Financial Samurai » frustration

Feeling Like A Burden Is A Terrible, Terrible Thing

admin — Wed, 07 Jul 2010 09:00:49 +0000

"Carried By The Wind" by Veronika Nagy

My nose plugs up and I can hardly breathe when I’m around cats too long. I don’t know why I’m allergic, I just am. One time I stayed over a friend’s place with three cats, and I woke up with red hives. It was a surprise that I was able to fall asleep at all, because I could have sworn I sneezed over 100 times until the underside of my nose bled.

One of my best friends invited me over to visit her childhood home this fall. Her mother lives near Boston, and unlucky for me another downside of East Coast living is the enormous pollen count. I remember countless days when I couldn’t go to work because my allergies were so bad. Ever since moving out West, my reactions have been much tamer. The San Francisco Bay acts as a natural filter, sucking out stagnant air to sea.

In addition to being out East, my friend’s mother also has a couple of dogs and cats! She sees this trip as a fun homecoming to introduce me to where she grew up. To me, I have no attachment there and it’s like going to a gas chamber for vacation. Imagine only being able to breathe through your two front teeth. That’s how I feel sometimes when allergies attack. You can’t get enough oxygen, so you aren’t able to speak. You lose energy and let sleep take over even though it’s in the middle of the day.

THE QUIET PLEA

When I asked my friend if it was OK to ask her mother if she could put the two cats in the basement during our visit, she paused. Sensing her objection, I offered up a solution of putting the two cats in the basement only at night, and let them out during the day when we go out and explore. Another pause. Fine, at which point I felt thoroughly disappointed. I’ll just go get a hotel room for $100 bucks a night I tell her, which is absolutely silly because there are two perfectly empty bedrooms at her mother’s house.

There was no compromise with my friend. She mentioned that one of the cats would object and start meowing and clawing at the door if she was left down in the basement. Oh really? That’s too bad. It’s not like a dungeon down there. I’m well aware of East Coast homes where many of them have fantastic basements filled with TVs, furniture, beds, and wet bars. A thousand square feet of living space for a cat is like 10,000 square feet of living space for a human. Nope, she doesn’t think it’s a good idea and is hesitant to ask her mom, who so happens to be very nice.

I’m sad, because when she comes over to my parent’s house, there’s nothing we won’t do to accommodate. For example, my parent’s house has a crazy neighbor on one side. The neighbor often talks out loud to herself and busts out in song. Her dog barks incessantly, and we are forced to hang out on the other side of the house sometimes. One visit, I found my friend sleeping on the sofa in the living room due to the noise, and that bothered me. It bothered me so much that I went with my father to see if we could get some airtight, double paned windows so she wouldn’t have to wake up in the middle of the night. Isn’t that a thoughtful gesture? I’m thinking of the future. We’re going to get those installed, I promise.

I’LL TRY HARDER

If I was mega rich, I wouldn’t feel so bad about my friend choosing her cats over me. I would say “no problem” to $100/night motel rooms, and would probably want to stay at $300 a night resorts where I could be pampered with room service, a spa, fine dining and other amenities. But, no, I’m not mega rich. I work on a loose budget and like to save money where I can.

So here is another reminder as to why I seek financial freedom. I don’t want to get my feelings hurt if I have to be compared against someone or a fuzzy animal. I gave her a couple chances to see if she could accommodate, and she just stayed silent. I don’t want to be sad or angry at my friend for putting her in a tough decision. I know she loves her cats dearly, but some would say that we are in love too.

Send me to the Four Seasons and let me spend large sums of money for a hotel room even if a cozy room is available for free. I’m sorry for being a burden to you and your cats dear friend. It’d be nice to discover medication and fancy, non Darth Vader-like contraptions that can help alleviate my allergies, but nothing seems to work. For now I’m no better than a cat, which is enough motivation to write this post and work harder at achieving my financial goals.

Readers, what are some of the things that frustrates you or makes you sad, which could be alleviated by having lots of money?

What would you do in my situation? Would you still bother going?

Maybe I’ll just go up to Tahoe and do some soul searching. She’s a lovely person and perhaps I have to just change my expectations.

Regards,

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

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

The Reply Button Is There For A Reason

admin — Fri, 18 Jun 2010 09:00:53 +0000

The following is a guest post by Hime, one of Financial Samurai’s first readers. Hime is a manager at a strategy consultant firm who likes the violin and going on unplanned adventures. Hope you enjoy!

All right everyone, how many times have you read an email and said to yourself “I don’t feel like replying now I’ll just do it later” only to have that email disappear into the deep abyss and completely forget that you left the sender hanging?

Come on, I know you’ve done that at least once. If you do that more like every third email – CLUNK! That is me hitting you over the head with an oversized rubber hammer as I resist the urge to shake the stubbornness out of you. Think I’m overreacting? Maybe a little but I am trying to save your career and relationships so please pay attention!

DON’T LEARN THE HARD WAY

I’m generally fast and consistent about replying to emails right away (24 hours at the latest), especially to friends, family, clients, and the coworkers that I like…whoops I mean all my coworkers. However one time last year I goofed up big time….

I have a difficult client that is notorious for being very impatient and demanding, often with requests that my firm can’t accommodate due to breach of contract or financial limitations. One day I got a terse email from him complaining about a project my team generated late. He was in denial that the reason the report was late stemmed from his team giving us incomplete data that we had to chase down from them on multiple occasions.

I was so irritated that he was blaming us for their incompetence that I let the email fester in my inbox while I moved on to other things. He didn’t deserve any more of time! Boy was I stupid. What I didn’t realize was that because my client was upset (justified or not), he ended up becoming furious that I ignored his email, and he ended up calling my boss’s boss to chew him out about my insolence. Ouch. All of a sudden I became the idiot for not handling the situation and having to bow my head to the man who signs my paycheck. Whoops!

Even though we all receive 100s of emails a day, it is crucial to actively watch for emails that are addressed to you specifically or to your team. There will be times when a client may be lashing out for something that wasn’t your fault but it’s your responsibility to explain that to him/her in a timely manner whether over the phone or in a non aggressive email reply. Your career will depend on it. Don’t risk losing a client, a friend, or your reputation for being known as the infamous non-responder.

