Money Magazine's "25 Rules to Grow Rich By"

article: http://money.cnn.com/magazines/moneymag/moneymag_archive/2006/11/01/8392426/index.htm

Home
1 For return on investment, the best home renovation is to upgrade an old bathroom. Kitchens come in second.
2 It's worth refinancing your mortgage when you can cut your interest rate by at least one point.
3 Spend no more than 2½ times your income on a home. For a down payment, it's best to come up with at least 20%.
4 Your total housing payments should not exceed 28% of your gross income. Total debt payments should come in under 36%.
5 Never hire a roofer, driveway paver or chimney sweep who is going door to door.
Invest
6 All else being equal, the best place to invest is a 401(k). Once you've earned the full company match, max out a Roth IRA. Still have money to invest? Put more in your 401(k) or a traditional IRA.
7 To figure out what percentage of your money should be in stocks, subtract your age from 120.
8 Invest no more than 10% of your portfolio in your company stock--or any single company's stock, for that matter.
9 The most you should pay in annual fees for a mutual fund is 1% for a large-company stock fund, 1.3% for any other type of stock fund and 0.6% for a U.S. bond fund.
10 Aim to build a retirement nest egg that is 25 times the annual investment income you need. So if you want $40,000 a year to supplement Social Security and a pension, you must save $1 million.
11 If you don't understand how an investment works, don't buy it.
Plan
12 If you're not saving 10% of your salary, you aren't saving enough.
13 Keep three months' worth of living expenses in a bank savings account or a money-market fund for emergencies. If you have kids or rely on one income, make it six months'.
14 Aim to accumulate enough money to pay for a third of your kids' college costs. You can borrow the rest or cover it from your income.
15 You need enough life insurance to replace at least five years of your salary--as much as 10 years if you have several young children or significant debts.
16 When you buy insurance, choose the highest deductible you can afford. It's the easiest way to lower your premium.
17 The best credit card is a no-fee rewards card that you pay in full every month. But if you carry a balance, high interest rates will wipe out the benefits.
18 The best way to improve your credit score is to pay bills on time and to borrow no more than 30% of your available credit.
19 Anyone who calls or e-mails you asking for your Social Security number or information about your bank or credit-card account is a scam artist.
Spend
20 The best way to save money on a car is to buy a late-model used car and drive it until it's junk. A car loses 30% of its value in the first year.
21 Lease a new car or truck only if you plan to replace it within two or three years.
22 Resist the urge to buy the latest computer or other gadget as soon as it comes out. Wait three months and the price will be lower.
23 Buy airline tickets early because the cheapest fares are snapped up first. Most seats go on sale 11 months in advance.
24 Don't redeem frequent-flier miles unless you can get more than a dollar's worth of air fare or other stuff for every 100 miles you spend.
25 When you shop for electronics, don't pay for an extended warranty. One exception: It's a laptop and the warranty is from the manufacturer.

Family of 9 Lives Debt Free on $35K per Year

I just read the article on abcnews.com site (20/20) about America's Cheapest Family. They live on $35,000 per year and there are 2 adults and 7 kids. The most amazing thing is that that they live DEBT FREE. There was a video on yahoo.com this morning as well. As most personal finance blogs seem to re-iterate, it's the small things that add up. This family goes to the store once a month and they literally save hundreds of dollars each trip using coupons. Over the course of a year, that's thousands of dollars. Thousands of dollars adds up to a huge percentage when the total salary is only $35K! They even wrote a book called America's Cheapest Family Gets You Right on the Money: Your Guide to Living Better, Spending Less, and Cashing in on Your Dreams

Get Rich Slowly Book Review

...just read the book review of "Debt is Slavery" from the blog Get Rich Slowly and I must say it was a great review because he summarized all the key points and explained each very well. I'm going to list each point but honestly, to appreciate the post, please read it: http://www.getrichslowly.org/blog/2007/08/07/book-review-debt-is-slavery/

Get the book here:


Here are the points:

1. Debt is slavery.
2. Money is time. (see the book Your Money or Your Life)

3. Possessions are a prison.
4. Don’t let advertising brainwash you.
5. Money buys freedom.
6. Don’t sell your soul for a salary.
7. Own.
8. Spend less than you earn.
9. Save 50% of your salary.
10. Control your money.
11. Start doing this now!

6 Ways to Kill Your Savings (DON'T DO THESE)

1. Don't have a budget - If you squander every penny you get, you'll never be ready for the unexpected or retirement. Plan your spending that is within your means. And by all means, pay yourself first (i.e., save some money).

2. Indulge in your whims - If you like it, buy it, right? Wrong! There is no reason to buy things just because they seem nice at the time. Think about the long term uses of the item or the long term implications of spending $250 on a watch "you should have to have". Even spending $30 that you don't need to spend could go a long way to other things like paying down your credit card or adding principle to your mortgage payment.

3. Splurge on gifts - We all know that true love is demonstrated by how many gifts or how much you spend on your children, siblings, family, friends, etc... Yeah, I know: ridiculous. Unfortunately, some people fall into that trap each and every holiday season and end up spending way more than they should and have debt left over until the summer. It's just a bad move. Value is not always about the money! Find that perfect little gift will go a lot further than spending $$$ just to spend it on someone.

4. Go ahead; buy an SUV - When you get the super-dooper SUV that get 15 MPG or less on the highway, your checkbook will be screaming for assistance! See the "Silly Song" about an SUV.


5. Rely on credit for emergencies - Don't worry; you'll never get sick or get into an unexpected accident (like we expect accidents) and have to pay a deductible. Always have an emergency cash fund. It's okay if you pay with a credit card. Just be able to pay if off when the bills comes in!

6. Skip routine maintenance - As long as your car seems to be running fine, why should you do anything, right? WRONG! Get your oil changed regularly. Get your brake pads checked. If your check engine light comes on, go get it looked into immediately. Many times, it may not be a big deal. The key here is to remember that preventive maintenance is WAY CHEAPER than "oh man, my car won't start at all and is really broken" maintenance.

"It's Only"

How many times do you say to yourself "it's only" when you try to buy something. "It's only $10.99." Or, "It's only $6.99/month". Or, maybe you hear it from you significant other when they buy something they want (but don't need). First of all, stop buying things that you simply "want". Buy things that you NEED. I'm not saying to not treat yourself to things once in a while because you should. But, you must stop buying little knick-knack things that are only valuable to you at the time you see them. Before long, those things that seemed so desirable will be collecting dust in a closet. So, there are really two points here. Don't buy something just because you want it (using the "it's only" argument to justify the purchase to yourself or to your partner). Secondly, it's extremely important to realize that all those little things add up over time. Figure out how much you could have left over at the end of a year if you didn't buy the little things that you didn't need!

First Post!

Recently, I ran across a blog called http://www.iwillteachyoutoberich.com/. It's a great resource, surely but I already practice many of the things that are talked about in the blog. I think the blog is also a great read. It's written in a no-nonsense, no-bullshit sort of way that hits home directly! It's freakin' awesome. It has inspired me to write. I have many ideas similar to what is mentioned in http://www.iwillteachyoutoberich.com/. But, I also have other ideas and methods that I use to hold on to my money. My blog will help show people how to hold on to their money and have it work for them.