Hi Folks,
We thought our readers might be interested in the March Manage Your Money Challenge that is being brought to you by the Enemy of Debt blog.
The challenge promotes at a calendar-based budgeting system called pocketsmith. I’m really excited to try it myself, but will have to wait until I get back from Congo to start my free trail.
If you check it out, let us know what your thoughts are.
Enjoy!
Miel
Hello Folks,
Here is a topic that you don’t see covered much in personal finance literature these days. It tends to come up more when you’ve gotten out of debt and are looking at low risk ways to hold on your cash while still keeping it readily available. So, provided that you have $1,000 to $5,000 you may be wondering whether you should buy CDs or Bonds?
A few points to consider:
Historically CDs are the investment of choice for many. Usually CD rates are higher than interest paid on savings accounts and unlike bonds your principal doesn’t change in value. This has made them historically popular.
But, compared to bonds, CDs do have some drawbacks.
First, CDs often penalize you if you take the money out before the deposit is mature. Unlike CDs, a no load bond fund or direct investments in bonds can be relatively quickly converted to cash – you don’t have to wait around for the CD to mature. In addition many CDs charge you 3 to 6 months interest as an early redemption fee. On the other hand, bond funds or direct ownership of bonds tends to be less expensive to redeem. For example selling bonds or a bond fund can cost between 10 and 50 dollars. Cost savings tend to be greater when you have more invested, so generally bonds give you more flexibility in buying and selling than CDs.
Second, CDs are generally taxable. On the other hand, bonds come in different flavors. They can be tax free (if they are federal and/or state) or taxable.
Third, more importantly, bonds tend to pay a couple of points more in interest than CDs.
Fourth, ss a final note, if you’re going to be buying either bonds or CDs you really should consider diversifying your holdings. For example if you own CD be sure to ladder them by buying CD with different maturity dates across different institutions. If you are buying bonds, be sure to consider a properly diversified bond fund, not just individual bonds.
Happy Shopping!
James
On this lazy Sunday afternoon we wanted to share some good tips that Mint.com has shared in their investment guide.
They provide a simple and easy to understand guide that covers the basics such as determining if your ready to invest, what risk you are willing to take, tips for investing for the long haul and diversifying your investments.
When it comes to investing people can easily and often be scared off by making it more complicated than it is. Take these tips from Mint and you’ll be ready to move forward and start your investing, or grow what you already have.
Happy investing!
Miel
This is my final post that I will submit to Miel and James for DINKSFinance as their part-time writer. Unfortunately my full-time job responsibilities are changing in such a way that makes it impossible for me to fulfill those and still have time to put in the effort I feel is necessary to deliver quality content for Miel and James.
First of all, I’d like to thank Miel and James for giving me this opportunity. They took a chance on a young person with no writing experience and they had enough faith in me to let me write about what I wanted. They supported me in a fantastic way, and I owe them a huge debt of gratitude for all that they have done for me. I really enjoyed my time writing for them, and I’m very sad that I will have to let this go. I only hope that they feel that their faith in me wasn’t misplaced and that they enjoyed having me on board as much as I enjoyed writing for them.
I would also like to thank the readers of DINKSFinance for not only reading what I had to write but also commenting on my posts, following me on Twitter and sending me emails. I really enjoyed interacting with you, whether you agreed with what I had to say or not, I valued your feedback a great deal, and if I’ve improved at all as a writer since I came on board, it would be a great deal because of my interactions with you. I think DINKSFinance has a great community, one that I’ve certainly enjoyed getting to know from this side of the webpage.
I’ll still be an avid reader of DINKSFinance, and I’ll drop a comment or two every once in a while for sure. Again, it’s been an honor to be a part of this website, and I’ll certainly miss writing my posts. I wish Miel, James and David the best of luck, and again, thank you.
Michael
Congrats to:
Edwin & Donnie
as winners to our recent Tax Lady book give away. If they can please contact us immediately so we can send the books their way that would be greatly appreciated. If we don’t get responses by the end of the weekend we will select new winners.
