Purchasing a Diamond Engagement Ring: Part I

Over the rest of the week I will be posting a three part series about my process from start to finish on purchasing an engagement diamond ring. This is part one of three so check back on Wednesday and Thursday.

Recently I got engaged to my girlfriend while we were on vacation, but before all the fun stuff happened I had to go through the process every man SHOULD and WANT to go through. That is, picking out that perfect diamond for the person you are going to be with the rest of your life.

Here are some pretty interesting facts about these little beauties before I get into my process.

A diamond is the allotrope of carbon where the carbon atoms are arranged in an isometric-hexoctahedral crystal lattice. WHAT?

The word comes from the Greek word "adamas," and this means "unconquerable and indestructible."

Diamonds in fact don’t last forever, but “only” several million years before they disintegrate.

To produce a single one-carat diamond, 250 tons of earth will be mined. 

A diamond has very high melting point of 3820 K (3547 °C / 6420 °F) and a boiling point of 5100 K (4827 °C / 8720 °F).

The diamond is the hardest natural substance found on the earth.

So no matter what advertisers say that make people want to go out and spend a lot of money on a Diamond, you must admit that it is a pretty kick A$$ mineral! And who deserves it more than the person you love most on earth. I think finding the right Diamond, big or small, expensive or inexpensive is sort of like picking a pet if you have been through the process. You kinda pick each other once you come across the one you know its right, even though it might take some time.

I will share my experience with you, only as how I picked out the perfect diamond...for my fiancé. It might not be the perfect diamond for you or for that someone special in your life, but take my experience and learn, build, and let it inspire you.

As an introduction to where my journey began, I heard numerous times that I needed to talk with my girlfriend and figure out what she wanted and that we should go look together. I knew my girlfriend enough without ever talking about it that she would want me to pick the diamond ring out for her and surprise her. I did ask here mother and her sister and neither of them knew exactly what she wanted. She admitted after that she didn't know anything about diamonds and frankly didn't want to be apart of it. Personally, I wanted to pick the diamond and since I'm never going wear it or anything it made me take a lot of pride in picking it out instead of just paying for it.

Some guys will definitely want to go with their girlfriends to look or they might at least want to know what she is looking for, but do not feel the pressure if you think she wants you to pick it out. Tomorrow I will be talking about my process with going into the store and actually looking at diamonds and purchasing the one.

Do you have suggestions for others? Leave a comment!

eWallet - One of my favorite iPhone apps

eWallat was one of the first applications that I purchased for my iPhone. I always wanted to keep my passwords, account information, security questions, etc...somewhere that I could always have them and be secured. This is the perfect application for those who have a ton of different accounts who want different passwords without having to remember all of them. I would say that I use it at least every other day. 

With this app you can: from their website

Store Your Information Securely: Using extremely secure 256-bit AES encryption, eWallet protects your personal information from falling into the wrong hands.

Never Forget Another Password: eWallet remembers your passwords so you don't have to. Now you can use strong passwords that can't be guessed or cracked for your online finances, plus the convenience of having all the passwords you need with you, all the time.

Use Your Data Anywhere: Easily synchronize your wallets between your iPhone or iPod touch and a WiFi connected Windows PC. Keep all your important info up-to-date wherever you are!

Personalize Your Wallet: Your info can be as personal as your playlists. Get the look – and the info - you want with custom icons, card backgrounds, and over 30 pre-built card templates. 

At a price of $9.99, it might seem expensive, but it is like having an exact electronic copy of my wallet. (hence the name eWallet) For me it is hard to keep up with so many passwords and its way easier than carrying around a hard copy, like a little notebook or something. Plus if you were to lose the hard copy it is not password protected like eWallet. So if I am at work or traveling and I try and access one of my accounts but don’t have the information, I simple log onto eWallet and its all right there.

I am pretty tight with my money when it comes to purchasing apps for the iPhone but this one I have to say is well worth the money. It is a nice feeling to know that you have all your account information with you at all times. I am waiting for the eWallet desktop app for my MAC.

If anyone else has any apps that are a must please leave comments and share your suggestions.

Robin Hood, the Foulest of Creatures?

It's time for another quote of the week, I usually try and post these on Tuesdays but I have been playing catch up this week.

So I have reached the Atlantis in Atlas Shrugged but I want to go back to a part of the noval that I had booked marked. This part only seems fitting since this week was Tax week. This great part of Atlas Shrugged is when Hank Rearden is talking to Ragnar Danneskjöld. 

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

“I’ve chosen a special mission of my own. I’m after a man whom I want to destroy. He died many centuries ago, but until the last trace of him is wiped out of men’s minds, we will not have a decent world to live in.”
Hank Rearden: “What man?”
Danneskjold: “Robin Hood.”

Hank Rearden doesn't really know what he means and Dannesjold goes in and explains the horror which Robin Hood immortalizes as an ideal of righteousness.

He is remembered, not as a champion of property, but as a champion of need, not as a defender of the robbed, but as a provider of the poor. He is held to be the first man who assumed a halo of virtue by practicing charity with wealth which he did not own, by giving away goods which he had not produced, by making others pay for the luxury of his pity. He is the man who became the symbol of the idea that need, not achievement, is the source of rights, that we don't have to produce, only to want, that the earned does not belong to us, but the unearned does.

It is the foulest of creatures - the double-parasite who lives on the sores of the poor and the blood of the rich-whom men have come to regard as a moral ideal.

Without getting to political, I have to say that some of our politicians today feel that the people who have created an abundance of wealth should pay more for people that haven't created anything but feel the right that they are owed something. Don't believe me? Check out Man vs Debt's article about some of his lesson learned while preparing taxes this season.

Have a great weekend! I am headed to the beach to surf this weekend so I am really excited! Hope yours is good as mine!

Should you calculate a diamond in your net worth?

So recently I bought a diamond ring for my girlfriend. I have been wondering once we get married do I included it in our net worth? I honestly don't want to because I feel it is not a true value of our net worth. I plan on never selling it and pray that nothing ever comes to that point, but I just don't see counting it unless I someday planned on liquidating it. 

