Category Archives for "Spend"

Learn to Bargain | Pay Less for ANYTHING

Follow just a few of these suggestions and save thousands!

1. New Car
When: November or December
Why: Don’t, as many experts advise, buy this year’s model in late summer when next year’s models hit. There’s a year of depreciation on it already. Instead, wait a few months and buy the new model late in the year, when dealers are antsy to hit their year-end numbers. “Look for the vehicle in the far corner of the lot that hasn’t been washed,” suggests Jack Nerad, the executive editorial director for Kelley Blue Book. That means the dealer doesn’t consider the car a profit maker.

4. Jewelry
When: Monday morning, in summer
Why: You’ll be the only customer. “You can always save 10 percent on jewelry,” says Ken Gassman, president of the Jewelry Industry Research Institute. “But you can save as much as 20 percent if you negotiate when you’re alone.”

5. Clothes
When: January 31 or August 31
Why: “Retailers are looking to make their monthly sales numbers and clear inventory to make room for new spring or fall lines,” says Marshal Cohen, chief retail and fashion analyst with NPD, a research firm. Shop when the store is empty and you’ll save up to 75 percent, Cohen says.

Get the whole list at Men’s Health Lists : MensHealth.com
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Some Thoughts on Healthcare

Here are two interesting articles about health care. As you know, health care, and more specifically health insurance, has been in the news of late. After all, the topic was one of President Obama’s key selling points when he ran for president. Now, the issue of rapidly-rising health care costs is drawing national attention.

INO.com News – Senator: Use of faulty insurance data ‘pervasive’

(AP:WASHINGTON) Congressional investigators said Wednesday two-thirds of the U.S. health insurance industry used a faulty database that overcharged patients for seeing doctors outside their insurance network, costing Americans billions of dollars in inflated medical bills.

The next story is interesting for a number of reasons. First, I love Milton Friedman. Not only was he a great economic thinker, but he loved freedom and wrote at length about it in several books (Capitalism and Freedom and Free to Choose, which I’m currently reading). Second, what he writes is usually very interesting and well-thought out. Thirdly, this one is truer today than it was when it was written.

I found the essay below at A Disgruntled Republican.

Hoover Institution – Hoover Digest – How to Cure Health Care

The revival of the company store for medicine has less to do with logic than pure chance. It is a wonderful example of how one bad government policy leads to another. During World War II, the government financed much wartime spending by printing money while, at the same time, imposing wage and price controls. The resulting repressed inflation produced shortages of many goods and services, including labor. Firms competing to acquire labor at government-controlled wages started to offer medical care as a fringe benefit. That benefit proved particularly attractive to workers and spread rapidly.

Initially, employers did not report the value of the fringe benefit to the Internal Revenue Service as part of their workers’ wages. It took some time before the IRS realized what was going on. When it did, it issued regulations requiring employers to include the value of medical care as part of reported employees’ wages. By this time, workers had become accustomed to the tax exemption of that particular fringe benefit and made a big fuss. Congress responded by legislating that medical care provided by employers should be tax-exempt.

Interesting! Make sure you read the entire piece. You may not agree, especially at first, with the policy outcome, but it’s hard to argue against the merits of the logic Friedman used to arrive at his conclusions.

I’ve often wondered why it was so that health insurance — if not fully-mandated by the government — seemed to be a birthright, when all it is is insurance. Nobody makes you get car insurance (if you meet certain requirements, you don’t have to pay) or earthquake insurance (though the “Big One” is sure to come), yet health insurance is almost (not yet, at least) unavoidable. It should be like in the old days:

You insured what you couldn’t afford to pay out of pocket (like cancer treatment, but not a doctor visit). The “third-party” payer (the insurance company) has us all by the (pick a sensitive part of your body) and has very powerful lobbyists.

As Friedman says in the article, nobody can spend YOUR money as wisely as YOU. In effect, you are paying the insurance company to do your bidding for you, the doctors hate the insurance company, you hate both, and your insurance company really only works for itself. Follow the money…

Guess where it’s going?

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Wealth-Building Wednesday — June 24, 2009 (Inaugural Edition)

Welcome to the first (of many, hopefully) Wealth-Building Wednesdays, where I try to offer you suggestions on how to build wealth. This would seem to be a departure from the many other fine personal finance blogs that devote a lot of their time and space to teaching you how to save money, be more frugal, and live beneath your means.

