Free Money Finance

Happy New Year

Here's wishing you all the best in 2006! May your net worth climb to the sky!!!! ;-)

Happy New Year!!

Posts of the Week -- December 26

JLP at AllThingsFinancial just called me a "posting horse" -- hence the clipart. ;-)

Good week here at Free Money Finance -- lots of good posts (at least I think so). ;-)

Here are my picks for the best this week:

• How to Get Your Blog to 100,000 Visitors and Beyond, Step 1; Pick the Right Topic
• Review: The Number by Lee Eisenberg
• New Year’s Financial Resolutions You May Want to Consider
• How Average Joes Can Retire Rich
• Four Tips for Avoiding a Gift-Card Fiasco
• Making the Most of Your Time
• Money Saving Tip: Do Business with Companies that Back up Their Products/Services
• 10 Tips to a Prosperous Retirement
• Getting Rich is Simpler than You Think
• Start on Your First $1 Million at Age 16
• Even a Small Leak Can Empty Your Money Bucket Quickly

Hope you all have a Happy New Year!

Free Money Finance recommends Emigrant Direct.

Even a Small Leak Can Empty Your Money Bucket Quickly

Small bits of money can add up over time and become significant chunks of cash. This is a big benefit when it's small bits that we save, but hurts when it's small bits that we spend. This piece from Marketwatch demonstrates how these little bits can add up.

For instance, take the small costs associated with using cash machines that aren't a part of your bank's network:

The Fall 2005 Checking Study released last week by Bankrate.com showed that the cost for using the "wrong" bank machine has reached an all-time record, with the average total fee now standing at $2.91.

That figure covers the $1.54 average fee assessed by the banks that own the ATM you are using, and the $1.37 average fee that banks charge customers who use a foreign ATM (and almost 70% of banks now charge customers this secondary charge).

Bankrate.com estimates that consumers will pay more than $4.3 billion in fees this year, just for withdrawing their own money in a way that most people justify as "more convenient."

Are you kidding me???????!!!! $4.3 billion???!!!!!! Ouch!!! See, small amounts can really add up.

But many people only look at the per transaction amount and don't see it as that significant. Instead, they should be looking at the total expense over time. Here's the situation:

So it's not "only a buck." Two trips to a foreign ATM per week, and it's about $300 bucks over a year. In a home earning the nation's median household income, that's more than one half of one percent of all the money brought in for a year.

It really does add up. In fact, it adds up to a pretty big number. But that's not all, there are other bank fees that cost you a lot by taking a bit here and a bit there. For instance:

Beyond rising fees, it's clear many consumers simply are unaware of what is happening in their own accounts. Fee-change notices tend to arrive from banks attached to statements, and most people hardly pay attention to their bank statement, let alone balancing their checkbook to reconcile all of those little fees and see just how quickly they add up.

Yes, it's certainly worth it to pay attention to these fees -- and other recurring small charges that eat away at your income. Though they seem insignificant on a per transaction basis, over time they have a significant, negative impact on your ability to accumulate wealth. Watch out and guard against them -- don't let them be a drag to your net worth.

Loving the Job You Hate

If you've never been there, you are certainly very lucky. I, like most people, have been there -- in a job that I don't like. In fact, I'm currently in one of only a few jobs that I've really loved. (While most have been hardships, this one is a blessing.)

If you're in a position where you hate your job, you're not alone. This piece from MSN starts with these facts:

About a million people a day phone in sick — and it's not the bird flu. Some surveys have found that 87 percent of Americans don't like their jobs.

Fortunately, this article offers 10 tips on how to make things better in a job that doesn't rouse your interest:

1. Communicate. Let the boss know your achievements and problems.

2. Do Something for Yourself. Take on a project that's dear to your heart or set aside time for what you do best.

3. Improve a Bad Relationship.

4. Delegate.

5. Seek Feedback.

6. Tackle Tough Assignments First.

7. Have A Little Fun.

8. Encourage Teamwork.

9. Body and Soul.

10. Get a Life.

My thoughts:

1. Option #1 doesn't really work in an environment where you have a boss that is a maniac -- one of the main reasons people hate their jobs.

2. I like items #2, #4, #7, and #10 the best. These are all tactics I've employed and many of them make a bad situation better (though they don't make it great -- and in some cases they could make it worse. For example, if you "get a life", having a job you hate will make you yearn even more for time away from work.)

3. If you have a job that you hate and you're thinking of leaving/changing jobs, don't quit until you have a new position. Almost everyone I've known who's quit a job before having a new job has gone through an extended period of unemployment -- something many of them couldn't afford to do.

How to Get Your Blog to 100,000 Visitors and Beyond, Announcement

I know from the comments/emails that many of you are reading my series on "How to Get Your Blog to 100,000 Visitors and Beyond". That's great! I hope it helps you drive lots of traffic to your site!

Since there seems to be such an active readership for this topic, I wanted to make some general announcements about it:

There will be no post today on the topic. I figured blog readership would be light today. Same goes for the weekend and Monday (which I have off.) The series will resume with part four on Tuesday, January 3.

There's a lot more to come. This series will have 15-20 parts, so stay tuned.

There are several ways to follow along with the subject if you are reading the series:

• Simply visit the site every day. I'll be posting every week day starting January 3rd until the series ends.
• Subscribe to Free Money Finance and read the posts in your reader (Bloglines, News Gator, Yahoo, etc.).
• See the listing on the left side of the blog titled "How to Get Your Blog to 100k Visitors". It includes an individual link for each post.
• Click on the "blogging" category on the right side of this blog. It will contain all the posts in this series.
• If you've saved the last post on del.icio.us or another social networking site, click through to that post. When a new post in the series is available, I'll add the next post link to the previous post.

Hope this helps! Glad you all are enjoying it!

Free Money Finance recommends Emigrant Direct.

Ten Tips to Getting Better Customer Service, Part 2

Here's part 2 of a piece from Yahoo featuring 10 tips that will help you get the good customer service you deserve http://biz.yahoo.com/special/customerservice05_article1.html :

4. Stick to your script. Take a cue from telemarketers: Have a script before dialing the phone and stick with it, no matter what.

5. Offer a solution. The easiest way to resolve a customer service problem is to offer the company a solution. Companies like this because you're doing the brainwork and customers generally ask for less than what the company would offer without the input, Rosenberg says.

6. Get appropriate compensation. When you propose a solution, be sure to take into account the difficulty you've faced in trying to get your problem resolved. What can the company do to appropriately compensate you for the time and aggravation you've suffered?

7. Use the shotgun approach. One of Ursiny's favorite methods of cutting through the customer service clutter is to simultaneously contact several people about his complaint. Ideally, you'll complain to a customer service rep, his or her boss, someone at a managerial or executive level and even up to the president's office. Contact them by any means possible: phone, e-mail, fax, letter. In fact, it's generally better to use several different forms of communication to get your point across.

My thoughts:

1. I totally agree with point #4. Know what you want to say and stick to it. Don't ramble. You'll be far better off -- and more likely to get some help -- doing this.

2. I NEVER offer a solution, at least before they do, for exactly the same reason noted above -- I don't want to ask for less than I could get. It's a real pain for me to contact them and take my valuable time to correct their mistake, I want to get the maximum out of the effort.

3. Remember that "retail price/value" is not the same as "cost". So when you ask a retailer for a $20 gift card as compensation, that may only cost him $10 or so (the cost of the merchandise you'll get) -- much less than the retail value. Plus, if he gives you a $20 gift card, it's likely that you'll spend MORE than $20 when you use it, thus making him additional profit. Take this into account when you settle on compensation.

4. I don't like the shotgun approach. It takes waaaaaaay too much time. I usually go for a higher-up from the start, knowing that it will likely get pushed off to a subordinate. However, that person will want to take care of the problem for the boss.

Click here to read part 3 of this series.

Comments: Give Smart

Here are a couple comments to my post titled Give Smart that suggested maybe garage sales weren't worth the time (Suze Orman's take). This first one has an interesting perspective on the hidden benefits of garage sales:

I like setting up garage sales. Money in hand is better than the promise of Uncle Sam not taking quite so much money later. You can't earn interest on promises.

It's also a safe "laboratory" for testing salesmanship, presentation, and negotiation for anyone who has even a little bit of an entrepreneurial streak. The garage sale might bring in only a few dollars, but it's practice for setting up a bigger business, and you can work out some of the kinks in your selling and negotiation style by hosting a garage sale. Plus, you get to see the tricks that other people use when they negotiate with you. It makes you a stronger buyer at other garage sales.

That's a good and worthwhile comment in my opinion. People spend hundreds of dollars on salesmanship seminars, but there's no better training than hands-on experience. A garage sale certainly give you this.

Here's another thought:

In the past we've cleared somewhere around $500-$1,000 for a days work. Not bad at all, and certainly better than we would have made in terms of tax deductions -- then again, we've been in a pretty low tax bracket in the past. Another suggestion would be to sell the most valuable items on eBay and donate the rest.

Not bad money at all. And a good alternative suggestion.

Finally, a comment that made me chuckle:

I don't know if Suze has actually been to a yard sale but if she has she probably didn't notice that many of the people holding a yard sale aren't exactly in the upper tax bracket and thus most likely wouldn't receive much if any tax benefit from their meager goods. Maybe this is why you don't often see yard sales in the better neighborhoods?

