Financial Samurai

Pick any private school.  The cost is about $200,000 over four years.  These figures don’t surprise anybody anymore given the ever rising application volume to storied institutions such as Harvard, Yale, and Princeton.  That said, there have to be some who believe $200,000 for a private school is a hard pill to swallow over an excellent public school for just $40,000.

With an estimate 17% of people aged 20 through 24 unemployed, swallowing a bowling ball may be easier than finding a desirable job post graduation.  Let’s say you are one of the unlucky few who can’t find a job after a $200,000 education.  Does it really matter? Let’s think about why it doesn’t really matter from the eyes of several recent graduates.

THE BOY WHO WAS FORCED TO GO Read more…

Like clockwork, I top-ticked the markets when I wrote “The Good Times Are Back Again” this past April.  The markets have since fallen about 9% as the Euro Zone goes bonkers over debt problems.  But, at least the message from the post is that it’s exactly during the good times where we need to be more disciplined in our finances, because we never know when the bad times will return.  Now that the bad times are back, is now the time to party like it’s 1999 and spend counter-cyclically?  Nope, because with the amount of volatility, by the time you finish reading this post, the markets might be surging again!

With this market correction, it’s pretty clear that everything isn’t peaches and cream.  US leading indicators have turned downwards, unemployment figures have stopped improving, and people are wondering whether Europe will be like the US, but much worse.  If you’re American living in America, look at the bright side of things: the US dollar is strengthening, and the 10-year yield has declined to 3.1%, which is leading to lower rates yet again!  The 10 year yield and all its glory really is the most beautiful figure to watch.  It can tell the story of everything and anything.

The USD will always be a global safe haven currency, no matter how hard we try and mess things up.  It’s good to see that we aren’t the only basket cases as investors sell the Euro faster than they can say tapas!  What’s going on now is that money is shifting towards US assets, namely the property market.  Combine an asset shift with cheap debt, and rental yields above the current risk-free rate of return (3.1%), you realize why smart money is moving into the US property market again.  Only a minority will agree with the attractiveness of the US property market, and therein lies the opportunity.

During bad times, it’s always good to re-evaluate your finances.  I’m not convinced the bad times are back and am actually quite sanguine about the economy.  All the same, here are some suggestions just in case things get ugly for longer.

TOP 5 THINGS TO DO WHEN THE BAD TIMES ARE BACK AGAIN Read more…

Dear Readers,

It’s been a wonderful journey so far and I want to thank you for visiting my tiny slice of the matrix.  We may not always agree, but that’s the beauty of it all.  Through differences of opinion, we’re allowed to learn from each other and flourish mentally, and hopefully financially as well.  Besides, it’s not like I’m going to hold your puppy hostage or something if you challenge my opinion!  Hope you feel the same.

Sometimes it’s hard to to respond to all of your wonderful comments (7,100+ so far), yet I will always try.  I wish there was an easy way to tag all of the most interesting comments and show case them.  Perhaps I still will!  It’s so fun to visit other sites, comment, and interact, I want you to experience the same here.

Each blog has a different personality and tone to it.  I’d like to think that Financial Samurai is unique with a flavor that challenges conventional thinking.  We can go back to basics regarding budgeting, savings, and retirement planning.  Or, we can continue blazing new trails.  It’s really up to you frankly.  What would you like to read more of going forward?  Generally we should enjoy writing what we’d enjoy reading.

Finally, I thought it would be fun to dedicate this song to all the female readers who helped share their viewpoints.  Five String Serenade was composed by Mazzy Star in her 1993 album, So Tonight That I Might See.  The original plan when I learned Five String Serenade 12 years ago was to sing to a girl after an evening picnic on a beach somewhere.  I never got the chance until recently, and now it’s been recorded, in my own version for you.  Funny how things never turn out quite like you plan.

Here’s to another 200 posts!  Thank you again!

5 POSTS THAT COME TO MIND

Diamond Engagement Rings Bling Bling! - A comprehensive guide to getting the right stone and understanding what women really want.  Furthermore, you’ll find a new rule on how much to spend.  It makes perfect sense!

Everything Is Rational – The Answer To All Things Irrational – There’s no need to question anybody for their choices ever again.  It’s good to mind our own business and not force our will on others.

The Curse Of Making Too Much Money And Not Pursuing Your Dreams – A story about someone who makes multiple six figures, but is thinking about giving it all up for his hobby.

