How to handle market declines early in your golden years.
Stock prices are up substantially from their March 2009 lows, but there is always the possibility that markets will retrench. What will happen if stocks tumble soon after you retire?
Let's use an example of two unrelated individuals, Sue and Joe. Each one has $1 million and retires at the age of 65 with a portfolio comprised of 50% global stocks and 50% bonds. Each plans on withdrawing an initial $50,000 (5% of beginning portfolio value) and will increase this amount with inflation each year. Each expects to live to 100. They retire at different times.
Sue's portfolio supported her as she planned for 35 years, with enough money left so she could leave a large legacy. Joe, on the other hand, ran out of money prematurely.
Why the difference? It's all due to the randomness of returns in retirement.
Sue was fortunate enough that, in the first few years of her retirement, her portfolio earned relatively high returns net of inflation. Joe wasn't so lucky. His portfolio's returns were negative (after inflation) in the first few years of his retirement.
Bootstrapping
While we can't predict the future, we can use something called "bootstrapping" to analyze the impact of different sequences of returns on a portfolio. Bootstrapping, as we use it, starts with the returns for a portfolio similar to the one we recommend to our clients, for the 41-year period between 1970 and 2010.
To estimate a possible range of future returns, we then construct 41 hypothetical scenarios, each assuming that retirement began in a year from 1970 to 2010. We calculate all subsequent returns through 2010, then loop back to 1970 and the years following. While these 41 scenarios don't indicate future performance, they give us a reasonable range of outcomes to consider.
For each scenario, we use the Consumer Price Index (measured for the 12 months ending the previous December) to increase distributions annually.
Consider three separate examples:
Scenario 1: Sue retired in 2009. The first year, her portfolio returned 20.2%, inflation was 2.7%, for a real return of 17.5%. The second year of reitrement, the portfolio gained 13.5%, or 12% after inflation. Thirty-five years after retirement, Sue can expect her $1 million starting portfolio to be worth $8.1 million.
Scenario 2: Joe retired in 2007. In his first year, stocks gained 6.3% and inflation was 4.1%, leaving 2.2% as a real return. The second year was worse, with the portfolio losing 16.4% after inflation. The hits put Joe at a disadvantage, and at his withdrawal rate he can expect to run out of money in 29 years.
Scenario 3: Similarly, someone who retired in 1973 would have experienced a 6.8% loss in the first year, but with 8.7% inflation the real return would have been minus 15.5%. In the second year, the after-inflation return would have been negative 20.6%. Against those odds, the retiree would run out of money in 33 years.
Analysis
In retirement, positive returns increase the size of the portfolio, while negative returns and distributions make it smaller. As a general guide, we believe that portfolios can generally sustain a 4% initial distribution, increasing by the rate of inflation each year.
Sue and Joe each started taking out a more aggressive 5%. Sue's portfolio (Scenario 1) benefited from high returns and low inflation in the first two years of her retirement, and that decreased the distribution rate to a more sustainable level over time. Her portfolio eventually generated returns in excess of distributions, leading to good growth.
Let's look at two possible scenarios for Joe, Scenario 2 and Scenario 3. In the second scenario, the portfolio suffered an extremely poor return of -16.4% in the second year after Joe retired. As inflation continued raising his distributions, his portfolio could not keep up with them and ran out of money in 29 years.
The third scenario shows two bad things happening early in retirement -- negative portfolio returns and high inflation. These caused the portfolio to shrink at the same time that distributions increased rapidly. This combination led to unsustainably high distributions, and the portfolio failed in 33 years.
Advice for Future Retirees
What can investors do to keep from ending up like Joe, given all the uncertainty about future returns?
1. Have more at the start
The adage for a vacation is to take half the luggage and twice the money, since people know it is not unusual to spend more than planned.
The same applies to the size of retirement portfolios. The best advice is to retire with a portfolio that is worth more than you think is necessary, rather than with a portfolio that will last only if everything goes exactly right.
2. Stress test your portfolio
When planning for retirement, assume negative portfolio returns and high inflation in the first two years of retirement. If the resulting smaller portfolio can support the higher inflation-adjusted distributions over a long life span, you're probably doing OK.
3. Have a Plan B
When considering retirement during a time of either negative market returns or high inflation, analyze your situation closely to see if your portfolio can sustain the resultant long-term stresses. You will improve your probability of success by delaying retirement for a year or two, decreasing your spending, or taking some part-time work -- or a combination of these options.
Your retirement can be more like Sue's if you recognize that the best way to cope with future uncertainty is to save more while you can and to spend at a sustainable rate in retirement.
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Wednesday, May 25, 2011
Saturday, May 7, 2011
Could Your Finances Survive a Natural Disaster?
The earthquake and tsunami in Japan should be wake-up calls for all of us regarding disaster preparedness. No matter where you live, you're subject to the risk of a disastrous earthquake, hurricane, tornado, fire, flood, or terrorist act. There's lots of information out there about how you can protect yourself and your family. It's well worth your time learning how to be prepared, and then acting on this information. But don't stop there -- learn how to protect your financial assets as well.
First, it's helpful to do some scenario planning, where you think about the steps you should take to be prepared in the event of a few extreme possibilities. For instance, imagine what you would do if you had just a few minutes warning before your house was completely destroyed by a natural disaster. Or, for something a little less extreme, determine what you would do if your house remained intact, but you were without power, phones, or transportation for several days following a natural disaster. Imagine that you've survived such an event and figure out now just which items and information you would want.
A common emergency preparedness step is to have a small suitcase or bag packed and ready to go so that you can quickly grab it on your way out the door, if you need to flee quickly. There are many items you'd want to pack that would help protect your physical health and provide some comfort, including a first aid kit, a water supply, flashlights, battery-operated radio, protective clothing, and so on.
But most people never think about the items to take that help protect your financial assets. Here are a few to add to your grab bag or remember to take with it on your way out the door:
• Your wallet or purse that contains your picture ID, cash, credit cards, and medical insurance cards. Have a routine place where these items are stored so you can grab them quickly and go. If you have a passport, know where it is so you can grab that quickly as well.
• A stash of cash. Put this in your grab bag, and don't touch it for day-to-day spending. The reason: The amount of cash you normally carry probably gets low now and then, and you can't count on being able to get to an ATM, and, even if you could, it might not work if the power is down.
• Your cell phone, smart phone, and tablet device, such as an iPad. Include the charger, but it's also smart to have a hand-cranked or solar powered battery charger. As a matter of routine, I always plug these devices into their chargers before going to bed at night, so they're always fully charged in the morning.
• A list of account numbers and contact information for all your insurance policies, such as homeowners, automobile, earthquake, health, disability and life insurance. I'd put this information on both a physical piece of paper and in an electronic device such as a smart phone. The reason to have it on a piece of paper? It's quite possible that you might not have power for several days, and your cell phone battery could get used up.
• A list of account numbers and contact information for all regular payment obligations that you have, including your mortgage, rent, car, insurance, and utilities. Ideally you'd want payments to continue during the emergency, and automatic payments from your checking account are a big help. In many cases, you might get forgiveness during an emergency, but you probably shouldn't count on it.
• A list of account numbers and contact information for all of your bank accounts, retirement savings, and investments. You need to be careful here -- you don't want this information to fall into the wrong hands, where somebody could draw out your money. Be particularly careful with passwords to accounts that are linked to the Internet. If your list is on an electronic device, protect it with a password. If it's on a piece of paper, scramble the account numbers in a manner that you can remember.
