The Power of Doing it BIG!

Attention, frustrated employees: Start making money on your own. I'll show you how. The following is a guest post from Martin of Start Freelancing Now.

You need to learn to think big and to be confident in your work. I've been guilty of focusing on small tasks for far too long. I too often find myself working on things that either don't matter or produce minor results. This is why I now focus my energy on bold and audacious goals. I believe in doing it big.

How can you go about performing audacious moves if you don't know where to start? What if you happen to lack a certain level of confidence?

I found my own answer to this in a podcast.

I heard a podcast with Tim Ferriss and Ramit Sethi on a similar topic. In the audio file Ferriss recommends that you engage in physical competition and practice the art of uncomfortable speaking. According to Ferriss, these two activities alone will increase your confidence drastically and help you go big.

Physical competition can be a kickboxing or weightlifting competition at your local gym. Uncomfortable speaking ranges between negotiation courses, public speaking, and the art of trying to pick up the opposite the sex. You know, going to the mall and trying to might a pretty girl while not totally hammered.

When it comes to bold moves the answer is simple. When it comes to minor tasks you just won't see any real results. You can spend all week planning a cool business name and working on some cool accounting system and nobody will care. What do these tasks mean? Not much.

Big and audacious tasks (selling t-shirts with an amazing graphic design, offering the most interactive tutoring session, or reading the most important chapter for that final exam) will do more for us than some minor time-consuming task ever could.

You don't believe me?

Then try it. Instead of worrying about coming up with a cool name for your new tutoring service, focus on reaching out to potential clients and offering the best one-on-one sessions out there.

You may have a LLC set up along with a flashy website but this doesn't mean anything for the student that wants to pass their Organic Chemistry final. We all want to have our problems solved. We want our lives changed. We want big results. Nobody buys the eBook that helps them become conscious about nutrition. We all want six pack abs and that's why that book makes millions!

Where's this all going?

I want you guys to go big or go home. Yea I know that the saying is a bit too cliché. It holds true in every area of life. There's no point to hit the gym if you're feeling tired and you know that your workout is going to suck. Just stay home. You're only going to feel worse about yourself for having such a lame workout.

Challenge.: Start your new life with a huge project. Do something different. Do something worth talking abut. Don't just simply tread water.

Best Travel Credit Cards: Great Travel Rewards and Sign Up Bonuses

Looking for a travel rewards credit card with either a great travel rewards program, great signup bonuses, or maybe both?

These are the best travel credit cards currently available.

Best Sign Up Bonus with Most Flexibility:

You'll find a great selection of travel credit cards below, but if you don't want to be stuck to one specific airline or hotel rewards program then the following card is for you.

Chase Sapphire Preferred Credit Card

The Chase Sapphire Preferred Credit Card has one of the largest point bonuses available of all travel credit cards. You'll get 40,000 bonus points when you spend just $3,000 in the first 3 months. Those points are worth $400 in cash that you can use to fund a trip. If you decide to take a trip and pay with your points you'll save 20% on the cost, so those 40,000 points become worth $500 in travel when you redeem through Chase's Ultimate Rewards program. You will earn 2 points for every dollar spent on your typical travel and dining categories. All other spending earns 1 point per dollar. There is a $95 annual fee that is waived for the first year.

(Don't want to pay the annual fee? Consider the regular Chase Sapphire Credit Card. You'll still get 10,000 bonus points.)

Best Flight Sign Up Bonuses:

Airline flight miles or point bonuses are a little bit more tricky because the airline has to fly out of a nearby airport for the points to be valuable to you. (Alternatively, you could transfer the points to an eligible program you can use.)

Taking that into account, there are 3 phenomenal cards we wanted to highlight:

United MileagePlus Explorer Credit Card

For starters, you can earn up to 40,000 bonus miles with the United MileagePlus Explorer Credit Card. You get 25,000 points after you first use the card, 5,000 for first use and when you add an authorized user within the first 2 months, and 10,000 points each year when you spend $25,000 or more during the calendar year.

Additionally, you'll get perks like:

• Checking your first bag for free
• Priority boarding privileges
• Double miles on United purchases (1 mile per dollar spent otherwise)
• Two passes to United Club every year

(If you fly a ton and need more perks, consider the United MileagePlus Club Card.)

Southwest Rapid Rewards Credit Card

We've reviewed Chase's Southwest Rapid Rewards credit card in the past. (Read our review.) Even if you take my Southwest Airlines bias away (I love Southwest!), this is a great travel credit card. Why?

You get 25,000 points after your first use of the card. Those points can be converted into two roundtrip 'Wanna Get Away?' tickets anywhere Southwest flies. (There's no catch; 'Wanna Get Away?' is Southwest's nonrefundable tickets. If you need to cancel you can use the value of the ticket on a future flight.)

You'll also earn 2 points for every dollar spent through Southwest and 1 point everywhere else. You get access to Southwest's Rapid Rewards program which just compounds how quickly you can earn your next free flight. There is an annual fee of $69, but on the anniversary date Southwest gives you enough points to buy a $50 'Wanna Get Away?' fare so your overall cost for the annual fee is just $19.

British Airways Visa Signature

How many points can an airline possibly give away? If you open a Chase British Airways Visa Signature Credit Card, you can get as many as 100,000 Avios points for use with British Airways.

Read that again: 100,000 points.

That's enough points for two people to fly from JFK in New York City to London's Heathrow Airport and back again. Two free roundtrip tickets to London? Sign me up.

We reviewed this card recently (read our review here) and found it to be a pretty good card. That 100,000 point bonus includes 50,000 given to you just for being approved for the card, then there are two 25,000 point bonuses for hitting spending limits of $10,000 twice in the first year. Even if you don't end up spending $20,000 on the card in the first year, you still walk away with 50,000 points.

Best Hotel Sign Up Bonuses:

If you're looking for elite status and free nights at your favorite hotel chains, look no further:

Hilton HHonors

With the Citi Hilton HHonors Credit Card you get 40,000 bonus points after spending just $1,000 on the card in the first four months of membership. That's enough points to stay 3 nights in a Category 2 hotel (or 1 night in a Category 6). As you might expect you get rewarded more for spending money at the hotel chain. With Hilton HHonors you'll receive 6 points for every dollar spent at Hilton HHonors locations.

But the rewards don't stop there, which is what makes this such a great card. You also get:

• 3 points for your spending at grocery stores, gas stations, and pharmacies
• 2 points for all other spending

The rewards program for non-hotel spending is very similar to American Express' Blue Cash credit card ' and AMEX won't give you 40,000 bonus points!

Marriott Rewards Premiere

Maybe you prefer to stay at Marriott locations. If so, the Marriott Preferred Credit Card is your best option by far. You'll get 50,000 bonus points that can be redeemed for free nights with Marriott, automatic elite status, plus a free night's stay at any Category 1 through 4 hotel.

You earn 5 points for every dollar spent at Marriott locations, 2 points for eligible dining, airline, and rental car charges, plus 1 point for all other spending. There is an $85 annual fee that is waived for the first year.

(You can get 30,000 bonus points plus 2 free nights with the Marriott Rewards Credit Card. It has a $45 fee instead.)

Other Great Travel Rewards Credit Cards:

All of the above credit cards offer amazing benefits that almost every person can use. The following cards are good cards for the average person; for your specific situation, they might be great as well.

Disney Premiere Visa

Planning a trip to Disney? You'll be glad you got this card. The Disney Premiere Visa is a rewards credit card that stands well on its own: you get 2% rewards for spending at gas stations, grocery stores, restaurants, and most Disney locations. (Other spending earns 1% rewards.)

But the Disney perks are, well, magical. Your kids will be ecstatic when they get to have a Character Meet 'N' Greet at the private Cardmember location. You'll be ecstatic because you get 0% APR for 6 months anytime you book select Disney vacations and put it on the credit card.

Hyatt

If you enjoy staying at Hyatt hotels, the Chase Hyatt Credit Card is a good card to have. You'll get a minimum of 2 nights free after your first purchase. (You can get higher levels of rewards like 2 nights free + 2 suite upgrades or 2 nights in a suite dependent upon your Hyatt status when you open the card). You'll also get one free night credited to you on the anniversary of your card membership. This helps offset the $75 annual fee.

