Archives for July 2012

American Express & Foursquare Promotion

July 17, 2012 By Jonathan Ping 11 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Update: Foursquare and American Express are running this promotion again nationwide – even if you did it already previously – this time for $5 off $10 at participating small businesses. I just looked for restaurants nearby that accepted AmEx and found several that are eligible = another cheap date night! Just “check-in” and you can load the discount onto your linked credit card. Thanks EC for the tip.

Foursquare is a location-aware smartphone app where you can “check-in” at specific places and share information. First, connect your foursquare account to any eligible American Express Card at sync.americanexpress.com. Then follow the quoted directions below on your smartphone. I want to say that all this should work with an iPod Touch or iPad as well, but I haven’t tried.

Check in at a merchant with a Special, load the Special to your card, and then pay for your over $10 purchase with your American Express ® Card. No need to show your phone to a cashier or anything – you’ll receive the credit on your Amex statement within 5 business days. You can find dozens of deals in your area just by hitting ‘Specials’ on the ‘Explore’ tab on your foursquare app (there are hundreds of thousands of participating businesses).

p.s. You can still score free points from Hilton Honors and other rewards programs by “checking in” using the Foursquare app when you register with TopGuest. You can get 50 Hilton points every day you check in at a Hilton hotel, for example. You only need to be within 10 miles of the hotel to check in the first time, and in future times you need to be nearby at all. I can check in once a day, every day, for 50 points, although I usually forget to.

Filed Under: Deals & Offers
Last updated: January 15, 2016
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Lessons From Micro Units, Small Spaces, and Tiny Houses

July 16, 2012 By Jonathan Ping 9 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Last week, New York City mayor Bloomberg announced a design competition for new “micro-unit” apartments ranging from 275 to 300 square feet (press release). The goal is to address the increasing demand by smaller households, as the average rent for a studio in Manhattan is now $2,065 a month. Here’s a sample proposed layout:

I’ve always been intrigued by small spaces, from tiny homes that you could buy with P2P loan instead of a mortgage, to the capsule hotels of Tokyo. Even if you don’t live in such a place, I think everyone can still learn from them new ways to use their own space more efficiently.

Go vertical to maximize space.

The NY Post did a profile of a young couple who live in a 240 square-foot studio in Brooklyn Heights. The picture below pretty much includes the entire place, with the ladder leading up to their bedroom:

Just like bunk beds and college dorm design, raising a bed is often the easiest way to get more storage or desk space. This concept doesn’t just apply to beds though. Put new shelving and storage up higher – look for wall space above toilets, above sinks, above your bed headboard, above desks. In your garage or carport, store bicycles and more in the space above your cars.

Buy one thing, get rid of another.

The free gym at my last university was always quite crowded, leading to a “one out, one in” policy where you had to wait for a person to leave before you could enter (also used at nightclubs, or so I’ve heard.). If you want to avoid stuff overload, you should implement the same policy when buying new things. Throw away, donate, or sell. New pants in = old pants out. New toy in = old toy out.

Use creatively-designed furniture.

Raising beds can get tricky for those with physical handicaps. I’ve always like the idea of Murphy wall beds as an alternative, and am thinking of installing one in my current office to be an extra guest bedroom with this DIY kit. There are a lot of other cool multi-tasking furniture out there as well. Some can get pretty expensive, but it may be worth depending on the cost/square feet in your area.

Here’s a cool video from a previous post on Resource Furniture:

Here’s another video of an apartment in Hong Kong that uses sliding walls to transform one big room into either a bathroom, kitchen, living room, or a bedroom. Very innovative, and all in 32 square meters (~345 square feet).

Filed Under: Frugal Living, Real Estate
Last updated: July 16, 2012
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

My Credit Card Rewards Maximization Strategy

July 13, 2012 By Jonathan Ping 45 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Speaking of credit card rewards optimization, I was thinking about how the algorithm might work for me. I’m curious if others have a similar system. Man, I have a lot of cards…

Tier 1 – Special Rotating or Temporary Promotions (5%+ back)

First up, you’d want to check for cards that offer an exceptional bonus cash back. Chase Freedom and Citi Dividend both offer 5% cash back on rotating categories on up to $1,500 in spending each quarter. That’s a possible $75 extra each quarter for each card. Other cards may offer a temporary bonus as well.

