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myblingbling [userpic]

Big News ; BIG SAVINGS.

December 28th, 2005 (11:46 pm)
chipper

current mood: chipper
current song: Airplanes...and the clock ticking...

I will call the 800 number and get the details...
BUT..

http://personal.fidelity.com/products/retirement/retirementintro.shtml.cvsr?refhp=pr

Basically, a ROTH IRA costs you $2500.00 to open up with any bank, well, Fidelity is offering a special right now.. no idea for how long.. where you can open one for $200.00 !!!!
BUT - You have to set it up so that you have an automatic deduction from your whatever-account (bank checking? Savings?) every month for a minimum of $200.00
OR $600.00 quarterly.

Whatever the case.. I want to know what happens if you find yourself being hit with emergency spending and unexpected expenditures etc and you can't afford to pay the $200.00 for a month.. because it says there's no penalty and taxes charged (WOW?) . Hence, why I need to call and get the details.

But whatever the case.... even if you HAVE to pay $200.00 a month, this is a GOOD STEAL/DEAL. In fact. It's amazing... you will earn more with the $200.00 start up than you would with a $2500. start up.
Why? How?

Well.. do the math.If starting tomorrow, your goal was to open a ROTH IRA but you had to plan to save $2500.00 first.. and you did it by the hundreds per month... In one year, $100.00 would give you $1200.00 - so basically, it would take you about 2 years to even HAVE the money for an initial deposit on a ROTH IRA with Fidelity.
BUT, it's faaaarrrr easier for you I'm sure, to come up with $200.00 for a start-up. And yeah, you're paying twice as much in one year.. but you're gaining interest on a chunk o change 2 years in advance compaired to if you wait two years to have the start-up.. and you'll have spent the same exact amount. Essentially, you are paying less money for MORE time on %.
Remember, the basica rule of thumb is what I call the *"2 cents worth".

So, that said, I think I've already convinced myself to buy in on this while time is on my side without having called that number. You'd be an idiot not to!

ALSO - Don't forget!!! Before the year ends!!! GET YOUR FICO SCORE FOR FREE. www.annualcreditreport.com I think is the website.. you can't slack on this as you only get one free report per year and it's better to know your score at the end of a year than the very beginning.

* If you had a choice to earn $1000.00 a day for 30 days OR .02 cents a day that doubled it's daily total the next day for 30 days.. which would earn you more? Do the math. (Day one: .02 cents, Day Two: .04, Day Three: .08, Day Four: .16, Just keep doubling the amount each day and by the time you get to day twenty I'm sure you'll change your tune about investing.

myblingbling [userpic]

How to Hire the Best Mortgage Broker

December 2nd, 2005 (12:09 pm)
geeky

current mood: geeky
current song: Nada

When it comes to understanding what is going on in the mortgage business I always turn to my friend Barry Habib, CEO of the Mortgage Market Guide. This guy knows everything there is to know. And he's been nice enough to share his advice on how to make sure you're hiring a mortgage broker who really knows the business.

Here's the MMG take on giving a potential mortgage broker the once-over:

Make sure you are working with an experienced, professional loan officer. The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way. But how can you tell?

Here are four simple questions your lender must be able to answer correctly. If the lender does not know the answers, run, don't walk.

1. What are mortgage interest rates based on?
Answer: Mortgage Backed Securities or Mortgage Bonds. Not the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. Do not work with a lender who has their eyes on the wrong indicators.

2. What is the next Economic Report or event that could cause interest rate movement?
Answer: A professional lender will have at their fingertips a list of upcoming economic reports such as Housing Starts, Employment figures and, Jobless Claims etc…that can affect mortgage interest rates. Don't work with a broker who is clueless about what's going to make rates react in the near future.

3. When Greenspan and the Fed "change rates", what does this mean… and what impact does this have on mortgage interest rates?
Answer: This may surprise you. When the Fed makes a move, they are changing a rate called the "Fed Funds Rate". This is a very short-term rate that impacts credit cards, credit lines, auto loans and the like. Mortgage rates most often will actually move in the opposite direction as the Fed change, due to the dynamics within the financial markets.

