Free Money Finance

The Smartest Advice Ever

I'm a sucker for "the best money advice you've ever received." There's just something about a lot of good, solid financial wisdom in a small number of words that I love. In fact, I've run several series on the topic including the following:

• The Best Financial Advice I Can Give

• The Best Financial Advice I Can Give, Blogger Edition

• The Best Financial Book I've Ever Read

• The Best Deal I Ever Got

• Best Advice: Financial Advice from Successful People

• Best Money Post I've Ever Written

• Best Financial Tips from FMF Readers

• The Best Financial Advice I Ever Got: Essence Edition

• Bankrate Best Advice

So when I saw that Money magazine had a series on "the smartest advice I ever got", I knew I had to post on it.

They asked 40 "great minds" for their smartest advice. Here are a few of my favorites. The first is swear off debt:

Borrowing money is like wetting your bed in the middle of the night. At first all you feel is warmth and release. But very, very quickly comes the awful, cold discomfort of reality.

Ha! I LOVE the picture that that paints!

The next is live within your means:

Save your money first and get used to living on what's left over.

Exactly.

The final two are similar. There's you can't fight the market, so join it:

My school experiences taught me to buy index funds. As far as I'm concerned, they're the only starting point for an individual investor. You can't control market risks, but you can control costs.

And the less you pay, the more you keep:

It's hard to be certain of anything in our uncertain financial markets. But I feel very confident about one piece of advice: Minimize your investment expenses. The less you pay in mutual fund fees, brokerage costs, sales fees and taxes, the greater your net return.

So true -- costs matter (and they're fixed.) That's why I like index funds.

What the smartest piece of financial advice you've ever received?

Money Rules of Thumb

MSN lists 16 money rules of thumb. I've never heard of many of them -- though it's not clear whether or not the author is saying these are just hers or are ones we all should know. Either way, I wanted to share a few of my favorites with all of you and give some additional thoughts as well. Here goes:

Retirement: "Save 10% for basics, 15% for comfort, 20% to escape." This rule of thumb works pretty well if you start to save for retirement by your early 30s. Saving at least 10% of your income ensures you won't be eating pet food. Fifteen percent should get you a more comfortable living, while 20% gives you a shot at an early retirement (and yes, you get to count employer contributions as part of your percentage). Wait just a decade to start, though, and you'll need 15% for basics and 20% for comfort; an early retirement may not be in the cards.

I don't know many people who are saving 10% and 20% seems almost unrealistic for many. That said, we save about 30% of our living expenses per year (our expenses are far below our income.) Applying the guideline above, if we keep this up and maintain our standard-of-living (don't expand it), we should be able to retire early.

Also note the importance of the power of compounding in this rule.

Student loans: "Your total borrowing shouldn't exceed what you expect to make your first year out of school."

This is ok for a general rule as it attempts to tie costs with expected income. This is exactly what I recommended in How to Get the Most Financially Out of College.

Credit cards: "If you carry a balance, look for the lowest rate. If you don't, get rewards at least equal to 1.5% of what you spend."

You can (and should) do much better than 1.5% back. If you like cash back (and who doesn't like cash?), you can get 2.6% cash back by combining the Blue Cash from American Express card and the Chase Freedom Cash Visa Card.

And I don't have to say what I think of carrying a balance, do I? ;-)

Financial flexibility: "You need to be able to get your hands on cash or credit equal to three months' worth of expenses."

As she notes, cash is better but not everyone's there at this point in their lives (though they should be working towards it.)

Insurance: "Cover yourself for catastrophic expenses, not the stuff you can cover out of pocket."

Yes, yes, yes! This is why we have high deductibles. We wouldn't make a claim unless it was a substantial expense, so why pay extra for a low deductible? Note: we also have adjusted our emergency fund up a bit to be able to cover a big outlay in case we need to come up with a high deductible payment.

Life insurance: "Those who need it typically need five to 10 times their income."

Good enough for a rule of thumb, though I'd prefer to see "their living expenses" replace "their income." Though most people probably live in a world where living expenses equal income, so what's the difference?

The piece also offers some thoughts on having a mortgage, but I prefer my formula for buying a house.

What's your take on these money rules of thumb?

Best Advice: Dave Ramsey

I've written several "best advice" pieces (see my best advice category for details) and love to hear short takes on what financial "experts" view to be their best piece of financial advice. Here's the last bit of advice from a Bankrate article on best personal finance advice. It's from Dave Ramsey, author of "The Total Money Makeover":

"A friend of mine who is a billionaire told me that he reads a book to his grandkids and I should read that book. The book is 'The Tortoise and the Hare.' Every time he reads the book, the tortoise wins. Slow and steady wins the race, and consistency matters. Get-rich-quick never wins.

