Jan 15 2013

Safeguarding Your Home When Traveling

By |January 15th, 2013|Blog, Personal Finance Tips|11 Comments|

The following is a guest post by Thousandaire reader Aimee McNitt, who blogs over at PersonalBudgeting.com

Make no mistake, I love my stuff. My husband Scott and I have worked hard – Scott has, anyway – and stretched our budget (that’s where I come in) to be able to buy the things we want. His laptop, the video game system for the children and my jewelry cost us a bundle, and we make sure we enjoy them. It’s also why we can’t stand the thought of someone taking our stuff while we’re at the beach or on a cruise ship.

It’s a legitimate worry. There were nearly 2.2 million burglaries in the U.S. in 2011, according to the FBI’s latest crime report, with an average loss of $2,185. While break-ins typically are covered as part of a standard home insurance policy, they still carry a cost. Claims tied to break-ins are part of the reason home insurance premiums are on the rise. The annual cost increased 19% nationally in 2011 to $810, according to HomeInsurance.com.

on the beach

photo credit: kevin dooley

Furthermore, burglaries peak each year during July and August, the prime months for summer vacations. That’s because criminals are lazy – they want to enter your house when you’re not there, and they’ll look for signs you’re gone. Scott and I know that, so we take special care to make sure that our place doesn’t catch the attention of crooks. Here are some ways we do it:

Don’t be a Stooge: Use Mow, Blurry and Leery

• Make sure your lawn is well-manicured.
Even if you’re only going to be gone a week, mow it just before leaving. You’d be surprised how quickly the grass will grow during the summer, and nothing says the owner is away louder than an unkempt lawn.
• Don’t give criminals a clear look.
Make sure the blinds are closed so any view criminals have of the interior of your house will be blurry.
• Keep burglars wary.
I called criminals lazy already. They’re also cowards. If someone’s home or if you have a home security system, they’ll often bypass you for an easier mark. Even just having security system decals on your windows or signs in your yard can make them leery of choosing your place.

The lights are on, but no one’s home

There are other ways to make sure criminals don’t notice that your house is empty for a week or more. Set a timer to make lights come on at night, and leave a television or radio playing so there will be some noise in the house, too.

Have nosy neighbors? Now’s the time to use them. Tell them you’ll be gone and ask them to keep an eye on the house. They watch it anyway, but at least you can reap the benefits of their snooping. You also can get great service from a trusted neighbor. Give him or her a key, and ask whether the person will keep your mail from piling up in the box. If you still take the newspaper – I canceled mine to save a few bucks because I could access everything online – have the neighbor bring it in every day. Nothing screams “Owners aren’t home” louder than a stack of newspapers in the driveway.

What if it doesn’t work?

Despite every precaution, someone might take a chance and break in. Here’s where planning comes into play. Your home insurance company likely has recommended you maintain a home inventory – a glorified listing of everything you own, complete with photos, serial numbers and receipts when possible. It will help you get reimbursed quicker. Among the most common targets of burglars are electronics, jewelry, cash, guns and tools.

But there’s one other thing you should make sure you protect, and you might forget about it. Chris and I take great care to make sure our identities stay safe. How? Whenever we leave the house, but especially for vacation, we power down our computer. It’s password-protected, so personal info on it stays safe. We also never leave any credit card bills, bank statements or blank checks around. Again, nothing is perfect. If you suspect your identity has been pilfered, the Federal Trade Commission also has a list of steps you should take.

You can’t depend on good fortune

Don’t count on being lucky. We have a plan to stay protected, and you should have one, too. Don’t be too scared to leave home, but keep yourself from becoming a target when you do. It will save you time and money, and it will allow you to enjoy your hard-earned vacations without worrying about scumbags taking your stuff.

Kevin’s Take: Now that I have a house I’m 1000% more worried about someone breaking in my house. I have a security system but I feel like I need to do more. I love that this post gives me tips to make my house and my stuff safer without spending extra money! Thanks Aimee!

About Aimee McNitt

Aimee McNitt is a regular contributor to PersonalBudgeting.com. She and husband Scott have three wonderful children, two dogs, one income and zero margin for financial error. To make their personal finances work, Aimee has become an expert at finding deals, stretching a dollar and finding simple ways to earn extra income.

Jan 14 2013

When is the Right Time to Sell?

By |January 14th, 2013|General Personal Finance|Comments Off on When is the Right Time to Sell?|

The most difficult thing about investing is knowing when to sell your investments. Let’s face it, if you knew exactly when you should sell beforehand then you’d have all the money in the world.

The problem is that we can’t tell the future. We know when we buy shares of a stock or mutual fund and we know how much it is worth when we are buying. Then we wait and figure out the best time to sell.

