I’m somewhat obsessed with physical fitness right now.  It’s surprising, because the new year’s health push usually dissipates by February!  Just yesterday I thought, “What’s the point of being thin if I don’t have four pack abs?“  And then I started thinking what kind of person thinks about these types of questions?  Pretty unproductive and pointless if you ask me.

I’ve come to the conclusion that those with the highest self-esteem are the least fit and most indebted people on Earth.  Meanwhile, those who constantly think about their looks, and who are always at the gym exercising and pumping iron have the lowest self-esteem.  They are constantly checking themselves in the mirror to admire their physiques, even though they already know they look fine.

Think about the extreme case of anorexia.  Despite being thinner than the average person, the person who is inflicted with this disease doesn’t have the self-esteem to recognize their own beauty and stop punishing themselves.  Now think about the morbidly obese person.  Is this also a disease as well?  The person doesn’t really care what you think of him or her.

YOU ARE WHO YOU WANT TO BE

Everything is pretty logical.  Nobody gains weight unless they want to.  The pleasure of eating really tasty food and not having to work out outweighs any annoyance that gaining weight produces.  If you were truly bothered by your weight gain, you’d logically start eating less, think about the starvation of others, and start working out.

When you have high self-esteem, you don’t give a damn what other people think about you.  You live your life with pride and purpose and don’t care if you’re tipping the scales because you’re comfortable with who you are.  The same thing with getting in debt too.  You don’t listen to pundits and people who like to shame folks into spending responsibility.  You utilize debt with freedom, enjoying a great life you cannot technically afford because you don’t care.

Look at multi-millionaire Dr. Phil.  He’s overweight, yet he wrote a weight loss book!  That takes great self-esteem and great courage to be able to produce a book teaching others how to lose weight if you yourself are out of shape.   He doesn’t care and makes millions because of it.  Look at Oprah.  She’s not in great shape, but she is a billionaire because she has great confidence in her message.  She helps others and makes people happy.

FIT PEOPLE ARE WEAK

If you go to the gym, you’ll see some enormously buff guys and extremely toned women working their tails off.  They are already at their peak level of fitness.  Running another 1 mile isn’t going to get them anywhere!  You will notice the guy checking out his abs and biceps in the mirror.  Sneaking a peak at himself.  The woman will check out her butt, in her $100 Lululemon outfit and admire herself.  She’ll prance around the gym, making sure other guys notice her.

Fit people are weak and insecure!  You can see it everywhere.  The vertically challenged guy gets huge.  The insecure woman eats so little so she can get into a size zero and feel better about herself.  I’ve got some insecurities because I’ve had thoughts about my fitness and weight since I was 8 years old.  I remember sucking in my gut when I was 9 during swim class because I didn’t want the girl I liked to think I was fat!  9 years old!  Jee whiz.

The next time you see a really out of shape person who is snowed under a mountain of debt, congratulate them for their courage!  Sit down with them and try and figure out how they developed such great self-esteem.  Chances are, they will simply tell you that they’ve stopped caring about what other people think.  Our own confidence is one of our greatest tools for achieving success.  Make sure you have some, and don’t ever let it go!

Readers, do you think fit people have lower or higher self-esteem?  If you are already so fit already, isn’t it kind of pointless to go on a diet and exercise constantly?  How about the less fit?

Best,

Sam

The nearby Kentucky Fried Chicken has a help wanted sign up for the past 6 weeks.  I asked the manager how the hunt was going when I picked up my bucket of goodness and he said nobody was applying.

They pay $10 an hour for up to 8 hour shifts a day.  That’s $400 a week and $1,600 a month.  Not bad right?  I think so, even for a city like San Francisco.  For $1,600 a month, you can rent a room with a couple housemates for $700 a month, and have $900 a month left over for food and entertainment.  Not bad if you’re single.

If you’ve got a family to support, $1,600 in San Francisco is not going to get you very far, which is why many move out of San Francisco to one of the burbs and commute.

KFC’s inability to hire got me wondering: Is unemployment really 10%?  Everyday, you see the media drone on and on about how bad the employment market is.  I truly empathize with anybody out of work who wants to work.  However, if KFC can’t find a position for 6 weeks, perhaps the employment picture is actually much better than perception.

