Owner: Exjackly URL:http://www.exjackly.com Join Date: Mon, 01 Oct 2007 08:41:04 -0500 Rating:0 Site Description: Exjackly aims to help people think about their financial life more productively. By changing how we think about money, we can enjoy life more, meet our goals, and spend less time thinking and worrying about money to do it. Site statistics:Click here
The First Million Dollars and More with Index Investing 2007-09-30 00:48:10 Over on Moolanomy is an article titled The First
Million is the Hardest. In the post, the coolest fact is that while the first million dollars takes a long time to make, once you have it, additional millions come faster and faster. While this will not come as a surprise to anybody that is familiar with the miracle of compound interest, the example was a simple one. The biggest simplification was in assuming constant contributions and a constant growth rate (10%).
As I enjoy playing with numbers, I thought I would take the same starting base: $15,000 contribution per year, from age 25 to 65, and see how well that would work back-testing it. For my gains, I will use the closing price on the first trading day of each year for the S&P 500 and the Sow Jones Industrial Averages to perform my calculations. It is assumed that the $15,000 is added as a lump sum at the closing price on the opening day each year.
Millions by Index
Year Started
Dow Jones
S&P 500
Read more:Investing
How To Live on Minimum Wage 2007-09-29 00:09:30 Across thousands of personal finance websites, there are many common themes to be found. One of these is to
Live Beneath Your Means
Living beneath your means is not always easy. Yet, for most of us, we look at people who make just a little bit more than us and wonder where their problem is. The extra $5,000 or $10,000 a year would make all the difference for us. How often though, do we look past our bulging budgets and look at how people making that $5,000 or $10,000 less than us do it?
For a challenge, I want to look at what is possible at the current minimum wage rate. To make the example possible, lets assume a single individual, in good health, with no dependents who works 40 hours a week with no days off or vacations. How will he fare?
There are a lot of variables to be considered. I am going to look at a best case scenario. Many things are possible that would make this less doable than we would like. To help make that clear, here is a list of the assumptions I am making f Read more:Minimum
, Minimum Wage
The Capitalist Threat 2007-09-28 11:43:07 I must admit that this article by George Soros, originally published in the Atlantic Monthly, now republished online by Free Republic, is thought provoking. The Capitalist
Threat discusses the danger that unregulated Capitalism could offer to our society. Even though I do not agree with all of his statements, nor do I accept all the conclusions he makes, I still see potential risks to America from many sources.
Wealth Accumulation
Out of the article, there is one I want to expound upon: "...perfection is unattainable. Wealth does accumulate in the hands of its owners, and if there is no mechanism for redistribution, the inequities can become intolerable."
If you think about it, this makes a lot of sense. As so many financially successful people demonstrate, having money makes it easier to accumulate more money. It does not guarantee it, but it certainly helps. Usually, this is not a problem because we only live for so many years, and those talented enough to amass huge fortunes fa
Reasonable Income Tax Plan 2007-09-27 16:57:48 I know that it is not tax season right now. However, having to send in estimated tax payments this year - with one payment due in the past couple of weeks - I am regularly thinking about it. Seeing an article on CNN about Congress dragging their feet on AMT reform raised the interest level too.
Other information that I have heard recently also supports my thinking about changes that should be made to the federal income tax. Real estate gurus and even Rich Dad author Robert Kiyosaki helped drive home the point that taxes are inefficient and are not progressive like they are claimed to be. The rich have the ability to control how they make their money which allows them to keep more of it by despite a higher marginal tax rate.
Even those gurus and guides that we look up to will acknowledge that taxes are complex and take a lot of time and money to figure out properly and to plan for how best to reduce their tax liability. The government knows this as well, requiring that estimates of Read more:Income
, Reasonable
Personal Goals and Financial Life 2007-09-26 10:09:52 One of the greatest things that we can do to improve our lives is to make goals. I am not talking about just any goals either. If we want to change and improve our lives, setting real goals is one of the best ways to do this.
For a goal to be a real goal, it needs to meet a number of criteria.
It needs to be a SMART goal:
Specific
Measurable
Actionable
Realistic
Time Based
This acronym can help you set useful goals, no matter what level of life - parenting, work, finances, even long term life goals. SMART is by itself worth its own post, but for anybody who wants to find out more now, a single Google search can get you started.
What it cannot do is tell you how well aligned your goals are with your personal philosophy, beliefs, and what is most important to you. It is entirely possible to generate a list of smart SMART goals to govern your financial life, yet which will be entirely wrong for you or your situation.
