What Atlanta’s #Snowmageddon 2014 Taught Us From a Financial Standpoint

Review and shop out your car insurance coverage often. Typically, you can shop your rates out on a semiannual basis to see if you’re getting the best deal possible.  If you were someone who was sliding around in the snow and ice and had Comprehensive and Collision coverage then your insurance will pay to repair or replace your car if it is stolen or damaged in an accident, regardless of who is at fault. Depending on your car, amount of a balance you have left on your car note, distance you commute, and cash flow you can look at ways to increase your deductibles, reduce your coverage, or you can check out my other article about taking a defensive driving class(http://www.ajc.com/weblogs/atlanta-bargain-hunter/2013/dec/04/perks-driving-defensively/) to find ways to reduce your premium. Travel with a full tank of gas. Unfortunately, some friends needed to sleep in their cars overnight and had over 14-24 hour commutes home; some inevitably abandoned their cars because they ran ...

Read More →

Four Rules Of Thumb That Are Thumbs Down

For many years I have seen articles galore in the major magazines giving consumers “rules of thumb” about making financial decisions.   In a society today where we want to get all of our information in sixty seconds or less, many of these magazines can talk one week about five dollar meals to make and then the next week discuss major financial decisions to make in your household.   I’ve never really been a big fan of “rules of thumb”, so here are four major financial “rules of thumb” that I am simply thumbs down on when it comes to making smart money moves.  Rule Of Thumb #1- 2% Difference In Interest Rate To Refinance –   Many popular magazine and newspaper articles will suggest that you generally shouldn’t consider refinancing unless the difference between the new interest rate and your old interest rate is 2%.    This “rule” makes very little sense to me. What you want to be considering are a handful ...

Read More →

How much should I keep in a cash reserve?

Building a solid financial plan is relatable to building a strong house.    If you create a secure foundation and structure for the house, it is likely to stand up against all of the elements over the course of the years to come.   Many financial plans fail because the two key areas of the foundation which include having an appropriate cash reserve and having adequate risk management protection are not put into place before people begin investing.   There are often various numbers thrown around in the media about what is an adequate cash reserve to have in your financial plan, but here are some thoughts for consideration on how much money to have in checking, savings, and other short-term investment instruments. The first question you should be asking is whether you are employed (and where your job stability is at work) or whether you are self-employed.    My opinion is that people who own a business should have about double the normal ...

Read More →

Personal Finance 101 – College Education Planning – What Are Your Assumptions?

You get home from work one day and your child has the magical letter to open from that college or university that you both always dreamed they would attend.   It’s possible the school is your alma mater or perhaps it is the Ivy League university you always thought your child was possible of being a part of for the next four years.   As you open the letter, you read that your child has been ‘accepted’ into the new freshmen class.  You begin to realize that maybe you haven’t done your homework on how you are going to pay for the college education.  Over the next four weeks, I will examine some of key areas you need to be thinking about when you plan for this type of financial goal. Many financial plans that I see done on families often use blanket assumptions.   When you start thinking about college education planning, it is important to have lengthy discussion with your financial ...

Read More →

Personal Finance 101 – How To Value Your Business

One of the trickiest details of a good Buy-Sell Agreement is determining the purchase price to be paid for a departing owner’s interest in the business.  Most Buy-Sell Agreements create a formula to estimate the business’s actual “fair market value” and then derive a purchase price for an owner’s pro-rata share of the business.  Sometimes the Buy-Sell Agreement requires the business to be appraised by an independent qualified appraiser with special certifications.  Whether there is a formula in the agreement or an appraiser will be involved, the goal is identifying “fair market value” of the business and the interest to be transferred.  “Fair market value” is often defined as the price that would be paid between willing and independent buyers and sellers, assuming neither is being forced to buy or sell and both have good knowledge of the facts.  If a minority owner’s interest is being acquired or there are restrictions on subsequent transfers of an ownership interest (e.g. in ...

Read More →

Multiple Streams Of Income

People who own a business often understand the powerful concept of multiple streams of income. Given that any business can have economic, regulatory, or industry changes that can hurt the income stream of a business, most business owners develop multiple income sources within their business to protect the cash flows of the company. Sometimes these changes are in different lines of business, types of products, or services that complement each other. I think over the next decade, each household in America will need to consider having multiple streams of income with job and market uncertainty we will face in the years ahead of us. So, how can you create multiple streams of income? 1. Both partners in a household have a stream of income – In my opinion, letting your household rely on just one breadwinner that has a job as an employee with a company is an incredibly dangerous strategy. As large companies feel pressure to meet Wall Street ...

Read More →

5 Questions To Ask Before Refinancing?

With interest rates being incredibly low, I have been asked the question over and over the past several months about whether or not it is a good idea to refinance a home. Here are 5 questions I would consider before taking the plunge to refinance. 1)  How long do I plan to live in the home? Since most people don’t live a home for 30 years, you generally don’t see mortgages taken out on a home actually complete their full 30 year (or 15 year) cycles.  Since there are so many variations of mortgages today, (i.e.- ARM’s, 5/1, 15 year, 30 year), it is important to make a determination first on how long you think you will live in your current home. 2) What are the costs to refinance my home? There is no so thing as a free lunch. If you choose to refinance your home, there will be costs associated with making that transaction. You will have a ...

Read More →