Dual Income No KidsDual Income No KidsDINKs finance is a blog by and for couples interested in personal finance Articles
Cost of Cars
2007-09-19 16:23:00 The value of not owning a car is tremendous. Recent reports show that DC has traffic congestion second to only LA. They say that the average DC person spends an extra week in the car every year. I imagine that the reality might be even worse, given that so many folks in DC don't have cars. The study, by the Federal Highway Administration, estimated that drivers wasted 2.9 billion gallons of fuel while sitting in traffic. Together with the lost time, traffic delays cost the nation $78.2 billion, the study estimated. That makes me feel all the richer, not only with the costs saved by not having a car, but the headache as well. My twin sister and her husband are facing car meltdowns at the moment. It looks like they'll need to look at a replacement in the very near future. The 1993 Subaru has $2k in repairs needed and is only worth $2k. If you must have a car, I would suggest a couple of things to make sure you've got the money when you need it. If at all p... More About: Cars , Cost
Why You Should Reject the Inheritance Theory of Wealth
2007-09-19 16:08:00 So, if you haven't gathered by now, one of our long term goals is to become wealthy. For us, this means that we we'd like to have $4,000,000 in assets when we turn 65. Sometimes, when we tell our friends about this, some don't believe it can be done. They'll nod or smile or just flat out say it won't happen. A lot of times people come back with some silly figure that 80% of millionaires got that way because of inheritance, or you have to come from money to get rich.This is what I call the inheritance theory of wealth. This is the idea that most wealth in America is created by rich families and then passed down. There are several reasons why, if you're interested in building wealth, you should decisively reject this philosophy.1) Its not true. The facts suggest that inheritance isn't that important for building wealth. If you look at the Forbes 400 (e.g. the world's richest people), America's wealthiest man, Bill Gates, got his start in his garage (clicky). Also, acc... More About: Wealth , Theory , Inheritance , Theo
Is the Loonie Catching Up to the USD?
2007-09-19 05:22:00 Hello All,NPR is reporting that now the Canadian dollar(the trusty loonie!) is now at parity with the US dollar. This is generally because the dollar's value is falling against most major currencies. While this is for Canadian consumers, but not so good for the US, unless you're catering to Canadian tourists. We blogged about this a while ago, perhaps we should have bought more loonies.Best,James
Time to Buy?
2007-09-18 21:27:00 This weekend, my wife Miel and I had a good friend over for the weekend. We ended up spending a good amount of time discussing Brad's interest in buying a house. This got me thinking about the current stock and real estate market, and weather it makes sense to go hunting for assets in this environment. Right now, valuations for some stocks (we like canroys) are more attractive than over the past few months and there are plenty of houses available in most local markets, which means that you could get a good price if you have good credit and you're looking to buy.I'm not the only one, everyone's favorite guru, Kiyosaki is saying the same. Food for thought.Best,James More About: Time
More On the British Banking Meltdown
2007-09-18 19:25:00 I don't know why I'm so obsessed with the whole Northern Rock banking meltdown, I guess that its because I'm always interested in the following the personal finance action. At any rate, the Northern Rock hullabaloo seems to be dying down a bit as the Bank of England has agreed to bail out the bank. Their shares were up .22 pence as of 5:42 yesterday. Clicky for the story.Best,James More About: British , Banking
Poor Credit Doesn't Pay the Mortgage
2007-09-17 17:04:00 To follow up on our sub-prime meltdown, we've had other opportunities to learn the lesson that people with bad credit often don't pay their bills.Back in 2004 we bought a place in a transitional neighborhood here in DC and flipped it six months later. During this time we had a renter with very poor credit who was quite delinquent with payments. DC housing laws are very favorable to the renter, and thus it didn't matter if she had a cable dish that was somehow afforded above rent. This just goes to show that credit history makes a world of difference. We know there are those who manage to turn themselves around, but it might not always be best to risk your finances on these individuals.Our advice to folks who are dealing with rental properties, it pays to go with those who have good credit history and references. Certainly this isn't a rock solid way to determine if your rent will be paid on time, but it is a pretty good indication.Also, what you see isn't what always what you g... More About: Credit , Mortgage , Poor , Mort
Customers Rush to Remove Deposits from Countrywide
2007-09-17 03:35:00 Hi All,I just caught wind of this, but apparently there was a run on Countrywide Bank in California. The LA Times is now reporting that customers are concerned that Countrywide is going bankrupt and are withdrawing their deposits en masse.It seems like the subprime mess is starting to catch up with us in an ugly way.Click here for the story.Best,James More About: Customers , Rush
