Mega Millions, Just another Tax

One of the articles on the front page of our local paper today was "Mega jackpot: Area residents lining up for chance to win". The jackpot is up to $330 million. That's a lot of money and people line up to buy tickets for a chance to be a millionaire.

Did you know that your odds of having the winning ticket is One in 175,711,536. Did you know a person who plays the lottery on a regular basis spends on average $30 per week. Let's see, $30 per week x 52 weeks a year = $1,560 with little if any winnings. (Looks a lot like a tax to me. . . )

How about this instead of purchasing tickets. $30 per week invested in a Roth IRA earning 10% from age 20 to age 65 (45 years) equals $1,233,641 TAX FREE every time.

This sure beats odds of 1 in 175million. So this weekend, skip the Mega Millions ticket line and open up a Roth IRA.

Do you have a Cash Flow Plan?

Well? What's your plan? One of the most valuable things I've learned in leading Financial Peace University is this: If you don't tell your money where to go, it will leave all by itself. Hang with me and I'll explain.

Before I had a paycheck by paycheck cash flow plan when I had money in my checkbook a day or two before I got paid, that money left. I found something to spend it on. I said, "Hey, I get paid tomorrow so what can I buy? This money's not doing any good just sitting in my checkbook." Have you been there?

Now with my cash flow plan, every dollar is "spent" on paper before I actually get paid. I even have a "blow" category in my cash flow plan. We all blow money and that's ok. Just plan for it.

So why do a cash flow plan before each paycheck?

1. You avoid managing finances by crisis.
2. Managed money goes farther. ( I don't know why but it does.)
3. It reduces money fights in your relationships.

Three great reasons to me. Try it. If it doesn't work, you can always go back to the way your doing it now.

History and a Bike Ride on a Sunday Afternoon

Today was a great day. Worship was wonderful as always. NewPointe is a great place to worship God. Cindy and I hade some old friends check out services today. It was nice to see Greg and Sandy. Worship is always a little extra special when you personally know people are here for the first time.

Sunday afternoons this time of year for me include bike rides. That bicycle rides. I'm now pushing close to 1,600 miles for the year. Today our route started from Gnadenhutten. Gnadenhutten was the settled in the late 1700's Ninty-six christian Indians were massicured there in 1782.

We left from Gnadenthutten and headed out on hill after hill until we reached Peoli. Peoli is where baseballs greatest player of all time is burried. Cy Young. It was cool to ride by his grave. I'm sure most people didn't know that he is burried right here in Tuscarawas County. Now you do.

To Rollover or To Role Into?

My mom has come to me for some financial advice. She currently works at a local bank and do to an acquisition, her bank is now a different bank.

With the ownership change of the bank, comes stacks and stacks of paperwork and choices for her and her fellow employees. One critical choice is what to do with her 401k from the now non-existing bank. Of course the acquiring bank wants all the employees to roll their 401k dollars into the new banks plan. I told my mom that's a bad idea. Here's my opinion why.

Anytime you have the opportunity to roll retirement dollars out of an old employers retirement plan into your own self directed "rollover" IRA you need to do it. The biggest reason why is fund choices. Instead of being stuck selecting from a limited number of mutual funds the new employer is offering, with your own "rollover" IRA you have access to every fund, stock, and then some in the market.

In my mom's case, I'll be helping her open a "rollover" IRA this weekend with Vanguard. I'll place 100% of her money into their Target Retirement 2015 fund. There are a couple of reasons I picked this fund family and this fund for her.

1. Vanguard has very low fees
2. Vanguard has been around a long time
3. Their target retirement funds are simple and somewhat conservative. (That's real good for my parents.)
4. This fund is diversified and it changes it's allocation of holding (Stocks /Bonds/Cash) over time.
   

I'll talk more about Target Retirement Funds if anyone has a desire for me to do so. Just post a comment.

Where to put your 401K money?

I get asked all the time, "What funds should I pick for my 401K?". Before I give my answer, I ask a few questions.

1. Are you at least putting into/having withheld from your paycheck an amount that gets you 100% of the company match? If not you should be.
   
2. Do you have consumer debt? If you do, don't contribute more than what your company will match. You must get out of debt.
   
3. When was the last time you reviewed your retirement plan beneficiaries?
   

With answers to these 3 questions, I don't give "financial advise" I can only tell you what I do and my what your hearing from me is free. So here it is.

Diversification - To spread around. As the saying goes, money is like manure, spread it around and it helps things grow. Leave it in one pile and it stinks.

Most people will do well to pick / spread their retirement fund choices between 4 - 5 classes of mutual funds. I currently have 5 classes.

• Large Cap
• Small Cap
• Foreign
• S&P 500 index
• Growth & Income
  

I came across a free asset allocator calculator from cnn money that may help you pick your categories. The answers I gave returned this asset allocation. Not that far off my my current mix.



The most important thing is to get started and stick with it over a long period of time.

Who's in control

In my conversations and readings here of late, the topic of email has been coming up over and over again. The more I engage in conversations about email, I keep recalling my high school science class when we talked about Pavlov's dogs. (Pavlov was the Russian scientist who conditioned dogs to salivate when a bell rang.)