4. What is happening in the market today and what do you see in the near future?
Answer: If a lender cannot explain how Mortgage Bonds and interest rates are moving at the present time, as well as what is coming up in the near future, you are talking with someone who is still reading last week's newspaper, and probably not a professional with whom to entrust your home mortgage financing.

myblingbling [userpic]

Been A While Crockodile - And Speaking Of Shoes...

November 30th, 2005 (11:04 am)
awake

current mood: awake
current song: The Shower calls...And I say Hello!

I've been a little out of commission lately.. Sorry 'bout that. But I'm back and as financially savvy as ever...

All I can say about my abscence is : It pays to have an emergency fund, particularly all things medical. People often think they need to just cover a co-pay and a prescription...but what if that prescription is for a lifetime you find out? Like Asthma medication for example. That's affordable now...but wouldn't it be better to have it covered by your insurance or the interest off your fabulous high-interest paying accounts that I referred you too in earlier entries? (www.emirgrantdirect.com)

Onto the exciting news. I got this off cnn...
http://money.cnn.com/2005/11/29/pf/debt/cards_1205/index.htm

Click on all the types of cards and learn that what I speak of is true when it comes to FICO scores - Get that score up, and you will reap the benefits like no other!

myblingbling [userpic]

ThanksKeeping Day.

November 14th, 2005 (12:28 pm)
annoyed

current mood: annoyed
current song: Jingle Bells...Homeless Smell...

Holidays are dangerous times for the unsavvy investor. Particular if the unsavvy investor is someone who lets thier emotions rule thier money. A LOT of people can disagree with me here but they cannot provide an arguement that I'm wrong on this issue : Guilt is the lamest reason to spend money.
Basically, people accrue thier biggest chunk of debt during the Holiday season because they want to get christmas presents for everyone on the planet just about to avoid looking like a chump, and looking like a poor chump. And oftentimes they charge it.

Remember my rule on credit when it's over 12% APR : You WILL be paying as much as three times the actual price tag in interest if you miss a payment, or do not pay it off in full within your first month. Unlike interest rates on your savings... which is compounding daily - You're credit interest is compounding on the purchases as well as the total, this is what creates that "minimum payment" and that minimum payment will rise in increments based on the collected balance of your debt - DAILY.

Think about it, how else will your credit card company make money off of you? Thier biggest "favour" to you as a customer is usually to waive the minimum fee for the month of December, because they "understand" that you need money most during the Holidays. Wether for travel, 8 days of presents, or a Turkey on Xmas...
So people think they are in the clear till January when the minimum payment kicks in again and they won't be penalized for skipping the payment in December because it was waived as a complement for being a customer to whatever card you're with.

Is it a bonus?

NOPE!!!

Because the interest doesn't take a break. Remember it's everyday...every purchase...every balance. And when you have a high % - it's a nightmare waiting to happen.
Pay your minimum and thensome even if they say you don't have to. Take advantage of this "break" and pay the biggest amount you possibly can. You will not be sorry..you'll feel it..but hey, you should have thought about that BEFORE you charged everything on a card.

But there's also another issue at hand: Guilt.
If you know anyone or are related to anyone whose going to make you feel guilty for not going into debt for them... then I suggest firing them as a friend or family member if need be. Not only were they expecting a gift...and maybe even got you a great one.. but they are being highly inconsiderate to think you need more debt than you can afford for thier "wants" and not thier "needs".

Scan your resources for gifts, surely if you are offered some sort of benefits at work, like tickets to a show or something - then you can give them that and yeah it may not be impressive, but it's the thought that counts. Some of my most treasured belongings would be considered junk to most people. I had a friend give me a tile for xmas. She's my best friend and she painted and fired a tile. She always has little money and I'm more than happy to accept her 1.50 gift because it was personalized to me and again, it really is the thought. And I don't expect her to spend hugely as I do not know her to be that person.

