There’s a wealth of good reading on the web at the moment from my favourite PF bloggers. I get the feeling they’re all doing some spring cleaning too, on the look out for fresh ideas and products to help get ahead with money:

• Karen at Help Me To Save gives some good tips on shopping around for the best broadband deal, as many customers tend to stagnate for years with their current provider despite not getting best value.
  
• The Accumulator at Monevator seemed to have read my mind last week as I pondered over my investments wondering if I should shop around more, as he has just updated his low cost index trackers leaderboard. What a time-saver.
• Donal at Money Saving Challenge continues to do a great job demystifying house-buying and the money aspects involved, as he helps us work out how much deposit to aim for when buying a house.
• Savvy Scot reminds us that you are never too young to think about pensions. The fact is if we don’t croak it before then we all reach retirement age sooner or later – and be either kicking or thanking ourselves for the pension choices we’ve made in the meantime.
• Mr Money Mustache experiments on himself as he tries out a small-scale Brewster’s Millions-style approach to getting rid of a cool thousand without worrying about it. Was it a waste of money? You’ll have to find out…

Hope you enjoy them.

The post Wealth On The Web: Spring Cleaning Edition appeared first on Objective Wealth.

So below I’ve picked out and summarised the pearls I think are most important. No doubt many of them will apply to you too:

• pay off credit card debt
• establish an emergency fund
• get your spending under control
• learn to live below your means
• save early and invest regularly
• don’t invest in things you don’t understand
• consider how much you’ll need in retirement and plan accordingly
• focus on index funds to outperform most others over time
• keep your investment plans as simple as possible
• keep investment costs as low as possible
• avoid market timing
• prepare for your children’s education costs
• know how to handle a windfall

Notice that sound financial management needn’t be complicated – there are no secrets, nothing mysterious nor ground-breaking – just remember to keep it simple.

If we consider this summary as checklist, how many can you mark as done or in hand?

Personally, I think I could do more to consider how much I’ll need in retirement, as it still seems a way off, but it will come eventually for sure, unless I pop my clogs before then (when it won’t matter anyway; but that’s another idea – life insurance – how would my wife cope, or kids?)

I could also confess to not index investing with the cheapest provider possible at the moment, although with most things cheapest isn’t always best, is it beef lovers?! However, with spring starting to poke through, now might be the time to do a bit of spring cleaning and shop around to keep those overall charges down. Any recommendations for good value index-fund providers?

Are you covering all of the bases yet? Are there any other pearls of financial wisdom missing here?

The post Pearls of Financial Wisdom appeared first on Objective Wealth.

A married couple in their mid-30′s decide to take a holiday to Orlando, Florida before they start trying for a family. For a few years they’d dreamed and joked about going there first without kids so they could enjoy all the attractions together as a couple. Realising that time was ‘running out’ before parenthood, they examined their finances to see if it was possible to make that dream come true.

Having worked hard to pay off their consumer debt over the last few years, then saving aggressively since then, they were pleased to discover that they could afford to pay for the entire holiday up front – all expenses could be made available from their savings, without denting them significantly. This holiday would cost more than twice their normal annual holiday budget combined, but it was still affordable.

They booked the holiday several months in advance, spending a couple of weekends researching and comparing flights and accommodation to find the best balance of comfort and price. Compared to their usual summer beach holidays, they acknowledged that a trip to Orlando would be more about experiences than fine dining, so they purposefully chose a modest self-catering apartment in order to keep food costs down. They’d seen the sizes of the pizza boxes on American TV shows so they knew they wouldn’t starve.

They purchased a book specifically for UK visitors to Orlando, which contained  numerous tips, discounts and money saving advice for while they were there, and to help them research and plan each day in advance with confidence to make the most of the time spent there and get maximum value for money.

Since paying for the bulk of the trip costs up front, they have spent several months re-focussing on saving, and have already replaced the missing funds and are determined to invest for their future. They don’t anticipate paying for a anther trip like this for the next few years and see it as a ‘one-off’ for the foreseeable – so they’re really hoping it’s all worth it.

