stability and desperation

calm waters

The same people who crave stability and the idea of “never being without a paycheck” are often in the most unstable positions – they just don’t realize it. They are so dependent on the next paycheck that they can’t begin to imagine even two or three weeks without a paycheck. There are other people who never anticipate a paycheck – they are always working on freelance gigs or alternative income. I’m somewhere in-between; I welcome the chance to work on my alternative income streams when my paychecks from clients run low. For me it’s a challenge, and I think it’s largely because I’m willing to think of life without a paycheck. Too many people think that life without a paycheck almost literally means death and despair.

Many of the employees around me are in total terror of a single week without a paycheck. Their expenses continue without pause and their income stops at the drop of a hat. I am much more comfortable knowing that some of my income will trickle on even when my consulting income stops, and far more comfortable knowing that I have a long-term plan of succeeding with my alternative income – something far too many of my colleagues don’t even admit is possible. Most are consumed with worrying about their IRAs and 401(k)s that they aren’t eligible to touch for years and years. Their time would be better spent worrying about what they can do to make more money on the side, NOW.

What all of these people fail to realize is that the instability they feel in uncertain times like these arises from their own lifestyle, and not from the government or the corporations or “the economy.” Learning how to build prosperity, not just surviving paycheck-to-paycheck, is a big first step. Learning to live within your means gives you a more stable life. Learning to think more about making money than saving money helps create stability. Creating alternate wealthstreams in your life gives you stability. Getting a paycheck twice a month doesn’t guarantee any sort of stability at all.

Desperation arises naturally when people face an unknown future with limited choices for action. Creating more choices for yourself is the best way to avoid desperation. Being an employee is a necessary evil for a lot of people (and there are still, believe it or not, people out there who love their jobs). Health care benefits are a big reason. The idea that being employed is “more stable” is hammered into many of us from school age. Even an entrepreneur can tie up too much of his or her wealth into one stream. The real answer to desperate times is to constantly look for ways to start new “wealthstreams.” Just as a chair with four legs is more stable than one with three, a person with multiple income sources is always going to be more stable than someone with only one income source – regardless of who makes more in total.

Photo Attribution Some rights reserved by Horia Varlan

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7 things you don’t want to skimp on

gears

gears

You don’t always want to save as much as you possibly can on everything. I can think of at least a few examples where spending the least amount possible is not always a great idea.

1. Education. I am a huge proponent of public education for two reasons: 1, the involvement with your community, both for parent and child, is going to happen somewhere – there is no sense in insulating yourselves from it; 2, you’ve already paid for it (through taxes). That having been said, education – particularly college, but also secondary and elementary – is not a good candidate for finding the cheapest option simply because it’s cheapest. That might seem to contradict some of my earlier pieces. But I don’t think it really does – I simply think that far too many people choose the most expensive college just because it’s the most expensive, and that’s wrong, too. At every level you need to find options that are good for you and that really address your goals.

2. Health care. This one is tough. Of course you don’t want to overspend, but I can tell you that when you are seriously ill, most – not all, most – thoughts about money go right out the window. Of course in the case of lingering illnesses, you still have to worry about the person’s family’s future – will the cost of health care be too much to allow them to keep a house, for example? And it’s a sad state in this country that we have to worry about the cost of wellcare. But in general, when you are really sick or injured, you don’t stop the hospital from doing procedure X because it costs too much. The hospital or insurance company may stop it, though.

3. Cars and related expenses. When you read people suggesting ways to save money on cars, I always think “this is a metal box that you get in and drive around in at 60 miles per hour – do you really want the cheapest car you can get?” I want the safest car, with reasonable mileage that keeps it from being an outright assault on the environment. I’ll pay a bit extra for the good tires, even though I could get reconditioned ones cheaper. I drive a Prius, so I’ve placed a premium on mileage.  That’s a bet that may or may not pay off.

4. Insurance. If you live in a flood zone, you can save some money by skimping on the flood insurance. When the flood comes, though, if your insurance isn’t enough to rebuild your place or buy a new one, why did you bother? What was the point of saving that money if you can’t use the insurance when you need it? Make sure you’re insured against financial catastrophe. Life insurance is important. Having a $100 deductible on your auto isn’t.

