As part of my annual financial checkup, I have updated my “Money Design” for financial freedom. This is my plan to one day automate my income rather than rely solely on employment income. My plan can be summarized by the flow chart below:
Archive for December 31, 2011
My wife and I just returned from a short vacation to a local casino. We went there to see our favorite comedian and decided to make an overnight trip out of it. This included hitting the casino floor to test our luck. We had a great time and surprisingly won back almost all the money we started with.
More than once I heard skeptics compare investing to gambling. “What’s the point? I might lose all my hard-earned money!”
Yes, it is true that you could put all your money on one stock and lose it all. But that would also be a ridiculous and non-advised investment strategy. Taking a more common approach and investing in an index fund would have quite different odds.
You see gambling is much different than investing in many ways:
I was almost the victim of identify theft.
On the evening of Dec 23, I received a call from the Chase Freedom Visa Card Fraud Protection alerting me that someone had tried to buy almost $500 worth of goods from a Macy’s in California. Because I live in Michigan, the purchase was quickly red-flagged and denied. Fortunately, I was spared.
The phone call with Chase was quick and painless. They asked me which transactions I’d like to dispute, closed my old account, and told me I’d have a new card with a new number within a matter of days.
Merry Christmas everyone! I’d like to thank all my readers and visitors for making this a very encouraging first year of blogging. I wish everyone the best in health and happiness!
Saving money can be a real challenge. You know you should, but some months it feels like you’re barely making ends meet. And no matter how much you actually make, it never feels like enough.
Fortunately, there are some painless steps you can take to get your savings back on track. Below are a few of my favorite tips for ways you can save more money:
If you’re doing a good job of saving up for retirement and looking at the possibility of meeting your goals sooner than later, one of the next biggest hurdles you’ll have to overcome is how to physically get your money out of your retirement accounts.
For most personal accounts such as a 401(k), 403(b), or IRA, you have to wait until age 59-1/2 or get slapped with a hefty 10% penalty fee. There are special exceptions to the 401(k) and 403(b) that may allow you to access your money without penalty by age 55. But even still, what if you are able to retire even sooner than that?
Fortunately, this is where a 72(t) comes in.
A 72(t) is a little-known tax code within the IRS laws that allows an individual under the age of 59-1/2 to take their retirement income out of their retirement account through a series of Substantially Equal Periodic Payments (also called SEPP).