Ok boys and girls, listen up! Its time for the dog! (that’s me!)
Today I’m going to talk to you about protecting yourself from scams. Now, if there is one thing I hate—its people who try to scam you out of your hard earned kibbles and bits. I mean, you run around all day playing with your chew toy, and then they come along… and eat your food (and take your doggy treats). What jerks…
There are three main types of scams you need to be aware of: the door to door scam, the telephone scam, and the email scam. Now before I discuss these, I want to make it clear, that the best way to protect yourself from these wretched things is to check your account balances every day. Yes, EVERY DAY. Why? Because it takes only seconds to do, and if something goes wrong—you need to know about it as soon as possible! That way you can cancel the credit card, or bark to your bank about the debit card, or whatever it is!
The First Scam: THE DOOR TO DOOR SCAM
In this scam, someone will come to your door asking for you to buy something. If you have a trusty dog like me, he will start barking! (this is your first sign something is wrong) They may say they are a college student trying to earn credits for a vacation, extra credit, job experience, or something similar. They may say they are a bug spraying company, or maybe they will be selling products of some sort (magazines, makeup, knives… pretty much anything you can think of). But there is one dead giveaway that they are trying to scam you… they will ALWAYS ask for money after their sales pitch—be it a check, a credit card, or cash. There is no way to avoid people coming to your door. But the best thing to do is to NEVER buy ANYTHING from people who come door to door. That way there is no way you will ever get scammed. This is the only concrete way to never be taken advantage of. If they are selling a service or item that you actually would like, then go research the item after they have left, and go buy it from a legitimate business. Never buy ANYTHING from people who go door to door.
The Second Scam: THE TELEPHONE SCAM
In this scam they will contact you by phone. They will say they are your bank, your credit card company, your friend, an investment advisor, or any number of things. They may even tell you a “hot” stock tip! (hint: no one to be trusted will ever call you to give you a stock tip—this is a stock pumper calling to try to take your money—never invest in what they recommend—I mean if it’s so great, then why call and tell YOU about… someone they don’t even know?) Usually the person on the other end will ask for your credit card number, your checking account number, or other personal information. The secret to avoiding these scams is to give out NO information to any company or service that CALLS YOU. Now it is different if YOU CALL THEM (like your bank or your investment firm), then it is OK to give out info—because you made contact first! But NEVER EVER give out any credit card numbers, debit account numbers, checking account numbers, or other personal information to someone who calls you on the phone. I don’t care if they say they are your bank! Just don’t do it! (Or growl and bark at them! WOOF!)
The Third Scam: THE EMAIL SCAM
The most popular one of these is the Nigerian Prince contacting you to transfer a gazillion dollars into your account in exchange for your checking account number. Please fellow doggies, don’t fall for this one (because this is the dumbest scam of all). Another common one is an emailed “stock tip,” just like in the telephone scam, don’t listen to this “stock tip.” This stock tip is all about getting you to invest in the stock, and then the other party will dump his shares and take your money (called a pump and dump). Email scams are various and hard to track, therefore the best way to really protect yourself against these malicious attacks is to NEVER send out information to anyone who YOU didn’t contact first. Don’t send out any monetary info! Also, be very careful of fake bank or investment firm emails. These emails will pretend to be your bank/investment firm, and then they will ask you for more information about your account. Trust me, banks and investment firms never contact YOU to learn your account information (I mean WHY WOULD THEY—THEY SHOULD ALREADY HAVE IT… because they ARE your bank after all). Don’t ever email credit card numbers, debit card numbers, checking account numbers or any other information to someone who sent you an email first or to anyone you feel might take advantage of this knowledge.
And finally let me warn you to be careful out there! The world is a big dangerous place—just the other day I was climbing on a table to eat my human’s bowl of cereal (when she wasn’t looking), but when I saw my reflection I was so startled that I fell right on my face! Woof! Sometimes I’m a clumsy doggie! Time for a nap.
Thursday, April 29, 2010
Wednesday, April 28, 2010
In case of catastrophe... don't forget the pup! (me)
Ok guys and gals, yesterday I barked about the importance of a good emergency fund! Today I am going to bark about a different topic altogether. I’m going to bark about the emergency fund that you don’t know about! Woof! I call it “the catastrophe fund.” But before I discuss it, I must stress to you the importance of having a fully funded normal EMERGENCY FUND, parked in a savings or money market account! The catastrophe fund is NO substitute for your emergency fund!