Who are this exemplary husband and wife team? Me and the Missus, of course! But you knew that anyway, didn’t you? The point here isn’t to gloat or sound ostentatious. To be honest I’m telling this story out of a sense of enormous personal pride, as perhaps as little as three or four years ago this scenario simply wouldn’t have been possible. Or if it was possible, it would have been financial suicide, for example booking it on a whim to cheer ourselves up or because we were bored, slapping everything down on the credit card with a promise to ourselves that’d we’d pay it all off later…See the difference?

It’s a great feeling to be in control of spending like this – enjoying the today while still focusing on the tomorrow – but doing it all rationally, consciously and sensibly. I think it’s a great case study in conscious spending. It’s going to be my first visit to the USA, we’re going in a few weeks, and I’m totally stoked! I think I’ll check out Savvy Scot’s 12 Crazy Disney Facts You Never Knew again…

Can you recommend any good money saving tips for visiting Disney and Orlando, Florida?

Have you got a good case study in conscious spending of your own to share?

The post A Case Study In Conscious Spending appeared first on Objective Wealth.

Dubbed rplan University, or rplan U for short, they’re aiming to target well-educated yet financially-naive university graduates; those “without any knowledge on personal finance nor investing,” whose numbers I reckon must be legion.

Their weekly, 5-minute, informal, whiteboard-based ‘talk-and-chalk’ style should help to demystify the basic concepts and terminology of  investing, to help young adults develop the knowledge and confidence they need to decide if investing is right for them, and how to make a start. Take a look at their introductory session…

If you like it and you’re keen to find out more about things such as:

• Options available (ISAs, Funds, ETFs, shares, bonds etc.)
  
• Measuring risk, performance and costs
• Goal-setting, portfolio construction, asset allocation and diversification

…but you haven’t a clue what I’m talking about, then why not sign up for the course? I have, and I’m looking forward to seeing what they have to say over the next 8 weeks.

The post Back To School With rplan U appeared first on Objective Wealth.

Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.

Archimedes

 

What springs to mind when you hear the word leverage? Readers of Robert Kyosaki’s Rich Dad Poor Dad series might think of it as a vague, mysterious power or the “the ability to do more and more with less and less,” where quickly flipping real estate with somebody else’s money is his prime example.

In the business world leverage might refer to techniques used to multiply gains, such as borrowing money, buying fixed assets, or using derivatives to leverage assets in hedge funds.  Utilised at the corporate level these techniques are a little out of the scope of personal finances.

In the media world the term leverage, or excessive leverage, was blamed for the financial crisis of 2007-2009, where consumers who borrowed large amounts of money never actually levered anything; they simply borrowed to fund their consumption habits rather than investing the money or buying assets. 

I’m going to take a fresh look at leverage here today, to vastly simplify it and demonstrate that it’s something we can all take advantage of on the journey to wealth. Let’s look back at that Archimedes quote. In order to move the world, he needed:

• His own bodyweight or strength
• A fulcrum
• The lever

So if you wanted to increase your wealth, you would need:

• Money you’ve saved
• A fulcrum
• The lever

“Come off it Drew,” you say. “A fulcrum? And a lever? Like a long wooden plank? What are you talking about?! I want to get rich, not make a see-saw!” Allow me to demonstrate:

Assuming there is always sufficient strength to push the left side of the lever down fully (e.g. the existence of savings), observe that the amount of wealth you’re able to create (height of the lever on the right) is determined by how far to the left the fulcrum is positioned.

“Yes Drew, but you still haven’t explained what the fulcrum and lever are…do I need to get a barrel and plank of wood? What good would that do?”

• The fulcrum = time (how early you take action)
• The lever = your mind (your ability to grasp this and decide to act)

So, essentially successful leverage is dependent on the mind. Without employing your mind as the lever – in this case deciding to save, deciding to do it early or at the earliest opportunity, and acting on it – what chance do you stand of creating wealth, whether it be through modest compounding with interest, or taking greater risk with your savings through investment opportunities.

Wealth is the product of man’s capacity to think.

Ayn Rand

Don’t ever worry that you’re starting too late, that you’ve missed out or if you made mistakes in the past. As long as you’re alive you have all the time you have and need to use leverage. You can only start from where you are today. Remember, you’re all the leverage you need to become wealthy…

The post A to Z of Objective Wealth: L is for Leverage appeared first on Objective Wealth.

