The article describes how global powerhouse Allianz is trying to apply that technology to personal finances and investments,

Cathy Smith has spent months talking about aging — how many wrinkles someone may have when he’s 65 years old, the circles under his eyes, even hairlines. No, she’s not an expert in plastic surgery. Nor is she a makeup artist. Smith is the co-director at Allianz Global Investor Center for Behavioral Science. And her work? To help Allianz craft a tool that will virtually age investors in moments, in hopes it’ll be the push they need to take their retirement plans seriously.

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As digital tools become more commonplace in retirement planning, helping reps visualize how a client’s financial plans are materializing, a new tool is expected to bring those later years into another kind of focus. Instead of clients seeing their investments mature, Allianz wants investors to see themselves mature as well — in physical terms.

While the statistics they use seem laughable something just resonates with the conclusion being true.  Specifically,

Three studies from Stanford University, the last in 2010, showed college students who were virtually aged by about 45 years put away more money into a hypothetical retirement account than students who didn’t get to meet their older selves.

In the research, 50 college-aged participants were told they’d unexpectedly received $1,000 and were asked to divide the money into four buckets: retirement, a checking account, a nice gift for a friend or loved one, or on a special and expensive outing. Students then donned virtual reality goggles, with a select group shown a version of their 70-year-old selves. Afterwards, they were asked to divide up their money. The results showed that students who virtually met their aged avatars saved twice as much for retirement versus participants who only met their current selves.

I am not sure how many people really read that statistic in the magazine, but what kind of study only has 50 participants nevertheless between 3 studies.  What happened in the other 2 studies? Ignoring the studies, doesn’t the conclusion just seem correct.

I believe it is human nature to avoid negative repercussions and thus showing someone an older version of one’s self we would that to believe that the person is well taken care of, otherwise, because our only other option would be to pray for Doc Brown and the flux capacitor.

Would Numbers or an Older Version of You Make You More Aggressive in Saving for Retirement?

We all know that personal finance is personal and seeing I think this upcoming technology can revolutionize Retirement Planning but it makes me wonder about what is more effective:

• A Spreadsheet/Document which shows just how far away the goal of a comfortable retirement is OR
• A picture/avatar of Future Evan

For me, personally, I would guess the spreadsheet, but I don’t think I am particularly normal when it comes to personal finance issues.  I mean I do run a boring bad ass personal finance blog.

What would get you moving more – a picture of your future self or a spreadsheet that shows you are broke?

I, like every other American, have and use facebook, but I, like every other American, use google and I don’t own that stock either. I, like every other American, use Microsoft products, but again, I don’t own that stock currently.  Just because something is used doesn’t mean it is priced correctly as a Stock.

What I do see is a company that is being valued at 75 to 100 times its earnings which my gut screams is lunacy in toady’s market. Yes, it does have a moat with a 900 million member head start on any competitor and yes facebook has a passionate CEO but the valuation seems a little crazy to me right now.

I could see maybe a purchase on opening day in the hopes that the market goes crazy, and then selling shortly thereafter or even purchasing one of a few companies that guy in way before the IPO.  MoneyWatch provides 6 publicly traded companies that own Facebook shares prior to the IPO maybe purchase those companies in the short term?

Although as of this morning LNKD in is selling at a crazy 600+ P/E so maybe I am the crazy one. LOL.  Since I am going to go with me being the crazy one don’t listen to anything I say on here as investment advice.

Do you have plans to buy shares when they go public?

In my goals and objectives post I said,

I freaking love creating streams of income, it is my passion.  I would love to have 4 or 5 great ones.  My Journey to Millions is an amazing one, as is an offshoot of this blog that I work with a partner on, and my job is number 3 (and way too big in comparison to the first two lol).  My goal is to create a 4 and 5 this year.

They will obviously be a lot smaller than the 3 already up there, but if I can start to get that trickle going I’ll be happy.  I have two projects that are getting worked out (both websites but not blogs), so my goal this year is to get streams of income 4 and 5 off the ground.

We are approximately 5 months into the new year and I have yet to get 4 or 5 off the ground and that just pisses me off.  I have created a new site recently and re-did another site but both are far from an income stream.  The new site is a blog written by two of my really good buddies and myself and is about all issues that concern being a man called Manceptional, and the re-done site is ran by one of the same buddies and myself and it is a free baby birth date guessing site called Pregnancy Pool.

