Archive for April, 2010

Spending More Money For a Better Life, Part 2 of 2

April 19th, 2010

I thought about this for about a week, and I finally decided on how much more I’m going to spend on myself!

DRUMROLL….  I’ve decided to increase the amount that I’m going to spend by $100 dollars a month.  Yep, I’m living large, (lol)…

So why only $100? Because I already get a certain allocation per month, and I think $100 extra a month would be just enough to enjoy my life a bit more.   I know, $100 doeesn’t seem like much, and it’s not…  but it should be just enough to make a difference for me.

In the summer, most likely I’ll be spending $200 extra a month.  This is okay because during the winter months I plan to scale back down my extra spending to $50 a month.  with just a bit of work, I can make it so that the average amount that I will spend will still be $100 extra a month.

The following is a list of activities I plan on using the extra money for:

  • Golfing with my family
  • an occassional drink out with friends a few times a month.
  • eating out at least 1 extra time a month.
  • activities with my kids, maybe put-put golf, or laser tag.

The earlier post in this series was called Spending More Money For a Better Life.

This might seem like a small change, but I’m looking forward to it!  It truly is about balance, and this will help me right the inbalance that I have been experiencing!

-MR

MoneyReasons Weekly Cache 2010, April 18

April 18th, 2010

Weekly Cache – 2010, April 18

 

Random Thoughts:

With Taxes out of the way, my stress level had decreased substantially.  I haven’t been this late with taxes for a long time!!! 

It’s time to mow where I live, and so I took my mower out of the garage and pulled the cord…  It started up the first try!  I thought this is a great way to start the mowing season!!!  Until the lower metal hand part broke again…  So far the metal handles has broke 5 times.  I’ve had the handle welded 3 of the 5 times.  But now I decided to replace the entire piece.  It only cost me $20.00 for a new part, much cheaper than buying a new mower all together.

 

My Favorite Top 4 PF Blogger Posts For The Week:

PFBlogs.com:  Finally, A Million! - This blogger and his wife accomplished a goal of having a net worth of over $1,000,000!  Congratulations to them!

Eliminate the Muda:  Combat The Closing Techniques – The Reverse Psychology Close  - This is a great display of how salespeople use reverse psychology, but I thought it was cool because it showed that very intelligent people get duped too.

Canadian Finance Blog:  14 FREE Ways to Spend a Friday Night (FUN Included!) - Check out these clever ideas, while a most of them I knew about already, there was a few that I haven’t though of before.

Monevator:  Video: John Maynard Keynes versus Friedrich von Hayek - This is a very cool video considering it’s focus is economics!  The Investor does a great job summarizing the views of the 2 economists at his site!

Special Yakezie Carnival Link:

Yakezie Carnival # 8 is being hosted by MyMoneyMinute

My Favorite Post from Money Reasons This Week:

Expenses That Are Like Neverending Lifetime Debt - I have a long way to go to get expenses like these under control!

 

Closing Thoughts:

Well, my income taxes were completed, and frugally at that.  I used the Taxact software and it worked great, just like it has for the last 5 years that I’ve used it.

It was a pain though,  I had way to many stock trades that I had to enter into the program manually.  Since my brokerage company offers a free import option into TurboTax, I might break down and use that package next year…

I hope your tax preparation experience was smoother!

-MR

Is the Stock Market A Fool's Game For Us Small Investors?

April 16th, 2010

The Goldman mess hit the fan today, and it’s all over CNBC. The market is down -144 right now!  But, I’m not going to blog about Goldman, instead I’m going to blog about the stock market and if it’s a rigged game…

What’s a small (WallStreet calls us “Retail”) investor to do?

Perhaps, we should sock away our money under our proverbial mattress at home? Maybe…, but not me. After all, when you store money in your house, it loses value to inflation. It’s kind of like a glass of water sitting in the middle of your house… eventually the water will evaporate, leaving just worthless residue in your glass…

So are we the little investors at an disadvantage? Yes and No.

The “Yes, we are playing a fool’s game” argument:

  • The institutional investors (mutual funds, hedge funds), have trained professional that do investing all day!
  • They can control the momentum of a stock, with their buy orders alone.
  • They have access to the target company CEO and other executives.
  • They have the education and skill to play derivatives to hedge there losses
  • Most retail small investors (us), only play the “buy and hold” game.  We are a one trick pony.  And for the most part, that is a good thing actually…

The “No, we have an advantage” argument:

  • We can capitalize on the institutional investor’s momentum, so we can skim of off some of the price appreciation that the institutional investors create.
  • We don’t have to worry about the numbers and competing against other institutional investors, esp. quarterly performance numbers.
  • We can take positions in smaller companies that are too small for the institutional to gobble up.
  • We are fortunate enough to be able to examine the financial statements of all publicly traded companies.
  • Expensive Transaction fees are no longer the concern they use to be.
  • The internet provided financial information quickly, vs the past.

I do know if decent stocks are purchased and if they are left to grow (basically ignored), they can appreciate to have high levels.  This happened to me as a kid growing up.

