I’ve argued in the past why some of you may not feel wealthier with stock markets at record highs, but that was 15% lower ago! The S&P 500 is poised to have one of its best risk adjusted returns in history if it closes above 1,800 (+27%) in 2013. Besides stocks, housing prices are up double digits for the nation. If you own stocks and real estate, you should be feeling richer right? Maybe, maybe not.
Everything is relative when it comes to our finances. In a bull market, the wealthy get way more wealthy than the average person. Even if your $300,000 portfolio is up 30% to $390,000 this year, that’s nothing when Warren Buffet is up $10 billion! Who cares if your $800,000 house appreciated to $1 million when some 23 year old rejected a $3 billion cash dollar offer for his photo messenger app. Ah, the unfortunate curse of financial comparisons.
I’d like us to do some financial reflecting as the year winds down. It’s important we review our asset allocation every year and figure out how we feel about where we are to make future allocation decisions. It’s very hard to ascertain our risk tolerance without getting a little personal.
TWO PARTS OFFENSE, ONE PART DEFENSE TO MAKE MONEY Read more…
New 50″ LED TV with old CRT TV In Reflection
It occurred to me that getting a guaranteed price match might be easier than the five steps I outlined in my holiday shopping strategy guide post. I ended up going to Best Buy three times to deploy my savings strategy on the electronics I bought for my parents.
Trip One: Bought a 50″ LED SmartTV for $799, a soundbar for $249, and a Chromebook for $199 pre-tax on a Tuesday before Thanksgiving. Best Buy return policy is 15 days, so I was all set to try and take advantage of the price match during the Black Friday weekend sales.
Trip Two: Went back on Thanksgiving Thursday at 11:50pm after a poker game to get a 32″ LED TV and blu-ray player on sale for my mother and also see if I could get a price match for the 50″ LED SmartTV which is now on further sale for $599. They said, “no” which I had anticipated since Best Buy’s policy is to not price match on Black Friday, but unclear on the entire weekend sale. I was not deterred because they often say yes later on because I can simply return the product and argue for the cheaper price within the return policy. Besides, I had more stuff to buy this trip.
Trip Three: I was going to go back on the Monday after the Black Friday to try again on the 50″ TV and also price match anything I find on sale from Cyber Monday. But as luck would have it, I played golf on Sunday afternoon after Black Friday just a couple miles away from Best Buy so I did a drive by on the way home. Best Buy thankfully agreed to credit me $209 after tax for the 50″ LED SmartTV and I also returned the blu-ray player because it couldn’t connect to the internet. I also returned the chocolate HDMI cable for $38 and got a generic one for $9.95 because I’m connecting the blu-ray to a 32″ TV with no add-on sound system. Paying up for a fancier HDMI cable would therefore be a waste.
Despite making one extra trip than anticipated, I’m happy to have gotten the best deals possible for products I needed to buy for my parents anyway. Thankfully Best Buy was relatively quiet all three times I went. It was about time my parents upgraded their old notebook and 25+ year old CRT TVs. The biggest pain was actually trying to carrying those beasts out to the garage!
LEARNING ABOUT A NEW PRICE PROTECTION PLAN Read more…
There’s an old saying that one should, “Make hay when the sun is shining.” When I was in my 20s I had two modes of work ethic: 1) Work hard and 2) Work harder. I’d wake up around 4:30am every morning in NYC from 1999-2001 to read the Wall St. Journal before walking over to 1 New York Plaza for work at 5:30am. I knew knowledge was power and I had neither.
After the 10 year mark, I began to burn out. Perhaps all the traveling, stress to perform, ridiculous market cycles and business school classes while working started taking its toll. I did everything I could to increase financial returns when the times were good because times would eventually turn sour. When times were bad, I felt I needed to work harder so as not to fall too far behind. People were getting fired left and right back in 2001-2003 and 2008-2012.
Ask anybody who has worked on Wall St. since the late 90s and they’ll tell you that 2007 was the last great compensation year. It’s been downhill ever since. There was no longer hay to be made, even if we are reaching new highs in the stock market. I woke up to the realization in 2010 that the outsized returns in finance were over, at least for the foreseeable future. So instead of complaining about working harder and getting paid less each year, I got out in 2012.
