Have you thought about cutting ties with your cable company, but you are unsure of how you will survive without it? I have started considering it because the cost of cable is extremely high and I don’t even watch 80% of the channels. I currently pay $83 a month for my cable. This is an unnecessary expense that I could cut out of my budget. I have done some research on what to do for television if I cut my cable and wanted to share it with you.
One option is to purchase a Roku Box ($59-$99), which allows you to stream over 300 Internet channels to your TV. Here are the channels that are available. There is no monthly fees for this service. Roku also allows you to access Netflix and Hulu Plus. Each of these services provide streaming TV shows and movies for $7.99 a month each. This a substantial savings compared to $83 a month. Plus many of your favorite TV shows that are on cable can be watched through Netflix or Hulu Plus. The only issue with this option is that if you like to watch sports from ESPN you will not be able to stream that live through Roku.
If you are not interested in the channels that Roku offers you can stream Netflix and Hulu Plus through your Wii, Xbox 360 or Playstation 3 game console. There are also many blue ray players that allow you stream these services as well. In addition to streaming Netflix and Hulu Plus to your TV, there also apps for smart phones and tablets that allow you to stream TV shows and movies to these devices with your monthly membership. The only drawback with the Xbox 360 is that you have to pay a monthly or yearly fee for Xbox Live Gold service you use this option. Although, this is the only console that provides access to ESPN3, which provides live streaming of various sporting events. The use of a gaming console or blue ray player seems like the best option because I am not really interested in most of the channels that Roku offers.
You may be thinking this is all fine and dandy, but what about local channels. If you own a HD TV it most likely has an HD tuner, which allows you use an antenna to receive digital channels over the air. Many of the digital channels available over the air will be your local channels. There are many antenna options from indoor to outdoor antennas and most are reasonably priced. Here is a link to Antennaweb which allows you to search for the digital channels that are available in your area over the air.
Unfortunately, if you choose to drop your cable you will still need to pay for Internet to access any of the options described above with the only exception being the local channels over the air. I haven’t dropped my cable yet because I am addicted to ESPN and I am not sure if I can get what I want out of ESPN3. If I could just pay per channel my life would be so much easier, but the Federal Communication Commission won’t allow this to happen. I can dream right!!
Have you cut your cable? If so, how well has worked out?
If you are like me, you wait till the last minute to file your taxes because you owe money. Lucky for us, this year we have two extra days. Taxes are not required to be filed until April 17, 2012. I do this because I don’t want the government to have my money any longer then they already do. I also do this because I want to make sure I have accounted for every deductions or tax credit I can get. 63.3% of the population takes the standard deduction, so the other 36.7% of us need to make sure we deduct every possible penny. It never ceases to amaze me that I forget to deduct something every year. Here are a few things that many people forget to include, which can help reduce your tax bill:
- Charitable Contributions – Whether you give cash or non-cash contributions, make sure to keep track of them and keep all receipts. Cash contributions include donations to a church or charity. Non-cash contributions include clothes, household goods, electronics, cars, etc. that you donated to charity organizations such as Goodwill or the Salvation Army. One thing many people forget to deduct are portions of the cost of charity events or charity golf tournaments. Ask the charity what portion of their ticket price or registration is tax deductible.
- State Sales Tax Deduction – If you live in Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming make sure to deduct the amount of sales tax you paid. You have two options; you can keep all your sales receipts and calculate the sales tax or take the standard sales tax deduction given by the IRS. The IRS deduction is based on yearly income and they provide a calculator, here is the link to the IRS Sales Tax Calculator. If you live in a state that you pay income taxes, you can take either an income tax deduction or sales tax deduction, whichever is larger. You can’t take both.
- Vehicle Registration Deduction – Your vehicle registration fee is deductible as long as the fee is based on the value of the vehicle and not the weight. You can’t deduct the other fees that are the same for everyone else.
- Child Care Credit – If you have a child you probably already know that you get a tax break for the child, but you can also receive a credit for child care that you pay for while you work. A tax credit is better then a deduction because it reduces your tax bill dollar for dollar.
- Retirement Contribution – If you have any IRA or Roth IRA, you can contribute up to $5,000 ($6,000 if over the age of 50) by April 17, 2012 for tax year 2011. This would decrease your taxable income by the amount you contribute. If you are going to do this make sure that you state it is for 2011.
- Student Loan Interest and Higher Education Costs – You can deduct interest that you pay on your student loan(s) as long as your parents don’t claim you as a dependent. Although, you can claim it even if your parents pay the loan for you. Additionally, if you are an undergraduate student or graduate student and your parents don’t claim you as a dependent, you can claim the tuition expenses as a deduction.
- Casualty and Theft Loss Deduction – Unfortunately, many Reno, NV people experienced terrible wildfires that destroyed homes and property. There are other disasters that happened throughout the country. You may be able to deduct the losses that you incurred. If you were a victim to a theft you may also be able to deduct your losses.
These are many of the common deductions and credits that are missed by individuals that itemize their deductions. Make sure to check with your tax advisor or accountant to verify that you are eligible for these deductions. Good luck this tax season and don’t forget you have two additional days to procrastinate on filing them. I will take advantage of the extra time.
