Yearly Archives: 2009

Income Loss From My Wife Being a Stay at Home Mom

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

Let me start with our parents… Both sets of parents work.  All the people I know at work, their spouse works.  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

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?  In a future post, I’ll have to tell the story about how my sister won a free house. So 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 coined-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 these days in a world of the two-income earner households.  Shoot, If we had that money now, I could go into a semi-retirement 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.

Don’t Be a Scrooge

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Future Scrooge

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.

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

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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.  So I thought it was time to put on my thinking cap and figure out this frugal puzzle.

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 Cardinalsand 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! 😉

I Am "Greedy When Others Are Fearful!"

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My title today is based on the following quote that Warren Buffet presented in one of his annual stockholder meetings.

Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful.

In beginning of 2009, I changed my 401(k) contribution percentage to the maximum that it could be for the company that I work at (15% of my salary).  I made my decision based on the quote above, and on the confidence I got from reading about Warren Buffet making his stock purchases in the later portion of 2008.  Most people I talked to were pulling their money out of the stocks and putting them in money market funds or bonds.  This is what you don’t want to do!  After the market has tanked around 40%, I didn’t want to pull my money out and have it sit in cash.  That’s selling low and buying high, very bad!

While the smoke hasn’t totally cleared yet, everything is looking very positive at this current moment in time.  I believe that it helps having assets is different types of investments.  I think Jim Cramer is right on this one “Diversification is the only free lunch”.