Monday, April 29, 2013

Getting Back to Gardening

With the approach of summer and the days getting longer, you can probably guess what time of year it is again....that's right, it's gardening time!!!

If you've read some of my historical posts, you probably might already know that gardening is one of my favorite hobbies.  The ability to watch something grow from a seed all the way to producing wholesome and delicious food is such a great positive reinforcement.  Even better is that this all takes place within the span of 1 growing season, so you can definitely see the rewards of what you sow.

If you currently don't have a garden, now is the perfect time to set one up.  The start-up costs can be a little pricey, especially if you have to construct raised garden beds, but over time, your renewable costs will be minimal.  My Wife and I practice composting so most of our fertilizer comes directly from the veggie scraps we didn't eat throughout the year.

With the start of May right upon us, here are some things to be doing right now:

1.) Till the garden bed you plan on sowing.  Now is the time to start loosening the soil and getting a last bit of composting in before you full on plant.

2.) Start planting colder weather crops.  If you are in a high frost risk zone such as where I live, you can still start planting some colder weather crops.  Lettuce, chard, and radishes can all be planted a couple weeks before the last average frost giving you the chance for two or even three crops throughout the year.

3.) Start setting up your square foot markers.  If you practice the square foot gardening method, you need to start getting your garden ready for planting and it makes things much easier if you have your garden all squared off.

4.) Plan what you want to plant.  Now is the perfect time to finalize your planting list, and figure out where everything is going to go.  You might want to do a crop rotation if you have a bigger garden and take advantage of the nutrients certain plants provide and take, or you might want to think about companion planting.  Basil and tomatoes grow great together.  Also, make sure to only grow food items that cost a whole bunch in the store.  If you're trying to get the most bang for your buck out of this garden, then growing potatoes isn't really going to help out very much.  Instead, grow the items that cost much more like sweet peppers, herbs, and tomatoes.  These will pay for themselves and more.

Hopefully this little list will get you started and excited for your garden adventures ahead.  Here's to happy planting!

Wonderful Moment of the Day: Having friends come over, want to use your grill, and make dinner for you...can't beat that!

Friday, April 26, 2013

Becoming an Angel Investor

Recently, I've been fascinated with the idea of becoming an Angel Investor and the potential career path that might lead.  An Angel Investor, otherwise known as an accredited investor, is someone with a significant amount of wealth/income who has been registered with the SEC and has the ability to invest in start up companies. 

The trick to becoming an Angel Investor is the whole concept of obtaining accreditation from the SEC.  The general guidelines for such an accreditation are no easy feet and generally require a net worth (excluding the value of your home) of over $1 million, or a salary over $200,000 for the last 2 consecutive years.  It's a little more relaxed if you through in your spouse as well, but nonetheless, you will still need a significant amount of wealth. 

I am by no means anywhere close to this kind of wealth, but I have to admit that it sounds like an interesting career choice.  Generally, Angel Investors are people who have started their own company and in turn want to invest in the early stages of a start up in order to potentially reep big gains at some point in the future.  They take an early stake in the start up and often have to invest both time and money into its future growth.  It sounds particularly interesting to me since it would expose an individual to all sorts of companies and experiences.  On top of all that, it just seems like an exciting experience.

If you have the wealth to become an Angel Investor, you might be in the position for a significantly exciting career path.  If not, well then you have something to shoot for.

Wonderful Moment of the Day: Woke up spooning my cat this morning.

Wednesday, April 24, 2013

Things to do Instead of Spending Money

If you're trying to keep a strict budget, one of the chief problems that can throw your whole life out of balance is that of boredom.  You might be saying to yourself "that's not such a bad problem".  In fact, some people might even consider the lack of having to do anything as a major luxury.  In our fast paced and busy world we live in, this can often be true, but if you are bored too often, this could spell a disaster for your finances.

Let me elaborate:

Often times, boredom is a rather unpleasant state we find ourselves in.  We try to find ways to avoid being bored, and we usually have "go to" methods for at least doing something.  If you're not careful, your "go to" boredom fix could be something very expensive such as eating out, going shopping, or other entertainment venues.  Before you know it, you find yourself spending way more money than you should have.  So how do we relieve our boredom in a fugal way?  If you're a home owner like myself, there are always an innumerable amount of tasks that should be done, but sometimes I like a little spice in my life.

