Personal Finance

I got a huge response to my previous post about dealing with critics. They come in all shapes and sizes, and the most formidable critics never attack head-on. Instead, they say things like “Are you sure about that?” or “I’m just worried about you…” So I wanted to go into more depth to go beyond just “handling” critics — and go into the deeper area of building a POSITIVE support system. This week, I’m giving a live presentation on How to Overcome Critics and Build a Powerful Support System this Wednesday night. You’ll learn: The subtle ways critics cut people down Unconventional ways to handle critics (beyond just ignoring them) How to build a positive support system of people who WANT to help you and hold you accountable This event is online and free: Wednesday, 5/22, at 9:00pm Eastern This is invite-only. To pre-register and save you spot, click here: http://live.iwillteachyoutoberich.com/ And, to the 5,000 people who live in Siberia, or have kids, or have a dog with a runny nose: This is live. There will be no transcript or recording. Again, for the illiterate people who are not reading this and will email me anyway — I said sorry but no, I will not record this. TO ATTEND: Register for the webinar here: http://live.iwillteachyoutoberich.com/ -Ramit P.S. Once you register, leave a comment and share: A subtle way that someone close to you gave you unsolicited, negative feedback What it would mean to have a POSITIVE support system around you, who would constantly hold you accountable, support you, and wouldn’t let you fail. New presentation: How to overcome critics & build a powerful support system is a post from: I Will Teach You To Be Rich.

One of my favorite places to visit is Prairie Lights Bookstore in Iowa City, Iowa. It’s an independent bookstore with a wonderful atmosphere and I truly love the opportunities I get to browse through the books there. The problem is that when I go into a retailer without a specific purchase in mind but with an intent to buy something, I’ll usually end up buying something on the spur of the moment – or two or three things. The last time I was in that store, for example, I wound up buying three books. When I walked in there, I didn’t actually have a title in mind that I wanted to buy. Instead, I was influenced by the store itself when I made those purchases. (Thankfully, I had budgeted for this. I was anticipating some “spontaneous buying” on that day, so I budgeted that much cash in my wallet for just that purpose.) Shopping costs you money. Shopping without a very specific purpose really costs you money. If you want to save money on every single situation where you’re opening your wallet for an item, there’s a very simple rule to follow. Make your buying decision before you ever enter the store. If you’re buying food, make a grocery list with as much detail as possible before you go there. Use the store flyer to make your grocery list so that it accounts for the sales. That way, you’re making as few decisions as possible when you’re actually in the store. If you’re buying a car, do your homework on car models before you ever go on the lot. Know what features you want. Use websites to figure out what cars they have on the lot and research those models. Again, that way, you’re not making decisions while on the lot. If you’re buying a book at Amazon.com, know what book you’re shopping for before you ever go on the site. Don’t use a shopping site as a recommendation tool – instead, only go there when the only decision left to make is whether to click the “Add to cart” button. Why should you do things this way? Whenever you allow yourself to make decisions on the retailer’s home turf, you’re allowing that retailer to add extra information to your decision-making process. That information that they give you is going to be engineered almost entirely to convince you to buy the item that the retailer wants you to buy, which is usually the one that makes them the most money. For example, if you go to an electronics store with the vague notion that you want to buy a camera, you’re going to be inundated with options. You’ll be facing a ton of information without context and, to some extent, without reliability. Are these features you really care about? Are you able to actually evaluate things like image quality or battery life or reliability? Unfortunately, no, you’re not. Instead, you’re going to get information about the features that the store wants you to know about. A salesman will probably “help” you, in that the “help” mostly involves convincing you to buy now rather than later. Walking into a retailer or visiting a retail website without your decision already made means that you are going to be basing your decision on a set of information that the retailer gives to you. This is usually not the same set of information that will help you actually make the best purchase. If you base the decision-making process on the information provided by the retailer, you’re using a subset of information that’s not going to push you toward the best option for you. I use one of two options whenever I visit a store of any kind. One, I have a very specific item or list of items that I want and have already decided on. I’ve already researched the items in advance and made up my mind what I want to buy before I ever set foot in the store. That way, when I’m in the store, I am not making decisions, thus the decision-making process isn&