Pic of the Day: Northern Rock Bank Run
2007-09-16 21:00:00 A Northern Rock bank branch in the UK. Customers line up to withdraw their deposits. More About: Bank , Northern Rock , Hern
Our Own Private Sub-prime Meltdown
2007-09-16 17:13:00 A lot of pundits lament the fact that people don't pay attention to the financial news. This a sometimes a problem because your personal finances are usually connected to big picture economic trends. In our case, we've had our own personal subprime meltdown.Like many personal finance aficionados, we've been lending money on prosper.com. When we initially started lending, we targeted high risk borrowers. About a month ago, we started to see that many of these people were several months behind on their payments and we changed our lending policy. Well, now it turns out that we didn't shift course quickly enough. Five of our loans are currently delinquent and a couple more are two months late. All in all we've lost about $300.Our situation is small microcosm of what's going on in the larger economy. For us, the $300 lesson that people with bad credit don't pay their bills was cheap, but the national mortgage industry has poured billions into the subprime market. Overall... More About: Private , Prime , Riva , Rime , Prim
Blogging As Business
2007-09-15 17:28:00 So, among the things we appreciate about blogging is the opportunity to run a small home based business. When my wife Miel and I just started this blog last year, we initially wanted to share what we had to say with other people who had similar interests. Since then, it has evolved into something a little more extensive.Our blog is a business. The site generates revenue primarily through two sources: sales of text link and interstitial text ads. While neither of these sources will make us wealthy, selling text link ads brings in far more than interstitials. In terms of our expenses, our biggest expenses have been on buying traffic and webhosting, as well as increasing our capacity to measure our webtraffic. Our income and expenses are included so you can see how we're spending our modest income.Our focus has evolved somewhat. While we started out focusing on couples and the basics of personal finance, we've expanded our topics to include reviews of personal finance book... More About: Business , Blogging , Sine
Hawaii Here we Come!
2007-08-12 19:39:00 Aloha!We are off to Hawaii to enjoy time together and with family, as well as a bit of sun without the humidity of DC! We'll do our best to keep our readers posted on all the great finds in Hawaii but imagine you will understand if we are suddenly MIA on the beach!Stay tuned for info on the best shrimp shacks on earth, lessons on how to be a beach bum, and many more vacation money tips!Aloha!Miel & James More About: Travel
Anatomy of A Smart Stock Buy
2007-08-11 16:40:00 So, if you're like many American, you may end up buying shares in publicly traded corporations at some time in your life. Buying stocks can be tricky and I've made a lot of mistakes. Having learned the hard way, I've concluded that a smart buy involves at least two things: due diligence and price considerations.1) Due Diligence: This is a investing geeks way of saying you need to research your buy before purchasing your shares. For what it worth, my investments have usually turned out better when I did a great deal of research before buying the stock.For example, when I first heard about Exxon Mobile (XOM) back in 2002. I invested several hours learning about the company, checking their finances and seeing what various investment analysts had to say about them. In contrast, I picked up a few shares of Novastar Financial Corp. (NFI) after having done about 15 minutes of internet searches. Did doing the due diligence matter? Check out the graph to see how my picks have wor... More About: Stocks , Anatomy , Smart , Stock , Anatom
Whats Up With the Stock Market
2007-08-11 07:02:00 If you've been paying attention to the media, you're probably aware that the stock market is having some issues. I'd been looking around for a good article which explains the problems the market is having in a nutshell. Well, Paul Krugmann over at alternet has a great piece that summarizes the problems the market is having. Basically, nobody is buying bonds backed by home mortgages and this lack of liquidity is having spillover effects on the rest of the economy.Check out the article and hold onto your portfolio. Something tells me the subprime fallout isn't over yet.Best,James More About: Stock Market , Market , Stock , Whats Up
Rock Solid Personal Finance Tips from Eric Tyson
2007-08-10 16:58:00 If you're a long time reader of the DINKs, you'll know that we make an effort to bring high quality personal finance information. To whit, we wanted to share some key recommendations made by Eric Tyson. Tyson is a former journalist with the San Francisco Chronicle, and has taught courses on personal finance at several universities in the bay area. Tyson's book Personal Finance for Dummies is the best all around introduction to the topic I've read in years.Tyson gives a number of tips worth considering:1) Don't Procrastinate: If you wait to meet your financial goals, you're putting yourself at a disadvantage. Don't wait to starting putting your financial life together. Here is a good explanation why.2) Don't Buy Consumer Items on Credit: This is sound advice. Most consumer goods eventually loose value over time. Either market forces oblige a decline in the value of stuff (in the case of computers) or your belongings just wear out. Either way, borrowing on credit is NOT good f... More About: Personal Finance , Tips , Rock
