Golf is a taxing sport which requires a lot of practice, and a lot of patience.  The first time I played golf was in the 8th grade with my father.  Although I was the 5th wheel, I got to tee it up every hole there was a backlog, and hack it up on the site of the fairway as the men played.

I remember needing to go to the bathroom somewhere on the 6th fairway and running for 5 minutes back to the club house because I wasn’t allowed to pee in the woods.  “Pros aren’t peeing in the woods Sam, neither should you.”

With an iron stick, and a ball the size of a plum, golf is one of the hardest sports to learn and excel at.  It took me literally a year of constant play to break 100, and almost 5 years to consistently break 90.  More than 20 years later, I’ve hit a plateau and can hardly ever break 80, no matter how hard I try.

Here are the similarities between golf and life that you may enjoy.

AFTER A CERTAIN POINT, THERE’S NO MORE ROOM FOR IMPROVEMENT

1) Practice. There’s no substitute for practice and it’s not just with one club either.  You must practice all 14 clubs all the time, because all of them are needed at some stage or another.  Hit a 250 yard drive, and you’re left with a 150 yard approach on a par 4 400 yard hole.  If you’ve only practiced your driver and your sand wedge, you are sh*t out of luck.  You likely need your 7, 8, or 9 iron to stick it tight so you can two putt it in the hole.

2) Drive for show, put for dough. Everybody loves to smack a massive drive.  If you want to gain 30-50 yards on your drive, just swing harder!  Actually, it’s not that simple.  You need to be flexible, while having a strong core during your rotation.  You must hit the sweet spot, or your ball will duck hook into the woods.  If you really want that extra yardage, play on a better course in Hawaii.  The balls roll long there.

3) Believe in yourself. Golf requires incredible mental fortitude.  You must visualize the flight of the ball, including where you want it to land before every stroke.  You must believe your line is correct for you to roll the ball a foot past the hole during your puts.  Without belief, your muscles will tell, and you will fail.  Every time I stand over a five foot putt, I tell myself that it’s worth the same as a 280 yard drive so not to f*ck it up!

4) Set expectations and analyze. The reason why it took me 5 years to break 90 consistently is because I didn’t set expectations and break down each hole.  For any given 18 hole regulation course, you’ll get a smattering of par 4′s, three or four par 5′s, and another two or three par 3s.  If you shoot par, you shoot a 70-72, which is an incredible accomplishment and unrealistic for beginners.  Instead, if you break down 18 holes and expect a 5 on each, you will shoot 90.  You allow yourself a double bogie on all your par 3s, and a bogey on all your par 4s.  Do better than that on just one hole and you break 90!

5) Use the right equipment. I played with cavity back irons from Callaway for a decade just because they were the first type of irons I ever used.  Before Callaways, I used knockoffs because that’s all I could afford.  ”Big Bubba’s” if I recall correctly.  I never bothered to try something new until about 5 years ago.  Now I play with Mizuno MP-30 semi-blades which allow me to carve the ball for better accuracy.  Just by switching to irons that suit me better, I’ve dropped about 4-5 strokes on average.  Get your equipment tailored to suit your style, height, and strength.  They’ll make a world of difference!

ONE DAY, MAYBE

After 12 months of laser like focus, I got my handicap down to a 10.2 from a 16.5.  I bought new used equipment and played smart golf.  I was regularly shooting in the mid-to- low 80s (82-85) with an occasional blowup into the high 80s and low 90s.  Unfortunately, I was never able to consistently shoot 78-81, which meant that I was never going to achieve my goal of breaking a 10 handicap.  I quit for two years once the 2008 crash came and just played tennis.  So much cheaper and better exercise!

Earlier this year, my friend joined a golf club and started asking me to play with him.  I obliged since each round took only 3.5 hours now.  After shooting a 84, 87, 81, 83 and 84 from the blues, I’ve finally got my handicap to 9.9.  The question now is, do I quit while I’m ahead and relish in the achievement?  Or do I keep trying to get better with an absolutely high chance of getting worse?  It gets logarithmically harder the better one gets where fun starts going out the window.  Funny how we ask the same questions in life all the time.

