Financial Samurai

The Ultimate Solution For A Fair Income Tax Policy In America

admin — Wed, 28 Jul 2010 09:00:06 +0000

With the Bush tax cuts set to expire next year, there’s going to be a big debate during the mid-term elections this November! But, should there really even be a tax debate? It’s obvious that we should NOT raise taxes on small business owners and higher income, hard working Americans in a nascent economic recovery!

Everybody knows roughly 47% of Americans pay no federal income taxes. Hence, the ultimate solution for tax legislation is to strip away tax voting rights for the 47% of Americans who pay no tax, but who still get to enjoy the benefits of other people’s contributions. If you’re one of the 100+ million Americans who pay no income tax, isn’t it good enough to enjoy free public schooling, nice roads, friendly firemen and police officers protecting your neighborhood? Being thankful is a great disposition to have. Being greedy is not.

An Example Of A Family Making $120,000 Paying No Taxes:

“Say you’re married with salary income of $120,000, 401(k) contributions of $12,000, two under-age-17 kids, and a college student with $4,000 in education expenses. Assume you also bought a home this year that qualifies for the now-defunct $6,500 credit for existing homeowners. Finally, assume you’re eligible for the $1,500 credit for energy-efficient home improvements. Believe it or not, your 2010 federal income tax bill will be zero even if you only claim the standard deduction.

Your tax bill of $11,950 is completely wiped out by $13,300 in credits ($2,000 child credit, $2,500 education credit, $6,500 home buyer credit, $1,500 credit for energy-efficient improvements, and the $800 Making Work Pay credit). In fact, you’ll get a $1,350 check from the government because some of your credits are refundable ($13,300 of credits – $11,950 of tax = $1,350 of free money),” writes Bill Bischoff of SmartMoney.

VOTING TO RAISE TAXES ON OTHERS WHEN YOU PAY NO TAXES IS LIKE……..

* Dr. Phil writing a book and telling someone to lose weight.

* Suzie Orman telling you to invest in the stock market when only 2% of her wealth is invested in equities.

* A recent college graduate teaching you how to be rich.

* A hardcore vegetarian who wears leather shoes.

* A priest who preaches acceptance but expects you to burn in hell when Armageddon comes if you don’t convert.

* The United States implementing economic sanctions against emerging countries for polluting.

* A boss who tells you to work hard but goes and plays golf every other day and takes long lunches.

* US Treasury Secretary Geithner saying raising taxes is “the right thing to do” but cheats on his own taxes.

CONCLUSION

Some may argue that voting is a fundamental right as decreed by the 15th amendment of the Constitution. I agree, go ahead and vote on whether the government should implement a flat tax on those who pay nothing. It’s only fair. Just don’t go around pretending as a non tax payer, you have the right to vote on persecuting others to pay for your own free government benefits.

It’s so obvious to any rational person that if you pay no taxes, you can’t possibly be able to vote for people whose agenda it is to raise taxes on others. Yet, millions of non tax paying Americans continue to support tax increases for the rich, who may very well be the ones who help keep the millions who don’t pay taxes employed!

Friendly Americans who pay no taxes, please have a heart and enjoy your spoils and stop punishing others further. For the 53% of Americans who do pay taxes, let us decide what is the right level of income taxation to help support the economy and you guys. We might vote to raise our own taxes and dis-incentivize ourselves to work hard. So be it. At least we get to vote on our own destiny! Thanks!

Readers, do you think it’s right that the 47% of Americans who pay no taxes can vote on raising taxes for others who already pay?

Why do you think the government and the people of America allow this type of double standard?

Any suggestions on how to stop the persecution of hard working Americans?

Any other examples of “voting to raise taxes on others when you pay no taxes”?

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our E-mail or RSS feed.

Why Are The Employed So Smug About The Unemployed?

admin — Mon, 26 Jul 2010 09:00:21 +0000

Hear that? That is the sound of another self righteous employed person complaining about the unemployed sucking up resources and driving the government deficit further into the red. Who cares employed people?? You guys aren’t the ones who are struggling to find a job in this economy!

There are several tautologies here:

1) Few can live a comfortable lifestyle off of unemployment benefits which average $200-3oo a week

2) The vast majority of people who are unemployed want to make more money, find jobs, and do something meaningful with their lives.

3) Our budget is headed towards a $1.4 trillion+ deficit, so who cares if we’re going to spend another $50 billion to help millions of unemployed people survive for up to 99 weeks?

THE BUDGET DEFICIT DOES NOT MATTER WHEN YOU HAVE NO JOB

The big debate over the Republicans and Democrats on the latest unemployment benefit extension is how the government will pay for the bill? The Democrats say don’t worry, it’ll come from somewhere while the Republicans say cut spending elsewhere to not add to the deficit. Whatever the case may be, the budget deficit doesn’t matter if you’re struggling to survive, and at the margin are going to cost the economy an even bigger burden? We’ll have to provide for shelters and more public safety officers when crime creeps higher as desperation kicks in.

The ramifications of a budget deficit are only theoretical. People say the government will need to raise interest rates to attract foreigner capital to fund our greedy spending. With higher rates by government, a crowding out effect occurs where efficient capital doesn’t get directed to the private sector. Meanwhile, borrowing costs for citizens increase, also choking off investments. Last I checked, the 10-year yield is close to 3%, and foreigners are happily funding us. Meanwhile, plenty of people are smartly refinancing their mortgages and saving money.

People say budget deficits are also bad for our children. How can we live with ourselves knowing that our children are the ones who are going to fund our bad spending habits? We live with it just like we live with the fact that the older generation will happily collect their social security checks, while the younger generation continues to pay without expectations of anything in return!

Once again, all this budget deficit talk is just theoretical nonsense that carries very little weight in determining whether or not we should help our fellow needy citizens or not.

THE ONLY WEIGHT ON THE EMPLOYED

A portion of our paychecks are paid for by the employer. This expense (unemployment insurance) is effectively calculated into a working person’s total compensation. If the unemployment insurance expense is 6% per anum, one can assume that if an employer didn’t have to pay this expense due to 0% unemployment, perhaps a couple percent of the 6% may lead to a higher paycheck.

So here is the thing for those who argue it’s a bad thing to spend another $50 billion bucks extending unemployment benefits. Would you rather have the Federal Government pay or pass a bill to increase the unemployment insurance paid by employers by another several percent? If you choose the latter, prepare for MORE layoffs.

CONCLUSION

It continues to perplex me how vocal some employed people are about not helping the unemployed. Unless you’ve been unemployed yourself, you have no idea what you’re talking about! When you’re unemployed for an extended period of time you start doubting your self worth. You ask yourself what’s the point of life if nobody is willing to give you a chance. You give up looking because you can’t bare another non returned phone call or e-mail. Each rejection is like a blade jabbed and then turned in the soul.

As I come to the end of this article, I realize why so many employed people are so smug about the unemployed. The reason is they are very unhappy with their jobs. They can’t stand the fact that someone is getting $1,200 a month to “do nothing” while they have to work 40 hours at their miserable jobs to only earn $3,500. Miserable people like to make other people miserable. The next time you see someone irrational complaining why helping others is a bad idea, just know that they are going through their own torment.

UPDATE 7/27/10: The more I think about it, the more I believe the reason why people are so smug is because they are insecure with their own jobs and angry about their current situation. The smug take their contempt out on the unemployed to make themselves feel superior. If you were happy with your job and made millions of dollars, don’t you think you’d be more supportive of trying to help your brothers and sisters out? I think so!

Readers, why do you think there are so many people against helping the unemployed through federal funding?

Do you have a better idea for helping lower unemployment?

If you are a smug employed person, please share with us your reasoning why you are against the extension.

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our E-mail or RSS feed.

Senior Workers Outnumber Teenage Workers For The First Time

admin — Fri, 23 Jul 2010 09:00:44 +0000

Bloomberg highlighted an interesting chart stating that for the first time ever, working seniors outnumber teens in the labor force. Currently 6.6 million people over the age of 65 are working or are looking for work compared to 5.9 million 16 to 19-year-olds. Back in 1948, the numbers were only 2.9 million people over age 65 and 4.4 million teens, respectively.

This chart has enormous implications for the American workforce as people live longer and longer. Let’s go into the reasons why there’s been a decline in teenage workers and such a rapid increase in older workers shall we?

