I hate traffic. I hate traffic with a passion hotter than hellfire. It’s such a waste of time. Despite that, I decided to brace the stormy weather and rush hour traffic because I miss my family and beautiful little niece who I haven’t seen for couple weeks.

The result is a supposedly 50-minute trip turned into almost 2 hours of driving. My daily commute is 30 minutes one way and that’s the maximum I would endure in terms of everyday commute. If you ask me to commute 2 hours everyday, you may as well make me watch 24-unbroken-hour of Oprah, or just bury me six feet under. Today, I did it for a good reason so I’m not too angry.

Nonetheless, it’s such a waste of time. This makes me wonder if anyone else can stand to voluntarily waste hours in a mobile-metallic-prison everyday. Surprisingly, there are countless in the bay area! People here willingly sacrifice their life in commute in order to own a bigger house in area further and cheaper. They also do so all for a better paying job. The loss of time means less time to do things you want and less time to spend with family and friends. I can’t see how a bigger house or a little more money is more important.

I can even go as far to summarize those people’s day: eat, shit, commute, work, and sleep. All for the sake of a bigger house. All for the sake of a 6-figure job. All for the sake of money. All for the sake of greed.

Besides the cost of time, there are also the cost of air pollution with the hive of cars on the road… brake and gas… brake and gas… thousands and thousands tottering at snail pace. The situation is exacerbated in the past few years by what I said above. I guess they are driven by the supposed American dream. Ultimately, this contributes to the increasing air pollution and the ever increasing oil consumption. This also leads me to theorize that low-emission vehicle is not a practical solution to lower green house gas.

Of course, you can argue that over population(humans) and over concentration(companies) contribute to our traffic condition, but undeniably, greed plays a role in the situation. Einstein said that human stupidity is infinite. This demonstration of greed provides some proof.

It sounds like the world is ending out there these days. And people are not happy if they do not freak out like chicken without head for a day. It’s a party out there. Actually, it’s the crashing of a long lasted party out there.

Regardless, I guess everyone’s wondering what to do with their money these days, if they have any left over that is. I hope that you have been nice with yourself and saved money and avoided debt like my blog and many PF blogs talk about out there. Yeah, I know it’s boring, but you gotta do what you gotta do.

I don’t usually talk about investing much because I am no expert. I simply have some experience from the last 2-3 years of participating in the market. At the same time, there are many more resources and blogs written by people with expertise. Though let me share a little bit today…

Despite all the chaos and bawling out there, I will simply continue doing what I have been doing – putting some money in saving and investing the rest. In fact, I will put what I can afford into stocks and index funds as they keep falling and into bargain price, given that I am in it for the long haul. Plus, the banks’ savings rate will soon follow the massive rate cut by the Fed.

Simply put, long term is the simplest way to go. Trying to time the market is more or less gambling (been there, done that). It takes time and effort and is not even worth it, especially for my lazy behind.

If you don’t trust me, listen to the great “Sage of Omaha” Warren Buffet:

I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.

If a business does well, the stock eventually follows.

Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.

Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.

Never invest in a business you cannot understand.

Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.

Our favorite holding period is forever.

So invest in stocks(companies) that have solid foundations and hold. Personally, I like to find them with dividends. Or to make things easier, you can put your money in various index funds and just wait.

But before you go diving in (now or ever), there are prerequisites:

• You can feed and put a roof over yourself and your family. You may think this is silly, but if you think about what a silly gambler husband/wife/father/mother/sibling can do to a family, it’s not so funny anymore.
• You have a certain amount of saving. They call it emergency fund out there, and it should include 3-months or 6-months living expense. To plan for the worst, save enough so you feel comfortable even if you lose all the investing money.
• You have minimal bad debt. This includes the ones without tax deduction and with high interest rate.
• You are not emotionally attached to the money you invest. This is why I said you need to have a comfortable amount of saving. Also in other words, don’t gamble with your shirt, or you most likely end up…naked. This will prevent you from freaking out like others and moving money around to “unintentionally” time the market.
• For the sake of long term, invest money that you won’t need in the next 5-10 years.

Yes, it’s not a good feeling to see BOLD RED across the portfolio, but once you learn to look 5-10 years down the road, it’s not so bad. Okay, I’m done with my investment talk and probably for the last time :P

One last word, investing is supposed to be simple.

The theory of relativity is one of Albert Einstein’s greatest achievement. Today, I apply it to our perspective on money to explain the pay for being directors and CEOs. And don’t miss out the wonders of CEO perks.

