Financial Samurai

The luckiest people on earth are those who don’t make a lot of money.  They’ve got very little downside and can really pursue their childhood dreams.  Imagine if from the moment you graduated college, you landed a plum corporate job that paid just enough to keep you motivated, but not enough to enjoy your freedom.  The longer you work the more you realize there’s really no escape, because there’s simply too much at stake.  This is the problem that plagues my friend, Lyndon.

THE STRATEGY CONSULTANT WHO MAKES BANK Read more…

The average tax refund is $2,400 a year, and 74% of Americans get a tax refund. I’ll consider you average for argument’s sake.  At today’s typical savings rate of 1%, you’re missing out on a whopping $12 bucks in interest income! Why $12, and not $24? It’s because you have to calculate the average balance of the year if you saved every $200/month payment diligently starting January 1st i.e. January $200, February $400, March $600 etc.

I’m definitely not a proponent of giving the government more money than they deserve, but missing out on $12 bucks in interest is something I can live with and so should you.

You have to ask yourself whether you have the discipline of saving that extra $200 a month, or using it to pay down debt. Most people are not disciplined enough to pay down debt and avoid buying junk. This is why we have such massive debt problems in the first place!  The government is essentially helping you “go broke to win big” by protecting 75% of American tax payers from blowing $2,400 a year without even knowing it.

A SIMPLE GUIDELINE & SOME COOKIES Read more…

Craigslist is such a fun place to surf and save money.  I’ve sold a lot of junk, found some last-minute tennis partners, and even purchased some cool retro Air Jordans on the site.  There’s a sale everyday on Craigslist, hence why would you ever pay full retail?

I admit that I’ve clicked on some of the “Personals” section links in the past for fun (you know you have to), but no “Woman Seeking Man” post is funnier than the one you are about to read (originally posted circa 2007).  The great thing about the post is that it’s all about personal finance!

Thoughts That Crossed My Mind When Reading:

Can’t live with them, can’t live without them.

Does she really think her first post wasn’t a little over the top?

Wow, she is a woman who knows what she wants!  Sexy.

So this is where gold diggers roam.  Must take notes.

Damn, that guy is funny, but what a prick, no wonder why I didn’t major in finance.

KAPOW, good counter, but why does she have to talk about receding hairlines, that hurts.

Is the counter response someone else?  “She” writes a lot, and needs to type shorter paragraphs.

She has a trader boyfriend already!  What’s she doing seeking more men?!

Hmmm, better find a way to make more than $500K a year!

Enjoy and happy first weekend of the decade!

WOMAN SEEKING MAN: “What Am I Doing Wrong?” Read more…

Hope everybody had a wonderful Christmas!  We spent time catching up with family and exchanging small gifts.  Nobody went overboard on spending, which is exactly the way we all like it.  My parents have a penchant for re-gifting things from many years ago, and most of this year’s presents are no different.  One of the boxes contained 15 year old polo shirts that emitted a strong scent of moth balls!  I will cherish them forever, or until they fall apart, whichever comes first.

Our family realized early that buying presents for each other was quite unnecessary after we kids grew up.  We therefore made an unspoken pact to gift each other things with no effort or pretense.  In fact, it’s almost become a game as to how much of our used stuff we can offload onto each other!  I gave a couple over-sized shirts from 2003 to my father, and a packet of dried plums to my mother.  We all laughed at our gifts and took some happy photos.

Our idea of Christmas is the reunion of family.  We’re a family that’s constantly scattered throughout the world, and when we get to reunite, we don’t waste much time giving gifts.  Instead, we talk stories over meals, lots of meals that test all our dietary New Year’s resolutions.

May none of you have to go back to the office until Monday, January 4th or work too hard if you do!  We’ll be coming out with some fun short posts for the rest of the year since it doesn’t seem like too many people are around.  Happy Holidays!

Related Post: “Losing Your Way To More Money” (If you want to lose weight, you should read about my 6 month experiment.  Only one thing matters and it’s not exercise!)

Keiju,

Financial Samurai – “Slicing Through Money’s Mysteries”

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A reader e-mails in, “FS, I’ve just had one of the worst freaking days of the year today at work. I’ve been busting my butt for this one client for the past 6 months, and when it was time to do their semi-annual review, we actually got worse in their ranking. To add insult to injury, they also provided some negative feedback, and I’ve known this client for so long. I thought we had a good relationship. I’m so mad because I’ve spent double the effort on them this year, and went backwards. They aren’t even a big client! What would you do? Thanks, Frustrated.”