Blue Sky

AMEX's Blue Sky credit card offers 7,500 bonus points (which you can redeem for a  $100 statement credit) when you sign up for the card. There is no annual fee for this card; a rarity among travel cards. You also get 0% APR for 12 months. The rewards are basic: 1 point for every dollar spent. However, you're also getting access to AMEX's great customer service as well.

Starwood Preferred

If Starwood properties are more your style, the Starwood Preferred Guest Credit Card is your choice. You'll get 10,000 star points with your first purchase ' enough for a free night at a Category 4 hotel. You also get an additional 15,000 points if you spend $5,000 in the first 6 months. The annual fee of $65 is waived for the first year, too. You get additional credit toward SPG Elite status while also earning 5 points for every dollar spent at Starwood hotels and resorts (2 points on all other spending).

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author's alone, not those of AmericanExpress, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through AmericanExpress Affiliate Program.

Tagged as: AMEX Blue Sky, AMEX SPG Credit Card, AMEX Starwood Preferred Guest Credit Card, Best Travel Credit Card Signup Bonuses, Best Travel Credit Cards, Chase British Airways Visa Signature Credit Card, Chase Hyatt Credit Card, Chase Marriott Rewards Credit Card, Chase Marriott Rewards Premiere Credit Card, Chase MileagePlus Club Card, Chase Sapphire Credit Card, Chase Sapphire Preferred Credit Card, Chase Southwest Airlines Rapid Rewards Credit Card, Chase United MileagePlus Explorer Credit Card, Citi Hilton HHonors Credit Card, Disney Premiere Visa

Opening a No Fee Roth IRA with Scottrade

One of my goals in mobilizing the Roth IRA movement was that I was hopeful that many young adults would get inspired and, in turn, open up their first Roth IRA.

I knew, however, that while some would take the initiative and actually do it, there would be many others who would be overwhelmed with all the different options that exist.

I then became determined, a.k.a. obsessed, in trying to find the viable option for someone who was a novice investor, on how they could get started in opening a Roth IRA.

Knowing that most GenX and GenY members are online and tech savvy, I figured it would make sense to try to find an online brokerage that would be easy to maneuver.

Now there are several different options out there, Schwab, E*TRADE, TradeKing, Betterment. FYI ' if you want to see a comprehensive review on Betterment, go here. I'm sure all of these have plus and minuses in going with them.

The one that I have decided to focus most of my efforts on was Scottrade. Why Scottrade you ask? Really for the mere purpose that Scottrade is located in St. Louis, which is about 90 minutes from where I live. Plus, I have been in the Scottrade Center on several occasions to witness several sporting events. Is that a good enough reason? Let's just say it was for me.

I first have to confess; I have been a financial advisor for over ten years now and I know first hand how easy it is to open an account at my firm or any of my competitors. I was not versed, however; on how to open up an account online. I assumed it would be easy, but didn't really know what it all entailed.

So how do you find out how something works if you have never done it before? You take it for a test drive of course!

The first thing I did was I called the Scottrade toll free number and talked to one of their customer service representatives. I explained to them that I was a financial advisor and was interested to learn the process of how a new customer would open a new account with them.

They were very helpful and I learned a lot about their platform. I was excited to learn that although on some of their advertising they suggest that you have at least $500 to get started, it's just that ' a suggestion.

In all actuality, you don't need $500 to open the account; you don't need anything for that matter.

Obviously you have to have money in the account to purchase some investments. I also learned that there are no annual fees for owning the account. You can call their toll free number at your convenience and get help that has several locations that you can go visit, and they also had over 3,000 mutual funds and several ETFs that you can purchase at no transaction charge whatsoever. The more I learned about them the more I became impressed with their operation.

In all Scottrade has access to over 14,500 different mutual funds with 3,100 of them having no transaction charge.

Now making a phone call and learning about something is one thing, but until you actually test drive it itself, it is hard to teach somebody how to use this. So I figured the only way I could really understand the Scottrade system was to open an account myself, which I did.

Because of the title of the post and talking about ordering a Roth IRA, that was my hope, but alas, I have exceeded income limits, so therefore, I can no longer participate in a Roth IRA. So for this purpose, I have opened up an individual account just so we could see the behind the scenes platform of how Scottrade works.

Opening your account with Scottrade is super easy.

Starting with their site, they'll walk you through a several step process of just collecting personal information; name, date of birth, address, social, etc.  If you're opening an IRA you want to have your beneficiary information available as well.  Once you get all the pertinent data entered in, you'll then be asked to print off a form or two that you'll need to sign and physically mail in to their home office.

All in all, I am pretty sure I had the account open in less than ten minutes.

Funding Your Scottrade Account

The next step will be funding your account.  If you have a brick and mortar location close to you, it's as simple as dropping, leaving them a check and voila your new account is funded.  If you don't have the luxury of a brick and mortar location available to you, you can either mail in checks or you could setup your bank account to be connected with your nee Scottrade account.

If you have online checking it's pretty easy to get it setup.  We're currently in the middle of having a few issues with our online checking for various reasons, so it wasn't as easy for me to get it setup.  That was more my bank issue and not as much Scottrade.

In my case I had to setup a money deposit where there would be two random and small deposited to our checking account.  I would then to verify those amounts to Scottrade to show that I in fact was setting up my own checking account with them.  After a few days the amount showed up and I was able to log back into my Scottrade account and verify that I was in fact me.

Scottrade Customer Service

One of the things that really impressed me the most when opening my account with Scottrade was the next morning I received a phone call from the closest branch to me.    I must admit that I was thoroughly impressed by this.  Typically when you think of an online company, you don't expect as much getting a phone call from a real live person following up with you.  It ended up being their branch manager nonetheless.  She was able to walk me through some of the basic items and how to make my first purchase with them.

I never felt like I asked too many questions and never felt like I was being rushed off the phone.  I think those aspects are huge, especially if you're a new investor and the whole process if overwhelming.  How helpful to have someone on the phone to help you every step of the way, and the best part is, is that it's free.  It's all part of the Scottrade package.

Interested in opening an account with Scottrade? Find out how easy it is here and get started today.

Five Ways to Prepare for Retirement Health Care Costs

It's certainly nice to finally put your feet up and relax once you've retired.

Unfortunately, the bills just keep on coming, even though you're no longer working.

This means you should think about your retirement funds well in advance to make sure you can still enjoy the same standard of living.

And remember, one of the most important things you'll need as you grow older is health insurance.

How much you'll have to put away for retirement  to cover healthcare costs will really depend on your specific lifestyle and situation. According to Fidelity Investments, a married couple may need as much as $240,000, and most of this is just to cover the costs of their health care.

If you're starting to prepare for retirement, there are several ways in which you can save on your health care costs.

There's no time like the present

If you really want to cut your costs down there's no need to procrastinate. Your best bet is to start putting money away now. One of the best ways to do this is to open up a health savings account (HSA). These tax-advantaged accounts are an ideal way to save money and earn interest on it while paying for qualified medical bills. Any money that isn't used will simply stay in the account and roll over to the next year. There are numerous benefits with a HSA and those who are between 55 and 65 years of age are allowed to save an additional $1,000 each year in the account.

Do you have enough coverage?

As you grow older your health care needs often change. In general, people need to add health insurance coverage to their existing policies, but in some instances you may actually be paying for coverage you don't need or use. It's a good idea to sit down with a licensed health insurance agent and go over your health plan with a fine-toothed comb to see if you need additional benefits or can cut some out. You may be better off with a Medicare Supplement or Medicare Advantage plan when you retire rather than original Medicare as they provide additional benefits.

Note:  Learn more about signing up for Medicare.

Come to grips on the Affordable Care Act

There will be several new health insurance laws in place when the Affordable Care Act is fully implemented. Most seniors will benefit from the reforms and it's important to know the details. For instance, you'll be able to receive preventive care without having to take care of a co-payment out of your own pocket or any other fee.

On the other hand, if you're visiting a health care provider for preventive reasons and you receive an additional service or procedure at the same time, you might be required to pay. It's a good idea to know exactly what your financial responsibilities are before getting treatment.

Keep your eye out for a better deal

Just because you have a Medicare plan in place doesn't mean you're stuck with it for life. Keep on top of what's on the market each and every year during the program's open enrollment period. You'll find that health insurance providers may release new policies and discard some of the older ones.

