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With the housing market in one of the biggest slump in decades, I’m contemplating the possibility of buying an investment property.  Those who know me will probably think that I’m nuts because I don’t even own a primary residence but let me explain the reasons why I haven’t bought a house in more detail.

Current Living Environment
I just got married in February and moved into a gorgeous apartment.  There are lots of free amenities and activities for residences that we truly enjoy.  The rent is not cheap but at least it is still affordable and we decided when we moved that it was worth the extra cost.  In fact, the apartment turned out better than we originally thought.  After we moved here, we were both happier and found ourselves enjoying life much more.

It is impossible for Emma and me to afford buying a house with all these amenities in our current financial situation, so if we buy a property, we will in effect downgrade our quality of life.

The Unused Space
We currently live in a one-bedroom apartment and although you can argue that we can use a second bedroom, the space we have is plenty for the two of us.  If we buy a place, we will at least get a 2-bedroom, if not a 3-bedroom condo/house because we don’t plan to move when we have kids.

This means that we will just be paying extra property tax for the unused space until we can grow into the house.

Renting Part of the House
Many homeowners in California rent out unused rooms to help pay the monthly mortgage.  I thought about buying a home and doing this too but since I work on my blog so many hours of the day, I don’t want to run the risk of my tenants causing distractions when they are in the house.

Why an Investment Property Seems to Make Sense

Since I convinced myself that buying a house might not suit my circumstances, I thought about buying a smaller piece of property and renting it out.  The reasons below seem to make this a sound choice.

We are in a Housing Slump
Most people are much happier buying a house when the market is going up but all we end up doing is overpaying for the properties.  I remember hearing stories of bidding wars in California where people were putting in bids of 15-20% over asking price in hopes that they will get the property.

The story is completely different these days.  Realtors are begging potential home buyers to look at houses and buyers who are interested are putting in bids as low as 40% below asking price.  It is in these markets where a first time home buyer like me can take my time and pick a good location.

Practice Makes Perfect
This investment property will be a smaller and less expensive place than my primary residence down the road.  If I can use this time to learn what I like and dislike about houses and sharpen my skills in the home buying process, it will only benefit me down the road.

Long Term Investments
Unlike my primary home where the emphasis will be on livability, the emphasis of an investment property is return on investment.  As long as the rent is generating a positive cash flow after expenses, I can ride the highs and lows of the market and still come out ahead.

Alternative Investments

There are so many other options out there for my money like stocks, bonds, CDs, and even investing in businesses.  Why am I thinking about real estate?

Real Estate versus Stocks
I currently own some stocks, but it is almost a part time job keeping up with them.  I want to get into a more passive approach and something that will generate an income for me.  If I buy any individual stock, I run the risk of it never recovering.  If I buy the index fund, I don’t get the income.

Another major benefit is that I won’t check my property performance like I would my stocks.  This will keep me from being emotional when the market tanks so I can focus on my other day-to-day operations (like writing on my blog).

Real Estate versus Bonds or CDs
Since this is a long term investment, I need something that gives me a higher rate of return.  Bonds and CDs are great for safety but the return on investment when my time horizon is taken into account is unsatisfactory.

Real Estate versus Investing in Businesses
This is an interesting alternative but I will definitely want to be involved with the business if I ever invest in one.  This is the total opposite of passive!

Real Estate versus All
It is a nice feeling to own a piece of real estate since it is an asset that you can actually see.  Furthermore, there are amazing tax incentives in the United States for owning real estate.  I believe the specific rule is tax free capital gain for the first $500,000 as long as you have been living in it for 2 out of the last 5 years.  So if we are lucky enough to pocket some gains on this property, all we have to do is move there for 2 years and then sell it.

What Do You Think?

Even though in theory this all make sense, it does not mean that it’s necessarily practical.  Does anyone agree with what I’ve said or can anyone think of something that I’m not seeing?  As a next step, I will start looking at the closing and renting prices of various properties to see if I can generate a positive cash flow.  I will keep you updated and I look forward to hearing your thoughts!

• Down payment and closing cost assistance
• 100% financing
• No minimum credit score required
• Flexible qualifying guidelines
• 30, 35 and 40-year loan terms available
• Fixed rate and fixed period Adjustable Rate Mortgages (ARM) options

During the housing boom, many of these loan agencies advertised to potential home owners, telling them to buy homes. Convincing statements like “Why rent when you can own” were resonating throughout all of America.

