Unfortunately for this site’s fanatics, I came back with some summertime laziness that has left me with little desire to sit down and pound out a money post. As my 2nd school year is set to start Wednesday, I’ve been reconsidering what I want out of this site.

Do I want to keep writing? Do I still have a desire to research and create posts regularly for readers? These are some questions I still can’t answer.

So as much as I’d like to give you concrete details, I can’t. I’m enjoying my time off school and can’t give any one a concrete date that posts will start appearing again (if at all).

Thanks for sticking with me throughout the year and maybe I’ll see you sooner than later.

-Austin

Photo: Horia Valran

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Renting 101: What You Should Know Before You Sign – It’s something almost every one will have to do in their lives, but we don’t know a lot about. This post helps you get ready to move out on your own for the first time.

The 5 Books That Changed My Money Life – Behind every financially literate citizen are some money books that kicked them in to gear. Here are my favorites and one’s I suggest to everyone in my life.

How to Make Your Own Affordable Olive Garden Dish – Corinne found this recipe and allowed me to write about it. If you’re a fan of the OG, then this post is like Christmas morning for you.

How I Saved $65 With a 5 Minute Phone Call – If you’re going to be staying in a hotel soon and want to save a large percentage of a night’s cost with 1 phone call, then please read this post.

Credit Card Debt Facts that Will Scare You Into Staying Out of Debt for Life – You can’t be successful with your money and carry credit card debt. This post explains why and shows you some numbers that will shock your wallet.

Photo: TedsBlog

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I’m currently celebrating everything America, but Japan’s played a huge role in my life over the past year. Here’s some of FF’s best posts about Japan.

Do I Send Money Home? Dealing with Exchange Rates – It’s a complicated topic with differing opinions, but this post helps bring some clarity to exchange rates and hopes to make the most out of your money when you send money overseas.

Comparing Grocery Prices in Japan to America – One of my most commented posts (some due to my poor math skills, but now fixed!) An inside look at the differing prices between common products and how inflated some of the Japanese prices are for certain western style foods.

Cost of the iPhone 3G in Rural Japan – Corinne bought an iPhone and I do my best to decipher the complex contract to see how it compares to buying one in America.

Buying a Car in Japan: Our Story – The single best purchase of my time here in Japan. Everything about the process including research, negotiations, and aftermath.

Daily Life of an Assistant Language Teacher in Japan – A rough idea of my job and what you could expect teaching English in a Japanese public school.

Photo: Tiseb

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Since I’m on vacation and school’s around the corner, here are some of the most popular FF posts geared towards college students.

How Much Extra Should You Pay on Student Loans? – The loan process is more difficult than college itself. This post helps bring some clarity to your student loans to help decide which loans are the priority and which can be left until later.

The Entrepreneur Test: How Well Do You Score? – I graduated, but the whole college thing never really clicked for me. Maybe you feel the same way and it could mean you’re an entrepreneur at heart. This post asks you some self-reflective questions which could shed some light on your post-college future.

3 Steps for Outrageous Savings in College – There are a lot of little things to cut spending on in college, but these 3 categories are guaranteed to bring huge savings to your wallet in the fall.

Paid to Travel the World and Other Reasons Teaching English Abroad Has Taken Off – More and more people are heading abroad after college and this post helps explain why this is turning in to such a popular post-collegiate stop for twenty-somethings.

The Extensive Guide to Starting a Textbook Side Hustle in College –  Everything you need to know about the process including marketing, organization, and shipping hacks. We made almost $5,000 in a little over a year and this was the single most educational experience I had in college.

Photo: California Cthulhu

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Asset allocation is perhaps the single most important investment decision that you will need to make. Fortunately, you only need to make the decision once and then ride it out for the next 30+ years. In fact, changing your asset allocation is far more likely to be harmful than helpful.

So, why is asset allocation important? Generally, when you increase your risk, you also increase your potential for return. That is, if you want to make a higher return, you have to take greater risks. However, if done right, proper asset allocation can achieve both greater return and reduced risk.

When I initially started investing, deciding on my asset allocation was by far the most challenging decision I had to make. In its simplest form, it consists of simply making the decision about how many of your investment dollars will go to bonds and how many to stocks. However, the advice on even that relatively simple decision varies greatly.

