Welcome to the March 18, 2009 edition of Kids and Money. There were a lot of good posts. There were a lot of "spammy" posts, too, which I deleted. Remember, folks, I approve 99% of the posts here, but this week I probably weeded out 30-40 percent. That's way too much.


So, please, let's keep this focused on Kids and Money. Not Kids OR Money. But Kids AND Money and how the two are inter-related. Okay?

KCLau presents Learn Money Tips playing iMafia posted at KCLau's Money Tips, saying, "About iMafia, an application for iPhone. How it is connected to real life in terms of personal finance and how to play the game."

jim presents Teaching Kids About Money: Tessy and Tab Money Manager Kit posted at Blueprint for Financial Prosperity.

nickel presents Visualize Your Savings Goals posted at fivecentnickel.com.

The Smarter Wallet presents Blu-Ray DVD Player Review: Pros and Cons posted at The Smarter Wallet, saying, "Are blu-ray players worth the money? Should you get one for your family?"

Concerning Kids presents Raising A Street Smart Kid posted at Concerning Kids.

Save Money presents Frugal Frauds Revealed posted at How I Save Money.net.

Julie Guarnizo presents Teaching Money Management Habits to Children posted at Beef Up Your Piggy, saying, "As a mother of two small children, teaching life lessons about money and personal finance is crucial is raising children."

David presents The Safety of Your Accounts posted at Personal Finance Ology, saying, "With the uncertainty in the banking industry, learn where the safest places for your money are!"

Nate Desmond presents 12 Ways to Waste Money in College posted at Debt-free Scholar.

Steve Patterson presents ISMagazine.com - Blog - ATM Skimming Leads to 1 Billion in Losses for Consumers posted at ISMagazine.com, saying, "Great story about ATM safety and something to present to your bank to make sure their ATMs are safe."

Debbie Ducker presents Your Children and Grandchildren Must Learn to Save Money posted at Ducker Promotion Ezine, saying, "Teach your children how to save money at an early age and you will save them a lifetime of heartache."

Justin Hall presents How to Find a Job posted at Justin Hall.

Patricia Turner presents The Ultimate Guide to Ponzi Schemes: Oldest and Biggest Scams, Madoff and More posted at Bankling.

Stephanie presents The Wii Fund posted at Stop the Ride!, saying, "Teaching the kids to save."

jim presents Deducting Miles for Charitable Volunteering posted at Blueprint for Financial Prosperity.

Matt Sherberg presents Choosing the Best Debt Solution posted at Debt, saying, "When you have mountains of debt piling up and you have debt collectors waiting at your doorstep, it is time to get off the couch and find a debt solution that will work for you. The right debt solution can help you reduce your debt."

Jeff Rose presents 29 Good Reads About Kids And Money posted at Jeff Rose.

Savings Toolbox presents The UnTruths About Saving For College posted at Savings Toolbox.

Silicon Valley Blogger presents College Advantage: Ohio 529 Savings Plan Offers $25 Cash Bonus posted at The Digerati Life, saying, "529 plan for your kids!"

The Smarter Wallet presents Budget Your Money and Control Your Spending Using This Simple System posted at The Smarter Wallet, saying, "Thanks!"

Sam presents NEW !! Job Interview Tips and Questions. Get the Job You Want. Job Interview Tips and Skills. ! Surfer Sam posted at Surfer Sam and Friends.

Concerning Kids presents How To Handle A School Yard Bully posted at Concerning Kids.

Dating321 presents Breaking Up Tips posted at Free Dating Advice, saying, "Breaking up is difficult to do, but it is important you go about in a mature and respectful way."

That concludes this edition. Submit your blog article to the next edition of Kids and Money using our carnival submission form.

Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: kids and money, blog carnival.

Money isn't everything. It's the only thing. Wait. That's only for football.

Enjoy life. Spend time with your family.

The Bernard Madoff scandal is making the news again today. I haven't written much about financial scandals, rip-offs, and white collar crime, so now's as good a time as any, I suppose, to fill you in on a few things.

First off, let's just say that Bernie Madoff is a jerk. He took people's money in an elaborate Ponzi scheme and made off with BILLIONS. Gone are the days when MILLIONS of dollars ripped off will make the news circuit!

Madoff simply needs to be tried, sentenced, and forgetten about. "Investors" - you will NEVER get your money back.

IT'S GONE.

I put "investors" in quotes because a lot of those folks weren't investors. They were rich dreamers who wanted even more money than they already had.

They had an "In" to a supposedly too-good-to-be-true financial "system."

NEWSFLASH

If it's "too good to be true," it's too good to be true! Run - don't walk - away from stuff like this.

For as long as man has lived, there have been schemes concocted by shrewd, yet immoral and dispicable, people that seek to separate YOU from your MONEY.

The most famous, of course, was made famous by Italian immigrant, Charles Ponzi. He promised "investors" a 50 percent return on their money in a matter of days and he made good on his promise.

For a while.

He took new investor money and returned it, plus the 50 percent, to the gullible folks who gave Ponzi their money first. The last suckers got the shaft.

Of course, Ponzi went to jail and died poor. Just like Madoff ought to.

There are some lessons to be learned here.

1. The aforementioned, "If it's too good to be true" lesson. 
2. Invest like Warren Buffett - if you don't understand a "business," don't invest in it. Ponzi had no business other than taking people's money for himself.
3. If you hear about a scheme on a golf course, get in your golf cart and go home. Secure your money. Make sure your pockets weren't picked.
4. If it sounds like an "insider's secret," treat it as such. Insider trading is illegal for many reasons.
5. Invest in YOUR own business. Nobody else gives a damn about you or your financial plight. 

