What Personalities make up a PF Blogger

 Have you ever wondered what personality traits make up personal finance bloggers? Well I will mention 4 below and maybe you can let me know if you feel the same or if you have other traits I didn’t mention that you want to share with all of us. See below for the traits I have uncovered in the personal finance world. Continue reading What Personalities make up a PF Blogger

Top Ten Reasons not to Save Money

Hey today we have a light-hearted post for you guys. I am going to share the Top ten reasons why you should not save money ever. If you agree then you are facing one of these things below or thinking about one of these ten reasons, but if you disagree then you are a fan of the savings mantra. I think from time to time it is fun to joke around a bit.

Continue reading Top Ten Reasons not to Save Money

Income Sources

 

Most of you all already know that you can earn income from many different ways. But maybe you didn’t know the actual categories each income source belongs too. I wanted to share with all of you these income sources and give you a brief description and hopefully you can understand how you earn your money better. Personal finance is hard to figure out for many people, but this post will get you one step closer to understanding how one income source favors the other.

 

Income Sources:

Earned
Portfolio
Passive

 

Brief Descriptions of each Source:

Earned – Income derived from working for someone else or from a business you own or are a part of. This type of income is taxed the highest out of all the other incomes. It is also the biggest chunk of tax the government makes off individuals for GDP Revenue. In certain situations this type of income can be taxed at and up to 50% of the gross amount you make. The reason being that in this income type you have to pay Social security and medicare taxes.

 

Portfolio – Income derived from investments including dividends, interest, royalties, and capital gains. When you put your money in a savings account and the bank pays you for having it there that is considered portfolio income. If you write a book, then the royalties of the book sales are considered portfolio income. The tax implications from these types of incomes can be confusing, but dividends and capital gains taxes usually are up to a max of 20% and royalties can be taxed like self-employment ordinary income.

 

Passive – Income made of work in which you do not actively participate in. Examples include Rental real estate and silent business arraignments. This type of income is what people call gravy because you do not have to put your blood, sweat, and tears into it. Building a rental real estate empire is considered passive income for tax purposes, but believe me when I tell you managing something like a rental empire does take a lot of participation unless you hire a management company and reduce your time commitment.

 

In the United States people make the mistake to think that income from dividends are considered passive income and this is a mistake, the IRS clearly defines that type of income as portfolio.  In my opinion I believe it is mandatory to try to build income from all three sources and then to begin to eliminate earned income and focus on growing the portfolio and passive income sources. If you can eventually grow your portfolio and passive income to cover all expenses then you are finally considered financially free.

 

Comment to let me know what are your thoughts to the three types of income sources listed above.   

 

Always consult with a tax professional if you have a tax related question or if you are receiving income from different sources as mentioned above. If your taxes are complicated always consult with a certified CPA professional.

 

RichUncle EL

Friday Quotes XVIII

 

 

 

It is that time of the week again where we revisit motivating quotes to fuel the weekend and get you to save some money before it gets wasted away. The theme of this post is cleverly done by looking deep in yourself and seeing your destiny. If you already know the path and purpose of your life then you are doing better than many people.

At times people just get in a position of doing what’s comfortable and in a routine, that they do not see or miss out on what is their true calling. “Life can pass you by”, as quoted thousands of times and in many movies is an excellent quote to tell you to wake up and do what your destined to do. I am ready to see what the future holds for me and my readers as tomorrow is always a new chapter in a book that has a clear ending. But what will your ending story be, a great legacy or a sad drama? The key is in your hands and the shape of it, is a heart that guides you everyday.

 

 

Best Quotes:  

– Follow your heart because it fuels your dreams and purpose in life. – RichUncle EL

– Growth comes from within – Dream it, See it, Live it. – RichUncle EL

– A stress free and balanced life is better than a pot of gold – RichUncle EL

– Relationships that matter and add value to your life are worth more than any financial return – RichUncle EL

 

 I just wanted to strike a nerve in how we all can take advantage now of what is right in front of us. Do your best to supersede with your life and achieve something before it is too late. I am always looking for motivation from within myself and from others.

 

Comment and let me know anything you would like to share regarding this topic and the quotes listed above.

 

 

RichUncle EL

Hurricane Sandy

 

It is November 8, 2012 and right now the northeast area which includes NJ, NY, and parts of Connecticut were affected by this hurricane. The destruction in this area is by far the worse storm in years and possibly in all of history for this area. In times like these resources have become scarce and it is getting worse everyday. Gas shortages due to power outages have made travel by car almost impossible for those without a full tank. Because of this gas shot up from $3.25 a gallon to $4.00 a gallon. I predict if things get worse that gas will be in the 5 dollar range soon. One thing that the media outlets are stating is that people with half a tank are waiting for two hours to fill up their tanks which causes even greater lines. I feel if you do not need it why clog the gas station lines? Fill up only when you are close to a quarter tank or less.

