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Slow Saturday
2007-11-24 15:07:00
Hello All,Today is Saturday , November 24th. Its been a slow week for our personal finance, but I wanted to share some news and thoughts on our current situation.The big news is we've been chipping away at paying off our second mortgage, I sent in sixty dollars on Wednesday and Miel sent $600 on Monday, so the balance should be a lot closer to $19,000 than $20,000. This feels great because, the interest rate on that mortgage is adjustable and is currently running at just under 9%. Since Washington Mutual is under pressure to increase profits, the chances are good they'll raise rates.In other developments, a good childhood friend of mine is looking at buying a small software company in Oregon. The company is in decline and unprofitable, largely because of competition from India. My friend, who is an exceptional programmer and promoter would need to take over the company and change its business model. For a firm the size of 20 people, that's a big job. I'm holding off on the...
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Benjamin Franklin On Frugality
2007-11-23 15:44:00
Benjamin Franklin is my new hero. He's totally quoteable, and much of what he had to say back in 1776 is as valid today as it was back them. - So without further verbiage, here are ten of Franklin's better quotes on Frugality .1. A man may, if he knows not how to save as he gets, keep his nose all his life to the grindstone, and die not worth a groat at last.2. Beware of little expenses; a small leak will sink a great ship.3. Buy what thou hast no need of, and before long thou shalt sell thy necessaries.4. A fat kitchen makes a lean will.5. Many estates are spent in the getting, Since women for tea forsook spinning and knitting, And men for punch forsook hewing and splitting.6. Think of saving as well as of getting: the Indies have not made Spain rich, because her outgoes are greater than her incomes.7. Women and wine, game and deceit, Make the wealth small, and the wants great.8. What maintains one vice, would bring up two children.9. Who dainties love, shall beggars prove.10. Foo...
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Happy Thanksgiving!
2007-11-22 16:58:00
Hello All,Happy thanksgiving to you! Since Miel is in Afghanistan, I'll be going over to a friends in Washington for a thanksgiving potluck dinner. In order to keep expenses and work down, my friend Danitza organized a chip in and bring your own food thanksgiving party. The main idea is that everyone chips in 40 bucks and brings a dish or two. This way nobody gets stuck forking over hundreds of bucks or slaving all day in the kitchen. If you're single and stuck at home for the holiday's its an appealing idea. In the meantime - enjoy the cartoon and have a great thanksgiving!
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Small Leaks Sink Big Ships
2007-11-22 06:50:00
You may think perhaps that a little tea, or a little punch now and then, diet a little more costly, clothes a little finer, and a little entertainment now and then, can be no great matter; but remember what Poor Richard says, many a little makes a mickle, and farther, beware of little expenses; a small leak will sink a great ship. - Benjamin Franklin
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Bait & Switch
2007-11-20 16:24:00
Bait & Switch is one of the latest books from Barbara Ehrenreich, author of Nickel and Dimed.The premise of Nickel and Dimed was that Barbara went under cover in the working class; you can check our my review of this book here.Bait & Switch - The (Futile) Pursuit of the American Dream takes another look at employment in America; this time from the middle class. I'll admit that I actually bought the book in a bit of a rush while I was shopping to come to Kabul and thought after reading Nickel and Dimed that it was work the $6.98 on sale at Powell's. I mistakenly thought it was about the myth of being better off with both parent's working.In fact, Bait & Switch is about trying to get a job in corporate America. After an entire career as a writer, Ehrenreich changes her identity and tries to get a job in corporate America. While there are some points of the book that I would identify with, I think there are a number of areas where she misses the mark:1st - She sets up th...
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The Big Wide Open
2007-11-20 05:26:00
Lately I've been thinking more and more about retiring to a ranch in Texas. I think I like the fact that its wide and open. I also like the fact that one can have a thousand acre ranch there for the price of an expensive house here in DC.
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Thoughts on Saving
2007-11-19 17:03:00
To take a departure from last weeks theme on travel, I wanted to return to a more bread and butter topic - savings. There's lots of good information available regarding tips for economizing your budget, but relatively less information about how saving fits into your overall strategy for your personal finance.1) Saving is a Means to an End:The first point is savings should be a core part of your strategy. Saving should be a core part of you achieve something greater such as building up a nest egg or obtaining capital to start a business. Its not about gathering money for the sake of having money - that's hoarding. Even a basic savings plan will help you better answer question such as how much money you need and when you'll need it. Saving will also help you to able cope with finance challenges like overspending or changing priorities that can derail your good intentions.2) Your Savings have to Beat Inflation:Inflation is defined as a sustained increase in prices over time. This is...
