Free Money Finance

How to Get Out of Debt

I've written a lot about debt, getting out of debt, credit card debt and the like over the past year at Free Money Finance, yet somehow I keep finding more pieces to highlight on the subject. This one from Yahoo offers 11 tips on how to get out of debt. Their thoughts:

1. Use cash.

2. Get debit cards.

3. Leave your cards at home.

4. Don't close the accounts.

5. Do some comparison shopping.

6. Consider a balance transfer.

7. Ask your current company to lower its rates.

8. Figure out what you really owe.

9. Focus on the highest-rate card first.

10. Automate your current minimums.

11. Go in order.

My thoughts on these:

1. Cash is not only a great way to keep from putting extra amounts on your credit cards, but it also will save you money.

2. Debit cards are just like cash as they take money from your account immediately. They're a decent option.

3. It's very difficult to charge on a card that's not with you. ;-)

4. Keeping a credit card open but unused can be good for your credit score, which can save you thousands of dollars.

5. Always shop around for everything -- car insurance, places to buy an appliance, and, yes, even for credit card rates.

6. Could be the result of what you find from your research in #5.

7. What you find in #5 could help you negotiate with your current company and get them to lower your rates without a change.

8-11. Here are my suggested steps for getting out of credit card debt.

Secrets of the Wealthy: Five Lessons from the Rich

I'm a big believer in learning from people who've actually done what you want to do -- versus from people who talk a good story but are making no progress whatsoever (unfortunately, many "financial advisors" fall into this latter category). That's not to say I don't listen to people who are "not yet there," but I do require some sort of forward progress towards their goal before I seriously consider what they have to say.

When I apply this philosophy, I think of the rich, wealthy people out there and what I can learn from them (especially the ones who have earned their wealth themselves). Lucky for me, I found this article from Money Central that lists five lessons from the rich. Their list:

1. They give away more.

2. They are much more likely to own businesses.

3. They borrow strategically.

4. They don't blow a lot of money on cars.

5. They're almost always homeowners, and many own investment property, too.

My thoughts on these:

1. Many of the rich seem to be regular givers and I've noted how it seems that there is a power in giving. If you want to give but can't afford cash, there are many other ways to give to charities.

2. While owning a business isn't for everyone, there are ways that anyone can earn some extra money.

3. Translation: they don't have nearly as much credit card debt. Smart move.

4. Cars are depreciating assets. These people borrow for homes and businesses -- things that gain in value or spit out cash.

5. As David Bach says, homeowners get rich and renters stay poor.

6. I'm surprised there's not more here on spending less than you earn. It is implied throughout this piece though -- as it should be. Why? Because it's the one path to wealth that anyone can use -- no matter their income level. In fact, it's the first step in becoming a millionaire.

Money Central ends the piece with a nice wrap-up that I just had to include here:

The lessons here aren't revolutionary, but they're well worth learning: Don't be a miser, take strategic risks, live within your means, diversify. You may never make the Forbes 400 list of the wealthiest people, but you can create a richer life.

Yep. These are the same thoughts I noted in the Free Money Finance Guide to Getting Rich.

Want some more posts that show how simple it is? Check these out:

• How to Become a Millionaire (How to Become Rich)

• Getting Rich is Simpler than You Think

• U.S. Millionaire Count Hits Record -- You Could be Next

• How Average Joes Can Retire Rich

Free Money Finance in Five Carnivals This Week

Free Money Finance is part of five carnivals this week. Here are the carnivals and my posts that were included in each:

• Carnival of Personal Finance - Free Money Finance Guide to Making More Money

• Festival of Frugality - How to Make a Million Dollars in Ten Years, Part 2: Saving Money

• Carnival of the Capitalists - Maximize Your Career Earnings: Get a Degree and Manage Your Career

• Carnival of Debt Reduction - Good Debt versus Bad Debt

• Carnival of the Vanities - Free Money Finance Guide to Making More Money

Stop by these carnivals to read some great posts!

Free Career Intensity Daily Book Giveaway at Free Money Finance, May 31

I'm giving away free books the rest of May and the entire month of June!!!!!

Our winner of yesterday's Career Intensity book giveaway was: Holly (comment posted at 2:48 pm yesterday) Congrats! Be sure to email me the name and address where you want the book to be sent as well as if you want the author to sign it for you or to a special person (I'll need the name). I'll send you a confirmation email that I got your note. If you don't hear from me, I didn't get your email. BTW, the books are shipped out every Friday by media mail, which can take 2-3 weeks to receive from the time they are mailed.

For the rest of you, there's another giveaway today. Here's how the giveaway works:

1. Every day, I write a post (like this one) that announces the Career Intensity book giveaway for that day. (FYI, read my review on the book here -- I gave it 8 Stars.)

2. All you need to do is leave a comment on that post (only one comment/entry per person, please). This will enter you in the drawing for that day.

3. Sometime the next day (usually in the morning, but not always, my schedule won't allow it) I'll announce the winner for the previous day's giveaway as well as the new giveaway for that day.

4. If you're named the winner, you'll need to email me the name and address where the book should be sent. Note: I will not be sending you an email telling you you've won, you'll need to check the site. If you want to look at all the posts/winners, click on my giveaway category link. If I don't hear from you in a week, I will give the book to someone else.

5. The process repeats over and over all the way through June 30.

6. I'll throw in some "special giveaways" quite often, so stay tuned to Free Money Finance.

As for rules, they simply are:

1. If you leave more than one comment on any one giveaway, your entries will be invalid for that particular giveaway.

2. Once you win a book, you can't win another one. But if you have won a previous giveaway here at Free Money Finance, as long as it wasn't for this book, you are eligible to win this book.

3. The drawing will be final and I will be the complete and final judge.

4. U.S. mailing addresses only.

Good luck! Post a comment below for a chance to win tomorrow's giveaway!

Money Saving Tip: Shop Now for Winter Clothes

I know that most of the U.S. has been in full spring to early summer mode for awhile, but here in Michigan, we're just entering a regular spring-like weather pattern (we had frost/freeze warnings a week ago!). As such, here's a money saving tip I'm currently taking advantage of and you can too every clothes-shopping season:

Shop end-of-season and clearance sales when you can save anywhere from fifty to seventy-five percent. If you do this at the end of each season, you’ll always have new clothes when a season starts!

I've picked up some cold-weather clothes on the bargain rack recently and saved a TON. I'm also looking forward to putting on my "new" summer clothes -- ones that I purchased last year at great deals. You can do the same and save a bundle on clothing-related expenses.

Identity Theft Statistics, Part 4, Is Identity Theft on the Internet Growing?

Here's part 4 of an interesting article from Money magazine that lists several identity theft statistics -- many of which I found surprising. It's done in a question and answer format, so here is today's question:

Identity theft on the Internet is growing.

The answer:

False. Online fraud made up 9% of ID theft cases in which the source was known last year, down from 11.6% in 2004. People who bank online typically uncover fraud in 22 days vs. more than a month for paper accounts.

My thoughts:

1. I'm not sure I buy this information. Online may be down as a percentage, but the total number of cases could still be up (may the other forms of ID theft have grown at faster rates). I can't tell the true story from these stats though, there's not enough here.

2. Either way, I am surprised that Online ID theft isn't skyrocketing. With all the pfishing going on, I thought it would have been much, much higher.

3. Looks like there's another advantage of banking online -- faster detection of ID theft.

Click here to read part 5 in this series.

Save Money on Child Care

Those of you who have regular child care costs know how expensive it can be. We don't have this on-going expense, but we do hire babysitters when we go out, and that alone can add a significant amount to the total cost for an evening. That's why we try to trade off babysitting expenses with friends -- it can save a ton of money.

But many people face much more than the occasional babysitting fees. They have regular (often daily) child care costs that they have to budget for and pay. Here's an article from Money that lists a few ways these folks can save money on child care:

• Get federal tax credit for child-care expenses.

• Share a full-time babysitter with another family.

• Consider cheaper alternatives like a nonprofit day-care center run by a church or the YMCA.

• Barter -- ask about swapping services for a break on day-care tuition.

I think the last one is especially interesting -- offer to trade your skills for free (or reduced) child care fees. Anyone out there tried this successfully?

Since we don't have this sort of expense, I can't offer a whole lot of extra do's and don'ts, but I'm sure some of you reading this have some great ideas. Please share them below in the comments with the rest of us. We'd love to hear how you save money on your child care costs.

Identity Theft Statistics, Part 3, What Type of Identity Theft is the Most Difficult to Detect?

Here's part 3 of an interesting article from Money magazine that lists several identity theft statistics -- many of which I found surprising. It's done in a question and answer format, so here is today's question:

What type of identity theft is the most difficult to detect?

The answer:

Fraudulent accounts opened in your name. It takes an average of 152 days for victims to find out that a new account has been opened in their name. That's because only a credit report or notice from the lender or a collection agency will alert you to the new account's existence.

My thoughts:

1. I would have thought "charges to a credit card you already have" would have been the "winner" here.

2. This is why I have checking my credit reports as part of my New Years resolutions.

Click here to read part 4 of this series.

It's Not What You Make, It's What You Spend, Part 437

Why is it the same story over and over again? Do people never learn? Or maybe they're just not reading Free Money Finance. ;-)

Anyway, here's yet another story of a couple who, though they make a great income, aren't making much financial headway because they are spending like crazy. I've detailed this problem before in the following posts:

• How a Billionaire Can Go Broke

• The Best Financial Advice I Can Give, Part 2

• It's Not What You Make, It's What You Spend

• Michael Jackson and More: It's Not What You Make, It's What You Spend

• It's Not What You Make, It's What You Spend, Part 3

• Comments: Spend Less than Your Earn

• How You Can Become Wealthy

Here's the situation on this couple from USA Today -- with comments from me added in:

Tim earns more than $100,000 a year as a senior bank loan officer; Caren makes about $65,000 a year as a physical therapist.

