I am writing a little early because my days off at Sam's Club was switched. I have been online for a while now. I have had roughly 700 visitors on this site. The traffic has slowed down a bit mainly because I have not been adding content on a daily basis. But I am actually okay with that for now because I mainly wanted to do this as a hobby and to have a fan base where I can educate people on this subject. I never knew that I was going to get such a positive response from my co-workers, friends, and net pals. I have also received positive response from people in Japan and France as well, so this thing is global. Most of my response though is a old hat trick called "word of mouth". I only prosper through you, the viewer. So I would like to thank, you the viewer for making this site into something that can inspire me to go on.
Frugal Shopping
This is mainly inspired by David Bach's new book on how not to get ripped off. I am all for not being taken to the cleaners and think the best way to avoid this is through reading and research. So you want some stuff that you saved your hard earned money for. Why should you really do without? People need certain things in their life that gives them meaning, but it does not mean go in debt over them.
If you are reading this understand one thing: you have to get your finances ship shape before you even think about shopping for yourself. The art of frugality means that you should have your finances a massing themselves like a army. They should be accumulating to the point that whatever you are about to go in on should be covered by your assets and then some. It might not hurt to make investments that give you passive income before you enter this phase of your life. Right now, I am not quite there mentally but honestly if I wanted to I could get any thing on the shelf at the store. A year ago, you could not possibly fathom what kind of pain I had to go through.
Now that pain is over and the lesson learning and mentoring must go on. Why do people have to go through a serious amount of self inflicting torment is beyond me. We have these sayings "Pain retains", but that is just not a wise way to learn. I find the best way is to learn through other people's mistakes. And today's topic, is about me learning from other people's advise and misfortunes.
Like I said before, you do need to be a rocket scientist to be frugal. It just takes good old fashioned W-O-R-K. Now that you have taken the steps to secure your future. It is time to do some living in the present chuckieblurbs style.
Despise What You Cannot Have
This bit of information comes from Robert Greene out of 48 Laws of Power. In other words, if the item you want is out of your price range: do not get it. I have always thought that the best way to take care of one's finances is to take care of YOUR SELF first. But, if you want something just to have it, make sure that is it only a fraction of what you earn or make. Do not fall for any "No Money Down" schemes. They really just accumulate interest while you for bare any costs.
Do not get an extended warranty on any item in the store unless it is at a reasonable price. I cannot believe how many warranties I sell per day. There are a lot of people who fall for this and make some 3rd party rich while they become poorer. It is certainly a shame that many of these people pay for an extra year when the product in the store might still be good until the year is up. People think this is just me being disgruntled with my profession, but in actuality I know the inner workings of the warranty. You are far better off with just getting an upgraded membership, that gives you an extra year in service warranty than to pay for another one. If you think paying 5% -15% to safe guard an item that you can just get back by going through membership or claims then I have sure hope you are balancing all of those bait and switch bills and deals that we salesmen give you. Trust me, I have made Wal-Mart thousands of dollars off of warranties and let me tell you, if you know how the system works then you will least likely be scammed.
What Will Give You The Best "Bang" For Your Buck?
It is by far the way of clearance. Warren Buffett says "You can put all of your eggs in one basket; just watch the basket". Meaning when buying something, you should watch the price like a hawk. If you want a HDTV for example (though I probably prefer a book over a TV), you see that it hits the sales floor at $1,300. Right now we will use the word "Hot" since it is used by different stores and I will not jeopardize my job at Sam's Club for not using another word. At $1,300 it is probably about 25%. You can honestly wait and see what happens with the item. Eventually it will enter a phase known in the retail industry as being cleared. The best deals comes to those who wait. Sure this tactic is not full proof and you might not get what you want every time. But if the item gets bought up, you can move on to a better item that you want and amass more money. Frugal people do NOT spend above their means I do not care how bad you want the item. If you cannot afford it, something in your head should tell you to let it sit on the shelf.
Careful when purchasing clearance items. Eventually they will get reduced to the point where they are no longer being sold at the store's location. I think that is the point you should probably try to get them. Look for red flags as in a drastic drop in price. On TVs and computers it is about $500-600, from the original. It means it is about to be "deleted" or liquidated. If this happens, you should go ahead and try to get the item as soon as possible. If you try to get it at a liquidation supplier, you have to find the company that the retailer uses and no one is going to tell you. Those are considered trade secrets. I will tell you that usually when the items are selling BELOW cost is when they will be sold to a liquidator.
Buyer Beware: The Red Tag Items Are Only As Good As The Last Owner
Take it from me, a professional salesman: Red tag items are usually buys that are worth their weight in gold. More than likely the item cannot be returned, but if you buy it at a good price you do not need to worry about the return policy because usually the prices there are below liquidation. More than likely, the last owner used the item and he thought it was too complicated to get it to work.. Meaning that he/she got fed up and got a refund. Those items are then slotted in the clearance aisle, where they are sold to the lowest bidder.
There are things you should look for when buying from there. The first thing that should trigger is whether or not it actually is a good buy. Second is for damage. Lastly, check for missing parts. Do not be pressured by pushy salesmen who just want to get rid of their junk. Make sure the item you are buying comes with a factory warranty or do not buy it. It is that simple. If it does not come with its paperwork, it stays on the shelf.
Do NOT Fall For Baits and Switches.
People will try to up sale you. It is my job to up sale people in order to get more money out of them. What I do is find out what type of person they are and figure out what warranty or credit card I can sign them up for. Frugal people never fall for any of these schemes and neither should you. More than likely, the cost is around 20-30% more before any of those special no money down deals. With it, it is around to 30-40% extra profit. There are great deals at Sam's Club without ever having to go for a credit card, so you should just avoid it outright. Frugal people do not use crutches such as a credit card to sustain them: they use their own cash in order to buy the item. That's right; it's all or nothing! I am serious when I say this. I do not use some plan in order to gain money off of the deal. That only works in investing, not buying something that loses its value.
