Money Reasons

Smart Reasons to Save, Use and Invest Money

Archive for September, 2010

Are You Afraid To Work?

September 30th, 2010

After I grew out of my teenage years, I started to become afraid to work!!!

Oh, I wasn’t afraid to work a respectable job, but I would no longer consider working at jobs that I thought I was too mature for, or too girly, or just plain beneath me as a young adult!

I passed plenty of interesting jobs because of the way that I thought. I worried about how I would be perceived if one of my peers saw me. In some ways, I was embarrassed to work such jobs because I didn’t want people to think that I was desperate and would do anything for money!

I was so afraid to do work that wasn’t traditional, that I wouldn’t take any job that wasn’t something that I considered normal and respectable! This was incredibly wasteful of me, and I’m embarrassed to say that I was too timid to pursue any ideas that I had to innovate or come up with an original ideas to make money.

So what ideas did I have that I was too afraid to work at, you might be asking?

One such idea was a Lawn Mower Artist! I always thought it would be cool to offer a lawn mowing service that through the use of fertilizers and cutting lawns at different heights could create different pictures in potential client’s lawns.

As a test, I once carved the batman symbol in the grass at my parent’s house, just to see what it would look like… (it looked awesome by the way).

But the same technique could be used to carve a football, soccer ball, family name, and even more complex visuals!

Now I look back and wish I had tried creating such businesses when I was a young adult with more time on my hands. I think it could have been at least a little bit of money, and a lot of fun!

Do you know what I mean by being afraid to work? Hopefully it was just me…

-MR

sun and grass

13 comments »

Posted in Employment

Tags: afraid to work lawn artist original business respectable job working

The Curse of the Accidental Millionaire

September 29th, 2010

The Curse of the Accidental Millionaire is not realizing that you are a millionaire!

What I mean by the previous statement is that instead of saving the money you earn and making it work in investments to become rich, you just increase your lifestyle to match your new income level and status.

The problem is your stint as an Accidental Millionaire may be short-lived if you don’t have the assets to back it up!

The Curse of the Accidental Millionaire is really about a friend of mine. At one time he was a highly paid director for a decent sized company where he had about 46 people reporting to him.

He had it all, a BMW, a half million dollar house in the mid-west (which is the typical McMansion that everybody talks about), a country club membership, and the most elaborate vacations!

Why I remember him telling me that for New Years Eve, he took his wife to the Hilton hotel and spend over $1,000 just for that night! Speaking of his wife, she of course has a $10,000 diamond wedding ring, with an equally expensive wedding wrap. My friend and his wife would eat at restaurants that ran well over $100 for just the 2 of them.

Then misfortune happened, while I’m not sure of the exact details, he decided to work for a different company. That company paid well too, until they laid him off…

Today he has nothing, my friend and his wife got a divorce and together they owe about $100,000 in debt.

If my friend had sunk that money in a balanced investment portfolio and controlled his spending by living below his means, I calculate that he would have a net worth between $750,000 to $1,000,000 dollars today, or perhaps even more!

So the takeaway for me from watching his experience with money are as follows:

Live below you means and don’t scale you spending up as your income increase by large bounds.
Buy into investments that reduce your taxes while you are earning such a large salary… such as 401ks, IRAs (if you qualify) and other retirement options. That way you actually save more of what you earn instead of paying the tax man. Later when you are retired and you are in (most likely) a lower tax bracket, they will get less of your hard-earned money!
Chose a practical, frugally logical spouse over one that has no clue about money. I married a frugal accountant and that made all the difference!
Pay attention to past stories about your potential mate, if they tell stories of going on elaborate vacations and still have an actually engagement ring from a previous failed engagement… These little warnings should set off loud alarm sirens in your head!!!
Schedule an appointment with a fee based financial advisor! Perhaps those third party eyes will tell you if you are on or off the proper financial road or not!

And so concludes the story of my friend that fell victim to the curse of the accidental millionaire. Don’t let this happen to you, learn as much as you can about finances today, and work with your spouse to try and establish your financial goals, to ensure a smooth path to riches!

Readers, do you know of any accidental millionaires that were cursed to lose it all because of poor financial planning or other issues?

-MR

18 comments »

Posted in lifestyle

Tags: accidental millionaire losing it all Millionaire

Dividend Stocks, Lunch Experiment Update #4

September 28th, 2010

It’s time for my Dividend Stocks Update on my Lunch Experiment!

