The Wealth Builder Carnival #124

Welcome to the one hundred twenty-fourth 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

Bryan presents Questions To Ask In An Interview posted at Gajizmo, saying, "Answering your interviewer's questions well is obviously the most important part of an interview, but few job applicants realize the immense significance of asking the right questions back to your interviewer at the end. This article highlights a number of good questions to ask in an interview that will help you strengthen your relationship with the hiring manager and ensure you ace the complete process."

Investing

Dividends4Life presents 8 Dividend Stocks Growing Future Yield posted at Dividend Growth Stocks, saying, "Yield does not come without a price, usually in the form of added risk and/or complexity. Ultimately, dividend growth investors realize that long-term and sustainable high-yield investments are grown over time. This is accomplished by purchasing high-quality dividend investments with a reasonable yield and a long history of growing their dividends, and waiting for the yield on cost to grow..."

John Schmoll presents Online Brokerages I Use: OptionsHouse Review posted at Frugal Rules, saying, "There are many online brokerages to use as you look to invest in the stock market. The good ones are there to meet your needs and help make sure you’re doing what you can to be investing for things like retirement."

Living Frugally

Super Saver presents Prepared for a Significant Correction posted at My Wealth Builder, saying, "Although our stock investments are up, I realize a significant market decline can take away all the gains, and them some."

Retiring

Jason Hull presents The Case Against Self-Directed IRA Investments posted at Hull Financial Planning, saying, "If I would have put my startup in a self-directed IRA, I would have been account rich and spending cash poor after I sold it. Here's what to incorporate into a decision to put an alternative investment in a self-directed IRA."

Taxes

James Powell presents Tax Credits and Benefits Changes 2013 – How They Will Affect You : Tax Credits posted at Tax Credits, saying, "This post will look at how the changes in tax credits will affect you in 2013."



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 © 2013 Achievement Catalyst, LLC

Long Term Umemployment Is a Major Resume Negative

The Terrifying Reality of Long-Term Unemployment shows the data from an experiment in which researchers sent out virtually the same resume, with the only exception the time of being unemployed.  The results show that being unemployed over six months essentially eliminates any interest by the employer, even if the candidate had relevant experience. In fact, a candidate with no relevant experience but with less that six months unemployment was much more likely to receive employer interest than a candidate with relevant experience and over six months unemployment.

Here are my conclusions. First, any job is better than no job, in the view of potential employer.  Second, long term unemployment compensation programs may have caused issues for workers that chose to stay on unemployment rather than taking lower paid.

My lesson learned:  To be employable, stay employed, even if the job is in a different or lower paying field.

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

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

Copyright © 2013 Achievement Catalyst, LLC

All ETF Strategy for Two Retirement Accounts

In Using an ETF Portfolio, I wrote that I was considering using no commission ETFs to build a diversified portfolio in one of my retirement accounts.  I've now decided to proceed with two retirement accounts.  Here are my reasons:

Simple strategy.   I can create a diversified portfolio with as little as four ETFs, at specified percentages with periodic rebalancing.  Thus, anyone can manage and rebalance the portfolio, and a professional is not needed to manage the account.

Cost effective.  With no commission costs and low expense ratios, the ETFs are an inexpensive way to have diversified investments.  In addition, it is also cost effective to buy on dips to dollar cost average the basis lower.

Less effort. Trading stocks is effort intensive, requiring screening and evaluating numerous stocks to find a select few to trade.  This is a constant on-going process.  By investing in ETFs, I focus on a few indicators or rebalancing to determine when to increase or reduce exposure in equities.

For now, I will start the all ETF portfolio with the next market correction.


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

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

Copyright © 2013 Achievement Catalyst, LLC

A Wild Week

The past week was an exciting one for our finances.   My company stock advanced an all time high just before the earnings announcement and the dropped over 7% when the results were disappointing. So I've spent a large amount of time monitoring the stock price.  Fortunately, I took the opportunity to exercise stock options and sell company stock near the all time highs, locking in gains and profits before the stock dropped.

Of course, the drop in stock price has been a negative financially.  Surprisingly, I am somewhat relieved the stock prices has pulled back.  The stock price was getting uncomfortably high based on the company situation.  It had become just about priced for perfection, which usually means a near term major disappointment will happen.  I would have been really worried if the stock price had advanced another 3-5% right after the announcement of Q1 results. Although the results were disappointing, I think the stock will be able to recover from it.

Hopefully, the stock won't decline too much further and will settle back into a stable price range for now.  That way, I won't need to be making frequent decisions on selling stock or exercising options, due to concerns of a market pullback.

