Let me provide some background on my kids first, just to give you a point of reference.

• Both kids get straight A’s in school, and do sports and other activities.
• Both kids have good money management skills, thanks to the fact that the both have an allowance.
• Both are respectful and well-mannered.
• People are always telling us how great our kids are.

So what’s my problems?  Why am I writing this rant?  Am I insane?  maybe…

While I pat both my wife and I on our backs about the kids, I have to wonder if I can make it better, especially with respect to finances and entrepreneurship.

Initially, instead of teaching them to work for money, I wanted to teach them first to manage money, then eventually to make money work for them.  This is in stark contrast to the way I was raised.  I did a lot of chores, and got paid for certain chores.  While my kids have to make their beds and occasionally pick up their room, they don’t really get paid for doing chores, per say.  And this is my problem.  How do the learn to earn money if they aren’t earning money?

Green with Envy, but Already Rich?

I’ll come home and see my kids either watching cartoons or other shows, or creating something (usually drawing or writing a short story), or playing minecraft…  To me this is wasted time and energy (although I have to admit, I do like my daughter’s short stories and drawings).  How so I encourage their business savvy without making it a chore?  I’m starting to wonder if I should require them to work for their allowance like I had to do as  kid… In hopes that such an allowance model would make them more moneywise.

My oldest is only 12, so perhaps I’m being to critical.  After all, in comparison, I can’t hold a candle to either of them.

I’m the parent, so it’s really up to me to show them the other paths than just watching TV and doodling.

Time to refocus and think.

Bests,

Don

The post Life is more than cartoons and crayons appeared first on Money Reasons.

If you have read this blog in the past, you know that I created a visual chart to gauge my personal finance progress as I climb a wealth pyramid that I have created.  The pyramid (based off of Maslow’s Pyramid of Needs) seemed to be a great representation of such a wealth-pursuing journey.  In many ways, it helps me visualize the various levels and created milestones for me to watch for, since I love feedback!  So without further ado, here is my update on my progress climbing my “Personal Finance Pyramid“!

I have obtained the level of Lower “Upper Middle Class” status!  sort of…

You are probably wondering why I wrote “sort of”.

Well, during the run of the stock market, grabbed the lower green bar of the “Upper Middle Class” status area.  But now since the stock market has dipped again, I’ve fallen in the upper portion of the Asset Accumulation level again.  Close to “Upper Middle Class”, but not quite.

Upper Middle Class is actually a tricky category to be placed in since it’s more than just wealth and income.  In my part of the country, currently (one never knows what the future brings) I fulfill those requirements… but the standard of living is lower where I live vs a larger city like New York.  As for eduction, I believe I fulfill those requirements, but barely.  No fancy ivy league schools for me.

Another reasons I consider my family lower “upper middle class” is because we live at a more frugal state than others in my city with comparable income.  But that said, many of my neighbors make a similar amount of income, so I’m not that far off.  My house is just a little over 2,000 sq feet though, so it’s smaller than the norm is these days.

Now for the Upper Middle Class lifestyle versus my current lower middle class lifestyle.  I have and do a lot of the same things as the upper middle class does, but instead of a Lexus I have a Toyota Camry.  And instead of taking vacations overseas, I still go on entire family vacations.  Oh, I could afford to take overseas vacations, but I would like to build up my dividend stream first to fund such activities.  Besides, I still dance solidly in the Asset Accumulation level.  I guess lower “upper middle class” would mean that I have one foot in the Asset Accumulation level, and one foot in the Upper Middle Class level.

What financial numbers does it take to be considered the Upper Middle Class?

• Income of over $100,000 (or for an individual to be at or above $75,000)
• Wealth of around 600k+  (at least in 2012)

Anyway, that’s my assessment of my current state.  If the market keeps dipping though, there is a good chance that I’ll slip entirely back into the “Asset Accumulation” phase.

I hope the stock market has been more gentle with you than it has with me!

Bests,

Don

The post My Personal Finance Pyramid Update – Lower (Upper Middle Class) appeared first on Money Reasons.

The reason is that you can get compensation for any defective item that is sold to you if the manufacturer doesn’t agree to replace the defective supplies. This deterrent should be an important part of your business strategy and financial planning.

There are certain things that you should know about liabilities related to goods and supplies and its main types.

Manufacturing liabilities

This category is for the case of manufacturing defects. You can get equipment, machinery, parts or items under the manufacture process that may be faulty. This hold specific important if you are buying bulk items. Any injury that you sustain due to the defective piece would also be covered under the manufacturing liability.

Design Liabilities

This covers the domain of design based defects. This is in the case you asked for specific design and the faults in them have had a negative impact on your business, or you used the design in your product and it has caused some malfunction or backlash from consumers.

