The Basics of a 401K

If you have ever taken any sort of investment class you have heard about the power of compounding. Compounding allows a small amount of money, invested over a long period of time, to become a much larger amount of money, building wealth for the person wise enough to invest their money long-term. 

A 401(k) retirement plan is a special type of pension plan that, like many long-term investments, can pay-off handsomely down the road.  The funds that a person places in their 401(k) account can be used to invest in stocks, bonds and mutual funds as well as many other types of assets and, since they are funded by pre-tax payroll deductions, are not taxed until they are withdrawn. This allows them to take advantage of the fact that they aren’t dwindled by capital gains and dividends taxes as well as interest taxes and will make the investor much more money over the lifetime of the 401(k)

Indeed there are 5 benefits that make investing in a 401(K) a principally attractive option for investors.

  1. The tax advantage as mentioned above, means that the money invested in the 401(k) won’t be taxed until far in the future when it’s finally withdrawn to fund someone’s retirement. There are no taxes on capital gains, dividends or interest until that day, allowing the money invested to take full advantage of compounding interest.
  2. In order to attract and retain talented employees many companies offer employer match programs for 401(k)s, matching funds up to a certain percentage of what is deposited every year. This can add a substantial amount to the 401(k) over the long-term.
  3. 401(k) programs offer customization and flexibility that many other types of investment just can’t match.  This gives the person who owns the 401(k) a lot of opportunities to invest that otherwise would be closed to them.
  4. The fact that a 401(k) is portable, meaning that it can be taken from job to job as you move up or around in your industry, is very attractive.  Unlike a pension that stops if you stop working for a particular company a 401(k) can be take with you wherever you go.
  5. Being able to withdraw money for hardships and other loans is also a feature that makes 401(k) plans a favorite as other plans can sometimes force you to pay significant early withdrawal fees for taking your money out before they mature.

All told, 401(k) retirement plans are one of the best, safest and most flexible types of retirement plans that you can invest in, and can be very lucrative due to the power of compound interest.  If you have the opportunity (and the brains) they are definitely an option that you should take advantage of if you’d like to retire in style.

10 Ways to Improve Your Financial Situation

If your financial situation isn’t what you’d call ‘optimal’ we have 10 ways that you can use to improve it starting ASAP so that, by the end of 2013, you’re in better financial shape.  Take a look, use them as you see fit and enjoy.

  1. Decide what your big goals are and stick to them. Whether it’s a bigger portfolio, to be able to retire at 55 or to increase your retirement savings by 10% every year decide what you want to do and then get started doing it.  Brainstorm with your spouse or other family members if you need help.
  2.  Automate your savings.  This is probably the most powerful thing you can do to increase your savings and net worth over time.  Directly depositing part if your pay into savings, and IRA or other vehicles to save will generate big rewards over the life of your career.
  3. Get rid of junk mail and spend less on junk. That new gadget that you can’t live without.  We bet you can. Don’t get it and stash the money in savings instead.
  4. Make a diary to keep track of your spending. Even doing this for just 2 weeks will open your eyes to some amazing facts about your spending habits and how you can change them.
  5. Start eating more home cooked meals.  In fact, take a cooking course so that you can learn to cook fast, nutritious meals instead of eating out all the time because of the convenience factor, wasting money on fatty, salty foods.
  6. Make an effort to use less gas, less electricity and less gasoline.  If you truly make a conscientious effort to do this the savings could equal hundreds over a year and thousands over a lifetime.
  7. Ask the entire family for help with saving money, especially if your adult children are living at home with you.  If they have a roof over their head they should pay for that privilege, not just their parents.
  8. Don’t obsess about the market.  If you have made good choices and your portfolio is diversified you should be able to weather the small daily ups and downs just fine.
  9. Use the right credit card for you, don’t abuse it and always pay it off as fast as you can.  Of course make sure you pay the bills on time as well to avoid finance charges and other penalties.
  10. Get rid of all your unused junk that’s collecting dust and stopping buying new unused junk as well.