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Trade for Travel
2007-11-18 17:17:00
In American society trading things is mostly for kids. Here in the USA we mostly use cash to pay for goods and services. But - its not always the case that you need currency to get things when you're traveling.If you've got the magic touch negotiating touch, you might consider going back to basics. That's right - good old fashioned barter. For those adventurous individuals, there are a number of things you might consider trading to supplement your travel experience and improve your bottom line.Some of the skills you might consider trading are:English Lessons - English is still a dominate language for trade and culture.Yoga Lessons - Helps to be more advanced or certified as well.Exercise - General fitness trainer, cardio, volleyball, etc.Cooking Lessons - For example, think of teaching how to make comfort foods or the like.Labor - we have a good friend Levi who planted trees and picked fruit in exchange for free accommodations in Australia. For an example click here.Transporting ...
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Couching Surfing
2007-11-17 14:14:00
Couch Surfing is a great way to both meet folks and possibly crash on somebody's couch. The way it works is that you don't ever have to commit to hosting someone, unless the timing and the person both fit your style.This might save you a bit of money (though gifts for hosts are always appreciated) and make you some new friends!Check out the map of all the surfers they have registered!I've always been a firm believer that the best way to travel is to do so through friends. Whether it be a friend, or a friend of a friend, or someone you met randomly, it's always better to travel with some local knowledge.They also have a great option for those of us with only love seats, or no couch, as in my current living situation. You can say that you are just interested in coffee. I've just made my profile as a way to meet folks in Kabul and while we are on R&Rs. You can check out my profile if you decide to create a login, just search for Miel in Kabul.Even if things don't work to ...

How To Get A Free Cruise
2007-11-16 14:15:00
In keeping with our travel theme this week I'm posting about how go on a cruise - for free!Well, not exactly for free. But if you have the right combination of skills and talent you can sometimes land a short term job on a cruise ship. By short term, we mean 7 days to 3 months. In doing this, you get the opportunity to travel and see new and exciting places.There are several steps to landing a cruise ship job. First, you should decide where you want to go. You might consider picking up a something like The Complete Idiots Travel Guide To Cruise Locations, or Frommer's Caribbean Cruises and Ports of Call. These cover everything you need to know about planning a cruise, saving money, booking, etc.Second, land the job. You'll have to contact the cruise line directly to see what their openings and availability are. There are usually several types of cruise ship jobs. A lot of them are mundane, like working retail, cooking staff, sales, etc. But, some of the other ones are a ...
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Hotel Rewards
2007-11-15 14:10:00
To follow up on our last post, once you've booked your hotel you can still get more out of rewards. One way is to sign up for rewards programs for the hotels you frequent.Marriott has tended to be our choice hotel after a couple of longer stays. They have several different tiers of hotels so you can stay in a decent place all the way up to the nice resort we stayed in for our honeymoon. One of the places we stayed is pictured here on the banks of the Chao Phraya River.Originally I had intended to do a full run down of all the best rewards programs, Starwood, Priority Club, Marriott, Hilton HHonors, and the Hyatt.As it turns out I found a fabulous site that shows all of the rewards programs lined up side by side. Of course it all depends on where hotels are located and what their prices are, but it looks pretty clear that Starwood comes out ahead on the line-up. I know that a close friend of mine loves the Starwood rewards and now gets free breakfast and dinner every time she st...
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Save on Hotels
2007-11-14 15:49:00
Unless you've got a friend, or a friend-of-a-friend, to crash with, many of us will eventually succumb to forking over the cash for a hotel from time to time.As we've mention previously, while we've done our fair share of backpacking, James and I tend to fall a bit closer to the hotel snob side these days. If you are going to suck it up and take a real vacation, here are some of the tips to make the most of it.Seek out Deals. You'd be amazed where you can find deals. Back in my pre-James days, an ex of my was clever enough to find 2-for-1 nights at Holiday Inns across the UK from the back cereal boxes. (Luckily he claimed to like the cereal as well!) Newspapers are also great for this.Entertainment Card. For those who haven't caught on to this secret, it's good for much more than hotels alone. They used to have a flat 50% off all rooms, but now it tends to not be quite that good at all times. It still is a great deal. The book costs $30 a year, so if you use it once o...