TREND ANALYSIS

1) Longer Lifespan. A longer life ironically means more years you need to take care of yourself financially. Can you imagine if you lived until age 1,000 how many years you’d have to work to save money? Maybe a couple hundred years!

2) Information Dissemination. The Internet has allowed people to find more jobs more efficiently. There’s always been a problem with matching skill sets with company needs. As a result, seniors have found jobs where they would otherwise have never had the opportunity.

3) Boredom. Let’s face it, playing golf all day and lounging by the beach gets boring after a certain amount of time. Retirement really isn’t what it’s cut out to be, otherwise you’d see a DECLINE in the number of 65 and older workers instead of a rapid increase.

4) Quality Of Worker. If you are an employer, wouldn’t you rather hire a clear-headed person with 40 years of experience than someone with practically none? The choice is easy and teenagers are unfortunately being crowded out.

5) Too Many Distractions. It must be exciting growing up as a teenager nowadays. The amount of gadgetry and things to distract are astounding! There seems to be the idea that anybody can get rich quick online, so nobody wants to make just $8 an hour bagging groceries anymore. It is interesting to see the media perpetuate the stereotype that Gen Y is a bunch of lazy, I want it now folks. Maybe the data serves as evidence.

KEY QUESTION: Is it fair that younger workers are being crowded out by older workers?

It’s clear there is a US unemployment issue and much of the world frankly. As more seniors re-enter or stay longer in the work force, the question becomes is this right for those who are just starting off? On the one hand, teenagers will argue that senior people have had their chance in the work force already. 40 years is a long enough time to be working, and if they are taking entry level jobs traditionally allocated to teenagers, that’s just wrong.

On the other hand, senior folks can argue that if their kids actually took care of them in their old age, they wouldn’t have to work! But then, the counter argument would be that they should have found ways to take care of themselves after 40 years of work. So it seems as if everything is rational from a financial point of view. Both sides are at “fault.”

Hence, the real reason for the rapid increase in older workers and a commensurate decline in younger workers is simply desire. Teenagers have less desire to work because the world owes them something, and older workers have a greater desire to work because they are bored out of their minds! Hence, the crossover is actually a market driven phenomena that is completely rational.

Readers, what are your thoughts about the crossover?

Why do you think there’s been a surge in older workers and a decline in younger workers over the past 20 years?

Should older workers stop working and give younger workers a chance since they had theirs already?

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS feed.

Buying Blogs, Selling Blogs: How I Built My Blogging Business

admin — Wed, 21 Jul 2010 09:00:54 +0000

This is a guest post written by Mike, a financial planner / web entrepreneur who is pursuing his dream of running his online business. You can follow his progress at The Financial Blogger (RSS Feed) and read his other financial blogs at Green Panda Treehouse (RSS Feed) and Intelligent Speculator (RSS Feed).

3 years ago, I was told by many bloggers: “You will never make money blogging. And if you do, $200/month will be your highest peak ever”.

Three year ago, The Financial Blogger was averaging 500 visits per month and I was ecstatic when I made my first deal of $10 for a link.

Three years later, I now run three financial websites, bought 2 of them and flipped a blog within a year. I am now able to work 1 full day per week on my online business (while I still have to keep my “day job” in the meantime). I really like buying and managing finance blogs as I think it is currently one of the best investing opportunities we can find.

When I asked Sam if I could write a guest post for Financial Samurai, he asked me to include more details on how I appraised blogs and how do I decide or not to send $10K over the wire (or more!) simply to buy a “.com”.

Look at Blogs as a Real Estate Investing Opportunity

When I first started my blog, I went into a partnership with one of my friends (who is the co-founder of our company). He has been in the website industry since the 90s, well before the .com bubble. He told me to picture a rental property in order to understand how a website can generate income and how it should be valued. He actually wrote an interesting piece about the difference between real estate investing and website investing recently.

His main point is the following:

When you value a rental property, you will most likely pay between 10 to 15 times the yearly revenue. Therefore, if the property generates about $40,000 in rental income, you will pay between $400,000 to $600,000 to purchase it.

When you value a website, you will most likely pay 18 to 24 times the monthly income. Therefore, your investment return can easily reach 50% the very first year!

While both type of properties will generate monthly income, the first one will be paid over 20 years (if not more) and the latter will take less than 2 years to be reimbursed. So now that I have proven that there is a great investing opportunity, how do you value a website?

A few months ago, we purchased Green Panda Treehouse. This is a great personal finance blog aimed at young college graduates to help them manage their personal finances. Since I am still in my 20s, I thought it would be great to add my financial expertise and write more about topics such as asset allocation for beginners or tips for first home buyers (since I have a banker background). So let’s take this example:

How Did We Value Green Panda Treehouse:

There are several metrics when we are about to purchase a website. So before we even start with the calculations, we are looking at minimum requirements. The site must be:

- At least 1 year old (in order to have valid traffic data and to have it recognized by Google).

- Minimum of 10,000 visits per month (it’s easy to build a blog with 3,000 visits/month, since we are looking to save time, we need a good visitors base).

- Minimum of 50% of visits coming from search engines (we don’t want to have boosted traffic from social media since those readers don’t stay long on your site, don’t click on ads, don’t comment and don’t register to any of your RSS feeds).

- Minimum of 300 RSS readers (just to make sure you have a community following you).

- Must not be a Page Rank 0. PR0 websites means that Google doesn’t like them. While I don’t give very much weight to PR, I just want to make sure it’s not 0 because I don’t want my blogs to be penalized by the search engine.

- Must be under monetized. While I am not the biggest pro in monetization, I like to find blogs that are under monetized according to my knowledge. It gives me confidence that I will be able to get my investment returns faster than 24 months.

Green Panda Treehouse met all those pre-requisites. Therefore, we went ahead and did some calculations. Since the site was big (around 10,000 visit/month) but not huge (over 35,000 visits per month), we were able to apply the 18 to 24 months of income rule. For bigger websites, you certainly have to add a premium for the brand, size of community and future income potential.

How do you assess income?

Before putting a number on a website, I like to look in-depth at the different sources of income. I don’t like blogs that are dependant on just one source of income (commonly Adsense or Text links). This makes the business risk greater than well diversified income sources.

In fact, there are a lot of income sources for a blog and I would like to see all of them (in various proportion) such as:

- Adsense

- Text Link

- Banners

- Affiliates

- Products (ebooks, services, paid newletters, etc.).

The more diversified the sources of income, the more I will be willing to give 24 to 36 months of income (since you can really consider it as a business and not a small sideline).

You can have additional weight if you have been monetizing your blog for several months. If you can show an uptrend for more than 6 months, you can definitely talk about potential future growth. If not, I think the word potential is overrated in the internet world. Everybody talks about “potential” but nobody develops it because “they don’t have the time”… right!

Other particulars

There are a few particulars to look at before buying a website. This is more looking towards what you are looking for and what you want to buy as a blog. You can look at the following points before you start shopping:

Niche Content

Do you want to talk about personal finance in general or a specific aspect such as frugality or investments? Obviously, an investment blog will be worth a lot more because advertisers will pay more to show investing products versus coupons.

Popular posts

I’ve seen some blogs getting 30 to 40% of their traffic from only 2 or 3 articles. You want to make sure that you have several popular articles in Google so you can count on a steady traffic base. If most of your pages viewed depend on 1 or 2 keywords, chances are that most of your income depends on the very same words. Therefore, it adds to the risk.

Restrictions

Some blogs are very personal and related to its author. While this can be the purpose of a blog, there are some blogs where readers are less attached to its author than others. While you want to have a strong community, you don’t want it to be too strong either. A lot of readers may leave if you don’t have the same writing style or train of thought of the previous owner.

Some also consider offering a writer’s position to the previous owner to make sure they keep their readership (We kept Stew who was writing 3 times a week on Gather Little by Little for example). It’s not a bad idea at first since it gives you the time to “break-in” your new readers.

Does buying/selling blogs constitute a good business model?

I personally believe that there is a huge investment opportunity in the blog management business since we are currently in a very inefficient market. Since there are not a lot of buyers and that blog valuation is still complex and a standard method has not yet been determined, there are several gems available for a very small price. Our most recent purchase; Green Panda Treehouse was a perfect example.

On that note, if you ever consider selling your blog or if you have any questions regarding blog valuation, don’t forget to shoot me an email at thefinancialblogger (at) gmail (dot) com!

