Wednesday, December 9, 2009

Traditional IRA or Roth IRA for College Graduate

If you are uncertain about the Roth IRA or traditional IRA, read this article by CashMoneyLife. I have also reference some of my other posts below. This is a very important idea to understand, especially for young investors and students right out of college who are looking for ways to save and invest extra cash.

Cash Money Life - Roth or Traditional IRA


You may also want to read:

Roth or Traditional IRA

Tuesday, November 24, 2009

Twelve Step Program for Personal Finance

This is a very creative infographic from BillShrink. It basically talks about how one can take control and ownership of ones finances to get back on the track the financial freedom. The basic principles of taking ownership, watching your spending habits and reducing unnecessary spending are the key points of this. Check it out; done in an interesting way.

Step 1:
We have admitted we are powerless over the economic downturn – that our financial lives have become more difficult to manage.

Step 2:
We have come to realize that we are in control of our own financial future.

Step 3:
We have made a decision to turn our financial lives around.

Step 4:
We have made a searching and fearless inventory of our personal budgets.

Step 5:
We have admitted to ourselves and to another human being the exact nature of our financial irresponsibility.

Step 6:
We are entirely ready to remove all these extraneous expenditures from our budgets.

Step 7:
We have sought to remove each of our financial shortcomings.

Step 8:
Made a list of all unnecessary expenditures, and became willing to make difficult changes to reduce them all.

Step 9:
We have made direct amendments to our spending wherever possible, except when to do so would compromise the wellbeing of our families or ourselves.

Step 10:
We continue to take personal financial inventory and when we identify unnecessary spending, we promptly eliminate it.

Step 11:
We have sought through meditation to improve our conscious contact with our inner-spender, seeking the power to carry out the actions necessary to cut our expenditures.

Step 12:
Having had a financial awakening as the result of these steps, we will try to carry this message to other over-spenders, and to practice these principles of fiscal prudence in all our affairs.

Go to BillShrink for full graphic>>>

Monday, November 23, 2009

The habits of real millionaires…not what you see on TV




These are some findings from Dr. Thomas Stanley’s new book, Stop Acting Rich: And Start Living Like a Real Millionaire, based on his research and a national survey carried out by University of Georgia Survey Research Institute. You may find some of these interesting.

1. The #1 most popular make of car among millionaires is Toyota – not BMW or Mercedes.

2. Real millionaires pay about $16 (tip included) for a haircut at a traditional barbershop.

3. Nearly 4 in 10 millionaires buy wine that costs around $10.

4. There are currently more than 350,000 millionaire educators (working or retired teachers or professors) – a profession that is far better at transforming income into true wealth than doctors or lawyers.

5. Only 5.7 percent of all surveyed millionaires nationally paid $1000 or more for their most recently acquired suit.

6. Sixty-four percent of all real millionaires have never owned a second house.

7. The number one preferred brand of shoes worn by millionaire women is Nine West and their favorite clothing store is Ann Taylor – with the Gap and Costco not far behind.

8. Most real millionaires own Seiko watches and not Rolex, Omega or Tag Heuer.

9. Those who give away larger portions of their incomes to charitable causes end up accumulating more wealth.

What do you think about these results? It seems obvious to me that there is a fundamental mindset of frugality. Millionaires by nature look for ways to minimize expenses and do not spend a lot of items that return no value to them.

Thank you to FreeMoneyFinance for great article. [Source:]

6 Things You Should Know When Negotiating Your Salary

Rami Sethi, writer of, talks about what you should know when negotiating your salary. What do you think about them? If you have any other tips that you have had experience with, or you know that works, share them with us in the comments. Thank you.

1. Nobody cares about you.

2. Have another job offer.

3. Show up prepared.

4. Negotiate for more than money.

5. Smile!

6. Save face.


Sunday, November 22, 2009

Six traps investors should avoid


1) Anchoring trap. The mind gives a disproportionate amount of weight to the first information received on a topic. Avoid premature conclusions.

2) Status quo trap. Forecasts tend to perpetuate recent observations. If inflation has been high, it is expected to remain high. It is a psychological risk to assume something different.

3) Confirming evidence trap. Individuals give greater weight to information that supports an existing point of view. Run an idea by an independent-minded person. We tend to see evidence that supports what we believe to be true.

4) Overconfidence trap. Individuals overestimate the accuracy of their forecasts. Widening the range of expected possible outcomes is one way to mitigate this tendency.

5) Prudence trap. There is a tendency to temper forecasts that appear extreme. If a forecast turns out to be extreme and then wrong, it could be damaging to one's career. Therefore, sticking to the herd is safer.

6) Recallability trap. Individuals are overly influenced by events that have left a strong impression on a person's memory. These events tend to be catastrophic or dramatic. To avoid falling into this trap, individuals should ground their conclusions in objective data rather than emotion or memories.

Source: [Original article here]

Friday, November 20, 2009

Warren Buffett Holdings as of September 2009

1710_warren_buffett_1 This is the list of Berkshire Hathaway Inc. (NYSE: BRK-A)(BRK-B) public US equity holdings as of September 30, 2009.




Highlights from the portfolio of the greatest investor of our time.

  • American Express Co. (NYSE: AXP) over 151.6 million shares, same as last quarter.
  • Bank of America Corp. (NYSE: BAC) 5 million shares; same as last quarter.
  • Becton Dickinson & Co. (NYSE: BDX) 1.2 million shares, same as last quarter.
  • Burlington Northern Santa Fe (NYSE: BNI) was reported as 76.77 million shares but frankly it does not really matter as BNSF is becoming part of Berkshire.
  • Carmax Inc. (NYSE: KMX) 9 million shares is same as last quarter.
  • Coca Cola Co. (NYSE: KO) right at 200 million shares, still same as before.
  • Comcast (NASDAQ: CMCSA) 12 million shares, same as before.
  • Comdisco Holdings (NASDAQ: CDCO) roughly 1.5 million shares, same as before.
  • ConocoPhillips (NYSE: COP) 57.43 million shares, DOWN FROM 62.485 million at the end of June.
  • Costco Wholesale (NASDAQ: COST) 5.254 million shares, same as before.
  • Exxon Mobil Corp. (NYSE: XOM) is a NEW HOLDING of 1.276 million shares.
  • Gannett Co. (NYSE: GCI) 3.447 million shares, same as before.
  • General Electric Corp. (NYSE: GE) 7.777 million shares is the same as before, but does not include the huge preferred investment from late 2008.
  • GlaxoSmithKline (NYSE: GSK) 1.51 million shares, same as before.
  • Home Depot Inc. (NYSE: HD) 2.757 million, same as last quarter.
  • Ingersoll-Rand (NYSE: IR) 636,600 shares; WAY DOWN from the 7.78 million listed last quarter.
  • Iron Mountain (NYSE: IRM) 3.3722 million shares, same as before.
  • Johnson & Johnson (NYSE: JNJ) was just over 36.91 million shares; Same as last quarter and still well under the 62 million shares at one point in 2008.
  • Kraft Foods (NYSE: KFT) over 138 million; same as last quarter.
  • Lowe’s Companies (NYSE: LOW) 6.5 million shares, same as last quarter.
  • M&T Bank Corp. (NYSE: MTB) 6.71 million shares, same as before.
  • Moody’s (NYSE: MCO) was listed as over 39.2 million shares, but that is WAY DOWN from the 48 million last quarter.  Be advised that he has noted sales and hinted at more sales here.
  • Nalco Holding (NYSE: NLC) 9.0 million shares, same as last quarter.
  • Nike Inc. (NYSE: NKE) 7.641 million shares, same as before.
  • Norfolk Southern (NYSE: NSC) 1.933 million shares, same as before, but we already know Buffett has or is selling out of non-BNSF shares in rail companies.
  • NRG Energy (NYSE: NRG) 7.2 million, same as before.
  • Eaton Corp. (NYSE: ETN) was NOT LISTED ANY LONGER, so sold from holdings.
  • Procter & Gamble (NYSE: PG) 96.3 million, the same as before.
  • Republic Services Inc. (NYSE: RSG) 3.625 million shares; NEW POSITION following Bill Gates.
  • Sanofi Aventis (NYSE: SNY) more than 3.9 million shares, same as before.
  • Sun Trust Bank (NYSE: STI) 3.079 million shares; DOWN FROM 3.2+ the quarter before.
  • Torchmark Corp. (NYSE: TMK) roughly 2.82 million, same as before.
  • Travelers Cos (NYSE: TRV) 27,336; NEW POSITION but small.
  • US Bancorp (NYSE: USB) roughly 69 million; Same as quarter before.
  • USG Corp. (NYSE: USG) 17.072 million shares, same as before.
  • United Health Group (NYSE: UNH) 3.4 million shares; DOWN from 4.5 million last quarter and down from over 6 million in Q1.
  • Union Pacific Corp. (NYSE: UNP) 9.55 million shares, same as quarter before but this does not matter as Buffett is dumping his non-BNSF rail holdings.
  • United Parcel Service (NYSE: UPS) 1.429 million shares, same as before.
  • Wal-Mart Stores Inc. (NYSE: WMT) 37.8 million; WAY UP from the 19.9+ million shares last quarter.
  • Washington Post (NYSE: WPO) over 1.72 million shares, same as before.
  • Wells Fargo & Co. (NYSE: WFC) 313.3 million shares; ABOVE THE PRIOR 302+ million last quarter and above the 290+ million in Q1.
  • Wellpoint Inc. (NYSE: WLP) 3.394 million; DOWN SLIGHTLY from the 3.5 million last quarter and from the 4.7773 million in Q1.
  • Wesco Financial Corp. (NYSE: WSC) 5.7 million shares, same as before.
  • WABCO Holdings (NYSE: WBC) IS GONE after being 2.7 million shares last quarter.

