One question every man has to how how to answer is as follows.
What do you want most out of life?
Being able to answer this questions is important for several reasons. Theoretically, what you want most out of life is what you believe will give you the most happiness. If you know what that thing is, you can devise a plan to start working towards it and the sooner you can answer this question, the better. For example, if a kid knew he wanted to become an engineer from the age of 16, he would have several years to research the requirements, what college to go to, what to major in, what sort of companies he would want to apply to etc.
This gives him the ability to streamline the process and not waste very much time. If he didn't think about what sort of profession he wanted to pursue, he would most likely waste time on things unproductive to a greater goal or worse, pursue things that would hinder him.
For example, let's say that Bill doesn't know what to pursue as a career and just blindly goes to college to major in French without a real passion for it. After 3 years in, he realizes that a major in French doesn't have the best job prospects. He then decides to switch his major to electric engineering. He effectively wasted at least one or semesters worth of French classes that most likely won't be needed for the engineering degree. In this case this is a loss, but the loss could have been worse if Bill graduated with a degree in French, didn't find a good job, and then decided to go back to college for engineering.
Since your life is limited, it is very important to be as efficient with life as possible. Even if what you decide to pursue doesn't work out, it is important to be working towards something or accumulating wealth and resources. The reason for this is that you can then try again and figure out what you do want in life.
Let's say that after a few years working as an engineer, Bill absolutely hates it. Bill is 35, has no debt, and has saved up a lot of cash from working as an engineer. At this point, he has the option to figure out what else he would like to do with life. Maybe he would be happier as a IT specialist or a welder. With all the money Bill saved up, he has the option to quit being an engineer and chose a different career because he has money to pay his ...... living expenses.
Since everyone has living expenses to pay, it is important to accumulate wealth and resources even when you do not know what it is you want most out of life. Having wealth and resources will make it easier for you to obtain what you want the most because you won't have to worry about having to support yourself as much.
Now if your ultimate life goal is to retire and minimize the amount of work you have to do, this is a decision you have to make as soon as possible. To grow the most amount of wealth, you have to streamline your expenses to the bare minimum and use most of the excess cash to invest. Since investments are risky and not guaranteed, it would behoove any man to spend as much time researching and studying different investments and how to invest.
I'd invite anyone who reads this post to ask as many people the important question.
What do you want most out of life?
Unfortunately, it saddens me to report that most of my peers have no idea how to answer this question.
Tuesday, December 30, 2014
Saturday, December 27, 2014
Increase your emergency fund past 6 months
Last year, I wrote this post on how to structure your finances. This is basic information taught by financial professionals. One of the steps is to have somewhere from 3 to 6 months of your paycheck in liquid cash (checking or savings) in case of an emergency such as loss of job, medical expenses, home repairs, or car maintenance. However, I feel this recommendation is a little bit dated.
This information probably doesn't take into account the current state of our economy. I remember the financial meltdown of 2008. I also remember my job search at the end of 2012. It took 7 months and 16 interviews to make it to the next job in May 2013.
It is for this reason I would encourage everyone to keep more than 6 months of paychecks in checking or savings accounts. I'd recommend holding on to at least a year to two years of your living expenses in checking or savings.
There are advantages and disadvantages to doing this. In doing this, you have extra security in the case finding a new source of income takes longer than 6 months. Also, in the case of emergencies, you have cash to pay for unexpected expenses and don't have to borrow money. Since you don't have to borrow money, you don't need to pay interest.
The disadvantages include the following. In the case of losing a job, you might get a little lazy in finding a new job because you have money you can live off of. The other major disadvantage is that in keeping money liquid, that money probably isn't being invested and making a return.
Decide how much risk you are willing to bear. You can then decide how much emergency fund you want to have.
This information probably doesn't take into account the current state of our economy. I remember the financial meltdown of 2008. I also remember my job search at the end of 2012. It took 7 months and 16 interviews to make it to the next job in May 2013.
It is for this reason I would encourage everyone to keep more than 6 months of paychecks in checking or savings accounts. I'd recommend holding on to at least a year to two years of your living expenses in checking or savings.
There are advantages and disadvantages to doing this. In doing this, you have extra security in the case finding a new source of income takes longer than 6 months. Also, in the case of emergencies, you have cash to pay for unexpected expenses and don't have to borrow money. Since you don't have to borrow money, you don't need to pay interest.
The disadvantages include the following. In the case of losing a job, you might get a little lazy in finding a new job because you have money you can live off of. The other major disadvantage is that in keeping money liquid, that money probably isn't being invested and making a return.
Decide how much risk you are willing to bear. You can then decide how much emergency fund you want to have.
Thursday, December 25, 2014
How secure is FDIC?
Zero Hedge is probably the only place I trust to get news. The reason for this is that Zero Hedge offers tons of data, charts, and information. It also covers a lot of topics not really touched by the mainstream media. After all the MSM only covers the same eight things over and over.
A few nights ago, I came across an article on Zero Hedge that was completely disturbing. To sum it up, new legislation is being passed to cover financial derivatives under FDIC. The financial derivatives would take precedence before bank deposits.
When I was younger, I had the question of what would happen if a bank failed today. What would happen to the deposit of a customer. People told me that if the bank were to fail, the government has an insurance program that would reimburse the customer up to $250,000. At the time, I was satisfied with the answer.
I was satisfied with the answer until I thought of the following question. What would happen if the FDIC were to fail?
If the FDIC were to fail, then the holder of the bank deposit would be out of luck. So, how much money is in the FDIC?
A quick Google search found me the answer also at Zero Hedge. As of March 19 2013, the FDIC has only $25 billion in the program. $25 billion may seem like a lot, but this amount is meant to insure $9.3 trillion in bank deposits. FDIC accounts for not even 1 percent of the total amount of bank deposits.
With recent legislation, FDIC will have to guarantee financial derivatives as well. Today, there are more than $300 trillion worth of derivatives.
If you feel the need, take whatever measures you can to mitigate your risk.
A few nights ago, I came across an article on Zero Hedge that was completely disturbing. To sum it up, new legislation is being passed to cover financial derivatives under FDIC. The financial derivatives would take precedence before bank deposits.
When I was younger, I had the question of what would happen if a bank failed today. What would happen to the deposit of a customer. People told me that if the bank were to fail, the government has an insurance program that would reimburse the customer up to $250,000. At the time, I was satisfied with the answer.
I was satisfied with the answer until I thought of the following question. What would happen if the FDIC were to fail?
If the FDIC were to fail, then the holder of the bank deposit would be out of luck. So, how much money is in the FDIC?
A quick Google search found me the answer also at Zero Hedge. As of March 19 2013, the FDIC has only $25 billion in the program. $25 billion may seem like a lot, but this amount is meant to insure $9.3 trillion in bank deposits. FDIC accounts for not even 1 percent of the total amount of bank deposits.
With recent legislation, FDIC will have to guarantee financial derivatives as well. Today, there are more than $300 trillion worth of derivatives.
If you feel the need, take whatever measures you can to mitigate your risk.
Tuesday, December 23, 2014
The countdown application
In 16 months, I'll be achieving a major lifetime goal. I've been working at this goal since 2010 and I've been thinking about it constantly for the last year.
I've taken the time to find a website application that would countdown the days until I achieve the goal. The application is found here at time and date. The countdown is set to May 1st 2016. However, if you have a long term goal you are working on, you can set the countdown to any date you want in the future. Bookmark the page and you can see your progress every single day.
I guess I might be a little neurotic. I have to check the countdown everyday. As of today, there are 493 days left to go.
I've taken the time to find a website application that would countdown the days until I achieve the goal. The application is found here at time and date. The countdown is set to May 1st 2016. However, if you have a long term goal you are working on, you can set the countdown to any date you want in the future. Bookmark the page and you can see your progress every single day.
I guess I might be a little neurotic. I have to check the countdown everyday. As of today, there are 493 days left to go.
Monday, December 22, 2014
Thirst for freedom
Lately, I've found myself listening to a lot of MGTOW videos on youtube. With all the work I have to do everyday, I have the opportunity to listen to a lot of podcasts. Often time, I'll view an entire users work and have to wait for new content to come out. In the meantime, I can look for other channels and podcasts to listen to.
In the last week, I just finished listening to all of the videos from Ravishing Rick Rude. His work is great. I love the intro and that this guy pretends to be the actual wrestler. The funniest thing I remember him saying was the ancient aliens girl from the types of girls you find online.
I thought to myself why I was listening to so many MGTOW videos and then I realized it. Most of the MGTOW videos I listen to talk about freedom, keeping your freedom, or becoming free. This videos promote the ideas of getting your finances in order, avoiding dangerous life threatening traps, or improving your current situation. Becoming something better.
I then started thinking about this. Where else is freedom promoted? Where else can I find media promoting freedom outside of the manosphere?
It sure isn't found in the school systems. The school system never teaches you how to live your life or how to plan your finances. Freedom isn't promoted by the government. The federal government encourages you to put money in plans such as the IRA or 401k which locks your money away until you are in your 60's. The government uses tax breaks and the possibility of good returns at the cost of your liquidity.
Freedom isn't found in our legal system. When a person gets fired or arrested for having an unpopular opinion, this isn't freedom.
Freedom isn't found in our media. Media can trap a man on average for a few hours a day preventing him from working on more useful or productive projects.
Our country was founded because a bunch of guys raised hell over a small tax over tea. Why does it seem like most Americans today just don't care about being free?
Sure, today we aren't starving to death and there isn't some dictator holding a gun to our heads forcing us to harvest potatoes but are we really free?
Until I make it to the day where I can wake up and realize that I can spend the next 16 hours doing whatever I like until I fall asleep, I'll still be thirsting for my freedom.
I'll still be working. I'll still be out there grinding through traffic, working 12 hours a day, and working weekends collecting every resource I can.
Until I earn enough money to finally buy the level of freedom I want, I'll still be listening to these videos for encouragement and waiting for my freedom.
In the last week, I just finished listening to all of the videos from Ravishing Rick Rude. His work is great. I love the intro and that this guy pretends to be the actual wrestler. The funniest thing I remember him saying was the ancient aliens girl from the types of girls you find online.
I thought to myself why I was listening to so many MGTOW videos and then I realized it. Most of the MGTOW videos I listen to talk about freedom, keeping your freedom, or becoming free. This videos promote the ideas of getting your finances in order, avoiding dangerous life threatening traps, or improving your current situation. Becoming something better.
I then started thinking about this. Where else is freedom promoted? Where else can I find media promoting freedom outside of the manosphere?
It sure isn't found in the school systems. The school system never teaches you how to live your life or how to plan your finances. Freedom isn't promoted by the government. The federal government encourages you to put money in plans such as the IRA or 401k which locks your money away until you are in your 60's. The government uses tax breaks and the possibility of good returns at the cost of your liquidity.
Freedom isn't found in our legal system. When a person gets fired or arrested for having an unpopular opinion, this isn't freedom.
Freedom isn't found in our media. Media can trap a man on average for a few hours a day preventing him from working on more useful or productive projects.
Our country was founded because a bunch of guys raised hell over a small tax over tea. Why does it seem like most Americans today just don't care about being free?
Sure, today we aren't starving to death and there isn't some dictator holding a gun to our heads forcing us to harvest potatoes but are we really free?
Until I make it to the day where I can wake up and realize that I can spend the next 16 hours doing whatever I like until I fall asleep, I'll still be thirsting for my freedom.
I'll still be working. I'll still be out there grinding through traffic, working 12 hours a day, and working weekends collecting every resource I can.
Until I earn enough money to finally buy the level of freedom I want, I'll still be listening to these videos for encouragement and waiting for my freedom.
Saturday, December 20, 2014
The 50 beer challenge
Beer is great. It tastes wonderful, it makes you feel pretty good, and one or two drinks can make you a little more sociable.
Beer does have a lot of negative effects. It destroys your liver. It makes you unsafe to drive. It can become an addiction.
How much alcohol should a man consume? It is different for everyone.
How much alcohol does it take to become an alcoholic? That is an easier question to answer. Sort of.
A quick search through Wikipedia for Alcoholism brings up the Dietary Guidelines for Americans. The guidelines state that moderate consumption of alcohol is no more than 2 alcoholic drinks a day for men and 1 alcoholic drink a day for women. Moderate use of alcohol most likely would not be considered alcoholism but drinking 365 to 730 beers in a year would have detrimental effects on the liver.
I think I may be more risk adverse than most men. Almost each time I have a beer, I feel slightly bad about having it because it is causing harm to my liver. And I know that without discipline, it can be very easy to consume more and more beer. I do have a couple of friends that drink a case of beer throughout a week.
So I wanted to do something to make sure I don't become an alcoholic. The best thing I could think of was to keep track of all the beers I drink and try to scale the amount down year after year.
The first year, I just drank normally so I could have a bench mark to use for the future. When 2013 was finished, I drank a total of 45 or 46 beers.
When I told my friends this, they told me I was crazy. I am nowhere even close to becoming an alcoholic. And that is exactly where I want to keep it. I want to try to live to the age of 88.
So this is the 50 beer challenge.
Keep track of all the alcoholic drinks you consume and keep it under 50. If 50 is too difficult, you can always scale the number to something that is more realistic. Maybe on man will struggle to keep it under 100 and a different guy could easily keep it under 20.
Setting a goal like this is a SMART goal.
1. It is specific. Drink less than a certain amount of alcohol.
2. It is measurable. You can keep track of all the drinks in a notebook or excel file.
3. I forgot what the A stood for in this acronym. Maybe it stood for action driven.
4. It is realistic.
5. It is time specific. One year.
It is really important to have a realistic goal. It is very common to hear about some guy making a New Year's resolution to give up beer for an entire year and failing in March. After that he goes back to his regular habits and ends up drinking 80 beers whereas if he set the goal to 60 beers, he could have achieved the goal.
Beer does have a lot of negative effects. It destroys your liver. It makes you unsafe to drive. It can become an addiction.
How much alcohol should a man consume? It is different for everyone.
How much alcohol does it take to become an alcoholic? That is an easier question to answer. Sort of.
A quick search through Wikipedia for Alcoholism brings up the Dietary Guidelines for Americans. The guidelines state that moderate consumption of alcohol is no more than 2 alcoholic drinks a day for men and 1 alcoholic drink a day for women. Moderate use of alcohol most likely would not be considered alcoholism but drinking 365 to 730 beers in a year would have detrimental effects on the liver.
I think I may be more risk adverse than most men. Almost each time I have a beer, I feel slightly bad about having it because it is causing harm to my liver. And I know that without discipline, it can be very easy to consume more and more beer. I do have a couple of friends that drink a case of beer throughout a week.
So I wanted to do something to make sure I don't become an alcoholic. The best thing I could think of was to keep track of all the beers I drink and try to scale the amount down year after year.
The first year, I just drank normally so I could have a bench mark to use for the future. When 2013 was finished, I drank a total of 45 or 46 beers.
When I told my friends this, they told me I was crazy. I am nowhere even close to becoming an alcoholic. And that is exactly where I want to keep it. I want to try to live to the age of 88.
So this is the 50 beer challenge.
Keep track of all the alcoholic drinks you consume and keep it under 50. If 50 is too difficult, you can always scale the number to something that is more realistic. Maybe on man will struggle to keep it under 100 and a different guy could easily keep it under 20.
Setting a goal like this is a SMART goal.
1. It is specific. Drink less than a certain amount of alcohol.
2. It is measurable. You can keep track of all the drinks in a notebook or excel file.
3. I forgot what the A stood for in this acronym. Maybe it stood for action driven.
4. It is realistic.
5. It is time specific. One year.
It is really important to have a realistic goal. It is very common to hear about some guy making a New Year's resolution to give up beer for an entire year and failing in March. After that he goes back to his regular habits and ends up drinking 80 beers whereas if he set the goal to 60 beers, he could have achieved the goal.
