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175 Past Due – No More Free Lunches (Or Banks)

by Derek Sisterhen on October 8, 2011

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Past Due: Radio 175 – No More Free Lunches (Or Banks)

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Greg has been reading the news and seeing how banks are beginning to charge for previously free services. In particular, he noticed that Bank of America is preparing to charge customers $5 a month to use their debit cards. Greg asked: “First, how did this happen (that banks are charging fees like this)? And second, what does this mean for an average guy like me? How should I be vetting my banks?”

These are great questions. Oftentimes we assume that our bank has our best interest at heart, but we forget that they work for shareholders (which is why it’s a good idea to have your financial institution(s) in your mix of mutual funds, too). When things change, we figure the bank is out to get us; but the reality is that they need us, or else they wouldn’t be in business.

Today we discussed:

1) How banks actually work; why they offered free services for so long and what recent regulatory changes are forcing them to do differently.

2) The three questions you should ask to determine if your bank relationship fits your needs.

If you put a premium on relationships – having a banker that knows your name – recognize that those services cost money and may require you to pay for them. If you prefer free self-service banking options, just remember that you get what you pay for.

If you have a specific question, I’d be happy to answer it and further cultivate the wisdom of the Past Due Radio masses. The experiences of our listener base provide plenty of insight we all can learn from; don’t hesitate to ask – I’m happy to help!

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172 Past Due – How Am I Ever Going To Retire?

by Derek Sisterhen on September 12, 2011

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Past Due: Radio 172 – How Am I Ever Going To Retire?

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How am I ever going to retire? I’ve probably gotten that question a hundred times over the past few years. Given the Great Recession and market volatility, it’s easy to understand the concern of so many around us that they won’t have enough money for life after work.

Today we discussed some of the flawed logic behind the notion of “retirement”. I shared some of the wildly outlandish visions I had for my own retirement at one time, and how the force of our culture plays a big role in creating a discontented spirit toward the later years in life – particularly if savings is low.

We also covered:

1) A recent study showing that if most people had to pay for the kind of retirement they desire, they would need annual retirement income of 135% of pre-retirement income; talk about expensive taste!

2) The math Certified Financial Planners use to calculate how much you’ll need in savings in order to withdraw an annual “income” similar to your former income in your retirement years.

3) The notion that one should never retire, but use their vast experiences and skills to impact those around them and their community.

If you have a specific question, I’d be happy to answer it and further cultivate the wisdom of the Past Due Radio masses. The experiences of our listener base provide plenty of insight we all can learn from; don’t hesitate to ask – I’m happy to help!

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161 Past Due – Downsize or Refinance to Boost Nest Egg?

by Derek Sisterhen on June 12, 2011

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Past Due: Radio 161 – Downsize or Refinance to Boost Nest Egg?

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Tom and Denise are dealing with a conundrum: Should they refinance their house to a great, low interest rate and pay it off in 15 years, or should they sell it, downsize, and use the freed up cash flow to fund other retirement savings? They’re in their mid-fifties and are beginning to feel the pressure of retirement.

The situation they find themselves in is very common among American couples in this age group. We’ve believed for a long time that having a house – especially a paid-for house – at retirement is a crucial component of our retirement nest egg. However, given the recent upheaval in the real estate market, many have found themselves staring at a cracked and scrambled nest egg.

Today we addressed:

1) Whether real estate should play as significant a role in our retirement portfolio as previous generations believed.

2) What the net gain in value to their overall retirement portfolio would be if they refinanced.

3) What the potential for gains would be if they chose to downsize.

Sometimes we have to be reminded of simple investing concepts like diversification in order to make the best decisions for our long-term financial plan.

Kids & Money Contest: I’m looking for stories of parents teaching their kids about managing money and understanding how money works. If you have a great story (humorous, big life lesson, etc) of what to do – even what not to do – please send it to mailbag@pastdueradio.com by Sunday, June 19th with “Kids Money Content” in the subject line. Entries will be gathered for the next few weeks and the winner will receive Junior’s Adventures, the boxed set of money lessons for children by Dave Ramsey, and a copy of my book, Get Naked: Stripping Down to Money & Marriage.

