Financial Carnival for Young Adults ' Best Articles

Welcome to the thirty second edition of the Financial Carnival for Young Adults. My purpose with this carnival is to create an easy-to-find place for information about finances for young adults. The carnival is hosted here at 20's Finances almost week and features the most recent articles from around the web. While last week we talked about career, money for young people, and saving, this week is a little different. I didn't use a topic approach and just selected the most interesting articles. I hope you enjoy this edition of the carnival.

Michelle @ Making Sense Of Cents writes Moving Back Home After College? ' Most of my friends were able to find great jobs soon after graduating, but that is mainly due to the better economy of where I live (Midwest). I of course know that there are other areas which aren't as lucky.

Lance @ Money Life & More writes 5 Reasons We Won't Separate Our Finances When Married ' When I eventually get married to my current girlfriend we are going to combine our finances. It is what makes sense to us and what will work best for us. We could decide to keep our finances separate but we have our reasons why we won't. So why are we so against us keeping separate finances?

Ted Jenkin @ Your Smart Money Moves writes Teaching Kids Financial Responsibility ' It's Your Retirement OR Their College Education ' For many parents in their 40's, a loud and disturbing wake-up call is beginning to happen.

Invest It Wisely @ Invest It Wisely writes You Don't Have to be a Born Entrepreneur ' Well, I'm proof that anyone can be an entrepreneur, whether they've been dreaming about it since they were kids or only since yesterday. I'm Not a Born Entrepreneur

IMB @ Investing Money writes Invest Money or Pay off Debt First? ' Do you have debt that you want to pay down? Is it keeping you from investing? Find out if this is the best approach for growing wealth.

Tushar @ Start Investing Money writes What Kind of Average Returns Can You Expect on Mutual Funds? ' This Post was Originally published at What Kind of Average Returns Can You Expect on Mutual Funds? on Start Investing MoneyIf you're thinking about investing in mutual funds it makes sense you'd want to look into the potential returns you could expect first. Diving in with no knowledge of what to expect is a great route to disaster.

PITR @ Passive Income To Retire writes Truly Passive Real Estate Investing ' Find out how I found a way to invest in real estate without spending any time managing my money. It's truly passive!

Jon the Saver @ Free Money Wisdom writes Most Popular Outsourced Jobs ' Companies are outsourcing jobs more than ever these days. Learn about the most common outsourced jobs and how to avoid them!

MMD @ My Money Design writes To Be Young Entrepreneurs or Employees? My Kids Try Entrepreneurism ' My kids decided to snub their chores and test their luck at being young entrepreneurs instead. Here's their story and how the experience played out.

Jason @ Work Save Live writes Is it Necessary to Buy a House? ' Should You Buy a House? Whether it's friends, family, or colleagues, it seems like everyone these days wants to buy a house.

CAPI @ Creating a Passive Income writes 4 Steps to Declaring your Passive Income to the IRS ' Do you know the tax implications of making a passive income? Here are four steps to declare your passive income streams to the IRS.

Kanwal @ Simply Investing writes Can You Learn Investing From a 106 Year Old? ' Irving Kahn is an American value investor and money manager and the oldest living active investment professional at 106. He was an early disciple of Benjamin Graham, the creator of the value investing methodology. In his own words, here is some investing wisdom: 'You stick to value, to Benjamin Graham, the man who wrote the bible for the market.

Miss T. @ Prairie Eco Thrifter writes How to Take Advantage of the Hidden Job Market ' Did you know that a considerable proportion of job openings are never publicly advertised? Here are some things I have learned about advantage of the hidden job market.

My Wife Voluntarily Took a Pay Cut

Those who have been following my blog from the beginning know that our financial stability has rested on the cooperative success between my wife and me. When we first got married, we moved to New Jersey in order for me to go to graduate school. I was ambitious at the time, but I knew that I wanted to avoid student loans. In order to survive in this region, that meant that both of us had to work. We accepted some of the first jobs that came our way because we had to pay the rent. It was a challenge that I don't ever want to experience again.

We finally achieved some financial security after 1-2 years when my wife and I both got promotions. We were both ambitious and we moved on up within our organizations. Some may say that we used the advantage of being young in the work place to our benefit. I started a side business and my wife decided to go back to school. We weren't making a ton of money, but we were starting to save money for retirement.

While I strive to be the best employee that I can (a lesson that I learned from mowing my neighbor's yard when I was in middle school and completely missing a section of the yard ' oops), it is really my wife who excels at her job. She devotes many evenings to her job and is great with coming up with new systems to increase efficiency. Her hard work was finally recognized when she was offered two positions at once.

Two Job Offers: Which One is Better?

As I mentioned, my wife was offered two job offers in her current organization. After a lot of hard work and overcoming multiple challenges in the work place, she had started to believe that she wasn't appreciated. This obviously wasn't the case because as soon as she was offered one position, she was offered another by her supervisor in an effort to keep her. Here's a look at the two jobs:

Manager Position at Headquarters

My wife was first offered a job at HQ within her organization. It was almost the same title as her current title, but she would be more of a supporting manager than someone 'working on the ground.' The job offer comes with a lot of independence and some increase in travel. There was a small increase in salary, but one of the most attractive aspects of the job is being able to work with a great team. Her two supervisors are people who know how to manage well and she was confident that if she accepted this position, it would benefit her significantly. There would also be significant room to grow into Director positions within the organization at headquarters.

Director Position at Current Office

My wife is one of those hard-working employees who is hard to come by and she was also offered a director position in her current office. It's not everyday that someone who was making less than minimum wage less than two years ago at the same organization is later offered a director position. Between this and the significant increase in salary (more than the other job offer), my wife and I gave this offer some serious thought. She would remain doing what she was already doing, but would be recognized for the work she was doing. Accepting this position would also be a great thing for her resume as it would show a natural progression from officer, to manager, to director within a 2 year period. The only downside is that there would be limited growth for her after this point. There wouldn't be any other advancement within the organization.

The Best Job Does Not Always Have the Highest Salary

I've said it before, but the simple fact of life is that the best job does not have the highest salary. My wife and I sat down and talked about both positions and tried to figure out what was most important to us. Despite the advice given to us by most, my wife and I decided to accept the lower-paying manager position. While she enjoyed her current position and would have been happy to stay where she was at, the possibilities for the future excited her more than a larger boost in salary.

A Unique Approach to Building One's Career

Most people in our situation would often take the higher paying salary because advancement down the road is uncertain. There's no guarantee that she will get a promotion in another year or two (or 5 years). Even though there's no guarantee, we live with a different philosophy. My wife started at the company in an Americorps position, making less than minimum wage. It meant a huge sacrifice for us financially so that she could jump into a new career. It gave her relevant experience and it expedited her advancement within her career.

It worked the first time. Why not a second time?

Thus, she is taking a leap of faith, with the goal that the long-term benefits will outweigh the lower salary. While many people question her actions of essentially taking a pay cut, I couldn't be more excited for her as she grows in her career.

Do you think she made a bad decision? Which job would you have chosen?

How Your Starting Salary Affects Your Career Earnings

It was written in a previous post why you need to negotiate your first job out of college. The reasons given were great, but I wanted to touch on just how much of a difference a higher salary can have on your finances in the long run.

Difference Between Starting Salaries

Let's take two job seekers, Sally and Jane. Both are lucky and get offered jobs at a firm that starts them off at $35,000 per year. Sally is happy to have landed a job and can't wait to start. Jane, while also being happy, thinks she should receive a higher starting salary. She counter-offers, negotiates and settles for a starting salary of $40,000 per year.

You may be thinking, 'big deal, $5,000 isn't that much money', but in fact over the long run, it is. I'm not talking about investing the money in the stock market and watching it grow, but rather what happens to that $5,000 as it compounds upon itself over the years when you get raises at work.

What you need to understand is this: the starting difference between the two salaries is only $5,000. But all future raises are based on that initial $5,000. That initial $5,000 is going to turn into a lot of money as your career progresses.

For sake of simplicity, let's look at the salary Sally and Jane will be earning in 30 years. For this example we will assume they both stay in the same role, and both receive a 3% raise each year. In 30 years, Sally will be earning almost $85,000. Meanwhile, Jane will be earning a little more than $97,000. That is a difference of roughly $12,000! Remember, this difference is PER YEAR. So every year, Jane is earning more and more than Sally. The difference begins as just $5,000 but over time increases to $12,000. Over the course of these 30 years, Jane earned $250,000 more than Sally. We haven't even factored in the growth if we invested this money yet!

