Funding priority for savings and investments

 

Vacuum the Truck

Listen to Early Retirement ($10k/Month) by Age 35 with Bryce Stewart from The BiggerPockets Real Estate Investing Podcast in Podcasts. https://itunes.apple.com/us/podcast/the-biggerpockets-real-estate-investing-podcast/id1444813634?mt=2&i=1000427801369

For Sale - Pashley Roadster Sovereign 22.5"

This bike is in excellent condition, if not mint.  No scratches.  I have 9 bicycles, all cared for and all kept inside.  I brought this baby from the UK but haven't ridden it much.

Give this classic a new home.  $950

Max Batista

Some Thoughts on Self-Directed Education and Massive Open Online Courses

http://www.thesimpledollar.com/some-thoughts-on-self-directed-education-and-moocs/

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If you've been following news in the world of higher education over the past several years, one of the biggest issues is the potential transformative nature of free online self-directed education. These are often referred to as MOOCs – massive open online courses.

There has been an explosion of really good online learning sites. Some of my favorites:
Coursera features complete online college-level courses, with all of the materials and quizzes
Khan Academy also provides full online courses on topics ranging from total introductions to advanced college topics
Duolingo does a fantastic job of teaching foreign language; I've used it to slowly teach myself conversational French
MIT's OpenCourseware provides mountains of material for teaching yourself technology-related topics, as well as a selection of general topics, too

All of these sites are completely free. There are other online sites, such as Treehouse, that teach other subject (in Treehouse's case, computer programming) for a small fee.

Together, these tools (and others like them) provide enough material to cover at least the general education requirements of many college degrees. I was able to find online material that covered at least a significant portion every single course of my computer science degree that I earned a decade ago. There are mountains of materials available for many other majors, too.

It's all sitting out there, free to use. The real question is what does it mean?

Right now, it's conventional wisdom that people should get a college education because of the large economic advantages a bachelor's degree confers beyond a high school diploma. (A certification from a trade school offers significant advantages over a diploma as well.) If you continue your education past high school, you're going to make some money.

However, with most of the educational material for many majors available out there, what exactly does college provide at this point?

I think there are two things that colleges still provide that are hard to duplicate online, at least for now.

One is interaction and experiences with like-minded people. College functions best as an environment where you interact with new people and have new experiences. Online courseware doesn't provide that.

The other factor is the degree you receive at the end. That degree essentially certifies that you have had significant exposure to the materials in your major of choice. It's considered a required line item on many resumes.

Right now, saying that you completed some number of courses at an online education site doesn't quite have the same weight as a bachelor's degree from a known university. The question really comes down to whether or not that will change. Will there be full online "degree programs" that end up with certifications that are held in similar esteem to a college degree? It's really hard to tell whether that will happen, but we're not quite there yet.

So, here's my advice right now with regards to these free (and inexpensive) online learning tools.

First, they're incredibly useful for lifelong learners and people who want to get ahead in their established careers. I think that's where these tools shine. They work great for professionals who are already in their career paths who want to bolster their skills and knowledge.

In fact, I would suggest that people who are actively involved in these sites to include a small section on their resume listing their continuing coursework, along with a sentence describing what they've learned. If nothing else, it demonstrates that you're a lifelong learner, something that's valuable to a lot of employers. I certainly use them and if I ever find myself in a position where I'm issuing resumes in the future, I'll be listing them on my own resume.

If you're a professional and you can find a course that's within the realm of your career path (either now or later), it's a great use of your spare time to dig into some of these online tools.

At the same time, you shouldn't expect that these will fully replace a college degree. They'll help, of course, but right now, they don't adequately replace key elements of college – the experiences, the network building, and the degree you earn at the end that represents your time and efforts.

Unless there is a radical shift in the next decade, I fully intend to still send my children to college or to a trade school after they finish high school. After that, though, I'll strongly encourage them to be lifetime learners (I already am, actually), and these free (and low cost) online courses provide an incredible opportunity to not only continue your learning, but to add a little bit to your resume, too.

