When to Look for Another Job

I have had the lucky(?) fortune for working for one employer. I was hired as an intern my Senior year in college and then became a full time salaried employee a month before I graduated. Overall this company has been great to work. Besides the usual complaints about the boss, I have it pretty good. Being on the "creative" side of our business, I don't have to dress up for work, nor do I have to deal with customers. We have great benefits, including a 50% matched 401(k) vested at the end of the year and Restricted Stock Awards with the same vesting. As I have grown with this company I have been promoted and have begun to get even more Restricted Stock (that usually I have full access to within a year) and even earned an entire week of extra vacation time. Also, year-end bonuses roll in at about a 5% average (higher if promoted). As some of you may know, I am currently seeking my CFP and the tuition is fully reimbursed by my company. I have even been allowed to hand off some of the work I feel is tedious and have begun to work in the FP side of our business. While I love what I do creatively, my company is allowing me to now do both of the things I have great interest in. I know everything seems peachy regarding my job and the 6 years I have worked at this company, but my finances are recovering from the mess I made a couple of years ago (more to come on this in the future).

I have no reason to leave this company, but if things still go this way, why would I ever leave? I truly enjoy my job and the creativity I get to exude, but when do you decide to leave and work for another company?

Financial Aid for Hurricane Katrina

My heart goes out to the victims of Hurricane Katrina. From what I've heard, this is the most devasting Natural Disaster in the United States. Other personal finance blogs have provided information where you can donate money. They are (sorry if I missed others):

Free Money Finance's Help for Hurricane Katrina
Frugal for Life's Help out the Hurricane Survivors
Money and Investing's Katrina, Wind, and Floods

Part of personal finance is making the decision to help others. This is one way we can help.

Smoking is The Devil!

So, I haven't posted in a couple of weeks or so regarding my personal campaign to quit smoking. I think that's because I've been pretty bad at it. I went 3 days without a cigarette and then it came time for the weekend and I broke down and had one, then another, and another. I wish I had never started!! The only good thing is that I have cut down my smoking. I'm not back to my pack a day habit.

I decided to seek more advice from people who have quit somking for at least 3 years or more and my new game plan is to establish a date after summer, weddings, and holidays that I can go a period of sustained time without smoking and really focus on it. It will also help that it will be 30 degrees out during the winter.

Chrematophobics

We elected to go out for an early dinner on Sunday. No, it wasn't in the budget, but by ordering only entrees and drinking water we only spent $16.74 between my girlfriend and I.

At the restaurant, they had trivia cards to keep you entertained during your meal. One of the questions was:

Although you would think this would be an uncommon affiliction, chrematophobics have a fear of __________.

a. walking
b. success
c. love
d. money
e. sitting

According to the verbiage I guessed "sitting". However to my surprise it was "money". This got me to thinking, there are some people of who have a fear of money? To get a further clarification, I got a definition from one of the online dictionaries. The definition of chrematophobia is "a fear of money, wealth". Wow, in this society there are people that are afraid of wealth? With how consumer-centric our society has become with spending money on things we can't even afford (read: the average consumer debt has been growing at a sickening rate), I would think that this really would be a sickness.

However, I personally, and think a lot of people would be in my camp, have a fear of not being wealthy. I have seen my parents unexpectedly fall to a one income household, just 5 years before retirement and have vowed to myself that I would better position myself so I did not have the financial worries that they currently have.

For those who have a fear of wealth, I hope your can overcome it. For those who are like me and have a fear of not being wealthy, I hope you can achieve all your financial goals.

Carnival of Personal Finance #11

Carnival of Personal Finance #11 is up at AllThingsFinancial's new blog.
This week includes my piece on Important Financial Documents

Stop by and take a look.

The Cost of Vision -- Eyeglasses and Contacts

My girlfriend needed to get a new eye prescription as her eyes had been bothering her for the last week. The company she works for does not have vision benefits (not even discounts at certain providers), so she wanted to go to Pearle Vision (a franchise eye exam and eyewear store). The last time her eyes were checked was just over a year ago and sure enough her prescription changed a little bit.