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 © 2013 Achievement Catalyst, LLC

Early Retirement Readiness Checklist

Six Signs That You Are Ready to Retire Early had a list to evaluate whether one should consider early retirement.  I did the evaluation based on my situation in 2007, when I took early retirement.

You are emotionally ready to quit working. Yes, I was ready to stop working at my job.  However, I did test several jobs while I retired to determine if starting a second career would be of interest.  After five years of testing, the answered turned out to be "no."

You followed a retirement budget for 6 months. Yes, we lived below our means while working.  So our expense after retiring were the same as the expenses before retiring.

You have reliable health insurance coverage.  Yes, my company provided me the same insurance coverage, although at a higher price.  

Your children are financially independent.  No, our three year old hadn't quite achieved financial independence.

Your debts are paid off or nearly paid off.  Yes, our only debt was our home mortgage.  My spouse was right that we should have sold our stock investments and paid off the mortgage in 2008.  However, I was greedy and stayed invested until after the market crashed.   We did sell our stocks to pay off the mortgage in May 2009.

Your portfolio is big enough to withstand losses.  Yes, in hindsight.  Our portfolio declined over 40% from October 2007 to March 2009.   There were times I thought our early retirement might fail.  I even took on some part time jobs to reduce our withdrawal rate.   However, thanks to the Fed QE programs, our portfolio has recovered, at least for now.

Five out of six is pretty good.  I guess we should have started having our daughter work when she was two, in order to get six out of six :-)

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 © 2013 Achievement Catalyst, LLC

Hot Air Popcorn Popper

In college, my roommates gave me hot air popcorn maker for my 21st birthday.   I enjoyed many batches of popcorn.  Back then, I used the butter melter on the popper to add more flavor to popcorn. The appliance lasted about 10 years before it stopped  working.

Over 30 years later, I am on an meat free, oil free, and nut free diet. So oil popped or butter popcorn is not a part of my diet. We tried oil free microwave popcorn, but it was expensive and require maintaining additional pantry inventory. So my spouse bought a hot air popcorn maker for me. It's great.  It's easy and fast to use. We can pop regular popcorn.  Best of all, there's no mess to clean up.   

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

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

Copyright © 2013 Achievement Catalyst, LLC

Choosing Pay As I Go Options

I am always tempted to purchase a membership over just making a one time payment when attending museums, zoos, pools, gyms or similar venues. It always seem that the membership will payout in relatively few visits.  In the past, I have purchased the membership because of the perceived savings.   However, I've learned that for the majority of memberships, I would have been better off financially to just pay when we decide to attend since the total cost of my visits often don't exceed the membership cost.

So for now, I'm no longer purchasing memberships for any activity.  (My spouse will keep one membership to a local nature preserve.)   Although each time will feel like I'm missing a deal when attend a venue, I will know that paying for an admission each time will be a savings over purchasing an annual membership.

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 © 2013 Achievement Catalyst, LLC

The Wealth Builder Carnival #123

Welcome to the one hundred twenty-third 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

Super Saver presents The Value of a College Degree posted at My Wealth Builder, saying, "An ad for a cashier position at McDonald's has a bachelor's degree as one of the requirements."

Investing

Dividends4Life presents 5 Dividend Stocks Acting Like a Money Machine posted at Dividend Growth Stocks, saying, "Readers of this space know that the primary focus of my income portfolio is to create ever-increasing income money machine by investing in dividend growth stocks. This means that often I will choose a lower yielding security with better dividend growth prospects over a higher yielding security. As one that values diversity, I also invest in some high yield securities. However, any dividend stock that I invest in must have an increasing dividend..."

Saving

John Schmoll presents How Being Cheap VS. Frugal Can Hurt Your Mortgage Freedom Goal posted at Frugal Rules, saying, "Mortgages have been pervasive in our society for years and having one is often thought of as a rite of passage for many. Make sure you do your homework before signing your mortgage paperwork so you can save as much money as possible."


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 © 2013 Achievement Catalyst, LLC

Strategies for Positions in my Company Stock

My company stock has advanced about 15% since the last earnings announcement.   The company will announce Q1 2013 results this week.  I'm prepared for a potential run up this week, and making a small hedge against a decline after the earnings announcement.

Here are the actions I have taken:

Placed limit exercise orders for stock options.   I have placed several limit exercise orders just 2-8% above the current price.  That way, I will sell of a portion of my remaining 2014 stock options if the stock price advances significantly.

Sold out of the money covered calls.  I have sold two covered calls at strike price above the current price.  If the stock advances significantly, I will receive a higher price for my shares.  If the stock declines, I will keep the premium for selling the options.

