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

* Commute time from the city to the airport has increased from 25 minutes to 35 minutes on average due to traffic.

* The House Of Prime Rib is always packed and calling two days before gets one a reservation for two at 10pm.

* The BMW dealer says they are moving cars at the fastest pace since 2007.  The new 5 series is in, with a price tag of $72,000 for the 550i version.

* Venture Capital and Private Equity firms are flush with cash and are looking to find a home before they have to return money to investors.  Foursquare, Pandora, Zynga are getting funded for ridiculously high multiples.

* Banks are cashed up and lending again based off my conversation with three mortgage brokers.

* Headhunters (recruiters) are calling incessantly and it’s already past the halfway mark.

* You can never get a tennis reservation at 3:45pm, 5:15pm, or 6:30pm at my club because people make so much money they get to leave work early or don’t have to work at all.  Membership has increased by over 30% in one year.

* A house down the street received multiple offers and was in contract within 10 days.

* Advertisers have been filling my inbox seeking to do business.

* Landscaper had to delay a job for one week after already starting at my house because there was a bigger job to do elsewhere.

* Went to go buy a pair of retro Air Jordan Infrared VI shoes for $340 (package set of two) 20 minutes after Nike Town opened and they were sold out.  Went to two other stores, sold out!  Typical buyer?  High school kid.

* I can never get on the bus after 5:30pm because the bus gets completely full in the first 3 stops of a 7 stop pick up route.

CONCLUSION

The newspapers and TV stations constantly tell us how rocky things are.  Even fellow bloggers are urging caution.  Yet our fearless leaders in Washington are telling us we’re recovering quite well.  I’m generally wary about government prognostications, but with the amount of activity in the Bay Area, gosh darn it, I think they might be right!  How else can the government raise taxes for the rich to 60% (Federal, State, City, FICA, Medicare) next year without torpedoing the economy?  The government must know something, and it seems as if people are also catching wind that the good times are back again.  Even if the markets drop 10% further this summer, it still doesn’t take away the fact that activity is back, and in a big way.

Readers, do you believe the economy is solidly recovering?  How is your neck of the woods doing?  Any anecdotes you’d like to share indicating a weak or strong economy?

Regards,

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

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

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"Carried By The Wind" by Veronika Nagy

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

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

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

THE QUIET PLEA

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

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

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

I’LL TRY HARDER

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

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

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

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

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

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

Regards,

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

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

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

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

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

YOUR CRUTCH WHEN YOU CAN WALK JUST FINE

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

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

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

CONCLUSION

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

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

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

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

Keigu,

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

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

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

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

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

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

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

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

Keigu,

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

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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

Imagine if you had 30 hours more a month to do what you wish.  What could you accomplish?  I bet you could accomplish a whole lot of amazing things.  If you read 60 pages an hour, you could read six, 300 page books a month!  If it takes you one hour to burn off 500 calories, you could lose 15,000 calories or 6-8 pounds a month!  Whether it’s mastering a musical instrument or building a business, an extra 30 hours a week is an incredible competitive advantage.  This is where drive comes in.

It’s a ridiculous fact that we spend 1/3rd of our lives sleeping.  If you live until 90 years old, doesn’t it make you sick that 30 of those years were spent sleeping?  It makes me sick, because I’m so conscience about the brevity of life.  To put it another way, let’s say you want to “increase” the length of your life by extending the conscience portion.  By sleeping one hour less every day, you increase your conscience life by 15% (60 years to 69 years), assuming you sleep 7 hours a day!  Suddenly, it’s as if the 90 year old is living until 104 years old (104 X 66% = 69 years old)!  Perfect.

CONCLUSION – WORK WHEN OTHERS ARE AT PLAY

Small changes (wake up one hour earlier) leads to great changes over time (a 9 year longer conscience life span).  It may be tough to wake up earlier and sleep only 5-6 hours a day at first, but trust me when I tell you that your body will get used to it and start wanting to wake up.  Maybe you’ll have to cut down your late night drinking and partying, but it’ll be worth it in the end.