Any golf fanatics out there with single-digit handicaps?  If you played just once a month, do you think you’d be able to maintain a single-digit handi?

Do you agree that after a certain level, no matter how hard you try, you can no longer improve in life?

Regards,

Sam

Finally, oil has gotten crushed!  We haven’t seen this large of a decline in oil in years as momentum speculators rushed out like someone discovering their Match.com date looks nothing like their picture!  One can say that the decline in oil prices was sparked by fears over slower US economic growth, but who are we kidding?  Someone who was long oil panicked, leading to more panic, followed by even more PANIC!!!

Perhaps the initial seller finally read, “Gas Prices Are Out Of Control And People Love It!” and spread it around.  The point of the post was actually to highlight how ridiculously OVERPRICED gas prices are given how much reported supply we have (US$1 million more barrels/day in 2011 vs. 2010).  If someone like me, who has a job and barely drives feels it, why doesn’t the rest of America feel it?  America does, and its hard for fundamentals to justify such levels.

SO WHAT NOW?

Who knows where oil prices will go from here.  Given most speculators are nothing more than momentum investors, you know that many of them who’ve been long oil have lost a lot of money.  What happens when you lose a lot of money all of the sudden?  You become shell shocked and end up doing nothing for a while until momentum returns.

It’s really too early whether the oil bubble has burst or not.  Some analysts predict oil prices will now head to $80, while others think a resumption is not to far in the distant future.  The fact of the mater is, nobody knows.  The trader in me can’t help but look to buy some oil ETFs such as USO or UCO to gain exposure after such a steep 10% fall.  But again, it’s just a hedge in case oil prices do resume their upward trend again.

LOOKING ON THE BRIGHT SIDE

I have to admit, if gas prices do start trending down 40-50 cents in San Francisco (10%), I will be ecstatic even though from a monetary stand point, it doesn’t save much much just as it doesn’t cost me much as a city dweller who takes public transportation.

If someone like me is ecstatic about a 10% decline in gas prices, then I surely hope the rest of America is as well!  A happy consumer is a happy spender.  Let Americans spend their gas savings on everything else to help spur the economy along.  For the record, I think oil/gas prices will be higher than $100 by the end of 2011 as speculators return with better economic figures in the second half.  I’ve sold in May, but I just might have to come back soon!

And now for some brilliant humor by Iman Crosson which highlights the main reason for why the commodity bubble popped. This is classic. Let’s raise them taxes on all Americans to save our budget. Two terms for sure!

Readers, do you think Osama Bin Laden burst the oil bubble? Will your “Consumer Confidence” tick up if gas prices decline by 40-50 cents? Where do you think gas prices are headed for the year?

Does WTI oil go to $110 or to $90 first?

Regards,

Sam

In good old fashion political jockeying, the House finally agreed to a budget and unknown to many, they also passed a Renters Tax!  The idea is for all Americans to participate in our simple tax system and shore up our huge deficit.  The new law states that starting October 1, 2011 all renters shall pay a Renters Tax equal to half the value of their rented home as determined by the government every year.  Landlords equally pay the other half.

Example: A nice 3 bedroom, 2.5 bath property is assessed at $500,000.  A taxation of 1.2% = $6,000 must be paid once a year.  Since the renter benefits from living in the home as well as the public parks, roads, libraries, and schools, the renter writes a check for $3,000 to the local state county tax board.  Meanwhile, even though the landlord does not enjoy any of the benefits of living in the home, s/he receives rental income, potential long term asset appreciation, and the option to move back in at his or her choosing.  As a result, the owner pays for half the annual property tax by sending in a check as well.  Perfect equality.  Both renter and owner have “skin in the game” and look to better their surrounding community.

THE GOVERNMENT BELIEVES WE SHOULD ALL PITCH IN TOGETHER

Are all renters pissed and shocked for having to chip in and help out our debt-laden economy yet?  Well don’t be, this is my April Fool’s post!  One of my most unpopular posts, “Renters Should Pay More Tax” engendered a lot of criticism from renters who say they already pay taxes.  My response was of consistent stubbornness to not recognize that landlords charge a rental price that bakes in all costs, or at least tries to.

