May 82013

Home Renovation Projects – Is DIY Actually Cheaper

By |May 8th, 2013|General Personal Finance|1 Comment

The following is a post on behalf of Sean

Home renovation can cost a fortune and often home owners are unprepared for what they actually need to spend to achieve the anticipated result. Many first time owners budget for improvements that they will carry out themselves, but often this works out to be more expensive than getting a contractor in. The steep price of remodelling makes it very tempting for owners to choose DIY over the professionals, but in the long run this can be more costly. Before you embark on renovations read this advice, as it may save you thousands and give you a bigger ROI.

Contractors can cost less

Renovations requiring plumbing or electrical work are often best left to those who are skilled in that department. For safety and financial reasons it is always better to employ an electrician to complete rewiring or other electrical jobs, as if they are done incorrectly they can be hazardous. A good plumber is also a sound investment as water damage can cost thousands to fix. Save yourself money by employing people who can do the job quickly and efficiently rather than having to pay someone to rectify your DIY mistakes.

Save on tools

Spending money on tools for DIY can be an investment, but only if they going to be utilized regularly. Large tools or machines can be costly and if a contractor can supply them at a lesser cost or you can rent apparatus this may be the preferred option. Save some money and have some fun whilst renovating by playing mobile casino games at www.mobilecasinoaustralia.com.au rather than spending money on tools you won’t use again, or have little resale value.

Whole sale prices

Contractors may be able to source paint, decor items and fittings at a lower cost, but they then may mark them up to be even more expensive than had you purchased them yourself. Do some research and obtain quotes against various items you will require, to determine whether it will be cheaper to utilise contractor’s materials, or to buy your own.

Time is money

As always, time is money and if you know that someone else can get the job done at a lesser cost then it is a worthwhile investment. DIY for small projects may save thousands but always weigh up the scope and expertise needed for a larger project to ensure the best ROI.

May 22013

One Good Reason I’m Not Investing in the Stock Market

By |May 2nd, 2013|Blog, Personal Finance Tips|14 Comments

I used to love the stock market. I loved to research companies and pick new stocks to invest in. I created an entire ETF portfolio for my fiancee’s Roth IRA. I even did some very risky options trading.

I don’t do any of that now. My fiancee and I both cashed out our Roth IRAs for the purchase of our first house. I sold every single stock I owned outside of my 401k for the down payment. Now when you exclude my 401k, I have exactly $0 invested in the stock market.

Your typical financial planner would probably say I’m crazy to have so much of my wealth tied up in my home, Lending Club, precious metals, and a lot of other things that aren’t equities.

I don’t care.

I don’t trust the stock market.

I have a substantial amount of money in my 401k, and that’s all in the stock market. That’s more than enough exposure to equities for me.

But why? People have been making money in the stock market for years. The answer (among many other reasons) can easily be found in my stock market experiment from last year.

Market Experts Don’t Seem to Know Very Much

Have you ever heard a financial advisor or an investor suggest that they can pick stocks better than anyone else? They usually offer very convincing evidence that shows they know how to make money best.

But if they are really that smart, why don’t they stop trying to invest your money, and just invest their own. If they are so confident in the stock market and their stock picks, they could just take out a loan, buy these great stocks, make boatloads of money, pay off the loan and be rich.

But it turns out these people probably don’t know any better than you or me.

Part of my stock market experiment was using the recommendations from “10 money managers, market experts and financial journalists” in this Forbes article. Surely these experts should be able to outperform amateur personal finance bloggers. They should DEFINITELY be able to beat a random selection of stocks.

Too bad they haven’t.

After 18 months, the “experts” portfolio has only returned 20.56%. Compare that to my random picks that have returned 29.16%, the personal finance Money Pros who have 41.15%, and my friend The Hoff who is getting 34.91%.

That tells me that the stock market is nothing more than a gamble. If amateurs and random picks can beat people who spend their lives researching and studying companies to invest in, how much “skill” can there really be?

stock market

photo credit: bransorem

My Stock Investment Theory = Wealth Preservation

As I mentioned before, I have a large amount of money in the stock market through my 401k. Unfortunately stocks and bonds are my only options, so I have to put them somewhere.

