Thursday, May 28, 2009

You Can Achieve the Unachievable

My creative director gave everyone in my department the book It's Not How Good You Are, Its How Good You Want to Be: The World's Best Selling Book by Paul Arden. The book itself is very easy to read and is pack full of great quotes, images, inspiration and insightful ideas. I would highly recommend purchasing this book and to flip through it often. I keep it on my coffee table and open it up every once in while. It is mostly about advertising, but can apply to pretty much any aspect of life.

The following is an excerpts from It's Not How Good You Are, Its How Good You Want to Be: © Copyright, 2003, by Paul Arden.

You Can Achieve the Unachievable.

Firstly you need to aim beyond what you are capable of.
You must develop a complete disregard for where your abilities end.
Try to do things that you're incapable of.
If you think you're unable to work for the best company in its sphere, make that your aim.
If you think you're incapable of running a company, make that your aim.
If you think you're unable to be on the cover of Time magazine, make it your business to be there.
Make your vision of where you want to be a reality.
Nothing is impossible.

I believe this is so true, and we can apply this to being successful with life whether it is happiness, career, or wealth. If you look at the title of the book Pual says "The world's best-selling book" he is backing up everything that he is preaching.

When it comes to wealth, we can achieve the unachievable, we just have to set our goals high. I read blogs all the time where bloggers got themselves into serious debt, then they decided that not only were they going to get out of debt, but vowed to themselves they were going to create wealth. It is so easy to be in piles of debt and all you can tell yourself is that you will never be debt free, I know first hand that I thought I never could save any money living in L.A. It wasn't a raise that got me saving money(even though it helped) I still lived paycheck to paycheck. It was my attitude that one day I decided that I was not going to live that way. That first month with my new attitude, I had saved money because I believed I was going to save.

Some people want to be Warren Buffet, some just want to retire in their 50's, some might want to make enough to be charitable, I think at the end of the day you can be any of these if you believe and work at it everyday.  It's really is about you — "Make your vision of where you want to be a reality." I think everyone should use this except, we as a society need to promote this type of attitude. Having the attitude that you cannot get out of poverty, is going to be very difficult. You always hear the stories of people who came from nothing and they say things like "I just decided that I wasn't going to poor anymore, and that I was going to be somebody". I think this all goes back to, you can be whatever you want, you just have to believe it.

What do you think? What is unachievable to you? Nothing right! Go have a great weekend!

Wednesday, May 27, 2009

Rockband: Why it is a Good Investment

If you are a generation X or younger, you grew up with video games being a prominent part of your childhood and probably part of you adulthood. I can remember playing my college roommates for hours at John Madden and wasting a lot of valuable hours of my life in front of the TV.  I can say that I have always enjoyed playing video games and I don't have a lot to show for it except a few bragging rights with friends. 

As I became older and my life became fairly busy, I suddenly lost interest in wasting hours playing these games. I started to enjoy the outdoors more along with becoming active in my free time.  In college, it seemed that all I had was free time besides studying and partying :). As you get older your free time starts to dwindle, so you have to enjoy every second of it. With that I started to get away from gaming based off the amount of money and time wasted on this sort of entertainment.

I decided this past Christmas that I wanted to get a gaming system, not so much to play every spare second, but to get the game RockBand. Everyone and their mother seem to have low cost hobbies for getting through the recession, this is just one way we have decided to save money and still have a good time. This weekend we went to the beach with a bunch of family and friends, instead of going out to the bars and spending money we stayed in and played Rockband. If you like music and/or karaoke it meets both these needs when it come to being entertained. We all stayed around the house and watched each other play while others socialized, but it might as well have been at a bar. We have been doing this more and more weekends, where we will invite friends over for dinner, and instead of going out and spending money at a bar, we break out Rockband and play till the end of the night. 

RockBand sells from around $175(minus the gaming system), but I believe the return on investment is well worth it. We could easily spend $50-75 going out on a night on the town, so it only takes about 3-5 nights of staying in to pay for itself. It is hours of countless fun, but more interesting than sitting a bar wasting hours as well. For some reason you don't seem to drink as much either, you get caught up in playing the songs that you don't think about drinking all that much.

I would suggest anyone that has a gaming system that has been thinking about grabbing RB to save up and purchase it and invite some friends over to play. If you don't have a gaming system you can always do what my man J. Money over at Budgets Are Sexy and invite friends over to play Monopoly. What else are you doing to save money during this recession? Leave me a comment.