Tips for taking control of your email:

Can’t respond right this minute? Use the Mark as Unread function so you’ll remember to reply later.
Create email rules to automatically sort and route email for you.
Stay organized and develop a system that works for you. My inbox only contains emails that I haven’t addressed. Everything I completed gets filed into a folder.
Create meaningful folders and subfolders. A filing system is only effective when you know where to go to retrieve something.
Prioritize and handle the most urgent emails first. Many programs like Outlook let you assign different color flags for tracking prioritization. You can even assign a category name for each color flag, very useful!
Need to do research before having an answer to a client’s email? Reply right away to the client letting them know you’re investigating the issue and will follow up in a few days.
Watch your total inbox size & empty your trash. A lot of servers will stop sending you new emails if your account has gone over the size limit.
Steer away from arguing, complaining, and snide remarks in emails. Emails leave a permanent trail that you don’t want to sneak out and haunt you later.
We’re all busy but that doesn’t mean you can ignore emails from your friends. Family will probably forgive you for being flaky but friends will hold it against you if you never respond to them.
Check your spam folder regularly. Spam filters aren’t perfect and sometimes important emails can end up in there by mistake!

CONCLUSION

If you can practice all of those tips regularly you’re actively improving your communication! Don’t down play email skills – staying on top of emails and responding in a timely and curtious manner are key skills now equally as important as face to face meetings in our current work environments. A lot of work places don’t record phone conversations but I can guarantee most of them are archiving every email you’ve ever sent! Get active with your email and avoid being known as the person with the black hole inbox!

Readers, how many e-mails do you have total in your inbox? How many of them are unread?

What would you say your average response time is over e-mail?

Is e-mail your preferred way of communication? If not, what is?

Keigu,

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

Folllow on Twitter @FinancialSamurai and subscribe to our RSS feed.

The Carrot That Makes You Jump Through Hoops

admin — Wed, 16 Jun 2010 12:52:26 +0000

One of my best friends is blessed with skinny genes. At 5′ 3″ tall, she weighs all of 105 pounds. When we go out to eat, she doesn’t just order a glass of iced tea and salad with dressing on the side. She goes all out with mash potatoes, creamed spinach, BBQ oysters and then a nice juicy ribeye for a main course! I gawk in amazement at her appetite while secretly groaning at trying to keep up towards the end. After all, shouldn’t she eat 40% less than me if she weighs 40% less? Guess not!

Despite my friend’s envious genetics, she isn’t exactly iron woman when it comes to sports and outdoor activities. After three miles on a 10 mile bike ride, she’s pooped and waves at me to take a break. Meanwhile, I’m going “lah, lah, lah” in my head, not even breaking a sweat as I soak in the glorious views of the Bay. I let her catch up and we take a five minute pit-stop where she catches her breath as I go do some stretches and sit-ups.

THE GIMMICK

One day my friend tells me about a great incentive program at our local gym. I kid her often because despite her $100/month membership, she never goes. She comes up to show me a gleaming new card which says, “BURN TO EARN!” Hmmm, what’s that I ask her? She tells me that if she goes to the gym 20X in the next two months, she will be entered for a chance to win a free t-shirt, socks, swimming goggles, a weekend in Napa, or two rounds of golf which she does not play at some country club somewhere.

Suddenly, I notice a transformation. From going maybe once a month, my friend starts going 3-4X a week! All for what? A chance to win a simple T-shirt? Needless to say, after two months, she was absolutely ripped. We’re talking Madonna-like abs, and thankfully not Modonna-like arms, because that’s just scary. When the time for the drawing came, she gleefully whipped out her BURN TO EARN card and gave it one good luck kiss.

As fortune would have it she won absolutely diddily squat in the first round. Luckily, there was a consolidation round and there she heard, “And the winner of a brand new pair of tubular socks is….. Lisa!“ A shrill of joy belched out of her little frame as she jumped up and down “I won! I won! Wheeee!“ I think I rolled my eyes because I didn’t win anything and couldn’t believe her luck. New tubular socks. Sweet!

CONCLUSION

By just administering a small rewards program, our health club was able to get a notoriously great client (one who pays on time and never goes) the motivation to go 15X more than normal. I go 10X+ a month anyway, so it wasn’t a big deal. But for Lisa, it was like watching a new person altogether. The lesson learned is that the next time you want to get someone to do anything, tempt them with cotton that warms the feet!

Regards,

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

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

Who Needs A Job When You Have A Private School Degree

admin — Fri, 28 May 2010 09:00:00 +0000

Pick any private school. The cost is about $200,000 over four years. These figures don’t surprise anybody anymore given the ever rising application volume to storied institutions such as Harvard, Yale, and Princeton. That said, there have to be some who believe $200,000 for a private school is a hard pill to swallow over an excellent public school for just $40,000.

With an estimate 17% of people aged 20 through 24 unemployed, swallowing a bowling ball may be easier than finding a desirable job post graduation. Let’s say you are one of the unlucky few who can’t find a job after a $200,000 education. Does it really matter? Let’s think about why it doesn’t really matter from the eyes of several recent graduates.

THE BOY WHO WAS FORCED TO GO

Jimmy graduates from Columbia this year with a degree in History, European History to be precise. Despite his best efforts to land a summer internship last year, none were available, so he decided to go Euro-railing with his buddies for three months. What a blast, as he traversed the continent and collected bottle caps and coasters from every bar he patroned. The total cost of his trip, including airfare, food and lodging was a mere $10,000, just 1/5th what his parents pay for 9 months of school! What a bargain he reasons.

Everything is a bargain to Jimmy because he doesn’t have to pay for anything. He was happy to attend a SUNY school for a fraction of the price, but his parents pushed him to attend Columbia. In return, they would pay for everything, so long as he promised to just do well. The pressure Jimmy faced was immense. How could he live up to his parent’s expectations? He knew he couldn’t.

With Jimmy’s fancy Columbia degree, he reasons that he’s held up his end of the bargain. He didn’t drop out and instead flourished with a 3.7 GPA and a cum laude designation on his diploma. Yet, with no job waiting for him at the end of the rainbow, is all for not? Not so says Jimmy. The diploma is worth it, and if people don’t want to hire him, it’s their problem and not his.

You see, Jimmy’s parents are multi-millionaires who live in a $2.5 million dollar house in Greenwich, Connecticut. His father is the CFO of a Fortune 500 company and his mother has never worked a day in her life. In fact, the nanny who raised Jimmy since birth is still living with his parents even though they are empty nesters. Someone has to clean up the 5 bedrooms and run errands.

Like Jimmy’s mother, he never needs to work either because his trust fund can easily support him for the rest of his life. Jimmy is not unique, because all of his friends at Columbia are wealthy. Just by graduating, Jimmy and his friends legitimize themselves to the world. To think about starting at the bottom of any corporate is beneath them, when they are the sons and daughters of business leaders. Hence, who needs a job?

THE WOMAN WHO PAYS HER WAY

Now lets compare Jimmy with Allison, who paid her way through Columbia. She too, could have decided to attend a school 1/5th the price, but she did not. Instead, she chose Columbia out of the belief she would get a superior education, and land a dream job in marketing. With over $100,000 in student loans, Allison is suffocating from debt, and her repayment starts 6 months after graduation. Allison has no job offer either, and has decided to wait tables until she does.

