Easy Change

Given the time of year, things are drawing to a close and one of the things to think about is what has worked and what hasn't as far as your personal finance plan goes. For me, one of the things that I tried about 3 years ago was using propser loans. My record isn't that bad, and in some ways, Prosper did exactly what I wanted it to--it secured a series of funds to achieve a higher interest rate than I could get otherwise if the money remained entirely liquid. You can see my track record with prosper. For many people, like Pensonier , it doesn't work out so well. Personally, for legal reasons, it is not possible to invest with them anymore. As for me, I am withdrawing the money now and slowly building up my roth IRA for retirement by dollar-cost averaging. What is most telling about the process of lending money is that there is so much involved in making the loans, that it really tricks you into thinking that the investments are somewhat safe. Personally, for the amounts I...

Consuelo Mack: Wealthtrack is fast becoming one of my favorite shows to watch on the weekend. This weekend, Consuelo had on David Einhorn from Greenlight Capital, a firm that made its name by shorting large firms during the fiscal crisis and made a killing doing so. Greenlight Capital is a hedge fund, and its investors have been quite happy with the returns. But while he is known for being short, Greenlight capital is about 1.5 long versus 1.0 long in terms of a mix of investments. As for Quantitative Easing, Einhorn referenced the fact that the Fed is targeting inflation, but notes that there is a problem with it. The problem is that the inflation might come, but not where you expect it to. It may come in clothing, energy, food etc. These would be things that everyone needs, not things that are real luxury-type items that people are looking for to increase demand. On Gold, to Einhorn, Gold is money. "The merit of gold is that given [the current crisis] is how we want our assets d...

Just this past week I was on a visit to some family a few hours away and I was pleased at how efficient the trip was. The cost of the fuel to get there was not overly expensive and good planning kept the costs down to something reasonable. Due to space constraints, I opted to get a hotel room for the night but this was planned for in advance. I use the same chain each time to accumulate reward points. However, about half way through the weekend, I noticed that I was getting a cold and felt like I had a sore throat. Cut to a trip to the pharmacy to get a package of cold medicine. Even the store brand, which was on sale, still cost about nine dollars. The costs of these things really are increasing. That is the very reason why I find comments that there is no inflation to be dubious at best. Statistics from the Dept. of Labor when it comes to the Consumer Price Index (CPI) tell a more accurate story than just waving-of-hands types of comments. The CPI shows, in short that there are many...

To say that this month has been difficult with the spending would be a huge understatement. Just this past weekend I went overboard on the spending with clothes and christmas shopping. What's more, the car needed new brakes this weekend--420 dollars! Yikes! Yes, Christmas shopping. I know that it is early, but I still intend to be prepared and get it out of the way. That said, there are huge cutbacks this year. I'm hoping this update with help me get some perspective. First off, in our own families, we are keeping the gifts much smaller. Even though I normally give bonds to my nephews and neices I have decided to not do that this year. The bonds are normally quite small and we need to make sure we're being more careful with our money in this economy. No one knows what the future holds. While the stock market has bounced back, it certainly seems like we cannot feel certain about anything. Volitility seems to be quite high over the past few years, so who knows what will happe...

One of my favorite shows to watch on the weekend is WealthTrack with Consuelo Mack. It is a show offered by Public Television and it has been rated the "Best Money on TV" by Money Magazine (which I used to subscribe to). According to this morning's episode, recorded in January of this year, US Household Wealth fell 11 Trillion Dollars in 2008 or, put another way, a whole 18%. What is the new target number? That is, how much money do I need to generate every month/year in order to live? How do I get to that number? Harold Evensky, Author - Retirement Income Redesigned Marybeth Franklin, Kiplingers Personal Finance Jonathan Clements, Director of Financial Education CITI, Author - The little book of Main Street Money 1.Segment their money - not all at the same time for same purpose 5-10 years of retirement, guaranteed income "Buckets of Money" 2. 6-10 3. 11-15 4. Alternative Investments But where do you keep your assets? For Franklin, the error is clear. Many peopl...

This week I finally did a calculation that I had not done in some time: worst case scenario. This is a calculation that I do in order to give me some confidence that things are in a good state if the worst case scenario that I am interested in protecting against happened. Simply put, if there was no income because of a job loss, how long could the household be operated without any additional income. In this scenario, my goal is to determine this kind of scenario under realistic conditions. Put simply, I wouldn't be accelerating my debt repayments, continuing my savings plans, or doing anything other than the base payments on all of my fixed expenses. Given these parameters, without additional income, we have over 12 months of running room. This is a good feeling and is the first time that there have been that kind of savings. It is a really nice feeling. Does anyone else track this kind of figure, I wonder? Personally, after net worth and saving's rates, this is one of the bigg...

