Extension Due Date for 2006 Tax Return - A Pleasant Surprise

This year I filed Form 4868 for an extension of my 2006 tax return due date. In the past, that would have extended my due date until August 15, 2007, which is what I expected would be my new filing due date. However, this year, the extension is an automatic six months until October 15, 2007.

I learned of the automatic six month extension when I started working on the 2006 tax return this past weekend, against what I thought was an August 15, 2007 deadline. In reviewing the details of Form 4868, I realized the IRS had changed to an automatic six month extension. The information was in the section Total Time Allowed on page 2 of Form 4868. In the past, it had been an automatic extension to August 15, with a second request needed for a "justified" extension to October 15. For either extension, the expected tax liability must have been paid by April 17, 2007 to avoid any penalties.

It was a pleasant surprise that I now have additional flexibility to get my 2006 taxes done. I didn't find any reason for the revision to an automatic six month extension. I suspect it is due to the increase in people requesting longer extensions, due to service in Iraq, natural disaster or everyday procrastination. Whatever the reason, having a six month extension will be very helpful for me this year.

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

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

Copyright © 2007 Achievement Catalyst, LLC

Recognition of Carnival Hosts - June 28-29, 2007

Here are the Carnival hosts My Wealth Builder would like to recognize for June 28-29, 2007:
The Skilled Investor - The Carnival of Financial Planning

How I Save Money - The Festival of Under 30 Finances

I appreciate the effort these blog authors put in to produce their carnivals for this week.

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

Copyright © 2007 Achievement Catalyst, LLC

Less Than Half of Americans Have Job Satisfaction

The percent of Americans who are satisfied with their jobs reached a new low to less than 50%. This is a decline from from 61% satisfaction when the survey was first done 20 years ago. Job satisfaction was lowest among workers under 25 at 39%. For more details, see Americans hate their jobs more than ever.

Here are my thoughts on the causes for dissatisfaction:

We think we should love our jobs. The current wisdom is that we should love what we do that our career defines our life, and that we should not settle for anything less. The reality is our job is a job and there is a reason it's called "work." If work was fun, we wouldn't need to be paid to do it:-)

Standards and expectations increase every year. Every year, each employee is expected to think smarter, work harder, and have greater impact on the business. Actually, companies don't explicitly ask for more. They call it a "productivity" improvement target.

Stress is increasing. Demands from work, home and personal change/growth are constant and increasing. It is difficult to achieve a work-life balance, which I contend are actually work-life choices. Less personal control results in more stress.

It's not surprising people are not satisfied as much as in the past.

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

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

Copyright © 2007 Achievement Catalyst, LLC

Lessons From My Mom - Save For Big Ticket Items

While my mom did not work, she was an excellent saver. She always allotted a part of her monthly household allowance to savings. I didn't realize how much she saved until Mom and I were talking about finances one day. Here are a few of the big ticket items that Mom covered from savings:

1. Down payment (or additional down payment) on each house they purchased.
2. Several car purchases.
3. Down payment on several investment properties.

Pretty impressive for someone who has always been a stay at home mom.

For more on Crossing Generations , check back every Thursday for a new segment.
Photo Credit: morgueFile.com, Michael Connors

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

Copyright © 2007 Achievement Catalyst, LLC

Retirement Saving Challenge - The Power Of Compounding

Only four days left until the start of My Wealth Builder's Retirement Saving Challenge on July 1, 2007.

One of the strategies I use to build wealth is to let compounding work in my favor. The power of compounding with time can yield outstanding results. The higher the percentage earned and the longer the time, the greater the return. The table below shows the multiplier effect of compounding by percentage earned and time.

	Multiplier by Percentage Return
Years	4%	6%	8%	10%
10	1.5	1.8	2.2	2.6
20	2.2	3.2	4.7	6.7
30	3.2	5.7	10.1	17.4
40	4.8	10.3	22	45
50	7.1	18	47	117
60	10.5	33	101	305

For example, $1000 invested at 4% will be worth $3,200 in 30 years. At 10%, the value is $17,400 after 30 years or a whopping $305,000 after 60 years. The great news is that 10% average returns are achievable. 10% is the average return of the stock market since 1926.

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

Recognition of Carnival Hosts from June 25-26, 2007

On Monday and Tuesday, there were some great carnivals hosted by blogs My Wealth Builder would like to acknowledge. I hope you find some useful tips from their carnivals.

The Digerati Life - 91 Ways to Wealth: The Carnival of Personal Finance, Epic Journey Edition

Fat Pitch Financials - Festival of Stocks #42

Retire Young and Wealthy - Carnival of Money Stories #15

Everyday Disasters - Carnival of Family Life

Money for the Rest of Us -Festival of Frugality #80

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

Copyright © 2007 Achievement Catalyst, LLC

Retirement Saving Challenge - Finding Money To Save

Only five days left until the start of My Wealth Builder's Retirement Saving Challenge on July 1, 2007. Now that a saving goal has been determined, from where will the money come? Here are a few ideas to try.

Buy only what you need. Consider eliminating any service or product that has a monthly bill. Get rid of cable, extra phones, gym memberships and other similar services that are not "necessities." For reference, I consider home mortgage, utilities and trash pick up a necessity.

Use other people's money. Your employer (401K matches), the government (deductions for IRA and 401K contributions) and your family (e.g. cash gifts for birthdays) are all sources for using other people's money.

Pay yourself first. A simple and effective strategy. Have it done automatically to make it easier. And don't touch the funds.

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

Photo Credit: morgueFile.com, Jane M. Sawyer

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

Copyright © 2007 Achievement Catalyst, LLC

Retirement Saving Challenge - Choosing A Goal

It's six days from the start of My Wealth Builder's Retirement Saving Challenge, which will start on Sunday, July 1, 2007. By now one should have set a saving goal. I have presented approaches which offer two very different goals. The first approach is to save 12% of one's salary. The second approach is to to save enough to have a nest egg of 12 times one's current salary by age 65. For reference, here is a comparison of the two approaches.

