Michael on July 18th, 2007
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You: Because an mp3 player can hold thousands of songs and an IRA can hold thousands of dollars?
Not the answer I was going for first, but you’ve definitely identified one way mp3 players and IRAs are similar. But there’s something even more important about their similarities that I need to share with [...]

Continue reading about Strategy # 19: How an IRA is like an mp3 player

Michael on July 16th, 2007
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You: When someone tells me that they don’t care about an expense because it’s tax-deductible for them, does that mean that the expense is basically free?
Although a tax-deductible charge reduces your taxes, the expense is not free. The tax savings provided by the deduction means the true cost is less than if [...]

Continue reading about Strategy # 18: Deductions aren’t free.

As you know, some sales are just gimmicks. On the other hand, the “sale” above is never promoted but one you need to get in on. If your employer offers spending (sometimes called reimbursement) accounts, take advantage. Through these plans you save the equivalent of your top tax rate multiplied by all your [...]

Continue reading about Strategy # 17: BIG SAVINGS on your medical, transportation, and child care expenses!

You: What kind of insurance makes sense to avoid?
When it comes to a genuine calamity such as a major car accident, premature death, or surgery, you’ll be thankful for your auto, life, and health insurances respectively. But there are many other unexpected expenses for which you should not purchase insurance. Fixing a minor fender [...]

Continue reading about Strategy # 16: Don’t pay to protect what you can easily afford to lose

Michael on July 6th, 2007
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You: I dare ya!  No, I double-dare you!
Thanks for the flashback to second grade.  No folks, when I say “Don’t risk a lot for a little,” I am not talking about jumping off the 25-foot bridge to save your pride with the other kids living in the “Whisper Walk” subdivision, even if the reward of [...]

Continue reading about Strategy # 15: Don’t risk a lot for a little

Michael on July 5th, 2007
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Although few things are scarier to imagine than dying at a young age, for young people without dependents long-term disability is actually a far greater financial threat. This is true for two reasons:

At younger ages you are more likely to become disabled than to die.
The financial implications of your untimely passing are minimal if [...]

Continue reading about Strategy # 14: Know your odds

Even after you begin to save, you might still struggle with the idea of putting money in a retirement account. Many people do. You may fear tying up your money for such a long time.
You: You got that right.
That’s understandable.
You: It is?
Yes. After all, with rare exceptions, once you put [...]

Continue reading about Strategy # 13: Love thy left pocket, Dwight Schrute style

While you’re unlikely to meet that special someone through your 401(k) plan, an employer match is still unbelievably valuable and so, dare I say, “totally worth it.”  A matching contribution is free money.
You: Okay. But nothing is free.  I learned that the hard way from Gary.
True, but some things are true no-brainers. A 401(k) plan [...]

Continue reading about Strategy # 12: An employer match is not a corporate-sponsored dating service

Even if your employer doesn’t match your contributions to your 401(k) plan, contributing to your retirement plan is still a great financial move. The moment you make a contribution, your net worth increases by the amount you save in income taxes. These tax savings come to you by simply moving money from your right pocket [...]

Continue reading about Strategy # 11 – A 401(k) plan contribution immediately increases your net worth

Michael on June 28th, 2007
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Your retirement isn’t a three-legged stool – it’s a pogo stick.

You: Excuse me?
Sorry, but it is what it is. Formerly, the three legs of the retirement funding stool for most Americans were:

An employer pension
Social Security
Personal savings

No longer.
Preferably in private, go ahead and curse the members of society whom you blame. Pick a Congressperson or two–even [...]

Continue reading about Strategy # 10: Turbo-charge your pogo stick