February 2007 Monthly Archive
Posted by Cap in Personal Finance
on February 28, 2007 | 7 Comments
That is, getting an average return from your retirement investment.
As I’ve been reading and trying to learn more about investing, I notice a particular thing — people are obessed with beating the market. To be sure, I would love it too if my retirement account outperforms the market ten-fold; but at the end, I wouldn’t care even if its returns are below average.
What’s important to me is that the investment has reached my goal and can provide me with a comfortable living during my retirement.
I can’t recall where I read this from, but it goes something like this:
When it comes to investing for your retirement, you shouldn’t care too much about beating the market. No one has “Beat the S&P 500 by 22%!” on their tombstone. When a group of retirees in a wealthy retirement community were asked that if they have had better return than the market, the result was mixed. Some said yes, some said no, but what most ended up saying was: “it doesn’t really matter what the returns were, because it was enough to get me here.”
Posted by Cap in Even More Ramblings
on February 20, 2007 | 28 Comments
You’re waiting in line at the bus stop and suddenly you hear chattering behind you. In fact, a giggle escaped from one of the female standing behind you. Without turning around, you knew right away what they’re discussing about.
The floating green numbers above your head. A dollar sign follow by digits. Your net worth.
Unfortunately, it wouldn’t go away. You tried in vain to cover it with numerous things. A top hat. An umbrella. Your kid on a piggy back ride. The numbers just floats higher. You tried whacking at it with a stick or your hand but the numbers will merely fissile out momentarily, only to reappear later.
And so you stood there, painfully aware that your numbers is the lowest ones among those waiting in line. You curse the day that Supreme Overlord Xenu made it mandatory for net worth to be displayed publicly and wish that you were back in 2007, where your only problems were the fact that everyone and their mom wanted to run for the Presidency of the United State of America…
Imagine for a moment that your net worth is public.
Worse, your entire financial history is available to a stranger — if they’re curious enough.
Things will certainly look different when you see your neighbor pulls up on his drive way, getting out of his brand new luxury car with a big red negative net worth floating above his head. You may also be surprise to find out that the humble looking neighbor down the street is a multi-millionaire, who has somehow saved his way to wealth.
A simple trip to the grocery store or shopping mall may also drastically change. Perhaps people would be more self conscious on what they buy. Nice new designer jeans while you’re showing a negative net worth? Not so hot. A small tip when the floating numbers says you can afford a lot more? Again, not very fun.
Let’s not forget the safety issues too — especially when you’re stuck on the bad side of the town with a big dollar sign floating above your head. (On the other hand, a negative net worth may be robbery deterrent).
Family and friends may treat you diffrently. Co-workers will chit chat (office drama to the max). You will hear more lines such as these: “Eyes down here please, those numbers don’t determine me as a person!” It seems there will be more negative implications than positive ones.
What if your net worth is public? What would you do? How will you and the rest of us act?
Posted by Cap in Credit Related
on February 13, 2007 | 9 Comments
You know how credit cards companies will often get your name wrong on solicitations?
Wrong middle initial, typo on last name, it’s Brian not Bryan dammit, etc.?
Somehow Chase thinks I’m a doctor. Perhaps putting $178,000 for annual household income on the application wouldn’t land me an income verification…
Posted by Cap in Sunday Rant
on February 11, 2007 | 14 Comments
Random Sunday morning rant.
Does anyone else find it annoying that when you plug a USB cable into a USB slot, it’ll never fit in on the first try? Maybe it’s just me…
Posted by Cap in Woops, Bought Crap
on February 9, 2007 | 10 Comments
Unfortunate long time readers (i.e., my dad) would remember that I bought a brand spankin’ new 17″ monitor back in May 2005 — for a wacky price tag of $350 (just because it can pivot, rotate, and have a 8ms response time).
So why buy another monitor, the Samsung 941BW?
Um… because it’s widescreen? And there was a rebate?
$225.35 from Buy.com + $17.47 (tax) – $20 (Google checkout discount) – $40 (Samsung rebate) = $182.85
As if I really need the non-standard 16:10 aspect ratio, the extra screen space from the uncommon 1440 x 900 resolution, and the fast 4 ms response time.
What happened to the old monitor? It’s now set at the vertical portrait view setting, sitting beside the new monitor. Do I really need two monitors? Uh…
At the end, H.264 on widescreen + hypocrisy = yummy.