Money & Feng Shui
2007-08-09 21:14:00 Okay, for those you traditional types you might want to run away, now is your opportunity, that said, you'd be better off to read on.According to Feng Shui , our energy and lives are affected by the physical space that we occupy. This is certainly true when it comes to money. This means that you'll want to keep your money bugua, or corner of your house or office, clear of clutter and include positive elements to encourage prosperity. For beginners at feng shui and bagua maps, hold this map when you stand with you back against the wall that contains the main entrance. The prosperity corner will be on the back left of the room.Our place isn't filled with lots of do dads to keep the feng shui, but what we do have tries to bring positive energy into our lives.Just before I left to Ukraine I planted a Jade plant and put it in our money bugua. Jade plants are called "money plants" in Ukraine and I thought we could use something in that corner.My sister just wrote me letting me know ... More About: Money
It's Good to be Cash Flow Positive
2007-08-09 14:43:00 Hello All,I thought I'd take a break from our current postings on Miel's impending departure to Afghanistan to talk about another aspect of our financial lives.In addition to having high powered lifestyles, we also own a modest investment property in Washington DC. If you have real estate, you probably know that as an asset class, it can have its ups and downs. Houses and apartments tend to break down, toilets need fixing, sinks leak, neighbors complain...a huge variety of things can happen to your property. All of them usually end up costing you.Well, this August has brought some good news. About two months ago, we raised the rent (a modest 5%, from $1,125 to $1,185) and it appears to be paying off. Provided that the rest of the month goes well, we'll be able to book a $93.00 pre-tax profit this month. Ninety three dollars a month isn't really that exciting, but given our cash flow over the past 6 months, it's something to feel positive about.The past six months have been rock... More About: Real Estate , Cash , Good , Positive , Flow
Tax Implications of Living Abroad
2007-08-07 13:21:00 Given my upcoming job in Afghanistan, we are sorting out the tax implications of this. We are still looking into the full details of tax implications, but according to sources thus far it appears that while the first $82k is tax exempt our investment income will be taxes at a higher rate. This may mean that we do some shifting of our portfolio so we don't have a pay out of investments, currently much of James' monthly expenses are paid for by stock dividends.Other sources seem to say that it might make no difference. We are currently checking in with our tax accountant but if you know any further info we'd love to hear from you. It looks like expats are being hit harder than ever one way or another, but it might still be better than here, we'll keep you posted.We'll let you know what our tax gal has to say about the situation. Anyway you hack it, we'll need to make sure that we aren't getting hit by the AMT or any other nasty taxes. Given that our effective tax rate was... More About: Living , Ving , Implications , Broad
Headed to Afghanistan
2007-08-06 12:52:00 I wanted to share with our readers the big news that I will be headed to Afghanistan in September to work on the Afghanistan Higher Education Project (HEP). I will remain with my current employer, the Academy for Educational Development (AED), and be based in Kabul. I mentioned this briefly in a post the other day, but I figured it would be good to provide our readers a bit of context and relate it to our blog.To give you a bit of background on the project, the Afghanistan Higher Education Project is part of an overall program to rehabilitate and strengthen the capacity of the education system to improve access to quality education throughout Afghanistan. The project will strengthen both the individual and institutional capacity of sixteen Universities.My new position as the International Training Coordinator of HEP will take me around Asia and the Middle East leading groups of Afghani University staff on training activities. The basic idea is to demonstrate the capacity of other Un... More About: Ghan
A Matter of Perspective
2007-08-05 18:30:00 Hello All,The New York Times is running an excellent article about wealth in Silicon Valley. Evidently, many wealthy entrepreneurs in that part of California don't perceive themselves to be rich. This is because if you have three to five million you're the veritable poor cousin to hedge fund managers and CEO's of tech companies who are pulling down hundreds of millions a year.Click here for the debauchery.Best,James More About: Matter , Perspective
Money Makes the World Go Round...
