Monthly Archives: October 2007

Thinking About Retirement – A Stroll Through My Blogroll

I will be 33 in January – and I’ve been thinking about my retirement plans. Apparently, I’m not the only one who’s been thinking about retirement – check out these articles from my blogroll:

AllFinancialMatters has an interesting article about Automatic IRAs – I like the idea of making investing easier – but if companies move to this plan, would 401K matching be a thing of the past?  I’ll have to do some further research.

Blueprint has written about Target Retirement Funds – Are they a good idea for non-retirement savings?  I simply purchase index funds – but I love the fact that AJ (the reader who asked Blueprint about non-retirement savings) has “extra” money!  Awesome!

Flexo is debunking certain retirement myths – My favorite is #3 – Everyone has debt – As Flexo points out, most folks who are debt free keep it to themselves – except for me, of course! :)

Nickel did some research – and the news is mixed – elective 403(b) 401(k) and 457(b) limits for 2008 will be the same as 2007 – $15,500 – but the aggregate limit will go up by $1000 to $46,000. Confused?  Nickel did a much better job of explaining it!

Free Money Finance writes so many good articles, especially about retirement.  Here’s one I bookmarked a few months ago – 5 401K Mistakes To Avoid – Number 1 is “Be sure you participate!”

JD reviewed a “must read” – The Automatic Millionaire – JD is the king of book reviews – and he’s the reason that I spend so much money on personal finance books!

MBH wrote this powerful post a few months ago – and I’ve been waiting for this roundup so that I could include it.  So many people dream of retirement – but here’s how to kill that dream. Sobering, but I really, really find this to be a powerful post.

The Digerati Life writes about investing styles.

Lazy man writes about market timing and the 401K.

Money Smart Life has an article about spousal IRAs.

GenX has a guide to Morning Star’s mutual fund tool.

4M has a tale of two ETFs.

Sun answers the age-old question – Roth or Traditional?

My Two Dollars has ideas about waiting too long to save for retirement.

Clever Dude wrote this post a few months ago – but now that we are nearing the end of the year – I think folks might find the information to be very, very useful – Should you contribute to your 401K, even if you get no match?

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Day 29 of 33 Days And 33 Ways To Save Money And Reduce Debt: Don’t Feel Bad For Keeping Things Simple

Click here to read all of the 33 Days And 33 Ways To Save Money And Reduce Debt posts.

Day 29: Don’t Feel Bad For Keeping Things Simple

Here’s what I think – If you spend enough time reading about personal finance, watching CNBC, and visiting financial websites – your head might explode.    With all of the information that is available, you would think that everyone in America would be financially secure, out of debt, well-diversified, and on the way to enjoyable retirements.  But, as you well know, most folks are living paycheck-to-paycheck, in debt, poorly invested, and worried about their retirement plans.

Is it reasonable to ask – “What’s wrong”?  With so much information – so many ways to “get” educated and “take control” – why are so many people still struggling financially?

I think I know.  Taking control appears to be “too complex” – so most people throw up their hands and settle.  Most people don’t have (won’t take) the time to sit down and create a budget – because they don’t really know where to begin or how to begin.  Lots of folks (contrary to what most personal finance bloggers might think) don’t pay off their credit cards each month – even though they know they should.  I have seen statistics that over 50% of married couples don’t have wills, that more than 35% of workers don’t contribute to 401ks and that more than 30% of workers have borrowed from their retirement plans to pay off debt.

Why?  If you talk to people, they will quickly admit that they worry about their money – but that’s about as far as it goes.  Clearly, there is a huge gap between where folks wish they were and where they actually are.  Pick up any personal finance and you’ll see dozens of ‘how to’ articles.  Surf through my site (or those listed in my blog roll) and you’ll pick up tip after tip after tip – idea upon idea – for saving money, getting out of debt, and retiring with dignity.  But (and this isn’t a sentence I will enjoy typing) most of the folks I know in real life are still confused, still in debt, still afraid, and still worried about their finances.

I cannot put this off to the standard – “their lazy, they don’t care”.  So, I think that the problem is deeper – rooted in the fact that most folks are confused by financial jargon.

My goal, besides sharing my own story, is to create a place for “regular folks”.  There are thousands of websites and dozens of magazines dedicated to the “insiders” – and I’m glad those websites and magazines exist.  But, the truth is, I am quickly off-put by the “you should know our language” attitude of so many in the personal finance media.

