May 2011 Archives -

Betterment: Investing So Easy, a Caveman Can Do It

May 30, 2011 By Jon the Saver 2 Comments

There’s a buzz going around within the investment community. You are all familiar with the big players in the brokerage community like Options House. There is a new kid on the block. This new kid goes by the name of Betterment.com. Like other online discount brokerages, Betterment gives you the option of holding ETF’s and bonds in your account.

This might sound like another brokerage, but it’s different. Betterment’s goal is to simplify your investment accounts. There is a common concensus that investment brokers are complicated and most people get confused when trying to invest. Betterment simplifies the process and streamlines it through the use of automation. Simply select your funds, put it on autopilot, and you don’t have to look at your funds for years. Sounds pretty good doesn’t it? Let’s take a closer look…

Betterment Basics

Investing with Betterment is a simple process. First, you need to sign up through their website. Once you have a profile setup, you need to connect your checking account and start transferring money to your Betterment account. It’s important to point out that there are no fees associated with these transfers. Use the slider feature to control your risk tolerance and adjust as necessary. Then it’s up to you how often you want to adjust your asset allocation. Simply by opening a new account, they will fund your account with a $25 bonus, sweet! Here is a great tour of their site, they explain it better than I can

Investment Options?

So, you have some money in your account now, what’s next? Well, Betterment has already done the grunt work for you. They have picked 6 ETF funds that represent the United States stock market. Alongside those six funds, they also have chosen two bonds funds. Here are their fund options:

Stocks:

20% Vanguard Total Stock Market
20% iShares S&P 500 Value Index
20% iShares S&P 1000 Value Index
15% iShares Russell 2000 Value Index
15% iShares Russell Midcap Value Index
10% DIAMONDS Trust Series 1

Bonds:

50% iShares Barclays TIPS Bond Fund
50% iShares Barclays 1-3 Year Treasury Bond Fund

This mix of stocks and bonds is a fantastic asset allocation. Coming from someone who is well versed in what funds to invest in, Betterment has done a great job picking these out.

What separates Betterment from the rest?

So, what makes Betterment more effective than other brokers? Well, their visualization and automation tools are a couple examples. Most people are visual, and Betterment knows this. I love their visual tools for forecasting returns years down the line. For example, you can play around with their forecasting tools and see what your account will be worth 40 years down the line and such. It’s cool to see how the asset allocations you make today drastically affect returns down the road.

Along similar lines, Betterment has great tools for automation in regards to asset-allocation automation. If you set it and forget your savings accounts, you could see your allocation percentages start to swing too heavy to one side. Betterment has an automation tool to keep that from happening so you don’t have to worry about it. This is a great feature for people on the go.

Sounds good, but what are the fees?

This is where Betterment will scare off some investors. If you have account with under $25,000, the fee will be 0.9% on an annual basis. I know this was something that scared me off. I like to plan my own investments and I know enough to make those decisions. However, if you’re too busy to do that, 0.9% fee is not bad for the service you’re getting with Betterment. The good news is that the Betterment fees decrease with the more money you invest. If you have an account over $25,000 the fee will be 0.7% annually. If you have over $100,000, the fee is 0.5%. Anything over $500,000 is 0.3%. Starting out, the fee is pretty expensive but decreases over time. This is something that you will need to decide. To some, it just won’t be worth it. For people new to investing, this fee is nominal. It just depends on your individual experience.

Amazing flexibility

Betterment is setup for people who want flexibility. It’s ridiculous how much flexibility you get with Betterment versus other brokers. Here is a summary of the flexibility Betterment provides:

-No minimum initial investment

-Set allocation depending on your savings goals. Simple slider makes this very flexible

-Easy to move money between Betterment and your checking account

-Activity tracking feature to track withdrawals and additions

Is my money protected?

