Adoptions – Employee Assistance Payments and Government Grants

In a previous post, I summarized Federal tax credits and income exclusions for an adoption. Tax credits and income exclusions reduce the adoption cost by reducing your taxes in the year the adoption is completed.

On the income side, I found a couple options that can be used to get money for an adoption. In these cases, the money is also provided after the adoption is complete. Here are the additional sources of income that I found and used for an adoption.

Employee Adoption Assistance – The program typically provides between $2000 and $5000 to cover adoption expenses. Twenty-four companies offer as much as $10,000 adoption assistance. Stanford University is among the organizations offering $10,000. Depending on which source of information one uses, between 9-20% of companies offer adoption assistance. Check with your benefits director as to whether your company has an adoption assistance program. Adoption Friendly Workplace has a search tool to find companies in your area that provide employees adoption assistance.

State Grants – In our state, this program is funded by the state and administered by the county. Our state’s program provides up to $2000 to cover out of pocket adoption expenses. It is worth checking if your state has a similar program.

For our adoption, my company provided $5000 and our state provided $2000 to cover our out-of-pocket adoption expenses.

Photo Credit: morgueFile.com, Jane M. Saywer

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

Copyright © 2006 Achievement Catalyst, LLC

Retirement Calculator Evaluation - A.G. Edwards

Over the next month, I will be testing several online retirement calculators and posting my evaluation.

Here’s an assessment of a Nest Egg Score Estimator from A.G. Edwards. It provides a rating for your retirement readiness. Overall, the tool covers the right categories, but it seemed a little too “feel good.” I thought their system was a little too generous in the scores it assigns for each answer and it didn’t include possible answers such as “negative net worth” for question 13 or questions about existing non-mortgage debt.

To illustrate the point, let’s take a hypothetical person, Ima Retiring who is:

1. Married
2. 55 years old
3. With dependent children
4. $105,000 income
5. 10+ years at the job
6. Has a retirement account
7. Saves over 20% of income
8. Saving more this year
9. Taking more risk with investments
10. Retire within 5 years
11. Spending 80% of income
12. 50% equity in house
13. Over a million dollars in net worth.

Ima’s score was 835 or Excellent. I thought this was a reasonable rating.

For curiosity, I tried a couple of changes that I believe are “killer issues” to a comfortable retirement. In question 11 (the percentage of take-home pay spent), a change from “spending less than 80%” to “spending over 100%” only decreased the score by 40 points and Ima remained in the Excellent category. Similarly, a single change of $1,000,000 net worth to $0 net worth reduced the score by 80 points, still barely keeping Ima in the Excellent category.

My assessment is that either change should have reduced Ima’s rating to Fair, or borderline Fair/Good. I must be too conservative when it comes to retirement readiness:-)

Disclaimer: Examples are illustrative purposes only. Your results will vary with different inputs and assumptions. As with all retirement calculators, please consult with your financial advisor before taking any actions.

Photo Credit: morgueFile.com, Mary A. Pen

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

Copyright © 2006 Achievement Catalyst, LLC

The Secret to Success – Good Decisions

In new hire training at my company, a question that is often asked, “How can I make my project or career successful?” My answer to them is “Success is based on regularly making good decisions.”

Of course, this begs the question of how to develop the skill of good decision making. I use an explanation shared in the book Liar's Poker by Michael Lewis. The following paraphrases a discussion below between a bond trading trainer and a trainee.


Q: How does one make good decisions?
A: Good judgment.

Q: How does one develop good judgment?
A: Experience.

Q: How does one get experience?
A: Bad judgment.

Good judgment is the important skill to develop. It’s ok to make mistakes, and good judgment prevents making the same mistake twice. The challenge is learning from experience and transforming understanding into good judgment :-)

Photo Credit: morgueFile.com, Pamela Benn

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

Copyright © 2006 Achievement Catalyst, LLC

My Personal Experience With Debt

Although we have never had any credit card debt, I do and have used other types of debt as a means to cover high cost living needs (e.g. home or car) or long term goals (e.g. education).

