Wednesday, February 29, 2012

SNL Explains Personal Finance

This clip makes personal finance simple for anyone. Just don't buy stuff you can't afford! Watch this SNL skit with Amy Polar and Steve Martin: Don't Buy Stuff You Can't Afford. I saw this on the Planting Dollars blog, which is listed in my blogroll.

Cookin' with Court: Turkey Fried Rice

I wasn't planning on posting another recipe tonight, but Court cooked a meal that definitely deserves to be documented for future use.  The dish is called Turkey Fried Rice.  It comes from the May 2010 Edition of Taste of Home's Simple and Delicious.  We made asparagus and egg rolls as side dishes. 

Prep/Total Time: 30 minutes
Yield: 4 servings

Generally, fried rice is a dish made with leftover rice from the day before, which serves as a nice base for a catch-all meal. 

1 Tbsp. olive oil
2 eggs, beaten
1/2 lb. ground turkey
2 green onions, sliced
3 cups cold cooked rice (cooked rice)
1 cup canned bean sprouts
1/4 cup minced fresh cilantro
1/4 cup soy sauce
2 Tbsp. chunky peanut butter
1 tsp. sugar
1/2 tsp. garlic powder
1/4 tsp. crushed red pepper flakes
1/4 tsp. ground ginger

In a large skillet, heat oil over medium high heat.  Pour eggs into skillet.  As eggs set, lift edges, letting uncooked portion flow underneath.  When eggs are completely cooked, remove to a plate; set aside. 

In the same skillet, cook turkey and onions over medium heat until meat is no longer pink. Stir the rice, bean sprouts and cilantro. In a small bowl, whisk the remaining ingredients until blended; stir into skillet. Chop egg into small pieces; stir into skillet and heat through.  

We left out the bean sprouts and it was still really good.  This meal will cost approximately $1.11 per serving .  We both ate all we wanted and had enough left over for one of us to eat for lunch. This is also a really healthy meal. Cheap, quick, healthy, and tastes good!

Tuesday, February 28, 2012

Cookin' with Court: Italian-Style Salisbury Steaks

This recipe comes from the December 2011/January 2012 Edition of the Simple and Delicious magazine.  The recipe was submitted to the magazine by Heather Nalley of Easley, South Carolina.  This is a really flavorful meal.  Court has made this recipe twice now because I liked it so much.

Prep/Total Time: 20 Minutes
Serves: 4

1 egg
1 tsp. Worcestershire sauce
1/2 cup seasoned bread crumbs
1/2 tsp. garlic powder
1/2 tsp. pepper
1 lb. ground beef
1 Tbsp. canola oil
1 can (14 1/2 oz.) diced tomatoes with basil, oregano and garlic, undrained
1 can (8 oz.) Italian tomato sauce

  • Combine first five ingredients in a large bowl. Crumble beef over mixture and mix well. Shape into four oval patties. Brown patties in oil on both sides in a large skillet. Drain. 
  • Combine diced tomatoes and tomato sauce in a small bowl.  Pour over patties. Bring to a boil. Reduce heat; cover and simmer for 10-15 minutes or until meat is no longer pink.  
This great dish can be made for $1.48 per serving.  That's a bargain!

Monday, February 27, 2012

How to Purchase a Car

Purchasing a Car: Step 2 of 4
Step 2: Evaluating Alternatives

1. Comparing Vehicle Options
2. Comparing Used Vehicles

Almost every purchase comes with several alternatives.  You may ask yourself: Can I delay the purchase? Should I buy the item with cash or credit? Can I find the item at a better price? Which brands should I consider?  If we begin to evaluate the alternatives of each purchase, we will become much more effective consumers.

When buying a car, most people use comparison shopping.  Comparison shopping is great when 1) making a large purchase or 2) buying items that you purchase very frequently.  A car would definitely qualify as a large purchase.

1. Selecting Vehicle Options: Optional equipment for cars can be viewed in three categories.

  • Options that improve performance
  • Options that offer convenience
  • Options that enhance the outward appearance of the car
As a consumer, we must take all of these options into consideration and determine what we are willing to pay a premium for.  For instance, power seats are definitely not a deal maker or breaker for me.  On the other hand, I definitely want my car to have a working air conditioner.  By making a list of the items that you find to be vital, you will be ready to evaluate almost any car.  