The city of San Francisco is hopping.  There is more money out there than you think.  I couldn’t get a cab for 50 minutes the other day from downtown to the gym.  I gave up and ended up jogging 3 miles in the rain in my work clothes and 20 pound bag.  Shit, that sucked.  I asked my well-to-do friend who is approaching his 80th week of collecting unemployment insurance how much he gets and how he’s doing.  He said roughly $450 a week, which he spends on going out at night.  He’s having a great time.

WHAT WOULD YOU DO IF YOU WERE UNEMPLOYED?

I actually think about it once every couple of weeks thanks to the media and my own paranoia.  The truth of the matter is, I’d probably collect the maximum amount of unemployment possible in order to find the ideal job.  I would hold out until the very end.  It’s the rational thing to do.  However, when the unemployment benefits run out, I will be the first person to apply for the KFC job and then blog about it!

If for some miracle I had no savings after 10, 15, 20, 25 years of working, I would be the best damn deep fryer on the planet! I used to work for $3 an hour at McDonald’s and know what it takes to be a star in the fast food industry.  I’d work hard for my $1,600 a month and I would spend less than $100 a month on food because I’ll be stuffing my face with all the fried chicken, mash potatoes, biscuits, corn, and coleslaw I can!  I’d also take home all the leftovers which are thrown out at the end of the day anyway and feed others.

In fact, I would work hard to try and get promoted to manager and potentially double my income to $20/hour or $3,200 a month.  I’d still look for that ideal job, but I would also be making the best of my time at KFC.

MAYBE THINGS ARE JUST DANDY

Seriously, for all the negativity regarding unemployment, maybe we have very little to worry about.  If you are under 40, you can go back and live at home with your parents or relatives.  If you’re over 40, so sorry.  If you’ve had the luxury of working for 20+ years before becoming unemployed, you likely have a huge safety net to last you a while.  Think about it.  Saving just $10,000 a year for 20 years, 20 years ago and investing the proceeds probably leaves you with at least $300,000 in savings.

Finally, if you have absolutely nothing, you at least have a 13-month extension of the 99 weeks of unemployment which pay some $1,700 a month in many cities.  Once the 99 weeks runs out, there’s KFC for $1,600 a month and free food.  Couldn’t you live off $1,600 a month with free food?  I know I can.

Note: Just the other day, I was sitting on the ski-lift chatting with a guy.  I asked him whether he is taking the week off since it’s a Wednesday, and he said, “Nope!  Got laid off in December and am taking the winter off with a great severance package, healthcare, and unemployment checks until I plan to start looking again in April.  I’ve already got two job offers but I want to ski!“  Now that is the way to live!

Readers, do you think the unemployment situation is actually much better than the 10% unemployment rate would dictate?  Why do you think it’s taken 6 weeks and counting for the KFC to find someone to work for them for $1,600/month?

If you’re 45 years old and have been working for 23 years, isn’t 23 years of savings enough to hold you through several years vs. a younger person, say 27 who has only had 5 years to save?

Regards,

Sam

About a month ago, I went to an open house and met a realtor named Sally.  I was immediately drawn to Sally due to her wealth of knowledge.  I’m currently very interested in building my real estate portfolio given the lag in property prices and very attractive rental yields vs. borrowing costs.  As a result, we got to talking and we agreed to have a follow up conversation during happy hour sometime in the future.  Realtors are always looking for new clients and I’m always looking to get up to date about the real estate environment.  This post is not a topic of whether one should be buying property now.  This post is about deciding who pays the bill.

The last time I let a woman pay the bill was never, especially for an acquaintance I hardly know.  In fact, even for new male acquaintances, I always pay the bill.  It’s just the way I grew up.  I asked the Twitter community whether I should pay or not since I am a prospective client, and I immediately got a range of responses from “don’t be that guy,” to “you are sexist for even thinking about wondering whether you should pay.”  Pretty tough responses, which leads me to believe that sharing any questions I have in public just opens oneself out for attack.  I also understand why people shy away from others and keeps things to themselves.

