One look around the personal finance blog world is all it takes to see what a love fest there is out there for emergency funds. In theory, they're a good idea. You should have some sort of safety net for just in case the shit hits the fan.
Ideally, I'd want someone to have cash producing assets. If you have monthly income coming from things like revenue property, bonds or secondary employment, suddenly you become less dependent on your primary source of income- your job. As far as I'm concerned that's the best emergency fund you could ever have.
Rather than advocating the traditional idea of an emergency fund, I'm going to introduce something a little different. I'm going to call it "Nelson's Realistic Solution That Doesn't Require You To Tie Up Large Amounts Of Capital For Some Stupid Bullshit What If Scenario" (or NAMBLA for short)
Pretend Scenario #1- A young couple both have decent jobs. The husband works in finance and the wife is a teacher. They have no credit card debt. Experts advocate that they have a minimum 6 month emergency fund. Should they?
Hell No!
What are the chances that they both lose their jobs? What are the chances that they encounter some sort of financial disaster that requires them to have tens of thousands of dollars on hand? The answer is basically zero.
Rather than having all this cash on hand, why not put that cash to work? Put it into a good conservative portfolio of high quality corporate bonds. Use an ETF or even (shudder) a mutual fund. This is going to protect your capital and get you a better return than you'd get in even a high interest savings account. Make your "emergency fund" the ultra conservative fixed income part of your portfolio.
Before you should even start investing, you should pay off your credit card debt. Paying off credit card debt is a terrific guaranteed return. If you have a card with a 0% rate, then I can see the logic of not repaying that, but most of the time, pay the credit card debt.
Your next step should be to start saving. Save up a couple thousand bucks, open up a online brokerage account, and buy one stock. XBB is an ETF that consists only of high quality Canadian corporate bonds. It's basically flat this year, while the TSX is down about 4000%. And it yields 4.5%.
Once you've gotten a good start in that, move onto stocks, then maybe investment real estate or other stuff. Repeat until wealthy.
While you're doing this, make sure you have a credit card with a decent amount of credit available. (say a limit of $10k) Then if the shit ever hits the fan, just charge up the credit card. Then take your time selling off the assets in the bond fund. Since it doesn't move much, you don't have to worry about taking huge losses.
This way, you don't have to keep large chunks of capital on the sidelines for some stupid just in case scenario. And for Christ's sake, start working on other streams on income.
Wednesday, December 31, 2008
Monday, December 29, 2008
TED Conference Videos: Worth A Couple Hours of Your Life
Yes, even your life. I know you're busy, but these are worth your time.
While doing my usual Youtube search for "Seth Godin+sexy", I stumbled upon a talk Seth gave to something called the TED Conference. Like everything Godin does, it was both funny and informative. The next recommended video was Malcolm Gladwell speaking at the same conference about the history of spaghetti sauce. Once I watched that, I was hooked. I promptly googled the TED Conference, and spent the good part of an afternoon listening to presentations by people smarter than me talking about things that mattered.
According to their website, the TED Conference "Gather[s] the world's leading thinkers and doers, offer[s] them four days of rapid-fire stimulation, and what's the result? Unexpected connections. Extraordinary insights. Powerful inspiration."
Here are just a few of the videos I think you should all check out. And thanks to Youtube, you don't even have to leave nocommunism. (the blog that hates commies so much!)
Seth Godin is the man, and perhaps I'm almost ready to admit I'm attracted to him.
I've got Malcolm Gladwell's new book on order from the local library. Perhaps I'll post a review. Perhaps not. And perhaps you won't care. Anyway, here's his presentation from the annual conference. I'd make fun of the hair, but that's just too easy.
Stephen Levitt has two great presentations. The first is on why crack dealers still live with their mothers.
And here's his other presentation on if car seats are really necessary. Great stuff.
Helen Fisher's presentation on the brain in love has nothing to do with business, but is interesting nonetheless.
Benjamin Wallace's piece on does happiness have a price tag is pretty funny. Worth a look as well.
This is Al Gore's latest slide show on global warming. Frankly, I think you're an idiot if you don't believe this is a problem. Plus, Al Gore is actually much funnier than I would have thought.
And one more:
Einstein the Parrot. Much more hilarious than you'd think.
While doing my usual Youtube search for "Seth Godin+sexy", I stumbled upon a talk Seth gave to something called the TED Conference. Like everything Godin does, it was both funny and informative. The next recommended video was Malcolm Gladwell speaking at the same conference about the history of spaghetti sauce. Once I watched that, I was hooked. I promptly googled the TED Conference, and spent the good part of an afternoon listening to presentations by people smarter than me talking about things that mattered.
According to their website, the TED Conference "Gather[s] the world's leading thinkers and doers, offer[s] them four days of rapid-fire stimulation, and what's the result? Unexpected connections. Extraordinary insights. Powerful inspiration."
Here are just a few of the videos I think you should all check out. And thanks to Youtube, you don't even have to leave nocommunism. (the blog that hates commies so much!)
Seth Godin is the man, and perhaps I'm almost ready to admit I'm attracted to him.
I've got Malcolm Gladwell's new book on order from the local library. Perhaps I'll post a review. Perhaps not. And perhaps you won't care. Anyway, here's his presentation from the annual conference. I'd make fun of the hair, but that's just too easy.
Stephen Levitt has two great presentations. The first is on why crack dealers still live with their mothers.
And here's his other presentation on if car seats are really necessary. Great stuff.
Helen Fisher's presentation on the brain in love has nothing to do with business, but is interesting nonetheless.
Benjamin Wallace's piece on does happiness have a price tag is pretty funny. Worth a look as well.
This is Al Gore's latest slide show on global warming. Frankly, I think you're an idiot if you don't believe this is a problem. Plus, Al Gore is actually much funnier than I would have thought.
And one more:
Einstein the Parrot. Much more hilarious than you'd think.
