Motivation Monday Graduation – Find and Do What You Love

by David@MoneyNing.com · 7 comments

This is the graduation post of Motivation Monday as I believe I’ve found the ultimate motivation – passion.  As some of you know, I’m going to be blogging full time starting in November of this year.  Even though it is quite a few months away, I’m very excited at my new venture and cannot wait to get started.  Even though my boss asked me to stay at work until the end of October, I have so many ideas of what I want to do with my blogs already and will try to implement them even if I lose sleep doing so.

In previous posts, I’ve spoke about passion as it relates to motivation.  I told you that if you love what you do:

  • You won’t complain about the workload
  • You won’t feel Monday Blues
  • You won’t try to find excuses to slack off

Instead, you will:

  • Just do what it takes to accomplish the task
  • Think about it day and night without knowing
  • Have all the energy to talk about it
  • Feel happy working on it

I never knew what passion was.  I hear other people talk about it but I never quite understood it, nor did I know how to find it.  I knew finding my passion should be a priority in my life but I had no clue how to do it.  As a result, I was a little frustrated for a few years of my life.

Luckily though, I stumbled onto blogging a few years ago when I started writing about money.  It was fun to interact with others about this subject and it made me feel good to know that I helped a few people along the way.

As I got deeper into blogging, I slowly began to understand what passion was.  I began to understand what it felt like doing what I loved.  The time I spend on my blogs was long but it was fun at the same time.  My wife asked me at the beginning why I could spend so much time in front of my computer but she slowly absorbed my enthusiasm and the answer began to feel obvious to her too.

To say blogging changed my life was an understatement, as everyone I knew began to see the changes in me.  I was happier, more energetic and showed more enthusiasm in everything I did.

I really feel like I graduated on the motivation front.  If you are on the fence of deciding whether to take the plunge of doing what you love, then I have to tell you to go for it.

There is no question that finding my passion motivated me.  I hope that you will find yours too.

The 401k Debit Card: Is This a Good Idea?

by Miranda Marquit · 4 comments

In our society, access to money is a big deal. We want instant access (usually via some form of plastic card) to money. And, in an era where lending standards are making it difficult to take out loans, all sorts of ideas are popping up to help us access — rather quickly — money that may be “ours”, but not as liquid as we’d like it to be. One of these is a 401k debit card that is being offered.

How a 401k debit card works
It’s pretty straightforward. You pay a setup fee and other fees to have a debit card linked to your 401k retirement account. Now, if you are not eligible for non-penalty withdrawal it is fairly obvious what is going on here: You are actually getting a loan against your 401k. I am going to repeat that: The 401k debit card is actually a loan against your retirement account. This means that you have to pay the money back with interest — just as you would when you take out a regular loan against your 401k. The debit card just eliminates the paperwork — and lets you borrow and borrow in a revolving manner as long as there is money in your account.

Why the 401k debit card is a bad idea
First of all, the 401k debit card is a bad idea because you are taking money out of your retirement account. That’s always a bad idea if you are not, in fact, a retiree. It reduces the principal you have in your account, and can severely limit how much money you earn over time for retirement.

Another issue is that payments are made by the employee, through monthly statements. In a traditional 401k loan, payments can be made through payroll — ensuring that you are making payments and avoiding early withdrawal penalties. With the 401k debit card, no such protection is made. If you you miss payments on your card, you could default on your 401k loan, and that means you will have to pay the early withdrawal penalties, further decimating your retirement savings.

Bottom line: A 401k debit card really is no such thing. Perhaps it should be referred to as the “401k secured credit card.”  Unfortunately, it is yet another way for Americans to trade their future financial security for instant gratification.

Whether I Should Buy an Investment Property in The Current Housing Slump

by David@MoneyNing.com · 68 comments

With the housing market in one of the biggest slump in decades, I’m contemplating the possibility of buying an investment property.  Those who know me will probably think that I’m nuts because I don’t even own a primary residence but let me explain the reasons why I haven’t bought a house in more detail.

Current Living Environment
I just got married in February and moved into a gorgeous apartment.  There are lots of free amenities and activities for residences that we truly enjoy.  The rent is not cheap but at least it is still affordable and we decided when we moved that it was worth the extra cost.  In fact, the apartment turned out better than we originally thought.  After we moved here, we were both happier and found ourselves enjoying life much more.

It is impossible for Emma and me to afford buying a house with all these amenities in our current financial situation, so if we buy a property, we will in effect downgrade our quality of life.

