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Book Review & Giveaway: The Other 8 Hours

admin — Wed, 28 Apr 2010 09:00:06 +0000

Author: Robert Pagliarini, author of The Six-Day Financial Makeover and president of Pacifica Wealth Advisors. You may have seen him on Dr. Phil or 20/20.

Publisher & Book Info: St. Martin’s Press, hard cover, 301 pages, $25.99.

Review: The main premise for Rob’s book is that everybody’s day is split into three eight hour parts: work, sleep, and everything else. Rob’s hope is to get you motivated to do more during the everything else portion to maximize your own potential. First of all, I don’t know anybody who only works 8 hours a day. 10 hours of work a day seems more realistic. Second, who gets to sleep 8 hours a night? Sounds like elusive bliss to me. Let’s assume 6 hours of nightly sleep instead, which ironically leaves the same 8 hours of time for everything else!

The Other 8 Hours is an enjoyable read because each chapter contains not only practical advice, but real life inspirational stories to help motivate readers to action. Too many times we just come home, plop on the sofa, and do nothing. That’s no way to live. Below are Rob’s top 10 things he recommends doing with your spare time to help increase wealth and purpose.

Top 10 Creator Channels:

1) Blogging

2) Inventing

3) Writing Books, Screenplays, Music

4) Starting A Company

5) Reselling, Affiliating, and Licensing

6) Taking Advantage of Fads/Stunts

7) Working for Stock in a Company

8} Advancing or Jumping Careers

9) Freelancing

10) Turning Hobbies into Income

Blogging definitely has the potential to earn you a few shekels with enough time and dedication. I’ve daydreamed about sitting on my yacht somewhere in the south of France writing to you about saving money on champagne and caviar! Then reality sets in. However it’s always good to dream.

The item that most interests me is #2. Rob dedicates a chapter to each of his 10 creator channels, which is very useful because many don’t know where to start. Rob provides a road map, highlights the pitfalls, and ends each chapter with actual resources you can use. For inventing where do you go to develop a prototype, receive independent reviews, and hire an agent? Many answers are all addressed.

WARNING THAT NEEDS FOLLOWING

One of Rob’s key messages, which I wholeheartedly agree, is to NOT jump head first by quitting your job and investing everything you have in your business idea. I’m sure there will be plenty of those will disagree with this premise. How can you succeed if you don’t put everything you have into your idea? You can, but simply during the other 8 hours!

We always hear the tremendous entrepreneurial success stories, but we seldom ever hear of the failures. Trust me, there are tons of failed ideas, and if you were to invest everything you have in a failed idea, it’s going to take a lot for you to get back to your previous financial state. Be methodical in your approach, test out your product thoroughly, and make sure you see signs of success before you quit your full time job.

CONCLUSION

Who wouldn’t want more time, more money, and a better life? It’s simplistic to say a book will give you all that. However, The Other 8 Hours helps provide a catalyst to get you going. You won’t just read a book that tells you what to do. The Other 8 Hours helps shows you how.

WIN ONE OF TWO BOOKS – CONTEST ENDS ONE WEEK FROM TODAY

* Tweet and follow for one entry.

* Sign up for our RSS or E-mail feed for one entry.

* Comment about a project you are working on during your other 8 hours for one entry. Do you think quitting your job to dedicate everything to your side project makes sense?

* If you have a blog, link back and highlight the contest for three entries.

To find out more about the book click here.

Regards,

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

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

The Katana: Advertising For A Cause

admin — Mon, 25 Jan 2010 09:00:29 +0000

Ready, Set, Go! From now on, all advertising revenue after operating costs will be donated to charity! I’ve finally got off my rump to figure out this peculiar aspect of blogging.

For the past 6 months I’ve been very disinterested in advertising. The only thing that did interest me was practicing “free-writing”, meeting new folks, and learning new things. I played around with various advertising platforms like Adsense early on, and I just scratched my head wondering who would click on ads such as “600% Penny Stocks”? What if the advertiser was a scam? For those who use Adsense, more power to you. It’s my own personal issue for not being entirely comfortable with their platform.

As I learned more about advertising online, I realized there were other solutions to my pre-screening desires. One solution is to sign up with affiliate advertising networks such as LinkShare (thanks Matt Bell), where I can screen hundreds of advertisers beforehand to provide relevant solutions or interests to readers. We still will never know with 100% certainty the veracity of the products (Enron anybody?), but at the very least, it’s one level higher than putting up contextual advertisements where we have no control over.

It’s important that advertising never alters the spirit of this site. We will not be like politicians, swayed by corporate interest groups and their tantalizing dollars. If there’s a product we like we’ll endorse it and introduce the product to others. If not, we just won’t bother no matter how attractive the incentives. Making money online is a learned skill that takes time to cultivate. The best ads are those which are unobtrusive and relevant.

MIND SHIFT

The devastation in Haiti reminds us that if one has the ability to help, no matter how small a way, we should probably do something. I firmly believe that if you breach the Top 100,000 in the Yakezie Alexa Challenge, you can make at least $1,000/month. Hope this motivates some of you.