Would you like to see my plans for 2008?  Here they are:

  • Each month, sit down for 20 minutes and create a budget
  • Spend as little as I can – save as much as a I can – give as much as I can
  • Fully fund my 403b ($15,500) – pre-tax – invested in an S&P 500 Index Fund
  • Fully fund my Roth IRA ($5000) – after-tax – invested in VTI (Total Market ETF)
  • Fully fund my Wife’s Roth IRA ($5000) – this money is after-tax – invested in RFG (Mid Cap ETF)
  • Fully fund my Daughter’s ESA ($2000) – after-tax – invested in RSP (S&P Equal Weight ETF)
  • Fully fund my Son’s ESA ($2000) – after-tax – invested in RSP (S&P Equal Weight ETF)
  • Deposit all extra money into my savings account – use savings for major purchases
  • Pay cash and avoid credit cards

Now, of course, as “life happens”, I might have to modify my plans (adding to them or creating new ones) – but the reality is, I like to keep things very, very simple.  My goal is to create plans that are simple, straight-forward, and “what I’ll actually do”.

The real keys are:

  • Have a plan that you understand
  • Have a plan that you will implement
  • Only change the plan if YOU are convinced that changing the plan is beneficial

I’d love to read your comments… Have you developed a simple system for managing your finances?

Click here to read all of the 33 Days And 33 Ways To Save Money And Reduce Debt posts.

Observant readers will note that this series has taken much longer than 33 days. I can assure you, I am blogging as often as life permits.

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You Will Not Believe This – Prisoners Found My Wallet By The Side Of The Road – And All Is Well

I lost my wallet a few weeks ago – and I feared that it was gone forever.  But, alas, my wallet has been returned to me.  Actually, the local sheriff’s office called and I went and picked my wallet up.  Here’s what happened -

Workers from the local department of  transportation have been mowing alongside our local highways – and prisoners from the local correctional facility have been helping them.  Apparently, one (or more) of the prisoners found my wallet – or what was left of it – and handed it over to the correctional officer assigned to their detail.  He gave it to the guys from the DOT, they gave it to the sheriff’s department, and one of the deputies who goes to my church called me and told me that he had it.  So, I drove down to the local jail and picked it up.  The mowers destroyed most of the contents – pieces of credit cards and my old license were stuffed into the various pockets.  The checks and other paper documents were totally shredded by the blades of the mower.

While I can’t use anything that is in the wallet, it’s good to know that I don’t really have to worry about it anymore.  I went back over the spot where they found the wallet, and I found bits and pieces of my social security card and some checks, but they were very, very tiny – fragments really.  Of course, someone could have written down all of the information from the wallet and then disposed of it on the side of the road, but I really think that I simply left it on top of my car while I was unpacking and when my wife drove to town, the wallet was blown off, into the roadside ditch.

I am impressed by the honesty of the young man (men) who found my wallet – and I am going to write a letter to head of the local correctional facility.  Hopefully, I’ll find some way that I can reward the inmate(s).

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A New Will – A New Life Insurance Policy – A New Van – Busy Days For NCN

I met with my lawyer today and gave him a copy of our current wills.  He’s going to review them and make any changes that might be necessary.  I had a friend help me write our original wills – a few years ago – using some software for creating your own will.  At that time, I had very few assets and I knew very, very little about personal finance and / or estate planning.  Now, I know (a little) more about personal finance and I want to shore up all of our end-of-life documents.

I have received, and am reviewing, several quotes for new term life insurance policies.  It will cost me a little more up front, but I am going to go ahead and get 30-year level term policies.  I am uninterested in whole life or universal insurance.  I will do my investing in my retirement accounts.  (By the way – if you have children and you want to have burial insurance – you can add a “rider” for them on your term life policy.  Contact your insurance agent for more information.)

My wife is still loving the new minivan.  I didn’t realize how stressed out I had been – worrying about what we were going to do about the old van, how much we could afford to pay, when we were going to buy something new, etc.  I guess you could say that this was the very first “major” test for the No Credit Needed “philosophy”.  I’m relieved that things went well, but I will confess that I don’t like seeing such a major drop in my savings account.  It’s time to really, really hammer down and pour some money back into my savings account.

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