"If you try to impress other people, you'll lose the wealth race, as well," Ramsey says. "It sure did give me a nice metaphor. It's a good reminder to somebody like me to keep me in check. It has implications for debt, for mutual funds, for budgets -- an overlay for everything."

That's funny. Dave gave me a completely different answer to this question. Huh.

But regarding the advice he gives above -- it's solid. If you can forget what others are doing (mostly spending) and concentrate on what you want to accomplish, you'll be far better off financially.

What about you? What do you think of Ramsey's advice?

Click here to read part 1 of this series.

Best Advice: Peter Navarro

I've written several "best advice" pieces (see my best advice category for details) and love to hear short takes on what financial "experts" view to be their best piece of financial advice. Over the couple several days, I'll share some of these from a Bankrate article on best personal finance advice and give you my comments on them. Today, we'll hear from Peter Navarro, associate professor of economics and public policy at the University of California, Irvine:

"Take every piece of advice you get from any investment adviser with a barrel of salt. Most are trying to sell you things that you probably don't need or want. Think for yourself."

Navarro says he learned that lesson after a bad experience with a financial adviser. "I lost some money, then took control and never looked back," he says.

Oh, yeah. This guy's speaking my language.

For my thoughts on the same issue, see these past posts:

• Many Taxpayers Get Burned by Inept or Crooked Preparers

• The Richest Man in Babylon: Get Advice from Someone Who Knows What He's Talking About

• Make Sure Your Financial Advisor is Not a Loser

• FMF Speaks: My Thoughts on Using Financial Planners (Or "Why I Don't Go to a Fat Doctor")

• Comments: FMF Speaks: My Thoughts on Using Financial Planners (Or "Why I Don't Go to a Fat Doctor")

• MND: How to Choose a Financial Advisor

• MND: Operate Your Household Like a Business when Hiring a Financial Advisor

• MND: Hiring the Wrong Financial Advisor is Bad for Your Net Worth

Certainly there are times when you need a financial professional. For instance, I use a CPA for taxes, a lawyer for estate planning and an insurance agent for disability insurance. But much of personal finance is easy to learn and implement and, I believe, better off left to you.

What about you? What do you think of Navarro's advice?

Click here to read part 8 of this series.

Click here to read part 1 of this series.

Best Advice: Rieva Lesonsky

I've written several "best advice" pieces (see my best advice category for details) and love to hear short takes on what financial "experts" view to be their best piece of financial advice. Over the next several days, I'll share some of these from a Bankrate article on best personal finance advice and give you my comments on them. Today, we'll hear from Rieva Lesonsky, co-author of "Start Your Own Business":

Lesonsky's best advice "was from the owner of our magazine, Peter Shea," she recalls. "He said, 'Housing prices have gone up -- get a second mortgage and pay off your debt.' I did, and I'm debt-free."

You know how I like this advice. :-)

I've been debt free (including my mortgage) for ten years now. It's been great to be without any sort of debt and I'm kind of dreading the fact that if we buy a new house, it's likely we'll have a mortgage at least for a short bit of time. It's not something I'm looking forward to.

What about you? What do you think of Lesonsky's advice?

Click here to read part 7 of this series.

Click here to read part 1 of this series.

Best Advice: George Kinder

I've written several "best advice" pieces (see my best advice category for details) and love to hear short takes on what financial "experts" view to be their best piece of financial advice. Over the next several days, I'll share some of these from a Bankrate article on best personal finance advice and give you my comments on them. Today, we'll hear from George Kinder, Certified Financial Planner and author of "The Seven Stages of Money Maturity":

"It's about the meaning, not the money. If my investing is not really deeply tied to what I think is most important in my life," he says, then, "the asset allocation, the estate plan, the retirement plan might as well be thrown out the window."

His best advice: "Hire a Registered Life Planner (a financial planner with additional training in helping clients identify and reach life goals) to help you through this," Kinder says. "Nobody can do this themselves."

A life trainer, he says, "is trained in how to elicit from a client what is meaningful and how to keep their eyes on the prize."

Huh?

I never thought three sentences could ever bias me against an author and his book. But I was wrong. This seems like worthless drivel to me.

Granted, you need your money to work towards what you want it to achieve, but this advice feels more like Suze Orman's "respect your money and it will respect you" psycho-babble than any sort of meaningful advice.

What about you? What do you think of Kinder's advice?

Click here to read part 6 of this series.

Click here to read part 1 of this series.

