Continue to Live Like a Student

I was talking with a friend a few days ago, and on a topic that I cannot recall.
He said something along the line, “Hey, it’s okay to buy/get that, you are not a student anymore.”
To which I respond, “I can still live like a student even if I’m no longer one…”

What is the lesson I’m trying to teach here? I would say it’s one of the more basic rule to controlling your personal finance – you don’t have to spend more because you make more. Here is the most basic rule.

Why is it so important? Let me take my chance to reflect on something came up in conversation with a friend at work, who said, “Things seem to stay the same. I know I’m making more, but I’m also spending more.” The logic is ridiculously simple. You really don’t save more if you are spending more when you make more.

I’m not saying one should be cheap and live like a homeless. I fully believe that there is a certain level of standard of living we should keep to make ourselves content and happy, but we should not justify ourselves to spend twice the money just because we make double (if it ever doubles…) :P Peace~

Originally posted 2007-03-01 00:22:51. Republished by Blog Post Promoter

IBM 401k plan change

The path of building a nest eggs is full of emotions/surprises.

The path of building a nest eggs is full of emotions/surprises.

There is a spat of news from December that has caused me to think about 401k a lot lately. IBM, one of the largest, employer made a big changes in their 401k plan.

In short, the company used to pay out the matching contribution with each paycheck bi-monthly but starting in 2013, those contribution is paid only once a year in lump sum on December 31 and only if the employee is still employed on December 14. The employees will still receive their own contributions per paycheck in their 401k account.

Nonetheless, it’s good news to company’s bottom line and also shareholders but all bad news for employees because of these cons:

  • loss of the automatic dollar cost averaging over the year
  • loss of potential gain during the year
  • postential loss of all company contribution for the year due to quitting/layoff/firing right before December 14

Before such news, I think there is no question that any person employed in a company that provides matching contribution, he should definitely contribute up to the percentage to receive all those matchings. Now it becomes a bit debatable… though I can see someone may argue, if the employee plans to stay the whole year, contribute to get the matchings. Anyways… It’s important to keep an eye on this and give it some thoughts because IBM is a pioneer in setting the trend for this kind of policy change so stay tune to other companies to follow suit. Just 9% of companies has said policy now.

Outside of the changes mentioned above, if a company is still providing matching contribution, it still makes sense to contribute to receive those.

This goes to show that we should not make 401k our only tool in planning our retirement but instead, treat it as a supplamentary tool. We must combine it with saving and investment plans using our own smart and diligence.

Originally posted 2013-01-10 23:12:55. Republished by Blog Post Promoter

Importance for Personal Finance

Personal Finance — including saving, debt elimination, investing, insurance… All these topics have been reviewed and re-emphasized and drilled to death on PF blogsphere.

Now… why is it important?

Is it because it is good to have money? That we can afford luxury when we are rich? And that we are free to do as we want?

Well, it is good to have money. I cannot deny that. I can use more myself :) But, is money that important? That many people do just about anything they can to have more of it.

Most certainly, one cannot survive in today’s modern life without money, which was invented and evolved from thousands years ago to facilitate trading. Now, it is essential to our survival. So we have to be practical and take care of this aspect of our life. To say that we as a part of current system/society can do without money is simple arrogance.

On the other hand, as the so-self-claimed highest form of intelligence on earth, is money all we can ultimately think about? Is our life just about things that we can get with money, in order to be secure and to survive? So the smartest beings on earth is stuck worrying about survival like all the other organisms?

Setting aside all the details, that is exactly what we are doing. We fight and we quarrel with each other for money (power) to be able to obtain and impose in order to have resources to survive, hopefully in the company of family and a few friends. In between, we add luxury to make ourselves feel a little better. Even when we are talking about green and saving the planet now, we are merely striving for our own survival (The planet does not need us to save it).

That’s it to human life? Wow, mind blowing…

marlows_hierarchyBorrowing from Maslow’s hierarchy of needs (not that I totally agree with the way he arranged things), I suggest that we manage our money so we can move beyond it. By that, I mean, once our basic needs are secured and that we have obtained a certain level of comfort and security through accumulation of “enough” money, it is only suitable for us to explore further about life. It’s time to ask yourself some [tough] questions. And there is so much to learn about yourself, your mind, your body, the world, the universe!

Additionally, we cannot counteract the absurdity that springs from money by managing our money better because that will only generate more absurdity. To break the chain of absurdity that which is driven by money-greed, we must move beyond thinking at the money level — the level where everything is evaluated by money.

We cannot fix the chaos of the world by doing things that will generate more chaos (which is exactly what we are doing) — in reference to entropy, which is the 2nd law of thermodynamics, with my humbly minimal understanding — so either we find a way to calm down or we let chaos increase to its maximum level at which it will plateau, and somehow the system will correct and reset itself over time.

Think of it like a video game, you cannot move to the next stage until you beat the current stage. Nobody talks about this because this is a road that is far less travelled by humans. Everyone is busy being comfortable or trying to be comfortable. It is a road without a map. It is an exciting journey yet scary at times. You have nothing to rely on except yourself… by learning and unlearning about many things and discovering yourself, you find your next step.