Allison doesn’t want your pity, so don’t give her any. She made the choice to spend $200,000 on education even though her middle class parents, who earn a combined $80,000 a year couldn’t afford to offer much help. Only a small few get to attend such an elite university, and for that, she feels proud to have the opportunity. Some day, she will see the benefits of her Columbia degree, just not now.

Unless the right job offer comes a long, Allison is happy waiting tables. She won’t settle, even though it may seem like she already is. If a year goes by without finding her perfect job, she’ll just go to graduate school for another $50,000 a year. Allison knows she’s smarter than most people and has a tremendous amount of pride. Don’t pity Allison for not finding work, because she’s content with her own choices.

THE SUPERSTAR

Sandeep stands above Jimmy and Allison for his brilliance. He won the National Spelling Bee at age 9, finished multi-variable calculus by the 10th grade, and is on the US national juniors squash team. Sandeep has a full ride to Columbia and like Jimmy, doesn’t have to spend a dime.

Despite Sandeep’s achievements before and during college, he too, cannot find a job as a strategy consultant. Sandeep doesn’t care, because he had a grand old time playing squash, experiencing the NYC night life, and learning something new on the side. Besides, what’s $200,000 when none of it came out of his, or his family’s pockets? Absolutely nothing. As far as Sandeep is concerned, his dream job hasn’t found him yet.

Mentally, Sandeep figures that he can take the next four years off since he worked so hard during the past four years. Maybe he’ll go explore the world and live on a shoe-string budget. Maybe he’ll try to become a squash pro in Europe. The uncertainty of his future excites him, especially since he’s armed with a free Ivy league degree!

CONCLUSION

People who go to private schools aren’t stupid, nor are they irrational. Even under the most difficult scenario where one has to pay their way such as Allison, she doesn’t want your pity. They knew what they were getting themselves into, and took a risk with their finances in order to experience “the best” education in the world.

The reason why $50,000 a year tuition exists is because enough people believe it’s worth it. If not, tuition prices would adjust accordingly. Hence, there’s really no need for mass media schadenfreude gleefully reporting that private school kids aren’t finding jobs. There’s no need for concern either. The only people making noise about a tuition bubble are parents who probably can’t afford $50,000 a year, but who believe their kids deserve the best, whatever that is!

Readers, why do you think people make such a big deal about private school tuition? Harvard could charge $100,000 a year today, and there would be more demand than seats.

Who are the people feeling sorry for private school kids without jobs?

Do you think private schools are worth it over public schools?

Regards,

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

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

The Emergency Fund Fallacy

admin — Fri, 21 May 2010 09:00:53 +0000

It continues to perplex me why there should be a distinction between an emergency fund and your general savings. If you have $100,000 in the bank, what is the difference between calling it $100,000 in savings, and splicing the funds into $10,000 emergency money and $90,000 savings? The answer lies in the fact that people who need to create an emergency fund likely always have “emergencies” and are weak with their spending and savings!

Let’s say your name is Mr. Benjamin aka a $100 dollar bill. You’re relaxing with your fellow Benjamins in the bank, hopefully earning at least a 4% interest rate using the “DVD Method To CD Investing” and having a grand old yield maximizing time. A Benjamin’s purpose is to provide a solid source of liquidity and risk free interest income for the owner upon his or her retirement.

Some Benjamins are lucky. Their owners don’t discriminate between one bill or another. They treat each bill with vital respect i.e. they don’t touch it! Some owners are just nutty, always disturbing their party and separating one Benjamin from another. “Listen up Benjamins! 100 of you are to relocate to this side of the tracks, and the other 900 Benjamins get to kick back and relax!”

YOUR CRUTCH WHEN YOU CAN WALK JUST FINE

As soon as you start identifying some of your savings as emergency fund money, that portion becomes “at risk.” Your emergency fund becomes a slush fund that tempts you to spend because you don’t have the discipline enough to lock away your retirement money. You bring your savings to the front lines, allowing you to justify your desires because you’ve earmarked other monies for retirement.

Having an emergency fund is a crutch. You start thinking in emergency fund type increments. That’s a lovely iPad my emergency fund can cover no problem! Or, let’s buy a brand new car and take out a loan since our emergency fund can take care of the payments! 1/10th rule for car buying? What’s that! The list of stuff you start wanting gets longer and longer until you no longer can control your temptation.

Worse yet, some of you might treat your emergency fund money like gold and never spend it! What does that mean? It gives you a green light to spend all your other money at will because you feel artificially complacent that no matter what, you’ll still have your piddily emergency fund to depend on. This could be the more dangerous result, since an emergency fund is generally only a small fraction of your overall savings.

CONCLUSION

As soon as you identify the weakness of the emergency fund concept, you’ll realize that you’re just making excuses for your spending and savings habits. Instead of creating an emergency fund, go broke to win big and lock your money away. If you have to create an emergency fund, you are scraping at the bottom of the barrel with regards to your personal finances.

Do you think multi-millionaires have emergency funds? Nope. They have tax efficient muni bonds, private equity investments, and liquidity. Stop thinking so small and start thinking bigger, holistically if you will! A dollar here is the same dollar there. Focus on fixing what’s most important, your money habits.

Readers, do you agree or disagree with the emergency fund concept and why? Do you agree with me that creating an emergency fund is a way to shimmy around one’s mental weakness in finance?

PS For those with emergency funds, I still commend you. Because if it’s a difference between having no savings, and having an emergency fund, then having an emergency fund wins all the time! Just be careful not to get complacent and stop there. Keep on building the nut!

Keigu,

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

“The Happy Loser” Archetype By Clotaire Rapaille

admin — Wed, 19 May 2010 13:54:50 +0000

While waiting at the dentist, I picked up the April issue of Inc. Magazine and stumbled upon an article entitled, “The Secret Of Their Success.“ The article discusses what really drives salespeople to succeed. We are all salespeople, whether we know it or not, which is why being a happy loser helps bring out the best in everyone.

Clotaire Rapaille, a psychoanalyst and ethnographer describes a happy loser as someone who sees rejection as a challenge. The first “no” stimulates their brains to want to try harder and not give up. Clotaire highlights one example where a firm defines success not by how many wins a salesperson achieves, but by how many rejections instead.

In other words, until the happy loser receives a “no” from a perspective client, he or she has not succeeded. The Happy Loser archetype is similar to one who loses a tough tennis match. Instead of making excuses, the happy loser goes and runs 10 miles, hires a coach, hits 1000 serves and does everything possible to prepare to win the next time around.

I’ve always believed that the most intimidating opponent is the one whose been rejected all throughout high school. Those are the guys who’ve experienced enough rejection to last a lifetime. With a large chip on their shoulders, they have an unwavering desire to prove people wrong and so happen to often be the biggest successes. All that anger is bottled up into a cannon used to blow away the competition.

