Community College Graduates Salaries Higher than Bachelor Degrees

 Community college graduates out-earn bachelor's degree holders reports that 30% of Americans with an associate's make more than those with a bachelor's degree.  Associates degrees at community colleges have the added benefit of costing less both on an annual basis and in total.  However, the article does point out that while people with bachelor's degree make an average of $500,000 more over a lifetime than those with with an associate's degree.

Give numbers of bachelor's degree graduates with high student debt and no/low paying jobs, getting an associate's degree first, working and then getting a bachelor's degree may be a prudent financial choice.

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 © 2013 Achievement Catalyst, LLC

Importance of Princpal Preservation

In a recent seminar, I was reminded of the importance of protecting our principal against losses. The table below show the amount of gain needed to recover a loss.

Importance of Principal Preservation
Decline	Gain to Break Even
-10%	11%
-30%	43%
-50%	100%
-70%	233%

So a 10% loss only requires an 11% gain to break even, which is doable.  However, as losses grow, the gain needed to break even grow even faster.  For example a 30% loss requires a 43% gain to recover the loss.   When there is a 50% loss, a 100% gain is needed, which is extremely difficult to do.

That's why it's important to minimize losses.  Big declines require prohibitively large gains to recover what was lost.

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 #115

Welcome to the one hundred fifteenth 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 A Temporary Perfect Retirement Work Situation posted at Ready To Be Rich, saying, "Due to my health situation, my part time seasonal job is the perfect retirement job. My boss and the company are allowing me to choose my own hours and work on a limited basis."

Investing

Dividends4Life presents 14 Stocks Taking Their Dividends Up A Notch posted at Dividend Growth Stocks, saying, "Throughout history there have always been great companies that stand head-and-shoulders above their peers and the competition. They are loved by their shareholders, hated by the competition and known by all. Just as all great companies have something in common, great dividend companies also have something in common. All great dividend companies have at least one characteristic in common – they consistently raise their dividends each year..."

John Schmoll presents 4 Reasons Why Having an Investment Plan Will Save Your Butt posted at Frugal Rules, saying, "Investing in the stock market can be difficult for many, especially if they have no plan in place. An investment plan can help guide your investing decisions so you’re working smarter and not harder, which will in turn help your long term investing approach."

Living Frugally

Jeff Moore presents 30 Blogs to Help You Go to Prom on a Budget posted at Babysitting Jobs, saying, "When you begin planning for the big night, it’s a good idea to sit down with your daughter and discuss her expectations for the event and set a budget that the two of you can afford."

Bryan presents House Poor – How Much Home Can I Afford? posted at Gajizmo, saying, "Don't be "house poor" - it's a common mistake and one of the simplest things people do to avoid destroying their personal finances. A mortgage is probably an American family's largest monthly expense, and it likely won't be paid off anytime soon, so purchasing a home you can afford and still have money left over to invest is essential to your ability to build wealth and a retirement nest egg."

Taxes

Bill Smith presents TurboTax Saves You Time And Money posted at 2012 Taxes - Free Tax Filing Options, saying, "Again it is that time of the year that you dread; tax time. It may seem like you just filed, but now you are running out of time to complete and submit your IRS 2012 taxes."

Shelby Martin presents What Are the Consequences For Not Giving Your Nanny a W-2 Form? posted at GoNannies.com Blog, saying, "If you’re considering an under the table arrangement that will leave your nanny with no W-2 at the beginning of the year, there are some dire consequences you’ll want to take into consideration first."

Bill Smith presents The Benefits Of Filing Your Taxes With TurboTax 2013 Or TaxBrain posted at 2014 Taxes, saying, "If you have previously filed your taxes by going to a CPA, you really need to look into online software like TurboTax 2013 or TaxBrain."


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

Getting Ready for the Sequester Implementation

Surprisingly, I have heard as much blaming for the sequestration, especially with it being only a few days away.   Maybe, I've become jaded to the political posturing.  Maybe, the politicians are working together on a solution.   Maybe, a 2.4% spending reduction just doesn't really matter, even though the White House has implied that essential (instead of non-essential) services would be cut first.