Other resources:

I’ve written a few other articles about how to value and to buy another blog, you can read them here:

How To Buy A Blog in 3 Easy Steps

How To Buy A Blog Step 2: Assess the value of a Blog

How To Buy A Blog Step 2: Assess the value of a Blog Part 2

How To Buy A Blog Step 3: Finalizing the Transaction and Integrating the community

Also, if you want to learn more about how to buy, build and sell a blog, I suggest you register to my free newsletter where I discuss how I am building my online company one blog at a time!

Should I Refinance Now? Does A Bear Poop In The Woods?

admin — Mon, 19 Jul 2010 09:00:40 +0000

You guys know that the one and only data point I track religiously is the 10-year yield right? Well, after the 10 year yield dipped below 3%, I went to the bank with a buddy of mine to go see how much money we could borrow. The wiry banker sat us down like a loving couple and asked us to go through our finances at which point I kindly stepped out of the room and let him go first. Five minutes later, he came out with a grin on his face, so I curiously went in.

I proceeded to disclose some of my finances, and he proceeded to tell me some curious news. “Look here Sam, you can borrow up to $1.5 million dollars at a 5 year fixed rate at 3.75%!”

Holy moly really? You mean little old me, just like that can borrow that much money at that low of a rate? “So what’s the catch?”, I ask.

“Zero points, and $2,500 in closing costs. But don’t worry, we are giving you a $500 credit for being a preferred member, and frankly, if you guys both take out loans, I’ll throw in another $500 credit,” said the banker.

“Done! Where do I sign?, I ask as I think about the new Audi R8 I plan to buy with just $150,000 of the $1.5 million. Or maybe I should be more conservative and spend $100,000 on the new 2011 Porsche 911. Or actually, I heard the 2011 BMW 335i coupe is coming out for only $55,000 this fall. With all the money “saved”, time for a bachelor’s trip somewhere fun! (I’m still thinking to myself here).

NOT SO FAST FOOLIO!

Unfortunately, things aren’t that easy. I’m not eligible to borrow $1.5 million to buy anything. I’m only eligible to borrow up to $1.5 million if I want to buy another piece of property or refinance my home. Good thing I’ve got a mortgage at 4.625% to refinance, and that’s exactly what I’m going to do.

An interesting thing to note for those who have variable rate mortgages is that if it starts floating today your interest rate will be only 3.5%. But, if you can lock in for another 5 years at 3.75%, might as well do so now.

The amazing thing about this year vs. last year when the 10-yr yield was also below 3% is that banks weren’t lending. The 10 year treasury rate actually dropped to 2.25% in October 2008 but nobody could get a loan, and if they did, spreads were egregiously wide (6% for same loan), it didn’t matter! My how things have changed.

A QUICK EXAMPLE

Let’s say my mortgage is $1.5 million at 4.625% for illustrative purposes. My monthly payments would be around $7,712 a month in principal and interest. Just by having a 10 minute conversation, and filling out some paper work with minimal cash out of my pocket, I’m able to refinance a jumbo loan of $1.5 million down to 3.75%. The result is a $812 a month increase in cash flow as the payment drops to $6,940!

Now lets take a look at the principal and interest breakdown of $7,712 a month at 4.75%. About $5,781 goes to interest and $1,931 goes to principal. At a 3.75% interest rate, your monthly payment drops to $6,940 with just $4,680 in interest and a healthier $2,260 in principal! In other words, not only do you pay less overall for better cash flow management, you pay less interest a month and more principal.

In percentage terms, even though your overall monthly payment just drops by just 10% ($7,712 a month down to $6,940) your monthly interest payment goes down 21%, and your principal payment goes up 20%. Funny how math works.

AMERICANS FLUSH WITH CASH

10 Year Treasury Yield Historical Chart

The refinance wave is coming again and that means more money in consumer’s pockets. In my example above, one has $812 extra cash to buy a new iPad every month for the next 5 years if so desired. One could also use the money to buy two round trip tickets to Hawaii, eat 15 steak dinners, lease a $60,000 automobile for no money down, or pay down more debt every month as well. Oh the possibilities are endless!

Of course one shouldn’t start spending frivolously, but the point is there will be a consumption boom as hundreds of thousands of people across America see a nice uptick in their monthly cash flow. Given ~68% of Americans own homes, and consumption accounts for over 60% of GDP one should feel encouraged that our economy is not going to fall off a cliff again!

Readers, anybody still on the fence about refinancing after reading this article? Do you need a hard kick in the pants? Do you think a refinance wave is going to sweep the nation again? How’s the property market in your neighborhood?

Note: It’s advised to match the fixed rate portion of your loan with your intended length of ownership. In other words, if you plan on moving in 5 years, get a 5/1 ARM. If you plan on holding your property forever, a 30-year fixed mortgage might be the way to go.

Also be aware that you need a loan-to-value of 80% or less, and likely a 710+ credit score to take advantage of current low rates. This irony of monetary policy is that it may very well benefit those who need help the least. Another post will touch upon this topic.

Please follow the 30/30/3 rule for home buying and don’t blow yourself up, so you don’t blow us up. Thanks!

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS or E-mail feed.

An Inside Look At The Yakezie: Stage One Recap!

admin — Wed, 14 Jul 2010 09:00:59 +0000

Well, here we are! It’s been six month since the original challenge was announced and I want to congratulate all of you for making it this far! The network has grown to be a powerful one and now it’s up to us to harness it for the greater good This is where the 2nd challenge comes in, which officially starts on August 15th when Yakezie.com is launched.

The 2nd challenge is simply to use the power of the Yakezie network to help others through monetary means or donations of our expertise, while at the same time grow our online revenue by various rates (i.e. 25%, 50%, 100%). The good thing about percentage increase targets is that we can all challenge ourselves whether we have a $100/month site or a $10,000/month site. More will be explained once Yakezie.com is launched. The first challenge of getting our Alexa rankings below 200,000, and now below 100,000 still stands. As long as we are part of the network, we should strive for progress or at least a steady state of satisfaction.

Some of the most interesting types of posts around the web are voyeuristic posts about what goes on inside the mind of the blogger. Part of the reason why DVDs are such a hit is because of the “special features” section where you can watch outtakes and behind the scenes featurettes. Many have asked whether I had a grand plan all along for this group, and the simple answer is no. It was because all of you that the group flourished. I’d like to share with you some of my thoughts as The Yakezie grew. Perhaps you’ll do the same and post your own write-up as well!

DECEMBER, 2009 – BEFORE THE YAKEZIE. Alexa Ranking 94,000.

Gosh, blogging is hard. How do some people stay consistent for so long? It would be great to be able to blog full time, but only a few are so lucky. But then again, as someone told me, as soon as you start depending on your hobby for income, it stops being fun. I won’t know until I get there, but hanging on the beach blogging somewhere sounds like a good life to me! I’m making progress but getting another guest post rejected is demoralizing. Forget about being a “staff-writer”. Nobody seems to want to read what I have to say. Blog networks tell me to “check back later” after I’ve had more experience.

At least the advertisers are listening. I’m surprised how many people come out of the wood work to offer advertisement dollars. Where do they all come from? OK, thanks for contacting. It’s chump change still, but hey, that’s a selfish way of thinking. Maybe someone else could use the several hundred dollars a month. Let’s give it to those who need it more. Blogging only for money is uninspiring. But, blogging and knowing money is being diverted to help someone else is inspiring. Stay consistent. That’s the only way you’re going to get anywhere.

JANUARY, 2010. THE LAUNCH. Alexa Ranking 78,000.

New year, time to reflect. Six months went by fast since launching Financial Samurai in the summer of 2009. Despite the road bumps, this is some of the best fun I’ve ever had! The Alexa ranking keeps going lower, which helps me stay the course. Meanwhile, I’ve seen a couple blogging buddies disappear over the same time period (Five Pence Piece and Gen Y investing where art thou?), and I wonder if they’d have stuck around if they started tracking their rankings as well?

I’ve got a feeling there are lots of us out there who’ve been rejected and just need a chance to be heard. But, how am I supposed to be a scientist if I can’t get an “A” in biology? In other words, this blog needs to at least have some good fundamental traffic and get up there in the rankings before I can do something greater.

Let’s start our own darn group. I’m sick of rejection. I went to college, I know how to type and so do many other people. But, what should I name it? One word, thematically Japanese perhaps? Yakuza? Nah, that’s taken, and it has bad connotations. Yakezie, pro-nounced Ya-Kay-Zee? Yes, I like the sound of it. Good, it’s a word that’s never been created before either. Write the post. Maybe someone will read it and join.

