linklings, march madness edition

What?  March Madness? It’s only January!  No –  I’m talking about Free Money Finance’s March Madness round 1.  My article, Spend Less than You Earn – the Wrong Way to Think, is battling it out – jump over to FMF and vote in the comments (just say “Game 12:  Wrong” in the comments to vote for me).   The winner of the tournament gets a donation made in their name to the charity of their choice.  My charity is the Russian Children’s Welfare Society – help me help them.

Links from The Money Writers and others:

Where You Shop Could Hurt Your Credit Score and Credit Limits: If you shop at the same place as people with bad credit, your credit score might be hurt – unbelievably stupid logic by the credit card companies.

6 Free E-File Options: It’s that time again – the dreaded “T” word.

Teach Your Children About Money: Lessons Your Kids Should Learn: Kids can’t start learning about money too early – I’m already putting some effort into teaching my son about how money works by letting him pay when we go to the store, and seeing how the change comes back.

Vampire Power Sucking Money From Your Wallet: Buffy? No, a different kind of vampire power. I try to be vigilant about leaving things plugged in but somehow every morning I see a computer left on, or a DVD player, or a cell phone charger dangling from an outlet… not good, for the environment OR my electric bill.

No Hype – The Straight Goods on Investing Your Money: Book Review and Giveaway: I still believe now is a good time to invest, so it’s worth entering giveaways for books on investing if you’re just starting out (although this book might be a little advanced for beginners).

Economic Stimulus Package – What Does It Mean To You?: I was excited about parts of the package and appalled by others – which is par for the course, I suppose. I am nervous about how easy it’s become to toss about 12-digit spending bills these days.

How Worried Are You About Being Laid-Off?: Me? Not at all, since I already am, for all intents and purposes. But I know a lot of people are, and I’m pessimistic that I’ll be returning to my “real” line of work anytime soon.

New Jersey Bill to Require Personal Finance 101 for High School Seniors: I guess falls in the “better late than never” category, but it’s hard to believe this hasn’t been there for the last 30 years (or more).

Image by Getty Images via Daylife takes a look at Jim Cramer‘s “top 5 picks to get you through recessionary times.” It’s not pretty.

A Recession Is The Worst Time To Start A Location Independent Business. Right? Wrong.: I’ve written about a location independent life a few times, and if I were going to do it, now wouldn’t be a bad time – neither Bubelah nor I are working and the kids are still not school-age. It’s something we consider when we’re snowed in and shuddering with cabin fever late at night, at least!

What’s Your Resume Worth?: Good question. Mine is updated but I do worry about the format.

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lending club, my best investment of 2008

I have written about person-to-person (or P2P) lending several times.
The big players in the US are Prosper (currently not accepting new lender registrations) and Lending Club.  I invested a bit of money in both of them.  I was checking up on both of my accounts and noticed a startling fact:  my current rates of returns on these two accounts make them my best two investments of the past year – bar none.

My 401(k) is down a ridiculous amount. My IRAs and brokerage accounts took a pounding, and the only positives out of those are my cash and bond fund positions.  Even other areas which could loosely be called investments are sliding:

  • Home values in the New York area – after resisting the rest of the US real estate bust for a long time – finally started falling, and fast.
  • My contract consulting work dried up – the networking and recommendations don’t mean much when the corporations who usually would hire me are collapsing.
  • Even other side businesses – websites, freelance work, etc. – require a lot more effort for lower returns.

I am not bemoaning my financial situation (I’ve done enough of that in other posts, I think) and I’m not lauding P2P lending as an investing opportunity that you must jump into with reckless abandon, because my results might not be your results.

What I am noticing is that the mantra of “diversify, diversify, diversify” can’t be hammered home enough – even to myself. My index funds are way down – but less than my two individual stocks (mistake)!  My portfolio is down, but not as much as if I hadn’t included bond funds.  My income is down, but not by as much as it would have been had I not had side earnings.  And P2P lending continues to give me great rates of return.  Hindsight is 20/20, but I should have invested more in Lending Club when I had the chance.  That small diversification of my investments at least gave me a few seconds to smile in an otherwise grim year-end assessment.

