Alltribes

How to Store Up Treasure in Heaven

For those of you new to Alltribes, I post on The Bible and Money every Sunday. Here's why. The following is an excerpt from .

How do I “store up treasure in heaven”?

“Do not store up for yourselves treasures upon earth...But store up for yourselves treasures in heaven.” (Matt 6:19-20) 

Much of this chapter has been quite philosophical and room remains for a few “down to earth” applications.  First, you must begin to be “transformed by the renewing of your mind.” (Rom. 12:1)  The follower of Christ must first change the way he views the world, his money, his work, and his Lord:

“Do not work for the food which perishes, but for the food which endures to eternal life, which the Son of Man will give to you.  Therefore they said to Him, ‘What shall we do, so that we may work the works of God?’  Jesus answered and said to them, ‘This is the work of God, that you believe in Him whom He has sent.” (John 6:27-29)

Our minds, patterns, and processes must be transformed to account for eternity.  Believe in Christ and believe in His words throughout the Bible.  Then, you are ready to “store up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in or steal.” (Matt 6:20)

How do Christians invest in heaven?  Much is said in the Bible of non-monetary things with heavenly rewards (good works for example, Eph. 6:8), but our purposes revolve only around the financial.  Perhaps a better question would be:  How do Christians invest in heaven financially?  In a word, giving.  A believer must begin to invest his money in more than himself.  Many of the commands Jesus issued that were to be motivated by heavenly reward had to do with giving:  “Sell your possessions and give to charity,” (Luke 12:33) “Go and sell your possessions and give to the poor,” (Matt. 19:21) “Whoever gives you a cup of water to drink,” (Mark 9:41) and “But when you give a reception, invite the poor, the crippled, the lame, the blind.” (Luke 14:13)  A follower of Christ who chooses to give money to the needy and the work of the Lord has a far greater return awaiting his soul than any portfolio, property, or business venture could offer.

Ultimately, our decisions should filter through the following paradigm:  Does this action, activity, or cause have eternal significance?  For example, would dollars going to save the rainforest or send missionaries to Africa have more “eternal” return on investment?  This is not to say it is wrong to give to non-eternal or non-Christian organizations; however, the primary concern of where a believer chooses to invest all the resources of his life, including his money, should be areas of eternal impact.  A Christian who invests in heaven understands the famous statement of missionary Jim Elliot:  “He is no fool who gives what he cannot keep to gain what he cannot lose.”

There is one important clarification to mention before wrapping things up.  A prudent and Biblically astute Christian recognizes that the message of this chapter pertains to sanctification not salvation.  We do not purchase our way into heaven.  Followers of Christ simply begin to emulate His life patterns of grace, eternity, and generosity as they are transformed by the Spirit. 

Top 10 Items You Probably Waste Money On

The following is an excerpt from , reprinted with permission from SHOO, Jimmy Choo!, © 2010 by Catey Hill, Sterling Publishing Co., Inc.

Top 10 items you probably waste money on:

1. Clothes. Where do I begin? Just because the DVF wrap dress was on sale does not mean that you could afford it. And you might not even be able to afford the on-sale Forever 21 dress you bought either.

2. Shoes and accessories. Why on earth did you need $400 red patent leather Mary Janes that match nothing in your closet? And for that matter, did you need to buy yourself starter diamond studs? The only thing those starter diamonds did for you is start your immense credit card debt.

3. Food. You read that the Perricone Prescription was the only way to lose weight. So you ditched all the bad foods in your cabinet and replaced them with salmon and veggies. Then, at 3 am on day 3 of your diet, you begged the greasy Chinese place to deliver you $40 of dumplings.  After that, your diet was shot, so you had to refill your entire fridge and pantry with food you would actually eat. Does this money-draining scenario sound familiar?

4. Alcohol. Girl, I’m sure this doesn’t need an explanation. You just paid to feel like crap the next morning. And you can’t even remember if the previous night was fun. You slept in your clothes, so you now have to pay to get them dry-cleaned. Need I go on?

5. Makeup. Now, I’m not saying you should go without, but I am saying that you do not need fifteen shades of designer lip-gloss. I mean, Fiery Midnight? Even Gisele couldn’t make that shade look good.

6. Beauty Treatments. Shaving was too annoying, so you got laser. You heard that the Intraceuticals facial keeps skin glowing, so you ran out and got one (then got pressured into buying all of their other products). Between the waxing, facials, laser, massages, manicures, and the gazillions of products bursting out of your medicine cabinet, your credit card has gotten quite a workout.

7. Your Hair. It all started many years ago when you were chasing Jennifer Aniston’s perfectly highlighted buttery blonde. Now you’re over that, but you’ve moved onto needing the gorgeous biscotti-almond of J Lo’s hair or the rich chestnut color that Rachael Bilson has been sporting. And so here you are, thousands of dollars later…

8. Cable TV. Because if you don’t watch The City, how will you be able to keep up with the gossip over lunch at work? And god forbid you don’t stay up-to-date with Dexter, because then what will you use as your conversation starter with the hot bartender? Ladies, will the latest scoop on Dex really land you the bartender?

9. The Gym. Now this doesn’t apply to those of you who go regularly, but to the rest of us who have to turn away when they pass the gym so they don’t pass out from the guilt of never going, it’s time to assess whether you really need that membership.

10. Gas. You love zipping around town in your little convertible, wind flying through your hair, a hottie by your side. Unfortunately, your bank account doesn’t share this enthusiasm (though the friendly men that run OPEC sure do).

Investments You Can Live With

CNN Money lists as follows:

• Prints and photographs
• Antique furniture
• Paintings and drawings
• Fine wine

As Money says, these probably won't do as well as other investment options, but they are certainly more fun to own. ;-)

Yes, they are more fun to own. But each of these requires some very specific knowledge or I think you could lose a bundle in a heartbeat. As such, I don't own anything like the items listed above.

That said, maybe some of you do. Anyone out there invest in any of these?

Alltribes March Money Madness, Round 1, Posts 21-24

Here we go with the first round of Alltribes March Money Madness (if you wonder what's going on in these posts, see my article announcing March Money Madness and/or click on my March Money Madness category link and scroll down to read all the posts involved in this subject.)

I've listed each "game" (one post versus another) in segments along with the wording provided by the author when the post was submitted. I've also listed a keyword after each post title to make it easy to vote (as a made-up example, you can just comment: Game 1 - Saving; Game 2 - Investing, etc.) Be sure to comment which one you like the best out of each set of two -- you will help determine the winner! Criteria for the best article is somewhat subjective, but you can use these factors as a guide: 1) practicality of the post 2) how interesting/provocative/unique it is, 3) the "personal-ness" of it and 4) its impact on net worth.

Here are today's games:

GAME 11

• (Traits) - You hear people wonder why they aren't as wealthy as someone they see.  Well I'll tell you, odds are they resemble a few of these 25 traits, that's why!  See if you resemble any of these traits of the Not So Well To Do.

VERSUS

• (Allowance) - One of my most popular posts, I talk about how you can approach kids and allowance. I share a solution that works for my family, as well as alternative ideas.

GAME 12

• (Statement) - Have you had trouble sticking to you financial goals? Use this strategy to get and maintain focus. Getting out of debt is hard. Write down your financial goals and go attack them.

VERSUS

• (Commandments) - A list of rules for using credit cards properly, covering those who don't have credit card debt, those with manageable debt, and people who are nearly overwhelmed by debt.  It's organized in the form of ten 'commandments', stressing what people in each situation must do to improve their credit card debt situation or to keep credit card debt from overwhelming them.

Three Common Questions about Getting Financially Naked

The following is an excerpt from .

When is it okay to bring up money with my mate? Is it okay to do it when we are just dating?

We believe the earlier the better. That said, our intention is NOT to cause your sweetie to freak out on a first date by bringing up the subject of the thousands of dollars of credit card or student loan debt that you (or McDreamy) are hoping to pay off. Our point is simply that once you can see yourself getting serious with your potential mate, we believe it’s time to start talking about money.

As to the exact timing, again, it really is up to the unique nature of your particular relationship. For instance, if you are wondering how your mate can afford the fancy Vegas vacations and high-priced meals on a teacher’s salary, it’s reasonable to bring up money early on. Or if you have some financial hiccups of your own, we believe it’s important to come clean earlier rather than later. We’ve heard of all too many seemingly promising relationships that end when, after an extended period of dating, one partner discovers the other is deep in debt. Typically, this issue is not so much the debt, as the fact that it was not discussed early on. When you start to Get Financially Naked, you’ll learn a lot about your financial compatibility simply by seeing how your honey responds to your bringing up the topic of money.

What if I know my partner is not receptive – or I find out during the conversation that my partner is not receptive – to talking about the topic of money?

Just because you get an initial cold shoulder doesn’t mean you two are doomed in the financial harmony department. Our recommendation is to tee up the conversation by talking about your views on money, and seeing if you can ease in with the Financial Foreplay questions from Chapter 3. The key is this: Don’t give up and be persistent. Your mate’s reluctance to discuss money could simply be a sign of painful, but resolvable, issues in their money history (recall the exercise you did in Chapter 2 about your money history and what you learned about yourself). A cold shoulder does not mean it is okay to just ignore the conversation about money. It means there are some underlying issues that, if explored, may actually bring you closer – emotionally and financially.

As you approach the topic of money with your honey, if your partner is reluctant to talk about money, you’ll want to be very sensitive to how you respond to anything that does bubble up. Money is a hot button for many people. When your partner does begin to open up, it is essential that you listen and be supportive to whatever is said. There will be plenty of time down the road to discuss areas of disagreement or places where compromise is needed.

My partner is wonderful, loving, and very generous toward me. However, I’m worried be cause the math just doesn’t seem to add up. When I look at what my mate does for a living, it doesn’t appear to be the type of career with the salary level necessary to pay for the kind of lifestyle my partner leads. How do I bring this up?

The harsh and sad truth is that literally millions of Americans, at all ranges of the income spectrum, live beyond their means. They bridge the gap between their income and their expenses by running up hefty balances on their credit cards or taking equity out of their home. If this is how your mate is funding his or her lifestyle, you owe it to each other and the integrity of your relationship to know about it. Maintaining a lifestyle beyond your reach using credit is not sustainable and typically ends up resulting in severe financial distress – not to mention the possibility of being hounded by bill collectors or ending up in foreclosure. One way or another you two will end up discussing your finances. Your goal is to do so before it torpedoes your relationship.

You know it’s time to Get Financially Naked when . . .

Here are some classic signs: Your partner wants to spend more and you are borrowing money from your family to support this lifestyle. You look at how your partner’s family lives and it doesn’t seem to add up, which may be a red flag that your partner has been trained to live beyond his or her means. You start wondering about your household financial facts and you encounter resistance. For example, your partner says everything will be okay and there’s no need to worry about it. There are many more signs, but here are three that indicate it’s time to make talking money with your mate a top priority.

Carnivals for the Week of Jan 25

For weekday updates of what I find to be some of the most interesting personal finance articles on the web, .

And before I get to this week's roundup, I wanted to say that I have two giveaways going on right now. They are:

• A copy of You Need a Budget 
• Access to Sound Mind Investing's website

Sign up using the links above if you'd like to win. And if you want access to winning a TON of prizes this year, sign up for my giveaway newsletter (February will give away $50 in a gift card, a box of personal finance books, and maybe more!).

And now, here are some of the carnivals Alltribes was in this week and my posts that were included:

• - Update on My Gold Coin Purchases 
• - Sound Mind Investing's Just-the-Basics Strategy (And Giveaway!)

Enjoy!

P.S. Carnival Hosts -- If my post is in your carnival in a given week, please send me the URL to the carnival and I will include it in my weekly roundup.

Make Yourself More Marketable in College

The following is a guest post from Austin at . For related pieces that also may be useful, see The Most Useful Thing Students Can Do to Prepare for the Job Market and How College Students Can Manage Their Future Career.   

I've only been out of college for only six months, but I can already pinpoint a handful of mistakes I made in my 4 years.

People go to college for different reasons, but letting it be 4 years of relaxing and hanging out before "the real world" kicks in is a huge mistake. As one too many jobless grads will tell you, graduating with a bachelor's degree doesn't mean a job is waiting post-graduation.

Now, don't get me wrong. College should be fun. Socializing and making connections are part of the experience, but that's what Friday and Saturday nights are for.

College students must spend the rest of their time looking for  a way to create an advantage for themselves as eventual employees. The key to being successful at anything is to stick out from the rest and work hard.

You can go about this by trying everything in college. Follow your interests, discover new creative outlets, but don't get pinned down by a label.

A common questions students often receive is: "what are you studying in school?".

Major and classes are overrated. It's important to do well - a B average is fine - but unless you're planning on going to grad school, don't waste time trying to get A's in Statistics. The extra hours spent cramming for finals probably won't have any weight in the real world. It's the stuff outside of the classroom that will make you more marketable after graduation.

That "stuff" is extracurricular activities. I don't mean science club and the ultimate frisbee team. I mean self-made extracurriculars.

The one thing that will make you more marketable to a potential employee is stuff you  created on their own.

Any businesses, internships, or clubs you create will make your resume bolt to the top of the pile because they're unique bullet points no one else can claim. Marketing deity calls it the purple cow. That specific trait that makes you stand out from the rest.

For example, if a students goes out of their way to create an internship at a local law firm, they stick out to potential employers for three reasons.

1) It shows you have the initiative to reach out and create something for themselves. This is incredibly admirable in any job market because there are more do'ers (workers) in the world, but not enough creators (entrepreneurs).

2) It makes you much more interesting to interview. Your story is probably an interesting one and one that the interviewer hasn't heard.

3) You'll receive a more valuable internship. Since you went above and beyond at the beginning, you can mold the internship to your specific skill set and create projects that excite and motivate you.

Far too many people waste days, weeks, or months at internships with huge corporations because it looks good on paper. If I was in charge of hiring for a business, I would choose the candidate who created an internship at a small mom & pop store and helped improve sales by 12% because of a new online cataloging system, compared to the candidate who was one of thirty interns at NBC and was the coffee runner.

