Reader “DD” has the following two unrelated questions (I corrected grammar to make it a bit more readable):

1)I have a  job where I’m getting new clients with frequency,but I don’t feel Ok. The environment is not motivating.It is too controlling. Financilly I’m doing ok, but the job is really getting too stressful from the moment I get to work in the morning. So, I was thinking of getting another job outside of my country,even when i know is risky, but i’m confused.What do you suggest?

2)Is it true that investing is better than saving?

Wow, #1 is a heavy question, and one that I have also considered, although not too heavily considering we have it pretty good here in the U.S. Now, I don’t know what country DD is in, or even what continent, so it’s hard to say how easy emigrating is from your country to another is. For example, going from the U.S. to Canada is a bit easier that, say, Israel to Syria. Therefore, I’ll try to answer in more general terms and let you do the legwork on the laws of the country(ies) you’re considering immigrating into.

From a risk perspective, of course it’s risky to pack up and leave your country of residence, whether you’re a citizen or not, and especially if you have family involved in the move. But the question I first have to ask is “is the job that bad and the economy that horrible you can’t find something else in your country?”

I’ve thought of moving to someplace like Ireland (when it was the Celtic Tiger) because I had memories there from our honeymoon and another visit, but I know how hard it is to leave my family and familiarity here in the U.S., so the idea dropped off the list.

So, the questions to ask yourself are:

• Can I find something better where I am? What if I move to a different town? Does it really require that I move to another country?
• What will I be leaving behind? (family, friends, a good reputation)
• What problems will I run into? (immigration constraints, language barrier, cost of living changes, problem getting work as an immigrant, too many people in my line of work already, etc.)

It’s easy to jump ship and think the grass is greener on the other side of the border, but look more locally first. If it’s a bad crowd you’re trying to get away from, try a different town. It’s much cheaper and easier to move within a country that between them, right?

Hopefully I helped you with some of the thinking process to help you get to a decision. Sorry I couldn’t help further without more information.

Now, onto your second question: Is it true that investing is better than saving?

In two famous words: It depends. Granted, right now the savings rates are crap, but the market is at a high (although it can always go higher), so buying now means more risk or probability of losing money if/when the market falls. A few questions to ask yourself here are:

• Do you have an emergency fund? If not, then saving enough to pay for 3-6 months of non-discretionary expenses (housing, utilities (not cable), groceries, etc.) is a necessity right now because you’re at risk of going into deep debt or ruining your credit if something bad happens and you can’t pay your bills. Now, in our situation, we have 2 incomes and no kids, so we’re at less risk because there’s less chance we’ll both lose our jobs at the same time. Plus, we have little debt (relatively) and about 6 months of living expenses. If I (the main money-maker) were to lose my job right now, we could live off my wife’s salary without digging into our emergency fund. It took years to get to this point though.
• If you do have a decent emergency fund, do you have other goals for which you need to save? For example, if you’re planning on moving out of the country, how will you fund it? Credit cards? I have different ING Direct accounts for Travel, Car, Home Repairs/Renovations and a general Emergency Fund. Those are mostly funded to my satisfaction, so I can move onto the next step…
• Investing. It depends on if you’re talking about buying shares of a company out on the open market or contributing to a retirement account (401k, 403b, Roth IRA, etc.) or investing in life insurance or lottery tickets. Now that we are funded with our savings goals (almost), we can refocus on investing. For us, that means fully funding our Roth IRAs this year, which we’ve lapsed with in prior years, and fully funding our 401ks. I’m taking advantage of employer matching contributions and tax deferrals as much as possible before even considering investing outside of these accounts.

So again, I can only provide some additional questions to ask yourself, since I don’t know your specific situation, and then provide some insight into our own lives. Generally, you want to be sure you’re secure right now then work on your future security. Don’t get caught up in the fever of buying stocks or gold because it’s “the hot thing” right now, because most often by the time you buy “the hot thing”, it’s cooled off and you bought in the peak market (like we did with our home).

So overall, my advice is to 1) look local first for a new job or career and 2) make sure you have at least an emergency fund before really getting into investing. However, if you can get a company match on your investment contributions, then do the minimum required to get the full match and use the remainder for savings.