2. Comparing Used Vehicles: After you find a few cars you want to evaluate, I would suggest using this used car evaluation worksheet to ensure that you ask the correct questions when looking at a car.  I would also suggest taking a list of items you should check on the car. I really like this checklist to take along when car shopping.  It may feel a little bit nerdy caring around a clipboard of checklists, but it will help keep your thoughts clear when being hounded by the dreaded salesman.  Used cars can be tricky to examine if you are not prepared, so do your research before you go shop.  Kelley Blue Book has many great articles such as The 10 Best Used Cars Under $8,000, that would be great to look at before you go car shopping.  

The majority of this information was taken from Focus on Personal Finance: An Active Approach to Help You Develop Successful Financial Skills by Kapoor, Dlabay, and Hughes. Feel free to share your car shopping experiences and any tips you may have.

The Ultimate Gift Book Review

I recently finished The Ultimate Gift by Jim Stovall. Being a fiction book, The Ultimate Gift was something different than I am used to reading.  I first heard about this book at an agricultural economics seminar I attended at the University of Missouri. If you would like to learn more about this seminar, I blogged about it here.  Dr. Kohl recommended this book because of the timeless morals that are taught throughout the story.

The Ultimate Gift is about a young man named Jason Stevens.  Jason's uncle, Red Stevens, was a very rich man due to his cattle and oil empire.  When Red died, his family flocked to find out what the rich man had left them.  Red gave the dysfunctional, spoiled family the money they had been waiting on. However, Jason did not receive his inheritance.  Red was Jason's great uncle and he saw something different about young Jason. Red made a series of video tapes before his death that outlined the tasks that Jason was to perform throughout the next year in order to receive his inheritance.  Red's hope being that he could turn Jason from his lazy and irresponsible ways before it was too late.  Red gives Jason 12 gifts in the form of different experiences.  The instructions for each of the gifts are outlined in a new video tape every month.  Red Stevens left his lawyer, Mr. Hamilton, with the duty of judging whether Jason performed each of the 12 tasks in the correct manner.  If he did learn all of the 12 gifts, Jason would receive the ultimate gift.  The lessons taught throughout the book are outlined below:

  1. The Gift of Work
  2. The Gift of Money
  3. The Gift of Friends
  4. The Gift of Learning
  5. The Gift of Problems
  6. The Gift of Family
  7. The Gift of Laughter
  8. The Gift of Dreams
  9. The Gift of Giving
  10. The Gift of Gratitude
  11. The Gift of a Day
  12. The Gift of Love
  13. The Ultimate Gift
This book was also made into a movie.  I have yet to see it, but I hear that it is worth watching.  This book was a really fast read and was a refreshing positive story.  

Saturday, February 25, 2012

How to Purchase a Car

Purchasing a Car: Step 1 of 4
Step 1: Preshopping Activities
1.      Problem Identification
2.      Information Gathering

**Buying a car is a very nerve racking activity for most people.  My hope is that through this series of four blog posts I, along with others, will become confident car purchasers. 

1.      Problem Identification
a.       All good decisions begin with an open mind.  When many people, including myself, begin the car buying process they already have preconceived ideas of what brand they want and where they are going to buy the car. This type of narrow view is a bad way to begin your search for a new car.  Define your problem as widely as possible to allow for the most possible solutions.  Is your problem that you need a fast car, a work truck, a car that can hold more kids, a car that gets good gas mileage, or merely a means of transportation?  It is important to truly identify your problem before you begin to shop for a car, but remember to keep an open mind. 

2.      Information Gathering
a.       The better informed you are, the better purchasing decision you will make.  To be an effective and efficient car buyer you should not spend too much time, or too little time gathering information for your purchase.  In their book The Millionaire Next Door, Thomas J. Stanley and William D. Danko found that "There is an inverse relationship between the time spent purchasing luxury items such as cars and clothes and the time spent planning one's financial future." The average millionaire spends an average of an hour each year purchasing motor vehicles, while the rest of us spend an average of 60 hours each year purchasing motor vehicles.  Besides being time consuming, spending too much time researching automobiles can take you away from more important endeavors.  The following information sources may be helpful when purchasing a car:
                                                              i.      Personal contacts: Let everyone know that you are looking for a car.  This will put more eyes to work for you over a larger area. 
                                                            ii.      NADA: This website will give you the approximate market value of nearly any car. 
                                                          iii.      Your local dealership: Ask which cars sell the best and which cars they rarely see in the workshop.  This is a good indicator of a reliable car. 
                                                          iv.      Consumer Reports: Websites that offer independent 3rd party reviews are invaluable to a purchasing decision. 
                                                            v.      Media Information: Look through the classified ads of your local newspapers.  Research online for cars that are for sale in your area. 
                                                          vi.      A local mechanic: Ask the mechanic about the car you are considering.  Mechanics see a lot of cars and will have a good idea about which cars have the most problems. 

