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
WSJ:
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
WSJ:
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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{ 19 comments… read them below or add one }
Great list and comments from the WSJ.
Buy a bread machine? I donno. Carbs r bad lol.
Sam, haha – that’s a good point I forgot to mention…although I do love me some carbs!
I’d say disconnect your TV. Not only will you save $100/mo on cable, but you’ll save hundreds more each and every month on the crap you won’t buy because you got rid of the box that was telling you to buy it.
There are some decent tips. I find that these types of lists are much better done by bloggers than by the big news outlets!
I definitely think they are reaching with the bread machine!
Kevin, great point. Not too much how much more productive you’d be if you stop watching it and start doing other things that can make money instead.
KNS, I think our bread machine has been used twice in our 7 years of marriage! Don’t get me wrong, I love fresh bread, but there is not chance either my wife or I will make bread weekly!
I love me some carbs though Sam!
I agree. The bread machine idea will not be on the top of my list. I don’t like the rubbery flavor of that big blob that comes out of the machine and at one loaf of bread a week how would it save $7?
Excellent advice! I think people should really be realistic with their money situation and figure out what they can live without (vacation home, unnecessary credit card debt) and find ways to save/make more (IRA accounts, utilizing their 401k). The answers are right in front of them, but sometimes the truth hurts.
spend less, save more – you’re right…the answer is clear, just needs to be done.
I like your commentary here. I don’t know why the WSJ allows such silly articles to be published…. Here on our blogs, yes that is a fun article but not on WSJ!
FZ – Yeah, I agree. Although I did find it on Yahoo. Not sure if the WSJ publishes directly to them for articles like this or what?
Thanks!
A breadmaker is something I thought I would really use so years ago I bought one. It was defective and didn’t work properly. The company refused to refund my money. The same thing happened with a pasta maker. I love kitchen appliances evidently because I still bought a waffle maker which I use only a few times per year, a Foreman grill which I love using and is healthier but which is a real hassle to clean so doesn’t get used more than once or twice per month tops, a quesadilla maker that is in my yard sale because the novelty wore off,etc. I have been unable to find a decent toaster or coffeemaker no matter how many brands I’ve tried or by paying more.
Suggestions for these two appliances are most welcome!
My Magic Bullet, on the other hand, was a very good investment. Cost about $50 and I do use it regularly to make outstanding salsa, smoothies, chocolate mousse, alfredo sauce, chop nuts, and more. It’s easy to use and easy to clean and everyone likes the colored rings to tell their mugs apart. The mugs and colored rings were included with the containers, blade, recipe book,etc.
Making my own sun tea by putting tea bags in a large glass container and setting it in the sun all day is very cost effective, and healthy too.
My Sears slow-cooker has paid for itself as well. The food prepared in it comes out tender and delicious. I can use less expensive cuts of meat with excellent results. I can make a variety of different meals in it-soups,stews,chili,etc as well as desserts,baked potatoes,side dishes, and spiced cider drinks. The slow-cooker saves me time and money. I enjoy putting dinner in it first thing in the morning and knowing it will be ready at the right time. I’m tired by then so it’s a real pleasure not to have to cook at the usual preparation time.
Shopping online has saved me lots of time and money as well. There are often great reviews, more variety, and better information on items than you can get in your local store. Free shipping is often included. Discount codes abound and can be located by googling them. Comparison shopping sites can be useful as well. I’ve gotten great hotel rates by using Priceline.com and Amazon.com has lots of great deals going on every day. Local grocery stores often have great deals as well if you read your sales flyer and know the regular prices on items you often buy. Look for unadvertised bargains as well.
Hope these tips will help someone who would like to spend less & have more for saving,investing, or spending on something worthwhile.
It’s not hard and it doesn’t hurt. 6 cups flour, two cups hot water, two packages yeast, 1 tablespoon sugar, 1/2 tablespoon salt. Mix, knead, let rise, knead again, put in the baking pans, let rise for 45 minutes, stick it in the oven at 375 for 40 minutes and done. Total cost $6.
Taste: Priceless
It’s not hard and it doesn’t hurt. 6 cups flour, two cups hot water, two packages yeast, 1 tablespoon sugar, 1/2 tablespoon salt. Mix, knead, let rise, knead again, put in the baking pans, let rise for 45 minutes, stick it in the oven at 375 for 40 minutes and done. Total cost $6.
Taste: Priceless
They forgot a very good one: Utilize credit cards with robust rewards programs, cash back, airline miles, retailer gift cards, free gas. It does add up to hundreds even thousands of dollars a year as long as you pay your balances off each month. Let the bank pay YOU for using their card not the other way around.
Good call! We usually get a few hundred bucks worth of Home Depot cards or gift cards through our Amex points!
I hate when people say guaranteed because it makes me want to prove them wrong. For example, if I put money in my 401k and my company doesn’t match, and then I take it out early, I’m guaranteed to lose money. Just because you put the money in the 401k doesn’t mean you will take it out according to the rules.
With that being said, I think it’s a good list except for the bread maker.
I found the buy a breadmaker tip particularly interesting. I can honestly say I have never seen that anywhere before.
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