Entitlement versus Opportunity

"From each according to his abilities, to each according to his needs."  ~ Karl Marx

The middle class was created by opportunity and the middle class is being destroyed by entitlement.   Unfortunately, all the current politicians campaign on providing more entitlements.   The Democrats are biased to providing entitlements to the masses.  The Republicans are biased to providing entitlements to businesses and the wealthy.  Both parties are biased to providing entitlements (Social Security and Medicare) to the elderly.

The entitlement mentality of the politicians is destroying the initiative and drive that people had to achieve being in the middle class.  Now everyone expects it is a right to be in the middle class instead being something that's earned.  Here are some common entitlements:

• Higher education.   The government provide grants and student loans to people that want to attend college.   Unfortunately, some people take out large loans for degrees that are not particularly employable.  
• Home mortgage deductions.   The current tax code allows for the deduction of home mortgage interest.  This may cause some borrowers to take out larger mortgages that they would otherwise do.
• Credits for children.  People with incomes below certain thresholds can get Earned Income Credit up to $5751 and a Child Tax Credit of up to $1000 per child.
• Extended unemployment.  With 99 weeks of unemployment payments available, some people are choosing staying on unemployment rather than take a job that pays below unemployment compensation.   Unfortunately, this is keeping people out of the workforce longer which may make them less employable.
• Business subsidies.  There are numerous cases:  solar energy subsidies, oil and gas tax credits, GE paying zero corporate income tax, bank bailouts and auto manufacturer bailouts. 

These are examples of entitlements which need to be changed.  Instead of entitlements, our economy needs to create more opportunity: make it easier to start and run a business, a simplified tax code and building infrastructure to enable economic growth.

Politicians seem to be about giving everybody the entitlement of being middle class.  When I see a candidate who supports the right to rise or achieve instead of more entitlements, that person with definitely get my vote.  

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

Photo Credit: morgueFile.com, Author Name

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

Copyright © 2011 Achievement Catalyst, LLC

The Wealth Builder Carnival #59

Welcome to the fifty-ninth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now onto the Carnival:

Earning

Jonathan from Debt Loans presents Can't Make Ends Meet? Time To Get Creative. posted at Money Mum, saying, "Perhaps you recently lost a job, you have a large number of unexpected medical bills, or you’re trying to pay for university tuition. Instead of letting stress get the best of you, be proactive and consider bringing in some extra cash in a new, creative way."


Linsey B. Knerl presents Ask 1099 Mom: How Can I Advertise my Business for Free? posted at 1099 - Mom, saying, "While the best methods of advertising may require a cost up front, there are some reputable ways to get your name out there. Here are a few of the best ideas from our community:"

Marie presents Can't Sell Your Home? Rent It Out and Earn posted at Money Spending Mommy, saying, "When they find out that they won’t be able to solve their problems by selling their homes, many homeowners just give up and let the foreclosure take its course. But that’s not necessarily the only solution. You may be able to rent your home out and earn the money you need to make your mortgage payments."

Insuring and Protecting

DJ presents Life Cover – What will you leave in your will? posted at The Family Wallet, saying, "Having a valid will is extremely important but making sure that you have something worthwhile to leave behind is also crucial. Would anyone want to leave their loved ones to struggle financially, worrying about making ends meet? A life cover policy can buy peace of mind and provide a financial lifeline for those left behind."

Khaleef @ KNS Financial presents Pay For Spray: Firefighters Let Another House Burn Down Over $75 posted at Faithful With A Few, saying, "A pay for spray policy has lead to firefighters standing by and watching multiple houses burn down over $75. Share your thoughts about this form of insurance, and read how it can be improved."

Chelsea Prescotti presents Credit-Based Car Insurance Rates posted at CreditScore.net, saying, "Most individuals believe that car insurance rates are based primarily on the driving record and the potential risk of the driver. While hitting another car or getting a speeding ticket will undoubtedly increase an individual’s car insurance premium, many drivers do not realize that there is another factor insurance companies take into account, one that is unrelated to driving ability."

Investing

Sustainable PF presents Sustainable Index Investing Is A Joke posted at Sustainable Personal Finance, saying, "You shouldn’t bother with sustainable index investing. Instead, do like the rest of the market does. Put your cash in the spot where you feel it’ll get the best return. Then, if you’re so inclined, spend your profits on whatever environmentally friendly hippie stuff you want. Investing should be about making money, not saving the world. The two just don’t mix."

Barb Friedberg presents Reader Question; SHOULD I INVEST IN A CLOSED END FUND? posted at Barbara Friedberg Personal Finance, saying, "Learn about closed end mutual funds. Get the basices to figure out whether they are for you or not?"

Jim Tolley (aka Kidgas) presents An Explanation of the Stock Option Collar posted at Cash Flow Mantra, saying, "In reality, a collar is really not all that difficult to understand. It consists of owning a stock (being long), owning a protective put against that stock, and selling a covered call against that same stock. As always, a real-life example is in order so I will provide just that."

Investor Junkie presents REITs vs. Real Estate Investing posted at Investor Junkie, saying, "Investing in REITs and direct investment in real estate both come with advantages and disadvantages.

Kanwal Sarai presents Are These Your Top 4 Reasons For Buying Mutual Funds? posted at Simply Investing Blog, saying, "In this article we’ll examine why many people choose mutual funds… and why mutual funds may not be your best bet for improving your portfolio."

Living Frugally

B.B. presents 4 Frugal Ways to Keep Young Kids Busy During Christmas Vacation - Beating Broke  posted at Beating Broke, saying, "There are plenty of frugal ways to keep the kids, especially your preschool and elementary school kids, entertained during the Christmas vacation. Consider the following activities:"

Lazy Man and Money presents Save Money with a HARP-Refinance on an Investment Property with PMI posted at Lazy Man and Money, saying, "Having lived in Chumpsville long enough, I decided to call up my lender and see what they could do for me. I came to them as almost a perfect example of who shouldn't get their interest lowered. I had three things going against me."

Matt presents 090 Financial Excellence: Saving Money at Christmas Time posted at Living In Financial Excellence, saying, "Today I share tips and tricks from the Financial Excellence community about how to save money on Christmas gifts, decorations, and other holiday expenses."

misst presents 3 Vital Tips You Need to Start a Frugal Lifestyle posted at Prairie Eco-Thrifter, saying, "If you are planning to live a frugal lifestyle, it is important to know that you are not depriving yourself. Instead of looking at it this way, think of the act as a way of saving money for your future benefit. At the same time, you should look at the many benefits frugality has provided in many people. Even though they have all the money in the world, they have simple lives free of all the complexities."

Jon Elder presents Savvy Shopper Sites for Bargain Hunters posted at Free Money Wisdom, saying, "Some websites actually PAY you to shop! Another one I will be mentioning is a site that lists all the freebies that are being offered by companies currently while showing you the deals that you can score.
Here are a few of those websites:"

SavingMentor presents How To Save Money On Internet Service posted at HowToSaveMoney.ca, saying, "This guide will show you how you can reduce your Internet costs, upgrade your service for less, and increase or eliminate your bandwidth caps."