My goal in my 401k is not to beat the market. My goal is invest in the safest things I can find.

That means investing in non-American companies (because I don’t trust the dollar). It means investing in raw materials as much as possible (because those companies hold real assets that are valuable no matter what the economy is doing).

I will never get rich from the stock market. Lots of people certainly will. Good for them.

I plan to get rich from working hard, getting promotions, and eventually having my own business somewhere down the line. The stock market won’t be a big part of the equation.

Readers: When you want to invest money, where do you put it?

May 12013

5 Common Metatrader 4 Blunders

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

Chances are good that if you are considering a venture into currency trading on the foreign exchange (FOREX) you will encounter Metatrader 4 trading software. This is the most dominant software, or trading platform, in the world. It is so prevalent; even though Metatrader 5 was released to rave reviews some time ago, many traders have zero interest in changing over. Most forex brokers continue to offer the previous version rather than risk alienating current or potential clients.

wall st

Image courtesy of Emmanuel Huybrechts/flickr.com

The platform has powers, features and capabilities that few, if any, traders can claim complete mastery of Metatrader 4. As you embark on your journey to becoming a competent currency trader, either as a means of a supplemental income or as a full-time career, be aware of and do your best to avoid some of the mistakes that can crop up during the heat of the battle that is encountered during a typical trading session. Take heart in the fact that even traders with considerable experience make these same mistakes on occasion.

Mistake 1: Placing a market order to sell when it was your intention to buy or a buy order when it was your intention to sell.

Any experienced trader, even a successful one, will admit to having done this on more than one occasion. The most common reason is some sort of a distraction. Phones ringing, people sticking their heads into your trading area whilst you are trying to focus and trying to track too many markets simultaneously are just a few of the other reasons for this mistake. On a positive note, those same experienced traders who will acknowledge having made this seemingly inconceivable blunder will sometimes admit that the outcome of the mistake was no better or worse than if they had carried out their original intention. If you find yourself in this situation, take a deep breath, sit back and change your perspective. Since the price of a currency pair can only rise, decline or remain constant, it basically requires time for what is generally perceived to be an unforgivable mistake to resolve itself in your favor. That is trading reality, pure and simple.

Mistake 2: Trading the wrong currency pair.

It is too easy to think you are placing an order to trade the EUR/USD when you have in fact placed an order to trade the USD/JPY. These two pairs are generally negatively correlated, meaning that if the price of one is rising, the price of the other will be falling. You will realize the mistake when you see the char of the EUR/USD moving in your predicted direction, but when you look at your profit and loss window, you will be losing money. Once the realization of what you have done dawns, it is tempting to panic, but just as with Mistake Number 1, you simply need to step back and reassess your position.

Mistake 3: Not keeping sufficient margin in reserve to enable protecting a trade.

Any trader knows that he will be wrong on an entry decision on many occasions. He also knows that one very effective tactic in this situation is to add additional positions until such time as the market does reverse and begin to move in his direction. This is frequently done through the use of limit orders that are not executed until the market reaches the intended price. When this is done deliberately, it is called scaling in. When this is done spontaneously, it is called adding to a loser. Essentially, this is splitting hairs. It doesn’t matter how you have arrived at this point of adding additional positions to your initial trade. All that is required to mitigate this mistake is the forethought to keep your positions small enough so that you have sufficient trading margin left to employ this tactic.

Mistake 4: Forgetting to cancel unneeded limit orders.

When using the above tactic of scaling in, on many occasions the market will reverse and make your original positions profitable before your limit orders are executed. The trading platform can make it possible for the charts on your screen to move to where you can no longer see your unfilled limit orders. The too frequent outcome of this mistake is that you shut down your trading machine thinking you are done, only to have one or more of your limit orders filled while you are otherwise occupied. You come back to find the orders filled and losing money. You could come back to find those orders making money for you, but something about forex trading dictates that this will seldom be the case.

Mistake 5: Over reliance on the various built-in trading tools of the platform.

