Friday Gathering: Daylight Savings Edition

alarm clock

I don’t know about you, but I think Daylight Savings is dumb. Why not just let the amount of sunlight wax and wane naturally? I miss driving home when the sun is still up at 5 pm . . . not a big deal, but I would love to get rid of it. Here are some articles that I found interesting this week:

Ron from the Wisdom Journal posted the top 10 consumer credit card events of 2009 – a good read. I am not sure that our current credit paradigm is going to last much longer. We’ll see . . .

The Silican Valley Blogger give a few suggestions of the best ways to invest small amounts of money.

A guest post on Christian PF entitled “There is no such thing as a free lunch – or is there?”. Read it to find out.

Kevin, a staff writer at Moolanomy tells why the first time home buyer extension is a bad idea. I tend to agree with him.

Two weeks ago, I announced the return of Ask Me Anything. I have received several questions and I am working on responses. When I make the final edits, I will post them as a part of my Friday posts. In the meantime, if you want to “ask me anything”, send your questions to glblstew(at)gmail(dot)com.

Have a great weekend. Remember – don’t just spend money, spend time with family.

And the winners are….

Here are the 5 winners of the book “In Cheap We Trust”:

Kate

Financial Samurai

Jermaine

Rob Garcia

Sally Williamson

Winners will be contacted by emails over the weekend.

thx for all the participants!

Article by Stew

Photo by Chris Makarsky

Blog Traffic Exchange Related Posts

Are you preparing for the worst?

explosionLast week, after reading Stew’s article about why he does not expect to buy gold, I started thinking. Over the past few months, I’ve been hearing an increasing amount of interest in preparing for “worst case scenarios”. It seems as though last year’s major crisis left some very important consequences. So what are these dark scenarios? Here are a few that are often discussed:

-Collapse of the entire financial system: This one can no longer be dismissed easily since it was a distinct possibility during last year’s collapse of several US and foreign banks.

-Hyperinflation: With all of the money being pumped into circulation by the US government, many think inflation will pick up and could get out of control in the coming years

-Collapse of the US dollar: The US dollar, by almost any standard, has suffered major losses in recent months. There is a lot of speculation about the causes, the lack of the US government support to defend its currency, etc.

-US Government bankruptcy: With costs out of control, there is no end in sight for the deficits in the US and in fact they are becoming more critical year after year. Military, health care and pension issues are only a few of the reasons for the deficit. Will foreign governments decide to stop funding these deficits one day?

Apart from a few individuals, I think the vast majority would concede that these are remote possibilities that probably will not happen in our lifetime. However, an increasing percentage of the population is starting to prepare for worst case scenarios. How?

1-Cash is king: Having debt is bad enough but even having all of your money locked into investments means you could lose it all if things turn very bad. For this reason, many investors are keeping higher cash balances in their accounts and also at home, hidden in all kinds of places.

2-Metals: When a currency loses its value, one of the alternative assets over time has been precious metals such as gold and silver. For that reason, there is an increased interest in buying physical holdings that buyers can keep at home either in a safe or in a well hidden place. Metals have also been known to be one of the best ways to maintain purchasing power when inflation picks up significantly. These investors are often reluctant to buy gold in the form of ETFs for example because their worst case scenario also involves a complete collapse of the financial system which could render such assets worthless.

3-Diversification: Rich investors are looking at setting up foreign accounts where they can escape from exposure to the US dollar as well as the US financial system.

It does seem like a gross exaggeration doesn’t it? I’m not saying it’s not possible. Of course, it is difficult not to acknowledge the risk, especially after the near collapse we witnessed in late 2008… but personally, I’m not preparing for these scenarios in such a dramatic way for these reasons:

1-This type of crisis does not happen every year: Usually, all parties learn a great deal during such times which helps improve and stabilize the structure. Remember that major recessions usually happen once per couple of decades

2-The US government showed it was willing to do almost ANYTHING to save the system. Let’s not forget the magnitude of what was done last year. Major stimuli, injecting hundreds and thousands of billions of dollars, buying stakes in banks, etc. I personally believe that the only way a complete collapse of the economy would occur would be through a collapse of the US government… and if you believe in such a scenario, then I hope you have personal security guards to protect that gold.

3-It’s just too expensive. Do you know how much preparation  for this type of possibility will end up costing you in commissions, lost interest, etc? Over the course of a lifetime, it will end up being very costly. I just think it’s not worth it; I’ll take the gamble…

author: Mike

image source: scott3eth

Blog Traffic Exchange Related Posts

How much does your vice cost?

habit

Wikipedia defines a vice as a practice or a habit considered immoral, depraved, and/or degrading in the associated society. In more minor usage, vice can refer to a fault, a defect, an infirmity or merely a bad habit.