Tuesday, May 26, 2009

Jumping Ship: Moving Roth IRA to Vanguard

Last week I decide to pull the trigger on moving my Roth IRA from Edward Jones to Vanguard. I have been contemplating doing this for a while, but just did not have the time to do it. One of the main reasons for switching the account over is so that I could have more control. I also wanted to make sure that I do my research and find out which investments are right for me. 

I opened my Roth IRA in 2005 with Edward Jones with a tax return I had received. One of the first things I learned by opening this account was that the adviser was selling me on buying a fund with a front load of over 5%. I spoke with my father and we decided to go with a 1.45% load upfront with no yearly charge. Recently Edward Jones was getting rid of the fund I was investing in and I had to choose another one. Again I was was sold on changing over to a Fund which has a 5.75% load charge. With seeing how Vanguard's low investment cost are was the main factor that lead me away from Edward Jones and to take control of all my investment's myself.

One other thing that I learned as well with switching over is that the funds I have, have a fee if I moved money out of the fund before 7 years. It comes out to about between $140-160, which I don't want to lose, but in the long run I think it will be the best choice, especially since this year one of my goals is to max out my Roth. With keeping an Edward Jones account I have a yearly fee for them managing my account for around $40. I think I can make it up in the long run and no need to pay the extra fee when I could be investing that money.

It would not be fair to Edward Jones if I did not admit that I had a good experience using them. My adviser called me every quarter to check on me and told me some investments he liked. He was never pushy and he told me to reach out to him if I had any questions or investments I wanted him to check into. I believe Edward Jones is a great company for someone who isn't interested in doing all the work and don't mind someone else managing their money. Just with starting to look more closely to all my investments I feel this is the best decision for me and that it can save me some money in the long run.

Making the change over to Vanguard so far has been very nice experience, their customer service helped me with transferring everything over. They stayed on the phone with me and walked me step by step through the process. I have heard many bloggers speak highly of Vanguard and I am looking forward to my Roth being with Vanguard. If it is as good as I hope it is, I will be transferring my old 401k to a Vanguard IRA as well where I can mange most of my investments in one place instead of all over the place as of right now.

Did I make the right decisions? Let me know, also I have about 19 days before the money is completely transfered, I am researching different funds to purchase once the money is there. If you have any that you like leave me a comment and I will research it!

Wednesday, May 20, 2009

Atlas Shrugged: Real Life Edition

I remember hearing about Atlas Shrugged, growing up with a father and a sister who where inspired by the writings of Ayn Rand. I never had been very political, I just thought that how ever society runs as a whole, would be cool with me. I was taught from my family that we live in the best country in the world and that I could be whatever I wanted, if I believed in myself and worked hard everyday to achieve it. I never took the time to question what our government was up to and the motives of politicians, I just assumed that they were for the good of the country and they understood the importance of productive people. From the first chapter of the book, it opened my my eyes about how economic and social theories of society could effect mine and everyone's livelihood. As I was reading excerpts from Atlas Shrugged and the next day I was hearing and seeing politicians saying and doing the same exact action that were in the book, it started to scare me. I have been giving examples of these in my quote of the week, but nothing as hit home as hard as reading this letter (From The American Thinker) from this business man in Florida. This is absolutely unacceptable for this to happen in the United States of America. Please Read:

My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.

We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community. We have strong local presence and stability.

I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.

On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them. My new vehicle inventory consists of 125 vehicles with a financed balance of 3 million dollars. This inventory becomes impossible to sell with no factory incentives beyond June 9, 2009. Without the Dodge franchise we can no longer sell a new Dodge as "new," nor will we be able to do any warranty service work. Additionally, my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service. There is no offer from Chrysler to buy back the vehicles or parts inventory.

Our facility was recently totally renovated at Chrysler's insistence, incurring a multi-million dollar debt in the form of a mortgage at Sun Trust Bank.



This is beyond imagination! My business is being stolen from me through NO FAULT OF OUR OWN. We did NOTHING wrong.

This atrocity will most likely force my family into bankruptcy. This will also cause our 50+ employees to be unemployed. How will they provide for their families? This is a total economic disaster.


I beseech your help, and look forward to your reply. Thank you.


George C. Joseph
President & Owner
Sunshine Dodge-Isuzu

I am still having a hard time believing this is true...I am looking more deeply into this to make sure it is legit - I do see that they have a website.

Related Post:

Am I the only one that finds this scary? Post a comment and let me know.

Tuesday, May 19, 2009

Main Resources for Creating Wealth

It took me 29 years of walking this earth to realize how hard, but how simple it is to create wealth. The journey of creating a lifetime of wealth is a long road with a lot of turns and bumps. You are going to have a ton of obstacles along that road of creating wealth that are beyond your control. I have found that it is best to focus on the things that I can control and use all the tools out there to keep myself on course while being prepared. To keep myself straight I have some main resources that I use everyday to inspire and to keep me accountable with keeping my goals in check. I will share these with you and hopefully you can find some or all of these helpful while inspiring and keeping you on track.