My good friend Erik is taking this route and I applaud him for it. He's been a victim of the small job market so he went out to a local college and offered to work for free as an intern in their office of international programs. Will he get paid? No. Will he have the wow factor or interning at a world-wide corporation with hundreds of interns? No. But if he works hard and shows initiative he should be able to make a huge impact on the college, improve his professional portfolio, and maybe a new or job lead will come out of it.

You only have 4 years until they're out on you own. Far too often students tell themselves they'll work on their professional portfolio once they graduate. It'll be too late and you'll be stuck working a job you hate to pay off student loans.

Here are 3 things college students can do to make themselves more marketable in the real world:

1) Start a side business

The best part is, it doesn't even have to be good. I'd respect someone who had a failed side-business if they could tell me what they learned from it. Not every business is going to go public, but the fact that you have the entrepreneurship gears working says a lot. It shows a potential employer that you can create systems without being prompted and that you have a willingness to succeed. Most importantly, you'll learn about your strengths and weaknesses as a worker and you'll learn what you want out of a future job.

2) Intern everywhere and anywhere that interests you

There's no reason a business management major can't intern at a science lab. Pursuing different interests is vital in college. This is especially true for students who aren't sure about a career path.

I heard a great quote recently about passions and careers: "You may not know what you want to do with your life, but you should always be searching by following your interests".

When searching for internships, look at what the internship offers, not just who the company is. Perhaps, a small company is in desperate need of help and you could step in and play a substantial role. Maybe you notice they're lacking in human resources or have no online presence so you offer to create it yourself. Small companies move more quickly than larger corporations and they'll probably be thrilled at your offer. This will give you valuable experience that will look great down the road when you go to interview for a full-time job.

3) Create or become prominent in a school club

Clubs in college can be treated as small businesses or internships. Find one that aligns with your interests and use your skills to make an impact. Don't just show up to the meetings and take part in the events. You need to be a driving force behind the club's direction or improvement. By doing so, you can explain in a future interview the steps you took, the changes you made, and the positive results of your impact. If you can be on the club's board it's even better because you can have a title for yourself on your resume.

The key is to walk away from the experience with measurable improvements. How much money did your fund-raising events make? How much did that improve from the previous years when you weren't involved? How many new students did you attract to the club with your new marketing strategies?

A line on your resume that reads: "Created and led the Volunteer Club's first coat drive that brought in $10,000 worth of donations in one semester" looks much more appealing than a line that just reads "Member of the Volunteer Club from 2007-2009".

Clubs are a great way to test your interests, gain valuable work experience, and network with other go-getter students you may not have met otherwise.

If you're a senior or a junior don't waste time sulking because you didn't get started earlier. Note some of your interests and take action.

With businesses struggling, interns are needed. In an economic downturn, entrepreneurs can thrive. College clubs will always need leaders. There is a spot for you somewhere, but the chances of someone asking for your help is slim. Be the person who sends the first e-mail, makes the first phone call, or shows up uninvited. When you wow people with your presence and poise, the opportunities for work will follow if you're willing to do the type of job you promised you could. 

The perfect time to step up and make the change will never come unless you create that chance.

Anyone Have a Money Secret?

One of the blogs I subscribe to is , the site where people send in their deepest and darkest secrets on a postcard and the site's owner posts them once a week for all to see. It's often very compelling, raw, and sad to see the things people are dealing with, but can also be uplifting as people share their triumphs over various addictions, tragedies, and offenses. A lot of people seem to like this concept -- as I write this, their visitor count is over 300 million people.

I thought it might be interesting to have our own versions of an anonymous tell all -- a "MoneySecret" if you will. I've already detailed almost every private thing about my money life on this blog, but I'm sure there are some money secrets other would care to share. Some potential examples:

• Hidden credit card debt that no one knows about
• A former or current job issue that's impacting your income
• A secret expense that's putting a burden on your finances
• Past money mistakes that you're still paying for
• How you've overcome some huge financial challenge and are better off for it

You get the picture. Feel free to leave your comments below if you have a money secret you'd like to share.

How Different Age Groups View Their Careers

Crown Financial Ministries says that as follows:

People born before the Great Depression are very loyal and stayed with the same company for 40-50 years.

Builders, those born from the Great Depression to the mid 1940s, viewed a career as a way to make a living and take care of their families.

Baby Boomers, born from 1945-1965, saw career as the central focus of life; their work defines them.

Busters, those born from 1965-1985, see work as an irritant. It distracts them from what they want to do. Work is a necessary evil.

Millennials, the latest generation, born between 1985-2005, view work as a place to serve.

In the link above they don't list this as having come from any research/study, but I thought they did when I heard it on the radio. Anyway, the characterizations seem "right" to me.

I'm right on the edge of the Boomers and Busters and I must admit that I've seen work as both defining who I am (isn't the first question guys ask each other, "What do you do for a living?" when they meet?) and as an irritant over the course of my career. But now I'm in that "happy place" that's so hard to find for so many -- I LOVE my job, the people I work with, and the company. If I work here the rest of my career, I'll be a happy camper.

So what do you think of the characterizations from Crown?

Kiplinger Doesn't Get It

Generally, I like Kiplinger's website. I don't get their magazine any longer because most of their good stuff is online, and those pieces are pretty good. I link to/write about their articles quite frequently.

But in the case of , they're off the mark. They detail and give this as a summary:

We narrow the list to about 120 schools based on measures of academic quality -- including SAT or ACT scores, admission and retention rates, student-faculty ratios, and four- and six-year graduation rates, which most schools reported for the class entering in 2002. We then rank each school based on cost and financial aid. In our scoring system, academic quality carries more weight than costs (almost two-thirds of the total).

To assess costs, we look at total expenses for in-state students (tuition, mandatory fees, room and board, and books); the average cost for a student with need after subtracting grants (but not loans); the average cost for a student without need after subtracting non-need-based grants; the average percentage of need met by aid; and the average debt per student before graduation. (In the table, aid is need-based assistance.)

In all, they list 24 different pieces of data but miss the one key that would really make this analysis great -- expected earnings at graduation.

Why is this so important? Because to see if getting a degree at any particular school is a good deal, you need to know two things -- what it costs and what you expect to make when you graduate. Only by knowing these two things can you make the most of a college degree.

But Kiplinger only ranks "quality" versus cost (giving 2/3 of the weight to the "quality" measures.) Who cares if the "quality" of the school is great or even if it's a good deal cost-wise to go there if you can't get a job paying much upon graduation?

For instance, Kiplinger ranks the University of North Carolina as #1 and Shippensburg University of Pennsylvania as #100. The average debt at graduation is $14,936 for Carolina and $20,148 for Shippensburg (they also list other cost numbers, but let's focus on these for simplicity's sake.) But what if you found out that the average grad from Carolina made $25,000 out of school and averaged $50,000 10 years later versus $35,000 and $70,000 for Shippensburg? (FYI, I'm making these numbers up -- they're not listed anywhere -- which is exactly my point). Would your conclusion be a bit different? Probably!

Of course you'd need to adjust for the differences in majors from one school to another (at least in part -- maybe one analysis could be overall and another could be by-major), but once this is done, wouldn't knowing what you'd make upon getting a degree be pretty important information? Without it, how can you really determine what the best "value" among colleges is?

Maybe I'm missing something. Feel free to add your thoughts and take on this issue.

An Update on Our Shopping List

Remember when I told you all that I was in a buying mood? I shared a list of purchases we were considering and gave details on each of them. Well, I thought it would be fun to let you know what's happened since that post in July. Here's the list as well as what we've done with each item:

• A house -- We've made the decision to stay put for now. We looked for three years but couldn't find a combination of price, location, and house/land that was better than what we had now. So we decided to remain in our current home and upgrade it a bit instead of moving.
• A car -- As I noted in the original post, we'll probably get a new car in the fall. I'll begin my car-buying process in the summer sometime.
• A vacation -- We were looking at going somewhere warm this winter, but a combination of work, school, and extracurricular activities (my son plays basketball and I'm an assistant coach) has put the damper on this idea for now.
• A laptop -- Postponed this one indefinitely. I'm getting by fine with what we have now.
• A Television -- Got it and I'm loving it. TV never looked so crystal clear!
• Furniture -- We bought a new couch as well as a desk and bookshelves for our study (a dining room converted to a "study".) Still on the list are two new chairs, a coffee table, and an end table for the living room. (BTW, we also had this room painted.)
• Furnace -- Got it (and a new AC unit to boot.) FYI, we've now received all the rebates that were part of this deal -- only the $1,500 tax credit to take now when we do our taxes.
• Having the glass in two windows replaced -- Didn't get around to it. We'll do it in the spring.
• Getting cable TV -- Got it, got a good deal, and LOVE it. We DVR our favorite shows (soccer games, Nature, Nova, AFA) as well as watch Comcast's On Demand shows quite often. We rent DVDs too -- either from Blockbuster or from the library (free) -- but we haven't been to a movie theater since we got the TV/cable combination.
• A Wii -- Not only got this, but added a PS3 at Christmas as well. We're still enjoying both. The PS3 is the favorite for the kids and me (also has Blu-Ray, BTW) but the Wii is preferred when guests come over and we want to have group games.
• Snowblower -- This wasn't on the first list, but we did buy a new one this year. It was over $600, but given the economics of snow removal in our area, it will pay for itself in three years (versus hiring a snow removal company.)

Those were the items on the original list. Since we made the "not moving" decision, we've expanded our home improvement list and will be looking at the following additional purchases in the next few months:

• A new front door -- We currently have a double-door set up that's about 80% glass. It's frosted a bit, but not much, and you can pretty much see into our living room from the outside. The door is also not that attractive and despite our best efforts, is rather breezy in the winter. We'd like a new, energy-efficient, single door with side glass that allows a bit more privacy and security, a better appearance, better protection from the elements, and a storm-door/screen-door that will allow for a breeze in the summer and added weather protection in the winter.
• A patio area -- We already have a deck, but would like to add a brick or stamped concrete (made to look like brick) patio area in our backyard. It would have a place for chairs and a table as well as a small fit pit. Added advantage: less yard to mow. ;-)
• Landscaping -- When our house was built 25 years ago, no one really planned for the size of various plants and trees way down the road. As a result, we have a bush that trying to eat our garage and needs to be removed, our backyard woods trying to stamp out any light/grass that might try and slip through to the earth, and a side yard that's so dark in mid-day (due to the tall trees around it) that nothing sun-loving would dare to grow there. Fortunately we have a friend in this business who can give us some great advice (and hopefully a good deal.)
• Lawn mower -- Our current push (not propelled) lawn mower is almost 20 years old. I could go into the various things wrong with it, but let's just say it's not in great operational condition. I bought it at Sears for something like $120, so I think I've received my value from it. ;-) Anyway, it's time to get a new one.
• Others -- We have a few other things on our wish list -- get the garage floor stained/painted, replace outside lights, added insulation for the attic -- but I'm not sure we'll have the time (and budget) to handle these this year. We'll see how it all unfolds.

BTW, NONE of this stuff, either stuff we've already purchased or will purchase, has been paid for by borrowing money (nor has it been taken from our basic savings plans -- 401k, 529s, etc.). We have made and will make purchases either out of current income that's budget for the purpose or out of savings. Of course we will pay with our credit card when we can (getting 2% back all the time) but we'll always pay the amount in full when the bill is due.

I'll give you an update later in the year so we all can see how this list panned out. ;-)

Alltribes March Money Madness, Round 1, Posts 17-20

Here we go with the first round of Alltribes March Money Madness (if you wonder what's going on in these posts, see my article announcing March Money Madness and/or click on my March Money Madness category link and scroll down to read all the posts involved in this subject.)

I've listed each "game" (one post versus another) in segments along with the wording provided by the author when the post was submitted. I've also listed a keyword after each post title to make it easy to vote (as a made-up example, you can just comment: Game 1 - Saving; Game 2 - Investing, etc.) Be sure to comment which one you like the best out of each set of two -- you will help determine the winner! Criteria for the best article is somewhat subjective, but you can use these factors as a guide: 1) practicality of the post 2) how interesting/provocative/unique it is, 3) the "personal-ness" of it and 4) its impact on net worth.

Here are today's games:

GAME 9

• (Psych) - Managing your money has both an emotional and psychological component to it.  To be successful you have to make sure that you don't become solely an analytical money manager, or an emotional one.  Finding a balance between listening to your emotions and making rational decisions is key.

VERSUS

• (Flog) - Impulse shopping is the core problem for many people in debt. Everyone needs someone to flog the inner impulse shopper into submission.  On your knees, debt!

GAME 10

• (Losers) - At times a phrase says it all.  There is no need for an in-depth financial analysis.  Sometimes all it takes is one phrase and those around you know it - you are a financial loser.  This post evaluates 14 frequently used phrases that automatically confirm an unfortunate reality - you are a financial loser.

VERSUS

• (Impulse) -- Impulse buying taps into our emotions.  To overcome it, you have to think logically about the purchase.  This is a common challenge for many and this post provides some practical ideas to get impulse buying under control.

Reflecting on 2009 Returns Provides Lessons Going Forward

The following is a guest post from . 

Many are breathing a sigh of relief after participating in the largest stock market roller coaster since the Great Depression. Others bailed out at the wrong time and are unsure whether they will ever recover their nest egg. A valuable exercise in January is to review your investment returns in light of what occurred in the broader asset classes.

The unwinding of the highly leveraged real estate bubble continued throughout 2009. But flooding the markets with credit and currency commitments from central banks around the globe staved off further asset price atrophy.

In 2009 we were reminded that sometimes the greater the fall, the bigger the bounce. After hitting a low on March 6, the markets started a fierce climb. Those with nerves of steel were rewarded.

Standard deviation (SD) is a statistical measure of volatility. Although most market movement occurs within 1 SD, 2009 saw a six-month (March through September) S&P 500 growth period of 40.5%, a 3 SD event. Also called "three sigma" events, under normal conditions they are only predicted to appear once every 56 years. Although rare, stock market returns are capricious by nature and regularly exceed the statistical norms for such wild events.

Money flows from equity mutual funds suggest that investors were pulling their money out in record amounts as the market neared the bottom. Many investors were selling at the bottom! In contrast, disciplined investors stick to an established plan to rein in their emotions. Those who regularly rebalance their portfolios used the sharp decline in the markets to acquire stock investments at half the price they were going for only six months prior.

