ten tips for new bloggers

As a grizzly old veteran of the blogging business (3 months on this blog but 3+ years on a previous one) I have a few ideas about what makes a blog successful or not, at least in the early stages. Part of this knowledge comes from running a blog for years and years and years… with no readers. I then blew up the site, refocused on different topics, changed the way I approached building a blog, and voila! Readers. My site is certainly no Zen Habits, but the traffic levels are continuing to trend upwards. Here are ten tips on how I did it:

Get a domain name. I know that not everyone think a domain name is a reasonable expense, but your site will be taken far more seriously if you register a domain name. I kept a blogger account for years, but once I switched over to using bripblap.com I think people took it more seriously. I’m not saying you have to host your site and start using WordPress if you aren’t ready to, but at least get a domain name and have it redirect to your blogspot.com or wordpress.com (or LiveJournal, etc.) blog.

Leave comments. I like getting comments. The old advice “give and ye shall receive” is completely true in this case. If you leave meaningful, insightful comments on other blogs, those bloggers and their readers are more likely to come visit your blog and leave comments. Maybe not at first, but keep plugging away. I know that there are a few sites in the blogosphere that have very active readers who love following comments – The Simple Dollar always has dozens of comments for even the briefest posts.

Find out what other bloggers in your field are reading. One of the first exercises I did when I decided to leap back into blogging was to go to a few of the “big names” in the fields I’m interested in (personal finance, parenting, health, environment, career, and blogging) and go through their blogrolls. Those blogrolls are there for a reason. I identified the blogs from the “big guys” blogrolls and kept working my way down. I found a few gems here and there, many dead blogs and a few that simply didn’t appeal to me. That exercise gave me an idea of what people find appealing in those areas and helped spur me on some topics.

Post daily. This one may irritate people, but don’t go more than 24 hours without a post. If you use a free blogging service, this may be difficult, but WordPress lets you load up posts for future publishing. Even if you are going to Antarctica for two weeks your blog can look like you never left. This is important. Many fine writers’ blogs I’ve come across start off strong then trail off over time to four posts a week…three…one every two weeks…dead. However, avoid the temptation to leave “oops, sorry, busy, no time to blog!” posts to fill space. I did that once myself and saw half of my RSS subscribers unsubscribe, and it took me a week to build readership back up to where it was before I did that. Even if you write a three-line post (“here’s a great tip on how to clean countertops: use white vinegar and water mixed 1:3 in a spray bottle! non-toxic, too!”) people will keep coming back.

Don’t reinvent the wheel. Most browser users are simple folk. When they come in from a hard day’s working the soil – figuratively speaking – they don’t want to figure out that your site uses bold lettering to indicate hyperlinks, a big book icon to subscribe to RSS or cursors that turn into butterflies when you click something. They want blue underlined hyperlinks, the big orange icon and no further monkeying with their browser setup. Just don’t do it.

Keep the site clean. I think most people understand that pop-up ads, 5000 adsense links, endless widgets and noisy graphics distract from a site. The most popular sites can get away with being visually busy not because they arranged it just a little better, but because they have great content! A new blog doesn’t have that luxury – a sloppy design or aesthetically unpleasing design will scare people right away before they get a chance to become readers. At first, keep the ads and widgets and fancy text to a minimum.

Don’t use partial feeds. I understand that most bloggers don’t get any ad revenue if you don’t visit their site. I don’t. However, I am happy if someone signs up for my feed, and it’s up to them to come to the site on their own time. I try to offer other resources at the site to lure people in, but if not, fine. I think a partial feed in your RSS feed is a none-too-subtle bash at your readers. I don’t subscribe to any partial feeds, personally. Too often I want to skim through my Google Reader rather than flipping from site to site. If I find something good, I’ll flip over to the site and leave a comment, but I want that to be by choice, not because I’m forced to go.

Make yourself accessible. If you want to be the mysterious X-Blogger and be anonymous, that’s fine. If you do decide to do that, though, set up an email account at Gmail or Hotmail or Yahoo like “mysterious-x-blogger@gmail.com.” Don’t keep people from emailing you just to remain anonymous. Even if you aren’t anonymous, make sure that you allow people to contact you very easily. Keep a contact page or put your email on your site (here’s a handy site to generate email logos to help dodge spammers). Make sure you reply to every email, even if you don’t have much to say other than “thank you for reading!” People want that feedback, and if they get it they’ll be more excited to keep coming back.