  • Chase Freedom® – $150 Bonus – 5% purchases can come from gas stations and local commuter transportation 01.01.2016 – 03.31.2016
  • Citi® Dividend Platinum Select® Visa® Card – Earn 5% cash back every quarter in must-have categories.  Right now, on eligible purchases within the Hilton Portfolio, car rental agencies, movie theaters and theme parks from 7/1/14 – 9/30/14. Enrollment each quarter is quick and easy.

Since I don’t buy that much gas, I would only charge restaurants on the Chase Freedom (but not gas) and airline purchases on the Citi Dividend.

Tier – Permanent Category Bonuses (3%+ back)

Some credit cards offer a year-round bonus on things like restaurants, travel, gas, groceries, and more.

Tier 3 – Everything Else (2%+ back)

Here’s your backup catch-all card. Don’t settle for 1% back here, you can do better. 🙂

If you like airline miles or hotel points, here’s where your personal spending habits may also factor in. I value Starwood points at 2 cents or more per point due to their ability to convert to miles and primarily their value in hotel stays (including Sheraton, Westin, W Hotels) so I actually switch between a 2% cash back card and the Starwood depending on my point balance as I like to keep enough to pay for upcoming hotel stays. My Fidelity cash ends up in a 529 so that’s not as much fun. 😉

American Express cards also offer extended warranty protection that I like for larger purchases as their customer service is always the easiest to deal with when you actually need to file a claim. However, American Express cards aren’t accepted in certain cases (like my auto insurance), so you should have a Visa/Mastercard as a final backup.

All in all, it’s not as crazy as it seems. If the Chase/Citi 5% categories aren’t daily-use categories but things like airfare then I don’t keep them in the wallet (0-3 cards). Out of Tier 2, I only keep the Blue Cash AmEx with me (1 card). Out of Tier 3, I actually have a similar-but-grandfathered Fidelity 2% Mastercard and the Starwood AmEx (2 cards). So the total is really about an average of around 4. I’m thinking of switching to an All-Ett “world’s thinnest wallet” which should cut the thickness in half.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.”  

“The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.”

Filed Under: Credit Cards, Deals & Offers
Last updated: April 25, 2019
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Wallaby Card – One Card To Rule Them All?

July 13, 2012 By Jonathan Ping 7 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

If you’re like me, you use multiple credit cards to maximize their rewards in different situations. Gas on one card, groceries on another, and maybe yet another one for restaurants. What if you could just charge everything on one dummy card, and have it automatically route the purchase on the optimal card? That’s what Wallaby Financial is trying to do. Thanks to reader JC for the tip.

I just signed up for their beta, but it doesn’t appear that anyone actually has an actual card yet. Founder Matthew Goldman answered some questions in Mashable, TechCrunch, and also this FW forum post. The card is not actually a new line of credit, so you won’t get a credit check although they will want your Social Security number and other personal info (and all your credit card numbers). After a six-month free period for beta users, the service costs $50 a year. Wallaby says that they’ll save you that much and more via the extra cashback they generate. Well, that depends on how badly you optimize your cards now. 🙂

Although the idea appears simple, the implementation will be very difficult. Here are a few examples… On cards with rotating categories, they say you’ll still have to activate them yourself each quarter. If you don’t, will they know? Next, all your purchases are technically charged on the Wallaby card number, and then re-routed to your actual card with the actual retailer name augmented with a prefix. For that reason, Wallaby currently can’t guarantee that you’ll keep your other card-specific features like extended warranty or price protection. They also don’t know how other add-on programs like Dining Rewards or UPromise will work with the program. Lots of questions, but yet another startup to keep an eye on.

Filed Under: Credit Cards
Last updated: July 13, 2012
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Start Your Own Micro-Business With Shared Coworking and Fabrication Spaces

July 12, 2012 By Jonathan Ping 5 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Do you dream of working for yourself instead of “The Man”? Indeed, early retirement and/or financial independence is often achieved by successful small business owners. In addition, any retirement plan will be more robust if you can earn some extra money on your own as needed. As such, I definitely support the growth of freelancers doing their own thing. However, you may hit roadblocks like loneliness, distractions at home, or lack of resources.

The good news is that there are a growing number of places for those with the entrepreneurial spirit to share and collaborate with others for mutual gain. Live in a studio apartment? No problem.

