Financial Samurai

The S&P Credit Agency now ranks right up there as the most hated company in the world.  And Deven Sharma, President of the S&P should probably go into hiding.  President Obama is breathing a huge sigh of relief because the public will no longer only associate the market meltdown with his lack of leadership.  History will show that Deven Sharma, and his quest for fame and power rocked the market and caused millions of people around the world to lose trillions of dollars as well as their jobs.

It would be one thing if the S&P Credit Agency had any credibility by downgrading US sub-prime mortgages back in 2007.  But no.  They rode those security to the ground with their investable grade rating.  With an already frustrated public and a weak market after the debt ceiling debacle, it is absolutely low quality to go ahead and downgrade the US sovereign debt rating on a late Friday evening on August 5th after the market closed.  The S&P had already been in discussions with the White House and Treasury Secretary Geithner, and for the sake of their “principals”, they spat in our political leader’s faces, as well as our faces and downgraded anyway.

EVERYBODY IS PORKED FOR NOW Read more…

As the markets were melting down this past week I decided to go watch the World Champion San Francisco Giants beat up the lowly Arizona Diamondbacks in the middle of the day.  It’s quite a treat to watch every game this season because of our current world champ status.  Next season, we’ll be just another team, trying to figure out our way back to glory.

At $80 a ticket, access doesn’t come cheap, but with the ticket comes all you can drink cervezas.  Besides, 1pm games are the best on sunny days.  Might as well go!  When my friends and I got there, we were shocked.  The stadium was absolutely PACKED!  We are talking 40,000 people enjoying a baseball game in the middle of a work day.  See picture above.

I thought about it for a second and came to the realization that the reason why 40,000 people can spend on average $50 per ticket during the middle of the day is because despite the market meltdown, we all have job security or don’t need to work because we have the disposable income to spend.   With a sample set of 40,000, it’s obvious that the economy will be just fine and that unemployment is actually better than what the media drones on and on about.

Think about it.  If you were broke, you’d just stay at home or go to a bar and watch the game on TV for free.  If you were worried about your job, you wouldn’t ditch the afternoon to go watch a game.  You’d be working your tail off and trying to add value.  If you were unemployed, you aren’t sweating it because you’re getting $1,450/month in unemployment income for 99 weeks.  Spending $50 might be more wisely spent elsewhere, but it’s sunny, and it’s the SF Giants we’re talking about!

People have more money than you know.  Why else do you think companies like Apple, Prada, and Tiffany’s are doing so well?  I went to visit my friend’s new place this past weekend and it was awesome!  They had been living in a quaint 1,300 square foot apartment for the past several years and now own a 5 bedroom, 4,600 house on a half acre in one of the most prime areas for $3.3 million!  He said he wasn’t looking to buy, but couldn’t pass up such a good deal when he was able to sell some of his start-up company shares.  Not bad for a guy in his mid-30s just 5 years out of business school wouldn’t you say?

Don’t listen to media schadenfreude about how bad unemployment and the economy are.  They are just bitter they are tied to their desks and can’t come out and play.  I’ve got my finger on the buy trigger come flash crash, Moody’s/Fitch credit downgrade, banishment of US treasuries by foreigners and political gridlock.  And, I’ll bet you a hundred bucks that the rest of you are thinking the same thing as well.  Why?  Because you’ve got the cash baby!

Readers, do you believe the economy is better than perceived?  Do you have some some positive anecdotes you can share with the rest of us?  What could be some pessimistic viewpoints with my story for all you Debby Downers out there?

HIGHLIGHT POSTS FROM AROUND THE WEB Read more…

One of the key decisions in deciding what car to buy is assessing how much all the other costs are that come with ownership.  Having a car payment isn’t considered an ownership cost because you don’t have a car payment.  Taking out a loan with any interest rate other than zero on a depreciating asset makes no sense.  Given that you earn 10X the value of the car based on the 1/10th rule, you should never have a problem paying cash for a vehicle.  To not do so means you simply can’t afford the car.

There are two main ownership costs to consider: maintenance and insurance.  For new cars, maintenance costs are quite minimal, unless you have a lemon and have to waste all your time going to and from the dealer.  For used cars, maintenance costs are a much bigger issue that can quickly eat into any savings you’ve made from not buying new.  We can talk about maintenance costs in more detail in another post.  For now, let’s talk about insurance costs.

I received my semi-annual car insurance premium bill the other day, and I was pleasantly surprised to discover it only costs $285 every 6 months to cover Moose.  However, by not telling you the full details of what $285 gets, it’s hard to understand whether $285 really is good value.  Let’s breakdown the line-items to better understand what car insurance options I get for my money.

UNDERSTANDING CAR INSURANCE OPTIONS Read more…

The debt relief industry doesn’t really have the greatest reputation for some reason or another.  Perhaps the reason is because we secretly harbor resentment for people who get in way over their heads and look for solutions other than paying off their debt!  When you can solve your debt situation yourself by begging, pleading, calling your creditors to come up with a repayment program, why would you let a debt settlement company charge exorbitant fees?  If you make your case strong enough, you might even get the credit card company or the bank to forgive a portion of what you owe!

Thanks to the horrendous economy in recent years, consumer debt levels have risen to alarmingly high levels.  From buying that new car you shouldn’t have, to big screen TVs that ruin the feng shui in your bedroom, to luxury clothing with 95% margins that never get worn, to nice vacations which you think you deserve, to $100 meals per person, people’s consumer debt has blown up in a bad way.  Never fear though!  With the government ready to bail you out with incredibly long unemployment benefits, free money for your mortgage, and credits for paying on time (shouldn’t you do that anyway?), some consumers will be alright.  But for others, in come the debt relief companies to save the day!  Maybe.

The Issues With Debt Relief Companies Read more…

We’ve all been Socialists once, and will likely all be Socialists again.  When we were growing up, we had to depend on our parents to survive.  They redistributed their wealth to care for us helpless kids.  Therefore, it’s with great dismay when I see kids and teenagers disrespecting their parents.  Without them, they’d be nowhere.  Kids need to listen to their parents, thank them for all they’ve done and give back when they can.

When we retire, we depend on government through Medicare and dependable Social Security to take care of us since we likely haven’t saved or invested enough to care for our own.  You’d think it would be rational to save a good percentage of your money every year, so that after 30 years you’ll have millions of dollars, but example after example says otherwise.  The government redistributes wealth from the richer working population who likely won’t need Medicare and Social Security and funnels their income to you.  Therefore, it also dismays me when people who receive support from the government debase the rich for not paying their fair share.  They are paying for you as money doesn’t come out of thin air.

WE’RE ALL EQUAL AND DESERVE THE SAME LIBERTIES Read more…