Grab Bag Weekend: The Woman I Love Is So Powerful!

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.

Grab Bag Friday: Alligator Arms


QUESTION: Tim, a reader sends in an e-mail asking, “Sam, 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!

Be Your Own Venture Capitalist & Build A Broad Portfolio

By the time Baidu, the “Google of China” went public, Venture Capital firm Draper Fisher’s 28% stake was worth over $1 billion dollars by the end of the trading day. Not a bad return considering their likely sub-$50 million investment just years ago! In a world full of strikeouts, it just takes one home run to win a ball game.

The Financial Samurai reader is savvy enough to know that strong work ethnic and good morals are key pieces of the success puzzle. Sometimes you just need to be in the right place at the right time. When Venture Capital firms fund startups, they are looking to take equity stakes in companies in a robust industry, lead by visionaries who can execute towards enormous profit potential. The majority of investments go bust, and the successes often take years and tons of selfless involvement before returns are seen. Eventually, the exit strategy is for their investment to get acquired or IPO.

We have the opportunity to be our very own individual venture capitalists everyday. Many of us may take for granted the people we meet, but not you. After all, all it takes is one billionaire to give you one million dollars before you’re rich right? Receiving an opportunity is what it’s all about. You’re reading this post essentially because like me, you want to be financially independent sooner, rather than later. The ability to be financially independent by 40 is the reason why we work so hard now. If the deadline was 20 years longer, where’s the fun and challenge in that?

Diamond Engagement Rings Bling Bling!

One of my good friends is getting married, and he asked me, “Sam, what on earth am I supposed to get her for an engagement ring?” What a question, that’s not easily answered.  Generally, the right answer is “whatever she wants“!  However, as we all know, sometimes ladies are harder to read than a children’s book in large print!

Before we begin, if any of you single guys out there want to attract the ladies, bust out the turquoise diamond ring guide book from Tiffany’s in any public space. The white book from Cartier will also do. I take the bus to work everyday, and I remember as soon as I took out the book from my bag, every single lady on the bus looked over. Just think, one of the great pick up lines to a staring woman could be, “Excuse me, but my friend asked me for his advice on this particular design (point to book), what do you think?” Clearly, if you use this line, you should not be proposing!

In the spirit of personal finance, let’s discuss some tips for buying an engagement ring.

The Value of Happiness & Lessons From a Frugal Wife

I have a small “trading account” which lost about 22% of its value this week being levered short. Not exactly the greatest feeling since this week basically wiped out all my hard work in this specific account for the year. But, to put things in perspective, it’s a relatively small loss compared to the 10X amount I have long in my 401k and company stock, not to mention my natural long position given my career in finance. Better to have lost money shorting the market than longing the market, because at least I know the world is improving. The way the market keeps going up (7.5% this week), we’ll all be millionaires in no time, and I will definitely be retired by the end of this year!

Despite the loss, my grief was overshadowed by the happiness I felt on Wednesday, Thursday, and Friday making my wife happy. You see, Thursday was her birthday, but I gave her one of her presents early on a Wednesday. It was a DSLR Canon EOS Rebel camera she had been eyeing for years, but too shy to buy. I wasn’t planning on buying it for her, but when I lost a multiple of that in the trading account that day, I said why not! Better to spend money on something, especially for the wife, than flush it down the drain! She was SO HAPPY when she received her camera, I couldn’t stop smiling. It was as if she was a school girl again, who got a pony.

Thursday’s gifts consisted of several of her favorite DVDs (she loves the used 3 for $20 DVDs from Blockbuster) and a cool exercise outfit from LuluLemon. On Friday, we went out to dinner at one of her favorite restaurants, and surprised her again with one of her favorite desserts, flourless chocolate cake with whipped cream. Yum. My wife has been on a spending moratorium for the past 3 months. We both promise each other we won’t buy any material items for 3 months leading up to our birthdays as a way to avoid gift sabotage, and save money.

FRUGAL WIFE = FRUGAL HUSBAND

If the devil asked me whether I could have One Beeeleon dollars and no wife, or my wife and no billion, I’d choose the wife in a nanosecond. Hence, the value of my happiness and wife are worth at least $1 billion! The amazing thing is, she doesn’t need much and is one of the most frugal people I know. She brings her breakfast and lunch to work at least half the week to save money. She doesn’t spend hundreds (thousands?!) of dollars on uncomfortable designer shoes and handbags which cost more than the stuff in them. Meanwhile, her favorite places to shop are not Nordstrom’s and Barney’s NY but Walmart and sometimes Target if she’s feeling a little opulent. Yet, she rarely shops and finds it a treat if she can go to Target once every 6 months. Target so happens to be 16 miles away in a town which houses a legal card room and 10 auto dealers. Doh. I have a feeling that because she knows my vices, she never asks me to take her.

My wife is the one who tells me each year she’s happy with the car we have so no need to buy another. And every time I do buy another car (see earlier entry), she tells me she really likes the car because I really like the car. I have a feeling out of the 8 different cars I’ve had in 10 years, her favorite is the $6000, 1997 Honda Civic we drove back in 2005. Her frugality is a cornerstone of our finances, which has happily led us to live below our means and save for our future.

It’s a funny thing when the person you love, be it your brother, mother, sister, girlfriend or wife wants so little. All you want to do is give them the world. And yet, the opposite is true when they want too much. So much is said about finances coming between couples, generally because one spends too much and the other resents it. If you’re the side that’s spending too much, perhaps try spending some of that on your better half? She might stop resenting you! And if you’re the side that is frugal, try spending money on your worse half and at the same time, spend nothing on yourself. Unless your worse half is a bumbling clueless idiot, he should be touched by your gesture and slowly come around so you can achieve a happy medium.

We’ll be going on our free hike this Sunday, but this time, she’ll be armed with her nifty Canon Rebel :) I’ll see if I can post a picture up on here next week.

Keigu,

Financial Samurai – “Slicing Through Money’s Mysteries”