Financial Samurai

As you may know, my 11 year old car is dying and I’ve been unsure whether to spend up to $2,500 fixing Moose, or let him fade away.  The service dealer said I would have to spend around $1,200-$1,500 to replace the entire exhaust system below, which is around 35% of the total value of my car!  That just doesn’t seem right.

As any frugal person would do, I got a second opinion.  The auto service industry is even more shady than the insurance industry and I wanted to make absolutely sure that I wasn’t being ripped off by the dealer before spending any more.  Besides, we all know that getting your car fixed at the dealer when you’re not under warranty is seldom the cheapest, and often the most expensive way to go.

ALMOST GOT ME FOR BIG BUCKS

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So you’re giving back gains in the stock market and having a difficult time finding a job thanks to the threat of higher taxes and a government default.  Meanwhile, you’re losing purchasing power as the US dollar goes to zero, while your savings returns a pitiful 0.3%.  You might have a better chance riding a hungry grizzly bear naked and escaping unharmed than accumulating great wealth and enjoying a worry-free retirement if this keeps up.

Yet, I’m as optimistic as can be because I see the human spirit shine.  Republicans in Congress are fighting for what their supporters elected them to do, provide checks and balances, reduce spending and limit the size of government.  Democrats, on the other hand, are fighting for those who depend on Medicare and Social Security to survive and are refusing to cut entitlements and therefore costs without the wealthy contributing more in taxes.

Both parties care little if the stock markets implode and unemployment stays woefully weak in the short-term, because they care for what they believe in for the long-term.  Besides, as you know from a previous post, Congressmen and women are extremely well off.  They can afford the hit.  They are willing to fight tooth and nail until the very last minute before agreeing to terms.  You must admit, that standing up for what you believe in is one of the most admirable straights a human being can possess.  Whether one is right or wrong is another matter.  Too few people battle to the very end.  Instead, we are so easily convinced and just roll over.  That’s not very courageous.
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It’s obvious that an agreement will be reached before August 2, 2011 to prevent a US default.  I know this because the 10 year US treasury yield remains at 3%.  Remember, if there is one figure you should always pay attention to, it’s the US long bond yield.  It will tell you everything from inflation expectations, to growth prospects, to foreign risk appetite, to whether that stud or babe will ask you out.  In this case, the US long bond is telling us the US will not default and everything will be alright, otherwise yields would be spiking right now.

So don’t worry everybody!  Sit back, pop some corn, and enjoy the show.  You’re fully diversified and know that in the final hour, each party will make an announcement and claim victory to save our economy.  It’s all one big mirage.  At the very least, the two parties are fighting for what they believe in and that’s better than a swift kick in the teeth.

Readers, do you admire our politicians for fighting to the very end, despite putting all of us in a financially compromised position?  Does this debt ceiling debacle affect you?

Regards,

Sam

In a rush to get to a meeting, I managed to bash Moose’s right side mirror into a garage side wall and blow the mirror off.  Crap.  That’s what happens when you have a large car, in a small garage, and do things in a hurry.  This little accident cost $135 to fix and 30 minutes of time.

While I was at the dealer, I used the opportunity to ask several other questions regarding what’s wrong with Moose.  For the past 12 months, there’s been a progressively louder rattling sound every time I drive, or slam the door shut.  After a little inspection, the service agent said that it looks like my middle muffler connected to my catalytic converter is wearing out and needs changing.  OK, good to know.  “How much?”, I asked.  The service agent said around $1,200-$1,500!  YOWZA!

LET MOOSE LIVE OR DIE? Read more…

There’s a belief that growing up, we all start off as fiscal liberals given we have little-to-no income and depend on others to support us.  As we start supporting ourselves we turn more fiscally conservative, believing we know how to spend our money better than the government does.  Finally, when we retire, or make so much money we donate our wealth sto have our names on buildings, we turn back to fiscal liberals.  Do you believe this to be the case?

Below are the 10  + 1 wealthiest members of Congress, and my, what wealth they have!

1. Sen. Herb Kohl (D-Wisconsin) $300 million
2. Sen. John Kerry (D-Mass.): $188.6 million
3. Rep. Darrel Issa (R-Calif.): $160.1 million
4. Rep. Jane Harman (D-Calif.): $152.3 million
5. Sen. Jay Rockefeller ( D-W.Va.): $83.7 million
6. Rep. Michael McCaul (R-Texas): $73.8 million
7. Sen. Mark Warner (D-Va.); $70.2 million
8. Rep. Jared Polis (D-Colo.): $56.5 million
9. Rep. Vern Buchanan (R-Fla.): $53.5 million
10. Sen. Frank Lautenberg (D-N.J.): $49.7 million

* Sen. Diane Feinstein (D-Calif.): $46.1 million, but add on her husband, Richard Blum’s net worth and they are over $500 million for sure!