Any other advice from my fellow readers and writers?

You’ve been watching some of those reality TV shows about flipping houses and you’re pretty sure you could do just as well as (if not better than) some of the goofs on the tube. What you may not know is that most of those guys have worked long and hard to secure real estate licenses (not required, but useful when buying and selling multiple homes), become contractors (if you aren’t one, you’d better hire a professional for your crew), and learn the ins and outs of the business (from property assessment to money management to securing loans and following local building codes).

So before you jump head-first into flipping, consider some of the pluses and minuses associated with the business.

Let’s start with money

Cash is always the first thought when it comes to starting a career. How much will it cost and how much do you stand to make? The answer to both of these questions is the same: it varies.

If you want to become licensed in real estate, you could enroll in a program that lasts just a few months to prepare for the exam, or you could make a smart career move and get a degree. You may also want to apprentice as a contractor for awhile as a way to start from the ground up. There are several options when it comes to schooling, but you absolutely cannot learn too much. And don’t forget about the initial investment to buy and fix up the homes you’ll be selling. Not to mention, you’ll also need to pay employees and consider the cost of insurance (for both health and property).

As for the money you’ll make…well, that number is virtually limitless. It all depends on how hard you work, how careful you are with spending, and how lucrative the market is.

You will be your own boss

One nice thing about flipping houses is that you have the freedom to manage your time. You will be your own boss. You can work as much or as little as you want (with flexible hours), rush projects or take your time, and schedule in vacations at your leisure. But there are two sides to every coin.

It is also your responsibility to ensure that work is getting done in a timely manner so you don’t have to continue throwing away money on costly monthly mortgage payments (most professional flippers aim to renovate and sell a home before they make a single payment – yes, that means under one month for turnaround).

You may also want to wait until you’re established (or take on partners) before taking time off so you know there is someone you can trust at the helm of your enterprise. And be aware that problems will arise, so plan your schedule accordingly. There’s nothing worse than getting a frantic phone call when you’re thousands of miles away, but that’s all part of being self-employed.

Stress?

Only you can decide if the possible financial gains are worth the stresses of the job. You may make a huge success of your undertaking or fail miserably, and unfortunately, some factors are out of your hands (like the state of the housing market). On the other hand, with proper education, deep and continuing knowledge of the many facets involved in property renovation, solid financial backing, and a sound business plan in place to get the ball rolling (and keep things moving), you stand to earn a good living and enjoy an exciting and fulfilling career in real estate if you choose the life of a flip houses.

—-
Kathleen Macky owns a real estate website where you can browse Wesley Chapel homes for sale.

The last several years have left many investors in dire need of an investment comeback. While the last quarter of 2009 found the market crawling out from the depths into which it had dropped, much is still left to be desired when it comes to replacing many investors’ losses. Like the home team in the last quarter of the championship, many of our portfolios are still down by a couple scores and need a few big plays to get us back in the game.

While 2010 isn’t making any promises be the big playmaker we’re all searching for, some investments out there could at least help make the year profitable.

1) Mutual Funds/Retirement Accounts

There are bound to be a few bumps in the road ahead when it comes to the stock market, however; let us hope that the worst is behind us – at least for a while. Economies around the world appear to be on the slow road to recovery, which means that stocks might continue to climb throughout the year. Until inflation starts to smother the US economy, people will be searching for someone to store their dollars. With banks offering pittances for interest rates on savings accounts and CDs, treasuries offering nothing in the way of enticement, and many mattresses already full, look for investors to continue to dump money into stocks, retirement accounts, and mutual funds, pushing the markets as a whole higher this year.

2) Debt

Before you go dashing out to invest in stocks, bonds, commodities, or currencies, consider your personal finances. When you put money into most investments, you take your best guess at establishing calculated risk on the well-being of your money. However, when paying off debt, you know exactly what your money will be making you – or should I say, saving you.

