Owner: Moolanomy - The Science of Money URL:http://www.moolanomy.com/ Join Date: Thu, 26 Jul 2007 08:03:24 -0500 Rating:0 Site Description: Personal blog about my journey to improve my personal finance knowledge, and the things I am doing to build a $1 million investment portfolio by 2017. Site statistics:Click here
Money saving idea #2: One less cigarette a day saves $91+ per year 2007-08-11 18:20:23 I am not a smoker, but a couple of my friends do. Some of them occasionally complain about money problem to me, so I was wondering what their smoking habit is costing them. I am not going to ask any of them to stop, but I hope this post will help them move in the right direction.
My first step was to figure out what a pack of cigarette costs. I went to a grocery store in my neighborhood and the cashier told me it is $6.75 a pack. I was shocked — that is expensive. I am not going to assume that this is what my friends paid, so I will use a more conservative $5 a pack (or 25 cents a cigarette).
If a smoker can reduce his consumption by just 1 cigarette per day, that translates into $91.25 year. Most of my smoking friends smoke about half a pack a day — that’s over $900 a year!
Here are some cool factoids:
Invest $900 a year at 10% and you have over $160,000 in 30 years
Life insurance costs more than twice as much for smokers versus non-smoker. I checke Read more:Money
My One Money Advice Meme 2007-08-18 08:00:23 I came across a post by Chris Garrett where he asked Can Bloggers Make a Difference? and encourage Bloggers to write about environmental issue on October 15, 2007, aka Blog Action Day. Our M-Network members will be participating to support this worthy cause. I invite you to do the same. Even if you do not have a blog, tell your friends about Blog Action Day and October 15th. Inspired by this, I am starting this little meme. My hope to help increase awareness around financial responsibility in our hyper consumption society.
The question: If you can give one advice, tip, or story related to money, what would you share?
“Save 10% of your income and make it automatic”
Previously, I shared with you how I put my savings on autopilot. I think this simple act can have huge impact.
Saving 10% of you pay can help secure your financial future
Less money to spend means less consumption that results in negative impacts to the environment
Less reliance on our stressed social Read more:Money
10 Baby Steps to Financial Recovery 2007-08-17 06:30:44 Sometimes when you are in really deep, everything you want to accomplish seems so monumental that you give up before you even begin. I came across Dave Ramsey’s Baby Steps and liked the sound of it. So, I imagined myself working with someone in a bad financial situation, and here are 10 little things that I would suggest to help him toward recover. The journey will be long, but as Confucius said “A journey of a thousand miles begins with a single step.” Without further ado, here is my version of the baby steps.
1. Empower Yourself
The first and the hardest thing to do is recognize that you are in bad financial situation and decide to do something about it. Arm yourself with knowledge about money, so that you can learn to master it. There are a lot of good books, blogs, and web sites that you can peruse to build your knowledge. I would like to recommend a short article on wealth building.
2. Stop Carrying Credit Cards
Sometimes the temptation to use those pla Read more:Financial
, Recovery
A month in review, M-Network, and other matters 2007-08-16 08:00:00 Readers
It has been exactly 1 month since I started this blog on July 15th with my first post: Wealth building made REAL simple. Since then, I have been blessed with daily visits from readers like you — 60 of whom are subscribed to my feed. If you are not one of the 60, please take a minute to subscribe now. To my readers, I want to say THANK YOU. Your daily visits and your comments gave me the encouragement to keep going each and every day.
Bloggers
I also want to say thank you to my fellow Personal Finance Bloggers who have been very supportive. I cannot mention all of you, but special thanks to The Digerati Life, Money, Matter, and More Musings, The Sun’s Financial Diary, Consumerism Commentary, Generation X Finance, MoneyNing, Moment On Money. By writing about my blog and posts, you gave this upstart a huge boost.
I also met a lot of friends through great communities like MBN Forums and GRS Forums. Hello guys!
Blog Carnivals
Until recently, I did not know what B Read more:review
, matters
FICO Credit Estimator, get your free estimate in 3 minutes 2007-08-15 09:00:35 Just this past Sunday, I did a roundup about FICO credit score and credit card usage. Coincidentally, I came across Check Your Credit Score For Free post on All Financial Matters Blog today. This sounds cool, so I went to have a look (I will actually show you myFICO Score Estimator since it is faster and has no advertisement). The calculator basically asks you 10 questions to come up with an estimated range of your FICO credit score.
The questions are:
How many credit cards do you have?
Follow up: How long ago did you get your first credit card?