One last thing: There are legal Ponzi schemes, the most notable of which is Social Security. Yes, you read that right. It's a government-enacted program that is exactly a Ponzi scheme.

The reason that Social Security will go broke is that there are fewer and fewer "new investors" and the old investors want their guaranteed returns.

I'm not making any moral judgements here. In fact, I support Social Security. In its original fomulation, it was to be used as a social safety net that had more new investors than old. As long as that was the case, the system was sound and good.

But now that the demographics have turned upside down (many more collecting nowadays, not as many contributing, relatively speaking), the system is in peril.

Stay tuned for my solution to the Social Securty nightmare in a coming post. And don't get me started on Medicare! It's in a much more precarious state than Social Security ever will be, but you don't hear much about it.

Money isn't everything. It's the only thing. Wait. That's only for football.
Enjoy life. Spend time with your family.

Welcome to the March 2, 2009 edition of Kids and Money. It's been a while since our last carnival, so this is a BIG ONE. I've tried to put the submissions into logical blocks for easier reading.

Earning

Tisha Tolar presents Work at Home Discipline: Find Some posted at Empowering Mom.

jim presents Ten Recession-Busting Money Tips for Young Professionals posted at Blueprint for Financial Prosperity.

Pinyo presents Where To Sell Used Books And Textbooks posted at Moolanomy.


Spending

Matthew Paulson presents 8 Money Saving Ideas for Family Fun Night posted at American Consumer News.

Gary R. presents Traditional vs. Rustic Camp Sites posted at Camping Tips, saying, "An increasing number of campgrounds are offering visitors the choice of both traditional and rustic campsites."

Madison presents Money Saving Tips for Kids on Valentine’s Day posted at Kids and Money.

Silicon Valley Blogger presents Lower Your Car Insurance Rates! How To Cut Insurance Premiums In Half posted at The Digerati Life, saying, "If you've got kids, driving safely and carefully is a must. And doing so will most likely lower your car insurance rates as well." 

Barry presents Tug Of War Between Retailers And Frugal Consumers posted at Associate Money. 

Annette Berlin presents Printable Toys For Pre-Teens posted at Craft Stew, saying, "Older children get tired of toys fast. Rather than spending a small fortune to keep them constantly satisfied, let them create their own playthings from cardstock and a printer." 

jim presents How to Strong Arm Your Way to a Better Deal posted at Blueprint for Financial Prosperity. 

Savings Toolbox presents Tips to Save On your Summer Getaway posted at Savings Toolbox.


Saving

Deposit Accounts presents Savings Accounts for Children posted at Deposit Accounts. 

Mr. Banker presents High Interest Money Market Accounts (MMA) posted at Best Interest Rate Banks. 

Brian McKay presents CD Rates posted at MonitorBankRates.com, saying, "Finding a decent rate on a certificate of deposit account these days isn’t an easy thing to do. CD rates have been coming down so fast recently the average 12 month CD rate is nearing just 2.00%." 


Investing 

retirehappy presents Warren Buffett’s Metric Says BUY! posted at My Retirement Blog. 

The Shark Investor presents Strategies For Raising Funds: Borrow Your Way To Wealth posted at The Shark Investor, saying, "How and when to use loans for investing" 

Carrie presents Learning About Investing as a Child posted at Less is More. 

RJ presents The Case for Investing in Index Funds posted at Our Financial Planner, saying, "No matter the age and experience, index funds can be your greatest friend. Thank you for hosting." 

Kelly Sonora presents 25 Forex-Related Twitter Accounts Worth Following posted at Best Forex Brokers. 

PicktheBrain presents The First Investment a Beginner Should Make posted at Beginner Investing. 


Money Management 

Len Penzo presents Using a Ledger to Teach Kids Money Management posted at Len Penzo . Com, saying, "Even kids as young as 6-years old can learn personal finance management skills via this simple bookkeeping plan." 

Lisa Mitchell presents Teaching Your Children About Money posted at Let's Talk Babies. 

Jacquelyn presents The Wise Parent & Child Money Guide posted at WParent.com - Wise Parenting Guide, saying, "Give your child an introduction to the subject of money by reading this article together. This will give your child a general idea about money." 


Credit

Silicon Valley Blogger presents Best Cash Back Credit Cards: Your Rewards For Spending posted at The Digerati Life, saying, "Thank you!" 

jim presents Best Student Credit Cards posted at Blueprint for Financial Prosperity. 

Finance Tips 101 presents Drowning In Debt? Bad Credit Loans May Need To Be Considered! posted at Finance Tips 101. 

Finance Tips 101 presents The Pros And Cons Of Personal Loans posted at Finance Tips 101. 

Finance Tips 101 presents Answers About Home Equity Loans posted at Finance Tips 101.

DebtLite presents What Are the Root Causes of Debt? posted at Debt Advice. 

Astrid Lee presents Suze Orman posted at World Healing, saying, "Article on advice by Suze Orman, the popular TV adviser on personal finance and about how get out of debt. Article also contains video show where she talks about how to determine how much to give to charities..." 

Finance Tips 101 presents Cash Back, Award Points, and Gas Cards posted at Finance Tips 101. 


College

Madison presents Midwestern Disaster Area Tax Impacts posted at Tax Gab, saying, "Expanded college tax credits for those affected by the storms last year." 

Finance Tips 101 presents Scholarship And Grant Information For Interested High School Graduates posted at Finance Tips 101. 

The Smarter Wallet presents Student Loan Programs To Pay For My College Tuition Costs posted at The Smarter Wallet, saying, "Thanks!" 

Madison presents Ohio 529 College Advantage $25 Sign Up Bonus posted at My Dollar Plan. 

OnlineCollege presents Choosing a College: A Simple Guide for Undergraduates posted at Universities and Colleges. 