Like any other respected brokerage, Betterment is insured up to $500,000 by SIPC. You can rest easy about your money. Here is some more info regarding their money insurance policy:

Betterment accounts are SIPC protected (up to $500,000 per customer) against losses resulting from fraud or mismanagement. SIPC coverage means that if anything happens to Betterment you will get your securities back promptly. Unlike FDIC insurance for banks, SIPC does not protect against losses due to normal swings in the market.

Conclusion!

Betterment is a wonderful way to invest for people on the go. I would not recommend Betterment to people who know how to manage their investments due to their high expense fees. I do love how their passion is to reach average Americans and help the masses save for their retirement. All in all, they run a great brokerage. I also like the automatic asset re-allocations. This is unheard of in the investment community, such a great tool.

If you are looking for a “set it and forget it” broker for your retirement accounts, Betterment is the way to go. Don’t forget to open an account now with the $25 bonus below! Betterment could be you new best friend in the wild world we call investing. Start investing today!

Filed Under: Broker Reviews

Coupons are Still a Great Way to Save in Tough Economic Times

May 28, 2011 By Jon the Saver 3 Comments

As Americans continue to weather harsh economic times, I’m reminded of some of the tactics past generations have used to save, budget and make ends meet.

One strategy both my mom and grandma used was clipping coupons. This helped them squeeze every penny they could from their weekly shopping trips. Each Sunday they would clip coupons, scour the ads for the best prices and make lists. My mom had a tattered brown box she lugged her coupons around in. Inside, labeled envelopes divided the coupons into categories like, “Frozen Food”, “Health and Beauty”, and on and on.

Years later my sister and I joked with my mom about her box of coupons and the meticulous way she would scan the receipt after checking out to make sure every dime saved was accounted for. She simply replied to our teasing, “That’s what you do when you only have $100 dollars a month to spend on groceries for a family of four.”

Wow. I’m still amazed at how she did it.

Not surprisingly, coupons gained popularity in the 1930s during the Great Depression when families struggled to have enough money to eat.

With the advent of the Internet in the early 1990s, coupons have evolved from being “clipable” to becoming downloadable, printable and even scanable from a smartphone.

Today, coupons are just as prevalent and as useful as ever. American shoppers were estimated to have saved $3.7 billion using coupons in 2010, according to a report by NCH Marketing Services, Inc.

With new technologies, former coupon clippers, may need a refresher on how to get the best coupon deals while using the Internet.

Here are some tips on how to start getting online deals like the generations before us used to get from printed coupons:

1. Know how to use online coupon codes.

If you’re buying a product online, it’s more likely than not you can find on online coupon code to shave off a few dollars. Great resource is Harry and David coupon code. Sometimes coupon codes are as easy to find a searching online and then typing in a few letters at the checkout portion of the purchase. Other times, say you’re getting a deal on online software, you may need to enter the code before the payment info. click here to see a screen shot directions on how to use software codes.

2. Deals of the Day.

Sign up for a daily deal alert through a site like livingsocial.com or groupon.com. These sites help you save up to 50 percent on dining and entertainment in your area. How it works. You provide your email address and each day a coupon offer is sent to your inbox. You have the opportunity to “bid” on the coupon. You are essentially buying a half price deal up front and then printing off a rebate coupon to redeem.

3. Smart phone ready.

One of my favorite stores is Target. Now, you can you can click here and opt into their mobile coupon program so scanable coupons will be sent directly to your phone. Go to sites like Coupon Sherpa to see if your favorite store offers a mobile application.

(Kristy Hessman is a freelance writer for a variety of publications. Click here to practice your coupon code skills on this offer for Symantec Antivirus Software: http://couponpal.com/coupon-code-lists/internet-security)

Filed Under: Frugal Living

How to Build Up Your Emergency Fund

May 26, 2011 By Jon the Saver 2 Comments

If you ever feel as if you’re always behind when it comes to money, the reason may be the absence of something as basic as an emergency fund. In addition to providing cover in emergencies, an emergency fund can form the foundation of all things financial in your life by moving you past paycheck-to-paycheck living to a place where you have some margin to begin building a better life.

