Today is another important tax date!


Today is the last day for institutions to mail the first run of 1099, 1098, and other tax forms. I have received most of mine and am almost ready to file. My taxes have been a little complicated the past few years due to stock trading and the endless 1099 revisions they produce.

I am happy to say that I sold all my taxable account holdings and moved the money to my Roth IRA. I originally kept them in my taxable brokerage for flexibility but I have traded out that strategy for my cash emergency fund at SmartyPig. Overall this will make my tax life easier in the long run.

Be sure to keep an eye on your mail this week. You should get plenty of "Important Tax Document Enclosed" envelopes in the mail!

A hiccup in blog posts


Thanks to some emergency travel for work Wed - Fri last week and the winter storm in the northeast USA I had a long week last week. I finally got home late Friday night after some long work days on the road. As a result I did not get to write posts for the blog.

I am back home now and things are returning to normal. I will be back on schedule next week!

Seeing the light: Happiness is more important than money


I am in Romulus, Michigan today (near the DTW airport) for work travel. I went online and found a local restaurant/bar that had good reviews from other business travelers. I gave it a try and am very glad I did! I scored a half pound cheeseburger for $3 and $2 beers. Dinner + drinks = $11.66. Nice.

I also met an older gentleman (soon to be 50) named Mike. We had casual conversation about various subjects and money and happiness came up. He is retired from the Army after 30 years and now works as a prison guard in Detroit. He lives nearby the airport and is into local rental property. He seems quite savvy with his money and makes good choices.

He moved around a lot in the army and owns a few homes as a result. He rents them out and uses the rent proceeds to pay for his 18 year old son's college. He is looking into buying another as he has a tenant waiting for a place and is bidding on local forclosures (as low as $4,000!) and would make a tidy sum from renting it. He said he plans to use the money to save for his yearly vacations with his wife.

He then told me about a neighbor of his who is a former NBA player. He said while he was in the NBA he would have lavish parties, throw around money, and got caught up in the fame and fortune of the NBA salary. He went on to say the guy now is retired and realizes that he does not need all the fancy stuff and big parties. Instead of a Porsche he now has a Camry and has sold most of his high end jewelry, cars, etc and is happier. He specifically mentioned that he wants to sell his $35,000 Rolex as it will "collect dust in the drawer."

One thing that I really liked about Mike is his view on television. I mentioned it to see how he would react and he said he doesn't watch TV except for sports and sometimes weather reports. I am glad someone agrees with me! A TV is just a devices that forces commercials down your throat. News is just crap to get you to watch commercials. Moving along...

Mike and his friend are 2 people that "get it" in my book. They understand that people and experiences are the most important things in life. They also understand that money is required to have these experiences (and sometimes to visit the people) and therefore channel their money towards it. They don't have BMW's and 8,000 inch plasma TV's. They save a lot of their money and use it for their goals instead of running up credit cards.

Mike said it took him years to get into the idea of saving and not simply spending the paychecks as they come. I personally attribute this to television, society, consumerism, and flat out horrible job of the education system of teaching people about money. If everyone had to take a personal finance class in order to pass high school I think a lot of good could come of it.

I am glad to say that I "saw the light" on what's important with money a few years ago. I took me a lot of internal struggle and being resilient with habit changes to get to where I am today. The tide is turning and I see my assets finally moving into the positive. I bet we all could still learn a thing or two from people like Mike. Focus on what's important (and getting more stuff should be nowhere on the list of what's important!).

Want to make your computer faster? Get a Solid State Drive!


I work in the IT Industry and did my homework. Solid State Hard Drives have come a long way and also have dropped dramatically in price. I just installed one in my MacBook Pro over the weekend and the difference is amazing! I can go from power off to ready to go in under 30 seconds (versus the former 80 seconds)!

Caveat: This is not for everyone. If you do not know what you are doing you should have it installed by a professional. You should also rid your computer of virus, malware, spyware, etc. if you run Windows. This tip is intended for heavy and high end users!