Preparing for Baby

jim presents Preparing Financially for a Baby posted at Blueprint for Financial Prosperity. 

Concerning Kids presents Choosing The Right Pediatrician For Your Baby posted at Concerning Kids. 

Madison presents Our Family is Expanding… Financial Resources for Babies posted at My Dollar Plan. 

Pregnant Woman presents Identical Triplets - Three Bundles Of Joy posted at Pregnancy, saying, "Triplets occur in one of every eight thousand live births" 


The Stimulus 

The Smarter Wallet presents Will The Obama Economic Stimulus Check and 2009 Stimulus Plan Save The Economy? posted at The Smarter Wallet, saying, "How will your family be affected by the stimulus bill?" 

Brian McKay presents What's in the Stimulus Bill for You? posted at MonitorBankRates.com, saying, "We have listed all the benefits for individuals in President Obama's stimulus bill that was just passed." 

Ella Moss presents New Economy, or Buy American, Stupid! « Zodiac Times posted at Zodiac Times, saying, "So, the new stimulus package is passed, hopes are up, markets are down, and recession deepens. Everyone is blaming the housing market, unscrupulous bankers and inept previous administration. But very few seem to understand the true roots of our woes, and how deep our economic problems go." 


Miscellaneous 

KCLau presents Money Tips Group Writing Project posted at KCLau's Money Tips, saying, "Calling out for contributors to an e-book about personal finance." 

nickel presents Should You Pay Your Kids for Good Grades? posted at fivecentnickel.com. 

Money Tipper presents Bring Proof of Age When Flying With Young Children posted at Money Tipper. 

Concerning Kids presents Tips And Idea To Help Child Proof Your Home posted at Concerning Kids. 

Finance Tips 101 presents Alarming Identity Theft Statistics Are Cause For Concern posted at Finance Tips 101. 

Relax presents The happy way to spend money posted at The Wise Curve, saying, "we are happier when we spend money to gain experience than buying material goods" 

jim presents Total Cost of Owning A Dog posted at Blueprint for Financial Prosperity. 

Concerning Kids presents Helping Your Healthy Child Stay Fit For Life posted at Concerning Kids.

That concludes this edition. Submit your blog article to the next edition of Kids and Money using our carnival submission form.

Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: kids and money, blog carnival.

With all the talk about the souring economy, job losses, bank failures, and the like, the recession of 2009 is on the minds of everyone.

But I'd like to posit that we never fully recovered from the recession that officially spanned 2001-2002. And that, my friends, puts us into a possible discussion of Great Depression proportions!

Now, before you run off and withdraw all your money from the bank and bury it in your back yard, hear me out!

Typically, after a recession, jobs, sales, and revenues (as well as profits) rise, most often quite rapidly.

Didn't happen last time.

Here's a picture to illustrate what I'm trying to describe. The red arrows represent the year of the respective recession. See how unemployment rises after a recession, then drops until the next one, from 1991 to 2001? And see how the unemployment rate dropped below the rate during the year of the previous recession? That is the typical behavior of the labor market. But look at what happened from 2001 on.

Now, I'm not saying we're in another depression. But we're approaching Great Depression longevity, if not to the same depths. The Great Depression started in 1929, the economy made a few attempts at reviving itself, and then WWII came along. America wasn't fully involved in war preparations until 1941. So we're talking 12 years, at the most.

For this last round of economic downturns, the duration has been 9 years. We're getting there.

Of course, we've yet to see 25 percent unemployment. But also remember that we fudge the numbers nowadays, and there's a different sort of mindset for what constitutes "employment." In the 30s, if you didn't have a full-time job, you were unemployed.

Now, if you're no longer looking for work, you're not even counted. Perhaps you've been out of a job for 3 years, got fed up, and started selling all your worldly possessions on eBay. You're no longer "unemployed." This set of circumstances didn't exist in the '30s.

So, I'd say that whatever level of unemployment you see today, raise it by 30 to 50 percent. Yeah, I think it's that bad. But even at an official 8 percent, we're no higher than 12 percent. Not that that's a good thing. But it's not 25 percent, either.

However, for some pockets of America, where there's 12 or 13 percent unemployment (take San Joaquin County, California, for example, where home foreclosures are at all-time highs), that figure could easily be over 18 percent. I submit to you that those folks feel like they're living in a depression! If you don't believe me, ask them!!!

One last thing: If we hadn't spent $1 trillion on a war (or something else, for that matter), the economic picture during the 2000s would be even bleaker.

I said all that to say this: We got out of the last depression and we'll get out of this one (whether you believe it's a recession or depression).

But our way of life may have to change and that in itself may be the most uncomfortable part of it all.

Jobs you would have never considered before...you may now consider. Wages you hadn't thought about since high school...you may now reconsider. Hours you thought were only for hookers and security guards...they may be under consideration!

Things "I cannot live without" - you may have to live without them (like computers, cell phones, video games, cable, the list is endless).

All of this will break up some families and ruin lives of countless people. But the silver lining is that dire situations may bring us closer, may give us thought for conserving what he have, and give us a greater appreciation for all those things "I cannot live without" once we get some of them back.

It's a bitter pill to swallow. But swallow it we must.

One last thought: There may never be a better time to go out on your own. Consider starting your own business. The Internet being what it is, with low overhead costs, fast deployment capabilities, and only your own mental limitations ("I can't do it," "I don't have time," "I am not that smart" among thousand of other excuses), the sky literally is the limit to your income potential.

It may not come fast, but it will come. And in the end, you'll have more time, more money, and less stress. Get some ideas here. No pressure, no strings.

Money isn't everything. It's the only thing. Wait. That's only for football.
Enjoy life. Spend time with your family.

