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Archive for April, 2009

Breaktime, 28APR09

April 28th, 2009 at 05:56 pm

This isn't a huge deal or anything, but often times, I will run across non-personal finance stuff that I think is worth sharing. However, since it shouldn't cost you anything extra, perhaps it still adheres to the spirit of SavingAdvice here? Good clean fun that will hopefully make you smile. That's goal. That's Breaktime.

Big Grin First up, I love this music video. It may seem unremarkable at first, but stick with it, and you'll see what I mean.

Big Grin I finally figured out who stole my credit card and bought pizza with it.

Big Grin A clever use of flickr indeed.

AC and silk questions

April 26th, 2009 at 09:00 pm

First, and biggest issue. I've always had problems with this house's central AC. Basically, it doesn't work, other than to sap out a lot of money in electric bill while trying to pretend to work.

The summer heat just arrived, and as I sit here, practically naked (try not to gag Big Grin) with a fan running and yet still sweating, I am seriously considering what to do next.

First options is to get an HVAC guy out and inspect my unit. How much does it cost for someone to come look at and repair the central AC? Is it even worth it since I don't even use most of the house?

The second option is, and this is the one I am leaning towards, does anyone have any experience with "portable" air conditioners? It's basically a window AC, except it sits in the room with a hose running out to the window. The Homeowner's association doesn't allow window AC, but they're willing to let something like a portable AC squeak by because it doesn't stick out.

The only problem is the upfront cost. The unit I am realistically looking at is $500. There are cheaper, but I've read scathing reviews about how poorly those ones are built, and that they will not last.

The other thing is my electric bill. In the summer months, they are literally FIVE TIMES higher than the winter months. (Well, to be exact, my winter electric bill is around $20-30, and my summer electric bill is around $70 to $120, but normally hits $100.) Is that normal for you guys? If not, it could translate to as much as $300 I am losing due to the defunct central AC. It would also well-justify the cost of a portable unit....

Oh, and before you mention it, yes, I've done all the self-repair tips I can find online. Still no dice. I don't know, what do you think?

Since the first question is so long, I'll keep the second one super short. Basically, I've got olive oil stain on a silk shirt. Although it's considered blasphemous, I tried to wash it out with the washing machine, but still no luck. Am I stuck having to dry clean it? Will that actually get the stain out? Is it expensive to do that, or should I just never wear silk again?

Networth, April 2009

April 24th, 2009 at 06:44 am

Since today is the last paycheck of the month, I decided to go ahead and update my net worth early.

This month has been an especially good month for me, thanks largely to Mr. Market. But I did help a bit too, trying to be frugal. Big Grin

Well, actually, I've been rather spendy recently, snapping up the last of the "recession deals" on my list. It really is a shame that I'm neither in the market for, nor can I currently afford a house right now. This year seems like a particularly good year to buy.

But most of my days are small struggles with my budget, trying to keep the costs down as much as I can while trying not to get too discouraged because, sometimes, it doesn't seem like it's going anywhere.

That's why this month's net worth is particularly encouraging. It's motivating me to want to go even faster.... I WANNA GO FAST! Big Grin

The blue light special

April 20th, 2009 at 07:02 am

Stock-related entry. Read at your own risk. Big Grin

I was at a K-mart (or Kmart) over the weekend, and as I strolled across the remnants of a once mighty discount business that could have stood toe-to-toe with Wal-mart, I wondered just what happened to them?

Although wikipedia's information should always be taken with a grain of salt, I nevertheless found it quite informative. Gleaned from wiki's entry, there are several important insights as to why the business have failed:

"In the late 1980s and into the 1990s, the corporate office shifted much of its focus from the Kmart stores to other companies it had acquired or created...."

So, right off the bat, K-mart appears to be doomed the moment management lost interest in this business....

"Unlike its competitors Wal-Mart and Target, it had failed to invest in computer technology to manage its supply chain."

Perhaps, due to the above reason, it did not evolve to become as efficient its competitors.

"Furthermore, Kmart maintained a high dividend, which reduced the amount of money available for improving its stores."

I couldn't look up on what exactly was the historical percentage, but here's a classic example of how sustained high dividend isn't always a good thing....

"In a scandal similar to that involving Enron, Conaway and Schwartz were accused of misleading shareholders and other company officials about the company's financial crisis while making millions and allegedly spending the company's money on airplanes, houses, boats and other luxuries."

