We all know about the U.S. real estate boom that occurred in the first half the prior decade.  In the early 2000′s, real estate shot up in value in a ton of markets around the country.  Existing homes increased in market value, and renovations were all the rage.  New construction was popping up all over the place.

Then, as we also know, things came to a crashing halt.   Home prices started to decline, and in some places they simply cratered.  There have even been $1 homes for sale in Detroit! Now, I don’t live there – it’s suburban Chicago for me – and haven’t seen anything remotely like what’s happened in the motor city.  Nevertheless, even vibrant suburbs here have seen big price decreases in recent years.

Not long ago, things started to change again.  I observed this earlier in 2013, where I asked: is this good time to invest in real estate?  It seemed at the time that prices were stabilizing, and perhaps the window of opportunity to get great deals may be closing.  What I didn’t think, of course, was that the market had become strong again. Just stable.

Well, a very recent conversation I had with a couple makes it clear that the market is more than just stable in some places.  In certain markets, it’s apparently a seller’s market once again.  To the point where homes are selling quickly once on the market, as in within a few days!

This couple told me that they were looking for a home in a few suburbs that I would consider to be upscale.  They made it seem like they were looking for something at more of an “entry level” price point in those suburbs.  Now, an initial price point there might be in the half million range. Not exactly chump change, to say the least.

But this couple – really nice people – said that it was actually really hard to get a home in their target community.  The homes at the high end – for the truly wealthy – sat on the market for a while.  But the more reasonably priced homes were going very quickly, within a few days as I mentioned earlier.

Quite a difference from what was the case not too long ago.  I’m not sure how many locales would see real estate as being red hot in the last 5 years.  Even further, I think there are still many places where properties are not seeing buyers stampede to make purchases.  I say this because I’ve followed prices in a few other areas, not far away and a bit lower priced, where homes still seem to be staying on the market for a while.  Prices have stabilized to be sure, but no increases.

So, maybe there is a selective real estate rebound.  Some areas are seeing a seller’s market, while others are still a buyers’ market.  Even if the specific locales are close by each other geographically.

My Questions for You:

How is the residential real estate market near you doing?

Are you still noticing a buyer’s market where you are, or is becoming more competitive again?

Do you think we will see a full-scale housing rebound soon, or is this simply fool’s gold?

Related posts:

1. Is This a Good Time to Invest in Real Estate?
2. Underwater Mortgages and the Current Real Estate Market: Buying Opportunity or Not?
3. Is Home “Ownership” Different From What Meets the Eye?

But first….

The Joy of Finding Money

First, I have to ask: do you get enjoyment out of finding money? Do you remember times you’ve found money?  I answer yes to both.  What’s interesting is that usually, it’s not a whole lot of money that’s found.  However, the enjoyment from finding it seems to be a bit disproportionate compared to what’s actually found.  For whatever reason though, it’s a thrill to find money!

It’s not like this happens to me all that often, but the most recent episode was just this past weekend outside a pharmacy.  I was walking outside toward the parking lot, and stopped in my tracks when I saw a few bills on the ground.  I did a double take, and saw that there were a 3 $1 bills!  They were just laying there right the middle of the sidewalk, sun shining on them.  Someone must have just dropped them.

Before picking them up, I sheepishly looked around.  Nobody was there.  Then, before picking up the money, I saw this huge guy in a truck which was parked the lot, about 20 feet away.  He looked like on of the guys from the old “Da Bears” skits from Saturday Night Live Fame.  He clearly knew I wanted to pick up the money, and was watching.  I motioned to him, as if to ask “I this yours?”.  He just shook his head saying “Not mine”.  Then shrugged his shoulders.

Might as well pick up the bills, right?  Nobody was around.  So, I did – and did a fist pump, kind of like Tiger Woods style.  I glanced over toward the truck, and the guy and a huge smile and gave me a fist pump too.  Then, he rolled down his window and said “you have to love days like this! Maybe you should buy a lottery ticket!”

Not, finding $3 isn’t exactly a big deal. Nobody gets rich from penny pinching anyway. Besides, it’s far less than minimum wage, and there’s some guilt feeling bad that somebody else lost the money.  I’d handle this differently if it was a large sum of money, of course.

