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The Drug Of Buying ‘Stuff’

The weather is warm and in the United States we are about to start enjoying some of the national pastimes of our country.   We love things like baseball, apple pie, the 4th of July, and grilling out in our backyards.    Oh yeah, and we also LOVE spending money.    In recent years, I’ve noticed that spending is more than just making a purchase here and there.  It’s almost a ‘crack’ like addiction, whether you wait for that Amazon package at the door or to take a photo of your tricked out new ride to post up on Facebook.   Like it or not, many Americans are addicted to the drug of buying ‘stuff’.    Why is this and how can you get your patterns changed on the home front? It seems pretty apparent that ease of access to drugs can make a user want more of them.  In our spending patterns, the ease of credit, access to our cash, and online transactions with ...

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How Much Does That Tooth Cost?

My son is now at the age when the baby teeth start falling out.  I forgot how exciting this event is for kids.  Every day he tells me that it is going to fall out today.  In anticipation, his grandmother has given him a small little box to be able to put the tooth under his pillow for the Tooth Fairy. This naturally causes us parents to wonder how much money we need to leave as the Tooth Fairy’s representative.   I received a quarter when I was a child, so I thought that a quarter would work.  My non-finance major wife informed me that due to inflation, it needed to be more like a dollar or two.  Some recent studies show that the national average is up to $3.  So that brings us back to what is an acceptable amount. The Tooth Fairy dates back to the early 1900s to symbolize a rite of passage for the child.  Money was not ...

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How Can My Portfolio Completely Avoid Risk?

With Moody’s Investment Service downgrading more than a dozen global banks to reflect declining profitability, the Euro Zone looking to be in grave financial crisis, and the U.S. Economy having a gloomy shadow in the distance, many investors are asking how to find investments that carry no risk.    Some of these investors are folks that are retired and looking for current income while others are at the 20 yard line approaching the end zone of their retirement day.    So where do you find an investment that carries no risk? Unfortunately, every single type of investment carries some inherent risk.    Learning how to balance out that risk or being timely with your investments on knowing what risks to take at what time can ultimately determine success or failure in your overall investment plan.   When it comes to today’s main risks facing investors, here are the three big I’s with respect to investing and risk. Inflation Risk– Inflation risk, sometimes known as ...

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Did You Learn Anything From DotCom 1.0?

There is an old saying that history has a way of repeating itself.   For those of you who can remember the glorious run of the stock market in the late 1990’s filled with internet companies who went public faster than you can say ding ding of the opening bell on Wall Street, are we now watching the launch of DotCom 2.0 in the stock market.    With Facebook going public last week with over a 100 billion dollar valuation, have we as investors and consumers learned anything about risk and investing our money?    Here are three things to be thinking about when it comes to managing your money and trying to make sensible decisions for your overall portfolio. Understand Appropriate Risk Relative To The Time Frame You Need The Money– Even with information available to us with a click of button on the internet, I still believe investors truly don’t understand risk.    One of the simple ways I’ve described this to ...

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What will you do with 2% more in your paycheck?

If Santa Clause didn’t come down your chimney with anything good this year, Congress has decided to give you a stocking stuffer for the New Year.   With nearly 160 million workers that will benefit from the extension of the reduced payroll tax that passed just before Christmas, it’s time to figure out whether you’ll be naughty or nice with your gift.   The Temporary Payroll Tax Cut Continuation Act temporarily extends the two percentage point payroll tax cut for employees, continuing the reduction of your Social Security withholding rate from 6.2% to 4.2% of wages paid through February 29th, 2012.  (source: www.irs.gov) Of course, this is supposed to have no effect on your future Social Security benefits.  Yeah, right! If you weren’t aware, this payroll tax cut was in effect for all of 2011.   This means that for those who earned W-2 income last year up to your first $106,800 of waged income, you actually got a 2% pay raise in ...

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When Your 401(k) Makes A Change On You

In the past year, many of our clients have seen changes made to their 401(k) plan.   These changes may happen from two separate businesses merging, your employer trying to save costs, or simply a change of funds within the existing 401(k).    Usually, you will get either an electronic or written notification of these changes.   The problem is that most 401(k) participants usually don’t take the time to read the changes which can affect the overall performance of your largest retirement asset.   Here are three things to watch out for when a major change gets made to your 401(k) plan. Be aware of the mapping process –  The idea of having a map or a Garmin is to get specific directions on the most efficient way to get from point A to point B.   When your existing 401(k) plan merges into a new 401(k) plan it will go through a process called mapping.  What generally happens is that the new 401(k) ...

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