Some may wonder whether being a happy loser can be taught. The answer is yes! By shifting your mindset to look for NO’s you will gradually start experiencing the thrill of rejection. In “You’re Rejected! How I Use Rejection To Motivate Me Every Single Day“, I touch upon the concept of seeking rejection from those at the top. Once you do, your motivation will sky rocket.

Readers, are you a happy loser or a sad loser? Do you get motivated after a rejection or depressed?

How were you perceived in high school? And have you ever had a desire so great to prove your detractors wrong?

Keigu,

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

Hire A Financial Adviser or Lose Money All By Yourself For Free?

admin — Fri, 14 May 2010 09:00:00 +0000

The following is a guest post from @NealFrankle of Wealth Pilgrim. Neal is a Certified Financial Planner, a fellow Yakezie member, and all around good guy. Hope you guys enjoy!

During strong markets, anyone can make money. During weak markets, everyone gets hurt. For the most part, all ships rise and fall with the tide, financial adviser or not.

So what’s the point of having an adviser?

(I have my own answer to this question and it may surprise you.)

But before we get to my answer, let’s explore the wild and wonderful world of financial advisers and our clients.

1. Financial Advisers are Salespeople.

I know. I’m a financial adviser. We sell products and ideas. We sell baby….we sell.

In fact, most of our training is in sales, not financial planning and not investment management. If you read “How to Become a Financial Planner” you realize this is true. A financial adviser might have specialized training as a Certified Financial Planner (for example) and that does provide education that helps us plan. But we’re still salesmen. We gotsta make a living and that means most of us are going to sell you something if we can. Show me a financial adviser who has been in the business and survived more than 10 years, and I’ll show you a pretty sharp salesperson.

2. We don’t have a crystal ball.

If you really expect your financial adviser to beat the market year in and year out you should get a job as a stand-up comedian because you’re funny – and not in a good way. If your adviser does great is some years, she’ll do crappy in other years. It’s this risk/reward thing you’ve heard about. (Unfortunately, it is the way the world works.)

3. We have feelings.

If you cut us…do we not bleed? If you tickle us…do we not chuckle?

Yes…. we do.

However, and this is a huge one, if we’re any good, we don’t let our feelings interfere with our work.

This is one difference between us and you that explains why the best of us are worth what you pay us.

I’ve been in this business for over 25 years. Do you want to know how many times smart (I mean super smart) clients call me up with ideas that are super dangerous? How about, “all the time.”

When the market is strong, you get greedy. You want to take more risk and that’s a bad idea. And when I say “bad”, I don’t mean it in the Michael Jackson cool way either. I mean, bad as in…really dumb.

Let’s say you work out a 20 year investment plan that ends up with you sipping Sake on some sandy beach when you retire. You look at a number of 20-year periods and see that the historical worst-case is a loss of 40% for an all-equity portfolio. That’s too steep for you so you select a portfolio with less potential risk – and lower historical worst-case losses.

Everything runs great – until the market takes off. At this point, left to your own devices, you get greedy and put everything into the market. The moment you do that, your risk skyrockets and if things don’t turn out, you might get wiped out.

But if you work with a good financial adviser (and listen to her) this won’t happen. She’ll remind you of your long-term plan and bring you back down to earth. Don’t thank us….it’s our job.

4. We know what works.

I’m speaking here about long-time veterans. We’ve worked with clients for decades and we’ve seen every mistake known to man. We’ve seen what happens when people get greedy or afraid. We’ve seen what happens when people try to predict the future or ignore it. We’ve seen what happens when people don’t force their children to be financially responsible.

Tap into our knowledge and experience. You’ve got one financial life. We’ve been part of hundreds of them. No we’re not any smarter than you are. We’ve just changed more financial spark plugs than you have. We know the right wrench to use.

5. We know what’s good for you.

That’s right. You read it right. We know what’s good for you and you don’t.

How many times have you gone to the dentist for a cleaning only to find out you need a new crown? Me too. It might hurt but you’re better off by knowing the truth and taking care of it…right?

The same thing happens in financial planning. You come into the office thinking everything is “wunderbar”. We stick a financial thermometer up your……I mean…in your mouth……and we tell you what medicine you need to start taking.

We tell you:

Which retirement plan to participate in.

How to protect your beneficiaries.

How often to update your trust and what to look for.

How to balance your portfolio.

How to use Inherited IRAs.

6. We aren’t perfect.

We’re just people. The vast majority of us are honest and want to help you. But a few of us aren’t. You’ll have to use your own judgment to find the right person to work with.

As nice and honest as we are, we make mistakes. We work with a lot of people and we forget things. When we do…don’t get angry. Just remind us and be kind.

Bottom line, being a financial adviser is the best small business idea I could think of. I love being in it. Not because I think I make you more money – although I try to do that as best I can. I’m proud of what I do because I help people get what they want out of life with less risk and less cost.

I charge for what I do and I’m worth it.

Regards,

Neal

Germany’s Missed Opportunity To Save Greece & Themselves

admin — Mon, 10 May 2010 09:01:33 +0000

Yowza! Source: NY Times

Over 11 million people are estimated to have died by the hands of the Nazis during the Holocaust just 65 years ago. 5 to 6 million of the 11+ million were Jews and over 300,000 were Athenians during the Axis’ occupation of Greece. It’s a fallacy to blame modern day Germans about the atrocities of the past. Yet, just because the demons have all died, shall we forgive and forget? Absolutely not. The offspring and relatives of the 11+ million dead live on, and their stories will never ever be forgotten.

With a GDP of US$3.6 trillion, Germany is now the largest economy in Europe as well as the 4th largest economy in the world. Germany also has roughly $50 billion in estimated loans to Greece, a large amount, but not an overwhelmingly debilitating amount given the size of their economy. Saving Greece helps the Germans and the rest of the 27 EU members who in some way were all negatively affected by Germany decades ago.

GRAND STANDING AND FINGER WAGGING

Instead of taking this opportunity to save the world and make up for the atrocities of their past, Germany has decided to play politics, wagging their fingers violently at Greece for their complete, and utter mismanagement of their economy. Make no mistake, the Greek fiasco is a crisis of politics, and not of economics, yet.

To put it simply, Greece’s budget deficit in 2009 was 12.7 per cent of GDP, and its overall debt was 113.4 per cent of GDP. We’re talking one naughty, highly indebted country who spent way more than it earned for years and years and years. Even debt-addicted America only has a overall debt to GDP ratio of 88%, and we tried hard to mess up our economy!

How can Greece be so foolish in their spending one might ask? That’s easy, Greece knows their backstop is the European Union and politicians are to blame once again. A dirty politician is the same in every country. Politicians make promises they cannot keep, and spend more than they take in to get elected and feed their egos. Discipline is thrown out the window when it comes to being able to gorge on other people’s money and not your own. The empty promises are always the next politician’s problems!

