Comments for OutOfYourRut.com http://outofyourrut.com/blog Careers, Business Ideas, Money and More Thu, 09 Feb 2012 14:41:25 +0000 hourly 1 http://wordpress.org/?v=3.3.1 Comment on Five Reasons the 30 Year Mortgage Beats the 15 by Kevin M http://outofyourrut.com/blog/2011/05/26/five-reasons-the-30-year-mortgage-beats-the-15/#comment-169752 Kevin M Thu, 09 Feb 2012 14:41:25 +0000 http://outofyourrut.com/blog/?p=3101#comment-169752 Hi Joe--Good points accross the board. What I mostly like about the 30 is that you keep your options. When I was in the business, there was a steady flow of people who wanted to refinance from a 15 year back to a 30. In principle, the 15 seemed like the way to go, but life can get in the way. What works on paper doesn't always work in life. Another under-appreciated factor is inflation. As the cost of living steadily rises, the need to improve cash flow increases as well. Since pay raises and promotions aren't as generous as they once were, the cash flow improvement increasingly comes from the expense side of the ledger. The house payment is the biggest and give the greatest savings. Hi Joe–Good points accross the board. What I mostly like about the 30 is that you keep your options. When I was in the business, there was a steady flow of people who wanted to refinance from a 15 year back to a 30. In principle, the 15 seemed like the way to go, but life can get in the way. What works on paper doesn’t always work in life.

Another under-appreciated factor is inflation. As the cost of living steadily rises, the need to improve cash flow increases as well. Since pay raises and promotions aren’t as generous as they once were, the cash flow improvement increasingly comes from the expense side of the ledger. The house payment is the biggest and give the greatest savings.

]]> Comment on Knowing Your Needs: Whole Life Insurance VS Term Based Policies by Kevin M http://outofyourrut.com/blog/2011/05/20/knowing-your-needs-whole-life-insurance-vs-term-based-policies/#comment-169751 Kevin M Thu, 09 Feb 2012 14:36:32 +0000 http://outofyourrut.com/blog/?p=2987#comment-169751 Hi Isabella--that is true. But part of the reason for term insurance is that the need for life insurance changes with the seasons of life. If you're 40 and married with children, you'll need a lot more coverage than you will when you're 60 and have no dependents. The other issue is inflation. A whole life policy taken when you're 25 will be entirely inadequate at age 50, no matter how cheap it was. 25 years ago $100,000 policy was substantial, today, it will probably only cover funeral expenses, medical bills and a few extras. Hi Isabella–that is true. But part of the reason for term insurance is that the need for life insurance changes with the seasons of life. If you’re 40 and married with children, you’ll need a lot more coverage than you will when you’re 60 and have no dependents.

The other issue is inflation. A whole life policy taken when you’re 25 will be entirely inadequate at age 50, no matter how cheap it was. 25 years ago $100,000 policy was substantial, today, it will probably only cover funeral expenses, medical bills and a few extras.

]]> Comment on Knowing Your Needs: Whole Life Insurance VS Term Based Policies by Isabella http://outofyourrut.com/blog/2011/05/20/knowing-your-needs-whole-life-insurance-vs-term-based-policies/#comment-169721 Isabella Thu, 09 Feb 2012 11:25:54 +0000 http://outofyourrut.com/blog/?p=2987#comment-169721 There is a place for both term and whole life insurance. It all comes down to an individuals need. Remember, say you are in your 30's and your life expectancy is 85 years old, and say you plan to keep life insurance for the long term for whatever reason term life insurance will cost you more in the long term. There is a place for both term and whole life insurance. It all comes down to an individuals need. Remember, say you are in your 30′s and your life expectancy is 85 years old, and say you plan to keep life insurance for the long term for whatever reason term life insurance will cost you more in the long term.