Failure to warn

This aspect is applicable in cases where the possible harm or the occurrence of malfunction could have been avoided by warning instructions. When the item that you have bought or used from a manufacturer doesn’t carry any warning, it can be sued for failure to warn  case. Often, the goods are advertised in certain way, but nothing is revealed about how they may cause harm. False advertising can also be taken as a claim and used for seeking justice.

The compensation that you are going to get would be dependent upon on how the court assesses the gravity of the flaw and its consequences. For instance, in the case of negligence claim, the situation would be assessed on the grounds of negligence. If you are able to substantiate that the item was not good to begin with, it’s possible to get a good amount of compensation.

Another way to augment the compensation is by contacting other people/businesses who may have used the product and experienced similar discomforts. In this way, a combined case can be made to seek greater compensation.

The idea is to be aware of the working of the system. Your financial security can be ensured if there is legal protection behind it. Having a lawyer serves as a pre-emptive strike and also allows you to have maximum possible compensation.

The protection of your business can be ensured if you are able to minimize the threats to it. Background checks also become very important in this regard. These liabilities are not merely for people who are in business, but anyone who has used any product that harmed them. You would be amazed by the history of such cases and the kind of damages that have been awarded in all these years.

The post Awareness of Liabilities and Your Business appeared first on Money Reasons.

So unlike other carnivals that have a theme, this one is just what I’m typing here and a humble apology from me.  The articles below are still top notch though, so I hope you enjoy!

Dividend Growth Investor @ Dividend Growth Investor writes 2013 Dividend Achievers Additions – The Broad Dividend Achievers index includes 216 companies which have boosted distributions for more than ten consecutive years in a row. Since 1996, the Dividend Achievers index has managed to outperform the S&P 500 total returns.

Janice @ http://whizsilver.com writes The 5 Mistakes You Don’t Want To Make As A Young Investor – This post talks about my investing mistakes as a fairly new investor.

K @ Money Counselor writes Payday Loans for Dummies – You’ve probably heard of so-called “payday loans.” But do you really know how they work and why they’re a financial death trap?

Emily @ Evolving Personal Finance writes Debate over Outsourcing Cleaning – My husband is adamantly against outsourcing cleaning, even if we are both working and have small children. Is paying for cleaning a worthwhile luxury for you?

Darwin @ Darwin’s Money writes What’s a Stay at Home Mom Worth? – What is a stay at home mom worth? It’s a tough question to answer and this recent study thinks they have the answer. I beg to differ. Weigh in on how you’d value moms.

AxeMan @ Axe Debt writes Why Credit Cards Are Not For Everyone – Credit cards are not bad in and of themselves. Millions of people use them responsibly every day and even pay them off each month. However, for some people having a credit card can be a bad idea.

Jules Wilson @ Faithful With a Few writes A Neighborly Gesture – A short phone call and a small gesture made a huge difference in the relationship between us and our neighbor. How can this apply to your relationships?

Jules Wilson @ Fat Guy,Skinny Wallet writes I’ve Been Having A Horrible Time Lately – My wife and I have both been having a rough time both physically and mentally. Find out how this rough patch has hurt our health and our finances.

Arnel Ariate @ Money Soldiers writes Seven Easy Ways to Cut Spending Now – These simple steps you can take today will help you lower your expenses right away. Credit in the form of a loan or credit card can be useful but establishing savings within your current budget can go a long way.

Lance @ Money Life and More writes Don’t Mix Family, Friends and Money – Our Townhouse Rental – We were going to rent our townhouse out to someone we didn’t know, but my fiancee mentioned that one of her friends wants to move soon and loves our townhouse so we decided we could rent it out to her instead. That was the plan… until things went wrong!

Jordann @ Making Sense of Cents writes How Being A Minimalist Has Helped My Finances – I didn’t always have minimalist tendencies. Though I never considered myself a collector, I did have a ton of clothing and furniture while in University, and the size of my book collection growing up bordered on the absurd side. For the last few years though, accumulating large volumes of stuff wasn’t really on my agenda anymore, it just didn’t hold the same appeal that it used to.

Amanda L Grossman @ Frugal Confessions writes The Amish Next Door: How they Manage their Children’s Money – As some of you may know, my father is a full-time Amish taxi driver in Lancaster County, PA*. One of my father’s main employers is a man named Leroy.

Abbie @ Finance Junkie writes A Student Guide To Surviving The Summer – Parents of students and students- Have you figured out your plans for summer yet?

IMB @ Investing Money writes Ways to Search for Great Stocks – Looking to invest in stocks? You need to know where to find the good ones. Read here for finance and investing tips on finding great stocks to invest in.

