3 Things You Didn’t Know About Your ROTH IRA for 2013

Written by Sam on . Posted in Education, Inspiration, Retirement. 4076 views.

A Roth IRA is an IRS approved retirement account which allows participants to deposit after-tax money into an account that will grow tax-free.  Once the participate reaches the age of 59 1/2, they may withdraw all funds (contributions and earnings) tax-free.  The potential downside of this account is the early withdrawal penalty of 10% if the funds are taken out before the age of 59 1/2.  Despite this downside, there are several tricks & tips that make participating in a Roth IRA a lot more appealing.

Here are 3 things that most potential participants don’t realize about a Roth IRA:

  1. Withdraw Contributions Anytime.  That’s right, one of the advantages of a Roth over a Traditional IRA is that no matter how old you are, you can always withdraw your contributions, penalty and tax free!  Keep in mind that this does not apply to your earnings (returns made off of your contributions).  Because of this, several investment advisers suggest funding a Roth as your “emergency account” – as you’ll get the long term tax benefits while being able to withdraw the contributions at any time.
  2. Short-term Loan.  Also known as a “Tax-free Rollover”, you can withdraw funds (contributions and earnings) from your Roth IRA as long as you put it back within 60 days.  You’re allowed to do this once every 12 months.
  3. Qualified Withdrawals.  The IRS allows several instances where qualified withdrawls may be made before age 59 1/2.  These include:
  • First-time home purchases, subject to a lifetime limit of $10,000 in pre-tax dollars.
  • Higher educational expenses for you and your immediate family.
  • If you’re disabled.
  • If you use the funds to pay unreimbursed medical expenses in excess of 7.5 percent of your adjusted gross income (AGI).
  • To pay health insurance premiums for yourself, your spouse, or your dependents if you’re unemployed for at least 12 weeks.
  • If you elect to receive your funds on a regular distribution schedule, which the IRS calls “substantially equal periodic payments.”

Interested in contributing to a Roth IRA for 2013 (or 2012 before 04/15/2013)? Here are the latest eligibility requirements for 2013:

If your filing status is… And your modified AGI is… Then you can contribute…
married filing jointly or qualifying widow(er)

 < $178,000

 up to the limit

 > $178,000 but < $188,000

 a reduced amount

 >  $188,000

 zero

married filing separately and you lived with your spouse at any time during the year

 < $10,000

 a reduced amount

 > $10,000

 zero

single, head of household, or married filing separately and you did not live with your spouse at any time during the year

 < $112,000

 up to the limit

 > $112,000 but < $127,000

 a reduced amount

 > $127,000

 zero

There are several other advantages to participating in a Roth IRA.  What are some holdbacks that you’re facing?  Are there any other advantages you’d like to share?  Please feel free to express yourself in the comments section below.

8 Things To Buy With Your Tax Refund That Will Make You Wealthier

Written by Sam on . Posted in Inspiration, Personal Finance. 3302 views.

Things to Buy That Will Make You WealthierAmericans love spending their money.  The high we get from buying a flat-screen tv, iPad or new pair of shoes is shocking.  This phenomenon creates a spend vs save competition not only for our paychecks, but also for the biggest single payment most Americans receive:  their tax refund.  The result is most Americans squandering their tax refund on material possessions and missing a great opportunity to create long-term wealth.

There is a trick that can prevent you from consuming your newly received funds (but still giving you that purchase high you require).  The trick is to buy something that will make you wealthier.

Here are 10 things you can “buy” that will increase your wealth.

  1. Buy your debt.  I know, I know, I tricked you…You knew this was going to be the first thing you have to do with your tax refund, sorry.  Think about this tho, by decreasing your interest expense you’re actually increasing your net earnings for the year.  “Earn” an extra 10 or 15 % this year by paying off your debt.
  2. Buy a ROTH IRA.  Opening an IRA account is more than just saving.  Under a ROTH IRA your “after-tax” tax refund grows tax free.  Once you reach age 65, you’re eligible to withdraw all funds without paying tax on the gains.  The tax benefits make this a great account for new investors to learn about investing, potentially free from tax consequences.
  3. Buy home efficiency.  Within the last five to ten years some fields have made giant leaps in efficiency.  Energy Star appliances, tank-less water heaters, insulation and solar panels are just a few household purchases that could decrease your energy costs and whose savings could actually pay for themselves.
  4. Buy a healthier you.  Wanting to join the gym or the country club, but just can’t justify it with your current budget?  Rather than blowing your refund on electronics or a vacation, prepay 6 months in advance for a membership .  Keep in mind that a healthier your is a less expensive you – investing in your health now will financially benefit you down the road.
  5. Buy more schooling.  How satisfied would you feel by using your refund to sign up for online classes or that certification class you’ve been putting off?  Investing in yourself pays great dividends (financially and mentally) and is one of the 7 Ways to Be Seen as an Expert in Your Industry.  What is a form of education you could buy this year?

