What Happened to Patrick? A Few Thoughts About Blogging Anonymously

by Ryan on March 1, 2010

I have a confession to make. For the past three years I have been blogging under the name Patrick, which is my middle name. My real name is Ryan Guina. Why am I sharing this? There are several reasons actually, but the main reason is transparency. I want daily readers and anyone else to know that there is a real person at the other side of this computer, not just a “guy named Patrick.” In the interest of transparency, I will share why I chose to use a pseudonym, why I am “outing” myself, what it means for readers, and my thoughts on being anonymous on the internet.

Why I chose to be anonymous

When I first started blogging I had little knowledge of internet communities. I used the internet for news, e-mail, and online banking. The idea of creating a website about personal finance and using my real identity made me think people would be able to find out more about my financial situation and possibly make me a target for identity theft. There were also several prominent personal finance bloggers who maintained anonymity when I started blogging, which made the decision easier (see Flexo, Nickel, FMF, AFM, MBH, and others). In the end, I decided to use my middle name because I thought it was more approachable than using initials, and it was easier for me to identify with.

Anonymity and blogging in the workplace. The deciding factor to use a pseudonym came when I read the paperwork I had recently signed at my (then) new job; it was a non-compete agreement that included provisions for company ownership/compensation for creating anything technology related while an employee for their firm. The fine print led me to believe that I would be fine as long as I didn’t use company equipment, but I didn’t want to take any chances. I was new to the corporate world after after a tour in the USAF and I didn’t want there to be any conflicts of interest or give them any reason to come after me. (note: I haven’t worked for that company for over two years and they have since been acquired by another company). If you are considering something similar, talk to your ethics department about any potential conflicts of interest.

Why I am now using my real name

As I mentioned at the beginning of the article, this is mostly about transparency. I want people to know that they aren’t receiving articles and correspondence from an anonymous writer. There are other reasons as well – including branding, correspondence, and business.

I have been building a “brand” under a single name, which doesn’t do me much good if a reporter wants to use my story or if a publication wants me to write for them. It is much better in the long run to build my online identity under the name Ryan Guina than it is to continue using my middle name.

Using my full name also makes it easier to deal with advertisers and other people I work with who need to know my real name for business reasons. Signing e-mails and receiving mail and checks under both names gets confusing and is less efficient than it needs to be.

What will change here at Cash Money Life

Nothing. Well, that’s not exactly true. In the name of transparency, I plan on sharing more specific information about how my wife and I manage our money, including some of the tools and resources we use to manage and track our money, which financial companies and accounts we trust with our money, how we manage our money, how I manage my small business finances, etc. The idea is to give you a “peak under the hood” at our personal finances. I won’t be sharing net worth information, because I don’t think that will help anyone improve his or her financial situation. But I will share tips that we use and the programs that help us do it.

Beyond additional transparency there shouldn’t be many other significant changes. I will continue writing a strong mix of personal finance, career and small business topics to help you improve your financial and career situation. Hopefully you will find it helpful to see how I do it, and in the process I hope readers will leave their tips. I know I have just as much to learn from you as I have to share with you.

Should you use your real name online?

Now to address this topic on a broad level. Using my middle name online when I started blogging made sense for me at the time. But I wish I had used my real name from day one. Using my full name would have been easier for correspondence and could have led to more personal and professional opportunities. This has been an important lesson for me. But what works for me may not work for you. There are dozens of examples of anonymous bloggers who decided to use their full name, others who were outed by someone with good investigative skills, and others who have chosen to remain anonymous. There are even some bloggers who have gone through multiple identities.

Pros and cons of blogging under a pseudonym. There are many reasons people prefer to remain anonymous. Sometimes it is to keep their day job (many people have been fired for blogging), other times it’s for privacy, and some people find that it opens more doors to them. Here is an example of the latter reason from a staff writer on CopyBlogger: Why James Chartrand Wears Women’s Underpants. And, no, it’s not what you are thinking.

On the flip side, some people find that using their real name opens doors to further opportunities. A great example of this is Kerry Taylor from SquawkFox, who received a book deal based on the quality of the writing on her blog. You can read her story here, and read more about her book.

Using your real name online is a personal decision

I know many people who are in a similar situation as myself, some of whom will ultimately use their real name, and others who will continue to be anonymous for the foreseeable future. I can only speak from my personal experience and reference a couple other people who wished they would have used their real name at the onset.

However, there is a strong reason to remain anonymous. People have been fired or lost relationships due to their online activities, including blogging, publicly speaking out against their company, sharing information that should have remained private, or other reasons.

