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Monthly Net Worth Checkpoint: December (yep – lower still)

December 17, 2008 · Filed Under My Finances · 2 Comments 
Cash + Money by Terence Chang
photo credit: Terence Chang

We recently (at least it seems like it was recent) celebrated Thanksgiving and now we’re into the hustle and bustle of the Christmas season.  Christmas shopping, Christmas cards, Christmas programs for the kids (my daughter had one Sunday, another tonight, a play next Friday, and my son has a play next Thursday) and so on and so forth.  It is also time to check all our account balances and update our net worth for the month. Check out this page if you want to see the spreadsheet I use to track it and a video tutorial on how to create and update it .   This post mentions some online tools for tracking your net worth .

Our assets dropped 1.6%

Just like last month, I expected our assets to drop more than they did.  At least for that month, the rate of descent of our assets has slowed.  The biggest mover was my stock options which have dropped another 14.5%.  Since August, they have dropped a total of 85%!  (wow, that’s a lot).  The other accounts, even those with stock market exposure, did not drop a tremendous amount.   Our retirement accounts only dropped 2.3% and our taxable investments dropped less than one half of a percent (How crazy is that losing 2.3% of your retirement account value in one month is not that bad anymore!?!).  In fact, my daughter’s 529b plan actually increased almost 4%!  It was a tepid month for all accounts, I think, as even our liquid accounts, which were increasing over the past few month, only grew by a little over 1%.

Our liabilities decreased by 0.5%

Our liabilities dropped the typical monthly rate of about 0.5%.  I’d love to get rid of that mortgage payment…but the principal balance is so high that I can’t foresee doing anything about it in the near future.  I’m still thinking about it though.  Usually I would say every little bit helps, but when throwing a little extra cash at it each month wouldn’t reduce the length of the loan significantly, is it really worth it?

Our net worth decreased approximately 3.6%.

Well, we’ve experienced another drop in net worth this month (that’s starting to become a habit).  At least the downward rate has decreased again this month (last month it was a 4.5% drop)  Most of this is out of my control still (stock market losses and house valuation declines), so I try to focus on what I can control, which is mainly the liquid savings and liabilities.  So, since our liquid savings were up slightly and our liabilities were down slightly, that’s good news from my perspective.  Of course, Christmas brings with it a lot of extra expenses (gifts, travel, food, etc) so it will be interesting to see how we end up 2008 (of course, if you use a credit card for some expenses, then you don’t really get hit until January)

Merry Christmas!!

Site Statistics: November 2008

December 11, 2008 · Filed Under Random · 8 Comments 

Well, things have pretty much settled back down this month.  I am not getting the traffic that I was back in August/September.  I am still getting visitors, however, and for that I am quite thankful!

It has been a struggle lately to keep my head above water on this site.  I have dropped down from five posts a week to three in the hopes of getting back on track.  Alas, I am still quite busy with other projects (that make more $ than blogging currently does) and family life and still haven’t been able to get ahead on this.  I will keep trying…maybe next month!!

One exciting thing for BFN is that I am tantalizingly close to hitting 100 RSS subscribers!  It jumps around from day to day but I am hoping it will stabilize above 100.  Then I can put one of those feedburner dealies that show how many subscribers you currently have (I’ve decided to not post one until I hit triple digits).

Again, I’d like to give a big "thank you" to all of those in the blogosphere that have been referring traffic my way.  I appreciate it greatly.  Hopefully I am sending traffic back your way as well.