;-)

Free Money Finance recommends Emigrant Direct.

Should Retirees Carry Life Insurance?

Here's a question that's a bit perplexing -- at least for many: should retirees carry life insurance? Here's Marketwatch's take on the issue:

That is the question many retirees face. Should they keep their life insurance policy or not? Unfortunately, experts say there are no easy answers.

"I'm afraid that the only meaningful answer is: 'It depends,'" says John Olsen, co-author of "The Annuity Advisor" and principal of Olsen Financial Group in Kirkwood, Mo. "Retirees are individuals, having individual situations and goals. Some retirees need life insurance. Others won't need any life insurance. And some may not need the life insurance they already own."

Well, that clears things up.

Seriously, many of the answers to financial questions are "it depends". But at least the article tries to give you some guidance. Here it is:

You may need life insurance if:

• You have a mortgage or large debt to pay off.
• You have survivors -- a spouse, children, grandchildren -- or children or grandchildren with special needs.
• You will face a significant state or federal death tax when you die or your surviving spouse dies.
• You anticipate needing a home health aide, an assisted-living facility or a nursing home and you don't have the funds to pay for such care.
• You want to help a business partner buy a retiree out.

As for me, my plan is to build up my finances over the next 15 years or so (while my life insurance is in effect), and eventually get to the point where I won't need it for my survivors (my kids will have been through college and my wife will have enough to live on). I may have issues regarding estate taxes at some point, but those are unlikely as I plan to keep my assets below that level (through gifts to family and charities).

Start on Your First $1 Million at Age 16

ESI Money is now offering a free ebook titled Three Steps to Financial Independence. Get your copy here.

Want to become a millionaire? Actually, it's easier than you think. All you need is a lot of time and some income early on in your life. Here's Money Central's simple formula on how you can become a millionaire:

Here's a simple recipe to become a millionaire:

• Work four summers, starting at age 16
• Save the income in a Roth IRA account
• Invest it in a simple, low-cost equity portfolio
• Simmer slowly for 47 years
• Serve ungarnished (and untaxed) at age 67

Here are a few more details:

If your money is invested in common stocks and you achieve the average compound annual rate on large-capitalization U.S. stocks, 10.7%, your account will grow to $9,378 at the end of the fourth year. You will be 20 years old. Invested in the same way, with no additional savings, the account will grow to:

• $25,917 by the time you are 30
• $71,625 by the time you are 40
• $197,943 by the time you are 50
• $547,037 by the time you are 60
• And $1,114,423 by the time you are 67

And you will have started and finished all of your saving before turning age 21.

Yes, it's a pretty good deal.

Here's an alternative to this: as long as your kids work, let them keep the money they earn and YOU put money in the Roth for them. It will cost you $8,000, but will allow your child to be a millionaire when he retires.

The piece goes on to address a few issues you're probably considering:

Note that this plan does not require investment brilliance. It does depend on two things, an early start and tenacity.

The "Yes, but" crew will be happy to tell you that $1 million isn't what it used to be. I can remember people telling me this in the '60s. It is as true now as it was then. Millionaires are, well, just dreadfully common. Even so, the number of millionaires is relatively small. And being a millionaire is a better choice than being a pauper.

 

Seems like it's worth the "risk" to me. How about you?

How to Get Your Blog to 100,000 Visitors and Beyond, Step 3; Get a Compelling Tagline

Step 3 to getting to 100,000 visitors and beyond: Get a compelling tagline.

You're familiar with taglines even if you don't know it. For instance, match the company/brand with these well known taglines (some are even pretty old -- a testimony to their power):

• "You deserve a break today."
• "When you care enough to send the very best."
• "The real thing."

If you said McDonald's, Hallmark, and Coca-Cola, you are a witness to the fact that taglines can be powerful. But unlike these giants of marketing muscle, you don't have a ba-zillion dollars to spend to make sure your target audience knows your tagline. As such, here's what I recommend for making the best taglines for beginning bloggers:

• Make it descriptive. Don't be vague and use something like "the real thing", it won't work for a new and poorly funded blog. Instead, use your tagline to tell the reader precisely what the blog is about. It's that easy. Simply consider "what is my blog about?" and write a summary. This sort of tagline will suit you fine. For example, if you were Coke and you had the resources of most beginning bloggers, "Thoughts and commentary on soft drinks and the industry" would be a better name for your blog (given that this was your subject matter).
• Get to the point. Use 10-15 words at the most. The shorter, the better. Your tagline should be a short sentence or thought -- not a paragraph. If you need to give more details to describe what you blog is about, put it as a link in the "about" section of your blog.
• Put it up top. Place it prominently -- somewhere visitors will see it as soon as they visit your blog. I place both my blog's name and tagline at the top of every page on my blog so both are constantly reinforced with visitors. This makes them easier to remember and reinforces them both with every reader.
• Once you are established, you can get more creative. If you want to change to something a bit more "creative" (like "the real thing"), you can do this once you build up critical mass. However I would say that you still want it to be partially descriptive unless you are a very big blog like Instapundit, Boing Boing, and the like.

Click here to read part 4 of this series.

Free Money Finance recommends Emigrant Direct.

Getting Rich is Simpler than You Think

Would you like to be rich? Money Central says that getting rich is easier than you think. Here's an overview of their thoughts:

Here is the single most important thing you will ever hear about investing: Getting rich is simple.

And here is the second most important thing you will ever hear about investing: You have no excuse not to do it.

Only three ingredients are needed: income, discipline and time.

Here's how it works: Say you start with nothing, invest $500 (of your income) a month (a healthy discipline), and let your money ride (over time) in diversified investments. Long term, the stock market returns at least 10% annually. Assuming a 10% return, you’d have $102,000 after 10 years, $380,000 after 20 years, and $1.1 million in 30 years.

Yes, saving a bit over a long time is a sure way to growing your nest egg. Why? Because of the power of compounding. The piece goes on to explain this:

Compounding is the reinvestment of the interest you receive from the money you set aside.

“Compounding," Albert Einstein said, "is mankind’s greatest invention because it allows for the reliable, systematic accumulation of wealth.” Einstein was a smart man. But you hardly have to be a genius to make this concept work for you.

But you need more than compounding to help make the most of your money:

The real magic of investing comes when you combine the surprising power of compounding with continuous and regular investments -- in other words, discipline.

The best way to make these continuous investments happen is by setting up an account with a broker or mutual fund that automatically deducts a fixed amount from your bank account every month. “Automatic” is the operative word here.

This is what I do. I have my accounts set up so my paycheck is automatically deposited directly into my checking account. Then, a portion of that is automatically sent to Vanguard every month and then automatically invested in mutual funds I've designated. All of it happens like clockwork without me doing anything. To date, it's worked well and my investments have performed excellently.

Why this process works so well is because 1) it's done automatically and 2) it employs dollar-cost averaging.

The piece ends with a summary we should all keep in mind:

Here's the bottom line, like it or not: The fate of your retirement, your comfort in older age, probably lies in your commitment to the concepts laid out in the paragraphs above. For the vast majority of us, wealth creation is a slow and steady -- and powerful -- process.

As regular readers know, I am a big fan of index investing. Here are a few posts I've written that detail the advantages of investing your money in this way:

• Fund Indexers, Take (Another) Bow
• The Case for Indexing
• Don't Give Up on Index Funds Yet
• Investing Made Easy
• Where the Pros Stash Their Own Dough

Comments: How Much Would You be Willing to Spend to Save Your Pet's Life?; A Lot

Contrary to what may be popular opinion, I am not a pet hater. In fact, I love animals. However, I do point out that there is a pretty big cost of pet ownership and people need to take this into consideration before they decide to get a pet. I think most people give the issue very little (if any) thought.

Here's a comment to my post on How Much Would You be Willing to Spend to Save Your Pet's Life? that tries to address the question I put forward:

I don't have a pet yet but will be bringing home my puppy in a couple months. I am already planning to spend $1500 just to bring him home and that is just the cost to the breeder. Then there is at least another $500-$1000 in initial vet shots and all the items he will need to make my home his as well. It is hard to say how much I would be willing to spend if heaven forbid something happen to him but I know I wouldn't just turn my back on him.

A few thoughts:

1. This person is spending $2,000 plus just to get a dog and set him up. I know there are much cheaper ways of doing this (a dog at the pound, some shots, and a bag of food), but there are more expensive ways as well. All I'm saying is "consider the cost." This is what some people spend on a car.

2. I never said you should turn your back on a sick pet (if that's what the commenter was implying). I said that I wouldn't spend anywhere near the amount to save a pet that I would to save a human (like one of my children). This was in response to a commenter who said she would spend whatever it would take to save her pet and that a pet's life was worth the same as a human life. I disagree.

3. Whatever you'd spend to save your pet, it's likely that it will be an expensive choice. If you are willing (like many people are) to spend $2,000 or more to save your pet, you better be saving up for it now. It's a future expense that's highly likely for many pet owners.

