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Monthly Archives: September 2007

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Blogging As Business

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So, among the things we appreciate about blogging is the opportunity to run a small home based business. When my wife Miel and I just started this blog last year, we initially wanted to share what we had to say with other people who had similar interests. Since then, it has evolved into something a little more extensive.

Our blog is a business. The site generates revenue primarily through two sources: sales of text link and interstitial text ads. While neither of these sources will make us wealthy, selling text link ads brings in far more than interstitials. In terms of our expenses, our biggest expenses have been on buying traffic and webhosting, as well as increasing our capacity to measure our webtraffic. Our income and expenses are included so you can see how we’re spending our modest income.

Our focus has evolved somewhat. While we started out focusing on couples and the basics of personal finance, we’ve expanded our topics to include reviews of personal finance books, commentary on current events, the economics of travel and a bit of investigative reporting regarding finance gurus. In short we’re now blogging about the all the financial aspects of living life as a dual income couple.

Over the course of the past year, we’ve also been able to forge a relationship with Harper-Collins books to review their upcoming titles in personal finance. We’re grateful for their support and like having the opportunity to see what’s coming up. We are also in negotiations to become an official Reuters personal finance blog. We’re pretty excited about this because we’ll be able to provide Reuters content directly to you the minute it hits the news wires.

Best,

James&Miel

A Good Old Fashioned Bank Run?

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Hello All,

Its like something out of the 19th century, but apparently a major regional bank in England, Southern Prime, is having some old fashioned problems. Bloomberg is reporting that people are lining up to take their deposits out of the bank and that the banks website crashed due to a spike in traffic. The scare was sparked by the news that Southern had to borrow bailout funding from the Bank of England because the rising cost of credit in the UK.

Click here for the story.

Nothing like a good bank run to start your weekend!

Cheers,

James

High Quality Construction – Look No Further

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Hello All,

A few weeks ago, we blogged about the financial success our aunt and uncle had in quadrupling their income and super charging their net-worth. Well, it seems that their hard work is still paying off. We recently received the latest copy of Fine Homebuilding, which featured the elegant, but thrifty remodeling job James’ relatives have done.

Interesting enough, part of the key to their success comes from a sense of thrift and a dedication to hard work, but also they work together as a couple to achieve their common goals.

So, if you live in Marin County, CA and you need high end remodeling help, don’t hesitate to contact Shidler-Skyvara (have to plug my relatives!)

Best,

James

Wills – Continued Importance

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Thanks for all of your great comments on the last posting about wills!

Given the number, and breadth, of comments I thought it would be best to follow up with another post.
Living Trust
Yes, given the circumstances in Afghanistan we have certainly considered the question of “when to pull the plug.” The issue that I have is that I think this takes judgement beyond any specific period of time. I think the issue is that your loved ones judgement may be altered when you are in such a state. These are tough things to consider, but very important.
Pets
We are certainly glad that our readers brought up pets. This is something that we hadn’t considered in our initial conversation. We do have two lovely and enormous pets that would need a lot of love and food in our absence. We in fact adopted them from a woman whose mother had passed away and wasn’t a cat person herself.
Children
Kids are certainly a very important reason to have a will. We had left this out initially, as it hadn’t been part of our discussion. I am however listed as the caretaker of my nephew should my twin sis and her husband pass away.
Life Insurance & Disability
This one is a bit tricky, as I am well covered on both ends but James is not at all. I however will arguably be more in danger and whose salary we depend on. Should something happen to James I could reasonably get by on our current assets without having to downgrade out of our condo. Thus, considering that we don’t depend on his contributions to the household we feel it is less of an issue to insure him.
I do find it interesting that I am more concerned about covering James in my absence than the other way around. Perhaps that is just my way of wanting to take care of my love. I figure that the assets James would pass on would take care of me fine enough.

Letters to Family and Friends

My next task is to take the time to write letters to friends and family just in case. I’m thinking it would be interesting to write a new set of letters ever couple of years. This way, when I pass away at a hundred people will have a whole stack of letters over the years. The only problem is that most people would not make it that long with me. It would be an interesting exercise though.