While investing smart is good, buying smart is equally important to frugality. You should be doing this rarely. Only when you have earned the right to buy something should you do it. Remember the item loses its value as soon as you take it out of the store. If you do value based shopping, you will be A-OK. The best way to buy is to figure out if you are being up saled and what the actual cost is. You might not be able to get the item for your desired price so you might have to buy it at retail. If it is at a decent price, then there is no problem. Ask the staff what the margin on the item is. If they are good salesmen and not total scum, they will not lie to you about their margins. Honestly, I do not lie about this, but I do not give away the true margin. I just tell them that we (as in Sam's Club) might be selling the item at a gain or a loss. Those are trade secrets after all.
Tuesday, March 31, 2009
FAQs
Well it seems that I have made an impact on the web community with this site. I am actually starting to see a return on my invested time. Because of this, I will be restricting some of the content to frugality and my personal self. I think I will also change the slogan as well, but I am just thinking about that. I have to say that out of all of the things I have done with close to no help, this has to be one of my greatest achievements.
I have had a few questions about subscribing so I will just answer them before I start this entry.
I am a part of blogger/blogspot and I cannot seem to subscribe to your blog
Well there is many ways you can join. You can join directly by clicking under "Blog Ring Army" and then subscribe to Chuckiesblurbs. You can also e-mail me for anything regarding trouble shooting. If that does not work for you, you can simply add the blog posts in your accounts so as long as you have the right account. If you need to access this blog just simply type "FAQ". I am going to just tag it that way so people will just pull up this post.
I have had a few questions about subscribing so I will just answer them before I start this entry.
I am a part of blogger/blogspot and I cannot seem to subscribe to your blog
Well there is many ways you can join. You can join directly by clicking under "Blog Ring Army" and then subscribe to Chuckiesblurbs. You can also e-mail me for anything regarding trouble shooting. If that does not work for you, you can simply add the blog posts in your accounts so as long as you have the right account. If you need to access this blog just simply type "FAQ". I am going to just tag it that way so people will just pull up this post.
Wednesday, March 25, 2009
Advanced Frugality For College Students and Full-Timers
This will probably wrap up the frugality special for Chuckie's Blurbs for right now. I might do another special in the future, but it will mainly cover different strategies on finding ways to save money. Last time I talked about saving money to invest. Now I am going to talk about saving money in order to invest in yourself. It is the ultimate investment you can do. While many people will feel that investing in the market or buying precious metals is not for them, fear not! There are tons and tons of ways to make money on the information superhighway. If that is not the route you wish to travel you can still make money at your job while keeping your costs low. Note that you will have to eliminate a few other bills before trying this. I am not going to give you a fish, I will teach you instead.
In the job market there is a hierarchical system that offers you a "since of security", but one should not totally rely on a security blanket for long. Like I mentioned before, events that are beyond your control can and will happen. I do not advocate totally depending on one pay check so here is how to buffer yourself against the impending financial collapse. This is mainly for people that want to stay in school and wish to stay with their employers for whatever reason.
For Blue Collar Workers
This is probably a no-brainer if you are working full time. You need to reduce your bills to the point so you can create a nest egg. If you are happy working for someone else, there is little I can do to convince you that you will not make as much as people that are educated and are white collared workers right? Contrary to popular belief you can perhaps get further ahead than the general public who cannot balance a bank statement for the life of them. If your income is at a set wage, you should be more attuned to saving money than other people. You can join a union if there is benefit to getting a higher wage. Note that the best way to get ahead is to make connections within the workforce. These days it is not what you know, it is who you know. And nothing could be further from the truth. While you will never be the next Buffett working at a 9-5, you do not have to be buckled down with meaningless bills. Most people think that you need a million dollars to retire, but, I would say that most people do not have the willingness to make sacrifice. Honestly, if you want to make this amount of money while working, then blue collar jobs are not for you. You need to enter the white collar or business sector.
While brown bagging your lunch is often a good idea, this is basic frugality and there will be no strategic talk about what you should buy. You should already be targeting the most healthy items for the lowest price. The main focus for you should be eliminating transportation issues. If you work far away, use the principles from Intermediate Frugality to earn real money by following the budget and stick to it.
Barter For Services Instead of Using Money
Out of 7.2 billion people on the face of this planet I find it hard to believe that each person does not have some sort of unique innate talent. And out of those people as William Easterly puts it,"People respond to incentives". If you can make a website and need a ride to work and there is someone that wants one built at work, consider trading skills for resources. In frugality, the main goal is to keep the money you put in the bank, in the bank. The other is to be able to invest whatever you put in the bank. There are some investments that you can do as a blue collar, but you are extremely limited. In you get the courage, build up a client list, save up to roughly 40,000 to 50,000 dollars and start your own small practice. If you can earn money, make sure most of the transactions are cash. You can also barter a little, but I think the main goal is to take what you have earned and make more money. bartering will only get you items you need or want. Frugality is to help you obtain these goals. You can earn a steady paycheck in your practice and having a job as well. I know of many people who own vending services and C-stores that pull down six figures annually.
See you do not have to be an investor per se for this to work. you just have to know the meaning of sacrifice. Want to live comfortably? Take the time to do a all or nothing strategy with payments down the road. People love cash, hate deadbeats, and want more now. True they can make more money by simply collecting all the payments down the road, but that is not feasible at times. In fact, if you pay cash for everything, business owners usually give huge discounts on product that you are purchasing. Take a car for example, you can probably get the money down payment lowered if you negotiate him down with cash. Also credit scores do not matter if you have 6 or 7 figures in the bank. Most people will only ask "do you want to buy it?"
Frugality for Students
When I was going to college, I had the hardest time getting a job mainly because I was going to school for more than full time. There are a lot of young and old people who value college, but college does not guarantee success. True, it will make you a more productive worker ant and greatly reduce your chances of getting laid off and you will carry yourself in a different manner than when you first go in, but unless you want to do some sort of hard science or advance degree, do not expect a 80K per year job when you come out. Those days are long gone. But if you are determined to get a degree and it is truly on your dream list (it was on mine!), then by all means go for it. You do not need a degree to get ahead now thanks to being able to substitute experience for knowledge. Many employers are starting to weigh degrees less and less and now there is a chance that you will be able to earn the same amount as someone without a degree. If you are getting a degree to get a job, you need to make sure that the degree you are trying to get will help you obtain your dream job.
