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The Frugal Life – Living Well With What You Have

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s The Frugal Life News July 12, 2004 Edition ****************** A Note From Randal ****************** Hello Everyone, Welcome new subscribers and thanks to all of you who have been sharing The Frugal Life News with others! Hope you are all enjoying your summer and staying cool as much as possible. Please remember to share your frugal ideas for summertime living in the forum. You can access it here: The Frugal Life Forum As always, we appreciate all of your sharing of our ezines and websites. Until next time, Randal ********************************* Frugal Finances ********************************* Let’s Review! We began life-after-debt-freedom — the time during which all of our income that used to go to debt payments now goes to wealth building – by constructing an expense pyramid. An expense pyramid helped us prioritize wealth accumulation for various purposes, such as shelter, health care, mobility, leisure, etc. When we have accumulated sufficient wealth to cover the ongoing costs of each level of our pyramid, we have achieved total financial freedom. If we were fortunate, our employer provided a pension that covered our pyramid levels. Our responsibility was to continue working, pay off our debts fast, and wait until our pension kicked in. Lacking a pension, and taking advantage of as many tax-advantaged wealth-building opportunities as possible, if we annually contributed the maximum $6000 (for a married couple) to a Roth IRA averaging 6% a year for 20 years, this would create $233,956 and generate $14,037.36 tax-free each year – forever. Our Roth IRA could be responsible for the Shelter level of our pyramid. Likewise, a Health Savings Account, which allows tax deductible contributions up to the amount of the deductible of our High Deductible Health Insurance plan, can be used both to pay for out-of-pocket health expenses and shelter income from taxes. Assuming an annual health insurance deductible of $2,000 (for a married couple) and infrequent health care needs, and averaging 6% growth, we can expect this account to grow to more than $50,000 over 20 years and provide over $3,000 annually for our out-of-pocket health care needs – again… forever. Thus far we’ve invested $8,000 annually and managed to secure Shelter and Health Care for the rest of our lives. If we’re working with $2,000/month after-debt-freedom money, we have $24,000/year and have only used $8,000. Of course, we haven’t completely secured our expense pyramid. We still have food, clothing, mobility, and so on that require income. We’ve just about run out of tax-free wealth accumulation vehicles — there aren’t many for the average worker — so now it’s time to consider tax-deferred wealth accumulation vehicles. Don’t confuse Tax-Free with Tax-Deferred. “Free” means taxed never. “Deferred” means taxed later. And, in the U.S., everyone’s number one tax-deferred account is… The 401K. Because many employers support them, there’s a wealth of information available about 401Ks. Here are the 401K Basics: * An employee may defer up to $13,000/year. * Taxes are paid on any withdrawals at current income tax rate. * 10% penalty imposed on any withdrawals prior to age 59 â�� . Within this account, employees may choose from a variety of investment offerings. If you’re at all familiar with the Enron debacle, you know that, if investing in your employer’s stock is an offering, you might want to avoid this choice. In fact, I’d consider steering clear of any stock-type choices, no matter the “projected” growth, as long as there is a reasonable income-producing alternative. I’d also steer clear of any bond mutual funds. Shares of these funds can go down in value, too. If your company has a Guaranteed Income Contract option, a 4% interest rate on your annual $13,000 investment for 20 years grows to $398,540. Now you’re sitting on almost $700,000 of Debt-Freedom Created Wealth — and you never earned more than a 6% return! Not a bad trade-off for paying off your debts fast! ——————- Greg Moore is the author of the Wealth Building Course, “DebtIntoWealth — Lessons from My Journey to Debt Freedom”. To discover how to ESCAPE THE TWO-INCOME TRAP, click here: *************************** Free Lesson #1 – Debt Freedom Course *************************** Pay off all of your debt in 5-7 years using the money you already make. Find out why financial guru and best-selling author, Suze Orman, is advising her millions of followers to “Pay Everything Off as Fast As Possible!” ****************************************** Frugal Sharing ****************************************** Sharing Books with Strangers lets you share books with total strangers. All you do is slap on a BookCrossing label and release it into the wild. You might try an airport or Grand Central Station. Then you can track where it goes on the website. Fun way to make sure your books get well used. Visit the site: ******************************************** Frugal How-To – Recycle ******************************************** More and Cheaper Ways to Recylce Computers Many people don’t like dumping large items like computers into landfills … especially when you consider the toxic effects it’s going to leave for our children and grandchildren to deal with. Recycling this equipment is a wise decision. If you can’t find a local dealer who will be happy to have the machines / components for parts on repairs, then maybe one of these recyclers will be of interest to you. If you’re local, you could recycle for free at some of these places. AAA Regional