I did some research online a see what you should add  and found this over at Money & Happiness here is an excerpt from here net worth article

"Next, imagine you have decided to sail around the world and liquidate everything you own, from the high-definition television on the wall to your four-carat diamond ring. You should ballpark everything..."

I am sorry but I just don't feel like this is real assessment for my net worth, I don't like to account for my vehicle either. I just feel like its not making me wealthier? I will add my home value one day when we eventually own because we are building equity. A Home can gain value and lose value but a automobile just seems to always decrease in value, it is not a investment. 

Does anyone else seem to think that I am in the wrong here and that I should be adding up jewelry and auto with my net worth? I am counting my automobile debt, and I am counting the debt for the ring (12 month 0% APR before someone gets made at me).

Please let me know so I can figure this out!

For more information about my net worth click here.

My Money Shrugged has a new tagline!

So I have signed up for the 31 Days to Build a Better Blog Challenge over at Problogger. I am a little late starting this because of vacation, but one thing that stood out to me is having a tagline for your blog. I have always known what my blog was about when I started but never thought about writing a tagline for people who didn't feel like reading the about me section of my blog. You might have recognized in the header of my blog but if you haven't, the tagline is -

Holding a budget in punishment for waging war against debt

This comes from the title of my blog My Money Shrugged which was inspired by my reading of Atlas Shrugged.  The novel's title is a reference to the mythical Greek titan Atlas, who in the novel is said to hold the weight of the world on his shoulders (as recorded in Hesiod's Theogony, Atlas holds the sky in punishement for waging war against Zeus). So there you see the inspiration for the title and the tagline for this blog. To find out more about this blog read here.

Also I have sign up for twitter so if you would like to follow me @ twitter.com/mymoneyshrugged 

Movie Review: I.O.U.S.A

Knowing I had a long flight out to Los Angeles last week for vacation, I decided to watch a movie a friend recommended to me a couple months ago: I.O.U.S.A. - One Nation. Under Stress. In Debt. I highly recommend watching the movie in whole as compared to the 30 min byte sized one on their home page. Everyone should watch this movie and realize how scary the facts are about how much debt individuals and our US government are in. 

I believe that all of us who are personal finance bloggers know how serious debt is. We know that with being debt free we start to create wealth for ourselves and family. It is a shame for our government not to be run the way a business is to be successful. If a business or individual goes into debt they start being enslaved by it. Every time they get money flowing in, they turn around and send it right back out and eventually if they cannot save more than they are consuming the only option is to fail and go bankrupt.

I.O.U.S.A. goes into great details about our 4 main deficits - Budget, Savings, Leadership and Trade. The mixture of the four deficits creates a toxic mix that threatens our country and our families future.  They use a lot of animated charts and graphs to explain all of these areas which makes it a whole lot easier to understand. At least for me since I am a visual learner.

Here is the byte size version but like I said earlier I would watch the full movie

Here is just one of the examples of trade deficit using Warren Buffet's parable Squanderville vs Thriftville.

For more information here are some more links.

I.O.U.S.A. The Movie

The Real National Debt

National Debt Clock Runs Out of Digits

Owen and Payne

Vacation's Over but Life is Just Beginning!

So we are back from our vacation in California and have had a blast. We probably over extended ourselves a little and my budget is not going to look pretty this month, but its all worth it because we just got engaged! We (the fiancé and me) will both be doing double time on not spending any extra money this next month so that we can keep our budgets in tact. 

So I will have some new post in the upcoming months about buying a Diamond for the first time, combining finances, marriage budgets, and other post that fall into these categories. We are also looking to purchase a home this year before the first time home buyer tax credit expires.

If anyone has some good advice or suggestions for us please let us know...I have bookmarked a few blog post other bloggers have written on some of their experiences and will post some in the future. Any advice or tips would be great because after all, this is a blog that I started not only to start a conversation with others but to help me out with finances in different stages of my life.

I am also hoping to get up and running a little better with postings, right now I am at about 3-4 post per week but want to see if I can make it at least 5 post a week. Please keep posting comments and please give me all of your feedback!

March 09 Net Worth Update: Credit Bad, Emergency Fund Good!

Once again it is time to go over my net worth. My monthly reminder of how I am doing with my finances. Everything seems to be the same except one category...DEBT!!! Actually it is not that bad once I break it down for you guys. At least the stock market is doing a little better than they have, even though my Stocks/Brokerage still seems to be losing some money. With this vacation I am going to go ahead and guess that next month net worth will be down also but we will see. Here is the break down:

Cash saving is up slightly I just keep cracking the whip on myself to keep saving up as much as possible. This has the 10k of my emergency fund, along with my monthly budget. It also has different funds like car, vacation, etc... It also has a house down payment fund which is the next goal I am setting for myself finically. 

Stocks/ Brokerage - I now know why they call it a brokerage, because its going broke every month...ha.

Retirement 401k - There you go...starting to see an uptick in the market, its nice to see it going up for once, I never really followed my 401k until about 4-5 months ago so I never really knew how it felt to be making money over a month. I just knew that watching it lose money every month isn't much fun.

Roth IRA - See previous

Debts and Liabilities - Ouch! This one is going to hurt, but just a little

Credit Card - 1) $935.00 is on my AMEX for my vacation(hotels and rental cars) which I get miles and I will be paying this in full before I get charged interest.

Credit Card - 2) $4200.00 this is a new card I just opened 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 - I want to put more down against the principle but its just not adding up after putting money away for a down payment for a house.  I currently have 4.2% APR so at least it is not killing my wealth but so much. I would love to do it but I am looking to purchase a house close to the end of the year so I can get the first time home buyer tax credit.

Overall - I am still pretty happy with where I am sitting right now, I have to keep myself honest and hopefully knock down some of this debt down. I have a lot of changes coming down the pipeline this year that I already know of, and of course there can always be unexpected situations that come up that you are not planning for. So, I am going to be thankful for where I am finically that this point in my life and hopefully it will remain getting better month by month. Remember the old elementary song, inch by inch, row by row, I am going to make this garden grow!

