Category Archives for Invest & Retire

5 Things to Remember When Investing in a Rental Property

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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The following is a guest post. Enjoy!

• How much money will it take to get the home in move-in condition for tenants?
• Should you be looking into tax benefits?
• Does the property have the potential to provide you with a steady income?

How about you all? Have you ever invested in a rental property? If so, what steps did you take to make sure it was desirable/would be rented out regularly? 


If you haven’t yet invested in a rental property, what has made you resist doing so? Was it monetary, or a desire to avoid the burden of being a landlord?


Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

• Very interesting post! I like articles pertaining to becoming a landlord, as I could definitely see myself getting involved in renting out properties after finishing my graduate school program and obtaining a regular job with a more substantial salary.
• However, the approach I would probably take is to first buy a house/condo to live in myself for several years while I made progress paying down the mortgage. Then, when I was ready to upgrade to a larger home, I would keep ownership in the old place, move in to the new house with my family (the two houses can be in the same city/location – that’s no problem), and then start renting out the previous house to tenants.
• @ My principle concern with buying real estate just to rent it out – 
  • With the way the real estate market has been for the past several years in the US, the main worry I would have with owning a rental property is not whether I could actually do my homework properly to determine whether a place is desirable to tenants or not, but rather there is enough demand for the place to rent out in the first place.
  • For example, I currently live in a condo complex that maybe has several hundred units. However, it feels like about half of the units are empty currently. Of course, this could be related to them all being “for sale” and not an accurate reflection on the strength or weakness of the rental market. However, it still definitely prompts the question.
  • As such, before becoming a landlord, I would probably want to get a very concrete sense of the rental market overall in the town in which I lived.
  • Currently, I’m not sure of any good online resources to do this – do any of you all know of any?

***Photo courtesy of http://farm2.static.flickr.com/1406/1455052642_43acd1ab29.jpg

Easy Like Black Friday Morning Weekly Roundup – # 4 – November 25th, 2011

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Click here to enter my free $201.40 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is November 30th, 2011 (this coming Wednesday).

Each week (even though I missed the past several weeks! – Oops!), the purpose of the Easy Like Sunday Morning Weekly Roundup series is the same – for me to be able to connect with you, the readers, on a more personal (non personal finance informational transmission only) level, encourage community, and also to give back to the other bloggers around the blogosphere who have mentioned My Personal Finance Journey throughout the past week. This week, since I have gotten behind in doing a roundup for several weeks, I decided that I didn’t want until Sunday to put together this week’s edition. And, since it is Black Friday, that’s the reason for the minor name change! 

As far as the theme goes, the title of the roundup gives it away. The roundup theme is named after the Lionel Richie song, Easy Like Sunday Morning (which I play once a week while putting this together), to remind us of the importance of slowing down at least once a week to take appreciation for that which transpired over the past few days.

So, without further ado, let’s get started with this week’s roundup!

Weekly Updates from Jacob’s Personal Finance Journey and Life

• I mentioned in the opening paragraph of this post that I missed doing a roundup the past few weekends. However, I did not mention why. 
• As far as my life in general, November has been a SUPER-busy month, as it often is for a lot of people in today’s society. 
• At the beginning of November (November 4-8), my girlfriend and I took a vacation to New York City so that she could run in the New York City Marathon. 
• Then, almost immediately when I came back from that trip, I traveled to Richmond for the Richmond / McDonald’s Half Marathon on November 12th. 
• This race is my favorite road half marathon running race of the year, and as usual, it was a very fun time this year as well. It was about 40 degrees at the starting gun of the race, but then warmed up to around 53 degrees F by the finish. 
• I was very satisfied with my finishing time of 1 hour and 31 minutes! 
• If you’re interested in seeing some pictures of me running in the race, you can click here. 
• Since the Richmond Half Marathon, I have been hustling to continue my graduate school research in Alzheimer’s disease in my lab. There was a slight time-crunch since we had to analyze the data from a previous aggregation/cytotoxicity experiment and then start another 8 day experiment in order to make some progress before taking off for Thanksgiving (right now! yah!).
• Since Wednesday, my sister and mom have been in Virginia with me to celebrate Thanksgiving. Currently, they’re attending a yoga class, so I decided to do a little blogging during the downtime. 
• We had a delicious Thanksgiving meal last night that my sister prepared. Included in the meal were 1) sweet potatoes topped with oatmeal, 2) a 10 pound free range, never frozen turkey from Whole Foods with celery/raisin stuffing (the most expensive grocery store EVER by the way, which I never usually shop at because it is overpriced. Good – but overpriced!), 3) bacon-wrapped brussel sprouts, and 4) fresh-made cranberry sauce (from real cranberries). Shown below is a picture of the complete spread! Sure was tasty! 
• As far as my personal finances go, I’ve encountered and am currently trying to sort through two big changes. 
• First, last week, I finally had time to analyze my earnings from this year for tax purposes, and have determined that I will indeed, owe a quarterly tax payment in January (ahead of the normal time that taxes are due). This is due to the fact that I owe taxes on self-employment income and also from my graduate school NSF fellowship, neither of which withholds any taxes automatically. 
• Since the amount of taxes that I owe is fairly large, I’ve been investigating opening up a self-employed retirement account as a way to reduce my tax liability. I’m fairly certain I’ve narrowed the choice down to an individual 401(k). 
• However, it was a very difficult decision due to a plethora of differing opinions on the subject, a lack of information available directly from the IRS, and changes in the tax laws over the years. 
• As such, I’ll be sure to put together a future post covering the various considerations in my decision-making process, as I think this would be very helpful to people in the future when they are going down the same path that I was. 
• Second, I had been planning (and saving money) for several months now in order to install a stacked clothes washer/dryer combination unit in my condo that I purchased last year. 
• However, after recently deciding to make my second bedroom my office/blogging space (reducing total storage space in my condo), I’ve decided that placing a washer/dryer in my house would not be the best use of space because it would effectively monopolize all storage room in the biggest closet.
• Therefore, I’ve decided to indefinitely delay my plan to install a clothes washer/dryer in my condo. There’s always a possibility that I’ll change my mind about this in the future, but for now, I’m going to devote the money I had been saving for this purpose to other outlets.    