How long ago did you get your first loan?
How many loans or credit cards have you applied for in the last year?
How recently have you opened a new loan or credit card?
How many of your loans and/or credit cards currently have a balance?
Besides any mortgage loans, what are your total balances on all other loans and credit cards combined?
When did you last miss a loan or credit card payment?
How many of your loans and/or credit cards are c Read more:minutes
10 things golf teaches us about investing 2007-08-14 09:01:35 The other day I was watching the news and saw that Tiger Woods just won his 13th major title — that is nothing short of phenomenal. Then my mind drifted back to personal finance issues and it dawned on me that mastering golf is similar to mastering the art of investing. Here are my thoughts.
Goal: When you play golf, you have a well-defined goal — take the fewest number of strokes in 18 holes. You know what course rating, so you can guess where you will end up based on your handicap (or past performance). In investing, it is also good to have a well defined goal — e.g., why are we investing, how long to you have, what is acceptable outcome, etc. Here is my $1 million by 2017 goal.
Planning: In golf, you will more or less know your opponents and the course. You may know which holes will give you problem, and where you can make up some ground. In managing your finance, you can anticipate some of life expected surprises — i.e., child births, accidents, home Read more:things
If I had a million dollars… 2007-08-13 09:00:17 Hin asked me if I was given $1,000,000, what I would do with it? Gee…I would be excited and scared, but here goes…
First, I would hire the best financial advisor I can find. So far, I have been doing well on my own — learning from the Web and books. But if a $1 million
is thrown on my lab (ouch…I think a $1 million would be quite heavy), I want the best to help me protect that million. My first question to them would be what could I do to minimize taxes?
Second, I would settle my debts. I think being debt free is one of the best ways to build wealth. However, with my mortgage being the biggest debt I owe, I will have to work with my financial advisor to figure out which is better: pay off the mortgage or use the money for something else — i.e., invest.
Third, I would share my good fortune with my family and a few close friends that may need financial help. I know the proverb: “Give a man a fish and he’ll eat for a day. Teach a man how to fis Read more:dollars
Moolanomy weekly roundup #3: “My Credit Score” edition 2007-08-12 09:20:23 I was going to do a saving for college roundup this week in preparation for my first baby. But, with so many cool credit related posts around, the saving for college will have to wait another week. This should not be a problem since my baby is not due until mid-December (I still have time right?). This edition is dedicate to a person whom I truly love, but still think the best way to get a better credit score is to own a lot of money and respond to every pre-approved letter.
The Simple Dollar wrote Personal Finance 101: Building Up Credit. This is a good primer for those who are new to FICO score. Trent covers the 5 primary components of the FICO score: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and types of credit used (10%).
Journey To Financial Freedom wrote How FICO score affect your Journey to Achieve Financial Freedom. The post covers the basics. Notables are the table that explains what your FICO score means and 6 wa Read more:Score
, Credit Score
Money saving idea #2: One less cigarette a day saves $91+ per year 2007-08-11 18:20:23 I am not a smoker, but a couple of my friends do. Some of them occasionally complain about money problem to me, so I was wondering what their smoking habit is costing them. I am not going to ask any of them to stop, but I hope this post will help them move in the right direction.
My first step was to figure out what a pack of cigarette costs. I went to a grocery store in my neighborhood and the cashier told me it is $6.75 a pack. I was shocked — that is expensive. I am not going to assume that this is what my friends paid, so I will use a more conservative $5 a pack (or 25 cents a cigarette).
If a smoker can reduce his consumption by just 1 cigarette per day, that translates into $91.25 year. Most of my smoking friends smoke about half a pack a day — that’s over $900 a year!
Here are some cool factoids:
Invest $900 a year at 10% and you have over $160,000 in 30 years
Life insurance costs more than twice as much for smokers versus non-smoker. I checke Read more:Money
7 mistakes I made when I went to college 2007-08-10 08:52:06 I recently read a post by Personal Finance Advice, Why Getting a Degree Isn’t Always a Sound Financial Decision. I thought it was a well written post that presented a valid point. Do not get me wrong…I am a strong advocate for college education. However, this post did remind me about my college days, and prompted me to write about the 7 mistakes that I made when I went to college.
1. Not considering the return on investment
Education is like any other investment — i.e., there are good ones and bad ones. Aside from your house, this is probably the second biggest investment you will be making. The problem was that my heart was set on going to an Ivy League school, and I stupidly turned down full scholarship to the University of Michigan at Ann Arbor (a top notch school). In short, I was young and irresponsible with money (my parents’ money). If I went to Ann Arbor instead I would have saved them about $20,000 a year (after scholarship and financ
M-Network Information and Guidelines 2007-08-09 17:04:15 M-Network is a new network of Personal Finance Bloggers.