Do all 10 of these things regularly and diligently and your financial situation will have nowhere to go but up.  Good luck and we’ll see you back here soon.

Want To Become A Freelance Web Developer? Follow This Simple Plan

Getting started as a freelance developer can be difficult, especially if you’re straight out of university. If you want to quit regular employment however, and branch off into freelancing, then it can also be tough to figure out where to begin. The fear of being left without any income, or any clients to offer your services to, keeps thousands of people every year from taking the plunge.

The challenges of going freelance in the development industry can be daunting, but when you consider that a profitable freelancing business could await you with a little effort, then the choice becomes very clear. To help you get started in the freelancing world, here’s a short guide to help you achieve your developer dreams!

Step 1

When it comes to freelancing, there’s always the possibility that it may take you 2-3 months to make any real cash. So, around 6 months before you want to start as a freelance developer, its best to save as much spare cash as possible. You’ll want to have around 3 months’ worth of expenses money put away, like mobile phone bills and other elements of household utility. If you’ve never been good at budgeting, then now is the time to start, because unless you’ve got some cash put away when you start freelancing, what will you live on?

Step 2

Now is the time to design your portfolio site. Not only will this be one of the biggest assets in the early stages of your freelancing developer development, but once it is optimised it will allow you to attract customers for your services. Functionality is key, so you should spend time on making sure you site has clean code. Clients will be looking for the quality of the site as well as examples of your code, so invest time in making it right – don’t rush it! You’ll want a site that’s desirable as well as professional, so look for bright graphics and dark, bold colours.

Step 3

Now that your site is up and running, it’s time to move into social media. From Twitter and Facebook to LinkedIn and Pinterest, you’ll want to link your site to all your social media profiles. Not only will social media help you get your name out there, but it will also help potential employers recognise you when they’re looking for a freelance developer. Never intertwine your professional and personal social media pages!

Step 4

After you’ve set up your social media profiles, you might want to start a blog. Your current website could be a great conduit for people to access your blog, however if you want to create a separate one, make sure you tie it in with your social media too. Blog about things that interest you in web development, and remember to always keep up to date on the latest developments – you don’t want to be left behind!

One you’ve completed all these steps, it’s now time to give your employer a month’s notice! Ensure that you leave on good terms, and make sure they know that you’re going freelance – your number might be the first that they call in the future!

John is a freelance tech writer and blogger; he also contributes to various online marketing websites. He is currently working with Brookson.

An Ex-Smoker’s Million

There are so many reasons to quit smoking. Although you might have heard of a healthier alternative to smoking, which is vaping and is becoming the new trend now due to health benefits, you can go give this a try.  Check this Twitter profile to learn more about vaporizers for sale.

Aside from the highly increased risk of lung cancer, throat cancer, heart problems and circulation problems, there’s the premature aging to consider and the fact that it impairs your senses of smell and taste. Plus, there’s the socially awkward stigma of smelling like smoke.

Now the Investor’s Chronicle has offered up yet another reason to quit smoking; the chance of making nearly a million.

Paul Claireaux, researching on behalf of the Investor’s Chronicle, calculated that a 20-year-old smoker of 20 cigarettes a day could put saved cash into a tax-efficient pension; he or she would have raked in close to a million by retirement.

In fact, by putting the £7.50 a day savings into a SIPP, the ex-smoker would have a pension pot of £530,000 by the age of 55. Continuing the saving till the age of 65 would garner £953,865 by the age of 65.

The calculation relies on the assumption that a 20-year-old smoker invests the money into a pension which has a 60% employer contribution. The government then tops it up by 20%, assuming the ex-smoker is a lower rate tax payer.

Higher rate tax payers get a 40% government top up, which obviously would garner a larger sum by the time of retirement.

According to the article, smoking 10 cigarettes a day after retirement will require a pension pot of about £36,000.

After retirement, however, smokers receive high annuities thanks to their reduced life expectancy.

Today, the benefits of quitting smoking are common knowledge between smokers and non-smokers alike. Those who can’t kick the habit are increasingly turning to alternatives. With health services offering free support for quitters and patches and gum on prescription, cigarette companies seem to be fighting a losing battle. Plus, across the world ‘plain’ packaging is being enforced on packets, emblazoned with horrific images of throat cancer or deceased smokers.