Best Advice: Robert Kiyosaki

I've written several "best advice" pieces (see my best advice category for details) and love to hear short takes on what financial "experts" view to be their best piece of financial advice. Over the next several days, I'll share some of these from a Bankrate article on best personal finance advice and give you my comments on them. Today, we'll hear from Robert Kiyosaki, author of "Rich Dad, Poor Dad":

"My rich dad gave me lots of advice. One of the better ones: There's good debt and bad debt. Bad debt is debt you have to pay for and makes you poor. If I use credit cards to buy new shoes it makes me poor. Good debt makes me rich and someone else pays for it."

One example: "I'm closing on a $17 million property and financing $14 million. That $14 million is good debt. It makes me richer every month by putting $20,000 in my pocket."

Ok, work with me on this one.

So he pays $17 million to make $240k. That's a return of 1.4%. Not good.

But let's just say he really pays on the $14 million he borrows. Still, that's only a 1.7% return.

Now let's give him the biggest break and say he only paid $3 million to earn $240k a year. Now he has a return of 8%. Not bad, but he's not getting fabulously wealthy here. Or am I missing something?

What about you? What do you think of Kiyosaki's advice?

Click here to read part 5 of this series.

Click here to read part 1 of this series.

Best Advice: Neale Godfrey

I've written several "best advice" pieces (see my best advice category for details) and love to hear short takes on what financial "experts" view to be their best piece of financial advice. Over the next several days, I'll share some of these from a Bankrate article on best personal finance advice and give you my comments on them. Today, we'll hear from Neale Godfrey, author of "Money Doesn't Grow on Trees: A Parent's Guide to Raising Financially Responsible Children":

"Step away from the television and the magazines. All they serve to do is show you how stupid you are because you've missed whatever they're talking about. It's old news. It's already happened."

The advice came from her financial adviser, she recalls. "I used to call him and say, 'Why didn't we ...?' He'd say, 'Stop it. Step away from the television. It's done.'"

She realized that he was right. "By the time you see it or read it, it's done; it's happened," Godfrey says. And if you listen and follow the hot news, she says, "You will buy at the top and sell at the bottom -- exactly what you're not supposed to do."

A couple thoughts from me:

1. I'm certainly with her when it comes to ignoring what the mainstream media tries to push on us -- especially when it comes to investing.

2. That said, I do watch TV and partake of much in the media. I could likely save a ton of money if I did ignore them altogether.

What about you? What do you think of Godfrey's advice?

Click here to read part 4 of this series.

Click here to read part 1 of this series.

Best Advice: Wayne Dyer

I've written several "best advice" pieces (see my best advice category for details) and love to hear short takes on what financial "experts" view to be their best piece of financial advice. Over the next several days, I'll share some of these from a Bankrate article on best personal finance advice and give you my comments on them. Today, we'll hear from Wayne Dyer, author of "It's Not What You've Got: Lessons for Kids on Money and Abundance":

The lesson "for me was, first, pay yourself," Dyer says.

"When you get your paycheck, take a percentage -- between 10 percent and 30 percent -- and put that away," Dyer says. "You'll be rich enough to be financially independent within a short period of time."

Think this guy has a way of over-stating things? ;-)

I agree that you should save a good amount of your pay. I've done this for years. I fully fund my 401k and have savings to boot on top of that.

But to say "You'll be rich enough to be financially independent within a short period of time" is an over-statement for sure. I've been saving a ton for a couple decades now, and while I'm doing well, I'm not financially independent by any means.

What about you? What do you think of Dyer's advice?

Click here to read part 3 of this series.

Click here to read part 1 of this series.

Best Advice: Gary Belsky

I've written several "best advice" pieces (see my best advice category for details) and love to hear short takes on what financial "experts" view to be their best piece of financial advice. Over the next several days, I'll share some of these from a Bankrate article on best personal finance advice and give you my comments on them. Today, we'll hear from Gary Belsky, co-author of "Why Smart People Make Big Money Mistakes and How to Correct Them":

Be afraid when people are greedy, and greedy when people are afraid. It's basically, "Buy low and sell high." In general, I've been doing better than market averages when I've been handling my investments. I've basically done that by being conservative when the market is frothing and aggressive when the market is down.

I agree with him 100%. Moving against the flow is one of the great ways to make money in America.

How do I put this into practice? A couple ways I can think of right away:

1. I've recently bought MORE shares in index funds when the market has dropped and people are panicked. For details, see Going Against the Flow and Now's a GREAT Time to Invest.

2. While many are moving away from housing/struggling with it, we're looking at the downturn as an opportunity to buy. Of course, having no debt and a lot saved up for a great downpayment or outright property purchase puts us in a good position to take advantage of this opportunity.

What about you? What do you think of Gary's advice?

Click here to read part 2 of this series.