Regular Objective Wealth readers might remember my popular I’ve Won The Lottery post from last year? Well, I figured based on the FMF’s judging criteria I’d stand the best chance with that one, so I went ahead and submitted it as my entry.  If you liked it at the time, or you’ve just read it now for the first time and you think it’s a good effort, it’d be great if you head over to FMF asap and cast your vote in the comments section of the page/round I’m in.

If I start to make it through to later rounds I may well be posting updates on this regularly to keep the support and momentum going, or I may just fluff it in the first round, who knows?…It’s exciting. I’m all fired up. Are you fired up too? Are you willing and able, solider, to help Objective Wealth defeat the best of the personal finance blogosphere?!  Yes, Sir!

Seriously though, by participating in the tournament as a reader you can help increase Objective Wealth’s profile in the super-saturated web-finance arena, whilst at the same time gain access to some of the best personal finance posts of the last 12 months. It’s win/win. My round should be announced any moment now, so what are you waiting for?…

Here’s the link to Free Money Finance again. Keep an eye out for me in Round 1.

Many thanks for your support.

Drew

The post Vote Objective Wealth In The 2013 FMF March Money Madness Tournament appeared first on Objective Wealth.

In short, it was everything I was hoping for, and more besides. If you’re one of those people who’ve developed an uneasy feeling over the last few years that America might be on the brink of serious trouble, Free Market Revolution explains how it got there, why it’s in trouble, and crucially, what needs to be done about it.

Logically structured and presented, Free Market Revolution quickly and succinctly begins to identify the nature of the problem: an ever-expanding government and controls, at the expense of individual rights and freedom, regardless of the party in power. From there it confidently states and justifies the solution, in the process defining selfishness as the rational, pro-life morality that it is – while denouncing its opposite, self-sacrifice, as destructive, anti-life, evil. This book pulls no punches early on in fighting for the reader’s understanding of the need to define these terms correctly, to question the common usage and application of words like rational, selfish and self-sacrifice, and to demonstrate the effects of their application in reality.

Brook and Watkins cover a lot of ground in order to make their case for capitalism, exploring topics such as: the housing crisis, business morality, win/win scenarios, profits, market dynamics, innovation, regulation, consumer protection, entitlements, welfare and health care to name but a few – all issues that touch our lives in some way as members of Western society, and the sorts of topics talked about (and argued about) every day, from the work canteen to the dinner party. Consequently, there’s much for Objective Wealth readers to chew on in regard to their own finances and wealth. As George Reisman said: “Under capitalism, each individual engages in economic planning.” As an individual reader I found the book inspiring and empowering.

Another key feature of Free Market Revolution is the abundant use of case studies to demonstrate and support the ideas and arguments presented. It’s incredibly well researched for such a modest-sized book, with some 22 pages of references cited at the end. It’s easy to understand and relate to names like Steve Jobs, Google, Wal-Mart and Mother Teresa when applied to more complex philosophical principles. Overall it’s brilliantly written and accessible.

Yet all the while, running through every issue – and this is its core strength - Free Market Revolution makes an unapologetic case for the morality of self-interest and the defence of a free market. In other words the defence of a free mind. And for that reason I believe this book  has the actual potential to start a revolution – towards greater freedom and prosperity.  This is not hyperbole.

If only for the lucid analysis of the housing crisis last decade, Free Market Revolution would be worth the asking price alone, but it offers so much more. Having followed the work and direction of the Ayn Rand Institute for a number of years, and through observation of the tireless work they do, I applaud Yaron Brook and Don Watkins for writing this book, in the process fighting for my interests, evidently for theirs, and possibly for yours too should you seek to identify and understand them. They are modern day heroes – they can and do exist. I imagine Ayn Rand would have been very proud to see this book published as an extension to her ideas. Like capitalism itself: It gets the job done.

The post Praise For Prose: Free Market Revolution appeared first on Objective Wealth.

When you think about it, previous generations simply didn’t have the opportunity to possess the range of goods and services we have, nor in such large quantities, simply because they weren’t available or hadn’t been invented, and if they were, few could afford them – it’s not like they chose not to!

