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January 30th, 2006 Podcast from the Money Guy, J.Brian Preston, CPA CFP®, PFS

January 30, 2006

Episode #1 of Money-Guy.com Podcast

 

 

Articles of Interest:

Why Big Insurers Are Staying Away From This Year’s Hot Investment Product from the December 14th, 2005 Wall Street Journal by Jonathan Clements

Choosing a 529 College-Savings Plan: When It Makes Sense to Go Out of State from the January 4th, 2006 Wall Street Journal by Jonathan Clements

Additional Internet Resources:

College Savings Website with option analysis

Michigan Education Savings Program

Nevada / Vanguard 529 Plan

New York 529 Direct Plan

Utah Educational Savings Plan

Virginia / CollegeAmerica Plan (only purchase the F shares)

Georgia Higher Education Savings Plan (not mentioned in the article, but since most of my friends, family, and clients live in Georgia and could take advantage of the Georgia tax deduction I wanted to provide everyone with the link. The plan is very similar to the Michigan Plan that is managed by TIAA-CREF)

Five Best (IRS and Tax Planning Books) from the January 28th & 29th (Weekend), 2006 Wall Street Journal by Randy Blaustein

The Cash Back Card Face-Off from the January 28th & 29th (Weekend), 2006 Wall Street Journal by Ron Lieber

Additional Internet Resources:

Emigrant Savings Bank; Credit Card returns 1.25% on all purchases, but you have to keep a $10,000 money market account with their bank (in addition to offering a good cash back credit card this is a great bank to have a money market account with; they are currently paying 4.25%)

Fidelity Investments; Fidelity Investment Rewards Card that is attached to your personal investment account returns 1.50% (for every $5,000 you spend $75 is deposited into your Fidelity investment account) & the Fidelity Investments 529 College Rewards Card credits 2% to your Fidelity-managed 529 plan account

Bank of America Power Rewards card gives back a 2% statement credit once you have spent $50,000, but you get less if you spend less

Financial Chaos Topic for January 30th Podcast:

Retirement Planning and Building

True Financial Independence

After recording the Podcast on the importance of retirement planning I wanted to provide you with some suggestions:

ROTH IRAs are tremendous in saving for retirement because all of the earnings in your account accumulate completely tax free (meaning that when you retire you can pull money out of the account and thumb your nose at the IRS because you owe them nothing). For 2006 you can contribute up to $4,000 unless you are over 50 in which the government allows you an additional $1,000 Catch-up Contribution bringing your 2006 contribution limit to $5,000.

ROTH IRA providers that have great investment options and are down right cheap with no commissions:

Fidelity Investments

Vanguard

I also wanted to encourage you take full advantage of your retirement plan at work. If you are not participating at a minimum to receive the matching contribution from your employer you are throwing away free money. There are not too many things in life that are free so to pass on this benefit is only hurting yourself and your future retirement.

Please try to become a HYPER SAVER by putting away and saving between 15%-20% of your gross wages (that means before taxes and all of the other deductions that come out of your paycheck). Remember the average individual savings rate in America is actually a negative .5% (this is unacceptable and dangerous). Do the right thing and build financial independence and I promise that you will sleep better at night.

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