THE REASON

The reason why I was conflicted was because I didn’t want the real estate agent thinking I was being presumptuous and sexist for paying, or letting her feel she needed to reciprocate in any way.  I didn’t want her thinking just because I was the guy, that I should pay.  Then again, hardly any women I’ve been out with have ever insisted on paying, and when they do offer to pay, I can tell they are just being courteous and not entirely serious, which is something I do appreciate.  I hate that moment of awkwardness when the bill comes and nobody takes initiative to grab the bill.

I grew up in a culture that basically requires you to fight tooth and nail to pay the bill.  I’ve seen my parents climb over their fellow diners, fighting to take care of the cheque.  I’ve seen friends pretend to go to the bathroom an hour into dinner, to actually go find the server to pay the bill without us knowing!  I’ve seen adults proclaim that another party is dishonoring them if they dare pay for them too!

If anybody REALLY wants to pay the bill they can.  Perhaps I’m just more determined than others?  It’s kind of like when I go out on the tennis court and my opponent who is on a 5 match losing streak and is supposed to bring balls asks, “Do you have balls?”  We’re playing at a damn tennis club that sells tons of balls so you asking whether I have balls just means you don’t want to provide balls.  But by golly, if you are going out for a drink with me, I plan on paying!  And that’s what I did.  I ended up paying the $60 bill.  She didn’t offer to pay, and I didn’t expect her to.  I was happy to pay, and she was happy to spend some time to get to know me.

Readers, are men sexist for wanting to pay the bill?  If you really wanted to pay the bill, do you think you could?  Should women be more aggressive in paying the bill?  Is chivalry a synonym for sexist pig?  Is the woman who said she is offended by my question on Twitter ever going to find a man?

Regards,

Sam

If you want to harass me on Twitter you can follow @FinancialSamura or sign up for my RSS feed.

I did some spring cleaning the other day and found two credit cards in my drawer which I totally forgot I had!  One was a Home Depot credit card I got three years ago at the check out counter because I could save 15% off my $3,000 purchase immediately.  The other card was a Banana Republic card that I applied for also three years ago to save 10% off my $1,300 purchase of a couple new suits, shirts, and shoes.  Both cards have zero balances, and neither have been used since the initial purchases!

My first reaction was to close both cards since I didn’t want someone risking get a hold of them and going crazy buying Brazilian rosewood floors at Home Depot or alligator shoes at Banana Republic or something.  In essence, I wanted peace of mind and so, I closed both cards.  To my surprise, I didn’t get a hard sell to leave them open.  I pressed several buttons on my cell phone and both cards are now shutdown.  Ahhh, so nice to not have to worry and have less potential holes to leak wealth.

SHOULD I HAVE CLOSED THEM THOUGH?

It was only after I closed both cards did I begin to wonder what effect it would have on my credit score and other negative repercussions.  You may have some of these same thoughts too so here are some some tips before you close them:

1) If the card is your only credit card, you probably don’t want to cancel it. To build a good credit score, you need to prove you can handle credit!  Hence, even if you never use your credit card and hate credit, you should have one credit card open and never close it.

2) If the card has a long credit history, think twice before closing it. Your credit score is also based on your credit history i.e. a 20 year history of paying off your account is worth more than a 2 year history.  If the card is your oldest card, keep it.

3) If the card has a large credit line compared to your overall credit, think thrice about closing it.  If your overall access to credit is $15,000 between 3 cards, and one card has $10,000 of credit, you should probably think about closing the other two cards before your main credit line card.

4) If your card’s rate is lower than the rest, keep it. The two credit cards I closed probably had a rate of 20%+ because they are merchant credit cards.  Nobody should be stupid enough to use those cards and NOT pay them off in the first billing cycle.

5) If your card is tied to multiple payment accounts, you may want to reconsider. Imagine if a card is tied to your Amazon account, fitness club account, car insurance account, and home alarm bill.  What a pain in the butt to close and re-fill out all the forms.

IMPORTANT: If you have addictive tendencies such as gambling, smoking, over eating, cheating and so forth, you probably don’t want to have more than one credit card, or even one credit card, period.  It’s important to know thyself and figure out whether you can handle paying for things on credit and paying off the balance every month.  Work on kicking your addictive habits first, before using a credit card.

