How much oil is in a barrel?

Well, did you ever wonder how much oil is in a barrel? You know the news is tell us daily how much a barrel of oil costs. As I type this, oil is down $2.54 a barrel to $122.19. (This did wonders for the stock market today it's up 264 points. But that's another story.)

I grew up in the coal business and we always had 55 gallon drums of oil around. So, I assumed a barrel of oil was 55 gallons. NOT. I came to find out that a barrel of is 42 gallons.

We'll the question that follows that is how many gallons of gasoline come from one barrel of oil? The answer is roughly 20 gallons.

So, now you know and you can impress your friends with this new found information.

Is your Mutual Fund on the Lemon List?

How often do you look at the mutual funds you own? Don't forget the mutual funds that are in your companies retirement plan.

I came across a cool tool called the Mutual Fund Lemon List. Here's what this web site has to say about itself. This list has been around for 10 years now. Who knew?

The new "Mutual Fund Lemon List" shows you which mutual funds are costing investors money, plain and simple. Included are those funds that have underperformed their one-, three-, and five-year benchmarks.

How many funds are we talking about here? The total number of funds that made the Lemon List last quarter: 2,000+! The total assets in these funds: $1,000,000,000!

That's not a misprint. $1 trillion is currently languishing in these underperforming mutual funds. And I'd be willing to bet that you have at least some assets committed to these funds.

If you have a fund on this list. It's time to dump the fund.

The Debt Trap

Cruising the net this weekend, I came across a great money series in the New York Times called "The Debt Trap." It's a series on consumer debt and the lenders that make this possible.

There are videos, tools and calculators that show you where your debt stacks up to the rest of America. The series starts off with a video of how Diane McLeod accumulated $280,000 in debt. I found it heartbreaking that people end up here.

You've got to get educated on how to handle your finances. Stop and ask yourself, who and where did you learn about money? . . . . . Times up. If you are like most people, you can't really point to a time and place in your life where educated about finances.

Here's a fantastic resources for you. The Total Money Makeover by Dave Ramsey. If you don't want to purchase it, then go to your local library. No matter where you are in your financial life, this book has something for you.

Roll it over

One of our new hires here at NewPointe asked me a great question today. " What do I do with the money I have in my old employers 401K plan?"

I love this question. This is an opportunity for freedom / great choice. Let me state the best action to take is to roll your money out of your old employers plan. Never take the money out.

Roll your old 401K into a self directed IRA not your new employers plan. The biggest reason for this is freedom in choosing your investment funds. Your not limited to the choices in your new employers plan. Notice I said "funds" not individual stocks. We are talking your retirement nest egg here and individual stocks carry way, way to much risk.

When people come to me for investment advise, I recommend two funds for them to research. I like Vanguards life cycle funds and I love the Sound Mind Investing Fund. (Do your own research before purchasing any investment.)

The way to get started with rolling your old 401K money over is to first open a new "IRA Rollover" account with an broker (I prefer online brokers), or the mutual fund company directly.

Was it time?

The short answer is no. And now the rest of the story. . .

Cindy and I arrived 15 minutes before the doors opened. We had to stand outside in the 90 degree heat with a couple of hundred other bargain hunters waiting and hoping for a good deal. The doors opened promptly at noon and the race was on.

At first it felt like cows moving into a barn to be milked then once everyone was in the warehouse, it felt like chickens running around. What can I say about the animal metaphors, we were in Amish Country.

Anyway, Cindy did spot one couch she liked. Unfortunately by the time we weaved our way though the people and ran over 2 older folks, someone beat us to the couch. The lady was sitting on the couch shooing would be purchasers away and waiving for a sales person to come take her money. I thought to myself, oh well it wasn't the couch for us.

Until the "right" couch comes along, I'll keep saving. Little did I know how much a couch could cost.

Is it time?

There's lots of unwritten rules in a marriage. One of those rules in our house seems to be that the inside of the house stuff my wife takes the lead on and the outside of the house stuff I take the lead on. As such, some months back my wife said we need to start saving to replace our living room furniture. Cindy pointed out our couch is older than our 12yr old daughter and my son using it as a bed hasn't helped. My first though was so? (I didn't say it out loud but I was thinking it.) Being a good husband I said Ok.

Fast forward to today. We've got $1,100 now in our furniture fund and my wife reminded me Andreas Furniture is having their annual warehouse sale. So at 11:30 today I'll be standing in line in the 90 degree heat waiting for the doors to open at noon. I'm always on the lookout for a good deal and their warehouse sale is a good deal.

