Best Personal Financial Planning and Personal Investment Articles this Week from Personal Finance Blogs

Welcome to the June 9, 2012 Edition #240 of the Carnival of Financial Planning.

The Carnival of Financial Planning takes a long-term view of personal financial planning for individuals and families. We focus on efficient and sustainable personal financial planning practices that can lead to lifetime financial security.

This edition is arranged by subject heading, so that you can browse efficiently.

Enjoy!

The Skilled Investor, Editor

Budgeting and Economics

Miss T. presents Small Money Mistakes that Have Big Consequences posted at Prairie Eco Thrifter, saying, ” It is often the little things you do, the small actions you take, that have the biggest impact on your financial security, both in the present and in the future. Of course, this concept is true whether the little things are positive or negative.

A Blinkin presents Simple Steps To Grow Your Business posted at Funancials, saying, ” As your business starts succeeding, you should look at what the next level is. This can encompass a whole range of things, from moving out of the house and into a real shop, or even just making your existing business look more professional and function more streamlined.

Daisy presents It’s Not Necessary To Pay For Your Kid’s College Education posted at Add Vodka, saying, “This does not reduce the accomplishments of those who had their parents pay for college for them, nor is it meant to be a compare/contrast of people that pay for their own.

Janet presents Expense budgets posted at Independent Financial Planner , saying, ” Many people do not track their living expenses and do not understand the magnitude of their consumption.”

Financial Planning

Miranda presents Funding Your Small Business posted at Wallet Hub Blog, saying, “Finding money for a small business can be difficult right now, with the economy struggling, and many banks reluctant to take a chance on small businesses. If you are looking for sources of income for your small business, here’s where to start

Jason presents Things to Consider With Your Relationship and Money posted at Work Save Live, saying, ” Your Relationship and Money A lot of couples fight about money.

Crystal presents Getting Excited about FINCON12 But Nervous Too… posted at Budgeting in the Fun Stuff, saying, ” The Financial Blogger Conference 2012 is going to be awesome, but I am already nervous about speaking. This will make FINCON12 a bit more stressful for me.

Corey presents Cost of Being in Someone Else’s Wedding posted at 20s Finances, saying, “Do you have any close friends getting married soon? Have they asked you to be in their wedding? Do you know how much it will cost you to say yes? I was in a friend’s wedding in December and will be in another wedding in June. Between those two weddings and having 3 other weddings to attend in the next few months, I have weddings on the mind.

Amanda L Grossman presents 20 Ways to Spend Money On and Off Board a Cruise posted at Frugal Confessions, saying, “I am fresh off the ship of the first cruise I have ever taken.

Johnny presents Investment education  posted at Personal Finance and Planning , saying, ” 99+% of the financial information that is easily available through the media and the Internet is: self-interested and biased, superficial and non-implementable, historical in nature or just current “noise” reporting without any actionable utility, and/or poorly researched, just plain wrong or unmitigated rubbish.”

101 Centavos presents How To Painfully Save Hundreds of Dollars a Year posted at 101 Centavos, saying, ” While we’re off on vacation, I’m recycling.

Eddie presents 35 Money Lies People Tell Regularly posted at Finance Fox, saying, “Men supposedly lie six times more per day than women, and when someone tells you, be a man or a woman – Nothing is wrong, I’m OKAY -, they’re really lying to your face.

Franklin presents Passively Funds posted at Investor Strategies, saying, “On average, higher mutual fund turnover is far more likely to result in lower investment fund performance — instead of superior risk-adjusted performance.”

Luke presents Are Investors in the PIMCO Total Return Fund Missing Out? posted at Learn Bonds, saying, ” The PIMCO Total Return Fund is Underperforming PIMCO’s new BOND ETF. Are PIMCO Total Return Fund Investors missing out?

Don presents Alpha Returns posted at Wall Street Financial Engineering , saying, “For typical individual investors, without special access to information, it offers what is likely the best financial advice they will ever get: It is hard to consistently beat the market, especially after fees. A passive strategy will do better in the long run. ”

John presents Creflo Dollar, Joel Osteen and the Prosperity Gospel posted at Married with Debt, saying, ” Preachers like Creflo Dollar and Joel Osteen are leading figures in the prosperity gospel movement. What is it, and is it right?

Income

Jeremy presents Overcoming Unemployment Challenges posted at Modest Money, saying, “As many of you know I’ve been unemployed the whole time I’ve been running this blog. Now find out about the struggles I’ve had to overcome to rejoin the world of the employed.

YFS presents Rental Property #3 Numbers Analysis posted at Your Finances Simplified, saying, “As I told you guys in the last post, I’m going to give you the actual break down of my current and future rental property purchases.