Hank @ Money Q&A writes How to Find Your First Accountant And Personal Finance Team Member – Finding a trustworthy accountant can be a difficult decision. But, here are some tips to help make finding an accountant the easy way to help your finances.

Ryan @ Cash Money Life writes How to Safely Invest Your Money – Is it even possible to safely invest your money? Yes, it is! Here’s what you can do to keep your money as safe as possible.

Maria @ The Money Principle writes A forced experiment in minimalism – I am in Cape Town and my luggage is somewhere else in the world. May be the union between minimalism and me is not one of passion but I am up for it!

Evan @ My Journey to Millions writes Mo Money Means Mo (IRS) Problems – I have always assumed that with an increase in income, especially business based income, increases your risk to an audit from the Internal Revenue Service. My thought process is that it just makes good business sense.

Jester @ The Ultimate Juggle writes Simple Ways to Improve Your Finances – Everyone wants more money and less stress due to money, but it’s not always as easy as wanting it to happen. But, it doesn’t mean it’s impossible. In fact, getting a handle on your money and improving your financial situation is often easier than it seems.

Steven @ MyDividendStocks writes Life Insurance for the Terminally Ill: Can it Be Obtained? – Receiving the news that you, or a loved one, has been diagnosed as “terminally ill” with a short life expectancy remaining deals a blow that is emotionally devastating. Furthermore, it can be financially devastating, especially if you or your loved one doesn’t currently possess the life insurance that would secure other loved ones when the time comes.

Matt @ Living in Financial Excellence writes Time Management Challenge: Full-Time School & Full-Time Work – A while back I decided to take advantage of some GI Bill benefits that were still available to me. I returned to school to pursue a Master of Business Administration (MBA) degree. The good news is I’ll graduate without needing any loans. The bad news is in order to receive my full GI Bill benefits, I have to attend classes at least half time.

Kyle @ The Penny Hoarder writes Get Paid to Exercise – I’ve been an avid runner for over 20 years now, and I’m usually out hiking, biking, or generally moving somewhere. There’s nothing quite like the feeling of being able to lace up my shoes and head out the door after a long day.

A Blinkin @ Funancials writes The Honeymoon is Over and the Dollar is Weak – Trading currency can be a great way to make money. The Foreign Exchange is a market that never sleeps. Due to different time zones in different countries, you can theoretically trade any hour of the day. Another advantage is that there is no such thing as a “bear market.&

Luke @ Learn Bonds writes Using Ray Dalio’s 5 Principles to Reach Your Investment Goals – Here’s what you need to know about the 5 principles to reach your investment goals.

BARBARA FRIEDBERG @ Barbara Friedberg Personal Finance writes STEP UP NOTES OFFER HIGHER YIELDS THAN CASH – Bond investing product; Check out Step up Notes? Similar to a bond ladder.

Sam @ Simplefinancialfreedom writes Freelance Jobs, Working From Home and Surviving – Among the wonderful things that the internet has brought us, being a freelancer writer or designer is one of the best.

Jacob @ AllPersonalFinance writes How to Get Into the Savings Habit – One of the most important things you can do to achieve financial health (and maybe even some measure of financial independence) is to save money. However, it can be very hard to get into the habit of saving.

Don @ MoneySmartGuides writes Starting the Home Buying Process – The home buying process can be a stressful one at times. It’s key to have a plan before starting so that you purchase a home you can afford.

Debt Guru @ Debt Free Blog writes Top 10 Things Affecting Your Credit Score – You want to be sure you have good credit, but sometimes it’s hard to identify why your credit is unsteady. Read here to see the top 10 credit changers.

Tushar @ Finance TUBE writes 5 Crazy small business ideas that worked – Have you got an idea that seems just too crazy to catch on? There are many small business owners in the world who have succeeded in making a living doing unconventional things – and most often they’re inspired by financial necessity or adversity in their own lives.

SFB @ Simple Finance Blog writes Different Types of Home Loans – Are you in the market to buy a home and planning to apply for a loan? Gone are those days when a buyer would have to choose from among a few kinds of home loans.

Wayne @ Young Family Finance writes Cutting the Cord: Lower Cost Alternatives to Cable – Cable’s a major part of most homes for young families. We know you like your cable, but it is costly. Read here for tips on cheaper choices.

Mr. Frenzy @ Frenzied Finances writes The Part-Time Pros: 10 Part-Time Jobs Worth Your Time – Interested in making a few extra dollars? Need another steady source of income? Here are ten part-time jobs worth investigating, worth your time.

ETZ25 @ Entertainment Timez writes AIG Is Being Attacked – Today after an incredible 1st quarter, AIG is being attacked by investment behemoth Goldman Sachs. This they can still thrive? I do!