One could argue that renters pay more than their fair share of property taxes because landlords pass their entire costs to tenants if they are at least cash flow break even. Although I physically write the check to California for my rental property taxes, I definitely charge a rent that covers all costs and then some to reward me for the trouble of landlording. Otherwise, I might as well put all my money in CDs in kick back.

I’m sure I got many of you riled up due to my stubbornness.  I have to admit, that was kind of the point.  I aimed to create an understanding, and perhaps an empathy that singling out any particular group to pay more taxes than they already are is a very offensive and annoying thing to do.  To vote to raise taxes on individuals in the 33% and 35% tax bracket, while you yourself aren’t willing to pay more taxes is wrong. It’s especially wrong since the top 25% of earners pay 87% of all taxes already!

A GOOD PERSPECTIVE

Jason from My Money Minute had a great comment which cuts to the point:

Stop calling it a Renters Tax, and just label it an Occupancy Tax, like governments do on hotels. Hotels factor in their property tax into how much to charge to rent a room for the night, then the government tacks on 10% or more to the renter to occupy the space.

So if you want a “Renters Tax”, then charge 1% of rent and have it collected by the landlord each month.

I don’t even think Sam is for a Renters Tax. What he’s probably for, is all citizens feeling the hurt of paying taxes. When we buy goods at a store, we physically SEE the added sales tax. When we register a car, we FEEL it when we write a check each year. But when taxes are “included” in a cost (rent, for example), that ‘hurt’ is absent, making it easier to blame or pass responsibility for taxes on to another subset of people (the “rich”, property owners, etc.).

If renters had to physically SEE property taxes they are paying each year separated from their rent, they have that proverbial “skin in the game” mentality, and would be less apt to endorse raising taxes on property owners, the ‘rich’, and any other group of people they feel can afford paying more taxes.

I think Sam’s point is the “skin in the game” argument — More people who have to contribute to each type of tax (sales, income, property, use, vehicle, etc.) = Less class warfare, less nanny-state reliance, less pass-the-buck mentality, and greater empowerment of the individual.

The bigger the government, the smaller the individual. “Skin in the game” empowers individuals while decreasing the role of government.

Am I on to something here, Sam?

Very good perspective Jason!  It’s about everybody pitching in and visibly seeing where their money is wasted.  It’s also a lot of semantics. In the end, know that it is ludicrous to try make others pay more to the government when you aren’t contributing more yourself.  Stop finger pointing at others, and just focus on what you can do to contribute more.

Sorry for winding you guys up!  I’m against tax increases in general, except for those who consistently make money and don’t have to pay anything.  That’s just ridiculous.  Just think though, you can always argue whichever way you want.  That’s why there’s always so much gridlock in the government!

If you enjoyed this article, please sign up for my RSS Feed or E-mail Feed to keep in touch.

Best,

Sam

Having a mortgage is a wonderful thing.  In fact, I owe much of my work longevity to my mortgage.  When I was 24, I came across a lot of cash due to a couple good stock picks.  I was just lucky, because goodness knows I can’t pick stocks for doodoo.  I never really told anybody how much I had, but it was enough to put 25% down on a median priced home in San Francisco and still have several years of mortgage payments left over.

By my mid 20s I began questioning the meaning of work.  Perhaps I was simply suffering the lesser known “quarter life crisis.”  Because I had arrived at what I considered to be too much money too quickly, working to make more money lost its appeal.  It didn’t matter if I added another thousand or ten thousand to my savings, making money was so uninspiring.  I was demotivated because of a couple chance trades that required very little skill, just a lot of balls.  The great irony is that I don’t need much of anything to live a comfortable life.  Give me some clean clothes and a place overlooking the beach with a hot tub off the bedroom balcony and everything will be OK!

RENTING JUST FEELS WRONG AFTER A CERTAIN POINT

I had already lived in a nice one bedroom with parking for $1,600 for a couple years and I was sick of throwing my money away.  The next logical move up was to a two bedroom, two bathroom apartment, but those places regularly rent for $2,500-$3,500 a month in San Francisco.  It was unbearable to pay more than $2,000 in rent to someone else even if I was getting shelter in return.  $2,000 a month is $3,000 in pre-tax income one has to earn!  Forget that.