My other posts about < Lending Club:

photo credit: josef.stuefer

(and no, the photo has nothing to do with the post – I just figured we could all do with a picture of a Leffe)
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how to take abrupt action

Roosevelt ready for big game

Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows neither victory nor defeat. – Theodore Roosevelt

I am an analytical man by nature. Most of us would rather consider all possible outcomes to an event rather than forging ahead with immediate action.  Example?  Here are two cups.  One contains something bad, the other contains something good.  Drink one.

A reasonable person would say “whoa”. Does bad mean something nasty, or something fatal?  Does good mean tastes good, or is it something that tastes horrible that is good for me?  What does “good” mean, or “bad?”  These questions are reasonable, and considering the vagueness of the original proposition quite proper.

Analysis is the enemy of opportunity. Opportunities in life – financial, personal, and so on – are often quite fleeting.  Found a dream house in your dream neighborhood?  Sitting around analyzing the costs and calculating down to the penny the cost of acquiring the house can take so much time that the house is bought by someone else.  Maybe doing a quick 5-second back-of-the-envelope calculation and taking a leap would have secured the house.  You may find the lack of analysis hurts your or helps you, but nothing ventured – nothing gained.  The house may be a little too expensive, but the surest way NOT to find out is to analyze the possibilities until you have no option to buy.

I am sure a number of books and essays have been written on how your family, your education and your profession shape your life. No doubt they do – my family has always been conservative in life (although not in politics), my education took place entirely in the Deep South and my profession of auditing has shown me the awful result of risk one too many times.  Learning to seize risk in mid-life is as difficult as learning a foreign language in mid-life; not impossible but a formidable task.  I don’t think great reward is possible without some risk – and note that I said some risk, not great risk.  Learning how to take some risk is central to success, because without some risk, success is rare and becoming rarer.

photo credit: sakraft1

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who is the hero of your life?

Free Me
While watching the movie Hero I realized that I had a belief that might – or might not – be shared by everyone else. It may sound bizarre.  If you imagine your life as a movie (or maybe a miniseries, we are talking about a long film), who is the hero of your movie?  You, or someone else?

Your natural tendency is to view yourself as the central figure in your story, your life. The only exception might be through a loved one – a spouse, partner, child, anyone significant to you.  But even though I might think of my children as being central to my life now, I don’t view them as the “heroes” of my life.  I still – selfishly or stupidly – view myself as the “hero” of my own life.  I am the one who causes things to happen, who causes things to happen to those close to me, and who can affect the outcomes of events in my life.

Imagining yourself as the hero of your own life is fine as long as you are succeeding, and unbearably difficult the moment you are failing. I wouldn’t expect the opposite approach to be appealing, either – imagining someone else as the hero of your life must either put an incredible strain on the other person or make you feel somewhat helpless.  Yet I know people like this.  I am quite sure the hero of my grandmother’s life, for example, was my grandfather.  My grandfather, a dominant personality if ever I’ve seen one, was a strong and central figure in his family. Maybe that’s just typical of couples where one is dominant; I wouldn’t know, since Bubelah and I are certainly not in the least imbalanced; neither of us seems to feel dominant (yet I still do not view anyone except myself as hero of my own life).

So who is the hero of your life? Is it better if it’s you, or someone else?  Does it matter?  And can it be someone completely unrelated?  Christ, for example, might be the hero of many people’s lives.  I would guess that the identification of the real hero in your life probably says a lot about who you are and how you act.

photo credit: h.koppdelaney

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contracting, freelancing and linklings

Parker Jotter on the Sopranos

This gruesome economy…what fun we are all having.
We started asking around about listing our house and moving, and we were horrified by the depreciation in our home value.  In the New York City area, things have changed – drastically.  Most of my neighbors worked in the financial services industry, like me, and the money has disappeared.  Disappeared.  It’s a scary time in this area, although we all recognize it’s a payback for the 80s and 90s.  The timid are scurrying for new jobs at reduced pay rates;  the tepid are settling for more work at the same salary, and the aggressive are thinking crazy.  My neighbor (formerly a consultant) buckled under to his client and started working as an employee for less than he made as a consultant.  Me – I’m sticking to my guns, aggresively pursuing a new contracting opportunity at the same time I’m hoping I’ll never need one as my “alternative income” takes off.  So far, so bad – the economy is tough everywhere, including blogs.

