OK, another question from me (LOL). While I have been reading finance blogs the past week, I came across a comment to someone's blog - I don't remember where - and the comment was short and sweet. It just said he had read that when it came to social security benefits, you would come out ahead by taking your benefits as soon as possible, and not waiting to apply for later, and then getting larger benefits.

This got me thinking. I always assumed it would be better to wait and then get larger payments. But as I have learned more about finance the past few months, I realized that getting money early could make a huge difference. (ie. read compound interest!)

Warning - math based analysis below...

So how could I prove this one way or another? I came up with a simplistic spreadsheet to work out the numbers.

Without getting into all of it, here is what I did. I took the payment numbers for retirement at 62, 65, and 70 from my most recent Social Security statement. I assumed simple interest compounded monthly.

OK, but how do I figure out the future worth of money? I decided to assume I had more money than needed, and I would invest all the social security money, just like I do a 401(k) now. And then I assumed a standard rate of return for all years (ok, very simplistic, but this is to get a ball park idea of the comparitive value of the payments). Using this idea, I then put together a spreadsheet that I could change the rate of return, and see at what point would be the break even point, that is ... I would get more from the later larger payments, instead of getting more money earlier.

And what I found surprised me. For the 62 vs. 70 payments, if I used a 4% RoR, the break even point would be 85 years old. In my mind, I figured 85 should be about the break even point. But 4% is supposed to be a very low rate of return! If I upped it to 6% (still on the low side), the break even age was 92! And if I used 8% (what most retirement calculators use as a default RoR)? There was no break even point, the numbers just kept diverging. And when I worked the numbers for age 62 vs. age 65 payments, the break even points were 83, 90, and again never breaking even. I always thought the rational break even age would be around 88 when taking an 8% RoR into account. Wow, was I wrong!

So where did this leave me? Well, its most likely I will want to spend at least some of the money I get when I retire. Also, this analysis doesn't take into account other factors, such as losing benefits if I work from 62 til 65 yeras of age, taxes, lost wages of not working those years, and other things I can't think of right now. Still... I guess this shows if I am laid off or lose my job in that range of age, I should apply for those benefits ASAP. I guess the Social Security people want me to apply for that money as fast as I can.

You can tell the refinance market for mortgages has gotten soft, now the mortgage companies are calling you out of the blue. It used to be you would request to refinance a loan, and they were too busy for you.

This came to mind last week when I got a call on my cell phone. I don't give the number out to anyone, so I thought this might be important. I didn't know the number, but I answered anyway. (Highly one-way conversation follows.)

...

A hello, and she started to ask how I was and if I was enjoying the weather. That type of start to a phone call is never a good sign. Did I apply online to refinance my mortgage? Why yes I did, but that was over a year ago when rates were much, much better. You can refinance my loan? Well thats swell, but with rates having gone up, I don't think you can beat the rate I have now.

OK, I pointed out why this wouldn't work up front, now time for me to get the sales pitch. Am I looking to take money out when I refinance? No, not really, I just was looking for a lower rate. No, I wasn't looking to lower my monthly payment either, I can handle the payment I have. (she went back and forth between these two options for a few minutes until she realized I wasn't kidding – or just gave up.) How long have I had the loan? Eight years. How much is left? Perhaps five more. You can refinance my remaining loan balance for 15 years at the rate I have now? Why would I want that? It will lower my monthly payment? Yes, I understand that, but if I do that I will be spending more money over a longer time (not to mention I will probably have to pay a fee to refinance as well). I only wanted to spend less money, not more. Really, if you can't give me a better rate (at least 1%) I'm not interested.

...

Trust me, this is much shorter than the real conversation went. She kept telling me it would save me money and I would pay less. I guess that might be so if I could take the difference in payments and invest them at a higher rate. But do you know of anything that makes, oh say, a guaranteed 10%? (My loan isn't 9%, but if I would do this, I want to make it worth my while). Nope, I don't either. Does having someone tell you that you can pay less now, but pay more over the long haul entice you to refinance?

Don't take this as frustration, I kinda enjoyed the conversation and laughed about it later with a friend.

