Tag: saving

what my grandparents taught me about money

old couple going for a stroll

Most of my relatives have divergent ideas about money and its place in our lives. By relatives I’m including the wide range from my wife to my parents to my in-laws, etc. I realized a long time ago that it is a trivial undertaking to pick out the flaws in other people’s philosophies or actions - while at the same time failing to recognize them in your own thoughts and actions. However, I still find it a fairly useful exercise to try and determine the how-and-why of people’s good decisions and bad decisions. Even more important is trying to understand the ‘why’ behind those decisions.

My mother’s parents (my grandparents), for instance, were always quite frugal. They were both raised on farms in the 20s and 30s and suffered through the Depression. My grandfather left home to join the Army pre-World War II, serving in the horse cavalry – and yes, it’s hard to believe the US still had a horse cavalry less than 80 years ago, isn’t it? Here are some of their views towards money that I think are interesting, both good and bad, and my take on them.

  • Investing, a good habit. My grandfather was an early fervent believer in investing. Coming from a rural background and suffering through the Great Depression you might expect him to be very wary of investing, but he was quite the opposite. He invested heavily in the market, and on a schoolteacher’s salary did quite well over the years. He invested in the market although he had a state pension, and could have chosen to spend that money on other things. From him I learned a very conservative study-buy-and-hold approach. Although I didn’t know it at the time I learned it from him, his approach was basically the same as Warren Buffet’s. While it didn’t make my grandfather a billionaire, it did make him a huge ‘extra’ retirement fund on top of his pension and my grandmother’s.
  • Never selling, ultimately a bad habit. My grandparents maintained an almost emotional attachment to some of their stocks and held them year after year, even in times of declining prices, shrinking dividends and their own advancing age and deteriorating health. They saved these stocks thinking that they would be passed on to future generations (for example, me). But as they moved into more and more expensive housing (nursing homes are much more expensive than regular apartments, obviously) until he passed away, it became obvious that all of that money would not outlive both of them. Had they moved it into a savings account paying 5% ten years ago they could have been earning steady income and perhaps avoided some of the market fluctuations that ate away at their net worth.
  • Never really spending, good and bad. Although they amassed a modest “fortune “, during retirement my grandparents never spent much. They constantly talked of wanting to pass it on to my mother (an only child) and my brother and myself. They never traveled, although my grandfather dreamed of returning to see a peaceful France and Germany, where he had spent years during the war. They did ‘live large’ in some senses - they ate out frequently (albeit modest restaurants), they bought new cars for cash every few years while they could still drive, and they were extremely generous to everyone in their family. They gave us stocks, cash and other gifts for years. However, it is hard for me to look back on their 20+ years of retirement together before my Grandfather passed away and think that they never really did much after retiring. I know that part of that is my perception, since I love overseas travel, but I am not sure retirement was meant for watching TV and eating out. That’s a judgment each person has to make individually, I guess. But to view it in a more positive light, when my mom was younger and living at home they were very frugal, and even late in life my grandfather’s frugality could be amazing. A heavy, heavy smoker for his entire adult life, he quit cold turkey one day because he thought cigarette prices had finally gotten too high - and didn’t ever smoke again (17+ years). He never worried about the health aspect as far as I know, but paying $3 for a pack of cigarettes instead of $2 was apparently one dollar too much.
  • Avoiding debt, extremely good. My parents and grandparents gave me one gift that I realize is invaluable after I read many personal finance blogs: the fear of debt. I have been convinced since an early age that going into debt is practically a mortal sin, a stain on your character, a flaw. While I think it may have been overstated a bit, this philosophy has made me somewhat unique in a sense: I have never carried a balance on a credit card, EVER. I have had only two debts in my life: a car loan one time and a mortgage on my current house. Other than that, I have never bought anything I couldn’t pay for with my existing funds. So debt has never been a headache for me, which is a great gift. Possibly the greatest one you can get, because with debt so little else is possible.
  • Charity begins at home, mixed. I know this may run counter to many people’s beliefs, but another closely held belief of my grandparents was to take care of themselves and their own before others. This philosophy meant that there was no ‘automatic giving’ to charity until everyone in the family was taken care of. They gave generously to their church every week, but I am sure (without ever having seen it put to the test) that had I been in need for some reason they would have given that money to me, instead, for as long as I needed it, and forgotten the church. Give when you are able. Get your own financial house in at least minimal order before trying to help others. I do not subscribe to the Christian teaching that I should give ALL I own to the poor, and apparently from the number of late model SUVs and families in nice clothes I see in church parking lots I’m not alone in rejecting that teaching. It doesn’t mean you can’t give to charity - I certainly give to several children’s charities - but take care of your family first.

