A 777 point loss in Dow yesterday is enough to make anyone hyperventilate; especially since this is the first real financial downturn I’ve seen as an adult!
However, it’s times like these when the big picture- the ugly whole reality of the stock market crashing down- is so overwhelmingly scary that it is best not to fixate on the whole picture. Instead, focus on yourself and your own personal financial picture. This is how I’m coping.
So, here is a list of financial things I can control:
1. I can stop unnecessary spending.
2. I can shop around for purchases I need to make in order to get the best deal (like on car insurance).
3. I can rest knowing that all my cash is FDIC insured, because I have checked my accounts on the FDIC website (you can too, go here).
4. I can keep my short term dreams safely financed by having the money in extremely low risk accounts like CDs and high-yield savings accounts (Go ING!).
5. I can understand where my money has gone in the past, and where my cash needs to go in the future because I map my finances through Mint.
6. I can get a 7% return (without any risk!) by paying off my student loan.
7. I can curl up with a book about the history of Wall Street (currently reading: A Random Walk Down Wall Street) and have the intellectual reassurance that bear markets happen routinely and that they routinely bounce back.
Together these things keep me grounded and keep me from making rash decisions concerning my stock portfolio. It may do little to dampen the emotional distress of seeing my retirement portfolio dip 20%, but it can keep me muttering: I am young, and I’m buying stocks on sale (and I love a sale!). I am young, and I’m buying stocks on sale. I am young, and I’m buying stocks on sale. I am young…
Tuesday, September 30, 2008
Monday, September 29, 2008
Top Financial Expert Reveals Portfolio!
Kevin is very busy with answering the press’s questions. See there is a book coming out about his success as a financial guru, and he is sharing his portfolio with the world!
His Portfolio:
60% in Vanguard Total Stock Market Index
30% in Vanguard Total International Stock Index
10% in Vanguard Total Bond Market Index
With this portfolio he beat the S&P 500 by over three percentage points, and 95% of money managers to boot. Oh, by the way, he’s ten-years-old and started investing years ago- in the second grade!
I guess this is what happens when your dad is a certified financial planner, who is writing a book "How a 2nd grader beat Wall Street". On one hand it’s outlandish, but on the other- shouldn’t we all be so lucky? His father, Alan, says in an interview with Paul and Don on Sound Investing that since Kevin is a kid, he actually is better at following basic financial advice than most grown ups!
For example, his son doesn’t check his portfolio every day, he isn’t emotionally attached to his investments, and he doesn’t listen to the Jones brag about their new hot stock tips. He also understands that there are two basic rules of investing: 1) Don't put all your eggs in one basket 2) Don't play a loser's game (i.e. don’t pay a lot of fees).
These simplicistic, almost kindergarten-level lessons have enabled him to start a nest egg that will most surely grow into a comfortable college fund, first house fund, and retirement fund in the coming years. Anyone else think he’ll be replacing John Bogle?
If you’d like to listen to the whole interview on Sound Investing, you can download it here. Also, I’d recommend checking out the Marketwatch article that highlights his and other lazy portfolios performance.
His Portfolio:
60% in Vanguard Total Stock Market Index
30% in Vanguard Total International Stock Index
10% in Vanguard Total Bond Market Index
With this portfolio he beat the S&P 500 by over three percentage points, and 95% of money managers to boot. Oh, by the way, he’s ten-years-old and started investing years ago- in the second grade!
I guess this is what happens when your dad is a certified financial planner, who is writing a book "How a 2nd grader beat Wall Street". On one hand it’s outlandish, but on the other- shouldn’t we all be so lucky? His father, Alan, says in an interview with Paul and Don on Sound Investing that since Kevin is a kid, he actually is better at following basic financial advice than most grown ups!
For example, his son doesn’t check his portfolio every day, he isn’t emotionally attached to his investments, and he doesn’t listen to the Jones brag about their new hot stock tips. He also understands that there are two basic rules of investing: 1) Don't put all your eggs in one basket 2) Don't play a loser's game (i.e. don’t pay a lot of fees).
These simplicistic, almost kindergarten-level lessons have enabled him to start a nest egg that will most surely grow into a comfortable college fund, first house fund, and retirement fund in the coming years. Anyone else think he’ll be replacing John Bogle?
If you’d like to listen to the whole interview on Sound Investing, you can download it here. Also, I’d recommend checking out the Marketwatch article that highlights his and other lazy portfolios performance.
Friday, September 26, 2008
How I saved $680 dollars this year!