Tuesday, November 17, 2009

Bruce Berkowitz of Fairholme Fund talks about Investing

The Fairholme Fund is one of my favorite mutual fund because of Bruce Berkowitz and its performance. He has a Buffett-style philosophy and is very focused on being a steward of shareholders’ wealth. He runs Fairholme as a concentrated portfolio of stocks and holds about 17% cash. In this video, he talks about his investment philosophy, stocks, lessons from the economic downturn and some of Warren Buffett’s recent purchases.

Sunday, November 1, 2009

30 Jobs That Pay $80K

This article on MSN Career Builder shows 30 jobs that pays $80000. It ranges from Physics teachers to Biomedical Engineers. Check out these jobs and see which ones may be a career that may interest you.

1. Administrative law judges. Get paid: $80,870

2. Biomedical engineers. Get paid: $81,120

3. Chiropractors. Get paid: $81,340

4. Atmospheric, earth, marine and space science teachers, post-secondary. Get paid: $81,470

5. Agents and business managers of artists, performers and athletes. Get paid: $81,550

6. Materials scientists. Get paid: $81,600

7. Physician assistants. Get paid: $81,610

8. Medical scientists. Get paid: $81,870

9. Physics teachers, post-secondary. Get paid: $81,880

10. Atmospheric and space scientists. Get paid: $82,080

11. Management analysts. Get paid: $82,920

12. Producers and directors. Get paid: $83,030

13. Biological science teachers, post-secondary. Get paid: $83,270

14. Materials engineers. Get paid: $84,200

15. Transportation, storage and distribution managers. Get paid: $84,520 

For the next 15 jobs and descriptions go here >>>

Thursday, September 24, 2009

10 things that can affect your FICO Score?


Steer clear of these 10 things experts say can mangle your score.

  1. fico_scoreDon´t avoid using credit. If you don´t use credit, you won´t have much of a credit score. “A credit score is an important tool companies use to protect themselves,” Sweet says. The lower the score, the higher the risk, and this can affect whether or not a loan is approved.
  2. Don´t miss payments. Paying a bill late will hurt your credit, but missing a payment will damage it even more. “If you do so, you can´t make it up,” Sweet says. In other words, making two payments in the next billing cycle will not remove the blemish from your credit report. Whether or not you pay your bills on time determines 33% of your score.
  3. Don´t limit loan types. Despite what your bank account may state, a car payment and a mortgage may not be enough. Also managing an installment debt, such as a credit card, is a good indicator of credit savviness. There are five elements to the credit score model and revolving credit, which allows consumers to charge and owe different amounts each month, is one of them. “It´s 10% of the score,” says Gail Cunningham, Vice President of Public Relations for National Foundation for Credit Counseling.
  4. Don´t close unused credit card accounts. Actually, just use caution, says Sweet. A factor in credit score models is your utilization, which is your debt vs. how much is available. For instance, if you owe $4,800 on a card with a $5,000 limit, you´re using most of your available credit and this “utilization” will have a negative impact on your score. Counting toward 30 percent, your utilization is the second highest factor in your credit score. You should charge no more than 30% of your available credit, recommends Cunningham.
  5. Don´t be a credit tease. Don´t run up charges all over town or apply for several cards at once while looking for the best rewards program. Recent inquiries means that you have accessed your credit and this can affect your score negatively. “This signals that you´re desperate for credit and don´t have enough cash available for your purchases,” says Cunningham. She adds that if you are shopping for a major purchase, such as a mortgage or car loan, the inquiries will usually roll together into one.
  6. Don´t rob Peter to pay Paul. Don´t charge anything unless you know how and when you are going to pay it back. One of the benefits of credit is the ability to spread out payments on a big purchase, not to delay paying with hopes that the money will come in - from somewhere. If you need to use a credit card for convenience, use a prepaid card or a secured card that enables you to make payments to your own line of credit.
  7. Don´t get on the call list. When a debt turns into a collection account, it´s an indication that you got yourself in hot water. Once a collection agency jumps into the arena, it becomes the owner of the debt, which will show on your credit report. Trying to make payments to the original debtor will not make the collection agency or the negative mark on your credit go away.
  8. Don´t forget the little things. That library fine you didn´t pay or the health club contract you signed but didn´t honor can show up on your credit report. Any debtor has the right to report unpaid bills to the credit bureaus, and many of them exercise that right.
  9. Don´t negotiate. On paying less than what you owe, that is. If you cannot repay a debt in full and a creditor agrees to settle for less than you owe, you haven´t won the battle. Instead of negotiating to lower the overall amount of the debt, ask to have your interest rate or monthly payment lowered so that you can continue to pay the debt off in full.
  10. Don´t give up. If you have late payments, missed payments, defaulted loans, and similar credit mess-ups in-between, don´t give up and think that your credit report is ruined. Although offenses like these generally stay on your credit report for seven years, the recovery clock doesn´t start ticking until you have one full month of paying all of your debts on time, says Sweet.