A major mind shift occurred when I changed the thought of making money for myself to making money for someone else. I’m ashamed to say, but $1,000/month didn’t interest me because it is a relatively small percentage of my income. Ironically, if my income was smaller, I would probably be extremely interested in making money for myself if that makes any sense. In fact, to think about all the hours I put into this site for just $1,000/month would make me want to quit!

To prevent temptation of spending the income on fast cars and fun times in Vegas, my trusted consultant will be the recipient of all advertising revenue. My consultant will donate the proceeds to various local and international charities on this site’s behalf. If there is a way for Advertisers to donate directly to specific charities and never send us any money, that is a good solution as well.

For Advertisers: A permanent Advertise page has been created for your reference.

FAVORITE ARTICLES OF THE WEEK

* “How To Make Money With A Blog” by Pete offers a great resource for all bloggers looking to monetize. The article comes especially handy with this site’s new initiative, as well as for all the aspiring Yakezie members!

* “Chaos Is An Inspiration For Change, But Don’t Wait” by Flexo encourages us to choose our own destiny. Chaos led me to go to business school back in 2001-2003, and the recent financial implosion was the impetus to start this site.

* “Why Doesn’t Anyone Feel Remorse When It Comes To High Income Earners And Taxes?” by E-dog tries to garner sympathy for those in the highest tax brackets. Can you imagine paying $100,000 a year in taxes? Painful. But, don’t feel sorry for them because they’re likely still taking home $300,000 a year after taxes.

Winners of “Get Financially Naked”: Cathy D and @Elle_CM! Please e-mail me your addresses so the publicists can send you copies of this fine book.

The Samurai Fund Update: Still in the green +0.15% vs. -2% for the S&P. Those who are not actively participating are at risk of being replaced due to a high demand of entries.

On Tap for The Week: Book review and giveaway, dealing with delusional people, discussing moral hazard and more!

Thanks everybody for stopping by. With our new initiative, we’re as excited as ever to keep this site going!

Keiju,

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

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

Book Review & Giveaway: “Get Financially Naked”

admin — Thu, 14 Jan 2010 10:00:29 +0000

Author Bios: Manisha Thakor and Sharon Kedar have their MBA’s and CFA’s and are the coauthors of “On My Own Two Feet: A Modern Girl’s Guide To Personal Finance.”

Publisher / Physical Description: Adams Media. Paper back. 148-pages of easy reading.

The Summary: With a tag-line of “how to talk money with your honey,” how can you not like a book with this kind of wit? Personal finance books tend to be a little bit mundane and redundant, but not so with Manisha and Sharon’s latest offering.

The first point of interest simply lies on page two. All page two says is “To All Women…” As I am not a woman, I immediately began preparing myself for some male criticism. Does ‘To All Women” really mean “Stay Away All Men”? To my relief, the real meaning of page two is about empowering women to become financially independent on their own.

Getting financially naked really is about having as clear of an understanding of each partner’s finances as possible. The authors don’t want women to one day wake up realizing all their money is gone after their husband invested their finances in some unscrupulous investment. Women need to have a full grasp of each others finances so that there are no surprises. Even before marriage, our authors go through steps to discover whether a couple is financially compatible. Financial matter shouldn’t be taboo among serious couples.

“The Five Power Steps To Financial Success” provides useful tips on dealing with the five key lifetime expenses: home, car, retirement, kids, and extended family. For better or worse, you get the family too! One of the most eye-popping nugget of information is that the average cost to raise a child from birth to 17 is $184,000! Move to NYC or San Francisco, perhaps that figure is closer to $300,000.

The book concludes with some simple tips on savings and investments, namely with the objective of keeping things simple. But, this is not a book about savings and investments, it’s a book about improving communication. The Appendix contains a wonderful list of answers to scenario questions such as “Should we combine bank accounts now that we’ve moved in together” and “What do we do because I’m a saver and he’s a spender?”

In summary, “Get Financially Naked” is a wonderful little book for women and even men to read. The key message is about improving communication between couples so that money becomes a natural point of discussion. For those women who find opening up about finances to be especially difficult, this book is especially for you! For guys, it’s like reading the occasional Cosmopolitan magazine. Seeing a different perspective helps widen your own perspectives!

GIVEAWAY RULES: TWO PRECIOUS BOOKS!

* Share Your Thoughts On: Why do you think women have a harder time opening up about finances than men? Why is talking about your finances with someone you care about so taboo? Should couples reveal all their financials before marriage, or should that not matter since the union is “for richer or poorer”? Is not talking about money a cultural or gender phenomenon?

* Tweet & sign up for our RSS feed and comment that you’ve done so.

* Entry Deadline is Saturday, January 23rd.

You can learn more about the book here, or buy the book directly from Amazon: Get Financially Naked: How to Talk Money with Your Honey

Keigu,

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

The Katana: Performance, Income Poll, Winners, Good Reads 1/10

admin — Sun, 10 Jan 2010 09:00:56 +0000

The S&P showed five consecutive days of gains in the first week of 2010 to close up 2.68%. Meanwhile, The Samurai Fund (TSF) outperformed by 200 basis points to close up 4.77%! For an actual fund of 17 positions, this is absolutely huge! We are up almost $80,000,000 this week, and if we keep this up, the team is going to get paid like rock stars come year-end!