Best Financial Advice from Robert Kiyosaki

A few months ago I wrote a piece for a national magazine and was able to "interview" (via email and via their representatives), some of the top names in personal finance today and ask them what their best piece of financial advice was. Here's the response I received from Robert Kiyosaki, author of Rich Dad Poor Dad and Before You Quit Your Job:

The single best piece of advice I can give is this: Be careful what financial advice you listen to. Most financial advice—such as “save money,” “get out of debt,” “invest for the long term” and “diversify”—is fine for the middle class or the poor. It’s not good advice if you want to be rich because it is obsolete advice. For example, in 1971 the U.S. went off the gold standard and the U.S. dollar became a currency and . . . currencies are designed to lose money. That’s why today, “save money” is bad advice. Remember, your mind is your greatest asset, so be careful what you put into it.

FYI, I wasn't 100% digging this advice -- if you know what I mean.

For those of you interested, here's my best piece of financial advice.

Best Financial Advice from Jane Bryant Quinn

A few months ago I wrote a piece for a national magazine and was able to "interview" (via email and via their representatives), some of the top names in personal finance today and ask them what their best piece of financial advice was. Here's the response I received from Jane Bryant Quinn, the author of Smart and Simple Strategies for Busy People:

All of the best investments are the simple ones. If you’re shown a gee-whiz financial product with a lot of bells and whistles, you can be sure of two things: You don’t need it and it’s overpriced. You can get better results with something plainer and lower cost. What’s simple? Term life insurance. Automatic savings plans, like company 401(k)s. The mutual funds called lifestyle funds. A college savings plan bought directly from your state. Do I use these ideas myself? You bet!

For those of you interested, here's my best piece of financial advice.

Best Financial Advice from Dave Ramsey

A few months ago I wrote a piece for a national magazine and was able to "interview" (via email and via their representatives), some of the top names in personal finance today and ask them what their best piece of financial advice was. Here's the response I received from Dave Ramsey, radio talk show host and author of The Total Money Makeover, Financial Peace and More Than Enough:

The key to getting your money to behave is to bother. Caller after caller to my radio show have gotten themselves into financial messes because they were going through life like Gomer Pyle on Valium and not paying attention to what their money was doing. But people do smart things if they just bother! Get on a plan and stick to it. I learned through my own financial mistakes that the key to financial success was making the guy I shave with behave. Winning at money is 80 percent behavior and 20 percent head knowledge. It’s not about sophisticated financial theories; it’s about taking control. I won with money and you can too. Like Nike says: “Just do it!

For those of you interested, here's my best piece of financial advice.

Best Financial Advice from David Bach

A few months ago I wrote a piece for a national magazine and was able to "interview" (via email and via their representatives), some of the top names in personal finance today and ask them what their best piece of financial advice was. Here's the response I received from David Bach, the #1 New York Times bestselling author of Start Late, Finish Rich and The Automatic Millionaire:

I’m often asked what’s the secret to being rich. If I could only give a person one piece of advice when it comes to money it would be this—buy a home. You simply cannot get rich renting. According to the Federal Reserve, the average renter in America today is basically broke (worth less then $5,000). On the other hand, the average homeowner is worth more than $171,000. That’s 34 times more than a renter. The simple truth about building wealth in America is this: “Nothing you will ever do in your lifetime will realistically build you as much wealth as buying a home.” Don’t believe me? Go ask your parents and grandparents right now if their home was their best investment. The answer is almost always a resounding “yes.” My grandmother bought her home for $10,000 and, when she went to sell it a few years ago, she sold it for more than $400,000. I remember as she was packing up the house she turned to me and said, “If only we’d bought a few more houses and rented them,” we would have really been rich. If you’re renting right now, start saving to buy a home. It’s the smartest investment you’ll ever make.

For those of you interested, here's my best piece of financial advice.

The Best Financial Advice Ever

Money Central has an article on the best financial advice ever. It's a compilation of personal finance advice from readers as well as well-known personalities. Here are their words of wisdom along with my comments:

"No matter how much or how little you make, always save a little bit."

"Paying yourself first" is one key to a solid financial future, though I recommend paying yourself second.

"Save hard for the first 10 years of your married life."

I've never heard this advice stated this way, but I believe its main message is to save early in life and let the power of compounding make you wealthy.

"Know the difference between needs and wants."

This is a good one -- it's the key to spending less than you earn (which is my personal best piece of financial advice.)

"Think of the true cost."

Whenever you buy something, there are usually additional costs involved -- maintenance, replacement parts and on-going expenses of some sort. Many people only consider the initial cost and (maybe) a small portion of the subsequent costs.

The biggest area where people misjudge the true cost is in the area of pets.

"Buy quality."

I usually check Consumer Reports and buy the best item I can get for the money. When I don't do this, something bad usually happens.

"If your outgo exceeds your income, your upkeep will be your downfall."

Another vote for spending less than you earn.

"Don't pay interest on anything that loses value."