As I have read other personal finance blogs, there is often a discussion about what the "experts" feel a person needs to save to have a secure retirement. I'm not going to link to the specific articles referenced, it's easy enough to find some out there. (Actually I will reference one that is very interesting: http://www.pbs.org/wgbh/pages/frontline/retirement/view/) Anyway, as I had some time I was trying to see how I measured up against these metrics. And what I determined is that, for me, this isn't as easy to determine as you might think.

The reason for this is multi-faceted. First let me say I usually read that experts refer to what you need for retirement in one of two ways. Either you need to save a certain amount each year (usually they say in the 15-18% range) for 20-30 years, or you need a certain amount when you retire (I've read everything from $500K to $2Million - I guess it depends on when you retire).

Since my retirement time frame is about 25 years out, I prefer to look at the amount I save annually and see how I am doing compared to the benchmark. In its simplest form, I am saving 10% (my 10% + 0% match) into my 457 plan (a gov't 401(k) plan). So at first glance it looks like I am not saving enough.

But I have a pension at my current employer (I still have two years before I vest in the plan, but I think its worth considering the numbers). I have to contribute 5% to the plan (this is refundable to me should I leave this job), and my employer contributes a varying amount to fully fund it. Currently it is contributing about 7% (next year should be upped to about 9%). Now I know this money isn't mine per-se but will be used to make a guaranteed payout. Still..., to figure out what I am saving towards retirement, I think these are good numbers to use. OK, that brings my total up to 22% (all of it with pre-tax dollars).

"But wait, there's more..."

However, there is also the fact I am paying a mortgage. Now I am not going to get into what the value of the house has done (it's gone up, up, up) or will do (prolly flat line), thats not important for this discussion. What is important though is that in each payment a certain amount goes to pay down the principle borrowed. Since the more that goes toward the principle, the more I would get when I sell the house, I think I should be able to consider this as money towards retirement. (To see why, consider that if I was renting, I would not be getting anything for the money paid when I stop renting, so it does help my net worth, just like any retirement account does.) Now each month I pay a varying amount towards principle, but it is currently paying down the principle at about 17% of my gross pay (that is, I'm paying with post-tax dollars). If I add this amount to the previous amount, that comes to 39% saving. (I could add the tax savings of the interest paid, but that probably is only a net of 1%, so I will ignore this factor)

"And if you call today..."

I am curently paying my wife monthly as part of a divorce settlement (yucky story). This will be completely paid off as of October of this year (yahoo!). Anyway, this amount is also post-tax money, at about 18%. As this money is in effect going towards her part of the estate (that is, increasing my worth by buying her out), this money should be considered as contributions to savings as well. Also, once the payments are done, this money *will* go towards higher savings in other areas. Add this to the prior amounts, and I come up with 57%.

"And if you call in the next fifteen minutes..."

One last thing. I have started trying these 0% Bank Transfers using credit card offers. Currently the money from these is earning me another 1% (that is: an amount equivalent to 1% of my monthly salary), and have another one in the pipeline that will give me another 1% if it goes through. Adding that higher amount in, I now come up with 59%. And this isn't even considering Social Security (trying to add that in will only muddy an already cloudy calculation!).

So, what am I saving towards retirement? 10%, 15%, 22%, 39%, 57%, 58%, 59%, something else??? Personally I think it should be 59%, as all the amounts really do contribute to net worth.

Egads, looking at that number is really astonishing. If I kept up this rate, and had the mortgage and divorce done with, I would be truly putting over half my pay into savings. Somehow I don't think I can keep this up forever (other than the BTs, I have been doing this saving rate for about the past year), but hopefully if I can do it for a few years, I will have set myself up so that even if my savings rate drops significantly, there should be enough to grow to a decent nest egg waiting for me when I retire.

As I was balancing my checkbook this week I noticed a major change to how the check register looked. That is, I now pay so much online, that I am writing very few checks each month. This transformation has taken place over the past three months, and now I can't imagine having to back and paying everything through the mail. Its so easy. Anyway, as I considered this, I figured this had to be saving me money. Here is a general overview of my online transactions.