12% of Salary

	12% Of Salary By
Salary	Year	Month	Day
$20,000	2,400	200	6.58
$30,000	3,600	300	9.86
$40,000	4,800	400	13.15
$50,000	6,000	500	16.44
$60,000	7,200	600	19.73
$70,000	8,400	700	23.01
$80,000	9,600	800	26.30
$90,000	10,800	900	29.59
$100,000	12,000	1000	32.88
$110,000	13,200	1100	36.16
$110,000	14,400	1200	39.45
$130,000	15,600	1300	42.74
$140,000	16,800	1400	46.03

Saving Rate to Achieve Next Egg of 12 Times Salary at 65

	Daily Savings Amount by Age
Salary	20	30	40	50	60	Target 12X salary
$20,000	1.48	3.41	8.24	22.68	106.97	$240,000
$30,000	2.22	5.11	12.35	24.02	160.45	$360,000
$40,000	2.96	6.81	16.47	45.35	213.94	$480,000
$50,000	3.70	8.52	20.59	56.69	267.42	$600,000
$60,000	4.43	10.22	24.71	68.03	320.91	$720,000
$70,000	5.17	11.92	28.82	79.37	374.39	$840,000
$80,000	5.91	13.63	32.94	90.71	427.87	$960,000
$90,000	6.65	15.33	37.06	102.05	481.36	$1,080,000
$100,000	7.39	17.04	41.18	113.38	534.84	$1,200,000
$110,000	8.13	18.74	45.29	124.72	588.33	$1,320,000
$120,000	8.87	20.44	49.41	136.06	641.81	$1,440,000
$130,000	9.61	22.15	53.53	147.40	695.30	$1,560,000
$140,000	10.35	23.85	57.65	158.74	748.78	$1,680,000

For this Retirement Savings Challenge, it pays to be young :-) Until around 37.5 years, the saving amount to achieve a nest egg of 12 times salary is the lower number. After 37.5 years, the saving amount for 12% of salary is lower number, because one has to make up for lost time to achieve a 12 X nest egg. To get started, try to save at the lower number of the two approaches and work towards the higher number over the next year.

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

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

Copyright © 2007 Achievement Catalyst, LLC

Preparation for The Retirement Saving Challenge - Timeless Personal Finance Recommendations

In preparation for My Wealth Builder's Retirement Savings Challenge, which begins on July 1, I wanted to share a couple articles to help people get mentally prepared.

In May, 2007, I wrote Is There Anything Really New in Personal Finance? with the answer that most personal finance principles are simple and timeless.

1. Spend less than one earns. Live below one's means. Buy only what one needs.
2. Save, invest and benefit from the magic of compounding.
3. Use debt sparingly and for items that may appreciate (e.g. home and education) and not for everyday expenses.
4. Go to college and major in a degree that leads to a higher paying profession.
5. If it sounds too good to be true, then it is.

I recently came across an article by Laura Rowley, Earning a Degree in Financial Stability, on the same topic, which shared the following:

1. Know your values.
2. Set goals.
3. Start saving young.
4. Live below your means.
5. Delay spending on luxuries.
6. Buy used, especially cars.
7. Don't try to keep up with others.
8. Be satisfied.

It is an article worth reading, including the comments, which provide some interesting perspective on how some people (both believers and non-believers) think.
One final thought, saving enough to be wealthy is possible for most if one starts young. Following the principles outlined above will help provide the discipline needed to stay on course.

For more on New Beginnings, check back every Sunday for the next segment.

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

Copyright © 2007 Achievement Catalyst, LLC

CNBC Million Dollar Portfolio Challenge - Alleged Cheating

Recently, I participated in a stock picking challenge sponsored by CNBC. While the prize money was part of the reason, I did it primarily for the fun of being in the contest.

It has recently been revealed that a number of the finalists depended on more than skill and luck to achieve their returns. A Business Week article shared that software for the contest had glitch which allowed participants to place orders after the 4PM market close. As a result, a contestant could find out about earnings news after the market close before placing his order. Thus, stocks with good earnings results could be purchased, resulting is a big gain the following day.

Based on Business Week's analysis of the results, the top five finalists are likely to be disqualified, leaving the sixth finalist, who has never invested in stocks, to take the million dollar prize. Her investment strategy, which took one hour per day, was to identify stocks with upcoming earnings announcement and purchase them prior to the day of the announcement. However, unlike some other finalists, she made all her purchases during market hours.

It will be a sad commentary on our society if it turns out the five or more finalists are disqualified for breaking the rules (i.e. no after hours trading) of the contest. It is also disappointing, but not surprising, to me that money (in this case, lots of money) will make some people "break the rules" in order to "win." On the other hand, I am glad that the discrepancies were identified and that the eventual winner will have been validated to have played according to the rules.

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

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

Copyright © 2007 Achievement Catalyst, LLC

Retirement Saving Challenge - Daily Targets

In preparation for the July 1 beginning of the My Wealth Builder Retirement Savings Challenge, the table below provides the DAILY SAVINGS target by salary and by age. The assumptions are:

1. Retirement at 65
2. Target savings of 12 times salary
3. Retirement lifestyle of 80% of working lifestyle
4. Social security is available at 65
5. Average investment return of 8% per year
6. Nothing saved currently

	Daily Savings Amount by Age
Salary	20	30	40	50	60	Target 12X salary
$20,000	1.48	3.41	8.24	22.68	106.97	$240,000
$30,000	2.22	5.11	12.35	24.02	160.45	$360,000
$40,000	2.96	6.81	16.47	45.35	213.94	$480,000
$50,000	3.70	8.52	20.59	56.69	267.42	$600,000
$60,000	4.43	10.22	24.71	68.03	320.91	$720,000
$70,000	5.17	11.92	28.82	79.37	374.39	$840,000
$80,000	5.91	13.63	32.94	90.71	427.87	$960,000
$90,000	6.65	15.33	37.06	102.05	481.36	$1,080,000
$100,000	7.39	17.04	41.18	113.38	534.84	$1,200,000
$110,000	8.13	18.74	45.29	124.72	588.33	$1,320,000
$120,000	8.87	20.44	49.41	136.06	641.81	$1,440,000
$130,000	9.61	22.15	53.53	147.40	695.30	$1,560,000
$140,000	10.35	23.85	57.65	158.74	748.78	$1,680,000

A few observations from the table:

Start young. For example, saving $1,680,000 requires $10.35 per day at 20, $57.65 per day at 40 and $748.78 at 60. That's a monthly amount of $310, $1729, and $22,463, respectively. By starting young, the power of compounding works in one's favor.

