Posts Tagged ‘money’

Personal Finance advice from “Dilbert”

Monday, November 17th, 2008

Vanguard − The “Dilbert” guide to personal finance

This list from Scott Adams, the creator of Dilbert, is about 2 years old, but I just saw it for the first time, and I think it’s an excellent distillation of the basics of personal finance. It really focuses in on exactly what I’ve been reading about in the couple of years that I’ve been getting more serious about personal finance.

Everything you need to know about financial planning*

  1. Make a will.
  2. Pay off your credit cards.
  3. Get term life insurance if you have a family to support.
  4. Fund your 401(k) to the maximum.
  5. Fund your IRA to the maximum.
  6. Buy a house if you want to live in a house and you can afford it.
  7. Put six months’ expenses in a money market fund.
  8. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker, and never touch it until retirement.

If any of this confuses you or you have something special going on (retirement, college planning, tax issues) hire a fee-based financial planner, not one who charges a percentage of your portfolio.

* Dilbert and the Way of the Weasel, Collins, New York, 2002, p. 172.

On the Vanguard page, a bunch of experts weigh in with their opinions on the advice, all of which is positive.

I’ve got #1 and #2 in progress right now. #3 would be next in line. Numbers 4-7 are in various states of completion/planning, though funding the IRA and 401(k) to the maximum is currently a bit of a stretch goal. Number 8? Yeah, well I suppose I’d have to have money left over for that to happen.

These are all long-term goals, but any progress toward them is good. I’m happy that I’m making some headway.

Speaking of goals, and Dilbert:
Dilbert.com

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I want to end my life, but I’m too lazy

Monday, October 20th, 2008

I’ve got a swirl of thoughts going on in my head at the moment. This one’s gonna ramble. Hopefully it comes out making some kind of sense.

I want to end my life. Well, part of it anyway. I would prefer to continue breathing, let’s just get that straight right away.

I want to excise the part of myself that wants “stuff.” Wanting stuff is the pursuit of temporary pleasure. As soon as I get something I want, I feel better for a little while, then I want “stuff 2.0.” All that stuff costs money. That means I have to work, because I haven’t figured out how to get paid for doing nothing yet. That takes time from other tasks I have to do. Time is finite, so I have to figure out how to get those other tasks done faster, which means either paying someone else to do it for me, or buying some other “stuff” that helps me get it done faster. But that means I need more money, so I can pay for that, which means I have to work more.

Nothing new there. You see where I’m going. It’s the same cyclical problem everyone has on one level or another.

I want to drop out of that cycle. I could. I know I could. For example, I could sell my current house and move someplace smaller and cheaper. It’s an option. Other people have survived with much less than I have. I won’t though. I like it here. It’s too hard to give up what I have now.

That makes me think of how hard it is for a rich man to enter heaven. When approached by a rich man wanting to know what he must do to gain eternal life, Jesus said he should sell all his possessions and give it away to the poor. In other words, he had to stop coveting “stuff.” (if you’re wondering, the passage is Matthew 19:16-30). There was a time when I thought I’d have no problem with that. That was before I had this much stuff. Intellectually, I knew what the story meant, but now I feel the guy’s pain. It’s hard. In fact, not only do I not want to give up stuff… I want more stuff.

That gets me to thinking about church. I used to be much more involved in church activities. Part of me feels like I’m not involved enough now, but I am in the choir and a small group, and I’m not sure I’m willing to commit more time right now.

And then there’s the heart of the matter: the choir connection that at some level probably kick-started this post much earlier today (well, yesterday, at this point as I write this after 3am). A friend of mine from choir has cancer. It’s apparently progressing very quickly, and hospice has recently been mentioned. I haven’t seen him since early this summer, before he was diagnosed. He and his wife are very active in our church. He’s a very nice, happy, intelligent, funny, godly, loving man. He’s one of the first people to offer help in any circumstance and has been a source of support when my family was going through some tough stuff over the last 5 years. I have an immense amount of respect for him, and it pains me greatly that he’s going through this, as does the knowledge that he may not be around for much longer.

Thinking about that and other reminders of mortality coincided with another friend of mine reflecting on “Hurt” as performed by Johnny Cash. He noted that the video for that song shows Cash “sitting there looking back on all that he had accomplished and realizing that, save a few precious things (his faith, his wife, his kids), it was all meaningless.”  “Stuff” isn’t in that list. I imagine my choir friend is having some of those same thoughts.

I need to end this life as it currently exists, and refocus. The way I want to live and the way I’m living are not lining up as well as I’d hope. I’ve got a lot of inertia, though, and I’m lazy. It’s hard to get started.

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Saving 12% in interest in 10 minutes

Saturday, July 26th, 2008

I just saved myself 12% in interest fees in a 10 minute conversation.

I’ve been working in earnest to get myself out of credit card debt for a few years now. Back when the economy was doing a bit better, I found a great deal with CitiCard to pay 3.99% on my balance transfer per month for the life of the balance. Naturally, I put as much of my existing debt on that card as I could. Since then, I’ve paid just a little above the minimum on that card while I concentrate on the higher interest balances. So far, this has worked out pretty well, and I’ve made a significant dent on my overall debt.

This month, I screwed up.

Despite the alerts and warnings I set up for myself, I missed one due date by 12 hours. It was stupid, and my fault. Today, I got a message that my APR for that card jumped from 3.99% to 15.99%, and I received a $40 late fee.

That would put a serious crimp in my payoff plans. I called CitiCard and told them I was sorry for missing the due date by 1 day, and emphasized that I had not ever been late in paying them before. Then I asked them to reinstate the original APR - and offered to pay the late fee. After a few minutes on hold, and with no argument, they agreed.

I could probably have talked them out of the $40, but I accept that I missed the date, and that’s a valid punishment (even if I do think it’s exorbitant). I’m willing to take that hit. But the more important thing is that I avoided a 12% increase long-term. That’s going to save me some serious money.

Calling the credit card companies can work!

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