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Archive for September, 2009

Cellphone and net worth

September 25th, 2009 at 06:08 am

Cellphone
I finally ran out of phone minutes and had to buy more. This month's usage has been freakishly high and I used up an abnormal $18.90 worth. And yet, it's STILL cheaper than having a local-only land line!

I continue to be amazed at just how good the Tracfone/Net10 service has been so far. You'd think a discount, 3rd party cellular service has some flaws or compromises, but NO! In some ways, they're actually BETTER than premium cellphone services!

The only "compromise" is that they only have basic, low end phones, but I don't really need fancy phones anyway.

After about six months of tracking, I am thoroughly satisfied with the results, and so, I'm going to close the book on the updates. After all, there is only so much I can talk about cellphone minutes. Big Grin

Gracias, Senor Slim.

Net worth
Well, my irregular expenses have finally hit, and it's taking the expected toll. However, thus far, my net worth has continued to march forward and even crossed an important milestone. Not that it's easy to see because I cropped out some of the details.


Sorry, I just don't want to detail my net worth for personal reasons. Most of this is driven by retirement funding anyway, so it doesn't translate to much in real life terms, but it's still a very important psychological victory for me.

I'm not in the clear yet though. Any financial slip or accident, especially in this economy, and I would be trouble again. So, I remain vigilant, but very thankful for all the help my parents have provided in my recovery.

And I thank you guys too, for all the support and help! This community has been great, and I doubt I would have made it this far on my own.

Thoughts on oil

September 22nd, 2009 at 08:14 am

Stock market talk.

One of the more curious phenomenon I've observed is that a lot of things could be going through my head even though I could still end up doing absolutely nothing with my trades. Big Grin

Take my current oil position for example. Er, oil services with a side of natural gas to be exact. Conoco Philips (COP). Since the time of my purchase, the darn thing has run up to 20% YTD.

I bought it when oil was like $30 a barrel, and though I may not be the sharpest tool in the shed, it doesn't take a genius to realize that it has gone way too low. The second I heard OPEC was cutting substantial supplies, I was in.

But now, we're at a point where I feel oil has reached a fair market value... or at least one that OPEC seems to be satisfied with, especially considering that we are still in the midst of a recession.

So, now I have to figure out what I think may happen next. I know oil producers have a ton of oil standing idle. I just read that they're already introducing more supply, but still, they are deliberately trying not to flood the market to maintain current prices.

Now, here's the thing. If the economy recovers, they'll be happy to unload their excess. I don't think they'll deliberately choke supplies to jack up current prices even more because they know the delicate condition of the current markets. That and considering they just increased their supplies by a bit, and I think that action speaks for itself.

Contrast that with a double dip scenario. The market goes back down, and what do they do? They may decide to cut supplies again to maintain current pricing, but that's not likely as they have fought internally in the past against such a move. Again, they are all too aware of market conditions.

What is more likely to happen is that they may more or less maintain current levels and let the price of oil fall again. Again, if we slip back into recessionary lows, the last thing they want is to stifle recovery by having gas prices too high. They may settle for $60 or even $50 a barrel.

The market could conceivably move sideways as well, but it's hard for me to imagine that such a market trend is sustainable with so much going on. And anyways, COP isn't the only dividend producer I have, so I'm still good for the market going sideways....

At least that's what's going through my mind right now. For now, I haven't sold yet, but I think I am getting ready to on the basis that there seems to be more downsides than there are upsides. Besides, 20% gain is pretty respectable, and there's nothing wrong with locking that in....

Anybody have any thoughts on this?

Curious observer

September 21st, 2009 at 06:52 am

A friend of mine called me up earlier, being completely frustrated about how his wife is, according to him, micro-managing the way he spends again. On the surface, it seems like such an insignificant issue to get worked up over. I think it was over a $1 iTune song he bought their son. However, I'm sure the cost is not the issue because they make good money, but rather, it's the way both handle money and each other that is the problem....

The irony is, even though this man is my very good friend, I tend to logically agree with his wife because she's the money person in the house and she is the one who understands the big picture.

Interesting enough, when I asked her if she was excited that her husband, my friend, finally landed a decent job and that he could help her with the bills, she said that she was, but at the same time, she dreaded the money fights that would follow as well. Knowing her husband well, she knew he would feel entitled to spends at least part of the money on how ever he sees fit. How uncanny....

