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• How to cope with a lousy 401(k) plan

  Posted Aug 25 2008, 05:46 AM by Karen Datko
  Filed under: Investing, Retirement, Saving, Get Rich Slowly

  This post comes from J.D. Roth at partner blog Get Rich Slowly.

  "The Mole" is a certified financial planner and public accountant who, in his spare time, provides a behind-the-scenes view of the financial-planning industry for Money magazine. In a recent column, the Mole explained how to deal with a bad 401(k) plan.

  "401(k) providers don't actually care how they make money," he writes, "just as long as they make a tidy profit." The providers can make money by:   Read More...

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• Why it pays to ignore the financial news

  Posted Jun 23 2008, 05:44 AM by Karen Datko
  Filed under: Investing, Retirement, Saving, Get Rich Slowly

  This post comes from J.D. Roth at partner blog Get Rich Slowly.

  Financial news can be dangerous to the health of your investment portfolio.

  I spent some time recently reading articles about the stock market. What I found was mostly hysterical hype ("Gasp! Dow Jones Industrials tumble 400 points!"). All the financial stories seemed to be written as if our investment horizons were days, not years. No wonder people panic when the stock market hits a rocky patch.

  But do daily market movements -- even 400-point drops -- really matter? How important is up-to-date financial news to the average investor?   Read More...

  Discuss ( 4 comments) 2,113 Views Digg this | Email this | Link to this

• What if you didn't start saving early?

  Posted May 05 2008, 04:08 AM by Karen Datko
  Filed under: Investing, Retirement, Saving, Get Rich Slowly
  Rating:

  This post comes from J.D. Roth at partner blog Get Rich Slowly.

  "Saving is the key to wealth," I wrote recently while trumpeting the extraordinary power of compound interest. "If you do not spend less than you earn, and if you do not save the difference, you cannot build the wealth you desire." The younger you are when you begin saving, the more time compounding has to work in your favor, and the wealthier you can become.

  "The next best thing to starting early," I wrote, "is starting now."

  Other options

  A few readers noted that while the mathematics of compounding makes sense, it's not motivational for those too old to take advantage of its full force. "This is pretty depressing for those of us who spent our 20s with practically no income thanks to universities," wrote one reader. Her sentiments were echoed by several others.   Read More...

  Discuss ( 6 comments) 2,345 Views Digg this | Email this | Link to this

• Don't panic! Coping with financial mistakes and setbacks

  Posted Apr 07 2008, 06:25 AM by Karen Datko
  Filed under: Investing, Spending, Saving, Get Rich Slowly
  Rating:

  This post comes from J.D. Roth at partner blog Get Rich Slowly.

  When I was young and stupid, I became addicted to spending. I got my first credit card in college, and over the next 15 years, I accumulated $35,000 of debt. I'm debt-free now, and have even begun building a nest egg, but I didn't reach this place without making a lot of financial mistakes along the way.

  And I still make mistakes. Dealing with mistakes and setbacks is an important tool in your personal-finance arsenal.

  Preventing problems

  The best defense is a good offense. I used to spend a lot of time reacting to problems: bounced checks, car repairs, soccer injuries, and -- worst of all -- my own dumb choices. I never could seem to get ahead.

  Then I realized that the best way to defend against financial setbacks is to actually prepare for them before they arrive. Simple, I know, but it's the simple stuff like this that forms the basis of smart personal finance. Two methods in particular helped me deflect many setbacks.   Read More...

  Discuss ( 3 comments) 4,268 Views Digg this | Email this | Link to this

• Use purpose-driven investing to achieve your goals

  Posted Mar 03 2008, 05:57 AM by Karen Datko
  Filed under: Investing, Spending, Saving, Get Rich Slowly
  Rating:

  This post comes from J.D. Roth at partner blog Get Rich Slowly.

  Do you save for one thing at a time, or do you pursue several goals at once? If you're like me, you work toward several financial goals simultaneously, but you dump most of your money in one account.

  It's easy to forget how much you've saved for each goal. And it's easy to borrow money from one objective to pay for something else.

  In his book "The Six-Day Financial Makeover," Robert Pagliarini advocates "purpose-driven investing." I've found that I can apply that concept to my personal bank accounts as well.   Read More...

  Discuss (no comments) 1,014 Views Digg this | Email this | Link to this

• Mortgage prepayment plan: Own your home in half the time

  Posted Feb 25 2008, 04:58 AM by Karen Datko
  Filed under: Investing, Housing, Saving, Get Rich Slowly
  Rating:

  This post comes from J.D. Roth at partner blog Get Rich Slowly.

  Because I recently eliminated all of my nonmortgage debt, I have a significant positive cash flow. The $1,000 per month I was putting toward debt can now be used for investing. I'm making maximum contributions to my Roth IRA, of course, but that still leaves several hundred dollars each month available for other purposes. This has forced me to re-evaluate my financial goals.

  For the past year, my wife and I have discussed making accelerated payments on our mortgage. I've written about this choice several times at Get Rich Slowly, and it seems clear that mathematically it makes more sense to invest the money. However, it's also clear that eliminating a mortgage offers a tremendous psychological boost. I've never heard anyone say they regret owning their home outright.

  I've researched a variety of mortgage-acceleration schemes:   Read More...

  Discuss ( 2 comments) 3,606 Views Digg this | Email this | Link to this