That all said, if someone DOES give you an amazing gift - it's because they wanted to. And if they have the means to do so...then let them. But be clear that you do not have the same resources and you feel a little less-than because of that. If they don't mind...then you're off the hook, if they do mind, well this will be a lesson in finance for them not to spend money in exchange for high expectations. A lesson in finance...the greatest gift of all.

Now on to my next topic:

POOR PEOPLE at HOLIDAY TIMES.
- - - -
Listen, I'm very sorry there's a lot of poverty in the world, but that's not your responsibilty or fault. There are government programs specifically designed for people with little to NO income to survive off of with an alarmingly low amount of paper work required. Being homeless in America is much easier than being a homeless person in Somalia. When is the last time you saw someone so down and out and starving and cold that they literally just keeled over and died in the street and everyone went about thier business?
Not in the USA and not often.

I will go ahead and sound like a heartless bastard for a moment here and say : I'm sorry Dinisha Washington had 11 illegitmate chirrens and don't know who none of 'em Daddy iz. But that's why smart parents make efforts to educate thier daughters to not get knocked up all the time when thier main source of income is working at a movie theatre.
Granted it's a case by case situation, there are those who are not mentally fit or physically fit for jobs - and there are those who claim to be both and are flat out lying because they don't wanna work and hell, they are having children because they get more welfare that way and they are spending the money on drugs (which instigated actuall food stamps via WIC in the first place!)

Whatever the situation, if you do not have the money to give and you are giving it to various charities... you are fooling yourself.
Because if this continues, you will be needing these charities hardcore with enough time.

That's just the reality. You may not be ABLE to afford to give - So long as you have any remote debt especially.
But what you CAN give, is your time and effort. Rather than drop ten dollars in a Salvation Army bucket : Why not VOLUNTEER at a Salvation Army. You can be the Santa guy that rings the little bell constantly if you're so inclined. Or work a Soup Kitchen - Hell maybe you make better soup.
That constitutes as giving.
People give money because they feel guilty and by giving the money they feel like they helped someone and that makes them feel good about themselves.

That is lame.

You cannot buy your happiness. Sure you'll feel good about yourself... until the next month you can't make the phone bill payment and tell me, whose going to help YOU out over that??

So donate your manpower. Donate your brainpower. Donate your time.

People who can donate money (and will) are the ones who can afford it. I.E. Rich people. But keep in mind why they are rich - every fortune started at 0 in this country. Those are usually the people who know a thing or two about saving and investing.

Don't misconstrue this entry for being greedy. Greed is when you horde something to yourself that you logically CAN spare. Greed, is buying 125 dollar jeans instead of the 30 dollar jeans which are made from the same material and thread - When there is someone you know who has to charge groceries on thier credit card because money is so tight.

It's that friend who complains they have no money ... while they suck down thier $9.00 martini.

- - - -
Speaking of Martinis and Guilt:
- - - - -

Tipping. I was recently in a situation where someone, who seemed a little mathmatically challenged (and I'm not frowning on them because I have a hell of a time with math - take away my various calculators and I'm doomed to the point of embarassing.)

Ignore those friends who want more money from you at the dinner table when the bill comes and you've thrown in your share. Those people fucking suck.
You are not obligated to tip anything. I suggest that you tip your waiter or waitress as a common courtesy - but then again, if you can't afford much, what are you doing in a resturaunt where tipping is insinuated in the first place?? Hit McDonalds if you need to dine out cheaply so bad.

But I will say, 2.00 for every 10.00 spent is being generous. Round up the amount or round down the amount depending on the service. Believe me, so many people are so worried that they're being stingy they end up paying triple the 15%. (And I do 20% after 6pm - So a royal "fuck you" to some common dinner guests who guilt me on tipping.)

If the waiter or waitress has THAT much of a grudge on thier tips... then they'll wise up and find a new job where they don't have to rely on tips. That's precisely why I don't wait tables. I did once and realized it required way too much effort, for inconsistant pay.

If you spend 2.00 in tips...for everytime you eat out (and usually you spend more and you know this) : 3 dining out expieriances in 1 week is 6.00
In a month that's 24.00
times a year = 288.00 of money you earned and just...GAVE away. Add that to any charity money and hell, you've pretty much forsaken yourself half a month's rent!
So reconsider your "emotions" before you open your wallet from now on.