Sometimes we get so caught up in the talking heads telling us to prepared for the future, save for retirement, invest, invest, invest, that we can’t see the forest for the trees. Putting your hard-earned cash into a mutual fund that might return five or six percent while you make credit card payments at 18% interest is in most cases a decidedly a poor investment choice. Whether it is credit card debt, student loans, a mortgage or car loan, consider taking a good hard look at whether you have the money to spare for investments or should instead be paying off debt.

3) Oil

While oil has been on the comeback trail lately, it’s nowhere near its summer 2008 highs. With economic recoveries seemingly starting to take hold around the world, albeit slowly, look for oil prices to continue to rise as well. By the summer of 2010, we could easily see oil well over $100 a barrel and possibly quite a bit higher. Whether you’re looking to get into the commodities market directly or invest in oil stocks, profits could be there for the taking in 2010.

4) U.S. Government Series I Savings Bonds

Series I US government bonds are inflation protected savings devices. The only time they don’t provide a guaranteed return (which is still better than a loss in my opinion), is during periods of deflation. Otherwise, the bond is based upon a combination of a fixed rate at the time of purchase, and inflation based upon the CPI-U index (Consumer Price Index for all Urban Consumers). The maximum investment per calendar year for I bonds is $5000, but as an alternative, consider investing in TIPS (Treasury Inflation Protected Securities) which can be obtained through most brokers. With plenty of cheap cash streaming into the economy, I’m looking for inflation to start taking off at the end of 2010, and I’ll be ready for these bonds to do the same.

5) A Home

As a first time or even established homebuyer, 2010 can be the perfect time to grab some real estate. President Obama’s extension of the first time homebuyer tax credit as well as the initiation of the existing homeowner’s tax credit means that buying homes, which may already have hit rock bottom prices, could be a great investment. Of course you likely won’t see your investment take off like it would have three years ago when home prices were appreciating at ridiculously high rates. Nevertheless, if you’re investing for the long haul, understand the investment you are making, and the costs involved with owning a home, real estate could be the way to go in 2010. (CD NOTE: Your personal residence is an investment because it’s not a liquid asset like a rental property.)

Mark Brown, a writer from NSW, writes about personal finance for an Australian comparison website offering easy credit cards comparison among a wide range of products including many popular gold credit cards that offer additional services and rewards.

I’ll admit it’s difficult to review a dictionary, and I’m definitely not going to read through the whole thing, but I picked out a few key terms, and skimmed through others, to see how David defines each.

What makes this dictionary different than just Googling the search term, or looking it up on Dictionary.com? Well, not much, but you do get focused financial articles such as “How to buy a home”, “Understanding your credit score”, “Top 10 money mistakes that people make”.

However, I’m not going to try to write a glowing review for one reason. While this is a great resource to have, I foresee only a niche audience who would actually need to BUY a copy and use often. For the rest of us, it may just take up space on our bookshelf as we just find the answers online. But on that note, I’m going to give TWO of you an opportunity to win a FREE copy and see for yourself if it would have been worth buying.

And Now for the Book Giveaway!!!

The contest is closed and the winners notified. Check back to find out who won!

Leave a comment on this article by 5pm EST on Saturday, October 24th, 2009. I’ll use a random integer generator to draw 2 winning numbers, and then email the winners to make sure they’re willing to claim their prize (i.e. send me their mailing address). The winners will have 48 hours to get back to me to confirm, or I draw a new winner. Once confirmed, I’ll announce the winner in a new post.

Feel free to subscribe to my RSS feed or email newsletter to learn when the winners are announced and when I post another giveaway.

Contest Rules

• I only ship to the the U.S.  Don’t complain, it’s on my own dime.
• I will ask for your name and address for shipping, but I promise to destroy the information and never sell/share it
• Void where prohibited by law
• You can only enter ONE TIME. If I draw your name and see you’ve entered already, I’ll delete your entry and redraw.

Now comment! This is the most frugal way to get this book. It’s even delivered right to your doorstep (at my cost)!

(through this link only and with a $2,500 opening balance and one trade)

The code is good October 1st through October 31st.

Anyone use TradeKing? I use eTrade, but again I’m not very active. How does TradeKing compare to others? Would you recommend TradeKing to others?