This blog here suggests at least 56 things you can do that cost very little to nothing.  Most of them are pretty good ideas, however I would argue that they are not all cheap.  Entertaining friends can be pretty expensive if you're not careful.  That said, it's at least a good start to having you think outside of the "proverbial box" and come up with some different ideas.  For me, writing this here blog is often a nice hobby and keeps me thinking.  If I was a better writer, it could even be a source of income.  Either way, look to your own environment for some entertainment, and you'll be surprised at what you find.

Wonderful Moment of the Day: My impatiens seedlings have all sprouted and will be ready to plant soon enough!

Monday, April 22, 2013

Less Accounts to Manage = Easier Saving

I mentioned it briefly here that having only one credit card makes it easier to track your expenses and balance your budget, but the concept can be expanded upon more than just your credit cards.  Consolidating all of your accounts into just a few with one financial institution will make it easier for your to manage your finances, balance your budget, and track your financial future.

Does this sound familiar to you?  To pay my bills and check my account balances, I first log into my account to see how much I have in my checking account, then I go to my paper account register and see if any checks are pending.  Next, I pay a few bills by hand writing checks from one checking account.  I then go online, check my other bank account, and pay some online bills through that bank.  Next I pay 2 of my 6 credit cards by checking the online statements and paying with a variety of checking accounts.  Finally, I log into my brokerage and see how my retirement funds are doing.

Wow!  That seems like a whole bunch of work.  No wonder why personal finances can seem daunting an people can get in trouble.  Well, here's a little trick that I use which has been great for my financial future...use just one bank for all your financial needs.

One of the keys towards getting your financial life together is to have all of your accounts and money in one spot.  This way, you'll know exactly how much you are spending and saving.  To do all of this, you will need a bank that provides all of the following services; checking, saving, lending, and brokerage accounts.  My own personal favorite bank is Schwab.  On just one page, I can see all of my savings, borrowing, and investing.  The only thing I have with a separate company is my credit card, and they only reason why it is with another company is that Schwab sold off its credit card business line to Bank of America about 2 years ago.  If they offered another credit card, I'd probably go back.

If you have many accounts in a multitude of places, the best way to start your financial plan may be to consolidate or close some of your accounts.  This will give you a firm foundation to get the rest of your financial life in order.  Check to see if your financial institution provides all of the aforementioned services, and if they do (for a good price), keep them and get your financial life in order!

Wonderful Moment of the Day: My flower seedlings are just coming up and are currently about an inch high.  I'm starting to get excited for the garden season to come back.

Friday, April 19, 2013

Cost of Living Comparison

NumbeoSometimes in life, you need to just pick up and start over in a new city.  Whether it's a new job, a new love, or just the need for a change of scenery, moving can often be a scary endeavor.  You could almost think about it as a leap of faith.  One of the most overlooked concepts when moving to a new city is it's cost of living.

Cost of living can be easily thought of as purchasing power for the basics of life.  If two cities have the same average $ value for a wage, and it costs $1.39 for a gallon of milk in one and $1.89 for a gallon of milk in the other, you could assume that it's cheap to live in the first city.  It might be far to say that the first city has a lower cost of living.  With that in mind, I found a nice site that lets you easily compare the cost of living in major cities around the world.  Site here.

A simple comparison between NY City and Washington DC will provide a varying array of results from consumer prices, rent, restaurants, groceries, and overall purchasing power.  In this particular example DC was lower than NY in all category except Consumer prices.  This type of tool is especially useful if you are going to compare a job opportunity in another city.  Say you are currently making $40,000 and you get a job offer for $45,000 in another city.  This would constitute a 12.5% increase in pay, however the city you are moving to has a 20% increase in the cost of living making your real wage go far less than when you were in your first city. 

Wages and costs are relative just like much of everything else in this world.  Don't accept absolute values, but instead, find ways to compare them and make an informed decision.

Wonderful Moment of the Day: Hitting the 70 degree F weather now!

Wednesday, April 17, 2013

6 Words of Advice on Investing

Over the course of my reading and analysis of different financial techniques, I've found 6 easy pieces of advice that will convey the heart of investment wisdom.  They are as follows:

On Earnings: Never depend on a single income source.  Make investments to create a second source.