What is the catastrophe fund? Simple, its all your sources of income or wealth that you could fall back on excluding your savings/money market account emergency fund. This includes your 401K, IRA, home equity, taxable investments, home’s valuables, credit card accounts, personal loans, and everything else you believe is valuable (and stuff in your home you could sell to make money if you had too!). It’s basically your assets, excluding your savings/money market account emergency fund. It’s what you would have to fall back on in the slim chance that your emergency fund runs out of money (although this is very unlikely if you funded it like I told you to in my previous post).
Here’s how to calculate your catastrophe fund, just fill in the following blanks, then add all the numbers up:
1. How much is in your 401K? _____________
2. How much is in your roth IRA? ______________
3. How much is in your traditional IRA? _______________
4. How much credit do you have available (credit cards…etc)? ______________
5. How much home equity do you have in your home? _________________
(home equity = Homes Actual Value – What you owe on it)
6. What’s the value of your current investments (mutual funds…etc)? _______________
7. What’s the value of any personal loans you have? _________________
8. If you were to sell your valuable items today, how much would you make? __________
Now add all these numbers up. That’s your catastrophe fund! That easy! Woof!
This shows you that you have a lot of sources of income to draw upon if you were to run out of money in your emergency fund!
This should help to ease your worries, don’t worry, you are probably a lot richer than you think you are!
Woof Woof! Time for me to go back to my dog house.
What is the catastrophe fund? Simple, its all your sources of income or wealth that you could fall back on excluding your savings/money market account emergency fund. This includes your 401K, IRA, home equity, taxable investments, home’s valuables, credit card accounts, personal loans, and everything else you believe is valuable (and stuff in your home you could sell to make money if you had too!). It’s basically your assets, excluding your savings/money market account emergency fund. It’s what you would have to fall back on in the slim chance that your emergency fund runs out of money (although this is very unlikely if you funded it like I told you to in my previous post).
Here’s how to calculate your catastrophe fund, just fill in the following blanks, then add all the numbers up:
1. How much is in your 401K? _____________
2. How much is in your roth IRA? ______________
3. How much is in your traditional IRA? _______________
4. How much credit do you have available (credit cards…etc)? ______________
5. How much home equity do you have in your home? _________________
(home equity = Homes Actual Value – What you owe on it)
6. What’s the value of your current investments (mutual funds…etc)? _______________
7. What’s the value of any personal loans you have? _________________
8. If you were to sell your valuable items today, how much would you make? __________
Now add all these numbers up. That’s your catastrophe fund! That easy! Woof!
This shows you that you have a lot of sources of income to draw upon if you were to run out of money in your emergency fund!
This should help to ease your worries, don’t worry, you are probably a lot richer than you think you are!
Woof Woof! Time for me to go back to my dog house.
Tuesday, April 27, 2010
OMG we are out of DOGGY TREATS! EMERGENCY!
Ok listen up humans!! Today is all about emergency funds! Let me ask you a simple question…
What would you do if something bad happened to your human?
How would you survive?!!? Let’s say he was gone for days! Or worse—MONTHS! You may have to beg for food (how degrading for a cute cuddly puppy!) Or worse, you might starve! WOOF WOOF! NOOOO NOOOO!
However, If you had a properly funded emergency fund (of doggy treats) then you would fare just fine. This is why I always keep a stash of doggy treats in my bed (under my squeaky toy… shhhh… don’t tell MY human!)
But I strongly warn you, if you are one of those unfortunate humans living paycheck to paycheck, then you are in serious trouble. You need to get an emergency fund started RIGHT AWAY.
Take a look at this cool questionnaire I have made for emergency funds. This will tell you how much you need, and for how many months. It is based on income, job stability, and family.
1. Everyone = Needs an emergency fund of at least 2 month
2. Kids = Add one month for each kid you have
3. Significant other has job = Do not add anything
4. Significant other does not have job = Add 2 months
5. If you make less than $30,000 a year = Add one month
6. If you make between $30,000 - $60,000 a year = Add two months
7. If you make between $60,000 - $120,000 a year = Add three months
8. If you greater than $120,000 a year = Add 4 months
9. If you feel stable in your job = Add nothing
10. If you do not feel stable in your job = Add 2 months
There you have it, its that easy! (The hard part will be saving up this amount)
The max amount you can add up to from this analysis is probably about 12 months. The lowest you can end up with is 3 months.