If the stock advances over 12%, I will consider purchasing LEAP put options to protect against a significant decline.   If the stock falls after earnings, I will leave the limit exercise orders for the stock options in place and wait until the end of Q3 2013 before modifying them.

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 © 2013 Achievement Catalyst, LLC

Still Losing Weight

I've been on the Ornish reversing heart disease diet for about four months. To me, another name for this diet might be the "eat more diet." Since starting this diet, I've lost about 18% of my weight while consistently eating enough to feel full. In fact, I'm consciously trying to eat greater amounts and more often to stop the weight decline (or even to start gaining weight) since I'm within a few pounds of the bottom weight range for my height.

Otherwise the diet has been fine. I feel good and hopefully it is helping reduce the plaque buildup in my heart arteries. For now, I plan to continue with the diet. I've already consulted with a dietitian on which foods will help increase my calorie intake. If my weight keeps dropping, I will followup with my doctor.

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 © 2013 Achievement Catalyst, LLC

Too Good to be Sustainable

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

Despite the decline in the market last week, my company stock continue to rise, making a new all time high.   Our financial situation is very dependent on my company stock and is highly correlated with the stock's performance.  My company stock and stock options account for about 33% of our retirement and savings accounts, but account for over 90% of the gain in the accounts, since we are mostly invested in cash and cash equivalents.

I have no confidence the gains in my company stock are sustainable.  From 2010 to mid 2012, the stock trade in a relatively narrow range that was 10-20% below its 2007 high.   Then suddenly it broke to the upside and is now up 33% from the 2012 low, with most of the gains coming in 2013.  The last time my company stock advanced this fast was in the late 90s, and that was followed by the dotcom stock market crash.

With the company reporting earnings next week, I expect the stock to continue advancing until the announcement.  If the stock price continues to rise, I will definitely have to consider selling more positions, despite the major tax disincentives of doing so.

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 © 2013 Achievement Catalyst, LLC

Prepared for a Signficant Correction

I was not prepared for the magnitude of the 2008 - 2009 stock market decline.  I had significant amounts invested in equities, still owned significant amounts of company stock and was projecting 7% annual growth in our investments assets.   It would be an understatement to say I was shocked by the ensuing 40% drop in our investment assets during the 08/09 market decline.   My early retirement was suddenly at risk for failing as our financial capability to continue retirement was not certain.

At that point, we hunkered down and made some significant changes:

Reduced living expenses significantly.  We paid off our mortgage which reduced expenses by 24%.  In addition, we cut back in other areas to reduce costs.  We have continued to follow frugal living principles.

Increased cash and cash equivalents to 3-5 years living expenses.   We consciously created an "emergency fund" equal to 3-5 years of our living expenses.  The fund can currently cover over 5 years. 

Reduced withdrawal rate.  Through part time jobs, I was able to cover 20-40% of our living expenses from 2008 to 2011.  This helped preserve the funds in our retirement and savings accounts.

Reduced exposure to company stock.  Our largest exposure to risk was my company stock.  Over the past 5 years, we reduced my company stock exposure by about a third.   At this time, my company stock is still the largest and higher risk exposure area.  Our plan is reduce our exposure another third, or about half of the remaining exposure over the next four years.

Now we are better prepared for a major correction. Although a significant market decline will still be painful, the actions will help us maintain our current standard of living while waiting for the market to recover.

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 © 2013 Achievement Catalyst, LLC

Parents, Children and Money

The tough conversations to have with children:  sex, drug and money.   According to a survey, parents are also bad at talking to their children about money.  There are two reasons for the issue:

Parents are not very good with managing financial issues.  For example the survey showed, a large percentage of parents were not doing the tasks important for a secure financial future: saving regularly for retirement, having life insurance, creating an emergency savings account, having a will.

Parents focus on short term versus long term finances.  For example, parents are more likely to save for vacation (46%) than for college (41%) and less than two thirds talk to their children about a college education will be funded.

Unfortunately, according to the survey, virtually all children (97%) say they learn their money habits from their parents.

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 © 2013 Achievement Catalyst, LLC

Monetary Policy Recreating Unsustainable Wealth

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

The Fed has done what it intended to do.  Using easy monetary policy, the Fed is reflated the value of the stock market.   In the past week, major stock market indices have reached new all time highs, rebounding over 100% from the 2009 lows.   The easy monetary policy is also starting to lead to easier money for mortgages easier money for mortgages according to The New York Times.

Several bloggers I read note that their retirement and investment accounts have increased significantly in the past year.  Several fellow retirees from my company have shared that their accounts are back at 2007 values or higher.

