Wednesday, October 24, 2007

Wow, that’s awesome. How long did you save to be able to buy that?

I just read this entry (
http://www.iwillteachyoutoberich.com/blog/an-annoying-email-i-got )
over at I Will Teach You To Be Rich and I think that it is brilliant.
So many people I know never save up before they get luxury items. This
is a fundamental difference from those who are "into" personal finance
versus those who are not. The quote and concept and explanations that
Ramit points to here are the core of people who are serious about
personal finance and those who aren't.

Over the past two years I've become quite addicted to personal
finance. I really like knowing where all my money is going, and what
it is up to. Did it stay out past it's curfew, is it getting into
trouble with the neighbor's money etc, etc. The bottom line is that
for many of us, our wealth just isn't high on the priority list.
Instead "paying the bills" is important. Or perhaps even "getting a
better paying job" is important.

Small things don't really matter. What matters is how aware you are of
the choices you make. Nearly every action I take has some kind of
effect when it comes to my personal finances. In short, once I started
caring about the entire system and making changes for the better,
things turned around for me. It seems to me, THAT is the point Ramit
makes here. Tiny bits of advice don't change the overall behavior.
Awareness and caring are the critical steps. Pay yourself first etc
are just tools to achieve goals once you decide to care in the first
place.

Tuesday, October 16, 2007

Payoff Complete - Ideas on Education

Well, the payoff's finally complete. With the advent of electronic banking, I've been paying many of my bills using my bank's online bill pay. I like the convenience of knowing exactly when the amount is going to hit my account. This is easy to plan since most of my bills that are paid this way are actually paid as an electronic debit instead of a check. However, for some institutions this might not be possible and therefore a check will be cut. So, for your situation, mileage may vary on online bill pay.

But when it comes to my student loan/credit card payoff which happened this week, it is a great feature. I scheduled the payment and I knew exactly when the money would hit my account. Now the bill is completely paid off and has given me even more wiggle room in terms of my measurement of free cash flow on a monthly basis.

The key here is what to do with the free cash flow. Currently, it appears that I will be doing some sort of a three-way split with the funds. I plan on increasing my retirement contributions. Furthermore, I plan on increasing my pay downs on other bills and also increasing my savings rate. The hope is that the car loan will also be paid off early which should help me accelerate even faster toward critical mass in terms of my finances.

I'm immensely proud of my accomplishment. Going to school and having to repay some serious student loan debt is a big incentive to make good decisions in school and with your money.

I think that this payoff is one of the main reasons why I feel somewhat annoyed at some people who get into professions that cannot pay the bills. In the end, the reason that everyone cannot be a basket weaver is that there are too many of them already so that the salary for this job ends up being low.

Please, before you get yourself into serious student loan debt, check out the salaries for the jobs that you will be getting. And check the availability of such jobs. One really good paying job in a field in a city isn't enough if there will be 40 graduates. Also do what you can to provide yourself an 'escape hatch' into either other related jobs or other fields (perhaps a double major or a minor?) so that you can get other jobs if your first choice doesn't work out.

Friday, October 05, 2007

Final Payment Soon

So, today I should be depositing a check that will allow me to make
the final payment for loan #2 for college. I will be using this
combined with some other miscellaneous income that I've transferred
over from my paypal account. And then there was one.

That one that is left is a biggie, but simply getting these things
paid off gives a huge sense of accomplishment. In retrospect, I think
that the transfer to a zero percent credit card was a great idea. It
gave me the opportunity to actually accumulate some forward momentum
since I wasn't fighting the tide of interest.

As for me, I went out to a celebratory dinner last night in honor of
the achievement.

Next up is my car loan. And with just over 3000 dollars left,
something tells me that I'll be paying that off early as well.

Wednesday, October 03, 2007

Don't Waste Time

Ok, I will admit it up front. This post is a short rant, but a rant
with some practical tips and ideas.

Frequently in my life I get bombarded by situations where my time is
wasted. And I cannot let it roll off my back all of the time. In fact,
it is probably one of my biggest pet peeves that people waste my time
without a good reason.

If I am going to be meeting you somewhere and you don't show up at the
time you said you would and don't let me know ahead of time, you're
wasting my time.

If I am going to be doing some work for you and you had told someone
else to do the same work and we both do it, you're wasting my time.

If I am waiting to make a turn and the person on the other side of the
road coming toward me has no turn signal running and then makes the
same turn as me, he's wasting my time. I could have went already,
except I had to wait because he/she didn't tell me what he/she was
planning to do.

Wasting other people's time for no reason is rude.

Key Ideas:

1. Personally, I really try to apply the golden rule to time. For me,
time can be just as valuable as money, and sometimes even more
valuable. Regardless of what people do with their time, it is probably
valuable to them.

2. Each time you interact with someone and you need something from
them, be aware of the time constraints. If you are not 100% sure about
when you need it done by, or how long it will take to get done, ask
those questions. It makes it much easier on everyone if expectations
are set up front which can be met.

3. Once you have expectations set, it is critical that as things
happen which change impact time that the information is communicated
as soon as possible to everyone involved. This gives people the
maximum amount of time to adjust.

4. Make sure that you let people know that you don't just appreciate
that they do something for you, but also that you know they are busy
and you appreciate the time that they spent on it, even if they are
not super busy. Calling attention to the sacrifice of time will likely
make them more aware of your time as well.