*This is the first phase of buying your car.  Identify what your problem is and keep an open mind.  Research and document information to find out which type of car you would most like to look for.  The next phase of buying a car will be Evaluating alternatives.

**The information for this post was primarily taken from Focus on Personal Finance: An Active Approach to Help You Develop Successful Financial Skills 2nd Edition by Kapoor, Dlabay, and Hughes. 

Thursday, February 23, 2012

How to Get a Free Car

This video is pretty inspirational! I first saw it on Christian Personal Finance

How to Improve Your Credit Score

Credit scores are mysterious, confusing, frustrating, but can be rewarding.  If you have ever been confused by a credit score or wanted to know how to improve your credit score, then keep reading.  First, let’s look at how a credit score can affect you!

**You are buying a $130,000 home and want to get a 30 year mortgage.  The lender pulls your credit and you find out that your credit score is 690.  This would mean that your interest rate would be around 4.25%.  Over 30 years you would pay $230,227.87 total, $100,227.87 of this being in interest. 
**Now let’s say that you are in the same situation, but your credit score is 730.  With this score you would pay $223,430.36 over the 30 year period of time, $93,430.36 of this being in interest. 

As you can see, a difference of 40 points can cost you $7,000Credit scores matter!

What is a good credit score?

Credit Score
% of Americans with this score

How is my credit score calculated?
Most lenders use the FICO score to evaluate borrowers.  The actual formula that is used to calculate the score is considered a trade secret, but there are 5 important factors significantly impact your credit score
1.      What is your payment history?
a.      This makes up 35% of your total score
b.      Regency- How recent was your last late payment
c.       Frequency- How frequently do you have late payments
d.      Severity- How late was your late payment
2.      How much do you owe?
a.      Makes up 30% of your total score
b.      Keep the difference between your balance and credit limit at a wide margin
3.      How long have you had credit?
a.      Makes up 15% of your score
b.      The longer you have had credit, the better
4.      When was your last application for credit?
a.      Makes up 10% of your score
b.      Don’t open a lot of accounts in a short period of time
c.       Don’t open accounts right before you apply for a loan
5.      What types of credit do you use?
a.      FICO wants a healthy mix of revolving credit and installment loans
b.      Major credit cards are good for revolving credit, but you do not have to carry a balance

How do you get your score?
When retrieving your credit score make sure you go to a legitimate vendor.  Also, make sure you do not sign up for credit monitoring.  Many companies offer free credit reports, but these reports do not always include the score.  My recommendation:
1.      Go to
2.      Pay about $40 to get your Equifax and Transunion report. 
3.      Do this once a year, or before applying for credit.
4.      Pulling your own credit will not hurt your score.
5.      Having a lender pull your score when applying for credit will affect your score.

How do you improve your score?
1.      Pull your credit report
a.      Check identity information
b.      Review credit accounts
c.       Examine inquiries
d.      Look over any collections or public records
                                                              i.      Chapter 13 bankruptcy stays on your credit bureau for 7 years
                                                            ii.      Chapter 7 bankruptcy—10 years
                                                          iii.      Lawsuits, judgments, or paid tax liens—7 years
                                                           iv.      Late payments—7 years
                                                             v.      Any negative information that is not yours
2.      Pay your bills on time
3.      Pay down debt
a.      Pay down debts that have balances close to the credit limit.
b.      Pay the debt down to around 30% of the limit and move to the next card of revolving credit line.
4.      Don’t close revolving debt accounts
a.      This will rarely help you!
b.      You never want to narrow the gap between credit available and balance owing. Instead, you want to widen this gap by paying down balances.
c.       Closing these accounts could also make your credit life appear younger than it is.
5.      Apply for credit sparingly
a.      If you don’t have credit, a credit card is a good place to start. 

Credit scores may still seem very confusing to you, but I hope this explanation helps clear up some issues.  The information for this post was primarily taken from Your Credit Score: How to Fix, Improve, and Protect the 3-Digit Number that Shapes Your Financial Future by Liz Pulliam Weston.  For more information, this is a great book to get at your local library or bookstore.  Another good resource on credit score information is a Youtube video titled Understanding Credit Scoring.  

