Which is Better – Paying Off Your Mortgage or Investing the Money? – Part 1

MyMoneyDesign - Table 150K Mortgage

It’s one of the most widely asked, light-hearted questions among people: • “If you won the lottery, what would you do with the money?” There’s the usual responses like buying a fancy new car, going on a shopping-spree, taking an exotic vacation, that thing you always wanted, etc. But after all you filter out all the fun responses, most people come to two very sensible responses: • “I’d use the money to payoff my house” • “I’d invest the money” Although not all of us will be winning the lottery anytime soon, we make much smaller-scale decisions along these lines all the time. For example: • Every paycheck when your money goes into a 401(k), have you ever considered if putting it towards your house was the better option? • Have you … [Read more...]

Your Bills Are Negotiable

Invoice

One of the many things my job has taught me is that the price of everything is negotiable. It’s basic supply and demand. If you don’t give someone the price they want, they’ll go find it somewhere else. The bottom line is whether or not they want to make a sale and keep you as a customer. That’s the little story I tell myself about every six months. What happens every six months? My TV service goes from the promotional price back to the normal price. And when it does, without hesitation, I call the cable company and politely ask “Is there anything you can do for me?” I don’t yell. I don’t stomp my feet. I simply ask the question fully understanding that the worst thing they could tell me is “no”. But they usually don’t … because the … [Read more...]

Retirement Contribution Limits Increased in 2012

MyMoneyDesign - Retirement Savings with the New 17K Limit

On Friday, the Internal Revenue Service (IRS) announced there will be an increase to the contribution levels for 401(k)’s, 403(b)’s, and the other similar government sponsored retirement plans. The changes will be as follows: • You can now contribute up to $17,000 (up from $16,500 this year) to eligible plans starting in 2012 • Catch-up contribution limits for the same eligible plans will still remain $5,500 for anyone age 50 and over • No change to the IRA (Traditional, Roth) contribution limits - $5,000 annually and $6,000 for anyone age 50 and older. • Roth IRA income limits will be increased by $3,000 to between $110,000 and $125,000 for singles / heads of household and by $4,000 for $173,000 to $183,000 for married couples filing … [Read more...]

My Money Design Update – New Section on Passive Income

Update

As promised in my post earlier today, I have created a page entirely devoted to the topic of “passive income” that will contain ideas, advice, and everything else worth sharing. This can be found at the “Passive Income” section in the top menu bar under the sub-heading “Passive Income Ideas”. Please explore these suggestions and feel free to share your comments. This page will also be continually updated as I collect new ideas or have new experiences to share. … [Read more...]

What is Passive Income?

What is Passive Income - Example 5

Passive income is often defined as income that is continually earned with as minimal effort as possible from the person receiving the money. This is usually accomplished by creating a self-sustaining service or product that can be automatically distributed or maintained. For example: • Monthly dividend checks from your stocks • A rental property that earns you rental income each month • An eBook that you sell online from a website Do you see how each of these examples are different from your regular job? If you stopped going to your regular job everyday, what would happen? • You’d be fired and your income would cease In each of these examples, you don’t “have to go to them”. The dividend checks appear as long as the company has … [Read more...]

Adventures in Refinancing, Chapter 2

Mortgage Offers v1 2010-10-10

My quest to get our mortgage refinanced started off with great promise – like a hot air balloon up and off into the sky. But … it didn’t take long for it to come crashing back down onto the ground. Here are my experiences this week: Local Mortgage Company: The first place I called was a local mortgage company that was recommended to me by my neighbor. I have a very strategic reason for choosing this company: • My neighbor and I have the same exact model house. Our neighborhood is a new-build subdivision built around 8 years ago. My neighbor is also getting a home appraisal right now and that will give me a very good idea about what my house is worth (say to +/- 10%). After answering some initial questions, the agent gave me three … [Read more...]

Book Review: “Get Rich Click!” by Marc Ostrofsky

Get Rich Click

With a name like “Get Rich Click! The Ultimate Guide to Making Money on the Internet” by Marc Ostrofsky is a giant collection of tips and advice on just about everything you could do to start making money online. It covers dozens of topics including: • E-Commerce • Understanding Search Engines • Online Advertising • Improving you Search Engine Optimization (SEO) • Using affiliate marketing • Owning marketable domain names • Creating valuable content • Taking advantage of social networks • Setting up payment processing • Marketing for mobile phones • Using Internet videos • Partnering with non-profits … [Read more...]

When Can I Get My Retirement Savings?

Your Retirement Income Streams

When you’re creating your “money design”, there are a lot of options for income streams available to you at retirement. Depending on how early you plan to retire, it will be very important to know what the minimum age is you can start withdrawing your funds. The rules may influence the number of options on the table as well as have important legal and penalty implications. Using irs.gov and several other websites, the following chart is an overlay of all the popular traditional retirement plans and when they can become available. … [Read more...]