However, there’s also something about finding a small amount money that makes one happy.  Maybe not as excited as the lady I saw who showed extreme excitement over finding money, but its fun nonetheless.

Posts I’ve Enjoyed from Around the Personal Finance Blogosphere

As mentioned up front, here are some recent posts around the web that I’ve liked, and would like to share with you:

Retire by 40 posted What advice I would give my 23 year old self.  I would have quite a bit of advice for my younger self! Can’t go back in time, but we can always apply our learnings to life going forward.  Also, if you have kids, you can impart your wisdom on them too!

Krantcents posted Is There a Right Time to Buy Real Estate?  His blog is a source of a lot of wisdom based on real-life experiences.

Narrow Bridge Finance posted An Amazing Trip to Israel on a Budget.  Find out how he took a trip abroad for less than $900 total!

Life and My Finances posted Advice for My Friend the Financial Disaster.  Derek shares a story about how he dealt with conversations with a friend with money problems.

Reach Financial Independence posted Cattle investment part III: they are all gone!  Interesting post on a true alternative investment.

Everyday Tips and Thoughts posted Hallmark Holidays.  I like her perspective on the importance of certain holidays, and also learned something new about the original intent of Sweetest Day.

Untemplater posted Top Sights in Australia for the Adventure Seeker.  You can tell I have traveling on the mind, after listing this as well as Eric’s low-cost trip post earlier! This one is more of a bucket list type of trip.

The Amateur Financier posted 10 Things to Include in a Will.  Good to be prepared, thinking of ones we love

Tight Fisted Miser posted How to Get Free Redbox Rentals. I used one of those codes for a free rental.

Have a great rest of the week!

Related posts:

1. Squirreling Gone Wild #12: Extreme Excitement over Finding Loose Change

This is because, as we get older, we are supposed to get wiser.  Not everyone follows this pattern, and I know that I have my blind spots.  But when it comes to taking on loans, I think I’ve progressed in my thinking.  Unless I need to take on a loan, I would prefer not to.  Paying cash for a car sounds ideal, and I say that knowing that the car I buy will be purchased more with needs in mind, instead of wants.

If you are going to take out a loan, I like the idea of trying to make it as short-term as possible.  I took out a 3-year loan, and couldn’t wait to get it over with.  36 months of payments, tormenting my bank account 3 dozen times.

What about the notion of a longer-term loan than that? I’m not talking about 4 years, or even 5 years.  I’m talking about 8 years! That’s right, there are 96-month car loans available!

Somebody please tell me why anybody needs to take out an 8-year car loan.

If a person really needs a car, why not get one for a modest price? One can get a car that gets the job done, going from Point A to Point B, for a few thousand dollars.  Admittedly, I wouldn’t want to do that – but if one’s finances require this, then it can be done.   If someone is really tight on cash, maybe it would require a loan to pay for such a car.

But not 8 years.

That’s the point – I can’t see how too many people have to take out loans of that duration.  If that type of loan is required, then my guess is that car is too expensive, and you don’t need it.  Simple as that.

There are plenty of things that could surprise people in life.  Illness, job loss, or any number of things could surprise us and impact our finances.  Why purposely put ourselves behind the proverbial 8-ball by taking out unnecessary debt obligations?  While debt-free living might not be feasible for everyone, purposely making our lives debt-burdened is something I don’t get.

I wonder what goes through the mind of someone taking on an eight year loan. Probably things such as:

“Oh, I MUST have this car. It’s my DREAM car!” 

Or, for the entitled person: “I’m not settling for some average car. I DESERVE a certain standard!”.

Or, for the Big Hat, No Cattle people: “I couldn’t imagine driving some used, no-name car.  What would people think? I need to keep up my image”.

Really, at the end of the car loan, the thing will be 8 years old.  Now, I’m a fan of embracing car longevity, and driving one a long time.  My past experience going past 220,00 miles can attest to that!  The only thing is, not all cars drive well for that long.  A car 8 years old may not be all that useful at that point, and may not have much residual value.

Maybe there are people that need such a loan. I just can’t come up with a good reason why!

My Questions for You

Do you think the concept of the 96-month car loan is as silly as I think it is?

Have you ever taken on a car loan? If so, how long was the duration?