Wednesday, February 22, 2012

Get Started Investing

Many people consider investing their money, but they just do not know where to begin. One option is to go to a financial planner and earn a modest return, at what many times is a fairly high price.  Another option many people choose is to do nothing at all.  Between these two, obviously you should choose the first.  However, there is another way.  Index fund investing is easy, efficient, effective, and will cost you a fraction of what a professional would charge.  There are a few things to consider before you begin to put together your asset mix.  First, what kind of time frame are you considering?  You will need a minimum of five years to make my portfolio mix recommendation work for you (a minimum of 5 years).  You will also need to ask yourself how risk adverse you are.  If you are not sure how risk adverse you are, there are online questionnaires to help you figure this out. 

Next, we will determine how you should allocate your savings between stocks, bonds, and cash. 

For a normal amount of risk
·         Take (100-Your age).  The remaining number is the percentage of your savings you should allocate to stocks. 
·         Take (Your age/2).  This percentage of your savings goes into a bond index fund and an interest bearing checking account. 
For more risk—A larger return, or a larger loss
·         Take [{100-(Your age x .5)}/2].  This number is the percentage of your savings you should allocate toward both a foreign stock index fund and an American stock index fund.  You are just cutting your age in half.
·         Take (The remaining percentage x 60%).  This is the percentage you should allocate toward a bond index fund. 
·         The remaining percentage should be allocated toward cash in the form of an interest bearing checking account. 
For less risk—A smaller return
·         Take (100-[Your age x 1.5]).  This is the percentage you should allocate toward an American stock index fund.  For some older folks this number will be negative, in which case you should put no money in the stock market.  You are making yourself older by half of your life.
·         Take [(100-1st %) x 30%].  This percentage should go into a bond index fund. 
·         The remaining percentage should go into an interest bearing checking account. 

*Now let’s do an example of all three.* 
--Fred is a 40 year old who has $50,000 to invest, but does not know where to start.  Fred is investing for at least 25 years. Fred will use four investing mediums to achieve his financial goals:
1.      Vanguard Total Stock Market Index Fund (VTSMX): 10 year avg. return of 5.49%
2.      Vanguard Total Bond Market Index Fund (VBMFX): 10 year avg. return of 3.75%
3.      Bank of Bolivar Ultimate Free Checking Account: 2.97% return when qualifications are met.
4.      Vanguard Total International Stock Index Fund (VGTSX): 10 year avg. return of 5.86%

Example 1: Normal Risk
·         (100-40)=60%
·         60% x $50,000 = $30,000 in Vanguard Total Stock Index Fund (VTSMX)
·         (40%/2) = 20%
·         20% x $50,000= $10,000 in Vanguard Total Bond Market Index Fund (VBMFX)
·         20% x $50,000= $10,000 in Bank of Bolivar Ultimate Free Checking account
Example 2: More Risk
·         {[100-(40 x .5)]/2}= 40%
·         [(40% x $50,000)/2] = $20,000 in Vanguard Total Stock Index Fund (VTSMX)
·         $20,000 in Vanguard Total International Stock Index Fund (VGTSX)
·         (100%-80%)=20%, (20%x 60%)= 12% or ($50,000 x 12%)= $6000 into Vanguard Total Bond Market Index Fund (VBMFX)
·         Lastly, (8% x $50,000)= $4,000 in Bank of Bolivar Ultimate Free Checking account
Example 3: Less Risk
·         (100-[40 x 1.5])= 40%, or ($50,000 x 40%)= $20,000 in Vanguard Total Stock Index Fund (VTSMX).
·         [(100-40) x 30%]= 18%, or ($50,000 x 18%)= $9,000 in Vanguard Total Bond Market Index Fund (VBMFX)
·         (100-(40+18))=42%, or ($50,000 x 42%)= $21,000 in Bank of Bolivar Ultimate Free Checking account.

**As you can see, Fred can adjust his portfolio according to the risk he is willing to take and his age.  I chose Vanguard because it offers my favorite index funds and has a very low expense ratio with no up-front load fee.  Before you consider investing you should pay off any credit card or high interest rate debt.  You should also first set up an emergency fund with 3 to 6 months expenses.  I know that many people do not have $50,000 setting around to invest, this was just an example.  If you are starting small, save up $3,000 in your Bank of Bolivar account and open the Vanguard Total Bond Market Index Fund (VBMFX).  Save $3,000 more and open the Vanguard Total Stock Index Fund (VTSMX).  Then begin the process of investing a fixed amount of money every month and allocating it the way we discussed above.  This type of investing is not for a short-term gain, but should be done over a long period of time. I first read about index fund investing in Money Made Simple, which would be beneficial to read for more information. You will be well-diversified and will earn a modest return on your savings. If you do want to seek financial advice, I would suggest visiting Bank of Bolivar’s financial services offered through LPL.  The representative in Bolivar is Mike Campbell.  I hope this is helpful. I am not a professional financial planner and my ideas should be taken with a grain (or lump) of salt, but I do enjoy reading and writing about the subject.  

