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Michael Harr
Co-Founder of TodayForward - the Simple Way to Plan, Manage, and Organize Your Money
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@Rob - You make a very good point in that to 'rise up' there is an interdependent aspect of needing some help beyond the simple tax credits for college tuition. In order to take advantage of these credits, you have to continue to put food on the table. Often, the option to quit work and focus on a degree simply isn't available. This can lead to a cycle that is difficult to break as the working poor must continue to provide financially - sometimes working multiple jobs at all hours of the day - precluding them from moving up the socio-economic ladder. While local programs are available to assist (varying widely across the country), there is little doubt that breaking the cycle is largely up to the individual. I think of the movie from a few years back, The Pursuit of Happyness, and what that singular success story looked like. It's doubt about it. As for providing the support network that is needed to facilitate these kinds of changes, the government has been told on numerous occasions to stay out of this conversation. The result is that it falls to religious organizations, the United Way, and other groups to try to fill the gaps with very limited resources. I have no doubt that it CAN be done, just as I have little doubt that it is a MONUMENTAL undertaking when support networks aren't in place. Bottom line here is that while we provide some tax incentives, we do not as a nation provide for a system of social or economic justice the way that we could and should.
@Rimaye - All of these are good points to discuss. However, the cost savings is highly suspect and depends on where you get your numbers and which rate assumptions are used. I would go back to the experiment in Massachusetts and argue that while projections are nice, they never match reality. I am indifferent on healthcare delivery, as it doesn't matter if it is the government collecting money and issuing checks or an insurance company. What does matter to me is that everyone has access to care when they need it and that the level of care be satisfactory (not cutting edge, mind you). As for the Republicans bemoaning the Medicare cuts, the motivation is clear - votes from people that vote - and yes, I would agree that it is at least ironic and diametrically opposed to their general stance. The emergency room vs. PCP is something I recognize, but left out of the post. I don't think I'll be seeing my PCP anytime soon, as the Take Care Clinic is now my first stop at a fraction of the cost to me and my insurer. With all that said, the bill did a horrific job in reducing core healthcare inflation. By adding more insureds and shuffling costs, there was little in the way of meaningful cost reduction. Where is a mandate to centralize medical records? Where were the tort reforms that can reduce malpractice premiums while still delivering justice? When will we see limits on how much common procedures cost or at least post them where consumers can see them? Can we make the process of billing more salient so patients can participate in cost management? Also, to see the inflation rates of healthcare relative to general inflation, go here: One more note, even if you were uninsured before the bill passed, now you 'should' be able to get it. The only problem is that it costs too much. That's what needs to be fixed. Everyone now has the 'potential' to obtain health insurance, but because of the cost barrier, we're still going to have a large number of uninsureds. Regardless of what you or I think about the bill, there is a ton of work left to do. I'd like to see them doing something about it, but alas, the agenda is full.
@dbellis - Certainly some of these folks were hurt by economic conditions, but the fact remains that where significant differences in tax rates between states exist, residents can and do choose to exit higher tax environments. This is why large numbers of highly paid professional athletes are 'domiciled' in states like Florida where no state income tax exists. In order for a significant tax hike in a single state to be effective, it must target those with more limited means or be done in conjunction with a national trend of other states increasing tax rates.
@dbellis - This post and the WSJ article were dealing strictly with the fixed income portion of the portfolio and assumes that investors will continue to carry an appropriate level of equities. You are correct that stocks have, do, and will continue to outperform their fixed income counterparts over the long run. However, in balancing a portfolio, one needs not just any old fixed income holdings, but should be more selective in light of potential inflation. One other note, during periods of substantial inflation, stocks do not significantly beat inflation. Most of the real returns from stocks come from low or falling inflationary periods. When inflation is rising fast or is already at a high rate, there aren't many assets that produce high real returns.