However, no one has exhibited what I would call bullish exuberance.  Everyone seem to be cautious and aware the economy and stock market are only one event away from a significant decline, which could erase much of the gains since the 2009 bottom.  That event could be as simple as the unwinding of the Fed's easy monetary policy.

Over the past year, our wealth has increased 23.8%, with a little over half (12.5%) occurring the first 3 months of 2013.   To me, this rate of gain is unsustainable, despite the effects easy monetary policy has yielded so far.  
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 © 2013 Achievement Catalyst, LLC

The Wealth Builder Carnival #122

Welcome to the one hundred twenty-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

Bryan presents Best Paying Jobs For Women posted at Gajizmo, saying, "Gender inequality is still an issue in America, but there are still certain careers that minimize the compensation gap and offer men and women relatively the same advancement. Healthcare continues to dominate the list of best paying industries for women, but what other jobs offer the highest pay?"

Investing

Dividends4Life presents 6 Stocks Building Wealth Through Higher Dividends posted at Dividend Growth Stocks, saying, "To ensure a retirement that is free from financial concerns, there are certain things that must be done today. The stock market does not travel in a straight line. There will be times it will behave irrationally. These are the times that try an investors’ patience. Those with clear goals and confidence in their chosen strategy aren't phased by these market movements. Building a secure future by investing in quality dividend growth stocks is neither complicated nor overly burdensome...."

Vytas presents Fortunes are made when trends change posted at Trend, saying, "Markets present a lot of opportunities for short term, intermediate term and long term traders when specific market conditions appear for those who use appropriate trading system for specific market conditions. It is of uttermost importance for those who monitor market swings and trends to capture a change in the trend at the very inception of it, enter position or line of positions and then take a good bite off the move which follows."

John Schmoll presents Online Brokerages I Use: Scottrade Review posted at Frugal Rules, saying, "There are many outlets for your choosing if you want to invest in the stock market. They all have their features that set them apart. Find the one that fits your needs for overall investing as well as investing for your retirement needs."

Living Frugally

Jamie presents Why Cash Is King Everytime posted at www.jamiesmoneyadvice.com Blog Feed, saying, "Many people are having a love affair with debt. As we can see with the current debt crisis, increasing debt without discipline has consequences. This article explains why cash is still and always will be king and how you can use this knowledge to buy assets at discounted prices and save thousands."

Retiring

Mr.CBB presents Life, Money and Retirement~Skype Doesn’t Reach Heaven posted at Canadian Budget Binder, saying, "Sometimes we need to ask ourselves why we work so hard for all the money we make and whether we are spending our time wisely. Pouring your life into one basket risks leaving behind potential memories that you might not be able to go back and get. Take time to evaluate your life, your priorities and your future."

Saving

Jason Hull presents Is SAFEMIN Safe Enough? posted at Hull Financial Planning, saying, "Dr. Wade Pfau, CFA, and other academics have determined a safe minimum savings/investment rate so that if you save that much every year for 30 years, you should be able to retire for 30 years without running out of money. What's that number, and is it right?"


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 © 2013 Achievement Catalyst, LLC

Material Stocks: Bottomed or Falling Knife?

China Q1 GDP Growth Eases to 7.7% Year-on-Year China Q1 GDP Growth Eases to 7.7% Year-on-Year is not good news for material stocks, which have risen and fallen with the China economy.   Many material stocks are at 52 week lows and have been declining since 2011.  Gold has just fallen into bear market territory for first time in 12 years.

Is it time to buy material stocks?  Probably not.

At this point, I expect that I will be able to buy at a lower price in the future.   First, the China (and global) economy is slowing.  Second, there will be a market correction soon.  Third, there will be rotation out of commodities as they continue to fall.

However, since a bottom never is announced, I will trickle in a small amount of funds during the decline.   So, I will take some losses buying on the way down, but I will limit the losses by limiting the funds that are invested.  When the market turns, I will then sell the lowest cost basis purchases into the rally.

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

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

Copyright © 2013 Achievement Catalyst, LLC

5-1/2 Years Later: A Different Perspective

In October 2007, the month I retired,  the stock market was at an all time high.  My company stock was at an all time high.  The estimated value of our  house was at an all time high.  The projections going forward were very positive: everything would be at least 20-30% higher in valuation in a few years.  For me, the financial decision to retire appeared very simple: just do it.   So I took early retirement.  I didn't think there was any way my retirement was at risk.

Then came the 08-09 recession, which was a humbling experience.  Our retirement and savings accounts lost over 40% of their value.   A successful retirement was no longer a sure thing.  We started to hunker down, paid off our mortgage and significantly reduced our living expenses.  I even took some part time jobs to reduce our withdrawal rate from savings.

