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Net Worth Update: July
2008-08-19 04:23:00
I'm late posting my Net Worth report which should have come out August 1st. I updated NetworthIQ on time so if you were paying attention then you'll see the information is the same. To explain some of the results... I had a net increase for the month. Here is the single bright spot from the month, I continued to invest diligently in my retirement accounts. I also continued to spend large amounts of money on stuff via my credit cards. I justified the purchases a dozen different ways, and put off doing this post for a couple of weeks out of frustration and shame at how bad I overspent.A run down of the spending is entirely centered around the house. We got a patio set for the newly fenced yard, a refrigerator for the garage, a used Ping Pong table, and a huge 40 gallon tank / stand for my turtle. The purchases were spurred on by my wife and I hosting our friends for our annual house party. We wanted to get the place into tip-top shape and be prepared for almost 20 of our close...
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Net Worth Update: June
2008-07-02 02:39:00
This month was a total bomb. Ugh. Not much went right financially. The stock market tanked. My car broke down. I had a fence installed for the back yard that went over budget. I spent a ton of time and money on seemingly "minor" home maintenance projects. I added to my debt. My assets lost value. June did not treat me well.To make up for the shortfall I've bumped up my savings rate on my emergency fund from $100/month to $200. I am back in the rebuilding phase to get a little cash cushion. I've also cut costs on a few monthly recurring bills to try and gain back some ground. I cut my pest control service to be bi-monthly rather than monthly and decided to perform DIY termite control. I've got a few other cuts in mind that may help more over the next few months too.There is a short list of positives for the month. After doing some repairs on my '99 Lumina I found it is now worth slightly more than it was prior to the repairs. My house also appreciated due to the installation of t...
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Net Worth Update
2008-06-04 17:15:00
I have updated my Net Worth on NetworthIQ.  Despite not posting regular blog entries I have continued to make progress growing my assets and paying down my debts.  The progress has been slow and steady, but things are clearly moving in the right direction.  Follow the link in the Left Sidebar and check out my progress. I don't intend to make any excuses, but obviously I have not been regularly blogging.  However I do want to let people know that this blog is not dead and writing will resume on a semi-regular basis once a few things are ironed out personally.  I hope that there are some readers that miss my financial musings and look forward to more in the future. Thanks for reading.  
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Too Many Carrots?
2008-04-24 23:23:00
I came across a great article today that I felt compelled to write about.  The piece, Life and Taxes, was written by Yaron Brook for Forbes.  First, I would like each reader to stop for a moment and consider all of the impacts taxes have on your day-to-day life and on your financial decisions.  The most obvious effect of taxation is the large chunk of income tax withholding that drains cash from each paycheck.  Almost certainly you will recall the property tax, sales tax, FICA tax, gas tax, and sin taxes too.  What Dr. Brook made me realize is that taxes actually have a much larger impact that just draining away your money. Taxes are a means for the government to control the people.  How is that possible you say?  By rewarding the behaviors that the government deems moral and punishing the behaviors that the government deems immoral.  There are carrots (ie rewards) for buying a home (mortgage interest deduction), saving for retirement (401(k) ...
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Airlines Are Not My Friend
2008-04-10 04:51:00
If you've read the news over the past two days one of the leading stories is that American Airlines has cancled 1,000 flights.  Unfortunately I have been snagged in this travel nightmare today.  I had a quick two night business trip that was to conclude with an evening flight home today.  Of couse my flight was one of those that were cut.   I learned of the problems around mid-morning&nbs p;when a coworker jumped on the web during a break in our meetings.  I remembered that I had been scheduled to fly on an S-80 for my return trip so I immediately logged into my frequent flier account to check my status.  The remarkable thing was that the airline's website barely even mentioned the issues.  A plain link to a quick PR blurb was all of the information given.   Next I pulled up my intinerary and was happy to find that my flight was still listed for departure at its original...
