Tag Archives: income

Stocks And Retirement | Should I Keep Holding On To These Stocks?

All retirees end up asking themselves if they should cash in their chips and make a smooth, profitable exit from the stocks game. Having nurtured their portfolios through the years, they sometimes feel uneasy about selling their stock assets. After all, a lot of time has gone by, watching them, believing in them, having them generating income, even if poor at times. Many retirees know that they could generate some extra cushion by unloading their stocks, but they just can’t seem to fathom the act.

Image courtesy

Image courtesy Andreas Poike

It’s important to remember why you started accumulating stocks in the first place. In most cases, it was simply a matter of developing a tangible financial portfolio; something that you created to make life better for the future of you and your loved ones. Well, have your stocks done that? Maybe you took a heavy hit back in 2008. Maybe you’re just recovering – and stock markets are doing just about as good as you could hope for right now. Maybe it is time time to cash them in. You can try the superannuation calculator over at Suncorp, if you need a hand figuring out how much you need to retire.

Should you sell your stocks now that you’re a retiree? Continue reading


The Science of Wealth-Making: Tall, Sexy, Nerdy and Electric

Flickr--Creative Commons

Flickr–Creative Commons

There’s been a conversation about how people become wealthy on a few blogs the last couple of days..

A guest post on Financial Samurai offers an untraditional roadmap to financial success. This is a response to a previous post on making a six-figure salary.

There is no one true path to building wealth. There are a lot. You can earn it. You can invest it. You can win it. Someone can give it to you.

There seems to be no consensus on who gets rich, either. The rich get richer, they say. But do the poor become richer? Do the smart become richer? Do the religious become richer? Do the well-educated become rich? Do the pretty become rich?

What I would like to do is pull in the scientists and see what they have to say about the rich — how they became rich and, maybe, how you can become wealthy, too.

You don’t have to be smart to be rich. According to a study in the journal of Intelligence, there’s no correlation between IQ and how much money you have.

But, you should have a high SAT score, according to this study.

But, you should still have been popular in high school. Popular kids tend to earn more later. *My two cents: Now, they just need to have a study on how to be popular AND be a nerdy, high-SAT student.

Owners of electric vehicles are richer (and smarter), according to this US News story. *My two cents: It may mean that the rich can withstand the economic impact of what are currently inefficient vehicles.

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How to Escape the Personal Financial Matrix

CC--My Melting Brain

“The Matrix is a system, Neo. That system is our enemy. But when you’re inside, you look around, what do you see? Businessmen, teachers, lawyers, carpenters. The very minds of the people we are trying to save. But until we do, these people are still a part of that system and that makes them our enemy.”

You, too, are trapped in a Matrix–a Personal Financial Matrix. This matrix controls what you do, who you know, and where you go. It does not, however, control who you are… or what you will become.

The Personal Financial Matrix is a network of corporations, government agencies, and businesses who are trying to enslave you. They jack into your brain with a tangle of wires. Marketing messages. Investment schemes. Cultural mythos. Expectations.

“That you are a slave, Neo. Like everyone else you were born into bondage. Into a prison that you cannot taste or see or touch. A prison for your mind.”

But, here’s your red pill.

The Matrix only works if you let it change your thoughts. Your mind is ultimately your own.

You just need to know how the Matrix works to influence your thoughts… and you’re free.

Marketing Messages

Marketing messages rarely work by targeting an outside need, but by attacking an inner need. When you buy clothes, food, cars, or homes, you may choose that purchase, not based on a need for shelter, clothing, and transportation, but on a need to express yourself. You want to say you are successful. Or, that you’re loved. Or, that you’re sexy. Companies know this and nuance messages to activate that need into action. However, you’ll pay more that. And, in what could be a downward spiral, you’ll go into debt… which leads to more inferiority… and worse purchases.


Speaking of debt, avoid it. It’s one of the strongest pulls of the Matrix. Granted, there are some “good” forms of debt. For instance, if you take out a loan on a home or investment property that has a reasonable chance of increasing at a rate higher than the interest rate, that’s a good form of debt.


Investments tweak each emotional string that keeps us attached to the Matrix.

  • Desire
  • Greed
  • Fear
  • Pride

When you invest emotionally, the likelihood the you will increase losses and decrease opportunities, rises dramatically. This doesn’t even touch on the number of investment schemes out there.

People who are burnt by investments, think they can escape the Matrix by not investing anymore. Unfortunately, they become more enslaved, believing that wealth and financial independence is unattainable. They become mired in safe careers that are neither safe, nor a career.


Often, people take jobs that support their lifestyle. That’s not a bad thing, necessarily. But, when people choose jobs in areas where the cost of living matches their salary, they start to live paycheck-to-paycheck. There’s no room for savings. There’s no room for advancement. There’s no room to take risks. There’s no room to become an entrepreneur. It’s a form of wage slavery.

How to Escape

Often, the Personal Financial Matrix insinuates itself in your life over time and you don’t recognize you’ve been captured.

No matter how deeply your involved in the Matrix, once you see it, you can begin your escape. Knowledge is the key.

Start by reversing old attitudes and bad habits.

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Book Review: Is $100 Startup Worth the Time and Money?

I’ve become disenchanted with the whole “alternative income, new lifestyle, instant riches” line of books recently.

Disenchanted isn’t the right word.

Bitter. That’s more like it.