Simplifying Asset Allocation

If you are a conservative investor who is willing (and able) to accept a lower return in order to take as little risk as possible, then your age is your bond allocation. Merely subtract your age from 100% and voila, you have your stock allocation. For example, if you are 25 years old, you will invest 25% in bonds and 75% in stock. If you are the risk pursuing type, you can subtract your age from as much as 125%, which translates to 100% stock allocation.

Naturally, if you are in your 30s or 40s and just now starting to invest, you will need to put a larger percentage of your income into investing or take greater risks in order to make up the money you lost by waiting. However, for reasons far outside the scope of this article, you should allocate at least some to bonds because an allocation of up to 10% can actually reduce your risk while also increasing your return. For the same reason, you will always want at least some of your investment dollars in stocks.

As a side note, your stock-bond allocation is the one aspect of your asset allocation that will change over the years. The rule of thumb is that you increase your bond allocation by 1% each year. This can be accomplished in two ways: (1) by putting your new investment dollars into bonds or (2) shifting high performing assets into bonds during annual (or biennial) rebalancing.

Asset Allocation Choices

As I said before, your stock-bond allocation will be your easiest allocation decision. If you decide to go with a total market fund and a total bond market fund, you could theoretically call it quits after making this allocation. However, if you want to continue reducing your risk while increasing your return, you will need to make additional allocation decisions. Here is a list of at least some of those decisions:

• Stocks vs. Bonds
• Growth vs. value stocks
• Government bonds vs. corporate bonds
• U.S. vs. international stocks
• Bonds vs. treasuries vs. t-bills
• Pacific vs. European vs. emerging market stocks
• Investment grade vs. junk
• Large cap vs. mid-cap vs. small cap stocks

Naturally, you can add commodities or other sector specific stocks, as well. However, when you start investing in those areas, you may be venturing out of investment and into speculation.

A great thing about asset allocation is that it can be as simple or as complicated as you want it to be. The best part about it is that asset allocation will allow your investments to ride out many of the ups and downs of the market because, for example, while U.S. stocks are suffering, U.S. bonds are usually flourishing.

In the future, I’ll try to put together some information about your different allocation options. In the meantime, do some research and figure out your stock-bond allocation.

Thanks to Jarrad for the post and make sure to check out his site, Ganbatte Times.

Photo: blprnt

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Adam’s been writing about money for about 6 months. During the podcast we talked about investing as a 20-somethings and the differences between money in the U.S. and the UK.

You can subscribe to the podcast’s RSS feed or download and subscribe on iTunes to get every episode delivered to you.

The Foreigner’s Finances Podcast Episode 9

[01:00] – Adam’s intro to Magical Penny and how got started writing about personal finance

[04:30] – The first steps to getting your finances in order including proving to yourself you can consistently save before you invest

[08:00] – Common misconceptions of investing

[11:00] – Differences in investing between the UK and the U.S.

[16:00] – Adam’s favorite money topics to write about at Magical Penny

[18:30] – What the future of Magical Penny holds

A huge thanks to Adam for taking some time to talk and make sure to check out his site, MagicalPenny.com!

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When this post goes live, I’ll be somewhere over Alaska playing Tetris on my headset TV device.

I have some some review posts, a guest post, and a podcast already scheduled for the 2 weeks so enjoy those and just know I won’t be responding to comments or e-mails as those will interfere with my hot dog eating and golfing.

Have a good couple weeks and FF will be back in full swing with the normal Monday, Wednesday, Friday, Sunday schedule a couple days after the 17th.

Photo: laffy4k

In January I wrote about the specifics of your credit score. Quickly, your credit score is a number between 300 and 850 that tells lenders how trustworthy you are for a loan. The better your credit is, the higher the score. Credit scores cost around $15 to get.

Your credit score is based off your credit report. It’s a huge report card that shows any loans, credit cards, or mortgages you’ve had and how trusty you were with the loan – aka did you pay the loan.

Legally, you’re allowed to get a free copy of your credit report from each of the three main credit bureaus - Experian, TransUnion, and Equifax – once a year. This means you can get them all at one time, or you can spread them out over the course of a year.

Today, I’m going to show you the process as I check my credit report so you can feel comfortable getting your own report. On Wednesday, I’ll do the same for my credit score.

In January I got my credit report from Experian, so today I’m going to go with TransUnion. Once again, there are only tiny differences between the reporting agencies so don’t think yourself to death choosing between the 3.

1. Visit AnnualCreditReport.com

Note, this isn’t the commercial FreeCreditReport.com – that sites scammy and should be avoided.

