Thursday, January 24, 2008

I've Got Questions

And I hope you have answers. I try to be fiscally responsible and I actually accomplish this in the short run with our bills, etc. But, I don't really understand the ins and outs of investing and such. I like to have my money available to me if needed, but it's sitting in a 4% money market account, which is not the best I can do, I think. However, I've done research and research and more research and seeing as how I'm too cheap to actually contact a financial advisor for information, I'm hoping to learn more right here.

Also, what is all this talk of recession and housing. If we have a fixed rate mortgage (which is a very low rate, to boot), then should we be worried about losing our home? Or is the panic just over the folks who have ridiculous ARM loans or interest only loans?

I'm just not sure I follow all of this madness. I've read about investment and 401Ks and all that jazz. My dad had set Buddy up with a prepaid college plan (529) as an infant and we pay $75 a month on that until he is college aged and can use it. I haven't done anything for Sissy yet and she's almost 2. The company (Hartford) no longer offers the WV prepaid plans like the one Buddy has, so I was hesitant to put money into a different plan for her.

Growing up, I was taught that three subjects were off-limits in company. Those three were politics, religion and finances and I try to stick to that even to this day. And, I'll even add one more: abortion. No matter how politely you come into the subject, someone is going to get their feelings hurt.

Anyway, without being super specific, would anyone care to answer these burning questions or even tell me what has worked for you in the past (again, no specifics - if you went with Charles Schwabe and like them, that's all I need to know. I don't need to know you rolled $30K to them for investments - that's none of my business).

That reminds me... I need to get my TurboTax software for this year. I've used them the last three or four years and LOVE it. It beats the days when the Evil Twin did a lot of freelance work on top of his regular job and I had to file a Schedule C and calculate all that crap myself. :-)


  1. I just skimmed your entry. I can't deal with it. I'm taking tomorrow off to gather up tax shit. Our biz went sour, so we have to deal with that fallout. Oh, I have to get a certified piece of mail addressed to our biz from the IRS. Goody. Let them audit us! We didn't make one penny.

    AGGGGH! I'll be glad to be back to TurboTax sometime.

  2. Well, I have a 401K... I picked those mututal funds by looking at which ones that were offered had the steepest up-going graphs (yeah, wildly scientific, I know).

    But I'm not the one to ask. I decided to open a brokerage account a while back. Again, I picked mutual funds that had nice up-pointy graphs (hey, it worked pretty well in the brokerage account) Anyway. The DAY AFTER I opened that account, the Dow started its plunge. It was over 14 when I opened the account. Now the DOW is at 12. Yuck. I decided to not open that web site again until the DOW straightens up and learns to behave itself. (hopefully I don't end up at zero before that happens :)

    Oh, and.. if you have a fixed rate mortgage and no plans to sell your house, then feel free to ignore the whole housing mess (except that it's helping drive the stock market down)

    That's all I got.

  3. Celery is right. You're fine.
    Yes, I use them all the time but not ones like I made in the tute.
    No they don't leak, they're 100000000 times better than disposable.
    I get what you're saying and the river rages here and I'm still fine.
    There's a huge movement of women out there who are swearing off disposables for various reasons. I'm not in it to save money. I made my first one to add to my "the world's gone to hell in a handcart" kit. I tried it out and couldn't believe how much better it was.
    I'll never switch back!

  4. I'm not the one to ask regarding 401Ks or the DJIA.

    My 401K is matched by my company - and I have an account that is 'balanced' daily by...someone.

    I really don't get it at all.

    You COULD try to roll out some of the 401K to a fixed retirement fund, but you may be penalized. It depends on the rules and regs of your 401K and whether it is drawn out pre- or post-tax.

    Now, with 529s? Check your state website. In NC, they HELP you plan. (The NC website is

    I googled WV and was directed to

    Good luck.

  5. The only thing I know is you are fine with your home...the rest is Italian to me. We have an accountant and Steve manages the investments.

  6. I know one couple who started a Money Market for their daughter when she was one. For a few years, they paid $1,000 each year into the account. The rest of the time they had this huge change bucket that all pocket change went into. When it was full, they would deposit it into the bank and put the up to $600 from just change into the account.

    She starts college next year and should have more than enough to cover all of it.

    Drawback: They've had to do tax forms for her her whole life.

    It was set up using a brokerage and the money market itself relied heavily on municipal bonds (they're sometimes more stable over the long haul).

    The stock market is a gamble. Even when you only buy a few and make sure they're blue chips and you get dividends. It's still a gamble. We don't put anything in stocks that we wouldn't be willing to lose.

  7. One more thing on stocks, we never look at them as actual money. It's imaginary money until you cash it in and it fluctuates all the time. Helps to take out the sting when the market takes a hard chomp out of an investment that boomed then busted.

  8. I did the fixed rate when it was pretty low so as long as I'm not thinking of selling I think I'm fairly safe. Don't ask me on the 401k I'm watching my tiny little retirement plumet drastically. I think I'm going to fall back to my Lottery winnings to retire on. Oh and I love turbo tax.