Don’t do link posts. If you want to write a paragraph mentioning a URL somewhere else, fine. Make sure you explain where the reader will go (e.g., “warning! PDF link!” or “read my article about quasars here”). Most people don’t like being told to read here and here and here for more information. A blog that’s filled with one-line posts (“hey, check this out! <EOM>”) should be moved to Twitter or Tumblr.

Spellcheck, grammar proof! I know people hate being told they need to spell correctly. An occasional typo is fine. I recently visited a blog that prominently displayed “Please visit our sponsers!” towards the top; a big banner that you couldn’t miss. There is really no excuse in this day and age for misspelling words. If you have trouble with “there” versus “their” or “it’s” versus “its”, spend a little time with Strunk and White. Not everyone cares as much about spelling as I do, true – but do you want to lose readers because they came to you’re sight and wrote someting tuff to follow their? It’s annoying enough to me that I’ll move right on.

As a final bonus tip (#11) I will tell you the most important tip on starting a blog: love the subject. I liked (not loved) politics, so I started out strong on a political blog, but I found it really just made me angry and frustrated after a few years. I love writing about all of the topics I cover now. I would do it for no readers, honestly. But I love the feedback and it does exactly what it says – it feeds readers’ interest and enthusiasm straight back to me and helps me develop even more passion for what I write about. If you don’t like personal finance, don’t blog about it. If you get bored by productivity writing, don’t do it! If you love astronomy, don’t try to blog about the market just because you think that’s the way to make money. I realized that I’m passionate about learning about and teaching certain subjects and there was no reason not to blog on them. I took some unrelated topics and started other blogs (on movies and books) and eventually as I get into more and more of a groove I’ll start others (maybe on other topics that wouldn’t quite fit Brip Blap like food and travel). But I have decided never to worry about starting a blog on auditing (my profession) since I realized I have very little enthusiasm for it as a writing subject. I’ll stick to the fun stuff!

Now go out there, start a blog (or update your existing one) and let me know if any of these tips helped you out, I’d love to hear about it.

brilliant to-do hacks

I use a Moleskine notebook to capture my to-dos. If I think of something I need to do, in accordance with Getting Things Done I capture it immediately in my notebook. This is fine if your task is “sign up for CPR class to get recertified” (an actual to-do of mine). Sometimes a task recurs, though. One of mine, for example, is “water plants.” Since they are just decorative climbing vine type things, I need to remember to water them every two weeks. More than that seems to do more harm than good. Less than that will kill them.

So my terribly simple hack to merge my recurring to-dos with my notebook is that I put all of my regular recurring to-dos in my Google Calendar. I have Google send me an email the day a recurring task is due, and I write it in my Moleskine. This may seem like a rather minor problem and solution to some, but it was the final step in letting me eliminate any worries about getting things done.

One other quick hack is needed when I don’t have my Moleskine on me. In that case, I do one of the following three things.

If I have my cellphone, I call Jott. Jott is a nifty service and if you don’t have an account yet, you probably should (it’s free). It is a voice-to-email application that takes any voice message (“buy eggs”) and emails you a text version of that message. I have found it’s about 90% effective. Some words get garbled, but I usually blame that more on AT&T or ambient noise than I do on Jott’s software. Once I am back at a computer, I transcribe my to-do from my email to my Moleskine.

I write it down on another piece of paper. This is an obvious step that sometimes people aren’t very good at. I find that if I’m in a meeting and someone says, “Brip, remember to put the correct cover sheet on that TPS report” I’ll remember to write it down if I’m walking out the door and back to my desk. If someone says that to me and then the meeting continues for another two hours, I will forget. Writing it down and then IMMEDIATELY moving it over to my Moleskine the first chance I get is critical. A simple hack, but terribly effective.