Wednesday, September 16, 2009

One millionaire’s advice on attaining wealth

These are quotes from an individual who did not make a lot of money, yet understood the basic principles of attaining wealth. Wealth is not accumulated by what you do, but it is accumulated by what you are. It is a state of mind where the natural consequence tends to be wealth as you define it. This is different for each individual, therefore I will not provide a static definition. Therefore, if you have goals to achieve a desired level of wealth, then the simple solution is to be that which you strive for. Once you become that, then you will ultimately bring all that you want into your life. Opportunities will begin to present themselves to you, you will come across financial information that are aligned to your goals, people will come into your life to help you…it is great how this works.

These are the quotes from one of our blogging relatives…FreeMoneyFinance

  • “The real secret is to spend less than you earn. I don’t care how much you earn, you spend less than you earn. Spend less than you earn. This is true whether you’re on welfare or a millionaire.”
    The idea here is presented by most personal finance professionals; a very simple and fundamental formula. The opposite to this leads to leverage. Avoid leverage at all costs.
  • “No smoking or alcohol consumption. This has nothing to do with morals and health – okay, maybe health – it’s all about the money.”
    This refers to expensive habits.
  • “No-load mutual funds are the only way to go. To give anybody 3-4% of your money off the top is insane.”
    No-load mutual funds are funds where you do not have to pay the managers commission up front when purchasing. I agree, this is the way to go. There are many no-load mutual funds that are also low cost (very low expense ratio). See Vanguard to begin with.
  • “Volunteer to help others.”
    Giving is always useful. I wrote an article a while ago on the benefits of charitable giving as it pertains to wealth. See Wealth and Charitable Giving.
  • “I can buy whatever I want. Not need, but want. I just don’t want very much.”
    When you don’t want very much, you do not have a desire for a lot of material possessions. This allows you to retain a lot of your wealth. This is a great mindset to develop. Focus on what you need, not want. When you do so, everything becomes available to you, because you desire nothing.
  • “Wealth is created by investing money, not by working longer and harder.”
    Invest now. There is no point to wait. Your money should be working for you; it should not only be the other way around. Each year you wait reduces the amount of money you can earn through the power of compounding over time.

Sunday, September 13, 2009

Forbes 50 Most Powerful Women in Business

Full list

Rank | Name | Company

1 Indra Nooyi PepsiCo
2 Irene Rosenfeld Kraft Foods
3 Pat Woertz Archer Daniels Midland
4 Angela Braly WellPoint
5 Andrea Jung Avon Products
6 Oprah Winfrey Harpo
7 Ellen Kullman Dupont
8 Carol Bartz Yahoo
9 Ursula Burns Xerox
10 Brenda Barnes Sara Lee
11 Ginni Rometty IBM
12 Safra Catz Oracle
13 Ann Livermore Hewlett-Packard
14 Sheri McCoy Johnson & Johnson
15 Melanie Healey Procter & Gamble
16 Anne Sweeney Walt Disney
17 Heidi Miller J.P. Morgan Chase
18 Carol Meyrowitz TJX
19 Colleen Goggins Johnson & Johnson
20 Judy McGrath Viacom
21 Ann Moore Time Warner
22 Sheryl Sandberg Facebook
23 Carrie Cox Schering-Plough
24 Susan Chambers Wal-Mart
25 Barbara Desoer Bank of America
26 Susan Ivey Reynolds American
27 Charlene Begley General Electric
28 Abigail Johnson Fidelity
29 Liz Smith Avon Products
30 Sallie Krawcheck Bank Of America
31 Christina Gold Western Union
32 Jan Fields McDonald’s
33 Sue Wagner BlackRock
34 Pam Nicholson Enterprise
35 Joanne Maguire Lockheed Martin
36 Claire Babrowski Toys “R” Us
37 Deirdre Connelly GlaxoSmithKline
38 Gail Boudreaux UnitedHealth
39 Meredith Whitney Meredith Whitney Advisory Group
40 Lorrie Norrington eBay
41 Kathleen Murphy Fidelity
42 Cathie Lesjak Hewlett-Packard
43 Linda Hudson BAE Systems
44 Marissa Mayer Google
45 Lynn Elsenhans Sunoco
46 Cathie Black Hearst Magazines
47 Bonnie Hammer General Electric
48 Lauren Zalaznick General Electric
49 Amy Pascal Sony Pictures Entertainment
50 Maggie Wilderotter Frontier Communications

Friday, September 4, 2009

Suze Orman’s Debt Loyalty List

Which debt to pay off first

As we all know, there are many solutions to the same problem. This idea applies to debt payment as well. Many professionals provide different approaches to paying off debt. As I mention in many of my posts, the goal of this blog is to create an environment where readers are provided with relevant information of varying schools of philosophy in order to make informed decisions based on ones personal financial situation. This way of debt payment is Suze Orman’s way. Check it out.

Suze Orman states that there are fundamentally six (6) kinds of debt.

1. IRS Debt

2. Student Loan Debt

3. Personal Loan Debt

4. Mortgage Debt

5. Car Loan Debt

6. Credit Card Debt


1. IRS Debt is debt owed to the IRS. Suze declares that owing money to the IRS is the worst possible scenario and should therefore be focused on first. Why? Well, the IRS has the ability to legally seize your money via your bank account at anytime.

2. Next is paying off for your college education. Suze says that one reason to keep paying your student loan is that it cannot be discharged in a bankruptcy filing. The interest will continue to accrue. They can also garnish your wages to get their money back if you decide not to make your student loan payments.

3. Personal debt is ranked this high because of the deleterious effect it can have on relationships. You must be responsible to those who have loaned you money and make it a point to pay them back.

4. Mortgage debt is bad for obvious reasons. Does the term foreclosure mean anything to you? The last thing you want to lose is your home.

5. Car Loan debt is important as well if it is your means of transportation to work. If it assists you greatly in earning your income, be sure you make your car payments so that you can continue to earn much needed income.

6. Credit Card debt is unsecured debt. This means that if you don’t pay it, they can’t seize your home or your car. They also can’t take your money or seize your accounts. Many would say this is the most important one to pay off because of the high interest rates charged, however, this is another perspective on it.


Once again, it is important to look at your own financial situation and seek professional advice before making huge financial decisions. Educating yourself financially is the first step to financial success. Be well.

Tuesday, August 18, 2009

8 Keys to Financial Success

1. You need to have great role models that influence your life.

There are many people that have had a positive influence on my life; I consider them all role models. However, the main individuals that have impacted my life today are my parents, Dr. Wayne Dyer, Dr. David Hawkins and Warren Buffett. My parents taught me the benefits of hard work and education, Dr. Dyer and Dr. Hawkins both taught me that the most important part of life is one’s spiritual development and that we must be kind and loving to all of life, and Warren Buffett taught me the value of investing in businesses for the long term and philanthropy. I have chosen these individuals because their philosophies resonate on a very deep level with me and I think they are great at what they do, operating with the highest of integrity.


2. Learn as much as you can.

Education is very important and learning must never stop. Most successful people will tell you that they learn something new each and every day. This is why it is important to do what you love doing, otherwise, you would not care about learning more about it. Strive to become better at what you do and you are guaranteed success.


3. Marry the right person.

This is undoubtedly one of the most important decisions in your life. Be sure that you are marrying for the right reasons and that you understand the person and yourself. Marry someone that you are aligned with otherwise you may end up in a divorce which brings stress, financial despair and unhappiness. It is not easy to tell if it is the right person, but once you fully internalize it, you will not regret the experience no matter how things go.


4.  Be the best employee you can be.

Your primary job is where you generate the majority of your income, therefore it is crucial to be the best at this by improving your job skills. Your value will increase in your company along with your potential for future growth. When layoffs occur, you will not be one of the unfortunate ones to lose their jobs.