Success in personal finance is really a matter of the mind. It’s about having the awareness to see all of the choices you’re making and having the fortitude to consistently make good choices in terms of your money. One of the big challenges, particularly for people first starting out, is to see the connection between frugality and wealth. Frugality as a sustained and natural habit leads directly to wealth, but that path is sometimes hard to see. So, let’s walk through this, step by step. Let’s look at three pretty typical frugal changes a person might make. First, you make the choice to eat one more meal at home per week. You replace a $10 meal eaten at a restaurant with a $2 meal prepared at home and you stick with that forever – let’s say, fifty weeks a year. This is a pretty big change. Second, you replace all of the light bulbs in your home with energy efficient ones over the next month or so. You have 30 light sockets in your home, the average socket is on for four hours a day, and you’ve switched from 75 watt bulbs to 15 watt bulbs, saving you 60 watts. This is also a reasonably big change. Third, you join a free ultimate Frisbee league in your town that’s sponsored by the parks and recreation association, which eats up two weeknights with free activities. On those nights, you would have been staying at home with 10 light bulbs on and watching television for two hours, but instead you walk to the park after turning all of that stuff off. This is a pretty small change, but we want one of those for comparison’s sake. The first step is to calculate what you actually save per month and per year by these changes. With the choice to eat a meal at home each week, you’re saving $8 per week over 50 weeks, which adds up to $400 per year. Per month, you simply divide that by twelve, giving you $33.33 per month. With the choice to replace your light bulbs in a typical usage situation, we know that energy companies charge $0.12 per kilowatt hour on average. You’re saving sixty watts times thirty sockets times four hours, giving you 7,200 watt-hours per day in energy savings, or 7.2 kilowatt hours. At $0.12 per kilowatt hour, that’s a daily savings of $0.864, which adds up to $26.28 per month and $315.36 per year. With the free ultimate Frisbee league, you’re turning off your lights, your television, and your cable box for two additional hours per day. Let’s say your television uses 80 watts, your cable box uses 45 watts, and your light bulbs are using fifteen watts each, as described above. That’s 140 watts, times two hours, times twice a week, times 50 weeks a year, giving you 28,000 watts per year. At a rate of $0.12 per kilowatt hour, that adds up to $3.36 per year, or $0.28 per month. So, with just these three changes, we save $59.89 per month – or $718.68 annually. If you’re astute enough, you can put that $718.68 into an investment account each year so that it will earn a 7% return each year. You start doing this at age 25. At age 65, you have $81,100.66. Yes, switching light bulbs, eating one meal at home a week, and finding a free outside activity to do a couple nights a week – if you take the savings from these things and invest it – will eventually save you over $80,000. There are two big tricks to really making this work. First, find frugal tactics that are actually sustainable in your life. For me, these are either one-off things such as changing light bulbs or things that I try out and find that they integrate smoothly into my life. If something is a hassle or produces results I don’t like, I abandon that idea and shrug it off as something I tried that just didn’t work out. Second, figure out what they’re saving you over your previous choices and save that difference. If you find you made a shift that saves you $5 a month but it’s completely sustainable, then have

It may seem shocking after just a few short years from the greatest market panic of our lifetime but major stock market indices are hitting new highs almost on a daily basis these days. Are you thinking of adding to your investment portfolio? Are mutual funds part of your strategy? FutureAdvisor helped me put together this simple infographic listing a few key points you’ll want to remember about mutual fund selection by digging deep into their 401k database. Take a look below: It’s hard to argue with the data when low fees correlate so strongly with high returns across so many different asset classes. Next time you look for a mutual fund, make sure to put fees amongst the very top of your priority list. Remember, the less Wall Street charges you, the more you keep! This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here. Related posts: Is It Time to Sell Your Mutual Fund? Mutual Fund Investing Is Not Rocket Science The Impact of Costs on Mutual Fund Returns