My friend is probably one of the best man you'll ever meet, but yeah... I suppose personal finances isn't exactly his forte. Still though, I had no advice or suggestions for him. I had no intentions of attempting to "solve" math problems. He was simply frustrated and he needed to vent. So, I just listened... well OK, I vented a bit about my ex as well, but only to commiserate with him about his plight. He needed a sympathetic ear, and as a friend, I was happy to lend it.

But as a curious outside observer, I must say, this stuff is beginning to seem kind of foreign to me. A small part of me is thinking, "Wow. You're such a lucky man to have such a great wife who is also good with money. Who cares if she fusses over a $1 iTune song? Just kick back, relax, and enjoy life minus a song or two."

Of course, such things only seem "simple" on the outside, and I am reminded of how even the smallest straw can break the proverbial camel's back if there is enough prior weight and stress on it.

So far, I am learning that we can't always decide our situation in life, but we can always make the best of it. This conversation with my friend helped me realize how fortunate right now in that I don't have to have money fights... er, most of the time anyway. I don't know what my future holds, but whatever it is, I do know I need to be in a much better financial situation than I am in right now.

Aunt's retirement money

September 17th, 2009 at 06:10 am

So, my mom did something unique yesterday. She let me see one of my aunt's retirement account letters. She wanted me to tell her what it meant and whether it was something my aunt needed to worry about.

The letter turned out to be nothing more than a regular update statement. However, what kind of worried me was the asset allocation. There are only two mutual funds in the account. One I think is a large cap growth, and the other is a mid cap growth.

I asked my mom if she knew what other money my aunt had, because this account was only $10k total, and being in their early 60's readying for retirement, surely there had to be more money. Unfortunately, my mom didn't know.

So, with no other details to go on, I tried to explain to my mom that having 100% stock mutual funds is really risky for people in their 60's, and suggested that my aunt sell the mid cap and buy a bond fund instead.

Of course, that's hardly an ideal asset allocation, but with my broken Chinese and their lack of interest and understanding with the investment world, well, it was the easiest thing I could think of.

Another interesting detail is that my aunt has the same investment "advisor" as my mother. It would seem that my family is making referrals to each other, and the only qualification they looked for is someone who spoke Chinese.

Now, don't get me wrong. I'm OK with that, because when it comes to something like this, it's good to have someone who can explain it to you in your native tongue. However, this is one of those companies that charge massive 5% front loads, and ER is something like 1.5%-ish!

I'm not going to be able to talk them out of who they are investing with, but at the very least, I was actually complimented that my mom would trust me enough to look at my aunt's statement.

Anyway, I hope they all experience smooth sailing into retirement.

Latest rant on the ex

September 14th, 2009 at 06:33 am

I'm about to vent some serious negativity about my ex. Please skip if you wish.

Seriously, this woman drives me up the wall. She never apologizes for anything, believes she's never wrong, and more recently, has decided that she found "self-empowerment" or some junk. (And I know that using absolutes like "never" is pretty strong, but I think it's actually appropriate in this context....)

The inability to apologize for anything, even when blatantly shown to be false, in my opinion already speaks volumes. But what does she need "self-empowerment" for? She's never had problems being self-empowered. Seriously. I mean, she left me for another guy, despite being supposedly afraid of any ensuing consequences for doing so. What does that tell you?

What she truly lacks is the "common sense" department. Even empowerment is useless if you don't know the proper direction upon which to project that energy. It's like swinging a giant sledgehammer, but constantly missing the target. What good is that still?

Honestly, I give her way, way too much slack, even when I said I wasn't going to. I am such a sap.

Her latest round is wasting my time trying to explain to me how she doesn't make a lot of money, how she's got all this student loan that is still under deferment, and how even her "boyfriend" has to chip in.

Hello? Is anybody home?

You make good money. Boyfriend is paying you rent. Heck, you even managed to defer your massive student loans (with "floaty APRs"). You can pay to take care of the kids!

So why can't she? Isn't it obvious? Lowering her standard of living is simply out of the question. She's not broke. She's maxed out! And she thinks that entitles her to... my hard-earned money?