Vacation here we come!

Today we are headed to California on vacation for a week. Keep checking back as I am trying to get a couple guest writers from people who have inspired me to work hard and to be smart with money. I wrote a couple of post last night so that I can be posting through next week.

In the meantime, here is 10 Reasons to be a Long-term Bull that I got in my last Edward Jones statement. Here is a link to the whole PDF.

1. The economy is bruised, but it’s not broken. Last year, the value of all goods and services produced in the United States (gross domestic product, or GDP) was $14 trillion. Americans earned $10 trillion in disposable income.

2. It’s not the Great Depression. Though many people like to compare today to the Great Depression, there hasn’t been a run on the banks. There are no widespread bread lines or soup kitchens.

3. Debt/deficits won’t crush the economy. Currently, the deficit is expected to be no higher than 15% – which is the highest since 1943. If you’re concerned that higher taxes may be imposed to pay for higher spending, consider investments that could help reduce future tax payments.

4. 50% drops historically have been an opportunity. 

5. The government continues to support the financial system. While support for banks is controversial (and expensive), it’s designed to prevent the widespread panic and bank runs that occurred during the Great Depression. The Fed will continue to do more to support the credit markets and the economy, entering the market directly when necessary to lower mortgage and other rates if necessary.

6. Stock valuation is compelling. By almost any traditional measure of value, stocks have already priced in a lot of the bad economic news.

7. Inflation is under control. The Fed is keeping a close eye on inflation. However, if inflation does increase from its current level near zero to 2% – 3%, that’s probably a better scenario than deflation, or falling prices, which is a much tougher situation from which to recover.

8. When you feel bad, it can be good. High levels of fear and anxiety, which is often seen after the market has done most of its damage.

9. Good performance often follows bad. There have been only three negative 10-year periods since 1926, but the 10 years ended Dec. 31, 2008, were the worst (-1.4% per year). However, historically, good years have often followed bad ones. In each of the 12 10-year periods following those 10-year periods when market returns were less than 6%, the returns have averaged about 13%.

10. You still have long-term goals you are trying to achieve. A $100 investment that has fallen to $60 has lost 40%, but that investment must now rise 66% to break even. This can be difficult to achieve if the money is no longer invested.

Have a great weekend and even better week!

How will you spend your 10$ Tax Credit?

The "Making Work Pay'' tax credit, which amounts to around $10 a paycheck, took effect Wednesday, as part of the economic recovery package that Congress passed in February. This is a different form of stimulus than the one the last administration gave , which was all one lump sum. Individuals making less than 75k are eligible for the full credit and those making 95k get a reduced rate. Couples making 150k get full credit compared with couples making 190k.

Last year when I received my stimulus check I deposited it right into my money market account. I'm sorry I didn't need to purchase anything at that moment and thats the only reason I would use it. I could have easily gone out an purchased a brand new surfboard and loved the feeling, but I did not need one I have enough boards already. So I'm sure I did not help jump start a failing economy then and I will not be spending it now just because I see it in my paycheck.

When I moved back east I received a pay increase with a decrease in the standard of living. When I moved, I kept the budget I had in California as not having a pay raise. I used the same amount that I used to live off of out there, to live here . I had an extra amount coming in from my raise and I decided for it to be deposited into my money market and that I wouldn't ever feel the effects of it being in my primary bank account. Not only that, but I found out that I could cut the fat out of my budget and live more than fine.

Everyone has heard the more money you make, the more problems you have. In reality, it is not actually the money that is the problem, but it is the amount that you spend because you are now making more.  So if I receive $10 or $1000 I am am going to keep my lifestyle and spending the same(I must admit I live pretty good). Now if I have a kid or something that forces me to adjust my lifestyle then I will adjust my budget as well, but I will not allow money to dictate my lifestyle. (may I say,not at the current moment, ha!)

So what am I going to be doing with the few extra dollars that I get...I am going to stimulate my wealth and spend my hard earned, hard saved money on something I really want when I want. Not just because I see a bigger paycheck. So what are you going to do with the $10 Tax Credit, let me know in your comments!

Production is not private choice, but a public duty

Every Tuesday I like to use a quote or excerpt from Atlas Shrugged, espically since I read something and the next day on the news I here our government saying the same thing. Its funny how this book is being played out right before our eyes. This latest passage is from chapter VI - Miracle Metal.

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

"that in the twelve-month period ending on the first day of this year, the rate of business failures has doubled, as compared with the proceeding twelve-month period. Since the first of this year, it has trebled."

"Be sure they think it's their own fault," "Whatever you do, don't apologize," said Dr. Ferris. "Make them feel guilty."

"I'm not apologizing!" snapped Mouch. "I am not to blame. I need wider power."

"But it is their own fault," said Eugene Lawson, turning aggressively to Dr. Ferris. "It's their lack of social spirit. They refuse to recognize that production is not a private choice, but a public duty. They have no right to fail, no matter what conditions happen to come up. They've got to go on producing. It's social imperative. A man's work is not a personal matter-or a personal life. That's what we've got to force them to learn."

"They have no right to fail, no matter what conditions happen to come up. They've got to go on producing." Isn't that what is happening to the auto industry? Haven't we all heard that we cannot allow GM to go bankrupt or go out of business? That so many people would lose their jobs? Isn't it what they(our government) are saying that it's social imperative that GM/Chrysler stay in business? see @ 2:15.

Have a good great day! Let me know your thoughts on this?

It's the money you could be making!

I just finished up my federal taxes yesterday and I am getting back $140.00. I am super glad that is all that I am getting back. Why, because I have adjusted my IRS withholding to make interest on the money instead of the government. This was the first year that I had changed my withholding on my W-4.

The average tax return in 2008 in the US was $2400.00 that’s $200.00 a month. Lets say you put that $200 per month into an investment (401k, Roth IRA) that makes 6% over ten years. You would make $33,532.00 instead of $24,000.00. You just made yourself $9,532.00 and didn’t have to do anything except go to your HR department fill in the W-2 to the withholding you want. Here is a calculator on the IRA site where you can figure out how much to withhold to reduce your tax refund. Here is a calculator for seeing how much money you could be making if you switched you withholdings. Reminds me of those Geico commercials, hehe don't let it sit with the government to waste but grab it and watch it grow with a least a high yield saving account!

