Search Results for “how-to-complain-the-squeaky-wheel-gets-the-grease/INGDirect/subscribe-by-email/budget-lesson-part-5/money-problems-day-1-setting-goals/budget-lesson-part-1/questions-from-a-reader/what-happens-when-you-save/573/budget4/experiences-v-stuff” — Page 22

Don’t Screw Future-You

Finance, Life

A conversation between me and my temporally displaced self.

Future Me: Excuse me, Jason?

Me: Yes?

FMe: <Slap!>

Me: May I ask what that was for?

FMe: Of course.

Me: What was that for, jerk?

FMe: That was payback for all of the hell you have put me through.

Me: What?!? I’ve never even met you, before.

FMe: Of course you have. I am future-you, and I’m sick of getting screwed by past-me, that is, you.

Me: Huh?

FMe: Listen close. You’re not the sharpest brick in the box and I don’t want to explain this twice.

Me: ???

FMe: A long time ago, when you first met our wife, you were dumb.

Me: I don’t appreciate….

FMe: Shut up. I was dumb then, too. Remember? You…err…we bought a new truck, built an addition on our…err…your…err…whomever’s house, got married in the same year. On top of many other expensive decisions. Do your recall?

Me: Yes, I do. So what?

FMe: If that wasn’t enough, you and your smoking-hot bride are still shopping like you’re rich. You drive a new car. Your kids wear new clothes. You’ve got a house full of new furniture. How did you pay for all of that?

Me: Naturally, I charged it. Zero payments, zero interest for a year! Pretty smart, huh?

FMe: What happens in a year?

Me: I don’t know. I’ve got a full year to figure that out.

FMe: <Slap!> I’ll tell you what happens! Future-you, that’s me, gets screwed! Your raise didn’t come through. You had a baby. The truck broke down. Your wife took maternity leave. A roommate moved out. You took a loss in the stock market. You didn’t plan! You had no savings to cover any of those problems because you were too busy servicing debt to pay for your current life.

Me: How was I to know?

FMe: <Slap!> Life happens! You never know what is coming next. You need to plan and save for what might happen. Otherwise, you’ll just accumulate more debt to be serviced by yours-truly. That is not acceptable.

Me: So? What are you going to do about it?

FMe: <Slap!>

Me: Really? Again?

FMe: <Slap!> I’m struggling to pay your debt. Your son starts college next year, but you’ve left me completely unable to help. Your daughter wants to get married in a couple of years, but the Father-of-the-Bride can’t afford a tux. My wife, your beatiful bride, wants a vacation that I can’t afford. You’ve screwed me, dude.

Me: I’m sorry. What can I do to fix it?

FMe: Buy me dinner, first.

Me: Huh?!?!?

FMe: Stop the excess spending. Spend less than you make, for a change. No credit.

Me: None?

FMe: None. Nada. Zip. Zilch. Only spend what you can afford. Budget. Pay off those nasty bills. Don’t leave me hanging.

Me: So, what you’re saying is that, if I don’t have the money, I shouldn’t buy it?

FMe: Exactly. That’s the path to wealth, freedom, and financial independence. Live in the real world.

Me: Gee, thanks, Future-Me! Now I know.

FMe: And knowing is half the battle.

What would your future-you have to say to you?

Yakezie Carnival: The 93 Edition

Misc

Welcome to the Yakezie Carnival. The Yakezie is a group of the best personal finance blogs on the internet. In short, we rock. Joining the Yakezie is a 6 month challenge involving Alexa ranking and cross-promotion.

These are posts submitted by Yakezie members. Please note, this is the 93 Edition, not the 93rd Edition.

Today is April 3rd, the 93rd day of the year.

93 is a Blum integer. For those of you who don’t know, a Blum integer is, to quote Wikipedia, a natural number n if n = p×q is a semiprime for which p and q are distinct prime numbers congruent to 3 mod 4. Now you know as much as you did before. If you understand that definition, you probably already knew what a Blum integer was. To me, this means a Blum integer is a number that has a definition that I have to copy and paste to even repeat coherently. It exists solely to make math geeks feel smart. I am not a math geek.

On to the carnival!

KrantCents brings us Cash or Credit, a post about the choice between using cash or credit for purchases. We’ve wrestled with this one before. A few months ago, we basically abandoned the cash-only system as inconvenient and too easy to ignore. Right now, we are transitioning to a travel rewards card for all of our regular purchases. I’m going to see how much of my trip to the Financial Blogger Conference I can get for free.

Using thelemic isopsephy, a form of numerology promoted by Aleister Crowley, Will + Love = 93. Crowley once said something to the effect of “Never lie. Just live the kind of life no one will believe.” I love that quote, but I can’t remember where I read it.

