Dave Ramsey Totally Ruined This Guy's Life (and His Music)

www.ksl.com Not long ago, Vince was just a regular guy living a regular life until one day, his wife started "staying up late preferring the company of Dave Ramsey" to him. Before he knew it, he found himself conforming his life to Ramsey's gospel as well. And then Vince realized he wanted to buy an acoustic guitar, but that didn't jibe with his Ramsey lifestyle -- unless he sold his guitar amp. And so he posted this hilarious classified ad to sell his amp and lament how Dave Ramsey had ruined his life. As he says in his ad:

"You see, I could make half a million a year and still not be able to afford a $15 Hello Kitty guitar from Toys R Us, because as long as I have a mortgage, every red cent is consumed by paying off debt or 'responsible saving.' Even when considering an affordable $250 guitar, I feel like I'm stealing from my kids' clothing account (I have four daughters) [...] or the cat account (You read that right -- that excessively obese feline lays around and eats at least $30 worth of cat food per month, but my daughters cherish the fatty. He's like Dom DeLuise with cat hair). The list goes on. "Now just to be clear, I don't blame my wife -- I actually appreciate her level head. It's just one of the things I love about her. And I get it -- we'll be better off in the long run. I'm grateful. Really. But man, I want a guitar now, ya know?"

We got in touch with Vince and asked him more about how Ramsey has affected his life. Are you a fully-devout Dave follower, or are there specific parts of his gospel that you don't believe? "Well, as I've stated, I'm a beginner at best to The Doctrine of Dave, as my wife is the one to have read his books and listen to his radio show. I'm a believer. But, as she's shared with me Dave's teachings, I suppose I have a few tiny issues. My main issue is that I don't view the responsible use of credit cards as a bad thing. As I pay off the balance each month, I build credit, which is something that Dave says is unnecessary -- another nugget of wisdom I call into question. But by and large, I like what Dave has to say." We know Dave Ramsey has ruined your life. But what's the best thing to come out of all of this "ruining"? "I suppose the best thing that's come from this is that it's given my wife and me something concrete that we can be together on regarding finances. We've largely been aligned at a principle level -- you know, avoid debt, live within your means, etc., but Dave's program and his 'baby-steps' have put action to those principles. And this action now serves as our shared financial goals. That's a good thing. Also, I consume less calories in Slurpees. My wife really likes that part." Have you received any interesting emails from people since you posted that ad? Any fellow Dave fans contacted you to commiserate? "Here are a few excerpts from the more interesting messages perfect strangers have sent me: 'I can't buy your amp, but I'd love to mail you an old guitar I don't use. I can't play it, and as my wife also has come to the Ramsey, I feel your pain.' 'While I don't need an amp, I just want to say, from one Dave Ramsey 'victim' to another, I offer you my deepest sympathies.' 'Loved the ad. . . . I'm spreading the word to all my friends who haven't met the evil Mr. Ramsey. Good luck selling the amp, I wish I could buy it!' 'Can my husband and I come over and share with you our debt snowball and how we are securing our future? Are evenings better for you and your wife?' (That one scared me the most.)" So where are you at with selling the amp? "I've sold it! My ad was shared multiple times through Facebook and someone in Orlando, Florida, bought it." Any luck selling your fat cat? "Please. As if. There's no way I'd ever live down selling the beloved heifer. I swear that cat enjoys more affection under my own roof than I do. And he knows it. In fact, a few days after I posted my ad, I woke one morning with difficulty breathing only to find him (and his girth) sitting square on my chest, with his hind-end positioned inches from my face. I think he knew about the ad somehow." Any other final words of wisdom to fellow Dave-commiserators out there? "Do everything you can to support and nurture your most treasured relationships -- and as unromantic as it may sound, having unified financial goals plays a big role in marital harmony. Go for it. Also, if you have a cat, train it from kittenhood to eat small portions." We hear ya, Vince. So maybe Ramsey didn't ruin his life after all. But considering that more than 21,000 people (and counting) have viewed the ad, many can sympathize with his love/hate relationship. And in the end, he sold the amp, which sounds like a win-win to us. More from Joanna & Johnny
•Ups and Downs of Retirement Expenses: What Do You Need? •How to Land Posh Hotel Upgrades for $20 •How I Decided to Quit My Job to Be a Stay-at-Home Mom

Summer is a Great Time to Help Grandkids

Summer is filled with tax-advantaged ways to provide financial help for grandkids who are old enough to work. The strategies also work during other periods when the youngsters work.

Some of the strategies are useful only if you own a business, but first here's one that everyone can use.

You can supplement the income a grandchild earns from a job by making a matching contribution to a Roth IRA in the grandchild's name. Total IRA contributions on behalf of the grandchild for a year can be up to the lower of the child's earned gross income for the year and $5,500. Your contributions plus any made by the grandchild or someone else on his behalf all count toward the limit. Any contributions you make on behalf of the grandchild should be free of gift taxes thanks to the $14,000 annual gift tax exclusion.

The benefits of a Roth IRA, especially one started at a young age, are substantial. The earnings of the account compound free of taxes as long as they remain in the IRA. After age 59½ all distributions are free of income taxes. The grandchild won't be forced to begin required minimum distributions at any time, so the account can compound for as long as he or she wants.

There also are advantages if the grandchild wants or needs the money before 59½. The contributions can be withdrawn at any time free of income taxes. So, after a few years when income and gains have compounded to a decent amount, the grandchild can withdraw the some or all of the contributions and still leave the remaining income and gains to compound for the future.

In addition, when the grandchild is ready to purchase a first home, the contributions plus up to $10,000 of income and gains can be withdrawn tax free.

When you own a business, there are tax advantages to hiring a grandchild or child.

No matter who employs a grandchild, he or she avoids federal income tax withholding if no income taxes were owed la! st year and none are expected to be owed this year. When the youngster is a dependent on someone else's return, earnings are tax free when total income is no more than $6,200 and unearned (investment) income is no more than $350. When unearned income is more than $350, total income must be no more than $1,000 to avoid income taxes.

Of course, you deduct the wages and other payments when you pay a grandchild reasonable compensation for the work done.

When a child is employed by the business of one or both parents, no FICA taxes are due when the child is under age 18 and the business is either a sole proprietorship, a husband and wife partnership owned by the parents, or an LLC that elects to be disregarded for tax purposes. Federal unemployment tax isn't owed on children's salaries until they are age 21.

Take Bigger Gains with a Simple "Cowboy Split"

About a dozen years ago, I found myself having a stimulating conversation one sunny day in San Francisco with the great economist Milton Friedman.

It's a conversation I'll always remember.

I studied economics in college - in fact, I'm the recipient of an honors degree in that subject - and the tireless free-market advocate was and remains one of my big heroes.

We were standing on the balcony of his spacious Nob Hill condo taking in the sweeping Bay views and talking about economics and Washington politics - as I eyed the huge portrait of him standing in a corner that Friedman's wife hated and wouldn't let him hang.

Then he looked me in the eyes and said, "You know, Michael, I'd like to see the Federal Reserve replaced by a computer."

As the 1976 Nobel Laureate in Economic Sciences explained it, he felt the Fed had become too obsessed with micromanaging the nation's economy. Remember, this was a dozen years ago, before the Fed started quantitative easing and heavily manipulating interest rates.

Of course, I'm not suggesting we replace the Fed chair with a robot.

But I always recall Friedman's thought experiment whenever the markets get choppy, as they have in the past few weeks. And when I see the markets become volatile because of the Fed and the news, I know it's time for defense...

Rounding Up Profits

I've shared with Strategic Tech Investor readers my five "Choppy Market Tools." But today, I want to share with you a classic investment strategy that I've given a brand-new nickname to reflect our focus on the "New West" of Silicon Valley tech stocks.

I call it the "Cowboy Split."

And today I'm going to show you that when employed properly the Cowboy Split will protect you from volatile markets.

But that's not all.

If your stocks go down, on the recovery, you make more money...

Back on June 27, I told Strategic Tech Investor readersI believe we are still in the early stages of a generational bull market. That's one that could run for up to two decades.

The U.S. economy continues to gain momentum.

Cars and light trucks are selling at an annual run rate of 16.3 million units. We've had the best five-month stretch of job gains in several years. And we just learned gross domestic product (GDP) expanded at a 4.0% annual rate in the second quarter.

Tech is again leading the way with high corporate profits, strong cash flow and great operating margins.

However, in that report, I also said that we would see setbacks along the way. No bull market advances without occasional corrections and sell-offs.

Indeed, the markets have recently become more news driven than usual.

Fed Chair Janet Yellen's remarks about "stretched" small-cap, biotech, and social-media stocks spooked the market for a couple of days. And investors are also concerned about Argentina's second bond default in 13 years, Israel's offensive in Gaza, and Russia's connection to the downing of a Malaysia Airlines passenger jet in Ukraine.

And with the Dow Jones Industrial Average fluctuating, many investors are getting just plain scared (falsely, I believe) that another major correction could occur any day.

On top of all that, I've spotted a depressing trend this second-quarter earnings season - companies with the slightest hint of trouble see their stocks quickly sell off.

But I'm not worried. This is a great time to take a defensive approach to investing in tech stocks.

In fact, I think I'm getting a reputation for my defensive splits.

I have regular late-night strategy sessions with my good friend - and Money Morning's Executive Editor - Bill Patalon.

When I phoned the other night to discuss market conditions, Bill came on the line and said, "Hello, Mr. Cowboy Split."

If that sounds a bit silly, that's because my defensive strategy - the Cowboy Split - is hardly academic. However, it is a very effective approach. And my readers through Nova-X Report and Radical Technology Profits have used it to make some good money in recent months.

Let me explain how the Cowboy Split works. In a nutshell, you make "split entries" when you acquire shares of a great tech stock.

With this process, we buy a one-half or one-third entry at market, and then put in a lowball limit order to pick up the rest should the market or the stock itself retreat.

To help you better understand the Cowboy Split, I'm going to mosey through two examples... and then we'll watch together as your profits rise.

Cowboy Split Play No. 1

Let's say you have your eyes on Strategic Tech Investor's most recent recommendation, Hewlett-Packard Company (NYSE: HPQ). And let's say it's selling at $36 a share. The company is in the midst of a successful turnaround, and developers there are hard at work on a blockbuster piece of tech hardware known as "The Machine."

Let's further assume you want to own Hewlett-Packard for the long haul. You can use the Cowboy Split to buy on the dips and increase your overall stock profits.

Here's how you do that. You start by investing half of your standard stock purchase at market, in this case $36 a share. As soon the market order fills, you enter what's called a "lowball limit order."

You tell your broker that you want to buy a second tranche of Hewlett-Packard at a much lower price. I usually use a 20% discount for filling the second half of a Cowboy Split.

You would then enter a "limit order" for the second round of Hewlett-Parckard at a price of $28.80 or lower. If the stock falls to that price, your order automatically fills, and you now have an average purchase price of $32.40.

Once the stock resumes its climb, you have baked in extra profits. For instance, when HP hits $43.10 a share, your cumulative gains are now 33%. ($43.10 minus $32.40 divided by $32.40 equals 33%.)

Had you bought all the stock at once and held, your returns would have been 20%. ($43.10 minus $36 divided by $36 equals 20%.)

So, the Cowboy Split increased your profits by more than 50%.

But what if the stock doesn't correct and your lowball limit order doesn't fill?

That's fine.

No, you didn't increase your overall gains. But you did get portfolio insurance for free.

Cowboy Split Play No. 2

There's a variation on the Cowboy Split that many pro traders employ. This entails cutting your entries into thirds. Traders do this when they want to pick up more shares at a discount but don't expect a reversal of more than 10% or so.

This time let's use U.S. Silica Holdings Inc. (NYSE: SLCA), which we've been following in Strategic Tech Investor for most of this year. We've already made a double on it, and it's trading at near record highs.

You put in an order, let's use $58, for a one-third position and then put in two lowball limit orders. The standard amounts with this approach are a 10% discount on the second tranche ($52.20) and a 20% discount on the third ($46.40).

If the second two orders fill, and you get an average price of $52.30, then you once again would build in extra profits when the stock resumes its climb.

If the stock climbs to $69.60, your gains are again 33%. ($69.60 minus $52.30 divided by $52.30 equals 33%.)

If you had bought and held, knock that gain down to 20%.

As you can see, the Cowboy Split is a powerful investment management tool. It's a great way to play defense when a bull market turns choppy, as it has in recent weeks.

And with this approach you won't get left on the sidelines once the uptrend resumes.

By making staggered entries, we turned market setbacks or declines in individual shares to our strong financial advantage.

So, if Mr. Dow has an anxiety attack, then Mr. Cowboy Split has a plan: Buy great tech stocks at a discount... and make even more money in the long run. 

To take advantage of Michael's Five Tools to Turn Choppy Markets to Your Advantage, and to get all of his Strategic Tech Investor research and recommendations free, twice weekly, click here..

It's Time to Talk About Taboo Money Topics with Your Kids

Alamy While a recent survey by Citi (C) shows that nine out of 10 parents teach their kids about money and 59 percent say they talk to their kids about personal finance, there are still a few financial topics that parents prefer not to discuss. "Our survey findings showed that most parents have begun discussing finances with their children before age 13, and nearly half of respondents said that sensitive financial topics are not off-limits for conversations with their children," says Linda Descano, a personal finance expert with Citi. "However, the topics that most respondents found off-limits were 'the amount of money I make' (with 28 percent believing this was off-limits), 'the amount of savings we have' (27 percent) and 'the amount of debt we have' (26 percent)."

Workers to see 3% pay hike next year

NEW YORK (CNNMoney) Hiring among U.S. employers may be picking up steam, but worker wages? Not so much.

Employers expect to increase worker salaries by an average of 3% in 2015, only slightly better than the 2.9% hike they gave this year, according to human resources consulting firm Mercer.

The good news: Employers say they're starting to realize that they must increase pay to retain workers, many of whom have more opportunities now than they did during the recession. In 2009, when the unemployment rate hit 10%, pay rose by just 2.1%, according to Mercer. In July, unemployment hit 6.2%.

"Companies are starting to see data telling them they have to raise their salary structure to keep up with the competition," said Mary Ann Sardone, a consultant with Mercer.

In the early 2000s, when unemployment fell into the mid-4% range, overall raises were more robust, averaging about 3.5%.

Sardone said raises may never get back to that level again. Instead, companies are using bonuses or other incentives to reward and retain their employees. "They've gotten more creative about how to keep their best people," she said.

  A look at July's jobs report

Still, most of next year's pay hikes will go toward retaining top talent. Employers expect to give the top 8% of performers an average pay hike of 4.8% and the next 28% of performers a 3.7% bump.

Average performers, who represent 57% of the workforce, are expected to see an average pay increase of just 2.6%. The next 9% will get 0.9% raises and the worst workers will get little-to-nothing, Mercer reported.

Some industries plan to hike wages more than others, mainly in an effort to lure much-needed talent. The domestic oil and gas drilling boom, has created thousands of jobs for the energy sector, which expects to raise wages by an average of 3.5% next year.

Non-financial services, like travel services providers or data storage companies, and consumers goods manufacturers, will offer workers the smallest wage increases, averaging 2.8%.

'

Mercer also reported that pay freeze! s have become a thing of the past. Less than 1% of the 1,500 companies Mercer surveyed said they will not give any pay increases next year, down from 6.5% two years ago.

3 strikes and you're out? Not for one bank

It's less than two years since Standard Chartered paid a fine for breaking U.S. sanctions on Iran. LONDON (CNNMoney) Remember Standard Chartered, the British bank fined twice in 2012 for sanctions busting and money laundering? Well, it seems the bad behavior continues.

In the small print of its earnings statement Wednesday, the bank said it was expecting another U.S. fine related to failings in its anti-money laundering controls.

"The group believes that the resolution of these issues is likely to involve an enforcement action by the New York Department of Financial Services," it said.

In addition to a fine, that would mean another two years of intensive scrutiny by an independent monitor appointed as part of the 2012 settlement, and other remedial measures.

Standard Chartered (SCBFF) is a major global bank, based in London, but does most of its business in Asia, Africa and the Middle East. It has offices in the United States, subjecting it to U.S. banking laws and regulations.

It paid a total of $667 million in penalties to U.S. authorities in 2012 for breaking sanctions on Iran, Burma, Libya and Sudan, and to settle money-laundering charges.

Back then, it said it had completed a comprehensive upgrade of its compliance systems.

