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20 Happy Thoughts

Business, Finance, Life, Misc

Since I’ve been on a bit of a death theme lately, I thought I post something purely happy.

Here it is.  In no particular order, twenty unequivocated things that make me happy.

  1. My three year old has the most beautiful blue/silver/gray eyes I have ever seen.
  2. In the past 32 months, I’ve reduced my total debt load by $42,859.70.  That’s an average reduction of $1,339.37 per month.
  3. My insane work schedule is paying off.  I’m more than halfway to making my day job’s income redundant.
  4. My preteen son is currently showing none of the signs of the horrible rebellion that I put my parents through.
  5. The world hasn’t imploded, exploded, or tilted its axis recently.
  6. My parents did a good job of raising me.
  7. I haven’t touched my overdraft line of credit in more than 2 years.
  8. My wife loves me.
  9. I love her.
  10. Wrestling season starts tomorrow, and Punk ended last season with real promise.
  11. I’ve dropped 12 pounds in the last 16 days.
  12. Bacon is good.
  13. Daughter #1 is starting kindergarten in September and excited about it.
  14. Our cars are paid off.
  15. This site helps me stay motivated to eliminate my debt.
  16. You rock.
  17. I may get out of debt just before the world ends.
  18. The Yakezie Network has helped get this blog to where it is.  If you’ve got a finance blog, join today.  You won’t regret it.
  19. FINCON 2012 is is Denver and I won’t be napping on my motorcycle on the way there, like I did the last time I went to Denver.  It’s not something I recommend, but it makes a neat story.
  20. I have 20 things to be happy about.   That’s a recursive happy-maker right there.

     

 

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Single Income Family

Finance

Effective next week, we are officially a single-income family.

If you can count all of my side-hustles as “single income”.

This week, my wife did the paperwork for her final week of state-sponsored unemployment.  She also applied for the federal extension, but that’s not automatic.

In a nutshell, this reduces our monthly income by $1340.

What does that mean for us?

1.  Our truck, which I was hoping to have paid off by March(3 months ago), still has about 7 regular-sized payments left.  Instead of making double payments, we’re now making the schedule amount.  The reason for the payoff delay is another post entirely.  Savings: $400.  In a pinch, we could stop making payments for almost 3 years due to how much we’ve already paid.

2.  The riding lessons I use to spoil my girls are cut in half.  Instead of weekly lessons, we’re going bi-weekly.  Savings: $100.  In a pinch, this could go away completely.

3.  We had a conversation that included, “Honey, when I complain that you bought more than our weekly budget of food in one trip, I’m not being a dick.  Here’s how much money we have.”  That conversation appears to have been productive.

4.  No vacation this year.  We let our spending jump a couple of times this year, so last week, I dropped most of our vacation fund to make up for it.  The expense of being matron-of-honor at a wedding will be an upcoming post, too.

[Edit]

5.  My wife is working at our daycare provider 2 days per week in exchange for daycare discounts.    Financially, this isn’t perfect, but it cuts the cost and gets the girls out of the house.  I work from home and have a hard time keeping them out of the office.

6.  We are considering long-term stay-at-home status for my wife.

[End Edit]

Right now, our budget says we make $100 more than we spend.  That includes all of our savings goals, and setting aside money for some luxuries like our Halloween party.   We’re not hurting–which makes me happy–but we do have to watch our expenses in a way that has just become mandatory.

I can’t tell you how happy I am to have renters.  Between our roommate here and the renters in the house we fixed up last year, we’re adding about $1000 to our income.   Rent is keeping us cash-flow positive.

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Saving Money: The Warranty Fund

Finance

Home theater projection screen displaying a hi...
Image via Wikipedia

Last weekend, my DVD player died.

No big deal, right?  We watch a lot of movies. We get a lot of enjoyment out of watching a lot of movies.  Movies are fun for us.  We’ve got a projector and a movie screen in our living room.  Movies are our biggest pastime.   Naturally, losing the movie machine hurts.

The thing that hurts the most is that this hasn’t been a good month for us, financially.  My wife gets paid hourly, with semi-monthly paychecks.  This means that, in a short month(like February!), her second paycheck is small by a few hundred dollars.   When her company switched to that nonsensical plan, I watched for a few months, then set our budget to match the smallest paycheck she received.   They haven’t been using this ridiculous plan for a full year, yet.

February caught me by surprise.

