Brand Poem

Brand Poem

Brand Poem

I keep my eye on my finances like CVS, while also keeping my money in good hands like, All-State. In addition I take my money seriously like Johnson & Johnson is to safety. When you do this life’s good like LG because you are in control like Amazon is to online shopping. If you search all around like Google, then you will see how important it is to build a rock solid foundation like Prudential. If you keep it simple and easy like MoneyWatch101 you will have the power on your side like Allianz. Do not hesitate with your money, just do it like Nike, because then your money will slip away. We all should try harder like Avis to build savings year after year. Change up your money routine and think differently like Apple so that you can profit from it like CNN Money. If not you will be like AIG who thought they knew money, but in the end needed a hand out.  In conclusion, if you can hear me now like Verizon you will prosper with finances forever.

I wanted to keep it light this morning and give you a poem I came up with based on random brands while using their company Tag Line. I think I have used 90% of the brands mentioned above as they are readily available in my consumer market area. Some are global brands like Amazon and Apple, and this can relate to many countries as the brands tag line are the same. Have you used any of the brands mentioned above?

 

Comment if you love or hate the brand poem above, or if you can add to it.

 

Rich Uncle EL

Brands

5 Downfalls of Not Properly Budgeting

Downfall #1: You Could End Up Relying on Your Credit Card

If you don’t budget your money properly, then you probably don’t have enough money set aside for emergency expenses. So, what do you do when you need to get your car fixed, or you have to buy a new suit for a job interview? You turn to your credit card.

That wouldn’t matter so much if you only did it on occasion, but most people fall into a credit trap that encourages them to accumulate more and more debt. That explains why the average household had nearly $16,000 in credit card debt as recently as December 2011.

Downfall #2: You Can’t Save as Much for Retirement

When you have a budget that sets aside money for long-term saving and investment goals, you can afford to live your current lifestyle after you retire.

Without a budget, that’s unlikely. You might get a little help from your employer’s retirement package or your Social Security checks, but those won’t let you maintain your current lifestyle.

If you don’t budget, you could continue to work long after your peers retire.

Downfall #3: You Can’t Afford the Car You Want

Arrigo of Palm Beach Used Cars has plenty of vehicles with affordable prices, but they’re only affordable for people who know how to save money. People who don’t follow budgets don’t usually have a few thousand dollars sitting around that they can spend on used cars.

You can always rely on financing, but you still need a down payment. Without a sizeable down payment, you’ll end up spending more money on interest.

Downfall #4: You Can’t Afford Your Dream Vacation

When you live life without a budget, you never get to set financial goals that let you do the things that make living fun.

Without a budget, you don’t know how much money you can set aside each month to pay for your dream vacation. Instead, you end up spending all of your money on things that don’t matter. Even worse, you end up spending your income repaying the credit card company.

If you want to get the most out of life, you have to set a budget that lets you do more with your money.

Downfall #5: You Can’t Help Your Kids Succeed

You’ve undoubtedly heard about how distressingly fast tuition rates are rising. Families that follow strict budgets can plan for rising education costs by setting more money aside each month.

If you don’t have a budget, then you don’t even know how much money you can afford to set aside. That means a lot of kids will have a financial head start on life while your children struggle to pay student loans.

It could even mean that your kids have to move back into your home after graduation, especially if they graduate during a period of high unemployment.

What other downfalls do you see for people who don’t budget properly?

 

Stocks Vs Bonds

Hey guys do you struggle to decide between stocks vs. bonds when you are about to invest. Well you have to ask yourself a simple question? Do you want to be an owner of a company or a liability to a company. If you own stocks you are a minority owner by holding a specific amount of shares in a public company. This also means that you shall have voting rights for major board approved and shareholder allowed company wide decisions every year. I recently received a proxy for a company and two of the board members where being either reelected or replaced from one day to the next, depending on the shareowners votes. I have also received a proxy for me to vote and asked to approve CEO compensation packages. Stocks can also give you a quarterly dividend if you select a company that returns earnings to shareholders. But if you don’t then you will have to depend only on capital appreciation by way of stock price. Always remember buy low to eventually sell high.