Currently I have about $250.00(tax money) a month going into a money market. I did not touch that money because I wanted to make absolutely sure that I was not going to have to pay the government when I filed taxes for 2008. I probably will not put it an anything right now as I am saving up for a down payment on a house and its still making me a little money on side.

I started out last March with around $300.00 in my emergency fund/tax withholdings. I am currently sitting at around 10k plus I have made close to $150.00 in interest while building my small amount of wealth. Along with the $250.00/month tax money and an extra $140.00/month on top of that, my savings have grown so much over a span of one year. Now this money will stay in the same account and I will be putting the same amount in every month. Since I already have my emergency fund in place this money will be going towards my house down payment along with the $140.00 tax return I am getting back from the government.

I know how good it feels to receive a tax return and boy I surely felt it yesterday when I found out that I am getting back only $140 and my girlfriend is getting back $2000.00. I wanted to have a nice big tax return too but I have to tell myself that I am making more money in the long run. This decision cannot be based of emotions but based on what is wise when it comes to the creation of my wealth.

Taxes, Surcharges, and Fees!

So I am headed to California in April and am starting to book hotels, cars, etc...

We are going to be renting a car and driving up the coast of California for a week. I found the vehicle at the price I wanted and made reservations. Once I got to the purchase page I see that my price had sky rocketed. I went and looked at the pricing and saw the breakdown of taxes, surcharges, and fees.

Airport Concession Fee 11.1 % = 28.62

Los Angeles World Airport Fee $10 = 10.00

Travel and Tourism Fee 2.5% = 6.45

State Sales Tax 8.25% = 23.63

Total = $68.70

This is just renting a car...I might have to calculate all the taxes, surcharges, and fees from my trip(Flight, Car, Hotel, etc...) and see the total of all these. I also have a surfboard that I kept out at a friends in California after I moved. I was going to bring it home with me after this trip. Guess what? If you guessed that there is a fee you were correct, a $175.00 fee to bring my surfboard back. A brand new surfboard cost between $400-$700 so its not worth it to me to bring it back. I will be giving it to a friend in the end.

I love traveling and don't mind flying 4-5 hours for a weekend trip if it was cost effective, but all these fee and surcharges along with tax it just not affordable. My question is do you think in the long run that travel oriented business hurt themselves by adding cost on to the regular price of goods and services? I don't know I am guessing someone is charging these companies and they are just passing along the charges to the consumer?

I would love to stay in a hotel every night out there but we just cannot afford it? I am willing to bet that once I add up all the cost associated with my trip I could have stayed a couple extra nights or brought more business to other hotels, restaurants, etc...

I don't mind spending money for experience and fun things, but it cost so much that we can really only afford one big vacation a year and thats still hard. I would love it if I could take more trips more frequently especially surfing. I can tell you one thing though, I will not be flying Delta to any surf destinations. That is a shame because A) Delta is my airline of choice (Amex and frequent flyer) and b) surfers travel to destinations all over the world. If I was a business I would cater to customers like surfers who spend a lot of their hard earned money every year to travel.

Why in anyones right mind would they want to turn those types of customers away? I know every company has to tax but fees and surcharges can only be hurting business in the long run, no? Let me know what you think?

Dog Eat Dog

So my man J.Money over at Budgets are Sexy had a post the other day about rap. Somehow I got inspired to write about one of my favorite things. My love for Hip-Hop...

So...I was listening to De La Soul "Stakes is High" Album the other night and on came "Dog Eat Dog". Which is an amazing song on an amazing album. If you like hip-hop this is a must have classic.

Don't know why buy It reminded me of the "Anti Dog-Eat-Dog Act" that was in Atlas Shrugged that aims to restrict cut-throat competition between firms and thus slow the wave of business bankruptcies. I mean please tell me I'm Not CRAZY? SOMEONE PLEASE? I think this post spawned from hearing all the AIG shi*t and listening to Music tonight...DONT GET ME STARTED!

Here the lyrics...

It's a dog eat dog competition (no doubt)
I'll be gone like you're wishin (and i'm out)
'Cause i ain't got time
For hangin around
When you're f*@kin' my love
In all the wrong places
It's a dog eat dog competition (no doubt)
I'll be gone like you're wishin (and i'm out)
'Cause i ain't got time
For hangin around
When you're f*@kin' my love
In all the wrong places

Extra, extra
What's that all about?
I'm wishin the position
Of my loving's sorted out
I shed a tear cause i'm hearin'
Nothing new or particular
Status once parallel
Now it's perpendicular
And everything is just as clear as day
Realistically explicit
In the things you say
I guess a "bitch" in the batter's
Gonna make the flavor fatter
But you gots to keep it for real
Forget about your jewels and gems
You won't be needin
None of them
The tool'll fix the era
My mellow used to wear a
Namebuckle, now he chuckle
'Cause he earn a dime Quicker
Talkin bout a burnin'
Sippin on some malt liQuor
And all these kiddies
Wishin they were supa emcees
But to earn my "s"
I had to learn some less
About a crime'll make million
A dime'll make a call
I'd rather hop on the line
And drop a rhyme to prince paul

Cause it's a dog eat dog competition (no doubt)
I'll be gone like you're wishin (and i'm out)
'Cause i ain't got time
For hangin around
When you're f*@kin' my love
In all the wrong places

Hey kid
What's the word?
Man, it's all about mind
Keeping focused
On them self-mechanisms of rhyme
So no longer stand erect
'Cause your thoughts are drained
Walkin' round
Manifesting attributes of shame
Used to sQuabble for the mic
But now accordingly
We act
Unless a club can't afford the fee
We act
So name that any best man
To put us under
Created from the ground
Yet know nothin
'Bout the under
Take a glimpse
At them pimps
Playin record exec
Addin up all your zeros
So's to cut you a check
Saying why the blunder wonder
Could've g'd today
So you can put up some swings
For your seed to play
But a swing ain't that important
When the park's around the corner
Filled with life causing death
Greeting victims for the morning
It was the moment i feared
Nah, the moment i steered
Upon the right path
To know the right math
To over stand

It's a dog eat dog competition (no doubt)
I'll be gone like you're wishin (and i'm out)
'Cause i ain't got time
For hangin around
When you're f*@kin my love
In all the wrong places

Have a great rest of the weekend!

