Financial Fruition

Moved to my own domain - financialfruition.com

2006-04-05T20:01:00.000-07:00

I am proud to announce that my new address is www.financialfruition.com. I look forward to posting regularly on personal finance issues, as well as shorter posts (please see the blue middle section of my new site).

I have changed my feed to reflect the new domain. However, if you have a link to me I would appreciate if you could update it. I will be sending an email to most of the folks so they can make the change, but I may forgot some. Thank you, in advance, for doing this at your earliest convenience.

Guess Who's Back

2006-03-29T06:17:00.000-08:00

Whew, it's been a doooosy of a year so far for me. Death in the family, bad personal injuries, and Blogger deleting my blog for over 3 weeks. What fun. On top of all that, I had to complete my biggest project of the year, our Corporate annual report.

I must correct myself regarding my last post on Sarbox and working on my company's annual report. This year's 10-K filings were supposed to be due at the end of February, however the government granted an extension in mid January that allowed it to be filed as late as March 16, 2006. However, next year we go back to having to file by the end of February. I still feel it is somewhat ridiculous, but don't want to ponder at a better solution.

I look forward to getting back into the swing of things in the blogosphere. Time to build up readership again. Thanks to those who still have me in their RSS feeds and will read this.

Type at you soon.

Why I love Sarbanes Oxley

2006-02-09T17:44:00.000-08:00

What a hoot! Let's regulate corporate financial reporting by upping the time required to file your company's Annual Report. Hey Mr. (or Ms.) Government, do you really think you are going to have so called, BETTER numbers by reporting them 2 weeks earlier?

To be honest (it was March 31st, then March 15th for last year, now the end of February for 2006), it really kind of ticks me off that our government imposes rules like these because it's completely backasswards. So that we can regulate companies better, we will just have them report numbers on a quicker basis, without consideration to what effect it may have on someone who is responsible for completetion of the Annual Report. Might it not cause undue stress, which could lead to errors?

Now don't get me wrong, I am mostly for the regulations contained within Sarbanes Oxley (thank you Enron!). They do serve the consumer and general public, I won't argue that. However, what about the people who put together a document such as the annual report? The bean counters and marketing people who actually DO the annual report. Our annual report used to be a normal project for me at the beginning of the year. This year, it is an enitre additional job! Now I have to still work on normal projects, while trying to work on the annual report at night. Ridiculous.

Needless to say, this is my reason for not posting that much, plus the fact that I had a death in the family in late January. Hopefully in the near future, I'll be in a more jovial mode.

Collector Cars -- Do you have $4 million to Invest?

2006-01-23T22:02:00.000-08:00

Well one thing I know for sure that I would not invest in is 1 of 12 General Motors Futureliners ever made. I'm not sure, but I really hope a museum invested in this monstrosity. This custom made bus from the early 1950s, was up at this year's Barrett Jackson auction. Last year at this auction they had a concept car from the mid-1950s cross the block at $3 million. There are many better things I could think to do with this amount of money than spending it on some one-off vehicle that you can't really drive.

The craze of investing in collector cars has become more mainstream in the past few years. BusinessWeek has a section with articles on Collecting Cars. Speed Channel devoted 30+ live hours to this years Barrett Jackson Arizona auction (I watched about two hours of it!).

From what I've read and heard, muscle car collecting is all the rage now. Most of the cars I saw cross the auction block were 60's muscle cars: Corvettes, Camaros, Mustangs, Road Runners, etc. This, reportedly, stems from the baby boomer generation, who grew up wanting these cars around the age they were legal to drive. What was then a dream, can now become reality as they have amassed their savings and want to spend it on accumulating one, or a few, of these cars they idolized.

What do you think? Is it crazy to spend $50,000-$100,000 on you dream collector car?

Carnival of Personal Finance #32

2006-01-23T16:40:00.000-08:00

This weeks carnival is up at Be Capitalism. Check it out when you have some time!

Making Progress

2006-01-17T08:45:00.000-08:00

Last night I updated my progress report sidebar. Weight is coming down. Debt should come down further very soon (regular payments, as well as bonus/restricted stock). Net worth crept up a little (and it should go higher with my employee match in my 401(k)).

The Carnival of Personal Finance is up at Savvy Saver. Wow has this thing grown! So much to read, so little time to read it all!

Happy New Year!

2006-01-03T12:16:00.000-08:00

Happy New Year to all!

There are some festivals and carnivals to check out this week, so without ado:

Carnival of Personal Finance #29
Carnival of Debt Reduction #16
Festival of Frugality #4

Merry Christmas

2005-12-25T19:28:00.000-08:00

Merry Christmas to all! I'm back home with my parents enjoying some downtime. Hopefully the Holiday Season is treating you fine as well.

Doing some Financial Planning (or Goal Setting for 2006)

2005-12-15T12:20:00.000-08:00

It's time to tighten down the spending, smoking, and overall carelessness with regards to my personal situation. I am very knowledgable in financial planning, but I don't practice it professionally or personally. I really need to get on track in regards to personal finance, the smoking thing, and blogging regularly. So here are some of my goals (financial and personal) for 2006:

1) Pay down all of my credit card debt. This amount is just north of $15,000. I really want to take care of this next year and wipe it out. We'll see how this goes. I have a bonus coming soon, and Restricted Stock from my company that I can exercise. This could knock the number down near $10,000, which from there, I think this goal is definitely doable. Paying off all of my cc debt is going to be my main financial goal for the year.

2) Keep track of expenses daily. Not only personally, but for my "house" account with my girlfriend. We are using the spreadsheet method for budgeting and it has worked. However, I would like to actively track our, and most specifically my, spending. This will be one of the only ways for me to monitor and figure out how I will be able to pay off my credit card debt.

3) Set aside $1,500 for an emergency fund. I know I should have 3 to 6 months of expenses as emergency fund, but this amount will have to do while I am focusing on paying off my credit card debt.

4) Begin saving for major purchases. This will be a general fund of which possibilities include, house, engagement ring, etc. Keep in mind this is a secondary goal to paying off credit card debt.

5) Negotiate a promotion and raise with my boss. This will be the best way to increase my income for 2006 and I think I can achieve this in June.

6) Start and maintain 5 niche blogs or websites. I've got some ideas and one is actually under way.

7) Be Healthier. This includes quitting cigarettes (I've spoken about this before) and going to the gym regularly (3 times a week). This goal also includes losing 40-45 pounds, hence the weight loss pie chart (isn't that kinda funny) in my Progress Report.

That's it for now. Perhaps these may be a little ambitious. But they are out there now and the gauntlet has been laid!