Of course in real life there are variables. There is no guarantee that both workers will always receive the same raise; one might get a promotion; there are ranges for how much you can earn for a given job, etc. All are perfectly valid points. The idea though is to show you how big of a difference a small amount of money can have on your future finances.

Importance of Negotiating

Please don't take this as me saying you should find the highest paying job. I'm not. I am saying to get the most money for the job you want to do and that involves negotiating. I have never heard of someone getting a job offer, trying to negotiate, and then being told the company has changed their mind. You are expected to negotiate. It's important that you do.

When you receive your job offer, be prepared to come back with a counter-offer. You will have to do a little research to find out the pay range for your job, but that can be found online. If you find the pay scale goes much higher than your offer, don't counter with the highest figure. Be reasonable. Ask for $5,000 more and be willing to meet in the middle for $2,500 more. Whatever you can get will put you that much further ahead in the future.

Why a Wagon is Better than SUV

The other day, I was walking up from the train to work and I couldn't help but notice the number of large black SUV's. Years ago (and it still may be the case today), there was a popular trend or cliche of stay-at-home-moms driving minivans. The popularized term, 'soccer mom' describes the stereotype well. If there is a stereotype (that is probably accurate) for the small city the I work in, it would be one of women driving massive, black SUV's. While I am sure some large families utilize the 3rd row of seating most of these large SUV's, I can't help but think it is a huge waste.

A little while ago, I wrote an article on all the negative aspects of SUVs. I am still hopeful that SUVs are on their way out, but I thought I would share a little more about my personal distaste for SUVs and why I think wagons are a much better alternative.

Growing Up in a 'SUV Family'

I grew up in a family with two older brothers. All three of us were active in several sports, meaning that we were constantly going to baseball games and often with friends. We'd sling out baseball bag over our shoulders and throw them into the back of our 1988 suburban.

Not our actual suburban, but very similar

As a kid, I loved this suburban. It has vinyl seats (do these even exist anymore?) and three spacious rows so you could comfortably fit 8 people in this thing. To say that I have many fond memories of this beast would be an understatement. We had it for many years and it was as reliable as they come. We even took this thing on road trips from Washington State down to Disneyland. I can still remember my parents driving through the night as us kids slept in the back and watched videos on the portable TV that we brought with us. This SUV did it all! The 4WD also allowed us to take it on the beach when on vacations. Talk about every kid's dream.

What I failed to understand at the time is the impact of the low fuel efficiency. I had to look it up (because I wasn't thinking about MPG as a 10 year old), but the 1988 suburban 4WD got a whopping 15 MPG on the Highway. In town? 11 MPG. Wowzers! Mom and Dad, if you are reading this, we need to talk. Gas prices were significantly lower and times were certainly different back then, but this influenced how I understood cars.

My Experience with Cars

Growing up, as I have already shared before (you can see a picture of my first car here), I got a nice car for my first car. I had bought into the myth that a nice looking car mattered more than the practical uses of it. I didn't care that it was only meant to bring me from point A to point B. I wanted a nice car. One to impress the ladies.

This quickly changed in college. I had to suffer through four summers of moving in and out of new dorms and apartments in my small mustang. I swear that I took 2-3x more trips than any of my friends because I had a trunk the size of a microwave and an even smaller backseat. I stuck with the car and eventually sold it at the end of my college years (just a week before graduation). It was only a few months later that I made one of the wisest choices of my young adult life. My wife and I bought a nice wagon.

Our actual car that we purchased in 2009. Still have it today.

While I wasn't sold on the color at the time, my wife and I knew that we wanted a wagon. If you compare wagons to SUV's, they beat them in almost every category. Here are some of the reasons why I think wagons, while socially unpopular, are better than SUV's:

• Cost Less to Buy - For some reason or another, SUV's are at minimum, thousands of dollars (brand new) more than a wagon
• Cost Less to Drive - Our wagon gets about 30MPG on the highway, compared to 22-26MPG from some of its SUV counterparts
• Just as Much Passenger Space - Unless you go for an SUV with 3rd row seating, our passat wagon has just as much legroom and seating for our passengers as small suvs.
• Just as Much Cargo Space - I know many of you may question this, but our wagon has tons of space. It has more cubic cargo space than several small SUV's. I regularly put the back seat down and throw my bike in the back with lots of extra space. When we last moved, we even fit our 3 person loveseats in the back of our car. It was tight ' but they still fit inside!

Will I Always Buy a Wagon?

In case you can't already tell, I absolutely love our wagon. I plan to keep it for many more years. I will probably look to buy a wagon or hatchback next time we buy a car. I am bummed that our exact make and model has ceased production now (VW only makes Jetta Wagons now), so I will also consider the Subaru wagons. We test drove the outback and we enjoyed it just as much as the one we purchased.

While it may be hard to change your mind on which car you like the best, it worth asking yourself WHY you prefer what you do. Is it practical? Do you like this car because it looks nice? Is it more fuel efficient? These are all important questions to ask before buying your next car. Understanding the motivation for buying something is essential to change your spending habits and ultimately become more responsible with your money.

Diversification ' Why and How to Do It

Diversification is a key part of the investment process. You can diversify within a particular asset class, and also diversify between asset classes.

Stocks and bonds are both asset classes.

' To diversify between asset classes would be to put 70% of your investment in stocks, and 30% in bonds.

' To diversify within asset classes would be to divide the 70% of your portfolio allocated to stocks within many different stocks. Likewise, investing your 30% bond allocation into different bonds gives you diversification within the bond asset class.

Two Purposes of Diversification

There are two reasons to diversify:

1. Reduce risk of total loss ' Diversification helps you eliminate the risk of total loss. Investing in a single stock opens you to systemic risk in that the failure of one business would lead to a total loss of capital. Diversification within asset classes reduces the risk of total loss.

2. Reduce volatility ' Having a balanced and diversified portfolio can reduce volatility. Stocks tend to be more volatile, having higher highs and lower lows. Bonds tend to be much more tempered, moving up and down to a much smaller degree than stocks. Diversification between asset classes reduces volatility.

Diversification for the Individual Stock Investor

I like to moderate my portfolio with some diversification. By holding only a few stocks, I run the risk of systemic risks to my portfolio. For example, if I had invested all of my money into BP before the disaster in the Gulf of Mexico, I would have lost a tremendous amount of money. Oil companies were a good investment in 2010; BP as an individual stock was not.

Unfortunately, these kinds of happenings are difficult to predict. Arguably, you could say that BP has come into trouble for lax safety standards before, and thus BP wasn't a good investment. Looking back, it's easy to say. Looking forward, this kind of clarity isn't easy to see.

It's a good idea to balance your portfolio between companies with an emphasis on never exposing yourself to:

1. Cyclicality risk ' Automakers and commodity producers are very cyclical in that their profits rise greater than economic growth in good years, and fall faster in bad years. Conversely, dollar stores tend to be counter-cyclical in that they see rising profits in recessions when people cut back to save money.

2. Commodity risk ' Rising oil prices are great for oil producers, and terrible for airlines. Some companies are better at passing on higher commodity prices than others. As a rule of thumb, luxury and differentiated good makers like Coach can pass on higher leather and fabric prices than a company like Nike, which sells to a market that is more sensitive to price increases. Similarly, Starbucks finds it easier to pass on higher coffee prices than does Kraft's Maxwell House brand.

3. Systemic risk ' The only way to avoid systemic risk is to hold more than a few stocks in your portfolio. Seemingly random out of the blue events have taken down plenty of otherwise quality companies.

4. Regulatory risk ' The extent to which you avoid heavily regulated industries depends on your own perspective. Investors have happily invested in for-profit education companies, despite the risk that their business is destroyed by an end to federal loan financing. It's a difficult risk to truly measure ' and unless you're intimately familiar with regulatory history, one best avoided.

When you think about diversification for your portfolio, think about how you can pair two businesses together. If you own a pizza restaurant company, then you might look for an agricultural stock that you like to balance the effect of rising food prices.

Likewise, if you own a highly-cyclical stock like an airline or automaker, you might want to balance it with a consumer staples stock to temper total volatility.

Also consider the type of stocks you own. Boring value stocks are going to get left behind in rising markets, whereas growth stocks rise fastest in 'risk-on' environments. Similarly, dividend stocks are usually less volatile whereas stocks that have no dividend policy are more volatile.

