1. Take Advantage of Opportunities when they Present Themselves - After the 2008 season, the New York Yankees signed CC Sabathia and AJ Burnett on nine-figure multi-year deals. Are these two pitchers the best pitchers around? Probably not (neither ...
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Drive-By Movie Review: Star Trek
This is a review of the 2009 movie Star Trek starring Chris Pine, Zachary Quinto, Leonard Nimoy, and Bruce Greenwood
Plot Summary: A chronicle of the early days of James T. Kirk and his fellow USS Enterprise crew members.
Me: The Internet - the ...
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What Would YOU Be Willing to Do for a Million Dollars?
Several years ago I wrote a very popular post highlighting the seven deadly sins of personal finance. Of course, one of those seven deadly sins was greed.
Greed often makes people do some really crazy things they wouldn't otherwise ...
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Drive-By Movie Review: The Proposal
This is a review of the 2009 movie The Proposal starring Sandra Bullock, Ryan Reynolds, Craig T. Nelson, and Mary Steenburgen
Plot Summary: A pushy boss forces her young assistant to marry her in order to retain her visa status in the U.S. and avoid ...
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Talkin’ Turkey: Evaluating My Thanksgiving Dinner Scorecard
This year Thanksgiving dinner is at my house. We'll be serving dinner for 16 people including my sister and her family, my mom and dad and the Honeybee's folks.
You know, since he came out to visit a few weeks ago, my father-in-law Tony has taken over a lot of the chores around the house, including fixing the water heater (and saving me $400 in the process).
It's not that I'm lazy, mind you. It's just that Tony likes to keep busy, so who am I to stop him if he wants to tighten a few loose screws, paint a bedroom or two, and perhaps even do a major renovation to my bathroom and/or kitchen while he is vacationing here?
Needless to say, that's why I made my go-getter father-in-law the executive chef in charge of preparing this year's Thanksgiving dinner.
Hey, what kind of guy do you think I am? I'm certainly not prepared to ruin Tony's Thanksgiving by telling him his only job is to sit down all day and do nothing but watch some lousy football games and stuff himself silly with turkey and mashed potatoes - Tony is a guest in my home, after all.
Besides, I'm going to be Tony's trusty sous chef. Before you laugh too hard, you need to know that I am normally the family cook - I can more than handle myself in the kitchen. And although that didn't sound quite right, I trust you know what I mean.
As for the menu, after much deliberation, Tony and I decided to keep things traditional and settled on the following menu:
Turkey
Herb stuffing
Mashed potatoes
Yams
Green Beans
Salad
Dinner Rolls
Dessert (Pumpkin, Apple, and Cherry Pie)
Sparkling Apple Cider
So with the menu in hand Tony and I made a grocery list and then set off to do some grocery shopping.
We brought the Honeybee along with us too because we needed somebody to drive.
Our first stop was at our local warehouse-type store, where we bought the turkey, a monster apple pie, and a couple of other items. For the record, the turkeys at the warehouse-type store were not only fresh, as opposed to frozen, but they were also about ten cents per pound cheaper.
After that, we went to our neighborhood supermarket, where we bought the rest of the stuff we'd need for the Thanksgiving feast.
As you can see, off to the right I have included a breakdown of our grocery bill. Keep in mind that a couple of the items I bought at the warehouse store have been pro-rated to account for the fact that we only use a portion of what we buy for the actual dinner. So, for example, although we bought 48 ounces of canned olives in eight cans, I'm only counting two cans (12 oz.) on my Thanksgiving dinner scorecard.
In total we spent just over one-hundred dollars for our Thanksgiving meal this year, which is very reasonable for 16 people. We didn't make a conscious effort to make the meal as cheaply as possible - Thanksgiving dinner is a meal I prefer not to scrimp on. However, if we did I am certain we could have shaved the total grocery bill by probably 20% by focusing on buying only store-brand items. Then again, keep in mind that, as my name-brand vs. store-brand taste test experiment showed, you can't assume anything with respect to taste and quality - sometimes the name brand is better, and other times, the store brand label is actually better.
A Few Observations...
After looking at this scorecard, I couldn't help but notice a few interesting facts:
1. The biggest expense for the entire meal was NOT the turkey. "But, Len, how could that be?" Maybe it's because when it comes to Thanksgiving dinner, my family considers the meal's most important course to be dessert. Sad, I know. Anyway, after purchasing almost eight pounds of pie and the mandatory whipped cream, we spent a whopping $22.16. Meanwhile, the 22-pound turkey we bought cost us less than twenty bucks. I don't know what is more disturbing: The fact that we bought over $20 worth of dessert, or the little voice inside my head that keeps telling me eight pounds of pie might not be enough.