Let me give you an example from my life. I could set a goal to Read more:Financial
, Goals
, Personal
Why Volunteer with the BSA 2007-09-24 16:17:15 It is difficult for me to understand why some people do not volunteer. Especially with so many worthwhile organizations always having trouble finding enough people just to keep their programs functioning. In many cases, with more volunteers, these organizations could expand their programs to reach and help more people.
I know I cannot help every deserving organization out there. So, I have chosen the ones I volunteer for carefully. One of those is the Boy Scouts of America (BSA). The BSA is committed to helping boys grow into responsible young men that exhibit the best morals, citizenship, and self-sufficiency possible.
As a youth member, I benefited from the time and effort of many adults who worked with the program. As a youth member, I did everything I could with the program and believe my efforts helped improve it. As an adult,I have now been a member for several years and am now entrusted with running the program for a unit. I am the leader, despite not having any children Read more:Volunteer
Carnival of Personal Finance 2007-09-24 10:12:19 Woohoo! I'm proud to announce that my submission for the 119th Carnival
of Personal
Finance has been accepted this week. It is being hosted over at Blunt Money.
Click here to find the Carnival of Personal Finance website.
The post I submitted is from the Saving Philosophy Collection series. Specifically, it is the first post: Savings Philosophy #1
For everybody visiting from Blunt Money, welcome to the site. I hope you enjoy looking around and come back as the site grows.
I also want to highlight Smart Money Daily for their highlight post about the Carnival and helping trace the origin of the phrase 'Pay Yourself First'.
Riches through Giving 2007-09-21 23:44:44 Giving makes you wealthy. I will stand by this statement to the end of my days - here or in heaven. The riches you get are not necessarily cash however. I do not support the philosophy any of the evangelists who suggest that you can get material riches by giving to God. That philosophy is about the most arrogant and hypocritical form of religion out there.
I do not know how many other people have noticed this. When I give of my money as well as my time, I feel richer. I have not tracked my net worth and compared how it grows when I give money versus when I do not, so I do not have empirical evidence to back up my claim. Even if there is no actual gain in wealth, it is still worth doing for three main reasons.
First, I believe that I am a Christian. Since I believe in His sacrifice for us, how can I possibly justify keeping all of my wealth and time to myself? I know I cannot make it to heaven by my actions, but do I really believe if I cannot match any of my actions to the tea Read more:Giving
iStockphoto 2007-09-21 22:34:11 I have been an amateur photographer for many years. For most of that time, my skill and training have combined to produce snapshot photos. This is a category of photo that I still happily stay in most of the time, as it is a good way to document my various trips and the activities I participate in. My education lets me make some better than average decisions, and I get a reasonable number of good images.
Still, I am working to do better. Part of my efforts to do so has been by becoming a semi-pro photographer. I knew from reading and looking at other people's photographic work that I have reached a point where I am good enough to start making money off my photography. It does not mean I've maxed out my skills, just that they have improved significantly. To challenge my skills, I've started shooting for micro-stock sales and have become a part of iStockphoto.
Now, if you look at my portfolio there, you can see some of my efforts that have been accepted there. You will also not
Death and Taxes 2008 Poster 2007-10-12 09:33:24 Short post today. I found what looks to be an awesome poster for anybody who cares where their federal tax dollars go. It is a poster that is packed full of information based off the President's 2008 budget request.
Now, I now this sounds like about the last thing anybody would be interested in hanging on their wall.
Even just going to the website and looking at the detail in the poster is interesting - trust me. Even if you do not order, I think you can find something on the poster that will surprise you.
This poster lists both the income sources for the US Budget and most programs that get $200 million or more in funding. See if you can find your favorite program on there.
Death and Taxes
2008 Poster
Wal-Mart is Bad for US(A) 2007-10-11 14:45:29 This is part 2 discussing how Wal-Mart has impacted the US economy. Part 1, which briefly discusses some positives can be found at Walmart is Good For US(A). There will eventually be a follow-up post with my own stance on this subject, and if there are enough quality comments between these two posts, there will probably by a summary post highlighting the best comments.
Wal-Mart is a strenuous competitor that continually pushes their own employees and their suppliers to find ways to sell the same product for less money each year while still making Wal-Mart money. The sheer size of the retailer has placed it in the unique position of being able to dictate to vendors what they will buy, how much they will buy, when and where it will be delivered, and what price they will pay. In addition, vendors must be tied in to Wal-Mart's supply system which imposes its own set of costs and conditions.
This size and emphasis on cutting costs has led to significant effects. Unfortunately, a lot o
Walmart is Good For US(A) 2007-10-10 20:04:38 Wal-Mart is not an uncontroversial company in America. In many ways, the story of Wal-Mart is the story of two companies. One is the ultra-competitive retail giant that is able to force suppliers to help them sell us lots of products at low prices. The other is a mega-corporation that is so obsessed over profits that it is contributing to the loss of thousands of American manufacturing jobs.