Now, in April 2013, the stock market has achieved a new all time high.  My company stock has just passed its October 2007 high.   One difference is the value of our house is still below our 2003 purchase price.  The other major difference is that I have much less confidence in the economy and the stock market.  So instead of putting significant additional funds into the stock market, I continue to be cautious and net selling into the rally.

If my caution is misplaced, I will miss out on some gains.  However, if my negative perspective is correct, I will reduce my losses since I have reduced our exposure to equities.

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

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

Copyright © 2013 Achievement Catalyst, LLC

Just Two More Days

I'm retiring from my first post retirement job that I starting working at 5 years ago. I haven't told the company officially, other than in a (theoretically) anonymous survey.    All of my office colleagues know this will be my last year.   Most of my clients also know.

I suspect the company won't care if I return or not.   My colleagues are not surprised, and are used to turnover.  The response from my clients have been most satisfying.

Most of my clients are disappointed that I am not returning.  Some have asked if they can come to me privately.   I've told them I am also leaving the business, but if I weren't my employment contract prevents me from working current clients for at least one year.  One client gave me a hug.  And one new client told me that received more useful advice in their only session with me than all the years they had with their previous provider.

The part of the job I will miss most is working with clients to help them to maximize their situation.  And I will miss seeing clients and  getting the brief annual update of their lives.  

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 © 2013 Achievement Catalyst, LLC

Testing Out Fitness Clubs

For my health situation, I need to do at least 30 minutes of cardio exercise 6 days a week. I am limited to exercising in temperatures above the 20s, which reduces outdoor opportunities in the winter. So I have been trying out some of the local (within a couple miles) fitness centers. Most of the places offer a free trial membership ranging from 5 days to a month and I have been taking advantage of the offers.

There are three clubs within a two mile radius of my house.  My company fitness center is a little over three miles away.
Here is my assessement in the order tried:

Club #1. This is a facility at the company from which I retired.  It is the farthest away.  I didn't use it since I had previously belonged to it.   Members are mostly employees are retirees.  Free classes.  Only open during weekdays.  Cost $22/month.

Club #2.  Closest.  Right by our usual grocery store. Younger clientele.  Free classes offered.  Pool.  Cost is $360/year.

Club #3.   Next closest.  Family clientele.  Greatest number of free offerings, including tennis at additional court rental cost.  Pool.     Cost is an initiation fee plus $100-$250 per month depending on single or family membership.  Can suspend monthly fees temporarily during summer months.

Club #4.  Second farthest.  Nearby shopping.  Older clientele.  Classes are additional cost. Cost is xx/month and can suspend during summer months.  Cost is $300/year. 

In clubs #3 and # 4, the cardio machines all have individual TV monitors.  I enjoyed using these since I could watch the show of my choosing.

Overall, I'm still not a fan of using exercise machines.  I'd rather be outside playing a sport.  Since the weather is getting warmer, I think I will wait winter 2013 to decide whether and which club to join.

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

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

Copyright © 2013 Achievement Catalyst, LLC

Housing Recovery Hindered by Student Loan Debt

Housing's Biggest Challenge: $1 Trillion in Student Loan Debt  reports one headwind for the housing market is that student loan debt is hindering young first time homebuyers.  Either they don't qualify for a large enough mortgage, nor can they save for a larger down payment.   So despite some of the lowest mortgage rates ever, there are actually less first time homebuyer purchases than normal.

While student loans generally are viewed as good, the delay of housing purchases shows student loans create economic tradeoffs and demonstrates that there are no economic free lunches, despite what some might have us believe.

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

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

Copyright © 2013 Achievement Catalyst, LLC

Where's the Irrational Exuberance

"Be fearful when others are greedy and greedy when others are fearful." ~ Warren Buffet

Despite record highs for stock indices,  I don't see much irrational exuberance yet.  In fact, many investors are like me, cautious and expecting a correction.  The decline of 2007 to 2009 is still fresh in my memory, as it is for many others.  

The market has gone over 5 months without a 5% correction, which is surprising since there are an average of five 5% correction in a year.    Still,  I don't see much greediness either.   In fact, people I know seem to be mostly in cash waiting for a correction.

Perhaps, this is the time to be greedy.   Unfortunately, I'm too afraid to be greedy with many market indices at all time highs.

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 © 2013 Achievement Catalyst, LLC

The Wealth Builder Carnival #121

Welcome to the one hundred twenty-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.