I know, it shouldn’t have.  According to my research, there has been a February in every single year since well before I was born.  I should have been expecting it.  Oops.

So, to recap:  our favorite pastime was dead and money was a little bit tight.   There was no money to shake out of the budget to cover a new DVD player and there was no way we’d hit our emergency fund for something as frivolous—if enjoyable—as movies.

What to do?

About a year ago, I decided to start a warranty fund.  There are things we can’t easily afford to replace, so we pay for warranties on some of them.  For example, our cell phones have a repair plan, and that plan has saved us more than it has cost us.  We have a repair plan for some of our appliances, and that, too, has saved more than it has cost us.  My goal was to self-warranty my stuff.  I wanted an account that had money that served no purpoase but to help me avoid paying for warranties.

I set up another ING Direct savings account and scheduled an automatic deposit.  It’s only set to deposit $25 per month, but over a year, it was enough to replace our home theater system, with some left over.   It is, quite simply, money to use when our stuff breaks.

With no warning, and no time to prepare, we still had enough money socked aside to handle one of life’s little surprises, without wrecking our plans.

How do you prepare to replace the things that are going to break?

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The High Cost of Keeping Richard Ramirez in Prison

News

English: San Quentin State Prison, CA Dansk: S...
English: San Quentin State Prison, CA Dansk: San Quentinfængslet i Californien (Photo credit: Wikipedia)

Serial killers in the United States often gain cult status due to their strange courtroom antics and dramatic personalities. Recently deceased death row inmate Richard Ramirez was definitely one of the most famous serial killers of all time before he passed away of liver failure in California’s San Quentin State Prison.

After a dramatic arrest in 1985 in East Los Angeles by residents who recognized Ramirez from photographs displayed all over the news, Ramirez would sit in jail for years while awaiting a trial that finally began in 1989. There would be no more expensive trial in the history of Los Angeles County except for the O.J. Simpson trial that occurred a few years later.

At a cost of $1.8 million dollars, Los Angelinos would pay dearly for the privilege of trying Ramirez in a court of law. Incredibly, however, this massive sum wasn’t the only cost associated with this vicious serial killer. Because he was sentenced to death and due to the incredibly long appeals process associated with death row inmates, Ramirez sat in jail for over two decades without any fear of actually being put to death by the state of California.

Over the past hundred years, the number of individuals incarcerated in the United States has ballooned from a few hundred thousand people to almost 2.5 million prisoners. The most expensive people to incarcerate are death row inmates, who sit in a type of solitary confinement for decades. A moratorium on future executions in California has ensured that inmates like Ramirez have been costing taxpayers millions of dollars for housing and appeals with no likelihood of being put to death.

According to the American Civil Liberties Union, there are around 700 people sitting on death row in California, which require a massive investment of tax dollars. The state’s ongoing budget crisis and inability to balance its budget has put great strain on the prison system to house so many death row inmates at such an incredible cost.

Richard Ramirez’s untimely death at the age of 53 and his decades-long residency within a state prison brings to light a disturbing fact: more inmates die of natural causes while on death row than are actually put to death. Whether support for the death penalty exists or not, the billions of dollars spent by the state to keep inmates on death row has resulted in just 13 executions since the late 1970s.

A study in 2011 that was conducted by a judge and professor in the state suggested that California has spent over $4 billion since the death penalty was reinstituted. Out of those funds spent, at least a billion dollars was used for housing and incarceration of the inmates, including serial killers like Richard Ramirez.

A further study presented by the Commission on the Fair Administration of Justice in 2008 suggested that keeping the system intact with inmates on death row would cost around $137 million dollars a year. On the other hand, if California was to commute those death sentences to life in prison and abolish the death penalty, the yearly cost would drop to $11.5 million a year.

Offering the families of victims of death penalty-worthy crimes the chance to see a killer or other criminal experience the ultimate punishment may offer some sort of closure. Unfortunately, with the expectation that individuals on death row are more likely to die of natural causes than be put to death in California, the implementation of the death penalty in the state must be reexamined.

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Breaking Bad: The Economics of Meth

Business

Breaking Bad's Walter White (Bryan Cranston) J...
Breaking Bad’s Walter White (Bryan Cranston) Jack O’ Lantern (Photo credit: edwaado)

In AMC’s “Breaking Bad,” Walter White plays the role of chemistry teacher turned meth producer and drug kingpin. While it certainly makes for good television to think about the profits available to someone willing to trade in illegal drugs, the mountain of money that Walter makes by the end of the series is actually not that unrealistic. Meth has a street value that approaches $30,000 dollars per pound. Not only that, but Walter displays a deceptively keen business acumen, especially for a chemistry teacher. A number of keen decisions allowed Walter White to become as successful as he has.

