Hi All,
Sometimes people have a hard time comprehending how much a billion dollars really is. To whit, the good folks at mint.com have provided this handy video to help you visualize what that figure really means.
Author Archives: Team Dinks
Loan Forgiveness for Public Service Employees
We wanted to share with our readers a relatively new program that isn’t widely known about from as far as I can tell.
The Loan Forgiveness program for Public Service Employees is a program where after 120 payments, or ten years of minimum payments on student loans, they are eligible for forgiveness.
The program started in October 2007, so the first loans will be forgiven in 2017.
Federal, state, or local government employees are eligible as well as those working for qualified 501 (c) (3) non-profits.
If you might be eligible, check out the regulations to make sure you set yourself up right. You will need to consolidate your loans.
I of course wish that I would have been patient to wait, but it still feels good to have them paid off and to start building up my wealth without that liability to worry about.
Cheers,
Miel
DINKs Loan on Kiva Again
We DINKs have been loaning out money on Kiva.org for a number of years. It doesn’t pay interest and it isn’t much money, but it feels like a good gesture of giving out to the universe.
This time around I’ve loaned money to El Paraiso Group in Peru. In the past I’ve donated to someone in Kenya and then in the Solomon Islands.
Remember to give!
Miel
Healthy Food Coupons
So last week I did a post on coupon stigma and received a good comment on the need for more coupons for healthier food options.
In terms of health food coupons, there aren’t many specific coupons for whole foods such as fruits and vegetables, but keep in mind that you are shaving off a great deal of extra cost associated with processed foods. There are some ways to save money on healthy foods, though:
Mambo Sprouts offers a variety of healthy coupons. You can print them from online, get them via email, or booklets several times a year.
HealthESavers has coupons on everything from tofu to brown rice and vitamins and supplements.
Barbara’s Bakery goods also has a way to sign up online for coupons.
Organic Valley (organic milk and other products) has printable coupons.
Brown Cow Farm also has sign up for ecoupons.
Cascadian Farms has great milk products and beyond.
Earth’s Best Baby Food is also a good place to go for little ones.
Plus check out more coupons tipped off from a fellow blogger and reader.
Happy savings on healthy foods!
Miel
Support your Local Farmer’s Market
One of my favorite things about the city where I did my undergrad were the farmer’s markets in the area. I’d wake up (relatively) early on Saturday morning – when it wasn’t football season, of course – and head downtown to check out that weekend’s offerings. I’m not really a vegetable guy (my wife sometimes complains that I have the diet of a little boy) but I do love fruit. And at these farmers markets, I could get plenty of fresh fruit, but there were also plenty of vegetables if you were so incline; as well as flowers, baked goods, art done by locals artists and general crafty-type things. It was a great way to spend a Saturday morning. Find your local Farmer’s Market here.
Supporting Local Merchants
Farmer’s markets are typically run in the Spring through the Fall (usually ending in late October or November), one day a week in the morning. The one closest to me runs from May to November on Thursdays from 8:00am to 12:30pm. It’s a little inconvenient for anyone who works a full time job, but if you’re able to make it, I strongly suggest you check it out. Farmers markets offer numerous advantages over buying your produce from an outlet store. Most people assume that prices are more expensive than going to your local grocery store. In some instances, this is the case, although it’s been my experience that prices are very competitive.
It’s the product itself that makes the extra effort of going to a farmers market worth it. First of all, the food is much fresher. I hate going to a grocery store, and standing there, trying to pick out a decent tomato and seeing nothing but undersized tomatoes with bruises or soft spots or even cuts on them. That’s not something you’ll see at a farmers market, where all of the food has just been harvested and everything looks fantastic.
It’s much fresher, and in much better condition, due to the fact that it didn’t have to travel a long distance to get to where it is. The fact that the farm is less than an hour away from the market truly makes a significant difference. Also, it feels good to be supporting local farmers, artists, craftsmen, etc… I believe these types of events builds community, and it’s an excellent opportunity for a vendor to expose themselves to a large number of people. And as a consumer, they offer the opportunity to pick up interesting items that you can’t go to your local Target and purchase.
Open-Air Markets
Like a farmers market, which typically occurs only once a week, open air markets (which are usually open all the time) are an experience. I was fortunate enough to visit the Pike Place Market when I was in Seattle last year and it was awesome. The Pike Place market is famous for being the location of the original Starbucks; the famous “flying fish” vendor is also located in that market. A friend of mine bought a painting from a local artist and one of the girls I was traveling with bought some freshly cut flowers. When we were done walking through it, we ate at one of the restaurants in the area and the food (and beer) was amazing. Grocery shopping can be quite a chore some times. You make a list, you drive out to some dingy store, get your cart with the messed up wheel and perform an activity that is the epitome of a “chore”. But farmers markets and open-air markets distinguish themselves by making it a much more pleasant, community-oriented experience that feels nothing like a chore. You won’t be saving money, but you are not just paying for the food but also the experience and quality that is provided.