• Contact information for your work. At the very least, you'll want to contact the appropriate person to let them know of your safety and whereabouts, and ask about reporting in to work. Many employers have formal emergency preparedness programs -- make sure you have the appropriate contact information. • The key to your safe deposit box, if you have one. Make sure you know where the key is and can grab it quickly when you leave.
• Copies of medical directives and your power of attorney.
Here are a few, other, non-grab bag steps to take:
• Make sure all important documents, such as your will, deeds, insurance policies, etc., are stored in a safe place, such as a water-proof and fire-proof box or a safe deposit box.
• Now might be a good time to review your insurance policies. Determine exactly what your coverage would be in the event of possible disasters, and make changes if you find that the coverage falls short.
• Be aware of whether your income would stop during a disaster. This might not be a problem for many people who rely on a salary, pension, annuity, or Social Security benefits. But many other people are self-employed or are paid by the hour, and income could come to a halt. Make sure you have an adequate emergency cash fund that could cover your obligations if your income was stopped for a few months.
• Keep "buffers" on your credit cards -- don't ever charge them to their maximum limit, so you'll have funds available should you need them.
• Similarly, make it a habit to always have at least a quarter tank of gas in your car -- and preferably more. Think about what would happen if you couldn't fill up your car for several days.
Putting this all together may sound like a pain, and I have to admit that until now, my wife and I haven't taken all the above steps. But we received our wake-up call -- literally. We live in a low-lying area near the beach in Ventura County, California, and we received phone calls early Friday morning warning us of a possible tsunami. We ran around scared for several minutes until we learned that we weren't in immediate danger.
So now we're working to finish these steps with a sense of urgency, and it makes us feel good that we're making quick progress. I sincerely hope you'll never need to use these precautions. But won't you feel better knowing you're prepared, just in case?
First, it's helpful to do some scenario planning, where you think about the steps you should take to be prepared in the event of a few extreme possibilities. For instance, imagine what you would do if you had just a few minutes warning before your house was completely destroyed by a natural disaster. Or, for something a little less extreme, determine what you would do if your house remained intact, but you were without power, phones, or transportation for several days following a natural disaster. Imagine that you've survived such an event and figure out now just which items and information you would want.
A common emergency preparedness step is to have a small suitcase or bag packed and ready to go so that you can quickly grab it on your way out the door, if you need to flee quickly. There are many items you'd want to pack that would help protect your physical health and provide some comfort, including a first aid kit, a water supply, flashlights, battery-operated radio, protective clothing, and so on.
But most people never think about the items to take that help protect your financial assets. Here are a few to add to your grab bag or remember to take with it on your way out the door:
• Your wallet or purse that contains your picture ID, cash, credit cards, and medical insurance cards. Have a routine place where these items are stored so you can grab them quickly and go. If you have a passport, know where it is so you can grab that quickly as well.
• A stash of cash. Put this in your grab bag, and don't touch it for day-to-day spending. The reason: The amount of cash you normally carry probably gets low now and then, and you can't count on being able to get to an ATM, and, even if you could, it might not work if the power is down.
• Your cell phone, smart phone, and tablet device, such as an iPad. Include the charger, but it's also smart to have a hand-cranked or solar powered battery charger. As a matter of routine, I always plug these devices into their chargers before going to bed at night, so they're always fully charged in the morning.
• A list of account numbers and contact information for all your insurance policies, such as homeowners, automobile, earthquake, health, disability and life insurance. I'd put this information on both a physical piece of paper and in an electronic device such as a smart phone. The reason to have it on a piece of paper? It's quite possible that you might not have power for several days, and your cell phone battery could get used up.
• A list of account numbers and contact information for all regular payment obligations that you have, including your mortgage, rent, car, insurance, and utilities. Ideally you'd want payments to continue during the emergency, and automatic payments from your checking account are a big help. In many cases, you might get forgiveness during an emergency, but you probably shouldn't count on it.
• A list of account numbers and contact information for all of your bank accounts, retirement savings, and investments. You need to be careful here -- you don't want this information to fall into the wrong hands, where somebody could draw out your money. Be particularly careful with passwords to accounts that are linked to the Internet. If your list is on an electronic device, protect it with a password. If it's on a piece of paper, scramble the account numbers in a manner that you can remember.
• Contact information for your work. At the very least, you'll want to contact the appropriate person to let them know of your safety and whereabouts, and ask about reporting in to work. Many employers have formal emergency preparedness programs -- make sure you have the appropriate contact information. • The key to your safe deposit box, if you have one. Make sure you know where the key is and can grab it quickly when you leave.
• Copies of medical directives and your power of attorney.
Here are a few, other, non-grab bag steps to take:
• Make sure all important documents, such as your will, deeds, insurance policies, etc., are stored in a safe place, such as a water-proof and fire-proof box or a safe deposit box.
• Now might be a good time to review your insurance policies. Determine exactly what your coverage would be in the event of possible disasters, and make changes if you find that the coverage falls short.
• Be aware of whether your income would stop during a disaster. This might not be a problem for many people who rely on a salary, pension, annuity, or Social Security benefits. But many other people are self-employed or are paid by the hour, and income could come to a halt. Make sure you have an adequate emergency cash fund that could cover your obligations if your income was stopped for a few months.
• Keep "buffers" on your credit cards -- don't ever charge them to their maximum limit, so you'll have funds available should you need them.
• Similarly, make it a habit to always have at least a quarter tank of gas in your car -- and preferably more. Think about what would happen if you couldn't fill up your car for several days.
Putting this all together may sound like a pain, and I have to admit that until now, my wife and I haven't taken all the above steps. But we received our wake-up call -- literally. We live in a low-lying area near the beach in Ventura County, California, and we received phone calls early Friday morning warning us of a possible tsunami. We ran around scared for several minutes until we learned that we weren't in immediate danger.
So now we're working to finish these steps with a sense of urgency, and it makes us feel good that we're making quick progress. I sincerely hope you'll never need to use these precautions. But won't you feel better knowing you're prepared, just in case?
How to Cash in on Spring Cleaning
After about a year and a half of marriage, my husband and I have finally unpacked the boxes of his stuff and our wedding gifts that had piled up in every corner of our apartment. In doing so, we organized the whole place -- finding a home within our home for all our "new" things while purging the old.
Through the whole process, we've unearthed a veritable trove of potential income sources littering our former wasteland. If you invest some time in spring cleaning, be sure to take stock of these six possible treasures disguised as trash:
1) Receipts
My level-one hoarding issues have finally paid off--big time. (Kiplinger's does not encourage or condone hoarding in any way.) Shuffled amid our apartment's piles and piles of papers, we located receipts we were able to use for Flexible Spending Account claims amounting to nearly $2,000.
You just missed most employers' March 15 deadline by which you needed to spend 2010 FSA funds. But you may still have time to file your claims: My company, for example, gives participating employees until June 15, as long as the receipts show services were rendered or purchases were made before March 15. If you don't drain the account in time, you'll have to kiss that cash goodbye.
Also keep an eye out for receipts you can use to claim tax deductions, such as for charitable donations or job-hunting expenses, if you itemize.
2) Gift Cards
Be sure to sift through your clutter for unused gift cards. Even if you don't care to use them yourself, you can still gain value from them before they expire. Exchange sites such as Gift Card Granny or Plastic Jungle will buy gift cards for a portion of their value.
