Sunday, December 26, 2010

Guest Post: First Generation White Collar

Today's guest post was written by PF blogger L. Marie Joseph. She has recently published the book First Generation White Collar: A practical guide on how to get ahead and not just get by with your money. As a fellow blogger, I have corresponded with Marie for nearly four years and have gotten to know her through her blog, Moneymonk. It is my pleasure to present her guest post on PFStock.

In the excerpt below, L. Marie Joseph discusses her views on Housing:

So now you’re making a great salary and have a college degree under your belt. Now your eyes are getting bigger. You want a house! That apartment you have is starting become a prison cell.

A home is usually the biggest expense we have. That being said, try your best to qualify for a mortgage that has a fixed rate, you don’t want any surprises down the road. You want to also have a payment that is under 30 percent of your income. You know this is going to be your biggest expense, so try to make it as low as possible. Your loan should also be limited to a fifteen- to thirty-year debt sentence.

For example if your take-home pay is $5,000 a month, your monthly house payment should be no more than $1,500 a month. So let’s not get house fever and buy something $2,000 a month because it looks better. Get what you can afford! You want to be able to pay for house payment AND save and invest comfortably. Not just pay your house payment and expenses. You always want to build wealth while you are paying your home off. Stick to renting if your payments will be more than 30 percent of your income. You do not want to own anything that will jack more than 30 percent of your income.

Ideally, you’re the price of your home should be two and one-half times your salary (two times if you want to be wealthy). Don’t fall for what the mortgage company tells you can afford. They do not know your personal situation. Divorce, sickness, and layoffs can all happens during the life of the loan. Always think of these factors when agreeing to a contract for so long. No one is immune to Murphy’s Law. Mortgage Brokers will not discuss these issues with you. It is your responsibility to education yourself.

"Education is when you read the fine print. Experience is what you get if you don’t."
-Pete Seeger

So if you make $50,000 a year, and the mortgage company approves you for $200,000 —RUN. This is four times your income, and you cannot afford it.

Depending on where you live, this can vary; I have friends in Washington, DC, and New York, and they cannot comfortably make this happen. If you live in a large, high-expense state, such as California or New York, your percentages may be slightly different.

Interest only and adjustable rate mortgages (ARMs) should always be avoided. ARMs almost always adjust higher not lower. You should always get a fixed-rate mortgage. You don’t want any surprises down the line.

Rule of thumb:
  • Take out a fifteen- to thirty-year mortgage
  • Make sure the payment is under 30 percent of your income, if you want to be wealthy.
  • Having a mortgage payment that’s below 30 percent of your household income gives you more room to save and invest.
  • Seek financing through a credit union or your local community bank.
  • Interest only and ARMS mortgages should be avoided.

About the Author
L. Marie Joseph is the author of First Generation White Collar. Visit her blog and you can also follow her on twitter.

Moneymonk had a post offering a free Apple iPad drawing to people who purchase her book. However, that offer has ended. Sorry for the inconvenience.

Wednesday, December 22, 2010

2011 Tax Tips Contest

The folks at H&R Block have provided me with 5 online codes, each of which can be redeemed for H&R Block At Home Premium Federal Online Tax Preparation (a $50 value), to give away to lucky blog readers. H&R Block At Home was formerly known as TaxCut. This giveaway is for an (Tax Year 2010) online version of H&R Block At Home. While federal tax preparation is included in the prize, state returns are not included ($34.95 extra cost). For the purposes of preparing federal tax returns, this online software should be adequate for nearly all taxpayers to complete their own taxes. Although the software includes free federal e-file, you may have to pay extra if you want to also efile a state return.

I have decided to hold a random drawing each week (awarding one code per week) for 5 weeks for the software codes. The first drawing will be on January 14, 2011 and continue weekly until February 11, 2011. In order to enter:

1) Any reader can post a comment below describing your best tax or money saving tip.
2) For an additional entry, web site owners can link to this post, to let other know about this contest.
3) Lastly, my fellow bloggers can add PFStock to your blogroll (must be accessible from blog's main page) for one more entry in the drawing.

You can enter up to three times using the the form below:

If the entry form doesn't show up click here to go to the entry form directly.

Note that this drawing is for an online version of the H&R Block At Home Software that requires Internet access. If you do not feel comfortable with using the Internet to prepare your taxes, I would suggest purchasing H&R Block At Home 2010 on CD-ROM. Unfortunately, I don't have any CD-ROM versions of the software to give away but it is available in many stores such as

The drawing is limited to US residents. Visit H&R Block for details about the online software. Winner will be randomly picked from among the qualified entries received by February 11. Winners will receive an online key code by Email to access the H&R Block website. The "key code" works like a gift certificate and is used on the payment screen before your taxes can be filed. In order to prepare taxes online with H&R Block, you will be required to create an account on their website. Good luck to everyone who enters!


This promotion is held in conjunction with
Note: H&R Block At Home provides tax preparation software. It is up to the individual winners to determine the suitability of this software for their tax situation. PF Stock does not provide tax advice or technical assistance. Contact H&R Block Customer Support for help with their tax preparation software. Opinions expressed here are those of PF Stock.

