Military Finance Network

Welcome to the July 4, 2008 edition of the Carnival of Financial Goals - Financial Freedom Edition. This edition is focused on declaring your goal for financial freedom - be it freedom from debt, avoiding credit card use, or being able to retire.

On my other website, Cash Money Life, I wrote about Defining Financial Freedom. To me, financial freedom means being able to work on my own terms doing something I enjoy and appreciate, instead of working for a boss in a job I need to work because I have no other choice (at least financially). Financial freedom has a different meaning to everyone, so think about what it means to you and work toward it!

As today is the Fourth of July, I thought it appropriate to select those who wrote a Declaration of Financial Independence as the editor’s choice selections. I hope you enjoy reading these, and are inspired by the goals and progress of others!

Financial Declarations of Independence

These personal Declarations of Independence are a great first step toward becoming financially free. Writing down your goal, or at least defining it, is a great step toward accomplishing financial freedom.

• Mrs. Micah shares her article, What Financial Independence Means to Me. Mrs. Micah also defines financial freedom as not having to work miserable, dead end jobs because she needs the money, but rather being able to choose her work.
• Twinsmom presents Financial Independence Day posted at Blessed by Twins. Her goal is to pay off her loans and establish an emergency fund. Awesome goal, Twinsmom!
• JvW shares her article, Independence Day Challenge Complete! (Mostly) posted at The Good Life on a Budget. At the beginning of June she set a goal to be financially free from one credit card by Independence Day - and she achieved her goal with a week to spare. Congrats!
• Pamela Grundy from Personal Finance Analyst wrote about declaring financial independence in hard times. The economy is difficult right now, but there are things we can all do to make do and even thrive. Read what Pamela is doing.
• MIT Beta at Don’t Feed the Alligators declared Financial Independence Day by stating his goal of financial independence. Like me,he wants to be free from working for a boss.

These are not personal declarations of Financial Independence, but can help you define what that means to you.

• Free From Broke asks what Financial Independence means to you in his post, Independence Day - What Does It Mean To You?
• Phil B. asks What is Rich? at Phil for Humanity. Phil points out that Almost everyone has a different definition of being rich.

More Financial and Goal Related Articles

The following articles all have one thing in common: they are meant to teach and inspire people to achieve their goals. You gotta love that!

Career

• Dorian Wales presents The Personal Financier: Actively Manage Your Career to Stay On Top of Your Game posted at The Personal Financier, saying, “Frightening statistics show how many of us lack active control of our careers. I offer these focal points to actively managing our careers.”

Debt Reduction

• paidtwice presents A Year Of Debt Reduction at I’ve Paid For This Twice Already. It is truly amazing how much debt she and her husband have reduced over the last year. So much in fact, that they are a year ahead of schedule in their progress. Much of their success comes from setting realistic goals, and snowflaking.
• Kevin at Becoming & Staying Debt Free, just paid of his mortgage, and is now working on reducing his remaining debt! Read his article, “And That Mortgage is Gone!”; Kevin is Mortgage Free!, for the story. Very inspiring!

Financial Education

• MoneyNing presents Our Thinking of Money Matters is Way Too Complicated posted at Money Ning, saying, “Keep it simple!” I think too many people try to complicate things, and David’s goal to keep things simple is an awesome goal!

Goal Setting

• Steve, of Brip Blap fame, writes about updating his financial goals, July 2008. This is his mid year check up. Even though Steve started off a little slower than he wanted to, it looks like he is on pace to meet or exceed his goals. Awesome!
• Jeremy from GenxFinance shares some tips on how to perform a Mid-Year Financial Checkup and Review Your Goals and Progress. Periodically checking in on your progress is essential to good financial planning.
• Jonathan from Master Your Card, presents 10 Steps to Take Before Having a Baby. Being financially prepared for a baby is just as important as being emotionally prepared! (Of course, this is coming from someone without kids, but I think it’s probably true!)
• Todd presents Stop Aiming For Average posted at HarvestingDollars. If you aim for average, that’s probably the highest level you will ever achieve. Shoot for the stars and if you fall short, you’ll still probably be better than average!
• Mark Runta presents Lessons from the Wild! posted at Smart Investing & Money Management. This is a carpe diem type message… Just do it!
• Brice Hogan presents Believing is Achieving posted at Financialzip.com. He says, “In order to make the most out of yourself and your goals you must believe.” I agree, Brice. Nice article!
• Dereck presents How to become what you want to become, in about two days posted at I Will Not Die. Solid goal setting tips!
• Anand presents How to Master Money & Wealth | Commitment and Focus posted at Anand Dhillon.com. Anand has some great tips for cultivating the mindset you need in order to become financially successful.
• Ralph Jean-Paul presents How to Think Like a Visionary posted at Potential 2 Success, saying, “Accomplish amazing goals by setting your sights in the right direction. Expand your mind and learn how the great thinkers, inventors, and leaders reached greatness by having and following their visions.”
• Rob Bennett presents 8 Paths to Financial Independence posted at A Rich Life: Personal Finance for Liberal Arts Graduates.