3) Electronics
With upgrades coming out faster than you can say, "I love this new thing I just bought!" (stupid, sexy iPad 2), your latest gadget might go into the pass pile sooner than you think. Rather than junking all your electronic goods, you can try:
...selling them. Gazelle.com will buy computers and accessories, game systems, MP3 players, digital cameras, satellite radios and GPS devices. Type in the kind of electronic device you'd like to sell and answer a few questions about it. Gazelle will then make you an offer. If the item is valued at more than $1, you can ship it to the company for free and, if all checks out, you'll get paid within ten business days.
...exchanging them. Some companies may also let you trade old items for credit. For example, the Apple Recycling Program will take any old computers off your hands -- Macs or PCs -- (the company will provide shipping materials and postage, and you can just mail it in) and give you an Apple gift card for their determined value. If the company says your old computer isn't worth anything, it will recycle it for you anyway. Hewlett-Packard offers a similar trade-in program, but you have to buy a new HP or Compaq product first. You then send in your old product and get a reimbursement for your new purchase. Bring your old iPod into an Apple store and get 10% off a new one.
...donating them and reaping the tax deduction, if you itemize. The National Cristina Foundation will take your used computers, software and accessories and find them a new home, helping provide computer training to the less fortunate. Old cell phones can be donated through ReCellular.com.
...recycling them. Best Buy, for example, will take your used television (up to 32 inches), but you'll have to pay $10 and get a $10 gift card back to do so. Or try freecycle.org to find a new local home for your old stuff.
For more information on donating and recycling electronic goods, including how to safely and completely wipe all your personal information from them, visit the EPA's eCycling home page.
4) Jewelry
Pat down your jewelry box to fill up your pocketbook. As of late March, gold is topping $1,400 an ounce, up 28% over the past year; silver is nearing $40 an ounce, double what it was worth last year; and platinum is hovering around $1,750 an ounce, about 7% higher than a year ago. So now is a great time to trade in your brilliant baubles for some big bucks.
You may immediately think of commercials for Cash4Gold.com and similar gold-buying services (you late-night TV addict). But before you throw your jewelry down the mail slot, try shopping around at auction houses, estate buyers and jewelers to find and compare offers. Even better, find an appraiser via the National Association of Jewelry Appraisers. For a per-item or hourly fee (typically $50 to $200 per hour), the appraiser will evaluate your jewelry.
5) Clothing and Accessories
Go shopping in your closet for items to sell at a secondhand store. Sadly, a BCBGMaxAzria dress hangs in my closet, for example, having never fulfilled its purpose of being my wedding-rehearsal dress -- thanks to my freakishly cold, snow-flurry-filled mid October wedding week in New Jersey. Caught up with the trifling matter of getting married, I never got to return the dress or find another reason to wear it. But the pretty frock may find purpose once again: Originally priced at $238 (forgive me my mild bridezilla-esque splurge), it could resell for about $85, says Derek Kennedy, co-owner of Mustard Seed, a secondhand store in Bethesda, Md.
Typically, clothing will resell for just a quarter or a third of the original retail price, Kennedy says. But handbags may do better -- up to half the original price tag. At his store, you get half of the determined resale price for your item upfront. So I would immediately pocket $42.50 from my un-rehearsal-dinner dress. Other stores may offer part of your payment in cash and part as store credit. If you sell to a consignment shop, you'll have to wait until your item sells before collecting any money.
Call your choice secondhand store or check its Web site before you head in. You may need to make an appointment to peddle your wares. And your goods ought to be in season, in style and fit in with the rest of the shop's offerings. You probably don't need to have your duds freshly dry cleaned, but they'll need to be clean, stain-free and neatly folded.
Just like your electronic goods, if you can't profit from your apparel, consider donating it and claiming the tax benefit.
6) Books, Music, Movies and Other Miscellaneous Items
Many overlaps in my husband's and my music and movie collections helped reaffirm our compatibility and may help pad our piggy bank.
First, we'll try selling them online. With 94 million active members, auction giant eBay will likely draw the greatest number of deal seekers to your virtual table. To sell auction-style, you have to pay listing fees of 25 cents to $2, depending on your starting price. And if an item sells, you also pay 9% of the final price, up to $50. To fix your sale price, you pay a listing fee of 50 cents. If you sell something for between 99 cents and $50, you pay eBay 8% to 15% of the sale price, depending on the type of product.
Or you might enlist an eBay trading assistant, such as iSold It (or Catherine Keener's character in "The 40-Year Old Virgin" ... of which I have two DVD copies, if you're interested in buying) to help push your goods. It's free to list your item, but if iSold It stays true to its name, you'll pay 33% to 40% of your sale price, plus eBay and payment-processing fees. Other sites to try: Amazon Marketplace, Overstock and Craigslist. Especially if you're trying to sell furniture, use Craigslist or your social network to find local buyers who can swing by to pick stuff up themselves. Just be safe about it:
You can also try (gasp) stepping offline and meeting potential customers in-person with a garage or yard sale. And check with your local community center -- many organize neighborhood-wide garage sales. For example, my sister's town will be holding its annual garage sale soon. For a $25 donation to the local volunteer first-aid squad, she can set up her sale without the usually required permit and soak up all the foot traffic from everyone else's concurrent sales without having to worry about advertising on her own.
Have any other ideas to cash in on spring cleaning? Please share them in the comment box below. And let me know if you're desperately looking for an "About a Boy" DVD; I currently have three in my apartment. I'll throw in the novel for free.
Through the whole process, we've unearthed a veritable trove of potential income sources littering our former wasteland. If you invest some time in spring cleaning, be sure to take stock of these six possible treasures disguised as trash:
1) Receipts
My level-one hoarding issues have finally paid off--big time. (Kiplinger's does not encourage or condone hoarding in any way.) Shuffled amid our apartment's piles and piles of papers, we located receipts we were able to use for Flexible Spending Account claims amounting to nearly $2,000.
You just missed most employers' March 15 deadline by which you needed to spend 2010 FSA funds. But you may still have time to file your claims: My company, for example, gives participating employees until June 15, as long as the receipts show services were rendered or purchases were made before March 15. If you don't drain the account in time, you'll have to kiss that cash goodbye.
Also keep an eye out for receipts you can use to claim tax deductions, such as for charitable donations or job-hunting expenses, if you itemize.
2) Gift Cards
Be sure to sift through your clutter for unused gift cards. Even if you don't care to use them yourself, you can still gain value from them before they expire. Exchange sites such as Gift Card Granny or Plastic Jungle will buy gift cards for a portion of their value.
3) Electronics
With upgrades coming out faster than you can say, "I love this new thing I just bought!" (stupid, sexy iPad 2), your latest gadget might go into the pass pile sooner than you think. Rather than junking all your electronic goods, you can try:
...selling them. Gazelle.com will buy computers and accessories, game systems, MP3 players, digital cameras, satellite radios and GPS devices. Type in the kind of electronic device you'd like to sell and answer a few questions about it. Gazelle will then make you an offer. If the item is valued at more than $1, you can ship it to the company for free and, if all checks out, you'll get paid within ten business days.
