The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich

Someone else’s speeding ticket might make my dreams come true.

Escaping the Cubicle
I was reading about Trent’s speeding ticket late last night when I saw an ad for a new book Timothy Ferriss, the 4 – Hour Work Week. The title of this newly released book makes some promises that sound intriguing.

  • Escaping the 9 – 5.
  • Living Anywhere I Desire.
  • Joining the New Rich.

Count me in!

Punching My Ticket to Easy Street
After checking out the site for the 4 – Hour Work Week and its reviews on I decided to take a chance on the book and see what Timothy had to say about these lofty goals.

I typically don’t fall for such grand promises but it was late and after reading reviews by some people of note, I was intrigued. I’m particularly interested in his experiences on outsourcing life. The book’s on its way, I’ll let you know what I think.

What’s More Important, Career Success or Family?

I’ve been a fan of the TV show The Apprentice ever since it’s first season. I said before that I think you can learn a lot of business concepts from watching them play out in “real life” on the show. After last night, I realized I learned a life lesson from the show as well.

Success Takes Time
Last night was the finale of season 6 and the lady that was hired to work for the Trump organization will be earning a $250K annual salary to work on a project developing luxurious residences in the Caribbean.

When she was announced as the winner I said to my wife “lucky lady”. Of course, she didn’t win by luck; she came out on top through hard work, intelligence, and business savvy.

One thing I’ve found in the corporate world and in my entrepreneurial pursuits is that success takes time, large amounts of time. It seems you could always do better if you just had more time.

Career Success or Family?
As described in her bio on The Apprentice website, Stefani is a 32 year old lawyer that graduated in the top 10% of her law school class and was selected as a Los Angeles Magazine ‘Young Rising Star’ in 2006 for excellence in law. I’m sure that Stefani’s job as a trial attorney for one of the largest California defense firms kept her very busy and that she’ll be even busier now that she’s working for Trump.

Even though I admire and somewhat envy her new career situation if I was offered the exact same job I don’t know whether I would accept it or not. The time and dedication it would require would mean time away from my family that I wouldn’t really want to sacrifice.

I’m sure Stefani will have an amazing experience in her new job and I congratulate her on the achievement. How about you? Would you take the job or pass it up to give yourself more time to live life outside of work?

Money Question – Can You Save Too Much in an Emergency Fund?

MoneyquestionAny personal finance book or website that’s worth reading will recommend that you save up some amount of money for rainy days; otherwise known as an emergency fund.

Recently a reader wanted to know how much money was too much to save and the best place to keep the money so it wouldn’t be idle:

“Is there such thing as saving too much money in an emergency fund? What’s the best place to keep the money you do save so it still earns you something while just sitting there?”

I asked my blogging buddies for their take on the question and received a variety of answers. I’ll publish their thoughts on emergency funds over the next several days. Today we’ll hear from Henry and the Lazy Man.

Lazy Man @ Lazy Man and Money
I’m going to make an assumption here that the emergency fund is making around 2% after inflation. This seems to be the case with the popular options such as online banks that pay high interest rates.

With that assumption in place, I say that you most definitely can have too much money earning a paltry 2%. With common stock historically returning a 6%+ on investment after inflation, it’s a better place to be in the long term (in my and many other’s opinion).

So where is the best place to keep your emergency fund? For probably the vast majority, the online banks that earns high interest is the way to go. For those who are home owners and comfortable with a tiny bit of risk, I would suggest looking into using a HELOC for your emergency fund. Many people would find the idea of using your home’s equity as an emergency fund crazy. Is it that crazy though? Many people use it for non-emergency situations like home improvement.

Why the HELOC? If you define your “emergency” criteria enough, the vast majority of the average person’s life is going to have very few of them. With any luck, true time of using emergency funds should be less than 5 years. I’m picking that number out of a hat, I didn’t do extensive research. If that’s the case, would you rather pay a tax-deductible 8% (a realistic 6% after tax savings) for years, making 6% for another 55 years of a projected adult life? Or would you rather make 2% for 60 years of projected adult life? I’ll take the former.

Henry @ Binary Dollar
I suppose it’s possible to save too much in an emergency fund but it’s unlikely. If some dude gets in a car crash, would he have:

1) money for a new car in case their old one gets wrecked?
2) money for medical expenses?
3) money for living expenses?

He’d be saving too much in his emergency account if he could cover all of these pretty easily. Unless they have that kind of dough stashed away, most people won’t have to worry about saving too much in their emergency account.