My mother used to tell me growing up, “Use your summer vacation wisely and work when others are playing.“  At the time, all I really wanted to do was hang out with my buddies and go skateboarding.  She was right of course, because as soon as I started buckling down and focusing, I was able to exceed expectations.  Yes, you might find me corresponding at 6am PST on certain days, don’t worry.  It’s me, and not an automated robotic sending something out.  In fact, I can’t wait to wake up every single morning and check my messages and see what’s going on in the world.  There’s so much activity, I wish I didn’t have to sleep at all!

Readers, how many hours a night do you sleep?

What is the minimum amount of hours you think you can sleep and still be functionable?

What would you do with an extra 30 hours a week?

Keigu,

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

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

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Yowza! Source: NY Times

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

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

GRAND STANDING AND FINGER WAGGING

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

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

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

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

THE REAL SOLUTION: GERMANY’S CHANCE OF A LIFETIME

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

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

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

THE WORLD STEPS IN INSTEAD

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

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

CONCLUSION

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

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

Das Eisen schmieden, solange es heiß ist!

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

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

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

Keigu,

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

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

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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!)

1) Haven’t found the right job. The number one reason why people want to retire early is because people haven’t found a job that gives them enough fulfillment to do for the rest of their lives.  Nobody quits a job they like.  If there was a job paying $80,000 a year to hike in the mornings and get massages in the afternoon, I’d do that forever!

2) Easier way out. People give up or are sub-optimal performers at what they are doing now.  Let’s say you are a research scientist who after 10 years never produces any relevant research, and finds no cures.  Instead of going on with your failure, you decide to give up, and get out of the game.  Early retirement is kind of like the cowards way of not having to be the best any more.  Some even liken it to suicide.

3) People are lazy and want things now. Society has shifted our ideals from hard work and thinking long term, to instant gratification.  Nobody has the patience to work for decades before being eligible for a pension.  We all think we know more than we do, and deserve to be the rich boss now.  When we don’t get our way, we quit, rather than letting people know we couldn’t reach our potential.

4) A feeling of hopelessness. During the downturn, a tremendous amount of people began writing about a location independent lifestyle, and breaking free from the 9-5 and really doing what you want.  It’s because of this downturn, that many people were displaced, and had nowhere to go.  If they did, perhaps they’d think differently.  In an economy where everybody is losing money left and right, what’s the point of working?

5) Realization that time is precious. With the median lifespan hovering around 80 years old, you only have 15 years of retirement to enjoy your life if you retire at 65.  People in this camp have a heightened awareness of time, and therefore do everything possible to make sure they are financially stable sooner, rather than later.  I’m a strong believer in this thought process, but at the same time, I don’t want to cut short my potential.

THE DANGERS OF EARLY RETIREMENT

1) Oops, you change your mind. Imagine retiring at 37 after 15 years of work after undergrad.  You spend the next 3 years traveling the world, living a leisure lifestyle and experiencing new things.  At age 40, you realize the reason why travel and play is so fun is because of work!  You have the urge to get back into the game, but who’s going to risk hiring a 40 year old with a 3 year employment gap? The employer will suspect you are rusty, and may just bolt after a year.

2) You run out of money. No matter how conservative we are in our retirement money needs, something unforeseen may happen.  Maybe you have a medical disaster, or your house blows down.  Maybe your investments tank due to a massive economic downturn.  Who knows what the future holds.  But if you partake in “normal” early retirement, without the mega-millions windfall, you may find yourself needing more one day.  Again, a large employment gap is perceived as riskier by the employer and you may be un-hireable.

3) You lose touch with friends and family. It’s nice to have all the time in the world to do whatever you want.  But, if your friends and loved ones are busy working all day, they can’t join you on your midday hike or adventure to Bora Bora.  They may also have a family to attend to during the evenings and on weekends.

4) You may find it difficult to start your own family. Unless you have a tremendous amount of money, raising a child may be too expensive an endeavor to undertake as early retirees.  If you never wanted to start a family, chances are you haven’t been saving for a family.  Let’s say you’re a woman who turns 35 and suddenly realizes the safety window for having a baby is closing rapidly.  May be tough to even get pregnant, let alone support a new born without the right support network.

5) You lose your own self-respect, and the respect of others. Unless you’re out there saving the world,  you might start getting depressed you are contributing very little to society.   Others will stop respecting you because you aren’t doing anything productive either.  A great many rich early retiree friends from the Dotcom bubble have mentioned they wish they didn’t get rich so quicky work a little harder for their money.

