers." My "new customers to justify my existence" goal would put me in really elite company in my world. So the "fail" so far is ony a one-level deduction from A+ to A. I knocked myself down another level for not reading enough.

"Me" goals:

Lead Step Away from the Mall to a top 250,000 website. As I'm typing, my Alexa rank is 729,957. That's down from about 1,300,000 in just a month and only three and a half weeks since I joined the Yakezie Challenge! That actually changed my goal to top 200,000 by July 8. That's going to be pretty tough. Plus, I'm pretty sure it gets more difficult to move up from here. We'll see. I really could use your help with this one. If you enjoy this blog, share it on Facebook or e-mail it to a friend and encourage them to spread the word!
Stats: Post at least 260 posts here. So far so good. I posted 31 times in January. Good stuff. 229 to go. Don't worry, even if I hit 260 by June I'll keep writing at least every weekday!
Track and increase my net worth by 50%. I'm being a little secretive about this, using Evan's zero-based net worth tracking system instead of revealing the actual numbers. I'm also just focusing on my side of the ledger. But I will say that my net worth is positive and higher than my salary, which means that a 50% increase in net worth is a lofty goal. I'm hoping for a combination of increased income, standard-of-living management and investment returns gets me there. January was a HUGE month for me - up 9.8%. That monthly gain will almost certainly not continue throughout the year. But I have a few things brewing that could help. January is always a huge month for me because if I get a bonus at work it's paid in January. This year I got a pretty hefty bonus.
Exercise no less than 130 times and no more than 182 times. Zero. Yes, big fail. Saturday morning I'm going back. I had big plans for January. Fail. If I'm going to hit 130 that means I have to exercise 12 times per month on average from here on out.
BONUS Goal: Create at least two streams of significant income online, at least one of which involves designing and selling a product online. Decent job on this one. I had two sponsored posts in January and collected a few bucks there. (Don't worry, I've never been censored here, even in sponsored posts. And I'll let you know when a post is sponsored or a guest post or whatever.) No product though. I have a concept I'm planning on developing that I think fills a nice void in the personal finance world though. Top secret for now. :) More on that later.

Grade: B+ (If exercise wasn't zero I would bump myself into A- territory. But I get a full letter grade deduction for skipping the gym.)

Overall January Grade: B

Not too shabby. I had a couple complete failures and a few hits. February's going to be a key month to stay on track and get my butt in the gym!

This is very, Very, VERY important: Thank you for reading all of my posts. You're very motivating and make me feel all warm and fuzzy, especially when you leave me a comment on a post. I love interacting with you, so don't forget to check in every once in a while. I really appreciate you taking a minute or two to stop by and read what's on my mind for the day. So thank you, again.

How are your goals going?

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don't forget to send me an e-mail or comment to say hello. I love hearing from you.

Also, please join our recently-started Facebook community where I hope to build a place where we can all share thoughts, successes and support. And don't forget to follow me on twitter where you'll find most of the posts, random thoughts by me and more. See you there!

Image: renjith krishnan / FreeDigitalPhotos.net

3 reasons I love Roth IRAs

2012-02-01T01:06:00.004-05:00

At the beginning of every year I get a bit obsessed with financial checkups. I set goals for the year and run a bunch of scenarios to see how I'm doing. (You can probably tell based on yesterday's post about how to balance living now versus planning for later...). Each of the last handful of years has involved maxing out IRAs for my wife and me along with my 401(k) (my wife stays home with our kids). And each year I fall more and more in love with my seductive mistress... the Roth IRA.

If you don't have one set up, now is the time to do it. For those of you who are new to the money game, a Roth IRA is a retirement account that encourages people to take some of their retirement into their own hands by giving favorable tax treatment to investment gains.

Here are some Roth IRA basics. I'll try and keep this as short as possible... But it's tough when there is so much to love :)

First, you can set it up with pretty much any online discount broker. I use TD Ameritrade for no particular reason other than I have one of my investment accounts there and they have no fees. Scottrade also has low or no-cost Roths. Vanguard and Fidelity are also well regarded.