Free Money Finance recommends Emigrant Direct. It's a great place to save for that $3,000 facelift your dog will eventually need. ;-)

10 Tips to a Prosperous Retirement

Here's a piece from Bankrate that give 10 tips for a successful retirement:

1. Try to save approximately 15 percent of your salary each year toward retirement.

2. When calculating your potential retirement income, take into account your investments, Social Security, pensions, part-time employment and possible income sources such as rental property.

3. If you're lagging behind where you think you should be, try to increase your annual contributions above 15 percent and consider putting annual raises, bonuses, cash gifts or inheritance money into retirement investments rather than spending these windfalls.

4. You can avoid or defer taxes by contributing to IRAs or investing in tax-deferred annuities. Talk to a financial planner for assistance.

5. If you're not completely happy with the size of your retirement nest egg when you approach age 65, consider delaying retirement for a few years.

6. If you work for an employer offering a retirement plan such as a 401(k), 403(b), 457, SEP-IRA or ESOP, maximize your employer's matching funds.

7. If you change jobs, do not cash out of your retirement plan.

8. Diversify your portfolio among many asset classes. This helps you maximize your return on investment while decreasing volatility.

9. This is tricky, but try to determine what percentage of your current income you want to live on.

10. Finally, when you do retire, plan on withdrawing only about 4 percent of your savings during the first year.

My thoughts:

1. 15% for retirement only seems pretty steep -- even for me. If you're also saving for college, this may be tough. I'm going to let you off the hook and give you 10% of annual income as a retirement savings goal. ;-)

2. Personally, I fully contribute to my 401k and my employer gives a generous match. It adds up to about 10% of my income.

3. I'm counting on nothing from Social Security. It seems like the only wise thing to do for someone in their early 40's. If it does pay me anything, I'll just count that as a bonus.

4. I think we can live on about 60% of our income -- or maybe even less. But I do need to run the numbers to be exact.

5. So if you have $1 million saved, you can only withdraw $40,000 a year. Not much.

Star Money Articles: Resolutions Abound

As you all know, I've been posting my 2006 financial resolutions here Free Money Finance, but I'm not the only one doing that from around the blogosphere.

Here are a few others you should check out:

• All Things Financial has a GREAT post on Making Financial Resolutions for 2006. You HAVE to check this post out. (BTW, several links in it are mine.) ;-)
• Consumerism Commentary is doing a bit of year-end review/2006 planning as he reviews his Investment Holdings. Check it out to get a sneak peek into his performance.
• Blueprint for Financial Prosperity takes a bit of a different approach -- instead of looking forward, he's looking at his best articles of 2005. There's some good stuff here -- you should be able to make your 2006 plans based on what he's got to share.

Stretching Mortgage to 40 Years can be Risky

Here's the problem as stated by USA Today: By moving from a fixed-rate 30-year to a 40-year loan, borrowers can stretch out loan payments and qualify for larger mortgages with lower payments.

Why is this a problem? Quite simple:

10 years of extra mortgage payments and a reduction in home equity.

A few other things to think over before you go with a 40-year product:

"This (40-year) loan product screams of a budget-constrained consumer desperate to get into a home," says Gary Schatsky, a fee-only financial adviser/attorney. "This trend is disturbing to me, especially since it feeds into the growing obsession by consumers to get credit. "They need to think through this mortgage's implications because in many cases, it will become their children's mortgage."

I think you all know my feelings on this sort of loan. You're never going to grow your net worth the way you want if you stretch all you can to buy a house.

Here are some other posts from me that detail my thoughts on the subject:

• Buy a House You Can Easily Afford
• Comments: Buy a House You Can Afford
• Know How to Get the Best Mortgage Rate

Ten Tips to Getting Better Customer Service, Part 1

As I wrote yesterday, I like to do business with companies that back up their products and have great customer service. Unfortunately, this list of companies is ever-shrinking and you have to be proactive (and persistent) with many companies just to get decent customer service nowadays. Here's part 1 of a piece from Yahoo featuring 10 tips that will help you get the good customer service you deserve:

1. Take notes. Chronicling your problem is essential. Your documentation should be as complete as possible.

2. Break through the anonymity barrier. Getting your customer service rep's name is a good start. Now you need to build a relationship so he or she thinks of you as a person, not as a problem they want to ditch. Be polite, use humor and ask for sympathy.

3. Act like they're right, but presume they're wrong.

My thoughts:

1. I always take a nice tone -- at least on the first several attempts. But if I get the run around, that's it, no more Mr. Nice guy. By then I figure they're not going to help me anyway and I stop being their best friend. I don't become rude, but I do become more demanding and forceful. Then if they still don't respond, I tell a few thousand of my best friends on this blog what a bad company they are. ;-)

2. Information is key. Every company I've worked for will need to know certain pieces of information around the reason the customer is dissatisfied. As such, I record as much as I can to make it as easy as I can for them to help me out.

3. Most customer service reps work from a script and don't vary much from it. (Have any of you ever written Typepad? I KNOW they simply cut and paste text from some set of standard replies -- though I did get a great answer from them yesterday.) If you run into this, you'll have to either 1) deal with "the system" or 2) appeal to a higher authority. I usually opt for #2 and my results have been fairly positive.

Click here to read part 2 of this series.

Choosing the Right Charities

Here are some tips for choosing the right charities for year-end giving from Marketwatch. Let's start with great financial reasons to give before the end of the year:

Usually, you can take [tax] deductions on donations only up to 50% of your AGI. But because so many people donated so much for the victims of the three horrible hurricanes -- Katrina, Rita and Wilma -- you can take deductions up to 100% of the donations that you make between Aug. 25 and Dec. 31. Says James Lange, a leading tax attorney in Pittsburgh: "If ever you wanted to make a very large contribution to charity, now is the year to do it."

Yes, not only is it the season to give, but it's also a great time to lower your tax bill a bit.

But where should you give? How do you pick a worthwhile charity? Here are some guidelines to use to make sure the charity you select is using your funds properly:

Avoid smaller, lesser known, inexperienced or nice-but-not-necessary causes, whose in-the-mail solicitations pile up on your desk.

To find out which charities are the most effective to meet your needs and desires, visit the Better Business Bureau's Wise Giving Alliance Web site at www.Give.org. Or www.CharityNavigator.org or www.GivingForum.org.

Focus your contributions, giving a lot to a few charities that really matter to you instead of scattering small pieces among countless causes that quickly dissipate.

And like many professionals, Tempel is wary of telemarketing. Says he: "I hardly ever make a gift on the phone."

Good advice. We try to concentrate our contributions to a few charities so we can give them substantial amounts. However, there are a few that we give smaller amounts like $100, $50, or $25.

Also, we NEVER commit to give over the phone. Even if we get called from a charity we know, we ask them to send us something in the mail. Nowadays, you never know if the call is from the legitimate charity or some scammer.

To wrap up this article, here are some interesting facts about charities in the U.S.:

Charities constitute big money: $248.5 billion was collected in the U.S. last year, and the total is expected to rise this year to $260 billion.

Nearly 90% of America's households make some charitable contributions, and the national average in 2003 was 2.3% of income, not counting the personal time that volunteers contribute.

I've written quite a bit on the subject of giving. Here are some additional posts you may want to review:

• Why Give? Because It's Investing
• A Dozen Creative Donations
• Can't Give Money? There are Other Ways to Support Charities
• A Thought on Giving from David Bach
• The Power of Giving

Comments: Yes, You Can Erase 15 Years of Debt in 14 Months; I'm Doing It

Of all the comments that are left here at Free Money Finance, I like the ones that contain personal testimonies the best. Here's one given in response to my post on Yes, You Can Erase 15 Years of Debt in 14 Months:

I am 40 and paying off $12,649 of credit cards. It used to be $30,000. I realized one day I couldn't continue on this way. I regret the amount of money I wasted. However I do not benefit presently on regretting the past but look forward to my future. In 2 years (hopefully sooner I have 2 kids) I will be out of debt. I am teaching my children my lessons - that is my gift. Credit cards are evil! An excellent website I found was www.crownfinancial.com. It gives advice on debt from a Christian perspective. It gave me hope and that made all the difference.

Congratulations! Keep up the great work!

Yes, getting out of debt is difficult, but it can be done. And believe me, it feels GREAT to owe nothing!

Free Money Finance recommends Emigrant Direct.

Money Saving Tip: Do Business with Companies that Back up Their Products/Services

Here's a short and easy money saving tip:

When you have a choice, do business with companies that back up their products and services with guarantees, no hassle refunds/exchanges, and/or good customer service. Then when things go wrong -- which they do even with the best of companies and products -- you know that you (and your money) will be taken care of.

I have a list of companies that we associate with because of just such reasoning. They are:

Hampton Inn -- Our company uses Hampton Inns whenever we travel. Why? Good, clean hotels at decent prices. Plus, they have free high-speed internet service. Best of all, they have a 100% satisfaction policy, which I've had to test out twice. The first time, I was awakened at 4 am in the morning by the hotel's fire alarm and had to march outside in the cold with the rest of the guests. The reason was a malfunction in the hotel's system. When I asked for a partial refund the next morning, the clerk said, "No, we have a 100% satisfaction policy. If you weren't 100% satisfied, you stay for free." Then she credited me for the whole night. Cool. The second time, I was in a room where the high-speed internet didn't work and the staff was less than helpful. After I returned home, I wrote the company and they credited me for the entire cost of my stay. That's the type of company I want to patronize!!!

