Financial Samurai

Slicing Through Money's Mysteries

How to Become a Certified Financial PlannerTM (CFP®)

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This is a guest post by Paul Williams from Provident Planning on how to become a Certified Financial Planner. He’s a fee-only financial planner in Lancaster County, PA, and regularly writes about personal finance from a Christian perspective. If you want to become a CFP®, he’d be happy to talk with you.

I was excited when Sam invited me to write a guest post for Financial Samurai on how to become a CERTIFIED FINANCIAL PLANNERTM (CFP®). I’ll finally finish the requirements in Novemeber 2010 and be eligible to call myself a CFP® after I fill out the last bit of paperwork.

Sam mentioned he’d like to become a CFP® after he retires from his job, so he’s curious about what he’d have to do. I’m sure some of you might also be interested in becoming a financial planner if you’ve got a strong interest in personal finance.

This post is going to be about the process of becoming a CFP® rather than deciding if you should even become a CFP®. That’s a very different question and one you should have an answer to before you start the process of becoming a CFP®. It’s certainly not a cheap certification to get (in money or time).



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The Best Football Conference Also Educates Better

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. Big Ten

F/+ Top 25 teams: 5 (35.7 percent)
Sagarin divisional ranks: No. 3 (East division), No. 6 (West division)
Average strength of schedule rank: 23.3
New Year’s Six teams: 3
Playoff teams: 1

The Big Ten had 10 bowl-eligible teams out of 14, but what separated it from other Power Five conferences was how good it was at the top. Four of the five teams ranked in the F/+ Top 25 were ranked in the top 12. Additionally, each division was rated highly. Entering the final week of the season, Michigan, Penn State, Ohio State and Wisconsin were all in the playoff hunt. Each of those teams either made a New Year’s Six or College Football Playoff game. The bottom of the Big Ten was bad, but overall this was the strongest league from a strength-of-schedule perspective.

2. Pac-12

F/+ Top 25 teams: 3 (25 percent)
Sagarin divisional ranks: No. 2 (North division), No. 4 (South division)
Average strength of schedule rank: 32.3
New Year’s Six teams: 1
Playoff teams: 1

The Big Ten may have had the highest number of top-end teams, but the gap between the best team and the worst team in the Pac-12 was smaller. (In fact, the conference’s best team, Washington, needed overtime to beat its worst team, Arizona.) The Pac-12 also had an even split between its top six teams and its bottom six. Overall, this was a strong, and deep, conference.

3. ACC

F/+ Top 25 teams: 7 (50 percent)
Sagarin divisional ranks: No. 5 (Coastal division), No. 7 (Atlantic division)
Average strength of schedule rank: 41.3
New Year’s Six teams: 1
Playoff teams: 1

The most impressive thing about the ACC was the number of top-25 teams in the F/+ rankings. Seven was the highest number of any conference. However, the ACC’s overall strength of schedule was lower, as were the divisional rankings. This was a league with one elite team (Clemson) and several good to very good teams.

4. SEC

F/+ Top 25 teams: 4 (28.6 percent)
Sagarin divisional ranks: No. 1 (West division), No. 10 (East division)
Average strength of schedule rank: 28.9
New Year’s Six teams: 1
Playoff teams: 1

It’s shocking to see the SEC, long considered the best conference in college football, plunge to No. 4, but there’s a simple reason for it. Alabama was unquestionably the best team in college football, but the rest of the conference simply didn’t match up. The SEC East was particularly bad and ranked the 10th-best division, lowest among any Power Five division. The West division was strong and the schedules were tough, but the conference was really dragged down by that East division.

5. Big 12

F/+ Top 25 teams: 1 (10 percent)
Sagarin divisional ranks: No. 8 (conference)
Average strength of schedule rank: 69.6
New Year’s Six teams: 1
Playoff teams: 0

The Big 12 was the weakest Power Five conference. It had one top-tier team (Oklahoma), two decent teams (Oklahoma State and West Virginia) and a handful of average to below average teams. Having only 10 members hurts the Big 12’s chances to have multiple elite teams, but there have been recent years in which the conference was able to flex its depth. This was not one of them.