Education is not limited to degrees though. When I say this, I want you to understand that while I am not in my "dream job" I am not starving either. I have a dream list and I have accomplished 99% of them because I put in time and effort. One of my dreams is to speak Japanese on the native level which will lead to translation opportunities. Before I came back from Okinawa, I actually landed a full time job as a interpreter for the Christian church over in Japan but I declined the offer because I wanted to get a double major in International Affairs and History.
These days, certifications will actually lead to more financial opportunities than the Old Boy program. I will probably get some hate mail here. but the more you have in skills that have a high demand, the more likely you will be able to earn more money. Right now programming languages and computer graphics are in demand along with nanotechnology. So a four year degree form those fields will lead to steady money if you are interested in it. If you are not, the quality of your work will be poor and it will only lead to a waste of time because you will not want to do it in the future.
The most important thing to do is plan ahead. If you are young and are reading this, then obviously getting a job while in high school should be your goal. You should also try to get some under the table work and put the money away. When you do this save from freshman year to senior year. More than likely it will be at minimum wage, but you should able to save enough for college for at least the first two years. Afterwards, do not enter college right away unless you have scholarships to cover the other half of your studies. This means that in order to save for college, you might have to work 5 years and not have the luxury of buying stuff that loses value, but investing in yourself will only cause you to flourish and society and live a well balanced life. It will also help you keep an open mind and give you a chance to think about investing and give way to credible research. Frugality is the best way to reach this goal, not mommy and daddy. Frugal people are independent; not self-dependant. If you have a trust fund, then work to build up security while going to school. You will be able to travel leaps and bounds if you have the cash to do so.
When in college, remember that the object is to keep your money in the bank. You will experience losses in earnings while being in college, so you need to prepare for that. Consider going to community college first then transfer to a 4 year afterwards. You will cut costs substantially by following this advise. Also do not buy all of your textbooks from the store. They will rip you off and overcharge you the value of the text book. If you can get a friend's e-book file of the textbook, ask if you can download his/her's copy. And sometimes the book stores put the e-books on file in order to sell them at a cheaper rate than the hard copy text book. Find a apartment (preferably a studio) close to campus so you do not get ripped off on their parking. Remember that the best way top save money is to not waste money. Shed unwanted bills and do not fall for any of the credit card gimmicks that is often regurgitated by Chase or MasterCard: they make their money by keeping you in debt. They did not build their business off of rich people-- they often pay in cash.
I bypassed all the campus scams and came away with little debt, but if I had to do it over again, I might of taken less classes. Other than that, I have no regrets. I did however make the mistake of getting a student loan when I could have broken up the semester payment into 3 chunks. They do not tell you about that. Often you have to inquire about alternative payment options. There is no use in going broke over stuff that does not matter. If there is a option, use it if it will keep you out of debt. Overall, if you are following a budget and the strategies in the Frugality special, you should not be experiencing any difficulties in paying your tutition.
In the job market there is a hierarchical system that offers you a "since of security", but one should not totally rely on a security blanket for long. Like I mentioned before, events that are beyond your control can and will happen. I do not advocate totally depending on one pay check so here is how to buffer yourself against the impending financial collapse. This is mainly for people that want to stay in school and wish to stay with their employers for whatever reason.
For Blue Collar Workers
This is probably a no-brainer if you are working full time. You need to reduce your bills to the point so you can create a nest egg. If you are happy working for someone else, there is little I can do to convince you that you will not make as much as people that are educated and are white collared workers right? Contrary to popular belief you can perhaps get further ahead than the general public who cannot balance a bank statement for the life of them. If your income is at a set wage, you should be more attuned to saving money than other people. You can join a union if there is benefit to getting a higher wage. Note that the best way to get ahead is to make connections within the workforce. These days it is not what you know, it is who you know. And nothing could be further from the truth. While you will never be the next Buffett working at a 9-5, you do not have to be buckled down with meaningless bills. Most people think that you need a million dollars to retire, but, I would say that most people do not have the willingness to make sacrifice. Honestly, if you want to make this amount of money while working, then blue collar jobs are not for you. You need to enter the white collar or business sector.
While brown bagging your lunch is often a good idea, this is basic frugality and there will be no strategic talk about what you should buy. You should already be targeting the most healthy items for the lowest price. The main focus for you should be eliminating transportation issues. If you work far away, use the principles from Intermediate Frugality to earn real money by following the budget and stick to it.
Barter For Services Instead of Using Money
Out of 7.2 billion people on the face of this planet I find it hard to believe that each person does not have some sort of unique innate talent. And out of those people as William Easterly puts it,"People respond to incentives". If you can make a website and need a ride to work and there is someone that wants one built at work, consider trading skills for resources. In frugality, the main goal is to keep the money you put in the bank, in the bank. The other is to be able to invest whatever you put in the bank. There are some investments that you can do as a blue collar, but you are extremely limited. In you get the courage, build up a client list, save up to roughly 40,000 to 50,000 dollars and start your own small practice. If you can earn money, make sure most of the transactions are cash. You can also barter a little, but I think the main goal is to take what you have earned and make more money. bartering will only get you items you need or want. Frugality is to help you obtain these goals. You can earn a steady paycheck in your practice and having a job as well. I know of many people who own vending services and C-stores that pull down six figures annually.
See you do not have to be an investor per se for this to work. you just have to know the meaning of sacrifice. Want to live comfortably? Take the time to do a all or nothing strategy with payments down the road. People love cash, hate deadbeats, and want more now. True they can make more money by simply collecting all the payments down the road, but that is not feasible at times. In fact, if you pay cash for everything, business owners usually give huge discounts on product that you are purchasing. Take a car for example, you can probably get the money down payment lowered if you negotiate him down with cash. Also credit scores do not matter if you have 6 or 7 figures in the bank. Most people will only ask "do you want to buy it?"