I remember it. I have a mind like a sieve except for a very disturbing ability to recall minor details about every movie I’ve ever seen. Remembering Arnold Schwarzenegger’s pronouncement in Conan about the three best things in life (see the end of this post for the answer)? Easy. Remembering to buy orange juice? Need to write it down. Yet sometimes I do manage to remember things. Not too far out, and I prefer to write them down once I have the chance, but I will remember to take the trash out, or to turn off the stove. At least so far. I have used this book to improve my memory – it works.

These hacks may seem trivial, but in a sense I think any truly organized person goes through a few trivial phases before getting organized. First, they decide to get organized; second, they arrive at a system that works for them to get organized (where I’m at) and third, they actually implement the system and stay organized. If you aren’t comfortable with your system, no matter how fancy it is, you will never get organized. That’s where I was with my Treo. I just never managed to fully utilize it to manage my life. I think now I’m finally comfortable with my solution.

Oh, and Conan‘s list of the best things in life? To vanquish your enemies, see them driven before you, and to hear the lamentations of their women. Hmm, now does that go in my @vanquishing or @conquering category?

Brip Blap around the web

As part of my effort to keep growing Brip Blap, I’ve written a few guest posts. I was very, very grateful to be given the opportunity to write a couple of guest posts this week for two great blogs, and I’m looking forward to writing more guest posts and hopefully accepting some guest posts on this blog. Please take a few minutes to share the click-through site visitor magic for my two hosts:

and the big one, which stunned me, frankly:

USA Today – Camping Frugally

Remember the big book giveaway ends tomorrow, so there’s still time to enter! And feel free to visit my new Amazon a-store: Brip Blap Books. It contains books and resources that I recommend for personal finance, productivity, organization, child care and so on – check it out even if you aren’t buying anything right now! As a final shameless plug, I also have two other blogs: Brip Blap Movies and Brip Blap Books. Brip Blap (this site) is my big baby, but I’m going to keep plugging away at the other two, as well!

raises – are they for suckers?

If you work for an employer, chances are that you get paid a fixed amount and it is increased every year. Chances are also good that you are being paid in money, which is subject to inflation. The result is probably that your real wages are probably stagnant. As the New York Times pointed out recently:

Americans earned a smaller average income in 2005 than in 2000, the fifth consecutive year that they had to make ends meet with less money than at the peak of the last economic expansion, new government data shows.

Total income listed on tax returns grew every year after World War II, with a single one-year exception, until 2001, making the five-year period of lower average incomes and four years of lower total incomes a new experience for the majority of Americans born since 1945.

Go read the article before it goes in the (pay to view) Times archive.

I calculated my own raises, year over year. My best year was a 62% raise, and my worst was a three-year tie at 4%. The 62% raise was an exception to the rule. I left a stable job in a small Southern city, Memphis, and moved to the gargantuan metropolis of Moscow and received, in effect, hazard pay. The actual raise in real terms was even more, because I didn’t have to pay US taxes on it.

Over the last 5 years, my average annual raise was 5% – so my salary this year is 27% higher than my salary in 2002. For the last 5 years, the inflation rate was 14.29% (inflationdata.com). Therefore, my real purchasing power increased approximately 13% over 5 years.

This is not tremendous growth. If you had an investment that had returned no more than 13% over five years (more or less 3% annually) you would probably dump it. Isn’t your career an investment of sorts?

I am a consultant, so there is no real possibility of huge upward leaps in my salary unless I go back to a salaried job. I was a senior manager when I snuck out of the workforce and into consulting, so I would probably go back in as a senior-level manager or a very junior executive. I know from talking to various investment bank clients that I already make more in base salary than an experienced vice president, let alone a junior one. The bonuses are much larger, but are certainly not guaranteed. So while I might eventually hit the big time executive salaries, chances are good that the 4-7% kind of range would continue. Another consideration is my time, since as a junior executive I’d probably be pulling long hours trying to prove myself. I have grown accustomed to my consulting “8-‘n’-done.”

So if you work in a salaried job and love it or feel that you are gaining valuable experience, feel lucky. But if you are expecting to become rich as a salaried employee, sit down and calculate your raises over the last five years, and honestly assess your chances of becoming an executive at what you do. I think you’ll find that while being employed can maintain your standard of living, it’s unlikely to make you wildly rich.

