Links To Carnivals From November 17 to 23, 2009

Here are the links to the Carnivals in which My Wealth Builder participated from November 17 to 23, 2009:

Baby Boomers Blog Carnival #14

Carnival of Financial Planning #116

Economy and your Finances

Carnival of Twenty-Something Finances

For some interesting articles from the blogosphere, check out these Carnivals and give the hosts some recognition for their hard work.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial or economic advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Why I Don't Shop on Black Friday

Black Friday is an annual event for retailers to entice consumers into stores with special, low price deals that aren't offered any other time of year. Every year, I enjoy reading about the great deals I could get. And every year, I enjoy staying home and avoiding the mad rush. Here are my reasons for not shopping on Black Friday:

4:00 AM is too early to rise. I'm not getting early on to go shopping. To me, it seems ridiculous to lose several hours of sleep for a chance at a good deal. When I was working, Black Friday was a holiday. Now, I'm retired and every day is a holiday:-) I'd rather get the sleep time.

If I needed it, I would have already bought. I follow a principle of buying only what I need. A great sale price does not change an item from the "not needed" category to the "needed" category.

Limited quantities mean I won't be in time. A lot of the great deals often have a disclaimer such as "limited quantities, minimum of (single digit) per store." Thus, only the first few customers wanting to buy the item will get it, meaning my chances are a like a lottery.

So this year, as with previous years, I will be sleeping and missing all the great deals from retailers.

For more on Strategies and Plans Ideas, check back every Monday for a new segment.

This is not financial or shopping advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

I Believe these Events are Inevitable

After watching the new administration over the past 10 months, I believe the following will happen in the next few years:

High inflation. The high level of deficit spending by the government is bound to create significant inflation. The more dollars that are printed, the less they are worth. In addition, as the dollar is devalued versus other currencies, the cost of imported goods will go up.

Higher health care cost, lower quality. I have yet to see our government reduce spending, cut costs, or improve efficiency in any area and I don't expect it to be any different for health care. If the recent dispute over the use of mammograms is an indication, I also expect health care to be worse for the users of the government health care system.

Taxes will be higher for everyone. Only taxing the rich can't work, because the rich don't make enough money to cover all the additional government spending, even if they were taxed at 100%. The government will figure out a way to increase taxes on the broader population, even if they aren't call taxes.

Recession recovery will be slow. In my opinion, the government has used to recession to create political programs, instead of delivering the necessary economic programs. For example, about 25% of the $787 billion stimulus package has been spent to date. If it was so critical to rush the legislation through Congress, why has only such a small percentage been spent over the first 9 months?

Based on the direction that our government is taking, I see these outcome being very possible. I would be very happy to be proven wrong. In the meantime, we'll be modifying our financial plans to account for the possibility of the above scenario.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial or economic advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Not Aging Gracefully

In my opinion, aging gracefully must be an urban myth that's been perpetuated by personal development or self help literature. I, for one, am not aging very gracefully. Here are my examples of ungraceful aging.

Longer times to heal. Seemingly minor injuries take weeks, months and even longer to heal. I can no longer take it easy for a week and be full strength again in a short period. Three years ago, I had foot pains that lasted over a year. Recently, I strained my knee at the end of the summer and it still has not fully healed.

In addition, I seem more susceptible to injury, with small bumps and sprains becoming bigger issues.

Slower. Although I still have some quickness, I am much slower in the sports that I play. While my mind still thinks I can, I am no longer reaching balls that used to be routine in the past. For our household maintenance, it takes me much longer to do my current tasks or learn to do new tasks.

Aching joints. I'm guessing that some of my joints are starting to get arthritic. They ache, even though there is no apparent injury. In addition, they get stiff after sitting or lying in the same position for an extended period.

Aging gracefully definitely in not in my future. However, I do think I can age respectfully, by adapting to my physical changes, keeping a positive attitude and overcoming challenges on a regular basis. In addition, I can try to remain young in mind and young in heart :-)

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial or health advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Estate Taxes

Several years ago, my spouse and I set up revocable living trusts to minimize our federal estate taxes. Under current laws, we would incur no federal estate tax since the assets in each trust are below the $3,500,000 exemption for 2009. Unfortunately, even though there are no federal taxes would be owed, our estates might be responsible for state estate taxes, since our residence is in one for 22 jurisdictions (21 states and the District of Columbia), that levy estate taxes on amounts less than the federal exemption.