My Favorite 10 Posts of the Past Week

Guest Posts from Personal Finance Bloggers on My Personal Finance Journey

Over the past week, there was one guest post here at My Personal Finance Journey.


Corey from 20’s Finances and Passive Income to Retire posted about, “What Does a Passive Retirement Look Like?” Thanks so much Corey for the post! It was great to hear about your plans. 

If you would like to guest post on my site, please click here to read more details about how to kick off the guest posting process. I’d love to hear from you!

Blasts From the Past

For the first 6 months after I started this blog, I pretty much “blogged in a cave.” What I mean by this is that I cranked out over 200 very good blog articles in this time period, but since I didn’t know any better, I didn’t reach out to other bloggers, get involved with the online community through commenting on other sites, or do any kind of site promotion at all. As you can imagine, some of the articles written during this time period didn’t get the attention that I think they deserved corresponding to the content contained.

The Blast from the Past section will feature one old My Personal Finance Journey article each week that I feel is high quality, but was published prior to my blog having any sort of real readership. This week’s article is listed below:

Hamster Revolution Email and Electronic File Management System – This post discusses the current email storage management system that I use to manage email with my day job as well as blogging activities. It discusses a electronic filling system consisting of the “COTAP” folders – one for clients, output, teams, administrative, and personal files/emails. It really works, and I have enjoyed using it ever since I wrote this post in July of last year!

This week’s award goes to Jeff Rose of Good Financial Cents. Last week, when I was trying to sort through the seemingly overwhelming decision about which type of self-employed retirement account to open, I came across several of the posts that Jeff wrote about the subject during a Google search. It was amazing how helpful the articles were – much more helpful than any IRS tax publication, Ask.com, or Wall Street Journal research. I began reading several other articles on his site and thought it was amazing how accessible he makes very difficult personal finance topics seem when he explains them in his posts. So, good job Jeff, and I look forward to reading more! 

If you know of someone in the PF blogging world that is really doing amazing things, feel free to send me an email for consideration in future roundups.

Giveaways

Blog Carnivals Featuring My Personal Finance Journey Articles

Top 10 Referring Sites to My Personal Finance Journey This Past Week

However, I have several other domain names purchased, and I am currently learning WordPress Self-Hosted to get these sites live as soon as time allows! I’ll be sure to keep you all updated on progress.

Well, that wraps up this week! If you have any suggestions or recommendations for things you’d like to see in this weekly roundup, just let me know by sending me an email!

As always, thanks to all the readers for creating such a great community here at My Personal Finance Journey. Your interaction is what keeps me going on this blog!

Until next time – Jacob

What is Your Opinion of the Occupy Wall Street Protester Eviction in New York City?

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Click here to enter my free $201.40 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is November 30th, 2011.


On Tuesday of this week, New York City mayor, Michael Bloomberg, along with the help of several hundred police officers cleared Zuccotti Park in lower Manhattan of the ~200 Occupy Wall Street protesters who had been staying overnight at the park for nearly 2 months now. To view complete details on this story, click here to visit the New York Times article that provided coverage.

 Random fact: I learned about 2 weeks ago that the New York City Police Department has about 30,000 police officers. That’s almost the size of a large, multi-national corporation itself! Crazy! Much bigger than I would have expected!

These ~200 Occupy Wall Street protesters had essentially made Zuccotti Park their primary home for nearly 60 days, and along with removing these overnight protesters from the park, their sleeping bags, food, tents, and possessions were also ousted as well.

Reasons for the Eviction

One reason behind the removal of the overnight protesters was that the park had essentially been taken over by the protesters and was not accessible or usable for anyone else. There were also health, hygiene, and safety concerns that contributed to the decision for the “eviction.” Even though the overnight protesters were removed, I was glad to find out that people with Occupy Wall Street signs can still come and exercise their right to free speech and express their opinions – they just cannot stay there in an overnight fashion.

Effects on the Occupy Wall Street Movement

Without a doubt, this removal of the overnight protesters at the birthplace of the Occupy Wall Street concept both has and will continue to deal a severe blow to 1) the psychology of the individual protesters across the nation and 2) how the overnight protesters are viewed from a legal perspective. I can imagine that if the Occupy camps in other cities have become too densely inhabited, the local governments can use the New York City expulsion as precedent. Indeed, several of the Occupy Wall Street movement camps in Oakland, CA were emptied earlier this week as well.

Could the Eviction Have Been Avoided?

As I was thinking about the eviction and the corresponding legal basis for it, I began to wonder if the protesters could have actually avoided it by being a little more disciplined in setting up their camps as far as what is allowable by law and is within health codes.