In the end, how you choose to represent yourself can have far reaching implications. For me, I choose to represent myself by my full given name. I feel that this is the best decision for both now and in the future.

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CompleteTax Review and Giveaway

by Ryan on February 28, 2010

I was recently contacted by the marketing rep at Complete Tax about hosting a giveaway of their software program to readers. Giveaways are a lot of fun, so I said sure, let’s do it! But before we give away any copies, let’s take a look under the hood and see what CompleteTax is all about.

CompleteTax Review

CompleteTax is a do-it-yourself tax software program along the lines of TurboTax and H&R Block at Home. They offer an easy to use interface that can handle some fairly complex tax situations, making it an ideal solution for someone who has investing income, small business income, income from real estate, estates or trusts, and other complex situations. There  is also a section to easily classify your deductions and tax credits, which will help shave your tax bill.

More CompleteTax features:

  • Online Tax prep. No software to download.
  • Free e-file. e-filing is fast, easy, and secure.
  • Extensive resource list. Downloadable forms and worksheets, Tax Guide; Searchable FAQ section; Updated tax news; Tax and other financial calculators; state tax support; and more.
  • Easy data import. Import W-2 information from leading payroll prep companies; Investors can import information from financial service firms, including Charles Schwab and Morgan Stanley, or from GainsKeeper to further simplify the Schedule D.

CompleteTax Versions

CompleteTax comes in several versions, with prices ranging from free to $49.95. Each higher version comes with all the features of the previous version, plus additional features. CompleteTax also handles state returns, which are $24.95 on all versions. Like most online tax prep software programs, you can start your return for free, and you only have to pay when you print or file your tax return. So if in doubt, start with a lower version of the software program and upgrade if necessary.

  • Free: 1040EZ only, single or married filing jointly
  • Basic ($9.95): Add child and dependent expenses; homeowner mortgage interest; education credits, tuition & fees; itemized charitable deductions
  • Deluxe ($29.95): Add CharityDeductions calculator; Alternative motor vehicle credit; Stock/bond sale gains or losses
  • Premium ($49.95): Add First-time homebuyer credit; Income from rental properties; Self-employment or contracting; Sole proprietorship and partnerships; K-1 income from S-Corporations; Royalties and stock dividends; Income from estates and trusts

The price for CompleteTax federal returns is comparable to the other major players in the online tax software industry and many reviews give CompleteTax flying colors, including TheStreet.com which named it the best tax software program due to its ability to handle complex tax returns with ease. Overall, I think CompleteTax competes well against TurboTax and H&R Block at Home, particularly if you have a more complex tax situation.

Complete Tax giveaway

I have 5 copies of CompleteTax to give to Cash Money Life readers. Each CompleteTax coupon code will be good for preparing and filing 1 federal and 1 state tax return, which has a value of roughly $75. Want to win a copy? All you need to do is leave a comment about one financial, small business, or career topic you would like to learn more about in the near future. Comments will be used to help guide future content here on Cash Money Life. Please leave your comment on this article by Midnight March 6. Winners will randomly be selected via a drawing by Random.org and announced March 7th. (one entry per person, void where prohibited, and all that jazz).

File Your Taxes

Recommended Personal Finance and Career Articles

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What is a Good Credit Score?

by Ryan on February 26, 2010

You have seen the commercials and heard the radio jingles, so by now you know that having  a good credit score is important. But what is a good credit score? Generally, anything above 700 is considered a good FICO credit score.

But that is not the end of the story. The reality is that a good credit score doesn’t guarantee a loan or mean that you are in good financial shape. A good credit score just gives the lender another piece of information to help determine your credit worthiness. Your ability to get a loan depends on many factors, including your credit report, your credit history, amount of available credit, credit utilization, and other factors.

What is a Good Credit Score?

Your credit score is determined by a proprietary mathematical formula. There are many different versions of credit scores, but the most commonly reference is the FICO credit score, which is considered the industry standard. Your credit score is based on a weighted formula which includes your payment history, amounts owed, age of credit history, recent loans, and the types of credit you have. The FICO credit scores range from 300 to 850 and a good credit score range is considered 700 – 850. Here are more credit score ranges and their ratings.