  1. Coworking, or shared working environments. These are basically large community office spaces where you can get a desk, couches, and fast internet connection so you can work around others doing the same thing. No more coffee shops! They tend to be informal, where you can work alone or network/chat with others. It can also serve as a very cheap office where you can hold meetings with clients, or places to meet up in strange cities. You can usually just search for “coworking [your city]” but here is a directory.
  2. Techshops / Cooperative Fabrication Shops. Are you thinking of selling something physical, like iPhone cases, custom skateboards, crafts on Etsy, or wood furniture? Wouldn’t it be great if you had your own CNC machine, commercial-grade sewing machines, or professional woodworking equipment? Techshops are a growing chain of membership-based workshops that provide quality tools and equipment that most individuals don’t have access to. You’ll also find classes and lots of knowledgeable people willing to help you learn to use the machines. Not too shabby for as little as $99 a month.

    Besides Techshop, you may find independent locations like Knowhow Shop LA or Maker Place in San Diego. Many more are trying to start themselves up and looking for members.

  3. Fab Labs. These are “digital fabrication facilities”, initially started at MIT but now found around the world, where you can make higher-tech finished products using 3-D milling machines for circuit boards and laser cutters for press-fit construction of parts. (Directory)
  4. Tool Lending Libraries. If your needs are more modest, see if your community has a tool library where you can borrow tools. You can find landscaping gear, table saws, power tools, etc. (Directory)

Most of these places have membership fees, but they are usually flexible to account for the regular or occasional user. Look into them and you may be surprised at what is available near you. Even if you’re just a frugal person that likes to DIY, these are also great places for makers and tinkerers.

Filed Under: Entrepreneurial, Frugal Living
Last updated: February 25, 2015
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Who Really Owns My Mortgage?

July 10, 2012 By Jonathan Ping 10 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Have you ever wondered who really owns your mortgage note? You pay your mortgage each month, but where do those payments end up? Perhaps you’re thinking of obtaining a loan modification or refinance through the Home Affordable Refinance Program (HARP), Home Affordable Modification Program (HAMP), or other program under the Making Home Affordable (MHA) umbrella. Or maybe you’ve read that banks are foreclosing on people without proper records and want to know if anyone out there actually can show you your original mortgage note.

First, remember that the loan owner isn’t necessarily the same as your loan servicer. Your loan servicer is the company that sends you mortgage statements, takes your payments each month, and if you have an escrow account, pays your homeowner’s insurance and property tax bills. So where do you start looking?

  • Ask the servicer. They are legally obligated to tell you the name, address, and telephone number of the owner of your loan as shown in their records. It may be a good idea to ask them in writing officially with a “qualified witten request” via certified mail while keeping a log of your communications. The name of your servicer should be on your mortgage statement, but you can also use the MERS link below.
  • Original lender. Your loan may have never been sold, and still kept as a “portfolio loan” with the original lender. What a concept!
  • Fannie Mae. In reality, many loans are sold to FNMA aka “Fannie Mae”. See Fannie Mae loan lookup tool.
  • Freddie Mac. Similar story with Federal Home Loan Mortgage Corporation (FHLMC) aka “Freddie Mac”. See Freddie Mac loan lookup tool.
  • Mortgage Electronic Registration Systems, Inc. (MERS) is a big online registry designed to replace the costly process of publicly recording mortgage ownership at the local government level with a private electronic version that allows the swapping of mortgages with no friction at all. MERS tracks both the servicing rights and ownership of mortgage loans in the United States, although the accuracy has been called into question. See MERS ServiceID lookup tool. You can also call them at 888-679-6377.
Filed Under: Real Estate
Last updated: July 10, 2012
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

SaveUp.com Review: Using Lottery Prizes To Encourage Saving?

July 9, 2012 By Jonathan Ping 6 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Another startup designed to encourage people to save more is SaveUp.com. The inspiration came from a new economics idea called “Prize-Linked Savings”. People tend to like lotteries, even though they are mostly a losing proposition. So what if you effectively gave out lottery tickets in exchange for saving money instead? If you think it sounds like a Freakonomics idea you’d be right.

First, you have to link up your financial accounts like banks, credit cards, and student loans (yep, usernames and passwords). Next, whenever you perform a positive activity, you earn credits towards prize drawings for $100 gift cards up to a $2 million prize. For example, every time you increase your savings account balance by $1 earns you one credit, and every $1 that you lower your debt earns you one credit. There are also various small challenges:

How does SaveUp make money then? Here’s a snippet from their press release:

SaveUp’s prizes are furnished through advertising and sponsorships with top consumer brands, including Virgin America and others. SaveUp’s brand partners receive significant exposure to a highly aspirational audience through frequent brand placements, exclusive content or category ownership, social media linkage, and the ability to offer coupons, promotions and other exclusive deals to SaveUp users on the site.