2007-08-04 22:49:00 and in some parts of the world that means Cash Only.Your average modern American can for nearly all purposes give up the use of cash. Unless you are like my mother, who only recently got her first debit card, you likely use plastic (debit or credit) for most of your purchases. Besides, since when did cash give you those handy frequent flyer miles?I certainly make an effort to keep some cash on hand for various needs, like splitting the check or going to my favorite kebab place. Most of the time that doesn't mean for large purchases...Unless, of course, I'm traveling for work in areas that don't take visa or american express. Sometimes cold hard cash is the way to go. Back in January I had my highest figure ever on hand, at a whopping $26k in USD in the hard of darkness, aka the Democratic Republic of Congo.Currently I'm in Ukraine and am having to deal with the joys of cash. Luckily my hotel in Lviv takes a credit card, but I'll be headed to more remote locals and paying ... More About: Credit Cards , Travel , World , Money , The World
Retirement Real Estate
2007-08-02 23:34:00 Buying real estate as a retirement investment has been something on my mind lately. In May we visited our family's cabin near Lake Tahoe. James' grandfather bought the place back in the early sixties, enjoyed it with his wife until they passed on, and then passed it on to their children. I found this to be an inspiring way to consider making investments, enjoying retirement, and passing a piece of heaven on to your family.James' moms have bought a piece of property in Baja California with our Aunt and Uncle to build a place for retirement. They also bought a place in the Puget Sound that they rent out now and could eventually use if they wanted. James' mom Carol shares a place in Hawaii with James' brother Adam. Not bad places to hang out in my book.On the flip side, my grandparent's bought a place just outside of Yosemite back in the day but didn't manage to hang on to it for whatever reason. My mom also had a piece of property in Oregon that I grew up on but sold it ... More About: Retirement , Estate , Real Estate , Real , Investments
Book Review: Getting Started - The Financial Guide for a Younger Generation
2007-08-01 17:22:00 This posting takes a look at Brian Jones' book Getting Started: The Financial Guide For The Younger Generation. The author, Jones is a professional financial planner and partner at a small financial planning and wealth management firm in Fairfax, Virginia. His biography lists a background in public administration and he holds a graduate certificate in financial planning from Florida Tech*.After having read the book and discussing it at length, we are recommending that our readers AVOID purchasing Getting Started. In fact, it the worst book on personal finance that we have read to date. While writing a full length book is always a difficult endeavor, and we applaud Mr. Jones' efforts, the book falls short in several regards.1) Poor Quality Advice: The first chapter of Getting Started is devoted to a discussion of cash flow. It focuses primarily on lifestyle modifications (e.g. cooking at home, using coupons) as a means of improving one's cash flow. This ignores many other r... More About: Book Review , Book Reviews , Review , Book
Need v. Want
2007-08-01 15:28:00 From my perspective a lot of wasteful spending of money comes down to need versus want. This is particularly the case with clothing purchases. Surely this screams self sacrifice to many of you, but consider how freeing it is to make a conscience choice about whether your purchase is a need or a want. Chances are, a great deal of expenses would fall into the "want" category. Here are couple of ideas of ways to think about the issue.In a consumer driven world consider what good adopting the less is more philosophy would be on a large scale. You can start at home with this fun reminder glass, but you might only want it and not need it....While this can be used for just about everything in our lives, I've used the example of clothes shopping to illustrate this point. Consider whether it is that you need something or want something. Many people make purchases that we don't necessarily need. Here are some questions to ask yourself:Think about your actual needs before you head ou... More About: Frugal
Ask for More Money
2007-07-31 10:41:00 I posted the other day on asking for to reduce costs as a way to get ahead. The second way to help your bottom line is to ask for more money from your job. We've all gone through it before, you finally get the job offer and you freeze, wondering whether you should ask for more money. I'd advocate that even when the job offer is better than what you had expected, it is always worth your while to ask for more money. Even if your boss doesn't have the funds to give you more money, if done correctly, you will gain respect by at least asking for more. Another option that has been successful for me in the past has been to ask for a six month salary review with an increase for high performance. This helps in that your employer might not be able to offer you as much now, but they might be able to do an increase further done the road. This must be in writing in your hire letter.I just recently tried this one out myself. I was offered a new job, and even though it is more money, I s... More About: Money , Goals , Couples
Paying for College
2007-07-30 17:51:00 Hello All,Education is hugely important for the average individual. Nearly, 15 million Americas are enrolled in degree granting institutions of higher education. Having a bachelors degree results in less unemployment and higher average salaries (click), so many Americans are justifiably concerned about paying for college.Now, according to Jane Bryant Quinn, there are at least five ways to cover your higher education costs.1) Savings and Investments : The main idea here is to pay your expenses from savings or investments. Since having a bachelors degree gives you about $20,000 more in annual salary relative to just a high school degree, it can be better to use your assets rather than borrow to pay for school. Sometimes its hard to intuitively determine this trade off, so you could use some financial calculators to compare expected value of your investments versus the expected value of your salary after graduation.2) Current Income: Spending income from your job or other sources red... More About: College , Coll
Asking Saves Money
2007-07-28 16:43:00 Acquiring wealth is pretty simple. You can think of it as a balanced financial diet, you basically need more money coming in than going out.What can you do about this? Ask. Always Ask.This works on both fronts, both reducing costs and increasing income. Here are some ideas to help negotiate a better deal for yourself.Reducing Costs:1) Ask to waive fees - any that come up (this includes credit card and bank fees especially)2) Ask for discounts at stores - you'll be surprised how often this works3) Ask for the employee price when you go shopping4) Ask for reduced interest rates on credit cards - if you have them5) Ask "what's the best deal you can give me?" sometimes you get more than you would ask for6) Telephone - find a better deal or you could cancel service7) Cell phone - keep going back to find out the best deal8) Internet - ask for the best promotional rate, then ask for this again when it expires9) TV - Like us you could get rid of this too, or you could scale back on s... More About: Money , Savings , Frugal , Aves
Dating on the Cheap
2007-07-26 22:04:00 Hi All,Since neither of us have been dating for a while we usually don't have much to say on the economics of courtship. So, when I came across this link, I thought it would be a great way to fill in some of the blanks for our still single readers. Without futher ado, here are some ideas for dating on the cheap.best,James More About: Dating , Cheap , Dati
Why Elections Matter For Your Wallet
2007-07-26 18:24:00 Hello All,Today is Thursday July 26th. As many of you know, the presidential election season is starting to ramp up to full steam. Many folks don't realize it, but elections are hugely important for individual personal finance. The party that takes power wields a titanic amount of influence in Washington, this inevitably impacts your pocketbook.Management changes in government impact your bucks in at least three ways.The first is tax policy. The impact of tax policy on consumers is obvious. When income tax rate are higher, you pay more. As many state income tax policies are built around IRS policies, federal income taxes can impact your state obligations as well. Thus, when presidents or congresses change, the amount you gotta fork over can change too.The second is fiscal policy. The impact of federal fiscal policy is less clear, but its all about budgets, so it matters. Over the past thirty years, the federal government has spent more than it earns. This not a question of spin, ra... More About: Politics , Elections , Matter , Wallet
Steven Levitt: the Freakonomics of inner-city gangs
2007-07-25 15:37:00 Good morning all! This is an excellent 20 minute video by Steven Levitt. Levitt is the author of Freakonomics , a book on the economics of interesting social problems such as abortion and crime. This video is interesting to watch and pertains to finance because Levitt outlines the pecuniary structure of a Chicago street gang he studied. While you probably should NOT assume that his study applies to all street gangs, it is nevertheless an interesting view on an otherwise hidden and exotic world. Check it out if you've got a spare moment. Best,James More About: City , Gangs
Net worth - How often should you calculate this?
More articles from this author:2007-07-24 06:09:00 We recently received a very good question about how often it is advised to update your net worth. There are a couple of perspectives on how often to update.Option #1 - Update every three to six months.Not updating as often makes it so you are less likely to be flustered by changes in the marketThis approach is the sit back and let it ride methodOption #2 - Update monthlyThe advantage of updating monthly is that you can stay on top of your goalsIf you are ahead it feels good, we won't talk about if you are not doing so good :-(In my personal opinion, I think there are reasons for both, but I certainly advocate for knowing your net worth (even if you don't think it is much). I started measuring my net worth when it was in the negative, so it feels pretty good to see where it is today. At first when James suggested that I consider calculating my net worth it seemed a bit futile imagining the numbers that would arise. In the end it has been an inspiration to see how far I ha... More About: Net worth , Worth , Calculate , Wort 1, 2, 3, 4, 5 |
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