Farming Co-ops
If farmers markets aren’t really an option due to the time when they’re offered, you have other options, such as farming co-ops, where you pay a certain amount of money (typically ranging from $100-$500), and local farmers either deliver food to your home, or to a local drop-off station. They only downside to co-ops is sometimes you don’t have much control over what you get (a friend of mine once had 5 lbs of dill delivered to his home) but it’s another great way to support local farmers and get some fresh goods.
Relationship to Personal Finance
For me, this type of topic exemplifies an important point about managing your personal finances. Is going to a farmer’s market the most “frugal” thing to do? No, probably not. I can get by without a lot of that stuff, and if I wanted to save money I could do my produce shopping at Walmart and get roughly the same items. But they wouldn’t be as fresh, the quality wouldn’t be in the same ballpark and I wouldn’t enjoy those items nearly as much. I greatly enjoy quality, fresh food. I don’t mind spending $20+ on a bottle of excellent olive oil (yes, there is a huge difference between that and the cheap stuff) or spending some extra cash on some fresh fruit, vegetables, meat or dairy items. It’s not worth it to me to pinch pennies on those types of items just to save a few bucks. There is a time for living frugal, and a time to save money on products, but there is also a time to spend extra for value. The positive experience that I gain from those items more than makes up for the money that I could have saved.
-Michael
P.S. We DINKs, particularly Miel, loves the variety of farmer’s markets here in DC. What a wonderful benefit to urban living. We might not make it out to the farm, but the farm comes to us. Will be headed there today!
Wealth & Homelessness
I love listening to NPR; I never listened to public radio before I moved out here, but now I listen to it all the time. And one of my favorite shows is All Things Considered, a fantastic show that takes an interesting perspective to a wide variety of topics. The other day they had an incredible story about a homeless man in Phoenix named Richard Walters.
Mr. Walters was a former engineer who, once he retired, left the world of material possessions; no car, no home, just a few sets of clothes. But apparently he remained active in the stock market, and when he died, he had amassed a fortune – $4 million. When he died, he donated several hundred thousand dollars to NPR and a few other non-profits, while also giving a sum of money to a nurse who he had developed a friendship with over the years. He was able to be the philanthropist he was because of the extreme frugality he practiced (to the point of homelessness!). I think it’s an interesting story; quite a life change to go from a successful engineer to homeless retiree voluntarily.
– Michael
And the Rich Get…Poorer?
Most people assume that the rich will always get richer. Wasn’t that the controversy before the global recession took over the headlines? The shrinking middle class? The rich getting richer, and the poor getting poorer? That might have been the case before the economic collapse, but things have certainly been different since then.
Huge Losses
It is a bit hard to feel a ton of sympathy for the super rich who have now become just rich. That’s typically reserved for people who now have to stand in line at the food bank, rather than people who have to sell their private jet. Nevertheless, the amount of money lost by some of these top 0.5% earners is staggering. The New York Times recently did a feature on anti-virus software founder John McAfee, whose net worth shrunk from $100 million to $4 million. Think about that for a second; a 96% net worth loss. It’s pretty incredible.
The Impact of the Top 1%
But discussions on the financial status of the ultra-rich are more than just a curiosity. If you’re one of the many who subscribe to the idea that the rich help carry our economy (i.e. trickle-down economics, a rising tide lifts all boats, etc…) this idea of the rich losing their fortune can only hurt the economy as a whole in a significant way. The basic idea is that by cutting taxes (such as the capital gains tax) and deregulating business (thus allowing businesses more freedom to conduct themselves in a way that they believe will grow their business the most), you increase the productivity of the economy, increasing our Gross Domestic Product, leading to lower unemployment rates and lower prices for consumers. Critics would point out that this thinking lacks the theoretical rigor found in other economic schools of thought, that deficits tend to expand greatly under this model (for evidence, look at what the Congressional Budget Office had to say about the effects of George W. Bush’s tax breaks earlier this decade), and the tax burden is shifted closer to the poorer members of society, who are the least capable of handling it. Regardless, the fact that the rich have an impact – perhaps the greatest impact out of all income groups – on our economy cannot be denied.
