Easy Change

Here's a neat idea. If you are a bit low on cash for Christmas shopping, something that some family members might really enjoy is a mix cd of music. Here's the idea - if these friends and family are really into music, then it is likely that this will be something that they would enjoy. Up until now, most music had to be purchased in the store on a CD or downloaded using a napster-like subscription-based service or a pay-per-song method like the ITunes website. SpiralFrog is changing all of that. It appears that all of the Universal Music catalog will be available for free, advertising-supported, download via their site starting in December of this year. This would provide a great way to try-before-you-buy and perhaps even use the music to create gift CDs for friends and family in time for christmas. What a nice way to give something personal, but without spending money. And it is all done without stealing music through some shady website or peer-to-peer file trading system or ...

Over the past several weeks I have been separating out my expenses into two categories: escapable v.s. inescapable. The concept that I had in my brain in the beginning was rather abstract. But after reading the book "Rich Dad, Poor Dad", the concept became much clearer. My thinking is simple: in life there are expenses. There is no way around it. You have to eat. You need to have someplace to live. These are two examples of expenses that you will be incurring no matter what your lifestyle is. And you will be paying for some things until you die. Taxes are another expense like this. It never occurred to me how often people overlook this one. But, like the adage advises us, there's no escaping death or taxes. So this train of thought brings me to the question. If I have to eat, live somewhere, and pay taxes, What are the other kinds of expenses? The escapable ones! So, after a bit of thought, I was able to make a list of escapable expenses: Credit Card Student Loans Car Loa...

If you follow my blog, you will know that I was expecting that there would be some kind of settlement in my father's divorce whereby I might become the custodian of some money to be set aside for my now four-year-old brother when he gets older. It has been interesting so far in trying to determine what the next step is going to be if that money comes in. However, the point might be moot since it is unlikely that there is going to be any money that actually comes out of the divorce settlement for him anyways. But, in my world, better safe than sorry when it comes to stuff like this so I went on the net and found out a couple of interesting things. One of the key items when it comes to managing money for a minor is the age of majority. This is different in every state, but in this case, in massachusetts, it seems to be eighteen from what I've read. Assuming that this is the case, whatever I do with the money, whether it be invested or placed in another kind of account, it would b...

If you follow financial news, you are noticing that there is tremendous focus lately on inflation and the potential impact on our economy. The fact is, with gas prices increasing and other items' prices increasing, real inflation is higher now than it has been in recent years. And (almost) everyone is starting to feel the pinch. What many people are not considering with regard to inflation is the fact that the rich are not getting hurt by it nearly as much as the average person. Most of us have under 500K in total assets. People with fewer assets are accumulating less wealth than the people who have more substantial sums. In simple terms, rich people can afford the inflation. If inflation increases from 3% to 4%, the power of the assets that are accumulated by everyone does decreases. However, the rich don't worry about it. If they have 1 million dollars, each year, if it were invested in the stock market, these people have approximately 100k in income. This 1% increase means...

Almost everyone wishes at one point or another that they could get more done, or feels that there is not enough time in the day. Perhaps this is more of a sentiment in the Northeast part of the US or closer to major cities, but I think that it is still a topic worthy of consideration. Write It Down One of the major items that I have started doing over the past year is not procrastinating about developing my ideas. In some ways, I often find that my brain is somewhat of a wanderer. That is, when I am trying to work on a particular project, my brain will often consider other ideas. It is this "creative" energy and thought that is often the inspiration for most of my great work. The problem, for me at least, is that my left brain wants to stay on task. So, instead of taking that energy and capturing it and the ideas with it, I often lost it by staying focused on the task at hand. Focus on What's Interesting Since my mind was clearly more interested in the creative idea I was...

Minimum wages were recently increased in Massachusetts. The increase was passed by a democratic majority legislature. And yet again, in my opinion, this will decrease the amounts of money available for the middle class but not actually help the poor. Read the article from the Boston Globe about it here Often times, people think that more money is the solution. In fact, there is even a federal movement linking a reduction in Estate Tax to minimum wage increases. Linda Basch writes an interesting opinion article on this topic for those interested. But since this is my blog, I am worried about myself first. And what I can see is the following: As those with a lower wage get a hike of anywhere from 15-20% over the next two years, I will likely only get a total of about 6%. Granted, my salary is not close to minimum wage, but the strict size of the increase isn't all that worries me. It is the impact on prices. Prices are already in sky-high. Some say this is due to oil prices. And som...

You might love the debt you have on your student loans. Financial Planners generally like it too. It's for a good cause. It's cheap. And it's usually tax deductible. Now here's the kicker: many students don't actually get to deduct their student loan interest. Now you are probably screaming at the computer! What am I talking about? When many people file taxes, they are not actually taking advantage of the student loan interest deduction. What do I mean? Well in many cases, people pay their student loans on-time frequently and are not able to deduct them as part of their taxes. This is because when deductions are calculated for tax purposes, many people (especially young, recent graduates) do not itemize their deductions. And this is smart; here's why: In general, each year there is a generic amount of money as a standard set by the government in order to make life easier on taxpayers. So, instead of tracking deductible expenses throughout the year, most people s...

It seems pretty basic, but I'm surprised at how few people really think about it. In fact when I was in college, these ideas were not real to me at all. My grandfather tried to teach me the concept, but I never really grasped it. He said, "life is about managing risks." But I don't think that quite captures it. (Sorry, Papa.) Rather it isn't really just risk, its choices. Choices and wealth are directly and constantly related. Some fake examples relating choices to wealth 1. Parents choose to spend large amounts of money on their kid's education. As a result, the kid, Jeff, takes better classes and lands a better job and makes more money than would have been made otherwise. [Good Choice = more wealth] 2. While the Jeff is at college, he decided to skip out of some key activities and therefore had less exposure to important ideas from his classes. This lost knowledge kept him behind a co-worker (Jane) and he did not get a promotion and raise as fast as his co-w...

Not too long ago, I realized that the strategy was fairly simple for getting a handle on saving and cashflow. While earning extra income is not always easy, I realized that lowering my debt was the easier of the two to do. So, the key is to lower my standard of living and become accustomed to it. I've changed the following and it has made a big difference: - I eat at home more frequently. - I use my TiVo to record as much T.V. as I want to watch. - I bring lunch to work more. (Lean Cuisines at 3-3.50 each is about 1/2 the price of a take-out lunch at most places.) - I drive less and take public transit more. This has really cut down on gas costs. - I spend less on throwaway entertainment (trips to amusement parks, movies) and opt for permanent, reusable entertainment options (computer games, dvds, an Ipod, a TiVo (subscription paid up-front)) and healthy activities (like tennis or walking outside). - I buy a morning coffee far less, opting to make coffee at work. Instant coffee is ...