2. You can get some really awesome deals at your local grocery store. Did you notice the price we paid for those russet potatoes? Ten cents per pound is an absolutely ridiculous deal to be offered by any grocery store not based in Idaho. Especially when you compare that to the price we paid for the potato chips, which comes out to $2.79 per pound if you do the math.
3. It's always cheaper to eat at home. I dare you to find a restaurant that will put out an awesome Thanksgiving dinner with all the trimmings, plus appetizers, for 16 people in a family-friendly and comfortable atmosphere for just over $102. And that's before the tip.
On behalf of my entire family, we'd like to wish you all a very safe and Happy Thanksgiving! :-)
Oh, and if you find you happen to need a little extra pie on Thanksgiving Day, drop me a line - we've got plenty. I think. ;-)
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Drive-By Movie Review: The Uninvited
This is a review of the 2009 movie The Uninvited starring David Strathairn, Elizabeth Banks, Arielle Kebbel, and Emily Browning
Plot Summary: Anna returns home to her sister (and best friend) Alex after a stint in a mental hospital, though her ...
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Flexible Spending Accounts Provide Free Money. Why Pass It Up?
The relentless rise of health care costs can really put a strain on your household budget. Even with an insurance plan, health care expenses can add up when you consider most people still have to pay deductibles, copayments and other items not covered by insurance.
A great way to offset these rising costs is through the use of flexible spending accounts (or FSAs). FSAs are employer-sponsored accounts that allow employees to make pre-tax contributions. FSAs provide tax savings that help offset health care and dependent day care expenses.
Any contributions you make to your FSA can be used to pay for out-of-pocket medical expenses that are not covered by your health insurance plan - so by taking advantage of FSAs you are, in essence, allowing the government to subsidize a portion of your unreimbursed medical expenses.
How FSAs Work
Let's say after sitting down and thinking it over, you estimate all of your unreimbursed medical expenses for the coming year will be $1000. At enrollment time, you instruct your employer that you wish to put $1000 in your FSA. Your employer will then deduct a portion of that amount from your paycheck each week (in this case, $19.23) before taxes.
At anytime during the year, you can tap the money in your FSA to cover your qualifying unreimbursed medical expenses, even if your account isn't yet "fully funded." In other words, if your FSA contribution for 2010 is $1000, you can withdraw all $1000 to pay for qualifying unreimbursed expenses incurred during the first week of January, even though you've only contributed $19.23 into the account.
How do you "tap" the money? I pay the fees in advance and then submit the receipts to my plan administrator who then issues me a check. But I also have the option of using a special FSA debit card as well that will make the payments in real time.
The higher your marginal tax rate, and the more you put in your FSA, the more money you'll save. Somebody that puts $3000 into an FSA and sits in a 25% tax bracket is essentially saving themselves $750 every year.
That's $750 of free money - so why would anybody pass that up?
Fear is a Lame Excuse for Leaving Free Money on the Table
As this New York Times article shows, most people fail to take advantage of FSAs because employee contributions to an FSA are "use-it-or-lose-it. What that means is if you fail to spend the money in the account before the coverage period ends, any unused funds are lost.
What a lame excuse.
Actually, it's a pitiful excuse - but a lot of people use it anyway. The Times article notes that although 85 percent of companies offer FSAs, only 22 percent of employees take advantage of them.
How sad.
I can understand being afraid of leaving free money on a table if it is being guarded by an angry rattlesnake. But to throw away free money simply because you're afraid you might not meet some silly little requirement is really inexcusable - especially when you consider all it takes for most folks to avoid that scenario is 30 minutes of their time so they can plan out and estimate in advance their unreimbursed medical expenses for the following year.
With two kids currently wearing dental braces, my unreimbursed orthodontia bills more than cover my $3000 annual FSA maximum limit imposed by my employer. But even when the kids weren't in the midst of their current orthodontia program, we had little trouble covering the maximum. When you consider eye glasses, contact lenses, saline solution, dentist and doctor copays, unreimbursed prescriptions, cold and other off-the-shelf medicines, band aids, and other qualifying expenses for a family of four, it didn't take much effort to get there.
Coverage periods depend on your employers specific plan, although most plans follow the calendar year. My company's plan even offers a very generous three-month grace period for filing claims.