Those points are really just highlights. The important lesson to remember is that anything your family or your friends teach you about finance is valuable. Sometimes you may learn by avoiding their mistakes, sometimes you may learn by taking their advice to heart - but it’s all learning. From my maternal grandparents, I learned to save and to avoid debt but also that sometimes you need to spend money, too, because there ARE things and experiences in life worth the money. The truly important thing was never the money, it was the security the money bought, and being able to give back to their family, that mattered to them.

(another reworking of an article originally appearing on brip blap in 2007)

photo by Ghostboy

linklings, mid-week edition

I’ve decided to shift the link roundups to Wednesdays and stop posting on Saturdays. Traffic drops off significantly during the weekend and I tend to put off working on the blog Friday and Saturday nights.

I have been attempting to pull together about 15 different mini-projects, ranging from the personal (getting termite monitoring underway) to the professional (completing multiple SOX projects at work) to the “future professional (setting up an LLC). So far, not going well. I have been tripping myself up constantly by trying to jump from one to the next, rather than completing one and moving on to the next. One of the takeaways from Getting Things Done (a book I didn’t care for that much so I won’t even put an affiliate link here) that I did like was the idea of “context” to-do lists: instead of categories like “home projects” and “business”, you should have categories like “things I can do on the phone” and “things I can do while sitting at the computer”, etc. I liked that idea except for the “at the computer” category – it’s so easy with multiple tabs, etc. to jump to the next task “just for a second.” I need a British nanny to whack my hand every time I’m trying to complete a form online, then suddenly remember I need to check for a nearby oil change shop.

So for more click-away-from-what-you’re-doing fun, some links:

Robert Kiyosaki is Off his Rocker (Again) – Is The 401(k) Really the Biggest Scam Ever?: I don’t know if the 401(k) is the biggest scam ever; Madoff might have topped it, for example. I do think that a 401(k) is only worth investing in up to the point of an employer’s matching program. Past that, I think you are better off investing in an IRA, where you aren’t limited to an arbitrary set of funds. If your employer doesn’t match, it is a bit of a scam, designed to funnel workers’ savings into a narrow range of funds selected by the fund administrator, who may not be totally impartial. Gasp.

How to be a Millionaire… Not!: Statistics can be manipulated, quite cynically. I suspect that you have to rely on the author’s honesty more than you’d like to in many cases, particularly with a book meant to sell a certain worldview.

I’d also like to mention Akemi’s new ebook over at Yes-To-Me: “Lightworker’s Guide to Self-Employment”. It’s a nice resource on becoming self-employed, and since she’s recently done it herself she’s filled the book with some very practical advice. It’s generously priced, as well…free. Akemi’s more focused on the spiritual aspect of things than I would be, but I try to keep my mind open and she offers a lot of good advice in the practical sense, as well.

expanding your means

“Most people would rather live within their means rather than expand their means.” – Robert Kiyosaki, Retire Young, Retire Rich

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Most of us would rather be rich than poor. Rich may not mean monetarily rich – it may mean experiences, family, friends – but generally wealth enables the accomplishment of many other goals. How can you do it? You can save. You can invest wisely. You can reduce debt or decrease expenditures. The hardest way to get rich, but the only way that really works, is to expand your means. You have to earn more than you spend, consistently and constantly. You have to expand your means.

I get frustrated reading about achieving wealth by cutting out lattes. Sure, you can be better off if you don’t waste money on Wii’s and lattes. You’ll achieve your goals sooner if you invest in index funds instead of speculating on stocks. You’ll be richer, sooner, if you choose a good career that allows for upward mobility. You’ll win out – in today’s America – if you choose a public-sector job that guarantees benefits. Sad, but true.

But one thing that most people will never try is to increase their “means” past their primary income. It’s hard. I struggle to do it. If I asked you to generate, tomorrow, an extra $10 cash in hand, could you do it? Even if you make six figures a year, could you figure out a way to generate $10 above your normal daily haul? It would be difficult for most of us. Most of us would rather watch Lost than attempt it.

Expanding your means will make you wealthier than saving money. If you save $5, you’ve saved it once and you’re done. If you come up with a new business model that makes you an extra $5 today, and might – might! – make you an extra $5 tomorrow you’ve created a new income stream. Making a tiny bit more will change your life far more than saving a bit.

