Money and Financial Business

“Master the market with confidence, discipline, and a winning attitude.” Here is a snippet from my review of Trading In The Zone by Mark Douglas, found at my trading blog Trading Winner: Trading In The Zone by Mark Douglas examines the mentality and psychology of successful and unsuccessful traders, understanding our trading actions, and shows us how [...]

Folks, This will be my last post before the wedding and honeymoon. I am pretty happy with my decision to iron my own wedding dress. I talked to a couple of places and the quotes I got to press my dress was between $45-$75. I borrowed my sister's iron and ironing board and spent about a total of 2 hours working on it. It looks fine. All of my friends were kind of scared that I'd ruin my dress. If I ended up doing that, my backup plan was to borrow my sister's dress. I am happy to say that there is no need.

Tomorrow we have the rehearsal and I have a low-key bachelorette party. On Saturday we have a BBQ. Then Sunday is the big day! We're not leaving for our honeymoon until Tuesday night.

My confession is . . . my fiance doesn't know about my blog. To my knowledge, no one I know in real life knows about this site. I am planning on telling him about it soon after we get married. I am a bit apprehensive about telling my fiance about my blog since thought it was weird that someone would blog about their financial life when I showed him the article in BusinessWeek (or was it Newsweek) about Jonathan.

Expect no posting for 3 weeks or so. Have a great labor day!

I’ve been trading stocks for a long time, but it wasn’t until after I lost an enormous amount of money that I became able to free my mind enough to relearn everything that I thought I knew. Like many others, I became a very aggressive speculator in technology stocks between 1996 and 2001 - riding them both up and down. I had very little savings at the time, yet I was able to turn about $5000 in capital to over $350,000, before I was completely wiped out in 2002.

What happened after that changed my life forever. I met another investor who was very successful. He had a modest paying job, and was in his early thirties, yet he had already accumulated a net worth of over $2 million. And most importantly, he never took the types of risks that I thought were necessary to be so successful and never bought a single technology stock. So how did he do it?

Every student in finance school across the nation is taught the efficient market theory - the theory that since everyone in the market has access to the same information a random portfolio of stocks will return just as well as any other. They are also taught that risk has a one to one relationship with reward. This implies that the more risks you take, the bigger the reward, but taking more risks isn’t profitable in the long run because stock performances will return to their mean. Essentially, if this were true anyone with outstanding returns would simply be lucky. But does this theory stand up to reality?

Warren Buffett, considered the greatest investor in the world, has compounded his investment return by an annual rate of 22 percent a year for the last 40 years, compared to an annual rate of return of about 7 percent for the Dow Jones Index. In order to learn how he did it I read How to Pick Stocks Like Warren Buffett. A $10,000 investment with Warren Buffett in 1965 would be worth $50 million today, compared to $500,000 in the S&P 500. The fact that he outperformed the markets by such a large margin for so long clearly shows that he was more than just lucky. To be that lucky would be like winning the lottery every year over and over. My friend realized this, and told me that the best way to become in expert in something is to seek out the very best experts in the world and learn from them.

Before he became the greatest, Buffett did the same thing. He sought out to study under a professor at Colombia University name Benjamin Graham, who is known to be the founding father of value investing. Graham’s book, Security Analysis sparked modern investing by showing that investments could be analyzed and compared. But his later book, The Intelligent Investor introduced Buffett along with several other students to the art of deep value investing.

When I read these books I learned that by doing research and analysis it is possible to find investment opportunities that have little risk but great rewards. Graham argued that if you buy a stock for less than its intrinsic value, you give yourself a margin of safety that greatly reduces your risk. He also explained that there is a difference between speculation and investment. When you invest, your primary goal is preserve your capital and your secondary goal is to achieve a return on that capital. Speculation puts initial capital at risk and focuses primary on trying to achieve a return. The subtle difference is that a true investor knows that he is taking little risk of loss.

Sometimes taking calculated risks makes sense, but it is crucial to know when you are speculating versus investing. In 2000, when I was trading technology companies, I made the mistake of thinking I was investing when I was really speculating. However, now I have learned that highly successful investors are able to lower their risk while they raise their returns.

You’ve decided that you want to buy some gold or silver but you don’t know how to get it or what you should get. You have many choices. Although every dealer has their own policies and procedures, most bullion dealers don’t accept credit cards. In addition, if you pay them with a check, they usually hold the check for a week before they mail you the bullion. Here are some of the largest sellers:

http://coins.ebay.com - Usually orders are small, although some good deals can be found here.

http://www.apmex.com - Prices are updated in real time and you can order online, and they accept credit cards. Sometimes they have good specials in the wholesale section.

http://www.tulving.com - They only accept wire transfers and the minimums are fairly high. However, sometimes they have good specials and they provide free shipping.

https://online.kitco.com - In addition to bullion, they also offer pooled accounts and Perth Mint Certificates.

http://www.bulliondirect.com - Also has Nucleo Exchange – a real time marketplace to buy and sell bullion with other investors, brokers, dealers and companies.

There are two basic kinds of bullion. Non-numismatic is valued based on the price of the underlying metals. Numismatic has collectable value beyond the inherent metallic value. Although numismatic bullion does provide appreciation, it is harder to value and doesn’t necessarily increase in value with the price of gold or silver.

Gold is usually sold as a one-ounce coin, although different sized coins and bars are available. The Canadian Maple Leaf is a popular coin because it is pure gold (.9999 fineness). It is soft and can be dented, but is often preferred for its purity. The American Eagle is harder because it is not pure gold (.916). However, the US mint recently began selling a new coin called the American Buffalo (.9999 fineness) in order to compete with the Canadian Maple Leaf. Dealers will usually buy gold coins for the spot price (currently around $620) and sell gold coins for a small premium between $10 and $30.

