Apr 9 2013

The Government Doesn’t Want You to Retire Rich

By |April 9th, 2013|Blog, Economics / Politics|25 Comments|

President Barack Obama is about to unveil his budget proposal, and parts of his proposal have already made their way into the news. One of the aspects of his new budget is that he wants to prohibit anyone from saving more than $3,000,000 in an IRA.

The White House issued a statement regarding this new proposal:

Under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.

How dare anyone try to save more than a “reasonable” amount of money for retirement!? The nerve of some people!

The proposal hasn’t been released yet so the details aren’t clear. What is clear is that the government is desperate for additional ways to tax the American people, and they have finally started turning towards retirement accounts.

Be Afraid of a “reasonable level of retirement saving”

A few months ago I posed a question: Is your 401k safe from the government?

I explained that part of the reason I took a loan from my 401k to buy a house is because I don’t trust the government to keep their hands off my retirement accounts.

While some people agreed with me, others suggested it was unlikely at best. Still others worried about my own mental health. A few of the responses included:

“I don’t see something like this ever happening in our lifetime unless the country was taken over or there was some global crisis like nuclear war or something like that.”

“After… telling us that the sky is falling and our retirement accounts will ultimately belong to someone else, I like a previous reader will bow out and refrain from visiting this blog.”

“I think you’re getting a little close to the edge, Kevin. Please don’t fall off!”

In November I was crazy for thinking the US government would go after private retirement accounts. Less than six months later we are already seeing proposals surface.

It worries me (and it should worry you too) that the government feels it has a right to determine “reasonable levels of retirement saving.”

poor old man

photo credit: Alex

Today it’s a $3 million cap on IRAs. But if that passes, why not $2 million? It still sounds like anyone with $2 million in an IRA is super rich. Then why not $1 million? Or $500,000?

And why stop with IRAs? People shouldn’t have $3 million in a 401k either. That’s not “reasonable”. Let’s cut that to $1 million or $500,000 too.

Why should some people get to retire with millions in the bank while others have to work part time jobs until the day they die? That’s just not REASONABLE!

If the knuckleheads in Washington think they know a reasonable budget for an individual or family, maybe they should look at how messed up their own budget is and realize they should back off!

Make Your Voice Heard

If you think it is reasonable for someone to reap the benefits of working their ass off and saving money, then you’re going to have to make your voice heard.

People who spend every dime they make as soon as it hits their pocket don’t deserve the same retirement as someone who chooses to save as much as possible. That’s not reasonable at all.

If this (or any other legislation to limit retirement savings) ever makes it to the floor of Congress, make sure to contact your Senator or your Representative and let them know that responsible financial planning deserves to be rewarded.

If you’d like to read more about how the proposed law might impact your personal finances, check out this great article at Seeking Alpha.

Readers: Does this proposal and/or White House statement change your attitude towards retirement accounts?

Apr 4 2013

A High Paying Career is Waiting for You

By |April 4th, 2013|Blog, Personal Finance Tips|6 Comments|

If you are sitting there right now thinking, “I wish I had a job” or even “I wish I had a job that pays $75,000+ a year” then listen up.

What if I told you that a corporate recruiter from a $10 billion dollar publicly traded company contacted me about a job simply because I had expressed interest in learning a particular skill? Check out this email:

New Picture

Last year I was looking for a promotion at work and I wanted to get into the mobile development space because I knew it was booming. Unfortunately I didn’t have any experience there. I joined Meetup groups in my area to try to learn more about it, but then found a new job in a different department and stopped my quest for mobile development knowledge.

However, my Meetup account is still active and this was in my profile:

I am very new to android development. I just downloaded the SDK a few days ago and walked through a tutorial to put an app on my ASUS Transformer Prime. I want to learn more about android development…

If you aren’t a technical person, those three sentences mean I know next to nothing about android programming. If there were an android development class at a college, I’d be on the first or second day of class.

And yet, a recruiter from a $10 billion company saw that bio and contacted me about a job. How crazy is that!?

The Opportunity in Mobile Development is Ridiculous

There are people with bachelor’s or master’s degrees and years of relevant work experience in different fields, and they might struggle to even get a recruiter to call them back after submitting their resume.

