March 30, 2011
Avoid investment scams and know your investment options to create financial freedom. Manage your money by investing in simple investments like no-load, broad-based index funds. No financial expert required.
Ted Hunter
March 29, 2011
If you’re like most Americans, simplifying your life may well be a treasure-trove of opportunity just sitting there waiting for you. I first learned this truth back in the late 1980s when I lived out of a suitcase for over a year. What a wonderful surprise that turned out to be, as it opened my eyes to how much of what I had accumulated and surrounded myself with were things I did not need. That, in turn, caused me to re-evaluate how I had been spending the hours of my days, of my life.
How many things do you own that you don’t really use? What do you do every day, week, and month that you’d rather not do? Do you live far from your job and commute hours each day, leaving you tired and with too little time for your family or for yourself? Look at the things you do out of habit and the things you’ve been convinced to do by others. Is each thing you do, each thing you own, really worth the time or money you are trading for it, really adding to the quality of your life?
If you’re like most people, you probably can benefit greatly from simplifying your life. Time and again you will find that less is actually more, and the rewards of simplicity outweigh the rewards from whatever you were doing or owning before. You’ll discover that simplifying doesn’t necessarily mean doing without, but living a less stressful, more balanced life. It means having more time for the things that really do end up making you happier. And it sure won’t hurt that you’ll probably end up with a lot more money by doing so.
So, take a few minutes to think about who you are and what you have been doing. How complicated has your life become over the years? Take a moment to think about simplicity and how to incorporate that simplicity into your life. When you do, you just might discover that living simply could gain you a world of abundance you never knew was available.
March 25, 2011
March is coming to a close and it’s almost April, you know what that means…..it’s time to do your taxes. I know that many people wrestle with the choice of doing their own taxes, going to a tax service, or hiring a local professional. I have found that most people’s taxes fit into three categories: very simple, fairly simple and not simple. Once you find out which category you fit into, your decision about finishing your taxes should be an easy one.
Very Simple: Most people have tax returns that are very simple—no itemized tax deductions, they make less than the current cut-offs of $1,500 a year in interest income, and $100,000 in total income—these can quickly and easily be completed yourself. You can go online to www.irs.gov and fill in and file form 1040EZ or 1040A and then file a simple version of the appropriate state return. Another option if your income is at or below $58,000, is to file federal taxes online for free using the software programs of companies participating in the Free File Service established by the IRS.
Fairly Simple: Some people don’t fit in the “very simple” group but still have a fairly straightforward financial picture and can still complete their tax return on their own. Consider using one of the major tax return systems such as TurboTax that includes both federal and state forms. It is a good idea, however to have a tax professional check your return the first time you do this and again every three to four years. The likelihood is that the tax preparer will catch things that will more than pay the fee.
Not Simple: For the self-employed with employees or individuals who have a complicated financial picture, the best choice is hiring a professional. There are several available options: a national tax return franchise, an online service, or an individual local tax professional such as a CPA or an Enrolled Agent (tested and background checked by the IRS). I advise going with an individual local tax professional for the following reasons:
- The difference in fees is likely to be fairly small.
- The national chain agents are usually part-timers and likely not as well trained and knowledgeable as the average CPA or enrolled agent.
- Franchise and online preparers are less likely to be available for any questions that might arise during the year.
- The turnover of franchise and online preparers is quite high; thereby reducing the chances you will have someone familiar with your tax situation on an ongoing basis.
Never hire anyone who bases a fee on a percentage of the refund amount, who claims the ability to obtain larger refunds than other preparers, or who requests signatures on blank tax forms to be filled in later. These are red flags that this is a preparer that should not be used.
Regardless of who prepares your return, you are the one responsible for paying the taxes. If someone improperly does a lowball return you will not only end up having to pay the correct taxes later on, you’ll also end up paying a penalty. It pays to do the research and do it right. Everyone has to pay taxes, pick your category and get it done; it will be *April 15th before you know it.
*In observance of the DC holiday, Emancipation Day, Tax Day will be moved forward one business day this year, landing it on Monday, April 18. That’s the date your form has to be either submitted electronically or postmarked by for your tax return to be considered timely filed by the IRS.
March 23, 2011
The earthquake, and the Tsunami that followed, in Japan were terrible and unfortunate events. As I see the images on TV and the internet, I ask myself what I can do. How can I help? Anyone who has read Money Smart knows I believe in giving back. I am a firm believer in giving and volunteering, not only of your money but your time. We have become a global community and it is important for us personally and globally to reach out and try to help.
Whenever you do chose to donate, however, be sure to make it count. Do some research online on the charity you choose. It pays to do a little bit of homework to insure that most of the donation is going to be used to help the cause, rather than go to fees and administration, and to be sure that it is going specifically to the cause of your choice rather than to the organization’s efforts in general.
Avoid giving money in response to a telephone solicitation. It is typically a solicitation company employee calling rather than someone who works for the charity. Commonly over 50% of a donation goes to the solicitation company rather than the charity it represents.
So give back whenever you can. Make that donation and make it count.
March 22, 2011
I recently came across a blog post that offered such valuable advice I simply have to comment on it here. Thanks to the folks over at brokeprofessionals.com for sharing the story about a parent being duped into overpaying an exorbitant amount of money for insurance—a policy sold to them by a “friend.” This situation happens all too often, I’m afraid, but their story offers an opportunity for you to learn how to avoid falling into a similar trap. If nothing else, the Broke Professionals anecdote underscores a very important and often overlooked truth: No one cares more about your money than you do.
In order to safeguard yourself from scams and overpaying, follow a few simple steps. Do your homework. Research who you’re going to hire. Then, when you’re speaking with the candidate ask for references and a track record of their success. Even if the person you’re considering is a “friend,” acquaintance, or a “good guy”—you still need to protect yourself and your money.
Though I’m sorry this unfortunate incident happened, I hope that others can learn from it. Remember, no one is ever going to work as hard for your money or keep your best financial interests in mind than you are.
March 3, 2011
Anyone sick of Charlie Sheen yet? I’ve watched with amazement at the media blitz on this troubled actor and at the rate that everyone, EVERYONE seems to be talking about it. I’ve got to admit it made me wonder, when did we embrace the crazy and forget common sense? Is following Charlie Sheen’s troubles as important as following the on-going struggle of so many Americans to put their financial lives together again? Of course not, but it can be a tantalizing distraction. Far too often that same attitude, giving in to the tempting impulse or distraction of the moment, has become a real problem when it comes to many people’s finances.
We need to turn away from the trend toward rash and impulsive buying that is evident in everything from small impulse purchases to buying expensive upgrades and a penchant for so-called retail therapy. Do it by taking a few minutes to write a prioritized shopping list of all the items you want, both large and small. When shopping, an impulse to purchase items not on the list should be considered a red flag and strictly avoided. Sleep on any decision before making a purchase. If you still want the item in the morning, look at your priority list and decide what you are willing to trade for it. It’s a simple, common sense approach that works as an antidote to this destructive tendency.
Let’s take this opportunity to turn away from bad habits and back to common sense. That’s one of the reasons I wrote Money Smart: to give hard working people some time-tested, common sense guidance on everything from spending to investing and creating financial freedom. Will we the American public always be fascinated by a celebrity meltdown? Probably, but we can also resist tempting distractions and embrace common sense to straighten out our financial lives.