When Greece gave up its Drachma currency in 2001, they did so unwillingly, but with the promises of a brighter future. With the might of 26 other member countries, many of whom are much larger such as Spain (4X bigger), it behooves Greece to live like Gods and spend like the wind. The problem lies in timing, and a complicated web of debt that creates knock-on effects for all countries.

THE REAL SOLUTION: GERMANY’S CHANCE OF A LIFETIME

For all those guilty German souls who feel bad their people pillaged much of Europe in the 1930s and 40s, now is the chance to improve their future legacy. Imagine if all the citizens of Germany came together and voted for their government to be the white knight and bailout out Greece all by themselves. Not only will the Greek be more forgiving of Germany, but so will every other European Union country perhaps. The Germans have a phenomenal opportunity to change perceptions and negative stereotypes held by millions.

Germans are suffering needlessly because of uncontrollable past events. If I were living in Germany, I’d vote for a Germany-lead bailout with pride. Maybe my future taxes get raised to pay for the bailout. Or maybe not, as the German government decides to raise taxes on only the top 10% of income earners like we do here in the US.

In any case, I’d vote with vigor because I’m sick of people looking at me funny and discriminating. Instead, politicians are playing the blame game and publicly trying to humiliate each other. I don’t want my kids to ever, ever suffer from what someone did 100 years ago. Chalk up $50-150 billion in German bailout money as unpaid interest of war reparations compounded over the past six decades. The amount will never eradicate the past but at least it’ll help their future.

THE WORLD STEPS IN INSTEAD

Concerned that the fiscal damage could spread throughout the EU and the world, EU members and the IMF have pledged $1 trillion ($750 billion up front, $300 million over the next 3 years) to bail out Greece, but most notably the Euro. And since the United States is the largest contributor to the IMF budget at 17%, our share of the $1 trillion IMF package could be as high as $40 billion bucks! That buys one heck a lot of spanikopita!

It’s safe to say that nobody knows exactly how much bailout money Greece needs, because it’s almost impossible to quantify the value of their debt to all their fellow European Union members. What is known is that the strongest members of the European Union like Germany, can easily provides a $50+ billion bailout package and save their brother. By not leading the charge, and letting the IMF and the US take control, Germany misses their oipportunity to make a difference. Worse, the world will wonder why the largest economy in Europe, with much to lose if Greece goes under, didn’t do more while others did.

CONCLUSION

The US sub-prime crisis teaches us that without a concerted bailout, we all suffer. We can blame Wall St. for creating exotic financial instruments which nobody understands. We can also blame homeowners who bought way more house than they knowingly could afford. But when crap hits the fan, we all get smeared, so we might as well all pitch in. Once the rescue package arrives, we then enforce stringent regulations and make hard admonitions against guilty parties in hopes a crisis never happens again. But rest assured, as long as humans exist, crises will happen.

Greece is to Bear Sterns what Spain is to Lehman. Greece should consider itself lucky it’s relatively small, and first to announce it has a debt problem. You know they will get bailed out, because The EU and the IMF can’t risk contagion. The problem is, once Greece gets bailed out, many of our Spanish friends might do a little more binge spending and say, “Nosotros tambien! Si, como no?“ One by one, the fear is that every single EU country with a little bit of debt takes advantage of moral hazard and stop paying. You thought The Moral Hazard of America was bad, you ain’t seen nothing yet!

Das Eisen schmieden, solange es heiß ist!

Readers, do you think Germany should lead the charge in bailing out Greece? If so, will it help change perceptions about their role in World War II?

Can we blame Greece for behaving badly? After all, they don’t have the Drachma to worry about anymore.

How big do you think this European debt crisis will become?

Keigu,

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

Folllow on Twitter @FinancialSamurai and subscribe to our RSS feed.

Over The Hill At 40 – Age Discrimination In The Workplace

admin — Wed, 14 Apr 2010 09:00:21 +0000

Every large corporation has some type of annual “Diversity Training” course where we learn not to harass colleagues, send out crude jokes over e-mail, and discriminate against those unlike ourselves. Everything generally makes sense except for one rule that I once read: “One shall not discriminate against someone over 40.” I thought about this for a second, and I began to wonder if they had made a typo.

At age 40, one will have worked for 18 years out of college or 15 years out of graduate school on average. If the accepted age of retirement is 65, or 25 years away from 40, then the rule is implying that age discrimination starts before you are even half way through your average 40 year long career!

The other interesting fact is that most people are living longer nowadays. Forties are the new thirties as they say. People are looking younger and younger at various age milestones. Hence the question, why 40? Let’s explore the various reasons.

NEGATIVE PERCEPTIONS ABOUT OLDER WORKERS

Older workers are…….

1) Slower and less adaptable to change. In the age of the internet, if you don’t know how to write html code, or work your way around a Powerpoint or Excel spreadsheet, you might as well be a dinosaur.

2) Less loyal to the job due to family. Families result in more vacation time and sick days, and less desire to work weekends and put in the extra effort.

3) Less malleable for a mentor to mold. Instilling work culture is more difficult, and therefore older workers will have a harder time fitting in.

4) More expensive and therefore squeezes margins more intensely during downturns. Due to the lack of flexibility in pay, there is less maneuverability.

5) Uncomfortable working for someone younger than them. Younger managers feel their discomfort and therefore naturally tend to shy away.

POSITIVE PERCEPTIONS ABOUT OLDER WORKERS

Older workers are….

1) More knowledgeable and experienced where no amount of smarts can match.

2) More patient and mature. They bring different insights to solve difficult problems.

3) More dedicated to their jobs because they are not just providing for themselves, but for their own family and perhaps even their parents.

4) Have more savings and therefore are more flexible to take pay cuts during downturns.

5) Work well with younger co-workers because there is a natural tendency for older people to help mentor younger workers even if they are more senior.

AGE IS JUST AN EXCUSE

If you let yourself feel discriminated against due to age, it’s your fault for letting it get to you. We start blaming exogenous variables that should have very little to do with whether we succeed or fail. Yes, if you are working at a company where the average age is 30 and you’re 50, maybe you will feel the young guns are out to get you. Or rather, since you’re the minority, you’ll feel special due to your valuable insights. It’s really what you make of the situation.

You can argue either way whether older workers are better or worse employees. It doesn’t really matter because you’ll never convince the world conclusively that you are right. One can always find the positives and negatives in any type of person because our perceptions are all different. We just need to focus on what we can control, which is our attitude, presentation, and work skills.