My main interest is in the potential impact of sequestration on the stock market.   At this point, I don't know whether sequestration will be a positive or a negative.  So I'm just going to guess the effect will be negative and continue to sell my stocks that are doing well and wait for a near term buying opportunity.

For reference, my batting average for being correct on an event driving market direction is less than 50%.  So contrarians may want to take the opposite view  :-) 

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

Preparing for the End (of QE)

Bernanke's Challenge: Prime Markets for the End of QE reports on the difficult task of informing investors and the market of the transition out of QE.   Doing it poorly could significantly disrupt the stock markets.  Doing it well could still disrupt the market.  It may be a no win situation for Mr. Bernanke and the Fed. 

In addition, Mr. Bernanke is expected to step down at the end of his term in January 2014, meaning that his successor will be responsible for the QE wind down.  Based on my recollection, the markets have been more volatile and negative during the transitions of Fed chairs.  I don't expect this transition to be any different from previous ones.

2013 may be the final year for the current bull market.

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

How Government is Different from the Middle Class

The recent economic contraction and the upcoming sequester have highlighted for me how government thinks and acts differently  when it comes to financial decisions.   Here are some noticeable differences.

Economic contraction - With the Great Recession of 08/09, most middle class people cut back on spending and borrowing, either because of necessity or as a precaution to preserve funds.  The government took the opposite approach by increasing spending via borrowing more money. 

2% spending reduction - With the expiration of the payroll tax cut, the middle class has experienced a 2% reduction in income and, therefore, spending.   The middle class solution is to cut back in a non-essential area, e.g. eating out, entertainment or luxury items.   With the sequestration, the government will experience a 2.4% spending reduction.   The government solution is to cut back essential services.   For example, President Obama has already warned that sequestration will cause a reduction in teachers and firemen, which I don't understand since these position are funded by local and not federal taxes.

I know if I handled my finances like the government, I would soon be on a path to bankruptcy. But then again, the government can print more money when it needs it.

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

A Temporary Perfect Retirement Work Situation

Due to my health situation, the employer for my part time job has allowed me to set my own working hours for the past two months.  My employer has been very gracious to allow me to do so.   I have enjoyed working an appointment only basis for limited hours.   In addition, I think I have been more productive since I have been very focused in the few available work hours.

However, I know this can't last forever.  As my recovery has progressed, I'm moving back to a  more regular work schedule.   So, it won't be long before my perfect retirement work situation ends.

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

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

Copyright © 2013 Achievement Catalyst, LLC

A Million Isn't What It Used To Be

When I was a child, a million dollars was a lot of money.  Back then, someone with a million dollars would be rich.  A million dollars would earn $50,000 a year at 5% interest, which once could easily live on since the median family income of $6,900.     I don't think we knew anyone that was a millionaire, i.e. someone that had a net worth of a million dollars.

Due to inflation, a million dollars isn't worth as much today.    A million dollars earns only $10,000 at 1% interest, compared to the 2012 median family income of $50,500.  Today, housing prices are much higher than when I was a child.  For example, the house my parents owned when I was a child cost $28,000.    That same house has an estimated value of $333,000 according to Zillow.com.  So accumulating a million dollars in net worth is more achievable nowadays.   Finally, I know lots everyday people who I estimate have over a million dollars in net worth.

Perhaps, the new benchmark for being wealthy is having 10, 50 or 100 million dollars.   While I know some company executives that may have 10 million dollars in net worth, it is not likely I know anyone with 50 or 100 million dollars in net worth, which would make those values equivalent to being a millionaire when I was a child.

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

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

Copyright © 2013 Achievement Catalyst, LLC

Looking for a Near Term Buying Opportunity

Like many others, I expect the stock market to pull back soon.  There has been a terrific stock market rally for the past couple months and the upward trend will likely pause soon.  In addition, some sectors like small cap biotechs, retail and gold are already starting to decline.  

