Ben Stein Talks

Retirement Planning: Getting Started (Part 1) First video in a three-part series on retirement planning, Ben Stein outlines basic steps to begin ...

Be the expert: What’s wrong with this real-estate comment?

As you know, I have strong opinions on buying a house, and most people don’t know what they’re talking about when they talk about real estate being the “best” investment.

So when a Wharton professor wrote a Washington Post column pointing out common myths of homeownership, I laughed at some of the comments.

• “Wow is this a poorly written and intentionally misleading piece of b.s. I wasted countless thousands renting apartments before wising up and buying a house. The author would rather have us all in housing collectives or government owned communes. Home ownership is still the American dream; don’t let this joker fool you.”
• “…Housing is a great long-term investment. Yes, it is. Because what the author doesn’t mention is that you have to have a place to live. If you rent, you have a place to live but the return on your ‘investment’ when you pay rent is 0.”
• “this guy gets paid for this s^^t?”

Newspaper sites have the worst commenters in the world.

But there was a comment that made my jaw drop. Can anyone spot the multiple problems with this comment?

“Another story: My father bought our family house in NJ for about $27k in 1964; sold it for $350k in 2000. Home ownership is terrific long-term investment.”

(Need a hint? This and this will help.)

Las Vegas Financial Advisor and

www.palermofinancialgroup.com Retirement Planning and Investment management in Las Vegas Education surrounding different forms of compensating a ...

Final Day for TradeKing $50 Bonus

Just a heads up on my previous TradeKing post that you have a little over 24 hours left for the $50 sign-up bonus. As I mentioned in that post, I had decided to switch my IRA from ETrade to Tradeking. The special ad links will no longer work starting Monday at midnight, now is the time. Check out that TradeKing post for more details on how to qualify for the $50.

TradeKing Covers Account Closing Fees from Previous Broker

In looking through my account, I noticed that if you are switching from another broker, you could have your account closing fees covered. TradeKing covers fees up to $150 on a non-retirement account if you complete the transfer within 30 days of opening your account. Here’s the screenshot. Definitely a nice benefit.

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Pet Owner? The HAPPY Act Might Bring you Tax Deductions

Could your Pet Bring you a Tax Deduction?

Who’s a good boy? Yeah, that’s him right there. My shelter dog, Murdock, A Nova Scotia Duck Tolling Retriever. And he’s about to become an even better boy should the recently introduced HAPPY Act gain traction and get passed.

What is the HAPPY ACT?

HAPPY is an acronym for The Humanity and Pets Partnered Through the Years Act. Also known as House of Representatives Bill 3501. The Happy Act was introduced by Representative Thaddeus McCotter, a Republican from my home state of Michigan.

Should the HAPPY Act pass in its present form, it would allow pet owners to deducted the cost of food, veterinary care, and other pet related expenses from their income taxes – up to $3,500 per year.

How Much Could the HAPPY Act Save you?

I had spent $700 this year on veterinary expenses for my dog Murdock and my cats – Bean and BA. This is probably more than a typical year for me as a lot of that expense was first visits after rescuing a dog from our local humane society and bringing him back to health. I estimate that I’ve spent $600 this year on food and medicine. My total cost of ownership was roughly $1,300 for my three pets.

Somehow Americans spend an average of $1,700 per year per pet. I managed to keep my expenses to just over $400 per pet (I do all grooming at home). I would personally be able to deduct about $1,300 from my taxes. To figure out how much you can personally save, you’ll have to do the math for your tax bracket.

What Does the HAPPY Act Cover?

All food, vet, and upkeep expenses.

What Does it Not Cover?

The cost to adopt or purchase a pet.

Pros of the HAPPY Act

• Added tax incentive could inspire those who have been on the fence about getting a first or additional pets to go out and get one. With the glut of animals at shelters these days any little bit of help to avoid euthanization is a plus.
• For the 60% of American households already with a pet, it is added incentive for those now realizing that being a good pet owner does result in work to try to see it through hard times versus giving the pet up to a shelter.
• Pets have been proven to contribute greatly to our happiness. Happiness leads to increased productivity. So in theory, more pet owners could potentially lead to an improved economy.

