The Wealth Builder Carnival #72

Welcome to the seventy-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. Unfortunately, Blog Carnival was having some technical difficulties in the last week, which has significantly limited the number of submissions.

Living Frugally

Super Saver presents Be Prepared for Bad Financial Times posted at My Wealth Builder, saying, "The Great Recession has taught me a tough lesson. It's not how well I do during the good times; it's how well I survive during the bad times."

Taxes

Scott Skyles presents Mortgage Interest Deduction, Limit & Phase Out 2012 posted at Mortgage 1A, saying, "The mortgage interest tax deduction provides homeowners the ability to deduct the interest they paid on their mortgage(s) from their taxable income they earned for the tax year in question. Your primary residence isn’t the only mortgage interest deduction you can take advantage of."
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 © 2012 Achievement Catalyst, LLC

How I Got the Most from my Performance Appraisals

Almost everyone I know dreads a performance appraisal, whether giving or getting one.  Managers dread the administrative process of  As a retired manager, I've given a 20 to 30 performance appraisals.  I've also received over 30 performance appraisals during my working years. 

As an astute supervisor once told me, there are only two or three performance appraisals that I found useful.  Here they are:

For promotion recommendation.  In my company, an up to date performance appraisal (PA) is needed to make a promotion recommendation.   Doing a PA for a promotion recommendation is very straightforward to do.   The PA will focus on the positive business results, great contributions and strengths.  It's basically a testimonial.

To document career goals.  A PA is a excellent opportunity to tell my supervisor and the company about my personal career goals and get management's reaction.  To me, a lot of improvement plan recommendations means I'm not on track.   A plan of preparatory next assignments means I'm on track.

To request approval of my personal training plan.   I always found PAs a great time to tell my supervisor the training courses and associated costs for the upcoming year.  In my experience, my training plan of one to two courses involving no more that 10 working days were always approved.

PA elements that I didn't find useful:  strengths, weaknesses and improvement plans.   In general, I didn't get much benefit for reviewing these areas on a annual basis.

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



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

Copyright © 2012 Achievement Catalyst, LLC

Getting A Big 2011 Tax Refund

I roughed out our 2011 Federal and State tax return and, as expected, we'll be getting a really big tax refund.  A big refund is not the norm for us.  Usually, we get a small refund (e.g. about $100) or owe a few hundred dollars. This year we'll be getting significantly larger refund.

The reason for the big tax refund is the over withholding for the exercise of stock options I retained when I retired.   My company's policy is to withhold 25% federal taxes and 5% state taxes for stock option exercises, which is way higher than my tax bracket since I'm retired.  (For reference, the withholding would be accurate if I was still working at my old job.)   I've requested for the withholding to be reduced and be more accurate, but my company's policy prevents the change from being made.  So it appears that I will be getting large refunds for the next few years as I exercise stock options, provided there isn't a big market crash that makes the stock options worthless.

Since I currently expect to have a large tax refund for 2012, my goal will to get our 2012 tax return filed in February next year, which would be the earliest I've ever filed a tax return.

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

Copyright © 2012 Achievement Catalyst, LLC

Going to Have A Lot of Free Time

At the end of April, I'm going to have a lot of free time as several jobs end or scale back.  First my seasonal financial services job ends on April 17.   Second, the transition of my temporary full time job is complete and my employment will end on April 30.  Finally, after after being called in only once since May 2011, I've been demoted from college prep exams (high demand) to subjects (extremely low demand).

My one remaining part time job only requires about two hours a week.  In addition, managing and writing for My Wealth Builder takes about another five hours a week.  At this point, I don't plan to take on any new part time jobs.  So I am going to have a lot of free time in May and the rest of 2012.

Here's what I plan to do:

Home projects.  I put several home projects on hold for the multiple part time jobs in 2010 and the temporary full time job in 2011.  I am going to start up on those projects again: outdoor masonry repairs, indoor grout repair, garage organization, and other general house maintenance.  In addition, we will likely need to replace our driveway this year which will require estimates and choosing a contractor.

Lunch with our daughter.  I'd like to start having lunch at with our daughter a couple times a month again.   Our daughter still thinks it's cool to have dad visit for lunch.  It won't be long before she won't want me to attend lunch so I will take advantage of the opportunity now.

Investments.  I haven't been very engaged in our investments for the past two years.  I plan to take a few courses and begin actively managing our investments again.  I've already identified a couple of courses to take that are offered by one of my brokers.

Hobbies and entertainment.  I've already starting some coin collecting activities with our daughter, which she enjoys.  I will also start using our pool and foosball tables on a more regular basis.   Also, I plan to use my free activities card for our local parks more often to do canoeing, pony rides, bike riding and children's activities.

I look forward to having lots of free time this summer to work on the things that I choose :-)

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


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

Copyright © 2012 Achievement Catalyst, LLC

Seniors Still Paying on Student Loans

 Over 60 and still paying student loans reports that $36 billion, or 4.2%, of student loans are owed by people 60 and older.  Another 11.3% of the student loan debt is owed by people 50-59.  The article does not share the exact causes of  people still having student loans at these ages.  The potential reasons include not paying enough on loans, going back to school later, or co-signing a child's or grandchild's student loan.

