NYTimes has a "Class Calculator" that can show you where you stand in the categories of occupation, wealth, education, and income.
Here are my scores:
Occupation: 80th percentile
Education: 97th percentile
Income: 97th percentile (projected)
Wealth: 40 percentile (current, not projected)
Average: 77th percentile
Tuesday, October 17, 2006
Class Calculator
Six (Worthless) Excuses to not save money
This article covers some of the big excuses people give for not saving more money.
1) I don't make enough money
This is just silly. Everyone can find small things to cut out of their life that they don't need and can save them money. Saving just $5 a day (most of us can cut that out of our food spending) amounts to over $1500 per year.
2) I'll get around to it later. See my post linking on compound interest. Saving earlier means saving more, even if you stop saving later!
3) I deserve a little luxury in my life. I've posted recently on rewarding yourself for financial decisions. A little luxury you deserve, but be sure you are not just spending money on the first thing that you think you want.
4) Someone else will take care of it. FALSE. You are responsible for your own wealth production.
5) I've saving through my 401(k). Great! But you can do more.
6) This item or service will pay for itself. There are some items that will do this. The example I've given before is books. A book that teaches you something about making money can generate a return on investment. Most items (that cool exhaust on your car) will never bring you any return.
Check out the article for more examples.
Binary Dollar: Compound Interest
Binary Dollar: Compound Interest: Rick and Harper
Cartoon with a good explaination of how compound interest works.
Basically, they show why it is so important to invest early. Compound interest means that someone who invests an amount for 10 years will have more at the end of 30 years than someone who started investing the same amount 10 years later.
This is why it is so important to invest as you start you first job, and even before then.
Save money on electric bills
A great way to save money on your electric (or laundry) bills is to hang some or all of your clothes instead of using the dryer. It's easy, just hang your clothes or lay them on something and let them dry over night.
There are many benefits:
- use less electricty (=save money on electric bill)
- less wear on your dryer (=save money)
- less money spent on laundry (if you use a laudramat)
- less heat produced by the dryer in the summer (cut down AC bills)
- get more moisture in your apartment (With the AC on all summer or the heat in the winter it gets very dry in my apartment)
- less wear on your clothes and no staticness when they dry.
Buyers Groups - buy in bulk
You can find people in your area who are also interested in saving money. These should be people you can shop with and trust. Each person can find low prices in the area for various items.
You can also get bulk rates if you get enough people together. I know people who collectively buy a side of beef each year and freeze it. This works well with most products. I do this with wine. I'll buy an entire case (usually you can mix and match). When you buy a case at my wine store they give you 10% off your whole purchase.
Minimally you can get a Costco or Sam's Club membership. They are inexpensive compared to the savings over a year. If you have room to store them, buy large packages of things you will eventually use.
Sunday, October 15, 2006
A dumb way to buy stocks
I was sitting in the bar the other night and talking to a friend. He's someone with enough extra money to have an Etrade account setup, and he likes to trade alot. But he never seems to do so well, and the other night I figured out why: he buys stocks because of the products the company makes.
This can be a good thing, say for instance a startup is offering a product no one else has. Invest, maybe make some money. It is a REALLY BAD IDEA when you buy a stock based on perceived market position. For instance, my friend noted that "there are so many of those concrete barriors around in dc, the company that makes them (JJ Hooks) must be a great stock to buy." DUMB DUMB DUMB. Never buy a stock because their product is popular. Apple is a case in point. You shouldn't buy Apple stock because all your friends have iPods. Maybe you should have bought apple stock when the iPod was going to come out, but even thats a bad idea. Not because the stock won't go up because of the product, but because by the time the product announcement gets into mainstream news, everyone else has already speculated the stock will go up.
Read Full Article......
Cheap and frugal are not the same
I dislike cheap people, I love frugal ones. (Actually, I like ones who spend alot too cause alot of times they'll pay for your drinks too!)
Frugal people save money on things they can. They buy Safeway beans instead of the brand name ones.
Cheap people don't get beans because they cost money.
Cheap people are interested in spending less money at whatever cost.
Frugal people are interested in spending less money on things they choose to.
Frugal people will try to save money on things they don't care about, but get the things they do care about.
Cheap people will try to spend as little money as possible, and don't understand why they can't get things for free.
Frugal people think longer term, and look for a value.
Cheap people think short term and look for a low cost.