Production Costs

As any business owner knows, merchandise costs are a major portion of any operating budget. Mr. White keeps his profit margins robust in a number of ways. The first of these is by managing his production costs. When he started out in the business, Walter simply stole the majority of the required chemicals from the high school where he worked. This allowed for the product to be sold at a substantial profit when compared to producers who are required to invest more upfront.

Location, Location, Location

On top of his discounted production, Walter was able to stay ahead of the competition both literally and figuratively by utilizing his RV for production. Typically, meth is produced in a laboratory environment, which requires a building. This adds an additional cost of rent to the typical business profile. Walter, on the other hand, produced out of his RV in the early stages of his business’ growth, further increasing his profit margin.

Distribution

On the production side of the economy, a major consideration is distribution costs. While most of Walter’s competition used pricey, established lines of distribution for their products, he cut out the middle man by distributing his product with his team. This caused major disruptions to his business when his competitors tried to kill him. However, while he was able to accomplish this model, Walter was the beneficiary of increased profits. Then, when he killed his competition, he was able to return to the healthy margin he enjoyed previously.

Advertising

Many new products are launched with a full blown media campaign. This is a costly proposition. Walter, instead, relied on the quality of his product to speak for itself. This competitive advantage reduced the need for an extensive advertising budget. Furthermore, after a period of time, his product became a preferred choice by consumers everywhere. While he was required to distribute a few loss leaders at times, Walter kept the advertising costs down and profited greatly.

So, while it may seem like Walter White was simply a chemistry teacher who got lucky, it’s clear that he actually had a specific plan for his upstart business. By following a few standard economic principles, he was able to increase his margins at the crucial beginning phase of his business, and had established himself as a leader in the market when he chose to expand

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What Is Your Binary Options Strategy?

Finance

Binary Options tradingWhen you are just entering the world of binary options trading or investing, you may be on the receiving end of a lot of advice. It is not uncommon to hear people tell you to implement different gambling strategies because binary options are based on chance more than anything else. You will also hear a lot of advice from those who say there are many good ways to develop an effective strategy using indicators and market signals. Some will insist that with proper analysis of market data, a solid strategy can be developed too.

Are they all correct? Interestingly enough, the answer is yes. The reason for this is simple, and as one expert writes, “there is no such thing as a perfect strategy for every trader. There is only a best strategy for each individual trader.” Thus, your strategy has to be shaped around a few things:

  • Your willingness and ability to follow your chosen strategy.
  • Your personality. For instance, are you restless if you are taking the safe route or a higher risk strategy?
  • Your budget and goals,

Identifying the answers to these questions is the first step to formulating a strategy. You should also understand that the winning percentage of most strategies will be somewhat constant, but the total number of successful trades varies on an individual basis and is based entirely on the strategies used.

For instance, some investors want a high percentage of winning trades and are more comfortable with risk averse trading. Others are ready to take more risk and are entirely comfortable winning fewer trades if the returns on winning trades are dramatically higher. This enables them to implement higher risk trades. The interesting thing about strategies and the kinds of trades they generate is that they are all built from the same data.

The Data of Strategy

For example, almost all strategies will look at issues like market trends, trading trends, highs and lows, reversals, and various kinds of indicators. The reason that high and low trends pay off in strategy development is simple: binary options trading applies to whether or not an asset rises above a strike price or doesn’t. It is the proverbial “yes or no” part of the proposition and analysis for either outcome pays off.

As an example, a lot of risk-averse investors will look for breakouts. They use these for trend line investing, which can be as brief as sixty seconds to a day, but can be used to coordinate investing in the direction of a short trend. Although this seems complex, it really is not. The key is that analysis cannot be broad and across all available markets. Instead, focused analysis on a specific area will allow even a novice investor to analyze for a breakout and then invest in binary options accordingly.

Just being able to detect a reversal or a downward trend over the course of a day can yield a very rewarding investment. The key is to understand your strategy based on your budget, personality, and your ability to stick with the strategy, even if it does not yield immediate success. When you do this, and use the right tools for analysis, you can create an effective strategy that brings you closer to your goals.

This is a guest post.