House mortgage – This is the only debt we currently have. It also the biggest debt we’ve ever had. For both homes, the mortgage was about 2 times my gross salary. As I’ve written in previous posts, I use vanilla fixed rate mortgages. No ARMs for me. We never paid off the mortgage on the first house. Interest rates were declining at the time. So we refinanced periodically to lower our payment and take out cash for improvements. We currently have a 30 fixed loan for which we are making accelerated payments against principal to pay off the loan in 15 years.

Student loan – When I graduated from a private university, I had loan equal to about one year’s tuition, room and board. The loan amount was about 40% of my gross starting salary. The monthly payment was about 4% of my gross monthly salary. While manageable, I still remember looking forward to day when the debt repayment ended. I paid off the loan after 10 years.

Car loan – After starting my first job, I couldn’t wait to buy my first new car. After driving the 13 year old family car for two years, I purchased my first car with a bank loan. The loan was for about 25% of my gross annual salary. I recall paying off the four year loan about 1 to 2 years early.

I have occasionally used “1 year same as cash” credit deals. However, I now just ask for a cash discount. I have thought about using 0% APR credit card balances to fund investments such as a real estate down payment. However, I have not yet used this approach.

Finally, I don’t assign the designation of good or bad to debt. To me, all of the above uses of debt were just a means to acquire an important and necessary asset in an economically sound way, a business decision as my father would say.

Photo Credit: morgueFile.com, Mary R. Vogt

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

Copyright © 2006 Achievement Catalyst, LLC

Five Items Not On My Holiday Request List

As regular readers know, I practice the principle of buying only what I need. I also apply this principle to my gift request list.

Here are the top five items not on my gift request list:

Number 5 – A handheld GPS. Nice, but for $150 to $500, I can still use a standard map. MapQuest does a fine job also. It requires a little planning ahead, but worth saving the money instead of buying a GPS.

If I traveled a lot, I would consider getting one. Using a map for the home area is convenient. Having maps for or getting lost in 50 different cities, would justify paying for a GPS.

Number 4 – A Wii, Playstation 3 or Xbox 460. I used to be a video game fanatic. I still love to play my nephew whenever we visit my brother-in-law and his family. (My only chance of winning is if the game is new. Wisdom occasionally beats reflexes in such cases:-) If I had one these game consoles, I would be playing it non-stop. So I don’t have one.

Number 3 – A digital music recorder/player. I like music, but not that much. Mind you, I think the IPod is a great innovation and I own Apple (AAPL) stock. Some of my colleagues have 2 or 3 IPods. From an investment perspective, I’m glad lots of other people like it.

Number 2 – A wide screen (or really wiiiiide screen) HDTV. It’s great technology and I am impressed. However, I don’t enjoy TV that much, I don’t need to see it finer detail to be convinced I don’t enjoy current programs:-)

And my Number 1 non-request is – A fully loaded SUV or luxury car, with the price tag of a small house. Some vehicles have sound systems, video systems, leather and wood paneling far exceeds what I have in my home. However, I don’t want to live in my vehicle. I just want it to get to my destination reliably and safely. A good solid base car or truck that can be driven for at least ten years is more my style.

Just in case anyone wants to send My Wealth Builder a holiday gift , my current request list includes a tie, a bottle of scotch, and a membership to the art museum :-)

Photo Credit: morgueFile.com, Clara Natoli

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

Copyright © 2006 Achievement Catalyst, LLC

Stock Investment Update

In my 11/20/06 post, I wrote that I was bullish for the next 6-12 months and would be increasing my stock holdings over the next couple weeks. As of today, I still have not made any purchases. I was evaluating 20 stocks that met the first and second factors of my buy criteria. However, only one stock, Morgan Stanley (MS), met the third and fourth factors. I did not buy MS since I believe the financial service sector is near a peak. Even though I wanted to increase my exposure the market, I followed the model and did not buy any of the other 19 stocks.

As it turns out, the market declined slightly since Thanksgiving, which has made some stocks more attractive buys. As I wrote on 11/20/06, I am still bullish. This weekend, I will analyze stocks that meet my buy criteria and determine whether to make any purchases.

