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Sunday Roundup: Father’s Day
On Father’s Day, 3 years ago, my third and final kid was born. My kids are all horrible brats and I love them dearly.
I wouldn’t give up fatherhood for anything. Watching my kids grow and learn, steering their development, and teaching them how to navigate life is the most fulfilling thing I’ve ever been a part of. Also the most frustrating. I can’t imagine being anywhere else, not being with my kids. I have no respect for deadbeat parents.
I am incredibly grateful that I had a proper model for manhood and fatherhood. My dad taught me the concepts of honor, integrity, and responsibility. I couldn’t be the man I am now, if he wasn’t the man he is. Thanks, Dad.
Best Posts
Sometimes, the coolest things in the world are the things most likely to kill you. Call me crazy, but I’d happily strap a 1200 cc propeller to my crotch and find out what 10,000 feet looks like.
Via Budgeting In The Fun Stuff, Super Frugalette reminds us that, when there’s a significant amount of money involved, spending a few hundred dollars on an attorney isn’t wasteful.
Fivecentnickel discuss multi-level marketing. It doesn’t matter which company you are in, if your downline is more important that your product, it’s a bad business model.
Keith Ferrazzi shows us how to improve our body language when it really matters.
When I started driving, I tossed my car in a ditch going way too fast. Naturally, it was my parents’ fault for giving me the curfew I was trying to beat. They never would have bought it if I would have told them I was driving like my grandma and it jumped into the trees by itself. Why does the FBI think that’s believable? Corruption, maybe?
Financial Samurai talks about living a life without regrets, which is a personal goal of mine.
Food storage will become critical when the zombies come.
Beer is good. Even the cave-men thought so.
Carnivals I’ve Rocked and Guest Posts I’ve Rolled
3 Ways to Keep Your Finances Organized was an Editor’s Pick in this week’s Festival of Frugality. Thanks!
5 Reasons Your Wealth Isn’t Growing was included in this week’s Carnival of Personal Finance.
Money Problems: Insurance was included in the Totally Money Blog Carnival.
Unlicense Health Insurance was included in last week’s Carnival of Personal Finance.
Thank you! If I missed anyone, please let me know.
Yakezie Blog Swap
Last week, the Yakezie shared what they would do with a single financial do-over.
– Melissa from Mom’s Plans shares her biggest financial mistake at Barbara Friedberg Personal Finance: Opening an eBay Store and Using Credit. It is a great story about how not to grow your business and how competing priorities can pose a real challenge.
– Budgeting in the Fun Stuff shares her biggest financial mistake and potential do-over at Super Frugalette: Investing in a Friend’s Business. Its a good, but costly lesson learned about small business.
– Eric from Narrow Bridge Finance shares how He Wouldn’t Have Paid Down His Student Loans So Fast at The Saved Quarter. This may seem counter-intuitive, but he has some good points. Check it out.
– Mr. S from Broke Professionals shares how He Wouldn’t Have Bought a New Car at My Personal Finance Journey. This has some great analysis, especially considering the new car was a hybrid!
– The College Investor posted at Wealth Informatics: What you should know when you are investing?
– Wealth Informatics posted here: If you had one financial do-over, what would it be and why?
– Barbara Friedberg shares how She Was Scammed at Mom’s Plans. You have to watch out for the hard sell!
– Joe at Retireby40 tells us about How He Invested his 401(k) in Company Stock right before the dot com crash, at Financially Consumed. A financial adviser may have helped avoid this one!
– Financially Consumed shares his Car Purchase Do-Over And Over at Retireby40. Car addicts have it tough!
– LaTisha from FSYA shares her do-over story in It’s Never Too Late at Little House in the Valley. Sometimes the do-over is quicker and more painless than most.
– Little House yell’s Do-Over! Do-Over! at FSYA Online. It looks at the road to saving more, starting on an elementary school playground!
– The Single Saver asks, What Are The Long Term Consequences of Small Purchases at Totally Money. A cool post on how past purchases cost future returns!
– Miss Moneypenniless from Totally Money shares her story of Vacationing to the Brink of Bankruptcy. Sometimes a vacation can be fun, but the bills afterward may be daunting.
– Super Frugalette shares How a Lawyer Could Have Saved Her $24,700 at Budgeting in the Fun Stuff. Maybe lawyers are worth it sometimes?
– Jason from Live Real, Now shares how he Amassed $90,000 of Debt at Debt Eye. A good lesson in living a little more frugally.
– Kevin from Debteye shares his do-over: Not Buying a House Right Out of College at Live Real, Now. I have said it before that buying a house can be challenging right out of college.
