Batting 1000 in Personal Finance
One small step for me, one giant leap for personal finance!
Okay, I won’t get ahead of myself.
1000 Served
I passed my 1000th visit yesterday, whoopee! I know 1000 is not very many but everyone has to start somewhere. Getting started is the hardest part but also the most crucial to success 🙂
Providing Inspiration
Based on the standard personal finance metrics, I feel I’ve done pretty well living a money smart life to date. The next obvious step to me is help inspire others to be money smart and talk about how to “keep it real” when it comes to a money/life balance. One thousand visits is almost 1000 times more of a difference I would have made without this site. The Internet is a wonderful thing, thanks Al Gore :).
Thank You
My favorite spot on SiteMeter is the “By Referrals” page. Very interesting and useful to checkout where people are flooding, or trickling, in from. Thanks to those of you that point readers my way. Also, thanks to those of you offering comments, I think discussion is a great way to learn and grow.
To Infinity and Beyond
“If you want to talk the talk, then walk the walk.” I guess if I want to inspire others to save and invest I need to talk about where I’m at in my personal finance journey. One thing I need to do next is publish my financial standings as so many others have done.
Henry over at BinaryDollar.com let me know he didn’t think much of my site’s look and feel but was adding this site to his blogroll anyway. I thanked him for the link and assured him a new theme is in the works. Once it arrives, let me know what you think.
I have some other cool ideas (at least they seem cool in my head) that I’m working on that will hopefully broaden the discussion and awareness of personal finance. I can’t wait to share them with you!
Thanks for reading and joining the journey for a money smart life!
The Million Dollar Savings Club
How long does it take to build up 1 million dollars, saving 3 dollars a day?
Join the Club
As usual with personal finance, the answer is “it depends” but you can check in with
Bryan Fleming to see how the first 100 days have gone. He started up the The Million Dollar Savings Club back in August and provides a running commentary on how the money is accumulating.
Everyone has to start somewhere; Bryan is motivating all those that want to participate to stop messing around and start saving NOW!
Your Money or Your Life?
I ran across his site from a comment on a recent article and was pleased to see that it contains a mix of personal finance content and personal development information. The concept of encouraging others to be financially smart but not at the expense of living your life are near and dear to my heart.
Personal Growth Carnival
The Personal Growth Carnival, hosted by Bryan, is in its 22nd edition and promises some great information on our journey for a money smart life. Two entries that caught my eye from this week were Think Money Wouldn’t Change You? Think Again and Would Steve Jobs Have Kick-Started Your Quest for Financial Freedom?.
Check out the carnival and if you haven’t started saving your first million then join the club today!
Turning Credit into Cash Instead of Debt
What if we used credit only for growth and not consumption?
Professor Muhammad Yunus, the winner of the 2006 Nobel Peace Prize, shows us a whole new meaning behind the concept of credit. When Yunus saw a way to make a difference by giving out tiny “microcredit” loans to the poor in Bangladesh the Grameen Bank was born.
As described on the bank’s website, Grameen Bank “provides credit to the poorest of the poor in rural Bangladesh, without any collateral“. Having helped around 5 million borrowers Grameen Bank is an example of responsible credit use that stands in sharp contrast to the current levels of debt in the US.
Grameen Bank discusses how it uses microcredit to help those with no credit history and no collateral. The loan “is offered for creating self-employment for income-generating activities and housing for the poor, as opposed to consumption.”
A successful example of people utilizing the loan to create income are the 260,000 “phone ladies” throughout Bangladesh. Women living in villages without phone service borrow money to purchase a cell phone and usage minutes. They then “rent” out their phone to other villagers. Once they’ve made enough to pay back the loan, any additional earnings are theirs to keep.
So, what if we used credit only for growth and not consumption? What if, instead of borrowing to buy, we borrowed to create income? Imagine, that for every dollar we spent on our credit card last year, we had turned it into $1.10 or a $1.25 instead of spending it down to $0.00. We won’t win the Nobel Peace Prize with this approach but we’ll certainly be much farther along on our journey for a money smart life.
Is Our Frugality Cutting Into Amazon.com’s Profit Margins?
