What does it all mean?

Can I make a humble request to out resident financial expert, b-squared, to explain what is going on with Fannie and Freddie? It's all over the news and seems like sort of a big deal... so the government is taking them over, but what does that mean? For those of us who don't have a mortgage, should we care?

how do you invest in the stock market?

So now that you're earning at least 3.75% on your savings account (see prior post), you're probably wondering what is the next step? Whenever you start a new job, you need to immediately enroll in the 401(k) (or 403(b) if working for the government) plan offered by your employer. Why is this so important? Employers almost always match a certain percentage of the amount you contribute. Often, they match $0.50 of every $1 you invest up to 6% of your income. So, if you invest 6%, you automatically have 9% put into your account. That's a guaranteed return of 50%. Nowhere else in the world will you get this kind of return on your money. Do this for 15 or 20 years when you're in your early to mid-20s and you will be a millionaire by the time you retire. By the way, employers match your 401(k) investments because they no longer offer pensions or other monthly payments like they used to a generation or two ago.

However, if you are unfortunate and your company doesn't match your 401(k), you should invest in a Roth IRA. Stay tuned for my next post where I will translate this crazy language.

Here's to monetary success!
B-Squared

how to afford coffee, wine, and tea...

Just wanted to let everybody know about the best way to earn interest on your savings. If you have a Washington Mutual (www.wamu.com) checking account, you are eligible to receive 3.75% on your money if you open an online savings. The online savings is the exact same as a regular savings in that you use your ATM card just the same to take out money, you can use the teller to deposit money, etc. The interest amount I receive in one month is more than I made in interest for an entire year with a regular savings. If you don't want to deal with WaMu, there are other banks out there with online savings like ING Direct, although the interest rate is not as high as WaMu.

Here's to monetary success!
B-Squared