Category: Personal Finance

The number one question when it comes to personal finance as well as investing your money is, how can I get more bang for my buck?

In other words, how can I increase my return on investment?

Today I wanted to take a closer look at a few ways in which you may well be able to increase the return you are getting for the money you are investing.

1. Keep Your Fees In Check.

You might think it is strange that I put something like this at number one on the list, but keeping fees in check is extremely important to your long-term success.

Things such as inactivity fees, high trading fees, or sales loads on mutual funds can absolutely eat up your money.

2. Invest in Dividend Payers.

I am a huge believer in the power of dividends. Do you realize that dividends provide half of your overall gains in investment over the long run?

Some blue-chip stocks are now paying dividend yields of 3%-5%, which is far more than you can come close to getting in a money market account in today’s environment.

3. Diversify Your Investments.

While some like to get cute and find a certain sector or industry that is hot and dump all their money there; this is a very risky business that you don’t want to get into.

Get into many different sectors, and even try investing in things such as gold or oil as a portion of your portfolio.

4. Reduce Turnover.

It can be difficult to remember when you want to pull the trigger constantly, but it costs money to trade stocks or mutual funds.

Simply buying and selling after a few days each time is going to really eat away at your account balance and force you to make moves that really aren’t prudent for the individual investor.

5. Do Your Homework.

This one may seem silly, but investing is not easy. This is not a game.

When it comes to investing your money, treat it just like you do your day job. Keep up with the stocks in your portfolio and know what is going on.

Knowledge is power when it comes to investing and personal finance.

These five steps should help get you on your way to earning a better return on your investment.

Hold yourself accountable for the decisions you make when it comes to personal finance and investing! Your financial future depends on your plan, so make sure it is a solid one.…

If you are the parent of a college-age student then you know that there are many things that you are supposed to teach or remind him or her about.

One of the things that often gets pushed to the side is the issue of personal finance.

It is important that you teach your child about personal finance issues such as how to properly use credit, how to pay back loans, and of course how to get and maintain a job.

It is understandable that personal finance may not be the most exciting topic to have a discussion about, but it may be one of the most important ones.

The reason why personal finance is so important to this age group is that these are the people that are most likely to be targeted by dangerous types of loans. They are the age group most likely to start getting themselves into personal finance issues. Mainly the issue is large amounts of debt, but there are other problems that could arise as well.

You are going to have to deal with a somewhat tricky balance. You want to respect that your child is now legally an adult and able to make their own decisions. At the same time, however, you do not want them to make a personal finance mistake that is going to haunt them for some time to come.

The best plan usually is to make sure that they understand that you respect their decisions, but you just want to give some input on these personal finance issues. Most college-age students are going to recognize that you are really trying to offer them help, and they will at least listen.

The final thing to remember is that you may not always get the results that you want from your child. After all, they are legally adults now and they will make their decisions. Even matters as important as personal finance will be left up to them. You as the parent have to learn to accept this and be okay with the concept.…

I was fortunate enough to grow up in a middle-income family, living a middle-income lifestyle, learning the same financial mistakes that most other middle-class kids learn growing up. There was very little discussion of personal finances except for the one piece of advice that if I put away $100/month starting when I was 18, I would be a millionaire when I retired. Although it sounded like an astronomical sum of money at the time, I never took that advice and it turns out the numbers don’t quite work out anyway.

I spent the first 35 years of my life learning two things: no matter how much space you have in your house/apartment, you will fill it with stuff and no matter how much money you make, you will spend all of it (and sometimes a little more).

I never had much money in my teenage years but whatever I made I spent on stuff. I spent my college years living off the money I earned working part-time during the school year and full time in the summer (I didn’t receive much financial education when I was young but I did learn the value of hard work). I got some help from my parents as well and the balance was made up with a few student loans. I finished school with only about $15,000 in loans so I had some money sense back then.

And Then There Were Two

When I got married, my wife and I spent the first 5 years living under the burden of servicing a $10,000 credit line that we used to pay for the wedding. My wife had (and still has) a good paying job in a profession that is very stable so she was the breadwinner and since our expenses were low we got by just fine. We accepted the debt we were carrying to be a normal part of life and just continued on spending a little more than we made.

Fast forward a few years… As our incomes grew and I got a better job, we continued spending more and more. We bought a house and I renovated most of it myself. We took vacations to Hawaii and Napa Valley. We were making about $140,000 combined and slowly falling deeper and deeper into debt. None of it was credit card debt, I could never stomach the interest rates; our debt drug of choice was the credit line and when we finally came to our senses in September of 2009, we were almost $28,000 in debt.

It wasn’t like I didn’t know we were in that much debt. I have always been interested in personal finance, budgeting and investing so I always knew the status of our finances but I never cared. We were young and we had plenty of time to pay our debts. We had managed to save a small nest egg in RRSP’s (very similar to a 401K in the US), and the equity in our house was over $100,000 (the real estate market on the west coast of Canada was virtually unaffected by the economic downturn of 2008/2009). We felt pretty good about our situation and our growing debt was considered a necessary evil to continue to buy the things we wanted.

Time To Change

In July of 2009, I started listening to the Dave Ramsey show podcast and it changed my view of our personal finances and the role that debt plays in our lives. Our growing debt was no longer ok, it was unacceptable, and on September 1st, 2009 my wife and I pledged we would get rid of our debt. We reeled in our spending and paid off $28,000 by May 21st of 2010. In nine months, we paid off all our debt and it felt great; it felt like a weight was lifted off our shoulders.

And Then There Were Three (Four Counting Murphy)

Since then we’ve had a baby and my wife has resumed her career working part-time. We had an emergency fund built up but a bigger vehicle (older and used of course) to accommodate our growing family, some sloppy spending, and an emergency roof replacement on our home has eaten up the emergency fund plus a little more. We are once again in a small amount of debt (something I swore would never happen again) but we are confident we will have things under control again by Christmas.…