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Archive for the ‘Lesson Learned’ category

Five Things I’d Love to Talk to My Friends About That Are Awkward

October 5th, 2007

I have many friends, and for that I count myself blessed, but we generally avoid talking about personal finance (with some exceptions). Why is that? Maybe we’re used to thinking of that as taboo, maybe we’re too embarrassed or maybe we just haven’t gotten around to it yet.

Financial Planning - I don’t talk to most of my friends about financial planning. The concept of discussing the future is absolutely frightening for some people due to their debt level. I don’t know that my friends have that same mindset but many of them don’t appear to have a plan for more than their busy schedules so that there are no collisions. I could be wrong, but I’d love for them to have a plan so that they might have a financially sound lifestyle.
Risk Assessment – I have relatives, friends and acquaintances that are unaware of the risks they’re taking. The older you get the higher the risk is for higher risk investments. The chance for recovery on the time line of life gets reduced just by the fact that the higher yielding investments often come with higher risk of turning into money losing investments. I want my friends to learn what is safest for them to be able to do.
Stuff Verses Experience – I’ve just turned thirty and many of my friends that are my age are still in the acquisition stage of life. Stuff creates clutter, stuff doesn’t fulfill, and stuff doesn’t deliver memories except in the sense of looking at the clutter remembering when you didn’t have to organize, move or get rid of it. I want my friends and family to be able to enjoy life and its experiences regardless of the total volume of toys, TVs or trash they’ve acquired.
Debt Elimination – Along with financial planning I want them to be able to have zero debt. This morning I made a major payoff on one of my credit cards. I should be able to do a balance transfer from another card and get rid of one. I want my friends, young and old, to recognize that credit cards are not free money, they don’t bring security, and they don’t extend your lifestyle without cutting out from your lifestyle next month or next year.
Retirement Preparation – There are few things quite as disheartening as watching people you know flounder in a see of financial mediocrity and see them face an uncertain future. In the United States our ‘Social Security’ program is hardly secure. Our congress has been foolish and spent the money on other things and I’m certainly not convinced that it will be there in a few years. I want my friends to be able to live lives that are full and have the opportunity to leave an inheritance for their grandchildren.

I think I’m done pussyfooting my way around finances with my friends. As I evaluate the list above none of those topics have to involve me talking about my income or them talking about their income. None of those topics require me to know more about their actual financial situation than I do now for me to carefully and tactfully bring them up. I love my friends and family and want them to have a financial future they can be excited about, have rest about, and know the potential freedom of their goals. I’m most definitely feeling confident that my discussion of these things can be done with genuine friends and that we’ll both walk away from the conversation having learned a thing or two.

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Posted in General, Lesson Learned, Taboo & Money (religion, sex, and politics)

Financially Focused Friends

October 1st, 2007

At church on Sunday I began talking with a friend who asked, “Do you know who Dave Ramsey is?” And thus the conversation developed as we both shared brief stories of how being financially focused for the last (insert time period here) we had both discovered that we could have financial peace, and then that we could also have financial goals that were sound and methodically possible. The conversation was good because it allowed us to bond at yet another location in our lives. We didn’t have to discuss numbers, but instead a lifestyle of financial responsibility.

The good thing about having financially focused friends is that they’re going to understand when you don’t go out to eat. They’re going to understand when you don’t drop ten grand on a Disney cruise vacation and instead they embrace a frugal lifestyle and understand your long term goals to become independently wealthy independent of the lottery. They’re also great friends to get together with because as both of you discover areas to be frugal you’re more than likely going to be sharing those ideas to help each other achieve your goals faster or more efficiently! You can’t beat that opportunity.

The other area that folks need to consider is that when you have friends that are like minded it may help you to relax in other areas and grow a deeper friendship. A deeper friendship that will stand the test of time, finances and the sucking sound of instant gratification, pop culture and gadgetitis.

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Posted in Foundations, Lesson Learned, Money Management, Taboo & Money (religion, sex, and politics)

Rich as Defined by My Five Year Old

September 23rd, 2007

Change My five year old told me that she was richer than her friend. Rich. I asked her why she thought she was rich and she told me that she had lots and lots of money. Of course her valuation of the various coins she has is probably not right. Each coin counts as one coin – and so if she has four hundred coins then she has four hundred. Not dollars, not cents, just four hundred. I then proceeded to explain to her that wealth is evaluated differently based upon different assets. I have a relative that some would describe as ‘land wealthy’ because the estimated value of his land might be a high dollar amount. I have a friend who has lots of possessions that are worth a lot of money all together.

My daughter’s estimation of being rich and my desire to some day have accumulated some wealth are very, very different scales but the discussion reminds me of the need to teach her about money and personal finance. If she can start out her life with a better sense of financial stability and a plan for her future financial goals she’ll be rich. Not as much, or maybe more, than her friends but hopefully she’ll be able to teach them a thing or two and they can teach her a thing or two as well. Educating my daughters about faith, finances and most importantly my love for them are things I strive every day to do.