Daniel @ Sweating the Big Stuff writes 5 Crazy Ways People Waste Money – Some people like earning more, and some people like being frugal to save money. Nobody likes to waste money, so be sure you’re not making these mistakes!

Jerry @ Repaid.org writes Debt Reduction vs Building an Emergency Fund – Paying down debt and building an emergency fund. With little cash to accomplish either one, which is more important?

Corey @ Steadfast Finances writes How to Drastically Reduce Your Spending – In this poor economy, many people find themselves having to drastically reduce their spending in order to make ends meet. However, there are a lot of people who leave things hanging in the balance for too long. Then their only options are to have cereal for dinner and steal loo paper from the company’s bathroom.

Michelle @ The Shop My Closet Project writes Important dreams don’t have to be limited to an age. Read my examples of people that accomplished there dreams and overcame their age. – Dreams don’t have a shelf-life

Ashley @ Money Talks Coaching writes My Dad Passed Away – Last month I wrote about how my Dad was diagnosed with Cancer. Well, he passed away on April 12th. Just 4 days shy of his 60th birthday.

Corey @ 20s Finances writes How I Survived College Financially – Here are simple ways that I earned income throughout college and how you can do the same.

Kevin @ Passiveincometoretire writes Using Technology to Improve Your Small Business – As a small business owner, you may think you don’t have time to keep up on the latest technology. Think again. You can improve your communication, efficiency and productivity by investigating the software, electronics and online services available to keep your business humming.

Lauren @ L Bee and the Money Tree writes A new TV-Want or Need? – Well actually, I would have to argue that yes…. yes I do NEED a TV. But first, let me explain a little bit about my predicament. I have a little baby of a TV-32 inches, bought on sale from the Best Buy at Lincoln Center in NYC for only $200.

Ray @ Squirrelers. writes Japanese Stock Market Up Sharply: Interesting Historical Trends Emerge As Well – It’s often said by many people that diversification is important, particularly with investments. A case for global investment diversification could be made by witnessing the staggering returns of late in Japan’s market!

LaTisha @ Young Finances writes Pay Off Student Loans or Invest? – If you’re a college graduate in your twenties, you may have student loans to pay off. The average student finishes school with $27,000 worth of debt.

Ted Jenkin @ Your Smart Money Moves writes What Do I Give For A Graduation Gift? – Read this article to find out some graduation gift ideas for your graduate that fit your personal financial budget!

harry campbell @ Your PF Pro writes Reader Question: Should I Close My Old Credit Cards and Open a New One? – When you’re first getting started with building credit, your score will be dominated by the low age of your accounts, the total limit of your accounts and your utilization. There’s not a whole lot you can do about the low age of your accounts other than wait it out. You always want to keep your oldest line of credit open even if you rarely use the card.

Tushar @ Start Investing Money writes Are You Ready for Risky Investments? – Most of us are aware that risky investments come with the potential to bring us bigger rewards. The higher the risk the bigger the potential reward can be. However, it is all too easy to get caught up in the idea of significant rewards.

JP @ My Family Finances writes Taking Care of Kids While Trying to Stay Financially Stable – Learning how to prioritize can help you make the most of the money that you are earning now so that you can manage the future efficiently.

SBB @ Simple Budget Blog writes Get to Know Your Travel Accommodations – Planning a holiday? There are many different temporary travel accommodations. Read here for differences between hotels, motels, and everything in between.

krantcents @ KrantCents writes How to Become Minimum Wage Millionaire – Can you earn minimum wage and still become a millionaire? The short answer is yes! I am sure you have heard of so called poor people becoming millionaires, although not overnight. I am not talking about professional athletes, entertainers or lottery winners.

Mike @ Personal Finance Journey writes ETrading online an observation and adventure – An impression of where to start and whats involved in Etrading for the new investor and the possibilities for your personal finance growth and plans.

Suba @ Broke Professionals writes 5 Things I Learned From Selling My House – Selling my house highlighted every real estate mistake I’d ever made. Now I’m applying that knowledge to buying a house for the second time.

Miss T. @ Prairie Eco Thrifter writes Exploring a New Town – Moving away to another town can hinder your ability to be creative and stay busy. Luckily, there are many ways to find out what a town has to offer. I’ve outlined many of those ways below.

Joe @ Midlife Finance writes 10 Ways To Ditch The Rat Race… For Good – We’ve been working actively for some years to tell the rat race to chase its own tail and we’re making progress, thanks to these ideas:

Steve @ Ready To Quit My Job! writes Don’t Quit, Negotiate A Severance Package Instead – Even if you don’t like your job anymore, don’t walk away with nothing. Negotiate a severance pay instead of quitting.