Tax Questions

Which president gave the biggest tax cuts for the rich -- Reagan or Bush?

If there's an imposition of a property tax on your land, who pays the tax?

Which worker receives the higher pay: a worker on a road construction project moving dirt with a shovel or a worker moving dirt atop a giant earthmover?

These are some of the questions Walter Williams ask in in column this week. Walter Williams is a professor at Gorge Mason University and his syndicated column is one that I read weekly and definitely one of my favorite. I seem to learn so much by reading his column every week. He goes on to answer those questions at the top and has this to say about America's Prosperity.

"It's not rocket science to conclude that whatever lowers the cost of capital formation enables workers to have more capital to work with and enjoy higher wages. Policies that raise the cost of capital formation such as capital gains taxes, low depreciation allowances and high corporate income taxes, and thereby reducing capital formation, serves neither the interests of workers, investors nor consumers."

He also gives an example:

Taxes also reduce transactions. I need my computer repaired. You and I agree that the job is worth $200. Suppose there's the imposition of a 30 percent income tax on you. That means you would net only $140 and might refuse the job. You might suggest that if I were willing to pay you $285 you would do the job because at that price your after-tax earnings will be $200 -- what doing the job is worth to you. There's a problem. The repair job was worth $200 to me, not $285. So it's my turn to say the heck with it, or would we and society be better off if you and I agreed to the repair job but did not tell anybody? I'd say yes, but we'd be criminals.

Taxes are out of hand and the more we get taxed the harder it is for anyone to gain wealth. Here is list of some of the taxes we American's pay.

Accounts Receivable Tax
Building Permit Tax
Capital Gains Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Court Fines (indirect taxes)
Deficit spending
Dog License Tax
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel permit tax
Gasoline Tax
Hunting License Tax
Inflation
Inheritance Tax Interest expense (tax on the money)
Inventory tax IRS Interest Charges (tax on top of tax)
IRS Penalties (tax on top of tax)
Liquor Tax
Local Income Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Property Tax
Real Estate Tax
Septic Permit Tax
Service Charge Taxes
Social Security Tax
Road Usage Taxes (Truckers)
Sales Taxes
Recreational Vehicle Tax
Road Toll Booth Taxes
School Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone federal excise tax
Telephone federal universal service fee tax
Telephone federal, state and local surcharge taxes
Telephone minimum usage surcharge tax
Telephone recurring and non-recurring charges tax
Telephone state and local tax
Telephone usage charge tax
Toll Bridge Taxes
Toll Tunnel Taxes
Traffic Fines (indirect taxation)
Trailer Registration Tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax

Total tax percentage paid by the average US citizen in 2005 is estimated at about 54% when you figure in all the miscellaneous taxes and fees.

I understand that we have to have taxes and I pay mine every year but we need to have more accountability in Washington for the turkeys who are spending our hard earned money and making everyone of us poorer as individuals and as a country. And we need to each have accountability for our own money and not depend on the government so much. Have a great weekend!

So you think that money is the root of all evil?

"Francisco's Money Speech"
by Ayn Rand

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

"But you say that money is made by the strong at the expense of the weak? What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man's capacity to think. Then is money made by the man who invents a motor at the expense of those who did not invent it? Is money made by the intelligent at the expense of the fools? By the able at the expense of the incompetent? By the ambitious at the expense of the lazy? Money is made--before it can be looted or mooched--made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can't consume more than he has produced.' ...Read in entirety

This is perhaps that greatest written speech ever put forth supporting the free market and capitalism. I will never forget reading this laying in bed and not being able to put it down. After reading this I proceeded to lay their contemplating that speech for the next two hours trying to go to sleep but was not able to. Everything I had always thought and felt seeing my father and mother working so hard to have their own successful businesses was achieved by reading this speech from Atlas Shrugged.

I highly suggest everyone one read Atlas Shrugged no matter what your belief is, Ayn Rand was was an incredible writer and philosopher. Reading Atlas Shrugged was one of my 2009 goals for the year since it is so long, but I have not been able to put it down since I started reading it.

Bigger PAYCHECK! Making Work Pay Tax Credit

On the 15th of this month I received my bimonthly paycheck and noticed that it was $22.00 more than last paycheck. Once I got into work today I emailed the lady who does paycheck and asked her what the deal was. She said that it was due to the new wage withholding rates. She mentioned that most employees saw a decrease in federal income tax. I came home and looked it up and found this new withholding table. Even though I believe in the fair tax I am not complaining about getting an additional $528.00 a year. Sense I have a budget and I stick to it it will most likely not be going back in the economy but I came across this article and actually make me feel better for saving.

I am not a fan of the American Recovery and Reinvestment Act of 2009 that became law earlier this year but I am sure as hell not going to be giving it back to the government. It says on the site that the Making Work Pay Tax Credit will mean $400 to $800 for many Americans. Did anyone else receive this...let me know!

401k vs Roth IRA - Round 2

So today I finally looked into what my best option was for either putting money into my company 401k or Roth IRA. I went and did some research on my companies HR site and found out that they are only matching up to 5% and not monthly but at the end of the year.

I'm not sure they will match until later but dont want to miss out if they decide to this year. I am currently putting in 8%, so this knock-down drag out fight still looks to be a draw. I dropped my contributions back to 5% and hopefully the company will match at the end of the year. In the meantime I will put the extra 3% in with my monthly contributions to my Roth. At the end of the day I still think this is the best decision and hopefully this will get me closer to my 2009 goal of maxing out my Roth. I also have my fingers crossed that the economy will turn around and will get my 5% matched come years end.