From $21,000 an hour, at your expense:

In 2006, the latest year for which numbers are available, 85 corporate directors took home more than $1 million.

From Is a CEO worth 364 times the average Joe?:

Top execs at Fortune 500 companies averaged $10.8 million in total compensation in 2006.

In terms of relativity, the passage of time is drastically different from someone sitting on an Herman Miller chair to someone sitting on a porcupine. Likewise, the value of money is different for owner of an Enzo Ferrari vs. owner of a 20-year-old rusty beat-up Corolla. In literal terms, for commoners and middle class folks, including myself, a dollar is just a dollar, but for the people who peer down on earth from Mount Olympus, they speak in terms of thousands. Base on the said theory base on relativity…

Directors who earn $21,000 on an hourly basis, that is a whooping $21 dollars. That’s a couple happy meals there.

For CEOs who make millions each year, their salaries are reduced to a couple thousands dollars. Ah, poor bunch living in poverty. No wonder they needed company-sponsored social security. With high inflation and increasing energy cost, I see them needing help from their companies more than ever.

Now that we have applied relativity to the dollar, those people no longer sound so impressive. That should bring us some solace and comfort knowing that they feel as poor as we do. Yeah! It has also become clear why they strive so hard to become billionaires because it’s no different from us trying to become millionaires!

And guess what, today’s Dilbert comic ironically is on the same topic!

Below are some notable(laughable) perks mentioned in The worst CEO perks, though I beg the difference and would title it best instead of worst. And if you apply relativity to all the numbers by removing the last 3 decimals, then all the perks will make perfect sense. In fact, they are of the same value as the perks the white collars get – unlimited supply of paper, staples, post-its, and what not. More fortunate ones may get international long distance phone calls, like CEOs with their private jets.

• Chairman and former Chief Executive Vincent Gierer Jr. [of UST Inc.] got $6,500 for his wine allowance, despite making more than $6 million.
• At Anheuser-Busch, execs enjoy unlimited free beer “for personal use and entertaining.”
• Shareholders of Nuance Communications footed the $25,911 bill for a personal assistant used by Chairman and Chief Executive Paul Ricci. [And his] $3,896 tax bill.
• Motorola executives get personal health coaches.
• i2 Technologies paid $942,000 to shuttle CEO Michael McGrath back and forth from his home in Maine and his office in Dallas during the year.
• United Technologies CEO George David wasn’t far behind. His shareholders forked out $612,000 in 2006 for his personal use of the corporate jet.
• Even CEO Martin Glynn was paid $13.8 million in salary, stock incentive grants and other pay in 2006, HSBC paid him a $177,600 rent allowance, plus an additional $150,000 to cover the tax on the value of the rent.
• Liberty Media shareholders last year chipped in $319,278 to help Chairman John Malone pay his taxes.

After reading all that, let’s begin singing what I learned in singing class, “Oh what a wonderful day~~~”.

Now, the title is NOT true. But if I am to become rich, I would undoubtedly be travelling the world, eating fine cuisines, drinking fine wine, accompanied by world-class beauties. Money, woman, food, and wine. Everything a man wants. By now, you are probably thinking what a superificial douche bag or perhaps, this materialistic son of a #@$%!. I hope you didn’t take me seriously.

The truth remains, that I am not filthy rich like that, yet. Most unfortunately. So here I am trying rigorously to get there, like the majority of people out there, ever so diligently, with so much discipline, day after day. Though I can probably be a much cheaper person than I am now, so cheap that I can save so much today and by the power of compounding, become multi-billionaires with a “B.” Then I’ll finally be able to do what I want… perhaps some of the stuff I mentioined at the beginning :)

So I will spend all the coming years chasing and chasing after this destiny. Who knows how long it will take for me to save? Probably will take awhile. But I will finally be able to do all the things I wanted! But likely in lesser health. And likely with less enthusiasm. I may even have saggy, flappy skin by then, yikes! Then I’d realize I’ve wasted all those years not living at all, being a cheapo, which defeats the purpose of all the effort on making money and saving so much. This makes me think of the ambitious fellas out there relentlessly accumulating wealth solely for that purpose, meanwhile forgetting family, friends, and utmostly themselves. Then there are those who consistently work ungodly amount of hours each week. I feel kinda bad for them. Those poor things.