Single Guy Money and his Save Money vs. Debt Reduction Debate

2005-12-14T07:48:00.000-08:00

A Single Guy and his Money is a newer blog I've found. Billed as a 28 year old single professional male playing the money game, the author, Singleguymoney, has received a slew of comments regarding his most recent Networth update. Among these were some very detailed and intricate comments questioning his large bank balance and large credit card balance. Most people thought he should pay down his cc debt with the large bank balance. In response to these comments regarding his networth he outlined his fear of not having liquid money and a lot of readers continued to "bash" him for this belief. Well, he finally did it...at least part of the way, by paying a significant of the cc debt.

This series of posts and comments were a great read and I highly recommend taking a gander if you have time!

Carnivals and Festivals -- Personal Finance, Debt Reduction, and Frugality

2005-12-13T15:49:00.000-08:00

The Carnival of Personal Finance #26 and Carnival of Debt Reduction #13 are up! Also, the very first Festival of Frugality is up! Tons of great info to read, check them out when you have time!

Reporting Progress

2005-12-13T11:44:00.000-08:00

A lot of bloggers report their progress to their financial goals. While determining my 2006 short- and long-term goals (still working on), I figured it would be a good idea to include a progress report as well. I have decided to adapt the overall type of reporting that NCN over at No Credit Needed uses. For now over on the right is what I've got. I may end up adding a monthly spending tracker (record my budgeted expenses vs. actual on a daily basis for the monthly). Hopefully, all of this will help me (and my readers) stay on track with regards to my personal finance goals. Any comments, feedback, or suggestions are generously excepted.

Now I've got to get back into posting regularly. (insert frowning emoticon here, although I dislike emoticons!)

Carnival of Personal Finance #24

2005-11-28T06:27:00.000-08:00

Gobble, Gobble, Gobble. Welcome to the 24th edition of the Carnival of Personal Finance. As most of you settle in from a long weekend, I hope you find this week's Carnival full of enlightening information!

Budget Breakdown: Dawn at Frugal For Life drills down the essential information on budgeting. "D" is something I definitely need to do better!

How Much Money is Enough?: Jon from Smart Money Daily wonders aloud about how much money he needs to feel like he has enough.

The Typical American Millionaire: FMF over at Free Money Finance takes a look at some of the qualities that define the typical American millionaire.

Poor Money Management: Cathy at CFO (Chief Family Officer) highlights a problem with poor money management and her solution in her financial tip of the week.

Too Much Future, Not Enough Present: Nina from Sitting Pretty Financially discusses how we can let finances define us which is the force behind modern day consumerism or how we can view money with the same sacredness usually reserved for inner calm.

Microsoft's XBox 360 Strategies: Flexo at Consumerism Commentary takes a look at the strategies Microsoft is using to sell the company's newest game system, the Xbox 360. The device sells at a loss, so how will the company make money, and what's in it for the consumer?

Budgeting Made Easy: Another basics of budgeting discussion is provided by Retire At 30.

Discount Plans Debunked: Henry over at InsureBlog provides a realistic assessment of the pro's and con's of so-called "discount plans" for medical services.

Games Lenders Play (Part IV): Dan from Searchlight Crusade provides us with a lengthy post on the games that lenders play.

Auto Insurance 25 Year Milestone Analysis Revised: Jim at Blueprint for Financial Prosperity invites us to view his revised look at how his auto insurance changed when he turned 25.

A Cool Way To Give Cash: Mighty Bargain Hunter wants us to overcome the crass factor of giving cash by dressing it up a little!

10 Year Plan: What's your 10 year plan to be financially independent? Financial Freedom 4 All outlines his!

The Week Ahead: Tom Hanna at Financial Options gives us a summary of economic indicators and other scheduled information releases that investors should watch in the coming week.

Unclaimed Property That’s Rightfully Yours: Steve Pavlina shows us how to search and find for unclaimed property that as he says is rightfully yours.

How Taxes Affect Your Returns: Clint at Million Dollar Goal gives us a look at how taxes affect your returns, and what you should do about it.

Cost of Celebrating Thanksgiving: Jane Dough (what a great moniker!) of Boston Gal's Open Wallet totals the cost of celebrating Thanksgiving this year.

New Job: Brian wife's guest posts on Financial Reference giving her perspective of him taking a new job as a teacher and the impact it will have on their family finances.

S&P 500 Earnings Estimates For 2006: The Real returns looks at the earnings estimate of the S&P 500 index for next year and considers that the index is not priced terribly undervalued or overvalued.

You Are a MACHINE...: ncn at No Credit Needed elaborates on a comment from a reader and highlights some of the secrets to his success!

Carnival of Personal Finance #23

2005-11-21T06:33:00.000-08:00

The Carnival of Personal Finance for this week is up at Frugal for Life. Check it out when you have time.

I will be hosting next week's Carnival of Personal Finance. Email your submissions to financialfruition @ my GMAIL account. Have a great week!

Personal Finance Podcasts

2005-11-16T18:03:00.000-08:00

I've listened to podcasts before the big slingshot to the mainstream that iTunes gave this new medium. However, I never really listened to any investment or personal finance podcasts. Over the last couple of days I have listened to some of these that grabbed by attention when reading through the ever expanding catalog at the iTunes Music Store. I thought I would report back on what I've been listening to:

1) Dave Ramsey Show Podcast: Hmmm, where do I start. As far as a podcast, the advertisements for Ramsey's endorsed or own products is lame. The show is about an hour, however almost 15 minutes of it is ads. It also isn't his whole show. It's an edited down version of his daily 3 hour show. But, I wouldn't want to listen to 3 hours of Dave Ramsey in a podcast, so that might be a good thing.

2) Pro Money Talk: This is a pretty good podcast. The audio is more often than not, pretty bad. However the content is some of the better out there. One of the shows I listened to was an interview with Ed Slott, the self-acclaimed IRA expert. Some of the other shows discussed Diversification, as well as the function and future of the Financial Planning Association. Don't be wary of the title, this podcast is fine for all ranges of financial education. There was one ad for a discount brokerage firm.

3) Sound Investing: A weekly podcast that gets pretty down and dirty regarding investments, taxes, and overall themes of personal finance. However, it is more detailed regarding the markets and for those of you who are index fund (or etf) investors, you might want to pass of this podcast.

4) On the Money: A podcast from NPR in Florida, this is a decent show that is very factual. The main speaker is pretty boring to listen to, until he talks with guests. I don't know if every story is regional, however he had an insurance expert speak about the after effects of Hurricane Wilma, which passed through Florida.

5) The Market Guys: Strict stock trading podcast whose ultimate goal is to sell you their presentations and tapes. Lots of discussion regarding the technical analysis of indvidual stocks. Not very good for the Personal Finance novice or amateur.

