How to Get Free Money With Just a Few Minutes of Your Time

March 08, 2012

We write a lot in this blog about relatively painless way to save money. But what about relatively painless ways to make extra money? No, I’m not talking about some get rich quick scheme, nor do I mean spending the serious time it would take to work a part-time job or start a business on the side. I’m referring to free money that we often literally throw away. Continue reading “How to Get Free Money With Just a Few Minutes of Your Time”

Investing for People Who Hate Investing

March 01, 2012

If you’re like most people, you may not know much about investing or quite frankly, even care to know. Perhaps you’re only vaguely aware of what’s going on in the stock market and rarely look at your 401(k) performance. The last thing you want to worry about is researching and monitoring mutual funds. Yet, you’re responsible for choosing and managing the investments that will help determine whether you can retire early or end up having to eat cat food in your retirement. Continue reading “Investing for People Who Hate Investing”

Is Inertia Costing You Money?

February 23, 2012

Let’s face it. We human beings are generally creatures of habit. We tend to do the same things over and over even if we aren’t always thrilled with the result, something Albert Einstein called the definition of insanity. Continue reading “Is Inertia Costing You Money?”

How Not Eating a Marshmallow is Key to Financial Success

February 16, 2012

I recently read this interesting Reason magazine interview with New York Times science writer John Tierney, co-author of the new book Willpower: Rediscovering the Greatest Human Strength. The interview starts with an explanation of the famous “marshmallow test” experiment in which 4-yr olds were given a marshmallow and told that they could eat it but that they would get two marshmallows if they waited 15 minutes before eating. The kids who were able to resist eating the marshmallow not only got a second one but ended up doing better in school and in their lives in general. Continue reading “How Not Eating a Marshmallow is Key to Financial Success”

Using Your 401(k) in Retirement

February 09, 2012

We recently received this  question on the Ask a Question to a Financial Planner section of our blog:

“I have $35k in bank card debt+$30k in retail credit debt. Bank interest range 13/23%, retail 18/29%. I’m 63, and have $40k in a 401acct where I work. I want to retire this year with two company pensions ($1750/month) and early SS($2400/month, both wife and me). I need to get rid of some monthly payments of debt, where should I use my 401 money toward this goal. All my debt is unsecured, my home is paid off, health is good. I’m ready to go fishing.” Continue reading “Using Your 401(k) in Retirement”

How to Plan for an Extreme Early Retirement

February 02, 2012

My most popular blog post (and the most popular one on our whole blog) called “How to Be Financially Independent in 5 Years (No Matter What Age You Are)” was about a concept called “Early Retirement Extreme” in which people save very large percentages of their income to be financially independent before they even turn 40. For example, if you save 75% of your take-home pay and earn a 5% real rate of return, you would have enough savings in just 5 years to maintain that standard of living for the rest of your life (assuming a standard 4% safe withdrawal rate of your initial savings amount and adjusted each year for inflation). While this would probably not be realistic for most people, the more you can save, the sooner you can be financially independent to use your time as you see fit. (The author of the blog that inspired my post actually ended up going back to work but out of enjoyment rather than financial necessity.) But in addition to the challenge of living on much less income than we’re used to, there are some other considerations facing anyone looking to retire extremely early: Continue reading “How to Plan for an Extreme Early Retirement”

Are You Paying Too Much On Your Phone Bill?

January 26, 2012

We often review people’s budgets  to help them find savings and one area that I consistently find people spending more than they probably need to is on their phone bill. The average landline bill is probably only about $20 but most people also have a cell phone bill that averages about $50 per month. As people switch to smartphones with more expensive data plans, that cell bill will only increase. The average smartphone user now spends over $100 per month. Continue reading “Are You Paying Too Much On Your Phone Bill?”

When it Comes to Financial Advice, Follow the Money

January 19, 2012

As the election year begins, there’s a lot of concern about money in politics and how it can be used to corrupt politicians and buy votes. But politics isn’t the only profession in which money can be a problem. The same can be said for financial planning too. Continue reading “When it Comes to Financial Advice, Follow the Money”

Back to Basics: What Exactly is a Bond?

January 12, 2012

Last week, we discussed how to invest by buying a stock and becoming an owner of a company. This week, we’ll take a look at becoming a loaner instead. The first experience most people have as a loaner is with a bank. You loan the bank money by making a deposit, your money earns some interest, and you can withdraw it. You can also go to the bank to borrow money for something like a car or a home. Continue reading “Back to Basics: What Exactly is a Bond?”

Back to Basics: What Exactly is a Stock?