]]> Comment on Five Reasons the 30 Year Mortgage Beats the 15 by JoeTaxpayer http://outofyourrut.com/blog/2011/05/26/five-reasons-the-30-year-mortgage-beats-the-15/#comment-169571 JoeTaxpayer Wed, 08 Feb 2012 23:56:23 +0000 http://outofyourrut.com/blog/?p=3101#comment-169571 There are many who agree with you, Kevin. As you suggest, this is the lowest rate money you'll ever have, today the 15 is about 3.5%, and 30 at 4.0%. If there's no other debt, no credit cards, no car loan, etc, how about the emergency fund? Are you depositing to the 401(k) to get the full matching? Any prepayment is like a 15 year (or longer) CD at that rate. The last 10 years aside, I think the next 10 will provide better returns. Tough to go 15, then have a child or two and realize the Mrs would like some time off. That $400/mo would be real handy then. There are many who agree with you, Kevin.
As you suggest, this is the lowest rate money you’ll ever have, today the 15 is about 3.5%, and 30 at 4.0%.
If there’s no other debt, no credit cards, no car loan, etc, how about the emergency fund? Are you depositing to the 401(k) to get the full matching?
Any prepayment is like a 15 year (or longer) CD at that rate. The last 10 years aside, I think the next 10 will provide better returns.
Tough to go 15, then have a child or two and realize the Mrs would like some time off. That $400/mo would be real handy then.
JoeTaxpayer´s last [type] ..A Superbowl Roundup

]]> Comment on 11 Ways to Cut Your Car Insurance by Kevin M http://outofyourrut.com/blog/2011/11/13/11-ways-to-cut-your-car-insurance/#comment-169089 Kevin M Tue, 07 Feb 2012 16:20:21 +0000 http://outofyourrut.com/blog/?p=3914#comment-169089 That's true Shawanda, you always have to balance out cost-vs-benefit in anything financial that you do. It may also matter what state you live in, raising the deductible could have a greater impact in some states than in others. The other things to consider are savings level and driving history. If you normally keep several thousand dollars in an emergency fund, increasing your deductible by $500 may be worth a $10/month savings because you have the worst case covered. Also, if you haven't had any claims in years or in all the time you've been driving, it might still be worth justifying. But you always have to weigh it out. That’s true Shawanda, you always have to balance out cost-vs-benefit in anything financial that you do. It may also matter what state you live in, raising the deductible could have a greater impact in some states than in others.

The other things to consider are savings level and driving history. If you normally keep several thousand dollars in an emergency fund, increasing your deductible by $500 may be worth a $10/month savings because you have the worst case covered. Also, if you haven’t had any claims in years or in all the time you’ve been driving, it might still be worth justifying. But you always have to weigh it out.

]]> Comment on 11 Ways to Cut Your Car Insurance by Shawanda @ You Have More Than You Think http://outofyourrut.com/blog/2011/11/13/11-ways-to-cut-your-car-insurance/#comment-168837 Shawanda @ You Have More Than You Think Mon, 06 Feb 2012 21:24:38 +0000 http://outofyourrut.com/blog/?p=3914#comment-168837 These are all great, and I've used most of them to save money on my car insurance. However, I've never found much savings from increasing my deductible. For instance, when I look at how much I save on auto insurance premiums when my deductible is $500 compared to $1,000 the additional risk isn't worth it. I believe last time I checked, my premiums may have dropped about $10 a month. That's not enough. I'd have to avoid damaging my vehicle (or someone else's) for over 4 years to make it worthwhile. These are all great, and I’ve used most of them to save money on my car insurance. However, I’ve never found much savings from increasing my deductible. For instance, when I look at how much I save on auto insurance premiums when my deductible is $500 compared to $1,000 the additional risk isn’t worth it. I believe last time I checked, my premiums may have dropped about $10 a month. That’s not enough. I’d have to avoid damaging my vehicle (or someone else’s) for over 4 years to make it worthwhile.
Shawanda @ You Have More Than You Think´s last [type] ..The 100-Hour Project