After her eye exam, she was told to select which frames she wanted to purchase. The least expensive frames (without lenses) were $109.99, with the pair she really liked at $199.99. As she was pondering which pair to get, I suggested we go to Costco, where I have a membership. I told her my mom and sister always got their glasses at Costco because they were a lot less expensive. So she paid for her eye exam and took the prescription to Costco. On our way out we asked how much the contacts would cost and they said $27 per box.

At Costco, my girlfriend found eyeglasses she really liked. They were a name brand and combined with lightweight carbonate lenses and anti-glare coating cost a total of $175.01. If she were to order even the cheapest set of glasses with the same option at Pearle Vision it would have at least cost $225. Add $80, if she purchased the glasses she really wanted. Also, we purchased contacts which for the exact same brand were only $13.95, compared to the $27 at Pearle Vision.

Adding up the cost of glasses and contact lenses and supplies for one year, she will be saving major bucks in the future. As of now, I thank my parents for giving me better than perfect vision so I don't have to worry about this!!

Buying a Car on Ebay

Here's some insanity from the USA Today regarding purchasing a car from Ebay.

Here's a couple of notes from it:

1) EBay Motors has sold more than 1 million cars since 2000.
2) Although eBay won't say how many cars it expects to sell this year, it says a car is sold through eBay Motors every minute.
3) Nearly 75% (of these cars) are sold to long-distance buyers.
4) EBay says a Corvette is sold on the site every 47 minutes.

This is just insane. I will never buy a car sight unseen (pics on the internet don't count!). Being a mechanical person I can scrutinize a car better than the folks over at CarMax.

Would you ever consider buying a car from Ebay Motors?

Consumer Spending and The Price of Crude Oil

A snippet on Crude Oil Prices taken from CNBC's website...

After another record, is crude headed to $100?

Oil prices wouldn’t go away and probably won't be going away any time soon.

For most of the morning, the price of crude oil was falling. The selling ended in the afternoon, however, and crude bounced to a new record close of $67.49, up 17 cents from yesterday. Crude also hit an intra-day record of $68.

The close came as the catalyst for Wednesday's oil rally -- the approach of Tropical Storm Katrina to Florida and, possibly, the Gulf of Mexico -- faded.

For all who profess delight that oil prices haven't affected the economy much, you're going to be challenged. Oil is starting to have an effect on consumer spending, said Stuart Schweitzer, the global markets strategist at J.P. Morgan Asset Management. Many consumers are starting to "scrimp and save" to pay the bill at the gas pump, he said on CNBC's "Closing Bell." And they face the prospect of big increases in home heating costs this winter.

I just think Stuart's comment is great! It's finally affecting consumer spending!!! Ha, I guess analysts and strategists don't read finance blogs. I think almost every financial blogger has posted on this subject!!

Historical Documents Regarding Portfolio Theory and Asset Allocation

For those of you interested in reading important investment theory documents here is a link to some of the best financial and portfolio theory documents of our time (including Markowitz, Sharpe, and Malkiel). This is more academia, as opposed to the articles posted on MSN, CNN, etc.

The Financial Decision of Car Ownership

This is a continuation of Should I Sell My Car?. After a lot of thinking, I have decided NOT to sell my car. Why?

1) I bought this car NEW four years ago. Sticker price of the car was $24,100. Current value is realistically $8,000 or so. I have owned this vehicle throughout its major depreciative years. If I were to buy a car in a year or so, it wouldn't really benefit me to sell my current vehicle right now, because it will not depreciate that much over the next year or so.
2) I know the history of my car. I know that it hasn't been in an accident. It's been garaged most of its life. The engine and transmission have been regularly maintained. This is pretty important knowledge in my opinion.
3) I found a garage about 4 blocks away that will cost about $40 a month. I can park/store it there and we can still use my girlfriend's car (still under warranty), and split the costs for operating her car. This is what I would be doing if I sold my car anyways. Therefore, I am saving money on major maintanence and gas (two of the major costs of my car). I can also lower my insurance by informing them that it is not a daily driver and will have less than 5,000 miles put on it a year.

Because I am not going to sell my car I won't have a large amount of money to pay my debt off. Therefore, I have constructed a plan to spend less than what I earn and make sure every dollar is allocated to something before my paycheck comes in. More to come on this later...

