Yet Another Money Blog

Norwegian Math

2008-02-15T12:48:00.000-08:00

Yay! it's Friday. Here's a joke for the day.

Norwegian Math

A Norwegian man wants a job, but the foreman won't hire him until he passes a little math test.

"Here's your first question," the foreman said. "Without using numbers, represent the number 9." "Without numbers?" the Norwegian says, "Dat is easy." And he proceeds to draw three trees.

"What's this?" the boss asks. "Ave you got no brain? Tree and tree and tree make nine," says the Norwegian. "Fair enough," says the boss.

"Here's your second question. Use the same rules, but this time the number is 99." The Norwegian stares into space for a while, then picks up the picture that he has just drawn and makes a smudge on each tree "Ere you go."

The boss scratches his head and says, "How on earth do you get that to represent 99?" "Each of da trees is dirty now. So, it's dirty tree, and dirty tree, and dirty tree. Dat is 99."

The boss is getting worried that he's going to actually have to hire this Norwegian, so he says, "All right, last question. Same rules again, but represent the number 100."

The Norwegian stares into space some more, then he picks up the picture again and makes a little mark at the base of each tree and says, "Ere you go. One hundred."

The boss looks at the attempt. "You must be nuts if you think that represents a hundred!" The Norwegian leans forward and points to the marks at the base of each tree and says, "A little dog came along and crap by each tree. So now you got dirty tree and a turd, dirty tree and a turd, and dirty tree and a turd, dat make one hundred. So, when I start?"

Your Nest is NOT a Nest Egg

2008-02-14T14:09:00.001-08:00

I came across this excellent article on Yahoo Finance titled "Why Your Nest is Not Your Nest Egg". The author writes very clearly and gives convincing reasons and examples. It's worth a read.

Our house has appreciated nicely since we bought it. But a house has a tendency to be costly to maintain, as the article points out, and there's bills like that annual property tax bill.

Some people like Dave Ramsey advocate the strategy of paying off your mortgate quickly. I don't agree with that. First, paying the mortgage off may be possible in some states where houses are under $200K, but it is certainly not possible here in California. Second, I think it is not a wise move to rush and pay off the mortgage, while skipping investing in equities and saving for retirement. Ask yourself, what would happen if you lose your job? What good is it having all your money is in your paid off house? You probably have many monthly bills like gas, water, and food. Are you going to sell off your house to pay those bills?

I think a good compromise is to get a 30 year fixed mortgage, not a 15 year. A 30 year loan gives you a lower monthly payment. So you can have money left over for savings, investing, and for building an emergency fund. If you are married and both are working, and have an emergency fund, then you can afford to pay more principal on the 30 year plan. But if you hit a bad year and maybe one spouse is unemployed for a few months, then it's better to have the lower 30 year payment than a 15 year payment. Don't be in a rush to pay off the mortgage, but remember to think about what would happen if Murphy's Law hits.

My strategy is to invest money in the stock market too, and not just put all my money in paying off my home. I have a fixed amount of income every month, and I allocate it to savings, investments, mortgage, charity, spending, and fun.

Who knows how the housing market or the stock market will perform in the next year, 5 year or 10years? It is not wise to bet everything on real estate. It is wise indeed to put your money in different baskets like stocks and real estate, either property or REITs. That way if there is a crash in the housing market, I still have money in other baskets like stocks, and bonds.

Craigslist ipod deal

2007-12-19T14:28:00.000-08:00

I love craigslist. I sell and buy things regularly on it. There's always items that people don't need, and others want. So craigslist is a great forum for putting buyer and sellers together.

Today I was able to get an ipod shuffle combo with $15 itunes card on craigslist. The price was cheaper than retail, and it's brand new too.

There are scammers out there who prey on sellers. Here are some suggestions for setting up a successful transaction on craigslist.

1. Either create a new email address or use a non-work email address. For example, open a gmail account. Some companies are tracking emails, so use non-company email accounts instead.

2. When selling. State the condition of the item. New? used? scratches? original cables and packaging? Still working well? needs new battery?

When buying, ask the seller as much info as you require.
Why are they selling?
Is it working properly?
Any issues I need to be aware of?

3. When selling, state the price and if you are willing to negotiate. Ex. $30 firm. $30 or best offer, or if you want to entertain offers to trade. Maybe you have a wii game and you are willing to trade for another game.

You can also search craigslist and see what prices are for similar items in similar condition. That way you can attract buyers with a fair asking price.

4. If you priced your item correctly, you will have a high probability of getting email inquiries from buyers. You will sometimes get scammers asking about the product you are selling, or some lowballers trying to offer a very low price-- the best thing to do is just ignore these emails, don't even bother to respond.

So both buyer and seller can now negotiate via email on the price and answer questions on the condition of the item. Exchange emails back and forth, then see if you can agree to a deal or not.