...exchanging them. Some companies may also let you trade old items for credit. For example, the Apple Recycling Program will take any old computers off your hands -- Macs or PCs -- (the company will provide shipping materials and postage, and you can just mail it in) and give you an Apple gift card for their determined value. If the company says your old computer isn't worth anything, it will recycle it for you anyway. Hewlett-Packard offers a similar trade-in program, but you have to buy a new HP or Compaq product first. You then send in your old product and get a reimbursement for your new purchase. Bring your old iPod into an Apple store and get 10% off a new one.
...donating them and reaping the tax deduction, if you itemize. The National Cristina Foundation will take your used computers, software and accessories and find them a new home, helping provide computer training to the less fortunate. Old cell phones can be donated through ReCellular.com.
...recycling them. Best Buy, for example, will take your used television (up to 32 inches), but you'll have to pay $10 and get a $10 gift card back to do so. Or try freecycle.org to find a new local home for your old stuff.
For more information on donating and recycling electronic goods, including how to safely and completely wipe all your personal information from them, visit the EPA's eCycling home page.
4) Jewelry
Pat down your jewelry box to fill up your pocketbook. As of late March, gold is topping $1,400 an ounce, up 28% over the past year; silver is nearing $40 an ounce, double what it was worth last year; and platinum is hovering around $1,750 an ounce, about 7% higher than a year ago. So now is a great time to trade in your brilliant baubles for some big bucks.
You may immediately think of commercials for Cash4Gold.com and similar gold-buying services (you late-night TV addict). But before you throw your jewelry down the mail slot, try shopping around at auction houses, estate buyers and jewelers to find and compare offers. Even better, find an appraiser via the National Association of Jewelry Appraisers. For a per-item or hourly fee (typically $50 to $200 per hour), the appraiser will evaluate your jewelry.
5) Clothing and Accessories
Go shopping in your closet for items to sell at a secondhand store. Sadly, a BCBGMaxAzria dress hangs in my closet, for example, having never fulfilled its purpose of being my wedding-rehearsal dress -- thanks to my freakishly cold, snow-flurry-filled mid October wedding week in New Jersey. Caught up with the trifling matter of getting married, I never got to return the dress or find another reason to wear it. But the pretty frock may find purpose once again: Originally priced at $238 (forgive me my mild bridezilla-esque splurge), it could resell for about $85, says Derek Kennedy, co-owner of Mustard Seed, a secondhand store in Bethesda, Md.
Typically, clothing will resell for just a quarter or a third of the original retail price, Kennedy says. But handbags may do better -- up to half the original price tag. At his store, you get half of the determined resale price for your item upfront. So I would immediately pocket $42.50 from my un-rehearsal-dinner dress. Other stores may offer part of your payment in cash and part as store credit. If you sell to a consignment shop, you'll have to wait until your item sells before collecting any money.
Call your choice secondhand store or check its Web site before you head in. You may need to make an appointment to peddle your wares. And your goods ought to be in season, in style and fit in with the rest of the shop's offerings. You probably don't need to have your duds freshly dry cleaned, but they'll need to be clean, stain-free and neatly folded.
Just like your electronic goods, if you can't profit from your apparel, consider donating it and claiming the tax benefit.
6) Books, Music, Movies and Other Miscellaneous Items
Many overlaps in my husband's and my music and movie collections helped reaffirm our compatibility and may help pad our piggy bank.
First, we'll try selling them online. With 94 million active members, auction giant eBay will likely draw the greatest number of deal seekers to your virtual table. To sell auction-style, you have to pay listing fees of 25 cents to $2, depending on your starting price. And if an item sells, you also pay 9% of the final price, up to $50. To fix your sale price, you pay a listing fee of 50 cents. If you sell something for between 99 cents and $50, you pay eBay 8% to 15% of the sale price, depending on the type of product.
Or you might enlist an eBay trading assistant, such as iSold It (or Catherine Keener's character in "The 40-Year Old Virgin" ... of which I have two DVD copies, if you're interested in buying) to help push your goods. It's free to list your item, but if iSold It stays true to its name, you'll pay 33% to 40% of your sale price, plus eBay and payment-processing fees. Other sites to try: Amazon Marketplace, Overstock and Craigslist. Especially if you're trying to sell furniture, use Craigslist or your social network to find local buyers who can swing by to pick stuff up themselves. Just be safe about it:
You can also try (gasp) stepping offline and meeting potential customers in-person with a garage or yard sale. And check with your local community center -- many organize neighborhood-wide garage sales. For example, my sister's town will be holding its annual garage sale soon. For a $25 donation to the local volunteer first-aid squad, she can set up her sale without the usually required permit and soak up all the foot traffic from everyone else's concurrent sales without having to worry about advertising on her own.
Have any other ideas to cash in on spring cleaning? Please share them in the comment box below. And let me know if you're desperately looking for an "About a Boy" DVD; I currently have three in my apartment. I'll throw in the novel for free.
5 Easy Steps to Becoming a Millionaire
Who wouldn't want to be worth a million dollars? Many of us dream of achieving this goal, more often than not for the sake of the freedom financial stability would bring. So how can we get there? The answers are actually much easier than you might expect. Here are several easy steps to get you into the millionaires' club. (With a little discipline and the help of some powerful savings vehicles, anyone can hit this mark.)
1. Only Marry Once
According to "The Millionaire Next Door" by Thomas J. Stanley, Ph.D and William D. Danko, Ph.D, the average millionaire is married with three children. The wives of these millionaires are good budgeters and most often described as even more frugal than their husbands. Interestingly, according to Stanley and Danko's survey, half of these wives do no work outside the home and of those who do, they are most likely teachers.
One upside of only marrying once is avoiding the costs of divorce and of subsequent weddings. The cost of a divorce depends on many factors including income, attorney fees, court fees, and the assets a couple has and how they are divided. The average wedding cost in the United States in 2010, according to The Wedding Report.com, was $24,070.
2. Live off One Income
One of the advantages of having a life partner is the potential to pull in two incomes. If you are able, consider structuring your set expenses based on only one income, and save what comes in from the other income. Doing so strengthens your financial position in two ways: In case of an emergency or if one partner loses their job, you will not only have less set expenses to cover, but you will also have built up your net worth as a safety measure.
3. Choose the Right Career
According to The Millionaire Next Door, "self-employed people make up less than 20% of the workers in America but account for two-thirds of the millionaires." The book goes on to list an average of 45 to 55 hours spent working per week, so by no means is this the self-employed fantasy of playing golf while your business grows.
The idea of the "right" career can encompass a myriad of factors. Ideally, this would be a career you enjoy, otherwise you likely won't be putting in the dedication required to be successful. The right career would also coincide with overall working trends, or at least not work directly against them. For example, starting a career in typewriter manufacturing may be something you are passionate about, but it would likely suffer due to the current technological trends.
4. Put Your Money in Appreciating Assets
According to Stanley and Danko, the millionaires in their survey invested nearly 20% of their realized household income each year. Nearly 20% of the household's wealth is held in "transaction securities such as publicly traded stocks and mutual funds" and the millionaires tended to rarely sell their equities. Only a very small number of the millionaires surveyed had ever leased a car; few even drove the current year model. Half of those surveyed had lived in their homes for more than 20 years, which, as the authors point out, means they have likely enjoyed "significant increases in the value of their homes."
The end result? These people put a financial priority on assets that will make them money, from their homes to their businesses.