Like a car. Ouch.

"Don't co-sign a loan."

Unless you want to pay it all off. That's what you're saying you'll do when you co-sign a loan.

"If you need more money, then go out and make more money."

I'm currently thinking a lot about this lately. Here are some money making ideas for those of you who can't wait for me to share some ideas over the coming weeks.

One final thought and announcement: Almost a couple years ago, I posted pieces that listed The Best Financial Advice I Can Give (a list of suggestions by top money experts) and Best Advice I Can Give -- Blogger Edition (a similar list from money bloggers.) There are lots of good suggestions in these posts if you want more "best" tips. Also, if you're a blogger who wants to share his/her "best" advice on Free Money Finance, email me your best tip in 1-3 paragraphs and if I like it, I'll post it (along with a link back to your site.) If you're not a blogger but still have a great tip, you can send it to me as well.

The Best Credit Card You Can Use

Here's another item on Money magazine's list of 25 rules to grow rich by. Today's tip lists the best credit card you can use:

The best credit card is a no-fee rewards card that you pay in full every month. But if you carry a balance, high-interest rates will wipe out the benefits. If you carry a balance, you may pay a variable interest rate as high as 19%. And if you've been late with payments or used up too much of your credit limit, you may be hit with a penalty rate, which can run north of 30%.

I like (and use) this advice.

Of all the reward cards, I prefer a cash-back card so I can spend the rewards I earn however I like (I earned $330 last year.) That said, I have a second card that accumulates pseudo-cash that saves me a ton on my car expenses.

The Best Way to Improve Your Credit Score

Here's another item on Money magazine's list of 25 rules to grow rich by. Today's tip lists the best way to improve your credit score:

The best way to improve your credit score is to pay bills on time and to borrow no more than 30% of your available credit. It also helps to pay off debt rather than moving it around because the ratio of your credit card balance to your credit limit is key.

And why would you want to boost your credit score? Well, if you're borrowing money, a good credit score can get you a loan at a preferred rate. But even if you don't need a loan, a good credit score can still save you thousands of dollars.

For a couple other thoughts on how to boost your credit score, see Boost Your Credit Score and Nine Steps to a Great Credit Score -- Save Yourself Thousands of Dollars.

The Best Foreign Country for Retirees

Here's the next item I wanted to cover from Kiplinger's "The Best List". Today, we're highlighting the best foreign country for retirees:

The Best Foreign Country for Retirees: Mexico

A warm climate and a lower cost of living plus access to quality medical care make Mexico a favorite retirement destination. The Lake Chapala area, about 25 miles south of Guadalajara, is home to a large community of U.S. and Canadian retirees. You can't count on Medicare south of the border, but there's no shortage of well-trained doctors and modern health-care facilities. And you can still receive Social Security benefits when you live outside the U.S.

I've actually written on this topic quite a bit. For the masses out there who aren't saving enough for retirement but still want a great (or at least decent) standard-of-living when they retire, moving to a foreign country is a great option. For more details, see these posts:

• Best Financial Tips from FMF Readers, Part 7: Retire Overseas

• Comments: Best Financial Tips from FMF Readers, Part 7: Retire Overseas

• Comments: Best Financial Tips from FMF Readers, Part 7: Retire Overseas, Part 2

• Save Money: Retire in Panama

• Retire in Style South of the Border

• The World’s Best-Kept Retirement and Investment Secret

For more thoughts on retirement, see Best of Free Money Finance: Retirement Posts.

Best Advice Blogger Edition: Post Christmas Debt Reduction

Here's our latest addition to the Best Advice I Can Give -- Blogger Edition series.

Today's post comes from Canadian Financial Stuff where he says:

This seems to be the January battle cry for retail stores, "Since you didn't get what you wanted for Christmas, come here and squander more money, please", or something to that effect. If you didn't get what you wanted for Christmas? What if you wanted Peace on Earth, or have your hip replacement surgery scheduled? Can Canadian Tire do something about that for me? I don't think so, but who knows?

Debt Reduction is like losing weight, you need to stop listening to your impulses and keep to the plan. Now if you planned to go to the after Christmas sales (like at the GAP), and spend the money you didn't spend at Christmas, that is a valid (and a good) plan. My kids got gift cards for Christmas and then proceeded to buy 2/3 more clothing than they could have before Christmas at the GAP (makes an old man proud to see his kids learning the value of being cheap).

If you planned on spending a quiet January hidden in your nice warm bed, not worrying about bills, stick to that too. If you don't have a plan for January, feel free to borrow this one, "I plan to not buy any more crap that I don't need", it's a pretty good plan, which actually could be used for any month of the year.