Do you listen to podcasts? If so, are there any Personal Finance podcasts that you would recommend? Let us know.

Cubs Fan, Sox Win

2005-11-01T16:44:00.000-08:00

It's still a little surreal that the Sox won the World Series. I wasn't really pulling for them, and it just seemed like a team from another state was playing in the WS for the American League. I guess that's because I live in Wrigleyville (on the North side of Chicago), where this picture kind of sums it up for me as Cubs Fan. Hey a little off topic, but entertaining nonetheless.

Forget the Hybrids, check out Diesels

2005-10-26T22:55:00.000-07:00

Kiplinger's has a pretty good article on Diesel vehicles and how you can recoup their mileage savings from the upcharge the dealer charges for the diesel engine option quicker than hybrids. I recently had a discussion with a good friend on this exact topic as he was considering purchasing a recently used TDI (diesel) Volkswagen. It makes perfect sense to me. I'd especially like the Mercedes E series diesel. Hey, one can always dream!

Business Week Cover Story: Jim Cramer and Mad Money

2005-10-24T18:12:00.000-07:00

Jim Cramer and Mad Money are the subject of the October 31, 2005, Business Week cover story. The story, titled "The Mad Man of Wall Street", provides a day a in the life of Jim Cramer, as well as a little bit of his background and the success of Mad Money for CNBC. It is a fairly long article (at least it seemed like it), that is unbiased and worth the read.

I still don't particularly like Jim Cramer's Mad Money or the effect it could have on the general investor as I have pointed out before. This article really drove home the point for me that Jim Cramer is a Wall Street and stock picking FREAK!

PS - One thing I was missing from my original post on Jim Cramer was his viewership which Business Week says is 384,000 as of October.

Carnival of Personal Finance #19

2005-10-24T05:54:00.000-07:00

This week's Carnival of Personal Finance is being hosted over at Consumerism Commentary.

I am Oxymoronic

2005-10-23T05:33:00.000-07:00

This will be first in a series of posts on why I would currently describe myself as oxymoronic.

As I was driving home from work this week, I realized that I don't do what I say and vice versa. I almost feel as if I am deceiving my readers, so lets "right this ship" and expose myself.

The first thing that comes to mind regarding myself being oxymoronic is two-fold in regards personal finance. One is the fact that I have a rather large amount of credit card debt (over $10,000). However, I have read almost every program/idea that has been published regarding paying down debt. I have even advised friends on how to pay down debt and have kept them in check by following up with them. I just can't seem to get on a program and stick with it myself!

The second reason is that my personal networth is $6,149.40. Seeing as this is not that high, I almost feel as if I have been lying to my readers. Don't get me wrong, I know I haven't been lying because I haven't said anything either way. But, it is now on the table and everyone knows (please make note of it FMF!) Yet, I still feel that up to this point I have been somewhat dishonest about it.

So there you have it. One (wait a minute, it turned into two) of the reasons I feel oxmoronic is now out in the public. So what am I going to do about it? Well, I figure right now that I should develop some short- and long-term goals that I would like to accomplish regarding this problem:

Short-Term:
1) Make a conscious effort to spend less than I earn
2) Post more on debt elimination and personal finance that will increase my networth

Long-Term:
1) Pay down all of my credit card debt by December 2006
2) Post the % of my debt paid and provide a monthly update to my networth

Carnival of Personal Finance #18

2005-10-20T09:02:00.000-07:00

The 18th Carnival of Personal Finance was posted on Monday over at My Money Blog. Take a look when you have a moment, as there are some good posts. Due to my absence, I wasn't able to submit a post for this week's Carnival.

Update - Out Sick

2005-10-20T08:43:00.000-07:00

Just to let my readers know, I'm fine, but a 3 day weekend followed by a severe cold caused me to be unable to post. I'm still recovering from the cold but should be able to resume my normal posting at Financial Fruition. Thanks for your understanding!

Personal Finance Software or Excel Spreadsheets?

2005-10-12T06:35:00.000-07:00

There is a good Q and A regarding financial software over at the Chicago Tribune website. Unfortunately there is a registration required, so let me piece this together for you...

A reader asked the following, "You're always recommending that people track their expenses, but I never seem to be able to keep at it. Is there any software that would make this process less tedious and cumbersome?"

The author, Humberto Cruz, answered the software part of the question by mentioning Quicken and MS Money. Well, of course, those are the leading personal finance software titles. Let me add however, for those Mac users out there, that MoneyDance is an excellent program that is designed for the Mac, unlike Quicken and Money which are converted from the PC platform to Mac.

Mr. Cruz, then stresses the importance of tracking your expenses, stating "before you rush out to buy either, you need to understand what will be required of you, and why." He tells the reader that recording information and tracking your expenses is made easier via Personal Finance software, but you still have to use the software and input your cash purchases and do it regularly. Buying the software can aid in tracking expenses, however you still have to sit at the computer and put some time into it. I couldn't agree more, it's tough work, but software can help.

The most interesting part of the article to me was the last two paragraphs:

Finally, rather than dedicated personal finance programs, the computer-savvy consumer might consider using the versatile Microsoft Excel spreadsheet program, which is often included in the software pre-loaded in many computers when you buy them.

For this group, I recommend the book "Manage Your Money and Investments with Microsoft Excel," by Peter Aitken, which includes a CD-ROM containing all templates covered in the book.

I have discussed before how I like to use Excel spreadsheets for budgeting and expenses. However, I have never heard of this book. Has anyone else used this book to set-up your personal finances in Excel? Do you have any other favorite books on Excel that could be used for Personal Finance purposes?

Carnival of Personal Finance #17

2005-10-10T06:00:00.000-07:00

This week's Carnival of Personal Finance is up at Hello, Dollar!. Check it out when you have a chance.

Honda May Up Cost of Pet Ownership

2005-10-05T10:40:00.000-07:00

I do not currently have a pet. My building will not allow dogs and I am allergic to cats. However, in the future I plan to own a larger dog (yet to be decided between a Lab or a German Shepard). Back in June, Free Money Finance found an article that referred to the monthly cost of pets. He put some straightline calculations together:

Let's put a few numbers to this. If a pet costs $400 per month and lives for 10 years, that's $48,000 (not to mention what you could have earned on that money if you had invested it). If the pet lives for 15 years, that's $72,000!!! Even if the pet only costs $200 per month, that adds up to $36,000 over 15 years. Yikes!!!

These were not even future value calculations. If you instead took $400 and put it into an investment vehicle that earned only 6% over 10 years, you would have $65,551.74!! Up that to 8% expected return and you are over $73,000.