Technical traders can often place far too much faith in their trading platform. Indicators and oscillators are good tools, but they are not infallible. If they were, you would never have a losing trade, but neither would anyone else. If this were ever to become the case, the forex market would cease to exist because it is the losses of some traders that finance the wins of other traders. Here is a healthy way to view the trading tools that come in the trading platform: They will be infallible until you base a trade on them. Highly experienced traders know that these tools are most effective when prices are undergoing significant upward or downward movement and that they are better for determining a trade exit than they are at predicting future price movement and providing a good trade entry.

These five common mistakes represent only a few of many. You can learn to minimize these and any other you might discover through the use of forex demo accounts. Even though you will be learning with simulated funds, you will still hate making mistakes. Use simulated trading accounts to experience this feeling; learn the steps that are most effective at minimizing these blunders for you. Forex trading is one of the few endeavors that permit this type of practice. Plan on using this to your advantage both when you are starting out and even when you have many currency transactions under your belt.

Apr 192013

Prepare for the Worst

By |April 19th, 2013|Blog, Life|17 Comments

My father won’t survive the weekend.

My dad has been sick for over a year, but in the last few months he has gotten really bad. He has a tumor in his throat that is so big he can’t even swallow a sip of water.

I flew to see him on Tuesday and my sister is coming in town in just a few hours. After he sees my sister, we are taking him off everything but the pain medication.

He’s in so much pain it’s just better for him to go.

I’m almost 28 years old and this is the first time someone close to me has died. I don’t really know how to handle it (I don’t think anyone does), but I’m doing my best to be strong, particularly for my step-mom and my sister.

My step-mom and my father were married for something like 20 or 25 years. She is an angel and has treated him as well as anyone could possibly treat him. She is an incredible woman and I need to be strong for her.

My sister has a very strong attachment to my father and it is going to hit her really hard when he does pass. It’s going to be terribly difficult for her to even see him this afternoon. More than anything, I’m here for her.

As far as my dad, the man in the hospital is not my dad. I do love him and I’m here for him, but I have to remind myself every day that I need to remember my dad as he was when he is healthy. The dad I want to remember is the one that was fully of energy. The guy who played golf every day and loved to bet on sports. The guy who always told me that if I ever needed anything I could just call him.

If there is a silver lining in this whole situation, it is that I have been able to see my dad and spend time with my family before he dies.

This isn’t a “financial” post, but I do want to point out a few things that made this possible. I don’t actually have an emergency fund that I could draw on to buy a plane ticket to go be with my dad.

What I did have was a lot of airline miles. Instead of spending $400-500 on a plane ticket, I was able to get one for basically free because I have frequent flyer miles. Miles aren’t just for vacations and fun. My credit card miles helped me see my dad before he dies.

My sister didn’t have the money for a ticket so my step-mom bought her one. Then my dad got worse and she had to change her ticket. They were trying to charge her $400 to change it, but she told the airlines that my father is a veteran from the Vietnam war. American Airlines did a great thing and changed her ticket for free because of my dad’s service. It’s great to see companies honoring our veterans like that.

Finally, I’m able to take time off work because my company has a bereavement leave policy. When an immediate family member dies, my company gives me 5 days off to attend the funeral and grieve.

Money shouldn’t be an issue at a time like this. This is what emergency funds are for. If you don’t have one then I suggest you get one ASAP.

If you don’t have an emergency fund (like me), miles and credit card rewards points can be a life saver. I knew my dad wasn’t healthy so I was kind of saving my points for this trip. If you have a good rewards program and can avoid blackout dates, you can travel in an emergency without spending anything out of pocket.

This was really just me dumping ideas out onto my blog because it’s making me feel better, but my takeaway is this: Prepare for a family emergency before it happens.

I was saving up those miles knowing I would need them. My sister didn’t have the luxury to save miles and/or money, and she needed help. Imagine the stress she went through thinking she might not be able to afford to see her dad before he dies.

Thank you for your thoughts and prayers, and please send them to my sister, my step-mom, and of course my dad.

Apr 92013

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 42013

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?