5. Start saving now.

As soon as you receive your first paycheck, start a savings plan and stick to it. Over time, the combination of the magic of compounding and your financial discipline will increase your net worth drastically. You should contribute to your 401k or 403b retirement plans and consider Roth IRAs and other investment vehicles as well. Pay yourself first…


6. Live frugally.

Live within your means. This is a fundamental principle to follow to achieve financial success.


7. Increase your knowledge of personal finance and investing.

In order to manage your finance, it is to learn as much as you can about investing and personal finance. Read as much books or blogs as you can; every bit of knowledge helps. You will realize how much more confidence you will gain as your knowledge increases.


8. Start a business

Most of the wealthy individuals in the United States today own their businesses. Not many inherited wealth as many of us may think. Consider starting a business based on something you are great at and passionate about. The rewards will follow.


If you have any other keys you would like to share, leave a comment. Can’t wait to hear them.

Monday, August 17, 2009

Life lessons in a forwarded email

I normally skim through, delete and never forward these emails, but I thought this one was very useful. I know hundreds of people that may read this will ultimately be impacted by if not one, a few of these life lessons. Below is the entire email as forwarded to me.



This is something we should all read at least once a week. Very meaningful.

Written By Regina Brett, 90 years old, of The Plain Dealer, Cleveland, Ohio
"To celebrate growing older, I once wrote the 45 lessons life taught me...It is the most-requested column I've ever written.

My odometer rolled over to 90 in August, so here is the column once more:

1. Life isn't fair, but it's still good.
2. When in doubt, just take the next small step.

3. Life is too short to waste time hating anyone.....
4. Your job won't take care of you when you are sick. Your friends and parents will. Stay in touch
5. Pay off your credit cards every month.
6. You don't have to win every argument. Agree to disagree.

7. Cry with someone. It's more healing than crying alone.
8. It's OK to get angry with your God. He can take it.
9. Save for retirement starting with your first paycheck.

10. When it comes to chocolate, resistance is futile.
11. Make peace with your past so it won't screw up the present.
12. It's OK to let your children see you cry.
13. Don't compare your life to others. You have no idea what their journey is all about.
14. If a relationship has to be a secret, you shouldn't be in it.

15. Everything can change in the blink of an eye.
16. Take a deep breath. It calms the mind.

17. Get rid of anything that isn't useful,beautiful or joyful.
18. Whatever doesn't kill you really does make you stronger.

19. It's never too late to have a happy childhood. But the second one is up to you and no one else.
20. When it comes to going after what you love in life, don't take no for an answer.

21. Burn the candles, use the nice sheets, wear the fancy lingerie. Don't save it for a special occasion. Today is special.
22. Over prepare, then go with the flow.

23. Be eccentric now. Don't wait for old age to wear purple.
24. The most important sex organ is the brain.
25. No one is in charge of your happiness but you.

26. Frame every so-called disaster with these words'-In five years, will this matter?'
27. Always choose life.
28. Forgive everyone everything..

29. What other people think of you is none of your business.
30. Time heals almost everything. Give time time.
31. However good or bad a situation is, it will change.
32. Don't take yourself so seriously. No one else does.
33. Believe in miracles.
34. Your God loves you because of who that God is, not because of anything you did or didn't do.

35. Don't audit life. Show up and make the most of it now.
36. Growing old beats the alternative -- dying young.
37. Your children get only one childhood.
38. All that truly matters in the end is that you loved.
39. Get outside every day. Miracles are waiting everywhere.
40. If we all threw our problems in a pile and saw everyone else's, we'd grab ours back.

41. Envy is a waste of time. You already have all you need.
42. The best is yet to come.
43. No matter how you feel, get up, dress up and show up.

44. Yield.
45. Life isn't tied with a bow, but it's still a gift."

Which ones appeal to you most during your first read?

Wednesday, August 12, 2009

5 Habits of Millionaires Worthy of Emulating

These are five (5) common traits of millionaires that allow them to be successful:

1. They focus on saving and investing.
They don’t have the desire to spend money as soon as it is earned. Instead, they have an innate ability to delay immediate gratification for future gain. This has a huge benefit in that you focus on saving and investing money for the future, allowing your money to grow significantly over time. The magic of compounding then kicks in, and wealth is the natural condition that prevails. Many wealthy individuals live quite simply choosing financial independence over material ownership.

2. They are able to focus their efforts on a project and make it successful.
They have the ability to set their minds to a task and pursue it with an undeniable focus. It is recommended that goals are clearly defined, which makes it easier for one to focus. “Winners focus, losers spray.”

3. They are willing to sacrifice to make ideas successful.
They are willing to do whatever it takes to make their ideas successful, even if it involves a degree of sacrifice. People who earn millions are able to focus and persevere in the pursuit of their goals. It may require endless hours of reading, learning new things, working extra hours, starting a new business etc.

4. They take calculated risks.
They take risks that are more likely to pay off in the future. Strategic risks are needed to earn and grow money. The younger you are, the more risks you are able to take, since you have more than enough time to recover.

5. They are generous.
They understand that they are blessed to have a wealthy status and share what they have earned with society. Read this previous post on Wealth and Charitable Donations.

Warren Buffett once said that if you want to be a certain way, you should exhibit the qualities that you admire in other people. Therefore, if you want to attain wealth, you should exhibit qualities that are common in many of today’s successful millionaires. These characteristics are not a bad place to start.

Sunday, August 9, 2009

10 Ways to Becoming a Millionaire

1. Reduce consumption and increase investments. This is the most fundamental equation in increasing net worth.

2. Create a budget and stick to it. It is important to know where you spend your money.

3. Increase your financial knowledge. Read as much as you can about personal finance. It will soon become habitual and you will automatically act in ways that are beneficial to your financial success.

4. Make contributions to your investment vehicles on a consistent basis. Keep focused and continuously put money into your investments. Dollar cost average + time can increase returns significantly.

5. Start a part-time business to increase income and take advantage of tax write-offs. Starting a business is a great way to achieve financial independence. Being frugal is great, but ultimately you have to increase your income to be wealthy; starting a business is a great way to do so.

6. Surround yourself with like-minded people who believe and support your goals. One of the best ways to achieve a particular goal is to put yourself around people who have already achieved it, or people who have similar goals. It helps keep the focus and the experienced may provide priceless advice when it comes to financial decisions they have made when they were at your level.

7. Find great CPAs and other trusted advisors. There comes a point where it is wise to seek financial advice. If you have a friend or mentor that has these qualifications, seek advisement from time to time. Make ample use of your network.

8. Set short and long term goals. Setting short term goals helps you see more readily attainable tangible results and keeps you on track to your long term goals.

9. Make a commitment to become a millionaire. There is nothing more important than the declaration of becoming a millionaire. Clearly stating that you want to become a millionaire actually increases the possibility of that actually occurring; all part of the Heisenberg Principle.

10. Start now. Time is your friend when it comes to investing. The earlier you start, the faster you can reach your goals. The power of compounding begins to work its magic.

Tuesday, August 4, 2009

8 Guidelines for Managing Your Money


1. Spend less than you earn.
Keep track of every penny you spend. Do not borrow money, unless absolutely necessary. It is preferable, of course, to avoid debt.

2. Pay yourself first.
Before you spend money, consider setting aside a certain percentage to save.

3. The perfect is the enemy of the good.
Don’t worry too much about getting this perfect the first time. If you want to begin investing, just do it.

4. Do what works for you.
There is no panacea for financial success. Different strategies work for different people.

5. Take it slow.
Success is not achieved overnight. My philosophy on this blog is one of a long-term and patient nature. Therefore, the content will be primarily aligned to that.