Monthly:
Utilities - electric, gasCredit cards (Currently
four)MortgagePhone bill (land & cell)

Other periodic bills:
Water Bill (quarterly)House Insurance
(annualy)Car Insurance (semi-annually)Buy more DRIP
stock (about once a month)PayPal (hopefully not too
often!)Rebates (ok not a bill, but I file for one online about every month now)

Other things:
Direct deposit of payHalf.com sales are deposited
directlySet up Certificates of Deposit via direct money
transfersTax refunds are deposited directly

Looks like I am averaging about 12 stamps saved each month. That makes $4.50 saved right there. And no extra effort is involved, its actually less. Gotta like that! BTW, I didn't forget cable, as I don't have any. And by paying online I don't have to worry that my CC payments are on time, so no unexpected fees. So overall a definite plus to my finances.

As I sit here recovering form cutting branches out of my oak tree (oak is really hard wood!), I took a quick look at my retirement fund balances. A few weeks ago I said the amounts had crossed the 100K amount. Well if you do any following of the market, you can guess what happened next. As they say in the war movies on a submarine, "dive, dive!"

When I looked last on Friday, the total had went down to around 97K, quite a precipitous drop. For some I know that is a terrible time to follow stocks, but I know I have over 20 years 'til I retire (unless I get lucky somewhere!), so this drop is really insignificant. In fact, as my latest retirement contributions were made at the close of Friday, that means I got more for my money. Perhaps next time it gets back up to $100K, I won't say anything - I think I jinxed it when I talked about it last time.

I had also sent some money in for a DRIP I have alomst 2 weeks ago, but the purchases are done only once every two weeks. Well the purchase was to be done this past Friday, so hopefully that worked to my favor as well.

Not much of a moral to the above, other than perhaps to say if you want guaranteed returns, work on being frugal. When you save money, it always goes right into your pocket.

Well some time back I stated I was going to try to do a credit card transfer at 0% and invest the money. I was sort of incredulous that a CC company would accept such a large overpayment, and then refund the overage. I called ahead of time, and they insisted they would. (Well someone on the phone *said* they would). Anyway, it all worked so easy I was amazed.

I now have the money in a bank making good CD rates for nine months. I make enough money to pay the monthly payments without a problem (they're 2%). And already I have signed up for a card where they will give you a $100 bonus for signing up, and it came with a 0% transfer check. I don't even have to move it through another credit card first! If I do this one (and I think I will), I will not put most of it in a CD, but leave it in high interest online bank accounts instead. While cutting down the earned money slightly, it will increase my liquidity immensly.

For anyone reading this and considering doing it yourself, make sure you understand all the ramifications (credit scores, investments should be super safe, liquidity issues, and more). And don't use the money for something else and then not have it to pay it back!!!! This isn't for everyone, but if you control your expenses correctly, it can work for you. Oh, one more thing - try to make sure and pay your monthly CC statements online. That way you are sure you have made every payment on time, otherwise you can lose your 0% rate very easily!

...is to teach it. This thought came to mind today. In the past I have taught courses on statistics, computer seminars, and other sundry classes. Its been a while since I have done it. I am not an extrovert, and I like sitting at a desk working on solving a software problem, which thankfully I get paid ok to do.

That said, the past few months I have been learning all types of things about finance. I was not totally clueless before, but this year I swore I would learn more about my money and do better than just being frugal. I would make sure I would make my money work hard for me.

As I have done this I have been giving impromptu lessons to a co-worker. I wasn't sure he was interested, but he keeps coming back for more, and today he said he was learning more in the past months then he knew for years (about money anyway). And I realized I was doing with him what I had done for years. I was teaching, and in doing so what I had learned was becoming solidly imprinted in my mind.

Its also nice to help someone while I am helping myself.

Just a quick note here today for me. The items I add up on my spreadsheet as retirement money (includes retirement funds, pension contributions I can recover, bonds, CDs, and stocks(DRiPs), but not liquid savings and checking) passed $100K today. I know its an arbitrary number, but its nice to see my efforts starting to pay off. Especially after watching my retirement accounts dropping like a rock in 2002-03. And being job-less for a year thereafter.

