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Entitlement

Entitlement, whether by a dog, a grandchild, or an employee, all depends on where you stand. Entitlement seems to get a bad wrap from most, but most people feel it at some level. From a political perspective there may be those libertarian and conservative values that stand against public entitlements, but still feel entitled to their freedoms and family values.

Leona’s grandchildren felt entitled to their share of the family riches, but must have done something to piss grandma off. Her dog may be living in the lap of luxury, but there are those who would believe that those in more need would be entitled to this money.

I’ve been considering entitlement as I begin the process of writing my will for the first time. Despite not having enough to fight over (but what is enough to fight over?) heading off to a place like Afghanistan warrants thinking about such issues. Whether or not anyone else feels entitled the what I do have has not been the question, but rather what I feel others are entitled to. Certainly the supportive and loving relationship that I have with James warrants most of what I have, as we’ve worked together in getting where we are today. In the event of the worst happening, James would certainly have enough to live off and finish his PhD with no problems on my life insurance (covered by work) alone. At the same time, I have also begun to consider what I might want to leave to other family members. My folks certainly aren’t set up with when it comes to retirement and I can’t imagine leaving my twin sis with nothing. Thus, this brings the question of who would be most entitled to what I have. Obviously in the long run I’d prefer that James & leave what we have to our children, but that isn’t the case today.

I’m also dealing with entitlement at the office. Working with overseas staff I’m continually faced with the challenges of what staff feel they are entitled to. Often overseas practices are much more friendly to the employee, excluding those cases of poor labor practices, and thus great sums of severance are more and more customary, if not required. Those working in international development know that the donor has money and most often what to milk the system to the last drop. My job is handle this fairly and legally to ensure that all is handled in the most equitable manner. Not always as easy as it sounds.

In a recent study I worked on it also seems that the boomer generation also feels that young people today have a greater sense of entitlement in the work place. Certainly salaries are not what they once were, but taking the rungs of the ladder two by two is preferred to the process of paying your dues.

My challenge to our readers is two fold:

1) If you feel that you are against entitlements, consider where in your life you might feel a sense of entitlement. Most people would be hard pressed not to find some area in life. Americans in general have a high sense of entitlement but my travels abroad certainly haven’t demonstrated a lack of this feeling elsewhere.

2) In those areas that you do feel a sense of entitlement, why is that? Why do you think you are owed more at the work place, from mom and dad, or Uncle Sam?

I’d be interested to hear what others come up with.

Cheers,

Miel

Five more Keys to Personal Finance Success

Hello,

Most of these are inspired by David Bach, who is my current personal finance guru. There are a lot of personal finance gurus out there, but Bach does a good job providing unbiased advice that serves the average Joe.

He recommends that you do five things:

1. Prepare for Life Changes. The better off you are at living within your means and anticipating life changes, the better off you’ll be financially and emotionally. – This make good sense. In fact, we’ve written a series of posts on this topics. If you’d like to learn about getting ready for retirement, pregnancy and marriage feel free to read what we’ve said about these topics.

2. Read High Quality Publications. Bach basically says that you should focus on reading publications on aren’t afraid to take stand and recommend whats in your best interests. – To elaborate on this, I recommend that if you’re a trader, you check out Investors Business Daily. If you’re more interested in the reality of getting rich, check out The Millionaire Next Door. For the latest unbiased personal finance news, you should probably just hit google.

3. Prioritize Your Goals and Start Working Towards Them. Have some patience, focus on your accomplishments and learn from your mistakes. – My wife, Miel and I do this a lot. In fact, we’ve been able to accomplish most of our major goals, like coming up with a down payment for our apartment or paying for our wedding by being good to each other and working towards mutual goals.

4. Hire Yourself First. You are the best financial advisor you can hire. If you need help making major decisions, hire conflict free advisers who charge a fee for their time. Work in partnership with your advisers. Don’t abdicate control. – On this point, I’m not in complete agreement with Bach. Members of my family have worked successfully with financial advisers. They’ve found it to be a great relief.