OPENING UP STORE CREDIT CARDS TO SAVE MONEY

If I spend more than $1,500 and there is a 10% savings at checkout I probably will spend 5 minutes to fill out a form for a store credit card.  Call me a sucker for saving money, but that’s what I like to do on things I plan on purchasing anyway.  I don’t go shopping much at all, but when I do, I’m willing to do a lot to reduce my bill.  Furthermore, I always pay off the bill in the first billing cycle, or before the 0% interest rate ends.  To do otherwise is just illogical.

I have worried about how opening up new lines of credit affects my credit score, but I’ve stopped worrying.  First of all, the credit lines are so small compared to my overall credit that it doesn’t make a difference.  I always pay off the bill in full, so it doesn’t negatively affect my score.  And finally, there’s no point in overly worrying about your credit score if you consistently pay your bills on time.

What’s in my wallet: two credit cards (personal and corporate), ID, health insurance card, ATM card, car insurance card.  $40 bucks.

Readers, have you ever found a credit card that’s open you forgot you had?  How many credit cards do you have?  Do people who ban credit completely have addictive tendencies?  How’s your credit score?

Regards,

Sam

You might have heard recently that an unemployed architect by the name of Mark Epple found a whopping 12 carat, yellow diamond ring when he and his family was skiing in Vail.  The first thing that came to mind was who wears a 12 carat diamond ring?  That must be so gaudy!  My second thought was what is an unemployed guy doing spending thousands of dollars flying his family to Vail to go skiing?  Each lift ticket costs $100, not to mention lodging and food for the family.  Finally, I wondered whether I would return the 12 carat diamond ring if I was unemployed.

It’s easy to argue not to return the ring.  Anybody who can afford a 12 carat diamond ring probably isn’t hurting for money.  It turns out the original owners have a vacation home near Vail, so that sort of proves the point.  Based on the new rule of engagement ring buying, a husband can get away with spending up to the value of his car for his bride to be.  Cheap car, cheap ring!

And based on my 1/10th rule of car buying, one doesn’t spend no more than 1/10th their annual gross income on a car.  In other words, this couple is earning at least $2,000,000 a year.  Furthermore, they probably have personal property insurance coverage like so many do with expensive jewelry.

It’s also easy to argue for why one should return the ring.  If you lose something of value, you certainly hope someone will have the decency to return what doesn’t belong to them.  I’ve lost everything under the sun before and am so grateful when someone returns my lost item.  Furthermore, it’s not like you can easily sell a 12 carat diamond ring without bringing any attention to yourself.  The largest engagement ring I’ve ever seen is 6 carats, and that was just ridiculous.  Finally, if you do happen to return something of great value, more often than not the person will likely reward you for your good deeds.

What would you do?

HIGHLIGHT POSTS FROM AROUND THE WEB

* Why Pursue A Side Business When You Already Have A Successful Career? asks Sunil.  Sunil writes some excellent thought pieces on online income and entrepreneurship.  He is also a Yakezie Challenger and regular commenter here which I appreciate.

* How To Find The Best TV Price by Car Negotiation Coach gives some great tips on what to buy and how much to spend.  His comments were very helpful in my quest to understand the home theater set up given I’m thinking of getting an LED TV and use my existing receiver and HD cable box.

* How A Home Based Business Helps You Save On Taxes by Spruce Up Your Finances.  Some helpful tips for those who are looking to save taxes and work from home.

* Overheard In The Break Room by Retire by 40 is a great self-made video highlighting why we are out of shape and broke.  Love this videos.  It goes back to one of my key tips that people need to stop being delusional.

* The Second Yakezie Scholarship Is Now Live!  The Yakezie launches its second Scholarship initiative to college students who are paying their own way as well as high school students and below.  We’ll be giving away $1,000 to the best three essays.  Please help spread the word!

Regards,

Sam

My name is Florentine and I am what the world describes as a “minimalist.”  I can pack all my belongings into two suitcases and go travel the world if I want.  I aim to make $30,000 a year from various online projects and consulting gigs, which makes me feel slightly guilty since there’s a hint of hypocrisy.  With an efficiency studio and a bicycle, I don’t need much money to lead a happy life.  I want to tell you a secret, which is a secret that many minimalists have, but don’t want anybody to know.

