Category: Personal Finance

Why you should not take Money for Granted

 

I see it all the time, people taking money for granted. No I’m not talking about a person walking by a penny and not picking it up. I am referring to the thousands of dollars every year being funneled out of bank accounts and into the hands of the already filthy rich companies. Banks everywhere are making out with your money. Credit Card companies are buying businesses with your interest payments. Auto Sales men are funding their pockets with every signature you sign on the dotted line. Higher Education is laughing to the banks because of the 1 trillion dollars in student loans debt.

What happen to thinking about good old numbero 1 from time to time? What happen to making You, Inc. more profitable and self-sustaining by stashing your cash? If you keep throwing money in the wrong direction, it will eventually make you feel like taking two steps back and no step forward.  I am ready for a challenge to take You, Inc. into the next level of success with money management. How do you ask with a blank stare are you going to do this? Well it is simple by not taking money for granted. By sending it express mail in the right direction, thus having the little green dollars work hard for you. It’s real easy send it to your online bank account and build it every month for emergencies. Once a real emergency occurs, then take out your free online money. By now the money you have been saving is making you free money by compounding.

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The Best States for Retirees

 

Best States for RetireesIf you knew which were the best states for retirees, would that information sway you to live in one of those states? Recently such a list was released by CNN Money with some analytical help from the BankRate guys, they ran an article based on the 10 best states to retire. This list of states will give all the readers who wish to retire the best bang for their dollars. The criteria in the research was based on cost of living, (obviously) climate, crime rate, access to healthcare, and Taxes.

Now mind you some of these states are land locked and in extremely cold areas of the United States, but then have low crime rates. In contrast the states in warmer locals and near the beaches have high crime rates coupled with low taxes.  The first poison you have to decide above all else is how the heck can you save enough to retire, then you can pick and choose all the dirty little things that you can live with and or without in these great states.  Like being far away from the ocean, high crime, low freezing temperatures, and low taxes.

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What is the Happiest Money Moment You Ever Had?

What is the happiest money moment you ever had?

I think we all have had a few great, unforgettable, happiest money moments to hit our lives. I like reminiscing on random things like this, because frankly our past can somewhat shape the future. How did the happiest money moment creep into your life? Did you have control over it or was it just pure luck? I bet I am going to get some very interesting stories from my readers.

The point for this post was triggered by me just remembering a time when I was happy due to either getting a small downfall or finally achieving a great money goal. I will share the happiest money moments with all of you and I want you guys to just try to remember one you can share as well. Those moments were given to you for a reason so why not remember them and honor the moments.

What is the Happiest Money Moment You Ever Had?

  • The first ever paycheck
  • The first time I found a dollar bill on the street
  • The first time I received a bonus check
  • The first time I invested my hard-earned money
  • The first time I found over a 100 dollars
  • The first time I saw a thousand dollar+ check in my name
  • The first time I received a Holiday bonus check
  • The first time I saved 5 grand
  • The first time I paid for Candy with Cash

 

Now that I have shared with all of you please be so kind to return the favor, we all can appreciate talk like this because it let’s us connect better with a topic (Money) that is deemed negative most times. Just writing about all of these memories makes me smile. I worked really hard for my very first paycheck and cashing it was a euphoric experience, after I received the cash I was thinking wow this is all mine. I immediately made a budget in my mind, that I would save half and spend the other half.

Back track 7 years and I was running to the candy store during lunch time in middle school to buy some goodies with the dollar bill my father gave me that morning. I couldn’t believe all the stuff I could buy back then with 1 dollar. Now things are different, kids are lucky if they can get 4 candies with 1 buck. That candy would last me about a week and you can bet that I ate each and every one. Now I am looking towards the future for a few more happy moments with money that I can be proud of, maybe I can share them with you in the future.

If you leave a comment I will add this post to one of the happiest moments with blogging.

 

Thanks for the support follow by Bloglovin, Twitter, or Facebook.

 

Rich Uncle EL

 

Getting a College Degree is not Enough

Getting a college degree is not enough

Every day I wake up thinking positive thoughts about how I can achieve new goals in life. I can see my potential, my motivation, and my overall dedication for reaching new heights. I fail to imagine a world where I will not succeed. The real test that many lose focus while seeing, is that getting a college degree is not enough to achieve success in today’s, yesterday’s or tomorrow’s world.  The experience you will learn from school is priceless. The networking if done right is also worth a ton in value. But do not expect to be handed a golden ticket once you graduate. Because getting a degree is not all it’s cracked up to be. The paychecks do not come flowing down straight into your bank account because there is a clog somewhere.

What is the clog you ask? The clog is composed of one thing and that is WHO You KNOW! The glass ceiling is real for everybody unless you know somebody in the right executive position or should I say Captains Chair. A degree in this world is worthless when you are placed up against the son of a senator for that new job. This is the reality my readers and a wakeup call to get your freaking alarm on high volume. Your Connections are priceless!

What if you do not have any connections? Then begin yesterday on finding some a.s.a.p. I believe the only way to achieve real advancement in any organization is to have important connections. Yes other factors come into play like how you communicate, or how you present yourself, but in the end I have seen many people get a swift denial letter for a job because they were a nobody. If you do not have a network of supporters vouching for you, than guess what you’re a Joe Schmo or Nancy Drew to them.

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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

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