Financial Samurai

If you look carefully around the web, you’ll read scores of articles about the desire to retire early.  Yours truly wishes to finish up no later than 45, as I believe working for 20 or so years is a long enough time.  I’ve done the math with various living and return scenarios and it can be done.  But the question is whether it’s a good idea?  Perhaps not.

Now that the economy is in recovery mode, it’ll be interesting to see how attitudes change towards early retirement.  Will those who’ve short circuited their careers feel the pull to return to full time work and maximize their earnings potential again?  I believe so.  What about all our “lifestyle design” and “digital nomad” friends who had a rough time landing something stable they truly love?  Possibly they’ll come back too.

Those who are able to retire early are often cherished.  I certainly admire those who are able to cut down their desires to the bare bones and live a very frugal lifestyle.  I also admire those who’ve been able to strike it rich very early!  That said, perhaps early retirement isn’t a good idea for the large majority of people.  Let’s explore several reasons as to why people want to retire early, why they exist, as well as understand why it may not be a good idea.  Someone has to argue the other side, so it might as well be me.

WHY PEOPLE WANT TO RETIRE EARLY (IT ISN’T THAT OBVIOUS!) Read more…

In “How To Dramatically Increase Your Job Security For Life“, the article suggests managers are more inclined to fire those workers who have nobody to support but themselves.  As a result, one should strategically at least hint at the intention of starting a family to protect oneself from unemploymentville.  Clearly I’m being somewhat flippant.  My goal is to make people realize that relationships and emotion play enormous roles in shaping work success.

Whether you work for a small family business or a large corporation, hiring and firing is a very personal decision that comes down to one or only a handful of decision makers.  By tugging at their souls, and increasing their guilt factor, you’re well on your way to dramatically higher job security for life.

Let’s say you’re not particularly wealthy, nor make a particularly impressive amount of money.  You still have loads of student loans and consumer debt to pay off.  In essence, you’re the typical American!  Shouldn’t you be putting on your air mask before helping others?

Child raising is estimated to cost anywhere between $250,000 to $1 million from birth to after college.  If a family can’t even have the discipline to save 20% of their paycheck after contributing to their 401K and IRA, how can one consciously start a family?

$250,000 ISN’T A LOT, YET HOW MANY CAN SAVE THAT MUCH? Read more…

Congratulations to the Democrats for passing a smaller, less corrupt version of Obama’s health care plan to cover the 30 million+ Americans who are uninsured.  I’ve read numerous articles about the pros and cons of this plan, and I still can’t figure it all out.  An Associated Press article writes, “Obama practically needs a spreadsheet to tell people what’s going on and when.“  That said, progress has been made.  I’d like to go over some of the basics, and end with a discussion.

LOOKING OUT FOR EACH OTHER Read more…

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…

There’s a fun hypothesis saying that you are the average of the closest five people around you.  I believe this to be true, do you?  What’s interesting about the blogosphere community is that anybody with enough intention can start a website.  Some are interesting, some are not, but regardless we can all compete with the ProBloggers and the Huffington Posts of the web in our own niche way!

Alexa is a dynamic website ranking and information company owned by Amazon, which has over 40 million users world wide.  The tool bar is free, and easy to download.  The Yakezie Alexa Ranking Challenge is straight forward.  If you’re outside of the top 200,000, get in the top 200,000 within 6 months.  I can’t even name 100 sites, let alone 199,999 sites.  Can you?  If you’re already in the top 200,000, get in the top 100,000.  And if you’re already in the top 100,000, get in the top 50,000.

There are some who poo poo the Alexa ranking system, and I recognize their two main arguments:  1) The system only tracks visitors who have the Alexa Toolbar installed, and 2) There are cases where some websites with bazillions of users have a worse ranking than sites with less users.  We don’t know why, because we don’t fully know what goes into the calculations.  It may be because readers don’t visit and just read off their RSS.  That said, the Alexa ranking system continues to grow, and is the best system we got.  At least 40 million webmasters around the world think so, and there has to be something to it if Google, Facebook, Yahoo and YouTube are ranked #1, #2, #3, and #4, respectively.