Advantages of a Solid State Drive over a traditional spinning disc hard drive:

  • Speed: No moving parts means lightning fast access to your data thanks to advancements in technology.
  • Less Prone to Failure: No moving parts also means no damage due to drops, worn out bearings, and other physical issues seen with spinning drives. My experience is that the first thing to fail in a computer is either the fans or the hard drive. Both are moving parts that wear out!
  • Lower Power Use: Since their are no motors inside they consume a little less power. Longer battery life has been reported in laptops!
  • Longer Life: Solid State Drives last a lot longer thanks to no moving parts. 
Disadvantages: There are a few drawbacks that should be mentioned:
  • Cost: Solid State Drives are relatively new and cost a lot more. Much more so for larger drives. I got my 128GB Solid State for $150 after rebate. The largest drive currently available (256GB) is $600! Hard drives of these sizes are much less.
  • Limited Space: If you have a lot of files you may have to have a "hybrid" setup to store files on a traditional hard drive (with a backup of course!). I did exactly this with a 500GB Hard Drive and 128GB Solid State. I have programs and games on the solid state while most of my data is on the hard drive.
  • Novice Users: Installing a solid state drive is no small task. You have to know what you are doing just like building a car engine. Added cost may be needed to hire a professional to get it done.
Overall the solid state drive will save me time and money. I have (hopefully) prolonged the life of my laptop due to the performance increase and one less point of failure. I can always remove the solid state drive and move it to my next computer when the time comes. Being a power user such as myself this is important for my career and sanity. The hard drive is the slowest part of any computer. A solid state truly increases the speed of the entire system and as such is a vital part to getting more out of the computer.

Back on the road! Detroit and New York City in 2 days!


After a long week of work last week mixed with 2 days in New York I get to go back on the road Wednesday. This will be a much more intense trip with my flying to Detroit and staying the night followed by in and out the same day in New York. The major downside is I will not earn miles for this trip as it was booked 2 days in advance using an award ticket.

That said I don't mind going back to New York so I can hit up my new favorite empanada shop near the job site. I wish I could have more time to stick around the city but being an expensive place my company tries to minimize our time there. That said I can keep my food costs down and bank a little per diem!

I will most certainly use my Sky Club Pass on this trip if I end up with extra time (which I should) so I can relax after 2 long days on the road before back to the office on Friday. Even when it is hectic I find ways to enjoy some of my time on the road!

The math behind converting from a Traditional IRA to a Roth IRA


A lot of people ask if it makes sense to contribute and/or convert to a Roth IRA. If you have money in a traditional IRA and want to convert it to a Roth (either all or part) you have to pay income taxes (but not any penalty) on the amount you convert. The big question is: Does this make sense financially for me?

Here is an example: You have $10,000 in a traditional IRA. You are considering converting it all to a Roth.

The Numbers: Your total income taxes (Federal, State, Local) come out to be 25% of your income. This means you would have to pay $2,500 total in taxes to do this conversion. This will obviously change if your actual tax rate is higher or lower but I am using this for simpler math.

You also have to look at the back end. For this I will assume an 8% annual rate of return and the same 25% tax rate. Let's say you withdraw the money from the IRA account after 20 years.

If you leave it in the traditional IRA: $46,609.57 - $11,652.39 = $34,957.18.

If you convert the assets to a Roth IRA: $46,609.57 tax free! (you save $9,152.39 in tax by paying the taxes now).

This is a very simplified example but if you were to withdraw $46,000 for 1 year of retired life expenses you come out way ahead in the case of the Roth. If your tax rate is lower you still come out ahead but not as much. The general rule is to go with Roth if at all possible. Especially if you have a long time to invest the money before taking it out.

The only scenario where this doesn't make sense is when you have a high tax rate now. If you expect your taxes to be significantly lower during retirement it may make sense to leave it in a traditional IRA. Secondly if your income is too high you may not be eligible to convert it to a Roth IRA. A tax specialist can shed more light on this specific case.

The bottom line is that unless you are a very high wage earner you should go with the Roth IRA. This is one of the few truly tax free accounts that we can take advantage of. Time is on your side if you use it wisely! Run your own numbers and see how much you can come out ahead!

Tips from life on the road


Traveling for work isn't without expense. Eating out all the time costs money. It takes a lot of energy to travel for 2 days back to back. There is always the hassle of finding somewhere appealing to eat without breaking the wallet and on top of that it is usually alone. Then you have to entertain yourself and that usually requires some expense too.

