When we asked members of the Armchair Millionaire community to weigh in on this topic, we found that many have found ways to achieve financial security without a high income. Here are two such comments:"I make $50,000 a year--peanuts in Chicago--but I manage to save and invest over $15,000 a year. I contribute 25 percent of my pay to my 401(k), max my IRA and I still run a positive cash flow of about $200 a month. How? No cable TV, no car payment, and I live in a modest condo in suburban Chicago." --Greg"Like Greg, I also will earn about $50,000 this year (peanuts in San Jose, California), but will save about $20,000. I max out my 457 plan and Roth IRA and share a house to save money on rent in my high-cost area.

I drive a decent used economy car and I have no car payments." --mysticaltygerThe good news is that you don't have to make a boatload of money to be financially secure. It's all a matter of deliberately making the right choices. My guide tells you how.The Armchair Millionaire's Guide to Achieving Financial Security on a BudgetDo not even think about the Joneses. In our consumer society in which the goodies get fancier and more expensive every year, trying to keep up is a losing game. Not only will you never have the latest and best stuff, you could bankrupt yourself trying to.

The cost? Absolutely nothing. Secure your retirement. Investing in your employer's 401(k) plan, where the money comes directly out of your paycheck, is the most painless way around to ensure that you won't have to scrape through your retirement years. The cost? There's no minimum initial investment and depending on your plan's rules, you can contribute just a few bucks out of each paycheck. Build a stock portfolio.

Join an investment club--they're a great way to learn common sense investing techniques while establishing a solid core holding of stocks. The cost? Most clubs require minimum monthly contributions of just $20 to $50.Build a funds portfolio. If you don't want to go the investment club route, you can build your own diverse holding of stocks by buying a stock index fund. The cost? Many funds have minimum initial investments of $500 to $2,000 (but lower if you're investing through an IRA). Then you can sign up for automatic contributions of as little as $50 a month.Get term life insurance.

A simple $250,000 term life insurance policy can make all the difference in assuring the financial security of your loved ones should you pass away. The cost? Depending on your age, gender and health, as little as $15 per month. THE BOTTOM LINE: When it comes to making yourself financially secure, the decisions you make about what you do with what you earn matter more than how much you earn. Don't assume that a small amount of money won't do it. With patience and a clear plan, small amounts can achieve big goals.

THE ARMCHAIR MILLIONAIRE WEEKLY SURVEY: Do you have life insurance? Log on to www.armchairmillionaire.com and let us know.Lewis Schiff founded the Armchair Millionaire Web site in 1997. His first book, The Armchair Millionaire, was published in 2001. Schiff's newest report, "How to Know When You Are Rich," is now available at www.armchairmillionaire.com.CONTACT INFORMATION:Lewis SchiffArmchair Millionaire877-833-2823http://www.armchairmillionaire.com.

Or, you can visit our web site, www.adshq.org, and complete one of our online credit counseling applications. One of our credit counselors will be happy to help you complete your income budgeting worksheet.Make a complete list of your monthly expenses.Just like the complete list of an income, one must make a comprehensive list of his/her expenses.When you make your list of expenses, it is important to break them into three distinct categories, fixed, flexible, and discretionary.Fixed expenses: expenses that do not change from month to month.Good examples of fixed expenses are your mortgage or rent payments, a car payment, insurance premiums (such as life insurance, car insurance, or health insurance) or any other expense that does not vary from month to month. Once you have gathered all of your fixed expenses, you need to make a total of your fixed expenses for use a little later in the process.Flexible expenses: expenses that vary from month to month.Typically, you can control your flexible expenses to a certain extent. Flexible expenses include items such as groceries, utilities, clothing, restaurant expenses, haircuts, fuel and other items that change from month to month. You should be able to see that you do have at least some control over your flexible expenses.

Again, total all of your flexible expenses; we will also use this later in the process.Discretionary expenses: Discretionary expenses are clearly not necessary for your survival and may be the cause of many of your financial problems.Good examples of discretionary expenses are entertainment, vacations, movies, alcohol, and club memberships. Again, total all of your discretionary expenses.Put your expenses in order of most importance.If your expenses exceed your income, you will be in a position where you will need to use credit cards to pay for your income's shortfall. This is how most people get into credit card debt. It is important to monitor your use of credit to pay these expenses. The long-term effects of borrowing to pay for your current expenses can be very hazardous financially.