If you own bonds the company owes you a specific amount for a specific number of years. In addition to this total amount owed to you, the company shall pay you Semi-annual coupon aka return on your investment. The average amount of years for a bond is either 10 – 20 years, but I have come across a few bonds that the term is 40 years.

If the company goes bankrupt bondholders have priority for getting their money back before stockholders something you should consider if you are deciding between the two investments. The majority of the time though most stockholders will never see a dime in a company bankruptcy situation. This is a brief synopsis between what it means for you as an investor. But if you want a more in-depth financial analysis between current stocks and or bonds see the links below.

CNN Money Article: Here

CNN Money Article about investing in Apple Stocks or Bonds: Here

 

I tend to invest in these in the order listed below:

  1. Index Funds
  2. Mutual Funds (10+ years of history)
  3. Bond Funds (Monthly dividend)
  4. Dividend Paying Stocks (Quarterly Dividend)
  5. REIT’s
  6. Bonds (Series EE and II only, I have never bought an individual Bond)

So this is my preferred investing style, but as I get more comfortable with investing and my discretionary play money grows, I will take a chance with individual bonds one day. I have bond index funds and bond mutual funds that give me the diversification I need with bonds as of this moment. I understand and have heard that municipal bonds offer tax advantages and a reliable income stream for many retirees. This is another consideration for my future portfolio to help me retire early. As of right now I am ok with the index funds, mutual funds, stocks, and Reit’s that I own.

What do you think about stocks vs bonds? Which do you prefer to invest in?

 

Rich Uncle EL

5 Steps to Prepare Your Finances for an Uncertain Future

This is a guest post.

Financial hardships can hit at any time. The best way to make sure you can weather the storm is to thoroughly prepare yourself for unexpected financial disasters ahead of time. These 5 steps will give you a solid financial foundation that can support you through an uncertain future.

 

Evaluate Your Budget

 

You must have an intimate understanding of your financial situation to prepare it for the future. If you have only a vague idea of what you spend on gas, groceries, bills, and entertainment each month, you may have a lot of work ahead of you. Comb through your budget until you can account for every penny you earn and spend. With the cold hard numbers in front of you, you may find many areas where you’ve overspent without knowing it.

Continue reading 5 Steps to Prepare Your Finances for an Uncertain Future

The Company you Keep

Do all of you believe in the saying you are who you are based on the company you keep. If your family and friends define you as per this statement, then if they are not on your level does that mean you will not grow or maybe they will hold you back? What if the coin was on the other side, and you have a group of friends who want to give you the boot because you are not winning as per their standards. Maybe you have not had success in a few years and feel you are in a rut professionally, does that qualify you to be a loser? This thinking came to me as I was reading a post that made a hidden reference stating people will be more successful if they are around successful people.

OK the question of the day is when do you know if you should move on, and find more successful people or if you should stay loyal to your original circle and hopefully they will surprise you one day by getting that PHD degree. I am struggling with finding the appropriate reasoning behind leaving your good friends that you get along with but may not be at your level. Maybe I am different from others who are cut throat type of individuals, or maybe since watching the movie Rudy I was forever changed. (90% of the time I root for the underdog unless it is my favorite team)

The second question is what if you are the person being dumped or pushed aside, what would you do? Keep attempting to hang out and communicate with a person disinterested in you or move on as well. I can’t believe it but this happens all the time here at my place of work. Certain circles of people hang every day and then in a month or two one person is suddenly out casted, thus not seen every day with the same crowd and is now eating lunch Hans Solo. Damn people can be rude at times, but do they have reasoning or not?  Can that sort of behavior lead to promotions and success in the office? I really do not know, but I have heard the richer get richer. People who invest in businesses and real estate join forces with others with the same mentality or for that fact the same wallet size. Do you know how awkward it would be to ask your buddy that has 50 K debt and a 30K income to invest in a 3 family house with you? Hello the answer will be 95% of the time a flat-out, I can’t do it buddy.

In Conclusion will you, if you strive for more find a circle of successful friends or stick with the original circle of friends you had? Maybe you have the drive and determination to achieve success by yourself and not involve your friends or family. Do you think Wal-Mart, Microsoft, or Apple would be the successful companies they have become without help from those close to the founders? I would assume no is a possibility to the answer. Everyday millions of no name insiders make things happen for companies and thus continue in making the entity successful.  A great idea is the starting point, but without a successful motivated and energized team the idea would not get off the ground.

