Moneymonk

Friday Quote

2009-07-10T06:51:00.001-05:00

Father: Wealth and fame do not buy happiness

Teenage Son: Have you ever tried it

-Jim Berry

The Little Book of Main Street Money: BOOK REVIEW

2009-07-08T08:53:00.007-05:00

Regardless of the markets you still need to manage your money, put your kids through college and have a nice retirement fund. The author Jonathan Clements gives you 21 rules to follow so you can secure your financial future.

This book is for the average American, young or old. He doesn't just focus on stocks, he focus on your home, debt, your income and savings.

Excerpt from Homes as an Investment:

Many people think remodeling as investing in their home. But if you fix up your home and then try to sell, studies suggest you will recoup only a portion of the money you spent. Like the sofa in your living room and the chairs around your dining room table, your remodeling projects never again look as good as they did on that first day. Slowly these improvements deteriorate, the nicks and scratches pile up and, soon enough, it is time to spruce up your house again..

So true Jonathan.

This book talks about Main Street money, not Wall Street money.

Chapter 2 is my favorite: "We Can't Have It All", it's such an eye opener, he does not hold back on telling you the real truth.

Excerpt:

After you reined in the money you spend on protecting your family, the decisions get tougher. Do you go for the big house, pay for the kids' college, or fund your own retirement? I would argue that, if money is tight, it is no contest: Forget the big house, stiff the kids, and shovel those dollars in to your 401(k).

I agree.

This book is a good buy.

Unemployed and what to do about it

2009-07-06T09:00:00.003-05:00

"There are people who will never be out of work -- like highly paid software engineers. Even better are those with top level security clearances, and who have technical degrees. These people will drive fast cars, live in nice homes, and enjoy working 16 hours a day.

People with nothing to offer will collect unemployment benefits."

-Corte33

Wow, he has a point!!!

It all depends on what you have to offer and what skills you can bring to the table.

The talented you are, the more in demand you will be. Pharmacists, nurses, doctors and dentists will always bring value. There will always be a need for these skills.

I work in the IT sector and I must say the longest I have been unemployed was 3 months. That's because I was not afraid to take offers below my previous salary.

I always tell my nieces and nephews to do something that is in demand, not something you like. At least you will be employed. You owe your immediate family at least that. Then play around with things you love.

I hate to be brutal but, you have to do what is necessary, not what you want all the time. Sometimes you have to play the game (at least) until you have the power to quit.

Friday Quote

2009-07-03T08:23:00.000-05:00

it's better to skip supper and go to bed hungry than it is to wake up in debt

-Ben Franklin

Mid-life Crisis

2009-07-01T08:21:00.006-05:00

The mid-life crisis is a stage when many men are plagued by feelings that their life has no meaning or that their physical and mental powers are spent.

(w)

Sometimes this can rollover to a financial crises. We all seem to fall into jobs simply because it pays more than the last job and then we realize that more money is not as fun as having a greater purpose in life.

Waking up every morning, jumping into your car and driving off to work just to do the same mundane activity every single day can frustrate you. You're 35 years old and you wonder what you have accomplished.

You have a mortgage, some other debt, a marriage and kids. Half of you want to act crazy and buy a bunch of stuff that you always wanted. The other half is saying chill out and take an aspirin.

Stop feeling sorry for yourself and get busy. What do you really want to do in life? Start doing it. Don't quit your job (be happy you have one). Work part time on your fun activity. Want the ability to spend frivolous? Pile up cash and do it. Be an adult and don't act rational. Real men and women devise a plan and achieve what they want. Children act silly.

Investments grow based on DEMAND

2009-06-29T08:10:00.012-05:00

When there's a big demand for a product, the stock price will rise. So when you pick investments, think like a consumer of the product. If you know a company will grow each and every year because they have a product that will always be in need. Go for it! You're as rich as your investments are in demand by the consumer.

Of course you may want to research deeper such as the P/E ratio, management, etc.

But first I always look towards the future and say to myself "will this product still be around 10 years from now"? Coca-Cola is one and Apple is another. There will always be a demand from these companies they are truly "growth" companies.