The S&P 500, which represents the largest American-based companies, finished the year up 26.46%. Smaller companies, represented by the Russell 2000, slightly outperformed, ending up 27.17%. This confirmed a long-term trend that suggests small companies tend to average higher returns than their larger counterparts.

Value stocks historically outperform growth stocks. They didn't last year, however. Both small- and large-cap growth stocks were the winners. The Russell 2000 Growth Index was up 34.47% compared to the Russell 2000 Value Index, up 20.58%. One year of outperformance, even by such a wide margin, did not reverse the long-term trend. The Value Index has a 10-year average annual return of 8.27%. But the Growth Index is still in the red at -1.37%.

Weakness in the U.S. dollar (USD) was another strong theme for 2009. Flooding the world with newly printed greenbacks and growing deficits is causing unease across international markets. Many believe the days of holding dollars as the international reserve currency are numbered.

It is difficult for U.S. investors to comprehend the effect of a devalued USD. International investors saw quite clearly the effect of a weakening dollar. Developed international investments as measured by the Europe, Australasia and Far East (EAFE) Index finished up 31.78%. A foreign investment has two moving parts. The first is the stock price, which fluctuates based on the performance of companies in their own currencies. The second part is the currency exchange. If you could strip away the currency exchange, the EAFE Index return would have only been 24.72% with the remaining 7.06% coming from a weakening U.S. dollar.

Investing in countries with a strong currency and healthy balance sheet showed particular strengths. Australian markets finished the year up 66.16% for U.S. investors but only 36.78% if measured in Australian dollars. Investors gained an additional 29.38% from the U.S. dollar weakening against the Aussie dollar.

The largest growth came from the emerging markets. They were up 78.51% in USD, triple the return of developed foreign or domestic indices. Brazil led the pack, finishing the year up 128.06% in USD and 70.48% in local currency. India, Russia and China all had superior performance.

Natural resource stocks, also called hard asset stocks, were up 37.54%. Hard assets include companies that own and produce an underlying natural resource. These include oil, natural gas, precious metals (particularly gold and silver), base metals such as copper and nickel and other resources such as diamonds, coal, lumber and even water. These stocks are unique in that they have a low correlation with other stocks and bonds and they appreciate with inflation.

Those who moved their investments to the supposed safety of Treasury bond investments were deeply disappointed. The Barclays Capital U.S. 1-3 Year Treasury Bond Index finished the year with a meager gain of 0.8%. The Barclay Capital U.S. Aggregate Bond Index (including corporate bonds) finished the year up 5.93%. Foreign bond performance was even better due largely to currency exchange.

Take the time to compute your 2009 returns and review your asset allocation and investment selection. Too many American investors have most of their investments tied up domestically. We suggest you expand your investment mix to include foreign bonds, foreign stocks and hard asset stocks. Adding these to a diversified portfolio of U.S. stocks and bonds will reduce the average volatility of your portfolio while boosting returns over a full market cycle.

The Six Biggest Investing Mistakes

Money magazine lists the . Before I list them, let me say that I've made almost all of them (I've never made the last one, but the others I certainly have.) Anyway, here's their list and my comments:

Mistake #1: Overconfidence -- In recent years, a group of behavioral psychologists and financial economists have created the important new field of behavioral finance. Their research shows that we are not always rational. We tend to be overconfident. If we do make a successful investment, we confuse luck with skill. It was easy in early 2000 to delude yourself that you were an investment genius when your Internet stock doubled and then doubled again.

I made this one big-time. I used to think I was smarter than everyone else, could analyze data better than anyone else, and could pick stocks better than anyone else. Then I was in the market for a year or so and learned otherwise. ;-)

Anyway, this is the #1 mistake I see in beginning investors. They think that in their spare time they can somehow make better investment decisions than people who spend their lives picking investment (and these people, BTW, aren't that great at it either -- see mistake #5.)

Mistake #2: Following the herd -- People feel safety in numbers. Investors tend to get more and more optimistic, and unknowingly take greater and greater risks, during bull markets and periods of euphoria. That is why speculative bubbles feed on themselves.

I have made this mistake but not often. I've always been a go-against-the-flow or contrarian sort of person anyway, so investing this way was natural for me early in my investing days. Only it didn't work out much better than the herd group.

Mistake #3: Timing the market -- Does the timing penalty - the cost of second-guessing the market - make a big difference? You bet it does. The stock market as a whole has delivered an average rate of return of 9.6% over long periods of time. But that return measures only what a buy-and-hold investor would earn by putting money in at the start of the period and keeping his money invested through thick and thin. The average investor's actual returns are at least two percentage points lower because the money tends to come in at or near the top and out at or near the bottom.

"The money tends to come in at or near the top and out at or near the bottom." Ha! People will say over and over again that they can time the market, but if you look at the facts, they can't. They pull money out at the wrong time (after the market has tanked big-time) and finally decide to get back in once most of the run-up is done. If, by some amazing piece of luck, you were able to get out before the market declined and then to plow it all back in anywhere near the bottom, consider yourself extremely lucky -- and one in a million if not more. Something you certainly can't count on as a long-term strategy.

Mistake #4: Assuming more control than you have -- Psychologists have identified a tendency in people to think they have control over events even when they have none. That can lead investors to overvalue a losing stock in their portfolio. It also can lead them to imagine trends when none exist or believe they can spot a pattern in a stock chart and thus predict the future. In fact, the changes in stock prices are very close to a "random walk": There is no dependable way to predict the future movements of a stock's price from its past wanderings.

If you've been in the market for more than a week you know that you have very little control of what's going on. I wonder why it took me so long to learn this lesson.

Mistake #5: Paying too much in fees -- There is one piece of investment advice that, if you follow it, can dependably increase your returns: Minimize your investment costs. We have spent two lifetimes thinking about which mutual fund managers will have the best performance year in and year out. Here's what we now know: It was and is hopeless.

Yep. People pay fund managers and end up earning less. Fact of life. That's another reason I like index funds -- MUCH lower costs.

Mistake #6: Trusting stockbrokers -- The stockbroker's real job is not to make money for you but to make money from you. Brokers tend to be friendly for one major reason: It gets them more business.

I've met several smooth-talking brokers in my day and fortunately I've never been hooked by one. But if you ever are, they will certainly do something -- they'll work hard to make your money their money. Other than that, you probably won't get much value from them (see #5 again.)

At this point, my investments are on cruise control. I invest in index funds with a handful of funds designed to keep costs at a minimum. I bought all the way down (and back up again) during the recent decline and those investments are doing very well now. For the future, the formula is simple: keep saving, keep investing, rebalance, and adjust asset allocations when called for. These simple steps are all my portfolio calls for these days. It's kinda nice. ;-)

Five Ways to Make Good Career Decisions

Crown Financial Ministries lists  as follows:

1. Clarify your purpose in life.

2. Learn about your natural bent.

3. Explore several occupations that fit into your pattern.

4. Choose your direction and initial destination and develop a plan to get there.

5. Learn to manage your own career.

My take on these:

• Both #1 and #2 are hard to do, especially since our society forces people to make these decisions at such an early age. I think that's why we see so many young people switch majors in college, then switch jobs once they leave college.
• I can't recommend internships enough (one I took changed my life and moved me from one career path to a totally different one.) A friend of our family recently had the same experience. She wanted to become a nurse, so she spent a few weeks with a nurse seeing what the job was like. Our friend hated it and changed the course of her education as a result. So I 100% recommend trying out jobs (via internship) that you think you might like. Doing so will either confirm that you're going in the right direction or head off what could be career disaster.
• You have to be deliberate about the plans for your career from the time you're in high school (with help from parents) on. One step leads to another up the ladder of success.
• Certainly, you need to manage your career to it's maximum potential. If you don't, you'll be left to the whims of chance and fortune. Don't get me wrong, even if you actively manage your career, bad things outside your control can still happen. But if you've done all you can to build your career, when bad things do happen you'll have a lot more options for positive response than you'd have otherwise.

Win a Free Copy of You Need a Budget!

I am giving away a copy of ! We'll start with a review from About.com. Here goes:

"The budgeting software of choice for those who seriously want to start a personal or household budget or who already are committed to budgeting is You Need A Budget Pro."

Good stuff, huh?

Here's how the giveaway will work:

1. All you need to do to enter is to leave any comment on this post. Be sure to leave your email address (no one else will be able to see it) when you leave the comment.

2. Sometime next week, I'll select the winner at random and announce the winner on this post.

3. I will email the winner, get their information, and arrange for them to receive their prize.

As always, the standard rules apply.

Good luck! Post a comment below for your chance to win!

BTW, if you've been wondering about buying YNAB and this contest is making you wait a bit, don't worry. Go ahead and get a copy of YNAB and if you win, the people at YNAB will refund your purchase price (note: this only applies to people who purchased the product in the last week or so -- you can't get a refund if you purchased the product a month, six months, or a year ago.) ;-)

Sound Mind Investing's Upgrading Strategy (And Giveaway!)

The following is a guest post from . For more on SMI, see my review of their book and their website. Also check out the end of this post to win a free one-year subscription to their website.

Thus far in this four-part series we've covered the foundational steps to becoming a successful investor, explained how to make your most important investing decision, and looked at a simple, low-cost investing strategy that allows you to diversify your investments across the U.S. stock and bond markets, as well as international markets.

In this post, we'll focus on a slightly more "hands-on" strategy that has outperformed (i.e., earned higher returns than) the broad market in 10 out of the past 11 years. We call it .

Each month, our SMI research team ranks more than 1,500 mutual funds and determines which ones have been delivering the best recent performance. Why? Because mutual funds are a lot like baseball teams. A team that is winning tends to keep winning over the next short while.

Based on our research, we identify the funds with current "winning streaks," and we follow their performance closely. When a fund's winning streak begins to wane (and it always does at some point), we tell SMI readers 1) when it's time to sell and 2) what to buy next.

Upgrading works because as economic conditions change, market leadership rotates among different investment approaches and companies of different sizes. But even though market conditions are constantly changing, fund managers rarely do! Managers who excel under one set of market conditions often are only average (or worse) under a different set of conditions.

So rather than buy a fund and hold it through the periods that don't favor a particular manager's approach as well as the periods that do, Upgrading continually guides investors to funds that are in favor right now.

As noted, Upgrading has helped us establish an excellent track record of beating the market over an extended period of time, under both bullish and bearish market conditions ().

To learn more about Upgrading, as well as to learn the many other great benefits SMI readers receive, visit .

---------------------------------------------------

FMF here again. I am giving away a free one-year subscription to the Sound Mind Investing website. Here's how the giveaway will work:

1. All you need to do to enter is to leave any comment on this post. Be sure to leave your email address (no one else will be able to see it) when you leave the comment.

2. Sometime next week, I'll select the winner at random and announce the winner on this post.

3. I will email the winner, get their information, and arrange for them to receive their prize.

As always, the standard rules apply.

Good luck! Post a comment below for your chance to win!

Five Ways People Make Bad Career Decisions

Crown Financial Ministries lists  as follows:

1. Choose the first or easiest job you can get.

2. Choose a job based on the amount of money it pays.

3. Choose a job because it sounds like a good title.

4. Taking a job just because management offers it.

5. Choosing a job because that’s what your parents do.

Here's where I net out on these:

1. I had one situation where I took a job that I thought would be "ok" but that I really didn't love (and wasn't sure I would even like) simply because I hated my current job so much. Fortunately, things turned around for me in that case (you can read about it here) and I never "settled" again.

2. I can't say I've ever taken one job over another simply because the pay was better. But total compensation (not just salary, but the whole package) is a key part of selecting any job. I have NOT taken jobs because the total compensation was too low.

3. I don't really care about titles. You can call me "bum" as long as you pay me well. ;-)

4. Does management "offer" or do they "tell"? Any way, I've been in two situations where my job changed, I was told what I'd be doing (not asked), and I had to go along with the changes (read about them here and here.) In both cases, the changes were for the best initially, then they went south. Ugh.

5. My parents never really suggested what I should do for my career, so this one wasn't an issue for me.

How about you? Have you made any of these bad career decisions?

Best of Money Carnival Up

Just a note to let you know that . Congrats to all participants and especially the winning post, . I made the carnival myself with the post Three Easiest Ways to Earn More Money.

Enjoy!

Do You Make Kids Pay for Birthday Presents?

Here's an interesting money/parenting question:

Do you make your kids pay for birthday presents when they attend a friend's birthday party?

Through the years, we've always paid for the friend's present when one of our kids attended a birthday party. Our kids didn't have much income and you have to have a present, so we just picked up the tab. And in those days birthday parties were small and far-between.

But things have changed in the past year or so. Namely:

• Our kids are getting invited to several birthday parties on a more-frequent basis -- even by "friends" they aren't that close to.
• The parties are bigger. Many of them are over-night events that start one afternoon and conclude the next morning at noon or so.
• As the kids get older and the parties get bigger, the price of gifts gets higher.
• Our kids now have their own sources of income (especially my son.)

So we recently changed our policy. We decided that we'd pay for half the cost of the friend's gift and that our kids would pay for half themselves. To all of us it seemed like a good compromise.

How about you? What's your policy on paying for this sort of birthday present?

Alltribes March Money Madness, Round 1, Posts 13-16

Here we go with the first round of Alltribes March Money Madness (if you wonder what's going on in these posts, see my article announcing March Money Madness and/or click on my March Money Madness category link and scroll down to read all the posts involved in this subject.)

I've listed each "game" (one post versus another) in segments along with the wording provided by the author when the post was submitted. I've also listed a keyword after each post title to make it easy to vote (as a made-up example, you can just comment: Game 1 - Saving; Game 2 - Investing, etc.) Be sure to comment which one you like the best out of each set of two -- you will help determine the winner! Criteria for the best article is somewhat subjective, but you can use these factors as a guide: 1) practicality of the post 2) how interesting/provocative/unique it is, 3) the "personal-ness" of it and 4) its impact on net worth.

Here are today's games:

GAME 7

• (Planet) - When you make the decision to make smarter choices with your money and live more frugally, there will be an endless supply of people there to try and knock you down.  They'll belittle your ideas, tell you you're wrong, or tell you you're not doing enough to make a difference.  Don't believe them.  It always makes a difference.

