Thursday, April 30, 2009

Balancing My Money and Goals

Lately I have been thinking more than I should. I am having a hard time trying to decide what to do with the money that I am saving. I have so many major events coming up(this year and next) and I want to save for all of them, but I am starting to feel slightly overwhelmed. I set some pretty lofty goals at the beginning of the year and I am trying to stick with them. At the same time I have some other ideas of what to do with my money, like investing in the stock market while prices are at a 12 year low. Here is a break down of some goals and new investments I want to add at this point. Funny how things can change so fast...

2009 financial goals

• Max out Roth IRA - $5000.00
• Reach $10,000.00 for my emergency fund
• Save $10,000.00 for down payment on a house
• Contribute to my 401k up to company match (5%)

These goals are in the works right now and I am working at reaching them every month, I will be doing a recap post in June on how my goals are coming along. Here are some of the other ideas that I have that I would like to start reaching for on a monthly bases but just do not have the funds to do so.

• Start investing in stocks
• Paying down on the principal of my vehicle (14k at 4%APR)
• Start saving for my honeymoon (want to go south pacific or somewhere exotic) 
• Start contributing more to charity

I have to keep my expectations in check. I feel I am doing so well with my finances that I have to stay focused on the details and not worry about the big picture right now. If I focus on the details than hopefully the big picture will work itself out? I also have to worry if something were to happen to my fiancés or my job and being able to still meet my initial goals if something were to happen.

It almost feels like trying to get rid of debt and that if I can just stop myself from not getting overwhelmed, that I can slowly create the wealth that I want. When I had a couple thousand in credit card debit and I started to pay off the debit, I wanted it all gone and I wanted it paid off instantaneously. I remember thinking how could I have let debt get this out of control and if I didn't have any I could start to save some money. I had to have patience and it took a couple years but it hurt every month wishing it to be pay off. I, like most people, can only think about today and not about the future with saving... 

This is kind of a weird post for me because I am doing all the right moves, but I feel that I am getting back to saying (I WANT!, I WANT!, I WANT!) or (I wish I had more money...). I guess I cannot stress to much right? I feel like I have all my ducks in a row, I just have to remain focused and worry about one goal at a time. I do feel so blessed that God has looked after me and taught me to be wise with my money as well as given me the opportunity with my work to be successful.

Please tell me I am not crazy and that I need to relax and stop trying to be Warren Buffett with the salary I make, ha! Any suggestion on how you deal with keeping everything in perspective would be greatly appreciated!

Monday, April 27, 2009

The Origin of the Dollar Sign ($)

The quote of the week comes from Chapter 20 in the book Atlas Shrugged title "The Sign of The Dollar". This stuck out to me while I was reading it and thought it was interesting enough that I had to do a little research about the origin of the dollar sign and what it stands for. What I came across is since the symbol is more recent than the name, and the origins of the latter are well understood, one might expect that the origins of the sign would also be known for certain particularly when the origin of the British pound sign, £, which is far older, is well-established. However that is not the case with regard to the dollar. There seem to be a few theories of the origin's of the $ sign. I like the theory that Ayn Rand uses in Atlas Shrugged even though sounds like the symbol was already in use before the formation of the United States.

Dagny sees "the sign of the dollar" imprinted on Kellogg's box of cigarettes--costing five cents in a pure gold standard. She asks what the dollar sign stands for and Kellogg's answer is:

The following is an excerpts from Atlas Shrugged, © Copyright, 1957, by Ayn Rand.

"The dollar sign? For agreat deal. It stands on the vest of every fat, piglike figure in every cartoon, for the purpose of denoting a crook, a grafter, a scoundrel—as the one sure-fire brand of evil."

He goes on to say

"It stands—as the money of a free country—for achievement, for success, for ability, for man's creative power—and precisely for these reasons, it is used as a brand of infamy. It stands for the initials of the United States."
"Do you know that the United States is the only country in history that has ever used its own monogram as a symbol of depravity? Ask yourself why. Ask yourself how long a country that did that could hope to exist, and whose moral standards have destroyed it. It was the only country in history where wealth was not acquired by looting, but by production, not by force, but by trade, the only country whose money was the symbol of man's right to his own mind, to his work, to his life, to his happiness, to himself."

