Blog Archives

The Crisis That Doesn’t Really Concern Anyone All That Much

Beyond Buy-and-Hold #78

By Rob Bennett

It’s an economic crisis!

We all say that. We use that word. But we don’t really believe it applies.

Actions speak louder than words.

The Republicans are still yelling at the Democrats. The Democrats are still yelling at the Republicans. If we thought it were a genuine crisis, we would pull together and get about doing whatever it took to solve the crisis.

We have never made a serious effort to figure out what caused the crisis. Something to do with bankers. Or with mortgages.

Huh?

Do we seriously want to know the truth?

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Does College Prepare You for Self-Employment?

By Kevin M

I realize that this question violates many, many people’s equilibriums—what ever the career issue, there’s a collective sense that a college education is the answer. That, I believe, is the exact reason why the question must be asked.

It’s no secret—the days of lifetime job security with a large employer are fast coming to an end. A job isn’t just harder to find, but it’s also increasingly hard to keep. Technology and off-shoring of jobs have turned this into a long term trend. A lot of people are clinging to the notion that as the economy improves the job market will “go back to normal”. Don’t be on it. Employers who survived the Great Recession have learned how to maintain and even grow their businesses with fewer employees.

The truly relevant question right now is what should we do in response. To default to what we know from the past could be a strategic error.

We have to create our own jobs

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The “Secret” to Self-Employment Success

By Kevin M

Ask anyone who’s succeeding in their own business the question, ”What is the most important trait for success?” and you’ll probably get a few different answers. Education, talent, connections, being in the right place at the right time… luck! I think there’s at least some merit to all, but while each of them might represent a step in the right direction at some point in the process, none—with the possible exception of talent—are likely to sustain you over the long haul. And even talent won’t get the job done if it isn’t consistently applied.

All of us have an opinion as to what drives success, but if I have to pick one trait that stands above the rest, it’s relentlessness. I credit that trait as the single most important one that enabled me to go from washed-up mortgage originator to a self-employed professional blogger in under three years.

I had no special talents, no specific education and no connections that would have made the journey worth considering, let alone likely, but the one thing that I did have was a commitment to succeed at it no matter what happened.

Why is relentlessness so powerful?
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The Health Insurance Adventures of an Entrepreneur

By Marshall Davis

This month, my wife and I celebrate six years of self-employment. Another way of saying this is we are celebrating six years of having to pay 100% of our health insurance premiums and related costs. Boy, has it been an educational experience and quite the adventure!

The Beginning

In February 2006, my wife and I could take it no more! We were both employed by a large corporation, stuck in cubicles doing jobs we didn’t like. On the surface, it was a great place to work. The pay was decent, there were holiday and annual bonuses to look forward to, and the health benefits were pretty darn good. What our jobs were lacking was any sense of enjoyment or fulfillment, so something had to be done.

After talking about it for a few months, we decided to quit our jobs and enter the entrepreneurial world. Neither of us had previous self-employment experience, but that wasn’t going to stop us from breaking out of the corporate world and jumping into the deep end, and start making a living on our own. This meant that we were kissing those great health care benefits goodbye, and we had to figure something out to replace them.
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How Big An Advance Is Valuation-Informed Indexing Investing?

Beyond Buy-and-Hold #77

By Rob Bennett

Wanna know a secret? Valuation-Informed Indexing is works BETTER than Buy-and-Hold.

Not a little bit.

A lot.

I have come to believe that that’s one of the biggest problems I face in my effort to bring the Buy-and-Hold Era to a close. Say that Valuation-Informed Indexing represented just a small advance—in that case I think the Buy-and-Holders would be happy to make the change. Everyone wants to learn how to invest more effectively.

The problem we face is that Valuation-Informed Indexing is so much better in so many different ways that discussion of it is perceived as a threat by the Buy-and-Holders. When one strategy is so clearly superior to another, the idea of compromise goes out the window.

I cannot change the realities. We are stuck with the fact that we now know about a way to invest that will permit us all to earn far higher returns while taking on far less risk. Woe is us! What a terrible fate we have been asked to suffer!

Spreading the word about Valuation-Informed Indexing

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How Much Can You Save by NOT Owning a Car?

By Kevin M

Pssst…wanna lower your cost of living—I mean really lower your cost of living and do it for good?

Ditch your car. No, I’m not kidding, ditch your car!