Related posts:

1. Student Loans and Senior Citizens?
2. Do Payday Loans Help the Disadvantaged or Prey on the Vulnerable?
3. Private Mortgage Loans

In reality, the idea that this person would engage in cheapskate behavior wasn’t a total surprise.  She is the person who was obsessed with free food in the office, to the point of claiming to spend only $100 per month on food due to taking leftovers from meetings and department lunches.  It was something that she could eventually laugh at a bit, and really she took pride in it.  Or, should I say, threw her pride out the window by hustling for free things more than she hustled to get work done.  Hey, it was entertaining if nothing else!

The Frugal Co-worker on a Business Trip

Anyway, there was a point in time where a few of us had to travel to Philadelphia for a business trip.  It would have been a fairly short trip, just one full day there, and two nights.  We would get in the night before the meeting, have the meeting the next day, then stay that night and fly back in the morning.

So, we often collaborated on booking flights, to see if we could travel together. That part wasn’t really something I needed to do, and frankly I had no problem traveling alone, but the culture in the office was to have people travel together.  No problem, I can do that.  Three of us got on the same flight, but then this other person – let’s call her “Jane” – booked an earlier flight to Philadelphia on her own.

Then, the day of the meetings, we were all going to go out for dinner later in the evening.  Jane tried to avoid the conversation, then said she was going to be busy.  We thought maybe she knew people in town who she wanted to visit, or maybe she was just tired.  Nope.  Ultimately, she said that she only had a short period of time to go shopping, and had a lot to buy.

Why? She said that she could save on sales tax if she bought things in Philadelphia.  Apparently, the sales tax on clothing there was much lower than it was in Illinois.  So Jane felt that she had to maximize her time that evening to rush to stores to buy clothes and shoes.  When our meetings ended that day, she literally packed her bags and rushed out the door without saying goodbye!  She also took a different flight back the next morning, so we never saw her until being back at the office.

Now, I’m cool with people marching to the beat of a different drummer. Conforming can be overrated. That being said, when you’re dealing with people with whom you work – and the culture associated with that workplace – sometimes you have to be cognizant of “expectations”.  In Jane’s case, she blew off those expectations and a dinner with coworkers just to save some money shopping.

Was the benefit of saving some money worth the cost of alienating coworkers? Again, not that I cared that much – and frankly, I smile when I think about it. It was funny at the time! Yet, in reality it was weird and it bothered the other people on the trip.  I don’t think it could have been worth it for her to save a few bucks on clothes, in the bigger picture.

My Own Business Trip

I actually had a somewhat similar situation present itself to me a few years before that.  I was on a trip to Boston, where a group of coworkers and I were at a conference.  My boss was there as well, and all of us had dinner plans for that evening.

During the day,  a supplier talked to me about sports, just making small talk.  I had mentioned that I had always wanted to see a game at Fenway Park, and would have really liked to do so if I had time.  At that point, the salesman in him pounced like a tiger – saying that he had tickets for that night’s Red Sox game, and that he could keep a ticket for me. FREE!

What to do? I enjoy seeing different ballparks, and especially appreciate historic venues.  We have one here in Chicago (Wrigley Field), had another one a few decades ago – the old Comiskey Park - that I visited often as a kid before it was torn down in 1990.  I made sure to visit the old Tiger Stadium in Detroit before it was shut down back in 1999.  As you can see, I like the old parks, and Fenway is one that would be a treat to see.

But what about that dinner with the boss?

One might think I was shortsighted in my own way, but I actually turned the guy down.  Instead, went out to dinner with my boss and coworkers.  Sure, it was a really nice dinner.  But I have to say, going to the ballgame would have been much more fun!

Of course, it would have looked very bad if I chose a great fun evening over dinner with the group.  Perceptions matter, and ultimately our income matters more.  I thought it would have been penny wise and pound foolish to go for the free tickets and the great memories, instead of prioritizing the norms of the workplace.  I chose the latter, thinking of the bigger picture.

Besides, who’s to say that I couldn’t go to Fenway another time in the future?

My Questions for You

If you were that coworker, would you have taken advantage of the opportunity to save money shopping? Or, would you have given that up and conformed to the norms of the group and gone out to dinner with coworkers?

If you were me on the other trip, would you have taken advantage of the opportunity for a cool life experience on someone else’s expense? Or, would you have done what was expected on the job, and gone to dinner with the boss and coworkers?

