January issue of SMI just released!

The January 2010 issue of the SMI newsletter has just been posted to the website.

SMI web members following our Fund Upgrading strategy are being advised to make a pair of mutual fund changes this month.

Each January, we unveil new recommended stock and bond allocations for the new year. This year we have a couple of significant changes recommended for readers.

We are also introducing some new features with this month's issue. This month's editorial explains the new optional inflation hedges we've created to be used as a supplement to our core investing strategies.

We also are unveiling a new Diversification Calculator/Tool to help web members determine the optimal allocation for their portfolio.

As always, there's also a host of other timely and informative content. For example, we explain this month why 2010 offers a unique opportunity to convert to a Roth IRA, a move that could potentially save you tens of thousands of dollars in taxes over your lifetime. This and much more is available in the January issue.

Not a web member yet? Today's a great day to join and instantly gain access to all of the new January content and mutual fund changes!

PS - There's still time to give the gift of SMI, and send a gift via Prison Fellowship's Angel Tree program at the same time! Click here for details.

Posted by Mark at 11:34 AM | Comments (0) | TrackBack
Category(s): SMI General Announcements

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The Ghost of Christmas Budgets Present

Just one more week until Christmas. How's your shopping coming along? Better yet, how are you doing on your budget?

Me? We're doing great. We had 1/2 of it done before Halloween. Years ago, I decided it would be less stressful and therefore more enjoyable if we got a jump start on our shopping. So when September rolls around, my wife and I start using our date nights to leisurely talk about ideas and peruse the offerings.

Something that also helps is that we limit our children to 3 presents each, because Jesus got 3 presents on the first Christmas. Furthermore, we cap the total price per child. These safeguards keep the budget in check and the focus on Christ.

Plus, when you've decided early on what presents you're getting for your loved ones, you have plenty of time to track down the best deals, which often times is often just a mouse click away.

We have learned from Ghosts of Christmas Budgets Past but maybe you have some tricks of your own? Consider this "Budget Check" a collective warning from the Ghosts of Christmas Budgets Present.

Posted by Matthew at 9:07 AM | Comments (0) | TrackBack
Category(s): Family Finances

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The Ghost of Christmas Budgets Past

In our December 2008 Level 1 article, we reviewed Mary Hunt's Debt-Proof the Holidays. My favorite parts of the book were the stories people had written about all the various traditions they celebrate. One such tradition:

A balanced Christmas: A tradition in our home is to limit our gift-giving to four specific categories. Each child receives a gift of Love, which is something homemade; a gift of Warmth which is something like socks or a lap blanket; a gift of Knowledge such as a science kit, books, or educational DVD; and a gift of Joy - that one thing they really want. This has helped to keep our Christmas balanced, our budget small, and our gifts meaningful.

What a great way to add meaning and fiscal control to your Christmas. But homemade and inexpensive are not synonymous.

Take for instance Andrew's rehashing of the great Christmas debacle of '97. If you've got money to burn, that craft is for you.

And then there was 2006 - Year of the Dog. My sister-in-law had spent significant time and money on homemade cookies, candies, and treats. We're talking chocolate-covered candy canes, butterscotch cookies, fudge brownies, the whole nine yards. Unfortunately for us, these were the days when we gave Gertie, our pug-mix, run of the kitchen while we were gone. You guessed it... we came back from some festivities to discover an ill-looking dog resembling Gertie curled in the corner and an empty platter with nary a crumb for the humans.

As you probably know, dogs and chocolate a happy dog do not make. So you're probably thinking we took her to the vet and got a fat bill on the way out. If so, you must not read much of what I write because I'm too cheap for that (plus, I wanted to incorporate a money saving tip into this post). Turns out, a cap full of hydrogen peroxide down her gullet and minutes later, we got all our treats back! To this day, butterscotch and Matthew a settled stomach do not make.

So in your efforts to keep spending down this year, embrace the ghosts of Christmas budgets past. Listen to them and learn what you're getting yourself into. Who knows, you may hear them moaning, "Administer peroxide outdoors."

Posted by Matthew at 11:58 AM | Comments (0) | TrackBack
Category(s): Family Finances

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Work-at-home scams update

Our June cover story, "Making Money From Home," reported on the growing problem of work-at-home scams.

