Took a Break, and continuing to take a break (if I feel like it)

Hi Team.  It’s been a while.  Life is busy and there are many things I would rather do than spend oodles of time updating this blog on a quasi regular basis.  I did have an excellent Christmas season and a vacation to SE Asia over Thanksgiving.  And a most excellent powder day skiing a couple weeks ago (it was the kind of day that completes your season, even though it was in December).  And those are the things that are important to me – family, food, friends, traveling and skiing (in somewhat that order, depending on the day). 

Going forward, I will post sporadically, or whenever I feel like it, and people will continue to not read this blog.  But, for the 2 people who somewhat liked what I wrote I about, there is no reason to flood the streets with tears. I will be posting over at Harry’s blog on what we have agreed to be a monthly basis.  

Be sure to check over there and read his blog, as it is good stuff.  And buzz on over and take a look at my first guest post for him on Being Average.  Not only will you find no one is average, but it is a terribly misleading number.      

Miscellany – Memorial Day Weekend Edition

Life has been SO much fun for us lately, we’ve neglected ol’ Nelly here.  Seriously, we’re putting in landscaping and all the digging is being done by hand.  Combine that with evil travel for work and we have some very exhausted individuals.  Perhaps our BMI will improve…But, we’ll be back to regular posting next week with one caveat…we’ll post on Tuesday instead of Monday, since it is a holiday here in the US of A.

In other news…

Who’s LOVING bookface?  We mean facebook.  If you got in at $42 like a lot of schmuck’s did, you’re only down 24%.  If you got in at the IPO price, what’s a 16% loss?  Still, at a ~75 P/E today and EPS under a dollar/share, have at it.  And of course, let us spike the football and tell you we told you so.  Well, we sort of correct, we thought at least the institutional investors would have made some money.  But everyone who bet for FB, has lost.  Time will tell if you get to dance a jig in our face.  But for now, we shall gloat.

We’ve also figured out how to save over 20% on ALL purchases at home depot.  Remember, we’re doing landscaping, you didn’t think we’d get reemed by the man did you?  Before we give the big reveal, a few words are needed.  We’ve always maintained that we are not out to monetize this blüg.  And that is still true.  But, the links in the paragraph do benefit us.  If both people who actually read this blüg know about our little secret, we face additional competition for saving money.  So, if you like our blüg, or if you read it here first, we are appreciative if you use OUR links if you find what we are about to say is cool.  If you want to bust our balls about this, we can remove this paragraph and life can go back to normal.  So…how to save 20% off of everything at home depot or lowe’s.  First, we sign up at plastic jungle’s website. Then we cruise over to TopCashBack.com, sign up, type “plastic jungle” in the search box and click on the appropriate box to save 4.5%.  You can then peruse all the discounted gift cards at plastic jungle.  Home Depot and Lowe’s are discounted 7%.  So, if you make a $100 purchase, you only pay $93.  Of course, you paid $93 for $100 worth of spend, so you take off 4.5% of $93 you earned at TopCashBack.com.  This leaves you with ~$89, or over 11% savings just doing these two things.  If you have a good cash back credit card (and everyone who can keep their spending in check should), you make another 1% off of $93, bumping the savings up to 12%.  And, if you are smrt, you have found a 10% off coupon somewhere (Lowe’s and Home depot honor competitor’s coupons) or you are a Vet (thanks for your service) you ALWAYS save 10% off at both Lowe’s and Home Depot.  So your original purchase was $100, you effectively paid ~$79.52, or 20.5% savings.  A little work, but we’ll take it!

Vanguard has closed it’s high yield bond fund to new investors.  We’re not big fangürls of high yield funds, but it seems people are flocking to them.  This isn’t the first time Vanguard has closed its fund, so don’t worry, they’re just trying to smooth everything out for long term investors.

And NPR’s Planet Money is barking up the College Tuition tree.  We recently wrote low interest rates on student loans boost tuition price, but PM is saying going to college is like buying a car.

Have a safe weekend.  Tuttles.