If you are still worried about losing money, I would recommend you start slowly and gradually increase your FSA limit each year until you feel more comfortable with the process.
That's what I did.
The first year I took advantage of an FSA I only signed up for $500. That year I had reached $500 in unreimbursed expenses by June and I remember wishing I had signed-up to put more in my account. The following year I upped my contribution to $1000. By the third year, I doubled it again. I am now contributing $3000 to my FSA and it is a very important benefit I count on every year to help me save money.
Another benefit of the FSA is it acts as a quasi-savings device. We usually compile all of our receipts in a special file and then request our entire reimbursement check all at once sometime in the latter-half of the year. The $3000 check makes for a nice "windfall bonus" that we use to pay for big purchases.
What Are Qualifying Expenses?
Although there are exceptions, the list of qualifying expenses is usually big enough to drive an ambulance through. For a complete list of deductible medical expenses, check out IRS Publication 502. But, as cited in that Times article, here is an example of how varied the expenses are:
- Over-the-counter medicines of all types
- Cough drops
- Calamine lotion
- Mental health therapy
- Lab tests
- Dental braces
- Lasik surgery
- Aids to help you stop smoking
Just keep in mind that, as of 2011, over-the-counter medications must accompany a note from your doctor to qualify as an allowable expense.
Keep in Mind Your Employer Can Make Exceptions!
It is important to know that employers are free to choose what their FSAs will cover. The Times notes that while the vast majority of firms simply follow the IRS rules, some do make exclusions, so check with your employer's benefits department to see how your company varies from the IRS list of approved expenses.
In Conclusion...
FSAs are something to be embraced, not feared. They not only reduce your tax liability, they also can act as a de facto quasi-savings plan. Yes, if you fail to plan, you may end up losing a portion of your contribution - but that is a poor excuse for passing up one of the more valuable benefits that your employer provides to you.
All it takes is a small amount of planning on your part. :-)
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Drive-By Movie Review: The Business
This is a review of the 2005 movie The Business starring Danny Dyer, Tamer Hassan, Georgina Chapman, and Geoff Bell
Plot Summary: A restless young man from South London is recruited to deliver a tin stuffed full of cash to a contact in southern ...
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Drive-By Movie Review (Halloween Edition): The Last House on the Left
This is a review of the 2009 movie The Last House on the Left starring Garret Dillahunt, Tony Goldwyn, and Monica Potter
Plot Summary: After kidnapping and brutally assaulting two young women, a gang led by a prison escapee unknowingly finds refuge ...
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It’s Time Unemployed People Start Working For Free
Okay, not all unemployed people, but definitely some of them. Let me explain.
Last month the U.S. House of Representatives passed another 13-week extension of unemployment benefits on top of the current California maximum of 79 weeks. And just last week, Senate Majority Leader Harry Reid (D‐Nevada) introduced a proposal to extend unemployment insurance by up to 14 additional weeks for jobless workers in all 50 states. The proposal would also extend benefits for an extra 6 weeks in high unemployment states.
Assuming these provisions survive and eventually get signed into law by President Obama, it means qualifying individuals in California will be eligible to receive unemployment benefits for up to 99 weeks. (UPDATE: In April 2010, President Obama signed the bill into law after the Democratic majority in Congress passed the legislation on what was essentially a party-line vote in both the House 289-112 and Senate 59-38.)
The cost of this extension is estimated to be on the order of $70 billion. Of course, U.S. lawmakers have not figured out whether or how to pay for that, so they'll just cover it in a manner that requires the least amount of political courage. That is, they'll just print more money - damn the torpedoes and thank you very much.
That being said, for now let's forget about the financial impacts and just focus on the magnitude of time, shall we?
Ninety-nine weeks.
If we're going to talk about the length of time that certain people should be getting paid unemployment benefits, I have to insist on raising a bit of a stink. Come on, that's almost two whole years.
Hey, I have nothing against the number 99 per se.
Ninety-nine is a terrific number if you're the greatest hockey player who ever lived. Or a secret agent.
But 99 is a ridiculous number when it comes to the number of weeks the government allots some people to find a job while enjoying the luxury of a safety net. To be more specific, I have no doubt this is a big reason there are now a growing number of people who characterize themselves as being happily "funemployed."
According to this expose by the Los Angeles Times, the funemployed are "usually single, in their 20s and 30s and find that life without work agrees with them."
This story by CBS News asks, "If the economy is so dismal, why are victims of the recession smiling?"