5. Don't Live the Millionaire Lifestyle
Warren Buffett's frugal lifestyle (especially relative to his net worth) is the go-to example for this point. The average value of the surveyed millionaires' homes was $320,000. The bottom line is, those who spend their money on non-appreciating assets cannot put that same money in an asset that will net them a return and increase their wealth. If it is important to you to build your financial worth, stop spending it on new cars, toys and clothes. (The Oracle of Omaha has a net worth in the billions, but his lifestyle is not as rich as you may think.)
The Bottom Line
Becoming a millionaire is easier than ever. While this is a dream that will take work and discipline to achieve, it isn't as far out of reach as you might think. Be smart with your money and before you know it, you'll be able to count yourself among the world's wealthier citizens.
1. Only Marry Once
According to "The Millionaire Next Door" by Thomas J. Stanley, Ph.D and William D. Danko, Ph.D, the average millionaire is married with three children. The wives of these millionaires are good budgeters and most often described as even more frugal than their husbands. Interestingly, according to Stanley and Danko's survey, half of these wives do no work outside the home and of those who do, they are most likely teachers.
One upside of only marrying once is avoiding the costs of divorce and of subsequent weddings. The cost of a divorce depends on many factors including income, attorney fees, court fees, and the assets a couple has and how they are divided. The average wedding cost in the United States in 2010, according to The Wedding Report.com, was $24,070.
2. Live off One Income
One of the advantages of having a life partner is the potential to pull in two incomes. If you are able, consider structuring your set expenses based on only one income, and save what comes in from the other income. Doing so strengthens your financial position in two ways: In case of an emergency or if one partner loses their job, you will not only have less set expenses to cover, but you will also have built up your net worth as a safety measure.
3. Choose the Right Career
According to The Millionaire Next Door, "self-employed people make up less than 20% of the workers in America but account for two-thirds of the millionaires." The book goes on to list an average of 45 to 55 hours spent working per week, so by no means is this the self-employed fantasy of playing golf while your business grows.
The idea of the "right" career can encompass a myriad of factors. Ideally, this would be a career you enjoy, otherwise you likely won't be putting in the dedication required to be successful. The right career would also coincide with overall working trends, or at least not work directly against them. For example, starting a career in typewriter manufacturing may be something you are passionate about, but it would likely suffer due to the current technological trends.
4. Put Your Money in Appreciating Assets
According to Stanley and Danko, the millionaires in their survey invested nearly 20% of their realized household income each year. Nearly 20% of the household's wealth is held in "transaction securities such as publicly traded stocks and mutual funds" and the millionaires tended to rarely sell their equities. Only a very small number of the millionaires surveyed had ever leased a car; few even drove the current year model. Half of those surveyed had lived in their homes for more than 20 years, which, as the authors point out, means they have likely enjoyed "significant increases in the value of their homes."
The end result? These people put a financial priority on assets that will make them money, from their homes to their businesses.
5. Don't Live the Millionaire Lifestyle
Warren Buffett's frugal lifestyle (especially relative to his net worth) is the go-to example for this point. The average value of the surveyed millionaires' homes was $320,000. The bottom line is, those who spend their money on non-appreciating assets cannot put that same money in an asset that will net them a return and increase their wealth. If it is important to you to build your financial worth, stop spending it on new cars, toys and clothes. (The Oracle of Omaha has a net worth in the billions, but his lifestyle is not as rich as you may think.)
The Bottom Line
Becoming a millionaire is easier than ever. While this is a dream that will take work and discipline to achieve, it isn't as far out of reach as you might think. Be smart with your money and before you know it, you'll be able to count yourself among the world's wealthier citizens.
Wealth Is What You Save, Not What You Spend
Want to be a millionaire? Don't overspend and use debt wisely.
We all may not be millionaires but there are plenty of financial and life-planning secrets we can learn from the well-heeled.
Most people know that wealth in the U.S. is in the hands of a small percentage of the total population. And, today, most of those folks with a net worth of $1 million or more have earned it themselves.
They're mostly entrepreneurs who create everything from high-speed networks to garbage haulers. They dig ditches and build houses and grow corn and make jewelry. They deal stamps or coins or artwork and control pests and cut lawns. They also cure people and give them new teeth. Others will defend their neighbors or even feed them.
And they're not big spenders. In fact, most of those with big bucks live well under their means -- think about Warren Buffett still living in that modest Omaha home -- and they put their money instead toward investments that help them stockpile more wealth.
"Wealth is what you accumulate, not what you spend," according to Thomas Stanley and William Danko, the authors of the seminal tome on America's wealthy "The Millionaire Next Door," first published in 1996.
"It is seldom luck or inheritance or advanced degrees or even intelligence that enables people to amass fortunes," the authors wrote. "Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and, most of all, self discipline."
Wealth is defined in many ways, though it's generally determined as the value of everything you own minus debts. But there's a difference between marketable assets -- things you own that could be liquidated rather quickly, like stocks, bonds, real estate -- and possessions like cars, clothing and household items that you use regularly and aren't likely to sell.
Income alone does not make one rich. It helps, of course, to build wealth, but the financially independent look to their salaries as a means to an end, which is that pile of cash.
"The wealthy don't spend their wealth on discretionary purchases," said Pam Danziger, founder of Unity Marketing, a consumer market-research firm specializing in luxury goods and experiences. "They get rich by maximizing the value of their investments."
That doesn't mean they don't pay big bucks for pretty shoes or outfits, but that most choose those items carefully and shop for value and quality. "They truly evaluate the purchase as an investment, not an expense," Danziger said.
What they do though is diversify those investments, which gives them more flexibility to ride out difficult times. "The wealthiest clients have very, very diversified portfolios that go way beyond just stocks and bonds into hedge funds, currencies, commodities and emerging markets," said Leslie Lassiter, managing director of the JPMorgan Private Wealth Management.
"There are many, many mutual funds out there that will allow you to get exposure to those types of asset classes," Lassiter said.
Among the biggest differences between those flush with cash and those wishing they were is in how they pay for things. Millionaires tend to use cash for most of their purchases, including cars, homes and boats.
For the average wage earner, of course, that's not always an option but it still holds this lesson: Don't look to debt to fund your lifestyle.
Most wealthy people use debt for investment purposes and are careful not to over-leverage themselves. "A prudent use of debt is an appropriate thing for anyone," Lassiter said.
They also plan very well and spend a lot of time at it. Many are compulsive savers and investors who often say the journey to riches was far more fun than the reaching the goal.
And they're patient, willing to invest in the long term and wait it out. "They stick with their investments and are more likely to have a financial plan," said Sanjiv Mirchandani, president of National Financial, a subsidiary of Fidelity Investments.
Many take the long-term approach to investing because they're working at being financial independent. When they retire, for example, many will know exactly how much they need to live on, to give away and to leave as a legacy.
"The best ones really understand how much liquidity they need to cover their expenses and make sure they have that much cash on hand," Lassiter said. "That's something the average person should do as well."
At the same time, she said most are very careful about leveraging debt. "The wealthy tend to balance between the two," she said.
Recommendations for accumulating wealth:
Live below your means: People with high incomes who spend all that money are not rich; they're just stupid.
Plan: That means plan for today, tomorrow and 30 years after retirement. Take time doing it too and spend time monitoring it every day. Use budgets and stick to them.
Diversify: As Lassiter said, look for mutual funds that allow you exposure to asset classes that aren't related to each other.