Bob Evans -- I LOVE Bob Evans pancakes. They taste great, fill you up for hours, and provide plenty of energy for those 50-mile plus bike rides (or re-charge you afterwards). One night, my son and I went in and ordered pancakes. They're usually pretty fast with their service, but this night we waited and waited and waited. The server kept saying our order was "coming right up". An hour later, it was no where in sight and we were close to running late to meet my wife. So I told the server I was leaving, we stopped at Wendy's for a quick bite, and headed home, less than happy. The next day, I emailed Bob Evans headquarters with the story. A week or so later, I received a letter of apology and $25 in gift certificates as compensation. Sweet! (literally) ;-)

Costco -- Costco is one of the few remaining companies that make returns hassle free. You still need your receipt, but they process the return quickly with no questions and don't give any "why didn't you want this" attitude. It makes buying things there a lot easier and, in my view, a great way to spend my money.

Are there any companies/products that you consider excellent in backing up what they sell?

Free Money Finance in Seven Carnivals This Week

Free Money Finance is part of seven carnivals this week:

• Carnival of Investing includes my post on 13 Unconventional Investments
• Carnival of the Capitalists includes my post on Calculating the True Cost of a Pet
• Carnival of Debt Reduction includes my post on How Many Credit Cards Should You Have?
• Carnival of Personal Finance includes my post on 11 Ways to Make the Most of a Year-End Bonus
• I'm hosting the Festival of Frugality
• Bonfire of the Vanities has my post on Mortgage Data on Two Million People Lost
• Carnival of the Vanities includes my post on 10 New Years Money Resolutions

Stop by these carnivals to read some great posts!

The Price of Motherhood

If you're a young couple considering a baby and thinking the woman will put her career on hold for awhile as a result, you'll want to read this piece. It details a new study that quantifies the price of motherhood (impact to the woman's income) for such a couple. Here are the details:

On average, Miller has found in a new paper, a woman in her 20s will increase her lifetime earnings by 10 percent if she delays the birth of her first child by a year. Part of that is because she'll earn higher wages—about 3 percent higher—for the rest of her life; the rest is because she'll work longer hours. For college-educated women, the effects are even bigger. For professional women, the effects are bigger yet—for these women, the wage hike is not 3 percent, but 4.7 percent.

So, if you have your first child at 24 instead of 25, you're giving up 10 percent of your lifetime earnings. The wage hit comes in two pieces. There's an immediate drop, followed by a slower rate of growth—right up to the day you retire. So, a 34-year-old woman with a 10-year-old child will (again on average) get smaller percentage raises on a smaller base salary than an otherwise identical woman with a 9-year-old. Each year of delayed childbirth compounds these benefits, at least for women in their 20s. Once you're in your 30s, there's far less reward for continued delay. Surprisingly, it appears that none of these effects are mitigated by the passage of family-leave laws.

Miller actually conducted a series of experiments. None by itself was conclusive, but here's what the article concludes:

Three imperfect experiments still don't add up to one perfect experiment, but when they all give the same result, we can start to embrace that result with some confidence. In this case, the result is that early motherhood is not only correlated with low wages; it actually causes them.

Personally, I don't have any thoughts on whether a couple should wait a year or not. I'm just presenting the information so that you can make an enlightened decision. In the end, if the couple can afford to have only one person working, I'd say it's probably best for the child to do so. However, I know there are a lot of people who aren't able to (or don't want to) do this.

A Holiday Suggestion (and Also a Money Saving Tip)

Here's a reminder for those of you looking for an excuse to ring in the new year by eating ice cream. :-)

As you're probably aware, our main sponsor is Moose Tracks ice cream. But here's what you're probably not aware of concerning Moose Tracks:

• The product is vanilla ice cream filled with delicious, chewy chocolate fudge and mini peanut butter cups.
• The ice cream that you've heard of that is most similar in style to Moose Tracks: Ben and Jerry's.
• Average cost of Ben and Jerry's ice cream based on A.C. Nielsen data: $3.16 per pint (16 oz.).
• Average cost of Moose Tracks ice cream based on A.C. Nielsen data: $3.77 per "half gallon" (60 oz. average).
• Cost per ounce of Ben and Jerry's: $0.198
• Cost per ounce of Moose Tracks: $0.063

Conclusion: The great taste of Moose Tracks costs less than a third of Ben and Jerry's.

I'm inviting you to buy some Moose Tracks this holiday season and try it for yourself. Not only will your taste buds thank you, but your budget will too. ;-)

And if your significant other is not convinced you need it, here are some handy excuses that may work on him/her:

• "I read this blog sponsored by Moose Tracks and I don't think the guy who writes it is going to shut up about it until I try it!"
• "Look at all the money we're saving! Let's get TWO half gallons!!"
• "I bet I can eat a half gallon faster than you can."
• (If you're a woman) "I'll let you watch all the bowl games as long as I'm stocked up on Moose Tracks."
• (If you're a man) "I'll only watch 16 bowl games (versus my regular 25) if you get some Moose Tracks ice cream for me."

Free Weight Loss Membership

Let me start with the disclaimers:

• I don't know anything about this site I'm going to talk about (other than I visited it and it looks ok)
• I'm not recommending it -- just passing on news
• Use it at your own risk

Now, having said that, I wanted to pass along information I received from an email the other day. The email read:

I recently came across your blog and I thought you might be interested in the flowing story as New Year’s Resolutions are upon us.  The bottom line is that SparkPeople.com, a leading diet and health website, is now offering free lifetime memberships.  You can run with this however you want; and feel free to contact me with any questions.

Ok, never to be one to pass up the chance to let everyone know about free offers, here's the piece:

Every year, two of the most common New Year’s resolutions among Americans include losing weight and saving money—and for good reason.  An estimated 65 percent of Americans are overweight, and our nation’s savings rate is negative for the first time since the Great Depression, meaning that collectively we are spending more than we earn for the first time in about 70 years.

Although the implications of these issues on our health care system and economy are complex and difficult to fix, on a personal level they don’t have to be. In fact, you might be able to tackle two of your resolutions at the same time by saving money on your diet and fitness expenses this year.

Marketdata, a market research firm that has tracked diet products and programs since 1989, estimates that the average dieter spends about $652 per year on diet and fitness products and services.  Although investing in your health is a good thing, it does not have to cost a lot. 

SparkPeople.com, a leading diet and health website, announced today that it will begin offering its services to consumers for free.

This move is significant in an emerging $200 million industry, led by subscription-based players like Weight Watchers Online and eDiets.com, which charge between $100 and $300 per year for their services.

SparkPeople’s goal is to give away at least $100 Million worth of online services in 2006.  Before switching to the free, ad-supported model the company charged users approximately $100 per year for membership to their premium diet and health site. 

Chris Downie, SparkPeople.com’s founder who sold his first company to eBay in 1998, commented on his company’s decision saying, “The free, ad-supported model fits our mission of helping millions of people reach their goals using health and fitness as a springboard to success.” Downie explained that “a convergence of factors including the dramatic increase of online ad spending, a growing obesity problem, a strong consumer demand for personalized online programs, and our expertise managing large online communities all played heavily into this decision.”

Here's the translation: "No one was willing to pay $100 per year for this membership. The company's in financial trouble, so in a last ditch effort to save it, we're trying to see if we can give away the service and make money selling ads."

Ok, that was a bit cynical, even for me, but I was part of the dot-com boom/bust a few years ago and I wouldn't be surprised if this was what was happening.

But if it sounds interesting to you, check out the site. It costs nothing and may actually help you if you need/want to lose weight.

How to Get Your Blog to 100,000 Visitors and Beyond, Step 2; Pick a Good Name

Step 2 to getting to 100,000 visitors and beyond: Pick a good name.

If you've followed step one, you already have a good topic, but just as important is a good name for your blog. While this is a bit trickier than selecting a good subject, here's my perspective on what makes a good name:

• A good name is the same as the .com URL for your site. For instance, I believe it's better to have the name of your blog be "Joe's Blog" and you own/use the URL "www.joesblog.com" rather than call it "What's Up with Joe" (or anything else) and you own/use the URL "www.joesblog.com". There's a simplicity that makes it easier to find and remember your blog (not to mention marketing it) when your name and URL match. Also, .com is better than .net or any other option. I know there are exceptions to these rules, but they are exceptions, not the "rules". The rule is that if all else is equal, it will be easier to find and remember your blog if the name and URL match and it's .com.
• Pick a name that is at least somewhat descriptive. You're trying to establish a brand from the ground up and it's hard enough to do when your name/URL do some of the work for you -- don't make it harder. If you have a camera blog, let the name and URL help tell visitors that it's a camera blog without any additional commentary. For me, Free Money Finance worked because it at least hinted that the site had to do with money. I'm not saying that you have to be boring with the name, but some description will give you an advantage over a name unrelated to your topic.
• Consider using key search words. This won't do much for you at the beginning, but once you get going, it will help out a lot. Did you ever notice that "free", "money", and "finance" (and their various combinations) are pretty strong search words? I did -- that's one reason I picked the name. Now that I'm established and all the search engines recognize my blog, those terms drive some powerful traffic. The same can/will happen for you if you select the right name.
• Shorter is better. The shorter the name/URL, the better. I wish I had a shorter name (it's tough enough typing "freemoneyfinance" all over the place for me, imagine how potential visitors must feel), but I couldn't find one I liked better that was shorter but still accomplished my other goals. So go for a longer name if you have to in order to accomplish the tasks noted above, but if you can do all those AND have a shorter name, shorter is better.