I do get a per diem for meals but depending on where I got I can bank some of the money or go into the red. Today I am in New York City and I will be happy to break even on the per diem. There is just too much to do in the city that never sleeps and I always find myself spending more than usual. It would be OK if I earned a New York level salary but coming from Atlanta is a different story.

My best tricks to combat this expense are fairly simple. I ask people who live or who have lived where I am going for the best reasonable places to eat, what to avoid, and what to look out for. I do some research online and check out all the various "group coupon" sites for deals that I can utilize while there. If I am really not sure I have my "staple" places to go to such as Wendys, Subway, and a few others where I know about what the prices should be.

The airports is where you get thrown over the counter for food. I try my best to eat before I get there but in a rush I sometimes don't have a choice. The best thing you can do in that situation is get a main entree such as a sandwich and seek out the vending area for drinks. Vending is always the cheapest for drinks as they don't charge tax and have the lowest prices to boot. Some airport vending machines even take credit cards!

Saving money while on the road is a challenge but can be largely simplified by pre-planning. I always get hotels with free wifi, I book flights so I have time to spare, and I try my best to stick to my meal budget. Overall I come out ahead on my per diem and have lots of miles to use for travel on top of that! Life on the road can cost money but can also create money if you do your homework.

Car Insurance: I cut mine in half!


I had another cost cutting win today. I called up the insurance agent and found out that by dropping down to the legal minimum on my car I can save $448 per year. That is roughly $35 per month!

My car is a 2003 Honda Civic worth roughly $5,000 to private buyer--hardly worth $448 more per year for insurance. I can bank that money myself instead, earn the interest, have flexibility with that money, and save towards a replacement car if the need should arise.

The savings on insurance each year represents 10% of the value of my car. If I did have a crash and it was totaled I wouldn't even get $5,000 as the insurance company gives you the trade-in value. The blue book has that at around $3,000. Between all the above numbers this decision was a no-brainer for me!

January 2011 Prosper Lending Update


It is the middle of the month again and it is time for my update on lending. It has been another quiet month with business as usual. I have 1 slightly late loan and 0 more have paid off completely. I no open bids at this time.

I have decided to begin reinvesting in Prosper once again. I have drawn down my account and my financial situation has improved. I will add no new money at this point.

I "write off" all loans in collections as a loss.

Here are my stats as of today:

Outstanding Loans:

Late: 1 (< 30 days)
In Collections: 0 (written off)
Current: 35

Closed Loans:

Charged Off: 10
Paid Off: 22

Open Bids:0

Total currently invested: $773.99 (Principal Value)
Cash in Account: $61.52 (includes open bids)

Total Principal: $835.51

Paying off Low Interest Debt versus Retirement Savings


The question I have been analyzing lately:

Should I accelerate payments on my student loans and/or mortgage or add more to my retirement accounts. A lot of blogs out there trumpet to become debt free then save. Based on the math I have to disagree. The return on paying of lower interest debt is significantly reduced and in a sense you can lose money by not investing for retirement!

My Scenario:

I have 2 existing debts: my mortgage (4.5% fixed) and my student loan (2.625% fixed). Interest on both loans is tax deductible. With my risk tolerance and investment fix I am assuming that my returns from investing will be significantly higher than 4.5% (my highest rate debt). If this is true then I lose the return from the investments by paying down my mortgage faster. If I assume I will average 8% return over the long haul that means I stand to lose 3.5% per year and that is before I factor in the tax deduction. That adds up over the 30 year life of my mortgage and the compounding of my retirement savings!

As a result I have decided to make the minimum payments on the two loans and any additional money will go to my retirement and other savings goals. I am in the middle of building my full blown emergency fund now so it will get all of the extra money first. One I have it at a comfortable level I will focus mainly on retirement (I admit I am behind here) and then look at car replacement fund, laptop replacement fund, and other smaller goals that need to be addressed after my emergency fund is completely built.

In most cases if you return on the retirement savings investments beats your low interest debt be 1% or more you are probably better off saving the money instead of accelerating debt pay down. It feels great to pay off debts early but feels even better to know that you can retire comfortably without worrying about  making ends meet in your elder years.

More work travel: New York City, NY


I have a last minute, 2-day trip to New York for work. I love these trips as New York is a fun city and can be less expensive now that I have learned some of the tricks to not spending a fortune in NYC. If all goes well I will have one night and maybe even a couple of hours to play in Manhattan.