Emergency Fund Options
Henry brings up a good point; many people have a difficult time putting away money for an emergency fund so its unlikely that majority of people would be saving too much. However, if you do have the resources and discipline to build up an emergency fund Lazy Man gives an option for homeowners to get a better return on investment on the money you have saved while still maintaining easy and fast access to cash in the event you need it. What are your thoughts?

Why It’s Hard to be Good With Money

Every week there are many different websites hosting a collection of articles on a multitude of money related topics. You’d think after several weeks or months people would eventually run out of things to write about.

The reason we always have new topics to explore and discuss is that money is a complex asset with many facets that touch our lives in a variety of ways. It’s difficult to wrap your brain around the depth and breadth of these money issues, that’s why it’s hard to be good with money.

Although keeping up with the many money articles published in blog carnivals every week can be a bit overwhelming, sifting through the wealth of information is a great way to learn how we can be better with our money. Here are a number of money carnivals I’ve participated in and enjoyed over the last several weeks:

Thanks to the hosts that compiled all of these carnivals. You may not realize it but you’re helping guide us on our journey for financial success!

Personal Finance Week in Review – Sprinkler System Edition

SprinkerSystemSpring is here and for me that used to mean hours of dragging around hoses to water our lawn. I’m happy to announce that after a weekend of work our self-installed sprinkler system is back in business!

My father-in-law and my wife’ uncle helped me install a sprinkler system about two years ago. It’s been out of commission since last summer and they made the trip down to help me fix it since it was still “under warranty”, thanks guys! Now I’ll have more time to enjoy the beautiful spring weather and of course write about personal finance. Here are some money articles I found of interest this week:

Both Digerati Life and Lazy Man have interesting comparisons of investing in stock vs investing in real estate.

As the summer vacation season nears KMull warns us about the cash flow implications of renting a car with a debit card.

The new “no hassle” investment option of Life Cycle Funds are becoming more and more popular. The Sun gives us a comparison of Life Cycle Funds offered by Vanguard and Fidelity.

Advanced Personal Finance offers a few pros and cons of using only one financial institution for all of your money dealings.

A wise peice of advice from Henry, make sure you take advantage of free money by investing in your 401k up to the company match.

The Simple Dollar caught my eye when he shared his experience with a side business and asks for the stories of others.

Golbguru extends Robert Kiyosaki’s Rich Dad, Poor Dad concept a little farther with Rich Dad, Poor Dad, Smart Dad, Stupid Dad.

Last but not least, Generation X Finance covers another sign that you could be in financial trouble, Purchasing a Home for the Wrong Reasons.

Have a great weekend!

How To Save Money On Shipping When Shopping Online

Would you pay $27 to ship an item that only cost you $35? Believe it or not, someone actually paid me that much yesterday for an eBay item. Of course, they live in Greece so that explains the high cost but it made me think about how shipping costs are out of control for online shoppers.

Shipping Costs Gone Wild
As the price of fuel rises, so does the cost of shipping. Not all online sellers have passed it onto their customers but as the price of gas continues to climb I imagine more and more merchants will raise their shipping rates. Here are some things you can do to help offset higher shipping costs for your online purchases.

Consumer Leverage
Google Checkout is on the hunt, trying to lure both merchants and consumers away from Paypal. Competition is always good for consumers, both Google Checkout and Paypal offered consumers free money recently in order to win or keep users.

Sign up for these types of offers when they occur, I used the $10 for signing with Google Checkout to pay the shipping costs and even some of the purchase price of my latest online buy.

Amazon Super Saver Discount has a Super Saver discount that offers free shipping as long as you spend a $25 minimum on their products. While this can save you money, beware of buying more than you need just get the free shipping. I’ll bet Amazon did a lot of research to determine which Super Saver Shipping minimum price to set to get people to buy more stuff. One way to take advantage of the free shipping without buying more than you planned is to combine an order with a friend or co-worker.

Amazon update thanks to MoneyChangesThings and philskaren

Amazon also offers a program called Amazon Prime that costs $79 a year and has the following features:

* Free Two-Day Shipping on qualifying items
* Overnight Shipping for $3.99 per item
* Ship to any eligible address in the contiguous United States
* No minimum purchase required
* Share the benefits of your Amazon Prime membership with up to four family members living in the same household

eBay Purchases
A common problem you may have encountered on eBay is people heavily discounting an item but charging exorbitant shipping fees. eBay has tried to crack down on this practice recently but it’s hard to police.

The best advice I can give on lowering your shipping cost on eBay is to simply to ask for a discount. If you’re only buying one item don’t expect the seller to budge much or at all. However, it doesn’t hurt to ask. Maybe they’ve been sitting on that item for a while and will offer lower shipping in order to make the sale.

If you’re already planning on ordering more than one thing, then definitely ask the seller for a discount for combined shipping. You can even ask for a lower sale price if you’re buying more than one. If someone asks me I’ll almost always give them a break on price and shipping if it means I’ll sell more products. Of course the seller might say no but why not try?

Shipping Basics
Here are a few more strategies you can use to lower your shipping costs that are pretty basic but worth mentioning.

Buy Online, Pickup In the Store
Removes some of the convenience but if the store is on your way then it can save you shipping without costing you extra gas money.

Location, Location, Location
This might not apply for larger retailers but for sites like eBay, if you can find a seller that’s located closer to you then you’ll pay less shipping.

Slow Ship
Time is money, the less time you have, the more it costs to ship. If you can wait a little while for your item you can save money on shipping.

Shipping Tips
I’m always looking for a way to save money when shopping online. What are some tips or tricks you’ve used to cut your shipping costs?

Would You Pay Higher Taxes for a Cleaner Environment?

Everyone wants a cleaner environment but who’s willing to pay for it?

A Global Warming Tax?
I heard a blurb on NPR this morning that Americans think the biggest environmental problem we face is global warming. However, when asked if they’d be willing to pay higher taxes to improve the problem the majority of people said no.

The carbon dioxide produced from automobile and power plant emissions is a major contributor to the greenhouse effect. The radio report mentioned potentially taxing electricity and gasoline to help offset the effect of greenhouse gas created from coal burning power plants and gasoline burning automobiles.

What’s a Money Smart Solution?
We work so hard to earn and save money; anytime someone brings up a new tax my first reaction is, no way! I think I understand the reasoning behind the taxes:

  • Use tax revenues to offset the negative impacts of greenhouse gases or find alternative energy options
  • Raising the price of consumption would change habits & lower usage

These ideas are great in theory but would they really work? Would the government fund more anti-pollution measures and energy innovation? Would we use less gasoline or electricity? Or would the energy and pollution problem just remain the way it is with us consumers just paying more taxes?

The money grubber inside of me says keep your hands off my wallet but the nature lover says we have to try something. Would you be willing to pay “environment” taxes? If not, what’s a better solution?

Crawl, Walk, Run Your Way to Riches

I’ll never forget April 18th. No, not as the day the IRS extended the tax filing deadline, something much more memorable. I’ll always remember it as the day our little guy took his first crawl around the living room!

Proud Father
I’ve never been so proud of anyone before. I’ve never been so involved in such a huge step in someone’s life. I’m amazed at how much he’s grown and learned in the first ten months in this world. The process has been wonderful to watch and is a reminder that personal growth and success take time and persistence.

Baby Steps
Our little boy didn’t start crawling the day he was born. It took him almost ten months to figure it out. He won’t start walking tomorrow and he won’t be running the day after he walks. Everything in life is a process and achievements are built one step at a time, typically on top of a previous success or lesson learned.

Taking the First Step
Your goal may just be to get a solid grip on your finances or it may as lofty as becoming independently wealthy. Whatever it is, the only way to get there is by attempting that first “crawl”.

Start with the basics of learning to budget your money. Once you know how much you have and where you’re spending you money make a plan to pay off any debts you have, especially credit card debt. The Simple Dollar has a great series called 31 Days To Fix Your Finances that can help you get on track.

Dave Ramsey has a multi-stage program he calls the Debt Snowball that people can use to help pay off their debt. He emphasizes that you shouldn’t move on to a new stage until you’ve achieved the goals of the stage you’re in. This applies not only to debt reduction but most financial concepts. Once you’ve learned to “crawl”, you can start learning to walk.

Start learning the basics of how to invest your money. Smart Money magazine provides a great online resource for beginning investors called Smart Money University. You can start off by investing in a mutual fund in your IRA, 401k, or 403b.

You might want work with a fee-only certified financial planner to help you build a financial plan for your future and advise you on what investments to get started with to meet those goals.

Some people never really move onto the running stage. Let’s face it, life is busy and you might not want to spend any more time or energy than you already have on your finances. This is perfectly fine. Once you have a good financial base and plan setup, as long as you are consistent you should do just fine. As they say, slow and steady wins the race.