Dear Five Cent Nickel Readers, Thank you for stopping by Wealth...Uncomplicated where from time to time, I post articles designed to help you move forward with your finances. Since the post that brought you here was about how to get out of debt, the following is a bigger picture view that applies the financial planning process to the elimination of debt. It is through this process that results are achieved, for personal finance has, is, and always will be a journey rather than a destination. Also, feel free to bump around the site and if you like what you see,... Continue reading
Posted Apr 7, 2010 at Wealth...Uncomplicated
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Mar 15, 2010
We begin the story of Jeff and Jill Crocodile by gathering information to better understand where this couple is in their financial life. Among our goals in gathering data is to identify any opportunities or threats as well as better quantify short and long-term goals. In the Crocodile's case, we have a relatively well off couple that has the resources to become very wealthy as long as they can properly maneuver the financial landscape between now and retirement. The Basics First and foremost, let's get to know Jeff and Jill a little better. He is 30 years old and she... Continue reading
Posted Jan 29, 2010 at Wealth...Uncomplicated
Last year I laid out my prognostications for 2009 and all but half of one was correct. Of course, this past year was a relatively easy one to see directionally what would happen working under a single assumption that the sky would not fall forever. The result is that 6.5 out the 7 prognostications were on target. What did I miss? Read on. The original text is listed and the follow up commentary is italicized. Economy - the economy will begin its recovery in the latter part of 2009 with this recession coming to an end before March 31, 2010.... Continue reading
Posted Jan 4, 2010 at Wealth...Uncomplicated
This year, I'm happy to announce that Wealth...Uncomplicated will be changing formats ever so slightly and focusing more on content that is centered on the principles and processes that lead to a more secure financial life. Throughout 2010, you will find posts designed to illuminate the guiding principles of sound personal financial planning and management as well as some very practical processes to help you stay on target. Of course, the big bonus is that once you have the right processes in place, it become incredibly simple to accumulate wealth...systematically. Case Studies While the blogosphere and financial media is littered... Continue reading
Posted Dec 31, 2009 at Wealth...Uncomplicated
@George & Rob - I realized I'd been taken to the cleaners at the cash register. The Best Buy associate said, "These cables are really expensive for customers. As an employee, I get them for $8" For anyone familiar with the Jim Rome Show, that was a BOHICA moment.
The Federal Reserve is many things to many people. For some, it's an abomination, but for most of us (of the saner variety) it provides a much needed function in shaping our economy. The Fed has a dual mission of keeping a lid on inflation and encouraging healthy economic growth. The difficulty is that in times like today, it's like walking a tight rope about as thick and strong as dental floss.On the one hand, the Fed needs to keep money loose to move the economy out of recession and back to healthy growth numbers. On the other hand, if... Continue reading
Posted Dec 20, 2009 at Wealth...Uncomplicated
Years ago, I heard something that really made an impression on me. It was, "the quality of your life is largely determined by what you take out of it, rather than what you put into it." There's a great deal of truth in these words, and I'd wager that it's the single best method to a great life. As an American, we're brought up to continually add things to our lives - a big house, a nice car, stylish clothes, etc. - to make it better. Unfortunately, many of us have added far too much and it gets to the... Continue reading
Posted Dec 16, 2009 at Wealth...Uncomplicated
Below is a quick and dirty real estate investment analysis spreadsheet that I put together for a reader at FiveCentNickel. While the spreadsheet is somewhat limited in scope compared to more sophisticated, professional level analysis tools, it does give some ballpark figures for present value and future value cash flows and equity as well as the annual rate of return while ignoring taxes and a few other data. Using a spreadsheet like this is important for real estate investors because with so many moving parts, the real value of a property and it's annual rate of return can become clouded.... Continue reading
Posted Dec 15, 2009 at Wealth...Uncomplicated
Most of the world is experiencing tough times just like us, but not everyone is handling things the same way. Take the Irish for example. Instead of spending massive amounts of cash, their finance minister is doing everything he can to get the economy back to growth and reducing the budget deficit. Us, on the other hand, we're spending big bucks in the hopes that a couple of trillion dollars will bring us out of recession faster and that productivity gains (the long term antidote to all economic problems) will sustain us. There's merit to both approaches, and I would... Continue reading
Posted Dec 13, 2009 at Wealth...Uncomplicated
So you've probably heard or it or maybe even seen it in action on Oprah, but how can Skype be used to increase productivity? As communications technologies go, it's not the end all, be all, but it certainly has some very attractive features that can instantly increase your productivity. Chief among its benefits is the ability to conduct voice and video calls without your eyes or hands leaving your computer. It might seem like a small thing to not have to grab the phone and turn your attention away from your work for such a minimal amount of time, but... Continue reading
Posted Dec 9, 2009 at Wealth...Uncomplicated
@Lulu - Little old lady cars are the best! One of my business partners just did the same thing and got a great deal on a very gently used Honda Accord. He'll be able to get another seven to ten years out of it with regular repairs and maintenance. Also, good luck crushing the rest of your debt. Once that's out of the way, enjoy putting your money to work in greener pastures.
