Author: MoneyWatch101

Tax Tips for 2011

      

      This is the perfect time for some tax tips before you file your 2011 taxes. I was given the link by a family member who lives and breathes taxes. He suggested that my readers take a look at this prior to filing as to help all of you get through this stressful time frame aka tax season. Just follow the steps listed below for a smooth experience with the tax man. 

     Remember time is money, the faster you file the faster you can get the check in the bank and be able use it to invest, pay down debt, or go to the mall and buy yourself a new wardrobe with ten sneakers to match. Whatever you do just remember that the deadline this year is April 17th and if you have any tax issues do not hesitate to consult with an certified CPA professional. Also this information and much more is always available at: http://www.irs.gov/

Thanks

Top 10 Tax Time Tips

IRS TAX TIP 2011-01, January 03, 2011

It’s that time of the year again. The income tax filing season has begun and important tax documents should be arriving in the mail. Even though your return is not due until April, getting an early start will make filing easier. Here are the Internal Revenue Service’s top 10 tips that will help your tax filing process run smoother than ever this year.

  1. Start gathering your records  Round up any documents or forms you’ll need when filing your taxes: receipts, canceled checks and other documents that support income or deductions you’re claiming on your return.
  2. Be on the lookout  W-2s and 1099s will be coming soon; you’ll need these to file your tax return.
  3. Use Free File  Let Free File do the hard work for you with brand-name tax software or online fillable forms. It’s available exclusively at http://www.irs.gov. Everyone can find an option to prepare their tax return and e-file it for free. If you made $58,000 or less, you qualify for free tax software that is offered through a private-public partnership with manufacturers. If you made more or are comfortable preparing your own tax return, there’s Free File Fillable Forms, the electronic versions of IRS paper forms. Visit www.irs.gov/freefile to review your options.
  4. Try IRS e-file  After 21 years, IRS e-file has become the safe, easy and most common way to file a tax return. Last year, 70 percent of taxpayers – 99 million people – used IRS e-file. Starting in 2011, many tax preparers will be required to use e-file and will explain your filing options to you. This is your chance to give it a try. IRS e-file is approaching 1 billion returns processed safely and securely. If you owe taxes, you have payment options to file immediately and pay by the tax deadline. Best of all, combine e-file with direct deposit and you get your refund in as few as 10 days.
  5. Consider other filing options  There are many different options for filing your tax return.You can prepare it yourself or go to a tax preparer.You may be eligible for free face-to-face help at an IRS office or volunteer site.Give yourself time to weigh all the different options and find the one that best suits your needs.
  6. Consider Direct Deposit  If you elect to have your refund directly deposited into your bank account, you’ll receive it faster than waiting for a paper check.
  7. Visit the IRS website again and again  The official IRS website is a great place to find everything you’ll need to file your tax return: forms, publications, tips, answers to frequently asked questions and updates on tax law changes.
  8. Remember this number: 17  Check out IRS Publication 17, Your Federal Income Tax on the IRS website. It’s a comprehensive collection of information for taxpayers highlighting everything you’ll need to know when filing your return.
  9. Review! Review! Review!  Don’t rush. We all make mistakes when we rush. Mistakes will slow down the processing of your return. Be sure to double-check all the Social Security Numbers and math calculations on your return as these are the most common errors made by taxpayers.
  10. Don’t panic!  If you run into a problem, remember the IRS is here to help. Try http://www.irs.gov or call toll-free at 800-829-1040.