Buyers of silver have a few more options. Like gold, you can buy a one ounce silver American Eagle or Silver Maple Leaf coins, however they are both (.9999 fineness) and both have a much higher premium than gold – usually around $2 or 16 percent of the coins value. Although their premiums are higher, the coins are commonly accepted and they often carry some level of numismatic value. American Eagles from ten years ago have benefited from both the increase in silver’s price and collectable demand.

Silver bars are .999 fine, have lower premiums and generally trade very close to the silver spot price (currently around $12.50). You can buy 1, 10, 100, or even 1000-ounce silver bars. Bars are categorized as being made by either a brand name (Engelhard, or Johnson-Mathey) or generic brand (if any other company mints them). Brand name bars usually cost a few cents more an ounce.

Another popular way to buy bullion silver is to buy US minted money, also known as junk silver. Before 1964 American quarters, dimes, and half dollars were made from 90 percent silver. Over time, they were worn and used, so they don’t have any numismatic value. However, they still hold their inherent silver value. The US minted about $2.5 billion in face value of silver coinage, however most of it was melted down during the early 1980’s. Because it is US currency it is easily recognizable and accepted everywhere. Junk silver is typically sold in a bag of $1000 face value, although dealers will also sell half bags or lesser amounts. A bag contains about 715 Troy ounces of silver. The advantage of junk silver is that it can be sold in small amounts and is widely used. It is also getting increasingly rare as more and more of it is lost or melted down. The government will never mint any more of these coins.

Similarly, you could buy junk silver minted between 1965 and 1970. These coins have many of the same benefits as the older junk silver; however, they are copper-silver clad coins. The coins are 40 percent silver and 60 percent copper. A bag of $1000 in face value contains about 296 Troy ounce of silver. They are usually a little cheaper to buy than 90 percent junk coins because the metallic content is lower. Effectively buyers pay for the silver and receive the copper for free.

By: Alpha Male Alpha Male’s global-explorer brother recently returned from a trekking expedition in northern Mongolia.  On his first night in that nation’s capital, Ulaanbaatar, he got into an argument with his cab driver about the fare from airport.  Thankfully, a man dressed as a high-ranking member of Mongolia’s military stepped into ”assist” with the disagreement.  He managed [...]

By: Paula Garrido, FT Mandate Published: June 2006 Excerpt: “The concept of portable alpha is not new and, in fact, investors have been using these types of strategies for over two decades. The difference now, however, is that portable alpha strategies are gaining widespread acceptance among institutional investors globally. One of the reasons for this is that pressure [...]

Over a year ago I thought I could add to the personal finance blog world and began Financial Fruition over on the Blogger platform. It its current state, Financial Fruition is on the road to nowhere. With over a year under my belt, I’d like to look back on what was and what was not. To be more specific; what I have learned, what would I do different, and why the hell haven’t I posted more often.

Background:
When I first stumbled upon the personal finance blog world, a bit before I actual started blogging myself, I noticed pfblog.com. It was in an article I read at some point, before the owner began aggregating other blogs, and I was very intrigued at what was being posted. Not only the fact that this “guy” was publishing what I thought to be confidential information (net worth, etc.), but that he could write on all the financial decisions and news that he personally faced. I said to myself, “I think I could do that and it would be fun”.

Well quite a few months passed and I began to see more personal finance blogs popping up across the Internet landscape. It was now or never for me. As with most things, I decided I would just jump right in and sink or swim. On July 25, 2005 at 10:17pm, Financial Fruition was born!

Oh boy, let me tell you, I had to tread water fast. While I had ideas on what to write, I really had no idea about blogging. I didn’t know, among other things, what trackbacks were, how carnivals worked, or how search engines and ad revenue systems functioned. I did however know how to be a part of a community and began reading and commenting on whatever my peers wrote (were they actual peers when I started?). I also:

- joined a few blogging communities (oh those ugly “buttons”!).
- focused on writing good original content (Should I Sell My Car? is a good example).
- participated in the “Oh so stark”, Carnival of Personal Finance (compared to today!).
- solicited links to my blog from those I looked up to in the personal finance blog world (that doesn’t sound too pathetic, does it?)

These reasons are why my awareness grew and eventually about 3 months later I ended up with a google page rank of 5. I thought at the time, this couldn’t be easier!

What I Have Learned:
Well for one thing, it’s not that easy to come up with original posts everyday. In my opinion, it’s not conducive to (it at least hinders) a good personal and professional life. After researching more about blogs in general, I began to also see the limitations of the Blogger platform. Yes, it took about 3 minutes to set up my blog, but hindsight has taught me that what may be easiest, may not be the best. But that’s what blogging is about: Anyone can have a voice to write on whatever topic they want. Here’s what sucked about blogger:

1) At the time they did not have word verification for comments. It was added a little bit after I was up and running.
2) Blogger did not support trackbacks, going or coming. Something that is key to building awareness of your blog, at least in my opinion.
3) Your URL was what ever your blog name was plus .blogspot.com. How lame?
4) The back-end interface was minimal (or criminal!) and crude at the time. Trying to get ads to work and moving things around in your template was insanely difficult.
5) Speaking of templates…there were what…8 choices at the time!
6) Blogger can claim your blog is spam and delete it! Only after many emails and a mini-campaign in some forums did they re-instate my blog.

Number 6 ended up being the last straw. Perhaps, Blogger has improved it’s functionality, but the fact that I didn’t have complete control was a pretty scary! I made the decision to move to my own domain in April 2006, and had to start all over again. This takes a lot of work! Not only do you have to write good compelling content, but you are also the webmaster.