Reduce use of credit and turn to cash: It's easier, of course, for a prosperous person to pay for a house in cash than it might be for most folks, but credit-card debt for luxury purchases or extravagant vacations will never pave a road to riches.
Have access to cash: While the rich keep much of their wealth invested, they can get cash when they need it. "Have some kind of line of credit available, like a HELOC (home-equity line of credit) that you never use," Lassiter said. "It's a safety valve." She suggests a year's worth of cash to cover expenses; Danziger thinks three years worth is a better bet.
Spread cash around: When the wealthy pulled money out of the equities markets two and three years ago, they opened a bevy of bank accounts, all guaranteed up to $250,000 of deposits by the Federal Deposit Insurance Corp.
Bring your children into the mix, and remember the importance of estate planning: The affluent can go to great lengths to teach their children about money and how to manage it -- something every family should do. Though talking about money with children consistently ranks as one of the most dreaded conversations, it's important that your heirs know where all the bank accounts and safe-deposit boxes are -- even that their names are on them, too -- who the attorney is, where the will and trusts are filed.
We all may not be millionaires but there are plenty of financial and life-planning secrets we can learn from the well-heeled.
Most people know that wealth in the U.S. is in the hands of a small percentage of the total population. And, today, most of those folks with a net worth of $1 million or more have earned it themselves.
They're mostly entrepreneurs who create everything from high-speed networks to garbage haulers. They dig ditches and build houses and grow corn and make jewelry. They deal stamps or coins or artwork and control pests and cut lawns. They also cure people and give them new teeth. Others will defend their neighbors or even feed them.
And they're not big spenders. In fact, most of those with big bucks live well under their means -- think about Warren Buffett still living in that modest Omaha home -- and they put their money instead toward investments that help them stockpile more wealth.
"Wealth is what you accumulate, not what you spend," according to Thomas Stanley and William Danko, the authors of the seminal tome on America's wealthy "The Millionaire Next Door," first published in 1996.
"It is seldom luck or inheritance or advanced degrees or even intelligence that enables people to amass fortunes," the authors wrote. "Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and, most of all, self discipline."
Wealth is defined in many ways, though it's generally determined as the value of everything you own minus debts. But there's a difference between marketable assets -- things you own that could be liquidated rather quickly, like stocks, bonds, real estate -- and possessions like cars, clothing and household items that you use regularly and aren't likely to sell.
Income alone does not make one rich. It helps, of course, to build wealth, but the financially independent look to their salaries as a means to an end, which is that pile of cash.
"The wealthy don't spend their wealth on discretionary purchases," said Pam Danziger, founder of Unity Marketing, a consumer market-research firm specializing in luxury goods and experiences. "They get rich by maximizing the value of their investments."
That doesn't mean they don't pay big bucks for pretty shoes or outfits, but that most choose those items carefully and shop for value and quality. "They truly evaluate the purchase as an investment, not an expense," Danziger said.
What they do though is diversify those investments, which gives them more flexibility to ride out difficult times. "The wealthiest clients have very, very diversified portfolios that go way beyond just stocks and bonds into hedge funds, currencies, commodities and emerging markets," said Leslie Lassiter, managing director of the JPMorgan Private Wealth Management.
"There are many, many mutual funds out there that will allow you to get exposure to those types of asset classes," Lassiter said.
Among the biggest differences between those flush with cash and those wishing they were is in how they pay for things. Millionaires tend to use cash for most of their purchases, including cars, homes and boats.
For the average wage earner, of course, that's not always an option but it still holds this lesson: Don't look to debt to fund your lifestyle.
Most wealthy people use debt for investment purposes and are careful not to over-leverage themselves. "A prudent use of debt is an appropriate thing for anyone," Lassiter said.
They also plan very well and spend a lot of time at it. Many are compulsive savers and investors who often say the journey to riches was far more fun than the reaching the goal.
And they're patient, willing to invest in the long term and wait it out. "They stick with their investments and are more likely to have a financial plan," said Sanjiv Mirchandani, president of National Financial, a subsidiary of Fidelity Investments.
Many take the long-term approach to investing because they're working at being financial independent. When they retire, for example, many will know exactly how much they need to live on, to give away and to leave as a legacy.
"The best ones really understand how much liquidity they need to cover their expenses and make sure they have that much cash on hand," Lassiter said. "That's something the average person should do as well."
At the same time, she said most are very careful about leveraging debt. "The wealthy tend to balance between the two," she said.
Recommendations for accumulating wealth:
Live below your means: People with high incomes who spend all that money are not rich; they're just stupid.
Plan: That means plan for today, tomorrow and 30 years after retirement. Take time doing it too and spend time monitoring it every day. Use budgets and stick to them.
Diversify: As Lassiter said, look for mutual funds that allow you exposure to asset classes that aren't related to each other.
Reduce use of credit and turn to cash: It's easier, of course, for a prosperous person to pay for a house in cash than it might be for most folks, but credit-card debt for luxury purchases or extravagant vacations will never pave a road to riches.
Have access to cash: While the rich keep much of their wealth invested, they can get cash when they need it. "Have some kind of line of credit available, like a HELOC (home-equity line of credit) that you never use," Lassiter said. "It's a safety valve." She suggests a year's worth of cash to cover expenses; Danziger thinks three years worth is a better bet.
Spread cash around: When the wealthy pulled money out of the equities markets two and three years ago, they opened a bevy of bank accounts, all guaranteed up to $250,000 of deposits by the Federal Deposit Insurance Corp.
Bring your children into the mix, and remember the importance of estate planning: The affluent can go to great lengths to teach their children about money and how to manage it -- something every family should do. Though talking about money with children consistently ranks as one of the most dreaded conversations, it's important that your heirs know where all the bank accounts and safe-deposit boxes are -- even that their names are on them, too -- who the attorney is, where the will and trusts are filed.
Save $100 a Week with These 22 Tips
Follow these 22 simple tips and save at least $100 a week:
Buy a Water Filter
Purchasing bottled water hurts not only the environment but your wallet as well. According to the Learning Channel, a family of 4 can save up to $55 a week by making the switch from bottled water to water filters.
Take Advantage of Power Strips
You can cut down on your utility bill by unplugging your appliances when you aren't using them. Make the unplugging process easy by purchasing a power strip for your appliances.
Make Shopping and To-Do Lists
Make a list of everything you need before you shop. Make sure your list only consists of needs, not wants. Then, be sure to stick to your list. You can also use to-do lists to save a ton of time. By grouping together all your errands, you can get everything done in one trip, saving you valuable minutes and gas money.
Stay Away From "Foreign" ATMs
We've all done it: using our bank card at another bank's ATM to withdraw some extra cash. But every time we do this, we get hit with a wonderful little fee. Now, there is no reason not to use ATMs owned by your bank when apps like ATM Hunter can help you find the right ATM in seconds.
Buy Generic
You can save 30 to 60 percent by purchasing generic brand food and drugs. According to a study by Consumer Reports, 80% of the time trained tasters cannot tell the difference between store and national brand food products.
Cancel Your Landline
In an age when everyone has a cell phone, landlines are not necessary. You can also utilize free computer-to-computer calling via Skype, which beats using the phone because if you have a webcam, you can see the person you are talking to.
Utilize the Library
Instead of hitting up Netflix or Blockbuster every time you want to watch a movie, head to your local library for your movie rental needs. Or, if there is a new book you want to read, borrow it from your library instead of purchasing it at the bookstore.