CONCLUSION

Perhaps the reason why so many of us, including Lyndon and I would like to have the option of retiring by our early 40s is because we unconsciously don’t want to face age discrimination. We’re given subtle, hard-to-notice messages telling us that we have at most 20 years in our careers to be someone before others start taking our place.

We all have latent biases that cannot be clearly proven. Rather than dwell on exogenous variables which cannot be helped, let’s work on making ourselves invaluable so that even when we’re 80, we’ll be able to make a difference if we want to.

Readers, are you convinced age discrimination in the workplace starts at 40?

At what age do you think age discrimination starts?

What about reverse age discrimination against younger employees?

What pros and cons am I missing about older workers?

Regards,

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

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

Why Isn’t President Obama Considered White to The World?

admin — Mon, 12 Apr 2010 09:00:24 +0000

Insensitive statements by Senate Majority Leader Harry Reid (D) not only infuriates many, but also raises one titillating question: Why isn’t President Obama considered white? Obama’s mother is white, and his father is black. He relates more to his white side of the family given his father left him as a child. Hence, isn’t it logical to think Obama is more white than black? Let’s see if we can change Obama’s default setting to the world.

THREE SUGGESTIONS AS TO WHY

1) “He doesn’t look white.”

Well, what does “white” look like? Yes, Obama doesn’t look like a Norwegian Viking, but you can still tell he’s mixed. Since when does being half black mean that he’s full black? If a white person is only supposed to look like Tiger Wood’s wife Elin, then we need to revise what the definition of white is.

2) The media needs something unique to sell.

Saying the first black man wins the Presidency is more eye-catching than saying another rich white man wins. Mitt Romney, with his hundreds of millions would fit right in with the Clintons, Bushes, and Cheneys. However, since we’ve already had 43 Presidents who all look the same, it’s more exciting to have someone new. Everybody loves an underdog story, and Obama’s story is no different.

3) We’re all racist and we don’t even know it.

Senator Harry Reed is unable to see Obama as a white man because he doesn’t fit the stereotype of what a white man should look like. Harry can’t help his racist condition because he was born in 1939. Segregation didn’t end until 1954, so Harry had a good 15+ years of brainwashing to think he’s unjustly superior due to his skin color. Try as Harry may, he’s been influenced far too long to change. Obama, watch out what Harry says about you behind closed doors!

CONCLUSION – WE SEE WHAT WE WANT TO SEE

The definition of the word majority, is simply more than the minority. Since the majority of Americans are white, we can conclude that white America has the majority say in shaping our perceptions, especially in the past.

But, what about tomorrow? Ethnic cultures are mixing at a rapid pace. Are white folks endangered of stereotyping themselves out of existence? That answer depends on whether we can abolish thinking between just white and black. What about Asians, Latinos, and Mixed? If we can include other races, and multi-cultural groups into the main stream, we have a chance of being more balanced.

The better Obama does, the more he will be embraced by his two ethnicities. If it so happens Obama becomes the greatest President in history and finds a cure for cancer while he’s at it, how do you think perceptions will change? In essence, we see what we want to see, and hear what we want to hear. Our biases are so deeply rooted that it takes a mental nuclear bomb to go off before we realize our prejudices.

Just like politicians, the mass media will eventually be influenced by big business. Once the target demographic with the most amount of money is identified, news and opinions will cater towards their cause. Your mission if you choose to accept, is to open your mind and start embracing diversity! Don’t become another Harry Reid decades from now!

****

Famous People Who Aren’t Considered Asian Even Though They’re Half Asian: Dean Cain, Rob Schneider, Vanessa Hudgens, Tiger Woods, Keanu Reeves, Carmen Elektra, Phoebe Cates, and Lou Diamond Philips.

Famous Folks Who Aren’t Considered White Even Though They’re Half White: Booker T. Washington, Bob Marley, Mariah Carey, Thandie Newton, Alicia Keys, Derek Jeter, and Lenny Kravitz.

Readers, why do you think Obama isn’t considered white?

If Obama does a phenomenal job for the next 7 years (very debatable currently), will the media change Obama’s ethnicity to suit their business constituents?

Why is there not a bigger uproar against Senator Harry Reid (D) and his remarks? If a Republican said his words, he’d be booted out of the country!

If you’re not white or black, do you feel left out?

Keigu,

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

Twitter @FinancialSamurai and subscribe to our RSS feed.

The Katana: Holy Crap! Taxes Are Due Soon!

admin — Sun, 11 Apr 2010 09:00:32 +0000

This is the first year where I actually owe money to the government and I’m not too pleased. For all intensive purposes, I should be happy that I got a free multi-thousand loan for the year, but it just feels off. Your typical personal finance blogger will argue that it’s stupid to celebrate a tax refund, but I’m telling you to go right ahead. Tax refunds are good for most people because most people can’t save for cookies!

I’m waiting until the absolute last moment to file because I constantly find errors in the way I’m doing my returns. There’s no doubt in my mind that every single tax return submitted by an individual has at least one error, or sub-optimal input. I generally go over my taxes at least three times before submitting them. It’s in my nature to double and triple check everything when it comes to money.

Doing your own taxes forces you to learn a tremendous amount about your finances. It heightens your awareness, leading to better financial decisions. You learn about things such as deduction limit phases outs, rental property amortization, and alternative minimum taxes all too well.

Once you understand how much income leakage there is, you’ll join the side which wishes for a fair flat tax and a smaller, more efficient government. Too many people just blindly follow what their accountant tells them to do without fully understanding where their money is going. That’s irresponsible. My #1 tax tip for everyone is to do your own taxes at least once. Even if you make mistakes, which you will, you’ll be a better person because if it!

Readers, how many of you do your own taxes? With tax software making things relatively simple nowadays, why not try it out on your own if you don’t now? Taxes are due Thurs, April 15th in case you don’t know.

HIGHLIGHT POSTS FROM AROUND THE SPHERE

“Beware Of The Four Horsemen Of Personal Finance” by Len Penzo, who finally joins the crew. One of the wittiest PF writers around.

“Have You Ever Felt Poor?” asks A Simple Life in France. Only when I had no money.

“How I Paid Off Over $70,000 In Debt And Quit My Job” by Eventual Millionaire highlights her journey in becoming debt free and reaching financial freedom. Love reading triumphant stories!

UPCOMING ON FINANCIAL SAMURAI

After “Doing Anything You Can To Survive“, I’d like to touch upon topics of discrimination and why it exists. Are we a product of our upbringing and how we were raised? Do old habits die hard? Hope you all can join in on the discussion as these topics pertain to all of us.

Keiju,

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

Follow on Twitter @FinancialSamura and subscribe to our RSS feed.