Diversification for Fund Investors

Investors who invest in broad market indexes still have a lot to work with when it comes to diversification.

Modern portfolio theory suggests that the safest returns relative to volatility come with a portfolio that is roughly 95% fixed income (bonds) and 5% equities (stocks). Conversely, the highest returns relative to volatility come with a portfolio that is 95% equities and 5% fixed income.

Most people will need some kind of middle ground. Here's the data for historical returns from 1926-2011 using different allocations of stocks and bonds:

100% stocks ' By far the most volatile, this allocation provided returns of 9.9% annually and had 25 years of negative performance.

80% stocks, 20% bonds ' This portfolio was much less volatile than 100% stocks and had fewer negative years (23 of 86), but gave lower performance ' 9.4% per year.

60% stocks, 40% bonds ' Historically, investors with this allocation managed 8.6% annual returns with only 21 down years.

40% stocks, 60% bonds ' With only 16 down years and an average annual return, investors managed a very good 7.8% return over the long haul.

20% stocks, 80% bonds ' A very conservative portfolio, this portfolio had the fewest down years (12) and a very good average return of 6.7%.

100% bonds ' This portfolio had more down years than the 80/20 portfolio with 13 negative years out of 86, and returns were also muted to 5.6% annually.

The focus here should be the relationship between total returns with differing asset allocations. In your early saving years, a stronger allocation to stocks will give you much better returns with volatility that young savers can tolerate. An 80/20 mix of stocks and bonds would be very good for most 20-somethings, and it has historically rewarded savers with 9.4% per year.

Nearing retirement, the balance should shift toward fixed-income investments, as investors will undoubtedly have some drawdown from their portfolios as inflation and principal withdrawals affect portfolio performance. Pending that you have properly prepared, a retirement portfolio of 80% stocks and 20% bonds fits well for most retirees.

This was another post written by JT from MoneyMamba in the investing series that I am running.

Holiday Planning ' Teaching Responsibility or Encouraging Spending?

Like any other normal person, I enjoy reading several websites. As a personal finance author, I like to stay up-to-date on the latest and greatest conversations happening on other finance blogs. It was just last week that I noticed a popular topic trending. While it's not uncommon for the same topic to be discussed across several blogs, this time it caught me off guard because of the topic itself: preparing for the Holidays.

People are already talking about getting ready for the Holidays? What's wrong with these people?

It's only the end of September and people are already planning their spending for Christmas. While I am a huge fan of planning for expenses ahead of time, I feel like this might be happening for the wrong reasons. It's almost as bad as hearing about a friend's neighbor already decorating for Halloween. While it encourages people to plan for the future, it encourages excessive consumerism. (Didn't everyone read my piece on young adults and consumerism?)

Wish List Mentality ' Enabling Thoughtless Spending

As I've shared before, I didn't have a lot of extra money. Our budget was tight and we used to barely make ends meet. It was just as bad in college, like many of you probably experienced as well. I rarely spent money on things that I didn't need (side note: is it just me, or does it seem easier to budget when you don't have extra money?). But, I wasn't immune to the various marketing campaigns. We all see advertisements as they are everywhere. Since I couldn't afford to buy anything, I found another way to give in to marketers. I created a wish list.

I thought creating a wish list would make things easier. I would know what I would be saving money because I would be aware of deals when I saw them. You know how it happens'

You instantly get inspired to try a new hobby. You realize that in order to do this or that, you 'have' to have a new product. This means a major expense. You go to the store or check an online retailer and before you know it, you are checking out with the item to start your new hobby. It's only days later that you realize that you bought that item at retail price when it was on sale elsewhere.

I thought I could avoid all of this by having a wish list. By paying close attention to the things that I wanted to buy when I somehow acquired more money, I would be aware of the best price and save me money.

What I failed to realize is that I was only encouraging myself to spend more money. By keeping a wish list, I never saved extra money nor did I put it towards retirement. Instead, extra money was thrown towards the things I had been drooling over for the previous months.

Thinking about the Holidays in September encourages the same time of spending. Instead of encouraging responsibility, talking about the best Christmas gifts or planning your Black Friday 2012 schedule is a little extreme. I'm not saying that it's impossible for responsible themes to be communicated or expressed. That's not it at all.

What I'm trying to communicate is that financial planning, even with the best intentions, can be a distraction for people who struggle with controlling their spending. It can convince consumers that by planning out their spending months in advance they are being responsible, when in reality it is encouraging an addiction.

Readers, what do you think? Is it okay to talk about the Holidays in September? 

Financial Articles for Young Adults ' Career, Saving, and Young Money

Welcome to the thirty first edition of the Financial Carnival for Young Adults. My purpose with this carnival is to create an easy-to-find place for information about finances for young adults. The carnival is hosted here at 20's Finances almost week and features the most recent articles from around the web. While last week we talked about family finances, this week's topics include career, money for young people, and saving. That's right ' a bit random this week, but there were too many great articles to ignore.  If you want to learn more about these topics from some of the best personal finance bloggers, continue on.

Career:

krantcents @ KrantCents writes Are Temp Jobs the New Career Track? ' Over 40% more people hold temp jobs now than in 2009! I recently read an article called Careers Are Dead which says the labor market has changed to temporary or contract work.

Crystal @ Budgeting in the Fun Stuff writes How I Helped my Mother Stop Working Overtime with 15 minutes of Planning - I feel relieved. It might not have been the most dramatic of breakthroughs, or even the most sophisticated applications of all the financial planning strategies

Money for Young People:

Ted Jenkin @ Your Smart Money Moves writes The Best Ways to Save for College ' When it comes to saving for college, there is a ton of information out there.

Robert @ The College Investor writes What's Your Five Year Plan? - In five years, my life will be very different than it is today. And that's good ' that's all a part of growing up.

Aloysa @ My Broken Coin writes What I Wish I Knew About Life and Finances In My 20s - If we could turn back time, I wish I could go back to when I was 20 and do it again! Read my thoughts!

Gen Y Finance Journey @ Gen Y Finance Journey writes Six Things I Hope I Know in My 30's - A spin on the popular 'Things I Wish I Knew in My 20's' post. A look ahead to some challenges I know I'm going to face in my next decade.

Saving Money:

Suba @ Broke Professionals writes The Psychology of Saving ' The Psychology of Saving is a post from: Broke Professionals if you enjoy it, please visit us and subscribe to the Feed. Saving is hard, especially when you don't have much discretionary income. Saving over years and years is harder still. People do get saver's fatigue.

Jen @ Master the Art of Saving writes Don't Be Fooled By 'No Spend Days' - Are you fooling yourself into thinking that your no spend days are actually improving your finances? You might be. All over the internet, people are'''.

Wayne @ Young Family Finance writes How to Teach Children About Money ' Find out how you can teach you kids about money. While it will vary by family, there are a few basics that every parents must do.

L Bee @ L Bee and the Money Tree writes Five Most Common Money Nightmares ' In the latest issue of Self magazine they have a piece entitled 'Money Nightmares' based on a poll they conducted with their readers. In fact, these money nightmares 'regularly' keep up to 69% of the women polled up at night. See the five most common 'Money Nightmares' detailed in the article below.

Jeremy @ Modest Money writes 7 Considerations for Buying A Cheap Car - The thought of buying some freedom with a cheap car can be quite tempting. Do not let that emotion cloud your judgement and result in buying a vehicle that costs too much to keep on the road.

Miss T. @ Prairie Eco Thrifter writes Cutting Costs and Buying Used Clothes ' You can defray some of your clothing costs by shopping for deals at used clothing stores or thrift stores. Even if you do not have any growing children, buying clothing at thrift stores is a great way to cut costs.

How to Fire Your Boss

Bad bosses ' we've all had them before. There are many things that are bearable in the workplace and I have to say that working for a boss that cannot manage people or is incapable of performing their job (or doing it well), is not one of those things. It's difficult to put up with ' not only because this is the person you interact with frequently, but because you can't do anything about it. You can't fire your boss. If you could, almost every workplace would have mutiny on their hands. Employees would fire their bosses for the selfish reasons of advancing their own careers.

We all know it sounds crazy to fire your boss, but what if it were really possible? Would you be interested in firing your boss? While I have had some horrible supervisors, I am happy to say I enjoy working with my current supervisor. That isn't true for all of my friends however. In fact, I was just talking to someone close to me and they shared with me one of the most interesting stories I have ever heard. She told me how she got her boss fired. I thought I'd integrate her story into this post so that I can help all of you with horrible supervisors.