Your credit counselor at American Debt Solutions will be happy to provide you with a credit card worksheet to help you track your credit card debt. When you have totaled the monthly payment on all of your credit card debt, make sure to include this total in your total of fixed expenses discussed in point 2a above.Subtract your total monthly expenses from your total monthly income.By subtracting all of your monthly expenses from your monthly income, you will clearly see if you are going to have financial difficulties. If you have more expenses than you do income, you will have a negative expense-to-income ratio. In lay terms, this means that you are spending more than you are making. This is the typical cause of excessive credit card debt.

Since you are spending more than you are making, you must finance your budget shortfall with a source of credit such as your credit cards. If you do not stop this trend, your credit card debt will grow and grow until you no longer have the ability to use your credit cards.If you do have a negative expense-to-income ratio, you need to consider which of your expenses you can reduce. First, start with your discretionary expenses and then move on to your flexible expenses to see what expenses you can eliminate or diminish. If you would like a comprehensive expense budgeting tool, please call your credit counselor at American Debt Solutions. They can be reached at 1-800-246-4019.

Or, you can visit our web site, www.adshq.org, and complete one of our online credit counseling applications. One of our credit counselors will be happy to help you complete your expense budgeting worksheet. At the end of each month go over every expense that you incurred. Look for additional ways to curb unnecessary spending. There is nothing more impactful in life than holding yourself accountable for your goals.

If you hold yourself accountable, you will always reach the goals that you set for yourself. If you don't hold yourself accountable for reaching your goals, you'll find that you never reach them. This is probably the most important element of a debt management or credit counseling program. There is no secret to financial success (see point six below for the secret) and there is no secret to getting out of debt (see point four above for the secret). The beauty of a consumer credit counseling or debt management program is that you are held accountable for the goals that you set for yourself in terms of becoming debt free.When you are reviewing your expenses at the end of each month, remember to set spending limits and goals that that are attainable.

You did not get into debt in one day and you will not get out of debt in one day. Any worthy goal takes time to achieve. Once you get the hang of the budgeting process and see that you are making real progress, you may want to go through the budgeting process quarterly, instead of monthly, as long as you continue to make progress.Try to put 10% of your monthly income into savings (401k and IRA savings plans have additional tax benefits).By saving 10% of your income you will learn one of the greatest secrets to financial wealth, the compounding of interest. If you save 10% of your income each month, your money will start to work for you in short order. It was Albert Einstein who said that his greatest discovery was the compounding of interest.When you consider your savings plans, first make certain that you completely fill your 401k and IRA savings plans.

This will allow your savings to accumulate tax free. This will accelerate the growth of your assets by 20 to 40%, depending on your tax bracket.After you have filled your tax deferred savings plans, any additional savings that you can make should go into a regular savings account. This could include a money market account at a bank (a very secure but low yielding investment) or some type of investment account (a much less secure but typically higher yielding asset over the long run).Also, remember that any reserve that you create will help to insure that you do not have to live paycheck to paycheck.If you would like to learn more about how to build wealth in your life, please call your American Debt Solutions credit counselor. They can be reached at 1-800-246-4019. Make sure you ask them about our ADS Wealth Building ProgramTM.

This program will show you the secret to building wealth in your life. Or, you can visit our web site, www.adshq.org, and complete one of our online credit counseling applications. One of our credit counselors will be happy to help you with our Wealth Building ProgramTM.Divide all of your expenses by the number of paychecks you receive each month.By dividing your total expenses (obtained by adding your fixed expenses, your flexible expenses and your discretionary expenses) by the number of paychecks that you receive, you will see whether your paycheck is sufficient to cover your expenses If it is, you should be in good shape. If it is not, you may have to rely on other sources of income or you will need to reduce your expenses. Again, if you need to reduce your expenses, you must look to your discretionary expenses first and then your flexible expenses second.