Saving over a million is doable, especially if one starts young. Saving as little as $6.65 per day ($200 per month) can get one over $1,000,000 by 65.

Delaying saving makes saving much harder. If the saving amount at 20 is a factor of 1. The factors required to reach the same amount are: 2.3x at 30, 5.6X at 40, 15.3X at 50 and 72.4X at 60.

Remember, the Retirement Saving Challenge will begin on July 1, 2007 and last for six months.

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

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

Copyright © 2007 Achievement Catalyst, LLC

Working Harder and Making Less

According to a Wall Street Journal article, men in their thirties today make less on an inflation adjusted basis than their fathers. In addition, wages are rising less the the productivity increase. From 1974 to 2000, productivity rose 56% while wages rose 29%. From 2000 to 2005, productivity rose 16% while incomes fell 2%.

I expect that my daughter will grow up in a world where income growth will be even more challenging. I expect that long term (and perhaps even medium term) careers with large corporations will be long gone. Careers in high paying professions such medicine, engineering or the sciences may be outsourced to Asia. Knowing this, we will need to prepare her to be more innovative, more adaptive and more strategic during her working lifetime. I expect our daughter will need to make choices and decisions about work that her parents never faced.

On the other hand, where there is uncertainty and change, there is always opportunity. If we can prepare her to see and take advantage of new opportunities, we will have been successful in one aspect of parenting.

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

Photo Credit: morgueFile.com, Orchid

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

Copyright © 2007 Achievement Catalyst, LLC

A Simple Mutual Fund Picking Strategy

Beat the Market With Only 15 Minutes of Work Per Year posted at Project Stocks shares a proven technique for beating the market. The original article was in Money Magazine (I could not find an link on the Internet) on page 33 of the May 2007 issue. Briefly, the strategy is to purchase the best performing diversified equity fund (foreign or domestic) for the past year. After one year, sell it and purchase the new best performing diversified equity fund. (Do not include sector funds in this evaluation.) Over the past 10 years, this strategy would have averaged a 20% return (+ 6.3% versus the S&P 500) using Vanguard funds.

This strategy is appealing to me because of its relative simplicity. The strategy makes sense since the overall trend of the stock market will run longer than a single year. The previous year's best performer will likely continue to perform well. While I still primarily invest in individual stocks, I will evaluate this strategy for parts of my portfolio that I want to have less involvement.

The mutual fund references I will use for this system are from Kiplinger and Money Magazine. I will start by identifying funds for consideration and test the system with a small purchase in the next couple months.

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

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

Copyright © 2007 Achievement Catalyst, LLC

I Wouldn't Follow This Advice #3

Occasionally, I read commercially published articles which provide advice very different to what I have found successful in my own experience. I will be highlighting these articles periodically in a "I Won't Follow This Advice" segment. These segments represent my opinion and one should consult a professional before making any decisions. Here's segment #3.

While the following article is not giving advice, I am including it to address the issues it shares. Based on the frequency of student debt issues, the situation seems to reflect a belief that unlimited use of debt for a college education is acceptable. In my experience, the cost of (and debt from) a college education should be proportional to the salaries of the jobs one can get.

The USA Today series Young & In Debt describes a graduate taking on $165,000 of student loan debt to become a chiropractor. In addition, she has $9000 in credit card debt and a $4000 car loan. She has a full time job as a chiropractor and a part-time job as a personal trainer, and earns about $44,000 per year. Unfortunately, after living expenses, there isn't much money left to pay off the loans.

As I wrote earlier, a college education should be part of one's wealth building plans. It is important that the cost of college pay out, specifically through a higher paying job. While I do not know all the details from the USA Today story, I could not justify the spending $165,000 to get an education for two jobs that pay $44,000. My college education cost 135% of my starting salary and my student loans were about 40% of my starting salary. Even with the expected increase of college costs, I would not want my daughter to spend more than 250% of her starting salary on college nor have over 50% of her starting salary in student loans.

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

Photo Credit: morgueFile.com, Clara Natoli

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

Copyright © 2007 Achievement Catalyst, LLC

Carnival Host Recognition For The Week of June 17, 2007

Here are the carnival hosts that My Wealth Builder is recognizing for this week:

Victor-Fam.com -Toward Better Life

Get Rich Slowly - Carnival of Personal Finance - Greatest Hits Edition

The So Called Me - Carnival of Family Life

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

Copyright © 2007 Achievement Catalyst, LLC

Stock Purchase Update - 6/18/07

Earlier, I wrote about my stock buy selections of Terex (TEX), Potash (POT), Shaw Communications (SJR) and Avnet (AVT). I was able to initiate positions in Avnet on 4/20, Shaw Communications on 6/4, Terex and Potash on 6/7. Here's the current status of the purchases of these four stocks:

	My Wealth Builder Buy List
Stock	Shares	Purchase Price	Current Price 6/18/07
Terex (TEX)	50	$82.36	$84.84
Potash (POT)	50	$71.39	$79.46
Shaw Communications B (SJR)	50	$43.51	$41.83
Avnet (AVT)	200	$38.11	$42.70

Overall, I am happy with the entry price for each of these stock picks and the current overall performance of these four stocks, which have a 7.7% gain of $1361. I will continue to look for opportunities to add to the positions with only 50 shares over the next couple weeks.

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

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

Copyright © 2007 Achievement Catalyst, LLC

Happy Father's Day

Today, we celebrated the first Father's Day that our daughter was able to realize it was a special occasion. Although our daughter is not yet three, she made me a Father's Day card, decorated a bag for the present, and made me a key chain. We also had rocky road ice cream cake.

My wife also surprised me with additional gifts of summer sport shirts. I look forward to trying them on this week.

It's great to be a new dad. This was my first day back from a week long international trip and it was a great to return a celebration.

For more on New Beginnings, check back every Sunday for the next segment.