Management has always been a key factor one needed to look at, but as an individual investor, I know that if I was looking at them at the time before the scandal, I could not have predicted that it would come to this. Sort of goes to show why stocks can be such a risky gamble, because things can still go awry even when you research everything....

"On May 6, 2003, Kmart officially emerged from bankruptcy protection (...) Lampert took control of the company and began to run it for profit instead of sales.

So, I assume this part is why K-mart is no longer known for its discount prices and blue light specials, and by now, we all know it's stuck between a rock and a hard place against Wal-mart and Target.


In hindsight, there's so many good lessons here for investors to take away from. None of them are terribly difficult, and chances are, you may already know about them. Still, these signs are important enough to keep in mind, and it especially hits home for me whenever I walk through a K-mart....

Taken for a ride

April 17th, 2009 at 06:18 am

I was just perusing through some of the Carnival of Finance-like posts from other blogs (not from any blogs here), and um, how do I put this?

I am reminded again that there's no minimum requirements to have a financial blog. In other words, I can easily set up a blog like here, and fancy myself as an "expert"... like here. Big Grin

By the way, I know I'm not an expert. I'm just a guy, trying to get through life. I blog as a way to express online what I can't always do in real life, as well as to sort of chronicle something that is important to me, which is my financial journey.

And yet, to be blunt, there are some people who are much less informed about financial matters than even I, but are parlaying themselves as financial experts, and giving out all kinds of semi-misleading advices. (Let me say again that none of these blogs are from here.)

Let me also add that these sort of blogs and entries are in the minority. Typically, I've enjoyed these sort of Carnival articles.

You know, I was actually quite reluctant to make this post, because as a rule, I don't like to criticize other people. If anything, I prefer to be someone who is known for being supportive and helpful, not critical.

Still, where else would I be able to get something like this off my chest except... here? I just hope that people will keep in mind the age old Latin warning, "Caveat Emptor" when they read about financial advice, including ones from me. Big Grin

Speaking of rides, did you know that even wealthy people are feeling this recession? And that there are also a lot of "bargains" for the filthy rich out there? I remember seeing several examples of this, but this buy one get one yacht free deal is, by far, one of the most over-the-top I've seen and I just have to share it.

More trading quickies

April 16th, 2009 at 06:46 am

* The topic of why leveraged ETFs should not be used for long-term investing has come up in the past before, and I found a relevant article that I wanted to save here.

* A comical but ultimately grim reminder of not letting one's feelings cloud our judgment when it comes to making rational trading decisions. Investing psychology chart.

* Note to self: Study OAKVX more in-depth later. ER obviously too expensive, but I think they've got the kind of thinking that I would like to help pick my own stocks.

* Not really investing-related, but this article really blew my mind.

"Last summer, Congress passed the Hope for Homeowners Act, setting aside $300 billion to help people refinance into more affordable mortgages. But the program has been a total flop.

When it was first introduced, the Congressional Budget Office estimated that the program could help 400,000 people keep their homes.

But more than six months after the program was launched, the Federal Housing Administration says only one homeowner has made it all the way through the government program and received the FHA guarantee. "

Trading quickies

April 14th, 2009 at 08:33 am

This entry is going to focus mostly on trading and investing, so please feel free to ignore if you are not interested.

But, if you're still here, I'm going to try to make it as brief and interesting to you, the reader, as possible.

* So, I think everybody is familiar with the Sharpe Ratio, but what if you're only interested in the downside volatility? The gains can be anything for all I care, it's the downside risk that I care about, right? Well, I just learned that there is a modified version called the Sortino Ratio, which calculates for that.

* By the way, ever heard of the Amaranth Gamble? The link will tell you more, but basically, it's one of those hedge funds that didn't use futures to hedge against risk. Rather, it used the same futures to leverage massive bets with little regard for risk.

In other words, no matter how good someone is, no matter how "sophisticated" the trading strategy or the instrument may be, trading with little regard for risk is ultimately a recipe for disaster. It's an important lesson all traders and even investors should take to heart.

* Finally, I don't know how seriously you want to take this, but I thought this is, by far, the most amusing stock pick I've ever seen. Text equivalent articles are available, but the stock picker in the video is what makes it so funny. Check it out!