Insuring and Protecting

Dave Leonard presents How can I save on car insurance? posted at Car Insurance Comparison, saying, "This article clearly describes thorough ways for individuals to save on car insurance. It touches on discounts, things that hold individuals back from getting the most savings on car insurance, as well as things you might not expect you can do to save."

Investing

Dividends4Life presents 4 Stocks Raising Dividends and Expectations posted at Dividend Growth Stocks, saying, "Gregg S. Fisher noted in a 2009 Forbes article that the assumption that investors are rational agents is bunk. He went on to say 'We are not rational. We’re human. Even the most brilliant investor can be swayed by emotions into making irrational decisions that result in financial loss.' Logic has very little to do with short-term movements in stock prices. Knowing this, there are some things that long-term buy-and-hold investors can do to profit from these irrational moves in the market, such as following a disciplined approach of acquiring stocks that routinely increase their dividends..."

Living Frugally

Bryan presents How Much Should You Spend On An Engagement Ring? posted at Gajizmo, saying, "A proposal and engagement should be one of the happiest times of your life, but you should not have to pay for it the rest of your life. With the Spring and Summer seasons fast-approaching, many couples will be planning to get engaged soon, giving them that one year time span to put together the perfect wedding. This article will help couples decide on how much to spend on an engagement ring, the consideration to keep in mind and how to go about picking the best one."

Tim Hall presents How to Save Money on Car Maintenance posted at Summer Nanny Jobs, saying, "Keeping up with your vehicle’s maintenance may seem like an arduous task, but its one that’s well worth the effort in the long run. There are plenty of ways that you can save money on car maintenance"

Retiring

John Schmoll presents Is Your Retirement Planning Frightening? posted at Frugal Rules, saying, "Looking at the statistics, many people are behind in a big way in terms of saving for retirement. Don’t allow yourself to be another statistic and start now, even if small and it will help that discipline of saving money over time."

Super Saver presents Asking for the Perfect Retirement Job posted at My Wealth Builder, saying, "If you want something, ask for it. The worse that can happen is getting the answer 'no.'"


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 © 2013 Achievement Catalyst, LLC

Still Waiting for a Correction

"The market will move in a direction that inflicts the most pain." ~ Wall Street adage

It seems the market is at an inflection point between greed and fear.  There is not the irrational exuberance seen at previous market tops, nor is there a large amount of caution seen at previous market bottoms.  A sharp movement either direction will cause pain, although I suspect an upward move will cause more pain since there is still a lot of money on the sidelines or invested in fixed income.

For now I plan to wait of the inevitable correction happens to the stock market.   When that happens, I will be looking to buy in two sectors: financials and biotechs.   In the meantime, I'm still selling stocks to reduce my risk exposure.  Other than a slight bit of seller's remorse, I am still OK with continuing with this strategy.

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 © 2013 Achievement Catalyst, LLC

Stock Market Party Probably Over

The stock market looks a lot like October 2007 again to me.  Back then, the S&P 500 reached an all time high, my company stock reached an all time high, and our investment accounts were over 20 times my salary.  In March 2013, the S&P exceeded the 2007 high, my company stock beat the 2007 high, and our investment accounts were over 20 again, but below the 2007 high. Just as in 2007, there are now signs of potential crises which could lead to an economic downturn. 

Back then, I decided to stay invested and ride out any economic downturn.   That turned out to be a bad decision.   Now, I'm at the same crossroads again and I don't plan to make the same mistake.  I will continue to sell into what's left of the rally, so that I have cash to reinvest when the market makes the inevitable downturn.

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 © 2013 Achievement Catalyst, LLC

Where's the Brinkmanship?

After all the finger pointing in the past, I'm surprised that President Obama and the Republican majority house have been relatively silent with the debt ceiling deadline nearing again.   I wonder why?

I've been expecting a full blown political positioning by both sides, which would have created significant volatility and downward pressure for the stock market, and therefore, created a buying opportunity for me. 

The debt ceiling issues has been pushed off to mid May, 2013 with a Congressional plan to temporarily suspend the debt ceiling.  

Congress can't do this forever, so I expect the brinkmanship to return before the end of 2013.

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

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

Copyright © 2013 Achievement Catalyst, LLC

Asking for the Perfect Retirement Job

"If you want something, ask for it.  The worse that can happen is getting the answer 'no.' " ~ me to a new hire class.

This is likely my year doing a season part time financial job, which I have done for six years now.   I think this is the time to quit, based on the changes I'm seeing. Also, I gave my employer some very critical and constructive feedback, which I expect will be ignored again.

However, a colleague thinks my decision to quit is too hasty.  His point is I should first ask for what I want, just in case the company asks me what it would take to return.  At first I declined, but then I decided I needed to follow my own advice that I used to give to new hires.