VERSUS

• (Homeless) - By age 17 both my parents had passed away. They didn't have a will or trust. They had very little life insurance and my father was bankrupt at the time. I spent a short time being homeless and a very long time as an angry frightened person. Eventually, a number of things came together and I was able to get myself on my feet financially. Here's how I did it.

GAME 8

• (Blog) - Since beginning my blogging journey a couple years ago, I had aspirations of becoming a full-time blogger. After reaching the full-time status I created this 6000-word article explaining everything I had done to get my blog to the point where I could make a living from it. This article provides talks about the blogging basics, ad networks I use, SEO for blogs, how long it really takes to make money, getting traffic, increasing Adsense earnings, tips and tools, and a lot more. Enjoy!

VERSUS

• (Heart) - Featured on Get Rich Slowly and the MSN Smart Spending blog, this post explores seven very different strategies for setting financial priorities. Each one is meant as a stand-alone exercise and can give you insight into your natural leanings, unexplored priorities, and ways of thinking about money. How would you handle income change? All things being equal, how do you react to a financial situation? All of these questions are more can be answered through this post.

Insights into My Finances

Earlier this month, I had a reader send me the following questions:

1. How much were you giving when you still had a mortgage?
 
2.  Is your 1/3 to savings 1/3 to live 1/3 to giving Net income or Gross? I'm assuming 1/3 is actually taxes?

These are a couple of interesting questions and instead of just emailing her back, I decided to answer them here. Just to note, I'll be dealing with GROSS income percentages in the numbers below (i.e. if I say we spent 5% on food then that would be 5% of our gross income was spent on food.)

We'll start with question #1 and a few points of clarification:

• I've already detailed how we paid off our mortgage. Read that post if you want some background.

• One correction to that post -- we actually paid off our mortgage in 1998, not 1997. 1997 was the last year we had a debt balance of any sort at the end of the year. Everything was paid off in 1998 and we ended that year with $0 owed.

• Given the above, we're now in our 12th debt-free year. Yes, it's as nice as it sounds.

The years we had our last mortgage were 1995 to 1998 (we had moved from another area of the country and used the proceeds from a home sale there some savings to make about a 30% downpayment.) During those years, we tithed (10%) as well as gave offerings above the tithe to make our total giving the following:

• 1995 -- 13.7%
• 1996 -- 18.3%
• 1997 -- 16.4%
• 1998 -- 21.1%

A few notes on these results:

• Yes, we gave AND paid off debt AND saved for retirement, etc. How did we do this -- like everyone does it, we made the gap between income and expenses as large as possible.

• The percentage given dropped in 1997, but the absolute amount was about the same as in 1996. It's just that our income was higher in 1997 and the increase went to pay off debt.

• Once our debts were all gone, our giving levels jumped.

Now to the second question.

I'll start by saying the following:

• The 1/3, 1/3, 1/3 budget that I've talked about now and then is a ROUGH estimation of what I was spending. The numbers below are the exact amounts.

• The giving numbers only reflect cash gifts. We give away physical items each year as well (in 2004 we gave away two cars, but they won't be in these numbers.)

I looked at Quicken to find the splits for giving, spending, and saving for the past five years, and here's what I found:

• 2005 -- 58.0% giving; 33.4% spending; 8.7% saving
• 2006 -- 38.9% giving; 28.3% spending; 32.8% saving
• 2007 -- 31.8% giving; 27.0% spending; 41.2% saving
• 2008 -- 25.7% giving; 29.2% spending; 45.1% saving
• 2009 -- 26.3% giving; 33.7% spending; 40.0% saving

• Total for five-year period: 35.0% giving; 30.2% spending; 34.9% saving

Some comments:

• In 2005 and 2006 we gave more to one special charity that we made an over-and-above commitment to. We actually paid it off early, but as such had lower saving levels.

• Spending is relatively consistent, though is up in 2009 due to some home purchases (TV, furnace and AC, furniture, etc.) we made.

• Saving is very strong. I hope to keep it up.

The emailer asked about taxes, and after giving, taxes are my biggest expense. They averaged 18.9% of gross income (so my actual living expenses, after taxes, are 11% or so of gross income). Two thoughts here:

1. Most of you know this, but people don't pay taxes on gross income, they pay it on taxable income (gross income less a whole bundle of deductions that the government allows. I have a bundle of deductions.)

2. It's still a HUGE amount of money. If I had my taxes back from just the past five years, my net worth would be 20% higher!

So there you have it. It was an interesting exercise for me to go through Quicken and dig out these numbers. I hope you found it insightful as well.

The Poverty Gospel

For those of you new to Alltribes, I post on The Bible and Money every Sunday. Here's why.

The following is an excerpt from . This excerpt and the one last week on the Prosperity Gospel deal with what the author calls the two extremes of how Christians view money. He starts off the comparison with this: "When approaching prosperity as a whole, many Christians take one of two extremes:  Either prosperity is evidence of Godliness, or it is evidence of worldliness, selfishness, and sin.  Neither view is Biblical, and both contain colossal errors when standing next to the truths of scripture.  For most, these philosophies are not quite so blatant, but their subtle undertones shape many Christians’ thoughts and actions towards money."

The Poverty Gospel

“And turning His gaze toward His disciples, He began to say, ‘Blessed are you who are poor, for yours is the kingdom of God.  Blessed are you who hunger now, for you shall be satisfied…But woe to you who are rich, for you are receiving your comfort in full.  Woe to you who are well-fed now, for you shall be hungry.” (Luke 6:20-21, 24-25)

The argument could now be made for poverty in what I like to refer to as the “poverty gospel.”  After all, there are plenty of verses that seem to exalt the humility that poverty creates in the heart of its holder.  In addition, the end of the previous section explained that Christ held no significant material wealth.  Could all of these things be pointing to the possibility that poverty is part of the pathway to sanctification?  Essentially, this philosophy argues that not only is poverty a required attribute of true discipleship, but prosperity itself is inherently evil--the byproduct of sinful, selfish greed.  This extreme view does not hold up to the truths of scripture, either.

First, the Bible does clearly relate the connection between poverty and humility.  It denotes the logical likelihood that the poor are more receptive to the message of the Gospel: “Did not God choose the poor of this world to be rich in faith,” (James 2:5) while the rich are more resistant: “It is hard for a rich man to enter the kingdom of heaven.” (Matt. 19:23)  This premise was discussed in detail in chapter 10.  The heart of this distinction comes from one’s willingness to accept his inability to save himself.  The poor are just more aware of this reality.  The Bible makes no deeper implications than this.  Even after Jesus states, “It is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of God,” He answers the disciples’ question, “Who can be saved?” by stating, “With people this is impossible, but with God all things are possible.” (Matt. 19:24-26)  The Bible does teach that the wealthy are more prone to autonomy, but they are not out of the reach of God’s grace.  To go beyond this begins to twist the truths of scripture.

When proponents of this view attest that poverty is a necessary ingredient of true discipleship, they connect spiritual certainties with physical circumstances.  This is no different a distortion of God’s word than the prosperity gospel.  Both extremes have committed the same error, just on opposite ends of the spectrum.  To declare our physical circumstances as the governing principle of our spiritual lives is legalistic, shallow, and unbiblical: “For God sees not as man sees, for man looks at the outward appearance, but the Lord looks at the heart.” (1 Sam. 16:7)  We cannot be deceived into believing the external determines the internal.

To clarify this position and further expose the distortion of the poverty gospel, one naturally would ask the question:  Is poverty ever criticized in the scripture?  The answer is yes.

“Poverty and shame will come to him who neglects discipline.” (Prov. 13:18)

“The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty.” (Prov. 21:5)

“In all labor there is profit, but mere talk leads only to poverty.” (Prov. 14:23)

“He who tills his land will have plenty of food, but he who follows empty pursuits will have poverty in plenty.” (Prov. 28:19)

“Poor is he who works with a negligent hand, but the hand of the diligent makes rich.” (Prov. 10:4)

How can poverty be the mark of true Godliness and obedience when it also can signify laziness, haste, mere talk, a following of empty pursuits, and negligence?  Simple: it cannot.  This is not to say that poverty is always the result of these attributes, but to show that poverty itself is not to be equated with Godliness.  From this point we can move beyond the misconception that living an impoverished life is a necessary component of true discipleship.

The second major claim of the poverty gospel is the belief that prosperity in and of itself is sinful.  This idea is easily disproved by scripture.  The Bible clearly relates that many Godly men were also wealthy:  Abraham, Isaac, Jacob, Joseph, Boaz, David, Solomon, and Hezekiah.   Biblically speaking, this is quite a list.  Surely these men cannot be judged as sinful, selfish, and greedy.  Of David it was said: “The Lord has sought out for Himself a man after His own heart.” (1 Sam. 13:14)  David was a man with a heart to follow God yet also was very wealthy.  Riches and righteousness are not mutually exclusive.  In light of several scriptural examples of men who were both Godly and prosperous, it is impossible to state that poverty is a necessary requirement for Godliness.

One final argument against the sinfulness of prosperity is found in several of the prayers of the Bible.  Prosperity is prayed for in multiple passages.

“O LORD, do save, we beseech You; O LORD, we beseech You, do send prosperity!” (Ps. 118:25)

“May they prosper who love you.  May peace be within your walls, and prosperity within your palaces.” (Ps. 122:6-7)

“The LORD bless you from Zion, and may you see the prosperity of Jerusalem all the days of your life.” (Ps. 128:5)

“May the LORD give you increase, you and your children.” (Ps. 115:14)

“Now Jabez called on the God of Israel, saying, ‘Oh that You would bless me indeed and enlarge my border, and that Your hand might be with me, and that You would keep me from harm that it may not pain me!’  And God granted him what he requested.” (1 Chron. 4:10)

“Beloved, I pray that in all respects you may prosper and be in good health, just as your soul prospers.” (3 John 1:2)

Prosperity is prayed for in both the Old and New Testament.  God even granted this request to Jabez.  The Bible would not record these prayers if the desire for prosperity is inherently sinful.  As we will see later in this chapter, prosperity has great power and potential in the hands of a Godly steward who manages it according to the will of God.

So where does this leave the Christian?  What is he to make of these two extremes?  The Biblical stance on the relationship between Godliness and wealth has everything to do with perspective.  Righteousness runs the gamut from the lowest poverty to the highest prosperity.  In conclusion, we see that both financial states can have their own unique advantages.  The real issue, as outlined in Christ’s teachings on money,  lies in the heart of the believer.  There is freedom to serve Christ and glorify God in any tax bracket. 

I'm Working to Make My Slave as Big as Possible

Here's and interesting comment left on my post titled Why a High Income Often Doesn't Translate into a High Net Worth:

My wife and I have a pretty high net worth but our "earned" income is very average because all it consists of is a retirement check and a social security check, each, every month, and yes we each drive a Mercedes and live in a beautiful home and have a condo by the ocean, all paid for.

However that isn't the full story.

The reason we studied hard, worked hard, saved hard, and lived well below our income during our whole life was this:

We now have a slave that works his butt off for us - He never complains, doesn't cost us a penny, and works 365 days/year and 24 hours/day to generate a very large income, four times greater than we ever earned when we were working, half of which is tax deferred, the other is tax exempt.

By the way, the name of our slave is Mr. CD BONDS and he hangs out at your local brokerage office.

I found this comment both funny (cute way he puts it) as well as educational (this is what we're all working for, right? We want to get our investments to the point where they do all the financial earning we need for us.)

Personally, my "slave" is invested mostly in stock index funds at the moment, but as time goes on, I'll switch to more and more bonds. But in the meantime, I'm doing all I can (saving early, often, and in large amounts) to make my slave as big as possible.

How about you?

BTW, the "slave" concept is also mentioned in The Richest Man in Babylon, a GREAT personal finance book IMO.

How to Save Money When Traveling to Europe

The following is a guest post by Simon Migliano of .

Being a tourist in Europe is one of the toughest challenges anyone committed to the frugal life will endure. Even for locals, it’s dispiritingly easy to fritter away cash in tourist hotspots that seem to go out of their way to empty to your pockets at every opportunity.

As always, planning is the key, otherwise you risk losing control of your spending. With a little inside knowledge and an internet connection, you could save up to 50% at top restaurants, get cheap theatre tickets, save on takeout pizza and ride the subway for half price.

Before eating out, take the time to search for restaurant vouchers. Faced with a recession, European restaurants and attractions are resorting in droves to money-off vouchers to attract new customers. Savvy Europeans search online for restaurant vouchers (also known as printable vouchers), these coupons are downloaded from voucher codes websites printed out at home then handed over in the restaurant. Download a coupon for the eatery that most whets your appetite, print it out then hand it over when you get there. These can be found at for the UK, for France, and for Germany.

Typical offers include two main meals for the price of one; half price food bills and kids eat free. The potential savings are huge, particularly for families.

A family of four dining at Pizza Express, a stylish and family-friendly pizza restaurant chain, could easily spend $125. With a two-for-one printable voucher, this could be slashed by almost $35. An even better deal can be had at La Tasca, a popular Spanish restaurant chain. La Tasca's 50% off food voucher would save the same family almost $50 on a typical bill of $125 that included drinks.

Even if you don’t have an internet connection in your hotel, you can always nip into one of Europe’s many internet cafes and print out your coupon. The cost of doing so will only be a fraction of what you save.

Another great way to avoid being stung at the end of a meal is to log on to the Time Out restaurant guides which are available for most major cities. As online bibles for food-loving Europeans, these sites have all the latest independent reviews and even lists all restaurants where you can dine for under $15 a head.

Transport can also drain the cash from the holiday fund. A mistake that can often be made by families is to leave the bikes at home.  While not right for all holidays many sunny and picturesque destinations can provide the perfect setting for a group bike ride. This can form a fun part of the holiday while avoiding the overpriced trains operating on tourist routes.

In terms of accommodation it’s always best to book in advance with cheap hotel chains. While in Britain Travelodge, Holiday Inn and several others are leading the way in low cost accommodation. In France similar chains can offer three person rooms for under $30 a night, while still being close to major attractions.

A tip that cannot be stressed enough is to check with your provider before using your credit card abroad. Most companies will charge a huge commission of around 2.75% every time you use your card – a sting that can be easily avoided with some forward planning.