Since starting this site, I’ve been rejected as a guest poster, didn’t even get responded to, let alone make it as one of the 7 finalists for one site’s staff writer tryouts, denied admission to a personal finance blog network, and even got my first carnival submission rejected.  But through all the rejections, I took comfort in my friend, Alexa, who is always by my side motivating me to keep going.  I’m sure many of you have been rejected as well.  Here’s your chance to create our own network of powerful friends by joining in on the challenge!

BENEFITS OF BEING IN THE TOP 200,000 Read more…

If I read one more biased article pushing people to convert to a ROTH IRA I’m going to lose it!  Not to be melodramatic or anything, but the lack of unbiased analysis is like seeing a sea of zombies instructed to walk off a cliff. Wake up zombies, wake up!  Don’t make a decision without seeing what lies down below.

The ROTH IRA conversion idea is that those who have pre-tax funded retirement accounts such as a 401K or Traditional IRA pay taxes UPFRONT, so as to not pay taxes when you retire.  This is just absolute hogwash donkey dumb for a large majority of people out there.

Proponents of the ROTH IRA conversion argue:

1) Tax rates are low and are just going to go up in the future.

2) You will likely make more money in your retirement years, and hence pay more taxes.

3) Paying taxes now improves performance in the long run all else being equal.

THE SAMURAI REBUTTAL: Read more…

With great pleasure, I announce the launch of The Samurai Fund!

Thesis: Through random selection based solely off permutations of reader’s names (personal or site title), we are able to create a long-only mutual fund that will outperform the S&P 500 index!

Fund Details: $1,672,003 billion launch, $100/share NAV, with 17 positions equally weighted.  Concentrated multi-strategy portfolio with defensive names in the alcohol and utility space, as well as higher beta names in technology and health sciences.  Small caps and large cap names included.  S&P 500 start value 1,115 benchmark.

Investment Outlook 2010: The stock market continues to rebound, but at a slower pace.  Inflation and interest rates remain benign, leading to a re-emergence of consumer spending.  Housing stabilizes with 30-year mortgage rates staying below 6.5%.  The government maintains record spending to stimulate the economy and the unemployment rate begins to fall in the second half of the year.  The S&P 500 increases by 10-15% with a blue-sky target of 1,322.

Duration & Rules: One year.  The bottom 3 performers will be up for review every quarter. To stay in the fund, one must write a convincing argument as to why we should not cut our losses.  Picks down more than 20% also will be re-evaluated.

Goals: To have fun, learn something about the stock markets, prove a theory that luck plays a big part in performance, and to build better relationships with the community.

Contributors: Please retweet and spread the word to any of the social media sharing sites below.  We need all the support we can get to outperform the professionals!  Contributors are encouraged to provide updates and commentary as the months progress.  If anybody wants to do a portfolio analysis below, please feel free to do so!

*** STOCK PICKS SUMMARY WITH CONTRIBUTORS *** Read more…

Raging against the machine is in my nature.  It annoys me to no end when I read about injustices such as government raises during our recent implosion.  I once skipped a morning of work to demonstrate against an apparel company which used racist slogans.  Up yours Abercrombie!  As I age, I’m discovering a more peaceful side that just accepts things the way they are.

There’s a lot of messed up things in the world such as war, poverty, and corruption.  Some things we can try to explain, and some things we can’t.  And yet, I wonder if every irrational thing has a rational reason?  Let’s look at some examples and decide for yourself.

The Kid Who Just Wants To Have Fun

Everybody knows that grades start accumulating in the 9th grade, and without good grades and SAT scores, the chances of getting into a good college, and therefore landing a desirable job goes down.  Is it really so bad that Johnny High doesn’t go to Yale, and become a rich physician?  What’s so bad about community college and working for $20,000/yr at a dead end job which he enjoys?  Nothing at all!

Johnny High’s decision to not study hard in high school is perfectly rational.  He chose to have a whole lot of fun, while other kids were miserable studying and participating in extracurricular activities to boost their resumes.  When he’s 35 years old and still working at his job with the same salary, he’ll think back at all the fun he had in high school and smile.

Who’s to say that being a multi-millionaire physician and going to Yale is good anyway?  He could end up incredibly miserable, with tremendous amounts of anxiety everyday as a doctor. Instead, Johnny High chooses to live a more relaxing life, and doesn’t care about money.  If he did care about money, he would have studied harder.  And if Johnny starts to care about money, he may go to grad school and give himself another shot.

The Lady Who Loves To Eat Read more…