In the mobile development area, simply stating that you have done a web tutorial on the topic and want to learn more gets a recruiter contacting you!

So now that it’s clear being a mobile developer is basically a guarantee of a job, how do you actually learn to be a mobile developer?

Learning to be a Mobile Developer is Fast and Cheap!

The nice thing about mobile development is that it’s very new. Very few colleges even offer courses in mobile development, much less a whole degree program for it. Yes a computer science degree will help, but isn’t necessary to be a mobile developer.

mobile apps

photo credit: ashkyd

If you want to be a mobile developer, many high paying jobs will probably just require you to know how to program on mobile platforms. Some may want a college degree as well, but I find it hard to believe many companies would pass on a skilled mobile developer because they don’t have a college degree.

So you probably don’t need a degree, but you will definitely need skills. Where can you learn such a specialized skill? On the internet of course. Here are a few websites where you can learn on your own.

Team Treehouse – I saw an ad for this website on a youtube video and decided to give it a try. Holy crap, this thing was the best tutorial I’ve seen for a beginning mobile developer! I do know some programming, but I’m pretty sure anyone could make it through these courses no matter what their background. You can try it out free, and if you like what you see it will cost $25 a month to get access to everything. They also have a 30 day money back guarantee.

Udemy – I used Udemy to learn some javascript and php, and I really like the courses from Mark Lassoff. They were good for a beginner like me, and I was able to follow along and see exactly what he was doing. These are great because once you buy the class, you have it forever (instead of a monthly subscription). You can learn Android and iOS here, as well as just about anything else you might want.

Mark Lassoff has an Android course for beginners for $99. There are also cheaper options such as Android App Development by Example for only $29, but I’ve never used that instructor so I don’t know if it’s good or not.

I’m sure there are plenty of other websites where you can learn to program. Just make sure you learn as much as possible and start coming up with ideas for apps. One or two internet courses isn’t going to make you an expert. But if you spend 3-6 months really studying hard and building apps then I think you have a shot at a job.

You may not have a computer science degree, but if you go into an interview and tell your interviewer to whip out their smartphone and download your app, that just might get you the job.

Maintain a Portfolio

If you want to become a mobile developer, you should maintain a profile of everything you have created. Get your apps out in the marketplace when they are nice and polished. It doesn’t matter if you make money from them; it just matters that they work, they look nice, and people can find them.

Try to build a few apps that do completely different things. If you build one maze game, another puzzle game, and a third word search game, that’s not going to impress corporate recruiters much unless they want a game developer. Build a game, a shopping list, and a news reader app. You will learn much more, and it will show potential employers that you have a diverse skillset.

A High Paying Job is There for the Taking

How many times in your life are you going to come across an opportunity to get a high paying job without even needing a college degree? Probably not many.

Five years from now the market will be flooded with college grads that have “Mobile App Development” degrees. Eventually it will become like many other jobs where there are tons of qualified applicants and you will need education, experience, and serious skills to get a great job.

This is an opportunity of a lifetime for anyone who is sick of making $35,000 a year. You could easily double that as a good mobile developer.

Readers: What’s stopping you from learning a new skill (not necessarily mobile development) and earning more money?

Apr 2 2013

How to Turn in a Leased Car

By |April 2nd, 2013|Blog, Personal Finance Tips|2 Comments|

A few weeks ago I wrote about how terrible it was preparing my car to be turned in at the end of a lease, and how I hated having to wait and find out if they are going to charge me for damages that were above and beyond “normal wear and tear”.

I was told that I would hear from them in 7-10 days if they were going to charge me for any damage. It has now been over three weeks since I handed over the keys and I haven’t heard a word from Toyota.

I logged onto my Toyota Financial Services account and it says, “This account has been closed…”

Looks like the end of the lease wasn’t so bad after all!

How to Ensure You Aren’t Charged

When you turn in a lease, you have to look at the car as if it isn’t yours. Understand you were “borrowing” it from the dealer and they want it back in the same condition as you received it. I have two suggestions based on what I did.