Frugality for Students
When I was going to college, I had the hardest time getting a job mainly because I was going to school for more than full time. There are a lot of young and old people who value college, but college does not guarantee success. True, it will make you a more productive worker ant and greatly reduce your chances of getting laid off and you will carry yourself in a different manner than when you first go in, but unless you want to do some sort of hard science or advance degree, do not expect a 80K per year job when you come out. Those days are long gone. But if you are determined to get a degree and it is truly on your dream list (it was on mine!), then by all means go for it. You do not need a degree to get ahead now thanks to being able to substitute experience for knowledge. Many employers are starting to weigh degrees less and less and now there is a chance that you will be able to earn the same amount as someone without a degree. If you are getting a degree to get a job, you need to make sure that the degree you are trying to get will help you obtain your dream job.
Education is not limited to degrees though. When I say this, I want you to understand that while I am not in my "dream job" I am not starving either. I have a dream list and I have accomplished 99% of them because I put in time and effort. One of my dreams is to speak Japanese on the native level which will lead to translation opportunities. Before I came back from Okinawa, I actually landed a full time job as a interpreter for the Christian church over in Japan but I declined the offer because I wanted to get a double major in International Affairs and History.
These days, certifications will actually lead to more financial opportunities than the Old Boy program. I will probably get some hate mail here. but the more you have in skills that have a high demand, the more likely you will be able to earn more money. Right now programming languages and computer graphics are in demand along with nanotechnology. So a four year degree form those fields will lead to steady money if you are interested in it. If you are not, the quality of your work will be poor and it will only lead to a waste of time because you will not want to do it in the future.
The most important thing to do is plan ahead. If you are young and are reading this, then obviously getting a job while in high school should be your goal. You should also try to get some under the table work and put the money away. When you do this save from freshman year to senior year. More than likely it will be at minimum wage, but you should able to save enough for college for at least the first two years. Afterwards, do not enter college right away unless you have scholarships to cover the other half of your studies. This means that in order to save for college, you might have to work 5 years and not have the luxury of buying stuff that loses value, but investing in yourself will only cause you to flourish and society and live a well balanced life. It will also help you keep an open mind and give you a chance to think about investing and give way to credible research. Frugality is the best way to reach this goal, not mommy and daddy. Frugal people are independent; not self-dependant. If you have a trust fund, then work to build up security while going to school. You will be able to travel leaps and bounds if you have the cash to do so.
When in college, remember that the object is to keep your money in the bank. You will experience losses in earnings while being in college, so you need to prepare for that. Consider going to community college first then transfer to a 4 year afterwards. You will cut costs substantially by following this advise. Also do not buy all of your textbooks from the store. They will rip you off and overcharge you the value of the text book. If you can get a friend's e-book file of the textbook, ask if you can download his/her's copy. And sometimes the book stores put the e-books on file in order to sell them at a cheaper rate than the hard copy text book. Find a apartment (preferably a studio) close to campus so you do not get ripped off on their parking. Remember that the best way top save money is to not waste money. Shed unwanted bills and do not fall for any of the credit card gimmicks that is often regurgitated by Chase or MasterCard: they make their money by keeping you in debt. They did not build their business off of rich people-- they often pay in cash.
I bypassed all the campus scams and came away with little debt, but if I had to do it over again, I might of taken less classes. Other than that, I have no regrets. I did however make the mistake of getting a student loan when I could have broken up the semester payment into 3 chunks. They do not tell you about that. Often you have to inquire about alternative payment options. There is no use in going broke over stuff that does not matter. If there is a option, use it if it will keep you out of debt. Overall, if you are following a budget and the strategies in the Frugality special, you should not be experiencing any difficulties in paying your tutition.
Thursday, March 19, 2009
Advanced Frugality
When people reading this, they probably think that credit in general is bad. I digress I at this note because credit is not "bad" per se. In actuality credit can provide you with the opportunities to make investments thus being able to increase how much money you make. The technical term for this is residual income. If you have mastered everything in the previous posts, you will be able to take this essential step to financial freedom: using your money that you saved so earnestly to go in on investments.
I alluded to this in the last post intentionally to drive home the idea that saving money is only one attribute to frugality. Anyone can save money as I have shown you. And also it does not depend on how many kids you have either (albeit it will be harder to do so if you have a lot of children). There was a family that lived on $35,000/ year with a working family of two. Typically nuclear family. And guess what they did with their savings? They reinvested the money in publishing a book. And now they live the American dream and do not worry about bills. Now how did they do this? They saved their money and reinvested it. Like saving money, investing is not rocket science nor does it have to be hard.
Saving Money Will Only Get You So Far
I say this mainly because there are people who are afraid of investing. Investing does not have to be risky. But you need to acquire knowledge about how to invest. And never invest to the point where you are in a fiscal deficit. Last year I made a conscious choice to become an investor. First I started out with a public retirement fund at my old job. I did not like the returns in the fund so I closed it an took the money and saved it.
Now, I am investing in precious metals and blue chip stocks due to market trends and I have already seen a return on my investments. When I say trend, I mainly mean going against the trends or counter-trend investing. If the investment is trendy, the investment could be over valued. As a frugal investor, over investing is a big no-no. Here let me explain why.
I also have collected old war relics and trading cards. I even lost big.At one point I bought the Alpha Edition Black Lotus card from the game Magic the Gathering. I was pressured by the owner to give up the card and forgo it for three whole boxes of MTG trading cards. I bought the card for $220 and sold it for $270 in value. However, if I had held on to it, I would have made $2,000 from the transaction. Mind you I was only 13, but even then I was thinking about investing. However, it is probably best to say "I wish I hadn't" than, "that I wish I had". While my instict here told me not to sell the card. It was nonetheless risky because the card could have been worth $5, just like a lot of the Pokemon trading cards.
But I move on. There is no such thing as the perfect investor. However there is such thing as a prudent one. There are going to be failures along the line. Even Buffett is having difficulties with his current businesses. With the economy Berkshire Hatheway reported record losses, but does that mean Buffett lost money? No his investments did. While yes in a sense he did lose, he did win by "watching the basket full of eggs". While I do not have as much money as Buffett, I am not afriad to lose because I follow a strategy that emphasizes not losing money. (By the way that is one of Warren Buffett's golden rules.)