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Introspection Found in a Suit
2008-04-07 18:15:00
Over the weekend I was honored to be an usher at the wedding of two great friends.  We had a really great time celebrating, and I got that warm fuzzy feeling that you get at a wedding when you know that the couple is truly meant for each other.  I also had to Dress to Impress and wear a suit.  I hate dressing up. I've reached the point in my life where I can no longer get away with khaki pants and a button-up shirt at formal gatherings.  This was very apparent when I under-dressed for my cousin's wedding last summer.  It was an outdoor wedding on a hot summer day and I thought comfort and practicality would prevail in the wardrobe choices of the guests.  I was wrong.  While I hate dressing up, I learned that I hate under-dressing even more.  Who wants to stick out and look like a schmuck in front of the whole family by being the only guy not wearing a blazer?  I felt like a lightening rod for the biting wit of my judgmental family...
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Carnival Update
2008-04-04 04:14:00
Over the last week I've been included in a pair of quality carnivals. The first is the Carnival of Real Estate hosted by Searchlight Crusade. The editor disagreed with my recreational approach to real estate I called House Lust. I agree that it can be dangerous, but if you are conscientious I think cruising the open house circuit can still be an informative and fun way to spend a pretty weekend.One of my articles was also included in the Carnival of Ethics, Values, and Personal Finance. I've always thought it is important to recognize that personal finance is much less about numbers and more about our values, goals, and aspirations. Check out the carnival for some great reading.One last thing I want to include in today's round up is the creation of a new category of post on Aspire 2 Wealth. Recently I've written two posts on the topic of Behavioral Finance. I am a big fan of this area of research and so over the next few weeks and months I will hopefully continue to cover...
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Costs of a Luscious Lawn
2008-04-03 04:15:00
As Spring has crept up on me and it is time to start working on some outdoor projects. One of the most pressing is the dirt and weed patch that is lovingly called my back yard. It is a mess and far from the fun and functional space I need.To address the problem I've started with a little research. Starting with no clue about cultivating a grassy yard I have learned that in my part of the country there are two options: burmuda or fescue. Burmuda grows like a weed and is very tolerant of the hot sunny climate and better suited to lower amounts of watering. On the downside, burmuda is totally brown 5 months out of the year and never the soft carpet of green I would ideally grow. Fescue on the other hand is an attractive green color year round and can be made to flourish. Its weakness is that it is best suited to shade and requires very regular watering. Fescue depends so much on regular watering that the local garden center recommended it only if we were willing to install a s...
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More Ways Your Brain Tricks You
2008-04-01 21:32:00
Today I came across a great article about more ways your brain tricks you into making bad financial decisions.  The article, Why You're a Big Sucker, explains how a few blind spots in cause us to make bad consumer decisions and cost us money. Two examples resonated with me personally.  The first is how the word FREE tricks us into doing some very stupid things.  In short, when a marketer or sales person is giving you something for free there is always a catch.  In my case, I called a toll free number advertised on the radio to collect my "free" trip to Las Vegas.  Of course, I found out when the marketing materials arrived there was indeed a free trip, except for the $29.99 handling fee, the $79.99 conditional cancellation fee, and the mandatory 2 hour time share presentation.  Oh, I also forgot that my wife and I could only collect our plane tickets if we were flying from a designated airport (all on the West coast) or were willing to pay...
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New Worth Update: April
2008-04-01 05:19:00
March has been an eventful month in my personal life. Here are the numbers: Assets $ Diff % Diff Cash $3,934 $126 3.31% Stocks $0 $0 - Bonds $0 $0 - Annuities $0 $0 - Retirement $17,001 $866 5.37% Home $191,900 $0 - Other Real Estate $0 $0 - Cars $16,123 $0 - Personal Property $0 $0 - Other $0 ($151) - Total Assets $228,958 $992 0.44% Debts $ Diff % Diff Home Mortgage(s) $177,272 ($187) -0.11% Other Mo...
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Car Insurance: Deductibles & More
2008-03-31 02:38:00
Three years ago when I got my BA degree it was time for me to get my car insurance under my own name. For the sake of comfort and simplicity I stayed with the same insurer that my parents have used as long as I've been alive, State Farm. I also kept the exact same coverage my parents had selected.Now, after gaining a great deal more financial literacy I think it is time to revisit my car insurance. A little research gave me all of the information I need. First we have a 1999 Chevy Lumina (Kelly Blue Book Private Party value $2,880) and a 2007 Dodge Caliber (Kelly Blue Book Private Party value $10,995). Second, I just turned 25 and should now qualify for lower rates. Third, neither my wife or I have ever had an accident that was turned in to our insurance company.Our current coverage has all of the basics such as liability, uninsured motorist, and medical payment coverage. We also carry comprehensive on the Caliber (required because of the car loan). Under no circumstances w...
