1. I worry that the CEO will somehow think negatively.
2. Will the CEO even bother to read the letter at all?
3. How do I send the letter to the CEO, anyway?
4. Should the letter be addressed to the CEO or the boss?

Admittedly, these aren’t really issues but rather excuses. I’m trying to gather the courage to send the letter to the CEO on Monday (mind you, it took me a week to send it to the boss and the boss’ boss, a week after the letter, itself, was finished). I’ll let you know whether I did it or wimped out.

The other question is what the employee’s boss — let’s call her Ms. Manager — thinks about the letter. You see, Ms. Manager and I aren’t exactly on the best of terms. I mean, not personally or anything, but I have a problem with another employee who works under her (who she thinks is seriously the best employee ever). I’m worried that Ms. Manager will think the letter is a veiled knock at the other employee instead of a genuine praise of the employee who helped me. On the other hand, maybe I’m just being paranoid.

The other suggestion given in the book is to always be positive. Many books suggest the same thing, as well. But I haven’t done very well over the week in being positive. It’s really easy to sink into complaints and negativity! I had considered donating a dollar to an organization I hate as one way of motivating myself to not complain, but that didn’t work at all. (There might be a thing or two to be said about motivating myself to be positive under a threat.)

I don’t know how to keep myself positive in a workplace that is very negative.

Any suggestions?

The following spending report includes all spending outside of my mortgage, HOA dues, and property tax payments. Since they are fixed and there’s nothing I can do to lower them, I don’t see the point in tracking them.

I thought I did very well in June to curb my spending in unnecessary categories, and I didn’t do too badly. $458.40 looks like a really bad number and I freaked out when I first saw the number, but after calming down a little I realized that if I take out the charity contribution and all the bills (electricity, natural gas, $10 in sites, sports, and car gas), I only spent $84 total. I even managed to spend only $10 in books (splurge addiction of mine). The grocery and airport spending were unavoidable, so overall, I did well. I could have gone without the $11 in library fees and the $2 in music, but the theater spending was budgeted for (at $30, so I did go $2.50 over budget).

What you don’t see in the spending report is huge amounts (or, indeed, any dollars) going towards eating out (my other vice) and vending machines. I am on a self-imposed restaurant-free diet (for financial reasons), and I’ve managed to get through 30 days without a single failure!

The book starts with a woman, Katie, whose husband suddenly wants to leave her. They go through a divorce, and the husband ends up marrying another woman she knows and moving to Italy. Saddled with a mortgage, children, and no child support payments, Katie becomes snappish, rude, and destructive at work, causing her to be passed over for a promised promotion and put on probation.

The rest of the book is about how Katie turns her life around with the help of Dr. Allen.

The book can be summed up by the three steps that Dr. Allen tells Katie to follow:

1. Win them over: care about your coworkers and those who work under you and, well, everyone else you meet. If they want to tell you about their kid’s soccer game (and, let’s face it, most of us have been in a conversation like that), give them your undivided attention all the same. When people think you care about them, they will care about you, too.

2. Blow them away: reward extraordinary work. When somebody goes the extra mile, make sure you recognize that so that they will want to do it again and again. In the book, a woman from another department stays up late to finish a report for Katie, and Dr. Allen suggests that Katie write a letter to the woman’s boss and the CEO. The authors talk about the so-called “Multiplier Effect,” which is basically where people you recognized will talk to other people and improve overall productivity.

3. Keep them revved: do #1 and #2 consistently. The authors correctly point out that people hate feeling used. Therefore, don’t suck up to them only when you need something to be done and ignore them for the rest of the time. Maintain a positive relationship with everyone all the time.

Conclusion

It was a fast read, and the three steps outlined in the book are easy to implement. I’m skeptical about the steps working as fast as suggested in the book (within one month, for example, Katie is promoted to the Director of Human Resources), but I suppose it’s possible. I’m not in a supervisory role at work, but I think I’ll try them out at work for the next three to four weeks to see what happens.

What about you?

I read this book a couple of days ago. Most of the advice in this book can easily be found distilled in various blog posts on the Internet and in numerous other finance books, but the book is small, the writing is clear, and steps are easy to follow.

Your retirement is more important than your daughter’s prom dress

What I remember the most from the book is the author’s insistence on never sacrificing your needs for other people’s wants, no matter who those people are. According to the author, women are especially bad at this. The author’s example involved a grandmother who was disappointed with her (good for nothing) son; however, she wasn’t willing to let her grandchildren suffer and so she let them rob her of her retirement.

