Gen-Xers and Late Baby Boomers Financially Challenged to Retire

Recession Will Haunt Gen-X Into Retirement reports that Gen-Xers (born 1966 to 1976) and Late Boomers (born 1956 to 1965) may find retirement challenging as a group.  The article notes that Gen-Xer will likely be the first generation not to exceed the wealth of their previous generation.  Early Boomers (born 1946 to 1955) will likely be the last generation to exceed the wealth of their previous generation. According to the article,  Late Boomers are more like Gen-Xers when it comes to retirement readiness.

The main issues for Late Boomers and Gen-Xers are:  1) Less participation for both in the bull market from 1982 to 2000 and 2) greater losses in wealth for Gen-Xers during the Great Recession.  Thus, both of these generations have less wealth for retirement after the Great Recession than do Early Boomers at the same ages.  Early Boomers are on track to replace over 70% of their pre-retirement income.  Late Boomers are on track to only replace 60% of their pre-retirement income.  Gen-Xers are on track to replace only 50% of their pre-retirement income.

To improve their future retirement situation, the article notes both generations will need to increase financial net worth and significantly reduce debt.

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

Low Awareness of 529 College Savings Plan

According to this article, over two thirds of Americans do not know what 529 college savings plans are, despite the fact that the average student loan debt is $27,000 for college graduates.   Earnings in 529 plans are exempt from income tax if the earnings are used for higher education.  In addition, some 529 plan contributions can be deducted on state income tax returns.

The main downside of 529 plans is the limited use of funds for education.  If a child chooses not to attend college or receives a full scholarship, earnings withdrawals will be subject to a income tax and a 10% penalty.  An alternative is to transfer the funds to another beneficiary, such as a sibling.

Based on my experience, even people that know about 529 plans often choose not to use them.  Sometimes it's due to lack of funds, sometimes it's avoidance of additional financial complexity, and sometimes it's just lack of interest.  Generally, 529 plans appeal to people that have higher than normal interest in financial matters.

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

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

Copyright © 2013 Achievement Catalyst, LLC

How to Not Feel Rich

Why the rich don't feel rich shares how a doctor making $570,000 a year doesn't feel rich.  While an half million dollar annual income seems to define rich, the article shows why money isn't necessarily the primary factor for feeling rich. I took away that there are three important factors that can keep people from feeling rich:

1. Living paycheck to paycheck.
2. Continually growing lifestyle.
3. Always wanting more than is currently affordable.

It would have been interesting to find out how much the doctor had saved, either for retirement or in an emergency fund.  I suspect those might also be factors in making him not feel rich.

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 #128

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

And now on to the Carnival.

Insuring and Protecting

Bryan presents Common Craigslist Scams posted at Gajizmo, saying, "Craigslist is an awesome online service that revolutionized the classified listings industry. However, with any great creation, there are con-artists trying to scam honest buyers and sellers. This article details the schemes of common Craigslist scams and offers strategies on how to avoid being a victim."

Investing

Dividends4Life presents 13 Dividend Stocks Delivering What's Important posted at Dividend Growth Stocks, saying, "For many investors, there is no clear conviction as to how they should invest. Today’s investments are guided by what was read yesterday, and the popular media is constantly churning out new and different ideas. Granted it makes for some “interesting” reads, but it certainty is no way to run a portfolio. Time has proven the positive correlation between consistently raising dividends and stock performance..."

John Schmoll presents Online Brokerages I’ve Used: Etrade 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."

Vytas presents Calm trend trading strategy posted at Trend, saying, "In a calm trend you would see: a clear breakout from its’ previous range and then orderly movement of price forming higher highs and higher lows continuing from a week to multiple months. You would seldom see very strong counter trend rallies and if you do these would be short lived and market would again form some reversal pattern that would be a unique opportunity for you to jump into a trade and go with the flow. This is a strategy that George Soros used to make one billion dollars in Japanese Yen in 2013."

Jason Hull presents Did You Serve in Combat? Check Your Portfolio! posted at Hull Financial Planning, saying, "A recent Cornell study shows that combat veterans may be too risk averse in their investment strategy. This article explains what is happening and where to get help."

Living Frugally

Theresa Torres presents 5 Secrets to Saving Money with Wedding DIY Projects posted at I Just Said Yes, saying, "Do it yourself projects can help you save money on your wedding expenses. If you're a soon-to-be bride, here are some tips for you."

Retiring

Super Saver presents Spending More on Home Services posted at My Wealth Builder, saying, "Now that I'm older and retired, I'm moving more towards having professionals do the work."