How can you become rich – and should you want to? Coming soon…

another drone in the Moleskine army

If you spend much time reading personal productivity blogs or personal finance blogs, you’ve probably heard people fussing constantly about their precious Moleskine notebooks. I always thought it was ridiculous that people went on and on about them like they weren’t just notebooks. I was using the little spiral-metal reporter notebooks and that was working just fine.

Then it happened. I violated half of the things I preach in this blog. I was on vacation and window-shopping at a bookstore with Bubelah. There, in a little display, was the infamous Moleskine notebook. I made a fatal mistake and thought “well, I could just pick one up and look at it and see what all of the fuss is about.”

It was light and sturdy. The pages were nothing like regular paper, rough and bleached white. They were smooth and cream-colored and looked elegant. The ad proclaimed it the notebook of Hemingway and Matisse and Van Gogh. I knew that if I had one, I would “join the club.” I was on vacation and wanted a souvenir. I felt the Amex struggling in my wallet (an uncomfortable sensation) and I was lost.

A little bit of background is in order here about my personal productivity habits. For years I used a Treo 90 (no wireless capability) as my organizer. Dates, contacts, memos, everything went in my Treo. I really liked my Treo, and it served me well on many a boring business trip. I never had any trouble syncing it up with my desktop and generally there was nothing it couldn’t do.

However, after four years of heavy use my Treo started to fade a bit. The battery needed recharging constantly. Most importantly, I found myself needing it less and less. I left my heavy-traveling job and started consulting, a job where I am seldom more than an hour away from a computer. Google introduced a huge mix of free applications that were wonderfully searchable and easily accessible – Gmail in particular, but also Gcal and Google Docs and Spreadsheets. I found that since I was sitting at a computer at work and I had a laptop sitting on the kitchen counter at home, it was far easier to access all of that information on line. Plus, the integration of all of these applications made re-entering info in the Treo painful. When someone emailed me their address, I didn’t really want to reenter it in my Treo when I could click one link and put it in my Contacts list.

So I found myself gradually drifting away from my Treo, and finally put it away a few months ago. One process didn’t lend itself well to online work, though – my to-do list. I tried a few applications, and several were very good. Remember the Milk is excellent. But I wanted to have access to my to-do list all the time. I thought of carrying my Treo around just for that, but that seemed excessive.

The past few months I tried carrying around a little wire-spiral notebook but it just didn’t appeal to me. My dad has done this for years, with great success, but I kept forgetting to write in it or check it. Eventually I was going to have to find something to manage my to-do list, because I can’t rely on my brain to track even 2-3 to-do items at a time, much less my usual 40 or so. I like to write down

Enter the Moleskine. It may just be temporary infatuation, but I love writing in it. I love checking my notes. I love crossing things off my to-do list in there. To this point, it has made my to-do list a breeze. I can’t imagine switching back to a regular notebook. The negatives are that they are of course expensive, they are habit-forming and maybe a little pretentious. The negative for you, the reader, is that now I’m one of those people who will pepper you with anecdotes about my Moleskines like I’m crazy woman with 16 cats talking about Mr. Whiskers, the feisty one. I irritate myself, in advance. But it’s true – they are great.

The moral of the story – stay off the crack, kids. Once you try it, you’ll be hooked for life.

tripping the carnival fantastic

Once again one of my posts slipped past the judges and ended up in the Carnival of Personal Finance over at Free Money Finance. Check out FMF first and then read the other stuff. Mine last, since if you are already a reader of Brip Blap it’s nothing new to you. This time it was my post 6 Ways to Retire Poor.

As always there are more articles there than I will manage to look out, but just to highlight a few:

I liked Fabulously Broke and Rich in the City’s post about Pay Yourself and Not Just Financially. This was exactly my take on the hours I spent at my last job before I punted and joined the low-respect but minimal-hours world of contract consulting.

Queercents has City Dweller’s Income Slashed, Happiness Discovered. I had a few weeks off between projects earlier this year and frankly it was wonderful. I was worried about the money at first but I live far enough below my means that we didn’t even end up touching our emergency fund. We abruptly stopped our unnecessary expenses and spent a lot of time just enjoying a quiet routine.

Grad Money Matters irritated me with <Sarcasm>Ah… The Joys of Home Ownership </Sarcasm>. I know this is mostly about a microwave, but substitute just about any fixed feature of a home and you’ve got the same headache.