I’ve put up a permanent tab to track our names to facilitate accountability. If you are one of the 17 contributors, please provide periodic updates in the page to keep this as realistic as possible. There will be a review of the bottom performers end of the quarter, to potentially make room for 3 new entrants. Nobody is safe in this meritocracy!

INCOME POLL: There’s a new poll on the south-right side bar, asking how much money you made in 2009. The poll is totally anonymous, so feel free to contribute. It’ll be interesting to see the income distribution of our community, to help me help you discuss more pertinent things.

FREEDOM FUND: To answer a common question, the Freedom Fund is simply a $1 million cash goal (invested in CD’s or other safer instruments) by year-end 2019. As far as I’m concerned, the Freedom Fund is my “net worth” since the birth of this site in 2009. Current nut size, $96,000.

FAVORITE OVERLOOKED SAMURAI ARTICLE: “Everything Is Rational – The Answer To All Things Irrational” was written over the holidays that sums up the key to all things that don’t make sense. We shouldn’t impose our will on others. Let others be. Also stop feeling sorry for others, they are probably happy just the way they are!

TWITTER: Added a Twitter update widget on the right, which highlights more links and provides further activity if you would like to follow.

COMMENTS: The javasript:void(0) error is fixed so you can click ‘reply,’ ‘quotes’, ‘trackbacks’ in the comments section again. Also, never hesitate to provide links in the comments. It helps us read new stuff, and why I installed the Comment Luv plug-in. Heads up on typos and grammatical errors appreciated.

WHAT’S UPCOMING: Refocusing on some money saving issues. Before you consider converting to a ROTH IRA, please read Monday’s article. We’ll also feature another solid guest post, and a book review and giveaway.

BOOK WINNERS: ThriftyGal and MBA Briefs! Runner up new reader George, MoneyReasons, @RCThinkWealth and a very distant last, Investor Junkie because giving this book to him is like giving Bill Gates a fresh copy of Windows 7. :) Winners e-mail me your mailing addresses, so I can pass along to the publisher.

MOST MEMORABLE READS FROM THE COMMUNITY:

* “Dave Ramsey On Credit Cards: I Love You Dave, But You’re Wrong” by Joel highlights why Dave goes overboard on suggesting folks cut up their credit cards. Joel also produces a very nifty tool he developed highlighting the lifetime COST of the item you purchase on your credit card if you do not pay in full! Check it out.

* “The Magic 8 Ball Makes Its Predictions for 2010″ by all-star stock picker Len “Lenar Corp” Penzo provides an absolutely hilarious post about answers various members of the PF ask.

* “Steady Paycheck vs. Self-Employment — Which Is Right For You?” from Kevin is a question that has fascinated me ever since graduating from college. I had an opportunity to be an entrepreneur in a foreign land, but chose the “stability” of a steady paycheck. What would you have done right?

* “Your Debt Is Your Fault: Stop Reading Self Indulgent Blogs” also by Joel tells it as it is and I’m on the exact same wave length here. Or, we can always just blame others, including the government, and ask for a bailout!

* “20 Reasons Why You Need To Start Travel Now” by David highlights one of my great passions. I don’t think I can not work and travel all the time, but what I can do is look forward to my 2-3, two week trips abroad every year.

* “Old Tianjin Is Destroyed” is a wonderful photolog by Gordie who is teaching English in Tianjin. Showcases the metamorphosis of Tianjin over several years. Somewhat sad, but hope their standards of living improve as a result. Gordie, cool banner btw. Now you guys know I’m a sucker for travel.

* “Mistakes I Made When Opening My Business” by Neal is a very insightful piece for all you entrepreneurs out there to read, and learn from, so you don’t have to do the same duh mistakes Neal made.

* “Be Yourself” by The Writer’s Coin highlights the importance for bloggers to be themselves, or else risk getting lost in the shuffle. You’ve got to admit, there’s some really boring stuff out there, so hit me if the articles here get too stale.

* “PF Bloggers Share Their Top 2010 Predictions” is a good collection from Reedming Riches. The most interesting one is from JD. Hmm.

Keiju,

Financial Samurai – “Slicing Through Money’s Mysteries”

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

Book Review & Giveaway: “Your Money Ratios”

admin — Thu, 07 Jan 2010 09:00:19 +0000

Publisher: The Penguin Group. Hard cover. 257-pages. Price: $26.

Author: Charles Farrell, JD., LL.M., investment adviser with Northstar Investment Advisors, in Denver. He writes the “Retirement Roadmap” column for CBS Moneywatch.

Review: “Your Money Ratios” sings to me! For someone who loves using ratios such as the 1/10th rule for car buying, and 30/30/3 rule for home buying, I absolutely adore this book. Charles’ writing style is very balanced and easy to understand. When it comes to math, many people, including myself fall asleep. But, if you can just do simple division and multiplcation, this book will keep you on the right path towards financial security.