Probably the most interesting point discussed in the article was the source of wealth for the upper 1%. The point was made that while some of that wealth came from productive assets (i.e. companies, products and goods that can be tied back to the greater economy), a lot of the wealth came from financial engineering, where money was made but nothing was produced. With that being the case, whenever the stock market took a hit, whether that be back in the early 2000s with the tech boom and subsequent bust or more recently with the housing market, the wealth of the top 1% also took a sharp hit. In the case of John McAfee, he apparently had millions of dollars tied to Lehman Brothers, and another significant chunk of money tied to real estate. Obviously those two investments don’t look so great now. Because of the close tie-in to the stock (and bond) market, many economists are unsure about how that wealth will be recovered, as this is uncharted territory.
According to the Congressional Budget Office, the richest 1% (income-wise) account for 19% of gross yearly income, and pay 37% of the total income tax. The top 5% of the income earners bring in 33% of the total income and pay 57% of the total income tax. The topic of disproportionately scaled marginal tax rates is a controversial one, and the effect of increasing taxes on the rich is still not clearly known. However, what is certain is that our economy’s recovery will be dependent, at least on some part, to the wealthiest among us. They have built up a lot of wealth over the years and if they do not have the incentive to invest it will be hard for the economy to recover at any sort of “quick” speed.
The Congressional Budget Office
You’ll notice in a lot of my posts I’ll refer to the Congressional Budget Office frequently (in fact, I have planned a post discussing a recent report released by the CBO). For those who don’t know, the CBO is an independent, non-partisan federal agency who is responsible for estimating the costs of federal programs and projections of the national debt and tax effects. The only political influence on the CBO is the director, who is appointed by the party in power. I like to use them as a reference point because they have access to comprehensive data and are generally considered to be impartial when conducting their evaluations.
-Michael
Coupon Stigma?
On the topic of frugal, one good way to be frugal is to use coupons. Keep in mind all of the handy dandy tips that we have on our new coupons drop down page, but you also might be interested in this study.
The Canadian press is reporting that coupon clippers are more likely to be perceived as “cheap”. Evidently research has also found that if you get in the same supermarket line as a coupon redeemer, you will also be perceived as a skinflint. Oddly enough, if you are beautiful, then the perception of being cheap goes away.
You can click here for the full article.
I would have to agree at times that I’ve gotten a bit of a tude with coupons, but often from the cashier. Guess it means more work for them.
I find it really too bad that coupons are seen with a negative perception. Though I’m by no means a huge coupon clipper, and I don’t shop enough to have it add up, but I definitely manage to get an average of $10-$20 off each month. The way I see it, that adds up to more that I can put to use where I want I want my money to go.
So go ahead, think I’m cheap, but I’m guessing these days people in line are just jealous they didn’t have the coupon themselves. They could be saving a lot of money on their purchases if they would just spend some time collecting and actually using coupons.
A couple of other quick tips on good use of coupons:
Rule #1: Don’t buy it just because you’ve got a coupon, or a good deal, Twinkies are still not good for you either way.
Rule #2: In my book it is pretty much always worth your five minutes to shop around for a coupon online before you check out. You can save money on a whole range of products by just checking to see if there is a coupon available online for something you would buy anyway. Once you’ve tried it and saved, it will be hard to go back.
Rule #3: Take advantage of freebies! They abound once you are start looking for them and can contribute greatly when your objective is living frugal. Some of my favorites are Aveda and Godiva!
Rule #4: ASK!!!! You never know what coupons the cashier might have. Many retail stores have extra coupon codes that they give their cashiers. They may particularly want to help you with this if you’ve been nice. I’ve gotten 20% off just for asking.
I hope you enjoyed these tips for living frugal. Enjoy and, in my book, keep clipping!
Cheers,
Miel
Extreme Frugality & Freeganism
At the risk of sounding trite, the only way we can increase our net worth is to either make more money or spend less money. I know, obvious, right? And it’s a lot easier, and much less time consuming, to focus on the “spending less money” part than the “making more money” part. So most people will look through their monthly statements and cut out the things they don’t need in order to make ends meet. The monthly gym membership which is sadly neglected; the shopping spree that unfortunately looks like it got out of control quickly; the take-out meals that could easily be replaced by cooking at home. Sometimes tightening the belt can go a bit further and we can talk about downgrading or eliminating cable tv or internet services, or perhaps attempting to get by with just one car and using public transportation to get around.