CAREFUL WHO YOU LISTEN TO

Early retirees will croon about how great their lifestyles are.  I’m sure, in some ways they are spot on.  But notice how they seldom write about the hardships they face.  They can’t, because it’s important they continue highlighting how awesome everything is, to justify their decision to no longer work.  Can you imagine spending 16 years going to school (grade school + four years of college) only to work for 10 years?  Some would surely say that’s a waste, would they not?

The worst that could happen is some aspiring scientist, musician, lawyer, or teacher decides to give up their careers because they believe traveling around the world on a shoe-string budget is so glamorous.  Years later, they realize their fingers don’t remember the notes anymore and the chemical formulas are one big haze.  Maybe they would have made it as a concert pianist, or helped discover the cure for seasonal allergies, ACHOO!  What a shame they never reach their full potential.

EARLY RETIREMENT IS SELFISH

As I strive to fulfill my goal of retiring by 45, I’ve come to the realization there’s an unhealthy focus on self.  “What do I need to amass to be comfortable?” should be replaced with “How much do I need to be comfortable while helping others?”

It’s absolutely selfish for me to even consider working less than the number of years I went to school.  I think back upon my childhood years and how much effort my parents put into raising me.  My mother would spend hours a week sitting down with me after dinner to explain mathematical equations.  My father would read all my essays and fix all the punctuations and grammatical mistakes.  I would feel like a disgrace not to at least try and do great things.

45 is just an age goal.  If I haven’t achieved my potential by then, I don’t plan on retiring even if I have the money to do so.  The point of having an earlier-than-normal retirement goal is to help keep someone focused to achieve whatever it is they set out to achieve.  Like an exam that’s 3 months away, we don’t study until the week before.  Hence, better to believe the exam is only a week away so that we are better prepared.

CONCLUSION

Early retirees sometimes like to pity those who have to work.  Yet perhaps we should empathize with those who are lost and haven’t found something they truly love to do (point #1).  It’s impossible to all be great humanitarians working tirelessly until the age of 65.  It’s easier just to give up and tell the world how fabulous your life is, and how you’ve retired on your “own” terms.

As the economy recovers, perhaps we’ll be able to bring back our lifestyle design friends to their home countries to work again.  Our early retiree friends will stop fearing failure as employers open their arms wide open and allow them to succeed.  Entrepreneurial ideas flourish once again due to an abundance of capital.  The more the wealth gap widens, the more the early retiree crowd will want to get back to work, and realize their full potential.

There comes a point when working isn’t about money anymore since we have enough.  If we all reach this point, we’ll no longer be focusing just on ourselves, but on helping others as well.  We’ll be doing something we love, that provides a sense of purpose.  Here’s hoping we all get there!

Readers, do you agree or disagree that early retirement is a selfish proposition?  Are we all just inherently selfish to begin with?

What is your ideal age of retirement and how do you know when is the right time?

Do you think once we’re back to a raging bull market, there will be less people who want to retire early?

Keigu,

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

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

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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

Growing up with a family of farmers, I knew how hard my parents worked just to put food on the table. My mom would sometimes ask me to help out in harvesting tobacco leaves at a nearby town. She’d motivate me by paying for every tobacco leaf I was able to harvest. With promise of a paycheck, I willingly agreed to go.

The next day, I woke up early in the morning, went with her to the farm, and started plucking tobacco leaves left and right. After hours of standing under the grueling heat of the sun, I managed to harvest loads of tobacco leaves. That day, I went home enduring an aching back and torn muscles. But I was happy. I was able to help out my mom and it also made me PhP 100 (2 US $) richer. That’s actual money, not a Philip Morris cigarette pack. :)

It was hard work. I was so tired I thought I was going to get sick the next day. Good thing I was able to watch my favorite TV show that night – a Japanese game show called ‘Takeshi’s Castle’. I was able to laugh it off and sleep soundly that night.

One thing was clear from then on. I must first have to work before I can expect to earn money and get paid. If I don’t get paid, I don’t have any money to spend.

Money Habit # 3 – Spending money

After graduating from College, I was fortunate enough to get hired by a multinational IT company as a Mainframe Programmer for a monthly salary of PhP16,000 (about US $320). It was big money for me then, coming out straight from College without any working experience.