5. Babyproofing equipment. I think the choice here is clear. If you want to skimp on gates at the top of the stairs for your child, then I don’t think you have your priorities straight.

6. Food. This one may be a little more contentious, but I think trying to save money on certain types of food is ridiculous. If you eat meat, try this experiment. Go buy some heavily processed, dyed, factory-farm raised chicken, and buy some organic free range chicken. Prepare them both the same way, but don’t overdo the breading, herbs, spices, whatever – keep it simple. Try both of them. Tell me which one was a better use of money. If you aren’t a meat eater, try buying organic, locally produced tomatos and then buy a Mexican imported tomato from the supermarket. In both cases, the more expensive option is likely to taste far better, therefore it satisfies you better meaning you’ll eat less, enjoy it more and be less tempted to let it sit in the fridge until it goes bad. It’s probably healthier, too, but I won’t even use that argument.

7. This one is the tough one – making money. If you are starting a business or investing, you don’t necessarily want the cheapest possible option. Undeveloped property 80 feet from the road with no plumbing or electricity in Montana might be cheap, but that doesn’t mean it’s a good investment. If you are starting up a restaurant, you don’t want to serve the cheapest possible booze.

I guess the purpose of these examples is to show that sometimes the mania for frugality and savings isn’t always the best idea. Saving money can’t always be solely about retiring or financial freedom. Between now and then there is a life to be lived, and lived safely and comfortably.

society and the individual

Will code for food

All that is valuable in human society depends upon the opportunity for development accorded the individual.

– Albert Einstein

I love pop culture, as long as it is MY pop culture. I love Star Trek, Star Wars, the Matrix and the Lord of the Rings and don’t care much for American Idol.  Loving one and not caring for the other won’t make me much better or worse as a person; there is nothing in Star Trek that makes the fans of that show “better” than the fans of American Idol.  Yet I feel that there is some value from the one show not possible from the other.  I feel that liking one over the other makes me more of an individual.

There are many opportunities for the individual to disappear in a society. In a totalitarian society, the disappearance of individual is a survival instinct.  In a command economy, it’s the easiest action.  In a capitalist society, it’s not the way to wealth but it may serve as the avoidance of poverty.

If you stop and think about the ways in which you can live a “life fully lived”, either through commerce or service or self-improvement, the individual is key. I imagine Donald Trump gets the same sense of satisfaction through commerce as a community organizer does through service to others, although I can’t be sure.  But the opportunity for development accorded to the individual makes or breaks a society.

Do you want your neighbors to succeed? Your city?  Your state?  Your country?  Your world?  At each point you’re concentrating less on your own self-development and more on a larger ideal.  As a family man, I concentrate less on my own self-development (reading, contemplation, exercise, etc.) and more on my family’s development.  I think others expand this to concentrate more upon their neighbors’ development, and so on.  It’s not a bad thing, but I think every time you set aside your own self development for society’s, you eventually will suffer.

Boil it down to real life? Killing yourself to guarantee your children’s college education?  Paying exorbitant taxes to support a dying city?  Working to support a corporation?  Destroying your own health to support a family?  All are self-defeating in the long view.  Each will eventually undermine the initial reasoning; working long hours and wrecking your health to support your family will fail to pay off when you die young, for example.

Most people can’t make that difficult choice to concentrate on their own self-development. I’ll be honest:  I can’t. It’s hard to say that you need to work on your own happiness or health or prosperity now to ensure your family (or friends’, or community’s, or whatever) betterment tomorrow.  Sacrifice is tough in the short term.  America hasn’t demonstrated much stomach for that in the last decade or two, and we’ll pay the price in the next couple of decades.  But if you want to help others often the best way is to learn to help yourself first.