A couple things here. First, they make a good income. $165,000 a year is nothing to sneeze at. Second, the guy is a senior executive at a BANK. You'd think he'd know a few things about handling money. Guess again.

Yet despite their ample salaries, they say they're "absolutely unable to put money aside, except with retirement accounts."

Dinners out, fixing up the house and splurging on gifts for each other and for Edson, 13 are some of the indulgences they find hard to resist. They seldom argue about how much they spend, they say, because they both do too much of it.

Yes, it's the same old story. Even if you earn $165,000 a year, if you spend $180,000 a year, you're going backwards.

This also reinforces what I see a lot with financial "experts" -- planners, advisors, journalists, etc. They may have some knowledge about how to handle money, but they lack the discipline to actually put it into practice. I've recently seen planners talk about how they have credit card debt, journalists admit that they can't control their spending, and advisors admitting their savings plans are non-existent. And this is coming from people who have good knowledge of personal finances. But I would never take their advice if they can't follow it themselves. An undisciplined advisor is just like a fat doctor to me -- and someone I won't use or recommend.

A heavy debt load stands in the way of putting away more retirement money. The couple owe $285,000 on their mortgage — most of it at a 6% fixed rate — plus about $125,000 in other debt, including on credit cards and loans to buy a car, a motorcycle and a boat. Their plans to install a new hardwood floor and a pool in the near future could push them deeper in the red.

At this point, I'm close to slitting my wrists...

One thing they're not worried about is the cost of Edson's college education. They've decided that college expenses shouldn't derail their retirement savings. "We basically told him that he can work his way through college," Caren says. "He can get loans; he can get a job. That's what makes the world go 'round."

Oh, sure. Shaft your son's college education because you can't control your spending. Real nice. I guess they're even below the inadequate average savings Americans have for their college-bound teenagers.

The story of this family continues in another piece, this one where a financial planner gives them some advice. The main thoughts:

Bill Hart, a financial planner in Jacksonville, is calling for a "lockdown" on discretionary spending by the Mayberrys for at least a year. "What's hard about this is that you guys have developed habits, and you have to break those habits," such as eating out regularly, says Hart, co-founder of Retirement Strategies.

A limit on spending means not installing that pool. And no new hardwood floors — at least for now, the planner advises. The couple must focus on paying off debt and boosting savings to increase their chances of being able to retire within 15 years, he adds.

Ya think? How about putting them on a BUDGET!!! ;-)

The good news is that it appears that the couple is taking these recommendations to heart:

When the Mayberrys sat down with Hart more than a month ago, the couple's goal was to be free of all liabilities, except mortgage debt, in four years. But after seeing their debt and savings figures splashed across the pages of a financial plan, they've decided to act more quickly. They hope to get rid of all their debt, except their mortgage, as soon as possible so they can focus on saving. "If we really work hard on this, we can do it in 12 months or by the end of next summer, maybe 15 months," Caren Mayberry says.

However, the planner warns of something I was thinking of myself:

Hart gives the couple an "A+ for motivation" but reminds them that, "This is a marathon, not a sprint."

The piece goes on to list the other steps they are taking. They're on the right path now -- I just hope they can stick to it.

I don't need to say this, but I am anyway: it's not what you make, it's what you spend. If you spend more than you make, you're going to go backwards financially. On the other hand, if you spend less than you earn, you're on the path to becoming wealthy.

Pay Debt versus Establish an Emergency Fund versus Saving -- Which to do First?; Free Money Finance Guide to Saving, Investing, and Paying Off Debt

There's an on-going debate around what you should do if you're in debt: pay off your debt first or establish an emergency fund, then pay off the debt. My basic philosophy was detailed in Comments: Over One-Quarter of the Population on the Brink of Financial Disaster, Need Discipline where I stated:

I recommend paying off the debt first because: 1. it's costing you money (a lot) that's digging you deeper into debt and 2. if you pay it off, it's not like that money's gone. You can charge again if you HAVE to (if you get into trouble financially) This has the same effect as saving money for future expenses. However, if you save first, you're paying interest on the debt the entire time you're saving. Doesn't seem like a smart move to me.

To add a few more specifics to this, here's what I'd recommend as the order:

1. Pay off high-interest, credit card debt.

2. Establish an emergency fund.

3. Pay off other debt.

To add to the debate, here's a piece from USA Today that throws another element into the mix -- saving (in particular, for retirement). They give some thoughts on paying off debt versus establishing an emergency fund versus saving for retirement. But first, they tackle the debt versus emergency fund issue. Their thoughts:

The return on paying off debt is roughly equal to the interest rate you pay. Many credit cards charge 18% or more: You'd be hard-pressed to find another investment earning 18%. "It's like giving yourself a risk-free 18% return," says Don Lutomski, a financial planner in Birmingham, Ala.

Consider a couple with $10,000 in credit card debt. They paid 18% interest. The credit card company requires them to pay at least 4% of their balance each month, or $35, whichever is larger. If they paid just the minimum, they'd be paying for more than 10 years. Total interest: $5,575.

But if they paid $100 more than the minimum each month, the couple would end up repaying the entire balance in 50 months, a bit more than four years, saving $2,285 in interest. Best of all, they would have wiped out their debt, boosting their cash flow by $265 a month.

By contrast, the returns from a savings account seem paltry. Had you stashed your $100 a month into a bank savings account paying 5% for 50 months, you'd have about $5,424 in your account at the end of the period. You would have earned just $425 in interest.

This is the same rationale that I use when recommending that people pay off credit cards first. Financially, it's just the better option of the two.

But USA Today isn't making this a firm recommendation. They hedge their bets a bit here, noting later in the article that emergency savings are important too (which I agree with), especially when you lose your job. As such, here's their recommendation:

Your best strategy: Build up your savings at the same time that you pay down debt.

Now that's useful advice, huh? Why not just state the obvious?

It doesn't seem very practical to me to do both -- besides, it really results in no recommendation at all. I'd love to say "do it all" in all of my recommendations, but that's not very helpful in my opinion.

The rest of the article hems and haws and really doesn't make a complete recommendation, so I'll make one:

1. Spend less than you earn. This alone is THE key to getting rich. Said another way, save a portion of all you make.

To spend less than you earn, you may need to earn more or spend less.

2. Contribute to your 401k to get the full employer match.

3. Pay off your credit card debt.

4. Establish an emergency fund.

5. Pay off all other debt.

6. Invest your savings regularly in good, solid investments. I like index funds.

7. Do this for a long time, letting the power of time and compounding work for you.

Free Career Intensity Daily Book Giveaway at Free Money Finance, May 30

I'm giving away free books the rest of May and the entire month of June!!!!!

Our winner of yesterday's Career Intensity book giveaway was: MM (comment posted at 11:21 pm yesterday) Congrats! Be sure to email me the name and address where you want the book to be sent as well as if you want the author to sign it for you or to a special person (I'll need the name). I'll send you a confirmation email that I got your note. If you don't hear from me, I didn't get your email. BTW, the books are shipped out every Friday by media mail, which can take 2-3 weeks to receive from the time they are mailed.

For the rest of you, there's another giveaway today. Here's how the giveaway works:

1. Every day, I write a post (like this one) that announces the Career Intensity book giveaway for that day. (FYI, read my review on the book here -- I gave it 8 Stars.)

2. All you need to do is leave a comment on that post (only one comment/entry per person, please). This will enter you in the drawing for that day.

3. Sometime the next day (usually in the morning, but not always, my schedule won't allow it) I'll announce the winner for the previous day's giveaway as well as the new giveaway for that day.

4. If you're named the winner, you'll need to email me the name and address where the book should be sent. Note: I will not be sending you an email telling you you've won, you'll need to check the site. If you want to look at all the posts/winners, click on my giveaway category link. If I don't hear from you in a week, I will give the book to someone else.

5. The process repeats over and over all the way through June 30.

6. I'll throw in some "special giveaways" quite often, so stay tuned to Free Money Finance.

As for rules, they simply are:

1. If you leave more than one comment on any one giveaway, your entries will be invalid for that particular giveaway.

2. Once you win a book, you can't win another one. But if you have won a previous giveaway here at Free Money Finance, as long as it wasn't for this book, you are eligible to win this book.

3. The drawing will be final and I will be the complete and final judge.

4. U.S. mailing addresses only.

Good luck! Post a comment below for a chance to win tomorrow's giveaway!

Comments: Maximize Your Career Earnings: Get a Degree and Manage Your Career

On my post titled Maximize Your Career Earnings: Get a Degree and Manage Your Career, I had someone comment that the percentage increases I used for salaries seemed unrealistically high. His thoughts:

Your point #3 is puzzling. What line of work permits such phenomenally large percentage raises every year? Most companies I know of have a pretty restricted latitude regarding annual raises, with the maximum raise seldom more than a few percent above cost-of-living. In my experience, the only time one is able to get a substantial (10s of percent) raise is when you change jobs.

That, of course, just makes the improvement in starting salary due to education all the more important.

Here's how I responded:

These represent average amounts over the course of a career and take into account the combination of the following:

• Regular, annual increases - As you note, these are usually fairly low. If you rely on them only, it's likely you won't be able to achieve the higher rates I note.

• Promotions within the same company -- When people get promoted to new levels of responsibility, they often get pretty good bumps in pay. Companies I've been with provide 7-12% increases when a promotion occurs.

