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Archive for July, 2006

Can I be an "expert" too?

July 25th, 2006 at 05:46 pm

You know 'em. The ones you see on TV, hear on radio, read in the paper. The "expert" on ... well whatever it is they're talking about. Sometimes they're an expert due to their life experiences, sometimes its due to education (quite often dubious, but let's give 'em the benefit of the doubt). Then there is the ones that for the life of me I think they pick off the street. The ones that like to hear themselves talk.

I can hear you thinking, "What got this rant started?" As well you should think that. So what was it? I tend to listen to "Marketplace" on NPR radio each evening (ok, usually 2-3 days each week). They often will have someone read a little one to two minute speech on their thoughts on the economy or sometimes just anything at all. Today they had a .... ehm ... "wonderful" commentary by some woman that thinks she knows how to save. What's her secret? Its to save money on the big ticket items and ignore everything else.

Her advice? You spend $4 on a latte every day? No problem. Brown bagging a lunch? Why bother? Giving your husband a haircut? Boy are you missing the big picture. Is someone telling you to save money this way? Roll your eyes (but only when they're not looking.)

She is the co-founder of some "group". If I start a group, can I be an expert too?

Lastly, I should say that when the time comes up, "Yes - Oh holy Yes" you should pay attention to the big ticket items. You certainly can get a big advantage when the big ticket items come up. But ignoring the rest is stupid, stupid, hello is anyone home? stupid.

Oh, and finally, if anyone from NPR is reading this, I just formed the "High Impact Saving" Group (tm). If you need an expert commentary, don't be shy to ask.

(Oops, almost forgot, here is the link:
http://marketplace.publicradio.org/shows/2006/07/25/PM200607257.html)

PS: Perhaps I shouldn't.... aaaaaaaaah, I can't help myself..... but her group is the "business talent group". Just what exactly is their talent???? (bad blogger, baaaaad blogger)

Yard sale finds

July 22nd, 2006 at 07:39 pm

Actually, as has been the pattern for the past month or more, the yard sales were sparse. But again, I did very well with what I did find.

I picked up some toy train items, and checked them online, I figure I can sell half and get what I paid, and keep the rest for myself So not a super deal, but it works for me.

The real deal came at the very last sale. I was almost back home, and saw a small sign, and wandered about, and found it about a mile from my house. It didn't look like much, just a lot of clothes. Well it turned out the clothese were for a man that had just died, and his measurements were exactly mine. Plus his son in law said he never saw a man with so much clothes, so there was a ton to look through. Most were new, and some with tags still on them. I ended up spending $20 for: a complete business suit, a large leather jacket, a large rain jacket (to put over suit), two other business slacks, and 5 casual business shirts. As I said, all like new (three still with tags on), probably totalled $200 - $300 in the stores for all of it.

Diamonds are not *my* friend

July 21st, 2006 at 07:00 pm

No, I don't have any diamonds, nor am I in a position where someone thinks I should buy one (good luck there). If you read my other posts, you can guess my feelings on the things. For those of you that can't, here's a hint (they're hard rocks, thats *ALL* they are!)

So, if this isn't on my mind, or in my life, why bring it up? There is a fun and informative forum dialog about diamonds, and how stupid or smart it is for a man to buy one for a woman. Its at...

http://www.fatwallet.com/forums/messageview.php?start=0&cati...

I started reading this as soon as it was started by the original poster. I have loved reading this, and of course been amazed at the lack of spine of some of the guys' responses. And btw, I did respond twice in the dialog. There's a very very frugal award for the first person who figures out who I am there! Smile

Have some fun reading it.

I am not worthy

July 17th, 2006 at 08:00 pm

Isn't that the catch phrase from some SNL skit? (Obviously I'm not the most up to date in when it comes to the latest "in phrases").

Where was I? Oh yeah... this weekend I got my latest Money magazine. In it is a family that is given money guidance. Lemme tell ya, if you have read some of my previous posts on what I do to save money and think I'm crazy, well this family has got me beat. Its a family of 6, with the couple earning $92,000/year, and yet saving almost $47,000! They do things like: grind their own wheat and make bread, the husband (a surgical resident at the Mayo clinic in Minnesota) commutes to work on a scooter that gets 115 MPG (that puts my 40 MPG VW to shame), have two wood stoves, and buy virtually zero new. He's planning on converting a diesel car he bought to run on vegetable oil.

This family needs money help??? Actually they do give them some good advice. Anyway, after being amazed at how they save money, two things made me wonder just what was going on.

The yearly costs for "medical and dental expenses" is listed at $390. Read that again to make sure you got it right. That is for a year, and I think (though I might be wrong) that includes medical insurance costs! I'm in great shape, have a heavily subsidized insurance by my employer, and my coverage for me (and only me) costs almost $500 / year. I can only guess he gets free medical care where he works. If not... then I must have fallen into a time warp.

The second thing is that the guy doesn't invest his money, keeping it all in a bank account. Apparently he lost half of a mutual fund's value in the "crash". I'm assuming this means the 2000-2002 area. The only way you lost 50% was if you invested heavily (and recklessly if you ask me) in tech stocks, otherwise most funds lost at most 30% (which is still painful). (Oh, btw, I truly did invest zero in tech stocks back in the 90's. I had co-workers tell me what a great deal it was to invest in that junk, and I would just laugh and tell them to wait and see what a great "deal" investing in that would turn out to be. A few came back and told me that I sure was right about what was going to happen.)