Regarding content, it became very difficult to figure out what i wanted to do and the purpose of my blog. Some blogs provide commentary on financial news. Others research a topic and post information regarding it. Yet, others….well you get the point. In the beginning I wrote the best compelling content I could. Then, I started waning from this original concept and didn’t really have a focus. In the past months, I haven’t posted at all (well at least on this site, but I write a daily post on financial content for another site). I’ve learned it takes hard work and a decent time commitment to run your own blog.

What I would do different:
Knowing what I know…what would I do different:

1) If you think you are going to commit to blogging, whatever you do…buy your own domain and install wordpress!
2) Write great, compelling content. Find your “groove” and go. Do not try to copy what others have done. I know personally where compelling content can get you. My other contributions (mentioned earlier) to another blog have been linked to by some of the top 100 blogs (based on Technorati) and received over a thousand “Diggs”, as well as, numerous other links from all over the Internet.
3) Plan your work, and work your plan! Make and schedule time to maintain your blog. This includes content, website maintenance, advertising analysis, and search engine optimization.
4) Become and stay apart of the blogging community. Especially, those blogs that could be deemed competitors. When you fall out from the blog community you worked so hard to become a part of, there are great repercussions (say goodbye to a lot of links!). Also, read sites like ProBlogger, for research and ideas on how to generate revenue. This takes time, but it should be a part of maintaining your blog.

While some of these aren’t that new in concept, the sum are really the main ingredients to having a successful blog.

Next step for Financial Fruition:
If you’ve read this far…a sincere thank you! I have a plan, beginning September 8th, to produce at least two posts a week of compelling content. This would include personal situations, financial research and information, as well extended commentary on items I see in personal finance blogging. By treating this as a second job, and really focusing on the results I truly feel I can achieve this. If you have any input on what you’d like to see, feel free to email me: FinancialFruition Gmail com (insert the @ and . intuitively!) or leave a comment.

See you on the flip side!

Obviously, there’s a lot of ways to make a little extra money “under the table”, and I won’t claim to be any kind of professional at all of them. Usually, there is “something” that people are good at, and that other people would pay for. Even though I’ve always been on a super tight budget, I’ve managed to aquire a lot of knowledge in computers, and have learned just about everything, even if only on a very general level.

It’s always a little surprising to me that there’s so many people that own computers and know nothing about them. That’s where I come in. Usually, I’m able to fix people’s computers for less than half of what the professional computers shops charge. Granted, I don’t have the ability to just grab a new part if something is needed, but there’s usually ways around that.

I used to repair computers in my area, full-time, but without a lot of advertising, business was never as busy as I would have needed it to be, to survive. I still do things for family, friends, and some of their friends, but it’s just for a little “extra” cash, every now and then.

Actually, I just realized that there is no such thing as “extra cash”. There’s always something that’s needed. I’ll call it “additional cash”. It sounds better that way, anyway.

Lately (for the past year or so), I’ve had a few small web sites. Like this one, they don’t get too much traffic, but I still decided to see if I could use Google AdSense on them. After I was approved by Google, I started using them on all of my sites. It’s not a whole lot of money, but every little bit counts. Right now, I can say that I’m consistantly making hundreds of dollars a month. Saying it that way makes it sound like I’m pulling in quite a bit, but because of the AdSense Terms of Service, I can’t tell you any exact numbers.

What I will say is that even waiting for the check from Google to show up is not what it should be for me. I’m still behind on my electric bill, car payment, and water bill (not as much as before…but still). I’m going to have to pay the gas company what I owe them, pretty soon, too, so I can have them turn the heat back on before it gets too cold. It’s already getting into the lower 50’s, here, at night. Last year, we heated our house with electric space heaters until mid-December (if I remember right). I’m NOT going through that again. What actually happened is that I decided to not pay one bill, so I could pay even more on another…and the space heaters really didn’t work that well, at all.

So, anyway…a question. What are some other ideas besides online advertising and a field that you’re knowledgeable in? What are some ways that you make “additional” money? Legally, BTW…

It’s a tight saving’s week. I try to put the most amount of savings in the emigrant account on a weekly basis. We have about $150 until Friday. All the bills are paid so this is good but it’s a weird feeling because I get a tad nervous. I always think that something is going to happen. The funny thing is that I got 2 unexpected checks in the mail so that helped out a great deal. It’s also a tad tight because Mr. Thrifty needed to get his car fixed and I had to pay for my plate tags. This is the 5th time this year that we’ve had the Saturn in the shop, luckily everything has been warranty work but the warranty is almost out because he is about to hit 100K. I have to say, that warranty was the best thing that he has picked up because it has paid for itself twice already. Now I just hope that everything is fixed so there won’t be any more surprises. At least we paid it off a few months ago. I just hope that we can get another 3 years out of the car. Saturn cars are known for being high mileage vehicles so hopefully this will happen to our car. Mr. Thrifty is extremely diligent about getting his car maintained. He gets turn ups and maintenance. I on the other hand, just get oil changes. Luckily, my car is a Jeep and it doesn’t have a lot of bells and whistles. Plus there are a ton of beater Jeeps out there so I’m hopeful that mine will be one too one day.

Speaking of cars, what’s with the gas prices going down? Especially near Labor Day, what’s going on here? I’m enjoying that it’s getting down to $2.59 a gallon but it’s like I’m expecting it to go up again. The crappy thing is that I get about 17 mpg but at least I attempt to car pool 3-4x a week. Fall is coming up and I hope I don’t have to cut down on the carpooling because I have to work late. I’m hoping that I can do some creative scheduling with my families that I work with so I can leave at 5 pm. If I don’t my gas expense goes up $35 a week. Thank god for carpooling!

Coolest savings of the day that I found. Restaurant.com is running a 60% off sale so go there, buy some coupons and at the end type in the discount code: 78022 then press recalculate. Have fun, cheap meals are always good.

I will be on vacation for a week. I expect posting to be spotty (which has been the case this past month anyway). Wishing all of you a good Labor Day Weekend.