Taxes

Edward Webber presents How Much Can You Earn Without Paying Taxes 2013? posted at TaxFix Feed Update, saying, "Do you want to know how much you can earn without paying any tax in the UK? This article provides all the details and how the limit has been increased."


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

Slowing Down Rate of Investing on the Dips

After  investing 2% of our cash when the market declined 2% last week, I've decided to temporarily slow down the rate of "buying on the dip," in case the market continues to fall and become the long awaited 5% correction.    So this week, I plan just hold the ETF positions that I initiated last week and won't add to them until the market gets closer to a 5% drop.   At that point, I will put another 1% back into the stock market through the ETF portfolio investment strategy.

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

Implemented the ETF Investment Strategy

With the market decline the past week, I made my initial investments for ETF portfolios in all our retirement accounts that we manage.  I decided to go with the low cost Schwab ETFs and Vanguard ETFs, which are both commission free depending on the brokerage accounts we use.    Based on the articles identified in Using an ETF Portfolio, I have decided to use the following two portfolios:

	Traditional IRA
Category	Percent	Schwab ETF	Vanguard ETF
U.S. Stock Market	40	SCHB	VTI
International Stock Market	30	SCHF	VEA
Emerging Stock Market	5	SCHE	VWO
Bond Market	15	Cash/SCHZ	Cash/BND
Real Estate	5	SCHH	VNQ
Commodities	5	SGOL*	DJP**

* No commission free Schwab ETF.  Using a gold ETF, which is commission free in the same brokerage account. May switch to a commodity ETN which is commission free.
**No commission free Vanguard ETF.  Using Powershares DJP, which is commission free in the same brokerage account.

	Roth IRA
Category	Percent	Schwab ETF	Vanguard ETF
U.S. Stock Market	50	SCHB	VTI
International Stock Market	20	SCHF	VEA
Emerging Stock Market	15	SCHE	VWO
Bond Market	15	Cash/SCHZ	Cash/BND

For now, I am either maintaining the current small bond position or staying in cash for the bond portion of the account, since I expect bond prices to decline over the next year.  Although I have bought some gold ETFs, I have not yet purchased the commodities ETF (DJP).   Also, I decided to have less diversification and use fewer ETFs in our Roth IRAs.

At this point, I am about 2% invested since the indices fell about 2% last week.

Disclosure: No compensation was received for this post.  At the time of publication, our retirement accounts are have positions in SCHB, SCHF, SCHE, SCHH, SGOL, VTI, VEA, VWO, and Cash.  We have no positions in BND and DJP.

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

Cutting Grass Helped Save my Life

In Frugal and Productive Exercise, I posted that cutting the grass enabled me to get the cardio exercise since it's one of the activities that achieves 120-130 beats/minute.   This week, I came to the realization that cutting my grass was a factor in identifying the health issue of blockages in my heart arteries.

Even though I played tennis, the activity didn't push my heart rate very hard, probably because my body was used to the exertion even though I would breathe hard.  Cutting the grass was something I only did occasionally.  Even though my breathing was normal, the work caused my heart rate to increase quickly.  It was during a couple of these times that I experienced a strange sensation in my chest, which went away in less than a minute when I rested.   I initially thought it might be minor bronchial spasms similar to the intense ones I sometimes experienced when running in very cold weather.

When I got the same sensation running in and out of a cold garage, I decided to see a cardiologists.  Through diagnostic tests, he identified several significant blockages in my heart arteries, which were later corrected with angioplasty.

I asked my cardiologist why I didn't experience more symptoms (such as chest pain or being out of breath) given the severity of my blockages.  His reply was that for 60% of people with blocked arteries, a heart attack was their first symptom.  Fortunately, cutting the grass caused enough symptoms for me to decide to see a doctor.

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

Spending More on Home Services

I've generally been a do-it-yourself person. From repair and maintenance of appliances to our house, I would take on most minor jobs. Being an engineer by training, I'm able to figure out how to fix many things,especially now with many good instructions being on the the Internet. Doing it myself also saved a lot of money.

Now that I'm retired and older, I'm moving more towards having professionals do the work.  First, it started about 10 years ago with cutting the grass.  We hired on landscaping company to cut and edge our lawn.  The cost was $35 a week and saved me 2-3 hours a week. It was worth the cost of about $600 a year.  For my most recent vehicle, I started having my car service regularly instead of doing the work myself, as I did with previous cars.

Over the past few years, we've moved the following maintenance and repair work to professionals:

Gutter cleanout.  I used to climb up on the roof, clean out the gutters and do minor roof repairs.   Now I pay professionals solve the issue.  We put in gutter guards and have the roofers periodically check our gutters.