If you cannot reduce your expenses, you may want to call American Debt Solutions and speak with your credit counselor. We will help you develop your budget at no charge. Or, you can visit our web site, www.adshq.org, and complete one of our online credit counseling applications. One of our credit counselors will be happy to help you complete your income and expense budget worksheet.We, at American Debt Solutions, hope you find this article both informative and helpful and wish you the best in securing a debt free future.If you would like to speak with one of our credit counselors today, please click here now or call us toll free at 1-800-246-4019.American Debt Solutions, 2003, All Rights Reserved. American Debt Solutions is a 501(c)(3) Not-For-Profit Organization dedicated to providing a debt free future for our customers.

American Debt Solutions is a member of the AICCCA and has certified credit counselors on staff to serve your needs..

The difference is that the traditional 401(k) is funded with "pre-tax" dollars and the Roth 401(k) plan uses "after-tax" dollars. However, with the Roth 401(k), withdrawal of your money at retirement will be tax free like a Roth IRA. The traditional 401(k) plan defers the tax owed during your career until retirement.Although it may sound like the best of both worlds, it is important to note that no employer is required to offer this new Roth 401(k) plan. In fact, a recent survey by employee benefits consulting firm Hewitt and Associates found that only 31 % of employers currently offering the traditional 401(k) plan are considering implementing the new Roth 401(k). Employees may now want to begin inquiring whether their employer will be offering the new retirement plan in 2006.

Contribution limits for the retirement plans are: in 2005, $14,000 for a 401(k) and $4,000 for an IRA, whether Roth or traditional. In 2006, this amount will increase to $15,000 for both 401(k) and IRAs.For in depth answers to your retirement and investment questions visit http://www.HowMuchAnswers.com - providing simple and easy to understand information about 401(k) plans and IRA accounts..

This can be done without distributions, taxes, penalties, or the use of loans. In many cases the money can be used as venture capital to avoid loans, fees and interest. Following is what the IRS said about these matters in a favorable Letter of Determination it sent to a Cash Now client: "These transactions are clearly within the letter of the law as spelled out in the Employee Retirement Income Security Act of 1974 (ERISA)." "Our tax consultant has more than 12 years experience setting up Rainmaker Plans and has never had a problem with the IRS," said Andrea Zecevic, Cash Now's president. "What we're doing here is providing a proven road map for unlocking tremendous assets and capital, while avoiding future problems. This plan is laid out in the law and our tax consultant will obtain a letter approving the use of these funds in this way." The IRS has established numerous rules to keep future retirees from spending the funds held in trust and awaiting them at retirement.

Distributions are taxed as ordinary income--upwards of 50%. However, Cash Now advisor Leonard Fischer, using some of the provisions of ERISA, has developed a way to legally move money locked in 401(k) or other IRA rollover accounts directly into a new or established business without distributions, taxes, penalties or the use of loans. The money may be used for franchises, property, equipment or working capital. The Cash Now tax consultant charges a flat fee for these services and does not sell investments. Cash Now BackgroundCash Now Corporation, a pioneer in the payday loan industry, is developing the most comprehensive menu of services in the cash advance industry, all centered on the Cash Now brand.

The company's proven business model includes licensing to corporately operate joint venture locations across the U.S. and Canada. Additionally, Cash Now's Web site is the most advanced payday-lending portal, offering key insight clients and potential clients alike. Cash Now offers a payday loan license program, Payday Express; and a payday loan and check-cashing license known as Check Express. Profit Guide magazine recently ranked the Cash Now Group 10th in its list of the 50 fastest growing and most promising emerging companies.

For more information about CASH NOW CORPORATION and opportunities associated with Cash Now see http://www.cashnow.com Contact: Cash Now Corporation (CHNW)Andrea Zecevic, Toll Free: 1-866-778-2996 e-mail protected from spam bots.

But an employer can restrict the reasons for loans. Many only allow them for the following reasons: (1) to pay education expenses for yourself, spouse, or child; (2) to prevent eviction from your home; (3) to pay un-reimbursed medical expenses; or (4) to buy a first-time residence. The loan must be paid back over five years, although this can be extended for a home purchase. Usually the participant is allowed to borrow up to 50% of their vested account balance to a maximum of $50,000 (set by law). Because of the cost, many plans will also set a minimum amount and restrict the number of loans any participant may have outstanding at any one time.