Of course, they may also raise the rates. Take the time to compare all of your options to make sure you're getting the best possible coverage at the best possible price.

Know what your health plan does and doesn't cover

When you retire it's important to know exactly what Medicare and any other health plan you may have covers. Be sure you know if anything like long-term nursing home care is provided and what the costs are. While it's impossible to predict if this type of care will ever be needed, it may certainly be worth paying a little extra for if it isn't too costly. Without coverage, the cost of staying in a nursing home could be astronomical.

Tagged as: healthcare costs

Opening a No Fee Roth IRA with Sottrade

One of my goals in mobilizing the Roth IRA movement was that I was hopeful that many young adults would get inspired and, in turn, open up their first Roth IRA.

I knew, however, that while some would take the initiative and actually do it, there would be many others who would be overwhelmed with all the different options that exist.

I then became determined, a.k.a. obsessed, in trying to find the viable option for someone who was a novice investor, on how they could get started in opening a Roth IRA.

Knowing that most GenX and GenY members are online and tech savvy, I figured it would make sense to try to find an online brokerage that would be easy to maneuver.

Now there are several different options out there, Schwab, E*TRADE, TradeKing, Betterment. FYI ' if you want to see a comprehensive review on Betterment, go here. I'm sure all of these have plus and minuses in going with them.

The one that I have decided to focus most of my efforts on was Scottrade. Why Scottrade you ask? Really for the mere purpose that Scottrade is located in St. Louis, which is about 90 minutes from where I live. Plus, I have been in the Scottrade Center on several occasions to witness several sporting events. Is that a good enough reason? Let's just say it was for me.

I first have to confess; I have been a financial advisor for over ten years now and I know first hand how easy it is to open an account at my firm or any of my competitors. I was not versed, however; on how to open up an account online. I assumed it would be easy, but didn't really know what it all entailed.

So how do you find out how something works if you have never done it before? You take it for a test drive of course!

The first thing I did was I called the Scottrade toll free number and talked to one of their customer service representatives. I explained to them that I was a financial advisor and was interested to learn the process of how a new customer would open a new account with them.

They were very helpful and I learned a lot about their platform. I was excited to learn that although on some of their advertising they suggest that you have at least $500 to get started, it's just that ' a suggestion.

In all actuality, you don't need $500 to open the account; you don't need anything for that matter.

Obviously you have to have money in the account to purchase some investments. I also learned that there are no annual fees for owning the account. You can call their toll free number at your convenience and get help that has several locations that you can go visit, and they also had over 3,000 mutual funds and several ETFs that you can purchase at no transaction charge whatsoever. The more I learned about them the more I became impressed with their operation.

In all Scottrade has access to over 14,500 different mutual funds with 3,100 of them having no transaction charge.

Now making a phone call and learning about something is one thing, but until you actually test drive it itself, it is hard to teach somebody how to use this. So I figured the only way I could really understand the Scottrade system was to open an account myself, which I did.

Because of the title of the post and talking about ordering a Roth IRA, that was my hope, but alas, I have exceeded income limits, so therefore, I can no longer participate in a Roth IRA. So for this purpose, I have opened up an individual account just so we could see the behind the scenes platform of how Scottrade works.

Opening your account with Scottrade is super easy.

Starting with their site, they'll walk you through a several step process of just collecting personal information; name, date of birth, address, social, etc.  If you're opening an IRA you want to have your beneficiary information available as well.  Once you get all the pertinent data entered in, you'll then be asked to print off a form or two that you'll need to sign and physically mail in to their home office.

All in all, I am pretty sure I had the account open in less than ten minutes.

Funding Your Scottrade Account

The next step will be funding your account.  If you have a brick and mortar location close to you, it's as simple as dropping, leaving them a check and voila your new account is funded.  If you don't have the luxury of a brick and mortar location available to you, you can either mail in checks or you could setup your bank account to be connected with your nee Scottrade account.

If you have online checking it's pretty easy to get it setup.  We're currently in the middle of having a few issues with our online checking for various reasons, so it wasn't as easy for me to get it setup.  That was more my bank issue and not as much Scottrade.

In my case I had to setup a money deposit where there would be two random and small deposited to our checking account.  I would then to verify those amounts to Scottrade to show that I in fact was setting up my own checking account with them.  After a few days the amount showed up and I was able to log back into my Scottrade account and verify that I was in fact me.

Scottrade Customer Service

One of the things that really impressed me the most when opening my account with Scottrade was the next morning I received a phone call from the closest branch to me.    I must admit that I was thoroughly impressed by this.  Typically when you think of an online company, you don't expect as much getting a phone call from a real live person following up with you.  It ended up being their branch manager nonetheless.  She was able to walk me through some of the basic items and how to make my first purchase with them.

I never felt like I asked too many questions and never felt like I was being rushed off the phone.  I think those aspects are huge, especially if you're a new investor and the whole process if overwhelming.  How helpful to have someone on the phone to help you every step of the way, and the best part is, is that it's free.  It's all part of the Scottrade package.

Interested in opening an account with Scottrade? Find out how easy it is here and get started today.

Carnival of Personal Finance #363 ' Never Forget

Today I will be BBQ'ing just like every other American family. But memorial day will always have a different meaning for me.

You might think that serving overseas might have something to do with it ' and it does. But that's not the only reason.

It wasn't until several years after returning home that Memorial Day took on a special meaning for me.

The day that I learned SSG Joshua Melton, a father, a husband, a true warrior ' a brother in arms that served with me in Iraq and then volunteered to serve again in Afghanistan ' was killed by an IED while on a mission.

Josh didn't have to do again. Truth be told, I got out of the military after my enlistment was done so that I didn't have to deploy again. There are days that I feel selfish for this decision. As if serving one 16 month deployment wasn't good enough.

Others may consider me a hero, but the true heroes are those like Josh that served, not because they had to ' because they loved their country.

You may know one of these heroes or a family member of these heroes. Take some time today and remember to thank them for the awesome sacrifice they have done.

It's the least we can do.

Never forget.

Now the Carnival of Personal Finance:

The Top Picks of the Week

SB from One Cent at a Time presents A Few Unconventional Ways to Reduce Gas Consumption, and says, 'Some unconventional ways to save money on gas. Simple techniques which any one can follow ranging from enhancing AC performance to adjusting driving speed, find it all.'

Eric from Narrow Bridge Finance presents How to Start Your Own Business with Little Money, and says, 'On Friday night, I had the pleasure of joining Chris Guillebeau and other like minds on the Denver stop of the $100 Startup Book Tour. It was fun meeting people who only knew me as '@DenverEric,' and I enjoyed chatting about world travels and business adventures with a great group of people. Chatting with Chris, I started thinking about the different startup business models popular in the online world today and how to leverage all of them for a great success.'

Philip from PT Money Personal Finance presents Best Long Term Savings: Building a Nest Egg, and says, 'Discusses creating a savings plan for money to be used on a yet-to-be-determined long-term expense. Analyzes it by looking at a few of the major factors: liquidity, return, and risk tolerance.'

Donna Freedman from Frugal Cool presents 'Microjobs': Quick extra cash, and says, 'A number of websites will connect you to one-time or short-term gigs. Some pay surprisingly well. Microjobs aren't just for students, either. Their flexibility make them a good bet for at-home parents, the unemployed or underemployed, retirees who want to bring in a little extra and people who already have jobs but want to earn extra money for specific goals. '

Martin from Studenomics presents One Little Secret That Will Help You Make More Money Freelancing, and says, 'How to make more money right now.'

The Best of the Rest

Russ Thornton from Wealthcare For Women presents 9 Investments Women Should Avoid, and says, 'While there are many resources on the web and in the media telling us which investments we should buy, I've highlighted a list of 9 investments I believe women should avoid.'

Shaun Connell from US Interest Rates presents Should I Pay Off My Mortgage Early?, and says, 'An explanation as to why paying off a mortgage early might not be the most profitable choice in the long-term, but for many ' if not most ' people, it's still one of the best choices possible. A bird in the hand is worth two in the bush.'

Diva from Diva In Debt presents How Much Is Happiness Worth To You?, and says, 'How much is happiness worth to you? Diva in Debt discusses how much she is willing to spend to be happy on a daily basis.'

Roshawn Watson from Watson Inc presents Broke People ' Stop Giving Me Financial Advice!, and says, 'y personal finance journey has lead me to keep others' opinions out of my wallet. Here are 4 reasons to not allow broke people to influence your financial decisions.'