The purpose of the network is for PF Bloggers to help cross-promote each other sites.
How can it help you? As a member your posts will automatically appear in the aggregated feed that is displayed on every member’s blog pages. Additionally, you site will also be listed in every member’s blogroll. This means:
More new readers and traffic to your blog
More incoming links to your blog
Higher Technorati Authority ranking for your blog
To qualify to participate in the network please read the following guidelines:
Your site must be a blog
Your blog must be mainly about personal finance, debt, frugality, investing, or other money related topics.
Your blog primary language is English
Your blog must have original content, not just links to other sites and blogs
Your blog must post at least 3 times per week
Your blog must have at least 4 weeks of posts so that we can observe the consistency and quality of your content
Your Read more:Guidelines
Garmin Nuvi 350 GPS, money well spent 2007-08-21 08:30:28 If you read enough personal finance blogs and books, you may fall into the trap of believing that you should not spend money on anything that is considered non-essential because hyper consumption is bad. Today, I just want to take a break from my usual routine and write about a gadget that I think was money well spent. I am referring to my trusty Garmin
Nuvi 350 GPS
system.
My wife, my sister, and my two brothers-in-law pooled their money and got me this wonderful Christmas present (thank you guys!). I think they spent about $400 at that time, but you can probably get it for less now.
I cannot tell you how many times this GPS saved me from getting lost — something that I am prone to do. If I can make this into yet another post about money, then it helped me save gas, time, and ultimately money. Anyway, it is also good for learning local streets and finding great little restaurants I never knew about. I also like it for long trips because I have the freedom to make deto Read more:Garmin Nuvi
Carnivals, MOMA Meme, and more 2007-08-20 09:45:47 I am breaking my usual one post a day routine here, but it cannot wait…
Carnivals
Thanks to both The Simple Dollar and I’ve Paid For This Twice Already… for hosting the carnivals and for including my posts. I also want to:
Welcome readers from The Simple Dollar who are following the Carnival of Personal Finance #114 to my post 7 costly retirement savings mistakes to avoid.
Welcome readers from I’ve Paid For That Twice Already… who are following the 101st Carnival of Debt Reduction to my post 10 Baby Steps to Financial Recovery.
MOMA Meme
Have you heard the latest buzz about MOMA Meme? If you can spare a few minutes, please join us and blog to promote financial responsibility and awareness. It is for a good cause! Apparently, it generated quite a buzz at Saving Advice.
My First Interview
I have never been interviewed before. Wow, that makes me feel like I made it somehow. Please visit Married and Broke to see Cup of coffee interview with Pinyo from Mool
Throw away junks, organize, and save money 2007-08-20 08:30:19 Right now my house is in the midst (mess?) of a renovation project. We are updating our bathroom which recently sprung a leak due to an array of broken and rusty pipes. We are also converting our dining room to a dual purpose “home office-guest bed room” combination in anticipation of the arriving baby.
We figure spending about $10,000 now will extend the useful life of this house for another 7-10 years before we have to bite the bullet and upgrade to a bigger house. We did some research late last year and the result was not good. For a modestly bigger house in a slightly better neighborhood, we essentially have to double our current mortgage. To us, one extra bed room does not worth $150,000.
With any renovation project, I have to look for stuff that I have not used for years. This makes me realize how important it is to throw away old junks and organize
things that I am keeping. I cannot tell you how many times I have to run out to my local hardware store or Home Read more:Throw
Moolanomy weekly roundup #4: “Retirement” edition 2007-08-19 10:00:38 This week roundup will focus on the subject of retirement. Something I look forward to hopefully sooner rather than later. The way I see it is that you can truly retire until you achieve financial independence; and that is what I want.
Financial Dominance wrote What Do I Need to Retire? and share with us things that differentiate people who end up living comfortably in retirement, and those who struggle with debt their entire life and into retirement. Do you want to know what it is? Give it a read.
If retirement seems like a thousand miles away and you do not know where to start, you should read Gather Little By Little’s Frugal Wealth Building - How To Build Your Wealth Cheaply. I think this is the perfect starting point for anyone that is just starting out, and also a great refresher for anyone that is already making the journey.