6. Failure is okay.
We learn a lot from failure. Check this video out. Famous Failures 

7. Money is more about mind than it is about math.
How you think about money will determine how successful you are.

8. It’s more important to be happy than it is to be rich.
Money gives you more options in life, but there is no correlation between happiness and money. Think about that.


Compliments of Get Rich Slowly. See here for full guide.

Monday, August 3, 2009

Personal Finance in One Page – Part 5


Control Your Own Destiny

The greatest part about this entire Personal Finance in One Page series is the end goal. As Trent says, it is not about being rich, it is about creating your own destiny. Wealth is the natural consequence of good personal finance habits, but the greatest part is financial freedom. Financial freedom allows you to do what you want to do, whatever it may be. Therefore, are you willing to forego immediate gratification for a life of financial freedom? That is a decision that you will have to make. Think about it and just have fun doing it. Save this blog to your favorites and continuously read over the tips as a reminder of what habits you need to develop. Soon enough you will achieve all that you planned.


Thank you for Trent of the Simple Dollar for allowing the free distribution of this e-book. For the entire e-book, click on link below. 

Everything you ever really needed to know about personal finance in one page, by Trent Hamm.



Personal Finance in One Page: Part 1
Personal Finance in One Page: Part 2
Personal Finance in One Page: Part 3
Personal Finance in One Page: Part 4
Personal Finance in One Page: Part 5

Saturday, August 1, 2009

Personal Finance in One Page – Part 4


Manage Your Money

When you increase your income or decrease your spending, you’ll find yourself with more cash at the end of the month. That cash is your ticket to financial freedom, and the more you can get each month, the better off you are. The trick though, is not to spend it, but to do things that will build a stable future for you.

1. Pay Off All High Interest Debt
Anything with an interest rate over 9% needs to go as soon as possible. The extra money should be used to make double or triple payments on these debts, focusing first on the one with the highest interest rate.

These steps can help you take care of your debt:
i. Make the first list – 4 columns, Name of debt you owe, the amount you still owe on that debt, the monthly payment for that debt, and most importantly, the current interest rate on debt.

ii. Order all of the debts by their current interest rate. The one with the highest interest rate, not biggest balance, should be paid off first.

iii. Look for ways to reduce the rates, focusing most strongly on the highest current one. Readjust the priority of the list to reflect to new rates.

iv. Direct all of your extra payments towards the top debt on the list. Each month, make minimum payments on all of the debts on the list except for the top one. With that top debt, throw everything you can at it. Make a double payment or a triple payment or more.

v. When a debt vanishes, cross it off the list and feel good about it.

vi. Update the list when you acquire a new debt.

vii. Update the list when one of your debts adjusts to a new rate.

2. Build an Emergency Fund
An emergency fund is an amount of money you keep in a savings account that’s intended to be used in the event of a major crisis, such as a job loss, a medical emergency, major car damage, and so on. It’s a good idea to measure your emergency fund in terms of months’ worth of living expenses – you should have a month and a half worth of living expenses for each person you claim as a dependent.

A good rule of thumb is to have 6 – 8 months worth of living expenses in your emergency fund. If this seems like a lot, set it as a long-term goal and begin putting aside a small amount each week. Right now, I have an automatic monthly deduction from my checking account to a high yield savings account at ING. Don’t wait, begin right now with as much as you can afford.


3. Max out Retirement
Go to one of those retirement meetings at work, ask exactly how much you should be putting away to ensure that your living expenses are well-covered in retirement, and put that much away. This varies a lot depending on how much you have in right now, how much your employer matches, and so on, so you should talk to your retirement planner at work about the specifics. It is never too early to start investing for retirement!

Save 10% of your income at the bare minimum. You should not have more than 5% of your retirement in the stock of any one company. If your company doesn’t have a retirement plan, open a Roth IRA on your own with a reputable company like Vanguard. If your company offers any matching on your retirement, contribute enough so that you can get all of it. If you don’t know what you are doing, put your money in a “target retirement” fund so that it gradually becomes less risky as you approach retirement.


4. College Savings
Establish a 529 college savings plan for them and start automatically putting a certain amount into this account each month. There are many different plans, just pick a good one and start investing now. I use the New York 529 Savings Plan managed by Vanguard for my lovely niece.


5. Pay Off All Debts
If all of these are covered and you still have cash left over, the next step is to pay off all of your debts. Get rid of car loans, student loans, and your mortgage using the debt reduction plan discussed in the previous section.

6. Invest
Now, this is a good time to start investing. Trent Hamm recommends buying low-cost broad-based index funds because they don’t have many fees and grow very nicely over long periods of time. Don’t invest in individual stocks unless you’re quite content to lose the money or want to invest many, many hours in research. Trent Hamm invest with Vanguard directly through – their fees are miniscule, they offer a huge array of index funds, and their customer service is stellar.


Thank you for Trent of the Simple Dollar for allowing the free distribution of this e-book. For the entire e-book, click on link below. 

Everything you ever really needed to know about personal finance in one page, by Trent Hamm.



Personal Finance in One Page: Part 1
Personal Finance in One Page: Part 2
Personal Finance in One Page: Part 3
Personal Finance in One Page: Part 4
Personal Finance in One Page: Part 5

Friday, July 31, 2009

Personal Finance in One Page – Part 3


Live Frugal

1. Maximize Every Dollar

Every time you spend money, you make a decision. Only you can decide what a dollar is worth and therefore make a value trade. The real key in maximizing your dollar is to raise your definition of what a dollar is worth.

Here is a list of a few tactics for reducing your spending and saving more money. See e-book for full list of 100. These are some of the main ones that stood out when I read through them. Great points to consider here.

i. Switch your bank accounts to a bank that respects you.

ii. Turn off the television.

iii. Master the thirty day rule. When you’re considering making an unnecessary purchase, wait thirty days and then ask yourself if you still want that item.

iv. Write a list before you go shopping and stick to it.

v. Invite friends over instead of going out.

vi. Give up expensive habits, like cigarettes, alcohol and drugs.

vii. Turn off lights before you leave.

viii. Install CFL or LED bulbs wherever it makes sense.

ix. Hide your credit cards.

x. Do a price comparison – and find a cheaper grocery store.

xi. Don’t spend money just to de-stress.

xii. Cancel unused club memberships.

xiii.  Do holiday shopping right after the holidays.

xiv. Try generic brands of items you buy regularly.

xv. Prepare some meals at home.

xvi. Go for reliability and fuel efficiency when buying a car.

xvii. Learn how to dress minimally.

xviii. Look for a cheaper place to live.

xix. Hit the library, hard.

xx. Find out about all the benefits of your job.

xxi. Read more.

xxii. Set up automatic debt repayment on your student loans.

xxiii. Exercise more.

xxiv. Always keep looking ahead.

xxv. Never give up.


2. Break Your Bad Habits

Spend some time looking at where you spend a lot of money and cut these routines out. Do you really need to buy a $5.00 cup of coffee every morning of the workweek. That adds up. Look at the things you do every day that requires you to spend a lot of money and make a decision whether or not they are necessary or could be replaced.

3. Master the 10 Second Rule

Whenever you pick up an item to add it to your cart, stop for 10 seconds and ask yourself why you are buying it and whether you actually need it or not. If you can’t find a good answer, put the item back. This helps with impulse buying.

4. Don’t Make Yourself Miserable

Don’t cut down on spending to the expense of the present. If you feel something is worthwhile, then do it. The main objective is to cut down on the unnecessary, not drive yourself crazy saving.