Michael Kitces from Nerd's Eye View presents Why Saving In A Roth (Or Any) IRA Might Be A Bad Idea For Young People After All, and says, 'Allocating savings towards human capital in ways that increase its value or growth rate can actually have far more impact than investments in financial assets; spending $2,000 on classes that produce a $1,000 raise in base salary can, over the next 40 years, generate nearly 20 times the wealth of merely saving the $2,000 in a Roth IRA and growing it for decades!'

Andy from Saving to Invest presents The Business of Being the Best, and says, 'Everyone can study these seven characteristics of success, and learn how to incorporate them into their own lives, and reach greater levels of success.'

Josh's daughter embracing his memorial.

Echo from Boomer & Echo presents Will Your Pension Plan Handcuff You To Your Job?, and says, 'Psychologically, you can be trapped for decades doing something you no longer feel passionate about because of the appeal of maxing out your pension plan.'

Mike from Rewards Cards Canada presents Do You Put Groceries On Your Credit Card?, and says, 'For some people, there's a psychological barrier that exists when it comes to using credit cards for essentials like groceries, gas and pharmaceuticals.'

Miss T. from Prairie Eco Thrifter presents Want to Travel the World for Free? Then Do This, and says, 'Travel isn't just for the wealthy; anyone can travel, even if they have little money to fund their trip. If you dream of travelling to far-off lands, here are 6 ways I have found to travel the world for free; Or at the very least, almost free.'

Lance from Money Life & More presents How To Win Scholarships, and says, 'When I was a college bound high school kid and while I was attending college I made an effort to try to win as many scholarships as possible. It was free money for the most part but you have to spend some time to finding the scholarships and filling out the applications.'

J.P. from Novel Investor presents The Complete Shareholder Proxy Vote Guide, and says, 'As a shareholder, understanding your rights, the proxy voting process and knowing the SEC proxy rules is the best way to stay involved. How you vote could have a direct impact on the company and your money going forward.'

Dave from 6400 Personal Finance presents Lieutenants Should Be Worth $100,000, and says, 'I show how a select group of young American professionals (junior military officers) are setup for financial success the moment they go on active duty'if they take advantage of the opportunity that is.

Eric J. Nisall from DollarVersity presents Stop Being So Obsessed With Saving Every Penny, and says, 'Saving for the future is an oft-neglected aspect of financial planning. Some take it to the opposite extreme and concentrate all their energy on retirement planning. There needs to be a balance in order to avoid regrets and enjoy all aspects of one's lifecycle.'

CCS from Credit Card Smarts presents How Credit Cards Help You Build a Credit History, and says, 'When you use a credit card you are affecting your credit history. Use it wisely and you can build up your credit history with your credit card. See how.

Glen Craig from Free From Broke presents Which Airlines Have Seats Open for Your Rewards?, and says, 'Ideaworks released their annual Switchfly Overall Reward Seat Availability Survey. See which airline miles and points programs faired best.

eemusings from Musings of an Abstract Aucklander presents My worst financial decisions, and says, 'A look back on poor money choices I've made.'

Nicole from Nicole and Maggie: Grumpy Rumblings of the Half Tenured presents Spending for the second baby, and says, 'How much did you spend on baby #2? What kinds of things did you need?'

Bethy from Credit Karma Blog presents 'Duets' ' Money Lessons from Singing Superstars, and says, 'Not only does 'Duets' satiate the hardcore singing competition reality show fans (they're out there, and they're bloodthirsty), but it also shows how successful you can be when you don't go it alone. Let's take a look at a few 'two is better than one' benefits, learned from ABC's new reality show.'

Janet from Credit, Eh presents Don't Fall for these 5 Telephone Scams, and says, 'There are a number of telephone scams out there, and you need to be on the alert. Here are 5 telephone scams to watch out for.'

Jarrod from My Dollar Plan presents Are Paid Surveys a Waste of Time?, and says, 'Paid surveys can be a nice source of extra cash but when do they cross the line into 'waste of time' territory?'

Dividend Growth Investor from Dividend Growth Investor presents How to generate $1000/month in dividends, and says, 'The goal of every dividend growth investor is to create a portfolio which throws off a sufficient stream of income that pays their expenses. As soon as the amount of dividends exceeds the monthly expenses, the investor has reached financial independence.Now that we have the end goal in mind, we have to determine when exactly we need to be able to achieve the target monthly dividend income.'

Jacob @ My Personal Finance Journey from My Personal Finance Journey presents CarMax's MaxCare Extended Service Plan Dissected and Other First-Hand Account CarMax Car-Buying Experiences, and says, 'This post delves into some of the woes of used car buying. Specifically, it outlines and details the Jacobs' first-hand account of a used car buying experience from the popular used car dealership, CarMax. Though the overall experience was positive, there were some major financial 'products' that were pushed that Jacob highly recommends against purchasing. This post details those pitfalls which will help prepare you in your own used car buying experiences.'

Alunda Marks from My Take on Money presents 20 Innovative Ways to Earn Extra Income from Home, and says, 'Alunda at My Take on Money presents, 20 Innovative Ways to Earn Extra Income from Home.'

Josh Champagne from Live Well Simply presents Habits of the Amish, and says, 'The Amish live a life that is pretty far outside the average. Here are some of the habits of the Amish, we can learn from.'

FMF from Free Money Finance presents 30 Steps to Great Finances: Steps 1 and 2, and says, 'Are you overwhelmed thinking about all the work required to get your finances in great shape? Well the good news is that you can do a complete financial overhaul in 30 simple steps. Yep, that's it.'

Bryan from Pinch that Penny! presents Should I Drop Chase Bank?, and says, 'I'm contemplating dropping Chase and going completely online with my banking.'

Tim from Brilliant Finances Personal Finance How To presents Some Tips on Buying a New Car Without Breaking the Bank, and says, 'With so many choices on where to put your money this article discusses the best places to invest.'

Earth and Money from Earth and Money presents Are We an Impatient Society?, and says, 'Yesterday, I was delayed several minutes by a chatty customer in line at the grocery store. Should I have been more patient?'

Odysseas from Wallet Blog presents Are Austria & Luxembourg Hurting American Taxpayers?, and says, 'As evidenced by the recession, personal finance and global finance have become increasingly inseparable. The policies of one country ultimately affect the economies of others, and therefore affect the personal finances of the individual citizens of those countries. So why would anyone approve of a policy that supports tax evasion, promotes criminal activity and adds to economic strain.

Bret from Hope to Prosper presents Following Up on the Facebook Fiasco, and says, 'I posted almost a year ago on why I thought Facebook stock was a really bad investment. Unfortunately for investors, it was even worse than I had anticipated.'

John from Card Hub presents Where's My Experian FICO Score?, and says, 'In a world where knowing your credit score is now instrumental to handling your finances, why is it that Experian keeps you from that knowledge? It's a flawed system when the consumer is denied access to their own financial data.'

Sean from One Smart Dollar presents Teaching Kids the Value of Money, and says, 'An essential part of parenting is teaching your children the value of money from an early age. This will help them out a lot once they are on their own and making their own financial choices.'

Natalie from Debt and the Girl presents What is the price for a (supposed) better future?, and says, 'I hope you like it!'

Dan Meyers from Your Life, Their Life presents How much does it cost to raise kids?, and says, 'We've all heard the eye-popping costs of raising kids (quarter million dollars anyone??). Check out the truth behind these numbers.'

Never Forget

Mr. Money from Smart on Money presents Is Your Portfolio Balanced?, and says, 'If you plan on living a comfortable lifestyle during your retirement years, figuring out a way to save for retirement is essential. Many Americans struggle to find a way to save money for retirement and many of those have trouble making sure that their portfolio is balanced. Without some balance in your portfolio, there's a good chance that you will not be able to get the returns that you need to retire comfortably'

D4L from Dividend Growth Stocks presents 5 Higher-Yielding, Income Growing Tech Stocks, and says, 'When you hear the names Cisco (CSCO), Oracle (ORCL), Apple (AAPL), Microsoft (MSFT) and Intel (INTC), 'dividend stocks' is probably not the first thought to enter your mind. It wasn't that long ago that tech companies simply didn't pay dividends. Every penny earned was plowed back into the business. The entire focus was on growth, and investors were looking for capital gains''

Ray from Squirrelers presents Money Tips for Young People Starting Out, and says, 'It's a good idea to start out on the right foot when it comes to money. This post shares tips for young people just starting out, to help avoid mistakes and make smart decisions that might pay dividends for years to come.'