Click here to read part 3 of this series.

Free Money Finance recommends Emigrant Direct.

Making the Most of Your Time

In my opinion, one of the things more important than money is time, mostly because money is renewable (if you lose it you can get it -- or even more -- back). Once time has passed, it is gone.

That's why I wanted to share this piece from Yahoo.  It offers ideas on how to make the most of your time. Here are the highlights of the piece:

Have a personal mission statement and allocate time accordingly.

Work to the sweet spot of time-effectiveness. For example, if, in writing a column, I could do a good job in a half day, a very good job in a day and an excellent job in two days, I'll probably aim for getting it done in a day. Why wouldn't I shoot for excellence? Because I could write a whole other very good column in that second day, and I believe two very good columns do more for the world than one excellent one.

Work at home. Most people who live in the suburbs waste an hour or two of their day's best hours merely getting to and from work.

Be kind in a time-efficient way.

Advice I'd give my child: Young people tend to think money is more important than time. It's not.

My thoughts:

1. I'm in agreement with the essence of this piece.

2. I have a personal mission statement and annual goals (resolutions) I want to accomplish. It helps me make sure my life is moving in the right direction.

3. Many of us would like to work at home, but can't. However, commuting time doesn't have to be a wasted time. I listed to audio books in the car and can listen to a book in a fraction of the time it would take to read it. I listen when driving to work, when I'm out on errands (as long as I'm alone), and on business trips. I also listen to books while exercising.

4. I have more money than time and as such I prefer to give rather than volunteer. This allows me to spend my most precious resource (time) with my top priority (my family) while also helping others. In addition, I'm helping those people who can't afford to give but have the time to volunteer by providing funds for their efforts.

5. Here are some more ideas on how to make the most of your time:

• Free Up More Time
• Simple Ways to Save Hours of Your Time
• What's Your Time Worth?

Penny-Wise Home Improvement

Here are some tips from Forbes on how to get the most bang for your buck when you remodel your home. In other words, what improvements can you make that don't cost a bunch but that will increase the value of your home?

Here are their suggestions:

"Think like a buyer who is looking at your house," she says. "Think in terms of relativity to the competition in your neighborhood, because it is so dependent on what you are up against. If you live in an expensive area, or an area with a lot of new construction, and you have an outdated kitchen, you may need to improve it."

Be careful not to over-improve your house, O'Connor adds. "You should think what you are up against in terms of what you want to spend. People shouldn't spend a lot of money to remodel a kitchen in a neighborhood where it simply doesn't command it. "

Newly remodeled kitchens and bathrooms can make a home more marketable. "But rarely do you get a 100% return on any kind of remodeling job you might do," says O'Connor.

Since everybody's taste is different, however, it may not be wise to spend too much money to change things, because it may not be what the buyer wants. "Keep improvements on par with other homes it will be competing with, and try to appeal to the broadest group of buyers as possible," says O'Connor. "Most importantly, be objective. Sometimes, you may need a real estate agent, decorator or even a friend, to give you that consumer perspective."

One word for you: neutralize. Whatever you do, make the colors neutral and you have the best chance of making it attractive to the masses. We got a pretty good deal on the house we now own because they had very dark gray carpet and dark paint on the walls. We bought knowing that we'd have to re-do a lot, then spent $15,000 or so on new carpet and paint for the entire place. It made all the difference in the world!

8 Things Stores Don't Want You to Know

Having worked as an executive for a retail operation, I know of all the tricks retailers can play to get you to buy more stuff. Heck, I was the MARKETING vice president of the company, it was my job to play tricks to get people to buy more! But we won't dwell on my dark past.

Here's a piece that lists the eight things stores don't want you to know. Read, learn, and remember -- these could save you a bundle:

1. Music makes you buy more. Stores boost sales by adjusting the tempo of the music they play. Research has determined that people buy more when listening to slow ballads.

2. The sweet smell of success. Studies show that customers in shops filled with soothing fragrances, such as vanilla or lavender, browse longer and buy more.

3. The color of money. Colors speak a definite language.

4. Location, location, location. Research shows that items at eye level outsell goods on other shelves by as much as three to one.

5. The price is right. Ever notice how many items are priced at $10.99, $15.99 and $20.99? Nine is the most popular final digit on products because, according to researchers, it makes people feel they're getting a bargain.

6. The power of touch. Placing everything from sweaters to bed linens on displays that consumers can touch increases store sales. That's because people like to feel fabrics before they buy them.

7. Getting personal. Each year, 78 percent of us cash in coupons. The newest twist: personalized product pitches.

8. The shopping-cart strategy. Carts are no longer just for grocery or discount stores. Studies show that shoppers buy more at other retail outlets when they have a cart than when they don't. Retailers such as Sears and Old Navy are now making carts available in some of their stores. And beware the size of shopping carts: The larger the cart, the more goodies we're likely to put in it.

This is Retailing 101 -- just the basics. But the basics account for most of the impact a retailer can have on you. And if they get you to buy just one more item, it's worth it to them to make an extra effort and put these tasks to work. Be aware of them as you shop so you buy only the items you want -- not the items they want to sell you.

Four Tips for Avoiding a Gift-Card Fiasco

Here are four tips from David Bach, author of the Automatic Millionaire, on how to properly handle any gift cards you may have received as presents this year (or anytime in the future, really):

1. When You Get the Card, Photocopy It.

2. Check the Expiration Date.

3. Don't Lose the Change.

4. Read the Fine Print.

My thoughts:

1. Overall, these are good tips.

2. I NEVER photocopy the card. Then again, I treat it like cash, so I handle the card itself with extra care. This goes for whether the card is new or if it's only what's left on the card.

3. In the past two months, we've received several gift cards/gift certificates including ones to Burger King, KFC (yum!!!!!), Carrabba's, our church bookstore, the Gap, and Target. It's s bit hard to keep track of all of them and you really need to be diligent about it to make sure you don't forget about any. I have a system I use on my Palm to make sure I use them all.

4. In the past few months, we've given a few gift cards. They seem to work best for us when you know the type of item a person would like, but don't know exactly which one to get. For example, my son went to a birthday party and we knew the birthday boy liked video games. But we didn't know which ones. So we gave him a gift card to Best Buy. Problem solved.

How Average Joes Can Retire Rich

Other than thoughts on personal finances, I think one of my strengths here at Free Money Finance is beating a dead horse. So with that thought, I bring another article on how the key to growing your net worth (and a big retirement nest egg in this case) is to spend less than you earn and save, save, save.

Here's the bottom line from Money magazine on how the average person can retire rich:

When it comes to the three main choices you have in your retirement account -- how much to contribute, how to allocate your money between stocks and bonds and which funds to choose -- a recent study by Putnam Investments shows that investing prowess isn't what matters.

It's how much you sock away.

In other words, saving more leads to, well, more savings. Not exactly a revolutionary idea, true, but it's surprising how big a bang you get by upping the percentage of salary you put in and how slight the payoff is from being a fund savant.

Yep, I love beating that horse. ;-)

Here's a quote that reinforces the main point:

"It pays to focus on what matters most, which is how much you're putting in your 401(k) for the majority of your career," says Putnam research chief Peter Chiappinelli. "You can have the greatest funds, but it doesn't mean much if you have only a small amount of money in your account."

Ok, so saving is the way to have the singlemost impact on your retirement, but you're not limited to just one option of making the most of your retirement -- you can save the max, allocate your investments properly and select good investment options. Doing all three will REALLY supercharge your retirement.

Here are Money's suggestions to making the most of your retirement savings:

The first step is to salt away as much as possible.

If you can't manage that all at once, increase your contribution by a percentage point a year.

Next, focus on your mix of stocks and bonds. A number of landmark studies show that asset allocation has a bigger impact on returns than the specific funds you hold.

As for funds, look for ones that have low fees and consistent investing strategies.

Here are a few posts from Free Money Finance that relate to this piece. Check them out to get more in-depth coverage of this topic:

• How Much Goes in the 401k?
• 10 Things You Should Ask Yourself About Retirement
• The Case for Indexing
• Where the Pros Stash Their Own Dough

Comments: Financial Resolutions for 2006: Get Spouse Up-to-Date on Finances; Different Perspective

Here's a comment to my post on Financial Resolutions for 2006: Get Spouse Up-to-Date on Finances that offers a different take on the issue of getting a spouse up-to-speed on your financial situation:

One sentence you wrote struck me: "Then if something happens to me, she shouldn't miss a beat financially." I used to think that too, but life gets in the way and I can never sit down with her and really dig into the topic. (I'm a 9-to-5er; she's a nurse on a night schedule. So it's very easy for us to find better things to do in the little time we have together than talk finances.)

So I've changed my thinking a little bit. I know that my wife would be completely capable of managing her own finances if I were gone - probably not as passionately and as in-depth as I do, but she would do fine. But surely she would do things differently, to better suit her own depth of understanding, time constraints, etc.

