Friday, August 28, 2009

Health concerns

Curiously, I recently became I'll and was forced to have a small surgical procedure done at my local hospital. While emergency rooms are rarely fun, I found this experience to be one that made me rather happy to have such a good system close by.

I know that there is much being said in the healthcare debate and that many people will have other ideas. My experience is an isolated incident. For my recent life I have not had to experience it.

The real concern now is the bill. Well, provided that it isn't exhorbitant, I will be happy. And for now, I am just glad to ne back to work.

Thursday, August 20, 2009

Out of this world spending?

This morning on the Fox Business network they provided a very interesting infographic that shows the spending on various program by NASA.

I've been convalescing for the past few days and during this time I have been watching the show called the universe. One of the experts from this show appeared and made an appeal for NASA to allocate some of their resources to this important task.

When sold as an insurance policy, it seems like a no brained. Many people think that NASA is important for the value it provides to motivate kids to get interested in math and science. Personally, I am not sure that holds much water. There was no NASA during the time of Newton or Copernicus or gallileo.

Here are the stats:

Space operations: 5.8billion
Science: 4.5billion
Exploration: 3.5billion
Aeronautics: 500million

The amount needed for asteroid servaillence is in the hundred million range total. That is over many years. I think that is good insurance.

Tuesday, August 18, 2009

Keeping a backup plan

The reality of healthcare and much of life is that much of it is a crapshoot. Emergencies can happen and make critical work quite difficult to complete. For instance I recently experienced this first hand when I was experiencing stomach pain this past Sunday night. It developed into and was diagnosed as appendicitis. Normally, this would not be a big deal, but knowing that I had a significant amount of work due at the end of the month, it became clear that I would need to use my backups.

What I mean by my backups is different for various circumstances. For existing projects that are currently in use, this means to make sure that there are people and processes in place to do whatever is needed to handle day to day tasks.

For projects in development, this means having documentation available that shows next steps. This documentation can provide what is needed to proceed forward even if I am not available.

These backups are critical for important projects and tasks that must continue no matter what. So, in considering these types of tasks, you can make sure you have a task backup plan by doing the following:

1. Keep a plan or task list updated for important projects.
2. Designate and train at least one reliable resource to help you in an emergency.
3. Maintain good relationships with key people for the task. A backup plan is useless if the person who is backing up is not trusted.

These are the steps I take and they worked well for me during this recent illness. What strategies do you try?

Saturday, August 15, 2009

Prosper for Dummies

So, after a couple of years, prosper is gone. I can't say that I am terribly surprised. They are still around and doing business but they are no longer lending any significant amount of money, according to Eric.

I'd like to say that I am surprised and that this was a great site that just went badly, but in many ways they reaped what they sowed. Personally, I invested several hundred dollars there and my money would have been safer and made just as much, if not more in a bank CD with a lot less stress and hassle.

Of course, it would not have provided me with the diversion of looking at loans and trying to size up who was a good credit risk, but that's not really what we should be interested in doing when it comes to our investments. Investing (at least for me) is not gambling.

Now many of my loans are almost done and I've made just short of 2.5% on my money but with tons of hassle. And if there is just one more default, I will be negative. This sucks. And it would be easy for you to point at this tirade and say it is sour grapes, and that would be partially true. But there are many people out there who are far more hurt than I was. These people have lost on the order of twenty percent of their principal according to Eric's Site.

In short, I won't do this again. These sites are probably all scams; I wouldn't trust Lending Club and these others either. They all want to make a big interest rate and pay no attention to the risk. And if the REAL risk were factored in, the interest rate would be so high that people would scream usury. The system is broken and what seemed like a good idea a couple of years ago is now just dying a slow, painful death.

Saturday, August 08, 2009

Priorities

In dealing with my quest to become more financially secure, I have to admit that there are times when you think that it is all about the amount of money in the bank account or how much debt hat you pay off.

For me recently, things have been going quite well at work and I think that it is a good idea to step back every once in a while and revisit your priorities. For me, I realized that my personal financial goals would suffer if my priorities were not taken care of first and foremost.

My priorities are probably more simplistic than most people. Food, shelter, and basic health top the list. Without those things everything else is just a bit pointless. After that I need companionship. Some people say they don't. But I know that I need more than others.

The point of this post is not to get touchy feely. Instead I want to recognize how important it is to maintain good relationships with family and friends. It is critical if it is a priority for you. Therefore do not be shortsighted by spending all of your time, energy and money on other persuits, even those generating income.

I found his out again in my life when I started to spend too much time on my work and business persuits to the detriment of my personal priorities. My own experience is that I do best when all is in balance. So, if you have the means, keep the balance from the start; it can be harder to recover once you become distracted from what's important.

Taking breaks is critical also. When you consider that the people around you have different priorities, it is easy to get frustrated and burnt out even if the people are behaving fairly and rationally. If people are not behaving his way, not keeping your priorities in order can be even more dangerous.

Situations within families, clubs, jobs can all be quite distracting without a good handle on priorities. And for me, this can be true even with the best of people. Some people call this process introspection. But whatever you call it, managing your priorities and spending your money, time, and energy appropriately is what will ultimately leave you feeling fulfilled with your life. It has for me lately. And that has helped me do better across all parts of my life.

Monday, August 03, 2009

Forecasting for Retirement: my approach

One of the key factors in my personal finance adventure has been dealing with the concepts of estate planning and also retirement planning. There are various calculators out there for helping you estimate your needs at retirement but I take a somewhat different approach.

My approach is that instead of looking at the amount of money you'll need and saving enough to get you to that goal, I first look at what I am saving and see what it could possibly get me in retirement. Of course all of this is a forecast. Currently I'm forecasting for six percent returns and two and a half percent inflation in this exercise. Then I see what is available when I invest in this way on a monthly basis for the next thirty years and take a four percent distribution divided by twelve as a monthly withdrawl down out of the accounts.

Many people might think that this is the same old thing. But I try to be pragmatic. I will certainly try to stay on track but life throws curveballs. My method lets me check in on what is happening now. And mostly the value for this approach is that I can learn to live with what I will most likely have instead of being a dreamer about what I should have amassed.

The burden is on me. If I make a mistake I have no one to blame but myself. And when I use other calculators like the one on fidelity website, they focus on expenses. But I can't forecast that as accurately as I would like. I would like to think however that the forecasting that I can do is better suited to my situation than he generic forecasting done by large financial firms with a one-size-fits-all approach.

Another major aspect of the approach is that I expect to shift to a buckets of money strategy as I get into my forties and fifties where risk becomes much more of a concern. In short though, I think that the stock market holds real promise. And not despite the fact that there could be a strong retrenchment soon according to noted financial advisor Jonathan Pond, but because of it. That is, the idea of another retrenchment is somewhat exciting as another buying opportunity. In reality, the money in some sense is made in those down markets.