While there are no absolute rules about selling your investments, there are a few things to think about.

Would You Buy it Today?

The most important thing to consider when reviewing your investments is whether or not you would buy your stock today. If you think it’s overpriced then it might be time to sell.

It doesn’t matter if you bought your stock at $100 a share and it’s currently at $70. If something about the company or industry has changed since your initial purchase that makes you think it’s only worth $50 then it’s time to sell while you’re still getting more than you think it’s worth.

On the other side of that coin you might think the stock is undervalued. In that case you want to hold what you have and you might consider buying more.

Brokerage Fee Savings

If you are investing tens of thousands of dollars at a time then a $10 or $20 trading fee should not even register as a blip on your radar.

However if you are only investing a few hundred dollars at a time then a $10 or $20 trade is a significant percentage. If your brokerage is offering a promotional discount on the trading fees when you are trading shares of stocks or mutual funds, it might be a good time to think, “Would I buy it today?” and then consider selling.

Tax Savings

Another thing that can have a substantial impact on your profits or losses is the tax implications of holding or selling.

In America there is a difference between a short term capital gain (an investment held for less than one year) or a long term capital gain (held longer than one year).

If you are looking to sell around the 1 year mark, it’s better to sell at a profit as a long term investment, and it’s better to sell at a loss as a short term investment.

Jan 10 2013

Don’t Let Honey Boo Boo’s Mom Show You Up

By |January 10th, 2013|Blog, Personal Finance Tips|12 Comments|

We are just over a week into 2013 and tomorrow might be your first paycheck of the new year.

If you didn’t get a raise then it might be smaller than you are used to because taxes have gone up. That’s what happens when you live in a country that believes the government should continue to grow and it should be funded through income taxes, inflation, and debt.

But if you did get a raise for 2013, your paycheck might be a little bigger in 2013 than it was in 2012. Or maybe you didn’t get a raise but you did get a nice Christmas or New Year’s bonus.

For anyone that earned a bonus or a raise, what are you going to do with your money? Are you going to be like Honey Boo Boo’s mom, or are you going to be irresponsible?

Wait… what?

Honey Boo Boo’s Mom is Financially Wise

If you aren’t familiar with Honey Boo Boo, she is a young girl who lives somewhere in the deep south with her mother, father, and three sisters. The family has a reality TV show on TLC and they are paid around $15,000 PER EPISODE.

mrs shannon

photo credit: twicsy

Here’s my completely politically incorrect description of the show for those who haven’t seen it: TLC found an uneducated, overweight family with a crass little girl so people can laugh at an overweight and uneducated family. It allows viewers to think “At least my family isn’t as stupid and trashy as those people.”

Well anyone who wants to judge this family for being “stupid” might want to take a closer look.

Many reality TV stars spend the money faster than it comes in because 1.) they aren’t very smart and 2.) they think they will be famous and make money forever.

June Shannon (Honey Boo Boo’s mom) is smart enough to know that her 15 minutes of fame won’t last forever and she is putting every penny she earns from the show into trust funds for her four daughters.

Every. Single. Penny.

She’s not buying a new house with some and saving a little on the side. According to an interview with TMZ, Mrs. Shannon says:

TLC puts the money into the girls’ trust accounts for me and then I get an email telling me how much everyone gets.

The article states that they are making at least $15,000 an episode. They had 10 episodes last year and have another whole season dialed up for 2013. They probably earned less money for the first episodes before the show was popular, but I think it’s fair to say that the family will earn at least a few hundred thousand dollars even if the money dries up after the 3rd season.

This “stupid” family is saving every penny of the hundreds of thousands of TV money and continuing to live off the modest salary the father earns as a contractor.

Who’s stupid now?

What Are You Doing With Your Raise?

Maybe you got a raise or bonus for the new year. Maybe you are working hard and will get a promotion (and a raise) sometime in the near future.

What are you going to do with that money?

Are you going to raise your standard of living so that you spend every penny, or are you going to maintain your standard of living and invest the money in something like my favorite 2013 investment silver.

Don’t let a reality TV star show you up on being responsible with money. There’s nothing wrong with spending money as long as it’s within your means, but your “means” don’t have to increase every time you come into some extra money.

I’ll admit that my standard of living has increased a bit as I have gone from a college student to a newly-hired college graduate and then earned two more promotions. However, my first priority has always been financial responsibility and I’ve saved enough over those 4.5 years to go from $30,000 in student loan debt to being debt free and having a net worth over $70,000.

As the financially-wise mother of Honey Boo Boo once said:

You’re never gonna see me drive a Range Rover or a Mercedes. I’ll drive one if someone else pays for it. Never gonna live above my means.

What about you?

Readers: The last time you got a raise, did you increase your standard of living, increase your savings/debt repayment, or both?

