Archive for the 'Financial Peace' Category

Joe Sangl starts a new series: Restructuring Debt

August 13, 2008

Joe Sangl just started a new series Restructuring Debt. This is absolutely the first thing you should do if you’re trying to become debt-free. Figure out what your high-interest loans are and see what you can do to reduce them, consolidate them, or transfer them to other organizations offering a lower rate.

Check out his new tool (linked to in the post). I’ve taken the liberty to do it myself: check it out.

Poverty in Williamsport

July 29, 2008

I think a lot about poverty. It seems to me that there should be a way for everyone to a least have a decent standard of living. There will always be rich, and there will always be “poor”, but everyone could conceivably have a job and earn enough to put food on the table and shelter over their families’ heads.

Check out the demographics of Williamsport. 13.7% of families are living below the poverty line, which is probably about $22,000.

What is the most effective way to help these people?

If you had a million dollars to invest in improving Williamsport, where would you put it?

Why I’m passionate about saving for retirement

June 28, 2007

My friend celebrated her new employment with a company for whom she’d been temping the last few months. She now receives benefits, and my first question to my close friends with good jobs is, “Do they match?” If you feel this is too personal or are offended talking about finances, please let me know, and I’ll drop the subject. But, the more I ask this question the more I realize how few people take advantage of the situation they’re in. My friend didn’t understand what a 401K was, and after I explained it in a general-sense, she continued to distrust it, asking if it was really her money or if it was like Social Security. It just shocked me, and more-so it saddened me.

I care about my friends. Information about investing and saving is not hard to come by or hard to understand, but it’s never been introduced to us as a need. I want my friends to know what their options are, so they’re not in the dark and working until they’re 75. My dad’s in a precarious position with his retirement fund, and I see the worry in his face when we talk about it. He’ll definitely be working past 65, and he pulls in a six-figure income. Doesn’t add up, right? I don’t want this for the people I know.

I want my friends to retire at a normal age and not worry that they’ll run out of savings. I want them to feel confident that they can become financially stable even if they don’t really make a whole lot. If your company has matching, take advantage of it now, because it’s basically like earning double interest on your money. 10% is great, but after matching, 20% will rock your retirement savings and your peace-of-mind. To put it another way, it saves you the first 10 years of compounding, because you’ve already doubled your money that first time.

If that last paragraph confused you, don’t worry – here are the facts. Hypothetically, you put away $2000 this year. Assuming you’re 25, your money will compound more than 4 times in the stock market at 10%. I calculate that after 40 years at 10% that original $2000 you sacrificed this year plus the $2000 you’re matched will be worth $90,518.11. Not too shabby. This means that if you saved like this for the first eleven years out of college, you’d be a millionaire when you retire.

For those of us that don’t have matching, don’t despair – that money will still be worth $45,259.26! Ask me if you want more resources or have questions :-).

Added: As I finished this post, my Dad walked in, and we started talking about the rates of return on his mutual funds. I’ll have to write another post confirming or dis-confirming the assumption that you will earn 10% on your money. Regardless, start saving now!

Help me launch a blog

June 14, 2007

The cat’s out of the bag: I like to discuss finance from a Christian perspective.

I’ve been toying with the idea of either launching a new blog to discuss this topic or merely taking this blog in that direction (I mean, more so), especially since I like “Kings Pray” so much. Admit it – that kid praying is cute. I have, finally, decided to launch a new blog, and I need some help casting the vision for it.

Often times I go from talking about God and money to talking about money. I don’t want to do this. Rather, I want practical and biblical advice relating to money to point readers towards Jesus. There can still be a few posts here and there with practical advice relating to money, but I’d like to see the vast majority of post pulling scripture and pointing people to Christ. Also, I envision weekly rather than daily posts to keep workload lighter on me and to create development time for stronger posts.

So, here’s my questions to the blogging public:

  • How has your experience (or AN experience) with money drawn you closer to Jesus?
  • What are your favorite parables or stories pertaining to money, and why?
  • Do you have any ideas for an overarching theme verse/parable/quote/catch phrase/… for such a blog?
  • Thanks for your help, and I’m excited to read your comments! (Acts 2:42-45)

    Security in financial decisions

    May 31, 2007

    I’m a risk-taker. I’m also a numbers nut, so often times I am drawn to the financial solution which generates or saves the most money (the optimal solution).

    Recently, however, I’ve been considering the value of safety and security when making financial decisions. Here’s an example of my old reasoning: would I rather pay a loan down quickly in chunks or save for future expenses and slowly work down the loan? Well, the ambitious side of me wants to work hard, eat rice, and put every ounce of money towards paying off the loan within a year or a few months, savings nothing or little for a rainy day. Now I’m seeing the lack of balance in that argument.