I get the feeling that's what most people do when they are working on their computer and that "dig" sounds letting them know a new email has just arrived. Most people then can't resist. They stop what they are doing and read the email. (Email is in control.)

I no longer "Pavlov" to the ding. I've turned it off. I'm going one step farther and am about to set-up an auto email response letting people know that I'll only be checking my email twice a day. 10 a.m. - 2 p.m. (I'm back in control)

Here's what my auto response is going to say:

Thanks for emailing me today. I have scheduled the hours of 10 a.m. and 2 p.m. to review and respond to my email. If you need to reach me before those times, please call me at 330-365-xxxx.

Thanks.

What do you think? Good idea or bad?

Goal Reached!

I've reached, surpassed another goal. I'm very excited about reaching this goal so soon in the year. Ok, here it is, and it's a big one for me.

I've exceeded my 1,500 miles goal for 2007. (That is miles pedaled)

See, the bottom number on my bike computer is showing 1,504.4 miles as of today. (Don't tell my wife that the 43.7 number was my max speed on Kinsey Valley's downhill. She doesn't like when I got that fast on my bike. Maybe it has something to do with my bike tires being less than one inch wide.) This is a story for another time.

I've set a new goal of 2,000 miles before the year is over. Will I get it? Who knows but the important thing is I've got goals.


I love the line by Zig Zigler, "If you aim at nothing you'll hit it every time." His statement has motivates me. I've come to realize that reaching the goal you set is never as important as who you are becoming as you move toward the goal. When you set a goal you have to push yourself to reach it. If your not pushing then your goal wasn't "stretching" enough for you. If you really want to reach a goal, tell a few friends what it is and ask them to hold you accountable.

Setting goals for me also helps me to stay focused on what I value. It allows me to say no to some good things and some not so good things without feeling guilty when say no.

If you're looking for a simple goal to get started, here's a good one, read a non-fiction book in the next 30 days. Go visit the library. There's lots of books to choose from and it won't cost you a dine. I just checked out "The Power Years" by Ken Dychtwald.

Is winter here yet?

Ok, I'm not wishing for or wanting winter to come but it will be here sooner than I'd like. With this thought in mind, I started searching for a good rate on natural gas. This is how we and most people heat their homes.

Now is a great time to shop and lock-in natural gas prices for the upcoming winter. If your living in Ohio, here's the best place to start doing your research. The PUCO of Ohio has an "Apples to Apples" comparison of gas suppliers.

I took this directly from the web site.

The PUCO produces the Apples to Apples charts to provide consumers with a snapshot comparison of current natural gas and electric supplier price options and contract terms. The PUCO updates the Apples to Apples charts on a regular basis and verifies each supplier offer to ensure accuracy. The charts list only the certified suppliers that are actively enrolling new customers. As with all contracts, consumers should carefully read and understand all terms and conditions before signing any forms or agreeing to enroll with a supplier for natural gas service.

After I did my research, I signed up with Lakeshore Energy Services. They had and have the lowest rate per mcf @ $9.117

How best to pay down your debt?

There's more than one way to attack your debt. The first step in this is stop borrowing money.

When your ready to get serious about becoming debt free, you need some tools to help you get there. I'm a big fan of Dave Ransey's debt snowball concept. It's the system I used to become debt free.

Just the other day, I came across a new online service, www.debtlogistics.com. This site analyzes your debt and suggests ways to pay it off most efficiently. There's lots of good stuff here for free. You can get a personalized plan for $30. My suggestion is check out the free stuff then head over to Dave Ramsey's site.

One of the happiest days of your life will be the day your can proudly say, "I'm debt Free"

Free Financial Advise - Complements of Kiplingers

As I've stated in the past, I'm a fan of Kiplinger's Personal Finance Magazine. Here's another reason why. On August 17th and again on the 3oth, Kiplinger's along with the National Association of Personal Financial Advisors (NAPFA) will answer your finance and retirement questions for free. Hey, these fee only advisers normally charge clients $100 to $250 an hour.

On the 17th and 30th you won't pay a dime. So, get your financial and or retirement questions ready and call 888-919-2345 and a NAPFA adviser will respond to your question. You can also email them a question @ jumpstart@kiplinger.com

Everyone has at least one retirement question you've been dieing to ask. Why not ask and expert for free?

Here's a link to Kiplinger's Jumpstart article.

I'm off to phase my question.

In the lead. . .

As you may recall, our staff here at NewPointe are participating in a wellness program. We are currently tracking our walking with pedometers. Today at all staff, we received certificates for the miles we have walked through the first three weeks.

I'm very proud to say that I'm in the lead. I've walked 238 miles so far. Way cool.

How about you? What do you do to keep your body in shape? I truly believe that there is a spiritual side of exercise and eating right. So get yourself an accountability partner for fitness. It can lead to all sorts of good stuff. For example, yesterday during my 35 mile bike ride, a new rider asked me, "So, what's your testimony?" I spent the next 5 miles talking with him about my relationship with Jesus Christ. Way cool.