Friday, December 19, 2014
Where you want to be in any negotiation.
Inevitably, going through life, you will get into different situations where you may have the option to negotiate for something. This can included different situations like negotiating the price for a car, your salary in a job offer, business contracts, or even favors.
A lot of people don't have very much experience in negotiating, myself included. I can only think of a few instances where I had a very successful negotiation.
Back in college, I remember students could take classes on negotiation. Those classes were part of the managerial sciences degree. I guess you could take a class and spend a few hundred dollars on it but you could probably get a better value just by buying a few books and reading up on different negotiation skills.
Using some common sense, it is important to do a few things before any negotiation. Make sure you know what you and the other party want. Do as much research as you can about the other party.
Unfortunately, the most important part of getting the most out of you negotiation may be far out of your control. To get the most out off your negotiation, you have to be in a position where you don't need what the other guy has.
If you are in a position where you don't need the job/car/contract/etc, you are in a no lose situation. If you make a ridiculous offer and the other party rejects it outright, you win because you didn't need the thing. It would be like a millionaire going to a BMW dealership and offering to pay only $40,000 for a BMW that costs $60,000 and not getting it. He doesn't get the car but he wins because the car is not important and he is a millionaire.
If you are in a position where you don't need the job/car/contract/etc and you make a ridiculous offer and the other party accepts it, then you win. You got a lot more than you would have otherwise.
Say the millionaire in the last example made the same offer and received the car for $40,000, he just saved $20,000 where otherwise he would have paid the full price.
I've only really experienced this once.
Back in college, I had a friend that I would workout with regularly. It was great because our tuition automatically paid for our access to using the recreational center. When Summer semester was over, my buddy and I didn't have a good enough reason to commute downtown. It wasn't worth it to commute just do workout.
He had a good idea. For the month we had off before starting classes in the Fall, we would just go some place locally. When we got there, my friend was talking to the fitness instructor and the instructor was detailing to us all the different plans available and the features and costs. He was really intent on selling us a plan that lasted either 6 months or half a year. My friend started getting nervous.
So, I did some fast talking. I had to explain that we just needed something for one month. I had to explain the fact that my university had a great rec center that I will be going back to in the fall and I did not want to spend money on a plan for at least 6 months when I'll only use it for one month.
Lastly, I asked him if there was anything available where we could pay for a membership that lasted only one month.
Doing these things (explaining the situation, what you need, and what you are willing to pay for), this cut through all of the fluff and extra offers. The instructor was able to give us a membership for just one month for either $20 or $30. Completely worth it.
The absolutely worst thing I could have done was just go along with the 6 month plan and shell out $120 to $150.
I've the instructor rejected my request, it would have been no big deal. I would have the campus rec center one month later.
Getting into the position where you don't need what the other guy has is the tricky part but it is the most important thing to do to have the easiest time negotiating.
A lot of people don't have very much experience in negotiating, myself included. I can only think of a few instances where I had a very successful negotiation.
Back in college, I remember students could take classes on negotiation. Those classes were part of the managerial sciences degree. I guess you could take a class and spend a few hundred dollars on it but you could probably get a better value just by buying a few books and reading up on different negotiation skills.
Using some common sense, it is important to do a few things before any negotiation. Make sure you know what you and the other party want. Do as much research as you can about the other party.
Unfortunately, the most important part of getting the most out of you negotiation may be far out of your control. To get the most out off your negotiation, you have to be in a position where you don't need what the other guy has.
If you are in a position where you don't need the job/car/contract/etc, you are in a no lose situation. If you make a ridiculous offer and the other party rejects it outright, you win because you didn't need the thing. It would be like a millionaire going to a BMW dealership and offering to pay only $40,000 for a BMW that costs $60,000 and not getting it. He doesn't get the car but he wins because the car is not important and he is a millionaire.
If you are in a position where you don't need the job/car/contract/etc and you make a ridiculous offer and the other party accepts it, then you win. You got a lot more than you would have otherwise.
Say the millionaire in the last example made the same offer and received the car for $40,000, he just saved $20,000 where otherwise he would have paid the full price.
I've only really experienced this once.
Back in college, I had a friend that I would workout with regularly. It was great because our tuition automatically paid for our access to using the recreational center. When Summer semester was over, my buddy and I didn't have a good enough reason to commute downtown. It wasn't worth it to commute just do workout.
He had a good idea. For the month we had off before starting classes in the Fall, we would just go some place locally. When we got there, my friend was talking to the fitness instructor and the instructor was detailing to us all the different plans available and the features and costs. He was really intent on selling us a plan that lasted either 6 months or half a year. My friend started getting nervous.
So, I did some fast talking. I had to explain that we just needed something for one month. I had to explain the fact that my university had a great rec center that I will be going back to in the fall and I did not want to spend money on a plan for at least 6 months when I'll only use it for one month.
Lastly, I asked him if there was anything available where we could pay for a membership that lasted only one month.
Doing these things (explaining the situation, what you need, and what you are willing to pay for), this cut through all of the fluff and extra offers. The instructor was able to give us a membership for just one month for either $20 or $30. Completely worth it.
The absolutely worst thing I could have done was just go along with the 6 month plan and shell out $120 to $150.
I've the instructor rejected my request, it would have been no big deal. I would have the campus rec center one month later.
Getting into the position where you don't need what the other guy has is the tricky part but it is the most important thing to do to have the easiest time negotiating.
Tuesday, December 16, 2014
When will we know there is a true recovery?
I was talking to my boss at work the other day. I like to ask him about his opinions about the economy. In particular, I was asking him what he thought about Keynesian versus Austrian economics.
I'm a firm believer in Austrian economics but I do have questions about why people think Keynesian economics is the correct school of thought. After listening to general opinions in the manosphere, I gathered that Keynesian economics only really worked in the period of time right after the great depression.
My boss told me it was working now.
To which, I was very surprised. How is it working? The first thing I started thinking about was QE 3. QE 3 was great for boosting stock prices but it was horrible for indirectly causing increasing food prices.
I'll admit, I am no expert on economics. I find it interesting but there is a lot of stuff I just don't know. I don't watch the mainstream media. At least not directly. I hear some commentary about the mainstream media.
I guess the media always tries to say that the economy is great and we are booming. I don't buy it for a minute though.
Thanks to Cappy, Stefan Molyneux, and Peter Schiff; I have a few good reasons for believing that we are still declining as a country.
1. The only way to increase standards of living for America as a whole is to get as many people producing things. Unfortunately, the labor force participation rate peaked around 1999 or 2000 at 67% and has been steadily declining ever since. Today, the labor force participation rate is less than 63%.
2. America spends more than it makes. Just recently our national debt passed $18 trillion. Just about every year, our country runs a deficit. I've checked our national debt clock and I see our yearly deficit decreasing steadily. This is a good thing, if it was legit. Last year, I checked the national debit clock and saw that annual deficit was more than 1 trillion. After a few days, the deficit ran down to about 500 or 600 billion. How did that happen? They just stopped counting some things in the calculation.
3. Unfunded liabilities of over $120 trillion and still climbing.
4. Increasing prices. I'm pretty sure anyone who shops for groceries can see increasing food prices. Some would say that the increased prices are offset by gas falling. However, I just think about how health insurance got way more expensive in the last year.
The only way I could see a true recovery is if I see a few economic indicators turn around.
If our labor force participation rate increases, national debt starts decreasing, and prices stop increasing; I will then believe that we would be in a real recovery.
I'm a firm believer in Austrian economics but I do have questions about why people think Keynesian economics is the correct school of thought. After listening to general opinions in the manosphere, I gathered that Keynesian economics only really worked in the period of time right after the great depression.
My boss told me it was working now.
To which, I was very surprised. How is it working? The first thing I started thinking about was QE 3. QE 3 was great for boosting stock prices but it was horrible for indirectly causing increasing food prices.
I'll admit, I am no expert on economics. I find it interesting but there is a lot of stuff I just don't know. I don't watch the mainstream media. At least not directly. I hear some commentary about the mainstream media.
I guess the media always tries to say that the economy is great and we are booming. I don't buy it for a minute though.
Thanks to Cappy, Stefan Molyneux, and Peter Schiff; I have a few good reasons for believing that we are still declining as a country.
1. The only way to increase standards of living for America as a whole is to get as many people producing things. Unfortunately, the labor force participation rate peaked around 1999 or 2000 at 67% and has been steadily declining ever since. Today, the labor force participation rate is less than 63%.
2. America spends more than it makes. Just recently our national debt passed $18 trillion. Just about every year, our country runs a deficit. I've checked our national debt clock and I see our yearly deficit decreasing steadily. This is a good thing, if it was legit. Last year, I checked the national debit clock and saw that annual deficit was more than 1 trillion. After a few days, the deficit ran down to about 500 or 600 billion. How did that happen? They just stopped counting some things in the calculation.
3. Unfunded liabilities of over $120 trillion and still climbing.
4. Increasing prices. I'm pretty sure anyone who shops for groceries can see increasing food prices. Some would say that the increased prices are offset by gas falling. However, I just think about how health insurance got way more expensive in the last year.
The only way I could see a true recovery is if I see a few economic indicators turn around.
If our labor force participation rate increases, national debt starts decreasing, and prices stop increasing; I will then believe that we would be in a real recovery.
Saturday, December 13, 2014
Value is largely intangible
At work, my mind tends to wander while I complete my assignments. Sometimes my mind goes in crazy directions like wondering how old Spongebob Square pants is. As it turns out, he is roughly 27 years old. I think about random facts like how much Serena Williams or Justin Beiber could bench press. I've wondered if grenades really can explode if you shoot them with bullets. Mostly, I think about absolutely useless and trivia information.
One day, I was thinking about value. After all, cost and value aren't necessary the same. I really enjoy coffee and a cup of coffee at McDonald's costs one dollar. It costs one dollar, but if it costed $1.50, I would still buy it. In some cases, I would pay $2 or $2.25 for a cup of coffee. I guess that is what I value a cup of coffee.
Then I started thinking about cars. I absolutely hate luxury cars. Not because of how they drive or perform, I hate luxury cars because they are an insane waste of money. As of today, 2014 BMW 5 series start out with a selling price of $50,000. To compare this price with the price of a new car, a 2014 Honda Civic starts off with a selling price of $18,000. $18,000 is the price of a new Honda Civic, the same model but older years will be cheaper.
At $50,000, I could easily buy a 2014 BMW 5 series, but I could never justify it. I could only justify buying a luxury car if I had more than enough money for the rest of my lifetime. Despite this opinion, BMW's and other luxury cars are quite common. I'm sure everyone sees a couple of them every day while commuting. So every time I see a luxury car, I think of this video from Cappy. Most of the people that drive these cars don't completely own them.
At that point, I started thinking about cost versus value. A new BMW costs $50,000 but as soon as you drive it off the lot, it becomes a used car and immediately the value goes down.
$50,000 isn't just the cost of all the materials that go into the car. If you took a new BMW and got it going to 70 mph and crash it into a brick wall, that car will smash into thousands of pieces. Theoretically, you could collect all the pieces, all the metal, plastic, and rubber and collect it into the pile. You will have all the same materials as a brand new BMW but the value of the car drastically goes down. At that point, the value of the car is just going to be scrap materials. Maybe you can get a few hundred dollars for it. The same can be said for any car. Smash a 2014 Honda Civic into a brick wall, the value goes from $18,000 to a few hundred dollars.
When anyone spends $50,000 for a car, only maybe a few hundred dollars to a few thousand dollars of that value comes from having the ability to drive. The reason for this is that a used car can be purchased for a few hundred to a few thousand dollars.
A few more thousand dollars of value comes from having a new car that most likely won't have mechanical issues for a couple of years.
The bulk of the value of having a luxury car is the appearance of status. Of all the things a man could spend money on, it is never a wise decision to waste $40,000 to look like you have one million dollars. That $40,000 could have been spent on much more useful things like your living expenses or investments that could provide a good return in the future.
One day, I was thinking about value. After all, cost and value aren't necessary the same. I really enjoy coffee and a cup of coffee at McDonald's costs one dollar. It costs one dollar, but if it costed $1.50, I would still buy it. In some cases, I would pay $2 or $2.25 for a cup of coffee. I guess that is what I value a cup of coffee.
Then I started thinking about cars. I absolutely hate luxury cars. Not because of how they drive or perform, I hate luxury cars because they are an insane waste of money. As of today, 2014 BMW 5 series start out with a selling price of $50,000. To compare this price with the price of a new car, a 2014 Honda Civic starts off with a selling price of $18,000. $18,000 is the price of a new Honda Civic, the same model but older years will be cheaper.
At $50,000, I could easily buy a 2014 BMW 5 series, but I could never justify it. I could only justify buying a luxury car if I had more than enough money for the rest of my lifetime. Despite this opinion, BMW's and other luxury cars are quite common. I'm sure everyone sees a couple of them every day while commuting. So every time I see a luxury car, I think of this video from Cappy. Most of the people that drive these cars don't completely own them.
At that point, I started thinking about cost versus value. A new BMW costs $50,000 but as soon as you drive it off the lot, it becomes a used car and immediately the value goes down.
$50,000 isn't just the cost of all the materials that go into the car. If you took a new BMW and got it going to 70 mph and crash it into a brick wall, that car will smash into thousands of pieces. Theoretically, you could collect all the pieces, all the metal, plastic, and rubber and collect it into the pile. You will have all the same materials as a brand new BMW but the value of the car drastically goes down. At that point, the value of the car is just going to be scrap materials. Maybe you can get a few hundred dollars for it. The same can be said for any car. Smash a 2014 Honda Civic into a brick wall, the value goes from $18,000 to a few hundred dollars.
When anyone spends $50,000 for a car, only maybe a few hundred dollars to a few thousand dollars of that value comes from having the ability to drive. The reason for this is that a used car can be purchased for a few hundred to a few thousand dollars.
A few more thousand dollars of value comes from having a new car that most likely won't have mechanical issues for a couple of years.
The bulk of the value of having a luxury car is the appearance of status. Of all the things a man could spend money on, it is never a wise decision to waste $40,000 to look like you have one million dollars. That $40,000 could have been spent on much more useful things like your living expenses or investments that could provide a good return in the future.
Tuesday, December 2, 2014
Post for posterity: QE 4 in 2015
This post is purely for posterity.
I am making the prediction that the federal government will launch Quantitative Easing 4 within the first half of 2015. If I am wrong about the timeline, I will expand my estimate to the entire year of 2015.
I am making this prediction because I think Peter Schiff is a sound economist and I value his insights a lot. He keeps saying a country that lives by QE will die by QE.
I also think Stefan Molyneux put together a very sound presentation (There will be no economic recovery).
After looking at the labor force participation rate, total number of people not working, and other economic indicators, I do not have very much faith in our country's economic future.
Once again, this post is purely for posterity. I would be very happy if we never did quantitative easing again but that can't be the case.
I am making the prediction that the federal government will launch Quantitative Easing 4 within the first half of 2015. If I am wrong about the timeline, I will expand my estimate to the entire year of 2015.
I am making this prediction because I think Peter Schiff is a sound economist and I value his insights a lot. He keeps saying a country that lives by QE will die by QE.
I also think Stefan Molyneux put together a very sound presentation (There will be no economic recovery).
After looking at the labor force participation rate, total number of people not working, and other economic indicators, I do not have very much faith in our country's economic future.
Once again, this post is purely for posterity. I would be very happy if we never did quantitative easing again but that can't be the case.