Jonathan from Debt Loans presents Cheap-o-vision: Save Money on Your Movies posted at Wallet Watcher, saying, "The following tips ought to help you keep the burden of movie entertainment costs lighter and your wallet a bit heavier."

Retiring

MoneyCone presents HOWTO Calculate Your Retirement Income posted at Money Cone, saying, "In this post I’m going to show you how to find out what your income will be at retirement, if you continue saving what you are currently saving. No, no worksheets or spreadsheets or complicated calculations! Not on this blog! I want to highlight a FREE Retirement Income Calculator I found very useful."

Saving

Mr. Money Smarts presents Why NOW Is The Best Time To Start Saving For Retirement posted at Smart On Money, saying, "Actually, years ago was the best time to start saving for retirement. As soon as you started earning income was the best time to save for retirement. But now is the second best time to start saving for retirement."

Taxes

Super Saver presents Strategies to Lower Federal Income Taxes in Retirement posted at My Wealth Builder, saying, "As a retiree, I've learned that I have additional opportunities to minimize our tax responsibility. I gladly use those opportunities to send less of our hard earned money to the wasteful federal and state governments."

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: the wealth builder carnival, blog carnival.  

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

This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC

Wait and See

For the last week of 2011, I plan to hold our current long and short positions.  At this point, I expect the market to positively biased, as fund managers do their end of quarter window dressing purchases.  However, I continue to believe there are significant economic and monetary issues in the EU in addition to the continued fiscal issues here in the U.S.

Right now, put and call options appear to be the most attractive investment option.  The premiums seem very high due to economic uncertainty, even though the implied market volatility is low.  If  the market continues to rise, I will consider selling way out of the money naked calls against my company stock options.  That way if the market falls, I will be able keep the premium as profit and if the market rises, the gain in the stock options will more than offset any losses incurred by the call.

For now, I won't be selling any naked puts.  Also, I will continue to update my list of dividend paying stocks to buy should the market decline significantly again.

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 © 2011 Achievement Catalyst, LLC

Be an Inspiration - Part II

After watching Courage Under Fire and The Last Samurai this weekend, I've decided to renew my commitment to be inspirational.  About a year ago, I wrote about being an inspiration when blogging.  I'm now going to ensure the principle of being an inspiration is part of my personal life, especially with my family.   2012 may be a tough year and  I want to be prepared to be a positive factor.

Be An Inspiration will be one of my life purposes.

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

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

Copyright © 2011 Achievement Catalyst, LLC

Teaching Financial Competence

"Know thyself." ~ ancient Greek aphorism

In one of my professional development courses, I remember seeing the four box description of the conscience competence learning model.  Specifically, the model describes a transition from unconscious incompetence, to conscious incompetence, to conscience competence, to finally unconscious competence.  The model proposes that learning progresses from not knowing how to do something to eventually doing something entirely due to habit.  One problem with this learning model is the inherent belief that all learners can become at least consciously competent in any chose area.

Since having our daughter, who is now seven, I believe the learning model is different.   To me, everyone starts out at a stage of unconscious incompetence and unconscious competence.  For example, my daughter tells me she "knows" how to do many things she can't do.  My daughter also can do many things well, but she doesn't consciously know how.  A good example is riding a bike.  I was able to teach my daughter how to ride a bike without explaining the physics of why it works.  I just had to let her unconscious competence of balance take over.

Now that I'm in my fifties, I feel I've reached a stage of conscious incompetence and conscious competence.  I know what I'm good at doing and what I'm not good at doing.  For example, I'm sure that I won't good be at day trading.  Outside of personal finance, I know that I'm definitely not good at creating art or musing.  So I don't try be good at doing any of these.  Similarly, I know I'm pretty good in financial decisions and choices.    At my stage in life,  I choose to improve those areas which I'm good at doing.

The middle stage is one of transition from unconscious competence and incompetence to conscious competence and incompetence.  Getting through this interim stage as quickly as possible is one of the great challenges of young adulthood.  It's during this stage that many mistakes are made because unconscious incompetence may be confused with conscious competence.  For example, many people who took adjustable rate mortgages at greater than 100% of home equity may have believed they were consciously competent.  In fact, it is more likely that they were unconsciously incompetent with respect to financing a home.

For financial matters, I hope to help my daughter become unconsciously competent and then transition to conscious incompetence and competence as quickly possible.

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

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

Copyright © 2011 Achievement Catalyst, LLC

The Wealth Builder Carnival #58

Welcome to the fifty-eighth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now onto the Carnival:

Earning

Will presents Want To Blog Full-Time? Ignore "Warnings";, Listen To Advice! posted at Former Banker, saying, "Becoming a full-time blogger takes time, money, dedication, and unfortunately, most people who try will fail. Which side you end up on depends partly on getting the right information."

oilhand99 presents How to Calculate the Profitability of Your Small Business Idea posted at Trees Full of Money, saying, "Most successful investors have either started or aspire to start their own small business. This helpful article will teach you the "academic" way of calculating the profitability of your small business idea."

misst presents Top 5 Must Know Negotiation Tips To Get Anything You Want posted at Prairie Eco-Thrifter, saying, "Negotiating can be done in almost any area of our life. We can negotiate to get a good price on an item in a garage sale, or we can negotiate to close a million dollar deal. Whatever it is, stocking up in negotiation tips can help you get what you deserve, or even more. Below are five of the most basic (and the most important) negotiation tools you can use for any situation in life."

Lazy Man and Money presents Musings about Kids and College posted at Lazy Man and Money, saying, "I was in a conversation the other day with someone who seemed really intelligent an accomplished. I was quite enjoying it, but when the conversation turned to their kids and college, I was surprised by this person's philosophy. She said something to the effect of: I told my daughter to just take the classes that interest her. There's no need to focus on a direction."

Insuring and Protecting

My Journey presents Unequal Distribution to Heirs posted at My Journey to Millions, saying, "I was working on an interesting estate planning case today and I thought I would get people’s opinion on the subject. At the end of the day this client wants to leave his assets in an unequal distribution schedule to his three children wherein one of the children will receive the lion’s share of the 8 digit estate."

Investing

MoneyCone presents If You Own Mutual Funds Or ETFs, Don’t Ignore This Metric posted at Money Cone, saying, "Lipper Metrics are just a tool to help the investor navigate the ocean of ETFs and mutual funds. Having an understanding of this rating system should go a long way in making the right decision when it comes to investing."

Dividends4Life presents 7 High-Yielding Mega-Cap Stocks posted at Dividend Growth Stocks, saying, "There is perceived safety in size. Giant corporations aren't randomly grown. Instead, they are carefully built through superior management and foresight. Often these are more mature companies that also offer stability and predictability, usually at the expense of dynamic growth. These are your mega-cap stocks."

