Dear Dave,
I went to medical school, and now I have $70,000 in debt. I just started a three-year residency making about $50,000 a year, while my wife makes $40,000. The student loans represent our only debt. Do you think we should be paying this off or investing in a Roth IRA?
-David
Dear David,
If I were in your shoes, I’d work on paying down the student loans. That means you may never be in a Roth, but there are other things you can invest in and grow wealth.
I realize this may not seem right mathematically, but I don’t always make financial decisions based exclusively on math. Many times I do things based on changing money behaviors—stuff like paying off debts from smallest to largest because it actually works. Personal finance is 80% behavior, and only 20% head knowledge. So sometimes you have to go with what actually works best overall, in spite of what the technical math shows.
In your case, I think it’s going to be very valuable to have no student loans by the time you complete your residency. With three years to go, and living on a $90,000 a year income, you can do it. Then, when you come through the other side as a full-fledge doctor, you’ll have the great income and be sitting there debt-free. Not a bad place to be, right?
I understand the Roth seems like a pretty good idea right now, but my advice is to stick with becoming debt-free as quickly as possible. Once that’s done, you and your wife will be able to invest, save, and build wealth like crazy!
-Dave
Tuesday, February 25, 2014
Tuesday, February 18, 2014
How to end credit card offers
DEAR DAVE: How can I get credit card companies to stop sending us preapproved offers?
My wife continues to sign up for these, and now we have $40,000 in credit card debt. If you want to quit receiving credit card offers in the mail, one way to slow them down is to opt out of marketing offers on your credit bureau reports.
If you want to quit receiving credit card offers in the mail, one way to slow them down is to opt out of marketing offers on your credit bureau reports.
— Dan
DEAR DAN: Chances are you'll never get credit card companies to stop sending stuff, but there a few things you can do that might help slow things down. Access your credit bureau report, and opt out of marketing offers. You can also freeze your credit report, and send direct requests to the credit card companies to take you off their mailing lists.
I've been telling people not to use credit cards for 20 years and, believe it or not, even I get offers in the mail. The more mailing lists you get on, the more your mailbox will fill up with junk mail.
If you have magazine subscriptions and things like that, your contact information is circulating all over the place.
The next thing I'm going to say may sound cruel, but I really don't mean it that way. You don't have a junk mail problem, Dan. You have a relationship problem. You two are not on the same page about money. Either she doesn't feel like you two have enough money, and she's resorting to credit cards for this reason, or she does this because she's a spoiled brat who thinks she should always have what she wants when she wants it.
Via - http://newsok.com/article/3934409
My wife continues to sign up for these, and now we have $40,000 in credit card debt. If you want to quit receiving credit card offers in the mail, one way to slow them down is to opt out of marketing offers on your credit bureau reports.
If you want to quit receiving credit card offers in the mail, one way to slow them down is to opt out of marketing offers on your credit bureau reports.
— Dan
DEAR DAN: Chances are you'll never get credit card companies to stop sending stuff, but there a few things you can do that might help slow things down. Access your credit bureau report, and opt out of marketing offers. You can also freeze your credit report, and send direct requests to the credit card companies to take you off their mailing lists.
I've been telling people not to use credit cards for 20 years and, believe it or not, even I get offers in the mail. The more mailing lists you get on, the more your mailbox will fill up with junk mail.
If you have magazine subscriptions and things like that, your contact information is circulating all over the place.
The next thing I'm going to say may sound cruel, but I really don't mean it that way. You don't have a junk mail problem, Dan. You have a relationship problem. You two are not on the same page about money. Either she doesn't feel like you two have enough money, and she's resorting to credit cards for this reason, or she does this because she's a spoiled brat who thinks she should always have what she wants when she wants it.
Via - http://newsok.com/article/3934409
Monday, February 10, 2014
Starting business tips from Dave Ramsey
"Working for yourself is one of the toughest things you can do for a career, and you better make sure you're doing something you love because it'll take years of blood, sweat and tears to be successful.
Think about something you'd want to be doing every day five years from now and have anywhere from 20 to 200 people doing it with you. You'll always do a better job and have more fun when you're involved with something you love. When it comes to running the business, pay cash, have a written game plan and don't be afraid to grow slowly. Lay out a smart business plan ahead of time, and know everything from your marketing strategies and cost of start-up equipment and supplies to what your projected revenues are and the per unit charges for all your little widgets. Lay this all out like you had to prepare a report for a college class, and that's what a business plan looks like.
You might not make $100,000 your first year, but who does? Just take your time. Be patient, be smart and give people a quality product and professional service. If you'll do those things, chances are you'll be a success."
Source:The Holland Sentinel
Think about something you'd want to be doing every day five years from now and have anywhere from 20 to 200 people doing it with you. You'll always do a better job and have more fun when you're involved with something you love. When it comes to running the business, pay cash, have a written game plan and don't be afraid to grow slowly. Lay out a smart business plan ahead of time, and know everything from your marketing strategies and cost of start-up equipment and supplies to what your projected revenues are and the per unit charges for all your little widgets. Lay this all out like you had to prepare a report for a college class, and that's what a business plan looks like.
You might not make $100,000 your first year, but who does? Just take your time. Be patient, be smart and give people a quality product and professional service. If you'll do those things, chances are you'll be a success."
Source:The Holland Sentinel
Monday, February 3, 2014
What to do when employee should be paid more than you can ?
"That's a tough situation when you don't have control over financial compensation. At my company, the human resources handbook comes with one mandate: Treat people the way you would want to be treated. So I'll ask you. If you were the employee who deserved more money, how would you want to be treated?
Here's the hard truth. If a member of your team can make significantly more money elsewhere, there's a good chance they'll eventually leave. However, if I knew that my leader was fighting and trying to convince the decision makers that I deserved more money, plus doing other things to offset the financial issues, it would mean something to me.
There always are other gestures you can make to show someone they're valued and appreciated. You might let them off a little early when their kid has a ballgame. You even could make a special award presentation to this person or strongly recommend them for a promotion.
Still, at the end of the day, you either give people what the marketplace will pay, or you run the risk of losing them. Without control over the purse strings, there's only so much you can do in those kinds of situations."
Source: http://www.wickedlocal.com/x579269991/DEAR-DAVE-Control-the-overhead
Here's the hard truth. If a member of your team can make significantly more money elsewhere, there's a good chance they'll eventually leave. However, if I knew that my leader was fighting and trying to convince the decision makers that I deserved more money, plus doing other things to offset the financial issues, it would mean something to me.
There always are other gestures you can make to show someone they're valued and appreciated. You might let them off a little early when their kid has a ballgame. You even could make a special award presentation to this person or strongly recommend them for a promotion.
Still, at the end of the day, you either give people what the marketplace will pay, or you run the risk of losing them. Without control over the purse strings, there's only so much you can do in those kinds of situations."
Source: http://www.wickedlocal.com/x579269991/DEAR-DAVE-Control-the-overhead
Subscribe to:
Posts (Atom)