Cheers,
Miel
The idea of a minimum wage is a complicated topic, and I know many people who favor themselves as free-market advocates. That ideology is in direct contradiction to something like a minimum wage. If we live in a completely free market then the market itself will set an informal minimum wage, and thus legislation that forces an artificial minimum wage level would be rendered unnecessary. Also, opponents of a minimum wage suggest that it causes inflation, forces companies to look outside the country for workers and actually does nothing to raise the standard of living of the poor.
Despite what some may suggest, unbiased, quantitative research into the affect of a minimum wage is sparse. Studies are usually either too narrow in their focus, don’t cover a significant enough time frame to study or their results are too inconclusive. If anyone can point me to any research that doesn’t present those types of problems, please point it out to me; I’d be happy to take a look.
The argument that a minimum wage goes against free market principles is a silly one to me, because to the best of my knowledge there does not exist a modern economy based on a completely free market. Say what you will about the role the federal government plays in our economy, but to me it’s not constructive to argue free markets when there is virtually no traction when it comes to changing some of the fundamental principles of how our economy is managed.
Other arguments are more substantive, and should be paid attention to – especially if research proves that a minimum wage has no impact on the standard of living for the poor. But the best defense of a minimum wage that I’ve read was written by Robert Prasch in the Journal of Economic Issues. To quote Prasch’s conclusion:
“Finally, an increase in the minimum wage might also work to undermine systemic economic power and thereby be responsible for a more just, or at least a reasonable, distribution of society’s annual income. One also suspects that to the extent that the United States is currently suffering from a “stagnationist” economic pattern, an increase the minimum wage may be a popular, timely, and successful economic policy” [Mazur 1995].
Keep in mind this was written in 1996 he writes about a “stagnationist” economic pattern. When he talks about a “just … distribution of society’s annual income”, he’s referencing a commonly held economic theory that states that societies experience more spending across the board when income is more evenly distributed (this will probably be judged as controversial; for more background information on this topic, look into Post-Keynesian views on income distribution).
Regardless of your previously-held opinion on this matter, it’s a very interesting article to read. Readers, what are your thoughts on the minimum wage?
– Michael
Please leave us a comment for our book giveaway from The Tax Lady, Roni Deutch.
I could post for weeks on all of the great tips that Roni includes in your book, but this will be my last post before the big giveaway. I couldn’t leave out these great tips on a few common mistakes to look out for, and how to avoid delays in receiving your tax return:
Three tips to make sure you file accurately
Make sure you do the following to prevent delays:
Lastly, if you’ve found any of this week’s postings to be at all helpful, I would recommend going out and buying The Tax Lady’s Guide to Beating the IRS. I don’t often recommend buying the books that I review, but this would be an exception to that. Not only is there a great deal of information, but it is reader friendly and easy to find what you need most. At the end of the book she even lays out the fifty top tips.
Readers: Please leave us a comment for our giveaway, today is the last day to comment!
Happy Filing,
Miel
Please leave us a comment for our book giveaway from The Tax Lady, Roni Deutch.
Enjoy today’s checklist from the Tax Lady with everything you need to be prepared for your taxes:
Personal Data
Employment / Income Data
Self-Employment Data
Homeowner / Renter Data
Financial Assets / Income Data
Financial Liabilities
Automobiles
Expenses
Miscellaneous Tax Documents
Readers: Please leave us a comment for our giveaway, today is the last day to comment!
Happy Filing,
Miel
MSN Money has the scoop.
Please leave us a comment for our book giveaway from The Tax Lady, Roni Deutch.
One of the best parts of The Tax Lady’s book is that it seems there is no end to the great tips she gives. The book is really easily laid out and is a wealth of information.
While not everyone can afford to do so, one of the interesting tips was the benefits to buying a house for your college student to live in while they are in school.
Instead of paying for student housing, you can reap the benefits of investing instead. Basically it goes like this:
In addition to all of the tax benefits, you also teach your son or daughter invaluable lessons in business management and making money. It is really a win win situation.
We know someone who did this for their child who was starting Tulane in the 2005. Unfortunately, this was only weeks before Hurricane Katrina hit, so needless to say, a loss was had.
Readers: Please leave us a comment for our giveaway, and I’d love your thoughts on this idea.
Cheers,
Miel
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