I am in total agreement with Rand on everything except I have to say that some wealth was acquired by force in the days of slavery, but will let Walter Williams talk about this one. I do feel it stands for achievement, for success, for ability, for man's creative power, along with the symbol of man's right to his own mind, to his work, to his life, to his happiness, to himself.  I also feel that the media/hollywood uses it as a symbol of depravity.

If you would like to find out more on the origins of the dollar sign check out the wiki page.

If you liked this, read older post of Quote of the Week

What theory do you think? Leave a comment

Super Target...Where have I been?

I know I will be pretty late on this one but where have a been the last few years and why have I not been shopping at Super Target for my groceries? I have to admit I was pretty skeptical when my fiancé suggested going there to get our groceries for the week. Not that I hated Target or anything, but I had never been to a Super Target where they had groceries. I was only doubting it because I wasn't sure they would have everything we needed and the quality that I had wanted. We had shopped at Super Walmart before but the quality of their fresh produce and meats just were not up to the standard that I prefer.

Well, I was proven very wrong with only one shopping experience. Our weekly grocery bill is somewhere between $100.00 and $115.00 at normal stores like Harris Teeter with their club cards. We have gone to the Super Target for the past 3 weekends and our prices have been easily $10-$20 cheaper. I also have been enjoying the "fresh market" brand food just as much as my normal brands (thats saying a lot, as I am a brand whore). I would even say that their brands are better, for instance, their yogurt is way better than the Harris Teeter brand we used to get.

On top of lowering our grocery bill every week we can also pick up cheaper items like trash bags, cleaning supplies, personal hygiene, a reasonably lower price than at a regular store.

The Super Target is a tad bit out of our way but I think it makes up for it in the little bit of money that we will save every week, month, or year. I would recommend anyone like me that has a certain standard of quality for their groceries to give Super Target a chance.  I am pretty certain that you will be turned into believer just like I was. I have to admit that the produce could be slightly better as I prefer farmers markets to grocery store's anyway, but I cannot complain with the amount of money that we are saving and enjoying the food as much as before I tried Target.

Any other places I am sleeping on? Post a comment and let me know!

Thursday, April 23, 2009

Purchasing a Diamond Engagement Ring: Part III

This is the third of a three part post which I give you my whole story of purchasing a diamond ring for my now fiancé. This post describes how I am using a credit card to buy the diamond ring.

One of the most important thought process is thinking about what you, as a couple can afford (even though you are paying for it). One of the last things you want to do  in this new phase of your life is begin with new debt or more debt. This is very hard to consider when you have a PR scam that says that the cost of an engagement ring should at least be 2 months salary and that you want to give them the best. I took a hard look at my fiances and choose a price range that was slightly higher than I had saved up for but realized that I would just have to be tighter with my budget...but I could afford it. I would say to anyone who is nervous that their someone special wants an expensive ring that you cannot afford, is to have in place a special way of letting them know that if money wasn't an object that you would give them the world. You are going to be with them forever and money is going to be a huge part of your marriage so don't start off on the wrong foot. You can always upgrade a diamond 5yr, 10yr, and so on for anniversaries if you like.

One of my problems I had was how was I going to actually pay for this purchase, cash, credit, or financing. I started saving up for the ring a little late but when I got serious about it I really tighten my buckle and beefed up my "wedding ring fund" every paycheck. At the time I was saving for the vacation trip as well, so I wished I would have started saving earlier...dont we always say that. I had, sitting in my "wedding ring fund" about 1/3 of the cost I had budgeted and I had the other 2/3 sitting in my saving account that I did not really wanted to tap into, especially in these economic times. I have 2 credit cards that are fully paid off and are only used for points. I started to look for credit cards with 0% APR for the first 12 months and found the one I wanted. I have great credit, so fortunately I was able to open it up and put the ring on the card. So this might not seem like a good idea but here is my full thought process of why I decided to put it on plastic.

1) I knew that it would help my credit and with trying to purchase a house later this year every bit helps these days. (I know I could still use credit to purchase and pay it in full so I don't have any debt.)

2) I could write a check and pay it off today if I needed to. Meanwhile my money is sitting in a high yield saving account with ING Direct. So I am borrowing money interest free and making money off the interest I am making in the saving account. 

