Archive for October, 2009

Your Retirement Account: Is It Ready for Hospice?

Wednesday, October 21st, 2009

Your retirement account-Is it on life support? If you attached a pulse ox would the alarm go off-O2 sat near zero? Have you given up on your retirement account as a no-code? Would a state inspector, after a review of your statement suggest you call hospice? Or are you like most-just afraid to look at your 401-k, IRA or other retirement account statements?

I know, too many medical references for one paragraph, but remember, this is The Millionaire Nurse Blog. We are supposed to speak medicalese. If you want to get a free e-book on Emergency Money Resucitation go to my website The Millionaire Nurse, sign up for the free ebook and you will also receive a free mini-course on managing your personal finances.

An article in today’s Wall Street Journal, by Karen Blumenthal discusses the fact that many balances in retirement accounts are not as bad off as one would fear. Why is that?

One of my precepts in teaching personal finance (not an original thought of course) is to pay yourself first. How does that relate to retirement accounts?

The way to accumulate wealth in your retirement account is to put a certain sum into the account, automatically, out of your paycheck each month. After paying off your debts, you want to gradually increase the amount deposited monthly until you reach 15% of your income.

The devastating drop in all investment accounts over the past 18 months is terrible of course. But if you have continued the monthly contribution since the first of the year, the increase of the value of those new deposits may have almost completely made up for the losses in your account from the market drop last year.

In an example described in the above article, many accounts were down less than 10% with some actually being up a small percentage over the past three years. So ignore the doomsayers and stick with your plan.

Mathematically this occurs because of dollar cost averaging. This means you bought stocks this year while they were on sale, and your new money is up significantly. Those people who stopped contributing because of fear have not had that rebound, and they are still hurting big time.

So the moral of the story is, you can’t predict the future direction of your investments, so don’t try. Put your money into your account, and let it grow, tax free. Take the bad years along with the good.

Make sure you are taking full advantage of any matching by your employer-if you don’t know, call your benefit’s manager at work tomorrow and ask.

The road to rich’s is paved by long term savings, so please take advantage of compound interest. Remove the No-Code order on your retirement accounts, and let them grow!

Let me know your thoughts, comments, and any questions about your retirement account and the market rebound this year.

Tags: 401-k accounts, Retirement accounts
Posted in personal finance, Retirement savings | 1 Comment »

Gift Cards: Gift Cards Wasting Away-Plastic Jungle gives you another option

Monday, October 19th, 2009

Gift Cards

Gift cards, do you have them wasting away on your dresser or in your wallet?

The gift card industry is now big bucks. Eighty billion was spent on gift cards in 2007, with a slight drop in the tough 08 economy. Of that, 15-20 % of gift card value were never used. A Billion Dollars-lost down the drain!!!!

That is a boon to those companies who sell a lot of gift cards. The sellers other advantage is up-spending. That means folks spend more than is on the card-so using their own cash in addition to the card.

I am not going to get into the emotional aspects of gift card giving. In our extended family,outlawing gift card giving caused a near revolt-so the rule was rescinded.

Selling your gift card

However, there is a website for everything it seems. Plastic Jungle is a website that broker’s gift card sellers and traders with potential buyers and other traders. The most common discount for cards seemed to be between 5 and 10 % of total value of the card for purchasing, trading being more neutral with folks wanting to trade for a card of near equal value.

So Millionaire Nurse wannabe’s who know they have to purchase something at Wal-Mart and the item is on sale for 30 % off, and they can buy a Wal Mart gift card for another 10% off, then that is real money saved.

So, take a few minutes and search all the potential hiding places at home, car and work for an unused gift card. Redeem them either at the store on the card, or make the effort to sell them on the Plastic Jungle. Don’t let those cards waste away.

Tags: buying gift cards, getting rid of a gift card, plastic jungle review, selling your gift card
Posted in Wealth building | 1 Comment »

Extended warranties: Worthy or Worthless?

Thursday, October 15th, 2009

Extended Warranties

Extended warranties, written about in the Wall Street Journal.

Are the extended warranties worth the cost?