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Maximize Your Frequent Flyer Miles
2007-11-13 15:48:00
Miles work the same as any other part of your budget: Do what you can to earn more and spend less!EARN MORE: Frequent Flyer Miles can add up quickly. These days you don't even have to fly, to earn or redeem, but spending money is generally involved. Many mileage programs have some or all of the following ways to earn miles:Mileage Credit Cards. The best way to rack up your mileage is by putting as many of your monthly expenses as you can on your mileage card. Whatever the item, check to see if you can pay for it on your mileage card. Pay off your balance in full, every month, preferably with auto pay.Household Expenses. Mortgage (many won't let you, but you'll rake in the miles if they do), rent, utilities, phone bills, internet, classes, car payments, you name it!Earn Double for Flights. Book your flights through the mileage program and many airlines will double your miles.Hotels, Car rentals, Vacation Packages. Book through your mileage program and you'll often get at least do...
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Sell Your Frequent Flyer Miles
2007-11-13 15:32:00
Good Morning!In keeping with our theme of frugal travel week, I'm doing a quick posting on a topic many people don't think about: airline miles. Have you ever had a ton of airlines miles, but haven't been sure about what to do with them?Well, - it turns out that airline miles are a commodity like any other. This means you can sell them! If you're interested in paying for your next vacation by converting miles to cash, there are a couple of things you can do:1) Sell Your Miles Personally. A great way to do this would be go through something like craigslist or ebay. Usually the price for a 25,000 domestic voucher is $300-500. You'll need to be sure about the transfer regulations and its important to be certain that the airline who is honoring your miles won't hassle you for making the transfer. United has the worst reputation in this regard. 2) Go To a Broker. The main idea is that a broker can tell you how much your miles are worth and whats the best price for them....
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Travel Guides for Free
2007-11-12 13:43:00
Do you love breaking out a new travel guide?Have you dreamed of becoming a writer for Lonely Planet or the Rough Guide?I've done my share of traveling; both with and without travel guides. There are some times when these can come in very handy. There are other times when you discover areas of a guide book that need some updating. There's nothing like searching out some hard to find place only to discover that it is no longer there.In college I traveled to Ecuador with a fourth edition of the Lonely Planet, meaning four groups of Lewis & Clark students had taken the same guide book and made edits in the margin for changes and comments on where to go. My favorite was the warning for roosters - complete with a drawing.Next time you are on the road, consider taking notes and editing the latest edition of your preferred travel guide. Send these edits to the publisher of the guide book and kindly ask for a free copy of the guide book for the next place you are headed, promising to s...
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Wealth Building Through Real Estate Revisited
2007-10-01 19:54:00
Hello People,If you've been watching the headlines in recent weeks, you know that the real estate market is taking a serious beating. Foreclosure are at record highs, lender rebates are increasing, and nationally prices have declined slightly. What all of this suggests, and what we've talked about, is perhaps its time to think about using current market conditions to build wealth.To help give you a sense of how to go about doing this, I wanted to repost some earlier stuff we did from Adriane Berg. Some months ago, I read about an interesting procedure in Adriane Berg's Your Wealth Building Years for accruing real estate. Basically Berg says some simple steps will help you build real estate wealth*.They are:1) Buy an investment property.2) Hold the thing until you have 20 percent equity (either by mortgage pay down or principal appreciation).3) Take out a loan against the equity.4) Invest the loan proceeds in another piece of real estate.5) The cash flow after taxes from both pro...
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Family Business
2007-09-30 17:18:00
There are many ways to acquire wealth in this world. No matter where you are in the world, running a family business remains a lucrative, if painstaking, option. Both of my grandparents made their money from an entrepreneurial spirit. My maternal grandfather moved out West to California in the early fifties from the car capital of the US, Michigan. He worked a year for Goodyear and then started his own business, determined to put them out of business. While Goodyear is obviously still around and kicking, he did manage to put the local branch in Merced, California out of business for the next forty years.My paternal grandfather had a number of businesses that he ran over the years. He owned a successful honey business as well as a plant nursery famous for its Rhododendrons. In the end he actually made most of his money off of a patent that he made for inventing a more efficient piece of machinery for processing lumber and from selling the property that his nursery and bees were...
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Netbank Down the Tubes...