Data aggregation service is provided by Intuit (owners of TurboTax and the popular Mint.com). SaveUp.com is currently offering 100 bonus credits to My Money Blog readers for joining (it’s something, but don’t get too excited as it’s not that much). I opened an account and have been playing with it… the overall user experience is smooth and I do get a little “scratch-off ticket” buzz. I’ve put all my credits towards the drawing for the $100 Home Depot gift card. Daddy needs a new Makita hammer drill… but I’m afraid if I don’t win anything in a couple weeks I’ll probably get bored. :/

Filed Under: Reviews
Last updated: April 25, 2019
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

ImpulseSave.com Review: Making Saving As Easy As Spending

July 9, 2012 By Jonathan Ping 1 Comment
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Even though the economic news is shaky, I still see a lot of new startups in the personal finance arena. I’m constantly running behind in keeping up with all of them, but here’s one that reader MF sent over.

ImpulseSave.com tries to making saving as easy as spending. Their intro video throws out the stat that 20% of take-home pay is spent on impulse purchases. So first, you set a goal like “student loan” or “Roth IRA” or “vacation fund”. With ImpulseSave, just sending a text message like “10 to student loan” will move $10 from your checking account to your savings account. At first I thought “Umm… that’s it?”, but here are a couple of ways I see it working:

  • Converting discounts to real-world saving. Many times during the month you’ll “save” money by getting a discount or doing something frugal, but by the end of the month you’re still not ahead because you just spent the money elsewhere. Now, let’s say you brown bag your lunch. With one text message or e-mail, you can shoot $10 into your vacation fund. Went for the $1 DVD rental date at RedBox instead of $20 at the theaters? Move $20 out of your checking account.
  • Match spending with savings. Think 401k matching, but for yourself. Create a barrier to spending by making yourself save an amount equal to whatever frivolous purchase you make. Bought $20 of clothes you didn’t need? Well, match it instantly with a $20 savings transfer. You still got your little buying high, but you saved as well.

These are all behavioral tricks to saving, but let’s face it, that’s what a lot of us need. My main issue is that the service requires you to open up a new bank account at their partner bank, Massachusetts-based Leader Bank. I don’t want to open up yet another bank account just for this service (especially if it only pays 0.40% APY). I hope they keep the central idea but allow you to link your existing checking and savings accounts like Capital One 360. I asked for an invite and got it within 24 hours, but didn’t end up opening an account since I didn’t want to provide my SSN and full personal info for the bank account.

Filed Under: Reviews
Last updated: July 11, 2014
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Comfortable Retirement = Saving 11 Times Working Income?

July 6, 2012 By Jonathan Ping 28 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Via the NY Times, benefits consultant Aon Hewitt released their 2012 Real Deal study about workers at large companies and their readiness for retirement. The study assumes that an employee will work at least 30 years with some large company, not necessarily the same one, and then retire around age 65 with Social Security kicking in. It does not reflect savings or other retirement assets outside of the employer-sponsored plans (IRAs, taxable brokerage accounts, etc). The key findings of the study are summarized below:

85% replacement ratio. Using various assumptions, they find that the average worker will need about 85% of their pre-retirement income to maintain their standard of living. I suspect that most of this number comes from the finding that you need to save about 15% of your income for retirement, and it assumes you spend everything else. Thus, after retirement you have the remaining 85% to cover.

Average employee needs to save 11 times pay. The amount needed at “retirement age” (~65) to cover retirement expenses through an average life expectancy (age 87 for males, age 88 for females) is 15.9 times pay. Social Security is estimated to cover 4.9 times pay. Therefore, the employer needs to save 11 times pay.

Average employee is expected to have 8.8 times pay. This is the sum of pension benefits, employer contributions to 401k/403b-type plans, and employee contributions to those plans. This leaves an average shortfall of about 2.2 times pay. 30% of people are on track or better, 20% are very far behind, and the rest are somewhere in in the middle.

I’m hoping that this study will have nothing to do with me as the idea of working full-time in a large corporation until 65 sounds quite horrendous. 🙂 The overall takeaway is that retirement will still happen for most people as long as they work until Social Security, even if it might not be as nice as they’d like it to be. 11 times final income seems a reasonable rule-of-thumb for this traditional definition of retirement, but using income as a multiplier is annoying to me because it locks you into the assumption of a 15% savings rate.