5. Don’t Forget the Big Picture

Because you have money, that does not mean that you should purchase an item. Consider your ultimate financial goal and determine what is a need to what is a fleeting desire.


Thank you for Trent of the Simple Dollar for allowing the free distribution of this e-book. For the entire e-book, click on link below. 

Everything you ever really needed to know about personal finance in one page, by Trent Hamm.


Personal Finance in One Page: Part 1
Personal Finance in One Page: Part 2
Personal Finance in One Page: Part 3
Personal Finance in One Page: Part 4
Personal Finance in One Page: Part 5

Wednesday, July 29, 2009

Personal Finance in One Page – Part 2


Earn More

1. Get Educated – Learn new things, read a book, take evening classes to get certified in a certain area, get a masters’ degree. Warren Buffett said the best investment one can make is in oneself; the return on this investment is usually ten-fold. Spend time on your personal and professional development.

2. Develop More Income Streams – Look for ways to make more money. Maybe you can use a hobby or skill that you have to make some extra cash; photography, writing, tutoring, designing etc. Maybe you have some extra cash that you can invest.

3. Start a Side Business – If you have some extra time after work, why not start a business? Write a blog with some ads, or design web pages, write programs or fix computers if you are good at it. There are a lot of opportunities right now and the startup costs have been drastically reduced because of the Internet. If you want to start a business for cheap, now is the time.

4. Move towards your Passions – Whenever opportunities present themselves, gravitate towards things that excite you. How do you know if you are passionate about something? How do you feel about it? No one can tell you this, only you would know. Think about what you are passionate about, writing code, leading others, drawing, photography, anything and just DO IT.

5. Don’t Burn Bridges – You never know when a relationship in your past might come in handy later on, even the ones you don’t expect. Never spread a negative word about anyone, it never helps. Avoid gossip, resist it. One thing I have learned is that your connection to others is what helps you get to where you want to go.

6. Keep in Touch -  When you build a bridge with someone, don’t let it get old and worn out. Spend the time to keep in touch with that person. Email or call them every once in a while to see what they are up to. When it is clear that they need help and you can easily provide it, always provide it.

Thank you for Trent of the Simple Dollar for allowing the free distribution of this e-book. For the entire e-book, click on link below. 

Everything you ever really needed to know about personal finance in one page, by Trent Hamm.



Personal Finance in One Page: Part 1
Personal Finance in One Page: Part 2
Personal Finance in One Page: Part 3
Personal Finance in One Page: Part 4
Personal Finance in One Page: Part 5

Monday, July 27, 2009

Personal Finance in One Page – Part 1


Spend Less Than You Earn
This is a fundamental rule in personal finance. Any personal finance book that you read will indicate this. It is the only way to generate savings, as this is the definition of savings; your income must be greater than your expenditure. The ‘gap’ as the image above indicates, is your savings and the goal is to make this gap as big as possible. It is this ‘gap’ that you will eventually put to use, in retirement accounts, 529 plans, investment accounts, real estate, savings accounts and so forth, that will eventually work for you. This ‘gap’ plus the power of compounding will allow you to achieve financial security, by your own definition.

What are we to do now?
The first step to take is to start tracking our expenses. How else would we know what how much our income and expenditures are? Therefore, to increase the ‘gap’ or savings, we would either have to increase our income, or reduce our spending. Tracking both helps us to know what falls in both those categories.

I recommend or Quicken Online, now that Microsoft Money is no longer being supported by Microsoft. I have tried both applications and they are both great. There are others as well, so use one that you are comfortable with. I prefer

Thank you for Trent of the Simple Dollar for allowing the free distribution of this e-book. For the entire e-book, click on link below. 

Everything you ever really needed to know about personal finance in one page, by Trent Hamm.



Personal Finance in One Page: Part 1
Personal Finance in One Page: Part 2
Personal Finance in One Page: Part 3
Personal Finance in One Page: Part 4
Personal Finance in One Page: Part 5

Saturday, July 25, 2009

10 Habits to Create Wealth

This is a great post done by Christian PF. These are the 10 habits.

1. Make it your daily mission to find your true financial purpose.
Know exactly what you want to achieve financially. Is it financial independence, zero debt or a new home? Set goals, know what you are saving for, why you are saving and what meaning the end results would have.

2. Make new choices daily.
To create wealth requires a change of habit. More attention must be paid to each dollar; every dollar must be seen as valuable. It is not that you are being extremely frugal, but it is a mindset that must be created that embeds in your consciousness the value of money. Now the choices you make will automatically be influenced. For example, you will choose to make lunch at home to take to work instead of spending $10 a day dining out.

3. Associate with positive, like-minded individuals.
Minimize your exposure to negative people. It is amazing the effect they can have on you. Connect more with people who are positive and motivating. These people can make you believe that anything is achievable, and this is an important step in creating wealth; first believing that you can.

4. Educate yourself daily.
Attempt to learn more about finances. It may sound overwhelming or challenging, but it is really not. Any topic that you are not familiar with may seem intimidating. So all that is really needed is familiarity. Familiarize yourself with topics of personal finance and investing so that you will be knowledgeable about it. It does take time and effort. Subscribe to a personal finance or investing blog that you like and read it daily. Every little bit of knowledge helps. Trust me.

5. Practice self-control.
Do not act on impulse. With this new mindset in #2, every decision to purchase is evaluated based on need and priority. Yes, there are times where you treat yourself, but even those times are evaluated, because financial independence, by your own definition, is what your main priority is. So you develop the ability to defer gratification as independence is more important than getting the latest gadget that is released.

6. Hire a team of advisors.
The knowledge that you can get from these advisors is priceless. Right now, I am self-educated and do a lot of reading myself, but I do understand the importance of experience that a tax planner, or accountant may bring.

7. Develop the habit of analyzing your expected return on each investment you make.
For every investment you make, consider what your return is. Profit is highly dependent on the purchase price not the sale price. Pay a low enough price for an asset, and the high return would be automatic. The best investment you can make is in yourself, so dedicate a lot of time to self-improvement and self-development; the return on this investment will usually be ten-fold.

8. Don’t try to look wealthy, look to become wealthy.
This is an obvious point that is overlooked. I thank ChristianPF for mentioning this. Focus on your assets and not your liabilities. Assets create value for you. Liabilities, on the other hand, take value from you; that is, they require you to make payments. Liabilities are also items that you buy that do not add any value, but lose value over time as well. However, know that they can serve beneficial purposes; keep that in mind. For example, books bought to educate yourself on personal finance lose value over time, but do give you a lot of knowledge. Minimize your payments you make and increase the payments coming to you.

9. Give generously to others. Share your time, money, and assets.
Most wealthy individuals understand the importance of giving. Giving can be done in different capacities; giving of knowledge, time, money or resources. The realization that one has the capacity to help others achieve what they want is a great advance of consciousness. Dr. Wayne Dyer said that the best way to achieve what one wants in life is to give it to others. I totally agree with this. By giving it away to others, you would realize that you had it all along. I wrote a recent article on the importance of giving. It is one of my favorites. Check it out. Wealth and Charitable Donations

10. Most important, Always stay true to your principles.
Warren Buffett said that if something seems too good to be true, then it usually is. Always stick to what you understand and do not chase after get rich quick schemes. Once you stick to what you understand, you will be clear as to what the risks are and the surprises will be minimum. This becomes so very important when you start investing.

Inspired by a great post from ChristianPF.