A Google search on "work at home" yields about 1.8 million results, some touting intriguing pitch lines such as "Earn $500-$1000 per day" and "Mom Makes $5K/Month at Home." Guess what? Most such ads are simply scams dressed up in work-at-home clothing....

[One of the most common scams], promoted on hundreds of web sites, goes by many names: Google Money Tree, Google Profits, Google Money System, Fast Cash with Google, Google Home Business Kit — you get the idea....

The pitch varies from site to site, but is often something like this: "Hi! My name is Cindy Ward, and I'm a stay-at-home Christian mom in Greenville, South Carolina. I've discovered how to make a great part-time income using my computer from home! I work about 15 hours a week and bring in an extra $1,300/week on average. I can stay home with my three wonderful kids and still make money, and anybody can do it!" (One site with the "I'm-a-stay-at-home-Christian-mom" pitch advertises heavily on conservative blogs, targeting conservative Christians who are ripe for taking the bait.)

Now, Google has filed a lawsuit against Utah-based Pacific WebWorks and 50 other unnamed companies alleging unauthorized use of the search-engine company's name.

From Google's complaint (PDF), filed this week in U.S. District Court in Utah:

At the heart of the scheme is a false representation that consumers can participate in a Google-sponsored program that will allow them to make hundreds of dollars a day working at home performing a simple task that requires no particular experience or qualifications.

Although the program is often advertised as “free,” in fact consumers must pay an "instant access" fee for online access to a members-only portal, or a "shipping and handling fee for a DVD, that, they are told, will explain how to make money through the program. Consumers must pay the fee by submitting their credit or debit card information through a website....

[However, c]onsumers are not enrolled in any program that provides opportunities for generating income. Instead, they are subjected to continuing monthly fees that often exceed $50 and range as high as $79.90 After discovering that they have been duped, consumers typically find it difficult, if not impossible, to cancel the continuing charges, or get a refund of their money.

According to a blog post published Tuesday on Google's official site, the company is taking steps to remove scam-related URLs from its search index.

That said, we can't guarantee that schemes like these won't pop up...someplace else online — either on a different network or under a different name.... [So] you should be skeptical and review any offers online before sending any information, and always be on guard when presented with an offer that seems too good to be true....

Names to be wary of: Google Adwork, Google ATM, Google Biz Kit, Google Cash, Earn Google Cash Kit, Google Fortune, Google Marketing Kit, Google Profits, The Home Business Kit for Google, Google StartUp Kit, and Google Works.

At a Senate hearing in September, Jon Leibowitz, head of the Federal Trade Commission, offered (PDF) specific information on Google Money Tree:

[This and similar alleged scams] simply lure consumers into divulging their financial account information using the false promise of a lucrative work-at-home opportunity. Consumers who purchased the Google Money Tree work-at-home kit expected a small charge of $1.99, but what they got were months of recurring monthly charges they never authorized.

For legitimate work-at-home ideas, see SMI's "Making Money From Home."

Posted by Matthew at 12:39 PM | Comments (0) | TrackBack
Category(s): Family Finances

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Christmas comes early — 35% discount on The SMI Handbook

With over 100,000 copies in circulation and now in its 5th edition, the Sound Mind Investing Handbook is a masterpiece on simplifying investing and personal finances. But rather than paying the retail price of $24.99, we're happy to announce a 35% discount offer. You'll pay just $16.24 + $3.50 for s/h.

To aid you in your Christmas preparations, we've also just added a new Gift Book Order Form. Now you can easily order right from your computer. We'll even include a personal gift message from you to the recipient when it is sent.

Books are shipped on the next business day (if not sooner), so you still have time to send a gift copy of the book Ron Blue calls a "must read for anyone interested in investing in very uncertain economic times," Randy Alcorn calls an "attractive easy-to-follow investment guide written in plain English" and Amazon.com shows as having a perfect 5-Star rating!

We trust that your loved ones (or maybe even yourself!) would benefit from receiving The Sound Mind Investing Handbook. And now ordering gift books is easier than ever.