Cons of the Happy Act

• It would be an itemized deduction, meaning that, for the most part, it would apply to higher income taxpayers. Without doubt, lower and middle income taxpayers need the most help in maintaining their pets. So this bill is targeted towards the wrong crowd.
• If more people purchase an animal from breeders and animal retailers, then realize they aren’t fit to be a pet owner, it could actually result in more animals ending up in shelters.

My HAPPY Act Amendment

Having been a volunteer dog walker at a local humane society, I know the disproportionate number of animals taken in versus those actually adopted out. Part of me holds a healthy dose of resentment towards puppy mill style retailers and even legit breeders. Every time someone purchases from one of these outlets, that is one less animal that will be adopted from a shelter. And believe me, there’s enough shelter animals to go around.

For this bill to be best case scenario, I would add the amendment that the animal must be or have been adopted from a shelter. These are the animals that need the most help and there should be more incentive to adopt them than their bred counterparts. It would also have the effect of slowing down breeding operations, which would reduce the overall number of animals, and the resulting number of animals that get euthanized.

Besides the owner who buys Muffy, the purebred championship bloodline poodle, does not need any additional tax breaks.

Reader Discussion:

• Are you in favor of the passage of the HAPPY Act?
• What amendments, if any, would you add to the bill?
• Would the passage of this bill encourage you to adopt a first or additional pets?

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- The Correct Spending Order

www.rothira-advisor.com Noted retirement planning expert James Lange shares some of his tips on how to plan for retirement and beyond. Jim has ...

Rick Ferri on Fox Business - Bogleheads’ Guide to

Rick Ferri was interviewed on Fox Business News about the book, "Bogleheads' Guide to Retirement Planning", on 24-November-2009 ...

What do Scarlett Johansson and Ramit Sethi have in common?

No, it’s not simply a love of talking about large breasts. Check out the cover of last month’s Glamour. Bottom-left corner.

Aww yeah.

Below, I’ve embedded the article itself. But this isn’t just to point out how Scarlett and I are destined to be together.

Notice how my content has been translated for a female audience. Same material, but it’s completely different than the way I write. It reminds me of some of my previous articles on prior guest post on women and money, specifically an article on how women’s magazines and men’s magazines write about money.

Below, click “Fullscreen” to read this:

Can’t see the embedded file? Click here.

More reading

• See my other press appearances
• See an extremely detailed interview on how I get press coverage

Exciting 20SomethingFinance TGIA-Thanksgiving Updates

If you like toilet humor and personal finance, you’ll love the post I just posted over on my new personal finance blog, MicroFrugality.com. Check it out and subscribe to that blog or you’re missing out on ‘nuggets’ like this one.

In Other Self Promoting News:

Twitter: I’ve updated my Twitter background and plan to start Tweeting more often. Follow me on Twitter!

LinkedIn: I’d like to start connecting with readers and contributors to 20somethingfinance on a personal and professional level more than I have in the past. To that end, I just created a LinkedIn profile. Add me to your network!

My Ugly Mug: I’ve just updated my gravatar (which you’ll find in my comments) to actually include a picture of my face. How vain is that?! Just another effort to provide a little more transparency around here and connect with you all on a personal level.

Content Updates: I’m getting over 100 direct visits to the site daily, which means people are typing in the URL or bookmarking to come to the site to see what’s new. It’s much easier to keep up with new content than that. If you want free updates, subscribe to the blog. Your information is 100% private and will never be sold or used other than sending you new content. Choose one of the options below to subscribe:

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The 5 Worst Twenty Something Personal Finance Blunders

Sound personal finance is often times not what you DO, but what you DON’T DO. Often times we look for all the right answers, tips, and advice about what we need to be doing to reach our financial goals. If you are able to refrain from doing the following five things, you will be better off than most. Which two have I been guilty of ? Which have you been guilty of? Read on to find out.