With the recession in full swing, every little bit counts. With half the year over, a lot of people are doing their mid-year reviews, seeing how they’ve progressed relative to their goals. Part of that process involves looking at your finances. Here are a few things you can do right now to have a big impact on your finances, if you aren’t doing them already.

Check Your Credit Report & Score

One of the best things you can do for yourself is review your credit report, free by virtue of the Fair Credit Reporting Act, once every twelve months. Go to AnnualCreditReport.com to request a report from each of the three credit reporting agencies. Review the report thoroughly and make sure it’s 100% accurate, dispute anything that is incorrect, no matter how inconsequential it seems. Accuracy is paramount.

You might also want to review your credit report score. You can get a free FICO credit scores if you are willing to sign up for a trial membership to credit monitoring, which you can cancel later. Knowing your score is important because it’s being used more and more by other companies.

Start An Emergency Fund

If you don’t have an emergency fund yet, start one! It’s very very simple, just start putting money away for a rainy day and then put that fund into an online savings account. You ultimately have to decide how much to save but for now just start saving. A general rule of thumb is six months of expenses, so that you can weather losing your job for half a year, but in our current economic situation, you might want to increase that.

Start A Roth IRA

If you don’t have a Roth IRA and your emergency fund is on track, consider starting a Roth IRA. It is a retirement investment account that grows tax free and one of the most valuable things you can do for yourself, especially if you are young. The contributions aren’t tax deductible but the growth is, which is why it’s so powerful.

Simplify Your Finances

If you’re like me, you probably have a bunch of bank accounts, a bunch of credit cards, and other financial accounts. Consider trying to consolidate as many of those as possible. Don’t cancel credit cards just yet, as that will impact your credit score, but bank accounts and brokerage accounts can be safety consolidated. The fewer accounts you have, the less you have to manage. The less you have the manage, the fewer mistakes you’ll make and that can save you money down the road.

Jim writes about personal finance and other money issues at personal finance blog Bargaineering.com.

So far, we’ve talked about spending less than you earn, living a frugal lifestyle, and earning more income. You would think that’s all you need to know to reach financial success, right?

Wrong.

If you’re earning more money and spending less money, then you have to figure out what to do with the difference. Therefore, you need to manage your money wisely or else you’ll never get ahead, no matter how much more income you’re making or how frugally you’re living. If you have debt sucking away any bit of interest you’re earning, or no emergency fund to weather the economic storms, then you’re on very unstable ground my friend!

Managing your money is kind of a mish-mash of topics, mostly relating to debt and investing. So, to continue matching up how well we’re doing against The Simple Dollar’s “One Page“, I’ll go through each line item:

Pay off all high-interest debt

Personally, I think your goal should be to pay of ALL debt, because once you pay off the “high-interest debt”, your remaining debt is now “high-interest”, right? Well, at least compared to how much you could be earning, not paying, in a savings account or long-term investments. But in the grand scheme of things, it may not be practical to try to pay off debt when perhaps you could be using debt to finance even higher returns.

In our case, we’ve accrued debt from a number of sources: school, home, auto and credit cards. I believe Trent’s intention for his statement, however, was to get rid of debt related to depreciating assets or unsecured loans. That means auto loans and credit cards specifically. Student loans are slightly different, but I’ll get to those.

Our Credit Card Debt

When I left college I had about $15,000 in credit card debt, and it went up to a peak of over $20,o00 in the next few years. I managed it, barely, through the use of 0% balance transfers, as well as swearing off the use of credit cards as much as possible. However, I still had that debt following me around, rearing its ugly head every 6-12 months when the balance transfer offer ended and I needed to find it a new home. Luckily, I never missed a payment, even when I had to spend hundreds per month in minimum payments, so I could still qualify for 0% offers. That’s also how I accrued almost a dozen credit cards!

But through perseverance, increased earnings and frugal living, we paid off our credit card debt in September 2007. Back in 2001 when I graduated college, I never thought I would be able to pay it off. It took 6 YEARS to pay off that debt!!! But now we use credit cards for convenience and rewards, but make sure to pay them off every month. We haven’t paid interest to a credit card company for almost 2 years now!