Gas piping. I used to do my own gas piping with black iron pipe.  I am not certified to work with the flexible gas piping so I hire professional  to make repairs.

Gas lamp maintenance. When we moved in the outdoor gas lamps were not working. During periodic checking over several years,  I wasn't able to find any information on how to repair them.  After several years, we found a company that repairs and maintains gas lamp and paid for an annual service contract.

Although I could probably handle some of the repairs and maintenance, I'm finding that some of the tasks take too much time and effort to become competent.   In those cases, it makes sense to pay for the service.   For the tasks that are still easy, straightforward and safe to do, I continue to handle them.  However, I expect some of these will convert to the "too much time and effort" category as I get older.

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

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

Copyright © 2013 Achievement Catalyst, LLC

Two Stay-at-Home Parents and Work Ethic

I grew up in a single income family with one stay-at-home parent.   My spouse also had the same situation for part of her childhood, with her mom returning to work when the children were older.   Our daughter started with one stay-at-home parent and moved to two stay-at-home parents when I took early retirement in 2007.

While I think two stay-at-home parents has some advantages, I do worry a little about my daughter knowing the situation is not the norm.  I have explained to her that most families have one working parent and some families have two working parents.  I also have explained to her that it will be important for her to work and have a career as an adult.

 Both my spouse and I have done part time seasonal jobs while retired.  So our daughter has seen both of us work, although not continuously in full time jobs.  (I was working full time until our daughter was three years old, but I doubt she remembers much of my time in that job.)  I've also started giving my daughter small "jobs" in which I pay her for tasks outside her normal chores.

At this point, my plan is to be not working any wage jobs in 2014.   So it will be important for us to continue developing a good work ethic for our daughter.
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

Credit Card Used Fraudently

This week, I received a call from the fraud division of our credit card company inquiring if we had made a purchase over weekend.  I was a little shocked to get the call, since we are careful about protecting our credit card info.   I didn't make the purchase.  My spouse wasn't available so I couldn't check with her.  So I asked if I could call back.   The representative gave me a toll free number to call back.

After I hung up, I wondered if the call was really from a scammer who was phishing for information since they asked me for my birthdate.  However, when I checked the call back number it was for the fraud division of the credit card company.   So I called the number, which asked me about a different transaction.  I decided to ask to speak to someone.

After getting my information, the customer service rep (CSR) asked about the same transaction again, which confirmed the first call was legitimate.   I tried the log onto our account, but was denied access.  The CSR reauthorized access to the account and I saw four transactions over the weekend which I was sure we didn't make.

I was informed that our card was going to be cancelled immediately and a new account would be opened for us.  We were to destroy our current cards and wait for the new cards to arrive.

Overall, I was impressed that the credit card company caught the fraudulent use so quickly, within a couple days.  We wouldn't have identified the issue until our next statement, which was a couple weeks away.  Once the credit card company resolves the issue, I will be interested if there are any steps we can take to avoid the issue in the future.

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

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

Copyright © 2013 Achievement Catalyst, LLC

The Wealth Builder Carnival #127

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

And now on to the Carnival.

Earning

Theresa Torres presents 6 Interviewing Tips for Project Managers posted at Project Management Tips || Project Management, Collaboration and Knowledge Management Blog, saying, "If you're looking for a project management job, here are some tips to help you stand out and pass those tricky interview questions with flying colors."

Insuring and Protecting

R.J. Weiss presents Auto Insurance for Teenage Drivers: 7 Costly Insurance Mistakes Parents with Teen Drivers Make posted at The Insurance Protection Blog, saying, "Auto insurance mistakes parents make with teen drivers, that cost time and money."

Investing

Bill Smith presents An Overview Of The Apple Inc, Quarterly Earnings - FastSwings.com posted at FastSwings, saying, "Apple Inc. released its quarterly earnings statement on April 23, 2013. In simple terms, the company beat one expectation but fell short on another."

Dividends4Life presents 7 Dividend Stocks Sending More Cash To Shareholders posted at Dividend Growth Stocks, saying, "We all are looking for the perfect dividend stock. In an Utopian world, the perfect dividend stock would be one that is both high-yield and provide a high dividend growth rate. Its share price would appreciate ratable with its increasing dividend. All of this would be driven by increasing earnings and cash flow..."

Medhat Youssef presents Think Making Money Trading Forex is Hard? posted at Work Online From Home Free, saying, "Building your wealth by investing in the Forex market can be achieved. But the tricky part is to maintain the smart mindset when investing and not let the majority of losers drag you down along. This post is about how you can successfully make a smart Forex investment with only brain effort."

