When Saving Money Goes Against Your Morals

by David@MoneyNing.com · 17 comments

saving money and morals

The other day, my friend told me she called customer support and complained about their service because she can get a 15% off coupon every time she does this.  In many levels, I felt that it was wrong but couldn’t exactly point out to her at the time why I felt that way because she did get bad service.  Was it because of her motivation for the call or was it more because it’s not the first time she’s done this?

An even more interesting (and complicated) question to answer is whether my friend felt it was wrong to do it.  If she did, does it make the decision to call worst?  Was it because she just didn’t know that it was wrong or was she just not thinking about whether it was wrong or not?

What about those people that return a gift that they receive even if they don’t have a receipt?  Before you answer yes, what if they have a gift receipt?  Why does this change things?

Let me ask you this:

[poll id=”18″]

Don’t worry, the poll is done anonymously so just answer truthfully.

What do you think?

Why Renter’s Insurance

by David@MoneyNing.com · 12 comments

get renter's insurance now

When I rented the new apartment back in February, one item that surprised me was renter’s insurance.  I never purchased something like this before but it certainly caught my attention when I was told that it would be mandatory.  At the time, I contemplated on the extra $18 dollars a month and I decided to get it for the peace of mind but I would never looked into it if it wasn’t mandatory.

Why Renter’s Insurance

I just saw an article today stating that most people don’t buy renter’s insurance even if they are required. If you are one of them, read about why you would want to reconsider.

Inexpensive for the Value It Provides
Don’t get me wrong. $18 every single month is money I would rather save, but the same amount can get as much coverage as $30,000 just in case anything happens. You are also getting a peace of mind because having to replace everything you’ve bought in the apartment is a major financial setback.

Liability
Renter’s Insurance doesn’t just cover replacing your belongings. Since renters are responsible for problems they create including accidents, having insurance allows them to pay for unexpected charges just in case something bad happens. Can you imagine having to pay for all the appliance and remodel of the whole kitchen if you have a fire caused by putting the wrong container in the microwave?

What You Need to know About Renter’s Insurance

Read the Fine Print
Different companies cover different things. Most cover fire and theft but many don’t cover water so don’t just look at the monthly price as water leaks are a major cause of lost in apartments (especially in older ones).

Also check on what type of belongings the policy covers because some don’t cover items like high priced jeweleries.

Liability Insurance
This is important because someone can sue you if they were injured from something that started in your apartment (e.g. a fire). Better safe than sorry.

Belongings
Some policies will cover you to replace all your belonging while other policies will only give you back the cash value of how much these things are worth. Obviously, you would want to get a policy that will replace the items because of depreciation.

Do Your Homework.
Don’t forget to look around and compare different companies that want your business. As stated above, companies provide different rates as well as different coverage so make a chart and start comparing.

In Closing

If you rent an apartment right now and never thought about renter’s insurance, start now and examine whether it makes sense for your circumstances. It’s an additional expense that you didn’t have before, but I strongly recommend you to at least give it serious consideration.

Buy an Investment Property or Dividend Yielding Stocks

by David@MoneyNing.com · 22 comments

 

housing property is a good investment

As you may recall that a few weeks ago, I asked whether I should buy an investment property in this housing market given that I didn’t even own a primary residence yet.  There were quite a few very insightful comments left by my readers and first of all, I’d like to thank you for all your kind responses.

I haven’t decided what I should do yet but I went to see an investment property with my coworker over the weekend and it got my blood pumping because he ended up putting an offer in for one of the properties we saw.  Here are the details:

  • 1411 sq. ft, 2 stories town home
  • 3 bedrooms / 2 bathrooms
  • $187 per month HOA
  • $2000 per year mello roos (basically like property taxes, only non-tax deductible)
  • 1.03% property taxes
  • $1,500 a month rent can be expected for the property
  • My coworker offered $170,000 for the house

The agent told us that there were already a few offers higher than $170,000 for that particular property, but my friend still has a chance to get it since he can pay cash for it while the others all needed a loan.

Witnessing this got me thinking much more about the investment property idea I’ve been kicking around so I did some calculations comparing the return on buying this investment property versus using the $170,000 to buy a dividend paying stock, say Altria (MO).
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Where to Roll Over My 401k

by David@MoneyNing.com · 21 comments

 

 

 

Now that I decided to roll my 401k into a traditional IRA, the next step is to figure out the company that I should roll the money into. As the funds will likely remain in the same place until I’m past 60 years old, it is a decision that I should carefully analyze. I managed to narrow the choices into three and here are some pros and cons of each.

E*Trade
As many of you know, I’m a customer of E*Trade Financial. Currently, I have a brokerage account, Roth IRA as well as an online savings account with them. Adding the traditional IRA account is only natural and it will also allow me to see all my investments in one screen, cutting down on administration.

On the other hand, E*Trade’s big loan portfolio and the current mortgage crisis could possibly (amid a very small chance) mean disaster for the brokerage firm one day. If I look at the situation on a strict risk analysis basis, I should open an account elsewhere. (Note that I know about being able to recoup the money through insurance and protection but why put yourself through trying to get back 5 different accounts equaling your life savings all at the same time?)