My Blog/other blogs: Honestly this is the main inspiration at the moment, I started my financial road to wealth by looking for a budget and came across PF blogging. I started to follow a bunch of blogs and finally wanted to put my own journey in a diary format, so I started my own blog. My blog along with the community of bloggers help me to take or at least think about my goals daily. Other bloggers help inspire me and help give me ideas about saving and investing, I can actually see how others are taking care of their money and how they are creating wealth. Click here see a list of PF blogger via

Books/Magazines: Books and Magazines are a great resources that you can learn so much from, as we all know, reading is so essential to the learning process. I don't have as much time as I would like to read, but I have a list of books that I want to eventually read. I am on the last 150 pages of Atlas Shrugged, so I will have more free time to read once I finish it, since this is pretty much all am reading. I read Money Magazine cover to cover every month and it helped me with basics of understanding investing and such.

Family/Friends: This is a resource that I am constantly tapping, wether it be a my money, my career, my retirement, my benefits, or I just need inspiration, it is the best "go to" that I have. My father is a successful business man who has been through most of the questions I have. I am so blessed to have him and see how successful he has been, through his ups and downs, he has got so much knowledge and I love picking his brain. My mother is a successful real-estate agent that decided in her 40's to go back and get certified. Now she is one of the most successful in her community, I have seen the hard work that she has put in with going back and making a successful business/brand of herself. My sister has always been so good with money that I could never appreciate it till I was older. I can truly say that she was born with an instinct to save. When we were little we would go to the beach and our parents would give us $20 to spend on stuff we wanted, somehow I would spend the whole $20 the first day on video games. She would save half of money for the week and somehow let me borrow money as long as I paid he back with interest. She was my first credit card, and she has always made the right financial steps with her money along with being such a hard worker and being successful. My family and friends that have been successful are great resources that if I have a question, I can always just call them up. My parents have always said to surround yourself with greatness and you will become great.

Radio/Podcast: I have about a 35 min commute to work everyday and I love it, at least going there. I listen to Dave Ramsey for those 35 minutes and it inspires me everyday to be smart with my money. It also reminds me how blessed I have been not to rack up a lot of debt and how to never lose control on spending and wanting stuff (even though I have had my fair share of both in the past). I also have Dave Ramsey on Podcast, so that when I feel like being inspired I listen to it.

Twitter/Online: I have always read articles online, but now that I have a twitter account and follow so many PF Bloggers, I am currently getting bombarded with great articles that others have found. Other bloggers send out their post as well so it is a great resource for me. If you would like to follow me click here. I will post articles and blog post from myself and other PF Bloggers that I follow. I promise you if you have a twitter account and follow other PF Bloggers that you will have more reading than you have free time! Here is a list of PF Bloggers on twitter via savingforserenity.

Budget/Net Worth: One of my favorite post to read and write about each month is the Net Worth update on blogs around the net. This helps me track my progress personally and allows me to see my wealth growing —slowly but surely! I also look at other bloggers Net Worth to stay inspired and see any methods that I can implement. You can gain a lot of knowledge and some inside perspective to how they are creating their wealth. It also reminds me that if I stay on course that I can build my net worth to a level I never imagined.

I love keeping a eye on my finances and it has becomes very addicting to watching it grow. Do you have any resources that help keep your finances on the road to success? Drop a comment and let me know!

Related reading

Monday, May 18, 2009

What type of Millionaire would you be?

The average person thinks that the ultimate definition of someone wealthy is having $1 million or more of net worth, not including a primary residence. One of my ultimate goals is to have a net worth of over a million one day. After reading this article there seems to be six different types of millionaires. The article talks about how its not about inheriting wealth, but most millionaires seem to be hard workers who are frugal and they save and invest— its all about living below your means.

Some of the other key points on how people become millionaires is not only that you have to invest, but you you have to do it wisely. They also mention that it is about work ethic and that most of people say that they find joy in working. I have always though this to be true, most of the wealthy people I know love what they do. They don't work for the money, they work because they love it. Since they love it, they are really good at what they do, which leads to success and then to wealth.

The six types of savers are:

Satisfied Savers
They make up 24% of the wealthy population and share these characteristics.

Average age: 60
Built wealth through hard work, by living below their means and taking moderate risks
Financially savvy
Lost relatively little in the bear market
Know how to make their money work for them
Enjoy making a difference through charitable efforts

Status Chasers
They comprise 18% of the wealthy population. 