A CHANGE OF HEART TO WORKING HARD Read more…
We’ve discussed the curiosity of financial hoarding as well as one way in which to eradicate the disease by revealing our desires for public shaming. If we feel ashamed, we simply don’t spend as much money. Some folks found it a little strange that I find delight in getting judged for having spending desires. After all, we should keep our thoughts pure in order to reach salvation.
The truth of the matter is that my love for saving money almost always trumps whatever negativity or difficulty I’ve got to endure to save more. The pain of working 14 hour days in my 20s was no match for the joy of having more savings in the bank. The delight of making active income keeps me engaged in retirement for 2-4 hours a day despite generating enough livable passive income to not have to work. Each comment I get about being wasteful for even thinking about spending money on a new vehicle or a watch makes me happier because it reinforces my desire to save more in order to save the children.
I even sacrificed eating tons of yummy cheeseburgers from Shake Shack and In N’ Out Burger since 2000 just so I can always fit in my pair of Diesel jeans I bought for $140 on 5th Avenue in NYC. The guilt of spending over $50 for a pair of jeans at the age of 23 made me want to stay in shape forever so as to never have to buy another pair again! (Read: A Weight Loss Tip To Die For if you’re serious about permanently losing weight)
Another reason why I’m obsessed with saving money is because I’ve been ripped off one too many times. From the Mumbai taxi driver who takes the scenic route to my hotel, to the electronics salesman who strongly pushes a product despite knowing it will be on sale the next week, to borrowers who promise to pay me back but never do – I’ve been thoroughly traumatized by my money spending experiences that I figure if I never spend money, I’ll never lose!
HAPPINESS IS ALWAYS THE END GAME Read more…
Since first writing about my plans to invest more in P2P through Prosper.com, I’ve been having a difficult time mobilizing a sizable amount of assets to make a difference in my passive income stream portfolio. When I say sizable, I mean more than $50,000. The main reason is that I’m just not absolutely comfortable making loans to strangers, no matter how good their credit ratings.
I realize if I invest in over 100 of the highest rated loans, the chances are high that I will be able to earn at least 5% vs. the 7-8% advertised through P2P. But there’s something about my desire to invest my money to help someone I personally know that keeps most of my money away from P2P.
The best reason to borrow via P2P is to consolidate your debt into a lower interest rate P2P loan. I also have a soft spot for lending people money over Prosper to pay off medical bills. Accidents happen all the time, and they are usually not the victim’s fault. Every single other reason to borrow money over Prosper does not gel with my lending standards, even if the interest rate is higher. (Read: The Main Reasons To Borrow Through Peer-To-Peer Lending)
So I’m faced with the dilemma of continuously lending money to strangers at a 5-10% interest rate to consolidate their debts or lend money to a friend who started a hedge fund and is looking to build his assets under management. I’d like for you to weigh in on this decision because $150,000 is at stake.
LENDING MONEY DIRECTLY TO A CREDIT WORTHY FRIEND Read more…
Everybody has heard of Capital One’s catchy slogan, “What’s In Your Wallet?” so I decided to have a look for myself and hopefully do some comparison with all of you. Capital One was kind enough to sponsor this video post about their new Spark business credit card. Check out their seven second claymation Vine videos that highlight the peculiarities of work/enterpreneurial life.
I hate thick wallets because they are uncomfortable to sit on. If I could have a copy of my driver’s license that has the ability to act as a debt card, credit card, insurance card and identification card for multiple establishments that would be ideal. Too bad we’re still a long ways a way so I do what I can to simplify.
Here’s what’s in my wallet today:
Although the community won’t let me spend money, I still enjoy buying things for others throughout the year and during the holidays. To love is to give after all!
Like many of you, I absolutely hate physically shopping for things during sales. Places like WalMart, Target, and Best Buy go absolutely crazy! From the stress of finding a parking spot to the pressure to buy something quickly before selling out, feeling anxiety while shopping just isn’t worth it.
Shopping online is the absolute way to go. That said, I always go to the store to test out the product anyway, especially if it’s an electronics product like a TV. Seeing is believing and I don’t fully trust the quality descriptions of products written online just yet.
The following outlines my holiday shopping strategy that maximizes discounts and minimizes stress. I’d love to read about your shopping strategies as well.
THE HOLIDAY SHOPPING STRATEGY GUIDE Read more…