What does this all mean, resources are worth more than the dollar right now. Things like batteries, gas, food, water are on high demand and those people who have them have bargaining power in their hands. The almighty dollar can only get you so far if the local gas station all of a sudden runs out of the most sought after resources in this storm. How about if the people in charge of placing a price on these items want to hike up prices. Because of this now you can not afford to pay for those resources then the next person in line will pay for those items.

Preparation is key and this is why the time is now for you to get your money life in order and purchase those items that can help you weather the next storm when it hits. Things you can get now are the basics and can make life a bit easier.

 

Emergency Items to have on hand :

  • Candles
  • Portable Gas Tanks
  • Emergency backpacks
  • Flash Lights
  • Battery Operated Lantern

 

 

Emergency Items to get right before a Storm:

  • Water
  • Fill up on Gas Tank
  • Non-Perishable Food (Canned, Dehydrated, Dry Foods, Freeze- Dried)
  • Batteries
  • Cash (Go to the ATM before hand)

 

 

This storm has given all of us here in the Northeast a wake up call and it is time to take it seriously.

 

Comment and let me know how you are prepared and are more in tuned now that you have been through a major storm like Sandy.

 

RichUncle EL

 

Reader Money Questions II

 

Hello Guys, I wanted to start a new series of posts based on you the readers. I added a new questionnaire page under suggestions to give you a guideline as to what questions you guys can answer to help you come to terms with the money issues you are experiencing and how by answering these questions you can improve your finances. At the end of the questionnaire I will give you feedback if it is necessary and I hope you all enjoy this new series we all will embark on.

 

This is the second series of Moneywatch1o1 questionnaire and hopefully I will keep getting more going forward.

 

This response is from Meghan, and if anybody else is interested you can copy and paste the questions and then email them to me at moneywatch101@gmail.com.

 

Moneywatch101 Questions and Answers:

  • Do you have any money issues in your life right now?
I don’t think I have any real money issues. I have 13,000 left in college loans. I will have this paid off by March. I graduated in 2 years this December from Purdue and I have been able to pay off 30,000 in loans in about 2 years once march hits. I still love to spend money so I think I could work on buying what I really need and not spending so much on random items that I just want.
 
 
  • Do you have any Debt?
Yes, the only debt I currently have is a 13k student loan.
 
  • If you do, how do you plan to overcome these issues?
I have been really focused on meeting my financial goals to get this paid off and will have it paid off about a year earlier then I thought I could.
 
  • Do you have a written budget you like to follow or do you just wing it?
I have an extremely detailed excel sheet that shows where all of my money is going including 401k and Roth IRA
 
  • How much are you currently saving a month for any goals?
I currently have 15 k in savings (5 k of that I plan on throwing at my loans come march as my final payment. I currently put 5% in my 401k and the rest goes to my loan. If I was not paying loans I would be saving 30-50% of my income a month but since I have an emergency fund of 15k I don’t see the need to save any more.
 
  • How confident are you with investing your Money?
I am very confident about 401k and Roth IRA investing. Once march hits and I no longer have debt I will be putting 10% to 401k (almost half the max) and maxing out roth IRA which will be a little bit more than 15% of my total income going to 401k . Then the rest I plan on filling two different savings accounts for the next 3 years. A 20k emergency fund that I won’t touch and a 30k car fund just in case my car ever dies. This is where I get stuck. I will have 30k just building up each month. I feel like I could invest that but I still want to be able to pull that out if ever my car dies on me.
 
  • Do you currently want to learn more about investing ideas?
I would love to!
 
  • Do you think about Retirement when you save your Money or other goals?
I have been investing in my retirement 5% since I was 21. I turn 24 in January and I will start putting 15% in. If ever I can afford to put the max 401k in I will hopefully by age 26.
 
 
 
Thanks a bunch for your feedback!
 
 
 
 
Moneywatch101 Response and Feedback:
 
1. Do you have a steady job and are not in any risk of losing it? Can your skills and networking capabilities find you another job very easily? If you answered yes to both questions I would immediately pay the 13K in student loans from the savings account and be done with it now. Then you can use all the extra money plus your past student loan payment amount to re-build the savings account faster than ever. Obviously a layoff can come at anytime, but if there are no signs of this and your company is doing good in these times, then no need to have such a huge savings account earning nothing while saddened with debt. If you pay off your student loans you will gain an immediate return on your money by saving the interest charges plus lot more in the long run.
 
 
 
2.  I would hold off placing 15% in the 401K until you have your emergency fund back to a comfortable level for you. I will suggest about 4-8 months of living expenses for the emergency fund. Once you reach your desired level of security you will know it.
 