I'll tell you why: Because a lot of people are collecting $475 per week in California or $900 per week in Massachusetts for doing absolutely nothing!
Most of those smiling people are single, under 35 and either have a low mortgage payment or are renting an apartment.
One of my coworkers was telling me about a friend of his who fits that profile who absolutely refuses to look for a job until his jobless benefits run out. He's having a blast and the Unemployment Office isn't paying enough attention to notice that he isn't really looking for work anyway.
And who can blame the guy? Why work for $10 bucks an hour stacking boxes when you earn $11.88 per hour sitting at the beach or skiing at Mammoth Mountain?
If the government is going to continue to extend unemployment benefits, then the state unemployment offices need to do a better job policing those who are receiving them.
I say that before anybody receives a single cent of extended unemployment benefits resulting from the Federal Emergency Unemployment Compensation program, they should have to prove they are making a good-faith effort at finding a job. After 52 weeks, and until they can show otherwise, people that have failed to meet such a modest requirement should be required to do community service for 20 hours per week in order to continue to receive further unemployment benefits.
After 72 weeks, the community service requirement for failing to demonstrate a good-faith effort to find a job should increase to 40 hours per week.
No community service, no check.
If you want to stay "funemployed," be my guest, Skippy - just don't expect the taxpayers to subsidize you.
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Drive-By Movie Review: Vicky Cristina Barcelona
This is a review of the 2008 movie Vicky Cristina Barcelona starring Scarlett Johansson, Javier Bardem and Penelope Cruz
Plot Summary: Two girlfriends on a summer holiday in Spain become enamored with the same painter, unaware that his ex-wife, with ...
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My Store-Brand vs. Name-Brand Blind Taste-Test Experiment
One of the great never-ending debates in the world of personal finance is whether or not name-brand groceries are really worth the extra cost when alternative cheaper store-brand groceries are available. Furthermore, when it comes to edible products, ...
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Why Low-Cost or No-Fee Products May Not Be Such A Good Deal
This is a guest post by Mr. Credit Card from www.askmrcreditcard.com. Today, Mr Credit Card is going to talk about how getting into the cheap, lowest cost mentality may not be the best thing for every purchase that we make. This is a slight departure from his usual credit card subject although he uses a couple of such examples below. If you are looking for a credit card, check out his best credit cards recommendation section. Thanks, Mr. Credit Card for filling in for me today!
Firstly, I would like to thank Len for letting me guest post on this blog. I've been blogging since 2006 and I have noticed that personal finance bloggers mostly preach frugality. You can see that in the number of coupon blogs that are written by moms and pf bloggers who recommend every thing that is "low cost."
But I want to stress that "low cost" mentality can be taken too far and sometimes, that route may not be the best. Today, I would like to highlight some instances where "low cost" may not necessarily be the best option for us individuals and in certain cases for society as a whole.
Low Cost Online Brokers - There are many pf bloggers that recommend or review "discount brokers." Because of the competitive nature of the industry, fees keep dropping.
But are low-cost online brokers the best thing to happen? While low fees are great for the retail investor, what is probably lacking today is top-notch research. Yes, Wall Street messed up by not calling the market right in 2000. Yes, investment bankers paid the bills for the major brokerage. But since Elliot Spitzer prohibited investment bankers to pay for equity research, Wall Street has found no incentive to provide the great research. In fact, these days, Wall Street provides their best stock trading research to their own proprietary trading desk. The very best research analysts have gone to work for hedge funds.
Where does that leave the so-called "retail investors" like us which the new rule was supposed to protect? Are we really getting the best deal from this arrangement? I'm not so sure. Well, we all do not want to be paying $75 for stock trades, but I'm not convinced paying just $4 per trade is the way to go either. What's the point of having low transaction fees when you cannot get access to the best research? You will then be confined to the garbage that CNBC throws at you!
Low cost computers - Michael Dell did a great service by introducing low cost computers (at least on a relative basis). Computers have steadily declined in prices. But in my opinion it is so competitive that computer companies are cutting corners in certain areas. For example, most firms now outsource customer support to India because of lower costs. I have absolutely nothing against customer service reps from India if they are cheaper, but the problem arises when computer customers here cannot understand folks from another country!
If you buy any branded computers, you also do not have to pay the full price for Microsoft's Windows operating system. But along with that comes lots of pre-installed software that you do not need. This causes system bloat and slows down your computer. In addition, to get these programs removed, a retail store like Best Buy actually charges you money to get rid of these programs!