On Friday, May 17, 2013, the naked call I sold on my company stock expired worthless. So I pocketed a small profit for selling the call. Normally, I only sell covered calls. However, I had already sold a covered call when my company stock suddenly advanced significantly. I decided to take a chance and sell an uncovered (naked) call since I didn't think the stock would go much higher. Actually, the stock did advance four cents past the strike price before pulling back about 7%. The risk with a naked call is theoretically unlimited losses if the stock should rise significantly. I say "theoretically" since no stock I've ever owned has shot up over 70% in a short time. Still, I was sweating a little this week, since my company stock advanced within 2.5% of the strike price on Wednesday. However, the price of my company stock stopped advancing after Wednesday and I ended profiting from a the small premium when selling the call. So even with a couple days of anxiety, the trade worked out as planned. For more on New Beginnings, check back every Sunday for a new segment. This is not financial advice. Please consult a professional advisor. Copyright © 2013 Achievement Catalyst, LLC

This reader story is from a longtime GRS reader Sumitha, who blogs at afineparent.com. Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income. Want to submit your own reader story? Here’s how. I said goodbye to a promising career with a six-figure salary last month. I have dreamed about this moment for over two years. Still, when it was time, I spent several days wrestling with acute anxiety and insomnia. This has, by far, been one of the hardest things I’ve done in my life. Get Rich Slowly reader stories about quitting (here, here, here and here) provided me with immense insight into making a life-changing decision like this. The hundreds of comments on those articles gave me different perspectives to ponder. Together, they helped me work things out for myself. I want to give back, in some sense, by sharing my story. Background My husband and I came to the U.S. for higher education, and when we graduated, we joined tech companies as software engineers. Our jobs paid well, and as financially sensible DINKs, we paid off our loans quickly, started saving diligently and bought a home with 20 percent down payment. Life was good — for a while, anyway. Then the 2008 financial crisis hit. I was expecting a baby at the time, and the worry that I would lose my job while I was pregnant drove me to work long hours all the way to my due date. I left on my maternity leave praying I would still have a job when I got back. I did, but the stress of working in an uncertain environment on a high-profile project while raising a baby started to take its toll. Things hit rock bottom around my daughter’s second birthday. For the first time, I remember thinking I really want to quit. I didn’t know what I would do after I quit — I just didn’t want to go on like this for the next 20 to 30 years. Then, I pulled myself back together and carried on. The breaking point A few months after that, however, my husband had a major health issue. It was the kind where you sit nervously outside an emergency room and question everything — from the quality of your life, to the kind of work you do, to the kind of person you’ve become, all the way to the existence of God. It was the last straw on the camel’s back. When the storm passed, I realized I had a choice – pull myself back together (again!) and continue like before, or treat this as a defining moment and build a new life. I chose the latter. Financial planning Part of the change was to move out of the high-stress tech job. It took me around two years from then to finally be ready — financially and emotionally. Here’s what I did: First step: mortgage From the time the layoff rumors had started we had been saving money like squirrels on steroids. Also, right from the beginning, we had been paying off the mortgage at an accelerated pace. So the first big change was to finish off that mortgage. Second step: savings My first “plan” was to keep working and save diligently until we had enough. But, both my husband and I are financial paranoids, and one fine day, it dawned on me : We’d never have enough. So I set a rule for myself: when I had enough savings to pay myself a salary that covers my average monthly expenses plus a small buffer, for the period of a year, preferably two, I would quit. These savings were after the 401(k), emergency fund, HSA, and vacations. I knew it would take me at least a couple of years to get there. What’s next? After my husband’s emergency room episode, I went through a period of intense introspection. I didn’t like what I saw. Somewhere along the way, I had let the stress of my life turn me into an impatient and snappy cynic. And the person who got the brunt of it was my little 2-year-old daughter. I wanted to do something about it, but change was proving hard. One day in a desperate attempt, I indulged myself by