I guess it’s all what you are comfortable with.  I will say that today, I see the downturn in the market a buying opportunity, especially in the non-financial sector (why are these segments down today anyway, most because of fear.  I follow Warren Buffett’s advice ).

If you don’t have time to invest, then consider mutual funds or etfs.

Readers, what is your opinion on the matter?  Do you think the stock market (or any financial market for that matter), is rigged gains us small investors?

-MR

Dr. Phil Drops the Ball on Bad Kids in School

April 15th, 2010

Right now, I’m watching Dr. Phil, and he’s defending a nicely dressed, pretty young girl (age 12) that wrote on a desk with her marker.  I guess that the school, expelled the girl, and call the police on her.  The police then arrested her and handcupped her.  Then she stayed handcupped in the police station for 2 hours.

This is the kind of sensationalize that I despise in the media.  Here is my list of issues that I had with this show:

  1. Nothing was mentioned of her prior history.  Just this particular incident.
  2. Neither the school’s principal, teacher, nor the police officers were there to tell their side of the story.
  3. The girl was coached on how to answer the questions Dr. Phil asked her, or… if she wasn’t coached, then she should have been smart enough not to deface the schools property.
  4. She claimed that she’s now afraid of teachers and police officers…  But she really wasn’t harmed in any physical way.

My problem with this is that the girl is fine, she wasn’t hurt and she would have learned a lesson, except that her mom is now suing the state and school.

There were other stories too, but all were one sided like the one above.

To present a story like these without the details, is kind of like Chuck Liddell (Chuck Norris was busy) picking a fight with an 80 year old blind man.  Way too one-sided!

The last story was the fault of a teacher that restrained a boy that wouldn’t listen.  The boy died, because the teacher sat on him!  To me this sounds like a single person making a bad decision.  Instead of going after that person, the foster mom is going after the state and school.

The thing what Dr. Phil forgets is that the teachers aren’t there to babysit or deal with drama, they are there to teach.  If a child is being disruptive, the child needs to be removed from the class or disciplined in some way, maybe even being expelled.  I’m sure that girl above is a fireball, and probably ruined the entire class for that class session, many times in the past.  Sometimes, it’s the small things after mountain of infractions that breaks the camel’s back… 

This is why I dislike media, especially talk shows soooo much!  People believe this stuff, and jump on the bandwagon, but if they were in the same situation… well, then that would be different!

In this time, where kids shoot other kids and teachers, I think classes should be orderly and respectful.  If you have a bad influence, get them out of that the public school! 

Dr. Phil’s panel of so called experts were lawyers representing the so called “victims”.  The legal show panel of experts recommended talking to the bad kids, and such things as sitting beside them for the class duration.  But I remember when I was a school, and a kid goes bad (especially teenagers, including 12 year olds), trying to talk them out of being bad was a waste of time, everybody in the class loses when that much time is wasted on one child while the rest are there to learn.

You may ask, why do I care about this?  Well, when the so called “victims” go after the schools and state, they are really attacking us, the taxpayers.  That money comes from you and me.  So here is yet another way that people rip us off!!!  I wonder how many of them are fradulant?

I suppose soon the schools and state will need insurance policies to protect them from being sued by partent (especially those where their kids were even injured)…  Perhaps we wouldn’t need such high taxes if the state and school systems weren’t getting sued for issues!

Have you ever encountered a show, where the presenation is so one sided that you know it’s bogus?  What do you think? 

Good thing these kids were not in other countries…  I wonder how Russia, China or other countries handle such issues?

-MR

4 Different Ways To Learn Financial Lessons

April 14th, 2010

After commenting on Mrs Frugal’s cooltobefrugal.com site, on post “Do Your Friends Share Your Financial Values?“,I realize that we learn financial lessons in mainly 4 ways.

  1. Learn from reading books, listening to teachers, and taking financial advice in general.  People that learn this way have the easiest time  picking up the concepts and avoiding major losses.  They quite literally learn from your mistakes so that they will never encounter them!
  2. Learn by ignoring what others have to say, and doing it your own way.  This method of learning is the most ineffective way of learning.  I have to admit, I went through a phase like this at one time.
  3. Learn by watching others and mimicking there actions.  This way is really a hybrid mix of #1 with a splash of  #2.  These people listen to what you say, but they also have to experience it for themselves (to let it sink in).  Still this is much better than #2!
  4. Doing the oppositive from what was trying to be taught.  I have a small subgroup of friends in this category too.

Okay, now here is the meat of this post.  If you ever try to teach your friends or family about finances, only teach the ones that learn using the following numbers: 1,3!  Those groups are trainable!  Life is to short to waste your breath on groups that don’t care!

The problem with #2 is that they aren’t going to do what you teach them anyway!  The are hand-on people that must experience the failures first hand to learn anything!

The problems with #4 is that they think you are trying to trick them or screw them somehow.  This is a suspicious bunch!

People move from from techniques 1 thru 4 at various times in there life.  I’ve been 3 of the above at various points in my life (I’ve never been #4). 

How do you learn financial principals?

-MR

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