5 Reasons Why You Won’t Reach Senior-Level Management

Written by Sam on . Posted in Career Advice, Inspiration. 6429 views.

Businessmen Jumping Over Hurdles

Whether you’re a recent college graduate, a middle-manager or an aspiring executive, the odds are not in your favor to be a successful senior-level executive.  Why is that?  The reality is that the jump between middle-management and senior-level leadership requires an uncommon skill set not possessed by most. The good news is that after you’ve identified the obstacles you’re facing you’ll be in a better position to overcome them.

The following article was written from the standpoint of things that I should be doing better if I hope to succeed.  Maybe some of you will also agree that there’s always room for improvement.

Here are five reasons why you may not have what it takes to elevate from middle-management to your dream senior-level position:

  1. You’re not interacting like a leader.  How often do you leave your office and interact with those around you?  I’m not talking about your teammates or people who report directly do you.  I’m talking about the people who you have nothing to gain from.  Malcolm Forbes has a great quote:  “You can easily judge the character of a man by how he treats those who can do nothing for him”.  Senior-level leaders are elevated by their peers (and their peer’s peers) – without their respect, you won’t go far.

    How you can fix this today:  Show your colleagues that you’re accessible by getting out there.  Make the rounds this morning and ask how they’re doing or how their project is going.

  2. You’re afraid of getting into the “trenches”.  All successful managers have at least one thing in common; they know the details of how their company runs.  When’s the last time you shadowed one of your employees?  What’s the last process you implemented to improve efficiency? Get yourself dirty and get down in the trenches – you’ll be a better manager for it.  Failing to learn the intricacies of your company is also one of the 25 Things to Stop Doing Today at Work.

    How you can fix this today:  Don’t be afraid to identify an aspect of your company that you’re not as informed about as you’d like to be.  Next, take a day to sit down with an employee in that department to listen and observe.  I guarantee this experience will be enlightening and filled with several “ah ha, that’s why we do this” moments for you.

  3. You’re not a “numbers person”.  Reaching senior-level leadership is equal parts business skills and finance skills.  You need to be able to read an income statement and a balance sheet.  Your excuse of “I’m just not good with numbers” is not going to cut it when you’re asked how to increase the bottom line.

    How you can fix this:  Step one is to get some form of training.  Even a basic “Financial Accounting For Dummies” book is a great start.  After you’ve grasped the key terms and concepts, take things further by taking a class at your local community college.

  4. You’re not identifying and cultivating talent.  The sooner you realize that the talent surrounding you is an asset, not a threat, the more likely you’ll achieve success.  Few individuals or companies fully embrace and maximize their talent within.  As a result, talent tends to flow outward to the companies that recognize talent.

    How you can fix this:  Involve those with talent and potential in your decision making process.  This applies if you’re asking those above you for help or teaching those below you.

21 Things To Start Doing To Be Happy At Work

Written by Sam on . Posted in Career Advice, Inspiration. 10072 views.

Everyone would like to take steps to be happier at work. While “loving what you do” is important, it’s just as important to set goals and manage expectations. Happiness isn’t a given – it doesn’t happen overnight.

Happiness comes from realizing your potential and accomplishing the goals you set.

Here’s a list of things to start doing today to increase your happiness.