This is the concept of diversifying.  You increase your potential returns while also reducing your overall risk.

On Spending: If you buy things you do not need, soon you will have to sell things you do need.

Keep a budget, and stick to it.  Do not go over your means.  This is the fundamental step towards wealth accumulation.

On Savings: Do not save what is left after spending, but spend what is left after saving.

In other words, pay yourself before you pay the bills.  If you make a habit of saving first, your expenses will fall in line.

On Taking Risk: Never test the depth of a river with both feet.

This concept has you understanding how much risk is involved with an investment.  Don't go all in, and if you are investing in new territory, consider testing the waters before committing.

On Investment: Do not put all your eggs in one basket.

Once again, this is all about diversifying your investment across asset classes and also within asset classes.

On Expectations: Honesty is a very expensive gift.  Do not expect it from cheap people.

One could interpret this along the lines of you pay for what you get. 

What bits of advice could you provide a future investor?  Often times when you think about it in terms of you teaching someone, you'll better understand your own deficiencies.

Wonderful Moment of the Day:  I'll leave you with this bit of wisdom "At the end of the game, the King and Pawn are placed in the same box".

Monday, April 15, 2013

Traveling Where the Water Might Not Be Good

An example of a Grand Tour
If you are lucky enough to have been born in a country with clean, running water, then you already have a better life than at least half of the rest of the world.  My Wife is coming back tomorrow from a 16 day  medical mission trip in Southern Egypt.  Whereas, there are far worse places in the world, this trip has served a purpose of exposing her to how most of the people on the planet live.  Clean water is not guaranteed, so it can make life pretty hard at times.

Back when I was in college, I approached my guidance counselor about the chance to study abroad for a semester.  When she asked me where I wanted to go, I mentioned maybe England or Australia, because I lacked the foreign language skills.  She gave me one look and said "Absolutely not"!  I'll never forget how shocked I was at this statement.  I pressed the issue and she explained to me that a study abroad trip is a once in a lifetime experience, and you need to go somewhere were the water isn't clean to see how the other half live.  I'd have plenty of time in my life visit these other places, but I needed to be exposed to some harsh advice.

Well, she was not wrong, and I thank her for her stern advise.  Since one of my majors was European studies, I found a way to go to Southeast Europe.  The experience was eye-opening, and I would not trade it for anything.  I did come home with a new-found respect for all the things I had.

They used to have something like this back in the 1600-Late 1800's called the Grand Tour.  It served as a right of passage for a young man to experience the rest of Europe.  Well, in today's world, travel is easier, and there are many more places to see.  If you have the ability, I highly suggest you go somewhere were the water isn't always clean and take it all in.  You'll find that it does change you.

Wonderful Moment of the Day: Only 1 more day until my Wife comes back!

Friday, April 12, 2013

It's Easier to Save as you Get Older

We all know that saving for retirement is an important part of life, and that the slow wealth-building tactic of investing a small amount of money each month is a great way to accomplish this task over time.  If you're just starting out of school or college and find saving and investing very difficult, I'm here to tell you that it does get easier with time.  Here are a few reasons why I believe this:

1.) Less 1 Time Expenses - Think of all the money you had to spend when you first started out on your own.  You had to buy a bed, TV, kitchen supplies, a car, or even a new couch.  Chances are, when you hit your 30's you will not have nearly as many of these expenses. 

2.) The Benefit of Living with a Spouse - Hopefully as you age, you'll find someone you want to spend the rest of your life with.  An added bonus is that you can get an almost economies of scale experience by pooling your expenses together.  Food, living, and commuting expenses are less per person since you have 2 incomes with only marginal increases in expenses.

3.) Knowledge Increases - As you age, hopefully you'll start to better understand a whole slew of life skills.  Not only will you know how to better manage your money and savings, but you you'll most likely know how to cook more, or fix your car a little bit, or even just knowing whether you are getting a good deal.  This knowledge will help prevent far more mistakes than you made when you first started out on your own.

4.) Pay Increases - Generally speaking, as you age and become more experienced at your job/career, you'll likely have a higher pay than the inflation rate.  This will only add to your ability to save. 

