Archive for April, 2010

Angie’s List, Craigslist, Yelp: Help Wanted for Products & Services

Off the top of my head, I can think of three home improvement projects I want to tackle. I find that no matter what the season is, there’s always something that needs some tweaking at home. After all, things can break or need fixing anytime. If you’re not so handy like me, [...]

Angie’s List, Craigslist, Yelp: Help Wanted for Products & Services

Should We Buy a Vacation Home?

Now that summer is almost here, and we’re scheduling our vacations for the summer, we have the itch to buy our own vacation house…. again. (This happens every summer). Every time we rent a place, my financial brain starts spinning.

What if we buy our own vacation house, and rent it out when we aren’t using it? Wouldn’t that be a better investment than renting a place each time we go on vacation?

Pros to Buying a Vacation Home

Making Memories with the Kids. I have fond memories of going to our family’s cabin as a kid. I’d love to do the same for my kids. Scott cut back to 3 days a week, so it would be easy for us to go on long weekends.

Rental Income. When we aren’t there, we could rent out the vacation home on VRBO or enroll in a rental program if we buy a place that belongs to one. I’m being realistic knowing that the rental income wouldn’t completely cover the costs of ownership, but hopefully, it would offset the cost of owning a vacation property. A little perk for second homes: you can rent it for up to 15 days per year, and the income is tax free!

Extra Tax Benefits. There are some extra tax deductions you can take on your vacation home depending on how many days per year you rent it. The IRS has different rules based on whether or not you use it more than 14 days or 10 percent of the time it was rented. Check out a good outline on the best way to minimize taxes on a vacation home.

An Investment? I would normally think of a 2nd home as a money pit, but I found an interesting calculation that estimated a yield equal to 9% per year after taxes if you use the property only 15 days and rent it for another 15 days (at $150 per day). I’ll have to run some of my own calculations, but this could actually be a decent investment, right?

Cons to Buying a Vacation Home

Work. Vacation homes quickly become work. You end up spending your vacation doing “work” at the house on maintenance and upkeep.

Furnishings. Once you buy the home, then you have to buy furnishings. Extra costs that you don’t put into the analysis will always creep in.

Guilt. Don’t forget the guilty feeling that you have when you don’t use it enough!

Boats. Of course, when you buy a home on a lake, then you want to buy a boat to go with it. One more thing we won’t use. I should know, I used to have a boat, which we used a lot at first…. then not very much. The summer before we sold it, we only used it twice. Although part of me thinks we’d use it more now with the kids.

Location

We’re also caught up on the location. We’re considering a place “up north” which would be between 3-4 hours from here. Although, since it’s such a popular destination, the prices for a place with decent lake frontage are pretty expensive.

We’re also considering a place at Lake Cumberland, where we go each year with Scott’s family, but it’s pretty far from here, so we wouldn’t get as much use out of it. However, when we’re there, our kids would get to see their grandparents more. And it’s considerably cheaper than any of the properties around here.

Decisions, decisions….

What do you think? Should we buy a vacation home? What would you do?

Debt

Retirement

By the Numbers

And More!

By the way, in case you missed it, we had to run Free Money Friday early this week since the PerkStreet 2% Cash Back Card offer expires today.

Written by Madison


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How Much are Your Employee Benefits Worth?

Employee benefits vary across companies but typically include things like your health plans, disability benefits, life insurance options, and your retirement benefits.
The amount your company pays for those health benefits and employee insurance packages can be substantial and is something that you should factor into any job search in addition to your salary. The value [...]

Withdraw Money from Brokerage Account

Early this week, I mentioned in one of my posts that I am in the process of transferring money out of Scottrade account. Since it’s the first time for me to withdraw money, I had to set up checking writing and apply for a Visa check card so I can use them whenever I want [...]

Original Post on The Sun’s Financial Diary

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Withdraw Money from Brokerage Account

Friday Finance Findings for April 30th

This weekend I was hoping to be firing up my new smoker for the first time and smoking some baby back ribs. Unfortunately, my plans have been foiled. I purchased a Weber Smokey Mountain late last week along with a few other things and because of the size of the smoker it had to be [...]

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Friday Finance Findings for April 30th

Oil Spill Disaster & The Costs of the Pursuit of Profit

So what’s the emergency plan for this disaster?
This is really frightening. On the heels of Earth Day, I’m greeted — no shocked — by the latest environmental disaster (an oil rig exploded and continues to spill oil off the Louisiana coast) transpiring somewhere in the Gulf of Mexico. I take the conservative’s stand [...]

Oil Spill Disaster & The Costs of the Pursuit of Profit

A Plea for Credit Score Transparency

Do you know what your credit score is? Sorry to trick you with a loaded question like that. Different credit bureaus come up with different algorithms leading to different numbers. The three major credit bureaus, Equifax, Experian, and TransUnion, could all give you different numbers. And to get those numbers you typically [...]

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Chase Credit Card Alerts Save the Day!

Chase credit card alerts have saved me from late fees and missed payments more than once. I was reminded of this yesterday when a big transaction came through on my card and I was notified of the larger than normal charge. I’ve only used the alerts for my Chase Freedom and Chase Sapphire cards but I [...]