When I got my first paycheck, I was so thrilled. I thought it was the best time of my life. Why shouldn’t it be? I had money to buy what I could not afford before. Even if it’s just a new pair of shoes. Even if it’s just occasional dinner out with friends. Even if it’s just a nice shirt or two. After all, the money I earned was finally my “own”. It was liberating.

But not for long. The more I consumed, the more I realized I wanted more. I wanted more money to buy that new mobile phone. So off I went and tried the only way I knew how to make more money then – work hard on my job. As a result, I got promoted almost every year and my paycheck steadily increased. Sooner than later, I realized that even with the higher pay, it seemed like it was still not enough. I was still always short of cash.

That’s when I realized, there’s actually another way to get more money – borrow.

Money Habit # 4 – Borrowing money

Once I started earning quite a bit, I got comfortable spending for stuffs. It got to a point where I bought something even though I didn’t have the money to pay for it. I only had to use my new credit card.

In one day, I bought a new washing machine, a refrigerator, a gas stove and a new pair of shoes all at the same time. Worse, all the balance had to be paid off at the end of the month. I didn’t know there’s a thing called “monthly installments” then so I never bothered to ask. All I cared was showing off, pretending to have a lots of money using my new credit card. Looking back, it was one of the most stupid thing I’ve ever done in my life.

Even if I wanted to, I couldn’t pay ALL of the balance after a month. In the first place, the reason I used the card is because I didn’t have the cash. I tried to pay as much as I can but after months of painfully paying a little bit above the minimum I was getting nowhere near paying the balance off.

To make matters even worse, I got myself in deeper trouble by doing cash advance on my credit card just to have the cash to pay for my rent. I paid the hefty cash advance fee with a sinking feeling in my stomach. I had no choice. I could get thrown out of the apartment if I didn’t pay up. It was a humiliating and painful experience for me. From then on, I bowed not to allow myself to experience the same thing again.

Money Habit # 5 – Saving Money

The next day, I went straight to our company’s cashier and signed-up for an automatic savings program. The program automatically deducts a percentage of my paycheck and transfers it into my savings account.

I started with only 2% of my paycheck enrolled into the savings plan. After 3 months, I increased it to 5%. Another 3 months and I increased it again to 10%. After a year I felt comfortable enough to increase it further to 20%. In my mind, if the money does not reach my hands, I won’t be able to touch it. I won’t be able to spend it.

I was still paying off my debt at this point but the automatic savings plan was a big help on my confidence. It was liberating to know that I had some money saved somewhere, even if I don’t see it.

After years of saving, I was finally able to pay up my credit card debt. I was so scared of debt, I immediately had my credit card cut off the day I paid the whole balance. I felt finally free after a really long long time!

Months of saving through the automatic savings plan was a big help in building my emergency fund for around 6 months worth of expenses.

This proved to be a great thing since a few months after, my sister slipped while walking through our staircase and sustained a head injury. I was shocked. With adrenaline rush kicking in, I managed to bring her up to the hospital. To this day, I still thank God that this happened when I already had a bit of money saved up. I was able to buy the necessary medicine. I was able to pay for the hospital bill. I was able to pay for the operation. More importantly, my sister got well without any complication. I can’t imagine how it would have turned out had this happened while I was still heavily in debt.

Why these 5 habits will never make me rich

Looking back, I certainly have come a long way as a young kid playing with cigarette packs pretending they’re money to now a debt-free IT professional with an emergency fund able to help out his sister in an actual emergency.

In all honesty, I really think these 5 habits alone will never make me rich. I’m still a long long way to go from financial freedom. Saving money is good, but making it grow is another thing.  At least it’s a good starting point.  I’m eager to learn the money habits of investing and starting on my journey to becoming truly rich.  When that happens, I’ll have another 5 money habits to share to you.

About Allan: Even with the insider knowledge of working as a mainframe programmer for a credit card company over the past 7 years, he still got burned with credit card debt.  Alan is trying to learn better money habits and sharing them through his Rich Money Habits blog.

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

THREE SUGGESTIONS AS TO WHY

1) “He doesn’t look white.”

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

2) The media needs something unique to sell.