• Taking a new job with another company -- This is where you can really get a good increase. I've had up to 20% increase in one year by switching to another company.

Don't look at the increase percentages in the post as something you'd get EVERY year, but something you'll AVERAGE. For instance, the 10% numbers above don't mean that you'll get 10% increases every year, but some you may get 3%, some you may get 8%, others you may get 15%, and so on -- they'll average out to 10%.

And 10% is achievable -- I've done it. But you must actively manage your career, you can't sit back and just let it happen. That's the point of the post. If you do just sit back, you'll be in the lower end of the increase levels.

A couple key takeaways I'd like to reinforce with everyone:

1. Getting the higher level of annual increases takes work. You need to actively manage your career and be a solid performer. You don't earn 10% increases per year just by sitting around a doing only what's "required."

2. Taking steps to actively manage your career can have a HUGE impact on your finances. Just read Maximize Your Career Earnings: Get a Degree and Manage Your Career and see how the difference can be millions of dollars over your lifetime.

Turn Your Hobby into a Career and Love What You Do While You Earn

One of my first posts here at Free Money Finance has also been one of my most popular. It was titled Turn a Hobby into Income and suggested taking something you love (gardening, restoring classic cars, collecting antique jewelry, etc.) and developing it into an extra income. Who wouldn't love making extra money off something they loved doing? No wonder the post has been so popular.

Well, here's another article that's very similar. This one tells the story of a guy who turned his love of mountain biking into an entirely new career. Here are the details:

Petro owns and operates Ray's Indoor Mountain Bike Park in Cleveland, Ohio, the world's only indoor mountain-biking venue.

Petro, a remolding contractor, started mountain biking in the spring of 1996 to improve his health. "I was out of shape, and I was nearing 30, and I was like, I've got to do something."

Petro cashed in his life savings. "I took everything I had and then some and just spent it all on wood for me and my friends to ride," Petro says. "I wasn't afraid of being broke. It was like something just said I had to do it."

The article focuses much more on "he loves what he's doing" than "he's actually earning a living from it." In fact, there is not financial information at all. However, it still reinforces the point that it's possible to do what you love AND also make some money at it. For most of us that means some side income, not a full-time job, but that's still pretty good. Wouldn't you love to make some extra spending money from growing roses, cycling, working out or some other favorite hobby?

Which leads me to some questions: what's the hobby you have that you'd like to turn into an income? Have you ever tried to make money off of it? Why or why not? What happened? Let us all know your experiences in the comments below -- I'm sure there are some interesting stories out there.

Interview with John C. Bogle on Investing

As most of you are aware, I'm a big fan of index fund investing. And my company of choice to invest in index funds is Vanguard (great-performing, low-priced funds). So when I saw this interview with Vanguard founder John C. Bogle, I had to post on it. It's a very long interview and I can't cover everything I'd like to, but here are my favorite quotes from the piece and my comments on them:

The whole retirement system, in fact, in the country is in, I think, very poor shape, and it's going to be the next big financial crisis in the country, I honestly believe. ... The private pension plans are underfunded by an estimated $400 billion, and the state and local government plans are underfunded by an estimated $800 billion. That's a $1.2 trillion shortfall between the assets the plans have and the liabilities they will have to the pensioners as they pay out their retirement checks over the rest of their lifetimes.

I don't think it's a surprise to anyone that our retirement system will face major challenges in the future. People keep spending, not saving, and as such are probably going to have to work longer before retiring. This is not necessarily bad -- there are great benefits to working longer -- as long as retirees can work. If they get into a situation where they must work but can't, that's where the problems begin.

What do people need to put aside to have a decent retirement that will enable them to live at roughly the same standard of living that they were living at when they were working?

To begin with, it's age-intensive. If you start early, it can be a much smaller portion. If you get to age 40 and haven't started, you probably have to put away 25 percent of your income.

This is simply an economic fact. It again demonstrates the power of compounding.

So what do you say to the great mass of people who feel terrific about putting away 6 percent a year, with a 3 percent employer match -- that is, 9 percent a year combined starting at around age 35? What do you say to them?

You'd better step it up if you're putting 9 percent in at age 35, and you'd better also do some other very significant things. One, you'd better keep [the investment] costs down so you aren't overwhelmed by the tyranny of compounding costs, whatever market return you might get.

Not much to say here other than he's right. I'm working on setting my retirement number and the total amount I need to save is way more than even I thought I needed. It's almost shocking!

That means the financial system put up zero percent of the capital and took zero percent of the risk and got almost 80 percent of the return, and you, the investor in this long time period, an investment lifetime, put up 100 percent of the capital, took 100 percent of the risk, and got only a little bit over 20 percent of the return. That is a financial system that is failing investors because of those costs of financial advice and brokerage, some hidden, some out in plain sight, that investors face today. So the system has to be fixed.

Costs are a major, major, major factor in the performance of your investments -- especially over a long period of time. They can eat away pretty significantly at your returns. This is just one of the reasons I like index funds -- their costs are very low.

How do you get costs out of the system? Aren't you stuck? You are in a 401(k), and you've got only 11 options or 28 options from your company, and they are all through Vanguard, Fidelity, T. Rowe Price, somebody else. Can you get the costs out?

Easy. You own [a market index fund]: the entire U.S. stock market or maybe 25 percent international, the entire U.S. bond market, or just simply go to government intermediate-term bonds and don't pay anybody for those services. The costs are going to be about 10 basis points or 15 basis points instead of 2.5 percent a year, that 10 or 15 basis points meaning a tenth of 1 percent or a little bit more. It is all you need to pay to own the market.

You knew he was going to say this, didn't you. ;-)

The interview goes on for quite a bit, so check it out if you want to see more of what Bogle has to say on a variety of topics.

The only thing I'll add is the suggestion that you look at your own personal retirement number and how you're going to get to it. As I noted earlier, it's a pretty large amount if you want to retire anywhere near your current income level, and the sooner you know what you need to save and get to it, the better.

Free Career Intensity Daily Book Giveaway at Free Money Finance, May 29

I'm giving away free books the rest of May and the entire month of June!!!!!

Our winner of yesterday's Career Intensity book giveaway was: College Grad (comment posted at 11:30 pm yesterday) Congrats! Be sure to email me the name and address where you want the book to be sent as well as if you want the author to sign it for you or to a special person (I'll need the name). I'll send you a confirmation email that I got your note. If you don't hear from me, I didn't get your email. BTW, the books are shipped out every Friday by media mail, which can take 2-3 weeks to receive from the time they are mailed.

For the rest of you, there's another giveaway today. Here's how the giveaway works:

1. Every day, I write a post (like this one) that announces the Career Intensity book giveaway for that day. (FYI, read my review on the book here -- I gave it 8 Stars.)

2. All you need to do is leave a comment on that post (only one comment/entry per person, please). This will enter you in the drawing for that day.

3. Sometime the next day (usually in the morning, but not always, my schedule won't allow it) I'll announce the winner for the previous day's giveaway as well as the new giveaway for that day.

4. If you're named the winner, you'll need to email me the name and address where the book should be sent. Note: I will not be sending you an email telling you you've won, you'll need to check the site. If you want to look at all the posts/winners, click on my giveaway category link. If I don't hear from you in a week, I will give the book to someone else.

5. The process repeats over and over all the way through June 30.

6. I'll throw in some "special giveaways" quite often, so stay tuned to Free Money Finance.

As for rules, they simply are:

1. If you leave more than one comment on any one giveaway, your entries will be invalid for that particular giveaway.

2. Once you win a book, you can't win another one. But if you have won a previous giveaway here at Free Money Finance, as long as it wasn't for this book, you are eligible to win this book.

3. The drawing will be final and I will be the complete and final judge.

4. U.S. mailing addresses only.

Good luck! Post a comment below for a chance to win tomorrow's giveaway!

Happy Memorial Day

Just wanted to say Happy Memorial Day to everyone (it's a holiday where we remember the service and sacrifice of our veterans and enlisted men and women for those of you outside of the United States). Like most others in the U.S., I'm taking the day off -- I'll be back tomorrow.

Thank you to all our veterans, enlisted personnel, and their families. Words are inadequate to express our great appreciation for your service.

Free Career Intensity Daily Book Giveaway at Free Money Finance, May 28

I'm giving away free books the rest of May and the entire month of June!!!!!

Our winner of yesterday's Career Intensity book giveaway was: Travis (comment posted at 11:05 pm yesterday) Congrats! Be sure to email me the name and address where you want the book to be sent as well as if you want the author to sign it for you or to a special person (I'll need the name). I'll send you a confirmation email that I got your note. If you don't hear from me, I didn't get your email. BTW, the books are shipped out every Friday by media mail, which can take 2-3 weeks to receive from the time they are mailed.

For the rest of you, there's another giveaway today. Here's how the giveaway works:

1. Every day, I write a post (like this one) that announces the Career Intensity book giveaway for that day. (FYI, read my review on the book here -- I gave it 8 Stars.)

2. All you need to do is leave a comment on that post (only one comment/entry per person, please). This will enter you in the drawing for that day.

3. Sometime the next day (usually in the morning, but not always, my schedule won't allow it) I'll announce the winner for the previous day's giveaway as well as the new giveaway for that day.

4. If you're named the winner, you'll need to email me the name and address where the book should be sent. Note: I will not be sending you an email telling you you've won, you'll need to check the site. If you want to look at all the posts/winners, click on my giveaway category link. If I don't hear from you in a week, I will give the book to someone else.