The Unused Space
We currently live in a one-bedroom apartment and although you can argue that we can use a second bedroom, the space we have is plenty for the two of us.  If we buy a place, we will at least get a 2-bedroom, if not a 3-bedroom condo/house because we don’t plan to move when we have kids.

This means that we will just be paying extra property tax for the unused space until we can grow into the house.

Renting Part of the House
Many homeowners in California rent out unused rooms to help pay the monthly mortgage.  I thought about buying a home and doing this too but since I work on my blog so many hours of the day, I don’t want to run the risk of my tenants causing distractions when they are in the house.

Why an Investment Property Seems to Make Sense

Since I convinced myself that buying a house might not suit my circumstances, I thought about buying a smaller piece of property and renting it out.  The reasons below seem to make this a sound choice.

We are in a Housing Slump
Most people are much happier buying a house when the market is going up but all we end up doing is overpaying for the properties.  I remember hearing stories of bidding wars in California where people were putting in bids of 15-20% over asking price in hopes that they will get the property.

The story is completely different these days.  Realtors are begging potential home buyers to look at houses and buyers who are interested are putting in bids as low as 40% below asking price.  It is in these markets where a first time home buyer like me can take my time and pick a good location.

Practice Makes Perfect
This investment property will be a smaller and less expensive place than my primary residence down the road.  If I can use this time to learn what I like and dislike about houses and sharpen my skills in the home buying process, it will only benefit me down the road.

Long Term Investments
Unlike my primary home where the emphasis will be on livability, the emphasis of an investment property is return on investment.  As long as the rent is generating a positive cash flow after expenses, I can ride the highs and lows of the market and still come out ahead.

Alternative Investments

There are so many other options out there for my money like stocks, bonds, CDs, and even investing in businesses.  Why am I thinking about real estate?

Real Estate versus Stocks
I currently own some stocks, but it is almost a part time job keeping up with them.  I want to get into a more passive approach and something that will generate an income for me.  If I buy any individual stock, I run the risk of it never recovering.  If I buy the index fund, I don’t get the income.

Another major benefit is that I won’t check my property performance like I would my stocks.  This will keep me from being emotional when the market tanks so I can focus on my other day-to-day operations (like writing on my blog).

Real Estate versus Bonds or CDs
Since this is a long term investment, I need something that gives me a higher rate of return.  Bonds and CDs are great for safety but the return on investment when my time horizon is taken into account is unsatisfactory.

Real Estate versus Investing in Businesses
This is an interesting alternative but I will definitely want to be involved with the business if I ever invest in one.  This is the total opposite of passive.

Real Estate versus All
It is a nice feeling to own a piece of real estate since it is an asset that you can actually see.  Furthermore, there are amazing tax incentives in the United States for owning real estate.  I believe the specific rule is tax free capital gain for the first $500,000 as long as you have been living in it for 2 out of the last 5 years.  So if we are lucky enough to pocket some gains on this property, all we have to do is move there for 2 years and then sell it.

What Do You Think?

Even though in theory this all make sense, it does not mean that it’s necessarily practical.  Does anyone agree with what I’ve said or can anyone think of something that I’m not seeing?  As a next step, I will start looking at the closing and renting prices of various properties to see if I can generate a positive cash flow.  I will keep you updated and I look forward to hearing your thoughts.

Saying Yes to Up-Sell is Saying No to Being Frugal

by David@MoneyNing.com · 43 comments

Emma and I went to a pretty fancy restaurant to celebrate my wife’s birthday.  After we sat down, our waitress pleasantly asked us “Would you like some wine tonight?”  We just experienced a form of up-sell.

What is Up-Sell
Up-sell is the act of suggesting a higher priced product or service to a customer who is about to purchase.  What we experienced at the restaurant is no different than the cashier at Starbucks asking us to buy a grande sized mocha instead of tall or at McDonald’s when the cashier asked whether we wanted a combo rather than just the sandwich.

What It Means for the Company
These forms of up-sell are very popular because it works.  While at the restaurant, almost everyone that she asked ordered wine.  If she didn’t ask on the other hand, I bet half of those people will forget to do so.

What It Mean for Customers Like Us
On many levels, up-selling is actually good for customers like us.  We are given a choice which helps us realize that there are better options for our purchase.  When we are at McDonald’s, we are reminded that we can get that extra drink and fries at half price by buying the combo.

