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Last week I received an email from a fellow blogger (we’ll call him Blogger X) letting me know that he was going to file his taxes soon, and he asked if I could offer him any last minute suggestions?

I responded to his email and offered a few pieces of advice, along with a few alternatives that I thought he could explore further. (It’s worth noting, I believe 2007 was the first year Blogger X earned an income from his blog.)

A mild disclaimer

I plan on detailing the gist of what I wrote to him in this post, but before I do, I want to say in big letters I AM NOT A CPA and before making any tax related decisions please consult your accountant and do your own due diligence.

With that said, and at the risk of sounding redundant, here’s an excerpt from my email response to Blogger X…

Continue Reading “How to Reduce Your Taxable Income”

For the average investor, the keys to investing success, over the long-term, are diversification and portfolio re-balancing, pretty straight forward.

But before you can even diversify and re-balance your investments, you need to choose the type of investments to make up your accounts, and I’ve written a lot about that, as well.

Here’s where you need to listen up!

Before you choose your investments you need to understand what you CAN and CAN NOT control. I think investors for the most part, have this all wrong.

What am I talking about?

A lot of investors are under the notion that it’s their duty to control the performance of their investments. I say forget about doing this, this is completely out of your control, for the most part. Thinking that you can control your investment performance is the first critical mistake the average investor makes. I would suggest ridding your brain of these thoughts and focusing on what you CAN control.

Continue Reading “The Single Most Important Thing You Can Control (when it comes to your investments)”

There is a never ending debate about where you should direct your retirement contributions - into a traditional 401k, Roth 401k, a little of each? a portion into a regular taxable account?

I know this to be true because I’m constantly getting involved in this debate, sometimes on my blog, sometimes elsewhere. Here’s a Roth 401K vs Traditional 401K thread over on All Financial Matters (from yesterday) - that I commented on this morning - dealing with this subject. (Please keep in mind, there are some well informed people chiming in.)

Roth 401k retirement plan option

With the growing popularity of the Roth 401K plan, you get yet another option in the universe of possibilities; as if American investors weren’t confused enough with all their choices. Keep in mind, the income limitations that make investors ineligible for a Roth IRA do not exist with a Roth 401K contribution.

Left scratching your head

It seems to me, when it comes to planning the future, people don’t know where to begin. It’s the same type of overwhelming feeling you get when walking down the cereal aisle of the super market. It almost makes you want to turn around. I know I put the blinders on and just think Lucky Charms, find the Lucky Charms, lol.

Continue Reading “‘My Two Cents’ On Your 401k Retirement Plan Options”

Back on January 24th I wrote a piece called Easing into the Golden Years - the 60’s and Beyond.

That post was part of a writing project sponsored by the M - Network and friends, where 16 different bloggers got together and covered “Money Matters For All Ages.”

There was a tremendous amount of positive feedback from the series, (including being featured on MSN Money) so all the bloggers involved agreed to re-distribute the series in the form of a FREE eBook.

This way all the articles would be archived for all of eternity, and more importantly, all in one place. I think you’ll find MMFAA is an easy read and a handy reference, no matter what phase of life you’re interested in learning more about.

Before you download the book (below) I would like to thank everyone involved, especially David from My Two Dollars, Pinyo from Moolanomy and Mike from Quest For Four Pillars for all the hard work they put into making this eBook a reality. Thanks!

Download the free Money Matters For All Ages eBook!

One last thing!

Since I’m in the thanking mood - I’d like to thank Jeremy at GenerationX Finance for allowing me to guest post over on his blog last Friday. If you missed it, I wrote a post called 3 Effective Option Strategies to Soften The Blow in This Volatile Market that I think you may like!

The vast majority of Americans still make their salary reduction contributions to traditional 401K’s. This is mainly due to the fact that you weren’t even allowed to make a Roth contribution into a 401K until 2006.

If you participated in a 401K plan, prior to 2006, your only choice was to make a traditional pre-tax contribution to a 401K. Sadly, it still is the only choice for the vast majority of Americans.

Many employers have been slow to amend existing 401K plans that would give employees the choice of making a Roth contribution; a lot of employers don’t want to deal with the extra work and administrative responsibilities that come with making the changes to an existing 401K plan. So, they put it on the back burner, at the end of the TO DO LIST, which is what’s happened over the past 2 years.