Kiyosaki’s phrase is telling. Most people would rather live within their means… and they’ll pay for it in the long run. Don’t kid yourself: it’s tough to live within your means. With the onslaught of advertising and “keeping up with the Joneses” it’s hard to resist the Wii’s and the Kindles and the latest fashions and the gourmet foods. If you can, kudos to you. I think I have so far, but it’s a constant struggle. But it’s akin to health: if you can avoid heroin, you’re in better shape than a junkie. It doesn’t mean you’ll live to 100. To do that you have to excel – you have to beat the norms, the average and the mean. Don’t think that skipping the morning latte is enough. You have to make that extra effort to create more wealth. Sitting back and “not buying” is not enough. You have to go out, and make more. You to create wealth, not just avoid spending.

photo by matze_ott

linklings, score one for renting edition

If you read more than one blog, I’m sure you’ve already read several “Happy Thanksgiving” posts, but I’ll add one more – hope everyone enjoyed a couple of days of wassail and sodality (and yes, I know I’m not using that word in exactly the correct way, but it was a new one for me and I decided to give it a whirl).

sink

As we’ve closed on our home purchase and start moving out of our rental I’ve been reminded of one of the benefits of renting. Following Murphy’s Law almost to a T, our kitchen sink backed up severely on Thursday. Drano and Liquid Plumber helped slightly, allowing a trickle to drain through, but for all intents and purposes the sink was useless. We decided not to interrupt our landlord’s Thanksgiving, being the selfless tenants we are (ha), and waited until Friday.

On Friday, our landlady gave us the number of a plumber who made emergency calls. He came out promptly and discovered that there were some problems far, far down the line. In other words, Drano wouldn’t have made a bit of difference – it was a problem that had grown long before we rented the house. Lots of heavy equipment was hauled up on the roof and an hour later the sink was flowing like new.

Our bill for all of this? Nothing, other than the tip I gave the guy because he had given me three calls before arriving to keep me posted on exactly how long it would take him to get there. If the same problem happened in a house I owned, I’d be spending plenty. As a renter, nothing. So, score one for renting. Renting certainly has its share of drawbacks but in this case, renting wins.

A few links, gathered around holiday themes – I suppose from now until Christmas plenty of blogs, including mine, will be focused on the orgy of consumerism and how “you don’t need things to be happy” etc. etc. Lots of frugality tips and affiliate links, no doubt. My holiday spending tip? Decide what you can afford, stick to it and don’t worry about it further than that. And pay cash (or, if you are the type who can control your credit cards, pay off your balance immediately).

And how was your Black Friday? I’ve never “done” Black Friday, and never plan to do it. What a horrible mess. Why people would subject themselves to that kind of abuse for the sake of good but not unbelievable savings is beyond me. Wait one year and that will be the day-to-day price on a TV.

photo by 5533

linklings, the lady gaga edition

I’m sure this happens to everyone. You hear a song and it sticks in your head. You may not even like the song. You may even DISLIKE the song. Yet you can’t shake it. You try to play Macarena, or Ice Ice Baby, just to dislodge one awful song from your brain by lodging another. It doesn’t work. Welcome to my weekend, which was centered around Lady Ga-Ga (or however she punctuates her name) and her latest tune-mangling. Enjoy the video. I know I have permanently traumatized my kids by wandering around the home muttering “ra ra romanza!” all weekend. Please don’t judge me….

What can I say? I had “Der Kommisar” stuck in my head for six months. Help me, please. Warn me of other songs to avoid.

(Here’s the video link in case the embed doesn’t show up…)

I’m going to work on solidifying the posting schedule, and finishing my (major) blog theme revision soon. Blogging’s tough work, especially after you’ve been after it for 2-3 years and feel like you don’t have much more to say. I often feel like I’ve been to the well once too often, which is (probably) my own mental shortcoming…

I make money off of blogging, but not enough to make me highly devoted to it. I like writing, but I feel that I’m not on-topic enough to keep people involved – I’d be happy to accept some (positive) criticism. I toy with the idea of abandoning any specific topic from time to time – but then again sometimes I think I should just switch brip blap to an astronomy blog. It’s tough to know what to do when you don’t really know what you, yourself, want to do.

And from a lifestyle perspective, having permanent summer is working well for me so far. We took the family biking today, November 15th, to the beach. In shorts and t-shirts. In a crisp blue cloudless sky. Did I mention it’s November? It may not mean much to most, but I’ve been cheered tremendously by the absence of winter.

And finally, I had some commentary on these links, but Microsoft’s Live Writer is acting up on me as I try to watch the Indy-New England game and I don’t have the patience to fix it. Good stuff, and I particularly liked the “Disposable” link. Plus, I don’t like Gary Vaynerchuk, to be honest. Go to the comments on the link and you’ll see why.

linklings, dude, where’s my break? edition

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As noted in this article (October 2009 Unemployment Rate 10.20% – Chart of the Day) unemployment’s high.  Too high.  I was in the 10.2% for about a week, but as of next week I’m right back at it with the same client after they got a budget increase.  Although I’m glad to return to work, what with the economy the way it is, I’m a little bit sad that my “break” only lasted about 7 days.  It was a very productive break in almost every category (except, obviously, blogging).  We made a trip to visit relatives, I got a lot of the paperwork related to our looming close on our new house done, and I even managed to surprise my son by picking him up from school on my bike. 

