Do “C” Students Deserve “A” Lifestyles?

Back in the 9th grade, I remember goofing off quite a bit with my buddies.  We skipped class, stayed out late, and essentially did a lot of stuff that was detrimental to our grades.  Despite working with plenty of Spanish speaking colleagues during my part-time job at McDonald’s, I still only got a “C” in Spanish because I didn’t care.   All I wanted to do was have fun, eat all the apple pies I could and get paid my big $3.35 an hour!

My parents were clearly perturbed by my lack of effort (hey, isn’t working at McDonald’s from 6am-1pm on Saturday’s pretty good?) and spoke to me one evening and asked, “How are you ever going to be a great business man if you can’t even get an “A” in math?  Do you think award-winning scientists get “Cs” in high school chemistry?  Do you think Andre Agassi doesn’t practice hard every single day?” Crap, I think they are right.  Shoot, if I ever have surgery, the physician better not have slacked off in surgery class!

A MANSION PARTY INSPIRES

The People Asked To Get ROCKED & A Boulder Drops On Their Heads

Feel The Pain And Like It

The Rock Of Gibraltar, Only Backwards

Anybody want to guess what happened on Wed, January 19th right before the market fell off a cliff?  If you guessed Obama delivered a politically charged speech to rally for his own support and crucify others, you’re right!  On Wed, January 19th, Obama went on national TV to tell the world, “we want our money back” and “if they want a fight, a fight is what they’ll get.” The “they” of course, are “greedy rich” people.  The markets immediately started to sell-off and the S&P 500 is now down about 6% since.

Good old fashion class warfare is never good for the economy, neither is continuous political jibber jabber.  Do you ever remember a president being on TV as much as our current president?  The risk of overexposure is very real, and the record low approval rating for any president at this point in his term shows this.  The State of The Union address is supposed to be an opportunity to unify the people.  Besides the typical feel-good rhetoric, what I heard was a continued attack on others, protecting personal interest groups, and maintaining giant silos.

YOU SO CRAFTY NEBRASKA

The Katana: Help Haiti If You Can 1/17

So far over $7 million has been raised to help Haiti by just texting the word “HAITI” to 90999.  You’ll get a confirm receipt from your mobile carrier once sent.  Please consider donating!

This week on Financial Samurai, we’ll share our thoughts on the latest government rhetoric, highlight a guest post by Flexo, introduce a new fun challenge, and perhaps discuss one of the key things to consider for job seekers.

THE SAMURAI FUND UPDATE: +3.85% vs. S&P 500 +1.88% as of Friday, Jan 15th. 203 basis points of outperform puts us in the Top Tier of all funds.

Stars: Lenar +25%, Toyota +8%, GE 9%, Harmon +7.4%,, Calgon +7%, Big Lots +7%.

Dog Poops: Lumber Liquidators -7%, Berkshire -1.6%, Steris -1.25%, ABM -1%, Monsanto -1%.

Looks like there’s some good demand from new entrants, and investors who want to give us several hundred million more to build new positions!  Contributors, please provide an update on your name in the TSF page above, especially if your name is sucking wind.  Will be making room for new names in February.

SAMURAI WEEK IN REVIEW

* People now realize that converting to a ROTH IRA is pretty ridiculous as Kevin M reminds us that the first $18,700 (equivalent to $470,000 in pre-tax funds at 4%) you withdraw from your retirement funds is tax free.  Meanwhile, JoeTaxPayer highlights that if you retire with $2.17 million in today’s dollars, you only have to pay 15% tax!  You’ll have to retire with more than $5 million dollars to average a 25% tax rate, based off a 4% income return.  $5 million is only 50X your $100,000 “average” income.  Always good to dream big for those of you who’ve justified your ROTH IRA contributions.  Joe, you made my day!

* Family seems to be the number one reason why people choose to freeze during the winter, and melt during the summer.  FYI, it is possible to make friends in paradise folks.  It’s also possible for your family to fly out and visit you on the beach.  If you’re miserable, don’t limit yourself!  Just think about how much easier it is to travel now vs. 300 years ago.

* The “Get Financially Naked” book giveaway ends on Saturday, January 23rd.  It’s a great little book for couples who feel they need some help in improving their communication as it relates to finance.  With all our book giveaways, we’d like to share them with those who’d like and need them the most.

* Americans really shouldn’t complain about our finances since we’re wealthier than 99% of the rest of the world.  That said, it’s all relative, and if everybody is wealthy, then it’s really hard to feel special.  The key seems to be to amass your wealth, and move elsewhere!

Keigu,

Sam Samurai – “Slicing Through Money’s Mysteries”

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Where Americans Pay The Most To Live And Why

Samurai On Waialae Beach At Sunset

As one can guess, higher paying jobs leads to higher costs of living.  In fact, more than half of the 20 cities surveyed by the US Census Bureau are based in Caleeforneea, as Governor Arnold would say.

How is it that California is so dominant in the expensive category, when the mass of settlers first arrived on Plymouth Rock 300 years ago?  3,300 miles is a long way to travel, especially on horse and foot!  The main reason for the unfettered move out west is simply warmth and sunshine!

Every time I vacation in Hawaii, I always ask myself, why the heck ain’t I here for good.  Let’s face it, more sunshine equals happier people.  Sunshine is the classic zeitgeber to help us wake up and get us motoring in the morning.  No sunshine leads to no photosynthesis, which means no plant life, and therefore no ecosystem.

