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ETRADE and iPhone Updates

March 13, 2009 · Filed Under Random · 2 Comments 

This must be the week for updates.  Previously, I discussed our experiences so far with our attempt at once-a-month shopping and cooking and then gave our monthly net worth update.  In this post, I’ll take a few minutes to update how everything has been going so far (including updates on my stock picking and iPhone shopping as well).

I finally bought some stocks through ETRADE

I previously disclosed my intention to purchase a pair of stocks through ETRADE .  ETRADE finally allowed me to purchase the stocks I wanted last week.  It actually worked out well for me as both stocks I purchased cost me a bit less than they would have when I first opened the account.  Again, this is not part of my long-term investing strategy as I am just using a little bit of money to speculate with these two stocks that are priced drastically lower than they were last year.  I would not be thrilled about it, but it would not cause us undue financial harm if we lost all the money we invested in these stocks (and if you’re not comfortable with that prospect in this economy, I would suggest you not buy individual stocks right now).

At the same time, this is a long-term play on my part.  I’m not looking to sell them anytime soon.  In fact, yesterday one of the stocks I purchased was up almost 40%.  I am not interested in a 40% gain on the small amount of money I invested.  I’m going to sit on them and hopefully they will return to their previous values (or close to it) which would be a 4000% gain.  Whether that takes 1 year, 3 years, or 10 years (or infinity), I’m not sure.  I am sure that I will just hold these stocks long-term and periodically check to see where they are trading.

Even after waiting an entire week, I still bought an iPhone

I put the Dave Ramsey advice of waiting overnight before making a purchase to the test last week.  In fact, I stretched it out all the way to a week.  If you remember, two weeks ago I detailed the steps that took me from being satisfied with my current mp3 player all the way to considering an iPhone .  Well, I waited an entire week and then ended up buying an iPhone anyway!  I’m actually just trying one out right now.  I’m taking advantage of the 30 day return policy to see how well it works, how much I like it, and what the cell coverage is in the areas I use it most often.

At this point, I do not see myself giving back the iPhone!  This is the first time I’ve had a cell phone that wasn’t one of the free ones you get for signing up.  I am really wowed by this thing – the phenomenal interface, the array of useful features, and all the apps (I’ve even started tweeting from my iPhone) (yeah, I’m thinking this evaluation will end a lot sooner than 30 days!).

So, waiting didn’t actually save me any money as I still opted for an expensive option but at least I can say it wasn’t an impulse buy!

If you have any recommendations for iPhone apps, please let me know!

Preparing for Black Friday via BlackFriday.GottaDeal.com

October 31, 2008 · Filed Under Random · 14 Comments 

I have to admit, for the past few years I’ve been venturing out on Black Friday to check out the sales.  This all started a number of years back when we lived in Tucson.  I discovered ACE Hardware’s BF sales one year and was amazed at all the really inexpensive stuff I could get there.  I was hooked and I’ve been back to ACE most every year since.  I can usually at least pick up some useful tools for basically nothing after the mail-in rebate.  I was quite disappointed last year, however, because I think the sales were exactly the same as those from the year before.  (I’ve got my eyes on you this year, ACE Hardware!).  Since I know there are a lot of people out there who do serious shopping on Black Friday, I thought I’d share a tool I’ve been using to make planning for BF a little less hectic.

What is Black Friday?

Black Friday, which has been raised almost  to the level of a holiday in the US, is that magical day where we as Americans exhibit rampant consumerism at its height.  It got its name as the day of the year that retailers typically become profitable for the year (going from the red to the black in their accounting).  There typically are great sales on certain items, but unfortunately some people take it a little too far (see my story a few paragraphs down) either by over-spending or pushing and shoving to grab the latest toy or hot item.

Getting a head start

There are a number of websites that "leak" the ads before their official release during the week of Thanksgiving.  I usually check out BlackFriday.GottaDeal.com .  Of course, they have the ads up there but they have some other nice features as well.  I like that for most of the items they usually have links that take you to the retailer’s site to get more details on them.  Another very useful feature is the forums they host on the site.  There are usually some discussions going on about different items and techniques and various rumors floating around.  I have subscribed to their email list and they usually send an email when they post a new ad – so they’re not flooding me with emails.  I’m sure there are other valuable sites as well (for instance, Prime Time Money recently did a post on blackfriday.info ).  It’s just that I found GottaDeal’s BF site a few years back and have been using it since.