According to an article at the Denver Post, Honda is debuting a pet friendly vehicle at the Tokyo auto show later this month. They are trying to promote a safer car for dogs (and other pets) as their research shows that a major danger for pets hitching a ride in the car with you is that they may get ejected from the car during a crash. There is no figure on how much this vehicle may cost or if it would ever reach the United States. However, it would no doubt impact the cost of pet ownership for those that would trade their vehicle for this one if and when it is released. But, if you were already planning to buy a car at this time it would not necessarily cost you extra, but could sway your decision to buy this new vehicle.

Monte Carlo Simulations: An Overview

2005-10-04T07:09:00.000-07:00

I have pieced together what I think is an overview of what to know about a Monte Carlo simulation. These have become quite a popular tool for financial planners to gauge how well your portfolio and your financial decisions will do over time. One of the best things about the Monte Carlo Simulation is that it does not take the market average and assume, let's say, an 8% return over time. Instead, it tests your portfolio and financial decisions against a 1,000 or more hypothetical returns on what the market has historically done. Therefore, in the simulation you may see years of downturn in your return with the upside prevalent as well. This helps an investor to stay focused and understand that the market is not always going up, but you can plan your decisions and portfolio so that over the long run your returns will be just fine.

To be more in depth, most people when they estimate what their portfolio will do over time build an Excel spreadsheet to project the results and make assumptions about how each part of the portfolio will perform.

For example, let's say there is $100,000 to invest and the assumption that the asset classes will produce the following annualized returns:

Stocks 9%
Bonds 5%
Cash Equivalents 2%

Now let's assume that the allocation is:

Stocks 70%
Bonds 20%
Cash Equivalents 10%

If all the investments follow exactly this pattern for ten years, the portfolio would then be worth $213,722, for an annualized return of 7.89%.

This sounds realistic. But for in-depth planning purposes is really only one of a wide range of possibilities. In real life, stocks often return much more or much less than 9% a year. Bonds and cash equivalents also fluctuate, however they are usually less dramatic.

So there could be wide variations around this deceptively specific estimate. But how wide? How good, or bad, could it reasonably get?

Imagine a bad, but by no means impossible, scenario: over those ten years, stocks lose 5% a year, bonds lose 2% a year, and cash equivalents are flat. Then the $100,000 stake would be down to $68,253, for an annualized return of -3.75%.

In a good, but not extreme scenario, stocks gain 12% a year, bonds gain 6% a year, and cash equivalents gain 3% a year. The $100,000 would have grown to $266,665, for an annualized 10.31%.

Reality will probably be somewhere in between, but this is not a given. And how can you quantify the chance that your stake will reach a point that will get you to your investment goals?

A Monte Carlo simulation provides the answer. This estimation technique allows for the wide range of possible percentage changes in each asset class—and, therefore, the even wider range of possible portfolio values over your time horizon. Using thousands of scenarios, Monte Carlo simulation charts the relative likelihood of portfolio values. This enables a person to estimate the probability of reaching their goals. It should not be the only piece of financial planning, but is an important part of the overall picture.

Carnival of Personal Finance #16

2005-10-03T10:55:00.000-07:00

This week's Carnival of Personal Finance is up at Canadian Capitalist. Check it out when you have a chance.

Wedding Gifts

2005-09-30T15:05:00.000-07:00

I have wedding for a friend to go to tomorrow. My girlfriend and I are both going. Usually I spend around $40-$50 on a gift when I go solo. However, since we are both going I plan on spending around $100. Seeing as I am the last minute type, tomorrow we are going to purchase the gift. I haven't really thought about what to get this couple. I have known both of them for quite awhile, but they are one of those couple that have everything.

One thing I won't do is purchase something just because it is on their wedding gift registry. In fact, I don't even know what stores they are registered at. I've always been a person to put thought into a gift of what someone would really want. For instance, the last couple I purchased a gift for I ended up purchasing a gift card at the apple store because I knew they were going to buy a computer soon and also knew that they were most likely going to purchase a Mac. Even though I didn't know where they were going to purchase it, I knew that some money at this store would make them pretty happy and I figured they could always buy some accessory or software when they do buy the computer. I later found out that the bride and groom loved their gift!

So what to get them? I better figure this out soon!

What do you spend on a wedding gift? Am I too cheap?

What I Want for the Holidays...Yeah Right!

2005-09-29T06:07:00.000-07:00

It's here. The Neiman Marcus Christmas book is out for 2005! What a special Christmas it could be if someone would buy me a private concert by Elton John for $1.5 million dollars! It would be for a good cause to raise money for Sir Elton John's AIDS Foundation, and I would get to keep a signed, special edition Piano as well. Please hurry there is only one concert being sold, buy it for me now!

Give me a break. Whoever buys this, should get to have Sir Elton John be their butler for a year. Heck, I would be someone's butler for $1.5 million. Any takers?

More Bad News About Credit Cards

2005-09-29T04:39:00.000-07:00

According to an AP article, the percentage of credit cards that are 30 or more days past due climbed to an all-time high of 4.81 percent in the April-to-June period. Analysts mostly blamed high prices for gasoline and other energy products, but said savings and higher borrowing costs also played a role.

More great news from the article:

"The personal savings rate dipped to a record low of negative 0.6 percent in July. The negative percentage means that people did not have enough left over after paying their taxes to cover all of their spending in July. As a result, they dipped into savings to cover the shortfall. When people have less money available to pay for energy costs or emergencies such as a big car repair, many resort to credit."

Besides education, how can we make better spenders so that these numbers start going in opposite directions?

Mad Money Challenge - Stock Picking Game

2005-09-26T14:48:00.000-07:00

Here's something interesting from the Cramer Camp, a Mad Money Challenge fictional stock picking game to take place from October to December. I've got to admit his marketing "squad" is pretty good. Imagine all the data of the show's fans they will have after all of them sign up for this game. Can you say "opt-out"?

I'm not reversing what I've already said about Jim and his show, however these games can be fun for the passive and boring long-term investor. I had to play one of these in an Investing class in college. While I didn't win the highest return in the 3 months during the course. I can say that I was up over 200%, when I went back five years later and looked up the portfolio on Yahoo! Finance that I created to track my investments (considering only that I purchased 1 share of each stock). I should go back and check to see where I would be today!

UPDATE 10/05/05: The Mad Money Challenge starts tomorrow!!

Wealthy Blogger Disappears?

2005-09-26T11:14:00.000-07:00

There was some news about a month ago about the team who wrote for Wealthy Blogger and their decision to sell the blog. The sale of Wealthy Blogger took place at the Sitepoint forums. The original announcement was made by one of the bloggers at his site. This was very big news (it sold for $2000) and was the talk over part of the blogosphere.