When I graduated from college over thirty years ago, loans were a great way to help pay for a college eduction.  I doubt many seniors were paying off student debt.  For my spouse and me, we were able to pay off our student loans in 10 years or less, as many of our peers did, with little difficult.  

Nowadays, the data show student loans may be more of a detriment than a help.

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


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

Copyright © 2012 Achievement Catalyst, LLC

Earn Large, Live Small

Here's my simple strategy to building wealth quickly: maximize and grow earnings; live at least 20% below those earnings.  Building wealth is all about earning large and living small.   To me, many people make the mistake of doing the opposite: earning small and living large.   In the spirit of having a provocative discussion, I'll share some hypothetical numbers, which I usually don't do.

Earning Large
To me, earning large is a minimum of $80,000 per year and preferably over $100,000 for a household.  These numbers are well within reach of many households, if they choose to strive to achieve them.   Here are some of the opportunities: 

Education.  Get a degree in a field that leads to a high paying profession.  For example, starting salaries for engineers at top corporations are about $70,000.   Degrees in chemistry have starting salaries around $50,000 with large companies.   Avoid interesting degrees that lead to low paying or no jobs.

Dual income.  $80,000 a year is a $40/hour paying job for one person.  However, a $40,000 a year job is a $20/hour paying job for one person.  Two times $40,000 is $80,000.   The day after my spouse and I got married, we became an "earning large" household due to combined incomes.

Longer hours.  Working overtime has been an option during the economic recovery.  I've seen people boost their income 20-30% at time and half and double time rates.

Multiple jobs.  A simple option is to work multiple jobs.  At minimum wage, working 80 hours a week is about $30,000 per year.   For reference, when I was a manager, I worked 60 to 80 hours a week and in my case, working OT meant working on my "own time."  :-)

Work for a large corporation.  Having worked for a large corporation, I know employees are paid well to live with the corporate rules and bureaucracy.  In my company, new hire college graduates are being paid a minimum of $40,000/year and all new hires are probably averaging $60,000 a year or more.

Of course, all these options are about making a "harder choice," which some, perhaps many, people are not willing to make.

Living Small
To me, living small means putting $10,000 to $20,000 in savings every year in 401Ks, IRAs and taxable savings accounts.  If a household is earning $80,000 to $100,000, saving $10,000 to $20,000 should be possible.  Here are some approaches:

Pay oneself first.   The first payment from every paycheck should go to savings. Once this obligation is met, the rest can be spent.

Avoid debt.   With the exception of a home mortgage and an education that leads to a high paying job, debt should be avoided. 

Focus on what's necessary.  I need basic food, transportation, clothing and shelter.   Everything else is an upgrade or discretionary: TVs, cable/satellite, cell phone, many electronics,  newspapers, Internet and entertainment.  One doesn't need to eliminate all upgraded or discretionary items.  For example, we do have the Internet, a prepaid cell phone and have a DVD player. 

Living small is not about being deprived.  Again, it's about making choices. One can't have everything when just starting to build wealth.

To me, earning large and living small can be done by a significant majority of Americans who are willing to make the extra effort and the additional sacrifices necessary to build wealth.

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

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

Copyright © 2012 Achievement Catalyst, LLC

Links to Carnivals from March 26 - April 2, 2012

Here are the links to the Carnivals in which My Wealth Builder participated from March 26 - April 2, 2012:

Tax Carnival #100

Carnival of Financial Planning #230

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

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

Copyright © 2012 Achievement Catalyst, LLC

The Wealth Builder Carnival #71

Welcome to the seventy-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. Unfortunately, Blog Carnival was having some technical difficulties in the past two weeks, which has limited the number of submissions.

Earning

David Leonhardt presents How To Make A Killing As A Bar Server posted at Barwhiz Blog, saying, "The golden rules for servers to greatly increase their income, whether in a bar or in a restaurant ... or in any other role that requires serving others."

Jeremy Biberdorf presents Starting A Side Business posted at Modest Money, saying, "Have you ever considered starting a side business to earn some extra money. Read Jeremy's story of what led him to start his own side business."

Super Saver presents Three Signs of Being on the Fast Track posted at My Wealth Builder, saying, "Career advancement is one of the best ways to increase income. Being on the fast track is a way to increase income even faster. Here are some of the signs I've noticed when people are on the fast track."

Insuring and Protecting

Jimmy Jones presents Why You Need Short Term Disability Insurance Plans? posted at Buy Short Term Disability Insurance, saying, "Short term disability insurance can be very supplement your income when you can't work. Find out why you will need this."

John presents Anyone Have a Clue When it Comes to Blue Insurance? posted at Wallet Blog, saying, "If you only knew who's insuring you. Blue insurance could have YOU singing the blues."