Sunday, December 28, 2008
Useless Personal Finance Blog # 6373: Dog Ate My Finances
Okay, you all know that I just can't stand useless blogs. If you're going to put a lot of time and energy into something, I think you should do it right.
I think most of these people know deep down that they're idiots. They just throw together posts because they have to put something out there, and when the shit hits the fan, they just say "oh well, you can't blame me. I'm not a serious journalist."
Moneygardener actually did this. And he wonders why I shit on him.
Hey Moneygardener: Throwing out a useless post makes you the blogging version of that annoying guy who will argue the color of the sky. And I don't know about you, but I hate those douches.
Anyhoo, the latest victim is the girl from Dog Ate My Finances. This blog chronicles the author and her fiance's journey to get out of mountains of debt and their quest to grow their net worth. The author also wants to save up for a wedding, and start saving for retirement. Pretty ambitious.
There's only one problem: they make serious money. Like a shitload of money. Check out this post for a summary of what they've paid off in the last year:
* 6,400 in family debt (OUCH! That was humiliating.)
* 25,000 on a rip-off car loan
* 30,302 in car debt to buy a second, luxury car
* 18,350 in business start up costs
* 22,000 credit card debt (as of December 2007)
* over 100K in student loans
Now I'm no math or accounting major (the girl who writes this blog is though), but even my rudimentary math skills can figure out that's over TWO HUNDRED THOUSAND FUCKING DOLLARS IN DEBT. And they paid it off. Maybe not in a year like I mentioned, but pretty quickly.
Okay, maybe they cut out all unnecessary spending to reach their goal. Let's take a look...
Well, they have a maid. And she gave her boss' secretary a $150 gift card which "isn't that much for me."
They drive such a nice car that "valets like it because it is such a rare car." Valets! Now I'm no valet, nor do I frequent places where there are valets, yet I'm sure that she isn't talking about a nice Chevy Cavilier or anything. Even a pimped out one.
Upon further reading, they actually have TWO flashy cars.
The young couple wants to buy a $500,000 house. In Houston. Where the average house price is $187,766. Why so much? They have their heart set on certain high class neighborhoods because they don't "do" commuting. Riiiight. Or yard work either apparently.
I can go on, but you get the picture.
Now I don't want to look like one of those guys who are jealous of other people's success. The couple has worked hard, and deserves every penny of their salary, even if I think they're obviously spoiled brats.
Here's the biggest issue: the couple makes just about $250,000 per year. So you saved your ass off making a quarter of a million dollars a year? How hard is that? You didn't accomplish anything more than cutting the fat from a lifestyle which was pretty much all fat. You fell ass backward into it. Stop talking like you've accomplished something of value. It's hard to have sympathy for anyone who can get into so much trouble while having so much.
Oh and by the way, they actually only paid off a little over $30,000 in debt over 2008. On a $250,000 salary. At least we think. I'm confused on how the debt goes from that to the figures I quoted above.
It looks like the couple managed to save about 30% of their income. If they made $50,000 or $100,000 a year this would be impressive. Instead, they saved about $75,000 of a $250,000 income, leaving them with a paltry $175,000 to make ends meet. Boo fucking hoo.
Stay tuned for when Dog Ate My Finances brags about some of her other accomplishments:
a) Both her and her fiance managed to eat out for under the cost of a mortgage payment
b) She got her own bottle of Cristal (Jeeves was out, presumably slitting his wrists)
c) She bought a Gucci purse instead of a Coach* (it is a recession after all)
d) She wiped her OWN ass.
* I have no idea if a Gucci purse is more or less expensive than a Coach. And Google wasn't helpful.
Oh, and one more thing. Here's part of the disclaimer at the bottom of the blog:
Details have been changed to protect the innocent. Maybe a little, maybe a lot. This is just a story, not any kind of advice--financial or otherwise. Go make your own story.
Nice! So it's just all shit you made up? And yet I'm sure you'll still take the moral high ground.
I think most of these people know deep down that they're idiots. They just throw together posts because they have to put something out there, and when the shit hits the fan, they just say "oh well, you can't blame me. I'm not a serious journalist."
Moneygardener actually did this. And he wonders why I shit on him.
Hey Moneygardener: Throwing out a useless post makes you the blogging version of that annoying guy who will argue the color of the sky. And I don't know about you, but I hate those douches.
Anyhoo, the latest victim is the girl from Dog Ate My Finances. This blog chronicles the author and her fiance's journey to get out of mountains of debt and their quest to grow their net worth. The author also wants to save up for a wedding, and start saving for retirement. Pretty ambitious.
There's only one problem: they make serious money. Like a shitload of money. Check out this post for a summary of what they've paid off in the last year:
* 6,400 in family debt (OUCH! That was humiliating.)
* 25,000 on a rip-off car loan
* 30,302 in car debt to buy a second, luxury car
* 18,350 in business start up costs
* 22,000 credit card debt (as of December 2007)
* over 100K in student loans
Now I'm no math or accounting major (the girl who writes this blog is though), but even my rudimentary math skills can figure out that's over TWO HUNDRED THOUSAND FUCKING DOLLARS IN DEBT. And they paid it off. Maybe not in a year like I mentioned, but pretty quickly.
Okay, maybe they cut out all unnecessary spending to reach their goal. Let's take a look...
Well, they have a maid. And she gave her boss' secretary a $150 gift card which "isn't that much for me."
They drive such a nice car that "valets like it because it is such a rare car." Valets! Now I'm no valet, nor do I frequent places where there are valets, yet I'm sure that she isn't talking about a nice Chevy Cavilier or anything. Even a pimped out one.
Upon further reading, they actually have TWO flashy cars.
The young couple wants to buy a $500,000 house. In Houston. Where the average house price is $187,766. Why so much? They have their heart set on certain high class neighborhoods because they don't "do" commuting. Riiiight. Or yard work either apparently.
I can go on, but you get the picture.
Now I don't want to look like one of those guys who are jealous of other people's success. The couple has worked hard, and deserves every penny of their salary, even if I think they're obviously spoiled brats.
