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5 Things To Avoid When Planning Your Retirement

By Johanna

Retirement Planning MistakesIf you’re like other Baby boomers, you’ve been saving for retirement for a while now. You probably started early on thinking about your retirement and chances are you’re still at it.

If you want to succeed in successfully funding your retirement, it’s important to avoid some common retirement planning mistakes. By participating in the plans that are available to you, diversifying, and leaving the money alone, you can largely guarantee a financially successful retirement.

To reach your goals and make your retirement dreams come true, it’s best to avoid these common retirement planning pitfalls.

Non-Participation

1. Failing to participate in any retirement plans available to you.  Today, there aren’t many companies offering pensions anymore. However, most companies offer plans such as a 401k or similar to their employees.

Typically it’s easy for you to enroll and most of these programs are incredibly worthwhile. Interest-deferred accounts are tough to beat. Enroll today, if you haven’t already. It really adds up over time. [Read more…]

Filed Under: Wiser Money Tagged With: Investing, Money, retirement

Credit Card Fraud: Your Single Transaction Alert from …

By Johanna

What a rude awakening and reminder that credit card fraud is alive and well. While checking my email last Sunday, I came across a single transaction alert from my credit card company, an alert I had set up myself.

Every time I or SOMEONE spends above $30.00 on the card, I receive an alert from the company notifying me of the purchase. Frequently I don’t even open the email because I “think” I know what’s in it, since I may have used the card that day.

Well, not so this time. I hadn’t been out of the house on Sunday nor had I used the card to make an online purchase. You can imagine my surprise, when I opened the email and read that I had charged $2024.94 at Bed, Bath & Beyond on 1:30:20 PM EST that day!

A quick call to the credit card company revealed that they had approved the above charge, however declined 2 additional charges for $2011.45 at Home Depot and $1789.34 at Lowes.  The initial charge was made at a store in Colorado and the subsequent charges came in from other states altogether… and I live in Washington State!

The good news for me…

since it was my credit card, I am not responsible for any of the charges. I cut up my old credit card and the credit card number was changed immediately. A new card was sent out and I will receive it within a few days.

The bad news for all of us…

even while I am not responsible for any charges, we consumers will end up paying for this fraud in the form of higher prices and/or additional charges.

A few years back, I had a similar scare, but that time it involved my debit card. Someone had purchased airline tickets in London and presumably someone else placed an order for a Dell laptop here in Washington State.

Since I had checked my account that particular morning, I noticed the pending charges and was able to get the laptop purchase cancelled. Amazingly enough this did not happen because of my local bank.

No, I had to call Dell myself and tell them that this was not my purchase and to please cancel it. Had the order been completed and shipped already, I would have had $1700 less in my bank account until an investigation had been completed.

Up to this time I did not realize (beyond the obvious) that credit cards and debit cards were two different animals altogether. I did not know that I had very little protection with my debit card as compared to the credit card. While most, if not all, credit cards protect you against fraudulent charges, not all debit cards are handled the same.

With a credit card, the fraudulent charge is either removed right away or you are not responsible for the charge while it is under investigation.

With a debit card however, money comes out of your account right away and in essence you are “out the money” until an investigation is completed. Today, debit cards may be handled differently and it may vary depending on who issues the card.

The point I am trying to make… it benefits all of us to know what will happen in the case of fraud and who will be responsible for any fraudulent charges on either credit or debit card.

While I think of myself as very careful in how I handle my credit and debit cards, I still have been affected by credit card fraud. I only use secured wireless connections when making online purchases and don’t enter my card number unless I know and trust the merchant. I no longer use a debit card at all when making online purchases and only use a credit card because of the added protection.

When I shop offline however I use both debit card and credit card. However I’m thinking of switching to using credit cards exclusively or finding a debit card that offers at least some protection against fraud.

Filed Under: Wiser Money Tagged With: Credit Cards, Money

Your Relationship With Money

By Johanna Leave a Comment

Money BagMany of us have learned that money does not make us happy nor does it buy us love. But we have also learned that our culture values a big house, expensive jewelry, fancy vacations and more. It’s no surprise many of us are confused and have conflicting values around money.

Take stock in how you feel about money. Listen to yourself talk. Is it that you cannot afford something or that you ask yourself: How can I afford it? Is it time to change your money talk?