5. Invest In Yourself and Others. Invest in your education, friends and health. – While its a bit cliche, this does make some sense. Being a personal finance blogger, I love talking about prices, and budgeting. Not everyone does, in fact, most people don’t – so it goes without saying that you should probably be spending time and energy investing in other aspects of your life as well and your friends.

Thanks,

James

Leona Helmsley, worst Grandmother ever.

It seems we’re posting about celebrities this evening. Leona Helmsley, the convicted tax felon and so called “Queen of Mean” passed away recently. She left 12 million for the care of her dog and NOTHING for two of her grandchildren. If you’re interested in why she did this, here is her will. All I can say is I hope none of our readers have a Grandmother like her.

Joey the Deadbeat?

Owing to not having a television, we DINKs don’t watch a lot of television. However, unlike us social nerds you may remember the hit TV show Friends. Evidently Matt LeBlanc, the character who played Joey, is being sued by his former agent to the tune of $1,000,000.

All you Friends fans can get the dirt here.

More Finance Tips to Live By

One problem with the internet is sometimes there is too much content! Because of this, it sometimes hard to find the advice you’re looking for. This goes for the personal finance blogsphere as well. To help you cut through the electronic flotsam, we’re following up on our series of personal finance tips by Eric Tyson. Tyson’s advice is mostly good, so we’re elaborating it here for you.

Five points to consider when putting your personal financial life together. These hold true regardless of whether you’re single or not.

1. Avoid making emotionally based financial decisions. If you’re stock market investing, don’t panic and sell after a market correction. Similarly, be careful about making important financial decisions after a major life change like a divorce or a death in the family. My wife and I reached the same conclusion about the importance of emotion in decision making even before reading Tyson.

2. Make investing decisions based upon your needs and the long-term fundamentals of what you’re buying. Ignore the predictions of talking heads and don’t make knee-jerk decisions based on headlines. – On this point, I disagree with Tyson. Some stock market analysts are quite good and can be trusted to make level headed evaluations of securities and market conditions. Personally, I think Greg Badinshanian at Citigroup is worth listening to.

3. Own your home. Unless you have a terrific rent control deal, owning is more cost effective than renting. However, don’t think about buying unless you can stay put for a while. We DINKs agree.

4. Purchase insurance only for catastrophes. Buying insurance to cover small unexpected costs is expensive. You really should buy insurance to cover really big events like house fires or floods. A few months ago, my wife and I were discussing this topic before going to bed and we agree this is proper approach. The main reason is that higher deductibles result in lower premiums. That is, you actually save money when you cover the small stuff out of pocket.

5. If you’re married, make time to discuss joint goals, issues and concerns. Be accepting of your partner’s money personality. Also, learn to compromise and manage as a team. Relatively speaking, my wife and I have well integrated financial lives. This is because we set joint goals and work together to achieve them.

If you’d like more of Eric Tyson’s advice, you might consider picking up a copy of his book Personal Finance for Dummies. Its gotten good reviews from the people I’ve lent it to. It’s especially useful if you don’t know much about finance or are interested in a place to get started in finance.

Best,

James

Kiplinger On Integrating Your Finances

Hello All,

The focus of Dual Income No Kids was initially intended to be a discussion of personal finance in the context of being a married couple. In the pressure of our busy schedules, we don’t always discuss this aspect of our financial lives as much as we really should.

But, I did come across an interesting article on Kiplinger’s personal finance that’s worth reading. The latter half of the article gives several good tips on creating a financial union. Among these are:

1) Separate v. Joint Checking Accounts. Kiplinger says the question to have separate versus joint accounts is a choice that should be made by the couple. Essentially, how you organize your checking accounts should evolve in a way that’s most advantageous for your situation. I’m in agreement. Both separate and joint account arrangements work, it’s just a matter of what works best for you.

2) Separate Credit Cards. The Kiplinger article cites a couple of experts who say you should have separate credit cards. The rationale is that you should avoid tarnishing the records of both parties if you have credit card debt. If one person has good credit, then it improves the ability of the marriage overall to borrow money at favorable terms. – This also strikes me as solid advice.