Friday, July 24, 2009

Warren Buffett Cartoon coming to AOL

secret-millionaires-club-logoThe interview below shows a clip of the Warren Buffett cartoon that will be coming to AOL soon. These new webisodes will aim to teach young people about finance, investing, science and the environment.


I think this is a great idea and I am sure you can agree with me if you take a look at the clip below. Warren Buffett also talks about the inflationary environment that can be expected as a result of the high spending of the administration today. As always, a wealth of information from this 18 minute clip.


Monday, July 20, 2009

Jamie Dimon speaks at Harvard Business School

Great speech on leadership by Jamie Dimon, C.E.O. of JP Morgan Chase.


Sunday, July 19, 2009

U.S. Bancorp CEO, Richard Davis on Banking

Thanks to Noise Free Investing for finding this video.
One of my favorite banks in the U.S., US Bancorp, C.E.O. talks about banking in the 21st Century.

Saturday, July 11, 2009

Wealth and Charitable donations

Kiva - loans that change lives

A recent conversation with a friend inspired me to write this. Many of us, at some point, would love to give back to charity for a variety of reasons.

i. It means that we are financially secure and in a position where we can give back. That alone says a lot.

ii. It allows us to feel good about the act as we know that we are helping others.

iii. We feel good about ourselves for doing so.

However, I think we really underestimate the importance of charitable giving. Why do I think it so important?

Success is a field that one creates

Many do not realize that material or financial success is the result of a state that is created. It is the result of an energy field of abundance that one generates. Contemplate on this for a moment; if you think that you lack something, there is no other way for that to be interpreted by the Universe; it recognizes that as lack. Therefore, if you say you do not have money to give, then that is precisely the experience you will have and continue to have. You merely have to think it and that will be your experience. We all know how powerful our thoughts are.


What you hold in mind tends to manifest

This idea may sound familiar to you; it is often referred to it as the law of attraction or the law of abundance. These laws are right; what you think about tends to manifest. For those who understand quantum mechanics and the Heisenberg Principle, it refers to the idea that once you think of something (once the concept is observed by the observer), you collapse the wave function, and now potentiality can become actuality. Essentially, once an idea is held in mind, you increase the possibility of it occurring. This can be a positive idea, or a negative idea.

A typical example is that of a negative person. It is usually the case that this person will have a negative view of the world that is seemingly justified by experience. What is unfortunate is the person does not realize that they are in essence creating their negative experience that just reinforces their thoughts, and it is not the experience that is the cause of the negative feelings. As soon as this realization occurs, the person will witness the experience changing as a result of having a different perception; a different way of seeing and thinking about things.


The rich get richer and the poor gets poorer

It is no coincidence that the poor get poorer and rich get richer. The poor tends to creates a field of energy that emanates poverty, debt, unemployment, lack and so forth. By the law of attraction, these experiences are drawn towards them and they end up in a never-ending cycle of lack. On the other hand, the wealthy and successful exhibit different qualities. They emanate energies that are aligned to abundance, opportunity, employment and so forth, and therefore attract those sort of experiences. This is why many charitable models or programs that choose to give money to poor neighborhoods are not successful because the existing energy field is not influenced. Similar behaviors are still exhibited when the impoverished are given money and the money will inevitably be wasted. However, if funds are instead directed to education, or provide facilities to them, they are soon able to rise out of it and help themselves. This has proven to be more successful.


Give now, don’t wait.

In order to create an energy field of abundance around you today, give today. If you think that you do not have enough to give now, then you are exhibiting lack of abundance and this is what your experience will be. Establish a mentality where giving is habitual and you will see how different your experience is. Give now, why wait? Giving in any capacity now says to the Universe that you already have abundance and you will therefore attract abundance. The only way to influence an energy field is to be the energy field.

Considerations when making charitable donations

1. Give to an organization or cause that you are passionate about. This makes the feeling much better. Once you feel better, you automatically generate a different energy.

2. Give any amount. Many believe that you have to give large amount to have an impact, but every little amount helps. Imagine if everyone gave a little, how much would that be? I donate to monthly and I love it. I read up on the stories of people starting businesses worldwide and help someone I really feel for. It is a great way to help others help themselves.

3. Give consistently in order to establish this as a habit. It becomes easier with time. The effects are enormous.


Monday, July 6, 2009

Five things to do if I were graduating in May

The ideas from The Social Path were very interesting and not what you would normally see. It does suit this age of technology and social media.

These are the points mentioned:

1. Adjust Facebook privacy settings.

2. Start a new blog for professional life.

3. Google myself. Then scramble to improve the results.

4. Spend a lot more time on my virtual portfolio.

5. Focus on finding a job where initiative won’t go to waste.

See details at

Wednesday, June 24, 2009

Learn all about Credit Cards

In my usual traversing of personal finance blogs, I found this article on Wise Bread about credit cards. Given what’s going on in the financial industry today, with credit and change in consumer habits, I think it is important for us all to be educated about credits. It is surprising how many of us really do not know how to effectively use them. As with anything else in life, it is not the credit cards themselves that are bad, it is how they are used. Therefore, educate yourself about them, and they can be advantageous to you.

Check out the article from Wise Bread..>>>

Monday, June 8, 2009

The 12 Secrets of Wealth

This article discusses some simple yet, great ideas on achieving financial independence. These could be considered secrets, but they aren’t really. Most of these points we all know of.

Here are a dozen of the non-secret "secrets".

1. Pay off your credit cards.

With credit card rates at 15% to 20% (or even more), there's just no risk-free investment that can provide you with as good a guaranteed return as you'll get by paying off your high-interest credit cards. (If you have multiple credit cards, pay off the one with the highest rate first.) Once you've paid off your credit cards, only charge what you can afford to pay off in full each month.

2. Live below your means.

Try to save at least 10% of your income. (20% would obviously be even better.) Regardless of how much money you make, if you don't live below your means, you'll never achieve financial independence (unless, that is, you hit the lottery or get a large inheritance, and I wouldn't recommend planning your financial well-being around either of these options).

3. Differentiate between needs and wants.

Fund your needs and try to minimize your spending on the "wants". (You'll want to discuss your goals, and how you plan to achieve them, with your spouse or partner. It's so much easier when you're both on the same page, working as a team to achieve your financial goals.)

4. Start to save and invest early.

Pay yourself first. The earlier you start, the more time you'll have to let the power of compounding go to work for you.

5. Establish an asset allocation plan that's appropriate for you.

Determine the percentage of your portfolio that you want in equities and the percentage you want in bonds, based on your needs and your risk tolerance. (In your planning, remember that over your investing career, you'll inevitably experience at least one bear market (perhaps more), during which you should be prepared to lose as much as 50% of your equity holdings. So, a portfolio that's 80% equities and 20% bonds could lose ~40% in a bear market. You need to set your asset allocation according to the amount of risk you're willing to take so that you don't panic and sell at the bottom of a bear market, after the damage has already been done.)

6. Invest in a diversified portfolio of low-cost mutual funds.

Choose the low cost funds needed to flesh out your asset allocation plan. (I'd recommend Vanguard, the low-cost leader.)

7. Contribute to your company retirement plan

(at least enough to get the company match). If your company doesn't have a match, and has poor investment choices with high costs, consider other available options.

8. Contribute additional money if you can.

If you qualify, fund a Roth or Traditional IRA.Then fund your taxable account.

9. Minimize taxes.

When you invest in a taxable account, place your tax-inefficient holdings (like bonds) in your tax-deferred accounts and tax-efficient funds (like Vanguard's Total Stock Market Index Fund) in your taxable account.