However, some people want to learn more about finances and become active investors. If you have the urge to run, the first thing I’d advise is reading the Intelligent Investor by Benjamin Graham to learn the difference between an investor and a speculator. Then I’d go through the series, 30 Days to Becoming a Better Investor. Being an active investor can pay off but attempting it without knowledge and discipline could lose you a lot of money.

Financial Success
Our little guy tried night after night to crawl and finally figured it out. Don’t get discouraged when things don’t make sense or don’t go according to plan. Keep learning and using what you’ve learned and you’ll make progress as well.

Don’t expect yourself to start rolling in the dough right away. Even moguls like Warren Buffett had to crawl and walk in the world of finance before they could run with the big dogs. If a few months old baby has the fortitude to keep trying and learning don’t you think we can do the same?

Did You Know 2007 Tax Season Starts Today?

Did it hurt to do your taxes this year? Was it painful to write that check? Was it a hassle to wade through a sea of receipts? Aren’t you glad its over until next year? Well it’s not!

Taxes Year Round
Although we only have to file once a year, we’re paying taxes almost every day of our life. The Tax Foundation actually calculates how many days the average person in the US spends working for the first few months of the year just to pay their taxes. This year Tax Freedom Day is on April 30th. Can you believe if you spent every dollar you earned on paying taxes it would take from January 1st – April 30th to pay the off in 2007? So contrary to the title of this post, the 2007 tax season doesn’t start today, it began on January 1st.

Tax Education
As I dropped my return in the mail last night I heard a man comment, “thank goodness I’m done with taxes for another year.” I used to feel the same way. I didn’t know much about the tax law, I just paid whatever TurboTax said I owed every April.

Over the last year I’ve learned that if you know the tax rules there are many things you can do throughout the year to help ease and manage your tax burden. Unfortunately the tax code is immense and overwhelming. It’s so complicated that companies and individuals pay tax lawyers and accountants big bucks to help them decipher how it best applies to them. Despite this complexity, I’ve decided to take on the task of learning more about the tax rules.

Lower Your Taxes
A common saying states that “knowledge is power”. In the case of taxes, understanding the tax rules can give you the power to reduce the taxes you owe. Tax expert Sandy Botkin phrases it well when he says, “The more you know, the less you owe!”.

I’ve started listening to Sandy’s audio series Tax Strategies for Business Professionals on the drive to and from work and as I pickup tax tidbits I’ll share them with you here. It’s a long term project; it will take me at least a year to see the benefits of what I learn. However, many of the things I learn one year should carry over to following years so using the title of Sandy’s book; eventually I’ll be able to lower my taxes big time!

How to Impress Your Boss by Screwing Up

Everyone makes mistakes. Sometimes the way you handle your mistake can actually turn it into an opportunity.

My Mistake
Due to bad listening on my part, I’ve spent the majority of the last two days at work, fun fun. My boss made a commitment to our Vice President of Technology and asked me to make sure it was carried out. I misunderstood the timeline so when my bosses boss came looking for status on Monday morning it was panic time.

My Solution
Everyone from my boss on up to the Vice President were expecting a deliverable that could save or cost the company hundreds of thousands of dollars. The bad news is that it wouldn’t be done on time and it was fault. Rather than dodge responsibility for the issue, which seemed tempting at first, I acknowledged my error and set to correcting it. Now after two days of long hours and hard work it appears the project will be a success. Although I was the cause for the delay, my handling of the situation proved my ability and dedication to my boss and his managers.

Making Mistakes
As we all know, everyone makes mistakes. If you can learn from those mistakes then you’ll be better off. A great illustration of this is the young businessman who blew a $100,000 dollar deal with a client. As they left the meeting the dejected businessman asked his boss, “Sir, are you going to fire me for losing that client?”. His boss gave him a funny look and said “Are you crazy? I just spent $100K training you, why would I fire you now? You’ll nail the next one, if not, then you’re fired.” We all make mistakes, how we handle and learn from them determines how others will reward or punish us for them.

Promotion Payday
In an ironic twist my boss called me today with some exciting news. I saw his number on my phone and thought it was more bad news about the project. However, when I answered it was a different type of news altogether. The promotion I’d been waiting on had come through!

Hopefully this shows the promotion advice I’ve given has some merit. Unfortunately promotions typically require a good deal of hard work to come by. Turning your mistakes into opportunities can help speed up the process of getting promoted. Just don’t make too many mistakes

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