The author brings up an excellent point: what would you do if you found out that somebody were stealing the social security payments of a sixty-year-old lady to puchase motorbikes and concert tickets? Wouldn’t you agree that he or she was disgusting and moral-less? Yet, many people allow their family to do exactly that. What kind of lessons are you teaching your children if you give preference to their $1000 prom dress instead of your retirement?

Seeing your savings grow

An interesting advice given by the author is purchasing silver when you’re starting out. The reason for this might surprise you: buying silver allows you to watch your net worth grow, which provides powerful psychological boost. To many people, it’s much harder to visualize $10,000 in a bank account than a jar full of silver coins. Of course, silver also provides the added benefit of not being easily spendable, unlike $3,000 in your emergency fund, which is just one to two clicks away.

The Lessons

If you have even passing understanding of personal finances, you can get 90% of the book’s value by simply reading the table of contents:

Lesson 1: Decide to be wealthy

In which Mr. Evans tells you to commit to a goal. Crystal-clear goals are easily the most important first step in any accomplishment, including financial freedom.

Lesson 2: Take responsibility for your money

In which Mr. Evans talks about budgeting: how much money do you have right now (starting position), what are your sources of income (the more the better), where is the money going (minimize this, of course), and, finally, how much of your money is working for you (as opposed to other people)?

Lesson 3: Keep a portion of everything you earn

In which Mr. Evans tells you to save some portion of everything you earn, no matter how little you earn. Habits are built over time. Everybody can and should save what they can. If you are making $30K a year, you might not be able to save $1K a month but can you save $100? $50? $25?

Lesson 4: Win in the margins

There are two main ideas presented in this lesson: earn more and spend less, and altering your mindset to value financial freedom over materialism. Mr. Evans also stresses the importance of protecting your nest egg through good insurance.

Lesson 5: Giving back

The more you give, the more you get back.

Overall, I liked the book. It was fun to read and presented some material in a new way.

The legislation bars landlords from increasing rent above 33% of a tenant’s income and allows tenants to add roommates other than family members to help pay rent, even if their leases forbid it. The laws also limit banked-rent increases, in which allowed annual rent increases are saved up and imposed all at once.

What do I think about this? Well, setting aside the obviously concerning move by the government to further encroach the free market, how can anyone think that this is a good thing? According to the article, 88% of the units are already subject to rent control and, according to My Money Blog, rent increases are capped at 2% per year (which is less than inflation, so the landlords are already losing money each year), and now they want to add further restrictions? How is this even remotely fair?

If this law does end up getting passed, I wonder what the motivation would be to continue owning property in San Francisco. As we saw, we can’t count on property appreciation. The general wisdom in rental properties seems to be that cash flow is king. It seems to me that if this new set of laws are passed, it makes owning rental properties a lot less enticing.

Many property owners oppose the legislation because they say it will put added strain on landlords, who are already struggling with higher costs and vacancy rates. Landlords may be forced to stall building repairs and cut amenities for renters, said Janan New, executive director of the San Francisco Apartments Assn.

What am I missing?

Highlights

1. Cash went down because I moved another $3000 into brokerage account. I don’t know whether this was a good move or not, since I now have less than 3 months of funds in my emergency fund, but I’m fairly young, in a reasonably safe job, with no fixed expenses other than housing bills, and I’m pretty sure my family will bail me out if needed.

2. My Exxon Mobil DRIP finally went up. It was only a dollar, but it was in the right direction.

3. Most of the increase in the brokerage account came from the emergency fund. I invested the funds in the Vanguard Dividend Growth fund, however. Was this a bad or good move? Should I be holding non-dividend funds in taxable accounts to take advantage of the 15% tax rate?

4. Lending Club charged me a “lending fee” of 1¢. What is this fee and why did they charge me? I don’t know yet. I’m still investigating.

5. My 401K balance reflects only one half of contribution for June. My second half doesn’t seem to have made it in yet, so this isn’t accurate. Hopefully, I will be able to show a corresponding increase in July.

6. I wasn’t able to contribute anything to my Roth IRA, I’m afraid, because I’ve been using all discretionary funds to pay off my 0% credit card before rate expires. I am still planning on maxing out this account before April.

7. I’m proud of the balance on my daily use card — how small it is, that is. I feel like I did very well in the month of June, but I’ll need to do a full analysis before I can tell for sure. In a future post, I think.

8. Balance on the 0% APR card keeps going down steadily. At this rate, I will have to dip into my emergency fund in September. Cry.