Average age: 55
Achieved wealth through work and some inheritance
Want it all but haven't been able to achieve their major goals yet
Define wealth as a level three times their current net worth
Pessimistic about their own financial future
Less financially knowledgeable than their counterparts
Think of financial situation daily as a source of concern

Altruistic Achievers
Roughly 17% of the wealthy population is composed of the philanthropists who share these qualities. 

Average age: 54
Achieved wealth through work, some inheritance, good investments, owning a business, and living below their means
Self-made, driven to succeed, work hard, take risks
Use their wealth to help the less fortunate
Lack the time, interest and know-how to manage finances; rely on professional management
Lost the most in the bear market
Only one-quarter plan to retire completely

Secret Succeeders

They make up 17% of the wealthy population. 

Average age: 55
Self-made: built fortunes through working in professional and managerial positions, making one or two particularly good investments and not spending
Live below their means
Suspicious of showing their wealth -- fear they'll lose it
Among the least charitable
Group includes the greatest percentage that admit they'll do whatever it takes, including compromise principles, to stay ahead
Not especially financially savvy, but having financial control is key
Somewhat optimistic about their financial futures

Disengaged Inheritors
They compose 13% of the wealthy population. 

Average age: 58
Received and built their wealth largely through inheritance, and living below their means
Second-wealthiest and second-oldest group
Lack the goals and drive to succeed
Think about their financial situation the least out of apathy and ambivalence
Not charitable, generally unhappy
Least financial know-how of the high-net worth segment
Deal Masters

They make up 11% of the wealthy population. 

Average age: 49
Have amassed the greatest wealth, self-made, self-reliant
Built wealth by setting goals, working hard, being persistent, taking risks, relying on their own financial know-how
Segment comprises the largest number of small business owners
"Winner takes all" attitude
Confident and optimistic
Enjoy the challenge of making money
Think about financial situation daily -- source of challenge, fun, and happiness
Lost the least in the bear market
One of the least charitable groups
Living their dream, little inclination to stop working
62% would rather be stressed than have nothing to do
I think there are some very interesting points to these groups. The one that stood out to me the most was the Disengaged Inheritors and how they - lacked goals and drive to succeed, and that they were not charitable. This just confirms everything that I believe — in that it doesn't matter wether your rich or poor, giving people something without them having to work for it, ultimately leads to people lacking in a drive to be successful. This my friends, is unfortunately why welfare has never and will never work. It also should be noted to everyone who wants to be wealthy one day, that it is very important to raise your children to learn about hard work and the rewards of it. One of my main reason to become wealthy is so that I can give my children everything that I was given growing up. What's the point of becoming wealthy? So that I can give my children money? No, it is more about giving them opportunities and to show them how they can enjoy life to the fullest(by working hard), to pass my knowledge of building something and making this world a better place. 

If I had to choose which category I would fall in, it would probably be "Deal Masters" - I have to admit that I don't give as much to charity as I want or should, so I can't argue against being one of the least charitable. The only bullet point I can argue with is that -62% would rather be stress than having nothing to do- I work hard so that I don't have to be stressed, I hate stress so, I cannot agree with that but, I understand.

Which type of millionaire would you be? Leave a comment and let me know!

Wednesday, May 13, 2009

Man's Life Must be a Straight Line of Motion

This weeks quote is still from Atlas Shrugged part II Chapter VIII "By Our Love" where Dagny is contemplating what it means having a purpose to create and produce. I think when it comes to our careers, finances, and family we can apply her thought process to our lives. One of the main themes of the book centers around working hard and human achievement, Rand herself said the theme is "the role of man's mind in existence." 

The following is an excerpts from Atlas Shrugged, © Copyright, 1957, by Ayn Rand.

"It is not proper for man's life to be a circle, she thought, or a strings of circles dropping off like zeros behind him—man's life must be a straight line of motion from goal to farther goal, each leading to the next and to a single growing sum, like a journey down the track of a railroad, from station to station..."

What I like about this is the thought of going from goal to goal. Life should be keep on a straight path, straying away from that next goal could lead you awry. Next thing you know you are back around to the beginning of the circle, making the same mistake(s) as before. No matter if it is finances' or a career, a circle is "completed and gone, leading to nowhere". Building a working path is about leaving nothing behind to die, each step should be stepping stone to the next day, next job, next career, so on and so on...

In my last post I touched on this a little, every job that I have had, has lead me to where I am right now. Hopefully what path I lay down today will lead to tomorrow and so on till the end of my days. I ask each of you to go and create that straight path today and tomorrow and the next day and keep on till you have reached that first goal, then that 2nd goal and so on...

