My 2Cents!~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~A Newsletter all about Living with Abundance, Ditching Debt and Collecting Cash.
Welcome to the Frugal Friends Network where We turn the Middle Class into Millionaires. Sponsored by SmartCents, Inc.
------------------------------------------------------------------------------------------Janine Bolon, Editor janine@smartcentsinc.com
[NAME] Welcome to MY 2Cents!
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In this issue -- Note from the Editor -- Dealing with Details: Saving Money by Using Less -- Do You have a Blog? Get a Free Book! -- Free Teleseminar: I’m taking suggestions now -- Asset Allocation by guest author, Jan Geiger -- Book Review: “Get Your Assets in Gear” -- Charity Highlight: The Money Camp -- Learning from Other’s Mistakes, Read the Blogs! -- WHO WE ARE
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Note from the Editor ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dear Frugal Friend, I’m thrilled with all the cool information this newsletter has for you today. First off, we discover the joy and savings you find by dealing with details of living. Being conscious about all the little things we do in a day with disposable products allows us to save ourselves and our families hundreds of dollars by cutting back. I’ll explain the how-to of it all. Next, Jan Geiger, author of “Get Your Assets in Gear” was kind enough to write an article on Asset Allocation. Jan is a certified financial planner and I find her expertise in the area of investing simple to follow and easy to understand. What a plus, right? Visit her site to get a flavor for her many tips on handling your savings. www.getyourassetsingear.com To wrap up this issue is an article on The Top 100 Personal Finance Blogs. This list is wonderful for a person like you because the authors of www.creditcardlowdown.com have made this list into an annotated bibliography with wonderful descriptors on all the blogs so you can quickly and easily see which blogs will be worth your time visiting and which ones you can give a pass. I highly recommend that you take 10-15 minutes with the list and bookmark the blogs that will assist you with your current financial situation. The whole point is to get yourself out of debt, save your wealth and become financially independent. Why not read the blogs of people who have done just that? They’ll make excellent coaches and it won’t cost you a dime. Plus you can get them to tell you details as you comment on their blogs! Wishing you abundance, Janine Dealing with Details: Saving Money by Using Less ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ A girlfriend of mine was visiting last week. While we stood in the kitchen catching up, I was busy mixing up some scones. (I love baking from scratch.) As I finished rolling them out and putting them into the oven, my girlfriend let out a gasp that made me think she was about to collapse! “I would never have thought of that in a million years, Janine.” I was confused for a moment and then it dawned on me what she was talking about. I was taking all the flour from my countertop that I used to roll out the dough and I was putting it back into the flour bin. I have a fine mesh strainer I use for this process and I just sift the flour back into the main container. This keeps any dough lumps out of my clean flour. This system is so route for me I don’t even think about it. One day over 11 years ago I had figured out how much money I would save a year by returning flour from each roll-out of biscuits, scones, breads, or pie crusts into the bin. It amounted to $5 for the year. So I went out and bought a strainer for $3 and have been using it ever since. Over the course of 11 years I’ve saved a minimum of $55 on flour using the sift-back system. I say minimum because when I first figured out the savings rate 11 years ago I wasn’t cooking from scratch as much as I do now. I make something using flour and rolling it out at least 4 times a week. Now you may think, “Janine, this is ridiculous! I mean, a $55 savings over a decade for this?!!! Not worth my time.” That is where you may be a bit short-sighted, dear one. I want you to think past the reference of scones and biscuits and think about all the products you use in your home every day or several times a week. If you save a little bit on each of these products you will be saving yourself hundreds of dollars a year and thousands of dollars in a decade. Think about all those things you do during a week that may be costing you money because you use too much or you don’t recycle it within your own house. Here are some tips I’ve learned from various sources over the last decade that have helped me to save pennies a day that add up to thousands over a ten-year period. • Washing Dishes - When you wash dishes in the dishwasher do you fill the cup all the way up with detergent? This may sound silly, but I tested my detergent in my washer by using less and less until I found the amount “required” to get my dishes clean. This amount is exactly one third the quantity the cup can actually hold. Now when I buy dishwasher detergent I dump it all out of the box it comes in and I put it into an old ice cream bucket (yes, I get the powder kind). I have a special scoop I use that has the exact markings on the side of it (I made the lines with a permanent marker) so that anyone in my family from Dad to the 5-year-old knows the exact amount of detergent to put into each dishwashing load. Side Note: I had a dishwasher repairman out to look at the hard water issues we have in this area of the country. He then told me that the rinsing agents now available for dishwashers actually keep the seals and rubber parts of your dishwasher in good shape and are worth the money to keep him from coming out to repair those pieces. Good to know, yes? • Laundry - When you wash your clothes how much detergent do you use? Again, I used the same system here that I did for my dishwasher, I kept using less and less cleaning compound until the results showed (grey-looking whites) and then I brought the quantity of detergent up a bit and have used that amount ever since. Again, my scoop has special marker lines to