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Posted in Foundations, Lesson Learned, Money Management

Save Money: Get Some Sleep

September 22nd, 2007

I paid $6.75 for some coffee and a bad banana muffin at Starbucks this morning. At 6:00 in the morning. After having gotten up at 4:30. And going to bed at midnight the night before. I was short on sleep and had to stay awake and was victim to the circumstances. I could have had worse, but cheaper, coffee at the Burger King in the airport, but the Starbucks siren called out to me. The muffin on the other hand seemed to look less like cake and more like nutrition. Instead it tasted like funky banana and oily bread. Such is life. I could have saved the money had I gotten more sleep. Lesson Learned.

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Posted in Lesson Learned, Savings Opportunities

Everything I Learned About Finances I Learned in Laser Tag

September 19th, 2007

This evening at a company event for a client we played Laser Tag. There’s nothing like laser tag to get your heart pounding, sweat going, and lungs aching for air without fake smoke. It was fun but I’m glad that after two games we’re not playing a third. I’m apparently in need of more exercise of a cardiovascular sort. Time to kick my elliptical machine avoidance habit. Here are some things I am reminded of in finances that were true in laser tag.

Everyone has the appearance of having the same equipment
Each person was given the same vest and the same gun was attached to the vests. Jobs pay, but not all jobs are the same. You’re going to need to figure out how your vest sensors work and how your gun operates quickly or else you may be hosed. There’s no recovering from a bad first half of the game unless you work really, really hard. The managing director that works over myself and other contractors and employees got a broken weapon and we ate him alive. Watch out for the predators that are the creditors in the financial worlds – they’ll get you when you’re weak.

There is no ‘i’ in team except for at Apple. We didn’t have a real team mentality in the first game and we lost bad due to our lack of team work. My wife and I have to cooperate as a team to make our finances work and be successful. Don’t get spanked at laser tag or finances – work as a team.

If your team is going to run out in chaos you will more than likely get wiped out by a team with a plan when it comes to scoring. If you get lucky you could be the tiny percent of people who win the lottery – but in reality the team with a plan is going to route the other team in wealth building if they start from the beginning with a plan and continue strong, adapting if needed, but maintaining an offensive plane with a legitimate defensive strategy as well. We’ll assume that’s an emergency fund, which is good to have anyway.

And with those key parallels I’m going to bed – I’m tired!

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Posted in General, Lesson Learned, Money Management

Ignorance is Distress

September 15th, 2007

If you’ve embraced the old maxim, “Ignorance is bliss.” then you’re possibly wrong. You see not so long ago my wife and I were a bit distressed because we had debt of an unknown amount and bills coming in of unknown amounts kicking my sorry bum at unknown times. Basically our ignorance of our financial state kept us spending with credit cards, panicking over those bills, and wondering where all our money was going. We were ignorant and in despair.

However, after going over a very, very thorough plan of our budget we discovered that we had a lot more money left over if we were disciplined and that we could tackle the debt issue. What you have to do is find out where you’re at so that you don’t step onto any land mines. Just like the Windows game “Mine Sweeper” we were clicking in the dark with fear that we might be clicking on an explosive month with more month than money. Now we’ve got a goal, peace and a plan.

If you’re frustrated with bills, now is the time to get ahead. I’d strongly recommend reading “Your Total Money Makeover” by Dave Ramsey if you want a good plan and some motivation.

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Posted in Debt, Debt Redux, Lesson Learned, Money Management

Taking Responsibility For Your Actions

September 13th, 2007

I just read this post on firing an employee [caution, it does contain some potty words towards the end] and it struck me that I was lucky to be let go of my first job at only 16. I was released because I was putting in the least hours of all of the office grunts. The engineering firm that I was working for had three and I had the slowest schedule. I learned at that job, making slightly more than minimum wage, that my time was money and that my charging others for my time was going to mean I was giving them something in return, not just a time card. Its tough to be fired, and its tough to fire someone, but whatever it is that goes on in those situations you have to learn a thing or two, take responsibility for your actions and learn from things!

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Posted in Foundations, Go Read This, Lesson Learned

Its About to Change Seasons

September 12th, 2007

When the seasons change, particularly from the warm months to the cold months, you should be prepared to act on a few things:

Cold weather preparation for your home
Clothing sales
Check your vehicle(s) for weather readiness

Checking these things can help you be prepared, reduce the risk of catastrophes that could make life expensive, and help you save a buck or two.

My house has an automatic sprinkler system that I’ll need to have blown out so that water in the pipes doesn’t freeze them and cause them to burst (I actually had this happen to some copper pipes last winter – $175.00 later I had learned my lesson) . If you’ve got an evaporation cooler, or swamp cooler, that sits up on top of your roof it will need to be drained, cleaned, water shut off, and sealed for the winter. Some perennial plants need to be pruned and then covered for the winter so that they’ll come back in the Spring.