Yeah, this is a big post. I haven't written anything substantial in a while. As you may know, if you're a subscriber or frequent reader, I work for a company that's been -- ahem -- "acquired" and I'm going to be looking for a new job real soon. I could lament about the fact that it's the 4th quarter, nobody's hiring, the holidays are near, nobody's hiring, I'm a single-income family, soon to be zero-income family, nobody's hiring...but...

You didn't come here for that!

You, like me and thousands of others, either are looking for new jobs or soon will be. The economy tanking, the government doing its best impersonation of Sergeant Schultz ("I see nuuuthing!!!"), and companies increasingly getting by with less have all lead to higher numbers of unemployed, and an almost-never-uttered underemployed. That is to say, there are thousands, maybe millions, of people who have full-time jobs that don't pay much or they have several part-time jobs that -- again -- don't pay well. In any event, neither group is making ends meet nor are they counted amongst the unemployed (if you're not looking for a job, you don't count).

This post will cover three ways of earning an income. Mix and match, go solo, or do all three -- it's completely up to you. There's the "traditional" way, the "alternative" way, and the "passive" way. First, the traditional way. But with some unconventional twists.

Traditional

Most of us want a "job" where we trade our time and knowledge (otherwise known as "work") for money. We produce a product, sell a service, build a bridge, write a book, etc., all in return for a paycheck that either comes once a week, twice a month, or once a month.

Millions of people -- the majority, in fact -- who consider themselves "employed" (as opposed to unemployed or self-employed) have jobs. It's supposed to be -- and usually is -- a symbiotic relationship, in that both the employer and employee gain something from the relationship.

I've had lots of jobs. Too many in fact! If there's one thing I know how to do, it's how to get a job! And I've had many different kinds of jobs. Here's a short list:

• Concession stand salesman
  
• Yellow pages seller
• Retail store manager and salesperson
• School teacher
• IT help desk
  
• Systems Analyst
• Auditor
• Manager, credit card operations
• CEO, computer consultancy
• Print press operator

(not in chronological order)

With each job, save for one, I boosted my income considerably from one job to the next. However, that one set back killed my income growth for 3-4 years!

Nevertheless, here's what you need to do to get a job. It's a long list. The short list will come later.

• Make yourself employable. This means get a college degree if the job you want requires it, the technical certification if the job requires it, the law degree and BAR exam passage if you want to be a lawyer, the credential if you want to be a teacher, etc. This step requires the most planning, patience, and time. But short-cuts abound.
• Get a long list of references together. Get names, phone numbers, addresses, and emails. Get letters of recommendation. In short, network!
• Speaking of networking, sign up for LinkedIn. There are a whole host of things you can do here. Check out Guy Kawasaki's blog post about using LinkedIn to its fullest. Get LI "endorsements."
• Keep in touch with all of your classmates, teachers, co-workers, and employers (past and present). Talk to them long before you need to, lest your calls be labeled what they are -- job calls.
  
• Seek out companies you want to work for. Research them. Find out things about them that is not common knowledge (but make sure it's objective and flattering). Put together a list of companies that you want to target for job opportunities. Find out who works there (using LinkedIn or other resources). Talk to them!
  
• Be especially mindful of the Human Resources department where you currently work or worked. Use the recruiters there to find recruiters at other companies or headhunters / job search firms (they all talk to each other). If you're currently in school, utilize your Employment Opportunities folks. Turn an internship into a job!
• Open accounts at Monster.com, HotJobs.com, and CareerBuilder.com. Submit resumes and create cover letters. Update daily.
• Find local job and resume boards and post your resume there. 
  
• Use Craigslist.com for job opps. Post a "jobs wanted" ad (free) listing, using it as an announcement that you are available. It's another form of broadcasting your resume.
• Network!
• Be on the lookout for opportunities at companies that you didn't target. For example, you may prescribe a solution to a company that takes a real liking to you. Don't forget that the CEO of Craigslist got his job by posting his resume on Craigslist. Obviously not a common occurrence, but if him, why not you? Luck = Preparation + Opportunity
• Network!
• Don't be afraid to "go home." If you liked a job but left out of frustration or the need to explore other opportunities, go back if that's what your heart desires. We all get caught up in "you can't go back home -itis" but you can. It's your life. Do what makes you happy. Swallowing pride is not that hard if the outcome is what you truly want.
• Did I mention networking?
  

 The short list:

• Network
• Work the Net!

Nearly every good job I got through knowing the right people. I'd like to think that I got the interview because I had a good recommendation but that I got the job because I deserved it. Maybe. Maybe not. But whatever the case, knowing people and interacting with them bears fruit!

Alternative

This post is tied to several posts (Learning to Earn, Part 1 of ... Many?, Ten Commandments of Personal Finance, 7 Things You Must Do Financially) I wrote a long time ago about alternative income. You'll find "alternative income" all over the Personal Finance blogs; I implore you to read these articles first, and then come back. I'll wait.

(Tapping toes. Joyously waiting for your return. Here are a few more from very reputable sources.)

• 40+ Alternative Income Ideas and Resources : Moolanomy 
• My Sources Of Alternative Income And How I Make Them Work For Me ... 
• The Simple Dollar » Why Many “ Alternative Income ” Ideas Aren’t ...
• Alternative Income Idea: Stringing Tennis Rackets | The Passive Dad 
• my 2008 financial resolution
• Solo-preneuring™: Get Paid to Do What You Love to Do 
• The 8 Levels Of Income | Amateur Asset Allocator

The short story is that there are literally hundreds of alternatives to the traditional job. They all require that you start your own business, or at least require that you earn money outside the typical employer/employee relationship. Here's a short list of alternative income ideas:

• Self-employment -- service business. Can be lawn mowing, landscaping, computer repair, energy consultant, home painting, mobile car detailing, closet organizer, Tupperware, etc. Mostly labor-intensive.
• Affiliate marketing. Best done through having your own web site (or sites). You sell somebody else's product(s) and earn a commission or fee. (Warning: Affiliate links ahead!) Some good affiliate programs are Site Build It!, oneNetworkDirect, and ClickBank.
  