This, despite the fact that she bitterly complained about me not "spending" on her when we were married (because we were in a serious financial mess back then) and how she would tell me, "Nick doesn't care about money. He just wants me to be happy." I was trying to save our sinking financial ship, and she equates spending to her happiness....

And now, she's trying to stick me with the kids' braces to the tune of something like $190 per month! That's insane! That's like a car bill! And for what? So she can continue on with HER standard of living with HER boyfriend that she committed adultery with?

And really, it does not help her case at all that in the same conversation, she has the galls to say, "But you know what? When I go home, you don't even enter my mind. You don't mean anything to me. At all."

Gee thanks.

The power of frugality

September 10th, 2009 at 06:28 am

I must say, this summer has been an interesting learning experience for me. As it turns out, my mother has been going into overdrive, talking to my relatives from both in the US AND abroad to consider moving and eventually retiring in our home town here.

Together with a real estate friend of hers, my mom has been going all over the place, buying several houses on behalf of my relatives who are planning to move here. Sometimes, my mom would ask me to tag along because her English isn't very good, so that's how I am finding out about all this.

What really blows my mind is the amount of money that they all seem to have and are throwing around. Typical prices for a single dwelling house in my area is around $150k to $250k, and they're all paying... are you ready for this? They are all paying in cash! Up front!

Insane!

I'm like, "Mom. How in the world are they all able to do this?" Mom is like, "Well, that's just the way Chinese people are. They scrimp and scrounge for 30 years, they help each other with lodging and businesses if necessary, and they always pay everything with cash."

Insane!

It's true though. For example, I'll never forget how, growing up, my mom would have us walk around in the house with our winter coats on, but the thermostat is still set pretty low while it's snowing outside. We also lived with my uncle's family while we were helping him out with his restaurant. I didn't realize until later on that this is pretty unusual.

Another thing that leans very favorably for them is that, in my native country, real estate is extraordinarily high. It costs even more than High Cost of Living Areas (HCOLAs) in the states, and anyone living in an HCOLA will tell you even $250k won't get you much.

So, when they found out how much "house" they can buy in our area, it was like, "Oh OK, great! Yeah, let's move and retire there!"

To be honest though, I am also a little worried about how they are going about this. You see, in my native country, real estate is insanely high, but everything else is insanely cheap. Food, clothing, you name it. And they live cheap anyways.

So, their mindset is that if you can get past a house, you are pretty much home free. I don't know if that's entirely true living here in the US.... For example, my native country still has a very high percentage that rides bicycles and motorscooters. And being so densely-packed, you're never that far from a flea market. So, it's very normal to see even the elderly go out and walk to the market, and 20 minutes later, come back with grocery in hand. In the US where I am, you can't do that.

Plus, I am a great believer in diversifying your money. What they're basically doing is putting most of their life savings straight into the house. Some also don't have retirement savings besides whatever they have socked away in the bank. Again, it's that old school mentality... yeah.

But I tell you what though. So long as they band together, I'm pretty sure they'll work it out. After all, having a fully-paid house isn't exactly the worst kind of financial problem to have....

Anyway, the point of this story is that, sometimes it's easy to feel down and feel like we're not getting anywhere with all the scrimping and saving, and we may even wonder if we ever will. I know I do. But when I look at the checks they cut, and when I step into the houses they've bought-- in cash!-- and realizing that many of them are just simple people with modest living, it really sinks in just how powerful frugality can be!

Insane! Big Grin

Forgot to update phone bill

September 9th, 2009 at 12:06 pm

Already one week into the month, and I completely forgot to update my cellphone minutes. Let's see, I've been chattier than usual, and I am updating late. So, that's 154 minutes used, or $13.86 for the cost of August (and parts of September).

That's over my usual budget of $10 per month, but it's all flexible. And anyway, $14 is still very low for total phone use.

Bought Kraft

September 8th, 2009 at 07:14 am

Kraft is feeling down today because he tried to woo Cadbury, but she turned up her nose at the $16.7 billion in flowers and engagement ring.

But you know what? Kraft really is a good catch, even if Cadbury thinks she could do better. Seriously, he's a highly dependable guy, offering a great product line that sells well even in this recession. He also pays out an insane amount of dividend (currently 4.37%).