Phote Credit: morgueFile.com, Miyabi

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

Copyright © 2007 Achievement Catalyst, LLC

New Challenges While Traveling Internationally

I just returned from a week of international travel. While I have made these trips before, I found that there are now new challenges.

International Air Travel

There first difference I noticed was how much airline check in has changed. On my outbound flight, I showed up one hour and 45 minutes before my flight. After I checked in, the attendant told me I had just made it. Check in was closing in 3 minutes, one hour and 30 minutes before the flight.

Luckily, security lines were short. However, I still needed to remove my shoes, take my computer out of my suitcase, and put all liquids in a one quart bag. In addition, I needed to pack my blackberry, wallet and keys in my briefcase or in a separate tray.

On the way back, I showed up at the airport two hours before my flight. After check in, the attendant told me that the gate was closing in 45 minutes and I needed to hurry. As it turns out, the airport has two security checks. The first one was only five minutes and the second one took about 30 minutes.

Before, the heightened security checks, international business travel had some perks. In addition to express check-in, I received express security checks and could use a business class lounge for about 30 minutes. Today, I would need to show up four hours in advance of my flight to enable enough time to use the business class lounge. While international travel is always a chore, it is becoming even more a chore nowadays.

International Land Travel

While the European economies are not that strong, the costs of visiting there are still high. My hotel rooms cost between $200 and $450 per night. These were the preferred rates for my company. While the service was excellent at these hotels, I did not think it was worth the extra $100 to $300 per night over a higher end US hotel. In addition, breakfast was $32 and dinner was about $85. The only break I got was that the tip is already included in the price.

For this trip, we chose to drive in the United Kingdom because one of our colleagues had done an assignment there. Driving in the United Kingdom is challenging for several reasons. First, driving on the left hand side is disorienting for me. Second, clockwise roundabouts are challenging even though I have driven counter clockwise (right side driving) roundabouts in Washington D.C. and in Rome, Italy. Third, there are two many one way streets which does not allow one to backtrack when a turn is missed. Otherwise, driving in the UK was easy :-)

For more on New Beginnings, check back every Sunday for the next segment.

Photo Credit: morgueFile.com, Daniel T. Yara

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

Copyright © 2007 Achievement Catalyst, LLC

My Wish For Virtual Travel

Today, I completed a week of global travel for work. I used almost a full work week ( a total of 41.5 hours) getting to four international locations for our work. While the work was important, I look forward to a future where virtualization will enable us to get the same work done without the travel. In addition to this be a productivity improvement, I would get additional time to spend with my family.

Here's how the the non-productive travel time was used:

	Non-Productive Effort and Lost Time
Frequency	Activity	Total Hours Spent
4	Ticketing and Security Check in Four Countries	7.5
4	Passport Control and Baggage Pick Up	7.0
4	Flights	19.0
4	Driving to and from airport	6.0
1	Driving between cities	2.0

This summary of time lost just includes the actual time spent on these activities. It doesn't include the inefficiencies due to time zone changes and loss of effectiveness due to working at a different location.

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

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

Copyright © 2007 Achievement Catalyst, LLC

Recognition of Carnival Hosts For The Week of June 11, 2007

Here are the Carnival hosts My Wealth Builder would like to recognize for the week:

Getting Green - Carnival of Personal Finance #104 and Festival of Under 30 Finances

Investment Jungle - Festival of Stocks #40

Mama Blogga - Carnival of Family Life

Frugal Upstate - 78th Festival of Frugality

The Skilled Investor Blog - Carnival of Financial Planning

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

Copyright © 2007 Achievement Catalyst, LLC

Retirement Saving Challenge - Create Environments and Behaviours

Last week, I wrote about setting a savings goal. The next step is to find the money to save. I like to make saving as painless as possible by creating the environment that enable the behaviours I want. Here's how I do it for saving:

Elevate. Make saving a top priority in one's life. As I wrote in an earlier post, Saving is the starting point for building one's wealth. The key habit to develop is to pay oneself first, don't touch those funds, and invest and grow those accounts.

Saving part of the amount is the first thing I do with any money I receive. This includes my paycheck, a pay raise, gifts of money, tax refunds, stock gains, and winnings.

Eliminate. Right now, most of us do not have any additional money to save. To create money, I needed to eliminate spending. For me the best place to start were recurring expenses. Here are a few of the things I eliminated (or never started):

1. Cable television. This is a recurring cost of $30 to over $100 for many people.
2. Telephones. I chose not to add a cell phone. For others, it may make sense to eliminate a land line.
3. Credit cards. If one carries a balance, consider eliminating credit cards to eliminate credit card debt.

A simple practice in the area of elimination is to buy only what one needs.

Automate. Once one has elevated savings as priority and eliminated unneeded recurring or unnecessary spending, a third step is make the savings transfer effortless. I have my savings deposited automatically, before any bills are paid. Thus, I don't even see the money. When I first started doing automatic deposit, I did notice the reduction. However, I no longer notice the deduction, since I am used the "after saved" amount of my paycheck.

These are environments and behviours I have created to help me save. I will continue to use these during the Retirement Saving Challenge.

Remember, the Retirement Saving Challenge starts on July 1, 2007. Join the fun.

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

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

Copyright © 2007 Achievement Catalyst, LLC

Expat Benefit - International Schools

Although we did not have children during our assignment, a great expatriate benefit is access to an outstanding educational experience for one's children. International private schools typically provide an excellent education. In addition, the experience of being overseas often provides an additional edge for the child when applying to competitive universities. The international school in our area was an excellent primary, secondary and college preparatory school. The cost was about $10,000 per child, and paid for by our company.

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

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

Copyright © 2007 Achievement Catalyst, LLC

Japan - A Nation of Savers

For Japan in 2006, the savings rate of households headed by a salaried worker was 27.5%, up 2.2% from 2005. This compares to a US savings rate of -0.5% in 2005. That's right negative 0.5%.

When I lived in Japan, it appeared that the Japanese were spenders because everything was so expensive. Surprise! The Japanese are one the biggest savers in the world. Almost $50,000 saved for EVERY man, women and child.

