6 
9 | § ¶This Job Has Accomplished Its Purpose
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I joined my current position reluctantly, five years ago. You
see, I used to be a kind of shy, quiet software engineer, that never
liked to go anywhere (hiking or backpacking excluded). Suddenly
the opportunity to become a Pre-Sales Engineer was offered to me.
Sales Engineers have to travel a lot (50 to 75% of their time), meet a
lot of people while they travel, do a lot of calls, and worse of
all: they design and code very little computer software (that was
what I wanted to do). What was worse than that was that I knew
from the beginning that if I went into Pre-Sales, returning to Software
Engineering (Development) would be difficult. As side
inconveniences I would have to work with people, dress less geeky, and
shave frequently.
My wife and a friend convinced me that there where two reasons on why I should take the job:
- See the whole world. (travel wherever there is an opportunity)
- More money. And then, opportunity for even more. (bonus/commissions)
Giving it a little more thought, the second purpose -- MORE MONEY -- has been accomplished in a VERY SPECIAL way. Not necessarily because of the quantity, but because of what happened. Read More
10 5 | § ¶Does Buying on Sale Means Saving Money?
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I think this society is addicted to sales. Go to any department
store and every week they have the "biggest one day sale of the year
that lasts three days with two preview days" (yes, I made sure it
sounded silly). You go to any store and you EXPECT to see a flier
with special sales. Even Walmart, who tried to promote an
"Everyday Low Price" (fair price) policy have had to offer "Special
Buys".
It has gotten us to a situation where some of us have had to adopt a
policy of "Never Pay Retail", since you know that within a month's time
frame most products cycle through some kind of sale.
Since we assume that we will most probably buy sale or discounted items
as much as possible, the question then becomes, "when does buying on a
sale saves money?"
9 6 | § ¶His, Hers, and Ours
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My Wife and I believe in the His, Hers, and Ours account management philosophy. Some other marriages believe in "everything goes into the same pot". There are some reasons we prefer our method, and I want to share them with you.
Read More 8 5 | § ¶Resumes and Card Games
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I believe that we should all try to be financially independent. I
define Financial Independence as being able to live at your current
level forever without needing a salary. To achieve that goal you
need revenue generating assets. But, unless you where born in a
rich family, to acquire those revenue generating assets you will need
a salary. The better (greater) the salary is, the better your
chances of achieving Financial Independence are.
That is why I believe that friends should help friend get better
jobs. And I do not mean doing illegal or unethical things.
I mean helping them:
- Educate themselves.
- Learn how to express themselves.
- Help them make contacts.
- Help them learn how to sell themselves (their professional services) better.
8 4 | § ¶Savings Are Sacred (Investments Too)
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Saving money is hard for me. I bet is hard for you as well.
At least it is harder than spending. Saving is holding your money
aside, hoping for it to grow and be usefully at a later time when you
need it: preferably during your retirement years, or to achieve greater
goals in life like a house or an education. Spending on the other
hand provides instant gratification.
The Federal Reserve Board statistics reveal that during 2004 people increased their consumer debt(1)
by 4.5%, and a 5 year average increase of 6.46% - Granted, we are
decreasing the rate at which we increase our debt, but we still
increase it! Consumer price index (an inflation indicator) for
those same 5 years increased by an average of 2.52%. Debt
increased an average of 3.94% over the inflation indicator.
The Bureau of Economic Analysis
reveals interesting statistics about the Personal Savings Rate as a
percentage of disposable income: 0.5% in March 2005, 0.4% in
April 2005, and -0.62 average during the years of 1998 to
2002. Personal income growing Consumer price
index (an inflation indicator) for those same 5 years increased by an
average of 2.34%. Savings increased an average of 2.96% below the inflation indicator.
Americans are increasing their debt faster than they increase they
savings. The debt increase is above the inflation, while the
savings increase is below inflation.
Apparently, it is extremely difficult for our American Society to
increase their savings.
This is why I have three very important principles regarding saving:
6 5 | § ¶The Pitfalls of an Advanced Society
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I have been reading some interesting articles on Personal Finance Blogs that make me be very concerned:
- Blessed - by: Budgeting Babe
- Cheapsake Chic - by: Savvy Saver
- Two-Tier-Health Care - by: Canadian Capitalist
9 10 | § ¶Employee Stock Purchase Plan ( ESPP )
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Many companies have them, yet not every employee takes advantage of
them. I wonder why?, and the only reasons I can come up is:
lack of knowledge, laziness, or the fact that most people live
paycheck-to-paycheck -- All of them are conditions that can be fixed if we really want to.
I think Employee Stock Purchase Plans deserve some more attention by all of us.
8 4 | § ¶Bittersweet: They Sold My Company
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Bittersweet day. My heart sorrows. My pocket is full of happiness.