5. Beware of scammers. The best rule is to meet with buyers or sellers locally. DONT Ship the item. Don't accept checks. Cash is indeed king.

Scammers will offer to send you a check for hundreds more than your price, and ask you to mail the object, but later the check will bounce, and you will have to pay your bank.

So to avoid this, just meet locally and deal in cash.

6. Meet at a public area with people nearby. Coffee shops are ideal, like a starbucks. Bring a friend if you want extra help.

It's better to meet at a public place, rather than meet at someone's workplace or residence. Because this will require both parties to travel to the place, this shows the commitment of going thru with the deal.

7. Finalize on when and where to meet. There should be an exact date and time to meet. Otherwise one party may flake out.

8. Once you have agreement on the price, location, and time, you can then exchange cell phone numbers. That way you can avoid missing each other, or if there is traffic and you are late.

On the day you are meeting, it would be good to call or email the person a few hours before the meet. Just to confirm, and see if they remembered.

9. Meet and complete the transaction.
a) Get the object and let buyer inspect. Turn on or try the product to see it works.
b) Pay the cash. Let the buyer count the cash.
c) Once both buyer and seller are satisfied. It is complete

Sometimes the buyer will try some tricks like ask if you can lower the price.
So if you are the seller, you have to consider this possibility. If the price is fair, then state that it is a fair price and this is your best price.

For the buyer, if the item is not as described, then the buyer may not be happy with the stated condition versus actuality. So it is important to ask as much questions early on about the condition of the item. If the seller can provide a photo, that's even better.

Both of you need to decide whether to stand firm or work it out.
Both you stand to lose on the time spent travelling to meet. And if you are the seller, you have to repost it again.

Hopefully you can sell or buy the item you want. Good luck.

Teaching Kids About Money

2007-12-17T17:26:00.000-08:00

When I was about 9, I remember my parents opened a savings account for me. And when I got cash from relatives, I would go to the bank and deposit it. The good thing is they taught me the importance of saving money. But the problem is, I don't think I was taught on how to spend it. I pretty much learned about investing and taking risks from personal experience. So I intend to make sure to teach my daughter about money throughout her childhood.

Today I found this article about 12 ways to Make your Kids Financially Savvy. The author has 2 children, and he shares about what he's doing to teach the kids about handling money.

I hope to teach my kid about handling money, from savings accounts, delayed gratification, saving for a goal, making calculated risks, using credit, and more.

My daughter is very young right now, but she is a good student. I tell her that we need to save money for future goals, such as vacations, disneyland, and college. I also tell her that mom and dad works hard to get paid. Then we have money to spend. So she seems to understand this and I look forward to teaching her more as she matures.

I know some friends who have credit card problems. They have 2 kids and a dog. And they have gone into serious credit card debt twice. They have expensive cell phone plans ($100/month), have the latest Razr phones, has a cleaning lady come in regularly, and wants to buy the most expensive $300 Christmas photo package at the mall. No wonder they are paying hundreds of dollars in credit card interest. Are all these purchases needed?

So how do I save? I try to save money by using a low cost prepaid cell phone from Virgin Mobile ($20 minimum for every 90 days), I take photos myself and get Christmas photo cards from winkflash.com ($25 for 75 photo cards), and we clean our house ourselves. So the end result is we have drastically different situations. I'm not being smug, but I do things to save money. But the money we saved has enabled us to have more options in life, such as going to Hawaii last year, and to enjoy life. We're not perfect, my wife and I go over our budget and we have decided to spend less eating out, and cook more meals.

I want my daughter to be able to manage her money wisely. Because I have seen firsthand the problems stemming from misuse of money.

Faucet deal

2007-12-17T17:17:00.001-08:00

We're planning to renovate our bathrooms soon. So it was timely that I found this Danze Melrose faucet for $40 at Amazon.com. Shipping is free too. The price is great for this brand. Plus it has a drip-free, single handed design. My wife wants to remodel the bathroom, and so she is starting a fund to save for this upcoming project. So far she has put $2000 for this.

When we renovated our kitchen 2 years ago. We slowly purchased our materials, and I'm now slowly purchasing for our bathroom.

The Experts Speak: Survived 2007? What to do in 2008

2007-12-03T18:57:00.000-08:00

Another WSJ article I came across today. Money experts give their opinions on 2008.

Vanguard's John Bogle gives excellent advice:

"Buy and hold a very diversified portfolio, U.S. and global. Minimize trading fees, mutual-fund management fees and sales loads, and investment-bank fees.

Another important lesson: Always hold some bonds. I happen to like short-term bonds better than money markets, because they yield a bit more and they don't fluctuate very much more -- high-quality short-term bonds, 10% to 20% of your portfolio. If you are older, a lot more than that.