Okay, UK investors, after finally taking the pain of creating a mahoosive comparison guide to the UK’s leading online brokers, we’ve only gone and fully updated it. Sawing a leg off would have been more fun, but it would not have produced a quick and easy overview of 28 of the main execution-only investment services. Fund supermarkets, platforms, discount brokers, call ‘em what you will – we’ve stripped ‘em down to their undies for you to eyeball over a cup of tea and your favourite tranquilizers. So who’s the best broker? It’s impossible to say. There are too many subtle differences in the offers. The UK’s brokers occupy more niches than the mammal family, and while I know which one is best for me, I can’t know which one is right for you. What I have done is laser focus the comparison onto the most important factor in play: cost. An execution-only broker is not on this Earth to hold anyone’s hand. Yes, we want their website to work, we’d prefer them to not screw us over, go bust or send us to the seventh circle of call centre hell… These things we take for granted. So customer service metrics are not included in this table. It’s purely a bare-knuckle contest of brute cost for services rendered. Why should investors flay costs as if they were the tattooed agents of darkness? Because if – as the FSA predicts – you will see an annual after-inflation return of 2.5% on your portfolio for the next decade, then the last thing you need is to leak another 1% in portfolio management charges. This makes picking the best value broker a key battleground for all investors. Using the table The main UK brokers fall into four main camps, I’ve decided. These are: Clean Class brokers – Platforms that stock cheaper clean class funds but are partially funded by increased management fees. This bloc runs from Alliance Trust to Clubfinance Frequent Trader in the table. Commission-funded brokers – Platforms that are funded by the pre-RDR commission model. You can avoid virtually all fees bar your fund’s Ongoing Charge Figures (OCF), if you choose wisely. Take a look at Hargreaves Lansdown to Halifax. Beware though, these platforms will have to switch to a Clean Class model within the next three years as the FCA have decided to ban commission payments. Fund supermarkets – These platforms are also characterised by commission payments and non-existent additional fees but restrict investments to OEIC / Unit Trust type funds. ETFs, shares and investment trusts are generally off the menu.? See Cavendish Online to rplan. Supermarkets will also have to switch customers to Clean Class funds within the next three years. Share dealing platforms – Platforms that suit investors who want to deal solely in shares and ETFs. X-O and friends fill this brief. Choosing the right broker needn’t be more painful than ensuring they stock the investments you want and then running a few numbers on your portfolio. The final point you need to know is that this table’s vitality will rely on crowd-sourcing. I will review the whole thing every three months, but it can remain permanently up to date if you contact us or leave a comment every time you find an inaccuracy, fresh information, or a platform you think should be added. Between us this comparison table can become an invaluable resource for UK investors. Take it steady, The Accumulator

Once upon a time, Sarah and I lived in a two bedroom apartment. The two bedrooms were pretty small. When we had our first child, we made the second bedroom into a nursery and, eventually, into a little boy’s room. When our second child was about to arrive, we decided that the apartment was just too small for us. Like many people in that situation, we went out and bought a larger home – a four bedroom affair. It gave us a lot more room for our family to grow – at least in theory. What’s actually happened? Our three children enjoy sharing a single bedroom. One of the bedrooms sits largely empty as a guest bedroom. Our ample closet space mostly just stores stuff that we don’t really need to keep and we could sell off. We have a living room and a family room without any real reason to have two separate rooms for that. While our original apartment might have been slightly on the small side, we really didn’t need a house nearly as big as the one we have. We have a lot of excess space that’s mostly used either to store stuff or to sit empty until the rare occasion comes when we might use it. In our day to day lives, we mostly just use two bedrooms, the combination kitchen and dining room, and the living room. We use the family room a bit, but we don’t do anything in there that wouldn’t work just fine in the living room. One of the bedrooms is unused, and the other is an office that could work in the corner of the living room. We have a bedroom we basically never use and two bathrooms that are rarely used, too. We could easily be very happy with 60% of our square footage. That doesn’t mean I want to downgrade. After all, our house is fully paid for and it’s in an area where property values are inching up steadily even through the housing collapse. What it does mean is that our perception of what kind of house we needed was drastically overinflated before we actually made the purchase. Here’s the truth: a big house seems like a great idea, particularly when you have a family, but an awful lot of it just winds up being storage space for stuff you rarely use. It’s effectively an overpriced storage unit. So, what would I do if I had it to do all over again? For starters, I’d buy a home substantially smaller than what I thought we needed. We did not need to triple the square footage of our apartment. We needed to perhaps increase it by 50% or maybe, on the outside edge, double it. Everything beyond that has essentially become storage space. Why do it this way? A smaller home means a smaller mortgage, which means smaller payments and much smaller professional stress to maintain a certain income level. How can you assess what you actually need? Rolling back the clock, I should have simply made a list of our needs and not our wants. It can be hard to distinguish between the two. A technique that really works well for me is listing every reason I can possibly think of for the move, giving the list some time to rest, then going through it and eliminating those that are clearly “wants.” That doesn’t mean you should buy a house because it has attributes that you want, but if you focus instead on houses that just meet the things you need, you’ll be paying far less and still likely getting some of the things that you want. The result? You’re happy and your wallet is definitely happy, too, as is your stress level. The post The House That Is Too Small appeared first on The Simple Dollar.

