This week, I start the roundup with Redeeming Riches’ 10 Guiding Principles For The “New Retirement.” I’m only slightly disappointed that Jason didn’t use the line “this isn’t going to be like your father’s retirement.” I never tire of the old cliches. The first new principle? Don’t stop working. That’s right, you won’t just grab a beer and slack off for the next 20 years, you might just have a whole second career ahead. Both to stay out of trouble, and to keep a bit of income coming in.

By coincidence, another 10 list – this one 10 Key Characteristics of Debt-Free People (of Modest Means) by my fellow Money Maven Len Penzo. I love these kind of lists, they make you stop and think how you might change your own behavior to improve your situation, in this case getting out of debt.

The last of the lists this week was BSimple’s 8 Financial Seeds to Plant Now to Simplify Your Finances. An inspiring list of how to start some simple efforts which can benefit you in a big way in the future. BSimple doesn’t promote himself as a religious blogger, but the parable of the mustard seed is easy to see in this excellent article.

Next we are introduced to the Big Difference Between Average and Median Net Worths. Turns out, the average American household net worth is $435K, but the median is only $91K. The observation itself is from Dr Thomas Stanley’s blog, with Free Money Finance offering some of his own commentary. A good read.

Last this week, Tax Girl invited a guest poster to discuss Are Expiring Tax Cuts a Good Thing? Michael Rozbruch gives an overview of just what will happen when the tax cuts expire, if they are allowed to do so. We still have nearly 4 months to see what happens.

Happy Labor Day!

Joe

• This past week's PF reading
• An End of April Roundup
• This Week's Financial Roundup
• Weekly Reading Roundup
• Another Weekly PF Roundup

• Therabath Refill Paraffin Wax, Scent Free, 6 lbs
• My Take: H&R Block Tax Cut
• Announcing The Winners Of Tax Cut Premium Online.
• After Six Long Years.....Bush no more.
• The Friday Gathering: Japanese Maple Edition

“Prediction is very difficult, especially if it’s about the future.” This quote is often incorrectly attributed to baseball legend Yogi Berra, but attribution should go to scientist Niels Bohr. This is my longwinded way of saying I am not making a prediction either way, the cartoon just struck my fancy.

Joe

• Mindset Check - Are You Ready to Lose Weight?
• 3 Truths About Men by Steve Harvey
• Save as They Say, Not as They Do
• Professional Blogging Roundup - Halloween Edition
• Getting Acquainted With Earning Online.

With all the press about people not saving enough for retirement, or much else for that matter (the median household net worth is $91,304, including home equity) I’ve been thinking more about how people prioritize their spending. Debt taken on for college tuition has always been thought of as “good” debt. I’ll pass on that judgment and just call it a sometimes necessary evil. But for whom, the student or the parent? Should parents pick up the tab? There are studies out there for nearly everything, I wonder if any study has been done on whether students do better for the fact that they had their schooling paid for, therefore not needing to work while going to school, or if they did better having their own money at stake.

We have been fortunate, by having a child later in life, we were able to start saving from the day she was born and will be able to handle those bills by the time she’s in college. Others might be tempted to tap their equity lines or take early retirement account withdrawals to put their kids through college. I’d suggest not doing this if it puts your own retirement at risk, you don’t get a second chance to save.

Joe

• Funding Matched 401(k)
• Retirement Savings Ratio
• The Money Genie Grants 3 Wishes
• One More Refinance
• This past week's blog reading

• Starting Kids Out on the Right Financial Track
• A saving tsunami
• Should You Invest In An Ivy League College Education?
• 8 Tips on Saving Money Without Scrimping
• Tips for Furnishing Your First Place

This week we start with a post by Roshawn Watson, My Big, Fat Trashy Home: The Fall of the McMansion. In this article, Shawn does a great job explaining the origins of these homes and how they cost you far after the purchase is over. The article hit home for me as we quickly discovered that we weren’t really using all the space in our house (just over 3000 sq feet) after we moved in. Do we really need a formal dining room, and what’s with that living room, when the family room is where we hang out? On the flip side we had a neighbor move away from a similar size home to one twice the size. Really. Me, I’m looking forward to the downsize, a nice 2400 sq feet.

JLP at All Financial Matters asked, Should We “Means Test” Social Security? This really is a tough question. Is social security meant to be insurance against poverty or a defined benefit retirement plan? He links to a video that states for 55% of retirees, social security is their main source of income. Remember, social security is already a progressive tax, the higher earners paying more for a lesser benefit. (A $60K earner will not see twice the benefit a $30K earner will upon retiring. )  The system is broken, and no, I don’t have any better idea for a fix.

Money Fund discussed the 6 Steps to a Satisfied Retirement. The post summarizes a consumer reports survey of 24,000 retirees, so it’s a distillation of quite a bit of experience and a good read.

My fellow Money Maven, Neal Frankle posted 401k Performance – 5 Tips To Turbo Charge It Now. With fewer companies offering a traditional defined benefit plan, and no one really sure if social security will be there when we need it, the 401(k) is now the primary retirement account most of us look forward to.

