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When I first began reading that President Obama was considering reducing the tax benefits for savers who make use of 529 plans and other education savings accounts to reduce the cost of education-related expenses, I was surprised. It has been my understanding that 529 plans, all though I do not have one, are intended to help the middle class by encouraging tax-efficient savings for education.

According to the statistics on 529 plans and Coverdell Education Savings Accounts, these college savings plans have not lived up to the expectations. The middle class has mostly ignored these options for preparing for their children’s and grandchildren’s education. Those taking advantage of the tax benefits might be families who may not need the incentive.

The tax benefit for 529 plans is simple. The growth in these accounts will accumulate tax free, unlike growth in regular investment accounts. When you sell investments and withdraw that proceeds from a regular investment or savings account, you owe income tax on gains and interest. You will also owe income tax if your regular investments offer any dividends. This is not the case with 529 plans. You can withdraw your investment or savings for education expenses tax-free, according to how the law is written today.

Most startling when reviewing the demographic statistics was the fact that families with 529 plans or Coverdell accounts have, on average, twenty-five times the median net worth of those families without education savings plans. Those with the accounts have three times the median income of the others, or $142,400 versus $40,300.

So while in theory, the 529 account could save the middle class money, it’s generally not working out that way. Despite the popularity of 529 plans among financial writers and advisers, it just hasn’t caught on among the middle class. That probably could have been expected; wealthier families generally are in a better position to take advantage of all that is presented to everyone. The same criticism can be made regarding 401(k) plans, which have been around much longer than 529 plans.

The middle class was so slow to adopt 401(k) plans that companies started automatically enrolling employees in the retirement plans to jump-start their savings. This, while beneficial to some employees, was a bigger win for 401(k) plan administrators and managers of the (usually expensive) funds included in 401(k) plans. In this “win-win” scenario, middle class investors receive a supposed benefit, while the financial industry feeds off a growing source of revenue.

There are a number of specific reasons that 529 plans have failed to take root in the middle class investment and savings portfolio, according to reports by and discussions with 529 plan officials.

The middle class has difficulty saving. Whether this is true from a financial perspective or just a matter of mindset, in general, the middle class sees saving for their children’s future needs for funding of higher education an unattainable goal. In many cases, families believe they need to choose between saving for retirement before saving for their children’s education, and saving for retirement is a necessity that can’t be fulfilled. Thus, the priority is always one’s own retirement.

The hierarchy of needs is real. Especially through the recession, the financial focus of the middle class has been on basic necessities, even more basic than one’s own retirement. It is impossible to make saving for the children’s future when there isn’t enough income to cover food and shelter. If you have to choose between paying the mortgage and investing for any other purpose, whether one’s own retirement or in a 529 plan for the children, the mortgage always comes first. Urgency trumps importance.

The industry hasn’t done a good job of marketing to the middle class. Half of all parents of future college students just don’t know what 529 plans are. Financial aid is complicated even without the inclusion of 529 plans, so there are two paths that one can arrive at the idea that middle class families don’t understand 529 plans. Either they are just not receiving the marketing message, or they are receiving the message, but it’s drowned out by the complex industry surrounding the financial requirements of a college education.

Parents underestimate the cost of a college education. It’s possible that many parents in the middle class don’t anticipate their children’s future expenses being so large that they would necessitate advance planning. They could be underestimating the cost (and annual increase in cost) of tuition or overestimating the amount of financial aid available in the form of loans and scholarships. Parents may be unaware of how the burden of student loans has grown significantly over the last generation.

If these numbers were illustrated better, even though some in the financial industry are continuing to attempt communication, perhaps the middle class might be motivated to think about the future needs of their children.

Is Obama’s proposal to limit the tax benefits of 529 plans and Coverdell Education Savings Accounts the right solution? At this point, we’d probably be better off working on how to encourage higher education through tax policy than discouraging it. Right now, wealthy families are more likely to take advantage of these tax benefits, so solutions should be focused on how to encourage middle and lower income families to save more.

Simplify the options. In its current form, each state can support its own 529 plan, plus there is a 529 plan that relates to private colleges specifically. States usually partner with one specific provider in the industry. For example, New Jersey partners with Franklin Mutual Advisors (a branch of Franklin Templeton Investments). Vanguard is a partner with several other states including New York and Nevada to provide qualifying 529 plans in those states.

On the one hand, choice is limited depending on the state in which you live (if you want to save money on state income taxes), but on the other hand, the information is often presented in a way that makes it difficult for investors to choose plans. If 529 plans were presented more like IRAs, some confusion might be eliminated. You can open an IRA with almost any investment company and receive the same tax benefits. 529 plans could theoretically work just as easily.

