Comments on: October ‘06 Net Worth Monthly Review

By: Foobarista

Foobarista — Fri, 10 Nov 2006 02:13:08 +0000

On the blog, it’ll be Schedule C self-employment income, so you’ll want to be sure to deduct everything. Also, you can set up a SEP-IRA to put aside up to 25% of the blog profit for retirement. (If you don’t have a 401K or other pension device at work, you could use a SE401K instead and put _all_ the blog income in it up to $15K, and 25% after.)

By: Rich Slick

Rich Slick — Thu, 09 Nov 2006 15:09:30 +0000

Well here’s something I will say….. kids don’t always come when planned which is why I made all the suggestions I did. You don’t plan on moving until you have kids? What if your wife gets pregnant next year? What school system do you want your kid to go to? Private school? Public school?

I know it seems so far away right now but when it comes it’ll be like a tsunami.
1. Your kid will be born.
2. Your wife will likely stop working (at least for a while).
3. You’ll be hit with medical expenses (some may be unexpected).

I talk from experience friends. As for the 160k you can read about it here and some of the tax implications: http://www.fairmark.com/rothira/phaseout.htm

By: CK

CK — Thu, 09 Nov 2006 13:31:13 +0000

Jimbo-

Start putting the blog money into a new account. It’s easy to tack on another account at the online banks.

By: twins15

twins15 — Thu, 09 Nov 2006 07:15:39 +0000

Not knowing what to do with all your income…. not a bad problem to have!

By: Personal Finance Blog

Personal Finance Blog — Thu, 09 Nov 2006 06:21:38 +0000

One solution to bypass the Roth IRA phaseout is to GET MARRIED!!!

By: jim

jim — Thu, 09 Nov 2006 04:09:03 +0000

To be honest Rich Slick, you’ve said nothing except imply that you make $160k…

By: Rich Slick

Rich Slick — Thu, 09 Nov 2006 03:56:07 +0000

“Be careful with your income levels so that you don’t get phased out of Roth contributions”

How does one do that? Refuse raises?

LOL! I’ve been saving that one for a post on my blog but I’m going to have to do that next year at my job. You see I’m on the verge of being phased out of being able to make Roth IRA contributions and it creates so many problems – no more matching 401k money, no more Roth contributions, etc. I’m contemplating creating an S corp or LLC to handle all my investment activities so I can offset some income but that’s a long discussion for another day and another blog.

Remember this number 160,000. Once you cross that threshold you run into many many tax problems.

By: jim

jim — Thu, 09 Nov 2006 03:23:59 +0000

I’ve definitely researched 529 plans and the like, I do want to have kids but that’s down the road for me. As for the rest of it, my income has definitely improved with the new job and the increase in blogging income, I’ll need to investigate how I can reduce my AGI so I can still participate in a Roth IRA. This year I think I’m okay but next year it’ll be tricky…

By: Lazy Man and Money

Lazy Man and Money — Thu, 09 Nov 2006 03:08:46 +0000

Jim, I don’t know if it makes sense to you, but I’m holding off on my 401k until Zecco offers their IRA plans. Some may say it’s risky with putting money in a new brokerage like that, but there were millions of them in the dot-com boom and I don’t remember anyone losing their money. My idea with Zecco is that I can invest in ETFs that are diversified to my liking and can rebalance them as necessary without paying the commissions that would eat into my nest egg. Problem is that Zecco had IRA’s as coming soon when I last checked. I really can’t argue the Vanguard Target retirement, though. It seems very safe with very low fees.

Rich Slick, it seems to me all those costs are costs of having children with the exception of the catastrophe which will should be prepared even before getting engaged. What if Jim and future Mrs. Jim decide to not have kids. If that’s the case, they may find that combined housing is cheaper than separate. One utility bill is often better than two .

By: Him

Him — Thu, 09 Nov 2006 03:03:17 +0000

“Be careful with your income levels so that you don’t get phased out of Roth contributions”

How does one do that? Refuse raises?

By: Rich Slick

Rich Slick — Thu, 09 Nov 2006 01:21:19 +0000

Well now that you’re engaged you’ll soon find out your cash flow will drastically begin to change.

1. You’ll probably need to buy life insurance and it’ll only go up as you begin to have kids.
2. You’ll need to start some sort of college fund for your kids if you plan on having them.
3. As a couple you may decide to buy a new house or move into a bigger one as you expand your family (if that is your plan).
4. Stuff happens and you may be struck with illness or your wife might be – try to plan for some sort of catastrophe – everyone encounters one or another in their lifetime.
5. Be careful with your income levels so that you don’t get phased out of Roth contributions
6. If and when you do decide to have kids, you’ll be hit with heavy medical expenses, deductibles, extra non-covered charges, exclusions, etc. Plan for them.

Other than that, you’re doing good