2007-09-29 17:24:00
Evidently the FDIC has closed down Netbank. The full story is at the Atlanta Journal Constitution.

The Origins of Capitalism and What They Mean for You
2007-09-28 20:07:00
So yesterday, I found that I was thinking about wealth and its origins. Now, most people are concerned about about the basics of building wealth, maintaining a checking account and building up emergency savings. So, they aren't too concerned with the intellectual or sociological origins of capitalism.Its too bad, because if you study the origins of something you have a better sense of the conditions that foster it and cause it to grow. Since capitalism has been important for our economy and our pocketbooks, it makes sense to give it some thought. To whit, I wanted introduce two competing theories of the origins of capitalism: Weber's Protestant Ethic and Diamond's Competition-Fragmentation Theory.Max Weber was a big time old school German sociologist. The wrote in the 1880s when Europe was starting to take on its modern political forms. Being a pretty clever guy, he wrote a classic book called The Protestant Ethic and the Spirit of Capitalism . In it he said the rise of ...
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Relativity of Money
2007-09-28 19:53:00
Numbers are perceived to be tangible and fixed. Yet when it comes to money, I've come to learn how relative numbers really are.After my first couple of days in Kabul I finally had to change some money today. Getting a handle on the exchange rate is easy enough at about 50 AFS to 1 USD. What is harder to get a grasp on is how much that can buy you and what is a good deal.I've pretty much resigned myself to knowing that I won't get a good deal on anything until I've been around the block a bit longer. Looking at the prices in the super market I begin to instinctively compare prices to those in Africa.Sure it might cost three bucks for a box of tea, but is it really as dear to me now as it was back in my Peace Corps days? One of my memories from those days was spending a good five minutes deciding if I could afford the $3 box of tea. After all, this was equivalent to a day's wage for me back then. After much deliberation I bought the box of tea, only to have it eaten out fr...
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Sweat the Small Stuff
2007-09-27 15:31:00
We all know that your morning latte is as likely to be your downfall as whatever may be your weakness in life, be it designer shoes or simply eating out. While it is important to pay attention to the small stuff, this should not be at the expense of larger things in life. They say in Congress that numbers have a funny way of working with the mind. While many might look at Gates' request for $190B and see the figure as absurd, such large figures are often hard to digest.It's only when it comes to every day items that we can really wrap our minds around the expenses that tax payers pony up on a regular basis. We can talk about billions in spending, but when it comes down to $50k for drapes we are suddenly appalled. While we each play our part in sitting back and taking the spending that happens on our behalf, I'd invite you to take this lesson back home. What are the items in your budget that get wrapped up into the larger budget and are easily ignored? Whether it be the extra...
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Welcome to Kabul
2007-09-27 05:30:00
Where the time is 8.5 hours later than DC and jet lag is seriously hitting me...Alas, James & I have begun the next stage of our marriage from half a globe away. Despite the challenges that we face in taking this step, it feels like a good move in our life paths. For more details on the position that I've taken please take a look at this post.I arrived in Kabul yesterday afternoon, approximately 46 hrs after leaving DC, including 17 hours on a plane and a night in Dubai en route. Despite the rest in Dubai I'm still feeling the jet lag in a major way and will be headed back to my room for a cat nap in a bit.One thing that did strike me on my travels over here was the reality that women are still so much of the minority when it comes to business travel. Coming into Dubai it felt like I was in the one percentile. Continuing on to Kabul it was a bit better but still noticeable none-the-less.This seems interesting from a financial standpoint, for if men are still the ones to have f...

Some Drawbacks of Mutual Funds - Revisited
2007-09-25 15:47:00
Hi All,I'm swamped preparing for a stats exam. Rather than bore you with a discussion of probability distributions and link functions, I thought I'd hit on one of my older, but favorite posts. So, without further ado, here are my thoughts on mutual funds...I'm not a fan of actively managed traditional mutual funds. While these products have done very well for millions of Americans, its been my experience that they have numerous drawbacks.Lets discuss two of the usually touted advantages of mutual funds: 1) professional management and 2) diversification.1) Professional Management Can be Overrated:The main idea behind turning over one's finances to a professional is that through superior education and experience, the professional will be better able to make financial decisions than the average consumer. There are several problems with this.Mutu al fund performance falls out like a bell curve. If you took statistics in college (or high school), you know what a bell curve looks like....