If you don’t have an emergency fund right now, here’s how you can get one started. But first, let’s think about how much will be enough to provide the level of safety you’ll need.

How big should an emergency fund be?

There are different guidelines for the size of an emergency fund, and all are legitimate for a person who doesn’t have one at all. Some suggest $1000 while others recommend as much as six months living expenses.

Probably the best advice is to pick a target that’s doable. Start with $1000, and once you reach it, increase the target to one month of living expenses. Once you hit that, move the target to two months and so on, until you reach an amount that provides the comfort level you’re looking for.

The key is to set the target at a number that can be reached fairly quickly. If you don’t presently have an emergency fund, speed will be critical. This is not only because an emergency may develop where the money will be needed, but also because reaching a goal quickly can be crucial to your ability to accumulate a fund at all.

Try some of these to jump start your emergency fund:

Bank your income tax refund. Rather than spending it on something or using it to pay a bill, use it to start your emergency fund. With an average federal income tax refund being in the neighborhood of $3000, this will be an excellent start for most people.

Bank your bonus. Think of bonus income as being a financial windfall, rather than part of your regular income, and use it to start an emergency fund. This is a way to fund emergency savings without disturbing your regular income.

Bank income from a second job. Many households are pretty tight on their budgets, so the only way to save money will be to increase income. Take a part time job, dedicating all income from the job to your emergency fund. If you take home $500 per month from the job, and commit all of it to your emergency fund for just six months, you’ll have a $3000 nest egg—without touching so much as a dollar from your regular paycheck.

Bank proceeds from garage sales and Ebay. Every one of us has stuff sitting in our homes that we no longer need or use, and it’s doing nothing more than collecting dust. Gather it up, clean it, decide what its worth and get ready to sell it. Smaller, high priced items can easily be sold on Ebay; the other stuff can be sold in a garage sale. Craigslist is a good venue for larger items, like appliances and furniture. You probably have hundreds, maybe thousands of dollars worth of salable goods in your home, and the money from the sale of them would be better served sitting in a bank account earning interest.

Once you have your emergency fund started—keep going!

At this point, you already have at least a few hundred—hopefully a few thousand—sitting in your emergency fund, so now will be the time to begin slowly adding to it. Put another way, you’re going to make a full transition into becoming a full fledged saver!

And that’s when good things start to happen.

How do you keep it going?

Cut back on living expenses—at least a little. As you continue your transition into saver status, this will get easier to do. Just cutting your expenses by 5% will free up an equivalent amount to put into your emergency fund.

Whittle down your debts. If you can stop using—and therefore increasing—your credit cards, you can begin paying them down just by making regular payments. As you do, your monthly debt service will also drop, and with it, so will your payments, freeing up even more money to plow into savings.

Save a small amount out of your regular paycheck. Next time you get a raise, set up a direct deposit into your emergency savings account for an equivalent amount. Since you were used to living on your pre-raise income, you won’t miss it. And since you know it’s going into your savings—also known as “paying yourself first”—you probably won’t feel bad about it either.

Continue to bank windfalls. Next year, repeat the steps listed above in regard to bonuses, second incomes, tax refunds, and the sale of your stuff. You’ll be making the pile bigger when you do, and watching the balance grow will probably be all the motivation you’ll need to keep it going.

The real payoff from an emergency fund.

The main purpose of having an emergency fund is having ready cash in case a true emergency comes up, which will keep you from having to tap your credit cards. While that’s the most basic benefit, there’s more.

Once you have a well stocked emergency fund, one that’s at the upper end of your desired range, you can take the disciplines you developed creating the fund and use them for other purposes. You can begin using excess funds to pay off credit cards and other debt. And when those are paid off, or at least under control, you can begin putting your money into investments, like mutual funds and retirement accounts.