I, and a few others like 7 Million in 7 Years, focus, instead, on earning beyond your living.

Of course, taken to extremes, both points of focus can get you in trouble. On the one hand, you will have a really unsatisfying life; on the other, you may tend to forget about controlling your expenses and find yourself no better off with a LOT more income, but also with tremendous debt and expenses and a lifestyle that you may not even want.

Nevertheless, we’ll concentrate here in this special feature on building wealth from the income side. After all, income potential is virtually unlimited while expense savings are finite.

Plus, it’s my site and I’ll approach this topic how I want!

Mindset

To be successful at anything, the most important thing you have to master is your mindset. Simply put, attitude is everything. You can have all the talent in the world, tools at your ready disposable, adequate funds, and everything else, and yet, you still could fail.

Why?

That’s how life works.

Not only do you have to work smart, you have to work hard. Look at nearly anybody you deem “successful.” They all “got there” through working smart, employing experts when necessary, using appropriate tools and resources, but there’s another critical thing they mastered:

Hard work.

Perseverance. “Sticktoitiveness.” Dedication. Burning the candle at both ends. Hard work is an acquired skill that you learn by practice.

This hard work is your front-end payment to a potential big payoff months, years, even decades later.

Even “overnight sensations” worked tirelessly for years, in most cases, to “make it” overnight!

Now that we got that out of the way…in case you missed it, it’s not good enough to work smart or hard. You have to work smart and hard.

Here’s a link to a book that might change the way you look at things. It’s called MindMap to Riches. It’s all about what I’m talking about here; it’s just a lot more detailed and lengthy in its description. By no means can I cover the how to part of creating a positive mindset in this relatively short post.

Suffice it to say it’s passion, hard work, being smart, making a plan, acting on the plan, and making corrections all along the way. Leave a component out and you may not make much progress, but put them all together and you’ve got a winning combination.

Only YOU can determine what success is. We’ve limited our scope here to say that success, in this context, is increasing your wealth.

What is wealth? From a personal finance perspective, it’s pretty simple:

Assets – Liabilities = Net Worth
(aka, “wealth”)

The key to increasing wealth is limiting your liabilities to a manageable level while increasing your income-producing assets. As long as you can do that, you’re well on your way to amassing great wealth.

The pillars of a wealth-building system that we’ve described here are usually hard assets like your house, cars, precious metals, plus paper such as cash, money in the bank, stocks, and bonds. A vital component is a wealth-preservation instrument like liability and life insurance in case life throws you a knuckleball.

But the most valuable asset in your portfolio is YOU. You should think of yourself as an income-producing asset, striving always to become more productive through continuing education and training of the mind, body, and soul.

You are the ONLY one you can truly count on. Gone are the days of working for a company for 30 years, collecting your going-away gold watch and a nice little pension. Especially in light of the current state of the economy, you can be sure those days are gone — if not forever — for a very long time indeed.

If you’ve been here before, you know that I am a firm believer in running your own business. It’s difficult, but the rewards are usually worth it. The greatest benefit to me, however, is the idea that I am not relying on anybody else for gainful employment.

If I want more money, I go out and get it

I am not limited by my boss or a 40-hour workweek.

However, I know jumping ship on your career, no matter how tenuous the concept is nowadays, is not feasible for most people. This is where the smart work comes in. Keep your “day job” and do all your “own” business after hours. Of course, staying up late at night eventually becomes hard work, but you have to devise a plan to manage your time and health.

There are too many opportunities to mention that have potential for solid earnings. Private Label Rights publishing, ecommerce sites, ringtones, affiiate marketing, credit counseling and/or debt management companies — all of these have HUGE potential. Probably always will.

We’ll tackle some of these methods later in the series. For now, just find out what you can about setting your mental ship afloat. Determine what you’re good at, what interests you, what you’re passionate about! Get your head on straight and set yourself up for success!

Fuel, Oil, Alternatives

In case you hadn’t noticed, gas prices are rising again. (Is it the dreaded “Father’s Day weekend?”) In my neck of the woods, the price of regular-grade gasoline is hovering right around $3. Here are some miscellaneous ramblings about gas, oil, alternative energy, and what I believe the only answer to our long-term energy needs (find out what I think that is below).

