Monday, April 28, 2014
How to mitigate the risk of marriage/divorce
One reason I would never want to get married is the risk involved with divorce.
Growing up, I recall hearing several stories about men losing half of all they had or all of it during a divorce.
After taking a legal class in college, I learned some very basic stuff about divorce laws.
Two types of laws exist.
1. Whatever the man and woman enter the marriage with, they leave with.
2. Community property. The estate of both are totaled up and split 50/50 between both.
Community property is far more dangerous and common.
I think the biggest mistake that most men make is marrying a woman with a net worth far less than his own.
Example one.
Man A marries woman B.
Man A has a net worth of $100,000.
Woman B has a net worth of $30,000.
Upon divorce, both parties leave with $65,000 net worth.
Man A loses 35% of his net worth.
Example two.
Man A marries woman B.
Man A has a net worth of $100,000.
Woman B has a net worth of $5,000.
Upon divorce, both parties leave with a net worth of $52,500.
Man A loses 47.5% of his net worth.
Sounds really bad. But it could be worth.
Debts can also be included in the estate.
Man A has a net worth of $100,000.
Woman B has a net worth of -$20,000.
Upon divorce, both parties leave with a net worth of $40,000.
Man A loses 60% of his net worth.
It is possible to protect yourself from this sort of risk with a prenuptial agreement. One thing I would like to point out is that while a prenuptial agreement is good to have, it is no guarantee that it will protect you.
Remember, the legal system is not perfect. It is not unheard of that prenuptial agreements get completely disregarded from time to time. I would not want to test it.
Personally, the risks of getting married are just too much for me. They outweigh the benefits.
However, if you really decide to get married, it is important to choose the right woman.
I'd say the best way to protect your wealth from the risk of divorce is to marry a woman with a net worth that is very close to yours.
Example three.
Man A has a net worth of $100,000.
Woman B has a net worth of $80,000.
Upon divorce, both parties leave with $90,000 net worth.
Man A loses 10% of his net worth.
Much less risky this way.
If you do get married, it is very important to find a woman that is financially responsible and doesn't have crazy spending habits.
Your risks go down significantly if your woman has a higher net worth than yours.
Thursday, April 24, 2014
Investing basics: Average rate of return vs Real rate of return
If you decide to put some money in some investments and you want to do some research, it is important to look at the real rate of return vs the average rate of return.
Lets look at two companies.
Company A Company B
Starts with $100 Starts with $100
After year one -20% return After year one 15% return
After year two 50% return After year two 15% return
Both companies produced a 30% return after two years. On average, each company produced 15% return per year.
But Company B produced more money over these two years.
Company A Company B
Starts with $100 Starts with $100
After year one -20% return After year one 15% return
After year two 50% return After year two 15% return
End of year one $80 End of year one $115
End of year two $120 End of year two $132.25
Total rate of return 20% Total rate of return 32.25%
Rate of return per year 10% Rate of return per year 16.125%
Remember, when negative rates of returned are considered, the average rate of return will be greatly skewed.
Lets look at two companies.
Company A Company B
Starts with $100 Starts with $100
After year one -20% return After year one 15% return
After year two 50% return After year two 15% return
Both companies produced a 30% return after two years. On average, each company produced 15% return per year.
But Company B produced more money over these two years.
Company A Company B
Starts with $100 Starts with $100
After year one -20% return After year one 15% return
After year two 50% return After year two 15% return
End of year one $80 End of year one $115
End of year two $120 End of year two $132.25
Total rate of return 20% Total rate of return 32.25%
Rate of return per year 10% Rate of return per year 16.125%
Remember, when negative rates of returned are considered, the average rate of return will be greatly skewed.
Wednesday, April 23, 2014
Insurance basics: Deductables
If you have any sort of insurance such as auto, homeowners, or health; it is important to know what a deductible is and the amounts of your deductibles.
Short answer, a deductible is the amount of risk that you bear yourself.
For example, Jim has an auto insurance policy with collision coverage. His deductible is $500.
Jim crashes his Honda into a tree and incurs $5,000 of damages.
Jim submits a claim for $5,000 to get his car fixed. Jim's auto insurance company sends him $4,500.
If Jim had a $1,000 deductible, the insurance company would have sent him only $4,000.
Another example.
