photo credit: LoreleiRanveig

This is part 3 of a multi-part series entitled ‘Green Matters’, which will focus on how reducing your environmental burden will also reduce your expenses. Not only is it the right thing to do, but choosing low cost green alternatives is becoming easier and cheaper by the day. Part 3 of Green Matters is going to show you why skyrocketing gas prices will ultimately be good for you and generations that follow.

Temporary Pain Equals Long Term Gain

In the past six years, the price of gasoline has risen from $1.31 per gallon to $3.80, a 290% increase. If you drive the average of 12,000 miles a year and get a relatively efficient 25 miles per gallon, your costs to drive have increased from $628 to $1,824 annually in that time span. For those with gas guzzlers, you’re most likely paying even more than a $1,200 increase. But, there is a silver lining in being resigned to paying higher prices at the pump.

Ultimately, skyrocketing gas prices and heightened environmental awareness are going to result in significant positive changes in automotive technology in the departments of fuel efficiency and lower emission levels . In the last few years, Americans have complained, but ultimately lived with high gas prices as being a temporary ‘road bump’. So they’ve continued to buy inefficient performing vehicles.

This past year, something has seemed to change. Suddenly, the feeling is that high prices are here to stay, and maybe it’s finally time to take fuel economy into serious consideration when purchasing a vehicle. Had gas prices slowly ascended at prices anywhere near inflation, there would be little, if any, pressure for wide sweeping fuel efficiency improvements from consumers. A spike that has sustained is a different story. Read the rest of this entry »

photo credit: Jacob Botter

Net Positive Income - a Good Problem to Have

It’s great to be ‘in the black’ with your net income, simply meaning that more money is coming in than being spent. This is different that being 100% debt free. All it means is that you are not accruing more debt due to a negative cash flow.

When you’re relatively young one of the most daunting questions can be ‘what do I do with all this cash?’. It’s a nice problem to have, but without a strong financial background, the default solution often tends to be to stick it away in a savings account or certificate of deposit. Next to spending it or placing it under your mattress, this is about the worst thing you can do with your extra income, but more on that later. In general, one of the toughest decisions to make in personal finance is to figure out where the heck to put your money because it involves answering a lot of tough questions. Let’s get the easy parts out of the way first. Read the rest of this entry »

photo credit: Matt Biddulph

A Story that Illustrates a Common Mutual Fund Misconception

During a lunch recently, ‘Matt’, a colleague, and I were discussing investments and the topic turned to mutual funds. I proceeded to tell him a few funds that I had in mind and why I liked them. The conversation then turned to how I choose mutual funds, primarily how to choose a good mutual fund manager whose strategy matches your goals. When it comes to this topic, there are a few mutual fund managers that I hold in high esteem and I began to talk about them. Matt then asked the question, “well if everyone else thinks that this mutual fund manager is great, then won’t the mutual fund price become inflated?”.

For those with a strong background in mutual fund investing, this misconception is one that is easy to overlook when talking to others about mutual funds. Many investors assume that because mutual funds have a price per ’share’, then their value is determined on the open market by investors who buy and sell shares. In the case of a certain type of mutual fund, this is the case. However, in most cases, investors need not worry that the price of a mutual fund they are buying has been ‘pumped’. I’ve openly promoted certain mutual funds on this site, but in every case they’ve been open ended funds (we’ll discuss later). My promotion of these funds has no effect on the share prices of these funds. Let’s take a look at why this may be.  Read the rest of this entry »

photo credit: kivanc

Recently, we covered step 1 on how to get out of debt - stopping the bleeding, or preventing the accrual of additional new debt. Preventing added debt is essential when trying to break free of debt, however, you’re still going to be in the red unless you find a way that works for you to strategically fill the hole that you’ve already put yourself in. Without having a plan of attack, the length of time it takes you to pay off your debts will be magnified. Let’s discuss some of the current schools of thought out there, so that you can develop the best strategy for you to wipe out your debt. Read the rest of this entry »

photo credit: Amy March

A welcome goes out to all visitors from Jeremy’s genxfinance.com blog. Jeremy’s blog focuses on finances for those in their late 20’s and 30’s. Besides being an all around good guy, he’s a fellow Michigan State Spartan alumni, which makes him an even better guy.

The guest post I wrote is titled “How to Eliminate Mutual Fund Deadbeats from your Portfolio” and was based on one of your emails. It’s a solid read for those looking to take a second look at their mutual fund selections.

If you’re a visitor from GenXfinance who likes the content you see here, you can subscribe to the 20somethingfinance RSS feed here or get email updates here.