In fact, my wife and I almost took the plunge in March of 2007. We were looking at a property in a newly developed community and even went to their phase release. I remember waking up at 3:00am, driving to the house and dreaming about what we can do to the front / backyards. Luckily, the enthusiasm of buying our first home didn’t cloud our judgment in the end. I really need to thank the Irvine Housing Blog for giving me the necessary information to stay patient and wait. If it wasn’t for this blog, the home buying decision would have been a real net worth destroyer.

Getting a loan was never a problem a year ago, as companies like Countrywide gave everyone in the loan process huge incentives to approve loans. It didn’t matter if no one provided proof of income, nor did it matter that they were making $50,000 a year while buying a $500,000 house with no money down.

To make matters worst, the ARM loans were misused to the point that there are now millions of people facing foreclosure. We hear terms like sub-prime and HELOC abuse all the time but there are many mislead people in the average working class in serious trouble. These people are amongst us, they are our families and friends and not just people we hear about in the news. Being in California where home appreciation was one of the steepest in the country, I’ve seen my fair share of unhappy housing stories. I have two friends who are facing foreclosure and I can tell you that the foreclosure process is not something you want to go through. I totally overreacted when I wrote the post about ING’s disturbing ad (readers actually corrected me in that ING is actually a responsible lender and company) but if you see people you know suffer, you might do the same when ads like those come in your mailbox.

With so many people in such pain and the worst yet to come, Countrywide is still trying to advertise 100% financing. We can argue all day that it is really the people who brought their fate upon themselves but does Countrywide really have to help push them off the cliff?

Larry King Live on CNN interviewed two families in trouble because of the recent housing crisis last night.  The first family was starting to get behind on their payment, while the other already lost her home and is now living in her car!

Overview of the Two Situations
Family Hope
The first family (which we will referred to as Family Hope) lived in what they believed a $300,000 house.  They are starting to get behind in payments but they haven’t received their default notice yet.  They want to save their house but here are a few signs of why I think they haven’t really been doing something about it.

• Larry asked them how many months they are behind and they did not really know.
• When asked what their monthly mortgage is, they “think” it is around $2,100 - $2,200 instead of knowing
• They seem to have 2 jobs, but they believe it is impossible to come up with $2,200 to pay the mortgage.
• They are hoping that they won’t lose their house, but they aren’t making any effort to pay the mortgage payments and they’re not trying anything else to solve their situation.

Family Optimistic
The second family (referred to as Family Optimistic) is actually a female living with 2 dogs.  She is a notary who was helping mortgage companies approve loan documents.  Once the credit market and housing crisis started, no one could get loans and she was out of a job.  She knew she was getting into trouble at the beginning of the year and now she’s lost her 2-bedroom condo and just living in her car.  Even though her circumstances seem much worst, here’s what I observed.

• She didn’t try to delay the inevitable of losing her home.  Once she knew she was in trouble, she got rid of the house.
• She is out of a job and living in her car, but she found a part time job which gets her $500 a month.
• She is extremely optimistic, and truly believe that she will live through this crisis and find a job and get her house back.
• She is still genuinely thankful for everyone who donated money to her.

Thoughts on the Two Situations
Family Hope
It’s very difficult to understand why this family would think they could save their home when they aren’t even making payments.  To make it worst, they don’t really seem to know how many months they are behind on payments and what exactly the monthly mortgage payment is!

Larry asked them about the payment and after some mumbling (and probably guessing), they came up with a figure of $2,200. If that was true, why do they not think it was possible to come up with the payment with two incomes?  This family doesn’t even seem to be trying!

Family Optimistic
This lady on the other hand sounds more likely to bounce back from losing her home. Despite the fact that she has to sleep in her car every night, she is still extremely strong and optimistic about finding a job and one day living in a house again. She doesn’t know how she will do all that yet but she believes she will, she truly believes. I’m sure she will find a way, because she will keep trying.

What Can We Learn From This?
There are many things we can do to avoid situations like these.

