Retirement Preparation for the Young

7 Ways to Prepare for Retirement in Your 20s   offered an excellent strategy for preparing for retirement.  The seven elements were:

1. Avoid consumer debt.
2. Avoid lifestyle inflation.
3. Grow income.
4. Open a 401(k) and save.
5. Open a Roth IRA.
6. Open a taxable brokerage account.
7. Invest in income producing assets.

Based on my experience, I would add, "Pay yourself first" as the eighth element.

While there are no guarantees, following these 8 elements will improve the chances of having a success 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 © 2012 Achievement Catalyst, LLC

Protecting Principal

Call me skeptical.  Despite the recent rally, I think there is still too much divergence between the market and economic data to put substantial funds into stocks again.   I do believe the Fed action to keep interest rates, whatever it may be, will cause the market to rise further.  My concern is the advance may be similar to the 2007 peak before the start of the recession.   At that time, I didn't see any downside to the market and put substantial funds into equities, which the declined 60% over the next year.

I learned from my 2007 experience.  This time, I will be more cautious.   If I decide to invest, I will  commit limited funds at what may be a near term peak and then waiting for a correction to add more funds.   In addition, I will offset some risk by exercising some stock options as my company stock (hopefully) advances with the rest of the stock market.  

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 © 2012 Achievement Catalyst, LLC

The Wealth Builder Carnival #91

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

And now on to the Carnival.

Earning

Super Saver presents Escape Velocity Aids Wealth Builder posted at My Wealth Builder, saying, "Significantly growing earnings is an important element of wealth building."

Insuring and Protecting

Wallet Hub presents How to Manage Your Financial Records posted at Wallet Hub, saying, "We've all heard the phrase 'Get your financial house in order.' Well, it might be a good idea to start with cleaning up your documents. This minor physical action will make a huge difference in handling the intangible details of financial management."

Investing

Vytas presents 5 more key investment tips posted at Trend, saying, "I firmly believe that most rules of trading that are good for one financial market will also be good for all the rest. I came to this conclusion by watching various markets. Securities are securities and people are people! And when people go to securities you will notice the same price patterns, because people are the same and their expectations, fears and greed are reflected in any market. Check what the tips are."

Dividends4Life presents These Two Companies Are Shoving Mountains Of Cash To Their Shareholders posted at Dividend Growth Stocks, saying, "Some companies want to give their shareholders something special. When you have a mountain of cash sitting on your balance sheet you can make your shareholders really happy by sharing the wealth in the form of special dividend, and that's what these two companies decided to do this week..."

Living Frugally

thethriftywife presents Saving Money on Food Amongst the Rising Food Costs posted at The Thrifty Wife, saying, "How to cut food costs."

Theresa Torres presents Guest Post: 6 Tips for Buying Bulk Groceries at Costco posted at Addicted To Costco!, saying, "Buying in bulk when done properly and planned carefully can give a family big savings. Here are some good ideas to guide you in your next grocery shopping trip."

Retiring

Kristine McKinley presents Social Security’s Gift to Married Couples: The Spousal Benefit posted at Social Security Retirement Income, saying, "With Social Security making up approximately 40% of the average American’s retirement income, it’s important to maximize your lifetime benefits not only for yourself, but for your spouse also. The rules surrounding spousal benefits are very complicated. Making a wrong decision could mean a lower standard of living and could increase the chance that you will outlive your money."

Taxes

John K presents Is Mortgage Tax Relief On Its Way Out? posted at Wallet Blog, saying, "The mortgage forgiveness tax break is set to expire at the end of this year. Will this law that offers some relief for those unable to make payments or in possession of a property with diminished value be extended?"

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

Progress on New Year's Resolutions from 2008

At the end of 2011, I still had not met my 2008 New Year's resolutions. Instead of making new resolutions for 2012, I decided to continue working on the 2008 resolutions and track my progress. Here's my latest report card on how I'm doing on the 2008 resolutions.