Admittedly, there was also an irrational fear that I would be a 40 year old renter if I kept at my pace.  There’s nothing wrong per say in being a 40 year old renter, just like there’s nothing wrong with being a 40 year old virgin.  But, regardless, I didn’t feel like shelling out month after month of hard earned cash to help someone else pay off their mortgage.  If you’re in the 25% Federal tax bracket or below, by all means rent.  Renting is cheaper in the beginning for the most part and provides a lot of flexibility.

I soon found a cozy little two bedroom place, which after putting 25% down cost 20% less than what it would have cost to rent.  I wasn’t hesitant to put that much money down at all.  In fact, I was absolutely ecstatic to deploy my savings into something useful.  Suddenly, I had much less savings, and a nice multiple six figure mortgage to keep me honest and motivated again.  With the mortgage, I gained a renewed sense of purpose! Funny how things work.

I couldn’t just be a bum and not give it my best at work because if I got fired, I’d be at risk of eventually going broke.  Yes, I still had savings left over, but everything is relative because I had an even heftier amount before the down payment!  I developed a game plan to get to know people in my organization better.  I worked harder at everything that was asked of me.  It was do or die time, and boy did I do do!

LIQUIDITY IS STILL KING

Despite having a nice home to call my own, liquidity is still king.  It’s been a decade since I purchased my condo, and now the payments seem incredibly low.  It’s funny how time makes everything cheaper, especially if you have a fixed payment.  The condo is now a rental, generating positive free cash flow because rents have crept up about 40% since while payments have actually gone down 25% due to a refinance.  Inflation is a wonderful thing!

I have the cash to pay off the entire loan, but I don’t plan to simply because it’s important to stay liquid.  You can dump all your cash into your property, but what if the house burns down?  Sure, insurance will hopefully take care of at least 80% of the rebuilding cost, but for that instant when your house burns, you are going to be shitting bricks wondering whether you’ve lost all that money.

If you so happen to be in a higher federal tax bracket (33% / 35%), it behooves you to keep your mortgage as long as you work.  The government is robbing you of your hard earned money and having that shield helps much more than if you are in the 25% or lower bracket.  Yes, I understand that it’s not the greatest to pay interest to save on taxes.  That said, it’s all about cash flow and tax minimization when you’re making money that Obama doesn’t approve of you to make.  Focus on cash flow.

Mortgage rates are so low now.  As I mentioned in “Should I Refinance Now?  Does A Bear Poop In The Woods?“, you can borrow at 3.625% for a 5/1 ARM nowadays.  That’s essentially how much money you can make in a 7-yr CD at USAA (3.88%) back in 2010.  Hence, the smart move is to stay liquid and not make extra payments on such a low rate.  Remember, you can deduct interest on up to a $1,100,000 mortgage!

Cash is always king, and you want to have as much cash as possible to ensure your financial well being, as well as take advantage of investment opportunities when they arise.  Please read more tips for mortgage refinancing in an article I wrote earlier this year.

CONCLUSION

When you can see yourself retiring in 5-10 years, start formalizing a payoff plan so that when you finally do retire, you will be mortgage free.  The interest deductions all those years are just side benefits.  It’s your ability to live in your home rent free for the rest of your life, which is your biggest benefit!

Use accounting to your advantage, not to the lender’s advantage. It’s all about matching cash flow so that you are always in a very healthy state.  If you can match your mortgage pay down with when you will no longer have a steady income, that is likely the best scenario.  Paying off your mortgage early is a very personal decision.  You just have to make sure you know yourself!

Readers, what are your thoughts on paying off your mortgage early and losing some of your liquidity in the process?  Has anybody else experienced the amazingly motivational aspect of taking on debt?

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Watch Texas Rangers relief pitching if you want to learn how to NOT be clutch! Wow, I mean come on.  How does that one kid throw 11 balls in a row and walk two SF Giants batters in the 8th inning of Game 2 when the bases are loaded?  It’s absolutely unbelievable how bad the Texas Rangers relief pitching was, and it’s simply due to mental weakness.  Texas going from having a chance down 0-2 in the 8th to losing the game 0-9 is a 100% ass kicking.