FEBRUARY, 2010. GROWTH. Alexa Ranking 70,000.

Maybe there are people reading? 30+ members already, nice. TAKE THAT you exclusive blogging networks! Us little guys can create our own too!

How do I help galvanize action? Some are so gung ho, some aren’t as much. We each have our own busy schedules to lead so it’s impossible to have some kind of set standard. Can’t force anybody to do anything, and people have got to put in the time themselves. The more they put in, the more they’ll get out of the experience. Need to lead by example.

Oh drat, Wise Bread changed the rules on us and included blogs from major mass media publications in their list. Our progress is temporarily stalled as we all dropped two spots, respectively as a result. Time to write an update post (“Progress Through Adversity”). Neat, a week later, the rules are back to normal and the piggy back blogs are gone. We do have a voice. Stay humble, but stand strong.

MARCH, 2010. CREATIVITY. Alexa Ranking 65,000.

I love everybody here! There are some amazingly talented members with a lot of unique skills and insights! Thanks Forest and Beating Broke for creating the Yakezie random post widget! Thanks Greg for creating the badge! Thanks Joel for creating the Yakezie ranking list and to Daniel-san at Sweating The Big Stuff for coming up with the original Google Docs list! Thanks Greg again for starting the Yakezie Google Groups with tons of discussion every single day! Thanks Elle from Couple Money for giving the Yakezie a shout out in her guest post on ProBlogger! Thanks Monevator for also highlighting the Yakezie on Remarkablogger.

The Yakezie is like an open source platform where members are free to do whatever they want with it. Good for them for being so creative. I wonder what members will come up with next? Oh nice, we’re talking about potentially an eBook, a Carnival, and a giveaway. Neat. The possibilities are endless!

Hmmm, I guess one of my new year’s resolutions of getting to know 3 new people a month is going to be pretty easy. We’re already at 50 members!

APRIL, 2010. CONFLICT. Alexa 58,000.

Uh oh, growing pains. A couple bloggers don’t want to put the badge Greg created up on their sites. They’ve voiced their frustration in Google groups. I, along with several other earlier members are wondering why they bothered joining in the first place since their sites are already pretty popular.

I never created any official requirements for joining, but I guess some guidelines should be in place since the group is getting quite large and the Google spreadsheet system we use to track our members only holds 50 spots. The discussion gets heated within Google groups, and I know people are wondering where I stand.

I jump in, head first with a proposal for a vote. Vote passes that members should follow a set of rules which are later added to the original Yakezie Alexa Ranking Challenge post. This ain’t no hit and run. We’re in it for the long run. Hmmm, maybe I’m being too vocal.

The two bloggers decide to leave. Unfortunate, but fine by us, as there are many others who want to join. Looking at one who left, he’s almost dropped to page 3 from page 1 on WB’s list. The other, I donno, he seems to be an angry person. He doesn’t like me, oh well. I’m bound to collide with some. He’s far more advanced than us in the blogging world in terms of SEO etc. We don’t care at this point. We’re just having fun and building relationships. Good luck to them.

MAY, 2010. STAY TRUE. Alexa Ranking 51,000.

Hmmm, I have a lot of controversial posts which might agitate some readers and Yakezie members (Pro Flat Tax, The Dark Side of Early Retirement, West Coast Is The Best Coast , The Emergency Fund Fallacy etc). Am I supposed to write in a more agreeable way, or should I just continue being myself? The group has grown to 80 members from all sorts of backgrounds: women, men, rich, not so rich, foreign, local, religious, non religious etc. I’m bound to piss someone off. What to do? I want to write about stuff I want to read. I’ve gotten this far just being myself, it doesn’t seem right to change too much. I won’t. This is what running your own site is all about.

Hopefully people can still respect my thoughts even if they don’t agree with my thoughts. Looks like people are getting along quite well, and relationships are being formed between various members on their own. Good, that’s what I was hoping for.

It’s really hard to keep track of everyone now, and a lot of members have said the same thing. Dr. Dean comes up with a neat survey for us to fill out. The number one concern is how big we’ve grown Let’s see, if I make sure to read five new sites a week and interact, it’s only going to be a matter of time before I get to know everybody. I wish everybody would just come visit me here and comment so I can get to know them. Oh, stop being so lazy.

JUNE, 2010. THE FINAL STRETCH. Alexa Ranking 41,500.

We’ve got something here. Best to register Yakezie.com and create a true home base for the entire team. Yakezie.com is where the list will be, as well as a place all members can showcase their writing talents. Furthermore, members should use Yakezie.com as a launching pad for whatever projects they are personally working on at their respective sites. Examples include a giveaway, invention like Little House’s Frog Cap, ebook, and so forth. I can see how the Yakezie.com platform can launch ideas in a hurry!

Maintaining one blog is hard enough, how will I maintain two? I really won’t, because Yakezie.com will be for everyone. I want to be a participant in Yakezie.com, where I can comment and help promote other people’s stuff. I’ll be your biggest fan! I’m happy to pay for all the start up costs (hosting, design, content) and see where this goes.

I wondering if a system based on honor could work where we have enough administrators on Yakezie.com who will write, edit, and post at will based on a loosely defined regular schedule.

JULY, 2010. LOOKING FOR YAKEZIE LEADERS! Alexa Ranking 40,500.

We’ve got roughly a month until the site is launched and I’m looking for leaders who want to gain administrative access to help get this puppy off the ground. Each leader will get their own bio, with a special color coding that identifies them as an administrator. A leader’s responsibility is simply to find talent in their respective categories, help edit their stories to the Yakezie standard, and allow people to flourish. A leader will also have priority in publishing their own stories on Yakezie.com which will in turn help promote their own sites and projects.

There’s little doubt in my mind that Yakezie.com is going to be a win-win-win scenario for everybody. Can you imagine if it becomes big one day, how neat it would be to have “Yakezie Leader” under your resume? To be a part of something great from the ground up is a wonderful thing. I just get excited thinking about being a Yakezie Leader myself!

If you are not one of the Yakezie Leaders, that’s quite alright too. You are a Yakezie Ambassador and a great representative of our group!

THREE MAIN VERTICALS

There will be three main verticals on Yakezie.com, the most intricate of which will be Yakezie Personal Finance due to the various sub categories such as: career, education, frugality, and retirement. The other two verticals will be Yakezie Lifestyle where the focus is on living the life you’ve always wanted, and Yakezie Scholarship, which is about giving back our services and money to people in need. I will elaborate further on the new site.

From previous discussions, the following members have stepped up to take the challenge as a Yakezie Leader:

Public Relations: Nicole at Rainy Day Saver – East Coast Representative, Neal at Wealth Pilgrim – West Coast Representative

* Looking for an International Representative, which can be divided into Europe, Asia, Latin America if necessary. Canadian rep is open if anybody would like to do that.

Yakezie Personal Finance (Family Finance): Jesse at Personal Finance Firewall

Yakezie Personal Finance (Debt Destroyer): Jeff at Deliver Away Debt

Yakezie Lifestyle: Earl at Wandering Earl. There’s a whole world out there of new lifestyle bloggers to get to know. This is where financial freedom and life converge!

Yakezie Scholarship: Looking for folks who are especially passionate about education and charity. Teachers are especially a great fit. I’d like to help work on this angle.

Some Key Positions Open: Social Media Leader i.e. Twitter & Facebook, Podcaster, Interviewer, SEO. Bucksome Boomer mentioned working on a Yakezie Blog Frog page which could be neat.

To make things manageable, I’d like to get a total of around 10 Yakezie Leaders to help run Yakezie.com. Each Yakezie Leader is responsible for their own slice and is given autonomy to create and develop as they see fit. Ideally, the leader can be one for at least a six month time period, if not longer. Once you see the giving back aspect of Yakezie.com in the Yakezie Scholarship vertical, I think you’ll want to be a leader for quite a long time.

JUST REMEMBER TO ALWAYS HAVE FUN

What I do want to highlight is that if as soon as you stop having fun and don’t feel like we’re going in the right direction, speak up and share your thoughts. You should never feel that being a Yakezie Leader is a burden, and too stressful. If you do, you can simply ask one of your fellow Yakezie members to sub in, or completely take your place just like how we did with the Yakezie Carnivals. I do believe that if you’re like me, you believe in purpose and the joy of helping others.