Why People Get Fired from Their Jobs

As the person close to me was relating her story of her bad supervisor, one of the things she had to learn along the way was why people get fired. When she set out on this mission to be free of her direct supervisor, she knew she had to get a better understanding of her options. She had a couple conversations with HR as well as other influential people that she knew. Someone gave her great advice on why people get fired from their jobs. It seemed to make sense, so I thought I'd share in case many of you are wondering. If you are looking to get your supervisor fired, you have to prove one of the following:

1. Employee is incapable of fulfilling their job requirements - If you can't meet the requirements of the job, odds are that you are not going to last. You would think this is common knowledge, but I have known many people to do just enough to pretend to know what they are doing.
2. Employee is a disruption to the workplace - No one likes a disruption. When employers hire new employees, one of the major qualities that they consider is the ability to mesh with the other employees. If someone is socially disruptive or has potential to cause major problems, the employer is likely to distance themselves from that candidate. Unfortunately, no interview process is perfect and some sneak through.

These two reasons for firing someone are just broad categories. Obviously there are many reasons that people get fired, but they will often fall into one of these larger categories. They are important to consider, however, because it points out that you can't just fire any boss. As much as I would like to say that you can fire anyone if you work hard enough, this simply isn't the case. What I am talking about is firing incompetent supervisors, who too often continue on without any negative repercussions. Too many jokes have been made and too many careers ruined as a result of bad management. It's time to take action.

Why My Friend Set Out to Fire Her Boss

As I was talking to my friend about her situation, she started to describe her boss. Her supervisor was hired after she was already working there. This meant that she was part of the team who brought him up to speed. She related how she liked him to start out, but that's because he knew his way with words. He was a smooth talker and could talk his way through anything. As it turns out, that's all he was ' just words.

Over the next 6 months, she found herself covering for her boss. Her boss failed to accomplish any work and soon made a career (literally and figuratively) out of taking credit for all of her work. While I could elaborate on the horror stories that she related to me as they unfolded, suffice it to say that she finally had enough. It had to end somewhere. Whether that meant her leaving or him.

If you also have a boss that is incompetent or unable to fulfill his/her job requirements, then you may be curious how she got her boss fired. Here's how she did it.

Steps to Get Your Boss Fired

While there is never a full-proof plan to get your boss fired, here are several steps that you can take to improve your chances:

• Keep Record of Everything - When it became evident that she no longer wanted to work with him, she started to keep track of the incidents with him. This was primarily for the sake of protecting herself. She knew that because he had kept his job for this long without doing anything substantive, it would be possible for him to get her fired if she didn't protect herself. As time moved on, she realized that this list might help get him fired.
• Communicate with Boss' Superiors - She also started communicating with the two people above her boss. This happened naturally at first as she was close friends with one of them, but as time developed she realized how important it was for her to build this relationship. Communicating with her boss' superiors was not only a way to tell her side of the story, but also claim credit for her own work.
• Let Him/Her Fail - At first when the boss started to miss a few steps, the person close to me covered for him. She didn't want it looking bad on her, so she put in the extra effort. Despite the fact that he was making significantly more and the roles should have been reversed, she hated the idea of her department failing to meet their goals. Yet, she soon realized that everyone loved her boss because everything was getting done. The only problem? She was doing all the work and he was taking credit. She soon learned that she had to let him fail. She didn't do anything to sabotage him, but she stopped covering for him.
• Threaten to Leave - While many people would hesitate to tell their employer that they are planning on leaving, my friend had no other choice. She couldn't take it anymore. She couldn't stand to work with him with any longer. She started to apply for other jobs because it has been almost an entire year without any sign that he was actually getting fired. She eventually let it be known that she was applying for other jobs. There's nothing more motivating than the fear of a beloved employee threatening to leave.
• Don't Give Up Hope - Last, but certainly not least, don't give up hope. My friend, throughout the entire process, related her desire to give up. She began to doubt herself and whether anyone above her actually knew how bad of an employee her supervisor was. Yet, she persevered. She stuck it out, despite seeing no signs that he was on his way out.

A little over a year after her supervisor was hired, he was officially let go. It took a long time, but he was successfully pushed out. While it is hard to say what the driving force in him getting fired, it is just proof that no one is untouchable. If you are working for someone who is truly incompetent, it is possible to improve the situation. Just because they are your boss, doesn't mean that they are untouchable. Everyone is responsible for their own job responsibilities and if you are diligent to expose what is really happening (or lack there of), it will catch up with them.

Have you ever had an incompetent manager? Did you live with it or did you take action to get them fired?

Young Adults and Consumerism

While it may not surprise you, one of the many financial challenges that young adults face is the desire for stuff. It's also known as consumerism, which accurately describes this addiction because it describes the existence of young adults. They live to consume. Many young adults either buy things that they want regardless of the financial consequences or at the very least (like myself) have a wish list of things they want to buy when they have money. If we are honest with ourselves, we all like to have nice things ' it's just a matter of controlling our urges.

Despite creating a fun budget a few months back, my wife and I have been pretty diligent about only buying things that we need. Sure, some things were not necessary, but they greatly improved our lifestyle (like a dishwasher). While I don't think young adults should go cold turkey with spending money on entertainment or stuff, there still is progress to be made. While I don't have statistical information to prove that people struggle with buying too much stuff, the fact that thrift stores are thriving and more businesses that buy used goods from consumers are growing (like 62 days for example) suggests that my theory is correct.

Why Consumerism is a Problem

Before I get into how to fix this problem, I think it's first important to identify WHY it's a problem. In other words, why does any of this matter. As it turns out, there are several reasons why I think spending too much money on unnecessary items is a problem:

• It Can Keep You From Investing / Planning for Retirement: One of the biggest excuses that people use to avoid planning for retirement is that they are young and retirement is decades away. They fail to realize the positive benefits of saving money now. If you are spending money on unnecessary items just to make yourself feel better, you are stealing from your retirement savings.
• It Can Lead to Lots of Debt - Despite your good intentions to spend less than you earn, it can lead you to rack up a lot of consumer debt. Once in debt, the interest rate and monthly payments (in addition to your other bills) makes it difficult to dig yourself out of. It's hard to believe what people are forced to do to get out of debt. Some people are forced to sell their jewelry or their gold for money as a way to dig themselves out. The best way to protect yourself is stop spending money on useless items.
• Consumerism can be Addicting - Buying the newest gadget or new clothes one time is not a big deal, but when you look at how it changes your lifestyle, you can begin to picture the huge implications for your finances. You aren't just spending a few dollars here and there, but you are raising your future expenses exponentially. Buying unnecessary items when you are young can put you on a course for financial failure. Another way of describing the cyclical changes is a term known as lifestyle inflation. Don't let it happen to you.

Spending that is not regulated or controlled is never a good thing. It not only affects your ability to pay your bills this month, but for many months to come. The first step to avoid or stop doing this is to understand the negative consequences.

How to Avoid Spending Too Much

There are many popularized ways to avoid spending too much, but very few actually work. I've heard stories of people freezing their credit cards or automatically transferring money from your paycheck into savings. While there are many tricks like these that may work for some, they fail to get at the root of the problem. These quick fixes fail to understand that people spend too much not because they didn't know how to trick themselves, but because of other, deeper psychological issues.

Understand the WHY First

The first thing you need to do is identify the reason behind your spending. If you find yourself buying things despite knowing that it's not a healthy thing, start to ask yourself (honestly, if possible) why you are doing it. Here are a few reasons why people spend too much money:

• Childhood Lessons - Some people spend too much money because that is what they grew up knowing. Their parents taught them that any amount of debt is okay and having nice things is more important than being able to pay for it all.
• Boredom - Many people spend too much money because they are bored. They have too much time on their hands. Instead of doing something productive like exercising, hanging out with friends, or helping others, they buy a bigger TV and cable to keep themselves occupied.
• Unhappiness - Another common reason is search for happiness. Many people are dissatisfied with their jobs, so when they get home they feel the need to buy something. Getting new, nice stuff is a nice feeling and whether they realize it or not, by purchasing a few things on Amazon, they have forgotten all about their employment blues.

While I could go on and on, the only way that you are going to reconcile your spending habits is to first understand the negative consequences and that it is a problem worth fixing. Then, try to figure out why you are doing what you are doing. It's not just because you don't know better. Once you figure that out, the third step is to resolve the reason for your spending habits. It most likely won't be a quick fix, but resolving it will bring balance to your life financially and emotionally.

