Archives For January 2014

Check out this great story from a reader, Drake, on how his rich father handles money.  Sometimes we like to think all rich people are driving around in brand new BMW’s and Mercedes… when in fact, most of those new cars are driven by people who can’t even afford them!  Here’s the story:

How rich people handle money

Does this look like the kind of car a decamillionaire would drive? Well guess what, it is!

I’m not personally wealthy, but my dad is moderately affluent and I’ve learned the power of frugality and living below one’s means from him over the years. He’s been driving Japanese econoboxes and minivans for as long as I can remember. He’s driven 3 cars in his lifetime (all of which he wrote a check for in full at the time of purchase except for his very first car which he financed) – an ’84 Toyota Camry, a ’95 Nisan Quest, and an ’06 Honda Pilot. That’s it. He write checks for cars in full and drives them until they break down.

Currently he’s 55 and will pull in, oh I don’t know, anywhere from $550k to $700k per year (AGI – federal income tax takes a hefty $150k-$200k of that each year. I’ve seen the checks to the U.S. Treasury!) or so and yet he spends maybe $6k-$7k per month on total living expenses in a relatively low cost of living area (Texas). As a result his overall net worth is between $5M and $10M and yet he doesn’t harbor any notions of ever driving a luxury car. In fact, he doesn’t even consider himself to be wealthy. If someone were to ask him what social class he’d consider himself to be in he’d probably say “middle class” and then begrudgingly add “upper middle” as a qualifier if pressed. Continue Reading…

Hello, Master

January 20, 2014 — 12 Comments
Elephant Village, Laos

Driving my queen around in Laos – she’s not the “Master” I’m referring to though!

After ten months of unpaid leave from my company while we traveled the world, I knew it would be somewhat difficult to go back to my regular job.  We rode elephants in Laos, pet tigers in Thailand, feared for our life in Jordan, and watched the mesmerizing Northern Lights in Iceland.  We pushed ourselves beyond our previous limits when we hiked a mountain in Malaysia and visited 4 tiny villages in the remote mountains of Nepal as we trekked for 65 kilometers over four days.  We saw each other every day, and almost every minute – with the number of times we were apart for more than an hour easily countable on two hands.  We put every ounce of trust and faith in each other’s hands as we set out as a team to explore the world.

Our days were no longer defined by fighting through the week just to have two days to do what we wanted on the weekends – which are usually filled with doing chores we don’t want to do anyway!  Instead, we did whatever we wanted, whenever we wanted, and we were more active than we’d ever been before.  Our time wasn’t filled with lazy days on the beach, but instead of near constant motion of traveling to new cities, finding our home for the next few days, exploring the major sites, and at the same time planning our next destinations. Continue Reading…

Are You a Debt Enabler?

January 13, 2014 — 12 Comments
Are you a debt enabler?

Caution: Enablers ahead!

We’re really good at enabling each other to get into debt because we rarely find happiness in telling our friends and family they’re making a bad decision!  Buying a new car you can’t afford – go for it, you deserve it!  Want to take that trip to Vegas – no worries, you’ll pay your credit card off someday!

Of course you could take the sinister angle and say we like watching our friends and family get in debt so they can’t get ahead of us.  Hopefully that’s not the case, but as Charles Kindleberger said, “There is nothing so disturbing to one’s well-being and judgment as to see a friend get rich.”

Really though, I don’t think that’s the case, I think we just like to see others do well in life.  So, the real question is this:  Are you a debt enabler?  To find out your level of debt enabling, take the quiz below and add up your final score.  Continue Reading…

Don't keep $250,000 Cash At Your House

Just in case you needed a reason not to keep $250,000 cash at your house, look at what happened to DeSean Jackson.  What a terrible thing to happen to anyone, but it seems dangerous to keep that much cash around!

A few days after the Philadelphia Eagles wide receiver said he wanted to renegotiate his contract, Jackson’s South Philadelphia home was robbed of more than $250,000 in cash and jewelry, along with a handgun, police said.