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What Are We Proud Of?
2008-03-28 22:41:00
I heard someone on the radio today talking about Americans and what makes them proud.  That is a funny little word that has a tendency to have deep emotional and moral connections.  Another way to look at pride is one of its opposites, shame.  Both pride and shame have important applications to personal finance that I'd like to consider. First, what about your money situation are you ashamed of?  Debt is something that makes many people ashamed.  But, not all debt!  The debt that you are ashamed of comes from those purchases that you know deep down you never should have made, or the times you splurged when there really wasn't any money to splurge.  I know that right now I am ashamed that I have about $10,000 in credit card debt.  How do I know I'm ashamed?  Because I've told "white lies" or understated the amount debt I have when talking about the issue.  I know that if I'm willing to lie about something...
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Anecdotes from the Downturn
2008-03-25 17:59:00
CNN Money is running a series a short stories from those who are struggling financially.  In total there are 26 articles that cover a diverse mix of Americans.  The common theme is that broad swaths of our population have been hit by hard economic times.  However, all of these stories remind me how important it is to recognize the difference between a collection of anecdotes about individuals economic hardship and statistically important analysis of the whole economy.After reading through all of the anecdotes, the most common hardships are job loss, health problems, and single parent households.   What struck me is that even in good economic times these problems are very real and likely to hurt the prosperity of ANY household.  As it turns out, unemployment is still at solid levels historically speaking, less than 5%.  A net loss of 63,000 jobs in February may significantly impact individual families, but it has almost no effect on the broader econ...
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Your Brain Makes Building Wealth Hard
2008-03-25 04:55:00
One of the first steps to overcoming a challenge is to recognize there is a problem. If you do not know where your stumbling blocks lie it is often impossible to achieve the results you desire. In the wealth building process there are multiple challenges, but one that many people don't recognize is your own brain. Our brains developed to do a great job helping us hunt, gather, and reproduce. Unfortunately our brains are not particularly suited to the challenges of creating wealth.There is [relatively speaking] a new field of study called Behavioral Finance. The basic idea is that investing decisions are made by people, and people are influenced by psychology in addition to the pure numbers of the markets. In fact, investors (being human) are subject to quarks of neurology, biochemistry, and evolutionary anthropology which in turn influence all of our money decisions.So, now that we realize that there is more to investing than just the numbers, what does that mean? First off,...
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March Money Madness
2008-03-21 22:53:00
The pinnacle of the college basketball season is upon us, and like many people I have found myself checking stats and picking brackets.  In years past I have put some cash into various betting pools and wagers.  This year I have decided to enter only for fun but I now regret that decision.  Why?  Paying with nothing on the line isn't very much fun at all. It is my theory, and I'm not psychologist, that the small bets I've made in the past give me a personal stake in the outcome of the games.  If I don't care who wins I don't enjoy watching as much.  Who cares if Butler or South Alabama win in the first round?  I do because I've got $5 on Butler.  Why did I bet on them?  Because I have a cousin that went there.  Does that make logical or mathematical sense, of course not.  It does however make March Madness more fun. Next question: How much should I spend to add to my b-ball enjoyment these next few weeks?...
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Hump Day Round Up
2008-03-20 05:30:00
I've continued to look into the inflation problem I raised in my post How High is Inflation Really? I found two good links that dig deeper into rising food costs and rising fuel costs. In general it seems like there have been a whole series of failed policies and broad economic mistakes that have all built up to give us a perfect storm for rampant inflation. It may not be too late to fix some of the problems but there is the potential for very bad things.On another note, Aspire 2 Wealth has been included in a whole slew of carnivals over the past week. I have gotten behind with sharing them, but today I sat down and read through many of the posts and came across a lot of great information. Here they are:Money Hacks Carnival #2 hosted by beingfrugal.netMoney Hacks Carnival #4 hosted by Amatureist Financial JourneyEthics, Values & Personal Finance hosted by Money and Values
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How High is Inflation Really?