1. It is absolutely necessary to have an emergency fund. We should setup an expense every month and pay the emergency fund account where we put money in and never take money out. If it was never needed, it means you were one of the few fortunate ones. There are many articles talking about having an emergency fund of 3 months of expenses but I think 6 months of your previous salary is much safer. With this fund, it is much better to be safe than sorry later.  Having an emergency fund would’ve helped Family Optimistic while she was trying to look for another job.
2. When times are good, you don’t spend the money but instead save as much as you can!  During times when money seems easy to come by, it is the best time to save.  I know first hand that it is very easy to spend more when large amounts of money are flowing our way, but life has its ups and downs and being prepared for the unexpected is always good.  If we don’t save when times are good, we may not have a chance when the tide shifts.
3. We need to be sensitive to our own financial situations.  Family Optimistic knew she was in trouble and moved on from her mistakes in a timely manner even though it meant her sleeping in a car.  In Family Hope’s situation, they still have a $300,000 house that they could sell and start over. This way, they can start saving up immediately for the down payment to another house in the future.  As it stands now, they are just furthering themselves into debt and delaying (or even eliminating) their chances to ever get a new house.
4. We absolutely need to cut our spending.  Family Optimistic is living off $500 a month while Family Hope cannot come up with $2,200 per month on two income.  As I mentioned yesterday, there are always ways to save more money!  Live frugally and be happy.
5. We need to act promptly with a sense of urgency!  Both of these families don’t seem to have the “I got to fix it now” attitude.  Family Hope should be cutting back on everything they are spending immediately and Family Optimistic should be out looking for another job instead of doing an interview with CNN!  The most responsible and sensitive person to our needs is ourselves.  Act immediately!
6. Believe that there is a solution!  Although Family Optimistic is in a much worst situation than Family Hope, she brings a feeling of optimism into her attitude which will propel her to find a solution to her problem.  I wouldn’t be surprised if she is back on her feet and sleeping on a comfortable bed in 6 months while Family Hope is sleeping in their cars by year end!

Final Words
Many situations can be avoided if we do some preventive actions.  In order to be trouble free, we need to be proactive instead of reactive.  If you don’t have one yet, setting up a family emergency fund for example would be a great first step.

Believing that a solution is achievable in any situation is also very important.  Never give up on yourself, even in a foreclosure situation.  It’s not the end of the world if you lose your home.  It just means you can start working towards your dream home again.

This is a guest post by The Shark Investor, who is out to help you become a remarkable investor.

The energy markets are like a slot machine. The bars go up and down, few lucky players collect the jackpot but at the end you always lose. Sure, the current oil prices may be a bit speculative, but they always rise long term and thrust deeper into our pockets. The energy expenses are already one of the main leaks in a household’s budget and that’s not going to improve in the future. It’s likely that this expense will keep increasing - directly and indirectly - in the prices of grocery and services.

What can you do about this? As a first step you can conserve as much energy as possible. Using less energy will cure not only your budget but also the planet.

However there is a lot more to do than just saving. Instead of looking at the energy prices as a problem, look for the opportunity they give you. By investing in your own energy sources you have a chance to achieve much better profits than by investing in stocks, mutual funds or real estate. Installing your own energy sources is not just a smart investment, but also gives you independence of the global economy factors - like of course the oil prices.

So what can you do and how much can you earn or save? Here are the most popular options:

Wind Turbines are one of the best options for single family homes. You can get 1 KW turbine for around $1,000 and use all the energy it produces during its entire life. Typically these energy sources pay off for 5-6 years and their life is 20 or more years. This means you can have completely free electricity for 15 years. This equals at least 7.5% compounded annual return on investment even if the electricity prices don’t change for 20 years, which you know will change for sure.

An additional advice: when looking for wind turbines, consider buying higher capacity ones. The energy that a 1 KW turbine generates is 4 times more than one 250 watt turbine, but the 1KW item is only around 3 times more expensive.

The residential Solar Panels are still less efficient, but if you live in a sunny place, they may work better than the wind turbines. The prices for 200 watts panel vary around $300 - $500. Such investment pays off for itself in 10 - 25 years depending on the number of sunny days in your area.

The best effect can be achieved if you combine turbines with solar panels. This way your system will be equally efficient in the summer when there is more sunlight and in the winter when usually there are stronger wings. An investment in such hybrid system pays off in 7-8 years given the current level of the energy prices.

The power of the Sun is better used for heating. Buying solar heating collectors can ensure you with hot water and even heating for the entire house. The prices of the solar collectors start from $400 - $500, the pay-off period can be just 3-4 years and their life is more than 20 years. This equals to 8% - 9% compounded yearly ROI even if the electricity and gas prices don’t change.