As we finished the ride, I told him on our next ride, I wanted to hear his story. (That will be Tuesday.)

Purchase price X 2

While doing some work tonight, I had the national news on tv. I stopped working when the news anchor was doing some shopping and comparing shopping with credit cards vrs. shopping with cash. (I didn't catch all the details of their test.)

I did catch the results. Here's what NBC news found, people were willing to pay twice as much for the same item when they paid for it via credit card vrs cash. That's unbelievable to me.

This may the best reason not to use credit cards for those who tell me "I always pay mine off when the bill comes." That may be so but NBC's news test says you're willing to spend twice as much.

Wesabe - led to online discounts

I just signed up for my free Wesabe account. (See my last post to see what Wesabe is.) Right after is signed up it took me to an Account page and there was a tip from another user that we all can use.

Checkout currentcodes.com when shopping online to get that checkout discount. Here's what Debbie P inside of Wesabe said.

During checkout, most online stores have a "Discount code" or "Promotional code" box. Before you complete your purchase, check www.currentcodes.com to see if you can save some money by filling in that box. The site maintains a database of active codes to save at online stores and lets you search by store name. They have lots of biggies like Amazon.com, gap.com, car rental sites, etc. It's pretty hit or miss... some of the deals are on really specific items, but you sometimes find a flat "15% off" or "free shipping" code that saves you $ and makes you feel in the know.

Here are a few more sites to check out.

www.slickdeals.net

www.fatwallet.com

www.dealcatcher.com

Have fun with them, I'm going back to my Wesabe set-up.

Financial Tips / Advise . . . . WESABE

Today was the first day to sign-up for our next Financial Peace University class. I was very pleased with the response today. I'm looking forward to next Sunday's final day of sign-ups. After that, I'll order material.

With FPU just around the corner, I'll be doing lots of personal financial posts over the next quarter. Hopefully you'll learn something new and even more importantly, put something new into practice.

In reading my Kiplinger's magazine today, I came across a small article entitled "Budgets made Simple". In the article it talked about several softwares that help you track your spending. Kiplinger's picked Wesabe as their favorite "FREE" site.

According to Kiplinger's, the site provides excellent security and it doesn't ask you for your account passwords. (This is a must for me!). Once your up and running, Wesabe lets you tap into the insights of more than 30,000 users..

I'm off to set-up my own Wesabe account. I'll report back soon.

Money Slang. . .

I've always wondered where the different terms for money come from. So the other night I started doing some Google searching. Here's what I came up with.

Bacon - In the middle ages, among the British, having this food in the house was considered a sign of prosperity. 'Bringing home the bacon' was the new slang when games of catching a greased pig at county fairs took effect.

Buck(s) - This became popular in the mid 1850's. It was an abbreviation for buckskin, a unit of exchange in the west.

Bread / Dough - A main staple in numerous peoples lives and has been equated with cash for centuries.

Moolah - mill, from le moulin - This word may be the origin of the English slang meaning of "moolah" as "money", as mills are even today equated with income in the Northwest.

Cash on the Barrel - The barrels used as informal counters in old-time general stores or to merchants refusing to hand over a barrel containing goods until it had been paid for.

Greenback - A nickname originally applied in the 19th century because of the color of paper money.

Smackers - This referred to the sound the clamshells made on the string. It was also heard in the 1920's and referred to the sound when coins weresmacked down on a counter.

Do you know of any other slang words for money? If so, I'd like to know.

Employer to Fine Unhealthy Workers

I've talk with lots of business owners on a consistent basis. One of the recurring issues for them and for us here at the church is the rising cost of health insurance. More and more businesses are looking at creative ways to get their employees healthy in hopes their yearly insurance premiums increases will drop below double digits.

My good friend Dr. Kindra Browning sent me an article from Workforce Management. The article covered a company in Indianapolis that's going to start fining employees with unhealthy habits.

Here's the deal. The following numbers carry a $5 per pay fine that is deducted automatically from an employees paycheck.

1. Body mass index over 29.9
2. Blood pressure over 140/90
3. Blood glucose over 120
4. LDL (Bad) cholesterol over 130

I'm very interested to see how this plays out over time. Will more companies follow suite? Will employees not work for this company? Will this really effect their health insurance premiums? Would you work for a company that has policy like this?

It's time. . . . . . Sign ups for Financial Peace begin Sunday

It's that time again. Time to sign up for this fall's Financial Peace University class here at NewPointe. I'm very excited as lives are changed and marriages saved with each class offered here.

Here's the scoop on this round of classes.

1. For the first time, we are limiting the class size to 30 people. (So don't delay in signing up.)
2. Classes begin Tuesday August 21st @ 7 p.m. here at the church.
3. Sign-up's start this Sunday at the church. Look for the FPU sign in the main Atrium.

To get a great feel for what the class is all about, watch this short FPU video. I get goose bumps every time I watch it.

Without a doubt, this is one of the best investments you could ever make.