Avoid the Hassle
When we first went to our lawyer she said that in DC we wouldn’t face probate at our current level of assets and thus we were less in need of a will. While we could certainly opt not to have one, this would be like not having a pre-nuptial agreement. For us, it is just the smart thing to do. Wouldn’t you rather discuss and decide how things will go rather than the courts? Not to mention family! We all have stories of this!

Share the word!
Altogether, very important things to consider. As I’m thinking of this I’m not even sure if my parents have up to date wills. I’ll have to check in with them.

In the mean time, I’ll work on staying safe!
Best wishes to all!
Miel

Wills – Supporting your Spouse

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Part of marriage is supporting each other in sickness and in health. As little as anyone would like to think about it, this also should mean in death. The emotional and financial support that you provide for your spouse now should also extend beyond your life.

Taking time to define this is part of sharing a healthy and supportive relationship. Of course, this is the very adult approach that using reason over emotion. Most people would just rather avoid the fact that we will all eventually pass on.

Considering my imminent departure to Afghanistan, these are some of the things that we have to consider. We certainly avoided for as long as we could, but eventually managed to sit down at our local Starbuck’s and discuss.

Here are some of the things that we considered in making up both of our wills:
  • What manner we would like to be disposed of
  • Where we would like to be disposed of
  • What percentage will go to our spouse and what percentage for family
  • Who we would like to pass on jewelry to
  • Do we want more life insurance – double my salary is provided by my work
  • Do we want kid-napping insurance while I’m abroad
Obviously not your best Saturday afternoon conversation, but it was actually quite a relief to just work out some of the details and know what the other would like to fulfill their wishes.
By taking the time now to discuss these issues we will better be able to support the possible remaining spouse during a very difficult time. Having them know your wishes can take a lot of stress off of them to make decisions on your behalf. Making sure that you are in a financial position to ease any possible burden and allow for your spouse to maintain their current lifestyle makes a significant difference.
I was chatting with my grandmother last night and she reminded me of what it was like for her to deal with the deployment of my grandfather on military tours of duty. As it happened, he was killed flying over the Philippines in the run up to the Vietnam war two weeks before his scheduled return date.
This left my twenty-five year-old grandmother with my then, ten year old dad and eight year old uncle. She said that having a letter from him delivered to here made a great deal of difference in dealing with the grief and moving on.
While we certainly wish long and prosperous lives to all of our readers, we also believe that it is good for everyone to consider taking care of ensuring that a will is in place.

Best wishes,

Miel

Readers: We would love to hear from readers with more experience or tips on what to make sure is included in a will. Thanks!

It Pays to Return

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One of the great things about America is great return policies. This is always something that I have to keep in mind the moment you step off American soil. In most places around the globe, citizens are not privileged to have the liberty to change their minds or return faulty products. Once you buy it, it’s yours.

However, those within the states would be prudent to keep in mind return policies when making purchases. Sometimes it really pays to shop at places that will honor a comprehensive return policy.
For instance, before my trip to Ukraine, just after I got the job going to Afghanistan, I broke down and bought two pieces of new luggage before my travels. I had used and abused my trusty eagle creek luggage and was finally needing a new set. I ended up downtown at Macy’s, checked out all of the luggage, and then walked away with a Samsonite set.
During the course of the next month of travel, the zipper on both bags got stuck on numerous occasions. My past luggage had taken seven years to do so, and even then it recovered better than they zippers.
While Samsonite themselves has a ten year warranty, pay attention as this means they will repair or replace. This doesn’t help if you hate their luggage. However, Macy’s website said that if what you bought wasn’t up to your expectations, then return it. I did so with no hassles and it saved me a lot of money and even more hassle.
My next lesson is to save your receipt for those places with good return policies. Nordstrom’s is the best at returning stuff, but you have to have the receipt so they know what you paid. I’ll be return a pair of shoes there that gives me killer blisters (these aren’t four inch heels but flat casual shoes for walking). Other places like REI are terrific at returns as well, and they even keep all of your past purchases on your account.
Lastly, don’t be shy. If you aren’t satisfied, then return whatever it is. This includes a rotten orange from Whole Foods or past date licorice from Rite-Aid. Whatever the item, it is probably worth your while to make the return. You might think it is small, but it adds up.
Many happy returns!
Miel