Charles’ “Unifying Theory of Personal Finance” is his core philosophy that all decisions you make should help move you from being a laborer to being a capitalist. In other words, make money work for you, and not the other way around. It’s important that with every single monetary decision you make, you ask yourself will this help you become a capitalist or not.

Capital To Income Ratio

The first ratio Charles introduces is the Capital to Income Ratio (CIR). Capital is defined as the savings in your 401K, IRA, annuities, CDs, cash value of your life insurance, savings, equity in commercial and rental real estate, and the fair market value of any business interests. Capital does not include the equity in your primary residence because it does not generate income. The real return of your home is the rent-free use of the property once you pay off your mortgage.

The underlying goal is for everyone to have a CIR of 12 by age 65 i.e. $1.2 million in capital if you average $100,000. With a CIR of 12, one should be able to retire financially secure while living off 80% of your pre-retirement income due to the returns from capital and social security. While working we probably live on about 60% of your actual income due to expenses such as one’s mortgage, which will no longer be there when we retire.

Your finances hit a tipping point when your Capital to Income Ratio hits 2. At a CIR of 2 your earnings from you capital will generally add more to your wealth than the amount you save each year. Over a 40yr savings cycle, you contribute 30% 70% are from earnings.

The Savings Ratio

To get to a Capital Income Ratio of 12, Charles highlights on two savings rates: Save 12% of your annual income ever year from ages 25-40, and save 15% every year after wards. The math works, and obviously the math works even better if you can save more of your annual income.

To clarify, the Charles’ 12% and 15% savings ratios include your 401K contribution.. Charles believes that your 401K is key to financial independence due to employer matches and tax free contributions.

I challenge readers to max out their 401K and save an additional 12-15% of their gross income. Mentally write off your 401K amount, and pray it’s there at age 59.5. My strong belief is that your net worth is an illusion, except for the cash and most liquid of assets.

Your Debt Ratios

One needs to differentiate between income-producing debt and income-reducing debt When you take on debt, you need to leave enough for you to meet the savings ratio Owning a home and paying of your debt increases your retirement income and helps move you from laborer to capitalist. “Deemed Income” is the investment income you get to keep in retirement because you don’t have to use that income to pay a mortgage or rent.

Education debt, is good debt, but aim to keep it to 75% or less of your average 10 year gross income. Financially, it is better for your kids to take on the debt than you provided they stick to the Education Debt Ratios.

Charles, like others believes there is an education bubble. Tuition costs are ridiculous and will eventually fall because income growth doesn’t support the cost. Charles advises not saving for your kids education before you save for your own! If you don’t save enough for yourself, your kids inherit your financial burden and have to take care of you. Your financial independence is a great gift to your kids.

Your Investment Ratio

It’s all about playing offense (stocks) and defense (bonds) to come out ahead. Charles recommends a permanent 50%/50% allocation your entire working life. I find this too conservative. I like following your age as a percentage to allocate to bonds i.e. if you’re 35, somewhere around 35% of your investments are in fixed income securities.

Charles is super risk adverse because he wants to avoid big losses. As an investment adviser, and given his age, I have a feeling he has seen tons of carnage over these past two investment cycles. A 50% portfolio decline requires a 100% increase to get back to even. A 80% portfolio decline requires a 400% increase!

Social Security – The Point of Contention

Charles fears Congress will go overboard in fixing SS, and create one large wealth-transfer. Despite the “fix”, SS will survive. Lower paid workers get much more out of the system than higher paid-workers, based on their actual contributions. It’s important for everyone to understand the basics of SS, to not change the program from a long term retirement program into a welfare program.

Your FICA tax is 7.65% from you, 7.65% from employer of which 12.4% goes to SS, and 2.9% goes to Medicare. You need to work for at least 10 years for a covered employer before you can receive benefits. Cap is on $106,800 of the income you pay, thank goodness for many. SS adjusts for inflation is great. And if you’re married, your spouse has the right to benefits equal to the higher of his or her OWN benefit, or one half of yours. Not bad!

By the way, if you were born after 1960, the full-retirement date to receive social security benefits is 67! You can decide to take reduced benefits starting at age 62.

Conclusion

“Your Money Ratios” has the potential to be one of 2010′s best sellers in the personal finance space. I love everything about the book, from the tone of the author, to his simple instructions, to the way the book is packaged. There’s no doubt in my mind that if you follow Charles’ instructions, whether you are 25 or 45, you will be able to reach financial independence by 65. Go to your local bookstore or Amazon and check it out!

Go to www.yourmoneyratios.com, type in the code 778811 to check out your ratios and see where you stand!

BOOK GIVEAWAY RULES: Two Books To Win!

* Comment on: What your current Capital to Income ratio is, and whether you think it’s realistic to reach a CIR of 12 by age 65. Feel free to provide your thoughts on why you are satisfied or unsatisfied with your current status and what the right CIR is. Are you maxing out your 401K, and if so, how much more of your gross annual income are you saving? Do you believe full Social Security benefits will exist in 25-30 years?