These out of the box computers are mostly not upgradable. Hence, most folks change them after just three years because the costs of upgrading the operating system, memory and hard disk simply go up and your computer slows down! Perhaps if you are thinking of getting a new computer, a custom made computer like Puget Systems with its excellent customer service might be the better way to go even though it may cost slightly more.
High Yield Savings Account - Lots of bloggers talk about high yield savings accounts. Due to the rise of the internet as a medium, many banks have been able to offer consumers high yield savings accounts, or at least rates "slightly higher" than banks with brick-and-mortar branches. Is that necessarily a good thing? Good for some folks. But bear in mind that if all we care about are good rates, we may be neglecting to consider other factors such as having a bank teller behind the desk that actually knows you in case you have any trouble with the account. Or check transfers to foreign banks - an online bank may require you to go through an identification process, and if you fail it, things could get nasty!
Are high rates and deals the only consideration? I think not. I prefer having a bricks-and-mortar branch rather than an online bank.
Cheap Digital Cameras - From my experience, saving on digital cameras can be a huge mistake. Before I got my $700+ Canon Digital SLR, I had one of those sleek, pocket-sized $300+ digital cameras. The problem with them was they took a long time to capture the screen shot (about a couple of seconds). Three years ago, Mrs. Credit Card put our three kids together for a camera shot to use for our Christmas card. Being kids, they just couldn't keep still. But what compounded the problem was that the camera took ages to capture the shot after you pressed the "shoot button." So when the shot was perfect, two seconds later, it was not. Mrs. Credit Card got really angry with the kids for not keeping still. But what did she expect? They were kids after all!
So I took the plunge and got the digital SLR; I have absolutely no regrets. Now, any family shot takes a few minutes. I can capture my kids sports in multi shot sports mode and I now get much higher quality pictures that will last me a lifetime.
So I would advice anyone with a family to get a good digital SLR. It costs more for sure. But the benefits you get will outweigh the higher cost compared to cheap digital cameras.
No annual fee credit cards - There's tons of debate about whether credit cards are good or evil. But everyone seems to agree that if you do get a credit card, it should be one with no annual fee. In fact, I've never seen a blog post recommending a card that charges an annual fee (perhaps with the exception of mine!!). If not that, they would recommend getting cash rewards credit cards (with no annual fee off course) or do some balance transfer arbitrage where you get 0% financing from credit card companies and take the proceeds into a high yield savings accounts.
I took a different path. I use a charge card instead (although I do have other no-fee cards). Yes, I have to pay an annual fee (although I get rewards), and I have to pay in full every month (which everyone should do anyway). But more importantly, I have no preset spending limit and hence have not suffered any of the credit limit cuts that many folks have faced.
While credit card companies have been cutting credit lines, raising interest rates, introducing annual fees and reducing the attractiveness of 0% teaser deals, they have not done much to folks who have charge cards and pay their bills in full (unless off course they have been late or something).
Folks who have airline miles credit cards pay an annual fee. But because miles they earned are transferred to their frequent flier program, they will never risk losing the miles that they have earned if their credit card gets canceled by the issuer for any reason. And that is another downside to getting a "no annual fee" rewards card. If the credit card company decides to cancel your account, you can lose all the miles that you have earned!
How to avoid the cheap-at-all-cost mentality
One of the things that struck me when I read The Millionaire Next Door is that even though millionaires are frugal, they do not just buy "cheap stuff". One of the examples used is that they buy antique furniture that holds their value rather than cheap Ikea stuff! I think there is a lesson to be learned from them. Buying the cheapest stuff isn't always the way to go. Here is a checklist to see if the cheapest or highest rate offers have a catch in them:
Are the products skimping on customer service? - Well, you know the customer service of the big computer makers. Are you willing to compromise that for a lower price? If not, perhaps a custom made computer or an Apple Computer may be a better purchase even though it costs more.
Are the products durable? - Many cheaper products simply do not last long. I have bought many do-it-yourself Ikea products made of chipboard and they never lasted more than 18 months!
Do cheaper products really serve your purpose? - The example of my digital camera experience should be an eye opener. We bought our first camera because we set a budget, but we did not do any research to see if we would be happy with it or not. It wasn't that we could not afford a more expensive one. It was just that we came up an arbitrary number like "we won't spend more than $350 on our camera." We did not realize that the cheaper camera would not suit us at all.
I could go on and on but, for every purchase that you make, price is obviously an important factor. You also have to consider the value you get for the price that you are paying as well. Otherwise, you could waste more money and/or end up not being satisfied with the product that you got.