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

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

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

CONCLUSION – WE SEE WHAT WE WANT TO SEE

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

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

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

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

****

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

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

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

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

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

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

Keigu,

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

Twitter @FinancialSamurai and subscribe to our RSS feed.

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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

TAP, TAP, KNOCK I suddenly hear on my passenger side window as a dark lady in glasses mouths a question.  Not sure exactly what’s going on, I buzz open Moose’s window two inches – wide enough to hear her speak, but narrow enough to prevent foreign object intrusion.

The lady reiterates her question again, “Hey baby, want to have a good time?”

Shocked at the apparent breach in normalcy, but relieved about not being carjacked I respond, “Whatcha talking about?“, knowing full well what she’s suggesting.

“Only $50 or $100, that’s what I’m talking about,” as she whispers with a smile.

$50 was almost exactly the amount of money I “worked” so hard to earn in poker for the past four hours.  There was a time I was up over $100, but I couldn’t hold on.  Here was a mysterious young lady willing to sell herself for at least $50 bucks for a presumably much shorter duration, but potentially much higher risk.

“No, thanks.  I’m just enjoying the night miss“, I respond back.  She apologizes for disturbing and walks 20 yards to another car.  Tap, tap, knock.  This time she gets in.

BUMP IN THE NIGHT

There’s a different world out there when we’re all sleeping.  It’s filled with creepy crawlers and mischievous beings looking to get ahead.  When you wake up one morning to see graffiti all over you neighbor’s wall, you know it wasn’t done while you were awake.  When tires are slashed and pots are smashed, you know it happened while you were asleep.

My car was parked in one of the most expensive parts of one of America’s most expensive cities and there she was, a woman looking to extract and make a living.  $50/$100 were her poker blinds. Despite the obvious illegal activity, is it so bad for her to hustle and make a living?  It’s apparent there are men out there who disappear in the middle of the night to “clear their minds” in front of Alcatraz.  Is it so bad this lady was addressing a demand?  Maybe this woman is a single mother with a child to feed, who knows.

When I finally drove away, I noticed multiple walkers roaming the streets.  Women just randomly strutting their stuff as if everything was normal.  All I could see were walkers everywhere whereas before I never noticed.  It’s strange that way.  As soon as you buy something, let’s say a white Honda Civic, you’ll suddenly start noticing white Honda Civics everywhere.  It’s as if we are blind, and only want to see what we want to see.

DO ANYTHING TO SURVIVE

When the going gets tough, we need to do things, almost anything we can to survive.  I’ll don my old McDonald’s purple and black for minimum wage if I have to in order to may the mortgage.  Maybe they’ll promote me to manager and pay me $10/hour if I work hard enough.  Or maybe I’ll be a male gigolo for $100/hour instead since one can only flip too many burgers before carpel tunnel sets in.

Money is so flippant when we have some.  You’ve got pocket jacks, lets go all-in pre-flop for $200 why not.  Yet, as soon as you lose your job, or start drowning in debt, maybe you’re not going all-in on a whim anymore!  Maybe you’re hustling at night looking to make a quick buck despite risk of arrest.  Whatever it is, I admire the lady by the Bay for trying.  She was courteous, stated her price, and gracious upon rejection.  All I hope is that whatever money she makes, she puts some away in savings!

Readers, what would you do if you suddenly lost your job and everything you owned?  Would you be willing to do anything to provide for your family?  If prostitution is the oldest profession in the world, why isn’t it still legal?  After all, prostitution on camera (pornography) is legal.

Regards,

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

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

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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

The game is really easy and fun to implement.  Pick something that you hope for, and not spend on anything until your hopes turn true.

1) Until… the 49ers and Redskins make the playoffs.  I love the 49ers and Redskins and I also love the new LED HGTV technology that has come out.  The picture quality is amazing!  Since these 40″+ TV’s are $1,300+, I promise I won’t buy a new LED HGTV until either team makes the playoffs!

2) Until… I record 10 songs and sing to an audience. Music is one of my great passions, especially trying to sing and play the acoustic guitar.  I’m pretty horrible, despite practicing for the past 10 years.  Within those ten years, my desire for a new,  beautifully constructed Martin Brazilian Rosewood guitar has emerged partly due to an increase in income.  Yet, I’ve promised not to get a new guitar until I put together my darn 10 song play-list, and get the guts to sing to a live audience.

