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Category Archives: Financial Tips

The lowdown on digital US savings bonds

Dear Dr. Don,
What U.S. savings bonds are available at the traditional purchase ratio and yield? Now that paper bonds have become digital, I can’t seem to find any information on buying them at half face value anymore. I’m beginning to think the change in the Series EE purchase system is because the government’s finances are stretched, not just because they’re trying to save money on paper. Can you help me?

Thank you,

Dear Rebecca,

I’m guessing you want your U.S. savings bond gifts to have bigger impact than what you actually spend on them. When you give someone a $50 savings bond, that person is probably not thinking that it only cost you $25. With the new electronic or digital bonds, the gift will reflect the initial investment. In my example, that’s $25. The interest earnings will compound on the initial investment, just as it would with the paper bonds.

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7 Reasons to Not Buy a Home

When I first graduated, I ended up renting an apartment for a year.

From there, I moved in to my first home (which I have since considered to be a bit of a mistake in how big it was and how we over-financed). I bought it direct from the owner. Then I sold it for sale by owner for a small profit.

From there, I bought my second home right before the housing crash, in 2007, and it may have just recently creeped back to the value of my purchase price.

Overall, Ive enjoyed being a homeowner. I like fixing things. I like the responsibility. I like the pride that comes with improving something. I like the freedom to do what I want with it. I havent made money on home ownership. But I havent lost money either.

That being said, Im not pro-home-ownership for everyone. Not even close.

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Plunging annuity rates mean rough ride for pension savers

Pension savers near retirement are being urged to consider putting the brakes on committing their fund to an annuity purchase to avoid paying over the odds for little income.

The rates on annuities, used to convert pension savings into a regular income at retirement, have plunged over the past four years. While there was a slight uptick this year, on the back of rising government gilt yields, which determine annuity rates, more recently hopes of a sustained increase appear to have been dashed by the Bank of England’s statement that interest rates will stay low.

Ros Altmann, pensions expert and former government policy adviser, believes prospective retirees should hold off buying an annuity if possible. “Particularly if they are only in their 60s, as they are currently very poor value,” she says.

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4 Ways to Cut the Medical Bills that will Inevitably Arrive

Health care costs for services, devices, and procedures are inevitable.

Even if youve taken proper preventative health care measures and are covered by insurance, you WILL encounter medical bills at some point.

It might seem as though there is nothing you can do. Lets say your physician recommends a certain procedure and even gives you the name of a doctor/place to get it done. Most of us would simply take the doctors recommendation, get the procedure done where the doctor suggested, not ask questions beforehand, get hit with a huge bill directly or with what the insurer didnt pay (which may or may not be correct), and then hopefully have enough post-tax dollars left in the bank to cover the rest.

Who are we to question any of this?

You should question it.

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Bank of England’s Mark Carney greeted by signs of recovery

Mark Carney enters his first rate-setting meeting as Bank of England governor this week armed with further evidence of Britain’s economic recovery, as a wide-ranging survey signals rising confidence, strong export growth and job creation among UK businesses.

The British Chambers of Commerce report, published on Tuesday morning, suggests that the economy is building towards the “escape velocity” that Carney pledged to oversee when he was appointed. It builds on data released on the Canadian’s first day at Threadneedle Street that suggested Britain’s manufacturers enjoyed their strongest growth in two years in June.

The recent flurry of improved economic news has fanned expectations that Carney and his colleagues will hold fire at the monetary policy committee meeting this week.

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7 strategies to declare financial independence

Show your money who’s the boss

Ever feel like gathering up your bills in protest and throwing them in the nearest harbor?

OK, maybe you don’t have to be that dramatic. But you can declare war on your debt, assert your financial independence — and liberate yourself from fiscal stress.

All with a minimum of fireworks. (Although a parade would be nice.)

Like anything else, financial independence means different things to different people. To some, it means having the cash to buy what they want. To others, it means saving for retirement or a home. And for some folks, it simply means opening the bills without dread.

Whatever your definition, it means you command your money and not the other way around.

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Cutting the Cord: Alternatives to Cable TV

The intellectual and entertainment value of satellite or cable TV is debatable.

There is, no doubt, loads of crap television out there. And if you sit there, channel flipping, and let yourself get sucked in, your time, mind, and soul can atrophy.

There is also some smart, informative, and really entertaining purpose-driven television out there. And if youre selective and smart about how you watch it DVR & skip commercials it can be a good time investment, similar to reading a good book or learning something new and constructive online.

But if youre trying to debate the value of cable TV against the cost (even with the smartest programming schedule), youre fighting a losing battle.

The lifetime cost of cable TV, with its 5% inflation rate, can easily exceed $1 million had it been invested instead (sadly, more than most Americans will ever save for retirement).

For those looking to achieve spectacular financial results or simply keep your head above water, cable TV is simply not in the cords, er..

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