Today I just wanted to take a moment to remind all what Memorial Day is really about. I know most of us celebrate with days off from work, cookouts, boat rides etc., but the holiday is actually about remembering our fallen military servicemen and women for all of their sacrifices. The holiday used to be called Decoration Day, since it had (and has) become common practice to decorate the graves of fallen military soldiers throughout the years. Nowadays, many people include all family members in the graves they decorate. So today, as you enjoy your time off from work and sit back and relax, don’t forget to remember those who gave their lives to secure your health and freedom. The national moment of remembrance and silence takes place at 3pm local time, if you are so inclined!
Archive for May, 2010
Memorial Day!
Monday, May 31st, 2010The lottery is robbing potential millionaires…
Friday, May 28th, 2010In a new post on The Consumerist, the author shared that a recent study found that poor people, those making under $13,000 a year, spend 9% of their income on lottery tickets. As sad as this fact is, it gets worse if you think about it.
So, I did a little math, and if these people, who don’t make above the poverty line, invested that 9% of their $13,000 a year, which works out to $97.50 a month, over 50 years with a 9% return over that time (reasonable rate of return), they would have a little over $1 million dollars at the end! Yes, you read that right! $1 MILLION dollars at the end! That means that there is a good chance for ANYof those people earning $13,000 a year to have a million dollars when they retire, if they are disciplined enough to invest what they spend on a chance at instant gratification!
And that’s the difference, isn’t it? Most of us DO NOT win the lottery. We know that it only parts fools from their money. What truly helps people build wealth is discipline with their money and the ability to wait for the payoff over time. Problem is, I don’t know if a poor person would believe me if I told them that they could have $1 million dollars when they retire. However, given the study and the little bit of math above, we hope you decide that the lottery is a waste of money and perhaps saving to become a millionaire isn’t as hard as you once thought it was!
What it truly means to live within your means!
Wednesday, May 26th, 2010We all know that living within your means is, in its most basic form, living within your household budget. However, I wanted to point out that there are many other ways that we overspend at work, for example, that can be adjusted and will help more people than just ourselves!
Let’s talk about being a teacher. It’s a truly stressful job. They have 100 students (at least) every day that need to be educated with not only the subject that the teacher is charged with teaching but also the life lessons that some of our more lackadaisical parents “don’t bother to” or “forget to” teach their children at home (FYI…it is NOT the job of a school teacher to teach your children the good morals and values of our society…that is in YOUR jurisdiction!). Needless to say, it’s a little overwhelming. What’s more, the money system set up around the education system (at least the parts I know about, as I am not an expert) is ludicrous. For example, the school system allots each teacher a certain number of copies that they are allowed to make per year on the copy machine, and if they want to make more, they have to pay for them! That puts added and undue pressure on the teacher, because let’s face it, toner and copy paper are cheap.
However, silly as it is, it is the workplace version of “living within your means”. But not all teachers do. They will either spend money out of their own pocket to buy supplies, or send home a list of supplies that the parent MUST provide for all of the various projects the teacher wants to do. All I have to say is, my oh my, what a mess! Teachers are given a budget. They should have to work within that budget (and yes, I am absolutely certain that their budget is too low and doesn’t help much, but it is what it is). By buying supplies out of their own pocket, they are saying that the budget is meaningless, and that sets the wrong example for the students. I love the generous nature, but they shouldn’t take the burden on themselves and set a bad example for the children. And if they decide to pass the cost onto the parent? Well, the parents at home have their own budgets and money problems to worry about, and the decision to have all of these wonderful projects impacts them too!
So, what is a teacher to do since they’re being squeezed on both sides? Get creative! If they figure out less costly projects and methods for teaching the same lesson, they will be able to stay within the budget the school set for them without passing the cost on to the parents! I know that the replacement projects won’t be as full of bells and whistles, but the object of the lesson is to teach something, and that usually doesn’t require fancy projects. Also, as long as the teacher has a computer with an Internet connection, she can show the students whatever she wants to show them! For example…let’s say the teacher originally wanted to have the students build volcanoes for science class. All she has to do is have them read the chapter, discuss it in class, then show the students this on the projector. It’s not AS cool, but it works and it’s pretty much free!