Another very clear lesson this year for investors is: avoid complexity. If you don't know what the fund is investing in, don't buy it. Wall Street has created those derivatives and those collateralized debt obligations of very uncertain problems with very high risk, just to earn a little more return. Another lesson is that, if you think you are getting a premium yield, assume that you are taking a premium risk.

Looking ahead to the next year, be risk-averse. I would never tell anybody to get out of the stock market. You want to think of how your account is balanced. For example, if you normally want to be 75% in stocks, I'd rather be 65% than 85%. I believe it's a good time to be a little more cautious."

Bonding With Your Money

2007-12-03T18:29:00.000-08:00

When I was a newbie investor, I wanted to keep all my investments in stocks. I wanted my money to work harder, not just sit around in cash and bonds.

I read an interesting article today regarding the importance of keeping a percentage of your portfolio in bonds. Bonds may not be as sexy as stocks, but you'll be glad you're holding bonds when a big market correction hits.

The article says that research shows that bonds will lower the volatility and yet capture most of the gains of an all-stock portfolio.

Click here to read the WSJ article "Invest It All in Stocks...No Way"

George Foreman Ipod Grill -Whaaat??

2007-11-26T15:08:00.000-08:00

This is a strange product I came across today. It's a grill with built in connection for the ipod plus speakers and amp.

Who would buy this frankensteinian grilling gear? I think the market researchers were polling people on April Fools day.

Why would I plug an ipod near a hot, smoking, grease-dripping grill? It's such a bizarre combination. An ipod is the last thing you would want to have near a grill.

Or maybe they hired some monkeys with a dartboard on George Foreman Industries HQ?

I can only imagine what went on at the CEO's office at George Foreman Industries. Just like a Dilbert comic.
"Johnson, my nephew showed me his ipod last night. I want you to build a grill with an Ipod connector."
"But sir, who would buy that?"
"Get it out by Christmas or start packing your cube!"
"Yes sir!"

What's next? a grill with built in Wifi, keyboard and LCD screen? So you can surf while grilling your steak? Maybe also a Wifi router addon, so you can make your grill also function as a hotspot for the neighbors.

Movie Night

2007-11-26T12:44:00.000-08:00

I had a chance to watch "No Country For Old Men" last week. I had read that this film was good from RottenTomatoes.com. So I was eager to check it out. This is a movie about a guy who finds a bag filled with millions of dollars. The bad news is that the drug smugglers are also looking for their money. The bad ass dude played by Javier Bardem is one guy you wouldn't want to meet in a dark alley. The story is punctuated by straight-faced comedic moments from the Texan sheriff played by Tommy Lee Jones. Good to see that Tommy is in a role that fits him.

It was an enjoyable movie, with thrilling moments and not the expected ending. I rate it 5 out of 5 stars. I got a good deal for a matinee ticket price of $7.50.

Costco Observations and Crystal Ball

2007-11-20T14:51:00.000-08:00

Alakazam! Gaze into my crystal ball...

So I was returning something at Costco last night. And as I was waiting in line I was observing the shopping cart contents of the patrons leaving. This was Monday night around 7pm at a fairly affluent area. Over about 15 minutes, I scanned at least 20 shoppers and I found that around 95% of their shopping carts contained ordinary food stuffs. Cheese, soda, water, fruits, vegetables, and similar items.

The interesting thing I noted was there wasn't any big purchasers of electronics, toys, clothes, tools, or luxury item.

Maybe I'm making a mountain out of a mole hill. But I was expecting at least more shoppers would be be playing Santa and buying something nice for Christmas. The only obvious non-food purchase I saw was a cyber dog with a carrying bag. CRAP alert!

Maybe people are doing serious belt tightening due to the falling stock market, and the rising oil prices, and the falling dollar. Or maybe I was at the store at an odd hour plus it was a weeknight.

Are you looking to spend less for the Christmas list this year?

Wastrel Show Rocks

2007-11-19T15:45:00.000-08:00

The Wastrel Show blog rocks!!!

The blogger is a 50-ish woman who blogs about retirement, finances, and living debt free. The more I read her posts, the better it gets. She has a very entertaining writing style and I enjoy reading her updates on saving, kids, and her thoughts on money.

Add this blog today to your reading list: http://wastrelshow.blogspot.com

Iphone Jailbreak

2007-11-17T14:02:00.000-08:00

My relative was visiting, and he bought 2 Apple iphones. They don't have them yet in his country. So being the geek of the family, I helped unlocked the iphone.

The procedure to unlock the phone is not too difficult.
Requirements are:
1. Internet connection
2. Windows PC
3. WIFI router
4. Iphone
5. Downloaded files:

I followed the directions from this page. So refer to that site for full details.

