In the early days of this blog, I wrote how a key part of increasing your net worth was to maximize your income. One way to do this is to get a college education -- even beyond a 4-year degree if it suits your disposition. Why? Consider this from Money magazine:
The money you spend on a college degree still yields a sizable return on your investment. Over a working lifetime, the typical college graduate earns about 75% more than a high school grad does. On average, that difference totals $1 million more -- easily enough to re-pay those student loans and then some. The payoff from graduate school is even bigger: People with advanced degrees earn two to three times as much over their lifetimes as those without a college degree and increase their average total earnings by as much as $2 million.
Personally, I would be making a fraction of what I make today if I hadn't gotten my MBA. It opened the door to my first job (at a Fortune 500 company) that set my career on the right path.
Smart Money has a good post on index funds and how they may (or may not) be replaced by exchange traded funds (ETFs). First, let's set the scene:
"Like index funds, ETFs are structured to mimic the performance of a benchmark index. Unlike index funds, their value updates throughout the course of the trading day, and they can be bought and sold like stocks. And ETFs are cheap. The average expense ratio for ETFs is 0.42% vs. 0.93% for index funds, according to Lipper. For all of these reasons, ETFs are gaining in popularity."
But Smart Money says, "We're not ready to eulogize index funds just yet." The details:
"For one thing, a number of fund companies have responded to the onslaught of ETFs with lower fees on their index funds. This is particularly true among S&P 500 index funds, which have engaged in a fee war over the last year."
"Clark thinks that index funds with fees of less than 20 basis points (or two-tenths of a percentage point) are "in the game." Of course, apples to apples comparisons of index fund fees with ETF fees aren't exactly fair to begin with. That's because, for now, ETFs can be purchased only through a broker, a transaction that in itself involves a fee. Most index funds, on the other hand, are available without a transaction fee when purchased directly through the issuing fund company.
The article then goes on to recommend various index funds based on criteria set up by Smart Money.
I have good-sized investments in the E*Trade and Vanguard index funds noted above. I'm not really anxious to change, but I'll keep an eye on this situation in case better opportunities do open up with ETFs.
Here's an idea you may not have thought of for making a higher income: don't flirt.
USA Today discusses a study that says flirtatious women get fewer raises and promotions. Here are a few main points:
"Women who send flirtatious e-mail, wear short skirts or massage a man's shoulders at work win fewer pay raises and promotions, according to a Tulane University study."
"Brief said the study goes so far as to suggest that women should even be careful about letting men open doors or lift boxes that aren't particularly heavy, because chivalry is "benevolent sexism" that advances the stereotype that women are vulnerable and weak. But Durkin says the pendulum can swing too far, and she praises men for opening doors, says hugs between longtime business friends are OK, and is happy that more feminine attire has replaced the female suit and tie."
Pretty interesting stuff. If you're a working woman (or married to/dating) one, you should pay attention to this advice. Ignoring it could be detrimental to your income.
One of the things I find lacking on many personal finance blogs (this one included) is the absence of tips on how to increase your income. And since maximizing your income from all sources is my Principle #1, I thought it was about time that I had a regular feature on it.
Rest assured that I won't start posting about off-shore financial schemes or how to set up your own import/export business. I'll focus on simple, easy, practical ideas that almost anyone can do -- the same types of things I try to do in other areas of this blog.
So stay tuned. The money making ideas are soon headed your way!
As discussed in the last post, your personal financial health comes down to five simple principles. That’s it. Just five.
However, it’s not that easy. (It never is.)
These five all have significant sub-points. So over the next few days, we’ll take each of the five principles and describe these sub-points.
Principle 1 is to “maximize income from all sources”. In order to maximize your income from all sources, you must:
Yes, there are exceptions to all of these. Bill Gates didn’t get 30 years of education. Warren Buffet doesn’t have a second job (and though he likes bridge, I don’t think he’s turned it into a money maker), and Ross Perot doesn’t have a co-ed living in his basement (at least to my knowledge he doesn’t). So while there are exceptions to the rule, generally, for the vast majority of people out there, these hold true.
And since they impact almost all of us, we’ll be talking about them quite frequently as we learn to follow Principle 1.
Click here to read about Principle 2.