There are even more options you can consider. water turbines or biomass heating both can supply your household with very cheap energy for very long period of time.
Installing your own energy sources makes you greener, healthier and richer long term. Given all the horrible forecasts about the oil, gas and electricity prices it works both as a great investment and long term household insurance.

Lately, I have a hard time figuring out what to spend money on. It’s a strange feeling because my urge to buy something hasn’t gone away yet I can’t think of something to buy when I want to. I know I end up being able to keep my money in my bank account which is great but the urge to buy something is stronger each time that I’m afraid I will end up buying a huge ticket item one day.

I should correct myself. It’s not that I can’t think of something to buy. It’s just that the things I want to buy (LCD TV, car, house) cost so much that it’s outside my splurge comfort zone. I’m really afraid that one day the urge to spend money will be so great that I will just go out and get a new car.

Part of the reason that I’m feeling this way is because I have some money to splurge. Perhaps the stock market isn’t doing the greatest for many, but it’s been decent for me so far this year. The large influx of money every month through all my income streams have also contributed to my want (need) to splurge. To quote a famous movie, “with power comes responsibility”.

I’m beginning to appreciate the advantages of forced savings when someone buys a house. Even if it doesn’t make sense mathematically, the fact that home owners end up needing to be more frugal because they have a higher fixed expense (the mortgage payment) will force them to save more money.

In light of this new discovery, I should create a fixed expense for myself. Something I need to contribute to every month that I can put money in and forget about. 401k and Roth IRAs quickly come to mind but I’m already maxed out on those types of investments. A house is a good one as mentioned earlier but it might not be a good idea since I still feel that the housing market has ways to go before it will bottom, especially in Southern California where I live. Maybe I should look into commercial real estate, or perhaps investing in startups. I don’t know much about these two things, so I’m not sure if I can invest a small amount every month to a startup or something but that’s a place to start.

When I don’t feel rich, I should feel less of an urge to spend money.

(Photo from Shea Homes)

In a surprising move, my boss made a offer on a single family home in Aliso Viejo, CA today. In fact, he is interested in two homes in the same “new development tracts” and he told the sales lady that he is willing to buy any of the two depending on the deal that he gets. Although I feel like this is bad money management because we are far from the bottom of the current housing downturn, I can’t stop myself from thinking twice because I highly respect his judgement.

The offers my boss put in the houses listed at $1.6 million and $1.2 million were $1.35 million and $1 million respectively. He went in with his bank statements and told the sales lady that he can pay cash, and that he is ready and able to purchase by this month. The sales lady told him that she needs approval from management but my boss is quite confident that he will get the deal because those houses are already built and the builder is just sitting on them and losing money everyday that it sits unsold.

As I discussed numerous times before, I believe the housing market will be in a correction for at least another 6-12 months. I will eventually get a house, but I do not believe it is the right time yet. I feel that I will be able to get a better deal in 2009, which is why I haven’t pulled the trigger. In fact, we haven’t even looked at houses for a few months now.

However, after speaking to my boss and knowing what he’s done, it really puts doubts of my thesis. If the houses he put his offer in were listed at $1.8 million a year ago and he ends up getting it at $1 million, it is already a 44% decline from peak which is something I’d be happy with.

I know I shouldn’t see my house as an investment but it is going to be my single biggest purchase by far. I’m not trying to time the absolute bottom of the market but I’d hate to see myself paying for possibly $100,000 more than I need to pay as it will take me years to make up the difference.

What do you think? Fire away at the comments section, I really appreciate it.

This is a guest post from Miranda Marquit, who writes on personal finances and debt consolidation. Her website is mirandamarquit.com.

There is some debate about the reasons behind the current economic slowdown (I’m not saying recession — yet). One of the reasons given is the easiness with which credit has been obtained over the last 15 years or so. Indeed, it has become increasingly easy to get access to borrowed money. And, even with the credit market crisis showing us that some measure of inconvenience is needed, access to home equity is becoming more convenient.

We can use plastic for just about anything now, and that includes the home equity line of credit (HELOC). One of the relatively new introductions into the financial system is the HELOC debit card. Instead of taking money from your home equity line at the bank, all you have to do is swipe a debit card, and it accesses your balance. But this might be taking convenience a little too far. Consider:

• With home values falling, some HELOCs don’t have the same balances they used to. A debit card, which doesn’t show you the balance at the time you take the money, could lead you to overextend your account more easily, tipping you into the realm of negative equity.
• Convenient access to the HELOC only encourages more debt.
• Many people don’t think about their purchases when they can just swipe a card.