Max started blogging as a resource on how to get by with little money, but recently his blog has turned in to a bit of an adventure tale with his regular posts about moving to a new city, finding a job, making decisions about cheap transportation. As a Ukrainian immigrant he has some interesting things to say about debt culture!

Max's blog is at: http://www.howtobepoor.com/

Links to sites mentioned in the interview:
Neville's Blog: http://www.nevblog.com/

Jeffrey of Personal Finance Advice: http://www.pfadvice.com/

All Things Financial: http://allthingsfinancialblog.com/

The latest Gallup Poll provides further evidence for deteriorating conditions and sentiment for real estate:

Investors Worried Real Estate Situation Will Get Worse
Investor optimism continues steady decline, reaching another new low for the year

"These most recent data simply confirm the widely held perception -- noted by Gallup last month -- that housing activity has slowed significantly in 2006."

"the August UBS/Gallup Index of Investor Optimism poll shows investors are worried that the real estate markets are continuing to deteriorate. The new poll also shows that investor optimism continued its steady seven month decline, reaching a new low point for the year in August."

"7 in 10 investors believe conditions in the residential real estate market nationwide are getting worse, not better -- up from 63% in June."

When the summer first hit, I had limited amount of shorts so I hit all the local thrift stores. I found one pair so needless to say, I had to break down and spend $18 at Kohls for a new pair. I hate buying new clothes. I love clothes but the idea of paying for the at a retail price makes me sick because once they hit the washer, they are "used". So here it is today, 3 months later that I was able to find 3 pairs of shorts at the Salvation Army for $2.99...I'll store them for next year. I also found an American eagle hoodie at Goodwill for $3.29, J Crew sweater for $3.29, a nine west purse for $2.99, and an Eddie Bauer Diaper Bag for $2.99 (which I will probably put on eBay or keep for possible future purposes). Not a bad day for finding some items at resale. About 90% of my clothing comes from thrift stores. Though when I do buy items at the thrift stores, they are all named brand. I don't go to resale shops to buy Walmart Clothing. I go to buy J Crew, Gap, Ann Taylor, Lands End, etc. The only thing that I don't skimp on is shoes. I refuse to buy cheap shoes. My favorite shoes are my Chaco Sandals. I have two pairs and I bought both on sale for around $65 (they normally retail for $100). No skimping on the shoes here...

Mr. Thrify and I went out to the east coast on vacation and we had a little incident with his credit card (the only one we have) and we couldn't rent a car because we didn't have another one. Mr. Thrity's credit union cancelled all their visa cards because their security system was comprimised but we had no idea that this happened so went we went to Enterprise they refused to give us a car. They wouldn't take the Visa Debit Card nor cash. So his aunt rented us a car and we were able to get a new card sent to us overnighted so we could rent a car for the trip home. This was the second time in my life that I couldn't rent a car because I didn't have a credit card so I signed up for a Citibank Rewards Card. They supposively are going to give back 5% at gas stations and we spend about $700 a month in gas so we'll see if it's worth it. At least we'll never be without a way to rent a car. I haven't had a credit card since 2002. I thought it would be a good idea to have a credit card since we are paying everything off and we need a FICHO score when we go to get a mortgage someday. I know Dave Ramsey says "if you play with snakes you'll get bit", hopefully I will be responsible. The plan is to put all the gas on the card and pay it off at the end of the month. I know I can do this, it's just going to take discipline.

By: Suzanne McGee, Barron’s Published: August 28, 2006 Suzanne McGee hits all the right notes in this article about Portable Alpha.  Firstly, she tries to dispell the popular myth that portable alpha is complex. “While it may sound exotic, the portable-alpha concept is straightforward. It simply hinges on the difference between the two basic investment-return flavors: “alpha” and “beta.”…Portable [...]

By: Yang Rong Published: March 6, 2006 Yang Rong’s observations about ETFs support their use as an alpha-isolation tool by hedge fund managers.  Which begs the question, “why just hedge funds?”. Excerpts:  “ETFs are often used for shorting purposes due to their intra-day trading rules, which not only help hedge funds to remove regulatory issues, but also generate revenue from lending [...]

By: Yang Rong Published: February 20, 2006 The explosion of the ETF industry now provides many more tools for alpha extraction and porting…  Excerpts: “Commodity ETFs: Commodities in general are typically a good hedge against inflation and stocks over a sustained period. The value of commodity ETFs is tied directly to the value of the commodity in question. “Dividend ETFs: The intention [...]

By: Noel Amenc, Edhec Business School Published: April 14, 2006   Professor Noel Amenc of the Edhec Business School in France argues for a new way of measuring mutual funds based on alpha/beta seperation (a topic regularly promoted on this website). Excerpts: “With the development of independent distribution and so-called “open” architecture, the marketing success of mutual funds no longer [...]

By: Europerformance This article from the website of Europerformance (a European mutual fund ratings agency) argues a) that alpha is not the sole domain of hedge fund managers (Alpha Male agrees) b) that advisors need to adopt alpha as a key measure along with return and volatility (Alpha Male agrees), and, c) that Sharpe’s style analysis should be used [...]

By: Jack Willoughby, Barron’s Published: March 27, 2006 This article discusses Duke professor David Hsieh’s comments that capital markets may contain approximately $30 billion of “inefficiency” and therefore $30 billion of “alpha” per year.  Excerpt: “Everyone talks about the hunt for alpha — a return above the overall market’s average — and how it can cause funds to take [...]

It doesn't scare me...it is just weird when you know this person is the one. We know we are going to get married and last night we sat around and drank beer and ate pizza and talked about our wedding for three hours! Fun! Scary!