So here are my requirements for staying:

Limited scheduled hours.  I enjoyed only being on schedule for 8-10 hours each week and coming in outside of scheduled hours as required by client appointments.   So my first requirement is only being scheduled 8 hours a week, for two 4 hour days, during weekdays between 10AM - 3PM.

Working with only current clients.  I have about 50 clients with whom I regularly work.   In addition, I work with another 50 clients of which about 1/2 are new to the company.  I would only want to work with my regular clients and choose about 10 additional clients with whom to work.

Compensation.  My number is $30/hour plus commission.  Since the company is moving towards more bureaucracy, I think I should be paid signficantly above minimum wage.  Then, there is the usual higher than company standards work that I do, which my clients appreciate. 

Co-workers.  I want to work with an office where the employees are competent, professional and excellent performers. 

There is no way the company will consider my request.   However, should they ask what it would take for me to return, I'm prepared with an answer.

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

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

Copyright © 2013 Achievement Catalyst, LLC

The Value of a College Degree

In the 1970s, a bachelor's degree provided graduates access to excellent jobs, higher pay, and advancement opportunities.  It was definitely worth going to college, especially since the costs were reasonable.   On the other hand, getting a job at McDonald's could be done while still in high school.

Fast forward to 2013.   Recently, a McDonald's franchisee posted an ad for a cashier position in which the requirements included 1-2 years experience and a bachelor's degree

To me, there are two possible explanations.  Either McDonald's technology to cook fast food has tremendously advanced, or the education available up through college isn't as useful as it was in the 1970s.

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

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

Copyright © 2013 Achievement Catalyst, LLC

Basis Step Up for Inherited Assets

When property is inherited, the cost basis is stepped up or down to the fair market value (FMV) at the date of death.   So when property is inherited from a parent, grandparent, sibling or third party, the new cost basis is the FMV on the date of death.   Step up or down for basis is done for all inherited property, including joint property with right of survivorship that is transferred to the surviving spouse, which I didn't realize until doing some research a couple weeks ago.

For most cases, the entire asset cost basis is changed to the FMV at date of death.   That is easily done for assets such as stock, bonds, and other liquid financial items.   Estimating the FMV of real property or collectibles can be more challenging, and may require a formal appraisal.    An approach can be to sell the property shortly after the date of death and assign the sale price as the FMV.

For joint property, usually only the part of the asset owned by the decedent is stepped up or down.   For example, if a husband and wife jointly own a house, only half of the house is stepped up or down when one spouse dies and transfers half to the other spouse.   However, in community property states, 100% of the asset is stepped up or down to FMV for the surviving spouse.

From what I've seen, there is a good  general understanding of stepping up assets received from other than joint property.  However, the step up or down rules for joint property may not be knowledge that is known to many people,

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

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

Copyright © 2013 Achievement Catalyst, LLC

The Wealth Builder Carnival #120

Welcome to the one hundred twentieth 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 6 No-Cost Ways to Cross-Promote Your Startup posted at Tech Cocktail, saying, "Cross-promotion can be a great way to promote your start-up for free or at a low cost. Here are some ways you can advertise your business with the right partner."

Insuring and Protecting

Super Saver presents Why I Always Buy Title Insurance posted at My Wealth Builder, saying, "Title insurance is an inexpensive way to get peace mind."

Investing

Jamie presents Calculating ROI, IRR and Cash on Cash Returns posted at www.jamiesmoneyadvice.com Blog Feed, saying, "A great article on calculating various types of returns."

Dividends4Life presents 7 Dividend Stocks Building Future Yield posted at Dividend Growth Stocks, saying, "Driven by computers that cost more than the average person will earn in their lifetime the investment markets move at light speed. To keep pace hedge funds, mutual funds, institutional investors and multi-billion dollar money managers spend large sums of money on high-tech tools to give them an edge. So, what chance does a small individual investor have? Not much of a chance if you let the Wall Street players define the rules..."

Living Frugally

Bryan presents How To Trade In A Car posted at Gajizmo, saying, "Summer marks one of the most popular times of the year for Americans to buy new cars. If you are thinking about trading in your current car for a new one soon, it will do you some good to read this article and learn some of the strategies for getting the highest value out of your trade-in."

Retiring

Jason Hull presents Is 4% the Correct Safe Withdrawal Rate at Retirement? posted at Hull Financial Planning, saying, "Ever since William Bengen's seminal SAFEMAX study, the financial planning industry has touted the 4% safe withdrawal rate as a rule set in stone. Is it the right number?"