– Penny from The Saved Quarter shares how She Would Have Finished College Before Having Kids at Narrow Bridge Finance. An awesome story that has will soon have a happy ending!
– Jacob from My Personal Finance Journey shares how he was Scammed on eBay at Broke Professionals. An important lesson for anyone selling or buying online.
– Marissa from Thirty-Six Months shares how she Accumulated a Ton of Student Loan Debt at So Over Debt. If you are going to live the life, you’re going to pay the price!
– Andrea from So Over Debt shares How She Would Have Started Saving for Retirementat Thirty-Six Months. I would love to read a post on each of the stories you mentioned getting to where you are now!
– Below Your Means shares his story about A Missed Investment Opportunity. There are so many times I wish I could have gone back and bought a stock!
Get More Out of Live Real, Now
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Have a great week!
Money Problems: Day 11 – Extended Warranties
Today, I am continuing the series, Money Problems: 30 Days to Perfect Finances. The series will consist of 30 things you can do in one setting to perfect your finances. It’s not a system to magically make your debt disappear. Instead, it is a path to understanding where you are, where you want to be, and–most importantly–how to bridge the gap.
I’m not running the series in 30 consecutive days. That’s not my schedule. Also, I think that talking about the same thing for 30 days straight will bore both of us. Instead, it will run roughly once a week. To make sure you don’t miss a post, please take a moment to subscribe, either by email or rss.
On this, Day 11, we’re going to talk about extended warranties.
You’ve been there. You walk into a big box electronics store to buy a $10 cable for your DVD player and the boy in blue at the register tries to pressure you into spending $4 on an extended warranty in case the cable dies due to too much adult video…or something.
The same nameless blue and yellow store is currently selling a laptop for $349 with a 2 year extended warranty for $89. The sales pitch usually goes something along the line of “These things have a tendency to break. You need a warranty to make it worth purchasing.” Thanks, jerk. You just sent me to a competitor since your sales pitch involves telling me you’re selling garbage.
Seriously, getting an extended warranty on electronics is almost always a bad deal. Yes, almost 30% of laptops fail within three years. Most of those fail in the 3rd year. What’s a 2 year warranty going to do for you then? New laptops generally come with a 1 year warranty from the factory. That leaves you volunteering for a 25% markup in exchange for protecting your device for a year that is not statistically likely to include a laptop failure.
A much better idea is to create a warranty/repair fund. When you buy something and have a warranty offered, turn it down and put that money in a special savings account. That money will get set aside to repair your stuff when it breaks. If you do that with everything you buy, you’ll soon have a fund that can pay for most repairs, without stressing your budget. I’ve got $25 going into my repair fund every month, so I’ll never have to worry about an extended warranty again.
It’s called a self-warranty.
But what about a car warranty you ask?
This is where I differ from most people. I’m a fan of extended warranties on cars, with 2 caveats.
1. Use it. If you car has started shaking, knocking, or almost anything else, bring it in. You have a warranty, so get your dang car fixed. When you’re getting close to the end of your warranty, make up an excuse and get that car into the dealer. “My car’s making an intermittent knocking sound. Can you fix it? While you’re at it, please do your 90,000 point inspection and fix whatever you find.” There’s no reason that you can’t get your car running like new when it kicks over the 70,000 mile mark.
2. Negotiate it. The charge you see is typically twice the dealer’s cost. Let them make some profit, since that’s what makes the world go round, but don’t let them take advantage of you. If they offer you a warranty for $2000, counter with $1200.
If you can get a decent price and are willing to make sure you use the auto warranty, get it.
How do you feel about extended warranties? Please leave a comment below and let me know.
Money Problems: Day 12 – Paying for College by Doing Without
Today, I am continuing the series, Money Problems: 30 Days to Perfect Finances. The series will consist of 30 things you can do in one setting to perfect your finances. It’s not a system to magically make your debt disappear. Instead, it is a path to understanding where you are, where you want to be, and–most importantly–how to bridge the gap.
I’m not running the series in 30 consecutive days. That’s not my schedule. Also, I think that talking about the same thing for 30 days straight will bore both of us. Instead, it will run roughly once a week. To make sure you don’t miss a post, please take a moment to subscribe, either by email or rss.
On this, Day 11, we’re going to talk about one method of paying for college.
I have a secret to share. Are you listening? Lean in close: College is expensive.
You’re shocked, I can tell.