How To Take Budget And Set Aside Money For Investments
There is only one thing that holds people back from achieving financial success: themselves. When I mention furgality being a science, I mainly mean being able to apply its application properly. Saving money is one part. In fact, those of you that understood the property of successfully setting up a budget will understand this concept. Your going to want to save up at least $2,000 to get this off the ground. Once you saved up this amount of money, you will want to not spend this and fractionalize whatever earnings you have towards this goal.
There is another way to go about investing and that is just save up a lump sum and go in on an investment outright. I prefer to do the aforementioned, earning small victories along the road and gain momentum for the "big deal". There will be plenty in a span of 70 years. There are really no "once in a lifetimes". For me L-U-C-K, is often mispelled W-O-R-K, meaning that you will have to have the self motivated mindset that drives people to succeed. I will discuss the advantages and disadvantages of both, but first I would like to discuss why I said not to spend that $2,000.
The $2,000 is really a buffer that protects you from failure (and homelessness). You need money to fall back on. And this amount should be $2,000 if your single. (This number should really be around $5,000 if you're married) For one, there is no assurence that things that you invest in will not go awry. When you start out, things can and often will go awry. As a side note, the amount should be significantly higher if you live in a high cost city like New York or Hollywood. For regular cities like Reno, or Cleveland, or Highland this is a good amount.
When you obtain the set amount, you should fraction about $200 for every $1,000 you earn. Obviously you will probably invest in either collectibles, stocks, precious metals, or yourself. However, that is $2,400/year/per $1,000 that you can use toward either having a small business or investing. Either one will lead to profit, although the returns from investing in a small business will be more profitable at first. But once, you find something that succeeds, replicate the results until you are ready to go in on a big deal.
Option 2 is you set aside 20-30% of your annual income and just buy a business. Most people cannot do this right away. The figures for regular 9-5ers are around 17-20K. With just Sam's Club, I only make about 18K. However, let's say I wanted a small time burger francaise, we will call it Burger Barn for the purposes for keeping the topic fresh. Burger Barn wants 16K to start out. I will have to set aside roughly 5.5K in order to franciase with them. Plus I will have to probably go in on a lease. It will be a lot harder on my meager "salary". But lets say I wanted to look for a better job and I landed a 5K/month ideal college gig. That would be 12-16K for the range so ideally, I could do this within 2 years no problem, but I now have to take a huge blow to my account.
Getting small investment strategies along the road would build up residual income for the purposes of having the "big deal" in a quicker amount of time. While I do sit on things, I believe that only a fraction of your money should be spent towards making more money. It is never safe to assume risk. But when you get to the point where you find your niche and decide to reinvest. The best way to go about doing this is to reinvest your profits plus the amount you obtain from your job until and replicate the results. Successful investors invest in the same thing over and over again. They hardly ever deviate unless they understands a investment.
Budgeted Investments Is What Motivates Frugal People Into Being Frugal
I have to say the best investments I ever did were not in the bank, but on paper. You need to invest in yourself first whether it is in knowledge, time, or money. If you need something that you know will give you more money. (i.e. a class on tax preparation that will give you a comissioned return) To be able to take what you have read and turn it into profit is an ideal application. But do not expect to be able to buy stuff and get a return. One you have to find the market first and, two, you need to able to turn your market into revenue. I have to say, when you invest in yourself the returns are tremendous. You make yourself a more rounded person along with becoming saavy at investing. Budgeting and being able to save huge amounts of money is only one facet of being frugal. The art of frugality is being able to take all that you have saved and live a fruitful, meaningful lifestyle, of financial independence. The science of frugality is to do this, calculate your assets-liabilites and divide that by a certain percentage and take the difference made and RE-INVEST, save more, replicate and repeat.
I alluded to this in the last post intentionally to drive home the idea that saving money is only one attribute to frugality. Anyone can save money as I have shown you. And also it does not depend on how many kids you have either (albeit it will be harder to do so if you have a lot of children). There was a family that lived on $35,000/ year with a working family of two. Typically nuclear family. And guess what they did with their savings? They reinvested the money in publishing a book. And now they live the American dream and do not worry about bills. Now how did they do this? They saved their money and reinvested it. Like saving money, investing is not rocket science nor does it have to be hard.
Saving Money Will Only Get You So Far
I say this mainly because there are people who are afraid of investing. Investing does not have to be risky. But you need to acquire knowledge about how to invest. And never invest to the point where you are in a fiscal deficit. Last year I made a conscious choice to become an investor. First I started out with a public retirement fund at my old job. I did not like the returns in the fund so I closed it an took the money and saved it.
Now, I am investing in precious metals and blue chip stocks due to market trends and I have already seen a return on my investments. When I say trend, I mainly mean going against the trends or counter-trend investing. If the investment is trendy, the investment could be over valued. As a frugal investor, over investing is a big no-no. Here let me explain why.
I also have collected old war relics and trading cards. I even lost big.At one point I bought the Alpha Edition Black Lotus card from the game Magic the Gathering. I was pressured by the owner to give up the card and forgo it for three whole boxes of MTG trading cards. I bought the card for $220 and sold it for $270 in value. However, if I had held on to it, I would have made $2,000 from the transaction. Mind you I was only 13, but even then I was thinking about investing. However, it is probably best to say "I wish I hadn't" than, "that I wish I had". While my instict here told me not to sell the card. It was nonetheless risky because the card could have been worth $5, just like a lot of the Pokemon trading cards.
But I move on. There is no such thing as the perfect investor. However there is such thing as a prudent one. There are going to be failures along the line. Even Buffett is having difficulties with his current businesses. With the economy Berkshire Hatheway reported record losses, but does that mean Buffett lost money? No his investments did. While yes in a sense he did lose, he did win by "watching the basket full of eggs". While I do not have as much money as Buffett, I am not afriad to lose because I follow a strategy that emphasizes not losing money. (By the way that is one of Warren Buffett's golden rules.)
