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Monday, June 27, 2011

How long will retirement last?  Good question.  Most of us spend a lot of time thinking about how much money we’ll need to save for retirement, but we also need to consider how long we’ll be retired and how we'll spend that money throughout retirement.  Sadly these days, retiring before or at 65 seems to be a harder prospect for most people and we're living longer.

Tuesday, June 21, 2011

Used Car Refi?

With low rates and used car prices up, maybe it is time for a car loan refinance to help lower your payment. Remember it's not the extra cash you are after, but the lower payment.
All the self-protection may be catching up with them, but brace yourself.  It will, of course, hurt you more than it hurts them.

Wednesday, June 15, 2011

Gallup Survey

In line with what we talked about the other day, Gallup did a survey and found that of all the financial issues that Americans are facing today, we’re most concerned about not having enough money for retirement . . . 66% of us, in fact.  Reducing our expenses now and moving that “extra” money to a retirement or investment account will help us all address that concern.  With a little creative juice (think NSE), we won’t have to lose our standard of living by too much, which is our third biggest concern (58%). 
Our sixth biggest concern, by 41%, is not having enough money to pay for our children’s college education.  There is a lot of talk on the Internet these days about the “higher education bubble” and the virtual “debt slavery” our kids take on in order to get a college degree.  Now is the time that we need to assess whether paying $50,000 to $300,000 is worth a higher education degree, especially with about one in four recent college grads not being able to find a job right now. 

Our Piece of the Pie Is Shrinking

I don't knock anyone for getting a pay increase, especially if they are worth it, but I am starting to wonder if these guys ever really suffered any pain of the economic down turn. How many people could they hire with even half of that 36% increase?

Bank Chief's Pay...

Maybe it's time to rethink where our money sits?

Move Your Money

Monday, June 13, 2011

The New Normal

MarketWatch has a story on the Employee Benefit Research Institute’s latest study that suggests that the current, standard age of retirement is going the way to of the dodo bird.  We had to see this coming.  With the average life expectancy of both men and women increasing over the years, men current at 76 years old and women at 81 years old, living on a combination of government assistance that’s dwindling and personal savings that getting harder and harder to accumulate, it’s no wonder.  What is a Money Conscience person supposed to do?
There are several weapons in our arsenal, but they revolve around two factors: saving more and spending less.  Yuck!  That doesn’t sound fun.  Do not fret.  It’s not as bad as it sounds. 
First and foremost, set your savings aside before you budget any of your spending for the month, pay period, week or whatever regular interval you budget your money.  This is most ideally done by your employer portioning a set amount of money to be put into your retirement savings plan.  This way you don’t see and can’t get to it. 
Next, cut back on dining out and cook at home, whether with friends or family.  Stop spending $50 to go to the movies, but rather stream a movie from Netflix at home.  Netflix’s streaming plan is $8 a month now and there are thousands of movies from which to choose.  Go to the grocery store with a grocery list and a menu already created for the week and stick to it.  This helps make sure you don’t waste food and make rash purchases that you and your family don’t really need.  This summer, plan a staycation.  There are numerous websites that highlight free or relatively cheap events in your local area.  Take advantage of this.  Drive strategically.  This mean car pooling when we can, mapping out our routes when running errands so we don’t back track or so we’re not running out for only one reason.  Finally, consider the “Not So Expensive” (NSE).  These are the non-name brand items that are just as good as name brand, they’re the Yellow Tails of the world. 
With any money we have left over from practicing some, all or more of these money saving ideas, set aside in a Roth IRA, increase your company sponsored retirement plan savings or set aside in a brokerage account.  In all accounts, invest wisely, considering your time horizon, risk tolerance and your short and long-term financial goals. 

Saturday, June 11, 2011

Second Mortgage Killed the Economy Star

A recent article in the Wall Street Journal pointed to the higher number of individuals with negative equity and how many of those have a second mortgage on their primary residence. It eludes the severity of these second mortgages and the impact they have on this negative equity when it states “borrowers with second mortgages had deeper levels of negative equity—an average of $83,000 compared with $52,000—than borrowers without second mortgages.” I personally cannot image what it must feel like to have even the $52,000 hanging over my head let alone nearly 60% more at $83,000.
During the height of the housing boom Americans took $2.69 trillion dollars in equity out of their homes. Yes in many cases this was to put it back into the home through fix ups, new appliances, additions and remodels. Although vast numbers of individuals used their home equity as an ATM, taking out cash; cash that they later used on vacations, cars, clothes and other disposable and depreciating items.
Is it any wonder that our economy would take a turn for the worse when first homes started to not become as valuable as the loans being taken out on them. When you drain the equity out of the house soon it is going to be flat if not upside down. It is basically the same as taking the cash out of a business all the time and expecting it to be able to continue running and increasing value. Secondly, we were spending money we didn’t earn on things we didn’t need. Hmmm… sound familiar? Living Below Our Means was a forgotten concept and our star economy began to wheeze. A wheeze that we know turned eventually into pneumonia that it is still suffering from.
So as we personally start to recover or move on from the recession, we need to learn from our own or other’s mistakes and Live Below Our Means and be cautions to deplete the equity from an asset just for temporary pleasure.  
Second Mortgage Misery