Dads Daughters and Dollars

True or False-To open an IRA you need to have earned income. False.One exception to the rule -A spousal IRA lets couples save for retirement even if only one spouse works and has earned income.

History

The IRA became law in !974 under the Employee Retirement Income Security Act.The IRA initially allowed workers to save for retirement and take a tax-deduction for their contribution. But there was a catch. In order to open and fund an IRA each individual must have earned income.However, married women who were stay-at-home moms in 1974 weren’t considered “working.” Therefore, they were prohibited from saving for their own retirement.  Finally in 1996, after several women senators fought to have homemakers be able to save the same full amount, the Spousal IRA became law.

What is a spousal IRA?

A spousal IRA is an individual retirement account to which a working spouse contributes to an IRA on behalf of a non working spouse who earns little or no income.By spouse I mean a married couple and that includes same sex married couples.  It can be a regular IRA or a Roth IRA.  So this is the exception to the rule that a person must have earned income in order to contribute to an IRA. 

How spousal IRAs work

Spousal IRAs are just a typical IRA, but used by a person who's married. That is, each spouse can use traditional or Roth IRAs, or both. The key is that the working spouse must earn at least as much money as is contributed to all of the couple’s IRAs. 

Example 

Say one spouse, Vicki, is a CPA and makes $150,000 a year. Her husband, Kevin, stays at home with their 2 children ages 2 and 4. Vicki, working spouse can contribute to her regular or Roth IRA, up to $6500 as of 2023, and can also contribute $6500 to Kevin’s regular or Roth IRA. If either is over age 50, they can contribute $7500 each to either their regular or Roth IRA.  In our example , Vicki needs to earn over $13,000 to contribute $6500 to her IRA and $6500 to her husband’s IRA. She makes $150,000 a year so no problem. Vicki could easily contribute $7500 to each account if they were over age 50. 

Spousal IRA rules to consider

Why do I bring up IRA’s and Roth IRA’s a lot? 

1)In 2021, only 15% of US households that could contribute to an IRA did NOT contribute to an IRA or Roth IRA.  

2)The #1 thing people regret at age 65 was not saving for retirement sooner. 

Link to Ep.107: Why My Dad Wants To Marry Roth IRA's

https://www.dadsdaughtersanddollars.com/podcast-financial-independence/episode/1e08ea10/ep-107-why-my-dad-wants-to-marry-roth-iras

BEFORE YOU GO ON YOUR TRIP

-PUT IN YOUR PHONE-The closest State Dept phone number of your destination. ALSO PUT IN YOUR PHONE  The U.S. Department of State's Office of Overseas Citizens Services (888) 407-4747 (or from overseas +1 202-501-4444) can assist U.S. citizens who are temporarily destitute abroad.

-THINGS TO BRING-Bring a color photocopy of the picture page of your passport overseas. Also, snap a picture of your passport to have on your phone. 0r 1 of the following items. A photocopy of your birth certificate or an expired passport can be used as proof of identity and proof of citizenship all in one.

WHAT TO DO IF YOUR PASSPORT IS LOST OR STOLEN 

 1. Report loss or theft to US Authorities   DS-64 forms-Statement of Valid Lost or Stolen US Passport. Form Questions-Explain in detail when your valid US passport was lost or stolen. Explain where the loss or theft occurred. Explain what date the loss or theft occurred. https://travel.state.gov/content/travel/en/passports/have-passport/lost-stolen.html   Once you have reported your passport lost or stolen, the State Department invalidates it. You cannot use it if you find it. 