~from “77 Useful Tips & Strategies to Improve Your Financial Health” (c)  Johanna Hofmann, MBA

Filed Under: Wiser Money Tagged With: Beliefs, Money

How Are Your Money Management Skills?

By Johanna Leave a Comment

Your Money Management SkillsI hope you and I score far better than our government!

It’s common knowledge that the United States of America has an amazing amount of national debt – no surprise there. But do you realize just how much debt we as a nation have? Check out the website for one of the many debt clocks –  National Debt Clocks .

Frightened yet? I am! The dollar amounts listed on this page are staggering. Truth be told, I don’t even know how to count to these levels!

Will we ever be able to correct this situation? Will we ever be able to catch up with the overwhelming amounts of interest payments alone? Or will we simply leave this nightmare for our children and grand children?

The United States government, our government, has some serious problems with managing money, debt and credit! Could there be a correlation between the countless numbers of American citizens with credit problems and our government?

Obviously, both camps are overspending: too much money going out and not enough money coming in. When you think about it, it’s really a rather simple calculation!

Live within your means. Spend less than you earn, or, figure out how to increase your income so that you can spend all that you like. Either route will work – it’s entirely up to you!

 

Filed Under: Wiser Money Tagged With: Good to know, Money

What makes an Investment?

By Johanna Leave a Comment

Golden Egg InvestmentIt might seem a silly question, but let’s take a look anyway.

At the most basic level, an investment is anything you can put your money into and (hopefully) get a return or a profit back. Based on that definition, many things may qualify: a business, stocks, precious metals, raw land, real estate, bonds, futures, notes, etc. … and the list goes on.

There are many classes of investments and many categories of investments within these investment classes.

Let’s take real estate for example. There is residential real estate, commercial real estate, medical use, raw land, multifamily units, etc. Those are some of the different types of real estate investments you could put your hard earned dollars into!

One thing might cross your mind just about now:  the huge number of dollars it must take to get into some of those investments, right?

No question, it does take some money to get started, but it really depends on the type of investment as to how much you need to get going. Obviously, some investments are much more cash intense than others.

For example, it may take a lot more money to invest in an apartment building as compared to buying a single family home, a duplex or even investing in a few shares of stock.

So is investing in stock then be a bit more straightforward and takes less cash?

Well it’s a bit tricky to make this broad statement across the board. Depending on the type of stock and the value of each share, the amount of money it takes to get started would vary greatly.

There are literally 1000s of stocks to choose from. While there are many different types of stocks, they can be grouped into a few broad categories. These include income, growth, blue chips, small cap, mid cap, large cap and cyclical stocks (the most basic and general categories).

  • Income stocks are simply stocks that produce and distribute income to the investor. This income is typically distributed in the form of dividends and is taxable.
  • Growth stocks are those that have enjoyed a greater rate of growth compared to other companies in the category. Most of those companies produce broadly accepted and consumed products (Coca Cola is a classic growth stock). Companies in this category may or may not pay dividends.
  • Blue chip stocks represent the big players in the markets. These are well known companies with enormous market value. The Dow Jones Industrial, a major market index, tracks 30 of those large, blue chip stocks.
  • The term Cap refers primarily to the size of the underlying company or to a company’s market capitalization. In other words, the size of a company can be measured by taking the total number of stocks issued by that company and multiplying it by the share price. The resulting number will tell you if the company is a small cap (market capitalization less than $500 million), a mid cap ($500 to $1billion) or a large cap stock ($1billion +) company.
  •  Putting your dollars in small cap stock might be riskier than investing it in large cap stocks. And yes, there was a reason for talking about it all!
  • The last group, cyclical stocks, includes issues that can be expected to go up and down in value, in line with business cycles. These companies typically do great when the economy is growing and perform at a lesser rate, when the economy is contracting.

This was a very brief introduction to two commonly available investments; more to follow later!

The amount of money you need to get started with any kind of investment largely depends on the type of investment  considered, your tolerance for risk, your objectives and your overall financial situation.   I strongly believe that the more you learn and the more you know, the greater will be the investment choices open to you.

Filed Under: Wiser Money Tagged With: Investing, Money

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