Martin presents Can You REALLY Start a Business With $100? posted at Studenomics, saying, “How to start a new business without tons of capital.

Insurance and Risk

Stephen presents Do You REALLY Need Life Insurance? posted at NerdWallet, saying, ” If no one depends on your earning capacity, you most likely do not need life insurance. That’s the fundamental rule by which to make your decision.

Evan presents Trying to Understand Long Term Care Insurance posted at My Journey to Millions, saying, “While I am entirely too young to consider Long Term Care Insurance considering I don’t think many carriers sell individual policies for people under the age of 40,I have been giving it a lot of thought recently.

Lawrence presents ID theft protection posted at Best Financial Planner, saying, “As a threat to your financial security, you should take the potential for identity theft very seriously. Identity theft sometimes entails a loss of your money, but whether or not you lose money, it can take a very large amount of your time to rectify.”

Jeff Rose presents Protection For Your Home – Is Mortgage Life Insurance Worth It? posted at Life Insurance By Jeff, saying, “While your house is most likely your biggest asset, does that justify paying the extra premiums to have a mortgage life policy? Does the added cost really give you the protection you need?

Investing

Jeff Rose presents Best Short Term Investments For Your Money Right Now posted at Good Financial Cents, saying, “In such an unstable market, short term investing may be a safer alternative for investors. Short term investing allows investors to invest their money with little or no risk, while knowing their money is not going to be tied up for long periods of time.

Pinter presents No Load Bonds posted at Cheap Bond Funds, saying, “Investment research overwhelmingly shows that lower cost fixed income funds tend to yield higher bond investing returns.”

Sustainable PF presents Canadian Dividend Stocks: Brookfield Renewable posted at Sustainable Personal Finance, saying, ” Many investors are looking to Canada as a source of investing opportunity that are a little more eco-friendly than their competitors like Brookfield Renewable Energy Partners.

TSI presents Morningstar Ratings posted at The Skilled Investor , saying, ” Individual investors and their advisors appear to make investment decisions that are heavily influenced by the Morningstar Rating system. Because the stars are very widely used and often misunderstood, these are articles to help investors make more rational decisions about the stars.”

Pierre presents Teaching Your Kids To Become Great Investors posted at Intelligent Speculator, saying, ” Do you teach your kids about money?

Div Guy presents Canadian Aristocrats; They Have it Too posted at The Dividend Guy Blog, saying, “What sort of stocks are you investing in?

DL presents Global Financial Markets  posted at Nerds on Wall Street , saying, ” Stock markets are almost perfectly transparent, with full information available to all, and the best electronic clearing and settlement in history. These technologies were omitted in building the skyscraper of cards (“house of cards” seems too mild) out of collateralized debt obligations (CDOs), credit default swaps (CDSs), synthetic collateralized debt obligations (SCDOs), and the rest.”

W presents A Speculative Alternative To Investing Part 1: Goals posted at Off-Road Finance, saying, ” A long term speculative trading system for those who want to avoid conventional investing.

Managing Debt

Maria presents Four conditions under which cash loans may not be such a bad idea after all posted at The Money Principle, saying, ” Before I go on and set out the four conditions under which, I believe, cash loans may not be a bad idea let me tell you a story.

Mike presents Why Cash Back Beats Travel Rewards posted at Rewards Cards Canada, saying, ” A free vacation keeps many Canadians loyal to their travel rewards program, but for me, cash back is king. Here’s why cash back beats travel rewards

Mike presents Best Cash Back Credit Cards posted at Rewards Cards USA, saying, “If you are looking for some solid choices when it comes to cash back credit cards, here are a few of the best options for getting money back

Echo presents Home Equity Line Of Credit: Friend Or Foe? posted at Boomer & Echo, saying, ” A home equity line of credit has its advantages, but be cautious. Easy access to credit and loose repayment terms can make HELOC’s very dangerous.

Real Estate

Suba presents Our House On The Market: Month Three posted at Broke Professionals, saying, ” We’ve now had our house on the market for three long months, and I’m losing faith. We’re dropping the asking price, but I wonder whether it’s enough to get it sold.

Wayne presents Should You Hide Money From Your Spouse? posted at Young Family Finance, saying, “A recent study showed that many partners or spouses hide money from their significant other. Is it okay to hide money from your spouse?

Retirement

Hank presents Harnessing The Power Of Compound Interest posted at Money Q&A, saying, ” There is a power of compound interest that both savers and investors need to understand and harness in order to grow their wealth.