5.) Good Habits Become Routine - This one only works if you made a habit out of investing when you were younger.  If you were disciplined enough to do this in your younger days, then you should be on automatic in your later years.  You'll also find that you will not miss your saved income, because you've already been living without it.

There are two things that can through all these previous points out of balance, and that's living above your means and children.  No matter how much you make, if you spend more than you take in, you'll have serious financial problems.  Likewise, depending on when you have children will also significantly impact your finances.

Sometimes you might get frustrated with your finances, and understandably so.  Just know that if you have a good head on your shoulders, and stay disciplined, it will only get easier.

Wonderful Moment of the Day - Coming home to a warm house.

Wednesday, April 10, 2013

Why I Only Have 1 Credit Card

Owning your own credit card is one of those milestones in any young person's life.  It creates a sense of pride in an individual.  To think that a bank would trust me enough to temporarily loan money is often one of the first experiences one has with lending.  If not managed properly, these little pieces of plastic can be quite problematic, however, if managed properly, they can provide a whole slew of benefits.  With all the credit card options on the market, and seemingly every store offering their own version, it would be enough to make anyone confused.  In this article, I talk a little bit about why I have chosen to stick with 1 credit card instead of many.

Managing Your Credit Score:
People often wonder what goes into their credit score.  Well, the newly created Consumer Financial Protection Bureau (CFPB) has a nice concise explanation.  Generally, how much credit you have, how active you are in using it, how many accounts you have recently opened, and whether you pay off those accounts are the main factors.  If I were to open many card accounts, I'd probably take a ding on my credit score.  That said, it is a little more difficult to increase your credit line with just one card which would improve your overall score.

Low Maintenance:
Keeping inventory of your many credit cards can be quite a hassle, especially if you are trying to maximize benefits.  Do I get 5% cash back at supermarkets on this card, or is it 10,000 points at gas stations if I spend $2,000 in the first 3 months on that card?  All this can get very confusing if you're not a financial pro.  The added benefits to me are simply not worth the hassle and work involved with keeping up with all these accounts.  It would seem very easy to accidentally miss a payment, and now much of the benefits you reaped or taken away in the form of late fees and increased interest.  It is just much easier to pay off your card each month through using 1 card.

Keeping Track of Spending Habits:
With multiple cards, it is much harder to keep track of your spending habits, unless you are religiously recording every transaction.  With just one card, you have all your credit spending in one place and can easily budget accordingly.  It becomes increasingly hard to know what you spent in a given month if you're looking at 3 or 4 different statements.

Potential Fees for Not Using:
Some cards have fees if not used for a certain amount of time.  Therefore, you have to keep balancing whether you used your card in 60 days or so.  This can get annoying after awhile.

There are some downsides to having only one card.  My Wife and I experienced this a little while ago when our card information was stolen and some fraudulent charges were paced on it.  It took us about a week to get a new card, which could have been a problem since we had no other credit cards.  Overall, though, I think the benefits outweigh the risks.

Wonderful Moment of the Day: Finally starting to get some Spring weather.

Monday, April 8, 2013

Maximize Your Life Through Breakfast

If you want to succeed in life and maximize your potential, then the first thing you can do immediately  is to eat a healthy breakfast.  The simple act of feeding yourself in the morning with a nutritious meal has lasting effects throughout your day, and over time, can be the difference between you succeeding and reaching your goals, or failure.

We all know the old saying that "breakfast is the most important meal of the day", but what does this mean?  Studies have shown that eating a healthy breakfast can have the following effects:

1.) A more nutritionally complete diet
2.) Improved concentration and performance
3.) More strength and endurance
4.) Lower cholesterol levels

I would like to put a note of caution on the 4th point.  It depends on what you eat.  If you're chowing down on bacon and pancakes everyday, your cholesterol might not be too good.  Overall, eating a healthy breakfast has a whole slew of benefits that are too simple to pass up.

Another important feature of eating a good breakfast is that it gets you started in the morning with a good routine.  I know that sometimes in our life, routine can sound like a bad word, but there are reasons why it can be helpful.  Routines allow us to focus on more important parts of our lives, and the comfort they provide can allow us to focus our time and energy on other events that may not be routine. Eating a good breakfast allows your brain to process the events that will likely occur for the day.