There is however one negative side effect of up-selling because agreeing to buying the more expensive product is not a frugal practice.  We all know that we are not too disciplined when it comes to spending.  When we are given a choice to buy the better product, chances are we will.  At the restaurant, everyone that ordered wine ended up paying more.  They ordered it because they wanted it, not necessarily because they can afford it.

When someone gives us a choice for a better product, we might not instantly realize how it affects us long term.  Sure we had a great time drinking wine, but what about the mortgage payment due next month?

What We Should Do
Now that we understand what up-selling is, we made a very good first step in keeping our wallets intact.

We routinely make purchasing decisions and if you are like me, sometimes that decision happens on the spot.  We wait until we are at the register to figure out which combo we want, we ask for pricing on a product without doing research, and we really only decide what to buy until we see it at the store.

On the other hand, if we already know what we want before we have to decide, it would be much easier to assess the effects of the extra choice when it’s presented to us.  Just to illustrate, if we knew that we wanted two sandwiches with water before we go into McDonald’s, we won’t end up with a combo and end up paying more. Who really needed all the extra sweets and oil?

Motivation Monday – Find Your Passion

by David@MoneyNing.com · 8 comments

feel passionate and motivation will show up

Often, we lack motivation and resort to looking for excuses why something is unnecessary, why the task should be done by someone else and why we can wait till tomorrow to do it.  In the meantime, we search for tips and tricks all over the place to help boost our motivation.  Most of the suggestions seem useless and even if one of them worked, it would be short lived.

If this is happening, you are lacking passion.  At work, we talked about this subject thoroughly.  My boss no doubt wanted us to have it for the business our company was in.  He told us

If you are passionate, then you wouldn’t think about the time you spend doing it. It wouldn’t matter if you were working on it in the day time, night time or even on the weekend. All you think about is how to accomplish the task and not how not to do it today. Things become fun, because you are thinking about the result and not the time spen.t

When I heard this, I thought to myself how wonderful the feeling would be but I didn’t quite understand it. I didn’t know how to gain this “passion” and I didn’t know what I could do to achieve it.

After a couple of months, I finally realized something – We are either passionate about something or we are not. It is very difficult to develop passion for something if you don’t feel passionate about it already. Sure, the feeling is possible to develop, but it’s a long process and we cannot force yourself along the way.

Another realization was that even if we aren’t passionate about a particular subject, it just means we haven’t found the right subject. For example, we can be passionate about cooking but not golfing, or we can be passionate about politics but not stocks. So unless you really want to develop the passion for a particular subject, it is much easier to just find the one that you love.

If motivation is lacking, then find something you are passionate about. Once the passion is there, it is very easy to get things done.

Like my boss says, “time is never a problem, you are just having fun”.

Weekend Roundup and MoneyNing Quoted in the New York Times

by David@MoneyNing.com · 10 comments

moneyning quoted in the new york times

One of my readers congratulated me on being quoted on the New York Times recently. With more and more people starting to look at blogging as a source of insightful information, there is no doubt that blogging is becoming main stream.

As a reader of this blog, you can take pride in knowing that you were one of the early adopters of this medium and that you were part of the transformation of blogging from being a hobby to a profession. While some of you are occasional readers that stumble onto this site, others have enjoyed articles by being subscribers of the blog. If you’d like to continue to enjoy personal finance articles, the third option is to get automatic email updates by subscribing through email in the form below.

It’s always enjoyable to read great personal finance articles and this week offered plenty.  Here are a few that I’d like to hightlight.

  • The Simple Dollar shares with us how he and his wife got on the same page financially.
  • My Two Dollars asks a question on a decision we make constantly – How Do You Decide to Tip or Not?
  • Canadian Capitalist teaches us how we should choose a financial adviser, great advice whether we are Canadian or American.
  • With the interest rate so low, The Digerati Life helped me find a good savings option: The WaMu online savings account with 3.3% yield.
  • Squawkfox has a huge list of reasons why we should use reusable shopping bags.
  • Blunt Money’s grandmother was always prepared with extras and now Blunt Money is emulating her.  What a great feeling to know that you won’t run out of things.
  • Four Pillars lets us in on his secret to getting anything he wants.
  • Unlike last week’s tip to get a free book, you can definitely still get in on this one.  Clever Dude is giving away a free book and all you have to do is leave a comment.
  • Blueprint discusses four reasons to shop at the farmer’s market.  Support the locals.

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