Another way to simplify would be to offer one 529 plan across the entire United States. All investors would invest in the same plan, and this would eliminate the problem of choice. Earnings could be tax-free at the federal level and in every state.

Offer more incentives. In order to encourage more middle class and low income families to save for their children’s education — an even more important goal among low income families because a college education is a necessary part of moving out of poverty — the government can change the way incentives are presented for saving. For example, the government could match, in the form of a credit into the account or in the form of a tax credit, contributions into 529 accounts made by families whose household income falls below a certain level.

Also, the government could consider a contribution into a 529 account a tax deduction, so a family that has an income of $40,000 and chooses to deposit $1,000 into a 529 would be taxed only on $39,000. That tax deduction could be limited only to households that fall below a certain income level.

Another potential incentive would be for the government to automatically create an account for every newborn child, with an initial deposit that can only be withdrawn after at least fifteen years and only for higher education expenses.

Increased communication. Regardless of how the government, the financial industry, or society at large decides to improve the feasibility of 529 accounts for moderate and low income families, the communication needs to improve before more people adopt these plans. Not only does communication need to be clear about the benefits of 529 accounts, but there needs to be a stronger effort to promote the necessity of a college education.

It’s difficult to see children from struggling families believe that college will never be an option for them, particularly when children find themselves needing to contribute as soon as possible to their families’ household income.

If education isn’t a priority, whether out of necessity or out of ignorance of its social and financial benefits, saving for education can never be a priority.

Do you invest in a 529 plan for your children or future children? If not, why not?

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Here’s an idea for all you people who like to “hustle” to come up with ways to earn extra income. This has happened to me many times, and it comes it many forms. So far, I haven’t fallen for what I think is at worst a scam, but sometimes, one could argue, is a legitimate way to provide a service. I almost fell for this latest attempt, however, because it involves the nonprofit organization I recently formed. This business solicited me using a fairly popular and likely lucrative technique, which is basically as follows:

  • Receive lists from state governments that contain newly registered businesses.
  • Offer to provide a business-related product or service normally offered by the state, for a significant mark-up.
  • Give your business a name that can be easily confused with an official government entity.
  • Prepare and send through the mail a solicitation that looks like a bill or an invoice.
  • Provide a deadline and create a sense of urgency.

I have to imagine that a good number of business owners respond to these solicitations believing it is part of a government requirement. After all, there tend to be many government requirements when you file paperwork for a new business. There are two ways to look at these businesses that take advantage of people’s fear or apprehension of non-compliance with government. If you tend to believe that there’s a market for everything and all bad aspects of economies sort themselves out on their own, you will see this as a business simple providing a service to make money, catering to a specific market — even if that market consists mostly of people who are unsuspecting and ready to part with their money without doing much research.

On the other hand, you might see this as a sleazy and manipulative sales tactic, coming awfully close to impersonating a government official. Here is the most recent solicitation I received in the mail.

I didn’t scan the envelope before throwing it away, but it looked similar to envelopes I’ve received in the past from the state goverment. But all number 10 envelopes with address windows tend to look the same, anyway. I saw the name of the business in the return address as “New Jersey Business Filing Services,” so it immediately sounded official, but I am by nature somewhat skeptical. The mailing address was my first hint that something wasn’t right. An official state goverment organization should be based in Trenton, not East Windsor (where I grew up). But people living elsewhere in the state may not be familiar with the geography to know that this was not likely to be a state government address.

As you can see from the “bill” in the envelope, the New Jersey Business Filing Service’s designer did a good job of making the solicitation look like a bill from the government.

“Certificate of Good Standing.” First, in the top right, there is a reference to a “Certificate of Good Standing.” This is a legitimate type of document you can order from the state government. It’s not generally a necessary document, though it’s possible that you would have some business partners who might ask for it. It is, however, absolutely free to seach the state’s business directory and determine the status of a corporation’s standing.

“Important! Follow instructions exactly when completing this form.” This notice under the address gets the readers attention, and directs him or her to read the instructions in fine print in the middle of the page. This equates the form with the government, because of the heightened importance of completing government forms accurately and honestly. Citizens generally understand there could be penalties for making mistakes on official forms; and this gives the reader the idea that the same might be true here.