]]> Comment on 10 Qualities of the Self-Employed Mindset by Kevin M http://outofyourrut.com/blog/2012/02/06/10-qualities-of-the-self-employed-mindset/#comment-168806 Kevin M Mon, 06 Feb 2012 19:41:21 +0000 http://outofyourrut.com/blog/?p=4291#comment-168806 YI--Yes, that's an excellent one! Procrastination is often easier to do when you have your own business becasue you don't have anyone to report to directly. If you can comply with #9 in the list, procrastination shouldn't be an issue. But my thought is that, being human, we can find a way to procrastinate no matter how much we might know better. "Creative avoidance" is the term I've heard many times in connection with procrastination. We have to find ways to avoid justifying putting off what's really important to the success of our businesses. A friend of mind likes to say "do the dreaded job first"--which is usually the most important one! It's good advice. YI–Yes, that’s an excellent one! Procrastination is often easier to do when you have your own business becasue you don’t have anyone to report to directly. If you can comply with #9 in the list, procrastination shouldn’t be an issue. But my thought is that, being human, we can find a way to procrastinate no matter how much we might know better.

“Creative avoidance” is the term I’ve heard many times in connection with procrastination. We have to find ways to avoid justifying putting off what’s really important to the success of our businesses. A friend of mind likes to say “do the dreaded job first”–which is usually the most important one! It’s good advice.

]]> Comment on Income Security VS Job Security – Does it Matter? by Kevin M http://outofyourrut.com/blog/2012/01/30/income-security-vs-job-security/#comment-168804 Kevin M Mon, 06 Feb 2012 19:35:52 +0000 http://outofyourrut.com/blog/?p=4266#comment-168804 Hi Juan--I think you've got some good suggestions along the line of investing in a small business (a website) and investing in high yield assests (REIT). And you're right, it takes money to do both. My thought is that the website might be better leverage of a small amount of money, but it does require some level of expertise. Which is another important point, that if you do invest in a small business, it should be one that you understand and not just a shot in the dark in the hope that it will somehow work out profitably. Hi Juan–I think you’ve got some good suggestions along the line of investing in a small business (a website) and investing in high yield assests (REIT). And you’re right, it takes money to do both. My thought is that the website might be better leverage of a small amount of money, but it does require some level of expertise.

Which is another important point, that if you do invest in a small business, it should be one that you understand and not just a shot in the dark in the hope that it will somehow work out profitably.

]]> Comment on 10 Qualities of the Self-Employed Mindset by Young Investor http://outofyourrut.com/blog/2012/02/06/10-qualities-of-the-self-employed-mindset/#comment-168800 Young Investor Mon, 06 Feb 2012 19:30:39 +0000 http://outofyourrut.com/blog/?p=4291#comment-168800 This is a great list and I definitely see this fitting me well so I have that to look forward to. One thing I want to consider is procrastination. Procrastination is pretty dangerous and I often see it in self-employed people. What do you think are the implications of that? Are we just different or is it a problem to work on? This is a great list and I definitely see this fitting me well so I have that to look forward to.

One thing I want to consider is procrastination. Procrastination is pretty dangerous and I often see it in self-employed people. What do you think are the implications of that? Are we just different or is it a problem to work on?
Young Investor´s last [type] ..Can I Invest in Facebook Stock? And How to Get Ready for the Coming Facebook IPO

]]> Comment on Income Security VS Job Security – Does it Matter? by Juan http://outofyourrut.com/blog/2012/01/30/income-security-vs-job-security/#comment-168758 Juan Mon, 06 Feb 2012 17:15:25 +0000 http://outofyourrut.com/blog/?p=4266#comment-168758 If one is able to find a relatively well paid employment and then save a high portion of that income then that extra capital can used to help provide some of the elusive job security. There are some REITs that yield a healthy 7% or more. Also one can buy a website at realistically good multiple, but it takes awhile before one can gain the analytically skills to see the difference between a piece of crap and a valuable asset with potential. Still though it doesn't change the fact that one needs money to make money. If one is able to find a relatively well paid employment and then save a high portion of that income then that extra capital can used to help provide some of the elusive job security. There are some REITs that yield a healthy 7% or more. Also one can buy a website at realistically good multiple, but it takes awhile before one can gain the analytically skills to see the difference between a piece of crap and a valuable asset with potential. Still though it doesn’t change the fact that one needs money to make money.
Juan´s last [type] ..Building A House: 4 Advantages To Consider

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