Why Are President Obama And The Democrats Against Charity?

admin — Thu, 01 Apr 2010 09:00:52 +0000

President Obama plans on limiting the tax break for charity deductions to 28%, penalizes those in the 33%, 35%, and soon to be 40% federal income tax brackets. Since the overwhelming majority of charitable contributions come from households, and the overwhelming absolute dollar amount comes from those in the highest tax brackets, one can deduce charitable contributions at the margin will go down in 2011 and beyond. Given this logical conclusion, why are Democrats and President Obama against helping others through monetary means?

Currently, if you are in the 25% tax bracket, you can save 25% in taxes due to your charitable contributions i.e. donate $10,000, save $2,500 off your tax bill. Meanwhile, there is equality among those who pay the highest taxes at 35%. 35% tax payers can equally save 35% in taxes from their donations. So far, so good.

Due to massive government pork spending it’s egregious that politicians now want to not only raise the highest marginal tax bracket from 35% to 40%, but also cut tax breaks on charitable contributions down to 28%! That’s two slaps in the faces of hard working Americans and a punch in the gut for those who need the most help.

BASIC UNDERSTANDING

The essence of charity is to help someone selflessly. I should hope people’s main purpose of giving is not for tax breaks. It’s kind of like going to the outlet mall where people go crazy buying more to save more. It makes no sense, but then again, a lot of people don’t make a lot of sense. So for starters, we are in agreement that most people give out of the goodness of their hearts.

Since some people do ascribe to the buy more, save more mentality, we can conclude there are also people who enjoy giving more to save more on taxes, which is not as crazy at all. The biggest risk for introducing asymmetric tax breaks is the tremendous backlash the wealthy will have against the government. Out of principle, there will be people who will simply refuse to donate at all because of the discrimination they face from the government. This is a very real worry which is starting to permeate already.

GIVE PEOPLE THE POWER TO HELP THEMSELVES

The Democrats are like women who love going out with bad boys just so they can try and fix them. They try to fix the unfix-able because for some reason, these women believe they are holier than these “troubled souls.” Despite getting burned time and time again, they continue to try and change people by expending a tremendous amount of wasted time. Wake up. Some guys don’t want to be helped, so stop forcing yourself on them!

“Care Not Cash” here in San Francisco is one such initiative where we’ve probably sunk more money into the program to try and fix homelessness, rather than just promote ways for the homeless to find jobs to make money for themselves. One organization, called “Street Beat” does exactly that. They’ve created a self-funding newspaper written and produced by the homeless themselves. Those who want to get involved go to HQ and pick out a bundle of the latest edition. The homeless then try and sell each paper for $1 dollar to passerbys, creating a win-win situation for everyone.

Instead of encouraging those with money to donate to organizations who specialize in helping others in various capacities, the government believes they are more efficient in helping the masses through their own government works programs. Clearly, there is a fundamental difference in how a large portion of the population sees things. Are you better at spending your own money, or is someone else better at spending your money for you?

$6 BILLION GO BYE-BYE

Roughly $300 billion of charitable contributions happen each year. It’s estimated that with the enactment of this asymmetric policy against high income earners, there will be a decline of roughly 2%, or $6 billion in charitable contributions per annum. 2% sounds quite conservative, but regardless of the amount, there will be a decline in charity exactly during a time when charities need the money the most!

On the flip side, the government estimates it will collect an extra $30 billion dollars a year to help fund the $1 trillion+ in deficit spending over the coming decade. Riiiight. Deficit spending is just going from bad to less bad. I happily estimate that $20 billion of that money will be used to line the pockets of corrupt politicians and corporations, $5 billion will be used on projects which won’t get finished, while another $5 billion will be used to buy $100 thumbtacks and $500 staplers!

CONCLUSION

Massive deficit spending is clearly wrong because it puts a back-breaking burden on our children and financial system in general. Eventually we have to pay back our debt. In the meantime, we are held hostage by foreigners. If we had no debt, we wouldn’t have to keep on announcing discriminatory practices against certain hard working citizens.

It’s so easy to say, “Well, if they’re rich, they can afford it,” when you’re a student or average income earner. But if you were a recipient of charitable services or donations, the last thing you want is for the rich to be punished more. It’s not OK to punish people and make a new set of standards just because someone is rich.

What I fear is a massive backlash from the rich, who are the main contributors of charities in the first place. Clearly there will be a net decrease in charitable givings at the margin, so why is it that politicians are so against helping the poor and organizations who specialize in helping others? The poor have already suffered enough, let’s not make them suffer some more.

Readers, why do you think President Obama is against helping the poor, but so pro helping the middle class? Do you think it’s because the middle class are the majority of America and therefore are the majority of votes?

Do you think it’s right or fair to impose different standards on giving for wealthy Americans, even though they account for the majority of all givings?

Why not encourage wealthy Americans to give more by increasing the tax breaks?

Keigu,

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

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

The Elegance Of Failure

admin — Wed, 24 Mar 2010 09:00:04 +0000

The following is a guest post from Neal Frankle at Wealth Pilgrim. Neal is a dedicated father, insightful financial adviser, and honorable Yakezie Challenger who always writes with a breath of fresh air. You can join his 2,500+ followers on Twitter @NealFrankle. Enjoy!

Failure is not only a necessary part of life, it can be a beautiful part of life.

This may sound like crazy talk.

After all, if you are a hardworking person, you work hard because you want to succeed, not fail.

And failure stings.

It hurts.

Man….it hurts.

That pain is real….but despite that temporary pain, those set backs are likely key ingredients to your future success. And the success I’m talking about dwarfs financial or career gains.

Let me explain by telling you about an experience I had several years ago.

BACK IN THE MOTHERLAND

When I was in my 20′s, I started a Masters program at the Hebrew University in Jerusalem. My goal was to study in Hebrew with the local students and complete the degree.

This isn’t such a lofty goal in and of itself, but when you consider that I didn’t speak a word of Hebrew 9 months prior to my enrollment, I think you’ll agree that it was quite a challenge – if not insane.

I studied as hard as I could. I worked night and day using every opportunity I could to improve my language skills.

Sure enough my hard work paid off – sort of.

Within 9 months I passed the entrance exam and was admitted to the Hebrew University’s Masters Program for Political Science. My language level tested out as fluent.

And that’s when my problems started.

While my conversational ability was pretty good, I couldn’t understand a word my professors were saying from day 1. I mean not one meshugunah word.

I doubled my studying and put everything I had into it… but it was no use. I didn’t have the skill or ability to learn as quickly as I was required to.

Within 3 weeks, I dropped out and returned to America.

I felt like a complete failure.

It took me years to let go of that experience.

IN AMERICA WHERE MY BUSINESS GROWS

When I came back, I focused all my energy on starting a business and this time, the universe said “YES”. I was fortunate enough to build a very successful business from ground up.

You could say that the door had to close on my Hebrew Political Science dreams in order for the door to open for my business aspirations.

