Wednesday, June 27, 2012

The Decline of Our Home Value

By my estimate, the value of our home has declined 25-30% since we purchased it in 2003.   Fortunately, we're not homeowners who borrowed against the increased equity of our home when prices peaked in 2007.   In fact, we had down payment of 40% with a plan to pay off the mortgage early, which we did in 2009.

While I am disappointed in the decline of our home value, the decline won't have much impact on our near term retirement finances since we aren't paying a mortgage nor do we expect to sell the home in the next couple years.   That should give our home sufficient time to recover to at least its original value.  

I'm hoping that housing will recover sufficiently for the home to at least double in value by the time our daughter graduates from college in 15 years.    By then, interest rates should be higher also which would potentially make an annuity an attractive option to consider.

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

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

Copyright © 2012 Achievement Catalyst, LLC

Tuesday, June 26, 2012

The Wealth Builder Carnival #82

Welcome to the eighty-second 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 on to the Carnival.


Earning


Theresa Torres presents 5 ways Real Estate Agents Can Use QR Codes to Get More Leads | The Niche Report posted at The Niche Report, saying, "QR codes can be an effective marketing strategy when used properly. If you're in the real estate business, here are 5 ways that QR codes can be incorporated in your real estate marketing strategy."


Insuring and Protecting


Brianna Baiocco presents Build and Life Insurance posted at Build and Life Insurance. Heght and Weight charts., saying, "If you are looking for a life insurance expert who can help you make a decision on what company is best for you. Give us a call we can help. (855) 417-0199."

Dr. Dean presents Dementia And Your Money posted at Dr. Dean's TheMillionaireNurse.com Blog, saying, "Does your retirement planning guard against the risk of decreased mental capacity as you age? Mental decline can happen even if you take steps to avoid it."

John presents What to Do if You Lose Your Wallet posted at Wallet Blog, saying, "Until it's gone, most of us don't even realize how much of our life we carry in our own wallet. If it goes missing, you should know what to do. If you haven't lost it, you should still know what to do."


Investing


Habeeb presents Fidelity Strategic Income Fund (FSICX) Review posted at Best Dividend Mutual Funds, saying, "Fidelity Strategic Income (FSICX) is has $9.5 billion in assets under management and yields a sporty 4.7% dividend according to Morning Star. The fund invests money in 4 major asset categories including US Government securities, emerging market bonds, high yield bonds and foreign developed market securities. About 93% of the fund is invested in bonds with NO exposure to equities."

Dividends4Life presents May 2012 Pocket Change Portfolio Performance posted at Dividend Growth Stocks, saying, "The Pocket Change Portfolio (PCP) was first introduced on September 13, 2008 as a real money dividend income portfolio funded by the "pocket change" earned from my various online endeavors. Each month I report on the portfolio's progress and update its holdings. Total dividends received during the month were $430.53, consisting of:"


Living Frugally


Jessica Bosari presents When Bigger Isn't Better-Pros and Cons of Buying In Bulk posted at SavingTools.com, saying, "Unfortunately, bulk shopping isn't always a clear-cut path to saving money, and it can often lead to expensive wastefulness."

Christine Clark presents Crush Credit Card Debt posted at Your Life in Harmony, saying, "How to reduce your daily expenses to divert extra cash towards your credit card balance. Explores the method of how to manage your credit card debt and credit score."

Katie presents How to set up a home office on the cheap posted at Money saving tips & advice from Discount Coder, saying, "Converting a spare bedroom to a home office can do absolute wonders for any young business. Productivity increases, staying organised becomes easy and it's obviously very cost effective. But the price of setting up a home office can spiral out of control. Read our top tips to find out how to keep the costs down."

Super Saver presents My New Job(s) posted at Money saving tips & advice from Discount Coder, saying, "At this point, I am still not working at any paying jobs. For now, I've decided to put focused effort on DIY home projects that have been on hold. So here are the "jobs" I am doing for my own benefit."


Saving


Greg Field presents Fine-Tune Your Finances for 2012 posted at NerdWallet Blog - Credit Card Watch, saying, "This is an article about different personal finance tips to save and plan smart with your finances"

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.

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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 © 2012 Achievement Catalyst, LLC

Monday, June 25, 2012

Retirement Strategy - Avoid Debt to Increase Lifestyle

While we were working, we only had mortgage debt for 60% of the original value of our home.  We didn't use debt to increase our lifestyle, e.g. vacations, cars, etc.   We tried hard to live below our means at about 80% of our take home pay and saved the rest.