Business identification number. This “bill” contains my business’s identification (ID) number in several places. The business ID number is assigned by the state government, so this easily puts the idea in the reader’s head that this is an official government bill. After all, how else would someone know your business’s identification number? It’s actually simple — the numbers are public, and anyone can find the identification number for any registered business in the state. Its presence on the form gives the impression of government authenticity. In any solicitation for a service, there would be no need to include a business’s own state identification number.

Dates in boxes. This is a standard feature on all invoices. Invoices are issued for services purchased or rendered, and are usually issued once an agreement has been made to purchase a product or service. By including two dates in boxes, with one being a larger date similar to a due date, this gives the impression that this is an invoice for an all ready agreed-upon transaction. “Don’t you remember making this agreement? Here’s what you owe.”

Bar codes. I covered up the two bar codes in this solicitation, one in the middle of the page and one on the remittance voucher, because I my bar code reader couldn’t decipher the message. It could simply be a pattern designed to look like a real bar code, or it could be an encoding of personal information. Either way, it has the same effect: it adds an impression of legitimacy to the mailing.

Remittance voucher and self-addressed return envelope. The lower portion of this solicitation is a remittance voucher. This is a common feature of bills sent through the mail. It signifies to the reader that he or she already owes the amount listed as the price of the product or service, and someone is waiting for that payment.

“The Certificate of Good Standing bears the official seal of the New Jersey State Treasurer.” This statement is the last, and probably most often read, sentence of the solicitation’s text. Combine that with the first sentence: “Congratulations on registering your business with the State of New Jersey.” These two statements together sound as official as any communication actually from the State of New Jersey would sound.

Form numbers. In small print at the bottom of the solicitation are some letter and number combinations that look suspicious. The government tends to include form numbers and revisions on their official applications and forms. For example, Form 1040-NJ is the form number used for one of the many forms available for filing state income tax returns. This is form “DR-392.” There is no need for this to be on a solicitation. It’s simply there to make the letter look official.

The same is true for the text that says “R.01/14.” This could mean this letter was last revised in January 2014. And perhaps that is true. But there’s no need to include that on a solicitation. There are reasons for state or federal governments to include revision numbers on forms and applications.

Despite all the above attempts to fool readers into thinking this is an official government notice, there is, however, one sentence on this solicitation that could help readers understand not only that this is not coming from an official government source, but it also not a necessary service. The solicitation includes the following text:

This product or service has not been approved or endorsed by the government, and this offer is not being made by an agency of the federal or New Jersey government.

Enough said. Or is it? I believe that most people will ignore this warning as they quickly complete this order form, as they are accustomed to doing for official state business, particularly when it comes to state taxes.

A short form standing certificate from the State of New Jersey is $50 for LLC and LLP organizations or $25 for other corporations, and you can order one for any company registered in the state. What this company, the “New Jersey Business Filing Services” company, is doing, is taking $74.98 from customers, ordering a $50 or $25 short form standing certificate, and passing it along to the customer. That’s a 50% or 200% mark-up, or not a bad business idea. The company is also offering a “package containing agreement templates for your business,” so they are potentially adding some value. That may be worth the additional $24.98, but certainly not $49.98. In fact, you can easily find free agreement templates online. What this company provides likely won’t be any better than what’s available online, and definitely wouldn’t be better than what your business attorney might write up for your business specifically.

When I received this envelope in the mail, I opened it right away. I’m eager to comply with any type of requirement by the state so I can continue doing business. I knew right away this was not a communication from the state, and I knew I had better options for what this solicitation was offering. I saw right away that this wasn’t a real invoice or a bill despite the company’s attempts to emulate one.

So is New Jersey Business Filing Services a scam? Well, it’s certainly misleading. There’s a disclaimer that should provent people from calling it an outright scam, but I’d say it’s borderline. It’s a for-profit business, and the owners are just trying to use whatever tools are available and legal to earn a profit.

But business owners should be on the look-out for solicitations like these.

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Since December, federal banks and credit unions have been allowed to offer savings accounts that include a raffle element, after some states have allowed accounts like these for some time. The goal of these lottery-like accounts is to encourage more people to save money, particularly those households with low and moderate incomes. This was the single provision of the American Savings Promotion Act, a bipartisan bill signed into law by the President of the United States.

How prize-linked savings accounts work.

When you open an account with a certain value, you receive an entry in the raffle. While account holders don’t necessarily earn interest, one lucky winner will receive enough interest to change one’s life. The more you save, the more chances you have at winning.