Posted by Cap in Updates
on February 9, 2007 | 1 Comment
Jeffrey of Personal Finance Advice has a very neat post titled: The Best Place to Hide Money: Conversation with a (former) Burglar.
A fairly good read that may give you a different perspective on safe keeping your valuables.
Posted by Cap in Credit Related
on February 6, 2007 | 9 Comments
So says Ditech.
It is of little wonder why my New Year is sucking.
Big new plasma TV for the Super Bowl? No existent.
Stabbing & shooting people waiting in line for a new video game console? Didn’t do it.
Scoring a new laptop so I can buy more memory to run Vista properly? Nope.
Pictures on an 8 MP — okay, seriously, does the average joe need more than 5 megapixel?
Listening to music on an mp3 player? Are you kidding? That’s totally 2003.
Forty five hundred on friends and family? It’s a good thing I have no heart.
Posted by Cap in Credit Related
on February 5, 2007 | 4 Comments
A conversation from five years ago:
“Today,” said a college freshmen friend, “I’m going to cut up all my credit cards, and never use any of them again.”
“Huh? Why?” I asked.
“Because I can’t stop using them! It’s getting me into a big pile of debt!”
“Oh please. That’s just silly,” I said as I dismissed her opinion, “it can’t be that bad.”
Two years and $10,000+ of my own debt later, I thought to myself: Hmm, maybe Deanna was onto something after all.
Most people know this fact: credit cards, when used irresponsibly, can land your booty in a pit of messy debt. Without credit cards, I probably would have been less in debt, perhaps in the ranges of a few thousand instead of ten thousand — but let’s face the fact, I would have been in debt regardless. It was 99% me and 1% credit card; the credit card didn’t magically swipe itself.
But despite everything, I still love credit cards. I rarely carry cash and I swipe my card on almost everything. Yes, even when purchasing $0.49 chewing gum. In fact, I buy pajamas with pockets just so I can have the credit cards with me while I sleep!
You might ask: what are you, a moron?
Although the answer is a convincing yes, that isn’t the reason why I still love credit cards.
I’ve been paying my purchases in full since I dragged my behind out of debt, and it has been years since I had a finance charge on my credit cards due to purchases.
I’ve racked up enough reward points on my American Express card to keep my subscription to the WSJ going for the next six years; I’ve also gotten enough cash back via my Citi Dividend Card to pay for months of broadband service, and I’ve earned hundreds in interest through various 0% balance transfer offers.
All these rewards and benefits of credit cards came about at the simple and “easy” price of responsible credit card usage. Pretty sweet, in my opinion.
On the Other Hand…
The average undergrad student has about $2,200 in credit card debt, and about one in twenty American households owes $8,000 (or more) on their credit cards. Statistically speaking, if you’re a college student — you probably have (or had) credit card debt.
Credit cards aren’t exactly a consumer friendly financial product. From high interest rates , two-cycle balance calculation method, to fees upon fees — it can be very easy for people to fall into the credit card trap. It’s little wonder why many people advocate avoiding credit cards.
You Don’t Have to Love Them Too
Just because some online nut job loves his credit cards enough to blog about them — doesn’t mean you have to get on the bandwagon too.
There are plenty of people that have stopped using credit cards due to the potential financial trouble credit cards may cause them — and that is perfectly okay. If you have serious doubts about your ability to use a credit card wisely and decided to forgo using them regularly — chances are, you’ll be fine.
Credit cards are not the only way to build credit (although they may be one of the simpler way). Even so, you do not need to actively use your credit card to build credit. You especially don’t need to carry a balance to build credit.
And let’s face it — earning points, rewards, or cash back is entirely pointless if you’re paying hundreds or thousands in finance charges.
However You Want to Swing It
If you manage your budget wisely and spend responsibly but are put off from using a credit due to the numerous horror stories, you may be doing yourself a disservice. Of course, if you use credit cards daily without understanding the cost associated with them, you may be putting yourself in financial risk.
At the end, regardless of how you feel about credit cards, having a full understanding of their pros and cons can benefit you immensely. After all, it’s entirely silly to love or hate something without really knowing it.
Love them, hate them, or don’t really care? You can vote on the top left of the blog.
Related Post and Links: