Dividends Aren’t Enough

April 18, 2011

Dividends are a beautiful thing.  Last week I wrote about my mother-in-law’s bond fund that paid her a steady stream of dividends over the years – twenty five years to be exact.  Every month, the dividend came like clockwork and she spent it.  Now she is using the funds to pay for her care – she is 97.  This strategy worked for her because she has other funds invested in other types of vehicles.  Here is the problem with using the dividend strategy as the only strategy—even if the dividend doesn’t increase, the cost of goods and services do.  So the dollar buys less and less each year. Continue reading “Dividends Aren’t Enough”

Dividends Matter

April 11, 2011

I thought about the power of dividends when I worked on my mother-in-law’s taxes.  She has been selling off an investment to help pay for her care and as the one who helps her with her taxes, I had to find her basis (what she originally paid for it) to report it on her tax return.  She’d owned this mutual fund as long as I’ve known her and that means she has been taking a dividend from it for almost 20 years.  When I dug into it, what I found was that she had a loss – her initial investment not only hadn’t grown but was less than she put in.  What a disappointment! Continue reading “Dividends Matter”

Retirement Preparedness: Don’t Work Until You are 70

April 04, 2011

I read an article today titled, How to Collect Social Security and Still Keep Working?,  and found myself yelling at the computer screen in a rant similar to what I have seen my husband perform during sporting events when his team is losing.  It is out of character for me but this article got me going.  The article gives details of how much you can earn at 62 and still collect your social security and goes on to explain how income from working affects your income after you hit your full social security age (for me that is 67)  but the whole premise to me is backwards.  We CAN collect Social Security and still keep working if we time it correctly and we don’t make too much money if we are under our “full” retirement age.  But seriously, do we really want to? Continue reading “Retirement Preparedness: Don’t Work Until You are 70”

Are You Prepared for an Emergency?

March 28, 2011

When hurricane Katrina hit, the newspapers reported a location that has the greatest risk of flood from levees failing – Sacramento California where I live.  My husband and I bought a house on a flood plain.  I know it sounds stupid but after the federal government made improvements to the levees, they deemed them safe enough to withstand the 100 year flood.  Based on that assessment, housing development, retail shops, and schools were built and 70,000 people moved to the area.  After the hurricane in Louisiana, the Federal Army Corp of Engineers reassessed the levees to less than 100 year flood protection.  In other words said, “Just kidding.  There really is a flood danger. The initial assessment was false.”  The area should never have been developed. Continue reading “Are You Prepared for an Emergency?”

Commercial Fishermen Teach Financial Planning Strategies

March 14, 2011

Earlier this week I flew home on Southwest airlines – got the A ticket so I had an aisle seat and my bag stowed and I was all settled in for my flight.  A young man in his early 30’s with a 9 month old baby was the last one to get on the plane.  There wasn’t much of a chance that he’d be able to find bin space for his bag and get situated with the baby so the young man next to me (named Steve) and I did the bag switch around, and seat switch to make it all happen so the dad could sit comfortably for the flight and not have to check his carry-on bag.  I ended up sitting between them. Rich (with the baby) was a talker and we three got to know each other on the flight home and surprisingly I learned something new about finances from these travelers. Continue reading “Commercial Fishermen Teach Financial Planning Strategies”

Healthy and Wealthy

March 07, 2011

I always had a suspicion that health and wealth had a direct correlation but it’s not quite what I expected.  It comes down to cash – cold hard cash.  Who knew?

A recent study published in the Journal of Consumer Research cites that people who pay for groceries with credit or debit cards buy more impulsive and unhealthy items than those with cash.  This may be due to the “pain of payment” according to the researcher Manoj Thomas. Continue reading “Healthy and Wealthy”

Retirement Preparedness: Save Forty Years then Spend Forty

February 28, 2011

Think about it.  We work for forty years of our lives starting from our early twenties to sometime in our sixties.  Then we have to support ourselves for the rest of our lives.  In other words, save for forty then spend for twenty, thirty or even forty years depending how your cards are dealt.

