Be Bold

“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma, which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice, heart and intuition. They somehow already know what you truly want to become. Everything else is secondary… ” Steve Jobs 2005 commencement speech at Stanford

When I was growing up, getting a job with a good company, staying for an entire career and then retiring was a great option.    People could choose to remain with a company for 30 years or more years.  It was also a safe option.  There wasn't a lot of personal risk to work for a large company. 

By the time I graduated from college, a long term career at a big corporation was not a given any more.  Many of my classmates were working at their third or fourth company by our ten year reunion.  From a career standpoint, it was getting  as risky to work for a large company as for a small company or being self employed.

Nowadays, working for a large company is no longer a safe option.  Jobs at large companies can disappear as easily as those at a small company.  In fact, being self employed may no longer be the most risky option since a person probably won't fire himself :-)

So I fully agree with Steve Jobs for my daughter's generation.  There are no longer safe career options.  No jobs are guaranteed.  The jobs may not even be in the U.S.  I will encourage our daughter to listen to her inner voice, to take risk while she is young, and look for what she truly wants to become.   Especially, since playing it safe is no longer safe :-)

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

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

Copyright © 2011 Achievement Catalyst, LLC

The Wealth Builder Carnival #49

Welcome to the forty-ninth 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 them into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now onto the Carnival:

Earning

simond presents Making Money From a Website posted at True to Business, saying, "Article about how to earn revenue from a website"

Marie presents Ways to Earn Extra Money to Put Aside posted at Money Spending Mommy, saying, "Whatever the reason, there are many ways you can earn extra money. Here are some ideas for your consideration."

J.B. presents 100th Post! posted at My University Money, saying, "We're proud to be 6 months old and have completed our 100th post, thanks for all the support everyone!"

Nabil Gulamani presents Why Relationship Based Selling is Very Important For Your Business posted at SuccessAtReach — SuccessAtReach, saying, "Find out why you need to work on your relationships with all your clients for long term business success"

Kyle Taylor presents 5 Weird Ways to Make Money Recycling posted at The Penny Hoarder, saying, "Collecting cans for the recycling center is not the only way to make a buck with your recyclables. Check out these 5 new, very weird ways to make extra money recycling…"

Tarik presents How to be a Lean Mean Operational Machine posted at Success starts today, saying, "3 easy steps to feel wealthier and be able to achieve your goals faster."

John presents College and Future Earnings: What’s the Connection? posted at Wallet Blog, saying, "We've all heard the saying that people with college degrees will earn more throughout their lives than people who only have a high school education -- but does having a framed piece of paper on your wall necessarily mean you are destined for a bigger payday?"

Investing

Hemant Beniwal presents 15 Types of Risk that affect your Investments posted at The Financial Literates, saying, "What comes to your mind when someone says RISK or this investment is risky? Loosing the principal amount. No there are more than 15 types of risks – that you must understand before Investing"

Trent Green presents How do Corporations Work? The Basics Regular People Need to Know posted at Money for Regular People, saying, "If you’re going to invest in corporations through stocks, mutual funds, a 401(k) plan, exchange traded funds (ETFs) or some other means, it’s important to understand the basics of how they work. In keeping with that theme, the purpose of the article below isn’t to provide an exhaustive, technical explanation of what a corporation is and how one works, but to focus on fundamental principles related to corporations that you need to understand so that you can be a more informed, knowledgeable investor (or even a potential business owner!)."

Dividends4Life presents 9 Dividend Stocks With A Low P/B Ratio posted at Dividend Growth Stocks, saying, "A declining market is what value and dividend investors long for. There have been times in the past where I struggled to find stocks worthy of purchasing. Now, the challenge is to pick the best available stocks that will maximize my chances of future success. When looking for value priced stocks, the Price-To-Book (P/B) ratio is one that I like to focus on."

Tyler presents Building Wealth Using Dividend Paying Stocks posted at Debt Reckoning, saying, "A great look at using dividend-paying stocks and a reinvestment strategy to build wealth."

Steve Zussino presents Is Netflix (NFLX) stock headed for the bottom? posted at Canadian Personal Finance, saying, "One of the main reasons I don’t like to invest in technology companies or technology services anymore is that the next ‘big thing’ can come along and convince the consumer to switch brands.An example is Netflix (NFLX).Their Unique Selling Proposition is that they are an easy way to view a huge library of videos and you can watch on a variety of devices and you do not need to buy cable anymore at an affordable price."

Kanwal Sarai presents Watch Out! A High Payout Ratio Could Get You in Trouble posted at Simply Investing Blog, saying, "Smart investors always check the payout ratio, it only takes 5 seconds and it could save you lots of money in the long run. The Payout Ratio is the ratio of money a company gives out to shareholders compared to how much money the company keeps for itself. This ratio is very important because it can be a good indicator of how much you as an investor can expect to receive in the future."