Computer Recycling (Rochester, NY) – $15 fee plus shipping Earth Protection Services (Phoenix, AZ) – $.50/lb. plus shipping Intercon Solutions (Chicago, IL) – $10 monitors, $5 computers/scanners, plus shipping Metech Int’l (Mapleville, RI) – $30 fee includes shipping PC Disposal (Olathe, KS) – range of fees Resource Concepts, Inc. (Carrollton, TX) – no fee, but you pay shipping Surplus Buyers (Houston, TX) – no fee, but you pay shipping United Recycling Industries, Inc. – no fee, but you pay shipping MAKE YOUR OWN HOME AND BEAUTY PRODUCTS Bath, Beauty, Perfumes, Cleaning and Air Freshner/Deodorizer Essential oil kits allow you to make your own safe non-chemical home and beauty products. You’ll save a lot and feel better about making your home less toxic for yourself, children and pets. The Starter Pack has a Recipe Guide with tons of ideas. Make Your Own Home and Beauty Products ****************** Frugal Decorating ****************** Deodorize While You Kill Bacteria and Viruses Essential oils will make your home smell wonderful without the dangerous air freshner chemicals that have been in the news. The big bonus is that you also get the anti-microbial properties of essential plant oils so you can kill germs throughout your home without bleach and toxic cleaning products. The AromaBall is a handy plug-in appliance with a ceramic plate that holds a small pad on which you add essential oils. Easy-to-use as a night light. Get more info and/or purchase here: AromaBall for Deodorizer and Anti-Microbial Home Defense *********** Frugal Pets *********** Herbal Heartworm Program and Prevention Robin Sockness works with pet owners with an individualized program and has currently worked with over 300 dogs. Herbs are safer and less expensive so it’s a win-win situation for all. Prevention programs are available also. Read more about it here: Herbal Heartworm Program & Prevention Free Information, Free Ecards, and Pet Foods Too! Healthy Pet Corner provides lots of information and links for birds, cats, dogs, horses, rabbits, and reptiles. Healthy Pet Corner – Your Pet Portal ***************************************************** Frugal Ideas From Our Subscribers ***************************************************** WHERE DOES YOUR MONEY TRAVEL TO? Do you ever wonder where your money goes!? It seems to disappear, right? Well, now you can find out where a bill has gone or where one you have has come from at an entertaining website. All you need to do is enter the denomination, series, and serial number of any US dollar bill, and your current USA ZIP or Canadian Post Code and you’ll find out if your money is a world traveler after it leaves your hands. There’s a link for Canadian money also at Where’s George? **************************** What’s Going On In The Forum **************************** Maybe you can help these folks out with a few suggestions? Or post some of your own questions. LOG-IN TO POST Here’s the link: Forum Questions Needing Answers At The Forum 1. There are no new questions at this time. I guess everyone is enjoying their summer and not answering forums. :-) ************************* Home Based Business Ideas ************************* Home Spa Party Plan – Make Bath and Body Products Have you noticed how popular bath and pampering products have become? The HomeSpa Party Plan taps into that craze. Guests at HomeSpa parties will learn how to make bath salts, personalized perfumes, body spritzers and more using essential oils, while you make a nice income from Nature’s Sunshine. Home Spa Party Flint River Ranch – Oven Baked Pet Foods If you have pets, they’ll love Flint River and you can make an income providing good pet foods and other pet products to friends, neighbors and your family. Pets keep eating, so customers keep buying. If you love animals, this is a very rewarding home-based business. With only 100 volume a month you can earn 19% on all sales. Websites are not yet available. Flint River Ranch Nature’s Sunshine Products – Herbs and Supplements If you’ve been a natural health nut, you have a lot of information to share. Earn an income selling over 500 natural health products, beverages, essential oils, skin care systems, water filters, and more. Websites are also available for $15.95/month (plus an initial $19.95 set-up fee). Nature’s Sunshine Products Life’s Abundance Foods and Supplements Life’s Abundance products by Dr. Jane Bicks and Dr. Barry Sears who developed the Zone Diet for Overweight Dogs. Besides dog, cat and horse products, they have a non-toxic line of cleaning products – safe for pets and children. Websites available for $10.95/month (plus an initial $20 set-up fee). Healthy Pet Net *************** Legal Disclaimer *************** Information in The Frugal Life News (TFL) has been derived from sources believed accurate and reliable. In no event shall *The Frugal Life,* Randal Watkins, or the TFL staff be liable for any damages whatsoever resulting from any action arising in connection with the use of information herein. TFL does not knowingly accept ads from advertisers deemed detrimental to TFL’s readers, however, publication of an ad in TFL does not constitute an endorsement for such product or service. There is no remuneration for suggestions, tips, or ideas submitted by readers. All suggestions, tips, and ideas, submitted for publication in The Frugal Life, become the property of The Frugal Life, notwithstanding similar rights of the reader submitting such suggestions, tips, or ideas. TFL publishes readers’ names with their suggestions, tips, and ideas unless a reader requests otherwise at the time of the submission.

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