• Blogging. You earn money through ads, affiliate marketing commissions, and other sources (see How to Make Money From Your Blog by Steve Pavlina for a great blog post about this).
• Sell your own products, like books, eBooks, videos, newletters, photographs, drawings. Amazon, Lulu.com, and eBay immediately come to mind.
  
• Network marketing like Amway, Pampered Chef. Thousands of others. Many seem to place an emphasis on recruiting other salespeople. Not my cup of tea. BUT many folks have more than replaced their traditional income with income earning in Multi-Level Marketing (aka "MLM").

Passive

So-called passive income is derived from doing as little as possible. The classic case is income from investments, such as interest and dividends. Wealthy people can afford not to work because they have assets throwing off income. Generally, this comes in the form of cash dividends from stock investments and interest from bond investments. You, of course, probably don't have this luxury. That is to say, if you had assets like this, you wouldn't be reading a blog about how to make money (you already have).

But there something to be said about this, from an asset perspective. In any income-generating endeavor, whether it is from working for somebody else, generating affiliate income, or building your own business, all the income you derive comes from an asset. Your ability to labor is an asset. Your ingenuity is an asset. Your capital is an asset.

Strive to make as much as possible of what you own a performing asset. If you're at home sitting around watching TV, you're wasting an income-generating asset (your intellect, or your ability to create something). If you're delivering pizzas, you're using your car (an asset) to generate income. If you buy a new gadget like an iPod, ask yourself if it can generate any income. If it can't, think twice twelve times about buying it. See?

For most of us, it's our time that is our most valuable asset. Time is finite, too. We only have so much of it. But we can turn that thinking on its head and instead of trading time for money, we can use an asset to produce an income. Think about that a bit.

When you think in these terms, your future becomes limitless. Time doesn't matter any more. It's what you do in the time you have that determines whether you earn a generous income or not.

I hope that I've given you some food for thought. To summarize, most of us just want a fair wage for the time we put in. That's perfectly acceptable. However, I think I've given you some ideas about how to generate more than just a trade of your time for money. You can certainly enhance your monthly take-home pay by incorporating alternative and passive revenue streams into the mix.


Money isn't everything. It's the only thing. Wait. That's only for football.
Enjoy life. Spend time with your family.

I don't budget. Do you? For those of us in the middle, here's a great shortcut method to budgeting: Budgeting for Lazy People.

Here's the even shorter story: Earn more than you spend.

Falling short every month? Get a better-paying job or work on alternative income streams. Here are some posts from Moolanomy about creating income streams.

Remember, you can only cut out so much. Once you've canned cable, stopped eating out, and dropped the cell phone plan and switched to Vonage, what's left: Health insurance, 401k contributions, and food. None of these are good options to cut.

Prime Time Money tagged me with the challenge to "Find one step you can take to make your financial system better or more organized."



Being the philosopher I am, I turn to Confucius,  who is rumored to have said (did I tell you I'm a skeptic, a cynic, and sarcastic?)

A journey of a thousand miles begins with a single step

My single step was buying a little software program in the late 80s (I was still a kid! Really, I was) called Managing Your Money which led me to the inspiration and contributor to the software, Andrew Tobias. I found out that Tobias was a personal finance author (what are those? You mean there were experts before blogging?); one of his books was humorously called "The Only Investment Guide You'll Ever Need."



In this book, I can truly say that I learned at least 95 percent of what I know today about personal finance, investing, banking, and saving money. I also learned 100 percent of what I know about wine (which is still very little, by the way).



Tobias is an advocate of index fund investing, buying in bulk (he provides the ROI calculations, too), yet only investing money that you can truly afford to lose.



And he's lost a lot! He's lost his shirt in Broadway and off-Broadway plays, futures and options, commodities of all sorts, real estate, collectibles, and limited partnerships in oil and gas. You name it, he's invested in it, and he's lost money in it.



He goes through the various ways he's lost money to illustrate the idea that you just cannot win in the investing game by going for broke and paying tons of fees. The experts in commodities, for example, will always clean your clock. These speculative "investments" are zero sum games: One guy wins, you lose.



Contrast this with the stock market, where one man's gain isn't necessarily another man's loss. We can all win; or, in other words, a rising sea lifts all boats. The stock market, even though it's sucky now (financial term for "underperforming"), is your best bet for long-term growth of your money.



I still follow Andrew Tobias. Though he talks a lot of politics on his site, the focus still is on financial planning, frugality, and investing. He's funny, witty, and smart.



So that was my first step:



Finding somebody to follow.



Many choose "gurus" like Dave Ramsey, Jim Cramer, or Ric Edelman. I found Andrew Tobias. It's been a great find!



Now, whom shall I tag?



brip blap

Frugal Dad

How to Make 7 Million in 7 Years™

Quest For Four Pillars

Generation X Finance



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From Steven Levitt, author of Freakonomics: Don't Save Too Much

The logic was simple: An academic's salary rises steadily over time, as do outside opportunities (like writing popular books!). The right reason to save is so you can even out your consumption. When times are good, you should save, and when times are bad, borrow. Most likely I would never be that poor again, which meant I should be borrowing, not saving. I didn't follow the advice as fully as I should have, partly because my wife insisted we save - she is not quite as good an economist as Milton Friedman.

Do you agree? It makes some sense to me. Love the last line!

Like what you've read here? Subscribe to Money Hacks by Email.