E-cigarettes offer nicotine and the feeling of using a cigarette without all the associated health risks. Plus, they’re good for around 30 cigarettes so could save you money. You can work out how much you can save on the calculator below.



Banking Tips to Help You Save Money at any Bank – Part 2

Welcome back for Part 2.  We have lots more great info, tips and advice for you today so let’s get right to it shall we.

Never be afraid to complain to your bank if they deserve it. The fact is, nobody likes to hear from a dissatisfied customer but they would rather hear that you’re not happy and try to fix your problem then watch your fanny as the door hits it on the way out. If you talk to someone at your bank about a problem you’re having and they don’t take care of it to your satisfaction don’t hesitate to ask for the help of a manager or supervisor. If things really get out of hand you can always contact the federal bank regulator in your state for help.

Speaking of not being afraid to complain, don’t be afraid to ask your bank for a break if you need one. If you just bounced a check by accident, you think that you mortgage application fees are too high or you’re having problems repaying a loan talk to them and see if they’re willing to cut you some slack and/or possibly lower your rates.  If you’ve always kept your accounts in good standing you may be surprised at what your bank is willing to do for you.

Make a habit out of reading your statements every month.  If you don’t you may miss a new charge, mistake, fee or something else that’s costing you money.  Plus if there are unauthorized charges you’ll spot them in time to possibly do something about them. This is vital as many states have laws that say you need to do this within a reasonable time period.

Always read the fine print as this will prevent stress, anger and frustration down the road. Banks are in the business of making money and will do whatever they can to make more.  Even so-called ‘free’ accounts can have certain fees attached, credit card fees that were great when you signed up can be increased and minimum balances may affect what you need to pay.  Read everything so that you don’t get any unpleasant surprises.

This is vital but few people do it well; keep good bank records.  Documents, receipts and anything paper should be help onto until the charges are confirmed by your bank.  Once they are you can toss them but make sure you shred them so that the information can’t be used by an identity thief.

And there you have them; a number of excellent tips, ideas and some good advice that you can use when dealing with any bank.  We hope you liked this 2 Part series and invite you back for more great info sometime very soon.

Banking Tips to Help You Save Money at any Bank – Part 1

Banking today can be quite an expensive proposition.  Banks are in the business of making money and will charge fees for everything they can get away with.  If you’re keen on keeping as much of your money as possible then you need to take a look at the Tips and Advice below that we’ve put together.  They will save you time and energy too so take a look and then use them to keep those fees at bay.

Once a year you should sit down with your banker and ask them to go over your accounts and make sure that they are the best ones to fit your needs.  The fact is, as time progresses your financial situation changes and so do your banking needs.  If your bank has changed their services or offers new ones that you don’t know about you may be wasting your money or not getting as big a return as you should.  The only way to know is if you ask and so ask you should.

Speaking of asking what’s new at your bank, every 3 or 4 years you should do a full comparison of your bank to some others and see if you’re truly getting the best deals, best rates and best interest that you could and should be getting. Comparing your money market accounts, ATM cards, checking and savings accounts as well as any other services that you use is vitally important to make sure you get what you deserve.  Plus just the notice that you’re comparing banks might make yours a little more willing to negotiate with you.

Setting up direct deposit is recommended by experts over paper checks.  It’s safer, easier, more convenient and instantaneous too. Having no delays means that you won’t have to worry about having your money right away, no checks can get lost or stolen and, in some cases, you may even get a break from your bank for doing it.

Speaking of direct deposit there is also automatic payments.  If you want to make sure that you don’t forget a mortgage or car payment you can direct your bank to do it for you on a specific day every month. Banking electronically makes sense in many other ways also.  It can save you time, energy, gas and stress.

Find someone at your bank that you trust and go to them when you have concerns, problems or need help in any way.  That way they get used to you and you to them.  This will make you ‘friends’ and friends are always looking out for ways to help.  Remember, bankers are people too.