Sunday, November 30, 2014
Suffering though the microwave hallway
The beginning of every single month is always the worst time for me because it is always the busiest part of every month.
I've been working towards a major goal for the last 4 years. And after another 17 months, I will have achieved my goal and I'll figure out what I want to do after that.
In the last 4 years while working towards this goal, I've had times where I've wanted to shoot myself in the head, drive my car off a cliff, or just give up everything I've worked on just to live in a van in the desert.
What is the best way I could describe this struggle? I would say it would feel like the time I was playing Metal Gear Solid 4 and crawling though the microwave hallway.
It is a pretty moving scene. You have to navigate through a heat filled energy draining hallway in order to get to upload a virus to a computer. This scene happens right after Snake suffers a heart attack so you start out moving in the hallway at half speed. You want to move through this hallway as fast as possible but you don't have the option to run.
As you move, you notice your life bar is decreasing which urges you to try to move as fast as possible. But you can't run. As you progress, the nano machines in Snake's body start malfunctioning and Snake's body starts shutting down. You start limping at that point. All the while your life bar keeps depleting.
After some time, it keeps getting worse. Snake falls to the floor and your control stick stops working. To move Snake through the hallway, you have to start mashing the triangle button. So Snake starts crawling on his hands and knees to get out of the hallway.
By this point, the life bar is almost completely depleted. You might not be sure if it is empty or not but there is just one small little line left. You then notice that you stamina bar is depleting as well. You aren't sure if you are going to die in this hallway or not. Can you make it out in time?
Snake keeps suffering as the nano machines keep breaking. Snake falls to the floor again. You have to mash the button really hard just to get him up and moving again. So you see Snake move, he is crawling on his belly now. Using the shifting weight of his body to pull him forward. In order to hurry Snake along, you start getting pain in your thumb from mashing the button.
Eventually, you see the exit open and it looks like you have enough stamina to make it out of the hallway. But then Snake falls again. As the camera zooms in on his face, you mash the button to get Snake to drag his arms forward to try to make it out. Your stamina completely empties as the camera fades to black.
And you are left wondering. Is it over? Did I make it? Did I die?
Then the now loading screen comes up and you are glad you don't have to redo the hallway part.
Anyone working towards a really important life goal, realize that it is going to suck. It is going to feel miserable, isolating, painful, and probably lonely. You will have to make intense sacrifices. But, just like Snake in that hallway, you have to keep going and get out of there. You may be stuck in a situation where there is no other option. You have to either make it happen or perish trying.
I've been working towards a major goal for the last 4 years. And after another 17 months, I will have achieved my goal and I'll figure out what I want to do after that.
In the last 4 years while working towards this goal, I've had times where I've wanted to shoot myself in the head, drive my car off a cliff, or just give up everything I've worked on just to live in a van in the desert.
What is the best way I could describe this struggle? I would say it would feel like the time I was playing Metal Gear Solid 4 and crawling though the microwave hallway.
It is a pretty moving scene. You have to navigate through a heat filled energy draining hallway in order to get to upload a virus to a computer. This scene happens right after Snake suffers a heart attack so you start out moving in the hallway at half speed. You want to move through this hallway as fast as possible but you don't have the option to run.
As you move, you notice your life bar is decreasing which urges you to try to move as fast as possible. But you can't run. As you progress, the nano machines in Snake's body start malfunctioning and Snake's body starts shutting down. You start limping at that point. All the while your life bar keeps depleting.
After some time, it keeps getting worse. Snake falls to the floor and your control stick stops working. To move Snake through the hallway, you have to start mashing the triangle button. So Snake starts crawling on his hands and knees to get out of the hallway.
By this point, the life bar is almost completely depleted. You might not be sure if it is empty or not but there is just one small little line left. You then notice that you stamina bar is depleting as well. You aren't sure if you are going to die in this hallway or not. Can you make it out in time?
Snake keeps suffering as the nano machines keep breaking. Snake falls to the floor again. You have to mash the button really hard just to get him up and moving again. So you see Snake move, he is crawling on his belly now. Using the shifting weight of his body to pull him forward. In order to hurry Snake along, you start getting pain in your thumb from mashing the button.
Eventually, you see the exit open and it looks like you have enough stamina to make it out of the hallway. But then Snake falls again. As the camera zooms in on his face, you mash the button to get Snake to drag his arms forward to try to make it out. Your stamina completely empties as the camera fades to black.
And you are left wondering. Is it over? Did I make it? Did I die?
Then the now loading screen comes up and you are glad you don't have to redo the hallway part.
Anyone working towards a really important life goal, realize that it is going to suck. It is going to feel miserable, isolating, painful, and probably lonely. You will have to make intense sacrifices. But, just like Snake in that hallway, you have to keep going and get out of there. You may be stuck in a situation where there is no other option. You have to either make it happen or perish trying.
Saturday, November 29, 2014
Testimony of an accounting major
It's felt like forever since I graduated college. I wanted to write this for the people who are deciding to go to college but don't know what to major in. I also want to write this for the students who are one or two years in but haven't decided on a major yet.
First off, I would encourage people to go into the trades like plumbing, construction, or mechanics. The reason for this is that these usually only require a two year certification. A lot of college will be a complete waste of time.
I went to college for accounting, yet I was taking classes like American Folklore, Introduction to Film, Nutrition, and Psychology.
If you must go to college, make sure you pick a major in STEM or with good employment prospects.
Make sure to research starting salaries and if you are likely to get hired upon graduation.
I did none of this when I left high school. I guess I just got really luck.
The whole reason why I chose to major in accounting was as following.
I wanted to be a business major and accounting stated with an A.
Ok, it wasn't that simple of logic but it was pretty close. I chose accounting after figuring out not what I liked in high school but what I loathed.
I absolutely hated, English, foreign languages, chemistry, and physics. This didn't leave me with very many options. My logic was that all I had left was business and majoring in business would be a safe bet because America is full of businesses. BUSINESS. I'm going to major in BUSINESS.
If I had to do research for job prospects today, accounting is okay and pretty safe.
1. You can become a staff accountant with just a bachelor's degree. You don't need advanced certifications, a master's degree, or pass a $600 test.
2. According to payscale, the median salary for a staff accountant is $44,500 a year.
3. There is room to advance and get promotions to senior accountant, accounting manager, CPA, controller, etc.
As for getting the degree, it wasn't too painful. It actually seemed like the path of least resistance for me in college. Keep in mind these may be different for where you go to college.
1. I was not required to take any higher level math beyond basic algebra and statistics.
2. I was not required to take a foreign language.
3. I was not required to take complicated science courses such as chemistry and physics.
I was require to take a lot of useless classes but that would have been the case with any major I took. Out of 120 credit hours I needed to graduate, only 24 credit hours were accounting classes.
These are the accounting classes I took. Your experience may vary.
1. Principles of Accounting 1
This class is an overview of accounting in general. You learn what assets and liabilities are. You learn what information is listed on the 4 basic financial statements. You learn how to make basic journal entries. You learn about the concept of how assets depreciate. You also learn how bank reconciliations are done and how to do a break even point analysis. I also remember learning how to calculate cost of goods sold and how to make adjusting entries.
2. Principles of Accounting 2
This class is more or less finance. What that means is that 70% of this class is time value problems. You may use a financial calculator or tables in the back of the book to calculate problems about the present value or future value of a dollar. You learn about how to calculate the value of annuities and investments. I remember drawing a lot of timelines because some of the questions get kind of complex.
3. Professional Accounting
This class was very much a filler class. Luckily it was just one hour. You learn how to network, interview, and find a job in accounting. Unfortunately, they didn't give the best advice. Networking is absolutely terrible. Thank you cards and follow ups don't work. To find an accounting job, I had to apply and apply a lot.
4. Intermediate Accounting.
This class is an expansion of Accounting 1. You learn more FASB and IFRS concepts and how different situations would be treated. You learn more complex topics like how to handle accounting for leases. You delve further into creating depreciation schedules for different assets. You handle more complicated journal entries.
5. Transaction Analysis
This was a one credit hour class I took. It was also an expansion of Accounting 1. I do recall we went further into adjusting entries.
6. Cost Accounting
What I remember most about this class is variances. We took various figures and calculated ratios to determine why a result happened. If we use lower quality materials, we may produce a cheaper product but it breaks down faster. This class would be more relevant to me if I would for a manufacturing company. When you hear cost accounting, just remember variances.
7. Database Accounting
We used Microsoft Access to look for errors in accounting systems. This class was very light in actual accounting. What this class focuses on is showing you how to calculate different values on accounting systems using accounting software. I clearly remember creating queries to calculate cost of goods sold. You will also go into making flow charts.
8. Tax Accounting
We learned how business are taxed and how different entities are treated differently by our tax code. Tax law makes absolutely no sense and has no logic. Our professor said so himself. All you can do is memorize it. Which is completely not how the real world works. You can't memorize tax law. In the real world, we do research to find out how things are taxed. It is for this reason our professor let us take 3 note cards into our exams. This class has no actual accounting in it. No journal entries, no depreciation, no financial statements, no ratios.
9. Financial Statement Analysis
You learn how to take the financial statements of different companies and learn how to calculate different ratios to determine information about different companies. Some useful ratios are the current ratio, debt to equity ratio, and employee turnover rate.
10. Audit
This class was a pain. You learn assertions about how audits are done. Once again, there is no actual accounting here. You learn about different audit cases and how to handle different situations.
Accounting wasn't the easiest major. It was very methodical and process driven. It can be very repetitive and tedious. This is the case in college and actually working as an accountant. Keep in mind that when you first start working as an accountant, it is very likely that you won't use 80% or 90% of all the stuff you learned studying accounting (the 24 accounting hours I mentioned).
If you don't know what you want to major in, I would still recommend accounting.
First off, I would encourage people to go into the trades like plumbing, construction, or mechanics. The reason for this is that these usually only require a two year certification. A lot of college will be a complete waste of time.
I went to college for accounting, yet I was taking classes like American Folklore, Introduction to Film, Nutrition, and Psychology.
If you must go to college, make sure you pick a major in STEM or with good employment prospects.
Make sure to research starting salaries and if you are likely to get hired upon graduation.
I did none of this when I left high school. I guess I just got really luck.
The whole reason why I chose to major in accounting was as following.
I wanted to be a business major and accounting stated with an A.
Ok, it wasn't that simple of logic but it was pretty close. I chose accounting after figuring out not what I liked in high school but what I loathed.
I absolutely hated, English, foreign languages, chemistry, and physics. This didn't leave me with very many options. My logic was that all I had left was business and majoring in business would be a safe bet because America is full of businesses. BUSINESS. I'm going to major in BUSINESS.
If I had to do research for job prospects today, accounting is okay and pretty safe.
1. You can become a staff accountant with just a bachelor's degree. You don't need advanced certifications, a master's degree, or pass a $600 test.
2. According to payscale, the median salary for a staff accountant is $44,500 a year.
3. There is room to advance and get promotions to senior accountant, accounting manager, CPA, controller, etc.
As for getting the degree, it wasn't too painful. It actually seemed like the path of least resistance for me in college. Keep in mind these may be different for where you go to college.
1. I was not required to take any higher level math beyond basic algebra and statistics.
2. I was not required to take a foreign language.
3. I was not required to take complicated science courses such as chemistry and physics.
I was require to take a lot of useless classes but that would have been the case with any major I took. Out of 120 credit hours I needed to graduate, only 24 credit hours were accounting classes.
These are the accounting classes I took. Your experience may vary.
1. Principles of Accounting 1
This class is an overview of accounting in general. You learn what assets and liabilities are. You learn what information is listed on the 4 basic financial statements. You learn how to make basic journal entries. You learn about the concept of how assets depreciate. You also learn how bank reconciliations are done and how to do a break even point analysis. I also remember learning how to calculate cost of goods sold and how to make adjusting entries.
2. Principles of Accounting 2
This class is more or less finance. What that means is that 70% of this class is time value problems. You may use a financial calculator or tables in the back of the book to calculate problems about the present value or future value of a dollar. You learn about how to calculate the value of annuities and investments. I remember drawing a lot of timelines because some of the questions get kind of complex.
3. Professional Accounting
This class was very much a filler class. Luckily it was just one hour. You learn how to network, interview, and find a job in accounting. Unfortunately, they didn't give the best advice. Networking is absolutely terrible. Thank you cards and follow ups don't work. To find an accounting job, I had to apply and apply a lot.
4. Intermediate Accounting.
This class is an expansion of Accounting 1. You learn more FASB and IFRS concepts and how different situations would be treated. You learn more complex topics like how to handle accounting for leases. You delve further into creating depreciation schedules for different assets. You handle more complicated journal entries.
5. Transaction Analysis
This was a one credit hour class I took. It was also an expansion of Accounting 1. I do recall we went further into adjusting entries.
6. Cost Accounting
What I remember most about this class is variances. We took various figures and calculated ratios to determine why a result happened. If we use lower quality materials, we may produce a cheaper product but it breaks down faster. This class would be more relevant to me if I would for a manufacturing company. When you hear cost accounting, just remember variances.
7. Database Accounting
We used Microsoft Access to look for errors in accounting systems. This class was very light in actual accounting. What this class focuses on is showing you how to calculate different values on accounting systems using accounting software. I clearly remember creating queries to calculate cost of goods sold. You will also go into making flow charts.
8. Tax Accounting
We learned how business are taxed and how different entities are treated differently by our tax code. Tax law makes absolutely no sense and has no logic. Our professor said so himself. All you can do is memorize it. Which is completely not how the real world works. You can't memorize tax law. In the real world, we do research to find out how things are taxed. It is for this reason our professor let us take 3 note cards into our exams. This class has no actual accounting in it. No journal entries, no depreciation, no financial statements, no ratios.
9. Financial Statement Analysis
You learn how to take the financial statements of different companies and learn how to calculate different ratios to determine information about different companies. Some useful ratios are the current ratio, debt to equity ratio, and employee turnover rate.
10. Audit
This class was a pain. You learn assertions about how audits are done. Once again, there is no actual accounting here. You learn about different audit cases and how to handle different situations.
Accounting wasn't the easiest major. It was very methodical and process driven. It can be very repetitive and tedious. This is the case in college and actually working as an accountant. Keep in mind that when you first start working as an accountant, it is very likely that you won't use 80% or 90% of all the stuff you learned studying accounting (the 24 accounting hours I mentioned).
If you don't know what you want to major in, I would still recommend accounting.
Friday, November 28, 2014
Don't take the unemployment rate at face value.
The media will use the unemployment rate as one figure to indicate how well the economy is doing. If the unemployment rate is low, that is a good indication that the economy is recovering. This isn't necessarily the case though.
The average American thinks the unemployment rate is the total number of people not working divided by the sum of people not working and people working. What a lot of people might not realize is that the unemployment rate is calculated as follows.
Total number of people that are looking for work divided by the total labor force (people not working who are looking for work and people working.
If people stop looking for work, they aren't counted in the unemployment rate. When a man gives up on looking for a job, this actually makes the unemployment rate go down. We can take a look at this mathematically.
Let's pretend the total labor force is 100 people. Out of that hundred, 10 people are looking for work and 90 people are unemployed. Our unemployment rate is 10% (10/100).
After a few interviews, Bill gets a job manufacturing plastic flamingos.
Bill is now employed. Our total labor force still has 100 people. Out of which, 91 people are employed and 9 people are unemployed. Our unemployment rate is now 9%.
This is what we want, we want as much production as possible. However, let's see what would have happened if Bill just gave up.
So, instead of continuing the job search, Bill gets discouraged after 20 job interviews and 20 rejections. Bill decides to stop looking for work and either moves in back with his parents or goes on the government dole.