Little House @ Little House in the Valley writes Space Invaders: How to Create More Space at Home – If you want to create more space at home, you will have to start making some compromises and get organized. Here are some easy ways to get started:

Roger the Amateur Financier @ The Amateur Financier writes 7 Things You Can Make Rather Than Buy – There is a tendency in the modern world to simply opt for the simplest method in life.

Jason @ Live Real Now writes 3 Ways to Keep Your Finances Organized – Everyone has a different system for keeping track of their finances. Here’s the method that works for me:

CAPI @ Creating a Passive Income writes What to Do When Investing with Inflation? – Investors must move forward with financial intelligence, and things like inflation make it tricky. Read here to learn how to invest with inflation.

DJ Wetzel @ Money for College Project writes College Students Trash is Everyman’s Treasure – College students throw away millions of dollars of items each year. You find these items in college dumpsters and resell on ebay, craigslist, or at a yardsale

Crystal @ Budgeting in the Fun Stuff writes Need Your Life Insurance Questions! – Hi everybody! I need you to ask every life insurance question that you have.

Adam @ Money Bulldog writes iPad vs Laptop ~ In the Hand or In the Lap? – The iPad is the ‘cool’ choice for many portable computer buyers, but how do they compare to laptops and which is right for your needs? Find out here.

Kanwal @ Simply Investing writes Top 5 Things Mutual Fund Companies Don’t Really Want You to Know – Last month I had the opportunity to write a guest blog post for Modest Money. In this guest blog post I covered the top five things mutual funds companies don’t really want you to know: 1. The majority of mutual funds underperform the stock market 2. Good fund managers are lured away by other mutual fund companies 3.

Crystal @ Married (with Debt) writes What Happens To A Dream Deferred? – What happens to a dream deferred? With my husband’s career facing a crossroads, it’s a question I can’t get out of my mind lately.

Adam @ Money Rebound writes Secrets of Saving ~ Why You Should Start Saving Today – Due to decades of easy credit many people have forgotten how to save money. Find out why you should start saving today!

Dividend Growth Investor @ Dividend Growth Investor writes Procter & Gamble (PG) – A dividend stock to hold forever – I consider Procter & Gamble to have the qualities of a perfect dividend stock, which should be a core holding for any serious dividend investor. I would consider adding to my position in the stock on dips.

Jacob @ AllPersonalFinance writes Why Entrepreneurs Need to Learn Finance ASAP – While some entrepreneurs think they can just get a “finance guy,” there are some really good reasons for developing your own financial skills. The financing portion of your business is the bottom line, right? Finances dictate decisions, form possibilities and ultimately drive a business.

Grayson @ Debt Roundup writes Money and Morality – How Much is Yours Worth? – There is always a fine line between money and morality. When I was running my business, I was propositioned by a gentleman to sell him my customer data for a hefty price. This was burning a hole in my moral compass. Find out how I handled it.

DPF @ Digital Personal Finance writes 8 Ways to Save on Gas Expenses for Your Car – Cars can be an expensive part of one’s budget, and gas can really add to that every month. This post shares 8 ways to lower gas expenses for your car.

Jefferson @ See Debt Run writes Strategies to Avoid Slipping Back Into Debt – After paying off a large volume of consumer debt, the months immediately after can be dangerous. You probably want to make up for lost time and finally purchase some of the items that you have been waiting for, but you need to be careful not to overdo it.

Brent @ PersonalFinance-Tips writes How Can A First Time Home Buyer Get The Best Deal – Owning a dream house and the feeling associated with it is perhaps one of the best in the world. The presence of a roof above the head which solely belongs to you is infact a great achievement. House-owning is a vital aspect in any person’s life. Your financial, mental and physical wellbeing depends a great deal on a home.

Kevin @ 20smoney.com writes What is the Actual Cost of Being Sick? – To live life to our full potential, we need to be healthy.

Tony @ We Only Do This Once writes How to Reclaim Your Life from Clutter – It’s Spring, so there is no better time than now to start reclaiming your life from clutter. Imagine your ideal space in your home. Start with one small room. Can you visualize what your room looks like without clutter? Start creating the atmosphere you want to live in, one trinket at a time.

Irfan Ahamed @ Everything About Investment writes Generating Passive Income: Make Your Money Work for You – How would you feel if the money in your bank account brought in even more money, with minimal additional effort? That’s what it means to have passive income. This is how the rich continue to gain wealth and generate additional income, enjoying a simple living with little to no financial stress.

Pauline @ Reach Financial Independence writes Pauline’s jacket and life priorities – I was criticized for wearing the same jacket but my finances are strong and I am reaching my goals. Peer pressure does not help for that.