Bye-Bye Gym Membership
Most exercises you do at the gym can be modified and done at home. Better yet, the most beneficial exercises out there are walking, pushups, and squats, all of which you don't need a gym to do.
Take Your Lunch to Work
Instead of going to the deli down the street for lunch, brown bag your lunch. You can make a week's worth of sandwiches on your own for the price you would pay for one or two sandwiches at the deli.
Carpool
With gas prices on the upswing, filling up the tank can be a huge money drain. Organize a carpool with your coworkers to save money. If you can't find any coworkers to carpool with, check out Zimride to find a carpool buddy.
Walk or Bike
To find out how walkable your city is, check out Walk Score. Ditching your car completely will save you a ton of money not just on gas but also on wear and tear on your car.
Avoid Convenience
Wash your own car, cut your own fruits and veggies, and clean your own house. If you don't think you have enough time to wash your own car, remember that there are 24 hours in the day. Even if you spent 10 hours at work, 8 hours sleeping, 2 hours cooking, and 2 hours hanging out with the family, you would still have 2 hours to wash your car or clean your house.
Pay Bills On Time
Most banks offer free electronic bill payment services that will automatically pay your monthly bills. It only takes a few minutes to set up. Do it today and never pay a late fee again.
Make Your Own Pet Toys
Try to steer clear of Petco and Petsmart when it comes to your pet's toys. It is easy to make pet toys on your own for a fraction of the price you would pay for them at a pet store. Beautify Yourself Instead of hitting up expensive salons, try trimming your own hair or getting a value haircut from a beauty school.
Pre-Game
If you are going out for a night on the town, pre-game before you leave. This way you will spend less money on expensive drinks at your favorite hot spot. You can spend up to $5 for a beer at the bar or find a 12 pack that's on sale and pay just over $1 per beer.
Cancel Cable
With the ability to watch TV shows online for free, the need for cable is virtually nonexistent. Yes, it may be nice to see a show as soon as it airs, but it's much nicer to have extra money in your bank accounts. Try using Hulu for your TV viewing needs.
Make Your Own Food
While it may not be as convenient as going to the drive through or having food delivered to your house, making your own food can save you a ton of money.
Stay In
Sure, it may be mellower than going out, but cooking your favorite meal, making your favorite drink, and watching a DVD can be just as fun as a night on the town.
Make Your Own Coffee
This is a tried and true money saving technique that we have all heard, but it bears repeating. Make your morning cup of coffee at home instead of paying way more than you should for a cup of Joe at your favorite coffee shop.
Avoid Bank Fees
Setting up direct deposit for a certain amount can often eliminate fees associated with keeping an account open. You can avoid paying overdraft fees by linking your checking and savings accounts, or by signing up for fee e-mail alerts that tell you when your account is getting close to the limit.
Use Coupons
A tried and true money saving method: before you head to the grocery store, check the ads to see if there are any coupons for the items you need. Or, go online and check out CouponMom or The Daily Deals Blog to find the latest discounts.
Ashley Jacobs is the college correspondent for personal finance blog Wise Bread. Follow her latest tweets on @CollegeCents.
Buy a Water Filter
Purchasing bottled water hurts not only the environment but your wallet as well. According to the Learning Channel, a family of 4 can save up to $55 a week by making the switch from bottled water to water filters.
Take Advantage of Power Strips
You can cut down on your utility bill by unplugging your appliances when you aren't using them. Make the unplugging process easy by purchasing a power strip for your appliances.
Make Shopping and To-Do Lists
Make a list of everything you need before you shop. Make sure your list only consists of needs, not wants. Then, be sure to stick to your list. You can also use to-do lists to save a ton of time. By grouping together all your errands, you can get everything done in one trip, saving you valuable minutes and gas money.
Stay Away From "Foreign" ATMs
We've all done it: using our bank card at another bank's ATM to withdraw some extra cash. But every time we do this, we get hit with a wonderful little fee. Now, there is no reason not to use ATMs owned by your bank when apps like ATM Hunter can help you find the right ATM in seconds.
Buy Generic
You can save 30 to 60 percent by purchasing generic brand food and drugs. According to a study by Consumer Reports, 80% of the time trained tasters cannot tell the difference between store and national brand food products.
Cancel Your Landline
In an age when everyone has a cell phone, landlines are not necessary. You can also utilize free computer-to-computer calling via Skype, which beats using the phone because if you have a webcam, you can see the person you are talking to.
Utilize the Library
Instead of hitting up Netflix or Blockbuster every time you want to watch a movie, head to your local library for your movie rental needs. Or, if there is a new book you want to read, borrow it from your library instead of purchasing it at the bookstore.
Bye-Bye Gym Membership
Most exercises you do at the gym can be modified and done at home. Better yet, the most beneficial exercises out there are walking, pushups, and squats, all of which you don't need a gym to do.
Take Your Lunch to Work
Instead of going to the deli down the street for lunch, brown bag your lunch. You can make a week's worth of sandwiches on your own for the price you would pay for one or two sandwiches at the deli.
Carpool
With gas prices on the upswing, filling up the tank can be a huge money drain. Organize a carpool with your coworkers to save money. If you can't find any coworkers to carpool with, check out Zimride to find a carpool buddy.
Walk or Bike
To find out how walkable your city is, check out Walk Score. Ditching your car completely will save you a ton of money not just on gas but also on wear and tear on your car.
Avoid Convenience
Wash your own car, cut your own fruits and veggies, and clean your own house. If you don't think you have enough time to wash your own car, remember that there are 24 hours in the day. Even if you spent 10 hours at work, 8 hours sleeping, 2 hours cooking, and 2 hours hanging out with the family, you would still have 2 hours to wash your car or clean your house.
Pay Bills On Time
Most banks offer free electronic bill payment services that will automatically pay your monthly bills. It only takes a few minutes to set up. Do it today and never pay a late fee again.
Make Your Own Pet Toys
Try to steer clear of Petco and Petsmart when it comes to your pet's toys. It is easy to make pet toys on your own for a fraction of the price you would pay for them at a pet store. Beautify Yourself Instead of hitting up expensive salons, try trimming your own hair or getting a value haircut from a beauty school.
Pre-Game
If you are going out for a night on the town, pre-game before you leave. This way you will spend less money on expensive drinks at your favorite hot spot. You can spend up to $5 for a beer at the bar or find a 12 pack that's on sale and pay just over $1 per beer.
Cancel Cable
With the ability to watch TV shows online for free, the need for cable is virtually nonexistent. Yes, it may be nice to see a show as soon as it airs, but it's much nicer to have extra money in your bank accounts. Try using Hulu for your TV viewing needs.
Make Your Own Food
While it may not be as convenient as going to the drive through or having food delivered to your house, making your own food can save you a ton of money.
Stay In
Sure, it may be mellower than going out, but cooking your favorite meal, making your favorite drink, and watching a DVD can be just as fun as a night on the town.
Make Your Own Coffee
This is a tried and true money saving technique that we have all heard, but it bears repeating. Make your morning cup of coffee at home instead of paying way more than you should for a cup of Joe at your favorite coffee shop.
Avoid Bank Fees
Setting up direct deposit for a certain amount can often eliminate fees associated with keeping an account open. You can avoid paying overdraft fees by linking your checking and savings accounts, or by signing up for fee e-mail alerts that tell you when your account is getting close to the limit.
