As a society, we have become so used to convenience that we can’t live without it anymore. I’m no different. When my phone runs out of batteries in the middle of the day, I feel like I’m missing a limb. I have completely embraced technology and really have come to rely on it. But even I, with my ADD tendencies typical of my generation, have a line that is not to be crossed. Sometimes I look at a product and say to myself, “if I use this, it will be admitting that I’m a complete wuss who is incapable of doing anything for myself.”
Today, I bring you some of those products. These are not your standard “crazy products for lazy people” that nobody actually uses which you’ve likely seen before (things like the rotating fork to help you eat spaghetti). These are things I’ve come across that apparently people do actually use.
Rounding out this series, I thought I’d add some financial lessons I’ve learned from my fiancé. For previous installments, see what I’ve learned from my mother and my father.
My fiancé had a very different upbringing than I did. My father was a salaried professional who recently retired from the job he’d held for my entire life. My mother was a stay-at-home mom for most of my childhood. They’ve been happily married (and living in the same house) for 35 years.
My fiancé’s parents on the other hand had separated a couple times throughout his childhood before finally getting a divorce not too long ago. His father moved his family around the country buying up businesses trying to turn a profit. As my fiancé puts it, it’s not that he was unsuccessful making a profitable business, it’s that he got greedy and would cut corners so he could pocket more money, over-expand the businesses, and turn down offers from buyers because he was holding out for more. He ended up selling most of his businesses for about what he bought them for in the first place, and had to take a loss on a few of them. At one point when his parents were separated, my fiancé lived with his mother on food stamps. This is all to say that my fiancé had a radically different childhood than I had.
I received an email yesterday from Ally Bank asking me what I would do with $10,000. I clicked through to find an infographic summarizing the data collected from 1022 people over the age of 18 in the continental United States. What I found was rather interesting, but what truly peaked my interest was the way in which Ally presented the data.
Ally Asks: What Would You Do With $10,000? [INFOGRAPHIC]. Check out this story and more at Straight Talk, the official blog of Ally Bank.
The choices were save, invest, pay off debt, or spend the money. About a third said they would save it, while another fifth said they’d invest it, and yet another fifth said they would use it to pay down debt. I found it pretty surprising that over 50% of respondents said they would either save or invest it. I have to hope that those people don’t have high interest debts they need to pay off, but I’m skeptical that less than half of the respondents have no credit card debt.
Then I looked closer and marveled at the fact that they didn’t list the percentage of people who would spend the money. If you add up the percentages, you’re left with 28% of the respondents saying they’d spend the money. That makes it the second most popular answer, yet it’s swept under the rug, as if Ally is hoping you won’t notice it.
Why? Clearly Ally has an agenda: they want you to save more money and they want you to save it with them. Is the idea that by down-playing the proportion of people who said they’d spend the money and highlighting more responsible choices, they hope you’ll look more favorably on the responsible choices so when you get a windfall at some point you’ll be more likely to save with them? Or are they trying to make you feel guilty by showing you that the majority of people would do something responsible with the money, so you should too?
What do you think?
These people look nothing like my father or me, but we did spend a lot of time at the beach!
Yesterday I talked about all the great financial lessons I learned from my mother. I’ve got to give my father some love too, since a big part of my financial belief system comes from him. If my mother keeps me balanced and reminds me to live a little every now and then, it’s because I’ve been heavily influenced by my father’s hyper frugal ways.
My father is the kind of frugal that you really don’t appreciate when you’re a kid. The kind who, if you ask him for some money so you can go to the mall with your friends, will hand you a $10 bill. But some of my greatest childhood memories are of time spent with my father doing very primal things, like helping him plant seeds for our garden, going to the horse farm to load up the back of his car with manure for said garden (yes, we really did that), cooking and baking, and going on fishing trips. Looking back, you realize these are the kinds of things that really matter.
Here are a few great lessons I learned from my father.
This is neither me nor my mother. But we both have brown hair, so close enough!
Our parents have a lot to teach us, if we’d just listen to them. You spend most of your teenage years thinking your parents are the least cool people on the planet, so surely anything they say isn’t worth listening to. Then you go to college and bask in the freedom of not having to hear your parents constantly giving you advice. It’s a great time. Finally you join the real world where you slowly but surely realize that all that advice your parents had been giving you over the years was for your own good. Thankfully, your snotty teenage self did absorb some of the things your parents had told you, even though you ignored it at the time.
Looking back, there are several things I learned from my parents that have proved to be invaluable. Today, I’d like to talk about things I learned from my mother.
There’s nothing like bringing up “the latte factor” to a group of personal finance junkies to get a heated debate going. There are those who swear by it, who believe that making a small change, like skipping the daily latte, can make a big change in your finances. Then there are those who scoff at it, arguing that the little changes don’t matter if you continue to waste money on the big ticket items like cars and houses.
So who’s right? Well, both sides have valid arguments, but I tend to agree with those who who swear by it. Little things like lattes make a difference.
Yield on Cost (YOC) is a popular metric among dividend investors. YOC is calculated by dividing the current yearly dividend by the price you paid per share and multiplying by 100. So if I purchased a stock 10 years ago for $20/share and this year the stock pays $1.50 in dividends per share, my YOC would be 7.5%.
Many dividend investors have a goal of holding a stock until the YOC reaches a certain level, as if there’s some bragging rights associated with having a YOC greater than 10%, or whatever threshold sounds impressive to you.
I find YOC to be a completely arbitrary figure that has no relevance whatsoever when it comes to assessing your portfolio or your self worth.
Since I hit a milestone weight this weekend, I’ve been thinking a lot about how health and finances are related. Turns out, a lot of the building blocks for losing weight are the same for growing your savings. Both endeavors entail a journey that will bring you through many of the same stages, including an initial period of sacrifice, a period of re-calibration to your new lifestyle, followed by a maintenance period where the changes you’ve made become second nature. There are a couple differences as well, though. Let’s take a look.
I’m proud to report that I am now below 150 pounds! When I stepped on the scale this morning, it read 149.0. 150 was a huge milestone for me that I’ve been shooting for for pretty much my entire adult life. My weight has always hovered somewhere in the 160′s and for a long time I believed that was just the weight my body wanted to be. If you believe the weight you’re at is where mother nature intended you to be, it’s really hard to get up the motivation to do anything about it.
So a little over a year ago, I did something pretty radical: I convinced myself that I could be whatever weight I wanted (within reason, of course). I decided I wanted to be 140 pounds, so I set out on a journey to get there.
The new year is almost upon us, and that means it’s time to revisit our budgets. Though much is still uncertain when it comes to taxes, it is looking extremely likely that all of our paychecks will shrink at least a little bit next year.
The most likely change is the expiration of the payroll tax cut, which will add 2% to every employee’s tax bill. There hasn’t been any indication that this tax cut will get extended, so you can be reasonably certain this will affect you starting January 1, 2013. The average American family will see their take-home pay drop $1000 next year.1
And then if the Bush tax cuts are allowed to expire, our paychecks will be even smaller. The current 10% bracket will go away, making the lowest bracket 15%. The 25% bracket will go to 28%, the 28% bracket will go to 31%, the 33% bracket will go to 36%, and the 35% bracket will go to 39.6%.2
With all the various tax cuts that are set to expire, the average American family will be paying an extra $3500 in taxes next year.3 We’re racing quickly toward the end of 2012 and no resolution has been reached yet, so we may as well plan for the worst. $3500 per year equates to $291.67 per month.
So what can we do so we won’t miss that $291.67 each month?