My wife does a great job of catching end-of-season clearance sales for our daughter’s clothes. Since they’re growing we buy about a year ahead so that we don’t have to dump full price payments at the registers. My wife has come home with some amazing deals in the past because she bought ahead for the next year. If you have children this is a surefire way to stay ahead of the game. Some of the styles may be slightly out dated, but not enough that your children will come off looking Amish [not that there's anything wrong with dressing in all black, just ask a these kids who wear goth clothing. In fact, tell them they look like Amish people. It is sure to tick them off].

My car’s windshield wipers need to be replaced. Yours may not, but its a good idea to check now. You’ll also want to check your anti-freeze and windshield wiper fluid to make sure that they’re all in tip-top shape, or filled to the appropriate levels. Some car places offer this as a service but it will more than likely cost you much more than doing it yourself. You can buy a lot of anti-freeze and windshield washing fluid for the same price in most cases. Wiper blades without the installation fee may save you even more money. Inspect your tires for wear and damage so that icy roads, snow or whatever else that shows up doesn’t bring about any surprises. I’d rather pay some money for new tires or tire repairs than have to send my car to the shop for body work due to slipping on the road.

Remember that season changes are a great time to re-evaluate your family’s needs and adjust your budget as well. Costs for heating a home can go up with greater increases in gas or electricity usage. Take a moment to evaluate ways to save money on heating and insulation costs – it could save you big bucks in the long term!

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Posted in Lesson Learned, Savings Opportunities, Tips'n'Tricks

September 11th: A Lesson in Priorities, Financial or Otherwise

September 10th, 2007

On September 11th, 2000 I started a new job for a company that I now do contract work for. At that point in time I was new to the tech industry and my job was to help the guy in documentation handle the heavy load that he had. Unfortunately a few weeks after I started I was moved onto a web project and I never went back to doing full time documentation. I helped in a few areas but for the most part the web development took over my position. A year later I drove into work oblivious to the world events that had taken place and feeling excited that I had been working for the company for a year. It had been a tough, but good year. My co-worker walked into my office and asked, “Did you hear about the plane that crashed into one of the twin towers?” I had not. What was an exciting day turned into one of the most emotionally intense days of my life aside from marriage and having children.

September 11th rolls around every year and I have a small personal celebration. September 11th this year will be seven years with the company (though now as a contractor), but I will recall the life altering events of my first year anniversary with great intensity. That single event helped me refocus my life so that when I think about what I have to do every day I remember my priorities.

I focus on my relationship with God first, my relationship with my wife and family second, and I take the duties of my job to be integrated with my provision for my family. Finances are a part of my serving my family – they’re a priority because my family matters. I don’t worship the money, I don’t focus on the money as a priority over my family, but I focus on them because my family is a priority. I blog about what I’m learning here because I think that there are others like me who have been distracted by ‘the pursuit of happiness’ but forgetting life and liberty. This blog serves the Internet in an attempt to help remind people that happiness is not through finances, finances are part of life and liberty with an end result that will hopefully include happiness.

Don’t get distracted by advertisements, social pressures, or extended family to be pursuing the ‘new’ American Dream. The drive for stuff. Instead recall the old American dream of independence coupled with interdependence. Take a moment to go encourage someone today. Encourage them to be vigorous and passionate about what they’ve got going on in life. Help remind them of liberty, help remind them about what life is about, and remind them to be focused on their priorities – their children’s children will more than likely be effected.

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Posted in Foundations, Lesson Learned, Outside the Box, Taboo & Money (religion, sex, and politics)

He Did it Wrong and I Have to Pick Up the Pieces

September 6th, 2007

Have you ever come across something that someone else did and you have to fix it? In buying the house that we live in (a ‘used’ house) I’ve run into little things that drive me bonkers. Tiny things that the previous owner did when he was getting things done that were shortcuts, mistakes or assumptions in construction of the finished basement or other elements such as putting exposed wires into a hole in my garage wall… so that when a switch that we never used got bumped it flipped the breaker. These very things have parallels in the world of finance. Not necessarily for every person but consider some situations with me.

What if you as a parent (assuming you are one) were killed along with your children’s other parent. Would your legal and financial life be left in order for your surviving children? Or would any adult left to pick up the pieces be left with confusion and a pile of debt? There are things I need to get done to have my financial and legal house in order. Things I should have done long ago. If something happens to me I don’t want my wife or anyone else left after me to have to deal with my own laziness or stupidity after the fact.

I need to get my will finalized so that I can make sure that our children are taken care of appropriately. I need to take care of ‘pulling the plug’ orders in case I’m incapacitated, but not dead. I also need to make sure that I have written some personal letters to a few people. I have two letters that I have already written to my daughters to give them when they get married (or if they don’t I’ll give it to them later on in their lives). Letters to let them know about my recollection of their birth from the time they turned one year old. Those letters are not financial or legal documents, but I need to make sure that they’re in safe places that can be found and opened and are in the instructions of the will.

What else in your life has room for thinking ahead and doing it right? The not doing it right could have long term, painful consequences. Consider your family and friends and get your stuff in order. My list is on my desk ready for me to take charge of it as soon as possible so that I can sleep at night knowing that if I die… everything will go on without even more pain for my wife or children or extended family. I’m not much for half-done jobs anyway.