FICO credit sore ranges:

  • FICO credit score range: 300 – 850
  • Good credit score: above 700
  • Average credit score: 680 – 700 (depending on source)
  • Poor credit score: Below 620

Why You Need a Good Credit Score

As the FreeCreditReport.com commercials wants you to believe, you need a good credit score to drive a nice car and pick up chicks. Unfortunately, that’s not quite true. A good or bad credit score doesn’t guarantee a loan or necessarily prevent you from getting a loan. A good credit score will make it easier to be approved for a loan, allow you to have more available credit, and qualify you for lower interest rates when you are approved for a loan. And low interest rates can make a HUGE difference over the life of a loan.

Affect of Good or Bad Credit Score on Interest Rates

You will almost always be able to obtain a loan, even with a poor credit score. But the terms and size of the loan will vary widely. The difference will come in the form of the required down payment or the interest rate you will have to pay. Let’s look at some examples of how good and poor credit scores will affect your payment structure on a mortgage, then on an auto loan. There is a substantial difference in monthly payments between high and poor credit scores, and the payments over the life of the loan should be enough to convince you that a good credit score is valuable!

Affect of Credit Score on 30 Year Fixed Mortgage Rates

The score ranges and interest rates below come directly from the MyFICO website. There are three examples given for credit score ranges and interest rates, one is for auto loans and the other compares credit score and interest rate ranges for 15 and 30 year mortgages. The example below is from the 30 year fixed mortgage at $300,000:

FICO® score APR Monthly Mortgage Payment
760-850 4.645% $1,546
700-759 4.867% $1,586
680-699 5.044% $1,619
660-679 5.258% $1,658
640-659 5.688% $1,739
620-639 6.234% $1,844

Comparing good credit mortgage rates and bad credit mortgage rates. Using the numbers above, you will notice there isn’t a big difference in the monthly payment from the top credit score to the second tier credit score range of 700-759 (remember anything over 700 is generally considered a good credit score range). Once you start dropping into the lower tier credit score ranges, you will see a large monthly difference in your payments. But thinking in terms of monthly payments can be an expensive way to think, especially when you consider that this is for a 30 year mortgage.

Even with the best credit score, making minimum payments on a 30 year mortgage means paying $256,564.15 in interest over the life of the loan. Paying 6.234% interest over the life of a 30 year mortgage equates to paying $363,851.12 in total interest. To put it another way, that monthly difference of $298 equals a difference of over $107,000 over the life of the loan.

Affect of Credit Score on Auto Loans

Using the same concept as we used above, let’s examine the affects of how your credit score range affects your monthly auto payments. The MyFICO website references a 36 month fixed rate auto loan for $25,000.

FICO® score APR Monthly Auto Payment
760-850 5.715% $757
700-759 7.354% $776
680-699 9.380% $799
660-679 13.196% $845
640-659 18.039% $904
620-639 18.680% $912

Comparing good credit auto loan rates and bad credit auto loan rates. As you can see, the monthly difference  between the good credit score range and a poor credit score range is $155, or over $5,500 for the life of the loan.

What is bad credit score?

Have a poor credit score? Credit scores under 620 are often considered sub-prime loans, and come with more risk to the lender. Borrowers with credit scores in this range often pay substantially higher interest rates. If you fall below the sub-prime loan cutoff limit, it may be best to try and improve your credit score before applying for a loan. You may find it easier to obtain a loan and the terms will likely be better.

Remember, not all is lost. As we mentioned above, you can almost always find someone to give you a loan if you need one. You will see a difference in the terms of the loan, though. You may be required to pay a larger down payment or higher interest rates to get the loan you are seeking.

Your credit score is important

Like it or not, your credit score plays an important role in your ability to obtain a loan, the amount of available credit you can carry, and the interest rates you will pay. If you are considering applying for a loan in the near future it is probably a good idea to know your credit score and try to improve it before applying for the loan.

Get your free credit report and credit score. If you are interested in monitoring or improving your credit you can get your free credit report and free credit score to help you. Be sure to read all terms and conditions.

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Beginner Investing Strategies

by Ryan on February 25, 2010

Investors today have more investment options than were available to the average investor just a few decades ago. While having multiple options is usually a good thing, too many options can cause system overload and lead many people to avoid making decisions. Investing is a broad topic that often seems intimidating to people who are new to investing. And that is understandable – there are dozens of investment vehicles and thousands of investment options. Before we let analysis paralysis get the best of us, let’s take a look at options for the first time investor.

DIY Investing or hire a financial planner? This article is primarily aimed at someone who plans on starting their own investment plan. However, these steps can easily be done with the help of a financial planner. If you are beginning your journey into investing, you want to choose a financial planner that will walk you through these steps and be able to easily explain why each investment option is good for reaching your goals, and direct you to additional information so you can better understand how and where your money is being invested.