So the true importance of personal finance is not about personal finance.

That is, the importance of personal finance is to allow you to move beyond what the system preaches. It preaches the idea that we are to think and identify for ourselves all the things it preaches, mostly just superficial and material things. When you start to think about the greater whole, with wider perspective, you become free from your previous perspective because there is so much more now. You don’t have to try to be free. You are free. You no longer have to “deal with” all the desires to control your spending.

Take good care of your personal finance and realize at certain point that you CAN start looking further. If you do not realize, well, personal finance is personal finance. You are stuck thinking personally, mostly about yourself.

Last thing, has it ever crossed your mind that without humans, money and all the “precious metals” would be worthless? They are just what they are, a part of nature, beautiful but not worth anything. Thought I’d throw this related question out too.

Originally posted 2009-05-07 00:01:07. Republished by Blog Post Promoter

A World of Patterns and The Limit of Language

In computer science, divide-and-conquer is a common technique applied in both practical programming and abstract algorithm to solve complex problems efficiently. In other words, a complex problem is continuously and/or recursively broken down to simple workable chunk to be managed, manipulated, and calculated individually, and finally re-combined to get a solution for the original problem. What a wonderful tactic!

Well well, does that sound kind of familiar? Maybe. Maybe not. I find it quite similar to the way we do things in life.

As humans, to make sense of life, to navigate through human community/society, and also for convenience, we break down reality into small chunks.

In nutshell, with our scientific mind, our logical mind, we analyze reality, break it down into “things” and give “things” names through words/language. As society and civilization become more and more complex, so more “things” and words are developed, and we begin to put many “things” and words together to develop patterns.

So in the beginning, there is reality but no thing.
Then we created things with language.
Then we create patterns of life with things and language.

And as days go by, we create more and more things, more and more words, and more and more patterns. And we are still going at creating more!

Patterns are like boxes.

So now, we are all given birth, and as we grow up, our parents and society would put us in boxes… and we grow up to put ours in boxes (perhaps some newly created ones)

Oh, you must be an upstanding citizen. Patriot who protects the countries. Muslim who worships Allah. Christian who preaches in the name of Jesus. You must be successful. You must make others happy. You are to love your parents. You should never lie. You must not have sex before marriage. You must obey the filial piety according to Confucius. You will become a doctor, lawyer, engineer, hedge fund manager or whatever. Work hard and you will succeed. Eat non-fat and you will be healthy. You need to get married, have a family, and have kids. Max out 401k and IRAs and you can retire. Oh my oh my! Boxes!

So you may be thinking now, “Are you saying we need to destroy and abolish “things”, words, and all patterns of life?” My answer is, “No”.

So what am I trying to get at?

My point is we are missing the point of living the whole way along. It is almost like we used divide-and-conquer without ever re-combining the simple workable chunks, but instead, keep on dividing the chunks into smaller chunks… On top of that, we completely forget the original problem we wanted to solve.

Surely, we all choose to live however we want. Here, I am entertaining the idea that there could be a more favorable experience of living. More specifically, to get better in touch with reality, and hence lead to the result of being able to find harmony with ourselves and our environment.

We have forgotten that we had created things, words, and patterns from the very beginning to navigate reality but they are not the reality. Yes, they are now part of our human reality but still, not THE reality.

Think of it this way, when you see a banana, you can call or think of it as banana. But if you don’t know the word, “banana”, is the banana still reality, or is it not?

You know it.

Reality is more than just words and patterns. When we lack the words and patterns to label and define parts of reality, it does not mean it is not reality!

And so we miss the point.

Us modern people since industrialization, let our logical minds completely dominate, to the point where, words and patterns ARE reality. When reality is something outside of the realm of our words and patterns, we get completely insecure and to make us feel alright again, we invent new patterns to try to force things the way we like, and if unsuccessful, we twist and bend words to conceal and cover the reality. That is, in a most simple example, we would deny a banana is there if we lack the word to call it.

As such, we are often either in denials, or in complete ignorance of reality to do what we need to do as real solution.

We take our patterns too literally. We take ourselves too seriously. Seriously!

Therefore, instead of tips, techniques, or methods, I write what I do here — mostly for my own enjoyment but also — it will be much more substantial for each of us to shift our fundamental attitude of life, of reality to bring about real change.

If I shall put it more strongly, beyond the limit of our rules and language, lies truth and enlightenment.

The one crucial step, to mature as a human being, to become wise, and probably even to enlightenment (if you are so inspired) is to learn the patterns but be able to set them asides, knowing that they are artificial.

Do no abandon words and patterns. Do not fight them. To make use of the patterns (as our original intent of creating them), we just need to re-understand them as patterns. As invention for our own convenience, words and patterns — developed through thoughts and conveyed by words — make good servants but poor masters.

Originally posted 2009-11-18 00:07:05. Republished by Blog Post Promoter

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