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Snip!

News flash!

Incubating my third half-clone was my major motivation to get out of debt. I wasn’t sure how we were going to be able afford her without pawning one of her kidneys.

We managed, though. She’s intact.

The idea of squeezing a fourth little monster into our budget scared me right out of the gene pool. I got a vasectomy.

Interesting fact: When the doctor says “I’m going to cut your vas deferens, now. It’s going to feel like you got kicked in the crotch, but don’t move”, he’s right. It does. And you shouldn’t. My doctor complimented me on my ability to not flinch. I reminded him that he had my fun bits in one hand and a scalpel in the other. That’s a sure way to have both my attention and my obedience.

It costs money to have a baby, particularly if you do so in a hospital. Our cheapest birth cost us $250 out-of-pocket, but that was because my wife was covered by two health insurance plans. Adding her to my plan for a couple of months cost us a few hundred in premiums. We’ll call it $500 to get the baby into the world.

My vasectomy cost $125 out-of-pocket. That’s easy math.

What if you don’t have insurance, or are covered by a lousy plan? Baby #2 fit that category. We got a bill for $8500. After begging the charity department of the hospital for help, our actual out-of-pocket was about $2500.

The bill cost of my vasectomy was $1500. Again, easy math.

Clearly, getting snipped is cheaper than having a baby, even without considering food, diapers, crib, nanny-dog, toys, padded cardboard boxes for those rare date-nights, and everything else that you have to spend with a baby.

But wait, what about condoms?

While I find it odd that you can buy condoms online, I will use Amazon’s numbers.

You can buy a pack of 72 condoms for about $18, $15 if you use Subscribe-And-Save. That brings the price down to 21 cents per condom. According to Amazon, the most popular subscription option is one delivery every five months, which comes out to one condom every other day.

If that’s you, then yay!

At $15 per delivery, it would take 9 deliveries to make up the cost of an insurance-covered vasectomy. According to Amazon, that would take 45 months, or almost 4 years.

Without insurance, it would take 41 years to make up the difference.

Condoms are cheaper.

On the other hand, a vasectomy is pretty well guaranteed. I went to the best I could find. No back-alley doctor with a hedge-clipper for me. He guaranteed his work, provided I came in for two follow-up visits to check his work.

Now, I have no risk of expanding the budget for another ankle-biter and I don’t have to worry about random 3AM trips to the pharmacy.

Net Worth Update

Misc

I looked back at the spreadsheet I use to track my net worth, and realized that I have been filling it out quarterly, though I can’t say that has been on purpose. Apparently, I get an itch to see my score about four times per year.

This quarter is the first time in a long time that my net worth has dropped. We got our property tax statements last week and found out that our houses have dropped a combined $21,700. Since we’re not planning to sell, that doesn’t matter much.

What’s interesting to me is that, even though our property values dropped $21,700, our total net worth only fell $10,567. We’ve been hustling trying to get the Tahoe paid off. It’s going a little bit slower than I had hoped, but it’s progressing nicely.

I do feel good that, even if I would have been focusing on my mortgage, I still would have lost the mortgage race. That means my misplaced priorities of acquiring more debt to snatch a fantastic deal didn’t cost me the race. Now, I’ll be forced to take a vacation in Texas, coincidentally in the same town as my wife’s long lost brother. I think we can make that work.

I rounded off the credit card and vehicle totals because one is used every day and paid off every month and the other has a steady stream of money getting thrown at it, so the numbers change often.

All in all, I don’t have any room to complain. I am looking forward to paying off the truck and focusing on the mortgage. We could swing quadruple payments, which would pay off the house shortly after the new year starts.

Jules Bianchi – Is a high-risk career worth the money?

Celebrities

The violent crash at the Japanese Grand Prix calls into question whether the life of a racing driver is worth the money. These men are paid handsomely for their efforts, but they could die at any minute on the track. It is best for people to remember what it is like to do this job, but it is also wise for people to think about what it means to the driver who do this job.

The Risk

The risk in F1 is high, and Jules Bianchi saw that firsthand when he was injured so badly that he had to be rushed to the hospital for emergency surgery for head injuries. His crash was so violent that is stopped the race. People crash all the time, but this crash stopped the race. Bianchi is no doubt a millionaire, but people would wonder why he would risk it all just to drive a car quickly.

Every one of the drivers on the circuit does not have an imagination. People like Bianchi or Schumacher or Alonso or Vettel do not think for a second about what could happen when they crash. These men only think about winning races. They only think about doing their best. They know the risks, but they do not sit around thinking about it.