Here's the biggest issue: the couple makes just about $250,000 per year. So you saved your ass off making a quarter of a million dollars a year? How hard is that? You didn't accomplish anything more than cutting the fat from a lifestyle which was pretty much all fat. You fell ass backward into it. Stop talking like you've accomplished something of value. It's hard to have sympathy for anyone who can get into so much trouble while having so much.
Oh and by the way, they actually only paid off a little over $30,000 in debt over 2008. On a $250,000 salary. At least we think. I'm confused on how the debt goes from that to the figures I quoted above.
It looks like the couple managed to save about 30% of their income. If they made $50,000 or $100,000 a year this would be impressive. Instead, they saved about $75,000 of a $250,000 income, leaving them with a paltry $175,000 to make ends meet. Boo fucking hoo.
Stay tuned for when Dog Ate My Finances brags about some of her other accomplishments:
a) Both her and her fiance managed to eat out for under the cost of a mortgage payment
b) She got her own bottle of Cristal (Jeeves was out, presumably slitting his wrists)
c) She bought a Gucci purse instead of a Coach* (it is a recession after all)
d) She wiped her OWN ass.
* I have no idea if a Gucci purse is more or less expensive than a Coach. And Google wasn't helpful.
Oh, and one more thing. Here's part of the disclaimer at the bottom of the blog:
Details have been changed to protect the innocent. Maybe a little, maybe a lot. This is just a story, not any kind of advice--financial or otherwise. Go make your own story.
Nice! So it's just all shit you made up? And yet I'm sure you'll still take the moral high ground.
Thursday, December 25, 2008
Merry Christmas to Me!
Because I've been such a good boy this year, Santa has decided to reward me with a present. Unfortunately, it wasn't a night with my new favorite actress I have no chance with, Ashley Leggat. Nor was it another steaming turd from mega-shill Robert Kiyosaki. It wasn't even a shit poor post from some idiot who thinks being cheap makes him a better person.
Nope, what happened was probably the best thing ever: Canadian Socialist is back!
Just a couple of comments on his comment:
1. I love how he hates Andy Busch. He would.
2. Uh, dude... Jack Layton's wife is beautiful? I mean, she's not horrible for being 124 years old, but I'd have to drink a LOT of beer before I even thought about it. And my standards aren't that high.
Still, welcome back!
Speaking of giant turds, (you see how I did that?) I found this piece from Marie Claire magazine, mostly because I spend a lot of time reading Marie Claire. It's a story written about Warren Buffett's adopted Granddaughter, and she's bitching because she's struggling along making only $40k per year. Apparently, $40k per year isn't enough for the artist to be able to afford cable or health insurance.
Before you start getting teary eyed for the woman, she informs the magazine that Warren actually paid for her education. Warren dropped off $100k on Nicole's education, taking care of both tuition and living costs.
Hey Nicole. You spent ONE HUNDRED THOUSAND DOLLARS on an education, and all you are is a struggling artist? I feel absolutely no sympathy for you.
If you spend the time to read the article, Nicole mostly bitches about how Warren used to be really nice to her, treating her like a member of the family. She appeared on a documentary, basically called the guy a greedy bastard, and then wonders why he's mad at her.
Also, if you're making 40k a year as a artist, you're doing pretty good. At least you can afford to eat.
So there it is, the last post of 2008. Happy Holidays to everyone, see you in 2009.
Nope, what happened was probably the best thing ever: Canadian Socialist is back!
Just a couple of comments on his comment:
1. I love how he hates Andy Busch. He would.
2. Uh, dude... Jack Layton's wife is beautiful? I mean, she's not horrible for being 124 years old, but I'd have to drink a LOT of beer before I even thought about it. And my standards aren't that high.
Still, welcome back!
Speaking of giant turds, (you see how I did that?) I found this piece from Marie Claire magazine, mostly because I spend a lot of time reading Marie Claire. It's a story written about Warren Buffett's adopted Granddaughter, and she's bitching because she's struggling along making only $40k per year. Apparently, $40k per year isn't enough for the artist to be able to afford cable or health insurance.
Before you start getting teary eyed for the woman, she informs the magazine that Warren actually paid for her education. Warren dropped off $100k on Nicole's education, taking care of both tuition and living costs.
Hey Nicole. You spent ONE HUNDRED THOUSAND DOLLARS on an education, and all you are is a struggling artist? I feel absolutely no sympathy for you.
If you spend the time to read the article, Nicole mostly bitches about how Warren used to be really nice to her, treating her like a member of the family. She appeared on a documentary, basically called the guy a greedy bastard, and then wonders why he's mad at her.
Also, if you're making 40k a year as a artist, you're doing pretty good. At least you can afford to eat.
So there it is, the last post of 2008. Happy Holidays to everyone, see you in 2009.
Monday, December 15, 2008
My Thoughts On... Ethical Investing
I hate those people who feel the need to make some sort of social commentary with their investments. Investing should be about making money, plain and simple. Everything else should be irrelevant.
Of course I want companies to follow the rules. I don't want the companies I own to break the law, or exploit workers, or treat women and minorities badly. But guess what? All these things generally aren't good for business.
Will I invest in cigarette companies? I sure as fuck will. Pharmaceuticals that make controversial drugs? Hell yeah. Oil companies that have a questionable environmental policy? As long as everything else checks out, then I'm there.
I think this will nicely sum up my feelings about ethical investing. (Note: This joke was pretty much entirely stolen from a post called "The Big Huh?" from Fire Joe Morgan.)
RINGGGG!!!!!!
"Hello?"
"Hey, Nelson?"
"Yeah?"
"Hey, it's Amanda Bynes. You know, from that show What I Like About You?"
"I'm familiar with it. What's up?"
"I want to have sex with you"
"... Really?"
"Yeah"
"... Uhh..."
"Something wrong Nelson?"
"No, I mean you're super hot, but... I can't"
"Why not?"