And don’t forget that even though these HELOC cards are attached to a “debit” account, you are still dealing with borrowed money. It’s really closer to using a credit card than it is to using a debit account. Only this account is attached to your house. If you get in over your head and can’t pay, it could mean foreclosure.

Before getting a debit card to access your HELOC, carefully consider the situation. Is now even a good time for a home equity line of credit? Especially one that’s so easy to access?

Welcome to the 146th Carnival of Personal Finance, Q1 Financial Advice Edition.

There are many things we can do to help our finances throughout the year and certain ones are time sensitive. Now that the first quarter of the year has officially past, let’s look at what we could’ve done during this time while enjoying the following great articles!

Editor Choice

There is no doubt that great financial articles help us gain knowledge and in turn provide a solid foundation for us to build our wealth on. Here’s a few of many around the blogsphere…

• FMF from Free Money Finance gives us 10 Things to Discuss Before You Get Married. Everyone should read this article!
• Paidtwice from I’ve Paid For This Twice Already knows that Budgeting On An Irregular Income is still possible and tells us how! Valuable advice!
• David from Money Under 30 presents The Annual Cost of Pet Ownership: Can You Afford a Furry Friend?, and says, “How much is that doggy in the window? More than you think…”. I don’t know anyone who would ever do a calculation like this before he/she buys a pet but maybe we all should!
• Silicon Valley Blogger from The Digerati Life gives us Smart Moves To Lower Your Health Care Costs! This is probably one of the areas that people most often overlook so remember to check this out!
• NCN from No Credit Needed presents Getting The Entire Family Involved With Managing Our Finances, sharing with us how his family manages finances together.

Credit

Did we do anything foolish during the holidays last year? If so, usually Q1 is spent thinking about our past and whether we can do anything to fix our credit. The worst of these might be those that bought that Lexus as a Christmas gift but did it on credit!

• Devray from Managing Personal Finance offers his knowledge on what the banks are up to when they offer us credit card and urges us to start our fight back against the banks’ policy.
• Bill from The Money Hacks tells us the ins and outs of Building a Credit History.
• Penelope from Our Fourpence Worth tells us that Closing Your Credit Cards Can Hurt Your FICO Score.
• Pinyo from Moolanomy gives us a little example to show us The Cost of Instant Gratification.
• JS from Smart Money Daily presents FICO Score Facts, Stats & Mysteries, and says, “Your FICO score can affect a lot of aspects of your life: everything from your chance having a decent retirement fund, to ability to get a job or find a place to live. Until a couple of years ago there wasn’t much known about the magical FICO number, but now information and mis-information is everywhere.”
• debt freedom fighter from Discover Debt Freedom presents 10 Facts Credit Card Companies Don’t Want You To Know.
• The Happy Rock from The Happy Rock presents Cash Back Credit Card Analysis For The Happy Rock.
• Credit Addict from creditaddict.com presents Beware of Falling Credit Limits.
• Hannah from The Penny Mine presents How to Get Great Credit in 2008.

Economy

The economy has certainly been the center of attention during the past quarter. With the current housing crisis and perceived lack of credit for business borrowing, everyone is thinking about recession. In this environment, it is even more important to increase our retirement savings and emergency funds just in case something happens!

• vh from Funny about Money is skeptical that the Economy is in good shape even though the stock market has been up in his piece - What next? Will corporate welfare and financial socialism save us from recession?
• The Financial Blogger thinks Canadian Banks are Going Bankrupt!! Not a good sign!
• Seb from Pinching Copper presents There are no victims in the housing bust, and says, “It seems like I can’t go a day without watching or reading another news story about how an innocent American family has become completely overwhelmed by debt.”
• Mom from Wide Open Wallet presents The pawn shops are thriving.

Money Management

Managing our money is timeless and probably one of the most important aspect of increasing our wealth. I personally take the “put everything in my bank/brokerage accounts and then do everything I can to not withdraw approach.” It’s worked for me and maybe you can try it too!