The Pay

F1 drivers are paid extremely well, and they participate in the most glamorous sport in the world. They do something that is more difficult than any other sport, and it is difficult, but they live the lives of rock stars. They know this fame will be short-lived, but they drive regardless.

Jules Bianchi knew the risks when he got in the car. He is being paid extremely well to do his job, and it is worth it to him. People around the world may not have the bravery or raw talent to become a great driver, but he does. He has a ride on the Formula One World Championship circuit. He has to take his car to the limit if he wants to do well.

The Alternatives

Someone like Jules Bianchi does not have to leave the sport even if he is injured badly. Many drivers will get back in the car, but other drivers will simply move to other parts of the sport. Drivers can become owners, engineers and test drivers. These drivers can become test drivers and designers for auto makers, and they can commentate on the sport they love.

They do not want to go to these alternatives because they cannot drive forever. There is also a Masters Series coming up for F1 where drivers who are over 45 can ride. These men get back in the car at high risk to their lives because it is what they love. When someone is this passionate about something, they must keep doing it.

What Happens When You Save

Finance

: Image via Wikipedia

I’m a debtor.

I’d like that to be otherwise, but I’m pretty close to the limit of what I can do to change that. Don’t get me wrong, it’s changing, but there is a limit to how many side projects I can take on at one time. So, I’m in debt and likely to stay that way for the next couple of years.

As part of my budget, I set up a few categories of items that are either necessities or “really wants” without being immediate expenses. For example, I’m setting aside some money each month for car repairs, even though my car isn’t currently broken. When it comes time to fix something, I hope to have the money available to fix it, without having to scramble or <spit> tap into my emergency fund.

All told, I have about a dozen of these categories set up, each as a separate INGDirect savings account. Twice a month, a few hundred dollars gets transferred over and divided among the savings goals. Most of these goals are short-term; they will be spent within the year, like the account for my property taxes. Some of them are open-ended, like my car repair fund. Some are open ended, but will eventually end, like the fund to finance my son’s braces. All of the accounts are slowly growing.

As I’ve watched the progress of my savings accounts, I’ve noticed something funny.

My confidence is up.

It may only be a few thousand dollars, but it’s more money than I have ever had saved. The vast majority of this money will be spent over the next few years, but having it there, now means that I have tomorrow covered. For the first time in my life, I’m not living paycheck to paycheck. No matter what happens, I know I can make ends meet for a couple of months. That fact alone has reduced my stress level more than I could have imagined.

Two years ago, I was sure I was going to file bankruptcy. Now, I’m looking at being just two years away from having all of my debt gone. I have faith that my future will be bright, and only getting brighter. If I can dig myself out of this hole once, I can do it again, no matter what happens.

This has brought a calm that I can’t easily explain. I don’t have to worry about where next week’s groceries are going to come from, or how we’re going to afford braces in a couple of years.

Having an emergency fund and some auxiliary funds has been entirely worth the work we’ve done for last two years. Have you noticed any changes as you pay off your debt and build savings?

Net Worth Update

Misc

It’ s been 8 months since I’ve done a net worth update. That’s not 8 months since I’ve shared, it’s been 8 months since I’ve bothered to check for myself. Let’s see how I’ve done.

This is where I was sitting in January:

Assets

House: $255,400. Estimated market value according to the county tax assessor.
Cars: $23,445. Kelly Blue Book suggested retail value for both of our vehicles and my motorcycle.
Checking accounts: $2,974. I have accounts spread across three banks.
Savings accounts: $4,779. I have savings accounts spread across a few banks. This does not include my kids’ accounts, even though they are in my name. This includes every savings goal I have at the moment.
CDs: $1,095. I consider this a part of my emergency fund.
IRAs: $11,172
Total: $298,865

Liabilities

Mortgage: $33,978
Car loan: $1,226. This will be paid off this month.
Credit card: $23,524. This is the next target of my debt snowball.
Total: $58,728

Overall: $240,137

Here is my current status:

