Financial Samurai 2012 Predictions Recap

IMG_1347Another year has come and gone. Hopefully, all of you have made strides with your finances and your personal lives. Financial Samurai would be a failure after writing ~250 articles in 2012 if I wasn’t able to help you save more money, invest better, take more calculated risks, and take one step closer to achieving financial freedom.

2012 will go down as one of my most defining years because I managed to break free from the corporate world. There’s no doubt I would still be taking a 7:15am bus to work if it wasn’t for launching this site. It feels exhilarating to start anew!

It’s going to be tough to match the accuracy of my 2011 predictions because I was off by only 0.5% with my Dow Jones Index target (+5.5% instead of +5%). North Korea’s Kim Jung Il passed away as predicted as well. No, I do not work for the CIA. But, maybe I do. You don’t want to know.

I have not revisited my predictions for 2012 until the writing of this post so I’m curious to see what was on my mind one year ago. December 2011 was still a time of disarray, with 8.5% unemployment, tremendous uncertainty in Europe, the Occupy Everything movement, and a US President whose hopes of re-election loomed on a improving economy.

Here’s to looking like a Big Donkey or a Small Donkey!


There Is No Monopoly On Being Rich

Oakland Bay Bridge SunsetI’d like to think most of you come here because you have a desire to improve your finances, hang out and connect with like-minded folks, and get entertained. Despite some rather highly opinionated posts, there’s not a lot of nasty comments at all.

I am a perennial optimist. Sprained ankle? Thank goodness it’s not broken! Ever since I was about 12 years old, I knew I did not want to be poor. Seeing ubiquitous poverty growing up in third world countries makes me appreciate how lucky we are to live in America.

It was in the 9th grade when a senior told me to stop messing around if I wanted to have a better life. And it was the first month of work that I told myself if I could just survive these brutal 5:30am-7:30pm+ workdays for the next 10 years, that I would be rich.

Thirteen years later, work is but an option. The biggest irony is that in order to stop caring about money, you first have to care a great deal about money. I could have worked for many more years and saved many more dollars, but money is no longer a driving force. I’d much rather have the freedom to do what I want.

It’s been three and a half years since I first started this blog and I’ve encountered a plethora of different attitudes about wealth. Some people believe it’s their destiny to remain poor while others have an unwavering desire to make it big beyond their wildest dreams. If you believe you will always be poor, then that is what you will be. If you believe you deserve to be wealthy, you have an infinitely higher chance of succeeding.

There is no monopoly on being rich. You don’t have to be angry at others who have more. You’ve just got to be confident that you belong and survive long enough to succeed.

Everything will be alright in the end. If it’s not all right, then it is not yet the end.” – Unknown

Related Posts:

A Day Job Is So Much Easier Than Entrepreneurship

In Search For Empathy For The Unemployed

I’m Not Supposed To Be Here… 

Photo: Bay Bridge Sunset, SD.




Overcoming The Price Hurdle To Find Value And Succeed

Priceless Crowns At Rosenborg Castle, Copenhagen

We all know that it takes money to make money. If you want $10,000 a year in passive interest income at a rate of 2%, you’ll need $500,000 in capital to get there. If you’ve only got $25,000 in capital, well then here’s $500 a year, just enough to buy yourself a round-trip ticket to Hawaii. Wait a minute, that doesn’t sound too bad!

I’ve been highly anticipating the response to my introductory $980 Get On The Map (GOTM) service where I help bloggers and small businesses get noticed on the web. There’s a lot of art behind the science of pricing. Price too low, and you might be signaling an inferior product or fend off too much demand. Price too high, and you might not get any clients. Finding the intersection between marginal utility and marginal cost is a journey that changes over time.

Going about pricing a product out of the necessity of money vs. the necessity for fulfillment is quite different. I get fulfillment out of helping others by providing more value than the price I charge. That’s what keeps me excited. If I had to sell something to put nutritious McDouble cheeseburgers on the table for five children everyday, I’d feel the heat, underprice and likely provide poor value.


Learning From The World’s Happiest People

Our tour guide in Stockholm was not Swedish, but Albanian. She stood 5 feet 1 inch tall thanks to three inch heels. As we walked towards Old Town to see the Royal Palace, I often wondered whether she had ever twisted her ankles traversing the uneven cobble stone roads.