My top 10 referrers (is that a word?) this month:

  1. Bible Money Matters
  2. ChristianPF
  3. Gather Little By Little
  4. FinansAdrian – Mot rikedom (It’s good he reads English because I surely can’t read Swedish – and I’m not even sure it’s Swedish)
  5. The Passive Dad
  6. Spilling Buckets
  7. Engineer a Debt Free Life
  8. Free Money Finance
  9. One Caveman’s Financial Journey
  10. The Apostle of the Turtle

Top 10 posts for the month:

  1. Warren Buffet’s 10 Ways to Get Rich
  2. 45 Ways to Earn Some Extra Money
  3. Preparing for Black Friday via
  4. Making Money Spotlight: Using CashCrate to Earn Some Extra Money
  5. Biblical Financial Lesson from the Book of Acts
  6. The Bible and The Bard Agree on this Financial Principle
  7. Politics: An Historic Result
  8. Is Giving Really that Important?
  9. Where’s My Bailout?!?!
  10. The Lesser of Two Evils: Determining Which Loan to Pay off First

Interestingly, most of the most popular posts this month were written months ago.  Numbers 1, 2, 4, 5, and 8 are showing great staying power, I guess.  Now I just have to focus on knocking them down with better posts…

Amidst the preparations for Christmas and the holidays that mark the end of the year and kick off the beginning of 2009, I hope that you are able to enjoy the last few weeks of 2008.

God bless…

Some Cost-Savings Tips for Christmas Gifts

December 9, 2008 · Filed Under Frugality · 3 Comments 

Everybody likes getting gifts, and most people like giving them as well (c’mon, admit it, don’t you love it when you have that perfect gift for someone…for me, it doesn’t happen too often but when I have that awesome gift, I’m practically more excited for them to open it then they are!)  Of course, buying gifts for the people you care about takes time and money, both of which are finite resources.  The best way to allocate your time is to get started Christmas shopping early.  Funny, starting early the best way to get good gifts without spending a ton of money as well…but it’s way too late for that now!  A good way to have the money for your Christmas gifts is to set a budget and save up for it throughout the year (but it’s way too late for that now too!)  Ok, so maybe you didn’t do that this year (we did…sorta – we started saving in September after paying off my wife’s student loans).  If you did not, make sure you set it up for next year (heck, go ahead and do it now even if you don’t schedule your automatic transfers to start until January or February).

Now, if you don’t have a big stash of cash saved up for gifts, I’d like to suggest some ways to show you  care for your friends and family without going into debt.

1. Do a Gift Exchange

Instead of everyone in your family buying for everyone else, pick names and have each person buy gift(s) for only one other person.  We’ve done this on my wife’s side of the family for a few years and I think it really works out well.  Instead of having to stress over the time, effort, and money to buy everyone gifts, you can focus your time and money on getting a really good gift for one person.  As a result, each person gets some good gifts and everyone saves money.

2. Make a game out of it

On my side of the family, we’ve done a "gift game" for a number of years.  The basic idea is that each person brings a gift to put into the game (when we do it, each family contributes three gifts).  There are variations to how it is played, of course.  My mom usually hands out a number of little slips of paper with different numbers on them and then draws numbers from a hat (bingo style!).  When your number is called, you can pick a gift from the pile or take one from someone else.  When you are out of numbers, the gift you have is the one you keep.  It is not as personal as doing a gift exchange, but it is a way to save money and have a little fun.

3. Do an ornament exchange or card exchange or <insert item here> exchange

Instead of gifts, decide beforehand that everyone will be exchanging some item like ornaments.  You can then try to find some meaningful ornaments for each other.  Everyone saves some money while at the same time getting a gift that adds to their Christmas decorations.  Maybe the ornament idea wouldn’t work very well if you have a uniformly decorated like my parents.  (My parents literally took home the display model tree with the lights and ornaments already on it – man, talk about convenience setting it up each year!).  If not, try to get each other some really cool Christmas cards.  You should be able to get some really fancy cards without spending as much money as on small gifts.

3b. A Photo-Exchange

My wife’s family also does a photo exchange with their extended family (My wife’s maternal aunts, uncles, and cousins).  Someone agrees to be the point-person and buys (and maybe decorates) small albums that are provided to each family.  We typically get the really inexpensive albums where you just slide the pictures into the plastic sleeves.  Everyone then sends out a picture of each person in his/her immediate family to everyone else in the family.  I think this is a really neat and inexpensive way to keep up to date with the extended family.  We’ve done it for a few years now and it is fun to look back at some of the earliest pictures.  (As a side note, my 19-month old loves grabbing the albums and sitting down on her little chair and paging through them.  It is hilarious to see even though, as you might imagine, she has destroyed most of the albums).

