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October Net Worth Update

Published on October 14, 2008 in Net Worth. 0 Comments

I am almost two weeks late calculating our net worth for the beginning of Quarter 4, which gave us some extra time to pay down our debt a tad, but also enough time to wreak havoc on our retirement portfolios.

Our total assets are down only 13% despite over 30% losses due to additional savings contributions. Our total debt is down 36% from July, and down 64% from the beginning of the year. Overall our total net worth is up 23% from last quarter, not too shabby of a result, but not nearly the change we’ve seen in previous quarters, mostly due to a slowdown in our asset growth.

The next few months are going to be hard with the economy in bad shape and my wife still looking for a job. But we’ll get through, and I am thankful that we’ve gotten this far. At the beginning of the year our minimum payments on all of our credit cards, student loans, and car payments would have been close to a thousand dollars. There’s no way we could make those kinds of payments now, or at least not very comfortably. Now our minimum payments are closer to $100, which we’re obviously paying much more on. But it’s nice to have flexibility if we need it.

Another Extreme Makeover house might be foreclosed

Published on October 6, 2008 in Real Estate. 0 Comments

While I hate to link to Perez Hilton, it appears that another Extreme Makeover house is going to be hitting the foreclosure chopping block. It sounds like this one is due to fines on the property versus not being able to actually make the payments, and it sounds like the lien, $29,000, is a bit excessive.

A Brutal Day in the Stock Market

Published on September 29, 2008 in Investing. 0 Comments

After the House voted against the bailout today markets have basically blown up. Our retirement portfolios are down over a thousand dollars in one day.

I am not totally sure how I feel about the bailout. On the one hand I don’t want my tax dollars bailing out companies that made poor financial decisions. On the other hand, not helping out those same banks could have terrible ramifications for credit markets in coming years.

If I had to guess, I wouldn’t expect to see a turnaround in the financial markets until at least the end of 2010, if not later. There are too many negative factors facing our economy. The question is how does this affect my investment plans. Common wisdom says to ignore market fluctuations and invest for the long term. But my gut says that there’s a better way to invest than the mutual funds that I’m in. I might have to stop with the passive strategies and take up active investing by picking my own stocks, but I’m not sure I’m ready for the time commitment that will take.

Another concern for me is my job, which is with a major bank. Luckily it’s one of the more stable ones, but then again everyone thought Enron was doing great until they weren’t. Hopefully the news in the coming days is a little better than today’s news.

Get ready for those tax increases

Published on September 25, 2008 in Taxes. 0 Comments

With all of the bailouts happening it really makes me wonder what else that money could be used for. Luckily The Consumerist has done the homework for me so I don’t need to do the research.

But hey, at least we don’t have socialists for politicians, right?

Whoops! I just bought a new camera

Published on September 22, 2008 in Buying Stuff. 0 Comments

Last week I made a very non-frugal purchase. In case you didn’t guess, I bought the wonderful camera pictured here, the Canon Digital Rebel XSi. I have been wanting to buy a digital SLR for well over a year now, and have waited due to our debt situation. But now all of our debt is paid down except for a small student loan and a 0% credit card. I get paid every two weeks, which means I get paid three times in October. So instead of doing something responsible like pay off more debt or build up our emergency fund, I bought a camera.

My wife and I have a trip down to Big Sur coming up in a few weeks, which is why I decided to buy it a little earlier than I should have. This is the first time in a few years that I can take advantage of the 30 day grace period on one of my credit cards since it’s now at a $0 balance (well it was for a few days anyways).

Was it the smartest choice? Probably not. But with the amount of hiking we do, and with the holidays coming up I should be able to get a lot of enjoyment using it. And hopefully I can get some better pictures coming through on this blog. And honestly, I’m pretty darn excited to get it. The only thing I slightly bothers me about making the purchase is that I am now lusting after a few high-priced lenses.

So there it is. I will be a slave to money and to my job for a little while longer. But at least I will be taking some rad pictures while waiting for that time to come.

Is Speed Reading Legit?

Published on September 18, 2008 in Productivity. 0 Comments

Something that has intrigued me for a long time has been the idea of speed reading. It is alluring to think I could knock out a 300 page book in a few hours or be able to quickly cover massive amounts of news every day. I have read a few articles on the subject here and there, but have never really felt like speed reading was meant for comprehension. But working on this blog has made me realize that being able to process more information quicker would be advantageous, so I am looking for solutions to learn, and to see if speed reading really works.

I found a link to a free online pdf file written by Paul Edwards on non-fiction reading strategies on the Personal MBA website. The article suggests that reading a 300 page book in six to eight hours is doable by following the techniques outlined. I am going to attempt to use these techniques and see how they work. I’ll follow up in a few weeks and let everyone know how it goes.