Have you every made significant changes to your spending habits? How did you change them?

 

Direct Purchase Stock Plans

For small investors or those just starting out, there are many discount brokerages and online investing sites to help you get start investing. Before all of these new investing firms popped up, many corporations allowed you to invest in their stock directly through them. In most cases, this was restricted to the larger firms, such as General Electric and AT&T. Surprisingly, many of these direct stock purchase plans still exist today and are a great way for you to invest in small, incremental amounts for little to no cost. And, with the internet, it makes investing in these plans that much easier!

There is one main transfer agent for most of the direct stock purchase plans available. You can visit ComputerShare to see all of the plans they offer. This firm is the largest transfer agent for direct stock purchase plans. You can also check out BNY Mellon as they handle plans as well, just not as many.

How to Get Started

To get started investing, you are going to need a small lump sum of money, usually between $250-$500. From there, you are free to invest any amount you wish, as long as it meets the minimum. This minimum is usually around $50. Most plans also have maximum amounts you can invest annually as well, but the maximum is usually about $100,000.

The great thing about these plans is that you can buy fractional shares, which you cannot do if you invest though most online discount brokers. Additionally, you can elect to re-invest any dividends to buy more shares, also something that many online discount brokers do not allow.

When I first started investing, this was the route I took. I saved up enough money to open an account and buy shares of General Electric. Then, after doing chores around the house for my allowance, I would save the money and use it to buy more shares. It was great to be able to invest in the stock market.

Considerations

Before you go clicking on the ComputerShare or the BNY Mellon link above, there are a few caveats to tell you about. The first is that not all companies use these transfer agents. Just because a company isn't listed here, does not mean they do not offer a direct stock purchase plan. For example, Proctor & Gamble allows you to invest directly with them from their website, so be sure to visit the company website if you don't see them on either of the sites above. You can either search for 'company name + direct stock purchase plan' or go to the investor relations section of their website. Usually the information is found in the FAQs.

The second caveat is to be conscious of fees. Each company determines the fees for their plan and the fees wary widely. For example, Proctor & Gamble has virtually no fees whereas AT&T charges you set up fees, purchase fees, re-investment fees, and sales fees. Basically, it makes it not worth it to invest in the stock this way because all of those fees add up.

My recommendation is to avoid all plans with set up, purchase and re-investment fees. Sales fees are acceptable given that most are capped at a dollar amount that is not restrictive. You will find many companies that only charge a sales fee as well as some that charge no fees at all.

Overall, direct stock purchase plans are a great way for small investors or those just starting out to get into the stock market. It allows you to invest in small amounts and re-invest dividends for little or no cost. If you are looking for a way to start investing, be certain to include these plans into your comparison.

4 Financial Challenges that College Graduates Face

Graduating from college is both an exciting and terrifying moment in every young adult's life. On the one hand, there is the sense of accomplishment. You just EARNED your four year degree. You spent countless hours studying, sitting in classes, taking exams, and finally walking across that stage to get your diploma. Talk about hard work realized. Yet, at the same point, the life that you have known for the past four years is instantaneously gone. No more late night runs with friends to the local fast food place. Adulthood is here to stay. Not only are you forced to say goodbye to many close friends, you are also met with many financial challenges as a college graduate. How you respond to these challenges will often determine your success for years to come. Here are four popular financial challenges that most college graduates must face.

Finding a Place to Live

If you don't plan to live with your parents after graduation (side note: who ever plans on doing this?), then you are often faced with decided where you will live. This decision is often made easier when you have a job or spouse already. For those who have neither, the options are limitless. Some college graduates stay in their college town, working where ever they can, in order to continue the college life. Others return to their home town because that is what is familiar. While these decisions are understandable, why not try something new. You could live overseas for a year or two to gain some new experiences or you could move to a new city.

Obtaining Employment

Finding a job without sufficient experience may be a challenge. As I have covered before, it's not impossible. While the job market is a challenge these days, it's only the beginning. In fact, getting a job is often the starting point of becoming responsible with your finances. USA Today writes about the transition from your first job to your first budget. It's a natural transition. Once you start making more than enough money, you are faced with the question of what to do with it. Do you spend it all away on a new car that you don't need? Or do you start saving for retirement? These types of challenges will change the rest of your life. It will either set you up for success or create spending habits that will be hard to break.

Saving for Retirement

Young adults saving for retirement is often seen as a oxymoron. I tend to believe that this is changing as a result of the financial challenges that people have faced over the past 5 years. Everyone should understand that no sense of financial stability is secure. Many young adults are starting to realize that they need to save for retirement early. But, saving a lot early is only half the battle. The next challenge that college graduates face is figuring where to invest their money and how to best prepare for retirement. These are big questions and very rarely is there an easy answer. It often takes years, if not decades, to find your approach.

Consider Life Insurance

The last major challenge that young adults face is the question of life insurance. This is a challenge that I faced last year when I decided to get whole life insurance. Too many of my friends have ignored this aspect and I fear to think what is going to happen to their spouse if they don't have adequate insurance. I can sympathize with them and why they don't make it a priority. They have very little extra money to spend and have a difficult time saving money in the first place. How are they going to afford an extra payment? Yet, at the same time, I know the cost of not having life insurance. While it may not seem as pressing as the other challenges listed above, life insurance should be considered at the very least.

While graduating from college may present you with many financial challenges all at once, you can overcome them. Be purposeful in conquering each and every one. If you do this, you will set yourself up for prolonged success.

What challenges did you face after graduating from college?

For my readers who didn't attend college, did you face these challenges earlier? How do you think it was different for you?

 

ETFs vs. Individual Stocks

If there is one thing Wall Street gets right, it's giving investors choices. One choice that all investors eventually encounter is how to put their money in the market. There are generally two options for the semi-active investor: ETFs and individual stocks.

What's an ETF?

ETFs are like mutual funds without all of the overhead. When you buy a share of an exchange-traded fund, you own a share of the investment pool the ETF owns. The fund can be indexed to a particular stock index, or actively-managed by an asset manager. For example, the SPY ETF owns all the stocks in the S&P 500 index. Buying SPY is like buying 500 different stocks with one single trade.

When to Use ETFs

Exchange-traded funds are great when an investor wants exposure to a variety of different stocks. Here are a few reasons why you might want to invest in ETFs:

1. Diversification ' ETFs can be great for diversification. An ETF like the Market Vectors Gold Miners ETF (GDX) holds 32 different companies that are all involved in gold mining. The Russell 1000 Index Fund (IWB) holds shares of stock in the 1000 largest publicly-traded companies on the stock market. ETFs can be used to buy diversified positions based on industry, geography, or broad indexes.

2. Access ' ETFs also give investors the option to invest in markets that are otherwise inaccessible on the stock market. The ETFS Physical Platinum Fund (PPLT) allows investors the opportunity to buy platinum on the stock market. The United States Oil Fund (USO) gives investors a proxy to own oil. And hundreds of bond ETFs make it possible to invest in bonds with a stock brokerage account.

3. Low costs ' ETFs charge a small annual expense fee on fund assets. You will also pay commissions to buy and sell an ETF. Many well-known brokerages like TD Ameritrade, Charles Schwab, Fidelity, and others have programs that give investors commission-free ETF trades.

ETFs work best when an investor has some kind of idea about a broad selection of companies. If you think the emerging markets like India will be red hot for growth, you might buy an ETF of Indian stocks. If you think gold prices are going to rise, you might buy a gold miner ETF to capitalize on gold prices.

When it comes to broad ideas that are not company-specific (all gold producers benefit from rising gold prices, and all Indian stocks would do better with better than expected growth in India), an ETF makes the most sense. You don't need to know much about the individual companies in an industry when you use an exchange-traded fund.

ETFs are limited, however. Investors should read the prospectus for an ETF before making an investment. The prospectus defines how the ETF will be managed, how much it costs to hold the ETF each year, and tax information surrounding any dividends or disbursements to investors.

When to Buy Individual Stocks

Investors always have the option to invest in individual stocks. Buying individual stocks makes the most sense when you have company-specific insight that you think will give you a market-beating return.

Individual stocks offer:

1. More upside potential ' When you buy an ETF, you're limited to the average return for a collection of investments. A single stock investment gives you much more upside potential, but also more downside risk. It is very possible for a tech company to go bankrupt, highly unlikely that the whole industry represented in the Technology SPDR ETF (XLK) to go broke at the same time.