U.S. tourists made 2.96 million visits to the UK last year, according to the International Passenger Survey. While more French and Germans came to Britain in that time, no-one spent more than Americans, who handed over $3.66 billion in total. With London being consistently voted the most expensive European city it is worth being extra savvy when visiting the Big Smoke.

Taking in a show in London’s West End is likely to be high on your to-do list but it is very expensive. Avoiding paying full price usually means running the gauntlet of ticket touts or wasting an afternoon queuing up for hours for a cut-price ticket. But there is an alternative. Check out lastminute.com for some amazing deals. Originally a highly successful online travel agent, lastminute.com has branched out to offer cheap deals on just about every form of entertainment. It’s a double whammy:  save money on tickets and have more time to enjoy yourself.

One final tip for visitors to London: get an Oyster travel card at the tube station at the airport. Costing less than $5, this pay-as-you-go travel card will save you 50% on all underground and bus travel.

Given that a single tube ticket for just central London stations costs more than $6, it’s daft not to get an Oyster card. Just top it up with cash or credit card at tube stations or newsagents then swipe it as you pass the tube turnstiles or hop on a bus, happy in the knowledge you’re not being robbed blind like all the other tourists.

Alltribes March Money Madness, Round 1, Posts 9-12

Here we go with the first round of Alltribes March Money Madness (if you wonder what's going on in these posts, see my article announcing March Money Madness and/or click on my March Money Madness category link and scroll down to read all the posts involved in this subject.)

I've listed each "game" (one post versus another) in segments along with the wording provided by the author when the post was submitted. I've also listed a keyword after each post title to make it easy to vote (as a made-up example, you can just comment: Game 1 - Saving; Game 2 - Investing, etc.) Be sure to comment which one you like the best out of each set of two -- you will help determine the winner! Criteria for the best article is somewhat subjective, but you can use these factors as a guide: 1) practicality of the post 2) how interesting/provocative/unique it is, 3) the "personal-ness" of it and 4) its impact on net worth.

Here are today's games:

GAME 5

• (Flowchart) - This post organizes the set of purchase-related questions into a flowchart, which we can then use as a tool to help ignore emotions and evaluate need.

VERSUS

• (Coke) - Obesity is at record levels, and so are a whole host of other very serious, even life threatening health problems that are almost all preventable.  So many folks don't make the connection between what goes into their mouths and how they feel throughout the day, let alone the condition they're in on the other side of 50. This post tells how being well can make you a millionaire.

GAME 6

• (Mindset) - The one statistic you need to be calculating every month. Hint: It's not your net worth.

VERSUS

• (Means) - This post exemplifies why America found itself in the 2008-2009 financial crisis. Too many people taking too many risks with money they didn't have to buy overpriced assets that could be taken from them once they couldn't meet their financial obligations. Scale this individual problem up by a factor of millions, and you have one of the root causes of The Great Recession.

Benefits and Dangers of Changing Careers and Paths

The following is a guest article by Flexo from Consumerism Commentary. Flexo is currently .

It would be wonderful to live in a perfect world. There would be no war and no poverty, and you could eat dessert before your meal or whenever you like. The weather would always be comfortable and pleasant, and you would never have to watch out for unpopped kernels when you eat popcorn.

A financial Utopia is just as rare. The advice that will get anyone there is familiar to Alltribes readers:

• As early as possible, know which career has the best chance of allowing you to earn lots of money over your lifetime.
• Attend a good school for your career if necessary but don't go into (much) debt.
• Get a great first year salary.
• Work hard, earn more income, save and invest what you have.
• Retire rich and enjoy your Utopian retirement.

This is a popular plan that has guided people to financial success. Each step of the way, however, presents a number of challenges, starting in the beginning. Some people finish high school knowing exactly what they would like to do, in terms of work or a career, for the rest of their lives. However, not only is this rare, but even the most confident high school graduates entering the workforce or college have an excellent chance of changing their mind at least once and likely more than once during their lifetime.

It's easy to forget that a change of course, even if it temporarily slows down progress towards a comfortable retirement, isn't necessarily a bad idea.

As we age, we learn more about ourselves. Someone might uncover latent skills that prove to be a better match for her identity. Someone else might meet a friend who introduces him to a life-changing mission. Not only do we discover who we are with time, but our identity changes everytime there is a new experience. There should be no reason to expect we stay along the same career path as life introduces us to new information about ourselves and about the world.

It's not easy to leave one career and life-long path in favor of another, but there are numerous benefits. Career moves often, but not always, involve switching from a less enjoyable activity to a more enjoyable activity. If you are doing something you enjoy, you are more likely to stay motivated to achieve. Your enthusiasm will be infectuous, helping you be perceived as a leader in the field. Overall, you may feel more fulfilled.

Even with these benefits, consider the dangers before you jump into a new career. You might have to start from the beginning. If the move would require a significant drop in salary without the benefit of long-term growth, you would have to change more than just your job. With significantly less income now and over your lifetime, consider how you will save more to meet your obligations. Reducing your expenses and leaning towards a frugal approach might help you recover some of the loss. If people other than yourself are relying on your income, taking a risk may not be something you are willing to do.

If possible, try your new career or path on a professional level before abandoning your current activities. Working towards two separate goals for a short time can help you compare before you make a decision. And decisions are never final; you can always return to your old path or try a new approach. The more you shuffle, the farther you may stray from the Utopian idea of maximizing your lifetime earnings and net worth.

Life isn't about dying with the biggest bank account, it's about all that you do while you're still given an opportunity to do it.

Star Money Articles and Carnivals for the Week of Jan 18

For weekday updates of what I find to be some of the most interesting personal finance articles on the web, .

And before I get to this week's roundup, I wanted to say that I have three giveaways going on right now. They are:

• A copy of H&R Block at Home (Formerly TaxCut)! 

• A copy of You Need a Budget 

• Access to Sound Mind Investing's website

Sign up using the links above if you'd like to win. And if you want access to winning a TON of prizes this year, sign up for my giveaway newsletter (February will give away $50 in a gift card, a box of personal finance books, and maybe more!).

And now, here are some pieces I found especially worthwhile and some of the carnivals Alltribes was in this week and my posts that were included:

• The Digerati Life asks . 

• The Sun’s Financial Diary makes .

• Lazy Man and Money lists . 

• FrugalDad talks about .

• BripBlap asks . 

• My Dollar Plan covers . 

• Money Smart Life lists .

• Wise Bread covers . 

• Smart Spending tells of . 

• - More Couples Taking the Money Over the Wedding 

• - Where You Live Has a Big Impact on Your Finances

• - What We Got for Christmas

• - Five Ways to Save Big

• - Asset Allocation and Investing Temperament the Sound Mind Investing Way (And Giveaway!)

Enjoy!

P.S. Carnival Hosts -- If my post is in your carnival in a given week, please send me the URL to the carnival and I will include it in my weekly roundup.

Last Chance for a Segregated Roth Conversion

The following is a guest post from . For more thoughts on this topic see 2010 Roth Conversion: Factors to Consider Before Making a Decision.

A tax tsunami is coming at the end of this year. The higher your adjusted gross income (AGI), the closer you live to the coast where the tsunami will hit. This is the last chance you will have to put your assets in a lifeboat and avoid getting swamped with taxes.

At the end of 2010, the Bush tax cuts will expire. The Obama administration is not expected to alter the rates significantly before then. They don't want to be held accountable for raising taxes before the midterm elections. And they would rather blame the previous administration for a crazy expiring tax law.

Right now, tax rates are at a historic low. But after 2010, counting all the tax changes, top marginal tax rates may rise from 44.6% to 62.4%. Thus you will only have to pay a maximum of 44.6% on income you can take before 2011, but after that you may have to pay 17.8% more in tax.

If you have an income over $100,000, this is the first year you can take money from your traditional IRA, pay tax as though that money is ordinary income and convert it to a Roth IRA. This procedure is called a "Roth conversion."

Roth IRA accounts are to your advantage if your tax rate will be higher in retirement when you withdraw the money than it was when you contributed. With a Roth IRA, you pay tax on the acorn. With a traditional IRA, you get a bigger acorn to start with, but you pay tax on the oak. Many families have actually lost money by investing in their traditional IRA when they were young and in a lower tax bracket, only to find themselves in a much higher bracket during their retirement. A year from now, we will all be in a higher tax bracket.

If you execute a Roth conversion this month, January 2010, you do not have to pay the tax on that conversion until April 15, 2011. You also may change your mind. If you decide the conversion wasn't worth it, you can move the money from the Roth account back to a traditional IRA account. This is called a "Roth recharacterization."

Recharacterizing a Roth conversion can be done any time before you file your taxes, including the filing extension. So if you file an extension you can change your mind any time before October 15, 2011. And you can decide to recharacterize part or all of what you converted.

The upside is that you can use all these laws and changes to maximize your after-tax investments. During the next few years, tax planning and management will be a significant part of wealth management. But it needs to be put together as part of a larger plan.

Here's the timeline of how to use a Roth conversion to maximize your investments. Now is the time to do five Roth conversions of equal amounts into five separate accounts. You aren't going to keep them all, so you can convert five times as much as you want to end up keeping and actually paying tax on. Invest each Roth account in a different asset class (e.g., large-cap U.S. stock, small-cap U.S. stock, foreign stock, emerging markets and hard asset stocks).

The five accounts will appreciate differently, but the entire portfolio will be fairly well balanced. Before April 15, 2011, decide if you will be keeping only one account or more than one. If more than one has appreciated significantly, you may want to keep more than one account's conversion. Compute your tax liability for the year and pay the tax, but instead of filing your return, file an extension.

Before the October 15, 2011, extension deadline, decide which of the five accounts you are going to keep. By now, nearly a year and three quarters has elapsed. You can easily determine which account has appreciated the most. Keep that one, and recharacterize the other four. Because you only have to pay taxes on the amount you originally converted, it's like betting on the horse race after the winner has already been determined. After recharacterizing the accounts, file your tax return before October 15.

If all of the accounts decrease in value, recharacterize them all and pay no tax. Financially, you are none the worse for having filled out a stack of paperwork. If only one account appreciates significantly, you only keep one conversion. But you have increased the odds of your Roth account appreciating by five times.

The average return of the S&P 500 is about 11%, but the standard deviation is about 19%. All of the other asset classes have an even higher standard deviation. It is likely, for example, that emerging markets will be either the best or the worst performing asset class over any two-year period. Using this technique you can guarantee that the Roth conversion you keep will have been invested in the best asset class during that year and three quarters.

Segregating each of the five conversions into a separate account allows you to decide to recharacterize or let each account stand separately. The difference in returns between the average and the best account is liable to be 20% or more over the year and a half before you have to choose which accounts to keep. Coupling the 17.8% tax savings and this Roth segregation technique could boost your returns by 30% or more.

In the quite likely event that all five accounts have appreciated significantly, you may decide to keep them all. Once you have reached the maximum tax rate, the top marginal rate does not increase from there. Those most fearful of expectations of higher tax rates soaking the rich after 2010 would be those most likely to benefit from converting everything.

You are a good candidate for a Roth conversion in 2010 if you have the following characteristics. You have an AGI more than $100,000 and so have not been able to convert previously. You have a large IRA that could be converted. You expect your tax bill to be higher in the future. You have sufficient taxable assets to pay the tax. You would like to reduce the value of your gross estate and leave a tax-free asset to your heirs. You are willing to pay estimated taxes and increased tax preparation fees.

Even thought this technique could boost your after-tax returns, be careful. Executing a Roth segregation account requires professional assistance. Such a technique should be just one small part of a larger comprehensive financial plan. And you should seek the guidance of a personal fee-only financial planner and certified public accountant (CPA) who have a legal obligation to act in your best interests. The laws are changing annually, and as a result so is the optimum path.

Maybe You Only Need So Much to Be Happy in Retirement

Here's an interesting bit of information I found in Consumer Reports' :

Retired subscribers' satisfaction with their retirement reached a plateau when their net worth was between $500,000 and $1 million. Having more didn't make much of a difference. But notably, even among those who reported having less than $250,000 in net worth, more than half were highly satisfied with their retirement. In addition, 38 percent of retirees said they depended on a defined-benefit pension for a significant portion of their income.

I'm not sure what to make of this. A few possibilities:

1. Once you get to a certain net worth, having more doesn't make you happier. This is similar to what we've already discussed regarding income -- once people have a certain level of needs and wants covered, making more money doesn't seem to make them happier.

2. People are generally happy in retirement no matter how much they have. 

3. Is it "worth" saving more than $1 million? It doesn't seem to impact "happiness" if you do.

Personally, I'm still socking it away and think I need waaaaaaaaaay more than $1 million to retire. How about you? Anyone else out there have a take on this information?

Update on My Gold Coin Purchases

Early last year I suggested that we all could make money by buying US $1 gold dollar coins. In part of that strategy it said to "deposit the money at your bank (or use it yourself)" once you had the coins. I had a reader recently leave this comment on that post:

I heard today that the US Mint has now stated that credit card purchases will be recorded as cash advances rather than credit card purchases. They said credit cards typically do not give reward points for cash advances. I think this is to stop people from earning points or miles on the coin purchases.

The commenter then linked to  that noted the US Mint had changed its policy because people were loading up on the coins (one buying $800,000 worth -- yikes!), simply returning them to a local bank, and pocketing the rewards.

I'm not sure how this was done since the limit for the free shipping program was two boxes ($500) per president, but I'll let it go since the Wall Street Journal reported that the $800k is true.

On a later, related post titled Alltribes Makes Gold Dollar Coins a Success, a different reader recently left this comment:

The intended purpose of the Circulating $1 Coin Direct Ship Program is to make $1 Coins readily available to the public, at no additional cost, so they can be easily introduced into circulation–particularly by using them for retail transactions, vending, and mass transit. Increased circulation of $1 Coins saves the Nation money.

The immediate bank deposit of $1 Coins ordered through this Program does not result in their introduction into circulation and, therefore, does not comply with the intended purpose of the Program.

I've covered before what I've done with the coins (see A Creative Use for Dollar Coins, Blessing Boxes Keep on Blessing, and Giving Blessing Boxes), but I wanted to give you all an update on where we stand with them.