I actually went out and spent some money today, but never fear, it was with coupons and on many of the items there are rebates. All the stuff had a regular price of about $160, and if they give me rebates like they promise, my cost will end up being $15. Now that I can handle.

Previously I wrote that I was trying to get money at 0% from a credit card offer and use it to invest (ok, put into a high interest CD) and make money. After reading how others do it, I thought I should experiement with this as well. Today the refund check arrived from the other CC company I had the money transferred to. It wasn't the amount initially transfered, but less about $150. I suspect that was my outstanding balance on the credit card. As far as I am concerned, that's a wash, so I really don't care about it, though I will check my account online to make sure.

Now I need to do some research on local banks and their CD rates so I am ready to move on Saturday. I know there are a couple banks giving about 5% nearby.

I'll be happier when I am not carrying this check around anymore. Then I can just watch it earn interest.

Well I was away from the blog for a bit, so what has been happening?? Lets see....


I went yard sale-ing two weeks ago. I found a very good replacement vacumn for $18 and it works much much better than the junker I have at home. It is bagless which I like. Plus I got a Samsonite carry-on roller luggage piece - like new - for $5. Tomorrow is another day of yard sales - great!
I got my new credit card, and according to the web site after confirming the card, I'm supposed to be getting my 0% $0 bank transfer to do some rate arbitrage. Hopefully this money will appear soon.
Went with my train hobby club for 3 days to do a major display, and boy, was I tired when it was all over. Glad I did it, and will be happy not to do that for some time. LOL
My clothing expenses so far this year - $3.00. Two shirts for a $1 at a thrift store closeout, and another shirt at a yard sale. I don't know how long I can keep this up, but when I open my closet I still see shirts and pants like new just waiting. Its nice to see this excess clothing not go to waste. (and putting the saved money to use for me)
I finally cut down how much I am paying on my mortgage, but I hated to do it. There is nothing nicer than seeing that number drop faster, but I realized cutting my extra payment down could help me buy other investments and help me more in the long run. Intellectually I know it, but emotionally I hate it.
I have my one-third of a year progress report on my net worth (should it be called "one-third annual report"?). My home equity is up almost $3K. DRIPs are up about $2K, and my retirement numbers are up almost $10K. Alot of the increases are due to investing savings, but the market has done well this year. Other savings (MM, CDs, checking) are down slightly, but not a major amount. Hmmm, if I can keep this up I will get an increase of $45K for the year. I could live with that.

Percentage-wise the increase for the three months is less than 4% which looks bad, but that is due to my net worth being heavily weighted by my home, and I haven't tried to re-estimate its value. I am using $400K for its value, though I know identical homes have sold for over $450K near by in the past year. Removing my home from the calculations, the net worth increased about 14% over four months. Now thats a pace I could enjoy seeing for some time.

Everybody needs a hobby, right? Even me, the super frugal guy has hobbies. Of course I try to keep it as inexpensive as possible.

This is just some ideas for your hobbies, as always YMMV. For those curious, I am currently into toy trains.


Find ways to make the items you collect, instead of just going out and buying at current retail. As for me, I buy old toy trains that need love and repair on ebay, especially pre-war metal trains. I get the pride of building my train cars, and having a little more invested emotionally into those train cars.
Find a local organization to join. For me, I joined a local modular club. We set up at many non-profit events during the year. Now I get to go to all of these things, enjoy myself, and I can enter these events for free! Of course there is work involved, but so what, it beats paying for a ticket at the door.
Be sensible. I mean, really, who needs 100s of {fill in the blank}. Even for me, while I like trains, I try to keep the collection sane. And in doing so, I keep my expenses down.
Find something similar to what you like. I used to be into baseball cards big time. Thankfully I didn't drop too much money into them. Anyway, I found a lot of fun with sports pocket schedules. They're similar to cards, and the cost is minor compared to cards. For other hobbies, maybe there is an inexpensive substitute?


OK, those were just a few ideas, I'm sure there are more out there.