I will be in NYC from Jan 20-21 assuming the weather cooperates with me. On my "fun" schedule I have free hot dogs, coffee from the ING Direct cafe, a visit to the 5th Avenue Apple Store, and dinner from my favorite street cart and also the 25 cent store in Chinatown. I will also spend some time in a predominantly Jewish neighborhood in Brooklyn where I can get the unique chocolate chip cookies the the chips on top instead of baked in!

Given the chance I would love to live in New York City for a year to get the "real feel" of the city. I also like the idea of not needing a car at all and having direct flights to tons of overseas destinations (especially on sale fares) sounds quite appealing. I also love the multicultural aspect of the city and want to explore it's excellent ethnic neighborhoods and restaurants.

Trips like these make up for all of the crappy ones to Detroit and Indiana!

Verizon Customers: here comes the iPhone!


Apple just announced that the iPhone 4 will be available to Verzion Wireless customers in the USA starting on February 10, 2011. As a current iPhone owner (and I love it!) I am curious to see how this goes. A lot of people hate AT&T and have been waiting for this day.

My prediction: AT&T is about to lose a lot of customers. Some people are so angry with them that they will be more than happy to pay the contract cancel fees. I also foresee a flood of iPhones (AT&T/GSM) to be sold on eBay next month. They will devalue as a result except for those who want to unlock and take to another carrier/country.

I was pretty sure this was going to happen as Apple stands to make a LOT of money from this deal. Not only do they sell more phones but they get 30% of the app store revenue from all the new customers using and becoming addicted to their iPhones. This will surely make their stock go (further) through the roof!

For now I will be sticking with AT&T. I work in a building with a metal roof and Verzion phones do not work in buildings with a metal roof. I am also under contract and don't want to pay $275 to leave early. I will wait until my contract is up and then see where I stand.

Snow Day in Atlanta


Today I awoke to 4 inches of snow/ice in my yard. I had the choice of either going to work or burning a vacation day so I chose work. Needless to say it was an interesting commute in a city with essentially zero infrastructure for handling snow or ice. I avereaged 20 mph and it took me around 45 minutes to go 9 miles to the office.

All in all I think this was the best choice for me. It made financial sense to not burn a vacation day playing video games at home and instead saving it for my planned vacation this coming November. I am looking at Asia again as my boss said getting another month off is not completely out of the question!

The down side of the snow days here are the ignorance that runs a muck. People drive crazy, the number of accidents approach 1000 in a single day, and you cannot get bread or milk or eggs at the grocery store. I partially blame the media for making people go overboard. One advantage of buying groceries in bulk is so that you have enough to make it for a few days in a bad storm such as this.

It is supposed to continue tomorrow. My boss offered to pick us up from the train station which I will take him up on. Why risk an accident in my car with costly damage or worse injury. I will even get reimbursed for the fare so it is a no brainer! Life must go on!

Tracking every dime you spend:


I have been using for nearly a year now and have found it to be a very good tool for keeping track of my budget and in part my goals. I admit it is not a perfect fit but neither was quicken (classic) or quicken online. I currently use a mix of Excel and to do my budgeting and tracking and that works for me.

Manually entering transactions into quicken was too mundane for me. I had a grasp on where my money went but would lose receipts, forget to ask for them, etc. It was too sporadic. Downloading transactions via newer versions of quicken classic worked but was still sketchy for my accounts. Once I tried quicken online (defunct) and now (owned by the makers of quicken) I was finally using a tool that fit my style for the most part.

I now log into Mint everyday Monday to Friday. Most institutions don't update over the weekend so I take time off from staring at my accounts on Saturday and Sunday. I have pretty well "trained" on how to categorize my transactions. It is usually 80% right on "guessing" the category a transaction belongs too. I still have to watch it as some get misplaced but looking daily not only keeps it's budget categories straight but also keeps me in tune with my spending. I can see where I need to pare back and where I have more room.

The issue with tools like is that it is difficult to budget for every dime you spend (and earn). They do a pretty decent job with the "Everything Else" category and tells you if you are living within your means or not. I have a budget for my salary but not my side income. I have to mark all of my business travel expenses as "reimbursable" so it doesn't throw my budget out of sorts. No big deal as I like to be sure my reimbursements are correct anyway!

