Lately there have been a number of great posts and strong opinions about having an emergency fund, and I wanted to weigh in with my own opinion and experiences. I have had a long a standing love-hate relationship with emergency funds. Sure, you need them for critical situations! But my problem (and I think this is where a lot of people struggle) is how to save up enough. Depending on which advice you subscribe to, the recommendations can be anything from 3 to 12 months of your gross monthly income. If you’re a typical American household making $60,000 per year, that’s anywhere from $15,000 to $60,000 that we need to have in the bank! Ouch! Is it any wonder we fail at this? … [Read more...] about My Alternative Emergency Fund Strategy and How It Works
Personal Finance
Getting the Highest Dividend Stocks Using the Dogs of the Dow
Finding the best, most reliable, and highest dividend stocks the market has to offer doesn't have to be a chore. Let the winners step forward and do all the work! All you need is to use a well-known stock picking method known as the Dogs of the Dow investment strategy. The Dogs of the Dow is based on two simple premises: 1) Out of all the dividend stocks out there to buy, the top performing blue chip companies from the Dow Jones Industrial Average will be your best bet for producing stable returns. 2) By buying the highest dividend stocks while the yield is high, you’ll likely be buying them at a time when the price is low and likely to go higher (the old buy low, sell high mantra). Sounds good so far! But how exactly … [Read more...] about Getting the Highest Dividend Stocks Using the Dogs of the Dow
How to Read Stocks and Evaluate Their Basic Metrics
One of the biggest things that separates individual stock investors and mutual fund investors is how to read stocks and evaluate them on an individual basis. Unlike most mutual funds, individual stocks can carry a great deal more of risk. Pick the wrong ones and there goes your hard-earned money! So how do we evaluate a company's stock metrics to know if it will be a good investment? Fortunately, all this basic information you need to understand a potential prospect has been summarized by most major news outlets into single, bite-sized profiles that are convenient for you to access and are constantly updated. The goal of this post will be to walk you through one of these pages of metrics and explain how to read stocks. For this … [Read more...] about How to Read Stocks and Evaluate Their Basic Metrics
Tips for Achieving Early Financial Independence
The following post is a guest contribution from Early Financial Freedom. Giving the state of the economy, can you really achieve early financial independence? Is it a mirage that you can only imagine? My wife and I would like to assure you that it is real and attainable if you are serious about it. The bottom line is that you need to desire financial freedom in order to achieve it. The desire is the driving force for making early scarifies for later pleasures. How We Got There: Let me introduce myself. I am an engineer from New York and am happily married with a wonderful 7-year-old son. After working 10+ years as a hands-on engineer and later as a supervisor, I resigned in April 2012 to stop working for others and join forces with my … [Read more...] about Tips for Achieving Early Financial Independence
Which Is Better – Rental Income or a Stock Market Index Fund?
Who’s ready for some financial smack-down? If there’s any two groups of investors I can think of that are more divided, it’s those who invest in real estate and those who invest in stocks - like a North and the South of financial planning if you will. So the question here is this: Which one actually has a better chance of making you more money in the long run? This may be a controversial debate, but we’re going to settle this argument the MyMoneyDesign way – by running the numbers! So let's see what we come up with ... … [Read more...] about Which Is Better – Rental Income or a Stock Market Index Fund?
What Is A Stock?
Do you actually know what a “stock” is? Don’t be afraid to admit that you don’t. I would bet that a lot of people who say they do (or think they do) do not in fact actually understand what one really is. One of the fundamentals I preach on MyMoneyDesign is to know what it is that you’re putting your money into when you invest. So if you invest in stocks, let’s explore of the introductory basics of what they are. … [Read more...] about What Is A Stock?
How Much Money Would I Make If I Rented Out A House?
When it comes to buying stocks, the old rule of thumb is to “buy low and sell high”. If you’re fortunate enough to understand this saying, then you’ll know that it doesn’t just apply to stocks. It’s meant to teach you to look for opportunities. So even though the value of my home seems to go down, down, down every year, perhaps therein lies an opportunity. As I walk the dog through my neighborhood, there is an abundance of houses for sale. And what’s more is that I KNOW they are selling for FAR less than what I paid for mine. So this gets me thinking: • If I have any aspirations to buy a house and rent it out, is now the time? … [Read more...] about How Much Money Would I Make If I Rented Out A House?
Dos and Don’ts in Mortgage
Are you looking to buy a house? The purchase of your home may be the largest expenditure you will have in your life. Therefore, applying for a home loan is a process that you should not take lightly. The cost of a house is just your beginning expense. Points and the interest you must pay for a mortgage during the term of your loan will be much more than the price of the house. That’s why paying attention to the details of your home loan may turn out to be more important than the sale price of the home. To get the most out of your mortgage, consider the following: … [Read more...] about Dos and Don’ts in Mortgage