The post Some Thoughts on Self-Directed Education and Massive Open Online Courses appeared first on The Simple Dollar.

Executing the Executor Role

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Over the course of a long life, an individual's financial affairs can become exceptionally complicated. He or she has likely assembled a portfolio of savings, stocks and bonds, life insurance policies, real estate holdings and other assets.

If a savvy money manager, the person has sought out the best credit cards and the best savings accounts, bought and furnished at least one primary home and maybe a vacation property, owns at least one and possibly more cars, has assembled a wardrobe and gathered jewelry and keepsakes. And these are just the possessions with financial, as opposed to sentimental, value.

On top of all this are the debts the person may owe, whether they be a mortgage or two, medical debts, credit card debts, personal debts, and business debts.

Put it together and you have an estate. In end-of-life matters, along with the estate comes a responsibility to entrust someone to settle that estate and close out the decedent's affairs, financial and personal. The person named to execute the deceased's final wishes is called, not surprisingly, the executor.

As part of our estate plans, we all are urged to name executors to handle this challenging job. A lot of us will also, at some point or another, be called on to serve as an executor of a loved one's estate. As one who's served in that role a couple times, I can attest to the fact it's not a function to be taken on casually.

What's involved?

"It's the responsibility of the executor to marshal all assets, to find every penny belonging to the decedent," Sally Hurme, lawyer with Washington, D.C.-based AARP, and author of the forthcoming The ABA/AARP Checklist for Family Heirs, told me recently. "You need to gather all the assets, and you need to find all the debts. You have to pay the debts, and distribute what's left to the beneficiaries."

Depending on the complexity of the estate, and the personalities of survivors likely to inherit property from the decedent, tackling these tasks can require a myriad of traits, talents and insights you probably didn't know you possessed.

You may find the role requires the bulldog tenacity of a gumshoe, the diplomatic skills of an ambassador, the numbers-crunching talents of an accountant and the patience of Job — as well as the time of one with all the free hours in the world.

"There's a multitude of details that must be attended to," Hurme said. "There is lots of paperwork. And everybody wants it yesterday. They want the estate settled yesterday, they want the paperwork filled out yesterday. And the more complicated an individual's affairs, the more details that have to be attended to. And every entity you have to deal with wants different paperwork.

"If you have life insurance, homeowners insurance and medical insurance, each one has to be given a death certificate. You need to go to every credit card company, and to the credit reporting bureau. You have to go to each bank where there might be a savings account, inform them of the death, provide a copy of the death certificate and follow those entities' requirements to close out the account and get the money transferred to beneficiaries."

Other tasks likely to be involved include locating the will, filing the will in the county where the death occurred, finding safe deposit boxes and keys, securing and taking an inventory of the residence, listing the contents of the home and all the assets the decedent owned, providing the attorney with the names of all beneficiaries and following the will's instructions to distribute the estate.

In many cases, the executor also must arrange to have a newspaper publish notice once weekly for three weeks that the decedent has passed so unknown creditors can file claims, which they are required to do within six months.

The first two to three months as executor are very hectic and busy, but the work eventually gets a bit easier. Most estates can be closed in nine to ten months.

Are there rewards?

Having noted all these responsibilities, you're probably wondering if there's any upside to being an executor. In fact, there are rewards to the role.

By law, executors are permitted to take a reasonable fee for administering the estate. Attorneys tell me it's typical for children of the deceased to decline the fee. But if beneficiaries get nasty and matters are contested, some executors do end up accepting a fee based on all the trouble they've had to endure.

The greatest rewards are intangible. Many people derive a sense of gratification from having successfully carried out the wishes of a loved one and administered the estate the way he or she wished it to be administered.

Finally, at some point in their administration of the estate, most executors come to grips with the realization that someday, someone will have to administer their estates, and play, on their behalf, the gumshoe-ambassador-accountant role while at the same time displaying the patience of Job and playing the role of someone with the free time of the world's least busy, most carefree individual.