Brock presents Retirement Spreadsheet posted at IRA Account Investment, saying, “Whether or not to make investments into “traditional” tax-advantaged employer accounts and IRAs versus investing in “Roth” tax-advantaged employer accounts and personal IRAs is never a straightforward nor simple financial planning decision.”

PITR presents Reasons Why People Don’t Follow Their Dreams posted at Passive Income To Retire, saying, “Find out why people fail to realize their dreams. Why do people fail? Why do people give up on their dreams?

Knowles presents SandP 500 Funds posted at Large Cap Index Funds, saying, “The no load index fund strategy of the Schwab S & P 500 Index Fund tracks the S and P 500 stock index. This no load index fund was listed as one of the top 25 lowest cost index mutual funds in a research study.”

Savings

John presents Why You Should Think Twice Before Hitting a Toll Road in a Rental Car posted at Wallet Blog, saying, “One would think you would have to go through the Phantom Toll Booth to pay a phantom toll fee. Sadly, that is not the case, and the unsuspecting consumer is getting hit with unreasonable toll charges when driving a rental vehicle. Are these costs avoidable?

Freedom presents Savings Rates posted at Financial Freedom Plan , saying, ” Understand how your current savings rate and retirement withdrawal rate would affect all of your lifetime personal financial planning goals ”

Liana presents What to Make of the New Capital One Daily Deals Program posted at Card Hub, saying, “Move over Groupon and Living Social! Capital One is taking the stage with one of its newest programs. See what your credit card can do for you when it comes to saving money at places where you already spend!

Taxes

FMF presents The Eight Tax Rules posted at Free Money Finance, saying, ” In this article are eight rules that I recommend you follow in dealing with taxes. The first four are principles that you should adopt, and the next four are specific areas of competency that I recommend you develop.

Monroe presents Roth Conversions posted at Do-It-Yourself Finance , saying, “Key to you making a better decision about your lifetime Roth account contribution and asset conversion strategy is the need for a sophisticated financial planning software tool.”

That concludes this edition. Submit your blog article to the next edition of Carnival of Financial Planning using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: carnival of financial planning, blog carnival.

My wife woke-up one morning, about three years ago, and announced, “I’m going to start a home business.” And sure enough, she did. Since its simple inception, our swim school has been able to generate more demand than we can handle. We now have a team of coaches and multiple locations where we teach.

I’m not saying any of this to brag, but to show that starting a home based business is much easier today than it’s ever been before. The Internet not only provides access to information, but it also gives you access to customers. The billions of searches on Google represent consumers looking for products and services.

The purpose of this post is to give you a basic overview of how to go about starting a home business.

Step 1: Generating ideas

Start by making a list of your hobbies and passions. You’ll find that business is much easier when you love what you are doing. Let me give you an example.

A neighbor of ours, Candice, tried to sell Mary Kay cosmetics and skincare. However, Candice doesn’t wear make-up or really care about make-up for that matter. Her only purpose in doing Mary Kay was to just earn extra money. The result – she failed. A few months later, Candice decided to open a business selling cake bites. The difference? She loves baking. Her husband has often complained that his spare tire around the waist is the result of always having baked goods in the house. This time, her business is going much better because she enjoys what she does. She’d make cake bites regardless of the business.

Once you’ve made a list of your hobbies, passions and interests, narrow the list down to some options where you think you can offer a unique advantage. Part of our success with swim lessons is because we are able to offer services not otherwise available in our area. There was a whole in the market and we have stepped in to fill it. So spend some time on Google and see what’s offered and not offered in your area or online.

Keep in mind that being competitive doesn’t necessarily mean offering something that no one else offers. But rather, a competitive advantage can be offering a product or service in a better way than anyone else or at a lower cost.

Step 2: Selecting your legal and taxable business type

Once you’ve decided what to do, you need to put a legal structure around your business. There are several options: sole proprietor, single member LLC, multi-member LLC, Limited Partnership,  S-Corp and C-Corp. Most home businesses are setup as LLCs. LegalZoom offers a brief comparison between LLCs and Corporations.

This is where you want to talk to a tax attorney or accountant. There are several factors that will affect the structure you choose, such as how much money you expect to make, how many people own the company, what are you planning to offer, etc. Spending a little money to set things up correctly from the beginning is worth the money.

The point is that you want to protect yourself and assets from lawsuits.

Step 3: Creating a legal, taxable business entity

There are basically three steps to creating a new legal, taxable business entity.