3) Until… both electrical car seats stop working. Folks know I love cars. I’m going for a record 4th year in a row of owning one car.  It’s quite an accomplishment since there was a time where I went through eight cars in ten years.  Currently, my passenger side electrical seat no longer adjusts.  Thankfully, it’s set in a comfortable position.  Not until the driver’s seat breaks will I buy a new car!  With the dealer offering a handsome $1,500 trade in value for Moose, I’d rather poke my eye out than trade Moose in and spend $20-50K more for a new car!

4) Until… I can touch my toes without bending my knees. Flexibility is as important as physical strength when it comes to sports.  As the tennis season revs up, it’s important to strengthen my core and stay limber to prevent injury and beat the competition.  Not being able to touch ones toes is pretty darn pathetic.  Luckily, it’s pretty easy to work on!  Hence, if I’ve promised  not to buy any more tennis and general sporting gear (shoes, raquets, clothing, bags, etc) until I can comfortably touch my toes.

5) Until… I get a raise or a promotion. Finally, if you want to really play a serious game, which corresponds completely with personal finance, tie your goals back to work.  Promise yourself that until you do get that raise or promotion you won’t spend money on anything superfluous until that day.  By setting this target, you will focus on your greatest money making asset, you!

CONCLUSION

Finding reasons to save money is pretty boring compared to finding reasons to spend money.   If you can create fun reasons to save money, stipulated on things that have nothing to do with the actual savings process (football playoffs), I think you’ll find it much easier to build your freedom fund.

Time can be your friend or your enemy when it comes to savings.  The weak see more time as leading to more opportunities to spend and blow up their budgets.  The strong see time as an opportunity to build savings and watch their investments compound.  The great thing about this game is that it’s scalable to whatever you wish to strive for.  Once your goals are achieved, you may be so happy that you may not even need to spend any money!

Readers, any goals you’ve set for yourself to achieve before spending any money?  Any type of games you play?

PS Another game played starting last summer was to not buy a new laptop  (bought and ultimately returned) until this site broke Alexa 500,000.  500,000 was breached last winter, and I’m still playing until this site can get into the top 35,000.

Keigu,

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

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

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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

As an old man now, I look back fondly at high school and chuckle.  For some men, physical attributes seem to take a back seat to career and wealth accumulation.  “Who has the time?“, we often think to ourselves.

Rationally, we let ourselves go once we find our honey because we figure that our quest is done.  If she likes our big guts, she must really love us.  Maybe some women feel the same way.  “As soon as I get married I’m chopping off my hair!” confides a girlfriend.  Chopped hair post marriage is a big fear for many men, but I’m sworn not to tell her fiance.  What to do?!

THE MENTAL TO PHYSICAL CONNECTION

It’s not easy getting old.  My knees creek and it takes longer to recover from any physical activity.  Yet, the physical pain feels so good afterwards, I can’t help but keep on going.  The problem with doing anything to the extreme is that things break down.  We burn out, we get bored, we just stop doing it all together.

Part of the reason why The Yakezie Challengers are encouraged not to post everyday is because the risk of burn out is so real.  Every single Yakezie Challenger shall succeed and nobody shall drop out!

Part of the way to ensure longevity is to match all mental activity with proper physical activity.

Examples:

* After every written post, do 120 sit-ups and 60 push-ups.  Write 3 posts a week, end up doing 360 sit-ups and 180 push-ups.  The more you write, the more you exercise!

* After every hour of reading (work or pleasure), do 10 minutes of yoga or stretching.  Read 6 hours a week, ensures an hour of peaceful limbering.

* After every TV show or sports game you watch, play an hour of your own favorite sport.  If you don’t play sports, go for a hike or a bike ride.  If you can’t go outside, spend the time cleaning the house.

CONCLUSION

By creating a mental to physical connection, you create better balance in your life.  The link encourages you to do more of something you should do, while reminding you to do less of what you are already doing too much of.

Now if I can only remember the name of the girl from bio lab who slipped me that note.  Off to do some sit-ups!

Readers, what are some of the things you do to help keep yourself in balance?  Why are there so many more football and basketball groupies than tennis groupies?  If anybody has some great at home physical activities to relieve stress and calm the mind, please share!