When I was a kid, my grandparent, with whom my mom and I lived, owned a gas station. Back then, they were called “service stations.” For 27 cents a gallon, you got your windows washed, your tires checked and even filled, your oil checked, other under-the-hood fluids checked and topped off…

Service was emphasized then. Gasoline (with lead!) was almost an after thought. Oh, it was “full service” too. You didn’t even have to get out of your car. And when you were ready to pay? The service station attendant took your money, went into the office, got your change and a receipt, and returned to offer you a heart-felt “Good-bye.”

And get this: If you paid by credit card, the price was the same! And the attendant would bring out a little machine that would take an impression of your credit card, ask for your signature, tear out a copy for you, and then — you were done!

My, have things changed. But unlike a lot of things, my gut tells me that things have gotten worse. There is no such thing as “full service.” (Even in states like Oregon, where an employee of the gas station has to pump your gas.)

Did you catch my reference to the price of a gallon of gasoline? 27 cents! With a lot of labor behind it.

Today, you pump your own gas and pretty much carry out the entire transaction without any other humans intervening. You wash your windows. Maybe.

Check the oil? Huh? Dipstick? What?!

Then, 1973 happened. My grandparents sold the station and set off on a journey across the USA. They got to Arizona (they lived in Northern California). My grandmothers kidneys failed, they came back, and she spent the next 5 years of her life tied to a dialysis machine 3 days a week, 4 hours at a pop. With numerous trips to the hospital.

I grew up, literally, inside and around a hospital. My grandparents, who had amassed a good sum of money the “old-fashioned” way (by the sweat of their brow and VERY frugal spending habits born out of the Great Depression), blew through their entire life savings in less than a year.

  • Hospitals can be expensive. Especially if you don’t have good insurance. They had Blue Cross, but it somehow still ate up all their money.

Anyway, the oil embargo should have been a sign of things to come. OPEC was, and still is, too powerful and ought to be illegal. Cartels are illegal here, but we, as a country, allow it and even embrace it.

Anybody ever tell you that the US and you in particular don’t support terrorists…you’re in denial.

You, out of necessity, give money to entities that really don’t have your interests at heart. Know what I mean? But I digress.

Nearly 40 years ago, we should have come up with a game plan to untether ourselves from black gold (aka oil). But we didn’t. Oil and gas prices declined and we started buying big American cars again. The late 70s saw the same thing recur.

Then again in the 80s. Now, it’s not so much OPEC as it is overwhelming demand coupled with a supply that is ever-dwindling. By the way, mining in Alaska may help. By less than 1 percent. Do the math: Gas is $3. You’ll save 3 cents, max. At the expense of spoiling yet another pristine part of the world.

Rising demand + Declining supply = Rising prices forever (all other things being equal)

It’s this “all other things being equal” part that is intriguing. By the way, this is how economists take really complex marketplace issues and boil them down into neat, easily-digestible “models” that work on paper but almost never in practice.

We can must change the “all other things being equal” part. There are substitutes in the marketplace for fuel. They’re right before our eyes. (Solar, wind, water, natural gas)

In addition, we’re using 100-year-old technology in gasoline-powered automobiles. The underlying construction of the gasoline engine is exactly the same as when Henry Ford revolutionized the auto industry in the early 1900s. Nothing, really,  has changed.

Electric cars are far more “fuel-efficient” than gasoline-powered cars. After all, to charge your electric car battery, you have to plug it in to the power grid (a true solar-powered car most-likely will never occur, due to basic principles of physics — I cannot explain it here, but pick up a copy of Physics for Future Presidents).

Here’s a graphic illustrating the point:

fuel-efficiency

As oil prices rise, so, too, does the disparity.

  • Funny thing is, a lot of electricity we get comes from a very readily and plentiful energy source: Natural gas. America is sitting on a LOT of natural gas!

Ultimately, of course, we get all of our energy from the sun, either directly or indirectly. But when somebody says, “solar,” what they mean is power right now from the sun. We immediately think of the solar panels that were put on rooftops in the 70s and 80s (mostly as tax write-offs — they never really worked).

Now, however, the technology exists to extract a greater percentage of the sun’s energy and convert it to electricity. The sticking points are always energy storage (aka batteries).

Battery technology and the complex electrical switching that must occur in order to make this uber-power a viable source has lagged behind the rest of the solar industry. But that’s changing.

Of course, there’s wind and water or hydro power that is available. If we could harness a small fraction of the earth’s wind power we could have all the electricity we ever needed. Or harness the incredible power of the — get this — lunar power!