Dr. Dean presents 5 Tips Plus A Bonus On Saving Money: Today! and says “Dr Dean’s patients are telling him their costs are rising, despite the feds promise that inflation is under control. 5 tips to save a little money, now (with a fun bonus!)” As a father of 3, the bonus tip needs to be rethought. Long-term costs….

On February 8th, 1993, GM sued NBC for faking crashes that show GM trucks catching fire in car accidents. First, if Hollywood has taught me anything, it’s that cars catch fire in every accident, no matter how minor. Second, where’s Toyota’s lawsuit, now?

Jacob at My Personal Finance Journey bring us Are Extended Auto Warranties A Scam? and says “A look at the considerations that should go in to deciding whether or not extended warranties are worth their weight in gold.” I want to call extended auto warranties a scam, but I can’t. When I bought my car, I got the warranty and paid a couple of thousand dollars for it(I don’t remember exactly how much!). For years, it was worthless, but shortly before the warranty expired, I had a couple of problems that needed to be fixed, so I brought it in and asked for a complete inspection to go with the repair. All told, I got close to $5,000 in repairs for that $2,000 warranty and my car drives like new at 7 years old.

On May 10th, 1893, the United States Supreme Court officially declared the tomato to be a vegetable, proving once again that, not only will the government stick its nose into absolutely anything, but it doesn’t feel a need to base its decisions on facts or science. Remember that when you hear any government declaration regarding scientific facts or advances.

Money Reasons bring us Are We All COGs in the Machine Of Life? and says “Break away from the business machine that is using you as a COG spinning doing the owner’s bidding. Why just spin in circles wasting life away? Start your own business or develop some life fulfilling hobbies!” I love the idea of breaking out and doing what you love, whether or not it makes you any money. Life’s too short to hate everything about it.

In Q1, 1793, France declared war on Great Britain, Spain, and the Netherlands. Now, they make whine, pastries, and self-righteous politicians. The Earth is also 93 million miles from the sun. Coincidence? I think not.

Evan at My Journey to Millions offers up Important Dates When Investing in Dividend Producing Stocks and says “When you are dealing with dividend paying stocks there are dates whose definitions can be considered a term of art and you should know about including declaration date, ex-dividend date, record date and payment date.” I get lost when dealing with most investments. That’s mostly because, at this point in my financial journey, I don’t care. I’m still working on paying my way out of debt. I’ll worry about the investments later.

93 is located at the 42nd digit of pi. That is obviously significant. I should team up with Thelema to invent some mystical reason to take a paid holiday tomorrow to celebrate the works of Douglas Adams.

Melissa at Mom’s Plan presents How to Accomplish Your Goals Part Two: Write Down a Step-by-Step Timeline and says “Writing down the goal is only one step of the process; directing yourself as to how you will complete the process is just as important.” Having goals turns life into a game. Games are fun, so goals are good.

By contentment, the acquisition of extreme happiness. – 93rd Aphroism Patanjali’s Yoga Sutra

Darwin’s Money brings us Life Settlement Investment – Scam or Legit? and says “Life Settlement Investments – Profiting from Death? Scam? Or legitimate high yield alternative investment? Find out for yourself with the facts here.” Life settlement funds appeal to me in a totally morbid, Running Man kind of way. It’s less disturbing that Treadmill to Bucks.

Finally, 93 is the number of the flight that successfully fought back on 9/11. Never forget.