Let me know...do you think my decision makes sense?

Making Food at Home to Save Money

I sat down with the girlfriend on Sunday to go over what food we should buy for the week. For the last couple of weeks, we've had the problem of buying a bunch of food and not eating it before it has gone bad. Therefore, we sat down together and planned all of our meals for the week. This included Breakfast, Lunch, and Dinner for each day. Seeing as I am the cook and the person with the most time in the morning, all of the preparing and cooking falls on me! However, to be fair, we sat down together and decided what we would eat for the week.

This has worked real well so far (yep, only 2 days). On Sunday we spent $87 on groceries (for two people, lasting through next Sunday morning). It's not that frugal, but it's a start compared to Dunkin Donuts Coffee, Fast food lunch, and "whatever" for dinner, which usually meant eating out. It's been great to come home from work and know exactly what I am cooking that night. Also, who knew a filet mignon from the grocery store for $3.50 each would taste so good!! Better than paying $38.95 at a steakhouse.

Behavioral Finance

I have heard this study quoted many times and found it once again...

"In 2001, Dalbar released a study entitled Quantitative Analysis of Investor Behavior (Behavioral Fianance), which concluded that average investors fail to achieve market-index returns.

It found that in the 17-year period to December 2000, the S&P 500 returned an average of 16.29% per year, while the typical equity investor achieved only 5.32% for the same period - a 9% difference. It also found that during the same period, the average fixed-income investor earned only a 6.08% return per year, while the long-term Government Bond Index reaped 11.83%."

Why are we as investors so bad at figuring this out? Our brains/emotions/psychology have a lot to do with it! Most cannot passively invest and HOLD!

As of now, I don't really need to worry about this. I am not making individual stock picks or moving in and out of mutual funds or ETFs. I merely Dollar Cost Average (DCA) into my 401(k) and IRA. In the future perhaps I may have to make sure I remember the above research on Behavioral Finance as my net worth increases.

Important Financial Documents

This past weekend I had been comtemplating selling my car (more on this in the future). However, as I thought about selling it, I got distracted as my mind then began to try to think of where I put the Title to my car that would enable me to sell it. You see, a major pain for me is staying organized.

Seeing as this is a personal finance blog, I'll stick to the subject of keeping your Financial House in order. Not only is this good come tax time, but it is very good in case an emergency happens, or if you just want to check up on things. For example, you may need a birth certificate to get a an ID of some sort, perhaps a passport.

If you're like me and you've ever spent hours/days looking for a financial document that you just had to find, you'd probably agree with me that having these documents organized would have been well worth the effort. I have compiled information from my readings that can help you know what and how long to keep some of your most important financial documents.

Copies of bills that support income and expenses for 3 years after the due date of each tax return (W-2s, K-1s, 1099s, cancelled checks for items being deducted). It's no secret that the Internal Revenue Service (IRS) audits only a tiny fraction of the millions of returns filed each year, but if you don't have supporting proof then deductions may not be allowed. Most of the above documents can be held in a fire-proof lockbox.

Other very important documents are personal records, such as birth/marriage certificates, trust agreements, powers of attorney, pictures for insurance purposes are best to be kept in a safe deposit box. However, do not keep your Will in your safe deposit box. In one of my recent classes, our Estate Planning Instructor specifically mentioned a case where a funeral had already taken place according to how the heirs wanted to do it because the decedent's Will was in a "Sealed" safe deposit box as is mandated by some states when the owner dies and the instructions for burial were contained in the Will.

Some documents should never be thrown away. Any brokerage statement, etc. that will help you establish a basis for an investment should be kept if you would like to take advantage of the more favorable methods of capital gains calculations. This goes the same for any account such as an IRA in which you would like to keep these statements until the money is withdrawn (you never know what could happen to these records). These can be kept in your safe deposit box as well.

So what does this mean for me? I've got to find the last couple of piles I have put together of important documents and get them to their proper place (safe deposit box or fireproof storage).

Carnival of Finance #10

Thanks to Dawn at Frugal for Life for putting together this week's Carnival of Finance

My submission on Should I Sell My Car? made it into this week's Carnival of Finance!