First in a series of 40 quotes from famous fund managers, sports stars, comedians, and other noteworthy folks.

The smartest advice I ever got - Stocks build wealth - with no work (1) - CNNMoney.com

Like what you've read here? Subscribe to Money Hacks by Email.

The economy stinks. If you own stocks, you wish you didn't. Money doesn't stretch as far as it used to. A gallon of gas is over $4, gold is at $1000, and oil is at $150.



WaMu (WM) has lost 92 percent of its value. IndyMac was taken over by the FDIC. Freddie Mac and Fannie Mae have all but been taken under receivership by the federal government.

Layoffs are only going to get worse. More banks will fail. You may lose your livelihood.

I hope you've been paying attention.

You have an emergency fund. You have cash in the bank. Are you concerned that your cash will vanish, just like the equity in your home and in your stock portfolio?



DON'T.



That's right. Don't. I'll say it again, to make it crystal clear:

DO NOT WORRY ABOUT ANY CASH YOU HAVE IN A BANK

Why not, you ask? Because if you have $100,000 or less in a given institution that is FDIC-insured, your money is guaranteed.



Don't make matters worse by trying to pull your money out of your bank. Putting your money under your mattress makes no sense at all!!!



I repeat: Do not exacerbate the situation by withdrawing your money from your bank.



The Great Depression turned from a bad day in the stock market to a total economic meltdown partly because there was a run on the banks. The federal government made the situation even worse by not providing the liquidity the market needed. In fact, it tightened credit.



Right now, if the government had to, it would turn on the (figurative) printing presses. Money creation is not a problem, and it is my belief that the Fed, the controllers of the supply of money, will create the money necessary to keep us out of a depression.



The Federal Reserve may say it's concerned about inflation, but it's deathly fearful of the opposite possibility, a deflation. One only needs to compare the 1930s to the 1970s to determine which is worse.

I even think that there's a possibility that the worst is over. But it may take a year or two of economic doldrums to see an upturn; in short, we may be in this current situation for a couple of years. I don't think this will be a prolonged downturn (i.e., Great Depression).

However, it will be painful. It's time to tighten the belt and go on a diet, literally and figuratively. Cut out all unnecessary spending: Movies, soda, magazine subscriptions. Put some money in the bank. If you have a home equity line of credit, I'd suggest pulling out enough to keep yourself awash in cash for 6 months. The interest you pay will be trivial, especially if you lose your income.

Get rid of junk. Sell what you no longer need. Downsize. Clear clutter. Simplify.

Work on earning extra money.

Earn more than you spend.

Prepare your own meals. Buy local. Buy 87 octane gas. Drive sparingly. Shop at secondhand stores. 

Reduce. Reuse. Recycle.

If you don't absolutely need it, don't buy it.

I'm dead serious about all of this. The banks will be fine as long as people don't turn into a mob. You will be fine if you've prepared for this.

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This is a great article, food for thought, about passive income.

The 8 Levels Of Income | Amateur Asset Allocator

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Welcome Stepcase Lifehack readers! I'm flattered that Money Hacks has been featured as one of 80 How-To Sites Worth Bookmarking; in fact, it was in the top 10 for "Hack Your Wallet and What’s In It" -- amongst such esteemed sites as

• Frugal Hacks 
• WiseBread 
• Get Rich Slowly 
• The Simple Dollar 

and -- GET THIS --

• The Motley Fool

Wow, I'm terribly flattered to be included in the same breath as any one of these sites!

This is an excellent list, too, not just because my humble site is mentioned, but because it's chock-full of great sites about all sorts of topics.

It may behoove you to open every single one of the 80 links and not only bookmark them, but add their RSS feeds to whatever feedreader you use (check out Google Reader, a free Google product).

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Here's a transcription of an interview with T. Boone Pickens on wind energy. He's going to build the biggest wind farm on the planet and it will serve 1.3 million homes, or about the equivalent of 2 nuclear power plants.

All this on a mere 200,000 acres at a cost of $12 Billion...

Will wind power save the planet? No, not by itself, in my humble opinion. But in combination with a lot of other energy-producing technologies, it can help. Our reliance on the dinosaur juice (oil, or fossil fuel) is driving all of us crazy and to the poor house. Plus, in a sick and demented fashion, we're financing global terrorism (again, IMHO).

Couple wind, solar, clean coal (is there really such a thing?), nuclear power, and conservation, and we'll be able to kick our addiction to the light, sweet crude.

Is this wind-power thing crazy or is Pickens crazy like a really super-smart fox? He's also trying to become the world's largest supplier of another scarce resource (not that wind is scarce, but his other business is oil), water.

Seeing a trend here? The way this man makes money is by using scarce resources like oil and water, and their substitutes, wind and sun (yes, he's going to build a solar farm, too).

If only I could become a monopolist in air.

Living on Earth: Don't Mess with Texas Wind

Technorati Tags: wind farm | oil | solar farm | T. Boone Pickens | water | scarce natural resource

I thought I'd tell you the books I'm reading. What people read tells you a lot about them: Their preferences, interests, hobbies, fantasies.

I tend to read several books at a time. This keeps me interested but it can confuse me :)

One book I'm reading now is Thomas Friedman's Longitudes and Attitudes. It's a book that chronicles the events leading up to 9/11 and Iraq. But it's not just about politics and war. It's about the globalization (read: economics) that has occurred since the Cold War ended and how it has affected the global playing field. Rather than nation-states dictating how the world works, it's more about how the web created by globalization has empowered individuals and large markets.

Friedman sure knows how to turn a phrase. He's very good at getting complex points across. I've watched him on TV and enjoy him. This is my first read of any of his books.