For the first 2 stocks in my experiment, I borrowed money from my checking account so I could seed the money for the initial investment. But since I fully paid myself back on the first two stocks (ANH and EVEP), I decided to take borrow more money from my checking account so I could purchase some shares of another dividend stock.

This time I chose a dividend stock called Chimera (another REIT). It’s dividend yield is a ridiculously high 17%.

Initially, I was only going to borrow $1,000, but I decided to bumped the amount up to $2,000.

Since I’m getting money from my other dividend yielding stocks for lunch, I decided to bump up my weekly savings rate to $60. So I should be able to pay myself back in less than 33 weeks (sometime in mid-May 2011).

Here is my Dividend Stocks for my Lunch Experiment Spreadsheet:

Stock Name	Anworth	EV Energy	Chimera
Stock Ticket	ANH	EVEP	CIM
# of Shares	260	45	600
Orig. Price	$7.84	$23.25	$4.01
Curr. Price	$7.16	$34.26	$4.14
Orig Cost	$2,038.14	$1,046.25	$2,404.80
Curr Value	$1,861.60	$1,541.70	$2,484.00
Annual Yield	13.87%	8.85%	17.27%
Dividend / year	$258.20	$136.44	$428.99
		Total Dividends	$823.63
		52 weeks	52
		Dividend / week	$15.84

Overall, I’m pretty please with the outcome of this experiment, but now let me explain some things about my experiment:

The money used in this experiment is basically “Free Money” because it would have been spent on lunch going out with the guys!
Since it’s “Free Money“, I can afford to lose it all of it if it came down to that! Yes, I would cry a bit at first, but its money that would have been wasted on eating out anyway.
Since I can afford to lose this “Free Money“, I can take risks that I normally wouldn’t take. I usually don’t recommend anyone buy a stock with a 17% annual return. This dividend yield will come back to earth eventually!
This is purely for fun, that’s why I call it an experiment

And now for some interesting facts about my experiment results:

EVEP is up almost 50% from where I bought it at! To bad I only bought $1,000 dollars worth.
ANH is down 8% from where I bought it at! To bad I bought $2,000 dollars worth of this stock (booo)
CIM recently raised it’s dividend payout for the quarter by 1 cent.
The guys try to convince me to go out to eat with them more, but I’m content on doing the library thing. Occasionally, I’ll go with them for sushi! Sushi is my kryptonite when it comes to eating out…
I get a huge kick when I see the dividends hit my online brokerage account.
Yes, I am nervous about the tax cuts expiring though! Perhaps I’ll have to move my lunch experiment to my roth ira account…
Doing a real documented experiment like this has been a great experience!

I’m having a great time with this experiment, so far I figure that if the dividend yield rate stays the same (which is highly unlikely), I would be able to go out to lunch twice a week with the guys!

Ironically, I no longer have a desire to go out to eat at lunch and spend so much money. In fact, now I mainly go to the library at lunch and read other personal finance blogs and work on this blog!

What do you think of my lunch experiment and my progress? Do you think I’m crazy for going with such a high stock dividend yield?

-MR

18 comments »

Posted in Experiment

Tags: dividend stocks free lunch free money Lunch Experiment

5 Ways To Save Money When Eating At Work

September 27th, 2010

There are plenty of ways to save money when eating at work, and today I’m going to mention my 5 top ways to do so!

5 Ways To Save Money When Eating At Work:

Pack your lunch! This is the best way to save money on lunch, but you must be thoughtful. If you drive to the store every few days to buy the food ingredients to prepare your lunch, you are adding to the cost of lunch because of the extra gas expense! So ideally, you would go perhaps once a month to go shopping for the food ingredients. Buying in bulk helps too!
When going to a drive-thru, only buy from the value menu! A great disappointment of mine is that one of my favorite McDonald’s breakfast sandwiches, the Sausage Egg McMuffin, is not on the value menu! So to buy one of those, it costs $2.89 at my local McDonalds. The dollar menu Sausage McMuffin sandwich (which is the same but without the egg) only cost $1.00! So that one egg on the Sausage Egg McMuffin sandwich costs more than an entire cartoon of eggs, so do I still buy the Sausage Egg McMuffin? No, I don’t think so!!! I’ll take the Sausage McMuffin please!!!
For fancier restaurants, consider soup, or soup and salads instead of the regular meal. I’m often surprised to find that the soups are much cheaper than the other entrees on the menu. And some soup options are down right delicious! I’ve had my fill of surprises lately at restaurants like Rocke’s, where their soups are superb!
Keep a cheap meal in your desk drawer! At work, I typically keep a meal hidden away in my desk drawer. I like the instant oatmeal (brown sugar is my favorite) packets, and I also keep about 10 ramen noodle packets in my drawer too. Both are very tasty if they are only eaten once in a while!
If you absolutely have to go out from lunch with a group of friends from work (networking and all), don’t spend a lot of money. Try drinking a few glasses of water before you go out to lunch. There is a good chance you won’t be near as hungry after drinking at least two full glasses.