5. The process repeats over and over all the way through June 30.

6. I'll throw in some "special giveaways" quite often, so stay tuned to Free Money Finance.

As for rules, they simply are:

1. If you leave more than one comment on any one giveaway, your entries will be invalid for that particular giveaway.

2. Once you win a book, you can't win another one. But if you have won a previous giveaway here at Free Money Finance, as long as it wasn't for this book, you are eligible to win this book.

3. The drawing will be final and I will be the complete and final judge.

4. U.S. mailing addresses only.

Good luck! Post a comment below for a chance to win tomorrow's giveaway!

The True Source of Wealth

During the week here at Free Money Finance, one of the subjects I write about is how we each can make more money. (Lately, I've focused a lot on careers, noting that your career is your most valuable financial asset and managing it correctly can earn you millions of dollars in extra income throughout your lifetime.) However, on Sundays, I get to write about money topics from a spiritual angle, and today would like to explore what I consider my true source of wealth.

When I think of where wealth originates, Deuteronomy 8:18 always comes to mind. It says:

But remember the LORD your God, for it is he who gives you the ability to produce wealth, and so confirms his covenant, which he swore to your forefathers, as it is today.

I have heard my pastor say several times that "one idea from God is better than decades worth of work." I believe it. I've seen it in action. I've witnessed people work all their lives to barely get by while another person, with a single, inspired idea, is made wealthy beyond his wildest dreams.

I've seen it in my own life as well. God has given me insight, ideas, and favor (Psalm 5:12) that have "given me the ability to produce wealth." There's no other way to explain it. In addition, He's coupled this with His great wisdom (much of it from Proverbs) that has allowed me to manage my money successfully and grow my net worth. It's these principles I write about on Monday through Saturday.

Don't get me wrong -- God hasn't simply dropped a bundle of money into my lap. I've had to work hard (Proverbs 10:4), but God has been faithful along the way and coupled my hard work with ideas and insights that have been far beyond what I could have done with just hard work. Far beyond.

I'm sure some out there will dismiss these thoughts as simply "you really did it yourself." Others will likely chime in with the usual "religion as a crutch" or some sort of other derogatory comment. If they want to ignore or discount what I've said, then that's fine with me. I know the true story -- that it's God who has given me the ability to produce wealth.

Free Career Intensity Daily Book Giveaway at Free Money Finance, May 27

I'm giving away free books the rest of May and the entire month of June!!!!!

Our winner of yesterday's Career Intensity book giveaway was: BA (comment posted at 2:57 pm yesterday) Congrats! Be sure to email me the name and address where you want the book to be sent as well as if you want the author to sign it for you or to a special person (I'll need the name). I'll send you a confirmation email that I got your note. If you don't hear from me, I didn't get your email. BTW, the books are shipped out every Friday by media mail, which can take 2-3 weeks to receive from the time they are mailed.

For the rest of you, there's another giveaway today. Here's how the giveaway works:

1. Every day, I write a post (like this one) that announces the Career Intensity book giveaway for that day. (FYI, read my review on the book here -- I gave it 8 Stars.)

2. All you need to do is leave a comment on that post (only one comment/entry per person, please). This will enter you in the drawing for that day.

3. Sometime the next day (usually in the morning, but not always, my schedule won't allow it) I'll announce the winner for the previous day's giveaway as well as the new giveaway for that day.

4. If you're named the winner, you'll need to email me the name and address where the book should be sent. Note: I will not be sending you an email telling you you've won, you'll need to check the site. If you want to look at all the posts/winners, click on my giveaway category link. If I don't hear from you in a week, I will give the book to someone else.

5. The process repeats over and over all the way through June 30.

6. I'll throw in some "special giveaways" quite often, so stay tuned to Free Money Finance.

As for rules, they simply are:

1. If you leave more than one comment on any one giveaway, your entries will be invalid for that particular giveaway.

2. Once you win a book, you can't win another one. But if you have won a previous giveaway here at Free Money Finance, as long as it wasn't for this book, you are eligible to win this book.

3. The drawing will be final and I will be the complete and final judge.

4. U.S. mailing addresses only.

Good luck! Post a comment below for a chance to win tomorrow's giveaway!

One Year Ago: Best Advice, Best Deal, and Turning a Hobby into an Income

One year ago this past week I offered several posts that I think you'll find both interesting and informative. Here they are:

• The Best Financial Advice I Can Give, Part 4 - This series continued by discussing the power of compounding. It's a good reminder how time can really grow any investment made. For more recent thoughts on this subject from me, see The Richest Man in Babylon, The Power of Compounding and How to Retire Rich: Use the Power of Compounding.

• The Best Financial Advice I Can Give, Part 5 - This post offered the idea of "making sure you save enough, keeping a tight lid on investment costs, minimizing your portfolio’s tax bill, thinking carefully about the investment risks you take and making sure you don’t react too emotionally to the market’s ups and downs.” Good stuff!

• The Best Deal I Ever Got, Part 1 - I started a new "best of" series this week as well. The first "best deal" suggestion was "be flexible when you travel." It saved this woman over $200. Not bad.

• Celebration of 1,000th Visitor -- Free Moose Giveaway - I celebrated my 1,000th visitor on May 26. Boy, we've come a long way since then. ;-)

• Turn a Hobby into Income - This is one of my most popular posts ever. Who wouldn't want to earn some extra money doing what they love?

Posts of the Week -- May 22

Here is a list of my favorite posts this week:

• Debt in America: What's the True Cause?

• Maximize Your Career Earnings: Get a Degree and Manage Your Career

• How to Make a Million Dollars in Ten Years

• Free Money Finance Guide to Making More Money

• Career Guidance: Do's and Don'ts of Quitting Your Job

• Good Debt versus Bad Debt

Have a great weekend!

Free Money Finance recommends Emigrant Direct.

Free Career Intensity Daily Book Giveaway at Free Money Finance, First to Comment

Here's a fun giveaway, but you need to be on your toes!

The first person to leave a comment, any comment, below wins a free copy of Career Intensity.

Once you comment and see that you're first, be sure to email me the name and address where you want the book to be sent as well as if you want the author to sign it for you or to a special person (I'll need the name). I'll send you a confirmation email that I got your note. If you don't hear from me, I didn't get your email. BTW, the books are shipped out every Friday by media mail, which can take 2-3 weeks to receive from the time they are mailed. If you want to look at all the posts/winners, click on my giveaway category link. If I don't hear from you in a week, I will give the book to someone else.

As for rules, they simply are:

1. Once you win a book, you can't win another one. But if you have won a previous giveaway here at Free Money Finance, as long as it wasn't for this book, you are eligible to win this book.

2. U.S. mailing addresses only.

Good luck!

Identity Theft Statistics, Part 2, What is the Most Common Way Your Identity is Stolen?

Here's part 2 of an interesting article from Money magazine that lists several identity theft statistics -- many of which I found surprising. It's done in a question and answer format, so here is today's question:

What is the most common way your identity is stolen?

The answer:

Among victims who could pinpoint the source of ID theft, 30% blamed a lost or stolen wallet, checkbook or credit card. Dumpster diving, in which your personal info is lifted from documents you throw out, made up less than 1% of cases, down from 2.6% in 2004, as some 70% of people now shred paper files (keep shredding!). However, in 8% of cases, info is stolen out of mailboxes before you have a chance to shred. Since credit-card offers make it easy to open an account in your name, call 888-5-OPTOUT to stop unsolicited card applications.

My thoughts:

1. So, if 30% can be traced to a lost or stolen wallet, checkbook or credit card, 8% to stolen mail, and 1% to dumpster diving, what happens in the other 61% of cases? Am I missing something here?

2. I shred religiously, though it does create another problem -- my kids want to scatter the confetti all over the house. ;-)

3. We've stopped putting our flag up when we put mail in our box (out-going) and we usually pick up mail within an hour or so of its arrival.

4. I opted out last year and my credit card mail offers has dropped DRAMATICALLY. It really works.

Click here to read part 3 of this series.

Four Ways to Get Rich Quick with No Work

This is a "joke post" if there ever was one. Especially for me -- someone who believes most people can get rich but you need to do so over time. Anyway, here's a list of four ways to get rich quick with no work from Smart Money:

• Win the Lottery
• Inherit Money
• Pick a Hot Stock
• Marry Rich

Of all of these options, I think "marry rich" has the best chance of working. Or, maybe just "get married" is fine -- because we all know that marrying for money actually works. ;-)

Free Career Intensity Daily Book Giveaway at Free Money Finance, May 26

I'm giving away free books the rest of May and the entire month of June!!!!!

Our winner of yesterday's Career Intensity book giveaway was: Buhler (comment posted just a couple hours ago). Congrats! Be sure to email me the name and address where you want the book to be sent as well as if you want the author to sign it for you or to a special person (I'll need the name). I'll send you a confirmation email that I got your note. If you don't hear from me, I didn't get your email. BTW, the books are shipped out every Friday by media mail, which can take 2-3 weeks to receive from the time they are mailed.

For the rest of you, there's another giveaway today. Here's how the giveaway works:

1. Every day, I write a post (like this one) that announces the Career Intensity book giveaway for that day. (FYI, read my review on the book here -- I gave it 8 Stars.)

2. All you need to do is leave a comment on that post (only one comment/entry per person, please). This will enter you in the drawing for that day.

3. Sometime the next day (usually in the morning, but not always, my schedule won't allow it) I'll announce the winner for the previous day's giveaway as well as the new giveaway for that day.

4. If you're named the winner, you'll need to email me the name and address where the book should be sent. Note: I will not be sending you an email telling you you've won, you'll need to check the site. If you want to look at all the posts/winners, click on my giveaway category link. If I don't hear from you in a week, I will give the book to someone else.