I have had a number of people ask me about Credit Karma. I have used it a number of times to check my credit score and like it, so I figured I would go ahead and write a Credit Karma Review for all of you. When people start to repair bad credit, they oftentimes land at Credit Karma. While most people enjoy the idea of the service, many are not sure it is legitimate. In reality, Credit Karma is a great service that a savvy consumer must use. Of course, many vigilant consumers will still have their doubts about the business. Here is a quick guide for a consumer who wants to learn more about Credit Karma and how it works. Completely free: Oftentimes, a user will sign up for a “free credit score” only to find out that the score is not free. Not only that, the consumer will only find out the monitoring service costs money once he or she has entered all of their personal information. With Credit Karma, a user can sign up and will never have to give his or her credit card information. Make money: Naturally, most people probably wonder how the company makes money. They make money in a couple of ways. For starters, when logged in, Credit Karma will recommend credit cards to their users. When clicking the link and signing up for a card, the company will then make a small commission. Furthermore, with this service, a consumer will receive monthly emails with advertisements. Of course, a client can easily opt out of the promotion emails at any time. While other services charge a fee or sell information, they only make money by sending relevant marketing emails and showing relevant advertisements. credit karma review Secure: There is no doubt about it; Credit Karma is a legitimate service. In fact, the company has an A rating with the Better Business Bureau and has only eight complaints filed against them in the past. Some fear using Credit Karma as it requires the customer to provide his or her social security number. This fear is unfounded; when you go to check your credit score with any service, a user must give their social security number as a way for the company to get access to their data. Furthermore, the company uses SSL for their website and takes plenty of steps to ensure the safety of their customer’s information. Scores: Credit Karma provides customers their TransUnion credit score. The company updates the information often, which allows a user to see what direction where their score is heading. In addition, a customer will receive his or her TransUnion auto grade. Finally, a consumer can get access to his or her Vantage Score, which is a cumulative score across all three credit bureaus. Without a doubt, the TransUnion score is the most valuable information that Credit Karma offers, though the other two scores are valuable to most customers. Understanding: When looking at a credit profile, a consumer should understand what he or she is viewing. With a Credit Karma account, a customer will see more than his or her credit score. A user will see the total accounts he or she has, the age of the accounts, the amount of credit inquiries and much more. With all the information provided, a consumer will know exactly where he or she stands. Simulator: For consumers looking for how to improve credit score, the included simulator is a godsend. With this tool, a user can see what will hurt and improve their score. The simulator will help a customer who wants to get back on track. Ideally, a user would consult the score simulator before making any credit decisions. When doing this, one can avoid any serious dings to his or her credit score. Alerts: When actively monitoring ones credit score, a user can avoid serious problems. Luckily, Credit Karma alerts users of potential problems. For example, when a user is near a limit on one of his or her cards, the company will inform the client. While it may not seem important, it is crucial for a consumer to take proactive steps to protect his or her credit profile. Conclusion: There are plenty of

The internet age is filled with all kinds of innovations and world changing technologies. It’s also filled with glorious time wasters that take something like a movie you know and love, and recap it in a 60 second black and white animation with little talking. This is the latter. Related posts: Black Comedy Weakonomics Weekend Edition: Vodka Martini Edition Own A Piece Of Hollywood Thanks To the Hollywood Stock Exchange Related posts brought to you by Yet Another Related Posts Plugin.