It sucks, but you CAN NOT AFFORD TO GIVE. (I assume you can't if you are reading this as this is an LJ dedicated to keeping people on the str8 and narrow so they can get thier finances back on track.)

Remember, the more money you save and invest now, the more you have later... you have plenty of years on you and before you know it, you will be able to tip every Tom Dick and Beatrice until your smile goes completely round yer head.

You're not a scrooge. But you're not an idiot either.

myblingbling [userpic]

The Difference In Debt.

November 9th, 2005 (11:49 pm)
aggravated

current mood: aggravated
current song: Nada

Credit cards are not the devil. Poor consuemerism is.

The following people are worthy of your debt: College, The Doctor/Dentist, The Bank (Mortgage) and the like.

These debts, although seem reasonable, are not necessarily, this situations are what your SAVINGS (not your credit cards) are for: Helping a family member in a time of need, buying an emergency flat tire, Xmas gifts, Birthday cards, animal supplies if you're a pet-owner.

And THESE are the WORST and most unjustifiable (and most common) reasons to gain debt on : DVDs, Cds, Computer crap, CLOTHES + Food, "accessories" that someone said you needed but who really NEEDS an accessory? Etc.

So the point, if you see an item in a store that you FEEL you need (and remember my golden rule - it works for me, maybe it will work for you... - NEVER LET YOUR EMOTIONS RULE YOUR FINANCES!! EVER. It's the biggest trap! As soon as you FEEL or WANT something... that's letting your emotions get the best of you, then comes the justifying part as to why you deserve to give in etc... Credit cards will essentially, over compound interest... take whatever it is your looking at... and in 30 days or less, or each month, depending on your interest rate - You will pay triple the price tag. garunteed.

Now there's a difference between annual and compound debt - one is more lucrative than the other... sadly, that one is what your credit card uses. So earning above 8% on a credit debt is VERY bad. If you gain 4% on a savings account... that's very good in this day and age.

At this point, maybe ask yourself. How much money does your money make when it sits in the bank. Does it sit there for a while or do you live paycheck to paycheck?

Get out of the bricks n morter accounts people!

myblingbling [userpic]

Allocation Of Earnings.

November 9th, 2005 (09:12 am)
dorky

current mood: dorky
current song: Allegria Documentary

How much you earn is only HALF of your profit.

Yup. If you figure it this way. (This is gonna sound like basic elementary school math but go with me here..)

If Talula (Hoovenbocker) earns $2000.00 a month - and 500.00 goes to rent, 200.00 to apt. utilities, 200.00 to student loans, 150.00 a month to food, 30.00 to bus fares, cabs, and or gas (and if it's going toward gas then we should assume Talula has a car that requires insurance and loan or lease payments so we'll ignore the car idea and say she uses the bus for now) and maybe 90.00 is her minimum for her various credit debt(s) :

Talula keeps 830.00 of her monthly earnings.

That ain't good. In a perfect world, your living expenses should never exceed 25-30% of your earnings. But even in today's reality, some people are lucky to not lose half thier earnings on living necessities. So rule of thumb - if your living costs are more than 49% then you are financially chasing your tail and cheating yourself. C'mon, no wonder why you don't want to save that money or invest it in an account that can't be touched for years to come! It's so little already! You need to have cash for the unexpected, and keeping it real (yo') you need some money for fun.

This is where the line of "fun" needs to be drawn. First, if you're not sold on the idea of finding a cheaper apartment or eating less a month (let's be real) or walking to work - then we're going to have to assume the 500, 200, 150, 30 are givens that can and will not be scooged on. 880.00 = out of 2000.00/mo is less than half. So you're well within your right.

This leaves debts to be dealt with, you legally cannot ignore your debts (ESPECIALLY YOUR STUDENT LOAN.... more on that later) but, let's face it, you can't afford them...
Or can you.

It's time to celebrate what I call: SUCKFEST 2005!!!!