Loan payments are generally be deducted from payroll checks and, if the participant is married, they may need their spouse's to consent to the loan. Funds obtains from a loan are not subject to income tax or the 10% early withdrawal penalty. If the participant should terminate employment, often any unpaid loan will be distributed to them as income. The amount will then be subject to income tax and may also be subject to 10% withdrawal penalty. A loan can't be rollover into an IRA.

There are generally four reasons given to avoid 401k loans if possible: * Lower investment return. According to the General Accounting Office, the interest rate you pay yourself on your plan loan is often less than the rate your plan funds would have otherwise earned, and you lose the benefits of compound interest. * Smaller contributions. Because you now have a loan payment, you may be tempted to reduce the amount you are contributing to the plan and thus reduce your long-term balance. * If you quit working or change jobs, you must pay back the loan right away.

It's not uncommon for plans to require full repayment of a loan within 60 days of termination of employment. If you don't repay, the loan is considered defaulted, and you are taxed on the outstanding balance, including excise taxes in many cases. * Repayment of principal and interest is made with after-tax dollars. By contrast, a home equity loan from a bank is often structured so that the interest you pay is tax-deductible. On a larger loan, this could add up to significant savings.

Go to www.401khelpcenter.com for more information on this and other 401k issues..

They are designed to help take control of health care expenses with a tax-favored savings account and a high deductible health insurance plan. Money in the savings account helps pay the deductible and health expenses until the insurance benefits kick in. The funds left unspent in the HSA remain in the account and accumulate earnings tax free. In the same fashion as an IRA, one can build tax-sheltered nest eggs; in this case, to cover out-of-pocket medical costs.High Deductible Health Insurance is needed to get the benefits of an HSA. The law requires that the savings account be combined with high deductible health insurance.

The minimum high deductible for an individual is $1,000 and $2,000 for a family. The deductible chosen can be higher than those amounts, which would provide an even greater tax deduction. In 2004, an individual can shelter up to $2,600 and a family up to $5,150. An additional $500 contribution for 2004 is allowed for taxpayers 55 and older. Because the insurance company doesn't have to process and pay claims for routine, low-dollar medical care high deductible health insurance costs less than traditional $250 or $500 deductible coverage.Contributions to the HSA are with pre-tax dollars, a tax deduction right off the top of income.

Any investment growth and withdrawals for health-related expenses are free from taxation. That makes the tax benefits better than those of an IRA. With IRAs, the money is taxed either before it goes into the account or can be taxed if withdrawn prior to age 59-1/2. A typical scenario for someone purchasing an individual policy: A 50 year old male with a spouse and dependent children purchases a health insurance policy with no deductible and a $45 office visit co-pay for doctors' office visits for a premium of about $600 per month. By choosing to open a Health Savings Account and opting for a high deductible of $5,000 the monthly premium might drop to $375.

The savings in premium of $225 would then be put into the HSA on a monthly basis accumulating to $2,700 by the end of 12 months. An additional amount of $2,300 could be contributed for a maximum deduction of $5,000 from taxes and a nest egg of that amount from which to pay medical expenses.Even if medical expenses equaled $1,000 per year, $4,000 would remain in the account. The next year, another total contribution of $5,000 would be added bringing the account to $9,000 without counting tax free earnings or taking out expenses. Even if the family has and average of $1,500 per year in medical bills, the account would still have a year end value of at least $3,500 per year. At a normal retirement age of 65, those dollars would add up over 15 years to a total of $52,500 not including the tax free earnings compounding in the account.

At a 2% interest rate, total account accumulation would be $60,526.As an additional protection for later years, the HSA allows, in addition to medical expenses, the payment of premiums for Long-Term Care insurance.The HSA is not just for individuals. Employers may offer them in conjunction with a high deductible plan. The contributions made by both the employer and employee are tax deductible. They also have particular appeal to smaller, family-owned and operated businesses, and groups of highly compensated professionals such as attorneys and physicians, groups in which employees share in health insurance premiums, partners or shareholders in a Subchapter S Corporation and in groups where employees have different needs.High deductible insurance plans are going to be a dominant force in the health insurance market as a way to stem the tide of double digit insurance premium increases. The HSA is an opportunity to take control of health care costs both for individuals and employers.