Mutual Fund presents What is a Mutual Fund? posted at Mutual Fund, saying, "Here is an article that explains in simple terms what is a mutual fund. If you have no idea about mutual funds, this article will explain that."

MoneyCone presents Vanguard’s Most Expensive Funds posted at Money Cone, saying, "The most expensive funds are not necessarily the best performing ones."

Ken Faulkenberry presents Top Global Investment Trends to Invest In – 2011 posted at Arbor Asset Allocation Model Portfolio (AAAMP) Blog, saying, "Included are some of the top global investment trends that should be included in your portfolio asset allocation in 2011 and beyond."

jared h presents Behavioral Economics posted at RICH AS CHOCOLATE, saying, "Investing in the stock market can stress your emotions. Learn the science of behavioral economics, and you will better handle the ups and downs of an unstable market."

Living Frugally

Jon Elder presents Why a 15 Year Mortgage is a Smart Move posted at Free Money Wisdom, saying, "Here are some things to consider when trying to choose between a 15 year and a 30 year option on your mortgage:"

Steve Ryan presents The Frugal Bubble; How Long Will It Last? posted at Smart Wealth, saying, "A sense of fear has returned to households around the world. People are once again worried about losing their jobs, their houses, and their businesses. For many, being frugal is not an option, it’s a survival tactic."

James presents Learning How to Shop for Food posted at Why am I Bleeding Money?!?, saying, "I hope you enjoy!"

Marie presents Pros and Cons of Selling Your Car to Settle Debts posted at Money Spending Mommy, saying, "If you own a car, you might consider selling it and using the proceeds to pay off debts. That is certainly an option, but it’s one that should not be taken lightly. Here are some of the pros and cons of selling your vehicle to settle debt."

DJ presents 6 Tips For Setting Your Budget Priorities posted at The Family Wallet, saying, "Setting priorities makes budgeting much simpler. But even this is difficult for many household money managers. Here are some ways that you can make priority setting a little easier:"

Jonathan from Debt Loans presents 3 Delightful Benefits of Giving Up Television posted at Frugal Living, saying, "With time and money being needlessly squandered on something that is not known to be a productive pastime, you may want to look into getting rid of your television service. Not so sure about that? Check out the amazing benefits you can gain from this simple move:"

Retiring

DJ presents Are You Saving Enough For Retirement? posted at The Family Wallet, saying, "The earlier you start saving for retirement, the more painless it will be. For each year you postpone saving, you’ll have to save a little more each month to reach your goal."

Carlos Sera presents A Required Rate Tale posted at Financial Tales, saying, "The real question that should be asked is—How much stock should investors hold? Old or young has nothing to do with it. So, how much stock should investors hold? The answer is—as much as required to earn the returns necessary to achieve your goals and is why I call this tale A Required Rate Tale."

James Bush presents Withdrawing from Your 401k Early (If You Absolutely Have To) posted at 401k Calculator, saying, "It's often not a good idea to tap into your 401K but if you have made the decision to do so here are some things to consider."

Taxes

Mike Piper presents 2012 Tax Brackets and Standard Deduction (Projected) posted at The Oblivious Investor, saying, "Now that the relevant CPI figures have come out, we can calculate the tax brackets for next year (provided no new legislation is passed)."

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 © 2011 Achievement Catalyst, LLC

Wait and See Strategy

For now, I'm sitting on the sidelines and waiting to see how the European sovereign debt crisis unfolds. Two technical analysis blogs that I follow posted SPY -- at best still bottoming, worse to come?  and S&P 500 Chart – Do or Die Moment.  I agree, the direction is not very clear and there will be a lot of volatility.   To me, it's not worth the risk to be in the market.  The downside risk is higher than the upside potential.

Yes, I may miss a big short term advance.  However, I am avoiding the gut wrenching declines like last week.  To me, trade off is worth it:  I sleep better at nights.   Besides, with interest rates so low, the U.S. may risk the issue that Japan is experiencing-- deflation.   So being in cash feels pretty good right now.
 
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 © 2011 Achievement Catalyst, LLC

Will Stock Dividends Increase Signficantly?

Today, I read an interesting article comparing the S&P composite dividend yield to corporate bond and Treasury yields.  Historically, until the 1950s, dividend yields have been higher than bond yields.  Since the fifties the reverse has been true.  With record profits, it seems to me that companies may start paying higher dividends again.  They probably won't get as high as corporate bond yield, but still higher than than the current level.

Of course, an alternative for dividend yields to increase is for stock prices to decline significantly.  While not a pleasant thought, this is also a likely scenario given the current economic situation.   My guess is a both scenarios are likely to take place: dividend increases and a decline in stock prices.  So I will continue to wait before putting funds back into stocks.  And when I start buying, I will purchase primarily dividend paying stocks.
 