That can be all the inducement needed to ensure they do a bang-up job getting their own financial houses in order.

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Free Online Classes

http://www.bargaineering.com/articles/downsides-free-online-courses.html

How my mom inspired me during a savings slump

This post is from staff writer Kristin Wong.

I've been saving up for a big purchase, so I've seriously tightened my budget. Staying within my own strict boundaries has been frustrating.

When I get frustrated, I call my mom. Recently, I vented about my finances to her.

She reminded me of her story of rising from poverty. Here we go again. She grew up poor in China; saved ten grand working part time at the grocery store. I've heard this story my whole life, though admittedly, I've never really listened.

"How'd you do it?" I asked. Something clicked, making me realize it's pretty damn impressive to save that much while earning minimum wage and raising a kid alone.

My mom is no expert. She has no advice to give that we don't already know. But her story inspired me to stick to my financial goal, and I think that counts for a lot.

"I wore the same clothes every day," she told me, "because those were the only clothes I had." My brother and I often spoof this story, teasing my mom for laying it on thick. But this time, I let her continue, instead of offering my usual, Yeah, yeah, I get it.

"When you were little," she said, "most people would consider us dirt poor. But I didn't. I know what dirt poor is. I remember those times."

I could hear her voice drifting to a difficult place. "I remember picking up a piece of candy from the ground, that's already been half-eaten, and putting it in my mouth, because I didn't have any food," my mom told me.

I still thought she was exaggerating, but then her voice cracked. I realized what was a tall tale to me was a very real place for her. This wasn't a "back in my day" story. This was my mother's painful memory.

She recalled an exciting childhood dream she had, which starred a loaf of raisin bread. "A whole loaf!" she exclaimed. "You never got a whole loaf! They didn't even sell them by the loaf." In her dream, the sight of that bread made her salivate. She could taste it. She opened her mouth to take a giant bite. Right as she was about to chomp down, she woke up.

"I tried to go back to sleep so I could take that bite," my mom laughed. "I couldn't. So I was awake, but I bit into it anyway, even though there was nothing there."

Sacrifice

Her family moved to the States. Years passed. I was born. A single mom, she found part time work at Kroger. "How much did you make?" I asked. "I don't remember what minimum wage was. I remember my paychecks being four hundred dollars. Yeah, that number sticks out to me."

"Every two weeks?" I assumed.

"Every month," she said, casually.

It wasn't as bad as it sounds. We shared a one-bedroom apartment with my aunt, and rent was a mere $225. "Food was so cheap back then," she added. "And interest rates were high."

She didn't have many expenses, and she got a better return on her savings than nowadays, but still. How does one go about saving five digits on a three-digit living?

Plain and simple sacrifice, my mom says. She cites hand-washing laundry, not turning on the TV, walking to work and winging it with childcare among some of those sacrifices. (My aunt and grandma would watch me when they could. When they couldn't, it was bring-your-daughter-to-work day.)

But it wasn't just about saving. It was about earning more, too. She took on as much overtime as possible and got a second job working at a nearby convenience store.

"What about fun money?" I asked.

"No fun!" my mom balked. "You find other ways of having fun. Go to the park and get on the swing."

Playing devil's advocate, I asked her what kind of life this was to live — constantly sacrificing, never enjoying anything. She sighed.

Perspective

"I had a bad experience to draw from, so it wasn't a sacrifice," she responded. "These things didn't seem like sacrifices to me. I just did what I thought I needed to do."

My mom has her past to draw from in order to stay motivated. I, on the other hand, have been frustrated because I can't eat out as much if I want to afford some fancy video equipment. But listening to my mom choke up about her past, I was able to catch a glimpse of it and briefly put things into perspective. My definition of sacrifice is what most of the world would call lavish.

We all know this, and there's no point in dwelling on it — except that seeing our situation through someone else's eyes might help us stay motivated to reach our goals. Experiencing what she did, my mom had an advantage — she knew she could keep going. In a way, by telling me this story, she was passing the advantage on to me.