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Yes, Al Gore, There Is Such A Thing as Global Warming
DEAR EDITOR:
I am 61 years old.
Many people continue to say there is no such thing as global warming.
My wife Tipper says, 'If you see it in Len Penzo dot Com, it's so.'
So please tell me the truth; is there such a thing as global warming?
Al ...
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Scary Stories: Fellow Bloggers Share Their Tales of Buyer’s Remorse
According to Wikipedia, buyer's remorse is "an emotional condition whereby a person feels remorse or regret after a purchase." It often refers to higher-priced items that are difficult or impossible to return, thereby making the buyer feel like, well, a complete idiot.
If you've ever felt a twinge of regret or self-doubt and caught yourself saying "I should have known better," then you've definitely experienced the heartache of buyer's remorse.
Buyer's remorse most often occurs after you discover you...
1) were sweet-talked by a smooth-talking salesman into buying something you didn't really need, or
2) were goaded into buying something you didn't really want because of a high-pressure sales pitch, or
3) were caught in a moment of weakness and made an impulse buy, or
4) failed to do the proper research and/or verify your ability to really afford it.
I saw a commercial that said four out of five dentists surveyed have experienced a severe bout of buyer's remorse at least once or twice in their lifetime. And although I'm not a dentist, I did write a guest post over at Ask Mr. Credit Card chronicling one of my worst experiences with buyer's remorse.
It's okay to admit it, you know - we're not the only ones crying in our (root) beers. To prove it, I asked a few of my favorite bloggers to share some of their stories. So grab a tissue and let the pity party begin!
From Ray, proprietor of Financial Highway: My worst purchase was a CyberShot 3.2 megapixel digital camera I bought six years ago for almost $1000 on credit while a student with no income.
From J. Money, proprietor of Budgets Are Sexy: Haha...Does my house count? Whenever I hear "buyer's remorse," the first thing that comes to mind is my house. Not that it was the only thing I've ever questioned (I can't even count THOSE numbers of times), but just that it's the only product you can't return and get your money back when you need to. ;) I love our 3-level lake view townhouse dearly, but what I wouldn't give to be back in the city rockin' out in a cozy 1 bedroom condo! Now is this anyone's fault other than my own? Nope. And have I learned a lot about getting my finances on track and being more responsible? Oh yeah. But if I could do things over (and keep the knowledge I have now), I would totally go back to renting and feeling "un-trapped." Whether my wife would be okay it or not, however, is a whole other story. ;)
From Moneywatch: My worst recent purchase was the bike I bought to save money after I got rid of my car. It cost 110 ($175) and I have ridden it three times in a year.
From Tom, proprietor of The Canadian Finance Blog: I bought a car a few years ago without getting it inspected or having its records checked. Turned out the car was in an accident and written off. When I did get it looked at, the rear bumper was partially held on by duck tape!
From Four Pillars: My house - we rushed into a huge remodel project without knowing the costs. Things worked out okay but it wasn't a good move. The renovation was too expensive and as a result, the house ended up costing a lot more than planned. We just didn't research it.
From Jason, proprietor of Redeeming Riches: I bought a brand new car on a "Smart Buy" from GM, not realizing a balloon payment was due four years later - buyer's remorse kicked in then!
From The Investor, proprietor of Monevator: Buyer's remorse kicked in over my iPhone almost as soon as I bought it. For a start, I'm not using anything like enough of its functions, and have barely downloaded a dozen apps so far. Worse, some of those are financial apps making it tempting to check up on the stock market index level -- a bad, wealth-destroying habit if it encourages you to over-trade. The camera isn't as good as I expected, and 3G coverage is poor where I live. Adding to the misery, like any good money blogger, I worked out the total iPhone bill in advance for my 18 months minimum ownership, so I know I am paying over $1,500 in your pesos for the pleasure of this disappointment. Finally, to buy it I had to track it down via multiple shops and phone calls -- there was a run on 3GS iPhones in London at the time -- which reminded me how time-consuming buying stuff is. I mean to blog about all this, but unfortunately the blog I actually did write about the iPhone -- before I bought it -- was about how buying one can make you money. The idea behind that post is that too much abstaining things is bad for your money-making morale. My next post will be more straightforward: "Buying stuff costs a fortune, isn't worth it, and could have been spent on income producing stocks instead." Bah humbug!