Hi “Frustrated”, I’m sorry to hear about your situation. I’ve been there before, many of times, and all I’ve wanted to do was give up and yell. What’s important is to NOT act emotionally. Go for a walk, grab a drink, and take some deep breaths before you e-mail/call the client or discuss the issue with your manager. Too many times, people write things they don’t mean in the heat of the moment and end up regretting their actions. You must go about this in a rationale manner.

5 Suggestions For Handling A Difficult Client: Read more…

A reader writes in:  “FS, not sure if you heard the news, but Ken Lewis is stepping down as CEO of Bank of America by year end!  My colleagues and I work for a boutique bank, and were all hoping Ken would go on an acquisition binge again and take us out at a huge premium just like he did with Merrill Lynch.  What are we going to do?  A couple of us have already made plans to buy nice presents for our wives this Christmas on hopes that big Ken would show us the money!  Who do you think will be the new Ken to take us out?  Thanks, Jeff”

Slicing Response: Hey Jeff, we heard! We consider Ken Lewis to be one of America’s greatest Empire Builders of this century.  After swallowing Countrywide Financial, Ken’s decision to pay $50 billion for Merrill Lynch BEFORE the market opened when futures showed a 5% decline, rather than AFTER the market close was amazing!  What’s overpaying by at least $25 billion more among shareholders?  Ken was a great hero to thousands of Merrill employees for bailing them out.  Ken was also seen as the savior for many others in the industry who knew that so long as there was someone out there paying huge premiums, there was a chance at striking it rich. Read more…

One Big Family

Someone once said, “nothing is certain except pressing the reply all button by mistake and taxes.” How true the saying as we face rising taxes under the new administration.  Supposedly 32% of Americans filers pay ZERO TAXES!  I doubt this statistic sits well with the other 68% of files who pay taxes.   I also doubt the percentage of non-tax payers could be that high, but either way, even 15% is a lot.  The good thing for high income earnings is that the highest marginal tax rate has come down by almost half  since the 70′s.  Furthermore, generally if you are paying no taxes, your adjusted gross income is less than $8,350 as a single, or $16,700 as a married couple.   Wouldn’t you rather make more money and pay taxes than make little money and pay nothing?

Given we don’t blog for a living, and several readers asked me this afternoon “whether I think higher taxes lead to Socialism in America, Yes or No only”, my answer and thesis is therefore: “Yes, higher taxes do lead to socialism in America.” Read more…

Question: A reader shoots me an e-mail and asks, “Sam, how’s it going man? I just found your blog searching for diamond engagement rings and I want to thank you for your “Bling Bling” article. I’m wondering, what size rock do you think I should get for my woman? I ask because she makes literally 5X more than me, and is a Senior Vice President at one of the major retail companies.

She has over 100 people working for her in the marketing department, and I’ve seen her crack the whip on others before, and it’s scary! However, when she’s with me, she’s a completely different person. A jokester, goofy, and SO caring.

I love her to death, and I want to give her the best. But, I’m a middle school teacher, and only make $47,000 a year! I can maybe spend $10,000, but that’s going to be really tight for me, and basically wipe out my savings. We’re both in our mid 30′s and have been dating for over 5 years now. Thoughts?  Thanks! John”

Response: Hi John, thanks for your e-mail inquiry. Welcome to Financial Samurai! First of all, I want to commend you for being a school teacher. The state should be paying you guys the big bucks, and not Andrew Hall from Citigroup his $100,000,000 bonus! There are several ways to answer your question, so let me offer some suggestions. I asked your question to a number of my female friends today as well so I can give you a balanced answer. Read more…

QUESTION: Tim, a reader sends in an e-mail asking, “RB, I have a friend who is notoriously cheap. Whenever we go out to eat with a group he disappears to the bathroom when the bill comes. Whenever we go out drinking, everybody buys a round of drinks except for him. What should I do? The last bill came out to $100 each from $70 because he and his wife disappeared! And why is it that every time we go out with clients together he never volunteers to put his corporate card out? He drives an expensive car, and always has expensive threads so why am I always stuck with the bill? It’s so frustrating!”

RESPONSE: Well Tim, I have to say that your friend is a 100% cheapskate, and you may want to stop inviting him out or doing anymore joint client events together. He is taking advantage of your kindness, and your willingness to let things slide. As far as I’m concerned, you can equate his lack of contribution to stealing. The next time he goes to the bathroom right before the check comes, just simply take your time and wait until he gets back to pay his fair share. Better yet, follow him to the bathroom, shake one out, and return together. He can’t escape! Read more…