In terms of non-traditional early retirement, I still prefer the rough rule of saving about 30 times our annual spending for early retirement. Your savings rate will have to be much higher than 15%. If you spend $50k a year, you’d need to save $1.5 million. If you own your house and otherwise spend $2,000 a month, then you’d need to save about $720,000. Using this metric, lots of people could retire on less than a million dollars even today.

Filed Under: Career, Retirement
Last updated: July 9, 2012
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Financial Independence Day Thoughts

July 5, 2012 By Jonathan Ping 27 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Since I spent July 4th trying to build my own cornhole board (until the batteries in my drill ran out), hanging out with family members sharing their opinions on every girl baby name in the world, happily eating hot dogs with beer, and watching fireworks that didn’t last just 15 seconds, I didn’t spend much time on the computer today.

Instead, since a certain bank already used this holiday to refer to financial independence, I found myself thinking about how my view of financial independence and “early retirement” has changed over the years. Just my opinions. I apologize in advance for the rambling.

  • Early retirement. I believe it’s just as possible as ever. However, you’ll have to be different than most people. You’ll have to either earn more than others, or spend less than others. Preferably both. But most people don’t want to be different than most people. It’s hard, you stick out, you get called cheap a lot, and you tend to just keep quiet so you don’t stick out as much.

    Very few people will retire early. Many of them don’t even think of it as an option. Some will consider it, and just come to realize they’d rather just spend more and work more. I don’t necessarily see anything wrong with that.

  • Post-retirement jobs. (Oxymoron?) If you’re good at saving money, you may be afraid of being broke. (I am.) But that also means that you may still worry about “what if I run out of money” no matter how much money you have. (I do.) However, if you’re disciplined and motivated enough to retire early, you’ll probably be able to find some sort of work that will pay you decent money for a flexible 5-20 hours a week, 3-9 months a year. Keep your eye out for that kind of job, it will help you retire earlier and with less stress.
  • Investing. I have come around to believing that some people can invest wisely and beat the return of the general market. I believe it’s a skill, but with so much noise that separating skill and luck is hard. It’s very easy to fool yourself into thinking you’re beating the market if you’re not keeping score carefully. Low-cost passive investments guarantee you above-average results, and for most people that’s the best bet to take.

    Old fashioned retirement is mostly about saving a big chunk of money, and then spending a big chunk of money without running out. Early retirement is more about living off of dividend and bond interest income almost indefinitely, but remember that even dividends can drop by 30% in any given year. As long as you don’t reach for yield too much, you should be able to design a portfolio whose dividends should rise with inflation. I don’t pay attention to mainstream retirement calculators anymore (Monte Carlo simulations) by Fidelity, Vanguard, ING, etc. I don’t feel they approximate real-life reactions to a dropping portfolio.

  • Rental property. More people I know actually retired early with rental property than by stock market returns. Fixed rate mortgages come with fixed payments, while rental income rises with inflation. This doesn’t necessarily mean that rental property is better stocks and bonds, but perhaps there is something special about this asset class. I’m seriously considering rental property again, but don’t know if I want to deal with it while raising young kids.
  • Home ownership. If you’re geographically stable, I highly recommend homeownership with a 15-year mortgage. It doesn’t cost double a 30-year mortgage. Paying extra towards my mortgage feels much more warm and fuzzy than placing money in the stock market. It allows you to see the effect of compound interest. Simply putting an extra $100 a month towards principal regularly will shave years off a typical mortgage. See prepayment calculator.

    I expect to pay off our mortgage within the next 5 years, before our portfolio is ready to support full financial independence but the lowered stress levels due to the huge drop in monthly spending will be awesome. I see the appeal of borrowing money for 30 years at 3.XX%, but for my primary home I’d be happier owning it free and clear. I’ll take the low interest rate on rental property, though.

Filed Under: Retirement
Last updated: July 5, 2012
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

My Money Blog Portfolio Update – July 2012

July 2, 2012 By Jonathan Ping 16 Comments
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Here’s a mid-year update of our investment portfolio, including employer 401(k) plans, self-employed retirement plans, Traditional and Roth IRAs, and taxable brokerage holdings. Cash reserves (emergency fund), college savings accounts, and day-to-day cash balances are excluded.

Asset Allocation & Holdings

Here is my current actual asset allocation:

The overall target asset allocation remains the same, based on my own preferences and research:
[Read more…]

Filed Under: Investing, Retirement
Last updated: July 2, 2012
My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

« Previous Page