If Jim gets into a fender bender and incurs $200 in damages, the insurance company will send him nothing because the damages were less than the deductible.
When it comes to deductibles, the amount of your deductible will affect the price of your premiums.
If you have a higher deductible, you will get cheaper premiums because you are a cheaper risk.
In the case of an accident, you assume more risk. Should an accident occur, the amount of the deductible is paid by you and the insurance company pays you less money.
If you have a lower deductible, you will get more expensive premiums. You bear less risk and the insurance company bears more risk. In the case of an accident, they will pay you more money.
When you have a policy that has a deductible, you can adjust the amount of risk you want to bear by adjusting your deductibles. If you feel comfortable taking on more risk, you can save some money. If you want less risk, you have to pay a higher price for higher quality coverage.
If you feel like you are a safe driver and have a good financial position and maybe your car isn't worth very much; you might be better off increasing the deductible on your collision coverage.
This is how deductibles work for any kind of insurance policy.
Short answer, a deductible is the amount of risk that you bear yourself.
For example, Jim has an auto insurance policy with collision coverage. His deductible is $500.
Jim crashes his Honda into a tree and incurs $5,000 of damages.
Jim submits a claim for $5,000 to get his car fixed. Jim's auto insurance company sends him $4,500.
If Jim had a $1,000 deductible, the insurance company would have sent him only $4,000.
Another example.
If Jim gets into a fender bender and incurs $200 in damages, the insurance company will send him nothing because the damages were less than the deductible.
When it comes to deductibles, the amount of your deductible will affect the price of your premiums.
If you have a higher deductible, you will get cheaper premiums because you are a cheaper risk.
In the case of an accident, you assume more risk. Should an accident occur, the amount of the deductible is paid by you and the insurance company pays you less money.
If you have a lower deductible, you will get more expensive premiums. You bear less risk and the insurance company bears more risk. In the case of an accident, they will pay you more money.
When you have a policy that has a deductible, you can adjust the amount of risk you want to bear by adjusting your deductibles. If you feel comfortable taking on more risk, you can save some money. If you want less risk, you have to pay a higher price for higher quality coverage.
If you feel like you are a safe driver and have a good financial position and maybe your car isn't worth very much; you might be better off increasing the deductible on your collision coverage.
This is how deductibles work for any kind of insurance policy.
Tuesday, April 22, 2014
Wal Mart
Wal Mart. By this, I mean, you want to avoid department stores like Macy's or JCP.
You want to avoid these department stores if you want to buy clothes.
The mark ups on clothing is kind of crazy. I recall seeing pairs of jeans go for $35 to $50 in department stores.
At Wal Mart, a pair of jeans goes for $15. The only note worthy difference is some kind of embroidered logo or design on one of the back pockets.
So, for a $50 pair of jeans at JCP, you can buy 2 or 3 jeans at Wal Mart.
Just about every clothing item is marked up considerably at a department store. Collared button up shirts cost $35 in departments but cost only about $15 to $20 at Wal Mart.
Arguably, the products in department stores are perceived to be of a higher quality and/or prestige, but ask yourself if it is really worth it spending double or triple the price. Wal Mart offers the basic stuff needed for work and casual. It won't stand up, but it gets the job done.
Even if it is that important to look extra nice, just spend the extra money on the stuff that people will see the most of (the shirt and pants). Limit the amount of spending at department stores.
It seems to make little to no sense to buy expensive socks, ties, belts, or wallets if those items have a very low viability.
You want to avoid these department stores if you want to buy clothes.
The mark ups on clothing is kind of crazy. I recall seeing pairs of jeans go for $35 to $50 in department stores.
At Wal Mart, a pair of jeans goes for $15. The only note worthy difference is some kind of embroidered logo or design on one of the back pockets.
So, for a $50 pair of jeans at JCP, you can buy 2 or 3 jeans at Wal Mart.
Just about every clothing item is marked up considerably at a department store. Collared button up shirts cost $35 in departments but cost only about $15 to $20 at Wal Mart.
Arguably, the products in department stores are perceived to be of a higher quality and/or prestige, but ask yourself if it is really worth it spending double or triple the price. Wal Mart offers the basic stuff needed for work and casual. It won't stand up, but it gets the job done.
Even if it is that important to look extra nice, just spend the extra money on the stuff that people will see the most of (the shirt and pants). Limit the amount of spending at department stores.