• Dorian from The Personal Financier tells us How to Avoid Crippling Your Retirement Funds. Avoiding a serious blow to our retirement funds is crucial to our future!
• Margaret from You Might as Well Burn $5 talks about the possibility of The $37 Latte!
• Jonathan from Master Your Card gives us more tips on How to Survive the Coming Recession!
• Jennifer Derrick from Saving Advice Blog presents 21 Days to a Negative Money Habit, and says, “It usually takes 21 days to form a habit - they can be both good or bad.”
• Beyond Paycheck to Paycheck presents The Great IRA Contribution Squeeze, and says, “You have until April 15 to make your 2007 IRA contribution. If you’re doing everything you can to come up with cash now, great. But wouldn’t it be nice to avoid the squeeze next year and still make a decent contribution? Here’s how.”
• Deamiter from Handling Finances presents Saving for Specific Goals at ING, and says, “ING Direct’s low costs allow them to offer multiple savings accounts. This is a great opportunity to better organize your money if you find your specific goals being lost in one large account.”
• FFB from Free From Broke presents Four Ways I Upgraded Out Of My Raises, and says, “I’ve gotten many raises in my work career but for a while my savings situation didn’t change. I’ll tell you why - I upgraded!”
• Bob from Christian Finances presents Money Merge Account, and says, “Looking at the pros and cons of money merge accounts - who should get one and who should steer clear of them.”
• Rio from Get Financially Fit presents How to pay off your home in half the time, and says, “Here is how to pay off your mortgage in half the remaining time.”
• Dan Meyer from Tick Marks presents Six Minefields Which Can Ravage Retirement Resources.
• Enoch Ko from The Wealth Accumulator presents Build an emergency cash reserve, and says, “In this post, I discuss why building an emergency cash reserve is important, and how to go about doing it.”
• Starving Artist from Indebted 2 You presents Phone Calls Saved Me $185, and says, “Don’t shrug your shoulders if you get an unfair fee–it’s your money. Here’s a walk through a few instances where I recently put a total of $185 back in my pocket. Live and learn.”
• retirehappy from My Retirement Blog presents Save to Retirement Fund or Emergency Fund?, and says, “Retirement fund or emergency fund?”
• livingalmostlarge from LivingAlmostLarge presents Can you stop the worry?.
• nickel from FiveCentNickel presents a quick list of The Best High Yield Online Bank Savings Accounts.
• mbhunter from Mighty Bargain Hunter presents When do you stop renting and buy?, and says, “Buying is usually cheaper in the long run, but does one have to buy right at the start?”
• Finance Girl from Finance Gets Personal presents Financial “I Never” with Finance Girl.

Frugality

With not many holidays in the first quarter, there shouldn’t be anymore excuses to be frugal! If there still are, acknowledge the fact that they are excuses and stop telling yourself that you cannot be frugal! Spend less, save more and be rich!

• Bryce from Save and Conquer understands that we are all envy and jealous when we encounter someone with more or better stuff that we have and shows us how to Hang with the Joneses.
• Amy from My Daily Dollars presents 5 Tips for a Wedding Under $5,000, and says, “Some ideas to have a wonderful wedding for less!”
• Chief Family Officer presents Creative strategies for coping with rising costs - Part Four: Unusual Ideas For Saving Money Without Reducing Your Standard Of Living, and says, “The key for coming up with unusual ideas for saving money is to think outside of the box - and specifically, outside of *your* box.”
• MoneyKing from The Money Kings presents Be Honest With Yourself About Exercise Equipment, and says, “We all know people that have dusty exercise equipment in their homes. This needs to stop, of course . . . in a major way.”
• Lily from The Honest Dollar presents 100 Ways to Cope with Inflation.
• RC from Think Your Way To Wealth presents Top Ten Ways To Aggravate Your Spouse or Significant Other With Your Frugality.

Investing

The past quarter was a rough one for most investors with the real estate and stock market tanking. Remember though, that the stock and housing market has an historic uptrend so stay calm and keep invested!

