Investing 101: An introduction to index funds and passive investing

This article was written by ABCs of Investing, a new site for novice investors. ABCs of Investing offers two short and simple investing posts each week.

Personal finance bloggers are vocal proponents of passive investing in index funds and exchange-traded funds. But not everyone knows much about these, and not a lot of bloggers do a good job of explaining the basics of passive investing. This post is intended to explain the basics — along with the basics of the basics!

I was inspired to write this article because of two separate but identical conversations I recently had with friends. They went something like this: Continue reading...

More about...Investing

The inner workings of a car dealership (and how to use them to your advantage)

Yesterday a reader named Dave Black left a long comment on an old article about how to buy a new car without getting screwed. This is his glimpse into the inner workings of a car dealership. I've edited Black's comment to make it a little more readable, but the advice is all his.

I sell cars, and believe me, there are lots of opportunities for a car dealership to make money.

Front of the house profit is derived from the MSRP less the invoice price (the price the dealer actually pays for the car). Each deal has a "pack charge" or "lot fee" of $200-600 or more that goes in as part of the dealer cost, so when a dealer tells you for example, our invoice is $22145, you can subtract $200 to $600 for the lot fee. There are also dealer rebates and consumer rebates to factor in.

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More about...Transportation

Using an allowance to teach kids about money

This article was written by Nickel, who writes about personal finance at Five Cent Nickel. Since that and his four kids don't keep him busy enough, he's launched another site more narrowly focused on credit card offers.

Though small was your allowance, you saved a little store; and those who save a little shall get a plenty more. — William Makepeace Thackeray

Just over three years ago, we decided to start paying our kids an allowance. While the decision whether to implement an allowance is highly personal, I thought I'd pull together some thoughts on the subject for those of you with kids of your own. Continue reading...

More about...Budgeting

Do-it-yourself landscaping can save thousands

This is the first post from Winston, the new GRS editorial assistant.

My wife and I have saved thousands of dollars by landscaping our own yard.

Four years ago, we were feeling overwhelmed by our back yard. We'd been in our home for a couple of years, had spent some time and money on the inside, and were ready to move on to backyard projects. 

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More about...Home & Garden, Budgeting, Planning

Simplify your investing: An introduction to DRIPs

This article was written by Sara, who writes about reaching for a life of greater simplicity and deeper meaning at On Simplicity.

I'm a simple girl and I love simple solutions. That's why I've fallen in love with DRIP investing — it's about as simple as investing gets. If you're an investor who likes to set it and forget it, DRIPs are a great weapon to have in your financial arsenal.

What Is a DRIP?

The term DRIP refers to "Dividend Reinvestment Program." Don't let the term fool you, though, because DRIPs go way beyond dividends. Essentially, when you open a DRIP account with a company, they're letting you buy stock directly, cutting the brokerage firm out of the picture. This lets you buy additional stock with any dividends you earn, all without brokerage firms taking a bite of your profit. Continue reading...

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Is it more important to be rich or to be happy?

Sometimes we in the United States forget how privileged we are. Because of our relative wealth, we can make claims like "it's more important to be happy than it is to be rich". In this article, Saravanan P of Engineer's Finance argues that for the poor, money is more important than happiness. Though this post has been heavily edited, keep in mind that English is not Saravanan's native language.

Being happy is a state of mind and heart that does not matter whether we are rich or poor. But we can only make statements like "It's more important to be happy than it is to be rich" when we are rich and not poor. Being rich always gives us the power to do things at the time we want. In short, it gives us freedom.

Sometimes I think I know just what it means to have money more than Americans do. I have seen people here in India struggle to earn two to three dollars a day working for more than 12 hours. It's hard, but still people do it. If we were to ask these people whether they are happy, they would say they are, but are they really? They assume they're happy and move on with the life. For them happiness is merely having their bread and butter.

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More about...Psychology

We’re All Going to Die Someday: Making Informed Insurance Choices

This article was written by Amanda, a Colorado tech writer and an activist for children with congenital heart disease. This article is about Amanda's personal experience with insurance. It's not a prescription for other people, but insights into the value of insurance in her own life. It's her hope that it will get you thinking.

There was a time in my life when the thought of insurance made my eyes glaze over. I've never been one to want to read details in insurance contracts, license agreements, etc. I also don't always enjoy thinking through potential unpleasant situations. So, when it comes to buying and using insurance, I've learned some lessons the hard way.

I've made some mistakes with my car insurance, for instance. When I bought a second car to drive to grad school several years ago, I thought, "No, I don't want to pay $3 extra a month for rental car coverage because we have two cars." A few months later, I rear-ended a woman on the highway going 45mph. It took a while to get my car back, and my insurance went up a lot. But it also made it difficult for my husband Jim to get back and forth to work while I used the other car for work and school.

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The benefits of barter

This article was written by Andréa Coutu.

So you've got big ideas but no way to pay for them: a home renovation, weekend getaway, successful business, dream dinner date, leaner body, new bedroom suite...the list goes on and on.

Maybe your bank account has seen better days, or maybe you just don't want to tie up more money in pursuing a dream. Well, money is just one medium of exchange. By using barter, you can tap into a range of goods and services — all without spending a dime. Continue reading...

More about...Frugality

How to save hundreds by playing the drugstore game

This article was written by Cathy, who writes about family finances, cooking, and parenting at Chief Family Officer.

I love the philosophy of getting rich slowly by doing the fundamentals: spend less than you earn, pay off debt, and invest wisely. One way that I save money is with what I call The Drugstore Game.

The Drugstore Game involves combining manufacturer and store coupons, and taking advantage of a store's best deals. When played at the highest level, the Drugstore Game requires only a couple of dollars out of pocket each week to keep you and your family stocked on necessities like toiletries, paper goods and even groceries.

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More about...Frugality