If you continue to SPEND more than you MAKE you can either get a job as a politician or you can be sure you'll never be able to retire, or stop worrying about your debt. Keep that in mind, when you think next, "I didn't get that Deluxe Cheese Straightener I wanted for Christmas, and it's on sale!".

As I'm sure you could guess, I love this advice -- especially since spending less than you earn was my #1 top 10 post topic of 2005. 

FMF Accepting Submissions for Best Series

If you've been reading this blog for any amount of time, you know that I've run several best series. The posts have been pretty popular, and since I haven't done any of these in quite awhile, I thought I'd open some of them up again.

Here's how it will work:

• You select a "best" series you want to post on
• You email me the post (the words -- not a link to a post you've written on your site)
• I post it (assuming the quality is decent) when I have a slot for it and give you a link back to your blog/site (Note: You do not have to be a blogger to be part of this. You can be a reader/visitor as well.)

There are two types of "Bests" that you can submit posts for. First, you can add a post to an existing series like these:

• Best Advice I Can Give -- Blogger Edition
• The Best Deal I Ever Got
• The Best Financial Book I've Ever Read
• Best Financial Tips from FMF Readers
• Best Money Post I've Ever Written

Or, you can submit to a new series. As you might imagine, I have a lot of ideas for new series, but instead of launching them all at the same time, I'll announce one at a time. For now, I'm taking submissions on:

Best Personal Finance Website -- Tell what your favorite personal finance website is and why. Please refrain from 1) naming your own blog and 2) naming FMF just to please me (if FMF is your favorite, that's ok -- just give a good reason why). Be sure to give good reasons why you like Yahoo Finance, Motley Fool, or any other site -- you'll have a better chance of being published (and impressing those who read your piece).

This should be great! I'm looking forward to reading some good stuff from all of you!

Top 10 Post Topics of 2005: #10 Best Series

Over the next several days I want to share with you what I think were the ten biggest issues/concepts/thoughts here at Free Money Finance during the previous year. It took me some time to compile the candidates, sort through them all, and rank them, but I think it was worth the effort and I hope you enjoy the trip down memory lane (and learn something new to boot).

We're going to do it in a countdown format, so we'll start with #10: The many different "Best Series".

I started the concept of "The Best ________" early on in the life of this blog and it took off rapidly. The basic idea was from an article that I wrote several years ago and it grew from that small start to be groups of posts on all sorts of "bests".

In case you missed any of them, here's the comprehensive list:

• Best Essence Financial Advice
• Best Advice from Successful People
• Best Advice I Can Give -- Blogger Edition
• Best Deal I Ever Got
• Best Financial Advice I Can Give
• Best Financial Book I've Ever Read
• Best Financial Tips from FMF Readers
• Best Money Post I've Ever Written

Hope you enjoy these "Bests"!

Click here to read topic #9.

Comments: Best Financial Tips from FMF Readers, Part 7: Retire Overseas, Part 2

I'm now two or three posts deep on the topic of saving money by moving outside the US. 

Here's a history of where we've been:

• It started with Best Financial Tips from FMF Readers, Part 7: Retire Overseas (which was part of the Best Financial Tips from FMF Readers series)
• Then I had Comments: Best Financial Tips from FMF Readers, Part 7: Retire Overseas which agreed with the original premise -- that you can live like a king in another country.

However, moving overseas is not all a bed of roses. Consider this comment:

My in-laws retired down to Mexico and while everything he says above is true, there are also some other serious issues to consider.

For example, my father-in-law has gotten an amoeba. Twice. And after they came to visit our first child when she was three months old, they had to call us a bit later and say, "Oh, whoops, we may have exposed your baby to typhoid."

Mind you, they don't live in some wild outback -- they live in an established expat community in Aijijic.

Additionally, they have quite a bit of trouble with people breaking into their home fairly often. They finally had to put razor wire at the top of the walls around their house.

You get the picture. But even given all that, they're pretty happy down there and aren't moving any time soon. Your mileage may vary.

That's what I love (hate) about personal finances. The answer is just never easy.

The idea is still worth consideration. After all, who wouldn't put up with robbers and a little typhoid to live like royalty? ;-)

Free Money Finance recommends Emigrant Direct for its 4.0% yield.

Comments: Best Financial Tips from FMF Readers, Part 7: Retire Overseas

Here's a comment someone made to my post titled Best Financial Tips from FMF Readers, Part 7: Retire Overseas which was part of the Best Financial Tips from FMF Readers series:

There is a huge crisis looming for America.  It is 76 million baby boomers beginning to retire in 2011.  I've wondered how these people are going to make it through the next 10, 20, 30 years of their life if Social Security, Medicare, Medicaid, and quite possibly, the Stock Market fails them. The only obvious avenue is for them to relocate to a cheaper cost of living country.