5. The process repeats over and over all the way through June 30.

6. I'll throw in some "special giveaways" quite often, so stay tuned to Free Money Finance.

As for rules, they simply are:

1. If you leave more than one comment on any one giveaway, your entries will be invalid for that particular giveaway.

2. Once you win a book, you can't win another one. But if you have won a previous giveaway here at Free Money Finance, as long as it wasn't for this book, you are eligible to win this book.

3. The drawing will be final and I will be the complete and final judge.

4. U.S. mailing addresses only.

Good luck! Post a comment below for a chance to win tomorrow's giveaway!

The Best Personal Finance Magazine: June 2006

In December, I declared Money Magazine as the best of the big three personal finance magazines (Money, Kiplinger's Personal Finance, and Smart Money). I promised to start the competition at ground zero in 2006 since Money was so far ahead that the others could never catch up.

As promised, I posted on this subject in early 2006, naming my winners in January, February and March. As a reminder, here are the scores through March:

• Money - 25
• Kiplinger's - 15
• Smart Money - 12

But at this point, I stopped posting on the subject. Why? It was getting boring -- it was the same thing every month. Money won, the others were weak, and that was it. Yet I didn't close the door officially on this series, so I'm doing that today. I'll give my results through June, then wrap it up, not to revisit this topic for some time (if ever again).

So here's an update on my competition for the best personal finance magazine. My methodology: the magazines get one vote for each article that I found useful -- either for me, someone I knew or for this blog.

Here are the results for April:

• Money - 7
• Kiplinger's - 3
• Smart Money - 3

Here are the results for May:

• Money - 14
• Kiplinger's - 4
• Smart Money - 3

Here are the results for June:

• Money - 4
• Kiplinger's - 2
• Smart Money - 3

So, our total for the year stands at:

• Money - 50
• Kiplinger's - 24
• Smart Money - 21

Even though Money had a bad June (it focused on the "Housing Bubble" and had a ga-zillion related stories on this tired topic), it's still a runaway. I'm discontinuing this series and awarding Money magazine the championship for the year. It's simply the best to me. That's one reason I named it among my best gifts to get a graduate.

Notice: First to Comment Giveaway Today

Just wanted to give everyone a bit of notice -- I'll be giving away a copy of Career Intensity later today in a "first to comment" giveaway. So stay tuned -- you never know when it will come up -- and be quick to comment. ;-)

Good luck!

How to Make a Million Dollars in Ten Years, Part 5: Career

Here's part 5 (the last part!) in our quest to grow our net worth by a million dollars in ten years as guided by Smart Money. Today, we're focusing on your career, which Smart Money says will net us $171,000 in net worth over ten years. Their key thoughts:

Entrepreneurs might get rich quick selling magic widgets, but when you're working for the man, there's nothing magical about the surefire way to increase your income. Every career expert we interviewed for this story said the No. 1 rule is simple: You've got to go above and beyond your job description.

The first mandate — be of service to your boss — is probably the hardest, especially for the 95% of us who think we're smarter and saner than the little Napoleon we report to.

Of course, you can't rely entirely on the boss. On the job, look for assignments that get you noticed outside your department.

It's your responsibility to acquire skills that make you more useful.

Of course, no matter how well you position yourself, you can get sideswiped by changes in your industry and the economy. Prepare now.

While I agree with the guidelines stated above, I have to say that I think the amount assigned to your career is very, very, very understated. I think your career is your most valuable financial asset and managing it correctly can earn you millions of dollars in extra income throughout your lifetime. That's MILLIONS, not $171,000. Sheesh!!!!!!

Here are some of my thoughts on how to make the most of your career:

• The Art of the Raise

• Developing a Successful Career

• Your Most Valuable Asset

Anyway, using Smart Money's numbers, after five days we're at $1,318,000 in our quest for $1 million in added net worth in ten years. So we've made our million with room to spare! And if we add in the real numbers for managing your career, we'll be at $2 million or more! Not bad for ten years, huh?
This is just what I recommended when I wrote Free Money Finance Guide to Getting Rich.

For reference, here are the links to the other parts of this series:

• Part 1: Staying/Becoming Healthy Helps You Spend Less and Earn More

• Part 2: Saving Money

• Part 3: Savings

• Part 4: Investing

Star Money Articles for the Week of May 22

Here are interesting posts and news this week from the MoneyBlogNetwork members and beyond:

• Blueprint for Financial Prosperity advises consolidating student loans before June 30th.

• Consumerism Commentary offers six steps to being your own boss.

• AllFinancialMatters thinks eBay feedback is stupid.

• MightyBargainHunter is looking forward to fewer cars on the road.

• Five Cent Nickel considers taking a home office tax deduction.

• Punny Money notes that Americans aren't going on as many vacations as usual.

• Financial Reflections offers five ways to be a frugal shopper.

• In Cash Flow We Trust gives a tip on how to find a lost pension.

• Career Intensity discusses your heart and mind.

Also be sure to check out the MoneyBlogNetwork Forums -- lots of great info on how to grow your blog's revenue!

Enjoy!

Investment Pitfalls: How We Kill Our Returns

Here's a piece from Money magazine that contains their thoughts on why so many investors have poor returns (how we kill our own investment returns). They narrow it down to three simple reasons:

• Market timing

• Buying high and selling low

• Failure to diversify

My thoughts on these:

1. I never time the market. In fact, trying to do so is a fool's game. Consider this quote from the Money piece:

The study revealed that a person who attempts to time the market needs to be right roughly three times out of four to match the performance of a buy-and-hold investor.

That's why I buy and hold. ;-)

I simply invest at regular intervals (monthly for 401k as well as other investment accounts) again, again, and again. When others are panicking about the market falling, it doesn't really affect me. I have an overall belief in the U.S. economy and simply keep investing. In fact, I don't follow what the market does on a day-in day-out basis. Why should I?

Overall, I prefer the investment philosophy I discussed in Free Money Finance Guide to Getting Rich. It's worked for me so far, and now that I've gotten a decent amount invested, the power of compounding is REALLY starting to work for me.

2. I can only laugh at this one. Of course no one wants to buy high and sell low. It's funny to me that Money lists it as a way to hurt your investment performance. Duh!!!!!

3. The key culprits here: putting too much of a portfolio in company stock and not using proper asset allocation techniques. My company doesn't offer stock (it's privately owned), so I'm ok there. However, I am working on getting my assets allocated correctly.

Free Career Intensity Daily Book Giveaway at Free Money Finance, First to Comment

Here's a fun giveaway, but you need to be on your toes!

The first person to leave a comment, any comment, below wins a free copy of Career Intensity.

Once you comment and see that you're first, be sure to email me the name and address where you want the book to be sent as well as if you want the author to sign it for you or to a special person (I'll need the name). I'll send you a confirmation email that I got your note. If you don't hear from me, I didn't get your email. BTW, the books are shipped out every Friday by media mail, which can take 2-3 weeks to receive from the time they are mailed. If you want to look at all the posts/winners, click on my giveaway category link. If I don't hear from you in a week, I will give the book to someone else.

As for rules, they simply are:

1. Once you win a book, you can't win another one. But if you have won a previous giveaway here at Free Money Finance, as long as it wasn't for this book, you are eligible to win this book.

2. U.S. mailing addresses only.

Good luck!

Guidelines for Picking a Financial Advisor

Here's a piece from Money magazine that talks primarily about whether or not you should get an "expert" to help you plan your retirement. But the part I want to highlight is a tiny but solid set of steps at the end that lists guidelines for picking a financial advisor. Money's list includes the following suggestions:

1. Make sure the adviser is registered with your state securities department (nasaa.org) and does not have a history of complaints.

2. Limit your search to advisers who've been recommended by a knowledgeable friend or colleague, or a respected financial group.

3. Beware of any adviser whose chief "advice" appears to be selling all or most of the investments you own and buying new ones from him.

Of all these, I put the most weight on #2. It's how I've ended up with a great real estate agent, CPA, insurance agent, and so on.

There are significant pitfalls you'll want to avoid when selecting a financial advisor. In my opinion, your best defense is to develop a working knowledge of personal finances yourself. Then you'll know when you are getting questionable advice.

Check out these posts from Free Money Finance for some additional thoughts on financial advisors:

• Many Taxpayers Get Burned by Inept or Crooked Preparers

• Bad Advice from a "Financial Planner"

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

• Make Sure Your Financial Advisor is Not a Loser

Free Career Intensity Daily Book Giveaway at Free Money Finance, May 25

I'm giving away free books the rest of May and the entire month of June!!!!!

Our winner of yesterday's Career Intensity book giveaway was: Starfevre (comment posted at 11:28 am yesterday) Congrats! Be sure to email me the name and address where you want the book to be sent as well as if you want the author to sign it for you or to a special person (I'll need the name). I'll send you a confirmation email that I got your note. If you don't hear from me, I didn't get your email. BTW, the books are shipped out every Friday by media mail, which can take 2-3 weeks to receive from the time they are mailed.

For the rest of you, there's another giveaway today. Here's how the giveaway works:

1. Every day, I write a post (like this one) that announces the Career Intensity book giveaway for that day. (FYI, read my review on the book here -- I gave it 8 Stars.)

2. All you need to do is leave a comment on that post (only one comment/entry per person, please). This will enter you in the drawing for that day.

3. Sometime the next day (usually in the morning, but not always, my schedule won't allow it) I'll announce the winner for the previous day's giveaway as well as the new giveaway for that day.

