Everybody Loves Your Money

MSNBC has a feature on their website that lets you check the health of your bank or credit union.  I took a look at my credit union and found that they have a troubled asset ratio of 18.  That’s actually pretty good.  There are over 389 banks (as of Dec 31 2009) that had a troubled asset ratio of over 100 which means that they had more troubled loans than they had money set aside to cover potential losses.

It’s definitely worth taking a look to see where your bank or credit union falls.

Wow.  CNNMoney has an article up today about a recently released survey from the Employee Benefit Research Institute.  They surveyed 1153 US workers and retirees older than 25 years of age in January.  Here are some of the results:

54% of workers said they have less than $25,000 saved for retirement

24% have delayed their retirement in the past year

27% of workers said they have less than $1000 saved

43% have less than $10,000 saved for retirement

Personally, I think there is a reason that defined benefit plans like pensions have been such a popular thing.  It would appear that the majority of people either don’t  know how to save, or have never been able to put themselves in a financial position to have the extra money to save at the end of the month.  Either way, it doesn’t speak well for our collective future.  While I’m glad not to be in any of the statistics above, I still wonder how it will impact me.

This is a question I’ve struggled with over the years and have posted about in the past.  I’ve gone back and forth on whether I should have earthquake insurance.  A few years back, I decided that the odds were against me and I bought some.  The premiums are $370 per year which is not that bad for a $315,000 house.

A few things help me keep the price down.  My house is on a level lot, it’s pretty much all wood and is newer construction that incorporates a lot of the more current earthquake reinforcements.

What brought this up for me again is CNNMoney has an article that talks about who should consider getting the coverage.  Since I live in the “RED” zone (Pacific Northwest), it just reinforces my decision to have earthquake insurance.  There is no question that we will have a large earthquake here.  The only question is when.  Paying $370 per year gives me the peace of mind that I can put my house back together if we have the “big one”.

Check out the map and see if you live in a hot zone.

Follow ELYM on Twitter: http://www.twitter.com/elym

JD over at Get Rich Slowly has written a book that is due to be released shortly.  JD has built up a massive following at Get Rich Slowly and his writing style is top notch.  If his book is half as good as his blog (I’m sure it’s just as good), it should be a great read!!

You can pre-order it on Amazon.com right now!

Here is the description of the book:

Keeping your financial house in order is more important than ever. But how do you deal with expenses, debt, taxes, and retirement without getting overwhelmed? This book points the way. It’s filled with the kind of practical guidance and sound insights that makes J.D. Roth’s GetRichSlowly.org a critically acclaimed source of personal-finance advice.

You won’t find any get-rich-quick schemes here, just sensible advice for getting the most from your money. Even if you have perfect credit and no debt, you’ll learn ways to make your rosy financial situation even better.

• Get the info you need to make sensible decisions on saving, spending, and investing
• Learn the best ways to set and achieve financial goals
• Set up a realistic budget framework and learn how to track expenses
• Discover proven methods to help you eliminate debt
• Understand how to use credit wisely
• Win big by making smart decisions on your home and other big-ticket items
• Learn how to get the most from your investments by avoiding rash decisions
• Decide how — and how much — to save for retirement

Anyway, based on what I know about JD, it’s definitely worth reading!

In a sign that not all people are capitalistic monsters, Bob Moore, the founder of Bob’s Red Mill in Oregon, has decided to give his company to the 209 employees that work there.  Bob could have sold the company for a large sum of money but decided that money isn’t everything.  WOW!

Bob has turned down a number of buyout offers over the years and the business continues to grow steadily.  A company news release shows that they are growing over 20% annually.

In order to qualify for a stake in the ownership, an employee needs to be vested over a three year period.

I’ve been down to their retail store in Oregon and was very impressed with the operation.  I have purchased a number of their gluten free products and have never been disappointed.  It’s a great company!

Anyway, I just love reading stories like this.  It seems to blur out many of the other negative stories out there about “profit at all cost”.  I bet Bob sleeps pretty darned good at night!

Parade has a great article about a family that moved in to their dream home but ultimately sold it, bought a house that was much smaller and half the price, and then donated the difference to charity. One thing that I found interesting about their story is that doing this didn’t hurt their family, rather it actually helped them become closer.

It doesn’t sound like they’ve regretted one bit of their decision. We also live in a house that’s too big for us and I’ve often thought about downsizing. While we’ve thought about it, we haven’t made any moves and certainly haven’t considered the incredible sacrifices that this family made!

Here is the article:
http://www.parade.com/news/2010/01/17-why-we-gave-away-our-home.html

Nickel over at FiveCentNickel has accomplished what I would really like to do. He has paid off his mortgage in about 7.5 years. You can feel the excitement and satisfaction in his writing as he explains how he did it. I’m impressed.

We are also paying additional towards our mortgage since it’s really the only debt we have. My goal isn’t quite as aggressive as Nickel’s but I do intend to be able to pay the mortgage off when my daughter enters college. We’re off to a great start!

Currently we are paying an extra payment each year by participating in our credit union’s FREE biweekly payment program. (They don’t charge a fee for it like most banks). We are also paying additional blocks of money towards the mortgage each month once we see how much we have left over after all the bills are paid. The critical part of this is that our bills only account for less than 50% of our take home pay. That leaves us with a sizeable chunk of cash to put in savings and towards the mortgage each month.

The other part of the equation for us is that we own (no mortgage) the lake house that we built a couple years ago. We have no debt against that and, even in this market, estimate that we could sell it for about $150K. My goal is to pay the mortgage down far enough that we would always have the option of selling our second home so that we own this one outright. Our primary house is much larger and is located close to the city where all the jobs are so we wouldn’t want to sell the house we are in and move out to the lake, although it’s always an option and would make us mortgage/debt free instantly.

Anyway, go check out Nickel’s posts on being debt free and how he did it. It’s well worth reading!

Free Money Finance is having a March Madness event that is highlighting the best of the best personal finance blog posts. He’s pitting two great articles against each other in a series of games. It’s a great way to check out some quality personal finance articles and broaden your reading list of good PF Bloggers.
Go check it out!

I just read an article about David Cerullo. David is the head of the Inspiration Networks religious organization. They have nearly $100 million in annual revenues, mostly from donations by their followers. The church preaches that people who donate are more favored by God.

Unfortunately the ministry is hitting hard times and has had to lay people off, turn down the heat and cut costs wherever it can. Apparently it can’t cut costs at the CEO level. David Cerullo is making $1.5 million per year and is building a $4 million home in a gated community in western South Carolina.

I think I prefer my religious leaders to live a little bit more modest lifestyle…….

http://www.usatoday.com/news/religion/2009-07-02-cerullo-money_N.htm

I stumbled on to Mint’s infographic about all the pitfalls of credit cards. I especially like how they compare it to falling down a very deep ravine until you hit fire at the bottom.

If you haven’t seen it, it’s worth checking out:
http://www.mint.com/blog/finance-core/the-descent-into-credit-card-debt/