If you have a specific question, I’d be happy to answer it and further cultivate the wisdom of the Past Due Radio masses. The experiences of our listener base provide plenty of insight we all can learn from; don’t hesitate to ask – I’m happy to help!

Today’s Mentionables:

Episode 154 – Robert Kiyosaki’s Dad & Credit Scores Banks Like – In this episode, we discussed all the expenses that go into owning a home that we typically ignore when considering our “return on investment”

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Automate It

by Jaime Thompson on December 17, 2010

A lot of us live our lives on autopilot. Wake up, get dressed, drink coffee (if you have young kids like me, lots of coffee), head to work, do the daily grind, come home, dinner, TV, bed. I’m not necessarily encouraging this as a lifestyle, but lets face it, we as Americans are pulled towards routine. Are you applying that auto pilot mentality to your personal finances? If not, why not? It allows you to stop spending time on the minutia of bill paying and gives you more time for fun things! Plus it eliminates late fees, credit report dings, the scramble for a stamp, the hand cramps from writing out countless checks. Ok, hopefully you don’t have so many bills that last one applies.

And here is the neat thing about automation, we can apply it to saving too! Remember that old adage pay yourself first. Get your emergency fund savings, retirement planning, and investing on auto pilot. We can even apply it to other saving goals…Christmas, vacations, home improvements. Remember, most of personal finance isn’t all about dollars and cents, it’s about behavior. If we automate our savings and bill paying, we know what’s left in our account each month is for the fun stuff. Before long you won’t even miss the money and it will start making money for you by accruing interest and ultimately compounding. Yes, we still need to budget each month, but we don’t need to spend hours paying the same bills every month. And how many times have you said “I should really start saving for that vacation” or “I really should increase my retirement contributions”. Stop talking start doing, put the boring stuff on auto pilot and take the wheel on the adventure of life!

(photo by mike miley)

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Credit Union v Bank

November 5, 2010

So, what’s the difference and why does it matter to you? A banks primary purpose is to make money for their investors and stock holders. Unless you hold a stock certificate with your bank’s name on it, they are not in business to help you make money. A Credit Union isn’t trying to make you […]

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The Greatest Discovery of the 20th Century

October 29, 2010

When asked what the greatest discovery of the 20th century was, Albert Einstein replied compound interest. In fact he has called it “the most powerful force in the Universe”. So what is this phenomenon called compound interest you ask? It’s the concept that money grows exponentially. Oh, ok you want the English version. In essence […]

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Go Ahead, Be Selfish

September 24, 2010

We teach our children to share, to find the joy in giving, and that the world doesn’t revolve around them. Just as we try to model the social behaviors we want our children to take into adulthood, financial ideas and habits start developing at a young age. Whether we are conscientiously teaching them or they […]

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What’s In a Name?

September 18, 2010

Did you have a hard time picking a name for your baby? Maybe you already have names picked out for your unborn children. What about your savings account? College fund? Vacation fund? Behavioral finance experts have found that earmarking your savings for a specific goal can have a big impact on your savings rate. In […]

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109 Past Due – What Are You Waiting For?

June 9, 2010

Past Due: Radio 109 – What Are You Waiting For? Right-click to download Send me your feedback or leave me a voice mail: (919) 374-0501. Leave a review on iTunes Do you ever meet someone and think, “You know, they really need help”? We all know people who need help financially, or they need to […]

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107 Past Due – Big Money, No Whammies!

May 26, 2010

Past Due: Radio 107 – Big Money, No Whammies! Right-click to download Send me your feedback or leave me a voice mail: (919) 374-0501. Leave a review on iTunes What do you do when you receive a tax refund, bonus, raise, or other lump sum of money?  Do you pay off debts?  Do you save it […]

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