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Last week I wrote a post on different ways you can reduce your reported taxable income. Besides offering some tax advice to one of my blogging contemporaries - Blogger X , I listed a few retirement plans (for those with self-employment income) that allow you to sock away large sums of pre-tax money each year.

I’d like to take a closer look at 3 of the plans I mentioned in that post. For the sake of keeping it simple, I’m going to breakdown each plan into an individual blog post. Let’s begin with the SEP IRA, the plan of choice for last week’s subject - Blogger X.

SEP (Simplified Employee Pension) Plan Suitability

A SEP IRA is the way to go if you’re a small employer (typically less than 10 employees and many times just one employee, YOU!) looking for a simple retirement plan that’s easy to install and administer. Most financial institutions will have the plan documents on file and it’s as easy as opening up any investment or bank account.

Continue Reading “Pros and Cons of a SEP IRA”

According to Wikipedia, the languages of India primarily fall into two major categories: Indo-European and Dravidian. According to the 2001 Census of India, individual mother tongues number in the several hundred.

You’re probably wondering what any of that has to do with ‘fee-only’ vs ‘fee based’ advisors? Well, that’s a good question, I bring it up to make a point.

Much like the languages of India, financial advisors (more and more these days) tend to fall into two major categories: Fee Based and Fee Only. And within these categories there are so many different ways to run an advisory business; the many different advisory factions kind of reminded me of the breakdown of different mother tongues found in India. (not too sure if this analogy worked… lol)

Keep it simple stupid

I want to try and simplify things here, so the average investor isn’t left with a headache when it comes to understanding the different terminology. But before I break down ‘fee based’ vs ‘fee only’ I want to refer you to an article I wrote last July that talks more to the differences in compensation, that I will lightly touch on here. Please read that post!

Continue Reading ““Fee Based” vs “Fee Only” Financial Advisors”

I know I promised a few articles on the different types of self-employed retirement plans, as well as, a follow up post to the ‘fee only vs. fee based’ debate that occurred in the comments section of my Interview with Dylan Ross. And that’s all going to happen this week.

I will post the ‘fee only/fee based‘ article tomorrow, followed by 4 separate posts addressing the pros and cons of SEP’s, SIMPLE’s, KEOGH’s and SOLO 401(k)’s. But first, I wanted to squeeze in a quasi off-topic post, inspired by something that caught my eye late last week.

Last Thursday, I read an interesting article over on Wise Bread titled Chinese Money Habits - How My Culture Influences My Attitudes Towards Money. I thought that post by Xin Lu was incredibly valuable because it shed some light on to something most Americans know little about.

I think a lot of us are hearing more and more about China in the news, but for the most part, the manner in which the average Chinese lives their life remains an enigma to the average American.

Continue Reading “My Personal Experience with Chinese Money Habits”

My college Alma mater, Manhattan College, is about to take the court in the quarterfinals of the MAAC Conference Basketball Tournament. They’re a big under dog, playing against the #1 seed Siena, but I’m excited for an upset. I can hear it now… Let’s Go Jaspers!

I would like to extend a hearty welcome to David from The Good Human, the newest member of The Life Skills Network! And congratulations to Mrs. Micah one of the nicest people in the personal finance blogosphere, she launched The Finwikian and became the newest member of the M - Network.

Without further ado, here are my favorite StumbleUpon articles from the past week:

Financial Planning

Predicting Retirement: Dynamic Behavior Analysis - Adding dynamic behavior analysis to retirement planning makes for more realistic lifestyle and investment projections. I’m going to have to call Art and find out what software he is talking about…

The Early Retirement Path - Want to retire by age 45? Read how one man and his family plan to do it. I’ve often talked in the past about the negative connotation most people associate with the word ‘frugal.’ Well this man shows how living frugally will (possibly) move his retirement date forward by 25 years…

Continue Reading “My Favorite ‘StumbleUpon’ Articles of the Week”

Dylan Ross is a CERTIFIED FINANCIAL PLANNER(TM) professional and owner of Swan Financial Planning, LLC, a registered investment adviser in New Jersey. Some of you may recognize Dylan from Get Rich Slowly, where he is one of the moderators in the forum there.

In the past I’ve written quite a bit about how I run a “Fee based” advisory business, well Dylan is a member of a growing segment of “Fee Only” Advisors. I was interested to learn more about his approach to the advisory business, and happy to interview him.

Tell us a little more about yourself and your practice Swan Financial Planning?

I started out in the financial industry in 2000 working at a large, full-service brokerage. While I was there, I completed my CFP certification requirements, but eventually became frustrated because of the inability to actually practice financial planning due to industry limitations.

So, I left the brokerage industry altogether and started Swan Financial Planning as a New Jersey Registered Investment Adviser firm, in late 2005. Initially, I worked only on retainer and then added an hourly option last year to make my services more accessible.

I also joined the Garrett Planning network around that time. Now, most of what I do is on an hourly basis, and I limit the number of retainer clients I have.

Continue Reading “An Interview with Dylan Ross”

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”

A day late on this roundup, but as they say, better late than never.

And being late has it’s benefits, as I am able to include the link here to a wonderful carnival of personal finance over at The Baglady, which had a homeless theme. A lot of interesting facts there about the homeless in our country.

Before I get into my favorite stuff from last week, I’d like to do a little housekeeping. Although this a financial planning blog, I continue to get a lot of traffic for articles that are off-topic… not sure what to make of that. Either way I’m happy for it.

In response, I have created a new category that I will be contributing to on a fairly regular basis. The name of the category will be My Community and Social Media, to borrow a phrase used by one of my favorite social media bloggers.

Without further ado, here are My Favorite (on topic;) articles from the past week:

Continue Reading “My Favorite Stuff from Last Week”

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!