It seems to make little to no sense to buy expensive socks, ties, belts, or wallets if those items have a very low viability.
Sunday, April 20, 2014
Not required to file taxes? Do so anyway.
I would like to think this is common knowledge, but I guess there are some people that don't know this.
This information would be most helpful to kids in high school or college working part time.
Each year, when you work, you will be required to file taxes if you make more than a certain amount of money.
Typically, this amount will equal your standard deduction plus your personal exemption. For the tax year of 2013, this amount was about $10,000 if you are single.
If you made less than that amount, you are not required to file taxes.
But you should do so anyway.
If you earned less than $10,000 a year, you will most likely owe nothing in taxes. However, if you work for an employee as a W-2 employee, you will be subject to withholding from your paycheck.
The amount taken from your paycheck will go to state income tax, federal income tax, and FICA.
The employer is required to withhold these amounts from your paycheck. If you own no taxes, you can get back the amount that was taken from you for state income tax and federal income tax. I think FICA is just lost forever.
File your taxes, and most likely, you notice that you will get a refund.
This is your money. Make sure you get it.
While this information is useful for people working part time or minimum wage jobs; it would also benefit people who were working a full time job and laid off pretty early in the year.
This information would be most helpful to kids in high school or college working part time.
Each year, when you work, you will be required to file taxes if you make more than a certain amount of money.
Typically, this amount will equal your standard deduction plus your personal exemption. For the tax year of 2013, this amount was about $10,000 if you are single.
If you made less than that amount, you are not required to file taxes.
But you should do so anyway.
If you earned less than $10,000 a year, you will most likely owe nothing in taxes. However, if you work for an employee as a W-2 employee, you will be subject to withholding from your paycheck.
The amount taken from your paycheck will go to state income tax, federal income tax, and FICA.
The employer is required to withhold these amounts from your paycheck. If you own no taxes, you can get back the amount that was taken from you for state income tax and federal income tax. I think FICA is just lost forever.
File your taxes, and most likely, you notice that you will get a refund.
This is your money. Make sure you get it.
While this information is useful for people working part time or minimum wage jobs; it would also benefit people who were working a full time job and laid off pretty early in the year.
Saturday, April 19, 2014
Why to invest in precious metal
Why you want to invest in precious metal?
Precious metals are a hedge against inflation. Part of the reason gold increases in value is because of inflation.
It is a lot easier for the government to create more money than go out and mine gold.
People also may be compelled to buy precious metals if they feel uncertain about the future of the country.
And there is a lot of reason to worry.
http://www.usdebtclock.org/
America is not a fiscally responsible country. We spend more money than we make. At the end of fiscal year 2014, our country will have run a deficit of $650 billion.
America has run annual deficits for the last several years.
http://www.usgovernmentspending.com/federal_deficit_chart.html
I think the last time we had a budget surplus was 2000, maybe 2001.
Our country spends over $800 billion on social security a year and almost another $800 billion on medicare/medicaid in a year.
Because our population is getting older, these expenses will increase year after year.
And without any reforms to the programs, these benefits are promised to most US citizens.
The problem is that, without reform, America as of today will owe $128 trillion.
With all these problems, it is safe to assume that the US dollar will continue to lose value in the future.
Ok, now back to precious metals.
Precious metals is one way to protect yourself against inflation.
This is the general principle. One ounce of silver today costs about $20 dollars.
Where I live, $20 will buy me 5.7 gallons of gas.
One ounce of silver will buy roughly 5.7 gallons of gas.
Say in ten years, 5.7 gallons of gas will cost $35.
Say in ten years, 1 ounce of silver costs $35.
You could sell your ounce of silver for $35 to buy one gallon of gas at a cheaper rate than using weaker dollars in the future.
Stocking up metals can also be a good storage of wealth in case the country goes towards economic weakness.
Gold and silver is valued and store in more countries than the US. China and India have been stocking up on it.
Precious metals are a hedge against inflation. Part of the reason gold increases in value is because of inflation.
It is a lot easier for the government to create more money than go out and mine gold.
People also may be compelled to buy precious metals if they feel uncertain about the future of the country.
And there is a lot of reason to worry.
http://www.usdebtclock.org/
America is not a fiscally responsible country. We spend more money than we make. At the end of fiscal year 2014, our country will have run a deficit of $650 billion.