3)My monthly payment is 2.5% of the remaining balance on the credit card so I only pay the minimum every month. I am acting as if I am sending the full amount by sending the 2.5% to the credit card and putting the remaining into a savings account which is creating some interest for me. On the 12 month I will cut a check for the remaining balance that is left on the credit card from my savings account. At the end of the day I am borrowing money interest free to invest for a 2% return.

Just as an example, let just say the ring cost $1000.00. Divide that by 12 months, around $83.30 a month. My credit card payment is 2.5% of that, so it is about $25.00/month. I send the remaining $58.30 to my saving account to make interest for me. So at the end of twelve months I have paid  around $300.00 to the credit card and have made interest off the remaining $700 sitting in the saving account. I write the check for the remaining 700 and have a few dollars from the interest I made.

4) With borrowing  interest free I can still have more cash on hand if something were to happen to my employment.

So there you have it, overall I would say that it is a very nervous, exciting , and really cool experience for purchasing something that is a) so important and b) so expensive. These three post might sound like I am just concerned with spending money on something that is very materialistic, I am just giving you my personal experience. Just remember that at the end of the day, if you can not afford a diamond, it is ok. It's not so much about the diamond but about your love and the statement to their family and friends by saying, 'I have found the one person I am ready to settle down with and start a new life with.' I hope you have gain some inside knowledge with making that next step, so please leave comments and suggestions to others.


Monday, April 20, 2009

Purchasing a Diamond Engagement Ring: Part II

This is the second of a three part post which I give you my whole story of purchasing a diamond ring for my now fiancé. This part describes actually doing research, looking, and buying the diamond. 

I first started out seeking the diamond the same way I discovered PF blogs, by googling "buying a diamond engagement ring". I read a few articles/blogs and eventually lead me to the 4C's, I won't bother you with those details as you should do your own research on this before you start. Next thing I did was reach out to a couple of my closest friends who had been through the process, and got their opinion. One of my buddies sent me to Blue Nile where I spend some time educating myself and looking at what I could afford with the budget that I had. 

Once I kinda knew what I was looking for I decided to check out a local jewelry store so I could at least see the difference in person. At this point I thought I would go in and look at diamonds and get a feel before I purchased one online at Blue Nile (they are a publicly traded company listed on the NASDAQ under the symbol NILE) so I knew they were reputable. Once I got into the store the salesman took me through the educational part which I told him I hadn't the slightest idea besides some research online. Once I looked at a few diamonds along with the salesman telling me that could beat any price, I knew most likely would be buying from them.

One thing that I appreciated was that the salesman didn't overwhelm me with a bunch of diamonds, he showed me a few based off of the 4C's and asked me which one's I liked. I suggest as well that  you don't overwhelm yourself by looking at a ton of diamonds, it will make your head spin...think Microsoft redesigns the iPod Package. Once he knew what I  liked he asked me what my price range was. He showed me 3 or 4 diamonds that were in my price range to show me color, clarity, and size. I believe it helped me with pricing that I told him I was taking my time and was going to explore all my options, but that I was ready to purchase. He offered me the completed ring at price of the diamond, with no sales tax and any white gold setting I liked. (they were a diamond wholesaler before they opened the store, so they had wiggle room).

I left the store and wrote down my measurements from the diamond that I liked and went online to see the pricing of the same size, color, and clarity. The price at the store was better than those online. This helped because I knew that I could look at the exact diamond I was going to buy.  I went back into the store and looked again knowing that I was most like going to make that purchase. 

At the time I was looking at round diamonds that he had shown me but had really like the princess cut(square) diamonds that I had seen on friends. And yes guys, you should look at other's peoples diamonds, you are spending your hard earned money to give that someone special a commitment for life, why would you not care? I decided to look at the same specs of the round but in a princess cut. I still had a hard time deciding but the princess cut keep calling my name and eventually I pulled the trigger.

After I bought the ring I thought that I was all ready to go and that all I needed to do was pick it up. I decide to let them hold it until the day before we left for California. In the process of getting ready I had overlooked one thing... I hadn't seen the diamond  in its setting to make sure it was the right one. I stopped by and looked at the ring as a whole and I have to say that I was really proud and it looked amazing. It was perfect for the woman that was going to be with me forever and a very rewarding experience.