When Bill stops looking for work, he is removed from both the unemployed number and the labor force number.
Now our labor force is 99 people. Out of which, 90 people are employed and 9 people are unemployed.
The unemployment rate is now 9.09% (9/99).
This rate is still lower than the initial rate of 10%.
When looking at the unemployment rate, it is also useful to take a look at the labor force participation rate. The last time I checked, the labor force participation rate reached a peak in 1999 or 2000 at more than 67% and it has been declining ever since. Today the rate is at less than 63%.
These figures can be found at the Bureau of Labor Statistics.
The average American thinks the unemployment rate is the total number of people not working divided by the sum of people not working and people working. What a lot of people might not realize is that the unemployment rate is calculated as follows.
Total number of people that are looking for work divided by the total labor force (people not working who are looking for work and people working.
If people stop looking for work, they aren't counted in the unemployment rate. When a man gives up on looking for a job, this actually makes the unemployment rate go down. We can take a look at this mathematically.
Let's pretend the total labor force is 100 people. Out of that hundred, 10 people are looking for work and 90 people are unemployed. Our unemployment rate is 10% (10/100).
After a few interviews, Bill gets a job manufacturing plastic flamingos.
Bill is now employed. Our total labor force still has 100 people. Out of which, 91 people are employed and 9 people are unemployed. Our unemployment rate is now 9%.
This is what we want, we want as much production as possible. However, let's see what would have happened if Bill just gave up.
So, instead of continuing the job search, Bill gets discouraged after 20 job interviews and 20 rejections. Bill decides to stop looking for work and either moves in back with his parents or goes on the government dole.
When Bill stops looking for work, he is removed from both the unemployed number and the labor force number.
Now our labor force is 99 people. Out of which, 90 people are employed and 9 people are unemployed.
The unemployment rate is now 9.09% (9/99).
This rate is still lower than the initial rate of 10%.
When looking at the unemployment rate, it is also useful to take a look at the labor force participation rate. The last time I checked, the labor force participation rate reached a peak in 1999 or 2000 at more than 67% and it has been declining ever since. Today the rate is at less than 63%.
These figures can be found at the Bureau of Labor Statistics.
Thursday, November 27, 2014
You are never going to escape risk
An old saying goes that there are only two things guaranteed in life. Death and taxes.
These are the only two guarantees you get in life. You can plan everything else and it might not go as planned.
When I think about this in the term of financial planning, I realize that there is no perfect go to investment or strategy. Everything has an element of risk, some much more than others.
1. Starting up your own business.
This is one of those risks that can go really wrong but it is easily avoidable. You only face the risks if you start your own business. If you don't make enough money in sales or services, you face the risk of going bankrupt if you are a sole proprietor. You also face legal risks if someone gets hurt on your place of business and you get sued. These risks can be mitigated by incorporating your business and making it a separate entity but then there also comes the frustration of complying with government regulations and paying and filing taxes correctly. If you don't run your business the way the government wants you to then you face the risks of being audited by the IRS and paying fines.
2. Stocks
When most people want a way to make money by doing nothing, they throw it into stocks hoping the values go up and they can sell it at a higher price for a profit. Obviously, you take a risk if your stocks plunge in value after you buy them. The biggest risk is if the company goes bankrupt and you lose all the money you paid for the stocks and have no way to recover any portion of it. Just like owning your own business, this risk only exists if you invest in stocks.
3. Real Estate
The risks that come with real estate are very similar to owning your own business. The most common ways people try to make money with real estate is fixing up a house and selling it for a profit or owning a house and renting it out. In the case of a fixer upper, you may have to spend a few months or a year fixing up a house and then you have to find a buyer willing to buy at a high enough price. An underestimation of how much it takes to fix the house and an overestimation of how much you think you can sell it for can result in losses on your original investment. When it comes to rental income, you need to have reliable tenants. Jerk tenants may end up not paying rent and not leaving or trashing up the house.
4. Government sponsored retirement plans (401k, IRA, etc)
Most people invest in these plans because these are the "smart" things to invest in because of tax benefits. The risk you face here is that these programs invest money mostly in stocks and you don't know what the performance will be in the future. On top of that, these plans can come with administration fees that have to be paid every year despite how well the plans perform. Lastly, a bigger risk is that the federal government is fiscally irresponsible and may decide to nationalize these plans, rescind the tax benefits, or just steal this money to help pay off the national debt.
5. Gold, silver, and other precious metals
These precious metals are commodities. The only way you can really make money with precious metals is selling them for a higher price. Just like stocks, you don't know how they will perform in the future. The additional risk comes in the fact that precious metal is real. If you order precious metals, there is a risk that it is counterfeit. The other risk is storage. You want to make sure to have a safe place to store the items otherwise someone could steal your metals.
6. Bank deposits and fiat currency
Even just holding cash, CD's, and bank accounts hold risks. The federal government has the power to print off more money which indirectly leads to inflation. Just holding currency for years will result in the loss of purchasing power. Now, bank deposits hold the risk that they can be stolen from you from the federal government if you owe back taxes, child support, etc.
Realize that, no matter what you do, there is always some risk that comes along with it. Don't let risks stop you from living your life but just be aware of the risks you face and do the things that you can to mitigate the risks.
These are the only two guarantees you get in life. You can plan everything else and it might not go as planned.
When I think about this in the term of financial planning, I realize that there is no perfect go to investment or strategy. Everything has an element of risk, some much more than others.
1. Starting up your own business.
This is one of those risks that can go really wrong but it is easily avoidable. You only face the risks if you start your own business. If you don't make enough money in sales or services, you face the risk of going bankrupt if you are a sole proprietor. You also face legal risks if someone gets hurt on your place of business and you get sued. These risks can be mitigated by incorporating your business and making it a separate entity but then there also comes the frustration of complying with government regulations and paying and filing taxes correctly. If you don't run your business the way the government wants you to then you face the risks of being audited by the IRS and paying fines.
2. Stocks
When most people want a way to make money by doing nothing, they throw it into stocks hoping the values go up and they can sell it at a higher price for a profit. Obviously, you take a risk if your stocks plunge in value after you buy them. The biggest risk is if the company goes bankrupt and you lose all the money you paid for the stocks and have no way to recover any portion of it. Just like owning your own business, this risk only exists if you invest in stocks.
3. Real Estate
The risks that come with real estate are very similar to owning your own business. The most common ways people try to make money with real estate is fixing up a house and selling it for a profit or owning a house and renting it out. In the case of a fixer upper, you may have to spend a few months or a year fixing up a house and then you have to find a buyer willing to buy at a high enough price. An underestimation of how much it takes to fix the house and an overestimation of how much you think you can sell it for can result in losses on your original investment. When it comes to rental income, you need to have reliable tenants. Jerk tenants may end up not paying rent and not leaving or trashing up the house.
4. Government sponsored retirement plans (401k, IRA, etc)
Most people invest in these plans because these are the "smart" things to invest in because of tax benefits. The risk you face here is that these programs invest money mostly in stocks and you don't know what the performance will be in the future. On top of that, these plans can come with administration fees that have to be paid every year despite how well the plans perform. Lastly, a bigger risk is that the federal government is fiscally irresponsible and may decide to nationalize these plans, rescind the tax benefits, or just steal this money to help pay off the national debt.
5. Gold, silver, and other precious metals
These precious metals are commodities. The only way you can really make money with precious metals is selling them for a higher price. Just like stocks, you don't know how they will perform in the future. The additional risk comes in the fact that precious metal is real. If you order precious metals, there is a risk that it is counterfeit. The other risk is storage. You want to make sure to have a safe place to store the items otherwise someone could steal your metals.
6. Bank deposits and fiat currency
Even just holding cash, CD's, and bank accounts hold risks. The federal government has the power to print off more money which indirectly leads to inflation. Just holding currency for years will result in the loss of purchasing power. Now, bank deposits hold the risk that they can be stolen from you from the federal government if you owe back taxes, child support, etc.
Realize that, no matter what you do, there is always some risk that comes along with it. Don't let risks stop you from living your life but just be aware of the risks you face and do the things that you can to mitigate the risks.
Tuesday, November 25, 2014
Important calculation regarding the life versus leisure tradeoff
One very key factor playing in to how well you can enjoy your life is going to be your financial position. Early on in life, young kids are likely to be saddled with debts and obligations and have a very big need to work and accumulate resources to pay those debts off and then start building up wealth.
Ideally, with a lot of hard work, careful financial planning, and avoiding traps; a man can accumulate a good amount of wealth. An amount of wealth that would sustain him for a long time. At this point, his need to work and accumulate resources may not be as great as when he was younger.
This could happen to a man in his 30's, 40's, 50's and onward.
He may come to the point where he won't need to work as hard and decide to take an easier, lower paying job with less hours to increase the amount of leisure time he has.
When thinking about this, he should really consider how much money he makes per hour. Actually, a better way to put it is how much money does he get to keep per hour dedicated to working.
To do this, take your total paycheck after taxes and divide it by the amount of hours you work per pay cycle.
My first job, I made a salary of $28,600. While most people wouldn't consider it a good paying job, it was still better than a lousy job. I was paid weekly and my paycheck after taxes were taken out was $445.34 per week.
Each week, I worked 40 hours. So divide $445.34 by 40 hours and that comes out to be $11.13 per hour.
This isn't all of it though. Each week I spent 5 hours at lunch. Even though I wasn't working, I would have much rather been at home sleeping. So I'll add 5 hours to the calculation.
$445.34 divided by 45 hours is $9.89.
The result is a little disheartening, but it actually gets worse. I had to commute to get to work. Had I not been working, I would have been doing something enjoyable. So add the commute time to the equation.
I had to commute an hour and a half each day round trip. Over one week, that is 7.5 hours commuting. So the time spent inside the office and commuting for one week equals 52.5 hours.
$445.34 divided by 52.5 hours equals $8.48.
To put this into perspective, minimum wage where I live is $7.25. If you make less than $5000 a year, you are not required to pay state income tax so your tax burden would be close to 0. I would think the only money you lose is the money taken out for social security which is 2.5% if I recall correctly. So, without factoring in the lunch break and commute time, each hour of work would yield a man $7.07 per hour. Factoring in the lunch and commute will drag this figure down.
When comparing jobs, most people only consider the salary. And when you are young, you need as much money as possible to start establishing yourself in the world. However, when you do become established, you have the option of factoring in a few more things.
Not only do you consider the salary, but you should also consider the amount of hours you spend working as well as the time you spend commuting.
When I finally got a good paying job, I had the expectation that I would have 40 hour weeks.
I was very mistaken.
People who do have good careers can expect to work in excess of 45, 50, 55, or unfortunately 60 hours a week. My successive jobs also had me commuting farther than my first sometimes causing my commute to increase to an excess of 10 hours a week. Ultimately, this increases the amount of time that you dedicate to work while the amount of money you make stays fixed resulting in a lower ratio of money to hours worked.
Why then do we put up with this? Be forced to work more hours to make more money.
Oh yeah. It is because we need the money.
So, to escape this rat race, I have a very general strategy.
1. Work as hard as you can to accumulate a lot of capital and make sure you save it
2. After you save up enough capital, go Galt.
When you have a lot of capital, you have much more options available. Money is a resource just like anything else in life. If you have a lot of it, your demand for more goes down. In contrast, you will have a higher demand for leisure.
If you get well established, you could leave your high paying and stressful job for a lower paying less stressful job with less hours.
It is up to each individual to decide what balance they want to have.
There is one last thing I want to mention. These concepts only look at the money that gets earned. Switching jobs can lead to an increase or decrease of your living expenses. This is really important to consider if you job is currently providing you with health insurance. You want to make sure to take the benefits in consideration if you want to leave your job as an engineer to work part time in a restaurant within walking distance from your house. I guess I can try to expand on this in the future though.
Ideally, with a lot of hard work, careful financial planning, and avoiding traps; a man can accumulate a good amount of wealth. An amount of wealth that would sustain him for a long time. At this point, his need to work and accumulate resources may not be as great as when he was younger.
This could happen to a man in his 30's, 40's, 50's and onward.
He may come to the point where he won't need to work as hard and decide to take an easier, lower paying job with less hours to increase the amount of leisure time he has.
When thinking about this, he should really consider how much money he makes per hour. Actually, a better way to put it is how much money does he get to keep per hour dedicated to working.
To do this, take your total paycheck after taxes and divide it by the amount of hours you work per pay cycle.
My first job, I made a salary of $28,600. While most people wouldn't consider it a good paying job, it was still better than a lousy job. I was paid weekly and my paycheck after taxes were taken out was $445.34 per week.
Each week, I worked 40 hours. So divide $445.34 by 40 hours and that comes out to be $11.13 per hour.
This isn't all of it though. Each week I spent 5 hours at lunch. Even though I wasn't working, I would have much rather been at home sleeping. So I'll add 5 hours to the calculation.
$445.34 divided by 45 hours is $9.89.
The result is a little disheartening, but it actually gets worse. I had to commute to get to work. Had I not been working, I would have been doing something enjoyable. So add the commute time to the equation.
I had to commute an hour and a half each day round trip. Over one week, that is 7.5 hours commuting. So the time spent inside the office and commuting for one week equals 52.5 hours.
$445.34 divided by 52.5 hours equals $8.48.
To put this into perspective, minimum wage where I live is $7.25. If you make less than $5000 a year, you are not required to pay state income tax so your tax burden would be close to 0. I would think the only money you lose is the money taken out for social security which is 2.5% if I recall correctly. So, without factoring in the lunch break and commute time, each hour of work would yield a man $7.07 per hour. Factoring in the lunch and commute will drag this figure down.
When comparing jobs, most people only consider the salary. And when you are young, you need as much money as possible to start establishing yourself in the world. However, when you do become established, you have the option of factoring in a few more things.
Not only do you consider the salary, but you should also consider the amount of hours you spend working as well as the time you spend commuting.
When I finally got a good paying job, I had the expectation that I would have 40 hour weeks.
I was very mistaken.
People who do have good careers can expect to work in excess of 45, 50, 55, or unfortunately 60 hours a week. My successive jobs also had me commuting farther than my first sometimes causing my commute to increase to an excess of 10 hours a week. Ultimately, this increases the amount of time that you dedicate to work while the amount of money you make stays fixed resulting in a lower ratio of money to hours worked.
Why then do we put up with this? Be forced to work more hours to make more money.
Oh yeah. It is because we need the money.
So, to escape this rat race, I have a very general strategy.
1. Work as hard as you can to accumulate a lot of capital and make sure you save it
2. After you save up enough capital, go Galt.
When you have a lot of capital, you have much more options available. Money is a resource just like anything else in life. If you have a lot of it, your demand for more goes down. In contrast, you will have a higher demand for leisure.
If you get well established, you could leave your high paying and stressful job for a lower paying less stressful job with less hours.
It is up to each individual to decide what balance they want to have.
There is one last thing I want to mention. These concepts only look at the money that gets earned. Switching jobs can lead to an increase or decrease of your living expenses. This is really important to consider if you job is currently providing you with health insurance. You want to make sure to take the benefits in consideration if you want to leave your job as an engineer to work part time in a restaurant within walking distance from your house. I guess I can try to expand on this in the future though.
Sunday, November 23, 2014
How much do you have to write to make blogging your job?
Everyone wants to find an easy way to make extra income or get a job that requires little to no effort. Unfortunately, nothing in life ever comes so easy. Its not like you can just slap some banner ads up on a website and get instant ad revenue.
But there are many people that I follow that have turned blogging into a full time job thus completely freeing themselves from having to work a 9-5 office job.
After listening to these men, it made me really want to try it out. Start up a blog and see where it goes from there.