Recently, I spent some time thinking about how much money I spend on things that I really do not need – not necessarily things that make life easier – but rather things that are simply a habit, a pleasure or a waste of time. I am not going to exactly reveal my particular “vices”, but I think it is a good idea once in a while to take stock of the little money trickles in our budget. You know the holes that allow a few bucks to slip through during the course of a month? Some of these items might even have a legitimate place in our lives, but we all must consider the cost.

  • Coffee: $.50 a day   $15.00 a month   $180 a year (if you make it at home)
  • Cigarettes: $4.50 a day   $135 a month   $1,620 a year (pack a day)
  • Alcohol: $10.00 a week   $40 a month   $480 a year (conservatively)
  • Soda: $4.00 a week   $16.00 a month   $192 a year (two cans a day from the grocery store)
  • Cable: $55 a month   $660 a year (low end package)
  • Gambling: $250 in Vegas   $100 year in lottery tickets   $500 ($10 a week in your home game)
  • Cigars: $6 a week   $24 a month   $288 a year (really cheap cigars)
  • Golf: the sky is the limit . . .
  • Marijuana: $15 a week   $60 a month   $720 a year
  • Eating out: $50 a week   $200 a month   $2,400 a year
  • Spectator Sports: $150 a month   $1,800 a year
  • Tattoos:   $100 a year
  • Shoes:   $50 a week   $600 a year

Okay, obviously some of these may or may not qualify as vices, but we could probably find a way to do without every item on this list. Pick out your particular weaknesses, add up the yearly cost and then compare that sum to your monthly budget, your typical paycheck or some other legitimate expense that is a part of life for you. Then ask yourself if it is worth it.

For some of us, eliminating a vice or two could have the effect of a five or ten percent raise. Now you can make an informed decision about whether the pleasure derived from that vice is worth the cost.

Article by Stew

Blog Traffic Exchange Related Posts

10 Small Ways to Save Money That Make a Big Difference

small-money-saving

Image: alamosbasement

When it comes to saving, sometimes starting small feels almost like not starting at all. A bit here and a bit there tends to add up like drops in a bucket. The important thing to remember though when it comes to saving money is that those drops can eventually grow to a trickle, then to a stream, then a torrential current of cash.

Using small ways to save is similar to the bundle of sticks story – remember the one that starts with the man easily breaking a single stick. Then he snaps two, even three sticks together. But when given an entire bundle of sticks, he finds it is virtually unbendable, let alone breakable. It’s much the same with small savings techniques. Many, seemingly inconsequential savings methods bundled together can significantly grow your nest egg to immense proportions.

1. Get rewarded for spending on a credit card

It might seem odd to begin an article on ways to save with a topic like credit cards. With interest rates often ranging anywhere from 10-20% percent (unless you get a zero balance transfer credit card), credit cards can be the arch nemesis to a savings plan, but only if you let them. First, you must ensure you pay off your balance each month to avoid those hyper-inflated interest rates. Second, get a credit card that offers cash back, store discounts, or other rewards and incentives, so that when you do spend, you also save.

2. Take advantage of balance transfer cards

If you are carrying a credit card debt then it will definitely be beneficial for you to transfer your credit card balance between cards, which will allow you to avoid paying the sizeable interest rate on a balance. Making such a move with your debt, say from a card with a balance of $1,000 and a 15% interest rate, to a card with an significantly lower or introductory 0% rate, can save you hundreds of dollars, if not more depending on the time it takes to pay off your balance.

3. Coupons will save you money

What if you saw a dollar bill taped inside the Sunday newspaper? Would you take it? Of course you would. Yet, there is a missing sense of urgency among many of us when it comes to coupons, which are essentially the same as cash. Certainly not all coupons are money savers, especially if they are used on particular name brand products that are more expensive than their generic competitors, but if you comparison shop and know a deal when you see one, coupons can turn small savings into big cash.

4. Start to save your spare change

Hey, if it worked when you were seven, it might just work when you’re thirty-seven. Hauling all that change to the bank to be turned in is often a big enough deterrent to make most people leave the jar where it is. Moreover, while all that change probably doesn’t look like much, you might be surprised how much cash you get when you eventually turn it in.

5. Save tax-free with government bonds

Putting money into government issued savings bonds can be a great way to save. These investment vehicles offer a low initial investment ($25 is the minimum E-series buy in), a secure way to save, and guaranteed (albeit sometimes low) returns. Taxes on U.S. government savings bond interest can also be deferred until the time the bond is cashed, allowing your investment to grow for up to 30 years tax-free, and if used for educational purposes might be tax-free altogether.