Photo Credit: morgueFile.com, Arturo Delphin

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

Copyright © 2006 Achievement Catalyst, LLC

Personal Finance Carnivals to Read This Week

Carnivals have a wide variety of content from many bloggers. I find that Carnivals are a good place to get new ideas that I can use for my own wealth building plans. The following Carnivals have been posted and include some great ideas for building wealth:

The Carnival of Personal Finance #77 is hosted by Money and Values with 53 submissions. My Carnival pick is 3 Critical "Personal Finance" Mistakes I Have Made posted at Ask Mr. Credit Card. He presents three tips, including hiring a financial advisor, that I believe everyone should consider for building their wealth.

The Tax Carnival #7 is hosted by Don’t Mess With Taxes and has 19 submissions. My Carnival pick 'Tis the Season at Hill’s Personal Finance is about maximizing tax deductions by make non-cash charitable contributions.

The Carnival of Investing #50 is hosted by Stock Market Beat and includes 26 submissions. My Carnival pick is Five 401(k) Mistakes to Avoid at Money Crashers. I agree 100% with 4 out of 5 recommendations. For number 3, I think people should worry about both how much AND where to invest.

The inaugural edition of Bootstrap Your Life Carnival is hosted by Angela Randall with 21 submissions. My Carnival pick is 6 Financial Cliches That Will Make You Rich posted at The Digerati Life. This post contains timeless tips that will help one build their wealth.

Photo Credit: morgueFile.com, peachyqueen

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

Copyright © 2006 Achievement Catalyst, LLC

Carnival Wrap-Up for Week of 11/26/06

My Wealth Builder articles were included in two more Carnivals since my my earlier post on 11/27.

The Festival of Under 30 Finances #11 is hosted by Student of Finance and included the My Wealth Builder submission Successful Investing 101 – Know When to Sell. My Carnival pick is Why Bother with a Prenup? by Money Forward. The Festival also had a lively discussion about pre-nuptial agreements.

The Carnival of Passive Income #5 is hosted at Passive Income and included the My Wealth Builder submission Loaning in Prosper.com - My Decision is to Pass for Now. My Carnival pick is The Best Way of Making Money on a Blog is Through Sponsorship posted at Instigator Blog.

I hope you enjoy these Carnivals, especially the My Wealth Builder posts.

Photo Credit: morgueFile.com, peachyqueen

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

Copyright © 2006 Achievement Catalyst, LLC

Champions of Debt Elimination

For inspiration on eliminating debt, read about success stories in the MSN.com article Huge Debts, Paid Off Fast. Greg Cards will pay off $154,000 in about six years on a base income of $60,000 per year. Bethany and Stephan Gordon retired $150,000 of mortgage debt in five years, with an initial income of $55,000 per year. How did they do it?


According to MSN.com, among other things:

They made debt payoff a priority, although most continued to save for retirement as well.

They kept their basic living expenses as low as possible.

They looked for creative ways to speed up their debt repayment, and some took extra work. (Cards, for example, volunteered for overtime and took a second job.)

It wasn’t easy for any of them. I am inspired by their commitment to achieving their goal. They all had the vision and will to be successful.

Photo Credit: morgueFile.com, Paul Anderson

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

Copyright © 2006 Achievement Catalyst, LLC

Be Healthy and Get Wealthy

On average, healthier people are wealthier. Several studies have shown a positive correlation between state of health and amount of wealth. The University of Michigan published a study about this relationship in 1996. Yahoo! recently published an article on a new study by the British Medical Journal that reconfirmed the findings.

Of course, statisticians will point out that a cause and effect relationship isn’t clearly established – i.e. does good health lead to wealth or does wealth lead to good health? (For example, the Yahoo! article also noted there was a correlation between height and wealth – i.e. taller people were wealthier.) Personally, I’m not going to wait to find out if “cause and effect” is one way or the other. I’ll work on improving health and wealth and cover both options:-)

Photo Credit: morgueFile.com, Paul Anderson

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

Copyright © 2006 Achievement Catalyst, LLC