Have you ever seen anyone lose respect by being cheap in any situation?

Related posts:

1. Squirreling Gone Wild #24: Cheap Hosts and Cheap Guests
2. Squirreling Gone Wild #21: Caveat Emptor
3. Squirreling Gone Wild #13: Youthful Mistakes

That being said, if you agree with me that rate of return is important, you might there has been something quite impressive happening with Japanese stocks.  The Nikkei has gone up significantly over the last year, and has given investors a fantastic return on their investments.  On May 9, 2012, the Nikkei 225 closed at 9,045.06.   Just one year later, on May 9, 2013, it closed at 14,191.48.   That’s a whopping 57% increase!

Of course, the S&P 500 has gone up too.  The increase over the same time period has been 20%, which is pretty impressive in its own right.  But still, despite the attention the U.S. markets have gotten with surging prices, what happened with the Japanese market is really worth recognizing.  Wouldn’t you like to get a 57% increase in the value of your stock investments?  I sure would, and wish I had paid closer attention and invested in that market!

Recent Monthly Returns

It actually gets even better.  In the last 3 months, the Japanese market has gone up 27%.  If one annualized that, it’s more than doubling your money.  Can you imagine an investment that successful?  If you took a $1,000 investment, and doubled it each year, you’d have over $1,000,000 after 10 years!

Okay, I know that this isn’t going to be happening, and we all know that.  However, I’m just trying to put into perspective how impressive such short-term returns are.  A lesson here is to pay attention to markets outside our own, and be open minded to different opportunities!

Historical Monthly Returns

If we look at patterns of stock returns for Japan’s stocks, there are trends that emerge.  You might recall an analysis I did of historical stock market returns, specifically of monthly performance of the S&P 500.  There, it was clear that over a 40 year time period (1971 – 2010), that some months have been better than others for stocks.  Here is a summary of the average monthly returns of the S&P 500:

January: 1.22%

February: -0.19%

March: 1.15%

April: 1.56%

May: 0.72%

June: 0.29%

July: 0.25%

August: 0.08%

September: -0.77%

October: 0.58%

November: 1.15%

December: 1.71%

A couple of things that emerge there are the concepts of Sell in May and Stay Away, and The September Effect.  Meaning, after May stocks don’t perform as well in the Summer months, culminating with September being a historically poor month on average.  Given the recent strong performance of the S&P 500 in reaching historic levels, is the long-term trend of a slumbering summer market something to think about now?  Is the market on the verge of a pullback?

In terms of the Japanese stocks, there are also monthly trends that emerge.   Here is the average monthly performance for the Nikkei 225:

January: 0.60%

February: 0.75%

March: 1.50%

April: 1.19%

May: -0.15%

June: -0.11%

July: -0.53%

August: -0.65%

September: -1.61%

October: -0.85%

November: 0.41%

December: 1.52%

As can be seen, there are clearly some months that the Japanese market does well, and others when it doesn’t.  Can you see the similarities between the S&P 500 and the Nikkei?

Now, this data above for Japan was pulled for 29 years – from 1984 to 2012.  A slightly different time period, but most years overlap and the findings are still similar.  The party starts to end in May, and things aren’t too exciting all summer.  September is the worst month for both markets across the pacific from one another.  Apparently, Santa visits investors in both markets

What to Make of This

Well, first of all, the recent amazing returns in Japan make it clear that we should be looking beyond our own borders for great investment opportunities.  This is something we know anyway, but to me it’s really more evident when looking at actual returns such as that 27% increase over 3 months.

Beyond that, this analysis shows that monthly stock return trends may have more to them that meets the eye.  If this happens over the long-term, and in 2 different markets, maybe there is something to this concept.

Perhaps, being at least somewhat active as an investor and paying attention to 1) different markets, and 2) historical trends, might have legitimate benefits!

My Questions for You

Do you look outside your home country for investment opportunities?

Have you been noticing the incredible returns in Japan?

What do you think of the concept of some months being better than others for investing, based on similar data for these 2 markets?

Related posts:

1. Stock Returns by Month: Interesting Historical Trends
2. The September Effect and Stock Market Returns
3. Historical Pattern: Stock Prices Increase on the First Day of the Month

Either way, kids can learn a lot from parents.  This includes gaining perspectives on not just life in general, but also on money.  There is financial wisdom to be gained at any age, including when young!

