Have you heard?

I love learning random things. If I had to describe my intelligence I would use the phrase “an inch deep and a mile wide,” meaning I know a little bit, about a lot of stuff. I’m obviously not the smartest PF blogger out there, but as long as I know enough, hopefully I can trick you people in to coming back (and maybe even subscribing too).

I thought I’d mix things up a bit today and post up a handful of random “Did you know facts” that relate to personal finance (along with some that don’t). Most of you probably already know these things, but hopefully at least one of these facts will be new to you…

Did you know… That you can withdraw your contributions to your Roth IRA at any point, tax/penalty free. If you want to take out any gains, you can also do so tax/penalty free if the money is used for education or your first home (some limitations apply).

Did you know… As of 2010 it costs the U.S. Mint 1.79 cents to make a penny. Time to get rid of the penny?

Did you know… I have a fear of falling asleep in public.

Did you know… That if you take out a 401K loan and are fired or laid-off you HAVE to pay the loan back really quick (usually in less than 60 days), otherwise you will suffer some major tax and penalty issues. Think twice before borrowing that money for a new kitchen.

Did you know… The stock market has always given the best return on investment over a long time horizon.

Did you know… I’m still not convinced dinosaurs ever existed. Conspiracy theory?

Did you know… Every time you use your debit or credit card, the merchant has to pay a fee (usually 1% to 3%) to Visa, MasterCard, etc. If you donate on your credit card that means the charity is in effect getting 3% less than what you intended to give (this adds up over time).

Did you know… That the national personal savings rate hovers between 0 and 5 percent each year. That’s pathetic.

Did you know… If you make minimum payments on a $5,000 credit card bill (at 19% interest) it will take you over 30 years to pay the card off, and cost you more than $14,000 in interest.

Did you know… I use to have a pet iguana I named Ziggy after a character in my favorite show, Quantum Leap.

Did you know… If you make over $20,000/year you are in the top 12% of income earners in the world. Perspective?

Did you know… That on top of your down payment you need to be prepared to pay up to another 3% of the home’s value on closing costs. If you put 20% down on a $300,000 and have to pay closing costs, you need $69,000 in the bank.

Did you know… That I played in a flag football tournament this weekend and our team-name was “The Frolicking Flamingos.” And in case you are wondering, we won!

Alright, that’s where I’ll end my “Did you know facts” but hopefully you will add a few more to the list. What are some of your favorite “financial facts”? Was there anything on the list you didn’t know about?

18 thoughts on “Have you heard?

  1. Did you know that if you max out a ROTH IRA you’ll have more retirement income than if you max out a traditional?

    Did you know if you pay off your credit card before the grace period expires, you’ll owe no interest?

    • “Did you know that if you max out a ROTH IRA you’ll have more retirement income than if you max out a traditional?”

      Well, that depends. You fund a Roth from after-tax money and a traditional from tax-deferred money. If your tax bracket remains the same, the result is the same. If tax brackets go up after retirement, then the Roth has the advantage. The key benefit here is not the income per se, but that withdrawals from a Roth do not figure in the minimum distributions required from tax-deferred accounts at age 70.5. Since under current law these distributions would trigger far higher taxes on social security benefits, you gain considerably in this case from having more assets in the Roth.

      • The reason you have more from a maxed Roth IRA rather than a maxed Traditional IRA is that the $5,500 maximum going into the Roth already had it’s taxes taken out, whereas the $5,500 maximum going into the Traditional IRA is yet to be taxed. Because of this, you can squeeze more of your gross income into a Roth IRA than a Traditional IRA.

    • Yeah I am with you on this. Not to start a religious debate, but even the Creationist museum has a dinosaur skeleton they are using to “prove” the young Earth theory.

  2. I work with voiceover people all the time, and the average person speaks at about 165 WPM. Even 200 WPM is very fast. It is virtually impossible to articulate words any faster at a sustained pace. I would suggest reading the following, which shows your “factoid” has as much credibility as your notion about the dinosaurs:

    http://languagelog.ldc.upenn.edu/nll/?p=2630

  3. “Did you know… That you can withdraw your contributions to your Roth IRA at any point, tax/penalty free. If you want to take out any gains, you can also do so tax/penalty free if the money is used for education or your first home (some limitations apply).”

    Note to readers – This is assuming that your account is over 5 years old.

  4. Ninja, one of your Did You Know facts is debateable!

    Did you know… That if you take out a 401K loan and are fired or laid-off you HAVE to pay the loan back really quick (usually in less than 60 days), otherwise you will suffer some major tax and penalty issues. Think twice before borrowing that money for a new kitchen.

    The above statement was not true for me at all. I called Fidelity and grilled them about terms prior to taking out a loan. They mentioned that you have to pay this back if loss of employment or layoff occurs, but they itemize it into monthly payments until the money is paid. That can go on for a few years actually, it depends on the term of your loan.

    I am a big advocate of 401K loans. I used one to pay off a car loan. Now instead of 6.5% interest out the door and a monthly car payment bill, I have less money coming out of the paycheck each pay period, but I pay myself 4% interest. This was an immediate reversal of fortune. #win

    • We all know that when you take out a 401k loan, you have to repay it via monthly payroll deductions.

      I believe Ninja meant is that no matter the cause, if you cease working with your current employer, your entire loan is usually due within 60 days. If you are unable to pay back the loan balance during that quick time frame, the entire amount you are unable to pay is deemed a distribution, which is likely to be subject to significant federal income tax, state income tax, and early distribution penalties

      Also- If you can’t pay cash for your car, then you really can’t afford one. By taking out a 401k loan, you miss out on that money potentially making a better return, vs. the 4% you pay yourself, in the stock market- especially in a good year like 2013.

  5. I don’t understand if you have an MBA and you have money saved up, then why not start your own business or buy a franchise?

  6. *gasp* If you take away the pennies I’ll no longer be able to squish them in fascinating places around the United States!! http://www.tecnews.org

    Disney Parks has their own currency and if you use one of their Disney Dollars, it is destroyed after it is used.

  7. Canada stopped using the penny in 2013 which according to the fed. government website is saving taxpayers $11 million/year.

    It’s a bit confusing at first – cash purchases are rounded up or down (ex: $1.28 become $1.30, $1.26 becomes $1.25) while electronic payments aren’t rounded up or down (ex: you’ll still pay $1.28 if you pay by credit card or debit) – but it seems to be working.

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