Easy Change

This week has been quite a ride already and we're not even half done. Lehman Brothers is bankrupt , B of A buying Merrill Lynch , and AIG not looking so hot, searching for some emergency money ..... One of the most important things you can have in this kind of uncertain time is an emergency fund. Not only should you have it, it should be big. The next best thing you can do is cut expenses and do all that you can to shore up your financial footing because who knows where the financial axe is coming from? I know that for many people out there, it is simply too late to do much in the short term about their emergency fund and way too difficult to figure out what to do to move their money around in any significant way. There are 3 things small things you should consider doing though, right now, before the summer ends in order to start picking up some stability in these uncertain times: 1. Make sure that your "safe" money is really safe. If its safe money, it is in an account t...

So, tonight on my way home, I needed to get some gas. I pulled in off the highway and stopped at a small gas station and figured I was in for a good 45 bucks to fill my tank. I squeezed the pump and let my mind wander and then the pump popped because the tank was full. I hung up the pump and looked at the price and was shocked. It was less than 40 bucks to fill my tank. Normally, when you pay less for something, it is a thrill. And I was quite pleased as I pulled away. The annoyance only came once I realized that I was so happy. I was completely snowed. After months of paying higher gas prices -- prices that were around four dollars per gallon -- it felt great to pay 3.60. This is not a blessing or a deal though. This is still painfully expensive. And I don't think that these temporary decreases in price are a very good indication that we'll have cheap fuel for long. I'm with other people that think that our heating bills this winter will be significantly more than we had p...

In the latest net worth post I made, I found, unsurprisingly, that my household net worth continues to decline. This in the face of a painfully slow economy, a housing slump, and a languishing stock market. Here's the link to the details: https://www.networthiq.com/people/easychange In short, this month marks a nearly 3.5% decrease in overall net worth. However, all that being said, I feel richer and more secure than I have in a long time. So, what does that tell you? I've made two interesting observations from this: 1. People are aware of the behavioral finance concepts now...especially those who are really 'in tune' with personal finance. That is, if me and my neighbor each has 100k, I feel worse than if I have 50k and he has 10k. The idea being that it is not simply enough to have lots of money, you need to have more than your neighbors to feel good. On some level, it feels a little sad to me, but alas, this is how most people feel/think...and I confess, I am not ver...

Lately, there has been a huge change in lifestyle for me. My side work has declined in volume (largely by choice). As a result, I have the tradeoff of less money and more free time. The realization of this new lifestyle came to a head this past week when I was on vacation at home. So, I thought that this would be a great time to find some things that needed to be done around the house that I had not gotten to lately. I fixed up the front garden and was able to also work on my back deck and get it stained. I am also looking at ways to improve and make even more out of what I have. Lately I've become seriously addicted to rolling change. Saving change is a great way to save money without noticing it. In my house I have a 5 gallon water jug that gets all the extra change and occasionally a dollar bill. But, the problem for me now is that I know that this money is money that is not "earning" anything. If you find yourself having extra time on your hands, consider getting your...

I think that the goal of personal finance in my life is to help me live a better life. I am not talking about just having more money and being able to buy more stuff. Although there is an obvious component of being able to purchase more goods. But I think more important than the stuff is the ability for me to know that *I can* purchase these things without worrying. Removing my fear about spending money is one major goal of my personal finance journey. The second goal is to incrementally make my life better. Whether it is to have more choices for food, more places where I can travel, or even more people I can help with various issues in their lives, these things are all things that come from having more money. And the abundance in my life is due to better financial skills. Realizing weaknesses and improving myself is another goal of personal finance. I notice this trend more and more in the PF community at large. Even my mother is a good example. Once you tackle your finances, taking o...

It has been quite some time since I wrote about Prosper loans. Prosper, like many sites now available, is a site where peers can lend to other peers. Prosper effectively removes the banks from the transaction and that is the value that they are selling. The upside for the borrower is a lower interest rate than would be possible through a conventional loan. This is ultimately where I think that the average lender is starting to get screwed. I don't blame prosper here. As a borrower, it is enticing to see that you have a chance to make serious money in double digit percentage rates on a loan when your high-yield savings account is yielding only 2 or 3 percent. The upside for the lender is supposed to be a higher interest rate and therefore more income per dollar invested. However, it is easy for the average investor to consider returns without considering some of the more fundamental concepts of Modern Portfolio Theory . Risk and reward are related, even within the Prosperous world o...

I read this article about inflation recently. In a nutshell, inflation is a serious concern at this point. And we're not talking about that wonderful 'special' inflation that excludes the cost of food and energy. This type of inflation is absolutely ridiculous because for most families, the inflation on those two items alone is what is effecting their heating, transportation, and food costs. This is not an article about inflation measurement. I think that everyone needs to accept the fact that prices have gone up significantly in a short period of time for the average US citizen. For the average person, this can be a difficult situation to deal with. So, I'd like to describe some anti-inflation strategies. Some of these were talked about this morning on Consuelo Mack: Wealthtrack as a means to describe anti-risk investments. The first basic idea is simple: If you know that the value of the dollar is declining and/or prices are rising, spend the dollars quickly before t...