Do you feel like you never have enough money to invest for retirement? What if I tell you that you can save a cool half million for the price o
Top 10 tips for spending less at the grocery store 2007-08-25 08:30:09 1. Make a list and stick to it - planning is important
You can make the list based on what you need plus what is on sale by looking at the circulars for where you are going. Menu planning for your week by what is on sale in the circular can really save you a lot of money.
2. Don’t go to the store hungry
Everyone says this but it really is true. I even had trouble once when I went not hungry, but wearing chocolate-scented lotion. I kept smelling chocolate and seeing it too in the store and eventually I gave up and bought ice cream. Temptation is everywhere!
3. Take advantage of coupons or member cards
Some stores, like my local Kroger, have member cards that are free and you only get the sale price if you have the card. And if you don’t get coupons at home in circulars, you can find them online as well. Just google “coupons” or “grocery coupons” and you’ll find lots and lots of sites to help you.
4. Only go down the aisles you need
If you
Interview with Trent Hamm of The Simple Dollar 2007-08-24 08:30:07 I believe most of you know Trent
Hamm and The SimpleDollar
so I will not bore you with the usual questions. You can read more about Trent on his About The Simple Dollar page and Getting Started With The Simple Dollar. Without further ado, I will launch into my interview.
Pinyo: Trent, first thank you for giving me the opportunity to interview you. I do not believe you blog full-time, can you share with us how you can write so many good posts every day without having the blog interfere with your job and family?
Trent: I segment that part of my life. When I write, I write — when I’m not writing, I simply let it be and do other stuff. If I didn’t do that and compartmentalize everything, I would go absolutely crazy.
Pinyo: You recently gave an interview at Startup or Bust where you mentioned that you are a regular contributor at MSN Money. Can you tell us how you landed the gig at MSN Money and what is your take on deal?
Trent: An MSN editor contacted me in April about
No such thing as good debt? 2007-08-23 08:30:27 Yesterday, I read Good Debt?? There is No Such Thing on Gather Little By Little. First, let me say that I consider Glblguy a friend and a very respectable blogger; but when I read the title I thought what the heck is he talking about? This prompted me to read the rest of what turned out to be his usual over lengthy but excellent posts. The six types of debt he covered were:
Credit Card Debt
Agreed, completely bad. I always pay them off each month. The finance charge and fees are just ridiculous.
Car Loans
Guilty as charged, I bought a new car and still carry a loan. However, I do not know if I can fully agree with Glblguy about buying a “used junker.” I travel long distances a lot and I would rather have the safety and enjoy the comfort of a decent car even if it means I have to pay more. That said, I agree if all my travels are only a few miles from home; I can live with a junker.
Oh, and I do not know if I can ever bring myself to buy anything more than $25,000.
Top 10 money wasters, are you guilty? 2007-08-22 14:00:10 There are numerous posts and articles on this topic, but what the heck I will add some more to the information highway. From my personal experience, I can sincerely say these are the biggest money wasters around (not in any order):
Memberships that you never use — e.g., gym membership anyone?
Subscriptions that you never read – those magazines just piling up and I am killing trees. No more subscriptions, I promise.
Extended warranty on electronics — I was looking at a $450 digital camcorder and the store offers $189 extended warranty. Are you kidding me?
Car washes – I think this is strictly a new car syndrome thing. I used to wash my car every week. Now it is dirty as heck, but still runs great.
Relaxing at the mall – oh, do I hate this…
Eating out — I enjoy this as long as it is not excessive and in reasonably priced restaurants.
Any special programs and offers from your credit card companies – e.g., credit protection, credit mon
Welcome readers from the Carnival of Money Stories #22 2007-08-22 08:09:49 I am very excited that my post, Powerful life experiences about money, was one of the 12 selected among the 38 submissions to the Carnival
of MoneyStories
#22. Here are the other 11 articles for my readers
’ convenience:
Money Dummy: “Garage Sale Karma“
Fit Buff: “Free Water, What a Novel Idea“
Mortgage Blog: “Getting my First Mortgage“
Money Changes Things: “The ‘A’ List“
Bryan C. Fleming: “Buying into a Down Stock Market“
INTJ Personal Development: “Seven Mistakes In One Day“
The Digerati Life: “Avoid A Bitter Family Feud“
My Wealth Builder: “Signs of Being Considered For Promotion“
Money and Such: “37,500 Miles and One Robot“
Small Business Lessons: “My Day-Trading Lessons“
Fire Finance: “Tipping Guidelines“
Enjoy!