4. Create Homemade gifts

A great way to give unique, useful and/or enjoyable gifts that show people you care about them without spending a ton of money is to create your gifts.  Food is always a good bet: create a pancake mix kit, roast up some almonds, bake some cookies (always a big hit), cupcakes, or brownies, make some buckeyes (yummy – if you don’t know what a buckeye is, you gotta find out – I was turned on to them by my wife when we first started dating.  She’s from Ohio, so I’m sure they’re called something else in other parts of the country/world). 

You’re only limited by your imagination here.  Be creative and make it fun – you’ll save money while simultaneously creating an out-of-the-ordinary gift. This can be extend to all kinds of areas beyond just food.  Create small gift baskets of lotions, bath salts  (not sure what that is…my wife gave me the suggestion), etc.  Create a small personalized picture album.  Buy a plain photo frame and paint it or decorate it.  Again, the options are endless!

5. Save on shipping

I like buying gifts even though I don’t like spending lots and lots of money.  I do, however, get really annoyed at having to pay exorbitant shipping fees to get the gifts to out of town friends/relatives.  (I’m spending almost as much on shipping as I did on the gift – what a waste!)  So, if you do end up buying gifts for people out of town, here are some tips for saving money on shipping.

Take advantage of free shipping offers

Obviously, there are numerous retailers that will provide free shipping on certain orders.  This is a great place to start…but don’t get carried away.  Remember that the point of this exercise is to save money…it doesn’t help to get free shipping if you have to buy more than you wanted to or if the cost of the item is more expensive than getting it somewhere else even if you do have to pay shipping.  Check out sites like to see the different retailers that offer free shipping deals.  ChristianPF provides some other tips on saving money while doing your Christmas shopping .

Shop and ship early to avoid crazy shipping costs

Another obvious way to save money is to shop early and use lower cost shipping options.  So, that means, get out there and get your shopping done…today!  It is getting late, but you still have some time, depending on where you are shipping, to ship your packages at lower rates.  If you wait too long, you will be shocked by how expensive it will be to ship your packages 2-day air of (gasp!) overnight!

How about a gift-buying exchange

Instead of buying presents and shipping them to a friend while he/she buys gifts and ships them to your family, try a gift-buying exchange.  Decide what you want to get for your friend’s family while he/she (he/she is so onerous….let’s just pick "she" for this section) decides what to get for yours.  Then exchange lists and you do her shopping and wrapping while she does yours.  My wife has done this a bit in her family and it certainly saves on shipping.  If you choose to do this, be considerate.  Don’t just tell them to "buy something nice."  Instead, tell them exactly what you want to buy and where to find it.  Of course, it isn’t much fun to say, "go buy yourself a new sweater."  So, still shop and ship your friend’s gift but exchanging the purchasing for everyone else in your respective families should save a bunch of money in shipping costs.

6. Skip the gifts and apply the money to a reunion later in the year

For those families that can’t be together but would like to be together, you could try skipping the gifts (or cutting down on them) and agreeing to save that money to create a vacation where you can get together later in the year.  Maybe not as fun at Christmas time…but I’m sure that a vacation together would be even more fun that opening some gifts from far-off friends at Christmas.  Memories make really good gifts.

Hopefully this post has provided some good ideas or inspired you to create your own.  If you have some great ideas, please share with us!

Here are some more tips on this topic from ChristianPF and BibleMoneyMatters and some tips for being prepared for next year from Gather Little By Little .