Jim Tolley (aka Kidgas) presents Europe Fatigue and Dividends posted at Cash Flow Mantra, saying, "I have had enough of hearing about Europe and their debt crisis. Actually, I have had enough of watching the impact of constant hope followed by inaction on my portfolio."

Living Frugally

Kevin presents The 3 Stages of Financial Freedom posted at Invest It Wisely, saying, "Last week, I talked about the three stages of financial despair. This week I am going to look at the flip side, the three stages of financial freedom. We all want to get out of the rat race, but before we get there, we need to get out of the hole and onto level ground."

Jason@LiveRealNow presents Say Please posted at Live Real, Now, saying, "I took a look at all of my accounts and utilities to decide which ones I was willing to change, drop, or reduce. The two I came up with were Dish Network and CenturyLink DSL. My plan was simple: Look for their introductory offers; Compare to my current price; Call; Ask if existing customers are as important as NEW customers; Finally, be nice!"

SavingMentor presents Using Freezer Cooking As A Way To Reduce Your Grocery Budget posted at HowToSaveMoney.ca, saying, "Don’t be intimidated by freezer cooking. It can be as easy or as hard as you make it. If you just simply double your recipes when you are cooking your dinner, you will have a stocked freezer and more money in the bank, before you know it."

Justin presents The Importance of Cash Management posted at Money is the root...of all things GOOD!, saying, "I’m willing to bet that many of you who read this article will probably disregard the need to forecast and manage your cash flow. I can’t urge you enough that it can and will help improve your life and your finances."

Marie presents Dorm Living and Other Money-Saving Tips for College Students posted at Money Spending Mommy, saying, "If you’re going to school full-time, you’ll have a limited number of hours each week to work and earn money. So it’s important to learn how to cut costs and live on a budget. Here are some money-saving tips that will help."

Jonathan from Debt Loans presents Renovating Your Home on a Budget posted at Wallet Watcher, saying, "Turn your dreams into reality by converting your home into a blissful sanctuary without spending a fortune. By doing pre-renovation research on design, materials and colour scheme and adopting the above-mentioned strategies, it is possible to cut costs without compromising on quality."

Theresa Torres presents How to Choose Seasonal Produce to Save Money posted at Health On A Budget, saying, "We don't have to spend a lot of money to have a healthy diet. We can still enjoy our favorite fruits and vegetables and still have value for our money by following these tips."

Retiring

Paul Vachon presents Estate Planning Basics - What You Need to Know posted at The Frugal Toad, saying, "Have you ever thought about what would happen if you became incapacitated or died? What would happen to your home and other assets? Do you have a will and does your spouse know what your final wishes are? An estate plan is a set of legal documents that will make sure that your final wishes are taken care of."

Matt presents 089 Financial Excellence: How Much do you Need to Retire? posted at Living In Financial Excellence, saying, "Most people wait until they’re ready to retire and then wonder if they can retire. If you wait that long, it’s waaaaay too late, and you probably won’t be able to retire. You need to have a plan early and start working the plan early."

Saving

Mr. Money Smarts presents Paying For Your Child’s College Tuition posted at Smart On Money, saying, "If you have college-bound kids, and if you are planning to be the primary contributor to their tuition costs, there are practical means for saving money towards college and for reducing the bill. Here, then, are some tips that every parent in this situation should keep in mind:"

Taxes

Bucksome presents Tax moves to make before the end of the year posted at Buck$ome Boomer's Journey to Retirement, saying, "There may be some last minute strategies that you can look into to reduce you tax burden."

Sunil presents IRS Tax Form 1099 Reporting is Mandatory for Your Online Business posted at The Extra Money Blog, saying, "It’s never too late to comply with tax law, even if you have to go back and request retroactive forms from previous years. Don’t wait and get started today."

Linsey B. Knerl presents Taxes and Your Small Business: Are You Ready? posted at 1099 - Mom, saying, "If you are a very new business, and haven't begun to track your expenses and income for the year, it's not too late! If you are an old pro, and simply need to collect all your documentation for easy tax preparation, now is the best time to get started."

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: the wealth builder carnival, blog carnival.  

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

This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC

Links to Carnivals from December 13 - 19, 2011

Here are the links to the Carnivals in which My Wealth Builder participated from December 13 - December 19, 2011:

Carnival of Financial Camaraderie #12

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

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

Copyright © 2011 Achievement Catalyst, LLC

Getting a New Wallet

I am one of those guys that uses a wallet way too long.  I've been using the same one for at least 5 years and maybe as long at 10 years. I just wait too long before changing out my wallet. An old wallet is confortable to me and if it isn't broken, I keep using it. By the time I make a change, the wallet is all bent out of shaped from being stuffed with various receipts and business cards. 

It's not that I don't have a new wallet ready to use.  When I was working in Asia, I took the opportunity to purchase several replacement wallets in Korea, where leather goods are priced relatively low.    I have at least seven new wallets.     So I should be changing wallets very 4 years based on a typical life expectancy: -)

So today, I cleaned out my wallet, moved over the frequently used items (credit and membership cards) and transferred the cash.  I will keep the secondary items in the old wallet, allowing me to have a more compact wallet for everyday use.

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

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

Copyright © 2011 Achievement Catalyst, LLC

An Appreciation for Modern Appliances

"Good appliances are well worth the cost for the time saved." ~ retired research fellow at my company

Every summer, we do a relatively primitive camping trip in a tent and sleeping bags. Although we bring in food, there is still a lot of work to prepare a meal and clean up afterwards.  We usually spend a large part of the day gathering wood, starting a fire, cook and then cleaning up.  In addition, we can only take in about 2 days worth of food since that's how long the ice lasts.  It has given me a great appreciation for all the modern appliances we own.

• Stove and oven.  I spent a lot of time gathering or purchasing sufficient firewood, building a fire in advance, and then ensuring there was sufficient heat to cook.  Quite a difference from just turning on the stove and oven to cook.
• Refrigerator.  Our camping trips are usually limited to two days since that is about the storage life of food in a cooler with ice.  My spouse generally plans excellent gourmet camping meals, which means fresh meat, egg and vegetables.  We do use some frozen foods, e.g. vegetables, to save cooking time. 
• Dishwasher. Cleaning up is a tedious and time consuming task when camping.  There definitely isn't a dishwasher nor is there a sink with running water.   We usually use a large pot of heated water to was and rinse our cookware.   For reference, we do use paper plates and plastic utensils to minimize the number if items that need cleaning.
• Washing and dryer.  Of course, we usually can pack enough clothes for two days, even if we do get them dirtier than normal.   In addition, no one really notices dirty clothes when camping.   The tough part is drying out clothes when they get wet, especially if it's raining.