For the record, I have not been compensated to write either viewpoint. This is a corporation that is a part of many people's attempts to be frugal. As such, it is a good topic for personal finance, and one that I hope can generate some quality discussion on both sides of the debate. For comparison, here is The Simple Dollar's post Wal-Mart is evil! Wal-Mart is good?
There will be a companion post to this one that discusses the down side. This one will touch lightly on the benefits of Wal-Mart. For a head start on both arguments, Slate has a dialogue called Is Wal-Mart Good For The America Read more:Walmart
Too Much is Bad Debt 2007-10-09 22:33:29 This is part 3 of a series talking about bad debt. The parent post is at What to do about Bad Debt
. Part one can be found at What to do about Bad Debt and part 2 is at The Terms of Bad Debt.
This post talks about how Too Much of a good thing can be enough to turn an otherwise good debt into a bad one.
There are really two ways that Too Much can be bad financially. The first is when an alternative would help you become wealthier faster. The second is when too much is truly more than can be afforded.
Too Much - Better Alternatives
Using credit can improve your investment returns by increasing your leverage. Forbes.com has a good articles title Burdening Your Retirement With a Mortgage that talks about the risks of leverage. For a Canadian point of view, you can try leveraging - the basics at RRSP.org (Warning: several acronyms in the post are not defined and may be confusing). Not to ignore anybody across the pond, try this link to The Uncarved Blog, Having a Mortgage post.
Few peo
The Terms of Bad Debt 2007-10-08 23:12:30 This is part 2 in a series about bad debt. The parent is at What to do about Bad Debt
and part one can be found at The Motivation Behind Bad Debt.
Unfortunately, not everything is simply a matter of cash or credit. With the wrong financial advisers or a bad financial background it is possible to get bad terms on your credit.
This can be a difficult position to get out of. If the problems that led to getting bad terms still exist, it will be difficult to find a way out that only includes good credit terms. Do the right things with your debt and it will eventually be possible to get good credit loans and terms even if all you can get approved for are bad credit loans and terms.
Bad credit terms can exist in a lot of ways. Here is a partial list with information on what you can do about them.
Prepayment penalty
This often caps off bad credit loans. Lenders who put this clause in their loans do so because they know how much of a good deal it is for them. They want you to be stuck in th Read more:Terms
Carnivalof Personal Finance #121 2007-10-08 11:03:16 Ask Mr Credit Card hosts the 12st Edition of the Carnival of Personal
Finance this week. He does something a bit different, posing the carnival as a presidential debate, linking in personal finance blogs and posts throughout. Very creative and well done.
In addition to including How To Live on Minimum Wage, there are a number of other useful posts included.
Kim Stadenraus earned the top spot on my list this week with her story about financial success. How To Get Out of Debt has lessons she learned in getting out from under $48,000 in debt. Congratulations and good advice.
Uncovering The Truth About Needs and Wants includes a step by step guide for figuring out which is which. Millionaire Mommy Next Door has written that post as a part of her Baby Steps to Financial Freedom series.
The Simple Dollar has a one hour project for us. Trent gives us Thirty Ways to Use One Hour to Improve Your Finances.
How I Will Be Rich discuss their powder coating business and include several goo
The Motivation Behind Bad Debt 2007-10-07 18:25:42 This is part 1 of 3 articles discussing what makes a debt a Bad Debt to have. The parent article is What to do about Bad Debt.
Here is a short post from Debt Consolidation Lowdown called Live Within Your Means that touches on a similar topic.
Motive is the greatest and most difficult source of bad debt to solve. We all have reasons, usually completely defensible to ourselves, on why we have taken on each and every bit of debt that we have. The problem with this is it allows our creditors to control our lives because we have to work to pay them off.
I am not going to go extreme and say that all debt is evil. It is not, but most debt for the average consumer is not good for them. With the exception of homes, most credit is received to purchase items that lose value over time. For credit cards, personal loans, and even some car loans the benefit does not last as long as the payments do.
Here are some of the motives that we use to justify taking on more debt:
Habit
Supersizing
Fal
What to do about Bad Debt 2007-10-07 11:55:15 Now that we have discussed what makes up Good Debt in How to decide if something is Good Debt, lets turn our attention to Bad Debt.
Bad Debt can have a lot of elements that make it bad. Sometimes it is just one reason that makes us consider something Bad Debt. Other times, there are multiples reasons. The reason why something is bad has a lot to do with what it will take to fix it and even more to do with how to avoid the problem in the future.