I’m quite apolitical because the government is inefficient and politicians from both sides are always self-absorbed, power-hungry and devious.   Politics just provides comic relief and we should never rely on anybody, let alone our bankrupt government to take care of us.  This is why from a personal finance perspective, we need to save, invest, and save some more.

What are some conclusions you can take away from this list, if any?  Anything surprise you about the list?

Note: The approval ratings are even lower than in May , 2008. I just can’t find the chart.

Regards,

Sam – “Slicing Through Money’s Mysteries”

Did you know there were over 14 million cruise passengers last year?  Perhaps you were one of them.  Cruise vacationing isn’t for everyone but a lot of people who think they won’t like cruising end up loving it once they actually try it.

I’ve taken several 7-to-9 day cruises with family and friends and had a blast with each one.  I also gained a ton of weight in the process too, thanks to the 24-7 meal offerings, but that’s another story.  As part of my goal to live a better lifestyle, I’m planning a two-week cruise for two to the Mediterranean and need your help in the evaluation process.

You wouldn’t believe how many choices are out there, but I’ve finally narrowed it down to two ships and two itineraries.  I love to travel but ironically hate to do the actual planning and research before hopping on a plane.  That’s a big reason why I love cruises.  Once you pick a cruise and get on board, the rest is easy!

THE JOY OF CRUISING Read more…

When Zillow launched its website in 2005, the world was a buzz with the company’s ability to bring appraisals, called Zestimates, to everyone’s fingertips.  It was fun to type in your own home address, or that of your colleague’s or boss’s house to see what they paid.  Some of the estimates were way off and were course corrected by owner’s ability to log on, claim one’s home, and update the data will all relevant features under oath.

Zillow empowered buyers to become smarter shoppers by understanding comparables and knowing when and at what price the house was last sold.  When you know the seller paid $1,000,000 at the top of the market for example, you know it would be ludicrous to pay more by definition.  Zillow brought once exclusive information, available only to real estate agents and people who paid for it to the masses.  There was hope for an industry which generally is maligned for it’s two-faced ways, shady appraisal practices, and aggressive lending standards.

My biggest hope was that Zillow would make the markets more efficient for buyers and sellers, thereby cutting out a lot of unnecessary middlemen, and ultimately lower fees from 5-6% down to perhaps just 1-2% of selling price.  Boy was I wrong.

ZILLOW COULD HAVE HELPED THE INDUSTRY Read more…

Developing a better lifestyle is both current and for the future.  Ultimately, we all want to have better lifestyles and hopefully the goals achieved through my online endeavors and personal finances will help get me there.  This section is also a catch-all section that doesn’t fit neatly elsewhere.

I believe in five main pillars: 1) academics, 2) music,  3) athletics, 4) family, and 5) friendship.  “The Mental To Physical Connection For A Healthier Lifestyle” is very important to me.  Academics includes things such as work, entrepreneurship, writing, reading and building knowledge.  Music is what it sounds like, and also includes art.  While athletics includes sports and keeping physically fit.  I don’t want to be the dumb jock, or the unfit and uncoordinated nerd.  I don’t want to be the socially awkward, eccentric musician either, which won’t ever happen because I have hardly any musical talent.

Family and friendship can really be lumped together to form the backbone of a good lifestyle.  It doesn’t matter if you’re rich, beautiful, or brilliant if you have nobody to spend your life with.  In fact, I’d rather be poor, ugly, and dumb and have people I care about than the former.

2011 MID-YEAR REVIEW: DEVELOPING A BETTER LIFESTYLE Read more…

We all need good personal finances.  It’s easy to lose discipline as the year goes on, just like it’s easy to eat a lot of cheeseburgers after the initial health foray.  My personal finance philosophies are very straightforward: 1) save as much as you can without crimping your lifestyle, 2) take advantage of all company retirement programs and matches, 3) build wealth by increasing income rather than just cutting costs, 4) never rely on anybody else or the government for a handout and 5) make personal finances fun while giving some of it away.

When I read stories about 55 years olds having difficulty making ends meet because their 99 weeks of unemployment insurance has run out, it bums me out.  But, I also scratch my head because after 33 years of saving and investing, we should all be on the beach somewhere without a financial care!  Saving just $10,000 a year on average over 33 years means you’ll have at least a million bucks saved up if you returned the same rate of the overall stock market in that time frame.  Hence, I’m wondering if many folks are just understating their income by hundreds of thousands or even millions of dollars just to take advantage of government benefits.  I know one of my friends is.

Not saving and investing over your working life is completely irrational.  Depending on government promises to take care of you is also completely irrational.  Have you not observed all the corruption, greed, thievery and power-tripping our great leaders have shown over the decades?  The government can’t even manage its own finances, how does it expect to help us out.  We need to take care of ourselves.

2011 MID-YEAR REVIEW: PERSONAL FINANCES Read more…