Went into Wawa (local gas /grocery place) the other day to treat myself to a cup of chai tea (gift card!). There was an older gentleman there cleaning up the coffee area, refilling straws and cups, etc. Then I went to Wal-Mart to pick up a storage item—basket for remotes (gift card!). Again, there was an older person greeting us—the classic Wal-Mart greeter. Both of these individuals (they both happened to be men) appeared to be well into their “retirement” years.

Now there is nothing wrong with what they were doing, but is what they were doing what you want to be doing when you retire? Not me! I still want to work part-time when I “retire” but I want the freedom to choose when and where I work.

So to make that happen I am saving. Are you doing what it takes so that you can retire the way you want? Everyone’s retirement dreams are different, which means are plans and saving need to be different. But if you haven’t started thinking about it, now is the time to get started. Actually, yesterday is the day we should have started, but the next best day is today. So let’s get started and start planning and saving! Wal-mart positions could get pretty competitive in a few years!

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First we got hit with an earthquake (no damage for us). Then we got hit with a hurricane (lost power for a day, minor landscape damage). Then we got hit with flooding in our area (we were safe, but I have friends who were not so lucky). This is the kind of season where it pays to know your home owners insurance!

I  have a friend who has family outside of Philadelphia where the hurricane really hit hard, mostly in flooding. The friends family suffered extensive losses in their basement from a “creek” that rose rapidly and flooded a whole section of their neighborhood. They lost their hot water heater, furnace, and most of what they had stored in their basement (it was a walk out basement).

Their neighbors suffered damage too – and their insurance agents wouldn’t even come out to see them – no flood insurance, no bother. My friends family was able to persuade their agent to come out – and he noticed something. They had a sump pump. He asked if they lost power. They said yes (they lost power for several days). He took a few pictures, wrote some notes down, went out to his truck, checked their insurance policy online. In about 10 minutes he came back in with a check for $5000. Because they had a sump pump, and it did not function because of loss of electricity, their policy would cover damage from water up to $5000. It probably will not cover everything, but it was a big help.

Their effort to convince the agent to come out paid off. His knowledge of policies and willingness to help paid off. Another example of how important it is to know your insurance policy, and to have the right agent.

Maybe with all the things that are happening around here I need to dust off our policy and take a read!

 

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I don’t usually keep a whole lot of money in my PNC checking account, usually enough to pay the bills and a few hundred dollars more. But last month I averaged $6000 in the account. Most of the monies were waiting to be transferred to other accounts, some of it was to pay a larger than normal bill.

So as I looked at my statement, it showed that I earned a whole 7 cents interest on over $6000! How ridiculous is that? It’s bad enough that banks want to nickel and dime us with fees for everything, then they don’t want to pay us anything for the use of our money. That’s adding insult to injury.

Needless to say I will continue to keep as little money in that account as possible. Another reason to use online banks!

 

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ING Direct lowered it’s savings rate again! It was at 1.095% and now it has been lowered to 0.995%. Less than 1%, yikes. And with inflation increasing, it barely pays to save! I would at least like to tread water with my savings.

Money Market rates stink right now, CD rates are a little better (Ally Bank is paying 1.25% for a 1 yr CD) but I can’t see tying up my money long term right now for just a quarter percent.

Back when rates were soaring, I used to have four online savings accounts but I streamlined it down to two – ING and Capital One. With these low rates I will probably not shop around. For me it’s not worth the hassle to switch at this time.

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It’s that time of year when I rebalance my investment portfolio. Rebalancing is something we all should do at least annually, sometimes more frequently in order to keep our balances in line with what our financial objectives are. This year I only had to rebalance this one time since my investments were not that far off of my preferred balance. Right now my investment mix or balance is as follows:

• Stocks 75%
• Bonds 20%
• REIT (Real Estate Investment Trust) 5%

Within the stock mix I further break it down into Large Cap (35%), Small Cap (20%), and Foreign Stocks (20%). It’s a pretty simple mixture that is right for me. I am not into commodities as part of my retirement savings (too volatile for me!), and if I don’t understand the investment or don’t have time to really research it, then it is not for me either. I also keep my investments in low cost index funds and I buy and hold (except for rebalancing!). Over the years this strategy has done me well.