Use Coupons
A tried and true money saving method: before you head to the grocery store, check the ads to see if there are any coupons for the items you need. Or, go online and check out CouponMom or The Daily Deals Blog to find the latest discounts.
Ashley Jacobs is the college correspondent for personal finance blog Wise Bread. Follow her latest tweets on @CollegeCents.
Monday, May 2, 2011
16 Ways to Make Yourself Unfireable
Be the First to Arrive and the Last to Leave
Showing up to work first and leaving last shows your boss that you are dedicated to your job. Make sure to leave your office door open so your boss can see you putting in the long hours.
Cut the Company's Costs
Take a look at where your company is spending its money. Then see if there are ways to reduce those costs. Your boss won't fire someone who is improving the company's bottom line.
Make the Company More Money
Even better, figure out ways to increase revenue. Find a new client or develop new products and services for your company to sell. (See also: How to Make an Extra Income.)
Just Say No to Drama
Be sure to avoid drama whenever possible. If someone starts gossiping to you, simply excuse yourself by saying "I'm so sorry, I really have to finish this project. Maybe we can catch up later after work?" This way you can avoid the drama without being too rude to the gossiper.
Be Aware
Even though you should avoid drama, try to stay informed about what other people are saying about you. If you know what is being said about you, you can figure out how to improve your relationships with coworkers or know if you need to step it up. By being aware of how you are perceived, you can always be on top of your game.
Learn New Skills
Take advantage of any training, certification, or back-to-school programs offered by your employer. The more skills you develop the more valuable you become to your employer. If your company doesn't offer any programs, buy some new books and start training yourself.
Give Progress Reports
Make sure your boss knows how hard you are working and what you are working on by giving him or her progress reports on a weekly basis. If your boss has evidence that you are pulling your weight, he or she will be less likely to fire you.
Make Everybody Love You
Be friendly with everyone. Never say anything negative, mean, or condescending. No matter how much you hate your job, always show up with a smile on your face. (See also: How to Thrive in a Job You Hate).
Show You Are a Leader
If you are on a new project and no one seems to be taking charge, step up and be a leader. They can't fire you if you're the point person of an important ongoing project.
Show You Are a Team Player
You have to be able to work well with your coworkers. Listen to their suggestions. Adapt to each person's idiosyncrasies. Treat each coworker with respect and courtesy. If you can't be a member of a team, chances are you won't survive the next layoff.
Get Personal
Make sure your boss knows about your family by keeping pictures of them on your desk or bringing them to company parties when appropriate. Also, show an interest in your boss's family in return. Employers are less likely to fire someone they have a personal relationship with. Just be wary of over sharing. Keep personal conversations light and upbeat.
Don't Take Unfair Advantage of Sick Days
Only take a sick or personal day when you absolutely need to do so. Be honest with yourself--are you really sick or just sick of going into work? Whenever you're feeling lazy, just remember the countless unemployed people who would love to have your job.
Take on Responsibilities that No One Else Wants to Do
Chances are there are responsibilities at your company that no one wants to do because, well, they are tedious and boring. Bite the bullet and offer to take on the task that no one wants to do. Your boss (and coworkers) will love you for it.
[6 Questions to Ask Yourself Before Accepting a Job]
Positivity Goes a Long Way
By remaining positive during tough times, you can help create a more optimistic work environment. Positive people are always the last ones to get fired.
Don't Abuse Internet Privileges
It is very easy for companies to track what you do on your computer while in the office, especially online activities. Stay off of Facebook, don't check your personal emails, don't surf the web, and don't use your company email address to send personal emails.
Be the Social Chair
Who would want to fire the life of the party? Probably no one, so make yourself the social chair at your company. Come up with fun events that your coworkers actually want to participate in. You will boost company morale by making sure everyone is having a good time and make your boss think twice about handing you a pink slip.
Ashley Jacobs is the college correspondent for personal finance blog Wise Bread. Follow her latest tweets on @CollegeCents.
Showing up to work first and leaving last shows your boss that you are dedicated to your job. Make sure to leave your office door open so your boss can see you putting in the long hours.
Cut the Company's Costs
Take a look at where your company is spending its money. Then see if there are ways to reduce those costs. Your boss won't fire someone who is improving the company's bottom line.
Make the Company More Money
Even better, figure out ways to increase revenue. Find a new client or develop new products and services for your company to sell. (See also: How to Make an Extra Income.)
Just Say No to Drama
Be sure to avoid drama whenever possible. If someone starts gossiping to you, simply excuse yourself by saying "I'm so sorry, I really have to finish this project. Maybe we can catch up later after work?" This way you can avoid the drama without being too rude to the gossiper.
Be Aware
Even though you should avoid drama, try to stay informed about what other people are saying about you. If you know what is being said about you, you can figure out how to improve your relationships with coworkers or know if you need to step it up. By being aware of how you are perceived, you can always be on top of your game.
Learn New Skills
Take advantage of any training, certification, or back-to-school programs offered by your employer. The more skills you develop the more valuable you become to your employer. If your company doesn't offer any programs, buy some new books and start training yourself.
Give Progress Reports
Make sure your boss knows how hard you are working and what you are working on by giving him or her progress reports on a weekly basis. If your boss has evidence that you are pulling your weight, he or she will be less likely to fire you.
Make Everybody Love You
Be friendly with everyone. Never say anything negative, mean, or condescending. No matter how much you hate your job, always show up with a smile on your face. (See also: How to Thrive in a Job You Hate).
Show You Are a Leader
If you are on a new project and no one seems to be taking charge, step up and be a leader. They can't fire you if you're the point person of an important ongoing project.
Show You Are a Team Player
You have to be able to work well with your coworkers. Listen to their suggestions. Adapt to each person's idiosyncrasies. Treat each coworker with respect and courtesy. If you can't be a member of a team, chances are you won't survive the next layoff.
Get Personal
Make sure your boss knows about your family by keeping pictures of them on your desk or bringing them to company parties when appropriate. Also, show an interest in your boss's family in return. Employers are less likely to fire someone they have a personal relationship with. Just be wary of over sharing. Keep personal conversations light and upbeat.
Don't Take Unfair Advantage of Sick Days
Only take a sick or personal day when you absolutely need to do so. Be honest with yourself--are you really sick or just sick of going into work? Whenever you're feeling lazy, just remember the countless unemployed people who would love to have your job.
Take on Responsibilities that No One Else Wants to Do
Chances are there are responsibilities at your company that no one wants to do because, well, they are tedious and boring. Bite the bullet and offer to take on the task that no one wants to do. Your boss (and coworkers) will love you for it.
[6 Questions to Ask Yourself Before Accepting a Job]
Positivity Goes a Long Way
By remaining positive during tough times, you can help create a more optimistic work environment. Positive people are always the last ones to get fired.
Don't Abuse Internet Privileges
It is very easy for companies to track what you do on your computer while in the office, especially online activities. Stay off of Facebook, don't check your personal emails, don't surf the web, and don't use your company email address to send personal emails.
Be the Social Chair
Who would want to fire the life of the party? Probably no one, so make yourself the social chair at your company. Come up with fun events that your coworkers actually want to participate in. You will boost company morale by making sure everyone is having a good time and make your boss think twice about handing you a pink slip.
Ashley Jacobs is the college correspondent for personal finance blog Wise Bread. Follow her latest tweets on @CollegeCents.
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