"Well, you are pretty much the hottest girl I've ever seen, you have great legs, a great smile and perhaps the hottest body in the whole world. I just want to reiterate that you are, indeed, smoking hot. But the thing is, you did that god awful movie "She's the Man""
"What does that have to do with anything?"
"Well, I learned from those ethical investors that even though you seemingly have everything going for you, I should focus on something arbitrary, instead of what's really important."
"Oh, I get it. I guess."
"Sorry Amanda. I hope you understand."
"Hey... One more thing. Do you have Canadian Socialist's number?"
Of course I want companies to follow the rules. I don't want the companies I own to break the law, or exploit workers, or treat women and minorities badly. But guess what? All these things generally aren't good for business.
Will I invest in cigarette companies? I sure as fuck will. Pharmaceuticals that make controversial drugs? Hell yeah. Oil companies that have a questionable environmental policy? As long as everything else checks out, then I'm there.
I think this will nicely sum up my feelings about ethical investing. (Note: This joke was pretty much entirely stolen from a post called "The Big Huh?" from Fire Joe Morgan.)
RINGGGG!!!!!!
"Hello?"
"Hey, Nelson?"
"Yeah?"
"Hey, it's Amanda Bynes. You know, from that show What I Like About You?"
"I'm familiar with it. What's up?"
"I want to have sex with you"
"... Really?"
"Yeah"
"... Uhh..."
"Something wrong Nelson?"
"No, I mean you're super hot, but... I can't"
"Why not?"
"Well, you are pretty much the hottest girl I've ever seen, you have great legs, a great smile and perhaps the hottest body in the whole world. I just want to reiterate that you are, indeed, smoking hot. But the thing is, you did that god awful movie "She's the Man""
"What does that have to do with anything?"
"Well, I learned from those ethical investors that even though you seemingly have everything going for you, I should focus on something arbitrary, instead of what's really important."
"Oh, I get it. I guess."
"Sorry Amanda. I hope you understand."
"Hey... One more thing. Do you have Canadian Socialist's number?"
Sunday, December 14, 2008
Weekend Link Dump
Item!
Canadian Capitalist fucking nails it with this old post about my favorite dipshit, Robert Kiyosaki.
Item!
Andy Busch is one of my favorite guests on Squeeze Play. He's got a morning blog that is definitely worth a read every morning. It focuses a lot on the forex market, but it's got some other good stuff as well.
Item!
The yield on the BCE preferreds is up around 7.3%. This company is sitting on a shitload of cash, and the balance sheet looks great.
Item!
Actually, there's all sorts of great buys in the Canadian pref market right now. I smell a post on this in the near future. I also smell something that suspiciously stinks like a fart. Was Canadian Socialist here?
Item!
I actually miss Canadian Socalist. If you still come around, call me a douche bag again or something.
Item!
I've found a couple of posts out there telling people how to borrow their down payment for their mortgage. There's just one little thing wrong with the play. Check out The Financial Blogger's post on it and my comment responding to it.
Item!
The Financial Blogger? Most unoriginal name ever!
Item!
The guy from Tough Money Love has a decent piece about a show on HGTV giving shit poor advice on one of their shows.
Item!
Speaking of BNN, I really am starting to like David Fleck. BNN is apparently reluctant to admit he works for them, since I can't find any info on him of their site. He appears on Trading Day pretty much daily, and the other day I saw him asking some downright decent questions to the CFO of Agrium.
Item!
You can't make me post any more items. I quit.
Item!
Dammit!
Canadian Capitalist fucking nails it with this old post about my favorite dipshit, Robert Kiyosaki.
Item!
Andy Busch is one of my favorite guests on Squeeze Play. He's got a morning blog that is definitely worth a read every morning. It focuses a lot on the forex market, but it's got some other good stuff as well.
Item!
The yield on the BCE preferreds is up around 7.3%. This company is sitting on a shitload of cash, and the balance sheet looks great.
Item!
Actually, there's all sorts of great buys in the Canadian pref market right now. I smell a post on this in the near future. I also smell something that suspiciously stinks like a fart. Was Canadian Socialist here?
Item!
I actually miss Canadian Socalist. If you still come around, call me a douche bag again or something.
Item!
I've found a couple of posts out there telling people how to borrow their down payment for their mortgage. There's just one little thing wrong with the play. Check out The Financial Blogger's post on it and my comment responding to it.
Item!
The Financial Blogger? Most unoriginal name ever!
Item!
The guy from Tough Money Love has a decent piece about a show on HGTV giving shit poor advice on one of their shows.
Item!
Speaking of BNN, I really am starting to like David Fleck. BNN is apparently reluctant to admit he works for them, since I can't find any info on him of their site. He appears on Trading Day pretty much daily, and the other day I saw him asking some downright decent questions to the CFO of Agrium.
Item!
You can't make me post any more items. I quit.
Item!
Dammit!
Friday, December 12, 2008
Finishing Up Some Unfinished Business
In my recent post making fun of frugaldouches (which is a term that I should really trademark) I linked to a post about how being frugal and being cheap is apparently very different. I also promised to make fun of it for your amusement, and since that's what I do around here, let's get this gong show on the road.
The preconceived
notion of an avid saver is that the person is cheap and wouldn’t fork over a single penny to save his life. False, of course!
Phew! Thanks for clearing that up.
Frugalites:
Are Thrifty
Good money management is a major part of frugality. Using coupons and shopping for discounts are typical routines of a thrifty individual. Smart spending on necessities and minimal spending on luxuries helps save money.
Lookit, this is really splitting hairs here. "Thrifity" is just another word for cheap. Look it up in the fucking dictionary if you don't believe me.
Just because somebody is cheap (sorry, frugal) doesn't mean that person automatically is a good money manager. Sure, they're good at saving. Yet many of the frugalest (is that even a word?) people I know don't have a dime in the stock market or investment real estate because they live in a world of fear that they'll lose money.
Makes the most of their resources
Many frugal people use what they have as much as possible. Throwing a bunch of leftovers together for a nice casserole or growing their own vegetables are typical practices that make use of what they already have. If they need something, they’ll spend the time to search for a good price.