I understand how difficult it is to close things out due to competitive tennis.  I’ve blown my share of 5-4, third set leads before, and 9 times out of 10, it’s because my mind broke down.  Tennis, like many one-on-one sports is a complete mind bend.  I started worrying and thinking about all the “what ifs”.  What if I shank the ball when going for it?  What if my calves start cramping?  What if he starts catching fire?  As soon as I start filling my mind with doubt, my body follows suite and then before I know it, I’ve blown the lead and lose.

I’ve since been able to calm some nerves that have helped me cross the finish line in tight situations before.  Here are some tips for keeping your head in the game.

* Think of nothing. During a competitive situation, my mind literally goes blank.  It’s as if I’m out of my body observing myself act.  From the service motion, to driving the top spin backhand cross court, there is nothing on my mind except the 100% commitment to win.  Some people call this act “zoning.”  To zone, I picture a pure white cloud of nothingness before each serve.  It fills up my entire mental surrounding.  There is nothing infiltrating my mind as I go ahead and act.

* Know that you will win.  In order for you to compete effectively, you have to already believe you have won.  You know this largely due to your preparation.  You don’t have to know that you are better than them at everything.  All you need to do is believe you are better than them at one thing.  I’m convinced I will be able to outrun my opponents and drive them into the ground.  They will collapse from exhaustion if they try and rally, so they try and go for more and make errors in the process.  Knowing that they will eventually wilt from exhaustion gives me confidence to succeed.

* Put everything in perspective. Once you tell yourself it’s just a game you start to relax.  When you know it’s OK to lose, you start swinging away.  Once you start swinging away you no longer worry about the little things because everything just clicks.  Having perspective is healthy in sports, work, blogging, and practically everything you do.  Once you know you are not an unattractive person, but a beautiful monkey, you start feeling great!

CONCLUSION

Being clutch is a complete state of mind.  Nowhere do you see more examples of clutch than with Olympic gold medalists.  They’ve done the moves time and time again during practice.  It’s those few moments that really count where they excel the most.  Playing competitive sports definitely helps one’s abilities in non-physical arenas such as work.  There’s a reason why so many firms look to hire student athletes, and so many CEOs are single handicap golfers.  They know what clutch is and how to deal with difficult situations.

Who knows who will win the 2010 World Series.  But, if I was a betting man, I’d go all-in on the San Francisco Giants baby!

Readers, what are some of the things you do to calm the nerves in crucial situations?  Have you ever surprised yourself with your clutchness?

PS For bloggers out there, it’s the same thing.  Survival is a tough one and it is a long slog.  How can you go straight to the top with so much content out there and competition?  You simply zone and write like no one else for a methodically consistent period of time.  And then you patiently wait for things to percolate.  You know you will win because blogging is easy compared to surviving in the Amazon jungle, naked, with no matches or food!

Regards,

Sam

There’s a new site called SolutionAuctions.com which smartly allows people with questions to buy solutions and sellers to sell their solutions.  The site is very well designed and easy to use.  One of the main draws for sellers is that you can sell your solutions over and over again, earning a passive income stream for life.  Sounds great!  The real question is, will people go there to pay for answers?

The main thing the site lacks is credibility of the sellers.  It’s one thing to take advice online without having to pay for it.  It’s another thing to actually spend money for advice.  A brief glance shows that solutions are being sold for anywhere between $2 to $10.  That’s not a lot, but it’s $2 to $10 more than what many people will pay thanks to the invention of Google, Bing and other search engines out there.

LURE & DILEMMA

In order for buyers to spend money on the site, they need to see the profiles of the sellers and their credentials.  Here lies the chicken and the egg dilemma.  If you are a seller of solutions and are asking just $2 bucks a pop, perhaps your solution isn’t very unique?  As such, you will have competition from other sellers who will provide “better” solutions at perhaps a lower price.

