"SHOW ME THE MONEY" VIEWS on HOW to make MONEY GR

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So here's a scenario,

if you have a 401k in one company, that move to another, what happens then? Do you still get to keep your old 401k?

[MJZiggy]

You could, but it's probably easier to roll the old 401K into the new company plan.

Shamrock, there is such a market for reclaimed and salvage materials right now--I bet you made a killing doing that.

I am no financial genius, but I can tell you that I've read a couple books on the topic and they recommend that you do the 401K stuff and while you're doing it, start making substantial payments to your credit card debt and once the credit cards are paid off, take the money that you were paying to them and add it to your car payment and once your car payment is paid off, add the money that you were paying on the car payment to the money you were paying on the credit cards and put the whole amount to your mortgage. Supposedly you eventually run out of things to pay off and then you have your whole income to yourself minus taxes.

[MadtownPacker]

I would think that is your 401K retirement plan. But normally companies match $1 for every $2 you put in up to a certain % of your earnings, which is still outstanding. If your company is matching more than that they are probably very fiscally healthy and it's even better. Then they take that money and invest it in mutual funds and normally you have some say in how to diversify the investments.

That must be it then, I signed up cuz they said it cant lose $. I do think I had to agree to a % but they do everything as far as selection of investments. Wish I was a smart con like you.

[MadtownPacker]

On the subject of credit cards, I read somewhere about signing up for those 0% APR for a year type of deals and then when the year is almost up transferring all your balance to another offer for 0% interest. Does anyone do this?

[Patler]

Flipping Houses

I did this as a young man, without realizing that I was doing it. It wasn't called "flipping" back then! The first few houses we lived in were "fixer uppers". I had time and some skills, so I looked for real good deals on sort of run down houses in good neighborhoods. The first was bought from a couple we knew in their 80s. Owned it about 15 months and sold it for twice what I paid for it. After duducting the costs of materials, I made around 25%. Of course, what the final price was back in those days wouldn't even buy a new car today!

I found it easiest to do a "flip" in the house I lived in. I was always there and could work even a half-hour if I had the time. If you have to "go to" your flip, you need blocks of hours to accomplish anything. My costs were less, because I lived in the investment property while renovating. Only one mortgage.

The key to this is KNOW YOUR REAL ESTATE MARKET. Don't renovate a house to be the most expensive one in the neighborhood, it will be hard to sell. You are better off taking on the neighborhood eye-sore and making it into a slightly better than average one for the neighborhood. Shop lumberyard closeouts, opened boxes, etc. for your materials. You can save an amazing amount of money this way. Renovate to conservative styles, that won't offend any buyer. Remember, its not your tastes that count, its making the property look nice to as many potential buyers as possible.

[Patler]

Shamrock, there is such a market for reclaimed and salvage materials right now--I bet you made a killing doing that.

I did OK, but my venture into that are was over 35 years ago. I took out mostly recyclable metals. It almost brings tears to my eyes when I think of the hardwood floors and woodwork that were bulldozed in a couple of the buildings I was in. One commercial building had marble floors that are now in a dump somewhere!

[MJZiggy]

On the subject of credit cards, I read somewhere about signing up for those 0% APR for a year type of deals and then when the year is almost up transferring all your balance to another offer for 0% interest. Does anyone do this?

I've heard you can really screw up your credit rating if you do that. They leave the credit card you transferred from open and you end up with a screwed up debt to credit available (is that right?) ratio.

[MJZiggy]

Shamrock, there is such a market for reclaimed and salvage materials right now--I bet you made a killing doing that.

I did OK, but my venture into that are was over 35 years ago. I took out mostly recyclable metals. It almost brings tears to my eyes when I think of the hardwood floors and woodwork that were bulldozed in a couple of the buildings I was in. One commercial building had marble floors that are now in a dump somewhere!

Good Lord don't tell me stuff like that!! I spent months trying to find decent reclaimed flooring when we remodeled last year. It was more expensive than new and I finally gave up and put bamboo down.

[MadtownPacker]

On the subject of credit cards, I read somewhere about signing up for those 0% APR for a year type of deals and then when the year is almost up transferring all your balance to another offer for 0% interest. Does anyone do this?

I've heard you can really screw up your credit rating if you do that. They leave the credit card you transferred from open and you end up with a screwed up debt to credit available (is that right?) ratio.

Hmm, but the ratio is based on actual money owed not how many different accounts you have. Right?

[Patler]

Retirement plans

Wow, if I only knew at 22 what I know now!

As others have said, 401k, 401k, 401k! Especially if your employer matches. The match is a "guaranteed" return on your investment, plus you get the earnings on both portions, providing you stay long enough to "vest". Starting in your 20s, even with a reaonsable contribution that is not the maximum, you will do oh so very well!