I’m starting to take advantage of my newlywed status and I thought I’d start with my car insurance. Since my coverage is up in October anyways, I thought I’d shop for new coverage for both of us. It's one of those tips to save money that I always see in blogs, but I always think it is not really worth the time and effort. However, being unemployed means I have time to do things like this, so I did.
I have an old full size car and my hubby has a nice zippy commuter car. We both wanted Bodily Injury Liability of 25K person/50K accident, Property Damage Liability of 25K, Medical Payments of 1K, Uninsured motorist bodily injury of 25K person/50K accident, Comprehensive deductibles of $500, and he needed Collision for his car with a $1000 deductible (my car isn’t worth enough money to get Collision).
Boy that’s an ugly string of information- isn’t it?
Whew!
Well, after I typed that information into eight different carriers this is what we came up with:
Premiums for six months for both of us:
Progressive-$893.8
Esurance-$782.5
Geico-$737
State Farm-Couldn’t get the site to work, and after five tries I gave up.
All State-$1,038.99
AAA-$699
California Casualty-$862.5
21st Century-$741
I thought there would be a difference, but Oh-My-Gosh a $339.99 difference! Talk about a way to save money! That’s a savings of almost $680 for this upcoming year; all for about an hour worth of time in front of the computer. $680 an hour- now that’s a well-paying job!
I had no idea that this would be such a smart thing to check out! Have other people had similar experiences with their car insurance quotes?
I have an old full size car and my hubby has a nice zippy commuter car. We both wanted Bodily Injury Liability of 25K person/50K accident, Property Damage Liability of 25K, Medical Payments of 1K, Uninsured motorist bodily injury of 25K person/50K accident, Comprehensive deductibles of $500, and he needed Collision for his car with a $1000 deductible (my car isn’t worth enough money to get Collision).
Boy that’s an ugly string of information- isn’t it?
Whew!
Well, after I typed that information into eight different carriers this is what we came up with:
Premiums for six months for both of us:
Progressive-$893.8
Esurance-$782.5
Geico-$737
State Farm-Couldn’t get the site to work, and after five tries I gave up.
All State-$1,038.99
AAA-$699
California Casualty-$862.5
21st Century-$741
I thought there would be a difference, but Oh-My-Gosh a $339.99 difference! Talk about a way to save money! That’s a savings of almost $680 for this upcoming year; all for about an hour worth of time in front of the computer. $680 an hour- now that’s a well-paying job!
I had no idea that this would be such a smart thing to check out! Have other people had similar experiences with their car insurance quotes?
Thursday, September 25, 2008
Free Ice Cream!
The old adage is that you can’t get something for nothing…
… but well, this promotion is darn close to negating that phrase!
See Cold Stone Creamery is having their free scoop night TONIGHT!
Cold Stone has teamed up with the Make-A-Wish Foundation and is giving out free pre-made creations! The creations highlight their new ice cream flavors and any donations given go directly to make wishes for children with life threatening illness come true. This is a great cheap, fun activity of the week!
The hubby and I are going to stroll downtown and get some ice cream tonight- how romantic! We’ll probably donate a buck or so, but the whole evening will have low costs and high hedonic value. If that’s not a savvy plan- I don’t know what is!
http://www.coldstonecreamery.com/promotions.html
… but well, this promotion is darn close to negating that phrase!
See Cold Stone Creamery is having their free scoop night TONIGHT!
Cold Stone has teamed up with the Make-A-Wish Foundation and is giving out free pre-made creations! The creations highlight their new ice cream flavors and any donations given go directly to make wishes for children with life threatening illness come true. This is a great cheap, fun activity of the week!
The hubby and I are going to stroll downtown and get some ice cream tonight- how romantic! We’ll probably donate a buck or so, but the whole evening will have low costs and high hedonic value. If that’s not a savvy plan- I don’t know what is!
http://www.coldstonecreamery.com/promotions.html
Wednesday, September 24, 2008
More Martha!
I had a lot of people read my blog about Blogging Rules that I saw on Martha. I wanted to update people who may not know that Martha Stewart has her own blog! I know, I know- it's not about personal finance. However, I like going there to get cheap craft activities and meal ideas. Reviewing these idea are a great way to have fun and save some money in tough economic times!
Responsibility First
To continue my series about people near (or in) retirement and their experiences with money; I interviewed ReggieMama- a self-employed mother of two grown boys.
