Test2
Quiet
From Wikimedia Commons
It’s been quiet here in the last week or so. School just started back for me so I’ve been trying to get my classes in order along with all that I will teach.
I’ve been reading “Margin of Safety” that I’m nearly finished with. I’ll be reviewing that book as soon as I’m done. Additionally, I finished The Intelligent Investor by Benjamin Graham some time ago, but need to take the time to review it.
On the financial optimization front I’ve been taking advantage of the 40% off coupons from Michaels in collecting the school supplies I need. If you sign up at their website they’ll send you a coupon you can print and use as many times as you wish (only once per person per day though).
My wife and I are also trying out a Health Savings Account this year so we’ve been working on getting all of that straightened out. We’re also preparing to review our budget and make any necessary changes.
So that’s what’s been going on. I’m hoping to have some new content for you soon. Until then, God bless!
The Lazy Person’s Guide to Investing by Paul B. Farrell, J.D., Ph.D.
From Wikimedia Commons
As my New Year’s Resolution I’ve decided to find out everything I can about money and finances. Because this is my aim, I’ve been reading books and web sites trying to get a grasp of all things financial. A week ago I checked out a couple books as recommended by the fantastic website “The Simple Dollar”. What I say in this post in no way reflects my view of The Simple Dollar, but only reflects my view of The Lazy Person’s Guide to Investing.
I think it is very important, especially when you write a book on a particular subject, that you be professional in your approach. I do not mean that you cannot have fun - I like good wit and humor. However, if you give advice one way, or quote a fact, you cannot turn and go against it on the next page. I admit, I did not read the book in its entirety. Moreover, I didn’t read more than 20 pages. I skimmed a quarter of the book, but my actual reading stopped on page 12.
On page 10Paul B. Farrell recommends the “big secret to creating a couch potato portfolio.” He essentially asks for a 50-50 asset allocation in two funds: 1) Vanguard 500 Index (VFINX) and 2) Vanguard Total Bond Market Index Fund (VBMFX). He then states that the one drawback to this approach is the $6000 dollars you need up front because each of these funds require a minimum $3000 initial investment.
I have no problem with that advice. One of the ideas he’s trying to get through is that you can’t beat the market, so why try. I would say, it’s very hard to beat the market, so most shouldn’t try. For most it would be a better idea to just sit on the sidelines with a portfolio like the one above, which will basically follow the market at a low expense ration (which we always like).
The next fund he talks about on the bottom of page 11 and into page 12 is the “Sophisticated Couch Potato Portfolio.” I love the name and the irony, however this is where I have the problem. Again, it’s not in the actual choice of the portfolio that I have a problem. This portfolio is made up of the same two funds except the split is 75-25 asset allocation favoring the stock fund. I don’t even have a problem with the split (I would probably be more prone to do this split than the one above in fact). The problem I have is in this next bit: “…That means if you have $10,000 cash to start, you put $7,500 in the stock fund and $2,500 in the bond fund.”
So I’m going to take advice from an “expert” who can’t do arithmetic, or can’t fact check? He just said you have to have a minimum of $3,000 to invest in either fund, but now he’s saying you should be able to get in at $2,500. Not factually correct. To be a “sophisticated” couch potato you’d also be required to make double the investment at $9000-$3000 to achieve the 75-25 split mentioned above. Which is fine, it’s just $2000 more than his example gave. However, I feel, and especially if you’re giving advice to the lay investor with no experience (and frankly little to no desire if they’re a true couch potato), that you should get your numbers right if you’re setting yourself up as an expert.
So once I read that I didn’t really read much more. I flipped through the book. I don’t think it’s a total dud, but I can’t recommend it after such a flaw in thinking on page 10-11. I guess this book isn’t for me.
Sonic
From Wikimedia Commons
Sonic has 1/2 price burger nights on Tuesday nights. If you can resist the temptation to spend your money other ways (fries, drinks, etc), you can get out of there with a burger for around $1.25. If you are single you’ll know you’re hard pressed to make a meal with any sort of protein in it for less than $1.25. Even if you’re a family, it’s hard to get protein too terribly cheap. Anyway, there’s no prep, it’s a good burger, and it’s an easy way to save a little or break even on your Tuesday night meal.
Price Matching
From Wikimedia Commons
I have a friend who is kind enough to help me replace my brake pads. Normally the dealership would charge me $170 to do this. After calling around a bit, however, I discovered that brake pads that fit my vehicle (08 Honda Accord) are not being sold at any auto-parts stores and are only available through the dealership or online. Well, after checking both the quote from my local dealership was between $61 - 75 (they gave me 2 different prices) and the lowest online price was $44. Fortunately, that online price was also tied to a local (within an hour) dealership. So I called around closer to me to see if anyone would match that price. When they did, I (actually my wife) went and picked them up at the $44 price, thus saving $17 or 27%. I need to go buy brake fluid, but after brake fluid my total cost should be around $50 which is only 29% of what it would’ve cost me otherwise. Thanks Jerry!