  9. Oh and the only drawback to my Lottery winnings plan is that I havent hit it yet.

  10. Hey!
    You've been "awarded" over at my blog!
    Thanks for making my day!

  11. Yes, your FRM, (or conventional mortgage) is good. If it were an ARM you might be worried.

    The ARM loans were offered at a lower beginning interest rate than the Fixed to attract buyers to the housing market. However, what happens in most cases is that the interest rate is adjusted annually according to the market conditions, and although the borrower is protected by a ceiling rate set by the gov, the increase = higher monthly payments which are no longer in balance with the income/payment ratio originally taken into consideration when the loan app was approved. This makes it harder for the homeowner to meet the payment. An ARM, in my PERSONAL opinion, is good if you're planning to move in 5 years and sell the house, are certain you'll be getting an appropo increase in pay, or you are buying a cheapo to flip & sell for profit(hopefully quickly) and can get the full benefit of that low interest in the beginning before the market fluctuates higher. Make sense?

    Investments: My advice is to shop around the investment firms there in Chas. Call and ask if they will come to your home and speak w/you & your husband one night at no charge. (Most will!) Also, some financial advisors send out invitations to a presentation at a local hotel (some serve a free dinner!) where they go over their plans and arrange to meet w/you privately at your home or their office later when you have your investment portfolio or asset info w/you. A good investor should set you up with a tax sheltered IRA or other to pay into for the kids college funds, and perhaps something to supplement your own retirements. :)

  12. BTW, some investments do penalize for early withdrawal, but some you can spend the interest or borrow against them. You have to choose what's best for your situation. If you set up through a financial advisor, he/she will get a monthly commission to invest and watch your $ properly. In my case, it's deducted from the plan itself and I really don't notice it, although I know what it is. It's not like I have to write him a check each month.

  13. I'd say I'm fairly knowledgeable. Vanguard is the best place to invest IMHO, due to low fees. Main factor to consider is how long till retirement? If you've still got several years, it makes sense to have most of your money in stocks: higher volatility, higher gain. You've got plenty of time to make up any losses. As you near retirement, you want more money in less volatile bonds, so your retirement isn't ruined by an ill-timed market downturn. Target funds do this automatically, such as VTHRX (where most of my money is). Keep plenty of money liquid too, in savings and/or CD's. Feel free to contact me with questions. I love this stuff. :-)

  14. Hello, my friend. I am trying to get caught up on all the goings on in the blog world. It seems I picked a very interesting day to return!

    I think you should find a local branch of Primerica. They do mutual funds, IRA's, investments, mortages, etc. They will put together a comprehensive financial game plan to help you plan your retirement. FOR FREE! THAT INCLUDES YOUR VERY OWN FINANCIAL ADVISOR, ALSO FREE. My husband and I use them personally. It is fabulous. Check it out. I would be happy to answer any questiions you may have.

  15. Ooh, sorry Jenny, but I have to strongly recommend AGAINST Primerica. First, as you hopefully know, NOTHING is free. Primerica's agents are commission-based, rather than fee-based, which means that their agents are motivated to make recommendations in THEIR best interest, not yours. Also, Primerica is based on the MLM model, 'nuff said. I used to be in financial services and had a friend who worked for Primerica. He became so disillusioned with being asked to make misleading statements to sell inappropriate products that not only did he quit, but he became MY client. :-)

    My two cents, respectfully submitted.

  16. Actually, I disagree with you. Completely. Our financial advisor explained every option we had, in great detail. My husband is quite knowledgeable about mutual funds, IRA's and the like and he was quite pleased with the services we were offered. WHICH WERE FREE TO US.
    All I'm saying is to talk to them. That is also free. And if you don't like what they have to say, don't use their services.

  17. I'm an accountant, but I work in the non-for-profit industry so personal finances is just an interest of mine.
    I would start a 529 Plan for your daughter. Check out different state plans, because some have higher fees than others. These plans can typically be used towards any university/college no matter where. Virginia & Utah have some of the lower fee 529 plans.
    I will say that it's more important to save towards your retirement than 529, but if you have extra than put some in. So make sure if you or your spouse have a 401K that you are maxing out on it. You can also start a Roth IRA too if you don't have one of those.
    As far as playing the stock market, it's hard to say. If you don't want to be too involve in it than I would suggest a mutual fund that's pretty diverse & with low fee.
    Also I would have a rainy day fund such has your high yield market fund which is fairly liquid in case of emergency.

  18. Not to belabor the point, but yes, talking to Primerica is free. Talking to any financial advisor should be free, and you should head for the hills if you find otherwise. But investing with Primerica is certainly NOT free. And I would be VERY surprised if a Primerica investor is not paying a MUCH higher load than, say, a Vanguard investor. I'm certainly not going to tell someone they're "wrong" for dealing with Primerica if they're satisfied, but I have seen some bad things happen with that company. Google "Primerica scam" to find some comments from people who have had similar experiences. I am also instantly skeptical of any company following the MLM business model, even more so one that offers financial services.

    Again, just my two cents.