Overall, the month went well. I’m still on track for my year-end goal of $85,000. To make it, I will have to save just $1865 a month. Since I usually save almost double the amount in a typical month (during which the stock market doesn’t take a nose dive), maybe it’s time to revisit the goal.

Net Worth Progress

Not much to say, other than that it’s inching in the right direction.

I also started an automatic monthly contribution to her 529 plan. I started at $25/month thinking I just wanted to get the regular contributions started. However the more I think about it, right now seems like the best time to make more serious contributions. Her expenses will only go up as she gets older so I doubled our monthly contribution to $50/month. I think that puts us in a manageable position going forward. If our monthly cash flow improves over time we will up the contribution more.

This made me rethink of the benefit of starting early. Suppose that you can only afford $25 a month. Just how much can you help your kid? Assuming you have a baby at 30 and get a 10% interest rate in your tax-advantaged 529 account:

You start when baby is born: $25 a month for 18 years = $15,047.73 (contribution = $5,400)

You start 5 years earlier at age 25: $25 a month for 20 years = $18,900.75 (contribution = $6,000)

You start 10 years earlier at age 20: $25 a month for 25 years = $32,454.53 (contribution = $7,500)

You start 15 years earlier at age 15: $25 a month for 30 years = $54,283.03 (contribution = $9,000)

$25 a month is probably affordable even by a 15-year-old, but even if you start at age 20, you will have over $30,000 by the time your kid is ready for college. Look, too, at how your account’s balance exponentially even while your contributions rise linearly.

The point is: compound interest favors time. You don’t need to be able to set aside $1000 a month. Even $25 a month will pay real dividends if you save consistently.

I discovered this 8 months ago.

So why didn’t I take advantage of it immediately?

1. Fear of the unknown

I worry that I missed something and will end up losing a ton of money.

2. It means extra work

To setup a brokerage account in my 401K requires that I do extra work. I have to fill out various forms, send them in, call the managing company, and other things. My mind vaguely feels that what I’ll save is somehow not worth all the work.

3. Nobody else does it

As far as I know, nobody else is taking advantage of the brokerage option, not even some of the even more financially-obsessed people within my team. This must mean that there is something wrong with it, right?

4. There’s an extra annual fee

It’s ridiculously low, but I’m not paying it right now.

5. For the financially-savvy

The self-directed brokerage account is obviously for the financially-savvy, and while I’m obsessed with finances, I don’t consider myself an expert. Of course, I am just going to invest into Vanguard index funds, so how much knowledge do I really need?

Anyway, after enumerating all the excuses, I decided that none of them were reasonable. I put in the request for the forms to open the brokerage account and will be signing up for it as soon as I get the mail.

Have you ever known that something is good for you but procrastinated on it anyway?

Before I get to the article: what irks me about the ideas being spouted about “forced savings” through the government is that the government and media seem to act as if social security doesn’t exist. Almost everybody saves around 12% of their salary for social security (half from employees and half from the employers). If my salary didn’t change for the next 40 years and I earned no interest whatsoever, I would still have over $300,000 in my account. At 3% interest, I’ll have almost $600,000. At 10% interest, I’ll have over $3.5 million ($1.2 million after 4% inflation).

Does the government/media really want to tell me that I’ll be paid over $600K by social security? Considering the way it’s going currently, I’ll get paid far less than what retirees are getting paid today!

Anyway, rant over. Let’s get to the article.

It’s no surprise that it is difficult for Americans to save for retirement. Only roughly half the population even has any sort of retirement plan. One of the new proposals to get workers to save is an automatic IRA. Under this plan, as proposed in President Obama’s 2010 government budget, most employers that don’t already offer a retirement plan would be required to enroll their workers in a direct-deposit IRA. Employees could opt out if they choose. The existing saver’s tax credit would also be modified to provide a 50 percent match on the first $1,000 of retirement savings for families that earn less than $65,000 and be fully refundable.

I highlighted the key parts. I actually like this idea. Most people (in my possibly uneducated opinion) are lazy; they are far more likely to save if they are auto-enrolled in a retirement plan than if they have to do the initial work themselves. So, this isn’t so much a forced plan: we aren’t really forcing people to save, just having them save X percent of their salary by default. Many companies do it automatically.

Of all the, umm, “interesting” ideas that come out of the government, this one is actually pretty good.

My only concern is what funds are offered in these required accounts. Hopefully, there will be a good mix of low-cost stock- to- bond-only index funds. The worst thing they can do is force people to “save” into government bonds like they were suggesting earlier!

What do you think?