That’s true of course. But had I just stopped there I would have missed a gift far more valuable.

You see, I felt like a loser when I didn’t make it in Israel because I confused having limited skills (in this case, language skills) with being defective myself. Then I felt like a winner as my business grew.

My emotional peace of mind was completely tied and dependent upon my success or failure.

For me, that’ s no way to live.

The elegance is seeing that your success or failure in an endeavor, doesn’t say anything about you as a person. I have limited skills – we all do. So what?

It doesn’t mean you are flawed as a person.

You can apply this lesson if you have financial stress, problems in your career or trouble at home.

If something doesn’t work out, it’s just the universe’s way of telling you to try something different. It’s not a statement about my value as a human being.

There’s a lot of freedom in that. At least I believe there is.

Understanding this makes it easier for me to be objective about how I spend my time. I have less invested in the outcome. All I have to do is my best and let the result go. And if I do my best, what more can I do? In fact, if I have done my best, what right do I have the right to beat myself up?

Please don’t get me wrong. I still believe it’s important to do the best I can. Put everything I have into it. But when things don’t work out, I don’t want to repeat the mistake I made all those years ago. I hope you feel the same way.

CONCLUSION

Don’t let your outcomes define you. It’s unhelpful and it’s untrue. Failure is elegant because it provides a lesson in self that no other classroom or experience provides. It allows us to value ourselves separate and apart from what we can and can’t do.

Readers, what are some of your life failures? Was there ever a case where you were better off failing, than succeeding? Are you afraid of failure?

Keiju,

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

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

Punctuality Breeds Credibility – Stop Being Late!

admin — Fri, 19 Mar 2010 09:00:30 +0000

If I have one pet peeve in life, it’s when people are late. I absolutely cannot stand it when people are late. My face starts contorting after 5 minutes, and I think about walking out and rescheduling on my own damn time after 15 minutes. If I don’t get a text, e-mail or a phone call with a heads up, you are on my sh*t list until you do something to make it up.

Someone important, let’s call him Dr. Shivago, asked if he could speak to me at 7pm this past Sunday. Given the importance of this individual, I decided to cut my dinner short to focus on this business call. At 7:20pm still no call. At 7:25 I get an e-mail from his secretary apologizing that Dr. Shivago needs to reschedule for another time. WTF! Who does Dr. Shivago think he is, a C-level executive of a Fortune 500 firm? Yes, that he may be, but I don’t care.

All was going well with the business proposal until this incident. I refuse to even consider doing any business with Dr. Shivago until he sends a personal note apologizing for his inconsiderateness. Don’t go asking your secretary to reschedule and apologize on your behalf. Apologize directly to me. Have honor.

A LESSON IN SIXTH GRADE

I was 5 minutes late for 6th grade writing class when Mrs. Lubon scolded me in front of everybody and told me to go sit in the corner. She screeched, “Punctuality breeds credibility!” She also told me to stop snapping bras, but that is a different story. I felt bad for my tardiness, and despite being really annoyed I couldn’t shoot spitballs at my buddies, her life lesson stuck ever since.

There is one simple reason why people are late and it pisses me off. The reason is because they believe their time is more precious than your time. It’s not because they are disorganized, have bad time management skills, or are stupid. Someone who is late is selfish, and believes they are more important than you. There is no other explanation. If you want to be on time, you will be on time.

If you are late to a business meeting, interview, or of anything in importance you can kiss your chances good-bye. Practice saying “buh-bye” to yourself. Say it again and again if you are a perpetual tardy machine. You deserve to fail, and fail miserably at that.

THE FLAKER

The equally annoying person is the flaker. The one who promises to be there and always bails at the last moment because something always comes up. Since we realize that everything is rational, the reason why flakers flake is because they don’t believe spending time with you is worth it at all. If the person wanted to be with you, they would be with you. We don’t live in a maximum security prison!

Guys, get a clue. After the second time she cancels on you last minute or forgets to call back, forget about it! She simply doesn’t want to spend time with you. If she did, she would be all over you and then some.

Have a two strikes and you’re out rule. Your time is much too precious to bother with people who don’t respect your time. There are literally millions of people in the world for you to meet. Flakers aren’t any of them!

CONCLUSION

The quickest way to ruining your credibility is being late and flaking. Avoid flakers and tardy people like the H1N1 virus. They are disrespecting you, so you might as well never bother with them ever again.

Readers, what are your thoughts on flakers and those who are always late? Any nice ways to tell them to screw off or at least convey your disappointment? Should I sweep aside my principles and do business with the flaker? What are your pet peeves?

Keiju,

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

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

Sometimes Saving Money Is About Principle

admin — Fri, 05 Mar 2010 16:00:34 +0000

For the past two years I’ve taken the bus to work after driving for 7 years prior. The company removed our free parking benefits and I wasn’t about to pay $350/month to park in a garage just 5 miles away.

I have a love hate relationship with the bus. When it’s raining, and I have to stand outside shivering, I hate it. When the bus skips my stop every so often, I hate it. When the bus driver slams on the brakes a couple feet away from the stop light and we all go flying, I hate it. When the bus is packed like sardines, but there are some very attractive riders I need to squeeze next to, well, I guess it’s OK.

My VIP Pass aka monthly bus pass costs $60, while taking a cab to and from work costs $30. Hence, the cost breakdown is simply $60 for a bus, $350 for parking, and $600 for a cab every month. Out of principle, I wasn’t going to spend 5-10X more on transportation if I could just ride the bus.

WHAT A DUMMY

A funny thing happened to me yesterday. I tried to cheat. Because I was going to work midday, and the express bus wasn’t running anymore, I decided to drive. I got into Moose, drove downtown and left him at my fitness club just five blocks away from my office. The plan was to work for 6 hours, take advantage of the “free parking”, and drive home.

After a hectic day of work, it was so refreshing to come back home and relax. Oddly enough, there was something that felt off and I just couldn’t figure out what. CRAP! I left Moose at the club because I took the bus home instead!

What’s more stressful is that I’m really only supposed to park at the club for a couple hours. They tow and ticket sometimes if the rules are violated. Even though it was dark and freezing, I just couldn’t bring myself to pay $15 to take a taxi to pick up Moose. My objective that day was to save money and time by driving in the first place!

CONCLUSION

If I took a cab, my $60 monthly transportation fee would jump 23% to $75 ($15 for cab), and I wasn’t going to let that happen. With a full belly from dinner, at 7:30pm I decided to bike through the hills, and between the lanes of traffic to save Moose from the pound. Sometimes saving money is just about principle.

Readers, do you think I was foolish to not just spend the $15 to get in a cab and go back downtown given the inconvenience and danger of riding my bike at night? Have you ever done something as stupid, and out of principle decided to go the less convenient route?

Regards,

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

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