For example, if they had put a limit on how densely occupied the areas could be and made sure that the place did not appear “trashy,” the eviction might not have occurred! However, that sort of thing would be VERY hard to control, and I guess we will really never know…

My First-Hand Account of Occupy Wall Street

Several weeks ago, I traveled to New York City with my girlfriend to watch her compete in the ING New York City marathon. It was a pretty awesome and memorable trip, and one of the things we got to do was visit the Occupy Wall Street camp in Zuccotti Park that was mentioned above. When we visited, I believe they were on their 45th day of occupying the park.

Below are some pictures of my experience visiting Occupy Wall Street: I hope you enjoy! After looking through the pictures, I’d love to hear your opinion on the eviction of the Occupy Wall Street protesters. Be sure to share your take on the matter by commenting below!

The first thing we saw on the way to Zuccotti Park (literally only a block away) was the construction of the new Freedom Tower around the site of the World Trade Center buildings. Below is a picture of the beautiful building. It’s pretty amazing to think that humans can build things so tall!

Below is a picture of some of the protesters along with their camping equipment.

Walking along the perimeter of the Park, there were a lot of people with signs yelling at the passer’s-by. The one guy with the hat in the picture below (directly below the “one-way” sign) was yelling to every man that passed, “HEY, DON’T BE THAT GUY!”

The picture below REALLY (to me) shows just how densely packed the tents were of the protesters. Looking at an image like this, I can understand why the city could have seen this as “taking over the park and violating health/safety codes.”

Shown below is a picture of all of the police monitoring matters. There’s quite a few of them!

I learned that recently before we arrived to NYC, the company that owns Zuccotti Park had banned the protesters from using generators. Therefore, bikes were being ridden to capture mechanical energy to power their devices. Shown below is a picture of one of these bikes being ridden to generate electricity.

The picture below shows what appeared to be the central food bank of the protester camp. I’d be curious to know if the supplies are funded by a particular organization or if they are 100% donations. The two guys in the picture below were being interviewed by a news camera when I walked by. I think they are pretty well-known, as I heard one of them mention this is something like his 20th protest.

We mustered up enough courage to walk through the center (and only) passage-way through the protesters. I was surprised at how crowded this passage-way was and also by the number of protesters begging for money in the form of “donations” along the way vs. actually voicing their opinions about the wealth distribution in the country. Because of this, I became slightly concerned that many people had started using the Occupy Wall Street camp more as a place to stay for homeless people instead of a place to practice freedom of speech.

How about you all? Do you feel Michael Bloomberg/the government acted appropriately in displacing the overnight Occupy Wall Street protesters? Was it a violation of the protesters’ rights, or was it a warranted action?


Share your experiences by commenting below!

Important Money Skills to Teach Your Children

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Hi everyone! Jacob here! I just got back from New York City over the past weekend, where I had went to watch my girlfriend run the ING New York City Marathon. It was quite the experience! I’ll have some more updates on my trip in the coming days’ posts. 


The following is a guest post by Ashley over at Everything Finance and Money Talks Coaching. Everything Finance is a site about just that, everything related to finance. You can get information about investing, saving money, shopping, blogging, and making money online. If you like what you see here, make sure to stop by or better yet subscribe to their feed so you don’t miss a thing.

There is no better time for a person to develop strong skills on how to handle money than when they are young and don’t have too much of it. It’s better to make your mistakes before there is a lot of money on the line. Some of these skills for handling money include, saving, proper spending and budgeting, weighing cost vs. benefits, and price comparison. Let’s take a look at each of these one by one.

Saving

Saving is one of the most basic elements of society, and it is one of the defining characteristics of the haves and the have-nots. Many times, the have-nots are have-nots because they save-not. Saving is the basic building block of wealth creation, and if you want your children to become wealthy you need to instill the importance of saving.

Some parents have their kids save a percentage of the money they receive. Others encourage their kids to save a certain dollar amount. Saving for goals is another great way to instill a love and respect of saving money. Who knows, maybe you can get them to start saving for college.

Getting kids saving early will have two positive effects. First, they will learn to save at a very early age. Second, when the time comes, they will have an already established nest egg to tap when the need arises.

Proper Spending and Budgeting

Teaching your kids to properly plan out their spending and to budget for both the known and the unknown will save them an immeasurable amount of money in the future. As the saying goes, “Proper planning produces predictable results,” and that goes the same with proper spending and budgeting. The purpose of proper spending is to avoid overspending and breaking your budget. Teaching this principle to your child at an early age will ensure that they will make sound financial decisions later in life.

Don’t be afraid to share your household budget with your children in an age appropriate way. You don’t need to share struggles, but it’s a good introduction to the world if they have a realistic idea of how much things cost.

Price Comparison

It is always a good idea to do proper market research before making a large purchase. Including your children in your shopping decisions will teach them the value of shopping around. You will have opportunites to share when you want to buy the cheapest thing on the market and when you don’t. It will also provide chances to discuss martketing techinques and how to determine the quality of an item before you make the purchase. This skill will serve them well in life.

Children need guidance on financial matters just like anything else in life. The sooner you can get started the better. You can develop habits in your kids that will take care of them long after you are no longer able to.

How about you all? What financial skills do you feel are most important to in-grain in your children as soon as possible? What techniques do you use to teach them these skills? 


Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

• Very good post here Ashley! Teaching kids about money is a topic about which I feel very passionate, so I’m very glad to share this with the readers. And, I look forward to hearing everyone’s opinion on good ways to teach children essential financial skills. 
• @ Taking risk when you are younger –
• Along with being able to take more risk when one is younger because they don’t have much money, young folks are also able to take on more risk in regards to investing (i.e. can be more heavily invested in equities vs. fixed income securities) because of the longer investing time horizon they have. 
• For example, a young person at the age of 18 can recover quite nicely from a 70% drop in his or her portfolio, since they have almost 50 years of investing ahead of them to recoup this loss. However, if someone is 50 years old and will be retiring soon, recovering from this loss would be almost impossible, since they would need more than a 100% gain to recoup their money.
• @ Benefits of saving from an early age – 
• I just wanted to briefly echo the importance of saving at an early age. Why is this? Simple – it’s due to the “miracle of compound interest.” 
• If someone at the age of 18 were to invest $1000 in to a “boring” ETF or index mutual fund that tracks the entire US stock market (such as the ETF, VTI from Vanguard) and merely let it sit until they retired at the age of 65, it would be worth a little over $88,000 (assuming the historical annual average return of 10%). This is pretty awesome if you ask me! 
• @ Importance of instilling in kids a MINDSET of saving (not just the act of saving itself) –
• Along with teaching your children the importance of the action of saving and then getting them to do it, I believe it’s also equally as important to instill in them the mindset of being a saver. 
• If you can teach them to make savings a part of their life and to actually enjoy watching their balances grow over time, this can be much more important than simply getting them to invest some of their money during childhood.
• @ Teaching your children about proper spending – 
• In today’s credit-card-debt-laiden society, teaching children the proper way to view spending is critical (and also very difficult, I imagine). 
• However, I believe it’s important to make sure that they learn that they can only buy things if they already have the money to buy it. If they don’t have the money, they need to be taught that they cannot simply use their credit card to cover the rest and “make up for it later.”
• This point also goes back to instilling a mindset of good financial habits, not just getting them to do the actions once. 
• @ Other money skills to teach children and some of my favorite techniques – 
• I’ve discussed several other of my favorite ways for parents to give their children a good financial head-start in life previously on this site (since this is one of my favorite topics).
• Some of my favorites include buying your child 1 share of a stock in a company in which they would be interested to use as a springboard to teach them financial matters and also helping them to open up a small business (think lemonade stand!) to help them fund a desired purchase.

***Photo courtesy of http://www.flickr.com/photos/goodncrazy/4833445750/sizes/o/in/photostream/

Smart Choices Save Money on Life Insurance

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $205 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is October 31st, 2011.

The following is a guest post by Jessica Bosari. Enjoy!

Life insurance benefits those who are left behind when you pass away, so you want to make sure there is enough money to replace your income each year once you are gone. You want to ensure that your loved ones can maintain their current lifestyle if you pass away prematurely. You don’t want to place them in the lap of luxury (in other words, have too much life insurance) , except in the rare situation where that is indeed the current situation.

Purchasing Term Life Insurance

Permanent (sometimes called whole) life insurance has a cash value, and the premiums are much more expensive because a portion of it goes toward an investment portfolio that can include mutual funds. By passing up the permanent/whole life insurance policies, you can afford term life insurance rates that offer just life insurance without the investment portfolio.

The purpose of purchasing life insurance isn’t to invest money in the various financial markets (you have your retirement accounts for that, after all, and shooting for maxing those accounts out is a perfectly reasonable goal for most people); it is to leave behind enough money that will take care of your family when you aren’t there to provide for them yourself. You can do this for inexpensive rates with term life insurance, and in the process, you will keep the money you would have given to the insurance agent in commissions.

Health

Insurance companies price life insurance by how healthy their clients are. If you are someone who has a weight problem, the insurance companies are going to see you as someone with a lower life expectancy, meaning large sums of money to your beneficiaries when you pass. Insurance companies want to avoid this, so if you are healthy and not susceptible to diseases, the insurance companies can charge you lower rates. If you are overweight, consider taking on a healthier lifestyle to reduce your life insurance costs. Because people who smoke also have lower life expectancies, they get charged more for life insurance. If you quit smoking, your chance of dying early from a heart attack goes down, as will your premium rates. The lower the risk is for your death, the lower the risk is for the agency who insures your and covers your cost of living.

Employment

Some professions are very dangerous, with employees who experience more injuries and deaths than most. If you were to leave your dangerous job and begin working in an office, then your insurance rates will decrease. It isn’t nearly as much fun sitting at a desk, but insurance companies like it better when you are safe inside rather than on high scaffolding that you can fall from.

The same activities that help you live a happier, more satisfying life help you to get affordable life insurance. Saving money on life insurance is great, but feeling good is even better.

How about you all? Do you currently have life insurance? If so, what type of policy do you have – term or whole life? Why did you go with the type you chose? 


When you’ve applied for life insurance in the past, what types of details/questions about your life did they inquire about?


Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

• @ Do you need life insurance?
• As we’ve discussed several times previously on this site, the first question in tackling the life insurance issue as a whole is to address whether or not you really need life insurance to begin with!
• Ultimately, if you don’t currently have any children or a spouse that depends on your income, then you’re probably better off waiting to get this form of coverage until such a time arises that it becomes needed.
• @ Deciding between whole and term life insurance policies –
• In my mind, deciding between whole and term life insurance is a no-brainer.
• In almost ALL cases, I would posit that people would be better off buying a competitive term life insurance policy rather than an expensive (often commission-filled) whole life insurance policy.
• What do you all think?
• @ How health factors affect your life insurance premiums and benefits –
• I definitely can imagine how life factors such as health, weight, and job safety could affect the level of premiums one would pay for life insurance.
• However, it’s interesting that in my experience, I’ve seen that if a person works for a fairly large company that has an established benefits package, you really aren’t asked any sort of health history or risk factor questions prior to signing up for the health insurance and life insurance benefits; they are simply bestowed upon you in a manner dictated by which policy you select.
• On the other hand, I could imagine that individual health and risk factors come much more significantly in to play if you were to pursue independent health or life insurance policies. 