Tomorrow I will be going over the payment process that I am using to pay for it so check back and add comments and let me know how I did!

Related Post
Purchasing a Diamond Engagement Ring: Part II

Purchasing a Diamond Engagement Ring: Part I

Over the rest of the week I will be posting a three part series about my process from start to finish on purchasing an engagement diamond ring. This is part one of three so check back on Wednesday and Thursday.

Recently I got engaged to my girlfriend while we were on vacation, but before all the fun stuff happened I had to go through the process every man SHOULD and WANT to go through. That is, picking out that perfect diamond for the person you are going to be with the rest of your life.

Here are some pretty interesting facts about these little beauties before I get into my process.

A diamond is the allotrope of carbon where the carbon atoms are arranged in an isometric-hexoctahedral crystal lattice. WHAT?

The word comes from the Greek word "adamas," and this means "unconquerable and indestructible."

Diamonds in fact don’t last forever, but “only” several million years before they disintegrate.

To produce a single one-carat diamond, 250 tons of earth will be mined. 

A diamond has very high melting point of 3820 K (3547 °C / 6420 °F) and a boiling point of 5100 K (4827 °C / 8720 °F).

The diamond is the hardest natural substance found on the earth.

So no matter what advertisers say that make people want to go out and spend a lot of money on a Diamond, you must admit that it is a pretty kick A$$ mineral! And who deserves it more than the person you love most on earth. I think finding the right Diamond, big or small, expensive or inexpensive is sort of like picking a pet if you have been through the process. You kinda pick each other once you come across the one you know its right, even though it might take some time.

I will share my experience with you, only as how I picked out the perfect diamond...for my fiancé. It might not be the perfect diamond for you or for that someone special in your life, but take my experience and learn, build, and let it inspire you.

As an introduction to where my journey began, I heard numerous times that I needed to talk with my girlfriend and figure out what she wanted and that we should go look together. I knew my girlfriend enough without ever talking about it that she would want me to pick the diamond ring out for her and surprise her. I did ask here mother and her sister and neither of them knew exactly what she wanted. She admitted after that she didn't know anything about diamonds and frankly didn't want to be apart of it. Personally, I wanted to pick the diamond and since I'm never going wear it or anything it made me take a lot of pride in picking it out instead of just paying for it.

Some guys will definitely want to go with their girlfriends to look or they might at least want to know what she is looking for, but do not feel the pressure if you think she wants you to pick it out. Tomorrow I will be talking about my process with going into the store and actually looking at diamonds and purchasing the one.

Do you have suggestions for others? Leave a comment!

eWallet - One of my favorite iPhone apps

eWallat was one of the first applications that I purchased for my iPhone. I always wanted to keep my passwords, account information, security questions, etc...somewhere that I could always have them and be secured. This is the perfect application for those who have a ton of different accounts who want different passwords without having to remember all of them. I would say that I use it at least every other day. 

With this app you can: from their website

Store Your Information Securely: Using extremely secure 256-bit AES encryption, eWallet protects your personal information from falling into the wrong hands.

Never Forget Another Password: eWallet remembers your passwords so you don't have to. Now you can use strong passwords that can't be guessed or cracked for your online finances, plus the convenience of having all the passwords you need with you, all the time.

Use Your Data Anywhere: Easily synchronize your wallets between your iPhone or iPod touch and a WiFi connected Windows PC. Keep all your important info up-to-date wherever you are!

Personalize Your Wallet: Your info can be as personal as your playlists. Get the look – and the info - you want with custom icons, card backgrounds, and over 30 pre-built card templates. 

At a price of $9.99, it might seem expensive, but it is like having an exact electronic copy of my wallet. (hence the name eWallet) For me it is hard to keep up with so many passwords and its way easier than carrying around a hard copy, like a little notebook or something. Plus if you were to lose the hard copy it is not password protected like eWallet. So if I am at work or traveling and I try and access one of my accounts but don’t have the information, I simple log onto eWallet and its all right there.

I am pretty tight with my money when it comes to purchasing apps for the iPhone but this one I have to say is well worth the money. It is a nice feeling to know that you have all your account information with you at all times. I am waiting for the eWallet desktop app for my MAC.

If anyone else has any apps that are a must please leave comments and share your suggestions.

