We Saved Over $1,000 in Taxes This Year By Contributing to Our Vanguard SEP IRA

Vanguard SEP IRA

One of the coolest things I discovered last year in terms of retirement planning was that I have the option to contribute to yet another tax-deferred savings plan – the SEP IRA. What’s even better is that not only was this contribution above and beyond everything I was already saving with my 401k and Roth IRA, but it also accomplished one VERY important task – saving me a boat load of money in the amount of taxes we owed for year on our Federal return. This year the story is even better!  With all the money my online business made, I’m going to end up contributing close to $4,000 this … [Read more...]

What are Mutual Funds and How Do I Invest in Them?

What Are Mutual Funds

What holds you back from investing? Is it stocks? Do they scare you to death? If they do, I really don’t blame you. All the “ifs” in the beginning can be overwhelming! Which ones do I pick? Where will I find the right stock metrics and information to tell me? Why do they keep bouncing around in price?  How long until I have a heart-attack? Would you prefer a way to “stick your toe in the water” and not have to deal with such wild fluctuations? If so, then let me introduce you to the world of mutual funds. “What are mutual funds” you ask? Well, for starters, they are where I … [Read more...]

What To Do With Extra Money In Your Budget – 3 Good Choices

crossroads

At the beginning of every new year, one of the first things I do with our finances is to take a hard look at our budget and see where we can get the most bang for our buck. At first this usually involves doing the normal thing that most people do - taking a look at our bills and seeing where we can shave some expenses.  But there’s something else I like to do with the extra money in our budget that I feel is just as important as cutting corners on expenses.  I like to take a look at where we can best grow it! There are lots of good options for what to do with extra money if you’ve got … [Read more...]

Extra Income Taxes – How I Messed Mine Up and What You Can Do to Get It Right

Extra Income Taxes

Even financial bloggers don’t always get everything right. This year I found out there is a dark side to earning a decent amount of passive income.  While making money outside your job is absolutely great, you have to remember that at some point you have to report it all to the IRS.  And that means paying a whole lot of extra income taxes! While the concept of having to paying taxes on your earnings is no secret to anyone, the way you have to go about it is a little bit more complicated than simply waiting until February and then paying in a thousand bucks one time.  In fact because of … [Read more...]

Our Ultimate Plan to Retire at 45 – December 2014 Update

money plan

If you have any aspirations to retire early some day, then this is the post you’ve been waiting for.  It’s my annual update to our plan for financial freedom. Trust me – you’re not going to find another plan like this anywhere else. For some time now I’ve been saying that my wife and I plan to retire when I turn 45 years old.  How do we plan to pull off such an ambitious goal?  That’s what this plan is all about.  We put numbers to paper and actually see what our cash flow will look like all throughout the future.  Hence the name of the blog, this is our “money design”. If you have … [Read more...]

Can the Experts Help Us Find Good Stocks?  9 Month Update

find good stocks

Welcome to another quarterly update of how my stock portfolio is doing and whether or not the experts were able to us find good stocks to invest in.  Every year I invest a small portion of my portfolio into individual stocks to gain experience with them as well as attempt to increase my wealth.  My long term goal is to build a stable portfolio of dividend yielding stocks that will eventually provide me a steady stream of income. If you’ll remember: The last time I bought stocks back in January, I noticed that each of the major financial websites had their own “analyst opinion” section that … [Read more...]

Should I Go for a Pension Purchase Option or Invest the Money? – A Reader Question

Pension Purchase Option

A few weeks ago I receive a really great question from a friend of mine (we’ll call him LJ) regarding whether or not he should take a pension purchase option that his employer is offering him.  Here’s the email he sent me: I'm thinking about buying 5 years of generic pension service time. Seems like a no brainer, right? Not quite. I've had the actuarial done and it will cost me $37,800. A good chunk. I have the money in a 457 account and can roll it over to my pension administrator. I plan to retire in 22 years at 60 when I am eligible to draw the pension. I have 13.5 years of service … [Read more...]

2015 Maximum 401k Contribution Increases to $18,000 – How You Can Get There

2015 Maximum 401k Contribution

If you’re one of those people who are really good at saving their money diligently for retirement, then the IRS has some good news for you next year:  The 2015 maximum 401k contribution has just been increased to $18,000 (up $500 from 2014). For those people 50 and older, the $5,500 catch-up limit was also bumped up to $6,000. I’ve personally been saving up to the 401k maximum for a while now and am looking forward to bumping up my contributions.  By saving so much I know that I’m not only helping my family to get closer to reaching financial freedom, but we’re also taking advantage of a … [Read more...]