Have you ever worked a job or went to a summer program or took a class that lasted a few months and ssssuuuuccckkked...but you endured it and became the better person (hopefully)? Well, you need to suffer yet another Suckfest financially to make the next few months enjoyable.

I mentioned that with debt, it's not the highest balance that should be paid first, or the most, it's the account with the highest interest that needs to be heavily hit with a financial one-two punch. All the others can handle the minimums (at least 5-10-50 dollars above thier minimums please) but the high interest debt is the one to focus on. If your student loan has the highest interest and you've already consolidated them or gone into a defferment then don't worry - this is considered GOOD debt. Pay the minimum, plus 50.00 more.

Of your monthly leftovers, being $830.00 - you CAN do this.
The sooner you cut out putting things on your card and nip your spending habits in the butt in general, the sooner your debt STOP increasing by anything other than it's interest.
This is common knowledge I know, but never implemented by most.

Of the 830 a mo. , you're already meeting your living expenses! So keep 150.00 in savings if you need that piece of mind - but take as much as you really can and hit that debt. The sooner the debt goes away and the monthly minimums lower themselves (because the interest is based on a percentage of 2 now 4% of your collected balances) your monthly take-home will go from $150.00...... to $920.00 a month!

$920.00 will buy you a new TV, A more comfortable mattress, a new coffee makers, movies and DVDs and meals out on the town etc.... It's sure tempting and judging by your credit debt you already have some sort of sense of self-rewarding where you feel you deserve every material thing yet...not financial earnings for some odd reason...

But re-consider what your NEEDS are over your WANTS with that newfound $920.00

It CAN (and if you will it to) buy you:

A mutual fund.

A few CDs (I prefer CDs of year-long value and no more because interest rates on those fluctuate so often each year and you don't want to screw yourself over)

Interest in the Savings account I hope you've set up by now (4% Emigrantdirect.com is the highest one you'll find these days)

And, a Roth IRA (unless you want to fund you company's 401k...especially if they offer you a match after vested interest).

So let's say, $300.00 a month - towards a Roth at 8% (This will, if you let it and contribute 300/mo from 45 years (and you stopped investing 300.00/mo by 30 years = $1.05 million roughly) OR a 401k match-for-match (you put in 300.00... your boss puts in 300.00 - who couldn't use free money?? By the time you've invested 54,000.00 total at age 40... you'll actually have 104,000.00 - match for matches will collect taxes in the end, there's no way to escape it, but you can still gain on the interest if you roll it over even without additional contributions after age 40 (assuming your maybe 25 when reading this) ... that's a WISE investment.

$200.00 in a CD at 4.70% will earn you (INGDirect.com is offering a 30 month 4.70%... you have a 50/50 chance on a significant earning on that one...if we knew for sure how the economy will do during the next three years then you'd be at the advantage huh?) you'll earn in three years, $229.54... an extra $29.54 for free! Sure it may not sound like alot, but when you roll over the profit with the invested sum into a CD with a higher interest rate the following year : ($229.54 at 4.75% for one year) you'll have $239.88 - basically the bank PAID YOU almost $40.00 (ten dollars each year) but the increment of interest won't leave you at a 10.00 a year profit, because you still add in your 200.00 investment, plus the profit, plus the higher interest rate you can qualify via your CD choices or your savings, it is very likely you can double that 40.00 of free money one year, triple it the next, quadruple it in 3 years and so on.

Money babies!!

- - -
If you invest the rest of the remaining monthly take-home in your 4.00% each month (200.00 went to a CD, 300 went to a Roth or 401k - that's money you earned but put in the don't touch categorey) $920.00 a month minus a one time only $200.00 and a monthly $300.00 would leave you 420.00 for the first month of your investment adventure, and 620.00 every month after to go into your 4% savings account = hoping you don't touch any or more than a little of the savings investments = in just 3 years, you will have earned

$24,197.34 ($420.00 initial savings deposit into a 4% interest rate account, and $620.00 monthly contributions into said account for three years at 4% = $22,120.00 of YOUR money... earns you $2,077.34 of free money.. plus your CD and it's earnings = $2,177.22)

That's more than one month's entire income for talula - for free. In three years. Yeah it's a long time sorta... but that extra money can be reinvested each year for a better deal. By this equation, you can actually, and easily earn a year's worth of earnings for free in slightly over a decade.