Friday, April 17, 2009

Robin Hood, the Foulest of Creatures?

It's time for another quote of the week, I usually try and post these on Tuesdays but I have been playing catch up this week.

So I have reached the Atlantis in Atlas Shrugged but I want to go back to a part of the noval that I had booked marked. This part only seems fitting since this week was Tax week. This great part of Atlas Shrugged is when Hank Rearden is talking to Ragnar Danneskjöld

The following is an excerpts from Atlas Shrugged, © Copyright, 1957, by Ayn Rand.
“I’ve chosen a special mission of my own. I’m after a man whom I want to destroy. He died many centuries ago, but until the last trace of him is wiped out of men’s minds, we will not have a decent world to live in.”
Hank Rearden: “What man?”
Danneskjold: “Robin Hood.”
Hank Rearden doesn't really know what he means and Dannesjold goes in and explains the horror which Robin Hood immortalizes as an ideal of righteousness.

He is remembered, not as a champion of property, but as a champion of need, not as a defender of the robbed, but as a provider of the poor. He is held to be the first man who assumed a halo of virtue by practicing charity with wealth which he did not own, by giving away goods which he had not produced, by making others pay for the luxury of his pity. He is the man who became the symbol of the idea that need, not achievement, is the source of rights, that we don't have to produce, only to want, that the earned does not belong to us, but the unearned does.

It is the foulest of creatures - the double-parasite who lives on the sores of the poor and the blood of the rich-whom men have come to regard as a moral ideal.
Without getting to political, I have to say that some of our politicians today feel that the people who have created an abundance of wealth should pay more for people that haven't created anything but feel the right that they are owed something. Don't believe me? Check out Man vs Debt's article about some of his lesson learned while preparing taxes this season.

Have a great weekend! I am headed to the beach to surf this weekend so I am really excited! Hope yours is good as mine!

Thursday, April 16, 2009

Should you calculate a diamond in your net worth?

So recently I bought a diamond ring for my girlfriend. I have been wondering once we get married do I included it in our net worth? I honestly don't want to because I feel it is not a true value of our net worth. I plan on never selling it and pray that nothing ever comes to that point, but I just don't see counting it unless I someday planned on liquidating it. 

I did some research online a see what you should add  and found this over at Money & Happiness here is an excerpt from here net worth article
"Next, imagine you have decided to sail around the world and liquidate everything you own, from the high-definition television on the wall to your four-carat diamond ring. You should ballpark everything..."
I am sorry but I just don't feel like this is real assessment for my net worth, I don't like to account for my vehicle either. I just feel like its not making me wealthier? I will add my home value one day when we eventually own because we are building equity. A Home can gain value and lose value but a automobile just seems to always decrease in value, it is not a investment. 

Does anyone else seem to think that I am in the wrong here and that I should be adding up jewelry and auto with my net worth? I am counting my automobile debt, and I am counting the debt for the ring (12 month 0% APR before someone gets made at me).

Please let me know so I can figure this out!
For more information about my net worth click here.

Monday, April 13, 2009

My Money Shrugged has a new tagline!

So I have signed up for the 31 Days to Build a Better Blog Challenge over at Problogger. I am a little late starting this because of vacation, but one thing that stood out to me is having a tagline for your blog. I have always known what my blog was about when I started but never thought about writing a tagline for people who didn't feel like reading the about me section of my blog. You might have recognized in the header of my blog but if you haven't, the tagline is -

Holding a budget in punishment for waging war against debt

This comes from the title of my blog My Money Shrugged which was inspired by my reading of Atlas Shrugged.  The novel's title is a reference to the mythical Greek titan Atlas, who in the novel is said to hold the weight of the world on his shoulders (as recorded in Hesiod's Theogony, Atlas holds the sky in punishement for waging war against Zeus). So there you see the inspiration for the title and the tagline for this blog. To find out more about this blog read here.

Also I have sign up for twitter so if you would like to follow me @ 

Movie Review: I.O.U.S.A

Knowing I had a long flight out to Los Angeles last week for vacation, I decided to watch a movie a friend recommended to me a couple months ago: I.O.U.S.A. - One Nation. Under Stress. In Debt. I highly recommend watching the movie in whole as compared to the 30 min byte sized one on their home page. Everyone should watch this movie and realize how scary the facts are about how much debt individuals and our US government are in. 