Jan 7 2013

2013 Stock Pick for Thousandaires

By |January 7th, 2013|Blog, Personal Finance Tips|7 Comments|

I have one stock picks for 2013 that I believe is both the safest bets you’ll find in the market and has the most upside for serious growth.

But before I get into those picks let’s look back at my 2012 picks. As an official member of the Money Pros financial blogger group, I participated in the Money Pros stock picking contest.

All of the “Money Pros”, which includes 7 personal finance bloggers and another 28 other bloggers and/or blog readers, entered the contest with three stock picks.

There were 35 people picking stocks. I got 2nd place. (if the link above shows me somewhere other than 2nd place, keep in mind that the stocks are still being updated in that sheet every day. I was definitely in second place on Jan 1)

My 3 Stock Picks for 2012

My three choices of Citigroup (C), Sprint (S), and Pizza Inn (PZZI) gave me a return of 51.68% last year. Pretty good huh?

I felt Citigroup was going to have a comeback year specifically because I knew the government wasn’t going to let a bank that big fail and that it’s price was severely beaten down compared to it’s book value and competitors. Today’s price is around $42.43 and I think that’s a pretty fair price. If I were a stock market expert I’d rate Citi as a hold, hoping they will be able to re-institute a solid dividend payment in the coming year.

I also really liked Sprint because AT&T has miserable customer service in some of my experiences and Verizon seems to be very overpriced. There is a big opportunity in the mobile service provider space and Sprint has stepped up to fill that void well in 2012, even if they are still running in 3rd place behind the two giants. I still think Sprint has some room to grow but it’s not one of my top picks for 2013. I’d call it a buy right now, but not a strong buy.

Pizza Inn actually lost me quite a bit of money even though I still really like the business model of their new Pie 5 restaurants. They make custom-made personal pan pizzas right in front of your face. Think Chipotle but for pizza; you pick your crust (thin or thick), sauce (4 or 5 options), and all the toppings you want, all for about 6 bucks. The Pie 5 store near my office is always packed during lunch and I think this is a great business model that will be successful in the future. I would strongly recommend Pizza Inn if they put more focus on expanding on and advertising for Pie 5, but as it stands today I’m lukewarm on their future prospects.

Now that you’ve seen my 2012 picks and I might have convinced you that I have some idea of what I’m doing, here are my two favorite stock picks for 2013.

Silver ETF – NYSE: SLV

It’s no secret that I am a huge fan of silver. Silver is valuable for three reasons: it is used in jewelry, it is a precious metal that has value for investors trying to avoid fiat currencies, and it has some incredible applications in industry.

Did you know that silver is “the best thermal and electrical conductor of all the metals”? There is a lot of great information about silver’s uses in this article at geology.com.

silver coins from canada

photo credit: sirqitous

Silver is being used in computers and cell phone electronics. It’s being used in many of the latest solar panel technologies. It can be used to make mirrors. Heck, it’s even used in socks to cure stinky feet because of its antibacterial properties.

There isn’t a single raw material that I think will be more valuable in the coming years for all these reasons, and I think silver is the most important stock and/or physical precious metal for anyone. I already own both physical silver and some SLV.

Peter Schiff is a highly successful investor who predicted the housing crash years before it happened, and his recommendation in 2013 is the following:

You want to avoid the dollar; you want to avoid bonds; you want to be in precious metals; you want to be in resources; you want to invest abroad.

By investing in silver, you’re hitting two of the three categories. You get precious metals and resources at the same time.

If you want to read the rest of the Peter Schiff interview it’s a great read and it can be found here. Thanks to my buddy Len Penzo for posting a link in his Black Coffee article over the weekend.

I have one investing recommendation in 2013, and it’s silver.

Readers: What are your investment strategies for 2013?

Dec 19 2012

Home Renovation Projects – Double Cost Estimates and Triple Time Estimates

By |December 19th, 2012|Blog, Personal Finance Tips|9 Comments|

As a brand new home owner, I had a few projects to get done before my fiancee and I moved in. It seemed simple: get rid of popcorn ceilings, paint the walls, and put down new floors.

Piece of cake!

I was told that the rule of thumb is that whatever I think it will cost: triple it. However long I think it will take: triple it.

Baloney! I’m not an overly optimistic person. I understand how to take realistic estimates of how long things will take and I am definitely shrewd enough financially not to underestimate.

At least that’s what I thought.

Double Your Cost Estimate to be Safe

If you have a rough idea in your mind about how much money you expect to spend on a project, I suggest you double that estimate to be safe.

Unless you are a very experienced handy man then you should expect to overlook some details.