  1. Start focusing on what you can control.  Are you the type of person that gets worked-up and stressed out over the unknown?  Relax.  You’re not going to get fired, demoted, or transferred today – your boss doesn’t dislike you, your coworkers aren’t out to get you.  Rather than focusing on these negative what-ifs, put all of your energy into doing good today.  Avoid filling your head with variables you cannot control, instead take charge of your success by focusing on what you can control.
  2. Start believing in yourself.  Do you know what the difference between you and the person who is going to start the next big things is?  It’s not intelligence, it’s not money, it’s having the confidence to step out on that ledge.  Start believing that you don’t have to stay in the spot you’re currently in.   You have the ability do great things, but will you choose to do them?
  3. Start “putting hooks in the water”.  The only way you can catch a fish (achieve success) without having a hook in the water is by having the fish jump in your boat – and that isn’t easy.  Many of us don’t have any hooks in the water and are just waiting on dumb luck to strike.  Look into that investment property or small business – anything to get your feet wet and brain moving.
  4. Start getting uncomfortable.  That’s right, the more comfortable you are the less you’re growing as a person.  We all know how easy it is to maintain meritocracy by avoiding challenges and new things.  Snap out of this! Volunteer for the harder project to work on.  Challenge yourself today!
  5. Start becoming an expert in your industry.  What’s something you can do to start down the path toward becoming an expert?  Is it writing an eBook?  Volunteering to speak at your company’s next function?  Whatever it is….DO IT!  Experts get’s promoted and recognized (and feel higher levels of job satisfaction).  Here are 7 more ideas on how to become an expert in your industry.
  6. Start building better relationships with your clients.  Networking is essential to success in the business world.  Chances are you’re not fully connecting with your clients or coworkers.  Today, make a phone call, setup a lunch or even just shoot out an email in an effort to deepen a business relationship.
  7. Start organizing your resources.  On a scale of 1 to 10, how organized are you at work?  Do you have easily accessible (and backed up) electronic folders with all of your contacts, forms, projects, etc.?  How well archived are your bulletins, correspondence and emails?  Work on bettering your structure today…an organized desk is an efficient desk!
  8. Starting focusing on the interesting part of your job.  No where does it say that you have to be bored at work – even if you have a “boring” job.  Most of us are not supermodel photographers or record company executives, however, there are aspects of our jobs that are interesting.  Find the interesting in the ordinary and you’ll have a better outlook on your job and life in general.
  9. Start setting real goals.  Quick, what would you like to achieve today…next month….next year?  If your answer is to not get fired or if you’re still thinking about it, chances are you’re going to find yourself in the same spot then that you are now.  Entrepreneurs and executives don’t achieve success overnight, they first set goals and then spend the next day, week or year working toward reaching them.  What’s the first small step you can take today to achieve your goals?
  10. Start being looked at as an innovator.  What is something you could be doing differently today at your job?  Yesterday I created a PDF form for us to use – rather than printing out a form, filling it out and scanning it back in, now we just type it in on the PDF form.  This saved us time and money.  This small tasked gained the respect of my employer and coworkers (more so than any other day-to-day task would have).  Think for a minute about something in your processes that could be more efficient.

12 Tips on How to Become a Badass Negotiator

Written by Sam on . Posted in Education, Inspiration. 9808 views.

The art of negotiation is both a skill and a game.  The person sitting across the table from you is your opponent. Like most games, the more you practice and prepare, the better chance you’ll have of being a better negotiator.  Let’s prepare.

Before you start negotiating, first realize that there are two types of negotiations: Distributive and Integrative.

A distributive negotiation involves a set prize.  Think of it as $100,000 in the middle of the table that must be divided between you and them – anything that goes to them comes out of your share.  These types of negotiations (think of buying a car) can be more stressful, as both parties are trying to “win” by getting a bigger piece of the pie – and neither side necessarily cares if a relationship survives the negotiation.

Conversely, with an integrative negotiation some interests are aligned.  If the parties work together they can increase the size of the prize.  Think of a company partnering with another – combining their resources effectively could result in greater profits for both.  Each party should be sensitive that the surviving relationship may be more valuable than the results of a negotiation.  For example, why beat up your employer for that extra $1000 if they’re just going to be resentful and fire you a week later?

Don’t approach an integrative negotiation with the goals of a distributive.  Identify your long-term goals for the negotiation.  Also keep in mind that both parties can win under each type. Also, it can never hurt to trick your opponent into liking you.

Now onto the actual negotiation.  An efficient negotiation is comprised of four stages:  Preparation, Information Exchange, Bargaining and Closing.  Follow these 12 steps and you’ll be will on the way to kicking crap out of someone in a negotiation:

PREPARATION STAGE – Size up your competition.