As that begins to happen, you’ll begin moving into a most satisfying place—financial independence. And it all starts with an emergency fund.

(Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, Out of Your Rut. He has backgrounds in both accounting and the mortgage industry. He lives in Atlanta with his wife and two teenage kids.)

Filed Under: Emergencies

Get the Most Energy Out of Your Food

May 26, 2011 By Jon the Saver 1 Comment

When shopping at the grocery store, there are a couple of things you instinctively do. You are prone to purchase certain items because of their location in the store and lighting surrounding them. You are advertised to by the use of clever design and packaging corporations use on their products. You even buy things you might eventually throw away such as produce, bread, and meat because you are wired to purchase them like a dog is wired to chase its tail. These behaviors can lead us to taking out title loans in order to pay for our food bills.

One of the things we almost never consider when purchasing food is the energy content and nutrients we get out of it. Things like oatmeal are replaced by Frosted Flakes, real chicken replaced by frozen strips, and real fresh produce for the canned versions. Not only does this practice impact our health, it also takes money right out of our wallets.

In order to know which foods contain the most energy, it is vital to inspect the food label before purchasing. Just because all-natural granola products contain more calories than junk-food cereals, doesn’t mean we shouldn’t purchase them. By carefully analyzing the serving size, fat content, and protein information, you can get more bang out of your food buck.

Taking a look at the “cost per-ounce” on the retailers sales tag is also a good way to find out how much food you are getting. Instead of using the box or original packaging to gauge how much you are getting, this is an objective way to compare prices and pick out the most affordable product.

The Institute of Medicine is lobbying the government to introduce a food labeling system which is similar to the Energy Star program. Clear packaging on the front of products will tell shoppers which foods contain the most energy, nutrients, and health benefits. While purchasing food shouldn’t be as sterile as buying a washer and dryer, it shouldn’t be a completely whimsical experience based on fantasy and cartoon marketing characters.

By shopping smarter, doing research, and purchasing more wholesome food you can save money at the grocery store. Not only will your wallet be fuller, your stomach and energy reserves will appreciate it more throughout the day.

Filed Under: General Finance, Life Experience

10 Biggest Moving Mistakes

May 24, 2011 By Jon the Saver 1 Comment

Moving an office or a home is a huge job. There is a lot to do and it can be very tempting to cut corners just to get everything done, but unfortunately mistakes can and do happen. Some are very common and most are avoidable with the right precautions. Here are our top 10 moving and storage mistakes, so you can make sure you’re not surprised!

1. Buying sight-unseen.

Whatever you do, never buy (or sign a rental agreement for) and house or apartment you’ve never seen. Looking at pictures is never the same as the real thing and the descriptions on real estate websites should always be taken with a pinch of salt. Their idea of a spacious kitchen might be very different from yours and there will always be things that aren’t mentioned. Unwary buyers can be caught out be strange smells, faulty wiring, noisy neighbors, busy roads, and a lack of nearby amenities.

2. Handing irreplaceable valuables to packers and movers.

A good moving company can be trusted to deliver goods safely to a new home, but some things travel better with you. Small, highly portable electronic devices like iPads and netbooks, any kind of valuable jewellery, and important documents can go missing. Keep these with you at all times.

3. Leaving packing too late.

It’s important to be ready when the movers arrive. Empty your cabinets, check under beds and in bathrooms, and make sure everything you won’t need before moving is packed up well in advance.

4. Not being there when movers arrive at the new home.

Even if they have a key, make sure to get to your new house or apartment well before the moving trucks do. They’ll need guidance on what goes where and you are by far the best person to provide that.

5. Being caught unprepared on the first night.

Every family member should pack the things they’ll need for the first night into a single box and label it clearly. That way you won’t have to cause chaos but hunting through dozens of boxes to find toothbrushes, towels, favourite teddy bears, and clean clothing.