Jason Hull presents Why Paying Assets Under Management Fees is Like Getting a Car Loan From A Used Car Dealer posted at Hull Financial Planning, saying, "Paying 1% a year to an "investment manager" to manage your money? You're probably making a mistake which will cost you hundreds of thousands of dollars."

Living Frugally

Shaun Rosenberg presents Why Living With Less Can Mean More Freedom posted at Shaun Rosenberg, saying, "Learning to live with less is an important skill to learn if you want to boost your savings and lower your stress level. This article talks about some of the reasons why you would want to lower your material wants and start living a more frugal life."

John Schmoll presents Ways to Save on Gourmet Coffee at Home posted at Frugal Rules, saying, "If you consider yourself a coffee snob it can be a pricey think to drink. However, if you’re not opposed to brewing it at home you can save a good chunk of money and end up with a cup of coffee better than what you will at your local Starbucks."

Sydney Bell presents 10 of the Best iPhone Apps for Price Comparisons posted at Longhorn Leads, LLC, saying, "The savings are out there, but with so much competition for your patronage, it’s hard to know when you’re actually getting the lowest prices. Knowing how to find discounts, deals and coupons will ensure that your cash is well spent."

Bryan presents Credit Score Range – What Is A Good Credit Score? posted at Gajizmo, saying, "This article discusses many aspects of credit scores, including why it's important, how it is calculated, the credit score scale, what different scores mean, how to improve your history, etc."

Saving

Super Saver presents Millennials are Savers posted at My Wealth Builder, saying, "Millennials are getting off to a good start on saving."


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

Buying on Smaller Dips

I've been waiting for a 20% correction since July 2011.  In May 2012, I decided to trickle in funds earlier to avoid missing a "fast correction."  As a result, I did put some investments in managed funds in November 2012 and February 2013.  Now I'm considering adding funds with as little as a 2% pull back.

Here's my reasoning:

No commission costs.  I plan to purchase commission free ETFs.  So I can minimize my downside risk by making small purchases.  For a 2% market decline, I can add 1% of my cash to equities.  That way I can take advantage of a further decline, e.g. add another 1% with the subsequent 2% decline. 

Economy is in an stable upward trend.  The economy continues to heal, despite political stalemate, government scandals and lurking EU sovereign debt issues.  A cautiously slow economic recovery has been good for stocks.

Market is advancing.  The market my go the whole year without a 5% correction, as it did in 1995.
Waiting for a 5% correction may have a high lost opportunity cost.

At this point, I am still trying to sell two large positions into the rally, to reduce my specific stock risk.  In addition to commission free ETFs, I may also use the rest of my commission free trades to buy select biotech and select bank stocks.

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

No Longer Naked

On Friday, May 17, 2013, the naked call I sold on my company stock expired worthless.  So I pocketed a small profit for selling the call.  Normally, I only sell covered calls.   However, I had already sold a covered call when my company stock suddenly advanced significantly.  I decided to take a chance and sell an uncovered (naked) call since I didn't think the stock would go much higher.   Actually, the stock did advance four cents past the strike price before pulling back about 7%.

The risk with a naked call is theoretically unlimited losses if the stock should rise significantly.  I say "theoretically" since no stock I've ever owned has shot up over 70% in a short time.  Still, I was sweating a little this week, since my company stock advanced within 2.5% of the strike price on Wednesday.

However, the price of my company stock stopped advancing after Wednesday and I ended profiting from a the small premium when selling the call.   So even with a couple days of anxiety, the trade worked out as planned.

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

Outraged but not Accountable

This week's events with IRS targeting has confirmed my belief there is no accountability at the top.   Note the difference from the private sector.  When JP Morgan Chase had significant losses due the "whale" trader, the CEO and Chairman, Jamie Dimon, was called before Congress and held accountable to for the issue.  Over the last few days, I've listened to President Obama claim outrage, unacceptable behavior, and  dismay, but never accountability.  President Obama claims he had no knowledge until the press reported the issue.

However, it shouldn't take any unbiased investigator long to figure out where the idea to target politically conservative groups came from.  With the current capability to track and trace electronic communications, the originator of the of the directive can be found. That's why Mr. Obama should be accountable and use a special independent counsel to investigate the issue.

 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

What I've Learned from my Retirement Jobs

It's been a little over 5-1/2 years since I took early retirement.  During that time, I've worked at eight different jobs in hopes of finding the perfect retirement job.   Here's what I've learned from the experience.