Another book I'm reading, kind of peacemeal, is The Tom Peters Seminar, which is Peter's attempt at capturing the content, flavor, and enthusiasm of one of his seminars. There's a whole lot of information to chew on here. This book is a little long in the tooth, though, having been written in 1994. Some of the companies he highlights for revolutionary change didn't make out so well in the 2000s.

Nevertheless, the gist of the book, if I had to boil it down into one phrase or sentence, is that the new economy is about YOU, Inc. Become used to having multiple jobs and no security. Become an expert and become a free agent.

Finally, the third book I'm reading right now is not really a book, in that it's a guide on the web, called The Action Guide. It's about building a business on the web. I'm using it to build two new sites (in very early development) that I hope to publish this year. The idea behind the Action Guide is that each step of the business you're building is broken into easily-digestible and actionable chunks. During each step, you build upon what you learned in the previous chunks.

I want to build valuable web properties (hopefully, this is one of them!) and I think this process will help me get there. Take a look at the testimonials. They are what ultimately sold me.

What's to come? Well, I like re-reading books I've read. It's fun to compare what the author thought might happen with reality. So I think I may re-read The Only Investment Guide You'll Ever Need by Andrew Tobias and Jim Cramer's Mad Money for Life.

I've mentioned that I'd review those books in the near-future. As sometimes happens in life, the near-future is turning into "next year." One day, I'll get to these reviews.

I don't want to be like the rest of the Personal Finance bloggers who do reviews -- they do an excellent job and they (and you!) know who they are. I want to bring my particular viewpoints and opinions to the discussion; I just haven't made the time to do it yet.


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Technorati Tags: Jim Cramer | Mad Money | Andrew Tobias | The Only Investment Guide You'll Ever Need | Site Build It | Tom Peters | Tom Friedman

When I was a kid, Lenny Dykstra was a baseball phenom. Small, but he could hit like hell and he fielded with reckless abandon. I liked him a lot. Always with that big ole cheek full of chewing tobacco, he epitomized the over-achiever. Turns out, he's great in business, too.

Brash. Opinionated. Smart. Caring. Those are the words that came to mind when I read this story: The Sporting Scene: Nails Never Fails: Reporting & Essays: The New Yorker.

He's now trying to give back. His biggest endeavor at the moment is creating the Players Club magazine. In it, he hopes to guide athletes down the path of continued riches, rather than down the path many of them seem to take, like Evander Holyfield and Mike Tyson.

Even giving back, Dykstra is abrasive. But it works. Tough love? You be the judge. Speaking of pro athletes:

"You’ve got the ten per cent who are going to find their way no matter what,” Dykstra said of the athlete population. “And you get the ten per cent that are f---heads no matter what—we’ll paste an ‘L’ to ’em.” The rest need guidance, and Dykstra, who will write a regular column called “The Game of Life,” is prepared to give it. “This will be the world’s best magazine,” he said.

Give 'em hell, Lenny!

Technorati Tags: Lenny Dykstra | Players Club magazine | pro athletes
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Chief Family Officer submitted a post about children and employment rules, which is something we tend to forget about.

When I was a kid, my parents did not push me to get a job. Rather, they encouraged me to do well in school, and they never told me not to work. So, of course, like many of my peers, I got a job.

Since I was good at math, I was a natural for the football concession stand (run by my math teacher). I think I made $3.35 per hour, which was California's minimum wage at the time. It's strange how much money I had then; I felt rich. Now, making a lot more per hour, I feel adequate.

Kids should not feel compelled to go to work when they're young; I think this is why I took to hard work at an early age. There wasn't any pressure. Sometimes that's better than anything else.

Years later, I was on the employing end of the equation, where I was hiring and mentoring 16 and 17 year olds. It became imminently important to follow the rules of the state and school; break one and you could seriously imperil your ability to stay open!

As CFO points out, the federal government has some good resources to help out the aspiring teen worker and employer alike. One of the best sources is Youth Rules.

It is in your best interest to get to know these.

Chief Family Officer: Do your kids want to work this summer?

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Technorati Tags: Kids and Money | Earn | labor laws | teenage employees

It used to be that those who could afford to go to college did, and those who didn't have the funds didn't. But the prevalence of student loans has made that a moot point. Now, the question is, "How can you afford NOT to go to college?"

Still, attending college is expensive. Tuition, books, and room and boarding are the big 3. Attending even a public university can cost well over $10,000 a year because rent and food is expensive.

Uncle Leo Rumbles presents the case of borrowing less to pay for college. Rather than going to an Ivy League school and incurring massive amounts of student loan debt, he suggests that you consider a public university (I offer one better: Community college for the first 2 years). You'll come out with less than half the debt and you'll be positioned just as well in the job market. He says,

There isn't much of a relationship between the college or university a person attends and that person's career success later in life. How hard and effectively you work is much more important to your career success than the sheepskin hanging on your office wall. A CEO of an S&P 500 company is much more likely to have a college degree from a public university than an elite private college. One public school, the University of Wisconsin at Madison, can count as many or more S&P 500 CEOs among its alumni as any Ivy League or other elite private college. And it's quite a bit less expensive, even if you're paying out of state tuition.

This is so true. Getting a college degree shows that you have the mental fortitude to set a goal and strive to reach it. It's less about where you go.

This is a very good article with lots of helpful suggestions.

Uncle Leo Rumbles: Borrow Less to Pay for College

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Technorati Tags: college | university | student loan | debt | tuition | books | room and board

Ken Clark, CFP, tells us about the Annual Gift Exclusion and how it affects taxable income (it doesn't) and estate taxes (it does) in Rules for the Annual Gift Exclusion for Parents and Grandparents. Most people don't know the rules about gifting, say, an amount of money to your kids or grandkids. But it is rather simple. According to Ken,

Many people seem to think that if you give a certain amount of money to someone else, it is considered taxable income and must be reported. They also think that the annual gift tax exclusion is the amount you give that person that won’t be taxed. Both of these explanations are incorrect.