6. Not keeping the right phone numbers handy.

Write down telephone numbers for the moving company, the local police department in your new town, a local doctor, and anything else you might need in a hurry if something goes wrong. Keep the paper somewhere safe, like in your wallet.

7. Trying to fit large furniture into a small space.

Always remember that your new house may not be as big as the old one, and check that large wardrobes and beds will fit in their destination rooms. They’ll also have to fit through doorways and stairwells.

8. Forgetting to redirect post.

Make sure to register a change of address with your bank, cell phone provider, and let any newspapers or magazines you subscribe to know before you move.

9. Trying to carry heavy boxes alone.

Be careful when you lift a heavy box. A slipped disc is the last thing you need when moving. Either leave the heavy lifting to the movers or be very careful what you pick up and how.

10. Not labelling boxes clearly.

The right labels will make unpacking much easier and it will also give the moving company useful information on what is inside the box. Make sure to note down all the necessary details like the destination room, the type of contents, and whether or not the box contains breakables or unusually heavy items.

(This guest post was provided by FlatRate movers. These NYC movers can help you with residential and long distance moving, providing an up-front all-inclusive price.)

Filed Under: Life Experience

Business Energy, the Facts

May 23, 2011 By Jon the Saver Leave a Comment

This guest post provided by uSwitch for Business. Enjoy!

Running a successful and profitable business requires entrepreneurial flair, a degree of creativity and an eye for detail. Keeping a check on your company’s energy bills is just one way to take control of the finances, look for ways to cut costs and maintain a lower level of energy consumption. Go online and reduce your business energy consumption by comparing cheaper tariffs for both business electricity and gas.

Before embarking on a major cost cutting initiative, try to engage staff and get them on board to make the biggest savings. Encourage discussions of ways to save energy, they may be more inclined to help out. Having helpful reminders around the workplace will help focus and remind employees how they can contribute.

There are of course regulations in place regarding the minimum and maximum temperatures in the workplace, but most businesses are well within the limits if they reduce the heating or increase the cut off point of the air conditioning system. Significant savings can be made in business electricity rates by turning down the heating by just one degree in the winter. In the summer months, when the temperature outside increases, increasing the ambient temperature in the workplace will also provide a drop in business energy costs. Everyone can help to retain warmth in the office by keeping windows and doors shut and similarly by ensuring they stay closed will allow the air conditioning to run more efficiently.

Lighting represents a huge expense to business electricity bills. Luckily you can make huge potential savings if you invest in these few simple ideas. The most obvious way to reduce costs in this area is to maximise the amount of natural light available and then use this natural light in the best ways possible. Modern buildings are now equipped with a functionality to operate zoned lighting and therefore have the option of switching off the lights in areas not being used. Smart technology also uses sensors which automatically activate lighting when someone enters the relevant zone and will switch off on their own after a set period of inactivity. Business energy bills can also be cut, especially for business electricity, by advising staff to power down or even switch off computers, printers and monitors during breaks and at the end of the working day.

For new buildings, energy efficient features can be incorporated into the designs, but it is also possible to upgrade older buildings. One of the ways to do this, is to ensure that buildings are well insulated. It is also important to maintain equipment such as lights, ventilation systems and air conditioning units to allow them all to run efficiently and also to prevent unexpected breakdowns. As a business, you can help yourself by searching the market online where you can compare and switch suppliers to gain the most competitive rates

Filed Under: General Finance

How to Teach Your Kids About Money

May 22, 2011 By Jon the Saver Leave a Comment

No matter how good a formal education you provide for your children, or even how great a career you can set them up in, if they don’t have an understanding of money management, they’ll enter the adult world at a major disadvantage.

Since they won’t learn money management in school—or even in college—it’s even more important that they learn it at home from you, the parent. Equally important is learning it early. Successful money management is mostly about good habits, and the ones learned in youth are the ones that will follow them throughout life.

How do you begin teaching your children about money?