Preparation
1. Start off by downloading the various zip files listed. Unzip the files
2. Install the .Net framework. Uninstall older .Net framework required.
3. Make sure your WIFI router is working. DHCP is enabled.
4. Install ITunes
5. Install WinSCP. A file copying program, used to copy files from PC to iphone
6. Install TouchFree
7. Reboot windows if needed
8. Hook up the Iphone crade to the PC's USB port
9. Start Itunes to see if it can recognize the Iphone in the doc. Stop Itunes, and use taskman to kill the iphone services.

Basically the procedure is
1. Make sure Iphone version is correct
2. Use iphone Emergency Call feature to access the Addressbook
- Add URL for preferences. Go to Preferences and Turn off the Autolock feature
- Add URL for the jailbreak.toc2rta.com
3. Connect the Iphone to your WIFI network. Write down the IP address of the Iphone.
4. Connect to the jailbreak URL.
5. Start TouchFree. Then follow the onscreen instructions, touch free will copy files to the Iphone, and prompt you to reboot the Iphone several times.
When touchfree is completed, you will be able to see the Springboard, which is the main page of the iphone with the various icons.
6. Next you Unlock the iphone. Bring up WinSCP to copy files to the iphone. Copying AnySim to the phone allows the iphone to work with other phone carriers.
7. Next you activate the phone. Copying the new lockdownd and reboot
After this you should be able to use a non-ATT sim card to make calls.
8. Final step is to install the youtube file. After this you can browse youtube videos via WIFI.

The site has all the details. Overall the procedure is pretty straightforward for PC users with some experience tinkering around. Took about 30 mins to uninstall older .Net framework and to install the downloaded zips. Another 30-40 minutes to do the unlocking.

The iphone is a cute toy. Expensive but worth it. If you dont want to carry a bulky laptop, this is a good compromise. The price cut brings it down to $399 plus tax. It's a nice phone, web browsing device, plus it has a camera, and of course an Mp3 player.

Thankful Part 2

2007-11-17T13:50:00.000-08:00

Got up early today to volunteer at the annual food drive. The local boy scouts and brownies distributed some bags and flyers a few weeks ago. Today the scouts and their parents drive around the neighborhood and pick up the donated food.

All the bags are taken to the church and lots of volunteers sort them. There were scouts, Coast guards, church members, Red cross volunteers and kids from 2 local high schools. About around 60 people were there today.

Cars, SUVs, trucks came to drop off. Thanks to the scouting parents!

Then the canned foods are sorted into the following categories:
Pasta
Soups
Fruits
Beans
Exotic
Ready to Eat
Meats and Chili
Beverages
Corn
The cans are grouped into their respective boxes.

The effort was a big success. They collected more than last year. I think 7000+ cans.
Good to see lots of giving, and also good to see many volunteers.

All the boxed food is brought to the local food bank. And the food is distributed to the local city residents.

Thankful

2007-11-13T18:33:00.000-08:00

I came across this LA Times article about life in Zimbabwe. Very sad to read how the country is going down the drain. Hyperinflation has decimated the economy and people's lives are reduced to queueing for hours on end. It reminds me of the similar situation in Germany that catapulted Hitler to power. If the people are hungry, they will listen to anyone who promises them bread.

Reminds me to be thankful as turkey day approaches...

Frugal trip to Yosemite

2007-11-13T14:51:00.000-08:00

I had a relative visit us recently and I took them to Yosemite a few weeks ago.
I was able to save on this last-minute getaway in several ways.

Instead of renting a car, we just used my trusty Corolla. The corolla performed well since snow had not fallen, it was a relatively nice 3 and a half hour drive to Yosemite. And since it was a short 2 day trip, we did not have to pack a lot. It also helped that the Corolla is a gas-sipper. I only had to fill up once before leaving, and once before coming home.

Another way we were able to save was going there during the off-peak season. I was able to book a room at the Yosemite Lodge for around $125 a night. This was a good deal since the Lodge is located in the park, and has a food court, restaurant, and stores right beside it. The room was comfy with lots of hot water to end the day. Timing is essential. If we were going during the summer, the room would have cost double that. The lodge just is a short hike to one of Yosemite's waterfalls, and we even saw some deer wandering the grounds.

Good weather was still to be found when we got there. The temps was in the upper 60's so it was enjoyable. So we were able to enjoy taking short hikes. I was amazed that the weather was so temperate at this time of the year.

Yosemite is so beautiful, and full of life. We saw groups of deer walking with their does. And we also saw a coyote.

On our second day, we just went to the supermarket in the park and bought a picnic lunch. Salads, and heated trays of BBQ chicken. And also fruits we bought from a roadside stand.

Enjoying Yosemite can be cheap and last-minute. As long as you keep an eye out and think frugally.

Living Trust Creation

2007-11-02T16:04:00.001-07:00

We met with our lawyer today to sign and officially create the following documents:

Revocable Living Trust
Will
Power of Attorney
Medical Power of Attorney

The whole experience has been very educational. These documents are useful for protecting your estate and for making life easier for the survivors.