10. Save part of every raise.

When you get a raise, invest at least half of it. (Even being able to spend the other half of your raise is an increase in your spending, so you can certainly do it!)

11. Rebalance.

When you rebalance back to your desired asset allocation, you're controlling risk. (You're selling high and buying low, and that's the "secret" to successful investing.)

12. Stick to your plan

and watch your financial garden grow. (You do have a plan, don't you? See #5.)


Tuesday, June 2, 2009

FMF: Advice for People Early In Their Career

This is a post written by a guest of Free Money Finance. 
I thought it presented some great advice, but is of course situational. 
It is geared to recent graduates who have intentions of working for big companies. 
Read the entire article, I feel certain you will get something out of it. 

FMF: Advice for People Early In Their Career>>>


Frank Jerome

"The greatest thing one can do for the world is to raise one's own level of consciousness"....~Dr. David Hawkins

Renter's Insurance

I found this great article on Renter's Insurance for recent college graduates. I do not have renter's insurance, but the point of this blog is also to provide you with information to make decisions that best suit your personal situation. Check out the article through the link below.

Money Smart Life article on Renter's Insurance>>>


Frank Jerome

"The greatest thing one can do for the world is to raise one's own level of consciousness"....~Dr. David Hawkins

Monday, June 1, 2009

Tips to Help Establish Your Emergency Fund

Most personal finance sources recommend that an emergency fund is set up once a decision is made to become financially independent. What is an emergency fund? It is an accessible savings account where you keep cash for true emergencies, like the loss of a job or a medical emergency. Financial advisors usually recommend that they should contain enough cash to cover three to six months of all expenses.

Consumerism Commentary, a great blog for anyone interested in personal finance, listed 50 tips to assist a beginner that may be pressed for money. These are a few that I think are important. The main article will be provided below; I highly recommend it.

1. Open a high-yield online savings account with as little as one dollar.
I chose ING Direct because of its user-friendly website and ease of signing up. It is also known to be amongst the highest with respect to yields.

3. Empty your pocket change into a jar every night.
This adds up and if you understand the power of compounding, every penny counts.

4. Bring your coin jar to the bank every month.
An obvious follow-up to #3.

9. Bring your own lunch to the office.
This is big, especially for you new graduates out there. It is really not necessary to dine out every day. You can save so much money if you made sandwiches and brought to work. $5 minimum a day, $25 a week, $100 a month, $1200 a year. Don’t know where you can get lunch for $5.00 though. So this is really a conservative estimate.

11. Drink soda rather than alcohol when you are dining out.
I am not a regular drinker of alcohol, but it is an expensive activity.

17. Create an automatic deposit to your savings account.
This is a set it and forget it strategy. I recommend this because you learn to do without the money that goes to a savings account that you don’t touch. This is how I am building my Emergency fund. Every month I add $500 to my savings account through an automatic deposit.

19. Don’t consider your emergency fund part of your spending money and keep it hidden.
This is very important. I don’t recommend touching this fund unless for emergency purposes.

46. Don’t be an early adopter of new technology.
I had a professor that said anyone who bought the first iteration of the IPhone were suckers. Why? well it cost them $600. A month or so later, Apple cut the price in half. Now, the new IPhones cost only $199. It always pays to wait when it comes to the new technologies. It is only a matter of time before the prices go down. I am waiting for the Amazon Kindle to go down as I type this article.

49. Consider adopting a frugal philosophy, at least until the emergency fund is in place.
A great way to end it off. A philosophy is a way of life; a way of thinking. Your thoughts eventually become your habits and is then reflected in your lifestyle and personal wealth. This may be the most important of them all, especially if done throughout one’s life.

See full article at Consumerism Commentary>>>

Sunday, May 31, 2009

Don’t Buy Stuff You Cannot Afford

This video is humorous, but the advice is irreplaceable. When considering purchasing an item, no matter how trivial it may seem, it’s good practice to think about the following:

1. Do I have enough cash to pay for it fully?

2. Can I buy it without borrowing money?

3. If I waited a month, would I still want to buy it?

4. Does the purchase have no effect on my fixed expenses?

If the answer is yes to all these questions, then it may be affordable (not necessarily needed though). However, the important message here is to develop a habit of not spending money on things that you can’t afford. The limit on your credit card is not your own money. It is important to understand the difference. Cash and credit are two distinct things. Cash is what you own and credit is borrowed money; this is a simple way to view them.


Don’t buy things you can do without

We can take this a step further. Do not buy things you can do without. This removes the desire to have a lot of things because you have become detached from the importance of these items in your life. If items are not perceived as important, it is very easy to not want them. Of course, you can buy things that are enjoyable, but the choice now becomes easier and you realize that you ultimately buy less things than you would have under the previous mindset.

No debt

The main objective is to reduce the amount of debt that we have. The majority of Americans are drowning in debt, and the only way to take control of this is to adjust ones way of thinking. The first step is to change ones behavior through thoughts. If I think I do not need something and I adopt a habit of not spending money on things I do not need, then everything else will be taken care of. What will the result of this behavior and thinking be: zero debt and a feeling of more control over ones personal finance.

This is a very simplified illustration, but I believe the point is clear. This is personal finance in its simplest form.

Sunday, May 10, 2009

Balance happiness today with the security of tomorrow

justice scale

The inspiration for this piece comes from a story I read on Get Rich Slowly. The blog post talks about a couple who spent their entire lives saving money only to die without having had the chance to use it.

After reading many of the comments that the readers left, I got a sense as to what the community thought. I must say it varied; it is very intriguing to read. I recommend taking a look at it. The link will be posted below at the end of my reflection on it.

Brief Summary of Story
The husband of an elderly couple passed away and his wife found out through the accountant that she had approximately $4 million in savings; money that she was not aware of. She went on to say that she wanted to do so many things in her life; buy nice clothing etc., but was never able to because of financial reasons. So she then went out and started buying things she always wanted, only to die a week later than her husband.

The overarching message in this story is to have BALANCE. Yes, from the perspective of personal finance, it is important to be frugal, and pay specific attention to expenditures, but it should not be at the sacrifice of your happiness. As the title of my blog posting says, we should balance happiness today with the security of tomorrow.

What do I mean
Well I believe it to be a wise choice to prepare for the future, but it should not be at the expense of the present moment. You only get to experience life now, so your present should be given highest priority. Consequently, there is a difference between doing that  and impulsive spending on things you think you want or need that will make you happy. One says that you should really take the time and invest in yourself; things that you really enjoy, you should do it, but it should be done wisely and everything should be taken into consideration; other activities, expenses, education, children, spouse etc. On the other hand, one could merely make impulsive purchases, buy unnecessary things without future considerations, be reckless with money and rack up a lot of debt, and do not save or invest. This normally does not create a condition for future wealth.

I do think that doing things that you love allows you to really connect to Divinity, that creates a condition of fulfillment.

Deeper meaning

“There is no correlation between money and happiness.”

It would otherwise be very difficult to find someone with very little money who is happy. Or, most people with a lot of money will have the highest level of happiness. You can see how idiotic those statements are. Another way to look at this is to really think about where your happiness comes from. Happiness is a state of perception. Dr. Wayne Dyer said it and he was right.

Everything that I experience in my life is a result of my perception of what’s out there in the world.”

At a certain level you realize that happiness is a state within and is not achieved by striving for things on the outside. There is nothing out there that can bring happiness into your life. Change your perception and change your life; amazing things will happen.

Check out the article and the comments at Get Rich Slowly here >>>