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.

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.

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.

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!

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.

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.

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!

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?!

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?

While reading some financial stuff elsewhere, it occurred to me just how a frugal person can be so distinctly different from a non-frugal. Not in a "I'm better than you" sort of way (although I admit I do think frugality is a better way of living), but... I'm just musing how because we are different, I sometimes forget that not everyone is like us.

For example, I believe frugal people actually enjoy doing their budget. I know I do. But it's easy to forget that many people find it daunting, or at the very least boring.

Another example is that hunting bargains and even clipping coupons may scratch a certain itch that non-frugals may not possess. It gets us rubbing our hands together, perhaps even doing a victory dance, while non-frugals think we've fell off our rockers.

Yet another example is that non-frugals only find joy in spending I think. Therefore, saving and even investing is often times seen as a lamentable exercise in necessary evil rather than giving one warm, fuzzy vibes.

Last but not least, I think frugals might find all this to be "perfectly normal" while the rest of the world may think of us as odd or even extreme. For example, I think debt is generally a "bad thing", best to be avoided unless it can't be helped, or it somehow pays back even more (such as a cash-back credit card). Non-frugal people may think that having debt is as normal and American as apple pie and Fourth of July. Yuck.

That said, I don't consider myself as a natural frugal though. I think there are some people who just seem to have a knack for this, and therefore, didn't have to "train" to become frugal. I, on the other hand, had to be re-born and taught from scratch. But at least I'm on the path now eh? It's also heartening to know that anyone can learn to be frugal, even if they didn't start out that way.

So, do you think there are differences between frugals and non-frugals, and if so, what other distinctions do you think there are?

It's that time of the month again.

Currently, I have only four categories when working with net worth: Cash, 401(k), Rollover IRA, and Roth IRA. Thankfully, having so few and having them all being assets makes it both easy and a joy to work with.

I know that can't last, and that's why I am enjoying it while I still can.

So, this month, I thought I was going to get hit by a raft of irregular expenses, but I was wrong. It's getting pushed back to September, so this month has been a surprisingly good month.

Well, this month's market performance has been literally flat, so the uptick is driven mostly by cash savings that, again, I thought was going to be used to pay for irregular expenses.

In any case, expenses are definitely coming up for the month of September and possibly October, so I think my "pretty months" for the year has probably come to an end.

So how does this work anyways? You just list stuff that have costed you at least $1k?

If so, well, my list is pretty short I think.

My whole PC setup, including the monitor and home theater speakers is well, um ahem, it's closer to $2k actually. BUT, let me add that I had to build from scratch, and this time, it's with future upgrades in mind. So, should not cost that much into the near future.

My mattress is actually $1k. Yeah, believe it or not. I bought one of those premium ones that is suppose to last like 30 years, and after crunching some numbers, it actually came out to be the better value, and with a better quality bed! Assuming that it does last that long....

I guess my car and my college tuition bill if you want to count that. But both are paid off.

Annnnd, that's it!

Addition
Ok, so apparently I am not doing this right. The above is my post-divorce, frugal list. So, what you are seeing in this section would be my pre-divorce non-frugal list.

House - $170k
New station wagon - $17k
New Apple desktop - $3k
Three new Apple laptops - $4k
Two new PC desktop - $3k
New furniture for the house - $3k
SelectComfort air bed set - $2k
Various firearms - $3k

I'm sure there is more to this, but that's all I can think of right now. Does her ring count? Anyways, we sure loved computers back then, didn't we? I still do, and she probably does too. Yeah, it was interesting that I was with someone who liked computers perhaps as much if not more than I do. Equally surprising is how conservative I am today about computers, especially when you consider how much I like them.

One quick thing about the firearms. I've swapped them in and out over the years, and by the time we separated, I've sold it all and probably at a slight loss. So, yeah, I spent a lot on it, but... I recovered most of it as well.

Also noteworthy is that it was all acquired by going into debt! Yeah, pretty much all of it. However, everything in my first list was bought up front, paid in full with money I saved first.

Summary
This is kind of stock-trading talk, but it's also something that I think will interest serious investors as well.

Question: Can market inefficiencies be exploited?

Better question: Do I know anyone that can?

Even better question: Can *I* exploit it?

Short answer: I highly doubt it.