PK @ Don’t Quit Your Day Job… writes Predicting S&P 500 Closing Prices – May, 2013 – Using the options market, I once again find the disparities with breakeven and attempt to predict the future! (In the past, this has met with poor results…)

John S @ Frugal Rules writes After the Swipe: How Do Credit Cards Work? – Many think that little happens after you swipe your credit card. The truth is though that a number of things happens and all in a very short span of time. Be mindful of that next time you use your card and be aware of how easy it could be for someone to steal that information.

Mr.CBB @ Canadian Budget Binder writes Working Towards A Debt Free Lifestyle In 8 Steps – Working towards a debt free lifestyle is possible, that is if you really want it bad enough. I’m sure you all know that the 8 steps are only stepping stones, meaning one step leads to another.. You may only need 1 step but the first step may be the most important of all. You can make that happen.

SB @ One Cent at a Time writes Few Cost Effective Ways for Cooling your Home – How to keep cool without running high Air Conditioning bill? This article talks about some techniques we used to beat heat in our childhood in India where AC was a luxury. It has some of the methods you can use now to reduce the electricity bill.

R.J. Weiss @ The Insurance Protection Blog writes Auto Insurance for Teenage Drivers: 7 Costly Insurance Mistakes Parents with Teen Drivers Make – Auto insurance mistakes parents make with teen drivers, that cost time and money.

Jules Wilson @ Faithful With a Few writes Mother’s Day Traditions – I feel Mother’s Day should be celebrated however the mom wants to,instead I felt obligated to go to a family Mother’s Day celebration with aunts, uncles, grandparents, and cousins.

Jason Hull @ Hull Financial Planning writes Why Personal Finance Gurus Are Like Free Schooling – They’re good for the basics, but what if you need more advanced concepts?

Philip @ PT Money writes 19 Fun Summer Jobs for Teens and College Students – Summer is almost here! Don’t waste this summer away, but instead get valuable work experience in one of 19 fun jobs.

Lance @ Money Life and More writes Best 0% Balance Transfer Credit Cards of Summer 2013 – If you’ve sworn off debt but are trying to dig your way out, 0% balance transfer credit cards can be a great tool. You have to know that you’ve completely sworn off incurring any more debt in order to play the 0% balance transfer game, but if you’re certain then you can save a ton of money by taking advantage of some of the best balance transfer credit card offers.

Paul @ The Frugal Toad writes Frugal Living with Children – Lessons From Mom – With Mother’s Day fast approaching I am reminded of the many lessons my Mom taught me as a child. Be respectful always towards others, if you fall, pick yourself up and try again, and make the most of what you have. I was lucky to grow up in a family with six brothers and sisters, we learned to share and to be resourceful. It is this last lesson that I’d like to share some memories..

Hope you enjoyed!

The post Yakezie Carnival Almost Forgotten Edition appeared first on Money Reasons.

One my goals this year was to increase my income by 50% more than I did last year.  I expected to increase my net worth with income from my online activities, but certain things haven’t panned out so instead I decided to focus my time and money on creating stock market gains.

401k Performance History

I accomplished my goal, and then some.  In fact, I doubled my income from last year instead of just increasing it 50%.  That said, it would require me to sell all of the stocks in my portfolio to realize that gain.   This creates a few problems for me.

1. If I sell my stocks, I will encounter a tax hit which I don’t want to pay since my withholdings aren’t enough to cover my gains.  And if you know me, you know that I hate to underpay my taxes.  I hate having to pay the government after a pricey Christmas.  It always puts a crunch on our finances.
2. The stock market seems to be a “goldilocks market”  meaning that everything is perfect for the market and it could keep going up.  This makes it hard to put money is cash when the market might rise 10 more percent, or even go sideways.
3. The market is starting to take on the looks of a parabolic curve.  When things go up too quickly, typically there is a correction period to get things back into a mode that’s normalized.
4. I have this believe that if I watch it closely enough, I think that I could get out before it hit the bottom of a correction.  Of course, this logic is flawed, and yet still I stay invested…

I have to wonder if the prudent person would take 20% this month, 20% next month or 2, then another 20%… until she/he only has 20% invested in the market.  I think the prudent person would never completely exit the market.   Then once the correction, or the parabolic curve is broken by going sideways for months, then and only then jump back in with some strategy.

Decisions, decisions…

Don

The post Am I Too Greedy In This Stock Market appeared first on Money Reasons.

There is a rule called “Pareto principle” that basically states that with 20 percent of your effort, you encounter 80% of your results.  So basically the more time you put into a situation, the less results you encounter.  When you put in a more time with less results, that’s called diminished returns.  And some people even claim that if you put too much time, the results actually go negative and you actually start to do damage to your goal.

I think I might be at that point in time.  I’m thinking and putting in way to much time in the stock market, but the benefits are questionable.  Some things in life (like investing) requires time and patience.