And this differs from cheap people how?
This is kinda like the difference in calling a Star Trek fan a Trekie or a loser. Either word would be appropriate.
The author then moves onto what makes a cheapskate:
Are Greedy
If it is free, they’ll take as much as they can. They’ll refrain from spending any money for something that they can take from someone else without remorse.
Okay, I looked around this guy's site for about a minute, where I found this post. If you don't want to click the link, let me quote part of the post in question:
"Before my return to school this year, my (loving) parents bought boxes of cereal, two large bags of rice, ramen noodles, and packs of water and soda. My mom also prepared food that I can quickly reheat."
Hey hypocrite, if you take free food from your parents, you are not allowed to call someone else a bad person for taking anything else free. And don't tell me that it's different because it's your parents, because it fucking isn't. Are you an adult? Then shut the fuck up.
Explain to me how you're different than those evil cheap people? It sounds to me like you're full of more horseshit than Robert Kiyosaki.
Makes the least of their money
They save like there is no tomorrow. Sick? Too bad, they won’t pay a single dime to see a doctor.
Are you fucking serious? I don't give a shit how cheap you are, if the choice between life and death was going to see the doctor, I guarantee you that EVERYBODY would go to the doctor.
Hey moron, most people avoid the doctor because they hate the fucking doctor. You're reading a little too much into this.
They’ll dig a hole and hide their money for themselves when they can spend it like a fool.
So let me see if I'm crystal clear on your logic here. You say that cheapskates "save like there's no tomorrow" and then just a few sentences later accuse them of just saving so they can one day "spend it like a fool."
Wow. I can't believe they even let you have a blog.
Have you ever met any cheap people? Or are you pulling this completely out of your ass?
Maybe I hang out with different cheap people than you, but I'm pretty sure they aren't just saving up to go on a bender with a bunch of hookers.
It is easy to say that being frugal and being cheap is very similar. I totally agree with that despite my apparent discontent with cheapskates.
You have an entire blog post dedicated to the difference between frugal people and cheapskates, then admit at the end that there basically is no difference.
Can I kill myself now?
But there's more!
What I think separates these two classes the most is dependency. Frugalites are independent and can take care of their money matters on their own.
Except for you!
Cheapskates depend on others and put their financial burden on society and other around them.
Explain to me how they do this.
And don't say that they steal or break the law to save money. That's giving cheap people a bad name. It's like saying everyone who rides a motorbike is part of a biker gang.
Or is it when someone accepts something for free that they know they should really be paying for? First of all, everybody has done that before. It's hardly exclusive to cheap people. And second, it's not like you can take the moral high ground about something like that, can you?
Face it. They mean the exact same thing. Trying to figure out the difference is a pointless waste of time. Making fun of it? Perhaps also a waste. But at least I had fun.
The preconceived
notion of an avid saver is that the person is cheap and wouldn’t fork over a single penny to save his life. False, of course!Phew! Thanks for clearing that up.
Frugalites:
Are Thrifty
Good money management is a major part of frugality. Using coupons and shopping for discounts are typical routines of a thrifty individual. Smart spending on necessities and minimal spending on luxuries helps save money.
Lookit, this is really splitting hairs here. "Thrifity" is just another word for cheap. Look it up in the fucking dictionary if you don't believe me.
Just because somebody is cheap (sorry, frugal) doesn't mean that person automatically is a good money manager. Sure, they're good at saving. Yet many of the frugalest (is that even a word?) people I know don't have a dime in the stock market or investment real estate because they live in a world of fear that they'll lose money.
Makes the most of their resources
Many frugal people use what they have as much as possible. Throwing a bunch of leftovers together for a nice casserole or growing their own vegetables are typical practices that make use of what they already have. If they need something, they’ll spend the time to search for a good price.
And this differs from cheap people how?
This is kinda like the difference in calling a Star Trek fan a Trekie or a loser. Either word would be appropriate.
The author then moves onto what makes a cheapskate:
Are Greedy
If it is free, they’ll take as much as they can. They’ll refrain from spending any money for something that they can take from someone else without remorse.
Okay, I looked around this guy's site for about a minute, where I found this post. If you don't want to click the link, let me quote part of the post in question:
"Before my return to school this year, my (loving) parents bought boxes of cereal, two large bags of rice, ramen noodles, and packs of water and soda. My mom also prepared food that I can quickly reheat."
Hey hypocrite, if you take free food from your parents, you are not allowed to call someone else a bad person for taking anything else free. And don't tell me that it's different because it's your parents, because it fucking isn't. Are you an adult? Then shut the fuck up.
Explain to me how you're different than those evil cheap people? It sounds to me like you're full of more horseshit than Robert Kiyosaki.
Makes the least of their money
They save like there is no tomorrow. Sick? Too bad, they won’t pay a single dime to see a doctor.
Are you fucking serious? I don't give a shit how cheap you are, if the choice between life and death was going to see the doctor, I guarantee you that EVERYBODY would go to the doctor.
Hey moron, most people avoid the doctor because they hate the fucking doctor. You're reading a little too much into this.
They’ll dig a hole and hide their money for themselves when they can spend it like a fool.
So let me see if I'm crystal clear on your logic here. You say that cheapskates "save like there's no tomorrow" and then just a few sentences later accuse them of just saving so they can one day "spend it like a fool."
Wow. I can't believe they even let you have a blog.
Have you ever met any cheap people? Or are you pulling this completely out of your ass?
Maybe I hang out with different cheap people than you, but I'm pretty sure they aren't just saving up to go on a bender with a bunch of hookers.
It is easy to say that being frugal and being cheap is very similar. I totally agree with that despite my apparent discontent with cheapskates.
You have an entire blog post dedicated to the difference between frugal people and cheapskates, then admit at the end that there basically is no difference.
Can I kill myself now?
But there's more!
What I think separates these two classes the most is dependency. Frugalites are independent and can take care of their money matters on their own.