For now, I expect the decline will be short and shallow.  My challenge will be to make some purchases after the decline starts since the main fear is the market will fall significantly further.    To overcome the challenge, I will focus on buying more in stock for positions that I have partly purchased or that I have sold at the top of the trading channel. That way, I will be increasing my stake at a lower price than if I had made the purchase all or once, or buying back a good stock at a lower price than when it was sold.

In addition, I may take the opporutunity to put funds in a managed account or to create an ETF portfolio if there is a significant correction.

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 © 2013 Achievement Catalyst, LLC

The Wealth Builder Carnival #114

Welcome to the one hundred fourteenth 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

Fitz Villafuerte presents How To Price Your Service as a Freelancer posted at Ready To Be Rich, saying, "One of the most difficult tasks that freelancers face is pricing their service. Here's a few tips on how to know the value of your work."

Jules Wilson presents Why You Need to Diversify Your Income Sources posted at Faithful With A Few, saying, "Diversifying your income is the best way to protect your financial future in this economy. Learn why you should and how best to diversify your income sources!"

Insuring and Protecting

R.J. Weiss presents Personal Umbrella Insurance -- How Much Is Enough? posted at Weiss Insurance Agencies, Inc., saying, "When it comes to purchasing personal umbrella insurance, when should you start to purchase it, and how much is enough?"

Investing

Dividends4Life presents 15 Stocks Not Missing Their Opportunity To Increase Dividends posted at Dividend Growth Stocks, saying, "In everything we do, we always want to be the best or be associated with the best. You never hear fans yelling, ‘We’re number 2, we’re number 2′, while holding two fingers in the air. The same is true when selecting dividend stocks. One attribute of the very best dividend stocks is a long history of consecutive dividend increases..."

Bryan presents Best Short Term Investments posted at Gajizmo, saying, "Even multi-billion dollar corporations are always trying to maximize the returns of their short term cash and investments, so why shouldn't you? Here is a comprehensive list of all your short term investment options, from money market market accounts and Treasuries to "I-Bonds" and property tax certificates. Find where you feel comfortable parking your cash for the short-term."

Living Frugally

Cherry Liu presents How to Save Money on Your Cable Bill When Times are Tight posted at House Sitting Jobs, saying, "In a troubling economic climate that’s still struggling to rebound, more and more families are finding themselves in a position that requires them to cut corners wherever they can in an effort to save money."

Shaun Rosenberg presents 10 Reasons To Give Minimalist Living A Try posted at Shaun Rosenberg, saying, "Cutting down on your expenses doesn't have to be a bad thing. Here are some reasons to try living frugally"

William presents Zero-based budgeting for your household posted at Card Guys Blog, saying, "If you have tried to reign in your spending and get control of your unwieldy household finances, but still the credit card balance and other loans are heading upwards, you might be ready for a tool many governments and companies have used successfully – zero-based budgeting."

Mr.CBB presents Becoming a Single Homeowner – Part 1 “The Plan” posted at Canadian Budget Binder, saying, "Becoming a single homeowner has been a trend lately with the ladies leading the way. Learn about the unique requirements of how the single person approaches buying a home."

John Schmoll presents Why You Should Just Say No to Refund Anticipation Loans posted at Frugal Rules, saying, "Refund Anticipation Loans are marketed as a way to get your tax refund quicker and just in a few days. The main problem is that they’re full of fees as well as the desire to spend the money once received."

Retiring

Super Saver presents Remaining Cautious with Retirement Savings posted at My Wealth Builder, saying, "Our retirement savings have benefited from the late 2012 to early 2013 stock market rally. However, if something seems too good to be true, it probably is. The market rally of the past few months falls into this category. br />

Taxes

Jason presents Best Online Tax Preparation Software posted at WorkSaveLive, saying, "To take the guesswork out of which online tax software is right for you, we've taken a tremendous amount of time to examine the best and most popular online tax preparation companies to determine which has the best software for your particular tax situation See the differences between TurboTax, H R Block, TaxACT, and FreeTaxUSA"

David de Souza presents Which countries pay the most tax? posted at Tax Credits, saying, "If you think that you pay too much tax in the US you should compare what you pay to other countries in the world. This blog post looks at which countries pay the highest tax."


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