Defining investment goals

The first thing we want to do is look at our investing goals. This will help us determine what type of investment vehicle is best for our investment. Before we go much further, let’s define saving and investing; normally saving is a short term engagement and investing is a longer term engagement.

Saving goals often include major purchases such as a car, down payment for a home, college tuition, major vacation, etc. Many traditional “investments” would be inappropriate for savings because they may lose value. Most savings should be kept in low volatile accounts such as a high yield savings account at an online bank or in a CD. Here is a list of high online bank interest rates that you may find helpful.

Common investment goals include longer term goals such as retirement, keeping pace with inflation, college tuition,and other longer term goals. You will notice that I listed college tuition under both saving and investing. Which group you place each of these under depends on your time frame. You can probably take on a little more risk for an intermediate length investment. For example, my daughter is 8 months old, so I can take a little more risk with college fund money right now than I could if she were 16 years old.

Find an investment vehicle

After determining your investment goals we need to find an investment vehicle that meets our needs. No, I’m not talking about buying a pristine 1953 Buick from the Barrett-Jackson Auction company. I’m talking about something more fun and exciting – things like IRAs, 401ks plans, college saving funds, brokerage accounts, and more. There are many specific investing plans that have tax breaks or other incentives that make them worthwhile to use. For example, IRAs and 401k plans are tax advantaged retirement plans that give users tax breaks either now or in their retirement years. 529 College Savings Plans and Coverdell ESAs offer tax advantages for college savings.

Open an investment account

Once you determine your investment goals and which investment vehicle you will use, you should open an investment account. This could be as simple as enrolling in a 401k at work (often done automatically), or opening an IRA, which takes about 15 minutes. Opening an investment account is often as simple as providing your information, signing a form, and transferring funds. But knowing the type of investment will help you narrow down the best place to open your investment account.

Stocks, bonds, and funds, oh my! The options are endless!

There are thousands of places you can put your money, including stocks, bonds, mutual funds, REITs, real estate, commodities, small businesses, and more. Again, I will point to the concept of analysis paralysis and the importance of having investing goals. Before becoming overwhelmed by the sheer number of options, take a hard look at your investment goals and eliminate anything that won’t help you meet your goals. You should be able to eliminate a large portion of the available options just by checking them against your investment goals.

The best investment for a first time investor. If you are a first time investor, you are probably doing well to get this far (defining your investment goals, finding the appropriate investment vehicle, and opening an account). If you are still overwhelmed with your investment options you may find it best to invest in a target date fund, which automatically diversifies your portfolio to a weighted asset allocation based on your target retirement date. Or, to put it more simply, a target fund is a mixture of stocks, bonds, and other investments that is designed to have more risk while you are young, then gradually transfer your funds to less volatile investments as you get closer to your target retirement date. The management is done automatically; all you do is invest and let the fund manager do the work.

Target date funds aren’t without their downsides though. They are often less flexible than an asset portfolio you create yourself, and may come with higher expense ratios than a do it yourself plan. I am not advocating target date funds as the best plan for everyone, but I will say that they are a great place to get started if you simply don’t know where else to start. The idea is to get in the habit of investing and get your money in the game – particularly in accounts that have investment limits per year (401k plans, IRAs, etc.). Get started, get in the habit, then move your investments to a more appropriate investment one you have a better idea of how you can accomplish your investment goals on your own.

Start Investing

At this point you have it all – the goal, the investment vehicle, an open account, and an idea of what you want to invest in. The next step is to get started. If you are just beginning your investments it’s probably not a good idea to try and time the market. Dollar cost averaging through automatic contributions is a great way to get started because it will help smooth your investment returns over the long run. You can often set up an allotment from your paycheck for 401k contributions and sometimes investment contributions to brokerage firms or other investments. Automating your contributions will make it easier to stay on track, just be sure to be aware of any contribution limits that may affect your investment planning. You don’t want to contribute too much money to your investments!

Monitor and Adapt

Ahh, you thought we were done, didn’t you? Not quite. Investing and saving are two different things. It’s easy to set up a savings account or CD Ladder and leave them alone until the term is up. But investing requires a more hands on approach. I’m not advocating day trading, but you do need to be aware of how your money is allocated and how your investments are performing. It’s a good idea to track your investments with money tracking software tools so you can see it all in one place, and it is good to perform periodic spot checks and adjust your asset allocation as necessary. Some people prefer to do this on an annual or semi-annual basis, or any time they have a major life event that changes their investment goals. (Maintenance is one of the reasons I recommend a target date fund for beginners; it removes one step from the equation until they can learn more about asset allocation and other investment vehicles).