It is especially important to note that whether something is Bad Debt or not is strongly dependent upon a person's situation. The exact same debt for two different people can be Good for one and Bad for the other. As we go through the categories below, the reasons this is true should become clearer.
I've loosely organized these reasons into 3 categories:
The Motivation Behind Bad Debt
The Terms of Bad Debt
Too Much is Bad Debt
How to decide if something is Good Debt 2007-10-05 16:59:03 As I am not the first person to discuss good debt, lets treat the topic a little bit differently. In this post, you will find a list to a number of other posts and online articles that discuss Good Debt. After each link, you will find a single sentence with the most important point about Good Debt at that link.
Good debt vs. bad debt at Money.com. This link covers the platitudes, saying that good debt is for what you ened but cannot pay cash for while bad debt is for anything that you do not need; despite not telling you how to figure out if something
is a need or a want.
Good debt and bad debt at Bankrate is a much better article. This article points out that good debt helps to make you wealthy but still sticks with generalities like "Mortgage debt is good debt" (it is not always). Same article is also at MSN as Good debt versus bad debt.
Garden and Hearth also talks about Good debt vs. bad debt. Their article lists out the key points (good terms, purchasing an asset, etc.) tha
Upgrade time 2007-10-04 09:54:32 Just a quick notice for everybody that I am in the process of upgrading to the current version of Wordpress. Based on the information I have about performing the upgrade, it is possible that some things on the site may be temporarily broken. The expectation is that you will see little or no issues with the site while the upgrade is being performed, and that any issues that arise will be resolved today.
This post will be updated once the upgrade is complete.
Update: Upgrade is complete, and I do not see any remaining issues. Please add a comment if you encounter any problems.
Federal Debt Discussion 2007-10-17 12:42:43 This is the root post for the discussion about the Federal
Debt and Deficit and its impact on us.
As I work through my exploration and education about the Federal Debt and Deficit, each of those posts will be linked back to this one. That will allow this post to act as a central hub for comments and suggestions on additional facets to be explored. Read more:Discussion
What I Am Reading Now: Greenspan 2007-10-16 11:49:48 A lot of my fun reading is centered around sci-fi and fantasy books. I like to visualize new and different places and those books let me do it. As a bonus, wrapping my thoughts around a different kind of world is fun too. The idea that magic or science can give a completely different way to interact with the world than I experience daily is an enjoyable mind-bender.
I do stray from that realm regularly, although not always satisfactorily. I have read a number of classics that were less than stellar in my opinion. Textbooks that confuse the issue as much as advance my knowledge. Even newspapers and a few magazines (I love National Geographic).
Admittedly, not a high amount of non-fiction. Today, I am reading a non-fiction, autobiographical book that I am glad I made an exception for.
Alan Greenspan
, The Age of Turbulence, Adventures In a New World is a worthwhile read.
The first half of the book he traces his own history, providing context behind his education up to and i Read more:Reading
All The Home You Can Use 2007-10-15 17:50:18 I am in the process of designing my next house.
My wife and I recently purchased a lot to build our house on. Since it is a flat piece of dirt right now, something will need to go on it. You see, our current house is a nice enough home. We have decided that while staying here is doable, we want and can afford something better.
So I am nearly done with the design work on the home we want. It has been a lot of fun, but also a lot of work. With all the questions about how big to make everything, how to relate the rooms, traffic patterns, aesthetics, maintenance, even sound transmission this has been a multi-revision project.
The hardest question up front, and one I had wrong to start, was how much should the house have? I don't mean how big the budget, the size of the master suite, or anything like that. I am talking about how many rooms and what they should be for.
My initial vision was for a true McMansion. 5 bedrooms, 5 bath, over 6000+ square feet, large garage plus w
Coming Up: Our Federal Debt 2007-10-14 18:00:24 Just a quick note to let you know what I am currently working on. I am looking into the National Debt and what the impact is on us.
It will be another multi-part series discussing different impacts and,unsurprisingly, will end with a call for a more responsible Congress and President.
Even now, without all of my facts lined up, I can tell you that we are borrowing from our own future. Just as it takes sacrifice and pain for us to balance our own budget and make ourselves debt free, so too it will take sacrifice and pain to get our federal government out of debt.
Why is it important now? Coming up is going to be the retirement of the largest generation in our country. If we do not solve our problems before those costs come due, we will be forced to solve the problems at the worst possible time. It will sort of be like an individual trying to avoid bankruptcy with no savings and getting laid off.