The Living Trust is helpful for avoiding probate costs and to avoid delays. So one needs to transfer assets into the trust (house, retirement accounts, etc) There are also some cases where you can use this to shelter more assets from taxes and pass assets to your child(ren). The living trust also allows you to specify who will be the guardian in case you have minor children.

The Will is used to handle your "smaller assets". You may not want to transfer all your assets into the living trust, or it may be not such a valuable asset that needs to be added to the LT, so just handle this in the will. Stuff like cars, or checking account if you dont' have much there.

Power of attorney identifies who will be handling your financial decisions in case you are incapacitated, or "sick in the head"... So normally, it will be your spouse, if not available, then 2 more alternates

Medical power of attorney, of course for the medical decisions. The big decisions are "pull the plug" and organ donation.

Many people do not like to think of their deaths, so they avoid the task of setting these documents up.

1. You can't avoid it anyway. Everyone dies. So if you don't have anything written down, then the government will either take it in taxes, or probate will delay and add costs.

2. Another thing people say is they think it's expensive to talk to a lawyer and set these things up. Well, maybe so, but there are also high costs associated with probate. And if you don't want to see a lawyer, then just do the minimum and create a will, there are many books and software that do this now.

3. It's the responsible thing to do. We want to make it as easy for our daughter. So having these issues written down is our gift to her.

4. Family relationships. If you have many children and grandchildren, I think you will be helping the survivors by just selling everything, and distribute equal portions to them all. This will help to prevent sibling quarrels and misunderstanding. However, if you want the opposite effect, then just do nothing, and don't write anything down.

Motley Fool is Dead (to me)

2007-11-01T10:54:00.000-07:00

When I started my financial journey years ago. I would visit Motley Fool to read their articles on investing and get useful ideas. They have many articles that introduce the concepts of investing to newbies like me.

But nowadays I don't really go there anymore. In fact I have been avoiding their site. Why? because they have changed, and I have matured. If you frequent the Yahoo Finance, like me, to get stock quotes, you'll frequently see Motley fool articles listed. But I don't click them anymore.

The reason is they Motley Fool site seems to have morphed into a newsletter ad machine. Their articles almost 99% of the time give a teaser headline to get you to click it. The "ADticle" will spew some general personal finance spiel, then bam they hit you with something like "... if you want to find great money making stocks like these that kick ass, then subscribe to our XYZ newsletter today."

Motley Fool started with a compelling site. But nowadays, they're just a lifeless newsletter huckster. No thanks MF, I'll just read pf blogs instead.

Thanks Ben for the Fish!

2007-10-31T17:09:00.000-07:00

One of my favorite books is the Hitchhiker's Guide to the Galaxy series. I know, I'm a geek. Anyways in one of the books, the dolphins, who are in fact aliens from outer space, leave a farewell note to the humans saying "So long and thanks for all the fish".

Today the Fed Central bank lowered the rate by 25 basis points. And the US market rose in spite of high oil prices and ongoing housing slowdown.

So I checked my 401k and it gained $2,093.82 today. So I want to say "Thanks Ben Bernanke for the fish!"

Google GaGa - $700 Milestone

2007-10-31T15:56:00.000-07:00

Google hit $700 today, a milestone. There are people kicking themselves for not buying GOOG. For me, I know my risk tolerance, and I prefer investing in the stock market via mutual funds, ETFs, or indices.

Stocks zooming to the stratosphere are good for headline news and dinner party bragging. But I prefer boring mutual funds, ETFs and indexes like the S&P500. It's like the story of the Hare and the Tortoise. Over the long run, I've learned that I just need to grow my investments at the market rate. Don't need to find the next Microsoft, or Google, or Wall street darling.
The important thing is to stay invested over the very long term.

For my financial health, I follow these guidelines
1. Dollar cost average. I participate in the 401k plan at work and it invests bi-monthly. This gives me an average price for the securities I buy. Another nice thing, is I don't even miss it because it gets automatically deducted from every paycheck.

2. Don't be too greedy - Don't put all your eggs in one basket. So even though you work at a great company (GOOG?) and the stock is shooting up, don't be greedy. Invest your 401k in mutual funds, indexes, or ETF, don't put it all in the company stock where you work. All it takes is a financial implosion like Enron and all your retirement hopes blow up. Or maybe some scandal like backdating, and poof!, your portfolio got a free buzzcut!

Ask yourself, if GOOG is unstoppable, why do the founders consistently sell x number of shares every quarter? Because they are smart, and they know the importance of diversification. So don't put all your investments in individual companies. Learn from the dotcom bust. (Some people thought buying MSFT, SUNW, CSCO, GE and a few more was enough diversification... duh!)

3. Use other people's brains. I don't have time to research a bazillion companies, especially if they are overseas if I want to invest in Asia, EMEA, or BRIC. If you can't find an index or ETF for that segment you are interested, then find a no-load mutual fund that invests in that segment that has a proven 5 year track record. Let those guys worry about what to buy. Morningstar.com is a good place to start.