I haven’t even decided yet for myself what the difference is between contract consulting and freelance consulting is
– is it the length of time served?  The terms?  I guess so far I’ll assume that length of time served is the key.  I’m aiming for shorter assignments that I can perform remotely rather than longer-term contracts on-site.  It’s hard to find the short-term stuff; what I’m used to identifying is long-term (6 month plus) contracts.  Brave new world…

Link it out:

Slow Economy Has More People Learning How to Cook: Count me in – I’m cooking a lot more at home than eating out, although I always knew this was the best way to eat.

The Best Money Blog You Aren’t Reading: A nice find – I’m always interested in new blogs and this one looks like it’s worth reading.

2008 Tax Law Changes: I can’t believe it’s time to start worrying about taxes again – but it is…

What Exactly is Moolanomy?: If you haven’t read Moolanomy yet, you should – Pinyo’s got a great site and is apparently involved with almost the entire internet 🙂

Rich Brother Rich Sister Book Review and Giveaway: I am a fan of Kiyosaki – there, I said it. This book is another book of his that I’d like to read; I didn’t even realize that he had a sister.

Have We Been Sold A Bunch Of Lies About Money?: Ugh. This post reflects a lot of the concerns I’ve had – have we been sold a false bill of goods? Should we have been more cautious? In hindsight, yes. Personally, I’ll get more conservative, because that’s my nature.

Amex Took Care of Me When My Card Number Was Stolen: I love Amex, too. If they aren’t your primary credit card, they should be – they are the best when it comes to customer service and problems with theft (physical or identity). Plus, they have two great reward programs (cash and points).

Our Investment Returns Show Stocks Down 50% YTD

ShareBuilder Review: My New Account: I have more Sharebuilder accounts than I can remember – at least five for my two kids, my nieces and nephews. It’s a great service for the infrequent trader; if I was beginning again today I’d probably start my brokerage there since I don’t trade frequently.

squawkfox ” 6 Words That Make Your Resume Suck: A few great tips from a sharp blog – don’t have a resume that sucks. I can’t see how that would help.

fritz haber: Unintended consequences are horrible – an amazing piece from a fascinating blog.

The Razor’s Edge: Lessons in True Wealth: Sad, in the way that any story about death would be sad, but a great point – life HAS to be about the journey, not about the score. Easy to say, almost impossible for many of us to achieve.

Should You Take a Low-Paying Job? and ” Should You Take A Low Paying Job?: Two good posts on something I’ve considered writing about: should you settle on rates/salaries? I think no… once you move backwards in what you’ll accept, you’re setting a standard for the rest of your life.

The Most Depressing Calculator You’ll See Today: I just added this because I want everyone to feel crappy. Don’t feel like feeling crappy? Don’t click.

Tip #25: Earn more money using your God-given skills\: This post describes where I’m headed – freelancing is tough new area for an ex-contractor (or an ex-employee) but I’m convinced it’s the way to go, short term…

photo credit: joebeone

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did I meet my 2008 financial goals?

seventh sense

In November 2007, I signed up to participate in the first Carnival of Financial Goals.
My goal was a resolution to average $1000 per month in alternative income in 2008.  I updated my financial goals in July 2008, too.   So how did I do?

I’ll throw in a few caveats here. I do have a few “alternative income” streams like dividends and capital gains that I didn’t include in this analysis.  I make a few bucks here and there through other sources that are too small and irregular to mention.  I also did not figure out income on an accrual basis, but instead relied on cash basis accounting.  If you aren’t familiar with that, it works this way:  imagine you receive $600 in May for a 6-month advertising campaign.  If you use accrual basis, that means you make $100 per month for six months; but a cash basis says you made $600 in May.  So this is an inherently inaccurate look at my alternative income.