The fact is, college prices are rising entirely out of proportion to operation costs, salaries, or inflation. The only thing college prices seem to be pegged to is demand. Demand has gotten thoroughly out of whack. The government forces down the interest rates on student loans, then adds some ridiculous forgiveness as long as you make payments for some arbitrary number of years, creating an artificial demand that wouldn’t be there if the iron fist of government weren’t forcing it into place.
Somebody in Washington has decided that the American dream consists of home ownership and a college education. Everything is a failure. He’s an idiot.
College isn’t for everybody.
Read that again. Not everyone should go to college. Not everyone can thrive in college.
Fewer than half of students who start college graduate. The greater-than-half who drop out still have to repay their loans. Do you think college was a good choice for them?
Then you get the people who major in art history and minor in philosophy. Do you know what that degree qualifies you for? Burger flipping.
Yes, I know. Just having a degree qualifies you for a number of jobs. It’s not because the degree matters, it’s because HR departments set a series of fairly arbitrary requirements just to filter a 6 foot stack of resumes. The only thing they care about is that having a degree proves that you were able to stick college out for 4 years. That HR requirement matters less as time goes on and you develop relevant work experience.
A liberal arts education also—properly done—trains your mind in the skill of learning. First, not everyone is capable of learning new things. Second, not everyone is willing to learn new things. Third, a passion for learning can be fed without college. If you don’t have that passion, college won’t create it. Most of the most learned people throughout history managed without college, or even formal education. Even if you want to feed that passion in a formal classroom, you’re assuming the professors are interested in training your mind instead of indoctrinating it with their views.
Now there are some pursuits that outright require a college education. The sciences like engineering, physics, astronomy, and psychiatry all require college. You know what doesn’t require college? Managing a cube farm. Data entry. Sales. I’m not saying those are bad professions, but they can certainly be done without dropping $50,000 on college.
Some careers require an education, but don’t require a 4 year degree, like nursing(in most states), computer programming(it’s not required, but it makes it a lot easier to break into) and others. Do you need to hit a 4 year school and get a Bachelor’s degree, or can you hold yourself to a 2 year program at a technical college and save yourself 40,000 or more?
That should be an easy choice. Don’t go to college just because you think you should or because somebody said you should, or to get really drunk. College isn’t for everybody and it’s possible it’s not for you.
Your Budget is Worthless
When you realize that you’ve buried yourself in debt and decide to get out from under that terrible burden, the first thing you’ve got to do is build a budget because, without that, you’ve got no way to know how much money you have or need. After you’ve got a budget, you’ll start spending according to whatever it says. Hopefully, you’ll stay on budget, but what happens when an emergency does come up? What do you do when your car dies? When you suddenly find out your kids needs vision therapy? How do you manage when your job suddenly gets shipped off to East De Moines?
Your budget isn’t going to help you meet those expenses. Most people don’t have enough money in their bank account to make it all the way to the next payday, let alone enough to keep the lights on and food on the table. How can you possibly hope to deal with even the little things that come up?
You whip out your emergency fund.
The problem with a budget is that it does a poor job of accounting for the unexpected. That’s where an emergency fund comes in. An emergency fund is money that you have set aside in an available-but-not-too-accessible account. Its sole purpose is to give you a line of defense when life rears up and kicks you in the butt. Without an emergency fund, everything that comes unexpectedly is automatically an emergency. With an emergency fund, the things that come up are merely minor setbacks. Without an emergency fund, your budget is nothing but a good intention waiting to get shattered by the next thing that comes along. With an emergency fund, you are managing money. Without it, it’s managing you.
How much money do you need in an emergency fund?
Every “expert” has their own opinion on this. Dave Ramsey recommends $1000 to start. Suze Orman says 8 months. The average time spent looking for work after losing your job is 24.5 weeks(roughly 6 months), so I recommend 7 months of expenses. That’s enough to carry you through an average bout of unemployment and a little more, but that’s not a goal for your first steps toward financial perfection. To start with, get $1000 in a savings account. That’s enough to manage most run-of-the-mill emergencies, without unduly delaying the rest of your debt repayment and savings goals.
How do you build an emergency fund?
Let’s not kid ourselves, $1000 is a lot of money when can barely make it from one check to the next. Unfortunately, this vital first step can’t get ignored. If you really work at it, you should be able to come up with $1000 in a month or so. Here are some ideas on how to manage that:
- Cut. Drop every possible expense. If you drop cable, your cell phone, Netflix, and a weekly dinner out, you will already be saving $400 that month. You’d be almost halfway there.