Here is an example of how this works, based on the “Save to Win” model, organized by the Michigan Credit Union League (MCUL) in 2009, in which some state credit unions are all ready participating. If you open up a 12-month certificate of deposit within a prize-linked savings account and deposit $25 into the account, you receive one ticket (like a raffle ticket). For every additional $25 you deposit into the account, you receive an additional ticket, up to ten chances per month. With the tickets linked to CDs, keep in mind that you may be penalized for withdrawing your money before each deposit matures at the end of the initial twelve months.

The prizes are generally awarded as small monthly prices or larger annual prizes. Even the small monthly prizes would be larger than the interest you could earn in the highest of high-yield savings accounts, but there’s no guarantee of receiving it. Some of the winners have been publicized like lottery winners or charities, with big checks indicating $10,000 in prize money.

For North Carolina credit unions in the Save to Win program, on the 14th of each month, there are 3 grand prize winners every year, receiving $10,000 each; three quarterly winners each year, with prizes from $500 to $1,500 depending on the quarter, and 312 winners each month across the state, winning prizes from $25 to $100. These are the Save to Win central drawings — each participating credit union may also supplement the program with their own drawings.

The state credit unions already offering these accounts may be successful in encouraging saving behavior among individuals who may not already be saving money — at least, not saving money in a bank. The accounts may attract people who are prone towards gambling or other risky behavior. Prize-linked savings accounts have been around in other parts of the world and have been shown to be successful in attracting depositors. The question remains whether encouraging good behavior through the potential of a prize has any lasting effect on savings behavior.

If people begin to associate saving money and other behaviors that ultimately benefit a family from a financial perspective with the chance to win a prize, they may only desire to take on these behaviors when they could win something — a prize more immediate than long-term financial stability. When parents pay their children a monetary prize for good grades, those children could be associating good school work with financial gain, which may not always work out well in the end.

Parents can control how they use rewards with their children, adapting the strategy to ensure they are working hard for the right reasons, but financial institutions look out for one thing: the bottom line. Banks and even nonprofit credit unions will continue to run programs like these as long as they’re profitable, with no regard for whether customers are overall in good financial shape.

Bloomberg explains some of the history of prize-linked savings accounts:

A bank in South Africa tried this in 2005. The First National Bank’s Million-a-Month Account promised savers a chance to win 113 prizes a month, including a grand prize of 1 million South African rand (about U.S.$150,000 at the time). Within 18 months, the bank had more prize-eligible accounts than regular ones. These new customers, many of them poor, saved an extra 1 percent of their incomes, a recent study found, and boosted their overall saving 38 percent…

A prize-linked savings account won’t help raise incomes, and it won’t lower the costs of health care or housing. But it may nudge Americans to pay just a little more attention to their savings, so that an unexpected expense doesn’t become a financial disaster. At the very least it could give some lucky savers the thrill of hitting the jackpot. (Bloomberg)

People are drawn to lotteries, usually for worse, but maybe also for better. If you look at the lottery as a “tax on stupid people” or a “tax on poor people,” this is a little different. In a typical lottery, you buy a ticket and never see that money again. It’s a terrible investment, yet people, not just the stupid and poor, continue to pour money into the lottery.

While offering the chance at a financial windfall might encourage more saving, is a $10,000 windfall enough to encourage behavior? I can remember my days (not too long ago) working in a corporate office environment. When the multi-state lottery prize money was high enough, well into nine digits, a group would organize and co-workers would pool money together to buy some lottery tickets. Throw a dollar in, have an infinitesimal chance of winning enough money to buy the moon. The odds are better when you deposit $25 into a bank, but the prize is not as significant. But at least you can get your money back.

Ultimately, the prize-linked savings program in South Africa was shut down because it was determined to be unlawful. But here in the United States, states and federal governments are making way for the potential for more accounts. It might take some time, but eventually, banks like Citi, Wells Fargo, and Chase could be jumping into the game.

In theory, banks would not need to charge fees for these accounts because they will be big money-makers for the institutions. As of September 30, 2014, J.P. Morgan Chase Bank was holding $1,377,661,000,000 in customer deposits, which would include interest-bearing and non-interest-bearing accounts. The bank spent $210,000,000 in interest on deposit accounts that quarter. That’s an average annual interest rate of about 0.00375%. Banks can profit on accounts that don’t pay interest — these are basically free loans from consumers to the institutions. They can use the deposits to earn a low interest rate. With interest-bearing accounts, banks pay the profits back to consumers, but they can keep more of the profit by paying a larger amount of interest to a much smaller number of depositors.