I’m not trying to pick on teachers, just so you know. I just wanted to give an example of how we have a mental disconnect between living within our means at home and at work. We shouldn’t be frugal at home and a spendthrift at work. Apply the same principles at both places, and get creative on your savings!
Refinancing to save long term…
Monday, May 24th, 2010Lots of people like to talk about refinancing your home to save money on your monthly payment, and it’s true that if you’re struggling to make your payment, this will help you in the short term, but what if you aren’t struggling to make your payment? Should you refinance? Well, if you’re on a 30 year fixed rate monthly payment, then yes, maybe you should.
Plugging in some numbers on Bankrate.com, a 30 year, 6% fixed rate mortgage on $150,000 runs about $899.33, whereas a 15 year 5% fixed rate mortgage (they will usually give a lower rate to a shorter term loan) on the same $150,000 is $1186.19. Given this information, yes, it’s obvious that the 15 year mortgage is more money per month, even with a lower rate. However, what I wanted to point out to you is that it’s a little less than $300 a month extra…to pay your mortgage off in HALF the time! Not only will you be paying off your mortgage in half the time, but the total cost of that 30 year loan will be $323,757.28 versus $213,514.28 for the 15 year loan. That means you save $110,243 over the life of the loan! I bet you’d rather that money go toward retirement as opposed to lining the pockets of the bank! I know I would!
So you say you can’t afford the extra $300 a month? Well, what can you afford? After making sure that you don’t have the type of mortgage that penalizes you for paying it off early, you should look into how much extra you can pay toward the principal per month (that doesn’t interfere with your retirement). Every little bit helps, and you will save thousands more by paying it off early. Another option, is that if you’re “Gung-Ho” about getting that 15 year mortgage, but can’t afford the payment on the loan amount, perhaps you should look at a less expensive property. We all have to buy within our means. This means that some people can afford a half a $500,000 house, and some can afford a $100,000 house. You shouldn’t be upset or discouraged if you can’t afford the more expensive house…what you should be is excited when you pay off the house you can afford in only 15 years, and know that it is ALL YOURS! I’d rather own a modest home then be drowning in debt in a nice home that I’ll never realistically own, and I bet most people would if they took the time to think on it.
So, my advice to you for saving on your mortgage is to consider spending a little more now on your monthly payment, as it will save you a bundle over the long run!
Words of wisdom for the new graduate!
Friday, May 21st, 2010I found a very interesting article on CNNMoney.com today, featuring some practical and funny advice for those people graduating from school (whether that be high school, trade school or college). The article, titled 3 things to tell a new graduate, lists the following bits of advice, in no particular order (at least, I hope it’s not in order):
- With regard to your career, the author suggests that you heed your enemies. The logic behind this advice is that the people you have trouble with are generally those people that have the greatest insight into you and your attitudes and faults. What these people have to say will help you improve as a worker/entrepreneur…if you only take the time to listen.
- With regard to the stock market, buy and hold your funds. The author and I agree on this…people think that they can beat the stock market, but in reality, almost no one can (and you are probably not the exception). If you buy funds and then keep them over the long run, you’re more likely to make money, at the very least thanks in part to the ability to avoid taxes and other fees.
- Don’t be a fool with regard to your love life. When lovers quarrel, each has the blame around 50% of the time. Understanding this fact will help you build the kind of relationship that isn’t as susceptible to a divorce. And as all of us know, either from personal experience or the experience of a friend or loved one, divorce sucks. We don’t want it and should avoid it at all costs (both financially and emotionally).
That’s it. 3 very simple little lessons that might save you a lot of headache or heartache as your graduate enters the post high school, trade school or college life that they have worked so hard to achieve.
