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:
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.
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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: http://www.freemoneyfinance.com/2009/11/what-real-millionaires-do.html]
Rami Sethi, writer of IWillTeachYouToBeRich.com, 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.
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.
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.
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.
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
Steer clear of these 10 things experts say can mangle your score.
Don´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. 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
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
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.
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.
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?
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.
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.
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.
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.
RELATED LINKS:
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