Cut back on what you’re buying them

On my first day of class for a college Economics 101 course my professor declared that the definition of economics is “the allocation of scarce resources”. So it is with children and money. The sooner they realize that what they want needs to be paid for out of limited-or scarce—monetary resources, the quicker they’ll grasp what you’re trying to teach them.

There’s often the tendency to default to saying “yes” when our children want something, but from a financial training standpoint that isn’t the best course of action. By saying “no”—which makes what they want scarce—they begin to learn both the value and the cost of their desires. If they want something badly enough, they’ll begin planning how they’ll pay for it out of their own resources. Make too much available too early, and that lesson is never learned.

Show them how much the things they want will cost

We can sometimes shield our children from the cost of living, and while it’s never a good idea to throw more at them then they can handle, we can and should begin by getting them familiar with the fact that the things they want will cost money, and about how much. As a matter of self-interest, they can grasp at least that much.

Once they start assigning cost to the things they want, they’ll begin to understand the centrality of money in living life. Saving for goals will be a logical next step.

Let them buy some things they really want

The sooner junior starts buying what he wants, the sooner he’ll begin to realize how important it is to save for what he wants. That doesn’t mean you go cold turkey on buying things for him, but rather that you decide that certain purchases must be made by him as a learning experience.

Give them an allowance but set spending priorities

An allowance should be viewed as a learning tool. You’re actually giving money to your children with an allowance, so it’s important that you put certain limits on how and when it will be spent. Some should be allocated to saving—maybe in a money jar so she can see it grow—and some to free spending.

By requiring that a certain amount be held back for saving, you’ll be demonstrating the fine art of accumulating money to your children. By allowing it to grow until it’s enough to by what she wants, you’ll be showing her the rewards that saving money brings.

Start a savings account, and let them track the balance

Starting a savings account early is one of the most constructive financial lessons to teach a child, especially if they participate in the growth. At a minimum, the child should allocate a certain amount of windfall money—gift money from holidays and birthdays for example. Eventually, saving out of allowance and earnings should be added.

A rising bank balance can motivate an older child to save more, but a younger one will probably need graphics to provide a picture of what’s happening. Look into simple software programs that will track savings growth using graphs or charts. A young child may not be impressed by increasing numbers, but he’ll quickly grasp the concept with pictorial format.

Teach the importance of earning money

Ever notice that some kids strive to earn money by the time they hit middle school while others barely seem to make the connection when they graduate from college? The early starters probably made the work-equals-money connection sometime before finishing grade school.

While it’s possible that a child may figure this out on his or her own, more likely they won’t unless they’re taught by their parents.

For that reason it may be best to have a certain set of chores for children to do—chores for which they’ll be paid over and above their allowance. While they should be expected to keep their rooms clean and help with routine chores such as setting and clearing the dinner table, other more demanding assignments can be set.

Set up pay levels for certain jobs, like cutting the lawn, vacuuming the carpets or even doing the laundry. These will provide children with the ability earn and save money for purchases they can’t afford on their allowance alone, and also cement the connection between work and money.

Once that connection is made, the future will bring good things—and lots of them.
Be intentional in teaching your children about money—you’re probably the only one they’ll learn it from.

(Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, Out of your Rut. He has backgrounds in both accounting and the mortgage industry. He lives in Atlanta with his wife and two teenage kids)

Filed Under: Family Finances

Debt Management Includes Revising Priorities for the Household Budget

May 19, 2011 By Jon the Saver Leave a Comment

The new figures are in – American consumers paid down more than they charged last quarter to the tune of $72 billion. This outcome may augur well for households getting their affairs in order by reducing their dependence on debt, but it does not help the economy when consumers do not have the confidence to spend their disposable income. Our economy is nearly 70% service driven, meaning that consumer spending is the main driver of domestic growth and domestic hiring soon thereafter.

