- RT @kristinbrianne: Get Talk and Txt Unlimited Cell Svc w/ Free Phone for $10 per month by joining DNA for Free. http://tinyurl.com/yyg5ohn #
- RT: @ChristianPF is giving away an iPod Touch! – RT to enter to win… http://su.pr/2LS3p5 #
- 74 inch armspan and forearms bigger than my biceps. No, I don't button my shirt cuffs. #
- RT @deliverawaydebt Money Hackers Network Carnival #111 – Don't Hassel the Hoff Edition http://bit.ly/9BIAvE #
- @bargainr What would it take to get you to include me in the personal-finance-bloggers list? #
- Working on a Penfed application to transform my worst interest rate into my best. #
- Gave the 1 year old pop rocks for the first time. Big smiles. #
- @Netflix @Wii disc works well and loads fast. Go, go gadget movie! #
Twitter Weekly Updates for 2010-04-24
- Watching Gamers:Dorkness Rising #
- Charisma? Weee! #
- Tweeting a dork movie? I'm a bit of a geek. #
- We just met and the first thing you do, after boinking a stranger in the presence of the king, is to murder a peasant? #
- Every movie needs a PvN interlude. #
- Everything's better with pirates. #
- Waffles? Recognize. #
- The Spatula of Purity shall scramble the eggs of your malfeasance. #
- Checkout clerks licking their fingers to separate bags or count change is gross. #
- Watching Sparkles the Vampire, Part 2: Bella's Moodswing. #twilight #
- @penfed was a waste of money. $20 down the drain to join, wouldn't give a worthwhile limit, so I can't transfer a balance. #
- @JAlanGrey It's pretty lame. The first one was ok. This one didn't improve on the original. in reply to JAlanGrey #
- RT @tferriss: Are you taking snake oil? Beautiful data visualization of scientific evidence for popular supplements: http://ping.fm/pqaDi #
- Don't need more shelves, more storage, more organization. Just need less stuff. #
- @BeatingBroke is hosting the Festival of Frugality #226 http://su.pr/80Osvn #
- RT @tferriss: Cool. RT @cjbruce link directly to a time in a YouTube video by adding #t 2m50s to end of the URL (change the time). #
- RT @tferriss: From learning shorthand to fast mental math – The Mentat Wiki: http://ping.fm/fFbhJ #
- RT @wisebread: How rich are you? Check out this list (It may shock you!!!) http://www.globalrichlist.com/ #
- RT @tferriss: RT @aysegul_c free alternative to RosettS: livemocha.com for classes, forvo.com for pronunc., lang8.com for writing correction #
- Childish isn't an insult. http://su.pr/ABUziY #
- Canceled the Dish tonight. #
How to Prioritize Your Spending
Don’t buy that.
At least take a few moments to decide if it’s really worth buying.
Too often, people go on auto-pilot and buy whatever catches their attention for a few moments. The end-caps at the store? Oh, boy, that’s impossible to resist. Everybody needs a 1000 pack of ShamWow’s, right? Who could live without a extra pair of kevlar boxer shorts?
Before you put the new tchotke in your cart, ask yourself some questions to see if it’s worth getting.
1. Is it a need or a want? Is this something you could live without? Some things are necessary. Soap, shampoo, and food are essentials. You have to buy those. Other things, like movies, most of the clothes people buy, or electronic gadgets are almost always optional. If you don’t need it, it may be a good idea to leave it in the store.
2. Does it serve a purpose? I bought a vase once that I thought was pretty and could hold candy or something, but it’s done nothing but collect dust in the meantime. It’s purpose is nothing more than hiding part of a flat surface. Useless.
3. Will you actually use it? A few years ago, my wife an cleaned out her mother’s house. She’s a hoarder. We found at least 50 shopping bags full of clothes with the tags still attached. I know, you’re thinking that you’d never do that, because you’re not a hoarder, but people do it all the time. Have you ever bought a book that you haven’t gotten around to reading, or a movie that went on the shelf, still wrapped in plastic? Do you own a treadmill that’s only being used to hang clothes, or a home liposuction machine that is not being used to make soap?
3. Is it a fad? Beanie babies, iPads, BetaMax, and bike helmets. All garbage that takes the world by storm for a few years then fades, leaving the distributors rich and the customers embarrassed.
4. Is it something you’re considering just to keep up with the Joneses? If you’re only buying it to compete with your neighbors, don’t buy it. You don’t need a Lexus, a Rolex, or that replacement kidney. Just put it back on the shelf and go home with your money. Chances are, your neighbors are only buying stuff so they can compete with you. It’s a vicious cycle. Break it.
5. Do you really, really want it? Sometimes, no matter how worthless something might be, whether it’s a fad, or a dust-collecting knick-knack, or an outfit you’ll never wear, you just want it more than you want your next breath of air. That’s ok. A bit disturbing, but ok. If you are meeting all of your other needs, it’s fine to indulge yourself on occasion.
How do you prioritize spending if you’re thinking about buying something questionable?
Net Worth Update
Welcome to the New Year. 2013 is the year we all get flying cars, right?
Here is my net worth update, along with the progress we made over the course of 2012.
As you can see, our net worth contracted by about $11,000. Part of that difference is due to selling our spare cars and–against my better judgement–taking payments with a lien on one of them. That is supposed to be paid off within a couple of months. If not, I’ll play repo man again.
