Interview With Personal Finance Columnist Liz Pulliam Weston

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I recently had both the honor and pleasure of interviewing Liz Pulliam Weston, known to be the most read personal finance columnist on the internet.  Ms Weston was also the financial adviser for the FNBO Pay Yourself First Challenge in which five challengers learned to get financially fit.  (The Money Life Network’s own Phil from Prime Time Money was one of the contestants though he was beat out by Kristen).
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Save On Your Car Insurance With Proper Emergency Savings

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We already know the importance of adequate savings don’t we?  Well here’s an additional benefit for having savings – You can save on your car insurance!

You know about your car insurance deductible? This is the amount you have to pay on an insurance claim before your insurance kicks in to pick up the repairs.  Say you have a $500 deductible.  You get into a fender bender and file a claim to have your bumper repaired.  An estimate for the repairs is $1500.  You have to pay $500 and insurance picks up the $1000.  If your deductible were $1000 then you pay $1000 and insurance covers $500.  Get it?

So why not make the deductible as low as possible?

Sounds reasonable. You would rather your insurance pay more and you pay less.  Things is though, the lower your deductible the higher your premium is!  You pay more on your plan when your deductible is low.  This is the insurance company’s way of getting that extra cash layout back before an accident.  The opposite is true too.  The higher you make your deductible the lower your premium payments are.Continue Reading

The Time I Found A Fraud Credit Card Charge

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Did I tell you about the time I found a fraudulent credit card charge on my statement?

So I open up my American Express bill and look over the charges.  (You do check your credit card charges don’t you?)  I glance through the charges and I notice the restaurant bill for a dinner we had was more than what I remember.  I went through my receipts for the month and pulled out the restaurant receipt.  Sure enough the charge on my statement was more than the charge on my receipt.

Here’s what happened:

When I paid the bill I left a cash tip.  On the receipt I crossed out the tip section.  Somehow, someone at the restaurant was still able to charge my account more that they should have.

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25 Traits Of The Not So Well To Do

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Who hasn’t complained about money from time to time?

I’ve had my share of gripes over the years for sure!  Some people follow up their gripes by doing something about it.  They save and work hard so they can have a better life later on.  They become the well to do.

Others are the not so well to do’s.  They sacrifice their futures to live like kings and queens today, always with the latest “stuff” but at the same time complaining about money.

I’ve observed, over the years, that the not so well to do’s have some traits in common.  The following list are my observations.

These items aren’t bad per se, but when you see a good number of these traits in a person there’s a good chance they too are one of the not so well to do (read: poor)!

25 Traits Of The Not So Well To Do:

Reason you're not rich or wealthy1) Big flat screen TV

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Subscriber Swap Saturday – Interview With No Debt Plan

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No Debt Plan is about getting and staying out of debt with a plan. Kevin, the author, is passionate about budgeting, saving for the future, and using goals to reach financial freedom. You can subscribe to his blog by RSS or email.

This interview is part of a new feature he’s developed called Subscriber Swap Saturday. The basic idea is to get the subscribers of one blog to subscribe to the other blog for at least a week, just to try it out. After a week if you don’t find that blogger’s content enticing, drop it. The hope is that over time you will find several writers that you weren’t familiar with who provide meaningful content to you. You can read more about Subscriber Swap Saturday at his get out of debt blog, as well as his interview with me

What’s No Debt Plan all about?

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Take Up A Sport And Become Good At It

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Take Up a Sport and Become Good at it

This is a guest post from the blogger behind Studenomics, a personal finance blog that offers common sense advice for college students and recent graduates.  Studenomics is the ultimate resource for young people looking for advice on  how to survive this current recession, grow their careers, manage their finances, and still be able to enjoy the weekends.

We all want to have a productive summer but we just don’t know where to start.  Here’s a little secret: you can start by reading The Summer of George- The Most Productive Summer a College Student Will Ever Have.

Remember right before the Summer of George begins and he stumbles into the guys playing frolf (frisbee golf) in the park?  Costanza plays one game and he gets all excited about how he will spend his summer learning how to play frolf and then that could not be further from what actually happens.  This post may not have a whole lot to do with personal finance but the point of this series is to help young people have a highly productive summer.

Obviously I’m not trying to recommend frolf as a summer sport for everyone but I’m sure all of you have a sport in mind that you have always wanted to play.  For me this sport is Mixed Martial Arts and for the past few weeks I have been training 5 days a week to learn the sport.

Please don’t fall prey for the two most common excuses: no money and no time because there is a solution for both.

The no money excuse. If you can’t afford to pay for professional training then simply don’t get professional training.  First of all there are plenty of free tutorial videos available online (what would our generation do without You Tube?) and practice makes perfect.  If you can’t organize a group of your friends to play soccer one afternoon then go towards a major park in your area and join in on a casual game.  You will get to meet new people, practice, and improve your skills.

The no time excuse. The excuse of having no time is a self imposed restriction used as an excuse for procrastination.  I can maybe count on one hand the amount of college students that I actually know that don’t have any time at all to spare during the summer.  We all have at least an extra hour a day where we can sneak in some sort of physical activity.  The trick is to figure out how we can play this sport with our free time.  I figured out that I could sneak in a kickboxing class in the mornings since I have been working evenings lately.  A couple of summers ago when I was into golf (not frolf) I would wake up really early and go to the park to tee off a little so that no one would see my embarrassing swings. Whatever the sport is you can always sneak in an extra hour or so to improve your skills.

What other ways do you think you can afford a new sport?