So I've settled for making sure that if I die, rather than just picking up where I left off, she has tools in place so that at least she can understand what I've tried to build for us. She may not manage the checkbook in the same way I do, but I've made my processes clear enough that she can understand and modify to her own tastes. She may not know the ins and outs of our homeowners insurance policy like I do, but my files are well organized so she can get the documents and read them herself. And most importantly, I try to talk to her about my financial philosophies and principles.

At this point in my life, that is good enough for me. There's no doubt in my mind that if I died, it would take an investment of her time to get comfortable with our finances. But I've made her familiar enough that at least now she "knows what she doesn't know" so to speak, and has an understanding of where to go to ask the questions.

That's really where I'm headed with my resolution. I didn't mean that I need to plan for my wife to manage things exactly as I do. By "not missing a beat", I mean that she needs to know where my files are, what they contain, the passwords to key financial documents, etc. I need to get to where this commenter is in the last paragraph. That's my resolution for this year.

Free Money Finance recommends Emigrant Direct.

New Year’s Financial Resolutions You May Want to Consider

Here's a piece I wrote three years ago for a national magazine. I thought it might give you some ideas as you work on your financial resolutions this year.

Where appropriate, I've added in links to other posts on Free Money Finance to provide more information on the topics. Here goes:

Every New Year, millions of people resolve to better their lives. Many pledge to significantly improve their finances. As with other popular resolutions such as stopping smoking or losing weight, the key is to have a plan and stick to it. Try these simple steps to get in shape financially:

Create a spending plan — Determine your income and expenses for each month by reviewing your checkbook, bank statements, and receipts for the last year. Also, track your cash spending for 30 days, adding expenditures to the proper expense category. Record actual results regularly and update your plan quarterly. This will reveal where your money is being spent and provide information you need to manage it correctly.

For more information:

• Know and Control Your Spending
• Why do Millionaires have Budgets?
• Three Ways to Track Your Spending

Spend less — Spending less is easier than earning more, so look for opportunities to save money. Clip coupons, buy off-season, avoid impulse buying, and stop “cruising the mall.” Stop the small “leaks” of money; saving $2 a day on snack breaks at work yields $500 a year.

For more information:

• 13 Ways to Live Well on Less
• Why It Pays to Live Within Your Means
• Super Saver-Tips To Save $1,300

Create an emergency fund — Emergencies arise. Cars break down, ankles are sprained, and jobs are lost. Experts suggest you set aside three to six months of living expenses as a regular reserve. This fund will cover those inevitable, unexpected costs and keep you from borrowing money when they occur. This is why I recommend Emigrant Direct. If you don't have a savings account set up with them yet, now's the time to set one up.

For more information:

• Where to Save Emergency Cash
• Financial Emergency Kit
• Star Money Article: Why an Emergency Fund is Important

Eliminate debt — Paying off a credit card charging 17 percent annual interest is equivalent to investing money with a before-tax, guaranteed return of almost 20 percent. More than half of Americans have $7,000 or more of revolving credit card debt. Eliminating this debt saves more than $1,000 per year.

Financial expert Dave Ramsey recommends a “debt snowball”—reallocating payments from retired debts to existing loans until all debts are consumed.

For more information:

• 8 Ways to Consolidate Debt
• Four Credit Card Traps
• Escape the Credit Card Trap
• Don't be Bullied by Debt Collectors

Start saving now — Saving early for long-term expenses such as retirement or college allows you to capitalize on the most important investing force: time.

Multiply your efforts by using employer and government sponsored vehicles such as a 401k, IRA, and education IRAs.

For more information:

• 10 Easy Ways to Stash Away Thousands
• How Much Goes in the 401k?
• 10 New Years Money Resolutions, Part 1 (Save More Money)
• Saving for College -- Fast

Get a will — A will can ensure your assets will be divided according to your wishes, save thousands in taxes, and allow parents to designate their children’s caregivers. A simple will usually costs less than $200 and can be modified as your life changes. A “simple” will can be complicated for the average person and a do-it-yourself kit is not a bargain if something’s missing. Use a lawyer instead.

For more information:

• Benefits of a Will
• Financial Resolutions for 2006: Update Will

Give — Try to contribute something from each paycheck to your local church or charity. Remember, you’re rich compared to most of the world. Besides, giving helps focus on others and keeps finances in perspective—not letting them become an all-consuming part of our lives. Helping others meet their daily needs is a feeling no money can buy.

For more information:

• Why Give? Because It's Investing
• Give Smart
• Can't Give Money? There are Other Ways to Support Charities
• A Thought on Giving from David Bach
• The Power of Giving
• Five Tips to Make Your Donations Go Farther

Start working today on these suggestions, and within a year you’ll be well on your way to achieving the financial fitness you’ve always desired.

Review: The Number by Lee Eisenberg

Let me start by saying that I love to recommend products by nice people. When I contacted Lee Eisenberg to offer to review his new book, The Number, he responded quickly and was very polite. His publishing company was the same. And I received my audio version of The Number in a few days. I wanted so much to love this book -- these were such great people!

Over the next week, I listened to The Number while driving and working out. Here's a summary of the book:

• The Number is about retirement and what you will need to have saved to fund the retirement you want.
• It stresses that most people don't have a definite number in mind, haven't really fully thought through all the issues associated with retirement, and are woefully unprepared for life after work.
• The book also includes everything you want (and don't want) to know about retirement -- the history of retirement, the future of retirement, a fictional family and their retirement issues, real people talking about and dealing with the issue of retirement and on and on. You get the idea -- the book could be aptly titled "All Things about Retirement".
• Eisenberg is very funny and has a dry sense of wit which makes a totally boring topic rather bearable. He has the habit of referring to "financial advisors" as "brokers" which I particularly like. ;-)

As I said, I really wanted to like this book. But I have to be honest -- I didn't. It was long on words and short on practical application. It dealt with a lot of topics that I felt didn't need to be covered (at least in the depth they were discussed). It seemed to me that The Number was a really good 30-page book with a lot of other information/commentary thrown in to be able to call it a book and to justify the price. As a friend of mine said about it, "The only thing I didn't like about the book was that it was the same thing as the magazine article, available for free online, with a little/lot of fluff around it. But other than that, it was alright." Exactly.

My recommendation to you: check it out at the library, read the first 20 pages or so (so it can get you scared enough to take action on this issue), then read the last few pages that tell you how to roughly calculate your retirement number. Supplement this with a few magazine articles or web resources and develop your own plan (or go to a professional to help you). Other than those 30 pages or so, The Number is really not worth your time.

Free Money Finance Rating for The Number on a scale of 0 to 10: 3 Stars.

Free Money Finance books that earn 8 stars or more (not all money related):

• The Millionaire Next Door
• How to Win Friends and Influence People
• Your Best Life Now
• The Purpose Driven Life
• Think and Grow Rich
• The Power of Positive Thinking
• Richest Man in Babylon
• The Automatic Millionaire

Update: Here are some additional reviews to consider:

• Lee Eisenberg’s The Number
• Review of The Number by Lee Eisenberg, Part 1
• JLP Reviews Lee Eisenberg’s “The Number”

About Free Money Finance

I want to put all of my "about this site" information in one place, so I'm writing a post to do just that. ;-)

For those of you wanting to know about Free Money Finance, here's a bunch of information:

• My Story -- Details my financial history and qualifications for writing this blog based on personal experience.

• How I paid off my mortgage -- Details my last step in becoming debt free.

• About Free Money Finance -- Contains everything from why this site exists to ground rules and my promises.

• Contact Me -- Gives my email and an alternative email.

• Logo - Gives an update on the FMF logo as of January 2010.

• Disclaimer -- Use information on this site at your own risk.

• Reminder: Why You Shouldn't Listen to Me - I'm not a financial professional and don't claim to be one (heaven forbid!)

• Ad Policy -- Here are all the details on my advertising policies.

• Tour of FMF -- Here's a tour of the site I did some time ago.

• Blog Name -- Where did the name Free Money Finance come from? This post tells all!!

• Privacy Policy -- All the rules and regulations of online privacy here at FMF.

• Comment and Trackback Policy -- Added in February 2007.

• Some recommendations for Free Money Finance: Business Week, The Wall Street Journal, Technical Analysis of Stocks and Commodities, Barron's, and US News and World Report.

How to Get Your Blog to 100,000 Visitors and Beyond, Step 1; Pick the Right Topic

I've had a lot of requests to detail how I got 100,000 visitors (now past 150k as I write this) to Free Money Finance. While the topic is not clearly in the subject area of personal finances, it can be part of how you increase your income (and thus improve your net worth), so I'll cover it. Plus, this will serve to help out other bloggers as well as remind me of what else I need to do to grow this blog. If this isn't your cup of tea, simply ignore these posts. I post frequently enough that a new, money-related post is not far behind this one.

I'll over this topic in a series of "steps", each one presenting a simple, unique step I took to get to 100,000 visitors. I'll also try to keep the steps in the order I did them, though several happened simultaneously, so that won't be easy.

That said, here we go.

Step 1 to getting to 100,000 visitors and beyond: Pick the right topic.