All Yakezie members should think about things of their own they would like to promote on Yakezie.com. Hopefully many of you can show case your talents through a “Yakezie Member Post” (as opposed to guest post) where you’ll get a fantastic concentration of eyeballs. Many of us have built wonderful relationships with others on their own and this is what I’m most proud of. Friendships are what give life meaning. The Yakezie, first and foremost is about selflessly helping others!

Members, feel free to throw your hat in the ring if you want to be a Yakezie Leader and identify which vertical or sub category you are most interested in.

All suggestions, questions, comments welcome. I know I’m probably missing something inadvertently, so please feel free to remind me below, and I’ll add it to the post!

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS feed.

Am I Living In A Parallel Universe?

admin — Mon, 12 Jul 2010 09:00:32 +0000

As far as I’m concerned, the US economy is recovering handsomely. How could it not with packed restaurants, and traffic that makes me want to pull your hair out? The most anticipated IPO of the year is Facebook, which may very well go public for $20 billion plus dollars. Meanwhile, the whole world is hooked on Apple products with iPads ($500-800) and iPhones ($200-300) selling like hotcakes. Who needs yet another computing device? I guess millions do!

There is so much money flowing into the Bay Area, it’s hard to imagine another financial crisis on the wing. Yet, I’ve read plenty of posts on “steps to take when the next financial crisis comes” and I’m scratching my head. Am I living in a parallel universe where every other car I see is a fancy German vehicle, and I can never get a reservation at my favorite sushi joint? I feel like I’m living in a little optimistic bubble where the world isn’t falling off a cliff and is actually doing well. Tell me if I am, because bubble living is delusional living at its finest.

The stock markets, although highly volatile have recovered some 50% from the bottom and generally serve as as a leading indicator for the economy. Yet people are still talking about a double dip recession. Yes, the biggest worry is stubbornly high unemployment, but you’ll never be able to tell if you walk the streets of San Francisco.

LOTS OF POSITIVE ANECDOTES

* Commute time from the city to the airport has increased from 25 minutes to 35 minutes on average due to traffic.

* The House Of Prime Rib is always packed and calling two days before gets one a reservation for two at 10pm.

* The BMW dealer says they are moving cars at the fastest pace since 2007. The new 5 series is in, with a price tag of $72,000 for the 550i version.

* Venture Capital and Private Equity firms are flush with cash and are looking to find a home before they have to return money to investors. Foursquare, Pandora, Zynga are getting funded for ridiculously high multiples.

* Banks are cashed up and lending again based off my conversation with three mortgage brokers.

* Headhunters (recruiters) are calling incessantly and it’s already past the halfway mark.

* You can never get a tennis reservation at 3:45pm, 5:15pm, or 6:30pm at my club because people make so much money they get to leave work early or don’t have to work at all. Membership has increased by over 30% in one year.

* A house down the street received multiple offers and was in contract within 10 days.

* Advertisers have been filling my inbox seeking to do business.

* Landscaper had to delay a job for one week after already starting at my house because there was a bigger job to do elsewhere.

* Went to go buy a pair of retro Air Jordan Infrared VI shoes for $340 (package set of two) 20 minutes after Nike Town opened and they were sold out. Went to two other stores, sold out! Typical buyer? High school kid.

* I can never get on the bus after 5:30pm because the bus gets completely full in the first 3 stops of a 7 stop pick up route.

CONCLUSION

The newspapers and TV stations constantly tell us how rocky things are. Even fellow bloggers are urging caution. Yet our fearless leaders in Washington are telling us we’re recovering quite well. I’m generally wary about government prognostications, but with the amount of activity in the Bay Area, gosh darn it, I think they might be right! How else can the government raise taxes for the rich to 60% (Federal, State, City, FICA, Medicare) next year without torpedoing the economy? The government must know something, and it seems as if people are also catching wind that the good times are back again. Even if the markets drop 10% further this summer, it still doesn’t take away the fact that activity is back, and in a big way.

Readers, do you believe the economy is solidly recovering? How is your neck of the woods doing? Any anecdotes you’d like to share indicating a weak or strong economy?

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS or E-mail feed.

Even Lebron Doesn’t Listen To President Obama

admin — Fri, 09 Jul 2010 09:00:38 +0000

One of the most anticipated NBA free-agent announcements came when Lebron told the world he’s heading to South Beach to play for the Miami Heat. Of the six teams coveting him, really only three stood a chance: Miami, Cleveland, and New York City for obvious reasons. The other three teams: Chicago, LAC, and New Jersey will just be footnotes and forgotten.

What’s most interesting is not Lebron’s decision to make millions of dollars less to join two guys he thinks he can win championships with. Instead, Lebron’s decision to completely spurn President Obama is what really gets me thinking! No less than seven times has President Obama made a public statement insisting that Lebron join the Chicago Bulls. As you know, Obama was the Senator of Illinois before he became President. Many pundits also believe that Chicago is a better candidate for Lebron to win championships with Carlos Boozer, Luol Deng, Derrick Rose, Brad Miller, and Joakim Noah. But, nope. Not Lebron.

If Lebron James, who is a huge Obama fan, doesn’t even listen to Obama’s words, why should the general public? It wasn’t like Obama was saying go to the Minnesota Timberwolves where they have a snowball’s chance in hell of winning. Chicago is a seriously legitimate team if not the best choice!

FIVE REASONS WHY LEBRON DOESN’T LISTEN TO PRESIDENT OBAMA

* Relationships are most important. Lebron, Dwayne, and Chris created an amazing relationship after winning gold metals in the Beijing Olympics. Their friendship transcends money, which jives well with the theory that money can’t bring happiness but friends can.

* Location matters. Let’s face it. Chicago is a crappy place to live 6 months of the year. Why on Earth would Lebron decide to move from crappy weather Cleveland to crappy weather Chicago? He might as well stay in Cleveland! Ever wonder why it wouldn’t be easier to get Dwayne Wade and Chris Bosh to go to Cleveland? It’s because Cleveland is a hard place to live unless you have family there. If you’re going to make a move, you might as well go all out and either move to Miami or LA because we all know that weather in NYC and NJ is horrendous as well.

* Charity is a good thing. At the end of the interview with ESPN, Lebron announced he is donating all proceeds raised from the “The Decision” to the Boys & Girls Club he’s so intricately involved in. With President Obama limiting the tax break for charity deduction to 28%, that penalizes those in the higher income tax brackets who are the onse who make up the majority of this country’s donations! The clear repercussion of this proposed legislation is that giving will decline by billions at the margin.

* Just say NO to discrimination. With President Obama allowing for an even higher progressive tax system, he is saying it is OK to discriminate against people based on their income. If you worked hard and spent an extra 8 years of your life after college to become a physician and make $500,000, the Democrats believe it’s OK to tax you 39.6%. Meanwhile, if you decide to goof off in school, not study and make $25,000 a year for the rest of your life, you are rewarded by only paying 15% in Federal income tax.

* Lower taxes is the result of fiscal prudence. Although Lebron has to pay 39.6% on his mega millions a year, he won’t have to pay state tax, which is a 10% savings compared to playing in California or New York, and a 6% savings compared to staying in Cleveland. If you make conservatively $50 million a year after endorsements, you’re saving $5 million in state taxes a year!

CONCLUSION

It’s been a year and a half since President Obama came to office and some people are getting tired of rhetoric. We’ve had a great recovery in the financial markets, but our employment outlook still looks murky. We are spending record amounts of money on government programs, yet the government tells other people to practice financial austerity. Federal government employees are raking it in with recession proof jobs and rising wages. Lebron has lost faith in the President and his ability to help out the Midwest and his home state of Ohio. As a result, he no longer listens, so why are you?

Readers, has anybody else lost faith in our President and his promises?

For basketball fans, did Lebron make the right choice going to Miami?

Why do you still not play or follow sports when America is a nation of sports enthusiasts?

** Very few people can claim to have worked in one job for 7 consecutive years right out of school. So before you go bashing Lebron for his decision, like Cleveland Owner Dan Gilbert who just lost hundreds of millions in franchise value, take a look at your own track record.

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS or E-mail feed.

Feeling Like A Burden Is A Terrible, Terrible Thing

admin — Wed, 07 Jul 2010 09:00:49 +0000

"Carried By The Wind" by Veronika Nagy

My nose plugs up and I can hardly breathe when I’m around cats too long. I don’t know why I’m allergic, I just am. One time I stayed over a friend’s place with three cats, and I woke up with red hives. It was a surprise that I was able to fall asleep at all, because I could have sworn I sneezed over 100 times until the underside of my nose bled.