For about 3 weeks the site was never updated and many of the comment sections were filled with spam. I decided to stop by today and check it out and all I got to see was a nice teal screen that said "There is no website configured at this address". One of the great tools they had on this site was a financial blog aggregator which seems to be history now!!!

What a waste of money for the buyer...

UPDATE: There is a new screen mentioning that WP is not installed. I assume that's Word Press and it's not installed on their new host. Anyways, I still think this guy is losing a lot by buying a blog and having it disappear for over a month. Not very prudent if you ask me.

Carnival of Personal Finance #15

2005-09-26T06:13:00.000-07:00

This week's Carnival of Personal Finance is up at Free Money Finance

Check out all the good submissions, including mine which is first (early bird, gets the worm!).

Thanks for hosting this week FMF!

Good Savers, Bad Investment Choices

2005-09-24T18:03:00.000-07:00

Found an article titled, Living on the Edge over at Money Magazine online. While this couple have become very good savers, more than 70% of their money is in high-risk emerging market ETFs and their only child's college funds. are in one volatile ETF.

This goes to show you that one can have all the discipline to save, but if you aren't investing it properly you could be in real serious trouble. Asset Allocation is sooo important!

Oooh....Look at the Pretty Colors

2005-09-21T10:56:00.000-07:00

Gotta love pretty things that help explain something important!! Below is a picture of the Callan Period Table of Investment Returns:
Download the Callan Period Table of Investment Returns (85-04) here

This chart clearly shows that the what asset class leads in percentage return one year, is not necessarily going to lead the market the next. It supports the academic financial publications that say 90-92% of a portfolios returns are generated by being diversified in different asset classes. So if you own a group of asset classes you are protecting yourself and mitigating downside risk of a particular asset class.

U2 is the Bomb!

2005-09-21T10:20:00.000-07:00

I had the opportunity to see one of the best bands of my time. Yep, that's right I went to the U2 concert last night (thanks Sis!)

I have liked U2's music for quite awhile now and this was the first time I was able to see them in concert. Usually, I am a cheapo when it comes to concerts. I would rather not pay high ticket prices to go see a band, usually no matter who it is. However, these were at face value and in my opinion U2 ranks easily in the top 3 bands of my time. So what did this splurge cost me:

$108.00 for a pair of tix
$13 for parking
$6 for a six pack of beer to tailgate (split with girlfriend...I didn't want to pay the rip-off price inside too many times!)
$28 for 4 beers (yes, you read that right, $7.00 a piece, of which I had two)
$35 for U2 t-shirt (come on it was my first U2 concert!)
-----
$190 total for two.....OUCH!

All in all this hurt the wallet, but it was one of those great experiences in life. We even had cool people sitting next to us...Andrew W. and Liz were having a blast as well, especially since Andrew got to hear the two main songs he wanted to hear (Sunday Bloody Sunday and One)!

So who goes to a plethora of concerts and who is a lot like me and doesn't? Speak yo mind!

Why Take a Cab?

2005-09-20T15:24:00.000-07:00

For those of you folks who don't live in a major metropolitian city, either be thankful and laugh at us or don't read on...

My girlfriend and I go out about once a week. Not that we go out to expensive restaurants all of the time, but we may walk to a bookstore, the lake, a street festival, or a restaurant for dinner. This is great when the location of these destinations are a six block walk or under and my girlfriend does not have to get dressed up (like she would if going out to dinner or out for a couple of drinks with friends).

However, when she gets dressed up she always requests to take a cab from where we live...even if it is a 4 block walk. It happened this past weekend and of course, I said "what the heck, can't you buy shoes that look good when you are dressed up and are also COMFORTABLE to walk in (and stand in!)." Then she pouted at me, explaining that once in awhile she wants to "dress to impress" and go out, which includes wearing high heels. She insisted we take a cab and I wanted to walk 5 blocks to the El (elevated train, read: subway). Parking was not an option. Taking a cab would have run us about $10 bucks. However, if we walked to the El it would have cost us $3.50!!! So we negotiated (I would like to say I won, but she wouldn't let me get away with that!), and took a bus that stops right outside my building for 5 blocks and then got on the El. The additional jaunt on the bus is considered a transfer so it only added 50 cents, which brought our one way traveling cost to $4.

So we saved roughly $14, by taking the bus and an El to the restaurant and then reversing it on the way home. This doesn't seem to be an abnormal choice either, as there were a lot of people dressed up to go out on the El. Imagine the savings if 2 times a month we went to places that we could not walk to. Oh wait, I don't have to imagine...I just have to open the calculator and punch in the numbers.....$336.

By the way, we went to Rock Bottom Brewery, they have quite a few locations throughout the nation, and their Rocktoberfest special brew (brewed onsite) was absolutely splendid! The food is very good for the price as well. We ended up meeting a group for 8 and had a great time.

Crappy TV -- Jim Cramer's Mad Money -- Let's Turn It OFF!

2005-09-19T10:14:00.000-07:00

One thing wrong with our consumer driven society is the crap on TV, including Jim Cramer's Mad Money and the Keeping up with the Jones' shows like, The Fabulous life of...on VH1.

Where I'm coming from
Our consumer driven society's current saving level is the lowest since the government began recording this number in 1959, while the national consumer credit outstanding revolving (credit card) debt is up to $806 billion as of June 2005. It is absolutely sickening to see facts such as these and then consider the consumer driven garbage that is on television. What about shows that could teach us the value of the basics of personal finance, not the buy/sell opinion of a TV personality?

Is it TV in general or just shows like this?
I'm sure we can all come up with TV shows that are not financially prudent to watch. I think we also all know that advertisements are the biggest offender! If instead of watching TV and advertisements, we spent our time reading books on our hobbies, personal finance, or even great literary works I think our world would be better off. With regards to TV, for now I'd like to focus on Mad Money, Jim Cramer and the ill effects of active trading and preaching to to a world-wide audience.