TTMK from Tie the Money Knot presents Parents and Money: Communication is Key, and says, 'Money discusssions with parents can be awkward, and we might even question some of their decisions anyway. This post explores the topic of parents and money, which can impact us in unexpected ways.'

Mike from The Financial Blogger presents Is The Storm Over Yet? The Tribulation of a Blogger Who Wants to Be a Mogul, and says, 'Is the whole Google storm over with?'

Green Panada from Green Panda Treehouse presents Did You Invest in Facebook? (Should You?), and says, 'Did you get to invest into Facebook?'

Pierre from Intelligent Speculator presents The Facebook 'Fiasco' ' Am I Crazy?, and says, 'What's really happening with Facebook?'

Div Guy from The Dividend Guy Blog presents The Best Source To Get Dividend Stock Picks, and says, 'Where do you get your dividend information?'

Penny Golightly from TotallyMoney presents Easy ways to make a bigger profit on eBay, and says, 'simple tips to make more money when you sell your unwanted items on ebay'

 

Jason from One Money Design presents Are You Really Getting a Good Deal when Shopping at Outlet Stores?, and says, 'It's important to be a savvy shoppoer when purchasing from outlet stores. Follow these tips to make sure you get a good deal.

Nathan Richardson from ComplexSearch presents What's a Good Credit Score in 2012, and says, 'Because of the mortgage crisis of 2008, many changes were made to creditors anticipation of what is a good score. We've consulted credit experts and came to the conclusion of what is a good credit score.'

Dannielle from Odd Cents presents Why I'm Getting Rid of My Credit Card, and says, 'I explain why I'm getting rid of a credit card that has no benefits.'

Geoff @ Financial Highway from Financial Highway presents RRSP vs TFSA Which is Better?, and says, 'When Canada introduced the TFSA into the mix of registered and non-registered investment accounts, it made an already difficult decision even harder. How do I allocate my investments between my TFSA, RRSP and non-registered accounts? We've prepared a number of examples below to help investors understand the tax treatment of different investment types and the optimal account mix for their portfolio.'

Myself from Life Insurance By Jeff presents Special Risk Life Insurance ' How Special is it?, and says, 'Special risk life insurance is a lot like high risk life insurance, you can get it but you'll wind up paying more than those the insurance companies deem not a risk.'

Get $150 or $250 in Free Rewards with a Citi ThankYou Preferred Card

Thank you, may I have another?

Looking for some free credit card rewards?

Citi has two different ThankYou Preferred Cards that give you a bonus points reward for hitting certain spending levels.

Depending on the card those free bonuses are worth $150 or $250 in gift cards or merchandise.

Let's look at the details of how these cards play out and whether or not they are a good fit for your goals.

Two Different Citi ThankYou Preferred Cards

There are technically two opportunities to open a Citi ThankYou Preferred account. The bonus level and specific rewards program of your card are dependent upon which opportunity you to choose to go with, so choose carefully.

It's like a choose your own adventure with free money at the end of the story! (I wasn't the only one that read those growing up, was I?)

The first option: $250 in free gift cards, earn 1 ThankYou Point (TYP) per dollar spent (essentially 1% cash back) on all spending

The second option: $150 in free gift cards, earn 5 ThankYou Points per dollar spent on gas station, drug store, and grocery store purchases for the first 12 months (1 point per dollar after the first year), and 1 TYP per dollar spent on all other purchases

It depends on what you're looking for more. Do you need a card for every day use? Then taking the lower gift card reward level to get the 5 ThankYou Points per dollar spent (essentially 5% cash back) makes sense.

But if you already have an every day spending card, or need one that will give you maximum rewards after 12 months, then simply apply for the $250 in gift cards version of the card and don't worry about earning additional ThankYou Points.

If You Want Maximum Free Rewards

Some people are content with their credit card situation. They have a good travel rewards card and a good everyday spending card. They earn their rewards, put the card back in their wallet, and go on with their lives.

But getting $250 for essentially free? How could you pass that up?

That's exactly the reward you will get (technically 25,000 ThankYou points, which you then convert to gift cards or a statement credit) when you open a Citi ThankYou Preferred account. To get the 25,000 point bonus reward you just need to spend $2,000 on the card in the 4 months of having the card. That's only $500 per month to get $250 in free rewards. (Plus, you'll earn another 2,000 ThankYou Points that you can convert to additional rewards.)

Don't worry, there isn't a catch beyond the spending requirement. There is no annual fee on the card. Just meet the spending requirement, get your bonus points, and cash them out.

If You're Looking for a Credit Card for Other Purchases

If you are seeking a credit card with a good rewards program to use for the next year, then take the lower gift card level. You still get 15,000 bonus ThankYou Points which can be converted into $150 in gift cards or statement credits.

Plus, getting those bonus points has an even lower spending requirement: just $1,000 in the first 3 months of having the card. That's only $333 per month. You probably spend more than that on gas and groceries already.

What's great about taking this version of the card is not only do you get $150 for free, but you also get what amounts to a 5% rewards program on your gas station, drugstore, and grocery store spending. I know that's where my family spends a majority of its money and you won't find any program that pays higher than 5% back on that type of spending that also doesn't have an annual fee. (American Express' Blue Cash Preferred card offers 6% on grocery spending.) You can enjoy that higher cash back level for the first 12 month of having the card; after that it drops back to the typical 1 TYP per dollar spent on the card.

There isn't any other catch beyond the low spending requirement. There is no annual fee on this card, either. Simply spend $1,000 on the card, get your bonus points, and convert them to whatever is most useful for you as a reward.

How Can I Use My ThankYou Points?

Citi's ThankYou rewards program is just as robust as its competition. You can buy a lot of different things with your ThankYou points: gift cards, statement credits, merchandise, and travel. Most of the ratios of points to dollars is 100 points per dollar of rewards (or, flipping the equation, each point is worth $0.01). So a $25 statement credit will cost you 2,500 points.

They do offer you the option to get a check sent to you, but sadly the ratio at which your points convert to cash is horrible. You can get $50 via check for 8,000 points. That's 160 points per dollar or valuing each point at $0.00625. That's a devaluation of 37.5% ' ouch! Never convert your ThankYou Points into cash.

What's the Catch?

With some credit cards with big bonuses there is some sort of catch like:

• an annual fee that you pay up front before getting the card
• an annual fee that is waived for the first year but you pay every year after that
• impossible requirements to meet before getting the bonus

And it's understandable that you might think these cards would do the same thing.

The good news?

They don't.

No annual fee. Not up front and not next year. Never.

No impossible requirements. Either $2,000 in spending in 4 months or $1,000 in spending in 3 months.

Tagged as: Bonus points, Citi ThankYou Preferred Credit Card, Gas Cash Back, gift cards, Reward Points Credit Cards

The Growth of Your Small Startup: What You Need to Succeed

Time to Grow

Starting a small business is a tough proposition ' just look at the success rate: a meager 37% chance of survival if you employ fewer than 20 people.

The statistics aren't too desirable if you look at them like that.

There is good news though ' The difference between being in the failing 64% and the successful 37% is knowing what you're in for and planning accordingly.

There are several steps you need to take to give your company the best possible chance of success beyond the four year mark ' below are some tips you can use to foster the growth of your start-up.

Develop a Sound Business Plan

Planning is integral. Without a clear plan, good business decisions are nearly impossible. Before you take any action, sit down and create a written plan for your business that includes the company's purpose, its marketing strategies and overarching management details. You should also make a list of your competitors, and include ideas for securing funding. If you already have supplies and equipment, create a ledger of these items for future reference.

Business plans should include plenty of supporting documentation for all aspects of the plan. If you intend to secure funding by enlisting backers, the plan should include copies of all partners' financial statements and tax returns for the last three years. If your business is a franchise, include the franchise contract as well. Finally, your business plan should include copies of all lease contracts, licenses or other legal documents associated with the company.

Obtain Financing

Few business owners are able to fund their start-ups without any outside assistance. Financing for your new company may come in the form of grants and loans, venture capital, or investments from partners in the business.