So due to the busy week, I’ll fly through a few links:

linklings, rumors of winter edition

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We’ve finally had the first touch of cold here in Florida - it was actually down in the 60s this morning. I have no doubt we’ll be back up into the 80s later in the day, though. I think for the first time we’re starting to appreciate that we won’t have to deal with winter. I’m sure I’ll miss autumn eventually, but for right now the reports from up north of snow and cold are making me quite happy to be in sunny Florida.

On to the links…

Wealth, Greed, Envy and Shame: Money is morally neutral, in an of itself. How it is used is what makes it “good” or “bad.” Rich people are neither “good” nor “bad” as a class; individuals are. I did have an issue with the comment in the article though: “Unless you amassed your wealth by stealing it from others, I do not understand why anyone would feel guilty.” Stealing is a vague term. Should someone who amassed wealth by an accident of birth feel guilty? If I got rich as a landmine manufacturer, should I feel guilty? Dunno. But I do know that if you want to be a successful person in this life you have GOT to get control of your emotions about money.

Solo 401k Versus SEP-IRA: I’m finding this continuing series very interesting - as Curmudgeon mentioned in the comments in last week’s linklings, it’s a subject even many banks and accountants might not be familiar with.

Crush It! and The Best Books on Boosting Your Income: Eh, I’m getting a little bit burned out on the “do your passion” stuff. I listened to a few of Gary’s talks on work and realized that some of these “Web 2.0” types or however you classify them think of a passion as a 24/7 driving, overwhelming passion. I have my passions, but (especially with children) life is not always about following YOUR passion 24/7. You can be other-directed and not be a bad person.

The Early Adopters Tax: It is true that early adopters pay through the nose for techy items. Doesn’t $800 for an iPhone seem like a lot, today? The speed with which gadgets are improved and made less and less expensive is amazing. I’d like a Kindle, for example - feel free to buy me one if you’re feeling generous - but I don’t mind being a late-adopter. I do want an iTouch after reading this review, though. A completely unrelated point, though, is that with all of the gadgets coming out now you have to think of which ones incorporate your most-needed features. I’d like an iTouch, but I’d like something on which I could easily read ebooks. I like the Kindle, but I also want something that can fit in my pocket. Something has to give.

Extracting the Child Who Stayed in the Nest Too Long: I won’t spoil the answer, but I like the idea for prodding post-collegiate types out of the nest.

Seek Discomfort: Here’s a new productivity tip: every day identify the one item you really, really don’t want to do and do it.

How do you Spend Your Time?: I shudder to think of how my time is spent; I am not good at optimizing my days. This part of the article made me smile, though:

“Hopefully I’ll recreate the incredible time I had in Paris all those years ago when all I had was a stack of books, a mattress on the floor, and a couple of windows. It was awesome. I would literally read until I fell asleep. Then I’d wake up, have a glass of water, write for an hour, and read for another hour. Then I’d fall asleep again, wake up, and go out for a walk in the streets of Paris.

Paris is still there, and I’m willing to bet you can still get mattresses there, too. Walking and water are still quite cost-effective. Trust me, I do this mental exercise sometimes: “oh, I wish I could play lacrosse again someday.” No, I don’t. If I really did, I would do it. If someone dreams of visiting Mars, that’s most likely unrealistic. Other than far-out wishes like that, though, most wishes are relatively obtainable.

You should feel pain when unclear: Great point. You should feel good when you’re clear, and aiming towards a goal. If you aren’t aiming toward a goal you should feel uncomfortable.

A few more links:

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photo: by bbjee

linklings, apparently-I-read-a-lot-on-the-internet-this-week edition

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As the title of the post implies, apparently I read a lot of stuff on the internet this week. I’ve found that ditching Google Reader in favor of the desktop software FeedDemon has made it easier to scan through articles and pick out stuff I actually want to read. I’ve installed that and Raven (for blog editing) on my USB key, making it a bit easier to capture and write up items for the blog. I am definitely not moving in the “cloud computing” direction - sometimes it helps to have desktop software.

The Entrepreneur Fund: One Year of Projected Expenses: I think most books/posts/etc. I’ve read on the subject say that you must have, at a minimum, one year of expenses saved up before launching a business. It sounds daunting, but I think it’s doable. We could live for more than a year off our savings if we ratcheted down our lifestyle (got rid of cable, etc.)

Trick or Treat: Creating a Frugal Halloween: Some good tips - I like the PlayDoh idea. I have noticed that Halloween seems to be exploding in popularity, probably because marketers see that there is much, much more to be sold than for Thanksgiving.

Poll: 47% of Households Will Not Owe Taxes in 2009 - Is That Fair?: Are taxes SUPPOSED to be fair? I think the concept is largely unfair. A large portion of my taxes go to support things I don’t support - wars, certain social programs, pork, etc. So if you get past that, then you can worry about people who don’t pay. But I can’t get past the fact that taxes are almost inherently unfair.

SEP-IRA Retirement Plan for the Self-Employed: Part of a longer series about retirement plans for the self-employed: some good info on something that I, at least, don’t know very much about.

Don’t drop that egg!: I just recently started listening to Dan Miller’s podcast and reading his blog. This was an enjoyable post on the idea that sometimes you fear things so much you can’t even see other opportunities.

Quizzle Offers Free Credit Score and Report: It’s nice to see that you can obtain your credit score in more and more places. It used to be such an (expensive) hassle to find out your score.

Price-Placebo Effect: Are You a Victim, Too?: Yep, if I tell you a bottle of wine costs $250, you’re probably going to think it tastes better - just as most people would tell you a store-brand cereal tastes worse than Kellogg’s. The mind is a weird thing.

PayPal Discourages Use of Credit Cards: Seems reasonable enough - I’m surprised sometimes that they don’t ban them altogether. Surely the fees eat into PayPal’s profit margin.

Results, Results, Results: My resume isn’t as strong with “action” words as it should be. Another to-do item.

Family Finances: How Is Your Financial Status?: There’s a link to an interesting tool that judges your financial health. Our family comes out A+ in every category except retirement savings - mostly because this year we haven’t put aside our savings yet. I decided it would be prudent to wait until we’ve closed on the house purchase to make sure we have plenty of cash on hand.

Accidental Frugality - Can You Live on Half of Your Income?: Yep, you can. Will it be enjoyable? Maybe not. Having been part of a DINK (dual income, no kids), moving to SI-DK (single income, dual kids - sorry, no very catchy), I can attest that you can. You may THINK you can’t, but in reality you can adjust to any income level, up or down.

Finding Affordable Self Employed Health Insurance: I’m working on this right now, actually - I’m on a mission to find an affordable plan. My current thinking is a high-deductible plan in association with an HSA, which would allow us more control over expenses (and perhaps a tax benefit), but even that remains awfully expensive. I just have a dream that someday I can get a health care plan that is completely unattached to my employer/clients/etc. I understand it’s expensive, but I’m tired of being in a constant state of flux (changing employers) or dread (contract work without benefits).

How Often Do You Check Your Portfolio?: Be oblivious. I just checked my portfolio for the first time in a few months as we started the mortgage process. I’m a long term investor - other than rebalancing my funds, I’m just not worried about it.

The Neutral Fallacy: There is No Sideways in Life: I’ve heard variations on this before, but the basic idea is this: in almost anything you do you are either progressing or declining. There is no real stasis. You are either moving forward OR you are not. You are either staying fit OR you are not. You are either getting richer OR you are not. There is no “well, I’m hanging in there, wealth-wise”. Continual improvement is an exhausting idea, but in most parts of life improvement is the only positive choice.

Self control. Willpower. I Need Me Some of That!: Ugh. Sounded too much like me. I have the ability to focus - like anyone else, I can get “in the zone” on tasks and hammer away at them single mindedly. Sometimes. But far too often I’m not really “into it” and can easily spend hours flitting from one thing to another. “Oh hey, look, I need to do the dishes. Let’s check for glasses in the living room. Oh hey there’s that book I was looking for. I’d better put it up. Hey, there are my juggling balls on the bookshelf. Haven’t done that in a while, wonder how my juggling is? Oops, dropped one, oh, rolled over to the patio door. Hey, there’s a beach towel out there. Oh, shoot, I need to turn the dryer on in the laundry room.” You get the picture. Online I’m even worse, sometimes.

10 Scary-but-Exciting Reasons to Work for Yourself: I know, I know, I am an e-myth dope, I confuse my skills with my abilities to be an entrepreneur (i.e. just because you can cook doesn’t mean you’ll be successful owning a restaurant) but I do enjoy thinking about being Mr. Work-for-Meself-Man. And see, I continue thinking about this by reading articles like this one: 5 Steps to Optimize Your Freelance Job Search

leaving the northeast, a retrospective

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I was browsing through my archives (I’ve forgotten quite a few of my posts) and I came across Why I Will Not Live in the Northeast Forever. I wrote it almost a year before we decided to move to Florida. Some thoughts…

A constant topic of conversation I have with my wife Bubelah is where we want - or should - live. We live in a suburb of New York City (the only major city growing in the northeast). Our cost of living is horrific. We have a three-bedroom townhouse that cost just shy of half a million dollars in 2004, pre-boom. Our house would go for almost $600,000 today.

Ah, 2007, when we still held the laughable idea that we’d get anywhere close to a 20% gain on the sale of our house (we ended up getting 7% before closing costs - net 0%). Since we’ve moved I’d say that we’ve experienced a mixed bag in the cost of living, although part of it is that we’re still getting accustomed to life outside New York and we’ve made some mistakes (shopping at the most expensive supermarket, for example). Some notable differences:

- Food. Food was pricey in New Jersey, and it’s pricey in Florida. If anything we spend just as much on food, although part of that arises from the fact that we aren’t careful about creating shopping lists and we’re picky about organic foods. Some of that will change.

- Transportation. Gas was an afterthought in Jersey; it was cheap and we seldom drove long distances. Here we drive much more. My 2-mile commute to the train station in Jersey has been replaced by a 22 mile drive. However, my daily light rail/subway or ferry costs (often as much as $15 per day), parking costs of $4 per day and miscellaneous tolls/fees (all over the map) are gone. Parking is free and gas (and wear and tear) on my old Pontiac are the only expenses. So far, better.

- Education. Little Buddy’s half-day preschool was $800 in Jersey. Public schools were horrific, and we faced the possibility of two children attending 12-13 years of expensive private (and religious) schools. Now, we have found a wonderful part-time Waldorf preschool for less than half of that. We live in one of the best public school districts in Florida. Huge savings.

- Taxes. New Jersey’s tax burden was horrendous. State income tax rates floating around 4% (for me), property taxes that were increasing to $1200 per month, not to mention the fact that I paid taxes in New York State (and City) as well, since I worked there. In Florida? Property taxes are still high compared to many non-coastal states, but far less than Jersey. No state income tax, and I live and work in the same state.

- Housing. We have exchanged our small townhouse with no yard for a bigger house (not much bigger, though, just better use of space) with a large fenced-in yard for 10% less. Association fees are about 1/4th what they were in Jersey. Having a yard does mean some additional expenses that we didn’t have before; termite protection, sprinklers, etc. Other than that, though, I think we’re better off.

And as I mentioned in the old article, we left a place bereft of public services (libraries were awful, ill-maintained parks and horrible roads) and moved to a green place, with wonderful libraries and a beautiful, well-maintained public beach within walking distance of the house.

I don’t think it’s perfect now that we’ve moved - far from it. Establishing yourself in a new city is tough, socially and professionally. The distances from our families are much greater now, and we did leave behind things we loved (Manhattan, although we seldom visited). Florida has its own long term challenges; while not as serious as the meltdown in New Jersey yet, the future continues to be uncertain until the economy rebounds. Florida fell further than almost any other state when the crash came, other than perhaps Arizona and California.

Yet our goal was simple: to get ourselves out of a place and lifestyle where we simply couldn’t see any hope. The education problems, long commutes and steadily mounting cost of living in the northeast made it increasingly difficult for us to visualize an “end game” for our financial freedom. Now, with lower costs of living we have more options and see at least a glimmer at the end of the tunnel.

photo by Old Sarge

linklings, frozen in Florida edition

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Four totally unrelated observations before getting on to the link roundups:

One of the best parts of the stimulus package - the best, at least in terms of my own personal situation - was the COBRA premium reduction. As long as I’ve been paying the reduced premium, I’ve felt like I’ve had affordable coverage with a reputable company that’s not tied to my employer. I’ve been able to move from one contract to another without switching doctors or learning a new set of copayment rules. It gave me a glimpse of how I’d like health care to look: not related to my employer, and pricey but not so expensive that it would cripple an average family budget.

The temperatures have dropped slightly in Florida but the high-rise I work in continues to blast - literally - freezing cold air out into the work area. I will need a sweater soon. It’s in the 80s outside. I shudder to think of (a) the cost, (b) the environmental impact and (c) the illnesses it seems to cause - half of the office is sniffling and the other half are coughing. It’s unpleasant in the extreme.

I have been writing two ebooks (slowly) and I found a tool to do so that really surprised me. I am no fan of Microsoft Office, preferring Open Office, but MS Office has some nice formatting tools and I’ve been able to put together what are - to me - pleasing “Webby” looking documents. I am trying to use the e-book writing to spur my own creative thinking for this blog.

Finding writing subjects for the blog has continued to be a struggle for me, but I’m trying to broaden my reading a bit to shake up my brain. I blame, recently, Stephen King and football. King is one of my favorite writers, but for some reason my brain seems to get distracted from other subjects. Same goes for football - if you’re a fan it’s easy in the internet age to do nothing but read football ALL DAY LONG. Reading stats and game analysis crushes a lot of creativity. So less pop culture, more esoteric stuff (new blogs, non-fiction books and more notebooking of my own ideas).