2. More room to add value ' Individual stocks provide investors with more opportunity to uncover information not yet priced into the stock. An individual stock investor needs to know about company management, the financials of individual firms, and the company's competitive standing in the marketplace before making an investment.

Individual stocks have their downsides. Individual stocks are much more costly to trade than ETFs. Whereas hundreds of ETFs can be traded for free, you'll encounter a commission for every individual stock you buy and sell. For this reason, individual stocks make a good investment only when you have a significant amount of money to invest. If you pay $10 to buy and sell $1,000 of stock, you're down 2% from the very start. Making up that difference is more difficult than most think, so invest in individual companies only when the commissions make up a very small part of your total investment. A $20 charge to buy and sell stock is much more manageable when you're investing $10,000 instead of $1,000.

This was another post written by JT from MoneyMamba in the investing series that I am running.

Financial Articles for Young Adults ' Family Finances

Welcome to the thirtieth edition of the Financial Carnival for Young Adults. My purpose with this carnival is to create an easy-to-find place for information about finances for young adults. The carnival is hosted here at 20's Finances almost week and features the most recent articles from around the web. While last week we talked about investing, this week's topic includes family finances. That's right ' all things related to money and relationships.  If you want to learn more about these topics from some of the best personal finance bloggers, continue on.

Family Finances:

Jester @ The Ultimate Juggle writes Not Enjoying A Family Vacation By Focusing Too Hard On Money ' I had to work on my spouse so that he would enjoy the family vacations we go on and not focus too hard on money! Perhaps you should do that same'

Wayne @ Young Family Finance writes Self-Employment ' Is it all it's Cracked Up to Be? ' For as long as I can remember, I recall hearing the notorious 'work from home' scams. They seem more popular today, but maybe it is just because I am spending more time on the internet.

YFS @ Your Finances Simplified writes How to Resolve Money-Related Disputes in a Relationship '   Did you know that the average couple spends 250 and 700 hours planning their wedding? This number is INSANE.

Ted Jenkin @ Your Smart Money Moves writes Do You Eat Out Too Much? ' If you've noticed that your disposable income may be sneaking out the back door of your family finances, one of the causes could be between the lunches and

A Blinkin @ Funancials writes This Just In: Stocks Will Rise and The World Won't End ' I bring this up because I see lots of nothing. 'Nothing' is what people do when they are too scared to do 'something.' A nice mixture of uncertainty and pessimism has kept many people from investing. We're in (what some refer to as) a liquidity trap.

Michelle @ Making Sense of Cents writes How to Make Money in College ' Money in college can of course pay for a lot of things. Your tuition, commute (cars, gas, maintenance, etc.), food, drinks, clothes and everything else. Maybe you also want to go on a fun vacation with your friends?

IMB @ Investing Money writes How Much Money to Invest? ' Want to know how much you should invest? Find out how to calculate the amount to invest.

Amanda L Grossman @ Frugal Confessions writes Grow Your Budget's Spending Power ' You may have noticed that I've been focusing on budgeting over the last several weeks: My Advice to the Person Budgeting for the First Time, Mustang Budgeting

JP @ My Family Finances writes Don't Waste Your Money on AAA: Four Options for Free or Low-Cost Roadside Assistance for Your Family ' There are plenty of great, low-cost options for roadside assistance that make the yearly payout on AAA a complete waste of your family's money.

Eddie @ Finance Fox writes Who Wears the Financial Pants In Your Relationship? ' No personal wedding or relationship story to share about who wears the financial pants in my relationship, however I'm curious to know about your relationship, and who wears the financial pants.

Miss T. @ Prairie Eco Thrifter writes DIY Wedding Ideas ' It's exhausting but worth it, and if you have a good wedding party and a helpful group of friends, you can cut your wedding costs by doing some things yourself. Here's what we've made so far:

Emily @ Evolving Personal Finance writes What Happens When a Spendthrift Marries a Tightwad? ' I share the results of a paper concerning marital outcomes when spouses are on opposite ends of the tightwad-spendthrift scale. Do you believe in complementarity?

Robert @ Entrepreneurship & Life writes Top Reasons People Quit and How to Prevent It ' If you're a manager or run a business, hiring great talent is essential to your success. Having a great employee is a godsend, and you want to make sure that you do everything in your power to keep them on board. As such, here are the top reasons people quit and what you can do as a leader or business owner to prevent it!

Invest In Yourself

This week has been one of the busiest weeks for the entire year. Not only did I attend a Financial Blogger Conference, but I returned to a hectic environment. I feel like I have been going non-stop for the past week with very few breaks. If that were not bad enough, I spent hundreds of dollars over the past week in order to do this to myself. That's right ' I CAUSED this.

And yet, I wouldn't change it for the world.

While it's important for young adults to prioritize saving and get control of their money, it's equally important to focus on developing their skills. This is one of the few ways that they can get ahead. This isn't to deny the natural advantages that young adults have in the work place. But, as this world changes quickly with the advance of technology (among other things), it's important to change with it.

I have been focusing lately on investing, partly because young adults don't know enough about it. While I still have many posts in the queue for this series, it would be a disservice to ignore one very important aspect of investing: investing in yourself. Taking the time to develop valuable skills that will help other people is important not only for career advancement (and thereby financial stability), but for a more enjoyable life.

Why Spend Hundreds on a Blogging Conference?

For those who don't know me or don't stalk me on facebook or twitter, this past weekend I traveled to Denver for my first blogging conference. Many people hear this and wonder why I would spend money going to a BLOGGING conference. After all, blogging is simple, right? Sadly, this is what people think blogging is: You experience something and write about it, hit publish and you're done. I wish it were that simple. There is so much more involved in just the writing aspect of blogging. There is planning out topics. Finding keywords so that Google likes what you write and sends people to you. Then, organizing your thoughts or breaking down topics into focused ideas or post topics. Then, there is the actual writing, which takes time if you are going to do it correctly. This includes coming up with titles, subtitles, finding pictures, and making the post interesting. You have to get your readers interested. Then, there is the editing process. Did you misspell a word or two? Did you jump around too much? After that, you have to schedule the post. Different times of day, month, and year will affect who it is received and how popular it is. I could go on and on, and this is JUST THE WRITING PART of blogging. There is also the monetization, marketing, responding to emails and much more.

The reality is that blogging is complicated. While I have seen some moderate success, it is marginal to what is available. By attending this conference, I was being intentional to continue to grow as a blogger. I didn't know what or how much I would get out of attending the conference before attending, but I was pleasantly surprised. I have already written out my 4 step plan (which actually has many more steps within these big foci). The simple fact is that I got so much out of investing in myself and you can too.

How to Invest In Yourself

This idea of investing in yourself applies to more situations than just a blogging conference. While this was my situation, yours is almost certainly different. Everyone needs to understand and apply this principle to their lives in different ways. Here's how you can invest in yourself, regardless of your situation.

1. Find What is Meaningful to You or Your Passion - Many people go through life without figuring out what they care about the most. Many young adults realize that they won't be a professional athlete or obtain their dream job and give up entirely. A better alternative is to find out what you care about and pursue it.
2. Connect with Someone Who is Already Doing What You are Doing - A great way to figure out how to pursue your dreams is to find someone wearing the shoes you want to fill. While I guess it is possible that you have an original idea, most likely there is already someone doing what you are doing. Once you find that person, get to know them. Offer to help them in exchange for information on how to get there.
3. Test the Waters - One of the first things you need to do is determine if this route is going to work for you. Are there major flaws that are going to prevent you from succeeding? Or can you be successful in this path. The last thing you want to do is jump in the deep in without realizing that you are physically unable to swim. Find out if you COULD be successful.
4. Obtain the Essentials - The next thing that you need to do is to get the necessary equipment. If you want to be a business person, you will need clothes to dress the part. If you want to be a freelance photographer, you are going to need a camera. This will depend on your distinct path, but find out what it is and get it. You don't have to go all out, but having some nice things can serve as motivation to get yourself going. The last thing you want is to keep yourself from pursuing your dream because you didn't have the essentials to follow through.
5. Develop Skills - Last, but certainly not least, you need to develop skills. If you think you are going to be successful on day one, you are grossly mistaken. You need to develop the skills necessary. This may mean trial and error, but it may also mean night school or an unpaid internship. If you are really passionate about it, you won't let the hard work keep you from your goal.

What You Can Expect From Investing In Yourself

If you are considering investing in yourself, you may need to understand the benefits of it before you take the plunge. Here are some of the benefits of investing in yourself. You never know where the path may lead you, but here are some general ideas of what to expect.