I recently had a conversation with my elementary school age daughter that showed that lessons can be learned when younger.  Frankly, it was pretty cool!

It happened when we were driving in the car on the way to school.  We passed by some houses that were newer and really nice.  I’d classify these as “McMansions”.  Big homes that seemingly dwarf nearby homes and carry property tax rates in the stratosphere.  Anyway, as we drove by, she remarked that it would be cool to live in one of those houses.  Then she asked if we could afford one.

I paused for a moment, and then said that those are the types of houses that most people would have to “stretch” to buy.  Being a kid, she chuckled and asked what I meant by “stretch”.

My response was to say that stretching to buy a home means that a family spends more than they’re comfortable spending or more than what they probably should spend.  They do this to buy a home that they really, really want – even if it’s a step above their price range, I said.

She immediately said: “Why would anyone do that. Wouldn’t that be stressful?”  She continued with: “Daddy, did you know that too much stress can cause a heart attack? People that spend too much money on some house they can’t afford could be making stress just for a house!”

When I heard that, I smiled.  I never directly told her anything like that before, but somehow she’s picked up enough about money, common sense, and life, that she was able to figure out that one should spend only what you can comfortably afford.

Being someone who enjoys personal finance, I have to admit: I was kind of proud

I’ve written before about emotions and buying a home, how a couple ended up letting emotions get in the way of sound decision-making.  Grown-ups make such mistakes, even bright, well-meaning ones.  To the extent we can get kids to think clearly and objectively about purchases, we’re helping give them a good foundation on which to handle money later!

My Questions for You

What lessons about money did you learn when younger?

Which ones helped you as you got older?

Related posts:

1. Teaching Young Kids the Value of Money
2. Wisdom from a Kid on Money and Health
3. Young Children Can Have Lots of Fun with Inexpensive Activities

I’ve been thinking a bit about why it’s so hard for so many people to get ahead, or even to get to a point where they’re comfortable with finances.  Personally, I’m working on this every day – diligently working toward being able to retire someday, while concurrently believing in responsibly living in the present as well.  Quite the balance, sometimes!  Yet, it’s not easy all the time for many folks.

When you think about it, the steps to seem quite basic:

Earn Money

Now, the current economic climate doesn’t make it easy to get work, much less the right work all the time.  That being said, if one pursues and achieves obtaining a solid college education – and possibly graduate school – there should be a better chance for employment.  It can be said that education and net worth might be correlated, in terms of level of education.

Beyond that, there is often money to be made when people are truly driven and motivated.  Maybe not a dream job right away, but money can be earned if one is tenacious and really wants it.  I wrote about persistency and wealth before, and think there is something to that concept.

Save Money

If we make money, then we should simply make sure that we save some of it. As long as we be sure to spend wisely, and discern wants from needs, we should be putting ourselves in position to save.  The more we save, the closer we could be to retirement and financial security.

Invest Money

So, at this point, we’ve earned and saved.  If we just keep money under the mattress, so to speak, it will lose value relative to inflation.  If we keep pace with inflation, our money isn’t working for us.  Thus, by understanding the importance of rate of return, we can begin to get our money to work for us.  The long-term impact of just a few percentage points of rate of return can be quite impressive!

So why isn’t it automatic that everyone will succeed?

Bad Luck

For some people, there can genuinely be bad luck.  I know that it might not be a popular notion among some personal finance bloggers, but I don’t think we can fully plan for everything.  Sometimes there is an element of randomness that we can’t control.  The notion of a crazy driver hitting us, totaling our car and causing injury, is something that can happen to anyone. Being prepared doesn’t matter.  Also, we might get unforeseen health issues no matter how hard we try to keep healthy.  All of these thing can be luck-related.

Wrong Approach to Education

No matter what statistics come out about the value of an education – along with common sense – there will be people who think it doesn’t matter.  As in, “college is overrated”, or “college isn’t for me”, or “I know someone who’s doing great, and he didn’t go to college”.  This is fully controllable, as long as we accept reality.

Also, sometimes people who do get a college education, and perhaps a graduate degree, might pursue a path that doesn’t pay off.  Spending time on a major that doesn’t yield and marketable skills might not be the best approach.  Additionally, choosing a school that is overpriced and causes one to take out excessive student loans can really set a person back financially.  In such cases, it’s possible that getting that education might actually cause long-term problems, simply because of the cost.