6. AAC

F/+ Top 25 teams: 2 (16.7 percent)
Sagarin divisional ranks: No. 9 (West division), No. 12 (East division)
Average strength of schedule rank: 75.4
New Year’s Six teams: 0
Playoff teams: 0

There wasn’t much separation between the Big 12 and the AAC. The top of the American, in fact, was a bit stronger. However, the strength of schedule was lower — albeit only slightly — and power programs like Houston and Navy weren’t able to crack the New Year’s Six spot. Otherwise, these spots probably would have been flipped.

7. Mountain West

F/+ Top 25 teams: 1 (8.3 percent)
Sagarin divisional ranks: No. 11 (Mountain division), No. 18 (West division)
Average strength of schedule rank: 93.6
New Year’s Six teams: 0
Playoff teams: 0

This is where the statistical drop-off happens. The Mountain West didn’t have a New Year’s Six and its most well-known program, Boise State, didn’t even win its division. However, half of the conference did have winning records — five in the Mountain division alone — and two 10-win teams. The overall depth was the tiebreaker here over the MAC.

8. MAC

F/+ Top 25 teams: 1 (8.3 percent)
Sagarin divisional ranks: No. 14 (West division), No. 20 (East division)
Average strength of schedule rank: 86.6
New Year’s Six teams: 1
Playoff teams: 0

There wasn’t much to distinguish between the MAC and the Mountain West. Both conferences had a bell cow team, but neither had particularly strong divisions — both, in fact, had an especially weak one — or strength of schedule ratings. The MAC did have undefeated Western Michigan, but the rest of the conference was weak.

9. Conference USA

F/+ Top 25 teams: 1 (7.7 percent)
Sagarin divisional ranks: No. 17 (East division), No. 19 (West division)
Average strength of schedule rank: 107.2
New Year’s Six teams: 0
Playoff teams: 0

Similar to the MAC and Mountain West, Conference USA had a top-25 caliber team in Western Kentucky. The Hilltoppers actually played a fairly tough schedule, too, and still won 10 games. Outside of that, there isn’t much. The likes of Middle Tennessee, Old Dominion and Louisiana Tech gave the conference some good teams at the top, but the gap between them and the rest of the group was sizable.

10. Sun Belt

F/+ Top 25 teams: 0 (0 percent)
Sagarin divisional ranks: 16 (conference)
Average strength of schedule rank: 94
New Year’s Six teams: 0
Playoff teams: 0

Someone has to bring up the rear. The Sun Belt had some good teams (Appalachian State, Troy) and some terrible ones (New Mexico State, Texas State) with some bad strength of schedules to boot. The lack of a Western Kentucky-caliber team hurt the Sun Belt here.

A 6-6 Washington team beat Nebraska 19-7 in the Holiday Bowl.  Stanford demolishes ACC Champion Virginia Tech 40-12 in the 2011 Orange Bowl and now we have Oregon playing Auburn in the BCS National Championship game.  Clearly, the PAC 10 is the most dominant athletic/football conference in the country.  In 2010, Stanford also pounded Notre Dame 37 to 14 and UCLA crushed Texas 34 to 12.  Statistics don’t lie, no matter how biased you are living in middle America or on the East Coast.

If you compare academic match ups, the Pac 10 wins as well.  Not only are Stanford, UCLA, Washington, and Oregon academically superior to Notre Dame, Virginia Tech,  Texas, and Auburn based on polls by every single college ranking system available, they also have superior athletic programs to boot.  Furthermore, the campuses of Stanford, UCLA and Oregon are like country clubs, with phenomenal facilities and fantastic weather all year around.

Notre Dame, Texas, Auburn and Virginia Tech are fine schools in their own right.  However, if you compare the four against their Pac 10 match ups, there simply is no comparison.  Hence, why is it that athletic recruits would ever go to a school other than one in the PAC 10 if they had a choice?  Let’s find out.

DISCOVERING WHY THEY DON’T GO TO THE BEST

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Understanding Happiness, Taxes, and Net Worth

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Good day brilliant minds!  I thought it would be helpful to do a recap of the conclusions from this past week’s posts given we had over 200 comments.  We talked about three important subjects: Happiness, Taxes, and Net Worth.

The purpose of these articles is to get people thinking about issues so we can be more open minded.  If anybody has ever participated in the case study method of learning in graduate school or elsewhere, you’ll know that there isn’t a right answer so much as a right direction.  It’s so easy to get caught up in your belief that your way is the right way.  That’s a dangerous, dangerous path to take!