Now, you might be questioning my logic. "But Alex, isn’t more money for an emergency fund better?" The answer is no. No its not. Because your emergency fund should be stored in a savings account. Savings accounts have incredibly low interest rates. You want your money to work for you. You need to invest the money that you haven’t put in a savings account. I will discuss this in a future blog post.
“But Alex, I understand why you have differences for emergency funds for those with dependents, but why do you vary it based on income?” This is simple. Its because based off income you have better employment prospects. It is very likely that an investment banker will have a harder time finding a job that pays $120,000+, than someone who works at McDonalds and makes $6/hour. Trust me, it is EASY to get some of these low paying jobs (i.e. pizza delivery). Also, it will take these low earners a lot longer to create their emergency fund. And I don't want them spending their whole life trying to do it. They need to invest, and if they listen to my advice they will be fine.
What would you do if something bad happened to your human?
How would you survive?!!? Let’s say he was gone for days! Or worse—MONTHS! You may have to beg for food (how degrading for a cute cuddly puppy!) Or worse, you might starve! WOOF WOOF! NOOOO NOOOO!
However, If you had a properly funded emergency fund (of doggy treats) then you would fare just fine. This is why I always keep a stash of doggy treats in my bed (under my squeaky toy… shhhh… don’t tell MY human!)
But I strongly warn you, if you are one of those unfortunate humans living paycheck to paycheck, then you are in serious trouble. You need to get an emergency fund started RIGHT AWAY.
Take a look at this cool questionnaire I have made for emergency funds. This will tell you how much you need, and for how many months. It is based on income, job stability, and family.
1. Everyone = Needs an emergency fund of at least 2 month
2. Kids = Add one month for each kid you have
3. Significant other has job = Do not add anything
4. Significant other does not have job = Add 2 months
5. If you make less than $30,000 a year = Add one month
6. If you make between $30,000 - $60,000 a year = Add two months
7. If you make between $60,000 - $120,000 a year = Add three months
8. If you greater than $120,000 a year = Add 4 months
9. If you feel stable in your job = Add nothing
10. If you do not feel stable in your job = Add 2 months
There you have it, its that easy! (The hard part will be saving up this amount)
The max amount you can add up to from this analysis is probably about 12 months. The lowest you can end up with is 3 months.
Now, you might be questioning my logic. "But Alex, isn’t more money for an emergency fund better?" The answer is no. No its not. Because your emergency fund should be stored in a savings account. Savings accounts have incredibly low interest rates. You want your money to work for you. You need to invest the money that you haven’t put in a savings account. I will discuss this in a future blog post.
“But Alex, I understand why you have differences for emergency funds for those with dependents, but why do you vary it based on income?” This is simple. Its because based off income you have better employment prospects. It is very likely that an investment banker will have a harder time finding a job that pays $120,000+, than someone who works at McDonalds and makes $6/hour. Trust me, it is EASY to get some of these low paying jobs (i.e. pizza delivery). Also, it will take these low earners a lot longer to create their emergency fund. And I don't want them spending their whole life trying to do it. They need to invest, and if they listen to my advice they will be fine.
Monday, April 26, 2010
How to stay on the leash (control your spending!)
Ok humans, listen up, I have lots of doggie advice to dispense today! The first thing I am going to talk about it how to cut down on your spending. If you are living paycheck to paycheck, or if you just can't keep up with all those credit card payments just adding up-- do not worry! There IS a solution! Don't let the credit card companies dictate how you live your life. Be free from debt and have peace of mind.
"But Alex! How do I accomplish such a task?"
Silly humans! Its all about WILLPOWER. Yes WILLPOWER!
Just ask yourself, do you REALLY need all those nice clothes? Do you REALLY need all those big screen TV’s, private boats, giant flibba flabbas? NO WAY! You don’t need that crap. Listen, all you really need to survive is the love of a GOOD DOG (and food, water, shelter, and companionship… but those are less important than having a kick ass dog like me).
Don’t listen to the pundits. They will tell you—Oh no if you want to control finances you have to cut up your credit cards! But I tell you NO! Don’t listen to those guys! Cutting up your credit cards/cancelling your account is a terrible idea! Doing that will hurt your credit score! I should know, I have an excellent credit score (or at least my owner does). If you ever want to rent an apartment, if you ever want to get a nice house, if you ever want to start a small business, if you ever want to do a NUMBER OF THINGS… YOU WILL NEED A GOOD CREDIT SCORE. I don’t make the rules in life, I just tell it like it is.