It encourages accountability, responsibility and consumerism with regard to health care purchases.? March, 2004.

HRAs are typically paired with a high-deductible health plan and are employer-funded Section 105 defined contribution plans. HSAs are the latest version of consumer directed health care plans. The core components of HSAs include a high deductible insurance product and a cash spending account. HSAs combine the pre-tax treatment of a FSA, the portability and roll-over characteristics of a 401(k), and the tax-free distributions of a Roth IRA.One of the main goals of any consumer directed health plan should be to get the consumer more involved in both the cost and statistical outcomes of certain healthcare procedures. Informed healthcare consumers will make wise healthcare decisions and typically these decisions will result in both lower costs and improved quality.Although the advantages of HRAs and HSAs can be substantial, employers will want to do their homework prior to setting them up.

Effective implementation will require a clear understanding of the consumer directed healthcare plan that best fits your organization as well as the administrative requirements. Employee education will be essential. Companies will also need to look into how the creation of a HSA or HRA may affect their HIPAA medical privacy compliance requirements.Just like most endeavors, the successful implementation of a HSA or HRA will greatly depend on how much research your organization does on the pro's and con's of each alternative. The type of consumer directed health plan that best fits your company will depend on a combination of your corporate structure as well as the overall objectives of your group health insurance plan.Although consumer directed healthcare plans are becoming very familiar to human resource managers and other benefit professionals, remember that your employees and their dependents will need a substantial amount of education and communication..

after becoming an orphan, leads an obscure band that only a few in his homeland know exists. He acquires vast resources and, with his companions, he attempts to redress crimes that both sides commit. As the story unfolds, one sees that Rory is not simply a vigilante. He has a larger purpose, one that he seeks to fulfill through his fortuitous association with Nealen McGowen, a young congressional staffer with equal fervor. While Rory returns to Ireland to inflict his various forms of retribution, Nealen ascends to fill his bosss seat.

As Nealens fixation on the troubles haunts him, he conspires with Rory to bring the conflict to America. His goal... to stir the passion of Irish-Americans and to get the U.S. involved.A fast moving fictional tale about the futility of revenge, The Provisional American Faction takes the reader through a sequence of obsession, aggression, retribution, closure, and ultimately, peace. In the words of one reader, This book is not only a great read, but also offers an interesting perspective on the Irish troubles.

The author captures the frustration of members of a younger generation sickened by the seemingly never ending cycle of violence... It is an intriguing story with strong characters. It has been well-researched with careful attention to detail on both sides of the Atlantic, including a fictional (but believable) explanation for a never-solved bombing at the U.S. Capitol. The author knows the Washington DC scene and knows how to tell a good story.Links to Publication: Lulu (www.lulu.com), the world's fastest-growing provider of print-on-demand books.

http://www.lulu.com/content/189918http://www.amazon.com/gp/product/1411672992/sr=8-1/qid=1142344904/ref=pd_bbs_1/102-8013246-9272168?%5Fencoding=UTF8ABOUT AUTHORDavid Koitz is a private consultant in the D.C. area. Over a long career as an analyst on Capitol Hill, he assisted many members of Congress and various congressional committees on a number of public policy issues. This is his first novel. Born in Springfield, Massachusetts, he attended the University of Massachusetts and The American University and currently lives with his family in Bethesda, Maryland..

What does your retirement pot of gold look like when the "usual return" falls behind and you run out of decades to catch up?From mid-1997 to mid-2002 the SPX was flat. From 1998 to 2003, SPX investors lost money. Ditto 1999-2004.Break down the expected 11% return into 5-year periods. An index investor expects to bring in 70% or more every five years, depending on how often the gains are reinvested. The problem with compounding is how quickly you can fall behind.