Based on our camping experiences, I realize that not having these appliances could easily add 4-5 hours of extra work to our already busy day.  I am glad to live in a society where access to these appliances is relatively easy and low cost.  (However, I must admit that I didn't have a dishwasher for most of my single adult life :-)

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 © 2011 Achievement Catalyst, LLC

Am I Better Off Than My Parents?

For now (age 53), the answer is yes.  Here were some of the factors that helped:

• Education.  My parents helped me get an education at a very good university.  I contributed by majoring in Chemical Engineering which helped me get a high paying job right out of college.  For reference, my dad also had a degree in Chemical Engineering (B.S. and M.S.) and Nuclear Engineering   (PhD).
  
• Career.  I worked for a Fortune 25 company for all of my career advancing to the top 5% of management.   My dad advance to first level management in one the top privately held companies for which he worked.  Advancing further in management definitely helped our finances.
  
• Later marriage.    My parents were married at 30 and had two kids almost right away.  I didn't get married until my late thirties and didn't have our child until my mid forties.   Marrying and having one child later definitely helped our finances.
  
• Retirement.  I retired at 49.  My wife stopped working at 38.   My dad retired at 72.  My mom stopped working at 32.  Early retirement helped our quality of life but not necessarily our finances.

All these factors helped me be better off than my parents at the same age until now.  However, going forward, I don't know if I'll continue to be better off than my parents when I reach 70, mainly because my dad continued to work until 72.  Unless the current economic conditions change significantly, our saving and retirement accounts will not likely grow to level my parent had in their seventies.

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


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

Copyright © 2011 Achievement Catalyst, LLC

Minimizing Our Portfolio Volatility

EU saved or EU will fail.   The market is being whipsawed everyday by the current perception.  The market direction is hard to project because a single event can change the market trend significantly.   My short term goal is to minimize volatility as much as possible.  Here is how I am doing that:

• Cash.  There is zero short term volatility for cash.  Of course, it won't grow.  However, it doesn't get smaller either.    In addition, I will have funds to purchase stocks when the market falls.
  
• Defensive stocks.  If I buy stocks, I will stick to good dividend paying stocks from strong companies.  These types of stocks don't fall as much in a down market.
  
• Short poor performing companies.   I don't want to be mainly short since a positive perception can cause the market to advance significantly.  However, by being short some stocks, our portfolio decline will be minimized when the market falls.

Currently, we are still mostly in cash.  However,  I have started to buy some defensive stocks and have shorted one stock.   For example when the market was down today, our portfolio was down, but the losses were mitigated by two defensive stock that were up and gain from the stock which was shorted.  When the market rises, our gains will likely be lower than the overall market, which I'm willing to accept as the price of lower volatility.

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 © 2011 Achievement Catalyst, LLC

The Wealth Builder Carnival #57

Welcome to the fifty-seventh edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now onto the Carnival:

Earning

Shamelle presents FBinfluence Facebook Course – How To Do Facebook Marketing The Right Way posted at Better Blogging Ways, saying, "Facebook is already approaching 1 billion members and is the site where everyone online is spending time. The truth is most successful business depends on people, to be in business you got to have people interested in what you got to offer and this is one of the main reasons why you simply can’t ignore Facebook."

Investing

My Journey presents Regardless of Faith Is Sharia or Muslim Based Investing For You? posted at My Journey to Millions, saying, "My skepticism is whether one can actually invest in American companies that truly follow the rules of Shariah."

Kevin presents How I Made $150, Lost $200, and Re-learned a Valuable Lesson posted at Invest It Wisely, saying, "Never buy physical gold or silver as an investment! Absolutely the worst idea ever. Ever. For one thing, you can’t go short. For another, the bullion dealers charge a huge markup."

Kanwal Sarai presents How Can You Sleep At Night With All Your Money In Stocks? posted at Simply Investing Blog, saying, "Someone recently asked me, 'How do you sleep at night, knowing that all your money is in stocks?' I sleep very well, because I ignore the media noise."

Dividends4Life presents 10 High-Yield Stocks With A Low Price To Book posted at Dividend Growth Stocks, saying, "When looking for value-priced stocks, the Price-To-Book (P/B) ratio is one that I like to focus on. P/B is calculated as share price divided by book value per share. Book value is most often calculated as Assets less Liabilities."

Mike Piper presents What are Muni Bonds? And Should I Own Any? posted at The Oblivious Investor, saying, "Municipal bonds offer interest that's free from federal income tax. But are they a good fit for *you*?"

Investor Junkie presents Could Disney Make a Good Addition to Your Income Portfolio? posted at Investor Junkie, saying, "Even though income is important to an income portfolio, it’s worth considering companies that will provide earnings down the road. Disney just might be one of them."

Dan Ekstrand presents How to invest in the stock market posted at What can I do about ___?, saying, "A intro to asset allocation and some simple strategies that
have done well in turbulent markets."

Living Frugally

Jason@LiveRealNow presents Future Me Returns posted at Live Real, Now, saying, "This is a conversation between me and my future self, if my financial path wouldn’t have positively forked 2 years ago."

Mr. Money Smarts presents Appreciate What You Have, And Enjoy It! posted at Smart On Money, saying, "In this Christmas season it can be so easy to forget about what’s important in life and start to get caught up in all the consumerism that is so rampant in today in our culture.So while we move into December and start to focus on our upcoming Christmas gatherings, what can we do to have a happy holiday?"

DJ presents Easy Ways To Save Money On Glasses and Contacts posted at The Family Wallet, saying, "Over the many years that I’ve had to purchase contacts and eye glasses, I’ve tried lots of things. Here are some ideas I have for saving money on them:"

Tim Chen presents Make Your Miles Count: Getting Creative with Travel Rewards Cards posted at NerdWallet Blog - Credit Card Watch, saying, "Sometimes the best way to use your rewards miles isn’t obvious. There are some neat tricks you can use to make your miles a worth a little—or a lot—more."

misst presents Home Improvements That Pay You Back posted at Prairie Eco-Thrifter, saying, "For those of you less green and money conscious folks, I can tell you that being green also saves you money. Eco- friendly methods are proven to be cost efficient. Today I wanted to share with you how you can be green in your home and at the same time make money. Here is how:"

Jonathan from Debt Loans presents 6 Tips for Eliminating Food Waste posted at Money Mum, saying, "Using leftovers and budgeting wisely can save money – and resources. Learn to become cognizant of how much food you really do dispose of, and then consider these tips to improve the efficiency of your kitchen:"

Control your Cash presents 控制现金”人造橙色鸡 posted at Control Your Cash: Making Money Make Sense, saying, "We’re here to argue that eating at a restaurant, in our example one a step below P.F. Chang’s “upscale casual” category, can be financially savvy."

Jonathan from Debt Loans presents How to Eat Healthy on a Budget posted at Frugal Living, saying, "Eating healthy doesn’t have to cost more. Here are some tips for staying healthy on a budget."