4. If you're named the winner, you'll need to email me the name and address where the book should be sent. Note: I will not be sending you an email telling you you've won, you'll need to check the site. If you want to look at all the posts/winners, click on my giveaway category link. If I don't hear from you in a week, I will give the book to someone else.

5. The process repeats over and over all the way through June 30.

6. I'll throw in some "special giveaways" quite often, so stay tuned to Free Money Finance.

As for rules, they simply are:

1. If you leave more than one comment on any one giveaway, your entries will be invalid for that particular giveaway.

2. Once you win a book, you can't win another one. But if you have won a previous giveaway here at Free Money Finance, as long as it wasn't for this book, you are eligible to win this book.

3. The drawing will be final and I will be the complete and final judge.

4. U.S. mailing addresses only.

Good luck! Post a comment below for a chance to win tomorrow's giveaway!

Career Guidance: What You Don't Know and Your Boss Won't Tell You, Excerpt #3, When to Leave

Here's an excerpt from the great book (read my review here) What You Don't Know and Your Boss Won't Tell You by Pam Lenehan. This one also comes from Chapter Two of the book which is titled Manage Your Own Career: No One Else Will:

When to Leave

It is always difficult to leave a job, especially if you like your coworkers. However, you may feel that you have been in one place too long or are not getting the opportunities you deserve. How do you decide to leave? There are lots of subtle signs that you are in the wrong place.

• “You need to be happy in your job, respect the people you work with, and be intellectually challenged. When you are missing one or more of these elements, it is time to find something else.”

One issue to consider is whether your current company’s perception of you has changed as you have gained new skills, or whether the organization still sees you in your original role.

Sometimes people just get fed up or are exhausted and want to get out. This may not be the right decision if it is based on a short-term situation. Take a vacation first to see if you just need some time off.  Often people try to improve a difficult situation. While this is admirable, it is not always possible. Sometimes you just need to leave.

• “When you join a company, you sign up for their culture. If you do not like it, you need to realize you are not going to change the culture.”

One thing that may be obvious, but is worth repeating, is to leave your current company or department on good terms.

• “Don’t burn any bridges. People move around these days, and you never know when you will end up working with these people again.”

Even if you are happy in your current assignment and are not actively looking, should you consider listening to opportunities when they present themselves? Most people think it is a good idea to know your market value, but you may not want to let people at the company know you talk to headhunters since they might misinterpret your interest.

Takeaways: Do not stay in one job too long or you will get stale. Don’t quit if you’ve had a bad week, but leave if you are in the wrong place. Talk to headhunters periodically and always have a current résumé. Keep your eyes open for internal and external opportunities.

----------------------------------------------------------------

My thoughts on these suggestions:

1. I'd recommend that you always listen to (and help out if appropriate) headhunters. You never know what they have available and even if you're happy where you are, you may be happier somewhere else. If nothing else, give headhunters some good contacts for jobs they are trying to fill. They'll remember how helpful you were if and when you ever need their help finding a job.

2. I echo the suggestion about not burning bridges. You may really want to give it to someone (and may be justified in doing so) -- but you should resist the temptation. It is a VERY small world out there and there's no reason to burn a bridge with someone you may need to have as (at least) a neutral reference (or some other business interaction). I speak from experience. I've wanted to let someone have it before, but haven't. Then I've needed (and received) their help later. Boy, was I glad I had self-control!

3. Always keep your eyes open for new opportunities. Remember, your career is your most valuable financial asset and managing it correctly can earn you millions of dollars in extra income throughout your lifetime. Part of managing it correctly is actively managing it -- always being on the lookout for advancement and opportunity. You can't do this by "going with the flow" and letting what happens simply happen. It's your career, so take charge of it and be alert for ways to better it (and yourself).

Notice: First to Comment Giveaway Today

Just wanted to give everyone a bit of notice -- I'll be giving away a copy of Career Intensity later today in a "first to comment" giveaway. So stay tuned -- you never know when it will come up -- and be quick to comment. ;-)

Good luck!

Identity Theft Statistics, Part 1, How Much Money Does the Typical Victim of Identity Theft Lose?

I've written a lot about identity theft over the past year (see my identity theft category for a listing of posts), but not much recently. So I thought I'd make up for lost time by doing a short series on the topic.

I found an interesting article from Money magazine that lists several identity theft statistics -- many of which I found surprising. It's done in a question and answer format, so let's start with the first question:

How much money does the typical victim of identity theft lose?

The answer:

More than two-thirds of ID theft victims didn't lose a dime last year. (Of course, that means some people did end up out of pocket: The average loss was $422 vs. $675 in 2004.) Why? Federal law limits your liability--$50 for credit cards; $500 for debit cards--if you report the fraud within 60 days. And most issuers offer even stronger protections, guaranteeing that you won't be on the hook for any of the bill. The real cost to you is time and stress: It takes the average victim 40 hours of effort to restore his or her good name.

A few thoughts here:

1. Wow. I would have guessed a few thousand dollars would have been the average. $422 seems low, but I guess it makes sense as explained by Money.

2. 40 hours basically doubles your cost if your time is worth $10 per hour. If it's worth more, like I'm guessing is the case for most of us, this will be even a bigger cost/frustration than the actual money lost.

Click here to read part 2 of this series.

How to Make a Million Dollars in Ten Years, Part 4: Investing

Here's part 4 in our quest to grow our net worth by a million dollars in ten years as guided by Smart Money. Today, we're focusing on investing, which Smart Money says will net us $478,000 in net worth over ten years. Their key thoughts:

Saving your money is only half the battle; it's just as important to use those savings to construct an investment portfolio that minimizes your fees and maximizes your returns. That may sound like a complicated proposition, but it's largely a matter of avoiding the most common mistakes.

Rule No. 1: Buy low and sell high. Easier said than done, you say? Not if you are disciplined. Make regular investments using a predefined asset allocation (more on that below), and resist the temptation to sell when things look grim. Don't chase the latest fad, no matter how stellar the recent returns.

An effective approach to investing your savings is to use a strategy called "core and explore." The "core" portion of your portfolio, the largest chunk, should be invested in low-cost funds that track the market indexes, such as the S&P 500 or the Dow Jones Wilshire 5000.

Put the "explore" portion of your nest egg in a discount brokerage account, where you'll have the wide universe of stocks and funds at your disposal. It's a small share of your overall portfolio — maybe 10% — that you hope will beat the market.

In choosing a fund, consider long-term performance relative to other funds in the same category. Don't get seduced by last year's hot offering. Avoid funds with expense ratios higher than 1.2%; and keep in mind that plenty of good funds charge less than half of that. Also look out for sales charges, known as loads.

I agree with this advice from Smart Money. I'm a big fan of index funds and closely watch the expenses associated with my investments. They can make a HUGE difference in a portfolio's overall return, so when comparing similar funds, I always go with the lowest cost one (assuming I expect their returns to be about the same).

I've posted regularly on investing and here are some of my recent posts on the subject:

• Why I Like Index Funds

• Three Strategies for Higher Investment Returns

• The Richest Man in Babylon: Three Key Lessons

In summary, after four days we're at $1,147,000 in our quest for $1 million in added net worth in ten years. We've made it in four easy steps!!! This is just what I recommended when I wrote Free Money Finance Guide to Getting Rich.

For reference, here are the links to the other parts of this series:

• Part 1: Staying/Becoming Healthy Helps You Spend Less and Earn More

• Part 2: Saving Money

• Part 3: Savings

Click here to read part 5 of this series.

Free What You Don't Know and Your Boss Won't Tell You Book Giveaway at Free Money Finance, First to Comment, Part 5

Update (4:15 pm): This giveaway is completed, but there's still an open one with a book to be given away tomorrow. You can enter it by clicking on this link.

Here's a fun giveaway, but you need to be on your toes!

I'm giving away a free copy of What You Don't Know and Your Boss Won't Tell You by Pamela Lenehan from 11 am to 4 pm today -- five copies in all -- and they go to the first person to comment on each of the five posts. Here's how it works:

1. Every hour between the hours of 11 am and 4 pm (one between 11 am and noon, one between noon and 1 pm, and so on) I will post a giveaway post (like this one!).

2. The first to leave a comment, any comment, on that post will win a free copy of What You Don't Know and Your Boss Won't Tell You by Pamela Lenehan for that hour.

3. Each giveaway is at a different time within the hours (i.e. giveaways aren't at 11:42 am, 12:42 pm, 1:42 pm, etc.), so keep your eyes on Free Money Finance and be quick on the keyboard if you want to win.

4. Once you comment and see that you're first, be sure to email me the name and address where you want the book to be sent. I'll send you a confirmation email that I got your note. If you don't hear from me, I didn't get your email. If you want to look at all the posts/winners, click on my giveaway category link. If I don't hear from you in a week, I will give the book to someone else.

As for rules, they simply are:

1. Once you win a book, you can't win another one. But if you have won a previous giveaway here at Free Money Finance, as long as it wasn't for this book, you are eligible to win this book.

2. U.S. mailing addresses only.

This is the last giveaway of the day -- good luck!

Comments: One Way to Find a Career that You'll Love

It looks like it's unanimous -- everyone loves internships. I suggested them as a great way to find out whether or not you like a particular field in my post titled One Way to Find a Career that You'll Love, and many people commented to add their support. Here's the first thought:

I'll second the idea of internships. While a student, you'll learn all the theories and study great people in your field. It's all great and wonderful to do nothing but dream and do mock projects. An internship in the 'real world' will allow you to put the theories to the test and to do real work. Also, you'll learn about office politics, how people make money in your profession and hopefully pick up a mentor. Things that the university can't/won't teach you.