photo credit: pvera

top 10 healthy and frugal foods

If you are concerned about your health and also concerned about your money, you’re often going to be concerned that the two appear to be in conflict.  It’s tough to eat healthy on a budget (but the opposite isn’t true:  it’s easy to eat horribly while spending a lot).  There are heart-healthy foods anyone can eat that don’t cost a fortune.  The trick is simple.  Don’t eat processed foods, and eat smaller portions of the pricier foods.  Thomas Jefferson said  “I have lived temperately, eating little animal food, and that not as an aliment, so much as a condiment for the vegetables which constitute my principal diet.”  That’s good advice for the most part, both from a financial and health point of view.  Eating less meat will save you money and – by and large – won’t hurt your health.  You do need protein, and humans have for most of their history obtained that protein from animals, but the current consumption levels for the average American have become ridiculous.  I’ve had plenty of conversations with friends who don’t think they’ve eaten a meal unless the largest part of that meal was meat.  That’s not a good way to live.  As Jefferson said, meat should be a side dish, not the main dish.  It’s good for your wallet and your waistline.

So what are the healthiest foods for your heart, and how can they be good for your finances, too?

1.  Oatmeal.  Providing omega-3 fatty acids, magnesium, potassium, folate, niacin, calcium, and soluble fiber, oatmeal is one of the top foods for health.  But it’s also a great budget meal.  It’s seldom expensive, it’s easily complemented with fresh fruit or a variety of spices (think cinnamon and nutmeg) and it’s one of the cheapest items in the grocery aisle.

2.  Black beans.  With B-complex vitamins, niacin, magnesium, omega-3 fatty acids, calcium, and soluble fiber black beans are a great source of nutrition and practically free compared to most processed foods.

3.  Nuts.  Almonds provide omega-3 fatty acids and vitamin E as well as heart-favorable mono- and polyunsaturated fats.  Walnuts do the same.  While nuts are nutrient-dense, they are also calorie-dense.  Make sure you snack on nuts, rather than making a meal out of them.  They aren’t cheap, but if you remember that they are supposed to be eaten in very small portions they are very reasonable.

4.  Tea.  With catechins and flavonols (flavonoids), tea is probably the best drink you can imbibe other than water.  If you’re concerned about caffeine – and you should be, caffeine is not a healthy stimulant – drink green or white tea to get all the health benefits without any of the downsides of black tea (or coffee).  Tea’s cheap, too – you can get excellent organic teas for less than the cost of a 12 pack of high-fructose corn-syrup-laden soda.

5.  Tuna.  With omega-3 fatty acids, folate, and niacin, tuna’s a great meat choice if you have to eat meat.  Make sure you get dolphin-friendly tuna that’s packaged in water, not oil.  It’s one of the least expensive meat options you can find, and it can satisfy all of your meat-related nutritional needs. without breaking the bank.

6. Tomatoes.  The tomato is a rich food, with beta- and alpha-carotene, lycopene, lutein (carotenoids), vitamin C, potassium and fiber.  Here’s the catch:  tomatoes aren’t frugal.  They tend to be among the most expensive produce items you can buy in a supermarket.  But you can grow tomatoes.  They tend to be some of the easiest things to grow, and you can often grow them indoors.  The health benefits are worth the slight bit of effort to grow them on your own.

7. Brown rice has B-complex vitamins, fiber, niacin, magnesium, and fiber.  I’m not a huge fan of carbs, but for basic nutrition and calories brown rice is hard to beat.  In moderation it won’t cause much weight gain, and its nutritional benefits (and extremely low cost) make it a food worth considering.

8.  Carrots.  Alpha-carotene (a carotenoid) and fiber make this a great food.  It works for rabbits, right?  There’s little reason to avoid carrots.  They are sweet, crunchy, and healthy.  They tend to be some of the least expensive produce you can buy, making this a great choice for healthy food.

9.  Spinach has lutein (a carotenoid), B-complex vitamins, calcium, and fiber.  Dark leafy greens are always good for you, and particularly good for heart health.  Spinach tends to be one of the least expensive leafy greens, so it’s a great choice for health and wealth.