I believe that all of us who are personal finance bloggers know how serious debt is. We know that with being debt free we start to create wealth for ourselves and family. It is a shame for our government not to be run the way a business is to be successful. If a business or individual goes into debt they start being enslaved by it. Every time they get money flowing in, they turn around and send it right back out and eventually if they cannot save more than they are consuming the only option is to fail and go bankrupt.

I.O.U.S.A. goes into great details about our 4 main deficits - Budget, Savings, Leadership and Trade. The mixture of the four deficits creates a toxic mix that threatens our country and our families future.  They use a lot of animated charts and graphs to explain all of these areas which makes it a whole lot easier to understand. At least for me since I am a visual learner.

Here is the byte size version but like I said earlier I would watch the full movie

Here is just one of the examples of trade deficit using Warren Buffet's parable Squanderville vs Thriftville.

For more information here are some more links.

Vacation's Over but Life is Just Beginning!

So we are back from our vacation in California and have had a blast. We probably over extended ourselves a little and my budget is not going to look pretty this month, but its all worth it because we just got engaged! We (the fiancé and me) will both be doing double time on not spending any extra money this next month so that we can keep our budgets in tact. 

So I will have some new post in the upcoming months about buying a Diamond for the first time, combining finances, marriage budgets, and other post that fall into these categories. We are also looking to purchase a home this year before the first time home buyer tax credit expires.

If anyone has some good advice or suggestions for us please let us know...I have bookmarked a few blog post other bloggers have written on some of their experiences and will post some in the future. Any advice or tips would be great because after all, this is a blog that I started not only to start a conversation with others but to help me out with finances in different stages of my life.

I am also hoping to get up and running a little better with postings, right now I am at about 3-4 post per week but want to see if I can make it at least 5 post a week. Please keep posting comments and please give me all of your feedback!

Friday, April 3, 2009

March 09 Net Worth Update: Credit Bad, Emergency Fund Good!

Once again it is time to go over my net worth. My monthly reminder of how I am doing with my finances. Everything seems to be the same except one category...DEBT!!! Actually it is not that bad once I break it down for you guys. At least the stock market is doing a little better than they have, even though my Stocks/Brokerage still seems to be losing some money. With this vacation I am going to go ahead and guess that next month net worth will be down also but we will see. Here is the break down:

Cash saving is up slightly I just keep cracking the whip on myself to keep saving up as much as possible. This has the 10k of my emergency fund, along with my monthly budget. It also has different funds like car, vacation, etc... It also has a house down payment fund which is the next goal I am setting for myself finically. 

Stocks/ Brokerage - I now know why they call it a brokerage, because its going broke every month...ha.

Retirement 401k - There you go...starting to see an uptick in the market, its nice to see it going up for once, I never really followed my 401k until about 4-5 months ago so I never really knew how it felt to be making money over a month. I just knew that watching it lose money every month isn't much fun.

Roth IRA - See previous

Debts and Liabilities - Ouch! This one is going to hurt, but just a little

Credit Card - 1) $935.00 is on my AMEX for my vacation(hotels and rental cars) which I get miles and I will be paying this in full before I get charged interest.

Credit Card - 2) $4200.00 this is a new card I just opened which is 12 month 0% APR.  I have the money in my savings to pay off the remaining  balance if I wanted if something unexpected came up.  $4,200 divided by 12 months = $350.00 a month. I will be paying the minimum of the card every month (2.5% of remaining balance) while putting the rest of what remains of the $350.00 into a high yield saving account to make a little interest off while I borrow interest free. I will be cutting a check for the remaining balance on the 12 month of next year before the 0% APR expires.

Car Loan - I want to put more down against the principle but its just not adding up after putting money away for a down payment for a house.  I currently have 4.2% APR so at least it is not killing my wealth but so much. I would love to do it but I am looking to purchase a house close to the end of the year so I can get the first time home buyer tax credit.

Overall - I am still pretty happy with where I am sitting right now, I have to keep myself honest and hopefully knock down some of this debt down. I have a lot of changes coming down the pipeline this year that I already know of, and of course there can always be unexpected situations that come up that you are not planning for. So, I am going to be thankful for where I am finically that this point in my life and hopefully it will remain getting better month by month. Remember the old elementary song, inch by inch, row by row, I am going to make this garden grow!