I had the pleasure of visiting Cancun a few years back and ran into a man who had ex-patriated there.  He made less than half the amount of money that I did but lived an entirely different lifestyle.  He had:

• A full time nanny/cook for his kids
• A full time driver for his wife and kids
• A full time cleaning person
• A part time gardner for his garden
• All their clothes was sent out to be laundered
• His children all went to private schools
• His wife didn't work and spent her days shopping. 

How much did this guy make?  About 50k/year.

I've encountered similar ex-pats in places like the Dominican Republic and Costa Rica.  People live like Kings there while they would live like paupers here.  Of course, some people could never adjust to a different culture or language so they won't move but it is certainly worthwhile looking into if you haven't already.

Wow. I never really considered this as an option, but it could be a great solution for many people. What do you think?

Free Money Finance recommends Emigrant Direct for its 4.0% yield.

Comments: Best Money Post I've Ever Written, Part 2; Bad Math

Here's a comment a reader who responded to my post on Best Money Post I've Ever Written, Part 2:

As a believer in Ramsey's principles, and an engineer, I can see the conflicts from the math and psychological.  I have followed Ramsey's "baby steps" and this is the only one I've deviated on.  I attack higher interest rate first.  In fairness to Ramsey, he recognizes and states you will pay your debt off in a few more weeks, but also pays more stock to the psychology of the snowball.  I would recommend the snowball method to most that lack the fortitude, but I felt I could handle it, and I did.  I like Ramsey, and believe he's spot on 95% of the time.  This one tenant doesn't suit me, but I think its best for most.

I'm in the "higher interest first" group too, but I can see the benefits of the other option. It still makes me think, though -- does Ramsey think this is really the best way or does he just want to be different. he's a smart marketing guy just as much as he's a solid financial author, so I wouldn't put it past him.

Free Money Finance recommends Emigrant Direct because of its 4.0% yield.

Comments: Best Money Post I've Ever Written, Part 7; Penny Worth Nothing

Here's a comment a reader who responded to my post on Best Money Post I've Ever Written, Part 7:

Not only is a penny not worth picking up but it's not worth existing.  Should just get rid of it and the nickel can go soon after it.

This comment made me smile, and I thought you'd like it too.

Reminder: Free Money Finance is currently in Russia.

Free Money Finance recommends Emigrant Direct because of its 4.0% yield.

The Best Financial Advice I Ever Got: Essence Edition, Part 6

Essence Magazine asked readers to share the best financial advice they've received and how they used it to build wealth. Here's today's tip:

"I was burned by my first financial adviser because I wasn't as knowledgeable as I should have been and allowed him to invest in what he thought was best for me. In the end his choices benefited him more than me and I lost money. When my income increased, friends steered me to another adviser who challenged me to own what's mine and to become knowledgeable about my investments, even though I was stomping on unfamiliar territory. Now I ask questions and make people explain things I don't understand. It's your money. Make it work for you, not for them."

The issue here was that she needed a money adviser, not a salesperson and got taken. This is one reason I'm leery of financial "experts" (and many readers are with me). I recommend you be very careful when selecting a financial advisor. Do your homework and check references beforehand. Also, learn about financial principles yourself, so you know when and if someone's trying to pull a fast one on you.

The Best Financial Advice I Ever Got: Essence Edition, Part 5

Essence Magazine asked readers to share the best financial advice they've received and how they used it to build wealth. Here's today's tip:

"After our sons--Jack, now 2 years old, and Reid, who's 1--were born, our financial adviser recommended that my husband and I set up a 529 Plan to pay for each boy's college education. After an initial investment of $1,000 per child and small monthly contributions, we're on the way to securing their educational future."

I've posted a bit about 529's in the past (see here, here and here) and I think the jury's still out on these. Conceptually, they seem to be a good deal, but the details are often confusing and the wrong choice can lead to high investment expenses, which eat into your returns.

Click here to read part 6 of this series.

The Best Financial Advice I Ever Got: Essence Edition, Part 4

Essence Magazine asked readers to share the best financial advice they've received and how they used it to build wealth. Here's today's tip:

"As a freelance television producer, my earnings are sporadic. My biggest mistake was not investing in the 401(k) plan offered while I was working on the Oprah show. I literally missed out on free money because Harpo matched employee contributions. When I landed on another show, the first thing I did was set up a 401(k) retirement fund. A sorority sister advised me to ask friends on my same income level what they did to save. After some research I met a broker who advised me to invest in a plan that doesn't penalize you when you borrow against it during times of unemployment."

As most of you know by now, I love 401k's but don't like borrowing against them. Maybe if your income is sporadic then you need something that you can borrow against, but I'd recommend doing all you can to avoid that. Instead, save up and emergency fund and let that 401k money stay and work for you!