Saturday, October 07, 2006
Low Cost Startups
I took some entrepreneurship classes at GW (supposedly one of the better business schools in the country). I wasn't impressed. Not that the cirriculum was bad, just that the classes never addressed one of my objectives, starting a company without any money.
Of course you can't start a company with NO money, but you can start a company for very very little money. I'll center the example off of my plan for Splendid Web Solutions. Here's how:
1) Choose something you can do yourself, and can later be done by other people
2) Choose something that doesn't take many tools (software, hardware or otherwise), or uses things you already have. I had a computer already, and I already had internet access.
3) Find a partner that provides most of what you need. In my case, I needed hosting services (which I wouldn't provide or take credit for), and I also needed the online editing software for customers to use. Ivenue had this, and I found a hosting company with their software.
4) Spend money only as you make it. Essentially you are paying for something on a commission basis. In my case, each time I sell a site I pay the provider $250 for the site. I charge about $2500 on average, so the ROI.
5) Make some money. This is why you need to be able to do it yourself. Do it for a while before you hire anyone else. Other people cost money and it's easier to get someone once you've proved yourself.
6) Incorporate. This has all sorts of protections, see othe posts.
7) Hire people. I started by hiring a friend who did sales. I didn't have enough work (I wasn't working otherwise when I started). he knew sales but not web design. So I paid him COMMISSION. Every site that went trough I gave him a percentage. He loved it because he generally made much more than working at his company, but also because he could work on his schedule. I get the benefit of more projects without having to get better at selling the sites. Also, since he's on commission, I have no costs until he sells a site, at which point I have made more money than I need to pay him.
7.5) I also hired web designers to work on commission. They basically do the whole thing from finding a client to designing and selling the site. This is great since I do literally no work but get a percentage off each sale. I'm aiming to have 10-15 of these people in a couple of months.
8) Expand. Get bigger, grow the business, and move on. I'm going to try to get enough people doing design work, and maybe get some doing just sales (sales work gets spread to the designers), that I can focus on other areas of the business. I'd like to expand the offerings to include internet marketing. Basically, I can take my current clients and offer services to help get their sites listed on other sites or directories, provide marketing guidelines, etc. Eventually that too can be managed by someone else on a commission basis. Everyone makes out well and gains some experience.
I want to emphasis that this probably doesn't work to start a traditional company. I'm using the model of student labor for one. Students are happy to make more money than they can sitting somewhere in a part time job. Also, they are willing to work to gain the experience of dealing with clients, selling sites, etc.
Thursday, October 05, 2006
reward yourself
To keep going at your goals I find it very important to reward yourself frequently. Your list of tangible items you want is a good place to start. First, make sure your lists include the smaller things in life. I love gourmet chocolate, so I've got that on my list. When I accomplish a goal I try to find something that is proportional on my list of things I want and get it. Often the goal and the item correlate financial in some way. A completed web site (and subsequent check) might warrent a pen or clothes. A successful sales call might warrent some chocolate or something. Basically you're training yourself like a dog to keep motivated. It really works.
Read Full Article......
Tuesday, October 03, 2006
Fidelity: avoiding investment mistakes
Fidelity has a page on typical mistakes made by investors. It's kind of boring, but good advice. Take a look here.
Read Full Article......Sunday, October 01, 2006
gas
We're in a gas crisis...yeah right. Gas is exactly where it should be priced, we just had a huge sale for 25 years. I've got some tips for saving money on gas.
1) Buy the right kind. I have a BMW, it says it needs premium gas, and it does. If I put regular in I get about 5 mpg less. That's about 20% more gas and only about 8% less cost. Doesn't add up. BUT, most people don't need premium gas at all. Get regular, it's only a few dollars each time, but it adds up.
2) Drive better. Accelerating is not your friend. Accelerate slowly and drive at normal speeds. I always hate this tip because I like to drive fast. The alternative is to get a german car that's tuned to optimal gas milage at 75 mph!!
3) In stop and go traffic drive in the right lane. I can't find the research on this right now, but statistically the right lane not only moves faster, but also has a more consistent speed. Consistency means better milage.
4) Get a stick shift. I get 40 mpg in stop and go sometimes. Why? Because I drive stick. The slightest downhill means I can coast down without using much gas at all. If I leave more space before moving when going uphill then I save gas there too. In the city I get about 22, far more than the 16 my parents get in their far newer and supposedly "more efficient" cars. Stick beats everything except maybe the hybrids.