Like most insurance policies, extended warranties are a guard against risk. The risk of premature failure/breakdown of whatever product being warranted. As the article mentions, Consumer Reports did a study of extended warranties, concluding, in general that extended warranties were not a good buy. Why? The amount of money saved, on average, was not worth the cost.

The article makes the point that extended warranties offered frequently have a better profit margin built in, then the profit from selling the product in the first place. Making the sales folks push them-I know many of you have sat through those pushy sales presentations-making you feel like a dummy for not buying the warranty.

Many extended warranty offers you get phoned about, at the end of the built in warranty, are offers from third parties, not the original manufacturer-therefore how do you know if they are legitimate-buyer beware!!!

I know my pickup-paid for in cash of course-hit its five year powertrain guarantee a few months ago. I received many un-solicited calls offering a new extended warranty around that time. Since I never took the call, it was just left on voice mail, I don’t know if it was GM making the call, but I suspect it was a third party offer.

The majority of buyers of new cars this year, have actually purchased extended warranties, which I find surprising.

In my medical practice, extended warranties are almost required for expensive equipment. Required because if you don’t buy them, you have to go to the end of the line, so to speak, if the equipment breaks down. They will not guarantee prompt service without them. They have you over the proverbial barrel.

I have made it a practice, however, to ignore extended warranties for purchases made for things around the house. We have purchased a new washer, stove, and electronics in the past year,and have never regretted, so far, not paying for the extended warranty.

If you follow my guidelines on your purchases, making sure you buy quality for a good value, it is unlikely these days for the extended warranty to become necessary.

So what are your thoughts? Let me know if you buy extended warranties and what your outcomes have been.

Tags: buying extended warranties, extended warranty, financial management, should you buy extended warranties
Posted in personal finance, Planned spending aka budget | No Comments »

Online banking: ibankUP, A Review of a New Online Banking Option from Plastyc for Gen Y

Wednesday, October 14th, 2009

Online banking got a new player this week, with Plastyc announcing a new online banking option directed towards Gen Y. See this news release from the CEO, Patrice Peyret.

Plastyc, a privately held company and provider of pre-paid Visa cards, has added an online banking option for teens (with a parent’s permission) and for young adults who don’t need all the services of a full-service bank, but need more financial options than just a pre-paid Visa. According to the website a new account can be set up in 5 minutes, with only a social security number required-no other bank account, or other credit info needed.

See this page for a summary from the ibankUp website on a comparison of various fees to traditional banking.

What are the benefits of such a service:

Lower monthly fees
No overdraft fees-you can’t overdraft, because the system will not let you spend more than is in your account.
Balances are always accurate, since you access the site for checks-no paper allowed, and the card use is immediately reflected electronically.
Your money can be deposited by direct deposit, credit card transfer or the use of the Green Dot MoneyPak sytem already available at many popular retailers such as Wal-Mart, K-Mart, Rite-Aid and CVS, just to name a few.
They do allow a system for cash rewards, if you shop at their ibankUpside mall.
You can access your balances free online, smartphone, and by a cool facebook widget, and for a small fee at most ATM’s

What are the downsides:

Only your first online check is free, after that they are two bucks each.
Although the site promotes itself as a way to teach about/limit overspending, it still means using plastic to pay for things-which some studies suggest leads to overspending.

So, what do I think about this new e banking option? Anything that limits overdraft fees, and limits costs, while at the same time improves visibility and immediate feedback, I think is a plus. To think that the world will ever go back to cash only is naive even if spending may be a little higher without that pulling of green stuff out of your pocket.

But more importantly, what do you think? Love to hear your feedback on this new option of online banking for the gen-y consumers.

Tags: Online banking, pre-paid debit cards
Posted in credit cards, personal finance, Planned spending aka budget | 1 Comment »

Coupons:Saving Money with Online Shopping

Tuesday, October 13th, 2009

Online Discount Coupons

Some of you may remember green stamps.

They were like reverse coupons. When you checked out at the grocery, they gave you a certain amount of green stamps and a stamp book.

When you collected enough stamps, you could purchase items from the stamp catalog-one booklet full for a bauble of some sort. Just another marketing method that has gone the way of the dodo bird.