* Twitter: Retweet and share with your friends. Ideally, you will read the review and share your comments.

* Enlist: Sign up for our e-mail or RSS feed. Let us know in comments.

* Do all three and you have a higher chance of winning. I really want this book to go to someone who really wants it, and will read every page and take it to heart.

* Winners to be announced in the next Katana.

Keigu,

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

Twitter @FinancialSamurai and subscribe to our RSS feed.

Are Credit Cards Weapons Of Mass Financial Destruction?

admin — Wed, 16 Dec 2009 09:00:28 +0000

The answer depends on if your name is Saddam Hussein, although proponents would say no proof was ever found! You hear so many stories of consumers up to their eyeballs in credit card debt, and I’m just wondering WHY? Credit card debt is the most expensive debt out there, second only to usurious rates of loan sharks.

Perhaps the reason why is because credit cards are ubiquitous. According to the US Census Bureau, there were 173 million credit cardholders in the US in 2006, using 1.5 billion credit cards? That’s right, the ratio is almost 10 credit cards to every one user, with transaction volumes of over $2 trillion a year! No wonder the US consumer gets in trouble, and why credit cards are such big business!

My view on credit cards is quite simple: Use credit cards only to your advantage, and never let them take advantage of you! Whenever you see your credit card misbehaving, you should think to yourself “Bad boy! Bad, BAD!” I think my wife tells me this sometimes, but I try and tune it out.

Joel is hosting a $500 American Express giveaway, and gosh darnit, I’m entering to give myself a chance to win. In “You’re Rejected! How I Use Rejection To Motivate Me Every Single Day,” we discuss how success is a numbers game. The more you put yourself out there, the higher the chance you have to succeed. Here’s my attempt to win and use the proceeds to buy toys and clothing for underprivileged children this winter in San Francisco. The program is called “Toys 4 Tots.”

TWO MISSLES IN MY WALLET

My first card is the American Express Corporate Card necessary for business bookkeeping purposes. You see, all client expenses must be paid for by my Corporate AMEX card so the company can match costs with profits. Makes, sense. Too bad I have to pay the bill every month, and then get reimbursed, thereby creating unnecessary delays, negative working capital, and occasional late fees. There was a time when having an AMEX Corporate Card was very cool (your early 20′s), but it soon gets old. At least their service is solid.

The second card is my personal Citibank Home Rebate card which gives me a 1% rebate on all purchases to pay off the principal of my primary residence. I’ve had the card for six years, and the card has paid off more than $1,700 worth of principal already. What’s more interesting to note is that based off a 5-6% mortgage interest rate, the real savings is thousands and thousands more because of interest saved over time.

Of course, nothing is perfect. I woke up one day to find my 6.99% Citibank Home Rebate Credit Card rate jump to 14.99% duringthe height of the recession last year. Funny, because the 10-yr yield was still in the low 3%-range, and the Fed Funds rate was below 1%. This pissed me off, and I immediately called them to lower the rate. Again, don’t let credit card companies and banks take advantage of you.

PACKING AN A-BOMB

If someone were to kidnap my pet rabbit and force me to sign-up for another credit card to save his life, I would have to pick the Visa Black Card. The selection of credit cards Joel provides is impressive, but only the Visa Black Card is well, black. In addition, the description says “Membership limited to only 1% of US residents!” Don’t you want to feel special if you pack a new financial weapon of mass……… joy?

WEAPONS FOR PEACE

A credit card is a wonderful financial tool if used properly. I put everything on my personal credit card because 1) It helps record all my transactions which are divided into different categories I can review every month, 2) The 1% home rebate saves me money, but is not the primary reason for use, 3) I don’t like carrying over $100 in cash, and 4) A credit card provides consumer protection against fraud and defects.

But I must ask again, why on earth would you EVER not pay off your bill in full every month? Not doing so is akin to pulling the grenade pin and not letting go! Did you know that if you paid off $999 of your $1,000 balance, most credit cards will charge you interest on the full $1,000 balance? Credit Card companies are marketing geniuses. Make sure you’re Albert Einstein.

The credit card companies already make a small commission off the vendor every time you use the card, don’t let them charge you interest as well! Credit cards are not weapons of mass financial distraction if used properly. Instead, they are a necessary part of day-to-day transactions, and there seems to be no turning back.

OTHER HANDY USES FOR CREDIT CARDS:

1) Spatula when there’s a hole in the wall to fill with caulk.

2) Ninja star when I’m in a dark alley and someone is coming after me.

3) Babe magnets at a bar when I tell the bartender to “leave it open.”

4) Lock pick when I leave my keys in the house.

5) Tooth pick after a good ‘ol San Francisco crab feast.

Readers, do you think those vehemently against credit cards are weak because they cannot control their own spending habits?

Why wouldn’t everybody want to own at least one credit card due to the free 30 day borrow, fraud protection, and convenience?

Why do people continuously let credit card companies take advantage of them like masochists?