Getting carried away….

Ahhh, I remember the year I first discovered the black friday site at gottadeal.com.  I was living in North Carolina at the time and, for whatever reason, I became obsessed with Black Friday that year.  Frankly, it was quite unhealthy.  I ended up spending hours pouring over the ads and making lists of exactly what I’d go looking for.  Of course, I ended up spending quite a bit of money.  Sure, the stuff was on sale but let’s get real: buying things is still spending money, not saving it.

We had friends visiting for Thanksgiving and I ended up dragging the husband out very early Friday AM for an entire morning of shopping.  We hit Best Buy, Circuit City, Panera (needed a little break and some munchies), Radio Shack, Sears, Costco, and ACE (of course).  This is the list of stuff that I bought that day:

  • TV (ok, bought that a few days before but it still counts)
  • Surround Sound system
  • DVD Recorder (at Radio Shack which I later returned)
  • Roomba (robotic vacuum cleaner)
  • Computer Software (free after rebate)
  • DVD Recorder (liked this one better)
  • Blank DVDs and CDs
  • Miscellaneous tools (of course)

Proceed carefully!

I have reformed my ways since that year.  I still usually go out on Black Friday…still usually by myself…but not usually until a little later in the morning.  Now, however, I am more cautious about my spending.  Last year, for instance, I bought some Christmas presents that were on my list and was able to get better quality items as a result.  I feel that is really the best way to approach BF.

If you are going to venture out, don’t just buy items for the sake of "saving money." Be prepared, have a list of what you need to get as Christmas presents or whatever, find those things on sale, and stick to your list! Since there are so many sales going on during BF and the crowds are quite large, I definitely feel it is helpful to plan ahead via the ads or a "pre-release" site like gottadeal.com.  But take caution – it is very easy to get carried away as I did a few years back and start the Christmas season a lot poorer than you ended Thanksgiving!

So what about you?

Does anyone else out there shop on Black Friday?  Or do you stay away from all the stores and blatant consumerism that day?  If you do shop it, have you ever camped out the night before to snatch one of the big deals?  (I have never done that).  Do you have any interesting  BF stories?

Biblical Financial Lesson from the Book of Galatians

September 4, 2008 · Filed Under Biblical Lessons · 3 Comments 
Bible Study 2 by DrGBB

I try to read and study a chapter from my Bible each day. And since I’m doing that, I thought it would be interesting to pull out any financial principles that I come across for BFN. I just finished reading Galatians, and I found a few interesting statements that are related to how we should use our money.

Galatians is the first of Paul’s letters

The main theme of Galatians is the justification of a Christ-follower by faith alone. He is writing to the church to defend his apostolic authority as well as the gospel of Jesus Christ as he preached it. Basically, he is saying that the only way a person can be saved and make it into heaven is by faith alone in Jesus.

You said this would have something to do with finances

Yes, you are quite correct. Starting in verse 6 of chapter 6, we see the following passages:

Anyone who receives instruction in the word must share all good things with his instructor. Do not be deceived: God cannot be mocked. A man reaps what he sows. The one who sows to please his sinful nature, from that nature will reap destruction; the one who sows to please the Spirit, from the Spirit will reap eternal life. Let us not become weary in doing good, for at the proper time we will reap a harvest if we do not give up. Therefore, as we have opportunity, let us do good to all people, especially to those who belong to the family of believers. Galatians 6:6-10 (NIV)

Your pastor should be fairly compensated

Paul starts this passage by mentioning the believer’s responsibility to share financially (and in other ways as well, but I’m focusing on the finances here) with his/her teacher. By providing for his financial needs, a church frees its pastor to focus on the teaching and leading instead of working through my 45 ways to earn some extra money! Just like any job, that person working should be compensated for his/her efforts.

You reap what you sow

Paul also encourages us to sow our financial resources into the kingdom of God. In other words, if you use your resources for God and His kingdom, you will gain benefits associated with His kingdom. On the other hand, if you use your resources selfishly to indulge your self only, this will lead you down a bad path.