show all members of the family just how much to use. My 7-year-old was teaching my 5-year-old how to do laundry and she suggested, “Then you add this much detergent to the load. Follow the Mom Line and it will be just enough.” That was payday for me! • Toothpaste – Why do you put a full glob of toothpaste on your toothbrush? Do you spread out the gel so all the bristles on your brush are covered? You may want to rethink the quantity of paste-per-bristle ratio. If you look on most tubes of toothpaste they tell you exactly how much to use. On my particular brand, it says, “Put a pea-sized amount” on the toothbrush. Wow! That certainly is different from the packaging on the outside of the product as well as the commercials. I mean you can frost a cake with the amount of toothpaste they use, right? Okay, maybe that was extreme! • Size/Color of Containers – Did you know there is a psychological behavior that the lower the contents of a container the less a person uses? Why not use this data to your advantage when it comes time to put out the hand soap, dish soap, shampoo, etc? I have proved this research to myself by putting small bottles that were half full of shampoo and soap in the shower for my family to use. It takes them longer to run empty then if I filled them full each time they got low. Next time you’re out shopping you may want to think about getting some clear containers for all your liquid soaps, shampoos and conditioners. To some of you this list of tips might seem silly, extreme or down-right unprofitable, but in actuality it is amazing how much money you’ll save over the course of a few years by doing these simple little tests to determine the cost/benefit ratio of any particular product. I had one client tell me in exasperation, “Janine, it will take years for this to really make any difference!” My response to him was, “Well, how long will you be washing your hands, shampooing your hair, doing dishes and laundry?” Folks you’re going to be doing all of these things for the rest of your life, right? At least I HOPE so. A few of us may go bald between now and then, but for the most part there are hundreds of little things you can do to save money. The point is this. Little savings add up BIG in this area. This is exactly the same principle that compound interest uses to create huge rewards by the end of a 30-year savings cycle. If you would like additional ideas on how to do more with less, I recommend you read Amy Dacyczyn’s “The Tightwad Gazette.” You can get it from most libraries and it only costs around $20 to purchase. You can also visit my web sitehttp://smartcentsinc.com/cgi/furtherreadings/index.cgi to review other books that I think are worthwhile reads for saving cash. Do You have a Blog? Get a Free Book! ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ For the next 30 days I’m running a promotional special. I’m giving away signed copies of my books: • Money…It’s Not Just for Rich People! • Ditching Debt • The Grocery Store Game • Cash, Cars and College: A Young Person’s Guide to Money (ages 12-19) The only requirements to receive a copy of the book of your choice are that you have a blog that has been running longer than 3 months and that you agree to write a review of the book on your blog. If you are interested in participating in this promotion, please email me Janine@smartcentsinc.com and I’ll ship your book within 24 hours by priority mail. If you don’t have a blog, then tell your friends who do blog about this and then you two can share the book! The purpose of Smartcents, Inc. is to bring the message of debt-free living to as many people as possible. I can think of no better way then by asking the blogging community to write up reviews. Thank you for helping me spread the message of hope when it comes to debt and financial independence. Free Teleseminar: I’m Taking Your Suggestions Now~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Lately I’ve had a barrage of emails from clients who have heard me speak or read my books and are now interested in having me do teleseminars to keep them inspired. I would love to do this for the Frugal Friends Network, but before I can I need your assistance. First off, how does one go about doing this inexpensively? I searched the web and found costs of $25 - $50 per person for these things. I don’t want to charge you for these calls, yet, I also want SmartCents and the Frugal Friends Network to remain solvent. (Go figure!) So, I’m researching how to offer these services free or inexpensively to all my clients, bloggers, readers and students. I have a list of topics that I am willing to chat about for an hour on these calls. Changing Your Choices to Change Your Financial Future Ditching Debt While Stashing Cash Creating Achievable Financial Goals Finding Your Purpose in Life (aka: Why Become Wealthy?) Are there other topics which you would like to hear about? Do you have specific questions that you would like me to address? Do you know of a great teleseminar service? Ship me an email at Janine@smartcentsinc.com with your suggestions and I’ll be updating you via the newsletters as to the eventual start date of these seminars. Asset Allocation, by guest author Jan Geiger, Author and Financial Planner ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Studies have shown that as much as 90% of your investment return will come from your asset allocation, while the rest comes from your specific asset selection. As an example, in 2002 large-cap stocks had a terrible year. It did not matter which large-cap stock fund you picked, you would have had terrible returns. On the other hand, if you had chosen bonds or real estate, you would have had positive returns. The very best large-cap stock fund did much worse than the very worst bond fund. For this reason, it is crucial that you spend time deciding on your asset allocation, and then choose specific investments (I recommend mutual funds). Asset allocation refers to the mix of investments in your portfolio. For starters, you want to decide how much of your assets are to be in stocks, how much in bonds, how much in cash, and how much in other investment categories such as real estate, oil and gas, commodities, or hedge funds. Knowing