My Journey to Millions isn’t a big site, but when I create content it is often picked up and commented on.  As such it seems that  have forgotten how hard it is to build a website to the point where it throws off an income.

Am I giving up? Hell freaking NO. 

I just have to regroup my thinking – determine what’s working for me and what is not in terms of current income as well as cultivating those little trickles, as well as digging new soon to be streams.

Alright, self-pep talk over! Put me in Coach.

Don’t Subsidize My Life

Anytime I complain to a company about lowering my bill they are doing it at the expense of their profit margin, as such, they are forced to overcharge someone else.  Don’t be that someone else.

Take a simple example from my college days.  The Wife had a few sorority sisters who were bartenders and since The Wife had to court all of this, the girls would not charge me. In an effort to balance out their register they would overcharge other people at the bar or would go a little lighter on their drinks so the bottles wouldn’t empty as quickly.

Well guess what? your cable company is the bartender.  If they are providing me with premium service at “I bitch too much” prices then they have to offset me as a customer.  Don’t be that guy.

This applies to various monthly commodity type products:

• Cell Phone
• Cable
• Internet
• TV Service
• Credit Card Interest Rates
• Certain types of Insurance

Are you that guy? When was the last time you tried to lower your monthly nut?

While being an Internet retailer is financially advantageous to the small business owner, there are other issues you must consider to keep your customers’ financial information safe and to keep your customers happy.  If you can satisfy both of these customers’ needs, you will likely see your business flourish.

A Secure Payment Option

One of your first objectives when setting up shop is to find secure credit card processing services, so your clients’ financial and personal information will be safe when they are paying online.  We have all heard of companies who have had data breaches and, as a result, their financial information was compromised.  This is a concern for the smallest business to the largest, so this step is essential to the growth of your business; if customers don’t feel safe using their credit card, they won’t purchase from you, and your business won’t grow.

An Excellent Customer Service Team

If you are strictly an Internet only business, you will undoubtedly have unhappy customers once in a while.  For instance, if you sell clothing, you will have a customer who has purchased clothing that does not fit and needs to be returned.  Others could just be unhappy with the product they receive.  To handle these customers’ concerns, you will need to have stellar customer service.  The response of your customer service team can increase word-of-mouth referrals from customers who were displeased initially but were pleased with the customer service they received.

If you have a poor customer service team, those same customers, instead of giving word-of-mouth referrals, are likely to complain about your business, which could ultimately hurt your bottom line, especially in the age of so many review sites on the web.  A few bad electronic reviews on sites such as Yelp! could mean the end of your business as potential customers decide to avoid your site.

While it is easier than ever to set up an Internet business, setting it up is only one part of running an online business.  Two more important concerns are establishing a secure payment portal and hiring and training an excellent customer service team.  Doing so can help your business thrive and your income increase.

Post by Melissa

Down 47% on bad earnings and a lowered guidance for next quarter! Four Billion dollars, yes – $4,000,000,000, of value was erased in one day!

For curiosity purpose I then brought up the three year chart from the beginning of 2008 to end of 2011:

It split (2:3) twice and was up over 400%!

What is The Efficient Market Hypothesis?

According to Investopedia EMH is,

An investment theory that states it is impossible to “beat the market” because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information. According to the EMH, stocks always trade at their fair value on stock exchanges, making it impossible for investors to either purchase undervalued stocks or sell stocks for inflated prices. As such, it should be impossible to outperform the overall market through expert stock selection or market timing, and that the only way an investor can possibly obtain higher returns is by purchasing riskier investments.

But if all the information is out there? how can any stock drop 47% in one day? how can it go up 400% in 3 years?

If the EMH says that the stock is priced correctly for the information out there, then what solace does anyone have that it won’t drop like that? Meaning what good is the theory?

With the cost of homes and interest rates both at an all-time low, many people are tempted to become first-time homeowners. Before you even start looking for your first home, you must first have a clear picture of your financial situation and consider the financial aspects of the house hunting process.

Before the House Hunt

Get a copy of your credit report. Read it carefully and fix any errors. Pay off minor debts and pay down any credit cards that carry more than 30% of their limits.

Improve your credit report during the home buying process by making sure that you pay all of your bills on time. Look for secured loans to consolidate all of your credit card bills into one monthly payment,

Establish your budget early by determining how much you can afford to pay towards your monthly mortgage payments. Lenders could do this for you, but they often offer mortgages that are just too big for borrowers to handle. Since you don’t want to spend yourself into a “house poor” situation, set your own budget before talking to any lenders.