That’s how it would work out if each bank ran its own program. But like lotteries, an outside organization could handle the management of the prize accounts, which means that like multi-state lotteries, the funds are pooled and prizes are awarded across financial institutions. That’s where Save to Win comes into play.

How to open a prize-linked savings account.

It isn’t simple today.

To open account, first, you need to be a resident of one of the states that currently offer these prize-linked savings accounts: Michigan, Nebraska, North Carolina, or Washington. Then you must be a member of a credit union that offers a partnership with Save to Win, which seems to be the only lottery service catering to credit unions so far. For the most part, you won’t be able to open an account online. First, you’ll need to become a member of a participating credit union if you aren’t all ready and if you qualify. Some credit unions allow online applications. You will almost always need to visit or call the credit union to open a 12-month CD account linked to the Save to Win program.

Programs like these will continue to expand as national banks and credit unions begin taking advantage of the new law that allows these accounts in national financial institutions, both banks and credit unions. I expect that as the programs grow, they will be accompanied by significant advertising campaigns designed to get new customers in the door, appealing to the communities that banks expect would be most likely to respond to lottery-based promotions. In other words, this could be a way for banks to make profitable entries into low socio-economic status neighborhoods, something the financial industry has avoided.

To find a participating credit union in the four listed states, visit the Save to Win website. Frequently mentioned alongside Save to Win is SaveUp, a for-profit company that offers prizes to customers who exhibit positive financial behaviors, like paying off debt. That isn’t exactly the same as prize-linked savings accounts, but it follows the theory of treating customers like children (through financial rewards) to train better financial behavior among Americans.

Do you think prize-linked savings accounts are good ideas? Would you open an account for the chance to win one a lottery like this? Or is this just another way for the financial industry to take advantage of lower-class customers?

Photo: Flickr

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At the beginning of the year, I joined another investing challenge. This was sponsored by Motif Investing, who provided me and several other financial writers and bloggers $500 to invest in strategies each of us would choose. Like last year’s Grow Your Dough competition, this is a relatively short time horizon for me. In 2014, I invested in the brands behind some of the products I use the most: Microsoft, Google, Samsung, Honda, and Canon.

I invested using ShareBuilder, whose $6.95 transaction fees ate away ravenously at my gains both when I bought the stocks and ETFs at the beginning of the year and when I sold. This year, Motif Investing is the sponsor, so I am using that particular platform. After some time, I’ll put together a review of my experiences as a customer of Motif Investing. At this point, I can say it adds a social element to investing, allowing investors to create buckets of investments (to add to Motif’s own buckets). Investing in a bucket, either of your own creation or of someone else’s, requires paying just one fee of $9.95. And because each bucket can contain a number of stocks or other investments, it can easily work out to be a lot less expensive than ShareBuilder and many other discount brokerages.

With Motif Investing, your “friends” linked to your account on Motif Investing can comment on your investments and share their own market analyses. I have yet to decide whether this is a good thing; the financial news media is all ready full of so-called investment experts making predictions about the stock market; now everyone can fashion himself or herself an expert — though you can view someone’s investing performance as proof. If short-term investing results don’t even matter in the long run, this might as well be as useful as a gambling scorecard.

Here’s how I approached my participating in the investing challenge with Motif.

Following the precipitous slide in oil prices at the end of last year, and with the accompanying gas prices hitting lows not seen for years, I once again used some money — an amount whose potential loss wouldn’t hurt my financial condition — to make an investment where I thought I’d be able to buy low and sell high.

Using Motif’s tools, I created a bucket that focuses on energy, mostly oil and gas.

These are the investments I added to my Motif bucket at the beginning of the year, and in which promptly invested about $475:

VDE Vanguard Energy ETF
BNO United States Brent Oil ETF
BOIL ProShares Ultra Bloomberg Natural Gas
OIL ProShares Ultra Bloomberg Crude Oil
TAN Guggenheim Solar ETF
XOM Exxon Mobil Corporation

If you’ve following along with the markets, you probably have a good idea of how this strategy is working out so far. My investments at Motif are already down 13%. The price of oil keeps going down, and prospects for the immediate future look grim. A Saudi prince and the nation’s oil minister seem to be warning the world that oil is in a state of over-supply and under-demand, and we may never see oil at $100 per barrel again.

But even if this is true (although the pattern seems to point to investments always finding new highs — eventually), most commentary seems to point to the price of oil rebounding eventually. So the investments I chose may have some rocky times before recovering. If I could, I’d use further dips as opportunities to invest at an even better bargain, but this competition is limited to the initial %500, and further trades would result in more transaction fees, which I loathe.