About 18 months after retiring, we paid off our mortgage and became completely debt free.   So debt was no longer contributing to any our lifestyle including the house.  Not having any debt has been extremely helpful during retirement, especially during the Great Recession.  Our monthly expenses were reduced by 24% because we didn't have a mortgage.

My only regret is that we didn't pay off the mortgage sooner in early 2008, as my spouse wanted to do.   The stock investments sold would have been at a higher price and part of our savings would have avoided the bear market of 08/09. 

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 © 2012 Achievement Catalyst, LLC

Sunday, June 24, 2012

The Cost of Greece Exiting the Euro

The exit of Greece from the Euro will have a negative financial and economic impact according to the article What would a Greek exit mean for the U.S. economy?  Here is my take on some of the estimated impacts:


  • Private debt default -  $70,000,000,000


  • Public debt default - $460,000,000,000


  • U.S. GDP reduction  - 0.3%


  • Value of $1 - 1,000 Drachma at a minimum


  • Demonstrating again that Keynesian economics doesn't work - Priceless

  • It will be interesting watching whether Greece will eventually exit the Euro despite current claims of not wanting to do so.   I just don't see any possibility of Greece addressing its debt situation another way, despite people with much more authority than me claiming otherwise.


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

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

    Copyright © 2012 Achievement Catalyst, LLC

    Friday, June 22, 2012

    Potentially Avoiding a Retirement Crisis

    4 Ways to Avoid Your Own Retirement Crisis  reports that 56% of Boomers and GenXers (38 to 65) are saving enough to cover basic retirement costs.   Of the 44% not doing so, 20-30% are partially ready and can consider the following actions to become more ready.
    • Increase savings rate 1-2% a year.
    • Work two extra years.
    • Buy an annuity
    • Work part-time for five years.
    In our case, we increased our savings rate when we were working and have worked part-time almost 5 years since taking early retirement in 2007.   Since we were already retired, we can't work two extra years any more, but I would consider if we were still working.   Finally, we have not bought an annuity, but we are thinking about annuities for our future.

    Still, with the Great Recession, our retirement has constantly been at risk, which is the main reason I've worked part time during my retirement.    My learning is that our retirement will always be at some risk since neither of us have a pension, which makes having an annuity an attractive option.
    For more on Reaping the Rewards, check back every Friday for a new segment.


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

    Copyright © 2012 Achievement Catalyst, LLC

    Thursday, June 21, 2012

    Student Loan Institutions Need Financial Consequences

    For my parent's generation, financial institutions made finnacial decisions judiciously since bad decisions usually resulted in bad consequences.  For example, their mortgage required 20% down payment with a mortgage that was supported by my father's income.  The bank that made the loan was taking the risk.  If my parents defaulted the bank would lose the money.

    When there is no risk, financial decisions may be skewed towards higher risk choices.  For example, if I had zero risk of losing money, I would invest in highly speculative stocks for a possible big gain.

    Fast forward to the early 2005.   Mortgage loans were being collateralized and banks no longer carried the risk of default.   Mortgage brokers made loans to almost everybody because the brokers were not affected by the risk of a poor loan.  They were compensated for completing applications.  As a result, there were a number of very risk loans made resulting in a housing bubble.

    As I understand it, a similar situation exists for student loans.   All student loans are guaranteed by the government.    Student loans cannot be eliminated by bankruptcy.   The school and the lending institution carry no risk.  Thus, very risky loans are sometimes made, which is creating an education/tuition bubble.

    When institutions have zero risk when making a loan, poor lending decisions can be made.  Perhaps a solution is for student loan lenders to start assuming some or all of the risk for making student loans.

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

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

    Copyright © 2012 Achievement Catalyst, LLC

    Wednesday, June 20, 2012

    Want something? Ask for it.

    Here is one of my top learnings from my career: Ask for what I want.   The worse that can happen is the answer is "no."   The best outcome is that my request is granted.   If I don't ask, then there is no chance of getting what I want.  This was one of the key coaching tips I gave new hires in training sessions.

    This principle of asking for what I want also applies to personal finance.
  • Want a lower price?   Ask if the seller will take a stated price.   Or ask what is the seller's "best price?"  Individual sellers will usually come down in price.  Sometimes stores will also.  If not, the worst case is paying full price.