A year's worth of paychecks... for free.

And it all came from you paying your debts, and taking that money you usually paid towards VISA to yourself each month in moderate interest accounts. Now, don't take my calculations as bible because some years the interest rates will suck and some years they'll rock out. Right now they're only starting to rock out as best they can thanks to Alan Greenspan working to raise the points because for the past few years they've sucked. Take advantage of interest rates no matter what they are each year and you can't go wrong.

The key here, is to be patient. You will never make a zillion dollars just by investing in savings and CDs. They're actually common practice amongst most people. But you will earn a significant amount of free money during a time you'll need it more (and you will need it more years from now than you do today because your Student loan will have accrued interest as well) than ever. If you get this free money though... it's no skin off your back give or take should you dive into the wonderful world of the stock market.

That's an entirely different entry.

Make cents?

- - - -
Take your monthly earnings, and invest them in and ONLY in accounts that offer 3.5 % or more interest. This accounts will not be found in your typical bank on the street - those are like legalized robberies. You need to find them online. Online banks are very different.

Get rid of your wants right now. find something else. But stop wasting you monthly income on things that you "feel" are worth it. They are costing you more in the long run and you need to admit to yourself, even though you "enjoy" it. You "enjoy" financial security more.

The point of money is not to spend it. Despite what most people may think. The point is to have it when you NEED it. And when that's all taken care of, then you can start using it to change aspects of your life that will improve the quality of your life.

myblingbling [userpic]

Guilt Free - Financially Free.

November 8th, 2005 (11:12 pm)
exhausted

current mood: exhausted
current song: Nothing.

It occurred to me, for most people, they spend out of boredom and/or guilt.

Huh???

If you own a puppy, you don't care how many people hear you say how much you love it.

If you own a boyfriend ( ! ) or have a girlfriend, you tell everyone how you love having them around. Ideally.

If you get a pair of shoes or see a show...you exclaim, openly , your satisfaction.

Right?

So how come when you run into an unexpected amount of cash - you keep it on the D.L.? Could it be because you feel GUILTY for having it? Could be. Because money (and having money) is such a catalyst for potential relationship disasters (friends and family can fight over it and some people may be expieriancing a difficult situation they'd rather not be reminded of...such as paying off all thier debt or something.) we have kept the subject of money taboo.

Yup. Finances are more a taboo topic than sex! Since these conversation rarely go beyong "oh don't have it", "I have it" , " I wish I had more" - we never discuss them and get each other's expieriances and feedback on the subject. Not like when we exchange ideas for relationship advice. No one tells anyone exactly how much they earn because they don't want to be judged usually. Money and talking about money makes many people uncomfortable.

Dare I ask, How do you feel about YOUR money?

Enter: Cash Over Value. (COV) = You must cut out the luxuries of today so you can afford the luxieries of tomorrow if that's what you're interested in. For example: Cable or Netflix is the best example for anyone who may be reading this. I don't know exactly what the costs are as I have neither: But I'm going to guess 60.00 a month for cable and 20.00 for Netflix each month.

$80.00/mo = $960.00. That's almost an even 1k! So, imagine that you're a creative and social individual who doesnt' need or want cable & netflix. You save $960.00 total!

Now this is where MyBlingBling comes in. When you divide the 960 back up to 80 a month...and instead of paying it towards entertainment...you pay it to yourself in a Roth IRA each month at 8% = in 20 years time, continuing on paying your "cable" each month to the bank, You will have (take your age add 20 years....obviously) you will have well over $20,000. BEFORE you calculate the interest. Any guesses as to how much it would be WITH the interest?

Think about that the next time you tune into "charmed".

myblingbling [userpic]

Quick Tips Today That Will Make You Happy Tomorrow :

November 7th, 2005 (02:11 pm)
amused

current mood: amused
current song: Ker-Ching!