That great show you see with all the great actors who bring you joyous TV magic do not do it by themselves. There are at least 30 + show staffers who make it happen behind the scenes. What does this crap have to do with the post? If you strive for success and are one step closer to a major milestone, do you trust some new business acquaintance to help you do business dealings or would you be more willing to trust a friend you have known for years.
I think I would probably trust somebody whom I have known for years. My one trepidation would be that a relationship can turn sour when you intertwine money with family / friends.

Comment if you agree with the company you keep post above or if you do not? Have you ever dropped a friend because they were a complete mess and didn’t strive for success?

Rich Uncle EL

Alternative Mortgage Lender

Alternative mortgage lender

How do you feel about getting milk, bread, grapes, and a mortgage all under one roof? This is the case for some Costco members who can now take advantage of the financial services to buy or refinance a home. This is not your typical mortgage lender, in fact I would place them as an alternative mortgage lender category. When I saw this ad in the Costco connection magazine I immediately thought I might use them to see how good they really are for providing a lending experience. Just to let you know I have never used Costco to book a vacation, buy a car, or any other service above grocery shopping so I am a bit skeptical. Costco has a great customer service reputation for in store members, but will this really translate well towards getting a mortgage done the right way. I have heard great things about their travel booking experience, but I am not sure that this great service will branch over to mortgage lending.

The picture that came with the ad shows a young couple with a huge smile standing next to a sold sign in front of a beautiful house. What a perfect picture scenario did they paint right there for all the club members to see, that you too can be a happy homeowner one day if you get a mortgage from Costco. Do you want to know what we really see in the ad? How much money will Costco really save me with fees? One thing that is synonymous with Costco is getting a lot for a bargain. After reading the ad I did see a great plug for the program on the side of the flier it basically stated, Costco set caps on fees and margins and the participating lenders will adhere to this policy. The lender fees cannot exceed $600 for executive members and $750 for all other members.

The whole process is done online, beginning with an initial application, and then from that point on you will deal with the lenders by email or telephone.  The next step as per the flier is selecting the preferred lender you will desire to work with based on the variables important for you. Examples for the selection process can be the lowest interest rate, lender / point fees, program term, and who is actually licensed in the state you want to buy in. I wonder how much of a cut Costco will get after each closing has been completed.

After filling out a small Quote Request form on the Costco Finance site, I selected two lenders with the least amount of fees, as you can see the rate offered is for a 30 year mortgage. Below you will see the disclosure information about the fees given after a quote request is submitted.

 

LenderProgramInterest RateAPRLoan Details
Conf 30 yr Fixed Full Doc

3.500%

3.529%

Mon. Payment: $988
Est. Total Cost: $825**
Conf 30 Yr Fixed Full Doc

3.500%

3.535%

Mon. Payment: $988
Est. Total Cost: $950**

** Estimated Total Cost is a combination of lender fees and third party fees. Lender fees include application, commitment and processing fees and are not to exceed $600 per transaction for Costco Executive Members, and $750 for Gold Star and Business Members. Third party fees are expenses for services which are required and are provided by someone other than the lender. Third party fees include items such as appraisal, flood certification, credit report, etc. Additionally, due to the complexity of state by state charges, Estimated Total Cost provided above does not include title, escrow, transfer tax, or recording fees.

After placing a quote request I would not mind getting a mortgage for 3.5% with fees totaling less than a thousand bucks.

Comment if you can see yourself applying for a mortgage loan through Costco?

 

Rich Uncle EL

5 Tips for First Generation College Students

This is a Guest Post.

About 30 percent of college freshman in the United States are first generation students, meaning they’re the first generation in their families to attend college. First generation college students don’t have access to the same parental advice and experience as other students. If this applies to you, know that there are many ways you can compensate for this and make sure you’re well-prepared for college just the same.

Plan Your College Path Early

College planning starts in high school and may begin as early as your freshman year. Focus on your grades, take part in diverse extracurricular activities, and get to know at least a few teachers who can give recommendations for you. Talk to your school counselor at least once a year about what you need to do to prepare for college. Students who wait until senior year often find that it’s too late to build the kind of application top schools will want to see.