Me vs. Jim Cramer
Perhaps, Jim Cramer ran a hedge fund and has other "Wall Street" experience, but I really think it's bad TV for the general public to watch TV shows like Mad Money. According to what I've found, Cramer worked at Goldman Sachs and then formed Cramer & Co., a hedge fund in 1987. "After a stellar 2000, Mr. Cramer's fund finished up the year +36% vs. -11% for the S&P and -6% for the Dow Industries. Mr. Cramer decided it was time to get out and he now devotes all his attention to TheStreet.com" and his TV show on CNBC, Mad Money. Yes, he also did graduate Harvard and Harvard Law School. This brings me to some questions I would like to answer:

Does this validate giving stock advice to millions (sorry couldn't find a statistic that shows the audience size of Mad Money) with regards to what he believes and what is not necessarily prudent for that investors personal situation? Clearly NO, but Cramer isn't the only offender, think about the broad brush strokes of folks like Dave Ramsey. Ramsey fans don't murder me, I am merely stating that his responses to radio shows hardly dig deep enough to give prudent financial advice for that particular caller's financial situation. Ramsey does do the world some good by preaching to get rid of debt and spend less than you earn, so don't burn me at the stake. Heck, he even advocates turning off the TV and reading a book, which I definitely agree with. What I am merely pointing out is that Jim Cramer, nor Dave Ramsey, know the exact financial situation of the caller and shouldn't be giving some of the advice they give. Yes, Cramer says he is just giving advice to those that have side money and want to dabble in the market, but does he know if that person's portfolio is already overweighted in the sector that he is recommending a buy of a certain stock in that same sector?

What's Jim's portfolio record? If you take a gander over at Booyah Boy Audit one can see an unbiased record of Jim Cramer's Performance Scoreboard for the last month and a half. Has he beat the market?...yes (Cramer 2.11% vs. S&P500 -0.47%). Does he have a 70+ year record of annualized rates of return of 12.74% for Small Stocks (Small Cap) or 10.43% for Large Stocks (S&P 500)? NO

Should the typical investor be in and out of the market to "Back up the truck and buy" or "Sell, Sell, Sell" as Cramer's soundbites suggest? Let's rack up another NO for this one! One thing I don't think is reflected in Jim's return at the above link, is the commission charges for executed trades, or the short term capital gains one would have to incur on a winning pick. Yes, you would have to pay to buy the stock, then pay to sell the stock, and then pay the government if you made money on the stock. What a great arrangement, I wonder why Jim Cramer isn't recommending buying the stock of On-line brokerage firms who are making the money off of Jim's advice.

Is Jim Cramer doing any good for the general public? Hmm....I'll give this a MAYBE. The reason for the maybe is that while he is giving specific recommendations that I think would be crazy to act on alone, he does provide market insights and sometimes backs up his recommendations with an explanation. However, this should only be the beginning of one's research into investments in general or a specific investment (if they have determined that they want to dabble in individual stocks, which I don't agree with in the first place). Do you think a lot of viewers are doing anymore due diligence with regards to what Cramer is saying...or seeking the individual advice of an investment professional? I don't.

So, what is my point?
My basic point is this. America turn off your television, pick up a book (or read blogs like this one!), and learn. Is Jim Cramer the only offender of bad TV? No, but it was fun to highlight a show and drill down why it's bad for America to watch it.

On another note, if you would like to know my opinion on investing (not very valued, I know) here is the very, very simple version:

Spend less than you earn and pay off your debt if you have any.
If you don't have any debt, invest the remainder.
For short term goals, liquidity is your friend.
For long term goals such as retirement, buy passively managed, low fee ETFs or Mutual Funds.
Allocate/Diversify these funds in different asset classes according to your risk tolerance and time constraint for being in the market. It's been proven that that your Asset Allocation Policy provides 91.5% of a portfolio's return (Financial Analyst Journal, May-June 1991). Also, according to the William F. Sharpe (Stanford Univ.) Study of 1990, 90.9% of a portfolio's return is based on the style selection (read Asset Class), compared to only 9.1% coming from the security selection.
Rebalance your portfolio once a year.

Sound off and let me know what you think!

PS - If anyone wants to sign up for ActionAlerts PLUS by Jim Cramer, it's $349.95 a year to get emails of what and when he trades. Sorry, I don't endorse it so I won't provide a link to it!!!

Carnival of Personal Finance #14

2005-09-19T06:16:00.000-07:00

This week's Carnival of Personal Finance is up. There are some good articles over there, including mine on Weight Loss and Gym Memberships. Check it out when you have a chance and thanks for hosting Optimized Living.

New Masthead for Financial Fruition - What City Skyline is it?

2005-09-16T10:23:00.000-07:00

Being the creative person I am...I took about 10 minutes to crop one of the photos I have taken of the city skyline that I live in and made a quick logo (if that's what you'd like to call it). So what city skyline is this, or more simply put, what city do I live in? C'mon take a guess!

Apple, Macs, and Ipods

2005-09-15T14:43:00.000-07:00

So let's learn a little bit more about who I am...I AM AN APPLE FREAK! There, I said it.

It all started when I was a boy and my parents would not buy me Nintendo. Instead, at the age of 8, I was given an Apple IIC by my parents. Within 2 weeks I wrote a program in BASIC that asked for three different passwords when you booted up, or it would not run. My Dad was really happy with that. As time has gone on, my Dad purchased some Macs including a Centris 650, as a matter of fact he still has his Performa that he still uses on occasion.

Once again during one of my ramblings, I must come back to the question....What does this have to do with Personal Finance?

Well, actually quite a bit. With out my exposure and love of Apple and Macs, I don't think I would be in the industry I am in. As a creative marketing person I am spending most of my day on a Mac using Adobe Illustrator, Adobe Photoshop, Adobe InDesign, and QuarkXPress. However, in my job position, I still do some analytical marketing. Not only do I get to "play" on the creative side all day, but it is also in another area of great interest to me, Investments and Financial Planning.

As a relatively intuitive person I run our Mac server and maintain about 10 Macs. For personal use I have a Power Mac at my house and use a Gen 3 iPod along with an iPod shuffle for my music needs. Never have any one of these pieces broken or become a hassle in any way. The only problem is keeping up with the latest toys Apple comes out with. It hurts the wallet a little bit.

Anyways, my girlfriend just jumped on the bandwagon and bought a iPod Nano the other day. This is a great little piece of iPodware that features a 2gb flash drive for memory with a very nice color screen like the one on the iPod Photo series. Anyways, my only complaint is that it is so small. It really doesn't fit in the palm of my hand very nicely which makes use the buttons kind of hard. Oh well, though...it isn't mine and my girlfriend just loves the thing!!

So what latest gadgetry do you spend money on?

How Financial Planners Can Help

2005-09-14T06:51:00.000-07:00

In Jonathan Clements most recent WSJ Getting Going column titled "Why Worry? Well, Here Are Four Reasons" (sorry, no link as it's not free any more!) he discusses four things you should (or could) worry about regarding your finances. The first 3 are:

1) Bad Ideas - assuming that the market will make 10% or 12% in your planning among other things
2) Monthly Mentality - thinking in terms of monthly payments vs. monthly cash flow with cars, dvd rentals, etc.
3) Penalty Play - not planning and needing to withdraw from your IRA or other retirement account and having to borrow from it and othe penalties

His last one was a very complete thought titled, Debtor's Prison that stated:

Suppose you own a $250,000 house and you have $200,000 stashed in stocks and bonds. You also, however, have a $200,000 mortgage and $30,000 in auto loans and credit-card debt.