PerkStreet 2% Cash Back Card

It’s Free Money Friday… on Thursday this week! This PerkStreet offer expires tomorrow, so I wanted to make sure you had enough time to sign up for it.

I know the 2% cash back credit card is hot item right now; here is a 2% cash back card for the debit card users courtesy of PerkStreet Financial!

How to Get Your 2% Cash Back Debit Card

  1. Open a PerkStreet account with $25 by April 30, 2010.
  2. Select the cash back perk when you open your account. (The other choices are coffee or music).
  3. Earn 2% cash back on all non-PIN debit card purchases for six months.

PerkStreet 2% Cash Back Terms and Conditions

  • This offer is not valid for current PerkStreet customers or former customers who closed their accounts in the last 12 months.
  • You are not eligible if you share a household with a PerkStreet customer.
  • After the six month period, you’ll earn 1% cash back on all non-PIN debit card purchases.

PerkStreet Tips

Use Your account. The PerkStreet account has no fees when you use your account and no minimum balance requirement. There is an inactivity fee if you don’t use your account, but if you’re using the account for 2% cash back, you’ll probably use it frequently.

Set up an automatic transaction. If you think there will be a time when you won’t use your account, do yourself a favor and set up an automatic transaction, like a monthly bill pay, or scheduled withdrawal or deposit to the account. I like to set up automatic transfers from one of our other accounts (like FNBO Direct or ING Direct for anything that needs a monthly transfer.

Sign Up for PerkStreet

Written by Madison


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In Defense of The IRS

For better or worse, the Internal Revenue Service has always maintained a reputation as a black cloud that hangs over us – a Big Brother watching our every financial move.  Ask most people what they fear most about filing their taxes and they’ll likely tell you that an audit from the IRS is number one [...]

Original Post on The Sun’s Financial Diary

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In Defense of The IRS

April 2010 Net Worth Update (+1.34%) – New Beginnings Edition

Welcome to the Million Dollar Journey April 2010 Net Worth Update – The New Beginnings Edition
For those of you following my net worth updates, you may have noticed that the bulk of the net worth increase is due to savings.  The savings have been higher than normal as of late due to higher [...]

how to find disability insurance

Disability insurance is something everyone should have, yet some employers simply don’t offer this important kind of coverage that takes care of you financially in the event you become disabled. Privately purchased disability insurance isn’t cheap, but if you ever need it, its definitely worth the initial outlay. Even if your [...]

how to find disability insurance is an original article from the website brip blap.

Weekly Roundup: Where’s the Market Headed?

Over the last year, the market has made a nice rebound, and fortunately many have seen some of their wealth on paper restored (those that didn’t get out at the bottom and give up, that is). I’m far from a market expert, but it does seem things are still on shaky ground. Would love to [...]

Post by Frugal Dad

How to Cure Financial Constipation

What was the last big financial decision you had to make? Did you immediately know the answer and take care of it right away or did you file it in the “research and ponder” pile for further deliberation?
If you’re like me, you probably put some thought into it and took your time so you could [...]

Free Restaurant Gift Certificates Giveaway from BigCrumbs

Lots of good things and events ahead over the next few weeks here at The Digerati Life! To start with, I am noticing that my traffic meter is inching its way towards the 4 millionth mark! It may take a couple more weeks to get there but it’s getting there! I’m also [...]

Free Restaurant Gift Certificates Giveaway from BigCrumbs

AMEX Gift Cards Fee-Free Code for Mother’s Day

American Express is offering fee-free code for AMEX gift card purchases for the up coming 2010 Mother’s Day, May 9, 2010.
From now to August 15, 2010, when you purchase gift cards from American Express with your AMEX credit cards, you will not be charged with a purchase fee of $3.95 per card when using code [...]

Original Post on The Sun’s Financial Diary

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AMEX Gift Cards Fee-Free Code for Mother’s Day

An Ounce of Prevention

Saving money couldn’t be simpler: start to prolong the life of what you already have. From your car to your furniture to your clothing, the longer you’re able to squeeze life out of them, the longer you’re able to keep more cash where it belongs – with you! For generations it’s been said that an [...]

Original Post on The Sun’s Financial Diary

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An Ounce of Prevention

0% Balance Transfers Still Exist

We haven’t talked about leverage and credit cards lately. Are the credit card games over? Is the 0% balance transfer gone? No.

After I tallied our current balance transfer money at just over $172,000, The Rat made a comment that he loves the “articles on the successes you’ve attained by leveraging.” It reminded me we needed to revisit balance transfers.

0% Balance Transfers

Zero interest on balance transfers are a dirt cheap way to leverage other people’s money. When searching for 0% credit card balance transfers here are some of the criteria I currently watch for:

Long Intro Period. A six month 0% balance transfer doesn’t do me much good. By the time I implement a strategy, it’s almost time to pay it off. But a balance transfer like the Citi Platinum Select card currently has 0% balance transfer for 15 months. The longer the balance transfer, the more the offer is worth.