Does anyone have any other helpful advice for the beginning investor?

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Analysis Paralysis: The Cost of Inaction

by Ryan on February 24, 2010

When faced with too much information and too may options many people take the easy road, which is doing nothing. This is called analysis paralysis – you are frozen by having too many options and no clear answers.

Inertia can cause many personal and financial problems, so let’s take a look at how we can get past analysis paralysis and make positive progress toward our personal and financial goals.

Example: The Cost of Inaction

One of the most frequent comments and emails I receive is from first time investors who want to know where they should invest first. This is understandable – there are literally thousands of investment options, as stock funds, mutual funds, real estate, and many different investments vehicles such as savings accounts, CDs, 401Ks, IRAs, and more. Unfortunately, many people don’t know where to start investing so they take the easiest route – they don’t invest.

That is the wrong way to think! Compound interest is one of the most powerful forces in the world, and over time, can make you a lot of money! Instead of leaving your money on the sidelines and not investing, put your money to work for you. Still don’t know where to start? Let’s take a look at how we can get beyond analysis paralysis and make progress toward our goals.

Spurring Action: How to get beyond Analysis Paralysis

I’m going to stick with the investing example, but I am going to apply principles you can use in other areas of life as well, including your personal life, finances, choosing an MBA program, career opportunities, business opportunities, etc. The following steps can help you narrow your options, eliminate the noise, and do the necessary research to take action.

Define Your Objectives

The first step in any process is to define your goals and objectives. You will find it difficult to measure progress and ensure you are on the right track if you don’t know where you are going. This principle applies to most topics, including investing.

Investing is a broad topic with many applications: invest for short term or long term, retirement, cash flow, wealth building, and more. The more specific you define your objectives, the easier it will be to reduce the noise and eliminate options that don’t meet your needs. Let’s use the example of retirement investing.

List and Categorize Your Options

Once your objectives are defined, you can easily narrow your options. List all the options that might apply to your objectives. At this point we’re not looking for in depth research; we only want to do enough to know whether or not the line item can meet our objective.

There are many investment vehicles, some of which are designed specifically for retirement. Make a list of all the retirement plan options you can find.

Eliminate Options

The next step is to remove the options that won’t help you reach your goals. Initially, you may find it easier to look for reasons an item doesn’t meet your objectives. Great! Do anything you can to make this step easier.

Look at your list of retirement plan options. If you created a thorough list, you probably have things listed such as self-employed retirement plans, Traditional and Roth IRAs, 401k plans, 403b plans, Thrift Savings Plan, etc. Cross any off the list that don’t meet your needs. If you are not self-employed, or are not eligible for some other retirement plan options because of contribution limits or because you don’t meet eligibility requirements, then you can eliminate those options from your list.

Research Your Options

By now you should have a reasonably short list of options that will help you reach your goals. This is where you will focus the majority of your time. Be organized and methodical with your research and list pros and cons to each option. You may also consider running a SWOT Analysis on your options to determine their strengths and weaknesses.

Going back to retirement investing, we can take a more in depth look at our retirement plan options and look for more information regarding which plan is best for our needs. Based on your situation you may have determined that you are not eligible for a deductible Traditional IRA, but you meet the Roth IRA income limits and you also have access to a 401k plan. If you can’t afford to contribute to both plans, then compare Roth IRAs and 401k plans and determine which is best for your investment needs.

Lights, Camera, ACTION!

If you have done a thorough job with these steps then you should have a clear objective, a list of viable options, and the research to back it up. You will also be well versed in your new topic and should know where to go should you need a backup plan.

Keep in mind that you may need to repeat this process more than once to reach your final goal. Let’s say you decided you wanted to invest in a Roth IRA. Once you make that decision you can repeat the process to find the best place to open an IRA, determine how to open an IRA, and then again to decide how to invest your funds.

The final step is to use your research to create an action plan and follow through with it.

Overcoming Analysis Paralysis

Sitting on the sidelines is great if you are watching a baseball game. But in real life you need to get out there and make things happen. Instead of letting too much information paralyze you into inaction, learn to focus on what is important. Define your goals, list your options, eliminate the noise, do more research, then choose the option that best meets your needs.

Analysis paralysis is a real and dangerous phenomena that can prevent you from achieving your goals. But it can also be avoided with some thoughtful planning and methodical action.

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