Buy Land

This is one of my favorite investment ideas and below is a great quote:

"Buy land. They ain't makin' any more of the stuff." -- Will Rogers

I don't take this as any real estate. I believe the meaning of this statement is land by the acreage. One of my long term goals is to own 50-100 acres about an hour to an hour and a half away from a city and make a go of sustainable living and agriculture. Basically, doing my best to live off the land. There are many great websites out there that discuss this concept and I have read some great books on the topic as well.

Have a great weekend!

Should I Sell My Car?

Thanks for the well wishes on being a quitter!! Day 3 has been successful so far.

Soooo....I briefly mentioned that I was debating whether or not to sell my car. I will throw out all the data to you and you can help me decide (although, I think the answer will be quite clear).

I will break this down the following way:
a. background
b. true cost of operation of vehicle
c. Nada vs. Kelley Blue Book value
d. what to do with the proposed income from selling car and adjustment of budget with monthly savings

Background:
I own my car, a small SUV (Chevy S-10 Blazer w/ v6), in a major metropolitian city. I live in a condo building in which there is monthly parking at a cost of $100 a month. I live 5 blocks from public transportation that can get me to work or wherever I need to go. Also, my girlfriend moved in recently. We can not park another car in our building's garage, and all of the garages around us are full (within a 1.5 block radius). For the last 3-4 weeks, we have left her car parked on the street because it is free. However, we have not moved it once and used my car for everything because I can come and go as I please with the garage parking. Her car had to be moved this morning because of street cleaning and in the winter if there is snow on the ground the car would have to be moved. Therefore, we basically have an extra car sitting around (with a warranty and better gas mileage than mine). Downside of selling car would be what would happen if girlfriend and I break up. In that case I would say that if I had to buy a car I would buy a good used $5,000 car.

True Cost of Operation of Vehicle:
From 8/04 to 8/05, I incurred the following costs for having my car...
a. Insurance..........$2256.00 (living in a city sucks! average is $188/ month for insurance for me)
b. City Sticker........$80.00 (have to have this)
c. Gas....................$1,750.00 (14,000 miles per year, 16 mpg, $2.00 per gal of gas)
d. Parking..............$1,200.00
e. Oil Changes.......$120.93
f. Major Repairs.....$2,014.69 (Both front whell bearings, tranny and differential service, brake fluid flush, fuel filter, rear hatch actuator)

TOTAL for past year of operation (not including payments because I own it!) = $7,421.62. That's a cost of $1.89 a mile, including gas. So my drive to work costs about $47.00 a day!!!

Sharing expenses of gas, garage, oil changes, and the deductible for major repairs with my girlfriend with her car over next year should total 1,136.36 for me.

Nada vs. Kelly Blue Book:
Looking into the value of my vehicle if I sell I went to nada.com and kbb.com. After typing in my vehicle information I was astounded between the difference between these two used car pricing guides.
Trade-In Value: Nada = $8,900 KBB = $6,700
Retail Value: Nada = $11,125 KBB = $11,005
Private Party Value: Nada does not provide KBB = $8,260 - $8,875

After looking up these values I thought it interesting that they are very different on the Trade-In value, but based on what I have seen and if I was going to put my car up for sale, I would ask about $9,000, as it is in great condition and I have all service records for it.

Income from Sale and adjustment of budget:
By selling my car, I can further my debt payoff and accelerate it very quickly. With this and the addition of my ESPP (Employee Stock Purchase Plan) and Restricted Stock Awards at the beginning of next year, I would pretty much have my CC debt paid off in less than 5 months. This would also include adjusting my budget and pushing all of the extra money I would be saving from this decision for the next 5 months to paying off my card. Oh and I can start an emergency fund, of $1,500 for the time being as well. Not too bad of a turnaround for five months of time.

Let's all hear what you have to say about my situation. I think you can tell which way I am leaning!

Quit Smoking

Day 2 of no smoking...I thought I'd take the opportunity to explain what I do to help me when quitting cold turkey.