One of the best features of these blog carnivals is that it gets you to visit blogs you might not otherwise have visited – I had never seen any of these three (although I had noticed The Simple Dollar linking to Queercents a few times), and I thought all of them were quite good. Check ’em out.

Sunday poll – popular or rich?

Another Sunday poll. This time I am curious about whether you actually visit the blogs you read, or just read posts through RSS. I read through RSS because it’s easier at work. Yes, I read blog posts at work, sue me. I do feel that I’m missing a lot by not directly visiting the sites. Some of my favorites have a lot going for them that you don’t see in the RSS feed – The Digerati Life is full of pictures and graphs; The Simple Dollar always has a busy comment section on every post from an active community; Get Rich Slowly has several non-blog areas that are well worth looking at; and on and on. At almost every site, if you read RSS only, you are missing:

  • Comments
  • Blogrolls, other sidebar-type information
  • A more pleasant graphic experience that tells me a little bit about the person
  • A chance to support the blogger if they are running ads – that’s a big one

So here is the question – if you could be in one of these two situations, which would you prefer?

1. Your blog has 19,000 RSS subscribers, making it one of the largest blogs out there. It has developed a huge following, but they just read and don’t comment. When people do visit the site they never click the ads; advertising revenue is a very low amount and doesn’t cover much more than the coffee you need to keep you awake early in the morning while you crank out posts.


2. Your blog has very few subscribers and hardly ever gets posts or repeat visitors, but your click-through rates on advertising are phenomenal and you make a significant amount of money (not retire-and-blog-full-time money, but enough that you can pay for your mortgage with blogging, for example). The information is useful, but more of a one-off type of information; maybe your blog is “hot stock tip of the week” or “credit card offers.” It is quality information, but not the kind people keep coming back for.

What do you think?

7 things to consider before you buy stuff

Thoreau said that we will be “rich in proportion to the number of things which we can afford to let alone.” There are 7 questions you can ask yourself every time you think about buying any stuff. By stuff, I mean anything which is not directly required for the continuation of your existence. Food and water are not stuff by that definition. A new pair of shoes is stuff. A heavy winter coat if you live in Vermont is not stuff (but one with a fur collar might be).

Can I afford this stuff? Run down this checklist: I have paid off all of my debts; I have put money in my retirement accounts; I have paid all of the monthly bills; I have added to the emergency fund; I have healthy natural food for my family; I have shared money with those less fortunate than me. If you went down that checklist and answered “no” to any one of those, you probably don’t need stuff.

Do I need this stuff? Sometimes you need to buy stuff, but need is a relative term. If you have a hole in your gloves and winter is coming on, you might say you need new gloves. Fair enough – no one deserves frostbite. But you would have to ask yourself if you really need new gloves, or if perhaps you just need someone to sew up the hole in your current gloves. If I have holes in my underwear, though, I seriously doubt I am going to get far sewing them back up. I need new underwear. The concept is relative.

Will this stuff create or reduce clutter in my life? How often does this happen: you go to the store to buy a pan, and when you come home to make room you throw out an old one? Not often, I would imagine. Sometimes – maybe the old pot is horribly scratched from scouring and it’s no longer useful. When you buy new books, do you give away old ones? Almost all of the stuff we buy creates clutter. In general, every time you buy new stuff some old stuff should go (which is not a good use of your stuff).

Does this stuff replace some other stuff that is still functional? Related to the point above, stuff should not replace functional stuff. I own a very old coffeemaker which still performs its primary function – making coffee. I would love a newer coffeemaker with more features, but at the end of the day I would hate to buy a new one while the old one still works.

Does this stuff somehow make a task or activity easier? We owned a toaster that burned toast. We did not like using it and making toast became a real annoyance. Finally Bubelah went and bought a new toaster. Now we can eat toast when we want it, and it isn’t burned. We also owned a horrible vacuum cleaner that cleaned nothing. We bought a new one and now we can actually pick up pieces of dust weighing more than .0000001 grams.

Can this stuff help someone? There are times when stuff can just be helpful. Better tools are a good example. Flowers for a sick person are another. A better pillow for someone with a back problem. In those cases, the good done by the stuff outweighs issues of clutter or need.