2. Apply for a replacement   GO TO THE US EMBASSY NEAR YOU. Most U.S. embassies and consulates cannot issue passports on weekends or holidays. I noticed in France that applications for emergency passports are on a walk-in basis ONLY from 8a-9a Monday through Friday at the Paris State Dept.  Once you get to the embassy you have to fill out DS-11 form- Application for a US Passport. Provide a birth certificate or photocopy of a birth certificate. Or hospital birth records or published birth announcements like a newspaper article. Proof of identity-Driver's license. Previous passport.   2 x 2 passport photo taken less than 6 months ago. No eyeglasses, no head coverings, no uniforms. Plain white or off white background. The State Dept can help you with this. I take a passport photo on my phone. If you have urgent travel plans, the State Dept. can issue a limited-validity, emergency passport that can be produced more quickly to allow you to return to the U.S. or continue on your trip. Once you return home, you can turn in your emergency passport and receive a full-validity passport. By the way, when you get a new passport it will have a NEW NUMBER!

https://travel.state.gov/content/travel/en/passports/need-passport/apply-in-person.html

3. Pay up

As of this date the cost of a replacement passport is $130.

The good news is that if you had Global Entry linked with your old passport, you will not need to apply and pay for the program again. Simply log in to the Global Entry system to update it with your new passport number when you receive it. 

4. Check your travel protection benefits

Travel insurance might also help in covering flight change fees or additional expenses, especially if a police report can show that a passport was stolen and not just misplaced. This type of travel protection comes included the American Express® Green Card and the Chase Sapphire Preferred® Card and Chase Sapphire Reserve®.

BEFORE I LEFT ON VACATION

1)I Made sure our passports were current. I always put a reminder in my calendar 9 months before it expires to update it. 

2)I called and checked which credit cards had no foreign transaction fees. 

I put travel notices on the credit cards without foreign transaction fees and only used those cards. Everything else stayed home. 

Link to no foreign transaction fee credit cards, https://www.cardratings.com/bestcards/no-foreign-transaction-fee.php?

3)Set up a family discussion in What’s app. Free texting, audio and video phone calls provided you have WiFi.

4)I registered with STEP (Smart Traveler Enrollment Program)

The Smart Traveler Enrollment Program (STEP) is a free service to allow U.S. citizens and nationals traveling and living abroad to enroll their trip with the nearest U.S. Embassy or Consulate. Receive important information from the Embassy about safety conditions in your destination country, helping you make informed decisions about your travel plans. Help family and friends get in touch with you in an emergency. I will link to the STEP Program. https://travel.state.gov/content/travel/en/international-travel/before-you-go/step.html

5)Pack an extension cord & an International Travel Plug Adapter. Conversion plugs for electricity. 

SAUNORCH Universal International Travel Power Adapter W/High Speed 2.4A USB, 3.0A Type-C Wall Charger, European Adapter, Worldwide AC Outlet Plugs Adapters for Europe, UK, US, AU, Asia-Black

6)I updated Google Translate & iTranslate on my phone

-I called T-Mobile to ask about texting, calls, internet

7)I updated Wi-Fi Map. Gives free WiFi wherever I am in the world.  

8)Made sure the default credit cards on Uber and Lyft were no foreign transaction credit cards. 

9)Turning off cellular data in Facetime and using only WiFi.

The good news is that you don’t have to stop using FaceTime. Have WiFi, you have Facetime.

STOCKHOLM MONEY

Money is in Krona (100 Krona=$9.33) many businesses, matter fact, most businesses only accept credit cards, not money. 

Conversion Table for Swedish Krona to US Dollars

https://www.unitconverters.net/currency/sek-to-usd.htm

WE RECOMMEND

Nobel Prize Museum

Vasa Museum

ABBA Museum

Fotografiska-The Contemporary Museum of Photography, Art and Culture

Burgers and Beer had an amazing vegan burger

Panem-Best pancakes in the World

All of the cafes on the water

Royal Palace

Hop On Hop Off Boat Tour https://www.stromma.com/en-se/stockholm/sightseeing/sightseeing-by-boat/hop-on-hop-off-boat/

Hop On Hop Off Bus Tour- Buy tickets online is best. Supposedly have people selling at each stop but NOT TRUE. Doesn’t say Hop On Hop Off at every bus stop that it stops at. Free Headphones on the bus. 11 languages. https://www.stromma.com/en-se/stockholm/sightseeing/sightseeing-by-bus/hop-on-hop-off/?