2008-03-19 21:12:00
If we stop at the gas station to fill up the tank it is obvious that prices have done nothing but go up, up, up these days.  What is even more worrying is that it isn't only fuel costs that have skyrocketed.  Two years ago it would cost about $100 for a trip to the grocery store.  This would provide all of the staples for two weeks.  In a month, the total bill would be about $250.  Lately I am budgeting $300 a month and finding that I consistently go over budget.   It isn't a scientific measure by any means but it feels to me like my buying power has dropped by as much as 25% in two years.  How is that possible? The official figures for the Producer Price Index, which measures the cost of goods at the wholesale level, rose 0.3% in February and 1.0% in January as reported by Forbes.  Year over year inflation clocked in at a 6.4% rate.  This trend seems to be accelerating to an annual rate in the neighborhood of 7.8% for 2008 b...
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Overcoming the Fear of Failure
2008-03-19 05:35:00
I want to start my own business. In order to diversify my income streams and increase my income I feel that entrepreneurship is by far the best route. The problem I now face is that I am hesitant to risk my savings on an unproven venture. I am afraid to fail. I think that recognizing both my desire to enter the business world and my reservations is a good start, but as someone wise once said, "You can't win if you never play the game."I spent some time this evening scouring the net looking for advice. Here is some of what I've found:Biz Thoughts: Don't Be Afraid to FailNational Federation of Small BusinessPractical Commerce: Four Things You Should KnowBecause I went out looking for motivational and inspirational resources that is mostly what I've found. One common theme I have found is to start small. By moving slowly and making a limited investment you can gauge the market without large risks. Next, many people advise that what I consider failure, a business that does n...
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I Missed Out on a 517% Single Day Return
2008-03-17 15:50:00
Yesterday I wrote about the Bear Stearns buyout announcement.  Had I been able to put in my options trade for BSC last night it would have worked out to a fat 517% return in mere seconds at the opening bell this morning.  As predicted the stock fell from $30 a share to $3.20 per share.  The March 19th puts with a $25 strike price went from $4.10 up to $21.20 in a matter of seconds at the open.  If I put in my order overnight I may not have gotten my trade done at the perfect price but I almost certainly would have still tripled my money.  My investment of $4,100 could now be worth $21,200.  I missed this boat this time, but it is still nice to know I made the correct call and would have made out like a bandit if I'd had the foresight to get my brokerage account approved for options trades.  Next time I won't be caught ill prepared.  Please read last night's post to fully understand the how, what, and why of the options investment...
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I Am a Perma-Bull
2008-03-17 05:45:00
In case you have missed the latest development in business news, Bear Stearns Companies Inc has brokered a deal with JP Morgan Chase to be purchased for $2 per share. At the start of 2008 the stock was trading at $88 per share. This deal is expected to rock the global financial markets and completely crush the stock price of the financial firms. It is likely to be very ugly.On the flips side of this pain there are two great ways to find profit. First and the method I plan to take advantage of is to continue to invest into the broad market indexes and dollar cost average more money into the market. This route will profit when the market recovers.The other way to profit from this situation is to delve into more complex investment concepts like options or short sales. I personally tried to buy put options on BSC (Bear Stearns ticker symbol) this evening. Unfortunately my broker requires an additional signature on paper in order to add options trading to my account. With a small...
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10 Simple Steps to be a Millionaire
2008-03-15 00:35:00
Believe it or not anyone can become a millionaire. Becoming a member of the millionaire club can even be achieved on a very modest income. The trick is to realize that what determines wealth is not how much you make, but instead how much you save and invest. Here is the proof, a New Jersey man while never earning more than $11 an hour became a multimillionaire. There are literally thousands of examples of people who started with nothing and were able to achieve their millionaire dreams.When I started Aspire 2 Wealth I quickly decided that I would need a plan if I was going to reach my goals. As a part of that plan I wrote down a list of rules or steps that would guide me on my path to wealth. These are ideas that are embodied by millionaires all around us that built their wealth gradually and deliberately over the years. I want to share with you my Millionaire Rules.Ten Millionaire Rules:Write Down Your GoalsCreate a Spending Plan / Track Your ProgressLearn to Say "No" to You...