No perfect retirement job.  Perhaps, the perfect retirement job is the equivalent of a modern day Holy Grail, which an never be attained.  Some were close, but none met all my criteria.  My proposal to create the perfect retirement job was turned down by my organization.

No longer a corporate mindset.  I am no longer interested in conforming to corporate direction if I do not personally agree.  Also, I only give respect to those managers worthy of receiving it, which only happened a couple times in my retirement jobs.

Need meaningful personal learning. An must have element of my retirement jobs is that I get significant personal development from the experience.  Once the personal learning stops, I am no longer interested in the job.

Finallly, a "job that I love" is only possible for the short term, maybe 2-3 years.  So I'm glad I chose  a  27 year career in a job that utilized my strengths and paid well during my working years.

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

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

Copyright © 2013 Achievement Catalyst, LLC

Millennials are Savers

Unlike Boomers, Millennials Appear to Be Super Savers reports that Millennials are saving earlier than their parents for retirement.  According to the report,  the average savings for mass-affluent ($50,000 to $250,000 in assets) Millennials (ages 18-34) is $55,000. The experience of growing up through two major bear markets and two major recessions makes this group more aware of not saving.

Many Millennials start investing at 22 (versus 35 for Baby Boomers) and over 70% participate in their companies' 401K plans.  In addition, less than half plan to rely on public programs for retirement.

Based on this report, it appears that Millennials are actively taking charge of their retirement future, which is good since companies and the government can no longer guarantee a comfortable retirement.

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

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

Copyright © 2013 Achievement Catalyst, LLC

Commission Free ETF Investing

Fidelity, Vanguard, E*Trade, TD Ameritrade and Schwab offer commission free ETF investing for their customers. The number, ETF company, and ETF sector vary by brokerage firm, but include many of the popular ETFs. Companies Add to Lineups of 'Free' ETFs by The Wall Street Journal does an excellent summary of the ETF offerings and the trading restrictions for each brokerage.

I plan to use commission free ETFs as a cost effective way to create a diversified portfolio, using primarily broad market index ETFs.   Here's how commission free ETFs will minimize my cost and expenses.

No trading costs.  I can periodically purchase small lots and incur no additional costs above the ETF expense ratios.  This will enable me to make small initial investments and dollar cost average without trading costs reducing my returns.

Low expense ratios.   The commission free ETFs include companies that offer the lowest expense ratios for index ETFs, as low as .04%.  That would be only $4 of expenses per $10,000 invested on an annual basis.

Low expenses mean higher investment returns. Therefore, I'm going make commission free ETFs a significant part of the investment portfolios in our retirement accounts.

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

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

Copyright © 2013 Achievement Catalyst, LLC

The Wealth Builder Carnival #126

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

And now on to the Carnival.

Earning

Ben presents The Game posted at More Sales Appointments, saying, "Sales 2.0"

Theresa Torres presents 7 Signs that Freelancing is Right for You posted at MakeMoneyInLife.com, saying, "Freelancing may not be as easy as you or others think but if you are not afraid of hard work and if you possess or are willing to work on the following traits, then you may consider entering the world of freelancing."

Bryan presents Reasons To Change Jobs posted at Gajizmo, saying, "The best ways to improve your future financial security are to increase your earned income through a career or home business, invest wisely, and limit your spending. This article advises readers on when it may be time to change jobs, make that jump, and get that promotion or raise."

Insuring and Protecting

Jon and Krista Maroni presents What to do When a Friend Tries to Sell You Life Insurance posted at Responsible and Generous Living in Early Adulthood, saying, "How to navigate the awkward and inevitable insurance salesmen, particularly those you know, sent out to recruit family and friends into buying through their insurance company. Tips on what type of life insurance is beneficial and which plans you'll be pushed toward."

Investing

Dividends4Life presents PepsiCo, IBM and 7 Other Dividend Stocks Raising Their Payouts posted at Dividend Growth Stocks, saying, "When you purchase individual stocks, risk is inherent. Sometimes bad things happen to good stocks. Eventually, every investor will hold a stock that falls out of favor and endures a double-digit decline. Understanding this from the onset makes it easier to deal with. To minimize the risk of significant declines, your core portfolio should focus on blue-chip dividend growth stocks..."

Martin Poldma presents How to Create a Billion Dollar Business posted at Success and Personal Development Blog, saying, "I would like to submit my latest post on how billion dollar companies are created and how anyone could really do it, if they have a successful business in which they keep investing their wealth."

Living Frugally

John Schmoll presents 5 Great Ways to Save Money When Buying a New Car posted at Frugal Rules, saying, "Buying a new or a new to you car can be a stressful time as you need to figure out how much you can afford as well as negotiating with the dealer. With a little homework, comparison shopping and outside the box thinking you can generally save a nice little sum of money on your car purchase."