  • Want a discount?  Ask if there is a discount for cash, volume or forgoing a service that isn't needed.  Retailers will sometimes give a 2% discount for cash.  Again full prices is the worst case.


  • Want a raise?  Ask for one and provide data to support the request.   Best case is a raise. Worst case is the answer is no but it is an opportunity to start the discussion.


  • Want forgiveness of a financial penalty?  Acknowledge the mistake and request leniency, especially if it is the first time.  Best case is a partial or complete forgiveness.  Worst case is paying the full penalty.

  • Of course, asking is no guarantee of getting what is requested, but not asking is almost a 100% guarantee of not getting it.   So I always ask when I want something.

    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 © 2012 Achievement Catalyst, LLC

    Tuesday, June 19, 2012

    The Wealth Builder Carnival #81

    Welcome to the eighty-first 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 on to the Carnival.


    Earning


    Theresa Torres presents 5 Ways to Market Yourself as a Personal Fitness Trainer posted at Mueller Musings, saying, "If you're already passionate about health and fitness and you want to help others achieve the same goals, being a personal fitness trainer can be a good earning opportunity. You need to have a good marketing technique to get your business out there so here are a few tips to help you get started."

    Norbert Szabo presents How to make money by posting gigs on Fiverr. posted at Building aBusines While Having a Life, saying, "Sometimes I feel we are tend to over complicate things. Getting traffic or making money online is not as hard as many think. In this post I would like to write about fiverr which is the best way to earn money just about half an hour after you posted your first gig."


    Insuring and Protecting


    Mac Hildebrand presents Car Insurance Payment Options and How They Work posted at Car Insurance Comparison, saying "When drivers purchase a new auto insurance policy, they are inundated with a long list of payment options, both in terms of how many payments they want to make and how they want to make them. Though every insurance company is free to set parameters as they see fit, a typical scenario has the insurance company offering options including a single payment, two or three installments, or monthly installments. You can pay for your policy with cash, check, or money order, or some sort of electronic funds transfer."

    Dr. Dean presents Don’t Text These 5 People! posted at Dr. Dean's TheMillionaireNurse.com Blog, saying, "Texting is fine and can save time and money. But there are people you just don't want to text."

    John presents Forget Your ATM Card? No Biggie, As Long as You’ve Got Your Phone posted at Wallet Blog, saying, "Like the idea of using your smartphone for everything, but would rather use cash than make contactless payments that could cause you to lose track of your budget? Well, not to worry. Thanks to NCR, using your smartphone to make withdrawals at an ATM is on the horizon."


    Investing


    Dividends4Life presents 7 High Yielders With A Low Free Cash Flow Payout posted at Dividend Growth Stocks, saying, "All dividend growth stocks are not created equal. Good companies maintain their dividends during a downturn (like the one we experienced in 2008); while great companies continue to increase their dividends during a downturn. To find these great companies, you will need to focus on more than just yield. You need to consider the stock's Free Cash Flow Payout."

    Habeeb presents How to Calculate Cost of Equity on Common Stock posted at Best Dividend Mutual Funds, saying, "Cost of Equity is defined as the annualized rate of return (%) that investors must achieve on their investments in shares of companies or mutual funds. Those returns can be composed of annual dividend payments, capital appreciation in the value of the shares, special one time distributions, etc."


    Living Frugally


    Liana presents Q1 2012 Credit Card Debt Study posted at CardHub.com, saying, "The first quarter of 2012 indicates consumers are paying down credit card debt. Will this trend continue throughout the year, or will consumer credit card debt follow the same path it has in previous years? Take a look at the new data - Then decide which road you want to travel."

    TB presents New Air Conditioners Really Do Save You Money posted at Blue Collar Workman, saying, "Installing a new air conditioner (i.e., getting rid of that one from the 1980s!) will save you BUNDLES. The new a/c units that companies are building are big and they're efficient."


    Saving


    LaTisha D Styles presents How Young Adults Can Build Wealth posted at Financial Success for Young Adults, saying, "The first method to building wealth is saving money. I don’t mean save a little here and there, I mean really putting away at least ten percent of your income."


    Taxes


    Super Saver presents Taxes are Going Up - Even for the 99% posted at My Wealth Builder, saying, "I attended a financial seminar last month and the speaker stated emphatically that Federal income taxes will increase in 2013 for everyone."

    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: , .  