America has run annual deficits for the last several years.
http://www.usgovernmentspending.com/federal_deficit_chart.html
I think the last time we had a budget surplus was 2000, maybe 2001.
Our country spends over $800 billion on social security a year and almost another $800 billion on medicare/medicaid in a year.
Because our population is getting older, these expenses will increase year after year.
And without any reforms to the programs, these benefits are promised to most US citizens.
The problem is that, without reform, America as of today will owe $128 trillion.
With all these problems, it is safe to assume that the US dollar will continue to lose value in the future.
Ok, now back to precious metals.
Precious metals is one way to protect yourself against inflation.
This is the general principle. One ounce of silver today costs about $20 dollars.
Where I live, $20 will buy me 5.7 gallons of gas.
One ounce of silver will buy roughly 5.7 gallons of gas.
Say in ten years, 5.7 gallons of gas will cost $35.
Say in ten years, 1 ounce of silver costs $35.
You could sell your ounce of silver for $35 to buy one gallon of gas at a cheaper rate than using weaker dollars in the future.
Stocking up metals can also be a good storage of wealth in case the country goes towards economic weakness.
Gold and silver is valued and store in more countries than the US. China and India have been stocking up on it.
Friday, April 18, 2014
Stuff to Avoid: Starbucks
This is a lifestyle change.
In economics, there is a principle that states most people make decisions on the margin.
When It comes to making a single decision without too much importance a person will give very little thought to making the decision.
You need to get something to eat for lunch, you get a combo at Burger King. You spend the $6.50. Everything is alright.
However, if you do this every day, you will spend $2372.50 a year on Burger King (365*6.50).
My econ professor made the analogy of drinking beers. You are fine at 3 so you have another. You are fine at 6 so you decide to have one more. But by the time you get to the 14 or 15, you aren't quite sure if the next one is going to make you throw up.
I really love coffee. I can't live without the stuff.
I drink my coffee black. No sugar. The correct way to drink coffee.
Not many people do this, not even people from older generations. For which, I am really surprised.
But I would encourage more people to do so.
Because, for a man like me, Starbucks is overpriced.
By this, I mean that Starbucks coffee is way overpriced.
I'd say that most people that get coffee from Starbucks would order an espresso, frappuccino, latte, or cappuccino.
From Starbuck's website, a Hazelnut Frappuccino (16oz) contains 390 calories and costs probably 3 dollars plus.
One day, every now and then is fine. But, if it is a man's MO to get a expensive coffee at Starbucks every day, the annual cost of coffee will total $1095.
To be a little more realistic, lets pretend that man only gets a drink at Starbucks before work each morning. The cost of expensive coffee per year totals $780.
In contrast, what I would recommend, instead of Starbucks, is getting coffee from McDonalds.
Small, medium, or large, coffee is one dollar at McDonalds (as of 4-18-14).
As an extra bonus, if you drink coffee without cream or sugar, a cup of black coffee only has about 5 calories.
Annual cost of coffee $365 (every day).
Annual cost of coffee $260 (before workdays only).
Assuming that you buy a cup of coffee every day, annual savings on coffee by switching from Starbucks to McDonalds: $520 to $730.
Of course, you could save more money by forgoing coffee all together (I never would).
Of course, you could save more money by brewing your own coffee at home.
But, I love coffee, and I've never been able to get the same quality coffee from brewing at home than you can get from a restaurant.
Now, I recommend not getting coffee from Starbucks. Even if you order plain black coffee from Starbucks, coffee still costs at least $1.85 to $2. And, it tastes awful compared McDonald's coffee.
In economics, there is a principle that states most people make decisions on the margin.
When It comes to making a single decision without too much importance a person will give very little thought to making the decision.
You need to get something to eat for lunch, you get a combo at Burger King. You spend the $6.50. Everything is alright.
However, if you do this every day, you will spend $2372.50 a year on Burger King (365*6.50).
My econ professor made the analogy of drinking beers. You are fine at 3 so you have another. You are fine at 6 so you decide to have one more. But by the time you get to the 14 or 15, you aren't quite sure if the next one is going to make you throw up.
I really love coffee. I can't live without the stuff.
I drink my coffee black. No sugar. The correct way to drink coffee.
Not many people do this, not even people from older generations. For which, I am really surprised.
But I would encourage more people to do so.
Because, for a man like me, Starbucks is overpriced.
By this, I mean that Starbucks coffee is way overpriced.
I'd say that most people that get coffee from Starbucks would order an espresso, frappuccino, latte, or cappuccino.
From Starbuck's website, a Hazelnut Frappuccino (16oz) contains 390 calories and costs probably 3 dollars plus.
One day, every now and then is fine. But, if it is a man's MO to get a expensive coffee at Starbucks every day, the annual cost of coffee will total $1095.
To be a little more realistic, lets pretend that man only gets a drink at Starbucks before work each morning. The cost of expensive coffee per year totals $780.
In contrast, what I would recommend, instead of Starbucks, is getting coffee from McDonalds.
Small, medium, or large, coffee is one dollar at McDonalds (as of 4-18-14).
As an extra bonus, if you drink coffee without cream or sugar, a cup of black coffee only has about 5 calories.
Annual cost of coffee $365 (every day).
Annual cost of coffee $260 (before workdays only).
Assuming that you buy a cup of coffee every day, annual savings on coffee by switching from Starbucks to McDonalds: $520 to $730.
Of course, you could save more money by forgoing coffee all together (I never would).
Of course, you could save more money by brewing your own coffee at home.
But, I love coffee, and I've never been able to get the same quality coffee from brewing at home than you can get from a restaurant.
Now, I recommend not getting coffee from Starbucks. Even if you order plain black coffee from Starbucks, coffee still costs at least $1.85 to $2. And, it tastes awful compared McDonald's coffee.
Saturday, April 12, 2014
Why I Hate Traveling
Sometimes, I wonder how I got so lucky in life.
Given a choice between flying to Italy for a week to see the Leaning Tower and sitting at home for a week to play XBOX, I'd rather sit at home and play some COD.
I hate doing something that the vast majority of people enjoy. And a lot of women encourage me greatly to go see different countries.
To that I say to them, "Do you know how much that costs?"
My mom likes to travel to Taiwan once every two years. Each time, her round trip ticket is at least $1000 in the season that she goes.
It makes my brain bleed that a person would spend that much on a plane ticket.
$1000 is 50 ounces of silver.
$1000 is 2/3 the value of my car.
$1000 is 5 playstation 3s
$1000 is 2 ipad airs
(as of 4/12/14)
$1000 is just the cost of the plane ticket to Taiwan. This amount doesn't include cost of food, lodging, and doing fun stuff.
Also, traveling requires planning, packing, scheduling time off work, getting gate raped in airport security, and spending 1.5 to 2 days on a plane.
If I do travel, I'd much rather just stay domestic.
Take a week off work, check out stuff in the city of Atlanta.
Visit the high museum, world of coke, Botanical Garden, aquarium.
All that at a fraction of the cost of flying to another country.
I imagine what it would be like if my mom travels to Taiwan 30 times in her life.
At $1000 a ticket, that comes out to $30,000 over a lifetime.
$30,000 is my living expenses for 3.65 years of my life.
Before you decide to travel, make sure you really want to do so. And still, consider what you could rather do with the cost of the plane ticket, lodging, and expenses.
Given a choice between flying to Italy for a week to see the Leaning Tower and sitting at home for a week to play XBOX, I'd rather sit at home and play some COD.
I hate doing something that the vast majority of people enjoy. And a lot of women encourage me greatly to go see different countries.
To that I say to them, "Do you know how much that costs?"
My mom likes to travel to Taiwan once every two years. Each time, her round trip ticket is at least $1000 in the season that she goes.
It makes my brain bleed that a person would spend that much on a plane ticket.
$1000 is 50 ounces of silver.
$1000 is 2/3 the value of my car.
$1000 is 5 playstation 3s
$1000 is 2 ipad airs
(as of 4/12/14)
$1000 is just the cost of the plane ticket to Taiwan. This amount doesn't include cost of food, lodging, and doing fun stuff.
Also, traveling requires planning, packing, scheduling time off work, getting gate raped in airport security, and spending 1.5 to 2 days on a plane.
If I do travel, I'd much rather just stay domestic.
Take a week off work, check out stuff in the city of Atlanta.
Visit the high museum, world of coke, Botanical Garden, aquarium.
All that at a fraction of the cost of flying to another country.
I imagine what it would be like if my mom travels to Taiwan 30 times in her life.
At $1000 a ticket, that comes out to $30,000 over a lifetime.
$30,000 is my living expenses for 3.65 years of my life.
Before you decide to travel, make sure you really want to do so. And still, consider what you could rather do with the cost of the plane ticket, lodging, and expenses.
Avoid Combos at Fast Food Places
This strategy isn't for everyone.
Popular consensus deems that fast food is disgusting, causes cancer, over priced, causes diabetes, and causes degradation of American culture.
With all that being said, I find most fast food really delicious. AMERICA
Even though lots of people hate fast food, those are probably the same people that will eat at Burger King from time to time.
A five second google search shows that 30% to 40% of Americans eat fast food at least once a week.
Avoid fast food whenever possible, but if you must eat Taco Bell, don't spend too much money on it.
For this example, lets assume the average American eats fast food once a week (52 times a year).
I would really recommend choosing a restaurant that offers a dollar or value menu. Most combos come with a burger, a soda, and fries. Each numbered combo goes for $5 to $7.50.
From experience, the burger goes the longest way in providing satiation. Go ahead and sacrifice the soda and fries.
Order from the dollar menu and buy 2 or 3 dollar burgers/wraps/chicken sandwiches. Get water if you need it because it is usually free.
Eating 3 dollar menu burgers will make you feel just as full as eating a number 1 combo, maybe even more so.
If it is a true dollar menu, the cost of 3 burgers will come out to $3.18 to $3.22. Roughly half the cost of a combo.
Annual cost of eating fast food 52 times a year at $6 a combo.
52 * 6 = $312
Annual cost of eating fast food 52 times a year at $3.18 each visit.
52 * $3.18 = $165.36
Annual savings by avoiding combos at fast food places = $146.64
Monthly savings = $12.22
Once again, I do not encourage eating more fast food then you already do. I only encourage saving money with every visit to McDonalds.
Popular consensus deems that fast food is disgusting, causes cancer, over priced, causes diabetes, and causes degradation of American culture.
With all that being said, I find most fast food really delicious. AMERICA
Even though lots of people hate fast food, those are probably the same people that will eat at Burger King from time to time.
A five second google search shows that 30% to 40% of Americans eat fast food at least once a week.
Avoid fast food whenever possible, but if you must eat Taco Bell, don't spend too much money on it.
For this example, lets assume the average American eats fast food once a week (52 times a year).
I would really recommend choosing a restaurant that offers a dollar or value menu. Most combos come with a burger, a soda, and fries. Each numbered combo goes for $5 to $7.50.
From experience, the burger goes the longest way in providing satiation. Go ahead and sacrifice the soda and fries.
Order from the dollar menu and buy 2 or 3 dollar burgers/wraps/chicken sandwiches. Get water if you need it because it is usually free.
Eating 3 dollar menu burgers will make you feel just as full as eating a number 1 combo, maybe even more so.
If it is a true dollar menu, the cost of 3 burgers will come out to $3.18 to $3.22. Roughly half the cost of a combo.
Annual cost of eating fast food 52 times a year at $6 a combo.
52 * 6 = $312
Annual cost of eating fast food 52 times a year at $3.18 each visit.
52 * $3.18 = $165.36
Annual savings by avoiding combos at fast food places = $146.64
Monthly savings = $12.22
Once again, I do not encourage eating more fast food then you already do. I only encourage saving money with every visit to McDonalds.
Thursday, April 10, 2014
Why I hate Obamacare
This post will have no political opinions. These are only have facts.
In the Fall of 2012, I decided to get some health insurance.
Since I was building my wealth, I wanted to protect my wealth if I got injured skateboarding or in a car accident.
I got a plan from Humana. It was a High Deductable Health Insurance Plan.
The deductible was $10,000. After that, 100% of the costs would be covered.
It was perfect for me, I was very satisfied with a $10,000 deductible.
My premium was slightly more than $40 a month. I was completely satisfied with my plan.
I got a new job in the Spring of 2013. In the Fall of 2013, my job offered me free health insurance.
Knowing this, I decided to cancel my plan with Humana.
After November, the health care reform laws took effect.
Just for fun, I decided to check Humana again in February of 2014 to check the premium for my old plan.
