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Weekend Edition – Excuses, Excuses

If you're like me and have had conversations with individuals about money, or the lack thereof, you've probably heard a lot of different reasons (excuses) why people are unable turn the corner financially.

As human beings, our tendency is to try and rationalize disappointments. We also like to escape blame. "If only things had gone this way instead," or "I just need to give it more time." In reality, the initial decisions that lead to our disappointments in life are often based on poor judgment. As a parent, I try to stress the importance of using good judgement to my kids as their life decisions become increasingly crucial. In my own professional and personal life, I too try never to overlook the major factors that lead to my decisions.

Investors mistakenly use the word "hope" when describing their investments at times. In many cases, hope can turn into despair for those whose portfolios are not prepared for any approaching storms. No investment should be based on hope. Do your homework and have conviction that you've made the right decision. Then stay on top of your portfolio! One last thing on hope, one of my favorite movie lines was said by Morgan Freeman in "The Shawshank Redemption" - "Hope Can Drive a Man Insane". The other memorable line from that movie is a message we all need to remember every once in a while and that was uttered by Tim Robbins and Morgan Freeman (at the end of the movie) - "Get Busy Living or Get Busy Dying". Great movie if you haven't seen it!

Nobody's perfect, but making excuses will not leave you in a good position to weather any potential damage you may be facing. Whether it's in your investing or other aspects of your financial life, it's always better to analyze what went wrong and make sure you don't repeat the same mistakes again.

Pensions Do Have Risks

Most of you have probably heard about the recent AMR Corp (American Airlines) ( AMR ) bankruptcy filing. One of the largest airline names here in the U.S. joins a long list of past airline bankruptcies (a whopping 100 airlines have filed bankruptcy since 1990 according to CBS Marketwatch). The news you may not have heard about pertains to the risks to existing AMR pensioners.

According to the Pension Benefit Guaranty Corp, AMR's pension plans cover almost 130,000 participants, but collectively had just $8.3 billion in assets to cover about $18.5 billion in benefits. Those familiar with the situation believe a reduction in pension benefits is almost a given at this point. How severe the cuts will be remains to be seen.

This news certainly isn't welcome to those AMR employees who were counting those funds for their retirement years. At Dividend.com, we often talk about keeping the "pedal to the medal" as long as you can by remaining in the work force. This move allows those who have gotten a late start on saving/investing to put more money to work for a bit longer. It also prevents them from drawing down on funds before they really have to. The more money you can put to work in income-producing assets like dividend-paying stocks, the better.

A recent report from MetLife Foundation and Civic Ventures estimated that 9 million older workers, or about 9% percent of all people ages 44 to 70, are already in "encore careers," up from 8.4 million in 2008. Of course, you don't have to find a completely new career, but you should at least research everything you can about your particular industry. Keep acquiring new skills that are coming in demand - that will help you keep as firm a grip as you can on your job.

Above all else, don't let yourself be blindsided by industry trend shifts that can leave you vulnerable as you approach your key earning years!

End-of-Year Financial Moves

Don't forget as we wind up 2011, some of you may not have addressed a couple of retirement fund building exercises that you may want to circle back around to. Anyone who has a 401K and has not maxed out the $16,500 contribution limit may want to act in the next few weeks before the 2011 window closes. If you are 50 or older you can add an additional $5,500 to that amount, making your contribution total $22K for the year. Also, don't overlook a Roth IRA contribution (even though you technically have until April, 2012 to make one). The contribution limit is $5K, but if you are 50 or older, you can make a contribution of $6K to your Roth IRA account. Both retirement savings options should be part of your wealth building strategy if possible.

If you are self-employed, you have the benefit of building a retirement nest egg very quickly with a SEP-IRA. A simplified employee pension plan, or SEP, is a plan in which employers may contribute to the retirement accounts of their employees, as well as setting up a SEP-IRA for themselves. If you're self-employed, you can contribute 25% of your earned income or $49,000, whichever is less, to a SEP plan for 2011.

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An Important Note Regarding the Best Dividend Stocks List

We want to make sure everyone understands that the stocks on our Best Dividend Stocks List are the names we currently like for new investor capital, regardless of what date the stock was first recommended on. If and when a stock is removed from the list, we will clearly state whether the stock should be sold (which is rare but occasionally will happen), or simply held in one's account until we see a better entry point or catalyst.

And here's one last thing to remember about what we do here at Dividend.com. It's not just the names that we recommend that can help you build wealth, but also the things we try to steer you away from that are just as important. Forget about speculative or penny stocks, chasing unprofitable IPOs, and listening to the manic talking heads in the business media!

Thank you for sharing part of your weekend with me, and please be sure to pass this post on to anyone you think we can get inspired and educated about money, building wealth, and using common sense to do so.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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