    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 © 2012 Achievement Catalyst, LLC

    Monday, June 18, 2012

    Taking a Break from the Stock Market Today

    With the pro-bailout party winning the Greek elections, I expect the U.S. stock market to open up today.   How long it will stay up, no one knows.  I've decided to be away from my computer most of the day to avoid watching my long short portfolio decline with the market rally.  The excitement due to the market volatility is more than I want to experience today.

    So I will be taking my daughter to her tennis lesson this morning, visiting a our favorite coin collection shop afterwards, and hopefully, taking my daughter and a friend to a park event in the afternoon.   These activities should use up most of the day and since I don't have a cell phone, I won't be able to track the market throughout the day.

    I won't check my investment results until after the market closes at 4PM.  At this point, I expect at 2-3% loss in my investments.   A loss lower than that will be a pleasant surprise.

    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 © 2012 Achievement Catalyst, LLC

    Sunday, June 17, 2012

    A Great Father's Day

    Sometimes simple things are the best.  Usually for Father's Day, the family goes out for dinner at a fancy restaurant which involves a bit of preparation and planning.  This year, we decided to just have a family day together and it was great.

    After church, we were planning to play some tennis as a family, but a thunderstorm delayed the activity.  While waiting, I worked on putting our bathroom back to normal after a room painting, which included rewiring a light that I discovered hadn't been done correctly. (More on the rewiring in a later post.)  Fortunately, the storm was a short one and we were able to play tennis for about an hour.   Then we came home for a snack and a homemade dinner.   After that, we enjoyed a short session in a hot tub.  Then, it was off to bed for our daughter.

    Overall, it was one of the best Father's Days that I have had.   Fun, enjoyable and relaxing.  I think I'll be requesting a similar itinerary next year for Father's Day.

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


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

    Copyright © 2012 Achievement Catalyst, LLC

    Saturday, June 16, 2012

    Will Greek Elections be a Preview of U.S. Elections?

    The June 17, 2012 Greek elections, if a municipal worker strike doesn't delay them, may be a preview of the November 6, 2012 U.S. elections.   The Greeks will show whether they support austerity measures, or growth  measures ( euphemism for spending beyond means measures :-).

    Why Greek People Are Voting for Leftist Syriza at CNBC.com reports that public sector workers (1/3 of the workforce) protecting their benefits and systemic avoidance of financial responsibility ( e.g. not paying electric bills or underpaying taxes) are among the reasons.   There also seems to be a general belief that there will no financial consequences for not meeting financial obligations.

    I can see some similarities with the U.S.   About 15% are public sector employees, and while there is not a systemic avoidance of financial responsibility, there has been call for forgiveness of student loan and underwater mortgage debt.  Also, the current administration believes the solution to too much government debt is more government debt. 

    The outcome of the Greek elections will be interesting, what ever the result.  Based on last week's market results, it appears any outcome will be a positive catalyst for the stock market.  So I am preparing again a market rally next week.

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

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

    Copyright © 2012 Achievement Catalyst, LLC

    Friday, June 15, 2012

    My New Job(s)

    "How did I ever have time to work?" ~ retiree observation

    No, I'm not unretiring again.   At this point, I am still not doing any paying jobs.  For now, I've decided to put focused effort on DIY home projects that have been on hold.   So here are the "jobs" I am doing for my own benefit.



  • Electrician.   There are several electrical maintenance projects that have needed my attention.  So far, I've changed out a non-working GFCI outlet, changed out three ceiling lights with deteriorating wire insulation, covered a junction box (code violation)  and installed a GFCI near a wet bar (code requirement).   I still have three more ceiling light fixtures to change (one deteriorating wire insulation, and 2 code compliance for  closets).    In addition, I want to do a complete mapping of electrical circuits in our house.

    For reference, I took a introductory electrician's course when I retired, so I have basic training.



  • Plumber.   A few heads in our sprinkler system need adjustment or replacement.  Fortunately, a commercial distributor is nearby and I can get technical advice and wholesale prices for the parts.  I may also need to repair a couple outdoor spigots since there is some some rattling, indicating a washer needs tightening. In addition, I will probably need recaulk the shower and tub in the master bath.

    I also took an introductory plumbing course when I retired.   I am confident at most everything, except soldering copper pipe.



  • Appliance Repair.  During  May, I was fighting leaks in a dishwasher.   After a couple experiments, I determined the issue was the tub gasket.   I ordered the part from a online parts distributor, replaced it in 15 minutes and solved the problems.    