If you liked this, read more posts of all the Quote's of the Week

Hope you have enjoyed? If so leave me a comment!

Tuesday, May 12, 2009

Advice to New College Graduates

This is the second post dealing with advice for recent college graduates or graduates to be. You are going to be getting a lot of advice from different people, so you can take this advice with a grain of salt. I can only tell you advice from my point of view and I hope it asset you in making you a better person for it.

Let me give you a little background on my experiences after graduation. It was about a month before I graduated and I had no idea where I wanted to live and I did not have a job, so my options where completely open. A friend of mine had recently taken a job and his company was moving him out to Los Angeles. One night we were out and he asked if I wanted to move to LA, I took my chance and moved out there to start "The Real World".

During the last 9 years after graduating, I am still living my dream of doing what I studied and have been blessed enough to be successful at it. I can tell you it hasn't been easy, it took a lot of sleepless nights of perfecting my craft, along with stepping stones from the bottom. It has been a long road to get where I am now and there is still such a long road with a ton of obstacles to where I want to go.

Some stats from my "Real World"

Cities I have lived in- Two
Jobs - Six
Laid Off - Twice
Highest Credit Card Debt - 5k
Unemployed - Once for 6 months
Jobs I have loved - Two
Jobs I have hated - One
Freelance - Twice
Contacts - 153+ LinkedIn
Managers - 11
Corporate Buzzwords - To many to count

As You can see in 9 short years a lot can happen, I know some friend's stats that would blow mine out the water. The point in putting those numbers out there is to tell you keep a level head about all your situations. Jobs/managers/partners/collegues come and go and business's are constantly changing, plus you can add in circumstances that are beyond your control.

I moved out to LA and couldn't find a job for a few months. Once I finally found a job, 9/11 happened and all of a sudden there were no jobs to be found. It took a good three years after 9/11 for me to land a solid job I was proud of. During those three years I had a job not paying much that I hated. Instead of getting down (which I did) I started to network and choose working at night to perfect the skills I knew I was going to need if I wanted to make it. Every job situation I have ever had, led me to the success I am seeing today, even the one I hated.

Your career is going have hills and valleys just like life in general. You just dont want your life's hills and valley to be directly connected with your career, which is very hard to avoid. One of the hardest task is to keep a balanced head no matter what your earning capability is. Making minimum wage or making more money that you ever thought you could or would, you should always learn and love to live within your means. Living within your means, you will always be able to grow your wealth, this is important because you never know what may arise. If you start to save from the time you graduate, you will find out that you will be able to pursue so much more in the future. It might be going back to school, open a business, or if you lose a job you have an emergency fund so you can choose the next job position that is right for you, and not have to take a job because you need it. My mother has always said "it is always easier to get a job, when you have a job", and this is a very true statement. It also a very important statement because you can choose a job that you love rather than one you hate.

Find a career, not a job, a job is something that you hate on Monday's and look forward to Friday's. Constantly looking forward to Friday can only take you but so far. A career is something you love from the first day to the day that you retire, enjoying the failures and the successes that come with it. When you retire you can look back and rest because you have worked hard everyday to get to this point.

What are some of your stats from your career? Post them in the comment section so that other people can see what careers are made up of.

Monday, May 11, 2009

10 Things it Takes to be Successful

This week I will be writing a series of post giving advice for recently graduated and graduating college seniors. When I graduated college I got a lot of advice from different people, from family members, professors, friends and even a few strangers. I have to admit I thought I knew it all and that no matter what was thrown at me I would make it. I definitely didn't know what it took to be successful and I am still learning every day. Its like creating wealth, it takes hard work everyday, you have to work at it and remind yourself to stay focused. I had a few people that gave me valuable pieces of information, but no more so than my fathers personal letter to me(might release one day) and my friend's father who gave me the 10 things it takes to be successful:

1. Goals - “Set realistic, attainable goals.” Happiness is the ultimate goal. You make your choices; your choices make you. Once your goals are set; commit yourself to them. Review them often.

2. Action - “Do todays work today.” Remember that action cures fear. It’s not how much you do, but what you choose to do. If you are master of the small things; you will matter over larger things.

3.  Excellence - Do your best at whatever you do; then do not worry. Worry is nothing more than negative goal setting; it is thinking about what you do not want to happen. “Don’t worry; be happy.” Success is a journey not a destination. Enjoy the trip.

4. Love - Love your work. If not, find work that you love; this love will energize and excite you. Be enthusiastic. It is the winner’s secret.

5. Listen - Take time to listen to others. Walk a mile in their shoes. You will learn greatly from their work, words, and actions. Network. Take joy in others success.“Love one another.”

