VIDEO: What’s on Your Bucket List? - Young Money

VIDEO: What’s on Your Bucket List? - Young Money

Hilton Chair Lecture

How Do You Teach Economy Now?

Do you know your money basics?

Do you know your money basics? Take this 10-question quiz to test your basic knowledge about personal finance. Find out how you scored immediately after you submit your answers; plus, you can compare your score to the overall average and get tips and explanations about your answers. BY JULIA LAWLOR

1. You're a homeowner who's charged up to the limit on three credit cards. You see no end in sight to paying off your debt, especially since your credit cards carry double-digit interest rates. What should you do?
a) Apply for another credit card with a low introductory rate, transfer your debts to that card and make a budget that allows you to start paying off your total debt.
b) Consolidate your debt by taking out a home-equity loan.
c) Stop paying your bills and declare bankruptcy before you throw any more money down the drain.

2. What is the maximum percentage of your take-home pay that should be taken up by regular monthly expenses, such as food, utilities, car payments and rent or mortgage?
a) 80%
b) 65%
c) 36%

3. What's the best way to stem big losses in your investments when the stock market tumbles?
a) Don't buy stocks in the first place. Stick with money-market funds, passbook savings accounts or the mattress.
b) Be the first to sell everything at the slightest hint of a downturn in the market.
c) Diversify your portfolio.

4. What is a flexible spending account?
a) A Bloomingdale's credit card with a credit limit of $100,000.
b) A savings account that doubles as a checking account.
c) An employer benefit that allows one to pay for such expenses as child care and medical bills with pre-tax dollars.

5. What is considered a deductible expense by the IRS?
a) Credit-card interest payments.
b) Private-school tuition.
c) Telephone and taxi expenses incurred while performing charitable work.

6. How often should you update your will?
a) Whenever your situation changes -- such as a new job, new baby, new house, etc.
b) When you remarry.
c) Every three years.

7. What's the best way to save for your child's college education?
a) Invest in one of the new "education IRAs."
b) Invest in high-risk, aggressive-growth stocks and don't withdraw the money until your child is ready to start college.
c) Invest each month in a stock mutual fund with moderate risk. Take advantage of tax-free investments such as the new education IRA. Then withdraw the money four years before your child enters college.

8. What is the biggest mistake people make when it comes to 401(k)s offered by their employers?
a) Failing to invest any money in their 401(k).
b) Opting to hold all of their 401(k) investments in company stock.
c) Being too conservative an investor in their 401(k).

9. Which investment has proved to be the best weapon against inflation over time?
a) Stocks
b) Bonds
c) Gold
10. At what age should a child start getting an allowance?
a) 8
b) 3
c) 16

Source: http://www.usaweekend.com/wealth/money_basics_quiz.html

$omething to Ponder

'There are only two ways to live your life—one is as if everything is a miracle, the other is as though nothing is a miracle'. --Albert Einstein

'If your plan is for a year, plant rice. If your plan is for a decade, plant trees. If your plan is for a lifetime, educate children'. --Confucius

'October. This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February'. --Mark Twain

Change Your Habits, Change Your Life

By Candace Bahr, CEA, CDFA and Ginita Wall, CPA, CFP

Habits start out like cobwebs but end up as strong as steel cables. In his classic book, The 7 Habits of Highly Effective People, Stephen Covey describes the good habits that keep us on track in our life endeavors. In working with many successful investors, we’ve seen that developing good habits is a must. Not all habits are good, however, and bad habits can sabotage your financial future. If you change these habits, you can change your life.
Habit #1 – Dependence on Others
We all entertain the fantasy of financial rescue at some point in our lives, but we can’t let those fantasies become a barrier to real accomplishment.
Work to become money-smart by learning about finances and taking a realistic look at your money situation. Map your financial future and set goals for yourself. If you have a life partner, become full partners and share the fulfillment of learning to reach your goals together.
Habit #2 – Putting Things Off
Some people feel so overwhelmed by their finances that they become immobilized, but taking action is vital to your future financial health.
You don’t have to make major changes in your life to get on track. In reality, major changes are the result of a series of small steps. Take one small step each day, and your confidence in your ability to handle your finances will grow.
Habit #3 – Allowing Your Fears to Take Over
Fear is part of our instinct for survival, but some people are so afraid of making investment mistakes, they run in the opposite direction when the stock market makes one of its periodic dips.
The greatest risk for most investors is not meeting their goals. The best way to overcome that risk is to consider the time horizon for investing. If you need money for a new home next year, the stock market is a risky place to invest. But if you need money in twenty years for retirement, stocks are the most appropriate. Time will overcome the ups and downs of the market, and the rewards will outweigh the risks.
Habit #4 – Having No Goals or Direction
You won’t get anywhere without careful planning. Without a plan, how can you expect to make dreams come true?Make a list of your important goals. The foundation of your life plan will probably be your family, your health, your spiritual life, and your security. Use as many concrete and specific terms as you can to describe them and when you intend to reach them.
Habit #5 – Not Investing in Your Career
Putting your career on hold indefinitely to raise a family is a worthy pursuit, but it can come back to haunt you. An interruption in your work history is likely to reduce your earning potential and cost you seniority. It’s always a good idea to keep up your career skills. Keep up your professional certifications and stay in contact with previous bosses and colleagues. Taking classes will also help you stay in touch and keep current.
Habit #6 –Not Being Ready When Your Marriage Ends
All marriages end, either in death or divorce. Most women will be on their own financially for one third of their adult lives, and often the quality of their lives will depend on their financial skills. Because you never know what will happen in life, everyone should schedule a contingency day, when you and your partner discuss your finances frankly and openly. The most caring activity in which you and your spouse can engage is to share your financial condition and your knowledge with each other.
Habit #7 – Not Getting Good Professional Advice
With so much free information out there, you may be reluctant to pay for financial advice or money management. It’s not the lack of information but the abundance of it that makes it easy to get confused and fail to take any action. Most people simply do not have the expertise, time and knowledge required to manage a complex investment portfolio. Schedule a time to sit down with a financial professional to talk about your situation. Just as you keep your car tuned to prevent a blow up later, so using an expert to do a periodic financial tune-up makes sense for most people.