You really can’t just rest on your solution, as the world is a competitive place.  The only time you will have out-sized gains on your solution is if there aren’t a lot of sellers because not many people go to SolutionAuctions.com.  But, if there isn’t much activity, you won’t be making much anyway!

Also, if you are busy spending time trying to sell something for $2 dollars, maybe you are not the authority you claim to be?  There is a perception out there that the price of something corresponds to the value of something.  Hence, you might want to price at a higher price to increase your perceived solution value.  But then again, given the competitive nature of markets, you will quickly be undercut by your selling rivals.

GOOD POTENTIAL

I agree with Solution Auction’s thesis that everybody is an expert in something, so why not sell it in a market place with buyers?  The trick is to convince people with lots of questions and problems to come to Solution Auction and sell them.  Solution Auction needs some to get some foremost experts in their respective fields to sign on – the expert plumber, auto mechanic, electrician, public policy expert and so forth.  The sellers can’t be any Joe Schmo.

There is a great company out there called The Gerson Lehrman Group, which basically hires true experts in their fields (Professors, Scientists, Consultants, Advisers, etc), and puts these experts in touch with investment groups.  The reason why Gerson Lehrman Group works is because their sellers are at the top of their game, and they charge an incredible amount.  Their network is huge, and as a result they generate a tremendous return.

When people turn to the Internet for advice, their problems are either not too serious, or too embarrassing to ask someone off-line.  Most people generally ask their friends, family, acquaintances, and then Google before going to a site to buy solutions.  Hence, Solution Auctions needs to find some way to convince their answers are better.  Solution Auctions will work if it has enough volume and credibility.  Here’s wishing them the best!

Readers, what do you think?  Will people pay for solutions online?

What are the suggestions and hurdles you can think of for this company?

Regards,

Sam

It’s been a hectic second week back after labor day and I’m so encouraged by what I’m seeing in the economy.  It’s as if the world decided to suddenly get back to work after a long dormant summer.

The one tip I want to leave you guys with is that no matter how rich your client, your boss, or your prospect is, they cannot resist free.  It doesn’t matter whether you take them out to lunch, buy them a drink, take them to a baseball game, or send them a book.  He or she can be worth hundreds of millions of dollars, and that small $20 gesture will do the world for you!

You may think it’s odd that you are giving something to someone who can afford anything, but you are mistaken.  Those who are richer than you and can afford anything are generally the ones who are always giving.  Hence, as soon as you give them something, you’ll stir up their appreciation that they never knew they had.

In the spirit of free, here are some of the posts out there which do just that.

Yakezie Giveaways Galore!

* Elle at Couple Money is giving away a free laptop for her first year anniversary.

* Kevin at Invest It Wisely is celebrating his 6 month anniversary with various prizes.

* Mrs. Accountability at Out of Debt Again is celebrating her 3 year anniversary with $800 in prizes thanks to various friends.

* Yakezie.com hosting our second book giveaway, How Rich People Think thanks to Elle.

* Christian PF is hosting a iPod Touch giveaway.

* The three winners of the Financial Samurai The Simple Dollar giveaway are: Jason @ Redeeming Riches, Suba @ Wealth Informatics, and Little House.  Please send me your mailing address by Monday, Sept 20th or else I will announce new winners.

Go ahead and check the giveaways out.  I love being part of this community and have entered all three giveaways myself!

Keigu,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS or E-mail feed.

To all the ladies in the house, you’re in for a real treat!  To all the fellas thinking about proposing, maybe not!  It all depends on how materialistic you are in the first place.  Even if you are already married ladies, point your hubby to this article and you might just get a ring upgrade!

So what’s the new rule for engagement ring buying you ask?  Well before we get into the most obvious new engagement buying rule all of society should follow, let’s discuss some of the current ridiculous rules that must be thrown out the window!

CURRENT ENGAGEMENT RING BUYING RULES

1) The Three Months Gross Salary Rule. This rule stipulates that if a man makes $80,000 a year, he should spend $20,000 on an engagement ring!  What kind of nut came up with that idea?  There’s really no rhyme or reason why a man should spend 3 months of his gross salary on an engagement ring, let alone 2 months.  After taxes, 3 months gross is equivalent to 1/3rd his take home pay.  Imagine if the man makes $400,000 a year.  Is he supposed to buy her a $100,000 Harry Winston pink diamond?  Ridiculous.