I’m currently following the stock market like a hawk, trying to increase my returns.  My primary stock I plan to hold for at least 2 years, and maybe much longer.  Each day I’m checking up on the stock, reading the thoughts and commentaries about it.

But is that time really worth while?

Based the Pareto principle, it’s obvious to me that I’m putting way to much time into researching the stock.  I’ve done enough work to know that it’s a good investment, and the business model is such that it’s not a dynamic company that could be easily wiped out tomorrow.  It’s stodgy and predictable, so the extra time I’m putting into researching it, and watching the daily valuation of the stock price, is a total waste of time and life.  I could use the research time for new leads instead of watching my favorite stock.

All that I said above is true, and yet it is still so hard to “not” watch my favorite stock.

If you dabble in the stock market, do you find that you have similar issues?

Bests,

Don

The post Am I Focusing Too Hard On Investments? appeared first on Money Reasons.

It’s the anti-thesis of Christmas where instead of receiving stuff, we get to toss stuff out!  Like last year, this year didn’t disappoint either!  We got rid of the following:

• Old, slightly rusty grill
• Plastic chairs and 1 soccer field chair
• Snow thrower (my dad still calls them snow blowers, and so do I sometimes).
• Razor scooter
• Kid Toys

Interestingly, this year it was different!  In previous years, we’d put the stuff down at the bottom of the drive, and late in the night, people would come by and pick them up, but this year they were early and everywhere!  First I wheeled down the grill, and while I was walking up the drive, someone stopped by and snagged it.  I went back down and asked if he needed help loading it, but he said he had a trailer with a ramp and he was going to wheel it up into his truck.  I watched and he did that right quick.

Next I put out the chairs, when once again when I got to the top of the drive a woman stopped and asked if she could have the chairs to which I said sure, I even ran up to the garage to get the soccer field chair for her.  She seemed happy.

Nothing was left down at the bottom of my drive, so I went backup and started to wheel down my biggest item… the snow thrower.  Once again, I got back up to the top of the drive when I heard a minivan stop.  Since this was the heaviest of the items and the minivan had a high gate, I walked back down to asked if he and his wife needed help loading it.  Since it was so heavy, I was afraid that this wife would have to help, and although I’m sure they could have done it… I was there already, so I offered.  Luckily for me, he had a buddy drive by with a pickup, and that was the perfect option.  We put it in the pickup, and away they drove.  They both thanked me and I wished them farewell.

I’ve lived at my house for 11 or 12 years now, but I just really started putting stuff down on “Everything goes trash night” starting three years ago.  Five years ago, I would have worked a bit harder to make the things I had last until they would totally break, and in fact, I did do that with my old lawnmower (Mean Green).  But this year, it was easy to part with my snow thrower and everything else.  I know that if I worked at it, I could have fixed the snow thrower, but it’s over 20 years old and there are much better models out now, so why not let someone else have it!  I’m sure it will make someone happy!

An hour later, I remembered that I wanted to get rid of my son’s razor scooter, so I rode it down and leaned it against the trash can.  Again, I was surprised when I heard a truck stop and just like a quick, cool breeze, it was gone!  Totally awesome!

Right now as I write this, I’m more content than on the real Christmas!  It’s funny how giving stuff (trash if you will) away can make you happy.  I know that I could have listed half of my old stuff on Craigslist and probably have made a bit off money, but this is even better!

Bizarro Santa

Happy Bizarro Christmas, everybody…  It was another great year for me!

Don

The post Everything Goes Trash Night – Bizarro Christmas Year 3 appeared first on Money Reasons.

My grandparents were in business, and in particular my grandmother was very business and finance oriented. As a young child (maybe 5 or 6 years old) I made a millionaire promise to my grandmother that someday in the future I would become a millionaire. She said surprised at my sudden “out of the blue” millionaire promise and said good and told me that she believe that I could do it if I tried hard enough. I remember her encouragement making me happy back then!

rich kid

My grandmother enthusiastically encourage me in my new goal and steered me towards creating a target age for my new potentially elusive goal. So after some thinking, I decided on the target age of 25 years old. To me at that time, it was 4 to 5 times my current age, which naively seemed possible to me at my very early age. I was a little off guard when my grandmother chuckled a bit. I started to question my goal and thought that perhaps it’s not possible after all. My grandmother then tried to explain to me that 25 years old was too young to reach such a status. Instead she suggested an age range between 45 to 55 years old, and even then she said it would be hard but doable. Back then, those ages seemed way too old to me. I reluctantly agreed to her proposed age range with the 55-year-old target date being the limit. She has since passed away, but I still intend on keeping my millionaire promise!