Some of the best grants are those supplied by federal government. In order to apply for grants from the government, you must first obtain a DUNS number, a nine-digit number the government will use to identify your company.

If you're looking for business loans on the other hand, you can apply for them with most banks and credit unions. These same institutions are often the ones offering business credit cards as well. Small business start-ups, however, often have difficulty qualifying for traditional loans or credit.

If you aren't able to qualify for a standard business loan, or if you're unhappy with the terms of the loans you're offered, you can also apply for an SBA Loan. Loans are guaranteed by the U.S. Small Business Administration, so they are easier to obtain. In many cases, SBA loans also feature lower interest rates.

Choose a Structure

When you start a new business, you can choose one of several structures including limited liability corporations (LLC), partnerships, corporations, S corporations or sole proprietorships. Each type of organization comes with different tax filing requirements and implications. For example, if you own a sole proprietorship, all of your business income will be included on your personal tax return.

If you structure your business as a partnership, however, your business must file Form 1065 each year to report its income to the IRS. Likewise, corporations and S corporations must file Form 1120, the corporate tax return. Finally, LLCs are responsible for reporting their income as a sole proprietorship, corporation or partnership, depending on their internal structure.

Register for Local and State Taxes

After you have registered your new business with the federal government, you must still submit the appropriate paperwork to your local and state governments for tax, workers' compensation, disability insurance and unemployment purposes. Most states require businesses to register with the state tax agency before collecting any sales tax from customers. In most cases, your business must also register to pay state income tax and employment taxes. Certain states, including Rhode Island, New York, New Jersey, Hawaii and California, require businesses with employees to pay for temporary disability insurance coverage as well.

Apply for Licensure

Before you can legally begin operating your business, you must apply for any licenses and permits you need. All businesses must apply for a basic operating license. If you are involved in any federally-regulated activity, you must obtain a permit or license for that specific activity as well.

Federally-regulated activities include:

• Radio and television broadcasting
• Working with nuclear energy
• Mining and drilling
• Maritime transportation
• Commercial fishing
• Agriculture
• Service and sale of alcoholic beverages
• Aviation
• Manufacturing, importing or selling firearms, ammunition or explosives
• Dealing in wildlife.

In some cases, your business may also require state and local permits in order to operate. Consult the community regulators in your location to learn more.

Learn about Your Responsibilities as an Employer

If you intend to hire employees to help your business succeed, you must first learn proper hiring, reporting and management procedures.

The first step in the hiring process involves obtaining an employer identification number, or EIN, from the IRS. You will need this number for tax purposes, as well as for reporting information about employees to your state. As an employer, you must withhold income taxes from your employees' wages based on the information they provide on Form W-4. You are also required to submit Form W-2 to the IRS on an annual basis to report each employee's income and withholding for the year. Depending on your state, you may also need to withhold state income taxes.

Each employee you hire must complete Form I-9 within three days of hiring to confirm their eligibility to work in the U.S. As an employer, you must keep these forms on file. You must also carry Workers' Compensation Insurance coverage to protect yourself against employee injury claims.

One of the most important responsibilities employers have is to uphold the rights of their workers. Federal and state laws require employers to display posters in the workplace that inform employees of their rights under current labor laws, as well as employers' responsibilities. Employers are also required to comply with these laws in all of their dealings with employees.

For example, some states mandate that employees must receive a meal break after working a certain number of hours. In addition, all states require employers to pay employees at least 1.5 times their usual hourly rate for every hour worked in excess of 40 hours in one week. Failure to comply with these laws may result in fines, penalties and legal action.

Stay Organized

When you own a business, you will deal with a lot of paperwork. You will also have a large number of responsibilities and obligations. To ensure that you always comply with federal and state laws, develop a system for organizing your important documents as soon as the company is formed. In addition, you should keep records of all of your obligations throughout the year, such as tax filing dates and license renewal.

Best of luck in the new business adventure. Those businesses that make up the 37% are those that were smart about their decision making, and knew what they needed to succeed.

Tricks Used to Get You to Spend Your Money

Save Big!

Everywhere you turn, someone is trying to part you from your hard-earned cash.

No matter where you are, or what you are doing, you likely have to confront various tricks to convince you to spend your money.

This includes attempts to upsell you at a restaurant, or to get you to make a purchase right now ' just in case you miss out on the opportunity.

Indeed, there are several tricks that can be used to encourage you to spend money that you didn't exactly mean to part with. In order to keep control of your monthly cashflow, it helps to understand the techniques used to help you feel as though spending money is the right option.

Urgency

Don't need 2? Who cares!

One of the most effective methods of convincing you to spend money is urgency.

A commercial or a salesman might create a sense that if you don't act now, you will miss out on a great opportunity or bargain.

The idea that something is only available for a limited time, or that only the first few people through the door will be the recipients of a great deal, is compelling.

If you don't rush out and spend your money, will you have passed up a great bargain or opportunity that won't come again? Many of us are afraid of losing out, and the urgency appeal is one that plays to that fear.

However, most sales will come around again, and most opportunities will be available again.

Most things aren't 'one time only' ' no matter how many times the phrase is repeated. (Remember that urgency is one of the prime tools of scammers, as well.)

Become an Insider

We all like to feel special, and as though we know something others don't. The feeling of being elite, and having inside information that others aren't privy to can be heady. Perhaps you are receiving the 'inside track' on a new artist or author, and have the opportunity to buy something before it 'gets big.'

You deal as though you are in on a secret, and once the secret becomes known, you will benefit from having gotten in on the ground floor. Paying extra to get access to 'insider' information can be one way to do it.

However, the insider technique can be a little more subtle. It can encompass paying for more expensive food or wine in an attempt to appear as though you know about 'these things.' The idea that spending more indicates that you are paying for quality, or that you are a connoisseur can be appealing to many.

However, if you don't actually know about the product in question, you might end up just paying more, and getting a product that isn't substantially better than something less expensive. This is a fine line to walk, and you need to be careful before you shell out extra in the hopes of looking like an insider.

You Deserve It

One of the ways that commercials get you is implying that you deserve something. You deserve a luxury car. Your cat deserves the fanciest food. Your kids deserve the coolest toys. After all, you work hard. You deserve a little extra. And maybe you do. But do you really have the money to afford it?

One of the ways that many people justify their debt is by saying that they afford something ' and that they deserve it now, without having to wait to save up. It's easy to shrug off spending beyond your means if you tell yourself that you deserve it.

Why I Purchased a 2.5 Million Dollar Term Life Policy

There is nothing more invigorating than sitting around a dinner table with guests and talking about life insurance.

Okay, just kidding.

It might not be invigorating, but it is something that I wish people would talk about more.

Why is that?

Because far too many people still don't have any life insurance at all, and if they do, they don't nearly have enough.

Often times, I see people that have $50,000 to $100,000 of term life insurance either through their employer or that they purchased themselves and they think that is enough.

Newsflash: It ain't!

If you have a family, with kids, if you have a mortgage, if you have consumer debt, student loan debt, I promise you that $100,000 is not nearly enough, and I will even be bold to say that $500,000 of term life insurance isn't enough either.

I have shared my story about the progressions of me buying more life insurance as my family grew.

After I got married, $250,000 at the time I thought was more than enough, and it probably was. After our first child, I added an additional $500,000 and after our second child, I really ramped it and purchased another 1.5 million dollar 30-year term life insurance policy, for a grand total of 2.25 million dollars.

For the longest time, I thought that that was enough, even after the arrival of our third child I still felt that my family would be protected in the event that something were to happen to me. I'm not really sure what triggered it, but I started to get the life insurance itch again, thinking man, do I really need to buy more?

With my wife and I starting the adoption process for our fourth child, I thought it at least wouldn't hurt to look into it. We have other assets, retirement accounts, savings, equity in my business that my wife could always liquidate, so I know there is other assets there, but I thought it wouldn't hurt to at least shop around and see if I could get more life insurance; I didn't expect that I would also be able to save a pretty penny.

By using the quote engine like you see here on the site, I was able to find out that I can actually get a 2.5 million 30-year policy and save over $400 a year for doing so.

The previous policies had been purchased over an eight year period and apparently life insurance rates have gone down enough and by consolidating, I was able to save a decent amount.