4. Spread it Out. Don't just invest in US large cap stocks. Putting money in an S&P500 index is a good start. But remember to also put some money in other "baskets" to spread the risk. Put some in small cap funds, mid cap funds, international funds, and emerging markets.

Check Morningstar to see if the international fund is just invested in large caps, or maybe just invested in a specific countries like Japan, Korea, UK, France. You should look into emerging markets too such as funds that invest in BRIC, or other smaller asian or eastern european countries.

5. Don't forget Land. Don't forget to also have some exposure to real-estate investment. Either by buying properties like a house. Or invest in REITs.

6. Take Calculated Risks. Don't be too risk averse. I know someone who is too scared and invested in CD's, money market funds, and Treasuries. You may feel safe, but you are forgetting your exposure to inflation. During WW2, a loaf of bread was 50 cents, and a car cost about $1000. So you need to be invested long term in the stock market, in order for your money to have growth and sustain buying power.

7. Gamble with Money You can Afford to Lose. For some people, they have a need to gamble, maybe by buying penny stocks, or following a hot tip. Or buying multiple real estate properties like Casey Serin. If you have that itch that needs to be scratch, then take out a small amount and use it as your "CRAZY" money. After you lose that money, hopefully you will learn some valuable lesson about risk.

8. Adjust SLOWLY Over Time. I've found that as I mature, and learn more about investing, I've needed to adjust the baskets where I have invested. So for example, if you have a starting portfolio looking like this.
50% Large cap index
20% International index
20% Mid cap index
10% Bonds

Review the performance, and adjust accordingly. Maybe you are too conservative, or you want more exposure to emerging markets. Don't make drastic changes. Just slowly tweak and move sums across baskets. MAKE SURE THERE ARE NO PENALTIES. Some funds have penalties if you are invested less than 90 days or whatever time frame.

How about you? What guidelines have helped you learn real-world financial lessons?

Disclaimer. I am not a financial professional. This blog is just for entertainment purposes. I'm just a working stiff with some investments in 401ks, roth IRAs, and a mortgage. You should contact an investment professional before making investment actions.

Spending Habits of Various People

2007-10-29T11:05:00.000-07:00

"Talk is cheap" is the well known adage. To see what people really value, look at what they spend their money on.

For me, I enjoy eating, so I like going out to eat on the weekends. I guess that's my weakness. Sushi, Thai, Chinese, In-N-Out burgers (double-double with animal-style fries). But I also put my retirement as high priority, so I max out my 401k every year.

Other people like watching TV, so one friend got a 3 thousand dollar 45-inch Sony LCD HDTV. He's also a gadget freak, so he has the iphone, appletv, ipod, macbook, etc.
Another friend got a 60 inch Sony HDTV.

Another person I know likes to go to the movies, so he goes every weekend to catch the latest flick.

Another person got a boob job. Quite a pricey augmentation too I heard.

Yet another person is very fitness-oriented, so he buys expensive gear and clothes from REI.

Another friend I know is a photography nut, so he has about 20k in photography gear. And a bimmer, which he doesn't drive.

Last saturday, someone was sharing that their uncle has a Land Rover, but it's so expensive to run. It guzzles seven gallons per mile, so it stays parked most of the time.

Another person I know doesn't have a lot of expensive "things", but he has travelled all over the world. Australia, Israel, Jordan, Brazil, Chile, Easter Island, London, Paris, Alaska.

What do you spend your money on?

MicroFIXED

2007-10-24T00:56:00.001-07:00

Hooray the panasonic microwave is fixed! The box is ready for pick up.

Audio Trips

2007-10-24T00:40:00.000-07:00

I have a 40 minute commute, so I borrow CDs from the library, specifically audio books. I like to get historical books, and I get a lot of interesting trivia. Among my favorites are Anne Frank's diary.

I'm currrently listening to "The Osama Bin Laden I Know", in which a journalist has put together stories about America's most Wanted. The author has strictly limited the stories to be either from family members and known friends of OBL, or various jihadists who have known OBL.

Among the interesting tidbits.
- OBL's father died from a plane crash when OBL was 10 years old.
- OBL's father made a fortune with his construction company in Saudi Arabia.
- OBL has many brothers and sisters, around 50 or so.
- His eldest step-brother, Salim, took over the business when his father died. His brother liked disco's and they would take trips to Europe. One time, they were staying at a bed and breakfast. The bnb owner said they had suitcases full of white shirts from designers, and they would use them only once. They also parked their Limo illegally, the bnb owner said they did not care about the daily fine because they had so much money.
- OBL started getting involved in jihad by funding NGO-like services in Pakistan and Afghanistan. He went there when the Russians invaded Afghanistan. Many eyewitnesses said OBL was a soft spoken guy who was not very impressive. But he was very religious and very dedicated to Islam.