The reason why I deem myself a minimalist is because I have difficulty achieving more.  For three years after college, I tried my hardest to work myself up an advertisement company.  I was passed up for promotion, and then the recession came.  Instead of telling people I lost my job, I told people “I quit” so I could lead the life of freedom I’ve always wanted.  “Screw the world and conformity!”, I told everyone.  I was too ashamed to tell my parents and friends that after 4 years in college, all I could do was stay a gopher, photocopying papers and answering phones all day.  I didn’t even succeed at that.

Getting up and going to work is hard, I realize this.  Earning just $30,000 a year in a job that you don’t particularly like is particularly dissatisfying.  But, I know that doing the dirty work for years is just the process in order for me to get to where I want to be.  I want to create those beautiful images, and put together those unique sounds and call them my own creations for all to experience.  Yet, thanks to the recession, my opportunity was curtailed and I can’t get back in.  Let me back in!  Please?  It’s been almost a year now.

I renounce material goods, nice homes, and great careers because I can’t have any of those things.  Don’t even talk to me about retirement savings or starting a family.  I’ll get to those things when I can.  I tell people that they are leading lies and are on illusory treadmills.  It makes me feel better.  I know I shouldn’t try and make others feel worse.  Minimalism is a way of being.  I tell people I can live anywhere in the world, yet here I reside in a crappy city nicknamed HOE, or Hell On Earth.  It’s freaking freezing right now.

The easiest way to tell whether a lifestyler is successful is finding out where we live.  If we are really living the dream, we’d reside in Rio de Janeiro, Malibu, Paris, Rome, Hawaii, Bora Bora, and other fantastic places for goodness sake!  We wouldn’t live in HOE now, would we?  But, we do.  Damn you HOE.  Your streets are so dirty.

I embrace minimalism now, because I’ve come to accept the difficulty of becoming great.  I’m great to the outside world, because I say so damnit.  In reality, I want more, but society just doesn’t let me get there.  There is no coincidence that our movement has taken off during one of the greatest economic downturns of our times (so my parents tell me).  Although our employers let us go, at least they gave us the dignity to say we left on our own volition.

Let’s face it.  Nobody leaves a job they love.  If they did, they are either batshit crazy or lying to themselves.  I’m thrust into my minimalist position not out of choice.  But, everyday I embrace my situation and even convert some to do the same.  At least I’m not siting around feeling sorry for myself.  I’m actually practicing what I preach.  Just be careful OK?  Not everything is what it seems, especially if you have a choice.

Dream on,

Flo

Thanks for this terrific insight on minimalism Florentine!  I’ve also noticed a big minimalist/lifestyle movement ever since the recession started in 2008.  It makes sense to turn one’s back on society if society turns their back on you.  As the economy recovers, perhaps the movement will fade with more opportunities.  Perhaps not.  Either way, consuming less, saving and investing more is probably necessary in our economy!  What do readers think about minimalism?  On another note, the Yakezie Scholarship essays are now live! Regards, Sam

What do Penn State, Texas A&M, University of Illinois, Purdue, and Arizona State University have in common?  They are considered the Top 5 best schools in the nation according to recruiters!  Wall Street Journal has this unique ranking system where they essentially ask corporate recruiters to rank their best schools.

I’ve seen a lot of college surveys before, and not once have I ever seen any of these schools in the Top 5, let alone in the top 10.  Let’s be honest, for the same cost, would you go to one of these schools over Harvard, Yale, Penn, MIT, Michigan, or Berkeley?  Most would say “probably not,” so what gives?

Let’s have a look at why recruiters are so excited about these schools.

* Size. The average student population of the top 5 schools is around 28,000.  This means that out of a class size of 7,000, there’s a higher chance of finding someone they like.

* Sports. The top 5 schools all have big time basketball and football programs.  Americans are obsessed with sports, which is why every single one of you should also play and at least follow sports.

* Public. All five schools are public schools.  We are in a period where it’s all about the middle class and not standing out.  Anything private, that costs more than the average annual income of an American isn’t going to fly.

* Competition. It’s much easier getting into these top 5 schools with an average acceptance rate of ~50% vs. 15% for the traditionally accepted top schools.  As a result, there’s a less “the world owes me” type attitude as students are more humble and eager to please their perspective employers.