 

Bonds – Types

1. Types
2. Bond Pricing & Risk
3. Buying a Bond Mutual Fund

For some reason, stocks are much more understood than bonds.  Bonds are nothing more than loan to an entity, aka a debt investment, with the promise of the entity to pay interest in some form and repay the principal back after a pre-arranged duration.  Perhaps it is because we have to crunch actual numbers to understand the value of bonds instead of just sticking our finger in the air and saying, “that looks about right!”  Either way, we hope to show bonds are nothing to be scurred of.  In fact, we are all probably aware of how bond pricing works if we have at one time taken on debt.  With bonds, you are just on the other side of the table.  And after our series, a reader should be able to make educated decisions about investing in bond mutual funds.

The war on savers, more than just CD interest rates

Recently we read Robert Wenzel’s brazen speech delivered at the fed. Regardless of who actually attended the speech, bromances are spawning.

In conclusion, it is my belief  that from start to finish  the Fed is a failure. I believe faulty methodology is used, I believe that  the justification for the Fed, to bring price and economic stability, has never been a success. I repeat, prices since the start of the Fed have climbed by 2,241% and there have been over the same period 18 recessions...The noose is tightening on your organization, vast amounts of money printing are now required to keep your manipulated economy afloat. It will ultimately result in huge price inflation, or,  if you stop printing, another massive economic crash will occur. There is no other way out.

We all know interest rates for savings are hardly anything to get excited about. Anyone can feel the pinch at the grocery store while seeing their money in a CD is loosing spending power. But, is the Fed’s policy of keeping interest rates low just hurting your savings account? Here are three other ways low interest rates are hurting savers.

Buying into the Facebook “IPO” is stoopid

We interrupt our normal coverage of our Protecting Income series to bring you part 2 of our Dose of Reality series.  If you missed part 1 or it isn’t fresh in your mind, hop on over to learn why comparing yourself to Warren Buffet is not a good idea.  Here in part 2, we’ll explain why investing in the highly anticipated “IPO” of instabook is a bad idea.

Protecting Income – Social Security Survivor & Disability Benefits

1. Life Insurance
2. Disability Insurance
3. Shopping for Life & Disability Insurance
4. Social Security Survivor & Disability Benefits
5. Will Life insurance benefits be taxed?
6. Emergency Fund
7. Umbrella Insurance

Social Security is a program often detested, but it is a program that fills many of the holes in people’s retirement and financial planning.  Our aim is to dissect the benefits one can receive if they become disabled and the benefits their dependents can receive if they kick the bucket.  We use the Social Security handbook, which is available online (www.ssa.gov/OP_Home/handbook/), and back up what we say with what is written in this resource.  We link to the pertinent parts of the handbook as we write, so if you are curious, or think we are off our rocker, you can click on the link and it will take you to the applicable section of the handbook.

Protecting Income – Shopping for Life & Disability Insurance

1. Life Insurance
2. Disability Insurance
3. Shopping for Life & Disability Insurance
4. Social Security Survivor & Disability Benefits
5. Will Life insurance benefits be taxed?
6. Emergency Fund
7. Umbrella Insurance

Shopping for both life and disability insurance can be a daunting task.  And while we typically don’t like to use services by people who have “agent” in their title, using one for obtaining life and disability is advised.  Our agent helped us with all the paperwork, met us at our work to sign the papers, came to our home to talk with us etc.  He certainly made the experience much easier.  AND when our nasty habit proved to be a problem, he was able to go out and find another company which satisfied our criteria without having to do another medical screening.  Tres simple.  The price is the same whether you use an agent or not, so you should use the service of a good agent.  There are plenty out there, so if you run across one you don’t like, move onto the next one.  Wash, rinse and repeat until you find an agent you like.

Protecting Income – Disability Insurance

1. Life Insurance
2. Disability Insurance
3. Shopping for Life & Disability Insurance
4. Social Security Survivor & Disability Benefits
5. Will Life insurance benefits be taxed?
6. Emergency Fund
7. Umbrella Insurance

Did you know you are more likely to become disabled than you are to die?  We don’t know if that is true, but you hear it a lot and there are some old statistics sited on the interwebz from agencies we have never heard of.  Not to say they are invalid, just that we can’t vouch for them.  The Social Security Administration claims you have 30% chance of becoming disabled before you reach retirement age.  Either way, you still need disability insurance.