I do a lot of reviewing, But here's the update so people don't have to do tedious searching through my archives.

1. If you work for a company that offers a 401(k) plan.... you are NUTS to not get on that wagon. However, since most of these situations are based on what is called "vested intrest" and you maybe see yourself as job-hunting in 3-5 years then I say skip the 401(k) and get a ROTH IRA. Not a traditional one.
And when I say get a ROTH or 401(k) : I mean do it yesterday. It's THAT imperative. Did I say imperative? I meant, LIFE or DEATH.
Sure a chunk of your paycheck is going to an untouchable account until 30 years from now or so.... BUT.. you won't even notice it's gone because...

2. Change all your w2s and claim as much shit as you can. Remember you DON'T want a income tax return each year. That's not bonus money like everyone thinks. It's money you earned originally and could have used sooner through out the year but Uncle Sam took it, because you let him by claiming 0, and spent almost half of it...and gave you the change. Way to get screwed over. Remember if you claim too many things you may end up OWING the IRS and of course, you'd rather not have that on your mind either. Just something mid way, maybe a small debt equal to a small return is the best way to go? Sounds like a good plan to me. Not only could you use that money today, but that's money that can go to your ROTH or 401(k). Now, if you want to invest in either or both of those types of accounts....and still have cash for yourself..

3. Have the money from your paycheck direct-deposit itself into your 401(k) if you have it. That's usually the only way they do it, and some companies will offer you a match for match investment rate up to a certain amount each year! The great things about this and the ROTHs... when if goes directly from your paycheck into these accounts, that's BEFORE tax money. So you don't pay taxes on it. Yup. You read me correctly.

Don't let the government take money out of YOUR hard earned paycheck. How about, YOU take the money out, BEFORE they tax the net worth each week or month or however you get paid, and that tax-free money will go directly into your retirement fund, and if you start now, with a good interest rate.... the money will just about triple in 30 years time thanks to compound interest.

Cool huh?
It's up to you how much you want to invest, but I say invest as much as you possibly can to meet the company match - because if they are offering a match (and most if not all places do) for your 401k... that's FREE MONEY.

Your untaxed dollars - invest - double - accrue interest.

That's like losing a quarter in the couch, and when you take it out of the couch 30 years later...it became a 50.00 bill. You only originally lost a quarter and gained 49.75 back!

myblingbling [userpic]

Cars, Car Insurance Tips AKA: Financial Sink-holes.

November 6th, 2005 (09:05 pm)
groggy

current mood: groggy
current song: Real Cool Club Podcast

I want a new car.

But I know better. Sure the convieniance is great and $20,000.00 sounds like a reasonable price for some moderately luxurius car of some sort and you'd look good in it but...
If you have the option to not buy it, I say don't. Especially if you live in a city (like Seattle) where it's more cost effective and environmentally sound to use public transport.

I know I know, maybe you love your car....but is it reaaaaallly worth debt?

Cars are financial sink-holes because they do one thing. Cost you money...and those costs increase (from the moment you buy it, maybe pay interest on it..and then pay for gas, tune ups, and then eventually bigger services...and anticipate paying for repairs after accidents etc.) and they definetly depreciate in value.

As soon you drive it off the lot...it's worth 20% less instantly.
- - - - -
My main points (and I can go into details later if you wanna know):

Don't buy new. Buy used.

Don't lease a car... get a LOAN for a car. The interst rates are better and you don't have to worry about the deal changing over on you like a lease with interest and contracts of 3-5 years etc. You'd end up paying double for car in the long run.

If you buy used, You can get a NEW used car that's hardley a year old, or only has a few miles on it: and that car will be worth 20% less when you buy it, but at least that time you won't be PAYING for the loss of the 20%. Some other sucker did already.

If you HAVE to get a new new new car and I can't talk you out of it. Get it as close to the INVOICE price as possible. NOT THE MANUFACTURER'S.

Auto-dealers have made it an art to fleece you. Don't make a purchase from a person you feel a "good vibe" from. That's not a good vibe. That's a good salesman.