  • Mason.   Some of the bricks bordering our walkway and patio have loose or broken mortar and require remortaring.   This will be a several day job.

    I also took a introductory masonry course when I retired.  I wouldn't build something from scratch, but feel very confident repairing existing brickwork.



  • Tiler.  One entryway has a slate tile floor and the grout has been breaking apart.  I've repaired this before and will try again to make it more permanent.   I have no formal training in this area, but have tiled a bathroom before durng a remodel.



  • Painter.   My spouse would like to update the colors in some of the rooms.  I'm not a particularly good painter, but will be helping out in this area.   Also, some of the outdoor wood surfaces and window sills need some repainting.   Again no formal training, and it shows :-)



  • Pruner.   As are trees age and grow larger,  branches need to be cut back and the tree needs to be shaped.  I can had the smaller ornamental trees and trees under twenty feet in height.  However, I will need hire professional to prune the larger trees.

    I took a landscaping course after retiring and have basic training in maintenance and design.   I have more confidence in my maintenance capabilities.


  • These jobs will definitely keep me busy all of the summer and part way into the fall.  I don't think I will have any time to work at a paying job for quite a while.  I'll check back in September to seem how many really get done:-)


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

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

    Copyright © 2012 Achievement Catalyst, LLC

    Wednesday, June 13, 2012

    Cavalcade of Risk #159 - Early Edition

    Welcome to the 159th edition of the Cavalcade of Risk.   This will be My Wealth Builder's ninth time hosting this esteemed Carnival.  Cav editions that were previously hosted by My Wealth Builder include #150 Sesquicentennial Edition, #107, #103 Risk Management with the Stars Edition, #94 Alert Level Edition, #76, #64, #38 and #19 Valentine's Day Edition.

    As the name indicates, this Carnival is about risk - e.g. insurance, health, financial, and other types. Thank you to all bloggers who submitted a post to this Cavalcade. I enjoyed reading each one. While every post was a great article, I selected only those primarily related to risk.

    Here are the articles of the 159th edition of the Cavalcade of Risk:

    Is it better to risk the loss or buy some insurance?  FMF presents Insurance You Need and Don't Need posted at Free Money Finance, saying, "The Wall Street Journal lists insurance you don't need, some you might consider, and policies you must have. The list begins with the types of insurance you can skip."

    Sometimes it may be better to accept the risk of loss.  Teacher Man offers his opinion on Is the Extended Warranty Worth It? at My University Money, saying, "What you are being sold using catchy terms like “layers of protection” is an extended warranty. These products differ widely in what they cover, but the basic idea is that for a yearly fee, the place where you are buying the product will fix your purchase if it breaks or malfunctions. As with most financial products, the devil in the details, but the vast majority of the time, you should politely decline the offer."

    Here's a profession where insurance may be very important.  What if your daily commute to get to your workspace entailed climbing 1500 foot towers – sounds like something you might want to be trained for, right? At Workers’ Comp Insider , Julie Ferguson talks about the risks involved in working for the fast-growth, high pressure cell tower industry in The high price for fast phones: Cell tower deaths

    But what about when you can't get insurance you need and want? Jeff Rose presents Declined Life Insurance - Now What? posted at Life Insurance By Jeff, saying "Have you thought that you were super fit and that you would get approved instantly only to have a curve ball thrown at you to realize either something came back on your medical exam or you found out that you’re uninsurable? If this is the case I want to give you a few tips on how you can get approve for life insurance even if you’ve been declined."

    Even when there is insurance, getting back to normal is a challenge. In Getting Your Life Back in Order After a Fire Or Other Disaster Roger at The Amateur Financier learns that having insurance is only one part of recovering from a disaster.  He offers  a guide to how you can recover from (and prepare for) fires or other disasters, minimizing the trouble that they cause in your life."

    Surprise, health care insurance costs are going up. Jason Shafrin presents Healthcare Costs to Rise by over 7 percent in 2013 posted at Healthcare Economist, saying "The Healthcare Economist reviews the latest trends in health insurance premiums."

    Here is one government solution to reduce health care costs. Louise presents Colorado Governor Committed To Improving the Health of Colorado Residents posted at Colorado Health Insurance Insider, saying " "Hickenlooper addressed an international conference of wellness experts yesterday in Aspen, and said that although he has concerns about the downsides of becoming a “nanny state”, he believes we need to take some significant measures in order to improve the overall health of the Colorado population – if for no other reason than the significant economic impact of poor health and obesity. Even though Colorado is still the leanest state in the US, the percentage of obese adults has been steadily increasing over the past two decades, and it climbed above 20% last year for the first time."