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James' Top Finance Books - The Remix
2007-09-24 15:28:00
Hi All,I'm prepping for an exam today, so you get a rerun of a posting we did back in April of last year. Since most of you are more recent readers of the DINKs, this shouldn't be much of a problem for you guys. Without further ado, here are my favorite books on personal finance.1) The Intelligent Investor - Graham.The author of The Intelligent Investor was Benjamin Graham. Benjamin Graham is famous for being the mentor to billionaire Warren Buffet of Berkshire Hathaway fame. Not a lot of people realize it, but Graham was an uncommonly intelligent man. He was born in 1894 and is reputed to have earned a half-million dollar salary in finance by the age 25, which was a lot of money in 1919! Graham introduced the notions of 'intrinsic value', and buying at a discount to that value to the discipline of securities investing. He's had a tremendous impact on my own personal investing philosophy. I can't recommend his book enough.2) A Random Walk Down Wall Street - Burton Malkiel.Ma...
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Can Debt Impact Your Health?
2007-09-23 16:48:00
Thanks to Tricia over at Blogging Away Debt , I found a great article on the physiological effects of debt. What this piece is saying is that high levels of debt can actually impact your health through conditions like chronic stress and chronic depression.Click here for the article. Its only about a page or so.Best,James
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Formative Finances
2007-09-23 03:56:00
Thanks for all the great comments on my last post. While it's not something that I often dwell on, socio-economic movement has been part of who I am.I do strongly agree with one of our anonymous comments that working hard for your money can make it more meaningful. My twin sister and I are both very successful in our own right, yet we have come to approach finances differently.As we were growing up there were some early indications of me being a bit more of a saver than my sis. Going in to college this became even more apparent. I went to an expensive liberal arts school that forced me to work two jobs and save constantly. My sister however opted for a solid education at Oregon's State Universities (OSU & UofO). This allowed her not only to have half the college expenses as I had, but to also get money back every month from financial aid. She still worked a college job, but she worked more like 8-10 hours a week while I never worked less than 25 and up to 30+ with my tw...
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Inheritance and Real Wealth
2007-09-21 18:10:00
Earlier this week, I wrote about the inheritance theory of wealth. This is the notion that family background strongly determines how wealthy one is. The main idea behind the inheritance theory is that early socialization and access to resources found in rich families improves the life changes of their offspring. The second idea behind the inheritance theory is that in later life, the children of the well off receive larger transfers of wealth, thus ensuring that the next generation remains rich.I've talked about the psychological reasons why you shouldn't buy into this theory, so I won't harp on it here. I did however want to point out that many of Americas' wealthiest families have been built on building exceptional businesses - families like the Mars in candy, the Wrigley family in chewing gum, and the Coors and Busch clans in beer. All of these families made their wealth not from inheritance, rather they got it from building successful businesses over time.The final point her...
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The Great American Dream
2007-09-21 16:09:00
Everyone knows of the great American dream of rags to riches. The idea is that opportunity exists to pull ones self up by the boot straps and climb the social strata. With poverty and class issues as they exist today, I can see many valid arguments for why this may be much better in theory than reality. The poor in America are for a large part handicapped by the economic and social conditions that surround them. Getting out is not as easy as it may sound. I however believe that it is possible to climb the ladder of success. I grew up in in rural Oregon right on the poverty line. Growing up I wasn't really aware of this. Had you asked me in grade school or high school where I fit, I would have said middle to upper-middle class. Of course this was comparing myself to those around me in rural Oregon, those under the poverty line. I think that my inability to recognize that I was not in a good economic condition allowed me to function as if I were in a higher so...
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Some Good Advice from Yahoo
2007-09-20 21:34:00
Hi All,The personal finance section in Yahoo .com is usually a good source of articles and information about stocks and investing. Today, they featured an informative article on some guidelines to help you think about getting rich. If you have some spare time, feel free to cruise over to yahoo and check out the article.Best,James
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More Doom and Gloom for the Dollar
2007-09-20 14:42:00
Good morning folks!This morning while getting on-line, I saw some unpleasant news. Due to the declining value of the dollar, Saudi Arabia is considering removing the riyals peg to the greenback. Evidently, the Saudi's are getting mad because the dollar peg is causing inflation over in the gulf.Feel free to check out the article. In the mean time, here a fun graphic thats making the rounds on the internet.
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