Jonathan from Debt Loans presents Four Tips for Saving on Transportation Costs posted at Wallet Watcher, saying, "For people who have places to go but don’t want to spend an arm and a leg to maintain a car, there are several great alternatives to traveling alone in your car:"

Rodney Maley presents Winter Energy Checklist posted at Life-fficient, saying, "This article presents a quick summary of important items in your home to be checked to prepare for the winter months."

Retirement

Super Saver presents Retired California Teacher Pension - WOW posted at My Wealth Builder, saying, "I read about a teacher/administrator in California who retired at 59 after 36 years and will receive a pension $174,308 a year for the rest of his life. Wow, what a deal."

Saving

Lisa presents Emergency Fund: Necessity or Overrated? posted at Thriftability, saying, "Life never completely goes according to plan–the car breaks down, someone loses hours at work, school tuition increases. Creating an emergency fund sees you through these “what ifs” without dramatically impacting your budget. In addition, an emergency fund provides a financial cushion – outside of your normal budget – so that you do not need to use your credit cards and rack up debt in times of crisis."

Bucksome presents Are You Piddling Away Your Money? posted at Buck$ome Boomer's Journey to Retirement, saying, "There are so many habits that can sneak $100 out of our account each month! And ultimately, $3.94 million dollars is wasted."

Taxes

BIFS presents Essential Tips to Hiring the Right CPA posted at Budgeting In the Fun Stuff, saying, "Don’t be in a rush to hire someone and be sure to start your search way before the tax season begins. Taking the time to hire the right person will benefit your business in the long run."

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: the wealth builder carnival, blog carnival.  

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

This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC

Links to Carnivals from December 6 - 12, 2011

Here are the links to the Carnivals in which My Wealth Builder participated from December 6 - 12, 2011:

Festival of Frugality #308

The Wealth Builder Carnival #56

Top Personal Finance Posts of the Week

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

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

Copyright © 2011 Achievement Catalyst, LLC

Schizophrenic Market

Buy, sell, hold, sell, buy --- whatever.  This market is extremely volatile.  After convincing myself this weekend that the markets were in an short term uptrend, investors lose confidence is the EU actions and the market drops 2% and closes about 1.34% down.

I've decide to go back to sidelines.  I'll keep the longs and shorts that I have for now.   However, I'm waiting out this week before taking any more long or short positions.


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


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

Copyright © 2011 Achievement Catalyst, LLC

Stocks: Buy Now or Later?

With all the events of the past week and the lack of a sustained market rally, I have convinced myself again that waiting to buy stocks is the better decision.   So I returning to my original buy point of a Dow 10,200 and reinvest 10% of our retirement and savings accounts.

For now, I will continue to hold the long and short positions we have.  I will start making a list of good dividend paying stocks to buy when the Dow reaches 10,200.

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

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

Copyright © 2011 Achievement Catalyst, LLC

Expecting a Short Term Rally

Although I still think there are significant problems in the EU zone, the market's fears have been appeased in the short term.   With the coordinated central banks action and the agreements by EU countries on Friday, it appears the sovereign debt defaults and a breakup on the EU zone may be prevented, or at least delayed.  I believe the markets will react positively and continue to rally in the short term.

I have already started buying last week: IBM, McDonald's, Eli Lilly, Core Labs, and Stericycle.   While IBM McDonald's and Eli Lilly pay nice dividends, I chose Core Labs and Stericycle for having good upward trends since January 2007.  This week, I will continue to consider buying other good dividend paying stock such as Abbott Labs, Phillip Morris, Freeport-McMoRan, and Intel.  

Disclosure:  Our personal investment accounts current have positions in IBM, McDonald's, Eli Lilly, Core Labs, Phillip Morris and Stericycle.  We have no positions in Abbott Lab, Freeport-McMoRan and Intel but may make purchases as early as Monday, December 12.
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 © 2011 Achievement Catalyst, LLC

Retired California Teacher Pension - WOW

In a CNBC article, I read about a teacher/administrator in California who retired at 59 after 36 years and will receive a pension $174,308 a year for the rest of his life. Wow, what a deal. 

First, stories like these cause me to question the formulas used by governments to calculate public employee pensions.  For example, when I worked for a county organization as a summer part time worker, I learned that my pension formula was a percentage times years of service times the average of my three highest paid years.    So if I worked part time for 27 summers and then worked full time for 3 years, my pension would be based on my three full time years, even though the majority of my service was at a much lower pay.

Second, many public employee pensions are underfunded by about $690 billion, meaning the difference will likely be made up through higher taxes in the future or reductions in pension payouts. It seems that governments ought to consider what many private companies have done in moving from pension (defined benefits) retirement plan to a 401K type (defined contribution) plan.  That way retirees will truly get what they contributed, the company match, and the earnings.

Finally, I recognize that the person identified in the CNBC article is probably not the norm.  According to this article, the average California teacher pension is $40,000/year with only 2% of pensions exceeding $100,000/year, mostly for management retirees.    However, given the issues for the first and second points, its probably time for state and federal governments to review the feasibility of retirement pension benefits, as the private sector has done long ago.

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


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

Copyright © 2011 Achievement Catalyst, LLC

Strategies to Lower Federal Income Taxes in Retirement

"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible." ~ Judge Learned Hand

As a retiree, I've learned that I have additional opportunities to minimize our tax responsibility.   I gladly use those opportunities to send less of our hard earned money to the wasteful federal and state governments.  These strategies simply require the capability to shift income and deductions.  By doing so, a retiree can reduce his overall tax responsibility over a two year period.

There are three elements that impact our tax responsibility:  income, deductions and credits.  

• Credits.   Credits are the best way to reduce taxes since they are a direct offset of tax responsibility. So a $1000 credit reduces tax responsibility by $1000.  The tax credits for which we may be eligible are the Saver's credit ($2000 max) and the Child Tax credit ($1000 per child).  Both credits go to zero above certain income thresholds.
• Deductions.  Deductions reduce taxable income.  Sometimes a challenge for retirees is having sufficient deductions to exceed the standard deduction, especially when there is no mortgage deduction.  A solution is to shift deductions to one year and take the standard deduction in the other year.   For example, an option is to pay two years of property taxes and shift contributions into one year to exceed the standard deduction.  Then take standard deduction in the other year. In this example, the total deductions for two years will be greater than two times the standard deduction.
• Income.  Depending on the source of income, the capability to manage income received will vary. Retirees that receive pension payments or regular dividend/interest income probably can't adjust income as easily.  However, those with stock, capital gains and IRA distribution income may be able to choose when to take taxable income.  By managing when to take taxable income, a retiree may be able minimize the part of the funds that are taxable.

By managing income, deductions and credits, I am able to ensure that our household has the minimum tax responsibility, which allows our house to keep more our money.