10.  Red wine.  Wine’s debatable for a number of reasons.  It can cause health problems if not taken in moderation.  If you get into fancy wines, it’s not good for your wallet, either.  But wine does provide catechins and reservatrol (flavonoids).  Both have been shown to have potent anti-aging effects, so consider hoisting a glass or two for health.  And inexpensive wines have come  a long way in recent years.  You can have excellent wines without spending a fortune.

It’s not easy to be healthy and frugal, but it can be done; give these 10 items a shot!  And suggest more if I’ve missed a few….

LicenseAttribution Some rights reserved by epSos.de

carnivals

carnival

carnival

 

I didn’t manage a link roundup this weekend, but I did submit to a few carnivals. Here’s the list of the ones that reminded me to link back (!). Check them out… you’re always likely to find an article or two you’ll be interested in if you visit the carnivals.

Best of Money Carnival Carnival #149 – April Fool’s Edition | Budgeting In the Fun Stuff
Totally Money Blog Carnival #62 – Easter Edition | StupidCents
Dewey’s Treehouse: Festival of Frugality #330: Before You Take Out a Lion Edition


Photo Attribution Some rights reserved by kevin dooley

so it goes

before and after losing 100 pounds
before and after losing 100 pounds

before and after I lost 100 pounds

“So it goes.”  – Kurt Vonnegut, in  Slaughterhouse-Five, or The Children’s Crusade: A Duty Dance with Death, by Kurt Vonnegut, a Fourth-Generation German-American Now Living in Easy Circumstances on Cape Cod [and Smoking Too Much], Who, as an American Infantry Scout Hors de Combat, as a Prisoner of War, Witnessed the Fire Bombing of Dresden, Germany, ‘The Florence of the Elbe,’ a Long Time Ago, and Survived to Tell the Tale. This Is a Novel Somewhat in the Telegraphic Schizophrenic Manner of Tales of the Planet Tralfamadore, Where the Flying Saucers Come From. Peace.

I’ve always loved that title, that book, that author, that quotation.  I can’t think of better words to describe a healthy lifestyle, at least from a mental point of view… but I’m actually thinking more about the physical.

Speaking of that, I’m going to make an attempt to write more about health on this blog, and the effect of health on (and against) gaining financial independence.  I was an exceptionally healthy guy who’s now slid into, well, unhealthiness, even while doing well financially.  I’m going to write more about getting healthy again and how that affects finances.  It’s a fairly good niche, although it’s been covered before, but it’s the biggest single challenge facing me, and since I need something more specific to focus on, that’s it.  I’m making good money, I have a good career, but health is becoming a challenge thanks to a desk job (you don’t think when you’re healthy that you’re going to get early signs of carpal tunnel syndrome…) and my own poor choices, and I’m going to write about getting back to success in health and fitness.  I’ve written about it before in 101 thoughts on losing 100 pounds and you’ll see more of it soon.  It’s going to have to be my focus, even exceeding finances.

I was in a couple of carnivals, and one article I’d like to mention:

 

the regulatory pendulum and links

pendulum

pendulum


In the wake of the wildly popular – at least with hedge funds, investment banks and tech firms “JOBS Act” (read about it:  jobs act – Google Search) we’ll see an explosion of interest in investing in small companies in the US.  I suppose it was only a matter of time until the next bubble was created.  I am paid to monitor this type of regulation and assess its impact, and I think we’ll see a huge small company investment bubble over the next few years.  You’ll read about how hot the market is for small company IPOs and hear about how the US is the most unregulated, and therefore most friendly, market in the world.  Inevitably, it will end.  We’ll have another Enron, or Worldcom, and we’ll start all over again on the other side of the pendulum.  Regulations that were created in the 2002-2003 post-Enron reactionary period are being rolled back now in favor of “growth.”  It will create growth, of that I have no doubt.  Will it create real growth, or the phantom growth of the Madoffs and MLMs of the world pushing “investments” on unsophisticated investors?  Time will tell, but I bet on the latter.  Hedge your bets.  A bubble is coming.

Links… all worth reading…

And a couple of carnivals I participated in:

Photo Attribution Some rights reserved by prayitno