I did not meet my goal of making $1000 per month during 2008. However, because of my cash basis approach I did exceed $1000 twice, and the average steadily increased over the course of the year.  If I did factor in dividends and other capital gains I would have been close to $1000 for most of the second half of 2008.  Regardless of my fuzzy accounting, I believe that my goal – while not met – is not even close to unattainable, and I expect to exceed it easily in 2009.

Since I’m between contracts in my “main” job right now, the level of alternative income is more important to me now than it was when I set the goal. I am experimenting with QuickBooks (again) to better manage my income now that it’s not coming from a single source.  Understanding the exact amount of income you are receiving is a key component of personal finance – the fact that I don’t have that number in front of me indicates to me that I’m doing something wrong.

Good news, bad news. I think I did all right in comparison to my goal, although I didn’t meet it according to the standard I set.  I’ll set a goal for 2009 – I’ll average $5000 per month in “non-salary” income.  That’s an ambitious goal, but one I need to meet if I plan to stay self-employed; and in all honesty, I need to make more than that if I stay self-employed.  I’ll probably try to make more independent consulting work part of my income, rather than the contract consulting I’ve relied upon.  But my confession is this:  I am both terrified and excited that 2009 might be the first year where my non-salary income exceeds my salary income.  I might just break free of my salary – it’s happening now and it’s nerve-wracking, but it’s exciting, too.

photo credit: woodleywonderworks

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looking through new eyes

I wrote an article more than a year ago in which I said:

…there are three types of music lovers. One loves
music in general, and their [sic] tastes evolve with the times.  Another
loves a specific type of music, and sticks to that type of music over
time.  The third starts out listening to popular music but drifts off
as they get older into calmer music (shifting from Public Enemy to
Kenny G would be an extreme example).

(continue reading shifting tastes)

I was speaking of music in that post, but today (as I struggled to write something) I started to wonder whether the idea that some people are able to evolve and change more easily than others is valid. Do people change, or do people’s beliefs stay the same and external events change?  An example might be your attitude towards investing in the market.  Has the bear market changed your attitude towards investing?  Or did you change your attitude?

I know that I held certain truths to be self-evident when I was younger.  Some I have discarded; some I have retained.  We all have things we believe cannot be doubted by any sane person.  Some are serious:  “investing in the market is the way to long-term wealth for the middle class.”  Some are not:  “the Patriots are evil.”

Every day I try to challenge myself, but I have to admit from time to time that my attempts to challenge myself are actually attempts to reinforce beliefs I already hold. It’s not easy to find things that challenge our beliefs that we’re comfortable with.  I don’t like to think that I’m attached to my own beliefs more than a rational amount, but I probably am.  Whether that’s a good thing or not is hard to judge, objectively.

The only way to really know if you’re stuck in your views and beliefs is to engage other people to challenge them. I find reading to be once way to challenge my beliefs.  My wife and my family and my friends are another.  But I question whether I’m at a stage to question them myself.  I’m not sure if I’ve been so set in my ways that I can’t challenge my own mindset; I’m not sure that I can push myself without external help.  I turn to other people to answer that question, and the answer isn’t simple.  I’m still seeking to answer this myself:  can I change, or do I need others to change me?  I don’t think I’ll answer it today, but I hope I can figure it out soon.

photo credit: piccadillywilson

under new management

Breakfast with Barack

The rumor is that we’ll be under new management later today – and by us, I mean the USA.
I’m sure, like most people, I’ll be watching breathlessly as Joe Biden becomes the first vice-president from Delaware.  It should be a historic moment.  Something else might be happening with the presidency, too.

I suffered from a bad service outage with my hosting provider over the weekend and I spent a lot of time worrying about that rather than writing posts. This is to be expected – I wonder if I have any natural inclination to write if I let something like that distract me, but so be it.  I’m sorry about the interruption, though.

