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Posted
Jul 28 2008, 04:37 AM
by
Karen Datko
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This post comes from J.D. Roth at partner blog Get Rich Slowly. A reader recently pointed me to a National Public Radio story about the frugal artists of New York City. Columbia University released a study of 213 visual artists over the age of 61. Their average income? About $30,000 a year. According to the NPR story: Most of them said they were satisfied with their lives. However, many reported that they also have had to make daily economic compromises. They don't eat out, buy clothes at flea markets and rarely travel. Many of these artists manage to make it in New York through frugal living. All they seem to need is some food, a roof overhead and the time and opportunity to practice their art. This is a nice story, with some lovely bits in the interviews with individual artists. More than that, it was just the shot in the arm I needed.
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Posted
Jun 05 2008, 01:53 PM
by
Karen Datko
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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 04 2008, 06:54 AM
by
Karen Datko
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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
Mar 26 2008, 06:32 AM
by
Karen Datko
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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
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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 18 2008, 07:16 PM
by
Karen Datko
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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 02 2008, 10:21 AM
by
Karen Datko
You just might be a PF redneck if you get all excited about an IRA "because you figured it's time for the NRA to go international," or if you're worried about diversifying "because you never did any versifying in the first place." Steve at brip blap, who claims bona fides because he grew up in small-town Mississippi, provided this bit of light reading during the holidays, with a nod to his inspiration, Jeff Foxworthy.
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Posted
Dec 21 2007, 06:28 AM
by
Karen Datko
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This post comes from Trent Hamm at partner blog The Simple Dollar. Even though I'm on a very healthy financial track, I'm still prone to the weakness of buying material goods. I think of things I want, and over time I tend to talk myself into buying them, spending money I really shouldn't be spending. Many readers ask why I shouldn't be spending that money. It's my hard-earned money, and I'm in at least a reasonably decent financial position. Besides, you only live once, right? Let's use that philosophy when evaluating the purchase of a game for my Wii. Let's say I want to buy a new game that costs $50, even though I have three Wii games at home that I enjoy playing and am not close to mastering. This is actually a common temptation for me. Let's consider two scenarios.
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Posted
Dec 20 2007, 01:21 PM
by
Karen Datko
Leave it to that innovative thinker brip blap to turn the No. 1 personal-finance commandment -- spend less than you earn -- on its head. That advice won't get you where you want to go, he says. "It is the wrong way to think. The right way to think is this: Earn more than you spend," brip blap advises, and then offers a quick off-the-top-of-his-head list of 30 ways to make extra money (if you count the last one, which is a tongue-in-cheek "marry someone rich").
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