Good Friday quickies

April 10th, 2009 at 05:54 am

Perhaps that's a terrible title, and I apologize. I'll try to make it quick.

* Wikipedia has an interesting etymology for the entry piggy bank. Go check it out!

* I tossed out a couple of Blockbuster coupons. Why would I want to pay $1.99 discounted price for DVDs when I can get about the same for $0.99 at Red Box? Sometimes, a deal still isn't a deal.

* Wells Fargo stock jumped to over 30% yesterday. I wasn't in it. I weep.

* Probably noticed by now that I've made some color changes on the blog, as well as added some links that I like. Please let me know what you think of it.

* How do you keep birds out of air vents? I read that the best way is to put a wire mesh over the vents, but what if the vents are second story high and you don't have any means of reaching it?

* Ok, there is absolutely no rhyme or reason why I should even be aware of something like this, but I thought this is the prettiest baby crib I've ever seen. And that's my insane moment of the day. Big Grin

The New Normal

April 8th, 2009 at 05:51 am

The current economic recession is deep. Deep enough that some are already speculating it will shape and define the decade to come.

Good! I had lamented before that, once the economy is in recovery, the lessons of this recession will be forgotten. I feared that people will go back to their old ways of super-sizing everything from cars to credit card debts.

Fortunately, that appears less and less to be the case. In fact, as I was listening to the radio, they brought up a buzzword that I really like: The New Normal.

Still, as the radio program begs the question, how has this economy affected your every day life? What is your New Normal?

- - -

Since I'm asking, I suppose I should also be the first to answer. The truth is... besides worrying about becoming unemployed, I can't say the economy has affected me that much. Don't get me wrong though. It could have, but I already turned frugal as a result of my divorce, before the economy got really bad. But if that had not happened, then yes, I think the economy would have had a bigger influence on me.

Actually, and at the risk of stabbing myself with fateful irony, perhaps this economy HAS influenced me in a rather peculiar way. Despite being re-born as a frugal person, the economy is quite the consumer's market right now. There's just so many good deals out there that I ended up spending on a lot of stuff that I've always wanted, but kept putting off.

20% off for micro-fleece Snuggies blanket with sleeves and super absorbent made in Germany wonder towel Sham-Wows at the local Bed Bath and Beyond? Heck yeah, sign me up! Just kidding.

Anyways, back to the question for you, has the economy changed you somehow, and if so, how?

Bug Out Bags

April 5th, 2009 at 09:38 pm

I've been casually looking into Bug Out Bags (BOBs for short) lately. The basic idea of a BOB is, in the event of an emergency, you can grab this one bag and, as the name implies, bug out.

Although it's unlikely to run into an emergency like a house fire, if a fire should occur, can you honestly say that you know, in the heat of the situation (haha, punny), exactly what to get and can get to it quickly? I certainly don't. Yet.

Not that it's actually advisable to be sifting through your drawers and closet during a fire in the first place, but what if most of your essential belongings are already gathered up into one easy, convenient carrier, ready for you to grab on your way out? That's what a BOB is for, and I think it's something everyone should consider....

Unlike some survivalists out there, I don't really have a hard and fast rule on what should or should not go into a BOB. I think it should depend on what emergencies each household believes they may run into, and how far they want to take this.

I do think all BOBs should have a small amount of cash, for one thing. Nowadays, it should also contain your flash drive of important documents (which can and probably should be encrypted). It should also contain at least a pen and a sturdy note pad of some sort.

Of course, one can expand to other things such as flashlights, multi-tool, first-aid kit, fire starter, water decon tablets, solar charger, spare cellphone charger, hand crank radio, etc etc. Here's an example of a wilderness survival BOB that I think is fairly well-thought out.

But for most of us? We don't need to go too far with it (unless you want to). The upside to keeping ours minimal is that we can also store most of the items in a fairly small pouch that will not be too cumbersome. For women, it could be as simple as a small purse, and for men, maybe a fanny pack. Keeping it small also makes a bit easier to hide, since a BOB is not something you want a burglar to easily find in plain sight.

Other containers that are worth considering are bookbags, vest or jacket, and brief-cases.

So, do you have a BOB? What else do you think is important or you already have in your BOB?