I like to keep myself in perspective, though I admit these thoughts sometimes make me wonder why the heck do I work so hard and then I may feel like giving up. Those are brief moments. More importantly, by seeing this, it helps me to maintain a balance in life and stay sane in this crazy world, though I could be the mad one instead. I would say that my entire wealth accumulation process best serves to eliminate money as an issue to give me freedom to do other things.

As such, the following story is what strikes a chord in me to write the above.

An American businessman was standing at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The American complimented the Mexican on the quality of his fish.

“How long it took you to catch them?” The American asked.

“Only a little while.” The Mexican replied.

“Why don’t you stay out longer and catch more fish?” The American then asked.

“I have enough to support my family’s immediate needs.” The Mexican said.

“But,” The American then asked, “What do you do with the rest of your time?”

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take a siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life, senor.”

The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds you buy a bigger boat, and with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats.”

“Instead of selling your catch to a middleman you would sell directly to the consumers, eventually opening your own can factory. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise.”

The Mexican fisherman asked, “But senor, how long will this all take?”

To which the American replied, “15-20 years.”

“But what then, senor?”

The American laughed and said, “That’s the best part. When the time is right you would announce an IPO (Initial Public Offering) and sell your company stock to the public and become very rich, you would make millions.”

“Millions, senor? Then what?”

The American said slowly, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take a siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos…”

We all like to spend money. Let’s admit it. It’s such an enjoyable experience to fork over the green paper for the things that we have always wanted, whatever it may be. Sometimes with saliva dripping out.

If I know when exactly I’m gonna die, I’ll probably time it exactly when to quit my job with enough savings, then use that money optimally on the remaining days, and then make sure to spend the last dime I have on the last day of my life. Heck, a better idea would be to take out the largest permitted amount of loan when death is around the corner (one that will cancel upon death).

Unfortunatley we don’t know when we will die. Rather sad.

Precisely because of that, the fever is ignited around personal finance blogsphere to talk about saving, budget, and retirement. From those topics, frugality is often talked about, a term for which I define as finding ways to spend money efficiently. A side effect could be the fact that some of us may become borderline-cheap, or worse yet, plain-cheap. So cheap that once it took me forever to decide to buy a simple blender.

It is important to find a way to balance between spending and saving. One helpful way of thinking is to treat every spending like an investment. In fact, I’d take out the word “like” and say that every spending is an investment.

There are so many parameters involved in life – happiness, comfort, convenience, family, stress-level, health, financial security… The list goes on and on and they are all inter-related, which makes finding a balance extra important. Now imagine that in each unit of time, each of those parameter becomes an individual stock. Now we have a stock market. We can pick which stocks and whether to invest short-term or long-term. You decide!

As such, I’d say I’ll splurge on Starbucks at lunch sometimes, despite I do have a mini-coffee-machine in office. And yes, I did read about the latte effect, and in fact, way too many times because everyone talks about it on their blogs. Currently, I switch in between Starbucks and making my own coffee. Why? I work hard to make money, and I’m ready to spend it to enjoy a Starbucks specialty drink for few moments working in the office and also for convenience because I can be quite lazy (to make my own coffee). This is short-term investing.

And then there are other things that I splurge on too, like furnitures because I prefer to be comfortable at home. And did I mention I like gadgets? These things are middle-term investing because I will enjoy these things for couple years at least. I always try to get the best quality with respect to pricing of course.

I consistently contribute to 401k, “spend” money to my high yield saving’s account, “spend” money to my Vanguard account (for index funds), “spend” money to my brokerage account (for individual stocks). These are long-term investing.

I don’t keep a budget because I like to keep it simple, though I’m sure it’s useful to a lot of people. I use software to track my accounts and expenses, and by doing so, I hold myself to follow the rule to spend less than I earn. Numbers don’t lie.

So essentially, you can spend less or earn more.
Or perhaps, spend less now in order to earn more for future!
Or perhaps, spend the same and work hard to earn more for now and future!
Or perhaps, earn more to spend more now!
Ahhhh, so many combinations…

What ever you decide to do, you are investing in SOMETHING whenever money is flowing out your pocket, whether you are conscious about what that SOMETHING is or not, like people splurging on fashion trends to compare and feel good about themselves. Not suggested but many people do it.

With this post, I can modify the said rule to something like spend less than what you earn while investing in both now and future evenly. To do so evenly, you will need to get your values in life clear, so go read my post on Understand Yourself.

Go.