Most people cut costs by trimming along the edges—clipping coupons, reducing eating out, eliminating vacations and the like. But sometimes that isn’t enough. You can cut all of those and still end up with a tightly stretched budget, one that doesn’t allow much room for savings and investment, for debt pay down and payoff, or for a plunge into the career unknown—a major theme on this blog.

It comes down to a choice between micro- and macro-frugality–do you cut your smaller expenses across the board, or do you target two or three of the biggest? For most people, housing is the biggest single living expense, but cars are a comfortable second. For many, cutting or eliminating car expense is far easier than making the same choice on a home.

How much can you save by not owning a car?

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Variable Rate Mortgage VS Fixed Rate Mortgage: Which Best Solution is Best for You?

Guest Post

If you’ve been looking into buying a home, condo or financing a home improvement project, you’ve probably come across a wealth of different mortgage loan options. But which is best suited to your needs and budget?

Here, we’ll discuss variable-rate mortgages (aka adjustable-rate) and fixed rate mortgages to help you establish a payment method you can feel secure with.

What’s The Difference Between Variable Rate and Fixed Rate Mortgages?

Variable rate and fixed rate mortgages sound complicated, but they’re really very simple. A variable rate mortgage means that the interest rate changes over time depending on changes in the market rate. With a fixed rate mortgage, the interest rate is locked in from the beginning and it never changes. Both types of mortgages have their ups and downs. Picking the right one depends on your ability to cover changing mortgage rates from one month to the next.
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Lets Stop Blaming the Economy for Our Failed Investing Strategies

Beyond Buy-and-Hold #76

By Rob Bennett

Buy-and-Hold doesn’t work. Look around. it’s obvious.

But wait! The Buy-and-Holders have an explanation.

It’s the Economy! Buy-and-Hold is aces. It’s that darnned economy that is messing everything up. Buy-and-Hold cannot be expected to produce good results in the face of such a bad economy.

Trying to have it both ways

Please think over what is being said here. When Buy-and-Hold produces good results, we credit the investing strategy. When the results are poor, we place the blame elsewhere. As Church Lady might observe, “How convenient for the advocates of Buy-and-Hold!” It’s a “heads I win, tails you lose” approach to investing analysis.

And you know what? This isn’t the first time the Buy-and-Hold advocates have played this little trick on us.
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10 Qualities of the Self-Employed Mindset

By Kevin M

Maybe I’m painting with a very broad brush here, but I think most people would like to be self-employed—if not now then “later”. At a minimum it’s a dream, even if it’s not being actively cultivated. What keeps that pursuit from coming into being varies by person, but I’m sure that fear of the unknown ranks real high on the list.

That fear, I think, often comes from the misguided notion that chance plays a primary role in the success or failure of a business venture, and people who have never had their own business might be unsure that Lady Luck will smile upon them should they decide to venture out on their own. There’s often the tendency to believe that the self-employed get to where they are by having special skills or talents, by being in the right place at the right time, or because they have the “right connections”.

Maybe luck does play a role in some situations, but speaking for myself and for other self-employed people that I know, mindset plays a bigger role in entrepreneurial success than anything else.
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Is Contract Work REALLY Self-Employment?

By Kevin M

I’ve been writing a good bit in the past few weeks about the virtues of self-employment, based heavily on my own experience in turning this blog into a primary income generating venture. I believe that being self-employed may now be the new preferred way to “creating a career”, as opposed to the more traditional route of jumping on the corporate ladder—mainly since the ladder no longer seems to exist.

Today I want to take a look at contracting, since it’s become an increasingly common path into self-employment. For the record, I’ve done a good bit of contract work over the past few years so I won’t be talking (OK, writing…) hypothetically. And I still do take on contract work under the right circumstances.

OK, so you enter a contract arrangement—they have you sign a thick contract filled with rich legalese, they aren’t going to withhold taxes, you’ll be issued a 1099 at the end of the year (instead of a W2) and you’ll be required to file a Schedule C—Income from Self-employment, on your income tax returns. Wow, you’re self-employed now, right?

Not necessarily. And maybe not at all.

Many contract arrangements have nothing to do with self-employment. They’re mostly watered down jobs that have close to zero chance of ever being converted into entrepreneurship of any kind. They can be a trap if you take them on, thinking it’ll make you self-employed. No only will you not be self-employed, but you’ll be only minimally employed at that. It’s important to know when a contract arrangement really is a form of self-employment and when it’s something else.
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