I’ve lost something like 50% of my net value over the last year or so. It’s not a pleasant thought.  It makes you feel like an idiot.  I used to be angry that a relative of mine spent a ton of money on a nice gold watch rather than “saving” his money by investing, but you know what?  I’ve got 50% depreciated stocks, and he has a nice gold watch.  I know that the conventional wisdom was to save, save, invest, invest, but the recent downturn has taught us if you fail, you win (AIG) and if you keep hammering away at a losing proposition, you lose (GM).  I don’t know what the calculation is, but I’m sure it’s going to take me a decade or more of 10% returns to get back to where my net worth was in 2007.  It’s not a pleasant thought for an-almost-forty-year-old, much less someone who is nearing retirement.

Maybe everything will be different now. If rhetoric is matched by action, it will be.  If stasis rules (which I expect), nothing will change.  But in any case we can all be comforted by one thought (forgive me for a moment of weepy patriotism):  today, we’ll see the latest beautiful moment in the experiment that seemed like a radical, impossible dream 232 years ago… the idea that a nation could have an election and peacefully move from one ideology to another with nothing more than a burst of confetti and a few speeches.  I was amazed when it happened in 2000, and 1992, and 1980, and 1976… as far back as I remember.  People who hated (let’s be honest) what the incoming resident of the White House stood for, politically, calmly stepped aside and allowed them to take the reigns of power.

So let’s hope the new management can right our economy and our military and our environment and…a million other things. It’s a long list and doubtless many of these items won’t be addressed in four years, or eight.  But as an American I’m as hopeful as I’ve been in a while, and whether that hope is warranted or not I don’t want it to be disappointed.  Good luck, President Obama.  You’re going to need it.  I hope you get it – for your sake, for ours, for mine.  For everyone.

photo credit: jurvetson

too big to fail

Collapsing Villa
If a company is too big to fail, it’s too big.
If something in your life is too big to fail, it’s probably too big, too.  I have a number of things in my life that can easily be classified as too big to fail:  family, health, income, home, my goals.  For each part of my life that is “too big to fail” I either break it down into smaller, less-likely-to-fail components (for example, my income), take steps to protect it (my home) or make preventing failure a priority (my family).

As one company (AIG) after another (Citigroup) benefited from being “too big to fail”, someone should have asked the question “why are we allowing these companies to become so big, in that case?” Wal-Mart is too big already, for example.  Could it fail and not affect the US?  What happens after Citigroup fails?  Does Bank of America then vault to the top of the “too big to fail” list?  How can anyone sleep at night knowing that the economy has companies whose failure might cause the destruction (or at least degradation) of our way of life?

Yet many of us do the same thing in our own lives. We allow our sole source of income to be our job’s income, making our job “too big to fail.”  We put too much of our net worth into our homes, making our home’s value “too big to fail” in relation to our net worth.  Even though our health is “too big to fail,” many of us neglect time exercising or eating right because we have other priorities.  Will those priorities still seem important if you have a heart attack from overweight?

I never spent much time worrying about the consequences of any part of my life being too big to fail until recently. I understood – or thought I did – the markets and the path to a safe and secure retirement.  I was supposed to work hard at a job put what I could into savings (IRAs, CDs, whatever).  Even though the market might fluctuate up and down, over the long run I would be doing the right thing – I would be securing my retirement.

But this strategy may be too big to fail. Hoping to save money now for a secure life in the future may not be enough.  I am enough of an optimist to believe that the markets and our economy will, in time, recover – but I am enough of a realist to realize that one more collapse like this in 20 years could destroy my life’s strategy of “saving.”  What I am coming to realize is that relying on savings at any point in my life may be dangerously close to making those savings “too big to fail” for my family and me.

The insurance policy is to make sure that my income is diversified, that my savings are not concentrated solely in the market, and that I keep my mind focused on the endgame:  creating the life I want to have, not the life the government (or anyone else) wants me to have. The government would prefer us all to be a corporate employee, paying employee taxes, putting money in the market to benefit the corporate partners of the government and quitting work at a government-mandated age so we have to start pulling out our savings and paying those long-delayed taxes on our traditional IRAs and 401(k)s.

