James C. Molet's Blog, page 79

Introduction to Asset Allocation

The concept of asset allocation was one of the first concepts I studied on my road to fiscal fitness.  Asset allocation is the practice of dividing an investment portfolio among different asset categories.  The most common categories are cash, bonds, and stocks.  Cash and cash equivalents (e.g. savings deposits, certificates of deposit [CD], treasury bills, money market funds, and money market accounts) are the safest investments as the federal government guarantees many of the investments in this category.  However, they generally offer the lowest return of the three major asset Read the Full Story

A Juxtaposition in Choosing a Home

Documentary: The Queen of Versailles (2012). This film offers a peek into to the lives of a billionaire family and their financial challenges in the wake of the economic crisis of 2008. With epic proportions of a Shakespearean tragedy, the film follows two unique characters, whose rags-to-riches success stories reveal the innate virtues and flaws of the American Dream. The film begins with the family triumphantly constructing the largest privately-owned house in the United States, a 90,000 sq. ft. palace, a feat made possible by the real estate bubble and Read the Full Story

Living Frugally: Business Ownership

It’s been my experience that most folks don’t associate business ownership with being frugal. They automatically assume owning a business involves major expenses. While that can be true, that is not always the case. There are certain aspects to business ownership they’re unaware of or misunderstand. Tax Breaks: The idea of giving Uncle Sam one cent more than necessary is simply annoying. Fortunately however, tax laws are written in a way that gives many entrepreneurs the ability to reduce the taxes owed. I remember spending money on things like dry Read the Full Story

An Economy of the Future?

Documentary: Fixing the Future (2012). In this documentary, David Brancaccio asks the question, “Do people exist to serve the economy, or should the economy exist to serve the people?” Mr. Brancaccio visits people and organizations across the country that are attempting to reinvent the American economy at the grass root level. These pioneers look to create jobs and build prosperity in unique ways such as community banking, worker cooperatives, local business alliances, time banking/hour exchange, local currencies, and numerous other innovative strategies. Available for streaming at Hulu, Hulu Plus, and Read the Full Story

Living Frugally: Loose Change, Contributions, and Scraping

Living frugally means more than simply looking for ways to spend less. According to dictionary.reference.com… fru • gal [froo-guhl] economical in use or expenditure; prudently saving or sparing; not wasteful. Economical in use or expenditure might refer to spending less. However, how might a savvy individual save prudently and not be wasteful? Here are a few practices we have adopted in the SavvyJames household: About three years ago we placed a wicker basket – which later became known as ‘the money basket’ – in our bedroom. We determined that at Read the Full Story

A Health Care Crisis

Documentary: Escape Fire: The Fight to Rescue American Healthcare (2013). I recently watched this documentary and it captured my attention because of the grotesque amount of money we spend on healthcare each year in the United States ($2,700,000,000,000), the ongoing visceral debate about the Affordable Care Act (ACA), and my own belief in the connection between physical and fiscal fitness – and how it impacts retirement planning – covered in a recent SavvyDiscussion. The following synopsis is from the documentary’s website: American healthcare costs are rising so rapidly that they Read the Full Story

CD Laddering

During the course of previous discussions, we have identified three general stages in an individual’s investment lifecycle: building a fiscal foundation (conducted during your 20s and 30s), accumulating wealth (occurring between the early 40s and mid-50s), and pre-retirement, the five-year period prior to your desired retirement age. During the pre-retirement stage, debt is eliminated and a plan – considering the withdrawal rate (e.g. the 4% rule) and the order of withdrawal from the various retirement accounts – to draw down the retirement nest-egg is developed. With a sufficient nest-egg in Read the Full Story

Living Frugally: Mute the Commercials

I distinctly remember Super Bowl Sunday, 2013. It was not because of the game, the highlights, the commercials, or the advertised specials. I remember it well because all the commercials were muted! I know that many of you are pretty shocked right now. You see, a couple from church opened their home to anyone who wanted to watch the game and just hang out. In order to make it more interesting, the couple created an environment where – during commercials – the TV was muted and someone would talk about Read the Full Story

A Wealth Divide

Documentary: Let’s Make Money (2008): This film by Austrian Erwin Wagenhofer – which casts a critical eye on capitalism – starts by tracking the hypothetical savings of a typical depositor as they move around the global system, often causing exploitation as various financial agents try to produce high returns. An interesting approach to story telling as the film eschews a narrator.  Instead, the presentation is made through the cinematography and commentary by investment managers, politicians, economists, poor people, homeless people, and workers.  Over the course of 1 hour, 47 minutes, the Read the Full Story

Manage Your Credit History

A good credit report, generally considered to be a score above 700, can be a valuable asset. Most significantly, with a better credit score you can get superior interest rates on house or car loans.  Unfortunately, it is estimated that about 60% of information found on credit reports is either incorrect, outdated, or both. Considering that even the most seemingly insignificant errors can result in you paying a higher interest rate or cause you to be denied a loan completely, it is in your best interest to ensure that you Read the Full Story