Our Auto Loan Debt

I’ve already written about how we lost $14,500 by stupid mistakes from buying cars, but I’m only just starting to learn my lesson. You see, I have a soft spot in my heart for cars. I even started a car blog, but had to quit writing because I got so tempted to buy another car. But as of May 2009, we have no more car loan debt! And you know what? I’ve gotten a few scratches on the truck in the last month that just don’t bother me. I know I’m keeping this truck for a long time (as long as my will and my wife can keep me).

We had a Chevy Malibu that we paid off 4 years early. We sold that and bought a used Mini Cooper and paid it off in 2 months (using mostly the income from the Chevy sale). And now I paid off the truck 3 years early. And it truly was from a combination of living frugally, earning more and managing our money well. Tracking our spending was a major pain for all those years, but the mental and emotional pain was well worth it to know that all we have left is one student loan (as of this writing).

Our Student Loan Debt

Student loans are always grouped separately from the “bad debts” mentioned previously. In reality, though, student loans are debt and you ARE paying interest on them. In other words, the education that cost you $20,000 can end up costing $25k or $30k or more, depending on your interest rate and length of payment.

I’ve never calculated how much extra we’ve spent on student loans, but I’m sure I can look back at tax returns to see how much interest we’ve claimed. It’s definitely in the $thousands though. Interestingly enough, my student loan is our highest interest rate, except for our second mortgage. And since the loan is already consolidated, I have no chance of lowering the rate.

Many people call student loans “good debt” because they supposedly benefit you by increasing your earning potential. However, I also think there’s a cutoff for when you need to pay off the education debt. Did my $20,000 student loan enable me to make $20,000 more than I could otherwise? Heck yeah! But that was 8 years ago when I graduated college. The hundreds I pay each year in interest are now simply that, money going to someone else. The good will I had towards my student loan debt is now gone and so should the debt.

And for those of you carrying student loan debt, and not doing a single thing related to your degree, maybe you should now consider paying off your student loan. Sure, you can deduct the interest (if you itemize deductions AND you’re within the income restrictions), but using the “deductible interest” excuse is like, well, too stupid to try to find a relevant metaphor.

Build an Emergency Fund

Next up is that thing we call a safety net. Some people seem to think their credit cards and home equity lines of credit are their emergency fund, but that’s not a very good idea. It’s too easy to start considering everything an emergency (“We NEED new windows”, “we NEED a new car”, “we need new flooring!”) and go into debt over your head.

But I’ve found it harder to justify pulling money out of a savings account unless we ABSOLUTELY NEED IT. The only thing we’ve pulled money out for was to pay off my truck early, but in reality, I was putting extra money into savings because I hadn’t decided to pay off the truck or pay down the mortgage. We still have 5 months of expenses in our savings account (counting all bills, groceries and even charity).

Do you know how good it feels to know that if BOTH of us lose our jobs, we can sustain ourselves for at least 5 months? And what’s the chance that we’ll both lose our jobs? In reality, we have close to a year of savings if only one of us has a job. If you don’t have an emergency fund, GET ONE! Even a month of expenses saved up can be a lifesaver.

Retirement and Investing

I’ll admit that we’re not maxing out our retirement options. We both contribute to 401(k)/403(b) retirement accounts, but we haven’t elected the maximum we can by tax law.

The basic rule is that you should max out your pre-tax retirement contributions (i.e. 401(k)/403(b)) before investing elsewhere such as a Roth IRA or individual stocks, mainly due to the tax benefits. In the past few years, though, I’ve invested in my Roth IRA without maxing out my 401(k) first. And I’ve also invested in pretty risky funds (and paid the price for it too). But that’s why I don’t talk much about investing on this site. I still have a lot to learn and don’t want to screw any of you up with my poor advice!

Saving for College

The last item under the “manage money” category on Trent’s One-Page is titled “College Savings?”. Trent recommends starting a 529 college savings plan for your children, but I have two things to say about this:

1. What if you don’t have kids? We’re still not sure if we want to have kids. Do we open a plan now just in case? What if we’re just wasting money? What if we feel we need to have a kid to justify the contributions to a 529? (seriously, weird thought go through your mind when you feel pressured into having children).