Book Review: Money For Nothing

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Instant wealth. A mansion, servants, respect, power. There is always something seductive about the idea winning the lottery. More than once, I’ve daydreamed about having millions of dollars instantly thrust upon me. Many of you have likely done the same. So, it was with some anticipation that I opened Edward Ugel’s Money for Nothing: One Man’s Journey Through The Dark Side of Lottery Millions.

Briefly summarized, Money For Nothing is the story of Ugel’s experiences working for a company that purchases annuities from lottery winners. It describes his down and out days in Portland Oregon, briefly mentions the history and reasons for the popularity of lotteries and describes the mechanics of how payouts work. The latter chapters address his time in the lottery industry and concludes with his exit from the business.

The book failed to meet my anticipations in several important respects. First, Money For Nothing is primarily autobiographical. This format is’nt necessarily a problem, but compelling autobiographies are typically written about extraordinary individuals for the wisdom they offer for others. However, Ugel’s autobiography focuses largely on his 10 years as a salesman for a company which purchased lottery annuities from winners. While this may be of interest to some, his example and life offer few redeeming example for those desiring better understanding of either personal finance or how lotteries might take a healthy role in society.

Money for Nothing suffers from poor craftsmanship. To be sure, writing a full length book is a significant undertaking. I applaud Ugel for his attempt. However, much of what’s compelling about the story, his encounters with lottery winners and experiences in the industry, are unfortunately marked by irrelevant ramblings and overly effusive prose. The book fails to interest the reader at the outset, and never really compels its audience to involve themselves in the story.

As a final point, one is struck by the monstrously unethical nature of Ugel’s activities. The primary business of Ugel’s firm was buying payouts from lottery winners. In order to profit from the deal, Ugel’s firm must have offered the winners less than their payout was worth, by definition impoverishing them. These activities destroy any sympathy Ugel’s readers may have with his character.

In sum, Ugel’s book is a metaphor. It represents a disappointingly shoddy attempt to capitalize on the national dream of getting rich quickly. My recommendation: Avoid Money for Nothing. The book retails for about $14.78. Instead deposit the $14.78 in your IRA, you’d be better off in the long run.

Best,

James

Paper or Plastic?

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This posting is actually in response to one of the comments left on the Jane Quinn posting by James earlier in the week. Brad, one of our regular readers, made the observation that cash can tend to slip out of one’s hand. While this all depends on the person and the situation, I think this can certainly be true.

From what I have found, using cash works best when you apply a couple of principles.

It’s better to start with more money than less, yes you heard me right. I’m an advocate for looking at your budget, giving yourself a weekly allowance and then taking it all out in one lump sum.
What this does, are a couple of things.
  1. First, you see how much you really intend to blow in a week on groceries, eating out, and entertainment.
  2. Second, you can see what the total amount for all expenditures should be and then allocate accordingly.
  3. After blowing through your weekly allocation you’ll be less likely to want to splurge on anything else.
  4. Lastly, if you have money left over at the end of the week you’ll be feeling pretty good.
What you should NOT do, is take out $20 bucks out of the ATM and pretend like you aren’t going to spend any money. Chances are, either you’ll be grabbing the plastic in no time, or you’ll be back to the ATM.
If you are interested in testing the use of cash, you might want to start with a specific area like entertainment, eating out, starbucks addictions, or misc expenses. These are likely areas that we would all like to reduce our spending on. Having an awareness of what is in your wallet might just work.
Readers: We’d love to hear what works best for you – paper or plastic?
Cheers,
Miel
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