From The Bobo, proprietor of The Bobo Files: Do marriages count? ;)
From Paul, proprietor of Fiscal Geek: My worst ever was a Chinese ATV for my son that I spend about 60 minutes per attempt to ride to get the battery charged and engine to run. My son still uses it, but it causes me to curse it every time; the safety strap comes out often on turns, killing the engine. I had to replace the battery three times and it takes 15 minutes to "warm-up" even when the temp is 80 degrees F outside - but I saved $400. Yeah right.
From Bret, proprietor of Bret Frohlich dot Com: We lost the transmission in our minivan and I needed to buy something quick for my wife to get the kids around. My wife wanted a Jeep Cherokee. I found a '94 Country Edition for around $4300 at one of those flea-bag dealers and we bought it with a credit card. My thinking at the time was that I definitely didn't want to buy a new vehicle on five years of payments. And, the Jeeps I was looking at were too cheap to get a car loan from my bank. So, I figured I would just drop it on the card and make some big payments and I would have it paid off in about a year. Unfortunately life doesn't always go as planned. Two and a half years later I paid off the credit card, right about the time the Jeep died. I don't recommend anyone else try this at home.
Speaking of credit cards...from Mr. Credit Card, proprietor of Ask Mr. Credit Card: Buyer's remorse? - uh, taking a loan on my car rather than paying cash... because I could have sold stocks at the highs in the early part of 2008!
From SpendOnLife: My worst purchase ever: Zebra print jeans, 8th grade, $90 of my Christmas savings money, and I wore them once... money lesson learned!
From Hawk, proprietor of The Debt Hawk: While I love my house now, at the time I bought it, I experienced buyer remorse. It was such a big purchase I over-analyzed it.
From SVB, proprietor of The Digerati Life: As participants in the dot com boom and subsequent bust, my household at one point had felt comfortable enough to take on big projects for our house. We bought a new house right at the end of the dot com boom and felt compelled to make further improvements to it -- my spouse and I earmarked some stock options to pay for those improvements. Lo and behold, after committing to the projects and several months into the work, the dot com bust begun in earnest. The value of our stock options evaporated quickly and I felt immediate buyer's remorse! We had redeemed just enough of those options to pay for the projects, but it still did not remove my guilt for instigating the job. In hindsight, I do NOT regret the improvements -- I enjoy my home everyday; however, I consider it to be the worst timed purchase I ever made. And if the bust happened earlier, we would never have signed up for the work (and wouldn't have bought the home entertainment system that we ended up owning).
From Me Without Debt: I usually think through big purchases and don't remorse, even though I may be disappointed. My buyer's remorse comes from many small-to-medium sized purchases like expensive meal upgrades at restaurants... or extra drinks you buy when you are slightly drunk.
Boy, what a bunch of dolts! Can you believe most of these people are dispensing financial advice faster than the U.S. Treasury is printing money? Hey, now - I'm just kidding!!! ;-)
But honestly, stupid purchases happen to almost all of us - at least those of us who are willing to admit it. ;-)
I'd like to give a big THANK YOU to everybody who took a chance and shared their story with me! If you have a sad story of buyer's remorse that can top some of the ones you just read, why don't you take a minute and leave a comment so we can all share your pain? Pretty please?? After all, misery loves company, right? ;-)
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Drive-By Movie Review: Cloudy With a Chance of Meatballs
This is a review of the 2009 animated feature Cloudy With a Chance of Meatballs starring the voices of James Caan, Neil Patrick Harris, Benjamin Bratt, Mr. T, Bill Hader, and Anna Faris.
Plot Summary: A timeless tale adapted from Ron and Judi ...
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Drive-By Movie Review: The Machinist
This is a review of the 2004 movie The Machinist starring Christian Bale and Jennifer Jason Leigh
Plot Summary: Trevor Reznik is a factory lathe worker who can barely tell whether he exists anymore. He hasn't slept for a year and he is so thin he is ...
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Killer Asteroid? Personal Finance Strategies For the End Times
You're traveling through another dimension, a dimension not only of sight and sound, but of mind. A journey into a wondrous land whose boundaries are that of imagination. That's the sign post up ahead, your next stop...The Personal Finance Twilight Zone.
So I was reading this story yesterday about a man who quit his laboratory job for a French oil company in 2006 so he could begin preparing for what he believes will be the upcoming end of the world. In fact, he basically sold everything he had and invested his money and time in trying to prepare for the coming apocalypse.
Imagine that.
This guy is absolutely convinced the world will end on December 21, 2012.
