10 Sure-Fire Money Moves That Will Always Pay Off – Or Not?

by Jason on September 1, 2010

The Wall Street Journal is very confident!

Using the word guaranteed in the financial world is like telling a pitcher he’s got a “no-no” going in the 6th inning.

But apparently the WSJ doesn’t care.  They have found 10 money moves that will always, always pay off – guaranteed!

Aside from the catchy title luring me in, I had to see what financial advice they were talking about, and of course, I wanted to weigh in on it too.

So, here are their 10 sure-fire money ideas and financial advice with my side commentary.

1. Max that 401(k)

Here’s what WSJ says:

This is a slam dunk for you. Every dollar you invest saves you money on taxes because it comes off your taxable income. So Uncle Sam is effectively chipping in.

I agree with the concept – max your savings and you’ll have more for retirement.  You also get a tax-break now, which is great financial advice.

But, tax rates are going up next year and although we don’t know where tax rates will be in the future, there’s a pretty good chance that they’ll be much higher than they are now.  Tax rates are at a historical low. You may be creating a tax time-bomb that is just waiting to go off!

In my opinion, don’t fall in love with your 401k!!

Anything beyond the company match is up for debate in terms of contributions and really, you should be looking to diversify yourself from a tax perspective any way.

2. Give up the vacation home

What WSJ says:

Most of the time we use them for a few weeks or months of the year. They cost money to buy. There are annual upkeep, maintenance, condo fees and taxes.

Ok, this makes sense.  Get rid of excess, trim the fat, reduce expenses.  All smart things.  But, what if you could buy a vacation home at or near the bottom of the market and you can use it to build True Wealth?  That is, of course, you can afford it!

3. Put $5,000 into an IRA account or Roth IRA tax shelter

WSJ says:

If you’re over 50, put in $6,000. And make sure your spouse does too. IRAs are a great deal.

There is a big difference between putting into a Roth or a Traditional IRA – and that has to do with IRA withdrawals!

Again, the idea of saving money is great financial advice!  Not everyone is eligible for a Traditional IRA or a Roth for that matter.  So make a careful decision when figuring out which retirement account is right for you.

4. Pay off your credit-card debt


Eat macaroni and cheese for three months if you have to, but pay off those balances. You’re probably paying at least 15% interest. You may be paying a lot more. You’d have to earn maybe 17% before tax on an investment just to keep pace. Boring? Nobody’s making 17% these days. So pay off your credit-card debt and brag to all your friends that you just beat Wall Street.

Amen!!  Paying off credit-card debt is possibly the greatest sure-fire money move you can make.  Of course, you knew that piece of financial advice already, but it’s time to do it!

Here’s a good tool to know your credit-card payoff amount .

5. Fire your banker

Here’s what WSJ says:

If you’re like most people, you’re probably paying hundreds of dollars a year in account service fees, ATM charges for access to your own money and the like.

I’m actually not paying account service fees or ATM charges because I don’t overdraft and I don’t use outside ATMs!

6. Get your tax refund early


How? By not overpaying your taxes in the first place. Every year, millions of people cheer when they get a check back from Uncle Sam. But that just means they paid too much withholding tax during the year. So Uncle Sam got an interest-free loan.

I do like this point, unless of course, you need a tax refund because you simply won’t save that extra money!

7. Buy inflation-protected bonds

According to WSJ:

Treasury inflation-protected securities, or TIPS, aren’t sexy. They won’t make you rich. But they’re guaranteed — twice over.  They’re issued by the U.S. government, so they are guaranteed against default. And they are protected against inflation because coupons and principal will adjust to reflect it.

Really?  Hmm.  It seems like everyone has jumped on the TIPS bandwagon and those things are completely oversold leaving an opportunity for a TIPS bubble to burst.

So they’re guaranteed by the U.S. government, but it doesn’t mean they won’t drop in value.  I’m not saying you don’t want some exposure here, but to make it sound like it’s a no-lose proposition is a little scary.

8. Buy a bread machine

WSJ says:

If a $50 breadmaker saves you, say, $7 a week on buying bread, that’s $350 year. The easiest dough you’ll make. Modern breadmakers are, well, a piece of cake to operate. The return on investment: 600% in year one and 700% after that.

Wow, they are stretching for financial advice now!!  I’d bet that once the novelty wears off after four or five times using it, you’ll be right back to buying bread once a week at the grocery store….and you’ll be out $50 for the bread machine!

My wife and I always talk about making bread and then we go buy some at the store.

9. Play hardball with your insurance company

WSJ says:

Call competitors and ask them to quote you prices for your current house and auto policies.

Amen!!  Here’s how to negotiate your home and auto insurance.

10. Get a freebie from a bank

WSJ says:

Sign up for a credit card with a big bonus — like a free air ticket or weekend hotel stay. Use the card enough to qualify. Then cancel the card.

I know it’s a free airline ticket, but I have never done this – mainly because it sounds like such a hassle.  I hate calling customer service lines.  I’d almost rather pay for the ticket than deal with the headache.

What Are Your Thoughts on These Sure-Fire Money Moves?

Let me know in the comments below!

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