The Millionaire Life: Beyond Those Next Door

Why did I write The Millionaire Mind? Because many of those who read The Millionaire Next Door felt that the "frugal" millionaires profiled there were too monk-like! I refer to the millionaires in The Millionaire Mind as 27-percenters, i.e. only 27 percent of those people who live in homes valued at $1 million or more are millionaires. Unlike the "millionaire next door," they live in expensive homes yet they were able to accumulate high levels of wealth at the same time. The 733 millionaire respondents that I profiled had overall net worth, income, and house value characteristics that were nearly three times those profiled in The Millionaire Next Door. Plus they lived in affluent communities such as New Canaan, Ct; Kenilworth, IL; Atlanta (Buckhead), GA; Summit, NJ; Palo Alto, CA and the like.
You may not be able to match the wealth characteristics of the 27-percenters. Still you can emulate many of their lifestyle activities. Yes, even in this down economy, you may wish to take your cues from these millionaires. I asked them the lifestyle activities that they participated in during the past 30 days.
What activity ranks first among the 27-percenters? SOCIALIZING WITH YOUR CHILDREN AND/OR GRANDCHILDREN (93%). Second on the activity scale is: ENTERTAINING CLOSE FRIENDS (88%). And millionaires don't spend much to entertain close friends either. How much does it cost to play bridge or have a few friends over for dinner? Not a great deal - it's the interaction with people you care about that's most important.
The 27-percenter millionaires are extraordinarily successful at producing high incomes and accumulating wealth. Activities that directly relate to these goals, like planning investments (86%) and consulting with advisers (59%), normally make up a large part of their activity lists. In many other aspects of their lifestyle activities, millionaires are anything but extraordinary. They have a few habits that set them apart from most of us. The proof is in the data. The typical millionaire is, in three words, A CHEAP DATE.
Would you expect that attending religious services is too common an activity for self-made millionaires? Surely these people only believe in themselves and their ability to generate high levels of income and wealth. Wrong (52% attended). Maybe you expect that these millionaires would be more likely found shopping at Brooks Brothers (19%) than eating at McDonald's (46%)? Try again.
Too many young people feel that real fun has a dollar cost built into the equation. Fun has become a marketing tool for many consumer goods and services. Do you really need to buy a $50,000 boat so you can hang out with your best friend? Is fun only experienced by spending a small fortune at Disney World? It is important for America's youth to discover that millionaires, even most decamillionaires, don't depend on consumer goods to enjoy life. Their pleasures and self-satisfaction have more to do with their families, friends, religion, financial independence, physical fitness and perhaps a bit of golf (45%)! In fact, there is a strong positive correlation between the number of people-related lifestyle activities one engages in and the level of one's net worth.
It's just as a multimillionaire once told me. He coached his daughter's softball team for several years, and although it was not premeditated, he met many successful parents who were millionaire business owners (61% at least watch their children/grandchildren play sports).
What if you are just not interested in the lifestyle activities discussed thus far? Then try gardening; 67% of these 27-percenters do so. Or photography (67%). But please keep away from habitually playing the lottery. Eighty-six percent of the decamillionaires within this population never play the lottery.

Source: Thomas J. Stanley (http://www.thomasjstanley.com)