- Sell. How much stuff do you have that you don’t need, want, or use? I’d be willing to be there’s more than you realize. Last spring, I had a garage sale that brought in about $1300. Everything we sold was just crap we don’t use any more. We sold candles and candle-holders, DVDs, books, clothes, toys, electronics, games, and anything else we could find. I spent a month going through every room in my house to find my inventory. Craigslist is a good way to sell just one or two things at a time.
- Work. Have you thought about delivering pizza or working weekends in a gas station? If you have some technical or writing ability, you could pick up some part time work on oDesk or eLance. Your opportunities are only limited by what you are willing to do.
Stop at a grand?
Dave Ramsey’s advice is to get your fund up to $1000 and then leave it alone until your debt is paid off. Screw that. I’ve got money going into my fund every month. It’s only $25 per month, but over the last two years, it has almost doubled my fund. Don’t dedicate so much money that you can’t meet your other goals, but don’t be afraid to keep some money flowing in .
Using the fund?
When can you pull the money out? That is entirely up to you. I have ju st two points to make about withdrawing from your emergency fund:
- Don’t keep the money in an easy-to-access account. If your fund is in the savings account that serves as your overdraft protection account, it’s too easy to spend it, and it will go away. I keep it in my INGDirect account. I don’t use the checking account for anything in person, so I don’t carry the card. If I want to spend that money, it will take 2-3 days to transfer into my main bank account.
- Never decide to spend the money on the spur of the moment. There are very few major financial decisions that can’t wait until morning to be answered. Sleep on it. If it’s still necessary tomorrow, you can spend it without guilt.
An emergency fund makes your life easier and your budget possible when the unexpectable happens. Don’t forget to fund yours.
How much money do you keep in your emergency fund? What would it take to get you to spend it?
I’d Tap That: Making Life Difficult for Government Spying
Skip to the bottom if you’re familiar with PRISM and don’t want to hear any political talk and rampant violations of our Constitutional rights, but still want to protect your privacy.
For those of you who haven’t been paying attention, the PRISM program is an NSA program to monitor electronic activity.
Lots of electronic activity.
The companies identified to be working with the NSA in this grand overreach include AOL, Apple, Facebook, Google, Microsoft, PalTalk, Skype, Yahoo! and YouTube. For most people, that is the definition of “the internet”. If you’re doing it online, the NSA is–or could be, at their leisure–watching.
This isn’t a crazy conspiracy theory. This is happening, and the government has admitted it. In fact, when this broke, the executive branch’s response was along the lines of, “Don’t worry, we’ll find the guy who leaked this information.”
On top of that, the government has been demanding phone records from at least Verizon on a daily basis.
In addition, the Justice Department was just busted wiretapping Associated Press phones.
Seriously, if you put this in fiction, nobody would buy it, because it’s ridiculous in the land of the free.
As far as the people who say I’ve got nothing to worry about if I’m not doing anything wrong: shut up. You can speak again when you give me your email passwords, bank records, and let me install a toilet cam in your house. What are you trying to hide?
Seriously, there is such a mess of non-legislative administrative regulations that are considered felonies that the best estimate is that most people commit three felonies a day, without realizing it.
- Catch your kid with a joint and neglect to call the cops? Welcome to the federal penitentiary.
- Use one of those pill planner things to sort prescription meds for your half-senile grandmother? In some states, that’s a felony.
When we live in a system with so many rules that have never been voted on and our legal system refuses to consider legitimate ignorance of the law to be a defense and we have a collection of secret laws that are a felony to disclose or violate, government spying gets far more dangerous.
- Many TSA guidelines are secret.
- The Banking Secrecy Act of 1970 has a number of secret provisions.
- FISA.
The Foreign Intelligence Surveillance Act of 1978(FISA) is the law the NSA is using to justify all of these data requests. The law, that we all must obey, is being overseen by a small subcommittee in Congress, and the FISA courts are just a small subset of the judges. The judges are signing warrants allowing the wiretaps and massive surveillance, but that is clearly unconstitutional and, hence, illegal.
The text of the Fourth Amendment to the Constitution, the supreme law of the United States is: “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”
Any warrant that cannot name a place to be searched is illegal.
Any warrant that cannot describe the person to be monitored is illegal.
Any warrant that is not backed by probable cause is illegal.
Tell me how “I want to watch what everyone is saying on Facebook and seize all of the data” meets any of those criteria.
Bueller?
Wiretapping the AP is a serious violation of the First Amendment, too. “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”
“Congress shall make no law…abridging the freedom of speech, or of the press..and to petition the Government for a redress of grievances.”