Investing Strategies

Did you know the average person will need at least 750K-1.25M of assets to retire without any financial worries? When it comes to investing many people do not know how to diversify assets in order to take advantage of the most favorable route for their finances. The endless possibilities can be daunting but with research anybody can find the light at the end of the financial tunnel. If your company offers an excellent 401k/403b plan your first option should be there, but what if you wanted to diversify your options after you have contributed up to the match. Many online financial companies offer their services for a fraction of the cost a broker will end up costing clients. Companies like ShareBuilder, Schwab, TradeKing, and TD Ameritrade make investing fairly easy with very user friendly websites and low fees. For example TradeKing charges only $4.95 to trade stocks. Aside from the normal investing options of 401k’s, mutual funds, and Roth IRA’s, you can get a feel for a different aspect to investing that will eventually increase your cash flow and assets.
4 Non-Traditional Investing Options:
–Exchange Traded Funds (ETF’s): These are traded like stocks but are highly diversified like mutual funds with very low fees. ETF’s always follow a specific sector for example: Healthcare or Consumer Staples. 
–Municipal Bonds: These offer tax free advantages and are considered safer compared to corporate bonds. These pay a semi-annual coupon and return your initial principle investment at the end of the term (Most are 10 years or more). This website http://www.investinginbonds.com/ provides very detailed information on bonds and how to go about investing with bonds. Do a little research on the municipality’s debt structure before investing.
–Dividend paying Stocks: Given how paltry rates are in this economy, some dividend paying companies average about 3% or more and can give you an extra paycheck on a quarterly basis, unless you decide to reinvest the dividend with the purchase of more shares. Companies like Johnson & Johnson and General Electric have been around for over half a century. Utility companies offer many great dividend choices as well.
 
–Annuities: An investment product marketed to those nearing retirement, but are highly frowned upon by many financial gurus in the media as having high fees and having high risk associated with these products. But these products can give investors a set income for life after purchasing. Look only at highly reputable insurance companies for these risky products for example, MetLife/Prudential. Don’t forget to look at the fine print associated with these products and avoid products which have a 5 year deferral time to get the monthly income stream. 
Very important fact before buying dividend paying stocks is to research the P/E ratio, forecasted future earnings, and the Dividend Yield as these three details might give you a glimpse to how the company will perform in the future and how much you will actually make on a quarterly basis. The preferred Price to Earnings ratio financial experts in the field recommend is between 5% -20%, anything higher is considered overvalued price per share.

In concluding never forget to Watch your money!
Always remember that even though investments are protected by the Security Investor Protection Corporation (SIPC) there is always a certain degree of risk involved with any type of investment. So be well informed prior to making any decision. Calculation figures were provided by bankrate.com

Free Book

Hello,

I would like all of you to take advantage of a free offer from amazon books. If you click on this link,  http://www.amazon.com/Be-Dividend-Millionaire-Low-Risk-ebook/dp/B004G60FXQ/ref=sr_1_3?s=digital-text&ie=UTF8&qid=1326238887&sr=1-3  you will be able to read this book with a kindle enabled device or smart phone. Download the kindle app on your phone and set it up through amazon.com and sync it to your phone. This book is going to be my next read and I hope you can read it also. It is based on dividend investing and the basics behind this style of investing. If you have any questions please email me.

Once you have set up this sync between amazon and your cell phone then you can get free books all the time available through amazon.

Comment back if any of you have read this book.

Thanks,

January Calendar Update

     Every month I will send this list out so that we all can be financially smart shoppers in this media overloaded society. Some of the products will be repeated from last month and my assumption is that those products are based on seasonal buying patterns. 


     This month the list is a bit more practical as cookware and winter clothing is something people can actually get great deals on after the holiday season. Just a quick FYI for all of you looking to buy some Music Cd’s, the record companies are looking at eliminating Cd’s forever. I assume by next year Cd production will cease to exist as digital downloading is becoming more prevalent and cost effective for the music industry. So if you need to have the physical Cd of your favorite artist jump on it soon as it might not be around for long.

January Calendar Update:

-Bedding-Blankets/Sheets
-Cd’s/DVD’s
-Computers
-Cookware
-Houses/Condos
-Linens
-Swimwear
-Toys
-Treadmills
-TV’s
-Winter Clothing


     In this list the only item I would consider buying is a computer/laptop as the one I am currently using is on the verge of extinction. I also see something on the list that most people might be shocked about; houses/condos. I assume that most people would never think of buying a home in January, but it makes sense because buyer competition will be minimal compared to the spring/summer peak season for home buying.  