1b) The Three Months Net Salary Rule.  Crazy!

1c) The Two Months Gross or Net Salary Rule. Nuts!

1d) The 1 Month Gross or Net Salary Rule. OK, not so bad as it’s under 1/10th a man’s annual gross or net income.  Again, here we go with the 1/10th rule, which hints at something beautiful.

2) The Age Rule. Another crazy rule is for the man to buy a quality ring whose size is equivalent to the age of the woman.  For example, if the man proposes to a 32 year old woman, he should buy a 3.2 carat diamond engagement ring!  Wow!  Even if he gets em young at 18, that’s still 1.8 carats!  What if you’re a late bloomer, or are simply into older women?  Is a man supposed to buy a 50 year old vixen a 5.0 carat ring?  Forget it!  A very rich woman told this rule to me with a straight face at a bar one day.  She showed me her 3 carat, E color, VVS1 yellow diamond as proof.  Poor guy.

3) The Hotness Rule. This could be the most dangerous rule for men as it is all or none.  Essentially, every man before proposing will say how beautiful his girlfriend is.  The problem with showering her with praise such as, “You are the most beautiful woman in the world,” or “Your beauty makes the stars look dim” is that you are setting expectations incredibly high!  Your fiance will rightly think that if she really is the most beautiful woman in the world, she better get the biggest, most beautiful rock in the world!  If I am a 10/10, then you better give me the most luxurious engagement ring among all my girlfriends!  Women will pretend to tell you they doesn’t care what ring you get, but don’t listen, not for one second, unless you want to start sleeping on the coach for no good reason.

THE SOLUTION: THE CAR RULE FOR ENGAGEMENT RING BUYING

Now that you understand what silly rules there are for guys to follow when spending money on an engagement ring, you’ll now realize the absolute beauty of The Car Rule For Engagement Ring Buying.  The Car Rule simply states that a man should spend up to, but no more than the initial purchase price of his car!

Most guys like cars.  The more obsessed he is about cars, the bigger and better your potential ring.  We all realize that buying a car hurts our finances because it’s a depreciating asset.  Yet, guys still overspend anyway, and in a big way.  If a guy making $80,000 a year is dumb enough to buy a $50,000 Cadillac Escalade (78% of his net after tax income) you should most definitely demand he spend $50,000 on a 2 carat, Tiffany Novo ring that is an E color with VVS1 clarity!  Blow up his finances with glee!

Conversely, if your man is fortunate enough to make $300,000 a year like Lyndon, but drives a 10 year old Honda Civic he bought for $3,000 8 years ago, then all you can really hope for is that he buys you a nice 0.25 carat, H color, VS2 ring from Jarrod’s.  Unless you live in New York City, Boston, or Los Angeles where the average carat size is 1.8-2.0, the national average carat size is only 0.4, so stop being greedy!

Finally, if the man so happens to be the biggest nature lover on earth and takes the bus and rides his bike, well, you’re out of luck!  There is no way you can demand anything more than a Push Pop ring from Topps!

CONCLUSION

Cars are to men what engagement rings and are to women.  If your man can’t spend as much money for a ring as he does on his car, you’ve got a problem.  He is being completely self-centered and selfish if he hints to you that spending money on a nice engagement ring is a waste of money.  This is especially true if he’s sporting anything MORE than a $20,000 Honda Civic in his garage!

If a man follows the 1/10th rule for car buying, he’ll never be stuck in this engagement buying predicament.  Of course, the woman can be incredibly gracious and tell him only love matters.  But we all know you’re just being nice!

Readers, what do you think about the following above engagement ring buying rules?

Do you think “The Car Rule For Engagement Ring” buying will catch on and be a worldwide phenomenon?  I’m about to pitch this idea to DeBeers and all major car manufacturers!

Do you have any engagement ring buying rules to share?

Keigu,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

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BONUS: Since we’re on the topic, I just love this commercial. Play it loud!