Why do the Japanese save so much? I have heard or read of a few theories. One is that status for the Japanese depends more on position (university attended, company of employment) than on material goods. Therefore, the Japanese spend less on goods. Another reason that I have heard it that when the Japanese lost World War II, the citizens had very little and needed to conserve and save to survive. A third reason is that they are overly worried about the future.

Irrespective of the reason, the Japanese are savers to a fault. They have over 780 trillion yen(about $6.5 trillion) in near zero interest saving accounts. When I lived in Japan, a speaker, Kenji Ohmae, shared a story about 102 year old twins who were still saving money. When asked why, they answered "For a rainy day."

AMAZING! Saving seems to be a habit worth developing when young. I guess once a saver, always a saver for a lifetime:-)

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

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

Copyright © 2007 Achievement Catalyst, LLC

Consider The Cost Of Driving

Being overseas reminds me of the sticker shock I used to get with buying gasoline internationally. Whenever I have been in Europe or Asia, I have always noticed how expensive gasoline is. When gas was $1.50 a gallon, it seemed that overseas prices would be $1 to $1.20 per liter (around $4 per gallon). Now that gasoline is about $3.00 a gallon, overseas prices are about $2.10 per liter (nearly $8 per gallon).

When we lived in Japan, I always knew the cost of going anywhere since we did not own a car and used public transportation (trains, buses, or taxis). To go shopping was about $4 round trip. To go to work (about 10 miles) was about $5 per day. Since the cost of travel was transparent, we always planned our trips to efficient - i.e. multiple activities for each trip, if possible.

Since I don't pay for each trip in the U.S., I never thought much about the cost of driving somewhere, until now. I do a lot of short errands to the library, bank, Costco, or other stores. The distances range from 3 to 6 miles round trip. In a good week, my truck gets 20 miles per gallon or about $0.15 per mile. That’s just for the cost of gasoline. My company reimburses $0.48 per mile for work related driving. This reimbursement covers insurance and depreciation in addition to fuel. Using $0.15 and $0.48 as the expense per mile shows a cost range of $0.45 to $1.44 for 3 miles and $0.90 to $2.88 for 6 miles.

Calculating the cost of driving was very enlightening. Today, even short trips cost at least two to three dollars. It now makes sense to do as we did in Japan – i.e. plan each trip to cover the multiple locations each time. For example, instead of three separate 5-6 mile round trips, I now travel to the library, Costco and the post office in one 7 mile round trip - for a savings of $5 to $18 depending on the mileage expense factor used.

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

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

Copyright © 2007 Achievement Catalyst, LLC

Stock Purchase Update - 6/11/07

Last week I wrote about my stock buys and "almost" buys. Specifically, the buys were Terex (TEX), Potash (POT), Shaw Communications (SJR) and Avnet (AVT). Over the last week, I was able to initiate positions in Terex, Potash, and Shaw Communications. Here's a history of my purchases of these four stocks:

	My Wealth Builder Buy List
Stock	Purchase Date	Shares	Price
Terex (TEX)	6/7/07	50	$82.36
Potash (POT)	6/7/07	50	$71.39
Shaw Communications B (SJR)	6/4/07	50	$43.51
Avnet (AVT)	4/20/07	200	$38.11

Overall, I am happy with the entry price for each of these stock picks. I will continue to look for opportunities to add to the positions with only 50 shares over the next couple weeks.

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

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

Copyright © 2007 Achievement Catalyst, LLC

My Reasons For Taking An Expat Assignment

During my career, I have done one expatriate (expat, for short) assignment in Japan. Prior to that, I had done extended stay assignments in Europe. The difference is that an expat assignment requires relocation, while an extended stay assignment is a long business trip with occasional travel home. As background, we originally turned down the first offer of an expat assignment for personal reasons. On the second offer, which was exactly the same, we decided to accept when we determined the personal reasons were not going to be issues. (More on the personal reasons in another post.)

Here are the reasons we decided to take the expat assignment offer, in order of importance:

Promotion. The assignment was an increase in responsibility and level. In addition, the assignment accelerated the promotion by at least 3-5 years. There was also a reasonable possibility that I might not have gotten promoted without the move.If it had not been an advancement, I would not have accepted. At the time, we did not have any children but I did not feel it was worth a family upheaval for only an international, lateral move.

Broadening Experience. I had spent my entire career in the US, where our company is very strong. In the eighties, we began expanding internationally. For many of those new countries, we were not a major competitor. In fact, there often was strong local competition. In addition, it was an opportunity to learn about different market needs and how to address them effectively.

Location. While we had not originally considered Japan as a potential work location, conversations with several people who had been in Japan and Europe convinced us that Japan was a great option, in spite of the distance. We had never traveled to Asia and Japan was one of the safest locations in which to live.

At the time of our assignment, we did not have children yet. Children would have increased the number of factors we would have considered.

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

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

Copyright © 2007 Achievement Catalyst, LLC

My Wealth Builder - International Week

During this week, I will be traveling overseas to work with my global colleagues. I will be in three countries during that time. In recognition of my global friends, My Wealth Builder's posts for the week will have a international theme. Here's the plan for the week:

Monday - My Reasons For Taking An Expat Assignment

Tuesday - Consider The Cost Driving

Wednesday - Japan - The Saver Nation

Thursday - International Schools

Friday - Retirement Saving Challenge - Change Environments and Behaviours

Saturday - Why We Almost Didn't Take An Expat Assignment

I ask for your indulgence in advance should a post not appear on the scheduled day. It will mean that I was not able to access the Internet during that time.

For more on New Beginnings, check back every Sunday for the next segment.

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

Copyright © 2007 Achievement Catalyst, LLC

Stock Market Call on 6/7/07 - Lucky or Good?

Seen on a sign posted in a neighborhood: LOST Brown and black dog, three legs, broken tail, blind, and deaf in one ear. Responds to the name Lucky.

On Thursday, I decided I had waited long enough and purchased more stock in spite of a 3% drop in the market indices over three days. As it turned out, this was a good call. On Friday, the market decline was reversed and the indices rose a little over 1%. I am glad that I had the intestinal fortitude to follow my system and make more purchases. However, I did hedge my decision by buying less than the original desired amount.