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 © 2011 Achievement Catalyst, LLC

Keeping My Mind Off the Stock Market

Besides getting paid regularly, working a temporary full time job had one other major benefit.  It kept my mind off the stock market during the summer gyrations. I haven't had much time to follow the stock market, the debt crisis or the President's new job plan.    My strategy of selling most of our stock holdings in June 2011 probably also helped :-)

Now that there is little over a month left in my job,  I have more time for current events reading.  So I'm paying more attention to the stock market.   However, I'm still going to avoid worrying about the stock market volatility.  After all, there isn't much I can do about the stock market, the economy or the political situation. 

So I'm going to continue not worrying about the stock market even after I retire again.  
 
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 © 2011 Achievement Catalyst, LLC

Protected Our Daughter's College Accounts

In early June 2011, I cashed out 2/3's of our daughter's mutual funds in her college accounts.   At my spouse's request, we kept 1/3 of the accounts fully invested in the mutual funds.  As it turned out, I sold off too soon.  The invested account gained enough in July to be 7% higher than the cash accounts.    It's too bad that we didn't sell the account invested  mutual funds at that point.   In August, the mutual fund account lost its 7% advantage and then some.  The invested account is now about 15% below the cash account.

The college accounts have a one time per year reallocation restriction.  So I won't be able to move back into mutual funds until 2012.  But given the current performance of the stock market, I think I can wait that long before reinvesting funds in the stock market.
 
For more on Crossing Generations, check back every Thursday for a new segment.
This is not financial  or investing advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC

Getting Ready for Opportunity

"Good things come to those that wait." ~ Proverb

I've been patiently waiting for the Dow to hit my "start buying slowly" signal of 10,200.   There have been times that I've thought I made mistake and have been tempted to get back into the market.  However, I'm still convinced that the reasons that made me worried still exist.   For now it's still an easy decision to stay out of the market.

I don't think the economy and stock market will be bad long term .  So I'm looking for the opportunity to get back into the market.  However, I will continue to be patient and wait for my buy points to be crossed.
 
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 © 2011 Achievement Catalyst, LLC

You Can Learn A Lot by Just Asking

Today's experience with my corporate credit card company reminded the importance of checking multiple times if the answer doesn't seem to make sense.  After four calls, I finally think I got what is the right answer.  In my experience, the correct answer will be offered more times which lets me know it is the likely right answer.
 
I find this strategy of checking multiple times with different knowledgeable people also works for financial strategies.  By talking to several different people and comparing answers, I get a better idea of what may work better for my specific situation.   So I ask a lot, listen a lot and then determine what I will do.
 
For reference, this approach does not work well with specific stock tips :-)
 
For more on Ideas You Can Use, check back every Tuesday  for a new segment.

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

Copyright © 2011 Achievement Catalyst, LLC

2012 - Taking the Summer Off

After a couple years of losing my summer vacation, I've decided to keep June, July and August of 2012 open and free from work commitments.   In the summers of 2008 and 2009, I was relatively free from any work commitments.   In the summer of 2010, I over committed to working four part time jobs, including one nearly full time job.   In the summer of 2011, I worked a  temporary full time job which caused me to pass on a summer vacation due to work demands.

In both years, the money was good which is why I accepted the positions.  In 2010, I earned about 50% of our annual expenses.  In 2011, I will earn about 78% of our annual expenses.  However, the money wasn't worth the trade off of time lost during the summer.

So in 2012, I will cut back the part time work to around  5-6 hours a week during most of the year and 15 hours a week during the winter seasonal financial services part time job.  Thus, I will likely only earn about 10% of our annual expenses.   But I will get my summer back :-)
 
For more on Strategies and Plans, check back every Monday for a new segment.
This is not financial  or retirement advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC

The New Economic Normal

I haven't seen much written on the topic, but I think the U.S. economy experienced the bursting of a lifestyle and wage bubble during the great recession.  Americans can no longer expect to have the same lifestyle and wages as before the recession.   Until people realize the old wage and old lifestyle are not coming back quickly, we will continue to be in an economic rut. Unfortunately, some people are holding out from the workforce until they can achieve the previous wage levels. 
 
I know some people blame the issue on exporting jobs overseas.  That may be a contributing factor.    I think the bigger issue was that the increasing demand for higher lifestyles over the last two decades (housing and goods) kept wages high.  When the mortgage crisis eliminated demand for housing and goods,  the lifestyle bubble popped.    That was followed by a pop of the wage bubble since demand was down.   Now people who have lost jobs are unlikely to find new jobs at wages close to what they used to make.

It appears to me the next bubble to pop will be the retirement bubble.  Many public pensions are underfunded and require increases in tax revenue to make payments.  Many private retirement accounts are down due to the stock market decline.   Social Securtiy will be unable to cover full payments within 20 years. 

Is the U.S. doomed?  I don't think so yet.   We just have to get over the denial, recognize the reality and focus on what is needed to get back on track.  The U.S. and its economy can be very resilient, if they are allowed to do so. 
 
For more on  New Beginnings/New Realities, check back every Sunday for a new segment.

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

Copyright © 2011 Achievement Catalyst, LLC