* Representation. Being a recruiter isn’t exactly the hardest job in the world to land.  As a result, there is a high likelihood that most of the recruiters come from the very schools they have voted to the top!  We all want to take care of our own, and recruiters are no different.

CONCLUSION

Surveys are great because they can be manipulated to suit the surveyor’s beliefs.  Everybody looks out for their own, and the Wall Street Journal is no different.  Look into the management of the WSJ and I’m sure you’ll find one of them who is an alumni of their Top 5.

Penn State, Texas A&M, University of Illinois, Purdue, and Arizona State University are all fine schools.  They just aren’t the top schools the WSJ believes them to be, otherwise they’d have the most Rhodes Scholars, Fulbright Scholars, Nobel Laureates, endowments, and so forth.  Frankly, the WSJ might as well rank colleges by their proximity to the Pacific Ocean!  Now that would be a great survey!

Readers, would you go to any of the WSJ’s Top 5 schools over other big names such as Harvard, Brown, Stanford, Berkeley, Yale, MIT and so forth?

Getting by the recruiter is the ultimate goal, so shouldn’t this ranking system be perfectly legitimate?

Regards,

Sam

It’s safe to say that before you began reading this post, you had no idea you were blinking.  Blink, blink, blink.  Whatcha going to do about it now that you are aware of your fluttering eyelids?  My guess is that your memory will last as long as a gnat, and you’ll forget as soon as you finish reading this post.

It’s amazing how we can blink roughly 36,000 times a day and not even be aware.  Yet, if we were to be consciously aware of our need to blink, we’d probably drive ourselves mad.  How great it is that our bodies protect ourselves from insanity by doing the things for us we have no desire of doing ourselves.

SUDDENLY YOU’LL WAKE UP

Our little habits create ourselves and we don’t even know it until we wake up one day and say “Holy shitake!“  I did that once with my 401K after contributing the max every year for 10 years.  Every month, roughly $1,300 was deducted from my paycheck for 120 months until it accumulated into a nice sum of money without even realizing it.

I have no idea what my returns are, since there was also 401K matching and profit sharing as well.  For all I know, my 10 year real rate of return was zero since the stock market performed so badly.  The funny thing is, I don’t really care because it’s all fake money anyway since I can’t tough it until 59.5 years old.  The sum after 10 years is also much larger than $1,300 X 120 months because of all the matching and profit sharing so it’s hard to figure out.  But, by doing something I’m supposed to be doing without even being aware, there it is, a nice sum of money that * might *  be around when I retire.

The same thing goes for savings.  If you regularly flush money out of your “go broke bank” and into your savings bank long enough, you’re also going to wake up one day and be astonished at what you’ve accumulated.  You don’t have to manually transfer money each time your paycheck hits because everything is done automatically, just like blinking.  If you get a nice lovely bonus end of year, you may have to click some transfer buttons, but it’s all part of the unconscious routine to wealth accumulation.

SO EASY ANYBODY CAN DO IT

Blinking comes naturally to most people.  Most everyone does it without thinking.  Savings is the exact same way.  Only someone with a genetic defect can’t or won’t save money consistently without giving it a second thought.  China’s gross domestic saving rate is roughly 45% of GDP and the Japanese save 30-40% of their income every year.  So what in Hamburger Nation is wrong with the 330 million Americans with a sub 5% savings rate?

The answer is that the often quoted low savings rate in America is bogus because the way we calculate savings is outdated.  I firmly do not believe that you and I are that weak to only save less than 5% of our income.  Just ask yourself how much you are saving, and the answer is clearly more than 5%!

CONCLUSION

The best habits in the world are those you do without thinking.  When you’re in an elevator, you let the ladies go out first and then ask for their phone numbers.  When you’re subsequently on the date, you say nice things and pick up the check.  When you meet a friend, you’re always 10 minutes early instead of 10 minutes late.  When you’re part of a personal finance blog network, you work on building healthy relationships.  When you have the privilege of getting a higher education, you take advantage and get good grades.  So many good things are done unconsciously.  Now all you have to do is remember to breathe.

Regards,

Sam