Atlas Shrugged

"We are breaking up the vicious tyranny of economic power. We will set men free of the rule of the dollar. We will release our spiritual aims from dependence on the owners of material means. We will liberate our culture from the stranglehold of the profit-chasers."

Sound Familiar? Being a Profit-Chaser in these days is looked down on.

Does my adviser have my best interest in mind?

So my adviser calls me the other day and tells me that with my Roth IRA they are getting rid of the Capital World Growth & Income CI B Fund that I am currently contributing to. He then proceeds to ask me if I would like to replace it with the A Fund which is a front load of 5.57% or if I would like the C fund that has no upfront cost but a yearly fee of 0.75%. I asked him which he recommended. He advised me if I was going to keep in it long term to go with the front load, so I should put it in the A Fund...I took him at his word.

I started to think if it was the right decision and did some calculations. I am currently putting in 100.00 a month(setting aside another hundred/per month for investments) and with the front load of 5.75%, about $94.25 goes into the fund? I thought IM PAYING ALMOST 6% UP FRONT? The fund would have to make 6%+ for me to break even? To me that doesn’t make much sense? Especially now that I am losing 10-20% month. I will be checking these funds and I am not planning to keep for the long haul so the upfront load would be a bad investment.

I am currently looking into opening another Roth IRA with a no-load fund and no fee where I can invest and build a portfolio of low cost, diversified funds. I mean in the end I can do all this investing myself with a little research without the yearly fee to the advisor?

My 10 favorite wines for under 10 dollars

If you love wine like myself, you are always going into the wine section at the grocery store and looking for the wines that are on sale to purchase. Working with a wine brand I usually look for wine on the 3rd shelf based off of knowing that they want to be on the 3rd shelf. If you don’t know, stores put the ratings of the wine from top to bottom with top shelf being the most expensive and the better wines. The cheaper lower rating wine are put down towards the bottom. Most of these wines sit on the third shelf depending on where you buy your wine. I am not a wine snob, but I have foud these to be much nicer than a bottle of yellow tail which seems to be the masses choice for inexpensive wine. Well I have compiled my fovorite best 10 wines for under 10 dollars.

1. Big Red Monster

2. Ravenswood Zinfandel

3. Robert Mondavi Private Selection Sauvignon Blanc

4. Castello di Gabbiano Chianti

5. Beaulieu Vineyard Bv Cabernet Sauvignon Coastal

6.Salneval Albariño

7. Francis Coppola / Niebaum-Coppola Merlot Diamond Collection Blue

8. Fat bastard Cabernet Sauvignon

9. Voga Quattro

10. Chateau Ste. Michelle Riesling

Do you have any favorite wines for under 10 dollars? Let me know as I am always looking for a good wine to go with a nice dinner!.Leave your comments!

The Weekly Round Up

J. Money is charging himself $1.00 for every complaint
MyMoneyBlog as a great write-up for first time home buyers
Nickel ask the question "why don't young people care about finances?"
Golguru has something to say about American's saving their money

Addicted to watching my money grow

I used to enjoy spending my money when I would receive my paycheck. I graduated college and moved out to California without a job. It took me a couple of months to find a job that I didn’t like, but it was a job and my money was going fast. It wasn’t a high paying job and I still had to really budget and did not have much left over. I was still looking for a job that a) I enjoyed and b) one I could live more comfortably. Well 911 hit and the job market just died, there were no jobs in graphic design or advertising. So I stuck it out and then moved on to a start-up and was getting paid even less. I worked hard to get this company off the ground but that too fell short. Two years later I finally got a job that I felt I deserved and had the extra money for some extra material objects.

The reason for the story is that when I finally got a little bit of money, my mind set was that I had been working hard for 4 years out of college and could not afford a Gatorade after playing basketball. So it was time for me to reward myself…I didn’t need material things to show people I made money or anything like that. I just really enjoyed being able to spend freely since I had been so tight the past few years. That mentality stayed with me until about 29.Now I am somewhat behind the game instead of being ahead of the game because of this mentality. Granted I didn’t do anything stupid so I am still ok with no debt and a emergency fund.

I have to say though that looking at my bank statement, retirement, 401k, etc…I feel a sense of pride and hard work for making the commitment now, to one day becoming wealthy. Not the kind that drives BMW’s (even though that would be nice!) but one that is not controlled by what bill is coming in next and if I am going to have enough to last me till my next paycheck.

I feel like I do when I exercise, if I work out really hard and take care of myself I never have the desire to eat badly. It just seems silly to work hard for something and then and go ruin it by buying something you don’t need or going to eat a burger and fries. It is addicting to watch your money grow and that’s why you should check you accounts regularly. A plant doesn’t grow overnight and same with your wealth. You have to take care of it everyday so that it grows how you want it to.

Online Trading Account - Adult Gambling?

Do you like to gamble? Living out in Los Angeles I saw a lot of people spend money and credit like it was going out of style. Part of living in Southern California was a lifestyle to go to Las Vegas (4hr drive or 45min flight) every quarter or so during the year. This again was during the boom where everything was going good in the economy. I have seen friends drop thousands of dollars while being drunk and spending their hard earned money. They might as well have been throwing money out the window on their way there.

I for one spent my fair share of money in Vegas too…and have to admit I enjoyed every minute of it. My friends and I had an on going joke with me every time we went to vegas. One night we were out and a friend turned to me on the way to the next casino and asked how much I was up. I told him 85 and he looked at me knowing I was not a huge gambler and said “Damn go ahead with your bad self”. I immediately stated that I was up 85 cents from playing the 25 cent poker at the bars. We all had a good laugh.

Now once again I am not a big gambler with my money but I will gamble if my fun vs time/money ratio is worth it. I rate this ratio based on if I spend $100.00 for 4 hours on blackjack- was my time worth it -$25/hr – I would say in Vegas $25/hr is about right for me which is why Vegas is rich and everyone else is not.