1. What’s in a name?
   First, you need a name. More importantly, you need a name that is available in your state. Or in other words, a name that hasn’t been registered by another entity. You can check your state’s Business Entity Search to see what is available.
2. Let the Feds know
   Second, you need to file for a Federal Employer Identification Number (FEIN or EIN). You can quickly and easily file online on the IRS’ website. You will need your FEIN before proceeding to the next step or setting up bank accounts.
3. File with your state
   Each state’s process is a little different. Though you will be required to create your Articles of Incorporation, which are the rules that govern the management of your company. There are some standard clauses, such as who are the managing members and what is your business address, but you can create business rules or articles that cover just about anything you want (as long as it’s legal). For example, if you are going into business with friends or family, then an article describing dissolution (what happens to the money and assets if your company goes under) is a very good idea.

On a side note, consider other legal requirements, such as a food handler’s permit, that you may be required to file. For example, a Sales Tax Id if you intend to resale goods. Again, this is where a good accountant or attorney can help you make sure that you are filing everything you need to.

In Part 2 of starting a home business, I will cover the next three steps, which are setting up bank accounts, keeping your accounting records, and marketing yourself.

For more money saving advice, follow Rabbit Funds on Twitter.

Dear Santa Claus,

First, let me say that I’m a big fan. Ever since seeing Tim Allen and Martin Short duel for your position, I’ve felt a renewed vigor and belief. So I thought I would drop you a line this year and make a few requests.

1) A fully funded 401(k)

I’ve tried to be a good boy. Before my company was spun off in the 2nd quarter, I diligently contributed to the company 401(k), despite the terrible array of investment options. But since the spin-off, we haven’t had a 401(k). In fact, Prudential is now sending me letters telling me to roll my 401(k) over to someone else. Apparently, I don’t have enough money for them. So I would have kept contributing if I could have. So will you please fully fund my 401(k) please? Don’t worry about the company match.

2) A Roth IRA for the wife

Once our 401(k) disappeared, I started making contributions to my Roth IRA. Unfortunately, my wife still does not have a Roth IRA. Having a shiny new Roth IRA at, let’s say, Vanguard with a couple of index funds would be great. Just something to get her going. She’s running her own business though, so maybe a SIMPLE IRA would be better. I’ll let you decide. I mean, you seem like you are pretty financially savvy. You’d have to be to finance the production of million of toys each year.

3) Better health insurance

Since I’m talking about my job, our health insurance isn’t that great either. I know that I should just be grateful that we have health insurance, but can you really call a $5000 deductible insurance? For example, my wife has scoliosis and had started going to the chiropractor regularly since the pain was increasing. She was just making progress when I had to tell her that she needed to stop going for at least a couple of months. We simply have no way of paying for her to go twice a week. I’m willing to do my part to earn some extra money, but a better health insurance plan would go a long way.

4) An emergency fund

As I’m sure you are aware, I’m currently studying to take the GMAT this Saturday. Realizing that I needed some extra help, I signed up for the Kaplan Advanced GMAT prep course, which I highly recommend to any of the elves looking to change careers. Paying for the GMAT, the prep course, two new tires, and medical bills has depleted our emergency fund. So maybe I’m pushing my luck, but a replenished emergency fund would make sleeping at night easier. Think of the children.

5) Dems to sign-off on tax cuts

I was planning to ask for extended tax cuts as well, but it seems that President Obama and the GOP have decided to give us an early Christmas present. I was just hoping for the extension, so the Social Security tax cut, the equivalent of a 2% pay raise, was a very pleasant surprise. Though, the Democrats need some persuading. So maybe you can threaten them with some coal.

6) Maybe an up-swing in the housing market

Last, but certainly not least, is there anything you can do about this housing market? Our home is two years old and we are underwater. Hoping that we were just a little underwater, we had an appraisal to find out what our home is currently worth. I think I was better off not knowing. What’s really frustrating is that we are responsible and our irresponsible neighbors who bought a home they couldn’t afford have caused home prices to drop. So maybe you could just leave Dave Ramsey’s Financial Peace University under everyone’s Christmas tree this year.

As you can see, we have a number of financial goals and challenges that we are facing as 2011 draws near. And although I’m gainfully employed, my pay just doesn’t quite cut the mustard.

Anywho, I’ve rambled enough.

Thanks Kris (can I call you Kris?)

Adam

P.S. A couple shares of Berkshire Hathaway would be cool too, but whatever.

April 15th is near and taxes are due. 2009 paperwork is being rummaged through, and Americans are working hard to get their taxes ready.

Paying taxes can put a big dent in our collective wallets, but a small percentage of people are going to come out owing more than they can actually afford (ouch!). So what happens if you truly cannot pay your tax debt?