6. Set up a monthly direct deposit to a savings account

Direct deposit can be a small saver’s best friend. Diverting a portion of your paycheck, even if it’s only $20 each pay period, to a separate account, can add up to big savings over the years. That $20 deposit every two weeks is $520 a year, $5,200 after ten years, and that’s before you add any interest earned on the account.

7. Payroll deductions

Having certain items removed from your paycheck before you are paid is a small way to earn some big savings. Using deductions for an employer sponsored health plan, retirement account, or savings plan, can be a wonderful way to save without really noticing the loss of money. Not only are you stashing cash, but some of these deductions are pre-tax, saving you even more, especially over the long run.

8. Avoid taxes to increase your savings

There is a big difference between evading taxes and just avoiding them for a while. As we’ve already seen, everything from savings bond interest to certain payroll-deducted items can be tax deferred. Avoiding taxes will allow a larger portion of your money to grow, increasing your savings over time, and delaying the cost of taxes for years – sometimes indefinitely. When buying products or considering retirement, it is also important to consider sales and property tax rates since they can range widely depending on cities, counties, states, or regions.

9. Let your savings save

Once you’ve managed to start saving, let your stash work for you. Compound interest, dividends, and similar returns on investments can grow you’re money without you having to lift a finger. While sometimes the returns are small, over time, they can grow exponentially, and who can deny that free money, no matter how little, is nice to get.

10. Liquidating leftovers

Few people realize just how much money they have in their home, either in the form of books, CDs, DVDs, antiques, or other household items. Strip mall stores, resale shops, and a growing number of internet sites offer to purchase specific items such as textbooks, CDs, DVDs, and more. These businesses have made selling personal items a lucrative source of income for many. Reselling such belongings can be a great way to turn your unused items into cash.

##########

About the author

Kris is a personal finance writer who blogs about money management techniques for an Australian comparison website where you can compare credit cards such as cashback credit cards that actually help you make your money go further.

Blog Traffic Exchange Related Posts

Be a discriminating customer, a diligent employee and a generous entrepreneur

capitalism

The free market is not perfect. We all know of stories about unethical or corrupt businesses, but lately capitalism has been getting a bad rap. I just thought it might be nice to remind ourselves of a few of the benefits of America’s historic economic system – not because it’s perfect or because it was ordained of God or anything – but just to help us realize that capitalism is not all bad:

  1. Capitalism generally drive prices lower. Businesses want your business and they know that you want to pay as little as possible. Just think about how the prices of electronics have come down over the years. I recently purchased a laptop for less than $300. A laptop that would out-perform almost any computer built before 2007. Think about it, you can probably list lots of items where the prices have come down over time.
  2. Capitalism gives us a choice. I have three grocery stores within walking distance of my house. If I don’t like the prices at one, I can go to another. Gas stations, cable providers, restaurants, furniture stores all competing for my money and if I do not like the taste or the service or the price, I can find a business that I like.  I can even choice where I work or where I do not want to work. There are certainly difficulties tied to changing jobs, but if you want it bad enough and are willing to sacrifice, you have a great chance to earn an income anyway you like.
  3. Capitalism drives innovation. Businesses drive profits by coming up with new ideas and better ways to do things. Just think of what life was like before email or air conditioning or microwaves. Someone had an idea and as a result, they became rich. The thing to remember is that the guy who invented the microwave was not the only one to profit from that invention – factory workers, salesmen, investors all profited from the process to heat food quickly. Innovation is all around us, certainly some of it is bad, but the vast majority is beneficial.
  4. Capitalism supports charity. I was just speaking with a dentist who donates several weeks a year in Ethiopia. He can do this because his income allows him to give services away. Most charitable organizations depend on individuals to give them a certain percentage of their profits every year. People who make a lot of money, people who invested well and people who just have a little extra because of capitalism give it away to support all kinds of charitable interests. Americans gave two trillion dollars to those hurt by the tsunami disaster of their own free will!
  5. Capitalism keeps us honest. Yes, I know, many people have abused capitalism for their own purposes on many occasions. However, crooks are eventually caught, poorly run businesses fail and greedy entrepreneurs almost always end up ruining their lives – that is, unless the government bails them out – but then we all know that is not capitalism! You always have the choice to patronize another company. You can even choose to pay more to an ethical company if that is your desire.

Once again, the imperfections of capitalism are many; I do not defend greed and excess. You may prefer a different type of economic system. That is fine. We can still be friends, but I will take my chances with greed and excess if my freedom is preserved.

Be a good shopper, do your homework, research the best price, frequent businesses with good service, watch every penny and you can help the businesses around you get better. Work hard, think, treat people well and maybe someday you can run one of the good companies that are out there.

Thanks for choosing to read GLBL today!

Article by Stew

Photo by epicharmus

Blog Traffic Exchange Related Posts
Page 1 of 15912345»1020304050...Last »