***Photo courtesy of http://www.flickr.com/photos/jakecaptive/5343993880/sizes/l/in/photostream/

My Current Asset Allocation and Net Worth Growth – July-October, 2011

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $205 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is October 31st, 2011.

I have to apologize slightly in advance for this week being a little heavy in “progress” posts, as it has has been my “catch up” week in evaluating my financial goals (published Tuesday), net worth progress (this post), and blogging goals for 2011 (on the way soon). However, since I haven’t reported on these points in about 3 months, there’s definitely much to discuss! So, let’s get started.


As I’ve mentioned before, the goal of this running net worth progress series is twofold– 1) to share how I (as a fairly normal non-financial professional) approach various financial issues that come at me throughout life so that you can use my learnings to assist you in your financial decision making and 2) to make me more accountable in sticking to my various financial goals that I set forth by periodically evaluating my status and making adjustments. As always, if you have any questions, please ask!


Overall, the 2nd half of 2011 has started off sufficiently (not tremendously – I’ll explain why below).

I spent the majority of the summer months getting started and learning how to do research in preventing the protein aggregation that is believed to be a cause of Alzheimer’s disease. I was able (surprisingly and with some luck) to successfully pass my PhD Qualifying Exam in early September. I am definitely glad that is over with and that I don’t have to retake the exam, as I spent many a late night preparing the research paper that was required! Overall, I have been very satisfied with my professional progress the past few months (both in my scientific research and growing the My Personal Finance Journey community, with your help of course).


As far as the overall stock market goes, things have been fairly disappointing (hence why I mentioned above that the start of the 2nd half of the year has not been spectacular by any stretch of the imagination) since the last net worth update in late June. However, since I am a passive investor and do not try to fool around with market timing, I try not to let this bother me and focus on things I can control. 

With all of the up and down that has occurred, let’s take a look and see how it affected my net worth progress…shall we?

How about you all? How did you progress with your net worth in July-October 2011? What are your thoughts about the strength of the market right now? Do you think it will rebound? Have you had to rebalance your portfolio recently (buying more equity shares) to account for the market downturn?


Share your experiences by commenting below!

***Photo courtesy of http://s0.geograph.org.uk/geophotos/01/47/83/1478338_1968fd81.jpg

Fixed Rate Mortgages vs. Adjustable Rate Mortgages – Which are Better for You?

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $205 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is October 31st, 2011.

The following is a guest post. Enjoy!

Home ownership is one of the cornerstones of America, if not the cornerstone of American life. There is no other symbol that defines what it means to fully capture the American dream than that of home ownership.

The primary way that people chase their dream of home ownership is by means of a mortgage loan. A mortgage is a loan taken out from a bank based upon a person’s credit history and their level of income. There have been times when it has been very easy for a person to get a mortgage, and other times when it has been virtually impossible for the average person to get a mortgage to buy their dream home.

Mortgage Selection Tools

One of the best tools a person can have when it comes to buying a mortgage is a reliable, handy mortgage calculator. A mortgage calculator is one of the few tools a person can use to help them prepare for the process of attaining a mortgage. When taking on any new challenge, such as buying a home or purchasing any type of real estate, it is always worth it to do proper research and use due diligence when approaching the situation. There are many different types of mortgages, some more risky than other, but they all get the job done.

The Fixed Rate Mortgage

The fixed rate mortgage is the simple mortgage that many of us grew up knowing about. The fixed-rate mortgage can be very easily explained as a simple loan with a fixed, stable interest rate that determines what our monthly payment will be. The beauty of this type of mortgage is that for the entire life of the loan, you have the same mortgage payment, and it becomes a game of how many payments do you have left on your mortgage before you pay it off, rather than a game of what exactly will my mortgage payment be this month, as it is with many other types of mortgages. The fixed-rate mortgage usually has a life of 30 years or 15 years, and is pretty flexible for you to pay it off early.

The Adjustable Rate Mortgage

Adjustable rate mortgages are one of the more flexible mortgage options in good financial times. The adjustable rate fluctuates with the economy (more specifically, with the prime interest rate set by the Fed), and often leaves the homeowner in a financial situation they did not plan for.

The adjustable rate is both a beauty and a beast, all at the same time. In good times, the rate is often low, which in turns allows the person mortgage payment to be low and very bearable. But, in bad economic times, this rate often rises unexpectedly and puts the person who has the mortgage in a bad financial position. Adjustable rate mortgages are good for people who do not have any other option, but they should use a mortgage calculator before they sign the documents to make sure they are getting the best deal they can. It would also be a smart move to later move to a fixed-rate mortgage if possible for the security it provides.

How about you all? What strategies or tools do you use to obtain a mortgage that best suits your needs? Do you prefer fixed rate or adjustable rate mortgages? 


Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

• @ Deciding between fixed and adjustable rate mortgages – 
• Deciding between the two types of mortgages (fixed and adjustable rate) can be a fairly difficult proposition. 
• On one hand, it’s a little frightening to think about being “locked” in to a set mortgage for such a long period of time (30 years) with a fixed rate mortgage. 
• On the other hand, it’s also very tempting to get an adjustable rate mortgage since the rate is set enticingly low in the first few years of the loan.
• However, I believe that as a general rule of thumb, the majority of home buyers should be using a fixed rate mortgage. The primary reason for this is that it forces a home buyer to truly get their finances in order before committing to buying a house. In other words, a fixed rate mortgage makes sure he or she (the home buyer) truly has enough money to afford the true cost of the house, and not just some temporary low rate set forth by the adjustable rate mortgage.
• Even though I believe that most people can benefit more greatly from a fixed rate mortgage (this is what I would choose in buying a home as well), there are some times when I do believe that adjustable rate mortgages are beneficial. These are listed below:
• When you only plan on living in a house for 5 years – Since you’ll only be living in the house for a relatively short period of time before selling, you’ll likely only be paying mortgage payments during the low, introductory interest rate period. Thus, you don’t need to worry about the interest rate adjusting to something that you cannot afford. 
• A word of caution though with this tact – if you do not plan on living in a house for a minimum of 5 years, you would actually be better off renting instead of buying. 
• When the terms of the adjustable rate mortgage are such that it prevents huge jumps in interest rate over the life of the loan – In some special cases with adjustable rate mortgages, the amount that the interest rate on your loan can fluctuate is capped both at a per year and per-loan-lifetime basis. If current market fixed rate mortgages carry a 5% interest rate and your adjustable rate mortgage interest rate increase is capped at 2% for the lifetime of the loan (but starts at 3% interest), it will ultimately be cheaper to go with the adjustable mortgage. It’s all about reading the fine details VERY CAREFULLY though! 

***Photo courtesy of http://s0.geograph.org.uk/geophotos/01/86/72/1867282_cf82253b.jpg

October 2011 Financial Goals Update – Short Term, Mid-term, and Long Term

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $205 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is October 31st, 2011.

Back in January of this year, I laid out my short term, mid-term, and long term goals for the 2011 year. I do this once every year as part of my goal to create what author David Bach calls a Purpose Focused Financial Plan. The goal of this system is to employ money in your life in a way that matches your life values and dreams.

You can read more about my journey to create this system at the following links – Creating a Purpose Focused Financial Plan & My Personal Finance Journey’s Investment Strategy.

As part of making this system work, I wanted to give an update on how I’m doing so far this year with the goals I established. Overall, I’ve been very lucky in the regard that my progress to date has far exceeded the expectations I originally laid out at the beginning of the year. 


However, I’ve gotten pretty behind on these updates since the end of the summer with the PhD Qualifying Exam I had to take. As such, this post/update will serve to reflect new progress that has been made in the July 2011-October 2011 timeframe. Enjoy! I look forward to hearing your comments, thoughts, and progress on your own goals. 
 

Short Term (< 1 year) Goals:

• Contribute $5000 (or $420 per month) to my Roth IRA with Vanguard this year (maximum allowed) – Complete. Have now contributed $5,000 so far this year. 
• Because my graduate school employment doesn’t include the perk of a 401k, my tax-deferred investing options for 2011 are now exhausted. Because of this, I have begun pouring any extra money at the end of each month towards my condo home loan and washer/dryer installation savings. Nice! 
• Reach net worth target for this year (not displayed here) – Ongoing – the equity markets don’t seem to want to cooperate in allowing me to achieve this goal, as it requires an ~30% increase in net worth. This may not be possible to obtain, but will attempt.
• Maintain target 6-9 months of expenses in cash reserve fund in Dollar Savings Direct account – Complete – currently carrying 9 months worth of expenses in cash in my emergency fund account.
• Rebalance mutual fund portfolio to meet asset allocation target %’s (75% equity, 25% fixed income overall) – Correct for now, but ongoing.
• Obtain 15% ownership / equity in condominium – Complete – currently, I have 15.79% equity in my condo. I will be increasing this goal to 20% for the remainder of 2011.
• Put together a will and have it reviewed by a lawyer – Will completed. Not yet reviewed by lawyer.
• Continue to save money for trip to Grand Canyon – Ongoing – need to continue to evaluate when to take this. 
• Currently, I have $340 saved up for this trip. My gut feeling tells me that this won’t quite yet be enough (probably needs to be in the neighborhood of $1200-$1500). To verify this, I just looked up the prices for flights going to Las Vegas (a nearby airport to the Grand Canyon), and they are currently priced at around $700 round trip. 
• I am currently saving only $20 per month for this trip (and the associated life value that is assigned to it). I think I’m going to increase the monthly savings to $50 for the remainder of 2011 in order to slightly accelerate things. It would be nice to try to take this vacation in the late Spring time frame of 2012.
• Upgrade condominium with investment in stacked washer/dryer combo – $1000 for unit, $1000 for labor/installation – Currently saving $87.50 per month for home maintenance and upgrades – Ongoing, but on track. 
• As of September, I will have now officially accumulated 1% of my home value in my home maintenance savings account. From now on, I will be able to begin accumulating the $2000 that it will cost to get the washer/dryer in my condo. I’ve decided that since I have already maxed out my Roth IRA for the year and have no 401k available, I’m going to increase my monthly washer/dryer investment/savings to $200 per month to see if I can speed up the savings process for this. 
• Invest $500 in Microloans for Latin America in 2011 ($41.67 per month) –Ongoing – Have invested a total of $417 this year so far to a working poor fund in Peru and Nicaragua and a fund that supports environmental sustainability in Latin America. Both of these funds come with a pretty nice 3.5% interest rate per year for three years. 
• Note: I use Microplace.com to invest this money. It seems to work well and be dependable (my principal for some of my 2010 investments were paid back in September). I just logged in to my account, and it says that my money has been used to help 55 people down there! Pretty cool stuff if you ask me!
• Donate $1,300 to Multiple Sclerosis Foundation in 2011 (5% of income) – Done. In the 2011 Tour de Vine event, I raised approximately $5625 to support finding a cure for this disease (with the help of company matches). My bike ride happened on June 11-12 of this year and was a huge success. I’m definitely planning to do it again next year (I’ve already signed up, in fact!) 
• The other big donation thrust I’ll be doing for the remainder of 2011 and beyond is giving away 10% of my blog income each month, with 5% going to readers and another 5% going to charities that the readers select. If you’re interested in signing up for a chance to win, click here.
• Save 3% of take home pay each month (after taxes) for Dream Account. On target – Have an automatic transfer each month from my Bank of America checking account to my ING Direct high yield savings account.
• Save ~30% of blogging income (if any) in a high yield online savings account in preparation for 2010 taxes. I had been very bad at doing this until late this summer, but I finally have begun to put aside significant amounts of money for taxes. 
• The next step on my radar is to send quarterly tax payments in the government so that I don’t owe huge amounts in April 2012 and get penalized. 
• I will need to make sure to update my net worth calculation Excel spreadsheet so that these tax savings don’t get counted in my asset allocation percentages, thus skewing the numbers.
• Implement dollar value averaging for my 2012 Roth IRA contributions. This will be done in the beginning of 2012.