Net Worth

• Madison presents May 2008 Net Worth Update: +1.4% posted at My Dollar Plan. Not bad progress wit the current markets!
• MyMoneyAdventure presents My New Net Worth posted at My Money Adventure.
• Jim presents June ‘08 Net Worth Monthly Review posted at Blueprint for Financial Prosperity.
• John presents What is your ING Number? posted at Young With Bux. This is a tool from ING that can help you set your financial goals.

Real Estate

• Silicon Valley Blogger presents Where To Find The Down Payment For Your Dream Home posted at The Digerati Life. Many people dream of owning their own home, and this articlehas some tips to help you save for that down payment!

Saving

• Shamelle presents Money And Processions: Breaking Free From The Materialism Trap posted at Enhance Life. Shamelle writes about wants vs. needs and how to choose what is important to you.

Thanks for stopping by!

Thank you for visiting this edition of the Carnival of Financial Goals. Submit your blog article to the next edition of carnival of financial goals using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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This is a guest article by Ryan Delany, aka HarvardMarine. Ryan is the author of Semper Finance, an investing blog geared to military members and individuals with a goal of improving their net worth.

The only mutual fund you should buy is an index fund.

The first and still the best known of these is the Vanguard 500 Index Fund.  As the name implies, this mutual fund mimics the S&P 500 index.  Why is investing in the S&P 500 a good idea? Because historically, it has averaged 11% annually.  How many mutual funds can beat that?  Not many.

Here are some more reasons why you should only invest in an index fund:

80% of mutual funds underperform the S&P 500. Scary, but true.  Why waste your time trying to find one that’s going to do better, when there is an 80% chance you’re going to be wrong?

Index funds have significantly lower management fees. Having a highly qualified team to pick the fund’s stocks is expensive and it eats into the profits.  An index fund doesn’t have to do any research; they just buy and sell the stocks to match the S&P or another index.

Mutual funds have too much money to invest very well. Think about it, you can’t invest more than a few hundred thousand dollars in a stock without driving up the price.  If you have a billion dollars to invest, that means you will have to pick dozens of stocks.  That means the management must constantly pick stocks and re-evaluate their current holdings.  It also means that if any one stock does particularly well, it doesn’t effect the bottom line very much.  There are only so many stocks out there for managers to choose from, when they have to pick 50 stocks that means only 10% of the stocks are in their top 5 choices, the other 90% are pretty far down the list.  How well do you think their 48th, 49th and 50th choice are going to do?

Mutual funds are too hard to understand. Investors should always follow the axiom “Only invest in what you understand.”  It is time consuming enough to evaluate one stock.  Can you really expect to understand and evaluate all 50, 100 or 200 stocks in a mutual fund?  If you’re going to take the time to understand the stocks in a mutual fund then you might as well just buy the stocks yourself.

Moral of the story: Don’t buy a mutual fund unless its an index fund.

Patrick says: Index funds have long been recognized to be attractive investment options because of the priciples outlined above. Vanguard is a great option because they have great funds and are generally among the lowest priced index funds available to the general public (Vanguard is a also non-profit company; their goal is to make it easier for investors to direct more of their money to their investments and spend less of their money supporting the company running the fund). This article is not meant to be an endorsement for Vanguard, but for index funds in general. As always, do you research before buying any equities or other investments.

With the current issues with our economy, many people are having trouble making ends meet. That is why the VA is reaching out to vets who are having problems making their mortgage payments. Since 2000, VA counselors have helped about 74,000 veterans, active-duty members and survivors keep their homes, saving the government nearly $1.5 billion.

The VA is not only reaching out to veterans with VA Loans, however. They are reaching out to all veterans who are having difficulty meeting their mortgage payments.

“VA is reaching out to veterans — both those who use our home-loan guaranty program and those who don’t take advantage of our guaranties — to keep people in their homes,” said Secretary of Veterans Affairs Dr. James B. Peake. “I’m proud of our solid record of success in helping veterans and active-duty personnel deal with financial crises.” - VA Reaching Out to Vets with Mortgage Problems, VA website

VA Loan counselors offer assistance to all veterans

The VA is encouraging military members, veterans and surviving widows with at-risk loans to seek advice from VA loan counselors even if their loans are not VA-guaranteed. While VA Loan counselors don’t have the authority to restructure loans (whether or not the are backed by the VA), they can advise veterans on their options including methods to negotiate their mortgages with their mortgage holder.

If you are a veteran who is having difficulty, consider contacting the VA’s loan counselors for some ideas on how you can meet your obligations. It’s easy, just call 1-877-827-3702. It’s a the toll free number that will automatically direct you to the nearest of nine VA regional loan centers.