I mentioned this term in my previous post about crowdfunding. Microfinancing is the practice of providing financial services to low-income individuals or to those who do not have access to typical banking services. The idea behind it is to give low-income individuals the opportunity to lift themselves out of poverty. Microfinancing differs from crowdfunding because it is a interest free loan that you are providing that will most likely be paid back. I am not telling you about microfinancing because I think it is a great investment. I think it a great opportunity to help less fortunate individuals through out the world improve their current lifestyles.
If you have some extra cash and are looking to help out someone, check out Kiva. Kiva is a non-profit organization that has created an online platform to connect low-income individuals with individuals from around the world that are willing to provide financing. Various loan opportunities and their purpose can viewed through their website. There are currently 2,542 loans available to browse. You can loan as little as $25 many diverse sectors, which range from agriculture to retail operations. Kiva has helped facilitate more then 386,000 loans totaling over $296 million. The current repayment rate on the loans is 98.94% and they have helped people in 61 countries.
You may be wondering what happens to your money after you give it to Kiva and how do you know these individuals are legit. Kiva has partnered with microfinancing institutions all over the world, which they call field partners. These field partners are responsible for screening the loan applicants, posting the loan requests, disbursing the loans and collecting repayment.
Here is a story of how Kiva works and how a loan helped a farmer in Bolivia transform his business:
OK, I will now jump off my crowdfunding and microfinancing soap box. The purpose of these posts was to show you different and exciting ways to help others if you have the means. There is a certain satisfaction and joy knowing that you helped an entrepreneur fulfill their dreams or an individual provide food and shelter for their family.
Let me know what you think about crowdfunding and microfinancing.
If you are like many people, you have never heard of the concept of crowdfunding? Or you have heard it mentioned, but aren’t exactly sure what it means. Well I want to change that because I think it is the future of investing. Crowdfunding is the practice of individuals coming together to support and fund projects by other individuals and organizations. Crowdfunding was developed from the idea of micofinancing, which is the practice of giving small loans to low-income individuals that don’t have access to typical bank loans. These small loans give low-income individuals the opportunity to do something that lifts them out of poverty. I will discuss microfinancing in a future post.
Kickstarter is an online crowdfunding platform for individuals to post projects which need funding. These individuals describe their project and set a financial goal. Then individuals, like you and me, review the various projects and can choose which project(s) we want to help fund. These are donations to these projects, but the projects are required to give a reward to you if they become fully funded. These rewards can range from a CD of the project to an invite to visit the set.
Check out this video of a few projects from Kickstarter:
At this time, crowdfunding can not provide a return on your investment because it is illegal in the United States. The Securities and Exchange Commission would require the owners of each project to register as a broker, which is not feasible due to the compliance requirements. On March 8, 2012, the House of Representatives passed a billed to make crowdfund investing legal. The bill still has to go to the Senate and the President for approval, but it is projected pass by summer 2012. This could be a significant boost to our struggling economy by giving start-ups access to other avenues of capital. Crowdfund investing is already legal in Europe and has been successful.
There are other crowdfunding sites such as Solar Mosaic , which provides the opportunity for individuals to help fund solar projects. The money is paid back, interest free, from lease payments paid by the owner of the building that the solar is installed on. Microgiving is another crowdfunding platform this is much like Kickstarter.
Crowdfunding can be a great thing and could be a great alternative investment vehicle for those looking to diversify their portfolio. I hope this blog helped you understand crowdfunding and its benefits because I truly feel that it could become the future of investing.
If you were standing on a 30-foot cliff over the ocean would you jump? What if I told you there were no rocks you could hit and the water was 25 feet deep? The risky person would probably jump without analyzing the dangers. The neutral risk person would weigh their options given the facts. The risk averse person wouldn’t jump even if you told them their was a pot of gold at the bottom. This same idea applies to your money. What levels of risk are you willing to take?
A risk loving person is looking for a quick and high return on their money. They are willing to lose it all for the chance to double it. They will either bet it all on black at the roulette table or place it all in the stock market thinking they found the next Google. This type of person lives dangerously, which can lead to wealth or bankruptcy in a hurry. They are often the younger generation because they have the time to recover losses before retirement.
A risk neutral person is likely to weigh all options prior to making a decision. This type of person will most likely diversify their portfolio and spread their risk over various investments ranging from certificates of deposits to stocks. They don’t like to have all their eggs in one basket. If this person is given the option to take $50 now or given a 50% chance of winning $100, they will likely take the $50. There are some risk neutral people that will take the 50% chance, but for the most part they will take the guaranteed money.
A risk averse person will minimize risk as much as possible. They will accept a moderate to low return on their money for taking little risk. This person is often older because they don’t have time to recover the losses prior to retirement. They will generally invest in index funds and government bonds to protect that nest egg.
Your level of risk is most important aspect to understand prior to investing. I am 50% risk neutral and 50% risk averse. I hate losing my money, but I may need to shift more towards risk neutral so I can make my money work for me. Like I have stated before, the stock market is an educated gamble. Have fun investing, but make sure to understand your level of risk.