Taking a look at the health care plans of the Presidential candidates

Published on September 17, 2008 in Health and Taxes. 0 Comments

There was an interesting editorial piece in the New York Times regarding John McCain’s healthcare plan and what it entails.

A few of my favorite parts :

the McCain health plan would treat employer-paid health benefits as income that employees would have to pay taxes on

So much for cutting taxes. And later in the article:

The whole idea of the McCain plan is to get families out of employer-paid health coverage and into the health insurance marketplace, where naked competition is supposed to take care of all ills

We’ve seen lately how well the free market works when regulation is weak, and there’s no doubt regulation would be weak in the healthcare sector.

For comparison purposes, here is another opinion piece in the Wall Street Journal comparing Senator Obama’s plan to Senator McCain’s.

Any thoughts on what matters to you in healthcare reform?

Another $85 billion. Seriously?

Published on September 16, 2008 in Taxes. 0 Comments

Tonight it was announced that the U.S. government will bailout A.I.G. for the bargain price of $85 billion dollars. Add this to the $29 billion for the Bear Stearns bailout and $25 billion (or more) for Fannie Mae and Freddie Mac. Now we’re talking $139 billion dollars that the government is paying out to companies who made poor financial choices and put the United States economy on the line.

Your taxes are not going down

McCain and Obama both like to advocate lower taxes, but the more the government spends the less likely it is that either of them can hold true to their promises. Keep in mind that the government can tax you indirectly through seigniorage, aka the inflation tax. It costs the federal reserve almost nothing to print new money, which the government can then use to pay their debt. But surprise! Printing new money means the money in your pocket is now less valuable than it was before.

So by printing out money and under-reporting inflation the government can take your money right out from under you.

Privatize the profits, socialize the losses

Politicians advocate a free market on the way up, but when things turn sour it is almost guaranteed that they will rush in to help on the way down to prevent stock holders from losing too much money. Of course they are selective in who they bailout. Generally the riskier a company is the more likely it is to be bailed out.

I am a believer in free markets, but if the government is going to step in when things go wrong they need to put regulations in place to limit the tax payer liability when the market goes bust. The saddest part is that money going towards corporate bailouts is money that could go towards helping people who really need the money like those without healthcare.

Times are rough, and we are seeing drastic changes to the financial infrastructure of the U.S. Now is the time to pay off any debt you have, whether it’s credit card, autos, or a mortgage. If you don’t have a liquid emergency fund with a few month’s salary cushion then it’s time to build one up. Only then would I recommend trying to invest money in the stock market, and even then I am not sure I would recommend it.

Keep an eye on what’s going on in the news. There are more failures coming for sure. Washington Mutual is likely to be next, and who knows what’s going to happen in 2009. I still believe that things will get a lot worse before they get better.

Want to feel like a millionaire? Watch this movie

Published on September 16, 2008 in Movies. 0 Comments

Wednesday night we watched the documentary film ‘God Grew Tired of Us.’


Seeing even a glimpse of what life is like in Africa really makes me feel fortunate to live comfortably where I do.

I have seen the website Global Rich List Before where you can put in your salary and see how you stack up against the rest of the world (I’m in the top 0.95% of the richest people in the world), but it’s really hard to put that into perspective. Watching this movie changed that.

Think about what life would be like without running water or without a toilet. Imagine having to cook every meal you made from scratch. Worse, imagine not being able to eat whenever you wanted and having to go days without food. Imagine what it would be like to not have electricity. These are just a few of the things we take for granted that others around the world do not have.

On the other hand, it was interesting to see how the three men brought to the U.S. handled their new jobs. Although they were happy to work and to be able to send money to their friends back in Africa, they complained about feeling ‘alone’ since they no longer saw their friends whenever they wanted. It made me see a little more of the trade-off between money and your life, and how tricky it can be to balance those two things.

It’s a great movie. If you use Netflix I highly recommend adding it to your queue.

Our first trip to the farmer’s market

Published on September 15, 2008 in Buying Stuff and Health. 0 Comments

This weekend my wife and I finally made it out to our local farmer’s market. It was fun to walk around and check out the stands, although there wasn’t much to see. A few observations I made.

First, the prices were not as cheap as I thought they would be, and in some cases the prices were higher than at the local Whole Foods. I brought along a small notebook to record the prices we paid for everything. I am going to compare what’s cheap and what’s not so we can focus on buying the cheaper stuff there.

Second, the quality of the fruits and vegetables was very high. This is probably due to the fact that everything was grown locally, so it was fresh and in season. The quality of the food partly makes up for the prices paid, although if something is in season it is likely to be cheap at the grocery store as well.

Last, and something that will make it worth going back every week, was coupons for Whole Foods. Someone was handing out $5 off $25 and gave us two. This is 20% off a $50 purchase, not too shabby. Coupled with finding things on sale, we managed to get a lot of food for a pretty good price.

Overall it was a fun trip for the morning, and definitely something we will try to do every weekend going forward.