Here is my challenge to you; do you really think you have enough life insurance?

If you are the breadwinner in your family and something happened to you, is the amount of coverage you have going to take care of your family? Will it help pay off the debt? Will it help ease the financial burden that your spouse may have when she is forced to take care of the bills, take care of the children and help pay for their college?

There is so many other things that people don't realize that occur after your passing. If you have got the itch, use the life insurance quote engine below to see how inexpensive it is to get more life insurance coverage today.

Life Quotes by Wholesale Ins.

Should You Rollover Your Pension into an IRA?

Over 90,000 Ford Employees are facing a major decision: What to do with their pension.

Should they 'play it safe' and continue to take the monthly distributions?

Or they take control of the money by rolling their pension into an IRA?

Lately, I've had several clients that are faced with the same dilemma.

When you retire and you have a 401k, then the choice is usually pretty simple- roll the 401k over into an IRA.

There are some exceptions to the rule -under age 59 1/2 and if they hold employer stock- but usually that's the way to go.

What happens if a pension is involved?

Pensions will typically pay you an income for the rest of your life and then pay your spouse half of the amount for the rest of her life.   If you don't choose the annuity option, then the only other choice is to take the the lump sum option.

The lump sum option will allow you to take a big chunk up front and then roll that over to an IRA.  You then are in control of how much you take per month as your retirement income.

Let's take a look to see if it makes sense to roll over your pension into an IRA.

Before I continue, I should say that not all pensions are allowed to take the lump sum option.  One quick example that comes to mind (at least in my region) are teachers.  Most teachers only option is to take the monthly annuity benefit.

1. Financial Strength of Your Company

Deciding on whether to choose the lifetime income option vs. the lump sum might be as easy as evaluating the overall financial strength of the company you work for.  As I have mentioned before in a previous post 'Company is Going Bankrupt, What About My Pension', your pension is insured by the PBGC (Pension Benefit Guaranty Corporation) , but it's only up to $54,000 and that's only if you retire at 65.  Over and above that, then you are out of luck.  Any pension amount that is over the $54,000 limit will make the decision to take the lump sum more attractive.

2.  How is Your Health?

Does your family have a history of illness?  If so, then taking the lump sum and rolling it to an IRA might be the most viable option.  What's the point of having a income for the rest of your retirement if you are only in retirement for a few short years?

I have a client whose never married friend had worked for a company for almost 30 years.  When that person retired, they optioned to take the the annuity option and receive monthly payments.  Just after three months of receiving their checks they unexpectedly passed away.

Guess what happened to the remainder of the pension benefit?  It all went back to the company since they didn't have a spouse to pass it on to.   If they had rolled the pension into an IRA, they could have elected another family member to receive it or at least donated it to a charity or their church.

3. Beneficiary Minded

Most pensions work in that you (the employee) will receive an income stream for the remainder of your life.   When you pass, your surviving spouse will receive half of the amount you received.  (Some pensions do allow for your spouse to receive the full benefit, but typically you would have had to take a lesser amount in the beginning).

If your spouse predeceases you, then there's no more to be paid.  Same when your spouse passes- the payment stops with him or her.  If you have surviving children, they will not receive a dime from the pension.

By opting to roll over your pension into an IRA, you will at least have the option to pass the remainder (if any) to your heirs.  Also, if done effectively, they might be able to stretch the IRA over their lifetime.

4. Lump Sum Pension Payment Vs. Monthly Benefit

The last determinant is just like formerly called Puff Daddy's song says, 'It's All About the Benjamin's'.  You need to closely analyze how much the lump sum pension benefit option vs. the monthly benefit.  Let me highlight two situations where it the choice was fairly obvious.

Example 1

I had one client who was offered an early buyout on his pension.   He was almost 55 yet so he could start taking the payments immediately.  The monthly benefit that they were offering was approximately $3000 per month.  He had elected to choose a lower amount (the $3000) so that his spouse would receive the same amount for her lifetime.   That wasn't a bad option, but just to be sure, let's look at the lump sum amount.

The pension was an older one that was more beneficial to tenured employees so the lump sum amount was only around $250,000.   I say 'only' because assuming no growth on the dollar amount, then the client would have completely exhausted his pension in just under 7 years right before he turned 62.   In this case it was a no brainer to elect the guaranteed monthly benefit.

Example 2

Another client had just turned 62 and her company was offering her a lump sum amount of $600,000.   Not to bad, but let's look at the monthly benefit.   The monthly benefit amounted to $4,000 per month ($48,000) per year.   Thus far it's not such a clear cut decision.   What made it crystal clear was that the client has had a 401k with the same employer for just over $200,000 and had a sufficient emergency fund plus minimal debt.  On top of that, they had 3 kids in which they desired to pass an inheritance to.   Believing that they would never outlive their retirement nest egg, it may complete sense to roll over the pension into an IRA.

Before 59 1/2- In Service Distribution

One last point that I should mention is that you don't have to wait until you officially retire to roll your pension over.   Once you reach the IRS's magic age of 59 1/2, you can elect to do what's called an In Service Distribution.  Even if you plan to continue to work, you can elect to roll over your pension amount into an IRA.  Your pension will then to continue to accrue with your employer and you have complete control of your money outside of your employers hands.  This also works with 401k plans as well.

Deciding on the fate of your pension is a very important decision. Review your options more than once and seek council from different parties. I suggest meeting with a Certified Financial Planner and a CPA to help decide which option is best for you.

Tagged as: Ford Pension, In Service Distribution, lump sum distributions, lump sum pension payments, Pension Benefit Guaranty Corporation, Pension Buyout, pension lump sum rollover

Your Personal Definition of Success ' What Motivates You Each Day?

I was at lunch the other day with a friend that I hadn't spoken with in years.

During the lunchtime conversation, he made the comment, 'Man, how did you get so successful?'

At first, I dismissed it, as often I get embarrassed by such complimentary remarks.

But when I started driving back to the office after the meeting, I got wondering ' wow, am I really that successful? 

One of the biggest obstacles to overcome as an entrepreneur is constantly shortchanging yourself; always having doubts that you could have done a little more, made a little more, put a little more time in.

Essentially, we, entrepreneurs,  are never satisfied.

I've often had to take a step back and ask myself what my personal definition of success was, and I realize it's not always about the money.

In my industry, I talk to a lot of young gun financial advisors who are all about making the quick buck, as that is their only metric of success; and, ultimately, it's sad because at the end of the day, money does not rule the roost.

So, if somebody asks me, 'Jeff, do you think you're successful?'  My answer is an unequivocal, 'Yes'.  But it might not be for why you think.  Let's take a look at my personal definition of success:

I've got the love of family and friends.

Having come from a divorced family growing up, I've never been super close to my family.

Yes, we did Christmas; yes, we did Thanksgiving, but when I compared myself to other families and how they got together for certain birthdays and various traditions, I always felt that my growing up was a bit different.

Now that I have three sons of my own, family is everything.

In addition to that, I have several friends that I met in sixth grade that remain some of my best friends today.

It's amazing that our friendship has been that close, and even though we don't get together as much as we would like, each time we do, it's picked me up as if no time had passed at all.

In addition to family and childhood friends, we've also gained new friendships within our church.  We've been able to connect with many couples that have young kids just like us and able to share and relate in several ways.  Having a close-knit group of family and friends is such a huge blessing and is definitely a part of my success.

I love what I do.

Recently, I was talking with a guy who had switched careers and ended up becoming a dental hygienist in his early 30's.  In his previous career of mechanical engineering, he had experienced four layoffs over a two-year period.  He chose the dental profession as he felt that it was a safer industry that would prevent him from going through any more layoff experiences.

He made good money and he seemed very content in his job.  When I asked him how he liked it, his response is something I'll never forget.  He referred to his job as just that,

'It's work. I go to work, I get paid, and call it a day.'

In his case, he didn't love his job; it was just a means to an end.  While I can definitely respect somebody who makes the sacrifice to provide for himself and for his family, I feel very fortunate to truthfully say I love my job.  I love helping people making sense of their financial life.

Obviously, my job has challenges; remember the financial crisis in 2008?  Trust me, I haven't forgotten.

But despite those challenges, every day I get the opportunity to help people, whether it's in my office or on my blog.  There is no greater feeling than really helping somebody out and giving a solution to their problems and satisfying their needs.