2. Select your state and fill in your information

This step is simple and straight-forward. You’ll need to fill in your name, address, and social security number.

3. Choose 1 of the 3 credit bureaus to receive your report

4. Click through and answer security questions about yourself

They want to make sure you are who you say you are so they’ll ask you questions about loans or credit cards you may have with companies. If there is no answer for the question, choose that option. Sometimes a credit card will have a bit of a different name, so make sure you choose the right one.

5. You’re done! Read your credit report

It’s a lot of information to take in, but it’s important to go through the report and make sure it’s accurate.

When I checked mine last summer, there was a mysterious credit card that was actually my mom’s so I called the credit card company and got my name removed. It’s stuff like this that cleans up your credit report and boosts your credit score (which will save you on a car loan or mortgage someday).

What my credit report told me…

• I’ve been reported since August 2005 – the day I got my first credit card.
• I have 3 credit cards (true)
• My Discover card pulled my credit report in 2008. This remains on my report for 2 years, but won’t have a huge effect on my score.
• 1o different credit cards/banks have reviewed my information in the past 2 years. This doesn’t affect my credit score in any way.

What to do with your credit report

• Look for any incorrect reported information and call the company to dispute it
• Make sure all of your credit card information and payments are what you expect
• Print and file the report for future reference
• Create a GCal reminder to check your credit report again in 4 months

It’s pretty simple and should take you less than 5 minutes to get your actual report. It’s important to do so to make sure your financial self is reported fairly. A mistake on your credit report can bring your score down dramatically so take some time this weekend to get your report and make sure your information is accurate.

Once again, on Wednesday I’ll walk you through the steps to get your credit score.

Have you ever had any discrepancies on your credit report?

Photo: MeddyGarnett

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PT recently wrote a post for U.S. News and Yahoo! called the 5 Reasons Your Are Not Saving Enough for Retirement.

During our conversation we talk about this article and how you can properly prepare yourself for retirement in your 20s and 30s to make your life financially easier down the road. PT also tells us about PT Money’s transformation to a full-time blog and explains what it means to be a marathon completer.

Remember, you can subscribe to the podcast’s RSS feed or download and subscribe on iTunes to get every episode delivered to you.

The Foreigner’s Finances Podcast Episode 8

[01:00] – Welcome and PT Money’s transition to full-time blog

[03:45] – How marathons brought the PT family together

[06:30] – How PT got started with his retirement savings

[08:00] – Using savings tools to make saving/investing easier and automatic

[14:00] – How to give your finances a wake-up call

[18:00] – Saving for retirement vs. your kid’s college tuition

[24:30] – Estimating how much you need for retirement

[29:15] – The downfalls of relying on others for your retirement 

Thanks to PT and make sure to check out PT Money!

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This often hidden fact can be a surprise to some when they reach their 7th withdrawal in a month and get dinged with a $10 fee and a tisk-tisk e-mail from their bank.

So what’s the deal with this restriction? What do banks gain and what exactly is considered a withdrawal?

The good news is that deposits to a savings account are unlimited, but any withdrawal from the account is considered a transaction. This includes transferring within different savings accounts or transferring to a linked account.

Each savings account receives 6 transaction per billing cycle and the 7th transaction results in a fee. If the transactions keep occurring, the bank may even shut down your account.

The Actual Rule

According to Ally’s site: “The limit is actually set by federal law for electronic and telephone transactions from all U.S. savings and money market accounts.”

The legislation for the 6 transaction limit rule is referred to as Federal Reserve board Regulation D.

In layman’s terms: your bank doesn’t need to legally keep any of your savings account money in reserve. They can loan it out and because you can only make 6 transactions per statement cycle, they can be pretty sure that at least some of your money will remain in the account in case they need to tap your funds. The rule is a little confusing, but it makes sense from a business standpoint.

If you’ve read FF you know why I’m pro-online savings account so here’s the fees for online banks if you break this rule:

Online bank’s fee for each transaction after 6 in a billing cycle:

Ally: $10

ING: No fee, but may close account if withdrawals continue

Everbank: $10

FNBO Direct: No fee, but may close account if withdrawals continue

WT Direct: $10

HSBC: No fee, but if the transaction limits are exceeded for any 3 months during any twelve 12 month period, the Bank may be required to close the account or the account type be changed.

Emigrant Direct:No fee, but if you exceed the limit of six withdrawals for several months, your account will be closed.

Has any one ever had a problem with this rule with their bank?

Photo: CarbonNYC

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