Festival of Frugality
The Festival of Frugality is ready for a read over at The Frugal Duchess. Sharon’s writing skills are revealed as she summarizes the unique aspect of each article with a short comment for each. Her intriguing description of my contribution, Shopping Your Way Out of Debt makes me want to read it and I already know what it’s about!
“This blogger offers a challenge and a game. Super strategy for having your cake and saving it too.”
Amazon Profit Margins
The most useful entry for me was Amazon shopping tips and hacks from Yan who has also built a pretty cool web tool to help us find the best deals! I think us frugal people are contributing to the low profit margins of Amazon.com, competition is grrrreat for consumers! I had no idea that their operating margins had gotten so low:
“4.1% for the past four quarters, now come in at less than Wal-Mart’s 5.9%. “
Of course innovation is the key to continued success and Jeff Bezos talks about Amazon’s next big thing, the Elastic Compute Cloud. I wonder how many pfblogs we could run on that monster?
Welcome Readers from Five Cent Nickel!
Hello, I’m glad you found your way here from the guest article at Five Cent Nickel, hopefully it convinced you to strive to become “The Biggest Saver”!
Some of the other topics I covered here at Money Smart Life this week are Following the Herd at the Carnival of Investing, the frustration of Flexible Spending Accounts at Tax Carnival #7, asking the question What was the World Like Before Credit Cards? at the Carnival of Debt Reduction #64, and Extending Your Life and Fattening Your Wallet at the Carnival of Personal Finance #77.
As I say in my about page this site discusses “How to Use Money to Live the Life You Want”. If you think these articles will help you live a money smart life, subscribe to my feed for more good stuff!
How to Build Wealth by Creating Urgency in Others!
CopyBlogger wrote a recent article discussing the best ways to create urgency in your readers. While his topic centered on generating urgency to create a sale, I think the need for urgency applies to personal finance sites as well.
Getting the Message Across
The importance of starting to plan, save, and invest as soon as possible is paramount! As we write about the topic of personal finance the more quickly and effectively we can convey this urgency, the more we can help others.
What are We Selling?
I’ve never thought of myself as a salesperson but I think one of the keys to writing about personal finance is selling others on why they should be concerned with personal finance. If we can illustrate the “why” then people will want to know more about the “how”, they’ll be eager for countless juicy personal finance tips. We are selling the urgency of getting started TODAY!
How Can We Sell?
Set an Example
Offer Advice
Encourage the First Step
Create Inspiration
Be Transparent
Give a Wakeup Call
Review Helpful Products
Building Wealth
Okay, so the title of the article is “How to Build Wealth by Creating Urgency in Others!”. Where does the wealth come in? It is built, one article and one comment at a time. Each question we answer, topic we cover, and person we help strengthens our grasp on personal finance in our lives.
As we’re creating urgency in others and evangelizing healthy personal finance we’re holding ourselves accountable, thinking through financial decisions, getting feedback, getting book deals (well, maybe just Ramit), and reminding ourselves to stick to the basics. For me, building personal wealth by empowering and motivating others is quite a rewarding concept and something I can look forward to on a daily basis.
Carnival of Debt Reduction #64
The Carnival of Debt Reduction #64 is up and running over at Necessary Virtues. Credit cards have brought some positives and many negatives to the world of personal debt. I ask the question, What Was The World Like Before Credit Cards?
The Simple Dollar puts things into perspective for me with his entry Nourishment on a Desperate Income. It reminds me that when money seems tight, there are others going through much more difficult financial times. I’m impressed with all that Trent has been through and glad to see he is persevering.
The Debt Consolidation blog has an article titled The Debt Mindset that discusses how the influences around us contribute to the way we see and think about debt. I’m 100% in agreement on this one, as I talked about here.
Thanks to Steve at Necessary Virtues for hosting this week!
Vanguard STAR Mutual Fund (VGSTX) – An Option for the Investing Rookie
An article today at The Simple Dollar talked about getting started investing with Vanguard mutual funds.
We have our Roth IRA’s in a variety of Vanguard index funds. We chose Vanguard for the same reasons that Trent lists: low expenses, good selection of index funds, and great company reputation.
Account Minimums
One thing that I found challenging when getting started investing was coming up with the account minimums that are required by various financial institutions. As part of their strategy of keeping their expenses low, Vanguard raised their account minimums for IRA’s from $1000 to $3000 about a year ago. The reasoning was that accounts with very low balances cost them the same to maintain as very large accounts.