As a recap, I bought somewhere in the neighborhood of $2,500 in gold coins (the max two per president that qualified for free shipping), earning somewhere in the neighborhood of $45 for my effort. Since then, we've given the coins away in the manners described above, but have also given them:

• To people we know in need (friends, church acquaintances, etc.) -- this is basically what the "blessing box" idea is
• As birthday presents
• As Christmas gifts
• As payment for a local (charitable) paper we receive
• As spending money (I keep them in the coin box of my car)

In other words, I have been circulating them (I didn't take them to the bank.) People LOVE getting the coins since they are still relatively rare, so we keep our stash on hand and give them out here and there as a need arises. We have about $1,000 or so of them left, and once those are gone, I'll likely buy more for the same sort of uses.

Just wanted to update you all and clarify the record -- in case anyone thought I wasn't following the rules. ;-)

How about you? Anyone out there buying/using gold $1 dollar coins?

Net Worth Update for 2009: My Best Year Ever

At least once a year I give an update on my net worth (I used to do it monthly, but there isn't really that much new news each month) and this post is my update for the year ending December 31, 2009.

The summary is that it was my best year on record. A few pieces of info:

• I ended 2009 with my highest net worth ever.

• My net worth was up 28.8% in 2009 -- the highest percentage gain since I started tracking my net worth in 1996 (second biggest gain was in 2003 at 28.3% and third best was 1998 at 22.8% increase.)

• In 2009 I also had the largest absolute dollar gain ever from one year to the next.

• My net worth was up 8.5% from where it was at the end of 2007 (my previous best year-end number.)

• With this result, the compound annual growth rate for my net worth from 1996 until 2009 is at 14.5%.

• My net worth was up 37.9% versus its recession-bottom level in February 2009.

So, in the end, it was simply a great, great year.

What drove the results? Two main factors:

1. The stock market (Wilshire 5000) was up 26.5% for the year (and up 67.6% from its bottom on March 9, 2009). Now I'm not 100% invested in US stocks (I have bonds, international stocks, real estate, bond-like investments, cash, etc. as part of my asset allocation) and there are chunks of my net worth that earn basically nothing (the value of my house, the cash I keep in our emergency fund and for upcoming large purchases, etc.), so you can't simply say I should be up at least 26.5% if the market was up that much. That said, a large part of my net worth is in the US stock market, and for the most part, my net worth goes the way the market goes. In particular, it helped BIG TIME that I was buying all the way down in the darkest days of the crash. Those purchases performed very well over the final months of 2009.

2. My savings rate. I know I harp a lot on getting income high and expenses low so you can create the largest possible gap between them, but the reason I do this is because it makes a HUGE difference in how quickly you can grow your net worth. If you work to grow your career and develop other income streams and keep a tight handle on expenses, you'll have plenty of money to make some wanted discretionary lifestyle purchases as well as grow your net worth by leaps and bounds.

Now that I've written this, I see that there's not much to learn from this post. But I guess I wanted to do two things with it:

1. I wanted to give you a report card on how I'm growing my net worth (so I'm accountable to you in part.) This update was much better than the one last year, don't you think? ;-)

2. Let you know that if you apply the principles we talk about here every day you will have financial success. I'm seeing it and you can too!

How about you? How did your net worth end 2009?

Top 10 FMF Guest Posts of 2009

As regular readers know, I feature a lot of guest posts throughout a year. I like to get a variety of perspectives on money issues, hear from others in different life stages than I'm in, and let readers get money thoughts from someone other than me. In fact, I have so many guest posts that I even have my own policy for them (let me know if you're interested in writing a guest post -- I could use some coming up). So I thought it would be fun for me to highlight what I consider to be the top 10 guest posts here from 2009. Here they are in countdown order, along with key quotes from each:

#10 - Best Ways to Access Your Cash Out of the Country - "While you cannot control the value of the US dollar, you can minimize the damage by finding the best ways to access your cash out of the country."

#9 - Simplicity Can Streamline Your Budget - "Remember that keeping your budget as simple and accessible as possible will benefit your financial health in the long run."

#8 - Life Insurance Reality Check – Do you have enough? - "Among those who already have life insurance, a vast majority does not have enough coverage. Could you be one of them?"

#7 - The 5 Stages of Investing Enlightenment - "Have you experienced the stages to becoming an ideal investor? It is not difficult to learn the tricks of the trade if you put forth diligent effort. For many people, it follows a common pattern of 5 stages."

#6 - Who Are Kid's Gifts Really For? - "Your daughter is two-years old and does not have the capacity to decide what she would like to do with her gifts, at least the ones with monetary value. She will most likely figure out what to do with the toys and clothes! So you have a few options."

#5 - 2010 Roth Conversion: Factors to Consider Before Making a Decision - "As of January 1, 2010, all investors will be eligible to convert funds from a traditional IRA or 401(k) to a Roth IRA, regardless of income level. While this change will present some attractive options for certain investors, people should weigh the costs and the benefits unique to their own specific financial plans and tax situation before deciding if a Roth IRA conversion is right for them."

#4 - 12 Critical Things Your Family Needs to Know - "So how do you make sure that if something happens to you, loved ones left behind won't have to spend hour after hour searching for critical documents or information while agonizing or fighting over what your wishes might have been?"

#3 - Life or Debt? 41 Financial Calculators for Major Life Decisions - "Making major life changes before you're financially ready can set you back dramatically on other goals you may have, or even make them unreachable. Use the calculators below to check your financial preparedness for major life decisions and events."

#2 - Trying to Earn More Money? Stop Wasting Your Time - "Some simple techniques that Nicole and I came up with to focus her on earning more money."

#1 - Nine Tips on How to Advance in Your Career - "Some tips on how to advance your career based on my personal experience."

Alltribes March Money Madness, Round 1, Posts 5-8

Here we go with the first round of Alltribes March Money Madness (if you wonder what's going on in these posts, see my article announcing March Money Madness and/or click on my March Money Madness category link and scroll down to read all the posts involved in this subject.)

I've listed each "game" (one post versus another) in segments along with the wording provided by the author when the post was submitted. I've also listed a keyword after each post title to make it easy to vote (as a made-up example, you can just comment: Game 1 - Saving; Game 2 - Investing, etc.) Be sure to comment which one you like the best out of each set of two -- you will help determine the winner! Criteria for the best article is somewhat subjective, but you can use these factors as a guide: 1) practicality of the post 2) how interesting/provocative/unique it is, 3) the "personal-ness" of it and 4) its impact on net worth.

Here are today's games:

GAME 3

• (Noobs) - Advanced travel hacking is an art form. But, contrary to popular belief, getting started is actually quite simple.  So easy even a toddler could do it.  Literally. This post details some tips and tricks to take you from naysayer to noob in as short of time frame as possible.

VERSUS

• (Stress) - There is a new “diagnoses” of sorts that has come onto the scene and is growing fast since the recent housing crash.  The acronym is all too fitting… M.A.D. or Money Anxiety Disorder is basically a fancy way of saying that people are more stressed out than ever about all the debt they have gotten themselves into. I touch on how this “disorder” has effected our lives, how we stumbled upon it by accident, and the plan we have to overcome it.

GAME 4

• (Improve) - While many of the following thoughts can improve your finances, they have the potential to have a much broader impact on your life.

VERSUS

• (80%) - How would it feel if you found out that you were wasting 80% of your time doing things that weren’t getting you any closer to your goals?  What if you learned that you could stop, or at least quit focusing on, 80% of the things you do on a day to day basis and still enjoy the same success you do today – still live the same life you’re living? What new and exciting challenges could you add to your life if 80% of the time you spent managing your money and your eco-footprint were simply gone?

What Makes You Think You Can Do Your Own Taxes?

Ha! I'm sure the title of this post will irk a few people from the get-go, but I like it and I'm going to stick with it. ;-)

As you know, I'm generally a personal finance do-it-yourselfer. But in the area of taxes, I don't do them myself. I use a CPA for some very good reasons.

Recently I posted When You Should and Shouldn't Do Your Own Taxes. It listed some things we all should consider when deciding whether or not to do our own taxes. In particular, I highlighted the story of Flexo from Consumerism Commentary, no financial lightweight, who hired an accountant and ended up saving $15,000. If Flexo needed help to save more, don't you think maybe you and I might need some help too?

Now many of you will say "I use TaxCut/TurboTax/some other software and it does what I need it to." Oh yeah? How do you know that?

The reason I ask is . He notes that when his taxes were simple, he did them himself and things were fine (as far as he knew). Then life (and finances) started getting a bit more complicated. That's when this happened:

One year after putting in all of my data the tax software said I owed the IRS nearly $4,000. That’s impossible, I thought. We had as much taken out of our paychecks as possible through work, I was paying estimated quarterly taxes, and was itemizing deductions so that we could deduct as much as possible. There had to be a glitch in the software or I was missing so I plugged the numbers in over and over for about a week straight only to come to the same result.

With that, I knew it was time to seek professional help. We asked around with some friends and co-workers about CPAs that specialize in small businesses and self-employed taxpayers, and I made a few calls around and interviewed a few of them. We eventually found one not too far down the road and their name came up a few different times from the people we asked. So, I set up an appointment. After sitting down with the accountant for about an hour discussing our situation, looking over some numbers, and doing some calculations she knew she could help me. A few days later I was thrilled when I received a call stating that I now only owed somewhere in the neighborhood of $2,500. Wow, that phone call and meeting just saved me about $1,500. Sure, the cost of having my taxes done increased compared to doing it myself, but at around $300 it was some of the best money I ever spent.

Now this isn't coming from some bum off the street. Jeremy is a pretty sharp guy. So if he needed help, do you think maybe some of us do too (even if we don't know it)?

Now I'm not saying that everyone needs tax help (BTW, Jeremy notes that there's a BIG difference between a tax preparer and a CPA -- something I agree with completely.) If your taxes are simple and rather straight-forward, then you're probably fine doing them yourself. It's when life's complications start to set in that you'll probably need help. And the more complications, the more likely that you'll need some advice. (For the record, I said this four years ago when I posted Why I Use a CPA to Do My Taxes -- I'm not just making it up now.)

What sort of complications? Jeremy lists these three:

1. You own a business.
2. Going through a major life change.
3. Real estate or taxable investment dealings.

If nothing else, I'd suggest you a CPA in your area (get recommendations from successful friends), set up and informational meeting or lunch (most will do this for free), and see if they think they can help you (have them be specific in how they can do this.) What is there to lose? Nothing really. But in the end, you could end up saving yourself a good chunk of change.

Box of Books #3

My last box of books was a huge success -- I gave them away through my giveaway newsletter -- so I thought I'd do it again (if you want a chance to win, be sure to sign up for my newsletter here -- I'll be giving them away in February.) For now, here are the books I've received from publishers and a bit about them (from Amazon):

• - Leadership expert John Maxwell believes attitude is one thing that can make all the difference in your life---and now shows you how you can make it your best asset.

• - Most people work hard for their money, and it is sad to see them lose it so quickly in the stock market. They assume that because they are successful in their careers or businesses, they will be successful in investing. To make money as a doctor, lawyer or business owner requires a certain skill set that makes one's products or services desirable in the marketplace. Investing requires a completely different skill set. A successful investor does not need an advanced degree in economics. He or she does not even need to be that smart. A successful investor only needs two things: 1) capital to invest and 2) the ability to recognize good companies when they are selling for less than what they are worth. Few people find success in stock market investing because they do not know how to recognize good companies that are trading at reasonable prices. Basic knowledge of how to evaluate investments will help them make better choices when deciding where to put their money. This book teaches investors how to recognize good companies, evaluate their current worth, decrease the chances of making investment mistakes, take advantage of Wall Street's short-sightedness, build wealth through stock market investing ... and much more.

• - A trust and estate lawyer to the stars offers an engaging look at how to avoid numerous estate planning mistakes. In The 101 Biggest Estate Planning Mistakes, author Herbert Nass, an estate planner for some of today's most famous celebrities, offers an entertaining look at what not to do when setting up an estate plan, or administering an estate. By examining the mistakes made by some of the most well-known celebrities-from Bob Marley to John F. Kennedy, Sr. and Jr.-this book will guide readers toward making a successful estate plan and help them avoid many common pitfalls. Chapters cover such topics as: mistakes involving tangible personal property, real estate, executors and trustees, minors, or persons with disabilities; as well as disgruntled family and friends left behind. Given the emotional, financial, and legal issues that arise from the death of a loved one-and the substantial assets that are transferred from one generation to the next at this time-understanding estate planning is essential. This book will put you in a better position to make more informed estate planning decisions.

• - Welcome to the biggest financial crisis to face the American consumer since The Great Depression. For the last seven years, the US consumer has been on a credit binge. Credit has been America's greatest addiction. Unfortunately, the party is over and the bill is due. Today, we face a debt crisis in America unlike any other in history. The indebted US consumer is facing a trap that appears to be hopeless. Low credit scores, dealing with debt collectors, late payments, and foreclosures have become commonplace in the lives of millions of Americans. It doesn't have to be this way! Deceptive Money offers you answers to the perplexing problem of debt, along with realistic and step-by-step directions to remain debt free. If you are serious about getting out of debt, you will find everything you need from A to Z. Now is the time to get out and stay out of debt. This book is one of the most comprehensive and complete resources on debt. The true solution to unlocking the trap might surprise you. Whether you are facing a debt crisis, worried that your debt is getting out of control, or just want to make sure you don't fall into the trap, this book is for you. Deceptive Money is the key that will help you open the door to financial freedom.

• - Despite all the headlines about Bernard Madoff, who pleaded guilty to running a $65 billion Ponzi scheme, he is still shrouded in mystery. Why (and when) did he turn his legitimate business into a massive fraud? How did he fool so many smart investors for so long? Who among his family and employees knew the truth? The best person to answer these questions—and tell the full story of Madoff's rise and fall—is Erin Arvedlund. In early 2001, she was suspicious of the amazing returns of Madoff's hedge fund, which no one could explain. Her article in Barron's, based on more than one hundred interviews, could have prevented a lot of misery, had the SEC followed up. But almost no one was willing to believe anything bad about "Uncle Bernie"—so nice, so humble, so generous to charities. As Arvedlund shows, Madoff was no ordinary liar, but a master of the type of lies people really wanted to believe. He kept his clients at a distance and allowed handsomely paid friends to solicit new ones for him; playing hard to get created an irresistible mystique. Now, Arvedlund tackles the tough questions that are still unanswered in the wake of Madoff's collapse.