Retiring

Jason Hull presents Are We Taking the Wrong Retirement Risks? posted at Hull Financial Planning, saying, "According to one economist, '(A new Congressional rule) proves that pensions are pretty much dead.'"

Super Saver presents The Death of Pensions posted at My Wealth Builder, saying, "This article examines how we should be using mental accounting to allocate our investments in our retirement portfolio."


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

Patiently Waiting for a Correction

At this point, I have only a couple more positions that I want to sell in anticipation of a correction.  I'm waiting, along with millions of other investors, for the most anticipated correction ever :-)   However, I still think its worth being patient and waiting.

For now, I won't be adding any more money to equities, and I will be looking to reduce my exposure in two positions.

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

Composted All our Leaves, Finally

After starting the  process in 2010 to compost all our leaves, I finally achieved 100% composting of all the 2012 leaves from our yard.  There were three key elements that enabled us to compost about 45 bags of finely chopped leaves.

1. Mixing grass clippings with leaves.  This was my 2010 discovery for the composting process. By having a 3:1 mixture of leaves to grass clippings, the compost process was accelerated.
2. Saving uncomposted leaves until spring.  I was only able to compost about 35 bags of leaves with grass clippings from the fall. So we decided to save the 10 bags to mix with grass clippings from the spring 2013 grass cutting.   I addition, I also turned the compost pile from the fall and added new grass clippings.
3. Creating bigger piles.  I attended a composting class last fall and it provided students with wire fencing to create a 4 foot diameter and 4 foot high cylindrical composting volume.  This enabled me to create a much larger compost pile.

At this point, 100% of our leaves are in one of three compost piles.  My goal is to complete the composting by end of summer so that I have a clear area to do the fall 2013 composting.  If I continue, my goal is to the get all 45 bags from this fall into compost piles for the winter.

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

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

Copyright © 2013 Achievement Catalyst, LLC

Market Top or Market Breakout

With the Dow and S&P breaking through the previous highs and setting new highs, a case can be made for the market going higher. The market advance continues to be the most unloved rally. The next correction will be the most anticipated correction. However, pundits are starting to acknowledge the possibility of a continuing rally.  For example, permabear Noriel Roubini acknowledges that the rally could continue another two years, before it crashes.

I'm still in the camp that a correction is only one event away, but in the meantime, this is a Goldilocks economic recovery, which is positive for the stock market.  So I remain cautious about putting additional funds in equities and am using the opportunity to take some profits on some trading positions.   It also appears that the market is highly overbought, which usually indicates a correction is due.  So I am preparing to execute my ETF investing strategy when the correction happens.

I expect the next month will provide the answer for near term market direction.

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

Useful Facts About Social Security

10 Social Security facts to know shares ten basic facts to know about Social Security. Here they are:

1. Workers contribute 6.2% of earned income and employers contibute 6.2%.  
2. Benefits are based on 35 highest earning years.
3. Full retirement age depends on the year of birth.
4. Delaying benefits increases the benefit amount.
5. Married couples have options to increase total benefits received.
6. Payments are adjusted for inflation.
7. Insurance (death and disability) are provided prior to retirement age.
8. Benefits are paid electronically.
9. Contribution history can be viewed online.
10. The Social Security trust fund is projected to run out of money in 2033.

For more details, check out the article.

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

The Next Group to Drive Economy

Millennials Are On the Rise reports that the 18- 37 age group (also know as Gen Y or Millennials) will be the population group that has more impact than Baby Boomers on the economy.   This generation has 86 million people, 7% more than the Baby Boomers, and already account for 21% of consumer spending.  The Millennials are already driving increased apartment demand and will likely impact housing demand in the future.  Also, as Millennial save more for retirement, the stock market should benefit.

According to the article, the impact of the Millennials will start rising in 2015 and continue through 2029, which will be a significant positive of for stocks.

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

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

Copyright © 2013 Achievement Catalyst, LLC

Frugal and Productive Exercise

Since my heart surgery, I have made major lifestyle changes.  One change is to get at least 30 minutes of cardio exercise for 6 days a week.  (Coincidentally, this was similar to one of my new year's resolutions: getting 3 hours of exercise for three times a week.)  

During the winter, I had been using exercise machines in indoor gyms.  Although I'm find using exercise machines boring, I was resigned to using them since it was a convenient way to get the required exercise.  I was testing out fitness clubs to decide which one to join.  The minimum cost was $22/month.