Will buying this stuff hurt the environment more than it will help me? I cringe every time I buy a piece of consumer electronics – my USB flash drive is a good example. A flash drive is a tiny thing, maybe 2-3 inches long. When I bought my flash drive, it arrived in enormous plastic packaging 100 times the size of the drive – a huge rounded disk of hard, thick plastic. That plastic will go in our plastic recycling bin, but I don’t kid myself to think that all of that plastic is 100% recylced and finds its way back to new USB flash drive packaging. A large portion may end up in landfills or our oceans or our atmosphere. The oils and energy used to create that packaging are gone forever. Buying that USB drive, because of the packaging, was an assault on the environment. Many items are like that – and in fact almost all. In the UK there is a movement for consumers to rip open packaging as soon as they buy it, in the store, and throw the packaging on the floor. The purpose is to force businesses to start demanding more minimal packaging from manufacturers. I don’t know if that would ever catch on here. To be honest, I would be intimidated to do it. But it’s a good idea.

Is this high quality stuff or junk? Junk will need to be replaced soon, violating #3. Junk may not work correctly and help make an activity easier, violating #5. And it definitely violates #6. High quality stuff will last longer and do the job better. Knowing what’s high quality is often a tough question – maybe the JC Penny suit is tougher and more classic in appearance than the pink-pinstriped Hugo Boss, for example, making it of higher quality/durability. Evaluate this on a case-by-case basis.

I buy a lot of stuff and certainly don’t pretend that I’m perfect in this regard, but I am trying to move in the right direction. I try to ask myself these questions. If I can’t always answer them because of the “buy me buy me” chorus in my head, it doesn’t make me a bad person, just a person who still has room to develop.

find a nickel, pick it up

A nickel is only worth 5 cents, according to the latest market data. It would take about 62 years for that nickel to become a dollar if I put it in a high-yield savings account. Even if the market grew at 10% annually (which it won’t) it would take more than a century for that nickel to be worth $1000. On the other hand, by the time of America’s Quincentennial celebration it would be worth almost $94 TRILLION in today’s dollars. So yes, as Albert Einstein said, the greatest mystery in the universe is compound interest (although I suspect hairbrushes might also have eluded him).

I noticed a nickel lying on the floor of my office this morning, so I picked it up. No big deal. Earlier this morning, I noticed a penny on the ground and walked right on by without taking it. No big deal. Now be honest – if you see a penny lying in the street you probably don’t stoop over to pick it up most of the time. You’re too busy, or in too much of a hurry, or your back is a little stiff or you simply don’t care because it’s a stupid penny that can’t buy anything by itself. When do you stop? For me, a nickel was worth it. I am sure almost all of us would stop if we noticed a $20 lying on the ground. You might look around to find out who owns it, but is there ever a time you might just leave it there because you were in too much of a rush? And how many pennies have you passed on the street in your life – and how many twenties? You are far more likely to see one than the other. 2000 times more likely? Possibly.

Saving is like this. Of course there are the big items:

  • I resisted the urge to buy a plasma TV! $4000 saved!
  • We bought a 3-bedroom house instead of a 4 bedroom house for our 3-person family! $50,000 saved!
  • I drive a 6-year-old Pontiac instead of a brand new BMW! $30,000 saved!

Most of us who are careful about our personal finance are past that stage. We generally know what the big stupid items are, and we avoid them. But do you pass up on the pennies?

  • I don’t like to deal with coupons because it’s too much effort to keep track of them.
  • I buy botted water instead of using a Sigg bottle filled with tap water because it tastes different.
  • I don’t count my change because so what if they missed a penny.
  • I’ll remember to fill up at the cheap gas station next time.
  • If I drop a penny, I have to keep on walking – late for that big meeting at 9, after all.

These are the mental battles you have to fight and win to become truly smart about your finances. Savings opportunities like these are everywhere, and every day people choose to pass them up because they are a little too demeaning or seem pointless. I try to convince myself it is worth the 1.5 seconds of my time to bend over and pick up a penny, and tell myself it is not. That means that I am effectively valuing my time as being worth more than $72,000 per year – $36 per hour. OK, maybe – I live in New York and my time/value equation is skewed. But failing to stop and pick up a nickel would mean I value my time as more than $350,000 per year. Clearly in both cases the investment in time is worth something.