This is a tough situation for anyone to be in. But like any difficult problem, there is always a solution. One thing you need to remember is that you should never just ignore your tax problems. A small or medium size debt could snowball into a huge problem that could even land you in jail. Also, the penalties for not paying your taxes and not filing your taxes are completely different! You will owe MUCH more for not filing, than if you simply can’t pay what you owe. Whatever you do, ALWAYS file your taxes.

A new trend among people that are having tax problems is to turn to their trusty credit cards. But, this might not be the smartest thing for someone who already has a debt problem. It depends on your history with credit cards and your current income. If you have a habit of not paying your bills on time, you might want to reconsider. Creating a credit card debt problem to replace a tax problem might just be digging yourself into an even deeper hole. But, if you have a steady income and the cash flow problem is just temporary, it might be worth it (only if you can pay it off quickly). Just make sure that you have repayment plan in place. You don’t want to let that interest grow into something you can’t afford.

What are your options if you don’t have the cash?

If you a facing financial problems, you might be able to negotiate a payment plan with the government. If you have less than $10,000 in tax debt you can fill out Form 9465 to set up an installment plan. The government may or may not agree to this. After you send in this form an IRS agent will evaluate your finances. If they believe you are truly having financial trouble, then they will most likely approve you for this installment plan. But keep in mind interest and penalties will still apply.

Now if you are really in financial hardship and an installment plan is still too much, the government may accept a reduced payment. This is called an “Offer in Compromise”.

To qualify for an Offer in Compromise you need to complete Form 656 and Form 433A. You will need to send complete records of your finances and an agent will decide if they will accept a reduced rate. The criteria for you to qualify for this compromise depends on the financial records you submit. If they believe you cannot pay the full amount, the amount due is incorrect, or that there are other special circumstances they might grant an “Offer in Compromise”. But keep in mind the IRS is tough, and they only offer OIC’s to people whose finances are in very bad shape. When you apply for an OIC, you admit liability of the tax debt. This will make it very difficult if you want to protest it later on.

Hire a CPA or Tax Attorney

There will be extra fees if you get outside help, but its possible that they may save you more money in the long run. A CPA or attorney will have much better knowledge of the tax laws, and may be able to work the system better than you could by yourself. But like with anything else, you need to shop around for the right company or you could get burned. Just like other areas of the debt settlement industry, these companies tack on fees that can add up quickly if you choose the wrong company. Make sure you read the terms of your agreement very carefully before you sign.

If your tax debt is greater than your income can afford, you need to handle it quickly. Remember that interest on your debt is always adding up. You can take the “do it yourself” route or hire a professional to help. There is also a lot of information on the Internet to get you started. Begin your research at home, then make some calls. It doesn’t hurt to call a tax professional just to pick his or her brain and get you moving in the right direction. The more you learn about the process, the better your outcome will be, and hopefully you’ll pay less in the long run.

About the author: This is a guest post by Garrett Driscoll from Debt Eagle. Visit his site if you are having debt problems or need information about bankruptcy, bad credit, or collector issues.

If you’ve been wanting to take advantage of today’s historically low mortgage rates, now is definitely a good time. The popular home buyer tax credit has recently been extended by Congress.

The program is now being offered to all eligible home sales occurring between January 1, 2009 and April 30, 2010. In addition to the previous $8,000 refundable tax credit available to first-time home buyers, the extension includes a new provision offering a $6,500 credit to homeowners looking to relocate provided that they have lived in their current residence for a minimum of five years. It is important to note that the provision for the $6500 tax credit only applies to homes purchased after Nov. 6th 2009 and is not retroactive.

Income limit provisions

In addition, Congress has increased the income limits for the program. To qualify for the full $8000 credit, individual taxpayers cannot make in excess of $125,000 and joint filers cannot make more than $225,000. The limits under the previous credit were $75,000 for single filers and $150,000 for joint filers. However, there is still a possibility for you to qualify for a partial credit if you make slightly above these amounts. The credit is ruled completely out for single home buyers with incomes above $145,000 and $245,000 for joint filers as well as for homes bought in excess of $800,000.

In addition, applicants cannot have owned a home as a primary residence within the last 3 years and are required to stay in the home that you are purchasing for an equal amount of time. If you sell your home within three years of the date of purchase you will be required to repay the full amount of the received credit. Also, you cannot claim either credit if you inherited or were gifted a home from a family member or loved one.

Necessary paperwork

Receiving the credit is easy- simply claim the eligible amount via form 5405 on your tax return for 2009 or file an amended return for 2008. No additional forms or paperwork are necessary. Also, depending on the lender, you can now apply the credit as a down payment on a mortgage loan.