I am a huge sports fan and I enjoying watching sports. I got put onto sportsbook ,which is an online gambling service. You have to put money into the account before you can bet, so you cannot put a credit card down and go to town. I usually put $50.00 in and take the minimum($5.00)bets and put it on a Basketball or football game I am going to watch. I have to say it makes the game have more of an interest. I know I will probably get killed by a lot of PF bloggers about this, but it is something I like and it last 1/2 year?(unless I go on a cold streak) What can I say…I don’t do it make money but for entertainment value, is the $5.00 worth the 2hrs?, no doubt!!

So I have a friend who works really hard and makes a really good living. He seems very informed with finances, and makes more than he probably imagined he would at this point in his life. I recently visited him and asked if he is still gambling on sportsbook and he mentioned that he had graduated from it. He was putting a lot more money down, lets say $25-50 per game. He said he was gambling on the stock market and that he opened up a Sharebuilder account. He has about 4-5% of is paycheck going in that money market account where if he comes across a stock he likes or reads an article he will go in and buy some shares. He looked at me and said “its adult gambling son”…I got a good laugh.

But is he on to something? I know a lot of people will disagree, but both my friend and myself have high risk tolerances. Who doesn’t like buying stock when the prices are so low too. He told me straight up that he enjoyed watching his “play money”. He also is using it to learn about stocks and reading more about them and paying more attention to it. I know they say don’t spend your money trying to learn to play the stock market but instead learn the stock market and then play it.

First off I don't have that kind of money...so I am not doing it. That night as I was talking with him about it, he was in front of his computer and went and bought a few hundred dollars in a company stock. When we woke up the next day (PST) it had already lost 4%...he looked at me and laughed! Might seem like he is dumb with his money but after all can we live just a little?

Bribing an Adult Kid

So I was reading in Money magazine this article about how to bribe a adult kid who is unenthusiastic about having a job and living at home. The goals are “to get him off his butt and into a job, and to get him to move out”

They mention a MIT economist that said that bribery works best when there are two parties involved. Suggesting that you offer the “Adult kid”,$50 for every $100 he earns at his job, citing it encourages success, not failure? It goes on to say that “IF” your child prospers, that the co-payment will help him make the rent on his own apartment and goes as far to suggest the parents putting down the rental deposit if the kid moves out.

I don't know if I agree with some of the authors solutions. I would think that teaching these “Adult Kids” actually how to manage their money and give them a sense of responsibility would be a better way of handing this. If one day, I have a child that doesn't have an ambition to make a living and get out on his own these would be a few of the steps that I will take.

• I would let them know the rules of the house and tell them if they didn't take it seriously that they would have to go mooch off a friend or another relative.
• I would show them tough love by being harder than any landlord they would ever have. They would have to respect the rules of my house. This gives them incentive to move out, not paying them…that's still free money at the end of the day.
• They would be responsible for paying rent to me and making sure it was paid in full on the first of each month. No five day grace period here…the first or late fee added.
• He would still have chores around the house and he wouldn't get paid(let's say home owners fees). Once again if they got out on their own they would not have to worry about this they could do what they wanted and I wouldn't say anything to them because they are an adult.
• They would pitch in for bills, food, or any other expense the household needs.
• I would give them their own space…probably their room and would not bother them, after all they are renting that space in my house. But they would not be sprawled out on the couch when I come home or feel like the whole house is theirs for whatever.

This wouldn't be me just being mean, I would sit down with them and figure out a game plan to get their budget, finances in order to move out. I would help them in anyway they would need to move to that next chapter in their life. Remember that I plan on paying for his/her full college tuition, allowance, except the summers, for four to four and half years. Which at that point I will have very high expectations from them and in return, want them to have high expectations to the point they will not want to move in unless they have to.

Once they decide to pick up and move out on their own, I would help them get established and the very last thing I will do is give them back all the money that they have been paying me for rent, bills and etc…back to them as a starting point. (I would put all that money that they were paying me in a high-yield savings account.) This would teach them responsibility and its still rewarding them but without them knowing.

Small Lesson about Credit Cards

I was fortunate enough to have parents that paid for my college, and gave me an allowance every month during my college years. I didn’t have an open bank account with endless amount of money, but enough to Pay rent, bills, food, and just enough to party more than I needed to. I had a credit card with a $1000.00 limit (was my first) that was for books, supplies, and emergencies. These were given to me by my parents to teach me about responsibility with money. They never mentioned bailing me out if I didn’t use the money for other things beside bills or if I ran up my credit card. My father told me that he would have the credit card bill come to him and he would pay for the things he outlined for me.

One of the first small lessons I learned was running up a credit card. I spend my first semester putting only books and supplies on the credit card. Second semester rolled around and I was sick of eating cafeteria food and realized that restaurants took credit cards. I started off just once a week then next thing I was eating out and using the credit card more than I should. My father wasn’t saying anything so I started using even more. I came home one weekend when dad and me had a sit down. He showed me the credit card bill and had highlighted the items he paid for (ones he promised to pay) and non-highlighted items that were all fast food and stuff he hadn’t promised to pay for. The total bill from the credit card had added up to $500.00!!! I turned to him and said sorry and I wouldn’t use it again for stuff I didn’t need. He looked at me said “I hope so because at this point you are in charge of paying the bill” and that he would write me a check for the things I need for school. How, why, I cant believe my dad set me up! I don’t have $500 sitting around? Well…2 years later, I finally paid off that $500.00.

I learned a lot that day my father sat me down and handed the credit card bill over to me. I couldn’t spend whenever I wanted…I think my dad was on to something knowing that I couldn’t get into to much trouble with $500 debt…I mean he gave me enough to live on and I could have paid if I wanted to budget my money. Unfortunately, I just didn’t. The lesson I learned was that if you don’t know what your spending next thing you know you can be in a lot of trouble with debt. He was willing to let me make a mistake to learn from it. I thank him for that lesson now.

February 09 Net Worth Update: Emergency Fund here I come!

This is the third month that I have been keeping up with my Net Worth and its feeling good. I think punching these numbers every month are one of the most rewarding part of budgeting and saving. This is the one day of celebration of looking back and seeing a job well done. None of this budgeting and saving would be worth it if you cant sit back and look at your wealth start to accumulate. I used to get a lot of enjoyment out of working hard and going out and spending my hard earned money. Now, my enjoyment is working hard and putting in the numbers and seeing my money growing. Well besides my 401k and Roth IRA which are getting pounded but this is a long term investment and I have faith that one day it will be back up.