TOTAL FOR FINLAND & SWEDEN $6767   2 People, 15 days, Housing, food, entertainment. 12,200 miles round trip per person

Treat yourself and visit both Helsinki Finland and Stockholm Sweden!!

WE WELCOME THE PHILIPPINES & LATVIA NOW FOLLOWING DADS DAUGHTERS DOLLARS!!!

BEFORE I LEFT ON VACATION

1)I Made sure our passports were current. I always put a reminder in my calendar 9 months before it expires to update it. 

2)I called and checked which credit cards had no foreign transaction fees. 

I put travel notices on the credit cards without foreign transaction fees and only used those cards. Everything else stayed home. 

Link to no foreign transaction fee credit cards, https://www.cardratings.com/bestcards/no-foreign-transaction-fee.php?

3)Set up a family discussion in What’s app. Free texting, audio and video phone calls provided you have WiFi.

4)I registered with STEP (Smart Traveler Enrollment Program)

The Smart Traveler Enrollment Program (STEP) is a free service to allow U.S. citizens and nationals traveling and living abroad to enroll their trip with the nearest U.S. Embassy or Consulate. Receive important information from the Embassy about safety conditions in your destination country, helping you make informed decisions about your travel plans. Help family and friends get in touch with you in an emergency. I will link to the STEP Program. https://travel.state.gov/content/travel/en/international-travel/before-you-go/step.html

5)Pack an extension cord & an International Travel Plug Adapter. Conversion plugs for electricity. 

SAUNORCH Universal International Travel Power Adapter W/High Speed 2.4A USB, 3.0A Type-C Wall Charger, European Adapter, Worldwide AC Outlet Plugs Adapters for Europe, UK, US, AU, Asia-Black

6)I updated Google Translate & iTranslate on my phone

7)I updated Wi-Fi Map. Gives free WiFi wherever I am in the world.  

8)Made sure the default credit cards on Uber were no foreign transaction credit cards. Lyft as of this date (July 2023)doesn’t work in Europe. 

9)Turning off cellular data in Facetime and using only WiFi.

The good news is that you don’t have to stop using FaceTime. Have WiFi, you have Facetime.

ABOUT FINLAND     

Finland’s currency is in Euros . I don't buy Euros in advance. Why? Most banks charge terrible inflated rates to convert dollars to Euros, so those Euros will be overpriced. I get Euros after I land. TRUTH IS DIDN’T NEED EUROS IN FINLAND. CAN USE CREDIT CARD FOR EVERYTHING. I usually check where I can get Euros at either the airport or near the hotel. 

Currency Converter link for converting Euros to US Dollars

https://www.xe.com/currencyconverter/convert/?Amount=1&From=EUR&To=USD

WE RECOMMEND

Walking the cobblestone streets-I’m a huge fan of Old Town in Europe. 

Central Market or Market Square- Next to the Presidential Palace.It is an outdoor market selling food, coffee, fruits, vegetables, arts and crafts, Finnish souvenirs from local artists.

Old Market Hall- Indoor market of merchants -bakers, delis, cafés, cheese shops, butchers, chocolatiers and liquor shops.

Helsinki by boat -about an hour hhttps://www.stromma.com/en-fi/helsinki/sightseeing/combination-tours/bus-boat/

Esplanade Park-Green space right in the middle of the city where tourists and Helsinki residents come to picnics, relax and listen to music.

Senate Square

Flying over Helsinki/Finland-22 Euros.  https://flyingcinematour.com/

TOTAL FOR FINLAND $3058   2 People, 7 days, Housing, food, entertainment.

General Travel stuff

I travel only with Carry on & a backpack. Carry on is usually 2/3rds full. 

Rick Steves, travel guide for 30 years recommends the same thing. He recommends bringing a collapsible vinyl duffle bag that you can bring stuff back in. Maybe only pay for a bag on the return trip. If going a long distance like 7 hours or more, most airlines will include a checked bag for free. Wash clothes on the 6th or 7th day. I check which hotels have laundry or is there a laundry near my hotel before booking.