Taxes

John Schmoll presents How Should You Spend Your Tax Return? posted at Frugal Rules, saying, "The average tax return is nearly $3,000. Receiving that sum of money all at once can lead to easy temptation. Make sure you make wise decisions with that money, whether it be paying off debt or investing for the future so you can make the money work for you."


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 © 2013 Achievement Catalyst, LLC

Wealth Builder Ratios - Q1 2013 Update

Here is our Q1 2013 Wealth Builder Ratios update. During the first quarter of 2013, the Dow, Nasdaq and S&P500 indices were up 11.3%, 8.2% and 10.0% respectively. My company stock was also up 13.5%.  Our investment portfolio increased in value 11.3 % due almost mostly to the rise in my company stock in Q1. About 10% of the gain was due to the gains in stock inherited from my parents..

For more details on the relevance of these ratios, please see this How Much Is Needed To Be Wealthy - The NUMBER. 

Ratio and Target	Q4 2012	Q1 2013	Comments
Investment Income to Salary Target= 0.8 2007= 3.41 2008= -5.47 2009= -1.38 2010= 1.29 2011= 0.5 2012= 2.02	2.02	2.16	This has been an outstanding investment quarter.  However, neither the stock market or my company stock can continue to advance at this rate. I plan to sell some additional shares of company stock in my retirement plan, keeping only the low basis shares in my company retirement for a future NUA execution.  I bought back a very small amount near the bottom of the trading range in June 2012 which I have sold at a 15% gain.  At this point, I plan to sell all the stock options with an early 2014 expiration during 2013.
Savings to Salary Target>20 2007=23 2008=16.7 2009=15.3 2010=16.6 2011=17.1 2012=19.1	19.1	21.2	During Q1, I had be slowly trickling funds back into the stock market.   I plan to continue trickling in funds into stocks and ETFs during Q2 2013.
Debt to Salary Target=0 2007=1.51 2008=1.46 2009=0 2010=0 2011=0 2012=0	0	0	We said bye-bye to our mortgage on May 20, 2009. Eliminating a mortgage payment has reduced our expenses by 24%.

My financial goals for 2013 are:

1. Continue to maintain an Investment Income to Salary ratio > 0.8. (on track)

2. Maintain a Savings to Salary ratio of 20. (on track)

3. Maintain Debt to Salary Ratio at 0. (met final goal of 0)

(For reference, Salary refers to gross salary just prior to early retirement in October, 2007.)

Both #1 and #2 were directly correlated with how well our stock, bond, and CD investments returns. With the very positive performance of my company stock and the high proportion of cash, our portfolio was up significantly.

Although I am pleased with our portfolio results, I am not confident the gains are sustainable. Our short term expenses (next 3-5 years) are invested in CDs, bonds and money markets. I continue to be concerned about volatility of our investment portfolio, and believe there equal downside and upside potential going forward due to EU sovereign debt crisis and the US debt ceiling crisis.  So I continue to slowly add funds to the stock market, and hold my company stock and stock options

I continue to have the same financial goals for 2013. At this point, I am slightly optimistic about the economy and the stock market.

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 © 2013 Achievement Catalyst, LLC

Obama Wins Nobel Prize in Economics

Early this morning, the White House received a call from Sweden informing it that President Barack Obama had won the Nobel Prize in Economics.   Specifically, Mr. Obama is awarded the Nobel Prize in Economics for "guiding the United States economy out of the worst financial crisis since the Great Depression.  Through monetary stimulus and monetary policy, Mr. Obama was able to reverse the economic freefall and return the United States on a path to its pre-recession state. 

In this morning's White House press conference, Mr. Obama shared the Nobel committee announcement, "As I said in a 60 Minutes interview, 'I would put our legislative and foreign policy accomplishments in our first two years against any president -- with the possible exceptions of Johnson, FDR, and Lincoln -- just in terms of what we've gotten done in modern history.'   Now I can say, I would put my accomplishments against any president.   After all, which other president has won two Nobel prizes?

"Now that the economy is well on the way to recovery, I'm focusing my efforts on the next Nobel Prize, in Physics.   Although we made some mistakes with the investment in Solyndra,  I believe I have discovered a physics breakthrough that will make solar energy cheap and plentiful.    But the answer won't be ready until 2015, after the mid term elections."

"My Presidency will be unsurpassed once I win a third Nobel Prize, which has never been done by an individual before."

After a round of applause, Mr. Obama ended the conference and left to play his annual April 1 round of golf.

For more on April Fool's posts, check back every April 1 for a new segment.

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

Copyright © 2013 Achievement Catalyst, LLC