On the one hand, investing in oil at the beginning of 2015 with an eye for a recovery by the end of the year may not have been the best choice of an investment. I am solidly in last place, number twenty out of twenty, in the competition’s leaderboard after one week. But there is a whole year ahead of us, and I tend to invest for the long term. If the big oil producers are manipulating the market’s supply to allow the smaller producers, like those behind fracking in the Untied States, to fail, eventually that strategy will change, and the traditional oil sources will want their investments to grow.

Personally, I’d like to see a variety of energy sources eventually overtake those that are damaging to the environment. I’ve included a solar energy ETF in the portfolio to reflect that. I think, though, that oil production is still a major factor in the global economy, and despite warnings about “peak oil” for decades, the resource isn’t drying up anytime soon.

You can also see the leaderboard above, if you are reading this article on Consumerism Commentary rather than on a newsreader, in email, or on another website. Follow along with the twenty of us where we go to show that stock picking is generally a bad idea in the short-term, and people are better off, if investing at all, leaving money in an index fund that tracks the stock market as a whole. If I had done that with my Motif Investing pot of $500, my account tracking the S&P 500 would be down only 1.5% so far this year.

With all the negative news about the price of oil, I figure it’s got to go up someday. Here are a few gloomy articles.

One of the investment advisers I talked to recently but together a potential portfolio for me, and it included commodities, but mostly as a hedge. I have been talking to money managers at some large banks and investment houses (Wells Fargo Advisors and Merrill Lynch) to discuss strategies for my investments, and ways to use my nest egg to my advantage. For example, my asset level will allow me to qualify me for super low interest rates on loans — but in certain circumstances. And loans might be helpful as I look more into investing in businesses, doing more work with start-ups, and helping finance a nonprofit organization.

I’m not making any changes yet, but I’m considering the options that are available to me. I don’t like the idea of anything that’s going to cost me more money, but at a certain level of assets, even those tiny management fees (expense ratios) on Vanguard’s index mutual funds add up to a lot of money lost every year due to fees.

Do you think it’s a good idea to invest in oil or other energy investments right now? What would be your choice for investing $500 with a goal of having the best returns at the end of the year? Or shall we just stop encouraging market timing completely? I know if I absolutely needed my investment at the end of one year, I’d leave it invested in cash. And a cash investment this year might beat out oil, stocks, or bonds, anyway. But I don’t think so. What would you do?

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4 More Personal Finance Rules I’ve Broken

by Luke Landes
Rules

A few days ago I shared four personal finance “rules” I’ve broken. So-called rules sell books because they provide a way for an author to be declarative and have solid opinions, even when these rules have been around for a long time, repeat already well-known concepts, or aren’t appropriate for everyone. Start saving for retirement ... Continue reading this article…

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Final Update: Grow Your Dough Throwdown

by Luke Landes
Grow Your Dough Throwdown

Throughout the last year, I’ve been participating in a friendly competition among friends. We each placed $1,000 in an investing account (or multiple investing accounts) at the beginning of the year, chose an investing strategy, and tracked progress throughout the year. I gave the initial details in the beginning of 2014. My strategy was to ... Continue reading this article…

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4 Personal Finance Rules I’ve Broken

by Luke Landes
Rules

Thumb through any book about personal finance, money management, and investing written by an expert, and you’re bound to come across a number of rules dictating financial behavior. Sometimes the author-dictators believe their rules are unbreakable and chastise those who might think differently, while other writers leave room for flexibility. In general, the more powerful ... Continue reading this article…

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2015 Federal Income Tax Brackets and Marginal Rates

by Luke Landes
Taxes

With the new year, every dollar you earn in the United States, whether the money comes from working or from your investments, is subject to being taxed by the federal government at a level higher than last year. Recently, the IRS announced the tax rates for 2015, and while the rates are the same as ... Continue reading this article…

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When Money Is Scarce: Forced Frugality and Bad Decisions

by Luke Landes
Empty Bucket

I’ll be honest. When the idea for this article struck me late last night, I had a definitive idea of how I was going to address the topic of conservation mode. But the clarity of day may have changed what I think about the idea. Throughout my life, I’ve been working with scarce resources. Now, ... Continue reading this article…

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My Annual Personal Goal Review

by Luke Landes

For the first time in several years, at the beginning of 2014, I shared my personal and financial plans for the year. I had navigated away from sharing personal data on Consumerism Commentary, leaving an opening for Naked With Cash. Over the course of the past two years, eleven readers shared their financial goals and ... Continue reading this article…

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