Do you think this post can win the challenge given it’s a dedicated post (vs. just a mention in a wrap), provides some educational value, contains a little bit of humor, doesn’t mince words, follows instructions by providing a link to one of the credit cards on Joel’s list, and more importantly, helps provide toys and other benefits for children?

For more info on the challenge, check out Joel’s CC AMEX giveaway challenge.

Keigu,

Financial Samurai – “Slicing Through Money’s Mysteries”

Twitter @FinancialSamurai and subscribe to our RSS feed.

The World Stock Markets Are Crashing & You’re Going Shopping?!

admin — Fri, 27 Nov 2009 14:14:32 +0000

Can you spot the heli-pad?

It’s Black Shopping Weekend and world stock markets are crumbling anywhere between 2-5% because Dubai World, the country’s main investing arm can’t pay its $60bn in debt for another 6 months!

Who would have thought that one of the most glitzy countries in the world would have trouble paying their own debt on time? The fear of systemic contagion is real as investors sell first, and ask questions later.

If Dubai can’t pay their debts, who else can’t? The US of course, but that’s OK! Everybody will fund our debt as you observe the US dollar and US treasuries strengthen. Don’t believe me? The 10-yr US treasury yield has dipped below 3.25% again. What inflation? Cheap money forever!

Investors around the world can mock us, and debase our weak currency all they want! You shouldn’t care, because all you have to do is watch what investors DO and not what they say. Investors are rushing in to our arms today crying “We love you America! Give us shelter!”

So many have disagreed with our “A Weak Dollar Doesn’t Matter Folks!” thesis. Yet so many are going to shop till they drop for pieces of junk they shouldn’t be buying in the first place! It’s Black Friday every day at Ross, TJ Max, and Craigslist, so save your stress and relax! If you go shopping today and check your 401k and stock accounts when you return, you might just have to go back on Monday and return everything!

* CONTEST * Predict where the Dow Jones closes today (11/27) and win a free pat on the back! I predict 10,288. I’ll also highlight the winner in my weekly Katana wrap.

Readers, are there any out there who are relaxing at home in their pajamas being entertained by the media coverage of shopping frenzy? Why don’t people just shop on-line instead, given similar deals? If you make $20/hr from work, but stand in line for 5 hours to save $100 on a laptop, doesn’t the bring you back to even?

Dale Siegel is offering a second “The New Rules of Mortgage” book as a giveaway. Why not just comment and give yourself a chance to win? What’s cheaper than FREE?

Keigu,

Financial Samurai - “Slicing Through Money’s Mysteries”

Twitter @FinancialSamura and sign up for our RSS feed.

Samurai Reflections of October & Goals for November

admin — Sun, 01 Nov 2009 08:00:41 +0000

"Fall" by Step Into Color

Just like that, another month has come and gone. I’m determined to make November as productive a month as October. Who’s with me? Below is a recap of October and what’s in store for this month.

HIGHLIGHT POSTS FOR OCTOBER:

“We’re Ignorant Idiots! Tell Us Why A Flat Tax System Isn’t Fair!” - Is the first post to break the 100+ comment barrier as folks argue passionately about why we are ignorant idiots! Thanks Larry, Roger, Steph, Fredt, Matt, Kevin, BG, FB, Jon, Mike, Wookie and all of you for chiming in so passionately! The key takeaways from the comments are: 1) Most are opposed to a flat tax system for some odd reason :) 2) An introduction of a “wealth tax” and/or “national sales tax” seems more equitable but frankly unfeasible 3) The really rich pay less taxes because most of their income comes from long term capital gains which is currently being taxed at 15%!

“What Renting DVD’s Teaches Us About CD Yield Maximization” - This is an original concept that slaps traditional CD laddering strategies in the face. It was interesting to see the post picked up by The Bogleheads forum and debated there since those guys are usually hardcore on financial issues. The bottom line: Regardless of the interest rate environment, one’s CD money should always be invested in the longest term duration possible.

“Party Like It’s 1999! 10 Key Takeaways From This Recession” - The recession is officially over as we grew 3.5% year over year (YoY) in 3Q09. As we move into 4Q09 and 1Q10 results season, earnings will see a material YoY pick up partly due to low comparables from 3Q08 and 1Q09 levels. Accepting the economic recovery is one thing, but investing new money in the markets at these levels is another. I’m staying very defensive as I believe November is going to be another volatile month, vulnerable to a pullback.

“The Worst Seat On An Airplane Is The Best Seat In The Office” - This is a very simple but highly effective concept for those in offices who wish to increase their recognition. If ever you have an office move, or see a spot near the rest room, take it! You can buy me a beer 1 year later when you become the most popular guy in your office.

“The 30/30/3 Principle For Home Buyers To Follow” - Home buying is such an emotional decision, to counteract irrational thinking, we offer a simple guideline to follow before mortgaging your life away. If everybody followed the 30/30/3 principle, we never would have had such a blow up in the economy. In fact, the government should introduce a bill mandating a minimum amount of financial fitness before people can spend a multiple of their yearly income on housing.