“But Alex, that’s retarded, credit just measures how much a person spends!”
This is not true. Making a few simple purchases on your credit card at least once every three months and then paying them all off will be all you need to do to develop good credit. The important part of this is PAYING THEM OFF. NEVER… EVER… allow these charges to roll over to the next month. That’s what a BAD DOG would do. Not a cute cuddly dog like me! Because if you do, you will incur interest rates that are out of this doghouse! I’m talking interest rates that can exceed 30%!!! (however, if it is an emergency you might have to incur charges just to survive, this will be discussed in a later doggy post).
Now let me get back to the main topic of this post. WILLPOWER. Repeat it with me—WILLPOWER, WILLPOWER, WILLPOWER. The secret to controlling your spending is controlling your willpower. If you would begin to view every dollar you spend as an investment, then you would not squander your money as much. If you have the willpower to stop buying little trinkets that you don’t really need, then you will surely amass a great amount of wealth. Just ask yourself, “could this dollar be spent more efficiently in another location?” If it could, then do so.
Have the willpower to stop your spending and invest wisely!
"But Alex! How do I accomplish such a task?"
Silly humans! Its all about WILLPOWER. Yes WILLPOWER!
Just ask yourself, do you REALLY need all those nice clothes? Do you REALLY need all those big screen TV’s, private boats, giant flibba flabbas? NO WAY! You don’t need that crap. Listen, all you really need to survive is the love of a GOOD DOG (and food, water, shelter, and companionship… but those are less important than having a kick ass dog like me).
Don’t listen to the pundits. They will tell you—Oh no if you want to control finances you have to cut up your credit cards! But I tell you NO! Don’t listen to those guys! Cutting up your credit cards/cancelling your account is a terrible idea! Doing that will hurt your credit score! I should know, I have an excellent credit score (or at least my owner does). If you ever want to rent an apartment, if you ever want to get a nice house, if you ever want to start a small business, if you ever want to do a NUMBER OF THINGS… YOU WILL NEED A GOOD CREDIT SCORE. I don’t make the rules in life, I just tell it like it is.
“But Alex, that’s retarded, credit just measures how much a person spends!”
This is not true. Making a few simple purchases on your credit card at least once every three months and then paying them all off will be all you need to do to develop good credit. The important part of this is PAYING THEM OFF. NEVER… EVER… allow these charges to roll over to the next month. That’s what a BAD DOG would do. Not a cute cuddly dog like me! Because if you do, you will incur interest rates that are out of this doghouse! I’m talking interest rates that can exceed 30%!!! (however, if it is an emergency you might have to incur charges just to survive, this will be discussed in a later doggy post).
Now let me get back to the main topic of this post. WILLPOWER. Repeat it with me—WILLPOWER, WILLPOWER, WILLPOWER. The secret to controlling your spending is controlling your willpower. If you would begin to view every dollar you spend as an investment, then you would not squander your money as much. If you have the willpower to stop buying little trinkets that you don’t really need, then you will surely amass a great amount of wealth. Just ask yourself, “could this dollar be spent more efficiently in another location?” If it could, then do so.
Have the willpower to stop your spending and invest wisely!
Wednesday, April 21, 2010
Dave Ramsey? Suze Orman? Jim Cramer? Who Cares.
Ok listen up humans! Even though I'm a cute cuddly doggy, I know a lot more than you might think about money/doggy treats. I've managed my doggy treats in such a way that now I have over $6,500,000 doggy treats. That's enough to last a little pup like me the rest of my life (or at least 20 minutes if I get REALLY hungry!)
The advice I will dispense will be full of only CRITICAL and VALUABLE information-- unlike a lot of popular financial counselors these days (hint-- see above title). Why do I disagree with those that so many people put their trust in? Well, for a couple simple reasons...
Dave Ramsey - If you listen to his show, you will find he is really a great human. It honestly sounds like he is trying to help people and I really respect him for MOST of his advice. However, there are several holes in his theories. The first of which is that someone should pay off their debts (credit card...etc) BEFORE they create a 6 month emergency fund. This just doesn't make any sense. Whether Dave agrees or not, it doesn't change the fact that credit cards are useful in stressful situations-- but credit card companies can drop you at anytime. While an emergency fund is cash! Cash! WOOF! CASH! Cash is KING! No one can take cash away from you in an emergency! If you spend all your time paying off debt, and then lose your job, what will you do? Will you turn to more credit cards (because you have no money you will default on payments and your credit cards will be eliminated). Then what will you do? You will have NO money to fall back on.
