August 2011

Three Things You Should Do In A Turbulent Stock Market

Three Things You Should Do In A Falling Stock Market

There have been some turbulence in the stock market recently. There are been more days than not that have seen a hundred point swing one way or another. But, you shouldn’t fear a falling stock market.

So may even think that the US stock market is in a financial crisis. So, what is an investor to do during a turbulent, falling stock market?

3 Things To Do In A Falling Stock Market

Tune Out All Of The Noise

One thing that I do that many people do not understand is that I don’t watch the news. There is so much negative press out there that I often will get bummed out with all the news.

And, now with hundreds of television stations and many dedicated strictly for financial news, there are so many people out there with an opinion about a falling stock market. Everyone has an idea or a thought on where the market is headed, why things are happening the way they are, and of course what you should do. And, do nothing is hardly ever on that list.

It is hard to earn a commission or capture people’s attention if you tell them to do nothing. But, often that is exactly what you should be doing…nothing.

So, turn off the television. Tune out the noise. There is so much noise out there.

My Next Home Is Going to Be a Hotel and I’m Saving Over $900 per Month!

by Hank Coleman

Have you ever thought about living in a hotel? Because of the day job that I have, I tend to bounce around from one location to another fairly quickly. There are often times when I am working or going to a class for just a couple of months at a time. So, of course, I’m not going to put down any type of roots in that instance. I could rent an apartment for a month-to-month lease, but the number and quality of those types of apartments are not always the best. Why I’m Thinking About Living in a Hotel So, I started thinking about living in a hotel. I have always been fascinated by extended stay hotels in particular. Every … Read more

Reader’s Question: How Do You Start Saving If You Live Paycheck To Paycheck

by Hank Coleman

Here is the next installment in our the Reader’s Questions Series which highlight questions emailed to me by you, the readers of Money Q&A. Be sure to find out at the end of this article how you can receive a free copy of Dave Ramsey’s book, The Total Money Makeover if your money question is chosen to be featured on a future week’s blog post.

If you’re not familiar with Dave Ramsey’s book, you should run right out and get it. It is one of my top ten best personal finance books that everyone should read. Be sure to check out the other answers to money questions in this series.

This week’s featured question is from Velma who asked, “If you are living paycheck to paycheck, how do you start saving and investing?”

This is a great question, and it is one that is near and dear to my heart. I saw this question play out every day of my life growing up.

One of my earliest money related memories growing up was of my single mother writing checks each month for our bills. She would sit down with an old ledger book and write checks out for that month’s bills.

I can remember sneaking a peak at her checking account balance and seeing a thousand dollars or so. To a little kid in the 1990s, that seemed like an enormous sum of money. My mother then explained that that was the beginning balance and then proceeded to tell me where all that money went every month to pay bills such as the mortgage, electric bill, water bill, etc.

Ten Ways To Find Extra Money To Help You Save

by Hank Coleman

Ways To Easily Find Extra Money To Help You Save

There is nothing more difficult than finding ways to find extra money to invest or to start saving. Everyone is always looking for that additional bit of cash, but where can you find the room to squeeze it out of your monthly budget? It may be very hard or take a lot of extra work to find a substantial amount of cash in a lump sum if needed, but it is fairly easy to come up with ways to find extra money in small amounts. The little savings count too and can make a big difference when you start to add all the little ways to save together. Ten ways to find extra money… 1) Don’t throw anything away: If you have clothes … Read more

I Refinanced My Car Loan, Dropped 1%, And Still Pay $4 More a Month!

by Hank Coleman

Car Salesmen Tricks They Do Not Want You To Know

Recently my bank, USAA, with who I absolutely love doing business with offered me a deal to refinance my car with a new car loan at a reduced interest rate. So, of course, I pounced on it. I would be lowering my interest rate by almost 1% and moving another loan back to my favorite bank. But, when I called, I was a little shocked at first when my monthly payment actually rose by $4 per month instead of dropping. I was expecting my car payments to drop since I was reducing my annual interest rate on the car loan from 4.38% to 3.59%. But, I still took the offer and car refinance loan. And, here’s why… I Cut Off … Read more

Your 401k Retirement Plan Is Not An Emergency Fund

by Hank Coleman

Recently, one of my coworkers asked my opinion about taking out a 401k loan to help replace a blown engine in his wife’s car. This is a horrible idea. Your retirement plan is not an emergency fund.

Car troubles, uninsured medical expenses, house renovations, and other everyday items are not great uses for money that you have invested in your retirement fund. You should not use your 401k as an emergency fund.

It was not designed for that, and you potentially ruin the benefits that the retirement plans were designed to give you. Some studies estimate that as many as 28% or more 401k retirement plan holders have taken out loans against their 401k plans.

Your 401k Retirement Plan Is Not An Emergency Fund

Ruins Future Earnings

Many people think that borrowing money from their 401k retirement plans is no big deal because they are simply paying themselves back with the interest on the loan. While that is true, borrowers are missing out on compounding interest that that loan amount would have produced over the life of that investment while it is not in the account.

One of the biggest mistakes I made was borrowing about $10,000 from my 401k retirement plan after only having graduated from college for five years. I paid back my loan with interest over a three year term. But, not only was my $10,000 not earning interest during those three years.

That interest does not compound over the course of my future career. And, after just five years out of the gate from college, I have probably another good 40 years of work in my future before I fully retire.