The other part of the difference is in the final preparations for our rental property. The only things left to do are sanding and polishing the hardwood floors and cleaning the living room carpet. The final push to get to this point cost some money. All told, we’re nearly $30,000 into getting the house ready to rent. For the naysayers who think we should have sold it, we would have spent more getting it ready to sell.
Other than that, we’re not doing poorly. Our credit card is still being paid off every month and our mortgage is shrinking. If things continue to go well, we’ll have our truck paid off in a couple of months and the mortgage by mid summer.
Late Pass: Insurance for the Terminally Ill?
This is a guest post.
Uh oh. Not only have you put in decades of loyal service for a company that does not offer a life insurance policy to employees, now you have a terminal disease that has numbered your days. You always meant to get a life insurance policy at some point, but it was just one of those things that there was never enough money left for at the end of a month after bills, groceries and just enough fun to make worthwhile.
Your life is one that needs insuring to protect your family following the now-inevitable, but has that ship sailed? Is it possible to make up for lost time by obtaining a life insurance policy as a terminally ill patient?
You already know that insurance companies are experts at assessing risk. Each potential policy holder is effectively examined to determine their likelihood of living a reasonably long time, and a terminal illness is an obvious negative in this department.
Many insurance companies will be hesitant to offer a comprehensive policy that they know they will have to pay out in fairly short order, but you may be able to get a type of life insurance known as graded premium life insurance.
With graded premium life insurance, you pay a monthly premium to retain coverage. If your illness should terminate within two years, your family will receive all the premiums you have paid as a benefit. Should you last longer, the insurance provider pays the full value of the policy. This is a compromise that gives you the peace of mind that a life insurance policy can provide while allowing the insurance provider to minimize their risk.
These policies typically have cash values ranging from $10,000 to $50,000, so while they might not guarantee the permanent stability of your family, it will offer them much-needed assistance through what is sure to be a difficult time in their lives. Premium amounts vary by age and relative health, but generally the closer you are to qualifying for a payout, the more it costs to enter the lottery.
Life is unpredictable except for its certain end, and sometimes this reality leaves us less prepared for the future as we would like. Fortunately, a terminal illness does not make a person completely uninsurable in most cases. Of course, it is much easier and less expensive to get life insurance as a person who is not dying, so the best strategy may be to invest before your health becomes an issue.
Twinkies: A Failure of Unionization
Twinkies may survive nuclear warfare, but the iconic sweet treat ultimately couldn’t withstand the might of the unionized workforce. Faced with mounting losses and overwhelming debt, due in no small part to the relentless demands of the various unions representing the nearly 19,000 employees, Hostess Brands filed bankruptcy for the second time in January 2012 and ultimately requested permission to liquidate it’s assets in November of last year when a buyer failed to materialize. While many factors played a part in the demise of the maker of such all-American snacks as Ding Dongs and Ring Dings, as well as childhood favorite Wonderbread, there is no denying the fact that costs imposed by union contracts were a major factor in the shuttering of this once-beloved company.
While there is certainly plenty of blame to go around, the simple fact is that nearly 97 percent of the company’s unsecured claims were from employee pension funds, according to the Chapter 11 filing. How did those claims arise? Simply put, the skyrocketing pension expenses were caused by the unions continuing to push for overly generous retirement rewards despite overwhelming evidence that the company could never sustain those costs. True, the unions did agree to considerable concessions prior to and even following the first bankruptcy filing in 2004. However, that was only after union officials had pushed wages and other benefits into the stratosphere, even though Hostess has been struggling for years to remain competitive.
Certainly America’s changing eating habits, increased competition from such companies as McKee Foods, makers of Little Debbie snack cakes, and rising commodity costs all contributed to the ultimate demise of Twinkies. There is no doubt, though, that union contracts inhibited the company’s ability to adapt and make the necessary changes to remain profitable. Not only were employee costs out of control, ridiculous union rules made it nearly impossible for the company to make money. These are just a few of the rules that hampered Hostess’ management:
- Twinkies and Wonder Bread could not be delivered on the same truck.
- Drivers could only deliver one product, even if they did not have a load and a load of another product was waiting to go out.
- Drivers could only drive. They had to wait for loaders to fill their trucks.
- Likewise, loaders could only handle one product. Their contract prohibited a Twinkie loader from helping out if the Wonder Bread loaders were shorthanded.
Yes, management agreed to these terms, but often they were forced to do so in order to prevent a costly strike. In fact, it was a labor strike that lead to the decision to liquidate.
Unions are meant to protect workers from dangerous working conditions, overbearing management and unfair labor practices. Ensuring a living wage and decent benefits is another of their responsibilities. However, it is evident that in this case, the unions became as much an enemy of the Hostess employees as of the company’s management. As a result of their unwillingness to compromise and make wage and benefit concessions, almost 20,000 people no longer have a job that needs to be protected. In the end, the unions drove not only the company but themselves out of business.
Not to fear, however. Two private equity firms acquired Hostess’ assets last fall and are beginning to turn the company around. Production of Twinkies began again in June, and the gooey sponge cakes returned to store shelves on July 15. The workforce has been dramatically reduced and will not be unionized. In the end, probably the only winner in this battle is America’s sweet tooth.