The Ideal Income For Maximum Happiness

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Play Games To Save Money And Achieve Your Goals!

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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

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Creating A Masterpiece By Failing Forward

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Early Retirement Is Like Being An EntreprneurHave you ever noticed that some of the most successful people in the world seem to just naturally fit in their role? It’s as if they’ve been perfectly sculpted to be the best actor, businessman, or even blogger.

I have a secret to tell you… It’s because of their previous experiences… The one’s you didn’t see before they became wildly and unbelievably successful. These people are actually the biggest failures in the world! But shhhhh, I didn’t tell you that…

Don’t believe me? I want you to try something… The next time you talk to a successful person simply ask them this question:

“What failures have you experienced on your journey towards being where you are today?”

They’ll probably talk your ear off for hours and you’ll begin to realize this: They’ve just swung the bat of life a few more times and eventually hit one out of the park.

SCULPTING A MASTERPIECE

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Use The Sandwich Method To Provide Constructive Criticism

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A Reuben, My Favorite!

A Reuben.  My Favorite!

There’s a fine line between being a jerk and being constructive.  As a parent, manager, spouse, or friend, most of the time we just want what’s best for others.  The problem is, we’re afraid to offend and we therefore lose any ability to help.

There’s no better reward than advising someone how to improve, and then watch them flourish.  Push the person too far, however, and you’ll engender resentment.  The Sandwich Method is one the best ways for delivering constructive feedback.

SCENARIO: Your friend Sam comes up with a corny idea for a website called “Financial Samurai.”  Sam thinks it will become a Top 25 personal finance site in the world one day and thinks the tagline “Slicing Through Money’s Mysteries” is catchy.  He thinks he’ll be able to retire off the advertising revenue and is already thinking about buying the latest Audi S5 and quitting his day job with his expected income.

You know better because there are 50 million active websites out there (200+ million total), and only the top 100,000 (0.2%) sites earn 74% of all the revenue according to Alexa.  As a friend, how do you knock some reality into Sam, without crushing his enthusiasm?

THE SANDWICH METHOD TO HELP SAM FACE REALITY:

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My SUV Will Beat Up Your Hybrid & Save The World!

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Range Rover Evoque Black

RR Evoque Black Edition ~$68,000

Why is it that some hybrid vehicle drivers eventually start looking down at non hybrid-owning drivers in disdain?  Is the “holier-than-thou” complex too hard to contain during flights of fuel sipping passion?  It’s natural to feel that whatever you purchase is the right purchase.  After all, if I overpaid for a hybrid vehicle (zing!) in hopes of saving the environment when a similar non-hybrid vehicle will do, I’d defend my decision and look down on others as well!  Don’t be mad, let me explain.

THE FINANCIAL SAMURAI VEHICLE

For those of you who have been following this site for a while, you’ll know that I’ve had plenty of cars over the past 10 years, and I now drive a 9 year older beater SUV which is MAYBE worth $6,000.  I love “Moose“, as I affectionately call him, because he adeptly takes us up the snowy mountains during the winter with its 4-wheel-drive capabilities.  Moose can conveniently carry up to  5 people with plenty of storage space, which is especially helpful when our parents visit.  Too bad Moose only gets 15mpg in the City, and 19mpg on the highway.  I can hear the hissing and booing now!

I bought “Moose” for $8,000 three years ago, from a woman who was in a hurry to dump her car before relocating to Amsterdam.  Special brownies anyone?  The hybrid craze at the time was dizzying, where seemingly rational people would spend $25,000 for a Prius vs. $15,000 for a comparable Toyota Corolla.  If people did the calculations, they’d realize the premium price paid for the car is much greater than the gas savings over an average 7 year ownership period.

Consumers weren’t adhering to our “1/10th” rule either, as I knew plenty of sub $100,000/yr income earners spending $25,000 for these hybrids.  I must repeat here again that it is absolutely financial destruction if you are spending more than 1/10th your annual gross income on a car.  Multi-millionaires follow this rule, why shouldn’t the rest of us?  Don’t give into your weak desires!

MOOSE GETS DISRESPECTED, I FIGHT BACK

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