Financial Samurai

As far as I’m concerned, the US economy is recovering handsomely.  How could it not with packed restaurants, and traffic that makes me want to pull your hair out?  The most anticipated IPO of the year is Facebook, which may very well go public for $20 billion plus dollars.  Meanwhile, the whole world is hooked on Apple products with iPads ($500-800) and iPhones ($200-300) selling like hotcakes.  Who needs yet another computing device?  I guess millions do!

There is so much money flowing into the Bay Area, it’s hard to imagine another financial crisis on the wing.  Yet, I’ve read plenty of posts on “steps to take when the next financial crisis comes” and I’m scratching my head.  Am I living in a parallel universe where every other car I see is a fancy German vehicle, and I can never get a reservation at my favorite sushi joint?  I feel like I’m living in a little optimistic bubble where the world isn’t falling off a cliff and is actually doing well.  Tell me if I am, because bubble living is delusional living at its finest.

The stock markets, although highly volatile have recovered some 50% from the bottom and generally serve as as a leading indicator for the economy.  Yet people are still talking about a double dip recession.  Yes, the biggest worry is stubbornly high unemployment, but you’ll never be able to tell if you walk the streets of San Francisco.

LOTS OF POSITIVE ANECDOTES Read more…

"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 Read more…

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 Read more…

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. Read more…

I’ve been a little more active on Twitter recently and I noticed something quit interesting.  Starting at around 10pm PST, the chatter goes silent.  I tend to stay up until midnight to 1am, and because nothing is happening on Twitter, I focus my attention elsewhere.  I usually wake up sometime between 5:30am-6am and spend time checking e-mail, responding to comments, stretching and seeing what’s going on online.  Again, absolute silence until about 7am PST when things start coming alive.  Where is everybody during the silent times?  Sleeping?

There was a time where I’d sleep 7 or more hours a day, but no more.  For the past 10 years, my body automatically gets up after 6 hours of sleep and never later than 6:30am on the weekdays, and 7:30am on the weekends no matter when I go to bed!  Poker until 3am? Good morning sunshine at 7:30am!  Actually, I wish I could sleep in until 9am, but I just can’t.  Part of the reason for my automatic clock is that I eat regularly, and therefore have the desire to use the restroom regularly.  Time to go, my body says and I get up.  Unconsciously, there must also be a strong feeling of guilt that I’m wasting my life away sleeping.

7 HOURS A WEEK LEADS TO 30+ HOURS MORE A MONTH Read more…

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 Read more…

If you look carefully around the web, you’ll read scores of articles about the desire to retire early.  Yours truly wishes to finish up no later than 45, as I believe working for 20 or so years is a long enough time.  I’ve done the math with various living and return scenarios and it can be done.  But the question is whether it’s a good idea?  Perhaps not.

Now that the economy is in recovery mode, it’ll be interesting to see how attitudes change towards early retirement.  Will those who’ve short circuited their careers feel the pull to return to full time work and maximize their earnings potential again?  I believe so.  What about all our “lifestyle design” and “digital nomad” friends who had a rough time landing something stable they truly love?  Possibly they’ll come back too.

Those who are able to retire early are often cherished.  I certainly admire those who are able to cut down their desires to the bare bones and live a very frugal lifestyle.  I also admire those who’ve been able to strike it rich very early!  That said, perhaps early retirement isn’t a good idea for the large majority of people.  Let’s explore several reasons as to why people want to retire early, why they exist, as well as understand why it may not be a good idea.  Someone has to argue the other side, so it might as well be me.

WHY PEOPLE WANT TO RETIRE EARLY (IT ISN’T THAT OBVIOUS!) Read more…

Here’s an insightful post from Allan from The Philippines.  He shares with us his story about growing up poor and working his way up.  It’s always great to read about international perspectives.  Hope you enjoy!

They say we are creatures of habit. This is especially true when it comes to money. When the going gets tough, it is easier to resort to what’s comfortable. When that happens, your own money habits take over. The only question is – will your money habits get you through and make you rich?

Money Habit # 1 – Playing with money

Learning my money habits started when I was still a young kid playing outside the house on a sunny afternoon. The first money habit I learned was playing with money. Yes, literally. But not with actual money. My friends and I would play games betting on carefully folded cigarette packs looking like play money. A red Marlboro is worth PhP 50 (US 1$). A green local brand “Champion” cigarette is PhP 5 (10 cents). A Philip Morris cigarette pack is worth PhP 100 (US $2).

It was all play money then. And it was easy to get. I only need to wait for my father to finish his cigarette pack and I’d be on my way to earning my (play) money for the day. Sometimes, we even played with coins, taking turns and rolling them on the floor like a dice. Playing with money was fun!

Somewhere between playing with other kids and being conscious on what’s cool, I learned that money can buy me things. But since we were poor, I had to make do with my worn out clothes. After some time I’ve already outgrown it so much, I already looked like Winnie the Pooh.

It’s not so much about other kids having better clothes. It was more because I was not able to play outside as much as the other kids. My mother would always remind me to do my house chores. Wanting to go out and play instead, I would reason out “how come the other kids are not doing any chores?” To which my mom lovingly responded,

“Because we are not like them. They can do whatever they want because they are rich. We are poor. ”

That was the first time I realized we were different from other people. We were poor. I began to notice how worn out my clothes and shoes are. I remember even going to school with no shoes on.