That's the sad but short truth. Now, for those who are still interested, please read on.

Premise
Imagine a deceptively simple and seemingly "sure-fire" premise. You see something that is currently running for a very low price, what do you do? You buy it. You see something that is currently running for a very high price, what do you do? You sell or short it.

Buy low. Sell (or short) high. Simple right?

So, why are so many smart people having such a hard time with this seemingly simple concept?

The more I learn, the more I am realizing the following: Most people don't know where the lows and the highs are. And for that matter, we don't know if current lows could go lower, or if current highs could go higher.

At least, not I.

And when you think about it, most trading strategies have to do with covering the possibility of a trade going wrong. Risk mitigation. Or is that loss mitigation? There's a difference there.

But to answer my own second question, the only person who I can think of that can seem to beat the market is Warren Buffett. I even have a link in this blog, linking to a white paper that claims he isn't just lucky.

So what is he doing that makes him succeed where everyone else has failed? After all, everybody knows about value investing by now. A whole lot of smart people are practicing it. So, why not others? Why only Warren? I don't know.

Articles
If you're wondering what brought this up, consider this interview with

Jeremy Grantham of GMO investing. When you read that article, you get the sense that he is indeed a pretty smart man and he talks a lot of sense. Now consider this rebuttal by Larry Swedroe of Buckingham Family Financial Services.

Granted the rebuttal itself is not without some criticism, but if Swedroe is correct, then why is Grantham himself isn't able to exploit the market based on that simple premise? Yes, the same premise as my own that I am hoping to exploit?

I think it's not so much that zigging when everybody is zagging isn't a bad idea. But rather, the problem is we really can't tell when the market is zigging or zagging at all. Even when the valuations seem so "obvious".

Well, either way, I am still not fully convinced that this is impossible. I mean, even if it is, I'd like to keep trying for now. But peering into others who are obviously smarter and more experienced than I am, and yet having just as much of a hard time with the same basic thesis I'm using, it does give one pause.

I got my first bill with AT&T. I pay all my bills online. With AT&T, this shouldn't be a problem.

But it is.

In order to access my online account, I need either the last 4 digits of my social security # and my zip code, or my PIN number.

My social security # isn't listed in my account yet because this is my first time. I don't have PIN because I'm paperless (unless they plan on sending the first one which has not arrived yet).

I call up their support hotline. The automated voice message is buggy. Yes, a telecom giant with a buggy automated hotline! I got hung up three times. What in the world?

I finally manage to get through, and this poor lady is having a hard time routing me. And when it finally routes me through, the automated voice support tells me to go visit their website.

What the heck? And when I check online FAQs, it tells me to check the printed bill!

What kind of crazy operation is this? The DSL is great, but this is ridiculous! Seriously, I'm tempted to disconnect on general principle. And I WANT to pay them! This is insane.

I know not everyone is interested in this stuff, but this is what's going through my head right now, and I'm always curious as to what some of you think about this. I'll also try not to ramble.

* India's affluence is shooting up, and so is their investment sector. I heard that some India's investment ETFs have quintupled. Crazy. And the only way to top that? I think there's still upside to it. So, how crazy am I for thinking this?

* The sugar commodity has had a huge run, no thanks to drought that has artificially driven up prices to all-time highs. Am I crazy for thinking I should short this?

* Speaking of shorting, I've never shorted anything in my life. And I'm thinking it's time that I at least learn how and add that to my tool box.

But of course, this also involves going into options trading, which I've generally avoided. Am I crazy for considering converting my Roth account into an Options account?

* Guess who's back?
Back again?
Bernanke.
Tell a friend.

Congrats on your second term!

* Finally, volatility continues to fall, and in fact, is headed towards early 2008 levels. I think that's a good sign, but it's not time to celebrate just yet, because if you put it in context, the entire 2008 was kind of abnormal.

I was hanging out with this particular friend of mine again. You know who. But you know what? He wasn't even remotely bothersome this time around. He really is a cool guy when we're by ourselves and he's doesn't get uptight about competing for women or something.

Anyways, he was talking about how he met this woman he is completely not attracted to, but she appears to be interested in him, and she also makes a lot of money.