    Perhaps, this is another government solution :-). Henry Stern, LUTCF, CBC presents Helmets? We don't need no steenkin' helmets! posted at InsureBlog, saying "Motorcycle riding is inherently risky to begin with, but what about going bare-headed? InsureBlog has the latest on a new Michigan law that seems to encourage that."

    This concludes this edition of the Cavalcade of Risk.  The 160th edition will be hosted by Jay Norris at Colorado Health Insurance Insider.

    For more on The Practice of Personal Finance, check back every Wednesday for a new segment.
    This is not financial or risk management advice. Please consult a professional advisor.

    Copyright © 2012 Achievement Catalyst, LLC

    Tuesday, June 12, 2012

    The Wealth Builder Carnival #80

    Welcome to the eightieth 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.  Blog Carnival has had technical issues recently, which may have reduced the number of submissions for this week.

    And now on to the Carnival:


    Earning


    Jon Rhodes presents Article Marketing Vs Guest Blogging posted at Affiliate Help!, saying, "This article looks at which is the better option for online self promotion, article marketing or guest blogging."

    Theresa Torres presents E-Networking Your Way to a New Job posted at JobseekersAdvice.com, saying, "More and more job seekers are using social networking to help them find a job. They've realized that having connections boost their chances of landing a job, and if you're on the lookout yourself, here are some tips on how you can use networking effectively."


    Investing


    Super Saver presents Resisting the Urge to Buy Beaten Down Stocks posted at My Wealth Buidler, saying, "Usually, by this time of a market correction, I am buying stocks which have had significant corrections. For the past month, I've been resisting my normal practice of buying beaten down stocks."


    Living Frugally


    Laura Edgar presents Saving You from Yourself: A Professor's Tips for Lifelong Financial Fitness posted at NerdWallet Blog - Credit Card Watch, saying, "We spoke with Vassar economics professor Benjamin Ho about financial decisions and human frailty on a personal and policy level."


    Taxes


    Edward Webber presents How Much Tax Should You Pay in 2012 posted at Tax Rebate Blog, saying, "The amount of tax that you pay depends on how much you earn during the tax year. This article will help to explain how much tax you should be paying in 2012."

    Danielle Dixie presents How To Claim Child Tax Credits posted at Tax Credits, saying, "If you have at least one child you may be eligible to claim child tax credits. This article provides details on how to claim."

    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: , .  

    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 © 2012 Achievement Catalyst, LLC

    Monday, June 11, 2012

    Not Claiming "Victory" Yet

    "The solution to too much debt is not more debt." ~ Jim Rogers in a CNBC interview

    Today's market decline was a complete surprise to me.  In my post I Don't Understand, I was dismayed that
    • Success is not used as a model.
    • Government is seen as all knowing.
    • All news is good news.
    I fully expected the announced bailout of Spain to lead to a market rally since it met all three elements that I didn't understand. Therefore, I expect my long short portfolio to decline due to short position rallying higher than my long positions.  However, I was pleasantly surprised when the market reversed and my short position declines gave the portfolio one of its best gain days in the month I have been doing it.

    Maybe, the market has figured out that more debt doesn't solve too much debt, that government is clueless on strengthening the economy, and that bad news is really bad news.   But I realized that one day does make a trend.  Also, I expect a bounce on Tuesday, so I will wait a couple weeks before claiming victory on predicting a market decline due to the EU crisis.

    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 © 2012 Achievement Catalyst, LLC

    Sunday, June 10, 2012

    Big Rally for Tomorrow ... or Not?

     With the a proposed bailout of Spanish banks, it appears a rally is likely this week.   As a result, my short positions will rally and create a loss in my portfolio.  That is what I expect.  After all, Asia is already up tonight on the Spanish bank deal and better than expect Chinese economic data.

    So I am bracing myself for a strong rally on Thursday.  The only element in my favor is that my record of calling the next day's market performance has been about 50/50 :-)

    For more on New Beginnings, check back every Sunday for a new segment.
    This is not financial pr investing advice. Please consult a professional advisor.