If A Panda Didn’t Look Like A Panda, Would The World Still Care? – A look into how we’re fooled by attraction, and why it’s necessary to floss and brush your teeth.

Don’t Have Children If You Can’t Take Care Of Yourself - A discussion about the cost of kids and why we have so many when there are so many orphans who need our help.

Keigu,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

It continues to perplex me why there should be a distinction between an emergency fund and your general savings.  If you have $100,000 in the bank, what is the difference between calling it $100,000 in savings, and splicing the funds into $10,000 emergency money and $90,000 savings?  The answer lies in the fact that people who need to create an emergency fund likely always have “emergencies” and are weak with their spending and savings!

Let’s say your name is Mr. Benjamin aka a $100 dollar bill.  You’re relaxing with your fellow Benjamins in the bank, hopefully earning at least a 4% interest rate using the “DVD Method To CD Investing” and having a grand old yield maximizing time.  A Benjamin’s purpose is to provide a solid source of liquidity and risk free interest income for the owner upon his or her retirement.

Some Benjamins are lucky.  Their owners don’t discriminate between one bill or another.  They treat each bill with vital respect i.e. they don’t touch it!  Some owners are just nutty, always disturbing their party and separating one Benjamin from another.  “Listen up Benjamins!  100 of you are to relocate to this side of the tracks, and the other 900 Benjamins get to kick back and relax!”

YOUR CRUTCH WHEN YOU CAN WALK JUST FINE Read more…

While waiting at the dentist, I picked up the April issue of Inc. Magazine and stumbled upon an article entitled, “The Secret Of Their Success.“  The article discusses what really drives salespeople to succeed.  We are all salespeople, whether we know it or not, which is why being a happy loser helps bring out the best in everyone.

Clotaire Rapaille, a psychoanalyst and ethnographer describes a happy loser as someone who sees rejection as a challenge.  The first “no” stimulates their brains to want to try harder and not give up.  Clotaire highlights one example where a firm defines success not by how many wins a salesperson achieves, but by how many rejections instead. Read more…

I’ve been a little more active on Twitter recently and I noticed something quite interesting.  Starting at around 10pm PST, the chatter goes silent.  I tend to stay up until midnight to 1am and it’s interesting to observe how activity ebbs and flows online.  I usually wake up sometime between 5:30am-6am and spend time checking e-mail, responding to comments, stretching and seeing what’s going on online.  Again, absolute silence until about 7am PST when things start coming alive.  Where is everybody during the silent times?  Sleeping?

There was a time where I’d sleep 7 or more hours a day, but no more.  For the past 10 years, my body automatically gets up after 6 hours of sleep and never later than 6:30am on the weekdays, and 7:30am on the weekends no matter when I go to bed!  Poker until 3am? Good morning sunshine at 7:30am!  Actually, I wish I could sleep in until 9am sometimes, but I just can’t.  Part of the reason for my automatic clock is that I eat regularly, and therefore have the desire to use the restroom regularly.  Time to go, my body says and I get up.  Unconsciously, there must also be a strong feeling of guilt that I’m wasting my life away sleeping.

7 HOURS A WEEK LEADS TO 30+ HOURS MORE A MONTH Read more…

The following is a guest post from @NealFrankle of Wealth Pilgrim.  Neal is a Certified Financial Planner, a fellow Yakezie member, and all around good guy.  Hope you guys enjoy!

During strong markets, anyone can make money. During weak markets, everyone gets hurt. For the most part, all ships rise and fall with the tide, financial adviser or not.

So what’s the point of having an adviser?

(I have my own answer to this question and it may surprise you.)

But before we get to my answer, let’s explore the wild and wonderful world of financial advisers and our clients.

1. Financial Advisers are Salespeople. Read more…

If you feel like debating, head over to “The Dark Side Of Early Retirement” and get your fix.  I stand by my main thesis that nobody quits a job they love to do.  Someone who is able to find a fulfilling job is one of the luckiest people on Earth.  We shouldn’t make fun of them for being a “loser” for working as one commenter put it.  Instead, we should figure out what makes them tick!

Everybody gets bored at something after enough repetition.  That’s why it’s key to have many different interests which straddle both the mental and the physical aspects of your life.  No surprise that interesting people have a plethora of interests.  These people also probably have a higher than normal level of commitment to their activities which make them that much more intriguing.

THE TOP 5 “I CAN’T BELIEVE THEY’RE PAYING ME TO DO THIS!” JOBS Read more…