Is Inconvenience Holding You Back from Saving Money?
It is almost comical the trouble I am running into saving money lately. For instance, I was shopping at a favorite second-hand store when I found a great purse. I was so excited to find something that was the right size, reasonably priced and in fairly good shape that I quickly paid for it and moved [...]Setting Long-Term Financial Goals: Looking Back 5 Years
Some readers have noticed that I am no longer tracking the progress towards my long-term financial goal. That’s because I don’t have one! It used to be a million dollars by age 45, but I have dropped it since it doesn’t motivate me on a daily or even monthly basis.
I have come to realize that it is just stupid for me to plan out something 15 years ahead. Even looking back only five years, my life now is vastly different than I thought it would be. It’s an interesting exercise.
On February 27, 2004:
- I was 6 months out of graduate school, and in working at my first “real” job. Although I had held several jobs earlier including being a student researcher and teaching assistant, the corporate world was completely new to me. Even then, I knew I didn’t want to do this for four decades.
- My net worth was hovering around zero… I was just about done finally paying off my student loans from undergrad, but that was about as far as I was looking. Here’s an updated net worth history chart:
- I was single. Although I was engaged at the time, I had never lived with my fiancee and had no idea what it would be like to completely share a life together. It’s been quite an adventure.
- I didn’t have this blog. I don’t even know if I knew what a blog was. Who knew that it would provide a non-trivial chunk of our total income, and that I would continue to spend at least 20 hours a week of my time maintaining it, and often much more (although I’ve been working on better balance).
- I didn’t own a home. I was still living in the same cheap, run-down, graffiti-covered apartment that I lived in during college. I would end up renting five different apartments in the next 5 years, before finally buying a house.
I’m actually really happy with how things turned out, but looking ahead there is still so much more uncertainty. Kids? Jobs? Economy? So I’ll have to keep that in mind when crafting a measurable, specific, and inspiring long-term goal. Are you surprised at where you’re at now, compared to five years ago?
Save Money on Dogs: How to Get More Bark for Your Buck
By Dr. Nancy Kay These days people need to be creative thinkers in order to make their dollars stretch further. Not only does this apply to gasoline and groceries, but to pet health needs as well. If you find yourself in a financial pinch as many do these days, here are ten things you can [...]$8000 Housing Stimulus Tax Credit: Requirements and Common Questions
Still lots of questions about the $8,000 First-Time Home buyer Tax Credit. Here are some answers:
What is the definition of a first-time home buyer?
You are considered a first-time homebuyer if:
- You purchased your main home located in the United States after April 8, 2008, and before December 1, 2009.
- You (and your spouse if married) did not own any other main home during the 3-year period ending on the date of purchase.
Do I have to pay the homebuyer tax credit back? How much is the credit for? $7,500 or $8,000?
It depends. For homes purchased in 2008, the $7,500 credit (or 10% of purchase price, if less) operates much like an interest-free loan. You generally can repay it equal installments over a 15-year period unless you move out or sell the home earlier than that. The maximum credit is reduced to $3,750 for married individuals filing separately.
For homes purchased in 2009, you must repay the $8,000 credit (or 10% of purchase price, if less) only if the home ceases to be your main home within the 36-month period beginning on the purchase date. The maximum credit is reduced to $4,000 for married individuals filing separately.
What is the definition of main home? Does a condo count? How about an RV?
Your main home is the one you live in most of the time. It can be a house, houseboat, housetrailer, cooperative apartment, condominium, or other type of residence.
What if I don’t owe or pay any income taxes?
This is a refundable tax credit, which means that even if you don’t owe any taxes, you will receive the credit amount via check or other means. For example, if before this credit you had a tax liability of $5,000 and withheld $4,000, you would owe the IRS $1,000. If you qualify and claim a $8,000 tax credit, you would now receive $7,000.
What are the income restrictions?
The amount of the credit begins to gradually phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers. It is completely phased out when your AGI is $90,000, or $170,000 for joint filers.
Can I just buy a home from a relative and pocket the $8,000?
You don’t qualify for the tax credit if you bought the house from a “related person.” According to the IRS, a related person includes:
- Your spouse, ancestors (parents, grandparents, etc.), or lineal descendants (children, grandchildren, etc.).
- A corporation in which you directly or indirectly own more than 50% in value of the outstanding stock of the corporation.
- A partnership in which you directly or indirectly own more than 50% of the capital interest or profits interest.
How do they determine the purchase date as applied to the cutoff dates?
If you bought an existing home, the date of purchase is your closing date, not the day that you sign a purchase contract or enter escrow. If you constructed a new home, you are treated as having purchased it on the date you first occupied it. (Seems like some wiggle-room here.)
What IRS Form Do I Have To Fill Out? Can I File For 2008 or 2009 Tax Years?
That would be the new revised version of IRS Form 5405 (where most of this information is from), which you fill out and attach to Form 1040. Any updated tax preparation software should be able to handle this. If you already bought your house in 2009, you can file either on your 2008 or 2009 tax returns. (Why not get it now?)
What if two unmarried people buy a house together?
If two or more unmarried individuals buy a main home, they can allocate the credit among the individual owners using any “reasonable” method. The total amount allocated cannot exceed the smaller of $7,500 ($8,000 if you purchased your home in 2009) or 10% of the purchase price. A “reasonable” method is any method that does not allocate all or a part of the credit to a co-owner who is not eligible to claim that part of the credit.
I am not a U.S. citizen. Can I still claim the tax credit?