The power of your thoughts…
Wednesday, May 19th, 2010I read a quote earlier this week, and it inspired me to write this post. The CEO of Independent Means, Joline Godfrey, was quoted on CNNMoney.com as saying that we should “Raise our children to make a job, not just take a job. If they don’t know how to create a plan, they’ll always be beholden to someone else.”
I LOVE this statement. It shows the power that your thoughts and your point of view can have on your life and your future. You see, all too often we take the “glass is half empty” approach to life. We are pessimistic, we expect the worst out of life and out of people we know and meet, and more often than not, we shouldn’t be doing that.
I like to say that if you want a different outcome, you have to take a different path, and that you shouldn’t let life happen to you, you should happen to your life. This way of thinking/doing things puts you in a better position to make positive and, on occasion, very lucrative/beneficial decisions for your future because you’re not just following the simple path or a previous path…you’re challenging yourself to be better. This is the same idea behind Ms. Godfrey’s statement. By telling people to raise their children to make a job and not just get a job that someone else is offering, she’s not just telling people to be entrepreneurs, she’s telling them to think for themselves, think of what they can make of themselves, and to learn how to plan for their future. In my opinion, one key difference between the “haves” and the “have nots” of this great nation is that the “haves” have created and are on a plan. They think positively and shape their point of view to the path that best benefits them. It doesn’t ALWAYS matter what plan you’re on…more often than not, it just matters that you’re on a plan.
Just a little food for thought in the middle of your week. Try a different approach. Think positively. Create a plan. See how things turn out.
Trimming home insurance costs…
Monday, May 17th, 2010It’s time for spring cleaning, and in our opinion, that should include cleaning up your budget and bills. Given that information, today I wanted to offer a few tips on cutting the cost of your homeowners insurance. Here are a few ideas:
- Raise your deductible to $1,000 – Let’s face it…if you ‘have to use your insurance for your home, you’re likely to have to spend WELL OVER$1,000 on whatever the repair might be , and you could save up to 25% off your yearly premium! It’s a good choice! Plus, if you have an emergency fund, like we suggest, of at least $1,000, then you would have the money to cover the deductible.
- Use the same company for both your auto insurance AND your homeowners insurance – This is a no brainer! Most insurance companies offer discounts when you have multiple accounts with them, which could amount to 10% off your premium. No sense paying an extra 10% just to be able to use 2 different companies. Find the company with the best rate for both policies and go with them!
- Check with your insurer to see if they offer loyalty discounts – Not all of them do, but the insurance companies that do will give discounts up to 10%. It’s worth looking into, although you might have to have been with them for several years (at least 5).
- Install dead bolts and/or a security system – Not only is it a safety issue, but it’s a good way to save an extra 5% on the homeowners policy. Check with your insurance company to see if other safety features can be added to your home to increase the discount even more!
Whether you implement all or just one of these tips, you will see the difference on your bill, and that money can be used as savings, debt payment or additional funds for another under-funded budget category. “Trimming the fat” out of each bill is a key way to making your budget work for you!
Update on Microsoft Office for free!
Friday, May 14th, 2010Today we’re sharing an article titled Like free software? You’ll love Microsoft Office 2010, that is an update to a previous post on our website.
As of this past Wednesday, Microsoft released its Office 2010 Suite to businesses around the globe, and is planning a release date in June for individual consumers. Why is this big news? Because this release includes an online component called Web Apps…for FREE!
So, what are Web Apps? They are applications that have the ability to create, edit, view and share files online, similar to GoogleDocs, that are accessed on Microsoft’s SkyDrive website. And the best part is that you don’t have to buy the software suite to be able to use the online tools! Microsoft has made the decision to offer most of Office 2010 (some things are disabled) for free to anyone in an attempt to compete with (squash??) the rising popularity of Google Docs.
Basically, they want you to use their software! They want that brand loyalty to continue! They DO NOTwant you to switch to Google Docs or Open Office! Microsoft finally realized that in order to keep their brand in use and popular with the younger and future generations, they were going to have to offer some things for free. On top of that, they are offering free storage space on their SkyDrive website for your documents, so you don’t even have to save it to your own PC (which is a little weird to me, but I’m skeptic).