I couldn't not find a High Deductible Health Plan anymore.
The cheapest plan I could find on Humana had a monthly premium of $160 a month.
In the Fall of 2012, I decided to get some health insurance.
Since I was building my wealth, I wanted to protect my wealth if I got injured skateboarding or in a car accident.
I got a plan from Humana. It was a High Deductable Health Insurance Plan.
The deductible was $10,000. After that, 100% of the costs would be covered.
It was perfect for me, I was very satisfied with a $10,000 deductible.
My premium was slightly more than $40 a month. I was completely satisfied with my plan.
I got a new job in the Spring of 2013. In the Fall of 2013, my job offered me free health insurance.
Knowing this, I decided to cancel my plan with Humana.
After November, the health care reform laws took effect.
Just for fun, I decided to check Humana again in February of 2014 to check the premium for my old plan.
I couldn't not find a High Deductible Health Plan anymore.
The cheapest plan I could find on Humana had a monthly premium of $160 a month.
Save money by being healthy
Most of the things you can do to save money is to avoid buying or doing stuff.
To save yourself a lot of cash and still have stuff to do, its best to spend your time doing stuff that is very cheap.
Probably the cheapest hobby I have ever had is running.
I'm not a very good runner but even I was able to run 5 miles in about 53 minutes.
Running is free. It costs next to nothing to do.
The only problem is that running sucks for most people. The hardest thing to do is to just get up and do it.
But to stay motivated, the best suggestion I can give is to track your progress. After each run, record your time and distance ran. Then, set some goals for yourself and try to achieve them. Its like playing xbox and hunting for achievements.
Obviously, there are health benefits to staying in shape, but there is another benefit to spending more time running.
The more time you spend doing something like running, the less time you leaving available to do something more expensive like going to a bar, spending money on video games, or dating.
To see this effect, you will have to spend several hours running. Not an easy thing to do.
But running isn't the only option.
There might be a pool/aquatic center in your county and membership could cost maybe $15 to $20 a month. I only recommend that if you really like swimming. Otherwise, you could spend $5 for a few hours at the pool.
I've been a skateboarder for 13 years. Luckily for me, I live in a place where there are free concrete skateparks. Off the top of my head, I've easily gotten over 1000 hours of free entertainment.
Last year, I decided to buy a mountain bike at Wal Mart for about $100.
Not having ridden a bike regularly for over 8 years, it was so much fun just to ride around.
If you buy a bicycle for $100 and ride it for just 10 hours, each hour of entertainment only cost $10. And the more time you spend riding, the cheaper your entertainment gets.
Hobbies are very useful. I'd encourage people to get out there and do something healthy.
To save yourself a lot of cash and still have stuff to do, its best to spend your time doing stuff that is very cheap.
Probably the cheapest hobby I have ever had is running.
I'm not a very good runner but even I was able to run 5 miles in about 53 minutes.
Running is free. It costs next to nothing to do.
The only problem is that running sucks for most people. The hardest thing to do is to just get up and do it.
But to stay motivated, the best suggestion I can give is to track your progress. After each run, record your time and distance ran. Then, set some goals for yourself and try to achieve them. Its like playing xbox and hunting for achievements.
Obviously, there are health benefits to staying in shape, but there is another benefit to spending more time running.
The more time you spend doing something like running, the less time you leaving available to do something more expensive like going to a bar, spending money on video games, or dating.
To see this effect, you will have to spend several hours running. Not an easy thing to do.
But running isn't the only option.
There might be a pool/aquatic center in your county and membership could cost maybe $15 to $20 a month. I only recommend that if you really like swimming. Otherwise, you could spend $5 for a few hours at the pool.
I've been a skateboarder for 13 years. Luckily for me, I live in a place where there are free concrete skateparks. Off the top of my head, I've easily gotten over 1000 hours of free entertainment.
Last year, I decided to buy a mountain bike at Wal Mart for about $100.
Not having ridden a bike regularly for over 8 years, it was so much fun just to ride around.
If you buy a bicycle for $100 and ride it for just 10 hours, each hour of entertainment only cost $10. And the more time you spend riding, the cheaper your entertainment gets.
Hobbies are very useful. I'd encourage people to get out there and do something healthy.
Cutting your own hair
Cost saving: Cutting hair.