Mid-Term (3-5 years out) Goals:

• Continue contributing $5000 to Roth IRA each year and using dollar value averaging.
• Reach intermediate net worth target (not displayed here, but is 2X my current net worth)
• Own a rental property by 2016.

Long-Term (>5 years out) Goals:

• Obtain a net worth of $1,000,000
• Own a home free of mortgage payments
• Own a vacation home in the mountains somewhere remote
• Accumulate enough funds not have to work, but will probably anyways because I would get bored. 

How about you all? How have the months of July through October (thus far) been for achieving your goals? What are your next milestones? 

Share your experiences by commenting below!

***Photo courtesy of http://farm1.static.flickr.com/230/503335275_6150e07aed.jpg

What are the Best and Worst Jobs in the World?

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $205 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is October 31st, 2011.

The following is a guest post from Briana at 20 and Engaged.

This post was written as part of a “Yakezie blog swap” where members of the Yakezie Personal Finance Blogging Network pair up and exchange guest postings on a common topic. The topic of this blog swap was to discuss what each of us thinks would be the best AND worst jobs in the world. You can view my guest post live today over at Family Money Values’ site .

How about you all? What do you feel would be the best and worst jobs in the world? What characteristics of those jobs are most important in deciding if they would be good or bad for you? 


Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

• Great post here Briana! Thanks for participating in the blog swap. I especially like how you took the approach of describing the traits you’d look for in the best and worst jobs in the world, instead of just focusing on describing one specific job. 
• For me personally, I think that one of the important traits in the best job in the world would be to have enough flexibility to suggest new ideas or ways of doing things. In other words, I’d like to feel like I could apply some of my own flavor/creativity to the job. In addition, it’d also be important for me to not feel too rushed all of the time that I feel like I can barely do a good job. 
• @ High paying jobs with tons of hours –
• You make a great point with your description of how a high-paying job might not be the best job in the world, especially if earning that high income involves working 80-100 hours a week. The work schedule definitely must be taken in to consideration. 
• @ People being bored and overqualified for their job –
• Unfortunately, I saw the “being bored” aspect of this all to often when I worked for 2 years after my undergraduate studies. 
• Quite often, new college graduates would get hired in to the company, be paid a very comfortable salary for a young professional, but then would have very little to do day-to-day in their job. And, when they were given tasks, they would get them done in a very short period of time. Of course, this work arrangement made these young professionals feel fairly not very useful (not the best situation for anyone to be in). 
• I especially saw this boredom/not-enough-work situation happening with internships of college students working over the summer at the company. Quite often, these students would have to resort to playing around on Facebook and the instant messenger all day, since they weren’t given any work to do. 
• @ How good or bad a job is all depends on perspective – 
• I definitely agree with this statement, as one job that would seem ideal to one person (such as being a doctor or lawyer with good pay, etc) can be hated by another person that is already doing that role. It all comes down to perspective. 
• I am also certain that having different perspectives on what constitutes a good and bad job is absolutely critical for the world to work effectively. For example, I may think that being an engineer would be an interesting job and being a salesperson would be terrible, but the truth is that we need both roles to make the world go round!
• Because of this, I’m personally grateful that everyone has different opinions and is not the same!

***Photo courtesy of http://farm3.static.flickr.com/2120/2144933705_20517bedab.jpg

Chaikin Power Gauge Stock Rating Widget Review

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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If you’ve read this blog before or are familiar with the blog carnival I created, The Carnival of Passive Investing, you’re probably aware that I’m not a big fan of being heavily invested in individual stocks.

The reason for this is that in my mind, investing in individual stocks is more of a speculative activity, rather than investing. After all, 70% of actively managed money fails to outperform the market indices. Due to these considerations, most of my retirement funds are invested in passively managed index mutual funds.