For my money, if your employer is one of the few offering a Roth 401K contribution alternative, it’s a good sign for you as an employee. It tells me the employer is proactive and cares about the future(s) of those that work there.

Continue Reading “8 Things You Need To Know About a Roth 401K for 2008″

Over the next week or so I’m going to be taking a closer look at 401K plans.

I’ll be focusing slightly more on the Roth 401K (as opposed to a regular 401K), since few people I come across are familiar with it. Today we start with the basics.

A 401K plan is a salary reduction plan that allows employees to defer a portion of their salary (through payroll deductions) towards retirement. For 2008, employees are limited to salary reduction contributions of $15,500. For employees over the age of 50, the law now permits “catch up” contributions of an additional $5,000 for 2008.

Keep in mind, the above paragraph describes the general characteristics of any 401K. The way your salary reduction contribution is treated (from a tax standpoint) is what determines whether it’s a regular 401K contribution or a Roth 401K contribution.

Continue Reading “Regular 401K vs Roth 401K - The Basics”

George W Bush recently signed off on the 168 billion dollar economic stimulus rescue package.

What does this mean for the average person?

It means that 128 million American households will begin receiving economic stimulus checks from the federal government starting in May. I’m not going to go into all the details but here’s the gist of it: If you’re single and make less than $75,000 you will be receiving a check for $600. And if you’re married (making less than $150,000) you will be getting $1200, plus an additional $300 for each child you have.

Americans are incredible consumers

The purpose of this whole economic stimulus package is to give people some cold hard cash to pump back into our drooping economy, giving it a nice shot in the arm. The government thinks, since it’s likely we’re headed for a recession, this would be a good way to get things going back in the right direction.

I’d say they are also acutely aware that once American consumers get their hands on these mighty (or not so might these days) greenbacks they will feed the addiction ‘to spend, spend, spend and spend some more.’

Continue Reading “How to Spend Your Economic Stimulus Rescue Check”

I was so HOT after watching the whole Roger Clemens/Brian McNamee thing today that I had to wait a few hours before writing this post. I think if I put it up initially I might have written something I regret or let a few expletives fly.

Before I get into a list of my observations from today, I just want to say that I was glued to the TV all afternoon.

Those were 4 of the most riveting, controversial and politically charged hours of TV I think I’ve ever seen. When all was said and done any doubts I had were wiped away. Although, I’m sure it wouldn’t be proved in a court of law, IMHO, Roger Clemens is SO SO guilty.

Continue Reading “10 Observations After Watching Roger Clemens Flail About”

I’ve been a member of StumbleUpon since November 16th, 2007. I didn’t start using it in earnest until January 9th, 2008 @ 6:02pm EST.

That post was the first in a litany of posts that I’ve designated as one of ‘My Favorites’. In little over a month’s time I have nearly 100 fans (maybe today I’ll cross over;) and receive around 25 visitors who stumble upon my page each day.

In that time frame, I’ve learned heaps about SU and want to share 10 tips that can make you a big hit on StumbleUpon. But before I give you the TOP TEN, I need to do 2 things first:

#1 - Tell you about the approach I would recommend taking on StumbleUpon:

When I first came to SU, like many of you, I was looking at it as a way to bring traffic to my blog, but a beautiful thing happened along the way, I fell in love with the site. I now look at SU as the best way I know of to find and share interesting and helpful content with my SU friends, which I love doing (to a fault almost, very addictive).

Continue Reading “10 Simple Tips to StumbleUpon Success (That I Wish Someone Had Told Me About)”

This morning - over on Moolanomy - is an interview Pinyo conducted with yours truly last week.

As a part of the interview Pinyo asked me, “what’s the minimum requirement for someone to offer financial advice?”

I thought he meant what was the minimum amount of investable assets you need to work with a financial advisor, and I went on to answer that question. Although he was happy for that answer, what he was really trying to ask me was… what qualifies someone to offer advice to the public professionally?

(For the purposes of this post, we’re going to add 5 little words to the end of that question. So the question now reads… what qualifies someone to offer advice to the public professionally AND BE COMPENSATED FOR IT?)

Continue Reading “So You Want To Become A Financial Advisor?”