I do see my investments as a producing asset. But even good companies can be affected by downturns. Let's take the recession for example, Apple, Coca-Cola and a lot others are good companies but their stock prices went down. Simply because people were withdrawing (cashing out) investments daily, which makes the price of a stock go down. Which in fact made others panic and stop contributing creating a domino effect?

It's Human Nature to react when your investments are steadily declining. Moments like these I re balance, taking about 70% out of stocks and moving it to CASH (if I need the money within 5 years).

Try not to choose sexy stocks, instead choose boring stocks that products will always be in demand-- recession or not.

Consumer Staples are a good sector. P&G makes toilet tissue, paper towels, toothpaste, skin moisturizers, dog food, potato chips, household cleaning products and much more. This is a well diverse company, regardless of economic factors. P&G will always ride out any storm.

Before you invest, save cash first! At least a few months of rent and enough to buy some groceries, you don't want to be cashing out investments every time a mini emergency occur.

In order words: dig the well BEFORE you get thirsty

Friday Quote

2009-06-26T10:50:00.000-05:00

There is no security on this earth; there is only opportunity

-Douglas MacArthur

When you get too greedy, you lose everything !!!!!!!

2009-06-25T08:55:00.011-05:00

There are some people that will always take risk when it comes to getting what they want.

For example, if it costs $20,000 more to get granite counter tops and stainless steel appliances, some people would not bat an eye blink and go on with the purchase forcing them to deal with the consequences later.

Do you notice that people always seem to get what they want and beg for what they need? When you folly with debt, you cannot just start all over again, your mistakes seem to maximize and create problems in other areas of your life...relationships, job offers, insurance, etc.

Starting a business with no debt and it fails, you just lost a business.

Starting a business with debt and it fails, you have just created more problems, now you have a failed business AND threatening phone calls by collectors.

Please don't get greedy when it comes to debt. The end results can get ugly. Pending lawsuits, creditors calling all times of the day, you will have no peace.

I know people that had over a half of million dollars in real estate because they keep buying houses, they did not need four houses, they just got too greedy. And guess what? They lost it all. They are all contemplating Bankruptcy. Even if they had an emergency fund with 6 months reserve, I doubt if that would have helped them. They were far too over leverage to begin with.

Stop willing to pay any price for something just to have it. There are people out there that have 10% interest home loans, simply because they (so badly) wanted the house. I don't want anything that bad that I'm willing to get ripped off.

What it Takes to get in debt and to get out of Debt

2009-06-23T08:54:00.003-05:00

I always read blogs, articles, books, and listen to audio podcasts about getting out of debt. And there's always a long list of what it takes to become debt free. The list is so long and drastic that it makes you never want to touch a credit card or loan application again.

It only takes applying for a credit card and being approved to start the journey of debt. Just hand over the credit card to a clerk (any clerk)once the card swiped... viola..... you're in debt!

For as getting out......well that depends on how much you are in debt. The higher the outstanding balance, the more you have to sacrifice.

Sometimes people get so far into debt its better not to face it

To get into debt: pick out what you want and hand over the card to pay for it.

To get out:

Bring your lunch to work

Discontinue the cable TV

Work at UPS part time

Work overtime at your job

Don't spend your raise

Don't eat out

Give as much as you can to the debt

Cut up your cards

Have a garage sale

And that is just a few. I'm sure you all can add more. Just seeing that list make you want despise debt.

Woooo my fingers are hurting from all this typing. LOL

Bottom line if you don't like sacrificing don't get into debt .

We don't realize the outcome until we are already in debt.

I wish every eighteen year old can talk a person 10 years older than them that is deep in debt. Sort of like when Alcohol Anonymous people talk to reform people that were formerly alcoholics. But with all the resources, I still feel that most people won't take heed.

A caller once asked Dave Ramsey "How many people that get out of debt go back into debt?" His answer was "I don't know"

Even if you help a person that doesn’t guarantee that they will stay on the straight and narrow. Getting out of debt is easier than staying out of debt.