Before she was ever a mother or an entrepreneur, she was a young nun teaching in New England. She made a bold move in her twenties to leave most of her family (and the convent) and moved to California with only $50 in her pocket. While she has been bold with her major life choices, none of them were influenced by greed. She emphasizes that personal responsibility coupled with a desire to care for her family has been the driving forces that have set her up for a comfortable retirement in the upcoming years.
SCS: When you were 26-years-old how did you view money?
ReggieMama: I didn’t give money much thought. I had enough for rent and other basics. At the time I was teaching and making next to no money, but I loved what I was doing so I was happy. I wouldn’t have turned down a lot of money, but I would never have based my profession on it.
SCS: When you were 26-years-old how did you view wealth?
ReggieMama: I never thought about wealth.
SCS: How do you think of money now?
ReggieMama: I think of money now as a colossal pain in the ass.
Oddly enough I’ve always earned a lot of money over the course of my career (I didn’t stay in teaching), but I think the reason is because I’ve enjoyed so many aspects of my work.
Raising a family forces a person to plan, save, invest, and worry about money. However, it has never meant more to me than providing for my family and it still doesn’t. As I near retirement age, it annoys me that I have to think about it even more, but it’s part of life, and we’ve never wanted to stick our kids with taking care of us or have them worried about us in our old age.
SCS: How do you think of wealth now?
ReggieMama: Real wealth has nothing to do with money. The pursuit of monetary wealth in this country has caused too many people to sacrifice their principles at the expense of others and it’s contributed to the financial mess we’re in now.
SCS: What events in your life shaped your current beliefs about personal finances?
ReggieMama: The families we grow up in play a part in shaping our beliefs about money, and I saw a lot of goofy things growing up that helped me recognize what’s important and what isn’t.
Taking care of others has always been important to me and that is only possible if we are taking responsibility for ourselves first.
Before she was ever a mother or an entrepreneur, she was a young nun teaching in New England. She made a bold move in her twenties to leave most of her family (and the convent) and moved to California with only $50 in her pocket. While she has been bold with her major life choices, none of them were influenced by greed. She emphasizes that personal responsibility coupled with a desire to care for her family has been the driving forces that have set her up for a comfortable retirement in the upcoming years.
SCS: When you were 26-years-old how did you view money?
ReggieMama: I didn’t give money much thought. I had enough for rent and other basics. At the time I was teaching and making next to no money, but I loved what I was doing so I was happy. I wouldn’t have turned down a lot of money, but I would never have based my profession on it.
SCS: When you were 26-years-old how did you view wealth?
ReggieMama: I never thought about wealth.
SCS: How do you think of money now?
ReggieMama: I think of money now as a colossal pain in the ass.
Oddly enough I’ve always earned a lot of money over the course of my career (I didn’t stay in teaching), but I think the reason is because I’ve enjoyed so many aspects of my work.
Raising a family forces a person to plan, save, invest, and worry about money. However, it has never meant more to me than providing for my family and it still doesn’t. As I near retirement age, it annoys me that I have to think about it even more, but it’s part of life, and we’ve never wanted to stick our kids with taking care of us or have them worried about us in our old age.
SCS: How do you think of wealth now?
ReggieMama: Real wealth has nothing to do with money. The pursuit of monetary wealth in this country has caused too many people to sacrifice their principles at the expense of others and it’s contributed to the financial mess we’re in now.
SCS: What events in your life shaped your current beliefs about personal finances?
ReggieMama: The families we grow up in play a part in shaping our beliefs about money, and I saw a lot of goofy things growing up that helped me recognize what’s important and what isn’t.
Taking care of others has always been important to me and that is only possible if we are taking responsibility for ourselves first.
Tuesday, September 23, 2008
171st Carnival of Personal Finance
Yesterday ushered in fall and with it came the 171st Carnival of Personal Finance hosted by Sound Money Matters. My blog highlighting blogging tips from Martha Stewart’s show was featured!
My other favorite blogs that were highlighted include:
Retiring at 29 by My Dollar Plan Not likely to happen to me, but still inspirational in an extremely jealous sort of way.
Love the simplicity on Free From Broke
Reitred at 47 has in interesting way of looking at products through price ratios
Cash on the barrelhead is another Mint lover like me!
Distilled Rose has dove into a place I’d like to once I get a job- being a lender at Prosper
Since I don’t have an investment advisor I saw Funny About Money’s post about emails with their adviser as oddly interesting.
JoshuaBest also praises ING in his Ladder approach to emergency accounts
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