Somewhat amazingly to me, there are millions of people going about preparing their budgets and millions more complaining that there's too much month left at the end of the money. There are fights between spouses and couples about buying this or that; disputes arise among roommates about whom should be paying what; and there is generally a whole lot of bickering, fighting, and foolishness surrounding making and living by a budget. All the while, most are trying to solve this problem by 'spitting on a fire'. It's NOT the Small Stuff When it comes to budgeting, a $5 coffee won't... Continue reading
Posted Dec 6, 2009 at Wealth...Uncomplicated
With the explosion in ETFs over the last decade and the continued reduction in trading costs over that time, it's important to know whether you should own mutual funds or ETFs. To help you decide between them, there are four key criteria to examine. #1: Are You an Active Trader? For active traders, ETFs are 100% the way to go. Of course, you should take a harder look at your investment strategy as active traders typically lag well behind the markets and they get to pay higher transaction costs. NOTE: 93% of millionaires surveyed in the book, The Millionaire Next... Continue reading
Posted Dec 2, 2009 at Wealth...Uncomplicated
Sometimes building wealth is as simple as stacking the deck in your favor. There are few better places to do this than in your wallet. Indeed, a wallet and its contents tell a good bit about you and how well you manage your money. Some wallets are bursting with financial gluttony, while others are lean and mean, so what kind of wallet is built for financial success? Top 10 Wallet Stuffers Driver's License - if you're driving, you gotta have a license...period. ICE Contact Info - if you have a serious accident, an In Case of Emergency (ICE) contact card... Continue reading
Posted Nov 28, 2009 at Wealth...Uncomplicated
With millions of Americans out of work, COBRA is an acronym that all too many are familiar with. While the cost of extending coverage is exorbitant, the federal government does allow for a subsidy to help families with keeping these costs within the realm of reason. To aid individuals and families that are now using COBRA health insurance, has created a widget to help in calculating when your COBRA subsidy will end. This calculator is provided below: Get the When does your COBRA Subsidy end? widget and many other great free widgets at Widgetbox! Not seeing a widget? (More... Continue reading
Posted Nov 25, 2009 at Wealth...Uncomplicated
@Jane - The challenges facing new JDs is magnified as a result of (1) higher debt service to student loans and (2) higher age upon graduation. This places additional emphasis on being financially savvy. Ive met attorneys on both sides of the spectrum - the group that makes poor decisions and those that make smart decisions. Ultimately, even if youre dealt a slightly less advantageous hand, knowing how to play the game of personal finance will still put you miles ahead. By the way, depending upon which area of the law you specialize, there will be a great many opportunities that will come your way. Many of them will be garbage, but developing a keen eye for bona fide opportunities will serve you well over the course of your career. Good luck with your studies and based on what I read on your blog, it looks like youre going to do quite well for yourself. Thanks!
A long time ago, I listened to a Brian Tracy audio program about self improvement. One of the main points (possibly the only point) that I remembered was if you invest just 3% of your annual income into expanding your knowledge and skills through education, you would become an expert in your field in very short order. Of course, becoming an expert also means you can expect a pay increase to follow. The last time I looked at the median household income, it was just over $50,000. With the Great Recession, I'm sure it's a little lower now. But $50k... Continue reading
Posted Nov 7, 2009 at Wealth...Uncomplicated
With the debate on healthcare reform continuing and finally moving forward, it's important to remember that doing nothing is NOT an option. Based on the information in a report from the National Coalition on Health Care, it is painfully apparent that reform is desperately needed. The simple fact is that whether or not we have a public option, cover everyone, or keep the system as is, we are already on an unsustainable pace when it comes to the costs of healthcare. Report Highlights Here are some quick statistics from the report that are worth reviewing every time you think you... Continue reading
Posted Oct 28, 2009 at Wealth...Uncomplicated
Last year, we almost pulled the trigger on an individual health plan for our family because my wife's employer's options weren't great. So we went on and priced out a plan on to see what was available to us on an individual basis. To our surprise, there were some very competitive plans available, but we didn't start shopping early enough. This weekend, we will begin our individual plan shopping prior to getting her open enrollment materials that will be coming in a couple of weeks. Essentially, we want to have the plan picked out this weekend that we'll compare... Continue reading
Posted Oct 21, 2009 at Wealth...Uncomplicated
In this article from The Wall Street Journal on October 14th, Larry Light does a very good job of explaining where to take cover in the event that bond prices fall as a result of inflation. The problem with inflation is that when it starts to get higher than the Fed likes, they will typically raise interest rates as high and as fast as they deem appropriate to choke off inflation. With the money supply still incredibly loose and government spending on the greatest bender in half a century, this is a timely article. Interest Rates Up, Bond Prices Down... Continue reading
Posted Oct 20, 2009 at Wealth...Uncomplicated