The goal has to be making your financial existence a complement to your life, not the one part of your life that is too big to fail. if you can’t control your spending, or if a single source of income puts a chokehold on your career choices or even if your savings strategy doesn’t account for a changing economy, you have made something in your life too big to fail.  Don’t.  Diversify.  If anything is too big to fail, break it down until it isn’t.  It’s a timeworn saying, but it’s just as true today as ever:  don’t put all of your eggs in one basket.

photo credit: ZeroOne

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buy American

Nov 3, 2008
I have a lot of tools. I have more than a normal person should, I think.  My collection of tools is based on one part frugality (I can save money by fixing it myself!), one part wastefulness (I NEED a specialty picture-hanging hook that looks JUST so!) and one part optimism (I am going to be Mr. Family-Man-Fixer-Upper!)  Nonetheless, most of my tools have one unifying characteristic – they were made cheaply overseas.

Go to the store sometime (particularly if you have a KMart/Wal-Mart/Target nearby) and look at where stuff is made. It’s all made somewhere else.  Same thing goes for a Home Depot or a Lowe’s – half of my tools are made in Malaysia or China.  Maybe more than half.  Almost all, to be honest.

But I have a few tools that are different. My grandparents moved from their house into an apartment when it became difficult for my grandfather to deal with basic maintenance of the yard and exterior.  He kept a few basic tools, but for the most part he gave away the tools he had accumulated over his life.  I have a huge pile of them, and they are amazing:

  • A hammer that feels like it was owned by John Henry
  • Screwdrivers that are old and dark with age but still have unblemished heads that easily turn the worst, worn-down screws
  • A Yankee drill that after decades of heavy use still punches through metal with nothing more than manual force – no electricity or batteries.
  • A saw that cuts cleanly and straight despite being older than I am.
  • And on and on.

All of these tools have words stamped on them which look almost alien. “Made in New Hampshire.”  “Made in New York.”  “American-made.”  I even have one that says “Made in England.”  Seeing a tool that was made of American steel, cast in an American plant and assembled without a touch of plastic seems otherworldly.  I can always tell these tools because they have the feel of weight, and certainty and permanence.

I compare that of course to the cheap plastic junk you can buy today. I had a cheap hammer (I NEEDED a special small hammer) whose head flew off while I was hammering.  I have gone through dozens of inexpensive small screwdrivers, always returning to the solid, heavy old ones when the new ones have stripped another screw’s head.  The difference is clear, and I am sure that when I am too old to do work around the house I will also pass down those tools to my children and keep a few inexpensive “modern” screwdrivers around my old-age home to fix  a loose screw once in a while.

The easy path is to berate cheap junk from China or bemoan the death of American industriousness or sneer at unions. China is guiltless, in this case.  Americans have demonstrated for a generation now that they would rather buy a new hammer for $9.99 every few years than buy one that would last a lifetime for $29.99.  China simply meets that need.  American industry has died for the same reason.  I shop at Home Depot.  I am as guilty as anyone of buying a cheap tool instead of buying a better one that might last longer.

But given today’s economic situation, “Buy American” is no longer a convenient political slogan or a union-driven message. It doesn’t have to mean “Hate overseas manufacturers” or “Save American jobs.”  But what it does have to mean is that soon “Buy American” will be a call to rally troops at the inner fortress.  You can read every day about the exciting new jobs that we will soon have – high-tech jobs in green technology, for example.  Forty years ago, give or take a few years, this statement would not have made most people blink:

“A man who works at a skilled job in a manufacturing facility can provide a decent living for his family.  His wife can stay home if she wishes while the children are small.  The husband will be able to send his children to college.  They will be able to buy a home.  They will have enough saved to retire at the end of his career at the facility, and still be able to pass some on to their children.”