I use all of these techniques when eating both breakfast and lunch on work days! My only vice is the McDonald’s lattes, that I have 4 days a week, but at least it’s covered by the dividends that my lunch experiment stocks yield.

Did I miss any other ways to save money at lunch?

-MR

25 comments »

Posted in Frugality

Tags: cheap lunch saving money

MR Cache 2010, Sept 26 – Changes At My Site

September 26th, 2010

Weekly Thoughts:

I don’t like to write articles on Friday and Saturday nights. On Saturdays, I do my weekly review post called ”MR Cache” series ahead of time so that I minimize my Saturday night work… But Friday night’s post I would often skip, leaving Saturday morning without a new post. Now, I’m content with leaving Saturday empty, but then I started thinking, “Why not post something funny that I create earlier in the week“.

And thus was born the limited series: Money Fight Matchups! A semi-humorous fight matchup between different financial groups ( like Freegans vs Minimalists and then Minimalists vs Misers). I’m also considering expanding my creative process to occasionally drawing an funny comic (As a young boy, I would often draw for hours)…

My Favorite Reads of the Week:

Time’s – It’s Your Money: 138 Money Tips - Great tips from a compilation of an incredible cross-section of various pf bloggers. Money Reasons is both humbled and honored to be included alongside those other great pf bloggers in the article! The list of Brad’s tips are fantastic!

Lazy Man and Money: Vacation from Blogging. - While this blogger was vacationing, he put a link up, where I was one of the links offered for people to check out. In this case, I just wanted to say thanks and share some link love back!

Budgeting in The Fun Stuff: Going Too Far to Save Money - What a fun post, and one that made me remember people who go to far to save money. Even the comments were a great read!!! Check it out, perhaps you can think of some additions to add yourself!!!

Everyday Thoughts and Tips: What Will Happen When Kids Have To Live In The Real World? - ETT talks about the way certain parent, coaches and refs let kids act like jerks. She and I both wonder why? I blame our sue happy society, nobody want a lawsuit filed against them… even if it’s obvious that there is no case. Personally, I think the US is at a breaking point with some of this stuff.

Cash Flow Sherpas: Saving Money and Time With Audiobooks – Great article on how Audiobooks saves money and potentially your life… Okay, I confess, this is my guest post at Cash Flow Sherpa’s site. As regular readers already know, I’m a great fan of getting audiobooks from the library!!!

Watson Inc: Why Do We Save Anyway? – Roshawn does a beautiful job of summarizing why we save money, I was truly impressed. For a wonderfully analytic piece broken down in an easily digested format on saving reasons, check this link out!

Wealth Pilgrim: Family Business Consulting Free Resources - Neal speaks about the resources that are free or near free available to small family businesses. As I try to get my kids involved with their own business experiences, these resources are something that I will consider in back of my mind!

Len Penzo dot com: 21 Reasons Why Corner Lots Are For Suckers The parents of my best friend growing up had a corner lot, so I know all of the horrors that Len identifies with his 21 reasons! If you are considering buying a corner lot, please, PLEASE read Len’s article first! I think you may be in for some surprises!

Well Heeled Blog: Gen Y, Recession, and Money Attitudes: My first post at LendingTree Blog - Well Heeled is now writing for Lending Tree! How cool is that! Her first article was wonderful, check it out: Recession Changing Generation Y Money Attitudes!!! I was very impressed!

Grumpy Rumblings of the Untenured: Third Stage of personal finance: Boring? - I’m in the third stage currently, and but I’ve decided not to become complacent! I’m still going to hustle and try to do side work. It is a comforting stage though, and I’m glad I’m here! Nice writeup!

My Favorite Post from the Week:

My favorite post this week was Raising Savvy Business Kids, but mainly because I’m all about raising my kids to my best abilities!

Closing Thoughts:

This was a great weekend! Both of my kids scored goals in soccer on the same day! This is the first time that I think they both scored goals on the same day ever! I was very proud of both of them!!! Someday, when they are older, I hope they read this and realize how great their Dad thinks that they are, and how luck I am to be their Dad!!!