Disability insurance is tricky.  Life insurance will seem simple after going through all this mainly because when you are dead, you are dead.

Whoo-hoo-hoo, look who knows so much. It just so happens that your friend here is only MOSTLY dead. There’s a big difference between mostly dead and all dead. Mostly dead is slightly alive. With all dead, well, with all dead there’s usually only one thing you can do.

-Miracle Max, The Princess Bride

Ok, aside from what we all learned in The Princess Bride, being dead is cut & dry.  Being disabled, now that is interesting.  It is similar to being sick, it means different things to different people.  Someone can have a headache and be sick.  Or they can have a cold.  Or pneumonia.  And being disabled, means different things to different insurance companies.

Protecting Income – Life Insurance

We have come to realize that the Personal Finance blügs are stuffed full of, “Yea! Roth IRA!,” “Debt is evil,” “Earn more with a blüg,” “Landlord = Passive Income” etc.  The same themes seem to be recycled and regurgitated in different size chunks and a different color.  But, one topic is rarely covered, investing.  Actual, investing advice.  While we don’t pretend to be experts, we are going to start series for putting people on the path to retirement and achieving their goals.  Perhaps this is not as interesting as how much we spent on clothes last week.  But, actual investing articles aren’t regularly covered in hot & heavy detail in the personal finance blüg-o-sphere.  We choose not to disclose our portfolio size and age because we believe our ideas should stand on their own.  That is to say, it doesn’t matter if we are 25 year old millionaires or 50 year old wannabe retirees with $10k to our name, because our ideas are valid regardless.  Well, maybe it would give us some street cred if we did unveil our portfolio, but our ideas should stand without the backing of (or lack there of) our personal portfolio.  And perhaps this will bring the readership down from 1 person to 0 people.

We still plan to post twice a week, and we may jump around from series to series or whatever we think is important.  But, you’ll know what is coming down the pipeline.  And if you want to see something or see something sooner, let us know.  We are thinking of adding a “carnival” type post on Fridays, but focusing more on those who ignore us or offer up misleading information.  But right now, we’re still at 2 posts per week, Monday & Thursday.  Without further adieu…

1. Life Insurance
2. Disability Insurance
3. Shopping for Life & Disability Insurance
4. Social Security Survivor & Disability Benefits
5. Will Life insurance benefits be taxed?
6. Emergency Fund
7. Umbrella Insurance

Ok, so after our diatribe above about blügs not talking about investing, we start out talking about a non-investing topic.  But, protecting your income is SOOOOOOOO important, that we will kick off with this series.  Your ship can be sunk if you aren’t protected.

At one point or another, we will all think about the need for life insurance.  And while this topic is covered ad nauseous in the personal finance blüg-o-sphere, we have some additional points to offer.  First, only consider life insurance if someone depends on you.  If you vanish like a fart in the wind, will the loss of your income result in others eating cat food?  If not, you don’t need life insurance.  That funeral thing is a crappy sole reason to take out a life insurance policy.  If no one depends on your income, you should be debt free (see entire personal finance blüg-o-sphere on why it is a bad idea to be in debt – “bad” debt as it is coined – and how you can escape its grasp) and have an emergency fund in cash (or CD’s) that should cover those expenses.

IRA to IRA to IRA Rollover in one year?

Why surfing the interwebz, we’ve run into some potentially misleading information.  Well, it most definitely can be interpreted as being misleading, but the intent of the individuals is unknown.  Of course, the point of this blüg is to make sure people don’t use this misleading information.  So, regardless of what someone’s intention is, we hope people walk away with more knowledge than they did before they invested a few minutes in what we have written.

Over at Retire by 40’s blüg, “Ray” gave some advice in the comments that certainly deserves an asterisk.  And, we put that asterisk in the comment section.  But, here is what “Ray” said which could be misleading.

What people don’t understand is you can roll it over to say Vanguard and if you don’t like them, then roll it over to Etrade and if you don’t like them, roll it over to Schwab etc.

Usually from start to finish it’s no more than 7-10 business days if you do it right…

The implication here is that you can just rollover whenever you please.  Which is true, but not without consequences.