Bianca told us she’s a full-time lawyer who enjoys playing tour guide on the weekends as a part-time job. She’s been studying for six years and is getting a second Masters degree in international law. When I asked her how much tuition costs in Sweden, she surprisingly mentioned, “Free!

All citizens and EU residents have free tuition if they want to study university here in Stockholm, Sweden,” Bianca went on to say.

I can’t verify the veracity of her statement, however, with law school tuition commonly over $35,000 a year in the US, Bianca clearly has a good deal!

I love everything about Stockholm! We have 1/3rd parks, 1/3rd water, and 1/3rd land. The government cares about us and you don’t have to work very hard to live a good life. Back home in Albania, the average person only makes 300-350 Euros a month ($390-$450 dollars),” Bianca explained.

I asked Bianca about the local tax rates. She didn’t know for sure, but said she pays about a 32% income tax through the Pay-As-You-Earn (PAYE) employer witholding system. She also pays a 25% VAT tax (consumption tax) on all goods. I was expecting Bianca to highlight a much higher income tax rate since 32% is similar to my effective tax rate, so I was surprised. But then again, our income levels are drastically different as you will discover below.


I’ve Seen The Future And It Looks So Bright

Copenhagen Sunrise

Part of creating great wealth and happiness is anticipating the future, understanding the future, betting on the future, and adapting to the future.

With President Obama in power until 2016, he can be more aggressive with his policy initiatives given he no longer has to compete for another term. If Obama gets his way, taxes will go up for higher income citizens, government spending will go up to help care for our most impoverished, debt will increase, and more people will be saved from the perils of capitalism.

In other words, America will become more like Europe. We just need to be careful not to be Europe in its existing form where too much debt torpedoes our entire economic livelihood. But even if we go overboard, there will always be the Federal Reserves of our greatest nations to help us out. As the world police, they owe us!

Given America is becoming more like Europe, I decided to go to Europe and see for myself what our future might be like. You thought I was just going on a 2.5 week vacation to inject $10,000 into the Eurozone to help save the world didn’t you? Au contraire mon frere. My main purpose was to conduct some front lines investigative reporting to provide readers with unique, real-time insight into how to live and prosper over the next four years!


Zynga Rejected My Application So I Unleashed The FURY!

One thing I plan on doing in retirement is find a potential encore career.  As a computer and internet junky who has built up a reasonable size blog, a foray into the social media sector seems like a natural extension.  I want to make sure that I exhaust all options before I really kick back and harass my father on the golf course a couple times a week.

Applying to positions is so easy now thanks to the internet and LinkedIn.  It takes around five minutes per online application and you will get an e-mail confirmation immediately after pressing send.  For those who don’t know, Zynga is an online social game maker of Farmville, Words With Friends, and other names that rely predominantly on Facebook’s user platform to make money via ads and virtual goods.

Given I’ve been reminded about Zynga with Mark Pincus’ handsome face all smiling down below in my post, “How The Rich And Powerful Become More Rich And Powerful,” I figured why not shoot them an application despite their horrendous reputation for long work hours and ruthless management..  I didn’t talk to Mark at Marissa’s party, but I did swing by their sweet offices once in the SF Design District.

For most of June and July, Zynga’s stock hovered around $5 a share, a 65% decline from its recent March 2012 high of $14.20.  I figured in my ever optimistic self that it was better to get options at $5 than all the poor folks who joined earlier in the year at much higher levels.

And so, between scrubbing my chiseled pecs during bath time earlier this month, I submitted my application.  A couple weeks later I got this rejection letter:



So You Want To Be Rich Eh?

Palace of Fine Arts San FranciscoIn “How Do You Become Rich?“, Finance Fox pens a 1,200 word post on what it takes to reach the promised land.  I immediately checked out the post because I’m always fascinated about how others define rich and how others plan to get rich.  Eddie’s definition of rich is “having a fortune over $1 million bucks.”  $1 million bucks is a good amount of money, but at what age?  At 35, that’s pretty darn rich.  At 70, not so much.

Eddie then goes on to ask what is the secret of successful rich people?  My answer is almost always, PERSEVERANCE.  The ability to solider on and not give up even in the worst moments.  Every single wealthy person I know has had some tremendous disappointments in their lives, but they don’t stop trying.

The more critics there are, the greater the wealthy person’s fire is to succeed.