Here is the breakdown:

Cash Savings: this is a big jump in saving of $1557.23. Within this cash saving I am currently saving an emergency fund that is at about $9,537.23 which is in a money market account. The other is starting to go towards a house down payment and other month to month bills and living expenses.

Stocks/Brokerage: took a bit of a dip this month. Most of this is wrapped up in stock from a past employer. Its from a employee stock option plan that I was able to buy the stock at a 15% discount and I was really sitting good about a year ago. The stock itself has gone down more than 45% so at this point I think I am going to wait it out. I have just a small amount into a sharebuilder account with some quicksilver stock (ZQK).

Retirement 401k: continues to take a dip…I currently have one 401k with my old company that I haven’t rolled over yet which is taking a huge hit (-13.82%) $12,188. My other 401k with my new company is actually doing pretty well (+39.00%) $3,046.00.Retirement Roth IRA is down (-14.67%) to $3507.00 but I remain putting money into it. I feel like in the long run that this will be one of my best investments. I am currently trying to figure out how to put the $5,000.00 MAX in this year.

Credit Cards: $404.80 – this is just there because of flights I booked for our trip out to California in April, these will be paid off before interest is applied. I use credit cards for flights, big purchases or anything I need a warranty for. (since credit cards covers extended warranties)

Car Loan: Starting to think about putting more towards the minimal payment.

So I just keep rolling along and waiting for this market to turn around and get my retirement headed in the right instead of the wrong direction.

The showdown 401k vs Roth IRA?

Recently my company cut back on matching my 401k while the economy is upside down. I feel like I am at a bout (temporarily) with investing in my retirement…which one of these is the strongest investment at this current time.

Currently I am putting around 8% of my pay check into my 401k which is actually not losing money at the moment. It will come out to about $6160.08 at the end of the year. This money is also pre-taxed and by making pre-tax contributions, I am lowering my current taxable income.

With my Roth IRA which is after tax contributions, I am currently putting away $200.00/month = $2400.00/year with the limit on the Roth capped at $5000.00.

I am trying to figure out which should win this round? Maybe cut back 2% on my 401k which would put an additional $1540.00 in my Roth for a total of $3940.00/year and making my 401k total to $4620.00/year.

I know once my company starts matching again that I will bump it back up. During the meantime do I add more to my Roth or keep everything where it's at? I will keep you posted I need to do some more research. Please leave feedback!

Reaching Goals

I remember receiving my Tax return last year and thinking to myself that I did not need a new TV, surfboard, or any other materialistic object. Even though it hurt hearing about other peoples purchases. The years before I had received my check from the IRS and had decided to open a Roth IRA with the return so I was used to not spending it as soon as I got. Last years check came about this time and I could have added to the Roth but I decided I needed to have some cash to sit on.

At this point I had no idea that the economy was about to go through such a severe recession. So I opened up a money market account which at the time was paying out about 4% yield which is down 2.70%. I have been putting $390.00 every paycheck which is twice a month into this money market which at the moment is serving as my emergency fund. It is also auto drafted out of my paycheck so i have no temptation to spend it.

I have set a goal of around $10,000 for my emergency fund and I am so glad right now I decided to do so. You never know what could happen and it feels good being able to see that if something where to happen with my job I would not be hurting as much as if I didn't have one in place. I am one or two paychecks away from reaching one of my first financial goals I have set out for myself and it feels really good. I will move on to my other goals I have set and start to knock them off next.

I must say that all this personal finance starts with setting goals and reaching everyday to accomplish them. It will be a great feeling when I see that money sitting there waiting for a storm to come. I have been blessed and never been through a financial storm and I hope I never will, but if I do, I will be at least somewhat prepared.

About My Money Shrugged

My Money Shrugged is a journey with my personal finances, life and my future. I am a 31 year old living in North Carolina. The name is inspired by a book I am currently reading "Atlas Shrugged" by Ayn Rand. This blog is where personal fiance meets Atlas Shrugged. The theme of Atlas Shrugged is the role of the mind in man's life and, consequently, presentation of a new morality: the morality of rational self-interest. My self interest in creating this blog is my personal finances and so it is a nod to the book.

I recently moved from Los Angeles to the east coast to start a better life for myself. Not that I wasn't having fun or anything, but I was not able to live within my means and was constantly living pay check to paycheck. I was investing in a 401k, employee stock option plan, and whatever was left over I was adding to my Roth IRA but was never able to save up and emergency fund or for anything else.

Once I moved back east I finally for the first time, had money and had no idea what to do with it. First thing I decided to do was to build a budget. Unfortunately for me I had never really created one so I searched and found a ton of personal finance blogs. With a little research I found people blogging about the same situation that I was in. I created a detailed budget and was amazed at how much I could save and really wouldn't have to sacrifice that much with the way I live. (I could have saved money in LA if I had just sat down and create a budget for myself). And this is how I got into the whole PF blogging and been throwing around the idea of starting my own blog to keep me on track with my spending and budgeting.

Some of my goals and some of the purpose of creating this blog is to track and keep myself honest about my personal finances and to track my progress of one day owning a house that is affordable. I have been double timing it to save up an emergency fund that would last me 6 months if something was to happen in this economy. I have also been working to max out my Roth IRA for the first time this year and along all this saving up as much as I can for a 20% down payment for a house.

Some of my personal interests are GOD, my relationship with my awesome girlfriend and family, surfing, cooking, any sports, art, advertising, and music, all which inspire me everyday that I am blessed to be here!

I can promise you that I don't know everything about finances and please take my words only as inspiration, motivation or anything else that might help with your own personal situation.

Please feel free to leave comments and I would love everyone's opinions on the way I am handling my finances because after all this is here ONLY to keep you and me motivated and to keep my finances in check.

I am sure you will find multiple spelling mistakes and not very good english so please skip the comments unless you just want to rant.