And now a lil bit of good news: I was reading various financial forums, and someone wrote about a good tax deduction I was probably able to take in 2003 and didn't. I need to pull out my paperwork and see if I would qualify. It looks like if I did I should be able to get a few hundred back. Well that would certainly be nice for a change!

I'm sure most everyone here has read about the power of compounding, but sometimes when you see it in action, it really is surprising.

I write this after reviewing my first quarter numbers for my four retirement funds (ok, I know thats probably too many, but it was six different a year ago, so I look at this as progress!). Two of them are old accounts that I am letting stay where they are. In comparing those two I have one account that has been going gangbusters with a return for the quarter of about 10%. The other has been ok but nothing great, returning maybe 4-5%. But the great account was at about $10k at the start of the year, whereas the so-so account started the year at $25k. Since these are old retirement accounts, there are no new investments.

I compared the difference between the two accounts at the beginning of the year, and at the end of the quarter and found the dollar difference between the two barely budged, maybe a $50 change.

So what is this showing? Well with the head start of $15k, even with superior performances from the smaller account, it most likely will never catch up to the bigger account. This just falls right in line with what all the beginner's investing articles say, that investing early is very important, and compounding is certainly your friend.

And now... I'll return to cursing at my computers, as I am down to using backup number two (a $15 machine I got for the heck of it last year) to get onto the internet.

This isn't a story about controling your spending (I feel I already do that), but instead I was like most of the masses and didn't really keep that close track of how each asset I had was doing.

This past week I have been setting up online connections to each of my assets and trying to put together an overall worksheet with my net worth. (As an aside, I did have this already set up for my retirement funds and mortgage payments, everything else was tracked based on monthly statements.) Its amazing how some sites are so easy to work with, and others were made by some tech geek without a clue - BTW I am a tech geek, but with a clue!
Anyway, ignoring my home, car, and physical furnishings, my net worth looks to be over $111K at the end of March. Based on my memory (my official spreadsheet is encrypted on my computer at work), I started the year at about $101K, so thats a $10K increase for 3 months. Of that about $3,000 was due to investments in my retirement acct. Still, not bad.

Other news & notes:
I opened my fourth DRIP this past week. I got the opening statement for my Heinz account. It was only the minimum you could start with, but I wanted to get a foot in the door. With it, my total DRIPs come up to almost $8,000.After reading online about investing, and so many philosophies about it, I went today and bout my first investing book. It is Rule #1 by Phil Town. I make no claims about how good it is, but everything I read about it came across as a practical book for investors. Perhaps after reading it I can give my opinion of it.I am still touchy-feely when it comes to paying bills, but I am trying to learn. This week I set up my second bill (natural gas) to be paid online, saving me postage if nothing else. Today I got my water bill and noticed there is no way to pay online . Oh well, perhaps someday.And perhaps my biggest accomplishment, I got a co-worker to start putting money into his reitrement fund at work. He kept saying he couldn't afford it, but after seeing me these past few months tracking my funds, he finally admitted this was something he needed to do. Now he wasn't being that dumb about this, our employer doesn't match the 457 savings plan investments, instead it puts in a large amount into a pension plan instead. I can view this amount added by the employer at work, and so far they have put in at about a 6% rate. This rate changes every year based on actuarial calculations. I heard it is going to change to about 9%. In any case I have 2.5 years to go before I am vested into the plan.

Just a quickie follow up to the weekend. It was cold, but I did find a few yard sales. Nothing much that I wanted, I ended up spending $3 on minor tools and like new toys. Buying the stuff new would have cost around $25. The toys will be for kids when they are older. (Motto: Plan ahead!)

I have been reading up tonight on the concept of credit card bank transfer arbitrage (on the site www.fatwallet.com). Basically you use the 0% offers cards give you to have access to large amount of money to invest it (safe investments preferrably!), and then pay it off before it costs you. You keep the investment proceeds. My biggest quandry is how to get the money from the CCs, as they only want to do balance transfers. Having a CC balance sorta defeats the purpose of this. I think I know how to handle this, but I need to read more on this before I try this type of "investing".

If nothing else, its interesting reading.

Although I have had ideas that have saved money, one of the best (that is - highest impact) and easiest has been to work on my health.