So the question is was I lucky or good? The answer is I don't know yet since I have only been using this stock picking system for about 20 months. For me, lucky is getting it right once or twice and good is being consistently (say over 50% of the time) right. The system has enabled me to make three good decisions and it has had missed one opportunity. While it looks like that I made the right call for now, there have been many instances where the market and my purchases reversed. For those cases, I feel have multiple scars , like Lucky, the dog described above, that represent the times I wasn't so right.

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

Photo Credit: morgueFile.com, Dawn M. Turner

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

Copyright © 2007 Achievement Catalyst, LLC

Retirement Saving Challenge - Set A Goal

For what is one saving and how much should one save? Those are the two questions one should answer in preparation for the start of the Retirement Saving Challenge, which begins on July 1, 2007.
Why Save?

In my case I wanted to save enough money so that I wouldn't need money, if I chose not to work. To note, I don't expect to stop being productive or contributing to my community. My goal is to not have to work for money. For me the worse case is depending entirely on my savings for living expenses. So I needed to save enough to achieve this goal. And I wanted to do it in my forties or earlier.

How Much to Save?

Up until last year, I had always set an absolute number as a goal. However, after reading Personal Financial Ratios: An Elegant Road Map to Financial Health and Retirement by Charles J. Farrell, J.D., LL.M., I decided to use ratios versus my salary instead of an absolute number. Mr. Farrell makes a good case for saving 12% of one's income and targeting to save 12 times salary by 65. The table below from the article shows the target savings by age.

Personally, since I plan to retire before 65, I am saving 20% of income and targeting to save 20 times salary by the time I retire. For more details, see How Much To Save - The NUMBER.
I like Mr. Farrell's goal setting method because it is fairly simple. There are more complex ways to determine one's savings goal. What's Your Magic Number For Retirement? was recently published by Bankrate.com. It requires one to estimate spending lifestyle, inflation rate and withdraw rates. While it appears more precise, the results are only as good as the estimates, which may not be an accurate prediction of the future.
So start by setting a savings goal - either by using Mr. Farrell's rules of thumb or by modeling one's future needs and calculating the savings needed. In either case, I recommend that one should consult a professional to confirm that one's goal is relatively close to what's needed.

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

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

Copyright © 2007 Achievement Catalyst, LLC

Buy Stocks Now? - Build Intestinal Fortitude

This is the pull back for which I have been waiting. Three straight days of significant declines in the indexes. Since Monday, June 4, 2007, the Dow, S&P 500 and Nasdaq are all down about 3%. My stock picking system has identified some good buys. It looks like it may be a short term dip. I should be buying like mad.

Well, I'm not buying like crazy. I did make two more purchases, 50 shares each of Terex (TEX) and Potash (POT), at $82.36 and $71.39 respectively. So I have now taken positions in all four stock picks identified as buys on 5/28/07. However, I have currently purchased less than half of the shares that I had intended to buy. What happened?

Emotion versus Intellect

My brain is telling me "buy." The economy is still strong. There is high liquidity. The foreign markets are strong. The four stocks have the strongest buy signals I have seen in the 20 months I have been using the system.

However, my gut is queasy and my emotions say "wait." What if my stock buys go down another 10%? What if this decline isn't a dip, and is the beginning of an extended bear market? What if ...? It's the fear of losing overcoming the potential of predicted gains.

This is a natural occurrence which routinely happens. Systems that look great on paper, tend to look a bit shaky when money is involved. However, if one's system is working (i.e. better than 50% correct), then one should follow the system.

That is exactly what I did yesterday. I followed the system and purchased Terex and Potash. I believe that which ever direction the market goes today, next week or next month, that the stock buys I have identified will do better than the market. So today, I will continue look for an opportunity to add to my holdings for Terex (TEX), Potash (POT), Shaw Communications (SJR) and Avnet (AVT). However, I will be cautious and will add with smaller buy orders than originally planned.

Will my decision to follow the system be correct? I won't know for sure until next week, next month, or even next year. However, at this time, I believe there is sufficient probability to continue to look for buying opportunities.

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

Photo Credit: morgueFile.com, Michelle Kwajafa

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

Copyright © 2007 Achievement Catalyst, LLC

A Midas Touch

Our daughter is 2-3/4 years old and is already developing a reputation for being lucky. A few weeks ago, we went to a retailer's remodelling grand opening. A local radio station was running a promotion and allowing customers to spin for a prize. Our daughter spun the wheel and we won the top prize of two airline tickets to the domestic destination of our choice. While free, these tickets were part of travel agency promotion. Because of the some effort needed to collect, we will likely not use the tickets. However, it was fun for her to win the prize.

This past weekend, our daughter won a $100 bill with no strings attached. Our bank was having a one year anniversary celebration. As part of the festivities, they gave away 100 envelopes with $1 to $100. I received a ticket for an envelope when I was doing my banking in the morning. I went home to picked up our daughter and brought her back to play games and eat free ice cream. When we returned, there were only five money envelopes remaining and we were told the $100 prize still had not been chosen.

The pressure was too much for me:-) So I let our daughter choose. As the envelopes were fanned out, she immediately picked the top envelope, as if it were calling her name. When I opened the envelope and showed everyone the $100, she became an immediate celebrity . Everyone cheered and clapped. We took pictures. While our daughter enjoyed the celebration, she didn't quite realize the reason for it.

Of course, I realize these winnings are truly luck and won't be counting on them in the future:-)

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

Photo Credit: morgueFile.com, Jane M. Sawyer

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

Copyright © 2007 Achievement Catalyst, LLC

More Carnival Hosts - From 6/5/07 and 6/6/07

Here are two more Carnival hosts from this week:

My Two Dollars - Festival of Frugality #77

Insure Blog - Cavalcade of Risk - 1st Anniversary Edition

Hope there are tips and ideas one can use.

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

Copyright © 2007 Achievement Catalyst, LLC

Waiting For A Pause In The Market Is Working

Earlier this week, I wrote that I had not yet purchased two the stocks on my buy list, Terex (TEX) and Potash (POT), and would be waiting for a buying opportunity. While it appeared the market would keep rising, the last two days have created an opportunity with a 200+ point drop in the DOW and a 21 point drop in the S&P 500.