His evidence? An ancient Maya cyclical calendar that runs out on that date, supposedly with catastrophic consequences. He also refers to the ancient Egyptians, who, he claims, saw 2012 as a year of great change. And he points to a NASA prediction of a sharp increase in the number of sunspots and sun flares for 2012; he believes the spots will lead to widespread electrical failures and satellite disruptions.
Is this guy up a tree? Probably. Okay - yes, yes. He's a total nut job.
What is really sad is if the end of the world fails to come in 2012 as he expects, the only Armageddon this guy is going to be dealing with is the one that relates to his personal finances.
And that's too bad for him.
Yeah. Heh. What a kook. Sheesh. Some people.
Yep, yep, yep. (sigh)
Then again...
What if he is right? What if the world was going to end?
Such a scenario got me thinking about how I would look at my finances if I knew the exact day the world was going to end. Would I handle them any differently than I do today?
For me, the answer is, "it depends on the time horizon."
Let's first assume we did know with total certainty that the world was doomed to end, but instead of the final day coming on December 21, 2012, it was set to arrive twenty years later in 2032.
Exactly how would the world end? Your guess is as good as mine, but for the sake of argument, let's assume astronomers identified a very large killer asteroid that was virtually guaranteed to collide with Earth on December 21, 2032. And unlike what we saw in the movie Armageddon, Bruce Willis and Billy Bob Thornton wouldn't be available to save the Earth from total annihilation.
On December 21, 2032, it's all over - except for the cockroaches.
Boom boom...out go the lights.
Such a scenario begs a lot of questions with respect to how we would handle our personal finances.
For example, would you quit or change your current job? Would you change how you handle your 401(k) contributions? What would you invest in? Would there be anything worth investing in?
What about your obligations to your creditors? Would you continue paying your mortgage and credit card bills?
And would you sell your house and become a renter because owning real estate would look a lot less attractive? (And you thought you had it bad when you found out your house sits on land subject to an emphyteutic lease.)
After thinking about this particular scenario for a long time I came to the conclusion that, for me, very little would change.
I would keep my job, and I would also continue to contribute to my 401(k) just as I currently do. Assuming I knew the exact date that the world would end, I would try to go about my life as usual, saving enough money such that I would have enough to comfortably retire a dozen years in advance of that fateful day.
In terms of how I would spend my money, it would really be no different than if I didn't know a killer asteroid was going to obliterate the planet.
I may be naive here but I also suspect, for the most part, the world would continue functioning in a business-as-usual mode too if for no other reason than it would have no other choice.
Now let's take the other extreme on our time horizon. Let's assume that our ex-lab worker's intuition is absolutely spot-on and our end-of-the-world time line is significantly shorter. Instead of twenty years out, the date of our killer asteroid impact coincides exactly with the end of the Mayan calendar on December 21, 2012.
This time my retirement would obviously be much shorter - but the good news is it would also be much more extravagant! With such a short time line I, like that lab worker, would immediately quit my job and cash in all my chits with the aim of living an extremely comfortable lifestyle between now and the end of 2012.
Of course, I am once again assuming society would maintain some semblance of civility during this time.
As long as that assumption holds true, the goal would be to spend my money like there was (almost) no tomorrow, until my last dollar was spent on December 21, 2012.
I find it just a bit ironic that, as far as my personal finances are concerned, knowing the end of the world was relatively close in time might just allow me to live the opulent lifestyle I would never dream of living otherwise.
So How About You?
How would you handle your finances if you knew the exact date that the world was going to end?
I think the set of potential answers are as wide as the ocean is deep.
And so you there have it. The poles of fear. The extremes of how Earth might conceivably be doomed. Just a minor exercise in the care and feeding of a hypothetical nightmare. Respectfully submitted by all the asteroid watchers... in The Personal Finance Twilight Zone.
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Drive-By Movie Review: Breach
This is a review of the 2007 movie Breach, starring Chris Cooper, Ryan Phillipe, Laura Linney and Denis Haysbert.
Plot Synopsis: Based on the true story, FBI upstart Eric O'Neill enters into a power game with his boss, Robert Hanssen, an agent who ...
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Is LifeLock and Its $1 Million Guarantee A Sham?
By now, most everybody has heard or seen the ubiquitous ads by LifeLock where its founder and chief executive officer, Todd Davis, intimates the impenetrable fortress-like quality of his identity theft protection service by brazenly giving out his ...
Continue reading Is LifeLock and Its $1 Million Guarantee A Sham?
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