Next, Mike at The Oblivious Investor explains TIPS vs. Nominal Treasury Bonds. I don’t know when inflation is coming back, but it’s likely to return at some point given the trillions the government has basically printed and will need to over the next year. TIPS can help protect the value of your savings, keeping up with inflation.

Until next week.

Joe

• Roth Mania!
• Pre Tax vs Post Tax savings
• A Post-Graduate Roundup
• A Bastille Day Roundup
• Money Merge Account Analysis Pt 15

• Questions and Answers on Social Security
• Social Security Spouse Benefits - Key Concepts
• Social Security Benefits Threatened by Wall Street
• Book Review: What Your Contractor Can't Tell You: The Essential Guide to Building and Renovating by Amy Johnston
• Reviewing My Social Security Statement in a Time of Economic Insecurity

Even with the 30 year fixed rate mortgage dropping to 4.42% average, sellers are still struggling to move their houses, and new home sales have fallen to new lows.

• Housing Bubble or Subprime Meltdown?
• Bad Paper, and Lots of it
• Graduates Job Market
• Buying versus Renting
• Fun With Statistics

• Remodel Versus Move
• Selling Your Home In Wounded Real Estate Market
• Introduction to Mortgages pt 3 of 5
• Tiny Houses: A Mortgage Free Housing Solution
• How To Pay Off Your House In 3 Years!

It seems this is not such a simple question. What do you prefer, a stock that grows, long term, doubling in price every 7 years or so (this is an average 10% annual return) or one that grows more slowly, say at 5% per year, but offers a 5% dividend? I’ve seen arguments on both sides, those who take the dividend as a sign of strength, reflecting steady profits and the company disbursing a share of those profits with its shareholders each year.

I’ve also heard those who say that a dividend is akin to a company saying, “We have no idea how to invest this money. We don’t intend to expand our reach either geographically or by delving into new markets. Instead of keeping it on our books and waiting for the next opportunity, you take it, shareholder.”

Legendary investor Warren Buffet, CEO of Berkshire Hathaway has never issued a dividend and ha not authorized a stock split (now there are B shares which are reasonably priced, not quite a split). The A shares trade at over $110,000 per, with a cash per share of nearly $17,000. No one is pushing Mr. Buffet to declare a dividend, that I know. Yet, Apple, trading at $240 or so with $26/share cash on the books has all kinds of speculation what they will do with this cash. A dividend? A takeover?

What do you think? Should we look more favorably on companies that issue regular dividends or should we just trust them to reinvest the money?

Joe

• This past week's blog reading
• Mad Money, Watch TV, Get Rich
• ETF'ed
• 401(k) vs IRA Deathmatch
• Money Merge Account Analysis Pt 34

• The Little Book of Common Sense Investing by John Bogle | Book Review
• Plunged More Cash Into My DRiPs Today, Made it to #83 in Wisebread's Rankings
• The Pros and Cons of Pre-Paying a Mortgage
• Review - Sharebuilder
• Money Mavens: Pay Off Your Mortgage or Invest Your Money?

As we’ve seen, the estate tax expiration had an impact of the families of a number of people who passed this year. But this was a one year deal, next year if congress doesn’t fix this, the tax comes back to levels not seen in nearly a decade.

That’s not all. When Bush was in office, income tax rates were cut under two bills, the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001, and the Jobs and Growth Tax Relief Reconciliation Act of 2003. Before EGTRRA, and back in 2011, will be a lowest rate of 15%, no 10% bracket. To summarize, our current rates include six tax brackets; 10%, 15%, 25%, 28%, 33% and 35% as income rises. If no extension or new tax rates are passed into law you will see a return to 15%, 28%, 31%, 36% and 39.6%. This doesn’t look too bad, but I thought President Obama promised not to raise rates on those making less than $250K. This looks like the lowest earners will see arise, doesn’t it?

The child care credit is also due to expire. This credit was raised to $1000 per child, but is due to drop back to $500. This credit phases out for a couple making over $110K or a single person over $75K. Well below that $250K, Mr President.

Next, the Capital Gain Rates, today the long term (over 1 year holding period) gains as well as qualified dividends are taxed at 15% maximum. In 2011, the cap gain rate is 20% and dividends taxed as ordinary income. Ouch.

The countdown starts, just over 4 months to go to fix the potential train wreck 2011 will bring.
Joe

• Last Chance Millionaire
• Credit Card Reform
• Year End, Start Planning
• More Roth Magic
• Another Thought on the Estate Tax

• Year End Income Tax Guide (Part 1)
• Tax implications of the stimulus bill
• Tax Law Changes In Store For 2010.
• Get an $8,000 Tax Credit for Buying Your First Home in 2009
• How to Get Tax Credits and Tax Deductions by Saving For Retirement

Effective yesterday, the CARD (Credit Card Accountability, Responsibility, and Disclosure) ACT’s next phase went into effect. From the Federal Reserve, here is a summary of the changes you should know about:

Reasonable penalty fees
Let’s say you are late making your minimum payment.