I started out November of last year and here are my following results.
Posts 79
Total Views 6000
Total money earned $.92
92 cents earned. Well, its progress. Better than a goose egg.
To be honest, I'm much more interested in looking at the page views. They kind of feel like the achievements or trophies you can collect when playing video games.
So, from the older wiser men, the key to being a successful blogger is to do the following.
1. Write a lot
2. Network a lot
3. Develop a large following
4. Create a product you can sell to a loyal following
5. Monetize your content
Taking things one step at a time, I'll focus on topic number one.
I was listening to Matt Forney say that you have to write a lot. It pretty much has to be a full time job. If you don't put in the effort, then you won't get any money.
So I was wondering how much is alot?
I know that it is more than I am doing right now, but how much more.
How could I find out?
Easy. I could just look at a successful blogger and see how much they wrote. The sidebar of blogger will breakdown how many posts the writer wrote year by year. So, I decided to check out CappyCap's history.
In his first year, 2005, he had 151 posts. That comes out to 12 to 13 posts a month.
In years 2006 to 2011 he had a range of 400 to 700 posts per year. That would make it 33 to 58 posts per month.
In 2012 to the current year, he has been making 900 to 1000 posts per year. That comes out to about 80 posts per month.
So when Matt Forney said you have to write a lot, it will become a full time job.
It is going to be a long road ahead but let's see what happens.
But there are many people that I follow that have turned blogging into a full time job thus completely freeing themselves from having to work a 9-5 office job.
After listening to these men, it made me really want to try it out. Start up a blog and see where it goes from there.
I started out November of last year and here are my following results.
Posts 79
Total Views 6000
Total money earned $.92
92 cents earned. Well, its progress. Better than a goose egg.
To be honest, I'm much more interested in looking at the page views. They kind of feel like the achievements or trophies you can collect when playing video games.
So, from the older wiser men, the key to being a successful blogger is to do the following.
1. Write a lot
2. Network a lot
3. Develop a large following
4. Create a product you can sell to a loyal following
5. Monetize your content
Taking things one step at a time, I'll focus on topic number one.
I was listening to Matt Forney say that you have to write a lot. It pretty much has to be a full time job. If you don't put in the effort, then you won't get any money.
So I was wondering how much is alot?
I know that it is more than I am doing right now, but how much more.
How could I find out?
Easy. I could just look at a successful blogger and see how much they wrote. The sidebar of blogger will breakdown how many posts the writer wrote year by year. So, I decided to check out CappyCap's history.
In his first year, 2005, he had 151 posts. That comes out to 12 to 13 posts a month.
In years 2006 to 2011 he had a range of 400 to 700 posts per year. That would make it 33 to 58 posts per month.
In 2012 to the current year, he has been making 900 to 1000 posts per year. That comes out to about 80 posts per month.
So when Matt Forney said you have to write a lot, it will become a full time job.
It is going to be a long road ahead but let's see what happens.
Saturday, November 22, 2014
Extra benefit to practice minimalism
One benefit of minimalism that I haven't heard people talk about is that minimalism lessens the effect that you feel from inflation.
Well, theoretically anyway. In practice, you can save money just by not buying stuff that you don't need or buy cheaper substitutes.
Everything about this next example is completely theoretical, it is not a reflection of how the real world actually works.
Andrew's cost of living is $15,000.
Boco's cost of living is $25,000.
For the year of 2015, we will assume the inflation rate is 3% (not unreasonable).
Let's assume that the price of every single thing increases by 3% (not how the world works but this is just theoretical).
Assuming that Andrew and Boco bought all the same stuff for 2015 as they did in 2014 (also not how the world works), both Andrew and Boco's expenses will increase by 3%.
Andrew's cost of living is now $15,450.
Boco's cost of living is now $25,750.
In this case Boco's cost of living increased $300 more than Andrew's did.
This example only looks at cost, It does not take into account the money that Andrew or Boco make. If the cost of everything in 2015 increased by 3% then the cost of Andrew and Boco's labor would increase by 3% and theoretically, their salaries should increase by 3%. If this is the case, this would negate the effect felt by inflation.
However, if Andrew and Boco's salaries do not increase in 2015, Boco feels the effect of inflation worse than Andrew does.
In a more extreme example, let's throw Charlie into the mix.
His cost of living is $40,000.
Making all the same theoretical assumptions from above, Charlie feels inflation worse.
Due to a 3% increase of inflation in 2015, his cost of living for 2015 is now $41,200.
Charlies cost of living increased $750 more than Andrew's.
To conclude this example, having to buy less stuff will make you less vulnerable to inflation compared to someone who has to buy more stuff.
Now back to the real world.
As a response to higher prices, the easiest way to save money is to just not buy stuff that you don't need. If you would like to buy the next new tablet or cell phone, think hard if it is really worth the couple hundred bucks.
The second way to save money is to find a cheaper substitute to what you already buy. If absolutely need a new electronic, don't buy the top of the line product but instead buy the cheapest one that suits your needs.
Both of these methods will affect your finances much more than inflation.
Well, theoretically anyway. In practice, you can save money just by not buying stuff that you don't need or buy cheaper substitutes.
Everything about this next example is completely theoretical, it is not a reflection of how the real world actually works.
Andrew's cost of living is $15,000.
Boco's cost of living is $25,000.
For the year of 2015, we will assume the inflation rate is 3% (not unreasonable).
Let's assume that the price of every single thing increases by 3% (not how the world works but this is just theoretical).
Assuming that Andrew and Boco bought all the same stuff for 2015 as they did in 2014 (also not how the world works), both Andrew and Boco's expenses will increase by 3%.
Andrew's cost of living is now $15,450.
Boco's cost of living is now $25,750.
In this case Boco's cost of living increased $300 more than Andrew's did.
This example only looks at cost, It does not take into account the money that Andrew or Boco make. If the cost of everything in 2015 increased by 3% then the cost of Andrew and Boco's labor would increase by 3% and theoretically, their salaries should increase by 3%. If this is the case, this would negate the effect felt by inflation.
However, if Andrew and Boco's salaries do not increase in 2015, Boco feels the effect of inflation worse than Andrew does.
In a more extreme example, let's throw Charlie into the mix.
His cost of living is $40,000.
Making all the same theoretical assumptions from above, Charlie feels inflation worse.
Due to a 3% increase of inflation in 2015, his cost of living for 2015 is now $41,200.
Charlies cost of living increased $750 more than Andrew's.
To conclude this example, having to buy less stuff will make you less vulnerable to inflation compared to someone who has to buy more stuff.
Now back to the real world.
As a response to higher prices, the easiest way to save money is to just not buy stuff that you don't need. If you would like to buy the next new tablet or cell phone, think hard if it is really worth the couple hundred bucks.
The second way to save money is to find a cheaper substitute to what you already buy. If absolutely need a new electronic, don't buy the top of the line product but instead buy the cheapest one that suits your needs.
Both of these methods will affect your finances much more than inflation.
Friday, November 21, 2014
W-4 Reminder
While this may seem like common knowledge, I am surprised how many people don't know what the W-4 form is. This is a small reminder.
When you take any job as an employee, you will have to fill out some paperwork on the first day and the W-4 will be included in the list.
The W-4 is the form that determines how much money your employer withholds from your paycheck. The amount that gets withheld from you paycheck is the amount that goes to the federal government, state government, and social security.
Not all employers will explain this to their employees. When you fill the form, you have the options to claim allowances. The more allowances that you claim, the less money that gets withheld from your paycheck.
Keep in mind that however you fill out the form, it will not affect the amount you actually get paid.
If you claim no allowances, you will have the most amount of money taken from your paycheck every cycle. Most likely, this will lead to more money being withheld from you within a year and you will most likely receive a large refund when you file your taxes. Conversely, if you claim an many allowances as you legally can, you will have the smallest amount of money withheld from your paycheck and you can expect to receive a very small refund at the end of the year or possibly owing money to the federal or state government.
Which option is better? It depends on the person.
Personally, I like to receive the most money from my paycheck every cycle. I'd rather have more money all year round rather than just wait for a large amount in February. I'd rather pay the government money owed.
People who are really hard pressed for cash may also prefer having the most money in every paycheck.
If you want to change the amount that is withheld from your paycheck, I think you can talk to your employer and request to change your W-4. A good reason to update your W-4 is if you get married or have children because you will be able to claim more allowances if you wish.
When you take any job as an employee, you will have to fill out some paperwork on the first day and the W-4 will be included in the list.
The W-4 is the form that determines how much money your employer withholds from your paycheck. The amount that gets withheld from you paycheck is the amount that goes to the federal government, state government, and social security.
Not all employers will explain this to their employees. When you fill the form, you have the options to claim allowances. The more allowances that you claim, the less money that gets withheld from your paycheck.
Keep in mind that however you fill out the form, it will not affect the amount you actually get paid.
If you claim no allowances, you will have the most amount of money taken from your paycheck every cycle. Most likely, this will lead to more money being withheld from you within a year and you will most likely receive a large refund when you file your taxes. Conversely, if you claim an many allowances as you legally can, you will have the smallest amount of money withheld from your paycheck and you can expect to receive a very small refund at the end of the year or possibly owing money to the federal or state government.
Which option is better? It depends on the person.
Personally, I like to receive the most money from my paycheck every cycle. I'd rather have more money all year round rather than just wait for a large amount in February. I'd rather pay the government money owed.
People who are really hard pressed for cash may also prefer having the most money in every paycheck.
If you want to change the amount that is withheld from your paycheck, I think you can talk to your employer and request to change your W-4. A good reason to update your W-4 is if you get married or have children because you will be able to claim more allowances if you wish.
Monday, November 17, 2014
Retirement Planning for Minimalists
In an ideal world, we would have perfect information and would know exactly how much to save for retirement, how many years we have to work, which investments to purchase, and how long we would live.
We don't have these things, so the best we can do is make estimates. However, if a man wants to limit the time that he has to work, I would recommend the following suggestion.
Retirement planning would go something like this.
1. Accumulate a large amount of capital as soon as possible.
2. Put the money into safe investments (fixed income) first and maybe riskier investments later
3. When you have more money than you need for the remainder of your life, start depleting your wealth.
In further detail:
1. You want to accumulate a large amount of money relatively fast if life because you want to have as much money producing more money (interest, dividends, etc). To accumulate a lot of money, you have to do at least one of two things. Either make a lot of income, spend as little money as possible, or preferably both. Make sure to pay off all debts though.
2. Ideally, you want to get to a point where you have a great amount of capital that your money can produce money by itself. Ideally, you would be making money by doing absolutely nothing. Safer returns provide much less rate of return but I would want to have a good safety net first before throwing money into riskier investments. If you can make your annual living expenses with just interest or divided income, you are in a great spot.
3. This part is advice for minimalists but more so for people who intend not to marry or have children. Without anyone to pass on your money to, you have no reason to accumulate anymore wealth than you need for a lifetime. If you get to a point in your life where you estimate that you have enough money to live for the rest of your life, you can start depleting your wealth to the point where you don't earn anymore interest or dividend income. You can deplete all the principal savings as well. The tricky part about this is that you don't know when you will die. If you deplete your wealth to soon, you may run out of resources to protect yourself. If you wait too long to deplete your wealth, you could end up dying before getting to enjoy your wealth. Most likely, we will all die with something to pass on to someone else or the state.
We can't know for sure how the future will play out but I encourage everyone to plan for it. This is a basic way to plan for it.
We don't have these things, so the best we can do is make estimates. However, if a man wants to limit the time that he has to work, I would recommend the following suggestion.
Retirement planning would go something like this.
1. Accumulate a large amount of capital as soon as possible.
2. Put the money into safe investments (fixed income) first and maybe riskier investments later
3. When you have more money than you need for the remainder of your life, start depleting your wealth.
In further detail:
1. You want to accumulate a large amount of money relatively fast if life because you want to have as much money producing more money (interest, dividends, etc). To accumulate a lot of money, you have to do at least one of two things. Either make a lot of income, spend as little money as possible, or preferably both. Make sure to pay off all debts though.
2. Ideally, you want to get to a point where you have a great amount of capital that your money can produce money by itself. Ideally, you would be making money by doing absolutely nothing. Safer returns provide much less rate of return but I would want to have a good safety net first before throwing money into riskier investments. If you can make your annual living expenses with just interest or divided income, you are in a great spot.
3. This part is advice for minimalists but more so for people who intend not to marry or have children. Without anyone to pass on your money to, you have no reason to accumulate anymore wealth than you need for a lifetime. If you get to a point in your life where you estimate that you have enough money to live for the rest of your life, you can start depleting your wealth to the point where you don't earn anymore interest or dividend income. You can deplete all the principal savings as well. The tricky part about this is that you don't know when you will die. If you deplete your wealth to soon, you may run out of resources to protect yourself. If you wait too long to deplete your wealth, you could end up dying before getting to enjoy your wealth. Most likely, we will all die with something to pass on to someone else or the state.
We can't know for sure how the future will play out but I encourage everyone to plan for it. This is a basic way to plan for it.
Saturday, November 8, 2014
Basic lifetime financial planning.
Your finances will have a big impact on the quality of your life. The average American will spend most of his life working. Most people don't really enjoy their jobs though. I've always thought that to increase your quality of life, you want to cut out as much frustration and consternation from your life.
With this thought, I came to the conclusion that you want to try to keep the amount of work you do in your life to the bare minimum. At least, work that you hate doing.
The obvious issue is that most people need to work to make money and survive. So, how much does a man have to work in his life?
It depends. Probably a better question to ask is how much money you are going to need?
How much money will you need for the rest of your life?
Most people would brush off the question because they would claim that
"No one can predict the future"
"Only God knows"
"Life is full of uncertainty"
Yes, it is next to impossible to predict the exact dollar amount you will need until you die. However, since personal finance has such an impact on a man's life, it seems insane to not even try to figure out the answer.
While we cannot get a fully accurate number, we can make estimates and get some sort of idea of how much money we will need to accumulate and how much we will have to work in our lifetimes.
This is a process that is ongoing. You have to keep doing it. When you are young, it is difficult to get a good estimate of how much money you need because you have so much life to live. It is like hitting a target from 1000 yards away. However, as you get older, you have less life to live and that target gets closer and closer.
The first thing you want to do is estimate your lifespan. Men here in America live an average of 79 years. If you believe yourself to be in better or worse health than the average American, adjust the average. If you take good care of yourself, it is reasonable to make it to 85 or 90 years old.
When you have your estimated life span, go ahead and subtract your current age. If you estimate to live to age 85 and are currently 30, you have an estimated 55 years left to live.
The second thing you want to do is estimate how much money you spend (or need to spend) within a year. This figure may be difficult to come by depending on how much effort you want to put into it but I'll go into that next time. For this example, lets use $15,000 as an estimate.
At this point, multiply the estimated needed money per year by how many years you have left to live.
In this example $15,000 * 55 = $825,000.
This is how much money Bill is going to need for the rest of his life. But this doesn't account for how much money Bill has right now. For this example, lets say Bill has $25,000 and no debt.
Subtract $25,000 from the $825,000 and Bill needs another $800,000 to retire today at the age of 30.
This really is the basic of basic of personal financial planning.
1. Estimate your life span and figure out how many years you have left to live.
2. Estimate how much money you will need per year.
3. Multiply the two figures to find an amount.
4. Subtract from the total how much money you actually have.
Doing this planning gets you some sort of idea of how much money you need. This number may vary greatly in the long run for several factors.
1. You may live longer or shorter than you expect
2. You will face life changing events that will change how much money you need per year
3. You may face some sort of catastrophe that makes financial planning for you useless
4. Our country/currency/economic environment falls to pieces
The list can just go on from here.
At the age of 30, it is like trying to hit a target that is way far away. But it is important to always be aiming at and trying to hit that target.
The estimates can be as complex as you want them to be as well. You can adjust the calculation to factor in things like inflation, acquisition of real property, family members etc.
With this thought, I came to the conclusion that you want to try to keep the amount of work you do in your life to the bare minimum. At least, work that you hate doing.
The obvious issue is that most people need to work to make money and survive. So, how much does a man have to work in his life?
It depends. Probably a better question to ask is how much money you are going to need?
How much money will you need for the rest of your life?
Most people would brush off the question because they would claim that
"No one can predict the future"
"Only God knows"
"Life is full of uncertainty"
Yes, it is next to impossible to predict the exact dollar amount you will need until you die. However, since personal finance has such an impact on a man's life, it seems insane to not even try to figure out the answer.
While we cannot get a fully accurate number, we can make estimates and get some sort of idea of how much money we will need to accumulate and how much we will have to work in our lifetimes.
This is a process that is ongoing. You have to keep doing it. When you are young, it is difficult to get a good estimate of how much money you need because you have so much life to live. It is like hitting a target from 1000 yards away. However, as you get older, you have less life to live and that target gets closer and closer.
The first thing you want to do is estimate your lifespan. Men here in America live an average of 79 years. If you believe yourself to be in better or worse health than the average American, adjust the average. If you take good care of yourself, it is reasonable to make it to 85 or 90 years old.
When you have your estimated life span, go ahead and subtract your current age. If you estimate to live to age 85 and are currently 30, you have an estimated 55 years left to live.
The second thing you want to do is estimate how much money you spend (or need to spend) within a year. This figure may be difficult to come by depending on how much effort you want to put into it but I'll go into that next time. For this example, lets use $15,000 as an estimate.
At this point, multiply the estimated needed money per year by how many years you have left to live.
In this example $15,000 * 55 = $825,000.
This is how much money Bill is going to need for the rest of his life. But this doesn't account for how much money Bill has right now. For this example, lets say Bill has $25,000 and no debt.
Subtract $25,000 from the $825,000 and Bill needs another $800,000 to retire today at the age of 30.
This really is the basic of basic of personal financial planning.
1. Estimate your life span and figure out how many years you have left to live.
2. Estimate how much money you will need per year.
3. Multiply the two figures to find an amount.
4. Subtract from the total how much money you actually have.
Doing this planning gets you some sort of idea of how much money you need. This number may vary greatly in the long run for several factors.
1. You may live longer or shorter than you expect
2. You will face life changing events that will change how much money you need per year
3. You may face some sort of catastrophe that makes financial planning for you useless
4. Our country/currency/economic environment falls to pieces
The list can just go on from here.
At the age of 30, it is like trying to hit a target that is way far away. But it is important to always be aiming at and trying to hit that target.
The estimates can be as complex as you want them to be as well. You can adjust the calculation to factor in things like inflation, acquisition of real property, family members etc.
Sunday, November 2, 2014
How much an increased minimum wage would cost McDonalds
Back in college, I had one professor that told us an interesting lesson.
Don't take anything at face value. Everyone has an agenda. You will be lied to by the government, the media, your parents, and me. Go do your own research and determine what is true for yourself.
Lately, there has been some media coverage about fast food workers demanding a higher wage. I think they were fighting for $15 an hour. I think even the national government was considering increasing the minimum wage up to $10.10 an hour.
Conservatives say that higher minimum wages will destroy jobs and liberals say that everyone deserves a living wage. With that being said, I was wondering how much an increase of the minimum wage to $10.10 an hour would cost McDonalds.
First I had to look up what the average minimum wage is in America. That information can be found here at the National Conference of State Legislature. The minimum wage varies from state to state a little bit but for the most part, the minimum wage is $7.25 an hour. If the national government increases the minimum wage to $10.10, then each hour worked by a minimum wage employee would cost an extra $2.85 per hour. This estimate is a little over stated because the mean minimum wage is slightly higher than $7.25 per hour. For that sake of simplicity, I will use $7.25 per hour as the minimum wage.
The second thing I had to find out was how many McDonald's employees in America make minimum wage. According to stastita, there are 14,267 McDonald's restaurants in the United States. According to Macroaxis, there are a total of 440,000 employees working at McDonald's in the United States. On average, this comes out to be about 30 employees for every restaurant.
If the minimum wage is increased to $10.10 an hour, McDonald's would only incur extra costs for each employee that makes less than $10.10 an hour. With 30 employees per McDonald's, I initially estimated that 20 of those employees work part time for minimum wage. However, I found a figure from McDonald's that states that about 80% of their employees work part time for an hourly wage. I'll stick with my initial estimate of 67% of McDonald's employees making minimum wage. This part of the estimate will be under stated.
At this point, I decided to plug in some numbers.
Extra wages due to increase of minimum wage * 20 employees per McDonald's * total McDonald's in America = Extra cost of labor per hour for McDonald's.
$2.85 per hour * 20 employees * 14,267 McDonald's = an extra $813,219 per hour for labor.
Assuming each one of these 20 employees per McDonald's works 20 hours a week, the extra cost of labor per week comes out to be $16,264,380.
Assuming each one of these employee works this rate for each week of the year, the extra cost of labor for the whole year comes out to be $845,747,760.
An increase of the minimum wage to $10.10 would cost McDonald's $846 million if McDonald's decided to absorb the cost.
This figure does not mean very much by itself, so lets compare it to McDonald's net income.
So, according to McDonald's income statement, McDonald's 2013 net income was $5,585,900,000.
Roughly $5.59 billion.
If in 2013, the minimum wage was $10.10, an extra $846 million would have been added to operating expenses and subtracted from net income which would leave the net income at $4.74 billion.
$846 million out of $5.59 billion is slightly more than 15%.
An increase of the minimum wage from $7.25 to $10.10 is almost 40%.
A 40% increase to the minimum wage would cause McDonald's a loss of 15% to net income.
Should the federal minimum wage increase to $10.10, McDonald's would not just sit there and absorb the loss. McDonald's would have to either increase prices or fire employees and shut down some locations.
Don't take anything at face value. Everyone has an agenda. You will be lied to by the government, the media, your parents, and me. Go do your own research and determine what is true for yourself.
Lately, there has been some media coverage about fast food workers demanding a higher wage. I think they were fighting for $15 an hour. I think even the national government was considering increasing the minimum wage up to $10.10 an hour.
Conservatives say that higher minimum wages will destroy jobs and liberals say that everyone deserves a living wage. With that being said, I was wondering how much an increase of the minimum wage to $10.10 an hour would cost McDonalds.
First I had to look up what the average minimum wage is in America. That information can be found here at the National Conference of State Legislature. The minimum wage varies from state to state a little bit but for the most part, the minimum wage is $7.25 an hour. If the national government increases the minimum wage to $10.10, then each hour worked by a minimum wage employee would cost an extra $2.85 per hour. This estimate is a little over stated because the mean minimum wage is slightly higher than $7.25 per hour. For that sake of simplicity, I will use $7.25 per hour as the minimum wage.
The second thing I had to find out was how many McDonald's employees in America make minimum wage. According to stastita, there are 14,267 McDonald's restaurants in the United States. According to Macroaxis, there are a total of 440,000 employees working at McDonald's in the United States. On average, this comes out to be about 30 employees for every restaurant.
If the minimum wage is increased to $10.10 an hour, McDonald's would only incur extra costs for each employee that makes less than $10.10 an hour. With 30 employees per McDonald's, I initially estimated that 20 of those employees work part time for minimum wage. However, I found a figure from McDonald's that states that about 80% of their employees work part time for an hourly wage. I'll stick with my initial estimate of 67% of McDonald's employees making minimum wage. This part of the estimate will be under stated.
At this point, I decided to plug in some numbers.
Extra wages due to increase of minimum wage * 20 employees per McDonald's * total McDonald's in America = Extra cost of labor per hour for McDonald's.
$2.85 per hour * 20 employees * 14,267 McDonald's = an extra $813,219 per hour for labor.
Assuming each one of these 20 employees per McDonald's works 20 hours a week, the extra cost of labor per week comes out to be $16,264,380.
Assuming each one of these employee works this rate for each week of the year, the extra cost of labor for the whole year comes out to be $845,747,760.
An increase of the minimum wage to $10.10 would cost McDonald's $846 million if McDonald's decided to absorb the cost.
This figure does not mean very much by itself, so lets compare it to McDonald's net income.
So, according to McDonald's income statement, McDonald's 2013 net income was $5,585,900,000.
Roughly $5.59 billion.
If in 2013, the minimum wage was $10.10, an extra $846 million would have been added to operating expenses and subtracted from net income which would leave the net income at $4.74 billion.
$846 million out of $5.59 billion is slightly more than 15%.
An increase of the minimum wage from $7.25 to $10.10 is almost 40%.
A 40% increase to the minimum wage would cause McDonald's a loss of 15% to net income.
Should the federal minimum wage increase to $10.10, McDonald's would not just sit there and absorb the loss. McDonald's would have to either increase prices or fire employees and shut down some locations.
Saturday, October 11, 2014
Why are 90 million Americans not working?
Recently, it was reported that the unemployment rate dropped to a low of below 6%. By the sound of it, a falling unemployment rate sounds like good news but it is not always an indication of good news.
The unemployment rate is the total number of people without a job and looking for work divided by the total labor force. If people find work, the unemployment rate goes down. However, if people just give up and stop looking for work, they are no longer part of the labor force and the unemployment rate goes down.
According to the Bureau of Labor Statistics, there are 93 million Americans not part of the labor force. Over the last few months, I was wondering why so many people just aren't working. So I decided to do a little research.
How many Americans are there? 319 million according to the US Census.
According to the Bureau of Labor Statistics, our work force is 147 million Americans and the total number of Americans not in the labor force equals 93 million Americans.
Those two statistics added up total to 240 million Americans. The difference between 319 million and 240 million Americans is 79 million Americans. I would assume that most of these Americans would be children. Just to double check, I looked up the total number of children aged 0-17 years of age and came up with the figure of 75 million, so that is pretty close.
My next question is this. How many total jobs are in America. According to the department of numbers, the total is 147 million if you look at CPS or 139 million if you look at CES.
Well, that looks like a pretty easy conclusion to draw. If our total labor force is only 147 million and there are only 147 million jobs, there are 93 million people not working because there aren't enough jobs.
My next question is this. Of that 93 million people, how many aren't working because they are retired?
According to the social security website, there are 64 million Americans collecting either social security, supplemental income, or both. This does not guarantee that they are not working but this next calculation is more of an estimate than the ones above.
Assuming that 64 million Americans are retired and not working, 93 million Americans minus 64 million (assumed) retired Americans leaves 29 million Americans not retired, not children, and not looking for work.
This 29 million I calculated only counts the people not part of the labor force. According to the Bureau of Labor Statistics, the actual number of unemployed Americans equal 18 million. Both these figures added together equal 47 million. Almost 15% of the total US population.
The unemployment rate is the total number of people without a job and looking for work divided by the total labor force. If people find work, the unemployment rate goes down. However, if people just give up and stop looking for work, they are no longer part of the labor force and the unemployment rate goes down.
According to the Bureau of Labor Statistics, there are 93 million Americans not part of the labor force. Over the last few months, I was wondering why so many people just aren't working. So I decided to do a little research.
How many Americans are there? 319 million according to the US Census.
According to the Bureau of Labor Statistics, our work force is 147 million Americans and the total number of Americans not in the labor force equals 93 million Americans.
Those two statistics added up total to 240 million Americans. The difference between 319 million and 240 million Americans is 79 million Americans. I would assume that most of these Americans would be children. Just to double check, I looked up the total number of children aged 0-17 years of age and came up with the figure of 75 million, so that is pretty close.
My next question is this. How many total jobs are in America. According to the department of numbers, the total is 147 million if you look at CPS or 139 million if you look at CES.
Well, that looks like a pretty easy conclusion to draw. If our total labor force is only 147 million and there are only 147 million jobs, there are 93 million people not working because there aren't enough jobs.
My next question is this. Of that 93 million people, how many aren't working because they are retired?
According to the social security website, there are 64 million Americans collecting either social security, supplemental income, or both. This does not guarantee that they are not working but this next calculation is more of an estimate than the ones above.
Assuming that 64 million Americans are retired and not working, 93 million Americans minus 64 million (assumed) retired Americans leaves 29 million Americans not retired, not children, and not looking for work.
This 29 million I calculated only counts the people not part of the labor force. According to the Bureau of Labor Statistics, the actual number of unemployed Americans equal 18 million. Both these figures added together equal 47 million. Almost 15% of the total US population.
Monday, September 29, 2014
One Crazy way to Increase Fuel Efficiency
A couple of years back, my buddy owned a Honda Accord. These cars are great. Fuel efficient, cheap insurance premiums, and they last forever. This is the kind of car a responsible man wants to own.
What my friend did next was something really admirable.
In pursuit of getting better gas mileage, he started stripping his car of dead weight. His tool of choice. Hatchet, if I remember correctly.
Over the next couple of weeks, I started seeing parts of his car disappearing. Back seats. Gone. Glove compartment. Gone. Cup holders. Gone.
He removed all the bottom carpet and padding. Using a hatchet, he tore all the plastic off the doors. Anything that made the interior look nice, he got rid of until the interior looked just like the inside of an aluminium can.
I've never done or tried this myself, but I would estimate the weight he removed from his car by at least 50 to 100 pounds. I don't really know how much gas he was able to save each week, but I'm sure he was able to notice a difference.
Obviously, this isn't a solution for everyone. Only consider trying this if you drive a beater that you don't intend to resell. You don't want to do this to a luxury car. This will also be inconvenient if you frequently drive passengers. And of course, if this seems like too much of a dumb idea to try, the easy solution is to just trade in the car for a motorcycle.
However, if you are a minimalist or really frugal and you enjoy making modifications; go ahead and try striping your car. Just don't be dumb about it. Don't remove things that will make your car unsafe to drive like any mirrors, the airbags, seat belts, or different bolts and bars underneath your car. Don't make your car unsafe or illegal to drive. Don't endanger your life or someone else to get better gas mileage. Also realize that some weight adds value to your car such as spare tires, tools to fix your car, and other emergency supplies.
Sunday, September 28, 2014
Lets all go to space
As a little kid, I was pretty big into action cartoons. Each day when I got home, I'd drop off my backpack and turn the tv on to see some DragonBall Z, Gundam Wing, or whatever else was on toonami. In between shows, toonami would air these motivational speeches/montages. I've linked to them below.
Space is the Place
Dreams
To hell with fear
These bumps were were there just to fill up some extra time and build up hype for the shows but I saw these on almost a daily basis. Broken Promise (dreams) aired when I was 13 but the message stuck for a long time.
Choose the path you want to walk in life. Realize there will be multiple obstacles that will get in your way. Do everything you can to keep moving forward. Keep making progress.
I'd find myself watching the video up on youtube during my early 20s. Nothing in life is ever guaranteed, but you have to do the best you can and see what you can accomplish.
Space is the Place is the montage I was thinking about in the last few weeks at work. The whole idea of blasting off into space and leaving everything else behind kind of feels what it is like when you decide to go your own way and free yourself of whatever is chaining you down.
Whether it is an oppressive government, copious amounts of debt, a miserable job, a toxic relationship, or mind numbing pop culture; escaping that nonsense feels just like blasting off into space. Out in space, you are free to pursue your own interests further or seek new hobbies.
While there is some comfort to be found in materialism, empty relationships, and internet trivia; these are things that will keep a man from freedom.
Free yourself of what is holding you back and blast off into space. Choose your freedom and go and explore what is out there. While it may not be as grand as orbiting Mars, the world is a very interesting place. Sitting at a computer, you can look up tutorials on how to repair cars, edit videos, publish books, play a guitar, cook chickens, and everything else.
Space is the Place
Dreams
To hell with fear
These bumps were were there just to fill up some extra time and build up hype for the shows but I saw these on almost a daily basis. Broken Promise (dreams) aired when I was 13 but the message stuck for a long time.
Choose the path you want to walk in life. Realize there will be multiple obstacles that will get in your way. Do everything you can to keep moving forward. Keep making progress.
I'd find myself watching the video up on youtube during my early 20s. Nothing in life is ever guaranteed, but you have to do the best you can and see what you can accomplish.
Space is the Place is the montage I was thinking about in the last few weeks at work. The whole idea of blasting off into space and leaving everything else behind kind of feels what it is like when you decide to go your own way and free yourself of whatever is chaining you down.
Whether it is an oppressive government, copious amounts of debt, a miserable job, a toxic relationship, or mind numbing pop culture; escaping that nonsense feels just like blasting off into space. Out in space, you are free to pursue your own interests further or seek new hobbies.
While there is some comfort to be found in materialism, empty relationships, and internet trivia; these are things that will keep a man from freedom.
Free yourself of what is holding you back and blast off into space. Choose your freedom and go and explore what is out there. While it may not be as grand as orbiting Mars, the world is a very interesting place. Sitting at a computer, you can look up tutorials on how to repair cars, edit videos, publish books, play a guitar, cook chickens, and everything else.
Saturday, September 27, 2014
Lifetime Strategy
The most valuable thing in my life is my freedom. My time. Well, that is the second most important thing. My life and my health is the most important thing.
Life and health is never guaranteed though. Nothing is ever guaranteed, except for death.
When we die is not known. We can expect to die of natural causes and perish around the age of 70, 80, or 90. I could get cancer or some other life threatening disease and perish at the age of 40 or 50. In the worst case, I could get killed in a car accident tomorrow. This is the reality that we all face.
With that being said, I want to make sure I can enjoy my life to the fullest extent possible. How does a person do this? Pursue that which makes you happy. What makes you happy? That is different for everyone. If you don't know what it is that makes you happy in life, then at least try to avoid the stuff in your life that makes you miserable.
To me, that which makes me miserable is working. The kind of hell of commuting to an office each morning, working a minimum of 8 hours, commuting back home, and enjoying only a few hours to myself each night is what I want to avoid. It is my goal to try to get through life working as little as possible.
There are a couple of ways to do this. First off, pursue a life of minimalist spending. Don't take or commit to any obligations or liabilities that drag out decades into the future or indefinitely. By adopting minimalist spending habits, you eliminate or mitigate the risk of being unable to pay for the liabilities in the future. If you don't need the money to pay off the liability, you don't need to work for it. By keeping annual expenses down as low as possible, you also minimize the amount of pain you experience when inflation hits.
The second way to reduce your need to work is to accumulate a large amount of capital when you are young. Instead of racking up large amounts of student and consumer debt as a kid, work as much as you possibly can and accumulate a large amount of cash. If you do decide to go to college, make sure to pursue something with a high earnings potential such as STEM. Pay off all your debts then accumulate capital.
By getting into a good financial position in the late 20s or early 30s, you make the rest of your life that much easier. Instead of having to repay consumer debt, maybe you can cut back on your hours and enjoy much more leisure.
Life and health is never guaranteed though. Nothing is ever guaranteed, except for death.
When we die is not known. We can expect to die of natural causes and perish around the age of 70, 80, or 90. I could get cancer or some other life threatening disease and perish at the age of 40 or 50. In the worst case, I could get killed in a car accident tomorrow. This is the reality that we all face.
With that being said, I want to make sure I can enjoy my life to the fullest extent possible. How does a person do this? Pursue that which makes you happy. What makes you happy? That is different for everyone. If you don't know what it is that makes you happy in life, then at least try to avoid the stuff in your life that makes you miserable.
To me, that which makes me miserable is working. The kind of hell of commuting to an office each morning, working a minimum of 8 hours, commuting back home, and enjoying only a few hours to myself each night is what I want to avoid. It is my goal to try to get through life working as little as possible.
There are a couple of ways to do this. First off, pursue a life of minimalist spending. Don't take or commit to any obligations or liabilities that drag out decades into the future or indefinitely. By adopting minimalist spending habits, you eliminate or mitigate the risk of being unable to pay for the liabilities in the future. If you don't need the money to pay off the liability, you don't need to work for it. By keeping annual expenses down as low as possible, you also minimize the amount of pain you experience when inflation hits.
The second way to reduce your need to work is to accumulate a large amount of capital when you are young. Instead of racking up large amounts of student and consumer debt as a kid, work as much as you possibly can and accumulate a large amount of cash. If you do decide to go to college, make sure to pursue something with a high earnings potential such as STEM. Pay off all your debts then accumulate capital.
By getting into a good financial position in the late 20s or early 30s, you make the rest of your life that much easier. Instead of having to repay consumer debt, maybe you can cut back on your hours and enjoy much more leisure.
Tuesday, September 23, 2014
Scouting Techniques for College Students
One of the most important lessons any man will learn in life is how important scouting is. Whenever you have the chance to learn about a situation before hand, do it. You don't want to jump into something completely blind.
Most kids will graduate high school at the age of 18 then jump into college the very next semester. One of the biggest differences a kid is going to notice between high school and college is that in college, you get to choose your field of study, your classes, and your schedule.
First thing first, don't major in something stupid. What is a stupid major? Go buy Worthless by Aaron Clarey.
After you make sure you major in some sort of STEM degree, realize that your degree will require you to take a lot of classes that are a complete waste of time and money. You will take at least 2 years of core classes which must be taken before you can actually pursue your field of study.
With that being said, you still need to take these worthless classes and do well in them. You need to do this to maintain a good GPA which has some affect on your employment prospects after graduating but it plays a more immediate effect on merit based scholarships.
Some of these classes are unavoidable. I'm sure every single major requires 2 English classes and most majors require some sort of foreign language class. Two history classes are required. If I recall correctly, I think that psychology is unavoidable and you have to take at least one philosophy class.
Some of these classes, you will have a choice to take. In my college days, I had to take 3 classes that were a 3000 level class outside of my field of study.
These classes will have nothing to do with your major. So to make your experience as painless as possible, go ahead and follow the path of least resistance. Choose the easy classes that you can do well in and boost your GPA. Just make sure that those credits count towards your degree.
Before signing up for your classes, you get to see the time slot and the professor that teaches the class. This is where the scouting comes in. Make sure to gather intel on your prospective teacher by looking them up on www.ratemyprofessors.com. If you are about to go to college or are in college and don't know about ratemyprofessor, bookmark this link now.
Rate my professor has been around since I was in high school. It has saved me on a few occasions. Most of the teachers you look up will be average. If you have the option to take a professor that is highly rated, you may want to sign up for those. Higher ratings tend to correlate with easier classes.
The biggest reason you want to use ratemyprofessors is to scan for professors that are absolutely insane. The difficulty of the exact same history class can vary drastically depending on who teaches it. If you find a professor with 20 ratings all rating the professor 1 or 2, make sure to avoid that professor. You don't need to make life harder than it already is.
I experienced this when I was about to sign up for an accounting class years back. I had the option to take it in the Summer but only one professor taught it in the summer. I saw 20 ratings off students just dumping all over her.
She was described as senile, retarded, argumentative, and contradictory. The comment that just absolutely broke it for me was that a student claimed this professor stated that debits went on the right and credits go on the left.
After reading all that, I decided to put that class off until the Fall where I could take a better professor.
You want to avoid getting an awful professor for a few important reasons. When I was in college, you were only allowed to withdraw from a class 6 times. If you withdrew from a class after 6 times, you would get an F for the class and that would tank your GPA.
The other real important reason you want to avoid withdrawing from a horrible class is time. If you drop a class, that is time that is being wasted. You have to get those credits sooner or later. In the case of a withdraw, you have to take those classes later.
The other scouting technique I want to briefly mention is getting the syllabus. Go to classes on the first day and make sure to get a copy of it. Unlike high school, in college, every graded item will show up on the syllabus. The point values for every item is listed and the schedule for every graded item is listed. Using the syllabus will let you track your current progress in the class and give you an idea of how much effort you have to put in to get a certain grade.
If you found this information helpful, please visit Academic Composition.
Most kids will graduate high school at the age of 18 then jump into college the very next semester. One of the biggest differences a kid is going to notice between high school and college is that in college, you get to choose your field of study, your classes, and your schedule.
First thing first, don't major in something stupid. What is a stupid major? Go buy Worthless by Aaron Clarey.
After you make sure you major in some sort of STEM degree, realize that your degree will require you to take a lot of classes that are a complete waste of time and money. You will take at least 2 years of core classes which must be taken before you can actually pursue your field of study.
With that being said, you still need to take these worthless classes and do well in them. You need to do this to maintain a good GPA which has some affect on your employment prospects after graduating but it plays a more immediate effect on merit based scholarships.
Some of these classes are unavoidable. I'm sure every single major requires 2 English classes and most majors require some sort of foreign language class. Two history classes are required. If I recall correctly, I think that psychology is unavoidable and you have to take at least one philosophy class.
Some of these classes, you will have a choice to take. In my college days, I had to take 3 classes that were a 3000 level class outside of my field of study.
These classes will have nothing to do with your major. So to make your experience as painless as possible, go ahead and follow the path of least resistance. Choose the easy classes that you can do well in and boost your GPA. Just make sure that those credits count towards your degree.
Before signing up for your classes, you get to see the time slot and the professor that teaches the class. This is where the scouting comes in. Make sure to gather intel on your prospective teacher by looking them up on www.ratemyprofessors.com. If you are about to go to college or are in college and don't know about ratemyprofessor, bookmark this link now.
Rate my professor has been around since I was in high school. It has saved me on a few occasions. Most of the teachers you look up will be average. If you have the option to take a professor that is highly rated, you may want to sign up for those. Higher ratings tend to correlate with easier classes.
The biggest reason you want to use ratemyprofessors is to scan for professors that are absolutely insane. The difficulty of the exact same history class can vary drastically depending on who teaches it. If you find a professor with 20 ratings all rating the professor 1 or 2, make sure to avoid that professor. You don't need to make life harder than it already is.
I experienced this when I was about to sign up for an accounting class years back. I had the option to take it in the Summer but only one professor taught it in the summer. I saw 20 ratings off students just dumping all over her.
She was described as senile, retarded, argumentative, and contradictory. The comment that just absolutely broke it for me was that a student claimed this professor stated that debits went on the right and credits go on the left.
After reading all that, I decided to put that class off until the Fall where I could take a better professor.
You want to avoid getting an awful professor for a few important reasons. When I was in college, you were only allowed to withdraw from a class 6 times. If you withdrew from a class after 6 times, you would get an F for the class and that would tank your GPA.
The other real important reason you want to avoid withdrawing from a horrible class is time. If you drop a class, that is time that is being wasted. You have to get those credits sooner or later. In the case of a withdraw, you have to take those classes later.
The other scouting technique I want to briefly mention is getting the syllabus. Go to classes on the first day and make sure to get a copy of it. Unlike high school, in college, every graded item will show up on the syllabus. The point values for every item is listed and the schedule for every graded item is listed. Using the syllabus will let you track your current progress in the class and give you an idea of how much effort you have to put in to get a certain grade.
If you found this information helpful, please visit Academic Composition.
Monday, September 22, 2014
Five Minute Job Salary Research
If you find this information useful, please visit www.academiccomposition.com.
Before deciding to commit to a college education, you have to have a general idea of what career path you want to pursue after college and if your major will lead you to that career path.
As the good captain said, you have to research starting salaries of the jobs you want to pursue.
10 years ago, this would have required an amount of effort. Today, you can just Google that information.
Take five minutes of your time and go to payscale and just type in different job titles into the search box.
Payscale.com will give you the job title, job descriptions, the national average salary and a range of salaries to expect. Some job titles will be exactly what you expect them to be. A barista average salary is $8.69 an hour without much of a range. Other job titles might be kind of vague and the range might be kind of wide. The average salary for a Business Consultant is $67,000 but the range goes from $44k to $110k. The idea of doing research for job salaries is to get a general idea of what jobs you might want to pursue.
There is one caveat I would like to mention about payscale. When you search for a specific job title, you get the national average of mostly everyone with that particular job title. Most of the people in the field will have multiple of years of experience and were hired before the economic downturn of 2008 and the health care reform act. With that being said, it might not be easy or realistic to earn the national average salary as soon as you graduate from college. It may take a couple of years of work to earn the average annual salary.
Take some time to research job salaries. It makes lifetime planning much easier.
Before deciding to commit to a college education, you have to have a general idea of what career path you want to pursue after college and if your major will lead you to that career path.
As the good captain said, you have to research starting salaries of the jobs you want to pursue.
10 years ago, this would have required an amount of effort. Today, you can just Google that information.
Take five minutes of your time and go to payscale and just type in different job titles into the search box.
Payscale.com will give you the job title, job descriptions, the national average salary and a range of salaries to expect. Some job titles will be exactly what you expect them to be. A barista average salary is $8.69 an hour without much of a range. Other job titles might be kind of vague and the range might be kind of wide. The average salary for a Business Consultant is $67,000 but the range goes from $44k to $110k. The idea of doing research for job salaries is to get a general idea of what jobs you might want to pursue.
There is one caveat I would like to mention about payscale. When you search for a specific job title, you get the national average of mostly everyone with that particular job title. Most of the people in the field will have multiple of years of experience and were hired before the economic downturn of 2008 and the health care reform act. With that being said, it might not be easy or realistic to earn the national average salary as soon as you graduate from college. It may take a couple of years of work to earn the average annual salary.
Take some time to research job salaries. It makes lifetime planning much easier.
Thursday, September 18, 2014
Excellent College Papers
When I was still in college, I took a number of classes which were not related to my field of study. Only 20% of the classes I took were my field of study. A number of my classes were related to my business field and then a good chunk of classes were completely unrelated to my field of study.
Luckily, most of my non accounting classes did not require the writing of essays. Usually, I just had to read the book, attend the lectures, and take a multiple choice test.
However, college papers were inevitable.
English 1
English 2
World History
Sociology
Political Science
These classes are pretty much unavoidable in any college major. If I remember correctly, I had to write a total of 14 to 15 essays for these classes total. All this just to become an accountant.
With each essay taking up an estimated 4 to 6 hours each, it took me 56 to 90 hours to complete this nonsense.
Back in my college years, I wish I would have known about Academic Composition.
Alex at Academic Composition will write your papers for you at a good price. Alex is a professional writer with 10 years of experience and has written over 1000 essays.
Each paper is original so you don't have to worry about being caught for plagiarism.
Take it from my experience, life just forces you to jump through hoops every now and again. Go ahead and visit Alex here at Academic Composition if you are interested.
Luckily, most of my non accounting classes did not require the writing of essays. Usually, I just had to read the book, attend the lectures, and take a multiple choice test.
However, college papers were inevitable.
English 1
English 2
World History
Sociology
Political Science
These classes are pretty much unavoidable in any college major. If I remember correctly, I had to write a total of 14 to 15 essays for these classes total. All this just to become an accountant.
With each essay taking up an estimated 4 to 6 hours each, it took me 56 to 90 hours to complete this nonsense.
Back in my college years, I wish I would have known about Academic Composition.
Alex at Academic Composition will write your papers for you at a good price. Alex is a professional writer with 10 years of experience and has written over 1000 essays.