Also, he doesn't specify how big a person's emergency fund should be. Listen, everyone's emergency fund should vary based off of their job stability, status, and selection. This will be explained in future blog posts, but think about it... do you think it is easier to find a job at mcdonalds? or as an investment banker? Obviously the person working at McDonalds could probably get by with a 6 month emergency fund-- or possibly even less! However, the investment banker will have a VERY tough time trying to find a similar job if he was to lose his (as there are more jobs flipping burgers than managing investments). He might be out of work for over 12 months-- or worse-- more! The recent recession proved to us the importance of emergency funds. And it is IMPORTANT to tailor your emergency fund to your current situation!
Suze Orman - Don't even get me started on this woman. Her advice is so simplistic that anyone could dispense it. It doesn't take a rocket scientist to tell people who spend too much money how to get their spending under control (HINT-- SPEND LESS MONEY! *Slaps tail against head*). Not only does she give idiotic basic advice, but she touts her financial prowess to the world. This is just a fairy tale. She got a degree in sociology for gosh sake. Babysitters make more money than sociology majors. Give me a break. Even I make more doggy treats then her, and I spend most of my time in my pin playing with my chew toys.
Jim Cramer - Oh please, please, I am begging don't listen to this buffoon. There is an actual stock fund that shorts his investment recommendations. Almost every stock he talks about on his show goes down in value (maybe after the initial bump). I'm not even sure if he looks at fundamentals as often times his recommendations seem to be based on "feelings" alone. Would you take advice from a stock analyst who made all his predictions using a crystal ball? Woof! No! Then why listen to this guy? Please watch his show for AMUSEMENT ONLY.
And that's the doggy facts for today. Time for a walk! Woof!
The advice I will dispense will be full of only CRITICAL and VALUABLE information-- unlike a lot of popular financial counselors these days (hint-- see above title). Why do I disagree with those that so many people put their trust in? Well, for a couple simple reasons...
Dave Ramsey - If you listen to his show, you will find he is really a great human. It honestly sounds like he is trying to help people and I really respect him for MOST of his advice. However, there are several holes in his theories. The first of which is that someone should pay off their debts (credit card...etc) BEFORE they create a 6 month emergency fund. This just doesn't make any sense. Whether Dave agrees or not, it doesn't change the fact that credit cards are useful in stressful situations-- but credit card companies can drop you at anytime. While an emergency fund is cash! Cash! WOOF! CASH! Cash is KING! No one can take cash away from you in an emergency! If you spend all your time paying off debt, and then lose your job, what will you do? Will you turn to more credit cards (because you have no money you will default on payments and your credit cards will be eliminated). Then what will you do? You will have NO money to fall back on.
Also, he doesn't specify how big a person's emergency fund should be. Listen, everyone's emergency fund should vary based off of their job stability, status, and selection. This will be explained in future blog posts, but think about it... do you think it is easier to find a job at mcdonalds? or as an investment banker? Obviously the person working at McDonalds could probably get by with a 6 month emergency fund-- or possibly even less! However, the investment banker will have a VERY tough time trying to find a similar job if he was to lose his (as there are more jobs flipping burgers than managing investments). He might be out of work for over 12 months-- or worse-- more! The recent recession proved to us the importance of emergency funds. And it is IMPORTANT to tailor your emergency fund to your current situation!
Suze Orman - Don't even get me started on this woman. Her advice is so simplistic that anyone could dispense it. It doesn't take a rocket scientist to tell people who spend too much money how to get their spending under control (HINT-- SPEND LESS MONEY! *Slaps tail against head*). Not only does she give idiotic basic advice, but she touts her financial prowess to the world. This is just a fairy tale. She got a degree in sociology for gosh sake. Babysitters make more money than sociology majors. Give me a break. Even I make more doggy treats then her, and I spend most of my time in my pin playing with my chew toys.
Jim Cramer - Oh please, please, I am begging don't listen to this buffoon. There is an actual stock fund that shorts his investment recommendations. Almost every stock he talks about on his show goes down in value (maybe after the initial bump). I'm not even sure if he looks at fundamentals as often times his recommendations seem to be based on "feelings" alone. Would you take advice from a stock analyst who made all his predictions using a crystal ball? Woof! No! Then why listen to this guy? Please watch his show for AMUSEMENT ONLY.
And that's the doggy facts for today. Time for a walk! Woof!
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