The state exemptions are as low as zero, with the majority of exemptions at $1 or $2 million. The state estate tax rates range from 3% to 20%, with the majority in the 15 to 16% range. At this point, I'm not going to worry too much about state estate taxes, since we're not planning to die anytime soon:-) However, as we get older, moving to a state without an estate tax may become a consideration, especially if our assets exceed the state exemption.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial or estate planning advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

What We Learned from the Financial Crisis

"Those who cannot remember the past are doomed to repeat it." ~ George Santayana

The financial crisis of 2008 to 2009 has helped us clarify our thinking on our retirement investments. Here are the conclusions or changes we have made:

Keep short term fund needs in investments with certain returns. We were fortunate to have 3 - 4 years of living expenses in CDs, bonds and money market funds. The CD and bond yielded between 3 and 5%, while money market rates were much lower. Going forward, we plan to sell our stock investments to always keep 3-5 years of funds in fixed income investments with more certain returns.

We will also apply this concept to our daughter's college savings. About five years before she needs the funds, we will convert from equity investments to short term CDs.

Accept variability of short term returns with long term investments. A common investment mistake was to expect the 7-8% long term returns of the stock market for each and every year. As we learned, in the short term, there can be significant negative returns even with a positive long term average return. However, it is important not to sell long term investments just because the market is down in the short term.

Other than selling enough stock to pay off our mortgage, we have stayed invested in equities at close to the same level as before the market crash. In addition, we have kept our daughter's college 529 fund invested in stock mutual funds.

Be wary when an asset class yields big short term profits. When everyone claims to be making money, the peak for that asset class is likely getting close. This phenomena happened in both the tech stock bubble and the housing bubble. When it seemed everybody and anybody were making money in these investments, the market soon peaked and then crashed.

As a rule for the future, we will take profits if as the proportion of a specific equity or asset class increases significantly in a short period. In 2008, I sold some of my company stock near its 2007 high. My father-in-law took profits in his energy investments as they rocketed and became a larger proportion of their portfolio.

Now that the market has recovered and reached the levels of a year ago, I'm going to remember these lessons from the past year, especially if the stock market continues rallying into 2010.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Links To Carnivals From November 10 to 16, 2009

Here are the links to the Carnivals in which My Wealth Builder participated from November 10 to 16, 2009:

Health Wonk Review

Carnival of Financial Planning #115

Festival of Stocks

For some interesting articles from the blogosphere, check out these Carnivals and give the hosts some recognition for their hard work.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial or economic advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Expecting a Year End Rally

For now, I expect the current stock market advance to continue until the end of the year. The rally, which began on March 9, 2009, continues to avoid a 10% correction, although it has seen a couple 6-7% declines. Here's why I think the rally will continue:

Panic buying. Investors that have been out of the market and waiting for a correction have missed the biggest stock market rally since the 1930s. Soon some of these investors will get back in the market to avoid missing out on further gains, driving the market up more.

Incentives to buy are increasing consumer spending. From Cash for Clunkers to Home Buyer Tax Credits consumers are taking on more debt to do more spending. These government programs are giving the economy a short term boost and may even provide a psychological boost to help holiday retail sales.

Window dressing. Mutual fund managers will want to have good performing stocks in their portfolio at the end of the quarter. These purchases will drive up the stocks that have good returns this year.

For now, we will continue to stay invested in the market and, hopefully, benefit for the year end rally. However, should the market advance sharply in the next few months, we will definitely use the opportunity to sell and lock in some profits.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Our Green Shoots

Our investments is starting to show positive returns as a result of the economic recovery. For most of 2009, the gain/loss column was mostly red, meaning that most of our investments were losses. In the past week, the gain/loss column for our investments became mostly green, indicating that the majority of our investments had gains.

The gains are still small and we have not recovered all the losses that have happened since October, 2007, when the market peaked. However, small gains are better that large losses, and hopefully, the economic recovery will continue.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Accountability for Results

When I was working, we had a simple rule for accountability. Once I took over a project, I was immediately responsible for the outcome. If the project was a success, the team received the credit. If the project failed, it was my fault. I couldn't claim that my predecessor was the reason for failure. After all, my job was to ensure success, which meant making corrections if necessary.

Apparently, some in government do not have the same concept of accountability. There are still government officials that assign the slow economic recovery to the previous administration. HELLO, the previous administration has been voted out and has been out of office since January, 2009. Yes, the previous administration can be blamed for causing the crisis. However, I consider the status of the economic recovery to be the responsibility of the current administration.

For more on Reflections and Musings , check back every Saturday for a new segment.

This is not financial or policy advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC