I Challenged The IRS And …..

Have you ever received a letter from the Internal Revenue Service (IRS) notifying you that you owe more in taxes than you paid? Have you ever been audited by the IRS challenging your tax return? If you have, it is possible the situation spelt doom for you. For the generality of people, a letter from the IRS evokes a panic attack. This is for good reason: the IRS has great powers and can chase you down anywhere you are and can even garnish your wages. Worse still, you can be prosecuted for tax fraud and put in jail if you conceal assets and income. Often the fear of the IRS is the beginning of tax wisdom in the US. Nobody wants to mess with the IRS. When confronted by the IRS, most people just give up and pay up. It’s that simple. Many don’t even want the hassle of challenging them, even if there is a possibility they can win. One of the

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Common Personal Finance Terms And Their Meanings II

The first part of this series was published last week. You can check it out here. The following terms might help you understand better the world of personal finance. This is by no means exhaustive. Emergency Fund: This is an account for funds (money) set aside in case of the event of a personal financial difficulty, such as loss of a job, a debilitating illness or an unforeseen major repairs to your home. Most financial professionals recommend between 3-6 months of your monthly expenses (not your income) in your emergency fund. So for example, if it takes about $3,000 to run your household in a month, you should keep between $9,000 – $18,000 in a dedicated account (preferably a high-yield online savings or money market account). Personally we use Ally bank and they currently give 1.85% APY in their online savings account. Equity (Home Equity): The fair market value of a home minus the unpaid mortgage principal and liens. You build

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Common Personal Finance Terms And Their Meanings I

This is a long post, so it’s going to run in 2 parts. Part 2 will run next week. This is a young blog and I feel it is right to set some proper foundation. It will not be presumptuous of me to assume that my main target audience for this blog have minimal interest in personal finance. To be fair, the majority of Americans really don’t pay attention to their finances.  But someone who was born and bred in America has probably heard some of the numerous common financial terms often used, even if they don’t know their full meanings. However, to the immigrant, especially one that is still relatively new in this country, most of these financial jargon will inspire confusion. Most just give up even trying to learn and know what these terms mean. People don’t want to read books on personal finance and investing because most are truly boring and some authors already assume some level

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Understanding Your Paycheck

Your income is your most powerful wealth building tool. Like the saying goes, “It’s not how much you make, but how much you keep that makes you wealthy”. If you’re a W-2 employee (majority of workers are), you will be most likely paid on a schedule (weekly, bi-weekly, semi-monthly or monthly). When you get paid, typically, you get issued a paycheck stub, even if, like most employees, you elect to have your paycheck directly deposited into a bank account. The stub explains all the financial details of your income for that pay period. Learning how to read your paycheck stubs can help you to better track your income. Once you understand the layout and terminology of the paycheck stub, you can accurately track how much money you earned, how much money you took home, and how much of your earnings were given to any withholdings. Keeping a careful record of your earnings will help improve your overall personal finances. Often, people complain,

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Fully Integrated to America? Now Change Your Mindset

One of the greatest struggles of new immigrants to America is to get integrated into their new society. By far, the most important aspect of this is to get your legal status in place. The process can be long, curvy, and filled with cliff-hangers. The process and duration can be different for each individual depending on your country of origin or your career status when you started. Your American colleagues or friends who never experienced this, have little to no knowledge of how this process works and how painstaking it can be. While you are doing this, you are also concurrently blending into the different cultures of your new home: their foods, weather patterns, slangs and accents, social expectations, nightlife, national holidays,  religious worship, tax system etc. By the time you check this box (often by obtaining a permanent resident card or getting your citizenship), you have already been in the country for a while. If you’re like most immigrants, your mind was probably laser-focused on

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Boundaries: Protecting Yourself From Unrealistic Financial Expectations

DARING TO SET BOUNDARIES IS ABOUT HAVING THE COURAGE TO LOVE OURSELVES EVEN WHEN WE RISK DISAPPOINTING OTHERS – Brene Brown It was 2:45 AM local time when the phone rang. It continued ringing ceaselessly as if it tried to convey the seriousness of the situation from the caller. I looked at the number and did not recognize it. However it was a phone call from back home in Nigeria. I was deep in sleep, but I considered this could be a call from a family member back home. But, didn’t they think of the time difference before placing the call? Maybe they’re in distress? Maybe this is a serious emergency? I picked up the phone and answered. It was my old high school class mate from back home. The last time I spoke with him was probably about 10 years ago. We are not particularly close. I asked him how he was and what the matter was. He asked

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5 Quick Ways to Organize Your Financial Life

Have you ever wondered how you can take charge of your financial life, but don’t know where to start? It’s worse for new immigrants who have settled in to America but don’t really understand all the financial jargon they hear….things like 401K, Roth IRA, Term-life insurance, Annuities, Disability insurance, etc. Are you sick and tired of working very hard, making a decent income and yet always seem to have month than money? Well, you’re not alone. According to a recent report from CareerBuilder, 78% of US workers live paycheck to paycheck. In that CNBC article, even 10% of those making over $100,000 annually said they usually or always live paycheck to paycheck. This problems affects almost everyone, across all income groups. But you can do something about it. Here are 5 quick and easy ways to take care of this. 1. Calculate Your Net Worth To get a sense of where you are, you have to take stock. Calculating your net worth

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Inertia Can Kill Your Finances

I sent out my first post on this blog on November 12, 2014. I had a lot of passion going in and figured I was going to produce a deluge of great content going forward. What happened next? Crickets! I went into a long and sustained period of dormancy. Almost 4 years long! Why? Simply put, it was inertia. Questioning Myself Why did I slump into such a long period of inertia? Well, life got in the way and I simply kept postponing. Oh, I will post a blog post when work is less tedious…..I will try to create content when I get a vacation…..I will post one when…. It was all excuses. The other reason for my inertia was I didn’t have faith in myself. I didn’t think I will be able to keep up with creating and producing content consistently enough to ensure my blog does not die a natural death. I mean, there are like a zillion personal

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