The American public, however, is seriously beyond the curve when it comes to borrowing now to enjoy what should still be a dream for the future. Our government debate over the deficit and debt ceiling are but reflections on a larger scale of our general disregard for the impact of an ever-increasing mountain of debt. At some point, as many families have recently discovered to their dismay, the ability to pay down our loans must be addressed, especially when we can no longer borrow against the equity in our homes.

As with our government, the solution must be a “balanced” approach – we must cut spending and look for more sources of income. With regards to the latter, many Americans have found part-time work or found other ways sell their services or goods from the home. In order to start a small business from home,small business loans may be required to set up shop. For working capital, unsecured loans may also be a necessity to cover cash flow needs early in the process.

In today’s economy, generating new income may be a formidable task, but every family can reign in spending habits. Debt counseling and management services are worthwhile efforts that can reduce monthly payments down to something reasonable. You will lock the door on credit for a period of time, but learning to live within the cash available becomes the new challenge to address.

Living frugally does not mean being cheap about everything and becoming angrier by the minute. It does mean getting the most value out of your hard-earned dollars, so that you can enjoy a simple pleasure every now and then. In order to proceed with this new “mission”, one must understand the nature of their current spending tendencies. An analysis of the past six months of receipts, checks, and credit card statements will yield valuable information on this front. Be sure to break down cash and food into more discreet expense categories. For example, you do need to know what your eating out pattern is, along with entertainment use of alcoholic beverages.

The result of your analysis will set the stage for setting new spending priorities for the household budget. After deducting a respectable amount (“15%”) from your monthly income for savings, the remainder becomes your new monthly budget that must be allocated amongst your various spending categories. Attack each line item, starting with the largest first and working your way down.

It may be tough to set aside a regular savings amount, but your future financial security depends on it. Take advantage of company sponsored savings plans, and put the excess in the bank for an emergency fund for those unexpected medical bills or car repairs, or worse yet, a decline in monthly income for whatever reason. The rule of thumb for an emergency fund is 3 to 6 months of monthly net income. Investing comes after this accumulation.

Reprioritizing the household budget is not easy, but the challenge is worth it!

Filed Under: Debt, Frugal Living

Investment Wisdom From Proverbs

May 19, 2011 By Jon the Saver 1 Comment

I love to read through the book of Proverbs and rediscover the wisdom shared in the verses. I’ve been reading some books recently about investing and wanted to remind myself what the book of Proverbs says about investing. If we use the wisdom from God’s word and always look for ways to expand our knowledge in business and investing, we put ourselves in a good position to become better stewards of the resources we have been given.

Proverbs About Investing

As I looked through the verses in Proverbs, I saw 8 verses that we can use to remind us of how to approach our investments. Whether we’re investing in the stock market, a business, or other investments, these principles can really apply almost everywhere.

Invest In What You Know and Understand

Proverbs 15:22
Without consultation, plans are frustrated, but with many counselors they succeed.

Proverbs 24:27
Prepare your work outside and make it ready for yourself in the field; afterwards, then, build your house.

Warren Buffet and Peter Lynch are famous investors who were known for investing in what they knew. It’s no surprise that these two verses would instruct us to ‘prepare your work’ and to obtain consultation before investing. Buffet and Lynch weren’t born as investment geniuses (though some would say that). No, they surrounded themselves with smart people (wise counselors) and took the time to understand each investment in detail before making a decision to invest.

Don’t Get Lazy With Investing

Proverbs 27:23, 24
Know the state of your flocks, and put your heart into caring for your herds, for riches don’t last forever, and the crown might not be passed to the next generation.

Yes, being a long-term investor and not jumping in and out of investments because of fear is a wise piece of advice to follow. BUT, it’s just as important to continue to review your investments. To put it bluntly, investing is no place to use the ‘ignorant’ card. We have to avoid the temptation of laziness in our investing and truly understand what we’re invested in and to continually watch our ‘flocks.’

Don’t Be Fooled!

Proverbs 28:22
Greedy people try to get rich quick but don’t realize they’re headed for poverty.