If you liked these Tips come on back soon for Part 2 where we’ll give you even more.  See you soon!


Money Saving Tips You Can Use Now

Saving money really doesn’t have to be that hard.  There are literally dozens of ways that you can save every single day and, at the end of that day, they will have added up to a decent amount of money.  If you’re keen on saving this year then have a look at the Tips below and start putting them into effect ASAP.

No matter what you are buying ask yourself ‘do I really need this?’ The simple fact is this; most of us have housefuls of junk that we don’t need, don’t use and even don’t want.  If you don’t really, truly need that new whatever it is don’t buy it.

Never go food shopping when you’re hungry.  This may sound silly but a hungry person is much more apt to buy a lot of junk than one who isn’t hungry at all.

If you eat a lot of a particular item or you have a big family join a shoppers club and buy it in bulk.

If you can avoid it don’t take your children with you when you shop.  Kids are kids and they always want something.  If your willpower is weak you may be better off leaving them at home.

Stop worrying about the neighbors.  Chances are, if they have a bigger house or ‘better’ car they’re also probably drowning in more debt than you too.

Don’t rush out to buy all the latest gadgets.  Usually they will be on sale a few months later and, even though they may not be the ‘latest thing’ they will still be incredible.

Use your local library.  The simple fact is that you library has thousands of books, magazines and brochures that they will let you read FOR FREE!  They even have DVD movies, CDs with music and a quiet place to get away from the kids for a little while. What more could you ask for?!

Most supermarkets and clothing stores have a ‘reduced’ aisle.  Sometimes you may find just what you’re looking for there and save 30, 40, 50% and more.  Wal-Mart has an entire aisle for this in their stores with lots of stuff that is deeply discounted.

If you’re not handy but want to save money on basic home repairs get a book (see notes about the library above) or take a course at the nearest community college.  This can save you a small fortune over the course of your lifetime.

Car pool.  Yes we’ve been saying that for years but there are few other ways to save as good as this if you can figure it out.  You’ll save on gas, car repairs and even get a few extra minutes of sleep if you’re the passenger.

If you have a Thrift Store in your town USE IT. If it’s well run you’ll be amazed at some of the great deals that you can find on clothes, home goods, toys, books and even furniture.

Want a bunch more tips?  Here they are in no particular order.

  • Make your own cleaning products from lemon juice and vinegar.
  • Grow your own vegetables.
  • Raise chickens for the eggs.
  • Save greeting cards for tags next year.
  • Refill your used ink cartridges.
  • Shop locally.
  • Turn your TV completely off if you’re not using it.

That should help you save all sorts of money this year.  Good luck and come back soon for more!

Banking Tips for the 20-something Adult

If you’ve recently graduated from college you may have already received your first paycheck and with it got your first checking account fee.  The thing is, as a student oftentimes you’ll be able to get a free checking account. That’s what the banks lure you in with and, once they have you, they will start to tack on all sorts of fees that you may miss because you’re not used to seeing them.  With that in mind we’ve put together a short list of the things that you need to be aware of when you first start banking in your 20’s.

Tip – Know all of the fees that are associated with your specific account.  There will be certain fees that you will be able to avoid but if you don’t know them you won’t be able to avoid them.  The best thing to do is sit down with a rep at your bank and ask. They are obliged to tell you and give you all the info necessary.

Tip – Remember that you purchasing habits are being watched. Today every move you make is being followed electronically.  What this means is that your debit and credit card purchases are being analyzed by lenders and they can (and will) use this information to determine what your rates should be and if you should be allowed to get more credit or not. If you’re prone to making silly financial mistakes do them with cash instead.

Tip – Avoid transfer fees as much as possible. Any bank you use wants you to keep your money in 1 place – their bank. If you transfer it they’re going to charge you fees to do so and they can sometimes be pretty exorbitant.  Better to budget yourself well and avoid them.