Bad Debt

Someone could work hard, and have all the right intentions regarding saving and investing, but could be saddled with debt that must be paid off.  I think a lot of this is letting emotions get in the way of making sound decisions.  Sometimes a couple might “stretch” to buy a home they really love – after all, a home is a special place, right? Well, thinking clearly they would view it as a place to live and one that’s a financial liability in terms of mortgage, taxes, utilities, etc.

Beyond that, there are the obvious suspects, such as buying a car that’s too expensive, or simply piling up credit card debt for consumer purchases.  Going into debt to buy things we really crave having, or feel entitled to based on a certain standard of living, doesn’t make sense.  Yet, I think just one or two big mistakes along these lines could totally derail someone.

Life Mistakes

This category includes some things that might not always be a person’s fault, but sometimes life happens.  People might choose a career path they genuinely hate, but do it anyway.  Sometimes folks get divorced, which can wreck finances.  Other times, people might do something reckless, such as text and drive or something silly like that which could cause them big problems via accidents.  You get the idea – sometimes people might mean well, but simply either make mistakes or have life events happen to them.

Lack of Attention to Health

We’re not talking about unexpected things in this case.  Here, we’re talking about health issues that could have been prevented or perhaps minimized, if a person took care of himself.  Examples of smart choices along those lines would be maintain a healthy diet, getting exercise, understanding the importance of sleep, and managing stress.

If we aren’t healthy, our ability to make money could be impacted or – in some cases – even curtailed.

Bottom Line – While the steps to wealth can seem straightforward, it often takes more than simply working hard to make money, save it, and invest it.  There are many decisions we make along the way with our lives that can either help us or get in the way of our efforts.  I suspect that how we handle these other decisions that shape the structure of our lives will influence our ability to reach our financial goals.

My Questions for You

Do you think that it’s actually easier than people think to get ahead? Or, is it more difficult than meets the eye?

What factors do you think help drive financial success?

What factors do you think get in the way of people’s plans?

Related posts:

1. Persistency Can Lead to Wealth
2. 7 Steps to Protect and Grow Income
3. 10 Things To Do This Year to Help You Build Wealth

I guess I do see the appeal to some degree, but it’s not a big deal to me.  Having views would be kind of neat, but I don’t get any excitement out of living right next to water.  Certainly not to the point where I’d even consider paying any more to live there.  Actually, in some cases, I think it’s riskier to live right on the water, and that properties right there should be worth less money that those a bit further away.

In other words, perhaps some waterfront property should be discounted as inferior to property a little further inland.

The reason?  Natural disasters!

Really, think about how destructive water can be.  Some recent flooding around here has gotten me thinking about how flooding and water damage can really wreak havoc for homeowners.  The thing is, it shouldn’t be a surprise in many cases.  We know that weather happens, so to speak, so in many situations it’s a matter of time before there is an impact on our lives.

I think of this river that’s nearby here, which it seems like every decade causes flooding – with people feverishly working to sandbag and protect property.  I wonder why on earth they ever bought property by the river in the first place?  They had to know that there is flooding periodically, so why build or buy there?

Sometimes, tragically, we see a lot of destruction in hurricane-prone areas.  I don’t see the appeal to building a home or buying a home right on the ocean, in areas that historically are put at risk by hurricanes or tropical storms passing by.   The same concept could actually apply to tsunamis.  Driving down the coast of Oregon some years ago, I was taken aback by seeing a tsunami evacuation route sign.  I had never heard of major tsunamis hitting the U.S. mainland.  Well, then we saw the tragic tsunami in Japan occur, and out come a few stories about how one could hit our west coast at some point.

It seems like another example of emotions and home-buying being linked sometimes.  Logically, we know that we could be put at risk financially – or even personally – by living in certain areas.  But, the emotional appeal of living certain places sometimes overrides logic.  Sometimes it’s a matter of thinking through the science of risk, as one would in other financial situations.

Ultimately, is the risk worth the reward?  For some it is, but I’ve always had a different view on it.  Put me in a place that’s devoid of those types of rewards, and I’ll be totally fine!

My Questions for You

Why do you think it is that waterfront living is so popular?