Capped Fees. While the 0% balance transfer no fee offers are harder to find for new cards, looking for offers with max fees are still available. Barclays currently has a $75 max fee for 0% on balance transfers for new applications.

Offers by mail. Right now the majority of our 0% balance transfer credit cards come from offers in the mail for cards we already have. We just did a fantastic $35,000 0% balance transfer from an old version of the Fidelity Credit Card. They still let you reallocate credit limits, so it’s a great reason to keep cards open, even with small credit limits.

Leveraging our Balance Transfers

While I don’t use our 0% credit card balance transfers strictly to sit in savings accounts anymore (since bank rates are low right now), I still use balance transfers for other opportunities.

Right now most of our 0% balance transfer money is temporarily lowering our mortgage and heloc rates and securing lower rates than the commercial financing for our real estate investments.

I routinely calculate the cheapest way to fund an investment, whether it’s using our own money, financing it with conventional loans, or utilizing a credit card offer. Most of the time, for obvious mathematical reasons, the 0% on balance transfers are the way to go!

Written by Madison


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Poll: Are Your Vacation Plans Different This Year?

Many families take an annual summer vacation to get away for a week or two. In some cases it’s just a quick trip up to the lake, while others make it a cross-country adventure. Whatever the vacation, it costs money. If you drive, it’s gas and maybe a rental car. If you fly, you obviously [...]

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Poll: Are Your Vacation Plans Different This Year?

Backing Up Your (Personal Finance) Data To The Cloud

Readers would be aware of the significance of backing up their data. Personal finance is as much about saving and investing as it is about keeping proper records of progress or regress. Maintaining an excellent budget and/or net worth spreadsheet is only useful if it is available when needed. There are several files that may [...]

Easy Credit Card Management Tips

Many people hate credit cards, but in reality, if they are used correctly, they can be very beneficial to you financially. I’m actually one of those folks who have pledged their love for credit cards with my own strong reasons. But granted, it’s a polarizing subject for many. The reality is that by [...]

Easy Credit Card Management Tips

Personal Finance Links (2010 NFL Draft Edition)

I’ve been a little wrapped up in the NFL Draft over the last week. I always take this time after getting taxes done to throw my thoughts about finances aside for a little bit and focus and my other true love – football. Having grown up in New England, I’m a Patriots fan. [...]

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How Would You Treat Your Neighbor?

You know, it’s really unfair that only certain people get to make billions on the inability of some consumers to make their house payments each month. It’s also unfair that insurance company executives make money by sometimes disregarding the health of their policyholders. Of course, I’m so distracted by figuring out whether or not [...]

Original Post on The Sun’s Financial Diary

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How Would You Treat Your Neighbor?

What You Need to Know Before Co-Signing a Loan

Have you ever been asked to co-sign a loan? Maybe a friend, relative, or family member is having trouble getting a loan and they need someone else to co-sign. Or maybe you are a parent with a teenager who is trying to get a credit card and can’t because of the new credit card rules [...]

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

What You Need to Know Before Co-Signing a Loan

Roth Conversion Strategy to Minimize Taxes

Since the number of Roth IRA conversions per year is unlimited, and we have the ability to unconvert the Roth IRA conversions, there’s a fantastic strategy to Roth IRA conversions to minimize your taxes!

We previously explored roth conversion strategies like increasing your basis to avoid taxes, but if you’re ready to convert the taxable portion of your traditional IRA, this one might be for you!

Roth IRA Conversion Strategy

Here’s the plan to execute the Roth IRA conversion strategy:

Create multiple traditional IRAs. For example, if you have a $100,000 traditional IRA to convert, separate it into 4 $25,000 traditional IRAs.

Convert each IRA. For each account, make a traditional IRA conversion to a Roth IRA. You’ll want to keep each new Roth IRA separate.

Invest differently. In your new Roth IRAs, you’ll want to take a separate investment approach. Separating by each asset class would probably make the most sense and gives the most flexibility.

Monitor Returns. Since each Roth IRA holds a different asset class, the returns will vary. If the value goes up, leave it alone.

Recharacterize. Select the accounts where the value went down, which could be all, some, or none, of the new Roth IRAs. Reverse the conversions with a recharacterization by October 15, 2011 (with an extension), for 2010 Roth IRA conversions.

Tax Savings. With this strategy you’ll avoid paying taxes on money you lost, without having to recharacterize the entire conversion, allowing you to keep the conversions on the winners!

Tips and Tricks

Reconvert. You can later reconvert the money that you recharacterized, but there is a waiting period of at least 30 days and at least until the next year. You’ll be able to reconvert at a lower value, which means lower taxes.

Rebalance and Consolidate. After you’re done converting, you can put the Roth IRAs back together for a more simplified record keeping.

Keep Good Records. The paperwork on this one could get very complicated if you take it to the extreme. Be sure to keep good records so you don’t make tax time next year a real headache!

Communicate Clearly. If you have multiple accounts, you’ll need to work closely with your broker to make sure the correct conversions and recharacterizations take place. I’ve done Roth IRA conversions and recharacterizations at both Scottrade and Vanguard before without any issues.

More Helpful Roth IRA information:

Written by Madison


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