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The problem with personal finance

May 10, 2010May 7, 2010 by Punch Debt in the Face

There is a fundamental problem with personal finance that will forever limit its potential to interest our culture. PF is dorky, or at least that’s how most see it. Try walking up to that girl you have a crush on and tell her she’s got nice assets and see what happens. My guess is things wont work out in your favor.

Few people wake up every morning, excited to check their savings account balance. Or see how their Individual Retirement Accounts are performing. Or calculate how much of their credit card payment is going to interest instead of principle. Moral of the story mi amigos, finances aren’t sexy…yet.

Fortunately, there is a light at the end of the tunnel. PF is making a comeback. Well not exactly, but the crappy economy has definitely helped spark some interest. Did you know the Dave Ramsey show is currently the 8th most popular radio show in the US? Regardless of how you feel about Dave’s teachings, it’s at least encouraging to know people are taking interest in getting some financial education.

Heck even the celebrities are doing their part to teach us a thing or two about money. Take for example Nicolas Cage. According to Forbes magazine, his income from July 08 to July 09 was $40 million. Cage can teach us all a fundamental financial principle, it’s not what you make, it’s what you spend. Even though Cage’s income is exceptionally high, he’s got over $9 million in bad debts and is facing bankruptcy. Thanks Nick for taking the time to teach us we can’t live outside of our means 🙂

While personal finance may not be the most titillating subject out there. I believe we (the financially less stupid) have a responsibility to make personal finance less boring. We have to come up with silly blog names to attract the younger crowd. We have to make ridiculous rap songs about our financial journeys. We have to draw silly cartoons that have nothing to do with finance. Basically, we have to repackage the boring personal finance we all know and dress it up, put it in a pair of high heels, some low rise jeans, and an Ed Hardy t-shirt. We have to make it attractive!

What ways have you discovered that make PF less boring? How do you get people interested in their money? If Jay-Z rapped about retirement, do you think the 20-something would jump on board?

Categories Financial Experiences, forward thinking Tags dave ramsey, education, savings account 7 Comments

Another blog post about Roth IRAs

March 17, 2021December 21, 2009 by Punch Debt in the Face

Muwahahaevillaughhahaha. For those of you that come here for my lame sense of humor, and not so much for the finances, prepare to be a little disappointed. I’m actually going to blog about money (well kind of) so bear with me. Do you know what a Roth IRA is? If you love finances, then you definitely do. If you don’t know anything about them, give me 5 seconds of your time to explain…

Roth IRA (noun)- an investment vehicle that will make young people filthy rich with minimal sacrifice.

Okay so now that you know what a Roth IRA is, I’m gonna share a little bit about my accounts. Last time I wrote about my Roth, I made the decision I was NOT going to max it out this year. I had $1,500 left (max contribution of $5,000) that I could have thrown at it, but decided not to for two reasons.

The first being that the markets were freakin’ me out in August. I was going to put that $1,500 in to an international mutual fund, but after a 33% gain from January to August, I was a little freaked out there was an artificial high. Stupid move on my part, as of Dec 18th, that mutual fund had gone up another 8% since. That’s a pretty awesome return considering my savings account is only paying 1.3%. I let fear determine my investing strategies, and for that I paid the price.

The second, and really the only reason, I decided to hold off on maxing out my Roth this year: I was gonna use that money to pay down my student loan instead. My loan’s interest rate at 7%, is pretty high (as far as student loans go), so I figured throwing the money there would be a good guaranteed rate of return. Like a good Ninja, I have paid down Sallie Mae $4,000 over the last four months. Although I missed the 8% growth in my mutual fund, I secured a 7% return by paying down my debt…not a bad trade off if you ask me.