How To Take Budget And Set Aside Money For Investments
There is only one thing that holds people back from achieving financial success: themselves. When I mention furgality being a science, I mainly mean being able to apply its application properly. Saving money is one part. In fact, those of you that understood the property of successfully setting up a budget will understand this concept. Your going to want to save up at least $2,000 to get this off the ground. Once you saved up this amount of money, you will want to not spend this and fractionalize whatever earnings you have towards this goal.
There is another way to go about investing and that is just save up a lump sum and go in on an investment outright. I prefer to do the aforementioned, earning small victories along the road and gain momentum for the "big deal". There will be plenty in a span of 70 years. There are really no "once in a lifetimes". For me L-U-C-K, is often mispelled W-O-R-K, meaning that you will have to have the self motivated mindset that drives people to succeed. I will discuss the advantages and disadvantages of both, but first I would like to discuss why I said not to spend that $2,000.
The $2,000 is really a buffer that protects you from failure (and homelessness). You need money to fall back on. And this amount should be $2,000 if your single. (This number should really be around $5,000 if you're married) For one, there is no assurence that things that you invest in will not go awry. When you start out, things can and often will go awry. As a side note, the amount should be significantly higher if you live in a high cost city like New York or Hollywood. For regular cities like Reno, or Cleveland, or Highland this is a good amount.
When you obtain the set amount, you should fraction about $200 for every $1,000 you earn. Obviously you will probably invest in either collectibles, stocks, precious metals, or yourself. However, that is $2,400/year/per $1,000 that you can use toward either having a small business or investing. Either one will lead to profit, although the returns from investing in a small business will be more profitable at first. But once, you find something that succeeds, replicate the results until you are ready to go in on a big deal.
Option 2 is you set aside 20-30% of your annual income and just buy a business. Most people cannot do this right away. The figures for regular 9-5ers are around 17-20K. With just Sam's Club, I only make about 18K. However, let's say I wanted a small time burger francaise, we will call it Burger Barn for the purposes for keeping the topic fresh. Burger Barn wants 16K to start out. I will have to set aside roughly 5.5K in order to franciase with them. Plus I will have to probably go in on a lease. It will be a lot harder on my meager "salary". But lets say I wanted to look for a better job and I landed a 5K/month ideal college gig. That would be 12-16K for the range so ideally, I could do this within 2 years no problem, but I now have to take a huge blow to my account.
Getting small investment strategies along the road would build up residual income for the purposes of having the "big deal" in a quicker amount of time. While I do sit on things, I believe that only a fraction of your money should be spent towards making more money. It is never safe to assume risk. But when you get to the point where you find your niche and decide to reinvest. The best way to go about doing this is to reinvest your profits plus the amount you obtain from your job until and replicate the results. Successful investors invest in the same thing over and over again. They hardly ever deviate unless they understands a investment.
Budgeted Investments Is What Motivates Frugal People Into Being Frugal
I have to say the best investments I ever did were not in the bank, but on paper. You need to invest in yourself first whether it is in knowledge, time, or money. If you need something that you know will give you more money. (i.e. a class on tax preparation that will give you a comissioned return) To be able to take what you have read and turn it into profit is an ideal application. But do not expect to be able to buy stuff and get a return. One you have to find the market first and, two, you need to able to turn your market into revenue. I have to say, when you invest in yourself the returns are tremendous. You make yourself a more rounded person along with becoming saavy at investing. Budgeting and being able to save huge amounts of money is only one facet of being frugal. The art of frugality is being able to take all that you have saved and live a fruitful, meaningful lifestyle, of financial independence. The science of frugality is to do this, calculate your assets-liabilites and divide that by a certain percentage and take the difference made and RE-INVEST, save more, replicate and repeat.
Thursday, March 12, 2009
Intermediate Frugality II
Okay so you have figured out the basics and some of the stuff that even investors like Sam Walton and Warren Buffett do! Now it is onward to trimming down needless spending.
Curbing Spending on Consumer Goods
Movies: this is a no brainer. The best way to eliminate such spending is basically shop around. Most places sell the old DVDs for roughly $10, but there are now free internet sites that you can watch movies at without being tasered by the FEDs for breaking the law. While you will not get the "latest" and "greatest", you will still be able to enjoy quality entertainment. You might have to pay a one time fee for a receiver, if you cannot live without movies, but it is worth the investment.
Games: Pawn Shops often get video games that you can buy for $5, if you are good at bartering, you might be able to get one tossed in there for free. This is good if you are a gamer like me. Also if you are really savvy with the Internet, you can re-sale them for more money after you beat them!
Books: If you do not mind the commute, surf through your local Barnes and Noble or Borders and sit down and read the books. I have yet to be kicked out for reading a book that I was about to buy. There is also the library and used book stores. Again a haven for books that have a high resale value. (Note: If you have a laptop with potable Internet, you can target books that will sale for a profit. Hey their gain does not necessarily have to be your loss).
Cloths: Shop clearance for cloths. Sure they are not the "latest", but they will be the cheapest. If you are patient enough, you can get pants for around $7 and hooodies for around $10. There is also Craigslist and my favorite, a charity store.
Shoes: You do not need the latest Nike or Adidas. Let's be honest, if you walk approx. 30-50 miles per year in any shoe, they will ware out. Since I do not take the bus, I have get whichever shoe that is a 14. Yeah I can land aircraft on my feet. I have heard all the jokes. But would a frugal person like me spend $20 per set of shoes or $200? I also do not like spending a lot of time trying to find "trendy" shoes. I think Wal-Mart and Payless Shoe Store is an excellent place to search for shoes. I have to think that time is money so I also do not want to make 3 trips for $200 shoes; that is a rip off.
Socks and Underware: This is the most difficult thing for me to find. But, again Wal-Mart is probably the only place that has my size other than some overpriced big and tall store. I am actually due for another trip because socks ware out the fastest for me because I walk around a lot. Boxers also get a decent amount of wear and tear, but nowhere nearly as much as socks do.
Jackets: I stockpile jackets. I have not bought one in years. In fact I got one for free. So I just wear the same jacket for a few months.