“Why Becoming Debt Free Is NOT A Good Idea!” - This is a very comprehensive guest post by Larry Ludwig where he provides six good reasons why having debt is good for the body. It’s always good to think about the counter arguments since much of the personal finance community focuses on debt eradication. If you would like to do a guest post on Financial Samurai, please feel free to e-mail us and send a sample or outline.

GOALS FOR NOVEMBER & WHAT’S IN STORE

* Spend again. After 61 days of not spending any money on anything other than food and my monthly bus pass (chicks dig it), it’s time to spend a little on others! Going for two months without splurging on anything has been quit liberating. I would do it for a third month if it wasn’t for the holidays. I receive some generous things from others on occasion, and it wouldn’t be proper to not return their generosity. Here are five tips for spending less and being ok with it!

* Get a better grasp of Twitter and the functions of WordPress. I am a complete moron when it comes to computers and the internet. I don’t know how to write HTML code, and I don’t know why Twitter says sometimes, “URL doesn’t match story” when I attempt to Tweet stuff. I’m going to sit down with a friendly web savvy guy for at least an hour this month to get smarter. Because of work, I can’t tweet/retweet during the day, and therefore am unable to recognize your shout-outs so I apologize to those for missing your stuff.

* Continue writing consistently. I understand why some publishers flame out because writing consistently is quite a challenge. I’m just going to publish whenever I feel there is something to say. My average seems to be 3.5X a week, which is a healthy amount. It’s really the comments and the community that keeps me going (See The Ideal Reader tab). Don’t feel shy posting your comments in older posts because I see them all and will debate you to the end!

* Build three new relationships within the PF writers community. There are so many great writers with interesting angles, I figure if I can get to know at least three a month, in three years that’ll be a good 108 relationships to have!

I’m always open to receiving e-mails/comments from you on some good posts you’ve written or seen that I should read and therefore highlight here. It’s just fun meeting new people and learning new things. Matt Jabs, Neal Frankle, Studenomist, Matt SF, Len Penzo, Jim, Silicon Valley Blogger and Green Panda have been six cool guys and two cool ladies I’ve recently had the pleasure to interact with. David Ning, J. Money, Patrick from CML, Brian, and the Wise Bread crew have continued to be really great and responsive to my dumb inquiries.

* Interview fascinating people and learn from them. Finally, I’m intrigued with people’s lives and the decisions they’ve made a long the way to help them succeed. I’m pretty certain my life would be totally different if I went to a different school for example, but it’s the only life I know right now. Haven’t you ever wondered what your life would be like if you chose a different path? Through the interview series, we get a chance to experience other people’s adventures, which hopefully energizes us to seek our own.

Here’s to another solid month!

Keigu,

Financial Samurai - “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamurai and sign up for our RSS feed.

And The First $1,000 MBA Giveaway Winner Is………..

admin — Sat, 31 Oct 2009 08:00:07 +0000

The first winner is Eric, a senior from UCLA! Eric commented sincerely about his concerns post graduation, and whether or not it is a good idea to go to a “2nd tier” business school or just work for whatever company that hires him first.

We’ll be working with Eric to strategize a plan after UCLA and coach him through the process of finding a job in his desired field of finance, or applying to business school.

A Special Thanks To The Following For Retweeting:

@EvolutionWealth from Evolution of Wealth

@MinorityFortune from Minority Fortune

@WiseBread from Wise Bread

@MoneyNing from MoneyNing

@Green_Panda from Green Panda Treehouse

@Studenomics from Studenomics

@BudgetsareSexy from Budgets Are Sexy

@BrianScheur from My Next Buck

@SarahTownes

@CJBowker

We’ve decided to keep the competition open for another week to see if there are any other folks out there interested since we said there would be two winners! How many times have you gone on Craigslist to inquire about that something you’ve wanted, to only find out it was sold! We hope by extending the competition we’ll be able to give more people a chance to discover our giveaway.

Twitters please feel free to e-mail me as well about your interests, because besides being so generous about retweeting, I’m not entirely sure whether some of you are at this time interested in applying to b-school.

We’d love to help so don’t be shy. Happy Halloween!

“Go To Grad School, Get Rich Or Die Trying”

“Survey Says: Get A 3.9 GPA and 1,300 On Your SAT’s And You’re Set For Life”

Best,

Financial Samurai – “Slicing Through Money’s Mysteries”

Twitter @FinancialSamurai and subscribe to our RSS feed.

Financial Samurai $1,000 Giveaway & Your Chance To Make Millions Over Your Career!

admin — Mon, 26 Oct 2009 07:25:28 +0000

“It’s not whether you have your MBA, it’s where it came from,” writes John Micklethwait, Editor-In-Chief of The Economist. I’m sure on at least two levels, he’s upsetting people. On one level, those without MBA’s are going to find it presumptuous that getting an MBA is a foregone conclusion. On another level, there are thousands of MBA grads who didn’t attend the top tier schools who will take offense as well.