For more on Reaping the Rewards, check back every Friday for a new segment.
This is not financial, retirement or tax advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC

Loss of Accountability

"The Buck Stops Here" ~ sign on President Truman's desk

When I was a child, adults took responsibility for their actions.  When I was a new manager, I realized that I was responsible for the organizations results within a month of taking over.  I wasn't going to be able to blame the lack of positive results on my predecessor, no matter how bad the situation I inherited.

Nowadays, the norm is to blame poor results on either one's predecessor or the prior situation, especially if the inherited state of affairs is bad.  Leaders don't seem to take personal responsibility anymore. The latest is Jon Corzine: MF Global Was "Not My Fault' reports that Mr. Corzine "inherited a firm doomed by the risks his predecessors took."     I guess I shouldn't be surprised.  After all, that seems to be seems to be a common excuse in today's world.  If someone can't solve a problem, then it's the predecessor fault.  In some cases, the predecessor is the reason even after almost three years.

Sorry, I just can't  agree.  If someone takes the position, he also takes both  the credit and the blame for the results.  Hopefully, accountability is something we'll be able to teach our daughter to have.

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

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

Copyright © 2011 Achievement Catalyst, LLC

Check Whether a Deal is a Deal

In my state, I have the option of purchasing natural gas and electricity from competitive retail suppliers or from the government regulated utility.   On the surface, it would seem purchasing energy from competitive retail supplier versus a regulated supplier.  However, that assumption isn't always true based on a historical analysis I did.

Until recently, I decided keep purchasing natural gas from the regulated utility.  I had heard "horror" stories of people committing to a fixed rate gas cost only to have the market price dip significantly below the competitive fixed rate retail price.  So I always stayed with the regulated market price.  However, last year, a competitive retail supplier offered a variable rate with a maximum cap.  So, the price we pay has a maximum amount but it can decline if the market price drops.  For us, it was a no lose situation so we purchased it

On the other hand, I decided to purchase electric energy from the retail supplier right away.   The offer was either an 18% discount from the variable regulated price or a fixed rate that was a 33% discount from the current regulated price.  For this one, I called our local electric utility and figured out that the regulated price didn't vary much during the year.  So a fixed rate at a 33% discount was likely the best deal, since there was a only a small chance that the price of electricity would decline much.  For the past year,  the 33% discount fixed rate option that we contracted turned out to be the best option.

Over the past year, we've reduced our energy utility costs by about 1/3.   So the analysis I did paid off is a great savings.

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 © 2011 Achievement Catalyst, LLC

Links to Carnivals from November 29 to December 5, 2011

Here are the links to the Carnivals in which My Wealth Builder participated from November 29 - December, 2011:

Baby Boomers Blog Carnival One Hundred-twentieth Edition

Cavalcade of Risk #145

Carnival of Financial Planning #213

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

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

Copyright © 2011 Achievement Catalyst, LLC

The Wealth Builder Carnival #56

Welcome to the fifty-sixth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now onto the Carnival:

Insuring and Protecting

DJ presents Why Do I Need to Assign a Power of Attorney? posted at The Family Wallet, saying, "Everyone should at least consider having a POA. Should you become incapacitated without having a POA, a judge will have to appoint an agent to manage your affairs; agent responsibilities do not automatically default to your closest relative."

Super Saver presents Thinking About Earthquake Insurance posted at My Wealth Builder, saying, "The recent earthquakes in Virginia and Oklahoma have caused me to give consideration to earthquake insurance."

Investing

Dividends4Life presents 9 Low-Risk, High-Yielding Dividend Stocks posted at Dividend Growth Stocks, saying, "If your goal is to accumulate wealth for a comfortable retirement, then there is no risk-free path. Yield and risk tend to follow each other. As risk increases, the investor demands more yield to compensate for that risk. Sometimes it is desirable to accept higher risk for a higher yield. Other times we may be accepting higher risk and are not being adequately compensated for the additional risk."

Jim Tolley (aka Kidgas) presents Warren Buffett, Intel, and Me posted at Cash Flow Mantra, saying, "There are plenty of good ideas out for investing out there. I think the problem comes because there can be too much information for some people to decide. Should I invest in individual stocks or mutual funds or exchange traded funds? Should I use bonds or preferred stocks or CDs for income? How much international exposure should I have?"

Barb Friedberg presents Investing Rule 1: Know Thyself posted at Barbara Friedberg Personal Finance, saying, "Choose an investing path that is not only financially sound, but in line with your personality and risk tolerance."

Living Frugally

Chelsea Prescotti presents Top 10 Things You Should Never Buy New posted at CreditScore.net, saying, "Shiny new toys are always nice to have, even as an adult. While those nifty new items might feel good, they are not always a wise choice. When it comes to new versus used, the following ten items are things you should always buy used, when feasible. You won’t give up value, but you will save cash, provided the items are in good condition."

Matt presents 6 Ways to Control Home Remodeling Costs posted at Living In Financial Excellence, saying, "Diving into a remodeling project without proper preparation, however, is a risky prospect. You need to commit to planning and forethought to make sure that your modest remodeling idea doesn’t become costly. Below are some tips to get you started."

Jon Elder presents 5 Ways People Waste Money on their Cars posted at Free Money Wisdom, saying, "Below are five common ways people waste money on their cars."

Lazy Man and Money presents I’ve Finally Ditched My Cable Box and Cable Modem Rental Fees. posted at Lazy Man and Money, saying, "For some time I've been writing about ending my cable box rental fees, but I haven't been able to pull the trigger. This week I finally did it."

Justin presents You Don’t Need Money to Do What You Want posted at Money is the root...of all things GOOD!, saying, "I grew up in the 1950″s with gypsy parents – well, they really weren’t gypsy’s – but they claimed to be because they liked to go, go, go. We went. Every year. Two weeks. All over the States. They were poor, but they made it a priority to always travel for two weeks each summer – and take we two kids along. How did they do it?"

Bucksome presents Money saving tips for the holidays posted at Buck$ome Boomer's Journey to Retirement, saying, "Here is my list of money saving tips for the holidays. With a little planning you can save money, reduce stress and have a fun filled holiday."

B.B. presents We Conquered Black Friday posted at Beating Broke, saying, "We stuck to our list, only buying one extra item on Black Friday. We not only kept to our budget, but we beat it! When we were done with our busy morning of shopping, we had everything on our list, and we’d spent less than $150!"

Tyler presents The Best Home Gym Equipment for the Price posted at Weight Training, saying, "I hope you find this article fitting for your readers! Your readers need to know about how to save money by exercising at home!"

misst presents How to Be a Frugal Shopper posted at Prairie Eco-Thrifter, saying, "Are your shopping habits saving you money? If not, it’s time to learn some tricks on how to become a more frugal shopper!"

Lisa presents Money Saving Christmas Gift Ideas posted at Thriftability, saying, "Striking a balance between giving the perfect gift and still staying within budget can be tricky, but with a little ingenuity it’s not so hard to pull it off."