Friday Quote

2009-06-19T07:16:00.000-05:00

Nothing seems expensive on credit

-Czech proverb

Why Americans don't SAVE

2009-06-16T08:18:00.007-05:00

Here are the reasons I came up with:

People are over confident

Tomorrow will be better than today

Borrowing is easier

Thinking they will get a better job

Things will always workout in the end

I'm young enough to start at a later date

Having debt is not shameful

From personal experience, I have participated in all those reasons above. I had the attitude of: if my bills are paid and I have enough money to eat and put gas in my car until next payday, why bother saving. As long as I had money to live day to day I was fine. If I lose my job, I will just file unemployment benefits. That was the old me.

The new me had to reverse all the reasons not to save into reasons to save.

Debt is shameful

Tomorrow may be worse than today.

I'm not getting any younger

Ed McMahon is not coming to my house

Does saving money increase happiness?

Nah, I think you become more secure to the point you don't have to worry about money or small emergencies that may occur. Having more money in your bank account does not guarantee happiness. Just as being in debt does not guarantee misery.

I think it's all relative.

I know people with massive debt and don't care a bit about paying their bills on time and for some reason they are able to manage.

I also know people that pay their bills diligently, save regularly, and are still worried about having enough money saved and become uncomfortable with spending money.

Very few have a happy medium.

As long as I'm able to save, invest, give and pay expenses out of my income, I have my happy medium.

Stay up to date with my latest tweets, follow me on twitter

Friday Quote

2009-06-12T09:20:00.000-05:00

Why not acquire the means to travel first class through life, to see the Mona Lisa first hand, to swim the crystal waters of the Bahamas, to sample the food in Paris or Africa? Why not do it all? There’s really nothing like a view from the top.

-Jim Rohn

Awwww, the good life.

Long-Term Investing Doesn't Work

2009-06-10T12:32:00.005-05:00

the evidence still shows that multiyear or multidecade holding periods will generate the highest real rates of return, after taxes and the frictional costs of trading.

Lifelong stock investing is the most broadly available way, across the world, to become a millionaire. It's just that most people don't have the time frame, the temperament, or the training to invest this way. Nor do they tack on new capital to their portfolio at lower prices. [mf]

Agreed.

I personally do not buy and hold, I buy and re balance. You have to pay attention to your portfolio. Set it and forget it just does not work.

According to Motley Fool, You must know the following (the four Ts):

1. Temperament. Can you stomach a 50% loss in the value of your investment portfolio over a two- to three-year period?

2. Time frame. Can you handle 10 years of zero returns from your investments?

3. Training. Are you capable of investing in public companies, diversifying internationally, and understanding what you own?

4. Tacking on. Are you inclined to add new money along the way, particularly as prices fall?

If you cannot answer yes to all the above. You may be better off converting your money to a money market fund inside of your 401k.

Remember, that 401k was never designed to be a retirement vehicle, it was made only to supplement pensions and social security. Since social security and pensions are very dismal. I suggest you add other vehicles to act as a retirement fund, such as real estate and a small business

Eradicating debt is far more important than enjoying an extra movie and meals out each month

2009-06-08T09:36:00.004-05:00

I was reading an article in the WSJ about budgeting and came across this sentence above. What are your thoughts? Should you knock out debt before you have your fun?

I look at debt reduction as losing weight sometimes, if you eat salads and drink water to lose weight and you lose 5 pounds in one month and your goal is to lose 20 pounds. You may be looking at salads for a long time.

Same as paying off debt, if a month pass by and you have paid off $200 and you have $5000 more to go, you may not be too excited or motivated to continue.

You may have to balance it with a little fun just to stay committed, just don't get off track.

When you pay off a credit card, treat yourself to a movie. Better yet for every $500 you pay off reward yourself with a little luxury. Same as a diet, have a small portion of dessert one month so you want get sick of salads.

I know a lot of people that have diligently paid off debt only to find themselves back in debt. My niece finally paid off her car with the help of her parents, a few months later she wanted newer car and went back into debt.

Same with diets, most people are deprived of the foods they want and once they have lost the weight --you guessed it, they go back and gain the weight they lost if not more.

Add a little moderatation to your debt plan and your diets and maybe you will not be so quick to give up.