Total Cost Before Savings: $170
Total Cost After Savings: $50
Total Discount: 71% off
Bonus Gift Cards
From Wikimedia Commons
Outback, Red Robin, and other major restaurant chains gave bonuses this holiday season to those who “gave” gift cards. The Outback version of this was buy $100 in gift cards and receive a $20 bonus gift card yourself. Can anyone calculate the rate of return on your money for that investment? That’s a 20% (20/100 = .2 = 20%) return on your investment. So, if you eat at outback 3-4 times a year, as my wife and I do, this might be a good investment for you.
What’s the catch? Well, with Outback’s deal you must use your bonus gift card any time between Jan 1, 2009 and Feb 10, 2009. For us, that isn’t a big deal - we’d be more than happy to go to a nice steak dinner for $20 (40 - 20 = $20) in the next month and a half. Anyway, these are only a good deal if you already frequent these establishments. If you don’t eat out, or you don’t eat out at these particular restaurants, don’t bother with these deals. However, if you do eat at these places, these offers can be good investments.
If you’re wondering about the image, I did a search for “bonus” on Wikimedia Commons, which is where I get all my images, and this was the most interesting result that appeared, so I used it.
Back-Scratching Our Way to Financial Freedom
From Wikimedia Commons
From time to time you’ll see me post deals on this site. Offers like “sign up for this service through me and I’ll get some kickback (and you may too).” Admitedly, this is partly to make money for my wife and I, but the other part is just the idea that’s there’s extra money up for grabs that someone can have. And the more we can help each other take advantage of those opportunities, the better we will do and the quicker we will find financial freedom.
This also has something to do with financial optimization - which is just the idea that your finances should work for you. So if you have an account at a bank and you receiver $20 for each person you refer to the service, it’s good for your to refer people. And it’s better for everyone involved if I go through you rather than going straight through the company. If I go through the company solely, and do not credit you for the referal, the company keeps that extra $20. However, if we view it as there’s an extra $20 someone will get, “who do we want to have that money?”, I’ll choose the consumer every time.
For me personally, I will not recommend or talk about anything that I don’t think is a good product or idea just to get a referal. It’s not worth it to me. Honesty is really important and I value trust - which is partly why I’m authoring this post. I just want everyone to know if I post an offer where I or we both get rewards if you sign up, it because I like the product myself and want to optimize both your and my finances. I want our money to work for us.
So just as with the ING Direct offer, you have a chance for a 10% instant return on your investment (ROI), which is an incredible offer, and I want you to be able to take advantage of it. Additionally for me, I get $10 for the deal myself, which ain’t bad either. Any time anyone can get free money with little work and no consequences, I think it’s a good thing.
Anyway, that’s my thinking. I’d prefer to refer you to ING or something like that, then you refer your friends and all of uss end up with more money than we had, rather than the companies keeping all their money. Hopefully that makes sense and hopefully you see the benefit in it for both you and I. Sometimes “the Man” just wants your money, but other times the Man has a back scratcher too - and I think we should get our backs scratched if that’s an option.
ING Direct
ING Direct: Still Paying Bank Fees? You masochist you.
About 5 months back my wife and I were encouraged to open an account with ING Direct. We did and we love it. I’ve since closed down my old traditional bank account to move to dealing with ING Direct nearly exclusively. The good part about ING Direct is their higher-than-normal interest rates and prompt service. They’ve been nothing but kind to us. And you might be a little skeptical of a purely only banking company, but it’s very secure (I’m not kidding at all) and, of course, FDIC insured. So you really don’t have to worry.
Additionally, they’ve been kind enough to start a referral program that benefits both the referrer and referee - the referrer gets $10 for the referral and the referred get’s $25. The only thing the referred has to do is open their account with $250. In essence, you get a 10% return on your money on day one. As you’ll notice, there aren’t many places you can get an immediate 10% return. If you would like to sign up for an online checking (Electric Orange) or savings (Orange Savings) account with ING Direct, send me an email and I’ll send you a special referral email that you can use to get the deal.
One last note about this, the Orange Savings Account gives you a 2.75% interest rate on your money currently, which is a really good deal. The Electric Orange Checking Account grabs a .5% interest rate for a balance under $50k, which is better than no interest that most checking accounts offer. If you would like either of these, again, let me know and you’ll get a $25 bonus credited to your account when you sign up with an opening deposit of $250.
Howdy!
Hans Hoffmann Red Squirrel 1578
Just gearing up to give you some links and helpful tips from my life as a squirrel trying to get a nut.