Freedom to pursue other passions.

If you're reading this article, then obviously you're reading it on my blog.  Having founded my own investment firm, it gives me the flexibility to pursue my blog and other business ventures if and when they arise. You can follow some of these ventures on other blog Dollars and Roses that I started with my wife.

I've talked to so many people that have a job that doesn't allow them to get on Facebook or on Twitter while they're at work, which might sound trivial, but it's those little freedoms that I love.

If I hadn't gone the route in creating my own firm, I never could have grown my blog to what it is today.

If you remember the Roth IRA movement, that never would have happened in my prior arrangement.

Having the freedom to pick and choose what you want to do is so powerful, and it is definitely an ingredient in my recipe for the personal definition of success.

What is your personal definition of success?

What is it about what you do each and every day that makes you feel satisfied?  Everybody has their own definition of success, but you may be surprised at what you'll find if you take the time to clarify what success really means to you.

Tagged as: Define Success, definition of success

Should You Buy Mortgage Protection or Term Life Insurance?

Car insurance- check.

Health insurance-check.

Life insurance-check.

Mortgage protection life insurance'wait.. what?

With so many different types of insurance you can purchase nowadays, it's very easy to get insurance poor.

Buying coverage on your home with mortgage life insurance teeters on the fence of being a bit too much.

Before I get ahead of myself, let's look exactly what mortgage life insurance really is, then we'll look to see if it's worth buying.  Finally, we'll look at what other alternatives you can consider instead' such as buying a term life insurance policy.

What Mortgage Protection Life Insurance Is Not

First, I wanted to clarify what mortgage life insurance is not. Don't get this confused with PMI (Private Mortgage Life Insurance).  PMI is what is required by your bank or lender if you aren't able to make a downpayment (typically 20%) when purchasing or building new home.  I know in our case of the home we're building, are bank is requiring the 20% to avoid the PMI insurance. For a more official definition, let's look at what Wikipedia says:

Private mortgage insurance (PMI) in the US, is insurance payable to a lender or trustee for a pool of securities that may be required when taking out a mortgage loan. It is insurance to offset losses in the case where a mortgagor is not able to repay the loan and the lender is not able to recover its costs after foreclosure and sale of the mortgaged property. Typical rates are $55/mo. per $100,000 financed, or as high as $1,500/yr. for a typical $200,000 loan.

What is Mortgage Protection Life Insurance

Mortgage protection life insurance is an insurance plan that will not be offered by your insurance agent- most likely it will be offered by your bank.  If you have recently bought a new home or refinanced, chances are your mailbox has been flooded with offers to insure your home.  Before you decide to buy it or not, let's find out what it exactly is.

Mortgage life insurance is insurance that is typically bought through the financial institution that has your mortgage (like your bank).  

The amount of coverage that is purchased is the amount of your loan where if something happened to you the bank would be the beneficiary and pay off the loan.  In most cases, the policy is a decreasing term where as the years go by the amount reduces as you're paying your home loan down although the premium you pay stays the same.

Curious to find more information, I set out to the web to see what I could find.  After Googling 'Mortgage Life Insurance', I came across the  website below .  I really was hoping to get a true cost comparison between Mortgage Life Insurance and level term life insurance (since that's what I see it compared to), and this site seemed to have the answer.   The website had notified me that if I entered some basic information and agreed that I was okay with 3 insurance agents calling me, then I could get the quote I desired.  In the name of research, I went ahead with it.

Immediately after filling out the form and hitting 'enter' on my keyboard, my office phone rang and it was a rep calling me from the online company.  Wow, that's was quick.  I explained to them that I was a licensed financial advisor and that I was just doing research trying to compare mortgage life insurance.   She was fine with it, but to give me a comparison using me as the example; I had to give some information about my medical history.  Sure, no problem.   After answering a series of questions, she started rattling me off quotes for term insurance.  Wait a minute'I know term insurance.  I'm trying to find out about mortgage life insurance. I then inquired how what she was quoting me compared to term life insurance?   Her response,

'Oh.  Well, we don't recommend mortgage life insurance.  We think it's overpriced and feel that term is much more suitable for most folks'.

Doh!   That's fine, but didn't answer my question.  Turns out even though the site clear reads, 'FREE Mortgage Protection Life Insurance Quote', they don't even offer it.   I have to sheepishly admit that I was duped.  And now for the past few weeks my phone has been ringing with insurance agents trying to sell me something I can buy off myself.

When In Doubt Ask Your Banker

One minor roadblock wasn't going to prevent me from finding the answer I was seeking.  Since I'm currently in the process of building a home, I thought what not a better way to get some more information that go directly to my banker.  I emailed him inquiring if they do offer mortgage life insurance and how it compares to term life.   Here was his response:

We do offer it with our mortgage loans.  Premiums vary on a wide range based on loan amount, age of borrowers, and use of tobacco products.  One advantage is obtaining life insurance with few questions to answer and almost no underwriting.  Disadvantage is the cost is marginally higher  than level term, but mortgage life is decreasing term and pays no benefits to the borrower.  It pays the benefit to the borrower and the bank to pay off the mortgage.

I recommend to borrowers to look into level term before deciding on either one to compare the cost and benefits.  I would prefer to have the benefits paid to the beneficiary and then they can decide how to use those funds.  A good example is within the rate environment we have right now.  If I have a interest rate below 5%, it may be in my spouse's interest to take the life insurance funds and pay them out in a monthly benefit or invest the whole amount, rather than paying off a low interest mortgage.  With mortgage life you don't have that option.

Finally, something more concrete.  It was good to hear my banker say that he preferred term life insurance but he did bring up some good points on when buying mortgage life insurance insurance might make sense.

When Buying Mortgage Life Insurance Makes Sense (Maybe)

Mortgage Life Insurance is considered to be a simplified issue product meaning that you don't have to go through a series of medical screens and blood work to get approved.   For somebody that has pre-existing conditions, it could make sense.

Also, if somebody doesn't want to go through the hassle of filling additional tons of forms and having a nurse come to your home, it could make sense.  Please note:  There are term insurance products  that are called 'No Exam Life Insurance' that might be a suitable option compared to mortgage life insurance.

Still Wanting More

Still not completely satisfied with the information I had found thus far, I sought counsel from insurance expert Aaron Pinkston.  I asked Aaron the following questions hoping to shed some light more on mortgage life insurance and how it compares to term.

How Does the Premiums on Mortgage Life Protection Insurance Compare to Level Term? (Assuming good health)

Mortgage protection life insurance is sold out of convenience. That extra convenience means the cost tends to be higher because the underwriting process can't be as precise. With a more precise underwriting process, most level term life policies will tend to be less expensive than a comparable mortgage life policy.

Can you clarify the notion that anytime you refinance, you have to reapply for new a mortgage life policy?

Life insurance is designed to protect your family from financial catastrophe in the event of your untimely death (this is different than PMI). Even if you apply for a life insurance policy that requires your mortgage documents as part of the financial underwriting process, once you accept the life policy, it's yours. As long as you don't get your life insurance policy through false pretenses (aka. lying), the insurance company can't take it away from you. They also can't require you to re-qualify for coverage just because of a financial or health change. I think that's great news.

What would you suggest on someone shopping between the two?

If convenience and speed is your number one priority, consider mortgage life insurance policies along with other simplified issue policies. If other things like price, company quality, and so on are more important to you, another life insurance option might work better. We're all different ' there's no one right answer for everyone.

Should You Buy Mortgage Life Insurance or Term Life Insurance?

To truly answer that questions depends on many questions:

• What's your age?
• How is your health?
• Are you a smoker?
• How much insurance do you need?
• Is your primary conern paying off the mortgage? or
• Providing an income stream for your family after your passing?

I think it's safe to say that in most situations purchasing term life insurance makes more sense than purchasing life insurance.  In case you missed it, I had wrote a post that talked about how much term life insurance I bought.  The purpose for my life insurance coverage was to pay off our mortgage and to take care of my family if I wasn't here. If you have a similar desire, then take a serious look at term life insurance.

When you do go to get quotes,  be sure to shop around.   Your age and health, among other factors, will determine which insurance carrier will have the best rate for you.

Life Quotes by Wholesale Ins.

photo credit: Truthout.org

Tagged as: Mortgage Life Insurance, Mortgage Life Insurance vs. Term Life Insurance