You Never Know what the Path Will Bring You To' Until You TRY (yes, I just came up with that'I think)

Increase in Skills - Whenever you are investing in yourself, you will extend your abilities. The skills you learn and the ability to help others may surprise you. You never know how far you can go or the depth of your reach until you give it a shot.

Increase in Compensation- Another natural result of investing in yourself is an increase in pay. Whether you are an employee for a company or your own boss, the more you invest in yourself, the higher your compensation will be. This isn't a perfect correlation and it won't ALWAYS work out, but as a general rule, the more valuable or talented the employee, the higher the compensation.

Increase in Happiness - Following your passion and making it work will often (not always) increase you happiness. There is the possibility of adding too much stress and therefore decreasing your happiness, but if you are doing what you care about, odds are you will be happier for it.

Meet Lots of Interesting People - Another thing that I realized this weekend is that by following your dreams and working hard to do it, you will run in to a lot of people doing something similar. The people you meet while working to refine your skills are going to be people that are doing something interesting. These aren't the people who are sitting at home watching TV. These are the people who are doing something with their lives. I don't know about you, but these are the people I would rather hang out with.

If you are thinking about investing in yourself, stop thinking and just do it. You may make mistakes along the way, but it will be a much more enjoyable and interesting life. If I had to guess, I'd say you won't regret it.

Earnings by Degree Received

 

Looking at the chart above, you may come to one conclusion: that it is best to get an advanced degree. After all, the average annual earnings for those with an advanced degree is $87,000. Compared to someone with just a bachelor's degree, the difference in annual earnings is over $30,000 per year. As was shown in a previous post, that difference is significant when you factor time into the equation. The question though, is getting the advanced degree even worth it?

Let me start off by saying that I am all for getting as much of an education as you can. I personally have both a bachelor's and a master's degree. But before you decide to go to college or graduate school, you should know a few things first. These things include the employment prospects of what you plan on majoring in and what you can expect to earn both starting out and once you are tenured.

This leads us back to the chart above. Look again at the advanced degree earnings of $87,000. You might come to the conclusion that once you get the degree, you'll be making that amount of money. In most cases, you won't. The number in the chart is for those aged 25 and older, so it takes into account those who just earned their advanced degrees as well as those who have been working for 10, 15, even 20 years. This skews the numbers.

Case in point: As I said, I have my master's degree and do not earn what these findings show. Granted I am only one year removed from earning my degree, so I have time to increase my pay. I didn't get my degree and think that I would be earning close to six figures per year. I knew that it would take time to increase my earnings.

When thinking about your career, you need to understand the pay scale for it. If earnings for the job are on the lower end, you need to be conscious of the debt you go into while in school. We have heard of the horror stories in the news about recent grads that have $100,000 in debt and are working at Burger King because they cannot find a job. While there are many in this situation, it is more the exception than the norm.

Since the average student graduates college with $24,000 in debt, I would say that going to college is a good investment. Even when factoring in the amount of money paid to attend (on top of the student loan debt) and the lost wages while attending. Over the long run, it makes sense to continue your education after high school.

But the argument depends on what degree you are going to receive and what type of job you plan on working. If you are planning on majoring in a field of study that sees the average worker earning $30,000 per year, going into large amounts of debt for the degree probably isn't worth it.

The point is to understand how the average earnings are determined for your career with a certain degree. If it's an average, remember: you may make more or you may make less. You have to weigh all factors beforehand so that you aren't stuck behind the eight-ball when all is said and done.

Best Social Moments from the Financial Blogger Conference

This past weekend I spent the entire weekend with a group of other personal finance bloggers. Those who attended know it as FinCon or maybe by its hashtag #fincon12.  For those who didn't attend or don't know what it is, it is a annual event where the personal finance bloggers get together and discuss ways to improve their blogs. Believe it or not, those who are familiar with twitter, the hashtag #fincon12 was trending on twitter. I spent the money to attend mainly because I wanted to meet a lot of people who I would consider friends now, but I also wanted to learn more ways to build up my blog.

While I am somewhat of an introvert, those who talked to me the most probably discovered that I can really open up as I get to know you. I started writing this post after the first day and have now completed it. (You'll see some updates or edits throughout the post) This post is just the social moments from the conference. I have made a list of 7-8 things that I plan to do differently going forward and I plan to share them soon.

Worst Question Asked by Me: After meeting J.D. from Get Rich Slowly (for those who don't know him, he is one of the most successful personal finance bloggers) and hearing some of his upcoming plans, I asked what any blogger would ask' or at least I thought so. Here's my question: 'If you were starting a blog over again, is there anything you would do differently?' At the time it seemed like a worthwhile question as everyone learns something along the way. I know that I have learned a number of things. What I failed to consider was that he built one of the most successful personal finance blogs known to exist so far. Who in their right mind would change anything! If you are wondering what he said, it was a simple, 'no.'

Edit #1 - During the conference I realized that I was not impressed by J.D.'s response. (J.D., if you ever read this, It's nothing personal) Here's why. After listening to Ramit Sethi, who is a famous entrepreneur, and hearing that he made a lot of mistakes along the way, it makes me think that there have to be certain things that he has learned or going to do differently. Edit #2 - As it turns out, J.D. was asked almost the exact same question and gave a response. So, that just tells me that it was either the way I phrased the question or the setting that made him answer that way. Don't get me wrong, J.D. is a very down-to-earth guy, but I thought it was worth mentioning.

Most Memorable First Impression: One of my favorite interactions was with Michelle from See Debt Run. She was not only nice, but was expecting me to be a blond. She told me that 'I write like a blond.' I'm still not sure what that means, but it stuck out in my mind. (Does anyone else think I write 'like a blond'?) It was only minutes later that Michelle was talking to J.D. like they were childhood friends and convincing him to visit her site. Kudos to you Michelle!

Best Insult: While EVERYONE at the conference was nice, there are always some people you can joke around with more than others. Eric from Dollarversity was one of those guys. He was very chill and would have challenged me to climb a huge pile of dirt had we consumed a few more drinks. After hanging out a few times, he realized that I almost always had my bag with me. While I'm not sure he used these words, 'man purse' was definitely the implication. Apparently he didn't understand that I don't have a smart phone and my ipad was just too big to carry around in my pocket. haha

Lack of Awkwardness: I may be the only person who was thinking about this before meeting everyone, but I couldn't help but wonder, 'What if they are all weirdos?' While I felt like I knew a lot of people with whom I have exchanged emails, you never REALLY KNOW someone until you have met them face to face. I found out quickly that my concern for awkwardness or meeting people that I wasn't expected was completely absurd. Everyone was really nice.

Meeting Lots of Friends: Last but certainly not least, it was great to hang out with friends. Here are just a few that stick out:

• Don from Money Reasons - He was my roomie and even though I didn't see him most of the week, was a lot of fun getting to know him and meeting him.
• Jon from Free Money Wisdom - A person who I admire because he convinced his wife to tag along. Maybe next year Mrs. 20's will come along. (Probably not though). Like someone else has already said, Jon looks nothing like his avatar picture. It's time to update that one, Jon.
• Latisha from Young Adult Finances - The person I probably talked to the most at the conference. Little did she know, I was just trying to learn her secrets of success so I can out-compete her. Just kidding. HAHA.
• Joe from Retire by 40 - Joe is one of the nicest guys you can meet. He's also a lot shorter than I imagined, (side note: Isn't it interesting how we visualize people before we meet them?) but that doesn't distract from his relate-able demeanor.
• Sam from Financial Samurai - It was nice meeting Sam. He's more of a mysterious person online than others, but very down-to-earth in person. We talked about a lot of things in a short period of time together. He even tried to convince me to stay in my day job for 10 more years. We'll see how that works out.
• Crystal from Budgeting in the Fun Stuff - I was only able to spend a short period of time with Crystal, but it was easy to see that she didn't let anyone convince her to be anyone different than who she is. Yes, it was those conversations about the nerdy card games that I didn't understand.
• Jeff Rose from Good Financial Cents - Jeff is a very cool guy. He's one of those guys that attracts a lot of attention. I'm not sure if it's his good dance moves (which I saw a little of), his good looks, or natural charisma. Either way ' a stand-up guy!
• Tushar from Everything Finance - Tushar is a very successful blogger and has years more of experience. He let me pick his brain a little bit and was another close companion at many of the social events.