The girlfriend is still in culinary school and she is about to get a job at the place she has been doing her internship. (yeah! $$!) With this job will come the meshing of our money. With the meshing of our money comes the need to get our stuff together and visit a lawyer!

We need wills, domestic partnership, durable power of attorney for health and finances, living wills, hospital visitation authorization. I hope that is all. Our financial advisors, one of which is gay, are going to help us a bit. I want to know what I am talking about before I go to a lawyer.

I'm over budget for the month. We had a couple of costly things that occured this month like a car tune up, Mr. Thrity and my plate tags, and rental insurance. It seems like the budget won't settle down until October because we have car insurance next month for Mr. Thrifty. But at least we saved $2K in a month to Emigrant.

Budget for August 2006:

Actual Budget Difference
Auto Gas 622 700 78
Auto Payment 550 550 0
Auto - Rep./Maint. 897 25 -872
Cable TV 76 90 14
Cash Withdrawl 22 60 38
Clothing 36 20 -16
Dining out 132 100 -32
Future Home Fixtures 0 10 10
Gifts 25 50 25
Groceries 81 225 144
Gym 112 112 0
Healthcare 112 122 10
Hobbies/Leisure 0 20 20
Household 510 5 -505
Insurance 148 148 0
Rent 650 650 0
Personal Care 0 22 22
Phone/Wireless 147 110 -37
Postal Costs 8 5.5 -2
Sevices/Memberships 0 5 5
Utilities 62 215 153
Work Cost Remburse 50 60 10
Total 4,239 3304.34 -935

How much money have you made applying for offers and Rewards this year? So far I have made close to $1000 in cash and Gift cards. Here is a list of the offers and rewards I have accumulated so far this year. So far my credit score has not dropped, it actualy went up. My friends at work think that all this free money stuff I do is for the birds. I think of this money as a bonus for having a decent credit score. My score is not that great , but a little above average.

1. Citi Checking Account $200 Cash (Opening Account)
2. Citi Premier Pass Elite $150 in gift Cards (Opening Account)
3. Citi Diamond Reward $100 in Gift Cards (Opening Account)+ $200 ( Reward Gift Cards)
4. Citi Professional $100 in Gift Cards (Opening Account)
5. Citi Divedend $150 in Cash Back rewards
6. Unwired $20+$5
7. Fatcash $40
8. Creditcard offers.com $10

I've updated my sidebar again, and I'm once again going in the wrong direction. At this rate I will never make my "deadline." I'm trying to get my act together and have enlisted the "mental" support of a couple of people. Who knew this would be so hard!

Welcome, I'm Mrs. Thrifty...I've not always been the wisest with money but I've smartened up over the years. My early 20's were not always the wisest years but I changed my ways over the years and now I much more responsible than I was.

I started becoming a spender when I was 16. I got a job at a supermarket as a bagger and my weekly routine was to go to the mall and spend spend spend. If I saw something, I would buy it. I really didn't pay attention to my folks who said "You really need to save". I was enjoying myself. It was the first time I got expensive clothes and it made me feel good. I no longer was getting teased from my classmates about my appearance or stuff. Shopping was a rush...

Then I got to college. The first week I was there, I opened a credit card. They stationed their booth right outside the dorm and they had a cool T-Shirt so why not? My first purchase was a pair of J Crew Construction Boots and I told myself I would pay it off but I didn't...

Then came along a mooch of a boyfriend. He was super cheap and I was very generous. I would take us out to dinner, buy him stuff, etc. Then came the end of college, I was $5K in debt from credit cards. As a graduation gift, my parents paid it off..

But I didn't stop charging...Graduate school was a stretch and there were times that I had to put stuff on the card. I graduated then moving back to the North came with costs that I couldn't pay plus it took me a few months to find a job and Mooch did not help me during this time so I was getting more in debt. I started to sell things on eBay to make ends meet. I finally got a job, moved out of mooch's place, and continued to charge. Then I heard Dave Ramsey...

It was about 2001 when I heard his message of becoming Debt Free. This was a new concept to me. What, not use a credit card? So I tried it...and it worked. I was able to pay off $6K in credit card debt, $9K car loan, and $16K financial aid loan in about 3 years.

Since then, I have become a lot more responsible. Luckily, I met Mr. Thrifty so he is on the same level of thriftiness as I am. We got married, had a cheap but beautiful wedding $5K all together and we started to merge ourselves financially...

Now that is a difficult task. As you can see, I make more money than Mr. Thrifty and just because I was debt free besides my car does not constitute that I was a saver. So I was a huge impulse shopper, especially on the web. I paid cash for it, but I necessarily did not need it. I have a whole closet of "good deals" that I don't use. I found it perfectly acceptable when we first got married to buy anything I wanted without consent...

Now that all changed when he lost his job. Mr. Thifty was a pilot and the small operation he worked for let him go because they lost a contract. 7 months after getting married, Mr. Thrifty was unemployed. We had a small emergency fund but not the 3-6 months living expenses that they recommend. DH was fortunate to get a temp like job and it was at that point where we fully merged the financial aspect of our lives. We lived on my income and put away his money that he earned. During his unemployment we were able to save about $4K and still pay off a piece of property that we bought. My thoughts turned to saving...

So I became obsessed with budgeting and saving. I opened up a Emigrant account and got a good idea where the money was going. DH got a job 9 months later in a different field and it offered benefits beyond his wildest imagination. He never had a 401(K) or a pension so he has both.