For example, I pulled up the carpet and will be putting down bamboo floors. I knew I’d have to pay for the floors, the underlayment, some glue for the stairs, and a few tools.

bamboo flooring

photo credit: ninahale

It didn’t occur to me that I would either have to repaint the baseboards I pulled up or buy new ones altogether. Nor did I think about the fact that I might have to level some of the floors and spend time and money doing that.

Those are just my extra flooring costs I know of now, and I haven’t even started flooring yet!

Once you actually know everything you need to do and price everything out, I still suggest to give yourself a little buffer room for additional materials.

For example, we bought 4 rolls of painters tape at the beginning of the project. We’ve now gone through 7 and have plenty more taping to do.

If you double your original cost estimate then you will hopefully keep yourself on budget. There’s nothing worse than getting halfway through a project and running out of money. Unfinished projects drive me crazy!

Triple Your Time Estimate

It has been much easier for us to keep costs in line than it has been for us to get stuff done on time. Again, this is a product of us being first time home owners and not really understanding every piece of a job.

I’ll use floors as an example again. In my mind the steps were 1.) Pull up carpet; 2.) Put down underlayment; 3.) Put down floors.

Pulling up carpet sounds easy enough. Just grip it and rip it right? Well I did that and then…

I realized I had tackboards all over the house and it took a long time to pull them up as well…

Then I realized that I had to get rid of 1600 square feet of carpet and underlayment and my city trash service wouldn’t pick it up…

Then I realized that there are some places where the drywall is so close to the ground that the bamboo won’t fit underneath, so I’ll have to cut off half an inch of drywall in places…

Again, I haven’t even started flooring yet because I’m still not done painting and I’m still not done with all the prep work yet.

And don’t forget all the clean up as well. Every one of these steps makes and mess that needs to be cleaned up.

I can’t stress this enough: if you have an idea of how long something will take but you haven’t done it before, TRIPLE YOUR ESTIMATE!!!

Home Ownership is Work but it’s Worth It

If I could do it all over again, I probably would have stayed one extra month in my current apartment so I had plenty of time to get all the work done before moving in.

Instead I’ll be living and working in a construction zone for a while. (Right now my mattress is sitting on some plastic sheeting, which is sitting on bare concrete floors in a completely empty bedroom.)

Despite all the costs, time, and frustrations there are three really great things about this renovation work.

First, Tag and I are going to have a really awesome house with beautiful paint and great floors that we can admire.

Second, we should at least make our money back and hopefully even turn a profit when we do eventually resell the home.

And finally, if Tag doesn’t leave me before we are done (I have unfortunately been kind of a jerk at times because the frustrations have been weighing on me) then I know our relationship will be stronger than ever. If we can make it through this then I feel great about us being able to weather any storm that comes our way.

Readers: What’s the last home renovation project you did (even if it wasn’t in your own home)? Did you go over budget? Did it take longer than you expected?

Dec 18 2012

Savings Ideas for January

By |December 18th, 2012|General Personal Finance|Comments Off on Savings Ideas for January|

New Year’s Resolutions are just around the corner and we can all probably do something to make our lives better.

Some people want to lose weight. Others want to eat healthy or read a certain number of books. Those resolutions are good for some people, but not for everyone.

However, I think we can all agree that we’d like a little more money.

Wouldn’t starting a savings account make a great New Year’s Resolution? Whether you are saving for a house, a new car, retirement, or maybe even just having a few bucks for a rainy day, there’s never a bad time to start saving!

If you’re ready to save then the question becomes, “What is the best account for my savings?”

There are a few different options.

Easy Access Savings Accounts

There are some savings accounts that work a lot like a checking account without checks. Money can be deposited or withdrawn at any time whenever you need to access your funds.

These accounts are great for money that could need to be accessed in an emergency. If you have a hospital bill or home repair then you’ll want to access your money. Do some research to find the best easy access savings accounts for your personal situation and I think you’ll be happy with earning interest on your money while knowing it can be accessed at any time.

CDs or Fixed Term Savings

If you are pretty confident that you can keep the money in savings for a while then you’re better off considering a CD (Certificate of Deposit),or a fixed term savings as an option. This means that you promise to keep the money in the account for a certain period of time.

You’ll get a better interest rate with this type of account because you are promising not to withdraw the money, meaning the bank can be confident the money will be there and they can make it available to lend to other customers.

It’s important to check the rates before getting this type of account. If the interest is a lot more than you can get in a regular savings account then it could be worth it. If it’s not much more, the flexibility of accessing your money might be better.

The Act of Saving is What’s Important

It really doesn’t matter much which account you choose. A 3% return is better than a 2% return, but none of it matters if you aren’t saving at all.

If you open a BM savings account or any other savings account, the most important thing is to contribute to that account as consistently as possible. It will be worth it in the end when you have a bunch of money saved up and you meet your financial goals!

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