In fact, the gift exclusion is only applicable to the giving person's estate tax. That is to say that if you give more than the yearly exclusion allows (currently $12,000) to any one person in the form of a direct gift to that individual, your estate tax may be affected, but only if you have more than $2 million dollars in assets.

You could certainly give $12,000 to 100 people, and your estate taxes would be unaffected; but give more than that to one person, and your exemption (the $2 million) is reduced by the difference (i.e., if you give $15,000 to your grandchild, your estate tax exemption would be reduced by $3,000, or $15,000 minus $12,000).

However,

...Grandma can pay $50,000 in tuition directly to their grandchild’s school and it is completely outside of the gift and estate tax rules. Grandma’s $12,000 annual gift exclusion has not been used by this transaction. In fact, Grandma could still give $12,000 directly to the child.

These are all facts that I didn't know until I read Ken's article.

One caveat: 529 plans (college tuition savings/investment programs) are impacted by the gift tax exclusion:

If someone puts more than the annual gift limit into a Section 529 account, it may reduce his or her estate tax exemption. However, the IRS currently allows an exception in which someone can put five years worth of their annual gift exemption into a plan in one shot.

Also remember that a grandfather and grandmother can each give $12,000 to a grandchild and there are no ill effects on anyone's income or estate taxes; in short, grandma and grandpa could give Junior $24,000 in 2008 without any tax consequences whatsoever.

Great article.

Technorati Tags: estate planning | gift tax exclusion | CFP | Money Hacks | Kids & Money | blog carnival

In last week's Two for Tuesdays post, we talked about saving money on groceries and the Drug Store Game. Each topic surely has saved you some money already, if you tried either of them.

This week, we're talking freebies. So, let's get started.


#1

I got an email this morning from a person at Nature Made who gave me the following links for FREE 14-day supplies of various food supplements.

I've personally used Nature Made products and I can vouch for their efficacy, in general. I cannot speak to this new line, as, well, they're new, so I haven't had a chance to try them yet. But you can be sure I'll get my free sample(s).

Multivitamin: http://shortn.it/uT5t
Multivitamin for her: http://shortn.it/uTCu
Vitamin C: http://shortn.it/ykl8
Vitamin D: http://shortn.it/g7SV
Calcium: http://shortn.it/oaL7
Super B Complex: http://shortn.it/GvmG


#2

Everybody likes free, especially music. With the going rate of 99 cents per song, buying a lot of music on iTunes can really deplete your disposable income. It's also very difficult to find new, good music. Do you pay the buck for an unknown (oh, sure, you can listen to a 30-second clip) or do you not buy at all?

I have an extensive collection of LPs and CDs and finding good new music is hard to come by. There are two places, however, where you can get full songs from (sometimes) reputable artists or up-and-comers, for free. One place is iTunes.

Load up your iTunes software on Tuesday and find the free song. Apple also offers free videos.

But my new favorite, for 3 reasons that I'll explain shortly, is Amazon. Go here for this week's free songs. There are 8 songs there, free for the taking.

Here's why I really like Amazon's music downloads:

1. The files you download are mp3, a ubiquitous music file format that can play on any "iPod-like" device
2. The files, by their mp3 nature, are unencumbered by Digital Rights Management (DRM), which means that you can load them on multiple devices
3. The files are encoded at 256 kbps, rather than the somewhat "standard" 128 bitrate. This means bigger file sizes (not good, but in today's cheap media storage environment, it matters less) and better audio quality

That's it for this week. Stay tuned for next week's Two For Tuesdays, where I'll give you two more ideas on saving some of your hard-earned money.

Technorati Tags: FREE | Money Hacks | saving money | vitamins | food supplements | Two for Tuesdays

Silicon Valley Blogger, over at The Digerati Life, posted a piece entitled, "Free College Tuition To Soothe the Middle Class Pinch, that describes Stanford's decision to give "free" tuition to any student whose family makes less than $100,000 per year.

In this post, SVB points out the most salient points, one of which is the misconception that tuition is free to those students whose families earn less than $100,000. The "free tuition" is on a sliding scale, where those families making less than $55,000 get tuition at zero cost, and those that make just less than $100,000 pay $11,000 instead of the nearly $50,000 2008 tuition.

Another noteworthy point is that Ivy League schools like Princeton and Harvard are already doing this. This is a good thing; hopefully, this is becoming a trend, as we've fallen far behind our competitors in the global economy in terms of higher education and thus qualified scientists, engineers, and mathematicians.

A third point worth considering is that this program does apply only to those students who would earn entry into Stanford. That is to say, just because you make less than $100k, don't expect your child to be accepted at Stanford. He or she still has to be an elite student with tons of extracurricular activities and accomplishments under his or her belt. This is a crucial consideration.

The really great thing about this new policy directive is that it narrows the gap between those whose families can afford the cost of a private university and those who can "only afford" a public education.

In short, the so-called "middle class" gets a break on private university tuition, but only to those middle class students who are the cream of the crop.

Reliance on student loan debt should decline a bit, since many middle class families currently are expected to pay the full tuition cost to private (and public) schools. Not a lot of middle class families can afford $200,000 to $300,000 (without mortgaging their house, which helped exacerbate the Mortgage Meltdown). While many students qualify for other assistance, often the "easy" route of students loans is taken, putting onerous burdens on the student and family for years to come.

Thanks, Silicon Valley Blogger, for this enlightening post. Stay tuned for tomorrow's "Best of Kids & Money."

Technorati Tags: Kids & Money | Silicon Valley Blogger | The Digerati Life | Stanford | free college tuition | blog carnival