Read more:Welcome
Introduction to CAGR 2007-08-28 08:30:53 On books, web sites, and blogs (including this one) you may come across references such as “the S&P 500 has grown 13% annually for the past 30 years…” or something to that effect. You many wonder, as I did, what that mean and where did they get that number.
When someone states an annualized return, most likely he is referring to CAGR, or Compound Annual Growth Rate. For the past 30 years, the S&P 500 did not return a steady 13% gain every year – some years it went up, some years down, and some years nothing. In the graph below, you can see the S&P 500 percentage growth adjusted for dividend yield. You can see that the growth rate is different every year; and in 5 out of 30 years it actually went down (table column F).
Mathematically, CAGR measures the rate of change in a value between two points in time. The formula is express as:
CAGR = (ending value / beginning value) ^ (1 / years) – 1
For example, S&P 500 from 1977 to 2006 (adjusted for dividend yield)
Read more:Introduction
The Americans Super-size Problem 2007-08-27 09:43:08 On our vacation this past weekend, my wife and I ate out a lot (well, every meal actually). This was probably the most expensive part of our trip. Being from Thailand, eating out is an entirely different experience. Over there, portions are much smaller and less expensive. Whereas here in the U.S., portions are usually huge and more expensive. Personally, I prefers the Thai’s way better because it is cheaper to eat out, people do not over eat, and I try a variety of dishes at a time.
I understand that serving larger portions is beneficial for restaurants. The cost per dish is less thus maximizing profit, and the revenue per patron is higher thus maximizing revenue. But this is a huge problem, not just for Americans
, but for everyone. Here are the issues:
Obesity
According to the U.S. Census Bureau, obesity problem is at its all time high. I know food portion is not the only cause, but it is a contributor. The map below shows percent of obese (BMI > 30) in U.S. Adult Read more:Super
, Problem
Moolanomy weekly roundup #5: “My One Money Advice” edition 2007-08-26 08:30:27 On August 18, 2007, I started the MOMA Meme and asked my fellow bloggers to give their one money advice, tip, or story. My goal was to help promote financial responsibility and awareness in our hyper consumption society. Since that time, 38 bloggers have responded with their one advice…very good ones I might add. As such, I would like this week roundup as an opportunity to showcase these One Money
Advice.
If you have not participated, please jump right in and let me know so I can add you to the main list. While you are at it, do not forget to let your blogger friends know so that they can join in. May be we can get this list to 100…just may be.
What everyone is saying?
Pinyo said, “save 10% of your income and make it automatic“
Paidtwice said, “ignorance does not help you…knowledge is power, and with power you can institute change“
Being Frugal said, “practice contentment…realize that money and things aren’t going
August 2007 Net Worth Review (+0.20%) 2007-09-01 08:30:30 Thanks to the positive stock market close on August
31st, this month is not as bad as it could have been. Last month, I started using NetworkIQ to track my net worth. After entering all my information, my net worth went up by +0.20% and my liquid assets went up by +2.64% from 22.67% to 23.27% of $1 million goal; which is not bad compare to S&P 500 +1.29% growth. Overall, this is a nice recovery from July market slides.
Here are some key activities in August:
My retirement portfolio grew by +2.35% from net new money and stock market recovery:
I sold Hennessy Cornerstone Growth Fund (HFCGX) because I am trying to trade out high expense ratio mutual funds for low expense ETFs. Coincidentally, the fund suffered from some unknown meltdown from mid-July.
I bought shares in 3 ETFs: Vanguard Small-Cap ETF (VB), Vanguard Small-Cap Value ETF (VBR), and Vanguard Information Technology ETF (VGT) to add to my small-cap and technology positions, using proceed from HFCGX.
My non-retireme Read more:Worth
, Net Worth
Financial Independence Illustrated 2007-08-31 08:30:55 In my post, Are you wealthy? Here’s a test, I defined financial independence as: “when income from my assets can cover all my family living expenses and a few luxuries”. These words were never vivid in my mind until I read Your Money or Your Life by Dominguez and Robin and saw the illustration, which the authors called this the “Crossover Point.” This is perhaps the best graphical representation of the words financial independence.
Take for instance the graphic above. If my income (green line) is less than my expenses (red line), I can quickly accumulate debt (black line below $0). However, if I am diligent at reducing my expenses and improving my income, I can climb my way out of debt, and build assets (black line above $0) that appreciate in value and generate income. If the earnings from my investments (blue line) exceed my expenses, then I have achieved basic financial independence (the first crossover point). If it exceeds my current income, then I Read more:Financial
, Independence
, Illustrated
Beating the S&P 500, part 2 2007-08-30 08:30:11 In Beating the S&P 500, part 1, I showed you the numbers where my investment beaten the S&P 500 performance. In this post, I will show you a different way to look at the numbers and reveal how I managed the feat.