At this point, I do not think this is the beginning of a major decline. I will be looking to make initial purchases of both TEX and POT. However, I may be conservative and only purchase a portion of my desired amount, in case there is a further drop in the market.

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

Photo Credit: morgueFile.com, Stuart Whitmore

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

Copyright © 2007 Achievement Catalyst, LLC

My House Payment As A Percent of Salary

MSN.com published a Home Affordability Calculator that estimates the maximum price one can afford. For people with an excellent credit rating, the calculator uses up to 34% of gross monthly salary to determine the maximum payment one can afford for Principal, Interest, Taxes and Insurance (PITI).

While the calculator allows up to a third of monthly income to be spent on PITI, I feel uncomfortable with that high of a percentage because there is no margin of safety for unexpected expenses. For my first house, I put 25% of my gross salary towards PITI and felt stretched. For our current house, we spend 20% of gross salary on PITI and that amount feels very comfortable. In each case, we used a higher down payment (20% and 43% respectively) to keep our monthly payment lower.

Of course, how much of one's monthly income to spend on PITI is a personal decision. One can always choose to cut spending elsewhere to enable a higher house payment. However, I am glad we never spent over 25% of gross salary and are currently at 20% of gross salary.

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

Photo Credit: morgueFile.com, Daniel T. Yara

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

Copyright © 2007 Achievement Catalyst, LLC

Final Freebie Update

Previously I wrote about getting freebies for activities I was already planning to do - i.e. double dipping. Here is an update on the status of the rewards for participating.

	Update on Freebies
Promotion Sponsor	Reward	Submitted	Status
TD Ameritrade	IPod Nano for opening and funding a new account with $10,000	February 14, 2007	Received a silver 2GB IPod Nano on April 13, 2007.
Mazda	$25 Visa Gift Card for test driving any Mazda.	March 9, 2007	Received $25 Visa Gift Card on June 4, 2007. I had called in April and the processing center told me that my form was received and the card would be sent out in June.
Chevy	$25 Best Buy Gift Card for for test driving a Chevy HHR.	March 31, 2007	Received Best Buy Gift Card on April 28, 2007. I enjoyed driving a loaded HHR, which is a new SUV crossover design. MSRP was about $23,000.
Bausch & Lomb	Free Bausch & Lomb Wear&Care Program Kit.	April 7, 2007	Received April 28,2007. The kit included 12 contact lens cases and a bottle for rewetting eye drops. Estimated value - $35 to $45.
Ford	$50 Target Gift Card for for test driving a Ford Edge.	April 16, 2007	Received April 30, 2007. I enjoyed driving a loaded Edge, which is a new SUV crossover design. MSRP was about $32,000.

Since these were activities I was already planning to do, the promotions were a nice additional bonus. However, since I qualified for each promotion, I tracked them until the bonuses were received :-)

Overall, I am impressed with the timeliness of most of the bonuses. The Mazda promotion is the only one that is that took a long time (almost two months). The Ford Edge promotion was the fastest, being delivered in two weeks.

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

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

Copyright © 2007 Achievement Catalyst, LLC

Hosts of Carnivals from June 4, 2007

Here are the Carnival hosts from Monday, June 4, 2007, that My Wealth Builder would like to recognize:

Clever Dude - Carnival of Personal Finance # 103

$tock Rake - Festival of Stocks #39

Online Stock Trading - Investors Blog Network Festival #8

downwiththekids.net - Carnival of Family Life

Verve Coaching - Carnival of Powerful Living

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

Copyright © 2007 Achievement Catalyst, LLC

Stock Purchase Update - 6/4/07

Last week I wrote about my stock buys and "almost" buys. Specifically, the buys were Terex (TEX), Potash (POT), Shaw Communications (SJR) and Avnet (AVT). I already owned Avnet and had intended to purchase some of my other buys last week. However, two things happened that caused me to delay my purchases. First, all of my buys rose significantly (6-10%) over the last week. Mistakenly, I was thinking there might be a slight pause in the market that would enable me to buy at a lower price. Second, the steep decline in the Chinese stock market, due to a tripling in taxes on stock trades, on Wednesday caused me further concern. So I held off buying, much to my chagrin.

This week, I again expected a slight pullback in these stocks. However, in spite of a 8.6% decline in the Chinese market today, each of my buy stock rose slightly (up to 1.3%) again. So I decided to stop fighting the tape and begin buying with a 50 share purchase of SJR at $43.51. I still remain somewhat cautious on TEX and POT. However, I will continue to look for buying opportunities (read that as small dips) for these two stocks this week.

For reference, two stocks, Game Stop (GME) and Agilent (A) were added to the "almost" buy list. This list of stocks meet all buy criteria except for the relative price strength rating. I will look at the "almost" buy list after I have completed purchases of stocks in my buy list.

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

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

Copyright © 2007 Achievement Catalyst, LLC

Earning Money Online

One of the great entrepreneurial opportunities is to use the Internet to make money. There are many excellent examples out there. The biggest one is Google, with on-line contextual advertising. My Space and You Tube are examples of businesses that have been sold for hundreds of millions. Digg and Facebook are potential multimillion dollar businesses when they are sold. If one has a business like these, reading My Wealth Builder is not needed:-)

For the rest of us who are looking for opportunities, the title of this post should be Trying to Earn Money Online. Here's my experience with different online opportunities.

Surveys - These are online surveys by reputable research companies. American Consumer Opinion and Survey Savvy are the two I have tried. Survey payments are typically $1-2 for Survey Savvy, with occasional $15 or $25 surveys (that fill up fast) and $4-5 for Consumer Research Opinion. Overall, I've made very little income, primarily because I only qualify for about 5-10% of the surveys sent to me.
Mystery Shoppers. The Wall Street Journal, June 11, 2003, published an article about Jennifer Voitle , who was making about $80,000 a year as a mystery shopper. This income did not include the free items she received as part of her work. She shared that many mystery shopping jobs paid around $30 and that she found the jobs online from the Internet.