Is it appealing to you, or are you basically indifferent to it like me?

Do you think many folks think through such risks?

Related posts:

1. Snow Insurance? Be Sure to Manage Weather Risks
2. 5 Benefits of Living Trusts
3. Self-Insure Against Life’s Biggest Risks

There’s something about peace of mind, knowing that you’re helping to take care of your needs in the future. I’ve talked before about financial motivation, and for me it’s to some degree about making sure that I’m not old and needing money.  Better to err on the side of comfort in old age versus when younger, a time when it’s easier to do without certain things.

Speaking of taking care of future needs, I tend to keep a similar mindset when it comes to vacation days.  You know, when we work so hard, it’s good to take those days off to recharge.  I really think that consistently working long hours can be unhealthy, so for health’s sake it’s smart to disengage and chill.  Plus, we all want to have more time to spend with family or simply just travel and have fun, depending on where we are in life.  All work and no play is no fun!

So, I do value vacation days.  I’m fine with what I currently get, though in terms of vacation days by country, the U.S. and Canada tend to trail developed countries in the word.  We’re not lazy here.  We probably work harder than we give ourselves credit for. 

This is why I tend to carefully manage my vacation days.  They’re important.  In terms of needing days off for family, getting personal things done (doctor, etc), and taking time off to visit people, there aren’t a ton of days available to do everything you want to do.  Not to mention that unwinding and relaxing that I mentioned above, which is so important for us.

Here is my pattern: I’ll take very few days at the beginning of the year, maybe 1 or two in the first 6 months.  Then, I’ll take 4 days in the summer, to coincide with the 4th of July week. Kids aren’t in school, and with the national holiday, I can have the week off with just 4 (or sometimes 3) days off actually used.  Then, I’ll back-load the latter part of the year with more days off.

It’s almost like delayed gratification, and saving money so that I can pay the price first and relax later.  There’s something about having peace of mind knowing that you can get through the hard work, to get to your “reward” later in the year.

If we could figure out a way to earn “interest” on those days off that are saved much of the year, that would be even better

My Questions for You

How do you handle your vacation days?

Do you allocate them evenly though the year, or do you save them for any particular time period?

Do you feel like we get enough days off here in the U.S. and Canada, or are we an overworked society?

Related posts:

1. Vacation Days by Country: How Do We Rate?
2. Are Stocks Ready to Take a Summer Vacation?
3. Sometimes we Have Rainy Days – Even with Money

I got a promotional mailer recently that caught my eye, since it involved getting something in return for taking a test drive.  It actually involved getting a $25 Target gift card if you test drive a Volkswagen.  That’s right – you could get a gift card mailed to you upon completed test drive registration.  There was some fine print, but the bottom line promotional offer was a gift card for going through the test drive process.

Personally, I took a look at that and thought that it wasn’t an offer that I would take advantage of.  After all, I am not interested in buying a new car anyway – much less leasing one.  I tend to embrace the value of car longevity, and like to minimize frequency of car purchases.  So why should I take a test drive and collect anything for doing so, when it wasn’t a situation where I’d really be serious about making a purchase or lease agreement for one of those cars anyway? I’d be wasting time, both mine and theirs.

Then I started to think about it more.   What if  – hypothetically – it was a $50 gift card instead? Would I take the test drive in that case? No, I actually wouldn’t.  That increase in card value wouldn’t change my position.

If the offer was a $100 gift card? Well, in that case I would give it consideration.  If it was $200? I’d be cool with taking a test drive in that case, as long as it was workable in my schedule.

So, the amounts of the offer actually impacted my rationale for considering the promotional offer.  At lower amounts, I was thinking that it wasn’t worth wasting anyone’s time.  Yes, including theirs.  At higher amounts, such concerns faded away.  My viewpoint genuinely changed.

The point is that for many things, everyone has a price.  In this case, $25 isn’t mine

My Questions for You

How would your answers change as the dollar amounts increase?

What dollar amount of a gift card would get you to test drive a car?

Do you agree with the notion that for many things, we all have “a price” that would change decisions or behavior?

This post was included in an edition of the Carnival of Personal Finance, at Wealth Pilgrim

Related posts:

1. A House for the Price of a Cup of Coffee?
2. What Do You Think of Gift Cards as Holiday or Birthday Gifts?