Assets

House: $252,900 (-2500 ) Estimated market value according to the county tax assessor. If I lost $2500 in value this year, why are my property taxes up?
Cars: $19,740 (-3705) Kelly Blue Book suggested retail value for both of our vehicles and my motorcycle.
Checking accounts: $1,342 (-1632) I have accounts spread across three banks. I don’t keep much operating cash here, so this fluctuates based on how far away my next paycheck is.
Savings accounts: $5,481 (+1156) I have savings accounts spread across a few banks. This does not include my kids’ accounts, even though they are in my name. This includes every savings goal I have at the moment. When I hit some of the goals, I will stop saving for them and redirect the money elsewhere.
CDs: $1,101 (+6) I consider this a part of my emergency fund.
IRAs: $10,838 (-334) I lost $1500 recently. I wonder how that happened? Also, my company stopped the IRA program and I have procrastinated the heck out of setting one up independently. Bad, Jason.
Total: $291,402 (-7463)

Liabilities

Mortgage: $31,118 (-2860)
Car loan: $0. (-1226) Woo!
Credit card: $20,967 (-2557) This is the current target of my debt snowball. It hasn’t gone down as much as I would have liked, due to $4000 in vision therapy bills.
Total: $52,085 (-6643)

Overall: $239,317 (-820)

My big hits were obviously my house–whose value is subject to bureaucratic whimsy–and my rapidly depreciating cars. $4000 to a vision therapist didn’t help, either.

My debt goal is to have that credit card paid off by next August. $21k in a year on top of my mortgage isn’t crazy, is it? Since 4/15/2009, I’ve paid down $37,947.06. That is not the total of payments made, but the difference in total balances over that last 28 months. That means I’m reducing my total debt by an average of $1355 every month.

My savings goal is to boost that by at least $2500 over the next few months.

My immediate goal is to get an IRA rolling. I’m kicking myself right now for ignoring it for as long as I have.

Top 7 Reasons To Trade Forex Over Other Financial Instruments

Finance

This is a guest post provided by ForexTraders.com

The foreign exchange market has literally exploded over the last 10 years. Before the 1990’s, the only players allowed to speculate in the forex market were banks, large hedge funds, and very wealthy individuals. The reason was simple. The minimum contract size was usually $100,000 and it ranged up to $1,000,000; therefore, most traders simply could not afford to trade in the market. The advance of technology and internet changed that. Today, traders can open an account with as little as $100 and begin trading in the spot fx market. This change has caused traders around the world to rush into the market and the Bank of International Settlements now estimates that average daily turnover in the fx market is around $4 trillion! Let’s examine a few of the top reasons why the fx market is drawing so many traders.

Leverage

In the United States, traders that engage in fx trading can leverage 50:1. Leverage was much higher in recent years, but government regulations have now capped leverage at 50:1 effective late October. This means that a forex trader can control a position of $50,000 with only $1,000 on deposit with his broker. Leverage is definitely a two-edged sword that can help a trader garner very quick and substantial profits, but it can also lead to debilitating losses and should therefore be used with caution.

Liquidity

The huge amount of volume that is present in the forex market each day makes it basically impossible for any single financial institution or even group of market participants to manipulate price movements. It also makes it much easier for large traders to enter and exit the market without trading against themselves, which is a common problem in the stock and commodity markets.

24 Hour Market

The forex market is a loosely connected network of international banks; therefore, the market never closes from Sunday evening until Friday afternoon. Liquidity simply flows from financial center to financial center as time zones open and close business operations for the day. This is a huge advantage for small, retail traders because those who still have full-time jobs can trade at night.

Small Initial Account Size

Traders can open accounts with as little as $1 at some brokers, and then trade positions where each 1 point movement is equivalent to $0.01 (in the U.S. this would be lower since the leverages are capped at 1:50). This will obviously never get a trader rich, but it does allow traders a very low risk entrance into the market. Traders generally need $20,000 in order to day trade the stock market. This very low account size at an online forex broker is a big draw for many traders.

Long Trends

The currency market tends to develop very clear, long trends. It is not uncommon for specific currencies to head in the same direction for 5+ years. Of course, there are many dramatic price swings that make real-time trading difficult and challenging, but a quick look at longer-term currency price charts makes it clear that currencies develop strong trends.

Macro Economics

The currency market is very big picture-based. This means there are not a million and one little things that a trader has to track as is common in other financial markets. Currencies react to major macroeconomic developments around the world. Seasoned fx professionals argue that this makes the job of economic analysis much different in the currency market.

Continued Growth and Volatility

The foreign exchange market is expected to continue to grow in coming years, and volatility is expected to remain quite strong as the world continues to move toward a more globalized economy. As globalization continues to change the world economy, investor interest in currencies will most likely continue to grow steadily.

Jason’s commentary: I’ve never looked into forex trading, mostly because I’m not in the “invest & grow rich” stage of my financial life. Have you invested in the forex market?