Vanguard
Vanguard index funds are the most popular way of index investing. By going to a reputable name like Vanguard for my traditional 401k, I cannot really go wrong. I don’t have much experience with them but I’m extremely confident that I will be happy with their service (the low fee index funds also doesn’t hurt).

My concern with putting my 401k into a Vanguard index fund is that I may not be maximizing my potential reward by being too conservative. In general, index funds are a pretty safe way to capture gains from a long term upward movement in the stock market. Since my 401k is not redeemable until I’m 59 years and a 1/2, this means that I won’t need the money for another 32 years. With this type of time horizon, perhaps funds/stocks with bigger price movements than an index fund are more suitable for me.

Wells Fargo
Even though they have ridicules fees, this option for me is not out of the question. I’ve been so impressed with Wells Fargo through banking with them for the last 5 years that I might be willing to play extra to have my money invested with them.

The only negative I see with this is really the cost. They charge something like $75 per year for maintaining the account and this just might be too much.

What Do You Think?

If you were me, what would you do?

6 Neat Ways to Build Your Emergency Fund

by David@MoneyNing.com · 28 comments

Some of us are creative thinkers, especially when it comes to making excuses about saving for our emergency fund. From the weak economy to the falling dollar to high gas prices, there are new ones every day. To break the trend of using our creativity to think of excuses, I challenged myself to instead think of some not so obvious ways to build an emergency fund. I actually had fun doing this exercise but what’s more important is for those struggling to build an emergency fund to try some of the tricks listed below. Here they are:
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5 Things to Reconsider (Consider) About Your (New) Job

by David@MoneyNing.com · 12 comments

I have seen it time and time again.  My dad changing careers because of $50 a month, my friends switching jobs for a better pay and my old classmates telling me they demanded a higher salary or they consider quitting. Let’s face it. Money is an important part of our job and without it, we wouldn’t be grinding the 9-5.

Stop the “Show Me The Money” Attitude

Money, however is not what we really want. Money is what we need, and most people are surprised to find that we really don’t need that much of it. I recently decided to give up a 6-figure salary to go full time blogging. While it was a decision that will force Emma and I to cut back on some of the luxuries we enjoyed, we will also be much happier. We won’t be driving nice cars, living in a mansion and watching hired gardeners work on our lawn. Instead, we will be spending more time walking to get our groceries, figuring out a way to even get a house and working on our garden together.

At first glance, it would be a wrong decision to quit but what Emma and I gained are precious moments of being together. As a salesperson in my current job, it was hard for me to stay at home much. I was traveling 40% of the time, and I would be so tired from all the timezone differences and lack of sleep to enjoy the rest of the time that I was home.

Consider These Points About Your Job

I know that many people are working solely because of the salary, so this article is for you. Consider the following about your job to see if it’s the right choice for you.

Out of City Travel
Some jobs just require traveling.  My job would be great for a bachelor that likes being in different cities but it’s not so great for someone who wants to start a family. Don’t underestimate the disadvantage of not being at home.

Location and Commute
There’s someone at my office that drives 130 miles to and from work each day.  He typically spends at least 2 and a half (if not more) hours every day on the road.  On top of his 9-10 hour work days, he only has time to drive, work and sleep for at least 5 days out of the week.  He’s not alone though, the record for longest commute is 186 miles, each way..

Work Environment
There are companies that are fun to work for and there are others.  Work environment should be about what you are comfortable with and not what you can tolerate.  If it’s a new job, your first instinct is usually the right one so learn to trust it.  You can also get a sense during the interview and remember to ask your interviewer to give you a tour of the company to get an even better idea before you commit.

Coworkers that You Directly Interact With
Many companies will have employees that are less than stellar and often become blockers. These people usually cause more grief than relief for yourself. Either find a way to:

  1. Teach them to be team players
  2. Get rid of them
  3. Work yourself out of any interactions with them
  4. Polish your resume and start looking for another job

Every time these people stand in the way, you are either spending more time at work or being upset about it.  Absolutely unnecessary.

The Boss
The supervisor and everyone above the chain of command (including head of the company) can make your life in the corporate world a delight or a train wreak.  It’s has to do with the rules, the instructions and the guidance.  If you don’t respect your boss, it’s time to get a transfer or find a new place to practice your expertise.  It’s as clear cut as that.  You don’t need the stress and your family certainly don’t appreciate it either.  Every excuse you give yourself is only because of the money and you know it.

Passion for What You Do
Unless you have passion for what you do, it’s very hard to enjoy your day-to-day job.  Being passionate about your work is also the needed drive for you to succeed.  You know if you are passionate about something, so if you are wondering, then the answer is obvious.

Go find something you are passionate about, and live a happy life instead.

Do What’s Best For Your Family

There’s always a choice and it is entirely yours.  It’s not always about the money, or so they say. This time, they are right.

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