Tip – Start saving NOW.  Yes, you’ve probably heard it already from mom and dad and any other responsible adult but the fact is that there will come a day when you’ll need money but won’t want (or be able to) work anymore.  The earlier you start saving for retirement the easier it’s going to be once you arrive there.  Yes it won’t be for a few years but even still you should have a substantial amount of money saved for emergencies.  Shoot for 10 to 15% of your pay but do something to get started NOW like having a specific amount deposited directly into your savings account every week.

Finally, keep a vigilant eye on your account(s) online and check the balance against your receipts often. Banks make mistakes and if you catch them you may save yourself a lot of hassle and headaches. Plus if youmake one it’s better that you catch it before you overdraw your account and get smacked with fees.

Saving on Travel in 2013

To lighten things up a bit we’ve decided to bring you, our dear readers, some excellent Tips on how to save on your vacations and travel in 2013.  There are, for those that are a bit adventurous and don’t mind places that are a little bit off the beaten path, many different ways to save big buck when you’re away from home so, without further ado, let’s get right to them.

First, no matter when or where you go, there are 2 points that you must take into consideration before starting any vacation or travel excursion. The 1st is where you’d like to travel and the 2nd is for how long that you’d like to go. If your goal is a 1 week trip to the Caribbean your plans will be much different, and cost differently, than a month-long excursion to Bali. Both offer various ways to save but, because of the time difference, the options vary greatly.

Next, simply, is to start saving money for the trip.  Frankly, if you can’t commit to save for a trip then it might not be worth taking. Open up a savings account just for the trip and start filling it. A great idea is to work out what the average expenses will be per week where you’re going and start saving that exact amount per week.

Researching where you want to go is up next. Before you book a hotel, especially if you’re going for more than 2 weeks, you should look into longer term options like hostels, apartments and even houses for rent. These are typically much cheaper then hotels and, in many cases, allow you to ‘see’ and experience a place much better.

Furthermore, if you’re going on a long trip one of the best reasons to get an apartment or house (or hostel if you can handle it) over a hotel is that you can cook for yourself.  One of the biggest expenses when travelling is the food and, if you can buy it and prepare it yourself you will save hundreds if not thousands of dollars.

Bringing the right equipment and clothing is essential no matter where you go but, if you’re going for an extended amount of time, it really becomes vital.  If the temps can change and you’re caught with clothing that doesn’t protect you from the elements you’ll need to buy it wherever you are and that can be expensive. The same for shoes, umbrellas, rain gear and outdoor gear like snorkel equipment.

Once you’ve done all of these things you can sit back and feel good that, on this trip at least, you’re going to save a lot of money.  Good luck and have a great time!


The Importance of Income Protection


In today’s tumultuous economy and unemployment rates it really makes you grateful for having a safe and secure job. Unfortunately, there are no guarantees as to how long that job will last, and how long you will be able to perform the necessary tasks. I work a simple office job, no heavy lifting or physical exertion. Yet, last year I found myself physically unable to work due to a severe illness. Fortunately my employer provided disability benefits so that I was able to receive my income while I recovered from my illness.
Income protection is an issue that can often be overlooked; people can get stuck within the mind-set that these things won’t happen to them. Whilst researching income protection policies I came across a recent advert that is part of a campaign by Australian insurance comparison site Choosi, this summed up for me the way that insurance can be overlooked.

Another issue is that sadly there are many people that work for employers who don’t offer the kind of benefits that I could receive, and that’s when having income protection insurance is especially important. This type of insurance will ensure that people who are left unable to work can still receive a portion of their income for a defined period of time. Say you pay for 6 months of coverage and then find yourself hospitalized for a similar period of time; you may be eligible to receive up to 75% of your regular pay.

While there are some basic age restrictions, and you need to have been employed for a certain period of time prior, this type of insurance provides an immense peace of mind for you and your family. I find this type of insurance necessary if you are the only member of your household that works, and if you have dependants that rely on your steady income. If you have a wife and children then income protection insurance from a site like Choosi will make ease your worries if you’re ever left unable to work and provide for them. The best part is that even the self-employed workers, or part-time workers are covered as well. I know plenty of bloggers who make their living from their online endeavours, and this type of insurance would be perfect for them.

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