1) Money/Health - ALWAYS REMEMBER THE MONEY YOU ARE SAVING AND THE BENEFITS TO YOUR HEALTH FROM QUITTING SMOKING!!
2) Ibuprofen - For a couple of weeks I take Ibuprofen in the morning so that I don't get headaches, etc. throughout the day.
3) Straws - When I visit a place that has straws (McDs, diner), I grab a couple and then cut them in thirds. This works great as a fake cigarette while you are driving.
4) Gum - I chew spearmint flavored gum when I really have a craving. Somehow it helps.
5) Water - I drink a lot of water and try to stay away from cola.
6) No drinking! - If you want to have any chance of surviving the first month of quitting then you can't go out drinking. Perhaps you could once or twice in the first month, but I would tell you from experience...don't stay if you are getting the feeling of being drunk. You will not make it throught the night without a smoke.
7) Almonds - Have some kind of food that forces you to eat little pieces from your hand. I use almonds...and sometimes when I want to cheat...I use Reese's Miniatures.

All in all, quitting is very hard. If you have done it then you know what I mean. Basically, most of the above are tips to help you satisfy the oral fixation of smoking (the toughest part of quitting!).

Back from a long weekend - Gas Prices and Quitting Smoking

Went out of town for a long weekend as a friend of mine and I went fishing for 3 days. We had another friend let us use a bigger truck and boat (yes to go fishing!). With gas between $2.70 and $2.80 during our drive...the cost of gas hurt the Kostanza in my back pocket (Seinfeld reference). It ended up being about $180.00 in gas for the weekend. That's $90 a person. In one weekend, I spent about 60% of my gas budget for the month. This just ads to the "sell you car campaign" that is currently bouncing back and forth in my head.

On another note, today is my first day without a smoke. I smoked almost a pack a day and have decided to quit cold turkey (for the 4th time, I think). Rationale for this decision is based upon a few things:
1) Parents are nagging me.
2) An acquantance from college recently developed Stage IV lung cancer.
3) The FV of my smoking habit if put away for 30 years at 8% a year is $194,393.99!!!!
4) Yes I will say it....Peter Jennings dying of Lung Cancer because he was a smoker (even though he quit and picked back up during 9/11).

Expenses for today:
Coffee for girlfriend and myself = $3.26 (I need to get off my lazy but and make coffee in the morning!!)
Lunch = $4.22 (I usually make lunches but got lazy the last couple of days)
Supplies = $6.38 ((water bottle, air freshener (for car, because I may sell it), and packs of gum (oral fixation habit from quitting smoking))

Spending Track 8/10/2005

So let's get the dirty laundry aired....

Morning....Med. Coffee, 3 packs of smokes = $17.39
Evening....Dinner (before class) = $8.58
Evening....Gas = $33.41

While lunch was brought in by a vendor I still spent $59.38.

Spending habits will change. I've started to make my lunches and I plan to quit smoking next Tuesday. Why next Tuesday you may ask....we'll because I've got a weekend full of driving and coffee and there is now way I could stop smoking during all of that. More on the no smoking effort to come....

Finding Direction

Trying to find the right content to publish on this blog has been difficult. For now I am thinking of posting daily transactions and decisions and tracking my progress towards Financial Fruition. This should be a fun ride...more to come.

EDIT 8,21,05: For now I have developed a long list of possible blog topics and will be posting regarding those for quite awhile. Stay tuned and thanks for reading!

Listening to Dave Ramsey

As the Dave Ramsey empire grows, I have become akin to listening to his podcast even though it is 38 minutes long with 15 minutes of ads for his own or endorsed products. Now don't get me wrong, Dave does provide great advice for people as far as getting rid of debt, building wealth and the behavioral finance problems of the masses go, however his big broad brush approach to everyone's problems is hard for me to swallow (I have this problem with most of the "famous" financial counselors). If you listen to the end any of his programs it basically says, "we suggest you seek the advice of a financial professional". If that's the case, then what is Dave Ramsey....

Let me take a stab at a description: An egotistical man who is making big time money with all of his kits, programs, and monthly fees.

If you want to be a part of his website, it's $8.95 a month. How great is that...if your broke and in debt, pay me $8.95 a month to partake in mytotalmoneymakeover.com. What's the future value of that $8.95 a month over 30 years making 8% (no, not the 12% Dave likes to refer to in all of his FV calcs)? And the answer is.... $12,166.62.

--EDITed 8/17/05, thanks fivecentnickel.com--