Today is the official date when a larger company (15,000+ employees)
acquires the medium size company for which I work (750+
employees). I saw my company grow from when it was less than a
100 employees, pre IPO (Initial Public Offering into the stock market)
and was making just about 10 Million a year. I saw it grow to a
150 Million a year company just to be merged. I did spent 8 years
of my career helping it grow.
And I call it MY company because I still hold stocks from it (which
will be paid with a cash tender in the next few weeks). I
still have a portion of it that I will no longer have.
Want to know how I could be happy as well as sad?
14 8 | § ¶Credit Card Management
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Credit cards are convenient, and even good when used judiciously. They:
- Keep record of your expenses.
- Facilitate On line and Catalog Trade.
- Offer some fraud protections that debit cards may not offer.
- Provide and end-of-month, easy to read, analyze, and archive statement.
- When used right, help build up the credit score, so that you can buy a house later.
- You can use bank's money for free, for at least 25 days if you pay them in full every month.
- Sometimes they give miles, rewards, or other perks.
- Most of them have no annual fee nowadays, so having them doesn't have to cost a cent.
I have a very disciplined approach to Credit Card management, and I want to share it with you. Read More
7 6 | § ¶Two Peter Lynch Books (Recomended)
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Peter Lynch is a great stock picker. He, like me, is also an
advocate of early financial education for all American kids at
school. I admire his knowledge and skill, even when his ego may
be dangerously enlarged. Peter managed the Fidelity Magellan
fund. Such fund was a wreck when he took it, and became one of
the top performers of all times, specially when he was the
manager. The fund share owners miss him now that he is in
semi-retirement.
Two books I have read as part of my financial education are:
- Learn to Earn
- Beating The Street
8 1 | § ¶Canoe Sunday -- Close to Home
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On Sunday May 15th, 2005 we went for a stroll along the Ipswich, Massachusetts river. The Foote Brothers Canoe
rental shop is conveniently located close to town. They charge a
reasonable $30 per canoe, where you can fit up to 3 people. They
also shuttle you to upriver if you do not want to row upstream.
We did decided to row upstream as it is better exercise.
The trip was full of great opportunities to watch wildlife including
beavers, goose, ducks, woodpeckers, and many birds. The river is
kind of narrow and you have to exercise a lot of control to avoid
crashing into the shore.
If you are in the Boston area, I recommend you take the trip. You can even take the commuter rail to Ipswich and walk to the canoe place.
7 3 | § ¶Osceola and East Osceola
-- New Hampshire 4k Peaks
Last fall we did our last two New Hampshire 4k
of the season: Mt. Osceola (4340ft) and Mt. Osceola East
(4156ft). Both mountains can be done on the same day on a easy to
moderate in-and-out hike of just a bit less than 5 miles. The
hike was on October 9th, 2004 just before leaving for a business trip
to Nice, France, and hoping to see good fall foliage -- which was
good, but not at its peak due to the recent heavy winds and rains.
The hike was foggy and we could not enjoy the beautiful views, but the
exercise was very welcome before we started our winter hibernation
(non hiking).
Two more peaks. Hoping 2005 will bring many more.
To see this and other hikes on which I have prepared a report, go to LocalHikes.com
4 9 | § ¶Spending it All on the Way to Richness
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Spending does feel good according to Suze Orman (her books below) and as The Wealthy Blogger says on his blog: "Spending does indeed feel good, sometimes even better than using or
consuming the item you just spent money on. Why does it feel good? I
believe it feels good because it is an escape; spending money, even on
a credit card, makes you feel wealthy."
That is why I fool myself into believing "I can spend it all!"
- Pay yourself first: I put about 40% of my pre-tax income into investments.
- Pay society (tax man): I pay about 25% of my pre-tax income in taxes.
- Spend the rest of it all: And I get the left 35% of my income to spend it all! In anything and everything! (about 20% of my income goes into my mortgage).
7 9 | § ¶Basic Personal Finance Books
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Friends ask for recommendations about where to start learning about
finances. There are many books in the market, and I decided to
try two to find out if they where appropriate. Although I didn't
found all a person needs to start in the two books I am reviewing, I
did found valuable information, specially for young people. I do
believe they should make high school kids read at least one of these
two books. The two books I am reviewing today are:
- The Wealthy Barber, by David Chilton
- The Richest Man In Babylon, by George S. Clason
If you are financially illiterate I recommend you read Wealthy Barber on one of these summer days at the beach (as soon as possible) to improve your financial life, and save The Richest Man In Babylon for a rainy day to read it for its entertainment value; as it doesn't provide too much extra information, but reinforces the values on the Wealthy Barber. If you are a financial expert, chances are you know everything they discuss, but it may still be worthwhile to read them: it will give you some ideas on how to convince your friends to handle their finances better.
The Wealthy Barber, by David Chilton tries to make you feel identified with one of the characters in the story. There is a single teacher, a self-employed business owner, and the regular married family guy expecting a child. The Wealthy Barber offers advice and then discusses how it best applies to the different friends visiting him. Every month the barber touches on a different topic. The topics discussed are: