Tuesday, December 30, 2014

One question every man has to know how to answer

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.