Friday Quote

2009-06-05T06:37:00.000-05:00

getting rich always seems hard and staying poor seems natural

-Robert Kiyosaki

Microsoft Bing: my short REVIEW

2009-06-04T11:50:00.008-05:00

Microsoft unveils it's new search engine cal BING www.bing.com

You can tell they spend a lot of time and money on the beautiful designs of the homepage. A nice "WOW factor".

Despite the new search engine, I'm not ready to give up on Google yet.

I started out by googling my blog name "Moneymonk"

on Google:
Results 1 - 10 of about 24,300 for moneymonk. (0.16 seconds)

on Bing:
Results 1-10 of 11,400,000

Bing tends to pick up more results. I would say it's better than Yahoo search engine as well as MSN. I do love the Videos and TV shows feature BING has, very cool.

However, in terms of keywords, Google still has it. Bing is not my number 1 search engine of choice but it is definitely a backup search engine. For as research Google is good, for as videos and TV shows BING has it hands down.

Look out Google- there is a new competitor in town!

What Won't You Do for a Job?

2009-06-03T10:25:00.005-05:00

Melissa & Doug LLC, a fast-growing toy maker in Wilton, Conn., puts applicants through an interview process so grueling that one job seeker says she left in tears and felt psychologically traumatized.

Candidates must bring their lunch -- plus three years of W-2 statements. They spend hours on simulated work tasks, several with tight deadlines.

huh?

This is definitely an "employers" market !!!

I must say, do not get a job that you are uncomfortable with. They have been interviews that I have been on in which I just wanted to walk out in the middle of the interview ( and this was not during a recession) Even if you do pass the interview, chances are that once you're hired, you won't be there too long.

[wsj]

Housing, cars and taxes are mainly the problem

2009-06-01T12:44:00.011-05:00

and sometimes daycare.

I hate to hear the "spend less than you earn" advice. You can do that and still not get ahead.

Most things that take money away from us is housing and cars. Taxes and medical insurance can also bite us.

Always find ways to make more money. Sometimes is better and more logical to increase income. Spending less can only get you so far. Things are not getting any cheaper. So it's best to Earn more than you spend.

If your expenses are $1700 a month, and your income is $1700, it may seem quicker to cut expenses, but in the long run you are depriving yourself. You may have less expenses, but you still take home $1700 a month. You can cut expenses temporarily, but your long term plan should be to increase income.

Focus on the big expenses--Housings, Cars. I guarantee that you will see drastic changes. I never recommend cutting lattes, $6 lunches, etc.

Rule of Thumb:

Your rent/mortgage should be under 30% of your income.

Your transportation needs should be 10% of your income

Taxes- varies

Daycare-varies

Most of the time, you cannot control taxes and daycare . But you can control the car you drive and where you stay.

Most importantly you can fix your income, don't always rely on what your job pays you. Everyone has some type of talent they can use to create more income.

I have a friend that makes $40,000 a year and has mention that he needs to save money in order to buy a house. I told him he needs to make more money!

Even if he cuts $10,000 a year in expenses and save $10K a year. Now he has to live on $30,000 a year. What sense does that make? Keep your expenses and try to make $60,000 a year over the next few years and save the difference.

It doesn't hurt to do both because regardless of what you make you have to structure your spending. However, spending less than $40,000 a year, can be poverty.

Part time businesses

Friday Quote

2009-05-29T05:00:00.000-05:00

I'm going to state the obvious. If you can't live without credit cards or loans (for other than a home) you are living above your means.

-Unknown

Giving to the poor encourage laziness?

2009-05-26T06:27:00.002-05:00

I was having lunch with an old high school friend I have not seen in about 15 years. She seems to be doing well for herself, nice career, home, car, and she vacations frequently.

We were talking about how it was when we grew up and how things have became better for both of us. We then started talking about giving, I told her I give to different charities and donate clothes to the Goodwill often. She then tells me that she hates to give because it doesn't give people a willingness to do better. In other words "Why should I bother working when I can get clothes and resources from such and such place"

To my surprise, she actually had a point. She told me she knows this first hand because, that was the way they grew up. They were satisfied because they always had a resources to rely on, whether it was food, clothes, medicine, or transpiration. They had some type of connection to cover all these expenses. Her family still rely on services from charities and the government and yes, they do not like working.