One of my best friends invited me over to visit her childhood home this fall. Her mother lives near Boston, and unlucky for me another downside of East Coast living is the enormous pollen count. I remember countless days when I couldn’t go to work because my allergies were so bad. Ever since moving out West, my reactions have been much tamer. The San Francisco Bay acts as a natural filter, sucking out stagnant air to sea.

In addition to being out East, my friend’s mother also has a couple of dogs and cats! She sees this trip as a fun homecoming to introduce me to where she grew up. To me, I have no attachment there and it’s like going to a gas chamber for vacation. Imagine only being able to breathe through your two front teeth. That’s how I feel sometimes when allergies attack. You can’t get enough oxygen, so you aren’t able to speak. You lose energy and let sleep take over even though it’s in the middle of the day.

THE QUIET PLEA

When I asked my friend if it was OK to ask her mother if she could put the two cats in the basement during our visit, she paused. Sensing her objection, I offered up a solution of putting the two cats in the basement only at night, and let them out during the day when we go out and explore. Another pause. Fine, at which point I felt thoroughly disappointed. I’ll just go get a hotel room for $100 bucks a night I tell her, which is absolutely silly because there are two perfectly empty bedrooms at her mother’s house.

There was no compromise with my friend. She mentioned that one of the cats would object and start meowing and clawing at the door if she was left down in the basement. Oh really? That’s too bad. It’s not like a dungeon down there. I’m well aware of East Coast homes where many of them have fantastic basements filled with TVs, furniture, beds, and wet bars. A thousand square feet of living space for a cat is like 10,000 square feet of living space for a human. Nope, she doesn’t think it’s a good idea and is hesitant to ask her mom, who so happens to be very nice.

I’m sad, because when she comes over to my parent’s house, there’s nothing we won’t do to accommodate. For example, my parent’s house has a crazy neighbor on one side. The neighbor often talks out loud to herself and busts out in song. Her dog barks incessantly, and we are forced to hang out on the other side of the house sometimes. One visit, I found my friend sleeping on the sofa in the living room due to the noise, and that bothered me. It bothered me so much that I went with my father to see if we could get some airtight, double paned windows so she wouldn’t have to wake up in the middle of the night. Isn’t that a thoughtful gesture? I’m thinking of the future. We’re going to get those installed, I promise.

I’LL TRY HARDER

If I was mega rich, I wouldn’t feel so bad about my friend choosing her cats over me. I would say “no problem” to $100/night motel rooms, and would probably want to stay at $300 a night resorts where I could be pampered with room service, a spa, fine dining and other amenities. But, no, I’m not mega rich. I work on a loose budget and like to save money where I can.

So here is another reminder as to why I seek financial freedom. I don’t want to get my feelings hurt if I have to be compared against someone or a fuzzy animal. I gave her a couple chances to see if she could accommodate, and she just stayed silent. I don’t want to be sad or angry at my friend for putting her in a tough decision. I know she loves her cats dearly, but some would say that we are in love too.

Send me to the Four Seasons and let me spend large sums of money for a hotel room even if a cozy room is available for free. I’m sorry for being a burden to you and your cats dear friend. It’d be nice to discover medication and fancy, non Darth Vader-like contraptions that can help alleviate my allergies, but nothing seems to work. For now I’m no better than a cat, which is enough motivation to write this post and work harder at achieving my financial goals.

Readers, what are some of the things that frustrates you or makes you sad, which could be alleviated by having lots of money?

What would you do in my situation? Would you still bother going?

Maybe I’ll just go up to Tahoe and do some soul searching. She’s a lovely person and perhaps I have to just change my expectations.

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS or E-mail feed.

Three Keys To Motivation And It Has Little To Do With Money

admin — Mon, 05 Jul 2010 09:00:41 +0000

Here’s a short 10 minute video I stumbled upon which eerily highlights several things I do and why (ie play guitar), as well as touch upon reasons why some people are willing to do things for free, and others strongly consider giving up big salaries to just work on a hobby.

NODDING MY HEAD

I find myself agreeing with pretty much everything the video has to say. Money has become a secondary motivational factor for me over the past several years. Something just happened where I’ve become satisfied in making what I make, oh my! Sure, I have a “make $1 million bucks” goal for 2010, but that’s really just one of those fun, see if I can do it goals. Autonomy, mastery, and purpose are things I look forward to now.

Progress is a wonderful feeling, which is why I try and play a musical instrument and sing in my free time. Music also helps fill the void when I’m injured due to sports. Going from not knowing the chords and the words of a song, to mastering a tune from memory that’s good enough to record is an unbelievable sense of accomplishment. I’ve been working on getting the finger picking of Pearl Jam’s “Just Breathe” for the past month, and I can’t seem to get it right. But dammit, I’m going to keep practicing because it’s such a beautiful song!

After you have a certain amount of money and experience, you definitely want autonomy. You’re no longer a fresh college grad that is constantly micro-managed by senior colleagues. A sure fire way for a company to lose a star employee is to restrict their freedom and ignore their good work. Blogging is an incredible example of autonomy. Nobody is going to tell me what to write and that’s so liberating. I’ll thrive and fade with my decisions alone.

Purpose is something that can either be questioned before you start your journey or after. You can be a high school or college student who has no freaking idea what you’re supposed to do in life. Or, you can be a 20 year veteran in the workforce who has built a great resume, as well as financial security, but realize you’re middle aged now and wonder if there’s more to life since you’ve already conquered insecurity, be it financial or otherwise.

The purpose of this site was never to make money. The purpose was to just create something tangible that serves as a creative outlet for someone who was once creative. I want to be that kid in pottery class again, molding that wet clay on a rapidly rotating swivel stick.

Readers, what are several motivating factors for you in your life or in your job? Have you noticed money increase or decrease in importance as a motivational factor?

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS or E-mail feed.

The Katana: Switching Gears For The Summer

admin — Fri, 02 Jul 2010 09:01:34 +0000

Thanks to the invention of blogs and social media, you can intimately feel the summer malaise upon us. To participate in the change in moods, I’ll be lightening things up a little bit. I’ve always been kind of a joker and all this structured writing with beginning, middle and end is oh so well….. structured! Also, to invoke Ralph Ellison’s Invisible Man from AP English class is going to the extreme of stiffness, right? I’m not sure many really connected with the reference at all.

Who wants to read about the struggles of an African American man in the oppressive 1950s when everything is so hunky dory and harmonious nowadays. I do, but I think most others don’t. Does anybody even read the classics anymore? A little Slaughterhouse V by Kurt Vonnegut or Crime & Punishment Fyodor Dostoevsky anybody? Yeah, maybe 20 years ago, but not now. Now, all we read are gossip magazines and blogs with bad punctuation (yours truly) that tickle our guts with spurts of information.

Hence, from now until the end of August I’ll be throwing a little wasabi on the teriyaki as they say in Japan. I just made that up, but thought it sounded good. You might read a little more rambling and a lot less structure as I attempt to change writing styles. The Yakezie.com project is well underway and now is my time to goof around a little bit.

HIGHLIGHT POSTS OF THE WEEK

* “Mountain West Is The Best” by Jeff and “Forget Disneyland! The South Is The Happiest Place On Earth!” by Red. Great to see fellow bloggers challenge my assumption that there really is no comparison to West Coast living! I’m just stating my unequivocal, unbiased opinion why everybody should live and work out West for a better lifestyle. All I really want to see are those who object to my truth and stand up for themselves! Be proud of where you come from and where you’ve established roots! Don’t let some guy who undeniably loves where he lives pollute your mind with sunshine! Well done Jeff & Red!

* “Job Hurdles With Potential Holes Behind Them” by Don-san highlights something I failed to highlight in “Overcoming The Wall” with regards to progressing in the workplace. It’s important to have a manager who is secure with his or herself! If the manager is fearful of what his subordinates can do, then he’s going to oppress you! In this type of situation, I’d look for another job fast.

* “Find Out When You’ll Make A Million Calculator” by Monevator is a quick and easy plug and push tool. It’s important that people don’t get overly caught up with how inflation will erode your assets. Having a million dollars is a million dollars! Don’t let investment gurus and yada yada push you into investing in riskier assets so you can keep up and beat inflation. You’re letting them fear monger you to investing in something you wouldn’t otherwise invest in! Low inflation is here to stay, as I’ve indicated time and time again on this site. If you are happy with a 3-5% 5-7 year CD, then by all means use the “DVD Method To CD Investing!“ Know thyself and think thrice before investing in something you aren’t comfortable with.

* “How To Sell Your Home In 30 Days For $3,000 Or Less” from Neal reminds us of some essential things to do to sell your house and save you some money. The 5-6% real estate commission rate is absolutely ridiculous, especially with the industry turned on its head. You’d think that with home prices rising so much over the decades, that commission rates would fall, but nope, they aren’t. 5% on a $100,000 for $5,000 bucks, fine. 5% on a $1,000,000 for $50,000 bucks, forget it! Wake up industry! Part of the reason why you guys aren’t making more money is because you guys are making transaction costs prohibitively high!

* “You’re Still Young, Do It While You Can” from Wandering Earl highlights some fallacies in this statement. When we’re 20 we think 30 is old. When we’re 30 we think 20 is young. The point is, we’re always going to be young if we think young, and it’s not like once we are over 50 we are shackled down and unable to be free. It’s OK to get old! But, it’s not OK to have debilitating beliefs about yourself!

* “A Discussion With Carrie Schwab-Pomerantz, President of the Charles Schwab Foundation” on Consumerism Commentary. Carrie conducted a very interesting study on the Sandwich Generation and provides her survey findings. Did you know that Charles Schwab was a failing businessman when Carrie was 20 years old. She didn’t haven’t an allowance, and everything wasn’t a charmed life like some may believe. Her father taught her two things: 1) Importance of having a strong work ethic and 2) Savings.

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS or E-mail feed.

Isner vs. Mahut: The Greatest Match In Tennis History

admin — Mon, 28 Jun 2010 09:00:18 +0000

As a tennis fanatic, it would be remiss of me not to mention the greatest match in tennis history when American John Isner beat Frenchman Nicolas Mahut 70 to 68 in the 5th set last week. That’s right 70 games to 68 games in the fifth set because one must win by two in the fifth set at Wimbledon. The 11 hour, 5 minute match spanned over 3 days and finished when John Isner hit a solid down the line two-handed backhand to seal the deal.

The previous record for longest match was at the 2004 French open, lasting now just a paltry 6 hours and 33 minutes. It is completely unfathomable that a match could last so long, simply because it is unconscionable how Nicolas Mahut could hold serve over 60 games in a row to survive! The physical endurance is one thing, but what’s most impressive is the mental fortitude both players had to never give up.

LESSONS LEARNED

1) Anything is Possible. If someone were to say that a match would go 30 all in a 5th set, I would say “NO WAY” and probably confidently bet my life savings and my lucky underwear! Even if someone asked for 20-to-1 odds ($10 to win $200) to bet that it could happen, I’d still call them crazy and happily take the other side. I’d probably bet up to $1,000 and then proceed to lose $20,000! Now I’ll think carefully when I hear impossible sounding feats. Anything is possible!

2) Standards Always Go Higher. When Roger Federer defeated Andy Roddick 5-7, 7-6 (6), 7-6 (5), 3-6, 16-14 in the 2009 Wimbledon final, we all thought that was one of the greatest finals in history and that a 16-14 score would never be breached. Fast forward to 2010, and Roger and Andy’s match sounds downright mediocre. The same goes for anything we do, be it creating a product, or being a solid employee. Standards don’t go backwards, they go forward. We’ve got to continuously innovate and try harder.

3) Everything is Mental. At some point, you know that the bodies of John and Nicolas were screaming to stop and give up. But, with the crowd of thousands cheering them on, they started to zone and battled away cramps and fatigue to last a marathon. Personal finance, physical fitness, blogging, work performance and everything is all mental. If you have the right mindset, you will likely succeed in anything you try. If for a second your mental fortitude breaks down, it’s game over. You’ve got to want it like no other.

4) Consistency is Key. John won because he hit one more ball in than Nicolas. If you workout three times a week for 52 weeks in a row, it’s pretty much a sure thing you’re going to be much more toned than if you maintained an erratic schedule. If you post 2-4 times a week on your site and get to know one new person online a week, there’s no doubt your blog will grow. If you get into the office first, and leave last every single work day, you will move ahead in your career. The list is endless. Stay consistent, and watch everything start going your way!

5) Pace Yourself For Long Term Success. A day after John’s match, he lost in just 72 minutes 0-6, 3-6, 2-6 to unknown Thiemo de Bakker. John’s serve was 20 mph slower than average, and he just didn’t have any energy left understandably. You don’t want to go from playing the longest match to the shortest match. Volatility is generally not good for your career or any venture you take. The biggest risk we can take is taking no risk at all. If we burn out before reaching our potential (See “The Dark Side Of Early Retirement“), it’ll be just one darn shame. Balance out your work and your life, but at the same time stay consistent as well.

CONCLUSION

Chances are high that we’ll never be world class athletes or CEOs of mega-cap companies. That said, we should always learn from people at the top of their game to boost our own. In “The Mental To Physical Connection For A Healthier Lifestyle“, the article recommends we use sports or general physical activity to balance out work and our creative sides. It’s important to be tethered to a counter force so that we don’t burn out. If we can stay consistent with whatever it is we are hoping to achieve, there’s no doubt progress will be made!

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS or E-mail feed.

West Coast Living – Yes It Really Is That Much Better!

admin — Tue, 22 Jun 2010 09:00:32 +0000

Despite an honest attempt to seek out more great things about the East Coast, several readers actually proceeded to bash the West Coast instead! What’s up with that? Some curiously mentioned that the East Coast is fantastic because the horrendous weather for half the year makes the other six months so wonderful. Ummm, that’s like saying you appreciate your right hand more because you chopped off your left hand! Wouldn’t you rather have both hands?

The only positive takeaway from the comments I agree with is the cluster of historically significant cities within a several hours drive. Other than that, nobody came up with any stand out reasons other than the six I provided as to why East Coast living is great. Given that the West Coast was attacked, I feel it’s important to stand up and defend our honor!

WEST COAST > EAST COAST

* Beautiful Weather. With blue skies and sunshine, we have wonderful beaches, healthier, and happier people. There’s a reason why movie stars and other celebrities work and live on the West Coast. Why do you think there are so many songs about “California Dreaming”?

* Entrepreneurial Opportunities. Google, YouTube, Yahoo, eBay, Apple, Facebook, Twitter, Microsoft, Amazon and many more innovative, life changing companies are all based on the West Coast. How many self-made 35-year old or younger mega-millionaires or billionaires can you name from the East Coast? Not many.

* Access To Asia. Asia is where the growth is and not Europe. Travel to Asia is quicker, and doing business with Asia is therefore easier. When it’s 8am in China, it’s still only 5pm here on the West Coast. Communicating at 8pm EST is no fun, and therefore doesn’t happen as often.

* Vacation Paradise. Hawaii is just a quick and direct 4.5 hour flight away! Hawaii is seriously one of the top 5 greatest places on Earth to live, and anybody who tells you otherwise has never experienced the island. Besides Hawaii, there is Tahiti, Bora Bora, Samoa, and of course many wonderful vacation spots in Asia.

* World Class Winter Sports. Lake Tahoe and Whistler have 11,000 feet high mountain resorts whereas the East Coast has icy Killington in Vermont and the Catskills in New York. I’ve been to all four places, and I can tell you there really is NO comparison between West Coast and East Coast skiing/snowboarding.

* More Peaceful People. A large reason why many people are on the East Coast is because of a job opportunity or family. As a result, resentment builds for the region because they wouldn’t be there otherwise. This is a recipe for some very grumpy people. Meanwhile, a large reason why many people live out West is for a better lifestyle as well as job opportunities and family. Because people are living a better lifestyle, you have a much more pleasant social environment.

* Less Crooks. Do you think it’s a coincidence that some of the biggest crooks in America such as Bernie Madoff, Elliott Spitzer, Dennis Kozlowski (Tyco), and countless dirty politicians are all based on the East Coast? Of course not. I’ll leave it up to you to figure out why.

* Environmental Movement. People love the Earth out here. California was the first to ban smoking in public places, and the state is a pioneer in recycling and emissions standards. We are the home of organic cuisine (Chez Panesse Alice Waters), Tesla Motors (electric car company), as well as thousands of tree huggers! If you love the environment and want to help save the world, you’ll love the West Coast.