January 05, 2012

With the start of a new year, it might be a good time to take a step back. As financial planners and educators, we can get so caught up in the complexities of things like employee benefits, various investment strategies, and tax laws that sometimes we forget that sometimes people just really need to understand the basics. I recently asked a group of workshop participants what exactly a stock was and one person said it was just a piece of paper. I thought about it later and realized that his answer reflected many of the misconceptions people have about investing (aside from the fact that we don’t even really use paper stock certificates anymore). In fact, there’s a surprising amount of insight you can gain just from examining some of the basic investment vehicles. Continue reading “Back to Basics: What Exactly is a Stock?”

How to Turn Your Investment Lemons Into Lemonade in the Next Two Days

December 29, 2011

We usually wait until April 15th to worry about taxes, but the time to do something about them is mostly well before that. Some examples include contributing to your employer’s retirement plan and flexible spending accounts. But there is also one thing that you can do right now if you have investment losses outside of your retirement plan.(I know I do and if you have any taxable investments, you probably do too). Here’s how you can turn losses into extra cash on April 15th: Continue reading “How to Turn Your Investment Lemons Into Lemonade in the Next Two Days”

Surviving the Holiday Season

December 22, 2011

Opening gifts may be fun but opening the credit bills next month won’t be. No one wants to start off the New Year deeper in debt, but too often that’s exactly what happens. Here are some ways to survive the holiday season without turning into the Grinch: Continue reading “Surviving the Holiday Season”

7 Gifts That Can Keep on Giving

December 08, 2011

Rather than give away more fish this holiday season, why not teach them how to fish with a gift of financial education? After all, New Year’s is coming up and better money management is one of the most common resolutions. (A gift about losing weight may not go over so well.) While unfortunately you can’t exactly buy our services as a gift for someone, here are 7 personal finance books that I’ve found to be particularly insightful: Continue reading “7 Gifts That Can Keep on Giving”

Is Education the Next Bubble?

December 01, 2011

That may sound like a strange question but it’s one that a lot of people are beginning to ask. What makes a bubble a bubble is that it’s hard to tell when you’re in it until it’s too late. Let’s take a look at the housing bubble. It was based on widespread faith in home ownership as a key pillar of the American Dream that had paid off well for previous generations. It was then fueled with artificially cheap credit and government incentives that led millions of people to stretch their budget and buy as much home as they could with the expectation that rising home prices would make it a great long-term investment, even if they were barely able to afford those mortgage payments. Besides, owning a nice big home is so much fun! Substitute education for housing and student loans for mortgages, and you pretty much have the current state of higher education. Continue reading “Is Education the Next Bubble?”

7 Things to Give Thanks For (even in this economy)

November 24, 2011

Happy Thanksgiving! As a financial planner, I talk to a lot of people with all kinds of financial difficulties and I try to write about how to solve some of those challenges in this blog. But today is different. Thanksgiving isn’t about dwelling on what we don’t have, but about giving thanks for what we do. With the economy in the dumps, you may not feel that you have much to be thankful for, especially when it comes to your finances, but here are 7 things to consider: Continue reading “7 Things to Give Thanks For (even in this economy)”

The Little Financial Engine That Could (But Only If You Use It)

November 17, 2011

I’ll let you in on a little secret from my days as a financial adviser. When you sit down with an adviser, they treat you really well, laugh at all your jokes (even if they’re not very funny), and ask you some questions about your current financial situation and goals for the future. Then they put all that information into a software program that calculates some projections, and may even make some recommendations. Guess what they do with that information? They charge you a fee for it or use it to sell you something. Continue reading “The Little Financial Engine That Could (But Only If You Use It)”

The Biggest Myths About Social Security

November 10, 2011

In talking to people all over the country about their retirement, there are two big myths I’ve noticed when it comes to Social Security. The first one (which I hear less and less) is that there’s an account set up somewhere for you that you’ve been contributing to with your tax dollars. Unfortunately, Social Security doesn’t work that way. Instead, your tax dollars are immediately paid out to current beneficiaries with the expectation that future taxpayers will pay for your benefits when you retire. Continue reading “The Biggest Myths About Social Security”

Travel Tips from a Frequent Traveler

November 03, 2011

One of the things I do a lot as a planner at Financial Finesse is travel. I have to go up to our office in LA for training sessions (training never ends at Financial Finesse, even for the trainer) and meetings. I also travel all over the country to facilitate workshops, meet with employees for individual consultations, and occasionally film a video. As you might have picked up from reading my blog, I consider myself to be quite frugal and like to get as much value from my money (or Financial Finesse’s in this case), so here are some travel tips I can share with you for your next trip: Continue reading “Travel Tips from a Frequent Traveler”

Estate Planning for the Young, Single, and Not So Rich

October 27, 2011

When we think of estate planning, we usually think of something that only older, wealthy people do.  After all, how many of us think of ourselves as even having an “estate” to plan?  The fact is that if you own anything at all, you’ll have an estate when you eventually pass away.  The only question is what will happen to it. Continue reading “Estate Planning for the Young, Single, and Not So Rich”