Unfortunately, my friend is very financially-challenged. In fact, he's currently unemployed, living on student loans while he's back in school. Well, anyways, he was asking me if he should "go for it" for the sake of money.

Of course, you know how I feel about stuff like this, but I also don't believe in telling people how to live their lives. So instead, I asked him, "Well, what do you think she would want you to do in return for fondling her money?" ("Fondling her money" was his words in the question, not mine.) He shuddered and said, "Yeah, no, that ain't gonna work."

I think the more interesting point here is that there's this running stereotype that only women like men with money, but it goes both ways. I think, in general, the more someone desires something that they themselves don't have, the more they are attracted to those who have it.

Anyway, he brought up about starting up a smoothie shop again. And he's starting to admit that he's worried about money. Very peculiar, you know, for someone who says that money is evil. Anyways, I don't think or at least remember him saying that he's actually worried about money before. Anyways, he basically came out and asked me if I would be interested in getting a business loan. He figures $70k or so should do it.

Um, do what?

Usually, we just day dream about stuff like this, or what to do with winning the lottery, or some other amusing topic, but hmm, I think he's actually serious this time. Seriously though? I don't want to go into debt, betting it all on a business plan that, so far, only involves "finding a good location" and "re-renovating". Especially in this recession. Seriously, wow, that's crazy.

But I didn't want to be rude and step on his dreams or anything. So, I basically told him that my credit is still bad right now, which was true.

In keeping with the humorous joke that there is an index for everything, here's an interesting way to look at the differences in purchasing power.

The Big Mac index

Edit: Wow, just found out that this index has been around since 1986! Interesting!

Multiple posts today, but I can't resist sharing

this picture. It really brings home the definition of useless paper money.

You know, there is a lot of articles out there on how to be frugal, but there doesn't seem to be as much talk about staying frugal. Like, why would anyone want to STAY frugal?

Well, it might sound like a crazy question, but if you think about it, that's the biggie isn't it? Because like most anything else in life, frugality only works best when you can stick with it.

So how does one STAY frugal? Um, I'm not sure! How about you, what do you think?

Well, I can tell you why I am still frugal, despite having been debt-free and with the net worth chugging along. The simple truth? Well, I'll tell you....

Fear.

Yeah, when it's all said and done, it basically comes down to that.... Because, look, we've all done the numbers on here, and we all know what it takes to achieve any sense of financial freedom.

And for most people, that number is actually pretty big. And I don't mean a fancy life either. Think about how much a house costs, and how much cars cost per year, and basically just trying to create a living for yourself.

And that's assuming that I will keep working without problems into the foreseeable future. Heaven forbid if I run into an accident that leaves me physically disabled or I become ill and am hospitalized for a long period of time.

And if I'm lucky? Maybe I'll even be able to work towards having passive income to replace my active income, which will eventually become necessary as I get closer towards retirement.

As you can imagine, once you know the true amount that is needed to achieve financial freedom... you can't put that genie back in the bottle.

So, even though I am doing fine right now, I am not so delusional as to think that I've got it made. Far from it. And that's why I am as focused as ever to maintain frugality and financial progress.

Some people might think I'm being overly-cautious, but I disagree. The best time to prepare for potential problems is when everything is fine and you can afford to, not when it's about to strike or is already upon you.

And if I'm wrong? Well, having a little bit too much money is the kind of problem I wouldn't mind having.

Of course, running on pure fear isn't healthy, and I do enjoy the process as well. But anyways, now you know why I am still frugal, and still here. And now you'll also know why I'll never fall off the frugality bandwagon.

So, how about you? I'm really interested to know what keeps you frugal? How do YOU do it?

I am seeing this question pop up elsewhere, and since we also seem to have several new people, I thought it would be fun to ask again, "What made you turn frugal?"

And since I asked first, I guess I'll also answer my own question. My ex-wife and I were $330k in debt and our combined income at the time did not add up to more than $40k a year. Our monthly budget was so tight that, at the rate we were going, we were literally two months from eviction. I'm sure my ex would disagree, but I kid you not we were in very bad shape.

So yes, it was complete and utter fear that drove me to frugality. I tried to turn the ship around, but my ex somehow interpreted that as me not loving her or something, which eventually lead to my divorce that by now I'm sure the regulars here are tired of hearing.