SPX investors who put in money from 1998-2001 didn't make money. Surely they can make that up later, right?Don't be so sure. A tax-free portfolio that starts with $100 and returns 11% annually should have $111 after one year, $123 after two, $136 after three years and $152 after four. Five years later it's $168.Think about the leap ? if you end up flat the first three years, your portfolio has to rack up a 52% gain to get back on track by year four. Has the SPX returned 50% in one year in our lifetimes? Not that I can find.

Forget about a 68% banner year.The compounding you need to achieve the magic 11% is fragile indeed. If your portfolio is flat for five years and returns to the 11% norm the next five years, the 183% you should have earned for the preceding decade only turns out to be 68%. Your fifteen-year return is 183% instead of the 378% you expected.To catch up, you need a quick five-year annualized return more like 23%. Today's SPX would have to reach 3200 to meet that goal ? and the all-time high is only 1552. Plus you have to exercise perfect discipline and never try to time the market swings yourself.

Fat chance. Dollar-cost-averaging in your IRA or 401K (buying more index fund shares every month) might smooth out the bumps, but the fundamental problem remains.Since I took over my own portfolio full-time in 1998, I did two important things right (and dozens and dozens of things wrong, fewer each year I hope): I took advantage of the fat years in 1999 and 2003 to rack up 150% and 99% returns. And my net returns for all the other years were flat. Up or down a few percent, but no big annual losses. Ever.

When the markets went into freefall, I stayed mostly with value stocks and survived.Let me shout to get your attention ? FOR LONG-TERM RETURNS THAT REALLY MAKE YOU WEALTHY, YOU HAVE TO BEAT THE MARKETS YEAR IN AND YEAR OUT. Not just match what the rest of the herd gets.You have to do what the experts say can't be done. Of course, if you listen carefully you find that they are really saying that most managers and individual investors DON'T beat the market, not that it can't be done.Hundreds of millions of people invest in stocks worldwide. If only a relative handful ever do better than the markets, that's still several million. No reason you can't be one of them.All it takes is curiosity.

And time. And effort.You have to be curious enough to go looking for the best stocks, the best funds or the best manager you can find to manage your retirement portfolio. You have to read more than the headlines in the financial press, and have some idea where the broad market trends are going.Most of all, you have to accept that in your lifetime, the market may not just hand you a fat return for nothing. You will have to earn it. The good news is that there is always a way to do better.If you don't fall behind the curve..

You put the maximum amount in if you (or your spouse) are not covered at any time during the tax year by a retirement plan, including a 401(k) account, at work. If you can't afford to save the maximum then just do the best that you can.If you are single or a head-of-household taxpayer with annual adjusted gross income (AGI) between $40,000 and $50,000 and are eligible for a company retirement plan, your deduction will be reduced. Deductions are also limited for married couples filing jointly or qualifying widows or widowers who earn from $60,000 to $70,000 per year. Even if you don't have a retirement plan at work, your deduction may be limited if your spouse, with whom you file a joint return, has a company pension plan. In this case, your deduction will be reduced if your joint income is between $150,000 and $160,000.

No deduction is allowed if your AGI exceeds $160,000. If you have a non-working spouse, he or she can contribute up to $3,000 ($3,500 if 50 or older) to an IRA also as long as the two of you together make at least as much in annual income as you contribute. As I said before profits and income from investments are not taxed until you retire and begin withdrawing funds. You can pay capital gains taxes on you stock market profits and then withdraw funds, without penalty, after you reach age 59?. If you take out money before then, you usually will face a 10 percent penalty, plus taxes on the withdrawn amount.

Under certain circumstances, you can take penalty-free distributions before age 59?. In the year that you will turn 70? you can no longer make contributions to your account. In fact, at that age you must start withdrawing money from the traditional IRA or face additional penalties. This account is ideal for individuals in high tax brackets who cannot open or contribute to a Roth IRA and anticipate facing a lower tax bracket upon retirement. In other words, if you earn a lot of money now, pay a lot of taxes, can open a standard Roth IRA, and take the full deduction when you contribute then this account may be good for you.

This is especially true if you anticipate low income in your retirement years such that you will also be in a lower tax bracket..