     Just a reminder please make sure to only shop for items that you need not want. This makes all the difference with people going on emotional shopping binges. Also only pay cash or debit as credit should never be used unless you want to be a slave to the banks. If you can not control your shopping and you have a desire to always spend every last penny, just avoid the malls or shopping centers. This alone will help you make strides in curbing your spending.

OK now it’s your turn to comment back and let me know if you need or want anything on this list or something not on the list.

PS: Don’t forget to download GEOQpons App on your smart phone and check if they have any coupons before purchasing your products. This would qualify as another smart way to watch your money! 

Rent or Buy?

     
     I did some research on what kind of calculations would help a person decide whether to rent or buy a home. People need to move for many reasons for example: career changes, educational pursuits, proximity to family. All of these are perfect reasons why a person might switch area codes and the next question depending on your finances is if one should rent or buy?  Obviously most of you think that if you have the money and your finances are in order that the reasonable thing would be to buy, but the smart thing to do is to research first. I have listed two tests below to guide you:


Test 1 
Step One: Pull several multiple listing statistics from the local Realtor on the specific town. 
 Step Two: Find out the average annual appreciation over the past ten years for the town
 Step Three: Find the average days on market in the town.   




     For example, if the houses are going up 3% a year and it takes them 6 months to sell, you probably don’t want to buy in that area because you’ll probably lose money and have a hard time selling. Therefore you will only consider renting if you had to move to that town. If house values go up 15% a year and sell in a couple weeks, then you should buy because you will make money in about four years of living in the area. 


Test 2
-Multiply expected annual rent times 15
-If purchase price is more than the 15 X rent expense- Rent
-If purchase price of home is less than 15 X rent expense – Buy


Consider what is the average rent for the town as well as what the median purchase prices are for homes in the town.  The test most real estate experts use is if the house is 15 times more than the annual rent then renting is more economical.      


Now you have two approaches to apply before you take the major step of buying or renting in a specific city or town. Obviously there are many other variables to consider but now you are a step closer to deciding if it’s right to become a home owner in a town you may not know anything about. 


Saving $$$ in real estate is another way to watch your money. 

Top 10 Christmas Gifts in 2011

     Since the crazy shopping frenzy is now officially over and most of us are still happy over all the cool gifts we got this year. I wanted to share with you all the top ten holiday gifts of 2011. I am only doing this post as an informative way to share with you this cool list and hopefully some of your gifts will be present here. This list was taken by the sales purchases of major retailers leading up to Christmas eve.

     I really feel that this year the cash registers broke major records due to the large number of crowds to hit the stores this year. Which is a good sign for the economy as consumer spending is 70% of the GDP. The true test will be revealed as retailers will eventually release official numbers in the coming weeks to the media.

Top 10 Product Categories:

-Apple Products/Tablets
-Clothes/Outerwear 
-Coffee Makers
-Cologne/Perfume
-Video Games/Toys
-DVD/ Blu-Ray Movies
-Books
-Cameras
-Shoes/sneakers
-Tickets to events

I know most of you reading this list received at least one of these list categories as a gift. I got some cool clothes that I can use in the new year. What did you guys get? Comment back to let us know. 

The link listed here is the top items for Amazon.com the most popular online retailer. http://money.cnn.com/2011/12/29/technology/amazon_holiday_sales/index.htm?iid=HP_LN

The Top Items for Amazon.com as per the link above:

-Tablet-  Kindle Fire
-Books-  Steve Jobs Biography
-Clothing- Levi Jeans
-Shoes-  Ugg Boots 
-Video Game- Just Dance 3
-Movie-  Harry Potter Deathly Hallows 2
-CD- Michael Buble’s Christmas
-Kids Toys-  Rory Story Cubes
-Baby Toys-  Baby Einstein Tunes
-Cell Phone-  Droid Razr

        OK so there you have it one list is a generic top ten of items while the second list is a record of amazon’s online top ten purchased categories. Just an informative way to share with you what was purchased this year. Also in the future before purchasing any item online or at a store, compare the same item with amazon because 9 out of 10 times the item will be less expensive at amazon.