Add it up, and you have $450,000 in total assets and $230,000 in total debts, giving you a net worth of $220,000. Doesn't seem particularly risky? Usually, it wouldn't be.

But imagine you lost your job during a weak housing market. After some scrambling, you land a new job, but it is on the other side of the country. That means you have to sell your current home, relocate your family and buy another home, while continuing to cover living expenses and service debts.

With any luck, thanks to your new job, you won't have any problem qualifying for another mortgage. But you still have to come up with a down payment for the new house.

That may not be easy. Given the housing market's weakness and your need to sell quickly, you might end up unloading your current home for $225,000. After forking over a 6% real-estate commission and paying off your $200,000 mortgage, you would net just $11,500.

Fortunately, as you cobble together a down payment for the new house, you can draw on your $200,000 in stocks and bonds. Unfortunately, much of this money is in retirement accounts, so tapping your portfolio could mean paying income taxes and tax penalties.

One way or another, you would probably muddle through, somehow managing to relocate, keep your creditors at bay and buy a new home. Still, if all this seems a little precarious, there's a reason: It is.

My goal here isn't to dissuade you from ever taking on debt or ever funding a retirement account. But bad things happen, so you need to give yourself some financial breathing room. That means limiting your debts, holding down monthly financial obligations and having some savings in a regular taxable account.

But most of all, you need to think ahead. What if you don't have steady employment from now until retirement? What if real estate doesn't always appreciate? What if stocks don't return 10% a year? You need to build such possibilities into your financial plan -- before something goes wrong and it's way too late for planning.

Some bloggers and blog readers have been bashing financial planners recently. However, there are many complex financial decisions that I think most consumers would need the help of a true Financial Planner, one that is trustworthy and aligned with the client's goals (and I'm sorry to say, some (or is that most?) aren't!). We can not see into the future, so I think most people need help to plan for situations like the above and be able to make the right financial decisions with the help of a Financial Planner. Are you ready if some situation like this hit you square in the face?

The High Cost of Smoking

2005-09-13T04:21:00.000-07:00

If you are a regular reader here, then you know I'm currently losing the battle of trying to quit smoking (1, 2, 3). This is one of the hardest things I've ever tried to do. I am getting on the healthy bandwagon by going on a diet and joining a gym, however I really need to quit smoking!! Previously, I've talked about waiting till a group of weddings and the holidays are over to quit. It's advice I received from some who had quit smoking. However, I am now asking myself, "Why am I putting it off?"

Well, I found a great article over at MSN's Moneycentral titled The high cost of smoking. More fuel to the quitting fire!!

I've already figured out that the future value (FV) of my smoking habit if put away for 30 years at 8% a year is $194,393.99! However, according the article rather than an average of $5 a pack, "researchers at Duke University found that the total cost of smoking -- the cigarettes, lost earnings, impact on insurance mortality, even the impact of secondhand smoke -- runs about $40 per pack for the average 24-year-old." Dare I calculate that FV!! Other financial snippets highlighted in the article:

1) Decreased resale value of your vehicle due to smoke smell, ashes all over, and burn marks in the fabric.
2) Increase cost to get your house "saleable", citing that most houses with smokers need to at least be re-painted if not new carpet installed.
3) Higher cost of life insurance and homeowner's insurance compared to non-smoker.
4) Higher dry cleaning bills because clothes stink.
5) "Smokers due to higher mortality rates, obtained lower lifetime benefits compared to never smokers, even after accounting for their smoking-related lower lifetime contributions."
6) Mints for bad breat and teeth whitening for yellow teeth add up as well.

Where to go from here? I wish smoking was as easy to quit as it is to pick out a shirt in the morning for work! I will win! I will keep you abreast of my continual struggle!!

Weight Loss and Gym Memberships

2005-09-12T06:39:00.000-07:00

Well the time has come to join a gym. Being an athletic person in high school and college, my weight since joining the "real world" has fluctuated way too much. A couple of years ago I did the Atkins diet, and lost 40lbs. only to gain 40 of it back after I went off of it. After a year gaining that weight back I decided to go try a new diet. This was overall healthy system of eating called The Abs Diet. The Abs Diet is a diet designed by David Zinczenko, editor-in-chief of Men's Health Magazine. In two months I lost about 15 pounds and felt good....then it all went down from there. During one of my biggest projects that I complete every year, my boss went into the hospital and had surgery. Needless to say, the entire project fell on me. I was pulling 70-80 hour work weeks (norm is 50-60) and began eating fast food and junk because I felt that was all I had time for. Once the project was complete, I never got back on track.

So now I am overweight and want to do something about it! I am going to go back on The Abs Diet and my girlfriend is going to try it for the first time. This should help immensely because having two people doing it at the same time keeps you both in-line with the goals of the diet. Soooo...the big question is...why join a gym and what does this have to do with Personal Finance?

My girlfriend and I would like to join a gym to get some fitness activity going in our lives. We realize that you need some cardiovascular excersice, combined with some weight lifting to properly tone your body and turn fat into muscle. In relation to personal finance, I have made the decision that this is so important that I will be diverting a small monthly fee to working out, instead of using that money to pay down debt. Hey, Sound Mind, Sound Body...and let's add Sound Money!

In my area, there are only two gyms within walking distance. One is a medium sized chain of gyms that are very, very nice. The other is a small, one location gym that has become quite popular. The costs compared like this:

For a 12-month contract (not a loan like at Bally's) for a couple's gym membership
Small Gym: $125 enrollment fee, $105 monthly couple membership fee.
Medium Chain Gym: $200 enrollment fee, $129 monthly couple membership fee.

The Medium Chain Gym, which is 3 stories tall and much nicer than the small gym, includes free admission to their classes (yoga, pilates, spinning, etc.), and a bunch of savings because of the building I live in. This included cutting the enrollment fee by over half, first two months free, and a free personal trainer session to put you on to a fitness regiment.

The first two months free basically removed the enrollment fee, but was it worth it to each pay $12 more a month to join the nicer gym? Well, seeing as winter will be soon approaching (think 30 degree fahrenheit days) and the small gym is 8 blocks away and the nice medium chain gym is only 2 blocks away, we chose the Medium Chain gym. What does this look like from a personal finance angle:

Total Cost for 1 year at Small Gym: $1,385
Total Cost for 1 year at Medium Chain Gym: $1,490

That's about $100 more per year, which would be about $50 more each for my girlfriend and I...I can handle that for the closer...and nicer gym.

