May
8
Is the Economic Stimulus Payment Taxable Income?
May 8, 2008 | 5 Comments
Is the economic stimulus payment (rebate) considered taxable income ? A few readers have asked that question so I figured I'd address it.
Economic Stimulus Payment is NOT Taxable Income
The simple answer is that the economic stimulus payment (rebate) is not considered taxable income by the IRS. So you won't have to count the stimulus payment in your income for your 2008 taxes. However, you should keep track of how much you received.
Why Not? …
Dec
30
Income is the money that you earn from a regular source such as a paycheck from a job or rent checks from a rental property.
Sep
3
Why First Time Home Buyer Programs Are a Bad Idea
September 3, 2008 | 1 Comment
… government agency that underwrites (subsidizes) home loans to poor people. These loans have a lower interest rate and require almost no money down. No money down was good (or so I thought) because I didn't have much.
I also discovered that we probably wouldn't qualify once we were married. Our income would push us over the limit. So I was in a hurry to find something. Back in 2000/2001 the real estate market was hot. Nice cheap houses didn't stay on the market for long. …
Aug
29
Do Succesful People Watch Television?
August 29, 2008 | 1 Comment
… between hours of television watched and wealth.
I did a quick search for information relating income / wealth and television viewing. I didn't find anything in the first few pages which doesn't mean there are not studies, just that I haven't found them. Most of the current research is on TV and health problems like obesity or the effects on children and adolescents.
Since I don't have any academic material at my disposal, I'll have to resort to anecdotal evidence. It's easy …
Aug
21
Spending More on Luxuries Than Necessities
August 21, 2008 | Leave a Comment
… scale would swing back towards luxuries.
I may not be a typical consumer but my spending (not my income) is fairly representative of a lower middle class family. Because of my small house my utility bills are fairly reasonable.
So, if your one of those people claiming that you can barely make ends meet, be honest with yourself. How much are you spending on your cell phone, Internet and cable TV? More than likely those bills are as high as your regular utilities. If you can't afford …
Aug
13
A Random Walk Down Wall Street
August 13, 2008 | Leave a Comment
… no one person has the ability to both accurately access current book value and future streams of income, especially when real world random events affect outcomes, fundamental buy and hold investing is also unreliable.
So if technical and fundamental investing are inadequate what kind of investing does Malkiel recommend? Actually he has a very simple formula for investing. He has a set of rules and corollaries that he uses to chose stocks.
I'll cover his investment framework and his …
Jul
30
The Real Reason I Paid Off My Mortgage
July 30, 2008 | 2 Comments
… the part that really hit home:
I agree, right now, there doesn’t seem to be a short-term low-risk investment that will return an after tax return in excess of most 30-year fixed mortgage interest rates. About a year ago, several online savings accounts were offering 6% APY, and PenFed had a 6.25% CD promotion. Those might have tempted some of the more risk adverse people, as they were probably safer than paying down your mortgage.
Jeff is making a good point here. Interest rates …
Comment by Chris: … If they had been below 4% I probably wouldn't have worried …
Jul
28
… why paying off your mortgage is a mistake.
I've listed his argument and my counter argument below.
1. You have access to ALL of the upside … so as inflation and market conditions push the value of the property upward over time, you gain 100% of the increase, the bank gets none of it.
Real estate has appreciated at about 3.8% a year historically (excluding the bubble). This is also about the rate of inflation. So unless you are in a hot real estate market, there is no upside. …
Jul
24
The Parable of Wealth
July 24, 2008 | Leave a Comment
… the use of the money. So on his way home, Mark has his second catch of the day, his interest income from his investments.
John, the wealthy man, has to pay back all the money that he has borrowed. He purchased first one than two ships on his word that he would repay the shipwright. He outfitted the boats with rope and sail, also borrowed. His wife demanded a fine home to fit their success.
All of John's money was tied up in his business so he approached the mason with an …
Jul
21
How Long Should I Keep Credit Card Statments?
July 21, 2008 | Leave a Comment
… want to make sure to log onto your account and download your statement every month. If you're low tech, just print the statement and file it.
I save credit card statements on my computer hard drive. I then back up all of my electronic documents on a regular basis.
Don't Expect Your Bank to Do Your Record Keeping
The bank's document retention policy may be different than what's required for you. The bank may only keep 3 years of statements. So make sure you have your own …