And that brings me to the title of this post. Despite the way things are heading, and the accusations brought against you – the guilty consumer – yes, you, reading this on your new smartphone or device…instead I ask: are you materialistic enough? Is it possible that the problem is that many people aren’t actually being materialistic enough?!

Let me be clear. People should be free to spend their money on whatever ‘tat’ they so desire, which is perfectly fine, as there is evidently a market for such items, otherwise producers would stop making them and/or go out of business. It’s a voluntary trade to mutual advantage, so mind your own business.

But I think a better question folk might consider asking is not ‘how can we force people to reduce their material ownership and consumption?’ but instead ‘while material possession and consumption is massively life-enhancing, what’s the best way to enjoy it the most and make best use of it?’

In order to explain I’ll need to refer to some literary examples, courtesy of novelist and Objectivist philosopher Ayn Rand, of two of the most materialistic men you’ll ever encounter in fiction – but not according to the traditional, or should I say modern, sense of the word materialistic.

First we note Howard Roark, the brilliant but persecuted architect from The Fountainhead, regarding his rented room in the opening chapter:

He had not added a single object to the bare necessities of furniture which she [the landlady] had provided; no pictures, no pennants, no cheering human touch. He had brought nothing to the room but his clothes and his drawings; there were few clothes and too many drawings.

Roark was a man whose life’s work and ambition was to see his designs for buildings take material form; from a modest house to a New York City skyscraper. Other material possessions, what you or I might call luxuries, were of little value to him, so he didn’t take the trouble or expense to acquire them. The majority of his resources were invested in materials that worked towards achieving his values, such as his drawing tools and office space, as opposed to frivolous liabilities.

The second example is Hank Rearden, the prime-mover steel magnate from Atlas Shrugged, who built up from scratch and owned vast steel mills, mines and all the material output that they produced. He traded his time, energy, ideas and wealth for the ongoing expansion of the industry he owned outright. He loved nothing more – especially not the high-society parties, presents and useless possessions that appealed so much to his (vicious) wife Lillian.

Roark loved nothing more than to see his skyscrapers become reality. Rearden had his steel mills and metals. Dagny Taggart (Atlas Shrugged) loved her trains and operating her railroad. Those were the measures of their self-worth, not the contents of their houses. While these characters are far-removed from the lives and circumstances of most of us, their extreme but intense passion for worldly possessions of the highest form and expression reminds us that we often miss the wood for the trees.

Are you spending your money on things that will help you to achieve your values? What are your values? To fill your house with clothes you don’t wear, electrical items you rarely use or home furnishings you’re forever replacing? Or would you rather value spending your money:

• on raw materials and tools for your new business idea?
• to loan it out to others in the expectation of greater return?
• on tuition fees for a degree or qualification?
• on a quality suit and makeover for a new job interview?
• as a reward to yourself for ‘a job well done.’

I’d argue that if there was anything wrong with ‘buying too much crap we don’t need,’ it’s that it takes our focus off the bigger material possessions and experiences that are within our reach – ones that could improve our lives considerably more than numerous, cheap, five-minute thrills.

So, despite what you may own, are you materialistic enough?

The post Are You Materialistic Enough? appeared first on Objective Wealth.

This morning I stumbled across an interesting audio interview on the Economist’s Prospero blog on books, art and culture. Entitled Saving on lattes will not make you rich – the finance-guru bubble, the host talks with journalist and former financial columnist Helaine Olen about her new book Pound Foolish: Exposing the Dark Side of the Personal Finance Industry. I became so drawn into it I was almost late for work!