In fact, I’ve blogged about it in the Douchebag’s Guide to Instant Riches on the Internet. Basically, since the 4 Hour Work Week came out, writers have been stealing Tim Ferris’s script and churning out books with very little new information and a total absence of information that addresses some of the criticisms of the alternative income idea. Book after book said, “Find something you like, write about it, and create an informational product… then just count the checks.”

I was expecting the same with the $100 Startup: Reinvent the Way You Make a Living, Do What You Love and Create a New Future, by Chris Guillebeau. I just about gagged when I read the title. In fact, the only two reasons I could think of to order this book was:

a) I had money left over on a gift card.

b) I like that new book smell.

And I now can admit that I am… actually enjoying the book.

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Memorial Day Finance Tips for Armed Service Members

Flickr--Creative Commons

We’re all grateful for our armed service members.

But, there’s a group of Americans who are too grateful.

Credit cards, pawn shops, payday loan organizations often treat soldiers, sailors, Marines and Air Force personnel like sheep coming in for the fleecing. If you don’t believe me, look at the strips of pawn shops and shady banking operations that line the streets leading to any major military bases.

These are just the obvious ones–internet and mail-based insurance, investing and banking scams target military members, as well.

Here are a few tips that will help military personnel devise a strategy for personal finance.

Credit attention
Most people entering the military are young and have little credit history. They also have little idea of how debt can impact not just their current bottom line, but their future financial lives, as well. And don’t the credit sharks just know it? They spread tantalizing offers for easy money in front of our military men and women, like landmines. You don’t see the harmful effects until it’s too late. Your best bet, then, is to avoid them entirely. Do you need emergency money? It happens. But there are other sources. Can your buddy spot you a few bucks? How about the folks back home? Another thing. Make sure it’s actually an emergency.

Flanking Budget Problems
For service members, money seems to be pre-budgeted. Meal allowance. Housing allowances. Clothing allowances. Extra money for hazardous duty. And so on. This arrangement may lead some service members to forego creating their own budgets and that can lead to lazy personal finance. They treat it like a lottery win or a bonus. A big payout.

One suggestion is to actually use the money allotted for the actual purpose. In this case, you would pull out the clothing allowance, for example, and use it for only clothing. Saving what’s left.
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Income? It’s Relative.

Most people look at their weekly — or monthly and annual — pay stubs and say… “That’s my income.”

And they’re right.

But only partially right.

That income statement and what we usually refer to as our “income” is called, “Absolute Income.” It’s not the only way we can look at how much money we make.

We might also want to consider “relative income.”

Relative income bores down on how much time it took to accomplish that work for that salary. Consider two guys. One, guy, Sam works 20 hours a week and brings in $400 a week. Another guy, Jay, works 80 hours a week and makes $1,000.

Now, if we want to play “who has the biggest paycheck” game, the second guy wins, he made a grand in a week, more than half what the poor part-timer did. But, that’s absolute. But Sam made 20 bucks an hour–more than Jay’s $12.50 an hour–in relative salary terms.

There’s other ways of looking at salary, too. For instance, Sam might live in an area where the cost of living is lower. His $400 may go a lot further than Jay’s. In fact, in some areas, a thousand dollars a week is subsistence living.

What about the quality of work, too? If Sam is doing work he enjoys, the ability for him to continue to do that work–and maybe even parlay it into more money–will make his income grow. If Jay hates his job, he’ll probably end up burned-out and stressed-out after a few years.

When it comes to salary, don’t bite at high numbers. Think about how much time, how much effort, and how far that money will go, before you think you hit the jackpot of a salary with a bunch more zeroes than you expected.


Oil Prices and Rental Properties: Financial Quick Bits

Image courtesy H Elise from Creative Commons.

It’s been an interesting week for investors. Usually, when someone says the week has been “interesting,” it means that it’s been scary. That holds true in this instance.

The Fed has moved away from another round of quantitative easing. The government released some oil from its strategic reserve. In the past eight weeks, the Dow has fallen seven times.

How’s that for interesting?

One way an investor (and we’re all investors technically) can prepare for our interesting future, is to get educated. The good thing is there’s always quality content online.

Here are some of the things I’ve been reading:

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The Ten Percent/Ten Percent Solution for Financial Problems

There are two ways to face down personal financial upheavals: decrease expenditures and increase revenue.
In other words, save money and make money. 

As the number of coupon clippers and group sales social networks attest, a lot of people are getting the first lesson. They’re trying hard to save money.

That’s only one part of the equation.

To really take control of your financial picture, you need to save money AND make more money. You also need to set definite goals. (For some, saving money is hard to maintain–it just takes a major purchase or a shopping binge to throw you off your game.) 

You might want to consider the ten percent-ten percent solution.


The Importance of New Skills

As the chaos in the economy continues, many people are looking to the government to help them. Companies ask the government for bailouts. Individuals receive benefits while they search for a new job. I see one small problem with these measures: they don’t address the root of the problem.

These companies and employees claim that their problems are caused by a bad economy. Have you even gone out in the rain? Blaming the economy is like blaming the rain for making us wet. What about an umbrella? Is the rain supposed to give us an umbrella?

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How to Avoid Blogger Scams

pic by jpoirrier @ Flickr

There’s a sucker born every minute.
–attributed to P.T. Barnam

Most bloggers wouldn’t mind earning some cash from their work.

And there are ways to monetize this content. Advertising, eBook sales, and affiliate sales are all channels. Blogging is one way to create a passive stream–or streams–of income.

But there seems to be a whole industry built on scamming bloggers, especially new bloggers.

The key to avoiding these scams is to know what to look for.

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