Twitter Weekly Updates for 2010-01-23

Misc

Uop past midnight. 3am feeding. 5am hurts. Back to bed? #
Stayed up this morning and watched Terminator:Salvation. AWAKs make for bad plot advancement. #
Last night, Inglorious Basterds was not what I was expecting. #
@jeffrosecfp It's a fun time, huh. These few months are payment for the fun months coming, when babies become interactive. 🙂 in reply to jeffrosecfp #
RT @BSimple: RT @bugeyedguide: When we cling to past experiences we keep giving them energy…and we do not have much energy to spare #
RT @LivingFrugal: Jan 18, Pizza Soup (GOOOOOD Stuff) http://bit.ly/5rOTuc #budget #money #
Free Turbotax for low income or active-duty military. http://su.pr/29y30d #
To most ppl,you're just somebody [from casting] to play the bit part of "Other Office Worker" in the movie of their life http://su.pr/1DYMQZ #
RT @MoneyCrashers: Money Crashers 2010 New Year Giveaway Bash – $8,300 in Cash and Amazing Prizes http://bt.io/DQHw #
RT: @flexo: RT @wisebread: Tylenol, Motrin, Rolaids, and Benadryl RECALLED! Check your cabinets: http://bit.ly/4BVJfJ #
New goal for Feb. 100 pushups in 1 set. Anyone care to join me? #
RT @BSimple: Your future is created by what you do today, not tomorrow"— Robert Kiyosaki So take action now. #
RT @hughdeburgh: "Everything you live through helps to make you the person you are now." ~ Sophia Loren #
Chances of finding winter boots at a thrift store in January? Why do they wear our at the worst time? #
@LenPenzo Anyone who make something completely idiot proof underestimates the ingenuity of complete idiots. in reply to LenPenzo #
RT @zappos: "Lots of people want to ride w/ you in the limo, but what you want is someone who will take the bus w/ you…" -Oprah Winfrey #
RT @chrisguillebeau: "The cobra will bite you whether you call it cobra or Mr. Cobra" -Indian Proverb (via @boxofcrayons) #
RT @SuburbanDollar: I keep track of all my blogging income and expenses using http://outright.com it is free&helps with taxes #savvyblogging #
Reading: Your Most Frequently Asked Running Questions – Answered http://bit.ly/8panmw via @zen_habits #

Daytrading Bitcoin and Cryptocurrency

Business

For the past 6 weeks, I’ve been playing with Bitcoin and Litecoin.

The bitcoin logo (Photo credit: Wikipedia)

I can hear you from across the internet. You’re asking, “What the hell is Bitcoin?”

I’m glad you asked. It’s a cryptocurrency.

And now you know as much as you did before.

Cryptocurrencies are anonymous internet-based money. You spend it just like money, though granted, there are fewer places that accept cryptocurrency.

The big name in cryptocurrency is Bitcoin. In second place, trying to play silver to Bitcoin’s gold, is Litecoin.

So what do I mean by “playing with” Bitcoin and Litecoin?

I’ve been daytrading, which is generally a horrible idea…when you’re doing it with stocks. Daytrading is gambling. It’s the art of doing short-term flips on a stock. You buy it today to sell tomorrow, hoping it goes up. With stocks, I play a long game. I buy and hold. I buy a stock that I believe has long-term value, and I hold it for months or years.

That’s not the game I play with BTC and LTC. I play a short game, rarely longer than a week. When the coins are at a low price, I buy, then I immediately sell when they price is higher. When it’s high, I short the coin, essentially selling coins I don’t own to trade back when the dollar-price is lower. When I’m paying attention, I make money as the coins go up and I make money when the coins go down.

Why is this a good strategy for cryptocoins?

Because they are extremely volatile. As I’m writing this, Litecoin has had a 10% swing today, from $4.03 at midnight, to a current price of $4.16, with a peak of $4.36. On Thursday, it was floating around $4.60 all day. In the last 30 days, it’s been as high as $8.65 and as low as $3.18. Go back to May and the low is $1.29.

Traditional wisdom says that volatile investments are bad. In traditional investments, that’s true. But when a stock is this volatile, nearly every bet is a good one, as long as you’re patient. If I buy LTC at $4.20 and it drops to $3.90, that’s bad. I lost money. But, if I wait a couple of days, it’s almost definitely going to climb back up. Except for large-scale sell-offs, it’s usually going to bounce 10% in a given day. You can buy in the dips and sell at the peaks all day long, turning 5-10% profits with each time. If you’re brave or stupid, you can short at the peaks and make 5-10% on every downturn, too.

For example, today started at $4.03. Buy. Today’s peak was at 7:15AM at $4.36. When the graphs start swinging down, sell short. Two hours later, it bottomed out at $4.20 for a 4% return. Then, buy while it’s low. Ninety minutes later, it was at $4.31, another 3% return. Short it again, then close the position at 7PM for $4.13.

Let’s walk through this.

Buy $10 worth of Litecoin at midnight, sell at 7:15AM. You have $10.81.

Turn around and short the same amount until 9AM. You have $11.22.

Buy that same amount to sell at 10:30AM. You have $11.51.

Short it again before closing out at 7PM and going to bed. You have 12.01. That’s almost a 12% return in 12 hours, assuming you guessed all of the major swings right. If you guessed some wrong, you’d just have to wait until the next time it swung your way, and it will. Did I do that well? No. I bought in at $4.008 yesterday and sold today-once-for $4.32. I will not complain at an 8% return over 12 hours.

The only exception to that is during major buying and selling streaks. On July 5th, a major buying run started. By July 8th, the price was run up to $8.65. A huge sell-off happened then, dropping the price to $4.36 on July 9th.

If you bought at $8.65 you’d be hosed.