This might seem to be a simple step (and maybe even counter blogging -- can't I just blog about what I want?), but it's critical. To me, the right topic is one that:

• You're passionate about -- If you're not passionate about it, you won't post regularly, you'll lose interest, and your readers will be able to tell your heart isn't really in it (and they'll go away). If you are, your readers will identify with you and get to "love" your personality. And they'll come back. And tell their friends to stop by.
• You're knowledgeable about -- You don't have to be an expert on the topic, but you need to know more than most people to get a lot of people to your site. Otherwise, why would they stop by (or come back)?
• Is popular -- Let's face it, if you want to write about the exercise habits of your hamster, not many people are likely to visit your blog. You have to have a topic that many, many people want to read about if you want to get to 100k. This isn't to say that you shouldn't write about your hamster (or anything else a large group wouldn't want to read about). If you blog for your own pleasure, then go for it -- make Hammy a star. But if you want to get to 100,000 visitors, you need a topic (like personal finances) that many people what to know more about.

Click here to read part 2 of this series.

Free Money Finance recommends Emigrant Direct.

Festival of Frugality

Welcome to the latest edition of the Festival of Frugality. For those of you who are new to the festival, it's simply a sampling of some of the best money saving articles from top personal finance bloggers over the past week. 

As is my "new" custom, I'm including the title of the post as well as a summary of the piece from the site itself or from the author's note to me. My thinking behind this is that there's no one better equipped to tell you what the post is about than the author. That said, here we go:

Plans Meals And Save On Groceries

Summary: "Everyone knows that cooking your own food is much cheaper than eating out or even buying prepared food but sometimes it’s hard to sit down and plan your meals a week in advance. Planning meals will reduce the amount of food you end up throwing away, which in most households is 14% of their food, up from 7% twenty years ago."

Efficient and Frugal Food Shopping

Summary: Flexo's spending on food doesn't make him happy. Here are some steps he may take in 2006 to rein in his spending in this category.

Employee Stock Purchase Plan

Summary: Early Riser explains how to make some easy and almost risk-free money through your employer's stock purchase plan.

Frugal Fridge?

Summary: "Ways to save energy with your fridge."

'Discount' Disney World Tickets

Summary: "A frugal tip for a decidedly non-frugal vacation...Disney World!"

Snowshoeing in the Washington Cascades

Summary: "Last Saturday I went snowshoeing in the Cascade Mountains an hour outside of Seattle. After an initial investment in gear (backpack, hiking boots, etc.) it is a very affordable pastime."

Why We Skip the Holidays Altogether

Summary: "Yep, Wenchypoo and Wenchmaster skip the holiday hullabaloo altogether and here’s why."

Check Out DVDs for Free

Summary: "Before visiting your local video rental store, you might want to consider making a stop at your local library since the selection at the library is continually growing."

Business Plan Archive

Summary: "Another free source of information, this time for entrepreneurs.  Hundreds of free sample business plans with supplementary materials."

Negotiating When Things Go Wrong

Summary: "When things don't go correctly or you're not satisfied with something it pays to complain."

Frugalities

Summary: "Make it do, wear it out, use it up, or do without..."

Saving Money on Groceries

Summary: "Discussion of a recent CNN/Money story on saving money on groceries."

Tour of Free Money Finance

I don't have an entry this week -- I'm just basking in the glow of all these other great posts. However, if you'd like to know more about Free Money Finance, you can take a mini-tour, check out my "Best" series posts to see what this blog is about, or see the top posts from a recent week.

Thanks for dropping in to this week's carnival!

Day Off

Just a note to let you know I'm taking today off and enjoying the holiday with my family. Hope you're doing the same. ;-)

I'll be back to blogging tomorrow.

Merry Christmas!

Luke 2:1-20 (NIV)

In those days Caesar Augustus issued a decree that a census should be taken of the entire Roman world. (This was the first census that took place while Quirinius was governor of Syria.) And everyone went to his own town to register.

So Joseph also went up from the town of Nazareth in Galilee to Judea, to Bethlehem the town of David, because he belonged to the house and line of David. He went there to register with Mary, who was pledged to be married to him and was expecting a child. While they were there, the time came for the baby to be born, and she gave birth to her firstborn, a son. She wrapped him in cloths and placed him in a manger, because there was no room for them in the inn.

And there were shepherds living out in the fields nearby, keeping watch over their flocks at night. An angel of the Lord appeared to them, and the glory of the Lord shone around them, and they were terrified. But the angel said to them, "Do not be afraid. I bring you good news of great joy that will be for all the people. Today in the town of David a Savior has been born to you; he is Christ the Lord. This will be a sign to you: You will find a baby wrapped in cloths and lying in a manger."

Suddenly a great company of the heavenly host appeared with the angel, praising God and saying, "Glory to God in the highest, and on earth peace to men on whom his favor rests."

When the angels had left them and gone into heaven, the shepherds said to one another, "Let's go to Bethlehem and see this thing that has happened, which the Lord has told us about."

So they hurried off and found Mary and Joseph, and the baby, who was lying in the manger. When they had seen him, they spread the word concerning what had been told them about this child, and all who heard it were amazed at what the shepherds said to them. But Mary treasured up all these things and pondered them in her heart. The shepherds returned, glorifying and praising God for all the things they had heard and seen, which were just as they had been told.

Countdown to Christmas, Luke: 2:15-20

When the angels had left them and gone into heaven, the shepherds said to one another, "Let's go to Bethlehem and see this thing that has happened, which the Lord has told us about." So they hurried off and found Mary and Joseph, and the baby, who was lying in the manger. When they had seen him, they spread the word concerning what had been told them about this child, and all who heard it were amazed at what the shepherds said to them. But Mary treasured up all these things and pondered them in her heart. The shepherds returned, glorifying and praising God for all the things they had heard and seen, which were just as they had been told.

Posts of the Week -- December 19

Here are my picks for the best of Free Money Finance this week:

• Calculating the True Cost of a Pet
• Comments: Why The Roth 401(k) Is A "Dud" So Far; Wait and See
• My Review Rating System

Hope you all have a very merry Christmas!

Free Money Finance recommends Emigrant Direct.

My Review Rating System

As you might imagine, I'm getting some requests to review new/soon-to-be-out books (and other products). I thought I'd use this post to share with you what sort of system I'll be using to rate these items. And since most of the products will be books, I'll put the scale in terms of a book.

Before I detail my system, I must clarify that I listen to far more books than I read. Listening to an audio CD takes a lot less time than reading and can be done while I'm doing something else (exercising, driving, mowing the lawn, etc.), so this is my preference when it comes to "reading" books. In the rating system below, I take into account that audio CDs require much less time commitment than reading and can be done while accomplishing other tasks. As such, some books that may not be good enough to warrant reading time will be good enough to listen to.

On the other hand, I prefer paper books if the book is something I'll want to refer to from time to time or has several important passages that I'll want to review. I underline, highlight and take notes in the book itself for future reading, review and studying. You can't really accomplish this with an audio CD.

That said, I plan to rate all my reviews on a 0 to 10 system (giving a number of stars for the products) using the following guidelines:

0 stars = Hope and pray you don't hear about this book ever again. It's not worth your time to even listen to it.

1 star = Ok, it may have some redeeming value, but it's still not worth your time to read (or even listen to the audio CD).

2 stars = It's "ok" or "fine", but certainly nothing special. Check out the audio CD at the library and skim it for the important parts.

3 stars = The book has some content that makes it worth the time to check it out at the library if you can't find the CD. Skim it for the important parts.

4 stars = Worth listening to the entire book once. Check out the audio CD at the library, listen to it, and apply as appropriate.

5 stars = It's worth the time to check it out at the library and read the book. Apply it as needed.

6 stars = Buy the audio CD, listen to it as many times as needed to fully understand and apply it.

7 stars = Buy the book, read it as many times as needed to fully understand and apply it. Underline the important parts. Refer to it as needed.

8 stars = Buy the audio CD, listen to it several times, and take notes on what to apply. Listen to it on a regular basis (at least once every other year or so) to remind yourself of the key principles.

9 stars = Buy the book, read it several times, and take notes on what to apply (underlining the important parts). Read it on a regular basis (at least once every other year or so) to remind yourself of the key principles.

10 stars = Contains positive, life-changing concepts with eternal principles that can impact your life dramatically. Read it regularly and make sure its key principles are part of your annual resolutions. Do all you can to get as many people as possible to read the book, knowing it will help them out. Give it as gifts, talk about it to friends, and promote it in your business.

As you can imagine, there are only a few books that get an 8 or above from me. A short list of books (not all money related) I'd put in this category are:

• The Millionaire Next Door
• How to Win Friends and Influence People
• Your Best Life Now
• The Purpose Driven Life
• Think and Grow Rich
• The Power of Positive Thinking
• Richest Man in Babylon
• The Automatic Millionaire

10 New Years Money Resolutions, Part 10

Here's part 10 of a series from Money magazine that lists their 10 New Years Money Resolutions:

Resolution 10: Craft a long-term plan

You've set the perfect investment plan in motion. But over time, as markets rise and fall, that ideal allocation will get out of whack. The solution: Get back on course by periodically selling some winning investments and buying more of your laggards.