I worked only for about 12 years at a place that had a 401k. That started a little over 20 years ago, and ended about 10 years ago. Initially I contributed less than the max, for a time I maxed out, but with a large family and some unforeseen things had to cut back some the last few years. For half the time the company matched 50 cents on the dollar. For the rest of the time, there was no match. When I left, the 401k was rolled over into an IRA. Looking back on the cash I contributed, the current value is worth about 6 times what cash I put in. Since my contributions were pre-tax, the net effect on my take-home pay was even less. For every dollar in take home pay that I shorted myself, I probably have about 8 dollars in the account today. Just think if these stretched out for another 20 years?

Compounding interest is so huge on the investments you will make in your 20s. Put whatever you can into it, no matter how small it seems to you today. You will thank yourself 35 years from now.

[Patler]

Investing

Stocks, bonds, mutual funds, etc. I've done good, I've done bad. DOn't even consider these until you have maxed out your 401k or other company matching program you might have. Returns on those are much better for what you put into them.

The hardest thing that an individual has to cope with in investing is keeping emotions out of it. Make a decision, and DON"T LOOK BACK, except to learn from what you did. If you sold and made money, don't regret that it went even higher after you sold. If you wait too long to sell, don't dwell on it. No one buys at the absolute bottom and sells at the absolute peak. The key is make money when you can and minimize losses when possible.

To be honest, I think most people need the advice of a professional in this area, unless you have lots of time to put into it. I don't mean that you should do everything they tell you, but let them sift through the chaff and make suggestions for you to consider. They can be a check on your emotions, too. Alternatively, become an expert on a few companies or in a few areas. But know the companies, where they've been and where they are headed.

Whatever you do, diversify. Thats why mutual funds can be good, because they provide some natural diversification, even within a fund. Even more so if you buy funds empahsizing different market segments.

[MJZiggy]

On the subject of credit cards, I read somewhere about signing up for those 0% APR for a year type of deals and then when the year is almost up transferring all your balance to another offer for 0% interest. Does anyone do this?

I've heard you can really screw up your credit rating if you do that. They leave the credit card you transferred from open and you end up with a screwed up debt to credit available (is that right?) ratio.

Hmm, but the ratio is based on actual money owed not how many different accounts you have. Right?

Let me see if I can get this right. It's based on how much money you owe against the credit limits of all your accounts. I'm guessing the worry is that if you take out a mortgage with having only $2K on credit cards, but have $40K available to you, you could go out and amass all sorts of debt and default on your loan. Can any of the numbers people tell me if that's why?

[MadtownPacker]

Thanks for the great advice Rock. Ive only been doing it for 2 years and after 4 years you are "vested" which means its all yours to keep right?.

[Patler]

Shamrock, there is such a market for reclaimed and salvage materials right now--I bet you made a killing doing that.

I did OK, but my venture into that are was over 35 years ago. I took out mostly recyclable metals. It almost brings tears to my eyes when I think of the hardwood floors and woodwork that were bulldozed in a couple of the buildings I was in. One commercial building had marble floors that are now in a dump somewhere!

Good Lord don't tell me stuff like that!! I spent months trying to find decent reclaimed flooring when we remodeled last year. It was more expensive than new and I finally gave up and put bamboo down.

I read an article about a company that wants to "mine" older landfills just because of all the stuff in them.

[Bretsky]

On the subject of credit cards, I read somewhere about signing up for those 0% APR for a year type of deals and then when the year is almost up transferring all your balance to another offer for 0% interest. Does anyone do this?

I've heard you can really screw up your credit rating if you do that. They leave the credit card you transferred from open and you end up with a screwed up debt to credit available (is that right?) ratio.

Hmm, but the ratio is based on actual money owed not how many different accounts you have. Right?

I have several clients who have did the credit card at 0% flipping for some time. If you do it right this it should not seriously damage your credit score.

Your credit scores are based on a number of things, a few of which include payments made on time and delinquent payments (by far the most important factor), any current liens or judgements, revolving debt balances, and the number of times your credit is pulled by companies. Having a few unused credit cards should not hurt you much unless you are carrying balances and not making payments on time.

Remember each time you sign up for a no interest rate CC that company has to pull your credit, and if you do that too much, it will damage your credit. If you are doing this with one or two cards (resulting in 1-2 credit checks per year), this won't have a lot of adverse impact from the credit pulls.

But if people are doing this, and then running up these cards and never paying any principal off, this will have a long term bad effect because their debt loads are constantly going the wrong way.

But the #1 factor in building credit is making your payments on time. Every time you make a payment to a CC company, even a minimal payment, if it's on time they report this to the credit bureau and that helps your score. Likewise, if your bill is 2G and you don't have much money and neglect to send in a minimum payment, they will report you being late and that will have a very bad effect on your score.

As a banker, the first details I look at on a credit report (after the scores) are how many late payments people have made in their lifespan. People with perfect credit can usually get approved for much higher payments on a loan than they normally want or can afford.