How to retire rich and live a happy life.

As many other teenagers, about 25 years ago, I thought about the future. From the very early point of my life I always enjoyed working, but I always wanted to have an option of not having to work. Twenty five years later, I find myself still working and enjoying my work, but I also feel that I am moving closer to my goal. My secrets are as following: 1) Select the type of work that you enjoy. 2) Be the best at what you do. 3) Spend less than you earn 4) Education yourself about investment.

Select the type of work that you enjoy: This is very important. Most of us have to work for a living, so we might as well do what we like to do best. In my case that means working with computers and technology, while interacting with other smart people. If you are doing the type of work that you like, you might even feel a little guilty getting paid for it (do not worry – take the money). I recall letting my employer know a few years ago, that I would be willing to do the work that they were paying me for free, because it was a lot of fun and I was learning many new things in the process.

Be the best at what you do. If you decided to do the type of work that you enjoy you might as well be the very best at what you do. Regarding of your current role or position always act like the CEO. Make sure that you spend your time very focused on key value-added activities. Never just go through the motions, be very deliberate about your actions. That type of persistence gets notices and pays off big time in the long run.

Spend less than what you earn. I met people that earned six digit incomes year after year and they were always broke. Do not get me wrong, they owned nice homes and had fancy cars, but they really were not wealthy. They always managed to spend more than they earned. I also had a pleasure of meeting people that did not make a very high income, but they managed to always make saving a priority. If you can get yourself into a habit of spending less than you are earning (and investing the rest), you will find yourself not worrying about your financial future. That’s one of the sure ways to live a happy life. After all, who want to worry about their financial future all the time.

Education your self: We are lucky. Today we can get tons of free and almost free information. We have access to magazines such as Money, SmartMoney, Kiplinger’s Personal Finance, Bottom Line Personal, Forbes, and Forture – most of these cost $10 to $20 per year and are available in your local library. There are tons of blogs and financial websites, and the there are book and audio books. Education yourself using the resources above will help you generate more yield from your savings. After all it takes a lot of work to generate money, and even more work to get your money to work for you.

Good Luck!
whynotbethebest [at] gmail.com
http://investing4future.wordpress.com

The new math of paying for college

Check out savingforcollege.com.com

It turns out that P.A. offers a deduction of state plan and out of state plans. Also, there is the independent 529 plan that let’syou buy future college credits at today’s prices with a discount and if your kid does not use the school, you get a refund. Once your kid gets in in 12th grade, you could prepay for the entire 4 years and get a discount (pay for all four years at the current rate while child is still in high school)

Kiplingers, Oct, 2006, p.79

What would you bet your money on

Michael steihardt would buy transwitch – txcc $2

Smart Money, June 2006, p.89

Selling your home

There are at least 3 ways to go:

1. Sale by owner – do it yourself – use tools like www.owners.com or forsalebyowner.com

2. Use a discount broker likewww.help-u-sell.com

3. Use a full service broke

high yeilding blue chips

When stock price sinks, dividend yeild rises. So, the best time to buy blue chip stocks is while the price is depressed and collect dividend while the price rises. Look for the following criteria:

Earning growth: Increased earnings for the last 7 of 12 years

Liquidity: at least5 million shareholders and 80 institutinal investors

Strong S&P rating

Long dividend history: at leat 25 consecutive years

Buy at the right price: WHen yeilds are above historical averages. Sell when yeild is below historical average. Typical 5 – 7 years
Bottom Line, Oct 1, 2006

tax free income

Starting in 2006, set aside $4,000 per person in IRA account (not tax deductable) and in January 2010 convert to Roth IRA. Only pay taxes on the generated income and pay 1/2 of the bill on 2012 and the rest in 2013aug

Small company stocks

Ed Farrell, 60 likes to buy bargain-priced stocks of small companies.  His record is 14.4% annualized over  21 years. He says that key is to know when to sell. For example when P/E makes stock to expensive.

Aug, 41

Blue Chips

Vince 75, likes to buy and hold. He likes GE and Microsoft.  Key need to diverisfy.
Aug, p. 38

Mutual funds

Jeff Blades, 45, likes fund with low annual expenses and no sales charge. Look for a managers with a long and good track record.  Liek Vanguard 500 Index, and Vanguard Healthcare. Aug. p.45

Undervalued small company strategy

Brett Platt, who is 34, had return of 30%+ since 1999. He focused on 9-11 stocks, read Intelligent Investor by Benjamin Graham and everything by Warren Buffett. Spend 40-50 hours researching each stock. He loves business trusts that pay out profits toshareholders every year. He like to visit www.valueforums.com to get ideas. Aug 2006, p. 43