5) Get a smaller car. You don't need an SUV, almost no body does. Get the car that fits your real needs. We've talked about this in other products (such as canned fruit!), do it with your car too. If you are the only person in your car ever (ok, sometimes two, we'll pretend you can get dates), you don't need a car that seats 7, you just don't.
6) Stop worrying about it. Ok this isn't really a tip on saving gas, but maybe on saving your sanity. Let's say you spend $1500 a year on gas. If gas prices go up 30 cent a gallan, that means your yearly cost goes up $150 or so. That's nothing in the grand scheme of things. Especially since you're saving all that money on othing things from making smarter decisions. :)
Read Full Article......
Read Quick wiki community
I just got a new site up and running. It's a wiki site designed to share the notes and summaries
of books you read. Check it out at http://readquick.wikidot.com/. Post article or book summaries (and links) your thoughts on them. Users can then discuss the works in the forum page.
Send me your suggestions or just sign up and start using the site!
Friday, September 29, 2006
plan your day
Plan your day. I can't say it enough. Get a planner, use outlook, it doesn't matter, but do something. You will be 10x as productive if you schedule what you need to do before hand. A planner is good if you think in the present and rarely look at past appointments. I use Outlook to rule my life.
Outlook. It has some faults, but generally it's an amazing program. I used it in many ways.
1) Email. its good enough to compete with anything else I've used. (Otherwise I'd use gmail).
2) Calendar. Appointment scheduling is at or above par. (Otherwise I'd use Kino). I schedule everying meeting I have, and generally most activities I do during the day. I use this to track what I lifted at the gym, where I ate lunch, how much time I slept. Two reasons, I know what I did and when, and I can then track how much of my life I spend on each catagory of things. I also schedule all my tasks in, more on this later.
3) Tasks. I write down everything i need to do. By the end of the day it is in Outlook. This lets me track what i have to do as well as what i've already done. Invaluable. Things don't get lost and I get reminders on my phone, pda and screen telling me when urgent things need to be done.
4) Business Contact Manager. This is an excellend CRM replacement for someone running a business by themselves. With Exchange you might even get a few more people out of it. Once I hire more people I will probably switch over to NetSuite since multiple people can access it.
I also use two addins to Outlook. One is essential for anyone with outlook and it's called Lookout. It is a Google Search Bar like program for outlook. It keep an index of everything in your pst files and allows for immediate searching of any item. Outlooks built in search takes often 10 minutes before finding what I look for.
The other is a program called TaskLine. It takes your tasks with due dates and arranges them on your calendar. (You can do this by hand if there are not too many tasks). I set the amount of time I think a task will take, and when it needs to be completed, and sometimes the earliest it can begin (or what tasks it must follow). The program schedules all these tasks onto my calendar. I can just look at the calendar to know what I need to do that day. If I miss something (I had an unexpected meeting), Taskline will reschedule the task before it's due date automatically.
Outlook is a great tool for me. But the important thing is that you plan your day somehow. You could just write a list of what to do the next day. I find that the more detailed your planning the more you can get done. I do very well saying....here's what I'm supposed to be doing now. I do very poorly with...here's all the things I need to get done.
Read Full Article......
Thursday, September 28, 2006
fast shipping = dumb
I see too many of my friends do this all the time. They order something thats cool or new on Amazon or wherever, and they get it shipped over night. Or more likely, they get it shipped two day because then they feel like they are saving money over over night shipping.
BAH!! dumbest thing ever. If you don't need it overnight, then wait. I understand the excitement, but please you're wasting the money. If you don't need it NOW, then get it for less.
Read Full Article......
High Interest Savings accounts
The first step toward getting rich is just making the right habits and decisions. I'm going to try to post a step frequently that is a small change you can make that will add up over time.
This week's small step is opening a high interest savings account.
If you don't have a savings account you need one. Any money that you don't plan to spend in the next few days can be put into your account, and you'll get interest based on how much money you have in it. If you don't have a savings account, open one today!
If you do have one, you might not be getting the best benefit from it. Find a high interest savings account. Some examples are Citibank and HSBC, both of whom are paying about 5.00% APY. I compare this to my Bank of America account at 0.25% and my US Bank account at 0.35%. If you have a savings account that is not paying that sort of interest, get one! You can sign up online, transfer money online, and keep your existing accounts if you already have credit cards and checking.