Each paper is original so you don't have to worry about being caught for plagiarism.
Take it from my experience, life just forces you to jump through hoops every now and again. Go ahead and visit Alex here at Academic Composition if you are interested.
Sunday, September 14, 2014
Are you mad enough?
I'd like to share one of my favorite channels. The Black Brigade.
If you haven't listened to them, go ahead and listen to a few of their podcasts and nightcaps.
I've listened to all of their stuff because I work several hours from home and I have the option to listen to podcasts while I manipulate spreadsheets.
The Black Brigade are very red pill. The topics covered include the state of our economy and how American is making decisions on foreign policies.
What separates them from other channels is they emphasis going Galt. Pulling away from this system as much as possible and preparing for the worst possible situation for our country. They also delve into the topics of prepping a little.
Earlier today, The Green Steelhead released the night cap linked below.
DT Nightcap #12
The concept of the video was that you have to get pissed off to get motivated to make changes to your life and improve your life. Obviously, there is stuff that is out of your control. The stuff that is within your control, you need to take charge of that.
This nightcap was the best pep talk I've heard in a while. Even though this isn't new or revolutionary information, it is good to be reminded of it every now and again.
I encourage everyone to listen to the DT Nightcap #12. Also check out their other podcasts.
Check them out here.
Good night.
If you haven't listened to them, go ahead and listen to a few of their podcasts and nightcaps.
I've listened to all of their stuff because I work several hours from home and I have the option to listen to podcasts while I manipulate spreadsheets.
The Black Brigade are very red pill. The topics covered include the state of our economy and how American is making decisions on foreign policies.
What separates them from other channels is they emphasis going Galt. Pulling away from this system as much as possible and preparing for the worst possible situation for our country. They also delve into the topics of prepping a little.
Earlier today, The Green Steelhead released the night cap linked below.
DT Nightcap #12
The concept of the video was that you have to get pissed off to get motivated to make changes to your life and improve your life. Obviously, there is stuff that is out of your control. The stuff that is within your control, you need to take charge of that.
This nightcap was the best pep talk I've heard in a while. Even though this isn't new or revolutionary information, it is good to be reminded of it every now and again.
I encourage everyone to listen to the DT Nightcap #12. Also check out their other podcasts.
Check them out here.
Good night.
Saturday, September 13, 2014
Creative ways to build resumes
Intro: You can skip to the next bold heading to get to the point
The summer of 2010 was the worst time I ever had searching for work. I was fresh out of college with my degree in accounting. I graudated Magna Cum Laude with a cumulative GPA of 3.85. The biggest problem I had was the fact that I had no work experience at all.
At least I was prepared for it. The financial meltdown happened in 2008. The previous months leading up to graduating, I kept hearing from students around me talking about students not being able to find jobs and competing with graduated students from previous semesters.
At that time, I had to learn how to do the job search on my own. The most disappointing thing I experienced were how few jobs were available. I wanted to find some job relating to accounting. I wanted to be a staff accountant, work in A/P or A/R, send payments, or do anything related to accounting.
Each day, I would search for the accounting jobs available in my area and I saw a total amount of 5 or 7 job opportunities. The problem was made worse when most of those positions required 2 years of accounting work experience. Having a high GPA in your field of study meant little to nothing when it came to actually getting hired. The idea of getting a college student getting a job offer before graduating seemed like just a dream at that point.
During a 3 month period, I had to spam my resume on different job sites in order to find whatever work possible. Over that period, I must have sent out 50 applications without much luck. I got desperate enough to start sending applications to fast food places and just pick up a part time job to get some money coming in.
At this point, it was a common strategy for many of my peers to go back to school and pick up a masters degree. This was completely out of the question for me because I had no way to pay for tuition. I got through college with merit based scholarships but the same scholarships were not available for graduate school. I could take loans but I was completely unwilling to take the risk of assuming thousands of dollars worth of debt without a guarantee for employment at the end.
Spamming my resume wasn't getting me much success. Maybe there were things I could add to my resume to make me look like a more valuable employee.
How to build up your resume:
While browsing the internet, I thought about working for a common tax preparation company. The company taught an 8 week class which was a total of 84 hours and after the class was completed, you were guaranteed an interview. The price was good, it only costed $250. Even if I didn't get hired, I would have something to boost my resume and have a better chance at getting a different job.
I really had something to believe in with this company. If you got hired, you could keep taking additional tax classes to further specialize. The classes would be free if you were hired.
If you completed all the classes, you had the option of becoming an enrolled agent.
The funny thing is that I actually was hired by a different company during the middle of taking the class. My dad knew a guy who ran a small business and he had a similar background to me. He was a CPA and he actually worked for the same company I was trying to work for.
I worked for his company for 15 months before our contracts ended abruptly. I was unemployed again. At that point, I decided to look for another certification or achievement. My previous boss owned an insurance company and he was willing to pay for me to become an agent.
The cost of the class was only about $250. It lasted one week and was a total of 40 hours. The class was just like a college course. You learn about the different types of property and casualty insurance, what they cover, and different legal topics. After that is done, you go to a testing center you get a certificate if you pass.
On a separate occasion, I also paid for and took a class for life insurance. I got my license to sell life insurance and I was going to get licensed to sell property and casualty insurance until....
I found another job. As fate would have it, I didn't have to get into the insurance business and I never actually sold anything.
The job I took was a contract job that lasted seven months. By that point in my life, I had saved up a good amount of money where I could just take a few months off as a vacation.
I work as an accountant today. It took me 3 years after graduating college to become an accountant. I'm grateful for being where I am today because I was beginning to believe I would never become an accountant.
My boss encourages me to continue to collect certifications and increase my skill set. After doing a little bit of research, I found that it is possible to become a certified treasury professional.
Conclusion:
To any student recently graduating college, I would encourage them to continue to expand your skill set. Including these experiences and achievements on your resume will show your potential employer that you are willing to work hard, continually improve yourself, learn new skills, and show your ability to adapt to new situations.
On top of all that, you can learn useful information from the classes you take. After taking the insurance classes, I learned how insurance works, what and why deductibles exist, what sort of events are covered by different types of insurance, and how different insurance policies are priced. After taking the tax preparation class, I learned how to receive more money in your paycheck by filling out a W-4 and I learned about the different types of tax benefits from investing in different retirement programs.
The other point I want to talk about is that taking these extra classes or certifications can broaden your perspective a little. I know that doesn't sound like much, but you can get more of an idea of what you want to pursue (or not pursue) in life. Life is an interesting experience. Go ahead and explore it a little.
Compared to a master degree, you can pick up smaller achievements at a fraction of the cost. Tuition for a master degree can cost tens of thousands of dollars while becoming licensed to sell insurance costs only a couple hundred dollars and take only a few weeks. Because of this, the rewards for the certifications/licenses may be smaller but the risks are also smaller.
I've taken classes for insurance and tax. These classes can be found easily online with a few Google searches.
For anyone pursuing the accounting/finance field, I'd recommend getting certified to use QuickBooks or a different accounting software.
If you pursue the IT fields, there are countless amounts of certificates you can pick up for C++, java, and html. Some may be more expensive than other. The IT field is where large amounts of money can be made.
Or if an office job isn't for you, the certificate training programs for becoming a mechanic, plumber, or carpenter only take up to 2 years.
The world is an interesting place. Go out and try new things. Its kind of like collecting achievements while playing Xbox.
The summer of 2010 was the worst time I ever had searching for work. I was fresh out of college with my degree in accounting. I graudated Magna Cum Laude with a cumulative GPA of 3.85. The biggest problem I had was the fact that I had no work experience at all.
At least I was prepared for it. The financial meltdown happened in 2008. The previous months leading up to graduating, I kept hearing from students around me talking about students not being able to find jobs and competing with graduated students from previous semesters.
At that time, I had to learn how to do the job search on my own. The most disappointing thing I experienced were how few jobs were available. I wanted to find some job relating to accounting. I wanted to be a staff accountant, work in A/P or A/R, send payments, or do anything related to accounting.
Each day, I would search for the accounting jobs available in my area and I saw a total amount of 5 or 7 job opportunities. The problem was made worse when most of those positions required 2 years of accounting work experience. Having a high GPA in your field of study meant little to nothing when it came to actually getting hired. The idea of getting a college student getting a job offer before graduating seemed like just a dream at that point.
During a 3 month period, I had to spam my resume on different job sites in order to find whatever work possible. Over that period, I must have sent out 50 applications without much luck. I got desperate enough to start sending applications to fast food places and just pick up a part time job to get some money coming in.
At this point, it was a common strategy for many of my peers to go back to school and pick up a masters degree. This was completely out of the question for me because I had no way to pay for tuition. I got through college with merit based scholarships but the same scholarships were not available for graduate school. I could take loans but I was completely unwilling to take the risk of assuming thousands of dollars worth of debt without a guarantee for employment at the end.
Spamming my resume wasn't getting me much success. Maybe there were things I could add to my resume to make me look like a more valuable employee.
How to build up your resume:
While browsing the internet, I thought about working for a common tax preparation company. The company taught an 8 week class which was a total of 84 hours and after the class was completed, you were guaranteed an interview. The price was good, it only costed $250. Even if I didn't get hired, I would have something to boost my resume and have a better chance at getting a different job.
I really had something to believe in with this company. If you got hired, you could keep taking additional tax classes to further specialize. The classes would be free if you were hired.
If you completed all the classes, you had the option of becoming an enrolled agent.
The funny thing is that I actually was hired by a different company during the middle of taking the class. My dad knew a guy who ran a small business and he had a similar background to me. He was a CPA and he actually worked for the same company I was trying to work for.
I worked for his company for 15 months before our contracts ended abruptly. I was unemployed again. At that point, I decided to look for another certification or achievement. My previous boss owned an insurance company and he was willing to pay for me to become an agent.
The cost of the class was only about $250. It lasted one week and was a total of 40 hours. The class was just like a college course. You learn about the different types of property and casualty insurance, what they cover, and different legal topics. After that is done, you go to a testing center you get a certificate if you pass.
On a separate occasion, I also paid for and took a class for life insurance. I got my license to sell life insurance and I was going to get licensed to sell property and casualty insurance until....
I found another job. As fate would have it, I didn't have to get into the insurance business and I never actually sold anything.
The job I took was a contract job that lasted seven months. By that point in my life, I had saved up a good amount of money where I could just take a few months off as a vacation.
I work as an accountant today. It took me 3 years after graduating college to become an accountant. I'm grateful for being where I am today because I was beginning to believe I would never become an accountant.
My boss encourages me to continue to collect certifications and increase my skill set. After doing a little bit of research, I found that it is possible to become a certified treasury professional.
Conclusion:
To any student recently graduating college, I would encourage them to continue to expand your skill set. Including these experiences and achievements on your resume will show your potential employer that you are willing to work hard, continually improve yourself, learn new skills, and show your ability to adapt to new situations.
On top of all that, you can learn useful information from the classes you take. After taking the insurance classes, I learned how insurance works, what and why deductibles exist, what sort of events are covered by different types of insurance, and how different insurance policies are priced. After taking the tax preparation class, I learned how to receive more money in your paycheck by filling out a W-4 and I learned about the different types of tax benefits from investing in different retirement programs.
The other point I want to talk about is that taking these extra classes or certifications can broaden your perspective a little. I know that doesn't sound like much, but you can get more of an idea of what you want to pursue (or not pursue) in life. Life is an interesting experience. Go ahead and explore it a little.
Compared to a master degree, you can pick up smaller achievements at a fraction of the cost. Tuition for a master degree can cost tens of thousands of dollars while becoming licensed to sell insurance costs only a couple hundred dollars and take only a few weeks. Because of this, the rewards for the certifications/licenses may be smaller but the risks are also smaller.
I've taken classes for insurance and tax. These classes can be found easily online with a few Google searches.
For anyone pursuing the accounting/finance field, I'd recommend getting certified to use QuickBooks or a different accounting software.
If you pursue the IT fields, there are countless amounts of certificates you can pick up for C++, java, and html. Some may be more expensive than other. The IT field is where large amounts of money can be made.
Or if an office job isn't for you, the certificate training programs for becoming a mechanic, plumber, or carpenter only take up to 2 years.
The world is an interesting place. Go out and try new things. Its kind of like collecting achievements while playing Xbox.
Friday, September 12, 2014
Video games trained me for office work
Different men follow different paths in life. Some of us
will become mechanics, others will join the army, people will work in
restaurants, and a lot of men will end up doing desk work in front of a
computer for 8 hours every day.
Enter the corporate world. Whether you become an accountant,
analyst, sales executive, customer service representative, help desk worker….
Etc, your day will be very similar.
Show up early in the morning, grind through repetitive tasks
for a few hours, take a lunch break, grind though more repetitive tasks then go
home.
By repetitive, I do mean repetitive. The first two jobs I
had, my job responsibilities never changed. I did the same thing every day.
As an analyst, I had to answer phone calls for customer
service every day and process invoices every day to send out payments to day
care centers. Each month, I processed and sent out more than 200 invoices.
My second job, also as an analyst, I spent 8 hours each day
inspecting different cases checking if they had enough flood insurance.
Often times, I felt more like a robot than a man. Just shut
the brain off and repeat a pattern.
I came to a sad but amusing conclusion one day while
reviewing a home equity line of credit document.
Out of all the skills I learned while growing up, I learned
the most important skill and ability to function in the corporate world by …….
Playing Final Fantasy 7
Actually, it wasn’t just Final Fantasy 7. It was Pokemon,
Breath of Fire 3, Kingdom Hearts and pretty much any RPG video game.
All these games (first playthrough) required lots of
grinding.
I guess I spent hundreds or thousands of hours smashing
imps, tonberries, nobodies, zombies, and pidgeys just to gain experience find
gold and advance the plot of the game.
I remember on Pokemon Red, the clock maxes out at 255 hours.
256 is a magic number in 8 bit video games because of the hexadecimal system.
Office work, repetitive office work, requires a lot of time
and patience. You just have to sit there and do your work.
Tuesday, August 26, 2014
Academic Composition
Freelancing opportunities with Academic Composition
Hello everyone.
A friend of mine is looking for people to advertise his services online.
If you are willing to post some advertisements and you live in one of the following cities.
1. Honolulu, HI
2. Austin, TX
3. Dallas, TX
4. Minneapolis, MN
5. Los Angeles, CA
6. Philadelphia, PA
7. Pittsburgh, PA
8. Ann Arbor, MI
9. Atlanta, GA
10. Vancouver, BC
11. Toronto, ON
12. Boston, MA
13. New York, NY
14. Denver, CO
15. Sacramento, CA
16. Portland, OR
17. San Diego, CA
18. Miami, FL
19. Jacksonville, FL
20. Phoenix, AZ
Let me know and we can talk further.
You will get compensated for each day your ad stays live on craigslist and earn a bonus for every customer referred to Academic Composition.
Hello everyone.
A friend of mine is looking for people to advertise his services online.
If you are willing to post some advertisements and you live in one of the following cities.
1. Honolulu, HI
2. Austin, TX
3. Dallas, TX
4. Minneapolis, MN
5. Los Angeles, CA
6. Philadelphia, PA
7. Pittsburgh, PA
8. Ann Arbor, MI
9. Atlanta, GA
10. Vancouver, BC
11. Toronto, ON
12. Boston, MA
13. New York, NY
14. Denver, CO
15. Sacramento, CA
16. Portland, OR
17. San Diego, CA
18. Miami, FL
19. Jacksonville, FL
20. Phoenix, AZ
Let me know and we can talk further.
You will get compensated for each day your ad stays live on craigslist and earn a bonus for every customer referred to Academic Composition.
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