After 10 years of living on the east coast, I can still feel the grey skies weigh down my soul every winter.  Don’t get me wrong.  I love the winter snow during the holidays, but I just love being in a cheerful mood more.  Here are America’s most expensive places to live based off median monthly housing costs.

TOP CITIES WHERE AMERICANS PAY THE MOST TO LIVE

Book Review & Giveaway: “Get Financially Naked”

51YUhQie2AL._SL500_AA240_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.

Playing Until My Knees Swell And Feet Bleed

knee2009 was the year I rediscovered tennis.  Ironically, I figured I’d better utilize the club as much as possible because I couldn’t afford any other luxuries after the markets imploded!  Just last year, I failed miserably at breaking a 10 handicap (got to 10.2 and ricocheted) in golf and decided to quit before I threw my bag into the lake.

For the past 15 years, I forsook the game I played so diligently as a youngster.  It was boring running around, hitting a ball back and forth.  Now, I’m hooked again because of the camaraderie of the game.  Although tennis is an individual sport, there’s a team aspect to it if you join a league.  Meanwhile, my evil plan is to get my wife to get good enough so we can play some competitive mixed doubles my next summer!

PHYSICAL PROBLEMS MATERIALIZE

The Public Loves Wall Street Again!

2037754785_05a628201f_bWhat is this blasphemy you say?  One of our main tenets is to observe what people DO with their money, and not what they preach.  The public clearly loves Bank of America and Wall Street again because how else would Bank of America be able to raise $19 billion from us, to pay us back?

In an “Open Letter To Vikram Pandit, CEO of Citigroup” we urged Vik to sell the 34% government stake back to the very public that bailed Citigroup out before year-end. Why?  So Citigroup can pay their employees big bonuses in 2009 by saying they are no longer under the government’s stewardship.  Sure, paying back $45 billion in TARP sounds like a lot, but Bank of America just did it!

In fact, joining Bank of America are Bank of NY Mellon Group, Goldman Sachs, JP Morgan, Morgan Stanley, and State Street who’ve all been able to pay back their TARP loans and pay their people handsomely this year.  This begs the question, what’s wrong with Citigroup, one of my main “go broke banks” used to optimize my finances.

SORRY, I DONNO

Zillow Says I’m $400,000 Wealthier! Why Net Worth Is Rubbish

Primary Residence Zestimate

Primary Residence Zestimate

To prove our point regarding “Your Net Worth Is An Illusion” I took a look at Zillow’s latest zestimates of my primary residence and rental property.  Apparently, in a span of 3 months, my primary residence gained a whopping $300,000! I’m popping open a bottle of  Crystal, buying a rose gold Patek Philippe Calatrava at Tiffany’s, and ordering the Audi R8 on as we speak.  Just kidding, especially since September is frugality month. Besides, Zillow isn’t writing me a check for $300,000!

The dollar sign shows the purchase price after a 4 month escrow that began in late 2004.  In other words, the purchase price was $250,000 below what the zestimate measured as fair value in the middle of winter.  You’d think that after 4+ years of existence, Zillow’s price algorithms would be more refined.  Perhaps the data is legit, but I’m not buying it. Since net worth calculations don’t include one’s primary residence, let’s strike this example and look at a rental property.

Family Gets Award For Paying Off Debt & Jumps Right Back In!

If you go $106,000 into personal debt, and pay it off in 5 years, you apparently get the Professional Achievement and Counseling Excellence (PACE)  2009 Graduate Client of the Year Award. I was hoping for a longer award name, but what a great nugget to put on their resume!

The kicker?  The Hildebrandt’s decided to dive back into debt with one year left on their pay back plan by buying a house! Furthermore, they took advantage of the $8,000 first-time home buyer tax credit. The article ends with sage advice from the Hildebrandt’s saying, “Get out of debt, it’s a choke-hold.”

One of the greatest things about America is free speech.  Good or bad, we are a society that coddles fragile self-esteem and rewards people for situations they shouldn’t be in from the onset.  Although The Hildebrandt’s aren’t practicing what they preach, they’ve got their award and are living the American dream.  Congrats guys!  We can’t wait for your next award.

Meet The Hildebrandt’s and read about their great achievement.

Related Posts:

“Should The First Time Homebuyer Tax Credit Be Expanded And Extended?” from Xin Lu of Wise Bread and The Baglady.

Keigu,

Financial Samurai

“Slicing Through Money’s Mysteries”

Is There a Shadow Government In America?

Who's Behind The Shadow Government?

Who's Behind The Shadow Government?

After reading several of my favorite sites out there, I’m beginning to wonder whether there is a shadow government running America.  The “Cash for Clunkers” program will cost the US tax payer $3 billion to graciously put 700,000 people who drive beaters into cars costing 5-6X more.  Yay, there’s a one time boost to August US auto sales due to hundreds of thousands of people who can’t afford new cars (according to the 1/10th rule)!

Over at DINKS Finance, I’m reminded that the income limit for Roth IRA contribution for single people is $105,000.  So they’re telling us after saving a party-throwing $6,000 bucks, the moment you make over $105,000 you can no longer contribute?  Too bad for you 29 year old grad students out of business school with a median income of $105,000.  Oh yeah, and all you doctors who spent 8+ years of your life AFTER college and those bagillion hours studying, so sorry!  The government isn’t willing to help you save for retirement.  No soup for you!