Jonathan from Debt Loans presents Saving Money on Music posted at Wallet Watcher, saying, "Purchasing music can really add up over time. If you’re tacking on another $20 or $30 a month just on music, perhaps you’re missing out on some free and/or very reasonably-priced options. It could be time to take advantage of some possibilities."

Retirement

Beth Montgomery presents Saving for Retirement posted at Credit Cards for Fair Credit, saying, "When you’re just starting your career, it is hard to think about retirement because it feels so far away, but in reality, putting money away when you are young will help you save more in the long run."

Saving

MoneyCone presents If you are happy with your Big Bank, should you still switch to a Credit Union? posted at Money Cone, saying, "Is it worth switching to a Credit Union even if you are happy with your Big Bank? Unless you think this is chump change, I think it is worth it. The good news is you have a choice. Laziness in this case could be costing you dearly."

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: the wealth builder carnival, blog carnival.  

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

This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC

A Long and Short Portfolio

A retired colleague of mine has started his a "hedge fund" for his own portfolio.  He is both long and short an equal dollar amount of stocks.  Of course, the long stocks are different from the short stocks.  The idea is to choose long stocks that go up more than short stock in an up market.   Theoretically, the long stocks should also decline less than short stocks in a down market.  The net effect is an investor will make money in both up and down markets.

With the market trading in a range, I think this is a good time to do a long and short portfolio.  It seems the strong stocks keep trending up and the weak stocks keep trending down despite the direction of the market at the moment.

The stocks I'm currently considering for the long side are McDonald's, IBM, Phillip Morris and Stericycle.   The stock I'm I considering for the short side is Shutterfly.     I will need to find more stocks for long and short positions, but this a start.

Disclosure:  Our retirement accounts are long shares of McDonald's and Phillip Morris.

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 © 2011 Achievement Catalyst, LLC

New Realities of Retirement

It looks like the retirement dream is being delayed according  to  More Americans Expecting to Retire in Their 80s and 80 is the New 65 for Many Retirees.  People will work less instead of quitting work completely.  Even those that work until 80 will need to slow down.   Also, people will spend more of their savings and have less to leave their children.    

The main issue is insufficient savings to enable a complete retirement at 65.  Of course, the great recession, low interest rates and stock market decline isn't helping much either.
 
For more on New Realities, check back every Sunday for a new segment.

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

Copyright © 2011 Achievement Catalyst, LLC

Higher Tax Advocates' Hypocrisy

If I were an advocate of higher taxes, I would gladly pay high taxes.  That doesn't seem to be the case for a couple well know higher tax advocates:

Warren Buffet.  He is well known for saying he pays at a lower tax rate than his secretary.  Also, he believes that the wealthy should pay more taxes.  However, Mr. Buffet has contributed most of his wealth to the Gates Foundation, a charitable organization, and will avoid the estate tax of 55%.  When asked why Buffet didn't let his estate be taxed, his response was that the Foundation would be a better distributor of his money than the government.

Also, Mr. Buffet could have paid higher taxes since the Treasury does accept deductible contribution to reduce the U.S. debt.   I'm surprised Mr. Buffet didn't choose to do this given his advocacy of the rich paying more taxes.

Senator John Kerry (D-MA).  Senator Kerry is a proponent of raising taxes on the wealthy, of which he is one   However, when it came to paying sales tax and excise taxes on the family yacht, Senator Kerry docked to the yacht in neighboring Rhode Island which has neither a sales tax or excise tax. 

Senator finally decided to "voluntarily" pay the Massachusetts taxes after the media published the avoidance of his tax responsibility to his home state.

 
I prefer to support those who do as they say, instead of only expect others to do as they say.  Both Warren To me, Warren Buffett and John Kerry rate pretty low in the "do as they say" category.

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

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

Copyright © 2011 Achievement Catalyst, LLC

Working Close to Home is My Preference

Since taking early retirement in my forties in 2007, I've worked seven different part time seasonal jobs and one temporary full time job.   One part time job and the temporary full time job were "work from home."  The rest of the other jobs required a commute from 2 to 10 miles, one way.   While I disliked the 10 mile commute the most, I didn't like working from home the best. To me, working close to home was the best.  Here are the reasons:

Gets me out of the house.   Working from home made it too easy to stay in the house all day.  Working a couple miles away was a reasonably short commute time and got me outstide.

Leaves work at work.  All my commuting jobs allowed me to leave work at the job.  Working from home made my work always available to do.

Separates home and work.   When working from home, my den became both a personal and work place.  I prefer work to more separated from my personal life instead of always connected.

In 2012, I will be limiting my part time retirement jobs to those that are within 5 miles of my house.  That way I get a very short commute and can leave work when it's done.
 
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 © 2011 Achievement Catalyst, LLC

No Longer Relevant

"I'd like to be viewed as something alive and relevant, not some fossil." ~ Brian May

I used to think the worse part of aging was decline of physical and mental capabilities.  Seeing a significant loss in capability versus what I was able to do in my younger days was a depressing thought. However, this year, I realized there was a worse part of aging than the decline of capabilities.  It's the loss of relevance.

The idea of being irrelevant became very clear during the Thanksgiving holiday when I watched the movie Secondhand Lions in which the main character, Hub McCann, expresses his fear about "becoming useless," despite having a glorious career in the French Foreign Legion.   His fear resonated with me.

Yes, I am no longer relevant to younger people due to my age (53) and being early retiree (in 2007).   As my nephew has told me, his world is much harder than the world in which I lived as a child.  Therefore, my past experiences are not meaningful and my perspective is outdated.  For example, my daughter doesn't seem to think I know enough to help with her advance first grade homework :-)

Perhaps, that's why I enjoy tutoring college prep exams.  It may also be why I took on a temporary full time job as the Executive Director of a non-profit.   In these roles, I am still relevant and making a positive impact.   And, for brief moments, I feel much younger than my actual age :-)

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

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

 Copyright © 2011 Achievement Catalyst, LLC

The Piper Will Get Paid

"If it's too good to be true, then it probably is." ~ old adage

Call me cynical, but optimism created by the central bank was not warranted based on personal finance principles  that I follow.

Today's coordinated action by global central banks to increase liquidity has given the investors optimism which drove up the Dow 490 points today.   I am reminded of the last two times the Fed pumped exorbitant amounts of money into the economy.   We got the Internet and housing bubbles which were great while they lasted.  Unfortunately, both came with significant crashes that led to economic recessions.

The central bank actions will create some short term relief and positive economic results.  I expect that there will be a nice rally in the stock market.  I may even put reinvest some fund back into stock, reversing the my withdrawal from the market in the past few months.

Unfortunately, while the move does address some interbank lending challenges, it doesn't deal the fundamental issues in Europe.   To me, the central bank action only delays the inevitable.  Greece will default, weak European banks will fail, and there will be another economic crisis. It's not a question of if, but a question of when the piper will get paid.