	2008 New Year's Resolutions and Status
Category	Category Activities	Status	Grade
Healthier Lifestyle	Lose 10% of weight	Have achieved a 13% weight loss and am within 2% of the weight of my sophomore year in high school. I am considering trying to achieve a 20% weight loss which would put me almost at my lowest weight in high school.	A+
	Better diet	Achieved a target of 5 servings of vegetables/fruit per day in July, 2009, and regressed back to 2-3 per day.  Since early August 2012, I have been eating at least 5 servings of vegetable and fruit per day.  In addition, I've been taking Metamucil three times a day which provides 1/3 of my daily fiber requirement.	A
	More exercise	In July, 2009, I had exceeded my target of 3 times per week by regularly exercising 6 times per week and then fell back to 2 times per week.  Since early August 2012, I've been averaging 3 times per week, above 3 some weeks and below 3 for others.    I still need to consistently be exercising at least 3 times a week.	A-
Tax Strategies	Identify five strategies to minimize taxes	Used Roth IRA contribution, Child tax credit, Roth IRA conversion , and 0% long term capital gains in 2008. Continued to benefit from these four tax strategies in 2009, and added a fifth of using accelerated itemized deductions and standard deductions in alternating tax years. In 2010, we  benefited from two additional tax strategies involving the saver's and making work pay credits.	A
Contingency income	Earn 20-40% of retirement income needs in first 3 years	Achieved 27% in 2008 due to deferred compensation. In 2009, 16% was achieved because our monthly expenses declined when we paid off our mortgage. In 2010, we earned 46% of our projected expenses.  In 2011, we earned 80% of our projected expenses since I took on a temporary full time job at a non-profit.  In 2012,  the temporary full time job ended and I decided cut back on part time jobs.  So 2012 earnings will cover about 30% of annual living expenses.	A
Have Fun	Family activities and vacations	Have attended 100% of our daughter's school activities for parents. We are doing several vacations a year and plan a major national parks vacation in the next couple years.	A
	Hobbies	Playing tennis, and some golf.  Doing coin collecting, tennis and golf with our daughter.	A

This report card is a significant improvement over the September 2010 report card which had a B+ average. My main opportunity area is exercise. I won't consider my 2008 resolutions successful, until I give myself an A in every category :-)

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

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

Copyright © 2012 Achievement Catalyst, LLC

The Best President for the Stock Market

Guess Which President Has Been Best for the Stock Market? at CNBC.com reports that President Obama has presided over the greatest stock market advance among recent Presidents since 1976.   The results for the first 43.5 months of each term are:

Carter - 20%
Reagan - 23%
Bush 1 - 45%
Clinton - 51%
Bush 2 - -17%
Obama - 68%

The stock market has been great, for those that stayed invested in equities.  Guess my colleague was right when she told me that the stock market does very well under Democratic Presidents.   I should have listened to her :-)
For more on New Beginnings, check back every Sunday for a new segment.

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

Copyright © 2012 Achievement Catalyst, LLC

Stock Market is Defying Gravity

Last week the stock market continued to amaze me.   Depending on the index, the market is either near or has surpassed 52 week highs, despite the disappointing numbers for the August jobs report and continued sovereign debt risk in Europe.  The only explanation I have is that traders are pricing in the initiation of QE3 by the Fed after the FOMC meeting on September 12-13 since the implementation of QE1 and QE2 created significant market rallies. 

For now, it appear the only direction the market wants to go is up.  I want to believe, since I would benefit from a significant market rally.  However, I remain skeptical given the the issues in the U.S., Europe and China.   We are only one Lehman event away from a major downturn.   I just don't know when it will happen.

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

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

Copyright © 2012 Achievement Catalyst, LLC

Attitude Improvement

The recent market advance and equivalent advance of my company stock has improved our retirement  savings by about 14%, providing a 5.6% return for the year.  I am feeling positive about the retirement accounts for the first time this year.   Unfortunately, I know the gains may be fleeting since the potential of central bank intervention has been driving most of the market advances in 2012.