Special Note: If you don't have a spouse or partner, most gyms will let you sign up for a couples membership with a friend or roommate and this will save you a lot of money in the monthly membership fee!!

Do you have a gym membership? Approximately how much do you pay a month? Would you recommend joining a gym to others?

Carnival of Personal Finance #13

2005-09-12T05:58:00.000-07:00

This week's Carnival of Personal Finance #13 is up at Smart Money Daily. My piece on Budgeting Money is in it this week. Take a look at the best of personal finance for last week when you get a chance.

Budgeting Money

2005-09-09T08:03:00.000-07:00

Many people use Money or Quicken to track their personal finances. I tried Money a couple of years ago but had trouble getting it to do exactly what I wanted it to do. Being a hands on person, I really don't mind using Excel to set up a budget. Therefore, I wanted to find a free budget worksheet so that I didn't have to create an entire budget from scratch (think...decrease opportunity cost of time) and could modify it as I saw fit.

Below is a screen shot of the budget worksheet I use:

You probably can't read any of it...but it is the most comprehensive free budget worksheet I have found. Under the different sections are expenses I did not even think about, which definitely helps to identify the little things that I can now control because I see the outflow. An example of this is under the Personal category, which includes clothing, gifts, salon/barber, books, and music. I really didn't track these expenses at the time, but now they are relatively under control.

Another way this budget worksheet helps me to realize is how much monthly expenses add up over the course of the year. The far right hand column is a running total of each budgeted expense for the year. If you calculate the Future Value of some of the expenses you could cut down, you really see how much these items are costing your future savings and have more motivation to par things down or cut them out completely.

As of now, I really don't use the spreadsheet anymore, except for annual personal finance planning or to allocate unexpected money, such as a bonus (no I don't calculate bonuses into my annual budget because I may or may not get them, even though it is usually the former). By using this sheet for 2 years, I am now able to mentally calculate expenses for the month. If I think I am getting a little out of control, I use envelopes the next month to make sure my money is being spent the way I want it to.

If you like Quicken or Money, great! If you use an Excel spreadsheet, great! If you don't use any system, please try to get on one so that all of your money is allocated and put to use before you start spending it and wonder where it went. For those of you who want a copy of the free budget worksheet, I linked to it fifteen words before the period at the end of this sentence.

The Cost of Boating

2005-09-08T21:13:00.000-07:00

A friend of mine who,, I would consider a semi-pro fisherman put $100 worth of gas in his boat this past weekend. It ended up filling half of the 60 gallon tank. Seeing as gas prices are so high, he pondered how much gas he has used since he purchased his boat. Fortunately for him, the gauges on his boat monitor everything in his engine and this information was readily available.

In the past 2 years he has used just over 1200 gallons of gas. At a conservative gas price of $2.50, that's over $3,000.00. He didn't even know that it was that much. All I can say is that I am glad I don't own a boat!

Best Financial Advice

2005-09-07T11:26:00.000-07:00

My submission on the Best Financial Advice I have received appeared over on FreeMoneyFinance's site. Thanks goes to FMF for posting it!!

My grandfather saved quite of bit of money over time with the 3 points I made in that submission. However, since he lived to the ripe old age of 94, he used a lot of his savings on expenses such as 24 hour in-home care and life's necessities over the last 5-7 years of his life. Still, his four children should be very thankful for the mini-legacies he left each of them.

Lessons Learned in Saving Gas

2005-09-06T10:35:00.000-07:00

While we have all seen articles and blog topics on rising gas prices and money saving tips for gas, I have my own two tips that haven't appeared anywhere yet (or so I've seen).

1) If travelling, drive at night. Where I am located we have humid summer/fall days that range from the low 80s to mid 90s. If you are going on a trip, drive at night. The scenery doesn't really matter, and in my climate the temp drops when the sun goes down to about 70 degrees, allowing you turn on just the fan in the car to cool you down, rather than turning the air on.
2) I do a lot of stop and go traffic and experimented with my driving style recently. I get the best mileage if I am very conscious of keeping my RPMs below 2,000 while accelerating from a light. Granted, people kind of run up your bumper, but they soon figure out that you aren't Mario Andretti and back off.

Carnival of Personal Finance #12

2005-09-06T08:12:00.000-07:00

This week's Carnival of Personal Finance #12 is up at Savvy Saver's blog. My piece on The cost of vision made it in this week. Take a look when you get a chance.

Wealth Management

2005-09-02T13:43:00.000-07:00

I have heard the term wealth management used many times. But what exactly is it and why is it used so much? The definition from About.com of Wealth Management is:

Wealth management services are provided by banks, professional trust companies, and brokerages. For those with sizeable assets [usually over $500,000], professional wealth management can help you plan your estate or invest your assets based on personal criteria and financial goals.

This definition is very broad and lacks the detail of helping the wealthy with the comprehensive financial planning needs of investment management, risk management, liability management, estate preservation, as well as overall assistance with all financial decisions encompassing their life including important business decisions, for those that own their own companies.

I think the word "Wealth Management" has become marketing slogan. Most comprehensive Financial Planning tools have been made available to general consumers and somebody tried to come up with a name to try and hype their services to High Net Worth Individuals.

When to Look for Another Job

2005-08-31T10:08:00.000-07:00

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

2005-08-31T06:55:00.000-07:00

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!

2005-08-30T12:02:00.000-07:00

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

2005-08-29T15:14:00.000-07:00

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

2005-08-29T04:21:00.000-07:00

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

2005-08-28T17:36:00.000-07:00

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

2005-08-26T09:08:00.000-07:00

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

2005-08-25T14:35:00.000-07:00

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

2005-08-24T13:24:00.000-07:00

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

2005-08-24T11:39:00.000-07:00

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

2005-08-23T14:37:00.000-07:00

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

2005-08-23T12:22:00.000-07:00

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

2005-08-22T12:52:00.000-07:00

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

2005-08-22T06:15:00.000-07:00

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

2005-08-19T13:06:00.000-07:00

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?

2005-08-18T10:32:00.000-07:00

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

2005-08-17T06:12:00.000-07:00

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

2005-08-16T10:13:00.000-07:00

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

2005-08-10T09:04:00.000-07:00

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

2005-08-09T16:31:00.000-07:00

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

2005-08-02T18:12:00.000-07:00

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--

Monetary Actuality

2005-07-25T20:17:00.000-07:00

The Financial Fruition Blog is alive!!