Making that statement in 2009 seems ludicrous. When did it all change?  When “Buy American” faded into memory.  Trade barriers and sloganeering won’t ever bring us back to where we were, but Americans have to face an ugly fact:  Wal-Mart and the federal government are our two biggest employers and our future is that of a service economy – service workers serving other service workers.  “Knowledge” jobs can be exported even more easily than manufacturing jobs, whose export was (and still is) at least fought by what remains of America’s unions.  No protestors will march outside the gates when Megacorp outsources the billing department to Armenia.  No union will fight sending Tommy Accountant’s job to India.  If you work at a job where most of your day is spent around a computer, you have to realize this:  you have no skill – none – that cannot be duplicated and performed over the internet.  I can be replaced, and as companies get smarter, I will be.  Everything I do could be done far more cheaply by someone else over the Internet.   And I can’t blame companies under short-term pressure to deliver profits to shareholders if departments are outsourced – and I don’t blame India or China or the Phillipines for being there to pick up the work.

I see no reason not to expect Dubai, or Shanghai, or even some yet-up-and-coming place like Yerevan or Almaty to the next great financial center. Why should New York be special in the financial world?  Lunch, mostly.  People still like to go out for a New York-y lunch.  But almost every person I know in New York works at a knowledge job.  I could work remotely on a project overseas (and have) and I have done NOTHING in the last ten years that I could not have done if I were living in Kansas City, or Houston, or Vancouver.  In the last five, I have done nothing I could not have done if I were living in Moscow, Russia, or Moscow, Tennessee.

I pick up those old tools and wonder if the men (and women) who made them would recognize America today, an America that looks a little bit too much like the passengers in “Wall-E” for comfort. I know we had problems a couple of generations ago – women and minorities did not have the opportunities they do today – but a hammer made in New Hampshire meant jobs for our communities and a good tool that lasted for generations.  Those people work at Wal-Mart today, most likely.  Maybe that’s OK – maybe America is the first real “post-work” society, content to work at Wal-Mart so they can go buy cheap stuff at Wal-Mart on the weekends.  I hope not. I hope people will get angry when Citigroup or AIG or Morgan Stanley outsource another department overseas using taxpayer money to do it.  I hope people will get angry when banks are bailed out and car companies are left to die.   Whether or not you feel the car companies need to be saved, they certainly deserve to be bailed out as much as the banks did.  It may be almost too late to buy American, but it’s important to remember that this economic avalanche will not be stopped through anything other than action at the personal level, and that action has to start with making a choice every time you buy something.

photo credit: kevindooley

how to succeed at your job

First 360

After more than a month of unemployment – during which time I am, for all intents and purposes, a professional writer – I have found that I’m starting to miss my corporate consulting gig. I miss the contemplative time I had during my long commute.  I miss the fear I felt as I walked into the lobby, past heavily armed police officers with assault weapons.   I miss the early morning routine of standing in line before being run through a gauntlet of metal detectors and passing not one but three security checkpoints.  The bitter instant coffee.  The fluorescent lights!  And the meetings, oh the meetings!

That’s enough sarcasm for one post. I will start missing the big checks at some point but so far I haven’t.  If nothing else I’ve already saved $400+ on commuting costs this month.  I got my final load of dry cleaned clothes from the cleaners, and I haven’t needed to buy my lunch once because I’ve been too lazy to pack one the night before.  I’ve had more time to spend with my kids and for the first time in years I’ve actually slept until 7:00 am (until Little Buddy careened into our bed).  I’ve managed to start exercising again – albeit not on a regular schedule yet – and so far I would call unemployment an unqualified success.

You only need two things to succeed at your job. It doesn’t matter if your job is working retail, corporate consulting or even just being a stay-at-home parent.   Everyone has “a job.”  The vogue these days (at least in most of the blogs I read, which are a bit of a self-reinforcing bunch) seems to be to look down on jobs.  I have written my fair share of articles expressing that view.  Yet everyone has a job.  Some people are luckier than others:  their job pays more, or allows more free time or comes closer to the definition of an avocation than it does to the definition of a job.