Regards,

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

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

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

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

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

WHAT A DUMMY

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

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

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

CONCLUSION

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

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

Regards,

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

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

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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

What is it about the water cooler that attracts the whining crowd?  I swear, every time I go to the pantry to get a drink of water, all I hear are folks complaining about someone, or some aspect of the job they hate.

“I can’t believe Jerry is taking time off from work right now when we are so busy!”

“How come he gets a raise and I don’t?”

“I might as well be working for peanuts with the bonus they gave me!”

“Can’t believe we hired that dimwit.  What was he thinking?”

There’s one colleague who literally complains in French for 45 minutes everyday non-stop!  It’s like Pavlov’s Dog.  As soon as we hear her French, we’re conditioned to think she’s complaining even though we don’t understand a word she’s saying.  Complaining is like an infectious disease that invades that permeates and breaks teams apart.  It’s got to stop!

IF ONLY PEOPLE KNEW HOW GOOD THEY HAVE IT

One in ten people are out of work, and there are plenty more who would HAPPILY do your job for less.  Despite double-digit unemployment, misery pervades.  Some blame it on having to do more work for the same pay since there are 10% less people to help contribute.  Others think their jobs are beneath them.  Well if that’s the case, just move!

Job hopping is a common phenomenon at the beginning of the year.  The interesting thing is that once a hopper, always a hopper.  You can see resumes with five jobs in as many years, making you wonder what the heck is wrong with the person.  More times than not, it’s because the candidate always believes the other side is better.  There comes a breaking point where an employer will stop giving you the benefit of the doubt for jumping around so much, and then you’re stuck in oblivion.

Every now and again, I get the case of “Greener Grass Syndrome.”  I wonder what it’s like to do something else, or be someone else.  Oh how wonderful they’ve got it.  Then I snap back to reality and count my blessing with my existing employer.  Everything is relative, and it’s important to treat your existing job as if you hit the big one.

CONCLUSION

If you have a job, just know that you are the winner among a large pool of quality candidates.  Once you change your mindset, you’ll stop complaining and start flourishing again.

Readers, why do you think some workers complain so much about their jobs even during times of economic stress?  Do you think men and women complain equally as much?  With the economy still in a fragile state, why don’t people realize how good they have it?

* The risk free rate of return is simply the amount of money you can earn risk free.  4% is used because you can earn 4% in an FDIC-insured 5-yr CD currently.  The 10-yr yield is also considered a RFR at 3.65%.  Yes, we have to do something at our jobs to make money unlike the interest income from savings.  That said, I’m trying to highlight a different mindset so disgruntled workers stop taking their jobs for granted.

Regards,

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

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

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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!

For all the single folks out there, this weekend is your opportunity to slap Valentines in the face!  Yes, you might feel a little queasy when you see couples holding hands and nuzzling each other’s noses.  You might want to stay inside and read a book or some Financial Samurai so you don’t have to experience mushy love.  But, that queasy feeling is precisely why other than New Year’s Eve, Valentine’s Eve is the best time to find someone!

Today is the day to call your single girlfriends and make plans for Saturday night.  Valentine’s Eve is the one night where wise, love-seeking, men go out and hope to meet like-minded women.   Careful about roaming SMB’s though.  They might be out just looking to have some fun before the big day!

“HIDE AND SEEK”

I used to be sad during Valentine’s weekend when I was single.  It’s like celebrating Thanksgiving by yourself with no family.  However, like the ambulance story mentions, you can shift the way you think and focus on the positives.  Before going out this weekend, watch this video by Imogen Heap.  It’s a sad song that talks about love’s heartbreak and the search for something or someone new.  Get a little depressed, then realize you’re free and you have the power to seek happiness. This weekend could be the first weekend of the rest of your life!

Dearest readers, what are your plans for this weekend?  Do you plan to spend more money than normal on your honey?  What’s wrong with having fun during Valentine’s Day?  If you are single, are you going to go tear up the town and put yourself out there, not afraid of rejection?

Regards,

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

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

PS: If you are too depressed after listening to “Hide and Seek”, here’s a song to pump you up by Frou Frou, which is 1/2 Imogen.

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