Other than that my "real" budget is in excel. It accounts for my salary income versus my budget limits for all of my expenses. I can easily play with the numbers and see my bottom line and then make adjustments to if need be. Any time I have an item that is not in my budget I track it against my "leftover" unallocated money each month. As a safety net I have a $100 misc. category to cover some incidentals but I still have leftover income each month (on purpose). I track this portion in excel and whatever money is left by the 1st of the next month is then added to savings/investments how I see fit. is the best tool I have found for my financial situation. I have realized that in my financial life there are too many variables and it is impossible to account for every dime spent ahead of time. I cannot predict house repairs, car repairs, funeral travel, etc. 100% of the time. The emergency fund exists to offset those but I cannot say for sure what it will cost me this year (or ever!). For some this may seem like too much work but it is the only way I can stay on track to reach my dream of not working as much and traveling a lot more!

Small actions that add up: staying frugal


I always keep an eye out for things that help me get ahead a little bit. Recently I have run out of "big items" to boost my net worth so now I look for smaller items. I have decided to share some of the little things I do to get ahead on a constant basis.


  • Free after rebate electronics: My most recent are bluetooth headsets. I got 5 that cost me 5 cents total after rebates. I sell them on ebay for basically free money!
  • Focus Groups: I am in a lot of focus group databases and get calls weekly. When I get lucky and qualify and the time fits my work schedule I make easy money. I made $40 tonight for 20 minutes + free Arby's sandwiches!
  • The Grocery Game: I have mentioned this before and it still pays off. This is a paid site that more than pays for itself for me. It has cut my grocery bill by at least 40% per month.
  • Selling stuff any way I can: I am purging my house of useless (to me) stuff. I am dumping stuff on ebay, craigslist, and to anyone who will buy it. Electronics are easiest and books and DVDs do ok too. So far I have added $100 to my emergency fund this month!
  • Shop around for everything: I own a home. I have furnished it with stuff that was mostly free or next to it. If I need something I check google/amazon for a price starting point. For furniture and the like I hit up thrift shops. Clothes at goodwill. You get the idea!
Anywhere I can earn an extra buck or save a buck on something I needed anyway is another dollar towards financial freedom. People are rich because they watch their money--not because they spend it.  If you see someone in an expensive car they have no money--it's all tied up in maintaining that depreciating asset. Frugal for the win!

GREAT Article on Food Storage - a frugal hack!


This article is great! I have done a little of this but it has some ideas on reusing food packaging that hasn't crossed my mind before. I like it because 1) you save money and 2) you recycle the stuff you already have and reduce waste and landfill buildup. That is a win-win I will take any day!

Kudos to the Get Rich Slowly staff on this one!

Going on a cruise for $79!


I scored a 2-day cruise from Palm Beach, FL  to Grand Bahama Island for $79 per person! I am doing it the weekend of Feb 26 to Feb 28. This has been on my list for a while and I jumped at the chance to do it cheaply. I will fly down to Palm Beach from Atlanta and head over to the port.

All in I am spending under $500 for the cruise and the flights. I used my Delta Platinum AMEX companion certificate to keep the airfare down by 50%! The annual fee of $150 just more than paid for itself in this one transaction!

The cruise itself is for 2 nights with a day on the island. I have never been on a cruise before so I figure a short one is a good way to "get my feet wet" in cruise experiences. The price includes the food and certain drinks but alcohol and sodas are extra. Tipping is also extra but not too much (pay per person per day).

This will be my first vacation for 2011 and another country under my belt. I am also in the process of figuring out where to go for this coming Thanksgiving. I am strongly considering southeast Asia once again but have other options on the table that I have not ruled out just yet. Only time will tell!

January 2011 Net Worth Update


It is the 1st of the month again and it is time for my net worth report card. I had another good month this month! I made it through the holiday season without busting my budget too badly and got a very nice bonus from work. It is a nice start to the new year!

As of today my current net worth is $4,936.69. That is an increase of $2,010.55 over last month. The major contributing factors were a nice bonus from work, a frugal holiday season, and remaining focused on my big picture goals!

I expect next month to be slower but still good. I have tax refunds on the horizon and I am working on increasing my income on a special project. Happy New Year!

Alternative Income this past month:

IT Consulting: $0
Rebates: $40
Gifts: $235