1. Make sure to have your car inspected before turning it in. Either by an independent agency or just go to the dealer and have them take a look. This will tell you what you need to fix before returning the car.

2. Don’t try to trick them. They gave me two keys when I bought the car. I lost one. I could have just given back one key and hoped they didn’t notice or care, but I would have risked getting charged for a new one (and dealerships charge way more than independent shops).

I had a shop give me a new key for half of what the dealer would charge, and turned it in with both.

I also got some scratch repair stuff from Auto Zone and rubbed out some of the more noticeable scratches. This only cost about $15 bucks and may have saved me hundreds in body work.

I spent over $250 preparing that car to be turned in. They could have charged me a few thousand for a new key and some body work. I’d much rather pay $250 and not give them the chance.

I’m In the Clear No Matter What

At this point I don’t even care if they were to contact me and ask for money. I wouldn’t pay if they did.

fist pump

fist pump by theogeo

The car hasn’t been in my possession in over three weeks now. If there’s a dent or a scratch that I caused they should have contacted me earlier. If they do ask me for money, it’s probably because some damage was caused after I turned it in and they are trying to screw me again like they tried to do before.

If they’ve been holding the car for three weeks, they are responsible for anything that happens to it. That’s the bottom line.

I certainly hope they don’t call me, but if they do, I’m not gonna pay for anything.

This Doesn’t Change My Opinion on Leased Cars

Despite the fact that I won’t be paying up for damages, this has not changed my opinion on leased cars. I won’t do it again.

The next car we buy will be a used car, and will hopefully already have some cosmetic damage so that we can get it at a discount. I will never lease a car again and stress myself out about if I’ve kept it pretty enough for them at the return date.

The good news is I don’t have to worry about paying money to Toyota, and the company has partially restored my faith in them as an honest business (although I will NEVER go back to the dealer who tried to screw me).

Readers: Have you ever expected the worst and been pleasantly surprised with a company?

Apr 1 2013

How to Pay for Home Improvements

By |April 1st, 2013|General Personal Finance|1 Comment|

If you own a home and would like to do some renovations, it can be challenging to come up with thousands of dollars at a time to do some of the bigger renovations such as remodeling a bathroom, changing the layout of the kitchen, or building a new deck.

Home improvements can increase the value of your home, and in some cases also save you money on energy costs. If you don’t want to wait on your home improvements, here are a few ways to pay for them.

Get an Unsecured Loan from a Bank

If you have good credit, you may qualify for an unsecured loan with a low interest rate. Banks are willing to lend money to creditworthy borrowers, sometimes at rates as low as 5% APR.

Before you even apply for an unsecured loan, you will want to shop around at many different banks and see who is offering the best rates.

Consider a 5 year $8,000 loan. If you get a 5% rate, you’ll pay $1,058.19 in interest over the course of the loan. If you get a 7% rate, you’ll pay $1,504.58 in interest. Shopping for the best rate in this case could save you over $400.

Look at many different offers including Clydesdale Bank loans to make sure you find the best interest rate.

Get a Low Interest Credit Card

A credit card is actually just an unsecured line of credit that you can use anywhere they accept plastic. It’s very similar to an unsecured loan.

If you are going to use a credit card to buy your home improvement materials and pay contractors, the most important aspect of the card is the interest rate. Rewards do not matter if you are going to carry a balance; you should just look for the lowest rate.

The other benefit of credit cards is that some may offer a 0% introductory rate for a certain period of time. If you will be able to pay off the full balance of the card before the promotional rate expires, it is a great way to borrow money while paying little to no interest.

Keep in mind that some of the promotional rates will charge deferred interest if the whole balance isn’t paid before the promotion expires. That makes it very important to pay it off in a timely fashion.

Mar 28 2013

401k Match Day is like a Holiday

By |March 28th, 2013|Blog, Life|8 Comments|

If I could pick one day a year to repeat over and over again it wouldn’t be Christmas. It wouldn’t be my birthday either. Nope, the best (or at least most profitable) day of the year for me is 401k match day.

My company gives a 100% 401k match for up to 6% of your contributions, and then gives an extra 2%. The only thing is I don’t get the match every paycheck. The company contribution builds up over an entire year and is deposited in my account in one lump sum at the end of March.