The past few weeks I have been watching the mini series "the pacific" on HBO. There are a couple of things that strike me abot this as I was talking to a co worker about this that I thought might be very interesting in terms of personal finance. The amount of television you watch certainly seems to impact your situation in terms of personal finance. I notice that I watch more tv now than I probably did a year or two ago. I think that some of this is because I haven't played as much poker which I think saves money but I also think that I would be stupid to not consider the productivity aspects of it. The other aspect of it was simply how easy it is to get caught up in worrying about things that in comparison to soldiers worrying every minute on a battlefield just seem a bit trivial. I hope I can maintain that perspective. A nice thing that I found out about today was that I have recalculated my household liquid cash and it has now reached the 1 year mark. With additional f...

So there has been a personal trend for me in my career over the past few weeks and I thought that it would be worth mentioning here. Many who follow personal finance have browsed through some of the major blogs and books that talk about a few themes that I strongly believe in: 1. Don't waste time. Time is a huge asset. Even people who do not have a job, they have something that is quite valuable: time. In short, even when unemployed, this is an opportunity to improve yourself and your skills. Put simply, whether or not you're working, it is really important to not waste time. 2. Remember your value. In short, the skills that you get in many jobs are skills that must be continually improved and refined. If you're not doing that, then you're setting yourself up to be in a bad place in the future when you're lagging behind your peers in the field. For me, number two came home to roost this past year. I've been in my current position for some time and although I...

One of the largest US Lottery prizes in history was claimed recently by a man who works in a small convenience store according to MSNBC. I think that it is pretty amazing when you think about it. Chris Shaw is a guy who is working and can really really use the money. I hope he gets his health and kids taken care of and really is able to improve his long term quality of life for him and his family going forward. Even at a lump sum, the payment is over 120 Million dollars which is quite respectable. I think that many people would be able to make a serious lifestyle change with anything close to even just a million, so 120 million is impressive. Many people often feel like winning the lottery is like a curse. It is unfortunate but many people lose their lotto winnings . So the best thing to do in these situations is be slow, deliberate, and have a group of advisors who can really help you manage any kind of dramatic new wealth. With a good plan in place, it is far more likely that the m...

As I was browsing the web this week I came across an article that I found quite astounding. The article was online at The Atlantic magazine and dealt with the socio-economic impact of unemployment on neighborhoods and the long tail effects going out ten, twenty, and thirty years. What I found interesting about the article was the premise. That is, the idea that unemployment was a problem that was rather long-term in nature was something that quite honestly I'd never really given much thought to. However, given how long and deep the downturn has been (e.g. even in the face of an upswing in the stock market, many people still are out of work), it is not hard to believe that there will be some longer term effects. This article about unemployment takes this concept and really explores it to the depths. The idea begins with a common example, that men (and people in general) often feel that their job is a major part of their identity. And in a protracted period of unemployment, that can...

So I will admit that over the past several years I have been quite fortunate in the sense that the money was not a huge worry for me; I always knew that I had enough money to buy my next meal. And while I don't think that I am ungrateful for my situation, I definitely think that the availability of food has made me a bit more complacent than I'd like to be. That said, I decided that I could accomplish some real goals with regard to money if I changed my habits toward food: 1. I want to stop eating out of convenience so much. This will require planning. 2. I want to reduce the amount of food that I waste. A recent trip through my canned goods revealed nearly 20 dollars of completely wasted food. The picture here is just a sample! 3. I want to start eating healthier foods. I think that in the end, this will force me to eat more vegetables which should actually reduce the costs of my lunches (see goal 1). My plan is not to commit to any specific goals, but simply to try to chew on...

I just picked up this story on the net tonight and I thought it was really worth sharing because this is really innovative, I think. Go here to read more about the Gum Wrapper Prom Dress . I think the story is very cool and timely with Prom right around the corner for some students.

One thing that I have really begun to focus on lately is the idea of saving more money with regard to cooking costs. I have a whole separate post related to money saving food tips. As I suggest in the recent food article saving money on food can often be about finding tasty recipesthat are cheap and quick to prepare since those are the main barriers to good healthy and cheap eating. One such example is a recipe that my mother taught me when I was little and I still cook it today: Quick Corn Chowder 1. Mince a small white onion and combine with 1 1/2 TBSP of butter in a medium sized sauce pan. 2. Keep onions on medium heat for about 5 minutes stirring frequently so they do not burn. 3. Combine a can of pre-sliced or pre-diced whole potatoes and two cans of sweet cream corn. 4. Optionally, if you want more corn, you can combine another can or half-can of whole kernal corn. 5. Fill one of the empty cream corn cans with milk halfway, and swish around to get the extra and pour it into the...