Here's why you need to do it. If you open an HSBC account with 1,000 dollars today, in a year you will have made $50 without doing anything! If you left this money in your BoA (yes they are like a snake) account, you'd have made $2.50. A big difference. Now, you say, 50 bucks isn't that much. I'd agree, but you then get interest on $1050 the next year, and $1102 the next year. Over time this adds up to a huge difference.
Read Full Article......
Tuesday, September 26, 2006
Save money, learn to cook
I've discussed that the best way to have more money is to spend less of it.
One of the best ways to save money is to learn to cook. If you cook your own meals you'll save anywhere from half to 90% of your food budget. I'm serious. Spend a month tracking exactly how much you spend on food and drinks when you go out. Then spend a month cooking for yourself. You'll be amazed.
Even if you like to eat fruits, vegetables, and meat all the time, you'll save at least half off eating out.
Read Full Article......
decide why you want to be rich
I've been doing alot of thinking on this lately. Why do I want to be rich? What the point of all this? Just about everyone claims they would like to be rich (I don't believe most of them), but very few people seem to say why they want to be. You'll get vague answers like "so I don't have to work" or "so I can buy nice things."
If you really want to be rich you need solid goals you can get to and measure. Not "so I can buy nice things" but "So I can buy a blue M4 coupe and a Starwalker MontBlanc pen." The more specific you are the better you will be. I find that it helps to maintain a list of the things that I want. I have both an tangible and an intangible list.
The tangible list is things like, I want a beach house in Cabo, San Jose. Or I want a 50" Plasma TV that shows light on the wall behind it. Some of my descriptions are so specific that they have links and pictures. Thats good. You have to know what you want to get it. This also works as a Motivator. I can see that if I only make $355 dollars over my budget this month that I can get the starwalker pen ( the rubberized fineliner one). It doesn't matter what, but know what you want.
The intangible list i the harder one for most people. It is easy to say the products you want, both because they are advertised to you, and because it is social acceptable to want luxury items. Intangible lists can include things like "I really like to wake up at 9 and walk to the mall before I start work for the day." Or "I like to take walks during lunch and watch all the people going to and from their offices." They are things that are personal to you and generally concern the way you'd like to live your life, the things that really define quality of life for you. These items are harder to define measurements for, and sometimes you can't do it at all.
Read Full Article......
Sunday, September 24, 2006
How to get rich, the basics
To get rich, you have to make more money than you spend. It can't be done any other way.
There are some simple steps to becoming better with money:
1) Track everything that you spend. If you don't know what you spend your money on, you have no chance of saving more of it effectively.
1.5) Save on the little things. Buy generic instead, save money on the things you don't really care about.
2) Put the rest in the bank. If you're not spending it today, put it in a savings account that earns interest.
3) Put that in the investment accounts. If you're not spending it this month, put it in an investment account. That means conservative stocks, bonds, or mutual funds. Something with a generally steady growth rate.
4) Be rich. You've saved extra money, and now you're making the most of saving that money.
That's all there is to it. Harder than it looks, but that's how to get started.
Read Full Article......
Saturday, September 23, 2006
Ask and you shall receive
Ever been frustrated by something. And then kept being frustrated after you did absolutely nothing to try to fix it? I've definetly done that. But there's good news. Most of the time I've found that if you ask for something you'll get it.
Here's some examples:
* Bank of America started charging me monthly fees on a savings account. It was $5 a month. Not so much, but it adds up. Originally I had opened the account as a student, and they had changed it's status at some point (while I was still a student...). So for a couple months I got frustrated and told my friends how i was pissed at BoA and all that. And magically, they kept charging me. So I called and asked, and they removed it. Just like that. Unfortunetly in this case they have started recharging me several other times.
* At GW I started running a computer security research lab. The tasks included maintaining the servers and helping students setup projects and what not. It was a pretty cool job actually, with alot of control over how the lab was setup and run. BUT, at the same time I wanted to make more money. So I asked them if they'd hire me to do what I was already doing. I went in to my boss and explained why I was important, and they started paying me as a research aide. Just like that. A year later they wanted to stop paying me (the grant was running out) so I asked for credits instead. I worked with a professor and got a bunch of independant study credits that helped me finish my masters at the same time as my bachlors degree!
The moral is that you should ask for things. Really the worst that will happen is that you won't get them.
Read Full Article......
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