* Great Athletics. The LA Lakers won their second straight NBA championship, meanwhile Pebble Beach just hosted the US Open golf tournament. The amount of events out here are incredible. During the winter, I can play golf on Saturday in 70 degree weather, and drive 2.5-3 hours on Sunday to go snowboarding in 2 feet of powder!

* Lower Power Bills. There’s never a need to use air conditioning to cool or heat yourself in many places on the West Coast given the moderate temperatures. Opening a window is all you need during the summer to get that draft going. Adjusting thermostats is a foreign concept!

* Pride. If you live on the West Coast you won’t have to make sensationalist statements such as “Florida will be torn apart in the next Tornado”, “It’s so humid in Washington DC you can go swimming in your own sweat“, “You’ll die early because you’ll never want to go outside,” “Be careful about the next enemy siege” and other ridiculous statements to make yourself feel better about yourself. You don’t have to disparage like some on the East Coast will do about West Coasters because you’re already living the dream!

CONCLUSION

I know I don’t have to give any reasons why the West Coast is a much better place to live because it’s pretty obvious. It’s like wondering whether Bill Gates is rich… duh. I give reasons anyway to highlight to those who bash the West Coast what they’re missing. It’s easy to look down upon those out West if you’ve never experienced living out here. But as someone who has lived on both coasts, the choice is obvious. Perhaps this post will make things even more obvious!

I’m here to tell you that if you are miserable out East, do more than just make fun of the West Coast. Do something to change your life by moving! The settlers did so hundreds of years ago, and so can you at much quicker a time. Have no fear in seeking a better life. You deserve it!

Readers, what are some other great things about the West Coast not mentioned in this post?

Why do people stubbornly deny reality? Do you think it’s the same reasoning as why people spend more than they earn?

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS or E-mail feed.

Staying Calm Under Pressure

admin — Sun, 20 Jun 2010 13:41:50 +0000

Even at 7:30pm the night is hot. That’s what happens when you go barbecuing somewhere in the South Pacific in the middle of summer. You can almost taste the grilled chicken from the remnant fumes simmering off the grill. Dinner is served!

The family gathers around the picnic table. We take a deep breath and begin to eat. In just the first bite, my father freezes, tries to swallow and let’s out a little gag. We ask him what’s wrong, and he shakes his head not knowing. One of us gives him a glass of water, and still, no change. My father raises up his hand, excuses himself and says that he has to go to the emergency room.

DOUBT AND CONFUSION

Is it really that bad I think to myself? It’s not like he was convulsing or anything. “Shall I drive Dad?” I ask.

“Nahh,” he responds and tells me to enjoy my meal. Dad lumbers to the car and drives his usual slow self away, careful not to run any stop signs.

Five hours later at about 12:30am I hear a car pull up to the driveway with a loud car door thud seconds later. The brakes, oh how those brakes squeak, reminding us to replace. I rush downstairs and ask Dad if everything is OK. He pulls out a little plastic vile, starts to jiggle it back and forth, and reveals a prideful grin.

“What’s that Dad?” I ask incredulously.

“This son, is a site to see!” as he opens up the vile and pulls out a piece of gauze. “Come look closer.” As I inched my way closer to the vile I noticed something long and grey. “This son is a once inch steel bristle from the steel brush we used to clean the grill! It was lodged in my throat!”

“Holy sh*t Dad! You weren’t kidding when you said you needed to go to the ER.”

“Nope.” My dad then proceeded to carefully lay the metal bristle back on the cotton gauze, and back into the vile. Like saving a bullet from a bullet wound, Dad will always save this thorn.

INDEPENDENCE

Many of us really thought he was faking his injury because of his demeanor. It was almost surreal how calmly he excused himself from the picnic table. If you had an inch long metal bristle piercing the front side of your throat, and couldn’t swallow, what would you do? I’ve had contact lenses disappear into the back or the bottom of my eye sockets and I’m in a frenzy.

Dad would be the perfect candidate to shoot a real life Animal Planet commercial on what TO DO when a grizzly bear attacks. Without witnessing countless examples of his Zen-like responses, I’d be less balanced. My face would probably contort more when people are late, and I’d probably panic more at things outside of my control. For this, I’m thankful.

Of all things, independence is what I’ve learned most from my father. He gave me the leeway to do whatever I wanted in life, all the while exposing me to a myriad of his interests, so that perhaps some would rub off on me one day. He never forced me to choose, but instead gave me the freedom to make the right choices. He showed me not to count on handouts and to believe in myself. When he drove himself to the emergency room and waved us off, I was reminded of independence once again.

Thanks Dad and Happy Father’s Day!

Readers, what are some of the things your father have taught you in a direct or indirect way?

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS or E-mail feed.

The Reply Button Is There For A Reason

admin — Fri, 18 Jun 2010 09:00:53 +0000

The following is a guest post by Hime, one of Financial Samurai’s first readers. Hime is a manager at a strategy consultant firm who likes the violin and going on unplanned adventures. Hope you enjoy!

All right everyone, how many times have you read an email and said to yourself “I don’t feel like replying now I’ll just do it later” only to have that email disappear into the deep abyss and completely forget that you left the sender hanging?

Come on, I know you’ve done that at least once. If you do that more like every third email – CLUNK! That is me hitting you over the head with an oversized rubber hammer as I resist the urge to shake the stubbornness out of you. Think I’m overreacting? Maybe a little but I am trying to save your career and relationships so please pay attention!

DON’T LEARN THE HARD WAY

I’m generally fast and consistent about replying to emails right away (24 hours at the latest), especially to friends, family, clients, and the coworkers that I like…whoops I mean all my coworkers. However one time last year I goofed up big time….

I have a difficult client that is notorious for being very impatient and demanding, often with requests that my firm can’t accommodate due to breach of contract or financial limitations. One day I got a terse email from him complaining about a project my team generated late. He was in denial that the reason the report was late stemmed from his team giving us incomplete data that we had to chase down from them on multiple occasions.

I was so irritated that he was blaming us for their incompetence that I let the email fester in my inbox while I moved on to other things. He didn’t deserve any more of time! Boy was I stupid. What I didn’t realize was that because my client was upset (justified or not), he ended up becoming furious that I ignored his email, and he ended up calling my boss’s boss to chew him out about my insolence. Ouch. All of a sudden I became the idiot for not handling the situation and having to bow my head to the man who signs my paycheck. Whoops!

Even though we all receive 100s of emails a day, it is crucial to actively watch for emails that are addressed to you specifically or to your team. There will be times when a client may be lashing out for something that wasn’t your fault but it’s your responsibility to explain that to him/her in a timely manner whether over the phone or in a non aggressive email reply. Your career will depend on it. Don’t risk losing a client, a friend, or your reputation for being known as the infamous non-responder.

Tips for taking control of your email:

Can’t respond right this minute? Use the Mark as Unread function so you’ll remember to reply later.
Create email rules to automatically sort and route email for you.
Stay organized and develop a system that works for you. My inbox only contains emails that I haven’t addressed. Everything I completed gets filed into a folder.
Create meaningful folders and subfolders. A filing system is only effective when you know where to go to retrieve something.
Prioritize and handle the most urgent emails first. Many programs like Outlook let you assign different color flags for tracking prioritization. You can even assign a category name for each color flag, very useful!
Need to do research before having an answer to a client’s email? Reply right away to the client letting them know you’re investigating the issue and will follow up in a few days.
Watch your total inbox size & empty your trash. A lot of servers will stop sending you new emails if your account has gone over the size limit.
Steer away from arguing, complaining, and snide remarks in emails. Emails leave a permanent trail that you don’t want to sneak out and haunt you later.
We’re all busy but that doesn’t mean you can ignore emails from your friends. Family will probably forgive you for being flaky but friends will hold it against you if you never respond to them.
Check your spam folder regularly. Spam filters aren’t perfect and sometimes important emails can end up in there by mistake!

CONCLUSION

If you can practice all of those tips regularly you’re actively improving your communication! Don’t down play email skills – staying on top of emails and responding in a timely and curtious manner are key skills now equally as important as face to face meetings in our current work environments. A lot of work places don’t record phone conversations but I can guarantee most of them are archiving every email you’ve ever sent! Get active with your email and avoid being known as the person with the black hole inbox!

Readers, how many e-mails do you have total in your inbox? How many of them are unread?

What would you say your average response time is over e-mail?

Is e-mail your preferred way of communication? If not, what is?

Keigu,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Folllow on Twitter @FinancialSamurai and subscribe to our RSS feed.

Name:
Email: