Money Reasons

Smart Reasons to Save, Use and Invest Money

Archive for December, 2009

Inventions That I'd Like to See – Solar Trains

December 22nd, 2009

When thinking of solar power, I always try to think of large flat area for the solar panels to sit and make electricity. I personally think my place of employement should have car port type structures out in the parking lot, with solar panels on top of them. This way it would be a win-win, in that they get a structure to put the solar panels on. And we would get protection from the snow. Not to mention the excellent PR relationship.

Speaking of large areas, a space a train use is a perfect fit. The chain of cars, that a train pulls is a perfect length for solar panel to ride on. I figure, they would still have to be diesel for at least to get the train moving, but after the train reaches a certain speed, then the power from the solar pannels may be enough to handled the steady drive speed.

I’ve seen designs where the trains would go thru a carport like structure with the solar panels attached to the top of the roof.

: Solar Trains

If solar trains every become economical, the solar portion would be a painted coating that’s painted on the covering or a system like First Solar’s could be mounted.

Anyway, I think that’s would be a great use of solar electric systems. Plus you may not wouldn’t need any battery storage element… If fact, maybe the system could even be used as a source of power for an electrical company. If you think about it, many possibilities exists.

The solar panels of today are not like the Jimmy Carter era solar panels! Today the panel are getting very close to competing with fossil fuels on a cost basis (in Carter’s era, the solar panel back then were not even close). It should be an exciting time in the next few years, with wind and solar starting to be noticed more and more.

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Posted in Ideas

Wealth Tip #2: Working Both Harder and Smarter Can Make You Wealthy

December 21st, 2009

I have a wealthy friend who while working through college, became wealthy by eventually buying out a partner in the company where he worked at. This was a risky but very successful move for him.

My friend (let’s call him Jay) was studying to be a mechanical engineer. Jay comes from a family of 7 kids, and money was always tight for his parents so he had to pay his own way. Every year, Jay had to work during college and during the summer. He went through a few different temporary jobs, but the last one was with a small construction company. At first, he worked as an construction worker, but eventually the owners of the company realized he was a smart kid and really good with numbers (plus he had people skills to boot). So they hired him as an estimator/bidder for construction jobs. He thrived at this, it was a great fit for him!

Jay graduated with a bachelors degree in mechanical engineering, but never used it. Instead he got lucky, one of the partners of the construction company decided to retire. They offer Jay an opportunity to buy the retiring partner out (of course, the other partner retired very wealthy). Jay, being a fresh out of school graduate, didn’t have the money, but said yes to the proposition (they worked out payment plan for him).

For the next 10 years, I didn’t see Jay much, he was constantly working, over 60+ hours a week (although we still kept in touch with an occasional game of tennis, he also played in a basketball league).

Today, he’s a multimillionaire. He still works long hours than most of us, but not over 60 anymore.

The point of this post, is that it’s still possible to get ahead with hard work and living a modest, frugal life. Take Jay for example:

Jay never owned a luxury car,
his house is a little more expensive than mine (by around $35,000 to $50,000 dollars more),
he does a lot of DIY projects (I’ve seen him even install a new kitchen fluorescent lamp).
You would think that since Jay is a multimillionaire, he’d hire people to do this yard work… but the doesn’t… Every week during the summer, you’ll see him mowing 2 acres of his 10 acre property on his lawnmower. You might be wondering why does he only mow 2 acres? Well, he leases the other 8 acres to a local farmer.
Jay still works over 50 hours a week, but by choice now (or maybe even habit).
Jay still does the bidding and many other functions now. He works very hard maximizing his return.

You might think that Jay is fortunate that he got lucky and was at the right time at the right place. Yes, this is true, but I bet most young graduates would have passed on the offer (I know I would have). Open your eyes to the possibilities around you. You never know what may present itself through hard work and making smart decisions.

Jay, got a head because no matter where he worked, he gave it his all in a friendly likable manner (part of working intelligently)!

Do you have any personal successes stories to share, where you had to busting your butt to get ahead? That’s what it takes sometimes!

3 comments »

Posted in Wealth

Tags: getting ahead hard work multimillionaire formula wealth by frugality working smart

Income Loss From My Wife Being a Stay at Home Mom

December 20th, 2009

After posting “How I Have Lost Over Half A Million Dollars Having Kids, So Far!”, I started thinking how many of my family and friend’s spouses work.

Let me start with our parents… both sets work. All the people I know at work, their spouse work. My boss who makes at least twice as much as I do, spouse works. Where I live, only one other neighbor’s spouse doesn’t work, the rest do. My college educated sister and brother-in-law (great people), both work. My sister is having a baby in Feb. 2010, and she claims she’s going back to work a few weeks after the baby is born. They already make more than me…

So, I decided to go out to the website: money.com to use their calculator for net worth and see what the median (the median, mind you) net worth would be for someone in our conservatively theoretical income range! The number came out to be $644,100.

: Missed Income

And that is the median! Both my wife and I are very frugal, and based on our frugality habits, I recalculated the number… I figured for us it would be somewhere in the $800,000 to $900,000 range, Grrrr!

Who is to blame for this? Well, unfortunately me! My wife and I discussed whether she would work or stay home raising the kids years before we had our first child. I told her once I make over a certain amount, she could stay home. Ironically, I accomplished that number more quickly then I imagined, and so she stayed at home after my son was born.

In hindsight, I don’t think this was the most prudent move on our part. It especially hits home seeing my 20 something sister start to pass me already with respect to net worth (did I mention that both she and my brother-in-law are both studying for their MBAs? If a future post, I’ll have to tell the story about how my sister won a free house).

Soooo, now that I know I’m behind compared to our theoretical income group’s class, what can I do? I’m thinking it’s time to start some side hustling (frugaldad.com’s word phrase).

How do I feel about my discovery? Sad, but not too disappointed. My kids are doing very well in all aspects of their development. It’s a hefty price to pay though, especially when we’re practically the only ones doing it in these days of the two income earner households. Shoot, If we had that money now, I could go into a semi-retirment state if I wanted to (I’m not old enough to think about that now though)…

Oh well, the moral of the story is, think twice before and your significant other decide to quit work to raise your kids.

9 comments »

Posted in Costs, Family, Kids

Tags: child costs income loss net income net worth stay at home mom

Don’t Be a Scrooge

December 19th, 2009

Life moves fast

In the classic tale “A Christmas Carol” by Charles Dickens, Ebenezer Scrooge was rich because he was extremely frugal (miserly really). So frugal that he never gave to charity, and was always out to save a buck. I know that this is just a story, but truth be told, most rich folk aren’t like this, the statistics back me up on this. But I’m not going to talk about the frugality and amount of charity that the rich dole out (as interesting as that is).

I want to bring to highlight another aspect of the character Ebenezer Scrooge. That characteristic is his loneliness and lack of real friends. In the story, his newphew would stop by at his uncle’s place and invite him to a Christmas party every year. But Scrooge would bah humbug it off and not go. I started wondering, what is the cost of missing an annual parties like that? Very high and here’s why:

The friends (you included) at the Christmas (or any) party will only be that way once at that time. It’s not replicatable. So if you have kids, they will only look, think and be (unique) that way at one time in life. You can never get that event back. If you were there at the party, you could be videotaping it for memories in later years. I wonder what the cost of such memories would be? The only way to really know is to ask someone older that missed them.
When you miss social events, you miss the opportunity to network. But really, that should only be 10% of the reason you would go to such an event. Go because your like people! Go because life is more than the perceived piece of paper in your wallet/purse.
Believe it or not (depending on the party composition), most likely you will learn something new at the party. Where I live, we have neighborhood parties, and at the minimum I learn at least 1 new thing at each and every party.

Why I’m writing this is because I missed a 2000 New Year’s Eve party because I had to be on-site at my company (I’m a techie). The funny thing is if you aren’t there, you really don’t know what you missed (but you did!).

So what I’m saying is “Don’t miss out on life”, there are more important things that just work and money. Do the Carpe Diem thing and “grab life by the horns” when you have the opportunity.

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Posted in Costs

Tags: Kids missing parties party scrooge social cost

Frugal Puzzles, fixing small things can be fun!!!

December 18th, 2009

Hamster wheel

Fixing small thinks is oftentimes fun and can save a few dollars the frugal way.

My son’s hamster wheel was very noise. The spinning grinding sound of the hamster running in it started waking my son at night. I thought about pitching it, but I know that the hamster is healthier since he uses it. So, I thought about buying a new wheel. So I fired up my good friend Mr. Google.com, and typed in the following search words “Cheap hamster wheel”. Mr. Google.com answered by displaying that depending on the type of model, they run anywhere from $7 to $20.

I thought, hmm, it’s effectively broke, so I’ll tinker with it… after all, I’m going to throw it away anyway. So that’s what I did, I took it apart. I then started thinking about the reason it was so noisy. Then it dawned on me… using oil or some other kind of lubricant might make the noise stop.

I didn’t want to use real oil, that seemed like a bad idea! So I took a small dab of Vaseline (any type of petroleum jelly will do), and coated the stem that the wheel rode on. I then slid the wheel back on the stem and gave it a spin. Viola! No noise, the problem was solved!

Not much of a puzzle other than figuring out how to get it apart. Still, I was proud of myself for saving the money, not to mention the green aspect of not throwing the wheel away.

Beaming with confidence from fixing the hamster wheel, I started thinking of other ways I could use petroleum jelly. Then I remembered my old “lamp light warped” alarm clock. The buttons on the time setting piece was not longer popping back up after pressing it. So, a few day later, during a football game (Arizona Cardinals and some other team), I started taking it apart. I unscrewed the cover, and surprise, the plastic pieces fell out (I should know better, but I was distracted by the game). After I figured out how the pieces went back in, I gave each button a small lining of Vaseline on the inside edge of the buttons, and the hole they went through. Yes! This worked perfectly!

Overall the alarm clock was more like a puzzle than the hamster wheel. I probably saved $20 on it. I do know that super cheap ones go for about $10. It was kind of fun figuring it out! I even took the opportunity to make it educational too! I called in both my son and daughter and explained the electronics. This mini puzzle took me about 30 minutes to do (although the football game really took it’s toll on my time efficiency with this one).

Even though my savings was only $30, I had fun doing it and actually proud that I didn’t just toss it in the garbage (Go GREEN!!!)!

Before throwing something away… see if you can figure out a way to fix it or somehow manage to get a few more years out of it somehow.

The environment thanks you in advance!