Click here to read part 5 of this series.

The Best Financial Advice I Ever Got: Essence Edition, Part 3

Essence Magazine asked readers to share the best financial advice they've received and how they used it to build wealth. Here's today's tip:

"Before I purchased my first home, I learned the difference between using a lender and using a broker to secure a mortgage rate. Some brokers charge a fee to find you the lowest interest rate. I had good credit and was able to avoid the extra fee by going directly to a bank. I got referrals from several lenders, picked two that offered the best rate, and played one against the other. When there's competition, they'll work harder for your business."

Another good piece of advice -- and interesting information too!

Click here to read part 4 of this series.

The Best Financial Advice I Ever Got: Essence Edition, Part 2

Essence Magazine asked readers to share the best financial advice they've received and how they used it to build wealth. Here's today's tip:

"My parents taught me that if you invest early in life, as you grow, you'll reap the benefits. This is advice I've always remembered, along with 'Pay yourself first,' 'Invest in your company's 401(k)' and 'Don't spend all your money in one place.' I chose to invest in real estate, and at 25, along with my mother and my aunt, invested in my first property. My contribution was 15 percent of the asking price. Three years later we purchased a second property together, and a year after that, at 29, I purchased my own home with equity from the first two investments. The benefits from these investments far outweigh the burdens of ownership."

Wow! There's lots of great stuff here! (In particular, I'm a big fan of the 401k)

Apply all of these ideas and your net worth will be MUCH better off.

Click here to read part 3 of this series.

The Best Financial Advice I Ever Got: Essence Edition, Part 1

I AM SO EXCITED!!!!!! I was wondering around Google the other day when I ran into an article from Essence Magazine titled, "The Best Financial Advice I Ever Got"! It's just a PERFECT addition to my best series postings and I'm ecstatic to bring it to you (can't you tell?) ;-)

As if you need any introduction, here's what the piece is about:

Essence asked readers to share the best financial advice they've received and how they used it to build wealth.

Here's tip #1:

"Several years ago I became my own financial planner. It took two years of focus for me to wipe out $12,000 in credit-card debt. I lined up all my credit cards and began by paying off the one with the highest interest rate first. Once that card was paid in full, I applied that payment to the next card until they were all paid off. Today I'm debt-free. I avoid credit cards and have excellent credit. My motto is, if I can't pay for it in full, then I don't need it."

That's a motto we should all live by!!!

And if you must use credit cards, be sure you know the eight commandments of credit cards.

Click here to read part 2 of this series.

Best of FMF: Best Series

As many of you know, I've had a series of "Best" postings over the few months that Free Money Finance has been around. We're going to take a break from these for now (don't fear, we will be back) so I thought it would be a good time to list all the "Bests" we've covered.

They are:

• Best Advice from Successful People
• Best Advice I Can Give -- Blogger Edition
• Best Deal I Ever Got
• Best Financial Advice I Can Give
• Best Financial Book I've Ever Read
• Best Financial Tips from FMF Readers
• Best Money Post I've Ever Written

Hope you enjoy these "Bests"!

Best Financial Tips from FMF Readers, Part 7: Retire Overseas

Here's the next entry in "The Best Financial Tips from FMF Readers" series. Today's post is from Pagar who gives us the following advice:

This subject will not be appealing to everyone. But I urge everyone to read it because one never knows if life could be more fulfilling unless one considers alternatives. 

Stretching Retirement Dollars -- Retiring Overseas -- Specifically: The Country of Panama

We currently live in a smaller town 20 miles from Panama City, Panama.  There are American, Canadian, and  Australian families here in just this one small town. There are thousands of retirees from these and other countries throughout this one country. Of course, there are many in other countries also. My knowledge is of Panama, so I'm addressing this from that view, but whatever country you look at the reasons are basically the same. One can live better on the income they have Overseas.

We choose Panama because my wife is from Panama - she can be with her family and enjoy life more, because it is cheaper to live in Panama.  There are others who have no family here, but can enjoy their retirement much more, because it is cheaper to live in Panama.

An oft quoted amount is 65 percent of what it would cost to live in the US. But I know we don´t spend half of what we spent to live in the states.

Reasons to enjoy retirement more in Panama:

• The Panama government actively encourages people from other countries to retire here. With incentives such as: Pensionada discounts, (25% off the food portion of your restaurant bill-when you show your Pensionada ID) 25% off the first 600 kw of your electric bill, and many other services. 25% off Airline tickets, discounts on hospital, pharmacy charges etc. Pensionada status for non Panamanians is granted by the government for persons aged 60 (male) or 55 (female) -- same as Panamanians.
• Taxes=You pay your regular US Income tax wherever you reside. Panama does not tax income expats earn outside of Panama. There is sales tax on most item