Finally, eating a good breakfast can be a nice way to spend time with your family.  Whenever guests come over to my house and spend the night, we try to cook a big and deluxe breakfast as most families don't usually do this.  Not only is this seen as a nice treat, but it is also a great setting for spending time together.

If you're not eating a healthy breakfast everyday, maybe you should rethink your routine.  As far as quick hits go, this is so very easy, that you'd be foolish to pass up.

Wonderful Moment of the Day: Just watch this clip.  It will warm your heart!

Friday, April 5, 2013

Is it Worth Having Both Parents Work?

Every new parent goes through this same difficult question.  Should one of us stay home and raise the child or should we both go to work and pay for daycare?  It's a difficult discussion in it's own right, and it is almost entirely based on the financial rewards for such a proposition. 

I was inspired by this article from the NY Times which talks more about the tax implications of women with childcare expenses.  Basically, a person married to someone who earns much more then them will have their own income taxed at the same level as the higher parent's income.  Couple this with the high cost of childcare, and the actual take home pay might not be as enticing as once thought.

Take for example the case presented in the article.  A parent with an income of $45,000 married to someone making $90,000 will be taxed at a higher marginal tax rate of about 25%.  Their take home pay after taxes, social security,medicare, and any other withholding will most likely be around $30,000.  Now the average daycare expense in NY State for a child is $14,000 leaving the parent with $16,000.  I'd also like to add in some further expenses the article doesn't talk about.  How about having a second car ($1,000 for insurance, $2,000 gas, $750 for service, parking $1,440)?  Subtract this from your take home expense and you are now looking at a take home pay of just $10,810.  All this expense just to get you to work and have someone else take care of your child.

Now we are at the crux of the real question here; is spending your time with your child worth an additional $10,810?  Many people might make the decision that an additional 10 grand isn't really worth it, and I wouldn't blame them! 

Deciding who or both parents should work is a very personal issue, and it requires some tough critical thinking.  Make sure you do your homework, compute the math, and factor in the intangibles and you should have a much clearer picture of your decision.

Wonderful Moment of the Day: Finally starting to look like Spring.

Wednesday, April 3, 2013

Taking a “News” vacation

This past Easter weekend was filled with family activities, physical labor, and great memories.  Even more importantly, there was hardly any time to use a computer, check the internet, or even watch the local news.  Throughout this weekend, I realized that I did not even miss learning about what’s going on around me, and I found myself even more relaxed.  I’ve come to affectionately call this a mini news vacation.

When you think about it, the news is filled with all sorts of negative information.  After all, is it really news worthy if it doesn’t threaten me in some way?  Listening to this negative material day after day will have an effect on your mental state even if you don’t immediately realize it.  Over time, you may even start to feel afraid of the outside world.  Trouble in the Middle East, a murder on the south side, or even local neighbor disputes can give you the impression that you live in a hell hole if that is the only source of information you have about a region. 

Don’t get me wrong; the news has its place within our modern lives.  The information it provides can be very useful and if efficiently disseminates information no matter how negative that info might be.  I’m not suggesting you eliminate this information from your life completely.  What I am suggesting is for you to take a news vacation.  Cut it out of your life for at least a week once and awhile.  This includes newspapers, TV, radio, and the internet.  After experiencing this for myself, I started to feel more connected to my immediate surroundings.  After all, if you don’t hear about it, what do I care about problems in Korea when it’s nowhere near me?  Problems and obstacles in life seem far more minor and manageable. 

If you are feeling overwhelmed and facing some tough obstacles, then try cutting the news out of your life for a while.  This opportunity will give you the time and clarity to examine the more important problems in your life.

Wonderful Moment of the Day: Roast beef leftovers

Monday, April 1, 2013

Deciding on an IRA

Happy April Fools and I hope you also had a great Easter Sunday for those of you who celebrate.  As for me, I had a full weekend of family, food, and garage roof reconstruction (I'll write a more in-depth article on this later).  But for now, I'm tired, and need some time to catch up, and for that I apologize for such an incomplete post.

Instead, I've found a really good infographic on which type of IRA you should choose and whether you even qualify: located here.

Enjoy, and I hope you have a great Monday!

Wonderful Moment of the Day: Finally completed my garage roof project!