However, last month I discovered a better option to getting my required exercise done.   For the past few years, I've been cutting our grass to create green yard waste to compost the previous fall's leaves.   While cutting the grass, I noticed that my heart rate achieved a 120 - 130 beats/minute range, which is the target for my cardio exercise.  So with the warmer weather, I am cutting my grass for 30 minutes a day, over five days.

By cutting my grass,  I get my exercise for free, but I accomplish something productive: lawn maintenance and composting.    In addition, I save time since I don't spend time driving to the exercise facility.

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

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

Copyright © 2013 Achievement Catalyst, LLC

The Wealth Builder Carnival #125

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

And now on to the Carnival.

Earning

Bryan presents Best Ways To Make Money From Home posted at Gajizmo, saying, "Saving money and living below your means is fundamental to financial independence, but more importantly, families need to find ways to grow their income. Whether it is building a business or starting a venture from home, this article can help you get started by giving examples of the best ways to make money from home or online."

Insuring and Protecting

R.J. Weiss presents How do I complete a home inventory? posted at The Insurance Protection Blog, saying, "Three simple ways to complete a home inventory"

Investing

Dividends4Life presents 4 Big-Name Stocks With Double-Digit Dividend Increases posted at Dividend Growth Stocks, saying, "To succeed as a dividend growth investor you must identify and purchase stocks with sustainable dividend growth. Inertia is powerful force. Once a company has established a track record of growing its dividend over the decades and developed a shareholder base that expects higher dividends each year, it becomes increasing difficult for management to cut or fail to raise their dividend. No CEO of this type of company wants a dividend cut to occur on his or her watch..."

Living Frugally

Mr.CBB presents Junk To Funk: Some Woman Down The Road Left Me With Hardwood posted at Canadian Budget Binder, saying, "It’s not everyday I come across a money maker in the streets for free but when I do see it I jump on it. Often a simple DIY project can yield you savings in your budget or profits to your bank account if you can sell it. Watch me turn junk into funk and save!"

Retiring

Super Saver presents Early Retirement Readiness Checklist posted at My Wealth Builder, saying, "Here's a checklist to consider when evaluating whether to take early retirement."

Saving

Jason Hull presents Why You Shouldn't Obsess Over Your Net Worth posted at Hull Financial Planning, saying, "The financial planning industry likes to focus on a target number - your net worth. It's the wrong metric. Here's why."


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

Using Covered Calls

Since I am retired, I periodically do a rollover of my company stock from my retirement plan to my traditional IRA.  This allows me the additional option of using covered calls while trying sell some of my company stock.  A covered call enables me to get additional gains from the call premium and sell my stock at a higher price.  The main risk is the stock may fall signficantly, and the losses are greater than the premium received for the call.

A call is like a coupon; it gives the owner of the coupon a right to purchase an item at a specific price.   A coupon is usually free, but in the case of a call option, a buyer would purchase the call option from me.  

Here's an example of how I use covered calls.   Say my company stock is currently priced at $40.00 and I want to sell within the next six months at $45.00. Since the price is currently $40.00, no one will pay me $45.00 for my stock.  One approach is to wait until the price reaches $45.00 and sell the stock.  Another approach is to sell a $45.00 call option (coupon) for $1.00 that is good for six months.  I have chosen the second approach.

Here's the reason I chose the second approach.  In the first approach, I receive $45.00 when I sell the stock.  In the second approach, I receive $46.00 when I sell the stock for $45.00 because I received $1.00 for selling the call option.  If the stock doesn't reach $45.00 at the end of six months, then I still make $1.00 since I keep the money I make from selling the call option.  Then I can repeat process of selling a call option again.

The main risk is the stock falls significantly instead of rising slowly or staying the same.  If the stock falls to $35.00, the $10.00 decline is greater than the $1.00 I received for the call option.  Also, if the stock didn't have a covered call, I could have sold the stock at a price below $45.00 but above $35.00, and minimize my losses.   However, if I was planning to hold until $45.00, then I'm still $1.00 better off while waiting.

The other risk is the stock goes to $50.00 and I am obligated to sell the stock at $45.00 to a holder of the $45.00 call option (coupon).  This is lost profit, but it's not different than if the stock goes up to $50.00 after I sell at $45.00.

Since I believe the stock will get to $45.00, am willing to wait and am happy with that selling price, I have sold short term covered calls increase my gains when I eventually sell the stock.

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 © 2013 Achievement Catalyst, LLC

New Stock Market Highs

The stock market reached new highs at the Dow crossed 15,000 intraday for the first time and the S&P closed above 1,600 for the first time.  This rally continues to be the most unloved stock market advance, as investors are not celebrating.   It has been reported that the new highs probably resulted from significant short covering on Friday.