So, it really doesn't make much fundamental sense anyway for him to have a 5% to 6% technical drop today. Kraft is still the same great guy as he was yesterday and the day before.

Who knows what will happen next in the soap opera that Kraft is entangled in, but whatever it is, I'm still happy to get him for a dipped price of $26.50.

Maxed Out

September 7th, 2009 at 04:58 pm

I think I've seen this one years ago, but I watched it again tonight. Even now, I think it's unnerving when you think about the level of financial mess that we as a society are in.

I am currently watching I.O.U.S.A. Wow, the numbers they are showing in here is mind-blowing. I had no idea how severe the national debt is, especially when you consider that it's being artificially propped up by raiding the Social Security coffers. And we're already in a bad enough debt!

But, ten years from now? I'm scared to even wonder what's going to happen when the SS well runs dry! And that could be only 5 to 10 years away!

Seriously, I'm scratching my head as to how in the world SS is even going to be there for me when I retire. Seriously.

I highly recommend watching I.O.U.S.A. Please, everyone, if you haven't seen this yet, please do so. Then tell everybody else you know about it.

Viva frugality!

September 1st, 2009 at 07:33 pm

In a previous comment, someone mentioned that they may not fit in as a frugal because they like the finer things in life, even though they pursue it in a responsible manner.

You know what? That's exactly what it means to be a Frugal!

Frugality and us Frugals (or Fruggies) tend to get a bum rap, as if we're all some 30's Depression old fogeys clinging to our tattered clothes and hoping for the next hand-out at the soup line because we're too stingy to pay for our own food.... Er, no offense if anyone here IS from that time period.

But the point is, we need some serious PR work here because that's not what being frugal is all about! No, seriously it's not! Big Grin

Frugality is simply a path of self-examination, investing in what is important to us and what brings us comfort and joy in life. The pursuit of happiness, but in an intelligent and responsible manner.

Frugality doesn't mean you can't travel, go out for dinner, or buy nice things once in a while. Yes, it may involve delayed gratification, budget planning, and saving up for it. Yep.

Doesn't sound too exciting, but we're smart people with head on our shoulders and feet on the ground, right? Some planning, saving, and even self-sacrifice is necessary sometimes in order to realize our dreams. We can either accept that and work hard at it, or we can live in the nightmarish world of false hope and false dreams through 19.9% interest and overdraft charges.

Now, I know some people are being frugal because they need to right now. Times are tough, and pinching pennies is a necessary way of getting by. That's true. But I think that only shows the versatility of Frugality, and not necessarily its full potential. Truth is, in my darker days, even just not having to worry about credit card debt was a source of happiness in itself. But it doesn't have to stop there either. In time, frugality brought even more comfort and joy to my life. And all that it asked in return is to be realistic about it and have patience.

But don't you see? We're the Bon Vivants of the financial world! Smile. Dance. Travel. Just don't go into credit card debt over it. Know what I mean?

To me, frugality is a world of beauty that is filled with guitar music, slow dances, and candle lights in a dreamy little foreign locale somewhere. And yet, it's also a world made very possible and very real simply because we work hard and approach it in a smart and realistic manner.

So, maybe I'm in a weird mood tonight, but come on now, who's with me?!

The Easterlin Paradox

September 1st, 2009 at 03:56 pm

For those who may not be familiar with it, it's a basic economic theory that the richer people are, the happier they are.

What makes it a "paradox" is the elaboration of this concept by Richard Easterlin, who wrote the paper on this back in 1974. Basically, it is the following:

1) Within a society, rich people tend to be much happier than poor people.
2) But, rich societies tend not to be happier than poor societies (or not by much).
3) As countries get richer, they do not get happier.

Sounds pretty reasonable enough, doesn't it? Even if it does seem paradoxical at first.

Well, the good folks at Freakonomics decided to take another stab at it with more recent data from around the world, and here's what they've concluded:

There is no Easterlin Paradox.

1) Rich people are happier than poor people.
2) Richer countries are happier than poorer countries.
3) As countries get richer, they tend to get happier.

Or so they claim. Here's their news article, and here's a spiffy graphics they've created with the data.

Perhaps it IS that easy. Richer = Happier. Or perhaps not. What do you think?