John is smart to be so opinionated because after all, the people who will be buying his magazine are those who have always wondered whether getting an MBA is a good idea. He forces the assumption that if you picked up his magazine, you must get an MBA, and not just any MBA, but one of the top schools from his polls.

I don’t entirely agree with John, but let’s face reality, getting an MBA is gradually becoming the new standard for newcomers to the world of finance because some go-getter decided it was the right thing to do and succeeded to get others to follow. The MBA is also too expensive to not try and go to the best school possible (although it’s not the end of the world). The inertia is too strong to reverse now!

Here are some of the takeaways from the magazine:

1) The average MBA graduate from all schools in the world earn about $90,000. European MBA graduates earn $107,000, compared to $70,000 in Asia.

2) The Top 10 US MBA schools have an average salary + bonus figure of $120,000 – $125,000 post graduation.

3) All six of the American schools in the top ten have average GMAT scores of over 710 (out of 800). In contrast, students at London average 693, at IESE 685 and at IMD just 675.

4) The rankings are based on what the students want: increased pay, to open new career opportunities, develop a larger network, and personal development.

5) “Cheap” programs regularly cost well over $100,000 after accounting for lost wages, tuition, books and living expenses. More emphasis should be put on part-time programs and their benefits given the costs.

SAMURAI $1,000 READER GIVEAWAY

I think it’s pretty clear by now there are enormous monetary benefits of getting your MBA from one of the top schools. We highlighted last week those with graduate degrees have net worth levels 160% higher than those with only bachelor degrees. If you want to make more money, know that an MBA helps your cause tremendously.

The giveaway we are proposing is $1,000 worth of consulting advice to give you the highest chance of getting into your dream school! Getting into a top tier business school could mean the difference of making millions over your post grad career. Go to any MBA consulting service, and they often charge much more. In fact, I was surfing the web and found that a site called “Personal MBA” charges $1,500 to coach someone 2 hours a week for a month for someone to get a “Personal MBA!” (not a real credential, but a great service and good idea!).

What We (Editor and I) Are Going to Do For You:

* We are going to be brutally honest and tell you whether your application has a chance or not. Your parents and friends are nice, but can’t be trusted to tell you the whole truth!

* Good or not, we will optimize your resume, essays, and overall application. You need as many objective eyeballs reviewing your application as possible!

* We will conduct two mock interviews and provide communication tips you need to work on, because frankly, communication is one of the key deciding factors.

* We will will be as involved as you want us to be and are committed to spending up to 8 hours just on your application.

We Think We Are Qualified Because:

1) We both have MBA’s from a couple of the top 10 school listed in The Economist’s rankings above. We’ve also been accepted to several other business schools and have a proven record for success.

2) We have interviewed over 150 MBA candidates in our careers post grad and more than 400 candidates if you include undergraduate candidates. In fact, I (FS) was just at a Haas Berkeley recruiting fair last month for 3 hours. We are the end game (a post MBA employer), and have a solid grasp of what an ideal candidate looks like.

3) We know how the admissions process works and what they look for. How? We have developed friendships with senior people in the admissions department.

We might be small fish in the personal finance blogosphere, but believe me when I tell you one of us, was a very senior executive at a major Fortune 500 firm, and I am no dog chow either. We genuinely just want to help and are not driven by money as evidenced by the lack of ads on the site.

Maybe you’re not interested in getting your MBA, but you have a friend who does. Please feel free to let them know.

To Participate Simply Do One or More of The Following:

* Provide a comment as to why exactly you want to get your MBA and why you disagree or agree with The Economist’s ranking.

* Twitter this post and let me know you’ve done so. Our address is @FinancialSamura

* Tell someone at a major media publication about our giveaway and let us know who. Frankly, if this post gets picked up by The New York Times, you win!

* Invite friends to Financial Samurai by highlighting this post, or any post in our archives on your Facebook “What’s On Your Mind?” box. Have them comment “(Your name) sent me” and any other thoughts as evidence.

Winners Will Be Announced on Sun, Nov 8!

There will be one main winner, and one minor winner based on who are the best publicists. Maybe nobody will be interested, but maybe the internet will work its magic and find people who believe in the degree, and care about their careers, especially since round 1 applications are due in November. It will truly be interesting to see how this promotion evolves or not, and will be the topic of a future post.

People are spending thousands of dollars on GMAT courses as well as personal consultants. High GMAT scores alone aren’t good enough. In fact, I’ve seen plenty of sub 600 GMAT scores and poor undergrad GPA candidates get into top schools. The difference is your overall application, communication skills, and whether you have a connection helping you succeed. This is our attempt at evening the odds!

If you build a relationship with us, by the time you graduate, you’ll have some of your biggest champions introducing you to various people in the private equity, investment banking, management consulting and start up arena. How much is your future worth?

“Go To Grad School, Get Rich Or Die Trying” (a second chance at school in case you messed up the first time)

“To MBA or Not To MBA” (what went through my head when I was deciding whether to go)

“The First $1,000 MBA Giveaway Winner Is…..”

Keigu,

Financial Samurai – “Slicing Through Money’s Mysteries”

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