Investigators said Saturday the burglary happened sometime earlier in the week at Jackson’s home, not far from the team’s practice facility. Police say the cash and jewelry were taken from a safe.

If you have $250,000 sitting around, learn how to start investing here.  Also, if you are looking for somewhere safe to put your cash, check out Pen Fed’s 5 year CD at a 3% rate… I’m probably going to open one up because it’s one of the best deals out there.

 

I just had to share Jocelyn’s latest post with you; I may be biased but I think it’s really beautiful art.  If you have 10-15 minutes, it’s well worth a read.

The Psalm of Life by Henry Wadsworth Longfellow

Tell me not, in mournful numbers,
  Life is but an empty dream!-
For the soul is dead that slumbers,
  And things are not what they seem. 

Life is real!  Life is earnest!
  And the grave is not its goal;
Dust thou art, to dust returneth,
  Was not spoken of the soul.

(…poem continues)

I found this poem lying discarded upon a table inside a small home just off the railroad tracks running through a quaint but often overlooked small town in Oklahoma. That home once belonged to my grandmother. It’s where I spent lazy summer days and marveled at my grandmother’s ability to cook, and subsequently burn, every Southern dish to perfection. Now, it’s an empty shell of what it once was, but its serves as “home” for Dan and I as we clumsily and hesitantly decide how to proceed with our lives. The open poetry book, with is cover missing and pages ragged and torn, may not have been simply discarded, but instead perfectly placed.

Continue Reading…

Wow, I can’t believe it’s been five years since I originally wrote a letter to myself!  This will probably send me into another round of mild depression where I write poems about how fast time is going like I did here and here.  I guess that means it’s time to write a letter for the next five years, but let’s first review my goals in the last five years.

2009 me:  I’m marrying (my wife) in June and couldn’t be any happier

2014 me:  Smart man, best decision you’ve ever made

2009 me:  Hopefully, you are running a successful business, happily married, financially stable, and living your dreams.

Continue Reading…

I recently received a comment from a reader who doesn’t want to drive a hooptie:

So let me get this straight. I make 51k a year. 20% of that is 10,200. I’m not driving around in a $10,000 hooptie are you insane? I’m a grown ass man. If that’s all I had aspired to I would have offed myself years ago.

When this comment came in a few weeks ago, I couldn’t help but turn it into a full post.  First off, it’s hilarious, but second, I think it’s a reality for most people.  Alex left the comment on “How Much Car Can you Afford” where I advocate that you shouldn’t spend more than 20% of your annual income on a new car.

According to the rule, only rich people should be able to drive nice cars – that definitely doesn’t sound fun for the rest of us!  In fact, some rich people still buy older cars, so only the REALLY REALLY rich people should be able to buy the REALLY nice cars!

Continue Reading…

Poem: The Story of Time

January 1, 2014 — 4 Comments

The start of the new year made me reflective and poetic.. I hope you enjoy!

When he was young he didn’t know Time
It was something that passed with no meaning to him.
When he met Time, he wondered why Time was so slow
Christmas took so long to arrive, birthdays were too far apart.

As he got older, Time was finally on his side
No more need to count down days
No need to live in the past or the future
Time was there for him, so much so that he took Time for granted.

As he aged, he began to learn the importance of Time
Time was a great healer
Time helped him get over broken hearts
However, Time was starting to move faster
Time started to take a toll on his aging parents.

What happened to his friend, Time?
Time was always in such a hurry to continue
Birthdays came and passed, babies aged to teenagers
Time started taking his family members
How could Time betray him?

He felt like it was just yesterday when Time moved too slow
But now Time couldn’t be stopped
Time was counting down his days.
Soon, his Time was gone.

What can we learn from Time?
Time is slow, but Time is fast
Time is your friend, but Time is your enemy
So treasure your Time, because it’s all you have.

 

The Story of Time - Big Ben

A night shot of Big Ben by Jocelyn