Photo Credits: futureshape and Pink Sherbet Photography
and jlz

A Twist on the Traditional Christmas Present

December 5, 2008 · Filed Under Random · 3 Comments 

This is such a busy and hectic time of the year as we prepare to wrap up 2008.  In the midst of the Christmas season, there are so many things going on.  One of the more time-consuming (and money-consuming) tasks is, of course, gift shopping. Since our young kids started preschool a few years back, their teachers have been added to our list of people for whom we’re buying gifts.

Giving homemade gifts

In the past, we’ve tried making our own gifts for them to make them a bit more personal and to keep the cost down.  One year, for instance, my wife found a great recipe for wholegrain pancakes.  She then bought some decorative glass containers and layered the ingredients in them and attached a copy of the recipe.  I thought it was a pretty neat idea and it was a little more personal than buying a trinket plus it was less expensive.  The trade-off, of course, was that it took much more time to prepare.

Who doesn’t want to get a goat for Christmas?

For the last few years, we’ve taken an entirely different approach for these gifts.  We have started buying more "useful" gifts for them like goats, chickens, sheep, blankets, etc (You should see the look on their faces when they see the goat!).  Ok, so obviously we don’t actually give any of the animals to the teachers.  We purchase them in the teachers’ names to be given to needy people in various parts of the world.  The organizations provide gift cards to give to the recipients that inform them a bit about the organization and what was purchased in their name and what benefits it will provide.

There are a number of organizations that utilize these "gift catalogs" to make giving donations more real and tangible.  For the past few years, we have been buying these gifts through World Vision’s Christmas gift catalog .  We have sponsored a child through World Vision for a number of years, so it was natural for us to buy these gifts through them.  Gospel for Asia also produces a gift catalog with the same idea in mind.

Do you think your teacher would like a water buffalo?

We usually allow the kids to pick out what they want to give each of their teachers so it’s a little bit of fun for them too. I actually find it quite interesting to see what they pick ("And why do you want to get a llama in Mrs. X’s name?").  There are other gift options as well.  Beyond animals, for instance, World Vision has categories for food, shelter, HIV prevention and AIDS care, health care, education, and others.

Of course, these gifts are much, much more expensive than creating homemade gifts or even giving "normal" gifts.  So, though these take a lot less time to purchase, you will probable end up spending more money.  We feel it is worth the extra money for a few reasons, however.  I really feel that it is a more meaningful gift for the recipients. In fact, we have gotten very good feedback from all of the teachers to which we’ve given such gifts.  Maybe I am being naive, but how many mugs does a teacher need to get each year?

What other gift can do as much good for someone who needs it?

Also, I believe this is certainly one of the most useful gifts you can give. You are directly impacting a family’s life somewhere in the world by providing the ability for someone to feed his/her family and earn some money for other expenses and also, if you use one of the Christian organizations, to hear about the gospel and the love of Jesus Christ.  They also open up your children’s eyes to the great need that exists in our world and ways that they can start being generous to others.

So, yes, these gifts are more expensive.  At the same time, I do feel that they are great gifts to give in honor of someone.  They are meaningful and beneficial for a number of reasons.  I encourage you to take a look at the catalogs and to read about the impact these organizations have on the lives of people in need around the world.

Photo Credits: RBerteig

Should I Stop Investing Since the Market is Down?

December 3, 2008 · Filed Under Investing · 7 Comments 

Well, the market keeps going down and I keep trying to scrounge up more money to put into it.  That’s pretty stupid, right?  If you read CNN Money or other sites, it seems that most of the questions asked of their financial experts revolve around "should I throw in the towel and finally pull my money out of stocks and mutual funds?" or "should I stop putting new money into mutual funds until the market stabilizes?"  It seems that lots of people finally get fed up in a down market and sell so they don’t lose any more and then they buy after they are comfortable the market is going up again (hopefully not when it is higher than it was when they sold).

It’s just common-sense….right?

It is just commonsense to stop buying more stocks and mutual funds while the price is falling, right?  right?  Well, I know it’s a bit different, but why do people get up in the middle of the night and fight the crowds to buy a big HDTV on Black Friday – because the prices are higher or because they are drastically reduced?