Get Help with Admissions

Seek help with the college admissions process from your high school counselor or a college admissions preparation group. Since your parents may not have a lot of experience in this area, it’s a good idea to reach out to others who can help. Use online resources like get a real degree to help you find the best schools for your needs. Make sure you apply for scholarships and financial aid early and stay aware of all important admissions deadlines.

Don’t Hesitate to Tell Your Story

Many first generation college students either feel that their status isn’t relevant or feel somehow ashamed of their history. Banish these misconceptions. Being a first generation student is a point of pride. This sets you apart from many other college applicants and offers an effective way to set your application apart from the competition. Consider using your first generation status as the topic of your college essay. Explain your motivation for becoming a trailblazer in your family and how you plan to set an example for future generations.

Seek Support along the Way

Build a support system for yourself on campus so you’ll always have the help and encouragement you need to continue on your path to a college degree. Visit professors during office hours and get to know them. Join study groups and student organizations. Get involved and make the most of everything the college lifestyle has to offer.

Have a Post-Graduation Plan

Many first generation college students come from low-income families. This can make it difficult to launch into your dream career, even after you’ve successfully graduated from college. Work summer and part-time jobs when possible and start a savings account to help you get started on your own after graduation. Carefully consider the steps you’ll need to take to get from graduation to a lucrative career so you’re ready to continue moving forward once you have your diploma in hand.

About 89 percent of first time students leave school within six years without a degree, but you can keep yourself out of this majority. Prepare well for your college experience and you can graduate with great pride in your momentous accomplishment.

 

Rich Uncle EL – I agree with the post above and many students feel shy seeking help and that can be a big mistake. I cannot stress enough how important it is to look for scholarships and avoid debt at all costs by having a part-time job. Thus students can pay for school on a monthly basis with a payment plan.

Luxury Cars on the Cheap

Luxury Cars on the Cheap

Lexus Hybrid Models (CTH or ESH only)

Audi A4 or A6 (Smaller Engine only)

BMW 1 or 3 (V-4 version only, with no extras)

Infinity G

Vintage Muscle Cars (Not mint, but close to it)

Acura

These are the cars that if you are out of debt, have a great income, and currently exceed retirement estimates for your age that you might want to get to live a little in the lap of luxury. These are all luxury brands but the cool thing is these models are not too expensive.

All the vehicles I mentioned above will cost you less than 50K for new versions and around 25K for used versions. I am not one to recommend splurging on cars given this is a financially savvy blog, but if you finally achieved a new status with personal finance then I do not see anything wrong with getting any of these models if your income is consistent and above average. One Caveat I recommend is not to do it while adding debt. The right way to buy cars is to save up as much as possible and buy something you can afford.

They all can get you from point A to B, while saving you some gas compared to other equally priced luxury cars. The only exception to the list is the vintage muscle cars as most will be V-8 engines with horrible fuel economy, but boy will you look cool riding around in one of those puppies. Some auction sellers have them at great prices.

Obviously the Lexus Hybrids will get you great fuel efficiency now but later the battery issues might be a problem. In comparison the German cars which include Audi and BMW, their engineers are making great strides with diesel engine options that could one day trump the hybrids class leading MPG records.

First thing to consider is to only buy these if the purchase price consists of less than 25%-50% your annual income. Percentages must play a big role in life and if you learn to apply them to cars you will be well off and be very financially efficient.   Do not be like the normal college graduate who goes out and buys a car that equals 75% of their annual income. In addition to this error most of those graduates just landed the job, and thus do not have at least 2 years of job security. This can lead to major issues with finances early on in life. Buying a car that equals 50% or more off annual income is not smart personal finance.

Any other cars not on this list are either priced too high, offer horrible fuel efficiency, have reliability issues, or have extremely expensive 5 year cost to own stats.

 

Purchase Price = 25K

Annual Income must = 100K or greater

Equals 25% price to income ratio

Purchase price = 25K

Annual income = 50K

Equals 50% price to income ratio

Can you now see the difference in the percentages? One allows you less risk than the other.

Comment if you agree with the luxury cars on the cheap list. Also if you agree with the purchase price to income ratio I recommend above?

Rich Uncle EL

 

Pic credited to Lexus Co..