For those of you that want “your own copy”(those of you who are even more skeptical than me), there are some acceptable price point packages. For a middle of the road package, you can get Microsoft Office Home and Business, which sells for $279 in a box (in the store), or $199 for a product key and includes Word 2010, Excel 2010, PowerPoint 2010, OneNote 2010, and Outlook 2010. If that is more than you need, you can pay $149 for the box version or $119 for the product key card version of Microsoft Office Home and Student. This package offers Word 2010, Excel 2010, PowerPoint 2010, OneNote 2010, and the Office Web Apps. The best part about this package is that it is available in a Family Pack, allowing use on three computers in one home, and let’s be honest…for the average user, this would be all you’d need.
Our suggestion is to use the Web Apps tools online for free. Learn to do what you need within the free version (as there will be disabled parts) so that you can save a bundle!
Planning for the future…
Wednesday, May 12th, 2010Whether or not you’re in high school, college or are already out in the world in an established career, you have to plan for your future.
As a person already in an established career, you continually have to plan for retirement (which we talk about all the time). This is a normal practice in life. Unfortunately, something else that has become even more commonplace is finding a new career. With unemployment high and layoffs climbing, many of you in established careers are finding yourself without a job as companies have to make cutbacks to stay solvent. You are therefore planning for the near future, and have to figure out if you want to stay in your current career or if you want to change paths. You are therefore in the same boat as the high school student and the college student. Having the right information can help all of you make your decisions easier.
A recent article on Walletpop.com and another website offer great information regarding the top career choices for graduating college students and the top salary earning careers in general. These resources should help those of you in the process of planning your future careers or discovering potential new careers get an idea of what you can expect (it is a guideline…salaries do vary based on your geographic location in the U.S.) as far as monetary compensation. Keep in mind that not all careers will be on the lists, and if you’re looking into a different career, you can check out Salary.com for more information.
Is this information necessary to plan a future career? No. And you certainly shouldn’t choose a career ONLY based on the income. We would never recommend that, since it would mean the potential for an unhappy work life (which is not successful living). However, if you have a few career choices in mind, and feel you would be equally happy at all of them, it doesn’t hurt for income to be a factor in your decision. After all, more income means a heftier nest egg, college fund (for the kids) and hopefully the ability to spend more quality time with your family. That kind of information is always welcome when making a decision!
Interesting and controversial way to make money!
Monday, May 10th, 2010Our regular readers know the types of suggestions that we typically make for making extra money, so this might come as a shock to you, but today, we wanted to suggest making money by selling your eggs or sperm!
While goofing off this weekend, we ran across this article and this article that talked about sperm/egg donations, and we thought it was a great idea for a way to make extra cash!
Now, you should know ahead of time that it isn’t the shady type of operation that most of us picture it to be. These are upstanding businesses that are helping infertile couples get pregnant. Are they doing it for free? NO! Of course not, because they are a business. So if you have moral problems with making money off of helping people achieve pregnancy, this is probably not the route for you. Also, if you worry that you will have children running around everywhere marrying each other, this is probably not for you. If, however, you believe it to be a good and vital part of our society that helps people create the family they have always wanted, then you should consider donating, especially given to income potential!
Does it pay well? Yes, as a matter of fact it does! After the routine psychological and physical screenings that a potential donor has to pass, they are admitted to programs that can make them $500-$1,000 a month (for sperm) and $5,000 -$10,000 per removal (for eggs). That’s a lot of money for something we already have in our bodies! I’m sure that you noticed the compensation disparity in eggs versus sperm, and I want you to know that there is a reason. While men can donate relatively easily, women have to go through hormone therapy and a minor surgical procedure to donate, so the risks are higher.
Does everyone get accepted? No! The screening process is very stringent, and most applicants don’t make it through. Those that do, however, get a decent sized paycheck and the knowledge that they have helped couples all over the country, and that is a truly worthwhile extra “job”!
