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Posted
Jun 05 2008, 01:53 PM
by
Karen Datko
Rating:
Meg at All Financial Matters bemoans her friends' and associates' lack of knowledge about managing money. "Every single one of my friends and peers, it seems, are people who couldn't explain compound interest if they had to, ignore the 401(k) matches offered by their employers (despite my pleas), are comfortable having debt, and spend like they all have huge inheritances coming to them," she writes, adding, with hyperbole, we hope, "And these are my college-educated peers. Fellow finance majors, for crying out loud."
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Posted
Apr 08 2008, 07:40 AM
by
Karen Datko
This post comes from partner blog Blueprint for Financial Prosperity. I'm a fan of casinos. I don't know whether it's the pumped-in oxygen, the bright lights, the sounds of excitement and joy, or the free drinks flowing throughout, but I love going to casinos. Sometimes I win, sometimes I lose, but I almost always have a good time putting my hard-earned money on a felt table and seeing if it'll grow and multiply. When I go to casinos, I usually take a set amount I'm willing to lose -- say a few hundred bucks -- and then I enjoy myself. I understand that when I go to a casino, I'm there to have a good time. I'm not there to make money. Sadly, the stock market is nothing like that. It involves pressing a few keys on a keyboard or clicking a few buttons with a mouse. The transactions happen with no fanfare, and there is often little anticipation. Yet, if you try to time the market or day trade, you're essentially gambling. Why would anyone gamble if you can't at least get some free drinks out of it?
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Posted
Apr 04 2008, 06:54 AM
by
Karen Datko
Rating:
This post comes from Trent Hamm at partner blog The Simple Dollar. Recently I was leafing through Jonathan Pond's very good personal-finance book, "Grow Your Money," which I had reviewed a while back. In it, he makes the astute statement that everyone puts their money into three basic groups: necessities, luxuries and saving for the future. The more I thought about that statement, the more profound I thought it was, because it provides a framework for the financial problems ailing many Americans. Obviously, the pile that will get you in the best shape over the long term is the "saving for the future" pile, but people's failure to do that is only part of the problem. The reason so many Americans are in poor financial shape is that they put more than they should into one of these areas to the detriment of others. Let me show you what I mean.
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Posted
Apr 02 2008, 06:17 AM
by
Karen Datko
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This post comes from partner blog The Dough Roller. Some time ago I wrote an article about Timothy Ferriss' book, "The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich." My article questioned just how realistic a four-hour workweek is for most of us, and argued that achieving a 24-hour workweek was more realistic. The other day, while cleaning out my workshop, I uncovered Tim's book and decided to read it again. Oddly enough, I found it more enjoyable the second time through. But I still question just how realistic a four-hour workweek is for most of us, which in turn makes me wonder why the book is so popular. I have a theory about that and a series of questions for you. But first, let me cover the two aspects of the book I really enjoyed.
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Posted
Mar 26 2008, 06:32 AM
by
Karen Datko
Rating:
This post comes from partner blog The Dough Roller. An earlier version appeared on MSN Money here. Traditional retirement looks like this: work until you're 65 or so, and then stop working until you die. More recently, views of retirement have begun to change, as more and more "retirees" are forced to work long after 65. There is a major problem with the traditional approach to retirement, which I'll come to in a moment. But first, how would you answer the following question: How much of your life today is spent doing what you want to do when you want to do it? If I were to answer that honestly, the answer would be about 20%. Yuck! And I don't hate my job. I wouldn't work where I do if I were independently wealthy, but I have a good job, work with good people, and earn a good wage. But I still work. I still get up five days a week, spend one hour getting ready for work, 50 minutes commuting to work, about nine hours at work, and then another 50 minutes returning home. Under the traditional views of retirement, I will keep doing this same routine for the next 24 years, then I'll stop cold turkey and do who knows what until the end of my days. I started The Dough Roller in part because I don't like the traditional way of looking at retirement. And what's worse -- here's the major problem I mentioned a moment ago -- I believe that looking at retirement as something that happens decades from now for many of us is one of the major reasons why so many people don't save for retirement. It's just too far away to worry about, many believe. I want to change that way of thinking, so consider the following questions:
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Posted
Feb 20 2008, 12:23 PM
by
Karen Datko
Rating:
A recent article in Money Magazine prompted Lily at The Honest Dollar to write about parents who don't cut the financial cord to their children. Kids are expensive to raise and educate. Then, she writes, "you'd think that once a child graduates into the real world, the bleeding would stop. Not so." The number of adult children living at home has increased 50% in the last 30 years, according to a University of Michigan study. "All told, a 2007 survey by Ameriprise Financial found about nine out of 10 parents give money to their grown kids for major expenses: credit card balances, car insurance, student loans, you name it," Money Magazine says. Lily, a thoughtful young adult, writes that parents need to pay themselves first. She says, "I buy the conventional logic that a child can get loans for school, for a car, for a house -- a parent cannot get a loan for retirement."
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Posted
Jan 24 2008, 01:12 PM
by
Karen Datko
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Jeremy at Generation X Finance writes that the 401(k) debit card is "probably one of the worst ideas ever." This increasingly popular card allows you to tap your retirement account for any kind of purchase, including your silliest impulse buys. "That's right," Jeremy writes. "Now people can go shopping for that big-screen HDTV and instead of using a credit card or money they have in the bank, they can just swipe their 401(k) debit card and use those funds."
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Posted
Jan 23 2008, 07:08 PM
by
Karen Datko
Since when is it patriotic to spend, wonders our partner blogger J.D. Roth at Get Rich Slowly. If J.D. gets a tax rebate as a result of the proposed economic-stimulus package, he doesn't plan to spend it. "Despite what some politicians and pundits say, I don't believe there's anything patriotic about spending. The notion baffles me," he writes. "The two concepts -- patriotism and spending -- seem completely unrelated." J.D. did his best to avoid writing about recent economic news. His blog is about personal finance and saving money, not politics or the economy. But his readers -- and his wife, Kris -- insisted. In a new post today, J.D. also tackles the stock market and the Federal Reserve's surprising interest rate cut.
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Posted
Jan 18 2008, 07:16 PM
by
Karen Datko
Rating:
Millionaire Mommy Next Door offers a suggestion for making $1 million for retirement, and it all begins with lunch. You don't spend $9.50 for lunch every workday, and instead eat a $3 lunch from home. You invest the difference in a Roth IRA, and "let the account simmer for 41 years," she says. (We can only imagine how much more money you would have if lunch were a simple tuna fish sandwich and an apple, instead of, say, Lean Cuisine.) This wonderful post illustrates the beauty and power of compound interest in a way everyone can understand. Her point is that you can make even small amounts of money work for you in a meaningful way.
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Posted
Jan 09 2008, 05:34 PM
by
Karen Datko
Rating:
Have you seen this episode of "The Office"? Michael, worried about his money (or lack thereof), tells officemates he's declaring bankruptcy. Oscar schools Michael on money, using a three-column spreadsheet to illustrate Michael's spending. One column is for necessities, one is for wants, and the third and largest is what he has spent on things he doesn't need. We can learn a lot from this, writes RacerX of Life, Liberty and the Pursuit of Money. "In other words," RacerX writes, "a trip to Europe is a desire, contributing to my IRA so I don't eat dog food when I am 70 is a want, much less making sure I have my own shelter (a need)."
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