I would make this one longer, but I have quite a bit of old e-mail to go through because I have been logging on at a weekly basis. I am almost at the point where I will have an established Internet connection so I will be able to take this blog and add more content on a more frequent basis. The frugality special will probably end in 2 weeks, then I will continue my track on investing.
Curbing Spending on Consumer Goods
Movies: this is a no brainer. The best way to eliminate such spending is basically shop around. Most places sell the old DVDs for roughly $10, but there are now free internet sites that you can watch movies at without being tasered by the FEDs for breaking the law. While you will not get the "latest" and "greatest", you will still be able to enjoy quality entertainment. You might have to pay a one time fee for a receiver, if you cannot live without movies, but it is worth the investment.
Games: Pawn Shops often get video games that you can buy for $5, if you are good at bartering, you might be able to get one tossed in there for free. This is good if you are a gamer like me. Also if you are really savvy with the Internet, you can re-sale them for more money after you beat them!
Books: If you do not mind the commute, surf through your local Barnes and Noble or Borders and sit down and read the books. I have yet to be kicked out for reading a book that I was about to buy. There is also the library and used book stores. Again a haven for books that have a high resale value. (Note: If you have a laptop with potable Internet, you can target books that will sale for a profit. Hey their gain does not necessarily have to be your loss).
Cloths: Shop clearance for cloths. Sure they are not the "latest", but they will be the cheapest. If you are patient enough, you can get pants for around $7 and hooodies for around $10. There is also Craigslist and my favorite, a charity store.
Shoes: You do not need the latest Nike or Adidas. Let's be honest, if you walk approx. 30-50 miles per year in any shoe, they will ware out. Since I do not take the bus, I have get whichever shoe that is a 14. Yeah I can land aircraft on my feet. I have heard all the jokes. But would a frugal person like me spend $20 per set of shoes or $200? I also do not like spending a lot of time trying to find "trendy" shoes. I think Wal-Mart and Payless Shoe Store is an excellent place to search for shoes. I have to think that time is money so I also do not want to make 3 trips for $200 shoes; that is a rip off.
Socks and Underware: This is the most difficult thing for me to find. But, again Wal-Mart is probably the only place that has my size other than some overpriced big and tall store. I am actually due for another trip because socks ware out the fastest for me because I walk around a lot. Boxers also get a decent amount of wear and tear, but nowhere nearly as much as socks do.
Jackets: I stockpile jackets. I have not bought one in years. In fact I got one for free. So I just wear the same jacket for a few months.
I would make this one longer, but I have quite a bit of old e-mail to go through because I have been logging on at a weekly basis. I am almost at the point where I will have an established Internet connection so I will be able to take this blog and add more content on a more frequent basis. The frugality special will probably end in 2 weeks, then I will continue my track on investing.
Thursday, March 5, 2009
Intermediate Frugality
For those of you that have been able to follow these steps, I wish you success in the future. One person off of Facebook, address "I should be proud of her younger sister and her husband" they saved up and bought their 2BR/1Bath condo outright. I think this is terrific. I am glad to see feed back from this special I am doing. Another person criticized one of the authors of the books I put up on display: "Rich, Dad; Poor Dad". While I am debating him on the author's background history, I think the most important thing he said in relations to frugality is that people should not waste their money on things that devalue as soon as you take them out of the store. I will leave it at that mainly because I want to stick to writing about frugality for the next few months.
Ok, so you formulated a budget and have taken cautious notes. Good, now this section will focus on taking basic bills and making them "more basic." Some of the advice here is mainly to get out out of those expensive phone plans and contracts. You should only enter contracts if you are guaranteed to save money. In other words, if it gives you a fixed bill and not a fluctuating one, then it is permissible. However, this does not mean to go for them every time.
Contracts Equal Servitude
Let me make one thing clear. Contracts are anti-productive to success. Unless you are getting some deal where you are getting "cash flow" from a business or are the issuer, being the issuee is a no-no to frugality.
1. You are basically stuck with an obligation. You have to meet all terms of the agreement in order to opt out. Or you can opt out with cash, but you will pay a hefty fine for getting out early or can suffer a blow to your credit score.
2. You are not mobile. You cannot ever obtain true wealth if you cannot control expenses. You are locked into a agreement, thus, giving someone else cash flow. While cell phone contracts are the exception to the rule, most other agreements are actually detrimental to your success. Rental agreements should be taken with a "grain of salt". If you have reliable roommates and fixed expensive, then this should not really be a problem. If they tie you down with unwanted bills, then it is time to relocate and a replacement for your room.
3. Contracts often take away from your income. You usually have to set aside money in order to pay a certain bill. The more optional your bills become, the better. Except for my lease, (which builds credit) the bills that I have can be cancelled at anytime, at my discretion.
Prepaid Fallacies
There is some misnomers I want to clear up about pre-paid. You want to make sure the offer will not flucuate on you without advance notice.
Cricket has always been a flat rate for me except I have to stay with in Reno to make phone calls. However, while I can switch to Trac Phone and get a cheaper rate, the reason why I have not done this right away is mainly because I have been working on curbing my calls so I can actually do the prepaid cards at my discretion.
Again frugal people find them that work for them, not for deals that they have to work for. This is key to saving money. Will the card be cheaper for you? Not if you make a lot of phone calls. So figure out what works for you before you make a commitment that you will regret in the long run. The idea of being frugal is to not live paycheck to paycheck, but it is also to gear you towards investing. You want to have a service that is profitable for you to have before you commit to it.
Avoid Taxable Items
This will require some research on your part. What I do is try to find deals that you do not get taxed on. Right now, I just found out that my HSA account will tax me $36 in order to keep it open. So I am going to shut it down. Will I miss the $600 that Wal-Mart put in it? No, because I take care of my money and my body. I have only been to the doctor once for sinus infection in ten years so there is no need to pay extra tax for something that is damaging my income and putting me on the radar. I was rather upset that Wal-mart opened this without my consent, but this is easily fixed by closing the account. No problem there. I think this was merely an accounting error; so closing it would free up $36 dollars.