• Today: Your late payment fee may be as high as $39, and you likely pay the same fee whether you are late with a $20 minimum payment or a $100 minimum payment.
• Under the new rules: Your credit card company cannot charge you a fee of more than $25 unless:
  • One of your last six payments was late, in which case your fee may be up to $35; or
  • Your credit card company can show that the costs it incurs as a result of late payments justify a higher fee.

In addition, your credit card company cannot charge a late payment fee that is greater than your minimum payment. So, if your minimum payment is $20, your late payment fee can’t be more than $20. Similarly, if you exceed your credit limit by $5, you can’t be charged an over-the-limit fee of more than $5.
Additional fee protections

• No inactivity fees. Your credit card company can’t charge you inactivity fees, such as fees for not using your card.

• One-fee limit. Your credit card company can’t charge you more than one fee for a single event or transaction that violates your cardholder agreement. For example, you cannot be charged more than one fee for a single late payment.

Explanation of rate increase

• If your credit card company increases your card’s Annual Percentage Rate (APR), it must tell you why.

Re-evaluation of recent rate increases

• Today: Your credit card company can increase your card’s APR with no obligation to
  re-evaluate your rate increase.

• Under the new rules: If your credit card company increases your APR, it must  re-evaluate that rate increase every six months. If appropriate, it must reduce your rate within 45 days after completing the evaluation.

Note: A number of other rules went into effect on Feb 22, and you can read about it at the Fed’s site, New Credit Card Rules Effective Feb 22.

• Weekly Roundup - The Credit Card Edition
• Credit Card Reform
• Zero Interest Loan
• Evil Credit Cards
• Credit Card Big Brother

• Flashback: Credit card condoms? Hey, whatever it takes!
• Paying Too Much In Credit Card Fees?
• Getting Out Of Credit Card Debt
• How To Fight Credit Card Rate Increases.
• What is your Credit Card Costing You?

Let’s start with one list I couldn’t overlook, 50 Best Finance-Related Movie Quotes of All Time. I’ll share my favorite one:
(From) The Pursuit of Happyness (2006)
Martin Frohm: “What would you say if man walked in here with no shirt, and I hired him?”
Christopher Gardner: “He must have had on some really nice pants.”

Next, are you getting overwhelmed? If so, BSimple has the Cure for the Financially Overwhelmed. Steps that you can take to simplify your finances and reduce your stress in this department.

I enjoyed the article Money Matters, But Money Isn’t Everything. This is one of the recurring questions and discussions bloggers enjoy. In the end, the issues are not so simple, it’s not a matter of “would $100000/yr make you happy?” even though 99% of the world appears to live on less than this. Part of it is relative, if you make less than your friends and neighbors, you may not be as happy regardless of the absolute amount. I often wonder how one can measure happiness, people are so complex, can they even report their own feelings accurately for such studies?

Next Neal Frankle tells us What to do when your wallet has been lost of stolen.One bit of advice I’d add myself, before you lose it or have your wallet stolen – photocopy everything in it. (Well, maybe not the cash, but everything else, front and back.) It will help you know who to call and what account to cancel.

Craig Ford at Money Help for Christians post a list (I told you, I am a sucker for lists) 31 Signs that it is Time to Start Budgeting. The bar is set pretty low here, if you identify with just 3 items on the list you should consider a formal budget. Me, I am off scott-free. I am guilty of one sign (5) You try to tell your kid “no”, and [she] looks at you like you just swore in front of her. I am still learning to say no more often.

My friend Jeff at Deliver Away Debt asks himself Am I a Poser Now? You see, he started hacking away at his debt with pizza deliveries, and for a number of us, provided some very entertaining tweets regarding his customers and how they tipped. Now his day job has him working a lot of overtime, so no time for deliveries. Poser? No, Jeff, you are still an inspiration to those who think there’s no way out.

And last this week, Len Penzo’s A Little Fun with My Dog and Some Peanut Butter. I read this post, and I’m thinking you had to be there to find it funny. I’ll trust Len on this one.

• A Fourth of July Roundup
• An Olympian Finance Roundup
• A Tax Deadline Roundup
• PF Bloggers' Weekly Roundup
• The Weekly Roundup

• Best of the Rest: Ch-Ch-Changes Edition
• Money Hacks Carnival #18 at My Investing Blog
• Five Lessons I Learned From My Own Frugal Dad
• Most People that Tell You They Don’t Want to be Wealthy are Lying
• Ratings and Listings of the Best Places to Retire

One bit of news out this week was that China is now the world’s second largest economy, ahead of Japan, and second to the US.

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• John Kerry's Flip Flop
• The Derivative Bomb?
• POTUS' Peter Pan Complex?
• Graduates Job Market
• The Next Depression Babies?

• ESPN World Cup 2010 Online and TV Schedule
• 10/28 - ETF Trading - IWM, UWM, EWC, EWT, EWY
• How Your Lifestyle Choices Can Create Positive Change In The World.
• 07/12 - ETF Trading - XLU, SDP, SPY, SDS
• Weakonomics Web Junction: Economic Comics