You’ve probably heard that exercising is good for you, but you
haven’t really considered all the benefits (health and money wise) you can get from it.

Here is how I save with exercise. Of course my situation may be a little unique, your savings may not be nearly what mine are, and many people will not want to do everything I do, but still, this is just something to consider (read: your milage may vary).

My work place has a small gym that can be used at a rate of $8.00 / month. (Ok, I know this good rate isn’t available for everyone, so you’ll have to change the numbers to fit your situation.) I can use the shower at the gym and not shower at home. I can turn the water heater level down for days at a time (As I am by myself, I need only wash dishes once or twice a week.)

Here are my estimates in savings:

Fuel (natural gas for the water heater) $10/mo. (That was over a year ago, with higher prices today that might be $15 now.)
Water - This doesn’t save much, maybe $2.50 / mo. Still, it is a help.
Clothes - I have gotten my weight back down to where I can wear clothes that were good but I quickly out grew before I started in the gym. My clothing expenses last year were less than $100. Ok, this year my clothing expenses will probably go up, but not that much, maybe to $300? Still, for last year, if you say I was able to save about $360 for the year by using older (but still like new) clothes, that would be a savings of $30 / mo., although longer term this savings may be less. Also going to yard sales, smaller clothes are often sold as people gain weight, so losing weight gives you an
advantage in buying clothes really inexpensively that way.
Food - Once you lose some weight, and do those ab crunches, you feel full sooner than you used to. Its so hard to come up with a savings per month on the lower amount spent on food, but I will estimate a low $10 / mo. I think $2.50 less on food expenses a week is likely. Also this forces me to bring in my lunch every day. I would normally do this anyway, so no savings - it just enforces this to my mind to have my lunches ready each day.
Health - The past year my health expenses (other than insurance premiums) was one trip to the doctor ($15 co-pay) and a $20 co-pay for one prescription. Another one that is hard to estimate, but my health had to improve somewhat due to the exercise. If I guess one doctor visit and one prescription co-pay was avoided, I can estimate $3 / mo. savings.
One thing to note here - if you are doing any type of hard exercise (sports, weight lifting, or other intense exercise) there is always the chance of injury and a boat load of expenses that could follow.
This could mean the health savings are illusionary if you are not careful. So take that for what its worth.
Other savings - Not going out for expensive lunches with co-workers. This gives me an excuse to skip these outings if I desire, as I am now known for working out every day. I will do this occasionally, but can skip these. Savings of maybe 6 over a year, $20 per time, gives $10 / mo. on average.


OK, so what is the total:
Fuel: $15
Water: 2.50
Clothes $30
Food: $2.50
Health: $3
Other: $10
Cost: $8
Total benefits per month: ($55 savings + better health)

This is just food (or exercise in this case) for thought.

I had an idea typed up for today, but left it at work today - bleech. So for something completely different .....

As I have saved money I always like to have milestones. You know, like "Today I completely paid off my credit cards", "Next month I should have 100K saved up", "By 2008 I will have my mortgage paid off". Those type of things (note that none of those are true for me, they are just examples). Anywho... I was talking with a co-worker today, and I mentioned how one milestone I passed last year was that I had more money in my savings, stocks, retirement, and bonds combined than I owed in liabilities (my only liability was my mortgage). To me it was like the point where you can say "even if the worst happens, I have money to pay my house and not get kicked out".

OK, I know that statement wasn't exactly true. If I were to pull out my retirement funds I would lose 10% plus taxes. And of course there are living expenses and taxes, and so on. But the point was it was sort of a liberating point where I felt more in control. Does anyone have this type of esoteric milestones they use (or have used)?

I was reading various blogs, and a few discussed the stress of getting a renter for their (house, apartment, basement, ...). As I have a renter in my home now, I thought I should put my two cents in on the subject.

Since I have moved back to the US from living overseas (13 years ago) I have had renters in my house for 3 of those years, plus I have had renters living next to me often.

I have not had problems with renters in my home yet. One of the things I do is consider do I want to restrict the number of people renting from me (that is, charge a high amount) and take a chance, or charge less and and be picky on who I rent out to. So far I have gone the conservative route (charge less) and it has worked for me.