In my case, the longevity hand I was dealt isn’t the strongest.  Continue reading “Retirement Preparedness: Save Forty Years then Spend Forty”

Retirement Preparedness: Move Toward Retirement Not “Away” from Working

February 21, 2011

Retirement is not simply ceasing to work but rather a step toward something – a whole new phase in life.  Many people don’t realize that until it is too late.  A friend of mine was discussing this with me over the weekend.  He works for a utility company in upstate New York as a project manager.  He was exclaiming that these guys who recently retired are coming back to work for him as part-time retirees. Continue reading “Retirement Preparedness: Move Toward Retirement Not “Away” from Working”

Retirement Preparedness: What Employees Need to Know About Investing

February 07, 2011

There is information that is nice to know and information that you need to know but what you really need to know is — the difference.  For example, my husband is a history buff with an avid interest in politics.  When we have friends over and we are discussing politics or world affairs, he often pops up with not just the year a politician won a race but who ran against him.  I am always amazed at his memory and wonder, “How does he remember that?”   It’s crazy!  Even though I am always impressed, I do know that is the kind of information that is nice to know but in our work and in our lives, this is not vital information that we need to know. Continue reading “Retirement Preparedness: What Employees Need to Know About Investing”

Financial Wellness: Getting Started by Taking it from Concept to Practice

January 24, 2011

Physical wellness is a much easier concept to understand than financial wellness but they are actually intertwined together since finances are the leading cause of stress and stress is the leading cause of illness.  This hit me this week because I decided to try something new (that’s my New Year’s resolution — try 52 new things) so I went to a yoga class called Yin Yoga. Continue reading “Financial Wellness: Getting Started by Taking it from Concept to Practice”

Bring Your Lunch to Work and Send Your Kid to College

January 17, 2011

Bringing your lunch to work will help you save enough to send your kid to college?  Yeah, right.  There have been books out in the past few years talking about how if you make your coffee at home you can retire on the proceeds – David Bach coined the phrase “The Latte Factor.”  Many people thought that made sense in the 90’s when the market went up almost every year.  They could take the difference and invest it in mutual funds.  But, does it really make a difference to scrimp and save? Continue reading “Bring Your Lunch to Work and Send Your Kid to College”

Financial Education: 3 Important Check Ups to Do in an Hour

January 10, 2011

There are 8760 hours in a year – 730 in a month with about 240 of them spent sleeping.  That leaves about 490 hours to do what we want. We spend quite a few of those at work and it probably seems like we spend the rest of them waiting in line or being on hold. We can put a few of those hours to good use with some actions that might not be very urgent but are very important none the less.  Here are a couple of important insurance check-ups to do this week that take about an hour each. Continue reading “Financial Education: 3 Important Check Ups to Do in an Hour”

Financial Education: Estate Planning — Three Things to do in an Hour

January 03, 2011

Have you seen the new show – that re-make of Hawaii 5-0?  Here is the premise: A divorced cop (James Caan’s son) from New Jersey moves to Hawaii to be near his young daughter – add some hip native Hawaiian cops and skimpy bathing suits.  Doesn’t sound like a winner, does it?  Well if you guessed that it was almost unbearable to watch, you were correct.  Did I watch the whole show?  Yes.  I am not sure why but it was a complete waste of time. Continue reading “Financial Education: Estate Planning — Three Things to do in an Hour”

3 Actions to Take in an Hour to Prepare for Emergencies

December 27, 2010

In my last blog,  3 Actions to Take in an Hour to Build Wealth, I pointed out that many of us waste at least an hour a week.  I came up with three very important actions that take an hour or less to do but can significantly improve your finances.  I am writing this blog immediately after the last one and will predict right here that I will lose the playoffs in my fantasy football league.  First of all because my team isn’t that good and secondly because I am not a good manager.  I will admit that I have only gone this far by luck.  So in other words, I have free time.  What will I do with the extra hour? Continue reading “3 Actions to Take in an Hour to Prepare for Emergencies”

3 Actions to Take in an Hour to Build Wealth

December 20, 2010

It’s very obvious to my friends and family that luck plays a dominant part in our fantasy football league.  Why?  Because I am tied for second place and will possibly make the play offs.  Everyone knows that I am not skilled enough to even determine if I am getting the wool put over my eyes on a basic trade and truthfully, I don’t know the difference between a wide receiver and a tight end.  Last year during my first season, my team finished dead last. Continue reading “3 Actions to Take in an Hour to Build Wealth”

My Favorite Tax Deduction

December 13, 2010

When you’re a business owner or an independent contractor, of course you can write off everything associated with your business.  But what if you aren’t?  I have to say that I never really wanted to run my own business– I love being an employee with my W2 at the end of the year.  An entrepreneur?  Not me.  I pride myself at being an “intraprenuer” where I enjoy creative projects like writing and being the host of “your money minute,” as well as educating employees to become financially secure and helping the company to grow. Continue reading “My Favorite Tax Deduction”