I agree! Here's another vote for the value of internships:

Another benefit of taking an internship or doing work in the field is that it makes you more marketable for a job after graduation if you decide that you still want to stay in the field. Also, it might make you a more attractive candidate for scholarships or fellowships for furthering your education if it's necessary. At the very least (and this is still a -great- benefit) you can get good letters of recommendation from people who are already achieving.

Great point! I mentioned it in the Free Money Finance Guide to College Success. As I said, the combination of good grades and a meaningful internship or two makes both employers and graduate schools salivate, giving you the option of doing whatever you want to do after you graduate.

Finally, here's a comment from a person who's seeing firsthand one value of an internship:

I'll fourth the opinion about getting an internship/co-op. Right now I'm in the middle of one with a very old, very large Fortune 500 company. I'm a design engineer and a mechanical engineer by degree. Finding out that corporate engineering is more like book keeping has been quite disappointing, but I'm still glad I took the job. If I hadn't, I wouldn't have realized that I needed to get going on opening up other options.

As I said in One Way to Find a Career that You'll Love, this is exactly what happened to me. I was on one career path, took an internship, learned that I hated the profession (too boring), and got into another line of study. The internship changed my life, and I'm very thankful I took it.

Free What You Don't Know and Your Boss Won't Tell You Book Giveaway at Free Money Finance, First to Comment, Part 4

Here's a fun giveaway, but you need to be on your toes!

I'm giving away a free copy of What You Don't Know and Your Boss Won't Tell You by Pamela Lenehan from 11 am to 4 pm today -- five copies in all -- and they go to the first person to comment on each of the five posts. Here's how it works:

1. Every hour between the hours of 11 am and 4 pm (one between 11 am and noon, one between noon and 1 pm, and so on) I will post a giveaway post (like this one!).

2. The first to leave a comment, any comment, on that post will win a free copy of What You Don't Know and Your Boss Won't Tell You by Pamela Lenehan for that hour.

3. Each giveaway is at a different time within the hours (i.e. giveaways aren't at 11:42 am, 12:42 pm, 1:42 pm, etc.), so keep your eyes on Free Money Finance and be quick on the keyboard if you want to win.

4. Once you comment and see that you're first, be sure to email me the name and address where you want the book to be sent. I'll send you a confirmation email that I got your note. If you don't hear from me, I didn't get your email. If you want to look at all the posts/winners, click on my giveaway category link. If I don't hear from you in a week, I will give the book to someone else.

As for rules, they simply are:

1. Once you win a book, you can't win another one. But if you have won a previous giveaway here at Free Money Finance, as long as it wasn't for this book, you are eligible to win this book.

2. U.S. mailing addresses only.

Good luck!

How to Make a Million Dollars in Ten Years, Part 3: Savings

Here's part 3 in our quest to grow our net worth by a million dollars in ten years as guided by Smart Money. Today, we're focusing on savings, which Smart Money says will net us $535,000 in net worth over ten years. Their key thoughts:

Any savings strategy should start with a 401(k), the most powerful retirement weapon at your disposal. You don't have to pay income tax on the money you invest until you withdraw it, which amounts to a 20 to 40% bonus on your savings, depending on your tax bracket. Plus, most employers sweeten the deal by matching your contribution dollar with 50 cents, up to a total of 6% on average.

What about that $13,000-a-year slush fund you've amassed by taking care of your health and implementing smart spending strategies? Reality dictates that you'll blow half that on unforeseen emergencies or, with better luck, a couple of weeks in Hawaii. However, 25% of it, or $3,250, should go to saving for college. Consider a 529 plan, so named for its place in the tax code.

Our couple is stashing the remainder of their slush money in their brokerage account, which has an existing balance of $80,000. You should do the same. The brokerage account allows for a greater choice of investment options than your 401(k) or 529 plans. In all three cases, exercise some preemptive discipline by signing up for automatic withdrawals that divert money to your accounts each month.

Yes, it's amazing how you can really rack up some significant amounts of money in just a few, simple steps. I wrote about this in Free Money Finance Guide to Getting Rich.

I've posted a ton on retirement savings and saving for college, so instead of reinventing the wheel, I thought I'd list a few of my recent posts on each of these topics. Here they are:

Retirement Savings

• An Easier Way to Fund Your Retirement

• Three Big Mistakes in Retirement Planning

• A Simple Guide to Retiring Early

Saving for College

• Make the Most of a College Education -- It's Well Worth the Investment

• Why Education is So Important to Your Financial Future -- And How You Can Pay for College

• 4 Ways to Save Big on College Costs

In summary, after three days we're at $669,000 in our quest for $1 million in added net worth in ten years.

For reference, here's the link to part 1, Staying/Becoming Healthy Helps You Spend Less and Earn More and part 2, Saving Money

Click here to read part 4 of this series.

Free What You Don't Know and Your Boss Won't Tell You Book Giveaway at Free Money Finance, First to Comment, Part 3

Here's a fun giveaway, but you need to be on your toes!

I'm giving away a free copy of What You Don't Know and Your Boss Won't Tell You by Pamela Lenehan from 11 am to 4 pm today -- five copies in all -- and they go to the first person to comment on each of the five posts. Here's how it works:

1. Every hour between the hours of 11 am and 4 pm (one between 11 am and noon, one between noon and 1 pm, and so on) I will post a giveaway post (like this one!).

2. The first to leave a comment, any comment, on that post will win a free copy of What You Don't Know and Your Boss Won't Tell You by Pamela Lenehan for that hour.

3. Each giveaway is at a different time within the hours (i.e. giveaways aren't at 11:42 am, 12:42 pm, 1:42 pm, etc.), so keep your eyes on Free Money Finance and be quick on the keyboard if you want to win.

4. Once you comment and see that you're first, be sure to email me the name and address where you want the book to be sent. I'll send you a confirmation email that I got your note. If you don't hear from me, I didn't get your email. If you want to look at all the posts/winners, click on my giveaway category link. If I don't hear from you in a week, I will give the book to someone else.

As for rules, they simply are:

1. Once you win a book, you can't win another one. But if you have won a previous giveaway here at Free Money Finance, as long as it wasn't for this

book, you are eligible to win this book.

2. U.S. mailing addresses only.

Good luck!

Free Money Finance in Five Carnivals This Week

Free Money Finance is part of five carnivals this week. Here are the carnivals and my posts that were included in each:

• Carnival of the Capitalists - How the Middle Class Can Get Back on Solid Financial Ground

• Carnival of Debt Reduction - Debt Collection Tips: How to Deal with a Debt Collector

• Carnival of Personal Finance - Making Early Retirement Happen

• Festival of Frugality - Money Saving Tip: Cancel Your Cable TV

• Carnival of the Vanities - More Important than Money: Your Health and Your Mind, Part 1

Stop by these carnivals to read some great posts!

Free What You Don't Know and Your Boss Won't Tell You Book Giveaway at Free Money Finance, First to Comment, Part 2

Here's a fun giveaway, but you need to be on your toes!

I'm giving away a free copy of What You Don't Know and Your Boss Won't Tell You by Pamela Lenehan from 11 am to 4 pm today -- five copies in all -- and they go to the first person to comment on each of the five posts. Here's how it works:

1. Every hour between the hours of 11 am and 4 pm (one between 11 am and noon, one between noon and 1 pm, and so on) I will post a giveaway post (like this one!).

2. The first to leave a comment, any comment, on that post will win a free copy of What You Don't Know and Your Boss Won't Tell You by Pamela Lenehan for that hour.

3. Each giveaway is at a different time within the hours (i.e. giveaways aren't at 11:42 am, 12:42 pm, 1:42 pm, etc.), so keep your eyes on Free Money Finance and be quick on the keyboard if you want to win.

4. Once you comment and see that you're first, be sure to email me the name and address where you want the book to be sent. I'll send you a confirmation email that I got your note. If you don't hear from me, I didn't get your email. If you want to look at all the posts/winners, click on my giveaway category link. If I don't hear from you in a week, I will give the book to someone else.

As for rules, they simply are:

1. Once you win a book, you can't win another one. But if you have won a previous giveaway here at Free Money Finance, as long as it wasn't for this book, you are eligible to win this book.

2. U.S. mailing addresses only.

Good luck!

Save Money: Some Insurers Pay You to Get Healthy

We've already established that you can save money by taking care of yourself (not to mention that your health and your mind are more important than money) on more than one occasion, and this article from Money Central agrees. It discusses how some insurers pay you to get healthy. Their key thoughts:

Insurers are beginning to realize they can cut their own costs -- and those of their insured members -- by encouraging and rewarding healthy behavior. To that end, insurers are helping to subsidize everything from gym memberships to food bills and offering incentives such as T-shirts and iPods for people willing to work up a sweat.

The piece then details insurance companies that give you discounts for the following:

• Eat healthy -- Members receive up to a $200 rebate each year.

• Exercise often -- Join a qualifying gym, exercise at least eight times a month, and [get] reimbursed $20 of monthly membership.

• Stop smoking -- Free and reduced-cost smoking-cessation programs are offered by many insurers ($2,000 cost).

• Measure your health -- Program allows people to reduce their premiums just by taking a health-risk assessment.

• Play for prizes -- Members enrolled in the program get points for each day that they exercise -- can redeem them for everything from t-shirts to electronics.

I think what we're seeing here is only the tip of the iceberg. As medical costs keep rising and insurers look to lower their costs (and insurees look to lower their premiums for that matter), I think we'll see more and more programs geared toward getting people to exercise and eat well. Really, we all should be doing this anyway since good health is a proven way to extend our lives.