Now with some real world experience under my belt, even the “55 years old max age” seems hard to reach, but a millionaire promise is a promise so now I better hop to it! The problem is with the path that I’m currently on is that it doesn’t seem likely that I’ll reach that elusive millionaire status even when I’m ready to retire at 67 years old. Time to rethink the path that I’m currently on. The path that I’m currently on is a good path and should enable me to reach the goal, but not soon enough.

So what can I do to meet my becoming a millionaire promise in the given age range?

• Work both harder and longer at multiple sources, then investing the money earned so that it will grow passively and hopefully right quick!
• Invest smarter.  With three brokerage accounts, I can experiment in each one to flush out the optimal investment strategies.
• Save more money by purchasing more frugally. Instead of spending money eating out for breakfast and lunch, I should pack both (and I have done this in the past)!
• Use credit card rewards more intelligently. I’ve done okay with my credit card rewards points, mostly buying house computers for the family, etc.
• Think about finances more. The more you think about it, the more focused you are, and the more opportunities will be seen.
• Buy Real Estate. If I borrow money for the purchase, in theory, this should be good debt and doesn’t hurt my current finances, at least if I can rent the property out.
• Watch TV less, watching TV is a huge time and life waster in my option (except “Mad Money”). An occasional movie or maybe 1 or 2 shows a week is okay though.

Starting next month, if I really focus on the points above, I have a good chance of reaching my long ago promised goal of obtaining millionaire status.

We’ll see…

Don

The post Is A Millionaire Promise Wrong? appeared first on Money Reasons.

Like any skill-based game, the more you think about and practice with it, the better you become (hopefully).

I’m finding that in many ways investing is very similar to a game such as Risk, or even Chess.  Investing involves losing money as much as winning money. Much like skill-based games like Chess, you lose pieces, but sometimes you have great gains with one piece, and sometimes you hold onto that piece until the end of the game ends or at least for a long time.

A lot of people lose some money with stocks and get disillusioned with the entire process and quit.  But hardly anybody wins all the time with the stocks that they purchase.  It’s a matter of experimentation and experience.  I’ve had 6 bagger (stocks that increase their value 6 fold more than the purchase price), and I’ve had stocks that went to 0 (painful, but luckily it’s been just a few).

I’ve learned to look at more than just the financial statements, and I’ve learned to look at more than just the stock story.  I’ve seen some companies with incredible products that were brilliant go broke because the product was too expensive compared to competing products.  I’ve also seen a few stocks with rock solid financials but later it was revealed that the books were cooked, or at least questionable.  I’ve also seen a few stocks that were solid financially for many years, and that are now on the decline because of a changing business environment (think Pitney Bowes).

I’ve also learned that the management team (and especially the CEO), matters!  Look at Apple after Steve Jobs passed away for confirmation of a stock that looked like it would continually go up, and now has fallen quickly and some even believe has a questionable future.

I’ve also learned that I can’t do it like Warren Buffett.  His system is best done by him alone.  Considering he doesn’t even have a computer in is office at work really demonstrates that I won’t even invest like him.  That said, there are definitely techniques that I can learn from Warren, but in the end I would have to come up with my own system.

I have learned to diversify my stocks, and only put so much into each stock investment.  If I think I’m pretty sure a stock is a winner (much like Baidu was), then I invest more in such a stock, but those opportunities are rare for me.

I’ve just scratched the surface, there are many other facets to consider, such stock rotation during the year and other ever-changing strategies…

Bests,
Don

The post Investing Is Like A Skill Based Game appeared first on Money Reasons.

So how did the serfs make money? Their lords didn’t pay them money, although the nobles did let the serfs use the land that the nobles owned… In fact, the nobles mainly took their stuff like an ant sips the sweat off of an aphid bug. The nobles let the serfs keep some of the food to survive on, and some were even able to sell their food to merchants (the very small middle class back then, less than 9%) for money. So some of the serfs had money, but without a way to make it grow, they were still very limited.

Now the kicker is that although we have more opportunities since interest isn’t illegal anymore, wealth distribution isn’t really that much different from what it was like in the old days, sort of. I can imagine the net worth of individuals back then being practically flat until about the 95% of the population. Then at the 95% of the population line, the line slopes up dramatically, probably much like the wealth line does for the 1% vs the .01% today.

The difference is that today we own land and have our own houses, so this means that the wealth line is much more gentle slope than the dramatic rise of the middle ages. Equity in houses, not matter how many renters claim otherwise enables the bulk of us to have at least a little wealth!

So are we financial serfs? I don’t think so, but we’re still not that much better off except for the equity in our houses (at least for the majority of us). I think that a big part of our problem is that we aren’t raised financially savvy and shy away from investments of the financial sorts.

Bests,

Don

The post Are We Financial Serfs? appeared first on Money Reasons.