"I stuck to it"

My mom recalls a conversation she had with my aunt, "the person you should really be talking to," she says.

My aunt stressed the importance of saving; my mom bemoaned her earnings. "Even if I could save, the most would be, what, five bucks a week?" That was before she was serious. "Why bother?"

"Even a quarter adds up," my aunt told her. Finally, just to see how much it would add up, my mom decided to commit to saving. It was worth a shot, she thought. She wanted to see if my aunt was right. Her saving started as an experiment more than anything else.

"But once I started, I didn't stop," she told me. "I stuck to it. That's why you had crappy clothes when you were little."

Patience

One trait my mom has that's always eluded me is patience. I guess when you're poor, time is one of the few assets you have. My mom always took advantage of it.

"Time heals all," she would say when I was young and crying over a breakup. She acknowledged how trite it sounded and always added, "But it's true." As someone who's always on the go and trying to beat the clock, I've never understood my mother's bond with time.

But when it comes to saving, this patience has worked in her favor.

After putting her mind to it, my mom soon had a hundred dollars. I remember seeing it in a shoebox in our closet once. Woah, a hundred bucks! I yelled, and my mom quickly hushed me, warning that you don't announce things like that.

She put that money in a savings account, where it garnered something like "five percent or eight percent interest. Nothing like today."

Six months and as much overtime as possible later, her $100 had grown into $1,000. She put it in a CD.

"Getting to ten thousand probably took me like, three or four years," she recalls.

Seizing opportunities to save

"What about things like health insurance?" I asked. "It's expensive to raise a kid."

"Fully covered," my mom said, remembering clearly. "I made sure to work enough overtime to be eligible. Anytime they offered overtime, I volunteered."

Later, my mom would go back to school and focus on earning a real salary, but at this point on her financial journey, she was stuck.

Only, she didn't see it as stuck. The more she got to work, the more she saw it as an opportunity to save. She says the overtime, high interest rates and low rent were "lucky breaks."

"Not everyone sees overtime as lucky. Everybody gets lucky breaks, but it depends on you seeing it as a lucky break."

"But what if you're worth more?" I asked. "What if your time is more valuable than the overtime they're offering?"

"Oh, I don't know. When you're poor, it's not about how much you're worth; it's about how much you need."

It sounded sensible, but part of me couldn't help but find it sad. She reminded me of a guy she worked with. He was an engineer, making good money, she said. When the economy turned sour, he turned to the meat department at Kroger. "Of course he was worth more. But he was broke. What are you supposed to do?"

From overtime to interest rates to a job opening at Stop-N-Go, what others saw as normal, my mom saw as opportunity. She took full advantage.

"It's like your Dad — " she said, turning her voice into a whisper. " — how your Dad used to be with money. When he changed his mind-set, he got this refund check. He said, 'Gee, when you're saving, money comes from nowhere.' I told him, 'No, these things happen all your life. But before, they were gone before you could think about it."

To be fair, my dad is more money savvy than my mom in many ways. He's taught me to negotiate, earn more and value my time, for example. But she convinced him to look for opportunities to save.

My mom's story isn't for everyone. Some would balk at it and argue that, sure, a quarter adds up, but it's a realllllly slow way to get rich slowly. But considering where she is now, compared with that little girl eating trash from the street, I'm pretty damn impressed. It makes me think I can do even better, as she's afforded me a better situation.

"I'm so happy where I am, and I feel like, financially, I'm blessed," my mom now says. "But I do have regrets. I could have done better for you. You could have had better day care. You could have worn better clothes."

And again, my mom starts to pause, and I can hear her tears, thinking about our past.

"Maybe you would have had better days, Kristin. I didn't have to sacrifice for you. Your childhood could have been better."

Ironically, those years include some of my very favorite memories. I had no idea we were giving anything up. If that's sacrifice, I was happy to take one for the team.

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