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Posted
Sep 26 2007, 01:50 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
Which makes more financial sense: applying extra cash to low-interest debt (we're assuming you're not carrying a credit card balance) or investing it? Investing will likely get you a better return, but freedom from debt is a powerful draw. The bottom line is it's a very personal decision.
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Posted
Oct 12 2007, 10:04 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog The Simple Dollar . It's part of The One-Hour Project , in which you can spend just one hour to put your finances in a better place without a big lifestyle change -- through frugality and other financial choices. Regardless of whether you include individual stocks as part of your investment plan, having a general idea of how a stock works can be an incredibly valuable piece of knowledge. Even for those who only invest via a retirement plan, that retirement plan is usually a collection of stocks. So knowing how stocks work can help teach you how your retirement plan works -- and it might give you insights on how to invest your money more effectively. What can be gained from this? First, you’ll get in touch with your risk tolerance. Most stocks, over the course of a small period, stagger up and down a little, and possibly see a big lurch. If you imagine that you have some significant money in a stock, the sight of it going up and down day after day will probably
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Posted
Nov 01 2007, 12:13 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from Joan E. Lisante at partner blog ConsumerAffairs.com . Sometimes having money is more worrisome than not having any. It means you have to find a safe place to keep it, and in today's turbulent economy, that's not always as easy as it sounds. Many moneyed souls have their bucks sitting in taxable money-market funds, whose assets have reached a record $2.438 trillion, according to Reuters. It makes sense, because most consumers think of money-market funds as unsexy, low-yield vehicles in which to park extra cash. They also think they're about as safe as that plastic piggy bank you kept on your dresser at age 8. But as George Gershwin once said, “It ain’t necessarily so.” For one thing, all money funds aren’t created equal. There are two basic types: Interest-earning money-market accounts designated as “money-market deposit accounts” (MMDAs) are insured up to $100,000 each by the Federal Deposit Insurance Corp. (Coverage on qualified retirement accounts jumps to $250,000
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Posted
Dec 26 2007, 04:17 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
The Dividend Guy has concluded that women investors have the edge over men, based on an article in the Toronto Star detailing research on the subject. The studies mentioned -- and we recommend that you read the Star article -- showed that women's portfolios outperformed those of men. Why would that be, we wondered. To avoid any appearance of subjectivity or sexism, we'll simply present The Dividend Guy's explanations.
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Posted
Jan 10 2008, 01:09 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
Ana's thoughts upon reaching her 35th birthday will sound familiar to many people: "Looking back, I've been a bit of a wild child. I shudder to think of how much money I have spent over the years on alcohol, cigarettes and assorted junk that has long been thrown out," she writes at DebtFree-Revolution. She also has a mere $391 in her retirement account.
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Posted
Jan 15 2008, 03:07 PM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog The Dough Roller . Did you ever notice that personal-finance gurus reduce attaining financial freedom to a number of steps? Dave Ramsey has seven "Baby Steps." Suze Orman has nine "Steps to Financial Freedom." I searched for the phrase "steps to financial freedom" and Google returned 2,050,000 hits (in .29 seconds, no less). That's a lot of steps, and everybody seems to have a different number of steps. I guess if I were choosing one, I'd pick the one with the fewest steps. And they all want to make their steps sound easy. Instead of Ramsey's seven baby steps, how about seven really difficult steps that anybody can climb, but most won't. Well, I guess that wouldn't sell as many books, but here's a simple truth -- attaining financial freedom is simple, but not easy. Over the next few weeks, I plan to write a series of posts about how I attained (and am still attaining) financial freedom. Unlike a lot of the financial gurus, however, I don't look at success
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Posted
Jan 17 2008, 07:04 AM
by
Karen Datko
Rating:
Filed under: college, debt, marriage, The Dough Roller, student loans, children, getting started, stocks, mutual funds, frugal, cars
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog The Dough Roller. The best thing about being 40 is having survived your 20s and 30s. And at 40, I'm considered an old-timer in the personal-finance blogging community. Reflecting back on the past 20 years, I realize that I've learned a thing or two that I wish (oh, how I wish) I had known when I was 20. Here they are, in no particular order: School loans are like a bad date -- easy to get, but hard to get rid of. At 40, I still have more than $20,000 in school loans. Education is important, but I spent far more money during school than I needed to spend. Compounding, like the 1970s Big Red Machine, is pure magic. Assuming you retire at 65 and earn a 10% return on your investments, $1 invested when you're 20 will be worth 2.5 times more than $1 invested when you're 30, 6.5 times more than $1 invested when you're 40, and 18 times more than $1 invested when you're 50.
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Posted
Jan 23 2008, 03:02 PM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
The blogger at Grad Money Matters religiously funds his 401(k) retirement account at work. In fact, he maxed out his contribution last year. He was shocked when he checked his returns earlier this week and saw that they were negative. That's the day he finally understood "why people who have money still worry about money." He also learned some lessons about investing for retirement. First among them is not to check your returns every day if you want peace of mind. Don't fixate on the stock market's recent slide; investing requires a long-term outlook. In that context, his recent 5% loss "is but a ripple in the pond," he says.
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Posted
Jan 31 2008, 07:06 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog The Dough Roller. Asset location involves dividing investments between taxable and tax-deferred accounts in the most tax-efficient manner. As a general rule, mutual funds that generate a lot of dividends or capital gains should be placed in 401(k), IRA or other retirement accounts. Investments that do not generate a lot of dividends or capital gains can be placed in taxable accounts. Following this strategy, I've put all my bond funds, REIT funds and most of my small cap funds in retirement accounts. What happened to REIT mutual funds last year offers a hard lesson for some about why asset location is so important.
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Posted
Mar 24 2008, 11:29 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
Grace's post at GRACEful Retirement will sound familiar to many aging boomers watching the effect of Wall Street gyrations on their retirement accounts. Grace is 58 and playing catch-up after getting a late start on socking away money for her hopefully golden years. "I started this blog last July with $176,000 in retirement savings. Now I'm down to $146,000, notwithstanding the money I keep putting in," writes Grace, who plans to retire in 10 years. That drop, "when I allow myself to think about it, scares me to death." Yet she continues to invest $1,025 a month in index and growth funds. She tells herself she's right to keep buying when the market is down because it inevitably will come back up. She asks, "When do I find out if I passed the test?"
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