This blog contains some simple tips and advice from two regular guys. We're not accountants, financial advisors, or brokers, so follow, ignore, or discuss our ideas as you see fit.

Tuesday, March 17, 2009

Article: 7 New Rules of Financial Security

Posted By Paul

A great article listing new rules for financial security.

You can read the full article at:
The 7 new rules of financial security

I also thought I'd summarize them here:

Rule 1: Risk
It essentially says that you need to be very careful to make sure that invested money is available when you need it. There have been many stories of people with college or retirement funds invested in high-risk stocks that collapsed right when they needed the money.

Rule 2: Cash
This talks about having a nice rainy day fund of cash available quickly when you need it. Matt and I talk about this all the time.

Rule 3: Human capital
This was interesting, the article suggests that you not only look at risk but also the stability of your job when considering investment risk.

Rule 4: Borrowing
It essentially says to borrow cautiously. View debt as a necessary evil.

Rule 5: Housing
Says to not fall into the trap of viewing your house as a no-risk investment.

Rule 6: Diversification
Suggest a really close look at diversification.

Rule 7: Retirement
Retiring early is NOT easy to do.

Sunday, March 15, 2009

Article: Making Severance Last

Posted By Paul

As someone who has had to deal with living off of unemployment and severance pay I thought this article had some good tips:

Make your severance check last

I especially liked how they mentioned that you don't need to feel obligated to adopt an ascetic lifestyle since being unemployed is depressing enough. Very true.

Friday, March 13, 2009

CD rates lower than savings rate?

Posted By Paul

If you have been following Frugalize you've noticed that I watch CD rates and that I've set up some CD ladders as a savings vehicle (to read earlier CD ladder posts click here).

I was intrigued by the fact that at ING currently a 12-36 month CD earns an APY of 1.5%. Yes that's a pretty low number, but what really intrigues me is the fact that the current APY for a normal savings account is 1.65%.

I don't have a ton of experience but I've never seen CD rates go LOWER than a normal savings account.

My thought is that if you are expecting your savings account to drop even further, then locking in a CD at a lower rate might actually seem appealing.

I found an article on Get Rich Slowly that discusses this:

CD (Certificate of Deposit) Rates: Current CD Rates at Online Banks

One thing is for sure, these are very strange times.