So here we are at almost 31 and 34 without a house but with minimal debt. Our financial goal is to become debt free in early 2007. Then we are on super saving mode and will save save save. We currently rent a home from an elderly individual who is in a nursing home and the rent is about $650. Our goal is to save as much as we can until she passes away and the house is sold. Then we are onto buying. With being in our 30's, a starter home is out. We're going to have to jump into a larger home. I hope the housing market stays steady until we're ready to buy. The good thing is that I still look for homes weekly on the net. So far, I haven't seen anything that I would want to buy. To make matters more complicated, we are currently stuck in our current area right now because it is half way between our work places. I travel 1 hour north to my job, Mr. Thrifty travels 1 hour south to his job. We like the houses architecture wise about a mile from our rental home but unfortunately the school district is horrible and if we have children, they would have to be sent to private school and I don't really want that. So, we are waiting...and saving.

My hopes is to document the journey into the house, share some saving tips, and get feedback also. Thanks for stopping by...Mrs. Thrifty

I finally got my raise today. It was 5.7% . I felt a little dissapointed as I thought it was going to be around 9-10%. The 5.7% percent just covers the higher cost of gas, health insurance and electricity. I bumped up my 401K to 9% from 8% and increased my biweekly contribution to my Roth by $10. I only saw a $60 increase in my take home pay after I make my extra contributions. The only thing to do is to pretend the raise never happened and put my whopping $60 into my Emigrant account. This will bump up my biweekly contributions to $200. I am planning on purchasing a home whithin the next 18 months so I plan to use this account for my downpayment? How much was your raise?

Just received a letter from my primary credit card company, Citi Dividend Rewards. As of October 13, 2006, this card will no longer provide 5% cash rebate on supermarkets, drugstores, and gas stations. The 5% will now become 2% on those purchases but will also include convenience stores and utlities (excluding phone).

AARRRGGH! I started researching any other possible 5% cash rewards credit cards but they are few and far between. In fact, I have yet to find a suitable alternative. Discover cards offer 5% cashback only on certain types of purchases. American express has a cash rebate card that will offer you 5% on everyday purchases, 1.5% on everything else AFTER you spend $6500. The whole point of having a visa/master card rewards card is that this is accepted everywhere.... whereas AMEX is not as readily accepted.

Citi Diamond Rewards still offers the 5% rebate but you get it in the form of Thank You Points which you can only redeem with their Thank you Network. They do have a student loan rebate that equates the points you earn to as if you were getting a 1% return (i.e. 2500 points = $25 rebate in student loan).

What to do now? Would appreciate any suggestions... For now, I will still use my American Express True Earning Costco Reward card as the primary but I still want to add a Visa/mastercard reward card that will give me 5% rebates on gas.

I just received my card in the mail last Friday. I went and bought a 12 oz. milk for .99 with my card on Sunday. Today I got 15,000 Thank you points in my account. I ordered a $50Home Depot Card for my dad, and a $50 Target Gift Card for my mom. I'll save my other points to help me pay for a vacation. I usually do not order gas cards because you will not be earning points by paying with a gift card. You can earn an additional $10 if you apply through cardoffers.com. I will cancel the card in under a year because the charge you $75 per year after the first year.

Tip: Place your name as your buisness name

EBRI (the Employee Benefit Research Institute) has released their annual report on the state of 401(k) plans in the US. Overall, I think even a curmudgeon like me would be encouraged by the findings:


While the numbers, especially the median account balances, are low, the trend is very positive.

It's important to remember that, despite the fact that it feels like 401(k) plans have been around forever, we're actually still in the ramping-up phase. A person who is at retirement today was in his or her forties when the first 401(k) plans were introduced. (The enabling legislation passed in 1980 and regulations were issued in 1981, but few plans were in effect until the mid-1980s.)

Like many workers my age (47), I've never been covered by a defined-benefit pension. I recall clearly when my employer (Met Life) introduced their first 401(k) plan in 1984. I think I left the company at age 28 with a balance of around $4,500. I was fortunate that it didn't occur to me to spend the balance when they gave me a check, and fortunate that my next company also had a plan.

I think that workers who are starting their careers today are going to be in better shape than the generation that is making the transition from pensions to 401(k)s, thanks to the new provisions requiring default participation (with an opt-out) and encouraging more aggressive investment choices for young participants. Folks now in their 40s and 50s didn't have as many years of compounding, so we need to ramp up our contribution rates to catch up.

The Minneapolis Area Association of Realtors released its new version of the weekly report recently and I love all the new data and breakouts by price and style.  It really helps you look into the data further to see what’s happening on a sector-by-sector basis.

Here’s this week’s report:
MAAR Weekly Statistics - August 21, 2006

While these numbers are great, it can also be helpful to look at the market as a whole in summary:

AUGUST 2006 CURRENT RMLS STATISTICS MARKET UPDATE

69       Average days on market

45%    More listing on the market than 1 year ago totaling 60663.

35%    Of the inventory that has sold in last 30 days has had a price adjustment

5.3    Months Absorption Rate=the time it would take for all the listings to sell if no more homes were put on the market

6      For every sale that takes place, there are 6 more homes that haven’t sold 
 
36     Showings for every home that sells (From Edina Realty appt center statistics)

As we near Fall in the Twin Cities, we’ve now entered a new stage in the housing market we have not seen for many years: the Average Selling Price is now unchanged from last year at this time.

In recent years we have seen a large runup in Average Sales Price during the spring and summer months.  This year was marked by much smaller gains, which has lead to us “catching up” with last year’s price.  While this means that sellers cannot expect any appreciation in their home over last year, it also means for sellers that are moving up that their future home will not cost as much as they expected.

This is not a sign of a bursting bubble, this is only a continued ease in the housing market that is bringing more historically common market times and appreciation back into the market.  We’ve been cooling off for several years now and this has sharply reduce the chances for a dramatic price drop.

  

I’ve been contributing the maximum allowed for my retirement for the past 5 years, so my balance has gone up quite a bit. But recently, my personal rate of return for the period ending June 30, 2006 was: -4.12%. According to this CNNMoney article today, those who saved for their retirement from 1999 to 2005 have done well. Here are the average account balance in 2005 for the following age groups:

• 20s who have had accounts since 1999 was $24,169
• 30s, it increased to $50,930
• 40s it rose to $91,848
• 50s had an average account balance of $127,766
• 60s was $140,957.