    Copyright © 2012 Achievement Catalyst, LLC

    Friday, June 08, 2012

    Looking for Good Dividend Paying Stocks

    Here's a list of dividend paying stocks that I'm using as one of my references for choosing stocks when I make purchases.  Of course, it's still important to do due diligience since a high(er) dividend doesn't necessarily mean the company's stock will do well (e.g. Pitney Bowes).  Also, there is additional risk should the interest rate rise suddenly.

    However, depending on the time period, dividends have accounted for 40-50% of the total long term return of the stock market.  So it makes sense to me to have a diversified portfolio of good dividend paying stocks as part of our retirement investments.

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

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

    Copyright © 2012 Achievement Catalyst, LLC

    Thursday, June 07, 2012

    Student Loans are a Greater Burden

    A Generation Hobbled by the Soaring Cost of College published at CNBC.com highlights the difficult situation caused by high education debt.  As students incur tens of thousands of education, repayments can be be in the range of $500 to $1000 a month.  Unfortunately, students often don't become aware of the loan payment amount until after graduation.   Such a payment can be a significant percentage, if not all, of the monthly discretionary income, requiring the borrower to get a second or third job.

    When I attended college over 30 years ago, my total student loan debt was less than 40% of the annual salary of my first job as an engineer.  The payments seemed very manageable.  While paying off my student loan, I was still able to buy a new car and purchase my first house.   Doing so today would be much more difficult.

    For our daughter, paying the cost of higher eduction will be even a greater challenge.  A CNBC article projects the annual cost education will be $130,428 for private schools and $41,228 for a state university in 18 years (2030).  In an earlier post , I estimated our daughter would need about $90,000 a year for college at a private school based on a 5% growth rate

    We'll need to see what college tuition is when our daughter is closer to 18.    Options that minimize the amount of student loan debt will definitely be considered.

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

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

    Copyright © 2012 Achievement Catalyst, LLC

    Tuesday, June 05, 2012

    The Wealth Builder Carnival #79

    Welcome to the seventy-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.  Blog Carnival is having technical issues again, which may have reduced the number of submissions for this week.

    And now on to the Carnival:


    Earning


    Jon Rhodes presents How To Build Trust Online posted at Affiliate Help!, saying, "This post shows the importance of building trust online if you wish to make money. It also suggests many ways of helping you achieve this."

    Dr. Dean presents Innovative Ideas posted at Dr. Dean's TheMillionaireNurse.com Blog, saying, "Are you looking for new ideas to increase your income? Do you want to learn how to look for ideas in a new way? This is an innovative way to expand your search for creativity."


    Insuring and Protecting


    Liana presents Study: Chip-and-PIN is Broken posted at CardHub.com, saying, "Europe has embraced it. We hear about the probability of the U.S. fully adopting it. So, what aren't they telling us about Chip-and-Pin technology? Don't be fooled that EMV is "fraud proof.""

    John presents Get Screwed During Foreclosure? Time is Running Out to Get Even posted at Wallet Blog, saying, "You bought your house. You lost your house. But, was the foreclosure valid? The Fed is requiring reviews, but time is running out if you're seeking recourse!"


    Investing


    Dividends4Life presents Intel Corporation (INTC) Dividend Stock Analysis posted at Dividend Growth Stocks, saying, "Intel Corporation is the world's largest manufacturer of microprocessors, the central processing units of PCs, and also produces other semiconductor products. Linked here is a detailed analysis and commentary."


    Living Frugally


    Theresa Torres presents Four Ways To Save Money While On A Weekend Getaway posted at Frugal Quack, saying, "Who says you can't have fun in these tough economic times? You can still have a great time with your family by being a wise consumer. Here are several ways you can stay within your budget while on a weekend getaway."


    Retirement


    Super Saver presents Thinking About Annuities posted at My Wealth Builder, saying, "Lately, I've been thinking that annuities do have a place in our wealth building plans: longevity insurance."


    Saving


    Jason P. presents What are Your Biggest Obstacles to Saving Money? posted at One Money Design, saying, "Our biggest obstacle to saving money is spending money on all those things we think we need, but we avoid this by having a budget and making saving a high priority."

    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: , .  