More than I had expected, my iPhone is becoming a bit of an entertainment device. When you think about it really this kind of makes sense because there are more applications for the iPhone everyday. But what shocks me is that as an entertainment device, the iPhone packs quite a bit of value for someone like me who is committing several hours a day on public transit. Even when I get to work I am able to use the iPhone for music and I find that to be perfectly acceptable since the additional drain on the battery is mild and it has not really resulted in any additional charging. I also continue to use my existing ipod for any longer term music listening. More than the music, the applications are a huge value! One example is a recent game I bought: Monopoly. This game cost three dollars on the iTunes store and then I have replayed it tens of times and I own it forever. If I can manage to find several games like this, the amount of value I derive from the iPhone is then quite high. And that...

The cost of healthcare are out of control. And there is not much that can be done about it. Now that the new plan has been passed we have added millions to the pool of people being covered and the reality is that we have not improved the facilities. Instead we are decreasing payments to the the providers by the government. It is an expensive proposition that's for sure.  People are concerned about the dollars and cents. I am too. But I am concerned about the long tail effects of deliberately forcing doctors and phamacies to operate below profit margins. Even the ideas that government can force corporations to take less profit if they happen to be insurance companies is a dangerous idea I think.  Put simply: do you have a 401k? Then you probably know that you likely own one or more of these companies. And if you want to retire, you need good returns from these stocks.  Compensation and bonuses should be limited to some degree though. The SEC has some control here. Also we should be ...

So, if you've already figured out what to do with your savings, and you're aware that you should pay yourself first. But the question is what to do when things get busy and you're already on automatic with your money? Even the best plans need some occasional changes and tweaking. So, make sure that you're taking the opportunity to revamp your freedom fund and expense estimates each year. I find that the best time to do that is tax time. This year, I reduced my additional increase from 3.0% to 2.0%. Inflation seems to be in check and fortunately, things seem to not be expected to change in the near term. So, I determined that I needed to save approximately an additional thousand dollars in my freedom fund in order to stay current. Then I did something similar for my emergency fund (or e-fund as some like to call it). Once those two were satisfied, I had to decide what to do with any additional funds that I might have available. One option that many like to use is to fini...

The press has been covering various countries and their possibilities of defaulting on their debt for some time. Last year, Iceland had a financial crisis that caused many to become quite nervous that it could cause a series of defaults across Europe. Lately, the big target has been Greece. For quite some time, the burgeoning levels of greek debt have made many investors nervous. A country, like a company or a person, can spend more than they have, but must borrow in order to do so. Companies can borrow by issuing stock or bonds. Countries can borrow by issuing bonds or other similar securities. All are forms of IOUs. In the case of Greece, the increased debt levels have made people nervous because they seem to be at a level that could never be repaid. This fear was lessened to some extent today with a new agreement that provides some backing for Greek debt. Read Bloomberg's Greek European Union Accord article to learn more. What does this all mean for the average personal finan...

One of the easiest ways I find that you can spend money is through recurring expenses. Although it is something that I am aware of, it is something that recently began to creep back up. When I first became really interested in personal finance a few years back, I really thought that there would be a bit of work to be done and that a simple magazine might help. I subscribed to Money magazine and probably got something like 16 issues for like 12 bucks, who knows? Even after factoring in the entertainment value, I have decided to not renew. Much of the content feels recycled and the choices that they are highlighting seem to really be geared to people in retirement or with kids which doesn't really fit my life at this point. Another subscription I've curbed is my World of Warcraft. I really enjoyed playing the game for a few months and also seeing all of the new content that had become available but the game has lost its appeal for me so I've quit. Perhaps I will go back, but ...

I've been a fan of Suze Orman for years. When I first started working after graduating college and then I started to make some money, my experience with other members of my family, mostly my grandparents, showed me that I needed to figure this money thing out. So, I set out to understand how money works and I found Suze. Many financial gurus are out there and for the most part, much of the advice overlaps, but Suze really seemed to be right along my line of thinking.  I bought the books, watched the show, and despite the fact that I feel like I've largely outgrown it so long as I follow the lessons, I really wanted to check up on how things were going. I went to the CNBC website and found an interview where she said this: "I do really live within my means. I have absolutely no debt. If I don't have the money to write a check, then I can't afford it. I never, ever, ever spend old money, so I'm only allowed by my own standards to buy something new with new mone...

It has been a very long time since I last updated and I've accumulated some stories that I can share about the past few months in my next several posts. I hope that they will be found to be useful and interesting. After a very long period of time, the economy has come back. It seems now, although there are some small shifts day to day and week to week, that the stock market has found some sort of steady point. Of course, there are many that think that this could all change and that there is still a chance of a double bottom. All of this is really a side show in my opinion. What matters most to people is what is happening in their own personal financial life. That is, what is the most important thing in each person's life that keeps them from being happy. For many right now, it is a combination of a lack of a good-paying job and/or an overabundance of expenses. This past six months has been quite good; expenses remain low and the debt snowball continues as I am working toward pa...