Except for you!
Cheapskates depend on others and put their financial burden on society and other around them.
Explain to me how they do this.
And don't say that they steal or break the law to save money. That's giving cheap people a bad name. It's like saying everyone who rides a motorbike is part of a biker gang.
Or is it when someone accepts something for free that they know they should really be paying for? First of all, everybody has done that before. It's hardly exclusive to cheap people. And second, it's not like you can take the moral high ground about something like that, can you?
Face it. They mean the exact same thing. Trying to figure out the difference is a pointless waste of time. Making fun of it? Perhaps also a waste. But at least I had fun.
Wednesday, December 10, 2008
Shorting the 30 Year Bond
I don't know if you kids have been paying attention, but we're in a bit of a credit crisis.
Oh, you have been paying attention? Well, good for you then.
The other night on Squeeze Play, Kevin O'Leary had a pretty interesting idea that, upon a little further thought, seems like it could have merit.
Because of the credit crunch and the resulting market decline, investors have been flocking to the safety of government bonds, particularly U.S. government treasuries. Thanks to the fear of the market, prices of these bonds have been driven up. A lot.
In fact, the yield on the 3 month treasury is zero. That's right, you're getting paid sweet fuck all to own it. The yield on the 6 month is hardly better, checking in at 0.2%. The 1 year is a little better at 0.47%.
The 2 year treasury yields 0.84%, the 3 year is at 1.19%, the 5 year is at 1.6% and the 10 year is giving you the impressive return of... (wait for it)--- 2.68%.
Basically, if you own any U.S. treasuries with a duration of 10 years or less, you are losing money once you factor in taxes and inflation. I know they're safe, but come on people!
The 30 year bond is hardly better. Briefly last week, the yield dipped below 3% for the first time ever.* Ever! It currently trades at $127 (this is 27% above par) with a yield of 3.09%.
Let's check out the chart for the 30 year treasury yield from Yahoo!
Oh, you have been paying attention? Well, good for you then.
The other night on Squeeze Play, Kevin O'Leary had a pretty interesting idea that, upon a little further thought, seems like it could have merit.
Because of the credit crunch and the resulting market decline, investors have been flocking to the safety of government bonds, particularly U.S. government treasuries. Thanks to the fear of the market, prices of these bonds have been driven up. A lot.
In fact, the yield on the 3 month treasury is zero. That's right, you're getting paid sweet fuck all to own it. The yield on the 6 month is hardly better, checking in at 0.2%. The 1 year is a little better at 0.47%.
The 2 year treasury yields 0.84%, the 3 year is at 1.19%, the 5 year is at 1.6% and the 10 year is giving you the impressive return of... (wait for it)--- 2.68%.
Basically, if you own any U.S. treasuries with a duration of 10 years or less, you are losing money once you factor in taxes and inflation. I know they're safe, but come on people!
The 30 year bond is hardly better. Briefly last week, the yield dipped below 3% for the first time ever.* Ever! It currently trades at $127 (this is 27% above par) with a yield of 3.09%.
Let's check out the chart for the 30 year treasury yield from Yahoo!
This chart covers from the late 1970s to today. You can see the downward movement of the yield over time. Let's check out what's happened more recently, since we can't really see the most recent part of the graph.
Not only is the 30 year bond trading at it's lowest yield since the government started regular sales of it, it's in territory that nobody's even been close to before. It's like Canadian Socialist when he saw a boobie that time. (he didn't like it, on account of, you know, being a flaming homo)
A bit of a warning here; People have been talking about this for a little while now. Here's an article written about it back in January. And holy fuck, has this guy been wrong over the last little while.
How can we play this? Simple son! It's called the Proshares Ultrashort Lehman 20+ Year Treasury and it, obviously, shorts the long bond. And it's had the shit beaten out of it. It's down around 39% since inception back in May.
This fund doesn't just short the long bond, it uses leverage to really short the fuck out of it. Obviously if leverage is involved, that can either enhance or diminish your return, depending on which side of the ass pounding you're on.
The MER is pretty high, at 0.95%. And for some reason it paid out a dividend back in October. WTF?
I think it's a little early in the game to do this. I've put a note to remind myself to revisit this in 6 months, so let's do that. Yeah, that's right. After an entire fucking post talking about this, I say to wait awhile before doing it. I know you're disappointed, but is it any different then any other time you read this?
*It might not be the lowest level ever, but it's definitely the lowest level since 1977, the year the government started regularly issuing treasuries.
Book Review: Snowball (The Warren Buffett Book)
Before I start reviewing Snowball by Alice Shroeder, the book all about Warren Buffett's life, let's take a look at one of the reviews (via Amazon)
"In The Snowball, novice biographer Alice Schroeder gives us one of the most detailed, candid life stories ever published…It is almost impossible to stop reading.”
Pretty normal sounding quote, right? Except it's source is the Christian Science Monitor.
Am I the only one who thinks this is hilarious? Why the fuck does the Christian Science Monitor even have an opinion of this book?
Stay tuned when the Monitor gives us their "2 thumbs way, way up" review about this little literary masterpiece. Okay, maybe not.
Back to Buffett. Instead of doing boring shit like outlining the plot, or talking about metaphors and other stuff I really don't understand the meaning of, you just get random bullet points.
I really recommend Snowball. While it isn't really that rich on business advice, it's very entertaining, an easy read and it delves into the complex personality of a man who's been perhaps a little unfairly labeled as simple.
Rating: 4 Becky Quick heads out of 5
"In The Snowball, novice biographer Alice Schroeder gives us one of the most detailed, candid life stories ever published…It is almost impossible to stop reading.”
Pretty normal sounding quote, right? Except it's source is the Christian Science Monitor.
Am I the only one who thinks this is hilarious? Why the fuck does the Christian Science Monitor even have an opinion of this book?
Stay tuned when the Monitor gives us their "2 thumbs way, way up" review about this little literary masterpiece. Okay, maybe not.
Back to Buffett. Instead of doing boring shit like outlining the plot, or talking about metaphors and other stuff I really don't understand the meaning of, you just get random bullet points.
- When Warren was a teenager, him and a friend stole a shitload of golf balls from Sears, among other stuff. Yep, he was bad-ass!
- It's pretty well known by now that Warren's wife Susie lived in San Franscisco, while he lived in Omaha with Astrid Menks. This is obviously a little fucked up, and the book doesn't delve into what I think is the real issue here-- were there any kinky threesomes?
- If there was, atta boy Warren! (High five)
- The stuff on Soloman bored the shit outta me. Everything else in the book was gold.
- Charlie Munger is probably as cool as Buffett. I bet he's even a little more hilarious.
- Not that this has anything to do with the book, but have you seen how short Liz Claman's skirt was that time she interviewed Warren? Here's a peek.
- That Liz Claman pic was in this thread here. While I think every straight male CNBC watcher likes Becky Quick, these guys are taking it a little too far.
- Speaking of CNBC and having absolutely nothing to do with Warren Buffett, stay tuned for when I shit on Jim Cramer in a later post.
I really recommend Snowball. While it isn't really that rich on business advice, it's very entertaining, an easy read and it delves into the complex personality of a man who's been perhaps a little unfairly labeled as simple.
Rating: 4 Becky Quick heads out of 5
Tuesday, December 9, 2008
I'm Mad As Hell...
And I'm not going to take it anymore!
First up, my humble apologies to the 1976 classic film "Network" for stealing their iconic line for my title. Yes, this proves I've got nothing on my own. But I just can't take it.
I fucking hate all those god damn frugal blogs out there. It's true. I hate every single one.
I know I've touched on this before, but just stay with me.
Formerly, my relationship with all those frugal blogs out there was kind of like my hatred of Jim Cramer- it existed, I was just too lazy to do anything about it. I was fine with that. Lately though, maybe because of the economy being the shits, it seems like these people are everywhere.
Now before we continue, I'm cheap. I'll admit it, and I have admitted it before. I turn down the heat to slightly below room temperature to save a few bucks a month. I wash in cold water. Hell, I can even see the logic in doing horseshit things like growing a garden or clipping coupons. I certainly can't be bothered, but whatever. Knock yourself out.
No, the problem I have with the pampas arrogance that accompanies their frugal ways. According to these douche bags, the only way to accumulate wealth is to budget your ass off, buy generic everything, (with coupons, dumbass!) only have the very basic cable T.V and cell phone plans, and avoid going to Starbucks. You definitely can't have any fun, and if you actually make a purchase, you better be able to justify the fuck out of it.
Holy shit, I can't even imagine the wrath if I admitted to them that I eat out all the time. I hope they don't know where I live.
Let me be crystal clear for this next point. All you frugaldouches, gather round and pull up a chair cause Uncle Nelson is going to let you in on a little secret. Are you ready, cause it's gonna be good...
As long as you manage to save 10% of your income, I don't give two shits what you do with the other 90% of it. You can blow it all on crack and strippers for all I care. Yeah, I've said it before. And I'll say it again. It really is that simple.
Besides, the return on investment on most frugal activities is the shits. Spend 2 hours a month sorting coupons to save $10? Congratulations, you worked for less than minimum wage. Spend 10 hours on your garden to save $100 in the cost of vegetables? You'd be just as well off going to work at McDonalds. I can go on, but you get the point.
I mentioned before about the blogger who wrote about dog food going up 6 bucks a month. This blogger actually spent enough time thinking about this to write a post about it. Let's crunch some numbers:
Blogger's income: $4000 per month (I'm just guessing, I have no idea)
Dog food increase: $6 per month
Amount of difference that makes: Absolutely none
How cheap is that blogger: Pretty god damn cheap
But wait! Turns out that they're not cheap. Right.... Remind me to shit on that post later.
What's the cost to have the fucking dog in the first place?
Most people suck at money management. And with the economy looking worse than Sean Avery's career, (topical!) people are starting to cut back. But offering tips on how to make cheap meals or telling people to cut back on their daily latte just isn't offering a realistic solution.
Sure, you guys have a small group of loyal followers. And they fucking loooovvvveee you guys. But you're preaching to the choir. Where are the realistic solutions for the common guy? And don't tell me that your blog is full of them, cause nobody's going to do it.
That's like trying to solve the tension in the Middle East with a sternly worded letter. Good fucking luck with that.
We get it, you're good at being cheap. Now maybe offer some advice that won't be taken just by your hardcore fans.
First up, my humble apologies to the 1976 classic film "Network" for stealing their iconic line for my title. Yes, this proves I've got nothing on my own. But I just can't take it.
I fucking hate all those god damn frugal blogs out there. It's true. I hate every single one.
I know I've touched on this before, but just stay with me.
Formerly, my relationship with all those frugal blogs out there was kind of like my hatred of Jim Cramer- it existed, I was just too lazy to do anything about it. I was fine with that. Lately though, maybe because of the economy being the shits, it seems like these people are everywhere.
Now before we continue, I'm cheap. I'll admit it, and I have admitted it before. I turn down the heat to slightly below room temperature to save a few bucks a month. I wash in cold water. Hell, I can even see the logic in doing horseshit things like growing a garden or clipping coupons. I certainly can't be bothered, but whatever. Knock yourself out.
No, the problem I have with the pampas arrogance that accompanies their frugal ways. According to these douche bags, the only way to accumulate wealth is to budget your ass off, buy generic everything, (with coupons, dumbass!) only have the very basic cable T.V and cell phone plans, and avoid going to Starbucks. You definitely can't have any fun, and if you actually make a purchase, you better be able to justify the fuck out of it.
Holy shit, I can't even imagine the wrath if I admitted to them that I eat out all the time. I hope they don't know where I live.
Let me be crystal clear for this next point. All you frugaldouches, gather round and pull up a chair cause Uncle Nelson is going to let you in on a little secret. Are you ready, cause it's gonna be good...