 
 
3. Most financial gurus state that people spend way too much for their modes of transportation and in your case 30K for a car replacement fund seems too high. I understand the need to drive something new and cool looking, but there is a time and a place for that later. The safe level to buy a car that will not break the bank is 10-15% of your annual income should be spent on a car. So if your income is the national average of around 50K then they suggest you only spend $7500, on the other hand if your income is 150K then you can spend about $22K for a car. This is a standard guideline, but given the fact I do not know your expenses and living situation.
 
 
 
4. Ok if you abide by the car percentage purchase then you can invest your future money in better places and have your money working overtime for you. Rather than losing it in a depreciating thing like a car that loses value faster than the speed of light. Always remember spending should be relative to your income levels. I once made an expensive car purchase and I am still paying for it with regret.
 
 
 
5. Once you fully get the emergency fund back to preferred levels and your future car purchase fund with an amount equal to 15% of your annual income, then you can open an online brokerage account and start investing in ETF’s or Index Funds. This will be above and beyond the 401K and Roth IRA you already invest in, given you can put about 5% into this. Doing this will allow you to diversify some of your money into non-retirement type of accounts that are less strict.
 
 
 
 
 
I hope you can use the information and use it to take advantage of your money life. Having a solid financial situation is better than not being on solid financial ground. The future you, will thank you by making the right money decisions now. I think you are doing great for somebody your age and if you continue all of your financial goals will be realized.
 
 
 
RichUncle EL

Friday Quotes XVII

 

 

Friday’s Best Quotes:

 

– When all hope is gone look to others for a greater sense of guidance. – RichUncle EL

– Resources drained and scarce all of a sudden make money abundant – RichUncle EL

– Money can buy anything except an item that is sold out and in high demand. – RichUncle EL

 

 

The theme of today’s post is on the desperation side of how crazy things can get when a storm affects a heavily populated area. I hope people can relax and find the patience in this time of need for many of the  fellow Northeastern citizens affected by this storm.

I am seeing long lines everywhere, stories of people looting homes, examples of road rage to the extreme, just because everyone is starting to worry about not having enough. The government needs to step it up and fix things quick thus avoiding  a major situation with storm affected citizens. Also the average person can give a helping hand now. Because the desperation is at an all time high and every little bit of help counts.

People have lost their homes, their possessions, their food and some have even lost a loved one. These quotes today have really expressed how my area of the world is feeling this week. The pictures really say it all as people are short on words due to the destruction of hurricane Sandy.

 

 

 

RichUncle EL

The Ups and Downs of Life

 

 

 

This idea just came to me like a bolt of lightning and I thought why not talk about some of the good things and bad things that have taken place in life throughout the years. I tend to remember only the major things that have happened to me as a normal person should, and why not share them with all of you as a way to reveal a little more about myself. I will attempt to keep things in a financial aspect, but I might sneak in a few that are not about money.

Life does not revolve around money, but this website is based on perfecting good money management behaviors. So I will list both life goals and money goals.

 

The Ups of Life and Money:

1. I graduated from 2 Universities – Bachelor’s / Master’s Degrees in Hand.

2. The day I received my Toastmaster’s Competent Communicator for completing 10 speeches.

3. My first non spam approved comment on my blog. (Whoo Hoo)

4. Holding the free and clear title for my cars, thus having them paid for. (Three times)

5. Finally achieving credit card Debt Free Status. (Peace Out Chase and Citi)

 

The Downs of Life and Money:

1. School Loan Debt for my Master’s

2. Not Investing enough in the 2008 – 2009 market crash. (Could have made a killing)

3. Buying an overpriced gas guzzler for 32K when my income was only 45K.

4. Not finding Dave Ramsey / PF Blog World sooner.

5. Accumulating a bunch of useless stuff. (Wasting income on nothing)

 

OK I had to think a bit about the downs in life as it is always harder to remember bad things. I tend to sway on the optimistic side of life. Do you always think about the good things or bad things? By doing this you guys now have a greater sense of who I am and what I have accomplished to a small degree. I hope to keep adding to the ups in life in the near future but wish to avoid all the downs.

I wish we all could eliminate or avoid the downs in life, but it makes us in someway better individuals as it builds up character. After a down event you come out stronger in overcoming obstacles in life. Do you agree? Also sometimes a down event leads to a major up event in life. For example rags to riches stories of somebody getting laid off and then starting a crazy money making business. I have read a few of those over the years.

 

Have you recently gotten over a down event in your life? I hope you get motivated to make your own ups and downs list. If I can recall any more ups and downs later I will do a part two to this post.

 

Stay safe everybody  in the East Coast as a major storm is headed into my neck of the woods.

 

Rich Uncle EL

 

Pic credited to Jay Fine.