• Barb from Bond Index Funds advises us to invest in fixed income securities only through low cost bond market index funds.
• Mr Credit Card from Ask Mr Credit Card talks about investing too! Read about his explanation of the severe limitations of the index funds.
• Dividends4Life gives us some stats and tells us that “Hey, You Invest like a Girl” isn’t really a bad thing.
• Four Pillars from Quest for Four Pillars discusses whether or not We are Missing Out on Hedge Funds.
• Dividend Growth Investor explains his one rule of thumb - one dollar saved in the twenties supplies one dollar of income in the sixties.
• Dan at EverydayFinance from Everyday Finance presents Apparently, It Pays to Be Naughty - Vice Fund vs. Socially Responsible Fund, and says, “An unique view of fund performance with “Socially Responsible” investments vs. “Sin” stocks like alcohol, casino and beverage stocks. The results may surprise you!”
• Ryan Suenaga from Uncommon Cents presents Individual Stocks: Not Gambling, but not for Everyone Either.
• Smarty from Growing Money presents Stock Challenge April 2008.
• Kyle from Amateur Asset Allocator presents Forecasting Stock Returns Using Macroeconomic Growth Factors, and says, “Over time, corporate earnings comprise about 10% of GDP. We can use this as a basis to predict what future stock returns might be.”
• Shadox from Money and Such presents Stupid Financial Advice Revisited, and says, “Here’s one bit of financial advice that would have cost you 38% of your money in just over 5 months… What’s to be learned from such horrible advice?”
• The Dividend Guy presents High Dividend Payout Ratio = High Earnings Growth Rate, and says, “This post looks at that research to see how we as investors should deal with high and low dividend payout ratios.”
• Sid from The Money Well presents Investing In Your Children - Your Best Investment, and says, “The article is about investing money wisely in your children’s education and their future.”
• Bob McDonald from The Platinum Years Network talks about Alternative Investment You Should Know About.
• FIRE Finance presents Tax FREE Money Market Mutual Funds!

Finance

I applied for the CFA level 1 exam in December in Q1. What have you done to increase your financial knowledge in the past 3 months?

• The Skilled Investor presents Objective Personal Finance Answers Are Hard to Find.
• Bill from InsureBlog presents Zap!, and says, “The Repo Man has a new, high-tech gadget in his arsenal, to more quickly reclaim those new wheels. InsureBlog’s Bob Vineyard wonders if hospitals will also pick up on that tech. Ouch!”
• Raymond from Money Blue Book presents Traditional and Roth IRA Contribution Limits and Income Phase Outs.
• Paula from Monroe on a Budget wrotes about the Financial Lessons from To Kill a Mocking Bird!
• Mrs. Micah from Mrs. Micah: Finance for a Freelance Life presents What’s
  Wrong with Being Middle Class.
• Amanda from Value For Your Life presents The Upside of a Down Economy

Debt

Avoid this at all cost whether it’s Q1, Q2, Q3, or Q4!!! This subject is very serious and should not be taken lightly. Debt is never a good thing so remember to think carefully before getting into it.

• Start and Step presents My Snowflake Rules - Snowflake Step #6, and says, “My summary of how I’m going to use snowflaking to attack my debt.”
• Jacob from All About The Ben presents How To
  Eliminate Your Credit Card Debt, and says, “A step-by-step plan for eliminating costly credit card debt.”
• Andy from Tight Fisted Miser presents The CCRA and Law School Loan Forgiveness.

Saving

Saving is the first step to wealth. Most people don’t contribute to their IRAs until the first quarter because the deadline for last year’s contribution is in April. These people usually don’t end up being able to maximum their contributions because they procrastinate!! So moral of the story? Save early and often!

• Penny Nickel from Money Values is looking at I Bonds for protection against inflation!
• Faron from Financial Learn tells us the Importance of Teaching Your Kids to Save!
• Kimberly Palmer from Alpha Consumer presents Smart Splurges and Saves.
• Foxie from Dreaming of Ferraris presents Compromising Spending and Saving, and says, “It’s important to know just how much you have for both spending and saving. It’s also good to remember to allocate the savings in a way that will help you, wherever you financially stand.”
• Aaron Stroud from On Financial Success presents Can we afford college, and says, “A post answering a reader’s question about how to pay for kid’s college expenses.”
• PT from Prime Time Money presents Your Emergency Fund Is So Big…, and says, “Examining the correct size of short-term emergency savings.”
• Jennifer from Getting Ahead talks about 10 Easy Ways to Save Money.
• Super Saver from My Wealth Builder presents Become A Millionaire.
• Andy S from Saving to Invest presents Excessive Taxes and Fees on my Cable/Phone Bill, and says, “Potential savings from high taxes and services fees on your cable and phone bills”

Real Estate

The housing market continues to be weak. I’m in Southern California and there are so many foreclosures around here and it’s not a pretty scene at all! With so many loans changing interest rates in the coming months, there doesn’t seem like there is an end of declining house values in sight.