Anyway, this past year the Foreign Stocks and the REIT did very well so they were a few percentages points higher and needed to be brought back down into balance. It took me maybe 30 minutes online to get everything back into balance. I exchanged some of the money invested in those that were higher (REIT, International) into the accounts that were a little lower (Bonds, Small Cap). Now I should be good for at least a quarter (the most frequently that I rebalance if one area gets really at of line) and maybe for the year (the least frequently I rebalance). It’s definitely a good habit to get into and it will help you in the long run to acheive your financial goal.

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This weeks seminar was on savings and investing – basic info on CD’s, Mutual Funds, Money Markets, etc. Boy is Dave opinionated!

He thinks CD’s are a waste of time. Refuses to consider commodity’s as part of a diversified portfolio (silver, gold, oil, pork bellies, etc.). And he insists that you can make 12% per year in the stock market.And he does not invest in bonds because they don’t make enough for him.

He does stress diversification in your portfolio, but the way he uses the term and the way I do is definitely different. He is only diversified within stocks – small cap, large cam, and foreign. That is somewhat diversified, but to be truly diversified in investing you also need bonds, maybe some cash (money market, etc.), maybe even some commodity’s and real estate (Real Estate Investment Funds, etc.)  Personally, I was disappointed. He stresses diversification, but then doesn’t do it!

The one thing I wish he would have emphasized that he didn’t stress very well is that you need to match your investments with your time horizon. If you are saving for something to purchase within 1 year, your investment strategy will be very different, more liquid and more conservative, than if  your investment horizon is 20 years, where you could lockup your money more and take a little more risk.

My opinion of this seminar topic – Dave is a great motivator and can explain concepts in a very simple way. But his investment advice is a little too simplistic. I will be sticking with my own investment strategy – low cost index funds that help me diversify within stocks and beyond stocks for a truly diversified portfolio.

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This is a guest post by Rebecca Garland.

Making money doesn’t always have to be the drudgery of heading to the office Monday morning with coffee and aspirin in tow. There are lots of ways to use a hobby as a chance to earn a bit of extra, or even translate that hobby into a full-blown career. Granted, rather than telling off your boss and walking away from a steady paycheck to have fun eight to five, you should play it safe and just enjoy a bit of extra spending money on the nights and weekends. When your hobby makes more than your career for an extended period of time, you can start to harbor dreams of walking out.

Penny Stocks

Penny stocks are often touted as being best for those with sound financial experience, but, much like gambling, penny stocks are also a fun way to try and make money using a set amount as an investment. To work with penny stocks, you’ll need to do quite a bit of research on the best places to invest and how to choose winners. Penny stocks are stocks that are traded for less than a dollar per share. This means that you can invest $20 in penny stocks and buy perhaps 40 shares if the stocks are selling at $0.50 per share.

Then, if your penny stocks rise to $1 per share, you now have $40. Of course, by the same token, if they fall to $0.25 per share, you’ve lost $10. Fortunately, the penny stocks will likely rise and fall several times over the course of the day, week, year, and decade, so there is plenty of time to make your money back (or lose it all again). It’s a game, but once you learn how to play, it can be a profitable one.

Online Trading

There is a huge market online for used goods, especially in an economic downturn. You can use this to your advantage if you have time and energy to start searching for treasures. Head to thrift stores and make it a point to frequent garage sales. You can also scour estate sales and even online listings to find things that are being sold for less than they are likely worth. For example, if you find a group of DVDs or CDs being sold at a garage sale for $1 each, you might buy them and then turn around and sell them through an online listing for $2 – $3 each. For each movie you sell, you’ll be making $1-2. If you keep a steady stream of sales, you’ll start to collect a tidy profit over time.