By raising the minimums for an IRA investment, Vanguard did reduce their expenses but they also priced those that are just getting started out of the market. I called Vanguard the other day, inquiring about options for a family member that is looking to open a Roth IRA and was pleased to find they do still offer one fund for beginners.
Vanguard’s Answer
The Vanguard STAR Mutual Fund has an initial minimum investment of $1000, and minimum additional investments of $100. With an expense ratio of 0.36% and decent 1 year (8.67%), 3 year (11.35%), 5 year (8.59%), and 10 year (9.29%) returns this seems to be a good option for someone just opening an investment account without a lot of capital.
As of 10/31/2006, the asset allocation of the fund is 12.6% short-term reserves, 25.20% Bonds, and 62.20% Stocks. This may be more of a conservative approach than investors with a long time horizon are looking for. However, after their Star Fund investment has grown to $3000 they can move that amount into another Vanguard fund of their choice.
I’m still researching the best choice for a good entry level investment vehicle so if anyone has any other suggestions please let me know.
Wanted. Psychic with Experience in Flexible Spending Accounts
How much will you spend on health care next year? If only you had a psychic to help you figure that one out.
I went through the usual what-if scenarios this November when allocating my flexible spending account withholding. It is a useful tax reduction strategy but it can drive you crazy! The frustration of the process had mostly faded in my mind until today when I ran across an FSA article by Mighty Bargain Hunter.
As I attempted to calculate how much I’d spend next year for healthcare, I ran across a FSA Calculator on the United Health Care website. The helpful thing about the calculator is that it reminds you of all the different health categories. I’ve listed the potential expenses from the calculator below. Included are the questions I’ll ask the psychic once they respond to this add:
Deductible – Will my deductible go up next year? Wait, I guess I already know that one.
Copayment – How many times will I be sick enough to go to the doctor?
Eye Exams – Will my eyes go bad reading the fine print on the FSA forms?
Eyeglasses/Contacts – Will I throw my glasses across the room when my claim is denied?
Chiropractic Treatment – Will I throw out my back wrestling with my HR department?
Prescribed Medicines – What medicine might I need for the sicknesses I might have?
Orthodontia Services – How many hours will I grind my teeth while on hold with the FSA administrator?
Psychiatric Treatment – Will I go crazy worrying about not using up my FSA balance?
Maternity Expenses – Will we get pregnant next year? Oh yea, boy or girl?
Other Eligible Expenses – Is the cost of a psychic an eligible expense?
How You Can Extend Your Life and Fatten Your Wallet by Planning Ahead
How many times have you been stuck at work or on the road with an empty stomach?
Snack Attack
Trying to concentrate when you’re hungry is near impossible. We often turn to fast food, soda, candy, and salty snacks to ease our growling stomachs. While these items may ease our discomfort, they are also affecting our health and thinning our wallet.
The Alternative
So what, we aren’t supposed to eat when we’re hungry? I’m all about eating when you’re hungry; the key is anticipating the hunger. If you plan ahead you can stash healthy snacks in your desk or car.
Guilty as Charged
When I was stuck at the office one night this week I raided the candy supplies, dumping tons of sugar, fat, and calories into my system. I also sprung for outrageously priced items from the vending machine. Normally I bring along healthy snacks in anticipation of such an event but this time I was unprepared. I wanted to share the damage I did to my waistline and wallet to help you avoid the same mistake.
Save Money
If you think about the food you eat when you’re in a pinch, you often pay for the price of convenience. You can spend 2-3 times what you’d normally pay for the same items. Another common theme among quick and easy foods is they’re not very healthy. As JD talks about today there are definite costs of being overweight, tens of thousands of dollars over a lifetime.
Live Longer
What’s the point of having a money smart life if you don’t live long enough to enjoy it? It doesn’t take long to plan ahead by packing some healthy snacks before you head to work or on a trip. Sure it seems like a small thing but it can add up over time. Eating healthy snacks instead of junk food can give you many more years of your life to enjoy.
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I'm Ben Edwards and I've been addicted to personal finance since I was 12 years old.
That passion for money has paid off for my family - so in 2006 I founded Money Smart Life to help you afford the life that you want. Read My Story...