Many VA Loans avoided the subprime mess

While the number of foreclosures in the US has increased over the last few years as buyers have been enticed by teaser loans and exotic mortgages, the number of VA loan foreclosures has dropped. This is because VA Loans go through a standard screening process before approval.

In recent years it has also been possible for homebuyers to purchase homes without mortgage companies verifying income, credit, and other vital financial information. Not so for VA loans.

“We never did the same things [as mortgage companies] as far as changing rules for what it takes to get a loan,” said Judith Caden, director of the VA Loan Guaranty Service, in a phone interview. “We’ve required underwriting and always had underwriting standards. We’ve always required that [applicant] income and credit be documented. We made sure that someone getting a VA loan could afford that loan.”

More VA Loan Information

The VA home loan guarantee program is an affordable way for veterans to buy a house with a guaranteed loan and no down payment. In fact, over 90 percent of VA-backed home loans were given without a downpayment. More information about the VA home loan guaranty program can be obtained at www.homeloans.va.gov. In addition, you can get more free information through Military.com’s VA Loan page.

I have a new feature to announce on this site - a military discounts page. There are a lot of ways to make free money out there and one of my hobbies is finding them! My goal is to bring everyone regular updates on ways you can save money and make money through deals, discounts, and freebies.

As Military members and veterans you are sure to know of the many military discounts that are available to you and your family members. On the military discounts page is a list of some of the options available to you. The best part is, some of these deals are available to Active Duty, veterans, family members, DOD civilians and the general public. My goal is to help you make money and save money!

All programs are open to everyone unless specified (those eligible in parenthesis).

What kind of offers will you find? How about:

Free Money

A little free money never hurt anyone! Try some of these discounts and freebies for a little extra spending money!

• $200 in free groceries (through July 31, 2008).
• $50-100 with credit card bonuses.
• $25 ING sign up bonus - earn $25 for signing up for one of the nation’s best on-line banks.
• $10 Ebates Bonus (Ebates details)

Free Stuff

Everyone loves free stuff!

• Blockbuster Total Access one month free trial
• Netflix free trial

Education Benefits

You’ve earned your education benefits so use them and increase your earning power!

• GI Bill information (military and veterans only)
• Military Friendly Schools (military, veterans, and family members only)
• Military Scholarships (military, veterans, and family members only)

VA Loan Information

A VA Loan is one of the best ways for a military veteran to afford a house. Be sure to get the right information before applying for your VA Loan!

• VA Loan info (military and veterans only)

Travel Discounts

Try some of the following discounted travel outlets when making your next travel reservations:

• Expedia
• Hotels.com
• Kayak.com
• Priceline
• Travelocity

Check for updates!

Be sure to check back often! I will try to make new listings as new new deals become available. Be sure to spread the word. Your family members and squadron members will thank you!

If you are like me, you probably don’t like being stuck in a cell phone contract. Unfortunately, canceling your cell phone contract often comes with an early termination fee that can run as high as $200!

The good news is there are ways to get out of your contract without paying any fees. If you are a military member, there are a few extra clauses that allow you to cancel your cell phone contract without paying any early termination fees.

Cancel Your Cell Phone Contract When You PCS

One way to cancel your cell phone contract without early termination fees is when you PCS. You won’t be able to do this every time, but you should be able to cancel your contract if you PCS to a location where your current cell phone provider doesn’t have service, or if you PCS overseas. Be sure to show the cell phone provider a copy of your military ID card and a copy of your orders.

I’ve read about some cell phone providers trying to force military members to continue paying their contracts even when the PCS overseas, but you should insist that they allow you out of the contract.

Cancel Your Cell Phone Contract When You Deploy

Deployments are not always a guaranteed way to get out of your cell phone contract without paying early termination fees, but you may be able to do it. Be sure to take a copy of your military ID and orders with you, or you may be able to fax in a copy.

Your best bet to be able to cancel your contract is when your deployment is for longer than 6 months. If the cell phone provider will not cancel your contract for you, they will probably allow you to place your line on vacation status, which places your contract on hold until you return. You will be able to keep your phone number and will still remain on contract when you return from overseas.

Sell or Transfer Your Cell Phone Contract

If canceling your contract doesn’t work, you may be able to sell or transfer your cell phone contract and avoid early termination fees. You may be able to find a friend or relative willing to take over your contract. All you need to do is call the cell phone provider and do an assumption of liability transfer, which legally transfers your contract to another person - that way you won’t get stuck holding the bill.

If you need help finding someone interested in taking over your contract, you can try posting your phone on Craig’s List, or using a free service like Trade My Cellular, who will match you up with people around the US. You can also try Cell Swapper and Cell Trade USA which provide a similar service for a $20 fee, but seem to have more options.

You have enough to worry about when you serve our country. Hopefully your cell phone contract isn’t one of them.