1. Make it routine.

2. Get a before and after shot.

3. Fix your mix.

My thoughts:

1. I need to look at rebalancing my portfolio when I evaluate my investments this year. I haven't done it for awhile.

2. It will help that I'm going to be reducing my number of holdings this year.

3. For more investment-related posts, see these links:

• Kidding Around: A Capital Gains Idea
• Fund Indexers, Take (Another) Bow
• Part-Time Investing
• 4 Habits of Successful Investors

A Dozen Creative Donations, Part 13

Here's part 13 of an absolutely great article from Kiplinger's on ways to give if you don't have cash. It's a reminder to check out any charity you are thinking of donating to:

However you choose to give, it's important to check out the charity first to make sure it is legitimate and that your money, goods or services will be used to the fullest potential. You can research an organization online through the American Institute of Philanthropy, Better Business Bureau, Charity Navigator or GuideStar.

Good advice. You want to make the most of your giving -- not waste it on an unworthy organization.

10 New Years Money Resolutions, Part 9

Here's part 9 of a series from Money magazine that lists their 10 New Years Money Resolutions:

Resolution 9: Cut your taxes

Americans routinely let many valuable tax breaks go unclaimed. For instance, a 2002 government study found that up to 2.2 million taxpayers overpaid, by an average of $438, because they claimed the standard deduction instead of itemizing.

Here's how to hold on to what's yours.

1. Invest in an accordion file.

2. Take the write-offs.

3. Maximize pretax savings.

My thoughts:

1. We keep a file for all our tax-related receipts each year. We drop receipts in the folder throughout the year and when we get ready to do our taxes, everything's ready. It's a great system.

2. I use a CPA to do my taxes. It's worth the expense in the time it saves me. Not to mention the headache.

3. As I've mentioned before, I fully fund my 401k. It gives me the maximum tax advantages this year and builds lots of (really good) savings for the future.

4. Here are some more posts I've written on the subject of taxes:

• Property Tax Tip
• An Alternative to Increasing Income Taxes?
• 5 Audit Red Flags
• 7 Big Tax Changes Money Central Wants to See, Part 1

Click here to read part 10 of this series.

A Dozen Creative Donations, Part 12

Here's part 12 of an absolutely great article from Kiplinger's on ways to give if you don't have cash:

Get a haircut. Have you been mulling a new look for the New Year? Cut off your long hair and send your shorn locks to organizations that will use it to make wigs for children who have lost their hair due to medical treatments. Locks of Love requires donations measure at least 10 inches in length, and Wigs for Kids requires 12 inches.

My wife did this a few years back. It was like being married to a hippie, her hair was so long (it needs to be long enough so when you cut it the person isn't bald). I think it was more painful for me than it was her, though the effort was for a very good cause.

Click here to read part 13 of this series.

Countdown to Christmas, Luke: 2:12-14

This will be a sign to you: You will find a baby wrapped in cloths and lying in a manger." Suddenly a great company of the heavenly host appeared with the angel, praising God and saying, "Glory to God in the highest, and on earth peace to men on whom his favor rests."

10 New Years Money Resolutions, Part 8

Here's part 8 of a series from Money magazine that lists their 10 New Years Money Resolutions:

Resolution 8: Get healthy

These days the classic New Year's get-healthy resolution -- shed those extra 10 pounds, kick the nicotine habit, dust off the old gym membership card -- has been joined by a new one: Lower those out-of-pocket health-care costs.

In this case, one action plan will help you reach both goals, since adopting healthier habits throughout the year should automatically trim your medical bills as well.

1. Take small steps (But lots of them).

2. Get free help.

3. Reap the rewards.

My thoughts:

1. What a great deal -- get healthier AND save money! Save on coffee costs, cigarette expenses, insurance premiums and more!

2. I started bike riding a couple years ago and really committed to it last year (I rode over 4,300 miles from December 2004 through October 2005 -- but I started training for the season way, way too early). This year, I'm working more on cross-training during the off season and will get back on the bike in March. It's a great way to stay in shape and have lots of fun (I ride 100-mile events with a team of riders. We raised almost $50,000 for charity last year.)

3. Here are some more Free Money Finance articles related to this topic:

• Stop Smoking -- It's Killing Your Finances
• Comments: Stop Smoking
• Stop Smoking, It's Killing the Nation's Finances

Click here to read part 9 of this series.

10 New Years Money Resolutions, Part 7

Here's part 7 of a series from Money magazine that lists their 10 New Years Money Resolutions:

Resolution 7: Free up more time

Making time for yourself and your family is the top goal for 2006, according to a MONEY poll. Lack of time is really two problems: You probably are too busy, and you aren't making the best use of the spare time you have. The action plan below will help you address both.

1. Outsource a task (or two or three).

2. Automate bill paying.

3. Take a vacation.

4. Relax, really.

My thoughts:

1. I've written a bit about the value of time. You can see these posts at the following links:

• Simple Ways to Save Hours of Your Time
• What's Your Time Worth?
• Comments: What's Your Time Worth?; An Opinion

2. We have four vacations built into our calendar every year: three visits to family around the U.S. and one visit from my parents. We've done this every year for several years, so it's a built-in time of "relaxation" (if you can call them that). ;-)

3. In addition, this year we want to take a special vacation with our kids. Since we live only a few hours from Chicago, we've thought about a vacation there to see all the museums, the aquarium, etc. My wife and I did that alone a few years ago and really enjoyed it. I think our kids would love it.

4. I also plan to ride in a few (2-3) centuries (100 miles on a bike) this year, so these will be mini-vacations for me.

Click here to read part 8 of this series.

13 Unconventional Investments, Part 14

Here's part 14 of FORTUNE's "Believe It or Not" investment gallery -- some of the most unconventional investments of all time:

Ted Turner sold off most of MGM as soon as he bought it in 1986 (he paid Kirk Kerkorian $1.5 billion), but he held on to the pre-1986 film and TV-show catalogs. In 1988 he used the film library to start TNT. Turner sold his media holdings to Time Warner in 1996; now classics like Casablanca are raking in the DVD dough.

So who made the killing here? Turner or Time Warner?

Free Money Finance recommends Emigrant Direct.

10 New Years Money Resolutions, Part 6

Here's part 6 of a series from Money magazine that lists their 10 New Years Money Resolutions:

Resolution 6: Protect your family

There's a simple reason that 55% of Americans don't have a will: "It's difficult to talk about death and money," says Colleen Barney, author of Best Intentions: Ensuring That Your Estate Plan Delivers Both Wealth and Wisdom. And it's even harder to make emotional choices about, say, who will raise your kids. But ignoring the topic could one day leave those tough decisions in the hands of a probate court judge. Try reducing the tension in the situation with a highly pragmatic approach.

1. Start the conversation.

2. Choose a guardian.

3. Make it public.

4. Write the will.

My thoughts:

1. As I've posted previously, updating my will is one of my resolutions for 2006.

2. Also see Benefits of a Will from Free Money Finance.

Click here to read part 7 of this series.

Calculating the True Cost of a Pet

Well, well, well. The Wall Street Journal is finally getting with the program.

With their article on Calculating the True Cost of a Pet this past weekend, they join the likes of these "famous" (or should I say "infamous"?) posts by me:

• How Much Would You be Willing to Spend to Save Your Pet's Life?
• Cost of a Pet is $48,000!!!
• Financial Horror Stories from Pet Owners

Though they come up with less of a cost than I do, they still show that it's an expensive undertaking. here's the bottom line:

How much? Almost $12,000 over a lifetime for a small dog that lives 15 years, and more than $23,000 for a larger breed that lives for 12. Those are just averages; the numbers grow quickly if, say, illnesses require trips to the vet.

I can hear the throngs screaming, "NO WAY!!! There's no way my Poopsie costs this much!!! What animal-hater calculated this number?"

Not an animal-hater at all. It's from an animal lover:

These figures come from Jim Wilson, a veterinarian, lawyer and consultant who has created a detailed spreadsheet, down to the last chew toy, using data from the American Pet Products Manufacturers Association, the American Veterinary Medical Association and owners. Dr. Wilson crunched the numbers as part of his research into damages in lawsuits over pets and his work for a pet-insurance company.  "People think they can get the puppy from the pound for $125," he says. "And they honestly don't have a clue as to what the annual costs are going to be."

Here are some other quotes I found interesting:

Some highlights from the spreadsheet: "Destruction of Household Items" averages $1,000 for a larger dog. Dr. Wilson knows of a Weimaraner that chewed up $3,500 worth of SUV dashboard. "Sometimes a tail takes out a whole table, and then you have broken china, red wine stains," he says. "Nobody takes that into account."

It's the veterinary bills that can really add up. These days it's a snap to spend a four-figure amount or more on care that wasn't even available a decade ago. That can lead, inevitably, to difficult choices. Trade journal DVM Newsmagazine asks vets every three years for the dollar amount at which most clients would stop treatment. In 2003, it stood at $961, up 67% from the 1997 figure. A 2004 American Kennel Club survey of dog owners found that 14% said their current ownership costs would deter them "significantly" or "quite a bit" from getting another one.

Then the article gives some hints on how to minimize your pet costs:

• Before you buy, see a vet for a "pet selection" appointment. Once there, ask about recurring costs and potential genetic and behavior problems.
• Also set a realistic budget.
• Finally, consider insurance.