6 - Honesty - “Have impeccable integrity; be honest in all dealings.” What an entangled web we weave, when at first we practice to deceive.

7. Grow - Make every effort to be a little better tomorrow than you were today. Grow by reading, listening, and studying. Be an expert in your field. Grow your finances by always spending less than you make. “Learn to live within your means.”

8. Health - Take care with your health. You only have one body. A high energy person is hard not to follow or buy from.

9. Renew - Renew yourself on a regular basis. Think, exercise, rest, and pray.

10. Thankful - Be thankful. “I was sad because I had no shoes; then I saw someone who had no feet. “Life is a journey of diminishing needs; when we are born, we need everything; we when die, we need nothing. In between, be thankful for what you have.

I truly believe that if you and I follow these steps and believe in them, that there is no way that you can fail while making this world a better place. We are going to have bumps in the road and things are not going to go our way, but we have to remind our self's of these 10 steps on a regular bases. Print them out and put them at your desk, on your mirror in the bathroom, on your refrigerator. My I make a suggestion, if you know someone who is graduating simply print out and put in a frame as a gift. My parents have always had motivational articles, posters, quotes, pictures, etc...around the house and in their offices. I have always learned from them and even though I thought they were cheesy. As cheesy as motivational posters are they keep you motivated and keep you reflecting on your inspirations, goals, and dreams. 

I really think that number 10 sums it all up “Life is a journey of diminishing needs; when we are born, we need everything; we when die, we need nothing. In between, be thankful for what you have." We live in the best country in the world and we all know how freedom feels, this is one of only a few countries in the world where you can go from nothing to one of the most important people in America. 
Do you have any advice for college graduates or for people like me who want to know what it takes to be successful? Leave me a comment, I want to start getting some conversations going with my readers! Let's grow together!

Thursday, May 7, 2009

Governments hands in our 401(k)s?

After reading this article in the Wall Street Journal about major changes that are going to probably be coming down the road on 401k's has got me completely freaked out.  I also remember reading a article about this in Money mag on how our 401k's need to be revisited and revamped. I feel the government has its hand in to much of our personal lives as is, stay out of my retirement. I already have fears about some of the decisions being made in Washington that are going to come back hurt my pocket one day, but let's just stick to the subject. 

Some of the highlights from the article are:
"In another proposed change, President Obama's 2010 budget calls for the future establishment of a program in which all workers would be automatically enrolled in employers' retirement plans. Now, in most cases, they must opt in to participate. Also under the administration's plan, employers that don't offer a retirement plan would be required to enroll their employees in a direct-deposit individual retirement account. Employees would be able to opt out of either approach."
I could be wrong but don't we already have a plan like this, that is currently bankrupt, called social security? The only difference I see is the option to opt out? I think a easier solution would be to allow us to opt out of SS now. I would be up for opting out of SS, because I am 100% sure that I could take the 6.20% that I give every pay check and invest in something I would actually see one day. 

Goes on to say:
"The 401(k) has become the primary savings vehicle for 60% of workers but has been under scrutiny as workers lost $2 trillion in the market downturns, including traditional pension plans."
Look I agree that there should be some scrutiny behind a 401k. The individual needs to look at the plan and I don't think the government needs to have a hand in any part of my retirement or investments. They were not saying that when people were making money at 8-12% year? Everyone should have learned with Enron that you should be diversified and not have everything all in one company. I am willing to take a strong look at my 401k plan and determine personally, what I need, to make sure I have a nice egg for retirement. If someone decides not to participate in a 401k, they can just save or invest in other areas they seem fit. My grandfather never had a 401k, what he had was a saving account, and he saved enough money that he could retire and play golf everyday. 

I believe that this is what will happen if the government has their way
"Ed Ferrigno, of the Profit Sharing/401(k) Council of America, an industry group, said one fear is that more regulatory requirements will increase costs, and thus reduce services, for workers."
This is what happens when the government has there hands in the people's business. We don't need anyone to tell us what we should be doing with my hard earned money. What we need is for everyone to learn and understand that they need to save money for retirement. Whether they want to take the risk in the stock market or in other means of saving/investing is each individuals right as an American.

The one part of the article I like, talks about more tax incentives for workers and employers who participate in plans, but that should be the case now. Right now 401k's are deferring current income taxes, but the more incentives individuals and employers have, the more people would be willing to learn about the best options. If the government doesn't stop spending, the tax rate for my generation will be through the roof because of the deficit. They need to have more incentives like the Roth 401k which allows you to contribute with after-tax dollars and once you hit retirement age (59-1/2) you can begin to withdraw the money tax-free.