I myself hardly ever count change, and I hate coupons. But despite myself, I am trying to notice little chances like these and take advantage of them. Who knows – maybe thanks to me picking up a penny or five one of my great-great-great-grandchildren will be a trillionaire.

my one money advice (MOMA)

Pinyo over at Moolanomy has started a meme that appears to be making the rounds of the PF blogosphere. He asks “If you coud give one advice, tip, or story related to money, what would you share?” I’ve been tagged by Goldnsilver at My Financial Blog to answer, so here goes:“Resist consumerism”

The American corporate capitalist economy has brought the people of America to dizzying heights of personal wealth. Even some of the “poorest” people in America own cars, televisions and have access to an amazing array of foodstuffs and consumer electronics. I think one of the first battles that anyone has to fight on the road to financial freedom is resisting the nonstop assault of advertising and ‘stuff envy’ that can wipe out your checking account.

The iPhone and the plasma TV. $200 Nike sneakers. Gigantic SUVs for people living in urban areas. Houses with two rooms for each member of the family. Rosemary Thyme Luxury Handsoap. You could go on and on, but they are all unnecessary luxuries. Most of the people in the world would be happy to have A phone, sneaker, a car, a house, soap. In the West we are being bombarded with commercials teaching us to envy those who have slightly more than us. Fashion teaches us that clothes are worthless after a season. All of this behavior is the enemy of frugality, and the cause of debt and a lack of financial freedom.

I have tried to start resisting consumerism. I wanted an iPhone, but I am sticking with my 3-year-old free Samsung phone. I wanted a new car badly a few years ago. I am certainly no saint – I fall prey to consumerism all the time. I bought a Moleskine notebook when a $0.69 pocket spiral would have done. I buy new clothes for work, and I like my DVD rentals. But every time you resist the urge to purchase something you don’t really need to be happy – which is pretty much everything above your basic needs – you are bringing yourself one step closer to financial freedrom which is, I think, the goal of most of us who float around in the pf blogosphere. Not to mention you’re helping the environment – reduce, reuse, recycle.

So that’s my MOMA. I’ll head north of the border and tag Four Pillars and look forward to the Canadian take on it.

6 ways to retire poor

Inspired by this clever little piece on “Six Ways to Waste Money Now” from Bankrate.com via MSN, here are my six tips on how to retire poor:

Don’t set up any automatic investments. Even though dozens of financial experts have recommended it, automatic investments are for suckers. You know when to invest – when you have a little bit of spare money at the end of the month! Pay yourself first? I say pay Best Buy or Nintendo or the Cheesecake Factory first!

Use your retirement accounts for loans to buy a house. That money is just sitting there, waiting to be used. There is no sense in worrying about your retirement now – all of that money is just going to sit in there and grow tax free, quietly. Why let it sit there when it could be helping you get a 10% downpayment on a 6 bedroom house for your family of 3? You’ll put the loan back, just as soon as you get out from under those first few mortgage payments, definitely!

Count on becoming a millionaire from cashing in on your home equity. Despite recent events, there is absolutely no reason to think that your $250,000 house in a cookie-cutter suburb won’t be worth $3,000,000 in 15 years. That is the American Dream, right? To live your whole life in a huge house, sell and realize an enormous gain and then buy a brand-new condo right on the beach! It’s foolproof – even though your house has gone up 10,000% in value those condos will still cost what they do today, right? Or you can use your home equity loan to get money to play the stock market and…

Day trade! Just because Jim Cramer, who studies stocks for a living and has access to better analysis and tools than you ever will, can’t beat the market, doesn’t mean you can’t! I don’t remember exactly but I’m pretty sure most of the Fortune 500 Richest Americans are day traders. That’s the way to wealth – well, that and doubling down. Texas Hold ‘Em and hot tips from CNBC – that’s how Warren Buffet did it!

