Archive - July 2010

1
Will Renting Overtake Home-Buying?
2
3 Easy Steps For Creating Your Emergency Fund
3
What Happens When You Over Contribute to Your Roth IRA?
4
Top 10 Mistakes Investors Make With Their 401ks
5
With Real Estate Prices Sinking, Should You Lease or Buy?

Will Renting Overtake Home-Buying?

This past May, sales of new homes plunged to the lowest levels seen since such data began to be recorded in 1963. June and July sales have been tepid. Are home sales likely to remain in a funk for a few years? Some demographers think it’s likely.

Around 1995, the rate of home ownership among Americans began to turn upwards, rising from 64% to a peak of about 69% in 2004.  Although demographics and low interest rates were undoubtedly factors in the increase, the spread of unusually lax lending policies throughout the mortgage industry contributed to a housing “bubble” and… Read More

3 Easy Steps For Creating Your Emergency Fund

Most Financial Planners recommend setting aside a separate cash reserve to cover expenses for emergencies such as a leaky roof, broken furnace, medical expense not covered by insurance or a job loss. Not sure where and how to start your emergency fund? Here are 3 steps to consider when setting up your fund:

Step 1: How much to save?

For single individuals and dual income married couples with no children, you need a fund equal to 3-6 months worth of expenses. For all other married couples the amount should be increased to 6-12 months of expenses. All your current monthly …

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What Happens When You Over Contribute to Your Roth IRA?

My thanks for Natalie Choate for analyzing and pointing out the following information.  Ms. Choate is truly a rock star in the world of IRA law, and much gratitude is owed to her by those of us in the financial community for her thorough analysis and commentary that she provides on such matters as this.

If you live long enough, you’re liable to see just about anything… the following is an example of the most extreme example I’ve ever heard of for using the tax law to your own advantage, deliberately flaunting the law for purposes of evading tax.

The

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Top 10 Mistakes Investors Make With Their 401ks

Over the years you begin to see a pattern of mistakes that people make with their 401ks. Considering that upwards of 66% of current workers retirement income will come from their savings, I’m amazed that people don’t pay more attention. So here goes… the top 10 mistakes I see people make in 401ks or 403bs:

  1. They pick a bunch of funds when they get started, and never revisit, re-balance, or alter their holdings in any way from thence forward. Out of sight, out of mind.
  2. They choose to invest in the top performing funds available at the time of their
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With Real Estate Prices Sinking, Should You Lease or Buy?

As housing prices have dropped significantly over the past two years, it may be time to reassess your living situation.  Since there are many different factors to consider when making a lease or buy decision, I’ll just give you an example (mine) and the formula to help you make the decision for yourself.  Then you can plug in your own information and decide for yourself. The following factors are the main influence on a purchase decision for your personal residence.

  • The price of a home in your area
  • Mortgage interest rates in your area
  • Income tax benefits of home ownership
Read More

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