Standard Chartered said Wednesday it was "executing a comprehensive program of change to raise the bar on conduct," and was hiring senior experts as part of a 30% increase in the number of employees working on legal and compliance issues.

Rising costs were one reason for a 20% slide in pre-tax profit at the bank in the first half of the year. Problems at its Korean operations, exposure to commodity fraud in China and losses on investments made before the financial crisis also dragged down earnings.

Shares in th! e bank were trading 1.7% weaker in London, taking losses for the year to 12%.

iPhone 6 and Other New Products Apple Could Unveil in Its "Very Busy Fall"

Another week of hyped Apple (NASDAQ: AAPL  ) rumors has passed, and we're left with a handful of new reports to sift through. Among the most interesting was another claim about the launch time frame for Apple's upcoming iPhone 6. While nothing is certain yet, here is what we can glean from the rumor mill about Apple's product plans for the rest of the year.

Alleged leaked 4.7-inch iPhone 6 rear casing. The part was first shared by Feld & Volk.

iPhone 6 launch date?
The new rumor on the launch time frame of the iPhone 6 came from MacRumors, citing a "store leader" that unveiled several dates during an internal Apple Retail Store meeting. Like previous speculation, the source said the iPhone 6 would be introduced during a media event in September. But, with a twist, the source's claim differed from previous rumors in saying that the iPhone 6 may not hit the shelves until October -- not September, as previously expected.

Unfortunately, the source's claim of an October 14 launch date seems to take away from the credibility of the rumor, because it falls on a Tuesday. Typically, new iPhones launch on a Friday, MacRumors notes. And The Motley Fool's senior technology specialist, Evan Niu, who has followed closely for years, lists a number of other problems with the rumor.

A busy October? Probably.
But the MacRumors' source's other claim, that October would be "very busy for stores and the company itself," seems right on track. Apple CEO Tim Cook said so himself during the company's third-quarter earnings call in July that it's going to be a "very busy fall" for Apple. Further, Apple's soaring research and development costs, and commitments to third-party suppliers on the balance sheet found in the company's third-quarter 10Q filing, also support this storyline.

What products and services are expected from Apple this fall and early winter? A bifurcated iPhone 6 lineup that includes both a 4.7-inch, and phablet-like 5.5-inch model (for comparison, the iPhone 5s display measures at 4 inches), an iWatch, new iPads, new Macs, and maybe some sort of payment service have all been speculated.

iTunes Pass. Image source: Apple. Motley Fool senior technology specialist Evan Niu suggests that iTunes pass, although only offering minor incremental convenience today, may offer clues about Apple's longer-term payment strategy.

Other potential products, though more speculative in nature, are an Apple TV refresh, and some sort of hardware purposed to work with Apple's recently announced HomeKit.

Other key rumors from the week
There was more evidence during the week that Apple is planning to launch the iPhone 6 lineup in two different sizes. The evidence came from a part leak published by Nowhereelse.fr, showing high-resolution photos of home button flex cables claimed to be from the 4.7-inch and 5.5-inch iPhone 6, each with Touch ID functionality built in.

Image source: Nowhereelse.fr.

Though it's possible that at least one of these parts could belong to the next-generation iPad, MacRumors' Kelly Hodgkins says this isn't likely. "While Apple's iPads are also rumored to be gaining Touch ID functionality this year, the parts shown in the photos are compact enough that they are much more likely to be for the iPhone."

The other notable rumor during the week from The Information reports that Apple is putting off the refresh of its Apple TV until 2015. Citing "a person familiar with the plans," cable companies that are "dragging their heels" have made execution difficult. A pending Comcast-Time Warner Cable merger doesn't help either, the report says.

Apple TV or not, a likely launch of a bifurcated iPhone lineup, new iPads, new Macs, an iWatch, and a payment service sounds like Apple has its hands full.

The biggest takeaway, at this point, is exactly what Apple CEO Tim Cook has already been trying to drive home: The company's pipeline is full of goodies. As Apple's typical product launch season approaches, it's worth wondering whether or not Apple's conservative valuation really takes into consideration the full potential of what could be Apple's best product pipeline in 25 years.

More from The Motley Fool: Warren Buffett Tells You How to Turn $40 into $10 Million.