Partner/Rivalry on Quest of Personal Finance

Okay, I’ve been studying too long and want to take a break and scribble something on my blog. I have been reading many personal finance blogs lately, and I came across a post from Make Love, Not Debt:

A few weeks ago I was out having a few drinks with few coworkers during happy hour. One of my coworkers (CW1) noted that in a few weeks he will have been at the company for six months. Another coworker (CW2) remaked that he was then eligible to participate in the company retirement plan. Both of these coworkers are my age, maybe a little younger. The conversation went a little like this…

CW1: Hey, I’ll be at the company for six months in a few weeks!

CW2: Yeah dude, you’ll be eligible for our 401k. (but we have a SIMPLE IRA…or am I just being nitpicky?)

CW1: Yeah that’s cool.

Him: Yeah, I was thinking of rolling over my SIMPLE IRA to a Traditional IRA because I don’t like our investment options. I won’t be eligible to do that until May, though.

(blank stares)

CW2: Yeah, my boyfriend works at Morningstar, so he handles all of that stuff for me.

CW1: I don’t have a clue when it comes to that stuff.

CW2: Yeah. You guys watch Battlestar Galactica?

Sigh.

Although I haven’t begun my real professional career YET (being 2 months shy of graduation), I look around my peers, where a majority are older and/or full-time employees, and somehow I feel similar to the author here… Unfortunately I’ve heard more about young people not wanting to contribute to 401k because of how it reduces their paychecks, and NO young people who wants talk about personal finance and investment, etc around me.

As the title suggests, I would love to have a partner or even a rival to help push and/or encourage each other in learning these personal finance matters. But where can I find them? Makes sense? Oh well, it’s so late, I don’t care anymore.

That being said, I’ve been using a lot of excel for a class lately, and for fun I came up with a very rough, simplistic, interactive model to look at the growth of asset/net worth/whatever to put things in perspective a bit, with an initial asset that grows at a constant annual rate along w/ an annual contribution to the asset that grows by a separate constant amount. It actually makes future looks kind of hopeful. :P

excel_future.jpg

Feel free to download the excel file and play with it, modify it. It’d be great if someone comes up with something interesting or a much more realistic model and send it back to me :)

Alright, back to study, ciao.

Originally posted 2006-11-07 04:13:04. Republished by Blog Post Promoter

Market in Chaos, Rate is Falling, Invest or Save?

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.

Originally posted 2008-01-23 01:13:57. Republished by Blog Post Promoter

If You Don’t Use It, You Lose It

In the past two years as I learned fitness/exercise/gym as a habit, one thing that is very pertinent in life is that – If you don’t use it, you lose it.

One doesn’t have to be a kinesiology major to understand that. My experience has been that even if it has just been a week of inactivity, I notice a deline in my weight training (very obvious) or cardiovascular performance. How do I tell? The answer is the amount of soreness I can feel. Even more obvious is the immense soreness + pain whenever I start some new training. And hence, the need for us to emphasize on consistency of exercise. To avoid the benefits that we have worked so hard to archieve, it’s best to continue to do something at least, even just to maintain a moderate level of the benefits. In addition…

The idea of “If you don’t use it, you lose it” does not only apply to fitness and health. On my path of exploring and learning singing myself, I continuously discovered that many of the causes for my difficulty to produce more beautiful tone are muscular apathy of head/facial area muscles. It is over time when I consciously practice these muscles that I am able to improve.

Actually, not only is this the problem for people trying to learn how to sing, but this is the problem for people between ethnic group learning a foreign tongue. Certain languages only require us to use certain facial muscles. It is one of the many reasons that when we try to learn a new language that we have difficulty with announciation. What we need to do is to practice using all the muscles on our face :)

Well, another thing is that us humans have a tendency to be lazy and use less, or just enough, muscle to perform a certain task. That is exactly why we need to re-learn deep breathing for our health, and also exercise our mind to maintain our mental sharpness, and of course, exercise our body to make sure we don’t lose those muscle.

In fact, I would go as far to say that everything in our body is governed by this concept of “If you don’t use it, you lose it”. Therefore, everyday we need to consciously use every part of our body and push it to improve, expand, and realize our potentials!

Originally posted 2007-05-02 23:01:12. Republished by Blog Post Promoter

Be Careful of Credit Card Companies Sneaky Behaviors

I use online bill pay for all my bills and manually schedule them each month.

I just finished scheduling payment for credit cards, and I noticed the due date has slowly crept earlier and earlier over last few months. How sneaky of the credit card companies! I am not going to fall into this late-charge-trap.

And I’d like to warn everyone who comes across this post to be extra careful about credit card payment due date (and probably all other bills also). tThis is especially if you make use of monthly automatic payment.

Needless to say, this is credit card companies one of many sneaky behaviors to get more money, not excluding extra/increased finance charges and increased interest rate. Only understandable in this economy, right?

That means it will do us no good to be mad at them, but just that, we, anyone who is a credit card user, are to take care to keep money in our own pockets.

Originally posted 2009-05-10 22:42:40. Republished by Blog Post Promoter

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