Second, you can put in up to $5,000 per year if you're under 50 and $6,000 per year if you're over 50.

Third, you cannot deduct the contributions from your taxes. That means you contribute with after-tax money.

Fourth, there are income limits on contributing to Roth IRAs (basically phasing out between $110,000 and $125,000 for single filers and between $173,000 and $183,000 for married filing jointly). But there are no limits on converting traditional IRAs to Roths, so the income limits have little bite anymore (high income earners have been contributing to a traditional IRA, not deducting the contributions (because they are subject to phase-out) and then converting to Roth. Tada!)

Fifth, you can still make contributions for last year. You have until taxes are due to contribute. This year it's April 17. But don't wait until the last minute. You don't want to miss out because of a bank delay or something like that. The point is you can still get $5,000 in for 2011 now.

But none of those are why I love Roth IRAs. Here are my top three:

Taxes. Remember me mentioning you can't deduct the $5,000 you contribute? Well that's the last time you'll pay taxes on Roth dollars unless you go crazy and withdraw gains before you turn 59.5. Once you hit 59.5 you're tax free. That's right - no capital gains, no income taxes.

Consider a hypothetical person who invests $5,000 per year from age 25 to age 60 and mirrors what the Dow Jones Industrial Average did for the last 20 years as a return, reinvesting dividends. They would have invested (and paid taxes on) $175,000. But your balance would be about $1.3 million. That means you get $1.125 million dollars tax free. Also, under some circumstances (including to buy or build a first home) some contributions can be withdrawn as long as the money's been there for five years without tax problems. Convinced yet?

Investment Choices. 401(k)s are great because you can stash $17,000 per year into retirement. But your investment choices are generally limited to whatever mutual funds some goober decides are right for you. Generally they give you one or two choices in different "categories." Some 401(k)s allow you to choose investments for a pretty hefty fee, but for the most part you're stuck with some pretty crappy choices.

Roth IRAs let you choose basically whatever you want - any mutual fund, any ETF. More control.

Higher "effective" contribution limits than other IRAs. This is so important that I separated it out from the "tax free gains" reason I love Roths. It boils down to this: Traditional IRAs have the same $5,000 limit but reverse the tax treatment of the contributions. You generally contribute with "before tax" dollars. So comparing $5,000 in a Roth with $5,000 in a Traditional IRA is not comparing "apples to apples."

Here's how it works: Assuming you're in the 25% tax bracket you have to make $6,667 in order to have $5,000 after-tax to invest in a Roth. That's your "apples to apples" number. So basically you're "sneaking" more money into retirement because of the tax treatment. This in combination with the "never pay taxes again" likelihood makes Roth melt my heart.

Babbling Tangent:
What about a matching 401(k)? Most people agree that a matching 401(k), despite its limited investment choices, trumps a Roth IRA but only up to the match. I don't have that option, so the Roth is my one true love. If you have a matching 401(k), however, consider investing up to the match and then pile-driving a Roth IRA as much as you can.

Don't get me started on a Roth 401(k)s, which combine most of the best Roth IRA features with the higher $17,000 limit. Those rock despite the limited investment choices.

And if you have a Roth 401(k) with a match consider open mouth kissing whoever made that decision, haha... seriously, don't open mouth kiss anyone at work (even if you work with your spouse... wait until you get home, ok?). But you get the point. Even though the "matching" amount has to be put in a traditional 401(k), you're set up to retire like a king or queen on just $17,000 per year out of your pocket (about $4.4 million tax free).

OK. I'm back from my tangent. Here's the bottom line:
Want to set up a retirement plan that rocks? Consider maxing out a Roth every year and investing in simple index funds auto-reinvesting the dividends. It's simple. It's tax advantaged. It's flexible. And if you're married filing jointly, you can get $20,000 in as long as you act fast (2011 and 2012 contributions for you and your spouse).

Anyone else as enamored as me? :)

Until next time, put your credit card down and slowly step away from the mall!

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