My whole fear in the government having a role in this matter, is that they don't have a very good track record with money, they seem to waste a lot. The government also seem to make decisions based on what crisis is going on, take this conversation for an example. For the most part they make changes that are the most popular one at the time or at these turning points. Our 401ks are individuals savings/retirement accounts and if the government has their hand in it, who is to say that they will not, if there is a national emergency, take that money from us and use it as they seem fit? That might be an extreme, but its to make a the end of the day we don't need a nanny state. This seem again like the government is swooping in to bail us out? Please leave me out of this one as I am not counting on anything from the government when I retire, I can take care of myself.

I know this is probably a touchy subject but I really am very interested in hearing your thoughts on this. Is it a good thing, or are we playing with fire(retirement)?

Wednesday, May 6, 2009

Budgeting Tools

I have two major tools that I use every month that help me track my money management. They are my monthly budget and net worth calculator. I started this blog to keep myself accountable for my own money management, but I also started it so people could see a diary of my daily struggles and victories with creating wealth, purchasing a house, and saving for retirement. 

I track my budget every 2-4 days and I balance my check book those same days. I have found that keeping a hold of your budget is the single MOST important thing you can do for starting to create wealth for yourself. I can honestly say that I never understood how people saved money. Before a budget I never saved any money, I tracked my spending based on how much I had in left in my bank account before the end of the pay period. The minute that I create a budget was the minute I started saving money. It took me complaining to my sister about how there is no way that I could save money living in California with my salary. My sister sat me down and told me to stop whining and to create a budget. She helped me understand how a budget worked, and showed me that I could save money if I wanted, even with a little bit of debt.

I am making my budget and my net worth templates available for you to download and use for your self. I hope that for anyone who doesn't have a budget that you use this to your full advantage and start saving today! Trust me, starting is the hardest part, once you have a budget you have somewhat of goal to start either paying off debt or saving for wealth.

• Download Budget (google) Budget (excel - will post later today)

• Download Net Worth (google) Net Worth (excel - will post later today)

Here are some other great money management resources from other blogs 

Fi$cal Fizzle Monthly Reports
J. Money is bring Sexy Budgets Back

I will be adding more of these so check back! Contact me if you have any tools that I can share with my readers and I will link to you directly. If not, leave a comment and let people know your strategies to saving and creating wealth!

Monday, May 4, 2009

April 09 Net Worth: 28% Jump!

This is the first month that I have seen a significant jump in my net worth since I started tracking it. My overall net worth jump by 28%, which is nice considering a) I purchased a engagement ring and b) went on vacation for a week in April. I have to admit this is an incredible feeling seeing my net worth have such a great month. Minus the stock market I thought that my cash saving would take a big hit because of the vacation and the amount of money we spend. We locked our finances down the rest of the month and I was still able to save some money. So with that here is the break down:

Cash & Savings: This is about normal, as I have $780.00 directly going into my money market fund which has my emergency fund and my house down payment fund. So as you can see I managed to save around $170.00, somehow I am still not sure how? It will be going towards paying off the remaining $125.00 on my AMEX card from vacation. This category also houses my monthly budget, vacation, and vehicle maintenance funds.

Stocks/Brokerage: This also saw a increase in value mostly because of the stock market doing a little better the last couple of weeks. I also purchased a little bit of Nike stock as well. 

Retirement 401k: This category saw the biggest jump and again it is mostly because of the turn around in the stock market. I am still adding 5% of my paycheck as well so that is helping. It would be nice to see it gain this much monthly every month. I believe since I started my 401k a few years back the market value is about what I have paid for it, which is better than losing 40-50%. I am thinking of rolling some of this(around 14k) from my previous job over to an IRA, I just haven't pulled the trigger.

Roth IRA: I have made close to 1k over the last 2 months and I would love for this to keep up. At the end of this month I will be adding more to this, I have a savings fund that has the 3% I took out of my paycheck so that I can max out my Roth. See here

Debts and Liabilities - Still need to cut down on the vehicle

Credit Card 1: This is all but paid off on AMEX - this is from vacation and I am making sure I pay the remaining balance before I get hit with interest. I have about $125.00 that I have to pay before end of the week and will be sitting at $0.00.

Credit Card 2: $4140.00 this is a card which is 12 month 0% APR. I have the money in my savings to pay off the remaining balance if I wanted if something unexpected came up. $4,200 divided by 12 months = $350.00 a month. I will be paying the minimum of the card every month (2.5% of remaining balance) while putting the rest of what remains of the $350.00 into a high yield saving account to make a little interest off while I borrow interest free. I will be cutting a check for the remaining balance on the 12 month of next year before the 0% APR expires.