I do not think this means you can buy eternal life by sowing "to please the Spirit." We tend to put our money into the things that we care most about. So, sowing our money into selfish desires does not directly lead us to destruction, rather it just shows that we are already headed down that path. Similarly, directing finances towards the church does not earn us eternal life but is a tangible expression of the fact that we already understand the importance of God in our lives.

Remember to do good to all people

Finally, we are reminded to help out others as the opportunity arises and to truly view it as an opportunity. Helping others should not be seen as a burden; there are benefits (both immediate and eternal) to the one doing the helping. (I think this is an awesome way to look at this)

Two parting questions (and I’ll answer one for you!)

Take a look at where you are spending your money – where you are sowing. Are the places it is going a good representation of you as a person? Let me answer that question for you – it is a very accurate representation. The real question is, "are you satisfied with what your money is saying about you?"

photo credit: DrGBB

A Look in the Mirror: Are You a Borrower, a Consumer, or a Keeper

September 3, 2008 · Filed Under Finances, PF Basics · 3 Comments 

I am (slowly) working through my Personal Finance Basics , going into more details on each step.  It is time for the discussion on #3: Spend less than you earn .  I’m going to focus over the next few days on some techniques for budgeting (I’ve tried a bunch over the years).  Today I want to step back and take a broad look at the topic.  I think the importance of this aspect of your financial plan is illustrated well in the excellent book, The Bogleheads’ Guide to Investing .  This book leads off with a story illustrating three common financial lifestyles lived by three fictitious couples: The Borrowers, The Consumers, and The Keepers.  I think this paints a great picture of the contrast among these common lifestyles.

The Borrowers

image by David Boyle in DC

The Borrowers are living the high life.  They have the best of everything – expensive cars, high-end clothing, a huge McMansion, and so on.  They have numerous credit cards and they are not afraid to use them.  When the balances on the cards become too high, its time for a cash-out refinance or home equity loan to clear the credit cards and start all over.  Leased cars, no money down interest-only adjustable rate mortgages, and minimum monthly payments typify the Borrowers as they lead their life of luxury.

The only problem is that they are nowhere near able to afford their lifestyle.  Forget about retirement, they will be working until the day they die.  They are a job loss or a prolonged illness away from losing everything to the bank and their numerous creditors.  In Texas, the term for this is "big hat, no cattle."  (I find it strange that I’ve read a few different personal finance books that use that term)

The Consumers

The Consumers, in contrast to the Borrowers, do not live life restricted only by the limit of their credit cards.  Instead, they live life restricted only by their take home pay.  The question they ask themselves when investigating a major purchase is, "Can we afford the monthly payments?"  Interest rates and the length of the loan do not matter, if they can wedge the affordable payments into their monthly budget, then what’s the big deal?

Photo by donandcarol

Again, this is an unsustainable lifestyle in the long-term.  If their take home pay drops for whatever reason, the low monthly payments quickly become huge.  Retirement will not be the dream of a huge RV, traveling the country, and golf courses.  Instead, it will be a very restricted one governed by the check received from the government each month (assuming that is still going on by the time they are no longer able to work).

The Keepers

The authors contrast the first two lifestyles with the Keepers.  The Keepers live according to a net worth mindset as opposed to the credit card mentality or paycheck mentality.  They are concerned more with their net worth than their net income.  The first thing they do with their money each month is to save some.  They avoid debt as much as possible (certainly no high credit card rates as they pay off the balance each month) and participate in  tax-advantaged retirement accounts.

While they make no more money than the Borrowers or the Consumers, they are much more likely to achieve their long-term financial goals (partly because they actually have long-term financial goals other than buying the latest and greatest stuff).  While this lifestyle may not sound as exciting as the first two, it certainly sounds a lot less stressful to me.  Plus, I like the idea of being able to stop working 40+ hours a week to devote my energies to other pursuits at some point before I die.

There are numerous other lifestyles

Of course, these are three very broad generalizations.  In real life, there would be more lifestyles too numerous to detail.  I think that we all know people that fall into these three categories though.  Obviously, the book portrays the Keepers as the best lifestyle (the chapter in which this is found is called "Choose a Sound Financial Lifestyle" after all) and I would guess most of us (at least those reading personal finance blogs) would tend to want to live as the Keepers do.

So which type are you?