Tuesday, February 21, 2012

Cookin' with Court: Chicken with Caramelized Pears

I recently realized that Court makes many recipes that I really like, and I need a way to document these recipes for the future.  I have decided to call these write-ups "Cookin' with Court."  Tonight we made Chicken with Caramelized Pears.  This recipe comes from December 2011-January 2012 Edition of the Taste of Home Simple and Delicious magazine on page 18.  It is a great meal that is full of flavor.  The following is copied from the magazine:

Chicken with Caramelized Pears
Prep/Total Time: 30 minutes
Serves 4

  • 4 boneless skinless chicken breast halves (6 oz. each)
  • 1/2 tsp. salt
  • 1/2 tsp. pepper
  • 3 Tbsp. butter
  • 1 Medium red onions, halved and thinly sliced
  • 2 Medium pears, thinly sliced
  • 2 tsp. brown sugar
  • 1/2 cup balsamic vinaigrette
  • 1/2  tsp. dried thyme
  • 2 pkg. (8.8 ox. each) ready-to-serve long grain wild rice
Sprinkle Chicken with salt and pepper. Brown chicken in butter in a large skillet; remove and keep warm. Saute onion in the same skillet until tender. Add pears and brown sugar; cook 3 minutes longer. Stir in vinaigrette and thyme.
Return Chicken to skillet. Bring to a boil. Reduce heat; simmer, uncovered, for 4-6 minutes or until chicken juices run clear. Meanwhile, cook rice according to package directions. Serve with chicken.  

(This also works with pork loin chops and thinly sliced apples)

Dr. David Kohl Seminar

I recently attended an agricultural economics seminar at the University of Missouri. Dr. David Kohl put on the seminar and did a great job of informing and entertaining. He mainly spoke in regards to the agricultural sector, but many of his lessons can be applied to all areas of business. Dr. Kohl writes for the Corn and Soybean Digest, Ag Country, Ag Choice Farm Credit and many other agricultural resources.  I would recommend going to see Dr. Kohl speak if you ever have the chance.  Here are my notes from the seminar.  I have additional resources if anyone is interested.  I especially like the quotes at the bottom of the notes!

Dr. David M. Kohl
Professor of Agricultural and Applied Economics
Virginia Tech, Blacksburg, VA

§  The top 20% of agricultural producers have maintained a ROA >10% for the last 15 years
§  The 50-100-70 Rule
o   By the year 2050 the world will require 100% more food, and 70% of this food must come from efficiency-improving technology. 
§  Develop an advisory team
o   Meet 3 to 4 times per year
o   Studies show that an advisory team can make a farm 30% more profitable
o   Have a “but what if” lender on your advisory team, not a “yes” lender
§  Use scenario planning
o   Develop scenarios to determine what shape your business would be in if the worst were to happen.  Create a plan to cope with these scenarios. 
§  Trends for the United States:
o   Public Debt
o   Aging Population
o   Entitlements and a simplified tax code
o   Interest rates should stay low through 2014
§  If core inflation goes above 2% or unemployment nears 6%, the interest rates will begin to rise. 
§  Top challenges/risk to the agricultural industry in the next 5 years
o   Volatility and global markets
o   Asset bubble vs. Credit bubble
o   Normalization of deviation
§  A “new normal” will always lead to a surprise.
o   Young lenders and producers have never faced a downturn
o   Making decisions on tax returns rather than of accrual-adjusted records
§  There is, on average, a 64% difference
§  Oil
o   Six of eight recessions in the past fifty years are due to oil
o   Consumers lock up at $3.00 to $3.50 per gallon
o   Consumers shut down at $4.00 per gallon
o   Oil needs to be around $85/bbl for good economic growth
§  Words to remember:
o   “Family living expense is like concrete:  Once it sets up, it is difficult to change”
o   “If it grows like a weed, it probably is”
o   “Be a but what if lender”
o   “Better is better before bigger is better”
o   “Future problems are created during good times”