If you are a resident alien according to IRS Pub 519 and satisfy all the other requirements, then yes you can claim the credit. Nonresident aliens are not eligible.
New York wage garnishment laws and garnishment of bank account
How much house can I afford? The right question should be -
Book Review: Pilgrimage to Warren Buffett’s Omaha (Berkshire Hathaway Annual Meeting)
There are hundreds of books about how to invest like Warren Buffett. For whatever reason, I haven’t read any of them (yet). For one, if really wanted to invest like him, why not just invest with him and buy a share of Berkshire Hathaway? A Class B share recently traded at around $2,300, more than 50% off its high of $5,000. And if I bought a share, I could attend those annual shareholder meetings in Omaha, Nebraska* that I’ve heard so much about. (I have read some of the shareholder letters.) Buffett himself calls it the “Woodstock of Capitalism”.
What’s a Berkshire Hathaway Annual Meeting Like?
That’s the question behind the book Pilgrimage to Warren Buffett’s Omaha by hedge fund manager Jeff Matthews. He first went to the 2007 annual meeting and wrote about it on his blog. I guess people liked it, and so he went back in 2008 and weaved it all together into this book.
A very distinguishing trait of the annual meeting is that Chairman Warren Buffett and Vice-Chairman Charlie Munger not only want their shareholders to attend, but willingly sit down for a six-hour long Q&A session where you can ask any question, and they will answer it personally. Many of the famous quotes you’ve read elsewhere were first spoken in this format, and the best part of this book is probably reading about their thoughtful responses to all these questions.
Another feature I didn’t know about is that the meeting is also highly profitable for Berkshire. Shareholders are given special tours and discounts to subsidiaries like Nebraska Furniture Mart, Borsheim’s Jewelers, and so on. Estimates say that over $100 million is spent there.
What Else Is Inside The Book
A lot of the book is in informal “blog” format, with Matthews recounting his first-hand experiences down to grabbing lunch or renting a car. However, sprinkled throughout the book are also facts and tidbits about the company and Buffett, most of which I didn’t know very well but are things that I’d expect a die-hard fan to know already. It worked well for me and provided some helpful background.
For example, I learned that the businesses with Berkshire Hathaway tend to operate independently and without much oversight from Warren Buffett or Charlie Munger. And it’s a wide variety of stores - from GEICO insurance to See’s Candies to NetJets to Nebraska Furniture Mart. Berkshire also gets the chance to buy many profitable, well-run, private companies at a discount from the individuals and families that created them. Why? Because they are attached to these businesses, and want them to remain under a certain quality of stewardship.
But it’s not a total slurp-fest. Criticisms are brought up, like how Buffett has called derivatives “financial weapons of mass destruction”, but also bought millions worth anyway. Or when he talked up the values of executives for subsidiary General Re who later got convicted of securities fraud.
Summary
This book is well-written, easy to read, and a perfect companion for a cross-country airplane trip or nightstand. However, I don’t think I really learned much of anything practical from a financial perspective. I’d treat it mostly as entertainment.
To be clear, it is not a book on value investing. For that, stick to the classic The Intelligent Investor by Benjamin Graham. Nor is it a book about the personal life of Warren Buffett. For that, there is now The Snowball.
Actually, the book I most want to read next is Poor Charlie’s Almanack, which contains many quotes from Charlie Munger, who seems a bit abrasive but I have come to respect him as an original thinker. The only problem is that the book doesn’t seem to be in print anymore and used copies are fifty bucks? Time to hit up the library.
I’m still wavering as to whether I want to attend this meeting. Would it be worth the hotel and airfare? Anyone planning on being in Omaha on May 2, 2009? 
* Actually, you don’t even need to be a shareholder to attend any more. Buffett got annoyed that people were scalping tickets on eBay for $100+, so every year he floods eBay with tickets for only $2.50.
Lifestyle Diseases and Personal Finance
If you watch the news or read many magazines or newspapers, you’ve probably heard about “lifestyle diseases.” These are diseases and ailments that we get because our lifestyle and/or environment are unhealthy. Some examples: Obesity Alcoholism Diseases associated with smoking such as lung cancer, asthma or emphysema Drug abuse Depression/anxiety Some forms of cancer related [...]A Life Without Debt: Saving For The Fun Of It
It sounds like a no-brainer, but a big part of what keeps us out of debt is simply not spending too much money. Whether it’s on splurge items or our regular budget items like utilities, clothing, etc. we are always careful never to spend more than we have. However, just like everyone else, we tend [...]More Fun With Charts: Credit Crisis Edition
Here a new time-waster: From the creators of LOLCats, GraphJam allows users to create charts that are funny and vote up the best ones. Two appropriate ones:
I guess this explanation is patronizing then? And after yesterday…
(Yes, the x- and y- axes should be reversed…)
I’m sure one of you all could think of something funnier…
-
-
About
We aim to bring great info on saving money, budgeting, and managing your personal finances.
-
Blogroll
- Bad Credit Advisor
- Consumerist
- Debt Advice
- Debt Diet
- My Money Blog - Personal Finance and Investing Blog
- PFBlog.com: The Unique Personal Finance Blog Since 2003 - Daily personal finance observation, musing and decisions in a journey toward financial independence by 36 with at least a million dollars.
- Saving Without A Budget - Saving Lots of Money Is Easy. I’ll Show You How.
- SavingAdvice.com Blog - Bridging the gap between saving money and investing
- Your Money
Get an Equifax 3-in-1 Credit Report Now!
Get up to $1500 NOW!