What kind of risk taker are you? I would love to know.
And by the way, I would jump off the cliff if I knew the water was deep enough and that there were no rocks.
Have a great day!!!
Have you been wondering if it is a good time to invest in the stock market? Have you thought about liquidating all your stocks? Is the stock market artificially inflated?
I have been asking myself these questions for the past few months, but the stock markets have me really scared. I am having a really hard time figuring out what is helping the markets sustain their current levels.
On March 9, 2009 the Dow Jones Industrial Average closed at 6,547.05 and has risen to 12,907.94 as of March 8, 2012. The stock markets have continued to climb while the economy still struggles. To me, this doesn’t make sense. I am extremely happy for people that were able to turn their 201(k) back into a 401(k). Although, these people need to be careful and possibly think about shifting their portfolio away from equity investments and more into bonds and mutual funds. These assets are much less risky and if the stock arkets start to drop then your wealth won’t go with it.
I am usually a very optimistic person, but I feel my pessimism is warranted. The housing market is not likely to recover within the next year. This year could be one of the worst years for foreclosures. Additionally, there are not enough qualified buyers to purchase the surplus of homes. The unemployment rate is still high at 8.3%. The average gas prices as of yesterday for regular unleaded was $3.76 and it continues to climb. The consumer confidence index is still fairly low. The financial woes in Greece and Europe are also very concerning. These are just a few reasons why I think the stock markets will not be able to sustain their current levels.
I am not posting this to try and scare you. I am doing it to make you think about where you have your money invested. I mentioned in an earlier to post to avoid becoming greedy in the stock markets. Take your winnings and walk away. If you are thinking about investing, I recommend you do your research and tread lightly.
What do you think the markets are going to do? Am I off base with my pessimism? Let me know what you think.
Imagine that you are sitting on a beach in the Caribbean with a cold drink in your hand and the warm sun beating on your face. Two days ago you were packing up your office and saying your good byes. As you walk out of your office you say to yourself “ahhhhh retirement”. Retirement is supposed to be a joyful moment in your life, but for many people it is terrifying. They have not saved enough money to enjoy retirement without working. The following are some interesting retirement statistics from Business Insider:
Approximately half of all workers in the United States have less than $2000 saved up for retirement.
36 percent of Americans say that they don’t contribute anything at all to retirement savings.
35% of Americans over the age of 65 rely almost entirely on Social Security payments alone, which averages only $1,177 a month.
A record 33% of Americans now plan on working past the age of 70.
43% have less than $10,000 in retirement savings.
Only 46% of workers have tried to calculate what they need to save for retirement.
In order to live comfortably in retirement the average person would need to save a minimum of $750,000. This seems like a lot of money, but if you start saving early it is not that difficult to reach. The first thing you need to do is figure out how much you will need in retirement. Here is a great retirement calculator to help you. The next step is to figure out where to invest. There are many options, but here are a few of the most common types of retirement accounts:
- Individual Retirement Account (IRA) – This account can be setup by you with most financial institutions. You can contribute a maximum of $5,000 a year if you are under the age of 50 or $6,000 a year if you are over the age of 50. Contributions will reduce your taxable income and are tax deferred, which means you don’t pay taxes on the money until you withdraw it.
- Roth IRA – This account is a more flexible version of the above IRA. The maximum contribution is the same as a traditional IRA, but the contribution can only be made to one of these accounts or split between the two accounts. According to tax law, you cannot make a yearly contribution of more then $5,000 or $6,000 to all your IRA accounts combined. Roth IRA contributions are not tax deductible, but the funds can be withdrawn at any time without a penalty or tax.
- 401(k) – This account is setup through your employer if they offer it. Contributions to this account are tax deductible and the income is tax deferred. These accounts are great because most employers will match a portion of your contribution up to a certain amount. For example, if you contribute 6% of your monthly income to the 401(k) your employer may match 50%. This means they will contribute an additional 3% of your monthly income. Where else can you get a guaranteed 50% return on your investment.
- SEP IRA – This account is designed to help self employed individuals and small business owners. Contributions are tax deductible and all income is tax-deferred. Money cannot be withdrawn from the account prior to retirement without a penalty. The maximum contribution can be up to 25% of the owners W-2 salary or up to 20% of the net adjusted business profits.
- Whole Life Insurance Policy – I touched on this in my last post. When you make premium payments on this policy it accrues a cash value. Overtime this cash value can become substantial when you include dividends, which are paid at the discretion of the company. At the time of retirement you will still have the same death benefit, but you can receive distributions to supplement your retirement. This won’t cover all your retirement expenses, but it can really help.
Retirement accounts are wonderful vehicles for investing and saving. The tax deferred benefit on many of the retirement accounts are great because when you retire you will probably be in a lower tax bracket then you are now. The younger you start saving the better off you will be. Honestly, who wants to work their entire life. Get out their and enjoy those new found hobbies.
“Retirement means no pressure, no stress, no heartache… unless you play golf.”