  1. Assess the situation.  Ask yourself how much is at stake?  How important is a future relationship to you and your opponent?  If a future relationship is important to both parties, each should compromise for the sake of the relationship.  If the parties are not going to continue doing business together, the more aggressively the negotiation may be pursued.  Know what your walking into and if you should error on the side of compromise or not.
  2. Identify which type of negotiator your opponent is.  Chances are your opponent will fit into one of the following five categories: Avoider, Compromiser, Accommodator, Competitor or Problem Solver.  Identifying the strategy your competitor is going to take will help you foresee any obstacles the negotiation will face.  For example, you may be able to get a better deal when negotiating with an avoider if you can appeal to their desire for a lower stress and a more casual negotiation.
  3. Finalize the goal or purpose of your negotiation.  Prior to going into the negotiation you need to get organized.  Write down your (and the other side’s) three most important issues.  Identify areas of conflict which will need to be resolved.  Set realistic goals.  You shouldn’t go into the negotiation to get “the lowest price”, identify a number that you’ll be happy with.  Setting goals will allow you to be able to walk out of the negotiation knowing if you succeeded or not.

    INFORMATION EXCHANGE STAGE – Fill in the blanks.

  4. Question Effectively.  Begin your negotiation by opening an effective line of communication with your opponent.  Avoid yes and no questions.  The goal is to flush out any information you don’t already have – expose a need or weakness which can be played on later.  Don’t get down to the terms of the deal without getting as much information as possible.  For example, does the car dealer have excess supply this month.   Take your time with this process.
  5. Conceal your weaknesses.  Don’t fall into a trap of letting your opponent know if you’re desperate.  Downplay any urgency or needs they may think you have.

    BARGAINING STAGE – Not as important if you’ve performed an efficient exchange of information.

  6. Anchoring.   Look for opportunities to set favorable numbers or reference points to work off of.  Conversely, avoid  being anchored to an opening offer or arbitrary point.  The less distance you have to go up or down, the more successful your negotiation will be.

The Biggest Thing to Change to Lower Work Stress

Written by Sam on . Posted in Career Advice, Inspiration. 2220 views.

Work is usually your single biggest source of stress. Here are things to change at work, most importantly starting with…

Your Attitude.  Find yourself criticizing management and coworkers?  Depressed about the due date for your latest project?  Stressed that you could get laid-off today?  Well Stop it.  The sooner you realize that negative stress cannot help you, it can only hurt you, the happier you’ll be.  How do you fix this?  Dig deep to realize that staying positive and productive is the only path to happiness.  Remember that the only difference between a good day and bad day is your attitude.

Here are 5 other things that seem small but will add up to a lower-stress day:

  1. Start your day right.  Your drive to work sets the course for your day.  During the holidays, or on days that I know will be particularly stressful, I spend the couple extra bucks to stop and get a flavored coffee or healthy breakfast.  It works for me to start the day off in a positive manner.  Leaving yourself enough time, taking a less congested route to work or listening to relaxing music are all other ways to start your day off right.  Here’s how financially successful people start their day.
  2. Start-up the Exercise Habit.  The more you can move the better you’ll feel.  A lot of us are stuck in jail cell size cubicles, left to stare at a computer screen for 9 hours a day.  Make it a point to print from the farthest printer, walk to a coworker’s office (instead of emailing them) or take the stairs instead of the elevator.  This physical movement will help stimulate your mind and lower your feelings of stress.  Start right now!
  3. Lunch hour.  Stop eating “lunch” at your desk.  Lunch is a great opportunity to regroup and change your point of view.  If you’re not able to leave the office and interact with other coworkers, at least eat your lunch outside or somewhere more inspiring than your desk.
  4. Escape the “Learning Graveyard“.  Have you’ve quit learning at work and now you’re stuck in a cycle of monotony?  Not only can this be extremely stressful, it’s counter-productive to your career.  It doesn’t matter if it is work related or not, pursue a new hobby or certification.  A busy mind is a happy mind.  What’s something that you’ve been interested in learning about or a work related certification you’ve been pushing off getting?

20 Ways to Simplify Your Work Life

Written by Sam on . Posted in Career Advice, Inspiration. 3604 views.