Increasing the Sacrifice
As we move down the list of budget items to eliminate, most people start to get a little nervous. Understandably so; it’s easy to eliminate things that we don’t use (e.g. gym memberships), but much harder to get rid of things that we use so frequently that we consider them a significant or even integral part of our daily lives. For instance, I’m on the internet all the time. I do my banking online, I keep up with friends online, most of my daily reading is online…it would be quite a shock to no longer be able to do those things. But I suppose if money became really tight and I felt like I had no other option, I could do so and the sun would still come up the next day. Point being, there exists a relationship between the current state of our finances and the sacrifices we’re willing to make to maintain or improve that state. That relationship dictates how frugal we’re willing to be. And some people are willing to be extremely frugal.
Crossing the Line
There are many fascinating, and often terrifying, things that people are willing to do in order to save some money, from re-using dryer sheets to re-using hygienic products. I’m absolutely enthralled by those people. Any time I see an article about someone who pours water in their empty Tide bottle in order to delay purchasing a new one or folks who have a coupon system so complicated it can only be fully understood by its creator, I get a little excited and read it enthusiastically. Some ideas championed by this elite group of frugals (frugalists?) may cross over the line, but nonetheless it’s extremely interesting to read about. And it’s not like I haven’t learned some neat tricks from them. I now reuse my Ziploc freezer bags because those things are surprisingly expensive, yet durable enough for reuse (but I don’t reuse sandwich bags; too much of a hassle, not enough benefit). And I’ve learned some awesome negotiating techniques. But by far, the most interesting subset of frugal livers are the freegans.
Freeganism
Freegans are as much about making a political statement as they are about saving money. In fact, the freegan philosophy subverts capitalism in such a way that money is almost useless. Freegans advocate an existence outside of what they call the “conventional economy” as much as possible, with special emphasis placed on developing a community. This idea of existing outside of the typical economy starts at scavenging for food and extends towards every aspect of living, from transportation to living quarters to even health care. As I mentioned, their lifestyle is seemingly more about making a statement than it is about living frugally (in the sense that living frugally is usually done to achieve a financial goal i.e. saving up for something or another, whereas freeganism is more about the elimination of the pursuit of money as a goal), so some of their platitudes are hard to stomach at times, but you have to admire their resourcefulness. Their way of life is certainly open to both criticism (they’re choosing to do something they don’t have to – scavenge – when there are countless individuals who don’t have the luxury of that choice; by scavenging the waste of those who do participate in the conventional economy, they are, whether they like it or not, acting as a participant in the same system they decry) and praise (they are resourceful; using discarded resources is ultimately a good thing) I think the most interesting thing about people who live that lifestyle, or lifestyles similar to theirs, is the level of sacrifice involved. Everyone has a tolerance level for what they are willing to go without, and the limitations that those on the extreme side of frugality are willing to impose on themselves speaks loudly to how far some people are willing to go. Being frugal is something all can participate in, albeit in varying degrees. I can’t condone or condemn that lifestyle, but regardless, I’m fascinated by the people willing to make those sacrifices.
If you’re not willing to sell everything you have, turn your back on modern society and dumpster dive for this evening’s food, there are still plenty of things you can do to save money. A simple google search for frugal living tips will yield hundreds of thousands of results. Probably one of the most extensive, all in one place, resources is on U.S. News and World Reports’ website. They have all sorts of information on how to save money on a variety of products. Some of it’s good advice, some of it is almost useless, but like with everything financial, common sense is the most important resource of them all.
-Michael
DINKs Buy NOKIA
Nokia made the cut on my latest stock purchase! We are now the proud owners of just under $3k in Nokia stocks.
You might ask, why Nokia?
There are a couple of reasons for our purchase, aside from our general process of checking out the value of a stock:
1) Nokia commands nearly 40% of the global mobile phone market. Given the developing world, this will see great expansion in the years to come. This also means that we diversify a bit in terms of technology usage.
2) They have a new technology call Ovi that looks like it has some great potential. For instance, Nokia was able to open this up on 700 platforms simultaneously, rather than iPhone and Blackberry having basically one version. They are also getting further into the mobile entertainment industry and doing a good job of positioning themselves in that regard.
3) The price seems like it is a good value. In comparison to other stocks I was looking at, including GE and Apple, Nokia seems like it has a great deal more potential for growth in the stock price.
4) Having lived in Finland, I believe strongly in the Finnish persuasion for frugality and believe that the business is run well. Being frugal can build a company’s wealth just as much as it can build an individual’s wealth. You’ve got to love Ter
o Ojanperä; seen right.
5) When we set out 2009 stock pick parameters, one of those was to purchase stocks in technology that would still be in demand despite the economy.
Here are a couple of other resources for anyone who might be interested in Nokia: Factsheet and an article from Fast Company with some good information.
We’ll keep you posted on how things go, but it looks like it could be a great opportunity to build our wealth.
Cheers,
Miel