The audio book consists of about 12 cd's so I'm slowly going thru them... stay tuned.

Eggstra Large

2007-10-23T23:38:00.000-07:00

I was talking to my cousin K this weekend. He works for their family business and he just came back from a convention in Ohio. I was interested in the story of their successful business. He told me about 10 years ago, they had a small construction business, and my uncle felt that the business was not as profitable. So they looked into the egg business.
One reason they chose eggs was because they can easily build the hen houses. They really had no idea how to run an egg business. They kept at it and pretty soon they also got into selling chickens. Then after that they also went into selling pork.
Another thing was they never stopped looking for ways to improve the business. His brothers would come and find out about the new feed formulas for the chickens. They get better equipment to incubate the eggs. They even look at the optimum altitude for the egg farms.
They had the management know-how to grow past the "family business" stage. There are many family businesses that want to keep tight control and never let "outsiders" into the executive level. They have many loyal employees who have climbed the ranks over the years. And they also recognize the need to hire outside the company to get the right person. He says they hired one guy from Australia to manage one of their businesses. Nowadays my cousin is on the board of directors and does not handle the day-to-day operations anymore.
Today they are now the number 2 chicken company in the country X. He says they sell about 130 Million chickens a year. Even though they are very successful, they are still grounded. They do not spend extravagantly, and still very nice people.

Don't Throw Away Receipts

2007-10-22T11:38:00.000-07:00

Our microwave died last week. We only bought this in Feb 07. This was a bit surprising since it was a $150 microwave. Luckily we kept the receipt. So it was easy to get it serviced. There was even a local Panasonic authorized service center nearby. They'll call me when it's fixed.

So this reinforces the need to keep receipts for all major purchases. If I threw the receipt away, I will probably have a doorstop.

Another good thing is I bought it using my AMEX card, so AMEX will double the warranty to 2 years. And I feel I may be needing it.

Losing something makes you appreciate it more. A microwave is indeed a very convenient appliance. I was just thinking about the speed and convenience this box provides. It saves time, and you can leave it unattended to heat your food. When our microwave died, I immediately had to go and get a replacement. It goes to show how useful I think it is.

Stop Paying Taxes ... Like the Amish

2007-10-19T18:29:00.000-07:00

Well, well, you learn something new everyday. Found this series of articles on Slate focusing on laws and how they are selectively applied. Did you know that the Amish do not pay Social Security taxes?

Anyone want to try this? I would think I can make more money investing the money today myself, and I promise not to accept SS payments when I retire.

Net Worth Confidential

2007-10-19T14:45:00.000-07:00

It's interesting to compare one's situation with others. And many pf bloggers have a running total of their net worth. People in our society are open about sharing many intimate details about sex, crime, addictions, yet somehow we are shy about letting people know about our financial situation.

As background, I'm in my late 30's and married. Been saving and putting money away since I started my first full-time job about 10 years ago. I think compared to the average American we are on a good track record.

So I'm not ready to give my full net worth details yet. We have several 401ks and roth Iras and also equity in in our house. So far so good. Our only debt is our mortgage, and a car loan.

Pyramids of Gold?

2007-10-19T14:31:00.000-07:00

I came across this article on Yahoo Finance about annoying networkers. Made me think of the several people in my life who have tried various get-rich-quick schemes. "Sign up early" and get rich recruiting people to sign up after you!!!

I'm glad I did not fall for those.

My relative tried selling Tupperware, scrapbooking, perfumes. As you know these companies urge you to have parties where you invite friends/relatives/coworkers... then try to sell them stuff. I'm not that comfortable with selling direct, so these businesses never attracted me.

Another relative tried Nu Skin, Shaklee. Still no success in that after putting in a lot of effort and money.

Another friend tried Amway. Another friend signed up selling board games...

An acquaintance I know got out of the military and started selling vitamins. The claim that the gel capsules are better for absorption. And she convince another friend to sign up.

I'm glad I didn't sign up to these things. It's not my style to approach people and sell things. I've always considered myself a realist, and street smart. I'm going to grow my investment via my 401k instead and use the magic of compounding returns.

What about you? anyone have stories of multi-level marketing schemes and pyramids?

Don't Panic!

2007-10-19T12:32:00.000-07:00

The US market is down big today. The Dow is down by over 200 plus points. Lots of bad news this week making everyone jittery.
- Bomb blast in Pakistan kills 100 people in Bhutto procession.
- Turkey continues to saber rattle. Saying they will send troops into northern Iraq to fight Kurdish separatists.
- Oil hits $90/barrel record high this week
- Bank of America reports lower profit due to exposure to subprime and bad investment banking moves.

So what to do? Sell your mutual funds and stocks? From my experience, DONT PANIC!