Investing

Dividends4Life presents 7 Dividend Stocks Sporting A Five-Star Rating posted at Dividend Growth Stocks, saying, "Performance and sustainability - that's what investors in Dividend Growth Stocks are looking for. It's very easy to find stocks with a yields greater than 10%, but how many of those will be able to sustain or grow their dividend over 10, 5 or even 3 years?"

Living Frugally

Dr. Dean presents 24 Stupid Things People Do With Their Money! posted at Dr. Dean's TheMillionaireNurse.com Blog, saying, "Have you ever done anything stupid that cost you money? Check out my list of stupid things not to do and see how well you're doing."

Jason P. presents Frugal Kitchen Tips: Frugal Kitchen Appliances posted at One Money Design, saying, "Frugal kitchen tips aren't just about what’s for dinner. There’s another big expense in the kitchen: small appliances! Follow these tips to save more money!"

Retiring

Darrow Kirkpatrick presents Understanding the Two Sides of the Retirement Equation posted at CanIRetireYet.com, saying, "The retirement equation governs the essential relationships, now and in the future, between all the variables that determine how long your money will last. Fortunes are made by calculating, prognosticating about, and manipulating this formula. And fortunes will be lost by those who get it wrong…But, despite all the words uttered and pixels consumed on behalf of this equation, it actually boils down to a simple relationship that anybody can understand."

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 © 2012 Achievement Catalyst, LLC

Wealth Builder Ratios - Q1 2012 Update

Here is our Q1 2012 Wealth Builder Ratios update. During the first quarter of 2012, the Dow, Nasdaq and S&P500 indices were up at 7.5%, 18.6% and 12.0% respectively. Our investment portfolio returns were 0.4 % due to being mainly in cash during Q4 and a meager 0.7% return for my company stock.

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 2011	Q1 2012	Comments
Investment Income to Salary Target= 0.8 2007= 3.41 2008= -5.47 2009= -1.38 2010= 1.29 2011= 0.5	0.50	0.07	2012 has started out postive but much lower than index returns due to being mainly in cash.  I have sold all the company stock in our IRA, keeping only the low basis shares in my company retirement for a future NUA execution. As my company stock (hopefully) advances, we plan to continue execute the remaining stock options I own.
Savings to Salary Target>20 2007=23 2008=16.7 2009=15.3 2010=16.6 2011=17.1	17.1	17.2	I sold most of our stock investments in June 2011, and kept my company stock and stock options. We avoided most of the volatility in the fourth quarter but missed the gains through the end of the first quarter of 2012.  So the change mainly reflects the small positive change in my company stock.
Debt to Salary Target=0 2007=1.51 2008=1.46 2009=0 2010=0 2011=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 2012 are:

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

2. Maintain a Savings to Salary ratio of 20. (off 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 positive performance of my company stock and the high proportion of cash, our portfolio increased less than the indices in Q1.

It has been very challenging retiring at the beginning of a bear market. Our short term expenses (next 3-5 years) are invested in CDs, bonds and money markets. So we can wait for the stock market to continue an upward trend. I continue to be concerned about volatility of our investment portfolio, but believe there is more downside than upside potential going forward due to EU sovereign debt crisis and continued deleveraging.

I continue to have the same financial goals for 2012. At this point, I am pessimistic 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 © 2012 Achievement Catalyst, LLC

A New Green Energy Initiative

In a much anticipated announcement, President Obama shared the four major points of the his green energy initiative today, also know as the Clean Renewable American Power act.  Mr. Obama heralded the bill as a giant step forward in "freeing the United States from its dependency on Middle East oil" and  "providing middle class Americans with sustainable energy for many generations." 

President Obama described the specifics as :

Natural.

Completely sustainable.

Addresses greenhouse gas emissions.

Middle class focused.

The technology involves harnessing methane gas production from livestock such as cows, sheep and goats.  Livestock currently accounts for 18% of greenhouse gas emissions, more than all the planes, trains and automobiles in the world.  So using this source of natural gas would serve several purposes.

The technology is based on a gas capturing and filtration dome that can be placed over individual animals or entire building.  The methane gas is then collected and separated from the oxygen and nitrogen through a series of distillations plates under in subfreezing temperatures.

President Obama dismissed the critics who claimed that this project would likely turn out to be another disaster like Solyndra.  Mr. Obama scolded Republicans, "Let me be perfectly clear, Americans have been asking for Clean Renewable American Power (CRAP) and I'm going to give it to them.  It's time for the Republicans to stop being the party of "no" and vote for CRAP.   It is my goal to make sure the Middle Class gets more CRAP than in the previous three administrations."

One the CRAP act passes, it is expected that President Obama will appoint Lawrence Summers as the new CRAP Czar.   President Obama praised Mr. Summers by saying, "Given that Larry has already shown his effectiveness on White House Economic Council, it is fitting that he become the first Czar of CRAP."

Mr. Obama concluded the press conference by wishing everyone a Happy April Fools' Day!

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

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

Copyright © 2012 Achievement Catalyst, LLC