That’s right. The moon, which makes the tides, could be the source of our power! If only we could put giant turbines in the oceans…and reverse the power flow on opposite sides of the tides (generate power on rising and falling tides)…

I think we’re almost there, from a “can we do it” perspective. The rest is all political. Unfortunately, “the rest” is probably 90 percent of the problem; it’s most likely insurmountable.

Same goes for nuclear. It’s a phenomenal technology, considerably safer than it was in the 70s and 80s. But nobody here is willing to put a reactor in his backyard (NIMBY, or Not in My Back Yard).

So, I’ve said all that to say all this:

We need a new perspective.

What worked decades ago may not. Things change. So should we.

With any revolution, change doesn’t come in waves; rather, it comes slowly. It’s like the “Overnight Sensation” that took 20 years of blood, sweat, and tears to make it “over night.”

Problem is, we should have started taking the “baby steps” we needed to take several decades ago. I’m not going to suggest that “it’s too late,” but it is certainly disconcerting how we seem to have shown up to a party that dismantled years ago. The guest of honor has died, the cake is rancid, and the presents are all broken and used up.

Sorry, my “glass half-empty” persona sneaked out.

We can make this happen. I think we will — collectively — succeed. Our very survival depends on it.

Think about that for a moment.

If energy becomes truly in short-supply, wars bigger than all the wars put together will ensue (there’s “glass half-empty” again).

I hope we’re smarter than that. The alternative (making better choices now about how and where we get energy) is certainly a better option than kill or be killed.

And let’s not forget about fusion. We’re closer than ever. This supplants use of the sun for making our own. Sounds a little far-fetched, but we really are smart enough as a species to figure this out.

Kids and Money — June 15, 2009

Welcome to the June 15, 2009 edition of kids and money.

Cash Tree presents Baby Clothes – Why Organic Is Better For Your Baby posted at Organic Baby Wearhouse, saying, “”Many of us know of the ecological impact of producing non organic cotton baby clothes (where cotton crops account for 25% of the worlds pesticides and 10% of the worlds insecticides each year). The question we hear often is are there really any actual health benefits for buying organic baby clothes. And the answer is Yes, organic baby clothes are better for your baby!””

Daniel Drew presents My business is doing well, should I choose an SBA Loan? posted at My Business is doing well should I choose an SBA Loan?, saying, “The reasons for getting an SBA Loan and how to get one. Also visit http://www.unsecuredbizloan.com to pre-qualify for an SBA Loan!”

Darwin presents Start an Investment Club: How To, Rules and Reality Checks posted at Darwin’s Finance, saying, “With an investment club being a beginner’s way into investing, this comprehensive ‘how-to’ and reality check investment clubs is a must-read for young investors.”

Jack Schmidt presents Blog Carnival – Submit an Article to a Carnival posted at SectorMatic Money Journal, saying, “Personal Finance – Everything for the Big Spender on a Budget. Now you can live like a fat cat, even if you’re on a money diet. Laugh all the way to the bank with Jack Schmidt and SectorMatic. It’s for you!”

Chris McClelland presents Recent College Graduates, Prepare to Starve posted at Lucrative Investing.

Chris McClelland presents Some job markets for new grads posted at Lucrative Investing.

jim presents How to Build Your Credit History with Tradelines posted at Blueprint for Financial Prosperity.

Jim DeSantis presents 3 Keys To Self-Control and Saving Money posted at On Line Tribune | Family Life, saying, “Lack of self-control when it comes to money is a common pitfall for most people. Often, when people come into an extra amount of money, they have this tendency to rush out and instantly satisfy the irresistible urge to splurge on anything they lay their eyes on. This is a very costly mistake from a number of aspects. Sometimes people fail to recognize the idea that the future has to be considered, too, whenever spending and saving enter the picture.”

Savings Toolbox presents Should You Switch to a Credit Union to Save? posted at Savings Toolbox.

costseg presents Cost Segregation Audit Techniques Guide | Society of Cost Segregation Audit Techniques Guide posted at Cost Segregation Audit Techniques Guide, saying, “How do Cost Segregation Audit Techniques Guides work in real-estate this days and how can you save tax money with them.”

Leave Debt Behind presents Starting a Budget for Your Family posted at Leave Debt Behind.