You won't get a car exactly for the invoice price, but try to get it at least about $1,000.00 above it. Because that extra 1k is the dealer's incentive from the company and he's gonna want that no matter what.

Does any of this help?
- - - -

Car insurance. You may not want to have a high monthly bill or whatever, but contrary to popular belief.... You want LOWER premiums and the best way to get them is to UP YOUR DEDUCTIBLE. I'd say most are for $250-$500.00... try to get it for 1000.00 : It will not only lower your premiums, but your insurance company won't be so concerned about every fender bender and ding. Those things are not what insurance are useful towards despite what you may think. If they drop you after having a few dings...and paying for them... the day your car gets blown up or stolen...when you are facing HUGE costs in damage or whatever, your insurance company will be nowhere when you need them most.

So..

No New Cars. Try Public transit.

Buy Used/NEW cars.

Loans...Not leases.

Up your deductibles...lower your premiums.



Example of saved money: I don't have a car here in Seattle, I use the bus. It's annoying but easy. And I'm glad I haven't spent cash on insurance and gas during this hard times for car-owners (especially here in Seattle with that mega lame monorail tax!) .... because my dentist needs that exact amount of cash for my root canal and fillings and crowns. And I HAVE health insurance. I'm just glad I have the money for it!

myblingbling [userpic]

Up The Score & Stock The Store.

November 6th, 2005 (08:46 pm)
energetic

current mood: energetic
current song: Real Cool Club Podcast

Okay. So for people who want to just "skim" for answers - I can only say you're missing out on the details and it's the details that are important. Unfortunately. Details, in the finance world are like..bricks...that...build your money bin. If you are missing so much as one...all your cash is gonna eventually leak out..all over Duckberg.

But to review:

You MUST by this point, KNOW your FICO score.
Once you have that info, you need to boost it by:

1. Pay On Time (The minimum on ALL bills or more. I say at least 50.00 above the minimum.)

2. Keep your credit in ratio to your debt. If you have a 3000.00 credit limit..your debt is to NEVER exceed 45% of that. Ever ever.

3.Keep your history : If you pay off a debt on a card you've had forever...like years and years...don't take a sigh of relief and say "Oh I paid that debt off and I learned my lesson and I am getting RID of that card!!Yay!!"

Don't.

(Whhaaaat??)

Keep the balance at 0.00 and cut the card up if you must, then call the card company and call thier bluff (and when you have no debt, you can.) and negotiate that they bring down the interest to 8% at least. If they refuse, then you can tell them you will offer your consumer-power to another company. Watch them change thier mind...seriously. You want to hang on to your credit history. The older your accounts, the higher your score goes up over time. If you erase your oldest or only cards....you will essentially be erasing the majority of your FICO. It's not a good idea.

4. Pick n' Mix : Much like your investing, diversify your debt. First, you should ideally have none, but if you do - and if it's a lot , then you want it all on the account with the lowest interest charges. But more cards (and more than 3 or 4 is insane) will increase your credit to debt ratio...provided you only use one - or use all for super small amounts and pay them all in full each month. It's the accounts...not the cards...that you need.

- - - -

So, you're slowly but surely boosting your score, now is as good a time as any to boost your savings.

Don't try and save money when you have debt. It's pointless. It really is. If you are afraid of running out of money then there's some psychology behind that that isn't connecting to the world of logic. Because 10.00 in your savings...is like tacking on 20.00 to your debt. Make sense? The more you save...that amount is your debt simultaneously increasing because your interest rate still climbs on the card. EVERY. DAY.

Sometimes at Xmas, cards offer a "get out of jail" free pass. Like, you don't have to pay your bill at all in December...but you do in January.

They aren't doing you any favours. Sure you may not have to pay a minimum or a finance charge for the Holiday season....but instead of 25 days, you have almost 60 days of collected interest on whatever your ending balance in Nov. was !

Again, the rule of credit : Whatever you pay on credit, if you don't pay it off IN full well before the due date....take it's price tag and triple it. That's the best way to guestimate the interest on it by the billing date a month after.


Next entry (coming right up) CAR INSURANCE!!! ( go get a snack!)

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