Finances


What We're Doing

Our economic picture is simple. The premise of "spend less than your income" works for us. Much of the current culture is trapped in "the hunger for more"; ...of everything. Money is equated to success and happiness, a fallacy to be sure. Money is only something used to buy flashy trinkets of, in many cases, dubious practical value. We avoid all the "more" propaganda that is promulgated by the masses and live according to our desires. Living simply continues to provide us with many rewards. We believe it's better to do things rather than own things.

We also believe in looking after our own assets. It really isn't that difficult and when you manage your own money, you don't have to be concerned about conflicts of interest, self-serving advice, or hidden fees and expenses.

Basic Strategy

Naturally there are needs to be met. We pay attention to keeping our modest nest egg intact and, hopefully, increasing in line with inflation. Our method is simple: diversify investments with an emphasis on mutual funds (some index) and government bonds.

T. Rowe Price has treated us well through the years and we like several of their mutual funds.
USAA has been our insurance company for over 50 years and continues to provide products at competitive rates (but only required insurance).
Vanguard is low-cost, reliable company with a lot of great investment products.
Ally Bank, is an internet bank that consistently has some of the best rates for both short-term savings and CDs.
I Bonds are a safe choice and are tied to the inflation rate with semi-annual adjustments. Unfortunately the Feds changed the rules a few years ago making I bonds less competitive, but they are still better than EE bonds.

We Avoid...

Excessive spending is the culprit for most folks and with that as a premise, here are a few areas that we think are the most wasteful, least needed, or most abused.

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Credit Cards
This era of easy credit has resulted in the most bankruptcies in history and most people carry balances on their cards at absurd rates. The answer is simple: Avoid consumer debt and, if you must charge, pay off the balance at the end of each month!
Life Insurance
Let's see now, a company wants me to bet that I will die and pay every month for that wager. If I win (which means I need to die) then some beneficiary gets the winnings. If I lose (which means I manage to live) then I just keep paying the monthly bet. We'll just skip this fear-based product.
Long term care insurance
This is even a worse bet than life insurance! I get to pay monthly and bet that I will make the company pay for some time in a nursing home. In return I get to keep my savings so the heirs will get more when I die. Of course it won't be as much since a large amount was sent to the insurance company. Again, no sale here.
Estate planning
Another guilt-driven product. I'm supposed to pay a stranger to tell me what to do with my stuff and see if I can evade Uncle Sam's taxes. If I really want someone to have something, I'll give it to them. After I'm gone they can just read the will. One more area where we'll save the fee, or most likely, spend it on something we like to do.

If it sounds like we're critical of all insurance then you read correctly. The basic business model of any insurance company is to do everything possible to collect premiums and then do everything possible to deny coverage. Therefore, we only carry that insurance which is mandated; you know, where the legislators have helped out the poor insurance companies and starving lawyers. If we can't afford to replace something that is lost or damaged then we don't really need it.

Income Taxes

We have prepared our taxes on the computer and filed electronically for years. We used TaxAct for the first time in 2014 and were pleased with the results. It provided a necessary form that was not available through online filing with TurboTax or H&R Block. TaxAct has been used ever since then with excellent results.

The Internal Revenue Service has an extensive site with most of the information everyone needs. Check their free file rules too.
About.com has a review of the top 10 free filing programs.
WorldWideWeb Tax has IRS forms, instructions, publications, tax tables, rate schedules, charts, worksheets, and answers to practically every tax question imaginable.

Web Sites

Redstone Federal Credit Union is our local bank, a necessary convenience.
Defense Finance and Accounting Service (DFAS) is the site for all military pay information. The Retired Pay portion of the their site has all the necessary answers for retired folks.
Moneydance is the software program we use to keep track of everything in one place.
BankRate.com has a wealth of information about CD & investment rates, banks, etc. This is the best place to compare rates of all types.
Hugh's Personal Finance Myths is Hugh Chou's personal views along with his Common Sense Financial Guide and many great calculators.
CBS Marketwatch - Mainstream financial news.
CNN Money - More mainstream news, but lots there.
MyMoney.gov - A surprisingly helpful and comprehensive government site.
• With money you can buy a house, but not a home.
• With money you can buy a clock, but not time.
• With money you can buy a bed, but not sleep.
• With money you can buy a book, but not knowledge.
• With money you can buy a doctor, but not good health.
• With money you can buy a position, but not a respect.
• With money you can buy blood, but not life.
• With money you can buy sex, but not love.Chinese proverb
How you spend your money is how you vote on what exists in the world.
Vicki Robin

In this short interview, The Soul of Money, Lynne Twist talks about how much we really need.