Easy Change

It still is amazing to me in this real estate market that things are still doing as well as they have been over the past few months (the last couple of down days in the market notwithstanding). Here's what I've been thinking about. The problem, as I see it, with many people is that they bought more than they can afford. Surely, if you can barely afford your 'monthly nut' when it comes to your mortgage, it is going to be a bad scene for you when other expenses creep in like increased property taxes or an accident or a sudden layoff or medical emergency. Regardless of the nature of the emergency, it is important to realize the importance of common sense when it comes to purchases. Remembering that the nature of our capitalist economy (which I happen to like, thank you very much) is that people are going to be making money during every transaction. If they aren't, they won't last long. When you buy a car, you get hit up by the sales guy for sales (commission) and t...

One of my pet peeves lately is the idea that the economy is doing so great because of the low inflation rate. Core Inflation is hovering around 2.2 percent and that is being heralded as great news with regard to the overall economy. The problem, as I see it though, is that the inflation that I feel in my monthly/yearly budget continues to increase at an alarming rate. As a simple exercise, I've been tracking all of my expenses for the past year and a half. My household food expenses were averaging somewhere around 200 dollars per month about 1.5 years ago. However, now, the average is often closer to 325 per month. This means that there is a significant increase in the price of food. This is about a 35% increase. Thankfully, food is not the big expense in my budget, but it is getting to be that way. If it continues to creep up at this level, by the end of 2008 I will have a monthly food budget of about 440 dollars per month. Unfortunately, I have not been tracking gas expenses, ...

Since I am relatively new to investing in plain stocks (my investing before this has been exclusively in mutual funds via my 401k retirement account), I have never encountered anything like this before: Today I received an email offering a purchase of my shares in HD. Granted, I don't own many shares of it so I have no intention of taking up this offer, but I still find it quite interesting that I've never really heard of this before.Here is a partial copy of the email I received. <snip> Below is information regarding a tender offer for your holdings in "HD".  This offer expires on 8/16/2007. THE HOME DEPOT, INC., A DELAWARE CORPORATION (THE "COMPANY," OR  "HOME DEPOT"), IS OFFERING TO PURCHASE AT A PRICE NOT GREATER THAN $44.00 PER SHARE NOR LESS THAN $39.00 PER SHARE, NET TO THE SELLER IN CASH, WITHOUT INTEREST (IN INCREMENTS  OF $0.25). </snip> The rest of the email is information explaining how to take...

I read... this story this morning about how the big shots in Washington are looking to change the way that taxes are handled for the managers of large hedge funds. I find it to be pretty interesting when you start thinking about it. Certainly it is tempting to simply say that since these people are rich, and they can afford it, lets tax the heck out of them. However, I think that this kind of thinking is a mistake. I studied Economics in college and found it fascinating since the beginning of my studies. But when I read this story, some major red flags popped out for me. If you take the tax break away, you certainly will be getting more income in the short term. However, my gut tells me that there will be a long period of lost money in the long run because less people will want to continue doing business since it is not as lucrative. This will ultimately result in less revenue. Furthermore, many of the ultra smart, ultra rich people will have smarter experts that will still find ways...

One of the interesting things that I've "figured out" over the past few months with regard to my debt repayment is the importance of paying early on daily compounded balances. I've been doing this myself over the past year and it really makes a difference. The first question for all of your debts should be "how is the interest compounded?" For many debts, the interest is calculated each month on a monthly basis. For others, it is calculated up front for the life of the loan and then factored into your payments. Prepaying effectively does nothing to save you money on interest. If however, you have credit cards, it is likely that you have a type of interest calculation that is called the average daily balance or two-cycle average daily balance method. If this is the case, paying off your balance earlier in the month can save you money. This tip is not about paying extra principal per se, although you obviously should do that. Instead, the tip is about how you...

I'm back off Dunkins. Well, sort of. Since things were going so well lately in terms of finances, I found myself getting a little bit too comfortable with my morning coffee routine. If you add it up, its about an extra 10-12 dollars per week that I was spending on my morning cuppa. Then in the afternoons, I might run down and get a starbucks as well. Another 6-8 bucks per week. All told, I was spending close to 20 dollars per week just on coffee or tea! This seemed ridiculous to me even without any of the latte factor hype. In the end, I've decided that I will try to switch back to my old ways of making coffee at work. I use the coffee-single "tea-bag" type coffee. Its not as good as Dunkins, that is for sure. But, I think that in the long run I will be happier knowing that I didn't waste 20 dollars a week on something that I really didn't need to have every day. I think that once I get rid of all my non-mortgage debt, I will be more relaxed about these th...

This weekend was quite nice for me. I was able to wrap up several projects and get some plans made for new ideas that I am working on. My goal is to generate enough extra income to get my loan (see my NCN chart on the right) down enough to be paid off around tax return time 2008. I reread Rich Dad last week and again, I found it inspiring. I think it is a great book for people who are looking for inspiration to be entrepreneurial. I'm not particularly fond of the real estate ideas in the book, though. But I think that is more of a personal preference than a statement about the ideas themselves. I started exercising again and I am happy to be able to return to that. If I can avoid straining any muscles like that ever again, I will be happy. The upside of not exercising was that I was able to catch up on my reading and I've been tearing through the Harry Potter books in anticipation of the movies. I am curious to see how they try to capture so much detail and action into a short...

Recently, I was totally shocked at the fact that the price of milk in my local supermarket went up over 4 dollars per gallon. Granted, it was a brand, not the generic (which still hung dangerously close around 3.80), but still this seemed crazy. And recently, I was calculating my budget and it appears that I was spending on average about 50 dollars per week on food. This seemed a little nuts. And this doesn't really even include the coffees and food that I buy outside of the office or home. This brought me to think about how much (in terms of cost), that I was eating. So, I have recounted all of the food I ate during a day in the not too distant past to give you an idea of what I am dealing with here. And I really have to confess that I don't eat as well as I should, all the time. But frankly, who can afford to eat right if 60 bucks a week barely gets me this...?  .33 corn 1.29 1/2 pesto sauce mix  .60 pasta  .20 olive oil  .50 milk 1.50 cereal  .05 fil...

Net Worth June has marked a serious improvement for net worth. Largely due to some unexpected income, It was possible to make a serious dent in a student loan. The remainder of this loan is sitting on a zero percent credit card for a few more months and large payments are now going to be directed at it in an attempt to pay it off before the end of the year. That may or may not be a reasonable goal, but I expect that it is. http://www.networthiq.com/people/easychange Business investments continue to do well. I'm satisfied with my paypal interest rate as well as the amount of savings that is now accumulated. I'm also happy with Prosper, of late. The total savings means that given a job loss that there is easily 6 months of expenses saved. This is a huge milestone in terms of emergency fund planning. Of course this will continue to go up and down, but knowing that there is a real cash cushion is something that everyone should be striving for in my opinion. New Thinking I'm r...

Well, I've hopefully given myself enough time off so that my body can heal. I started yesterday with extremely light exercise and I am planning on working my way back up. It has taken a huge amount of self-control to not do something for these past 10 days. I feel like I am missing out somehow by not doing anything really active. Today I am able to get out a little bit early and I plan to meet some friends this afternoon, but I will be using the time until then to work on some pet projects that have been brushed aside lately with the hope that they will eventually yield me some additional income. My consulting work has been rather slow, of late. And the my situation with side work may well be drawing to a close so it is critical for me to find additional sources of income in the near future so that I can continue my debt repayment. Again, this is not money needed for expenses, but only to continue accelerating my plan of getting out of debt fast. Additional Income Pain Originally ...