PS - SMI Web Members get an additional 5% off the already discounted price. Memberships are only $8.95 per month, and you can cancel anytime — no long-term commitments. Try it today!

Posted by Matthew at 3:30 PM | Comments (0) | TrackBack
Category(s): SMI General Announcements

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Thrifty couples are the happiest

New research from the National Marriage Project at the University of Virginia shows that "consumer debt...plays a powerful role in eroding the quality of married life."

Here are excerpts from the Project's report, "Thrifty Couples Are the Happiest" (PDF), authored by Jeffrey Dew, an assistant professor of Family, Consumer, and Human Development at Utah State University:

Consumer debt fuels a sense of financial unease among couples, and increases the likelihood that they will fight over money matters; moreover, this financial unease casts a pall over marriages in general, raising the likelihood that couples will argue over issues other than money and decreasing the time they spend with one another....

Consumer debt is also an equal-opportunity marriage destroyer. It does not matter if couples are rich or poor, working class or middle class. If they accrue substantial debt, it puts a strain on their marriage.

Assets, on the other hand, sweeten and solidify the ties between spouses. Assets minimize any sense of financial unease that couples feel, with the result that they experience less conflict....

[C]onflict over money matters is one of the most important problems in contemporary married life. Compared with disagreements over other topics, financial disagreements last longer, are more salient to couples, and generate more negative conflict tactics, such as yelling or hitting, especially among husbands.... Not surprisingly, new research that I have done indicates that conflict over money matters predicts divorce better than other types of disagreement....

Clearly, money matters play a crucial role in shaping the quality and stability of married life in the U.S.... In particular, couples who are wise enough to steer clear of materialism and consumer debt are much more likely to enjoy connubial bliss.

After reading the article, I've decided to give a newlywed couple I know (married just last weekend) a copy of The Sound Mind Investing Handbook. In light of Professor Dew's research and similar studies, the Handbook would seem to be a great way to guide them toward a long, healthy, and happy marriage.

Posted by Joseph at 3:10 PM | Comments (0) | TrackBack
Category(s): Family Finances

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IRS announces 2010 IRA limits

The IRS has released its "IRA Contribution and Deduction Limits" for tax year 2010.

The limits separate taxpayers who are allowed to contribute to a Roth IRA from those who are not. They also mark the line between those permitted to make deductible contributions to a "traditional" IRA and those who are not allowed to do so.

Next year's limits are in table below.

Note: The income levels shown reflect "modified adjusted gross income," which the IRS defines (but not too clearly) here.

Posted by Matthew at 8:40 AM | Comments (0) | TrackBack
Category(s): Taxes

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Longer-term thinking about money

"Investing is simply giving up something now in order to have more of something later." So writes Austin in the Sound Mind Investing Handbook.

It's a simple concept, but one that's difficult to keep in the forefront of our minds because human nature doesn't lend itself to focusing on the long-term. Today and tomorrow seem much more real and important to us than 10 or 20 years from now.

Duke University behavioral economist Dan Ariely, author of Predictably Irrational: The Hidden Forces That Shape Our Decisions, offers a few helpful ideas for longer-term thinking about money in the video below from BigThink.com.

Partial transcript:

[We] went to a Toyota dealership and we asked people, "What will you not be able to do in the future if you bought this Toyota?"

Now, you would expect people to have an answer. But people were kind of shocked by the question. They never thought about it before. So, the most we got was people said, "Well...if I buy this Toyota, I can't buy a Honda."

So, they were making a substitution from the same product in the same time, but in reality, this is not a substitution. They [should be] substituting something in the future. In the future, I will have to give up two weeks of vacation and 70 lattes and 1,700 books. I don't know what exactly the translation is — but when we do consume something now, something else has to give at some point. What is this thing? What is this value of price? Very hard to think about it.

Dr. Ariely also explains how to make better decisions about spending by making the "pain of paying" more apparent.

Imagine you go on a cruise to Alaska and you can either pay six months in advance, or the moment you get off the ship. It's much more reasonable, economically, to pay the moment you get off the ship. But how much would you enjoy the last day of the cruise? It will be kind of miserable knowing that tomorrow you have to pay all of this money.