You can also expand your resale business if you have the skills to repair things. Buy broken or old furniture and go to work repairing it. If you have some artistry, you can turn those old pieces into lovely reclaimed works that people pay top dollar for in terms of home decorating. The trick is to simply make the rejected piece into something that is stylish and modern today. If nothing else, buy broken pieces and then fix them again. A good cleaning and perhaps some new varnish and you can sell the piece for more than you got it for on an online retailer or in your own garage sale.

Rebecca Garland is a freelance education writer who specializes in helping readers discover the fun in everything from penny stocks to business plans. You can learn more about Rebecca on her freelance writing website.

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I took advantage of a promotional offer and opened a sharebuilder account through ING (I already have an account with them). If I put at least $50 into the account (which I have), they will put $50 into the account within 4 weeks. Not bad!

I am not planning on doing any significant trading, but since interest rates are so low on savings accounts, etc., I thought I would try to boost my returns a little bit. I plan on being conservative, at least as much as you can with stocks. I will focus on stocks that regularly pay dividends. We’ll see how I do this year!

Anyone else investing in dividend stocks right now? I would love to hear your thoughts.

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As I was painting my wooden deck furniture last night I got to thinking (must have been the fumes). This furniture is 21 years old! Then I thought about the van I talked about yesterday that is 14 years old. And then I thought about the mower I traded in this year that was almost 25 years old. Now, not everything that I have is old, but the things I purchase do seem to last. I buy well made items, and then take care of them. And they “pay me back” with many years of useful service.

Although these items are not stocks and bonds, they are investments. I have spent money on them. I want my monies worth. By spending a little time researching and buying well made items (not necessarily the most expensive), and by spending the time to maintain and take care of them, the items last.

In this era of get rich quick and throw away goods, going against the flow and staying in for the long haul, whether it be in stocks or deck furniture, is the way to go. Wealth is built slowly and in spending wisely.

Hi there - could you help spread the word about A Penny Saved? We rely on word of mouth to get new readers. If you would send someone a link, email, or even mention it to your friends, I would truly appreciate it. Take Care of Your Investments is a post from: A Penny Saved, the best darn personal finance blog around.

Well, I am back from a week of vacation, and during that time it appears we are having a financial meltdown! I’ve been doing a lot of reading and listening to try and get caught up. My bottom line – this thing is so complex that I don’t think anyone really has a handle on it, even the so called experts. Every article or voice has a slightly different opinion on how we got here, how bad it it is now that we are here, and what must be done to get out of here.

Personally, I am not fond of government intervention. But I am afraid that a lot of innocent people are going to get hurt because of what others have recklessly done if nothing is done to shore up confidence in the markets.

At this point, I think I agree with the humorous sentiment that if you must do something now with your financial portfolio, the best thing to do is to turn off the TV, stop the paper, and unplug your computer – that’s probably the best thing you can do for your finances now!

More seriously, I will be doing a few things in the coming weeks and months:

• I am staying in the market, continuing to put money monthly into my 403(B) plan (similar to 401(K) but for nonprofits). I am in for the long haul.
• I will be rebalancing my portfolio to keep it in line with my set financial goals. This is a good thing to do anyway at least annually. I want to make sure my percentage of stocks, bonds, foreign investments, etc. is in line with my targets. I am sure they are out of whack right now.
• I will be building up my emergency fund. It took a few hits the last couple of months because of some small emergencies (car repairs, mower breakdown, etc.). I plan to get it back to where it was, and then maybe increase it a little bit. Now is not the time to be having to borrow money. This crises has made me rethink how much I need/want to keep in this fund.
• Finally, I will keep plugging away at our Home Equity Loan to get it paid off early.

Other than that, I will stay the course and continue to live within our means, which if enough others had done that we wouldn’t be in this mess! I hope you all are doing well and that this crises has not affected you personally. If you get a chance drop me a line and let me know how you are doing and/or what you think about the latest.

Hi there - could you help spread the word about A Penny Saved? We rely on word of mouth to get new readers. If you would send someone a link, email, or even mention it to your friends, I would truly appreciate it. Vacation and Financial Meltdown! is a post from: A Penny Saved, the best darn personal finance blog around.