Are you on track with your retirement fund? I hope I get out of the negative territory for the next quarter!

Today's my day to post a question fo the day for the Question of the Day Marathon, and after a bit of a late start, and some thinking, here it is:

If tomorrow you were to suddenly find yourself unemployed, what would your action plan be and how much trouble do you feel you'd be in?

I'll publish my response after work today as a reply, so as not to influence anyone else's answers. Sorry I'm late on this, it's been pretty crazy at work!

By: Alpha Male Retail investors tend to take management fees for granted.  Few people, other than industry comentators, seem to obsess about them even though we know they are relatively high in Canada.  We care more about gas prices than mutual fund fees.  In fact, on a $100,000 portfolio moving from the typical US management fee to [...]

My computer is currently dead. I am waiting until next month to take it in. I have been without Quicken for about 2 weeks! I am starting to go through withdrawals. Just this morning as I was closing my Etrade account, after getting my $50 bonus, I was thinking how I couldn't wait to go check all my balances on Quicken. Oh the agony.

I just opened a Bank of America account. They are running a free $100 bonus promo. I have been looking for an excuse to open an account with them. I like the savings plan where they round your purchases up to the next whole dollar and put the difference in your savings account and match it for the first few months.

I got the letter. I was hoping it was only rumors, but to my dismay I received the Citi Dividend Card letter about the reduction in dividends. They are decreasing the divedend to 2% for purchases in supemarkets, gas stations, and drugstores. They added a 2% dividend on utilities to compensate for the 3% drop in dividend. The change will take effect on October 13, 2006. I have not looked at other cards yet, but plan to apply for a different card thay pays out a dividend. Any suggestions? I have other cards with Thank You Points, but nothing beats the $50-60 check I get in the mail every 2 to 3 months.

Personally I only have 2. I know a lot of fellow bloggers are posting about one of the cards that I have which is going to change/scrap its rewards system. Its a shame as its one of my oldest and most loved cards. Id hate to have to just let it sit in my wallet for nothing.

I Have:

• Citi Dividend Mastercard (cashback = 5% gas, groceries, and drugstores, 1% everything else). Their customer service is pretty good. I monitor my usage and use the free option to pay the bill online. Ive had this card for 5 years now and am happy with it. I generally cash out when I reach $100.
  
• Chase Cashback Rewards Visa with the same 5% gas, groceries, and drugstores, 1% everything else. Same as citi in almost all features (online statements, payment, etc). The only slight beef that I have with Chase is that they might not be as customer service oriented as Citi. I say this because I was once out of the country and unable to pay my bill on time and they charged me a late fee without a one time waiver that Citi did for me. Its not really an excuse but just comparing: Citi was nicer. It also could have been because I was with Citi longer than with Chase.
  

Being offered:

• Amex Blue with cashback which is supposedly the same on the surface but is actually a tiered card. This means that all purchases, be they gas/grocery/otherwise are only awarded 0.5% cashback until $6500 worth of purchases. After that the advertised percentages kick in. This could work out to an average of close to 2% with sole use.
• Amex Delta Gold Skymiles with 25000 bonus points which is basically a free ticket. The miles are pretty good too ... basically 2% on everything. The only gotcha with this card is that its only fee free for the first year. I might consider getting it for a year, getting my ticket and then cancelling. Dont know if its worth it because closing will hurt my credit score?
• I do have other offers but they are not worth a mention as this post is getting too long already.
  

Criterion I look for in cards before I apply:

• No annual fee. Why pay a fee? Unless you are getting some extraordinary service which makes the fee worth it.
• High Percentage Rewards on gas, grocery, restaurants, etc...things where I spend most of my money on. Ideally I would like 5% on these but nowadays these cards are becoming scarce. I wouldnt mind a flat 2% or greater on all purchases either.
• Ability to manage account online. Most companies have this so this is not really a concern.
• 0% balance transfers for > 1yr. This is really not one of my criterion as I dont play that game but wouldnt mind exploring it. (In case you dont know the game its: get money from credit card companies, put in high yield savings account for as long as its 0%, pay the minimum + some every month, pay back all the money at the end and pocket the interest). WARNING: this can hurt your credit score for the short term. A great resource if you want to play this game is this post at MyMoneyBlog.

Overall, I would highly recommend both the cards that I have but there are rumours that my Citi card is not being offered anymore. Please share which cards you have and would recommend.

Small house, big bank account.

VERY interesting. Makes me feel a little better since we have the 'small house' and don't plan on trading up!

I've been assigned the task of giving IndexCreditCards.com a shot in the arm traffic-wise. My solution: give away iPod nanos! It's not genius, but it just might work...

Here's the deal. Link to IndexCreditCards.com (http://www.IndexCreditCards.com) or any/all of the site's pages on your blog or other Web site between 5PM EST on August 23rd, 2006 (that's right about now as I write this) and 5PM EST Thursday September 14th. The three blogs/sites that send the most traffic in terms of unique visits during that period will win a prize.

Our goal is to increase our profile in the PF blog community, but there's no incentive for you to be nice or not-so-nice in any links or posts. If you think IndexCreditCards.com is the most comprehensive source for apples-to-apples comparisons of credit cards, thus helping consumers and small businesses find the best deals (and you should think is in my opinion), say so. If you think we stink and are trying to bribe you with the possibility of a free nano even though credit cards are evil, feel free to say that as well.

In the end, it only matters if you are in the top three sending us traffic. So, without further ado...

