Let’s continue our discussion of the information found in David Bach’s second book, Smart Couples Finish Rich. In a previous post we went through the first three steps of Bach’s nine steps to creating a rich future for you and your partner. The first three covered evaluating your current financial situation, what your top 5 core values are and how these affected your financial goals, and established some basic financial truths.

Step 4: The Couple’s Latte Factor

This next step addresses a fundamental problem affecting every American household, the problem is not the income, it’s what you spend. Here we can “learn how anyone can become wealth on practically any income.” (more…)


Ever feel like you don’t know enough about your finances?  Not even enough to know what you’re missing? What questions you should be getting answers to? The following quiz will help you to evaluate your finance standing and knowledge. Couples should each take this quiz separately and then compare their answers to determine how accurate of a picture they have about their current financial situation.

True or False:

  • I know our current net worth (i.e. the values of the assets we have minus the liabilities we owe.)
  • I have a solid grasp of what our fixed monthly overhead is, including property taxes and all forms of insurance.
  • I know how my partner feels about our monthly overhead. We have discussed both the size and nature of our regular expenses and obligations, and are comfortable with them.
  • I know how much life insurance my partner and I carry.  I know exactly what the death benefits are, how much cash value there is in our policies (if any), and what rate the money is earning (if applicable). (more…)

In an effort to reduce my debt load, I have taken an additional job in order to increase my accelerator margin payments. The good news is, in the 4 months I’ve been doing this new routine we’ve paid off four credit cards as well as a vehicle loan. The great news is that this new job offers a SEP account. Well, what exactly is a SEP account, is it just a different term for a 401k? Let’s take a look and find out.

Employers will typically offer one of these plans: 401(k), 403 (b), TSA, SIMPLE, SEP, or Keogh.

401(k) is the most popular type of employer sponsored retirement plan. This is also the most complex and costly to maintain for the company. The employer can elect to make a matching contribution to the employees salary-deferral contribution . Within 401(k)’s you can take out loans, set up a vesting schedule, and profit-sharing plan. Maximum annual contributions are $15,500.


I’ve seen the billboards, tuned in to the radio show and have slowly started to give Dave Ramsey a second chance. My friends that are on the ‘Dave Ramsey program’ all love it, and swear by it. So I borrowed a book from a friend, and just finished reading it cover to cover (a feat in itself for someone like me). The book was what I expected, nothing too terriblyTotal Money Makeover new or revolutionary (one of the reasons I decided to borrow it instead of purchase it). His mantra, ‘if you will live like no one else, later you can live like no one else’ is enumerated throughout the pages. Essentially, you need to 1) live on less than you make and 2) only buy things when you can afford them, which means paying cash for the entire amount. (more…)

In October, I wrote a previous post on how I planned to allocate my Roth IRA investments. Well today (1/25/08), after much strenuous research and the market dropping to records lows, I decided now was the time to act. Many of the investments I had been looking at dropped significantly on Wednesday (1/23/08). I felt pressure to buy but I had yet decided exactly on which funds I wanted to buy. Certainly, I didn’t want to act out of haste without properly reviewing the expense ratios and such of each of the investments I was considering. (more…)

It wasn’t until a recent episode of Suze Orman did I fully grasp the potential of IRA’s and the power of compound interest. When you sit down and work out the math it’s really quite amazing how simple steps we can take while we’re young, say, saving $100 a month, can turn into millions by the time we retire.

The Basics:

With Roth IRA’s you can deposit up to $4,000 per tax year. (5k starting in 2008 ) You don’t have to put in that much, it could be $25 a month or $100 a month, whatever you can afford. You put it in with after-tax dollars and it grows tax-free. So that when you pull the money out when you’re 59 1/2 (or later) you don’t owe capital gains taxes on all the interest you’ve earned. Any other regular investments you do have to pay taxes say, if you have stocks/investments outside of a Roth IRA account. (more…)