That day was yesterday for me, which means my net worth got a huge boost!

401k Employer Contributions are Tax Free

When you contribute to your 401k, that money goes in tax free (unless it’s a Roth 401k). You will not pay taxes on that money until you take it out for retirement or the government changes the laws.

money jar

photo credit: Tax Credits

It’s the same when your employer contributes money for you. If they want to put $5,000 in your 401k, you get all 5,000 bucks! Get out of my pocket Uncle Sam!

If I were to ever look for a new job, one of my biggest concerns would be the 401k program. I get essentially an 8% match, which as far as I’m concerned is just an 8% raise over and above my annual salary. That’s crazy good and not many companies can match it.

Employer Matching is the Only Reason I Use My 401k

While I do love the 401k matching my company offers, I don’t really love the 401k for lots of reasons.

  • My investment options are limited (not enough Australian and Asian options)
  • I’m afraid the government might raid 401ks when they really need more money
  • I hate having money tied up for so long
  • I plan to retire on income, not savings

It would probably take me until I was well into my late 50’s or 60’s to retire on savings alone. I don’t wanna wait that long.

I’ve said it many times before, but I’ll say it again. If I can create enough passive income to pay for my life, then I’m going to do it and quit my job. As long as that passive income is steady then I can use that to live and don’t have to work.

With all that being said, I still can’t pass up a 401k where I’m getting such a great match. Heck, I could withdraw all my money out of my 401k and still come out ahead after taxes and penalties thanks to my employer’s contributions.

Readers: Do you have a 401k? Does your company match? If so, do you get a match every paycheck, or once a year like me?

Mar 27 2013

Can you trust LegalZoom Reviews?

By |March 27th, 2013|General Personal Finance|Comments Off|

It’s hard to find good legal help, and even harder to find legal help that won’t charge you too much. You can look for good lawyers on the internet or through word of mouth, but if the lawyer is really good he or she may be booked or cost too much. For these reasons, many people are starting to turn to online legal services for their needs.

There are many companies out there you can choose from, but just like finding a real-life lawyer, finding the online company to go with can be difficult as well. One of the most trusted companies is LegalZoom. In fact, it was one of the first internet based legal service and documentation companies to begin helping consumers with their legal needs. They’ve been around since 2001 and have accumulated a lot of reviews for potential customers to refer to.

But how do you know you can trust the LegalZoom reviews? It’s a well-known fact that many companies purchase reviews from writers now. So how can you be sure the review you’re reading (for any company, product, or service, really) is accurate, truthful, and not purchased and churned out from someone’s basement? Following a few simple steps and looking fora few key items will help you know what to look for when reading company reviews.

How to spot a fake review

There are a few ways to spot fake reviews.

  1. Be wary of reviews that use too many exclamation points, too many positive words, and too much enthusiasm. Unless a company made these reviewers millionaires, they probably aren’t that happy about the company.
  2. If the review is written like a press release, it’s a fake.
  3. If it doesn’t sound like a native English writer, it was probably outsourced. Even foreign natives writing a real review take the time to write the review in clear English.
  4. If you’re looking at LegalZoom reviews, for example, don’t settle on just one review and be done. That’s easy to do since the company offers the same basic services throughout the site. Read multiple reviews on everything you’re looking to purchase.
  5. Check the reviewer. If this person reviews many products, they’re getting paid to do so.
  6. If a product or company is reviewed many times in the same day, or receives multiple reviews, or back-to-back reviews written in the same style, they probably pay to have reviews.

Checking LegalZoom

LegalZoom reviews seem to be truthful. The company has a solid reputation and has been around for years. Lawyers are even using the site to file legal documents online, now, so that says something about the company’s reliability. If you go to the site, there are several reviews listed, and all seem to be honest, accurate, and positive. Using the above guidelines, none stuck out as being fake.

When buying anything these days it’s hard to know if you’re making a sound purchasing decision. This is not something you want to doubt when using something as important as legal services. Go with a well-reviewed lawyer or company you can trust and you can’t go wrong.