Hopefully, the market advance will continue past the September FOMC meeting and the German court ruling on the ECB bond buying proposal.   I would love the have the same positive attitude at the end of September :-)

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


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

Copyright © 2012 Achievement Catalyst, LLC

Being Patient With Our Savings

Low risk investments are paying historically low returns.  Savings account pay about 0.1%.  Even CDs up to two years are paying less than 1% interest.  The "experts" are encouraging savers to invest in riskier assets to increase returns.  They believe that low interest CDs/accounts may be the riskier asset due to inflation.

I remember the last time when savings and accounts were considered the riskier assets.  It was during the 80s and interest rates and inflation were in the double digits.  I recall being chastised for buying a five year 14% CD.  After all, many believed interest rates would continue to rise and that fixed rates investments would have negative returns after inflation.  As it turned out, interest and inflation did decline back to historical levels, resulting in an excellent return for the 14% CD.

Similarly, I believe that interest rates will return to historical levels since the Fed is targeting for a 2014 ending date, which may be extended to 2015.  Patience should eventually payoff. 

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

The Wealth Builder Carnival #90

Welcome to the ninetieth 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

Wallet Hub presents The Basics of Emergency Preparedness posted at Wallet Hub, saying, "Protecting your family and finances should start well before an emergency occurs. Not that we should dwell on the possibility of disaster, but, perhaps the old saying "prepare for the worst but hope for the best" shouldn't go unheeded."

Investing

Dividends4Life presents For Over 50 Years This Little Insurance Company Has Paid Big Dividends posted at Dividend Growth Stocks, saying, "Insurance helps you manage risk and provides you, and your loved ones, peace of mind. It is great when an insurance company can offer the same benefits to its shareholders. One insurance company in Ohio has provided its shareholders with a growing dividend for 52 years, and it just raised its dividend again..."

Vytas presents Top 8 stock trading tips posted at Trend, saying, "Investing in stocks is not gambling. There are rules that you have to follow. Nobody becomes a profitable stock trader over a night in the same fashion as nobody becomes a good doctor over a night. Good things have a good price tag on them. The article gives you 8 key stock trading tips that will help you to become a better investor."

S. B. presents Trailing and Forward Dividend Yield posted at Save Invest Give, saying, "The article discusses the advantages and disadvantages of trailing dividend yields and forward dividend yields, and recommends using both measures in your investment analysis."

Saving

Jonathan Milligan presents 3 Money Habits That Will Never Fail You posted at Simple Life Habits, saying, "Financial strategies come and go, but certain fiscal principles will be true with every generation. Here are 3 money habits that will stand the test of time."

Retiring

Super Saver presents Character Building posted at My Wealth Builder, saying, "Due to Great Recession and its aftermath, early retirement has been a character building experience for me."

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

Bad News Causing Markets to Advance

The U.S. markets were up on Friday and followed by a rise in Asia and European markets on Monday.  Why?  Because the economic indicators are bad enough to cause traders to expect another of quantitative easing by the Fed (a.k.a QE3) and other central banks.  Since quantitative easing creates more liquidity and lowers interest rates, risk assets such as stocks and commodities increase in price.  Thus, the stock market rises due to quantitative easing.

In 2012, it seems that the market has been anticipating quantitative easing by the central banks and the stock market has been rising most of the year, with a brief pullback in May 2012.   With the economic news getting worse throughout the summer, the markets have been rising with the expectation of imminent quantitative easing.

At this point, I am still skeptical of a longer term rally.   I will try to profit in the short term by keeping our materials stocks and exercising some options in my company's stock.  In addition, I will sell some gold jewelry if spot gold prices exceed $1800.  However, if the stock market advances sharply or continues to rise into October, I will consider putting about 10% of our cash back into the market.

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

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

Copyright © 2012 Achievement Catalyst, LLC