    Whenever considering budgets, it’s important to think slowly. A steady diet of paying off bills and saving for the future is a far superior mentality to the one into which I often fall. Build a strategy that prevents that worst case scenario (losing your house, losing your car, not paying bills on time). If you haven’t thought about it yet, let me tell you that insurance is a losing bet. You’re wagering that you won’t have an accident, but if you do, they’ll cover it (or most of it). But, it’s not a break-even gamble – they add a little extra to run their business and make a profit. So, should we stop buying insurance? No, of course not. Sure, we lose a little in the long-run, but we prevent that rare total loss event from ever occurring.

    Here’s another, more simplistic example. You’re on Deal or No Deal. There are two briefcases left: one contains the million dollars, and the other contains one penny. The creepy guy in the booth offers you $300,000. Should you take it? Mathematically, you shouldn’t, because the pay-off from moving forward is $500,000 on average. You win half the time; you lose half the time. But, consider it from a security stand-point. If you take the bribe, you get $300,000 and change your life. If you don’t take it, you win half the time and change your life, and you lose half the time and don’t change your life. By taking the bribe, you change your life 100% of the time. I hope this illustration is transferable enough to your monthly budget. The point is to make decisions that guarantee financial success and prevent that total loss situation.

    Make sure you have found a prayed-over peace for where your money is going. If the unexpected happened, do you feel confident in your ability to recover and keep pressing forward? Are you setting yourself up for success even if it means sacrificing a little of that optimal/ideal wealth? Be encouraged by what God has entrusted to you, and rejoice in both paying bills and growing savings.

    Crazy idea

    May 12, 2007

    This Summer I’ll be living with my Dad back home. I’ll basically be working with him in his office (doing my web-design stuff there) and hanging out with friends and family. I’ll be making trips, of course, to see Emily, and I’d like to visit the VA/MD/NJ folks at least once over the three months.

    I got a crazy idea the other day: somehow earn an extra $1,000 over the Summer.

    This is completely arbitrary, and I have no idea how I’m going to do it, but I later realized that $1,000 is often recommended as an initial emergency fund savings for people getting out of debt. So, I wonder how hard it is to raise the extra money (ok, it’s not completely the same, because it’s not coming out of my paycheck at all).

    The creative juices are flowing, and I think I’m going to make a $1,000 Super Savings Spectacular to put on this blog.

    Compound Interest

    May 9, 2007

    Compound interest definitely should excite the finance neophyte (good word, huh?). I would highly recommend checking out the Lazy Man and Money blog as he’s an excellent teacher. Right now he’s in the middle of his Compound Interest Week, so each day he’ll post a new section on a different aspect of compound interest.

    Today he posted on online high-yield savings accounts. As he notes today, when considering the decaying affect of inflation, these accounts don’t do much to grow your wealth (the ING orange savings account only grows your deposits approximately 1.4% per year in purchasing power). But, I would say it’s almost essential to put your short-term savings in one of these accounts, because they are secure, return a guaranteed percentage back to you, and are liquid enough to pull for emergencies.

    So, keep about $1000 in your checking for dire emergencies, but after that keep all other short-term savings in a high-yield savings account to preserve that wealth whether it be your three-month emergency savings, savings for upcoming holiday gifts, or savings for slightly bigger ticket items such as TVs (even bigger ticket items would probably fall into long-term savings and should be put into mutual funds or similar types of investments).

    E-Trade redeemed

    May 5, 2007

    I sent E-Trade an email yesterday about where my money went, and they actually called me today to help me out. It was perfect. I got all situated, and it’s working perfectly. Unfortunately, I already had put my savings for this paycheck in my ING account.

    Savings accounts = fun for everyone!

    April 29, 2007

    So I opened two online savings accounts today. That’s right – two. I opened one with ING, because Bethany has said how good they were, and I found a link that gave me a $25 sign-up bonus (sorry, Bethany, I wish I found this when you signed up!). Then I found another link for E-Trade for another $25 sign-up bonus. E-trade also has a much higher rate (5.05% over ING’s 4.50%), but if their customer service doesn’t impress me, I might close it and stick with ING.

    I also found out that E-Loan has a savings account yielding 5.25%, but you need a $5,000 minimum deposit. Alas, I will have to wait quite some time before I have that in savings. Oh well, they didn’t have a sign-up bonus anyway. 😉

    Movie I found through another blog

    April 25, 2007

    Thanks Chris Thomas for commenting on my blog post (if you ever read this again).

    I found this through his blog: Maxed Out.

    I linked you right to the trailer page, because the flash intro on the main page is ridiculously long. Amazon said it comes out in June. Some parts of the trailer seem a little hyped, but for the most part it’s real. This movie isn’t for the weak hearted. It is just sad, like watching something die.