If you don’t have the 12 minutes to spare to listen to the whole discussion, below the audio player is a quick summary of the points Olen made, where she refers to the current state of personal finance advice in the US and the ‘gurus’ largely responsible for it:

• There is no standard for and of the advice given out.
• Much of the advice is conflicted.
• Some of the advice can be useful for getting out of debt, but no more.
• Most financial gurus made their success off the back of giving out advice itself, as opposed to prior success in business.
• It’s next to impossible to ‘just save and invest’ your way to wealth, due to low incomes for the majority of the population.
• Investment returns quoted are still based on the 90′s boom and are unrealistically high.
• Improving financial literacy for young people remains a challenge – formally teaching them appears futile.
• The financial services industry instead is responsible for the spreading of financial ideas to young people, be it good or bad advice depending on their agenda.
• The ‘gurus’ (e.g. Ramsey, Orman, Kyosaki) are still largely an American phenomenon compared to the UK, although some have garnered significant followings here and in Australia.
• Most of the industry hype about saving for retirement is unrealistic and a distraction for the real problems many will face in later life, providing a smokescreen for current socio-economic problems, i.e. a false hope.

I’m not sure if Olen’s book goes on to provide solutions to the problems she has identified, or if she leaves the reader adrift – I may have to add this title to my birthday list. Maybe in her next edition she could point readers towards the fine champions of rational personal finance and investing here in the UK – from the likes of Monevator, MoneySavingChallenge, Sterling Effort, TheSavvyScot, HelpMeToSave and TheMoneyPrinciple - where we eat gurus for breakfast…(well, maybe just SavvyScot does! )

Speaking of gurus, I’m reminded of a quote from Mike Mentzer, my philosophical-bodybuilding hero from my late teens, who had this to say on the subject…

Beware of those who refer to themselves as gurus. A guru is an Eastern, mystic “spiritual” leader who has convinced the ignorant masses that they cannot gain knowledge and truth through reason and logic; that only he has access to and understands the higher mysteries; and thus he is able to crudely manipulate them for his convenience. A man of reason, hearing someone claim he’s a guru, turns away immediately and runs in the opposite direction as fast as he can.

Mike Mentzer

What do you make of Olen’s take on the industry? Is she offering a genuine counterpoint to the prevailing mainstream personal financial wisdoms you may indeed swear by, or is she simply the next financial guru in the making?

The post Beware The Financial Guru! appeared first on Objective Wealth.

Unless you’re a genuine triskaidekaphobic, with a recognised phobia, or fear of the number 13, you’d be better off saying nothing at all than to reinforce superstitious bromides. What a mindset. To be expecting bad things to happen, due to forces outside your control, from January 1st all the way to December 31st just because the year contains the number 13. Tsk.

Even if you flip the notion, believing instead that 13 is in fact a lucky number, as some individuals, cultures, and popstress Taylor Swift do, it immediately contradicts all the people who believe it’s unlucky. So which one is it peeps?! It can’t be both lucky and unlucky at the same time.

I feel daft having to spell this one out, but for the record here on Objective Wealth, I think it’s neither. 13 is neither lucky nor unlucky. There, I’ve said it. Nor is any other number for that matter – or symbol, animal, animal part, clover, mineral or rainbow. Please strike me down with lightning if I’m wrong. Does anybody want to contest this, or possess the crystal balls necessary to do so?

Anyhow, some of the best in the personal finance blogosphere have been sidestepping luck altogether recently, instead taking matters into their own hands to improve their finances, wealth and grip on reality…

• The Accumulator at Monevator performs a reality check with the numbers and asks is it really worth trading in your index fund for a cheaper model?
• Jim at Boiler Room has picked up on Peter Schiff’s recent attempt on YouTube to expose inflation propaganda as a load of hocus pocus.
• Donal at MoneySavingChallenge has worked out the true cost of buying a home, where in order to succeed in achieving your dream house you’ll not need a lot of luck, just a lot of savings!
• If Ermine at Simple Living In Suffolk wasn’t convinced he’d be lucky enough to win the lottery before at 14-million to one, he’s even less likely to have flutter now that the cost of playing the Lottery has gone up.
• Finally, the heroic Dr. Yaron Brook at Laissez-Faire explains why we ought to count ourselves lucky that most ultra-successful businessmen are ‘greedy’ and why they shouldn’t give away their enormous fortunes to charity as a moral obligation.

So while 2013 shouldn’t cause concern – there’s no need to stay in bed until the world is safe again – if you’re talking Friday the 13th then that’s a different matter entirely, as there are two later this year, so watch out!…Just kidding, it’s only unlucky for some…

The post Blogtastic: Unlucky For Some Edition appeared first on Objective Wealth.