Vacation here we come!

Today we are headed to California on vacation for a week. Keep checking back as I am trying to get a couple guest writers from people who have inspired me to work hard and to be smart with money. I wrote a couple of post last night so that I can be posting through next week.

In the meantime, here is 10 Reasons to be a Long-term Bull that I got in my last Edward Jones statement. Here is a link to the whole PDF.

1. The economy is bruised, but it’s not broken. Last year, the value of all goods and services produced in the United States (gross domestic product, or GDP) was $14 trillion. Americans earned $10 trillion in disposable income.

2. It’s not the Great Depression. Though many people like to compare today to the Great Depression, there hasn’t been a run on the banks. There are no widespread bread lines or soup kitchens.

3. Debt/deficits won’t crush the economy. Currently, the deficit is expected to be no higher than 15% – which is the highest since 1943. If you’re concerned that higher taxes may be imposed to pay for higher spending, consider investments that could help reduce future tax payments.

4. 50% drops historically have been an opportunity. 

5. The government continues to support the financial system. While support for banks is controversial (and expensive), it’s designed to prevent the widespread panic and bank runs that occurred during the Great Depression. The Fed will continue to do more to support the credit markets and the economy, entering the market directly when necessary to lower mortgage and other rates if necessary.

6. Stock valuation is compelling. By almost any traditional measure of value, stocks have already priced in a lot of the bad economic news.

7. Inflation is under control. The Fed is keeping a close eye on inflation. However, if inflation does increase from its current level near zero to 2% – 3%, that’s probably a better scenario than deflation, or falling prices, which is a much tougher situation from which to recover.

8. When you feel bad, it can be good. High levels of fear and anxiety, which is often seen after the market has done most of its damage.

9. Good performance often follows bad. There have been only three negative 10-year periods since 1926, but the 10 years ended Dec. 31, 2008, were the worst (-1.4% per year). However, historically, good years have often followed bad ones. In each of the 12 10-year periods following those 10-year periods when market returns were less than 6%, the returns have averaged about 13%.

10. You still have long-term goals you are trying to achieve. A $100 investment that has fallen to $60 has lost 40%, but that investment must now rise 66% to break even. This can be difficult to achieve if the money is no longer invested.

Have a great weekend and even better week!

Thursday, April 2, 2009

How will you spend your 10$ Tax Credit?

The "Making Work Pay'' tax credit, which amounts to around $10 a paycheck, took effect Wednesday, as part of the economic recovery package that Congress passed in February. This is a different form of stimulus than the one the last administration gave , which was all one lump sum. Individuals making less than 75k are eligible for the full credit and those making 95k get a reduced rate. Couples making 150k get full credit compared with couples making 190k.

Last year when I received my stimulus check I deposited it right into my money market account. I'm sorry I didn't need to purchase anything at that moment and thats the only reason I would use it. I could have easily gone out an purchased a brand new surfboard and loved the feeling, but I did not need one I have enough boards already. So I'm sure I did not help jump start a failing economy then and I will not be spending it now just because I see it in my paycheck.

When I moved back east I received a pay increase with a decrease in the standard of living. When I moved, I kept the budget I had in California as not having a pay raise. I used the same amount that I used to live off of out there, to live here . I had an extra amount coming in from my raise and I decided for it to be deposited into my money market and that I wouldn't ever feel the effects of it being in my primary bank account. Not only that, but I found out that I could cut the fat out of my budget and live more than fine.

Everyone has heard the more money you make, the more problems you have. In reality, it is not actually the money that is the problem, but it is the amount that you spend because you are now making more.  So if I receive $10 or $1000 I am am going to keep my lifestyle and spending the same(I must admit I live pretty good). Now if I have a kid or something that forces me to adjust my lifestyle then I will adjust my budget as well, but I will not allow money to dictate my lifestyle. (may I say,not at the current moment, ha!)

So what am I going to be doing with the few extra dollars that I get...I am going to stimulate my wealth and spend my hard earned, hard saved money on something I really want when I want. Not just because I see a bigger paycheck. So what are you going to do with the $10 Tax Credit, let me know in your comments!