There’s more in the Kiplinger piece. If you’re in a position where you’re thinking about getting married or are married and are integrating your accounts, this article may be helpful.

Best,

James

Comptroller general blows the whistle

Hello All,

Here is a nine minute video featuring statements made by America’s comptroller general, David Walker.

At any rate, Walker is blowing the whistle. According to his statistics in this video, America will be bankrupt in the next 40 years due to the burden of paying for Medicaid for the baby boom generation. He calls it a “tsunami” of spending that will “swamp’ our budgets.

Feel free to check it out. There is some user fluff at the beginning of the video, but when you get to the guts of the video, its well worth the watch.

Does Feng Shui Work?

Good Morning All,

A few weeks ago, we posted on the importance of Feng shui for your personal finance. In response we got a couple of nasty emails from readers who didn’t feel that Feng Shui would help one’s personal financial situation. Well, since neither my wife nor I have the time or inclination to do the kind of scientific research needed to determine if people who practice Feng Shui are richer than those who don’t, we did wanted to write about an interesting article from Market Watch’s personal finance daily. Evidently, practicing Feng Shui can make your house sell quicker.

Best,

James

Some Tips To Merge Your Finances Before Marriage

Here is a quick video I saw on google. Its a two minute piece with some tips on getting ready for marriage. Its got four nuggets of advice for getting started. First, have an open an honest discussion about each persons debts and assets. 2. Attack bad debt (e.g. credit card debt) early. 3. consider taking out life insurance early 4. Put away a bit of money each month to meet your financial goals.

Should You Be Buying Real Estate Now?

Hello All,

One thing about travel is the fresh perspective it can bring. While fighting a severe case of jet lag and a nasty sunburn on the airport van ride back to our apartment, I was able to look at the district of Colombia with partially fresh eyes after having spent two weeks in Hawaii. One thing I noted about DC was there is an awful lot of real estate available for sale. On the ride back in town, I observed that several apartment buildings are under construction and many new developments are offering incentives or price reductions.

Local conditions seem to be echoing in national problems, nationwide its becoming a lot harder to get a loan. Yesterday four major US banks borrowed nearly $500 million from the federal reserve. In other news, the US Fed injected a ton more liquidity into the market in the form of $17.25 billion in agreements to purchase debt securities.

What does all this mean for real estate? In a nutshell: declining demand. A lot of the big banks make loans to Joe average, and then turn the payments that Joe makes on the loans into bonds. Now that nobody wants to buy those bonds, the banks don’t want to loan to Joe. End result: Joe can’t get a loan and overall demand declines.

Not only is it harder to get a loan, a lot of local markets have been hurt by declining demand for housing. For example, San Diego is slowing down, in San Francisco people are selling their homes for less than their mortgage balance, Stockton is getting creamed, North Texas has record foreclosures, and Detroit and Las Vegas are near the top of the foreclosure lists also.

Quickly put, it hard to get a loan and real estate prices are falling in many parts of the United States.

Now, for the average consumer what does this mean? It means that for some markets: time to buy. What, time to buy – you DINKs must be crazy! Au contrare, dear reader — Several aspects of the current environment suggest that now might be the time to pick up some real estate. First, demand is low because of the subprime inspired liquidity crunch, and increasing supply of housing. Second, local conditions suggest that prices will be very low in some markets. When demand and prices are low, this means that if you’re buying, you could negotiate very good terms for your property.

But, before you rush out and call your realator, there are a couple of important caveats to keep in mind. First, sometimes low prices are driven by economic fundamentals. In a place like Detroit, where job growth is declining like the last days of the Roman Empire, economic fundamentals (jobs, wage growth, etc.) may remain depressed for a while to come. So, the decision to buy should be based on your view of your local economic conditions. Second, the decision to purchase should depend on your own situation. If most of your wealth is tied up in real estate, it might not make sense to add more. However, if you’ve got stocks or a lot of cash in a savings account, you might consider pulling the housing trigger.

At any rate, if you’ve got a clear head and some guts, a crisis can often spell opportunity.

Best,

James

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