Any particular areas of inquiry or suggestions that you have, drop into the commen Read more:Federal
Curse of the Packrat 2007-10-13 23:03:48 I Am a Packrat.
There. I've gotten that off my chest. I find it hard to throw things out. There are people who are much worse off about it but the average person does better than I do.
There are boxes that have moved more than twice without having been opened. Leftover parts from projects that are long completed. Mail from several years can be found in boxes in the garage - among other detritus from the years. School papers are with computer games, next to hand tools and sitting on top of blankets and clean dishes.
I store things, plan to go through them and make sense of them. Nothing happens. I throw out several boxes worth of things that are useless now. Yet, I do not seem to make any progress at eliminating the clutter. New things seem to magically arise to take the place of any room I do make.
From time to time, the thought comes to just throw everything in a storage unit for a year. If it is still thereat the end of the year, then trash it. That should solve t
The Scale of the Federal Deficit 2007-10-19 17:18:46 This is a post in the Federal
Debt Discussion series.
Previously, we discussed The Scale
of the Federal Debt. This debt did not magically appear. It has been built up over a number of years, and has gone up and down during that time period based on the annual deficits (and occasional surplus) in the federal budget.
There is a lot less information on the deficit than there is on the debt. From my investigations, it appears that the best source online is the US Government's Treasury Department and their Monthly Treasury Statement (MTS).
This site reports that for fiscal year 2007, our government ran a deficit of $163,681,000,000.
This is a significant decrease. For comparison, here are the six previous years of data:
FY 2001 was a surplus of $126,863,000,000 and ended just after the September 11 attacks.
FY 2002 was $160,252,000,000 in deficit
FY 2003 was $375,242,000,000 in deficit
FY 2004 was $411,116,000,000 in deficit
FY 2005 was $317,265,000,000 in deficit
FY 2006 was $248,
Somebody Is Doing Something Right 2007-10-18 17:53:32 Patrick, over at Cash Money Life relates to us his financial life story in brief.
Unlike many of us (myself included), he appears to have done the right thing from the very beginning. That, with no life-busting emergencies has him sailing smoothly. The best part? He has the freedom to be doing the work he wants to do rather than finding the job that pays him the most possible.
All I can say is Congratulations. Great job, keep it up.
Here's hoping my efforts to join him in financial serenity works out in real life like it does on paper.
Consumerism Commentary did Patrick one better however. Sasha just reached a major milestone by making the last payment on $52,050 of student loans. That is huge and a wonderful goal to reach. The writing is pretty entertaining too. Read more:Right
, Somebody
The Scale of the Federal Debt 2007-10-17 20:39:27 This post is part of the Federal
Debt Discussion series.
The American National Debt is a staggeringly large number. It is several times larger than the total amount of US Dollars in circulation. Even trying to visualize that much money in stacks or circling the globe many, many times is very difficult to do.
Fortunately, the sheer size of the debt is not the big issue. It is the size of it in relation to the rest of economy and the federal budget that determines if it is sustainable or not. On that scale, it does not seem quite as bad. Here are some current figures:
On October 17, 2007, at about 11:15 am MST (GMT -7), the debt is estimated to be $9,056,509,178,557.40 - yes that is over $9 Trillion dollars.
This number is both accurate and somewhat misleading as a significant part of the debt is owed by one part of the government to another part of the government. This intra-governmental debt is detailed in the Federal Debt portion of the Treasury Bulletin. The most recent issue Read more:Scale
Apologies 2007-10-21 23:29:33 I want to post a quick apology to you. Between a Scout campout this weekend and leaving tomorrow morning for a trip, I will be leaving you post-less for a few more days.
I don't want to post something that I am not happy with. You deserve a good effort on my part, not something rushed and incomplete.
Expect to see my next post up sometime on Friday, October 21, 2007.
Thanks, and I'll be back soon.
Federal Debt Impact on Private Debt 2007-10-27 14:20:40 This is the third post in the Federal
Debt Discussion series. Previous articles discussed the The Scale of the Federal Debt and The Scale of the Federal Deficit.
The Federal Government borrows money for a lot of different reasons. Some of it goes to funding operations. Some of it is to balance cash flow with expenses. Some of it is even intentional to help stimulate the economy and provide a short term push to avoid or get out of recessions.
Regardless of the reason, the total amount of debt has risen over the years. It has varied some as a ratio of the GDP of our country. Good or bad, that has been our history.
Debt Markets
When the US government wants to borrow money, it has to go to the same global markets as corporations. Yes, global. With advancement in technology and decreases in regulation of money flows, the markets to borrow money are now truly global in size.
Due to the perceived nature of risk, US government bonds and bills are seen as among the safest in the Read more:Private
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