Of course, I'm still here, not out of fear anymore, but because it makes a whole lot of darn good sense. Yes, it still represents a peace of mind that I seek, but frugality is a critical component to any plans towards financial wellness.

Oh, and I am forever grateful to those who have helped me get to where I am today. I wouldn't have been here if it weren't for you guys. Thanks again, gang!

So, what about you? What was your turning point towards frugality?

Stock-related, but more general speak.

Overall, I'm just so surprised at the turnaround in financial sentiment. Seriously, it's only been a year to a year and a half going from "frugality is icky" to "frugality is chic". Even teenagers are getting in on the simpler life. And that's a great thing.

However, there also seems to be a new kind of pessimism as well. A certain sense that the government or the economy or something has somehow betrayed them. And if they are wise and mature, they will also realize that we consumers are just as much to blame for our own actions.

Regardless of the finger pointing though, it seems much harder now to "sell" the idea of actually BUYING into the market for example. "Oh, look at how the market has failed us." Ugh. Whatever happened to the good old days of just trying to convince people to be more frugal?

Ah well, despite my currently bearish outlook, I'm still going to keep buying into the market. In the end, there are still a lot of good companies out there that is still going for a pretty good price.

I could be wrong about the stock market of course, and end up losing a bunch of money. But I also think it's important to be able to see beyond what's right in front of our noses. There's great opportunities to be had!

Completely non-financially related, but a popular and controversial topic on the internet (at least amongst younger men).

Here's the link, and it's a brisk and succint read.

Now, do I agree with this? Not exactly. However, I am a guy, so it doesn't carry much weight in such discussion. Fortunately for me, since there are many women on here, and I'd be interested to hear what you think of it.

Thanks in advance!

A co-worker asked me if I had change earlier for the vending machine. I said I only had a little bit, and gave him what I had.

About an hour later, he came back saying he didn't need my change. However, he gave me a penny more than what I gave him. I told him that, but he said to just go ahead and keep it.

Hey, money's money and that still works out better than some of the stock trades I've made in the past.

So, I've been tinkering with this

retirement calculator. I changed the years to 30, but left everything else alone. The good news is that I have 100% chance of success! Great!

However, if I up the expense ratio to 1%, my percentages falls down to 96%, and at 2% ER, it my chances fall down some more to 91%.

Sure, it's only an arbitrary retirement calculator, but it's enough to show that your expense ratio do make a difference!

Not really stock-related talk, but just wanted to say something quick about probabilities.

In an earlier entry, I've talked about

the Monty Hall problem. On the flip side of the coin-- gee, aren't I clever-- there is also something called the Gambler's Fallacy.

Anyways, what both of these mathematical fallacies point out is that, in order to understand your true probabilities, you have to have the correct grasp of the problem itself.

For example, if you want to flip a coin three times in a row with heads, then yes, your probability will be 1 in 8. However, if you've already flipped a coin twice and got heads, then your probability of getting a head with your third flip is in fact 1 in 2.

As you can imagine, this sort of thinking is vital when it comes to assessing stock trades, or really, anything in life. Because the fundamental lesson is to make sure we understand the true context of the question before we can ever hope for an answer. Or at the very least, it's fun to talk about.

Wow, reading the blogs lately, it seems like everyone is having rather eventful lives, though sadly, not all are over good news.

So, I guess I feel kind of lucky that not much is happening to me, because no news is better than bad news!

Well, there is one piece of bad news. My car broke down again. Something wrong with ignition. Starter or faulty wiring maybe. Not sure.

We took it to someone and thought it's fixed. Within 24 hours, it died again. My mom has a friend who is a really good mechanic, and I hope he can fix it sometime this coming week.

Either way, at 192,000 miles, it's time to think about a car replacement fund. I have been lazily working on one, but I think I better push up the priority on it.

For giggles, I did look into Cash for Clunkers, but alas, I don't qualify. It would appear that Corollas are just too fuel efficient.

Ah well, I'm really hoping the car will last at least another year or so. Hopefully, I'll have the funds to replace it by then.

My electric bill just came in, and in the last month, I've used 499 kWh and cost $61.98.

During the same time in 2008, I've used 1192 kWh, and cost $125.77.

In 2007, I've used 955 kWh, and cost $100.87.

