The other day I was having a conversation with a few of my coworkers about how long we'd be "okay" financially if we were to lose our jobs. (None of us were in any sort of trouble, it was just one of those conversations.) Much to my surprise most of them said they didn't think they'd last more than a month. A month? Perhaps I'm brain-washed from living in this money-blog community of mine, but doesn't everyone know by now that you're supposed to have 3 to 6 months worth of emergency money stashed up at all times? Disaster could strike at any time whether you're ready for it or not! And if you're not prepared well in advance to handle such a situation, you'll find yourself in a whole lot of trouble. Why Don’t We Do A … [Read more...] about 3 Painless Ways to Build Your Emergency Money Fund
Personal Finance
Ask MMD: Should I Do a Rollover, Pension Lump Sum or Annuity?
How do you know you’re a true financial geek? The answer: You get excited when one of your friends asks you a money question because it means crunching some numbers with Excel! Okay … maybe not to that extreme, but that’s pretty much how I felt recently for a friend who had a question about whether or not to cash out his pension with an old employer. Here was his email: So I attended a webinar today about the buyout (with my old employer). Attached is a snip of the five options they gave us and what the amounts would be. Rollover to an IRA or another employer’s plan = $33,165.41 Rollover to the old employer’s 401k plan = $33,165.41 Take a pension lump-sum cash payment = $23,215.79 (minus taxes) Begin collecting monthly … [Read more...] about Ask MMD: Should I Do a Rollover, Pension Lump Sum or Annuity?
What are Mutual Funds and How Do I Invest in Them?
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 started when I first invested – long before I ever bought my first shares of individual stock. But even today, after everything else I’ve learned, … [Read more...] about What are Mutual Funds and How Do I Invest in Them?
What To Do With Extra Money In Your Budget – 3 Good Choices
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 it. You might apply it to some kind of debt you have so that you’ll end up saving a boat-load in interest payments (after all, saving money can … [Read more...] about What To Do With Extra Money In Your Budget – 3 Good Choices
Extra Income Taxes – How I Messed Mine Up and What You Can Do to Get It Right
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 the mistakes I made, I’ll likely have to pay a penalty for my negligence. If you’re someone who freelances or makes a decent amount of extra income … [Read more...] about Extra Income Taxes – How I Messed Mine Up and What You Can Do to Get It Right
Our Ultimate Plan to Retire at 45 and Achieve Financial Freedom
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 any desire whatsoever to retire at 45 (or any age really), but you’re not really sure how you're going to do it, then this post is for you! I'll … [Read more...] about Our Ultimate Plan to Retire at 45 and Achieve Financial Freedom
Can the Experts Help Us Find Good Stocks? 9 Month Update
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 is supposed to tell you how the stock is going to do over the next 12 months. Even though I buy my stocks based on qualities like long-term earnings … [Read more...] about Can the Experts Help Us Find Good Stocks? 9 Month Update
Should I Go for a Pension Purchase Option or Invest the Money? – A Reader Question
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 currently. This would make it 18.5 years. The reason that I'm considering this is that my pension multiplier is going to be reduced on Jan 1st from 2 to … [Read more...] about Should I Go for a Pension Purchase Option or Invest the Money? – A Reader Question