As long as you manage to save 10% of your income, I don't give two shits what you do with the other 90% of it. You can blow it all on crack and strippers for all I care. Yeah, I've said it before. And I'll say it again. It really is that simple.
Besides, the return on investment on most frugal activities is the shits. Spend 2 hours a month sorting coupons to save $10? Congratulations, you worked for less than minimum wage. Spend 10 hours on your garden to save $100 in the cost of vegetables? You'd be just as well off going to work at McDonalds. I can go on, but you get the point.
I mentioned before about the blogger who wrote about dog food going up 6 bucks a month. This blogger actually spent enough time thinking about this to write a post about it. Let's crunch some numbers:
Blogger's income: $4000 per month (I'm just guessing, I have no idea)
Dog food increase: $6 per month
Amount of difference that makes: Absolutely none
How cheap is that blogger: Pretty god damn cheap
But wait! Turns out that they're not cheap. Right.... Remind me to shit on that post later.
What's the cost to have the fucking dog in the first place?
Most people suck at money management. And with the economy looking worse than Sean Avery's career, (topical!) people are starting to cut back. But offering tips on how to make cheap meals or telling people to cut back on their daily latte just isn't offering a realistic solution.
Sure, you guys have a small group of loyal followers. And they fucking loooovvvveee you guys. But you're preaching to the choir. Where are the realistic solutions for the common guy? And don't tell me that your blog is full of them, cause nobody's going to do it.
That's like trying to solve the tension in the Middle East with a sternly worded letter. Good fucking luck with that.
We get it, you're good at being cheap. Now maybe offer some advice that won't be taken just by your hardcore fans.
Wednesday, December 3, 2008
Passive Income
Let me tell you a little secret... Come close, I'll whisper it.
I'm lazy.
I know. It's hardly a surprise. Hell, all you'd have to do to figure that out is just read this thing. I'm about as consistent with posting as Britney Spears is sane. That is, not very.
Being both lazy and greedy, I think a lot about passive income. While I'm a contrarian stock investor, I have investments in many things that are designed for one thing and one thing only: passive income.
Here are some ideas for passive income, including some you probably haven't thought of:
1. Bonds/Preferred Shares
Yes, I realize this one is a no-brainer, so we won't spend much time on it. Now is a great time to buy bonds, with yields on corporate bonds are higher than they've been for years. Individual Canadian bank preferred shares are yielding above 7%. If you gave me just $25,000, I could create a very secure bond portfolio with a decent 6-7% yield.
2. Real Estate
Right now is not the time to buy investment real estate in most parts of Canada. But keep your eye on it, remember my golden rule for buying real estate. (gross return is double the return of a high quality corporate bond) Once it reaches that point, it becomes a great cash flow investment, without much work.
Or it you're lazy, buy a REIT. Remember though, that the leverage associated with physical real estate will give you a greater return on the upside than with a REIT.
3.Dividends
Yes, you can create passive income with dividends. If you can ignore the market's price fluctuations, it might be interesting. Keep in mind though, that common share dividends are hardly secure.
4. Mortgages
I just said a bad word, didn't I?
Know somebody who desperately wants to own a house, but can't qualify for a mortgage? Why not provide one for them? A 9-10% return would be very easy to get, and could be accomplished with very little work. You would be put on title as holding the mortgage, so you'd be secure.
This one isn't for the faint of heart, but isn't hard to do and can be a great investment.
5. Writing a Book
Alright, maybe not. In theory, this is a source of passive income. In reality, hardly anybody writes a book. And out of the people who do, basically nobody makes money.
There's probably more, but it's late, and once again, I'm lazy.
By the way, the following are NOT examples of passive income:
1. Having a blog
I have a blog, and it's hardly passive income. If I was serious about monetizing this thing, it would take a hell of a lot of work.
2. Ebay
Working is not passive income. Plain and simple.
I'm lazy.
I know. It's hardly a surprise. Hell, all you'd have to do to figure that out is just read this thing. I'm about as consistent with posting as Britney Spears is sane. That is, not very.
Being both lazy and greedy, I think a lot about passive income. While I'm a contrarian stock investor, I have investments in many things that are designed for one thing and one thing only: passive income.
Here are some ideas for passive income, including some you probably haven't thought of:
1. Bonds/Preferred Shares
Yes, I realize this one is a no-brainer, so we won't spend much time on it. Now is a great time to buy bonds, with yields on corporate bonds are higher than they've been for years. Individual Canadian bank preferred shares are yielding above 7%. If you gave me just $25,000, I could create a very secure bond portfolio with a decent 6-7% yield.
2. Real Estate
Right now is not the time to buy investment real estate in most parts of Canada. But keep your eye on it, remember my golden rule for buying real estate. (gross return is double the return of a high quality corporate bond) Once it reaches that point, it becomes a great cash flow investment, without much work.
Or it you're lazy, buy a REIT. Remember though, that the leverage associated with physical real estate will give you a greater return on the upside than with a REIT.
3.Dividends
Yes, you can create passive income with dividends. If you can ignore the market's price fluctuations, it might be interesting. Keep in mind though, that common share dividends are hardly secure.
4. Mortgages
I just said a bad word, didn't I?
Know somebody who desperately wants to own a house, but can't qualify for a mortgage? Why not provide one for them? A 9-10% return would be very easy to get, and could be accomplished with very little work. You would be put on title as holding the mortgage, so you'd be secure.
This one isn't for the faint of heart, but isn't hard to do and can be a great investment.
5. Writing a Book
Alright, maybe not. In theory, this is a source of passive income. In reality, hardly anybody writes a book. And out of the people who do, basically nobody makes money.
There's probably more, but it's late, and once again, I'm lazy.
By the way, the following are NOT examples of passive income:
1. Having a blog
I have a blog, and it's hardly passive income. If I was serious about monetizing this thing, it would take a hell of a lot of work.
2. Ebay
Working is not passive income. Plain and simple.
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