• Kevin from No Debt Plan critiques about “My First Place” TV show and he also offers advices for first time home buyers!
• Dan Melson from Searchlight Crusade presents The Difference Between Note Rate (APY) and APR.
• Debbie from American Consumer News presents Five Ways to Increase the Value Of Your Home For Under $100.
• Frugal Babe presents The Cost Of A Bigger House, and says, “There’s been a lot of effort and a some
  money involved, but it’s a whole lot less expensive than upgrading to a bigger house.
• Joe from Tallahassee Florida Real Estate Blog presents Creative
  Home Selling - Taking A Lesson From Wall Street, and says, “In today’s tough real estate market, where Sellers seem to far outnumber Buyers, it is important to have a complete “bag of tools” when you desire to sell a home in Florida.
• Millionaire Mommy Next Door presents How to Make Money Without Ownership: Take Advantage of the Housing Slump, and says, “As the number of vacant homes for sale surges, creative people, donning their thinking-caps, see dollar signs.”

Budgeting

The beginning of the year is a great time to examine the budget you made last year and make adjustments to the yearly spending limits! Once you come up with the budget, remember to stick to it!

• Mr. Debtbeater from DebtBeater lists 3 Surefire Methods to Paying Your Bills On Time. The way I make sure the bills be paid on time is to pay them when I receive notice of them!
• Shawna from Bumblefucked presents The importance of having wiggle room in your budget.
• Denina from tips and tricks presents April Flowers.

Career

Congratulations if you are one of the lucky people that got a bonuses during the beginning of the year. Remember that the company gave you the bonus because of your good performance so repay the company by working hard! Drill it into your minds that hard work starts in Q1 and extends all through the year!

• tehnyit from Cheap as chips presents You are only worth at market value, and says, “An article on how your salary is determined by market value, not by how good your talents are.”
• Will from Your Finish Rich Plan presents Are You Gaining The Most You Can From Your Current Job?, and says, “This article focuses on making people go beyond the simple per hour rate they’re being paid. It helps them put a dollar value to other benefits they might be entitled to.”
• Debbie from American Small Business News presents Open
  Communication in the Business Environment.
• Joe D from Know The Ledge presents Being A Team Player Only Gets You So Far.
• Lisa Spinelli from Greener Pastures presents IBD’s 10 Secrets to Success.”

Taxes

If you still haven’t filed your taxes yet, you only have a few more days to do so! Don’t be late because you are only giving the government a longer loan!

• Broke Grad Student talks about something that’s closely related to him in Tax Breaks for College Students and Recent Grads.
• Madison from My Dollar Plan presents IRA Recharacterization: What, Why, How and When?, and says, “Just in time for taxes this week!”

Other

• Mr. B from Interesting Money suggests The House Rabbit as Nature’s Economical Pet! Own a pet and meet your budget!
• Kris from Cheap Healthy Good presents Touchy Subjects: Confronting Loved Ones about Weight and Money Problems
• Freethinker from Freethoughtmovement tells us what must be one of the worst experience with a financial advisor as you can get in this world.
• Aryn from Sound Money Matters presents Surprise! Your Car Gets Worse Gas Mileage Than You Thought, and says, “After the new gas mileage rating system was released, I discovered that my car doesn’t get as many miles per gallon as I believed, and new cars don’t fare much better.”
• Junger from Online Savings Blog answers the question of Why an iPhone is a Worthy Investment. Go iPhone!
• Clint from Accumulating Money presents Educating Young Children about Money.
• FT from Million Dollar Journey presents Sustainability and Financial Health, and says, “How we can do things financially to help the sustainability of the earth.”
• Lazy Man from Lazy Man and Money presents Budgeting for a Tank and I say we should all chip in!
• GBlogger from Can I Get Rich On A Salary presents Success Factors of the Really Rich?, and says, “What can we learn from reading and comparing wealthy people?”
• BeThisWay from Are You Going To Be This Way the Rest of the Time I Know You?
  presents Two Steps Forward, One Step Back.
• squawkfox presents Top Ten 80s Songs About Money, and says, “Here are the top ten 80s songs about money”
• Ryan Taylor from Millionaire Money Habits presents The Real Life Money Tree, and says, “Money trees do actually exist, and it greatly boost your earnings, increase investment funds and potentially build a multi-million dollar source of income. Learn how to start growing a money tree by reading the rest of this article.”

Final Words

What a great week of articles and thank you all for participating and reading! Enjoy the post which will start us off the the second quarter running! If you still have energy to read more, check out my submission for this week!

• Be Human and Buy a Home!