Save up for a down payment. Once you get a purchase price in mind, you’ll need to save about 20% of the home’s total cost.

Get pre-approved for a mortgage. This will help you narrow down your house hunting efforts to homes you can actually afford. It also shows a seller that you can actually buy the house, which increases the chances of your purchase offer being accepted.

During the House Hunt

Identify your favorite areas and neighborhoods. Make a list of your definite likes and dislikes to help narrow down your search. Then find a real estate agent that you are comfortable working with and start looking for your first home. Make sure that you only view homes that fall within your pre-approved mortgage amount.

After the House Hunt

Evaluate the asking price by having your agent compare the asking price of the home with comparable homes in the area. Many sellers ask for too high of a price based on what they need to pay off their current mortgage.

Negotiate the purchase price. Keep in mind that you definitely don’t want to pay more than the house is worth in today’s real estate market or you’ll end up in a negative equity situation from the get go.

Put in a purchase agreement contingent on a successful home inspection. Include the price offer on the home and what fees you want the seller to pay.

Get a home inspection. The inspector will provide you with a list of problems and explain the severity of each problem. Since everything the inspector comes up with is a negotiable item, you can ask the seller to fix it or to take the cost off of the asking price so you can fix it yourself.

Have your lender finalize your home loan approval and close on your new home. You will sign papers to transfer the ownership of the house. And, of course, you will have to write checks to the seller and to your lender for any closing costs or fees you are required to pay.

Buying your first home can be an exciting but daunting task. For the best results, make sure your financial house is in order before you even start looking for your new home. Check your credit report and pay off small debts and look for secured loans to consolidate larger ones. Set your budget early and keep your budget in mind when house hunting.

Calculating my Net Worth

The assets I include are:

• My Cash Savings Accounts – This has been my main focus for well over a year, as we will need all the cash we can get when we upgrade our living situation.  Just a reminder our current home went on the market 60 days ago and I just provided the newest update to selling my home and buying a new one yesterday.
• My 401(k)
• Random Non-Qualified Investment Account – Used to be my trading account until I realized it wasn’t worth the headache
• The Wife’s Roth IRA
• My favorite personal finance item, my small but Awesome Dividend Investment Portfolio
• Value of my House – I have kept this constant choosing to ignore this variable.  It should be interesting to see whether I close north or south of that number and how that will affect my net worth since this is my biggest asset (even net of liabilities).
• My Traditional IRA – Which I started actively trading last month using a Covered Call Strategy and even created a page to track all my gains (and loses)

The liabilities I include are:

While I am lucky to only have 2 main liabilities, they are very significant.

• Law School Loans
• Mortgage

What is missing?

• Car loan  – My car is paid off and I don’t consider it an asset and The Wife leases her car.
• Credit Card debt – Don’t  have any except a revolving AMEX account so no reason to put it up
• Checking Accounts – Always changing and moving besides I keep my checking accounts artificially low.

My Net Worth Growth

• From April, 2012 to May 2012 my net worth increased only 2.04% 
• Year to Date my net worth has increased 22.48%
• From January 2011 to April 2012 my net worth has increased 111.60%

How did you do the past month? Feel free to leave your link the comments!

Our Home Sale

Not surprisingly, the non-profit in charge of selling the home did absolutely nothing for us.  Anyone work for a non-profit out there? Why do they move slower than a government agency!? I actually ended up getting into an aggressive email discussion with them about their inefficiencies.  Regardless of the details, I ended up backing off since I still will need their help.

So after giving them about a month to hopefully do what they are in existence to do, The Wife and I decided to make up our own flyers for 20 bucks and give them to the 100 or so homes in our neighborhood that were not in the same income based program.

We received 4 great leads:

1. 27 Year Old couple both teachers in the city
2. 41 year old couple – second marriage Wife owned a home before Husband’s name was on it
3. 52 Year old divorced male
4. Elderly Indian woman

Few details that you may not remember:

• Purchaser has to be a first time home buyer (or not have owned a home in the previous 5 years)
• There is a maximum Sales price of about $306ish

In the time span of about a week all of the leads saw the home the home.  #2 immediately set up a second showing and told us they will beat any offer…BOOM WE HAVE THE MAXIMUM.  Not sure that was the best negotiating technique but they want it and know that I can’t really go higher than that so they wanted to ensure they would get the home.  Couple Number 1 calls me a few hours later and offers $285,000.  I let him know that I really want to sell it to him since he is the perfect candidate for the program that this home was made for – young couple/individual who want to stay in the Town of Oyster Bay (Nassau County) but can’t afford the ridiculous prices.  That being said, I wasn’t taking a hair cut to let him have the opportunity, so he upped it to $290K.  I let him know that it wasn’t going to happen and if he figures out a way to get me the max he can call me.  He hasn’t called back.