The two things you need to succeed at your job are:

  1. the basic skills necessary for the job: You can’t be a plumber if you don’t know how to unclog a drain.  You can’t be a lawyer if you can’t pass the bar.  But you CAN be a good consultant if you can solve problems and present that solution clearly.  You can do many jobs quite well with just the basic skills necessary for that job.   If you can clear that minimum threshold with your skills, you can succeed… if you also have thing #2.
  2. a (net) enjoyment for what you’re doing: Forgive me for being an accountant.  The idea of net enjoyment is probably peculiar to an accountant, but it’s an accurate description of a basic condition:  the positives outweigh the negatives.  Every undertaking in the world, be it a corporate job, an entrepreneurial endeavor or a family picnic has SOME positives and SOME negatives.  The balance in one direction or the other is often quite clear, but sometimes it is close to balancing.  The trick is to understand those close-to-balancing situations.  Are you in a position, work-wise, where the positives outweigh the negatives?  If not, do you see that situation reversing itself in the future?  And if not, when are you quitting?  Every day you have to make that assessment, considering the long tail of your work over the last few years, or even over your entire life – has it been, net, a good undertaking?

If you don’t have the basic skills for a job (be honest with yourself, but chances are you do since you’re doing it already), or you don’t have a net enjoyment for what you’re doing, I don’t think you’re going to get far. People who are highly skilled but hate their jobs don’t get far.  People who are incompetent and love their jobs don’t get far, either.  People who are moderately skilled and like what they do for a living can often do quite well.  I don’t think they will be millionaires, necessarily, but they should be successful at that undertaking.  Make sure you can assess your own skills, and your TRUE level of enjoyment for your work, and you’ll be able to make an accurate judgment as to whether you’ll succeed eventually – or not.

photo credit: Chovee

interview with no debt plan

No Debt Plan is about getting and staying out of debt with a plan. Kevin, the author, is passionate about budgeting, saving for the future, and using goals to reach financial freedom. You can subscribe to his blog by RSS or email.

This interview is part of a new feature he’s developed called Subscriber Swap Saturday. The basic idea is to get the subscribers of one blog to subscribe to the other blog for at least a week, just to try it out. After a week if you don’t find that blogger’s content enticing, drop it. The hope is that over time you will find several writers that you weren’t familiar with who provide meaningful content to you. You can read more about Subscriber Swap Saturday at his blog, and you can read his interview with me here.

So here is my interview with Kevin – my questions are in bold.

Given the recent economic conditions, do you think it’s time to stop telling people not to go into debt and instead maybe focus on telling people how to do it safely?
While I can definitely see the appeal of that… and it is inevitable for some folks that have put themselves in bad situations… I’ve got to say no. I can never justify purposely getting into debt. To me that seems like giving up. You can always cut something, always get a part time job, always start a blog, always rent out a room in your house, etc. I believe many Americans simply can’t imagine life without television or a cellphone or DVR service or going to the movies. When you cut down to the true basic necessities, life isn’t all that expensive.

What one NON-financial book (or person, or television show, etc.) most influences your thinking about personal finance?
Oh wow, that’s a tough question. I would have to say reading or watching stories about professional athletes (and lottery winners) that blow all of the money they suddenly end up with influences me. Every time I hear a story like that I think, “I wish they would give me my shot at that. I would show everyone how to take one lucky day and make the money work the rest of my life.” The next thought that crosses my mind is I should become a personal finance guru to professional athletes. I wonder who is currently doing this…

What keeps you up at night?
Other than voluntarily staying up way too late? I actually sleep pretty well at night. There was a time last year that I slept horribly because we thought someone had tried to break into our house — it took me months to get past that. I also occasionally worry that I’m not doing enough — haven’t finished this on the to-do list, or haven’t completed that for the budget, etc.

What lets you sleep at night?
Having an amazing spouse. 🙂 That and planning well. We have a one month buffer for our expenses saved up, getting us off of the paycheck to paycheck mentality. I’m not worried about that next bill that is coming around the corner. Having a significant amount of savings and a large amount of free cash flow each month also helps me sleep well.

Your computer has a mysterious malfunction and you can only access 3 financial sites for the rest of your life. What are they?
1. Vanguard – for our Roth IRA accounts
2. CNN Money – not the perfect news site and I was going to say Google Finance, but GF would require me to click to other sites that I wouldn’t be able to access.
3. My own blog – so I can continue to write and (hopefully) earn an income from it

photo credit: hiddedevries