On to some links. I will actually have a second linklings post tomorrow - otherwise this would have been the War and Peace of roundups.

Saving For Retirement? Best Move For Your Retirement Plan: I have put off rolling my 401(k) into an IRA for about six months, and I just started moving it this week. I have no idea why I didn’t go ahead and do this sooner - I can think of no possible benefit to having a dormant 401(k) sitting in a separate account when I have my TD Ameritrade rollover IRA ready to go - plus, they have a bonus if you start a new IRA before December 31st.

Did Mortgage Rates Just Hit Rock Bottom?: Surely rates can’t go much lower, although I’d like to have a 2% mortgage if someone would give it to me.

How We Saved Money when Moving: Having just been through this, I liked these tips (actually this is a post linking to the post on the Quicken blog).

Career Planning Saved My Life: While I’m not as optimistic, I do think getting out of corporate employee life and into corporate contract consultant life was a step in the right direction. That having been said, it was only one step, and I probably have another 5 or 6 steps before I’ll be in a role I actually like.

TFSAs, Self Control and Your Future Self: While this article talks about Canadian retirement funds, the point holds just as true for Americans. I know people might think that the tax penalties imposed on early withdrawals from IRAs, etc. might just be the government once again taking a shot at citizens, but it’s one of the few cases where the taxes are good. If penalties keep people from cashing out their retirement accounts at the first sign of adversity, all to the better.

Stop Feeling Sorry For Me - I’m Frugal, Not Broke: Amen. I feel sorry for myself sometimes, too. I have the money to buy a lot of the things that I feel I want in moments of weakness. I’d like a new Prius or BMW. We could afford it. We could afford a lot of things, and although I get a great deal of satisfaction from driving two paid-off vehicles, just once in a while I wish I could yell at people “I drive a nine-year-old Pontiac but I’m not broke you idiots! It’s just not WORTH buying a new car if this one runs and is comfortable and reliable!”

50% Of Poll Respondents Chose Wal-Mart As Best Symbol Of America.: At least they didn’t choose McDonald’s. I don’t like Wal-Mart, but it’s another case where my values collide with my checkbook and my free time. If I need some pasta, some printer paper and some athletic socks, Wal-Mart is a cheap one-stop solution. I know I shouldn’t go there, but I do, because it’s cheap and convenient. I know that by doing so I’m killing other businesses that sell these products, so it’s a vicious circle. The solution? Maybe amazon.com? I don’t know.

Happier: Another great article from J.D., but I have to pick on one thing. I am getting weary of hearing that money doesn’t increase happiness:

“I’ve also come to understand that part of the problem was that I expected money to solve my problems. I expected money to make me happy. Money and happiness, however, are mostly unrelated. That’s just not how it works.” (emphasis mine - Steve)

I have to say that “mostly” is the key word. Money does solve problems. Having money has allowed our family to weather a long bout of no income with almost no long-term impact on our finances. Having money kept the health insurance going when I wasn’t working. Money lets us eat organic foods and send our son to a fantastic Waldorf preschool (and next year, Pumpkin, our daughter, will go, too). So JD’s point is valid - money and happiness are mostly unrelated - but I think having money helps a lot. Not just in the sense of being able to buy a Kindle, but simply to be able to live a lifestyle (good food, health care, freedom to travel, etc.) that allows all those other “happiness boosters” to mean something.

Plus a few more good articles, but I’m tired of typing…

photo by audreyjm529

linklings, labor day in Florida edition

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My family moved to Florida for the weather. There were other factors, but really, at the end of the day, we wanted to live somewhere warm. We didn’t get that mental impact until now - when it’s cooling off elsewhere and still summer weather here. So far, so good… except I still spend too much time indoors in a corporate high-rise.

After our recent attempt to purchase a home fell through, since we couldn’t get on the same page with the sellers, we’ve started looking at houses again. We found two we thought were fantastic, but for different reasons. One is perfect - total interior remodel, a huge screened in patio which can be closed off and climate controlled, a fenced-in backyard and a nice community less than a mile from the coast, but a bit further away from town. The second is in a nicer neighborhood, with a huge screened pool and so close to the ocean you can hears waves from beyond the tree - but the house is a mess. Dog pee stains the carpets and almost every fixture is dirty and dated.

The difference? The second house, in a nice neighborhood, costs so little we could almost pay cash for it (it’s a foreclosure and the bank wants to dump it unrenovated). The first house is a bit further from town and move-in ready and much more expensive (but compared to New Jersey almost laughably inexpensive). So we have a big “house-style” decision to make if we want to move on either one.

A few links I liked this past week…

Are You Really a Permanent Employee?: A post I thoroughly agree with by Kevin from No Debt Plan, guest blogging at Cash Money Life. He talks about why most people seek “safe employment” as a “permanent employee,” but concludes that - while it not may be for everyone - non-permanent employment (contract work) might be a better idea.

The Truth About Star Wars and the Matrix: I couldn’t agree more. What Phantom Menace?

Education Needs to Be Turned on Its Head: I don’t agree with everything Leo says in this article but it’s a subject I think about a lot. We’re starting our kids out at a Waldorf preschool before they head off to public schools. My hope is that Waldorf education will be closer to my ideals about education: namely, education as an exposure to knowledge and a student’s ability to choose his or her own direction.

Proofread Your Resume: Almost goes without saying, but I have so often read resumes where people list there acheivments that its amazing.. [wait, do I need to proofreed that sentence?]

Stop Allowing Fear To Guide Financial Decisions: It always circles back to the scarcity mindset versus the abundance mindset - proactivity versus passivity, goals versus fears, which leads us to…

Your Financial Success Depends on the Clarity of Your Goals: “I want to be rich” is not a goal. “I want to own a business” is not a goal. Get specific, because the broader the goal, the more time you’ll waste casting around trying to reach it.

A few more links:

I also starting reading Aliventures, and really liked this post: Reframing Work #1: Ditching Drudgery and the Conventional View of “Work”. You can download an e-book on the same subject from Aliventures here (opens a PDF).

photo by danperry.com

are you a success junkie?

Maybe it’s one of the celebrities: Suze, Dave, Donald, Robert. Maybe it’s a historical figure: Washington, Peter the Great, Salk. Maybe it’s a sports figure or a business leader. Maybe you can even point to someone less well-known like a community leader or a charitable great. We all have someone whose success - no matter in what area - we admire. The problem comes when you spend so much time studying and thinking about others’ success and give up on your own.

It doesn’t take long on the internet to find dozens of different takes on the ‘right’ way to achieve success. Try ‘make money without a job‘ or ‘lose weight fast‘ or any one of a number of subjects. I’d argue that research in any area becomes counterproductive in a hurry. Listening, for example, to Suze AND Dave is overkill. The basic information comes through from either of them. If your formula for success is to listen to Trump or Orman, though, you’ll have to make a quick decision, because in many ways the two are incompatible. That ability to sort through the crap - in a hurry - is what makes you either successful or merely a success junkie.

Look at finance. I had a bit of a revelation about finance (along with a few other subjects) a few days ago. Personal finance can cover a million subjects: Roth IRA versus Traditional IRA is a good example of quibbling at the edges. I imagine a lot of people spend a lot of time on spreadsheets and reading up on the requirements before tentatively taking the leap one way or the other. For most of us, that time is not time well-spent. Whatever time you save trying to identify the highest online savings rate bank, for example, is time you could have spent trying to earn more (or spending more time on your family, or charity, etc. - whatever has the most value for you).

Robert Kiyosaki has great advice for getting out of debt. Yes, Mr. Rich Dad. I forget which book it was, but the advice seemed far more relevant than all of the strategies I’ve heard from the get-out-of-debt gurus. His advice? Loosely phrased, figure out how much money you need to pay for essentials: food, shelter, transportation. Then go online, set up automatic payments equal to your net income less the essentials, and have those payments go to your debt. Then go out and figure out how to make more money. Get a promotion, a better job, start a side business, etc. Earn more than you spend.

In accordance with the Pareto Principle, I can usually identify a single action that will help me reach a goal far faster than the next four actions might. Example? Losing weight. You can try lots of fancy diets, read dozens of books, or you can take a simple, direct action: stop eating meat. Stop eating bread. Stop eating something. Worry about tinkering and fiddling later.

Some people will decide they want to get fit by getting online, looking up area gyms, calling around for a good price, going out and buying workout gear, scheduling a babysitter or taking time off work, waiting for a weekend and so on. You know what someone who really wants to get fit does? Drops down on the floor right now and does pushups. Some people will launch a business by researching cool names, agonizing over an LLC, trying to assemble long lists of customers, networking and ordering business cards. Others will start working on a product first, then worry about all that other stuff later - after they have revenues locked in. Which kind of person do you want to be?

I think tremendous value can be identified from the stories of successful people. I’ve gained a lot of understanding of the qualities necessary to succeed from reading, and one quality is an inquisitive mind that is open to all knowledge - but that mind is also ready to throw out the junk ideas in a hurry, too. I can assure you that almost anyone you know who is successful - and again, I’m talking about success in a broad sense, from relationships to finance to fitness to spirituality - doesn’t worry too much about preparation. A success junkie, on the other hand, doesn’t really want to succeed. He just wants to watch others succeed. He sits on the sidelines and waits for his chance. The secret? The chance is always there - it’s waiting for you, you aren’t waiting for it.

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