It's not a good idea to make drastic BUY or SELL moves during turbulent days. Just review your holdings, and review why you hold these investments. If you are investing for the very long term, ie for your retirement 10,20, 30 years away, then stay calm.

Are you diversified?
Are you too concentrated, and have huge sums in a single company stock? Then consider the fate of Enron employees. Learn from history and don't repeat it.
Are you too arrogant? Do you think that you know more about making money in stocks than Buffet, and those professionals in Wall Street?

It's not good to be trading when you are agitated. As long as you are diversified and your investments are not concentrated, then it should be fine.

Save Money, Ubuntu is free

2007-10-18T16:49:00.000-07:00

Ubuntu has just released the latest version of their operating system today. For novices, Ubuntu is a flavor of Linux from Canonical. They are a competitor to Windows and Mac OS. Ubuntu strives to make Linux easy to install and use - PLUS they are free to download and install. They let users try the software first via booting off the CD, and if you like it, you can install it.

I tried their last Feisty fawn release, looks like I'll give this version a try too.

For users who just browse the net, Ubuntu comes with Firefox, which is my favorite browser.

Debt in Suburbia

2007-10-18T10:48:00.000-07:00

Money magazine talked to 3 couples in suburbia on how much they make and how much they save for retirement. They are mostly in their late 30's and they have 401ks. They talk about the peer pressure of keeping up with the neighbors with cars, vacations, toys.

Their stories remind me of the tale of the ant and the grasshopper. The grasshopper is happily spending his summers enjoying, and not saving for the future, but the ant works hard and saves food for the coming winter. I think the Wrights have a good start to saving for a comfortable retirement.

Lessons for My Daughter on SAVING

2007-10-17T16:45:00.000-07:00

When I was very young, my parents opened a savings account for me at a nearby bank. I guess I was taught early to save. Now that I'm an adult, I know that just putting money in the bank is not enough because inflation is going to eat away the earning power of your money.

As a parent, I hope to teach my daughter how to handle her money well. We're the adults now. So we've started talking to her about money. Of course make sure you explain things appropriate to their intellect. For example, I tell my 4 year old daughter that we can't buy everything she wants in the toy store. We tell her we have to save money for the next trip to see Mickey at Disney. She's beginning to think about money at an early age.

Saving money in a bank is not enough because most big banks just give really puny interest rate -- around 1% or less. It's crazy!! Don't be a sucker- make your money work harder. Savings accounts are good for parking your money that you need very soon. If you need the money within 1 year, keep it in a savings account. 2 years? yes. Don't risk money you cannot afford to lose.

Need the money 3, 4, or 5 years away? Let's think about that.

Instead of just a POSA, plain-old-savings-account, you should at least look into opening an account at a reputable online bank. These online banks offer much higher rates, almost 5%. That's because the online banks have few employees, no pensions, and no leases to pay. So they pass the savings to you. ING Direct is one bank to park your savings into. Avoid POSA's.

Living Trust For Dummies.

2007-10-17T16:20:00.000-07:00

We recently got our act together to get a Living Trust. A living trust helps to smooth the process should the unexpected happen. Aside from the living trust, we are also doing our will, and power of attorney documents set up. We have a young child, so it's good to have a plan in case we both accidentally die. Many people prefer not to talk about dying, but we decided to be proactive and do something about it.

Here is a link that explains what is a living trust.

About This Blog

2007-10-17T14:45:00.001-07:00

Welcome to Yet Another Money Blog. Yes, there are gazillion people blogging about money and how they save money, spend money, pay debts. Here is my blog focusing on money as well.

I hope to share my successes, failures, and experiences handling money. I have a house mortgage, a 401k, a Roth Ira, stock options so I hope to share what worked for me.
I'm not saying I have everything figured out, but I'm saving for my future retirement and saving monthly for that future goal of getting out of the rat race.

Join me for my travels with money.

Yet Another Money Blog

Norwegian Math

Your Nest is NOT a Nest Egg

Craigslist ipod deal

Teaching Kids About Money

Faucet deal

The Experts Speak: Survived 2007? What to do in 2008

Bonding With Your Money

George Foreman Ipod Grill -Whaaat??

Movie Night

Costco Observations and Crystal Ball

Wastrel Show Rocks

Iphone Jailbreak

Thankful Part 2

Thankful

Frugal trip to Yosemite

Living Trust Creation

Motley Fool is Dead (to me)

Thanks Ben for the Fish!

Google GaGa - $700 Milestone

Popular Blogs with Gazillion Readers

Spending Habits of Various People

MicroFIXED

Audio Trips

Eggstra Large

Don't Throw Away Receipts

Stop Paying Taxes ... Like the Amish

Net Worth Confidential

Pyramids of Gold?

Don't Panic!

Save Money, Ubuntu is free

Debt in Suburbia

Lessons for My Daughter on SAVING

Living Trust For Dummies.

About This Blog