I signed up from Corporate Research International - Mysteryshop.com (CRI). CRI had many mystery shopper opportunities. However, the payments are typically $5 to $8 with a $1 to $3 reimbursement for a purchase, which is quite different from the article referenced above. The compensation covers both time (preparation, mystery shop, and report submission) and transportation. For me the compensation did not sufficiently cover the effort and time involved and I passed on taking any assignments.
Affiliate programs. In most affiliate programs, one becomes a commission based sales person for the product or service offered by a company. For example, as an affiliate of Amazon, My Wealth Builder has a product recommendation (WD-120GB Passport Hard Drive) and an Amazon search tool. Any purchases made by someone who accesses Amazon via this links earns My Wealth Builder a commission. While there are many who earn respectable commissions via affiliate links, My Wealth Builder has earned zero affiliate based income in nine months.

Advertising. This approach uses Google adsense, Text Link ads or other systems to provide advertising on a website or blog to earn income. Millionaire Bloggers posted at Worldwide Success shares estimated incomes from 9 bloggers ranging from $77,000 to almost $500,000 per year. The author also notes that the average blogger, of which there are over 50 million, make less that $100 per month.
Many bloggers hope to make sufficient income to replace their day job income and some do. However, the majority of bloggers may make enough to cover their out of pocket costs, but probably not enough to cover the time invested. Count My Wealth Builder among the majority of bloggers after nine months of blogging:-)
I have not tried selling items online nor writing posts for pay (e.g. Pay per Post or Review Me) and cannot comment on these forms forms of earning money based on personal experience.

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

Photo Credit: morgueFile.com, Jane M. Sawyer

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

Copyright © 2007 Achievement Catalyst, LLC

Bad Personal Finance Choice? - I Don't Expect The Government To Save Me

Since the early 1900's , the government has made protecting citizens from there own mistakes one of it's responsibilities. Bank failures from the 1920s led to the creation of the Federal Deposit Insurance Corporation (FDIC) in 1933 by the Glass-Steagall Act. When poverty rates among senior citizens exceeded 50%, Social Security was created in 1935 to provide "social insurance." When corporate insolvencies began to put pension programs at risk, the Pension Benefit Guaranty Corporation (PBGC) was created in 1974.

These programs all have good intentions - protect the financial security of US citizens. While initially solvent programs, many of these government protections are starting to have financial sufficiency issues. Many of these programs seem like Ponzi schemes to me, where the benefit to current recipients are paid by current participants in the program. And Ponzi schemes are doomed to eventually fail. The PBGC is struggling with possibly absorbing auto and airline pensions and probably will no longer able to guarantee 100% of everyone's pension. Social Security's funds are estimated to be depleted by 2042. The FDIC, while still strong, would likely have some issues if several major banks failed simultaneously.

Therefore, I am conservative with personal finance choices and do not count of the government to save me.

I am saving as if there will be no Social Security. My personal goal is to have 20 times my income saved before retirement. At this level of savings, I will not need Social Security payments. Thus, any Social Security received will be a bonus :-)

I choose to have accounts diversified at strong financial institutions. I use Merrill Lynch, TD Ameritrade and Charles Schwab for my brokerage account. I bank at a very strong regional bank. While I find new financial institutions, such as Zecco.com, interesting, I will not put any money there until they are a proven to be a strong financial institution. Net, unless there is a total failure of the US economic and monetary system, I will not lose all my financial assets if one of these companies fails.

I take high risks only when I am willing to lose 100%. High risk mortgages? Never, since I can't afford to lose my home. Buy equity options? Yes, I can minimize my losses to the cost of the option. Invest in a bar? Yes, but only as a Limited Liability Corporation (LLC) so that my maximum loss is my investment.

Net if I ever expect the government to protect me, I first look at how I can save myself :-)

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

Photo Credit: morgueFile.com, Paul Anderson

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

Copyright © 2007 Achievement Catalyst, LLC

Carnival Hosts for The Week

Here are some of the Carnival hosts from the past week that My Wealth Builder would like to acknowledge. If you have some time, check out their Carnivals for some great ideas and tips.

Money Smart Life - Carnival of Personal Finance #102

Colloquium - Carnival of Family Life - Memorial Day Edition

How to Make a Million Dollars - Festival of Under 30 Finances.

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

Copyright © 2007 Achievement Catalyst, LLC

Retirement Saving Challenge

Want to get started on saving? Don't know how much to save for a comfortable retirement? This challenge will help work on a very important aspect of wealth building - saving. Here's how My Wealth Builder will help. This will be a simple six month doing and personal tracking process that will get one started on the journey. It will be self directed and honor system -one will only need to report to oneself. My Wealth Builder will post three items on a monthly basis: 1) Recommended nest egg size; 2) daily savings amount; 3) target progress. The challenge will start on July 1, 2007 and end on December 31, 2007.

My Wealth Builder has been sharing the principles over the past nine months in a number of posts. A few readers, who agree with the principles, have asked more more specifics on the hows. Being a firm believer in learning by doing, I will share the hows I have personally used as part of this saving challenge.

I first start with an overarching goal and plan.

Have an overall life goal. Money is a tool, not a goal. Money is a great enabler for what is important to one and one's family. My life goal is explained in Developing A Personal Mission.

Develop strategies and plans. Here are my three strategies:

1. Maintain a frugal lifestyle and save.
2. Preserve my wealth
3. Grow my income (faster than expenses grow)

For more details see My Wealth Building Strategies.

Here are the specific hows, which I will describe in more detail on the Fridays leading up to challenge start date of July 1, 2007.

Set a savings goal. How much of one's income should be saved? What is one's target saving amount at retirement. The answers are a minimum of 12% of one's income and a minimum of 12 times one's income, respectively. For some additional details, see How Much To Save - The NUMBER. More about this how on Friday, June 8, 2007.

Create environments and behaviours that enable saving. Saving is hard work and requires sacrifice - specifically delaying immediate gratification for future rewards. Changing environments and behaviours can significantly help. An example is buying only what one needs. More about this how on Friday, June 15, 2007.

Track and measure results. This is the most important part. How well one is doing versus one's savings goals is very important to know. I track my progress through periodic reviews. More about this how on Friday, June 23, 2007.

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

Photo Credit: morgueFile.com, Michael Connors

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

Copyright © 2007 Achievement Catalyst, LLC