Here are some important facts/things about this process.

1. We agreed on the major purchase (In our house a major purchase is anything over $100)
2. We saved up and are going to pay CASH.
3. Our furniture fund is not part of our emergency fund.
4. We are going together to make the major purchase. This will keep us balanced. We won't spend more than we should.
5. This process strengthens our marriage.
   

Life change continues. . . .

Three cheers for our current Financial Peace University Class. In this weeks lesson, we covered dumping debt. This is one of my favorite lessons. Dave Ramsey spells out 15 debt myths.

Here are my top three myths from this lesson:

1. You'll always have a car payment. I'm living proof that you can save up and pay cash for a car. It really is doable.
2. If I loan money to a friend or relative, I'll be helping them out. (No way) If you do this, you just changed your relationship to master / servant.
3. I can get a good deal on that zero percent interest new car loan. Fact is, that new car goes down 70% in value in the first 4 year and that so called zero percent interest rate is built into the price of the car.

Well, these three debt myths along with the other 12, lead to the destruction of 7 credit cards from this FPU class. These cards are not part of my 200+ destroyed credit cards sitting in my office.

To quote Dave Ramsey, "Debt is Dumb".

In the lead. . . .

As some of you know, I'm riding my bicycle 300+ miles over 4 days in August in the PAN Ohio Hope Ride. This ride is to raise funds to the two Hope lodges in Ohio. (Cleveland & Cincinnati) These facilities provide free, supportive lodging to of cancer patients and caregivers who have to travel for treatment. They have helped more than 15,000 cancer patients and caregivers avoid millions in hotel bills and travel expenses.

I've very proud to announce that my team "Heals on Wheels" is in the lead as far as dollars raised thus far. To date, our team has raised $4,700 of which I have personally raised $625 as of this post. Anita B was my last donor. Thanks Anita!

My personal goal is $1,000. I'd greatly appreciate your help in reaching my goal for a great cause. If you can help, click here.

Coupons.com

Looking to save some money at the grocery? I always am. Here's a web site that I like a lot.

Coupons.com is basically like going through one of those Sunday newspaper flyers online, except you just mark the ones you want and at the end you click on a “print” button and the ones you selected pop right out of your printer. Very cool.

I'd suggest making out your grocery list before visiting the web site. That way you don't buy things you were not planning on purchasing in the first place.

Stay Encouraged - Investment are on sale

Well, the first 6 months of 2008 are in the books. Usually, the end of a quarter is an exciting time for me. I like to reallocate my investment choices inside my retirement plans. (What, you don't do this? You should, at a minimum of once a year.)

At first, I wasn't very excited at this quarter end. Most of my retirement account balances are less than what they were at 12/31/2007 and that's even after I've put money into my retirement accounts over the last 6 months.

While walking my dogs tonight, that's my thinking time, I remembered that since the value of my mutual funds is currently lower than it was 6 months ago, every time in put money into these funds, I get more shares for the same dollars invested. That's a good thing.

Here's an example. Let's say I have $200 a month coming out of my paycheck for my retirement plan.

5/1/08 per share value of my mutual fund: $10 @ $200 invested is 20 shares purchased.

6/1/08 per share value of my mutual fund: $7.50 @ @200 invested is 26.67 shares.

So, I got 6.67 more shares than I did a month ago with the same $200 invested. Cool.

Here's were perspective comes in. If I'm concentrating on the month-to-month value (from $10 a share down to $7.50) I'll get worried as the value of my investment when down. My focus is way to short. I need to be looking long term. 5, 10, 20 years from now. Long term, being able to purchase more shares now will have a greater payoff.

So, stay encouraged, keep investing. Steady plodding wins the race.

Great Rates for your savings dollars. 3.75% and up

I'm a big fan on online savings accounts. The interest rates far exceed what most local banks offer. Of late, even my two online banks rates are very low. Amtrustdirect is currently paying 2.5% and Emigrantdirect is paying 2.75%.

I'm pleased to let you know that the Free Methodist Foundation is paying 3.75% on their Flexible Certificate. Basically a flexible certificate is a savings account. You can get you money back in your hands within hours if you need it back that quick. The Foundations 1 year certificate is paying 4.25%. These are great rates in today environment.

One of the questions I get asked when I give the foundation props for their interest rate is, "Is it safe?". Yes. The foundation has been doing this for over 50 years and they have never defaulted on investment dollars.

So, put your money to work with the best interest rate available. Here's the foundations phone number if you've got questions for them. 800.325.8975