How to Pick a Stock

The hardest part about investing in individual stocks is the research. Companies and their financial records can be incredibly complex ' Johnson & Johnson, for example, has more than 250 subsidiary companies under its well-known brand name.

So how should an investor start their research? This is an incredibly important question for young adults to figure out as it can make a huge difference in their returns.

Picking a Stock is NOT like wearing a blindfold and swinging to win big!

Evaluating the Business

I like to start first with the softer side of finance: the business. You have to get a firm grasp of what the company does from day to day.

The perfect starting point is a company's annual report. You can find an annual report on the company's investor relations tab on its website. Larger companies also distribute printed annual reports for free through http://www.annualreports.com/

I stress starting with the annual report because it is where companies show off. Sure, there is plenty of financial information to be found in an annual report. But annual reports often show the softer side of the business complete with pictures of the company's products, short and sweet future business plans, and even awards and recognitions the company received in the past year.

Publicly-traded companies are often involved in more businesses than you might think. Without an interest in finance, you might think General Electric just makes light bulbs and wind turbines. However, after looking through the company's annual report, it becomes clear that GE is really just a bank that happens to make industrial products 'for fun.'

So, in short, you have to actually know what the company does before you do anything else. You might be surprised to learn how complicated seemingly simple businesses really are.

Learn from the Pros

If you are new to individual stock investing, you can learn plenty by listening to what other people want to know about a company. I like to attend a company's conference calls where analysts ask executives in-depth questions about a business.

If you cannot listen live, conference calls should be recorded and available on the investor relations section of a company's website. Alternatively, SeekingAlpha has transcripts of conference calls for all large publicly-traded companies that you can read on your own time.

Focus on what the analysts want to know. There is always a good reason behind each question. If an analyst wants to know about a company's debt level, it should be a sign that you should take a second look at the company's debt in your analysis, for example.

Getting to the Numbers

Eventually, you have to get the nitty-gritty of breaking through a company's financials. Here are a few key numbers to focus on:

1. Price-to-earnings ratios ' How expensive is the company's future earnings? A PE ratio is the price of a share of stock divided by its future earnings. A low PE is more favorable to a high PE. Realize that earnings can vary wildly from year to year. An average of the last 5 years earnings would give you a more realistic PE ratio than a single year.

2. Price to book ratio ' How expensive is the company relative to its book value? A book value is to a business what 'net worth' is to a person. A low book value may be a sign that the company is selling at a big discount, especially if it also sports a low PE ratio.

3. Return on assets ' How much can a company generate in earnings for each $1 it uses to run its business? A high return on assets is indicative of a very productive company. A higher return on assets means the company will use less of its earnings on investments (factories, new storefronts, etc.) to grow a business.

4. Total share count ' How well is the executive team managing the company for shareholders? In an ideal world, share count would not rise faster than earnings.

5. Earnings growth ' How quickly is the company growing its earnings over 5-10 years? Is this growth sustainable? For example, Apple quadrupled its earnings over the course of 3 years from 2008-2011 from sales of iPhones and iPads. Is there really room in this world for Apple to sell 3 times more iPhones and iPads in 2014 than in 2011?

Attack Whole Industries at a Time

A great place to start is with companies and industries that you can understand. Everyone can understand the pizza franchising business. Here are some of the companies in that industry:

Pizza Hut owned by YUM! Brands (YUM)
Papa John's (PZZA)
Papa Murphy's (Privately owned)
Domino's (DPZ)
Noble Roman's (NROM)

Just off the top of my head, here are some questions that need to be answered before you invest:

' How do these companies make money? What percentage of their earnings comes from company-owned stores vs. franchises?

' Why would a franchisee pick one of the brands above? (How much does the average store earn? How much does it cost to start a pizza franchise from any given brand? Is Papa John's franchising agreement noticeably different from competitors?)

' Why do customers favor a particular store? My grandpa likes take-n-bake pizza because he can't eat a whole pizza at one time. Is this common? Will demographics favor one company over another?

' How big could one of the above companies become? (Noble Roman's is a $14 million business. It could grow 88x over if it replaced Papa John's. Can it do that? Can Papa John's, which has thousands of locations, grow much larger? Where?)

' Can any of these companies raise prices in the future? Every pizza chain is running specials due to the recession, but if the economy improves, maybe they could manage to add $1 to the price of each pizza sold. Could this be a catalyst for heftier stock valuations?

' Frozen pizzas have become a big business, and their quality is improving over time. Do these pose a threat to the traditional pizza shop model?

You can read financial reports all day long and never answer any of the questions above. Investors have to go deeper to find information that the market overlooks or underappreciates. As you start looking through new investments, keep a detailed log of research and intriguing information you find about a business or industry ' you may want to reference it later.

Knowledge Builds on Itself

The best part about investing is that knowledge and research compounds faster than your money. What you learn about one industry can help you in others. The factors that affect pizza chains aren't all that much different from the burger business (Wendy's and McDonald's.) Wendy's (WEN) and McDonald's (MCD) aren't all that different from 'fast casual' restaurants like Chipotle (CMG) or Panera Bread (PNRA).

Health insurance companies will lead you to an understanding of health care delivery. Health care delivery will help you discover which medical products would make winning investments. The list goes on and on.

The most important point is that finance is not all about numbers. Investing does not require a tremendous amount of mathematical prowess. What it does require is a firm understanding of a business. Getting involved in business analysis early allows you to build a knowledge bank of information that you will carry with you your whole life ' information you can use to find many more good investments in the future.

This was another post written by JT from MoneyMamba in the investing series that I am running.

Financial Carnival for Young Adults- 29th Edition

Welcome to the twenty-ninth edition of the Financial Carnival for Young Adults. My purpose with this carnival is to create an easy-to-find place for information about finances for young adults. The carnival is hosted here at 20's Finances almost week and features the most recent articles from around the web. While last week we talked about investing and home ownership, this week's topic includes investing.  If you want to learn more about these topics from some of the best personal finance bloggers, continue on.

CAPI @ Creating a Passive Income writes A Real-Life Story of Passive Income ' Have you ever thought about how people are generating passive income? Is it all just a hoax or are there actually people sitting on the beach

Hank @ Money Q&A writes Are You Ready to Invest in a Rental Property? ' Invest in a rental property can be an excellent investment, you need to make sure that you enter into it with both eyes open and a clear idea of what could go wrong.

Kanwal @ Simply Investing writes When It Comes to Investing, Should You Ignore the Media? ' Should you ignore the media? By media I mean television, radio, magazines, newspapers and internet news, and financial analysts. When it comes to investing your hard earned money, the answer is 'yes'! If you want to invest successfully you need to learn to ignore the media, there is just too much noise out there.

A Blinkin @ Funancials writes My Sincerest Apologies To Mark Zuckerberg ' I've been kinda hard on Facebook recently and most of it has been unwarranted. Facebook has lost about half of it's value since it's IPO earlier this year, but who's fault is that? The people that have been most affected by (and responsible for) this drop have no affiliation with the company.

TRL @ The Retired Landlord writes Biggest Mistake in Real Estate Investing ' Do you want to avoid the most common mistake in real estate investing? Find out what it is so you can stay clear.

Luke @ Learn Bonds writes Interest Rates Have Moved Higher: What That Means for Bond Investors ' A look at how a large move higher in interest rates has affected bond investors in some of the major segments of the bond market.

Tushar @ Start Investing Money writes How to Buy Private Stock ' Most people are aware that it's possible to buy stock in various companies with the hope of it going up in value. However it's not correct to say that all stock is the same. There are two types of stocks ' public and private stocks. Public stocks are the ones most people are familiar with.

Don @ MoneySmartGuides writes The Rich Are Getting Richer ' A recent study found that The Rich (the top 10 Percent incomes) increased their income by one-third from 1985 through 2010. The speed at which incomes increased for those earning more increased at a faster pace over the same time period.

IMB @ Investing Money writes Keeping Investment Fees Low ' Find out why investment fees matter and how to evaluate which passive fund is better.

Ken Faulkenberry @ AAAMP Blog writes Increasing Portfolio Value: Five Most Important Factors ' As investors we all have the common goal of increasing our portfolio value. But how often do we really consider the factors that determine portfolio values. Here are the five factors that affect the value of your portfolio more than any other components.

J.P. @ Novel Investor writes How To Invest In Your 20s ' Learning how to invest isn't complicated. There are no hidden secrets to investing success. It's just a common sense guide to good financial habits.