Here is different look at the numbers
If I start with $10,000 at the beginning of 2001, the following table shows the amount of money I have at the end of each year if I invested in my 401k (column B), VFINX (column C), S&P 500 (column D), and IRA (column E).
Graphically,
As you can see, my IRA investment still outperformed the S&P 500 quite handily.
How did I do it?
If you are looking for some secrets, then you will be disappointed with what I am about to tell you because it was not anything like that. My 401k has been invested in middle-of-the-road mutual funds due to lacks of options.
Here are the factors I believe contribute to superior performance for my 401k:
Regular Contribution — with 401k I purchase invest more money every 2 weeks. This allowe
Beating the S&P 500, part 1 2007-08-29 08:30:47 You may have heard people talk about beating the market. In this case, the market is usually the S&P 500 index. There are other U.S. indices such as, DJIA, NASDAQ 100, NASDAQ Composite, Russell 2000, Wilshire 5000, and many other domestic and international ones.
However, the S&P 500 is by far the most used benchmark for investment performance. It is a good benchmark because it represents a diversified portfolio of large and medium, value and growth stocks in many industries.
Why do I compare my investment performance against the S&P 500?
An investment that returns 15% sounds spectacular. However, if this happened in 2003 when the S&P 500 returned 28%, then it is not so good. By comparing an investment to the S&P 500, we get a more accurate measure of the investment true performance.
When I first started, I made many mistakes; including comparing my performance against a fixed number like 10%. After a few years, I learned about comparing my investment performance
Consumer Consequences 2007-09-26 08:00:09 I always have been interested in environmental issue, so “How Many Earths Would it Take to Sustain You?” from Consumer
ism Commentary caught my attention. From his blog, I went to Consumer Consequences; and according to the site:
“The Earth couldn’t supports its 6.6 billion residents if everyone lived like a typical American. Consumer Consequences will tell you how many planets it would take to support your lifestyle on a planetary scale and provide some ideas for making your “footprint” a little smaller.”
After I completed the game, I was disappointed to learn that it would take 5.4 earths to sustain my consumption habits. Here are the areas of impact, and higher numbers are worse for the environment:
Food (11) — I think it must be because I do not prepare my own lunch. I also like to drink coffee and beer, which seems to have big environmental impact — e.g., transportation, manufacturing, etc.
Transportation (5) — I driv
The Seven Deadly Sins of Personal Finance 2007-09-25 08:00:05 Last week, the post “Lazy Man and Jealousy” made me think about the SevenDeadly Sins
. I am not a Christian. My first introduction to the Seven Deadly Sins was (embarrassingly enough) from the movie Se7en (1995) staring Brad Pitt and Morgan Freeman. However, I’ve always been fascinated by the wisdom of ancient writings. So here is my version of the Seven Deadly Sins as it relates to personal finance:
1. Lust (luxuria)
“obsessive or excessive thoughts or desires”
This is the feeling of want that pop in to our head from time to time. Some of us can’t shake this until they go out to buy that object of desire.
To battle this sin: understand the difference between wants and needs.
2. Gluttony (gula)
“over-indulgence and over-consumption to the point of waste”
This is excessive consumerism — “bigger is better.” Some of us compulsively buy more than what is needed. For instance, three bedrooms house is not enough so th Read more:Personal
Determine Your Retirement Needs In 3 Easy Steps 2007-09-24 06:00:35 There are a lot of sites that help you determine how much you need to save for retirement to maintain your lifestyle. I have never been comfortable with them because they usually don’t share the logic behind their calculation. So I came up with the following 3 easy steps to calculate my own retirement needs.
Photo from stock.xchng
Step 1: How much do I need today?
For example, let’s pretend my wife and I make $50,000 per year and save$15,000 a year for retirement. When we retire 30 years from now, we don’t need to save $15,000 a year anymore. Therefore, we only need $35,000 per year.
However we want to improve our lifestyle during retirement, so we are going to bump it up to $40,000 per year.
I need $40,000 per year
Step 2: Adjust for inflation.
Now we have to adjust that $40,000 for inflation. For this example, we assume inflation rate is 2% per year. We accomplish this with the following formula:
Inflation Adjusted Income = Income needed today * (1.02 ^ Numbe Read more:Needs
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