Great Finance Blog Posts - I've Enjoyed This Week: Great Rates in MA, What You're Worth Crystal Ball, Harvest the Equity in Your Home!, Strange Charges On My Statements?

Great Rates in MA
Bank Deals is quickly becoming a daily read for me.  I'm enjoying stopping by and learning about the latest rate comparisons and great rate deals.  The Banking Guy posted on what I thought was an incredible deal and made me want to find a penpal in MA: 6.25% Reward Checking Account at a Massachusetts Bank (North Middlesex Savings).  Not to worry, Banking Guy has categorized lists to look for bank deals in your state, not to mention the google search for your state :-).

What Are You Worth? - Crystal Ball
At Money and Such, they have a great post: Your Career Crystal Ball.  Where Shadox talks about the cool features of payscale.com.  A definite recommended read.  I've used payscale in the past when it's review time to get an idea of where you should be, it's a great tool to have in your arsenal!

Last Change Millionaire
Tricia from Blogging Away Debt, had a book giveaway for The Last Chance Millionaire by Douglass R. Andrew.  As you'll come to learn, I'm a big believer in getting your equity out of your house and putting it to work.  It sounds like Douglass is too.  I'll probably be checking this book out the next time I'm at the bookstore.  Read Tricia's post and you'll see an interesting visual aid that Douglass describes to drive this point home.

Unknown Charges in Your Statement, What To Do?
Patrick at Cash Money Life had a post that caught my eye immediately as I saw the title: What To Do When You Have an Unknown Charge in Your Statement.  He also had a link to another of his posts about a scam that folks are randomly choosing checking account numbers to send through ACH transactions (this is a must read scam to be aware of).  Good info, and I hope my strange transactions turn out to be as benign as Patrick's were :-).

Great Finance Blog Post - Ask the Readers: Is It Better to Invest or to Prepay a Mortgage?

Another favorite finance blog post I'd like to highlight to share some great blogs out there that I enjoy regularly.

www.getrichslowly.org/blog has this great post: Ask the Readers: Is It Better to Invest or to Prepay a Mortgage? JD at Get Rich Slowly has blogged this topic before. He revisited this topic again to answer an email question. I can see why, this is definitely a tough topic to discuss with folks, because it goes against generational pressures, opinions and our instinctual basic needs in life. JD points out how difficult a question and varying the answers of those that discuss it are:

This question has stumped smart people for years. Is it better to invest or to prepay a mortgage? Neither answer is wrong — there are advantages and disadvantages to both. But is one choice less wrong than the other? When I covered this subject a year ago, I shared advice from several personal finance books.

Like everyone else, I've had many varying opinions about this rolling through my head. The safety side of my brain wants to say: "Let's pay off this mortgage, so that we have a sense of security. No mater what, we'll always have a place to live in our retirement". Our parents and their parents will echo this sentiment.

The financial guru in my head says: "Hey, you know that you're only making 5.25% on that principal you pay down, right? No, wait with the tax benefit of interest you can write off, that interest rate is a good amount under 4%! So, how the heck do you think you're going to build wealth like that Mr. Buffet?" Well, that just might make be start wearing a WWWBD bracelet, so I remember to make smart money decisions :-).

This really only hits our Survival and Safety levels of Maslow's Pyramid. Those are the 2 most primitive needs. Ok, I'm an animal, you can't let me fight this fight. I love that JD references Ric Edelman's book and view on this topic:

Ric Edleman (Ordinary People, Extraordinary Wealth): Never own your home outright. Instead, get a big 30-year mortgage and never pay it off — regardless of your age and income. “Every time you send an extra $100 to your mortgage company, you deny yourself the opportunity to invest that $100 somewhere else.”

I'm totally sold on Ric's viewpoint here. I mean he hits you over the head with TEN really good reasons why in his article 10 Great Reasons to Carry a Big, Long Mortgage:

Reason #1: Your mortgage doesn’t affect your home’s value.

Reason #2: You’re going to build equity anyway.

Reason #3: A mortgage is cheap money.

Reason #4: Mortgage interest is tax-deductible.

Reason #5: Mortgage interest is tax-favorable.

Reason #6: Mortgage payments get easier over time.

Reason #7: Mortgages let you sell without selling.

Reason #8: Large mortgages let you invest more money more quickly.

Reason #9: Long-term mortgages let you create more wealth.

Reason #10: Mortgages give you greater liquidity and greater flexibility.

Stop by Ric's article and read all the gory details that he bashes us over the head with to beat the sense into us. So, what are you waiting for? I'm sure Ric would say something like: Run out there and get yourself a big refi and harvest all that equity out of your house, then put it to work building some big time wealth!

I've always loved Ric's radio show and books, I hope you enjoy all the educational resources on his site: http://ricedelman.com/planning/default.asp

Great Finance Blog Post - How You Can Become Wealthy

Since I love reading finance blogs, I wanted to blog on some of my favorite posts that I find at each of these blogs I like to visit. I hope to keep this up as a series and point you in the direction of some great finance blogs out there that I enjoy regularly.

www.freemoneyfinance.com had this great post that was short, sweet and oh so true: How You Can Become Wealthy. The post discusses a great article on moneycentral. The article covered some findings by 2 professors from Dartmouth and Harvard, that did a study for the National Bureau of Economic Research, some years ago. The bottom line was this:

...the vast majority of the differences in wealth had nothing to do with income, chance events or investment choices.

So, there's scientific study that shows that the first step to saving is 'saving'!

What did explain most of the differences in wealth? Venti and Wise concluded it was this: How much the families chose to save. Those who made it a priority to save built wealth, regardless of their income level, individual circumstances or choice of investments.

I'm sure we each have experienced this. There's that one moment or period in our lives when we realize that we need to get our butts into gear and start saving.

It's funny, when I talk to friends/associates and the topic gets to money and I occasionally hear something like: "I haven't really been able to afford to kick off my 401K yet". I try to slowly encourage them to get into the habit. Now, I'm not talking at that moment, because I know it just isn't going to be taken well or digested. But, over lunches and through the course of time, I'll generally get back to the topic and offer a little encouragement. Maybe, I'm a pest, but I wish someone was a pest with me and got me on the right track sooner. I would have loved to start saving in my teens, wow would I be set for retirement already! I was glad though that I did run into someone that got me pointed in the right direction.

One final thought. Recently I bumped my fun-money savings ratio, just out of sheer annoyance and maybe some back-strain. I have this 5 gallon jar that I have saved coins in for a couple years. Just figured that I'd never spend coins and pop them in there and see how much it will add up to. When I finally filled it almost to the brim, I was going to vegas :-). With that puppy nearly filled I almost broke my back with 2 trips to the bank hauling change in my backpack to cash it in. I swear I must have looked like someone carrying plutonium or something! It was a hefty $1000+, that easily paid for some fun in Vegas! For those of you curious how much change you've amassed, Coinstar has a handy little trivia estimator on their site (example: 1 gallon of change is estimated to be worth $228.34) Cool :-).

So, after that I decided not to focus on the change and instead focus on $1 bills. Since then my savings rate for fun-money has tripled. Which tells me I'm having too much fun, or I need to tighten up the screws on my automatic withdrawal savings :-(.