Please enjoy the rest of the series:

Summer of George Introduction @ Studenomics.com

Learn a New Language @ TotalCandor.com

Help Your Local Church @ GatherLittleByLittle.com

Take Some College Courses This Summer @ PoorerThanYou.com

Summer Jobs With Little Startup Funding Required- Part 1 @ MoneyNing.com

Summer Jobs With Little Startup Funding Required- Part 2 @ PTMoney.com

Take Control Of Your Financial Situation @ Bargaineering.com

Work Abroad This Summer @ CashMoneyLife.com

Enjoy Cheap Summer Activities @ MoneySmartLife.com

Creative Commons License photo credit: Latente ? Le Sbarbine nel Governo

Stop The Retirement Ripoff – Interview With David B Loeper

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Have you wondered how good your retirement accounts are? Is your retirement money getting eaten up by fees you don’t see?  With the way the stock market has been the last year many people have seen their retirement portfolio’s nosedive.  Many people are no longer confident that their retirement savings will support them.  How can you protect your retirement savings so you can live the life you want when your working years are over?

Enter author and financial adviser David B Loeper. Mr Loeper has a new book out – Stop the Retirement Rip-off: How to Avoid Hidden Fees and Keep More of Your Money (John Wiley & Sons, April 2009) – which aims to help workers get the most out of their retirement accounts and avoid costly fees.

Mr. Loeper, what prompted you to write your book, “Stop the Retirement Rip-off: How to Avoid Hidden Fees and Keep More of Your Money“?  How bad are hidden fees in retirement accounts?

I noticed on my own personal 401k statement a column that said “Fees and Expenses” and the amount on the statement said zero.  As a trustee of our plan having just gone through our annual negotiation with our vendor I knew the fees weren’t zero and this struck me as being more than misleading.  I thought it was unethical.  So I endeavored to calculate what I was personally paying.  That “zero” expense was in reality over $1,500 I was personally paying, not to mention the thousands the company was spending on the plan as well.  Despite being a trustee and having more than 20 years of retirement plan experience, it took me nearly 30 minutes to dig through everything and figure out what I was paying.  I thought to myself, if it takes me this long with me being a trustee and knowing where to look, what are the chances any of my employees would be able to figure it out?  I started researching it more and found a Government Accountability Office study that showed more than 80% of plan participants do not know what, if anything, they are paying.  With the financial services industry lobbying hard to keep these costs hidden, and participant’s not knowing they are being ripped-off, I thought the only way to get this fixed is to educate participants, show them how to figure out if they are being skimmed and tell them how to coach their employer to fix it.  That is exactly what the book does.

What’s the difference in a percentage point or two in expense fees
and why should we care?

The difference between a point or two is expenses is MASSIVE.  An excess fee of 1.5% would cost a twenty five year old couple that each saves $2,500 a year with a $1,000 match OVER $1 million (or about ONE THIRD of their wealth) at age 65.  (see  The OTHER Millionaire You Make ).

How do I know if a plan I’m invested in has hidden fees?

Reading the book and following the step by step instructions is really the only way you will know.  That is the problem.  The fees are hidden and it is legal to do so.  In many cases your employer doesn’t even know.  You won’t know if you have hidden fees without doing a little homework.  Is it worth a few hours of your time to find out?  I estimate over 90% of all retirement plans have excessive fees that cost you your lifestyle in retirement.  Your statements may provide SOME information and starting with expense ratios of your funds can give you a clue, but there are all kinds of schemes to hide expenses from you.  A good place to start is look if you have a large cap index fund.  The going rate for a fair expense ratio for a large cap index fund should be no more than 0.10% annually.  If you are paying more (it is common to have such funds priced 3-5 times what is otherwise available) you are being ripped off.  We are not talking about the difference between a Lexus and a Camry.  We are talking about paying Lexus prices for a Camry!

Where can we put our retirement money to avoid costs and build up
enough to retire at the same time?

Anyone that answers this specifically without knowing the circumstances of the person is selling something.  In general, low cost index funds are what we use to construct portfolios to serve each of our employee’s and client’s personal needs.  They completely avoid the risk of materially underperforming and avoid needless expenses with certainty in exchange for having no risk of out performing.  The value of avoiding underperforming is worth that trade off.

Realistically, what does it take for the average person to retire?

A well thought out plan that identifies ideal and acceptable goals with balanced confidence that avoids too much uncertainty and needless lifestyle sacrifice.  We call this Wealthcare.

How are 401(k) plans as a retirement vehicle and what do we have to
look out for?

It depends on the plan.  They can be great, and they can be terrible.  Looking out for more than expenses is important too.  Active management gambles, auto pilot target date funds, insurance company products and fund wrappers, conflicted advice are all HUGE warning signs that you might be better off investing outside of your 401k (or 403b, 457 plan).

That’s a lot to digest, but it seems like it’s essential that we have to look into our retirement plans ourselves and make sure we are getting what we pay for!

Thank you for your time and insight Mr. Loeper!

You can purchase your copy of  Stop the Retirement Rip-off: How to Avoid Hidden Fees and Keep More of Your Money on Amazon.

A popular speaker and writer, DAVID B. LOEPER is the CEO and founder of Financeware, Inc. doing business as Wealthcare Capital Management in Richmond, VA. He is author of the top selling book Stop the 401(k) Rip-off!, three other books being released in 2009 by John Wiley & Sons (Stop the Retirement Rip-off, Stop the Investing Rip-off and The Four Pillars of Retirement Plans). He served on the Investment Advisory Committee of the $30 billion Virginia Retirement System and was chairman of the Advisory Council for the Investment Management Consultants Association (IMCA). He earned the CIMA® designation (Certified Investment Management Analyst) from Wharton Business School in 1990 in conjunction with IMCA.

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