• - Revised and updated, this new edition of The Complete Idiot's Guide to Personal Finance in Your 20s and 30s explains all the basic information anyone in this age group will need to manage their personal finances or enhance their financial plan to yield better returns on their investments.

• - Phil is a devious mastermind. He'd be the Lex Luthor of tightwads if Lex Luthor was hilarious. Most of the advice in this book will at best destroy your treasured personal relationships and at worst get your butt kicked, but that doesn't take away from the fact that it is awesome. If you've ever done something cheap and blushed slightly, you'll be gratified to know that not only is there someone else doing that exact cheap thing -- he's perfected a system and is willing to share his knowledge with a grateful public.

There you have them. I'll be giving them away in February (most are like-new, but some are slightly used), so sign up for the giveaway newsletter asap if you want a chance to win.

Win a Free Copy of You Need a Budget!

I am giving away a copy of ! We'll start with a testimony from a YNAB user. Here goes:

“Before YNAB, I was not saving anything, but had to dip into savings for about $500.00 a month. Since being on YNAB, I have been able to see where I needed to cut back and where I needed to save more for periotic expenses. I now have two months’ worth of expenses in my checking account, and know when to stop spending for discretionary purchaes. I love it!!!”

Good stuff, huh?

Here's how the giveaway will work:

1. All you need to do to enter is to leave any comment on this post. Be sure to leave your email address (no one else will be able to see it) when you leave the comment.

2. Sometime next week, I'll select the winner at random and announce the winner on this post.

3. I will email the winner, get their information, and arrange for them to receive their prize.

As always, the standard rules apply.

Good luck! Post a comment below for your chance to win!

BTW, if you've been wondering about buying YNAB and this contest is making you wait a bit, don't worry. Go ahead and get a copy of YNAB and if you win, the people at YNAB will refund your purchase price (note: this only applies to people who purchased the product in the last week or so -- you can't get a refund if you purchased the product a month, six months, or a year ago.) ;-)

Help a Reader: How to Stay Motivated

Here's a question a reader recently left on my post titled How to Get Rid of $106,000 in Debt:

My family is in the middle of our debt snowball. We're one year into it and our motivation is flagging.

We make $50K/year and last year we paid off $20K. We still have $55k left. My husband and I are both working two jobs and we brought our groceries down to $50/week. Last week we had some unforeseen expenses and had to bring the grocery bill down to $28 for the week, including diapers.

In addition, every time we think we're going to get a snowball, our gas, electricity, etc. goes up. So we're paying out $1,000/month in minimum payments.

It's very difficult this time of year because my husband is a mechanic and this is the slow season. On top of that, it's winter and it's hard to keep your energy up during this time of year. Does anyone have any tips on how to stay motivated?

Anyone have some advice for her?

Sound Mind Investing's Just-the-Basics Strategy (And Giveaway!)

The following is a guest post from . For more on SMI, see my review of their book and their website. Also check out the end of this post to win a free one-year subscription to their website.

Now that we've discussed the foundational steps to becoming a successful investor and explained how to make your most important investing decision, it's now time to talk about a specific investing strategy.

At Sound Mind Investing, we've developed two core strategies. Most of our readers choose one of the other, depending on how much time they want to devote to their investing.

The simpler of the two is what we call , a strategy built around the use of "index" funds. Such funds are designed to match the performance of certain stock indexes. For example, an S&P 500 fund is designed to mirror the performance of the large companies that make up the S&P 500 index.

Index funds offer a simple way to match the performance of the overall market or certain parts of the market, such as small companies or "tech" stocks. Rather than trying to "beat" (i.e. perform better) than the market, indexes offer investors a way to match market performance. 

Just-the-Basics calls for using just four specific index funds.  If you choose the right ones (we explain to SMI readers exactly which funds to choose and in what proportion), four funds is all that is required to broadly diversify across the U.S. stock and bond markets, as well as including some international holdings. Vanguard, by the way, is one of the world's largest and most respected investment management companies.

If you're a tax-conscious investor (and it is wise to be one!), you'll appreciate the tax-efficiency of Just-the-Basics. Due to its static portfolio mix, the same index funds can be held for years with only small rebalancing adjustments made once a year. This allows the majority of gains to be deferred for years, and eventually be taxed at lower long-term capital gains rates (assuming that tax laws don't change, which may be quite an assumption).

Just-the-Basics is the epitome of simplicity, taking most people less than an hour per year to administer!
And over the past decade, Just-the-Basics has more than held its own vs. the overall market (as measured by the Wilshire 5000, the broadest measure of U.S. stocks). Typically its returns are within a percentage point or two of the broad market — exactly what we're hoping for with an indexing strategy.

But suppose you want to try to do better than the market? What then? You may be a candidate SMI's strategy — an approach that's outperformed the market in 10 out of the past 11 years. Learn more in our next post.

---------------------------------------------------

FMF here again. I am giving away a free one-year subscription to the Sound Mind Investing website. Here's how the giveaway will work:

1. All you need to do to enter is to leave any comment on this post. Be sure to leave your email address (no one else will be able to see it) when you leave the comment.

2. Sometime next week, I'll select the winner at random and announce the winner on this post.

3. I will email the winner, get their information, and arrange for them to receive their prize.

As always, the standard rules apply.

Good luck! Post a comment below for your chance to win!

Six Steps to a Great Retirement

Consumer Reports lists as follows:

• Live modestly. This was the top "best step" listed by retirees who said they were highly satisfied with their lives.
• Maximize your savings. Even if you don't have a defined-benefit plan, regularly contributing to a 401(k), 403(b), IRA, or other investment vehicle pays off, our satisfied retirees told us.
• Reduce debt. 74 percent of retired respondents who were free of major debt reported being highly satisfied with their retirement.
• Don't invest too conservatively. Taking on even a moderate amount of risk pays off.
• Study your options. When you design your dream retirement, also devise a Plan B in case you're forced to retire early or can't sell your home (a predicament of 8 percent of surveyed retirees).
• Take the intangibles seriously. Stress affected overall satisfaction in retirement even more directly than net worth, our survey found. A quarter of retirees cited nonmonetary stresses such as family relations, poor health, a loss of identity, and boredom.

They don't say...what an interesting list of to-dos. I wish I'd thought of those. ;-)

As a review for those who can't get the sarcasm through words on a screen, I'll highlight my take on each of these issues:

1. Spend less than you earn is my best piece of financial advice.

2. Save early, save often. I contribute the maximum amount to my 401k, my HSA, our Education Savings Accounts, our 529s (the amount to get the maximum tax break) and my SEP IRA. Good thing I've been doing this for awhile since time is the #1 factor that impacts the performance of savings/investments.

3. No debt here for over a decade -- ever since we paid off our mortgage.

4. I have most of my investments in index funds in Vanguard Admiral shares.

5. I know about how long it will be before I retire and as such have my retirement planned somewhat. My "plan B" would be to work longer versus retiring early (which is my current plan.) Plan C would be to count on getting something from Social Security (I'm planning on nothing at this point.)

6. Not sure how anyone can plan for the intangibles completely. I do swim four times a week and try to eat a fairly healthy diet (my wife makes sure of that). I also have a healthy and happy family life. But could life still throw me a curve ball? Sure. But I have faith that I can make it through almost anything.

I go through all of these not to show how "great" I am doing, but rather illustrate that these are basics to retirement planning and that we cover stuff like this all the time here. That said, it is nice to have the information reaffirmed by the study Consumer Reports highlighted.

Best of Money Carnival Now Up

Just a note to let you know that is now up. Congrats to all participants and especially the winning post, . I made the carnival as well with my post titled How to Get a Raise or Promotion.

Gave to Haiti -- Hope Others Do the Same

Just a note to cover a few things:

1. I made a donation to help the earthquake victims in Haiti this weekend. I used proceeds generated by FMF to support and their work there.

2. Wanted to encourage you all to do the same. No matter how much people are hurting here in the US (from the tough economy), we are substantially more wealthy than the average citizen of Haiti. And now they've been hit with this devastating earthquake. Please consider giving to the relief agency of your choice to help them.

I heard over the weekend that . As the Chronicle of Philanthropy reports, by comparison, such charities had raised a quarter that amount — $30-million — in the three days after the 2004 Asian tsunamis, and $108-million in the four days following Hurricane Katrina. So people seem to be helping as they can. Let's keep it going.  

Graduate Degrees Raise Income

We've covered the value of a college degree (a few times) as well as the value of an elite college, so it made sense for me to post on this Wall Street Journal piece saying that . Their thoughts:

People with master's degrees post median annual incomes almost twice as high as the typical full-time worker with only a high-school diploma, says a 2007 study by the College Board, New York—$61,300, compared with high-school grads' median annual earnings of $31,500. Compared with bachelor's degree holders, the master's degree premium is 20%—$61,300, compared with $50,900. Median income for people with professional degrees in such fields as law, medicine or engineering was $100,000, more than three times that of high-school graduates and 96% more than bachelor's degree holders.

Over the course of a lifetime, the ratios are similar. People ages 25 to 64 who have master's degrees tend to earn 93% more than high-school grads over a 40-year career, and 20% more than bachelor's degree holders, the study shows. And those with professional degrees earn 187% more income than high-school grads over the course of a 40-year career, and 78% more than bachelor's degree holders, says the study by Sandy Baum and Jennifer Ma.

A few thoughts here:

1. As you probably know, I'm a big fan of graduate degrees since my MBA has been a big key to my financial success.

2. You have to apply the same principles to a graduate degree that you do to an undergrad one to make it a worthwhile investment -- namely, you need to match the post-graduation expected salary with the cost of getting the degree. In other words, if it's reasonable to expect you'll make a lot more with the grad degree, then it's worth more to get it. If you don't expect to make much more with it, you really have to think over whether it's worth the time and cost associated in acquiring it.

3. Just having a graduate degree guarantees you very little. You still need to take the right steps to grow your income even if you get an advanced degree. If you don't actively work to grow your career, the value of your graduate degree will be far lower than what it could have been.

Alltribes March Madness, Round 1, Posts 1-4

Here we go with the first round of Alltribes March Money Madness (if you wonder what's going on in these posts, see my article announcing March Money Madness and/or click on my March Money Madness category link and scroll down to read all the posts involved in this subject.)

I've listed each "game" (one post versus another) in segments along with the wording provided by the author when the post was submitted. I've also listed a keyword after each post title to make it easy to vote (as a made-up example, you can just comment: Game 1 - Saving; Game 2 - Investing, etc.) Be sure to comment which one you like the best out of each set of two -- you will help determine the winner! Criteria for the best article is somewhat subjective, but you can use these factors as a guide: 1) practicality of the post 2) how interesting/provocative/unique it is, 3) the "personal-ness" of it and 4) its impact on net worth.

Here are today's games:

GAME 1

• (Dumb) -- There are many reasons why people fall in debt, such as medical issues, school, starting a business and purchasing a home. Some situations you do not have much of choice and the debt is for a good reason, for example if you get in debt due to school it’s fine because in the long run you will be able to make up for it. However there are some bad reasons why many fall in debt. This post illustrates the top 11…well not so good reasons to fall in debt.

VERSUS

• (Frugal) - 55 responses readers had to the question, “what is your favorite money saving tip”?

GAME 2

• (Goals) - The journey to financial success is not a sprint — you are not going to get rich quickly — but a marathon. It doesn’t matter how swiftly you pay off your debt or save for retirement. The important thing is to actually make the effort. If you don’t start, you can never finish. To know where you’re going, you need to set goals.

VERSUS

• (Mean) - The definition of median and mean and the difference between the two terms is poorly understood by many people and while in many data sets, there is only a marginal difference between the two from a practical standpoint, there is sometimes a stark difference between the two.  As I’ll outline in this article, people toss around terms like “average”, mean, median and other statistical nomenclature without either understanding what they’re talking about themselves, or with the intent to silence critics with ‘fact’. Understand that various entities routinely manipulate how a piece of data is presented in order to beguile you, the recipient, in order to advance their agenda.

Win a Free Copy of H&R Block at Home (Formerly TaxCut)!

I've been giving away things like crazy here the past two weeks. Later today I'll name the winners for my latest You Need a Budget and Sound Mind Investing giveaways. I'll also soon be naming the winners the winners of a $50 gift card, some free books, and copies of TurboTax that I announced in my January giveaway newsletter (If you haven't yet signed up for the newsletter but want a chance to win some of the great prizes I have coming up, sign up here). Anyway, it's lots of fun to be Santa Claus in January! ;-)

Somehow I missed the fact that TaxCut tax preparation software had changed its name to H&R Block at Home. Any way, if you were out of the loop too, consider yourself now informed! ;-)

Today the kind people at H&R Block at Home have given me a copy of H&R Block at Home Deluxe to give away to one lucky winner. Here's how the giveaway will work:

1. All you need to do to enter is to leave any comment on this post. Be sure to leave your email address (no one else will be able to see it) when you leave the comment.

2. Sometime next week, I'll select the winner at random and announce the winner on this post.

3. I will email the winner, get their information, and arrange for them to receive their prize.

As always, the standard rules apply.

Good luck! Post a comment below for your chance to win!

Three Easiest Ways to Earn More Money

I Will Teach You to Be Rich lists the as follows:

1. Freelancing
2. Productizing (creating a product and selling it)
3. Getting a higher salary

I've covered all of these in one form or another in my list of 11 great ways to earn more money. But if I was forced to list my top three in order, here's how I'd rank the three easiest ways to earn more money:

1. Your career. You can do a lot to make more money from your career -- ask for a raise, get a promotion, or change jobs/companies (which usually comes with a pay raise.) In addition, the one thing I like best about this tip is that the gains are cumulative -- a 6% raise this year is on top of the 5% raise last year and on and on. They build upon each other over time and thus can have a huge impact on what you earn. The keys to being successful in this area are demonstrating that you deserve more money and marketing yourself appropriately. And remember, you'll have some years where you get minimal raises, but others where they can be much bigger. Hopefully they work together to give you a good average increase through the years of your career.