That’s one lesson I took to heart. If you don’t have money, you are poor. If you are poor, you need to work to have some money.

Money Habit # 2 – Working for money Read more…

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. Read more…

The poker game ends and the team of entrepreneurs and new media types say their good-byes.  I leave up $51 bucks, which is a nice return given my $100 buy-in, but it’s a pittance against others leaving with wads of cash big enough to substitute for butt-cheek implants if so desired.

The last time I was out until 3:30am was when George W.  proclaimed we won the war.  There are so few cars on the road, when I do see one, I wonder what trickery lies ahead.  There’s a certain tranquility one feels when others are sleeping.  Dim yellow lights glow in San Francisco’s misty haze.  Nobody bothers you because nobody is conscious enough to care.

Almost home, I decide to instead drive towards the Bay and take in the silence of black murky waters and a revolving spotlight that perpetually emits from Alcatraz.  I wondered if this calm is how Frank Lee Morris felt before he tried escaping The Rock some 48 years ago.

TAP, TAP, KNOCK Read more…

It’s difficult to save money and not splurge on things you want.  Let’s face it, those financial goals you made this year will need as much help as you can get.  One of the key ways I save is to play games.  Let me show you what I mean.

SAMURAI SEPTEMBER

Last July, I made a resolution not to spend any money on things other than basic necessities such as food and my bus pass in September.  Even filling up Moose with gas was pretty much off-limits as we decided to do a lot of biking, walking, and carpooling instead.

By naming September, Samurai September, the game was set in motion to see if I could succeed.  Not only did I not spend any money that month, I didn’t spend any money in October either!  I wanted to beat the rules of my game, and break the record by as far a margin as possible.  The feeling is just like trying to smash the Pacman record by a wide margin, so nobody will ever unseat you.

THE “I WON’T SPEND MONEY UNTIL…..” GAME Read more…

Rock Balancing in San Francisco

After my parents pep talk in the 9th grade, I realized there were two things I had to do in order to survive high school: 1) use my brains and 2) develop some pythons.  In other words, getting good grades, joining student government, and being a history buff wasn’t enough.  Sure, I may have an easier time getting into some fancy college, but how was I supposed to get into girls?  “Hey pork chop, did you know that General Lee surrendered on April 9, 1865, marking the end of The Confederacy and the Civil War?  Lez go out tonight!”

“Girls, Girls, Girls” by Motley Crue played incessantly in my head at the time.  Frankly, I can’t imagine it being much different for a lot of other teenage boys.

I made it a rule to balance the mental with the physical by playing sports.  As a teenager,  I had a strong fear that I was going to be stuck in nerdom if I didn’t.  I was a study machine who needed balance.  The sports that attracted the most groupies were football and basketball, but I was too chicken sh*t to bang down low.  I chose tennis instead, which had decidedly less groupies.  Good thing all you really need is one!

In the 11th grade, this cute girl slipped a note in biology lab with a cut out from Teen Magazine entitled, “You Know Your Boyfriend Is A Keeper If..“.  To my surprise, #1 said: “Your man is the captain of his high school varsity tennis team!“  Shwing!  As captain of the HS varsity team, needless to say we had a frolicking good time….. studying for our biology lab final of course.

THE OLDER THE WISER, PERHAPS Read more…

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 Read more…

Do you hit the snooze button multiple times in the morning because you just don’t want to work?  While at work, do you daydream of being somewhere else?  Well too bad!  You’ve won the lottery and you don’t even realize it!

Let’s say you make $50,000 a year.  Divide your income by the current 4% risk free rate of return and you get $1,250,000!  In other words, if you have $1,250,000 sitting in the bank right now earning a 4% rate of return, you’re making your current salary of $50,000 a year.  Not bad winning $1,250,000 huh?  Now take your income, and divide it by 4% (0.04) and let me know how much you’ve won!

It doesn’t matter what job you have now.  Just know that the job you do have is coveted by a tremendous amount of people.  This includes my first job mopping McDonald’s egg bits at 6am.  My manager told me I was lucky to wear the purple and black (colors of the uniform) because he turned down 8 other candidates over the past month.  I just felt lucky I could stuff my face with as many FREE apple pies when he wasn’t looking!

WHINE AND CHEESE Read more…

Well folks, the weekend of love has arrived!  Some are going to eat by candle light, while others will walk the beach during sunset here in California or Hawaii.  For my friends out in Snowmageddonville, perhaps marshmellows in front of the fire place while playing a fun game of Scrabble.  Amazingly, there are some who believe their significant other when they say, “don’t get me anything.“ If you actually believe this line, you also mistakenly believe taxes aren’t going up next year!

I’m absolutely sure there are those against the Valentine movement, how it’s one big marketing gimmick for guys to spend more money than they should.  Unfortunately, you’re right, but there’s no stopping the movement. If you end up doing nothing, not even a small gesture like a back massage, you’re screwed, and not in a good way!

The one thing I caution ladies not to do is push.  The more you push about what you want or want to do on Sunday, the more your guy won’t want to do anything.  If you keep hinting about chocolate covered strawberries, you’re going to get one big fat biscuit of nothing!  So shhh, let the man figure something out and get creative.  Of course, ladies can always do something for us men too yeah?  Nah, it’s always on us men.

WHAT AN OPPORTUNITY FOR SINGLES EVERYWHERE! Read more…