John Templeton

April 3rd, 2009 at 07:22 am

John Templeton was a brilliant stock investor who lead a long and distinguished career, and was one of the early pioneers of the mutual fund. Like Buffett, he too was a Billionaire that lead a life of thrift and philanthropy. He recently passed away on November 2008....

However, Mr. Templeton's legacy lives on, and thanks to Get Rich Slowly, there is a link to a free PDF book from him. Though the book is short and the advice is simple, I think these are the kind of words that all investors should know and live by.

Anyway, here's that PDF link.

Disneyworld

April 2nd, 2009 at 07:12 pm

Earlier this year, my mother told the children that she wants us to go to Disneyworld this summer.

Disneyworld....

It was one of those places that my ex and I once talked about taking the family there. Somewhere deep inside my tight-wadded heart, I secretly loved it. Visions of the rides where the kids and my ex would be able to get on, and the ensuing laughter and squeals danced through my head.

But that was back at a time when divorce wasn't even in my vocabulary. As they say in the Apollo 13 movie, "Hell, we've never even simulated that before." And now, here I am faced with the prospect of perhaps having to go to Disneyworld without my ex.... A woman whom I still love. A woman whom I still detest.

I know, I know. "BA, you're being too mopey. Snap out of it and go have fun with your mother and kids!"

But the human heart, or at least mine, can be quite the touchy child. After all these years, I have yet to see LOST. I loved the parts of the first season that I saw, but haven't been able to get myself to watch the rest yet, knowing full well that's what the ex and her boyfriend enjoyed as they camped out at his place while we were still quite married....

After all these years, I said that I would draw the strength to finally watch the show some time this year. But Disneyworld? That's too sudden!

I wonder if I will break down in tears? I wonder what the children or my mother would say if they caught me breaking down? What about the crowds? Would they think that perhaps I am somehow injured while waiting in line to ride It's a Small Small World? Would Goofy run up and try to give me CPR? Now that would be funny.

Yeah, I know I'm sulking still, I know the world doesn't center around me, and that I Don't Have Any Problems. And for heaven sakes, I AM a man, and somehow I'm sure I'll survive-- oooh horrors-- Disneyworld.

Just the same, if it does come to that, I think I may need to hold my daughter a little extra close. I hope she doesn't mind. She's getting old enough that she starting to not like being coddled. It's just that, she's the only thing I have left that's close to the woman I once loved. They grow so fast, but I am hoping that she can still be daddy's little girl for just a little while longer... at least until after Disneyworld.

Now if you'll excuse me, I think I'll go over to the forums and talk about stocks or something while I search for my misplaced man-card.

My financially-challenged friend....

April 2nd, 2009 at 09:15 am

Remember the friend of mine that used to live in a car because he can never seem to get his financial act together? The one that drives me crazy, and yet somehow, we're still friends? (I've minimized my contact with him, by the way, and that has helped immensely.)

Well, he finally lost his job as a fitness trainer about a month ago. From his perspective, it's because the economy has been doing poorly, and believes his boss was just looking for an excuse to get rid of him.

Honestly though? He's just one of those guys who thinks he is always right and everybody else is somehow wrong. I mean, he may be my friend and maybe that's rude of me to say, but that's just the way he's always been. That alone has always rubbed people the wrong way, including me... but that's a whole other can of worms there.

Anyway, even though he has been unemployed, broke, and lived in a car before, that's never bothered him in the past. And yet, for some reason, it seems to bother him greatly this time.

I asked him about this, and his basic response was that, this time, he isn't going to try to find a job, and instead, have opted to live on student loans while he's going through school. Ah....

Although I don't think that's a good idea, I didn't come out and say that. However, I did suggest that he should at least find a part-time job somewhere and have some kind of income.

Anyway, it's strange to see him nervous about money. This is coming from a guy who has boasted in the past that he can always go back and live inside his car, and has accused me of "lusting money". But now, he's asking me about budgeting and frugality! Can you believe that? Him of all people!

Or, perhaps, I shouldn't be so surprised, since fear is exactly how I finally got serious about getting my own financial act together.

Still, I wonder if this will be a lasting trend, or is this just a temporary effect until he finds a job again?

Either way, I really hope that he can get through this. I don't like seeing my friends suffer for any reason... but at the same time, maybe this will be good for him. Maybe this experience will finally help him realize the importance of money.