After this holiday season we all watched our money fly into the cash registers. HaHaHa.

New Year Resolutions

Ok now that we have gotten through a great christmas weekend I can only start thinking of the New Year and what that will bring to an already crazy life. I want to complete as many goals as possible in 2012 and I hope all of you have the same aspirations for your lives. I will share my goals in this post and I want all of you to please comment back and share at least one goal with us here at moneywatch101.

I found a cool article that lists the top ten most forgotten resolutions. I found this to be very interesting and it got me thinking, why do people commit to something and not follow through. Some of the reasons could be procrastination, laziness, or just a lost of interest. I think if we write our goals/resolutions down on paper and put it up on the refrigerator door that we all will be more inclined to follow through. 

The Top ten Resolutions are :

1. Lose Weight
2. Quit Smoking
3. Learn Something New
4. Eat Healthier/Diet
5. Get Out of Debt/Save Money
6. Spend Time with Family
7. Travel to New Places
8. Be Less Stressed
9. Volunteer
10. Drink Less

This list was featured in Time.com and will probably be 2012 top ten failed resolutions as well. Here is the link for the full article,     http://www.time.com/time/specials/packages/article/0,28804,2040218_2040220_2040221,00.html

Maybe you have a similar goal in mind that is featured on this list or maybe you have a totally unique goal that you would like to commit to and complete. The only way to truly get the best results is to share it with others and continuously remind yourself of the goal by looking at it every so often. So since I started this great topic my number one resolution for 2012 is to —-
Dedicate More time to this website.
As you can imagine I enjoy speaking to all those willing to learn about personal finance. Dont forget to take 5 min of your time to comment back and write down your very own resolution list.
Thanks,

What’s your Passion

 

 

 

 

 

 

 

Hey Friends I want to ask you a simple question today, What’s your passion? I saw a movie recently about someone finding their purpose in life. This is a true story of a man who had a passion for practicing Kung Fu everyday, but never wanted to teach it to others. He used it only as a form of self-defense. The movie I am referring to is called IP Man and its a great story of a man who found his passion. I wonder what’s your passion?

What’s your Passion

I believe that if you have a high level skill and or gift why not teach it to individuals. It will bring happiness to your life that you never imagined and joy to others. If you do not take the first step in showing others your talent/gift then you may not realize the possibilities of achieving greatness.

The IP man was a Kung Fu expert who did not decide to teach others until his country experienced great adversity in times of war. His recognition to martial arts will never be forgotten as he was Bruce Lee’s master in the art of Kung Fu. So do not waste any time and find your passion so that one day you can do what you love to do. After you finally decide to share your gift with others  it will be entirely up to you if it will be a free service or paid for service. It’s a win win if your everyday job involves your purpose and passion in life. Then you will not dread waking up in the morning while forcing yourself to go to job that you do not find joyful.

My Passion:

-One of my passions that I can talk about for hours is Personal Finance and the moneywatch101 website gives me the opportunity to share it with others. It’s funny that one of my passions involves money, but that’s life. What passion do you have hidden that is eagerly waiting to be released? I trust if you begin to find ways to share it with the world you will be a happier person in life.

Resources to help you find your Passion:

Find your Passion in 3 Steps

Find A Job Related to a Passion

Who am I Meant to Be Quiz

Passion + Time = Happiness
Another reason given the right situation how one can find passion in life.

After reading the Find your passion in 3 steps post I wanted to share with you my 3 favorite movies below.

Dragon The Bruce Lee Story

Gladiator

Saving Private Ryan

Money and Passion can be combined effectively and I hope you can find it sooner rather than later.

Rich Uncle EL