This brings me to the question of: if you had all the resources you need and a few wants. Would this create laziness on your part? Its not always easy to get a job and do for yourself, when free resources can ease the burden of extra expenses.

I still give, because I get a tremendous joy from it, however it's always good to see the facts and to know the other side of giving.

Friday Quote

2009-05-22T05:56:00.000-05:00

"The challenge of retirement is how to spend time without spending money"

Author Unknown

How long can you pay your car note, if you were laid off today?

2009-05-21T11:17:00.000-05:00

or your loans, or your gas bill?

These are the questions you should ask yourself if you become laid off. Heck, these are the questions you should ask if you're currently employed. That may motivate you to have "savings" in place.

Some people look at savings as boring because the money is just laying there and not doing anything. They don't realize the true purpose of having a savings account.

I didn't become motivated to have a savings account until we bought a house, because of the extra expenses a house can bring. Had I been renting, I doubt if I would have the motivation to save. The car I had, was paid for and my student loans was $97 a month. Back when I was renting, I was laid off and I had two options: I could have put my student loans on deferment or I could just pay the monthly debt via my unemployment insurance. My husband paid the living expenses.

The more you are leveraged, the more you should save. So if you're thinking about financing anything put your emotions aside and look at your bank account first.

So a person with a $30,000 car, should have a bigger savings account than a person with a paid for car.

How long can you pay your car note, if you were laid off today? if the answer is not at least 3 months---START SAVING!!!

If you enjoy this content, follow me at twitter.com/moneymonk, thank you.

PSD= Poor, Smart and a Deep desire to be rich

2009-05-20T05:59:00.005-05:00

I was listening to the collapse of Bear Stears from a book by Kate Kelly she chronicles the last three days of Bear Steans

She decribe PSD as the culture of Bear Stearns. Rough and Tumble environment.

PSD is exactly what I was as a child, I think these people tend to succeed, because they do whatever it takes type of person.

If your goal is success, a PDS will tend would work twice as hard as someone that is always comfortable, no need to fight when you life is already taken care of.

Now in my 30s, I slowed down drastically, I'm not hungry as I use to be. I'm nothing like I was in my twenties. When you achieve your goals, seems like the fun stops. In my opinion.

To stay motivated, you have to think like a PSD!! Now I have to adopt that acronym whenever I get too comfortable

(npr)

The Richest Man in Town: Book Review

2009-05-19T06:49:00.008-05:00

At first I thought this was going to be another Millionaire next door type of book, surprisingly this book is beyond that. The author, W. Randall Jones interviews the RICHEST people in each town. When I say rich I mean Decamillionaires.

He shares over 80 success stories from Decamillionaires and Billionaires everywhere from Akron, Oh to Woodside,Ca so there's a big chance that your city is included

Each city has it's rich person.

My favorite chapter are Don't Set Goals--execute or Get Executed and Borrow from the Best

Here is an excerpt from Borrow from the best:

No matter its source, a good idea is a good idea

Read biographies of the best and brightest (and richest)

Seek counsel of wise people where ever you can find them.

If we're wise and observe carefully, we can learn from the mistakes of even the most successful people.

The Richest Man in Town: The Twelve Commandments of Wealth, is a good read if you want to go beyond the ordinary millionaire and read about Decamillionaires and how they got started and how they succeed!

Would you marry someone with a messy financial past?

2009-05-18T06:00:00.003-05:00

Well, finances doesn't matter as long as he/she treats me right. We all know that's bullsh!t.

No one wants a broke person that cannot pay their bills and struggling to make ends meet. Only caveats I may consider, serious medical bills, or a failed business.

A person that has good money habits shows that they are in control. People that are not in control are in fear all the time.

I'm talking about a person that makes decent money but somehow ignore their responsibilities to do other things they enjoy. I would not marry someone with a messy financial past. Especially, when they decide not to clean it up. Having crazy consumer debt piled up from different creditors is not attractive. If he/she mistreat their finances, they may have low self esteem. Perhaps, spending just to get people to like them.

A person with a nice financial situation shows that they are organized and they have their financial obligations are intact.

No you don't have to be rich to be on top of your bills, just responsible. I don't need someone to help me to be broke, I know how to do that on my own!