However, having said this, I am also very fascinated with the idea of being able to select winning individual stocks (I’m just not convinced enough to place my entire future on it). One of my hobbies is to investigate new stock trading methodologies to see if they are effective over long-term periods. In fact, I often enjoy using small denominations of funds (what I call play money) to invest in individual stocks to see how these methodologies work. An example of one of these investigations I did was a look at Phil Town’s Rule Number 1 stock trading system.

Needless to say, I’m always on the lookout for new and exciting tools that can give stock traders an advantage that will enable them to profit. One of these tools that I’ve been exposed to recently is the Chaikin Power Gauge Stock Rating Widget.

Current State of Stock Ratings by Analysts

Since this widget provides ratings of the common stocks of individual companies, I couldn’t resist briefly ranting about the current state of stock ratings that we all see in the newspapers and financial press…

As you’re probably already aware, this current system of having “analysts” (I love how vague this term is – why don’t they specify who the analyst is or what company they work for?!) rate stocks is laughable at best due to the intense conflicts of interest present in the system. What exactly creates this conflict of interest? Well, as far as I know, the analysts that rate company stocks work for the same big investment banking houses that get paid millions (if not billions) of Dollars by the publicly traded companies receiving the rating for their investment banking work. In other words, the analysts doing the ratings are paid by the same companies they are paid to rank…Crazy, uh? In my opinion, this is the ultimate in conflicting interests!

In fact, I’d venture a guess that the current analyst ratings of individual stocks are about as trustworthy as a politician promising to set up a colony on Mars if he or she is elected President of the United States. End rant..

Using the Chaikin Power Gauge Stock Rating Widget – Features and Widget Outputs

The Chaikin Stock Rating Widget is embedded below (you can use it directly on this webpage, or any webpage where you see it, which is a cool feature!). To try it, enter any stock symbol in the entry box and hit enter.

Once you enter a stock ticker symbol and hit the “enter” button, the following qualitative and quantitative details will be generated automatically for you on the widget. 

• The current trading price per share of the common stock (the widget doesn’t do ETFs or mutual funds yet). 
• The Chaikin Power Gauge rating – This rating is based on market expert Marc Chaikin’s back-tested 20 factor model, which has been proven successful at identifying a stock’s potential over the next 3-6 months. I personally didn’t yet look in to the details about what 20 factors this widget takes in to consideration.
• Pretty much all you need to know in interpreting the rating is that green is bullish and red is bearish. Makes sense, right?
• Along with the overall Power Gauge rating, the widget displays the bullish or bearish levels of the following company details.
• Financial metrics.
• Earnings performance.
• Price/volume activity.
• Expert opinions.

If after reading the information displayed on widget, you decide that you want more information, you can click “For details on this stock, click here” to request a free 4-page stock report sent instantly via email. When I requested a 4-page detailed report on Southwestern Energy as a test, I was pleasantly surprised at how many details are delivered in the report. Pretty cool stuff for being free!

Effectiveness of Power Gauge Stock Rating Widget

So, if you’re like me, right now, you’re probably thinking, “This widget sounds great and easy to use, Jacob, but whether or not it actually works is what I really need to know!”

In my opinion, this widget could potentially be used in one of two ways.

• First, it could be used in conjunction with your existing stock evaluation methodology as a “check,” a way to get another perspective on a stock before buying or selling it. If you’re going to use the widget in this manner, I think you have all of the tools and knowledge you need; simply research a stock using your current method and then see if this widget concurs.
• Second, it could be potentially used as a sole source of information on a stock in order to decide whether or not to buy/sell. If you’re going to use it this way, the effectiveness of the widget’s ratings become more serious, important, and crucial. Let’s explore this second case a little bit more, shall we?

However, I have a plan to see if we can find out…This should be most interesting!

Listed below is a “mixed bag” of 10 of the 30 Dow Jones Industrial Average companies from different industries. Along with the name of each company, I’ve also listed the current stock price per share, ticker symbol, and the Chaikin Power Gauge Rating from the last week of September, 2011. It’s interesting to note that the widget doesn’t predict that a single one of these stocks will go up in the next 3-6 months.

I’ve placed two reminders on my Outlook calendar – one in 3 months from now and one from 6 months – to check the performance of these stocks since this posting. I’ll plan to update this post with how the performance does or doesn’t match what was predicted below by the widget at that time. Should be very interesting!

3M (MMM) – $74 – Very Bearish
American Express (AXP) – $46.45 – Neutral – Trend Down
Boeing (BA) – $59.51 – Neutral
Coca-Cola (KO) – $67.39 – Bearish
ExxonMobil (XOM) – $69.30 – Neutral – Trend Down
The Home Depot (HD) – $33.72 – Neutral
Merck (MRK) – $31.04 – Neutral – Trend Down
Wal-Mart (WMT) – $50.79 – Neutral – Trend Down
Disney (DIS) – $29.81 – Neutral – Trend Down
Microsoft (MSFT) – $25.06 – Neutral – Trend Down

How about you all? Have you ever used the Chaikin Stock Rating widget or any other similar tool for analyzing stocks? If so, which ones? How well have you found they work? 


Share your experiences by commenting below!


Note: This review was sponsored monetarily by Chaikin Power Tools. However, the views and opinions expressed represent my honest evaluation of the product.

***Photo courtesy of http://www.chaikinpowertools.com/