Free What You Don't Know and Your Boss Won't Tell You Book Giveaway at Free Money Finance, First to Comment, Part 1

Here's a fun giveaway, but you need to be on your toes!

I'm giving away a free copy of What You Don't Know and Your Boss Won't Tell You by Pamela Lenehan from 11 am to 4 pm today -- five copies in all -- and they go to the first person to comment on each of the five posts (like this one!). Here's how it works:

1. Every hour between the hours of 11 am and 4 pm (one between 11 am and noon, one between noon and 1 pm, and so on) I will post a giveaway post (like this one!).

2. The first to leave a comment, any comment, on that post will win a free copy of What You Don't Know and Your Boss Won't Tell You by Pamela Lenehan for that hour.

3. Each giveaway is at a different time within the hours (i.e. giveaways aren't at 11:42 am, 12:42 pm, 1:42 pm, etc.), so keep your eyes on Free Money Finance and be quick on the keyboard if you want to win.

4. Once you comment and see that you're first, be sure to email me the name and address where you want the book to be sent. I'll send you a confirmation email that I got your note. If you don't hear from me, I didn't get your email. If you want to look at all the posts/winners, click on my giveaway category link. If I don't hear from you in a week, I will give the book to someone else.

As for rules, they simply are:

1. Once you win a book, you can't win another one. But if you have won a previous giveaway here at Free Money Finance, as long as it wasn't for this book, you are eligible to win this book.

2. U.S. mailing addresses only.

Good luck!

Free Career Intensity Daily Book Giveaway at Free Money Finance, May 24

I'm giving away free books the rest of May and the entire month of June!!!!!

Our winner of yesterday's Career Intensity book giveaway was: Jason (comment posted at 3:13 pm yesterday) Congrats! Be sure to email me the name and address where you want the book to be sent as well as if you want the author to sign it for you or to a special person (I'll need the name). I'll send you a confirmation email that I got your note. If you don't hear from me, I didn't get your email. BTW, the books are shipped out every Friday by media mail, which can take 2-3 weeks to receive from the time they are mailed.

For the rest of you, there's another giveaway today. Here's how the giveaway works:

1. Every day, I write a post (like this one) that announces the Career Intensity book giveaway for that day. (FYI, read my review on the book here -- I gave it 8 Stars.)

2. All you need to do is leave a comment on that post (only one comment/entry per person, please). This will enter you in the drawing for that day.

3. Sometime the next day (usually in the morning, but not always, my schedule won't allow it) I'll announce the winner for the previous day's giveaway as well as the new giveaway for that day.

4. If you're named the winner, you'll need to email me the name and address where the book should be sent. Note: I will not be sending you an email telling you you've won, you'll need to check the site. If you want to look at all the posts/winners, click on my giveaway category link. If I don't hear from you in a week, I will give the book to someone else.

5. The process repeats over and over all the way through June 30.

6. I'll throw in some "special giveaways" quite often, so stay tuned to Free Money Finance.

As for rules, they simply are:

1. If you leave more than one comment on any one giveaway, your entries will be invalid for that particular giveaway.

2. Once you win a book, you can't win another one. But if you have won a previous giveaway here at Free Money Finance, as long as it wasn't for this book, you are eligible to win this book.

3. The drawing will be final and I will be the complete and final judge.

4. U.S. mailing addresses only.

Good luck! Post a comment below for a chance to win tomorrow's giveaway!

How to Choose the Right Pet Health Insurance

Well, it's been some time since I've bemoaned the cost of pets. I was getting sentimental for the topic (second only to my love for "how to save on gas" posts) when I saw this article and knew I had to share it with you. It's from MSNBC and offers their thoughts on how to choose the right pet health insurance as well as several other useful bits of information. Let's start with why the cost of pet medical care is so high:

“From 1994 to 2003, expenditures for veterinary services rose 76 percent,” says Carol McConnell, manager of veterinary education and services for Veterinary Pet Insurance, in Brea, Calif.

That rise may correlate with higher disposable incomes and the elevation of pets to "family member" status, along with longer animal life expectancies. But McConnell also notes that owners of ailing pets now have more options as veterinarians have added many diagnostic and treatment capabilities borrowed from human medicine.  Taking advantage of those new options can quickly run vet bills up into the thousands of dollars.

I've read article after article where a pet has had some sort of complex treatment/medical work done and it's cost the owner thousands of dollars. This is where the cost of a pet REALLY explodes -- in the last few years of a pet's life when costly medical procedures are often required.

Next, the piece gives an overview of pet insurance:

Because pets are technically a form of property, the insurance is structured more like a homeowner’s or auto policy.

“With a car, you have a fender bender and look to insurance to cover the repairs after meeting the deductible. As crude as it sounds, this is how pet insurance works," said McConnell. "The point of treatment remains getting the pet ‘back on the road,’ so to speak.” The main purpose of pet insurance, like auto insurance, is to manage the risk of a potentially costly event.

Is this post surreal for anyone besides me? What happened to the good old days when we simply said, "Yeah, old Buck just ain't what he used to be," and allowed our pets to age naturally? Now we have hip replacements and the like to make them live longer, "happier" lives. And, as such, we need things like pet insurance. Sheesh!!

Ok, I'm off that tangent now. Let's get on with the article from MSNBC.

It goes on to list the four major pet insurers (none of which I've ever heard of) and then gives these tips for evaluating a pet insurer as well as the pet insurance policy itself:

• Look at the underwriter behind the policy and verify its "Best Rating," which reflects its financial health and ability to pay any future claims. Compare coverage to actual and probable needs given the animal’s breed and its associated health risks.

• Understand the costs.

• Know what the coverage limits and more importantly what it excludes.

• Before buying, check with your company's human resources department. Many companies, including Home Depot, Procter & Gamble and numerous restaurant chains, offer pet insurance as an employee benefit.

What!!!!!!??????? Pet insurance as an employee benefit????!!!! I'm selling my Home Depot (HD) stock!! Bob Nardelli, what are you thinking????

As with any sort of product you buy, I recommend that you pay particular attention to the cost of pet insurance and what you get for that premium (points 2 and 3 above). That's really the heart of the issue. One other thing I'd add is that you want the insurance to cover you from big expenses (like a few thousand dollars), so having a high ($500 to $1,000) deductible may save you some money on premiums and still cover you for any really big pet medical bills you may face.

Free Giveaway Coming Today

Just a reminder that the free book giveaway will begin in the next couple of hours. See details here in case you missed the announcement yesterday.

Good Debt versus Bad Debt

Here's one of those bits of personal finance "advice" that I hate -- that there's "good debt" and "bad debt." Wait a minute, I have to correct myself. I believe in good debt and bad debt. Bad debt is any debt you have and good debt is when you have no debt. ;-)

I know, everyone in the world except for Dave Ramsey and two or three other people disagree with me, but I'll tell you why I'm so anti-debt (even "good debt") later. For now, let's look at this piece from Money Central that gives several thoughts on good debt versus bad debt Here are the highlights:

• "When you buy something that goes down in value immediately, that's bad debt," says David Bach, CEO of Finish Rich Inc. and author of "The Finish Rich Workbook. "If it has no potential to increase in value, that's bad debt."

• "Good debt is investment debt that creates value; for example, student loans, real-estate loans, home mortgages and business loans," says Eric Gelb, CEO of Gateway Financial Advisors and author of "Getting Started in Asset Allocation.”

• Robert D. Manning, a professor of finance at the Rochester Institute of Technology, also recommends taking on debts that are tax-deductible and debts that produce more wealth in the long run.

• "If you are talking about reducing current debt, that's where it starts to get nuanced," says Manning. "If you take a home-equity loan because you have a 17% credit card, and you go with a 6% loan that's tax-deductible, that's good debt."

• These general rules of thumb set some clear delineations -- buying a home or refinancing to get rid of excessively high rates is usually good debt, as is generating debt to buy high-return stocks, bonds and other investments.

• The concept of bad debt comes in when discussing the purchase of disposable items or durable goods using high-interest credit cards and not paying the balance in full.

The piece goes on and on, offering thoughts on good debt versus bad debt, but I think you get the idea. Now, here are my thoughts:

1. I agree that there are some things it's ok to go into debt for -- such as a college education and a house. Why? A college education will pay you back many times over the amount you have to borrow and a house is usually a great investment (as long as you buy and pay for your house using a reasonable financial plan).

2. That said, I don't like being in debt as a lifestyle. On both college and housing, I'd recommend you keep your expenses low, plow as much as you can into debt repayment, and get out of debt as fast as you can. Pay off your loan in half the time or less if you can.

Yes, there are those who will talk about how they can earn more than the cost of the debt by investing, but from what I've seen, this is much more theory that reality. In fact, of all the people I've ever heard talk about how it's smart to have debt because they are only paying X% while they can earn X+%, I've never seen one actually do it. Besides, remember that when you make a debt payment, you've just made a GUARANTEED investment (by reducing the cost of your debt). When you invest, you may get that expected return and you may not.

3. Credit card debt of any kind is not to be tolerated. I'm ok with having credit cards, in fact, I would recommend you use cash-back credit cards (I made over $330 last year with a cash-back credit card plus saved a ton on car expenses with another credit card). But you should only use them for expenses already in your budget. And you should pay them off every month. If you can't do this, you're spending too much.

I realize that several of you my think this is old-fashioned, out-of-date, or too-conservative advice. Maybe it is. Then again, here's why I believe in it:

1. This is what I've done and it's one reason my net worth is well above average. Maybe there are other ways to go to get a good net worth, but those are theories to me. I KNOW this one works.

2. I know the freedom that's associated with being debt free. Believe me, it feels good.