I do think my lifestyle matches up most with the Keepers.  I track my net worth monthly (oh, time to do another update in a few days).  We do use credit cards but pay them off each month.  I don’t care anything about monthly payments – when I buy a car I negotiate on the price, not the payment.  I should take more advantage of tax deferred investing options, however, as neither my wife nor I max-out our 401ks.

Some people, however, would certainly say that we are not living life to the fullest.  They would claim that we should spend more of our money to enjoy today instead of worrying so much about saving for tomorrow.  That is probably a valid point to some extent, but for me, I think the stress of not feeling like I was being a good steward of my financial blessings would outweigh any short-term benefit.  Though I probably do lean too far towards the "hoarding" side of things and that is something I’m working on.

Well, what do you think?  Do you even agree that the Keepers are the lifestyle to emulate?  If you do, do you hit the mark?

photo credits: David Boyle in DC and donandcarol

A Trip to IKEA

September 1, 2008 · Filed Under Random · 4 Comments 

Recently, I wrote about how we had finished paying off our student loans and getting out of debt except for the mortgage. It seems that ever since then, I feel like I’ve been on a big spending spree. Maybe it’s like the traditional "yo-yo" diet, where you eat hardly anything for a while and then you binge. Since I have been putting off big purchases for a while to focus on the debt, maybe now the pendulum is swinging back in the other direction.

There are some necessary things on my list (new tires, new windshield) but most of the list is filled with "wants" (wireless printer, bigger monitor, etc). I haven’t purchased many of the "wants" yet, but I have accumulated quite a list. I hadn’t, that is, until yesterday when we dropped our kids off at their grandparents, cleared everything out of the van, and headed off to IKEA with visions of flat-pack furniture and meatballs.

What is the appeal of IKEA?

I’ll be honest, I love going to IKEA (other than the part about spending lots of money each time we go). I like the look of their furniture. I like the show-room. They seem to have a number of interesting pieces that I just don’t see other places. I like looking at the funky accoutrements they sell. I generally like the price. I like the restaurant. (I do NOT like that most of the checkout lanes are self-checkout now, but that’s another story).

IKEA is not convenient for most

All of this got me thinking about IKEA and how it is a very unique experience in American culture. First, there aren’t many IKEA stores around. Most people have to drive hours to get to one. When we lived in North Carolina, we’d have to drive four hours to the in-laws house and then another 1.5 to get to IKEA, but we still did it a couple times. Americans love convenience – and driving hours and hours to buy furniture is not convenient. On top of that, there is the whole experience of having to walk through the warehouse yourself and pile up your furniture purchases (flat-packed at least) onto a cart and wheel that up to the checkout.  Again, this is not convenient – but many people still do it. On our way to IKEA, we stopped at a friend’s house. They had just had their second child and we dropped off a meal for them. There was another couple visiting and when we mentioned that we were on our way to IKEA, they said "Ooh, IKEA! We were just there two weeks ago."

IKEA doesn’t sell ultra high-end stuff that the cool people "need"

The furniture IKEA sells is decent furniture priced inexpensively. This is not like buying jewelry from Tiffany or getting your wedding gown from Vera Wang (it took me a while to come up with an example…I guess I’m not used to shopping at these places). In our culture, I can see people spending gobs of money and time to purchase the perfect, "must-have" item from really high-end boutiques (just like the one all the celebriteis have)…but I don’t think of IKEA as a high-end boutique.

So why do people go to IKEA?

Is this real life? Normal people want to buy nice furniture without drastically overpaying so they make the trek to IKEA? Do all people do this? Or just people like me (or us?) who want good value and don’t need to tell their friends, "yes, it’s from Ethan Allen." (sorry, that’s they highest-end furniture store I could think of…I guess I really need to watch more commercials on TV) Though we do it, telling people, "it’s from IKEA" doesn’t seem to have the same cachet (maybe with the value minded it does!)

Anyway, the store was packed full of people yesterday; I’ve never seen it that crowded. Of course, we shopped for hours, ate some meatballs, and spent a lot of money. (I can’t imagine how much they grossed at just that one store yesterday!)

Does anyone else out there shop at IKEA? Do you think it’s silly to drive all that way just to spend all that money? Or do you agree that it is a fun place to browse through and get some good deals?

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