Of course, we buy most items when they are on sale…so why do we not want to do the same with the stock market?  Have you ever heard someone say, "hey Bob, did you see that the prices of computers have been going through the roof lately, I’m gonna go buy me one!"  I’m sure, however, that you’ve had someone tell you that they weren’t going to buy any more stocks until they started going up in price again (or worse yet – they buy gold when it hits a 20-year high!).

Obviously, it would be awesome if you could easily time the market and know when the peaks and valleys were so you could sell at every peak and buy back at the bottom…but let’s assume we all live in reality for the rest of this post.

Buying things for less money is good

Since the stock market has dropped A LOT in the last year or so, the prices of mutual funds are much cheaper than they were.  If you do not believe this is the end-times, then you probably assume the market will recover at some point.  In that case, this is actually a great time to invest more in the market.  Sure, it will probably go down more, but you’re still buying shares "on-sale."  So, when is the best time to invest?  As soon as possible.  Don’t try to time the market or wait for the perfect time, stocks prices are down so just start some regular investing.

Dollar Cost Averaging

The easiest way to invest money (assuming you can’t time the market perfectly and you probably can’t), and probably the most common, is to employ an investing technique called dollar cost averaging.  Employing DCA is quite simple, you just invest a certain amount money at set intervals.  If you are setup to have money automatically invested into your 401k each pay period, then you are already employing DCA.  Most mutual fund companies or brokerage companies make it easy to sign-up to have money automatically taken from your banking account and invested regularly.  I personally feel this is a very simple and effective way to carry out your long-term investing strategy.

The effects of Dollar Cost Averaging in various markets

I think it’s common perception that you make the most money when the market goes up.   But I’d like to look at some basic scenarios to see the effect of dollar cost averaging under different circumstances.  Let’s take a look at these scenarios:

1. The market is flat
2. The market goes down and back up to original level

This will be a very simple example to simply give you a feel for the numbers.  I won’t be including dividends or anything like that.  Let’s say that for 12 months you invest $100 each month.

Scenario #1: The market is flat with no fluctuation

This one is easy, you invest $100 each month and the mutual fund doesn’t budge.  At the end of the year, you’ve invested $1200 and the total value of the shares you purchased is $1200.

Scenario #2: The market goes down and returns to its original level

Let’s say that the value of the mutual fund you are purchasing drops each month for six months and then increases and ends up at the same original cost of $50 per share at the end of the year.

Month Price Shares purchased
1 $50.00 2.00
2 $49.50 2.02
3 $49.00 2.04
4 $48.50 2.06
5 $48.00 2.08
6 $47.50 2.11
7 $47.50 2.11
8 $48.00 2.08
9 $48.50 2.06
10 $49.00 2.04
11 $49.50 2.02
12 $50.00 2.00

$1200 invested
24.62 shares purchased
Total value: $1231.15

As a general rule, going up is good and going down is bad, right?  I actually find it quite interesting to see these numbers and how it is possible to make money by dollar cost averaging through a down market that eventually rises again.  Even if the market only gets back to its original level, that is certainly not the same as investing in a completely flat market.  Both of these scenarios end with a mutual fund share price of $50, but we actually make an extra 2.5% because we continued to invest when the market was down.  Extrapolating this, I can even devise a scenario where you can make more money in a down and back up market than than you can in a market that just goes up.

Applying this to the current market

For a person with the money to dollar cost average and a number of years before needing the money, the best thing that can happen for your long term investing success is what is happening right now: an extended and drastic drop in stock prices.  As the market goes down and stays down, the same amount of money now purchases significantly more shares.  The farther the market drops, the more shares you are purchasing each period (think of how many more shares you are buying with each DCA purchase compared to a year or so ago).  Of course, this assumes that the market will eventually recover and start going back up…if it does, I think you will be glad that you continued to invest money when the market is down as it is now.

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