Ways To Simplify Your Work LifeWe all get a little crazy on the job every now and then.  From moms at home to on-call response teams, there are ways to limit the craziness and typical work day stress.  Once you trade the temporary high of battle scars and constant adrenaline, you may find that you actually enjoy your job more than you realized.

Feeling overwhelmed at work today?  Try some of these 20 Ways to Simplify Your Work Life:

  1. Know what you’re capable of. If you’re confident in your ability to do your job, even emergency meetings can’t stress you out.
  2. Don’t repeat any gossip you hear. If you can detach yourself from the gossip chain, you cut the majority of the drama out of your work days.  This is also one of the 25 Things to Stop Doing Today at Work.
  3. Create an enjoyable lunchtime ritual. Listen to music, read a book, picnic on the grass, or just enjoy your leftovers.  Let your mind calm down and mark the day’s halfway point.
  4. Keep contact information easily accessible. Any phone numbers that could be urgent should be kept close at hand in a single location.  Day planner, cell phone, Outlook contacts, or index card: do whatever works for you, but keep that information available to avoid turning routine calls into desk-tossing panics.
  5. Clear your desk of anything that’s not necessary, like stacks of catalogs, outdated correspondence, and yesterday’s tea mug.  Keep a personal memento or two on your desk, but make sure the items add meaning to your life, like a family picture or an object that makes you smile or reflect.  Read Getting Things Done: The Art of Stress-Free Productivity.
  6. Always have an update for your supervisor. Always.  Even if it’s something trivial, be ready to answer the “What’s new around here?” or “What’s going on in your department today?” question.  It’s a great way to build trust.
  7. Shorten your task list.  I like to keep two task lists, one for ongoing things that need to be handled at some point and one for what’s on the docket today.

15 Financial Life Lessons Your Parents Forgot To Teach You

Written by Sam on . Posted in Inspiration, Personal Finance. 7139 views.

Whether it’s matters of money, love or health, certain life lessons transcend all boundaries.  Some of us are looking for guidance to follow ourselves – others are searching for advice to pass on to their kids.  By blind luck some of us had parents who instilled most of these life lessons into us as we grew up – unfortunately, others weren’t as lucky.

Regardless of if you’ve heard these before or not, from today on you have the chance to better yourself and those around you.  Here’s a list of life lessons to both follow yourself and to pass on to your kids:

  1. A good reputation is more valuable than money.  Warren Buffet once said: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”  Putting people first is some of the best financial advice you can follow.  It’s people that help you get that promotion or keep customers coming back to your start-up business.  Don’t forget that along your way – it’s one of the Things Successful Entrepreneurs and Executives Do Differently.
  2. Nothing worthwhile comes easy.  Human nature is to take the easy way out – try to fight this.  Why?  Because I guarantee that you’ll only achieve true happiness through accomplishment and realizing your potential.  Anyone who’s inherited or been given money has learned this lesson.  Easy money won’t earn the self-respect you desire – hard work will!
  3. Patience is the best remedy for every trouble.  Like anything worthwhile in life, nothing good happens quickly.  Sometimes it’s the raise you’re looking for at work.  Other times it’s the adoption papers you need finalized.  Recognize (and accept) when events are out of your control – embrace the fact that the marathon of life is made up of thousands of small steps.
  4. Avoid the “unknowledge” trap.  Do your best to avoid ruts of “unknowledge”; where you’ve quit learning within your professional and personal lives (one of the 25 Things to Stop Doing At Work Today).  Keep maximizing learning opportunities within your industry, but also set a personal goal to obtain a new license or skill outside of your profession.  Invest in yourself – I try to think of new knowledge gained as a unique perspective which can serve to further enlighten you!
  5. Debt is the slavery of the free.  Most simply, avoid credit card debt you can’t immediately payoff!  Nowadays it’s so easy to just put it on credit and worry about it later – fight this urge.  The only form of personal debt you should see as acceptable is a Mortgage/Deed of Trust – everything else is financially wasteful.
  6. Persistence pays off.  If ambition is the path to success, persistence is the vehicle you arrive in.  You’ve undertaken this venture, now don’t be discouraged by the lack of immediate results or success.  It’s those who keep with it after the excitement and newness wears off that reap the long-term benefits.  Remember, if it was easy and happened overnight, everyone would be doing it.