Prizes:

First Prize: 4GB iPod nano (or choose $250 in Amazon.com gift certificates)
Second Prize: 2GB iPod nano (or $200 in Amazon.com gift certificates)
Third Prize: 1GB iPod nano (or $150 in Amazon.com gift certificates)

Rules & Regulations:

1. In determining "unique visits", we will track traffic through our site logs. To weed out cheaters, we will study traffic mainly via IP addresses, but we also might red flag other traffic that is especially suspicious, such as 50,000 clicks coming from Taiwan from 1 to 2 AM. In our experience, fake traffic is pretty obvious. The decision on what traffic is legitimate will be ours alone, and by entering the contest you agree that we are the ultimate judge. (Don't mean to sound scary, but there's always someone who tries to ruin a perfectly good contest by being a nerd.)

2. To be entered, you MUST drop me an e-mail at tim@indexcreditcards.com to tell me you want to be entered. Give me your e-mail address and your blog(s)/site(s). If you are generally anonymous on your site, you don't have to tell me your name. HOWEVER, if you win, you obviously will have to tell me your name & address so I know who to send the booty to.

3. Prize winners will be announced on this blog on September 15th or thereabouts and anywhere else we decide to announce them. Your blog/site will be mentioned, as well as your name unless you want to remain anonymous or use a pseudonym.

4. Winners will get their iPod nanos shipped directly from Apple, or their gift certificates directly from Amazon.com, but Apple and Amazon.com have absolutely nothing to do with this contest, so leave them alone.

5. We are not responsible for any dealings winners might have with Apple or Amazon.com. We send the loot and then we're out of the loop. If your iPod breaks, go to Apple. If Amazon has a glitch or something that makes your life difficult, that's not our fault.

6. Void where prohibited.

I never like to deal with legalities, but I think that covers us. If you have further questions, let me know.

Now go forth and multiply our traffic!

Lots of items to mention on 401(k)s today:

Tax breaks on inherited 401(k)s...
Kudos to the current legislature for pushing this one through. I really believe the death tax will die (haha) in America, and this is one of the first indications of that. There should be no penalty for passing along money. Dissenters will say it does society no good to keep 'old money' and let children live off their parents riches. The argument is to have a high tax rate at death so the money goes back into government coffers in order to benefit society. However, I believe the benefits of the free market economy are far greater for society, so, even if children hang on to this money, it will be sitting in banks and brokerage accounts and being lent out to individuals who are hungry to make something for themselves.

Automatic enrollment for employee sponsored retirement accounts...
and
Automatic enrollment (MSNBC)...

In theory a good idea, but this is one small step towards the government telling me how much I "need" to save as opposed to me deciding for myself. I have an issue with the government essentially dictating how much money flows into Wall Street, which will create artificial returns and losses, giving true investors reason to put their money elsewhere....where Uncle Sam has less control. Let the free market decide!

I recently opened a second ROTH IRA account with E-trade because of their great selection of no load, no transaction fee mutual funds. I came upon this little fund called the Hodges Fund(HDPMX). It only requires a min. of $250 to open and has a pretty good track record. I am going to keep investing in this fund until I can afford to buy one of the Bridgeway funds that require a $2000 min. investment. E-trade was the only place I could find that offers Bridgeway funds with no transaction cost. My other ROTH is with Fidelity, but their trade fees are too much for an small investor like me. They charge $19.99 per trade and charge transaction cost on most of the outside funds. The fees will go down once I pass the $50,000 mark. I am at $36,300 because my 401K is also in that account. I am hoping for a rally and more employer contributions.

Imagine a friend, caught in the rising tide, the shore getting smaller in the distance. They slip beneath the surface of the water, then spring back up gasping for air. It happens a few times, and then finally, they are overwhelmed.

This has become the state of many people's financial affairs in today's economy. People are literally drowning in debt, with financial freedom shrinking on the horizon. And rather than call out for help, they choose to let the waters take them.

It seems almost ironic to me that there are people I work and interact with daily who are struggling to get by yet take no positive steps to improve their situation. In particular, there is someone whom I have been speaking to about her future.

My friend, who we shall refer to as Kate, has told me a little about her financial challenges. The gist of it is that she's living check to check. I gave her some basic advice and then offered her my favorite book on turning your life around - The Wealthy Barber.

Kate has so far read only four chapters in the two or three weeks she's had my book. Which, unfortunately, tells me that she's not serious enough about taking her life back. Or, more specifically, she isn't willing to give up her lifestyle.

Now, to be fair, Kate makes very little money. In fact, she works a second job after she leaves her 9 to 5 just to keep up. But there is still room to maneuver, even on her budget. Did I mention that she wears very trendy clothes and owns a phone that is several hundred dollars? How about her fabulously manicured nails and perfect hair?

The problem, as I see it, is that people have developed the fast food mentality and are trying to apply it to every aspect of their lives. If they want something, they want it right now; tomorrow is too far away. Saving $20 per check just doesn't put the big numbers on the board fast enough for them.

What they fail to realize is that all of us who practice the live below your means (LBYM) philosophy started at that point. We got to where we are today one dollar at a time. It is merely through discipline and continued resolve that we have achieved more.

Unfortunately, my efforts thus far have been in vain. Kate is still living beyond her means and not planning for tomorrow. But I have not given up on her. I have thrown her the financial life preserver that can save her. The one that saved me. The one that can save all of you.

By: Alpha Male Like many suburban North Americans, I am blessed with a local 7-Eleven.  Mine even has a gas-bar.  Last week while filing my car, I was reminded of a common fallacy about hedge funds.  As with most gas stations, I am provided a choice of octane rating in my gasoline.  The good folks at Seven-Eleven suggest that a [...]

My apologies for not keeping up with these as well as I should, works been pretty insane. In any case, today we are asked by mapGirl:

How much of a balance do you leave on your checking account(s)?

Enjoy!