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Dress to Impress
2008-03-14 04:51:00
Over the last year and a half I have started traveling for business every couple of months. Usually on these trips I am visiting a contractor which does business for my company. Ultimately my role is to perform an audit or provide oversight into how well they are executing their contractual duties. I have also starting giving briefings to high level managers and decision makers. In other words, at times my job requires me to put forth a professional, credible persona.A large part of that professionalism is dressing the part. In my normal work environment we don't have a dress code. As an unspoken rule, shorts and sandals are a bit too casual except on special occasions, but day-to-day a tee shirt and blue jeans is perfectly acceptable. I am sometime teased by friends and family because I almost always wear the same thing whether at work or at home: a collared polo-style shirt and blue jeans. When I travel or have a presentation to give that outfit does not give the impressi...
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Life Insurance: How Much?
2008-03-13 02:44:00
I know I need more life insurance. I've been planning to get more ever since we bought a house last May. I have a few reasons that I've put it off, but I know I should stop making excuses and do it!We aren't completely without life insurance at the moment. I have a little more than twice my salary from work. My pension also provides a death benefit that would be about $1,500 a month to my wife. Finally, there would be a small amount of social security that my wife would collect as well. If you add that all up it is in the ball park of $200,000 plus $1,500 a month. That is enough to pay off all of our debt (including the mortgage) and leave my wife a little money each month to get by.Based on what I have already, I know we are currently ahead of many people out there. However it certainly isn't enough to replace my income. I'd say that it would cover about 40% of my current income and that would leave a lot of strain on those I may leave behind. I'd prefer to be able ...
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House Lust
2008-03-11 05:58:00
This weekend we had some great weather, and so we spent a few hours yesterday afternoon gawking at the pretty houses. I nearly went into architecture, and even though I did not choose it as my career, I still draw floor plans and elevations as a hobby. There are dozens of open houses all over the area and if something really gets our attention we will stop and take a look.Yesterday we drove through several neighborhoods where prices ranged from $280-500k. Of course in those price ranges we found a lot to like about the houses. One in particular really stood out and I immediately started running the numbers in my head. Could I ever afford it?In our area basic housing will run around $80 per square foot. That will get you a house that is a little older (built in the 50's and 60's) and may need some touch ups but is in generally good shape. For $100 per square foot (the range for our house), you can get a mint condition house with some moderate upgrades. In the $115-125 per s...
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Millionaire Rule #10
2008-03-09 01:00:00
Generate Multiple Income StreamsThere are two components to having more money left over in the bank at the end of the month. The first is to reduce expenses and spend less money. The second is to increase your income. While it may sometimes seem impossible to make more money on will power and elbow grease alone, creating multiple income streams is a sure-fire way to bring in extra cash. Branching out from your traditional day job to seek new ways to create income is an integral part to becoming wealthy if you, like most of us, don't pull down the big bucks. This installment of the Millionaire Rule s series will explain the importance of having diversified sources of income and some suggestions for how to get started increasing your cash flow.First off, if we want to become wealthy we must also be willing to do some extra to get ourselves there. If you do the exact same thing as everyone else, how will you "get ahead' in life? At the end of the work day most people go home and...

New Way to Bank Extra Cash
2008-03-04 16:41:00
Today I am taking off for a quick three day / two night business trip.  I don't travel that often, but every couple of months I need to attend an out town meeting or drop in with a supplier.  As a part of my quest to squeeze a little more money out of my budget I am going to try and use these business trips as a way to increase my income. How can I turn my travel into extra money?  First, I signed up for all of the frequent traveler accounts that I may use while on the road.  My employer lets its employees keep the rewards they rack up for personal use.  For the first couple of trips I wastefully failed to claim these benefits.  I now have accounts with each of the major airlines that service my local airport and a selection of hotel chains that I will use for lodging too.  In fact, with only three business trips and two night of personal hotel stays I have nearly earned enough points to get a free hotel stay, worth $60, by simply doing things ...
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