Annual Savings $20 to $120.
Cutting your own hair is one way to save extra money.
Last I checked, the cheapest place I've gotten my hair cut cost me $20 each time (tip included).
Each week I walk through Walmart, I see the WHAL clipper for about $25 or $30.
After enough time, I decided just to buy it and try it out.
For a man that can go through life with a shaved head, a WHAL clipper would be one of the most useful things to have.
But I like having my thick hair to some extent. Granted, when I started cutting my own hair, I had no idea what I was doing.
Just go slow and take it a little off at a time. But if you screw up, don't worry, it will grow back.
I shaved off most of my hair in October because I screwed it up really bad.
Cutting your own hair is kind of fun too. You can see what your hair does and cut it how you like. Its like extra customization.
Some men will go a year without a hair cut.
On the other hand, some men get a hair cut every other month.
My guess is that most men get a hair cut about once a season.
4 hair cuts * $20 = $80 a year
Subtract the cost of the clipper ($25) and you have a $55 saving for the first year and $80 each year after until the clipper breaks.
1st year monthly savings = $4.58
2nd year and so on monthly savings = $6.67
The cost saving may not be worth it for every man.
I would recommend shaving your head at least once to see if you can deal with it.
Buy a hair clipper and see if you like cutting your hair.
An extra bonus is that now I don't have to drive out to my barber 4 times a year.
It may sound lazy but time is important.
Monday, April 7, 2014
Never buy a TV bigger than you are.
Each week, I go to Walmart. When I'm there, I usually head over to the electronics section and I always see the flatscreen TVs on display.
The biggest one there is a 70 inch flatscreen TV.
I'm 5 foot 8 so I just realized earlier today that this TV is bigger than I am.
It costs $1,500. (as of 4-6-14)
While I could buy several of these TVs, I just couldn't imagine spending $1,500 on a TV. I can't even justify spending $200 on a TV.
And I realize that consumer spending is what keeps a lot of Americans broke.
Consumer spending - buying stuff you don't need (most likely on credit).
$1,500 is how much money I spent on gas for the entire year of 2013.
$1,500 is the kelly's blue book value of my car.
$1,500 is 4,500 cups of top ramen.
$1,500 is 1,500 cups of McDonald's coffee
I just can't justify spending a lot of money on material things because most of the joy comes acquiring the stuff rather than using it.
A big TV would seem pretty cool at first, but after a few weeks or a month, it just becomes normal. The novelty wears off.
When the novelty wears off, you are still out $1,500. While you can still sell your tv, it is a used product and you would be lucky to recover 50 to 70 percent of the cost.
Thankfully, I imagine that most consumers don't buy a 70 inch tv.
A 30 to 40 inch flatscreen would probably go for $500 or $600. I don't really pay attention to them.
Still, that $500 or $600 could be better spent otherwise.
Though, if you really need to have a tv, I would recommend spending no more than $200 if absolutely needed.
The biggest one there is a 70 inch flatscreen TV.
I'm 5 foot 8 so I just realized earlier today that this TV is bigger than I am.
It costs $1,500. (as of 4-6-14)
While I could buy several of these TVs, I just couldn't imagine spending $1,500 on a TV. I can't even justify spending $200 on a TV.
And I realize that consumer spending is what keeps a lot of Americans broke.
Consumer spending - buying stuff you don't need (most likely on credit).
$1,500 is how much money I spent on gas for the entire year of 2013.
$1,500 is the kelly's blue book value of my car.
$1,500 is 4,500 cups of top ramen.
$1,500 is 1,500 cups of McDonald's coffee
I just can't justify spending a lot of money on material things because most of the joy comes acquiring the stuff rather than using it.
A big TV would seem pretty cool at first, but after a few weeks or a month, it just becomes normal. The novelty wears off.
When the novelty wears off, you are still out $1,500. While you can still sell your tv, it is a used product and you would be lucky to recover 50 to 70 percent of the cost.
Thankfully, I imagine that most consumers don't buy a 70 inch tv.
A 30 to 40 inch flatscreen would probably go for $500 or $600. I don't really pay attention to them.
Still, that $500 or $600 could be better spent otherwise.
Though, if you really need to have a tv, I would recommend spending no more than $200 if absolutely needed.
Saturday, April 5, 2014
Monthly Expenses
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