Okay, so the plan was to only contribute $3,500 to my Roth this year, but guess what, SCREW THAT ‘ISH! My savings account is now $1,500 poorer. That’s right, I decided to max my Roth. I had a pretty stellar 2009, saving more money than I predicted I’d be able to, so I figured it was time to make that money work a little harder. I was 21 when I graduated college and made a commitment that I would max out my Roth every year. I can now proudly say, I have successfully done so for the last three.

I have contributed a total of $14,000 to my Roth over the years, and my current account balance is $13,500. That means I am only down $500. I started investing right before the stock market tanked, and watched my accounts plummet, but because I decided to stick to my goals and invest in a pretty scary market, I have been able to recoup virtually all that loss. I plan to be an old Ninja with a lot of money one day, and my Roth IRA is one of the best ways to make that happen.

If you are under 40 years old and haven’t thought about contributing to a Roth IRA, you NEED to explore the option. Even with two pretty crappy stock market crashes, my specific international mutual fund is up 5% over the last 10 years. There is no guarantee the market will continue to rise, but I couldn’t be called a Ninja if I wasn’t willing to take risks. It’s like Forest Gump once said “Life is like a box of mutual funds, ya never know what you’re gonna get'”. Wait, that’s not right.

Do you readers contribute to your Roth IRA’s every year? Do you let the “fear” of the market play in to your decision making? Is your account balance above or below the total contributions you’ve put in to it? If you’re from Canada, do you have a Roth IRA equivalent?

Categories Retirement Tags savings account, student loans 14 Comments

Monthly Expenses: October 2009

March 17, 2021November 22, 2009 by Punch Debt in the Face

October 2009 ExpensesWho wants to know how much money I spent last month? I do, I do!!! October was all sorts of interesting because I was on a business trip from Sept 18th to Oct 31st. The trip definitely altered my spending habits, but I think as you read through, things should make sense.

October 09 Expenses

My Income:

Salary: My take home pay from the day job. I’ve been waiting for October to come for a long time. It’s one of the two months I get an extra paycheck! It’s like an early X-mas present and it makes my heart happy every time I get it. I choose to budget myself on a two paycheck month, so this extra cash can be used for whatever the heck I decide.

Interest Inc: This measly $14.34 gain was from the pathetic interest my online savings account earns. Just this last weekend I switched to INGdirect. The interest rate is marginally better, but I’m glad to rid myself of Bank Of America….take that mega bank!

My Expenses:

Auto: My business trip was on an island no larger than the size of Barbara Streisand’s nose. I didn’t have a car so my total gas expenses for the month were an incredible $0. Booya!

Dining/Groceries: You’ll notice I didn’t include a dining or groceries related category this last month. Instead, I decided to add these expenses in my “travel” category. All of my meals and incidentals will be reimbursed, so like my gas, my food expense for October was a big fat ZERO!

Interest expense: You are all probably very familiar with my Sallie Mae loan by now. I only reduced it by $236.29 last month. This is my minimum obligation and since I was out of the country, I didn’t make the effort to throw down an extra payment. Don’t worry though, I’ve thrown another $1,500 at it this month.

Travel: All food and travel related expenses. I was forced to eat a lot of Burger King, Subway, and Pizza while on island. That is the bulk of the $308 expense. My stomach hates me for it, but I didn’t have a choice.

The other categories were too unimportant or self explanatory so that is why I didn’t cover them. The overall total at the bottom is the cash I had leftover after all my expenses. I had $3,610 left over. ABSOLUTELY INCREDIBLE! I put a good chunk of that towards my student loan and plumped up my savings account a good deal as well. October was one of my highest income producing months, and one of my lowest cost months. That, my friends, is a recipe for financial success!

* Are you wondering why I post the previous month’s expenses a couple weeks late? I use quicken to track my spending and I have to wait until the end of the billing cycle before I can download these transactions. I know I could manually add each expense as it comes, but I am entirely too lazy for that. Thanks for checking in and if you got any comments, tips, or advice I’d be more than happy to hear it. *

Categories Money Tags Budget, paycheck, sallie mae, savings account 5 Comments

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