2. Create your own side business. The two best sources for what sort of business you might be able to create are 1. what you do in your current job (you could turn these into consulting, freelance, or teaching jobs) and 2. your hobbies (think bike repair, creating and selling crafts, dog sitting for pet lovers, etc.) This will take more effort for less reward than #1, but once you build up the business, you can generate a good side income. In addition, it could eventually grow to the point where it replaces your current job.

3. Maximizing your investments. This may not seem like a great way to earn more money (or grow your wealth, if you prefer since much of the gain could be in price appreciation), but it can be a significant source for growing your net worth. Simply earning an extra 1% on your investments versus what you currently get will make HUGE difference in what you earn. How do you do this? Be sure you select the proper asset allocation (4 rules for asset allocation can be found here) and you regularly rebalance your investments (more on this here, here, and here). If you've done those things and still would like to do more, the best way to do so is also the easiest: save more and do it now. Yep, TIME is actually the #1 factor in making the most of your investments. Thus the old adage, "save early and save often."

If you're interested in earning more money, I have over 360 ideas on how you can go about doing so. For instance, here are 198 money-making ideas from the early years of Alltribes, 82 money-making ideas from 2008, and 61 money-making ideas from 2009. Check them out if you'd like to make more money.

The Prosperity Gospel

For those of you new to Alltribes, I post on The Bible and Money every Sunday. Here's why. If you enjoy this post and would like to receive free, daily suggestions on how to grow your net worth, you can subscribe to Alltribes using your feedreader and .

The following is an excerpt from . This excerpt and the one next week will deal with what the author calls the two extremes of how Christians view money. He starts off the comparison with this: "When approaching prosperity as a whole, many Christians take one of two extremes:  Either prosperity is evidence of Godliness, or it is evidence of worldliness, selfishness, and sin.  Neither view is Biblical, and both contain colossal errors when standing next to the truths of scripture.  For most, these philosophies are not quite so blatant, but their subtle undertones shape many Christians’ thoughts and actions towards money."

The Prosperity Gospel

The beliefs that are typically referred to as the “prosperity gospel” or “health and wealth gospel” more or less sound something like this:  true obedience to the Lord is rewarded by material prosperity, Godliness can be seen in the size of one’s portfolio, righteousness equals riches, or it is God’s will to give money, cars, big houses, and success to those who give or obey.  This viewpoint crumbles when approached by an honest look at God’s word.  Simple reasoning negates a prosperity gospel on several fronts.  The following section is designed to show, from the scripture, the flaws of such doctrines.

First, there are many places in the Bible that describe wicked men who have prospered.

“For the wicked boasts of his heart's desire, and the greedy man curses and spurns the LORD…his ways prosper at all times; Your judgments are on high, out of his sight; as for all his adversaries, he snorts at them…Arise, O LORD; O God, lift up Your hand.” (Ps. 10:3,5,12)

“Rest in the LORD and wait patiently for Him; do not fret because of him who prospers in his way, because of the man who carries out wicked schemes.” (Ps. 37:7)

“Behold, these are the wicked; and always at ease, they have increased in wealth.”(Ps.73:12)

“Why do the wicked still live, continue on, also become very powerful...they spend their days in prosperity, and suddenly they go down to Sheol.” (Job 21:7,13)

“Though he [the wicked man] piles up silver like dust and prepares garments as plentiful as the clay, he may prepare it, but the just will wear it and the innocent will divide the silver.  He lies down rich, but never again; he opens his eyes, and it is no longer.” (Job 27:16-17,19)

“Why has the way of the wicked prospered?  Why are all those who deal in treachery at ease?” (Jer. 12:1)

“The wicked earns deceptive wages.” (Prov. 11:18)

The scripture clearly relates that the wicked can in fact prosper.  This is an inconsistency with God’s apparent desire to give material abundance as a reward to those who obey His commands.  A person who equates material wealth with spiritual growth can make no logical sense of these passages and contemporary examples of the same truth.

Continuing along this same line of thinking, one would naturally wonder whether or not the Bible ever condemns someone who is rich.  If so, we cannot assume that luxury or wealth are to be automatically equated with righteousness.  Several passages demonstrate this principle:

“Come now, you rich, weep and howl for your miseries which are coming upon you.  Your riches have rotted and your garments have become moth-eaten.  Your gold and your silver have rusted; and their rust will be a witness against you and will consume your flesh like fire. It is in the last days that you have stored up your treasure...You have lived luxuriously on the earth and led a life of wanton pleasure; you have fattened your hearts in a day of slaughter.”  (James 5:1-3,5)

“Because you say, ‘I am rich, and have become wealthy, and have need of nothing,’ and you do not know that you are wretched and miserable and poor and blind and naked, I advise you to buy from Me gold refined by fire so that you may become rich…therefore be zealous and repent.” (Rev. 3:17-19)

“Now the Pharisees, who were lovers of money, were listening to all these things and were scoffing at Him.” (Luke 16:14)

“And turning His gaze toward His disciples, He began to say, ‘Blessed are you who are poor, for yours is the kingdom of God.  Blessed are you who hunger now, for you shall be satisfied…But woe to you who are rich, for you are receiving your comfort in full.  Woe to you who are well-fed now, for you shall be hungry.” (Luke 6:20-21, 24-25)

“And Jesus said to His disciple, ‘Truly I say to you, it is hard for a rich man to enter the kingdom of heaven.  Again I say to you, it is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of God.” (Matt. 19:23-24)

The scriptures are filled with condemnation for those who say, “I am rich, and have become wealthy, and have need of nothing.”  Those who trust in riches rather than Christ  are “wretched and miserable and poor and blind and naked.”  In light of these passages, one can clearly see that the Christian message speaks to something far deeper than your physical surroundings.  One cannot connect physical comfort and luxury with piety.

Further still, if prosperity is the mark of Godliness, then it would mean that all the Godly men of the Bible would have been wealthy.  This is simply not the case.  In fact, the apostles themselves were anything but possessors of great material wealth and status.

“For, I think, God has exhibited us apostles last of all, as men condemned to death; because we have become a spectacle to the world, both to angels and to men.  We are fools for Christ's sake, but you are prudent in Christ; we are weak, but you are strong; you are distinguished, but we are without honor.  To this present hour we are both hungry and thirsty, and are poorly clothed, and are roughly treated, and are homeless…we have become as the scum of the world, the dregs of all things.” (1 Cor. 4:9-11,13)

“I [Paul] have been in labor and hardship, through many sleepless nights, in hunger and thirst, often without food, in cold and exposure.” (2 Cor. 11:27)

“For am I now seeking the favor of men, or of God?  Or am I striving to please men?  If I were still trying to please men, I would not be a bond-servant of Christ.” (Gal 1:10)

Paul explains that his and the apostles’ lives were far from lavish, opulent, and prestigious.  Quite the opposite in fact:  They are described as weak, without honor, hungry, thirsty, poorly clothed, homeless, the scum of the world, the dregs of all things, often without food, and in cold and exposure.  These passages make it very hard to believe that the apostles lived the life of extravagance and status promised by so many health and wealth “preachers.”

I hope you see the prosperity gospel crumbling against the truth of God’s word.  The final nail in the coffin is found in the life of our Savior Himself.  Christ, our example in perfect sanctification, was not marked by material wealth either: “And Jesus said to him, ‘The foxes have holes and the birds of the air have nests, but the Son of Man has nowhere to lay His head.” (Luke 9:58)  Jesus Christ did not live a life of material wealth.  How does the prosperity gospel respond to this?  God rewards obedience with luxury, yet Christ was “homeless”?  It doesn’t make sense.  If we believe affluence, success, prestige, and comfort is God’s will for our life, we forget where the will of the Father led Christ.  It led Him to the cross.

The fact that our Savior was not wealthy does not condemn prosperity as sin, but it does close the door on any notion of Godliness necessitating prosperity and vice versa.  From His humble birth in a barn to His modest trade as a carpenter, God’s own Son was not rich.  This should mean a lot to us.  I believe Christ lived a meager physical existence in order to prevent any confusion in our minds as to what actually defines true riches.   This belief comes from the fact that Jesus is described as “rich” in scripture, but His wealth was of a different kind.

“Behold, My servant will prosper, He will be high and lifted up and greatly exalted…He has no stately form or majesty that we should look upon Him, nor appearance that we should be attracted to Him.  He was despised and forsaken of men, a man of sorrows and acquainted with grief; and like one from whom men hide their face.  He was despised, and we did not esteem Him…His grave was assigned with wicked men, yet He was with a rich man in His death, because He had done no violence, nor was there any deceit in His mouth.  But the LORD was pleased to crush Him, putting Him to grief; if He would render Himself as a guilt offering, He will see His offspring, He will prolong His days, and the good pleasure of the LORD will prosper in His hand.  As a result of the anguish of His soul, He will see it and be satisfied; by His knowledge the Righteous One, My Servant, will justify the many, as He will bear their iniquities.  Therefore, I will allot Him a portion with the great, and He will divide the booty with the strong; because He poured out Himself to death, and was numbered with the transgressors; yet He Himself bore the sin of many, and interceded for the transgressors.” (Is. 52:13, 53:2-3,9-12)

Christ “will prosper…and the good pleasure of the Lord will prosper in His hand,” but the prosperity of our Savior was “a result of the anguish of His soul…because He poured out Himself to death…He Himself bore the sin of many.”  Christ’s treasure is the glory of the Father and the completion of His will accomplished on the cross--salvation to sinful man.  This, my fellow believers, is wealth indeed.

Our precious Savior came to earth with “no stately form or majesty that we should look upon Him, nor appearance that we should be attracted to Him.  He was despised and forsaken of men, a man of sorrows and acquainted with grief; and like one from whom men hide their face.  He was despised, and we did not esteem Him.”  This is a far cry from the life of ease, luxury, happiness, and success promised by those who twist the Gospel to serve themselves.  If the will of the Father was “pleased to crush Him,” why would we assume His will for us is a big house on the nice end of town, a new car, a respectable high income job, yearly vacations to the tropics, and prestige in the community and workplace?  Christianity is about the cross not the country club. 

“Therefore, since Christ has suffered in the flesh, arm yourselves also with the same purpose.” (1 Pet. 4:1)  Think about these ideas for a few moments.  Take the time to reflect over your expectations of God’s will worked out in your life.  Does it more closely resemble Peter and the apostles who were “rejoicing that they had been considered worthy to suffer shame for His name,” (Acts 5:41) or a subtle expectation that if you try your best to be good God will give you what you want?  Some Christian’s perception of God sounds more like Santa Claus than Jesus Christ.

This entire section can be wrapped up with one simple premise: Christ was not rich in material wealth; therefore, it is impossible to assume that material riches necessarily reflect or reward Godliness.  Let us close the book on the prosperity gospel.  When approached with such notions, we must answer as the apostle Paul:

“If anyone advocates a different doctrine and does not agree with sound words, those of our Lord Jesus Christ, and with the doctrine conforming to godliness...men of depraved mind and deprived of the truth, who suppose that godliness is a means of gain.  But godliness actually is a means of great gain when accompanied by contentment.  For we have brought nothing into the world, so we cannot take anything out of it either.” (1 Tim. 6:3,5-7)

Update: Here's the post on The Poverty Gospel.

A Realistic Look at Investing in Gold Coins

The following article is a guest post by Shaun Connell, a gold coin enthusiast from .

If you are going to be a successful investor, then you need to be as realistic as possible. Many people get in trouble with their portfolio because they are too ambitious or they are not looking at the realities of the current market. For the sharp investors out there, the idea is to consider all of the factors and come up with an approach that makes real, common sense. This goes for gold coins, especially.

If you are trying to figure out how much gold to include in your investment portfolio, then there are some things that you need to know. Many people have been successful investing in gold coins, but it's smart to temper your expectations a bit.

Gold as a long term stabilizer

What you should know about gold coins is that they need to play a very specific role in your investment plan. Like many precious metals out there, gold should be more of a long term solution than anything else. When you put money into stocks and mutual funds, you are hoping for the best, but there is always a chance that something could happen to that capital.

There is absolutely no chance that gold coins are going to lose all of their value, so putting your money into them is a way of making sure that you have something tangible. This should be the role of gold coins in any realistic portfolio.

Don't expect unrealistic returns

Though gold certainly has the potential to rise a great deal in value over the course of a year, you cannot expect too much out of it. Gold is at high levels right now and the demand remains relatively high. That means that you can expect for your gold coins to keep their value and to rise a little bit over the next few years.

Don't go into the investment process expecting the coins to triple in value, though. If you have this mindset, you will be disappointed and you will be much more likely to end up with a poor looking portfolio.

Diversify, Diversify, Diversify

Though it is certainly fair to extol the virtues of investing in gold, you have to be open to a comprehensive investment approach. Investors who put all of their faith in any one option are limiting the amount of profit that they can make.

If you want to invest like the experts, then you will place just a percentage of your total capital in gold coins. A good place to start is perhaps putting 5% or 10% of your total investment money into gold coins, while investing some more in gold bars and gold-based funds. This will allow you to have a diversified portfolio that has the ability to growth steadily and quickly.

Understanding the value of a good price

Don't think that just because you are buying gold coins, it is alright to get them at any price. With any investment product, you need to be looking for the right entry point. This goes for stocks, real estate, business ventures, and your gold buying. If you spend a little bit of time searching for solid gold prices, you will give your portfolio the most value possible.

Likewise, it is relatively easy to know when the price of gold is going to be at a low point and at high points, since gold is tied to the US dollar and it is tied to some relatively accessible global trends. Keep up with the markets and you will ultimately benefit from getting in on gold coins at the lowest possible price mark.

FMF Feb Newsletter

Welcome to the February 2010 issue of the Alltribes e-newsletter!!!!!!

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Win Free Tax Preparation from CompleteTax.com

Welcome FMF newsletter readers! Here's a chance for you to win free tax preparation services courtesy of . I have five codes to giveaway to five different winners (each code is good for preparing and e-filing one federal and one state tax return and is good for preparing and filing through the top-level Premium version of CompleteTax).

Here's how it will work:

1. All you need to do to enter is to leave any comment on this post. Be sure to leave your email address (no one else will be able to see it) when you leave the comment.

2. In a week or two, I'll select the winner at random and announce the winner on this post.

3. I will email the winners, get their information, and arrange for them to receive their prizes.

As always, the standard rules apply.

Good luck! Post a comment below for your chance to win!