We [try to] reduce the pain in paying. So, for example, credit cards are wonderful mechanisms to reduce the pain of paying. If you go to a restaurant and you are paying cash, you would feel much worse than if you were paying with credit card. Why? You know the price, there's no surprise, but if you're paying cash, you feel a bit more guilt. It's a bit more difficult. It's more painful to part with your money. With a credit card, eh — it's another time....

Imagine if you had envelopes and your envelopes were telling you how much money you have in each category for the rest of the month. You had an envelope for coffee, you had an envelope for restaurants and you had an envelope for grocery. Now, when you take month out, you also see how much what you have left is shrinking, and that will actually increase the pain of paying more.

Now, I don't think we should go around life and being miserable all the time and feel the pain of paying. It's a question of what categories we want to spend more on and what categories we feel that we are spending too much on and we want to cut down.

It is remarkable that these matters, considered simple common sense just a few generations ago, are now the subject of academic discussion and inquiry. But nonetheless, it is a good thing that "behavioral economists" are helping people understand how to plan their finances and spend responsibly.

Posted by Matthew at 2:50 PM | Comments (0) | TrackBack
Category(s): Investing Principles

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Online saving tips roundup

If you're shopping online anyway, you may as well save some money while you're at it. Here's a quick overview of some Internet-based money savers:

Bing Cashback: Search for an item, and Bing Shopping will display the different stores' normal price, as well as the "Cashback" price (i.e., store price minus the Bing Cashback amount). You can then request your Cashback amount about 60 days after your purchase as long as there is at least $5 in your Cashback account. Cashback discounts start at 2% and go on up. Combine it with a store with already low prices like Wal-Mart, and savings can be even more substantial. UPDATE: Bing Cashback has made some changes and not for the better.

Invisible Hand: Invisible Hand is a notification add-on for your browser that shows you the cheapest price it can find of an item you're viewing. Simply put, it's the lazy man's shopping comparison tool. Say you're on Amazon looking at a toy kitchen for your 4-year-old daughter (shhhhhh!), you'll notice a bar drop down from the top of your browser showing a cheaper price at Meijer.com. Voilà! But be careful, it's not perfect. It doesn't factor in shipping or any other discounts you might get (such as Bing Cashback).

FatWallet.com and Ebates.com: These are two more cashback sites. Similar to Bing Cashback, these free membership sites allow you to search for items, then get the advertised cashback sent to you on a periodic basis. Unlike Bing, they also list online coupons. Ebates offers refer-a-friend sign-up bonuses and FatWallet has a forum for sharing even more money-saving ideas. (That said, it appeared to me that Bing's cashback percentages were higher.)

LogicBUY.com: LogicBUY.com also aims to be your one-stop shop for all things savings, although it doesn't offer a cashback program. It's claim? "LogicBUY offers the most comprehensive coupon codes, deals and price drops from hundreds of popular merchants to save you the most money possible." It also offers social and sharing features on deals, coupons, reviews, and rankings. While I wouldn't consider it the only destination, LogicBUY seems like a worthy stop on your road to savings.

That should be enough to get you going. But if you're hungry for more, NYT's "Site-Hopping for Holiday Savings" offers a nice overview of additional portals, including those from Chase, Citi, and Bank of America.

Bottom line: With so many online options for the savvy shopper, there's just no reason to pay full price anymore.

Posted by Matthew at 9:43 AM | Comments (0) | TrackBack
Category(s): Family Finances

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Current Sector Rotation fund up 10% in three months

SMI's Sector Rotation strategy is a high-risk, high-reward approach to investing in sector funds (funds that are focused on narrow slices of the overall market). Many SMI web members allocate a small portion of their overall portfolio, often 5%-15%, to Sector Rotation in pursuit of the high returns it has provided over time.

Our current Sector Rotation recommendation has been held three months now, and is sporting a 10.0% return over that span. Our last holding was held four months and gained 19.3% over that period. Over the past 19 years (1990-2008), Sector Rotation has averaged gains of 24.2% per year.

To learn the identity of our currently recommended fund, as well as all the details of SMI's Sector Rotation strategy, become a Web Member today!

Posted by Mark at 10:50 AM | Comments (0) | TrackBack
Category(s): SMI Advanced Strategies

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