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

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

Copyright © 2011 Achievement Catalyst, LLC

Links to Carnivals from November 22 - 28, 2011

Here are the links to the Carnivals in which My Wealth Builder participated from November 22 - 28, 2011:

Carnival of Financial Planning #212

Baby Boomers Blog Carnival One Hundred-nineteenth Edition

Road to Financial Freedom #37

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

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

Copyright © 2011 Achievement Catalyst, LLC

The Wealth Builder Carnival #55

Welcome to the fifty-fifth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now onto the Carnival:

Earning

Will presents Why I'd Rather Earn More Money Than Spend Less posted at Former Banker, saying, "Frugality can only get you so far. You need to kick it up a notch if you want to really build wealth"

Insuring and Protecting

DJ presents Difference Between Health-Care Proxy and Living Will posted at The Family Wallet, saying, "Here are some of the different elements of living wills and health-care proxies."

Investing

Bob Shark presents How to become an Investor posted at How to Become..., saying, "This short guide will tell you how to become a moderately aggressive investor. I can't promise you'll like this style but at least you can try."

Investor Junkie presents Investment in Physical Gold? posted at Investor Junkie, saying, "Gold seems to be all the rage these days — especially physical gold. Whether you are investing in gold coins, or whether you are investing in gold account, receiving a record of numbered gold bars that belong to you, it’s important to understand the challenges that can come with investing in physical gold."

Kanwal Sarai presents Top 5 Reasons Why People Buy Index Funds posted at Simply Investing Blog, saying, "At the end of the day, index investing is fine for people who want to put thirty seconds a month into their investment portfolios and get average results."

Dividends4Life presents 17 Stocks Building Wealth Through Higher Dividends posted at Dividend Growth Stocks, saying, "Some traditionalist would say your home is your greatest wealth building asset. I would argue it is not. Others would say your income is your greatest wealth building asset. Thought there is a lot of truth to the statement, it is still not your greatest wealth building asset. So, what is your greatest wealth building asset? Everyone is born with it."

Dividend Growth Investor presents Should you follow Buffett’s latest investments? posted at Dividend Growth Investor, saying, "Warren Buffett is one of the most successful investors of all time. Investors who closely followed Buffett’s moves in the Berkshire Hathaway (BRK.B) stock portfolio between 1976 and 2006 would have significantly outperformed the market. So should investors follow his latest moves?"

Living Frugally

J.B. presents Managing Your Impulsive Buying Habits posted at My University Money, saying, "Impulsiveness can be fun at times, but it has a way of surprising you at the end month when that credit card statement comes in the mail."

Jason P. presents The $50 Christmas Budget posted at One Money Design, saying, "A thoughtful and cost effective way to share your love this holiday season."

Retiring

misst presents Plan Your Retirement posted at Prairie Eco-Thrifter, saying, "Although retirement is a ways off for me yet, I do think about what it will look like quite often. I want to make sure I have a plan in place for when I cross this bridge so that I stay happy, content, and stimulated. If all goes according to plan my hubby and I will be traveling the world and volunteering where there is need and each of these trips will be photo documented since I love taking pictures."

Saving

Jason P. presents How Do Saving Bonds for Kids Work? posted at Comments for Childrens Savings Accounts HQ, saying, "Savings bonds for children are a great way to invest in a child’s future."

Taxes

SteveR presents Gambling and taxes – what should you report? posted at 2009 Tax, saying, "Gambling is something that many people enjoy doing either on a regular basis or now and again."

Jessica Bird presents How Much Tax Do You Pay On Gas? posted at CarTaxBands.org, saying, "Do you think you spend a lot on gas? You should compare people in the UK pay. This blog post looks at the cost of gas in the UK and why it is so expensive."

Gregory Stokes presents Changes To Tax Credits posted at Tax Credit Calculator, saying, "The rules around tax credits are changing in April 2012. This guide looks at how the change might affect you and your finances."

Al Peters presents How You Get A National Insurance Number posted at TaxFix Feed Update, saying, "If you need to claim tax credits or benefits you will need to apply for a national insurance number. This articles explains how to apply for your NI number."

SteveR presents Tax Advice for Newly Weds posted at 2008 Taxes, saying, "The Internal Revenue Service (IRS) offers useful tips for newlyweds when it comes to filing tax returns."

Dr. Dean presents Estate Taxes: Do You Care? posted at Dr. Dean's TheMillionaireNurse.com Blog, saying, "Congress clarified some areas of the estate tax rules that could impact you. Let Dr Dean clarify the 'clarification' and the unintended consequences of the new ruling."

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: the wealth builder carnival, blog carnival.  

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

This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC

Trying a Single Contact Lens for Vision Correction

One of my disappointments with getting older was the need to wear reading glasses.   For reference, I don't need reading glasses normally.  I only need reading glasses when wearing contacts or glasses.   Without any vision correction, I can read fine since my close vision is excellent.   In 2007, I had resigned myself to a life of wearing bifocal contacts or reading glasses with regular contacts.  I chose reading glasses with regular contacts since that was the less expensive option.

Recently, my eye doctor suggested another option:  use a contact in only one eye.  Thus, the eye with the contact will have 20/20 distance vision and the uncorrected eye will have reading vision.   I thought this was an idea worth trying.   First, I had played sports without vision correction until my late twenties and thus, used  only one eye for distance vision.  Second, only using one contact will cost less and take less effort since I will only need a lens for one eye.

Today, I started the experiment with using one contact lens in the eye with the worse vision.  The main adjustment I will have is getting used to my worse vision eye having the better distance vision.   Perhaps, the adjustment will be easier since the worse vision eye is also my dominant eye.  I'll try it for a week and see how it goes.
For more on New Beginnings, check back every Sunday for a new segment.

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

Copyright © 2011 Achievement Catalyst, LLC

Book Review: The Sellout

A couple years ago, my in-laws gave me the book The Sellout: How Three Decades of Wall Street Greed and Government Mismanagement Destroyed the Global Financial System by Charles Gasparino.  The book was about the financial crisis of 2008, the main figures involved and the confluence of events and actions that created the crisis.

Although the read was a slow start, I found the book to be an interesting account of the hubris and greed of the top people in many of the financial institutions.  Although the book title refers to "government mismanagement,"  I found the focus of the book to be mostly about the rise and subsequent fall of the top individuals in the private sector.

The protagonists, Jimmy Cayne, Dick Fuld, and Stanley O'Neill, were CEOs of major financial firms, Bear Stearns, Lehman Brothers, and Merrill Lynch, respectively. They reached the top by taking risks and making tremendous amounts of money.  They were smart, aggressive and driven to large profits.   Unbeknownst at the time, they were also lucky.   Lucky to be in the right place at the right time.  

Unfortunately, the luck didn't last.  The same strategies that worked during the boom times failed miserably during the crash, bringing down these individuals, their companies, and nearly the world economy.  Their downfall was believing until almost the very end that they were invincible and incapable of failure.




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 © 2011 Achievement Catalyst, LLC