Car Loan: $13,147.00 is the choke hold on my budget. This is what they talk about being enslaved to debt. I could be putting $400.00 a month more into my down payment on a house or investing in retirement or for charity. I drove my last car till it died 270k miles and I plan on doing this but I wish I could just not have that payment every month. I am borrowing at 4% so its not breaking the bank but not loosening up around my neck either. I want to start paying down the principle but I have been saying that for a few months now and can honestly say that this year is not going to probably happen. So I will keep getting at it...

Overall I cannot be mad, it was my best month since starting this blog and it feels good to see my net worth grow. I just have to stay the course and be realistic that I am going to have up and down months, and that I am in it for the long haul. Sure would be nice though for the Dow to get back around 12, ha

Related Post

How are you doing with your net worth and budget? Leave a comment

Friday, May 1, 2009

BB&T - How Atlas Shrugged Influenced Their Company

I came across this article and found it very interesting to say the least. I have had talks with a couple friends and we cannot seem to figure out why all these banks broke economics 101? How do you plan on making money by allowing people who cannot afford to borrow money, to borrow it and with no down payment? Well, John Allison the retired CEO of BB&T—a North Carolina-based bank with more than 1,500 branches managing $143 billion in assets has avoided the collapse of his bank.  How did he do it? He ran the company by not talking about numbers but on values and principles from Ayn Rand's system of ethics.

Here are some of the highlights from Mark Hemingway's article Objectivist Philosophy for Fun and Profit of NRO

The fact that BB&T didn’t dive head-first into the shallow pool of subprime mortgages certainly goes a long way toward explaining the relative health of BB&T as an institution. But how was BB&T able to resist chasing after all that new mortgage money?

The answer is simple: Subprime mortgages were bad for the people who took them out. That went against BB&T’s philosophy — not for reasons of altruism but because it would have been poor strategy. “We’re obviously a for-profit company, but we don’t think that it’s good business in the long term to do bad things to your clients, even if you make a profit doing it,” Allison said. “So we chose not to do negative-amortization mortgages because we knew it was going to get a lot of people in financial trouble.”
Apparently Allison became interested in Rand in the 1960's through his interest in economics and then onto finance, he saw the banking system as central to a capitalist economy. Part of BB&T's philosophy of the bank is that all employees are required to read "Atlas Shrugged". He goes on to say

Allison calls it “the best defense of capitalism ever written” and made it required reading at BB&T. Since 2005 the BB&T charitable foundation has given millions of dollars to dozens of universities to establish academic programs devoted to Rand’s philosophy.
Some of the the universities have objected the gift's through its faculty, but Allison says that Rand is misunderstood.

Allison points out that she is misunderstood more often than not. Rand is often viewed as “extreme” because her defenses of capitalism and “rational self-interest” are seen as promoting greed and selfishness. Yet Allison is quick to note that the strong values and ethics that Rand’s philosophy promotes allowed BB&T to steer clear of shortsighted and greed-driven decisions.

“A lot of people miss the fact that Rand has a very strong ethical system,” he observes. “Rand says you can derive ethics from reality. If anything, Rand is more rigorous in her ethical system than most codes are. If you’re dishonest, you are disconnected from reality, and that has consequences.”
A lot of people attack Rand's philosophy on its lack of altruism and that people misunderstand her to be selfish. Allison says that it was misled atrusim that got all the banks into this mess in the first place.

Allison has no problem identifying whose economic philosophy was flawed. “I think that government policy is the primary cause” of the financial crisis, he says. “Government policy set up the problems we have in the real-estate market, and it is the Big Kahuna in the room.”
He travels around the country giving presentation on the subject, and one of the things he singles out is the philosophy of the government policy-makers.

In particular, he relates the following anecdote about Rep. Barney Frank, chairman of the House Financial Services Committee, who had portrayed a lack of housing as the source of all evil: “I had an interesting conversation with Barney Frank — he’s the bad guy in my opinion because he’s a very smart guy. I said to Mr. Frank, ‘Housing’s a good thing, but if it’s so good as you describe without any kind of constraints, the next time someone commits a crime instead of putting them in jail, why don’t we give them a house?’”
Needless to say I think capitalism needs to be defended and that reading Atlas Shrugged myself, it has opened my eyes more than once in the last few months. I would suggest anyone who hasn't read the book and have always wanted to, start reading it this weekend. It is never a bad time to read it, but with everything going on everyday with our economy and government it should be read, or re-read. If you think its irrelevant nowadays just check out all the conversation going on.

Have a great weekend!