Monitoring the press in case somebody breaks a story the government doesn’t want broken is crap.
How can we petition the government for redress of grievances that they call a felony if the company discloses the violation to us? It’s self-serving circular crap.
When you throw the IRS harassing charities working for the “wrong” politics, you start to pine for the good old days of Nixon-level fair play and integrity.
To be fair, FISA got nasty with the Patriot Act, which was an abomination enacted by a different political party. Hey, Washington, next time try to remember that your laws will someday be administered by your political enemies, k? (NSA: I trust you’ll pass the message for me?)
Political talk is over. How do we stop the government snooping?
There are four main pieces to discuss, based on the scandalous Constitutional violations reported recently.
1. Social media monitoring. There’s nothing to this. If you post things on Facebook, the government sees it and knows it’s you. Don’t post anything you don’t want broadcast to the police, your grandmother, and your priest.
2. Internet browsing. There is very little that is secure on the internet. The government can subpoena your ISP and get any records they keep. Unless you go anonymous and encrypted. Welcome to TOR. The Onion Router is a system that encrypts your internet traffic and bounces it all over the world. Once you enter TOR, nothing you do can be tracked, until your internet request leave the TOR system. The system is not centrally owned or controlled, so nobody in the system can track what you are doing.
For example, if I use the TOR browser to search Wikipedia, a snoopy NSA goon could tell I’m using it, and they could tell there was a request from the TOR system to Wikipedia, but they can’t tie one request to the other. If I’m dumb and log into Facebook, I lose that anonymous shield.
That’s solid protection from anyone watching your internet traffic.
How do you use it?
Easy. Just install the Tor Bundle. When you want the NSA to stop snooping over your shoulder because you want to do a search on erectile dysfunction, you launch TOR and the TOR browser and search without having to share your embarrassing secrets.
3. Email. Email is easily the least secure means you can communicate. When you send an email, that message is in plain text, and it bounces from server to server until it reaches the recipient. Any of the involved servers can keep a log of the traffic and read your email.
Never, ever, ever, ever put anything incriminating or important in an email. Don’t send credit card numbers, your social security number, or the address of your meth lab.
But what if you want to have a dirty conversation with your spouse without letting the sick voyeurs at the NSA listen to you ask your wife what she’s wearing and how would she like it torn off?
Use PGP. OpenPGP is a free software encryption program that is basically impossible to decrypt. It’s known as public-key encryption, which means that anybody can encrypt a message to you that only you can read.
It’s like magic.
To use PGP, the easy way(for Windows users) is to get Gpg4win. Install that, then open Kleopatra. This will let you generate your encryption key. You do that by:
- Clicking File, then New Certificate
- Click Create Personal OpenPGP key pair
- Enter your name and email, then click next, then “Create Key”. Enter your passphrase when asked.
You now have a set of PGP keys. To get your public key that others can use to send you messages, right-click your certificate and select “Export certificates”. Pick a path to save the certificate, then do so. You can open this file with notepad to get your public key, or you can email the file out. There is no need to worry about security with this file.
You will end up with something that looks like my public key here:
—–BEGIN PGP PUBLIC KEY BLOCK—–
Version: GnuPG v2.0.20 (MingW32)mQENBFGyPPkBCAC8zc5B7srG/ZyRMpokP3KyIMd9GA4n94wT89sP/yWFylbTKXDM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=fHba
—–END PGP PUBLIC KEY BLOCK—–
To get your private key, that you can use with any number of plugins for your email client, right-click on your certificate and select “Export secret keys.”
You can either use PGP as a plugin for your email client, or you can use Kleopatra’s feature “Sign/encrypt files”. To do that, write your message in a file, then select the feature inside Kleopatra. You’ll end up with an encrypted file you can attach to your email that snoopy government man can’t read.
4. Phone calls. This would appear to be harder, since your phone is largely out of your control. There’s nothing practical you do about a landline, except to avoid saying anything sensitive. On your cell phone, you have options, assuming you use a smartphone.
For Android users, it’s free an easy. Install Redphone. If you place a call with Redphone, it checks to see if the caller also uses Redphone. If he does, it places an encrypted call over your data plan to the other phone. Nobody can listen in to an encrypted call. The same company also makes a program for texting.
For iPhone users, you’re stuck with Silent Circle for $10/month, which may be a better option, since there is support for more devices, including Android. It was designed by the guy who designed PGP and handles texting and email, too.
That’s it.
There you are, the whats, whys, and hows of modern, hassle-light, private communications. Doing what we can to foil bad government programs is our patriotic duty.