Avoid networking at all costs. Your career is going to progress just fine if you put your nose to the grindstone and properly prepare your TPS cover sheets. Each time you quit a job it is a grand opportunity to moon the boss. That guy you met who works at a place you’d like to work? Lose his email – forget his name the next time you see him. People love that. You will make enough in raises each year to beat inflation, almost! That’s the way to wealth, my friend. Slow and steady wins the race. If you stay with one company long enough, they’ll definitely take care of you when you retire.

Abuse your health. By the time us Gen-Xers retire, surely America will have a cheap, low-cost universal health care system in place. Everyone’s promising one – politicians wouldn’t be making empty promises, would they? So have another helping of fries and wash it down with a Coke. By 2035 they’ll be able to transplant a baboon heart into you at CVS.

Hope those tips helped!

COBRA eligibility – is it ironclad?

If you have ever considered striking out on your own, or worried about being laid off or anticipated more than one month between jobs, you’ve probably heard of (and counted on) the availability of COBRA health insurance. What you may not know is that you are not guaranteed coverage due to a few loopholes, despite what your employer may tell you.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers the right to stay on their employers’ health plan for a limited period of time after a job loss, voluntary or involuntary. COBRA also allows workers to continue their coverage after a reduction in hours makes them ineligible and several other circumstances. COBRA is no bargain. The worker can be required to pay up to 102% of the employers’ cost. A worker might only be paying 10% of their premium right now, so once the employer is not picking up the other 90% the costs can skyrocket.

COBRA generally applies to companies with 20 or more employees. Many people count on COBRA to continue their coverage for a “gap period” between jobs or to give them affordable health coverage when they are leaving an employer and starting their own business. A COBRA plan may not be the most inexpensive plan, but the simple fact is that a big corporation can negotiate a better deal than a single individual can with a health-care insurer.

Fortune magazine had an interesting story involving COBRA . Cerberus Capital Management is a private investment firm, deeply connected throughout the business and political worlds (former Vice-President Dan Quayle is a spokesman; former Treasury Secretary John Snow is chairman). They own dozens of businesses. One of them is (was) Aegis Mortgage, a Houston-based mortgage lender. For the details of the acquisition and Cerberus’ (mis)management of the company, read the article, but the key point was this: when Cerberus decided to shut down the company, they notified the majority of the employees that they would be laid off within 60 days of August 6 th . Cerberus also notified the employees that health benefits would cease August 10 th . The layoffs then came August 13 th (much less than 60 days later) and the reason for the termination of health benefits before the termination of employment became brutally clear: you are only eligible for COBRA if your company has an active benefit plan . By terminating their plan before terminating the employees, Aegis – and Cerberus – avoided having to offer COBRA.

If the employee has to pay the full cost, why would Aegis/Cerberus care? Aegis would still have needed to pay some costs – administrative, for example. Aegis, despite being owned by one of the largest private investment firms in the world, claimed they didn’t have enough money to pay for any single tiny part of their former employees’ health care benefits. Hundreds of employees were suddenly and brutally cut off from even having expensive ‘gap coverage’ before they could find a new job.

If this behavior is not shocking to you, you should probably stop reading. A company may have a good reason not to offer benefits. The umbrella consulting firm I work for offers benefits but I pay a huge chunk (more than 50%) of the premiums. I don’t mind since otherwise they would simply take a larger cut out of my hourly rate, but as with many Americans I would count on my COBRA eligibility at first if I decided to go completely freelance. I never realized that there was a possibility I might not be able to count on COBRA.

Eligibility for COBRA is another one of the “emergency” financial planning items most employees take for granted. You assume that your company will not steal your 401(k) – but my sister-in-law is having trouble getting hers out after being laid off. You assume that you will be paid accumulated time-off when you leave a job – but I was once loopholed out of 2 weeks’ vacation time after a disagreement over which day of the month I officially gave notice.

The point is that if you work for a company experiencing financial difficulty, or you anticipate getting laid off, make sure you know your rights and your options regarding COBRA. This story made me go out and start pricing private insurance. One of my projects for 2008 is to try to find a high-deductible health plan and self-insure my family for the deductible; that health insurance would never be tied to a specific employer and I could simply opt-out. I know that is not a perfect choice but I think having portable health insurance would be preferable to the increasing shenanigans of corporations as they try to avoid paying health benefits. Terribly expensive, but less so than the cost of being uninsured.