I am one of the investors that is not celebrating.  Although our portfolios have benefited from 2013 market advance, I continue to be cautious by selling into the rally and taking profits.   I strongly believe there will soon be an opportunity to by a lower prices.

Of course, the coming correction is the most anticipated ever.  The market has gone six months without a 5% correction, when the average is five in a year.   2013 will be only the third time the stock market has gone from January 1 to May 1 without a 5% correction.  One pundit claimed that other two times ended badly without providing specifics and I haven't found the supporting data for the claim.

This week will be interesting, especially if the market continues to advance.
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

A Goldilocks Recovery

"Ahhh, this porridge is just right." ~ Goldilocks

I'm starting to believe the U.S. economic recovery is "just right."   It hasn't been too fast leading to bubbles that would ultimately collapse.  It hasn't been too slow leading to a major depression.  It has been in the middle, a tenuous recovery that occasionally shows signs of potential strength.  The economic recovery just keeps grinding upwards.

Although he probably didn't intend to have such a slow recovery, President Obama deserves all the credit.  His adminstration's policies have kept private business cautious, which has limited investment, hiring an spending by many companies.   Pork stimulus projects, Obamacare, debt ceiling crises, and sequester cuts have made the future unclear for many businessse, leading them to grow much slower, but still grow,  than in previous recoveries.

The result has be a slow healing economy, which in hindsight has been a good thing.  Maybe this will break the boom/bust economic cycle the U.S. has experienced the last 15 years, and lead to another big advance in the economy over the next 20 years.

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

The Death of Pensions

Pensions used to be the mainstay of retirement income. For many companies, pensions were a good retirement option.   Only current payments to retirees were an expense, and pensions expenses could be paid by future income instead of current income.   However, the use of pensions has been declining as requirements for estimating pension liabilities and funding pensions were created.  These requirements revealed that the majority of pensions were way underfunded.

New Rule Signals Kiss of Death for Pensions reports that a little rule change passed by Congress will revise the calculation for pension liabilities and allow companies to contribute even less to pensions, increasing the underfunding issues.  According to one economist, "This proves that pensions are pretty much dead."

The significant decline of pensions as a retirement option is not a surprise to me.  In my part time job that had a state pension, I figured out that my estimated pension far exceeded the contributions by my employer, me and a 7% investment growth.  In addition, according to the pension rules, I could significantly increase my retirement payments even further by taking steps to increase my pay during my final three years before retiring.

After reviewing the pension option, I decided it was too good to be true and not sustainable.  Soon afterwards, our state reduced pension benefits for current employees, but probably not yet at a sustainable level, in my opinion.
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

Job Interview Mistakes

When I attended job interviews during my senior year, I understood that companies were going to judge and evaluate me.  Therefore, I wore a suit to all my interviews and was very professional during the session.  My biggest mistake was not researching each company before the interview and not revising my resume to be customized for different types of jobs.   However, I did well enough since I received offers from six out of nine interviews.

Some current college graduates don't make the same assumption that I did on being evaluated during an interview.  This CNBC article report that 20% of new college graduates exhibit strange behavior during an interview, e.g. texting, dressing inappropriately, and overly casual language.  Some extreme examples include having a parent attend the interview (or negotiate salary) and bringing a pet to the interview.

As a former hiring manager, my main concern would be the candidate not knowing how to act professional after being hired.   That seems to be the case, as the article reports that about half of HR executives report that most new hires are unprofessional during their first year, up from 40% of HR executives the previous year.

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

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

Copyright © 2013 Achievement Catalyst, LLC

No Such Thing as Good Debt

"Too much of a good thing can be wonderful."  ~ Mae West

When I first started blogging in 2006, there was a lot of discussion about good versus bad debt.  The common thinking was that home mortgage debt, student loan debt and auto debt was "good" debt.   Credit card debt and other debt was typically categorized as "bad" debt.

My personal perspective was that debt is financial tool and it is neither good nor bad.  It's how debt is used that is the good or bad.   For example, the Great Recession has taught me that home mortgage debt and student load debt can be a financial negative if the amounts are too high.    If my home mortgage exceeded the value of my home or my student loan debt significantly exceeded my salary, I would feel the debt was a significant financial burden.

Although we've taken out a home mortgage, college loans, and auto loans, we were generally conservative in our borrowing.  For example, we made a 40% down payment for our last house and paid it off after 6 years.  At this point, we are debt free and do not plan to take on any new debt since we've witnessed the significant issues caused by debt during the recent recession. 

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