your risk tolerance will drive your asset allocation. Those who are conservative will want mostly conservative investments, and vice versa. The primary issue to remember with asset allocation is that no good or bad, right or wrong category exists. Strive for a mix that represents a good match for your risk appetite. I would suggest, however, that you include at least seven different categories so that no single category represents more than 15% of your total portfolio. Let’s look at some examples of asset allocation for various risk appetites. Conservative: Cash (CDs) 15% Short-term bonds 15% Intermediate-term bonds 10% High-yield bonds 5% Fixed annuity 15% Conservative allocation fund 15% Moderate allocation fund 15% Large-cap value stocks 10% Moderate: Cash (CDs) 5% Short-term bonds 10% High-yield bonds 10% Large-cap growth stocks 10% Large-cap value stocks 15% Mid-cap stocks 10% Small-cap stocks 10% International stocks 15% Moderate allocation stocks 15% Aggressive: Short-term bonds 5% High-yield bonds 5% Large-cap growth stock 15% Large-cap value stock 15% Mid-cap stock 10% Small-cap stock 10% International stock 15% Emerging market stock 5% Real estate 10% Gold 5% Oil and gas 5% An index mutual fund is one that mimics a specific index. If you decide, for example, that you would like to have 10% of your portfolio in mid-cap stocks, a simple way to accomplish this would be to choose a mid-cap index mutual fund. Such a fund would contain a variety of mid-cap companies, each selected to mimic or imitate a mid-cap index. If you are just getting started as an investor, I would recommend that you start investing with a mutual fund company, such as Vanguard or Fidelity or ProFunds. Stick with index mutual funds until you have learned enough about mutual funds to be able to intelligently select specific funds. One of the best websites for learning more about mutual funds is www.morningstar.com. Under the personal-finance tab, there is a good section about asset allocation with answers to dozens of questions. If you aren’t sure of your risk appetite, you can take a quiz at http://www.msmoney.com/mm/investing/get_started/about_risk/risk_test.htm Jan Dahlin Geiger, CFP®, MBA Financial Network Corporation Author of Get Your Assets in Gear! Smart Money Strategies www.getyourassetsingear.com Book Review: “Get Your Assets in Gear” by Jan Geiger ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Anytime I review a book, I ask the author if they would share an article with us here at the Frugal Friends Network. After all, this network is all about “Making Middle Class Millionaires” and to do that requires more than one person’s point of view! Jan is a Certified Financial Planner for the Financial Network Corporation and she is also the best-selling author of “Get Your Assets in Gear.” This is the book that we will be reading for July. You can purchase a copy on Amazon and start reading now. http://www.amazon.com/Your-Assets-Smart-Money-Strategies/dp/1598009354/ref=sr_1_1/105-8041759-5438061?ie=UTF8&s=books&qid=1181833620&sr=8-1 I’ll be posting my comments about the book next week and I invite you to join in the discussion. This is a virtual book club. Jan has offered to answer any questions you may have. Isn’t that cool? Here is the blog: http://themoneymuse.blogspot.com/ Charity Highlight: The Money Camp ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ "Why didn't anyone teach me how to save and invest when I was young?" If you have ever asked this question, you're not alone. Less than 10% of all high school graduates learn about money in school and even fewer learn about it at home. This is because parents often don't know the information themselves or simply don't have the tools to teach their kids about money. The Money Camp is a unique financial literacy program for kids and grownups. They believe that becoming financially free is primarily a matter of making the right choices in life and developing the right financial habits. They have unique camps that teach your kids and yourself! "The Money Camp Mission is to empower people to create financial freedom in their lives." Visit the Money Camp website at: http://www.themoneycamp.com/ to learn more about the programs and educational seminars presented by these wonderful people. Their site is fun, informative and helpful to the old and young alike! Learning from Others’ Mistakes, Read the Blogs! ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The blogging world is amazing. You can find someone spouting an opinion on just about every topic imaginable. Use this fantastic medium to your advantage. I just found this incredible article on the “Top 100 Most Influential Personal Finance Bloggers.” If you can’t find someone you identify with on this list, I would be shocked. They’ve got lifestyles and personalities of all types. To read the whole list go to: http://www.creditcardlowdown.com/2007/06/the_100_most_influential_personal_finance_bloggers.html I don’t care which system you choose to get out of debt, the point is to pick a system and then implement it! This article will present you with over 100 individuals that have found their own ways out of debt and into wealth. What an excellent resource. You see, you’re not alone!!! Do You Have a Question or Charity for the Next Newsletter? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ If you've got a question or charity you want me to address in the next newsletter, please send it to janine@smartcentsinc.com with the subject line "Newletter Question/Charity." My 2Cents will feature a question and a charity each issue from the Frugal Friends Network. If you wish to remain anonymous, not a problem! Just state that in your email.
------------------------------------------------------------------------------------------ WHO ARE WE ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~SmartCents, Inc. is a company dedicated to bringing the systems of debt-free living to as many people as possible. We wish our students to go out and make their communities stronger by building financial security within their personal lives first and then demonstrating the conserver lifestyle to others.
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