The 5 Personal Finance Mistakes you should Avoid

1. Build any sort of non-mortgage or tuition debt (consumer debt)

This one is absolutely killer. I’d estimate that at least half of the personal finance blogs out there these days are focused around the ‘get out of debt’ mantra. Why? Because a whole bunch of people dig themselves deep into debt. Until the recession, the U.S. personal savings rate had dipped into the negatives – meaning that the average person was spending more than they were earning.

Student tuition (within reason) often has a good return on investment. Owning a home can also be advantageous for your personal finances. These are permissible debts, if used wisely. Just about every other type of debt is consumer based. You spent the money because you wanted something. That ’something’ didn’t bring happiness, so you bought other ’somethings’. It’s a vicious cycle that never works to your advantage.

2. Wait on saving for retirement

I don’t know how many times I have heard peers say ‘I’m not worried, I have decades to save for retirement’. I personally max out my 401k each year, get a 50% match on it, and I’m still worried. We live in an age without pensions, and the cushy retirements that our grandparents and some of our parents have to look forward to will be extinct when we retire. Start building your own pension RIGHT NOW. You need the compound earnings for decades to outpace inflation and afford yourself a comfortable retirement.

3. Buy vehicles that you can’t truly afford or need

I spent too much on a vehicle. Instead of finding a serviceable $4 or $5k used car, I bought one that was $11k. Even worse, I financed it. A little over a year ago, we sold the car. I felt a little redeemed that I sold it for the same price that I bought it for after two years of use – but still, lesson learned.

In selling the vehicle and taking the bus to work, I have been able to save over $300 per month. I have a friend who now owns two vehicles that were purchased for over $20k – the most recent one because it’s a fast vehicle with a ton of horsepower. He and his wife have a higher income than my wife and I do. They also could bus to work if they chose to. He was absolutely amazed that I was able to max out my 401k. In paying nothing other than maintenance costs for our 2000 Pontiac Grand Am, we are saving roughly $800/month on vehicles – all of which can go towards my 401k.

The bottom line is (and this may hurt) – THAT EXPENSIVE VEHICLE YOU CRAVE FOR IS NOT A RIGHT. If you absolutely need a vehicle, get a serviceable used one that is at least 3-5 years old that you can pay for outright. Anything more is most often a personal finance blunder.

4. Buy more house than you need

The biggest danger in buying more house than you need is that your housing expenses will become disproportionately high in comparison to your other expenses. Experts recommend keeping your housing expenses to less than one-third of your take home income. I’d recommend pushing it lower than that. If you have huge mortgage debt and you or your partner lose their job, you may be in big trouble.

This was a reality for my wife and I earlier in the year when she lost her job. Our expenses were suddenly outpacing our income to the point that I had to cut my 401k contributions to zero. Make your house work for you, not against you.

5. Rush to get an MBA or other graduate degree

I have seen a number of colleagues who are less than two years removed from their undergraduate degree clamor to get their MBA as if it was their pre-scripted destiny. In order for a graduate degree or MBA to make sense, I truly believe a few things need to happen first:

• You have at least 5 years of experience related to the field that you want to advance your career in. Don’t add insane tuition debt if you don’t even know that you’ll like the job that your degree may bring. If you don’t know, don’t do it.
• Do a cost/benefit analysis. Ask yourself how many years and at what salary it would take to pay this degree off. Factor in the income that you’ll be losing for the years that you’ll be back in school. I’ve done this calculation and estimate that it would take me at least 10 years with an additional $20k in salary JUST TO BREAK EVEN. If it doesn’t pay off, don’t do it.
• Ask yourself, better yet – ask potential employers if they would be willing to hire someone with your experience level and an expensive piece of paper at anywhere near the income level you are looking to reach with that expensive piece of paper. If you aren’t getting the answers that you have dreamed about, don’t do it.

Personal Finance Blunder Honorable Mentions:

• Try to keep up with the Joneses with emerging technologies.
• Eat out excessively.
• Wander around for years without finishing your degree or trying to grow your career.
• Save money instead of first paying off consumer debt.
• Neglect paying for the right insurance.
• Choose high fee investments.

Reader Discussion:

• What personal finance blunders are you guilty of?
• How have you fixed a personal finance mistake?

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