Option #3 is interesting.  He (and his parents who saw the house first when they were walking around the neighborhood) have mentioned multiple times that their offer would be a “cash offer.”  I know why that would me out but I am not balancing two mortgages, so if I have to wait a few weeks longer to close, then I wait.  I am not sure what is going to happen with him but I am giving him another 18 hours to get me a number.  Option #4 I feel pretty bad about.  She is an elderly woman who said she wanted to wait for her son to come back from India before she made an offer, but he doesn’t come back till May 4th.  I want to start to make moves this week, so The Wife and I have to discuss if we are just going to let her go.

This week The Wife and I will decide who to send to the non-profit who operates our section of the neighborhood.  That non-profit will sit down with them and talk to them about getting a mortgage (if needed) and generally talks to them about owning a home.  It is a formality with our buyers, but again the non-profit lives in the world of inefficiency and I am not going to change them so I will play by their rules.

Our Home Purchase

This side of the equation is a bit more tricky.  The first problem The Wife and I are facing is deciding between two specific towns:

• Town 1 has higher home prices and for that higher price you get less for your money, but it is the town we live in now so nothing in our life would change.  I would still have a bad ass commute to work, my parents would be able to watch my child at a moment’s notice, and the most important to me, I can come home for lunch to see The Wife and my son
• Town 2 has lower home prices and for that lower amount you get even more for your money!  The cons is obviously that it is about 10 miles or so and if you have battled the Long Island Expressway Traffic 10 miles turns my commute into about 25 mins with traffic.  A terrible number? No way! But it essentially ends me coming home for lunch.

Both towns have fantastic schools although Town 1 has a socioeconomic make up that some wouldn’t want their children to grow up in.  Specifically, it is an affluent area where the net worth of some of the children will be more than mine!  I grew up in a town like this, my car looked very out of place in the school parking lot (but damn it I loved that thing).  I had a great childhood so maybe I am assuming my kid will as well? My brother on the other hand has made it clear he would never choose Town 1 as he didn’t like growing up in that environment.

Regardless I will give credit where it is due.  The Wife has been researching homes for the past 60 days or so (probably longer if you consider her love of looking at houses), and I am just checking-in emotionally and mentally since I refused to get involved until we have a buyer (which we know have).  As you can imagine this probably causes a lot of justified frustration on her part…

Once we narrow down a few houses and put some bids in I will post pictures!

First, how do you really know that the business is actually trying to better the environment and community or they are just trying to get the right business gas tariff or electricity tariff? Second, does that even matter if the ends (Greener world) justify the means (Selling Green)?

Here are three practical tips on how to use your business energy efficiencies to help enhance your reputation with this cynical blogger:

Three Tips on Using Green to Better Your Reputation

Back your green claims up with evidence

There are a number of ways in which you can do this. Some energy companies such as British Gas can help you to monitor your energy usage and provide a report on savings made. The other day I was at a Sprint Store and they had a sign that they use solar and wind power and all I can think was, “Yeah, but what percentage of that is actually powering your operation?”

Just Give me the Hard Numbers! Don’t sugar coat it – just say we are 10% on renewable energy but we are growing that daily.

Get accredited as environmentally friendly

A range of accreditations are available for businesses wishing to promote their energy efficiency. Get one, but also tell me why it is important as I don’t know one program from another.

I think the Government Program, Energy Star has done a great job at marketing their benefit. If a business were to have that rating I would know they are doing something right.

Get involved in local projects

I am not sure how a multinational corporation would get involved in this one but a “smaller” local business could easily improve their green reputation with a few local projects. There always seems to be a story every couple weeks about an elementary or middle school getting involved in an environmental campaigns and for very little investment you can gain some fantastic positive local coverage.

Having your business attached to it would calm this skeptic’s fears.

Do you buy when a business says they are going green or are you as skeptical as I am?