Proverbs 10:16
The earnings of the godly enhance their lives, but evil people squander their money on sin.

If we needed any reminder of what not to do with our investments, these two verses sum it up nicely. Be careful not to jump in with the crowd regarding certain investments hype. As an investor, you’ll be approached with investments that seem like a ‘no-lose’ or a ‘sure-win.’ If it’s too good to be true, then it’s probably not a good idea.

There’s a difference between a ‘hot investment’ and a successful business. One is built on fear; the other is built on hard work. I know which one I want to be a part of, do you?

Always Remind Yourself Why You Invest

Proverbs 23:4
Do not wear yourself to gain wealth, cease from your consideration of it.

Proverbs 13:22
Good people leave an inheritance to their grandchildren, but the sinner’s wealth passes to the godly.

Financial freedom is a fantastic goal to have – but it’s not the only thing in life. I’ve heard it said that your money is your life spent a second time around. Think about it. We spend our lives earning a dollar only to spend it on something in the future.

These verses aren’t telling us not to invest or gain wealth – they warn us not to wear ourselves out trying to gain it. I think it’s good to remind ourselves why we invest our money and to remember that it’s not our most valuable asset.

What’s the best investment advice/wisdom you’ve heard?

(This is a guest post by Tim who writes at Faith and Finance. Be sure to visit his blog or subscribe to his articles here.)

Filed Under: Faith and Finances

5 Reasons Vet Insurance is Useless

May 17, 2011 By Jon the Saver 4 Comments

Veterinary insurance has been growing in popularity over the last few years. The basic idea is that you can purchase health insurance for your pet the same way you would purchase health insurance for yourself. It sounds like a good idea, but experts are warning consumers that they could save money and receive the same veterinary service by simply putting their cash in a savings account for pet needs.

1. Coverage is Expensive

The up-front costs for vet insurance can be daunting. The premiums, deductibles, and co-payments are expected to be covered out of pocket. Usually a pet owner will be required to pay for the veterinary services and then submit a claim to the insurance company. If the insurance company denies all or part of the claim, the owner is stuck paying the bill. Since most dogs rarely need to visit the vet for reasons other than regular checkups, the cost of the insurance premium could be more than you would spend without it in an average year.

2. Congenital Problems not Covered

Most vet insurance policies do not cover common congenital problems. These illnesses, like hip dysplasia, can require ongoing and expensive treatment. Since the treatments are not covered anyway, you would still have to pay for them on your own. There is no reason to make those expensive payments and continue to pay for the vet insurance on the side.

3. Restrictions for Certain Breeds

Some dog breeds are notorious for specific kinds of ailments. If you own a dog that falls into one of these breed categories, you will have a difficult time finding an insurance company that will cover you. Aggressive breeds, like pit bulls and rottweilers, are particularly difficult to cover. If you do find a company that will cover them, you will have to pay high monthly premiums to maintain the coverage. There may also be severe restrictions on the kind of veterinarian services these dogs can claim through your insurance policy.

4. No Coverage for Pre-Existing Conditions

As animals age, they become more susceptible to illness and injury. Vet insurance could help as your pets get older - as long as they do not suffer from anything that they have had before. Vet insurance will not provide coverage for any pre-existing condition. If your dog has had asthma or other breathing problems most of its life, you will not be able to file a claim if you need to make an emergency vet visit due to a respiratory illness.

5. Coverage Rarely Covers all Costs

Vet insurance does cover some of the cost of veterinary treatment, but it usually does not cover all of the costs. When you factor in the amount of money you pay for your premiums, you will probably find that you have actually invested more in your pet’s health over the past year than you would have spent if you had simply paid the vet bill on your own. With all of the complicated restrictions and deductibles, vet insurance is more expensive than paying for vet treatment out of pocket.

Jessica Bosari writes about how to save money at Billeater.com, a site dedicated to helping people save money. Visit Billeater to read about more ways to save money.

Filed Under: Insurance