The lesson there is, don’t buy at the peak. I’ve had a number of trades that could have been huge scores if I would have held onto them longer, but I’m a wimp. I sell as soon as I’ve gotten enough money to make me smile, then I refuse to regret the decision. That also prevents me from holding on to my positions too long. I avoid all of the crashes that way. That giant buy-in happened while I was on vacation, so I wasn’t paying attention. When I’m not paying attention, I leave my money in US dollars, so there’s no risk…and also no reward.

Also, an important caveat: while I am learning the cryptocurrency ropes, I’m playing with a non-critical amount of money. I put $75 into the exchange in June. Not enough to cry over losing, but enough I can play with all of the different investment options. As I said, I’m a wimp, although a 30% return in 7 weeks is pretty sweet.

Next up, I’ll show you how to get started investing/gambling with Bitcoin.

Decision Making Made Easy

Life

Have you ever had to make a difficult decision? Not necessarily a decision that’s difficult because it’s life-changing, but a decision that’s difficult because there are two phenomenally wonderful, yet mutually exclusive options?

For example:

Should you put caramel or strawberry sauce on your ice cream?
Should you go to Disney Land or Disney World?
Should you subscribe to Live Real, Now by email or RSS?
Should you take the job with the stellar benefits package or the higher salary?

These are all real decisions that you may be called on to make.

For most decisions, there are some alternatives that are easy to discard.

MadDog 20/20 isn’t a good alternative to caramel sauce on your ice cream. The local BDSM museum probably isn’t a great choice for a family vacation. Sending me hate mail is obviously worse than subscribing.

Then you’ve got some choices that are both okay, but one is clearly better. You’ve got free airfare and hotel. Do you go to Topeka, or Paris? Neither is horribly, but I think the choice is obvious. You’re going out to dinner. McDonald’s or…nevermind, this fits the first category.

After you’ve discarded the obvious bad choices and the okay-but-not-great choices, how can you decide between what’s left?

This is the point that starts to cause stress. What if you make the wrong choice? What if you regret it forever? What if you’re still not happy? Gridlock.

The reason your stuck is because it’s not apparent which is the better choice. All of your experiences and knowledge are telling you–on some level–that the options are identical in terms of your life, happiness, and goals. It truly does not matter which one you choose. You will probably be equally happy, either way.

Given that it doesn’t matter, you have two choices for making the final decision:

Pick the one you want. The rational decision is a tie, so make it an emotional one. Does one job match your dreams, but with a bit more risk? Has one vacation destination been a goal since you were little? Do it!
Flip a coin. If the decision doesn’t matter, leave it to fate. That way, if it doesn’t work out, you can always blame the quarter.

The one thing you don’t want to do is wait. Failing to decide is still a decision and one that is guaranteed to keep you from being satisfied with your choice. Don’t wait until you have all of the possible information, because that kind of perfect world doesn’t exist. Get to about 85% of fully informed and run with it. You’ll usually be happier making a decision–even the wrong one–than sitting back wondering “What if I had done that?”

How do you make hard decisions?

Budgeting Sucks

Finance

Budgeting kind of sucks.

Filling out a budgeting spreadsheet, putting in all of your expenses, listing all of your income, tracking all of your spending. Yuck.

Balancing the fact that you may have $200 to spare, but if your gas bill is a bit lower one month then you have a some more money, but if your electric bill’s a little bit high, then you have a little bit less. It’s too much work.

Here’s the new plan:

I just opened up a new credit card. This credit card’s got a fairly high limit, not that I care since I’m never going to come close to the limit. It’s got an okay interest rate, not that I care–it’s going to be paid off every month. It also has a good travel rewards plan, so our family vacations can, to a large extent, be paid for.

Now, with this card, I’m taking all of my regular bills, and setting them up to be automatically paid by the credit card. It’ll get automatically charged every month. I won’t have to think about it. Once a month, I’ll just log on and pay off the card. All I have to do is make sure the balance stays under my monthly budgeted amount. I already know what I have to be paying each month, so, no problem.

This will make it easier to budget and track my actual spending. It’ll even make it easier to balance my checkbook, since right now, I’m logging into my bank account a couple of times a month to compare it to Quicken. Any budget helper is nice.

After this plan takes effect, my bank account will only have any ATM withdrawals that I need to make–which shouldn’t happen more than once or twice a month–and my checks to day care. There should be just six manual transactions every month plus all of my miscellaneous transfers to and from INGDirect, which should also be minimal– there should only be two of those each month.

This will simplify everything while at the same time giving me the maximum amount of travel rewards I’ve been able to find. Hopefully, it will work as well as I think it will.

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