2. We think our kids should pay for their own college education. If we do have kid(s), we agree that they shouldn’t be given a free ride to college. And 529 plans are not risk-free. They’re investments that can lose money just like anything else in the stock market.

I can talk a lot about this topic, but basically we feel we should be preparing our children for excelling in school and applying for both financial aid (if available) and scholarships. And since we both worked during college, we agree that part-time college jobs build character and provide crucial spending/saving money. We need to be investing in our own future, while preparing our children to take care of their own.

Conclusion

Managing your money is essential to achieving financial success. But there’s so much information (good and bad) out there that you need to be cautious about who and what you listen to, including sites like mine. No one has the exact answer for your situation because all of our life situations are different. Some people want kids, others want careers (or control of their own time), some have jobs with retirement benefits, others are on welfare.

We’re trying our best to manage our money, but this is the area we’re having the most trouble. Neither of us are educated well on investing, even though we know the rule about maxing out pre-tax investments. But we’ve taken the time and effort to identify where we stand and where we need to improve. I think we’re ahead of the curve, even if we have a long way to go.

And you too have the opportunity to make your first, or fourth, move towards creating your own financial success. Spend less, earn more, live frugally and manage your money well and you’ll be ahead of most of your fellow Americans. But don’t ever stop because you’ll always have room to improve or learn or create new earning potential.

Next Up: Control Your Own Destiny!

subprime from beeple on Vimeo.

This guest post was written by ABCs of Investing – a brand new site for novice investors which offers two short and quick investing posts per week.  Feel free to subscribe to their feed.

Do you have friends or relatives who don’t know what kind of investments they own?  Couldn’t tell you the difference between a mutual fund and a mutual friend?  If you ask them about stock market indexes, they start trying to remember which of their fingers is the index finger?

If you are a true friend then you will tell them to start learning about investments!  Tell them that investment knowledge, in however small amount, is the most valuable thing they will ever possess.  Some people tend to see investments as something that you are either an expert at or you know nothing and hire an expert to invest for you. Nothing could be further from the truth!

Even “financial experts” at not experts at all things financial – everyone has their areas of expertise and weakness.  The reality is that most people don’t have the time or interest to become a true financial expert, but that doesn’t mean they can’t learn enough to at least know what is going on.  It doesn’t matter if you have a financial adviser or not – financial education should be a priority for you.  Financial advisers are generally paid by commission, so if you don’t know anything about your portfolio or financial goals then you run the risk of being taken advantage of by your adviser. He or she might be tempted to put you into investments that are more suited to their pocketbooks rather than your own.  Nobody cares about your money like you do.

How do I get my friend/relative/neighbor to start learning?

Start with asking questions – what do they invest in?  Are they planning for retirement?  Or if that is too nosy then maybe tell them about your investments and portfolio planning.  If they are receptive to this sort of conversation then maybe suggest a book they can read – find out some good financial books and email them a list.  Suggest some blogs or websites they can learn from.  Bottom line is that the more reading they do – the better.

“There were monsters on that ship and truly we were them” – Lisa Simpson

If you are thinking that maybe you need some financial education as much as, if not more so, than your friends then I can say only one thing – get learning!!

While I’m hesitant to max out my 401k when we still have so much debt, I decided to bump up contributions to 10% of my income. Most financial advisors say to automatically save 10% and invest 10% each month. While we’re not saving, at least I’m not investing 10%.

Now I just need to make the change with Stacie’s contributions…

And if you’re wondering, I’m bumping up contributions because it’s a buyer’s market in stocks right now. Sure, I thought the bottom was 1,500 points ago, but looking at the big picture, we’re almost 5,000 points off the market’s high of just a year ago. We could continue to slide, slide, slide, but I have 30-35 more years to recoup those losses.

But if you’re in your 50s or 60s, I don’t advise contributing more to your investments, but that’s all I’ll say. Talk to a certified financial planner (not me) to find out what you should do. Who knows, your holdings might not be too risky (i.e. you might already be strong in bonds, etc. and weren’t hit hard). Your investment strategy really depends on your age, portfolio/holdings, and risk profile. You need a one-on-one with a knowledgeable person to analyze all those and decide the next steps.