Tuesday, December 14, 2010

Guest Post: How is My Property Assessed?

Are you wondering exactly what it is that happens when your property is assessed? It's a question that many people preparing for their first inspection may worry about and one that can easily be answered.

What Happens When Property is Assessed?
The property assessment process is one that is often steeped in mystery to people trying to sell (or buy for that matter) home. Everyone wants a property to assess well but the actual technique and tactics involved prove elusive to many curious onlookers.

The assessor will come to your home and perform a thorough inspection of the inside and outside of your home. He or she will take note of various property characteristics that buyers may or may not connect with or find appealing. He will then make a determination of the value of your home based on his findings including the good and the bad about your home. It generally takes about two working days to receive the report with the inspector's findings.

How do Assessors Determine Worth?
First of all, you shouldn't be worried about their determination of worth. It is a very narrowly defined scope that allows them to assign one value to a home over another home. It is not a reflection of the worth of the home on an emotional level. They use a formula that enables them to find the value of your home on the market right now or within the next 90 days based on other, very specific criteria.

There are many who believe that evaluating or assessing property is one part art and one part science. There is a little bit of intuition that comes into play. The best or closest evaluators are often those who have been in the business for quite a while and have a "feel" for neighbourhoods, homes, and the people in certain areas. These assessors are usually able to gauge the value a home will sell for within a 90 day window very accurately.

Key Elements Assessors Inspect
In addition to the general condition and state of repair (or lack thereof) of a home, inspectors also take note of the size of the land the home is on, the neighbourhood and its proximity to services, accessibility of the home, condition of the home, architecture of the home, size of the home, and features that may be unique to the tastes and interests of the current home owners but may not exactly be mainstream tastes and interests.

Your home inspector is probably going to open doors and drawers, peak through closets, find cobwebs in the corner and dust bunnies beneath your beds. It is the job of the assessor to inspect the home inside and out for positive features and potential problems. Some inspectors may help you discover problems that can be easily fixed today but might be major problems tomorrow if left alone.

Comparing Properties as Part of the Assessment Process
No one really likes to be compared to another person. It's just as hard to listen as your property is compared to another. However, most property assessors will pull the information from a comparable home in the neighbourhood or area that has sold recently and compare the condition, state of repair, land mass, and features of your home with the other to decide if your home should have more value, about the same amount of value, or less value than the other home in question was sold for.

Home inspections or assessments may sound big bad and scary but they are very important in setting the value for your home when it comes to selling your home or even when refinancing your home for a more favourable interest rate.

This is the perfect opportunity to make all the little repairs you've been putting off and get your home neat and clean prior to the inspection so you can enjoy even better results!

About the Author
This article was written by William. In between surfing, cooking and supporting his favourite football team Liverpool, William writes for a home loan comparison service Home Loan Finder. Visit the Home Loan Finder website to compare home loans for more tips and guides on property valuation.

Tuesday, December 7, 2010

Citibank 7-Eleven Free Coffee Coupon?

When I received my most recent Citibank statement, it included an advertisement (which they refer to as a "marketing notice") for ATMs at 7-Eleven stores. The ad says that Citibank customers can get cash from 7-Eleven ATMs without paying any ATM fees. At the bottom of the advertisement was a coupon good for a free small coffee from 7-Eleven (expires Dec. 31, 2010).

This got me wondering that if I had previously signed up for Citibank paperless statements, then I wouldn't have received a statement in the mail. Therefore, I would not have received this free coffee coupon. It is merely a curiosity of mine, but do people who only have online statements get the free coffee coupon mailed separately? Or do they lose out on the deal?


Thursday, December 2, 2010

Final Results for Net Worth Poll

For several months, I've been conducting a net worth survey in the sidebar of the PFStock blog. The poll is now closed and the final results are in. A total of 73 readers have voted on this poll. So without further ado, here are the reader poll results:

Net Worth Survey: What Is Net Worth

Net Worth% of Readers
$0 - $19,9994%
$20,000 - $49,9998%
$50,000 - $99,9994%
$100,000 - $249,99919%
$250,000 - $499,99917%
$500,000 - $999,99917%
Over $1 million24%

Note that the percentages do not add up to 100% due to rounding. From these statistics, I found it interesting that a large percentage of my readers fall into the higher net worth categories. Over 75% of PFStock readers have a net worth greater than $100,000. Does anybody want to share their insights on this data?

From my last survey on annual income, I had calculated that the average median net worth of PFStock readers was over $500,000. However, the results of this poll show that the median is actually between $250,000 and $500,000.

If you've read this far, please participate in the annual income survey in the sidebar of my blog. Also, please leave a comment on this post: How much do you make?

Additionally, here are some additional related posts:
Annual Income Survey (2/10)
Net Worth Update (8/09)
Net Worth Comparison (6/08)
Are You Wealthy? (3/08)
Calculating Net Worth (9/06)