Barry presents Saving Money At The Amusement Park posted at Associate Money.

Brad Chaffee presents Your Children Will Handle Money, The Way You Handle Money posted at Enemy of Debt, saying, “Thank You!”

Jack Schmidt presents Health Insurance Can Improve Your Love Life posted at SectorMatic Money Journal, saying, “Personal Finance – Everything for the Big Spender on a Budget. Now you can live like a fat cat, even if you’re on a money diet. Laugh all the way to the bank wiht Jack Schmidt and SectorMatic. It’s for you!”

Madison presents How is your Lending Club Account Doing? posted at My Dollar Plan.

SpendingIt presents The Three Biggest Opportunities to Save Money posted at Spending It.

Christopher B Williams presents Business Loans posted at Dollars2wealth.

Christopher B Williams presents Credit Cards posted at Dollars2wealth.

KCLau presents Easy Pawn Shops – Do you need to Pawn? posted at KCLau’s Money Tips, saying, “Pros and cons of pawning”

marjorie presents BillMyParents: Your Kids Can Shop Online posted at Wealth Junkies, saying, “BillMyParents allows kids to shop online without having to use their parents’ credit card. When they find something they want, they can send a request through BillMyParents. Parents receive the requests and can decide from there whether to approve or deny the purchase.”

Verna Morris presents How to Build Your Own Ivy Endowment Portfolio Using ETFs posted at ETFdb.

Wealth-Ed presents Can American Banks Bounce Back posted at Wealth Education – Investment Ideas Personal Financial Advice.

jared presents General Growth Continues Restructuring Efforts posted at Wealth Education – Investment Ideas Personal Financial Advice.

Jack Schmidt presents What Does the Internet Mean to Your Wallet? posted at SectorMatic Money Journal, saying, “Personal Finance – Everything for the Big Spender on a Budget. Now you can live like a fat cat, even if you’re on a money diet. Laugh all the way to the bank with Jack Schmidt and SectorMatic. It’s for you!”

Jack Schmidt presents Diversity Means Never Having to Say You’re Sorry posted at SectorMatic Money Journal, saying, “Personal Finance – Everything for the Big Spender on a Budget. Now you can live like a fat cat, even if you’re on a money diet. Laugh all the way to the bank with Jack Schmidt and SectorMatic. It’s for you!”

Dan presents Flushing Toys Down the Toilet – Punishment Time posted at My Dad Blog, saying, “This article highlights the joys of children flushing objects down toilets and how to administer the consequences of a costly plumbing bill.”

jim presents Request & Check Your Specialty Reports Annually posted at Blueprint for Financial Prosperity.

Billeater presents Summer Entertainment for Families on a Budget posted at Billeater.

Chris McClelland presents Could painting your roof be the key to reversing climate change? posted at Lucrative Investing.

Chris McClelland presents Touch Not the Retirement Fund, Thus Sayeth the Experts posted at Lucrative Investing, saying, “Please email me if you need anything.”

NetBiz presents Student Loans Without A Cosigner: College Loans For People With Little, Good Or Bad Credit posted at Your Finish Rich Plan, saying, “Finding the right student loan can be tricky depending on your personal financial circumstances”

Madison presents Best Bank for Kids posted at Kids and Money.

Patrick @ Cash Money Life presents College Savings Plans: 529 vs. Coverdell ESA posted at Cash Money Life, saying, “Explaining the difference between the two most popular college savings programs.”

Silicon Valley Blogger presents How To Pay Off Credit Card Debt: A Success Story posted at The Digerati Life, saying, “I would share this story with my kids. It’s an important lesson on managing debt!”

The Smarter Wallet presents Should You Trade Stocks Online? posted at The Smarter Wallet, saying, “Teach your child about the investing world.”

nickel presents Free Summer Movies for Kids – 2009 Edition posted at fivecentnickel.com.

Mike Pastore presents Teach Your Children Well – Financial Education Starts at Home posted at Mikes Millions.com.

Credit Shout presents Responsible Credit Card Use in College Students | CreditShout posted at CreditShout.

Raag Vamdatt presents Birth of a child – how should your financial planning change? :: RaagVamdatt.com :: Financial Planning demystified posted at RaagVamdatt.com.

Barry presents Tips To Set Up Children Savings Accounts posted at Associate Money.

That concludes this edition. Submit your blog article to the next edition of kids and money using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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