Another thing that could send you to the poor house is eating out everyday. The amount that you will get taxed on every dollar is around 7cents per $1. That is also why eating out is one of the main indicators of why you cannot achieve wealth. If you pay $10 for you meal, you are paying 70cents for that meal. $1.40 for $20, $2.10 for $30 spent and so on. Fortunately, this tax is simply avoided by buying goods from the grocery store that are not "prepared" goods. In lay man's terms, anything that is considered cooked equals prepared goods. Frugal people mainly cook for themselves. While I am not the best cook, can goods, makes sure I do not starve while other people are spending more time preparing the food. To me, time is also valuable, but I do actually make something for myself every now and then. If you want to take this to an extreme you can target food that is considered "Depression Cooking" by Clara, a nice 93 year old lady who is one of the gurus of frugality. If anything you can figure out how she lived to be 93! She has a YouTube special so just go there for the videos.
Shopping in bulk will also help you save money. Those of you that own a Sam's Club or Costco card will be aware of this already, but having one of these cards will allow you to go into Sam's Club or Costco and you can buy items by the unit, which is dramatically cheaper than buying per unit. Usually I pay around 35% less than I do for items that are in regular grocery stores.
Setting Dates to Pay Bills
This takes some commitment on your part, but I have to say this is one of the keys to keeping track of your budget, so I will emphasize it here again in order to drive home a point of responsibility. People do not get out of debt if they pay their bills late! Period. So while this is really a basic skill, it can also be classified under intermediate if you are trying to pay off some dead-beat loan. You have to follow the schedule if you do not have much money, but once you accumulate more than enough money, you can buy your freedom faster by making advance payments.
This is all for now. Join me for Intermediate Frugality II coming from a Wi-Fi station near you!
Ok, so you formulated a budget and have taken cautious notes. Good, now this section will focus on taking basic bills and making them "more basic." Some of the advice here is mainly to get out out of those expensive phone plans and contracts. You should only enter contracts if you are guaranteed to save money. In other words, if it gives you a fixed bill and not a fluctuating one, then it is permissible. However, this does not mean to go for them every time.
Contracts Equal Servitude
Let me make one thing clear. Contracts are anti-productive to success. Unless you are getting some deal where you are getting "cash flow" from a business or are the issuer, being the issuee is a no-no to frugality.
1. You are basically stuck with an obligation. You have to meet all terms of the agreement in order to opt out. Or you can opt out with cash, but you will pay a hefty fine for getting out early or can suffer a blow to your credit score.
2. You are not mobile. You cannot ever obtain true wealth if you cannot control expenses. You are locked into a agreement, thus, giving someone else cash flow. While cell phone contracts are the exception to the rule, most other agreements are actually detrimental to your success. Rental agreements should be taken with a "grain of salt". If you have reliable roommates and fixed expensive, then this should not really be a problem. If they tie you down with unwanted bills, then it is time to relocate and a replacement for your room.
3. Contracts often take away from your income. You usually have to set aside money in order to pay a certain bill. The more optional your bills become, the better. Except for my lease, (which builds credit) the bills that I have can be cancelled at anytime, at my discretion.
Prepaid Fallacies
There is some misnomers I want to clear up about pre-paid. You want to make sure the offer will not flucuate on you without advance notice.
Cricket has always been a flat rate for me except I have to stay with in Reno to make phone calls. However, while I can switch to Trac Phone and get a cheaper rate, the reason why I have not done this right away is mainly because I have been working on curbing my calls so I can actually do the prepaid cards at my discretion.
Again frugal people find them that work for them, not for deals that they have to work for. This is key to saving money. Will the card be cheaper for you? Not if you make a lot of phone calls. So figure out what works for you before you make a commitment that you will regret in the long run. The idea of being frugal is to not live paycheck to paycheck, but it is also to gear you towards investing. You want to have a service that is profitable for you to have before you commit to it.
Avoid Taxable Items
This will require some research on your part. What I do is try to find deals that you do not get taxed on. Right now, I just found out that my HSA account will tax me $36 in order to keep it open. So I am going to shut it down. Will I miss the $600 that Wal-Mart put in it? No, because I take care of my money and my body. I have only been to the doctor once for sinus infection in ten years so there is no need to pay extra tax for something that is damaging my income and putting me on the radar. I was rather upset that Wal-mart opened this without my consent, but this is easily fixed by closing the account. No problem there. I think this was merely an accounting error; so closing it would free up $36 dollars.
Another thing that could send you to the poor house is eating out everyday. The amount that you will get taxed on every dollar is around 7cents per $1. That is also why eating out is one of the main indicators of why you cannot achieve wealth. If you pay $10 for you meal, you are paying 70cents for that meal. $1.40 for $20, $2.10 for $30 spent and so on. Fortunately, this tax is simply avoided by buying goods from the grocery store that are not "prepared" goods. In lay man's terms, anything that is considered cooked equals prepared goods. Frugal people mainly cook for themselves. While I am not the best cook, can goods, makes sure I do not starve while other people are spending more time preparing the food. To me, time is also valuable, but I do actually make something for myself every now and then. If you want to take this to an extreme you can target food that is considered "Depression Cooking" by Clara, a nice 93 year old lady who is one of the gurus of frugality. If anything you can figure out how she lived to be 93! She has a YouTube special so just go there for the videos.
Shopping in bulk will also help you save money. Those of you that own a Sam's Club or Costco card will be aware of this already, but having one of these cards will allow you to go into Sam's Club or Costco and you can buy items by the unit, which is dramatically cheaper than buying per unit. Usually I pay around 35% less than I do for items that are in regular grocery stores.
Setting Dates to Pay Bills
This takes some commitment on your part, but I have to say this is one of the keys to keeping track of your budget, so I will emphasize it here again in order to drive home a point of responsibility. People do not get out of debt if they pay their bills late! Period. So while this is really a basic skill, it can also be classified under intermediate if you are trying to pay off some dead-beat loan. You have to follow the schedule if you do not have much money, but once you accumulate more than enough money, you can buy your freedom faster by making advance payments.
This is all for now. Join me for Intermediate Frugality II coming from a Wi-Fi station near you!
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