Low tech coupons remain, in newspapers and ad inserts, that you cut out, and take to the retailer. High tech-versions exist online.

There is also a hybrid-websites that allow you to find your grocery or pharmacy coupons online, print them out and shop locally.

Coupons: Worth the trouble?

Yes and no is my usual straightforward answer.

If you use coupons to buy brand-name products, that are more expensive than store brand, then no, they are not worth it. If you are able to use them to truly save money on your purchases and lower your overall grocery bill, then go for it.

Many folks view the coupon thing as a competition to see how much they knock off their grocery bill.

The high tech version of couponing is more my style. When you have made the choice to purchase an item online, then it is well worth a few minutes to check through the various websites that will allow you search for a coupon discount on that item.

You use the code to plug into those coupon code boxes you see right before check-out. You know those boxes that always make you think,” hmm, someone is buying this for less than me, what’s up with that?”

I have visited a few of those coupon sites online to share with you:

These are all good sites. I like the layout of the Coupon Album best. It is just easier on the eyes, and easier to use.

The biggest danger with these sites is seeing something you want-then busting your budget. Remember, only buy things that are in your spending plan.

Compare Prices

Check all available sources until you are sure you are getting the best price. Try pricegrabber and bizrate to compare prices.

For an article from PC Mag on its opinion of the top ten coupon pages check out this site.

My coupon story:

I need a new video camera to add video to my websites. The one I currently use is 12 plus years old, and it is very difficult to transfer video to my computer.

I am looking for a Flip video camera-I have done my due diligence and it is time to execute. My budget was $200 bucks as that seemed to be the standard price.

I was really excited to see a coupon for 10 % off from the Flip manufacturer. Before I executed I saw a post on CNET about Flips on Amazon. The check-out price was almost 40 bucks less from Amazon-without a coupon.

When you decide to buy something online, then take a few minutes to look at these coupon sites and see if you can save a few bucks. But always check around and make sure the price with coupon is really the cheapest price.

Please share with me if you have found a site you enjoy using for coupon shopping. Also share with us your coupon successes-it ain’t braggin if you did it….

Tags: best coupon sites, coupons, saving money with coupons
Posted in coupons, Planned spending aka budget | 3 Comments »

Food Budget, Now it's Time to Party!

Monday, October 12th, 2009

Budget Buster: You’ve worked a 12 hour day-your food budget is at its limit. The idea of cooking the chicken you had put in the fridge to thaw makes you nauseated. Your car just keeps leaning towards that turn to Carrabba’s-take out. What do you do?

You need to give yourself a break, without breaking the budget. “So how do I do that, smarty?” you say. Have a “party meal”. I can’t take credit for this one. When my kids were little, when I called home to let my wife know I wouldn’t be in for dinner-it was apparently party time. I don’t think they were celebrating my absence… but who knows. Being an Ob/Gyn is tough sometimes.

Out came the whole wheat bread, cut into squares, with peanut butter and bannana applied just so. Crackers with cheese were arranged on a platter. Carrot sticks, celery, and broccoli were arranged on a tray with a central cup for dipping in the ranch dressing. I am sure the kids were drinking water, or juice-the wife-who knows-but it probably wasn’t water.

My point is a healthy meal can be thrown together in about 10 minutes. It doesn’t have to be a four course gourmet dinner. Just make sure it is nutritious, and quick, but no budget busting required.

The only way to stay on a budget, or the term I prefer, Planned Spending, is to resist those spells of “I deserve a break today” that will torpedo your efforts and all that planning. Studies show smokers who are successful at quitting, have planned what to do for their quit day. They have a diversion ready for those times that they would be normally lighting up. They have buddies ready to intervene when their resolve is weakening.

To stay on a “planned spending” course you need to do the same. Have inexpensive healthy snacks, raw veggies, and fruit, or their dried varieties on hand. Know that there will be times when your best intentions will be blown out of the water by real life. And know that if after all this, you still turn into Carrabba’s-the shrimp alfredo is pretty good-and you know you will make it last for two meals. You just have to eat mayo sandwiches for a few days to make up for it..

Tags: budget busters, meal planning
Posted in personal finance, Planned spending aka budget | No Comments »