When I lived in my old townhome the neighboring home was rented out by this immigrant car salesman. When I saw him, which was seldom, he would always be friendly, and talk like he knew what he was doing. Well he would charge a high rent, and could only get people in that place that couldn't rent elsewhere (ie. had issues). They would cause a ruckus all the time, get visits from the police, and finally trash the house after living there for a year and move out. Mr. Brilliance would come in, fix up the house, and look at me like "Why are you upset with me?", and do the same thing over again. He wouldn't make any money because all his profits went into fixing the place after each set of renters left. I tried to explain it to the wife, but she thought her husband knew best.

About a year after I moved out I heard that the guy finally sold the place after losing so much money on it. I know people here wouldn't be as stupid as that, but it is painful when you have to live next to that nonsense.

As for my current renter, I advertised for less up front, and picked who I wanted, not who I could get. He likes the lower rent and decent location, and make a point to pay on time and even helps on any projects around the house (which has been rare).

I guess my point is, like investing, going the slow and steady way is the way to earn the most in renting out your real estate.

(Warning: long story)

People here on the financial blogs talk about how to make the best retirement investments all the time. And one assumption is that the companies will be competent and get your money to you when the time comes. While that's probably true, let me pass along what I went through last year with these financial companies, and you can draw your own conclusions.

This started about a year ago when my prior employer contacted me indicating that I didn't have enough money in my money pension plan to keep it there on its own, and I would have to roll it over to a new account (to my current employer account or a custodial IRA - that may be the wrong term, but I think you know what I mean) The money had been there for 2 years with no problem, why it was an issue now I didn't know, but ok, I'll transfer the money.

Once I get the paperwork from the manager of my account I find I have well over the required amount to keep my funds where they are, and ask my employer about this.
I'm told the amount vested is not really that amount, actually less than the $5K required. So ok, I'll get what I can, roll it over, and life will go on. My larger current employer has 401ks available with three different fund companies, of which I am investing in two of them. I decide to roll over into funds controlled by company "A".

After getting help with the paperwork from the on site assistant from "A", I send the paperwork off to my old employer for them to write a check. About two weeks later a check arrives, for the whole amount of my money pension, not just the vested amount.
I wonder if this will actually fly, so I cross my fingers, give the check to the on site guy, and off the check goes (with a photo copy for me - and I needed it).

Being patient I wait, and wait, and wait (and almost forget about it). I was told this should take 2 weeks at most. After 6 weeks I contact the on site guy and ask him what is going on. He doesn't know and will check, and a day later contacts me indicating that the check was sent to the wrong department, but now will be going to the right location. Just give it another week. I give it two, and the money is still not showing up. I contact the guy again, and he indicates they have the money, but there is some problem, and it will be in my account in a day or two. Again, after a week no money. This time I contact my company's HR person for retirement funds. (Yeah, I know, I was too patient). This time I get the answer that they have lost the check, and can I get a new check from the other fund company?

Ugh, ok, so I call the prior company, give them the SOB story about what heppened. "Sure no problem, what was the account number?" I give them the number. I'm then asked for the amount of the prior check. At this point I wonder if they don't know and I could say anything and would they accept it???, but I decide not to test my luck. Sure enough a week later the check arrives (with the same amount as previously!). I give it to "on-site guy", and a week later the money shows up correctly in my accounts.

All's well that end's well, right? True... but I decide a month later to tempt fate. I have a small roll - over custodial IRA, and I decide I would like to have one less statement to look at.
After the fun with company "A", I try to roll this over into my funds with company "B", the other company I have a reitrement fund with at my current employer. As I start this, I find no better luck. Now company "B" insists I get papers from the original company I invested the funds with, so they can know it was a true 401k and is a proper roll over. Sounds good except my old company from 8 years earlier is no more. I try to have them get the information from the company holding the IRA currently. I mean, if this is so important, they should have the information, right? Well this company holding my roller over, call this one company "C", can't help them. This wouldn't be so absurd, except for the fact that company "B" *IS* company "C"!!!
If they think this information is needed, why the **** don't they have it themselves???