Also, notice how the cost per kWh has gone up. In 2007 and 2008, the cost was roughly $0.10 per kWh. This year, that cost went up to about $0.12 per kWh. That translates to 20% increase in my electric bill! 20%!

Despite the rate hike, I am still saving $40 to $60 in this one month alone! I have to say that the switch to room AC has been a smashing success.

According to the usage history, I have another good month to go for the summer heat, but because it has proven itself by now, I won't be making any more updates on it.

I love it when a plan comes together!

Oooh, I just realized that I forgot to add my current 401(k) to my net worth! How's that for passive investing?

I wish I could remember what the numbers were in the past, so I could retro-actively update my previous entries. Alas, I do not, so July has a very nice bump to it.

While I'm here, I kind of wish Networth IQ would allow us to create, delete, and label our own assets and liabilities. For example, I would love to have one for 401(k), one for rollover, and one for Roth. Unfortunately, this isn't possible so I am substituting annuities for my 401(k) because I'm not going to have an annuity anytime soon.

Maybe I'll go hit networth IQ up with an email, and maybe even look for alternatives. Anyone have any suggestions? How are you tracking your net worth?

So, I was hanging out with this crazy friend of mine again. Yes, the one that I am trying to minimize contact with. He's gotten a lot better... or maybe it's because I've seen him less often.

Anyways, he appears to be fairly involved with the Jehovah's Witnesses. We always end up talking about money, and again, he brought up how the lust of money is evil. (Yes, that guy.) And I said that I agree, and therefore, could never understand why people pursue money strictly for money sake. Rather, money is only a means to get through life, and perhaps to even pursue our hopes and dreams. He seems to be OK with that secular point-of-view.

But in the same conversation, he also lamented about how he wants one of those new iPhone 3GS. Hmm? I thought Jehovah's Witness was against materialism and temptations? Or maybe current generation smartphones are OK? I tried to ask him about it, but all I got was how he doesn't like to carry two devices like me. Even after I pointed that it will cost him much more money in the end. And why specifically iPhones? Why not... a Blackberry or Palm Pre?

Now, for those who are Jehovah's Witnesses, please understand that I am not knocking against the religion. All I am saying is that I have a crazy friend who seems to have his own selective interpretation of the "gospel truth". What's more worrisome (for his sake) is that the selection is only used to reinforce only what he wants to believe in while dispensing the rest, rather than to help him open his mind.

Maybe I am being too critical of my friend here, but I also have other friends who does not make me scratch my head like this. Well, whatever it is, I think I need to keep avoiding him (because of a lot of other stuff that he believes that is not related to finances).

There are a lot of wonderful podcasts out there, and I probably don't even know most of them.

But for those who may be new to podcasts, they are basically audio talk segments that you can download off the internet. In the simplest terms, radio-on-demand!

There are lots of ways to grab podcasts, but the easiest way, I think, is to simply download and install iTunes, and then subscribe from their online store. Most of it is free!

This gets even better when you have an iPod of some kind that you can download and listen to it. I know it's crazy, but I actually prefer to jog to

NPR's market place than listen to music. More importantly, I don't always catch their morning market report on my drive to work, and this really helps me get up to speed.

Other noteworthy podcasts include a section from Kiplinger, Vanguard has a section as well, and there's this personal finance woman named Money Girl if you prefer something more personal.

What's more, if you're the adventurous type, you can also create your own podcast content, but I won't go into that here since it veers off from personal finance topic. I've toyed with the idea of creating my own personal finance podcasts before, but I'm having a hard time coming up with ideas for content. I mean, it's hard enough just to think of stuff to write about on the blog!

Although podcasts have been around for a long time, it wasn't until more recently, when trying to stay caught up on market news that I've really latched on podcasts. They have completely changed the way I view radio just as Hulu and Netflix has changed the way I view television.

Are there any podcasts that you listen to?

Just found something funny from Abstruse Goose. Maybe "funny" isn't a good word for it because some might be going through something similar and hit too close to home. But the author is specifically poking jabs at himself and his lack of preparation more than anything.

What I find particularly interesting in that comic is that he stuck "IRA withdraw" above using credit card. Yikes! But eh, it's a comic, and you can't take it too seriously.

Here's a bonus comic that you guys might find amusing.