WE WELCOME THESE NEW COUNTRIES NOW FOLLOWING DADS DAUGHTERS DOLLARS-Poland, Republic of Lithuania and Switzerland.

We welcome back Katelyn before she heads off to New Zealand for the 2023 Women's World Cup. We also welcome our 28th country , Taiwan!

In this episode we discuss whether your house is a good investment. JL Collins and various other personal finance experts say a home is not a great investment. When compared to the stock market, in general, your house will not return as much over the long term as the stock market will they claim.

EXAMPLE-OUR HOUSE VS. THE STOCK MARKET

Bought our house in 1990 for $209,000 dollars. We put down 45,000 and held a mortgage of $164,000.  We paid it off in 22 years.

If I had invested $209,000 in the total stock market index fund for 33 years because it is now 2023, and I got a 9.3% return (which is the average), I would have $3,931,982.92.

According to Zillow I could sell our house right now for $902,500. That is a lot less than 3,931,982.92. We had various mortgage rates throughout the years because of refinancing and recasting (We refinanced 3 times) but if I approximate a 5.75% average mortgage rate for 22 years, that means I paid approximately 606,063.64 for our house. I came up with that figure by adding $45,000 down and $164,000 remaining balance compounded at 5.75% for 22 years. So I  added

$45,000 down and $561,063.64 (the compounding) and it came to $606,063.64.

That means over time I made approximately a $300,000 profit over 33 years. I could have made $3,931,982.99 investing the $209,000 for 33 years versus a $300,000 profit owning a home over 33 years.  Was JL Collins right? 

The difference is $3,600,000.00 more by being in the stock market. 

THE PROBLEM WITH THIS ARGUMENT

1)I never think of a house as an investment. It is a place to create memories, raise a family, meet new neighbors and friends, and have a sense of stability in our crazy world. Especially as a freelancer. 

2)I didn't have $209,000 to just put in the stock market 33 years ago. Who does?

3) I have housing for the rest of my life that doesn't cost me anything with the exception of property taxes, utilities and minor maintenance.

4)I would have been paying rising rent for 33 years, that is money I would never see back. And when you are a senior citizen living on a fixed income who wants the stress of rising rent? 

5)At least I have made a $300,000 profit so far which will go up if we live here another 35 years. And that profit will probably be $100,000-$150,000 more with write offs if we sell sooner. 

6)We have a house the to leave Katelyn which could mean giving her more than a million dollars which is a cool legacy. 

Enjoy!

In this popular travel episode, we discuss the pros and cons of trying to do 8 days and 7 nights in Portugal for under $1500. Why the words "Operated By" and "Code Share" give me PTSD and how the people and city of Lisbon are incredibly nice.  Here are links to some of the hacks used during this trip.  Smart Traveler Enrollment Program- Every US citizen should use this when traveling abroad. https://step.state.gov/ Wi Fi Map   https://www.wifimap.io/ Google Translate  https://translate.google.com/intl/en/about/ iTranslate  https://itranslate.com/ Using Facetime only with Wi Fi   https://blog.rottenwifi.com/facetime-over-wifi/

We discuss how to figure your net worth and where you should be at certain ages to be on track. Reviewing your Net Worth over time can help you determine where you are AND how to get where you want to be. Net Worth Calculator   https://www.harnesswealth.com/net-worth-calculator/ Net Worth By Age Calculator  https://www.youtube.com/watch?v=44ddtR0XDVU Article about net worth   https://www.personalcapital.com/blog/investing-markets/average-net-worth-by-age/

My Dad has always said he believes everyone can handle their finances with a little intellectual curiosity. In this Part 1, he reveals two of the people he follows and hopes they inspire you to check out their work. Take 10-15 minutes 3 times a week and educate yourself!

During this episode, we discuss how credit cards are a borrowing device and how paying off your balance 100% is a smart move.

In this BEST OF EPISODE, my Dad explains what inflation is, why we should expect it and why it isn't necessarily bad for your investments.