I'm about ready to give up on this, but on a lark I check with on-site guy from company "A", and he tells me the other company doesn't know the rules, and sure, they can put the money into my account. And this time he is going to double check what is happening for me. No problems from this point forward, and the money moves just fine.

If you've read this long winded story to this point, I hope you understand my "concerns" when it comes to actually getting my money when I retire. Intellectually I'm sure I'll get the money. Emotionally... thats another story.

Today I received in the mail evil twin of that sweet gal Ms. Housing Appreciation.

No, Ms. Tax Bill didn't arrive, but her friend Mrs. Real Estate Appraisal came. It seems my previous appraisal was a little low (actually I knew that, but I thought the system was jiggered that way). Well it came roaring back with about a 40% increase from last year. Yeah, the tax rates here are being lowered, but that ain't nearly going to compensate for this number. Live by the sword, and die by the sword I suppose.

Hopefully next time I will write something more interesting, I have too much to do tonight.

Everyone out there has ideas on how to make your money work better for you. And I have to admit some of them are good ideas, a few of which I've taken to heart. One thing is rarely mentioned, and for me, I think thats a real shame. That is learning to do things for yourself.

If you are a home owner, you live in dread of having someone come in and give you an estimate on installing windows, doors, carpeting, roof (and the list goes on). Paying handymen to do basic work is the way to the poorhouse (provided you have the time to do the work yourself). You know, doing this type of work doesn't take a genius to do. Come'on think about it, do you recall the guys that you have had come in to do the work? Were they smarter than you?

Since I've owned my house I have replaced my whole roof for $700 (Corning brand shingles, it was hard work and it is a medium sized roof), replaced my 1960 era windows with double pane / low E / argon filled windows (about $2,000 for 11 large sized windows), and replaced the front door and storm door (less than $200 for the pair on sale at Lowes - but I then went and spent $100 on a top of the line door handle!). Oh, and when I bought the house I had a handyman resquare the walls in my kitchen (after I removed the original junk cabinets), and I went and installed top of the line kitchen cabnetry myself (from Home Depot - solid hickory - about $4,000, and that included the counter top).

I didn't grow up Mr. Handyman, I was just determined to be able to do things myself. I read books on the subjects, went to demonstrations at the hardware stores, started on smaller projects to get the hang of the various tools, and just did it. The work has not always been perfect, but usuaully people can't see the mistakes unless I point them out to them.
In each case the cost of paying someone to do the work would have been multiples of what it cost me to do it.

One last piece of advice on this. If you don't have much money, start small. When I replaced the windows I did them one or two at a time. I would custom order them, pay for them at pick up two weeks later, and install them on a weekend or a holiday. Then a month or two later, another two windows would be ordered, and so it went. I finished my house in 6 months using that technique. Same for the roof. I did that over a summer, doing it in small sections as I had the energy, and the sun wasn't beating down too bad. I wasn't into killing myself, so I did what I could (usually early in the morning), then quit for the day. There's no sin to have a roof half new and half old. As long as you are going to finish it soon, it will live.

Not that this type of thing happens often to me (actually, try never), but it is likely in the near future I will get a small inheritance (guesstimate is around $5,000). In the past I would just put the money into a CD, but I have more than that already in CDs, plus ING and HSBC accounts. So I already have money available if an emergency comes up (6 months worth).

My Musings:

I have been considering setting up a Roth IRA, perhaps this could be the starting money for that.
I already put 10% into an retirement plan at work, so I don't think I need to do more there.
I could pay down my mortgage some, but its not like that is necessary. Also doing that, while good, would limit my flexibility with the money. Also, I'm at the point my payments are about 75% principle, so its not like a large payment now will make a huge difference in the overall length I will be paying out.
A plain mutual fund? At least there the money would be accessible if needed. And it hopefully would have a better return than either a CD or early payment on my mortgage.

In any case I hope this will hold off for a while but if not... I'm leaning towards a mutual fund, hopefully something low load and low turnover. Since I'm a newbie with this, where does that leave me? Some type of an index fund? I guess its time to research this more and be ready.