    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 © 2012 Achievement Catalyst, LLC

    Links to Carnivals from May 29, 2012 to June 4, 2012

    Here are the links to the Carnivals in which My Wealth Builder participated from May 29 - June 4, 2012:

    The Wealth Builder Carnival #78

    Baby Boomers Blog Carnival #142

    Carnival of Financial Planning #239

    Tax Carnival #103

    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 © 2012 Achievement Catalyst, LLC

    Monday, June 04, 2012

    Resisting the Urge to Buy Beaten Down Stocks

    Usually, by this time of a market correction, I am buying stocks which have had significant corrections.  For the past month, I've been resisting my normal practice of buying beaten down stocks.   The main reason is because I started using an approach which I call a long short portfolio, which requires the purchase of stocks of strong companies combined with shorting stocks of week companies.  The portfolio doesn't allow for purchasing beaten down stocks.

    However, I am making a list of stocks to consider when I do start buying beaten down stocks.   So far my list include CLF, RGC, PBI, STX, and RRD.  These stocks are paying dividends in the range of 4-11%, which by itself makes these stocks attractive in the current low interest rate environment.  I still haven't purchased any of these stocks. 

    Should the market decline another 5-10%, I will start purchasing small positions in some beaten stocks since these types of stocks tend to do well in sharp upward market rallies.

    Disclosure:  At time of publication,  I have no positions in CLF, RGC, PBI, STX and RRD.
    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 © 2012 Achievement Catalyst, LLC

    Sunday, June 03, 2012

    Starting to Look Ugly for Stock Markets

    Yesterday, I posted that I thought there would be a relief rally and being overweight long positions would be beneficial.  Now I'm not so sure.  (Not that it matters much since I only have a 50/50 record of predicting the next day's market direction :-)   Here are my observations supporting a continued stock market decline:


  • More inexperienced people in power.    With the election of a new French President and the potential election of a Greek anti austerity party, there will be more people with no experience in solving economic issues in power.  I recall the mistakes Ben Bernanke made in 2006 when he dismissed the issues of risky mortgages. 


  • More negative news.    Jobs growth has stalled.  Earning estimates are declining. All assets are becoming more correlated.  Bond interest rates are going to record lows. More pundits are now acknowledging the likelihood of a EU negative event along with a potential U.S. recession.   


  • Fear but not enough yet.  My spouse has adamantly refused to invest any more of her retirement account funds in stocks.  (For reference, she is a buy and hold advocate.)  However, she has not decided to sell out of stocks in her College 529 account yet.  Also, I've decided to stop purchasing long positions as the market declines this week.


  • So tonight, I have identified 10 stocks to short this week.   I would prefer to initiate new short positions when the market bounces.  However, I will probably establish some new short positions even if the market declines.

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

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

    Copyright © 2012 Achievement Catalyst, LLC

    Saturday, June 02, 2012

    Reflecting on the Long Short Portfolio

    In our long short portfolio, I decided to overweight the long positions last week.   I did so because I expect a market bounce next week.  So having a higher percentage of long stocks should be beneficial.  However, I have at best a 50/50 track record for predicting daily market movements.  So being slightly long may be a negative.

    Overall, I'm still getting good results from the long short portfolio.  The portfolio was down about 0.8% while the market was down 3.0%.  The results were helped mainly by the short positions which were up 3.6% for the week.   By hedging with short positions, I feel better about purchasing some long term positions since the short position will help mitigate the declines in the long positions.

    Next week will be interesting since the market may have a short term relief rally if the Fed offers QE3 as possible action.  

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

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

    Copyright © 2012 Achievement Catalyst, LLC

    Friday, June 01, 2012

    Longing for Higher Interest Rates

    Over the next year, the last of our 4-5% CDs will mature.   Unfortunately, the rates for new CDs are much lower, at less than 1% for less than 2 years and about 1.7% for 5 years.   Not very attractive interest rates.   While low interest rates are "helping" the economy, the same low interest rates have a negative effect on retiree income.

    For example, at a 5% return (which was available in 07/08), $1 million will yield $50,000 in annual income.   Nowadays, the same $1 million will yield between $2,000 and $17,000 annually for a one and five year CD, respectively.  Quite a big difference for those that depend on fixed income investments.

    CD rates have become so low that I don't even seriously consider investing in a new one as our existing CDs mature.  I just leave the money in an .05% money market account.    I figure that is a better short term place for our cash, rather than locking up the funds in a 2 year CD for less than 1% .

    However, for now, it appears the Fed policy will keep interest rates low through 2014.    Maybe at that time, we'll start seeing 5% interest rates again.

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

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

    Copyright © 2012 Achievement Catalyst, LLC