All in all, an interesting read, especially if you are into learning how to be "super frugal".

Just who do they think they are going to get?

July 10th, 2006 at 07:53 pm

OK - Big warning here, this is *not* a finance entry, so you may want to skip this one.

















You've been warned.




OK, you're still here. Well, as the title says, I am a newly single guy. As I am not a bar person (ok, a sorta quiet professional - go figure), how is a man to meet women? Well I was looking online at the personals from the local paper (Its a large city paper). While I admit I was hopeful I kept my expectations in check as I read. And its a good thing I did.

What did I find? Well the women occassionally sound ok, but often not. I can accept that, I mean if you are expecting perfection, you are going to be lonely, right? But then they often state what they want in a man, and I just shake my head after reading it all. After I read the laundry list of traits they want I realize they want to meet a woman, not a man. A woman that looks like the Marlboro man. Are these women totally clueless? I asked this of a few women I do think highly of, and they agree that what they are expecting to find is crazy.

I wouldn't want to go out with these women - I would want to run the other way ... fast. Ugh, I should be ok and find someone for me, but when you read that ... I can't think of a good word for it.... it sure can get you discouraged.

OK, back to the regularly scheduled finances. Wink

Yard sale mania

July 10th, 2006 at 07:35 pm

Yep, I love my yard sales. Ok, that may be a lil strong, but I really don't like going to the mall, nor even to the walmart (my last visit there was a month ago). So my one time out and about each week window shopping (so to speak) is Saturday morning.

So what I have noticed? Well the last month has had fewer yard sales, about 50% of what I would see last year. I don't know why this is. However, the quality of the sales I do find is usually better. So I get the same as before, but with less effort - a big plus.

So what are some of my latest finds? Lesee...

A pair of Nike sneakers that I found online for $100, I picked up very nice for $2 (I am *not* a brand freak - but I have to admit they do feel nice)
A Department 56 building to use on my toy train displays (tag on box was $50 - I got for $5 and it looked like it was never out the box)
A golf shirt for $2 (ok, that don't sound like much but it was new with the tags still on it - and the suggested price on the tag was $92! And it is made with "Silk Cotton" - never heard of it, but it sure is smooth)
A set of sheets for a friend's bed ($3 - unopened)
Hand drill - 50 cents
A table fan - $1
A table lamp - $5 (ok, that don't sound great, but it had a brand new high quality shade on it (maybe $10 in a store?), plus it came with a working compact flourescent lamp inside.)
A box of a dozen unused shoe laces - 50 cents (again it doesn't sound that great, but my work shoes needed new laces, and this box had a set that matched mine - one less expense)

OK enough bragging for me Wink

Am I supposed to retire early?

July 10th, 2006 at 07:18 pm

OK, another question from me (LOL). While I have been reading finance blogs the past week, I came across a comment to someone's blog - I don't remember where - and the comment was short and sweet. It just said he had read that when it came to social security benefits, you would come out ahead by taking your benefits as soon as possible, and not waiting to apply for later, and then getting larger benefits.

This got me thinking. I always assumed it would be better to wait and then get larger payments. But as I have learned more about finance the past few months, I realized that getting money early could make a huge difference. (ie. read compound interest!)

Warning - math based analysis below...

So how could I prove this one way or another? I came up with a simplistic spreadsheet to work out the numbers.

Without getting into all of it, here is what I did. I took the payment numbers for retirement at 62, 65, and 70 from my most recent Social Security statement. I assumed simple interest compounded monthly.

OK, but how do I figure out the future worth of money? I decided to assume I had more money than needed, and I would invest all the social security money, just like I do a 401(k) now. And then I assumed a standard rate of return for all years (ok, very simplistic, but this is to get a ball park idea of the comparitive value of the payments). Using this idea, I then put together a spreadsheet that I could change the rate of return, and see at what point would be the break even point, that is ... I would get more from the later larger payments, instead of getting more money earlier.

And what I found surprised me. For the 62 vs. 70 payments, if I used a 4% RoR, the break even point would be 85 years old. In my mind, I figured 85 should be about the break even point. But 4% is supposed to be a very low rate of return! If I upped it to 6% (still on the low side), the break even age was 92! And if I used 8% (what most retirement calculators use as a default RoR)? There was no break even point, the numbers just kept diverging. And when I worked the numbers for age 62 vs. age 65 payments, the break even points were 83, 90, and again never breaking even. I always thought the rational break even age would be around 88 when taking an 8% RoR into account. Wow, was I wrong!

So where did this leave me? Well, its most likely I will want to spend at least some of the money I get when I retire. Also, this analysis doesn't take into account other factors, such as losing benefits if I work from 62 til 65 yeras of age, taxes, lost wages of not working those years, and other things I can't think of right now. Still... I guess this shows if I am laid off or lose my job in that range of age, I should apply for those benefits ASAP. I guess the Social Security people want me to apply for that money as fast as I can.