Wednesday, January 2, 2019

Sale! 8% OFF with a Free Bonus!

If you walked into your favorite store and were told, that on average, you could save 8% on all your purchases, purchases you had planned to make anyway, what would you do?  What if they handed you a $25 gift card as you walked in the door?  

Would you say "Hmm, I don't like the fact that the price has come down, I think I'll wait until the sale is over" or would you say "Wow, every time I've come in here lately, the prices of the things I want have gone up.  Now that they are on sale, I'm going on a buying spree".

If we were discussing clothes or food or toys, most of us have no trouble saying that we'd buy while the stuff was on sale.  Yes, we might be tempted to wait, and see if the price would come down more, but especially for things we know we need/want, we'd probably go ahead and buy--I mean we were coming to the store to buy them anyway.

For some reason, stock seems to get another reaction out of people.  If the price falls, people run for the hills, rather than embracing the fact that stocks are on sale.

Like most other investors, we saw our net worth drop noticeably during December.  Like most other investors, we weren't happy.  However, now that January is here, I'm going shopping.

Some stocks dropped because the market was oversold and the company just isn't worth what it was selling for a month or two ago.  However, given that the market as a whole has dropped, now could be just the time to invest in those blue chip companies that aren't going anywhere, companies that seem to make money in good times and in bad.

Can you think of a few you have been eyeing?  M-1 Finance is an online broker which does not charge sales commissions.  M-1 Finance also allows you to invest in fractional shares of stock.  So, what does your ideal portfolio look like?  Some Exxon, a little AT&T, a dash of Realty Income, and for fun, how about some Carnival--oh, and don't forget Amazon and Alphabet!  What, you don't have enough money to invest in all of them?  No problem, M-1 Finance allows you to create "pies" or baskets of proportionately balanced stocks.  In this example (and I pulled these names out of thin air--I have not researched them an am not recommending purchasing them, or not) I could decide I want 16.6% of my money in each of those stocks, or I could decide I want half of it in Alphabet and 10% in each of the others, or any other combination I want.

Once I have designed my pie and funded my account, M-1 Finance purchases the shares or fractional shares for me, in those percentages.  As new money is added to the account, M-1 Finance invests it so as to keep your pie in the balance you chose.  If Alphabet goes through the roof and Exxon drops, next time you invest M-1 Finance, unless you tell it differently, will buy less Alphabet and more Exxon.  You can also hit the re-balance button and M-1 Finance will sell some of that Alphabet and buy Exxon, to get things back in balance.

M-1 Finance generally offers new investors a $10 bonus if they sign up with an affiliate link.  During January, 2019, M-1 Finance is offering a $25 dollar bonus to both new investors and those who refer them.  So, use this link to open and fund an account with M-1 finance (you only need $100) and you will get a $25 bonus, and  you give me money to shop with, now that stocks are on sale.

Saturday, December 15, 2018

6 Tax Myths That Even Smart People Believe

While I am not a CPA nor do I have any special expertise in taxes, I have found that there is a lot of mis-information out there about how US Income Taxes work, even among people who you expect to know better.  Let's take a look at some:

Monday, November 26, 2018

Cutting the Cord: The Financial Side of Growing Up

A moving truck recently came to my house, but I didn't go anywhere.  My daughter did though.  Several months ago she and two friends signed a lease on a house. 

As parents move toward retirement, our kids move toward independent lives, but there are often ties that still bind them financially to their parents.  Let's take a look at some of them, and consider what to do with them.

Health Insurance

Since the passage of the Affordable Care Act, young adults have been allowed to remain as dependents on their parents' health insurance policies whether or not they live with their parents or elsewhere, whether they are married, or whether they are eligible for worse coverage with their own employer.  My employer charges a single fee for children's coverage, whether I have one child or ten.  Since I have to insure my younger daughter anyway, keeping Ms. Moved Out on my policy does not cost me more, and my coverage is better than her employer offers.  I guess I could charge her for her share, but I'm a nice mom.


Who owns your young adult's car?  Depending on when it was bought and with whose money, it could be owned by the young adult or by the parents.  If your child's car is in your name, move-out time is a good time to re-assess that.  Yes, it is going to cost to change the title, and some states will make the new owner pay sales tax, even if the car is given rather than sold, but once your child moves out, you will have no control over the car and as long as it is in your name, you can be held liable for any accident.  

While it is generally cheaper to buy the same amount of coverage as an additional vehicle on a family policy, if you have a substantial policy because of your substantial assets, your adult children who have no savings, student loans and cast-off furniture can generally get by with lower limits. so their overall insurance costs could drop by assuming ownership of their own vehicle. 


Who is paying the young adult's phone bill?  If it is you, do you want to continue to do so?  The family plan may be the cheapest way to finance multiple phones but as the kids move out, consider other options.  Maybe they can pay their share of the bill.  Maybe now that your text-happy teens are gone, the old fuddy-duddys at your house would be fine with pay-as-you-go plan--or maybe not.  

What about the Netflix bill or the Spotify charges?  Do you use those services, or are they really for your adult child?  Are there any other services you are paying for (check your credit card bills for those auto charges) that you won't need or want once your child(ren) move out?

Kids moving out is a bittersweet time for parents.  It is what we want to happen.  It means we did our job and raised independent adults.  Still we miss having them home with us.